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Two Harbors (NYSE: TWO) agrees to $12 per share CCM merger and posts Q2 profit

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Two Harbors Investment Corp. reported results for the quarter ended June 30, 2026 and provided an update on its pending merger with CrossCountry Mortgage, LLC (CCM). Under the definitive merger agreement, as amended, CCM will acquire all outstanding Two Harbors common shares for $12.00 per share; holders of Series A, B and C preferred stock are expected to have their shares redeemed after closing at $25.00 per share plus accumulated and unpaid dividends. Common stockholders approved the merger on July 2, 2026, and closing is expected on August 3, 2026, subject to remaining conditions; a third‑quarter 2026 “stub period” dividend of $0.12196 per common share is subject to consummation of the merger.

For the quarter, net income attributable to common stockholders was $49.4 million, or $0.47 per basic share, with comprehensive income attributable to common stockholders of $47.9 million, or $0.45 per share, representing a 17.0% annualized return on average common equity. Earnings Available for Distribution were $29.6 million, or $0.28 per basic common share, with a 10.5% annualized return on average common equity. The company declared a second‑quarter common dividend of $0.34 per share and reported quarter‑end book value of $10.68 per common share, producing a 4.3% economic return on book value. As of June 30, 2026, the investment portfolio totaled $7.5 billion plus $3.8 billion of net long TBAs, and the debt‑to‑equity ratio was 3.8:1.0 (economic debt‑to‑equity 6.0:1.0).

Positive

  • Returned to profitability with strong quarterly earnings: net income attributable to common stockholders was $49.4 million in Q2 2026, compared with a net loss of $272.3 million in Q2 2025, and comprehensive income attributable to common was $47.9 million.
  • Merger agreement with CCM at defined per‑share consideration: CCM will acquire all outstanding Two Harbors common shares for $12.00 per share, with preferred shares expected to be redeemed at $25.00 per share plus accumulated and unpaid dividends following closing.

Negative

  • None.

Filing Explained

June 30 borrowings were secured mainly by repurchase agreements, while merger-related costs were separately identified in the earnings reconciliation.

As of June 30, Two Harbors reported total borrowings of $6,618,284 thousand and cash and cash equivalents of $642,691 thousand, while the CCM merger remained subject to remaining closing conditions. This is the company’s reported capital position before the proposed transaction closes.

The financing was composed of $5,639,830 thousand of repurchase agreements, $862,771 thousand of revolving credit facilities, $4,333 thousand of warehouse lines, and $111,350 thousand of unsecured senior notes. The repurchase agreements were collateralized by securities, mortgage servicing rights, or mortgage loans.

The reconciliation reported Earnings Available for Distribution of $29,600 thousand versus GAAP net income attributable to common stockholders of $49,379 thousand; it listed $13,647 thousand of merger-related costs as an adjustment and states that those costs include the pending CCM merger and the terminated UWM merger.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Merger consideration per common share $12.00 per share Price CCM will pay for each outstanding Two Harbors common share under the merger agreement
Q2 2026 net income to common $49,379,000 Net income attributable to common stockholders for the quarter ended June 30, 2026
Q2 2026 EPS to common (basic) $0.47 per share Basic earnings per weighted average common share in Q2 2026
Comprehensive income to common $47,921,000 Comprehensive income attributable to common stockholders in Q2 2026
EAD to common stockholders $29,600,000 Earnings Available for Distribution for Q2 2026, per company’s non-GAAP measure
Book value per common share $10.68 Common book value at June 30, 2026
Quarterly common dividend $0.34 per share Second quarter 2026 common stock dividend declared
Debt-to-equity ratio 3.8:1.0 Debt-to-equity ratio at June 30, 2026; economic ratio 6.0:1.0
mortgage servicing rights financial
"Two Harbors invests in mortgage servicing rights, residential mortgage-backed securities, and other assets"
Mortgage servicing rights are the contractual right to collect mortgage payments, manage escrow accounts, handle customer service and delinquency actions on a pool of home loans, in exchange for a portion of the loan’s payments. They matter to investors because their value behaves like a revenue stream that can rise or fall with interest rates and borrower behavior — similar to owning a toll bridge where income depends on traffic volume and maintenance costs — and thus affect a lender’s earnings and risk profile.
to-be-announced securities (TBAs) financial
"Additionally, the company held $3.8 billion bond equivalent value of net long to-be-announced securities (TBAs)"
Earnings Available for Distribution financial
"Earnings Available for Distribution, or EAD, is a non-GAAP measure"
Earnings available for distribution are the portion of a company’s profit that remains after paying taxes, meeting legal or contractual reserves, and covering any required debt or operating obligations — essentially the cash the business can legally and practically give to shareholders or unitholders. Investors watch this number because it shows how much income a company can return as dividends or distributions, similar to the money left in a household account after paying bills and savings goals.
economic return on book value financial
"declared a second quarter common stock dividend of $0.34 per share, representing a 4.3% quarterly economic return on book value"
Economic return on book value measures how much real economic profit a company generates compared with the accounting value of its equity or assets on the balance sheet. Think of it as the true “yield” you get from the recorded value of the business—similar to how a landlord compares rental income to the purchase price of a building—and it matters to investors because it shows whether the company’s reported book value is producing enough economic benefit to justify the stock’s price.
economic debt-to-equity ratio financial
"Economic debt-to-equity ratio at period-end (3) was 6.0 :1.0"
stub period dividend financial
"declared a “stub period” dividend of $0.12196 per share of common stock for the third quarter of 2026"
A stub period dividend is a payment made to shareholders that covers an unusually short or partial financial period—think of receiving rent for just a few days instead of a full month. It matters because it changes the amount and timing of income investors receive, affects short-term yield calculations and tax timing, and can signal how management plans to align future dividend schedules after a corporate change.
Net income attributable to common stockholders $49,379,000; $0.47 per basic share; 17.5% ROE Compared with net loss attributable to common stockholders of $272,280,000, or $(2.62) per share, in Q2 2025
Comprehensive income attributable to common stockholders $47,921,000; $0.45 per share; 17.0% ROE Compared with comprehensive loss attributable to common stockholders of $221,807,000 in Q2 2025
Earnings Available for Distribution to common $29,600,000; $0.28 per basic share; 10.5% ROE Compared with $35,756,000, or $0.34 per share, in Q1 2026
Book value per common share $10.68 at June 30, 2026 Compared with $10.57 at March 31, 2026; economic return on book value was 4.3% in Q2 2026

AI-generated analysis. How Rhea-AI works. Not financial advice.

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FAQ

What merger transaction involving TWO was announced in this report?
Two Harbors Investment Corp. agreed that CrossCountry Mortgage, LLC will acquire all outstanding TWO common shares for $12.00 per share. Series A, B and C preferred shares are expected to be redeemed at $25.00 per share plus accumulated and unpaid dividends after closing.

Did TWO shareholders approve the CCM merger and when is closing expected?
TWO common stockholders approved the CCM merger on July 2, 2026. The transaction is expected to close on August 3, 2026, subject to the satisfaction of certain remaining closing conditions described by the company.

What were TWO’s key earnings results for Q2 2026?
For Q2 2026, TWO reported net income attributable to common stockholders of $49.4 million, or $0.47 per basic share, and comprehensive income attributable to common stockholders of $47.9 million, or $0.45 per share, with a 17.0% annualized return on average common equity.

How much were TWO’s Earnings Available for Distribution (EAD) in Q2 2026?
Earnings Available for Distribution to common stockholders in Q2 2026 were $29.6 million, or $0.28 per weighted average basic common share, representing a 10.5% annualized return on average common equity, based on the company’s non‑GAAP definition of EAD.

What dividends did TWO declare around the time of this filing?
TWO declared a second‑quarter 2026 common stock dividend of $0.34 per share and a third‑quarter 2026 “stub period” dividend of $0.12196 per common share, with the stub dividend being subject to consummation of the CCM merger.

What was TWO’s book value per common share and economic return in Q2 2026?
Book value per common share at June 30, 2026 was $10.68. Including the declared second‑quarter common dividend of $0.34, the company reported a 4.3% economic return on book value for the quarter, based on its stated calculation.

How large was TWO’s investment portfolio and leverage at quarter‑end Q2 2026?
As of June 30, 2026, TWO’s portfolio comprised $7.5 billion of Agency RMBS, MSR and other investments plus $3.8 billion of net long TBAs. The debt‑to‑equity ratio was 3.8:1.0, and the economic debt‑to‑equity ratio was 6.0:1.0.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: July 28, 2026
Two Harbors Investment Corp.
(Exact name of registrant as specified in its charter)
Maryland001-3450627-0312904
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
1601 Utica Avenue South, Suite 900
St. Louis Park,
MN
55416
(Address of Principal Executive Offices)
(Zip Code)
(612) 453-4100
Registrant's telephone number, including area code

(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class:Trading Symbol(s)Name of Exchange on Which Registered:
Common Stock, par value $0.01 per shareTWONew York Stock Exchange
8.125% Series A Cumulative Redeemable Preferred StockTWO PRANew York Stock Exchange
7.625% Series B Cumulative Redeemable Preferred StockTWO PRBNew York Stock Exchange
7.25% Series C Cumulative Redeemable Preferred StockTWO PRCNew York Stock Exchange
9.375% Senior Notes Due 2030TWODNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐



Item 2.02           Results of Operations and Financial Condition.

On July 28, 2026, Two Harbors Investment Corp. (“Two Harbors”) issued a press release announcing its financial results for the fiscal quarter ended June 30, 2026. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in Item 2.02 of this Current Report, including Exhibit 99.1 attached hereto, is furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for any other purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 2.02 of this Current Report, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing of the registrant under the Securities Act of 1933 or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filings (unless the registrant specifically states that the information or exhibit in this Item 2.02 is incorporated by reference).

Item 9.01Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.Description
99.1 
Press Release of Two Harbors Investment Corp., dated July 28, 2026.
104 Cover Page Interactive Data File, formatted in Inline XBRL.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 




 
 



 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 TWO HARBORS INVESTMENT CORP.
   
   
 By:/s/ REBECCA B. SANDBERG
  Rebecca B. Sandberg
  Chief Legal Officer and Secretary
   
Date: July 28, 2026  
 



twologo.jpg
TWO Reports Second Quarter 2026 Financial Results

NEW YORK, July 28, 2026 - TWO (Two Harbors Investment Corp., NYSE: TWO), an MSR-focused real estate investment trust (REIT), today announced its financial results for the quarter ended June 30, 2026.

Quarterly Summary
•Continued to advance toward closing of merger with CrossCountry Mortgage, LLC (CCM).
◦Pursuant to the definitive merger agreement, as amended, CCM will acquire all of the outstanding shares of TWO common stock for $12.00 per share.
◦Holders of TWO’s Series A, Series B and Series C Preferred Stock will have their shares redeemed following the closing of the transaction at $25.00 per share, plus any accumulated and unpaid dividends, in accordance with the terms of the preferred stock.
◦On July 2, 2026, TWO common stockholders approved the merger; the transaction is expected to close on August 3, 2026, subject to the satisfaction of certain remaining closing conditions.
◦On July 23, 2026, declared a “stub period” dividend of $0.12196 per share of common stock for the third quarter of 2026, subject to the consummation of the merger.
•Reported book value of $10.68 per common share, and declared a second quarter common stock dividend of $0.34 per share, representing a 4.3% quarterly economic return on book value.(1)
•Generated comprehensive income of $47.9 million, or $0.45 per weighted average basic common share.
•Added $186.5 million in unpaid principal balance (UPB) of MSR through flow-sale acquisitions and recapture.
•As of June 30, 2026, MSR portfolio had a weighted average gross coupon rate of 3.54% and a 60+ day delinquency rate of 0.79%, and had experienced a 3-month CPR of 6.3%.
•Funded $84.0 million UPB in loans and brokered an additional $48.8 million UPB in second lien loans.
________________
(1)Economic return on book value is defined as the increase (decrease) in common book value from the beginning to the end of the given period, plus dividends declared to common stockholders in the period, divided by common book value as of the beginning of the period.
- 1 -

Operating Performance
The following table summarizes the company’s GAAP and non-GAAP earnings measurements and key metrics for the second quarter of 2026 and first quarter of 2026:
Operating Performance (unaudited)
(dollars in thousands, except per common share data)

Three Months Ended June 30, 2026

Three Months Ended March 31, 2026
Earnings Attributable to Common Stockholders
 Earnings

 Per weighted average basic common share

Annualized return on average common equity

 Earnings

 Per weighted average basic common share

Annualized return on average common equity
Comprehensive Income (Loss)$47,921 

$0.45 

17.0 %

$(24,714)$(0.24)(8.4)%
GAAP Net Income$49,379 

$0.47 

17.5 %

$19,477 $0.18 6.6 %
Earnings Available for Distribution(1)
$29,600 

$0.28 

10.5 %

$35,756 $0.34 12.2 %
Operating Metrics











Dividend per common share$0.34 





$0.34 




Annualized dividend yield(2)
11.0 %11.9 %
Book value per common share at period end$10.68 





$10.57 




Economic return on book value(3)
4.3 %(2.0)%
Operating expenses, excluding non-cash LTIP amortization and merger-related costs(4)
$36,314 





$39,391 




Operating expenses, excluding non-cash LTIP amortization and merger-related costs, as a percentage of average equity(4)
8.3 %8.8 %
_______________
(1)Earnings Available for Distribution, or EAD, is a non-GAAP measure. Please see page 11 for a definition of EAD and a reconciliation of GAAP to non-GAAP financial information.
(2)Dividend yield is calculated based on annualizing the dividends declared in the given period, divided by the closing share price as of the end of the period.
(3)Economic return on book value is defined as the increase (decrease) in common book value from the beginning to the end of the given period, plus dividends declared to common stockholders in the period, divided by the common book value as of the beginning of the period.
(4)Excludes non-cash equity compensation expense of $1.4 million for the second quarter of 2026 and $4.4 million for the first quarter of 2026 and merger-related costs of $13.6 million for the second quarter of 2026 and $5.6 million for the first quarter of 2026. Merger-related costs consist of expenses incurred in connection with the company’s pending merger with CCM, as well as its terminated merger agreement with UWM Holdings Corporation.
- 2 -

Portfolio Summary
As of June 30, 2026, the company’s portfolio was comprised of $7.5 billion of Agency RMBS, MSR and other investment securities as well as their associated notional debt hedges. Additionally, the company held $3.8 billion bond equivalent value of net long to-be-announced securities (TBAs).

The following tables summarize the company’s investment portfolio as of June 30, 2026 and March 31, 2026:
Investment Portfolio Composition
As of June 30, 2026As of March 31, 2026
(dollars in thousands)
(unaudited)(unaudited)
Agency RMBS$5,143,043 68.8 %$6,568,185 73.4 %
Mortgage servicing rights(1)
2,336,324 31.2 %2,380,983 26.6 %
Other2,982 — %3,149 — %
Aggregate Portfolio7,482,349 8,952,317 
Net TBA position(2)
3,814,3182,976,531
Total Portfolio$11,296,667 $11,928,848 
________________
(1)Based on the prior month-end’s principal balance of the loans underlying the company’s MSR, increased for current month purchases.
(2)Represents bond equivalent value of TBA position. Bond equivalent value is defined as notional amount multiplied by market price. Accounted for as derivative instruments in accordance with GAAP.
Portfolio Metrics Specific to Agency RMBSAs of June 30, 2026As of March 31, 2026
(unaudited)
(unaudited)
Weighted average cost basis(1)
$102.07 $101.72 
Weighted average experienced three-month CPR10.8 %8.6 %
Gross weighted average coupon rate6.3 %6.2 %
Weighted average loan age (months)29 24 
______________
(1)Weighted average cost basis includes Agency principal and interest RMBS only and utilizes carrying value for weighting purposes.
Portfolio Metrics Specific to MSR(1)
As of June 30, 2026As of March 31, 2026
(dollars in thousands)
(unaudited)
(unaudited)
Unpaid principal balance$155,106,720 $158,871,352 
Gross coupon rate3.5 %3.5 %
Current loan size$319 $321 
Original FICO(2)
760760
Original LTV73 %73 %
60+ day delinquencies0.8 %0.8 %
Net servicing fee25.3 basis points25.3 basis points
Three Months Ended June 30, 2026Three Months Ended March 31, 2026
(unaudited)(unaudited)
Fair value losses$(47,239)$(44,009)
Servicing income$118,350 $119,364 
Servicing costs$3,229 $1,807 
Change in servicing reserves$(18)$41 
________________
(1)Metrics exclude residential mortgage loans in securitization trusts for which the company is the named servicing administrator. Portfolio metrics, other than UPB, represent averages weighted by UPB.
(2)FICO represents a mortgage industry accepted credit score of a borrower.

- 3 -

As of June 30, 2026As of March 31, 2026
Serviced Mortgage Assets
Number of LoansUnpaid Principal BalanceNumber of LoansUnpaid Principal Balance
(dollars in thousands)
(unaudited)
(unaudited)
Mortgage servicing rights655,023 $155,106,720 665,942 $158,871,352 
Subservicing(1)
184,963 40,834,058 179,899 40,051,658 
Servicing administrator(2)
495 258,559 505 265,953 
Mortgage loans held-for-sale(3)
56 12,542 70 18,391 
Total serviced mortgage assets840,537 $196,211,879 846,416 $199,207,354 
________________
(1)Off-balance sheet mortgage loans owned by third parties and subserviced by the company.
(2)Off-balance sheet mortgage loans owned by third parties for which the company acts as servicing administrator (subserviced by appropriately licensed third-party subservicers).
(3)Originated or purchased mortgage loans held-for-sale at period-end.
Other Investments and Risk Management Metrics
As of June 30, 2026As of March 31, 2026
(dollars in thousands)
(unaudited)
(unaudited)
Net long TBA notional(1)
$3,828,003 $3,019,003 
Futures notional
$(5,637,700)$(6,354,300)
Interest rate swaps notional
$11,676,749 $11,435,749 
________________
(1)Accounted for as derivative instruments in accordance with GAAP.
Financing Summary
The following tables summarize the company’s secured and unsecured financing arrangements and related metrics as of June 30, 2026 and March 31, 2026:
June 30, 2026
Balance
Weighted Average Borrowing Rate
Weighted Average Months to Maturity
Number of Distinct Counterparties
(dollars in thousands, unaudited)
Repurchase agreements collateralized by securities$5,057,324 3.83 %1.79 16 
Repurchase agreements collateralized by MSR575,000 6.69 %4.72 3 
Repurchase agreements collateralized by mortgage loans7,506 5.62 %2.82 1 
Total repurchase agreements5,639,830 4.12 %2.09 18 
Revolving credit facilities collateralized by MSR and related servicing advance obligations
862,771 6.67 %16.31 3 
Warehouse lines of credit collateralized by mortgage loans
4,333 5.59 %2.76 1 
Unsecured senior notes111,350 9.38 %49.55 n/a
Total borrowings$6,618,284 
March 31, 2026

Balance

Weighted Average Borrowing Rate

Weighted Average Months to Maturity

Number of Distinct Counterparties
(dollars in thousands, unaudited)








Repurchase agreements collateralized by securities

$6,665,054 

3.85 %

2.32 

16 
Repurchase agreements collateralized by MSR

575,000 

6.71 %

7.05 

3 
Repurchase agreements collateralized by mortgage loans5,233 5.68 %2.75 1 
Total repurchase agreements

7,245,287 

4.07 %

2.69 

18 
Revolving credit facilities collateralized by MSR and related servicing advance obligations

916,871 

6.68 %18.41 

3 
Warehouse lines of credit collateralized by mortgage loans
12,694 5.67 %2.83 1 
Unsecured senior notes111,200 9.38 %52.54 n/a
Total borrowings

$8,286,052 






- 4 -

Borrowings by Collateral TypeAs of June 30, 2026As of March 31, 2026
(dollars in thousands)(unaudited)(unaudited)
Agency RMBS$5,057,324 $6,665,054 
Mortgage servicing rights and related servicing advance obligations1,437,771 1,491,871 
Other - secured11,839 17,927 
Other - unsecured(1)
111,350 111,200 
Total6,618,284 8,286,052 
TBA cost basis3,802,578 2,981,694 
Net payable (receivable) for unsettled RMBS— (230,695)
Total, including TBAs and net payable (receivable) for unsettled RMBS$10,420,862 $11,037,051 
Debt-to-equity ratio at period-end(2)
3.8 :1.04.8 :1.0
Economic debt-to-equity ratio at period-end(3)
6.0 :1.06.4 :1.0
Cost of Financing by Collateral Type(4)
Three Months Ended June 30, 2026Three Months Ended March 31, 2026
(unaudited)(unaudited)
Agency RMBS3.86 %3.98 %
Mortgage servicing rights and related servicing advance obligations(5)
7.16 %7.13 %
Other - secured5.84 %6.18 %
Other - unsecured(1)(5)
10.23 %9.35 %
Annualized cost of financing4.59 %4.68 %
Interest rate swaps(6)
(0.05)%(0.06)%
U.S. Treasury futures(7)
(0.01)%(0.11)%
TBAs(8)
3.73 %3.72 %
Total annualized cost of financing(8)
4.28 %4.20 %
____________________
(1)Unsecured borrowings under senior notes and, prior to their January 15, 2026 maturity date, convertible senior notes.
(2)Defined as total borrowings to fund Agency and non-Agency investment securities, MSR and related servicing advances and mortgage loans held-for-sale, divided by total equity.
(3)Defined as total borrowings to fund Agency and non-Agency investment securities, MSR and related servicing advances and mortgage loans held-for-sale, plus the implied debt on net TBA cost basis and net payable (receivable) for unsettled RMBS, divided by total equity.
(4)Excludes any repurchase agreements collateralized by U.S. Treasuries.
(5)Includes amortization of debt issuance costs.
(6)The cost of financing on interest rate swaps held to mitigate interest rate risk associated with the company’s outstanding borrowings includes interest spread income/expense and amortization of upfront payments made or received upon entering into interest rate swap agreements and is calculated using average borrowings balance as the denominator.
(7)The cost of financing on U.S. Treasury futures held to mitigate interest rate risk associated with the company’s outstanding borrowings is calculated using average borrowings balance as the denominator. U.S. Treasury futures income is the economic equivalent to holding and financing a relevant cheapest-to-deliver U.S. Treasury note or bond using short-term repurchase agreements.
(8)The implied financing benefit/cost of dollar roll income on TBAs is calculated using the average cost basis of TBAs as the denominator. TBA dollar roll income is the non-GAAP economic equivalent to holding and financing Agency RMBS using short-term repurchase agreements. TBAs are accounted for as derivative instruments in accordance with GAAP.
- 5 -

Conference Call
TWO will not be hosting a conference call to discuss its second quarter 2026 financial results. Investors may contact TWO Investor Relations at investors@twoinv.com with questions.

About TWO
Two Harbors Investment Corp., or TWO, a Maryland corporation, is a real estate investment trust that invests in mortgage servicing rights, residential mortgage-backed securities, and other financial assets. TWO is headquartered in St. Louis Park, MN.

FORWARD-LOOKING STATEMENTS
This press release may contain “forward-looking statements,” including certain plans, expectations, goals, projections and statements about the merger (the “CCM Merger”) with CrossCountry Intermediate Holdco, LLC (“CCM”), Two Harbors Investment Corp.’s (“TWO”) and CCM’s plans, objectives, expectations and intentions, the expected timing of completion of the proposed CCM Merger, the ability of the parties to complete the proposed CCM Merger considering the various closing conditions; and other statements that are not historical facts. Such statements are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included in this press release that address activities, events or developments that TWO or CCM expects, believes or anticipates will or may occur in the future are forward-looking statements. Words such as “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “create,” “estimate,” “plan,” “continue,” “intend,” “could,” “foresee,” “should,” “would,” “may,” “will,” “guidance,” “look,” “outlook,” “goal,” “future,” “assume,” “forecast,” “build,” “focus,” “work,” or the negative of such terms or other variations thereof and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. Projected and estimated numbers are used for illustrative purposes only, are not forecasts and may not reflect actual results. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. TWO’s ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although TWO believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that their expectations will be attained and therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this press release. These include, among other things: the expected timing and likelihood of completion of the proposed CCM Merger; the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed CCM Merger; the potential failure to receive, on a timely basis or otherwise, the required approvals of the proposed CCM Merger, and the potential failure to satisfy the other conditions to the consummation of the proposed CCM Merger in a timely manner or at all; risks related to disruption of management’s attention from ongoing business operations due to the proposed CCM Merger; the risk that any announcements relating to the proposed CCM Merger could have adverse effects on the market price of TWO common stock; the risk that the proposed CCM Merger and its announcement could have an adverse effect on the ability of TWO to retain and hire key personnel and the effect on TWO’s operating results and business generally; the outcome of any legal proceedings relating to the proposed CCM Merger, including stockholder litigation in connection with the proposed CCM Merger; the risk that restrictions during the pendency of the proposed CCM Merger may impact TWO’s ability to pursue certain business opportunities or strategic transactions; that TWO may be adversely affected by other economic, business or competitive factors; changes in future loan production; the availability of suitable investment opportunities; changes in interest rates; changes in the yield curve; changes in prepayment rates; the availability and terms of financing; general economic conditions and market conditions; conditions in the market for mortgage-related investments; and legislative and regulatory changes that could adversely affect TWO’s business. All such factors are difficult to predict and are beyond the control of TWO and CCM, including those detailed in TWO’s annual reports on Form 10-K, quarterly reports on Form 10-Q and periodic reports on Form 8-K that are available on TWO’s website at www.twoinv.com/investors and on the Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov.

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Each of the forward-looking statements of TWO are based on assumptions that TWO believes to be reasonable but that may not prove to be accurate. Any forward-looking statement speaks only as of the date on which such statement is made, and TWO does not undertake any obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), this press release presents non-GAAP financial measures, such as earnings available for distribution and related per basic common share measures. The non-GAAP financial measures presented by the company provide supplemental information to assist investors in analyzing the company’s results of operations and help facilitate comparisons to industry peers. However, because these measures are not calculated in accordance with GAAP, they should not be considered a substitute for, or superior to, the financial measures calculated in accordance with GAAP. The company’s GAAP financial results and the reconciliations from these results should be carefully evaluated. See the GAAP to non-GAAP reconciliation table on page 11 of this release.

Contact
TWO Investor Relations, investors@twoinv.com
# # #
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TWO HARBORS INVESTMENT CORP.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)
June 30,
2026		December 31,
2025
(unaudited)
ASSETS
Available-for-sale securities, at fair value (amortized cost $5,137,549 and $6,516,016, respectively; allowance for credit losses $360 and $1,609, respectively)
$5,091,319 $6,514,471 
Mortgage servicing rights, at fair value2,336,324 2,421,910 
Mortgage loans held-for-sale, at fair value
12,737 13,630 
Cash and cash equivalents642,691 842,319 
Restricted cash222,380 219,633 
Accrued interest receivable23,141 29,229 
Due from counterparties155,247 379,259 
Derivative assets, at fair value69,366 87,549 
Reverse repurchase agreements136,941 157,120 
Other assets141,323 194,097 
Total Assets$8,831,469 $10,859,217 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Repurchase agreements$5,639,830 $7,255,540 
Revolving credit facilities862,771 919,371 
Warehouse lines of credit4,333 9,406 
Senior notes111,350 111,055 
Convertible senior notes— 261,810 
Derivative liabilities, at fair value1,891 4,254 
Due to counterparties196,484 215,814 
Dividends payable48,955 48,932 
Accrued interest payable43,967 81,914 
Other liabilities177,003 163,194 
Total Liabilities7,086,584 9,071,290 
Stockholders’ Equity:
Preferred stock, par value $0.01 per share; 100,000,000 shares authorized and 24,870,817 shares issued and outstanding ($621,770 liquidation preference)
601,467 601,467 
Common stock, par value $0.01 per share; 175,000,000 shares authorized and 105,133,008 and 104,806,311 shares issued and outstanding, respectively
1,051 1,048 
Additional paid-in capital5,954,412 5,948,478 
Accumulated other comprehensive loss(45,736)(87)
Cumulative earnings1,289,014 1,194,485 
Cumulative distributions to stockholders(6,055,323)(5,957,464)
Total Stockholders’ Equity1,744,885 1,787,927 
Total Liabilities and Stockholders’ Equity$8,831,469 $10,859,217 
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TWO HARBORS INVESTMENT CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(dollars in thousands, except per share amounts)
Certain prior period amounts have been reclassified to conform to the current period presentation
Three Months EndedSix Months Ended
June 30,June 30,
2026202520262025
(unaudited)(unaudited)
Net interest expense:
Interest income$83,536 $117,082 $172,186 $228,464 
Interest expense89,557 136,701 184,718 268,415 
Net interest expense(6,021)(19,619)(12,532)(39,951)
Net servicing income:
Servicing income129,070 158,354 259,213 315,213 
Servicing costs3,211 2,386 5,059 5,583 
Net servicing income125,859 155,968 254,154 309,630 
Other income (loss):
Loss on investment securities(2,123)(32,830)(13,109)(65,559)
Loss on servicing asset(47,239)(35,902)(91,248)(72,123)
Gain (loss) on derivative instruments46,678 (84,207)62,319 (181,547)
Gain on mortgage loans held-for-sale704 883 2,756 1,552 
Other income1,735 1,038 3,052 1,799 
Total other loss(245)(151,018)(36,230)(315,878)
Expenses:
Compensation and benefits23,309 21,469 50,007 48,058 
Other operating expenses28,088 21,307 50,837 41,812 
Loss contingency accrual— 199,935 — 199,935 
Total expenses51,397 242,711 100,844 289,805 
Income (loss) before income taxes68,196 (257,380)104,548 (336,004)
Provision for income taxes5,951 1,661 10,019 2,092 
Net income (loss)62,245 (259,041)94,529 (338,096)
Dividends on preferred stock(12,866)(13,239)(25,673)(26,425)
Net income (loss) attributable to common stockholders$49,379 $(272,280)$68,856 $(364,521)
Basic earnings (loss) per weighted average common share$0.47 $(2.62)$0.65 $(3.51)
Diluted earnings (loss) per weighted average common share$0.46 $(2.62)$0.65 $(3.51)
Comprehensive income (loss):
Net income (loss)$62,245 $(259,041)$94,529 $(338,096)
Other comprehensive (loss) income:
Unrealized (loss) gain on available-for-sale securities(1,458)50,473 (45,649)207,645 
Other comprehensive (loss) income(1,458)50,473 (45,649)207,645 
Comprehensive income (loss)60,787 (208,568)48,880 (130,451)
Dividends on preferred stock(12,866)(13,239)(25,673)(26,425)
Comprehensive income (loss) attributable to common stockholders
$47,921 $(221,807)$23,207 $(156,876)
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TWO HARBORS INVESTMENT CORP.
INTEREST INCOME AND INTEREST EXPENSE
(in thousands)
Three Months EndedSix Months Ended
June 30,June 30,
2026202520262025
(unaudited)(unaudited)
Interest income:
Available-for-sale securities$76,516 $108,842 $157,203 $209,260 
Mortgage loans held-for-sale153 145 322 198 
Other6,867 8,095 14,661 19,006 
Total interest income83,536 117,082 172,186 228,464 
Interest expense:
Repurchase agreements69,556 110,288 144,083 217,366 
Revolving credit facilities16,339 20,343 32,689 40,469 
Warehouse lines of credit
89 129 198 184 
Senior notes2,845 1,496 5,686 1,496 
Convertible senior notes— 4,445 710 8,900 
Other
728 — 1,352 — 
Total interest expense89,557 136,701 184,718 268,415 
Net interest expense$(6,021)$(19,619)$(12,532)$(39,951)
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TWO HARBORS INVESTMENT CORP.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(dollars in thousands, except share data)
Certain prior period amounts have been reclassified to conform to the current period presentation
Three Months Ended

June 30,
2026		March 31,
2026

(unaudited)
(unaudited)
Reconciliation of comprehensive income (loss) to Earnings Available for Distribution:


Comprehensive income (loss) attributable to common stockholders$47,921 $(24,714)
Adjustment for other comprehensive loss attributable to common stockholders:

Unrealized loss on available-for-sale securities1,458 44,191 
Net income attributable to common stockholders$49,379 $19,477 
Adjustments to exclude reported realized and unrealized (gains) losses:

Realized loss on securities2,153 10,885 
Unrealized loss on securities1 86 
(Reversal of) provision for credit losses(31)15 
Realized and unrealized loss on mortgage servicing rights47,239 44,009 
Realized and unrealized gain on derivative instruments(44,044)(11,897)
Other gains— (4)
Other adjustments:
MSR amortization(1)
(58,477)(59,893)
TBA dollar roll income(2)
13,066 15,874 
U.S. Treasury futures income(3)
248 3,370 
Change in servicing reserves
(18)41 
Non-cash equity compensation expense
1,436 4,422 
Merger-related costs(4)
13,647 5,634 
Net provision for income taxes on non-EAD5,001 3,737 
Earnings available for distribution to common stockholders(5)
$29,600 $35,756 
Weighted average basic common shares
104,937,007 104,876,645 
Earnings available for distribution to common stockholders per weighted average basic common share
$0.28 $0.34 
_____________
(1)MSR amortization refers to the portion of change in fair value of MSR primarily attributed to the realization of expected cash flows (runoff) of the portfolio, which is deemed a non-GAAP measure due to the company’s decision to account for MSR at fair value.
(2)TBA dollar roll income is the economic equivalent to holding and financing Agency RMBS using short-term repurchase agreements.
(3)U.S. Treasury futures income is the economic equivalent to holding and financing a relevant cheapest-to-deliver U.S. Treasury note or bond using short-term repurchase agreements.
(4)Merger-related costs consist of expenses incurred in connection with the company’s pending merger with CCM, as well as its terminated merger with UWM.
(5)EAD is a non-GAAP measure that we define as comprehensive income (loss) attributable to common stockholders, excluding realized and unrealized gains and losses on the aggregate investment portfolio, gains and losses on repurchases of preferred stock, provision for (reversal of) credit losses, reserve expense for representation and warranty obligations on MSR, non-cash compensation expense related to equity incentive plans and merger-related costs. As defined, EAD includes net interest income, accrual and settlement of interest on derivatives, dollar roll income on TBAs, U.S. Treasury futures income, servicing income, net of estimated amortization on MSR and certain cash related operating expenses. EAD provides supplemental information to assist investors in analyzing the company’s results of operations and helps facilitate comparisons to industry peers. EAD is one of several measures our board of directors considers to determine the amount of dividends to declare on our common stock and should not be considered an indication of our taxable income or as a proxy for the amount of dividends we may declare.
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