Finance of America Reports Third Quarter 2024 Results
Finance of America (NYSE: FOA) reported strong Q3 2024 results with net income from continuing operations of $204 million or $8.48 basic earnings per share. The company achieved adjusted net income of $15 million ($0.67 per share) and adjusted EBITDA of $32 million. Total funded volume increased 15% quarter-over-quarter to $513 million. Book equity rose to $456 million ($20 per diluted share). The company completed a reverse stock split in July 2024 to maintain NYSE compliance and successfully closed an exchange offer with nearly 98% participation from senior unsecured note holders.
Finance of America (NYSE: FOA) ha riportato risultati solidi per il terzo trimestre del 2024, con un reddito netto dalle operazioni continuative di 204 milioni di dollari, pari a 8,48 dollari per azione base. L'azienda ha raggiunto un reddito netto rettificato di 15 milioni di dollari (0,67 dollari per azione) e un EBITDA rettificato di 32 milioni di dollari. Il volume totale finanziato è aumentato del 15% rispetto al trimestre precedente, raggiungendo i 513 milioni di dollari. Il capitale di libro è salito a 456 milioni di dollari (20 dollari per azione diluita). L'azienda ha completato una divisione azionaria inversa a luglio 2024 per mantenere la conformità con il NYSE e ha chiuso con successo un'offerta di scambio con una partecipazione di quasi il 98% da parte dei detentori di obbligazioni senior non garantite.
Finance of America (NYSE: FOA) reportó resultados sólidos para el tercer trimestre de 2024, con un ingreso neto de las operaciones continuas de 204 millones de dólares, o 8,48 dólares por acción básica. La compañía alcanzó un ingreso neto ajustado de 15 millones de dólares (0,67 dólares por acción) y un EBITDA ajustado de 32 millones de dólares. El volumen total financiado aumentó un 15% en comparación con el trimestre anterior, alcanzando los 513 millones de dólares. El patrimonio contable aumentó a 456 millones de dólares (20 dólares por acción diluida). La compañía completó una división de acciones inversa en julio de 2024 para mantener la conformidad con el NYSE y cerró con éxito una oferta de intercambio con casi el 98% de participación de los tenedores de bonos senior no garantizados.
Finance of America (NYSE: FOA)는 2024년 3분기 강력한 실적을 보고했으며, 계속 운영 중인 순이익은 2억 4천만 달러로, 기본 주당 이익은 8.48달러입니다. 이 회사는 조정된 순이익 1천5백만 달러(주당 0.67달러)와 조정된 EBITDA 3천2백만 달러를 기록했습니다. 총 자금 지원 금액은 전분기 대비 15% 증가하여 5억 1천3백만 달러에 달했습니다. 장부 자본은 4억 5천6백만 달러(희석 주당 20달러)로 증가했습니다. 이 회사는 2024년 7월 NYSE 규정을 유지하기 위해 주식 분할을 완료했고, 98%에 가까운 참여율로 선순위 무담보 채권자들과의 교환 제안을 성공적으로 마쳤습니다.
Finance of America (NYSE: FOA) a annoncé d'excellents résultats pour le troisième trimestre 2024, avec un revenu net des opérations continues de 204 millions de dollars, soit 8,48 dollars par action de base. La société a atteint un revenu net ajusté de 15 millions de dollars (0,67 dollars par action) et un EBITDA ajusté de 32 millions de dollars. Le volume total financé a augmenté de 15 % par rapport au trimestre précédent, atteignant 513 millions de dollars. Les capitaux propres comptables ont augmenté à 456 millions de dollars (20 dollars par action diluée). L'entreprise a complété un regroupement d'actions en juillet 2024 pour conserver sa conformité avec le NYSE et a réussi à clore une offre d'échange avec près de 98 % de participation de la part des détenteurs de billets non garantis senior.
Finance of America (NYSE: FOA) hat starke Ergebnisse für das dritte Quartal 2024 gemeldet, mit einem Nettoergebnis aus fortgeführten Betrieben von 204 Millionen Dollar oder 8,48 Dollar Basisgewinn pro Aktie. Das Unternehmen erzielte ein bereinigtes Nettoergebnis von 15 Millionen Dollar (0,67 Dollar pro Aktie) und ein bereinigtes EBITDA von 32 Millionen Dollar. Das insgesamt finanzierte Volumen stieg im Quartalsvergleich um 15% auf 513 Millionen Dollar. Das Buch-Eigenkapital stieg auf 456 Millionen Dollar (20 Dollar je verwässerter Aktie). Das Unternehmen führte im Juli 2024 einen Reverse-Split durch, um die Compliance mit dem NYSE aufrechtzuerhalten und schloss erfolgreich ein Austauschangebot mit nahezu 98% Teilnahme der Inhaber von unbesicherten Senior-Anleihen ab.
- Net income from continuing operations of $204 million ($8.48 per share)
- Adjusted net income of $15 million, marking fifth consecutive quarter of improved performance
- Book equity increased 82% to $456 million
- Funded volume grew 15% quarter-over-quarter to $513 million
- Total revenue increased 267% to $290 million
- Cash and cash equivalents decreased 6% to $44 million
- Total liabilities increased 3% to $28.5 billion
Insights
FOA delivered strong Q3 2024 results with significant improvements across key metrics. Net income from continuing operations reached
The company's balance sheet strengthened considerably with total equity increasing
The Portfolio Management segment showed robust performance with pre-tax income of
The results demonstrate a successful turnaround with multiple positive catalysts. The reverse stock split brought NYSE compliance, while the debt exchange strengthens financial flexibility. The
Revenue diversification between origination gains and portfolio management provides stability, with both segments showing strong profitability. The company's focus on the retirement solutions market positions it well given demographic tailwinds and growing demand for home equity-based financing solutions. The consistent improvement in operating metrics over five quarters indicates sustainable momentum rather than a one-time recovery.
–
–
– Adjusted EBITDA for the quarter of
Third Quarter 2024 Highlights(1)
-
Net income from continuing operations of
or$204 million basic earnings per share for the quarter.$8.48 -
Adjusted net income(2) of
or$15 million adjusted earnings per share for the quarter.$0.67 - The third quarter 2024 marks the fifth consecutive quarter of improved operating performance on an adjusted net basis.
-
Adjusted EBITDA(2) of
for the quarter.$32 million -
Book equity increased to
as of September 30, 2024, or nearly$456 million per fully diluted share.$20 - The Company completed its reverse stock split on July 25, 2024, bringing it back into compliance with NYSE continued listing standards.
-
The Company successfully closed its exchange offer on October 31, 2024 with participation from holders of nearly
98% of senior unsecured notes.
(1) The financial information presented in the highlights is for the Company’s continuing operations |
(2) See the sections titled “Reconciliation to GAAP” and “Non-GAAP Financial Measures” for reconciliations to the most directly comparable GAAP measures and other important disclosures. |
Graham A. Fleming, Chief Executive Officer commented, “We’re very pleased with this quarter’s results, which exceeded our volume guidance and delivered strong GAAP earnings performance along with a return to profitability in adjusted net income. We continue to focus on our strategic initiatives, and now with a stronger balance sheet, are well-positioned for continued growth.”
Third Quarter Financial Summary of Continuing Operations
($ amounts in millions, except per share data) |
|
|
|
Variance (%) |
|
|
|
Variance (%) |
|
|
|
|
|
Variance (%) |
|||||||||||||
|
|
Q3'24 |
|
Q2'24 |
|
Q3'24 vs Q2'24 |
|
Q3'23 |
|
Q3'24 vs Q3'23 |
|
YTD 2024 |
|
YTD 2023 |
|
2024 vs 2023 |
|||||||||||
Funded volume |
|
$ |
513 |
|
$ |
447 |
|
|
15 |
% |
|
$ |
512 |
|
|
— |
% |
|
$ |
1,384 |
|
$ |
1,315 |
|
|
5 |
% |
Total revenues |
|
|
290 |
|
|
79 |
|
|
267 |
% |
|
|
(70 |
) |
|
514 |
% |
|
|
444 |
|
|
(41 |
) |
|
1183 |
% |
Total expenses and other, net |
|
|
82 |
|
|
83 |
|
|
(1 |
)% |
|
|
102 |
|
|
(20 |
)% |
|
|
255 |
|
|
296 |
|
|
(14 |
)% |
Pre-tax income (loss) from continuing operations |
|
|
208 |
|
|
(4 |
) |
|
5300 |
% |
|
|
(173 |
) |
|
220 |
% |
|
|
189 |
|
|
(338 |
) |
|
156 |
% |
Net income (loss) from continuing operations |
|
|
204 |
|
|
(5 |
) |
|
4180 |
% |
|
|
(172 |
) |
|
219 |
% |
|
|
183 |
|
|
(338 |
) |
|
154 |
% |
Adjusted net income (loss)(1) |
|
|
15 |
|
|
— |
|
|
N/A |
|
|
|
(24 |
) |
|
163 |
% |
|
|
9 |
|
|
(64 |
) |
|
114 |
% |
Adjusted EBITDA(1) |
|
|
32 |
|
|
10 |
|
|
220 |
% |
|
|
(23 |
) |
|
239 |
% |
|
|
42 |
|
|
(59 |
) |
|
171 |
% |
Basic earnings (loss) per share |
|
$ |
8.48 |
|
$ |
(0.20 |
) |
|
4340 |
% |
|
$ |
(7.36 |
) |
|
215 |
% |
|
$ |
7.80 |
|
$ |
(15.72 |
) |
|
150 |
% |
Diluted earnings (loss) per share(2) |
|
$ |
7.50 |
|
$ |
(0.29 |
) |
|
2686 |
% |
|
$ |
(7.36 |
) |
|
202 |
% |
|
$ |
6.65 |
|
$ |
(15.72 |
) |
|
142 |
% |
Adjusted earnings (loss) per share(1) |
|
$ |
0.67 |
|
$ |
— |
|
|
N/A |
|
|
$ |
(1.03 |
) |
|
165 |
% |
|
$ |
0.38 |
|
$ |
(2.95 |
) |
|
113 |
% |
(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 on an if-converted basis except when anti-dilutive. |
Balance Sheet Highlights
($ amounts in millions) |
|
September 30, |
|
June 30, |
|
Variance (%) |
|||
|
|
2024 |
|
2024 |
|
Q3'24 vs Q2'24 |
|||
Cash and cash equivalents |
|
$ |
44 |
|
$ |
47 |
|
(6 |
)% |
Securitized loans held for investment (HMBS & nonrecourse) |
|
|
27,619 |
|
|
26,614 |
|
4 |
% |
Total assets |
|
|
28,950 |
|
|
27,974 |
|
3 |
% |
Total liabilities |
|
|
28,494 |
|
|
27,723 |
|
3 |
% |
Total equity |
|
|
456 |
|
|
251 |
|
82 |
% |
-
Total equity increased from
to$251 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.$456 million -
Additionally, tangible net worth increased from
as of June 30, 2024 to$16 million as of September 30, 2024.$231 million
Segment Results
Retirement Solutions
The Retirement Solutions segment primarily generates revenue and earnings in the form of net origination gains and origination fees earned on the origination of reverse mortgage loans.
|
|
|
|
Variance (%) |
|
|
|
Variance (%) |
|
|
|
|
|
Variance (%) |
|||||||||||||
($ amounts in millions) |
|
Q3'24 |
|
Q2'24 |
|
Q3'24 vs Q2'24 |
|
Q3'23 |
|
Q3'24 vs Q3'23 |
|
YTD 2024 |
|
YTD 2023 |
|
2024 vs 2023 |
|||||||||||
Funded volume |
|
$ |
513 |
|
$ |
447 |
|
|
15 |
% |
|
$ |
512 |
|
|
— |
% |
|
$ |
1,384 |
|
$ |
1,315 |
|
|
5 |
% |
Total revenue |
|
|
64 |
|
|
47 |
|
|
36 |
% |
|
|
40 |
|
|
60 |
% |
|
|
157 |
|
|
107 |
|
|
47 |
% |
Pre-tax income (loss) |
|
|
16 |
|
|
(2 |
) |
|
900 |
% |
|
|
(20 |
) |
|
180 |
% |
|
|
10 |
|
|
(47 |
) |
|
121 |
% |
Adjusted net income (loss)(1) |
|
|
19 |
|
|
7 |
|
|
171 |
% |
|
|
(6 |
) |
|
417 |
% |
|
|
30 |
|
|
(10 |
) |
|
400 |
% |
(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 quarter, the segment recognized pre-tax income of
and adjusted net income of$16 million as a result of increased volumes and improved margins.$19 million -
Compared to the third quarter 2023, total revenue increased by
60% primarily due to an increase in revenue margin and funded volume, which led to a180% improvement in pre-tax income and a417% improvement in adjusted net income. -
Total expenses decreased significantly from the third quarter 2023 from
to$60 million as the business completed the integration of the retail platform and streamlined business operations.$49 million
Portfolio Management
The Portfolio Management segment primarily generates revenue and earnings in the form of net interest income and fair value changes on our portfolio assets, monetized through securitization, sale, or other financing of those assets.
|
|
|
|
Variance (%) |
|
|
|
Variance (%) |
|
|
|
|
|
Variance (%) |
||||||||||||
($ amounts in millions) |
|
Q3'24 |
|
Q2'24 |
|
Q3'24 vs Q2'24 |
|
Q3'23 |
|
Q3'24 vs Q3'23 |
|
YTD 2024 |
|
YTD 2023 |
|
2024 vs 2023 |
||||||||||
Assets under management |
|
$ |
28,659 |
|
$ |
27,655 |
|
4 |
% |
|
$ |
26,023 |
|
|
10 |
% |
|
$ |
28,659 |
|
$ |
26,023 |
|
|
10 |
% |
Assets excluding HMBS and nonrecourse obligations |
|
|
1,830 |
|
|
1,624 |
|
13 |
% |
|
|
1,232 |
|
|
49 |
% |
|
|
1,830 |
|
|
1,232 |
|
|
49 |
% |
Total revenue |
|
|
235 |
|
|
41 |
|
473 |
% |
|
|
(103 |
) |
|
328 |
% |
|
|
313 |
|
|
(125 |
) |
|
350 |
% |
Pre-tax income (loss) |
|
|
217 |
|
|
22 |
|
886 |
% |
|
|
(124 |
) |
|
275 |
% |
|
|
253 |
|
|
(193 |
) |
|
231 |
% |
Adjusted net income(1) |
|
|
12 |
|
|
12 |
|
— |
% |
|
|
1 |
|
|
1100 |
% |
|
|
30 |
|
|
7 |
|
|
329 |
% |
(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 quarter, the segment recognized pre-tax income of
, an improvement against the prior quarter and third quarter 2023 primarily due to positive fair value adjustments of retained interests in securitizations, resulting from market inputs and model assumptions.$217 million -
Adjusted net income during the third quarter totaled
, flat to the prior quarter and an increase of$12 million year over year, primarily driven by an increase in accreted yield on the Company’s residual interests.$11 million
Finance of America Companies Inc. Selected Financial Information Condensed Consolidated Statements of Financial Condition (in thousands, except share data) (unaudited) |
|||||||
|
September 30, 2024 |
|
June 30, 2024 |
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
44,258 |
|
|
$ |
46,509 |
|
Restricted cash |
|
176,105 |
|
|
|
200,104 |
|
Loans held for investment, subject to HMBS related obligations, at fair value |
|
18,521,337 |
|
|
|
18,196,092 |
|
Loans held for investment, subject to nonrecourse debt, at fair value |
|
9,097,369 |
|
|
|
8,418,195 |
|
Loans held for investment, at fair value |
|
703,356 |
|
|
|
677,726 |
|
Intangible assets, net |
|
225,639 |
|
|
|
234,936 |
|
Other assets, net |
|
178,493 |
|
|
|
196,134 |
|
Assets of discontinued operations |
|
3,827 |
|
|
|
4,658 |
|
TOTAL ASSETS |
$ |
28,950,384 |
|
|
$ |
27,974,354 |
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
||||
HMBS related obligations, at fair value |
$ |
18,292,043 |
|
|
$ |
17,980,232 |
|
Nonrecourse debt, at fair value |
|
8,537,119 |
|
|
|
8,050,708 |
|
Other financing lines of credit |
|
1,054,568 |
|
|
|
1,073,844 |
|
Notes payable, net (includes amounts due to related parties of |
|
435,744 |
|
|
|
442,971 |
|
Payables and other liabilities |
|
160,869 |
|
|
|
157,273 |
|
Liabilities of discontinued operations |
|
13,585 |
|
|
|
18,029 |
|
TOTAL LIABILITIES |
|
28,493,928 |
|
|
|
27,723,057 |
|
|
|
|
|
||||
EQUITY |
|
|
|
||||
Class A Common Stock, |
|
1 |
|
|
|
1 |
|
Class B Common Stock, |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
953,023 |
|
|
|
951,535 |
|
Accumulated deficit |
|
(639,807 |
) |
|
|
(724,010 |
) |
Accumulated other comprehensive loss |
|
(273 |
) |
|
|
(296 |
) |
Noncontrolling interest |
|
143,512 |
|
|
|
24,067 |
|
TOTAL EQUITY |
|
456,456 |
|
|
|
251,297 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
28,950,384 |
|
|
$ |
27,974,354 |
|
Finance of America Companies Inc. Selected Financial Information Condensed Consolidated Statements of Operations (in thousands, except share data) (unaudited) |
|||||||||||||||||||
|
Q3'24 |
|
Q2'24 |
|
Q3'23 |
|
YTD 2024 |
|
YTD 2023 |
||||||||||
PORTFOLIO INTEREST INCOME |
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
$ |
489,900 |
|
|
$ |
478,091 |
|
|
$ |
443,999 |
|
|
$ |
1,431,970 |
|
|
$ |
1,169,624 |
|
Interest expense |
|
(426,839 |
) |
|
|
(412,618 |
) |
|
|
(372,459 |
) |
|
|
(1,233,261 |
) |
|
|
(970,428 |
) |
NET PORTFOLIO INTEREST INCOME |
|
63,061 |
|
|
|
65,473 |
|
|
|
71,540 |
|
|
|
198,709 |
|
|
|
199,196 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
||||||||||
Net origination gains |
|
57,216 |
|
|
|
40,260 |
|
|
|
31,376 |
|
|
|
137,133 |
|
|
|
88,777 |
|
Gain on securitization of HECM tails, net |
|
10,560 |
|
|
|
11,031 |
|
|
|
7,100 |
|
|
|
32,317 |
|
|
|
17,095 |
|
Fair value changes from model amortization |
|
(43,753 |
) |
|
|
(47,813 |
) |
|
|
(56,882 |
) |
|
|
(149,174 |
) |
|
|
(162,386 |
) |
Fair value changes from market inputs or model assumptions |
|
204,154 |
|
|
|
11,260 |
|
|
|
(122,449 |
) |
|
|
228,976 |
|
|
|
(172,168 |
) |
Net fair value changes on loans and related obligations |
|
228,177 |
|
|
|
14,738 |
|
|
|
(140,855 |
) |
|
|
249,252 |
|
|
|
(228,682 |
) |
Fee income |
|
8,054 |
|
|
|
7,880 |
|
|
|
13,201 |
|
|
|
22,170 |
|
|
|
33,377 |
|
Gain (loss) on sale and other income from loans held for sale, net |
|
— |
|
|
|
216 |
|
|
|
(6,984 |
) |
|
|
302 |
|
|
|
(23,464 |
) |
Non-funding interest expense, net |
|
(9,219 |
) |
|
|
(9,268 |
) |
|
|
(7,342 |
) |
|
|
(26,639 |
) |
|
|
(21,909 |
) |
NET OTHER INCOME (EXPENSE) |
|
227,012 |
|
|
|
13,566 |
|
|
|
(141,980 |
) |
|
|
245,085 |
|
|
|
(240,678 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL REVENUES |
|
290,073 |
|
|
|
79,039 |
|
|
|
(70,440 |
) |
|
|
443,794 |
|
|
|
(41,482 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
EXPENSES |
|
|
|
|
|
|
|
|
|
||||||||||
Salaries, benefits, and related expenses |
|
31,083 |
|
|
|
35,053 |
|
|
|
48,557 |
|
|
|
105,159 |
|
|
|
140,469 |
|
Loan production and portfolio related expenses |
|
6,946 |
|
|
|
5,662 |
|
|
|
6,370 |
|
|
|
21,221 |
|
|
|
21,296 |
|
Loan servicing expenses |
|
7,772 |
|
|
|
7,632 |
|
|
|
8,000 |
|
|
|
23,622 |
|
|
|
23,274 |
|
Marketing and advertising expenses |
|
10,325 |
|
|
|
10,706 |
|
|
|
11,491 |
|
|
|
29,543 |
|
|
|
22,166 |
|
Depreciation and amortization |
|
9,777 |
|
|
|
9,753 |
|
|
|
9,954 |
|
|
|
29,208 |
|
|
|
32,431 |
|
General and administrative expenses |
|
14,405 |
|
|
|
16,241 |
|
|
|
21,054 |
|
|
|
47,917 |
|
|
|
59,572 |
|
TOTAL EXPENSES |
|
80,308 |
|
|
|
85,047 |
|
|
|
105,426 |
|
|
|
256,670 |
|
|
|
299,208 |
|
IMPAIRMENT OF OTHER ASSETS |
|
— |
|
|
|
— |
|
|
|
(558 |
) |
|
|
(600 |
) |
|
|
(558 |
) |
OTHER, NET |
|
(1,592 |
) |
|
|
2,240 |
|
|
|
3,853 |
|
|
|
2,101 |
|
|
|
2,852 |
|
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
|
208,173 |
|
|
|
(3,768 |
) |
|
|
(172,571 |
) |
|
|
188,625 |
|
|
|
(338,396 |
) |
Provision (benefit) for income taxes from continuing operations |
|
4,425 |
|
|
|
1,153 |
|
|
|
(103 |
) |
|
|
5,578 |
|
|
|
(786 |
) |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
|
203,748 |
|
|
|
(4,921 |
) |
|
|
(172,468 |
) |
|
|
183,047 |
|
|
|
(337,610 |
) |
NET LOSS FROM DISCONTINUED OPERATIONS |
|
— |
|
|
|
(203 |
) |
|
|
(2,464 |
) |
|
|
(4,727 |
) |
|
|
(45,211 |
) |
NET INCOME (LOSS) |
|
203,748 |
|
|
|
(5,124 |
) |
|
|
(174,932 |
) |
|
|
178,320 |
|
|
|
(382,821 |
) |
Noncontrolling interest |
|
119,545 |
|
|
|
(3,035 |
) |
|
|
(109,569 |
) |
|
|
103,744 |
|
|
|
(241,372 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST |
$ |
84,203 |
|
|
$ |
(2,089 |
) |
|
$ |
(65,363 |
) |
|
$ |
74,576 |
|
|
$ |
(141,449 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
EARNINGS (LOSS) PER SHARE |
|
|
|
|
|
|
|
|
|
||||||||||
Basic weighted average shares outstanding |
|
9,924,671 |
|
|
|
9,898,182 |
|
|
|
8,772,623 |
|
|
|
9,824,171 |
|
|
|
7,980,449 |
|
Basic earnings (loss) per share from continuing operations |
$ |
8.48 |
|
|
$ |
(0.20 |
) |
|
$ |
(7.36 |
) |
|
$ |
7.80 |
|
|
$ |
(15.72 |
) |
Basic earnings (loss) per share |
$ |
8.48 |
|
|
$ |
(0.21 |
) |
|
$ |
(7.45 |
) |
|
$ |
7.59 |
|
|
$ |
(17.72 |
) |
Diluted weighted average shares outstanding |
|
23,159,304 |
|
|
|
23,084,189 |
|
|
|
8,772,623 |
|
|
|
23,062,616 |
|
|
|
7,980,449 |
|
Diluted earnings (loss) per share from continuing operations |
$ |
7.50 |
|
|
$ |
(0.29 |
) |
|
$ |
(7.36 |
) |
|
$ |
6.65 |
|
|
$ |
(15.72 |
) |
Diluted earnings (loss) per share |
$ |
7.50 |
|
|
$ |
(0.30 |
) |
|
$ |
(7.45 |
) |
|
$ |
6.47 |
|
|
$ |
(17.72 |
) |
(unaudited) |
|||||||||||||||||||
Reconciliation to GAAP |
|||||||||||||||||||
($ amounts in millions)(1) |
Q3'24 |
|
Q2'24 |
|
Q3'23 |
|
YTD 2024 |
|
YTD 2023 |
||||||||||
Reconciliation of net income (loss) from continuing operations to adjusted net income (loss) and adjusted EBITDA |
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) from continuing operations |
$ |
204 |
|
|
$ |
(5 |
) |
|
$ |
(172 |
) |
|
$ |
183 |
|
|
$ |
(338 |
) |
Add back: (Provision) benefit for income taxes |
|
(4 |
) |
|
|
(1 |
) |
|
|
1 |
|
|
|
(6 |
) |
|
|
1 |
|
Net income (loss) from continuing operations before taxes |
|
208 |
|
|
|
(4 |
) |
|
|
(173 |
) |
|
|
189 |
|
|
|
(338 |
) |
Adjustments for: |
|
|
|
|
|
|
|
|
|
||||||||||
Changes in fair value(2) |
|
(198 |
) |
|
|
(8 |
) |
|
|
120 |
|
|
|
(216 |
) |
|
|
197 |
|
Amortization or impairment of intangibles and impairment of other assets(3) |
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
28 |
|
|
|
28 |
|
Equity-based compensation(4) |
|
2 |
|
|
|
1 |
|
|
|
5 |
|
|
|
7 |
|
|
|
14 |
|
Certain non-recurring costs(5) |
|
— |
|
|
|
2 |
|
|
|
6 |
|
|
|
4 |
|
|
|
12 |
|
Adjusted net income (loss) before taxes |
|
21 |
|
|
|
— |
|
|
|
(32 |
) |
|
|
12 |
|
|
|
(86 |
) |
Benefit (provision) for income taxes(6) |
|
(6 |
) |
|
|
— |
|
|
|
8 |
|
|
|
(4 |
) |
|
|
23 |
|
Adjusted net income (loss) |
|
15 |
|
|
|
— |
|
|
|
(24 |
) |
|
|
9 |
|
|
|
(64 |
) |
Provision (benefit) for income taxes(6) |
|
6 |
|
|
|
— |
|
|
|
(8 |
) |
|
|
4 |
|
|
|
(23 |
) |
Depreciation |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
5 |
|
Interest expense on non-funding debt |
|
10 |
|
|
|
10 |
|
|
|
8 |
|
|
|
28 |
|
|
|
23 |
|
Adjusted EBITDA |
$ |
32 |
|
|
$ |
10 |
|
|
$ |
(23 |
) |
|
$ |
42 |
|
|
$ |
(59 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
($ amounts in millions except shares and $ per share) |
Q3'24 |
|
Q2'24 |
|
Q3'23 |
|
YTD 2024 |
|
YTD 2023 |
||||||||||
GAAP PER SHARE MEASURES |
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) from continuing operations attributable to controlling interest |
$ |
84 |
|
|
$ |
(2 |
) |
|
$ |
(65 |
) |
|
$ |
77 |
|
|
$ |
(125 |
) |
Weighted average outstanding share count |
|
9,924,671 |
|
|
|
9,898,182 |
|
|
|
8,772,623 |
|
|
|
9,824,171 |
|
|
|
7,980,449 |
|
Basic earnings (loss) per share from continuing operations |
$ |
8.48 |
|
|
$ |
(0.20 |
) |
|
$ |
(7.36 |
) |
|
$ |
7.80 |
|
|
$ |
(15.72 |
) |
If-converted method net income (loss) from continuing operations |
$ |
174 |
|
|
$ |
(7 |
) |
|
$ |
(65 |
) |
|
$ |
153 |
|
|
$ |
(125 |
) |
Weighted average diluted share count |
|
23,159,304 |
|
|
|
23,084,189 |
|
|
|
8,772,623 |
|
|
|
23,062,616 |
|
|
|
7,980,449 |
|
Diluted earnings (loss) per share from continuing operations(7) |
$ |
7.50 |
|
|
$ |
(0.29 |
) |
|
$ |
(7.36 |
) |
|
$ |
6.65 |
|
|
$ |
(15.72 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
NON-GAAP PER SHARE MEASURES |
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income (loss) |
$ |
15 |
|
|
$ |
— |
|
|
$ |
(24 |
) |
|
$ |
9 |
|
|
$ |
(64 |
) |
Weighted average share count |
|
23,159,304 |
|
|
|
23,084,189 |
|
|
|
22,916,628 |
|
|
|
23,062,616 |
|
|
|
21,559,717 |
|
Adjusted earnings (loss) per share |
$ |
0.67 |
|
|
$ |
— |
|
|
$ |
(1.03 |
) |
|
$ |
0.38 |
|
|
$ |
(2.95 |
) |
(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, and minority investments. |
|
(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 our definitions of adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share to now 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) |
Pro-forma income tax provision (benefit) adjustments to apply an effective combined corporate tax rate to adjusted net income (loss) before taxes. |
|
(7) |
Calculated on an if-converted basis except when anti-dilutive. |
(unaudited) |
|||||||||||||||
Adjusted Net Income by Segment (Continuing Operations) |
|||||||||||||||
|
|
||||||||||||||
For the three months ended September 30, 2024 |
|
|
|||||||||||||
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
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 June 30, 2024 |
|
|
||||||||||||||
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
FOA |
||||||||||||
Pre-tax income (loss) |
$ |
(2 |
) |
$ |
22 |
|
$ |
(24 |
) |
$ |
(4 |
) |
||||
Adjustments for: |
|
|
|
|
||||||||||||
Changes in fair value(2) |
|
— |
|
|
(6 |
) |
|
(2 |
) |
|
(8 |
) |
||||
Amortization or impairment of intangibles and impairment of other assets(3) |
|
9 |
|
|
— |
|
|
— |
|
|
9 |
|
||||
Equity-based compensation(4) |
|
— |
|
|
— |
|
|
1 |
|
|
1 |
|
||||
Certain non-recurring costs(5) |
|
1 |
|
|
— |
|
|
1 |
|
|
2 |
|
||||
Adjusted net income (loss) before taxes |
$ |
9 |
|
$ |
16 |
|
$ |
(24 |
) |
$ |
— |
|
||||
Provision (benefit) for income taxes(6) |
|
2 |
|
|
4 |
|
|
(6 |
) |
|
— |
|
||||
Adjusted net income (loss) |
$ |
7 |
|
$ |
12 |
|
$ |
(18 |
) |
$ |
— |
|
||||
Weighted average share count |
|
23,084,189 |
|
|
23,084,189 |
|
|
23,084,189 |
|
|
23,084,189 |
|
||||
Adjusted earnings (loss) per share |
$ |
0.27 |
|
$ |
0.52 |
|
$ |
(0.77 |
) |
$ |
— |
|
|
|
|||||||||||||||
For the three months ended September 30, 2023 |
|
|
||||||||||||||
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
FOA |
||||||||||||
Pre-tax loss |
$ |
(20 |
) |
$ |
(124 |
) |
$ |
(28 |
) |
$ |
(173 |
) |
||||
Adjustments for: |
|
|
|
|
||||||||||||
Changes in fair value(2) |
|
— |
|
|
124 |
|
|
(4 |
) |
|
120 |
|
||||
Amortization or impairment of intangibles and impairment of other assets(3) |
|
9 |
|
|
— |
|
|
— |
|
|
9 |
|
||||
Equity-based compensation(4) |
|
1 |
|
|
1 |
|
|
3 |
|
|
5 |
|
||||
Certain non-recurring costs(5) |
|
1 |
|
|
— |
|
|
4 |
|
|
6 |
|
||||
Adjusted net income (loss) before taxes |
$ |
(8 |
) |
$ |
1 |
|
$ |
(24 |
) |
$ |
(32 |
) |
||||
Benefit for income taxes(6) |
|
(2 |
) |
|
— |
|
|
(6 |
) |
|
(8 |
) |
||||
Adjusted net income (loss) |
$ |
(6 |
) |
$ |
1 |
|
$ |
(18 |
) |
$ |
(24 |
) |
||||
Weighted average share count |
|
22,916,628 |
|
|
22,916,628 |
|
|
22,916,628 |
|
|
22,916,628 |
|
||||
Adjusted earnings (loss) per share |
$ |
(0.26 |
) |
$ |
0.04 |
|
$ |
(0.80 |
) |
$ |
(1.03 |
) |
|
|
||||||||||||||
For the nine months ended September 30, 2024 |
|
|
|||||||||||||
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
FOA |
|||||||||||
Pre-tax income (loss) |
$ |
10 |
$ |
253 |
|
$ |
(74 |
) |
$ |
189 |
|
||||
Adjustments for: |
|
|
|
|
|||||||||||
Changes in fair value(2) |
|
— |
|
(214 |
) |
|
(2 |
) |
|
(216 |
) |
||||
Amortization or impairment of intangibles and impairment of other assets(3) |
|
28 |
|
— |
|
|
1 |
|
|
28 |
|
||||
Equity-based compensation(4) |
|
1 |
|
1 |
|
|
6 |
|
|
7 |
|
||||
Certain non-recurring costs(5) |
|
1 |
|
— |
|
|
2 |
|
|
4 |
|
||||
Adjusted net income (loss) before taxes |
$ |
41 |
$ |
40 |
|
$ |
(68 |
) |
$ |
12 |
|
||||
Provision (benefit) for income taxes(6) |
|
11 |
|
11 |
|
|
(18 |
) |
|
4 |
|
||||
Adjusted net income (loss) |
$ |
30 |
$ |
30 |
|
$ |
(51 |
) |
$ |
9 |
|
||||
Weighted average share count |
|
23,062,616 |
|
23,062,616 |
|
|
23,062,616 |
|
|
23,062,616 |
|
||||
Adjusted earnings (loss) per share |
$ |
1.30 |
$ |
1.28 |
|
$ |
(2.20 |
) |
$ |
0.38 |
|
|
|
|||||||||||||||
For the nine months ended September 30, 2023 |
|
|
||||||||||||||
($ amounts in millions except shares and $ per share)(1) |
Retirement Solutions |
Portfolio Management |
Corporate & Other |
FOA |
||||||||||||
Pre-tax loss |
$ |
(47 |
) |
$ |
(193 |
) |
$ |
(98 |
) |
$ |
(338 |
) |
||||
Adjustments for: |
|
|
|
|
||||||||||||
Changes in fair value(2) |
|
— |
|
|
200 |
|
|
(3 |
) |
|
197 |
|
||||
Amortization or impairment of intangibles and impairment of other assets(3) |
|
28 |
|
|
— |
|
|
— |
|
|
28 |
|
||||
Equity-based compensation(4) |
|
3 |
|
|
1 |
|
|
10 |
|
|
14 |
|
||||
Certain non-recurring costs(5) |
|
3 |
|
|
1 |
|
|
8 |
|
|
12 |
|
||||
Adjusted net income (loss) before taxes |
$ |
(13 |
) |
$ |
9 |
|
$ |
(83 |
) |
$ |
(86 |
) |
||||
Provision (benefit) for income taxes(6) |
|
(3 |
) |
|
2 |
|
|
(22 |
) |
|
(23 |
) |
||||
Adjusted net income (loss) |
$ |
(10 |
) |
$ |
7 |
|
$ |
(61 |
) |
$ |
(64 |
) |
||||
Weighted average share count |
|
21,559,717 |
|
|
21,559,717 |
|
|
21,559,717 |
|
|
21,559,717 |
|
||||
Adjusted earnings (loss) per share |
$ |
(0.43 |
) |
$ |
0.30 |
|
$ |
(2.82 |
) |
$ |
(2.95 |
) |
(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, and minority investments. |
|
(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 our definitions of adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share to now 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) |
Pro-forma 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 Wednesday, November 6th at 5:00 pm Eastern Time to discuss the Company’s results for the third quarter ended September 30, 2024. A copy of this press release 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 November 20, 2024. 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 Restricted RSUs and Earnout Right RSUs. Beginning with the third quarter of 2024, the Company revised our definitions of adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share to now 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 our 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 (including earnouts and Tax Receivable Agreements (“TRA”) obligation), contingent earnout, warrant liability, and minority investments.
- 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 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
- Change in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions, deferred purchase price obligations (including earnouts and TRA obligation), contingent earnout, warrant liability, and minority investments.
- 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
We evaluate the performance of our company and segments through the use of adjusted EBITDA as a non-GAAP measure. Management considers adjusted EBITDA important in evaluating the Company as a whole. Adjusted EBITDA is a supplemental metric 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. 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 outstanding shares, 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 and any shares under the treasury stock method.
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
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106517018/en/
For Finance of America Media: pr@financeofamerica.com
For Finance of America Investor Relations: ir@financeofamerica.com
Source: Finance of America Companies Inc.
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