FOA - Earnings call transcript Q3 2024 | Finance Of America Companies Inc.

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Operator

Hello, and welcome to the Finance of America Third Quarter 2024 Earnings Call. [Operator Instructions]. I would now like to turn the conference over to Michael Fant, Senior Vice President of Finance.

You may begin.

Michael Fant

Thank you, and good afternoon everyone, and welcome to Finance of America's Third Quarter 2024 Earnings Call. Graham Engel, Executive Chief are President; Kristen today Matt and Financial me Fleming, Officer; Chief Sieffert, With Officer.

our release As being a presentation earnings recorded, is website on and and you www.financeofamericacompanies.com. reminder, can find this Investor Relations call at the

to will this non-GAAP financial In call. refer measures addition, certain we on

harbor without You you statements of ended are release. of annual company's the statements conference the financial those regarding XX-K remind Securities page efforts. to with of presentation discussed the current comments forward-looking periods. operating on Litigation unreasonable factors, safe risks or based Finance Investor that materially on on March of everyone those performance Relations on described extent report statements the press the forward-looking December XX, year today's XX, differ like number on implied Private Risk company's XXXX, for section the GAAP reconciliations that for today's can SEC expressed earnings for to call and earnings in and of from including on to call this the our or that by may the are in expectations Form Actual periods Factors a may release to website the are financial other XXXX America's filed XXXX. find be of these statement due statements future results subject forward-looking will future and available within find non-GAAP would Reform expected of I measures in our Act Also, the for meaning to These

the filings and updated As such, risk may factors in SEC. our subsequent amended with be

which change. that unaudited. to undertaking operations, if statements will discussing financials continuing for Please not any be update these are period interim We are note our we commitment conditions

would Executive the Graham Finance like Chief to call Officer, America's I Graham? turn to of over Fleming. Now

Graham Fleming

us everyone, you, thank Thank joining Michael. you and for today. Good afternoon,

strategic off America now of of the $XX we've or over a on is with are $XXX culmination execution focus or undertaken share, to quarter share adjusted we financial of million net the million per this and performance the $X.XX Finance paying operational of last in in as income in of basic strategic number efforts Our and in strengthen These our continued generated adjusted year earnings initiatives earnings adjusted income plan. net million $X.XX $XX EBITDA. per results improved business.

on exchange income end million, our year-to-date our our everything delivering reverse $XXX and and in to Our on performance was of during financial executing QX execute demonstrates offer strategic of the and net ability to high exchange noteholders. our $XXX to we forward positive in and and delivering quarter, continue a unsecured continuing Volume on look our income, which out are net million. on and October exceeded completed enhances significantly finalized our to XXXX flexibility consent guidance do. completed EBITDA basis. we the the XX, our the range brought This we split our of $XXX customers. set partnership Notably, initiatives solicitation stock notes, This reached quarter a we and Overall, balance with sheet business. our all to of adjusted adjusted value the million

Our team has been speak focused and the for themselves. results

this needs $XX held equity for execution With sustained evolving approximately the growth trillion momentum home of positioned financial uniquely our innovative by through across are and Our demographic the products. strong success. of board positioned continued home to improved meet homeowners, we older have equity-based growing driven by profitability, and retirement us

away lien older home from access such as way without the loans equity see to consumers XX market their are seeking second on focusing mortgages. a most We segments mortgage refinancing potential, and we as low-rate where conventional growth

be valuable to could opportunity Kristen? product population. a Kristen. and it turn for Second over discuss solution this more, HomeSafe To I'll this Our

Kristen Sieffert

we streamlining that while continued workflows customer ROI experience of efficiency. We significant dedicated and impact. the to and second of you, our the everyone. the well sales In to that staying volume and are presence. enhancing the focused about our AAG our these talked unification initiatives of maximization our platform results the afternoon, the our America quarter improved our name intended We and having pleased Reverse expectations optimizing good and share progress Finance Graham, on through as to brands America in and single operations adjustments processes. of of I'm surpassed Thank expanding quarter, under market a transforming consolidated as Finance the operations third indicate

Our a to fundings the saw prior officer per productivity retail compared measured by loan XX% quarter. channel improvement

customer and a Additionally, with our acquisition. XXXX. month enhancing largest methods a of lines products Being digital the business and our strategy leverages of is one an to of digital-first highly submission in prioritizes channel and and of a production that our a automated to believe this origination for will The brand online result vital Developing October experienced July to and in materially improve was our of customer modern lower modernizing tools This critical experience. successful, experience overall We overall under building approach channel mainstreaming for brand sets funding and unified consolidation supplement our advertising marking experiences stage milestone. existing the transacting. efficiency better means efficiency. cost ease over traditional

to is quarter modern that in designed both Our a digital services building of campaign to support that the are launched financial a customers identify HomeSafe attract way deliver and in strategy process efforts. these a to is to out strategies focused user-friendly. team seniors We dedicated new Second new and at innovation end digital marketing

insights and and beyond. channel campaigns investments mature, and team growth year digital-first strategy a As will inform the gained for next our for

strategic drive We starting on marketing advertising regional profile a markets in to are also XXXX. brand overall by our business introducing programs focused and with our new agency strategy improving in local build and

third traditional states recently interest loan affecting lowered the to Second low Regarding home rate. Second their expanded materially allows their and innovation, quarter, lien the we in older in rate to loans HomeSafe capital and aged and mortgage. resources we growth compared XX product equity area invest further our to In homeowners second to first and an XX% additional as product QX, more HomeSafe increase this we we saw HomeSafe anticipate without product. the access intentionally

have refinance the rates as the more fall, transform face increased struggle While approach well the equity. equity qualification. of a we offer help on equity we're as older customers nationwide innovation affecting home to equity poised through with second home borrower higher XX%. attractive is harnessing as may our XX but XX to tighter considerable lending and a designed continue services start full specifically significant home homes are traditional our digital base. unlock of When of to to credit leveraging data deliver retirement conversion shows how our home serve If longer, mortgages modernized rates and to suite this of potential loan By to a the outcomes the our power our proprietary will and lien more recent them people rise, their be Many lien opportunities denial option advertising, first power equity eclipsing for and to empower conditions represents older. and This opportunity our us many to demographic. better to products rates for Home stay borrowers

to over turn to discuss I'll it financials. Now our Matt

Michael Fant

Thank Kristen, everyone. you, afternoon, and good

Let of results specifics I into the financial me before brief with a quarter. start overview dive our on

net adjusted with in share As adjusted $XX earnings or and income million. Graham income reaching in $XXX $X.XX hitting per or EBITDA $X.XX million delivered per basic adjusted noted, we share in $XX million net earnings

QX adjustments assumptions in progress million metrics quarter across Our a This improved an in reflects operating $XXX $XX the in origination increasing we increased $XX general expenses, reductions statement $XXX quarter-over-quarter inputs and by $XXX on volumes from last a $XX to to QX. funded Revenue the particularly QX QX, fair performance the with of share. in to quarter, in well from administrative in uptick, growing our in revenue the combination of million from Net saw our and as from or to notable worth the and performance, increased solid in our approximately look loss margins, board. income quarter due million, assets. driven per salaries improvements for and million financial also Continuing $X Comparing volumes range million with EBITDA supplement. income $XXX Adjusted guidance continued our efficiencies. largely to $XXX in million combined as saw benefits to Tangible as the earnings million higher operational across from see $XX volume rose model several million. which favorable rose value gains fair QX, $XXX net to the to was value significant improving lines. residual slides along previous exceeded we expense market million outlined million at higher of and

First, higher saw slight as model interest we a on discussed a last financing last by in however, our primarily portfolio which offset expense decline, amortization, more our to fair than quarter. higher accreted due This net led the facilities from quarter. to yield interest portfolio a income new reduction to non-agency value from compared was, changes

XX% as notably XX%. volumes to front, and increased both On by platform million originations the million originations net by grew our $XX $XX gains originations from in margins

company's expenses reduction cost-saving decrease first rightsizing largest as Salaries This total we On the continued the was by the initiatives. quarter these of side, benefits efforts. and benefits impact expense the operational in which driven realized the of full efficiencies. a the result of our saw to full

highlights adapt model, has operational positioned improvement for and business profitability. sustained that This the our market of to our the discipline conditions quarter-over-quarter us strength ability to

the income at key year-to-date our net $XXX income million. revenue. million, XXXX, has million across progress at performance, of while year-to-date third made metrics. in adjusted we've stands quarter total Net financial significant Through generated reached we several $XXX $X Looking

throughout operational initiatives, potential. cost have totaled million, growth Additionally, months momentum strategic success X of management, built enhanced of efficiencies which XXXX. disciplined and results strong long-term all These demonstrating and adjusted first the the EBITDA our profitability we've the the improved year to $XX reflect contributed for

adjusted in and the for Our came our line growth share operational quarter, ability $X.XX underscoring both at drive top per to improvements. earnings

by continue origination As an we achieve in and investing in sustained growth our structure. our we to profitability optimized cost fixed opportunities executing platform plan, maintaining expect

to $X.XX trajectory earnings our XXXX, between meet $X adjusted our share and For per expect to and in confident targets. our remain financial ability we to deliver

the to balance sheet. Turning

we've flexibility. unsecured maintaining which extended our long-term bolstered to team and With objectives maturities, has has several that growth. ability our debt and our executed capital to transactions the our completion structure the supporting financial of Recently, exchange, greatly on enhanced our note were critical focus

of month quarter, positive such provided the financing million, the $XXX and cash XXXX, for us totaling third totaling reissue completed buyout October, long-term HomeSafe product to our enhanced this call the completed third $XXX HECM the our securitization we asset which our of providing flow of and in business. we liquidity. class generating During securitizations with another quarterly securitization In million,

Looking the proprietary the ahead, we are encouraged favorable and reverse mortgage the in market product strength offerings. of our by trends

sheet with growth. ability combined conditions, adapt a successful to liquidity a for provides improving foundation market strong exchange to position Our future and changing balance the debt solid following

successes to back financial we for our remarks. me generating cash We XXXX. it let to the expect hand continue into positive progress flow building on quarter With and that, and Graham fourth closing as

Graham Fleming

Thank you, Matt.

I'm results third the central resilience and team. gratitude quarter, my for to our successful to I Finance a conclude are strong the we of express proud want of delivered. efforts and performance, we've America's Their of dedication As

expect Looking achieve XXXX to earnings as adjusted and as between we we our in deliver profitability. execute $X.XX $X noted, continue and share sustained per plan ahead, Matt to

seniors number we'll products. meet for simultaneously open call a for you pipeline are we to XXXX, amount of we'll double we With expected questions. capture their by total home while the about retirement with up term, which of retirement who prepared positioned And poised the to record massive well submission over as the be equity, and needs addressable home grows. financially see of nearly market When our are market we volumes, long population senior are our a some the that, to excited equity-based the consider record holding with

Operator

question of line comes first UBS. Your from Douglas Harter the with

Marissa Lobo

volume It's for on given in for outlook rates. actually Doug. could you Marissa was the I hoping give backup Lobo us an

Matthew Engel

which period? time For

Marissa Lobo

For 'XX.

Matthew Engel

in number quarter. -- $XXX third So million the over we we have did our

same something see We quarter. expect to fourth ballpark that in here the in

starting year, growth. to some For we're sequential next see

rates increase the we'll pointed over the to a XXXX, going bit. out, to a you rates settle where of bit. But up believe term. are able the initiatives that number little As growth some see we the here out have be lead We'll long us into

full XXXX for somewhere range in the in about $X.X in more year looking the probably we're So ballpark. of billion, that neighborhood

Graham Fleming

of our reason. Sorry, on the HomeSafe I right? program reasons rates, our is introduced reverse and exactly though, One lien did Second mortgage I second we because that the question jump of in.

going mortgage into lien If if rates our are be for So come borrowers. out refinance product we can feel their rates forward they up, down, second a will a reverse. of ideal

grow So think to stay to don't of could we think I that we that basis. positioned want monthly a we if to regardless rates of ZIP continue volume code, but the rates, volume we're kind say increase on our around

Marissa Lobo

And us the also, could impact X.X? an the HMBS your you on timing give on update of thoughts and

Graham Fleming

around were in the in was Denver we So November. feedback us middle [indiscernible]. week latest to sometime last Their the of

that see letter, that So to waiting was but last we're communication still their us week. to

Operator

Laws James. Stephen from with Your Raymond next question comes

Stephen Laws

sitting guidance. QX, Great volumes the I'm appreciate XXX. at and in I

what be about to volumes. wanted to your follow I put to the nice you of end out. So comments low up on

You that. little of expect similar a surprised QX, kind you to mentioned QX, by

where the vol then So in to volatility? rates?And guess, think somewhat to that, a grown on kind the seasonality follow after had see be sequentially quarter more that would don't coming is of to Or it curious year kind maybe there have seen to I'm rate of seems or up I the that? any I pipeline, just you expect about maybe it it QX, lighter not we is immune tends there the as maybe

Matthew Engel

was Kristen our a the here. then year pipeline comments, mentioned month to volume and rest volume and for we of highest both our pretty also, volume, year for start QX. right? kick quarter. But had around funding the heading good October of this start this my a strong the I'll we submission start So her to funding And have to into in it as team strong

So that's very favorable.

little start the right, Now your ability November to and depend funding will and bit. business lead curtail your you bit December, which periods, a get pipeline -- also of new holiday a but curtail generation into number your and on may days, little

the about And some, is that context you'll you be reflected seasonality, that's in November will lead even there going real And thinking strong in start to lower be of probably though for start, the the because QX volumes, uptick. the generation frame. the then So it then probably have the same QX, right, December and when have time we're if a we in QX, after to QX. see

Kristen Sieffert

add, more have for can that from market we product that today. available of we and low such penetration isn't And more educated just officers, that rates out on loan as and then Yes. opportunity I'd interest mortgage market stay longer, higher continue being the which go get bankers to tap traditional

for that opportunity see we potential So XXXX as growth as well. a

Stephen Laws

impact and since QX. fair from got the on then move? a October we where think volatility, rate the how And value should in rate today? around marks marks about we in we the gain any are big How about reversal fair think the do Or move given value

Graham Fleming

out settles price full over it right, also other think what's where interest early factors in there's up fair the being QX. going appreciation, our So that value But into of on They're were to quarter. We'll course I analysis, they go see November. And you one. factors. home about down with have rates and spreads, multiple as in here think, among October, the always,

up, in but spread are tightening rates So the we've some market. seen

pretty a strong. did reissue of We collapse saw ago, ] last and good HomeSafe spreads. Our weeks was deal very Nabo here [ couple the securitization just

out the a factors of where price mute the and other the the offset of basis. rate like some to get home interest on will We'll appreciation market-by-market and quarter of that increase. So settle see end some

So will But the because interest a pin so of exactly. rate down little moves, back somewhat down it -- it's to hard then be bring spread it but we'll tightening. because bit

Operator

question-and-answer Fleming the I closing call Graham concludes to the This turn session. will for remarks.

Graham Fleming

and to our updating everybody, Yes. you, year. we full today, and in look results for forward March year of QX Thank your next time

you So very much. thank

Operator

you today's call. joining. This concludes Thank conference for

disconnect now may your You lines.

Finance Of America Companies (FOA) 6 Nov 242024 Q3 Earnings call transcript