Finance Of America Companies, Inc. (NYSE:FOA) Q1 2022 Earnings Conference Call May 9, 2022 5:00 PM ET Company Participants Patty Cook – Chief Executive Officer Michael Fant – Senior Vice President of Finance Johan Gericke – Chief Financial Officer Conference Call Participants Douglas Harter – Credit Suisse Steven Laws – Raymond James Blake Netter – Morgan Stanley Operator Good afternoon. Thank you for attending today's Finance of America First-Quarter 2022 earnings call. My name is Hanna, and I will be your ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-40308 FINANCE OF AMERICA COMPANIES INC. 5830 Granite Parkway, Suite 400, Plano, Texas 75024 (Address of Principal Executive Offices) (Zip Code) (Mark One) ☒ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the annual period ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-40308 FINANCE OF AMERICA COMPANIES INC. (Exact name of registrant as specified in its charter) (State or other ju ...

Financial Data and Key Metrics Changes - Finance of America reported $1.7 billion in revenue and adjusted net income of $308 million for the full year 2021 [6][27] - The company experienced a $1.36 billion pre-tax GAAP loss in Q4 2021, primarily due to an impairment of goodwill and intangible assets [20] - Adjusted net income for Q4 was $70 million, with fully diluted adjusted earnings per share of $0.37 [21] Business Line Data and Key Metrics Changes - Specialty Finance and Services (SF&S) accounted for 51% of total revenue in Q4, contributing $196 million in revenue and $73 million in adjusted net income [9][13] - The reverse origination segment achieved a revenue increase of 107% year-over-year, reaching $114 million in Q4 [24] - The commercial originations business generated record quarterly funded volume of $580 million, with a 157% revenue increase compared to 2020 [25] Market Data and Key Metrics Changes - The mortgage origination segment saw a 20% revenue decrease compared to Q3, resulting in a pre-tax loss of $8 million [23] - The non-agency proprietary product contributed 18% of total mortgage origination during Q4 [11] Company Strategy and Development Direction - The company is focused on three strategic priorities: optimizing the mortgage business, investing in high-growth SF&S businesses, and leveraging technology to transform into a customer-centric company [9][17] - The management aims to position the mortgage business for reduced refinance volume while capitalizing on growth in the purchase and non-agency market [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the tough environment in the mortgage industry, with a significant decrease in refinancing demand due to rising rates [8] - The company expects to see continued growth in the purchase market and non-agency products, despite the challenges in the refinancing segment [8][10] Other Important Information - The company plans to maintain cash reserves for continued investment in business growth rather than stock repurchase [42] - Patty Cook announced her retirement, expressing pride in the company's achievements and commitment to a smooth transition [30] Q&A Session All Questions and Answers Question: Impact of volatility on commercial and reverse margins - Management indicated that the pressure on margins is related to market volatility rather than competitive dynamics [33] Question: Profitability expectations for the home improvement business - Management expects the home improvement business to become profitable during the year, attributing current losses to setup costs [35] Question: Drivers of strong reverse mortgage volumes - Management noted that both increased awareness among first-time borrowers and home price appreciation are driving reverse mortgage volumes [37] Question: Expense guidance and variable costs in the forward mortgage business - Management is adjusting capacity for lower volumes and has reduced headcount to optimize the mortgage business [39] Question: Stock buyback considerations - Management is focused on conserving cash for business growth rather than stock repurchase at this time [42] Question: Market perception of the company's prospects - Management believes the market may not fully recognize the growth potential of the SF&S business, which counters the cyclicality of the mortgage sector [50]

Financial Performance & Impairment - Finance of America reported a net loss of $1336 million in Q4 2021, primarily due to a $1381 million impairment of goodwill and intangible assets[7, 8] - Excluding the impairment charge and related tax benefit, the company generated net income of $15 million for Q4 2021[7] - For the full year 2021, the company reported a net loss of $1177 million, also due to the impairment of goodwill and intangible assets[7, 10] - Adjusted Net Income for 2021 was $308 million, driven by 177% growth in Specialty Finance & Services (SF&S)[10] Segment Performance - SF&S segments accounted for 51% of total revenue in Q4 2021 and are expected to be the major driver of profitability in 2022[6] - The SF&S businesses demonstrated substantial growth, with a Compound Annual Growth Rate (CAGR) of 90% from 2019 to 2021[12] - Mortgage pre-tax income excluding impairment of goodwill and intangible assets was $(8) million in Q4 2021 and $96 million for the full year 2021[7] - SF&S pre-tax income excluding impairment of goodwill and intangible assets was $27 million in Q4 2021 and $89 million for the full year 2021[7] Strategic Priorities & Outlook - Management is focused on optimizing the Mortgage Originations segment, investing in high-growth businesses (Reverse, Commercial, Home Improvement, and Lender Services), and investing in technology and data[6] - Non-agency Mortgage volume grew 25% quarter over quarter, accounting for 18% of overall Mortgage volume in Q4 2021[8] - Q1 2022 projected revenue for Mortgage is $150-170 million with an Adjusted Net Income Margin of 0-2%, while SF&S is projected to have revenue of $230-250 million with an Adjusted Net Income Margin of 19-21%[24]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-40308 FINANCE OF AMERICA COMPANIES INC. (Exact name of registrant as specified in its charter) Delaware 85 ...

| --- | --- | |------------------------------------|-------| | | | | | | | Earnings Presentation \| Q3 2021 | | | | | | | | | November 2021 | | | ©2021 Finance of America Companies | | Disclaimer Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. The actual results of Finance of America Companies Inc., together with its subsidiaries and affiliates, "Financ ...

Financial Performance and Risk Management - The company reported a significant increase in total assets, with a change of $115,519 thousand when interest rates decreased by 25 basis points [674]. - The company anticipates that an increase in interest rates could lead to higher delinquency, default, and foreclosure rates, resulting in increased servicing costs and interest expenses [666]. - The company actively manages Interest Rate Lock Commitments (IRLCs) and loans held for sale, entering into forward sales of mortgage-backed securities (MBS) to mitigate interest rate risk [662]. - The company estimates reserves for losses on repurchased loans based on historical data and other relevant factors, indicating proactive risk management [667]. - The company’s earnings on held-for-investment assets are largely dependent on the interest rate spread between interest-earning assets and interest-bearing liabilities [663]. - The company’s market risk is influenced by various factors, including market spreads and liquidity, with sensitivity analyses conducted to assess potential impacts of interest rate changes [671]. Financial Reporting and Internal Controls - The fair value of certain outstanding mortgage loans and related liabilities is assessed using a discounted cash flow analysis, with key assumptions including prepayment speeds and market discount rates [670]. - The company has implemented changes to improve internal controls over financial reporting, addressing previously identified material weaknesses related to the accounting for complex financial instruments [678]. - The company has enhanced its processes to evaluate accounting technical pronouncements for significant transactions, ensuring compliance with complex accounting standards [679]. - The company does not expect its disclosure controls and procedures to prevent all errors or fraud, acknowledging inherent limitations [676].

Financial Data and Key Metrics Changes - Adjusted net income for Q2 was $57 million or $0.30 per share, down from $107 million or $0.56 per share in the previous quarter, reflecting a significant decline in mortgage revenue [14][15] - The company reported a net loss of $15 million for Q2, compared to net income of $124 million in Q1 and $146 million in Q2 2020 [15] - Adjusted EBITDA for Q2 was $87 million, down $67 million or 44% compared to Q1, primarily due to a $102 million decrease in mortgage revenue [15] Business Line Data and Key Metrics Changes - Mortgage originations volume decreased by 21% to $6.7 billion from $8.4 billion in the prior quarter, leading to a 32% decrease in segment revenue [16] - The reverse mortgage segment achieved record funded volumes of $1 billion, up 32% quarter-over-quarter, generating segment revenue of $95 million, an increase of 38% [17] - Commercial funded volumes increased by 17% sequentially to $400 million, resulting in a 64% revenue increase from Q1 [18] Market Data and Key Metrics Changes - The company experienced a shift from refinance to purchase volume, with purchase funded volumes growing from $2.7 billion to $3.5 billion quarter-over-quarter [12] - The reverse mortgage market is supported by a growing senior population, which is increasing at 3% annually, presenting substantial growth opportunities [26] Company Strategy and Development Direction - The company is focused on diversifying its business model, which includes mortgage, reverse, commercial, and home improvement loans, to mitigate the effects of a cyclical mortgage market [7][11] - The management emphasized the importance of innovation and capitalizing on market opportunities to drive profitable growth [22][25] Management Comments on Operating Environment and Future Outlook - Management expects continued pressure in the mortgage segment for the remainder of the year, with adjusted EBITDA for 2021 now estimated to be down 25% to 30% compared to 2020 [26] - The company remains optimistic about growth opportunities in the reverse and commercial segments, citing favorable market dynamics [29][30] Other Important Information - The company completed its business combination and began trading on the NYSE on April 5, 2021, and is integrating its home improvement business along with the acquisition of Parkside Lending [6][11] - Non-recurring costs related to the business combination impacted the financial results, totaling $43 million for the quarter [21] Q&A Session Summary Question: Near term growth outlook for commercial and reverse originations - Management expressed excitement about growth opportunities in both channels, citing sustainable opportunities despite the difficulty in forecasting [28][29] Question: Outlook for revenue margins in commercial and reverse segments - Management indicated that good margins are expected to hold in both channels, although variability exists [30][31] Question: Change in EBITDA guidance and its drivers - Management confirmed the revised guidance of a 25% to 30% reduction in adjusted EBITDA, driven by tighter margins and unexpected dynamics in the second quarter [33][34] Question: Variable compensation structure and long-term expense management - Variable compensation is tied to volume, and management is focused on right-sizing expenses in response to changing market conditions [35][36] Question: Stock buyback considerations - Management is evaluating capital management strategies, including potential stock buybacks, while focusing on investments that reduce earnings cyclicality [40][41] Question: Importance of tangible book value and EPS guidance - Management emphasized the significance of tangible book value in assessing company value but did not provide specific EPS guidance [44][47]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-40308 FINANCE OF AMERICA COMPANIES INC. (Exact name of registrant as specified in its charter) Delaware 85-347 ...