Finance of America Companies Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Subsequent Events

Subsequent Events

12 Months Ended

Dec. 31, 2022

39. Subsequent Events

The Company has evaluated subsequent events from the date of the consolidated financial statements of December 31, 2022, the date these consolidated financial statements were issued. No events or transactions were identified that would have an impact on the financial position as of December 31, 2022 or results of operations of the Company for the year ended December 31, 2022, except as follows:

Mortgage Originations Segment

On October 20, 2022, the Board of the Company authorized a plan to discontinue substantially all of the operations of the Company’s Mortgage Originations segment. The Company commenced the wind-down during the fourth quarter of 2022 and completed the wind down on February 28, 2023.

For the reporting periods ended December 31, 2022 and December 31, 2021, the Mortgage Originations segment contributed $173.4 million and $2,148.5 million, respectively, of total assets and $172.4 million and $1,987.0 million, respectively, of total liabilities in the Consolidated Statements of Financial Condition. These amounts include immaterial balances associated with the Company's home improvement channel, which will continue as part of the Company's operations.

Results for the affected Mortgage Originations segment for the periods presented in this report were as follows (in thousands):


	For the year ended December 31, 2022		For the nine months ended December 31, 2021		For the three months ended March 31, 2021		For the year ended December 31, 2020
	Successor				Predecessor
Gain on sale and other income from loans held for sale, net	$	231,983	$	542,951	$	286,481	$	1,171,368

Fee income	59,096		88,399		32,731		118,237
Net interest income	7,724		7,986		891		1,896
Total revenues	298,803		639,336		320,103		1,291,501
Total expenses	464,084		639,196		224,246		831,563
Impairment of goodwill, intangibles, and other assets	(129,097)		(774,524)		—		—
Other, net	(225)		—		—		—
NET INCOME (LOSS) BEFORE INCOME TAXES	$	(294,603)	$	(774,384)	$	95,857	$	459,938

Lender Services Segment

On February 1, 2023, the Company's indirect subsidiary, Incenter, entered into an agreement to sell one hundred percent of (i) the issued and outstanding shares of capital stock of ANTIC, a direct subsidiary of Incenter and an indirect subsidiary of the Company, and (ii) the issued and outstanding membership interests of BNT, a direct subsidiary of Incenter and an indirect subsidiary of the Company. The Company has historically included the operations of ANTIC and BNT in its Lender Services operating segment.

Commercial Originations Segment

On February 19, 2023, the Company’s indirect subsidiaries, FAH and FAM entered into an Asset Purchase Agreement for the sale of certain operational assets of FAM, operating as FACo, which comprise the Company's Commercial Origination segment. The transaction closed on March 14, 2023. This transaction does not include FACo’s financial assets as of closing, comprised of loans and securitization assets, which will continue to be sold or otherwise paid in full or liquidated in the ordinary course of business. Following the closing of the FACo Transaction, FAM will no longer operate in the business of originating business purpose loans to residential real estate investors. Upon closing of the FACo Transaction, the Company will no longer have a reportable Commercial Originations segment.

For the reporting periods ended December 31, 2022 and December 31, 2021, the Commercial Originations segment contributed $15.2 million and $41.5 million, respectively, of total assets and $33.1 million and $11.3 million, respectively, of total liabilities on the Consolidated Statements of Financial Condition.

Results for the affected Commercial Originations segment for the periods presented in this report were as follows (in thousands):


	For the year ended December 31, 2022		For the nine months ended December 31, 2021		For the three months ended March 31, 2021		For the year ended December 31, 2020
	Successor				Predecessor

Net fair value gains on loans and related obligations	$	4,210	$	37,720	$	5,431	$	13,350
Fee income	54,437		43,015		8,930		23,862
Net interest income	—		—		—		—
Total revenues	58,647		80,735		14,361		37,212
Total expenses	84,659		64,026		13,391		41,341
Impairment of goodwill, intangibles, and other assets	(5,500)		(75,768)		—		—
Other, net	418		$	423	149		$	—
NET INCOME (LOSS) BEFORE INCOME TAXES	$	(31,094)	$	(58,636)	$	1,119	$	(4,129)

Related-Party Promissory Note

On January 31, 2023, FoA Equity entered into an amendment to its revolving Working Capital Promissory Notes dated June 14, 2019 with certain funds affiliated with Blackstone Inc. and an entity controlled by Brian L. Libman, to increase the aggregate commitments for revolving borrowings thereunder from $50.0 million to $60.0 million and to extend their maturity from July 31, 2023 to October 31, 2023. Additionally, on March 13, 2023, FoA Equity entered into a subsequent amendment to its revolving Working Capital Promissory Notes to extend their maturity from October 31, 2023 to May 15, 2024. The additional liquidity and extended term provides investment capital for growth initiatives and strategic opportunities currently in process by the Company, as well as other general corporate purposes. The Working Capital Promissory Notes, which are structured with simultaneous draw and paydown terms, are secured by certain tangible assets of the Borrower and bear interest at rate per annum equal to 6.5%.