Two Hbrs Invt Stock Price, News & Analysis
Company Description
Two Harbors Investment Corp. (NYSE: TWO) is a Maryland corporation that operates as a real estate investment trust (REIT) focused on mortgage-related assets. According to company disclosures and recent filings, Two Harbors invests in mortgage servicing rights (MSR), residential mortgage-backed securities (RMBS), and other financial assets. The company describes itself as an MSR-focused REIT, reflecting the central role of mortgage servicing rights in its strategy. Two Harbors is headquartered in St. Louis Park, Minnesota, and its common and preferred shares trade on the New York Stock Exchange.
Based on its public statements, Two Harbors’ investment portfolio centers on MSR and Agency RMBS. Company earnings releases and SEC reports show that the portfolio includes Agency RMBS, MSR, other investment securities, and associated hedging instruments such as to-be-announced (TBA) securities, interest rate swaps and U.S. Treasury futures. These positions are managed with the goal of generating returns from mortgage servicing cash flows and interest income from mortgage-backed securities, while using derivatives and financing arrangements to manage risk and funding.
Two Harbors’ disclosures indicate that it derives a significant portion of its economic performance from pairing low-rate MSR with Agency RMBS. Management commentary in earnings releases emphasizes this “core strategy of low coupon MSR paired with Agency RMBS,” which the company views as a way to pursue risk-adjusted returns in the mortgage finance space. Portfolio data released by the company highlight large unpaid principal balances of loans underlying its MSR, as well as substantial holdings of Agency RMBS and net long TBA positions.
Business focus and investment activities
In its public "About TWO" descriptions and SEC filings, Two Harbors states that it invests in:
- Mortgage servicing rights (MSR), including MSR associated with large unpaid principal balances of residential mortgage loans.
- Residential mortgage-backed securities (RMBS), including Agency RMBS.
- Other financial assets related to the mortgage finance market.
Company earnings materials provide additional context on how these assets are managed. Two Harbors reports metrics such as unpaid principal balance for its MSR, gross coupon rates, delinquency rates, and prepayment speeds. For its Agency RMBS holdings, it discloses information such as weighted average cost basis, coupon rates, and experienced constant prepayment rates. The company also reports on its use of repurchase agreements, revolving credit facilities, warehouse lines of credit, senior notes and convertible senior notes to finance its portfolio.
Capital markets and financing
Two Harbors regularly accesses capital markets and secured financing to support its investment activities. For example, company filings and press releases describe:
- Repurchase agreements collateralized by securities, MSR and mortgage loans.
- Revolving credit facilities collateralized by MSR and related servicing advance obligations.
- Warehouse lines of credit collateralized by mortgage loans.
- Unsecured senior notes and unsecured convertible senior notes.
In one public offering, Two Harbors announced pricing of 9.375% senior notes due 2030, stating that net proceeds could be used for general corporate purposes, including refinancing or repayment of debt, financing MSR and Agency RMBS purchases, and potential repurchases or redemptions of equity securities, subject to its investment guidelines. The company has also disclosed an at-the-market equity offering program for its common stock under amended and restated equity distribution agreements with sales agents.
Dividends and REIT profile
As a REIT, Two Harbors emphasizes common and preferred stock dividends in its communications. The company regularly announces quarterly dividends on its common stock and on its Series A, Series B and Series C cumulative redeemable preferred stock. In its dividend announcements, Two Harbors notes that the common dividend level is influenced by factors such as sustainability, earnings and return potential of the portfolio, taxable income, impact to book value, and the market environment. The company has also discussed adjustments to its dividend in light of litigation-related accruals and settlements, explaining how these items affect book value and projected returns.
Two Harbors’ preferred stock series include fixed-to-floating rate cumulative redeemable preferred shares, with the Series C preferred stock paying dividends at a floating rate tied to a three-month reference rate plus specified spreads, as disclosed in its dividend announcements. The company’s SEC filings also describe how these preferred shares will be treated in the context of its announced merger transaction.
Litigation resolution and business update
Two Harbors has reported on the resolution of litigation with its former external manager and related parties. A settlement agreement disclosed in an 8-K filing and accompanying press release describes a one-time cash payment to Pine River entities and the relinquishment by Pine River of ownership claims to intellectual property used by the company. Two Harbors has stated that resolving this matter allows it to move forward with clarity and to focus on its MSR and RMBS strategy, and has provided estimates of book value before and after giving effect to the settlement payment.
Planned acquisition by UWM Holdings Corporation
According to a merger agreement described in a Form 8-K and joint press release, Two Harbors has entered into a definitive agreement under which UWM Holdings Corporation will acquire Two Harbors in an all-stock transaction. Under the terms of the agreement, each outstanding share of Two Harbors common stock is expected to be converted into the right to receive a fixed exchange ratio of UWM Class A common stock, with cash in lieu of fractional shares. Each outstanding share of Two Harbors’ Series A, Series B and Series C preferred stock is expected to be converted into the right to receive a corresponding newly issued UWM preferred share of the same series designation.
The merger is subject to customary closing conditions, including approval by Two Harbors stockholders, regulatory clearances, effectiveness of a registration statement for the UWM stock to be issued, and other conditions described in the merger agreement. Two Harbors and UWM have stated in SEC filings and press releases that the transaction is expected to close in the second quarter of 2026, although completion remains subject to the specified conditions. Until closing, Two Harbors continues to operate as a separate NYSE-listed REIT and has indicated that it intends to pay regular quarterly dividends in the ordinary course for completed quarterly periods prior to the merger closing, without a partial dividend for the closing quarter if the transaction does not close as of quarter-end.
Headquarters and corporate structure
Two Harbors identifies itself in public filings as a Maryland corporation with its principal offices in St. Louis Park, Minnesota. It files periodic reports, current reports and other documents with the U.S. Securities and Exchange Commission under Commission File Number 001-34506. The company’s disclosures emphasize its status as a REIT that has been organized and operated to meet the requirements for qualification and taxation as a real estate investment trust, as referenced in the tax-related conditions to its merger with UWM.
How investors use information on Two Harbors
Investors researching Two Harbors typically review its earnings press releases, quarterly and annual reports on Form 10-Q and Form 10-K, and current reports on Form 8-K for information on portfolio composition, book value per share, economic return on book value, earnings available for distribution, and financing metrics. The company also provides earnings call presentations and hosts conference calls and webcasts to discuss quarterly results, as noted in its announcements of earnings release dates and call details.