Two Harbors Investment Corp. Announces 2012 Dividend Tax Treatment

Two Harbors Investment Corp. (NYSE: TWO; NYSE MKT: TWO.WS) today announced the tax treatment of common stock dividends declared in 2012. This information is provided to assist stockholders with tax reporting requirements related to dividend distribution of taxable income by Two Harbors Investment Corp.

Stockholders should review the 2012 tax statements received from their brokerage firms or other institutions to ensure that the statements agree with the information provided below. Additionally, as each stockholder’s tax situation may be different, stockholders are encouraged to consult with their own professional tax advisor with respect to their individual tax consequences.

During 2012, Two Harbors did not generate qualified dividends income (QDI). Further, no portion of the company’s 2012 dividend distributions is expected to consist of unrelated business taxable income (UBTI), which is subject to special tax reporting for certain tax exempt investors.

Because Two Harbors is a REIT, dividends declared in the last month of a calendar year with a record date in that calendar year, but which are payable in January of the following year, are considered paid for Form 1099 reporting purposes on the record date, not on the payable date, to the extent the REIT has any remaining undistributed earnings and profits (as computed for income tax purposes) as of December 31 of that calendar year.

The Federal income tax classification of the 2012 distribution as it is expected to be reported on Form 1099-DIV is set forth in the following table.
         
    Box 1a Total   Box 2a
Declaration Date   Record Date   Payable Date  

2012 Total Distribution Per Share
 

2012 Ordinary Dividends
 

2012 Capital Gain Distribution
12/17/2012   12/31/2012   1/18/2013   $0.55000   $0.449587   $0.100413
9/12/2012   9/24/2012   10/22/2012   $0.36000   $0.294275   $0.065725
6/12/2012   6/22/2012   7/20/2012   $0.40000   $0.326972   $0.073028
3/14/2012   3/26/2012   4/20/2012   $0.40000   $0.326972   $0.073028
Totals   $1.71000   $1.397805   $0.312195
     

Two Harbors Investment Corp.

Two Harbors Investment Corp., a Maryland corporation, is a real estate investment trust that invests in residential mortgage-backed securities, residential mortgage loans and other financial assets. Two Harbors is headquartered in Minnetonka, Minnesota, and is externally managed and advised by PRCM Advisers LLC, a wholly-owned subsidiary of Pine River Capital Management L.P. Additional information is available at www.twoharborsinvestment.com.

Additional Information

Stockholders and warrant holders of Two Harbors, and other interested persons, may find additional information regarding the company at the Securities and Exchange Commission’s Internet site at www.sec.gov or by directing requests to: Two Harbors Investment Corp., 601 Carlson Parkway, Suite 1400, Minnetonka, MN 55305, telephone 612-629-2500.

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