Finance of America Reports Fourth Quarter and Full Year 2022 Results

– Net loss for the year of $716 million or $3.06 basic loss per share entirely attributable to balance sheet adjustments and Mortgage Originations segment which has been discontinued –

– Adjusted net loss* of $61 million for the year, entirely attributable to businesses that have been discontinued or divested in first half of 2023 –

– Announced acquisition of AAG, further strengthening our market position in Reverse Mortgage Lending –

PLANO, Texas–(BUSINESS WIRE)–Finance of America Companies Inc., (“Finance of America” or the “Company”) (NYSE: FOA), a leading specialty finance and solutions platform, reported financial results for the quarter and year ended December 31, 2022.

Full Year 2022 Financial Highlights

  • For the full year 2022, the Company recognized a net loss of $716 million or $3.06 basic loss per share. The Company recognized an adjusted net loss of $61 million.
  • On an adjusted basis, the full year net loss is entirely attributable to the operational losses associated with the Mortgage Originations, Commercial Originations, and Lender Services segments. These segments are expected to be discontinued or divested by the end of Q2 2023.
  • Announced the acquisition of the assets and operations of AAG, a leading reverse mortgage lender. The transaction has received regulatory approval, is scheduled to close on March 31, 2023 and is expected to create the leading U.S. reverse mortgage originator.
  • Wind down of Mortgage Originations, announced in the fourth quarter of 2022, was completed in February 2023.
  • During the first quarter of 2023, the Company announced the execution of definitive agreements for the sale of its Title Insurance and Commercial Originations businesses.

*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.

Graham A. Fleming, President and Interim Chief Executive Officer commented, “Thank you to all our team members for their hard work and dedication over the past 12 months. 2022 was a transformative year for FOA. We made decisions to account for uncertainty in the residential mortgage market, while continuing to invest in areas where we see solid, sustainable growth. By divesting our non-core operations and adding to our reverse lending business, we are well-positioned for future growth and will continue to invest and expand on our strategy to help Americans achieve their retirement goals.”

Fourth Quarter Financial Summary

($ amounts in millions, except margin and per share data)

 

 

 

Variance (%)

 

 

 

Variance (%)

 

 

 

 

 

Variance (%)

 

 

Q4’22

 

Q3’22

 

Q4’22 vs Q3’22

 

Q4’21

 

Q4’22 vs Q4’21

 

2022

 

2021

 

2022 vs 2021

 

 

Successor

 

Successor

 

 

 

Successor

 

 

 

Successor

 

Combined (1)

 

 

Funded volume

 

$

2,082

 

 

$

4,187

 

 

(50

) %

 

$

8,793

 

 

(76

) %

 

$

19,771

 

 

$

35,637

 

 

(45

) %

Total revenue

 

 

94

 

 

 

71

 

 

32

%

 

 

383

 

 

(75

) %

 

 

573

 

 

 

1,736

 

 

(67

) %

Total expenses and other, net

 

 

220

 

 

 

237

 

 

(7

) %

 

 

364

 

 

(40

) %

 

 

1,112

 

 

 

1,552

 

 

(28

) %

Pre-tax net loss

 

 

(181

)

 

 

(305

)

 

41

%

 

 

(1,362

)

 

87

%

 

 

(732

)

 

 

(1,197

)

 

39

%

Net loss

 

 

(182

)

 

 

(302

)

 

40

%

 

 

(1,336

)

 

86

%

 

 

(716

)

 

 

(1,177

)

 

39

%

Pre-tax income (loss) excluding impairment of goodwill, intangibles, and other assets(2)

 

 

(127

)

 

 

(167

)

 

24

%

 

 

18

 

 

(806

) %

 

 

(540

)

 

 

184

 

 

(393

) %

Adjusted net income (loss)(3)

 

 

(56

)

 

 

(20

)

 

(180

) %

 

 

70

 

 

(180

) %

 

 

(61

)

 

 

308

 

 

(120

) %

Adjusted EBITDA(3)

 

 

(67

)

 

 

(17

)

 

(294

) %

 

 

104

 

 

(164

) %

 

 

(43

)

 

 

456

 

 

(109

) %

Basic loss per share

 

$

(0.90

)

 

$

(1.35

)

 

33

%

 

$

(6.61

)

 

86

%

 

$

(3.06

)

 

 

N/A

 

 

N/A

 

Diluted loss per share(4)

 

$

(0.77

)

 

$

(1.35

)

 

43

%

 

$

(6.72

)

 

89

%

 

$

(3.12

)

 

 

N/A

 

 

N/A

 

Adjusted diluted earnings (loss) per share(4)

 

$

(0.30

)

 

$

(0.10

)

 

(200

) %

 

$

0.37

 

 

(181

) %

 

$

(0.32

)

 

$

1.61

 

 

(120

) %

(1)

 

Financial results of combined successor and predecessor of the business combination with Replay.  

(2)

  Calculated for each period as pre-tax income (loss) excluding impairment of goodwill, intangibles, and other assets.

(3)

 

See Reconciliation to GAAP section for a reconciliation of Adjusted net income (loss) and Adjusted EBITDA to Net income (loss).

(4)

 

Calculated on an if-converted basis. See Reconciliation to GAAP section for more detail.

Balance Sheet Highlights

($ amounts in millions)

 

December 31,

 

September 30,

 

Variance (%)

 

 

2022

 

2022

 

Q4 2022 vs. Q3 2022

Cash and cash equivalents

 

$

97

 

$

169

 

(43

) %

Securitized loans held for investment (HMBS & nonrecourse)

 

 

18,569

 

 

17,658

 

5

%

Mortgage servicing rights (MSRs)

 

 

95

 

 

103

 

(8

) %

Total assets

 

 

20,873

 

 

21,190

 

(1

) %

Total liabilities

 

 

20,468

 

 

20,615

 

(1

) %

Total equity

 

 

405

 

 

575

 

(30

) %

Total tangible equity(1)

 

 

30

 

 

137

 

(78

) %

(1)

 

Total tangible equity calculated as total equity less intangible assets, net. 

  • Cash and cash equivalents ended the fourth quarter at $97 million. The $72 million decrease in cash was almost entirely attributable to operational losses associated with the Mortgage Originations segment.
  • Securitized loans held for investment (HMBS & nonrecourse) increased by $911 million as a result of the completion of two securitizations of non-agency reverse mortgages during the quarter.
  • Total assets declined 1% from prior quarter due to reduced loans held for sale related to the wind down of the Mortgage Originations segment.
  • Total liabilities declined $147 million on a sequential quarter basis primarily due to reduced warehouse lines of credit related to the wind down of the Mortgage Originations segment.
  • Total tangible equity decreased $107 million to $30 million, predominantly due to operational losses associated with the Mortgage Originations, Commercial Originations, and Lender Services segments.

Segment Results

Reverse Originations

The Reverse Originations segment generates revenue and earnings in the form of net origination gains and origination fees earned on the origination of reverse mortgage loans.

($ amounts in millions)

 

 

 

Variance (%)

 

 

 

Variance (%)

 

 

 

 

 

Variance (%)

 

 

Q4’22

 

Q3’22

 

Q4’22 vs Q3’22

 

Q4’21

 

Q4’22 vs Q4’21

 

2022

 

2021

 

2022 vs 2021

 

 

Successor

 

Successor

 

 

 

Successor

 

 

 

Successor

 

Combined (1)

 

 

Funded volume

 

$

644

 

 

$

1,135

 

(43

) %

 

$

1,322

 

 

(51

) %

 

$

4,834

 

 

$

4,261

 

 

13

%

Total revenue

 

 

30

 

 

 

72

 

(58

) %

 

 

114

 

 

(74

) %

 

 

289

 

 

 

389

 

 

(26

) %

Impairment of goodwill, intangibles, and other assets

 

 

(4

)

 

 

 

N/A

 

 

 

(408

)

 

99

%

 

 

(4

)

 

 

(408

)

 

99

%

Pre-tax income (loss)

 

 

(10

)

 

 

34

 

(129

) %

 

 

(333

)

 

97

%

 

 

128

 

 

 

(165

)

 

178

%

Pre-tax income (loss) excluding impairment of goodwill, intangibles, and other assets

 

 

(6

)

 

 

34

 

(118

) %

 

 

75

 

 

(108

) %

 

 

132

 

 

 

243

 

 

(46

) %

(1)

 

Financial results of combined successor and predecessor of the business combination with Replay.

  • In 2022, Reverse Originations funded $4,834 million; an increase of 13% over 2021, which was driven by strong refinance volume in the first half of 2022 and an increase in new-to-reverse volumes.
  • 2022 revenue declined 26% from 2021 to $289 million due primarily to the impact of widening credit spreads experienced during the year, partially offset by higher volumes.
  • 2022 pre-tax income excluding impairment of goodwill, intangibles, and other assets of $132 million declined $111 million in line with the decline in revenue.

Portfolio Management

The Portfolio Management segment generates revenue and earnings in the form of gain on sale of loans, fair value gains or losses, interest income, servicing income, fees for underwriting, advisory and valuation services and other ancillary fees.

($ amounts in millions)

 

 

 

Variance (%)

 

 

 

Variance (%)

 

 

 

 

 

Variance (%)

 

 

Q4’22

 

Q3’22

 

Q4’22 vs Q3’22

 

Q4’21

 

Q4’22 vs Q4’21

 

2022

 

2021

 

2022 vs 2021

 

 

Successor

 

Successor

 

 

 

Successor

 

 

 

Successor

 

Combined (1)

 

 

Assets under management

 

$

20,186

 

$

19,871

 

 

2

%

 

$

18,974

 

 

6

%

 

$

20,186

 

 

$

18,974

 

 

6

%

Assets excluding HMBS and non-recourse obligations

 

 

1,617

 

 

2,560

 

 

(37

) %

 

 

2,431

 

 

(33

) %

 

 

1,617

 

 

 

2,431

 

 

(33

) %

Mortgage servicing rights (MSRs)

 

 

95

 

 

103

 

 

(8

) %

 

 

428

 

 

(78

) %

 

 

95

 

 

 

428

 

 

(78

) %

Total revenue

 

 

30

 

 

(104

)

 

129

%

 

 

(29

)

 

203

%

 

 

(220

)

 

 

17

 

 

(1394

) %

Impairment of goodwill, intangibles, and other assets

 

 

 

 

(4

)

 

100

%

 

 

(12

)

 

100

%

 

 

(4

)

 

 

(12

)

 

67

%

Pre-tax income (loss)

 

 

3

 

 

(135

)

 

102

%

 

 

(69

)

 

104

%

 

 

(347

)

 

 

(109

)

 

(218

) %

Pre-tax income (loss) excluding impairment of goodwill, intangibles, and other assets

 

 

3

 

 

(131

)

 

102

%

 

 

(57

)

 

105

%

 

 

(343

)

 

 

(97

)

 

(254

) %

(1)

Financial results of combined successor and predecessor of the business combination with Replay.

  • 2022 assets under management grew 6% to $20,186 million compared to 2021. This growth is directly attributable to the eight securitizations completed during the year.
  • 2022 revenue was materially impacted by negative fair value adjustments on assets held for investment and related liabilities as we updated model assumptions to account for higher credit spreads and increased interest rates experienced during the year. The residual value of assets subject to nonrecourse debt within the securitization trusts as of December 31, 2022 was $110 million, down from $390 million as of December 31, 2021.

Lender Services

The Lender Services business generates revenue and earnings in the form of lender service support fees.

($ amounts in millions)

 

 

 

Variance (%)

 

 

 

Variance (%)

 

 

 

 

 

Variance (%)

 

 

Q4’22

 

Q3’22

 

Q4’22 vs Q3’22

 

Q4’21

 

Q4’22 vs Q4’21

 

2022

 

2021

 

2022 vs 2021

 

 

Successor

 

Successor

 

 

 

Successor

 

 

 

Successor

 

Combined (1)

 

 

Total revenue

 

$

37

 

 

$

44

 

 

(16

) %

 

$

83

 

 

(55

) %

 

$

215

 

 

$

328

 

 

(34

) %

% of revenue from third-party clients

 

 

80

%

 

 

80

%

 

%

 

 

82

%

 

(2

) %

 

 

80

%

 

 

81

%

 

(1

) %

Impairment of goodwill, intangibles, and other assets

 

$

(48

)

 

$

 

 

N/A

 

 

$

(110

)

 

56

%

 

$

(48

)

 

$

(110

)

 

56

%

Pre-tax loss

 

 

(65

)

 

 

(11

)

 

(491

) %

 

 

(101

)

 

36

%

 

 

(73

)

 

 

(71

)

 

(3

) %

Pre-tax income (loss) excluding impairment of goodwill, intangibles, and other assets

 

 

(17

)

 

 

(11

)

 

55

%

 

 

9

 

 

(289

) %

 

 

(25

)

 

 

39

 

 

(164

) %

(1)

 

Financial results of combined successor and predecessor of the business combination with Replay.

  • On February 1, the Company entered into an agreement to sell its Title Insurance Businesses. The transaction is expected to close in the second quarter of 2023. For additional detail, please refer to the Company’s Current Report on Form 8-K filed with the SEC on February 2, 2023.

Commercial Originations

During the period, the Commercial Originations segment provided business purpose lending solutions for residential real estate investors. The Commercial Originations segment generated revenue and earnings in the form of net origination gains and origination fees earned on the origination of mortgage loans.

($ amounts in millions)

 

 

 

Variance (%)

 

 

 

Variance (%)

 

 

 

 

 

Variance (%)

 

 

Q4’22

 

Q3’22

 

Q4’22 vs Q3’22

 

Q4’21

 

Q4’22 vs Q4’21

 

2022

 

2021

 

2022 vs 2021

 

 

Successor

 

Successor

 

 

 

Successor

 

 

 

Successor

 

Combined (1)

 

 

Funded volume

 

$

300

 

 

$

355

 

 

(15

) %

 

$

580

 

 

(48

) %

 

$

1,768

 

 

$

1,769

 

 

%

Total revenue

 

 

13

 

 

 

12

 

 

8

%

 

 

30

 

 

(57

) %

 

 

59

 

 

 

95

 

 

(38

) %

Impairment of goodwill, intangibles, and other assets

 

 

 

 

 

(6

)

 

100

%

 

 

(76

)

 

100

%

 

 

(6

)

 

 

(76

)

 

92

%

Pre-tax loss

 

 

(5

)

 

 

(12

)

 

58

%

 

 

(68

)

 

93

%

 

 

(31

)

 

 

(58

)

 

47

%

Pre-tax income (loss) excluding impairment of goodwill, intangibles, and other assets

 

 

(5

)

 

 

(6

)

 

17

%

 

 

8

 

 

(163

) %

 

 

(25

)

 

 

18

 

 

(239

) %

(1)  

Financial results of combined successor and predecessor of the business combination with Replay.

  • On February 19, the Company entered into an agreement to sell certain operational assets of our Commercial Originations segment. The transaction is expected to close mid-March. For additional detail, please refer to the Company’s Current Report on Form 8-K filed with the SEC on February 21, 2023.

Mortgage Originations

During the period, the Mortgage Originations segment generated revenue through fee income from loan originations and gain on sale of mortgage loans into the secondary market.

($ amounts in millions)

 

 

 

Variance (%)

 

 

 

Variance (%)

 

 

 

 

 

Variance (%)

 

 

Q4’22

 

Q3’22

 

Q4’22 vs Q3’22

 

Q4’21

 

Q4’22 vs Q4’21

 

2022

 

2021

 

2022 vs 2021

 

 

Successor

 

Successor

 

 

 

Successor

 

 

 

Successor

 

Combined (1)

 

 

Funded volume (Total)

 

$

1,137

 

 

$

2,697

 

 

(58

) %

 

$

6,891

 

 

(84

) %

 

$

13,169

 

 

$

29,607

 

 

(56

) %

Funded volume (Purchase)

 

 

951

 

 

 

2,278

 

 

(58

) %

 

 

3,405

 

 

(72

) %

 

 

9,331

 

 

 

13,323

 

 

(30

) %

Funded volume (non-agency)

 

 

192

 

 

 

504

 

 

(62

) %

 

 

1,242

 

 

(85

) %

 

 

2,760

 

 

 

4,068

 

 

(32

) %

Net rate lock volume

 

 

345

 

 

 

2,474

 

 

(86

) %

 

 

6,198

 

 

(94

) %

 

 

11,936

 

 

 

28,952

 

 

(59

) %

Mortgage originations margin

 

 

(2.16

) %

 

 

1.87

%

 

(215

)%

 

 

2.52

%

 

(185

)%

 

 

1.94

%

 

 

2.86

%

 

(32

) %

Total revenue

 

$

(1

)

 

$

61

 

 

(102

) %

 

 

187

 

 

(101

) %

 

 

299

 

 

 

959

 

 

(69

) %

Impairment of goodwill, intangibles, and other assets

 

 

 

 

 

(129

)

 

100

%

 

 

(775

)

 

100

%

 

 

(129

)

 

 

(775

)

 

83

%

Pre-tax loss

 

 

(68

)

 

 

(170

)

 

60

%

 

 

(783

)

 

91

%

 

 

(294

)

 

 

(679

)

 

57

%

Pre-tax income (loss) excluding impairment of goodwill, intangibles, and other assets

 

 

(68

)

 

 

(41

)

 

(66

) %

 

 

(8

)

 

(750

) %

 

 

(165

)

 

 

96

 

 

(272

) %

(1)  

Financial results of combined successor and predecessor of the business combination with Replay.

  • On October 20, 2022, the Company announced its decision to wind down the operations of the Mortgage Originations segment, other than the Home Improvement channel. This commenced in the fourth quarter and was completed on February 28, 2023. Please refer to the Company’s Current Report on Form 8-K filed with the SEC on March 6, 2023 for additional information.

Reconciliation to GAAP

($ amounts in millions)

Q4’22

 

Q3’22

 

Q4’21

 

2022

 

2021

 

Successor

 

Combined (1)

 

 

 

 

 

 

 

 

 

Reconciliation of net loss to adjusted net income loss and adjusted EBITDA

$

(182

)

 

$

(302

)

 

$

(1,336

)

 

$

(716

)

 

$

(1,177

)

Add back: Benefit (provision) for income taxes

 

(1

)

 

 

3

 

 

 

(26

)

 

 

16

 

 

 

20

 

Net loss before taxes

 

(181

)

 

 

(305

)

 

 

(1,362

)

 

 

(732

)

 

 

(1,197

)

Adjustments for:

 

 

 

 

 

 

 

 

 

Changes in fair value(2)

 

12

 

 

 

116

 

 

 

52

 

 

 

335

 

 

 

108

 

Amortization and impairment of goodwill, intangibles, and other assets(3)

 

66

 

 

 

152

 

 

 

1,395

 

 

 

246

 

 

 

1,422

 

Share-based compensation(4)

 

6

 

 

 

7

 

 

 

11

 

 

 

28

 

 

 

32

 

Certain non-recurring costs(5)

 

21

 

 

 

3

 

 

 

 

 

 

42

 

 

 

53

 

Adjusted net income (loss) before taxes

 

(76

)

 

 

(27

)

 

 

96

 

 

 

(81

)

 

 

418

 

(Provision) benefit for income taxes(6)

 

20

 

 

 

7

 

 

 

(26

)

 

 

20

 

 

 

(110

)

Adjusted net income (loss)

 

(56

)

 

 

(20

)

 

 

70

 

 

 

(61

)

 

 

308

 

Provision (benefit) for income taxes(6)

 

(20

)

 

 

(7

)

 

 

26

 

 

 

(20

)

 

 

110

 

Depreciation

 

2

 

 

 

3

 

 

 

1

 

 

 

10

 

 

 

10

 

Interest expense on non-funding debt

 

7

 

 

 

7

 

 

 

7

 

 

 

28

 

 

 

28

 

Adjusted EBITDA

$

(67

)

 

$

(17

)

 

$

104

 

 

$

(43

)

 

$

456

 

OTHER KEY METRICS

 

 

 

 

 

 

 

 

 

Cash paid for income taxes

$

 

 

$

 

 

$

 

 

$

 

 

$

2

 

 

 

 

 

 

 

 

 

 

 

($ amounts in millions except shares and $ per share)

Q4’22

 

Q3’22

 

Q4’21

 

 

2022

 

 

 

2021

 

 

Successor

 

Combined (1)

GAAP PER SHARE MEASURES

 

 

 

 

 

 

 

 

 

Net loss attributable to controlling interest

$

(57

)

 

$

(85

)

 

$

(395

)

 

$

(191

)

 

 

(252

)

Weighted average outstanding share count

 

63,204,118

 

 

 

62,804,809

 

 

 

59,806,378

 

 

 

62,298,532

 

 

 

N/A

 

Basic loss per share

$

(0.90

)

 

$

(1.35

)

 

$

(6.61

)

 

$

(3.06

)

 

 

N/A

 

If-converted method net earnings (loss)

 

(145

)

 

 

(85

)

 

 

(1,273

)

 

 

(587

)

 

 

N/A

 

Weighted average diluted share count

 

187,822,266

 

 

 

62,804,809

 

 

 

189,436,869

 

 

 

188,236,513

 

 

 

N/A

 

Diluted earnings (loss) per share

$

(0.77

)

 

$

(1.35

)

 

$

(6.72

)

 

$

(3.12

)

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

NON-GAAP PER SHARE MEASURES

 

 

 

 

 

 

  

 

 

Adjusted net income (loss)

$

(56

)

 

 

(20

)

 

$

70

 

 

$

(61

)

 

$

308

 

Weighted average diluted share count

 

187,822,266

 

 

 

187,877,936

 

 

 

189,436,869

 

 

 

188,236,513

 

 

 

190,745,873

 

Adjusted diluted earnings (loss) per share

$

(0.30

)

 

 

(0.10

)

 

$

0.37

 

 

$

(0.32

)

 

$

1.61

 

(1)

 

Financial results of combined successor and predecessor of the business combination with Replay.

(2)

 

Changes in fair value include changes in fair value of loans and securities held for investment and related obligations, deferred purchase price obligations, warrant liability, and minority investments.

(3)

 

Successor period amortization includes amortization of intangibles recognized from the business combination with Replay and impairment charges to goodwill, intangibles, and certain other long lived assets recognized during the periods presented.

(4)

 

Funded 85% by the non-controlling shareholders.

(5) Certain non-recurring costs relate to various one-time expenses 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 certain one-time charges including amounts recognized for settlement of legal and regulatory matters, acquisition 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

Selected Financial Information

Consolidated Statements of Financial Condition  

(In thousands, except share data)

(Unaudited)

 

December 31, 2022

 

September 30, 2022

 

 

 

 

ASSETS

 

 

 

Cash and cash equivalents

$

97,361

 

 

$

169,072

 

Restricted cash

 

180,075

 

 

 

210,147

 

Loans held for investment, subject to HMBS related obligations, at fair value

 

11,114,100

 

 

 

10,916,551

 

Loans held for investment, subject to nonrecourse debt, at fair value

 

7,454,638

 

 

 

6,741,391

 

Loans held for investment, at fair value

 

907,998

 

 

 

1,307,413

 

Loans held for sale, at fair value

 

315,978

 

 

 

859,650

 

MSR, at fair value, $60,562 and $59,800 subject to nonrecourse MSR financing liability, respectively

 

95,096

 

 

 

103,069

 

Derivative assets

 

2,354

 

 

 

89,899

 

Fixed assets and leasehold improvements, net

 

19,015

 

 

 

19,828

 

Intangible assets, net

 

374,555

 

 

 

438,300

 

Other assets, net

 

311,485

 

 

 

334,577

 

TOTAL ASSETS

$

20,872,655

 

 

$

21,189,897

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

HMBS related obligations, at fair value

$

10,996,755

 

 

$

10,784,841

 

Nonrecourse debt, at fair value (includes amounts due to related parties of $0 and $142,435, respectively)

 

7,343,177

 

 

 

6,745,526

 

Other financing lines of credit

 

1,455,369

 

 

 

2,305,999

 

Payables and other liabilities

 

273,111

 

 

 

395,635

 

Notes payable, net (includes amounts due to related parties of $46,790 and $0, respectively)

 

399,402

 

 

 

382,810

 

TOTAL LIABILITIES

 

20,467,814

 

 

 

20,614,811

 

 

 

 

 

EQUITY

 

 

 

Class A Common Stock, $0.0001 par value; 6,000,000,000 shares authorized; 63,423,356 shares issued and outstanding at December 31, 2022

 

6

 

 

 

6

 

Class B Common Stock, $0.0001 par value; 1,000,000 shares authorized; 14 shares issued and outstanding at December 31, 2022

 

 

 

 

 

Additional paid-in capital

 

888,488

 

 

 

876,140

 

Accumulated deficit

 

(634,295

)

 

 

(577,272

)

Accumulated other comprehensive loss

 

(273

)

 

 

(367

)

Noncontrolling interest

 

150,915

 

 

 

276,579

 

TOTAL EQUITY

 

404,841

 

 

 

575,086

 

TOTAL LIABILITIES AND EQUITY

$

20,872,655

 

 

$

21,189,897

 

Finance of America Companies Inc. and Subsidiaries

Selected Financial Information

Consolidated Statements of Operations
(In thousands, except share data)

 

Q4’22

 

Q3’22

 

Q4’21

 

2022

 

 

2021

 

Successor

 

 

Combined(1)

 

(Unaudited)

 

 

(Unaudited)

REVENUES

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sale and other income from loans held for sale, net

$

(15,318

)

 

$

36,179

 

 

$

166,853

 

 

$

211,018

 

 

 

$

855,859

 

Net fair value gains (losses) on mortgage loans and related obligations

 

98,522

 

 

 

(6,376

)

 

 

88,090

 

 

 

104,194

 

 

 

 

418,413

 

Fee income

 

45,332

 

 

 

70,512

 

 

 

149,476

 

 

 

362,130

 

 

 

 

547,436

 

Net interest expense:

 

 

 

 

 

 

 

 

 

 

Interest income

 

5,888

 

 

 

12,022

 

 

 

14,912

 

 

 

47,636

 

 

 

 

56,586

 

Interest expense

 

(40,837

)

 

 

(41,236

)

 

 

(36,377

)

 

 

(151,737

)

 

 

 

(142,060

)

Net interest expense

 

(34,949

)

 

 

(29,214

)

 

 

(21,465

)

 

 

(104,101

)

 

 

 

(85,474

)

TOTAL REVENUES

 

93,587

 

 

 

71,101

 

 

 

382,954

 

 

 

573,241

 

 

 

 

1,736,234

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

Salaries, benefits, and related expenses

 

113,570

 

 

 

146,385

 

 

 

231,374

 

 

 

663,325

 

 

 

 

1,006,635

 

Occupancy, equipment rentals, and other office related expenses

 

6,286

 

 

 

7,003

 

 

 

8,386

 

 

 

28,389

 

 

 

 

30,986

 

General and administrative expenses

 

95,288

 

 

 

105,533

 

 

 

131,335

 

 

 

456,901

 

 

 

 

519,449

 

TOTAL EXPENSES

 

215,144

 

 

 

258,921

 

 

 

371,095

 

 

 

1,148,615

 

 

 

 

1,557,070

 

IMPAIRMENT OF GOODWILL, INTANGIBLES, AND OTHER ASSETS

 

(54,325

)

 

 

(138,184

)

 

 

(1,380,630

)

 

 

(192,509

)

 

 

 

(1,380,630

)

OTHER, NET

 

(5,403

)

 

 

21,330

 

 

 

6,287

 

 

 

35,831

 

 

 

 

5,250

 

NET LOSS BEFORE INCOME TAXES

 

(181,285

)

 

 

(304,674

)

 

 

(1,362,484

)

 

 

(732,052

)

 

 

 

(1,196,216

)

Provision (benefit) for income taxes

 

725

 

 

 

(2,974

)

 

 

(26,197

)

 

 

(16,524

)

 

 

 

(19,534

)

NET LOSS

 

(182,010

)

 

 

(301,700

)

 

 

(1,336,287

)

 

 

(715,528

)

 

 

 

(1,176,682

)

CRNCI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,260

 

Noncontrolling interest

 

(124,987

)

 

 

(217,214

)

 

 

(940,839

)

 

 

(524,846

)

 

 

 

(929,001

)

NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST

$

(57,023

)

 

$

(84,486

)

 

$

(395,448

)

 

$

(190,682

)

 

 

$

(251,941

)

 

 

 

 

 

 

 

 

 

 

 

LOSS PER SHARE

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

63,204,118

 

 

 

63,204,118

 

 

 

59,806,378

 

 

 

62,298,532

 

 

 

 

N/A

 

Basic net loss per share

$

(0.90

)

 

$

(1.35

)

 

$

(6.61

)

 

$

(3.06

)

 

 

 

N/A

 

Diluted weighted average shares outstanding

 

187,822,266

 

 

 

62,804,809

 

 

 

189,436,869

 

 

 

188,236,513

 

 

 

 

N/A

 

Diluted loss per share

$

(0.77

)

 

$

(1.35

)

 

$

(6.72

)

 

$

(3.12

)

 

 

 

N/A

(1)

 

Financial results of combined successor and predecessor of the business combination with Replay.

Webcast and Conference Call

Management will host a webcast and conference call on Monday, March 13th at 5:00 pm Eastern Time to discuss the Company’s results for the fourth quarter and full year ended December 31, 2022. A copy of the press release and investor presentation 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. 1-844-200-6205 (Domestic)
  2. 1-929-526-1599 (International)
  3. Conference ID: 095724

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 through March 28, 2023. To access the replay, dial 1-866-813-9403 (United States) or +44 204 525 0658 (International). The replay pin number is 148194. 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 specialty finance consumer lending platform that provides customers with access to an innovative range of flexible solutions including reverse mortgages and home improvement loans. In addition, FOA offers complementary lending services to enhance the customer experience, as well as capital markets and portfolio management capabilities to optimize distribution 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.

Contacts

Contacts:
For Finance of America Media: pr@financeofamerica.com
For Finance of America Investor Relations: ir@financeofamerica.com

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