Finance of America Companies Inc. Q3 FY2024 earnings call

• Strategic initiatives and operational efforts over the last year are paying off, with improved financial results and exceeded volume guidance. - Completed a reverse stock split and exchange offer of 2025 unsecured notes, enhancing balance sheet and flexibility. - Unified Finance of America Reverse and AAG brands, streamlining workflows and sales processes. - Retail channel saw 38% productivity improvement in fundings per loan officer. - October 2024 was the largest submission and funding month. - Focus on digital first channel and modern advertising strategy for customer experience and production efficiency. - Expanded HomeSafe Second product to additional states, lowered interest rate, and saw 89% growth in Q3 compared to Q2.

Finance of America generated $204 million in net income or $8.48 in basic earnings per share, $15 million in adjusted net income or $0.67 in adjusted earnings per share, and $32 million of adjusted EBITDA. Volume in the quarter reached $513 million, exceeding the high end of the guidance range of $475 million to $500 million. Revenue increased from $79 million in Q2 to $290 million in Q3. Tangible net worth rose to $231 million or approximately $10 per share. Net portfolio interest income saw a slight decline but was offset by a reduction in fair value changes. Net originations gains increased notably from $40 million to $57 million as originations platform grew in volumes by 15% and margins by 19%. Total expenses decreased, with salaries and benefits and general and administrative expenses reduced.

• Expect adjusted earnings per share between $2.60 to $3 in 2025. - Q4 expected to be in the same ballpark as Q3 volume. - 2025 full-year volume expected to be around $2.7 billion, with sequential growth starting in 2025.

Q: For 2025 volume expectations A: Matt Engel mentioned they did over $500 million in Q3, expect Q4 to be similar, and 2025 full year around $2.7 billion Q: Update on timing and impact of HMBS 2.0 A: Graham Fleming responded but details not fully elaborated in the provided transcript Q: Q4 and seasonality A: Matt Engel said October was highest funding and submission month, Q4 expected similar to Q3 with seasonality affecting Q1, and Kristen Sieffert noted potential growth from traditional mortgage bankers and loan officers tapping into the market