Two Harbors posts Q4 net loss

Overview

• MSR-focused REIT announced merger with UWM Holdings in all-stock transaction

• Company reported Q4 book value of $11.13 per common share

• Generated Q4 comprehensive income of $50.4 mln

Outlook

• Company expects merger with UWMC to close in Q2 2026

• Two Harbors to pay regular dividends until merger closes

Result Drivers

• MSR PORTFOLIO PERFORMANCE - Added $399.1 mln in unpaid principal balance through acquisitions and recapture, sold $9.6 bln on a subservicing-retained basis

• RMBS RETURNS - RMBS returns benefited from lower volatility and increased demand from GSEs, according to CIO Nick Letica

• MORTGAGE SPREAD TIGHTENING - Significant mortgage spread tightening realized, contributing to RMBS performance

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the specialized reits peer group is "buy."

• Wall Street's median 12-month price target for Two Harbors Investment Corp is $11.75, about 2.4% above its January 30 closing price of $11.47

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 7 three months ago

Press Release: ID:nBw4TVRTra

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.