Finance of America Companies Inc.

Good afternoon, ladies and gentlemen, and welcome to the Finance of America first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this call will be recorded. I would now like to turn the conference over to Michael Fant, Senior Vice President of Finance at Finance of America. Please go ahead, Michael.

Thank you, and good afternoon, everyone. and welcome to Finance of America's first quarter earnings call. With me today are Patty Cook, Chief Executive Officer, Johan Garrett, Chief Financial Officer, and Graham Fleming, President. As a quick reminder, this call is being recorded, and you can find the earnings release on our investor relations website at www.financeofamerica.com. In addition, we will refer to certain non-GAAP financial measures on this call. You can find reconciliations of non-GAAP to GAAP financial measures discussed in today's call in our earnings press release and on the investor relations page of our website. Also, I would like to remind everyone that comments on this conference call may be forward-looking statements regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations and are subject to the safe harbor statement for forward-looking statements that you will find in today's news release. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of risks or other factors, including those that are described in the risk factor section of Finance of America's Form 8K, originally filed with the SEC on April 7, 2021. We are not undertaking any commitment to update these statements if conditions change. Please note, these are interim period financials and are unaudited. Now, I'd like to turn the call over to Finance of America's Chief Executive Officer, Patty Cook. Patty?

Thanks, Michael, and good afternoon, everyone. Before we cover our first quarter results, I want to mention a very important milestone for Finance of America. On April 1st, we completed our business combination with Replay Acquisition Corporation, and Finance of America officially started trading on the New York Stock Exchange on April 5th. We are excited for the next stage of Finance of America's evolution, and I would like to express my gratitude to the entire team, Replay, and all of our clients who made this accomplishment possible. Besides closing the transaction, the first quarter was a busy time for our company. We recently launched a new vertical, Finance of America Home Improvement, via the acquisition of Renovate America's industry-leading home improvement financing product. Finance of America Home Improvement's proprietary technology platform that helps consumers improve their homes while giving contractors the tools they need to grow their businesses. provides us access to the large and growing home renovation market. Finance America Reverse also launched Equity Avail, a groundbreaking new mortgage product designed to provide greater financial flexibility for homeowners at or near retirement. This product will combine elements of a traditional mortgage with a reverse mortgage to improve cash flow and help retirees accomplish their retirement goals. Finance of America Home Improvement and Equity Avail are the latest examples of our proven ability to innovate and create products that meet the evolving needs of our customers. It is the proprietary insights gleaned from our powerful end-to-end platform that enable us to identify gaps in the market providing us with a sustainable, competitive advantage. Solving problems is what we do best, and we look forward to continuing to introduce new innovations across our platform that serve large addressable markets with strong tailwinds, thereby further diversifying our business model to ensure growth over time. Furthermore, Capitalizing on M&A opportunities is part of our DNA. Since the company's formation in 2013, Finance of America has successfully acquired, integrated, expanded, and optimized 16 companies in industries spanning from originations and lender services to capital markets. We remain proactive in identifying accretive market opportunities that further complement our existing lines of business and will drive profitable growth. And as you may have seen, we recently announced an agreement to acquire certain assets of Parkside Lending, a wholesale and retail lender that will strategically increase our third-party origination coverage. Another key milestone was bringing on Johann Garrick as CFO to further strengthen our leadership team Johan is a seasoned executive with extensive finance experience and a proven track record, with leadership positions at major publicly traded financial institutions. I look forward to working with him as we go forward as a public company. Turning to our results for the first quarter, Finance of America continued to generate strong performance. further reinforcing the strength of our diversified consumer lending platform, spanning mortgages, reverse mortgages, and commercial loans offered across distributed retail, third-party brokers, and digital direct-to-consumer channels. In addition, our fee-based portfolio management and lenders services businesses contributed meaningfully to this quarter. First quarter highlights included near record volumes and strong growth for our reverse originations business, where growth drivers are less correlated with the direction of interest rates. More specifically, baby boomers are increasingly looking to age and place, and our reverse mortgage products provide the opportunity to this demographic to tap the equity accumulated in their homes. Commercial loans to residential real estate investors continue to accelerate in the first quarter. And looking ahead, the aging housing stock and the market's bias for newer construction or remodeled properties bode well for ongoing demands in this segment. Turning to mortgage originations, key performance metrics remain strong on a year-over-year basis, though softened from record levels in the prior quarter. Consistent with the decline in primary-secondary spreads, our mortgage origination margins declined quarter over quarter, and that trend has continued into the second quarter. In addition, as refinancing activity wanes, overall industry volumes are expected to decline. On the other hand, our distributed retail channel is ideally positioned to capitalize on what we expect to be a strong purchase market. Aside from our lending segment, our lender services segment provides a broad offering of services, including title and appraisal management. The increase in business per client and the growth in new clients continues to drive differentiated and uncorrelated fee income. as the channel experienced its best quarter ever. Turning to portfolio management, our strong relationship with investors allows us to respond to opportunities in the market through each cycle. Over time, we expect to continue to invest in assets such as MSR and residuals as we did in the first quarter, which will provide stable and consistent revenue. Looking ahead, We believe macro tailwinds from growing consumer wealth will fuel expanding consumer credit and will continue to support the long-term growth prospects of our businesses. One of our key differentiating factors is our diversified model, both within lending and across our platform, that generates sustainable returns across economic cycles and capitalizes on market tailwinds. In fact, we expect contributions from our non-mortgage segments to continue to increase during the remainder of the year, while the mortgage origination segment declines year over year. We estimate, based on the current market, the net effect could be a reduction in adjusted EBITDA for full year 2021 of roughly 20% year over year. which would indicate a continuation of return on pro forma equity north of 20%. We remain focused on the multitude of opportunities presented to us by maximizing the potential of our existing platform as we look to strategically add the right new products, businesses, or distribution channels. So with that, I will now turn the call over to Johan to discuss our financials in more detail. Johan?