– Net income from continuing operations of $171 million or $0.72 basic earnings per share for the quarter –
– 20% improvement on an adjusted net basis(1) over the prior quarter –
– Finished the year with 37% share of HECM Reverse market(2) –
PLANO, Texas–(BUSINESS WIRE)–Finance of America Companies Inc. (“Finance of America” or the “Company”) (NYSE: FOA), a modern retirement solutions platform, reported financial results for the quarter and year ended December 31, 2023.
Fourth Quarter and Full Year 2023 Highlights
- Net income from continuing operations for the fourth quarter of $171 million or $0.72 basic earnings per share primarily due to non-cash, positive fair value changes on long-term assets and liabilities combined with improved results from operations.
- For the quarter, the Company recognized an adjusted net loss(1) of $20 million or $0.09 per share, an improvement of 20% over the prior quarter.
- 67% improvement in adjusted net loss in Retirement Solutions in the fourth quarter driven by higher revenue margin and reduced expenses compared to the prior quarter.
- For the full year, our subsidiary, Finance of America Reverse maintained 37% share of the HECM Reverse market.(2)
(1) See the sections titled “Reconciliation to GAAP” and “Non-GAAP Financial Measures” for reconciliations to the most directly comparable GAAP measures and other important disclosures.
(2) Source: https://www.newviewadvisors.com/commentary/2023-full-year-hmbs-issuer-league-tables/; measured by HMBS issuance.
Graham A. Fleming, Chief Executive Officer commented, “2023 was a transformational period for Finance of America and I want to thank our entire team for their hard work and determination over the course of the year. We completed a series of strategic transactions that helped establish the Company as the preeminent platform for homeowners 55 and older seeking to benefit from their home equity. With most of these efforts now behind us, we are excited to move forward. As a business, we are firmly positioned as the leading provider of modern retirement solutions with the potential to reach tens of millions of customers nationwide.”
Fourth Quarter Financial Summary of Continuing Operations
|
($ amounts in millions, except per share data) |
|
|
|
Variance (%) |
|
|
|
Variance (%) |
|
|
|
|
|
Variance (%) |
|||||||||||||||
|
|
|
Q4’23 |
|
Q3’23 |
|
Q4’23 vs Q3’23 |
|
Q4’22 |
|
Q4’23 vs Q4’22 |
|
|
2023 |
|
|
|
2022 |
|
|
2023 vs 2022 |
|||||||||
|
Funded volume |
|
$ |
446 |
|
|
$ |
512 |
|
|
(13 |
)% |
|
$ |
701 |
|
|
(36 |
)% |
|
$ |
1,762 |
|
|
$ |
5,076 |
|
|
(65 |
)% |
|
Total revenues |
|
|
276 |
|
|
|
(70 |
) |
|
494 |
% |
|
|
65 |
|
|
325 |
% |
|
|
234 |
|
|
|
53 |
|
|
342 |
% |
|
Total expenses and other, net |
|
|
95 |
|
|
|
102 |
|
|
(7 |
)% |
|
|
107 |
|
|
(11 |
)% |
|
|
392 |
|
|
|
386 |
|
|
2 |
% |
|
Pre-tax income (loss) from continuing operations |
|
|
172 |
|
|
|
(173 |
) |
|
199 |
% |
|
|
(48 |
) |
|
458 |
% |
|
|
(167 |
) |
|
|
(343 |
) |
|
51 |
% |
|
Net income (loss) from continuing operations |
|
|
171 |
|
|
|
(172 |
) |
|
199 |
% |
|
|
(49 |
) |
|
449 |
% |
|
|
(166 |
) |
|
|
(326 |
) |
|
49 |
% |
|
Adjusted net income (loss)(1) |
|
|
(20 |
) |
|
|
(25 |
) |
|
20 |
% |
|
|
(5 |
) |
|
(300 |
)% |
|
|
(87 |
) |
|
|
54 |
|
|
(261 |
)% |
|
Adjusted EBITDA(1) |
|
|
(18 |
) |
|
|
(25 |
) |
|
28 |
% |
|
|
1 |
|
|
(1,900 |
)% |
|
|
(82 |
) |
|
|
107 |
|
|
(177 |
)% |
|
Basic net earnings (loss) per share |
|
$ |
0.72 |
|
|
$ |
(0.74 |
) |
|
197 |
% |
|
$ |
(0.22 |
) |
|
427 |
% |
|
$ |
(0.75 |
) |
|
$ |
(1.03 |
) |
|
27 |
% |
|
Diluted net income (loss) per share(2) |
|
$ |
0.55 |
|
|
$ |
(0.74 |
) |
|
174 |
% |
|
$ |
(0.22 |
) |
|
350 |
% |
|
$ |
(0.75 |
) |
|
$ |
(1.58 |
) |
|
53 |
% |
|
Adjusted earnings (loss) per share(1) |
|
$ |
(0.09 |
) |
|
$ |
(0.11 |
) |
|
18 |
% |
|
$ |
(0.03 |
) |
|
(200 |
)% |
|
$ |
(0.40 |
) |
|
$ |
0.29 |
|
|
(238 |
)% |
(1) See the sections titled “Reconciliation to GAAP” and “Non-GAAP Financial Measures” for reconciliations to the most directly comparable GAAP measures and other important disclosures.
(2) Calculated on an if-converted basis except when anti-dilutive.
Balance Sheet Highlights
|
($ amounts in millions) |
|
December 31, |
|
September 30, |
|
Variance (%) |
|||
|
|
|
2023 |
|
2023 |
|
Q4 2023 vs. Q3 2023 |
|||
|
Cash and cash equivalents |
|
$ |
46 |
|
$ |
66 |
|
(30 |
)% |
|
Securitized loans held for investment (HMBS & nonrecourse) |
|
|
25,821 |
|
|
25,098 |
|
3 |
% |
|
Total assets |
|
|
27,108 |
|
|
26,397 |
|
3 |
% |
|
Total liabilities |
|
|
26,835 |
|
|
26,294 |
|
2 |
% |
|
Total equity |
|
|
272 |
|
|
104 |
|
162 |
% |
- Ended the fourth quarter with cash and cash equivalents from continuing operations of $46 million. The decrease in cash was attributable to investments in our balance sheet related to non-agency production.
- Securitized loans held for investment (HMBS & nonrecourse) increased 3% as new production combined with the positive change in fair value related to market rates and spreads.
- Total assets increased 3% in line with the change in securitized loans held for investment.
- Total liabilities increased $541 million on a sequential-quarter basis primarily due to increases in HMBS obligations and nonrecourse debt, aligned to the change in securitized loans held for investment.
Segment Results
Retirement Solutions
The Retirement Solutions segment primarily generates revenue and earnings in the form of net origination gains and origination fees earned on the origination of reverse mortgage loans.
|
|
|
|
|
Variance (%) |
|
|
|
Variance (%) |
|
|
|
|
|
Variance (%) |
||||||||||||||
|
($ amounts in millions) |
|
Q4’23 |
|
Q3’23 |
|
Q4’23 vs Q3’23 |
|
Q4’22 |
|
Q4’23 vs Q4’22 |
|
|
2023 |
|
|
|
2022 |
|
2023 vs 2022 |
|||||||||
|
Funded volume |
|
$ |
446 |
|
|
$ |
512 |
|
|
(13 |
)% |
|
$ |
701 |
|
|
(36 |
)% |
|
$ |
1,762 |
|
|
$ |
5,076 |
|
(65 |
)% |
|
Total revenue |
|
|
41 |
|
|
|
40 |
|
|
3 |
% |
|
|
32 |
|
|
28 |
% |
|
|
149 |
|
|
|
300 |
|
(50 |
)% |
|
Pre-tax income (loss) |
|
|
(13 |
) |
|
|
(20 |
) |
|
35 |
% |
|
|
(13 |
) |
|
— |
% |
|
|
(60 |
) |
|
|
117 |
|
(151 |
)% |
|
Adjusted net income (loss) |
|
|
(2 |
) |
|
|
(6 |
) |
|
67 |
% |
|
|
4 |
|
|
(150 |
)% |
|
|
(12 |
) |
|
|
122 |
|
(110 |
)% |
- Funded volume decreased 13% quarter over quarter due to minimal Home Improvement production, as a result of the continued wind-down of the Home Improvement business, seasonality and the commencement of a loan origination system migration in December. Within our Reverse business, funded volume decreased to $436 million, or down 7% from the prior quarter.
- Fourth quarter revenue increased 3% from the third quarter to $41 million as seasonal volume declines were more than offset by increased margins in our Reverse business.
Portfolio Management
The Portfolio Management segment generates revenue and earnings in the form of fair value gains or losses, gain on sale of loans, interest income, servicing income, fees for underwriting, advisory and valuation services and other ancillary fees.
|
|
|
|
|
Variance (%) |
|
|
|
Variance (%) |
|
|
|
|
|
Variance (%) |
||||||||||||
|
($ amounts in millions) |
|
Q4’23 |
|
Q3’23 |
|
Q4’23 vs Q3’23 |
|
Q4’22 |
|
Q4’23 vs Q4’22 |
|
|
2023 |
|
|
2022 |
|
|
2023 vs 2022 |
|||||||
|
Assets under management |
|
$ |
26,773 |
|
$ |
26,023 |
|
|
3 |
% |
|
$ |
20,186 |
|
33 |
% |
|
$ |
26,773 |
|
$ |
20,186 |
|
|
33 |
% |
|
Assets excluding HMBS and nonrecourse obligations |
|
|
1,515 |
|
|
1,232 |
|
|
23 |
% |
|
|
1,846 |
|
(18 |
)% |
|
|
1,515 |
|
|
1,846 |
|
|
(18 |
)% |
|
Total revenue |
|
|
240 |
|
|
(103 |
) |
|
333 |
% |
|
|
30 |
|
700 |
% |
|
|
115 |
|
|
(220 |
) |
|
152 |
% |
|
Pre-tax income (loss) |
|
|
217 |
|
|
(124 |
) |
|
275 |
% |
|
|
3 |
|
7133 |
% |
|
|
25 |
|
|
(347 |
) |
|
107 |
% |
|
Adjusted net income |
|
|
— |
|
|
— |
|
|
— |
% |
|
|
7 |
|
(100 |
)% |
|
|
6 |
|
|
16 |
|
|
(63 |
)% |
- Fourth quarter revenue was materially impacted by positive non-cash fair value adjustments on assets held for investment and related liabilities, as we updated model assumptions to account for changes in market interest rates, home price appreciation and credit spreads during the quarter.
- Excluding these adjustments, the segment was break-even for the quarter.
Reconciliation to GAAP
|
($ amounts in millions)(1) |
Q4’23 |
|
Q3’23 |
|
Q4’22 |
|
|
2023 |
|
|
|
2022 |
|
||||||
|
Reconciliation of net income (loss) from continuing operations to adjusted net income (loss) and adjusted EBITDA |
|
|
|
|
|
|
|
|
|
||||||||||
|
Net income (loss) from continuing operations |
$ |
171 |
|
|
$ |
(172 |
) |
|
$ |
(49 |
) |
|
$ |
(166 |
) |
|
$ |
(326 |
) |
|
Add back: Benefit (provision) for income taxes |
|
(1 |
) |
|
|
1 |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
17 |
|
|
Net income (loss) from continuing operations before taxes |
|
172 |
|
|
|
(173 |
) |
|
|
(48 |
) |
|
|
(167 |
) |
|
|
(343 |
) |
|
Adjustments for: |
|
|
|
|
|
|
|
|
|
||||||||||
|
Changes in fair value(2) |
|
(221 |
) |
|
|
120 |
|
|
|
12 |
|
|
|
(24 |
) |
|
|
334 |
|
|
Amortization and impairment of intangibles and other assets(3) |
|
17 |
|
|
|
9 |
|
|
|
15 |
|
|
|
44 |
|
|
|
47 |
|
|
Share-based compensation(4) |
|
3 |
|
|
|
3 |
|
|
|
4 |
|
|
|
13 |
|
|
|
18 |
|
|
Certain non-recurring costs(5) |
|
2 |
|
|
|
6 |
|
|
|
9 |
|
|
|
14 |
|
|
|
19 |
|
|
Adjusted net income (loss) before taxes |
|
(27 |
) |
|
|
(34 |
) |
|
|
(7 |
) |
|
|
(118 |
) |
|
|
76 |
|
|
Benefit (provision) for income taxes(6) |
|
7 |
|
|
|
8 |
|
|
|
2 |
|
|
|
31 |
|
|
|
(21 |
) |
|
Adjusted net income (loss) |
|
(20 |
) |
|
|
(25 |
) |
|
|
(5 |
) |
|
|
(87 |
) |
|
|
54 |
|
|
Provision (benefit) for income taxes(6) |
|
(7 |
) |
|
|
(8 |
) |
|
|
(2 |
) |
|
|
(31 |
) |
|
|
21 |
|
|
Depreciation |
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
5 |
|
|
|
4 |
|
|
Interest expense on non-funding debt |
|
8 |
|
|
|
8 |
|
|
|
7 |
|
|
|
31 |
|
|
|
28 |
|
|
Adjusted EBITDA |
$ |
(18 |
) |
|
$ |
(25 |
) |
|
$ |
1 |
|
|
$ |
(82 |
) |
|
$ |
107 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
($ amounts in millions except shares and $ per share) |
Q4’23 |
|
Q3’23 |
|
Q4’22 |
|
|
2023 |
|
|
|
2022 |
|
||||||
|
GAAP PER SHARE MEASURES |
|
|
|
|
|
|
|
|
|
||||||||||
|
Net income (loss) from continuing operations attributable to controlling interest |
$ |
64 |
|
|
$ |
(65 |
) |
|
$ |
(14 |
) |
|
$ |
(61 |
) |
|
$ |
(64 |
) |
|
Weighted average outstanding share count |
|
88,425,793 |
|
|
|
87,726,231 |
|
|
|
63,204,118 |
|
|
|
81,977,533 |
|
|
|
62,298,532 |
|
|
Basic net income (loss) per share from continuing operations |
$ |
0.72 |
|
|
$ |
(0.74 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.75 |
) |
|
$ |
(1.03 |
) |
|
If-converted method net income (loss) from continuing operations |
$ |
128 |
|
|
$ |
(65 |
) |
|
$ |
(14 |
) |
|
$ |
(61 |
) |
|
$ |
(298 |
) |
|
Weighted average diluted share count |
|
229,300,885 |
|
|
|
87,726,231 |
|
|
|
63,204,118 |
|
|
|
81,977,533 |
|
|
|
188,236,513 |
|
|
Diluted net income (loss) per share from continuing operations(7) |
$ |
0.55 |
|
|
$ |
(0.74 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.75 |
) |
|
$ |
(1.58 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NON-GAAP PER SHARE MEASURES |
|
|
|
|
|
|
|
|
|
||||||||||
|
Adjusted net income (loss) |
$ |
(20 |
) |
|
$ |
(25 |
) |
|
$ |
(5 |
) |
|
$ |
(87 |
) |
|
$ |
54 |
|
|
Weighted average share count |
|
229,300,885 |
|
|
|
229,166,288 |
|
|
|
187,822,766 |
|
|
|
219,051,258 |
|
|
|
188,236,513 |
|
|
Adjusted earnings (loss) per share |
$ |
(0.09 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.40 |
) |
|
$ |
0.29 |
|
(1) Totals may not foot due to rounding.
(2) Changes in fair value include changes in fair value of loans and securities held for investment and related obligations, deferred purchase price obligations, contingent earnout, warrant liability, and minority investments.
(3) Includes amortization and impairment of intangibles and impairment of certain other long-lived assets during the periods presented.
(4) Includes equity-based compensation for Replacement Restricted Stock Units and Earnout Right Restricted Stock Units, which are funded 100% by existing non-controlling shareholders or outstanding Class A Common Stock.
(5) Certain non-recurring costs and adjustments that management believes should be excluded as these do not relate to a recurring part of the core business operations. These items include amounts recognized for settlement of legal and regulatory matters, acquisition or divestiture-related expenses, and other one-time charges.
(6) We applied an effective combined corporate tax rate to adjusted consolidated pre-tax income (loss) for the respective period to determine the tax effect of adjusted consolidated net income (loss).
(7) Calculated on an if-converted basis except when anti-dilutive.
Adjusted Net Income by Segment (Continuing Operations)
|
|
|
|||||||||||||||
|
For the three months ended December 31, 2023 |
|
|
||||||||||||||
|
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
FOA |
||||||||||||
|
Pre-tax income (loss) |
$ |
(13 |
) |
$ |
217 |
|
$ |
(33 |
) |
$ |
172 |
|
||||
|
Adjustments for: |
|
|
|
|
||||||||||||
|
Changes in fair value(2) |
|
— |
|
|
(224 |
) |
|
3 |
|
|
(221 |
) |
||||
|
Amortization and impairment of intangibles and other assets(3) |
|
9 |
|
|
6 |
|
|
1 |
|
|
17 |
|
||||
|
Share-based compensation(4) |
|
1 |
|
|
— |
|
|
2 |
|
|
3 |
|
||||
|
Certain non-recurring costs(5) |
|
— |
|
|
— |
|
|
2 |
|
|
2 |
|
||||
|
Adjusted net loss before taxes |
$ |
(3 |
) |
$ |
— |
|
$ |
(24 |
) |
$ |
(27 |
) |
||||
|
Benefit for income taxes(6) |
|
(1 |
) |
|
— |
|
|
(6 |
) |
|
(7 |
) |
||||
|
Adjusted net loss |
$ |
(2 |
) |
$ |
— |
|
$ |
(18 |
) |
$ |
(20 |
) |
||||
|
Weighted average share count |
|
229,300,885 |
|
|
229,300,885 |
|
|
229,300,885 |
|
|
229,300,885 |
|
||||
|
Adjusted loss per share |
$ |
(0.01 |
) |
$ |
— |
|
$ |
(0.08 |
) |
$ |
(0.09 |
) |
||||
|
|
||||||||||||||||
|
For the three months ended September 30, 2023 |
|
|
||||||||||||||
|
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
FOA |
||||||||||||
|
Pre-tax loss |
$ |
(20 |
) |
$ |
(124 |
) |
$ |
(28 |
) |
$ |
(173 |
) |
||||
|
Adjustments for: |
|
|
|
|
||||||||||||
|
Changes in fair value(2) |
|
— |
|
|
124 |
|
|
(4 |
) |
|
120 |
|
||||
|
Amortization of intangible assets(3) |
|
9 |
|
|
— |
|
|
— |
|
|
9 |
|
||||
|
Share-based compensation(4) |
|
1 |
|
|
— |
|
|
2 |
|
|
3 |
|
||||
|
Certain non-recurring costs(5) |
|
1 |
|
|
— |
|
|
4 |
|
|
6 |
|
||||
|
Adjusted net loss before taxes |
$ |
(8 |
) |
$ |
— |
|
$ |
(26 |
) |
$ |
(34 |
) |
||||
|
Benefit for income taxes(6) |
|
(2 |
) |
|
— |
|
|
(6 |
) |
|
(8 |
) |
||||
|
Adjusted net loss |
$ |
(6 |
) |
$ |
— |
|
$ |
(19 |
) |
$ |
(25 |
) |
||||
|
Weighted average share count |
|
229,166,288 |
|
|
229,166,288 |
|
|
229,166,288 |
|
|
229,166,288 |
|
||||
|
Adjusted loss per share |
$ |
(0.03 |
) |
$ |
— |
|
$ |
(0.08 |
) |
$ |
(0.11 |
) |
||||
|
|
|
|||||||||||||||
|
For the three months ended December 31, 2022 |
|
|
||||||||||||||
|
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
FOA |
||||||||||||
|
Pre-tax income (loss) |
$ |
(13 |
) |
$ |
3 |
|
$ |
(37 |
) |
$ |
(48 |
) |
||||
|
Adjustments for: |
|
|
|
|
||||||||||||
|
Changes in fair value(2) |
|
— |
|
|
6 |
|
|
6 |
|
|
12 |
|
||||
|
Amortization and impairment of intangibles and other assets(3) |
|
13 |
|
|
— |
|
|
2 |
|
|
15 |
|
||||
|
Share-based compensation(4) |
|
1 |
|
|
— |
|
|
2 |
|
|
4 |
|
||||
|
Certain non-recurring costs(5) |
|
4 |
|
|
— |
|
|
5 |
|
|
9 |
|
||||
|
Adjusted net income (loss) before taxes |
$ |
5 |
|
$ |
9 |
|
$ |
(22 |
) |
$ |
(7 |
) |
||||
|
Provision (benefit) for income taxes(6) |
|
1 |
|
|
2 |
|
|
(6 |
) |
|
(2 |
) |
||||
|
Adjusted net income (loss) |
$ |
4 |
|
$ |
7 |
|
$ |
(16 |
) |
$ |
(5 |
) |
||||
|
Weighted average share count |
|
187,822,266 |
|
|
187,822,266 |
|
|
187,822,266 |
|
|
187,822,266 |
|
||||
|
Adjusted earnings (loss) per share |
$ |
0.02 |
|
$ |
0.04 |
|
$ |
(0.09 |
) |
$ |
(0.03 |
) |
||||
|
|
||||||||||||||||
|
For the year ended December 31, 2023 |
|
|
||||||||||||||
|
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
FOA |
||||||||||||
|
Pre-tax income (loss) |
$ |
(60 |
) |
$ |
25 |
|
$ |
(132 |
) |
$ |
(167 |
) |
||||
|
Adjustments for: |
|
|
|
|
||||||||||||
|
Changes in fair value(2) |
|
— |
|
|
(24 |
) |
|
— |
|
|
(24 |
) |
||||
|
Amortization and impairment of intangibles and other assets(3) |
|
37 |
|
|
6 |
|
|
1 |
|
|
44 |
|
||||
|
Share-based compensation(4) |
|
3 |
|
|
1 |
|
|
9 |
|
|
13 |
|
||||
|
Certain non-recurring costs(5) |
|
3 |
|
|
1 |
|
|
10 |
|
|
14 |
|
||||
|
Adjusted net income (loss) before taxes |
$ |
(16 |
) |
$ |
8 |
|
$ |
(110 |
) |
$ |
(118 |
) |
||||
|
Provision (benefit) for income taxes(6) |
|
(4 |
) |
|
2 |
|
|
(29 |
) |
|
(31 |
) |
||||
|
Adjusted net income (loss) |
$ |
(12 |
) |
$ |
6 |
|
$ |
(81 |
) |
$ |
(87 |
) |
||||
|
Weighted average share count |
|
219,051,258 |
|
|
219,051,258 |
|
|
219,051,258 |
|
|
219,051,258 |
|
||||
|
Adjusted earnings (loss) per share |
$ |
(0.06 |
) |
$ |
0.03 |
|
$ |
(0.37 |
) |
$ |
(0.40 |
) |
||||
|
|
|
|||||||||||||||
|
For the year ended December 31, 2022 |
|
|
||||||||||||||
|
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
FOA |
||||||||||||
|
Pre-tax income (loss) |
$ |
117 |
|
$ |
(347 |
) |
$ |
(113 |
) |
$ |
(343 |
) |
||||
|
Adjustments for: |
|
|
|
|
||||||||||||
|
Changes in fair value(2) |
|
— |
|
|
362 |
|
|
(28 |
) |
|
334 |
|
||||
|
Amortization and impairment of intangibles and other assets(3) |
|
41 |
|
|
4 |
|
|
2 |
|
|
47 |
|
||||
|
Share-based compensation(4) |
|
6 |
|
|
2 |
|
|
11 |
|
|
18 |
|
||||
|
Certain non-recurring costs(5) |
|
1 |
|
|
1 |
|
|
17 |
|
|
19 |
|
||||
|
Adjusted net income (loss) before taxes |
$ |
165 |
|
$ |
22 |
|
$ |
(111 |
) |
$ |
76 |
|
||||
|
Provision (benefit) for income taxes(6) |
|
43 |
|
6 |
|
|
(29 |
) |
|
21 |
|
|||||
|
Adjusted net income (loss) |
$ |
122 |
|
$ |
16 |
|
$ |
(83 |
) |
$ |
54 |
|
||||
|
Weighted average share count |
|
188,236,513 |
|
|
188,236,513 |
|
|
188,236,513 |
|
|
188,236,513 |
|
||||
|
Adjusted earnings (loss) per share |
$ |
0.65 |
|
$ |
0.09 |
|
$ |
(0.44 |
) |
$ |
0.29 |
|
||||
(1) Totals may not foot due to rounding.
(2) Changes in fair value include changes in fair value of loans and securities held for investment and related obligations, deferred purchase price obligations, contingent earnout, warrant liability, and minority investments.
(3) Includes amortization and impairment of intangibles and impairment of certain long-lived assets recognized during the periods presented.
(4) Includes equity-based compensation for Replacement Restricted Stock Units and Earnout Right Restricted Stock Units, which are funded 100% by existing non-controlling shareholders or outstanding Class A Common Stock.
(5) Certain non-recurring costs and adjustments that management believes should be excluded as these do not relate to a recurring part of the core business operations. These items include amounts recognized for settlement of legal and regulatory matters, acquisition or divestiture-related expenses, and other one-time charges.
(6) We applied an effective combined corporate tax rate to adjusted consolidated pre-tax income (loss) for the respective period to determine the tax effect of adjusted consolidated net income (loss).
|
Finance of America Companies Inc. and Subsidiaries |
|||||||
|
|
December 31, 2023 |
|
September 30, 2023 |
||||
|
ASSETS |
|
|
|
||||
|
Cash and cash equivalents |
$ |
46,482 |
|
|
$ |
66,341 |
|
|
Restricted cash |
|
178,319 |
|
|
|
216,273 |
|
|
Loans held for investment, subject to HMBS related obligations, at fair value |
|
17,548,763 |
|
|
|
17,185,552 |
|
|
Loans held for investment, subject to nonrecourse debt, at fair value |
|
8,272,393 |
|
|
|
7,912,759 |
|
|
Loans held for investment, at fair value |
|
575,228 |
|
|
|
467,319 |
|
|
Loans held for sale, at fair value |
|
4,246 |
|
|
|
23,956 |
|
|
Intangible assets, net |
|
253,531 |
|
|
|
269,228 |
|
|
Other assets, net |
|
221,907 |
|
|
|
247,678 |
|
|
Assets of discontinued operations |
|
6,721 |
|
|
|
8,356 |
|
|
TOTAL ASSETS |
$ |
27,107,590 |
|
|
$ |
26,397,462 |
|
|
|
|
|
|
||||
|
LIABILITIES AND EQUITY |
|
|
|
||||
|
HMBS related obligations, at fair value |
$ |
17,353,720 |
|
|
$ |
16,978,168 |
|
|
Nonrecourse debt, at fair value |
|
7,904,200 |
|
|
|
7,812,570 |
|
|
Other financing lines of credit |
|
928,479 |
|
|
|
852,813 |
|
|
Notes payable, net (includes amounts due to related parties of $59,130 and $59,130, respectively) |
|
410,911 |
|
|
|
411,124 |
|
|
Payables and other liabilities |
|
219,569 |
|
|
|
220,818 |
|
|
Liabilities of discontinued operations |
|
18,304 |
|
|
|
18,360 |
|
|
TOTAL LIABILITIES |
|
26,835,183 |
|
|
|
26,293,853 |
|
|
|
|
|
|
||||
|
EQUITY |
|
|
|
||||
|
Class A Common Stock, $0.0001 par value; 6,000,000,000 shares authorized; 100,599,241 and 92,038,371 shares issued, respectively, and 96,340,741 and 87,779,871 shares outstanding, respectively |
|
10 |
|
|
|
9 |
|
|
Class B Common Stock, $0.0001 par value; 1,000,000 shares authorized; 15 and 15 shares issued and outstanding, respectively |
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
946,929 |
|
|
|
940,717 |
|
|
Accumulated deficit |
|
(714,383 |
) |
|
|
(775,744 |
) |
|
Accumulated other comprehensive loss |
|
(249 |
) |
|
|
(221 |
) |
|
Noncontrolling interest |
|
40,100 |
|
|
|
(61,152 |
) |
|
TOTAL EQUITY |
|
272,407 |
|
|
|
103,609 |
|
|
TOTAL LIABILITIES AND EQUITY |
$ |
27,107,590 |
|
|
$ |
26,397,462 |
|
|
Finance of America Companies Inc. and Subsidiaries Selected Financial Information
Consolidated Statements of Operations (Unaudited) |
|||||||||||||||||||
|
|
Q4’23 |
|
Q3’23 |
|
Q4’22 |
|
|
2023 |
|
|
|
2022 |
|
||||||
|
REVENUES |
|
|
|
|
|
|
|
|
|
||||||||||
|
Net fair value gains (losses) on loans and related obligations |
$ |
292,203 |
|
|
$ |
(53,135 |
) |
|
$ |
94,598 |
|
|
$ |
322,329 |
|
|
$ |
89,489 |
|
|
Fee income |
|
10,073 |
|
|
|
13,201 |
|
|
|
9,590 |
|
|
|
43,450 |
|
|
|
81,815 |
|
|
Loss on sale and other income from loans held for sale, net |
|
(1,530 |
) |
|
|
(6,984 |
) |
|
|
(5,689 |
) |
|
|
(24,994 |
) |
|
|
(5,931 |
) |
|
Net interest expense: |
|
|
|
|
|
|
|
|
|
||||||||||
|
Interest income |
|
2,459 |
|
|
|
4,443 |
|
|
|
718 |
|
|
|
12,193 |
|
|
|
6,038 |
|
|
Interest expense |
|
(27,473 |
) |
|
|
(27,965 |
) |
|
|
(34,610 |
) |
|
|
(118,728 |
) |
|
|
(118,649 |
) |
|
Net interest expense |
|
(25,014 |
) |
|
|
(23,522 |
) |
|
|
(33,892 |
) |
|
|
(106,535 |
) |
|
|
(112,611 |
) |
|
TOTAL REVENUES |
|
275,732 |
|
|
|
(70,440 |
) |
|
|
64,607 |
|
|
|
234,250 |
|
|
|
52,762 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
EXPENSES |
|
|
|
|
|
|
|
|
|
||||||||||
|
Salaries, benefits, and related expenses |
|
37,850 |
|
|
|
48,557 |
|
|
|
43,252 |
|
|
|
178,319 |
|
|
|
206,943 |
|
|
Loan production and portfolio related expenses |
|
5,194 |
|
|
|
6,370 |
|
|
|
11,896 |
|
|
|
26,490 |
|
|
|
52,079 |
|
|
Loan servicing expenses |
|
7,455 |
|
|
|
8,000 |
|
|
|
7,250 |
|
|
|
30,729 |
|
|
|
33,063 |
|
|
Marketing and advertising expenses |
|
9,729 |
|
|
|
11,491 |
|
|
|
1,459 |
|
|
|
31,896 |
|
|
|
13,031 |
|
|
Depreciation and amortization |
|
9,939 |
|
|
|
9,954 |
|
|
|
9,959 |
|
|
|
42,369 |
|
|
|
42,028 |
|
|
General and administrative expenses |
|
22,632 |
|
|
|
21,054 |
|
|
|
27,212 |
|
|
|
82,204 |
|
|
|
71,082 |
|
|
TOTAL EXPENSES |
|
92,799 |
|
|
|
105,426 |
|
|
|
101,028 |
|
|
|
392,007 |
|
|
|
418,226 |
|
|
IMPAIRMENT OF INTANGIBLES AND OTHER ASSETS |
|
(8,738 |
) |
|
|
(558 |
) |
|
|
(5,728 |
) |
|
|
(9,296 |
) |
|
|
(9,528 |
) |
|
OTHER, NET |
|
(2,641 |
) |
|
|
3,853 |
|
|
|
(5,614 |
) |
|
|
211 |
|
|
|
31,992 |
|
|
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
|
171,554 |
|
|
|
(172,571 |
) |
|
|
(47,763 |
) |
|
|
(166,842 |
) |
|
|
(343,000 |
) |
|
Provision (benefit) for income taxes from continuing operations |
|
193 |
|
|
|
(103 |
) |
|
|
1,282 |
|
|
|
(593 |
) |
|
|
(17,132 |
) |
|
NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
|
171,361 |
|
|
|
(172,468 |
) |
|
|
(49,045 |
) |
|
|
(166,249 |
) |
|
|
(325,868 |
) |
|
NET LOSS FROM DISCONTINUED OPERATIONS |
|
(6,698 |
) |
|
|
(2,464 |
) |
|
|
(132,965 |
) |
|
|
(51,909 |
) |
|
|
(389,660 |
) |
|
NET INCOME (LOSS) |
|
164,663 |
|
|
|
(174,932 |
) |
|
|
(182,010 |
) |
|
|
(218,158 |
) |
|
|
(715,528 |
) |
|
Noncontrolling interest |
|
103,302 |
|
|
|
(109,569 |
) |
|
|
(124,987 |
) |
|
|
(138,070 |
) |
|
|
(524,846 |
) |
|
NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST |
$ |
61,361 |
|
|
$ |
(65,363 |
) |
|
$ |
(57,023 |
) |
|
$ |
(80,088 |
) |
|
$ |
(190,682 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
EARNINGS PER SHARE |
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic weighted average shares outstanding |
|
88,425,793 |
|
|
|
87,726,231 |
|
|
|
63,204,118 |
|
|
|
81,977,533 |
|
|
|
62,298,532 |
|
|
Basic net income (loss) per share from continuing operations |
$ |
0.72 |
|
|
$ |
(0.74 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.75 |
) |
|
$ |
(1.03 |
) |
|
Basic net income (loss) per share |
$ |
0.69 |
|
|
$ |
(0.75 |
) |
|
$ |
(0.90 |
) |
|
$ |
(0.98 |
) |
|
$ |
(3.06 |
) |
|
Diluted weighted average shares outstanding |
|
229,300,885 |
|
|
|
87,726,231 |
|
|
|
63,204,118 |
|
|
|
81,977,533 |
|
|
|
188,236,513 |
|
|
Diluted net income (loss) per share from continuing operations |
$ |
0.55 |
|
|
$ |
(0.74 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.75 |
) |
|
$ |
(1.58 |
) |
|
Diluted net income (loss) per share |
$ |
0.53 |
|
|
$ |
(0.75 |
) |
|
$ |
(0.90 |
) |
|
$ |
(0.98 |
) |
|
$ |
(3.12 |
) |
Webcast and Conference Call
Management will host a webcast and conference call on Wednesday, March 6th at 5:00 pm Eastern Time to discuss the Company’s results for the fourth quarter and full year ended December 31, 2023. A copy of this press release will be posted prior to the call under the “Investors” section on Finance of America’s website at https://www.financeofamerica.com/investors.
To listen to the audio webcast of the conference call, please visit the “Investors” section of the Company’s website at https://www.financeofamerica.com/investors. The conference call can also be accessed by dialing the following:
- 1-800-715-9871 (Domestic)
- 1-646-307-1963 (International)
- Conference ID: 5706924
Replay
A replay of the call will also be available on the Company’s website approximately two hours after the conclusion of the conference call until March 20, 2024. To access the replay, dial 1-800-770-2030 (United States) or 1-646-307-1963 (International). The replay pin number is 5706924. The replay can also be accessed on the “Investors” section of the Company’s website at https://www.financeofamerica.com/investors.
About Finance of America
Finance of America (NYSE: FOA) is a modern retirement solutions platform that provides customers with access to an innovative range of retirement offerings centered on the home. In addition, FOA offers capital markets and portfolio management capabilities primarily to optimize the distribution of its originated loans to investors. FOA is headquartered in Plano, Texas. For more information, please visit www.financeofamerica.com.
Forward-Looking Statements
This release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts or statements of current conditions, but instead represent only management’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company’s control. It is possible that our actual results, financial condition and liquidity may differ, possibly materially, from the anticipated results, financial condition and liquidity in these forward-looking statements. The Company’s actual results may differ from its expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. The Company cautions readers not to place undue reliance upon any forward-looking statements, which are current only as of the date of this release.
Contacts
For Finance of America Media: pr@financeofamerica.com
For Finance of America Investor Relations: ir@financeofamerica.com
