Slide 1: Business Update Full-Year and Fourth Quarter 2024
Business Update Full-Year and Fourth Quarter 2024 February 13, 2025 © 2025 Onity Group Inc. All rights reserved. Proprietary and Confidential.
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING STATEMENTS NON-GAAP FINANCIAL MEASURES This presentation contains forward-looking statements within the under any repurchase programs, the timing of such repurchases, and This presentation contains references to adjusted pre-tax income (loss) meaning of Section 27A of the
Slide 3: Achieved significant milestones in 2024
Achieved significant milestones in 2024 Exceeded adjusted ROE guidance(a) with highest net income since 2013 Reduced debt and extended maturities to mitigate risk and improve flexibility Expanded digital capabilities to enhance performance and productivity Added talent to drive recapture, growth, an
Slide 4: Delivered powerful financial results for full-year 2024 aligned with Q3'24 guidance
Delivered powerful financial results for full-year 2024 aligned with Q3’24 guidance One-time restructuring costs impacted … while still delivering robust, Q4’24 profitability per Q3’24 guidance… profitable growth for the full year Fourth Quarter 2024 FY’24 Full-Year 2024 Adjusted PTI(a) $11M 9th qua
Slide 5: Balanced and diversified business performing through the interest rate cycle
Balanced and diversified business performing through the interest rate cycle Total business delivering increased profitability Adjusted Pre-tax Income(a) Aligns with estimate from Q3’24 earnings presentation 200 31 145 Servicing driving adjusted PTI and generating cash flows above model expectations
Slide 6: Growing servicing portfolio consistent with capital-light strategy
Growing servicing portfolio consistent with capital-light strategy Servicing additions up 70% year-over-year Growing total servicing portfolio Servicing Additions, net Servicing Avg 300 of internal sales(a) 86 UPB 282 199 167 47 152 50 120 5 24 43 38 3 125 109 75 7 ($B) ($B) FY'23 FY'24 FY'20 FY'22
Slide 7: Improved recapture performance more than doubled Consumer Direct volume
Improved recapture performance more than doubled Consumer Direct volume Consumer Direct Volume up 2.5x YoY How we are driving results ✓ Investing in technology 905 • Enabling efficiency, timeliness and cost savings 357 • Enhancing the digital experience for borrowers ($M) FY'23 FY'24 ✓ Leveraging po
Slide 8: Delivering top-tier operating performance while improving customer experience
Delivering top-tier operating performance while improving customer experience Recognized Top-Tier Performance Competitive Cost Structure FY’23 fully-loaded cost per loan(a) Awarded for 3 Onity Servicing vs Large vs Large Consecutive Years Non-Banks Banks Cost Per Loan Awarded for 2020-2022 and in 20
Slide 9: Investing in multiple AI applications to enhance capabilities and performance
Investing in multiple AI applications to enhance capabilities and performance Artificial Intelligence Natural Language Machine Learning Robotics Vision (Digital Workers) (Optical Character Recognition) Processing (Predictive Analytics, Generative (Chatbots, Voice bots) AI) ✓ Digital bots ✓ OCR/IDP d
Slide 10: 2025+ operating priorities aligned with our strategy to create value
2025+ operating priorities aligned with our strategy to create value Strategy Balance and Diversification | Prudent Capital-Light Growth | Industry-Leading Cost Structure(a) Top-Tier Operating Performance and Capabilities(b) | Dynamic Asset Management Operating Priorities Accelerate Organic Differen
Slide 11: Reached 11-year high for full-year GAAP Net Income
Reached 11-year high for full-year GAAP Net Income with Adjusted Pre-tax Income at highest point since 2018 PHH acquisition Q4’24 Highlights Trend vs Q4’23 FY’24 Highlights Trend vs FY’23 GAAP Net GAAP GAAP Net GAAP ($29M) Loss* (25%) ROE(a) $33M Income* 8% ROE(a) MSR Valuation Diluted Diluted Book
Slide 12: Successfully executed strategic transactions to significantly strengthen balance sheet
Successfully executed strategic transactions to significantly strengthen balance sheet while maintaining liquidity • Issued new $500M 5-year high-yield debt Debt to Equity 24% Ratio(a) 2.96:1 vs YE’23 • Extinguished intermediate-term more expensive corporate debt at parent company YE’24 • Reduced an
Slide 13: Servicing again contributes robust returns with Adjusted PTI up 15%
Servicing again contributes robust returns with Adjusted PTI up 15% year-over-year Servicing Adjusted Pre-Tax Income(a)(b) Drivers 169 147 FY’24 Forward Servicing 22 vs FY’23 • +$31M Stronger revenue, float income, and gain-on-sale 41 • +$15M Better operating efficiency and improved financing • ($6M
Slide 14: Strong rebound in 2024 for Originations, Adjusted PTI up $31M
Strong rebound in 2024 for Originations, Adjusted PTI up $31M year-over-year Originations Adjusted Pre-Tax Income(a) 31 Drivers 2 8 Full-Year 2024 vs Full-Year 2023 Funded Volume Revenue Margin(b) 12 24 (0) 153% Consumer Direct 8bps 10 9 6 ($M) (6) (15) (3) 32% B2B 2bps FY'22 FY'23 FY'24 11% Reverse
Slide 15: Origination volume up 12% quarter-over-quarter
Origination volume up 12% quarter-over-quarter, overcoming Q4 seasonality and exceeding industry growth(a) B2B Volume Consumer Direct Volume Reverse Volume up 11% up 64% up 9% 9.0B 394M 214M 8.1B 197M 5.3B 176M 241M 339 344 344 22 317 314 21 21 93M 286 Q4'23 Q3'24 Q4'24 Q4'23 Q3'24 Q4'24 Q4'23 Q3'24
Slide 16: Looking ahead to 2025, successful execution of strategy to generate increasing returns
Looking ahead to 2025, we expect successful execution of our strategy to generate increasing returns Strategy Financial Objectives Full-Year 2025 Guidance(d) ❖ Balance and diversification ❖ Sustain Adjusted PTI(c) ➢ Adjusted ROE(e) of 16-18% performance ❖ Prudent capital-light growth ➢ Increase tota
Slide 17: Well-positioned to grow earnings in 2025 and beyond
Well-positioned to grow earnings in 2025 and beyond Balanced and diversified model performs through interest rate cycles Capital-light strategy fuels growth Customer-first focus supported by innovative technology solutions Cost-effective, technology enabled, global servicing platform Experienced lea
Slide 18: Customer first. Better together. We say. We do.
Customer first. Better together. We say. We do.
Slide 19: Appendix
Appendix © 2025 Onity Group Inc. All rights reserved. Proprietary and Confidential. 19
Slide 20: Delivered ninth straight quarter of positive Adjusted Pre-tax Income
Delivered ninth straight quarter of positive Adjusted Pre-tax Income (Dollars in millions, except per share metrics) Q4’23 Q3’24 Q4’24 FY’23 FY’24 Adjusted pre-tax income(a) 11 31 11 49 90 MSR valuation adjustments due to rates (51) 8 (1) (124) 10 and assumption changes, net(b) A Corporate debt rest
Slide 21: Diversified servicing portfolio mitigates risk
Diversified servicing portfolio mitigates risk MSR to be hedged % of Servicing UPB GAAP MSR Fair Value end of Q4’24 end of period GSE MSR ~32% 2,466 Subservicing Owned MSR(a) Fannie 584 ~53% ~47% 263 Other Subservicing Freddie 1,619 ($M) Q4'24 MAV (b) PLS MSR Rithm, MAV and other pledged MSR Reverse
Slide 22: MSR Valuation
MSR(a) Valuation as of 12/31/2023 as of 9/30/2024 as of 12/31/2024 (Dollars in millions) Total Total Total GSE Gov’t(b) Non-Agency GSE Gov’t(b) Non-Agency GSE Gov’t(b) Non-Agency Retained Retained Retained UPB 90,263 18,778 13,703 122,743 87,587 18,673 12,684 118,944 97,827 19,611 12,353 129,791 Loa
Slide 23: Managing owned MSRs to a targeted investment range
Managing owned MSRs to a targeted investment range (Dollars in billions) Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Forward Owned 128 127 121 122 124 124 123 124 Reverse Owned 8 8 8 8 8 8 9 11 MSR Investment Range Total Owned MSR Servicing(a) Avg UPB 135 135 129 130 132 132 132 135 • $115-135M
Slide 24: Scale and diligent cost management improving operating efficiency
Scale and diligent cost management improving operating efficiency Originations Servicing(a) 50 94% 250 40 200 49% 66% 68% 30 150 56% 52% 52% 20 100 30% 31% 28% 28% 26% 10 50 0 0 ($M) Q2'22 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 ($M) Q2'22 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Efficiency Ratio (b) = Adjusted Operatin
Slide 25: Value proposition for integrated Reverse originator, servicer and subservicer platform
Value proposition for integrated Reverse originator, servicer and subservicer platform Strong contributor to profitability ✓ Delivers robust and consistent profitability Adjusted Pre-Tax Income(a) ($M) FY’22 FY’23 FY’24 ✓ Creates upside potential on originations market if rates decline Servicing 11
Slide 26: Condensed Consolidated Balance Sheets (unaudited)
Condensed Consolidated Balance Sheets (unaudited) Assets December 31, September 30, December 31, (Dollars in millions) 2023 2024 2024 Cash and cash equivalents 202 202 185 Restricted cash 54 78 81 Mortgage servicing rights (MSRs), at fair value 2,272 2,224 2,466 Advances, net 679 523 577 Loans held
Slide 27: Condensed Balance Sheet Breakdown
Condensed Balance Sheet Breakdown Assets December 31, Rithm, MAV & other Reverse GNMA All (Dollars in millions) 2024 pledged MSR mortgages EBO others Cash and cash equivalents 185 185 Restricted cash 81 81 Mortgage servicing rights (MSRs), at fair value 2,466 584 1,883 Advances, net 577 577 Loans he
Slide 28: Condensed Consolidated Statement of Operations (unaudited)
Condensed Consolidated Statement of Operations (unaudited) Year Ending Year Ending Year Ending (Dollars in millions) December 31, 2022 December 31, 2023 December 31, 2024 Revenue Servicing and subservicing fees 863 947 832 Gain on reverse loans held for investment and HMBS-related borrowings, net 36
Slide 29: Note Regarding Non-GAAP Financial Measures
Note Regarding Non-GAAP Financial Measures In the following slides, we present supplemental information (including reconciliations) relating to certain illustrative adjustments to GAAP pre-tax income (loss) and GAAP pre-tax return on equity. We believe these non-GAAP financial measures provide a use
Slide 30: Notables and Adjusted Pre-tax Income (Loss) Calculation
Notables and Adjusted Pre-tax Income (Loss) Calculation (Dollars in millions) Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 FY’21 FY’22 FY’23 FY’24 I Reported net income (loss) (47) 30 11 21 (28) 18 26 (64) 34 A Income tax benefit (expense) (2) (2) (3) (6) 6 22 1 (6) (5) II Reported pre-tax income (loss) [ I – A ]
Slide 31: ROE Calculations
ROE Calculations (Dollars in millions) Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 FY’21 FY’22 FY’23 FY’24 I Reported net income (loss) (47) 30 11 21 (28) 18 26 (64) 34 A Preferred stock dividend - - - - (1) - - - (1) II Reported net income (loss) attributable to (47) 30 11 21 (29) 18 26 (64) 33 common stockholde
Slide 32: Q4'24 P&L GAAP to Adjusted Bridge
Q4’24 P&L GAAP to Adjusted Bridge Rithm, MAV & MSR FV Servicing Segment Reverse Other Inter-Segment GAAP Other Pledged Reclass Adjustments Notables Reclass Adjusted (Dollars in millions) MSR Reclass Notables Revenue 194 (30) 8 28 (13) 188 MSR Valuation Adjustments, net (26) 0 (4) (12) (42) Operating
Slide 33: End Notes
End Notes © 2025 Onity Group Inc. All rights reserved. Proprietary and Confidential. 33
Slide 34: End Notes
End Notes SLIDE 3 SLIDE 7 SLIDE 11 cont. a) Annualized adjusted pre-tax income return on common equity; guidance a) Onity FY’24 refinance recapture rate by balance divided by industry rate c) See slides 29-32 for discussion of non-GAAP measures including of 12%+ adjusted ROE for 2024 from slide 11 i
Slide 35: End Notes
End Notes SLIDE 13 cont. SLIDE 20 SLIDE 22 cont. b) Beginning in Q4’23, Servicing segment now includes Insurance a) See slides 29-32 for discussion of non-GAAP measures including e) Annual $ per loan; ancillary includes REO fee income on Non-Agency Services, previously in Corporate segment; presenta
Slide 36: End Notes
End Notes SLIDE 30 SLIDE 30 cont. a) MSR valuation adjustments that are due to changes in market interest i) Certain previously presented notable categories with nil numbers for rates, valuation inputs or other assumptions, net of overall fair value each period shown have been omitted gains / (losse
Slide 37: Abbreviations
Abbreviations • Adj: Adjusted (GAAP pre-tax income, net of notables or • Gov’t: Government loan types • Perf: Performing Loan revenue/opex, net of notables and reclassifications) • GSE: Government Sponsored Enterprise (FNMA, FHLMC) • PLS: Private Label Securities • Agency: FHLMC, FNMA, and/or GNMA •
Slide 38: Customer first. Better together. We say. We do.
Customer first. Better together. We say. We do.