Two Harbors Investment Corp

Good day and welcome to the Two Harbors Investment Corp. First Quarter 2020 Financial Results Conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Margaret Kerr. Please go ahead.

Thank you and good morning, everyone. Thank you for joining our call to discuss Two Harbors First Quarter 2020 Financial Results. With me on the call this morning are Tom Searing, our president and CEO, Mary Riske, our CFO, and Matt Kepin and Bill Greenberg, our co-CIOs. On our call today, given potential conflicts of interest, any comments about internalization will be delivered by Mary, Bill, and Matt. The press release and financial tables associated with today's call were filed yesterday with the SEC. If you do not have a copy, you may find them on our website or on the SEC's website at sec.gov. In our earnings release and slides, we have provided a reconciliation of GAAP to non-GAAP financial measures. We urge you to review this information in conjunction with today's call. I would also like to mention that this call is being webcast and may be accessed in the investor relations section of our website. I would like to remind you that remarks made by management during this conference call and the supporting slides may include forward-looking statements. Forward-looking statements are based on the current beliefs and expectations of management and actual results may be materially different because of a variety of risks and other factors. We caution investors not to rely unduly on forward-looking statements. Except as may be required by law, Two Harbors does not update forward-looking statements and expressly disclaims any obligation to do so. I will now turn the call over to Tom.

Thank you, Maggie, and good morning, everyone. We hope that you had a chance to review our earnings press release and presentation that we issued last night. Coming off the heels of a very strong 2019 for the company, we could not have imagined the societal and economic conditions that would result from the global coronavirus pandemic. This has been a challenging time for our nation and the world, and our thoughts are with those most affected by COVID-19, especially those who have lost loved ones. Additionally, we want to express our gratitude and admiration for the heroes who are on the front lines. We, like everyone else, are hoping for a return to normalcy soon. First and foremost, we have been concerned about our most valuable asset, our people. We have implemented mandatory work-from-home measures across our three offices and are utilizing technology to stay well connected. We are all adapting to the new reality, and we are able to execute our day-to-day visits with very minimal disruption. In the first quarter, no one was spared from the volatility of the markets. Unlike the 2008 financial crisis, The speed with which the market dislocation appeared and the large spread moves that occurred on a daily basis were unprecedented. Every asset class was impacted. Spreads, especially on illiquid assets, widened dramatically. Margin calls were swift. Nonetheless, I'm proud of how our team managed the volatility by actively de-risking our portfolio in order to establish and maintain a very strong defensive liquidity position. Throughout this period, we satisfied all margin calls and did not enter into any forbearance arrangements with our lenders. In the midst of the volatility, we also made the difficult decision to suspend our first quarter and preferred stock dividends in order to ensure we maintain sufficient excess liquidity and preserve stockholder value for the long term. Our decisive actions allowed us to weather extreme volatility in March and ended the quarter with $1.2 billion in unrestricted cash. Given the de-risking of our portfolio and increased confidence in our liquidity position, we announced an interim common stock dividend of $0.05 per share, as well as full payment of our first quarter preferred stock dividends. Though we are not able to provide guidance on future dividends, together with the Board, we will be evaluating our quarterly dividends going forward based upon the composition of our portfolio and evolving market conditions. Additionally, post-quarter end, we announced that the independent members that are board directors elected not to review the company's management agreement with PRC and advisors. Mary will comment on this in more detail shortly. We believe that how we are regarded once this crisis passes will depend upon our actions now. We strive to be best in class, and in this time, Of great uncertainty, we are committed to all of our stakeholders, our employees, stockholders, business partners, and communities. We are weathering this storm together. While we can't predict how this global pandemic will play out and what its lasting effects will be, we are making every effort to best position our company for events outside of our control. Despite all the uncertainty, we believe that we can withstand future volatility and ultimately on the other side of this crisis, once again drive long-term stockholder value. With that, I will now turn the call over to Mary to review our financial results.