UPDATE: Deutsche Bank Initiates Coverage on Two Harbors Investment Corp. with Buy Rating, $12.75 PT

In a report published Friday, Deutsche Bank initiated coverage on Two Harbors Investment Corp. TWO with a Buy rating and $12.75 price target. Deutsche Bank noted, “We expect TWO to continue generating attractive ROEs and post earnings growth in 2013 as it benefits from less prepayment-sensitive agency assets, an increasing mix of non-agency assets, income from Silver Bay, and new investments in whole loans, which we believe is likely to lead to securitizations next year. Given the attractive valuation and our return expectations, we are initiating coverage with a Buy and a target of $12.75 per share.” Two Harbors Investment Corp. closed on Thursday at $11.59.