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].
Finance of America panies (FOA) - 2024 Q3 - Quarterly Report