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2026-01-26
2026-01-26
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): January 26, 2026
ONITY
GROUP INC.
(Exact
name of registrant as specified in its charter)
| Florida |
|
1-13219 |
|
65-0039856 |
| (State or other jurisdiction |
|
(Commission |
|
(IRS Employer |
| of incorporation) |
|
File Number) |
|
Identification No.) |
1661
Worthington Road, Suite 100
West
Palm Beach, Florida 33409
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (561) 682-8000
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
| ☐ |
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ☐ |
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
| ☐ |
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
| ☐ |
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| Common Stock, $0.01 Par
Value |
|
ONIT |
|
New York Stock Exchange
(NYSE) |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
2.02 Results of Operations and Financial Condition.
On
January 26, 2026 Onity
Group Inc. (“Onity” or the “Company”) announced the following preliminary estimated financial results
for the fourth quarter and the year ended December 31, 2025:
($
in millions, except per share metrics)
Estimated
financial results |
|
Estimate
(Unaudited)
4th
Quarter 2025 |
|
Estimate
(Unaudited)
Full-Year
2025 |
| Net
income attributable to common stockholders* |
|
$107
to $131 |
|
$166
to $190 |
| Diluted
earnings per share |
|
$12.2
to $15.0 |
|
$19.3
to $22.1 |
| Adjusted
pre-tax income (non-GAAP)* |
|
$7
to $11 |
|
$80
to $84 |
| Deferred
tax valuation allowance release |
|
$102
to $122 |
|
$102
to $122 |
| Adjusted
return on equity (non-GAAP, annualized) |
|
5%
to 8% |
|
16%
to 17% |
| Book
value per share |
|
$71
to $74 |
|
$71
to $74 |
| Debt
to equity ratio (MSR and corporate debt) |
|
2.7:1
to 2.6:1 |
|
2.7:1
to 2.6:1 |
| Debt
to equity ratio (MSR and corporate debt) excluding VA release |
|
3.2:1
to 3.1:1 |
|
3.2:1
to 3.1:1 |
| |
|
|
|
|
| Total
origination funded volume (UPB) |
|
~$14,000 |
|
~$43,000 |
| Consumer
Direct funded volume (UPB)** |
|
~$800 |
|
~$1,900 |
| Total
servicing average UPB |
|
~$323,000 |
|
~$312,000 |
| Shares
outstanding |
|
8,521,636 |
|
8,521,636 |
| Basic
weighted average shares outstanding |
|
~8,200,000 |
|
~8,000,000 |
| Total
available liquidity (ending) |
|
$205 |
|
$205 |
*Includes
an estimated ($13) to ($15) million accelerated loss within the Servicing segment from the government shutdown and changes to the FHA
modification program
**Reflects
refinance recapture rate that continues to exceed industry averages as measured by Intercontinental Exchange or ICE (average of first
three quarters of 2025)
Note
Regarding Non-GAAP Financial Measures
This
Item 2.02 contains references to adjusted pre-tax income and adjusted return on equity, which are financial measures that are not prepared
or calculated in accordance with generally accepted accounting principles (“GAAP”). The Company believes these non-GAAP financial
measures are useful supplements to discussions and analysis of Onity’s financial condition because management uses them to assess
the financial performance of its operations and allocate resources. However, these measures should not be analyzed in isolation or as
a substitute for the comparable GAAP financial measures of the Company, including pre-tax income (loss), cash flows from operations and
return on equity. Other companies may use non-GAAP financial measures with the same or similar titles that are calculated differently
and, as a result, comparability may be limited. Readers are cautioned not to place undue reliance on these non-GAAP measures.
The
following tables reconcile estimated net income to estimated adjusted pre-tax income and adjusted return on equity based on the preliminary
estimated financial results for the quarter and the year ended December 31, 2025:
| ($ in millions) | |
4th
Quarter 2025 Estimate | |
Full-Year 2025
Estimate |
| I |
Estimated Net Income Attributable to Common Stockholders | |
107 to 131 | |
166 to 190 |
| |
A. Income tax benefit | |
102 to 122 | |
110 to 130 |
| |
B. Preferred dividend | |
~ (1) | |
~(4) |
| II |
Estimated Pre-Tax Income [I – A – B] | |
6 to 10 | |
61 to 65 |
| |
Forward MSR Valuation Adjustments due to rates and assumption changes, net (a)(b) | |
8 to 9 | |
(2) to (1) |
| |
Reverse mortgage fair value changes due to rates and assumption changes (b)(c) | |
(0) to 1 | |
13 to 14 |
| III |
Total MSR Valuation Adjustments due to rates and assumption changes, net | |
8 to 10 | |
11 to 13 |
| |
Significant legal and regulatory settlement expenses | |
(6) to (5) | |
(25) to (24) |
| |
Severance and retention (d) | |
(1) to (0) | |
~(1) |
| |
LTIP stock price changes (e) | |
~ (3) | |
~(4) |
| |
Other expense notables (f) | |
~ 1 | |
~3 |
| |
C. Total expense notables | |
(9) to (8) | |
(28) to (27) |
| |
D. Other income statement notables (g) | |
~ (1) | |
(4) to (3) |
| IV |
Total Other Notables [C + D] | |
(11) to (9) | |
(32) to (30) |
| V |
Total Notables [III + IV] | |
(3) to 1 | |
(21) to (17) |
| VI |
Estimated Adjusted Pre-Tax Income [II – V] | |
7 to 11 | |
80 to 84 |
| a) | MSR
Valuation Adjustments that are due to changes in market interest rates, valuation inputs
or other assumptions, net of overall fair value gains (losses) on MSR hedges, including fair
value changes of pledged MSR liabilities associated with MSRs transferred to MSR Asset Vehicle
LLC (MAV), Rithm Capital Corp. (RITM) and others and excess servicing strip (ESS) financing
liabilities that are due to changes in market interest rates, valuation inputs or other assumptions,
a component of MSR valuation adjustment, net. |
| b) | The
changes in fair value due to market interest rates were measured by isolating the impact
of market interest rate changes on the valuation model output as provided by our third-party
valuation expert. |
| c) | Fair
value changes of reverse loans and HMBS-related borrowings due to market interest rates and
assumptions, a component of gain on reverse loans and HMBS-related borrowings, net. |
| d) | Severance
and retention expense due to organizational rightsizing or reorganization. |
| e) | Long-term
incentive program (LTIP) compensation expense changes attributable to stock price changes
during the period |
| f) | Includes
costs associated with strategic initiatives |
| g) | Contains
non-routine transactions including, but not limited to, early payoff expense and fair value
assumption changes on other investments recorded in other income/expense |
| ($
in millions) | |
4th
Quarter 2025 Estimate | |
Full-Year 2025
Estimate |
| I |
Estimated Net Income Attributable to Common Stockholders | |
107 to 131 | |
166 to 190 |
| |
A. Income tax benefit | |
102 to 122 | |
110 to 130 |
| |
B. Preferred dividend | |
~ (1) | |
~(4) |
| |
C. Total notables (IV in previous table) | |
(3) to 1 | |
(21) to (17) |
| II |
Estimated Adjusted Pre-Tax Income [I – A – B - C] | |
7 to 11 | |
80 to 84 |
| III |
Estimated Adjusted Pre-Tax Income (annualized) | |
27 to 43 | |
80 to 84 |
| IV |
Estimated Average Adjusted Equity | |
529 to 537 | |
488 to 490 |
| V |
Estimated Adjusted Return on Equity [III / IV] | |
5% to 8% | |
16% to 17% |
The
preliminary estimated financial results for the fourth quarter and the year ended December 31, 2025 set forth above are based on currently
available information and reflect the Company’s current estimates and assessments. The Company has not completed its fourth quarter
and full year financial closing procedures and controls and governance procedures, and our independent registered public accounting firm
has not completed any audit, review or set of procedures with respect to the above preliminary estimated financial results and has not
expressed any opinion or any other form of assurance with respect thereto. Actual reported results may differ materially from the preliminary
results presented above as a result of the completion of our financial closing procedures and controls. These preliminary estimated financial
results should not be viewed as a substitute for our full audited financial statements prepared in accordance with GAAP. Accordingly,
you should not place undue reliance on these preliminary estimated financial results.
The
information in this Item 2.02 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall such information
be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall
be expressly set forth by specific reference in such filing.
Item
8.01 Other Events.
On
January 26, 2026, Onity issued a press release announcing that its subsidiaries PHH Corporation and PHH Escrow Issuer LLC, as co-issuers,
commenced an offering of $150 million aggregate principal amount of 9.875% Senior Notes due 2029 (the “PHH Senior Notes”).
The PHH Senior Notes being offered are an additional issuance of the issuers’ 9.875% Senior Notes due 2029 and will form a single
series of debt securities with the $500 million aggregate principal amount of such PHH Senior Notes that were originally issued on November
6, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The
PHH Senior Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”),
or the securities laws of any other jurisdiction. The press release shall not constitute an offer to sell or the solicitation of an offer
to buy, nor shall there be any offer or sale of, any securities in any jurisdiction in which such offer, solicitation or sale would be
unlawful.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
Exhibit
Number |
|
Description |
| |
|
|
| 99.1 |
|
Press Release of Onity Group Inc. dated January 26, 2026 |
| |
|
|
| 104 |
|
Cover
Page Interactive Data File formatted in online XBRL (included as Exhibit 101) |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized.
| |
ONITY
GROUP INC. |
| |
(Registrant) |
| |
|
|
| Date:
January 26, 2026 |
By: |
/s/
Sean B. O’Neil |
| |
|
Sean
B. O’Neil |
| |
|
Chief
Financial Officer |
