two

two Earnings Recaps

TWO Financials 2 recaps
Q1 2026 Apr 30, 2026

Shares rallied 5.1% after TWO announced an amended merger agreement with CrossCountry Mortgage, increasing the all-cash acquisition price to $11.30 per share. The improved offer, secured after a competitive bidding process, appears to have driven positive investor reaction despite reporting a negative 2% economic return for the quarter.

Key takeaways
  • TWO entered into a revised merger agreement for an all-cash sale to CrossCountry Mortgage at $11.30 per share, up from the prior $10.80 offer, following a competing bid from UWMC.
  • Book value declined to $10.57 per share from $11.13 at year-end, with a negative 2% quarterly economic return when factoring in the $0.34 dividend.
  • The quarter recorded a comprehensive loss of $24.7 million ($0.24 per share), reflecting mark-to-market losses on Agency RMBS amid rising rates and wider spreads.
  • Direct-to-consumer loan originations were relatively stable at $92 million, with an additional $57 million in pipeline at quarter-end.
  • Transaction is expected to close in the second half of 2026; company plans to continue regular quarterly dividends until closing.
Full recap
Q3 2025 Oct 28, 2025

TWO reported a challenging third quarter with a negative economic return of 6.3% mainly due to a $375 million litigation settlement expense, but underlying operational metrics remain robust and continue to leverage their strategic subservicing initiatives.

Key takeaways
  • Completed a $375 million settlement with former external management, funded through portfolio adjustments.
  • Adjusted RMBS portfolio size and successfully increased third-party subservicing UPB to approximately $40 billion.
  • Achieved record direct-to-consumer locks and originated $49 million in loans, indicating strong growth potential despite a lower capital base.
  • Plans to redeem $262 million in convertible notes by January 2026 to align structural leverage with historical norms.
  • Confident about future growth opportunities and view current stock valuation as significantly undervalued compared to peers.
Full recap