Onity Group Inc. · NYSE:ONIT
Onity — Q1 2025 Earnings Presentation
36 slides from Onity's earnings presentation, Apr 30, 2025
Slide 1: Business Update First Quarter 2025
Business Update First Quarter 2025 April 30, 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 on our business and operations; the impact of our rebranding initiative; This presentation contains references to adjusted pre-tax income (loss) meaning of Section 27A o
Slide 3: Delivered powerful first quarter results, exceeding guidance
Delivered powerful first quarter results, exceeding guidance Accelerating growth in Originations and Servicing Book value growth and high adjusted ROE(a) demonstrate our sound strategy and strong execution Balanced business positions us for success in high or low-rate environment NYSE: ONIT © 2025 O
Slide 4: Financial results exceed full-year 2025 guidance
Financial results exceed full-year 2025 guidance Strong Operating Q4’24Performance Exceeding Guidance and Accelerating Growth First Quarter 2025 vs Q1’24 First Quarter 2025 FY’24 vs Q1’24 exceeded Adjusted 10th quarter of Adjusted PTI(a) $25M positive PTI ROE(a) 22% 16-18% guidance(b) GAAP Net Servi
Slide 5: Demonstrated resiliency to navigate increasing interest rate and economic uncertainty
We believe our demonstrated resiliency will enable us to successfully navigate increasing interest rate and economic uncertainty Expectations Our Positioning • Continued interest rate and GSE price volatility will • Balanced business designed to perform well during drive higher hedge costs high and
Slide 6: Balanced business designed to perform well in high and low interest rates
Balanced business designed to perform well in high and low interest rates Originations and Servicing Impact of market scenarios complement each other on profitability Adjusted Pre-tax Income(a) 48 Rates Down Rates Up 29 10 Originations Originations Forward Owned Servicing 36 38 Servicing Reverse Own
Slide 7: Top-tier servicing performance delivers value for customers and investors
Top-tier servicing performance delivers value for customers and investors Top-Tier Investor Performance(a) Customer Experience(c) 4.6 4.1 Positive Experience Positive Experience Call Center Loan Boarding Commitment to Competitive Cost Technology Structure(b) Performing Loans Non-Performing Loans 61
Slide 8: Portfolio mix and special servicing skills minimize advancing
Portfolio mix and special servicing skills minimize advancing and create growth opportunities Subservicing and GSE portfolio Proven ability to reduce loan Declining advances on legacy assets mix(a) reduces exposure to advances delinquency(b) outpacing change in loan count Current and 60+ Days Loan N
Slide 9: Accelerating growth through increased MSR originations and product expansion
Accelerating growth through increased MSR originations and product expansion MSR additions up over 2x YoY Expanding high-margin products 12 291 305 ✓ Enhanced home equity loans launched • Redesigned product in response to customer feedback 5 159 158 • 2nd lien locks have increased 3.6x Q1’25 vs Q1’2
Slide 10: High-performing recapture platform continues to close the gap to best practice
High-performing recapture platform continues to close the gap to best practice Consumer Direct funded volume up 2.7x YoY Refinance Recapture Rate 1.6x industry average(a) 298 60% 112 ($M) 40% Q1'24 Q1'25 Consumer Direct daily lock 20% volume up 2.5x YoY 0% ICE ICE ICE Large Large ONIT Large Banks Av
Slide 11: Strong start to the year in our key metrics
Strong start to the year in our key metrics Revenue up 5% YoY, maintaining Adjusted ROE(b) continues Book value per share up operating efficiency(a) momentum, up 8pp YoY over $2 YoY 220 22% 211 $58 $56 14% 55% 55% ($M) Q1'24 Q1'25 Q1'24 Q1'25 Q1'24 Q1'25 Adjusted Revenue Operating Efficiency $15M $2
Slide 12: Servicing contributes robust returns with Adjusted PTI up
Servicing contributes robust returns with Adjusted PTI up 25% quarter-over-quarter Servicing Adjusted Pre-Tax Income(a) Portfolio growth leverages cost structure to enhance profitability(b) 39 38 2 9 30 ← Incremental PTI → Reverse Forward $77M 36 30 31 $52M $30M (0) ($M) Q1'24 Q4'24 Q1'25 $100B $200
Slide 13: Originations delivers strong performance despite seasonal and market headwinds
Originations delivers strong performance despite seasonal and market headwinds Originations Adjusted Pre-Tax Income(a) Funded Volume & Revenue Margin(c) 10 10 Consumer Direct $394M 1 $298M Consumer Direct 375 2 B2B 344 319 $112M Reverse 8 6 2 Business-to-Business $9.0B (B2B) $6.6B 1 1 1 ($M) $4.3B Q
Slide 14: We confirm our guidance for 2025 and add positive outlook for deferred tax asset
We confirm our guidance for 2025 and add positive outlook for deferred tax asset = confirmed guidance Financial Objectives Full-Year 2025 Updated Guidance(b) = updated or new guidance ❖ Sustain Adjusted PTI(a) Adjusted ROE(c) of 16-18% performance Increase total servicing UPB 10+%(d) ❖ Maintain earn
Slide 15: Sound strategy and strong execution are delivering results
Sound strategy and strong execution are delivering results Strategy Balance and Diversification | Prudent Capital-Light Growth | Industry-Leading Cost Structure(a) Top-Tier Operating Performance and Capabilities(b) | Dynamic Asset Management Operating Priorities Differentiate Operating Elevate the C
Slide 16: Customer first. Better together. We say. We do.
Customer first. Better together. We say. We do.
Slide 17: Appendix
Appendix © 2025 Onity Group Inc. All rights reserved. Proprietary and Confidential. 17
Slide 18: Delivered tenth straight quarter of positive Adjusted Pre-tax Income
Delivered tenth straight quarter of positive Adjusted Pre-tax Income (Dollars in millions, except per share metrics) Q1’24 Q4’24 Q1’25 Adjusted pre-tax income(a) 15 11 25 MSR valuation adjustments due to rates 19 (1) (2) and assumption changes, net(b) A Corporate debt restructuring cost notables - (
Slide 19: Diversified servicing portfolio mitigates risk
Diversified servicing portfolio mitigates risk MSR to be hedged % of Servicing UPB GAAP MSR Fair Value end of Q1’25 end of period GSE MSR ~35% 2,547 579 Fannie Subservicing Owned Servicing(a) 256 ~51% ~49% Other Subservicing Freddie 1,712 ($M) MAV Q1'25 (b) Rithm, MAV and other pledged MSR Reverse $
Slide 20: MSR Valuation
MSR(a) Valuation as of 3/31/2024 as of 12/31/2024 as of 3/31/2025 (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 91,288 19,797 13,370 124,455 97,827 19,611 12,353 129,791 105,665 20,113 12,028 137,805 Loa
Slide 21: Managing owned MSRs to a targeted investment range
Managing owned MSRs to a targeted investment range (Dollars in billions) Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Forward Owned 127 121 122 124 124 123 124 135 Reverse Owned 8 8 8 8 8 9 11 12 MSR Investment Range Total Owned MSR Servicing(a) Avg UPB 135 129 130 132 132 132 135 147 • $115-135B
Slide 22: Scale and diligent cost management maintaining operating efficiency
Scale and diligent cost management maintaining operating efficiency Operating Efficiency by Segment Originations Servicing(a) 50 94% 200 40 150 50% 68% 30 56% 56% 100 35% 37% 52% 52% 34% 34% 20 32% 50 10 0 0 ($M) Q2'22 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 ($M) Q2'22 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Operating
Slide 23: Value proposition for integrated Reverse originator, servicer and subservicer platform
Value proposition for integrated Reverse originator, servicer and subservicer platform Strong contributor to profitability ✓ Delivers robust and consistent profitability Adjusted Pre-Tax Income(a) ($M) FY’22 FY’23 FY’24 ✓ Creates upside potential on originations market if rates decline Servicing 11
Slide 24: Dilution controlled by Onity due to updated agreements
Dilution controlled by Onity due to updated agreements In Q1’25, cash used to settle first exercise of warrants to reduce dilution As of 3/31/25 Remaining Oaktree Warrant Settlement Method at Onity’s discretion ONIT Share Price $32.32 Gross Shares Settlement Net Settlement in Shares Net Settlement i
Slide 25: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets Assets March 31, December 31, March 31, 2025 (Dollars in millions) 2024 2024 unaudited Cash and cash equivalents 185 185 178 Restricted cash 66 81 59 Mortgage servicing rights (MSRs), at fair value 2,375 2,466 2,547 Advances, net 603 577 514 Loans held for sale,
Slide 26: Condensed Balance Sheet Breakdown
Condensed Balance Sheet Breakdown Assets March 31, 2025 Rithm, MAV & other Reverse GNMA All (Dollars in millions) unaudited pledged MSR mortgages EBO others Cash and cash equivalents 178 178 Restricted cash 59 59 Mortgage servicing rights (MSRs), at fair value 2,547 579 1,968 Advances, net 514 514 L
Slide 27: Condensed Consolidated Statement of Operations
Condensed Consolidated Statement of Operations Three months March 31, December 31, 2024 March 31, 2025 (Dollars in millions) ended 2024 unaudited unaudited Revenue Servicing and subservicing fees 205 206 203 Gain on reverse loans held for investment and HMBS-related borrowings, net 15 1 24 Gain on l
Slide 28: 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 29: Notables and Adjusted Pre-tax Income (Loss) Calculation
Notables and Adjusted Pre-tax Income (Loss) Calculation (Dollars in millions) Q1’21 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 FY’21 FY’22 FY’23 FY’24 I Reported net income (loss) 9 30 11 21 (28) 22 18 26 (64) 34 A Income tax benefit (expense) (3) (2) (3) (6) 6 13 22 1 (6) (5) II Reported pre-tax income (loss) [
Slide 30: ROE Calculations
ROE Calculations (Dollars in millions) Q1’21 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 FY’21 FY’22 FY’23 FY’24 I Reported net income (loss) 9 30 11 21 (28) 22 18 26 (64) 34 A Preferred stock dividend - - - - (1) (1) - - - (1) II Reported net income (loss) attributable to 9 30 11 21 (29) 21 18 26 (64) 33 common
Slide 31: Q1'25 P&L GAAP to Adjusted Bridge
Q1’25 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 221 (29) 5 (10) 1 203 MSR Valuation Adjustments, net (42) (3) 12 (33) Operating Expe
Slide 32: End Notes
End Notes © 2025 Onity Group Inc. All rights reserved. Proprietary and Confidential. 32
Slide 33: End Notes
End Notes SLIDE 3 SLIDE 9 SLIDE 12 a) Annualized adjusted PTI return on common equity; Q1’25 adjusted ROE a) Year-over-year comparison of Q1’25 to Q1’24; industry growth is avg of a) See slides 28-31 for discussion of non-GAAP measures; effective in exceeds 2025 guidance of 16-18% provided in our Q4
Slide 34: End Notes
End Notes SLIDE 18 SLIDE 20 cont. SLIDE 29 cont. a) See slides 28-31 for discussion of non-GAAP measures; effective in f) Performing represents Current and D30; NPL represents D60+ b) The changes in fair value due to market interest rates were measured Q4’24, change in fair value due to interest rat
Slide 35: Abbreviations & Definitions
Abbreviations & Definitions • Adj: Adjusted (GAAP pre-tax income, net of notables or revenue/opex, • GSE: Government Sponsored Enterprise (FNMA, FHLMC) • PLS: Private-Label Securities net of notables and reclassifications) • #H: Half of the fiscal year • pp(s): Percentage Points • Agency: FHLMC, FNM
Slide 36: Customer first. Better together. We say. We do.
Customer first. Better together. We say. We do.