Company: TWO-PC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001465740-25-000140
Chunk: 238

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-07-29
Form: 10-Q
Item: Item 8
Chunk 238
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U is forfeited, the related DERs which have not yet been paid shall be forfeited.Performance Share UnitsThe following table summarizes the activity related to PSUs for the six months ended June 30, 2025 and 2024:Six Months Ended June 30,20252024Target UnitsWeighted Average Grant Date Fair Market ValueTarget UnitsWeighted Average Grant Date Fair Market ValueOutstanding at Beginning of Period652,770 $19.58 485,822 $24.89 Granted390,662 13.29 292,000 16.19 Vested(90,051)(21.83)(60,777)(34.68)Forfeited(94,560)(19.82)(59,050)(30.75)Outstanding at End of Period858,821 $16.46 657,995 $19.60 The estimated fair value of PSUs on grant date is determined using a Monte Carlo simulation. PSUs vest promptly following the completion of a three year performance period, as long as such grantee complies with the terms and conditions of the applicable PSU award agreement. The number of underlying shares of common stock that vest and that the grantee becomes entitled to receive at the time of vesting will be determined based on the level of achievement of certain Company performance goals during the performance period and will generally range from 0% to 200% of the target number of PSUs granted. All PSUs entitle the grantee to DERs during the vesting period, which accrue in the form of additional PSUs reflecting the value of any dividends declared on the Company’s common stock during the vesting period. In the event that a PSU is forfeited, the related accrued DERs shall be forfeited. Non-Cash Equity Compensation ExpenseFor the three and six months ended June 30, 2025, the Company recognized compensation expense related to RSUs and PSUs granted pursuant to the Equity Incentive Plan of $1.9 million and $8.5 million, respectively. For the three and six months ended June 30, 2024, the Company recognized compensation expense related to RSUs and PSUs granted pursuant to the Equity Incentive Plan of $1.6 million and $7.7 million, respectively. As of June 30, 2025, the Company had $7.4 million of total unrecognized compensation cost related to unvested share-based compensation arrangements. This cost is expected to