Finance of America Companies Inc.

Welcome to the Finance of America second quarter 2024 earnings call. At this time, I would like to hand the call over to Mr. Michael Fantz. Please go ahead, sir.

Thank you. Good afternoon, everyone, and welcome to Finance of America's second quarter 2024 earnings call. With me today are Graham Fleming, Chief Executive Officer, Kristen Siefert, President, and Matt Engel, Chief Financial Officer. As a reminder, this call is being recorded and you can find the earnings release and presentation on our investor relations website at ir.financeofamericacompany.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 to the extent available without unreasonable effort in our earnings press release and presentation on the investor relations page of our website. 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, 2023, filed with the FDC on March 15, 2024. The risk factors may be amended and updated in our subsequent filings with the FDC. We are not undertaking any commitment to update these statements if conditions change. Please note that today we are discussing interim period financials, which are on an audit. Finally, following the recently completed reverse stock split effective July 25th, all earnings per share metrics for both current and historical periods will be calculated using the updated basic and fully diluted share count to provide an apples-to-apples comparison across time periods. Now, I'd like to turn the call over to Finance of America's Chief Executive Officer, Graham Flynn.

Graham? Yeah, thank you, Michael. Good afternoon, everyone, and thank you for joining us today. To begin, I would like to review our results and discuss several key events that transpired during the quarter and how they will impact FOA. Kristen will then share some important operational updates, followed by a review of our financials from Matt. For additional information, we have posted a supplemental presentation to our investor relations website, which we encourage you to review in concert with today's call. Overall, I'm pleased to share that Finance of America continues to deliver improved fundamentals across the business in the second quarter. resulting in our fourth consecutive quarter of improved A&I. As a team, we've been dedicated to executing our strategic plan, strengthening our operations, and advancing our path to profitability. As a result of our efforts, we see continued growth across the business, both volume and revenue grew, and expenses declined over the prior quarter. Taking a high-level look at the numbers on a continuing operations basis, we recorded gap net loss of $5 million, or $0.20 per basic share. On an adjusted basis, we recognize a net loss of $1 million, or $0.05 per fully diluted share, and adjusted EBITDA of positive $9 million. This marks the first quarter of positive adjusted EBITDA since 2022. Looking back, Q2-23 marked the first quarter of the combined businesses of Finance of America and AAG. Since that time, our revenues, excluding other fair value changes, have grown by 33% and our expenses have reduced by 26%. Year over year, we have markedly reduced our ANI from 26 million to 1 million. Furthermore, we have made a substantial turnaround in adjusted EBITDA, improving from a negative 26 million in 23 to a positive 9 million in 24. Beyond these improved results, we see significant milestones throughout the second quarter that we believe further establish a foundation for continued operational improvement and growth. First, we announced a one for 10 reverse stock split recently completed in July, which put us back in compliance with the New York Stock Exchange continued listing standards. As we have said in the past, we're committed to maintaining access to the public markets and trading on the NYC. Second, we announced an exchange offer support agreement and that holders of over 93% of our senior unsecured notes had indicated their intent to participate in the exchange offer. As of today, holders of over 99% of senior unsecured notes have indicated their intent. This is a significant milestone for the company and the transactions contemplated by the exchange offer support agreement will have later maturities, enhance our financial flexibility, and help align our cash flows with our debt obligations, thereby improving our capital structure for the future. We appreciate the partnership we have with these investors and look forward to their continued support. Next, we close on two related warehouse facilities with two lending partners new to the reverse space to help minimize haircuts on our proprietary loan production. These new loan relationships are another example of greater interest being shown to the reverse mortgage industry by interested counterparts. Lastly, the release of the preliminary term sheet for Ginnie Mae's HMDS 2.0 program at the end of June marked an important step in providing enhanced liquidity to the reverse mortgage industry. This exciting program provides a more favorable HMDS structure that will significantly reduce the capital required for buyouts and allows for the securitization of these buyouts into pools backed by Ginnie Mae. This has the potential to have a positive impact on earnings, tangible net worth, and liquidity. Each of these events has left Finance of America in a better position to achieve long-term success and help homeowners unlock the joy that comes from realizing the full potential of their retirement. Our entire team has worked diligently to improve the operations of the business while integrating and becoming a unified Finance of America. We sincerely appreciate all the hard work and I want to share a huge thank you to everyone that has been a part of our company's transformation over the past two years. To tell us more about the brand transition to Finance of America and further operational updates, let me turn the call over to Kristen.