foa-20240930

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, 2024


☐			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

85-3474065

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

5830 Granite Parkway, Suite 400

Plano, Texas

75024

(Address of Principal Executive Offices)

(Zip Code)

(877) 202-2666

Registrant’s telephone number, including area code

_________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	FOA	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	x
Non-accelerated filer	☐	Smaller reporting company	x
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of November 5, 2024, there were issued and outstanding 9,926,412 shares of the registrant’s Class A Common Stock, par value $0.0001, and 15 shares of the registrant’s Class B Common Stock, par value $0.0001.


			Finance of America Companies Inc. Quarterly Report on Form 10-Q Table of Contents


		Page
	PART I - Financial Information
Item 1.	Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	57
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	86
Item 4.	Controls and Procedures	87

	PART II - Other Information
Item 1.	Legal Proceedings	89
Item 1A.	Risk Factors	89
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	89
Item 3.	Defaults Upon Senior Securities	89
Item 4.	Mine Safety Disclosures	89
Item 5.	Other Information	89
Item 6.	Exhibits	90

Signatures		92

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (the “Form 10-Q”) contains forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts or statements of current conditions, but instead represent only our beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of Finance of America Companies Inc.’s (the “Company”) control. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “budgets,” “forecasts,” “anticipates,” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties that could cause actual outcomes or results to differ materially from those indicated in these statements, including those risks described below. Given the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. The Company cautions readers not to place undue reliance upon any forward-looking statements, which are current only as of the date of this report. Results for any specified quarter are not necessarily indicative of the results that may be expected for the full year or any future period. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law. All subsequent written and oral forward-looking statements concerning the Company or other matters and attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. A number of important factors exist that could cause future results to differ materially from historical performance and these forward-looking statements. In addition to the other information in the Form 10-Q, the following risk factors should be considered carefully in evaluating the Company and our business:

•our ability to manage the unique challenges presented by operating as a modern retirement solutions platform rather than a vertically integrated lending and complementary services platform due to the transformation of our business;

•our ability to successfully operate the recently integrated lending platform that we acquired from American Advisors Group in March 2023 and generally, our ability to operate our business profitably;

•our ability to respond to significant changes in prevailing interest rates and to resume profitable business operations;

•our geographic market concentration if the economic conditions in our current markets should decline or if our current markets are impacted by natural disasters;

•our use of estimates in measuring or determining the fair value of the majority of our financial assets and liabilities, which may require us to write down the value of these assets or write up the value of these liabilities if the estimates prove to be incorrect;

•our ability to prevent cyber intrusions and mitigate cyber risks;

•the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors in our business markets and worldwide financial markets, including a sustained period of higher interest rates;

•our ability to manage changes in our licensing status, business relationships, or servicing guidelines with the Government National Mortgage Association (“Ginnie Mae”), the United States Department of Housing and Urban Development (“HUD”), or other governmental entities;

•our ability to obtain sufficient capital and liquidity to meet the financing and operational requirements of our business and our ability to comply with our debt agreements, including warehouse lending facilities, and pay down our substantial debt;

•our ability to refinance our debt on reasonable terms as it becomes due;

•our ability to manage disruptions in the secondary home loan market, including the mortgage-backed securities market;

•our ability to finance and recover costs of our reverse mortgage servicing operations;

•our ability to maintain compliance with the extensive regulations we are subject to, including consumer protection laws applicable to reverse mortgage lenders, which may be highly complex;

•our ability to compete with national banks, which are not subject to state licensing and operational requirements;

•our ability to manage various legal proceedings, federal or state governmental examinations, and enforcement investigations we are subject to from time to time, the results of which are difficult to predict or estimate;

•our continued ability to remain in compliance with the terms of the consent orders issued by the Consumer Financial Protection Bureau, which we assumed in connection with our acquisition of operational assets from American Advisors Group;

•our holding company status and dependency on distributions from Finance of America Equity Capital LLC;

•our ability to comply with the continued listing standards of the New York Stock Exchange (“NYSE”) and avoid the delisting of our common stock from trading on its exchange;

•our common stock trading history has been characterized by low trading volume, which may result in an inability to sell your shares at a desired price, if at all; and

•our “controlled company” status under NYSE rules, which exempts us from certain corporate governance requirements and affords stockholders fewer protections.

All of these factors are difficult to predict, contain uncertainties that may materially affect actual results, and may be beyond our control. New factors emerge from time to time, and it is not possible for our management to predict all such factors or to assess the effect of each such new factor on our business. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and any of these statements included herein may prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements, or our objectives and plans will be achieved. Please refer to Item 1A. Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in this report, and in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 15, 2024, for further information on these and other risk factors affecting us, as such factors may be amended and updated from time to time in the Company’s subsequent periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov.

Additional Information

To learn more about Finance of America Companies Inc., please visit our website at www.financeofamericacompanies.com. From time to time, we use our website as a channel of distribution of material Company information. We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, available free of charge under the Investor Relations section of our website as soon as reasonably practicable after we electronically file the reports with, or furnish them to, the SEC. Our reports, proxy and information statements, and other information filed electronically with the SEC can also be accessed at www.sec.gov.


PART I - Financial Information Item 1. Financial Statements
			Finance of America Companies Inc. Condensed Consolidated Statements of Financial Condition (in thousands, except share data)


	September 30, 2024		December 31, 2023
	(unaudited)
ASSETS
Cash and cash equivalents	$	44,258	$	46,482
Restricted cash	176,105		178,319
Loans held for investment, subject to Home Equity Conversion Mortgage-Backed Securities (“HMBS”) related obligations, at fair value	18,521,337		17,548,763
Loans held for investment, subject to nonrecourse debt, at fair value	9,097,369		8,272,393
Loans held for investment, at fair value	703,356		575,228
Intangible assets, net	225,639		253,531
Other assets, net	178,493		226,153
Assets of discontinued operations	3,827		6,721
TOTAL ASSETS	$	28,950,384	$	27,107,590

LIABILITIES AND EQUITY
HMBS related obligations, at fair value	$	18,292,043	$	17,353,720
Nonrecourse debt, at fair value	8,537,119		7,904,200
Other financing lines of credit	1,054,568		928,479
Notes payable, net (includes amounts due to related parties of $84,630 and $59,130, respectively)	435,744		410,911
Payables and other liabilities	160,869		219,569
Liabilities of discontinued operations	13,585		18,304
TOTAL LIABILITIES	28,493,928		26,835,183
Commitments and Contingencies (Note 14)
EQUITY
Class A Common Stock, $0.0001 par value; 6,000,000,000 shares authorized; 10,351,652 and 10,059,924 shares issued, respectively, and 9,925,802 and 9,634,074 shares outstanding, respectively	1		1
Class B Common Stock, $0.0001 par value; 1,000,000 shares authorized; 15 shares issued and outstanding, respectively	—		—
Additional paid-in capital	953,023		946,938
Accumulated deficit	(639,807)		(714,383)
Accumulated other comprehensive loss	(273)		(249)
Noncontrolling interest	143,512		40,100
TOTAL EQUITY	456,456		272,407
TOTAL LIABILITIES AND EQUITY	$	28,950,384	$	27,107,590

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)


			Finance of America Companies Inc. Condensed Consolidated Statements of Financial Condition (in thousands)

The following table presents the assets and liabilities of the Company’s consolidated variable interest entities (“VIEs”), which are included in the Condensed Consolidated Statements of Financial Condition above, and excludes retained bonds and beneficial interests that eliminate in consolidation.


	September 30, 2024		December 31, 2023
ASSETS	(unaudited)
Restricted cash	$	167,399	$	168,010
Loans held for investment, subject to nonrecourse debt, at fair value	8,712,720		7,881,566
Loans held for investment, at fair value	222,609		—
Other assets, net	54,817		68,178
TOTAL ASSETS	$	9,157,545	$	8,117,754

LIABILITIES
Nonrecourse debt, at fair value	$	8,171,187	$	7,531,412
Other financing lines of credit	174,874		—
Payables and other liabilities	904		546
TOTAL LIABILITIES	$	8,346,965	$	7,531,958

NET CARRYING VALUE OF ASSETS IN VIEs	$	810,580	$	585,796

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)


			Finance of America Companies Inc. Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except share data)


	For the three months ended September 30, 2024		For the three months ended September 30, 2023		For the nine months ended September 30, 2024		For the nine months ended September 30, 2023
PORTFOLIO INTEREST INCOME
Interest income	$	489,900	$	443,999	$	1,431,970	$	1,169,624
Interest expense	(426,839)		(372,459)		(1,233,261)		(970,428)
NET PORTFOLIO INTEREST INCOME	63,061		71,540		198,709		199,196

OTHER INCOME (EXPENSE)
Net origination gains	57,216		31,376		137,133		88,777
Gain on securitization of home equity conversion mortgages (“HECM”) tails, net	10,560		7,100		32,317		17,095
Fair value changes from model amortization	(43,753)		(56,882)		(149,174)		(162,386)
Fair value changes from market inputs or model assumptions	204,154		(122,449)		228,976		(172,168)
Net fair value changes on loans and related obligations	228,177		(140,855)		249,252		(228,682)
Fee income	8,054		13,201		22,170		33,377
Gain (loss) on sale and other income from loans held for sale, net	—		(6,984)		302		(23,464)
Non-funding interest expense, net	(9,219)		(7,342)		(26,639)		(21,909)
NET OTHER INCOME (EXPENSE)	227,012		(141,980)		245,085		(240,678)

TOTAL REVENUES	290,073		(70,440)		443,794		(41,482)

EXPENSES
Salaries, benefits, and related expenses	31,083		48,557		105,159		140,469
Loan production and portfolio related expenses	6,946		6,370		21,221		21,296
Loan servicing expenses	7,772		8,000		23,622		23,274
Marketing and advertising expenses	10,325		11,491		29,543		22,166
Depreciation and amortization	9,777		9,954		29,208		32,431
General and administrative expenses	14,405		21,054		47,917		59,572
TOTAL EXPENSES	80,308		105,426		256,670		299,208
IMPAIRMENT OF OTHER ASSETS	—		(558)		(600)		(558)
OTHER, NET	(1,592)		3,853		2,101		2,852
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	208,173		(172,571)		188,625		(338,396)
Provision (benefit) for income taxes from continuing operations	4,425		(103)		5,578		(786)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	203,748		(172,468)		183,047		(337,610)
NET LOSS FROM DISCONTINUED OPERATIONS	—		(2,464)		(4,727)		(45,211)
NET INCOME (LOSS)	203,748		(174,932)		178,320		(382,821)
Net income (loss) from continuing operations attributable to noncontrolling interest	119,545		(107,940)		106,463		(212,190)
Net loss from discontinued operations attributable to noncontrolling interest	—		(1,629)		(2,719)		(29,182)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO CONTROLLING INTEREST	84,203		(64,528)		76,584		(125,420)
NET LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO CONTROLLING INTEREST	—		(835)		(2,008)		(16,029)
NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST	$	84,203	$	(65,363)	$	74,576	$	(141,449)


			Finance of America Companies Inc. Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except share data)


	For the three months ended September 30, 2024		For the three months ended September 30, 2023		For the nine months ended September 30, 2024		For the nine months ended September 30, 2023
EARNINGS (LOSS) PER SHARE (Note 20)
Basic weighted average shares outstanding	9,924,671		8,772,623		9,824,171		7,980,449
Basic earnings (loss) per share from continuing operations	$	8.48	$	(7.36)	$	7.80	$	(15.72)
Basic earnings (loss) per share	$	8.48	$	(7.45)	$	7.59	$	(17.72)
Diluted weighted average shares outstanding	23,159,304		8,772,623		23,062,616		7,980,449
Diluted earnings (loss) per share from continuing operations	$	7.50	$	(7.36)	$	6.65	$	(15.72)
Diluted earnings (loss) per share	$	7.50	$	(7.45)	$	6.47	$	(17.72)

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)


			Finance of America Companies Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (in thousands)


	For the three months ended September 30, 2024		For the three months ended September 30, 2023		For the nine months ended September 30, 2024		For the nine months ended September 30, 2023
NET INCOME (LOSS)	$	203,748	$	(174,932)	$	178,320	$	(382,821)
COMPREHENSIVE INCOME (LOSS) ITEM:
Impact of foreign currency translation adjustment	23		33		(24)		52
TOTAL COMPREHENSIVE INCOME (LOSS)	203,771		(174,899)		178,296		(382,769)
Less: Comprehensive income (loss) attributable to noncontrolling interest	119,558		(109,548)		103,730		(241,339)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST	$	84,213	$	(65,351)	$	74,566	$	(141,430)

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)


			Finance of America Companies Inc. Condensed Consolidated Statements of Equity (Unaudited) (in thousands, except share data)


	Class A Common Stock			Class B Common Stock									Noncontrolling Interest
	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Class A LLC Units	Amount		Total Equity

Balance at June 30, 2024	9,918,193	$	1	15	$	—	$	951,535	$	(724,010)	$	(296)	13,185,961	$	24,067	$	251,297
Net income	—	—		—	—		—		84,203		—		—	119,545		203,748
Noncontrolling interest distributions	—	—		—	—		—		—		—		—	(100)		(100)
Equity-based compensation, net	—	—		—	—		1,516		—		—		—	—		1,516
Conversion of LLC Units for Class A Common Stock	6	—		—	—		—		—		—		(6)	—		—

Settlement of other restricted stock units (“RSUs”)	11,569	—		—	—		—		—		—		—	—		—
Cancellation of shares to fund employee tax withholdings	(3,966)	—		—	—		(28)		—		—		—	—		(28)
Foreign currency translation adjustment	—	—		—	—		—		—		23		—	—		23
Balance at September 30, 2024	9,925,802	$	1	15	$	—	$	953,023	$	(639,807)	$	(273)	13,185,955	$	143,512	$	456,456

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)


			Finance of America Companies Inc. Condensed Consolidated Statements of Equity (Unaudited) (in thousands, except share data)


	Class A Common Stock			Class B Common Stock									Noncontrolling Interest
	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Class A LLC Units	Amount		Total Equity

Balance at June 30, 2023	8,762,791	$	1	15	$	—	$	935,919	$	(710,381)	$	(254)	14,154,362	$	48,450	$	273,735
Net loss	—	—		—	—		—		(65,363)		—		—	(109,569)		(174,932)
Equity-based compensation, net	—	—		—	—		4,976		—		—		—	—		4,976
Conversion of LLC Units for Class A Common Stock	77	—		—	—		—		—		—		(77)	—		—
Settlement of long-term incentive plan (“LTIP”) RSUs, net	18,246	—		—	—		32		—		—		(18,246)	(33)		(1)
Settlement of other RSUs	8,246	—		—	—		—		—		—		—	—		—
Cancellation of shares to fund employee tax withholdings	(11,373)	—		—	—		(202)		—		—		—	—		(202)
Foreign currency translation adjustment	—	—		—	—		—		—		33		—	—		33
Balance at September 30, 2023	8,777,987	$	1	15	$	—	$	940,725	$	(775,744)	$	(221)	14,136,039	$	(61,152)	$	103,609

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)


			Finance of America Companies Inc. Condensed Consolidated Statements of Equity (Unaudited) (in thousands, except share data)


	Class A Common Stock			Class B Common Stock									Noncontrolling Interest
	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Class A LLC Units	Amount		Total Equity

Balance at December 31, 2023	9,634,074	$	1	15	$	—	$	946,938	$	(714,383)	$	(249)	13,297,081	$	40,100	$	272,407
Net income	—	—		—	—		—		74,576		—		—	103,744		178,320
Noncontrolling interest distributions	—	—		—	—		—		—		—		—	(100)		(100)
Equity-based compensation, net	—	—		—	—		6,880		—		—		—	—		6,880
Conversion of LLC Units for Class A Common Stock	177	—		—	—		—		—		—		(177)	—		—
Settlement of LTIP RSUs, net	110,949	—		—	—		232		—		—		(110,949)	(232)		—
Settlement of other RSUs	317,194	—		—	—		—		—		—		—	—		—
Cancellation of shares to fund employee tax withholdings	(136,592)	—		—	—		(1,027)		—		—		—	—		(1,027)
Foreign currency translation adjustment	—	—		—	—		—		—		(24)		—	—		(24)
Balance at September 30, 2024	9,925,802	$	1	15	$	—	$	953,023	$	(639,807)	$	(273)	13,185,955	$	143,512	$	456,456

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)


			Finance of America Companies Inc. Condensed Consolidated Statements of Equity (Unaudited) (in thousands, except share data)


	Class A Common Stock			Class B Common Stock									Noncontrolling Interest
	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Class A LLC Units	Amount		Total Equity

Balance at December 31, 2022	6,342,335	$	1	14	$	—	$	888,493	$	(634,295)	$	(273)	12,445,330	$	150,915	$	404,841
Net loss	—	—		—	—		—		(141,449)		—		—	(241,372)		(382,821)
Equity-based compensation, net	—	—		—	—		20,337		—		—		—	—		20,337
Conversion of LLC Units for Class A Common Stock	485	—		—	—		4		—		—		(485)	(4)		—
Settlement of LTIP RSUs, net	278,105	—		—	—		3,952		—		—		(278,105)	(3,863)		89
Settlement of other RSUs	138,527	—		—	—		—		—		—		—	—		—
Cancellation of shares to fund employee tax withholdings	(155,377)	—		—	—		(2,061)		—		—		—	—		(2,061)
Issuance of shares (Note 19 - Related-Party Transactions)	2,173,912	—		—	—		30,000		—		—		—	—		30,000
Issuance of units (Note 3 - Acquisitions)	—	—		1	—		—		—		—		1,969,299	33,172		33,172
Foreign currency translation adjustment	—	—		—	—		—		—		52		—	—		52
Balance at September 30, 2023	8,777,987	$	1	15	$	—	$	940,725	$	(775,744)	$	(221)	14,136,039	$	(61,152)	$	103,609

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)


			Finance of America Companies Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands)


	For the nine months ended September 30, 2024		For the nine months ended September 30, 2023
Operating Activities(1)
Net income (loss)	$	178,320	$	(382,821)
Adjustments to reconcile net income (loss) to net cash used in operating activities	(495,930)		372,588



















Net cash used in operating activities	(317,610)		(10,233)

Investing Activities(1)
Purchases and originations of loans held for investment	(2,084,750)		(2,335,404)
Proceeds/payments received on loans held for investment	1,581,575		1,445,778
Purchases and originations of loans held for investment, subject to nonrecourse debt	(31,080)		(63,551)
Proceeds/payments on loans held for investment, subject to nonrecourse debt	671,528		1,082,012
Proceeds on sale of mortgage servicing rights (“MSR”)	5,516		85,628
Acquisition of American Advisors Group net assets	—		(140,854)
Proceeds from sale of businesses (net of cash transferred)	3,000		71,166
Other investing activities, net	(191)		(5,444)
Net cash provided by investing activities	145,598		139,331

Financing Activities(1)
Proceeds from issuance of HMBS related obligations	1,457,360		1,553,957
Payments on HMBS related obligations	(1,622,531)		(1,433,751)
Proceeds from issuance of nonrecourse debt	813,870		1,695,339
Payments on nonrecourse debt	(630,287)		(1,378,154)
Proceeds from other financing lines of credit	4,492,107		3,530,606
Payments on other financing lines of credit	(4,366,018)		(4,133,161)

Changes in notes payable	27,047		12,340

Issuance of Class A Common Stock	—		30,000
Other financing activities, net	(3,998)		(1,148)
Net cash provided by (used in) financing activities	167,550		(123,972)

Effect of exchange rate changes on cash and cash equivalents	24		52
Net increase (decrease) in cash and cash equivalents and restricted cash	(4,438)		5,178
Cash and cash equivalents and restricted cash, beginning of period(1)	224,801		277,436
Cash and cash equivalents and restricted cash, end of period(1)	$	220,363	$	282,614

Cash and cash equivalents	$	44,258	$	66,341
Restricted cash	176,105		216,273
Total cash and cash equivalents and restricted cash, end of period(1)	$	220,363	$	282,614

Supplementary Cash Flows Information
Cash paid for interest	$	274,887	$	210,840

Loans transferred to loans held for sale, at fair value, from loans held for investment, at fair value	5,424		3,685

(1) Amounts presented contain results from both continuing and discontinued operations. Refer to Note 4 - Discontinued Operations for additional information regarding cash flow associated with the results of discontinued operations.

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)


			Finance of America Companies Inc. Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Organization and Description of Business

Finance of America Companies Inc. (“FoA,” the “Company,” “we,” “us,” or “our”) was incorporated in Delaware on October 9, 2020. FoA is a financial services holding company which, through its operating subsidiaries, is a leading provider of home equity-based financing solutions for a modern retirement. In addition, FoA offers capital markets and portfolio management capabilities primarily to optimize the distribution of its originated loans to investors.

FoA has a controlling financial interest in Finance of America Equity Capital LLC (“FoA Equity”). FoA Equity owns all of the outstanding equity interests in Finance of America Funding LLC (“FOAF”). FOAF wholly owns Finance of America Holdings LLC (“FAH”) and Incenter LLC (“Incenter” and collectively, with FoA Equity, FOAF, and FAH, known as “holding company subsidiaries”).

The Company, through its FAH holding company subsidiary, operates a lending company, Finance of America Reverse LLC (“FAR”). Through FAR, the Company originates, purchases, sells, securitizes, and services HECM, which are insured by the Federal Housing Administration (“FHA”), and non-agency reverse mortgages. The Company, through its Incenter holding company subsidiary, has operating service companies (the “operating service subsidiaries” and together with FAR, the “operating subsidiaries”) which provide capital markets and portfolio management capabilities.

Organizational Transformation and Realignment of Segments

During the fourth quarter of 2022 and calendar year 2023, the Company entered into a series of transactions, discontinuing certain business lines while enhancing our reverse mortgage loan business, as described in further detail below, in order to transform our business from a vertically integrated lending and complementary services platform to a modern retirement solutions platform. This transformation included the wind-down of the previously reported Mortgage Originations segment and sale of the previously reported Commercial Originations and Lender Services segments. During the quarter ended March 31, 2023, to more closely align with the business strategy, the Company restructured the reporting segments into the following: Retirement Solutions and Portfolio Management. Refer to Note 17 - Business Segment Reporting for additional information.

Transactions Relating to Discontinued Business Lines

On October 20, 2022, the Board of Directors (the “Board”) of the Company authorized a plan to discontinue the operations of the Company’s previously reported Mortgage Originations segment, other than its home improvement lending business, which commenced in the fourth quarter of 2022 and was completed on February 28, 2023. Refer to Note 4 - Discontinued Operations for additional information.

On August 31, 2023, the Company’s indirect subsidiary, Finance of America Mortgage LLC (“FAM”), entered into an agreement to sell certain operational assets of the home improvement lending business. This transaction closed on September 15, 2023. In connection with such transaction, the Company began the process of winding down the operations of the home improvement lending business, which was substantially complete as of March 31, 2024. The wind-down of the home improvement lending business was not considered by the Company to be a strategic shift that has or will have a major effect on our operations and financial results. Therefore, the previous operations of the home improvement lending business are reported as part of the Company’s Retirement Solutions segment rather than as discontinued operations.

On February 1, 2023, Incenter entered into an agreement to sell one hundred percent of (i) the issued and outstanding shares of capital stock of Agents National Title Holding Company (“ANTIC”), a direct subsidiary of Incenter and an indirect subsidiary of the Company, and (ii) the issued and outstanding membership interests of Boston National Holdings LLC (“BNT”), a direct subsidiary of Incenter and an indirect subsidiary of the Company. The closing of the ANTIC and BNT sale was completed on July 3, 2023. The Company historically included the operations of ANTIC and BNT in its previously reported Lender Services segment. On March 30, 2023, the FoA Equity Board authorized a plan to sell assets making up the remainder of the Company’s previously reported Lender Services segment, with the exception of its Incenter Solutions LLC operating service subsidiary. The Company completed the sale of such assets on June 30, 2023. Refer to Note 4 - Discontinued Operations for additional information.


			Finance of America Companies Inc. Notes to Condensed Consolidated Financial Statements (Unaudited)

During the quarter ended September 30, 2023, the Company ceased the operations of the Company’s Incenter Solutions LLC operating service subsidiary. The wind-down of Incenter Solutions LLC was substantially complete as of December 31, 2023. The wind-down of Incenter Solutions LLC was not considered by the Company to be a strategic shift that has or will have a major effect on our operations and financial results. Therefore, the previous operations of Incenter Solutions LLC are reported within Corporate and Other in Note 17 - Business Segment Reporting, rather than as discontinued operations.

On February 19, 2023, FAH and FAM entered into an agreement to sell certain commercial originations operational assets of FAM, operating under the brand Finance of America Commercial (“FACo”). This transaction closed on March 14, 2023. The Company historically included the commercial originations operations of FACo in its previously reported Commercial Originations segment. In connection with the transaction, the Company discontinued the operations of and wound-down its Commercial Originations segment. Refer to Note 4 - Discontinued Operations for additional information.

American Advisors Group Transaction

On March 31, 2023, FAR acquired a majority of the assets and certain of the liabilities of American Advisors Group, now known as Bloom Retirement Holdings Inc. (“AAG/Bloom” or “Seller”), including, among other things, certain residential reverse mortgage loans and the right to service certain HECM (such acquisition, the “AAG Transaction”). These assets and liabilities were acquired pursuant to an Asset Purchase Agreement, a Servicing Rights Purchase and Sale Agreement, and a Loan Sale Agreement entered into on December 6, 2022 with AAG/Bloom. The operations acquired by the Company as a result of the AAG Transaction are included in the Company’s Retirement Solutions segment reporting. Refer to Note 3 - Acquisitions for additional information.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements comprise the financial statements of FoA and its controlled subsidiaries. The condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The accompanying financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of its financial condition as of September 30, 2024, its results of operations for the three and nine months ended September 30, 2024 and 2023, and its cash flows for the nine months ended September 30, 2024 and 2023. The Condensed Consolidated Statement of Financial Condition at December 31, 2023 was derived from audited financial statements but does not contain all of the footnote disclosures from the annual financial statements. Operating results for the interim periods are not necessarily indicative of the results that may be expected for any future period or for the full year. The condensed consolidated financial statements, including the significant accounting policies, should be read in conjunction with the consolidated financial statements and notes as of and for the year ended December 31, 2023 within the Company’s Annual Report on Form 10-K.

The significant accounting policies, together with the other Notes to Condensed Consolidated Financial Statements, are an integral part of the condensed consolidated financial statements. Where applicable, the significant accounting policies have been updated below for the presentation changes in the Condensed Consolidated Statements of Operations.

On July 25, 2024, the Company completed a 1-for-10 reverse stock split (the “Reverse Stock Split”) of its shares of Class A Common Stock. FoA Equity completed a corresponding 1-for-10 reverse split of its units (“Class A LLC Units”) to maintain the 1-for-1 parity of its Class A LLC Units with the Company’s adjusted number of Class A Common Stock shares. All references in this Quarterly Report on Form 10-Q to numbers of Class A Common Stock shares, weighted average shares outstanding, earnings (loss) per share, FoA Class A Common Stock share price, and number of Class A LLC Units have been adjusted to reflect the Reverse Stock Split on a retroactive basis. As a result of the Reverse Stock Split, an immaterial amount was reclassified from Class A Common Stock to additional paid-in capital in the Condensed Consolidated Statements of Financial Condition.


			Finance of America Companies Inc. Notes to Condensed Consolidated Financial Statements (Unaudited)

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates regarding loans held for investment, subject to HMBS related obligations, loans held for investment, subject to nonrecourse debt, other loans held for investment, HMBS related obligations, and nonrecourse debt are particularly subject to change. Actual results may differ from those estimates and assumptions due to factors such as changes in the economy, interest rates, secondary market pricing, prepayment assumptions, home prices, or discrete events affecting specific borrowers, and such differences could be material.

Change in Condensed Consolidated Statements of Operations Presentation

Beginning with the Company’s second quarter 2024 Form 10-Q, the Condensed Consolidated Statements of Operations presentation was changed to provide additional detail regarding the Company’s activities. The change primarily consists of disaggregating the Company’s previously reported net fair value gains (losses) on loans and related obligations caption into the currently presented captions of interest income, interest expense, net origination gains, gain on securitization of HECM tails, net, fair value changes from model amortization, and fair value changes from market inputs or model assumptions. Additionally, previously reported interest income and interest expense, which primarily represented the Company’s interest income on mortgage loans held for sale and other interest income and the Company’s interest expense associated with the Company’s other financing lines of credit, was combined with the interest income and interest expense that was previously reported within net fair value gains (losses) on loans and related obligations, excluding non-portfolio interest income and the interest expense associated with the Company’s non-funding debt, which is now reported separately as non-funding interest expense, net. As a result of the change, the Company’s previously reported revenues have been recast to reflect the updated presentation as follows:


			Finance of America Companies Inc. Notes to Condensed Consolidated Financial Statements (Unaudited)

Reconciliation of the previously reported Condensed Consolidated Statements of Operations captions to the current presentation:


For the three months ended September 30, 2023	Total		Net fair value losses on loans and related obligations		Fee income		Loss on sale and other income from loans held for sale, net		Interest income		Interest expense
Finance of America Companies Inc. as previously reported	$	(70,440)	$	(53,135)	$	13,201	$	(6,984)	$	4,443	$	(27,965)

Reconciliation to current presentation:

PORTFOLIO INTEREST INCOME
Interest income	443,999		439,881		—		—		4,118		—
Interest expense	(372,459)		(352,161)		—		—		—		(20,298)
NET PORTFOLIO INTEREST INCOME	71,540		87,720