Two Harbors Q2 2026: Net Income Swings to $62M as Merger Nears Close
TWO sits 38% above its 52-week low of $8.78 on light trading volume (0.1× avg).
Summary
Two Harbors reported Q2 2026 net income of $62.2M, a sharp turnaround from a $259.0M loss in Q2 2025, as the prior year's litigation charge did not recur. The $12.00/share CCM merger was approved by shareholders and is expected to close on August 3, 2026.
Key Events · Earnings and Guidance · TWO
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Net Income Swings to $62.2M
Q2 2026 net income was $62.2M, compared to a $259.0M loss in Q2 2025. The prior year included a $199.9M litigation accrual that did not recur.
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Book Value Declines to $10.68/Share
Book value per common share fell to $10.68 from $11.13 at year-end 2025, driven by MSR portfolio runoff and dividends.
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Merger Approved, Closing August 3
Shareholders approved the $12.00/share all-cash merger with CrossCountry Mortgage on July 2, 2026. The deal is expected to close August 3, 2026.
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Balance Sheet Shrinks, Leverage Falls
Total assets declined to $8.83B from $10.86B at year-end, and the debt-to-equity ratio dropped to 3.8:1.0 from 4.8:1.0, reflecting portfolio runoff and deleveraging.
Analysis · TWO · Real Estate & Construction
A sharp swing to a $62.2M net profit in Q2 2026 from a $259.0M loss a year ago was largely driven by the absence of a $199.9M litigation charge that weighed on the prior period. The core servicing business generated $125.9M in net servicing income, yet the MSR portfolio continued to shrink, and book value per share slipped to $10.68. With shareholders approving the pending $12.00/share all-cash merger with CrossCountry Mortgage on July 2 and a close expected August 3, this is likely the last quarterly report before the company goes private.
At the time of this filing, TWO was trading at $12.11 on NYSE in the Real Estate & Construction sector, with a market capitalization of approximately $1.3B. The 52-week trading range was $8.78 to $14.17. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.