UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended: December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-34506 TWO HARBORS INVESTMENT CORP. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) Maryland 27-0312904 (I.R ...

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Core Viewpoint - Shares in Two Harbors Investment Corp. (TWO) have shown solid gains in 2026, indicating market confidence in the successful closure of its merger with UWM Holdings Corporation (UWMC) [1] Company Summary - Two Harbors Investment Corp. is involved in the real estate investment trust (REIT) sector, focusing on high-yield investments [1] - The company has a history of engaging in various investment strategies, including long stock positions combined with covered calls and cash secured puts [1] Industry Context - The market's positive sentiment towards TWO reflects broader trends in the REIT and financial sectors, particularly in relation to mergers and acquisitions [1]

Core Viewpoint - Shares in Two Harbors Investment Corp. (TWO) have shown solid gains in 2026, driven by market confidence in the successful closure of its merger with UWM Holdings Corporation (UWMC) [1] Company Summary - Two Harbors Investment Corp. is involved in the real estate investment trust (REIT) sector, focusing on high-yield investments [1] - The company has a history of engaging in various investment strategies, including long stock positions combined with covered calls and cash secured puts [1] Industry Summary - The REIT and financial sectors are currently experiencing positive sentiment, particularly regarding mergers and acquisitions, which may present investment opportunities [1]

Financial Data and Key Metrics Changes - The company's book value increased to $11.13 per share at December 31, 2025, compared to $11.04 per share at September 30, 2025, resulting in a quarterly economic return of +3.9% [12] - Comprehensive income for the fourth quarter was $50.4 million or $0.48 per share, with net interest and servicing income decreasing due to MSR sales and lower float income [12][13] - The total economic return on book value for the full year 2025 was -12.6%, but excluding a litigation settlement expense, the return was +12.1% [7] Business Line Data and Key Metrics Changes - The company settled on the sale of an additional $10 billion UPB of MSR, increasing total third-party subservicing to $40 billion at year-end compared to $30 billion at the end of the third quarter [10] - The direct-to-consumer (DTC) platform funded $94 million in first and second liens, a 90% increase from the third quarter [10] - The MSR portfolio experienced a minor increase in prepayment rates to 6.4% from 6.0% CPR, with 60-plus-day delinquencies remaining low at under 1% [22] Market Data and Key Metrics Changes - The yield curve steepened, with two-year Treasury yields down 14 basis points to 3.47%, while 10-year Treasury yields rose by 2 basis points to 4.17% [9] - The nominal spread for current coupon RMBS tightened by 30 basis points to 114 basis points of the swap curve, indicating a positive response to the decline in interest rate volatility [16] - The share of 30-year loans eligible for refinance returned to nearly 20%, with refinanceable coupon speeds increasing [18] Company Strategy and Development Direction - The merger with United Wholesale Mortgage (UWM) is expected to double the size of the MSR portfolio to a pro forma $400 billion and create a powerful strategic alignment for accelerated growth [6] - The company aims to leverage UWM's expertise in capital markets and asset management while enhancing its own servicing capabilities [6] - The focus remains on maintaining a paired portfolio construction of MSR and Agency RMBS to generate attractive risk-adjusted returns [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the merger with UWM will bring significant benefits and position the company for accelerated growth [11] - The administration's commitment to lower mortgage rates is expected to stimulate increased mortgage and origination activity in 2026 [7] - Management noted that while no decisions have been made regarding the securities portfolio post-merger, they will be thoughtful about future actions [8] Other Important Information - The company ended the quarter with over $800 million in cash and repaid $261.9 million in convertible senior notes on their maturity date [14] - The economic debt to equity ratio was slightly lower at 7 times, with portfolio sensitivity to spread changes marginally increasing [15] Q&A Session Summary Question: How is the merger impacting portfolio construction? - Management confirmed that they are operating as an independent company and managing the portfolio as usual, with changes reflecting market assessments of risk and reward [28] Question: What is the current book value? - The book value is up about 1.5%-2% as of January 30, 2026 [29] Question: How is leverage being considered in the current market? - Management has become more defensive due to the current spread environment and has reduced leverage and mortgage risk [34] Question: What are the chances of an LLPA or guarantee fee reduction at the GSEs? - There is a reasonable chance for changes on the LLPA grid, but the market is still digesting the potential impacts [38] Question: How is the MSR market performing? - The interest in the MSR market remains strong, with no notable changes in bank activity [39] Question: What is the prospective return outlook? - Spreads have tightened since the end of December, which may marginally affect dividend levels [43]

Financial Data and Key Metrics Changes - The company's book value increased to $11.13 per share at December 31, 2025, compared to $11.04 per share at September 30, 2025, resulting in a quarterly economic return of +3.9% [13] - Comprehensive income for the quarter was $50.4 million or $0.48 per share, with net interest and servicing income decreasing due to MSR sales and lower float income [13][14] - The total economic return on book value for the full year 2025 was -12.6%, but excluding a litigation settlement expense, the return was +12.1% [8] Business Line Data and Key Metrics Changes - The company settled on the sale of an additional $10 billion UPB of MSR, increasing total third-party subservicing to $40 billion at year-end compared to $30 billion at the end of the third quarter [11] - The direct-to-consumer (DTC) platform funded $94 million in first and second liens, a 90% increase from the third quarter [11] Market Data and Key Metrics Changes - The mortgage finance landscape shifted in 2025, emphasizing the need for scale in origination efforts [5][6] - The nominal spread for current coupon RMBS tightened by 30 basis points to 114 basis points of the swap curve, indicating a positive response to declining interest rate volatility [18] Company Strategy and Development Direction - The merger with United Wholesale Mortgage (UWM) is expected to double the size of the MSR portfolio to a pro forma $400 billion, positioning the combined company for accelerated growth [6][12] - The company aims to leverage UWM's expertise in capital markets and asset management while enhancing servicing capabilities through RoundPoint [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the merger with UWM will yield significant benefits and enhance competitive positioning in the market [12] - The administration's commitment to lower mortgage rates is anticipated to stimulate increased mortgage and origination activity in 2026 [8] Other Important Information - The company ended the quarter with over $800 million in cash and repaid $261.9 million of convertible senior notes on their maturity date [15] - The portfolio at December 31, 2025, was valued at $13.2 billion, with $9 billion in settled positions and $4.2 billion in TBAs [17] Q&A Session Summary Question: How is the merger affecting portfolio construction? - Management confirmed that they are operating as an independent company and managing the portfolio as usual, with changes driven by market assessments [30] Question: What is the current book value? - The book value is up about 1.5%-2% as of January 30, 2026 [31] Question: How is leverage being managed in the current market? - The company has become more defensive and reduced leverage slightly due to current market conditions and spread movements [36] Question: What are the chances of an LLPA or guarantee fee reduction at the GSEs? - There is a reasonable chance for changes in the LLPA grid, but the market is still digesting the potential impacts [39] Question: How is the MSR market performing? - The interest in the MSR market remains strong, with no notable changes in bank activity observed [40] Question: What is the prospective return outlook? - Spreads have tightened since the end of December, which may marginally affect return potential [44]

Financial Data and Key Metrics Changes - The book value increased to $11.13 per share at December 31, 2025, compared to $11.04 per share at September 30, 2025, resulting in a quarterly economic return of +3.9% [13] - The company generated comprehensive income of $50.4 million or $0.48 per share, with net interest and servicing income decreasing due to MSR sales and lower float income [13][14] - For the full calendar year 2025, the total economic return on book value was -12.6%, but excluding a litigation settlement expense, the return was +12.1% [6][7] Business Line Data and Key Metrics Changes - The company settled on the sale of an additional $10 billion UPB of MSR, increasing total third-party subservicing to $40 billion at year-end compared to $30 billion at the end of Q3 [11] - The direct-to-consumer (DTC) platform funded $94 million in first and second liens, a 90% increase from Q3, with an additional $38 million in the pipeline [11] - The MSR portfolio experienced a minor 0.4 percentage point pickup in prepayment rates to 6.4%, remaining below projections for most of the portfolio [23][24] Market Data and Key Metrics Changes - The yield curve steepened, with two-year Treasury yields down 14 basis points to 3.47%, while 10-year Treasury yields rose by 2 basis points to 4.17% [10] - The nominal spread for current coupon RMBS tightened by 30 basis points to 114 basis points of the swap curve, indicating a positive response to lower interest rate volatility [18][19] - The share of 30-year loans eligible for refinance returned to nearly 20%, with refinanceable coupon speeds increasing [20] Company Strategy and Development Direction - The merger with United Wholesale Mortgage (UWM) is expected to double the size of the MSR portfolio to a pro forma $400 billion, enhancing competitive positioning and growth potential [6][12] - The company aims to leverage UWM's expertise in capital markets and asset management while benefiting from RoundPoint's servicing capabilities [6] - The strategic focus is on maintaining a paired portfolio construction of MSR and Agency RMBS to mitigate exposure to fluctuations in mortgage spreads [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the merger with UWM will yield significant benefits and position the company for accelerated growth [12] - The administration's commitment to lower mortgage rates is anticipated to stimulate increased mortgage and origination activity in 2026 [7] - Management noted that while no decisions have been made regarding the securities portfolio post-merger, they will be thoughtful about future actions [9] Other Important Information - The company ended the quarter with over $800 million in cash and repaid $261.9 million in convertible senior notes on their maturity date [14][15] - The economic debt to equity ratio was slightly lower at 7 times, with portfolio sensitivity to spread changes marginally increasing [17] Q&A Session Summary Question: How is the merger impacting portfolio construction? - Management confirmed that they are operating as an independent company and managing the portfolio as usual, with changes reflecting market assessments [30] Question: What is the current book value? - The book value is up about 1.5%-2% as of January 30, 2026 [32] Question: How is leverage being considered in the current market? - Management has become more defensive due to market conditions and has reduced leverage and mortgage risk slightly [36] Question: What are the chances of an LLPA or guarantee fee reduction at the GSEs? - There is a reasonable chance for changes on the LLPA grid, but the market is still digesting the potential impacts [40] Question: How are prospective returns affected by recent spread tightening? - Spreads are tighter since the end of December, which may marginally affect return potential [45] Question: What is the impact of GSE activity on MSR valuations? - Management noted that the MSR market remains strong, and they have not seen notable changes in bank interest or activity [41][62]

An MSR-Focused REIT Fourth Quarter Earnings Call Presentation February 3, 2026 Safe Harbor Statement FORWARD-LOOKING STATEMENTS This presentation of Two Harbors Investment Corp., or TWO, includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of ...

Core Viewpoint - Two Harbors Investment Corp. (TWO) is facing challenges in meeting earnings expectations, with a recent adjusted earnings per share of $0.26, missing the estimated $0.30, and has consistently missed earnings estimates over the last four quarters [1][3]. Financial Performance - TWO reported a GAAP net loss of $1.3 million, or -$0.02 per weighted average basic common share, indicating ongoing financial difficulties [3]. - The company has a price-to-earnings (P/E) ratio of approximately -6.52, reflecting negative earnings over the trailing twelve months [4]. - The price-to-sales ratio stands at about 2.24, suggesting investors are willing to pay $2.24 for every dollar of sales, while the enterprise value to sales ratio is significantly higher at 16.18, indicating a high valuation relative to sales [4]. Debt and Liquidity - TWO has a high debt-to-equity ratio of 4.76, indicating significant reliance on debt financing, which could pose risks if cash flow generation becomes challenging [5]. - The current ratio of 0.94 highlights potential difficulties in covering short-term liabilities with short-term assets [5]. Strategic Developments - A significant development for TWO is the $1.3 billion deal with UWM, which will integrate TWO's $176 billion mortgage servicing rights (MSR) portfolio and the RoundPoint platform [6]. - This merger is anticipated to generate $150 million in synergies, potentially enhancing the company's earnings through reduced funding costs and improved hedging strategies [6].

Financial Performance - TWO reported a comprehensive income of $50.4 million, or $0.48 per weighted average basic common share for Q4 2025[6]. - The company declared a fourth quarter common stock dividend of $0.34 per share, representing a 3.9% quarterly economic return on book value[6]. - TWO's book value per common share was reported at $11.13, with a total stockholder return of 2.8% for the period from December 31, 2024, to December 31, 2025[6][5]. - The company experienced a (12.6)% economic return on book value, which improved to 12.1% when excluding a $375 million settlement expense related to litigation[6][8]. - The company reported a comprehensive income of $63,471 thousand for the three months ended December 31, 2025, compared to $10,164 thousand in the same period of 2024[42]. - Net income attributable to common stockholders turned negative at $(1,325) thousand for the three months ended December 31, 2025, compared to a profit of $264,945 thousand in the same period of 2024[42]. - Total interest income for the three months ended December 31, 2025, was $89,919,000, a decrease from $103,774,000 for the same period in 2024, representing a decline of approximately 13.3%[44]. - Total interest expense for the three months ended December 31, 2025, was $105,408,000, down from $138,668,000 in the prior year, reflecting a decrease of about 23.9%[44]. - Net interest expense for the three months ended December 31, 2025, was $(15,489,000), compared to $(34,894,000) for the same period in 2024, indicating an improvement of approximately 55.6%[44]. - Earnings available for distribution to common stockholders for the three months ended December 31, 2025, was $27,435,000, compared to $37,154,000 in the prior quarter, showing a decrease of about 26.2%[46]. - Earnings available for distribution per weighted average basic common share was $0.26 for the three months ended December 31, 2025, down from $0.36 in the previous quarter, a decline of approximately 27.8%[46]. - The company reported a realized loss on securities of $15,018,000 for the three months ended December 31, 2025[46]. - The unrealized gain on available-for-sale securities was $(51,754,000) for the three months ended December 31, 2025, compared to $(61,038,000) in the previous quarter[46]. Assets and Liabilities - Total assets decreased from $12,204,319 thousand as of December 31, 2024, to $10,859,217 thousand as of December 31, 2025, representing a decline of approximately 11.0%[41]. - Total liabilities decreased from $10,081,810 thousand in 2024 to $9,071,290 thousand in 2025, a reduction of approximately 10.0%[41]. - Cash and cash equivalents increased from $504,613 thousand in 2024 to $842,319 thousand in 2025, an increase of approximately 67.0%[41]. - The allowance for credit losses decreased from $2,866 thousand in 2024 to $1,609 thousand in 2025, a reduction of about 43.9%[41]. Borrowings and Financing - As of December 31, 2025, total borrowings amounted to $8,557,182, an increase from $8,430,709 as of September 30, 2025, representing a growth of 1.5%[22]. - The weighted average borrowing rate for total repurchase agreements was 4.36% as of December 31, 2025, compared to 4.61% as of September 30, 2025, indicating a decrease of 0.25 percentage points[22]. - The debt-to-equity ratio at period-end was 4.8:1.0 as of December 31, 2025, consistent with the previous quarter[22]. - The annualized cost of financing decreased to 5.04% for the three months ended December 31, 2025, down from 5.38% for the three months ended September 30, 2025[22]. - The company reported a total of $6,601,446 in repurchase agreements collateralized by securities as of December 31, 2025, an increase from $6,363,146 as of September 30, 2025[22]. Mortgage Servicing Rights and Acquisitions - The company added $399.1 million in unpaid principal balance (UPB) of mortgage servicing rights (MSR) through flow-sale acquisitions and recapture, and sold $9.6 billion MSR UPB on a subservicing-retained basis[6]. - As of December 31, 2025, the MSR portfolio had a weighted average gross coupon rate of 3.55% and a 60+ day delinquency rate of 0.87%[6]. - The company maintains a focus on acquiring mortgage servicing rights and managing its portfolio effectively[31]. Merger and Future Plans - TWO entered into a definitive merger agreement with UWM Holdings Corporation, where TWO stockholders will receive a fixed exchange ratio of 2.3328 shares of UWMC Class A Common Stock for each share of TWO common stock, representing an $11.94 per share value[6]. - The transaction with UWMC is expected to close in Q2 2026, subject to stockholder approval and regulatory conditions[6]. - The company has plans for a proposed transaction with UWMC, which includes expectations for future performance and synergies[30]. - The company is in the process of a proposed merger with UWMC, which has resulted in certain operating expenses related to transaction costs[48]. Risks and Conference Call - The company is exposed to various risks, including changes in credit markets and economic conditions, which could impact future performance[31]. - The company will host a conference call on February 3, 2026, to discuss its fourth quarter 2025 financial results[28].