Real estate investment trust Two Harbors Investment ($11.13 0%) posted total core earnings for 2012 of $311 million, significantly up from $153 million last year.  

Month-over-month, the company posted earnings of $84 million, or $0.28 per share for the fourth quarter of 2012, down from $87.1 million, or $0.32 per share, from the third quarter of 2012.

Additionally, comprehensive income for the three months ended in 2012 was about $185 million, compared to approximately $19 million from the final three months of 2011. 

"We are pleased to have achieved a strong finish to a remarkable year for our investment portfolio," said Thomas Siering, Two Harbors' president and chief executive officer.

He added, "For the year, Two Harbors delivered a return on book value of 47% as measured by dividends declared and book value appreciation."

During the quarter, Two Harbors sold residential mortgage-backed securities for $3.2 billion with an amortized cost of $3.1, posting a net gain of $103.1 million. 

The annualized yield on average residential mortgage-backed securities and agency derivatives was 4% while the annualized cost of funds on the average borrowings was 1.1%. This resulted in a net interest rate spread of 2.9% for the quarter, compared to 3.1% from the previous quarter. 

Two Harbor’s portfolio is mainly made up of RMBS available-for-sale securities as well as agency derivatives.

The total value of the portfolio was $14 billion for 2012, with $11.3 billion accounting for agency RMBS and agency derivatives. About $2.7 billion accounted for nonagency RMBS. 

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