Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

v3.8.0.1
Discontinued Operations
 3 Months Ended
Mar. 31, 2018
Discontinued Operations [Abstract]  
Discontinued Operations
Discontinued Operations
On June 28, 2017, the Company contributed its equity interests in its wholly owned subsidiary, TH Commercial Holdings LLC, to Granite Point and, in exchange for its contribution, received approximately 33.1 million shares of common stock of Granite Point, representing approximately 76.5% of the outstanding stock of Granite Point upon completion of the IPO of its common stock on June 28, 2017. On November 1, 2017, the Company distributed, on a pro rata basis, the 33.1 million shares of Granite Point common stock that it acquired in connection with the contribution to stockholders holding shares of Two Harbors common stock outstanding as of the close of business on October 20, 2017. Due to the Company’s controlling ownership interest in Granite Point through November 1, 2017, its results of operations and financial condition through such date reflect Granite Point’s commercial strategy, which includes as target assets first mortgages, mezzanine loans, B-notes and preferred equity. As of November 1, 2017, the Company no longer has a controlling interest in Granite Point and, therefore, has deconsolidated Granite Point and its subsidiaries from its financial statements and reclassified all of Granite Point’s current and prior period assets, liabilities and results of operations to discontinued operations. In accordance with ASC 845, Nonmonetary Transactions, the pro rata distribution of a consolidated subsidiary is recognized at carrying amount within stockholders’ equity. As a result, no gain or loss was recognized on the distribution.
Summarized financial information for the discontinued operations are presented below.
(in thousands)
November 1,
2017
Assets:
 
Commercial real estate assets
$
2,233,080

Available-for-sale securities, at fair value
12,814

Cash and cash equivalents
84,183

Restricted cash
2,838

Accrued interest receivable
6,588

Other assets
22,774

Total Assets
$
2,362,277

Liabilities:
 
Repurchase agreements
$
1,516,294

Dividends payable
48

Other liabilities
10,337

Total Liabilities
$
1,526,679

 
Three Months Ended
 
March 31,
(in thousands)
2018
 
2017
Interest income:
 
 
 
Commercial real estate assets
$
—

 
$
23,570

Available-for-sale securities
—

 
246

Other
—

 
2

Total interest income
—

 
23,818

Interest expense
—

 
6,106

Net interest income
—

 
17,712

Expenses:
 
 
 
Management fees
—

 
1,662

Servicing expenses
—

 
322

Other operating expenses
—

 
2,273

Total expenses
—

 
4,257

Income from discontinued operations before income taxes
—

 
13,455

Provision for income taxes
—

 
1

Income from discontinued operations attributable to common stockholders
$
—

 
$
13,454