Finance of America Companies Inc. Q4 FY2024 earnings call

Key Initiatives

• 2024 was a year of significant momentum with integration of retail platform, completion of corporate bond exchange, reverse stock split, rationalization of corporate overhead, and increased funding facilities.
• Expanded second lien reverse mortgage to additional states and made it available to wholesale partners in a leading technology platform.
• Overhauled data and reporting infrastructure using AI-driven tools.
• Added new leadership hires like Brian Conneen as Chief Information Officer and Karime Benaissa as Chief Customer Officer.

Financial Improvements

• 2024 GAAP net income was $40 million, adjusted net income $14 million, and adjusted EBITDA $60 million, showing continued operational improvements with a $200 million increase in GAAP net income from 2023 to 2024.

In 2024, reverse loan volumes grew by 19%, driven by strategic initiatives including being the largest issuer of HMBS in 2024 and a 73% increase in non-agency reverse volume year-over-year. The HomeSafe Second product achieved nearly 400% year-over-year growth, scaling significantly. Full-year 2024 funding volume was $1.93 billion, a 19% year-over-year increase. Revenue margins expanded from 9.2% in 2023 on $1.6 billion of production to 10.7% in 2024 on $1.9 billion of production.

Origination Volumes

• Full year 2025 origination volumes expected to be in the range of $2.4 billion to $2.7 billion, a 26% to 42% increase from 2024.

Q1 2025

• Q1 2025 origination volume expected to be between $525 million to $550 million, a 25% to 30% increase from Q1 2024.

Adjusted Net Income

• Reaffirmed full year 2025 adjusted net income projection in the range of $2.60 to $3 per share.

Securitization Milestone

• Successfully completed the largest securitization from non-agency proprietary product in the company's history in February 2025.

Risks

• Market uncertainty and volatility in interest rates which can impact margins and origination volumes.
• Execution risks related to strategic initiatives such as integrating new platforms and launching new products.
• Dependence on favorable demographic trends and ability to capture market share in the home equity space.

Q: Hi, good afternoon. I kind of want to get a little color. I think you guys hit a couple of these points through the prepared remarks. But as I think about the net origination gains number that runs through revenue, Matt, and you mentioned Q1 may look more like Q3 of last year, but was there some pressure on margins just given the rates moving higher created somewhat of a headwind as we move through Q4. And is that trend something we're seeing reversing in Q1? Or can you maybe talk a little bit about the net gain on originations line?

A: Yes. Thanks, Stephen. Yes. I think it's fair to say rates have been a little volatile. There was a little bit of headwind in the Q4 as rates kind of increased. We've seen a lot of that start to decrease here in the first quarter. And we're almost mostly way through the first quarter, we have a pretty good sense of how first quarter shaping up. So we think all in, comparing to third quarter of last year is probably a fair comparison. But the factors you point out, I think are absolutely correct.

Q: Hi, thanks. This is actually Will Masta [ph] on for Doug today. I was just hoping you could give us an update on HECM 2.0 and the progress there given the new administration and the impending changes that are around there. Thanks.

A: Yes, sure. The latest update I have for you on that is Ginnie continued to make progress on the operational side relative to the implementation of HMBS 2.0. They haven't yet communicated an effective date, although based upon our last conversations with them, as soon as they have the appointees in place. They do expect this to move forward. But at this point, they don't have an effective date, although I do know that they continue to make progress and work on the program. I think the last piece that is outstanding is just when we'll go live. So that's the latest update that we have. I'm sorry; I have more clarity around the rollout date for you.