Two Harbors Settles Pine River Litigation With $375M Payment; Retains IP Rights, Maintains Liquidity Via Cash And Borrowing Capacity

Announces Resolution of Litigation and Third Quarter 2025 Common and Preferred Stock Dividends

TWO ((Two Harbors Investment Corp, NYSE:TWO), an MSR-focused REIT, today provided a business update regarding the resolution of pending litigation and its third quarter 2025 common and preferred stock dividends.

Resolution of Pine River Litigation

• The company has entered into a settlement agreement, dated as of August 20, 2025, resolving all claims in its litigation with PRCM Advisers LLC, Pine River Capital Management L.P., and Pine River Domestic Management L.P. (collectively, "Pine River").
• Pursuant to the settlement agreement, the company has agreed to make a one-time cash payment of $375 million to Pine River, which is payable within thirty days of the date of the settlement agreement.
• The company expects to fund the settlement payment through a combination of cash on hand and available borrowing capacity, and will continue to have ample liquidity following the payment.
• Pine River will relinquish all ownership claims to intellectual property used by the company.

Business Update

• The company estimates that its book value was approximately $12.73 per common share as of August 15, 2025 (before giving effect to any common stock dividend accrual, but after giving effect to preferred stock dividend accrual), compared to $12.14 per common share as of June 30, 2025, representing a total economic return of approximately 4.9%.
• After adjusting for the settlement payment, the company estimates that its book value as of August 15, 2025 would be approximately $11.06 per common share (before giving effect to any common stock dividend accrual, but after giving effect to preferred stock dividend accrual).
• In the third quarter, the company signed a term sheet with a new subservicing client, seeded by the sale by the company of approximately $20 billion unpaid principal balance in MSR on a servicing-retained basis, subject to customary settlement procedures. This new relationship will increase the company's third-party subservicing business to $31 billion unpaid principal balance, or approximately 138,000 loans.

Third Quarter Common and Preferred Stock Dividends

The Board of Directors of TWO today declared a dividend of $0.34 per share of common stock for the third quarter of 2025. The third quarter dividend is payable on October 29, 2025 to common stockholders of record at the close of business on October 3, 2025.

The company's common stock dividend is a function of several factors, including sustainability, earnings and return potential of the portfolio, taxable income, impact to book value and the market environment. The third quarter 2025 dividend reflects the company's book value after giving effect to the settlement payment.