%PDF-1.5 1 0 obj <> endobj 3 0 obj <> endobj 4 0 obj <> stream BT /F1 9.00 Tf ET BT /F2 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 297.65 31.60 Td (- 1 -) Tj ET Q /GS0 gs q 165.00 0 0 54.00 50.00 695.00 cm /I1 Do Q BT /F2 10.00 Tf ET BT /F3 13.00 Tf ET q 0 0 0 rg BT 87.70 653.00 Td (T) Tj ET Q q 0 0 0 rg BT 95.41 653.00 Td (wo Harbors Investment Corp. Reports ) Tj ET Q BT /F3 13.00 Tf ET q 0 0 0 rg BT 312.78 653.00 Td (Second Quarter) Tj ET Q BT /F3 13.00 Tf ET q 0 0 0 rg BT 401.00 653.00 Td ( ) Tj ET Q BT /F3 13.00 Tf ET q 0 0 0 rg BT 404.25 653.00 Td (2013) Tj ET Q BT /F3 13.00 Tf ET q 0 0 0 rg BT 430.25 653.00 Td ( Financial Results) Tj ET Q BT /F4 12.00 Tf ET q 0 0 0 rg BT 192.95 638.60 Td (Pr) Tj ET Q q 0 0 0 rg BT 204.50 638.60 Td (eserved Book V) Tj ET Q q 0 0 0 rg BT 277.81 638.60 Td (alue in a V) Tj ET Q q 0 0 0 rg BT 328.80 638.60 Td (olatile Envir) Tj ET Q q 0 0 0 rg BT 388.68 638.60 Td (onment) Tj ET Q BT /F3 11.00 Tf ET q 0 0 0 rg BT 50.00 606.40 Td (NEW) Tj ET Q q 0 0 0 rg BT 76.08 606.40 Td ( ) Tj ET Q q 0 0 0 rg BT 78.42 606.40 Td (YORK, ) Tj ET Q BT /F3 11.00 Tf ET q 0 0 0 rg BT 116.32 606.40 Td (August6, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 185.69 606.40 Td ( - ) Tj ET Q BT /F2 11.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.54 w 0 i [] 0 d 1 J 1 j 3 M 194.75341796875 604.93369140625 m 331.359375 604.93369140625 l s q 0 0 1 rg BT 194.65 606.40 Td (T) Tj ET Q q 0 0 1 rg BT 200.61 606.40 Td (wo Harbors Investment Corp.) Tj ET Q BT /F2 11.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 331.36 606.40 Td ( \(NYSE: ) Tj ET Q q 0 0 0 rg BT 372.10 606.40 Td (TWO; NYSE MKT) Tj ET Q q 0 0 0 rg BT 458.33 606.40 Td (: ) Tj ET Q q 0 0 0 rg BT 463.93 606.40 Td (TWO.WS\), a real ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 593.25 Td (estate investment trust that invests in residential mortgage-backed securities \(RMBS\), residential mortgage loans, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 580.05 Td (mortgage servicing rights and other financial assets, today announced its financial results for the quarter ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 566.85 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 111.41 566.85 Td (.) Tj ET Q BT /F5 11.00 Tf ET q 0 0 0 rg BT 50.00 534.60 Td (Highlights ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 509.45 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 509.45 Td (Book value was $10.47 per diluted common share, representing a \(3.7%\)) Tj ET Q BT /F2 11.00 Tf ET BT /F2 7.15 Tf ET q 0 0 0 rg BT 407.05 514.43 Td (\(1\)) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 415.39 509.45 Td ( return on book value, after ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 496.25 Td (accounting for a cash dividend of $0.31 per share. ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 68.00 469.85 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 469.85 Td (Incurred Comprehensive Loss of $146.1 million, or $0.40 per diluted weighted average common share. ) Tj ET Q q 0 0 0 rg BT 542.59 469.85 Td (Y) Tj ET Q q 0 0 0 rg BT 549.43 469.85 Td (ear) Tj ET Q q 0 0 0 rg BT 562.64 469.85 Td (-) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 456.65 Td (to-date Comprehensive Income of $101.9 million, a return on average equity of 5.2%, or $0.30 per diluted ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 443.45 Td (weighted average common share.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 418.25 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 418.25 Td (Reported Core Earnings of $78.1 million, or $0.21 per diluted weighted average common share. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 391.85 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 391.85 Td (Generated an aggregate yield of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 229.23 391.85 Td (3.7%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 252.14 391.85 Td ( in the RMBS portfolio. ) Tj ET Q q 0 0 0 rg BT 359.30 391.85 Td (Y) Tj ET Q q 0 0 0 rg BT 366.63 391.85 Td (ields were driven by non-Agency ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 378.65 Td (performance of 9.1%.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 353.45 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 353.45 Td (Closed on the purchase of Matrix Financial Services, a small servicing company that has seller) Tj ET Q q 0 0 0 rg BT 502.75 353.45 Td (-servicer ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 340.25 Td (approvals from the Federal National Mortgage ) Tj ET Q q 0 0 0 rg BT 293.10 340.25 Td (Association \(Fannie Mae\), the Federal Home Loan Mortgage ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 327.05 Td (Corporation \(Freddie Mac\) and the Government National Mortgage ) Tj ET Q q 0 0 0 rg BT 385.97 327.05 Td (Association \(Ginnie Mae\) to hold and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 313.85 Td (manage mortgage servicing rights \(MSRs\).) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 287.45 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 287.45 Td (Repurchased one million shares of stock at an average price of $10.50 per share, which was accretive to ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 274.25 Td (book value at the time of the repurchase.) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 221.45 Td (The second quarter was quite challenging with respect to rising interest rates and other factors within the mortgage ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 208.25 Td (market, stated ) Tj ET Q q 0 0 0 rg BT 119.13 208.25 Td (Thomas Siering, ) Tj ET Q q 0 0 0 rg BT 194.40 208.25 Td (T) Tj ET Q q 0 0 0 rg BT 200.35 208.25 Td (wo Harbors' President and Chief Executive Of) Tj ET Q q 0 0 0 rg BT 404.35 208.25 Td (ficer) Tj ET Q q 0 0 0 rg BT 423.89 208.25 Td (. W) Tj ET Q q 0 0 0 rg BT 443.78 208.25 Td (e are pleased with the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 195.05 Td (portfolio repositioning that we completed in an ef) Tj ET Q q 0 0 0 rg BT 268.22 195.05 Td (fort to protect our book value. For the first six months of 2013, we ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 181.85 Td (have generated $102 million in comprehensive income, a return on average equity of 5.2%, which we believe is ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 168.60 Td (remarkable given conditions in the sector) Tj ET Q q 0 0 0 rg BT 231.14 168.60 Td (.) Tj ET Q BT /F2 11.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 50.00 115.80 Td () Tj ET Q BT /F2 8.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 50.00 66.60 Td (\(1\) Decrease in book value per diluted share from March 31, 2013 to June 30, 2013 of $0.72, plus dividends declared of $0.31 divided by March 31, 2013 diluted ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 50.00 57.00 Td (book value of $1) Tj ET Q q 0 0 0 rg BT 103.69 57.00 Td (1.19.) Tj ET Q endstream endobj 5 0 obj <> endobj 6 0 obj <> stream BT /F1 9.00 Tf ET BT /F1 9.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 297.65 31.60 Td (- 2 -) Tj ET Q BT /F5 11.00 Tf ET q 0 0 0 rg BT 50.00 741.60 Td (Operating Performance) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 723.40 Td (The following table summarizes the company's GAAP) Tj ET Q q 0 0 0 rg BT 289.86 723.40 Td ( and non-GAAP) Tj ET Q q 0 0 0 rg BT 360.94 723.40 Td ( earnings measurements and key metrics for ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 710.20 Td (the second quarter ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 133.38 710.20 Td (2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 155.38 710.20 Td (:) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 59.50 686.50 340.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 399.50 686.50 50.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 449.50 686.50 51.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 500.50 686.50 56.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 59.50 658.50 340.00 -41.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 399.50 658.50 50.00 -41.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 449.50 658.50 51.00 -41.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 500.50 658.50 56.00 -41.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 59.50 601.50 340.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 399.50 601.50 50.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 449.50 601.50 51.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 500.50 601.50 56.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 59.50 569.50 340.00 -7.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 399.50 569.50 50.00 -7.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 449.50 569.50 51.00 -7.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 500.50 569.50 56.00 -7.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 59.50 544.50 340.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 399.50 544.50 50.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 449.50 544.50 51.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 500.50 544.50 56.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 59.50 512.50 340.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 399.50 512.50 50.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 449.50 512.50 51.00 -16.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 500.50 512.50 56.00 -16.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 399.5 658.5 m 449.5 658.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449.5 658.5 m 500.5 658.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 658.5 m 556.5 658.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 399.5 617.5 m 449.5 617.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449.5 617.5 m 500.5 617.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 617.5 m 556.5 617.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 399.5 617.5 m 449.5 617.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449.5 617.5 m 500.5 617.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 617.5 m 556.5 617.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 399.5 562.5 m 449.5 562.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 399.5 562.5 m 449.5 562.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 399.5 544.5 m 449.5 544.5 l s BT /F3 9.00 Tf ET q 0 0 0 rg BT 62.00 676.95 Td (Two Harbors Operating Performance) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 662.96 Td (\(dollars in thousands, except per share data\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 461.50 662.96 Td (Q2-2013) Tj ET Q BT /F3 9.00 Tf ET 0 0 0 RG /GS0 gs 0.86 w 0 i [] 0 d 1 J 1 j 3 M 62 620.546337890625 m 97.01123046875 620.546337890625 l s q 0 0 0 rg BT 62.00 621.95 Td (Earnings) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 411.75 621.96 Td ( Earnings) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 455.50 639.96 Td ( Per diluted) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 464.00 630.96 Td (weighted) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 478.00 621.96 Td (share) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 511.50 648.96 Td (Annualized) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 520.25 639.96 Td (return on) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 525.00 630.96 Td (average) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 530.50 621.96 Td (equity) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 605.96 Td (Core Earnings) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 113.74 610.04 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 402.00 605.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 416.75 605.96 Td (78,133) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 452.00 605.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 481.25 605.96 Td (0.21) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 534.25 605.96 Td (7.6) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 548.50 605.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 589.96 Td (GAAP Net Income) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 402.00 589.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 412.25 589.96 Td (388,637) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 452.00 589.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 481.25 589.96 Td (1.06) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 529.75 589.96 Td (37.8) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 548.50 589.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 573.96 Td (Comprehensive Income) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 402.00 573.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 409.25 573.96 Td (\(146,076) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 441.50 573.96 Td (\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 452.00 573.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 478.25 573.96 Td (\(0.40) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 497.00 573.96 Td (\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 526.75 573.96 Td (\(14.2) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 545.50 573.96 Td (\)%) Tj ET Q BT /F3 9.00 Tf ET 0 0 0 RG /GS0 gs 0.86 w 0 i [] 0 d 1 J 1 j 3 M 62 547.546337890625 m 133.2265625 547.546337890625 l s q 0 0 0 rg BT 62.00 548.95 Td (Operating Metrics) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 414.00 548.96 Td (Q2-2013) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 532.96 Td (Dividend per common share) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 402.00 532.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 425.75 532.96 Td (0.31) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 516.96 Td (Book value per diluted share at period end) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 402.00 516.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 421.25 516.96 Td (10.47) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 500.96 Td (Other operating expenses as a percentage of average equity) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 430.25 500.96 Td (0.9) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 441.50 500.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 480.76 Td (\(1\) Core Earnings is a non-GAAP) Tj ET Q q 0 0 0 rg BT 183.90 480.76 Td ( measure that we define as net income, excluding impairment losses, gains or losses on sales of ) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 471.76 Td (securities and termination of interest rate swaps, unrealized gains or losses on trading securities, interest rate swaps and swaptions, ) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 462.76 Td (certain gains or losses on other derivative instruments, certain non-recurring gains and losses related to discontinued operations, and ) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 453.76 Td (certain non-recurring upfront costs related to securitization transactions. ) Tj ET Q q 0 0 0 rg BT 323.16 453.76 Td (As defined, Core Earnings includes interest income associated ) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 62.00 444.76 Td (with our inverse interest-only securities \(Agency derivatives\) and premium income or loss on credit default swaps.) Tj ET Q BT /F2 10.00 Tf ET BT /F2 11.00 Tf ET 0 0 0 RG /GS0 gs 0.54 w 0 i [] 0 d 1 J 1 j 3 M 50 415.33369140625 m 134.626953125 415.33369140625 l s q 0 0 0 rg BT 50.00 416.80 Td (Earnings Summary) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 403.60 Td (T) Tj ET Q q 0 0 0 rg BT 55.95 403.60 Td (wo Harbors reported Core Earnings for the quarter ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 310.39 403.60 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 371.80 403.60 Td (, of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 389.21 403.60 Td ($78.1) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 413.96 403.60 Td ( million, or ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 465.91 403.60 Td ($0.21) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 490.66 403.60 Td ( per diluted ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 390.40 Td (weighted average common share outstanding, as compared to Core Earnings for the quarter ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 484.04 390.40 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 554.00 390.40 Td (, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 377.20 Td (of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 61.91 377.20 Td ($89.7) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.66 377.20 Td ( million, or ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 138.61 377.20 Td ($0.29) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 163.36 377.20 Td ( per diluted weighted average common share outstanding. ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 352.00 Td (During the quarter) Tj ET Q q 0 0 0 rg BT 130.81 352.00 Td (, the company recognized:) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 338.80 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 338.80 Td (a net realized gain of $52.4 million, net of tax, due to the sale of RMBS for $189.7 million with an amortized ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 325.60 Td (cost of $137.3 million, and a realized gain on distribution of Silver Bay common stock of $13.7 million ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 312.40 Td (partially of) Tj ET Q q 0 0 0 rg BT 134.37 312.40 Td (fset by realized losses from settlement of mortgage loan forward purchase commitments of $12.5 ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 299.20 Td (million, net of tax;) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 286.00 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 286.00 Td (change in unrealized fair value losses on trading securities, equity securities, mortgage loan forward ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 272.80 Td (purchase commitments and mortgage loans held-for) Tj ET Q q 0 0 0 rg BT 314.57 272.80 Td (-sale of $25.6 million, net of tax;) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 259.60 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 259.60 Td (other) Tj ET Q q 0 0 0 rg BT 108.38 259.60 Td (-than-temporary credit impairment losses on its RMBS of $1.4 million, net of tax; ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 246.40 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 246.40 Td (a net loss of $2.6 million, net of tax, related to swap and swaption terminations and expirations; ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 233.20 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 233.20 Td (an unrealized gain, net of tax, of $255.0 million associated with its interest rate swaps and swaptions ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 220.00 Td (economically hedging its repurchase agreements and available-for) Tj ET Q q 0 0 0 rg BT 377.16 220.00 Td (-sale securities;) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 206.80 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 206.80 Td (an unrealized gain, net of tax, of $1.1 million associated with its interest rate swaps economically hedging its ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 193.60 Td (trading securities; ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 180.40 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 180.40 Td (net gains on other derivative instruments of approximately $27.7 million, net of tax; ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 167.20 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 167.20 Td (a net unrealized gain of $1.5 million on mortgage loans held-for) Tj ET Q q 0 0 0 rg BT 367.72 167.20 Td (-investment, collateralized borrowings in ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 154.00 Td (securitization trust and mortgage servicing rights, net of tax; and) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 140.80 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 86.00 140.80 Td (income from discontinued operations of $1.0 million, net of tax.) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 114.40 Td (The company reported GAAP) Tj ET Q q 0 0 0 rg BT 181.86 114.40 Td ( Net Income of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 250.89 114.40 Td ($388.6) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 281.14 114.40 Td ( million, or ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 333.08 114.40 Td ($1.06) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 357.83 114.40 Td ( per diluted weighted average common share ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 101.20 Td (outstanding, for the quarter ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 201.51 101.20 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 262.92 101.20 Td (, as compared to ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 337.76 101.20 Td ($143.7) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 368.01 101.20 Td ( million, or ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 419.95 101.20 Td ($0.47) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 444.70 101.20 Td ( per diluted weighted ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 88.00 Td (average common share outstanding, for the quarter ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 305.65 88.00 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 375.61 88.00 Td (. On a GAAP) Tj ET Q q 0 0 0 rg BT 434.48 88.00 Td ( basis, the company earned an ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 74.80 Td (annualized return on average equity of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 222.26 74.80 Td (37.8%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 250.67 74.80 Td ( and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 272.05 74.80 Td (15.6%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 300.46 74.80 Td ( for the quarters ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 402.17 74.80 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 463.58 74.80 Td ( and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 484.97 74.80 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 554.93 74.80 Td (, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 61.60 Td (respectively) Tj ET Q q 0 0 0 rg BT 102.43 61.60 Td (. ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 48.40 Td () Tj ET Q endstream endobj 7 0 obj <> endobj 8 0 obj <> stream BT /F1 9.00 Tf ET BT /F1 9.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 297.65 31.60 Td (- 3 -) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 741.40 Td (The company reported Comprehensive Loss of $146.1 million, or $0.40 per diluted weighted average common share ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 728.20 Td (outstanding, for the quarter ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 201.51 728.20 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 262.92 728.20 Td (, as compared to Comprehensive Income of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 457.19 728.20 Td ($248.0) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 487.44 728.20 Td ( million, or ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 539.39 728.20 Td ($0.81) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 564.14 728.20 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 715.00 Td (per diluted weighted average common share outstanding, for the quarter ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 398.82 715.00 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 468.78 715.00 Td (. ) Tj ET Q q 0 0 0 rg BT 474.08 715.00 Td (The company ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 701.80 Td (records unrealized fair value gains and losses for RMBS securities, classified as available-for) Tj ET Q q 0 0 0 rg BT 460.00 701.80 Td (-sale, as Other ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 688.60 Td (Comprehensive Income. On a Comprehensive Income basis, the company recognized an annualized return on ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 675.40 Td (average equity of \(14.2%\) and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 186.22 675.40 Td (26.9%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 214.63 675.40 Td ( for the quarters ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 316.34 675.40 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 377.75 675.40 Td ( and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 399.14 675.40 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 469.10 675.40 Td (, respectively) Tj ET Q q 0 0 0 rg BT 527.02 675.40 Td (. ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 662.20 Td () Tj ET Q BT /F2 11.00 Tf ET 0 0 0 RG /GS0 gs 0.54 w 0 i [] 0 d 1 J 1 j 3 M 50 647.53369140625 m 132.47314453125 647.53369140625 l s q 0 0 0 rg BT 50.00 649.00 Td (Other Key Metrics) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 635.80 Td (During the quarter) Tj ET Q q 0 0 0 rg BT 130.81 635.80 Td (, ) Tj ET Q q 0 0 0 rg BT 136.11 635.80 Td (T) Tj ET Q q 0 0 0 rg BT 142.06 635.80 Td (wo Harbors declared a quarterly cash dividend of $0.31 per common share for the quarter ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 622.60 Td (June 30, 2013. ) Tj ET Q q 0 0 0 rg BT 116.71 622.60 Td (The annualized dividend yield on the company's common stock for the second quarter) Tj ET Q q 0 0 0 rg BT 495.20 622.60 Td (, based on the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 608.20 Td (June 28, 2013 closing price of $10.25, was 12.1%.) Tj ET Q BT /F2 12.00 Tf ET q 0 0 0 rg BT 272.11 608.20 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 595.00 Td () Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 581.80 Td (The company's book value per diluted share, after taking into account the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 375.46 581.80 Td (second quarter) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 439.90 581.80 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 442.65 581.80 Td (2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 464.65 581.80 Td ( dividend of $0.31, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 568.60 Td (was ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 69.86 568.60 Td ($10.47) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 100.11 568.60 Td ( as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 126.68 568.60 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 188.10 568.60 Td (, compared to ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 251.02 568.60 Td ($1) Tj ET Q q 0 0 0 rg BT 261.61 568.60 Td (1.19) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 280.86 568.60 Td ( as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 307.44 568.60 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 377.40 568.60 Td (.) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 542.20 Td (Other operating expenses for the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 196.31 542.20 Td (second quarter) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 260.75 542.20 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 263.50 542.20 Td (2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 285.50 542.20 Td ( were approximately ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 378.66 542.20 Td ($9.5) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 397.91 542.20 Td ( million, or ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 449.85 542.20 Td (0.9%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 472.76 542.20 Td ( of average equity) Tj ET Q q 0 0 0 rg BT 551.15 542.20 Td (,) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 529.00 Td (compared to approximately ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 173.71 529.00 Td ($6.6) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 192.96 529.00 Td ( million, or ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 244.90 529.00 Td (0.7%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 267.81 529.00 Td ( of average equity) Tj ET Q q 0 0 0 rg BT 346.20 529.00 Td (, for the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 383.46 529.00 Td (first quarter) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 435.08 529.00 Td ( 2013. ) Tj ET Q BT /F5 11.00 Tf ET q 0 0 0 rg BT 50.00 489.40 Td (Portfolio Summary) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 471.20 Td (For the quarter ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 147.13 471.20 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 208.54 471.20 Td (, the annualized yield on average RMBS securities and ) Tj ET Q q 0 0 0 rg BT 451.70 471.20 Td (Agency Derivatives was ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 458.00 Td (3.7%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 72.91 458.00 Td ( and the annualized cost of funds on the average borrowings, which includes net interest rate spread expense on ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 444.80 Td (interest rate swaps, was ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 156.61 444.80 Td (1.2%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 179.52 444.80 Td (. ) Tj ET Q q 0 0 0 rg BT 184.82 444.80 Td (This resulted in a net interest rate spread of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 377.56 444.80 Td (2.5%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 400.47 444.80 Td (, compared to ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 463.39 444.80 Td (2.9%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 486.30 444.80 Td ( in the prior ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 431.60 Td (quarter) Tj ET Q q 0 0 0 rg BT 80.54 431.60 Td (. ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 405.20 Td (The company reported debt-to-equity) Tj ET Q q 0 0 0 rg BT 213.92 405.20 Td (, defined as total borrowings to fund RMBS securities, mortgage loans held-for) Tj ET Q q 0 0 0 rg BT 562.27 405.20 Td (-) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 392.00 Td (sale and ) Tj ET Q q 0 0 0 rg BT 87.88 392.00 Td (Agency Derivatives divided by total equity) Tj ET Q q 0 0 0 rg BT 276.86 392.00 Td (, of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 294.28 392.00 Td (3.6) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 308.03 392.00 Td (:1.0 and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 346.22 392.00 Td (3.1) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 359.97 392.00 Td (:1.0 at ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 390.21 392.00 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 451.62 392.00 Td ( and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 473.01 392.00 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 542.96 392.00 Td (, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 378.80 Td (respectively) Tj ET Q q 0 0 0 rg BT 102.43 378.80 Td (.) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 352.40 Td (The company's portfolio is principally comprised of RMBS available-for) Tj ET Q q 0 0 0 rg BT 370.69 352.40 Td (-sale securities and ) Tj ET Q q 0 0 0 rg BT 456.52 352.40 Td (Agency Derivatives. ) Tj ET Q q 0 0 0 rg BT 549.08 352.40 Td (As ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 339.20 Td (of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 61.91 339.20 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 123.33 339.20 Td (, the total value of the portfolio was $15.1 billion, of which approximately $12.2 billion was ) Tj ET Q q 0 0 0 rg BT 530.87 339.20 Td (Agency ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 326.00 Td (RMBS and ) Tj ET Q q 0 0 0 rg BT 101.35 326.00 Td (Agency Derivatives and $2.9 billion was non-Agency RMBS. ) Tj ET Q q 0 0 0 rg BT 376.31 326.00 Td (As of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 403.20 326.00 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 464.61 326.00 Td (, fixed-rate securities ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 312.80 Td (composed ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 97.35 312.80 Td (80.5%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 125.76 312.80 Td ( of the company's portfolio and adjustable-rate securities composed ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 424.96 312.80 Td (19.5%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 453.37 312.80 Td ( of the company's ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 299.60 Td (portfolio. ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 273.20 Td (In addition, the company held $) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 189.91 273.20 Td (1.0) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 203.66 273.20 Td ( billion of U.S. ) Tj ET Q q 0 0 0 rg BT 271.91 273.20 Td (T) Tj ET Q q 0 0 0 rg BT 278.24 273.20 Td (reasuries classified on its balance sheet as trading securities as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 260.00 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 111.41 260.00 Td (. ) Tj ET Q q 0 0 0 rg BT 116.71 260.00 Td (The company also holds $2.7 billion notional of net short to-be-announced \(TBA\) securities as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 246.80 Td (June 30, 2013.) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 220.40 Td (The company was a party to interest rate swaps and swaptions as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 350.28 220.40 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 411.69 220.40 Td ( with an aggregate notional ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 207.20 Td (amount of $24.7 billion, of which $23.7 billion was utilized to economically hedge interest rate risk associated with ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 194.00 Td (the company's short-term LIBOR-based repurchase agreements. ) Tj ET Q endstream endobj 9 0 obj <> endobj 10 0 obj <> stream BT /F1 9.00 Tf ET BT /F1 9.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 297.65 31.60 Td (- 4 -) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 741.40 Td (The following table summarizes the company's investment portfolio:) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 728.20 Td () Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 717.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 717.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 717.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 717.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 693.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 693.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 693.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 693.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 664.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 664.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 664.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 664.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 640.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 640.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 640.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 640.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 616.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 616.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 616.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 616.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 592.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 592.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 592.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 592.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 568.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 568.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 568.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 568.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 544.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 544.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 544.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 544.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 520.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 520.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 520.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 520.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 496.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 496.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 496.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 496.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 472.70 311.00 -23.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 472.70 4.00 -23.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 472.70 101.00 -23.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 472.70 45.00 -23.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 427.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 427.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 427.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 427.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 403.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 403.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 403.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 403.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 379.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 379.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 379.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 379.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 355.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 355.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 355.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 355.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 331.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 331.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 331.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 331.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 307.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 307.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 307.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 307.70 45.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 77.50 283.70 311.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 283.70 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.50 283.70 101.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.50 283.70 45.00 -12.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 77.5 664.7 m 388.5 664.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392.5 664.7 m 493.5 664.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 664.7 m 538.5 664.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392.5 664.7 m 493.5 664.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392.5 628.7 m 493.5 628.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 628.7 m 538.5 628.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392.5 628.7 m 493.5 628.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 628.7 m 538.5 628.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392.5 556.7 m 493.5 556.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 556.7 m 538.5 556.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392.5 556.7 m 493.5 556.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 556.7 m 538.5 556.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392.5 532.7 m 493.5 532.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392.5 521.7 m 493.5 521.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392.5 519.7 m 493.5 519.7 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 77.5 449.70000000000005 m 388.5 449.70000000000005 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392.5 449.70000000000005 m 493.5 449.70000000000005 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 493.5 449.70000000000005 m 538.5 449.70000000000005 l s BT /F3 9.00 Tf ET q 0 0 0 rg BT 80.00 709.10 Td (Two Harbors Portfolio) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 696.96 Td (\(dollars in thousands, except per share data\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 134.10 669.16 Td (RMBS and Agency Derivatives Portfolio Composition) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 428.85 669.16 Td (As of June 30, 2013) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 655.96 Td (Agency Bonds) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 643.96 Td (Fixed Rate Bonds) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 395.00 643.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 445.00 643.96 Td (11,770,146) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 514.75 643.96 Td (77.8) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 530.50 643.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 631.96 Td (Hybrid ARMs) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 456.25 631.96 Td (170,682) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 519.25 631.96 Td (1.1) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 530.50 631.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 104.00 619.96 Td (Total Agency) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 445.00 619.96 Td (11,940,828) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 514.75 619.96 Td (78.9) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 530.50 619.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 607.96 Td (Agency Derivatives) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 456.25 607.96 Td (241,848) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 519.25 607.96 Td (1.6) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 530.50 607.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 595.96 Td (Non-Agency Bonds) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 583.96 Td (Senior Bonds) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 449.50 583.96 Td (2,443,731) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 514.75 583.96 Td (16.1) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 530.50 583.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 571.96 Td (Mezzanine Bonds) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 456.25 571.96 Td (498,963) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 519.25 571.96 Td (3.3) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 530.50 571.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 559.96 Td (Non-Agency Other) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 465.25 559.96 Td (8,793) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 519.25 559.96 Td (0.1) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 530.50 559.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 104.00 547.96 Td (Total Non-Agency) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 449.50 547.96 Td (2,951,487) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 514.75 547.96 Td (19.5) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 530.50 547.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 104.00 523.96 Td (Aggregate Portfolio) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 395.00 523.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 445.00 523.96 Td (15,134,163) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 499.96 Td (Fixed-rate investment securities as a percentage of aggregate portfolio) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 469.75 499.96 Td (80.5) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 485.50 499.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 487.96 Td (Adjustable-rate investment securities as a percentage of aggregate portfolio) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 469.75 487.96 Td (19.5) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 485.50 487.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 201.60 454.16 Td (Portfolio Metrics) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 402.10 463.16 Td (For the Quarter Ended ) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 417.35 454.16 Td (June 30, 2013) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 432.16 Td (Annualized yield on average RMBS and Agency Derivatives during the quarter) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 418.96 Td (Agency) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.25 418.96 Td (2.7) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 485.50 418.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 406.96 Td (Non-Agency) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.25 406.96 Td (9.1) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 485.50 406.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 104.00 394.96 Td (Aggregate Portfolio) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.25 394.96 Td (3.7) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 485.50 394.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 382.96 Td (Annualized cost of funds on average repurchase balance during the quarter) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 349.38 387.04 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.25 382.96 Td (1.2) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 485.50 382.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 370.96 Td (Annualized interest rate spread for aggregate portfolio during the quarter) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.25 370.96 Td (2.5) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 485.50 370.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 358.96 Td (Weighted average cost basis of principal and interest securities) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 346.96 Td (Agency) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 395.00 346.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 460.75 346.96 Td (107.96) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 334.96 Td (Non-Agency) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 138.49 339.04 Td (\(2\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 395.00 334.96 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 465.25 334.96 Td (52.16) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 322.96 Td (W) Tj ET Q q 0 0 0 rg BT 87.77 322.96 Td (eighted average three month CPR for its RMBS and ) Tj ET Q q 0 0 0 rg BT 277.00 322.96 Td (Agency Derivative portfolio) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 310.96 Td (Agency) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.25 310.96 Td (8.7) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 485.50 310.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 92.00 298.96 Td (Non-Agency) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 474.25 298.96 Td (4.0) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 485.50 298.96 Td (%) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 286.96 Td (Debt-to-equity ratio at period-end) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 201.71 291.04 Td (\(3\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 455.95 286.96 Td (3.6 to 1.0) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 262.96 Td (\(1\) Cost of funds includes interest spread expense associated with the portfolio's interest rate swaps.) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 250.16 Td (\(2\) Average purchase price utilized carrying value for weighting purposes. If current face were utilized for weighting) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 241.16 Td (purposes, total non-Agency RMBS excluding the company's non-Agency interest-only portfolio would be $48.80 at June 30,) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 232.16 Td (2013.) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 80.00 218.16 Td (\(3\) Defined as total borrowings to fund RMBS, mortgage loans held-for-sale and Agency Derivatives divided by total equity.) Tj ET Q BT /F2 10.00 Tf ET BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 189.00 Td (While we have had remarkable returns being in an of) Tj ET Q q 0 0 0 rg BT 288.34 189.00 Td (fensive position for the past three years, during the second ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 175.80 Td (quarter we believed it was prudent to position our portfolio defensively given the likelihood of higher interest rates, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 162.60 Td (increased volatility and widening spreads, stated Bill Roth, ) Tj ET Q q 0 0 0 rg BT 316.80 162.60 Td (T) Tj ET Q q 0 0 0 rg BT 322.75 162.60 Td (wo Harbors' Chief Investment Of) Tj ET Q q 0 0 0 rg BT 469.33 162.60 Td (ficer) Tj ET Q q 0 0 0 rg BT 488.87 162.60 Td (. In addition to ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 149.40 Td (the measures we took to preserve book value, we also made significant progress developing our MSR initiative and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 136.20 Td (building our mortgage loan conduit and securitization platform.) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 109.80 Td (The company experienced a three-month average Constant Prepayment Rate \(CPR\) of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 432.73 109.80 Td (8.7%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 455.64 109.80 Td ( for ) Tj ET Q q 0 0 0 rg BT 473.36 109.80 Td (Agency RMBS and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 96.60 Td (Agency Derivatives held as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 185.93 96.60 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 247.34 96.60 Td (, as compared to 7.0% for securities held as of March 31, 2013. ) Tj ET Q q 0 0 0 rg BT 528.48 96.60 Td (The ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 83.40 Td (weighted average cost basis of the ) Tj ET Q q 0 0 0 rg BT 202.73 83.40 Td (Agency portfolio was ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 300.79 83.40 Td (108.0%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 334.70 83.40 Td ( of par as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 389.98 83.40 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 451.40 83.40 Td (, and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 475.53 83.40 Td (107.8%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 509.44 83.40 Td ( as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 70.20 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 119.96 70.20 Td (. ) Tj ET Q q 0 0 0 rg BT 125.26 70.20 Td (The net premium amortization for ) Tj ET Q q 0 0 0 rg BT 277.07 70.20 Td (Agency RMBS ) Tj ET Q q 0 0 0 rg BT 346.75 70.20 Td (AFS was ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 389.53 70.20 Td ($46.8) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 414.28 70.20 Td ( million and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 470.20 70.20 Td ($38.1) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 494.95 70.20 Td ( million for the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 57.00 Td (quarters ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 117.19 57.00 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 178.61 57.00 Td ( and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 199.99 57.00 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 269.95 57.00 Td (, respectively) Tj ET Q q 0 0 0 rg BT 327.87 57.00 Td (.) Tj ET Q endstream endobj 11 0 obj <> endobj 12 0 obj <> stream BT /F1 9.00 Tf ET BT /F1 9.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 297.65 31.60 Td (- 5 -) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 741.40 Td (The company experienced a three-month average CPR of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 305.34 741.40 Td (4.0%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 328.25 741.40 Td ( for non-Agency RMBS held as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 482.54 741.40 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 543.95 741.40 Td (, as ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 728.20 Td (compared to ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 107.42 728.20 Td (2.6%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 130.34 728.20 Td ( for such securities held as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 261.38 728.20 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 331.34 728.20 Td (. ) Tj ET Q q 0 0 0 rg BT 336.64 728.20 Td (The weighted average cost basis of the non-Agency ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 715.00 Td (portfolio was ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 111.10 715.00 Td (52.2%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 139.51 715.00 Td ( of par as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 194.80 715.00 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 256.21 715.00 Td (, and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 280.34 715.00 Td (52.3%) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 308.76 715.00 Td ( of par as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 364.04 715.00 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 434.00 715.00 Td (. ) Tj ET Q q 0 0 0 rg BT 439.30 715.00 Td (The discount accretion was ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 701.80 Td ($37.2) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 74.75 701.80 Td ( million and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 130.66 701.80 Td ($35.3) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 155.41 701.80 Td ( million for the quarters ended ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 291.65 701.80 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 353.06 701.80 Td ( and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 374.45 701.80 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 444.40 701.80 Td (, respectively) Tj ET Q q 0 0 0 rg BT 502.33 701.80 Td (. ) Tj ET Q q 0 0 0 rg BT 507.63 701.80 Td (The total net ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 688.60 Td (discount remaining was $2.6 billion and $2.3 billion as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 306.64 688.60 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 368.05 688.60 Td ( and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 389.43 688.60 Td (March31, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 459.39 688.60 Td (, respectively) Tj ET Q q 0 0 0 rg BT 517.32 688.60 Td (, with ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 545.12 688.60 Td ($1.4) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 564.37 688.60 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 675.40 Td (billion designated as credit reserve as of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 229.30 675.40 Td (June30, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 290.71 675.40 Td (.) Tj ET Q BT /F2 11.00 Tf ET 0 0 0 RG /GS0 gs 0.54 w 0 i [] 0 d 1 J 1 j 3 M 50 642.53369140625 m 238.78857421875 642.53369140625 l s q 0 0 0 rg BT 50.00 644.00 Td (Mortgage Loan Conduit and Securitization) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 630.80 Td (As of June 30, 2013, the company had mortgage loans held-for) Tj ET Q q 0 0 0 rg BT 327.16 630.80 Td (-investment with a carrying value of $401.3 million ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 617.60 Td (and the company's collateralized borrowings had a carrying value of $363.0 million.) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 591.20 Td (As of June 30, 2013, the company held prime jumbo residential mortgage loans with a carrying value of $520.0 ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 578.00 Td (million and have outstanding purchase commitments to acquire an additional $29.2 million. ) Tj ET Q q 0 0 0 rg BT 456.11 578.00 Td (The company has $413.8 ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 564.80 Td (million outstanding under short-term financing arrangements to fund the prime jumbo mortgage loan collateral. ) Tj ET Q q 0 0 0 rg BT 543.14 564.80 Td (The ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 551.60 Td (company's intention in the future is to securitize these loans and/or exit through a whole loan sale.) Tj ET Q BT /F2 11.00 Tf ET 0 0 0 RG /GS0 gs 0.54 w 0 i [] 0 d 1 J 1 j 3 M 50 523.73369140625 m 206.74462890625 523.73369140625 l s q 0 0 0 rg BT 50.00 525.20 Td (Mortgage Servicing Rights \(MSRs\)) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 512.00 Td (On ) Tj ET Q q 0 0 0 rg BT 65.59 512.00 Td (April 30, 2013, one of the company's wholly-owned subsidiaries acquired a company that has seller) Tj ET Q q 0 0 0 rg BT 504.19 512.00 Td (-servicer ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 498.80 Td (approvals from Fannie Mae, Freddie Mac and Ginnie Mae to hold and manage MSRs. ) Tj ET Q q 0 0 0 rg BT 431.66 498.80 Td (This acquisition added ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 485.60 Td (approximately $1.5 million in MSRs to our portfolio, which is captured in the "Other ) Tj ET Q q 0 0 0 rg BT 426.61 485.60 Td (Assets" line item on the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 472.40 Td (Condensed Consolidated Balance Sheet. ) Tj ET Q q 0 0 0 rg BT 230.35 472.40 Td (The company does not originate or directly service mortgage loans, and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 459.20 Td (instead contracts with one or more fully licensed subservicers to handle all servicing functions for the loans ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 446.00 Td (underlying the company's MSRs.) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 419.60 Td (Since quarter end, the company has closed on two small bulk MSR portfolios and has been engaged in advanced ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 406.40 Td (discussions with potential MSR sellers.) Tj ET Q q 0 0 0 rg BT 225.80 406.40 Td (The company anticipates these discussions are likely to result in significant ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 393.20 Td (additional investments in MSR later this year) Tj ET Q q 0 0 0 rg BT 248.59 393.20 Td (. Given MSR transactions are subject to GSE approval and closing ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 380.00 Td (conditions, there is no assurance that such investments will close.) Tj ET Q BT /F2 11.00 Tf ET 0 0 0 RG /GS0 gs 0.54 w 0 i [] 0 d 1 J 1 j 3 M 50 347.13369140625 m 184.7392578125 347.13369140625 l s q 0 0 0 rg BT 50.00 348.60 Td (Credit Sensitive Loans \(CSLs\)) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 335.40 Td (In early 2013, the company began acquiring credit sensitive loans, which are loans that are currently performing, but ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 322.20 Td (where the borrower has previously experienced payment delinquencies and is more likely to be underwater \(i.e., the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 309.00 Td (amount owed on a mortgage loan exceeds the current market value of the home\). ) Tj ET Q q 0 0 0 rg BT 408.28 309.00 Td (As a result, the probability of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 295.80 Td (default on CSLs is higher than on newly originated mortgage loans. ) Tj ET Q q 0 0 0 rg BT 350.00 295.80 Td (As of June 30, 2013, the company had acquired ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 282.60 Td (CSLs with a carrying value of $438.2 million. ) Tj ET Q q 0 0 0 rg BT 255.11 282.60 Td (The company's intention in the future is to either securitize these loans ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 269.40 Td (or hold them in an alternative financing structure.) Tj ET Q endstream endobj 13 0 obj <> endobj 14 0 obj <> stream BT /F1 9.00 Tf ET BT /F1 9.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 297.65 31.60 Td (- 6 -) Tj ET Q BT /F5 11.00 Tf ET q 0 0 0 rg BT 50.00 741.60 Td (W) Tj ET Q q 0 0 0 rg BT 58.96 741.60 Td (arrants) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 723.40 Td (For the quarter ended June 30, 2013, warrant holders exercised warrants to purchase approximately 3.5 million ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 710.20 Td (shares of the company's common stock. ) Tj ET Q q 0 0 0 rg BT 227.44 710.20 Td (This resulted in proceeds to the company totaling approximately $38 ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 697.00 Td (million. ) Tj ET Q q 0 0 0 rg BT 86.67 697.00 Td (As of June 30, 2012, approximately 4.2 million warrants to purchase approximately 4.5 million shares of ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 683.80 Td (common stock remained outstanding with an exercise price of $10.25 per share. ) Tj ET Q q 0 0 0 rg BT 404.14 683.80 Td (The warrants expire on November 7, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 670.60 Td (2013. ) Tj ET Q BT /F5 11.00 Tf ET q 0 0 0 rg BT 50.00 631.00 Td (Share Repurchase) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 612.80 Td (As of June 30, 2013, one million shares had been repurchased by the company under the share repurchase program ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 599.60 Td (for a total cost of $10.5 million. ) Tj ET Q q 0 0 0 rg BT 192.47 599.60 Td (The company may repurchase up to an additional 24 million shares under the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 586.40 Td (existing share repurchase program. ) Tj ET Q BT /F3 11.00 Tf ET q 0 0 0 rg BT 50.00 541.80 Td (Confer) Tj ET Q q 0 0 0 rg BT 82.79 541.80 Td (ence Call) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 523.60 Td (T) Tj ET Q q 0 0 0 rg BT 55.95 523.60 Td (wo Harbors Investment Corp. will host a conference call on ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 320.79 523.60 Td (August7, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 388.33 523.60 Td ( at ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 401.76 523.60 Td (9:00 am) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 437.51 523.60 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 440.26 523.60 Td (EDT) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 461.44 523.60 Td ( to discuss ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 510.03 523.60 Td (second ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 510.40 Td (quarter) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 81.15 510.40 Td ( ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 83.90 510.40 Td (2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 105.90 510.40 Td ( financial results and related information. ) Tj ET Q q 0 0 0 rg BT 289.88 510.40 Td (T) Tj ET Q q 0 0 0 rg BT 295.83 510.40 Td (o participate in the teleconference, please call toll-free \(877\) ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 497.20 Td (868-1835 \(or ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 110.49 497.20 Td (\(914\) 495-8581 ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 181.98 497.20 Td ( for international callers\) Conference Code 96791282, approximately 10 minutes prior ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 484.00 Td (to the above start time. ) Tj ET Q q 0 0 0 rg BT 152.84 484.00 Td (Y) Tj ET Q q 0 0 0 rg BT 159.68 484.00 Td (ou may also listen to the teleconference live via the Internet on the company's website at ) Tj ET Q BT /F2 11.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.54 w 0 i [] 0 d 1 J 1 j 3 M 50 469.33369140625 m 195.31494140625 469.33369140625 l s q 0 0 1 rg BT 50.00 470.80 Td (www) Tj ET Q q 0 0 1 rg BT 73.12 470.80 Td (.twoharborsinvestment.com) Tj ET Q BT /F2 11.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 195.31 470.80 Td ( in the Investor Relations section under the Events and Presentations link. For those ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 457.60 Td (unable to attend, a telephone playback will be available beginning at 12 p.m. ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 390.28 457.60 Td (EDT) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 411.46 457.60 Td ( on ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 427.36 457.60 Td (August7, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 494.89 457.60 Td (, through 12 ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 444.40 Td (a.m. ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 71.69 444.40 Td (EDT) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 92.87 444.40 Td ( on ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 108.77 444.40 Td (August15, 2013) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 181.80 444.40 Td (. ) Tj ET Q q 0 0 0 rg BT 187.10 444.40 Td (The playback can be accessed by calling ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 368.21 444.40 Td (\(855\) 859-2056) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 436.94 444.40 Td ( \(or ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 455.27 444.40 Td (\(404\) 537-3406) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 524.01 444.40 Td ( for ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 431.20 Td (international callers\), Conference Code ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 225.62 431.20 Td (96791282) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 269.62 431.20 Td (. ) Tj ET Q q 0 0 0 rg BT 274.92 431.20 Td (The call will also be archived on the company's website in the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 418.00 Td (Investor Relations section under the Events and Presentations link.) Tj ET Q BT /F3 11.00 Tf ET q 0 0 0 rg BT 50.00 381.60 Td (T) Tj ET Q q 0 0 0 rg BT 56.52 381.60 Td (wo Harbors Investment Corp. ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 363.40 Td (T) Tj ET Q q 0 0 0 rg BT 55.95 363.40 Td (wo Harbors Investment Corp., a Maryland corporation, is a real estate investment trust that invests in residential ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 350.20 Td (mortgage-backed securities, residential mortgage loans, mortgage servicing rights and other financial assets. ) Tj ET Q q 0 0 0 rg BT 529.06 350.20 Td (T) Tj ET Q q 0 0 0 rg BT 535.01 350.20 Td (wo ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 337.00 Td (Harbors is headquartered in Minnetonka, Minnesota, and is externally managed and advised by PRCM ) Tj ET Q q 0 0 0 rg BT 504.57 337.00 Td (Advisers ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 323.80 Td (LLC, a wholly-owned subsidiary of Pine River Capital Management L.P) Tj ET Q q 0 0 0 rg BT 368.64 323.80 Td (. ) Tj ET Q q 0 0 0 rg BT 373.53 323.80 Td (Additional information is available at ) Tj ET Q BT /F2 11.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.54 w 0 i [] 0 d 1 J 1 j 3 M 50 309.13369140625 m 198.06494140625 309.13369140625 l s q 0 0 1 rg BT 50.00 310.60 Td (www) Tj ET Q q 0 0 1 rg BT 73.12 310.60 Td (.twoharborsinvestment.com.) Tj ET Q endstream endobj 15 0 obj <> endobj 16 0 obj <> stream BT /F1 9.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 9.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 297.65 31.60 Td (- 7 -) Tj ET Q BT /F3 11.00 Tf ET q 0 0 0 rg BT 50.00 723.20 Td (Forward-Looking Statements) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 705.00 Td (This press release includes forward-looking statements within the meaning of the safe harbor provisions of the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 691.80 Td (United States Private Securities Litigation Reform ) Tj ET Q q 0 0 0 rg BT 273.63 691.80 Td (Act of 1995. ) Tj ET Q q 0 0 0 rg BT 331.06 691.80 Td (Actual results may dif) Tj ET Q q 0 0 0 rg BT 428.31 691.80 Td (fer from expectations, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 678.60 Td (estimates and projections and, consequently) Tj ET Q q 0 0 0 rg BT 242.65 678.60 Td (, readers should not rely on these forward-looking statements as ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 665.40 Td (predictions of future events. ) Tj ET Q q 0 0 0 rg BT 175.96 665.40 Td (W) Tj ET Q q 0 0 0 rg BT 185.46 665.40 Td (ords such as expect, tar) Tj ET Q q 0 0 0 rg BT 302.23 665.40 Td (get, assume, estimate, project, budget, forecast, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 652.20 Td (anticipate, intend, plan, may) Tj ET Q q 0 0 0 rg BT 208.09 652.20 Td (, will, could, should, believe, predicts, potential, continue, and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 639.00 Td (similar expressions are intended to identify such forward-looking statements. ) Tj ET Q q 0 0 0 rg BT 391.94 639.00 Td (These forward-looking statements ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 625.80 Td (involve significant risks and uncertainties that could cause actual results to dif) Tj ET Q q 0 0 0 rg BT 393.45 625.80 Td (fer materially from expected results. ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 612.60 Td (Factors that could cause actual results to dif) Tj ET Q q 0 0 0 rg BT 242.55 612.60 Td (fer include, but are not limited to, higher than expected operating costs, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 599.40 Td (changes in prepayment speeds of mortgages underlying our RMBS, the rates of default or decreased recovery on the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 586.20 Td (mortgages underlying our non-Agency securities, failure to recover certain losses that are expected to be temporary) Tj ET Q q 0 0 0 rg BT 556.92 586.20 Td (, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 573.00 Td (changes in interest rates or the availability of financing, the impact of new legislation or regulatory changes on our ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 559.80 Td (operations, the impact of any deficiencies in the servicing or foreclosure practices of third parties and related delays ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 546.60 Td (in the foreclosure process, the inability to acquire mortgage loans or securitize the mortgage loans we acquire, the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 533.40 Td (impact of new or modified government mortgage refinance or principal reduction programs, and unanticipated ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 520.20 Td (changes in overall market and economic conditions.) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 488.80 Td (Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 475.60 Td (date made. ) Tj ET Q q 0 0 0 rg BT 100.19 475.60 Td (T) Tj ET Q q 0 0 0 rg BT 106.14 475.60 Td (wo Harbors does not undertake or accept any obligation to release publicly any updates or revisions to ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 462.40 Td (any forward-looking statement to reflect any change in its expectations or any change in events, conditions or ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 449.20 Td (circumstances on which any such statement is based. ) Tj ET Q q 0 0 0 rg BT 284.91 449.20 Td (Additional information concerning these and other risk factors ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 436.00 Td (is contained in ) Tj ET Q q 0 0 0 rg BT 116.70 436.00 Td (T) Tj ET Q q 0 0 0 rg BT 122.65 436.00 Td (wo Harbors' most recent filings with the Securities and Exchange Commission \(SEC\). ) Tj ET Q q 0 0 0 rg BT 503.77 436.00 Td (All ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 422.80 Td (subsequent written and oral forward looking statements concerning ) Tj ET Q q 0 0 0 rg BT 348.55 422.80 Td (T) Tj ET Q q 0 0 0 rg BT 354.50 422.80 Td (wo Harbors or matters attributable to ) Tj ET Q q 0 0 0 rg BT 519.87 422.80 Td (T) Tj ET Q q 0 0 0 rg BT 525.82 422.80 Td (wo ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 409.60 Td (Harbors or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 396.40 Td (above.) Tj ET Q BT /F3 11.00 Tf ET q 0 0 0 rg BT 50.00 360.00 Td (Non-GAAP) Tj ET Q q 0 0 0 rg BT 103.78 360.00 Td ( Financial Measur) Tj ET Q q 0 0 0 rg BT 189.13 360.00 Td (es) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 341.80 Td (In addition to disclosing financial results calculated in accordance with United States generally accepted accounting ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 328.60 Td (principles \(GAAP\), this press release and the accompanying investor presentation present non-GAAP) Tj ET Q q 0 0 0 rg BT 496.81 328.60 Td ( financial ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 315.40 Td (measures that exclude certain items. ) Tj ET Q q 0 0 0 rg BT 211.68 315.40 Td (T) Tj ET Q q 0 0 0 rg BT 217.63 315.40 Td (wo Harbors' management believes that these non-GAAP) Tj ET Q q 0 0 0 rg BT 466.03 315.40 Td ( measures enable it to ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 302.20 Td (perform meaningful comparisons of past, present and future results of the company's core business operations, and ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 289.00 Td (uses these measures to gain a comparative understanding of the company's operating performance and business ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 275.80 Td (trends. ) Tj ET Q q 0 0 0 rg BT 82.18 275.80 Td (The non-GAAP) Tj ET Q q 0 0 0 rg BT 151.74 275.80 Td ( financial measures presented by the company represent supplemental information to assist ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 262.60 Td (investors in analyzing the results of ) Tj ET Q q 0 0 0 rg BT 208.66 262.60 Td (T) Tj ET Q q 0 0 0 rg BT 214.61 262.60 Td (wo Harbors' operations; however) Tj ET Q q 0 0 0 rg BT 360.02 262.60 Td (, as these measures are not in accordance with ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 249.40 Td (GAAP) Tj ET Q q 0 0 0 rg BT 78.73 249.40 Td (, they should not be considered a substitute for) Tj ET Q q 0 0 0 rg BT 283.28 249.40 Td (, or superior to, the financial measures calculated in accordance ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 236.20 Td (with GAAP) Tj ET Q q 0 0 0 rg BT 101.04 236.20 Td (. Our GAAP) Tj ET Q q 0 0 0 rg BT 155.93 236.20 Td ( financial results and the reconciliations from these results should be carefully evaluated. See ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 223.00 Td (the GAAP) Tj ET Q q 0 0 0 rg BT 95.73 223.00 Td ( to Non-GAAP) Tj ET Q q 0 0 0 rg BT 161.93 223.00 Td ( reconciliation table on page 1) Tj ET Q q 0 0 0 rg BT 294.39 223.00 Td (1 of this release. ) Tj ET Q BT /F3 11.00 Tf ET q 0 0 0 rg BT 50.00 186.60 Td (Additional Information) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 168.40 Td (Stockholders and warrant holders of ) Tj ET Q q 0 0 0 rg BT 212.01 168.40 Td (T) Tj ET Q q 0 0 0 rg BT 217.96 168.40 Td (wo Harbors, and other interested persons, may find additional information ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 155.20 Td (regarding the company at the SEC's Internet site at ) Tj ET Q BT /F2 11.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.54 w 0 i [] 0 d 1 J 1 j 3 M 275.88671875 153.73369140625005 m 335.04931640625 153.73369140625005 l s q 0 0 1 rg BT 275.89 155.20 Td (www) Tj ET Q q 0 0 1 rg BT 299.00 155.20 Td (.sec.gov) Tj ET Q BT /F2 11.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 335.05 155.20 Td ( or by directing requests to: ) Tj ET Q q 0 0 0 rg BT 458.27 155.20 Td (T) Tj ET Q q 0 0 0 rg BT 464.22 155.20 Td (wo Harbors ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 142.00 Td (Investment Corp., ) Tj ET Q q 0 0 0 rg BT 131.27 142.00 Td (Attn: Investor Relations, 601 Carlson Parkway) Tj ET Q q 0 0 0 rg BT 336.47 142.00 Td (, Suite 1400, Minnetonka, MN 55305, telephone ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 128.80 Td (612-629-2500.) Tj ET Q BT /F3 11.00 Tf ET q 0 0 0 rg BT 50.00 110.60 Td (Contact) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 92.40 Td (July Hugen, Investor Relations, ) Tj ET Q q 0 0 0 rg BT 191.56 92.40 Td (T) Tj ET Q q 0 0 0 rg BT 197.51 92.40 Td (wo Harbors Investment Corp., 612-629-2514, ) Tj ET Q BT /F2 11.00 Tf ET q 0 0 0 rg BT 50.00 79.20 Td (July) Tj ET Q q 0 0 0 rg BT 67.62 79.20 Td (.Hugen@twoharborsinvestment.com.) 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ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 474.15 539.17 Td (6,023) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 548.65 539.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 524.17 Td (Cash and cash equivalents) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 356.65 524.17 Td (250) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 421.65 524.17 Td (209) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 481.65 524.17 Td (557) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 543.65 524.17 Td (377) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 509.17 Td (T) Tj ET Q q 0 0 0 rg BT 73.41 509.17 Td (otal interest income) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 339.15 509.17 Td (145,325) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 404.15 509.17 Td (105,904) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 464.15 509.17 Td (280,160) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 526.15 509.17 Td (191,405) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 56.00 494.18 Td (Interest expense:) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 479.17 Td (Repurchase agreements) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 344.15 479.17 Td (22,553) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 409.15 479.17 Td (15,527) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 469.15 479.17 Td (45,571) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 531.15 479.17 Td (26,994) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 464.17 Td (Collateralized borrowings in securitization trust) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 349.15 464.17 Td (2,169) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 426.65 464.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 474.15 464.17 Td (2,987) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 548.65 464.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 449.17 Td (T) Tj ET Q q 0 0 0 rg BT 73.41 449.17 Td (otal interest expense) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 344.15 449.17 Td (24,722) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 409.15 449.17 Td (15,527) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 469.15 449.17 Td (48,558) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 531.15 449.17 Td (26,994) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 74.00 434.17 Td (Net interest income) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 339.15 434.17 Td (120,603) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 409.15 434.17 Td (90,377) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 464.15 434.17 Td (231,602) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 526.15 434.17 Td (164,411) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 419.17 Td (Other) Tj ET Q q 0 0 0 rg BT 78.57 419.17 Td (-than-temporary impairment losses) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 345.80 419.22 Td (\(1,426) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 371.65 419.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 410.80 419.22 Td (\(4,476) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 436.65 419.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 470.80 419.22 Td (\(1,662) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 496.65 419.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 532.80 419.22 Td (\(8,751) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 558.65 419.17 Td (\)) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 56.00 404.18 Td (Other income:) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 389.17 Td (Gain on investment securities) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 344.15 389.17 Td (50,863) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 414.15 389.17 Td (1,789) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 469.15 389.17 Td (77,831) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 531.15 389.17 Td (11,720) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 374.17 Td (Gain \(loss\) on interest rate swap and swaption agreements) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 339.15 374.17 Td (259,826) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 405.80 374.22 Td (\(61,014) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 436.65 374.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 464.15 374.17 Td (278,798) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 527.80 374.22 Td (\(77,207) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 558.65 374.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 359.17 Td (Gain \(loss\) on other derivative instruments) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 344.15 359.17 Td (62,283) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 410.80 359.22 Td (\(7,577) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 436.65 359.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 469.15 359.17 Td (45,621) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 527.80 359.22 Td (\(16,480) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 558.65 359.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 344.17 Td (\(Loss\) gain on mortgage loans held-for-sale) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 340.80 344.22 Td (\(35,142) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 371.65 344.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 426.65 344.17 Td (10) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 465.80 344.22 Td (\(20,819) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 496.65 344.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 545.30 344.22 Td (\(22) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 558.65 344.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 329.17 Td (Other income) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 349.15 329.17 Td (1,810) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 426.65 329.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 474.15 329.17 Td (8,099) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 548.65 329.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 314.17 Td (T) Tj ET Q q 0 0 0 rg BT 73.41 314.17 Td (otal other income \(loss\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 339.15 314.17 Td (339,640) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 405.80 314.22 Td (\(66,792) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 436.65 314.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 464.15 314.17 Td (389,530) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 527.80 314.22 Td (\(81,989) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 558.65 314.17 Td (\)) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 56.00 299.18 Td (Expenses:) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 284.17 Td (Management fees) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 344.15 284.17 Td (12,591) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 414.15 284.17 Td (7,610) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 469.15 284.17 Td (17,352) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 531.15 284.17 Td (14,353) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 269.17 Td (Securitization deal costs) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 361.65 269.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 426.65 269.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 474.15 269.17 Td (2,028) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 548.65 269.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 254.17 Td (Other operating expenses) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 349.15 254.17 Td (9,486) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 414.15 254.17 Td (3,919) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 469.15 254.17 Td (16,047) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 536.15 254.17 Td (7,470) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 68.00 239.17 Td (T) Tj ET Q q 0 0 0 rg BT 73.41 239.17 Td (otal expenses) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 344.15 239.17 Td (22,077) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 409.15 239.17 Td (11,529) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 469.15 239.17 Td (35,427) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 531.15 239.17 Td (21,823) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 56.00 224.18 Td (Income from continuing operations before income taxes) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 339.15 224.17 Td (436,740) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 414.15 224.17 Td (7,580) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 464.15 224.17 Td (584,043) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 531.15 224.17 Td (51,848) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 209.17 Td (Provision for \(benefit from\) income taxes) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 344.15 209.17 Td (49,119) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 405.80 209.22 Td (\(16,605) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 436.65 209.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 469.15 209.17 Td (54,083) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 527.80 209.22 Td (\(24,183) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 558.65 209.17 Td (\)) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 56.00 194.18 Td (Net income from continuing operations) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 339.15 194.17 Td (387,621) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 409.15 194.17 Td (24,185) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 464.15 194.17 Td (529,960) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 531.15 194.17 Td (76,031) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 179.17 Td (Income \(loss\) from discontinued operations) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 349.15 179.17 Td (1,016) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 418.30 179.22 Td (\(181) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 436.65 179.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 474.15 179.17 Td (2,393) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 540.30 179.22 Td (\(227) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 558.65 179.17 Td (\)) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 56.00 164.18 Td (Net income attributable to common stockholders) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 318.00 164.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 339.15 164.17 Td (388,637) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 378.00 164.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 409.15 164.17 Td (24,004) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 443.00 164.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 464.15 164.17 Td (532,353) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 503.00 164.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 531.15 164.17 Td (75,804) Tj ET Q endstream endobj 21 0 obj <> endobj 22 0 obj <> stream BT /F1 9.00 Tf ET BT /F1 9.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 295.15 31.60 Td (- 10 -) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 53.50 747.50 509.00 -13.00 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/GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 440.5 489.5 m 500.5 489.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 440.5 487.5 m 500.5 487.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 502.5 m 562.5 502.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 504.5 m 562.5 504.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 489.5 m 562.5 489.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 487.5 m 562.5 487.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 315.5 372.5 m 375.5 372.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 375.5 372.5 m 440.5 372.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 440.5 372.5 m 500.5 372.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 315.5 372.5 m 375.5 372.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 315.5 357.5 m 375.5 357.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 375.5 372.5 m 440.5 372.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 375.5 357.5 m 440.5 357.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 440.5 372.5 m 500.5 372.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 440.5 357.5 m 500.5 357.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 372.5 m 562.5 372.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 357.5 m 562.5 357.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 315.5 357.5 m 375.5 357.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 315.5 343.5 m 375.5 343.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 315.5 341.5 m 375.5 341.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 375.5 343.5 m 440.5 343.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 375.5 341.5 m 440.5 341.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 440.5 343.5 m 500.5 343.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 440.5 341.5 m 500.5 341.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 357.5 m 562.5 357.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 343.5 m 562.5 343.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 500.5 341.5 m 562.5 341.5 l s BT /F3 10.00 Tf ET q 0 0 0 rg BT 218.30 738.23 Td (TWO HARBORS INVESTMENT CORP.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 138.90 725.23 Td (CONSOLIDATED STATEMENTS OF COMPREHENSIVE \(LOSS\) INCOME) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 219.60 712.07 Td (\(dollars in thousands, except per share data\)) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 110.95 699.06 Td (Certain prior period amounts have been reclassified to conform to the current period presentation) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 332.00 673.18 Td (Three Months Ended) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 359.70 663.18 Td (June 30,) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 461.50 673.18 Td (Six Months Ended ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 483.20 663.18 Td (June 30,) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 335.00 649.23 Td (2013) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 397.50 649.23 Td (2012) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 460.00 649.23 Td (2013) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 521.00 649.23 Td (2012) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 354.45 636.07 Td (\(unaudited\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 477.95 636.07 Td (\(unaudited\)) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 56.00 623.18 Td (Basic earnings per) Tj ET Q q 0 0 0 rg BT 134.71 623.18 Td ( weighted average common shar) Tj ET Q q 0 0 0 rg BT 271.72 623.18 Td (e) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 609.07 Td (Continuing operations) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 318.00 609.07 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 354.15 609.07 Td (1.06) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 378.00 609.07 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 419.15 609.07 Td (0.11) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 443.00 609.07 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 479.15 609.07 Td (1.58) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 503.00 609.07 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 541.15 609.07 Td (0.38) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 595.07 Td (Discontinued operations) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 361.65 595.07 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 426.65 595.07 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 479.15 595.07 Td (0.01) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 548.65 595.07 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 581.07 Td (Net income) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 318.00 581.07 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 354.15 581.07 Td (1.06) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 378.00 581.07 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 419.15 581.07 Td (0.11) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 443.00 581.07 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 479.15 581.07 Td (1.59) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 541.15 581.07 Td (0.38) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 56.00 553.18 Td (Diluted earnings per) Tj ET Q q 0 0 0 rg BT 143.60 553.18 Td ( weighted average common shar) Tj ET Q q 0 0 0 rg BT 280.61 553.18 Td (e) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 538.17 Td (Continuing operations) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 318.00 538.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 354.15 538.17 Td (1.06) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 378.00 538.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 419.15 538.17 Td (0.11) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 443.00 538.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 479.15 538.17 Td (1.57) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 503.00 538.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 541.15 538.17 Td (0.38) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 523.17 Td (Discontinued operations) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 361.65 523.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 426.65 523.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 479.15 523.17 Td (0.01) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 548.65 523.17 Td () Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 508.17 Td (Net income) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 318.00 508.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 354.15 508.17 Td (1.06) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 378.00 508.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 419.15 508.17 Td (0.11) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 443.00 508.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 479.15 508.17 Td (1.58) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 503.00 508.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 541.15 508.17 Td (0.38) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 56.00 493.18 Td (Dividends declared per common share) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 318.00 493.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 354.15 493.17 Td (0.31) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 378.00 493.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 419.15 493.17 Td (0.40) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 443.00 493.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 479.15 493.17 Td (0.63) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 503.00 493.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 541.15 493.17 Td (0.80) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 465.17 Td (Weighted average shares outstanding - Basic) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 322.00 465.17 Td (365,589,300) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 386.60 465.17 Td (214,810,579) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 446.60 465.17 Td (335,603,697) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 508.60 465.17 Td (200,833,084) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 450.17 Td (W) Tj ET Q q 0 0 0 rg BT 64.64 450.17 Td (eighted average shares outstanding - Diluted) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 321.60 450.17 Td (366,057,203) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 386.60 450.17 Td (214,810,579) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 446.60 450.17 Td (336,677,044) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 508.60 450.17 Td (200,833,084) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 56.00 422.18 Td (Compr) Tj ET Q q 0 0 0 rg BT 86.37 422.18 Td (ehensive \(loss\) income:) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 407.17 Td (Net income) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 318.00 407.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 339.15 407.17 Td (388,637) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 378.00 407.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 409.15 407.17 Td (24,004) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 443.00 407.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 464.15 407.17 Td (532,353) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 503.00 407.17 Td ($) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 531.15 407.17 Td (75,804) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 56.00 392.17 Td (Other comprehensive \(loss\) income:) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 62.00 377.17 Td (Unrealized \(loss\) gain on available-for) Tj ET Q q 0 0 0 rg BT 216.18 377.17 Td (-sale securities, net) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 335.80 377.22 Td (\(534,713) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 371.65 377.17 Td (\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 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Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 152.95 726.90 Td (RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION) Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 277.25 713.90 Td (\(UNAUDITED\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 228.40 700.76 Td (\(dollars in thousands, except per share data\)) Tj ET Q BT /F4 9.00 Tf ET q 0 0 0 rg BT 130.60 687.75 Td (Certain prior period amounts have been reclassified to conform to the current period presentation) Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 349.55 662.90 Td (Three Months Ended) Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 469.95 662.90 Td (Six Months Ended) Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 374.45 647.95 Td (June 30,) Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 489.45 647.95 Td (June 30,) Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 353.00 634.90 Td (2013) Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 410.00 634.90 Td (2012) Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 467.50 634.90 Td (2013) Tj ET Q BT /F3 9.00 Tf ET q 0 0 0 rg BT 525.50 634.90 Td (2012) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 54.50 609.76 Td (Reconciliation of net income attributable to common stockholders to) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 60.50 596.76 Td (Core Earnings:) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 54.50 571.76 Td (Net income attributable to common stockholders) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 336.50 571.76 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 358.25 571.76 Td (388,637) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 393.50 571.76 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 419.75 571.76 Td (24,004) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 450.50 571.76 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 472.90 571.76 Td (532,353) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.50 571.76 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 535.40 571.76 Td (75,804) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 54.50 546.76 Td (Adjustments for non-core earnings:) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 60.50 533.76 Td (Gain on sale of securities and 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512.96 Td (8,545) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 552.65 512.96 Td (\(9) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 560.15 512.96 Td (\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 60.50 499.76 Td (Other) Tj ET Q q 0 0 0 rg BT 80.81 499.76 Td (-than-temporary impairment loss, net of tax) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 367.25 499.76 Td (1,426) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 424.25 499.76 Td (4,476) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 481.90 499.76 Td (1,662) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 539.90 499.76 Td (8,751) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 60.50 486.76 Td (Realized loss on termination or expiration of swaps and swaptions, net of) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 60.50 477.81 Td (tax) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 367.25 479.96 Td (2,629) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 424.25 479.96 Td (4,801) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 477.40 479.96 Td (61,183) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 535.40 479.96 Td 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servicing rights) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 364.25 403.76 Td (\(1,528) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 387.50 403.76 Td (\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 435.50 403.76 Td () Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 478.90 403.76 Td (\(7,817) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 502.15 403.76 Td (\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 551.15 403.76 Td () Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 60.50 390.76 Td (Securitization deal costs) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 378.50 390.76 Td () Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 435.50 390.76 Td () Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 481.90 390.76 Td (2,028) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 551.15 390.76 Td () Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 60.50 377.76 Td (\(Income\) loss from discontinued operations) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 364.25 377.76 Td (\(1,016) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 387.50 377.76 Td (\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 431.00 377.76 Td (181) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 478.90 377.76 Td (\(2,393) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 502.15 377.76 Td (\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 546.65 377.76 Td (227) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 54.50 352.76 Td (Core Earnings) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 336.50 352.76 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 362.75 352.76 Td (78,133) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 393.50 352.76 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 419.75 352.76 Td (76,286) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 450.50 352.76 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 472.90 352.76 Td (167,790) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 508.50 352.76 Td ($) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 530.90 352.76 Td (140,063) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 54.50 327.76 Td (Weighted average shares outstanding - Basic) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 342.50 327.76 Td (365,589,300) Tj ET Q BT /F2 9.00 Tf ET q 0 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