Q1 2026 Two Harbors Investment Corp Earnings Call Transcript
Key Points
- Two Harbors Investment Corp (TWO) has entered into a merger agreement with CrossCountry Mortgage, offering shareholders $11.30 per share in cash, an increase from the initial $10.80 per share.
- The merger with CrossCountry Mortgage is expected to create a fully integrated mortgage company, combining retail origination with a best-in-class servicing platform.
- Despite rising interest rates, Two Harbors Investment Corp (TWO) funded $92 million in first and second liens in the first quarter, maintaining the same level as the previous quarter.
- The company ended the quarter with over $500 million in cash on the balance sheet, indicating strong liquidity.
- Two Harbors Investment Corp (TWO) has a robust MSR portfolio with low delinquency rates and a positive outlook for returns, supported by a broad range of buyers in the MSR market.
- Two Harbors Investment Corp (TWO) reported a negative 2% quarterly economic return, with a decrease in book value to $10.57 per share from $11.13 per share at the end of the previous quarter.
- The company incurred a comprehensive loss of $24.7 million or $0.24 per share, attributed to lower net interest and servicing income.
- The performance of risk assets, including RMBS, deteriorated over the quarter due to geopolitical tensions in the Middle East, leading to wider spreads.
- Economic forecasts became more uncertain, with the Federal Reserve leaving rates unchanged, impacting market expectations and increasing volatility.
- The housing market remains slow with persistent inventory shortages, and rising mortgage rates are likely to reverse improvements in housing affordability.
Good morning. My name is Jennifer, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Two's first quarter 2026 earnings call. (Operator Instructions)
I would now like to turn the call over to Ms. Maggie Karr.
Good morning, everyone, and welcome to our call to discuss Two's first quarter 2026 financial results. With me on the call this morning are Bill Greenberg, our President and Chief Executive Officer; Nick Letica, our Chief Investment Officer; and William Dellal, our Chief Financial Officer.
The earnings press release and presentation associated with today's call have been filed with the SEC and are available on the SEC's website as well as the Investor Relations page of our website at twoinv.com. In our earnings release and presentation, we have provided reconciliations of GAAP to non-GAAP financial measures, and we urge you to review this information in conjunction with today's call.
As a reminder, our
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