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 (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 |
||||||||||||||||||||
|
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:
- 1-844-200-6205 (Domestic)
- 1-929-526-1599 (International)
- 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