Onity : 1st Quarter 2026 Earnings Presentation

Published: 2026-05-05 07:15:15 ET ONIT

Published on 05/05/2026 at 07:15 am EDT

Business Update

May 5, 2026

First quarter summary

NYSE: ONIT

Double-digit year-over-year growth in adjusted revenue,(a) origination volume, subservicing additions, and total servicing UPB

Originations profitability partially offset higher MSR runoff in Servicing

Mortgage interest rate volatility, higher than expected refinancing activity, and elevated FHA delinquencies impacted Q1 results; taking actions to address

Revised transaction with Finance of America Reverse and resubmitted to GNMA for approval; accomplishes strategic objectives

Full-year 2026 adjusted ROE expected to be 10%-15%(b) in light of ongoing

rate volatility due to geopolitical events

Double-digit year-over-year growth in adjusted revenue, origination volume, and total servicing UPB; Originations profitability partially offset higher MSR runoff

Strong Originations

Increasing Servicing Scale

Adjusted

Revenue(a)

$278M

+26% YoY

Originations

Volume

$14B

~2X YoY

Ending

Servicing UPB

$338B

+11% YoY

Net

Income(b)

$7M

$0.74 Diluted EPS

Consumer

Direct Volume

$1.2B

~4X YoY

Servicing

Additions

$28B

+69% YoY

Adjusted

PTI

(c)

($6M)

(4%) Adjusted ROE(d)

Originations

Adjusted PTI

(c)

$34M

~3.5X YoY

Servicing

Adjusted PTI

(c)

($16M)

($54M) YoY

YoY = Q1'26 vs Q1'25

Geopolitical events triggered increased volatility in key drivers of mortgage activity;

consumers increasingly sensitive to interest rates

ICE BofA

MOVE

Index(a)

115

30 Year Fixed Mortgage Rate(b)

6.6%

5.9%

MBA

Refinance

Index(c)

1,646

937

High

Low

Highs and lows for Q1'26

Refinancing Period

Jul'24 -

Dec'24

Oct'25 -

Mar'26

6.0%

5.9%

-150bps

-120bps

14.1%

19.4%

30yr Fixed Mortgage Rate

Low(d)

Change From Prior 6 Months'

High Mortgage Rate(d)

Refi Period Industry Average CPR*

*Conditional Prepayment Rate (CPR) for 2023 and later originations (e)

Taking decisive action to improve resiliency to changing market dynamics and consumer behaviors

Origination Pipeline

Hedging and Loan Sales

Origination pipeline hedging and loan sales execution is affected by market and spread volatility; historical impact has been bi-directional

$5M to

$7M

Originations Scalability

Revised modeling to address higher borrower sensitivity to rate drops

CD staffing up 34% since end of Q4'25(b); continued AI investments

$8M to

$14M

FHA Modification Changes

Improved borrower communication and frequency of early intervention Digital tools to assist borrowers with new modification requirements

$4M to

$6M

Servicing Runoff

Loan level runoff and refinance analysis to inform investing decisions

Recapture strategies tailored to borrower and loan characteristics

Balanced business is resilient in the long term; Q1 balance dynamics impacted by mortgage interest rate volatility, significant refinance surge, and FHA delinquencies

Adjusted pre-tax income(a)

207

Rates down Rates up

Reverse Owned Servicing*

Originations

Forward Owned Servicing

Subservicing (Fwd + Rvs)

149

168

($M)

MSR

Runoff(b)

Q1'25 LTM Q1'26 LTM

* Sale of Reverse Servicing portfolio to FOA pending regulatory approval

($144M) ($285M)

LTM = Last twelve months

Robust originations volume and strong recapture performance deliver growth above industry averages

Originations UPB(b)

+35%

Refinance payoff units:

Q1'26 vs Q1'25 Q1'26 vs Q4'25

+3pp

Refinance recapture rate:

Q1'26 vs Q4'25

Q1'26 LTM vs industry(c)

($B)

Q1'25 Q1'26

Recapture rate Q1'26 LTM when previous

loan was originated by our Consumer Direct(d)

Focused on accelerating subservicing growth

UPB in $B

> 50

Active pipeline(b) of new business remains strong

2 new clients signed in Q1'26

$11B in Q1'26

+94% YoY

5 more agreements under contract negotiation

($B)

FY'25 FY'26

FY'26 Actual includes all Q1'26 additions plus

bulk additions from early April

Projected 2H Projected 1H Actual

Technology adds to an exceptional client experience

Launched LASI 3.0 adding access to all borrower call

recordings

Improved client net promoter score to 68 in 2H'26(c)

Expanding business purpose residential and commercial offerings

Commercial subservicing ending UPB up 28% YoY

Stronger economics than residential subservicing

Strong owned MSR growth expanding recapture-ready portfolio

Total Servicing Ending UPB Total Servicing Ending UPB

176

150

154

162

305

338

305

(1)

(19)

53 338

($B)

Q1'25 Q1'26

($B)

Q1'25 Rithm Q1'26

Client de-boardings primarily driven by opportunistic MSR sales due to favorable market pricing

Transfer

Other Client Deboardings

Net Servicing Additions

Q1'26

Integrating AI into every stage of the borrower journey to maximize recapture

Accelerating refinance-ready borrower identification

Increasing lead conversion efficiency

Advancing platform scalability

Integrating unstructured data

Executing data-driven marketing campaigns

Increased leads on payoffs that result in a new loan +40% YoY(a)

Incorporating call sentiment analytics into communications

Optimizing workflows through mathematical modeling

Lead to rate lock up +60% YoY(b)

Broadening borrower engagement with AI-powered voice

Process augmentation with GenAI

Extracting and categorizing 350+

documents with 95% accuracy(c)

Selection

Assessment

Engagement

Conversion

Experience

Grow portfolio with high-fit borrowers

Deepen insights into evolving needs

Deliver tailored communications

Match leads with loan officers

Efficient with reduced cycle times

Next generation AI / ML continues to fuel our strategic vision

Machine Learning | Natural Language Processing | Robotics and Automation

Revised transaction with Finance of America Reverse and resubmitted to GNMA for approval; accomplishes strategic objectives

~57% UPB sold; $70-80M expected net proceeds(a)

Transferring certain origination personnel and

will offer FOA products to our portfolio

Will subservice assets sold to FOA

Remaining HECM MSR portfolio ~23% of current book value (~70% runoff by year 4)(b)

Will continue reverse mortgage asset management activities

Establishes a significant subservicing relationship with a reverse mortgage market leader

Reduces reverse HECM assets and HMBS

liabilities to simplify balance sheet

Strengthens financial metrics such as liquidity and capital ratio

Enables increased focus on markets, products and services that demonstrate more substantial growth and earnings potential

Transaction highlights and expected benefits pending regulatory approval

Strong year-over-year top-line revenue and book value growth

53%

51%

Operating efficiency(b)

improving QoQ and YoY

$57.66

217

211

187

220

280 278

55%

$73.69 $74.81

($M)

Q1'25 Q4'25 Q1'26

Market volatility and consumer behaviors drove higher origination pipeline hedge

costs and significant refinancing surge; FHA delinquencies elevated as expected

YoY Drivers

Actual

Illustrative

Favorable

Unfavorable

Servicing YoY(c)

▼($66M) MSR

Runoff

▲+$3M Float Earnings

▲+$9M Other Operations

For illustrative purposes only

PTI Opportunities(d)

8 to 14

Up to 21

5 to 7

4 to 6

(54)

Q1'25

Adj PTI

Originations

Servicing

(2)

Corporate

(6)

Q1'26

Adj PTI

FHA Delq (Servicing)

Originations Pipeline*

Originations Scalability

Q1'26

Adj PTI

($M)

Q1'26 Illustrative Adj ROE ~13%(e)

* Originations pipeline hedging and loan sales performance

High yield proceeds invested in higher value opportunities to accelerate growth

De-risked balance sheet by reducing MSR debt

Acquiring and retaining more MSR

Repurchased 154k shares for $6.1M in Q1'26 under $10M authorization (88k shares / remaining $3.9M completed by 5/1)

Evaluating M&A opportunities to enhance capabilities

Additional capital expected from sale of reverse assets pending regulatory approval

Adjusted PTI(b)

over 2 years

$74M

$30M

$15M

$10B

$20B

$50B

($45M)

($90M)

($225M)

Use of Cash

Strong Originations profitability across Consumer Direct and B2B channels

(1)

Funded volume in line with Q4 record(b) driven by recapture, lower rates, and increase in higher-yielding GNMA loans

($M)

Q1'25 Q4'25 Q1'26

Heightened customer focus and marketing to

support recapture initiatives, driving revenue growth

Closed-end seconds and NonQM products up 54% QoQ, contributing to volume growth with further product expansion underway

Business-to-Business (B2B) includes Correspondent and

Co-Issue channels

Strong Consumer Direct and B2B volume driving Originations profitability; lower margins QoQ due to rate volatility

$6.6B

$13.4B $13.0B

Consumer Direct originations volume up ~4x YoY

$1.2B

Consumer Direct per loan(b) metrics favorable

Revenue per loan

up 4% YoY

$0.8B

319

$0.3B

256

243

Cost per loan down 25% YoY

Q1'25 Q4'25 Q1'26

Avg loan balance up 37% YoY

Business-to-Business (B2B) includes Correspondent and Co-Issue channels

Investing in higher yielding assets to drive future growth amid a challenging environment

Forward owned average servicing UPB up 18% YoY

187

217

211

135

151

160

38 ▼($17M) MSR Runoff

▼($8M) Float Earnings

▲+$3M Other Operations

(16)

($M)

Q1'25

Q4'25

Q1'26

($B)

Q1'25

Q4'25

Q1'26

Q1'25

Q4'25

Q1'26

$24M

$36M

$28M

$305B

$323B

$334B

($33M)

($82M)

($99M)

($M)

Float Earnings(b)

Total Servicing Avg UPB

Servicing MSR Runoff(d) >3x YoY

Q1'26 reflects add'l interest expense from Jan'26 high-yield issuance

Servicing advances 28% lower over 2 years while UPB has grown 32%(a)

End of Period

603

468

386

311

120

128

135

514

431

Increased modification process success rates through digital engagement

($M)

Q1'24 Q1'25 Q1'26

Compressed timeline for escrow collections without increasing delinquency

Servicing Balance

139

125

Forward Owned Ending UPB(b)

165

Reduced default timelines with creative solutions to promote mutually beneficial outcomes

($B)

30+ Delinquency Owned MSRs(c)

Q1'24 Q1'25 Q1'26

5.9% 4.7% 4.2%

Deployed technology / AI-powered solutions to enhance call center collections

MSR hedge strategy continues to cost-effectively manage interest rate risk

60 • Hedge strategy has offset interest rate

Effective hedging strategy

40 changes effectively since Q1'24

($M)

-(20)

(40)

Our performance has been favorable vs

peers with a similar strategy

We adjust hedge targets frequently to manage risk and optimize performance as we assess market conditions

We are more agile since insourcing our MSR valuation process in Q1'26; using industry-standard MSR valuation and prepayment models supported by external valuation experts as guardrails

(60)

Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

95-105%

90-110%

80-100%

95-100%

95-105%

Hedge Coverage Ratio Range

Disclaimer

Onity Group Inc. published this content on May 05, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 05, 2026 at 11:14 UTC.