Finance Of America Companies (FOA) 8 Aug 232023 Q2 Earnings call transcript

Thank you for standing by. My name is Stephanie and I will be your conference operator today. At this time, I would like to welcome everyone to the Finance of America’s Second Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any feedback noise. After the speaker’s remarks there will be a Q&A session. Instructions]. [Operator Vice you Senior conference. begin of President Fant, may Finance, your Michael

today Chief you And Chief XXXX second me everyone. good Financial earnings Graham to With Thank afternoon, America’s Officer. welcome and Johan Officer; Executive and Finance of call. are Gericke, Fleming, quarter

As reminder, is being a recorded. call this

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

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to Also, I Actual operating everyone periods would for are XXXX or future other year forward-looking those that results the are a risks section statements XX-K Factor statements this Finance of to ended America’s on in the conference performance are you meaning XX, the these today’s expectations financial and regarding number like for Safe current due by the materially earnings may from factors, expressed implied will periods future release. to or expected in Annual SEC Form based remind on forward-looking those Reform on Private company’s find the differ December that be These forward-looking Risk within of Securities Litigation comments statements subject XX, on the filed company’s Report the with of March may described for call the of Statement Act including Harbor XXXX. for of that statements and XXXX.

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

and change. interim to if commitment any are statements are not financials unaudited. these note conditions We are period Please these undertaking update

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a for and into modern is we Our well platform, it business transformed now retirement solutions has believe leading positioned fully long-term success.

call, today's reviewing spend priorities. progress we've to results discuss Johan in then financial I'm structure then time made against For going business I'll our for updates by and discussing briefly financials will more the our executing quarter. detail. strategic the begin against our

results this growth we in illustrate investments commitment our streamlining long-term retirement to quarter for which and to significant business, is Our poised our making tailwinds. believe the solutions demographic due organization

our spreads by market results volumes. rates, downward and reduced due higher interest plays mortgage today's However, on been negative cyclical which adjustments impacted pressure wider has value to fair significantly and

spreads On per platform. the recognize a impact share we costs diluted as a basic share, basis, increased a recorded the an GAAP does continuing operations as net adjusted QX, loss driven XXX primarily rates loss by yet basis, million we volume fully or in of of growth of business we or the expanded and On $X.XX the negative quarter. million XX AAG reverse and the not $X.XX integrate in operational fully per of during infrastructure offset

streamlining strategic business our This investing reduce lines the potential. long-term focus on includes and discipline priorities. long-term with in greatest business with expenses growth our manage to to continue operations We our and

the second recent the activity. in and downward, additional our year infrastructure trend light we to realign as continue expenses half expect corporate of Corporate of savings see we in to

As America of The million XX% of share reverse XX in million by target commanding the AAG brands XX% the the end annualized of and savings nearly year. with market combined and issuance. XX, to the Finance now of a HMBS share XX our XXX measured secure savings of to year-to-date, way mortgages, expect we in approximately have of additional market HECM to a are lead an by June million annually,

ability product the market. Despite platform and of traction see and in increase pipeline to awareness that the complex difficult to engine integration, AAG the sophisticated we a economic and raise acquisition the Our starting marketing are and positive our amid has addressable further processes. environment operational

of Finance in of in assisted quarter XXXX to use resulted Compared in XX% retirement quarter, a a the mortgage. loans. reverse through ways second the thrive the in number first over increase finding customers During of the America to funded this

AAG acquisition UPB, our to XXX quarter, the leading our XX% in platform increase integration AAG prior in This the Prior began we million of of AAG funded platform, was the business. the industry. a we reverse quarter originator the into loans of as the HECM from

the in long-term compared we're QX jumbo proprietary the to is significant and done we believe opportunity to as AAG energized we seeing volume into unified, and and teams work our the in our a QX of reverse morale operations through and loans is Today well. HECM sell high, are already results. us. We've potential Our and for front exists to successfully team the AAG existing doubled the substantial opportunity infrastructure integrate platform

streamline while of these of the work corporate start over phase. transitional XXX continuing on temporary, support through the integration, boarded to have employees we retail were as our we Many resources the Since costs. bolster our to and overhead AAG segment channel

which strengthen vendors educational are XXX our ecosystem, the engaged expand nearly marketing and of boarded majority on into we reach. advertising Additionally, and vendors to our

working via to in alleviate from out overlapping needs come of systems. Finally, than annually and optimize advertising. effort systems retirees leadership fully vendor origination and more consumers multiple and better channel, reach the AAG and Once across challenges identify growing of direct the redundant the will the consolidate to to working which targeted costs, brand we us tirelessly consumer to nation. that integrated, enable The serve are loan AAG an engagements and marketing and retail reporting XX million brands is

We're are quarter which rest a been the leader over months. its end since optimistic drive that in about highest and funded and pipeline continued stands submission by has should the This since for volume positive its of coming it the growth in years, encouraged growth has level channel, and sign of in pipeline currently volume XXXX. and reverse the XXXX. late volumes wholesale is a strength growth Finance at of March, increase seen the submission in America's legacy market XX

help around We if and know awareness retirement are centered we increase America, which customer financial our continue to new gap we and we can have substantial opportunity base, innovate to solutions we positioned products solutions, our address to believe the well of the grow home. solve, in

trillion our and few Our trillion with to This ways their a their the financial homes yet in last customers homeowners than the market goal to data. help used at our senior to better harness core, homeowners a can trends achieve different savings is more its they opportunity The outcome as gap X have as superpower This of it latest is help seen retirement for use XX goals. the obtain consistent quarters. U.S. according home is their is we've later life. to helping be existing macroeconomic home the approaching equity value power in amassed older

In in summary, I'm proud a this integration. complex navigated of making huge challenges team strides our how quarter, while

seeing and prominent operations With size core manage our right pass investing discuss call prudently We I to of continue signs Johan to to growth. our in expenses where while segments that financials. we're will our the the business

overview our into and financial the quarter. provide results a I on brief good Thank of specifics dive before you everyone. Graham the will afternoon I

per bank per driven were by an of or share. fully fully company results, recognized to Turning share, continuing spreads was of portfolio net a to by basis, interest million adjustments On loss diluted negative loss XX a our the net operating company XXX the diluted value million rates from primarily QX. fair which late as and in the collapses $X.XX the or the impacted recognized adjusted fallout $X.XX

funded Graham the operational UPB acquired investments AAG outpaced XXX over additional were million increase platform. we the XX% As in see we In Retirement these in made although for to in further we mentioned, increase the by have quarter an and funded infrastructure quarter. in begun a first volumes, Solutions, the

volume see are we continue we We and submission seeing expect to the as pipeline. in AAG business integrate fund quarter-over-quarter growth our in increase to already in this fully

Revenue as the margins higher to retail margin business. channel leads the towards shift AAG increased

the X.X% This increased XX% For X.X% Combined offset net in total the saw HECM grew X.X% was, revenue revenue of with quarter-over-quarter. however, to prior revenue from in quarter. quarter QX. This from platform. the is increase were to attributable expenses increase margin by the XX% roughly margins drop in we a roughly and volume, million. to costs declined we includes to AAG transitory ensure in quarter-over-quarter from that Expenses those increase expect XX QX. see of XX smooth million costs on a This starting to in needed QX, increased the boarded transition infrastructure by QX

expect the higher invested see in marketing we this we expand beyond in fund volumes growth and volume pipeline. addition, QX to to headcount and In and as

future progress in Our transformation to that team updates periods. business look and providing environments. operate macro is model focused efficient this We all an can on in creating sustainable forward on

streamlined more infrastructure. we've Speaking to corporate strides a towards of continued transformations, make

However, on match in infrastructure title operations, further in a the of intensive discontinued of to Xrd, and time complete With operations. that ongoing the our reduce July the sale is we a current transactions this recent the closed quarter, work position are we wind as now sale the initiative our to a business down to insurance efforts. completed

of from as March week rising Cash the declined balance widening totaled July. does of assets sale not value balance due of completed declined credit the rates fair Please $XX.X quarter-over-quarter balances portfolio XXst. million during transaction title $XX X% interest of total as this XXth, the the this spreads. to to sheet, business include yet Moving from our was insurance as to billion the that first note combined of and of our proceeds June assets the down

we hand closing to was remainder that, difficult In key a quarter of are company, XXXX. the now remarks. direction conclusion, starting for With and for for to trending see we Graham financially optimistic are me the but indicators back it a let in positive it performance

executing would for position Yes. on business Thank remain we the focused will believe you, and We our we long-term. we strategy took as actions Johan. our best said

share. $X.XX customer expect base acquisition $X.XX market the we is per our year the said, meet needs are call integrated Looking share with tailored fully questions. of is company and not per earnings do that to achieve ahead XXXX, product full previous remainder $X.XX life earnings them can to our that, of we our That AAG potential Through we'll to our customers' the the and to of we adjusted in $X.XX to the innovation, once believe are open stabilizes. serve And powerhouse and grow they the confident solutions. we wherever with for guidance retirement marketing

[Operator Instructions].

with question comes Raymond first from Your James. Stephen Laws

line Your open. is

of Johan. little looking below what on on afternoon your you and first, Thank comments. an good Graham us A volume you. up of I Hi, sequentially, was guess, couple outlook I follow-up can for. a questions give some maybe

look So of run July like back rate as volumes half what we to quarterly year? can the is about at talk you going you maybe what and look be think the

thanks Yes, Stephen.

$XXX in would the we on we like would something QX growth and pipeline to our with range. see trajectory, $XXX $XXX we'd something expect QX -- the million we to submissions, we range. on based currently what in And expect if look million to continue this be in million So

volume the home the on final origination is rest To the in say about if look I'd million you release, think $XXX reverse, point Stephen, that is that, $XX right. earnings at a of million, improvement, the

helpful. That's Okay.

[Multiple Speakers]

Yes.

reverse reverse just So I'm volumes. just with the the speaking numbers are side --

reverse those on numbers. Just

look $XX Does Great. I touch make compare I XX? more mentioned you just the expenses, from that going mentioned I Graham, at expense want right on sure and number to that's million to XX should To that Okay. maybe basically to we reductions. think triangulate what Johan numbers. million the to $XX

company, for million the is solutions Stephen, retirement $XX talking is was the right. and the entire million allocations, overall the corporate before that No, $XX the infrastructure Graham only for

unallocated gets allocated so of a And that some in behind portfolio of it solution chunk segment. the management. is to And it then the of some gets retirement corporate stays big allocated and to

synergies be expect what from I Okay. But that? you can think million over $XX time do and here frame

hit a basis generate $XX just a Between look chalk and end hit now the delta, at the year, and chalk at if on expect if you just the should you that the that, delta the of that we an end -- those annualized today to and line line you million. of look savings you year at be

Great. And question. one last

marks referenced have Just update sale from the the quarter a title and you does remainder since balance do or end? lender fair include not the value of cash quarter-to-date on the that services you sales

a bit dictate and It's pricing, so in little market that early. are. where the We're spreads will

to this So it's point. early an a little indication bit at give

lot. a thanks Okay, Appreciate it.

Alright.

[Operator time. I to at further questions over Graham turn this call Instructions]. no Fleming. There are the back

Thank you. for next at of everybody like you And very to I'd thank end our earnings Thank call. update call. joining everybody our much. QX the on we'll

today's concludes call. This conference

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