Two Harbors says one approval still pending in CCM deal, updates stub dividend formula

Two Harbors Investment Corp. has secured required state and agency approvals from all but one state for its planned sale to CrossCountry Intermediate Holdco LLC, which will change the previously estimated stub dividend tied to the merger timeline.

As previously disclosed, CCM will pay a “stub period” dividend to common shareholders in connection with the TWO transaction. In earlier materials, the companies estimated a stub dividend of $0.12196 per share based on an anticipated Aug. 3 closing date.

Because the deal will now close later, the stub dividend will be recalculated based on the actual closing date. The amount will equal Two Harbors’ most recent quarterly dividend of $0.34 per share, multiplied by the number of days from the end of the second quarter of 2026 through the day before the merger closes, divided by 92 days in the third quarter of 2026, the filing said.

The stub dividend will be paid to holders of record as of the last trading day immediately before the effective time of the merger. It will be paid concurrently with the merger consideration due to Two Harbors shareholders.

“The stub dividend will not reduce or otherwise affect the merger consideration payable to holders of TWO common stock,” the company stated in the filing.

A spokesperson for CCM said the company did not have a comment on the topic.

Two first announced the CCM deal earlier this year as a strategic move to pair its mortgage asset portfolio with a large retail origination and servicing platform.

If the acquisition closes as currently designed, CCM will pay about $1.26 billion, after weathering a public bidding battle with United Wholesale Mortgage (UWM) that increased the price by about $126 million.

CCM raised its cash bid from $10.80 per share in March to $11.30 in April and then to $12 in May, adding a dividend component. The current price came in at a 19% premium to TWO’s end of March tangible book value

In 2025, CCM produced $51 billion in mortgages, making it the No. 7 overall lender and the top distributed retail mortgage lender, according to industry rankings.

Two would bring a $159 billion mortgage-servicing rights portfolio to CCM’s $202 billion as of the first quarter, per Inside Mortgage Finance. It also subservices about $40 billion in loans through its servicing arm, RoundPoint Mortgage Servicing LLC, which it acquired in 2023. Two Harbors also has a small direct-to-consumer origination business, launched in 2024 to support recapture of existing customers.