Finance of America Reports Fourth Quarter and Full Year 2024 Results
–
–
– Adjusted EBITDA(2) for the year of
Full Year 2024 Highlights(1)
-
Net income from continuing operations of
or$40 million basic earnings per share for the year.$1.78 -
Adjusted net income(2) of
or$14 million adjusted earnings per share for the year.$0.60 -
Adjusted EBITDA(2) of
for the year.$60 million - 2024 marks a return to profitability for the Company as measured by net income, adjusted net income and adjusted EBITDA.
-
Adjusted net income improved by
compared to full year 2023 due to increased volumes, improved margins and reduced operational expenses.$97 million -
For the year, reverse mortgage funded volume increased
19% including in production in Q4, outpacing the guidance provided.$534 million -
Tangible equity grew by
from the end of 2023 given the Company’s performance following the business transformation.$80 million
(1) The financial information presented in the highlights is for the Company’s continuing operations. |
(2) See the sections titled “Reconciliation to GAAP” and “Non-GAAP Financial Measures” for reconciliations to the most directly comparable GAAP measures and other important disclosures. |
Graham A. Fleming, Chief Executive Officer commented, “As we wrap up 2024, I want to thank our incredible team for their dedication and hard work throughout 2024. Throughout the year, we accomplished numerous strategic objectives that strengthened our balance sheet and enhanced the business, driving the Company’s return to profitability.
“Because of their efforts, Finance of America is excited for the coming year. In 2025, we look forward to building on our momentum, expanding our reach, and driving even greater value for our customers and stakeholders.”
Fourth Quarter and Full Year Financial Summary of Continuing Operations
($ amounts in millions, except per share data) |
|
|
|
Variance (%) |
|
|
|
Variance (%) |
|
|
|
|
|
Variance (%) |
|||||||||||||
|
|
Q4'24 |
|
Q3'24 |
|
Q4'24 vs
|
|
Q4'23 |
|
Q4'24 vs
|
|
|
2024 |
|
|
2023 |
|
|
2024 vs
|
||||||||
Funded volume |
|
$ |
534 |
|
|
$ |
513 |
|
4 |
% |
|
$ |
446 |
|
|
20 |
% |
|
$ |
1,918 |
|
$ |
1,762 |
|
|
9 |
% |
Total revenues |
|
|
(106 |
) |
|
|
290 |
|
(137 |
)% |
|
|
276 |
|
|
(138 |
)% |
|
|
338 |
|
|
234 |
|
|
44 |
% |
Total expenses and other, net |
|
|
96 |
|
|
|
82 |
|
17 |
% |
|
|
95 |
|
|
1 |
% |
|
|
351 |
|
|
392 |
|
|
(10 |
)% |
Pre-tax income (loss) from continuing operations |
|
|
(146 |
) |
|
|
208 |
|
(170 |
)% |
|
|
172 |
|
|
(185 |
)% |
|
|
43 |
|
|
(167 |
) |
|
126 |
% |
Net income (loss) from continuing operations |
|
|
(143 |
) |
|
|
204 |
|
(170 |
)% |
|
|
171 |
|
|
(184 |
)% |
|
|
40 |
|
|
(166 |
) |
|
124 |
% |
Adjusted net income (loss)(1) |
|
|
5 |
|
|
|
15 |
|
(67 |
)% |
|
|
(19 |
) |
|
126 |
% |
|
|
14 |
|
|
(83 |
) |
|
117 |
% |
Adjusted EBITDA(1) |
|
|
18 |
|
|
|
32 |
|
(44 |
)% |
|
|
(17 |
) |
|
206 |
% |
|
|
60 |
|
|
(77 |
) |
|
178 |
% |
Basic earnings (loss) per share |
|
$ |
(5.95 |
) |
|
$ |
8.48 |
|
(170 |
)% |
|
$ |
7.25 |
|
|
(182 |
)% |
|
$ |
1.78 |
|
$ |
(7.48 |
) |
|
124 |
% |
Diluted earnings (loss) per share(2) |
|
$ |
(5.95 |
) |
|
$ |
7.50 |
|
(179 |
)% |
|
$ |
5.56 |
|
|
(207 |
)% |
|
$ |
1.36 |
|
$ |
(7.48 |
) |
|
118 |
% |
Adjusted earnings (loss) per share(1) |
|
$ |
0.21 |
|
|
$ |
0.67 |
|
(69 |
)% |
|
$ |
(0.85 |
) |
|
125 |
% |
|
$ |
0.60 |
|
$ |
(3.81 |
) |
|
116 |
% |
(1) |
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. |
|
(2) |
Calculated using the treasury stock, if-converted, or two-class method, except when anti-dilutive. |
Balance Sheet Highlights
($ amounts in millions)(1) |
|
December 31, |
|
December 31, |
|
Variance (%) |
|||
|
|
|
2024 |
|
|
2023 |
|
2024 vs 2023 |
|
Cash and cash equivalents |
|
$ |
47 |
|
$ |
46 |
|
2 |
% |
Securitized loans held for investment (HMBS & nonrecourse) |
|
|
27,958 |
|
|
25,821 |
|
8 |
% |
Total assets |
|
|
29,156 |
|
|
27,108 |
|
8 |
% |
Total liabilities |
|
|
28,841 |
|
|
26,835 |
|
7 |
% |
Total equity |
|
|
316 |
|
|
272 |
|
16 |
% |
(1) |
Numbers may not foot due to rounding. |
-
During 2024, total equity increased from
to$272 million , reflecting enhanced operational performance and positive fair value adjustments on the Company’s retained interests in securitizations resulting from improving market inputs and model assumptions.$316 million -
Additionally, tangible net worth (calculated as total equity less intangible assets, net) increased from
as of December 31, 2023, to$19 million as of December 31, 2024, an improvement of$99 million 421% .
Segment Results
Retirement Solutions
The Retirement Solutions segment primarily generates revenue and earnings in the form of net origination gains and origination fees earned on the origination of reverse mortgage loans.
|
|
|
|
Variance (%) |
|
|
|
Variance (%) |
|
|
|
|
|
Variance (%) |
||||||||||||
($ amounts in millions) |
|
Q4'24 |
|
Q3'24 |
|
Q4'24 vs
|
|
Q4'23 |
|
Q4'24 vs
|
|
|
2024 |
|
|
2023 |
|
|
2024 vs
|
|||||||
Funded volume |
|
$ |
534 |
|
$ |
513 |
|
4 |
% |
|
$ |
446 |
|
|
20 |
% |
|
$ |
1,918 |
|
$ |
1,762 |
|
|
9 |
% |
Total revenue |
|
|
49 |
|
|
64 |
|
(23 |
)% |
|
|
41 |
|
|
20 |
% |
|
|
206 |
|
|
149 |
|
|
38 |
% |
Pre-tax income (loss) |
|
|
1 |
|
|
16 |
|
(94 |
)% |
|
|
(13 |
) |
|
108 |
% |
|
|
11 |
|
|
(60 |
) |
|
118 |
% |
Adjusted net income (loss)(1) |
|
|
8 |
|
|
19 |
|
(58 |
)% |
|
|
(2 |
) |
|
500 |
% |
|
|
38 |
|
|
(12 |
) |
|
417 |
% |
(1) |
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. |
-
For the year, the segment recognized pre-tax income of
and adjusted net income of$11 million as a result of increased volumes, improved margins and reduced expenses.$38 million -
Compared to 2023, total revenue increased by
38% , primarily due to an increase in revenue margin and funded volume, which led to a118% improvement in pre-tax income and a417% improvement in adjusted net income. -
Total expenses decreased from 2023 from
to$209 million as the business completed the integration of the retail platform and streamlined business operations.$195 million
Portfolio Management
The Portfolio Management segment primarily generates revenue and earnings in the form of net interest income and fair value changes on our portfolio assets, monetized through securitization, sale, or other financing of those assets.
|
|
|
|
Variance (%) |
|
|
|
Variance (%) |
|
|
|
|
|
Variance (%) |
|||||||||||
($ amounts in millions) |
|
Q4'24 |
|
Q3'24 |
|
Q4'24 vs
|
|
Q4'23 |
|
Q4'24 vs
|
|
|
2024 |
|
|
2023 |
|
2024 vs
|
|||||||
Assets under management |
|
$ |
28,877 |
|
|
$ |
28,659 |
|
1 |
% |
|
$ |
26,773 |
|
8 |
% |
|
$ |
28,877 |
|
$ |
26,773 |
|
8 |
% |
Assets excluding HMBS and nonrecourse obligations |
|
|
1,479 |
|
|
|
1,830 |
|
(19 |
)% |
|
|
1,515 |
|
(2 |
)% |
|
|
1,479 |
|
|
1,515 |
|
(2 |
)% |
Total revenue |
|
|
(142 |
) |
|
|
235 |
|
(160 |
)% |
|
|
240 |
|
(159 |
)% |
|
|
172 |
|
|
115 |
|
50 |
% |
Pre-tax income (loss) |
|
|
(168 |
) |
|
|
217 |
|
(177 |
)% |
|
|
217 |
|
(177 |
)% |
|
|
84 |
|
|
25 |
|
236 |
% |
Adjusted net income(1) |
|
|
13 |
|
|
|
12 |
|
8 |
% |
|
|
— |
|
N/A |
|
|
|
42 |
|
|
7 |
|
500 |
% |
(1) |
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. |
-
For the year, the segment recognized pre-tax income of
, an improvement against the prior year due to positive fair value adjustments of retained interests in securitizations, resulting from market inputs and model assumptions, combined with an increase in accreted yield on the Company’s residual interests.$84 million -
Adjusted net income during 2024 totaled
, an increase of$42 million year over year, primarily driven by an increase in accreted yield on the Company’s residual interests.$35 million
Finance of America Companies Inc. |
|||||||
Selected Financial Information |
|||||||
Consolidated Statements of Financial Condition |
|||||||
(in thousands, except share data) |
|||||||
(unaudited) |
|||||||
|
December 31, 2024 |
|
December 31, 2023 |
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
47,383 |
|
|
$ |
46,482 |
|
Restricted cash |
|
254,585 |
|
|
|
178,319 |
|
Loans held for investment, subject to HMBS related obligations, at fair value |
|
18,669,962 |
|
|
|
17,548,763 |
|
Loans held for investment, subject to nonrecourse debt, at fair value |
|
9,288,403 |
|
|
|
8,272,393 |
|
Loans held for investment, at fair value |
|
520,103 |
|
|
|
575,228 |
|
Intangible assets, net |
|
216,342 |
|
|
|
253,531 |
|
Other assets, net |
|
157,261 |
|
|
|
226,153 |
|
Assets of discontinued operations |
|
2,451 |
|
|
|
6,721 |
|
TOTAL ASSETS |
$ |
29,156,490 |
|
|
$ |
27,107,590 |
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
||||
HMBS related obligations, at fair value |
$ |
18,444,370 |
|
|
$ |
17,353,720 |
|
Nonrecourse debt, at fair value |
|
8,954,068 |
|
|
|
7,904,200 |
|
Other financing lines of credit |
|
918,247 |
|
|
|
928,479 |
|
Notes payable, net (includes amounts due to related parties of |
|
374,511 |
|
|
|
410,911 |
|
Payables and other liabilities |
|
137,953 |
|
|
|
219,569 |
|
Liabilities of discontinued operations |
|
11,677 |
|
|
|
18,304 |
|
TOTAL LIABILITIES |
|
28,840,826 |
|
|
|
26,835,183 |
|
|
|
|
|
||||
EQUITY |
|
|
|
||||
Class A Common Stock, |
|
1 |
|
|
|
1 |
|
Class B Common Stock, |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
954,469 |
|
|
|
946,938 |
|
Accumulated deficit |
|
(698,895 |
) |
|
|
(714,383 |
) |
Accumulated other comprehensive loss |
|
(276 |
) |
|
|
(249 |
) |
Noncontrolling interest |
|
60,365 |
|
|
|
40,100 |
|
TOTAL EQUITY |
|
315,664 |
|
|
|
272,407 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
29,156,490 |
|
|
$ |
27,107,590 |
|
Finance of America Companies Inc. |
|||||||||||||||||||
Selected Financial Information |
|||||||||||||||||||
Consolidated Statements of Operations |
|||||||||||||||||||
(in thousands, except share data) |
|||||||||||||||||||
(unaudited) |
|||||||||||||||||||
|
Q4'24 |
|
Q3'24 |
|
Q4'23 |
|
|
2024 |
|
|
|
2023 |
|
||||||
PORTFOLIO INTEREST INCOME |
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
$ |
473,244 |
|
|
$ |
489,900 |
|
|
$ |
459,253 |
|
|
$ |
1,905,214 |
|
|
$ |
1,628,877 |
|
Interest expense |
|
(404,025 |
) |
|
|
(426,839 |
) |
|
|
(390,570 |
) |
|
|
(1,637,286 |
) |
|
|
(1,360,998 |
) |
NET PORTFOLIO INTEREST INCOME |
|
69,219 |
|
|
|
63,061 |
|
|
|
68,683 |
|
|
|
267,928 |
|
|
|
267,879 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
||||||||||
Net origination gains |
|
42,704 |
|
|
|
57,216 |
|
|
|
32,869 |
|
|
|
179,837 |
|
|
|
121,646 |
|
Gain on securitization of HECM tails, net |
|
13,218 |
|
|
|
10,560 |
|
|
|
8,488 |
|
|
|
45,535 |
|
|
|
25,583 |
|
Fair value changes from model amortization |
|
(51,927 |
) |
|
|
(43,753 |
) |
|
|
(66,005 |
) |
|
|
(201,101 |
) |
|
|
(228,391 |
) |
Fair value changes from market inputs or model assumptions |
|
(173,052 |
) |
|
|
204,154 |
|
|
|
230,864 |
|
|
|
55,924 |
|
|
|
58,696 |
|
Net fair value changes on loans and related obligations |
|
(169,057 |
) |
|
|
228,177 |
|
|
|
206,216 |
|
|
|
80,195 |
|
|
|
(22,466 |
) |
Fee income |
|
7,074 |
|
|
|
8,054 |
|
|
|
10,073 |
|
|
|
29,244 |
|
|
|
43,450 |
|
Gain (loss) on sale and other income from loans held for sale, net |
|
— |
|
|
|
— |
|
|
|
(1,530 |
) |
|
|
302 |
|
|
|
(24,994 |
) |
Non-funding interest expense, net |
|
(12,859 |
) |
|
|
(9,219 |
) |
|
|
(7,710 |
) |
|
|
(39,498 |
) |
|
|
(29,619 |
) |
NET OTHER INCOME (EXPENSE) |
|
(174,842 |
) |
|
|
227,012 |
|
|
|
207,049 |
|
|
|
70,243 |
|
|
|
(33,629 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL REVENUES |
|
(105,623 |
) |
|
|
290,073 |
|
|
|
275,732 |
|
|
|
338,171 |
|
|
|
234,250 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EXPENSES |
|
|
|
|
|
|
|
|
|
||||||||||
Salaries, benefits, and related expenses |
|
33,201 |
|
|
|
31,083 |
|
|
|
37,850 |
|
|
|
138,360 |
|
|
|
178,319 |
|
Loan production and portfolio related expenses |
|
14,984 |
|
|
|
6,946 |
|
|
|
5,194 |
|
|
|
36,205 |
|
|
|
26,490 |
|
Loan servicing expenses |
|
7,701 |
|
|
|
7,772 |
|
|
|
7,455 |
|
|
|
31,323 |
|
|
|
30,729 |
|
Marketing and advertising expenses |
|
9,886 |
|
|
|
10,325 |
|
|
|
9,729 |
|
|
|
39,429 |
|
|
|
31,896 |
|
Depreciation and amortization |
|
9,739 |
|
|
|
9,777 |
|
|
|
9,939 |
|
|
|
38,947 |
|
|
|
42,369 |
|
General and administrative expenses |
|
11,545 |
|
|
|
14,405 |
|
|
|
22,632 |
|
|
|
59,462 |
|
|
|
82,204 |
|
TOTAL EXPENSES |
|
87,056 |
|
|
|
80,308 |
|
|
|
92,799 |
|
|
|
343,726 |
|
|
|
392,007 |
|
IMPAIRMENT OF INTANGIBLES AND OTHER ASSETS |
|
(291 |
) |
|
|
— |
|
|
|
(8,738 |
) |
|
|
(891 |
) |
|
|
(9,296 |
) |
GAIN ON EXTINGUISHMENT OF DEBT |
|
56,193 |
|
|
|
— |
|
|
|
— |
|
|
|
56,193 |
|
|
|
— |
|
OTHER, NET |
|
(9,032 |
) |
|
|
(1,592 |
) |
|
|
(2,641 |
) |
|
|
(6,931 |
) |
|
|
211 |
|
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
|
(145,809 |
) |
|
|
208,173 |
|
|
|
171,554 |
|
|
|
42,816 |
|
|
|
(166,842 |
) |
Provision (benefit) for income taxes from continuing operations |
|
(3,180 |
) |
|
|
4,425 |
|
|
|
193 |
|
|
|
2,398 |
|
|
|
(593 |
) |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
|
(142,629 |
) |
|
|
203,748 |
|
|
|
171,361 |
|
|
|
40,418 |
|
|
|
(166,249 |
) |
NET LOSS FROM DISCONTINUED OPERATIONS |
|
— |
|
|
|
— |
|
|
|
(6,698 |
) |
|
|
(4,727 |
) |
|
|
(51,909 |
) |
NET INCOME (LOSS) |
|
(142,629 |
) |
|
|
203,748 |
|
|
|
164,663 |
|
|
|
35,691 |
|
|
|
(218,158 |
) |
Noncontrolling interest |
|
(83,541 |
) |
|
|
119,545 |
|
|
|
103,302 |
|
|
|
20,203 |
|
|
|
(138,070 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST |
$ |
(59,088 |
) |
|
$ |
84,203 |
|
|
$ |
61,361 |
|
|
$ |
15,488 |
|
|
$ |
(80,088 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
EARNINGS (LOSS) PER SHARE |
|
|
|
|
|
|
|
|
|
||||||||||
Basic weighted average shares outstanding |
|
9,930,520 |
|
|
|
9,924,671 |
|
|
|
8,842,579 |
|
|
|
9,850,903 |
|
|
|
8,197,753 |
|
Basic earnings (loss) per share from continuing operations |
$ |
(5.95 |
) |
|
$ |
8.48 |
|
|
$ |
7.25 |
|
|
$ |
1.78 |
|
|
$ |
(7.48 |
) |
Basic earnings (loss) per share |
$ |
(5.95 |
) |
|
$ |
8.48 |
|
|
$ |
6.94 |
|
|
$ |
1.57 |
|
|
$ |
(9.77 |
) |
Diluted weighted average shares outstanding |
|
9,930,520 |
|
|
|
23,159,304 |
|
|
|
22,930,088 |
|
|
|
23,406,233 |
|
|
|
8,197,753 |
|
Diluted earnings (loss) per share from continuing operations |
$ |
(5.95 |
) |
|
$ |
7.50 |
|
|
$ |
5.56 |
|
|
$ |
1.36 |
|
|
$ |
(7.48 |
) |
Diluted earnings (loss) per share |
$ |
(5.95 |
) |
|
$ |
7.50 |
|
|
$ |
5.35 |
|
|
$ |
1.18 |
|
|
$ |
(9.77 |
) |
Reconciliation to GAAP
($ amounts in millions)(1) |
Q4'24 |
|
Q3'24 |
|
Q4'23 |
|
|
2024 |
|
|
|
2023 |
|
||||||
Reconciliation of net income (loss) from continuing operations to adjusted net income (loss) and adjusted EBITDA |
|||||||||||||||||||
Net income (loss) from continuing operations |
$ |
(143 |
) |
|
$ |
204 |
|
|
$ |
171 |
|
|
$ |
40 |
|
|
$ |
(166 |
) |
Add back: (Provision) benefit for income taxes |
|
3 |
|
|
|
(4 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
1 |
|
Net income (loss) from continuing operations before taxes |
|
(146 |
) |
|
|
208 |
|
|
|
172 |
|
|
|
43 |
|
|
|
(167 |
) |
Adjustments for: |
|
|
|
|
|
|
|
|
|
||||||||||
Changes in fair value(2) |
|
141 |
|
|
|
(198 |
) |
|
|
(221 |
) |
|
|
(75 |
) |
|
|
(24 |
) |
Amortization or impairment of intangibles and impairment of other assets(3) |
|
10 |
|
|
|
9 |
|
|
|
17 |
|
|
|
38 |
|
|
|
44 |
|
Equity-based compensation(4) |
|
2 |
|
|
|
2 |
|
|
|
4 |
|
|
|
9 |
|
|
|
19 |
|
Certain non-recurring costs(5) |
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
4 |
|
|
|
14 |
|
Adjusted net income (loss) before taxes |
|
7 |
|
|
|
21 |
|
|
|
(26 |
) |
|
|
19 |
|
|
|
(113 |
) |
Benefit (provision) for income taxes(6) |
|
(2 |
) |
|
|
(6 |
) |
|
|
7 |
|
|
|
(5 |
) |
|
|
30 |
|
Adjusted net income (loss) |
|
5 |
|
|
|
15 |
|
|
|
(19 |
) |
|
|
14 |
|
|
|
(83 |
) |
Provision (benefit) for income taxes(6) |
|
2 |
|
|
|
6 |
|
|
|
(7 |
) |
|
|
5 |
|
|
|
(30 |
) |
Depreciation |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
2 |
|
|
|
5 |
|
Interest expense on non-funding debt |
|
11 |
|
|
|
10 |
|
|
|
8 |
|
|
|
39 |
|
|
|
31 |
|
Adjusted EBITDA |
$ |
18 |
|
|
$ |
32 |
|
|
$ |
(17 |
) |
|
$ |
60 |
|
|
$ |
(77 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
($ amounts in millions except shares and $/share) |
Q4'24 |
|
Q3'24 |
|
Q4'23 |
|
|
2024 |
|
|
|
2023 |
|
||||||
GAAP PER SHARE MEASURES |
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) from continuing operations attributable to controlling interest |
$ |
(59 |
) |
|
$ |
84 |
|
|
$ |
64 |
|
|
$ |
17 |
|
|
$ |
(61 |
) |
Weighted average outstanding share count |
|
9,930,520 |
|
|
|
9,924,671 |
|
|
|
8,842,579 |
|
|
|
9,850,903 |
|
|
|
8,197,753 |
|
Basic earnings (loss) per share from continuing operations |
$ |
(5.95 |
) |
|
$ |
8.48 |
|
|
$ |
7.25 |
|
|
$ |
1.78 |
|
|
$ |
(7.48 |
) |
If-converted method net income (loss) from continuing operations |
$ |
(59 |
) |
|
$ |
174 |
|
|
$ |
128 |
|
|
$ |
32 |
|
|
$ |
(61 |
) |
Weighted average diluted share count |
|
9,930,520 |
|
|
|
23,159,304 |
|
|
|
22,930,088 |
|
|
|
23,406,233 |
|
|
|
8,197,753 |
|
Diluted earnings (loss) per share from continuing operations(7) |
$ |
(5.95 |
) |
|
$ |
7.50 |
|
|
$ |
5.56 |
|
|
$ |
1.36 |
|
|
$ |
(7.48 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
NON-GAAP PER SHARE MEASURES |
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income (loss) |
$ |
5 |
|
|
$ |
15 |
|
|
$ |
(19 |
) |
|
$ |
14 |
|
|
$ |
(83 |
) |
Weighted average share count |
|
24,429,615 |
|
|
|
23,159,304 |
|
|
|
22,930,088 |
|
|
|
23,406,233 |
|
|
|
21,905,125 |
|
Adjusted earnings (loss) per share |
$ |
0.21 |
|
|
$ |
0.67 |
|
|
$ |
(0.85 |
) |
|
$ |
0.60 |
|
|
$ |
(3.81 |
) |
(1) |
Totals may not foot due to rounding. |
|
(2) |
Changes in fair value include changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions, deferred purchase price obligations, contingent earnout, warrant liability, minority investments, and the exchange of our senior notes. |
|
(3) |
Includes amortization or impairment of intangibles and impairment of certain other long-lived assets. |
|
(4) |
Beginning with the third quarter of 2024, the Company revised its definitions of adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share to adjust for all non-cash equity-based compensation in this line item, excluding forfeitures and accelerations associated with restructuring activities, which are included in certain non-recurring costs. Prior to the third quarter of 2024, only equity-based compensation for Replacement Restricted Stock Units (“RSUs”) and Earnout Right RSUs were included in our adjustments. As a result of this change, prior period amounts have been recast to reflect the updated presentation. Adjusted net loss decreased |
|
(5) |
Reflects certain non-recurring costs 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 amounts recognized for settlement of legal and regulatory matters, acquisition or divestiture-related expenses, and other one-time charges. |
|
(6) |
Income tax provision (benefit) adjustments to apply an effective combined corporate tax rate to adjusted net income (loss) before taxes. |
|
(7) |
Calculated using the treasury stock, if-converted, or two-class method, except when anti-dilutive. |
Adjusted Net Income by Segment (Continuing Operations)
|
|
||||||||||
For the three months ended December 31, 2024 |
|
|
|||||||||
($ amounts in millions except shares and $ per share)(1) |
Retirement
|
Portfolio
|
Corporate
|
FOA |
|||||||
Pre-tax income (loss) |
$ |
1 |
$ |
(168 |
) |
$ |
22 |
|
$ |
(146 |
) |
Adjustments for: |
|
|
|
|
|||||||
Changes in fair value(2) |
|
— |
|
185 |
|
|
(44 |
) |
|
141 |
|
Amortization or impairment of intangibles and impairment of other assets(3) |
|
10 |
|
— |
|
|
— |
|
|
10 |
|
Equity-based compensation(4) |
|
— |
|
— |
|
|
2 |
|
|
2 |
|
Adjusted net income (loss) before taxes |
$ |
10 |
$ |
17 |
|
$ |
(21 |
) |
$ |
7 |
|
Provision (benefit) for income taxes(6) |
|
3 |
|
5 |
|
|
(6 |
) |
|
2 |
|
Adjusted net income (loss) |
$ |
8 |
$ |
13 |
|
$ |
(15 |
) |
$ |
5 |
|
Weighted average share count |
|
24,429,615 |
|
24,429,615 |
|
|
24,429,615 |
|
|
24,429,615 |
|
Adjusted earnings (loss) per share |
$ |
0.31 |
$ |
0.52 |
|
$ |
(0.61 |
) |
$ |
0.21 |
|
|
|
||||||||||
For the three months ended September 30, 2024 |
|
|
|||||||||
($ amounts in millions except shares and $ per share)(1) |
Retirement
|
Portfolio
|
Corporate
|
FOA |
|||||||
Pre-tax income (loss) |
$ |
16 |
$ |
217 |
|
$ |
(24 |
) |
$ |
208 |
|
Adjustments for: |
|
|
|
|
|||||||
Changes in fair value(2) |
|
— |
|
(200 |
) |
|
2 |
|
|
(198 |
) |
Amortization or impairment of intangibles and impairment of other assets(3) |
|
9 |
|
— |
|
|
— |
|
|
9 |
|
Equity-based compensation(4) |
|
— |
|
— |
|
|
1 |
|
|
2 |
|
Adjusted net income (loss) before taxes |
$ |
25 |
$ |
17 |
|
$ |
(21 |
) |
$ |
21 |
|
Provision (benefit) for income taxes(6) |
|
7 |
|
4 |
|
|
(5 |
) |
|
6 |
|
Adjusted net income (loss) |
$ |
19 |
$ |
12 |
|
$ |
(16 |
) |
$ |
15 |
|
Weighted average share count |
|
23,159,304 |
|
23,159,304 |
|
|
23,159,304 |
|
|
23,159,304 |
|
Adjusted earnings (loss) per share |
$ |
0.81 |
$ |
0.53 |
|
$ |
(0.67 |
) |
$ |
0.67 |
|
|
|
|||||||||||
For the three months ended December 31, 2023 |
|
|
||||||||||
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
FOA |
||||||||
Pre-tax income (loss) |
$ |
(13 |
) |
$ |
217 |
|
$ |
(33 |
) |
$ |
172 |
|
Adjustments for: |
|
|
|
|
||||||||
Changes in fair value(2) |
|
— |
|
|
(224 |
) |
|
3 |
|
|
(221 |
) |
Amortization or impairment of intangibles and impairment of other assets(3) |
|
9 |
|
|
6 |
|
|
1 |
|
|
17 |
|
Equity-based compensation(4) |
|
1 |
|
|
— |
|
|
3 |
|
|
4 |
|
Certain non-recurring costs(5) |
|
— |
|
|
— |
|
|
2 |
|
|
2 |
|
Adjusted net loss before taxes |
$ |
(3 |
) |
$ |
— |
|
$ |
(24 |
) |
$ |
(26 |
) |
Benefit for income taxes(6) |
|
(1 |
) |
|
— |
|
|
(6 |
) |
|
(7 |
) |
Adjusted net loss |
$ |
(2 |
) |
$ |
— |
|
$ |
(18 |
) |
$ |
(19 |
) |
Weighted average share count |
|
22,930,088 |
|
|
22,930,088 |
|
|
22,930,088 |
|
|
22,930,088 |
|
Adjusted loss per share |
$ |
(0.09 |
) |
$ |
— |
|
$ |
(0.77 |
) |
$ |
(0.85 |
) |
|
|
||||||||||
For the year ended December 31, 2024 |
|
|
|||||||||
($ amounts in millions except shares and $ per share)(1) |
Retirement
|
Portfolio
|
Corporate
|
FOA |
|||||||
Pre-tax income (loss) |
$ |
11 |
$ |
84 |
|
$ |
(52 |
) |
$ |
43 |
|
Adjustments for: |
|
|
|
|
|||||||
Changes in fair value(2) |
|
— |
|
(28 |
) |
|
(47 |
) |
|
(75 |
) |
Amortization or impairment of intangibles and impairment of other assets(3) |
|
37 |
|
— |
|
|
1 |
|
|
38 |
|
Equity-based compensation(4) |
|
1 |
|
1 |
|
|
7 |
|
|
9 |
|
Certain non-recurring costs(5) |
|
2 |
|
— |
|
|
2 |
|
|
4 |
|
Adjusted net income (loss) before taxes |
$ |
51 |
$ |
57 |
|
$ |
(89 |
) |
$ |
19 |
|
Provision (benefit) for income taxes(6) |
|
13 |
|
15 |
|
|
(23 |
) |
|
5 |
|
Adjusted net income (loss) |
$ |
38 |
$ |
42 |
|
$ |
(66 |
) |
$ |
14 |
|
Weighted average share count |
|
23,406,233 |
|
23,406,233 |
|
|
23,406,233 |
|
|
23,406,233 |
|
Adjusted earnings (loss) per share |
$ |
1.62 |
$ |
1.79 |
|
$ |
(2.82 |
) |
$ |
0.60 |
|
|
|
|||||||||||
For the year ended December 31, 2023 |
|
|
||||||||||
($ amounts in millions except shares and $ per share)(1) |
Retirement
|
Portfolio
|
Corporate
|
FOA |
||||||||
Pre-tax income (loss) |
$ |
(60 |
) |
$ |
25 |
|
$ |
(132 |
) |
$ |
(167 |
) |
Adjustments for: |
|
|
|
|
||||||||
Changes in fair value(2) |
|
— |
|
|
(24 |
) |
|
— |
|
|
(24 |
) |
Amortization or impairment of intangibles and impairment of other assets(3) |
|
37 |
|
|
6 |
|
|
1 |
|
|
44 |
|
Equity-based compensation(4) |
|
4 |
|
|
2 |
|
|
13 |
|
|
19 |
|
Certain non-recurring costs(5) |
|
3 |
|
|
1 |
|
|
10 |
|
|
14 |
|
Adjusted net income (loss) before taxes |
$ |
(16 |
) |
$ |
9 |
|
$ |
(106 |
) |
$ |
(113 |
) |
Provision (benefit) for income taxes(6) |
|
(4 |
) |
|
2 |
|
|
(28 |
) |
|
(30 |
) |
Adjusted net income (loss) |
$ |
(12 |
) |
$ |
7 |
|
$ |
(78 |
) |
$ |
(83 |
) |
Weighted average share count |
|
21,905,125 |
|
|
21,905,125 |
|
|
21,905,125 |
|
|
21,905,125 |
|
Adjusted earnings (loss) per share |
$ |
(0.55 |
) |
$ |
0.32 |
|
$ |
(3.57 |
) |
$ |
(3.81 |
) |
(1) |
Totals may not foot due to rounding. |
|
(2) |
Changes in fair value include changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions, deferred purchase price obligations, contingent earnout, warrant liability, minority investments, and the exchange of our senior notes. |
|
(3) |
Includes amortization or impairment of intangibles and impairment of certain other long-lived assets. |
|
(4) |
Beginning with the third quarter of 2024, the Company revised its definitions of adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share to adjust for all non-cash equity-based compensation in this line item, excluding forfeitures and accelerations associated with restructuring activities, which are included in certain non-recurring costs. Prior to the third quarter of 2024, only equity-based compensation for Replacement RSUs and Earnout Right RSUs were included in our adjustments. As a result of this change, prior period amounts have been recast to reflect the updated presentation. |
|
(5) |
Reflects certain non-recurring costs 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 amounts recognized for settlement of legal and regulatory matters, acquisition or divestiture-related expenses, and other one-time charges. |
|
(6) |
Income tax provision (benefit) adjustments to apply an effective combined corporate tax rate to adjusted net income (loss) before taxes. |
Webcast and Conference Call
Management will host a webcast and conference call on Tuesday, March 11th at 5:00 pm Eastern Time to discuss the Company’s results for the fourth quarter and full year ended December 31, 2024. A copy of this press release, along with a supplemental presentation, will be posted prior to the call under the “Investors” section on Finance of America’s website at https://ir.financeofamericacompanies.com/.
To listen to the audio webcast of the conference call, please visit the “Investors” section of the Company's website at https://ir.financeofamericacompanies.com/. The conference call can also be accessed by dialing the following:
- 1-800-715-9871 (Domestic)
- 1-646-307-1963 (International)
- Conference ID: 5706924
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 until March 25, 2025. To access the replay, visit the “Investors” section of the Company’s website at https://ir.financeofamericacompanies.com/. The replay can also be accessed by dialing 1-800-770-2030 (
About Finance of America
Finance of America (NYSE: FOA) is a leading provider of home equity-based financing solutions for a modern retirement. In addition, Finance of America offers capital markets and portfolio management capabilities primarily to optimize the distribution of its originated loans to investors. Finance of America is headquartered in
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 December 31, 2023, filed with the
Non-GAAP Financial Measures
The Company’s management evaluates performance of the Company through the use of certain measures that are not prepared in accordance with
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 alternative to net income (loss), operating cash flows, or any other performance measures determined in accordance with
Because of these limitations, adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) 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 shareholders. We compensate for these limitations by relying primarily on our
Change in Non-GAAP Measures
Prior to the third quarter of 2024, the Company’s adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share were adjusted for equity-based compensation for only the Replacement RSUs and Earnout Right RSUs. Beginning with the third quarter of 2024, the Company revised its definitions of adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share to adjust for all non-cash equity-based compensation in the aforementioned non-GAAP measures. As a result of the change, prior period amounts have been recast to reflect the updated presentation.
Subsequent to granting the Replacement RSUs and Earnout Right RSUs, the Company has granted other equity-based awards. As these awards are non-cash expenses that are not directly correlated with operating results, the Company believes that analysts, investors, and other users of the financial statements may find this change beneficial when analyzing its operating performance and comparability to peers.
Adjusted Net Income (Loss)
We define adjusted net income (loss) as consolidated net income (loss) from continuing operations adjusted for:
- Income taxes
- Changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions, deferred purchase price obligations, contingent earnout, warrant liability, minority investments, and the exchange of our senior notes.
- Amortization or impairment of intangibles and impairment of certain other long-lived assets.
- Equity-based compensation, excluding forfeitures and accelerations associated with restructuring activities, which are included in certain non-recurring costs.
- Certain non-recurring costs 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 amounts recognized for settlement of legal and regulatory matters, acquisition or divestiture-related expenses, and other one-time charges.
- Pro-forma income tax benefit (provision) adjustments to apply an effective combined corporate tax rate to adjusted net income (loss) before income taxes.
Management considers adjusted net income (loss) important in evaluating our Company as a whole. This supplemental metric is utilized by our management team to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use this measure when analyzing our operating performance and comparability to peers. Adjusted net income (loss) is not a presentation made in accordance with
Adjusted net income (loss) provides visibility to the underlying operating performance by excluding the impact of certain items that management does not believe are representative of our core earnings. Adjusted net income (loss) may also include other adjustments, as applicable, based upon facts and circumstances, consistent with our intent of providing a supplemental means of evaluating our operating performance.
Adjusted EBITDA
We define adjusted EBITDA as net income (loss) from continuing operations adjusted for:
- Income taxes
- Changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions, deferred purchase price obligations, contingent earnout, warrant liability, minority investments, and the exchange of our senior notes.
- Amortization or impairment of intangibles and impairment of certain other long-lived assets.
- Equity-based compensation, excluding forfeitures and accelerations associated with restructuring activities, which are included in certain non-recurring costs.
- Certain non-recurring costs 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 amounts recognized for settlement of legal and regulatory matters, acquisition or divestiture-related expenses, and other one-time charges.
- Depreciation
- Interest expense on non-funding debt, excluding amortization of the discount related to our senior notes.
Management considers adjusted EBITDA important in evaluating the Company as a whole. This supplemental metric is utilized by our management team to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use this measure when analyzing our operating performance and comparability to peers. Adjusted EBITDA is not a presentation made in accordance with
Adjusted EBITDA provides visibility to the underlying operating performance by excluding the impact of certain items that management does not believe are representative of our core earnings. Adjusted EBITDA may also include other adjustments, as applicable, based upon facts and circumstances, consistent with our intent of providing a supplemental means of evaluating our operating performance.
Adjusted Earnings (Loss) Per Share
We define adjusted earnings (loss) per share as adjusted net income (loss) (defined above) divided by the weighted average shares outstanding, which includes outstanding Class A Common Stock plus the Class A Units of Finance of America Equity Capital owned by the noncontrolling interest on an if-converted basis, the exchange of the Exchangeable Secured Notes on an if-converted basis if they are dilutive, and any shares under the treasury stock method.
Management considers adjusted earnings (loss) per share important in evaluating the Company as a whole. This supplemental metric is utilized by our management team to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use this measure when analyzing our operating performance and comparability to peers. Adjusted earnings (loss) per share is not a presentation made in accordance with
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Source: Finance of America Companies Inc.