Two Harbors settles Pine River litigation for $375 million

NEW YORK - Two Harbors Investment Corp (NYSE:TWO), an MSR-focused real estate investment trust with a market capitalization of $1.06 billion, announced Wednesday it has reached a $375 million settlement agreement with Pine River to resolve all pending litigation claims between the parties. According to InvestingPro data, the company’s current ratio of 0.17 indicates tight liquidity conditions, making this settlement particularly significant.

The settlement, dated August 20, 2025, requires Two Harbors to make a one-time cash payment to Pine River within thirty days. The company plans to fund the payment through a combination of cash on hand and available borrowing capacity.

As part of the agreement, Pine River will relinquish all ownership claims to intellectual property used by Two Harbors.

"The resolution of this matter is an important development for our company that allows us to move forward with clarity and certainty of purpose," said Bill Greenberg, Two Harbors’ President and CEO, in a press release statement.

The company estimated its book value at approximately $12.73 per common share as of August 15, 2025, compared to $12.14 per share on June 30, 2025. After adjusting for the settlement payment, the estimated book value would decrease to approximately $11.06 per common share. Trading at $10.13, the stock is currently near its 52-week low of $9.67, and InvestingPro analysis suggests the stock is undervalued. For detailed valuation metrics and 8 additional key insights, investors can access the comprehensive Pro Research Report.

Two Harbors also declared a dividend of $0.34 per share of common stock for the third quarter of 2025, payable on October 29 to stockholders of record as of October 3. The company noted that the dividend reflects its book value after accounting for the settlement payment. With a substantial dividend yield of 15.49% and a 17-year track record of consecutive dividend payments, Two Harbors remains committed to shareholder returns despite recent challenges. InvestingPro subscribers can access detailed dividend history and forecasts among 30+ key financial metrics.

Additionally, the company announced preferred stock dividends for its Series A, B, and C shares, payable on October 27 to stockholders of record as of October 10.

In a separate business update, Two Harbors reported signing a term sheet with a new subservicing client, which involves the sale of approximately $20 billion in unpaid principal balance in MSR on a servicing-retained basis. This new relationship will increase the company’s third-party subservicing business to $31 billion in unpaid principal balance.

In other recent news, Two Harbors Investment Corp reported its financial results for the second quarter of 2025, revealing a shortfall in earnings and revenue. The company announced earnings per share (EPS) of $0.28, which was below the forecasted $0.34, marking a 17.65% miss. Additionally, revenue figures were lower than anticipated, with actual revenue at negative $18.12 million compared to the expected negative $12.96 million. These financial results were part of a challenging quarter for Two Harbors. The earnings miss and revenue shortfall were notable developments for investors. Following the release of these results, the company’s stock experienced a decline. The recent earnings report highlights the financial hurdles Two Harbors faced during the quarter.

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