Finance of America Reports Fourth Quarter and Full Year 2022 Results
Finance of America Companies reported a net loss of $716 million for 2022, equivalent to a $3.06 loss per share, primarily due to discontinued operations. An adjusted net loss of $61 million was attributed to divested businesses. The company announced the acquisition of AAG, enhancing its position in reverse mortgage lending, with the deal expected to close on March 31, 2023. The wind-down of the Mortgage Originations segment was completed in February 2023. Despite operational losses, the company is focusing on growth in core segments and expects to benefit from recent strategic moves.
- Acquisition of AAG is expected to strengthen market position in reverse mortgage lending.
- Completed the wind-down of the Mortgage Originations segment, minimizing future losses.
- Net loss of $716 million or $3.06 per share indicates significant financial stress.
- Total equity decreased by 30%, reflecting operational challenges.
– Net loss for the year of
– Adjusted net loss* of
– Announced acquisition of AAG, further strengthening our market position in Reverse Mortgage Lending –
Full Year 2022 Financial Highlights
-
For the full year 2022, the Company recognized a net loss of
$716 million $3.06 $61 million - On an adjusted basis, the full year net loss is entirely attributable to the operational losses associated with the Mortgage Originations, Commercial Originations, and Lender Services segments. These segments are expected to be discontinued or divested by the end of Q2 2023.
-
Announced the acquisition of the assets and operations of AAG, a leading reverse mortgage lender. The transaction has received regulatory approval, is scheduled to close on
March 31, 2023 and is expected to create the leadingU.S. reverse mortgage originator. -
Wind down of Mortgage Originations, announced in the fourth quarter of 2022, was completed in
February 2023 . -
During the first quarter of 2023, the Company announced the execution of definitive agreements for the sale of its
Title Insurance and Commercial Originations businesses.
*See the sections titled “Reconciliation to GAAP” and “Non-GAAP Financial Measures” for reconciliations to the most directly comparable GAAP measures and other important disclosures.
Fourth Quarter Financial Summary
($ 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) |
|
|
|
|
|
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 $72 million -
Securitized loans held for investment (HMBS & nonrecourse) increased by
$911 million -
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 -
Total tangible equity decreased
$107 million $30 million
Segment Results
Reverse Originations
The Reverse Originations segment generates revenue and earnings in the form of net origination gains and origination fees earned on the origination of reverse mortgage loans.
($ 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 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 -
2022 pre-tax income excluding impairment of goodwill, intangibles, and other assets of
$132 million $111 million
Portfolio Management
The Portfolio Management segment generates revenue and earnings in the form of gain on sale of loans, fair value gains or losses, interest income, servicing income, fees for underwriting, advisory and valuation services and other ancillary fees.
($ 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 -
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 $390 million December 31, 2021 .
Lender Services
The Lender Services business generates revenue and earnings in the form of lender service support fees.
($ 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 theSEC onFebruary 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 theSEC onFebruary 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 onFebruary 28, 2023 . Please refer to the Company’s Current Report on Form 8-K filed with theSEC onMarch 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 |
|
| (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). |
Selected Financial Information
Consolidated Statements of Financial Condition
(Unaudited) |
|||||||
|
|
|
|
||||
|
|
|
|
||||
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, |
|
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 |
|
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 |
|
399,402 |
|
|
|
382,810 |
|
TOTAL LIABILITIES |
|
20,467,814 |
|
|
|
20,614,811 |
|
|
|
|
|
||||
EQUITY |
|
|
|
||||
Class A Common Stock, |
|
6 |
|
|
|
6 |
|
Class B Common Stock, |
|
— |
|
|
|
— |
|
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 |
|
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
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
About
Forward-Looking Statements
This release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the
All of these factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is not possible for our management to predict all such factors or to assess the effect of each such new factor on our business. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and any of these statements included herein may prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements, or our objectives and plans will be achieved. Please refer to Risk Factors included in our Annual Report on Form 10-K for the year ended
Non-GAAP Financial Measures
The Company’s management evaluates performance of the Company through the use certain non-GAAP financial measures, including Adjusted Net Income, Adjusted EBITDA, and Adjusted Diluted Earnings per Share.
We define Adjusted Net Income as net income adjusted for change in fair value of loans and securities held for investment due to assumption changes, change in fair value of deferred purchase price obligations (including earnouts and TRA obligations), warrant liability, and minority investments, amortization and other impairments, equity based compensation, and certain non-recurring costs.
We define Adjusted EBITDA as Adjusted Net Income (defined above) adjusted for taxes, interest on non-funding debt and depreciation.
We define Adjusted Diluted Earnings Per Share as Adjusted Net Income (defined above) divided by our weighted average diluted share count, which includes our issued and outstanding Class A Common Stock shares plus Finance of America Equity Capital LLC’s
The presentation of non-GAAP measures is used to enhance investors’ understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with
These non-GAAP financial measures should not be considered as an alternate to (i) net income (loss) or any other performance measures determined in accordance with GAAP or (ii) operating cash flows determine in accordance with GAAP. Adjusted Net Income, Adjusted EBITDA, and Adjusted Diluted Earnings per Share have important limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of the limitations of these metrics are: (i) cash expenditures for future contractual commitments; (ii) cash requirements for working capital needs; (iii) cash requirements for certain tax payments; and (iv) all non-cash income/expense items.
Because of these limitations, Adjusted Net Income, Adjusted EBITDA, and Adjusted Diluted Earnings per Share should not be considered as measures of discretionary cash available to us to invest in the growth of our business or distribute to stockholders. We compensate for these limitations by relying primarily on our GAAP results and using our non-GAAP financial measures only as a supplement. Users of our interim unaudited consolidated financial statements are cautioned not to place undue reliance on our non-GAAP financial measures.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230313005741/en/
Contacts:
For Finance of America Media: pr@financeofamerica.com
For Finance of America Investor Relations: ir@financeofamerica.com
Source:
FAQ
What is the net loss reported by Finance of America for 2022?
How much was the adjusted net loss for Finance of America in 2022?
What notable acquisition did Finance of America announce?
When is the acquisition of AAG expected to close?
What was the basic loss per share for Finance of America in 2022?
