Financial Performance - Net income from continuing operations for 2024 was $40 million, translating to $1.78 basic earnings per share[4]. - Adjusted net income for the year was $14 million, or $0.60 adjusted earnings per share, reflecting a $97 million improvement compared to 2023[4]. - Adjusted EBITDA for 2024 was $60 million, marking a significant recovery in profitability[4]. - Total revenue for 2024 increased by 44% compared to 2023, driven by higher funded volumes and improved margins[13]. - Total expenses decreased from $209 million in 2023 to $195 million in 2024, reflecting operational efficiencies[13]. - The Retirement Solutions segment achieved pre-tax income of $11 million and adjusted net income of $38 million for the year[10]. - The Portfolio Management segment recognized pre-tax income of $84 million, benefiting from positive fair value adjustments and increased yield on residual interests[12]. - For the year ended December 31, 2024, the company reported a pre-tax income of $11 million for Retirement Solutions, $84 million for Portfolio Management, and a loss of $52 million for Corporate & Other, totaling a pre-tax income of $43 million[29]. - The adjusted net income for the year 2024 was $38 million for Retirement Solutions, $42 million for Portfolio Management, and a loss of $66 million for Corporate & Other, resulting in a total adjusted net income of $14 million[29]. Quarterly Performance - Total revenues for Q4'24 were $(105.623) million, compared to $290.073 million in Q3'24 and $338.171 million in 2023, indicating a significant decline[18]. - Net income (loss) from continuing operations for Q4'24 was $(142.629) million, compared to $203.748 million in Q3'24 and $40.418 million in 2023[18]. - Basic earnings (loss) per share from continuing operations for Q4'24 was $(5.95), down from $8.48 in Q3'24 and $1.78 in 2023[20]. - Adjusted EBITDA for Q4'24 was $18 million, down from $32 million in Q3'24 and $(17) million in Q4'23[21]. - The company reported a net loss attributable to controlling interest of $(59.088) million in Q4'24, compared to a profit of $84.203 million in Q3'24[21]. - Total expenses for Q4'24 were $87.056 million, an increase from $80.308 million in Q3'24[18]. - For the three months ended December 31, 2024, adjusted net income for Retirement Solutions was $8 million, Portfolio Management was $13 million, and Corporate & Other reported a loss of $15 million, resulting in a total adjusted net income of $5 million[26]. - The adjusted earnings per share for the same period were $0.31 for Retirement Solutions, $0.52 for Portfolio Management, and $(0.61) for Corporate & Other, leading to an overall adjusted earnings per share of $0.21[26]. - The weighted average share count for the three months ended December 31, 2024, was 24,429,615 shares[26]. Capital and Equity - Total equity rose from $272 million in 2023 to $316 million in 2024, an increase of 16%[8]. - Tangible net worth improved by 421%, from $19 million at the end of 2023 to $99 million at the end of 2024[8]. - The weighted average shares outstanding for Q4'24 were 9,930,520, slightly up from 9,924,671 in Q3'24[20]. Operational Insights - Reverse mortgage funded volume increased by 19% year-over-year, with $534 million produced in Q4, exceeding guidance[4]. - The company emphasizes its focus on expanding its customer base and enhancing its digital capabilities to improve loan origination quality[36]. - The company is subject to various risks, including changes in interest rates and compliance with extensive regulations, which could impact future performance[36]. Non-GAAP Measures - The company has revised its definitions of adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share to include all non-cash equity-based compensation starting from Q3 2024[43]. - Adjusted net income (loss) is utilized by management to assess the underlying key drivers and operational performance of the continuing operations of the business[46]. - Adjusted EBITDA provides visibility to the underlying operating performance by excluding certain items that management does not believe are representative of core earnings[50]. - Adjusted earnings (loss) per share is calculated as adjusted net income (loss) divided by the weighted average shares outstanding, including various classes of stock[52]. - The company emphasizes that non-GAAP financial measures should not be considered as alternatives to net income (loss) or other performance measures determined in accordance with U.S. GAAP[41]. - Management believes that the presentation of non-GAAP measures enhances investors' understanding of certain aspects of financial performance[40]. - Adjusted EBITDA includes adjustments for income taxes, changes in fair value of loans and securities, and certain non-recurring costs[48]. - The company cautions users of its financial statements not to place undue reliance on non-GAAP financial measures due to their limitations[42]. - Adjusted net income (loss) may include other adjustments based on facts and circumstances to provide a supplemental means of evaluating operating performance[47]. - The company’s management evaluates performance through non-GAAP measures to maintain and grow the business[39]. Future Outlook - The company plans to host a conference call on March 11, 2025, to discuss the results for the fourth quarter and full year ended December 31, 2024[32].

Industry Overview - The Zacks Mortgage & Related Services industry is facing challenges due to mortgage rate volatility and macroeconomic factors, leading to a tightening purchase market and declining refinancing volumes [1][5] - The industry consists of providers of mortgage-related loans, refinancing, and loan-servicing, with non-banks gaining market share as banks retreat due to higher compliance and capital requirements [3] Current Trends - High mortgage rates have kept homebuyers sidelined, with the 30-year fixed rate remaining between 6% and 7% for over two years, affecting mortgage demand and origination [4] - Mortgage rates are expected to remain elevated due to strong U.S. economic fundamentals, leading to a negative trend in mortgage originations and refinancing activities [5] - The competitive landscape is intensifying, with forecasts indicating an increase in U.S. single-family mortgage debt outstanding, driven by house price appreciation, but tighter margins may challenge profitability for many originators [6] Servicing Segment Insights - The servicing segment is expected to provide support as companies face declines in gain-on-sale margins and lower loan origination volumes, with slow prepayment speeds creating tailwinds for mortgage service rights (MSR) [7] - The U.S. single-family mortgage debt outstanding is projected to reach $14.7 trillion by the end of 2025, presenting significant growth opportunities in servicing portfolios [7] Industry Performance - The Zacks Mortgage & Related Services industry currently holds a Zacks Industry Rank of 141, placing it in the bottom 43% of over 249 Zacks industries, indicating bleak near-term prospects [8][9] - The industry has underperformed the broader Zacks Finance sector and the S&P 500, gaining 13.8% over the past year compared to 28.8% and 25.2% for the sector and index, respectively [11] Valuation Metrics - The industry trades at a price-to-book (P/B) ratio of 4.77X, compared to the S&P 500's 8.89X, with historical trading ranges showing a high of 11.62X and a low of 1.18X over the past five years [13] - The Zacks Finance sector's trailing 12-month P/B ratio is 4.16X, indicating that the mortgage and related services industry is trading at a premium compared to its broader sector [15] Company Highlights - **PennyMac Financial Services, Inc. (PFSI)**: Focuses on mortgage origination and servicing, with a projected earnings estimate of $14.02 per share for 2025, reflecting a 21.7% increase year-over-year [19] - **Lending Tree, Inc. (TREE)**: Operates an online marketplace and is diversifying its offerings, with a 2025 earnings estimate of $3.37 per share, indicating a 26.4% rise from the previous year [24] - **Finance of America Companies (FOA)**: A diversified consumer lending platform with a focus on mortgages and innovative products, projecting a 256% increase in earnings to $2.67 per share for 2025 [28]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum if their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer strategy involves investing in bargain stocks that exhibit recent price momentum, which can be identified using tools like the Zacks Momentum Style Score [3] Group 2: Finance of America Companies Inc. (FOA) Analysis - FOA has shown significant recent price momentum with a four-week price change of 54.2%, indicating growing investor interest [4] - Over the past 12 weeks, FOA's stock has gained 184.1%, demonstrating its ability to deliver positive returns over a longer timeframe [5] - FOA has a Momentum Score of B, suggesting it is an opportune time to invest in the stock to capitalize on its momentum [6] Group 3: Earnings Estimates and Valuation - FOA has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investors and drive prices higher [7] - The stock is currently trading at a Price-to-Sales ratio of 0.39, indicating it is undervalued, as investors pay only 39 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides FOA, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Viewpoint - Finance of America Companies Inc. (FOA) shows a significant improvement in earnings outlook, making it an attractive investment option as analysts continue to raise earnings estimates for the company [1][3]. Estimate Revisions - The rising trend in estimate revisions reflects growing analyst optimism regarding the company's earnings prospects, which is expected to positively impact its stock price [2]. - For the current quarter, the earnings estimate is projected at $0.45 per share, indicating a year-over-year increase of +150%. The Zacks Consensus Estimate has risen by 28.57% due to one upward revision and no negative revisions in the last 30 days [4]. - For the full year, the earnings estimate stands at $0.75 per share, representing a change of +118.75% from the previous year. The consensus estimate has surged by 581.82% following one upward revision and no negative revisions [5]. Zacks Rank - The positive estimate revisions have led Finance of America Companies to achieve a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts on the upward revisions [6]. - Stocks with a Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500, suggesting a favorable investment environment for FOA [6]. Stock Performance - Finance of America Companies shares have increased by 14.6% over the past four weeks, indicating investor confidence in the company's earnings growth prospects [7].

Core Viewpoint - Finance of America Companies Inc. (FOA) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, particularly influenced by institutional investors who adjust their valuations based on these estimates [4][6]. - For Finance of America Companies, the rising earnings estimates indicate an improvement in the company's underlying business, which is expected to positively affect its stock price [5][11]. Earnings Estimate Revisions - For the fiscal year ending December 2024, Finance of America Companies is projected to earn $0.75 per share, reflecting a 118.8% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Finance of America Companies has surged by 581.8%, indicating strong upward revisions by analysts [8]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Finance of America Companies to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for near-term price appreciation [11].

Company Overview - Finance of America Companies Inc. (FOA) currently holds a Momentum Style Score of A, indicating strong potential for momentum investing [3] - The company has a Zacks Rank of 1 (Strong Buy), suggesting a favorable outlook compared to the market [4] Performance Metrics - Over the past week, FOA shares increased by 2.83%, while the Zacks Financial - Mortgage & Related Services industry declined by 0.67% [7] - In the last month, FOA's price change was 14.58%, significantly outperforming the industry's 0.09% [7] - Over the past quarter, FOA shares rose by 74.05%, and over the last year, they increased by 155.81%, compared to the S&P 500's gains of 10.27% and 32.66% respectively [8] Trading Volume - FOA's average 20-day trading volume is 132,662 shares, which serves as a bullish indicator when combined with rising stock prices [9] Earnings Outlook - In the past two months, one earnings estimate for FOA has increased, while none have decreased, raising the consensus estimate from $0.11 to $0.75 [11] - For the next fiscal year, one estimate has moved upwards with no downward revisions, indicating a positive earnings outlook [11] Conclusion - Given the strong performance metrics and positive earnings outlook, FOA is positioned as a promising investment opportunity with a Momentum Score of A [12]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" strategy, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum if their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Finance of America Companies Inc. (FOA) Analysis - FOA has shown a four-week price change of 14.6%, indicating strong investor interest and recent price momentum [4] - Over the past 12 weeks, FOA's stock has gained 74.1%, with a beta of 1.22, suggesting it moves 22% more than the market [5] - FOA has a Momentum Score of A, indicating a favorable time to invest based on its momentum characteristics [6] Group 3: Earnings Estimates and Valuation - FOA has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [7] - The stock is currently trading at a Price-to-Sales ratio of 0.30, suggesting it is undervalued as investors pay only 30 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides FOA, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies to help identify potential winning stocks based on various investing styles [9]

Financial Performance - Net income from continuing operations for the three months ended September 30, 2024, was $203,748 thousand, compared to a loss of $172,468 thousand in the same period of 2023[16]. - Basic earnings per share from continuing operations was $8.48 for the three months ended September 30, 2024, compared to a loss of $7.36 in the same period of 2023[18]. - Total revenues for the three months ended September 30, 2024, were $290,073 thousand, a significant increase from a loss of $70,440 thousand in the same period of 2023[16]. - Comprehensive income attributable to controlling interest for the three months ended September 30, 2024, was $84,213 thousand, compared to a loss of $65,351 thousand in the same period of 2023[20]. - The company reported net income (loss) attributable to controlling interest of $84,203 thousand for the three months ended September 30, 2024, compared to a loss of $65,363 thousand in the same period of 2023[18]. - The net income for the quarter was $74,576, contributing to a total of $178,320 for the year[32]. - Net income for the nine months ended September 30, 2024, was $178,320, compared to a net loss of $382,821 for the same period in 2023[41]. - The company reported net income before taxes of $208,173,000 for the three months ended September 30, 2024, compared to a net loss before taxes of $172,571,000 for the same period in 2023[160]. - Net portfolio interest income for the three months ended September 30, 2024, was $63,061,000, down from $71,540,000 in the prior year, representing a decline of about 11.1%[158]. - Total expenses for the three months ended September 30, 2024, were $80,308,000, compared to $105,426,000 in the same period of 2023, reflecting a decrease of approximately 23.8%[160]. Assets and Liabilities - Total assets increased to $9,157,545 thousand as of September 30, 2024, compared to $8,117,754 thousand as of December 31, 2023, representing a growth of 12.8%[14]. - Total liabilities increased to $8,346,965 thousand as of September 30, 2024, from $7,531,958 thousand as of December 31, 2023, reflecting a rise of 10.8%[14]. - The net carrying value of assets in variable interest entities (VIEs) increased to $810,580 thousand, up from $585,796 thousand, marking a growth of 38.3%[14]. - The balance of additional paid-in capital reached $953,023 as of September 30, 2024[24]. - The balance of retained earnings (accumulated deficit) was $(639,807) as of September 30, 2024[24]. - Total cash consideration for the acquisition amounted to $140.9 million, with 1,969,299 Class A LLC Units issued to the Seller at a fair value of $12.40 per share[65]. - The total assets acquired in the transaction were valued at $5,596.1 million, including loans held for investment of $5,448.7 million[65]. - The liabilities assumed in the acquisition totaled $5,380.8 million, primarily consisting of HMBS related obligations of $5,354.4 million[65]. Cash Flow and Investments - Net cash used in operating activities was $(317,610) for the nine months ended September 30, 2024, compared to $(10,233) for the same period in 2023[41]. - Net cash provided by investing activities was $145,598 for the nine months ended September 30, 2024, compared to $139,331 for the same period in 2023[41]. - Proceeds from the issuance of HMBS related obligations were $1,457,360 for the nine months ended September 30, 2024, compared to $1,553,957 for the same period in 2023[41]. - Payments on HMBS related obligations increased to $(1,622,531) for the nine months ended September 30, 2024, from $(1,433,751) in 2023[41]. - Cash paid for interest increased to $274,887 for the nine months ended September 30, 2024, compared to $210,840 for the same period in 2023[41]. Equity and Stock Activity - As of September 30, 2024, total equity increased to $456,456, up from $143,512 at the end of the previous quarter[24]. - The total shares outstanding increased to 9,925,802, reflecting ongoing equity management strategies[24]. - The company completed a 1-for-10 reverse stock split on July 25, 2024, affecting the number of Class A Common Stock shares[48]. - The company issued 2,173,912 shares of Class A Common Stock for $30,000,000 in conjunction with the AAG Transaction on March 31, 2023[174]. - The company issued 705,841 Class A LLC Units to AAG/Bloom on October 29, 2024, following the satisfaction of control conditions related to the AAG Transaction[186]. Segment Reporting and Business Strategy - The company restructured its reporting segments into Retirement Solutions and Portfolio Management to align with its business strategy[44]. - The company completed the acquisition of American Advisors Group's assets on March 31, 2023, enhancing its Retirement Solutions segment[47]. - The company has discontinued certain business lines to enhance its reverse mortgage loan business, impacting operations and financial results significantly[67]. - The company ceased operations of Incenter Solutions LLC, with the wind-down substantially complete as of December 31, 2023[46]. Market and Interest Rate Risks - The company’s principal market risk is interest rate risk, primarily due to changes in long-term Treasury rates and mortgage interest rates[303]. - An increase in prevailing interest rates could adversely affect loan origination volume, making new loans or refinancing less attractive to borrowers[304]. - An increase in interest rates may lead to higher delinquency, default, and foreclosure rates, increasing servicing costs and interest expenses on outstanding debt[304]. - The fair value of long-term assets may decrease due to rising interest rates and market spreads[304]. - The estimated change in fair value for loans held for investment subject to HMBS related obligations shows a decrease of $30,833,000 with a 25 bps increase in rates[307]. Legal and Compliance Matters - The Company is a defendant in three lawsuits alleging violations of the California Labor Code, with two claims settled for a de minimis amount[146]. - The California Supreme Court ruled that individual PAGA claims must be arbitrated, affecting the Company's ongoing litigation strategy[146]. - The company has maintained a valuation allowance for deferred tax assets due to insufficient projected future taxable income[154]. - The effective tax rate on continuing operations differs from the U.S. federal statutory rate due to various factors, including state tax rates and discrete tax items[154]. Other Financial Metrics - The company achieved net origination gains of $57,216,000 for the three months ended September 30, 2024, compared to $31,376,000 in the same period in 2023, marking an increase of about 82.5%[158]. - The company recognized impairment charges related to the sales of previously reported segments, totaling $4.5 million for the nine months ended September 30, 2023[70]. - The company experienced settlements of $1,433,751 during the nine months ended September 30, 2023[118]. - The company serviced 2,767 Ginnie Mae loan pools as of September 30, 2024, an increase from 2,552 pools as of December 31, 2023[135].

Financial Data and Key Metrics - Net income for Q3 2024 was $204 million, or $8.48 in basic earnings per share, with adjusted net income of $15 million, or $0.67 in adjusted earnings per share, and adjusted EBITDA of $32 million [7] - Funded volume for Q3 reached $513 million, exceeding the guidance range of $475 million to $500 million [8] - Revenue increased from $79 million in Q2 to $290 million in Q3, driven by higher origination volumes and fair value gains on residual assets [24] - Adjusted EBITDA grew from $10 million in Q2 to $32 million in Q3, reflecting higher revenue and improved margins [25] - Tangible net worth rose to $231 million, or approximately $10 per share [23] Business Line Data and Key Metrics - The retail channel saw a 38% productivity improvement in fundings per loan officer compared to the prior quarter [13] - HomeSafe Second product saw an 89% increase in Q3 compared to Q2, with further growth anticipated [19] - The company completed a reverse stock split and finalized the exchange offer and consent solicitation of its 2025 unsecured notes, enhancing its balance sheet and financial flexibility [9] Market Data and Key Metrics - The company is focusing on consumers aged 55 and older seeking second lien mortgage loans, a segment with significant growth potential [11] - Home equity lending nationwide is on the rise, with denial rates for people aged 55 and older exceeding 35%, presenting a significant opportunity for the company [19] Company Strategy and Industry Competition - The company is modernizing its approach to customer experience and acquisition through a digital-first channel and a modern advertising strategy [15] - The consolidation of the Finance of America Reverse and AAG brands under a single name has been successful, setting the stage for further modernization [14] - The company is expanding its HomeSafe Second product to additional states and lowering loan interest rates to attract more customers [18] Management Commentary on Operating Environment and Future Outlook - The company expects to deliver adjusted earnings per share between $2.60 and $3 in 2025, reflecting confidence in its growth trajectory [31] - The senior population is expected to nearly double by 2050, presenting a massive total addressable market for the company's home equity-based retirement products [37] Other Important Information - The company completed a securitization of its HomeSafe product totaling $794 million in Q3, its third such securitization in 2024, enhancing liquidity [33] - The company is focused on improving its marketing strategy with a new advertising agency, introducing regional and local programs to build brand profile and drive business in strategic markets starting in 2025 [17] Q&A Session Summary Question: Outlook for volume given the backup in rates [39] - The company expects Q4 volume to be similar to Q3, around $500 million, with full-year 2025 volume anticipated to be around $2.7 billion [40][41] - The introduction of the HomeSafe Second program is designed to mitigate the impact of rising rates, offering a second lien product that is ideal for borrowers if rates remain high [42] Question: Timing and impact of HMBS 2.0 [44] - The company expects feedback from Ginnie Mae on HMBS 2.0 around mid-November [44] Question: Volume expectations and seasonality [46] - October was the strongest month for funding and submission volumes in 2024, but Q4 volumes are expected to be similar to Q3 due to holiday periods [47][48] - Seasonality may impact Q1 volumes, with growth expected to pick up after Q1 [49] Question: Impact of rate volatility on fair value marks [51] - Fair value marks are influenced by multiple factors, including interest rates, spreads, and home price appreciation, with some offsetting effects expected due to spread tightening [52][53]

Finance of America Companies Inc. (FOA) came out with quarterly earnings of $0.67 per share, beating the Zacks Consensus Estimate of $0.13 per share. This compares to loss of $1.10 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 415.38%. A quarter ago, it was expected that this company would post a loss of $0.20 per share when it actually produced a loss of $0.05, delivering a surprise of 75%.Over the last four quarters, the c ...