two Q1 2026 Earnings Recap

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.