Finance of America Companies Inc.

Good afternoon, thank you for attending today's finance of America first quarter 2023 earnings call my name is Francis and i'll be your moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad I would now like to pass the conference over to our host Michael Sant with finance of America.

Thank you and good afternoon everyone. Welcome to Finance of America's first quarter earnings call. With me today are Graham Fleming, Chief Executive Officer, and Johann Garrett, Chief Financial Officer. As a reminder, this call is being recorded and you can find the earnings release and supplement 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 to the extent available without unreasonable efforts discussed on today's call in our earnings press release and supplement 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 within the meaning of the Private Securities Litigation Reform Act of 1995 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 earnings 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 factors section of Finance of America's annual report on Form 10-K for the year ended December 31, 2022. filed with the SEC on March 16, 2023. As such, risk factors may be amended and updated in our subsequent filings with the SEC. 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 would like to turn the call over to Finance of America's Chief Executive Officer, Graham Fleming. Graham?

Thank you, Michael. Good afternoon everyone. And thank you for joining us on our first quarter, 2023 earnings call. I'm excited to join the call today as finance of America's CEO. I believe strongly that finance for America provides a truly differentiated and modern retirement solutions platform that gives older Americans more choices and new ways to consider and fund their retirement. And I am honored to drive that vision forward for today's call. I will begin with a brief discussion of our financial results for the quarter. I will then spend the remaining time focused on our go-forward business structure and strategic priorities. Johan will then offer a deeper dive into our financials. We achieved several milestones in the first quarter. This was largely due to our efforts over the past year to streamline the organization and invest in core businesses that underpin our modern retirement platform with home equity as its centerpiece. Current demographic trends point to a substantial market opportunity, and we believe FOA has the significant competitive advantages needed to capitalize on this. On a continuing operations basis, we recorded gap net income of $55 million, or 29 cents per basic share in Q1, driven primarily by favorable increases in valuations across our asset base. On an adjusted basis, we recognized a net loss of $15 million, or $0.08 per fully diluted share. For the year, we expect our adjusted diluted earnings per share for continuing operations to be between $0.09 and $0.12 as we complete the integration of AAG and optimize our corporate structure. As Johann will touch on in a moment, we recently updated our segment reporting to align with our new operating structure. We believe the new structure offers a simpler and more accurate breakdown of Finance of America today and moving forward. Both our retirement solutions and portfolio management businesses delivered profitable results on an adjusted basis in Q1. This was encouraging as we expected a substantial reduction in volume for the first quarter of the year. Overall profitability in our continuing operations was down quarter over quarter on an adjusted basis as lower profitability in our operating segments wasn't fully offset by a reduction in corporate expenses. We remain focused on our efforts to right-size our corporate structure to better align with our current footprint and expect to materially complete this work by the third quarter of 2023. Since the first quarter of 2022, we have seen a 32% reduction in corporate salaries and benefits, and we expect to see further reductions in the coming quarters. Finally, in line with our commitment to strengthen our balance sheet, a series of actions, including the recently closed AEG acquisition as well as the concurrent $30 million equity raise from existing shareholders, increase our tangible book value for continuing operations from $108 million at the end of last year to over $200 million this quarter. A significant improvement and further validation that our efforts are beginning to deliver real results. In furtherance to our balance sheet and operating improvement efforts, in Q2, we signed an agreement to sell a majority share of the remainder of the lender services businesses. This transaction is expected to close in Q2. The previously announced sale of our title insurance business to Essence is also on track to close early in Q3, subject to regulatory approvals and customary closing conditions. Once both of those transactions have closed, we will have completed the full-scale transformation of Finance of America into a modern retirement solutions platform. Our new structure and suite of innovative solutions are designed to help retirees age in place and thrive later in life. Looking beyond, we expect that the acquisition of the assets of AAG will materially enhance Finance of America's growth prospects and position the company as a leader in the retirement solutions field. This acquisition marks a new chapter in our strategic plan to expand awareness of our offerings and accelerate growth in the market. We are quite optimistic about what this new combination means for our business in terms of, one, increased market share as we are now the largest originator of reverse mortgages by volume. Two, greater reach and awareness among consumers as a result of our increased presence and brand awareness. And three, our ability to grow the customer base through a combination of direct-to-consumer outreach via the AEG brand and strategic educational partnerships and initiatives via Finance of America Reverse. Importantly, AAG's expanded reach and retail presence will complement the innovative proprietary product suite at Finance of America Reverse. The AAG brand's direct consumer retail channel alone reaches more than 10 million consumers annually via targeted marketing and advertising. This combination creates a remarkable opportunity for Finance of America to become a lifelong resource for an enormous number of customers. We strongly believe there is a growing need for a modern retirement solutions platform like ours. In the US, the retirement savings gap is approaching $4 trillion, yet homeowners age 62 and older have amassed more than $11.5 trillion in home equity value. This is the market opportunity, helping older homeowners use their homes as a superpower to achieve their financial goals, whether by tapping home equity via AAG or FAR, securing a Finance of America home improvement loan, or generating additional income by home sharing with Silver Nest. Together, AAG and FAR will enable the overall Finance of America company to better serve the growing needs of retirees across the nation. We are excited by the long-term potential of Finance of America and our modern retirement solutions platform. Given the transformative changes in investments we have made to position Finance of America for the future, we are confident our strategy will result in continued growth and success. And with that, I will pass the call to Johan to discuss the financials.