Hello, and welcome to the Finance of America Third Quarter 2024 Earnings Call. All lines are muted to minimize background noise. Following the speakers' comments, there will be a question-and-answer session.

Thank you, and good afternoon, everyone, and welcome to Finance of America's third quarter 2024 Earnings Call. With me today are Graham Fleming, Chief Executive Officer; Kristen Sieffert, President; and Matt Engel, Chief Financial Officer. As a reminder, this call is being recorded and you can find the earnings release and presentation on our Investor Relations website at www.financeofamericacompany.com. In addition, we will refer to certain non-GAAP financial measures on this call. You can find reconciliations of non-GAAP to GAAP financial measures discussed on today's call in our earnings press release and presentation on the Investor Relations page of our website to the extent available without unreasonable efforts. Also, I would like to remind everyone that comments on this conference call may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations and are subject to the Safe Harbor statement for forward-looking statements that you will find in today's earnings release. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of risks or other factors, including those that are described in the Risk Factors section of Finance America's annual report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 15, 2024.

Thank you, Michael. Good afternoon, everyone, and thank you for joining us today. Our performance this quarter is the culmination of a number of strategic and operational initiatives we've undertaken over the last year to strengthen the business. These efforts are now paying off as we focus on continued execution of our strategic plan. Finance of America generated improved financial results with $204 million in net income or $8.48 in basic earnings per share. $15 million in adjusted net income or $0.67 in adjusted earnings per share. And $32 million of adjusted EBITDA. Our performance in Q3 brought our net income, adjusted net income, and adjusted EBITDA all positive on a year-to-date basis. Volume in the quarter reached $513 million, exceeding the high end of our guidance range of $475 million to $500 million. This demonstrates our ability to execute on our strategic initiatives and continue delivering value to our customers. Notably during the quarter, we completed a reverse stock split and finalized the exchange offer and consent solicitation of our 2025 unsecured notes, which significantly enhances our balance sheet and financial flexibility of the business. This exchange was completed on October 31, and we look forward to continuing our partnership with our noteholders. Overall, we are executing and delivering on everything we set out to do. Our team has been focused, and the results speak for themselves. Our continued momentum and improved profitability, driven by strong execution across the board, have positioned us for sustained growth and success. With approximately $14 trillion of home equity held by older homeowners, we are uniquely positioned to meet the evolving financial needs of this growing demographic through our innovative home equity-based retirement products. We are focusing on market segments where we see the most growth potential, such as consumers 55 and older seeking second lien mortgage loans as a way to access their home equity without refinancing away from low-rate conventional mortgages. Our HomeSafe Second product could be a valuable solution for this population.

Thank you, Graham, and good afternoon, everyone. In the second quarter, we talked about our significant progress in transforming operations through a consolidated platform and improved efficiency. We focused on the unification of the Finance of America Reverse and AAG brands under the single name of Finance of America, as well as the streamlining of our workflows and adjustments to our sales processes. I'm pleased to share that our third quarter results indicate that these ROI maximization initiatives are having the intended impact. We surpassed our volume expectations and continued optimizing operations while staying dedicated to enhancing the customer experience and expanding our market presence. Our retail channel saw a 38% productivity improvement measured by fundings per loan officer compared to the prior quarter. Additionally, October experienced our largest submission and funding month of 2024. The consolidation of our brand in July was highly successful, marking a critical milestone. Being unified under one brand sets the stage for modernizing our approach to customer experience and acquisition. Developing a digital-first channel with a modern advertising strategy is vital for mainstreaming our products and enhancing production efficiency. This means building a channel to supplement our existing lines of business that prioritizes online experiences over traditional methods and leverages automated digital tools to improve efficiency and the overall ease of transacting. We believe this will result in materially lower costs of origination and an overall better customer experience. Our digital innovation strategy is designed to deliver financial services to seniors in a way that is both modern and user-friendly. We launched a new HomeSafe Second focused digital marketing campaign at quarter-end to identify strategies that attract new customers and are in the process of building out a dedicated team to support these efforts. As the campaigns and team mature, insights gained will inform our growth strategy and investments for a digital-first channel for next year and beyond. We are also focused on improving our overall marketing strategy with the new advertising agency by introducing regional and local programs to build our brand profile and drive business in strategic markets starting in 2025. Regarding product innovation, we recently expanded our HomeSafe Second product to additional states and materially lowered the loan interest rate. HomeSafe Second allows homeowners aged 55 and older to access their home equity without affecting their traditional low-rate first lien mortgage. In the third quarter, we saw an 89% increase in HomeSafe Second compared to Q2, and we anticipate further growth in this area as we intentionally invest more capital and resources into the products. While home equity lending nationwide is on the rise, recent HMDA data shows people 55 and older face denial rates eclipsing 35%. Many have considerable home equity but struggle with tighter credit conditions affecting qualification. This represents a significant opportunity for us as our products are specifically designed to serve this demographic. If rates stay higher for longer, our second lien home equity loan will continue to be a better option for many borrowers 55 and older. When rates start to fall, the traditional home equity conversion mortgages and our first lien proprietary suite may offer more attractive outcomes as well as increased refinance opportunities to our borrower base. By harnessing the power of digital innovation and leveraging a modernized approach to advertising, we're poised to transform how we deliver our services to our customers and help empower more of them to unlock the full potential of retirement through the power of their home's equity. Now I'll turn it over to Matt to discuss our financials.

Thank you, Kristen, and good afternoon, everyone. Let me start with a brief overview of our financial results before I dive into specifics on the quarter. As Graham noted, we delivered $204 million in net income or $8.48 in basic earnings per share with adjusted net income reaching $15 million or $0.67 in adjusted earnings per share, adjusted EBITDA hitting $32 million. Our funded volume for the quarter was $513 million, which exceeded our guidance range of $475 million to $500 million. Tangible net worth rose to $231 million or approximately $10 per share. Comparing our performance to the previous quarter, we saw notable improvements across the board. Revenue increased from $79 million in Q2 to $290 million in Q3, driven by higher origination volumes and significant fair value gains on our residual assets. Net income rose to $204 million in Q3 from a loss of $5 million in Q2, largely due to favorable fair value adjustments from improving market inputs and model assumptions, combined with increased operational efficiencies. Adjusted EBITDA also saw an uptick, growing from $10 million last quarter to $32 million in Q3. This reflects a combination of higher revenue from increasing volumes and improved margins along with continued reductions in operating expenses, particularly in the salaries and benefits as well as the general and administrative expense lines. Continuing to look at our quarter over quarter performance, we see solid progress across several financial metrics as outlined in the income statement slides in the earnings supplement. First, net portfolio interest income saw a slight decline primarily due to the higher interest expense from our new non-agency financing facilities, as we discussed last quarter. This was, however, more than offset by a reduction in fair value changes from model amortization, which led to a higher accretive yield on our portfolio compared to last quarter. On the originations front, net originations gains increased notably from $40 million to $57 million as our originations platform grew both in volumes by 15% and margins by 19%. On the expense side, total expenses continued to decrease as a result of the company's cost-saving initiatives. Salaries and benefits saw the largest reduction driven by the impact of our rightsizing efforts. This was the first full quarter in which we realized the full benefits of these operational efficiencies. This quarter-over-quarter improvement highlights the strength of our business model, our ability to adapt to market conditions, and the operational discipline that has positioned us for sustained profitability. Looking at our year-to-date performance, we've made significant progress across several key financial metrics. Through the third quarter of 2024, we generated $444 million in total revenue. Net income year to date has reached $183 million, while adjusted net income stands at $9 million. Additionally, adjusted EBITDA for the first 9 months of the year totaled $42 million, demonstrating the strong momentum we've built throughout 2024. These results reflect the success of our strategic initiatives, improved operational efficiencies, and disciplined cost management, which have all contributed to enhanced profitability and long-term growth potential. Our adjusted earnings per share came in at $0.67 for the quarter underscoring our ability to drive both top-line growth and operational improvements. As we continue executing our plan, we expect to achieve sustained profitability by investing in growth opportunities in our origination platform and maintaining an optimized fixed-cost structure. For 2025, we expect to deliver adjusted earnings per share between $2.60 and $3, and remain confident in our trajectory and our ability to meet our financial targets. Turning to the balance sheet. With the completion of the unsecured note exchange, which has bolstered our capital structure and extended our debt maturities, we've greatly enhanced our ability to focus on growth. Recently, our team has executed several transactions that were critical to supporting our long-term objectives and maintaining financial flexibility. During the third quarter, we completed another quarterly securitization of our HomeSafe product totaling $794 million, our third such securitization of 2024, which provided us with enhanced liquidity. In the month of October, we completed the call on a reissue of our HECM buyout securitizations totaling $705 million, running long-term financing for this asset class and generating positive cash flow for the business. Looking ahead, we are encouraged by the favorable trends in the reverse mortgage market and the strength of our proprietary product offerings. Our ability to adapt to changing market conditions, combined with a strong balance sheet following the successful debt exchange and improving liquidity position, provides a solid foundation for future growth. We expect to continue generating positive cash flow and building on our financial successes as we progress into the fourth quarter and 2025. With that, let me hand it back to Graham for closing remarks.

Yes. Thank you, Matt. As we conclude the successful third quarter, I want to express my gratitude for the dedication and resilience of our team. Their efforts are central to Finance of America's strong performance, and I'm proud of the results we've delivered. Looking ahead, as Matt noted, we expect to deliver adjusted earnings per share between $2.60 and $3 in 2025 as we continue to execute our plan and achieve sustained profitability. With the senior population expected to nearly double by 2050, we are excited about our pipeline of submission volumes, and we see a massive total addressable market over the long term, which we are well positioned to capture as the market grows. When you consider the record number of seniors who are financially well prepared for retirement while simultaneously holding a record amount of home equity, we'll be poised to meet their needs with our home equity-based retirement products. And with that, we'll open the call up for some questions.

Thank you. One moment, please for your first question. Your first question comes from Douglas Harter with UBS. Your line is open.

For '25.

So the number we have is over $500 million in our third quarter. We expect to see something in that same range here in the fourth quarter. For next year, we are starting to see some sequential growth. As you pointed out, the rates are up a little bit. We'll see where the rates settle in the long term. Some of the growth initiatives we have planned stretch into 2025, and we previously believed we could increase that number a bit. So, we are probably looking at around $2.7 billion for the full year of 2025.

Got it. Thank you.

Got it. That's helpful. Thank you. And also could you give us an update on the timing and your thoughts on the impact of HMBS 2.0?

Got it. Thank you. That's all from me.

Your next question comes from Stephen Laws with Raymond James. Your line is open.

That's a great question, Steve. I'll begin, and then I'll let my team chime in. As Kristen pointed out, October was our best month this year for both funding and submission volumes. We've had a strong start in terms of funding for the quarter, and our pipeline looks solid as we move into the remainder of Q4, which is promising. However, November and December bring holiday seasons, which could potentially limit our funding capabilities and impact lead generation and new pipeline activity. Therefore, while we have had a strong beginning in Q4, we anticipate that it will likely align with the context of Q3. Any seasonal effects will probably manifest in the Q1 volumes, mainly due to the reduced lead generation in November and December. After Q1, we expect to see a significant increase.

Yes. And I just add. We've had such low market penetration that as rates stay higher for longer, we continue to get more interest from traditional mortgage bankers and loan officers, which can then go out and tap more of that available market that isn't being educated on the product opportunity today. So we see that as a potential growth opportunity for 2025 as well.

Great. Appreciate the comments this afternoon. Thank you.

This concludes the question-and-answer session. I will turn the call to Graham Fleming for closing remarks.

Yes. Thank you, everybody, for your time today, and we look forward to updating our Q4 and full-year results in March of next year. So thank you very much.

This concludes today's conference call. Thank you for joining. You may now disconnect your lines.