Finance of America Establishes New Reporting Segments
May 02 2023 - 7:00AM
Business Wire
Brings Focus to Company’s Retirement Solutions
Platform and Clarity to Strategic Vision
Finance of America Companies Inc. (NYSE: FOA) (“FOA” or the
“Company”) today announced changes to its financial reporting
segments, effective for the quarter ended March 31, 2023, to more
closely align with business strategy: Retirement Solutions,
Portfolio Management and Corporate & Other.
“Our new reporting structure is a natural evolution of our
business strategy, following a series of transformational actions
over the past year to reshape the business into a modern retirement
solutions platform,” said Johan Gericke, CFO of Finance of America.
“This new structure better aligns with our current brand and
product capabilities across the business, while providing greater
transparency to our investors.”
The updated segments are now as follows:
Retirement Solutions: This segment fulfills Finance of
America’s goal to help older homeowners achieve their financial
goals in retirement. This segment includes all loan origination
activity for the Company, including reverse mortgage and home
improvement lending. Finance of America originates or acquires
reverse mortgage loans through its subsidiary, Finance of America
Reverse LLC (“FAR”). These originations were previously attributed
to its Reverse Originations segment. The Retirement Solutions
segment will include originations of home equity conversion
mortgages (“HECM“) and non-agency reverse mortgages primarily
through company-owned field offices and a centralized retail
platform operated under the name American Advisors Group (“AAG”)
and a network of independent mortgage brokers through its wholesale
channel.
Additionally, this segment will include originations of home
improvement loans through the Company’s Home Improvement business
unit. These originations were previously attributed to the
Company’s Mortgage Originations segment.
Portfolio Management: This segment provides product
development, loan securitization, loan sales, risk management,
servicing oversight, and asset management services to the
enterprise and from time to time, to certain third-party funds. As
part of the vertical integration of Finance of America’s business,
its Portfolio Management team acts as the connector between
borrowers and investors. The Portfolio Management segment generates
revenue and earnings in the form of gains on sale of loans, fair
value gains on portfolio assets, interest income, and fee income
related to mortgage servicing rights, underwriting, advisory,
valuation, and other ancillary services. There is no change to the
Portfolio Management segment due to the realignment of the
Company’s segments starting with the quarter ended March 31,
2023.
Corporate & Other: This segment consists of Finance
of America’s corporate services groups. These groups support the
Company’s operating segments, and the cost of services directly
supporting the operating segments are allocated to those operating
segments on a cost of service basis. Enterprise-focused Corporate
and Other expenses that are not incurred in direct support of the
operating segments are kept unallocated within the Corporate and
Other segment. The main change to the Company’s Corporate &
Other segment is the addition of the offshore fulfillment services
division which was previously reported in the Lender Services
segment. The Lender Services segment has since been discontinued as
a consequence of the Company’s recent agreements for the sale of
the Company’s Title Insurance Business and certain other assets of
Incenter LLC (“Incenter”).
Discontinued Operations: Certain of the Company’s
historical operations met the disclosure requirements of
discontinued operations under U.S. Generally Accepted Accounting
Principles during the quarter ended March 31, 2023, whether due to
the completion of planned wind-down activities, sale, or pending
sale transactions. Current and historical financial results for
discontinued operations will not be included in the Company’s
segment reporting, noted above.
Finance of America will begin reporting its financial results
under the new segment structure in the Company’s Quarterly Report
on Form 10-Q for the quarter ended March 31, 2023. Summary segment
information will also be included in the Company’s quarterly
earnings release furnished to the Securities and Exchange
Commission (“SEC”) on Form 8-K, and on the Finance of America
website at www.financeofamerica.com.
About Finance of America
Finance of America (NYSE: FOA) is a modern retirement solutions
platform that provides customers with access to an innovative range
of retirement offerings centered on the home, including reverse
mortgages and home improvement loans as well as home-sharing
services. In addition, FOA offers capital markets and portfolio
management capabilities to optimize distribution to investors. FOA
is headquartered in Plano, Texas. For more information about FOA,
please visit www.financeofamerica.com.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including with respect to the Company’s expectations
regarding the segment realignment. Forward-looking statements are
not historical facts or statements of current conditions, but
instead represent only management’s beliefs regarding future
events, many of which, by their nature, are inherently uncertain
and outside of the Company’s control. These statements are subject
to risks, uncertainties, assumptions, and other important factors.
Factors that could cause the Company’s actual results to differ
materially from those expressed or implied in such forward-looking
statements include, but are not limited to, those described in the
section entitled “Risk Factors” included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2022, filed
with the SEC on March 16, 2023, 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. Readers are cautioned not to put undue reliance on
such forward-looking statements because actual results may vary
materially from those expressed or implied. The Company assumes no
obligation to, and expressly disclaims any obligation to, update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise except as required by
applicable law.
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For Finance of America Media Relations: pr@financeofamerica.com
For Finance of America Investor Relations:
ir@financeofamerica.com
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