Picture supply: The Motley Idiot.
Date
Could 5, 2026, 5 p.m. ET
Name members
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Chief Government Officer — Graham Fleming
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President — Kristen Sieffert
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Chief Monetary Officer — Matthew Engel
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Director of Investor Relations — Michael Fant
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Full Convention Name Transcript
Michael Fant: Thanks, and good afternoon, everybody, and welcome to Finance of America’s First Quarter 2026 Earnings Name. With me in the present day are Graham Fleming, Chief Government Officer; Kristen Sieffert, President; and Matt Engel, Chief Monetary Officer. As a reminder, this name is being recorded, and you’ll find the earnings launch and associated presentation on our Investor Relations web site at ir.financefamericacompanies.com (sic) ( ir@financeofamerica.com ). Additionally, I wish to remind everybody that feedback on this convention name could also be forward-looking statements throughout the that means of the Non-public Securities Litigation Reform Act of 1995 relating to the corporate’s anticipated working and monetary efficiency for future durations.
These statements are based mostly on the corporate’s present expectations and are topic to the secure harbor assertion for forward-looking statements that you can find in in the present day’s earnings launch. Precise outcomes for future durations could differ materially from these expressed or implied by these forward-looking statements resulting from numerous dangers or different elements, together with these which can be described within the Danger Components part of Finance of America’s annual report on Kind 10-Ok for the yr ended December 31, 2025, filed with the SEC on March 13, 2026. Such danger elements could also be amended and up to date in our subsequent filings with the SEC. We’re not endeavor any dedication to replace these statements if circumstances change.
Please be aware, in the present day, we can be discussing interim interval financials for our persevering with operations, that are unaudited. As well as, we’ll check with sure non-GAAP monetary measures on this name. Yow will discover reconciliations of non-GAAP to GAAP monetary measures to the extent obtainable with out unreasonable efforts in our earnings press launch and presentation on the Investor Relations web page of our web site. Now I’ll flip the decision over to our Chief Government Officer, Graham Fleming. Graham?
Graham Fleming: Thanks, Michael, and good afternoon, everybody. The primary quarter of 2026 was an impressive quarter, with operational momentum in originations driving an acceleration of volumes, wonderful profitability in our Portfolio Administration section, and regular enchancment in our monetary outcomes, liquidity, and capital place. On our name in the present day, I’ll take you thru the highlights, then spend a second commenting in the marketplace alternative in reverse mortgages, which we imagine is important; Kristen will dive into our originations efficiency; Matt will touch upon the financials; after which we’ll take your questions.
To begin with, if you happen to flip to Slide 5 of the accompanying presentation, Finance of America generated internet earnings of $35 million and adjusted internet earnings of $26 million, or $1.10 per share, up 112% from final yr’s first quarter outcomes. This powered a powerful improve in tangible fairness to $268 million, or roughly $15 per share. These outcomes are in line with the steerage now we have issued for 2026, which Matt will replace you on in a second. From a manufacturing standpoint, we funded $596 million within the quarter, up 6% year-over-year.
As you’ll recall, we talked about operational enhancements to our platform, driving an inflection level in outcomes, and we’re beginning to see that within the March and April fundings, in line with the quantity steerage now we have shared with you. Individually, I am excited to see us rolling out a brand new second-lien reverse mortgage line of credit score, which is a superb product to assist seniors faucet straight with the timing and quantities that exactly go well with their wants. Relating to the beforehand introduced PHH transaction, the transaction has been modified to shut in 2 distinct phases. The primary section, consisting of the origination, advertising and marketing of our merchandise and subservicing parts, is anticipated to shut in Could.
The second section, which incorporates the acquisition of HECM servicing rights, will observe as we proceed to work with our major regulator, Ginnie Mae, on the associated approval. Extra data may be present in in the present day’s 8-Ok submitting with the SEC. Earlier than turning the decision over to Kristen, I wish to spend a second on the chance in reverse mortgages, that are sometimes seen as a distinct segment product within the broader mortgage universe, and in our expertise are usually not properly understood by buyers lacking the expansion potential. In case you flip to Slide 6, let me share with you a snapshot on present {industry} volumes.
As you possibly can see from the highest chart of this slide, government-insured reverse mortgages, or HECMs, have been working roughly flat for the final 3 years at roughly $4 billion per yr, down considerably from the increase skilled in the course of the pandemic, pushed by refinance exercise. What’s noteworthy, however is considerably laborious to see given the shortage of constantly obtainable {industry} information, is the market enlargement associated to proprietary merchandise. This is likely one of the causes we imagine the fairness markets have been sluggish to choose up on the chance.
These proprietary merchandise considerably increase the market by making reverse mortgages obtainable to debtors aged 55 and older in sure states, in comparison with age 62 for government-insured merchandise, and by providing jumbo balances and a spread of product constructions, together with first liens, second liens, and features of credit score. For instance, Finance of America’s second-lien merchandise can present an answer for debtors who wish to entry house fairness whereas sustaining a low price major mortgage. These merchandise are actually essential to look at as a result of their rising origination volumes show the rising mainstream acceptance of reverse mortgages by American seniors. Finance of America has been the market chief in proprietary reverse merchandise for over a decade.
These merchandise have been a major and accelerating driver of our development during the last 3 years as they proceed to achieve acceptance from our prospects and from our buyers alike. With this thought in thoughts, if you’ll flip to Slide 7, I’ll finish my ready remarks by reminding you that American seniors management an enormous quantity of house fairness, roughly $14.6 trillion. And this fairness is anticipated to proceed to develop as properties proceed to understand and because the inhabitants ages. Between 2024 and 2026, census information exhibits that over 11,000 Individuals flip 65 day-after-day.
Now these are huge numbers, making the addressable market greater than 100x larger than the scale of the whole reverse mortgage inhabitants excellent in the present day, and never everybody goes to grow to be a reverse buyer. Nonetheless, because the proprietary product set continues to increase and American seniors flip to house fairness for an ever -widening set of use instances, we imagine there’s a huge multiyear development alternative shaping up for Finance of America. And with that, I am going to flip the decision over to Kristen.
Kristen Sieffert: Thanks, Graham, and good afternoon, everybody. Final quarter, I stated we have been reaching an inflection level within the platform. What we noticed within the first quarter reinforces that view, and we are able to see it clearly within the numbers. Turning to Slide 8. General originations have been up 6% year-over-year, and first quarter submissions reached a brand new excessive of $918 million, which is up 20% year-over-year. Submissions characterize prospects who’ve accomplished their software and supplied all supporting paperwork. They’re considered one of our clearest main indicators of future funded quantity and why we stay assured in our quantity steerage. Our volumes mirror a mixture of each HECM and proprietary merchandise throughout first and second liens.
I particularly name out our HomeSafe Second, which reached a excessive watermark within the quarter, rising 32% year-over-year. And as Graham talked about, we rolled out a brand new line of credit score possibility for HomeSafe Second, additional increasing the use instances for our prospects. Finance of America has lengthy been a frontrunner in proprietary merchandise supported by our understanding of the client and powerful capital markets relationships, which proceed to help development throughout each our retail and wholesale channels. Whereas HECM is structured to a one-size-fits-all method, FOA’s industry-leading product improvement and partnerships permit us to raised goal the varied and bespoke wants of our huge buyer base, which is able to result in continued worthwhile development. Turning to Slide 9.
On the high of the funnel, momentum exiting the quarter was robust. Inquiry quantity in March was up 84% versus the 2025 common, whereas price per inquiry declined 19%. Alternatives, outlined as certified heat transfers to mortgage officers, additionally reached a brand new excessive in March, up roughly 58% over 2025 ranges. Additional down the funnel, we’re seeing equally robust progress in early conversion. Debtors opting into our digital prequalification expertise greater than doubled sequentially, and submissions per mortgage officer in March reached the best stage within the historical past of our retail channel, up 47% in comparison with 2025 ranges. These enhancements are being pushed by the working mannequin we have been constructing.
Helix is our proprietary, industry-first, end-to-end platform that connects how we purchase, consider, and transfer prospects by way of the method, with Pleasure working because the AI layer throughout that system. The deployment of AI helps us in 2 methods: first, by permitting us to extra constantly match prospects with the best answer and enhance their total expertise; and second, by bettering our top-of-funnel advertising and marketing and ensuing price per lead. Incorporating AI throughout the platform is driving significant enhancements that may compound as we develop and scale. Helix and Pleasure give us a aggressive benefit over friends who depend on vendor methods, and I stay up for updating you on our progress as we construct out new capabilities.
Stepping again, that is occurring in a market that continues to be considerably underpenetrated. As Graham talked about, in the present day, there’s lower than $100 billion of reverse mortgage quantity excellent in comparison with an estimated $14.6 trillion of senior house fairness. Because the class chief with roughly 30% market share, our scale, product breadth, and working mannequin place us to seize extra of this underpenetrated alternative, supporting higher outcomes for purchasers in retirement, and strengthening the sturdiness and scalability of our earnings. With that, I am going to flip it over to Matt.
Matthew Engel: Thanks, Kristen, and good afternoon, all. Graham already gave you the headline outcomes, so I am going to offer you some added colour for the quarter, which you’ll find in in the present day’s earnings launch and summarized by section on Slide 11. As talked about, we generated $35 million of internet earnings and $26 million of adjusted internet earnings. Adjusted earnings per share of $1.10 was up 112% year-over-year. Beginning with Retirement Options, which represents our originations platform, adjusted internet earnings was $14 million, down from the fourth quarter because of the typical seasonality in originations, however up considerably year-over-year, the truth is, up by 56%.
Driving these outcomes was the upper conversion charges Kristen talked about, in addition to improved income margins, which elevated year-over-year, reflecting the robust execution we’re seeing as proprietary manufacturing continues to develop. Portfolio Administration delivered robust outcomes for the quarter, producing $28 million in adjusted internet earnings. Efficiency was pushed primarily by $1.7 billion of securitization exercise throughout each proprietary reverse and HECM buyouts. Outcomes benefited from favorable market circumstances, together with tight spreads and comparatively decrease rates of interest, in addition to the timing of execution throughout the quarter. Whereas timing can fluctuate quarter-to-quarter, our outcomes mirror the power of our platform and our means to constantly determine and execute on engaging capital markets alternatives.
Company section adjusted earnings, which displays overhead and curiosity expense on our nonfunding debt, was materially in keeping with prior quarters, reflecting lowered nonfunding curiosity expense, offset by investments in know-how. General, these outcomes drove a sequential improve in tangible fairness to $268 million, or roughly $15 per share. With respect to our valuation, we imagine the rising origination and earnings energy that we proceed to show will, over time, warrant a better a number of on each an earnings and tangible fairness foundation. Turning to key steadiness sheet metrics on Slide 12.
You may see that our money balances elevated from $90 million on the finish of 2025 to $108 million on the finish of the primary quarter, and are up by 108% year-over-year. Through the quarter, we generated $58 million in money move from our originations and capital markets actions, and utilized $40 million to finish the repurchase of Blackstone’s fairness place. Presently, we view our plan to retire the $150 million steadiness of our senior secured company notes later this yr as essentially the most prudent use of our liquidity and capital within the close to time period.
This deleveraging plan will create a really robust steadiness sheet, which we view as an acceptable basis for the precious working franchise now we have constructed. Having stated that, given the robust outcomes we posted this quarter, we additionally see appreciable worth in our personal shares. We anticipate to revisit capital allocation priorities as we make progress towards the deleveraging plan. In case you flip to Slide 13, I am going to conclude my ready remarks by providing you with an replace on our steerage. For 2026, we’re sustaining our funded quantity outlook of $2.8 billion to $3.1 billion.
We’re additionally rising our steerage for full yr adjusted earnings per share above our beforehand acknowledged vary to between $4.50 and $5.00 per share, reflecting the robust first quarter efficiency and the momentum we’re seeing in our enterprise. With that, I might wish to ask the operator to open the decision for questions.
Operator: (Operator Directions) Your first query comes from the road of Timothy D’Agostino with B. Riley Securities.
Timothy D’Agostino: Congrats on the quarter. So on origination quantity, it seems like March was a fairly robust month. And I used to be questioning if you happen to might add some colour as to possibly why March was stronger than February and January. And if that quantity that was seen in March endured by way of April and into the start of Could?
Matthew Engel: Tim, I believe a few issues. One, I discussed there’s some regular seasonality. So our lead era capabilities in November and December has all the time curtailed a little bit bit simply from the vacation durations on the finish of November and the tip of December, after all. So that may lead naturally to some decrease fundings in January and February. However as you begin to get into the brand new yr and begin to crank that engine again up, you begin to see a lead move are available in, which actually begins to kick in February-March. That is simply type of regular seasonal stuff. I am going to possibly let Kristen increase on the improved efficiency we’re seeing from that advertising and marketing spend as properly.
Kristen Sieffert: Sure, I touched on Helix, and actually what we noticed in March was the work that we have been doing really producing the outcomes that we anticipated it to, beginning to come collectively in March. So we actually began to hit a special pace because it pertains to our origination quantity in March in consequence, and we anticipate that to proceed for the yr.
Timothy D’Agostino: After which on the funded quantity by product, particularly occupied with the primary quarter, clearly it is shifted extra in the direction of that proprietary product. However I assume relating to originations within the first quarter from the HECM product and the proprietary product, was there any modifications in demand or any colour you possibly can present on how owners are interacting with every product? Is the proprietary product gaining extra traction? Simply any colour on how owners are interacting.
Kristen Sieffert: Owners sometimes select a product that most closely fits their wants, which normally is a operate of the quantity of proceeds relative to the debt that they’ve and their house worth. So the place we see proprietary as pure suits are extra of the jumbo house sizes on our conventional suite. However the distinction for us in Q1 is we’re actually beginning to see our second-lien product improve in originations.
And people merchandise are for those who actually have a special use case within the sense that they are pleased with their first mortgage, sometimes a low rate of interest, they will afford that fee, however they’ve an incredible quantity of house fairness that they’d wish to faucet and might’t afford or don’t need one other fee to affect their money move. So for a HECM versus HomeSafe on the normal aspect, it is sometimes a operate of which product offers the client entry to essentially the most funds and depending on property worth. After which on the HomeSafe second-lien, it is based mostly on what I simply described, debtors in search of a special different.
Operator: (Operator Directions) And now we have a follow-up query from Timothy D’Agostino from B. Riley Securities.
Timothy D’Agostino: Let’s take the third query right here. I simply wished to see if you happen to had any extra updates or simply contact on anything relating to the PHH acquisition. I do know within the slide deck it was talked about that it was progressing, however I do not know if there was any extra colour you might present.
Graham Fleming: Sure. All the extra data, Tim, can be within the 8-Ok that we filed after the market in the present day. In order I stated in my remarks, we have bifurcated the transactions and the originations, the advertising and marketing of our product, and subservicing, which we anticipate to shut right here in Could. Now we have a small pool of HECM MSR in entrance of Ginnie Mae, which we’ll work with Ginnie Mae on gaining the suitable approvals after which shut on that when the timing is right, and we obtain that approval.
Operator: Now we have reached the tip of the Q&A session. I’ll now flip the decision again to Graham Fleming for closing remarks.
Graham Fleming: Sure. Thanks. The takeaway from the primary quarter is easy. We’re seeing clear enchancment within the underlying drivers of the enterprise, and that enchancment is beginning to translate into stronger manufacturing and monetary outcomes. And with that, we stay up for updating you in August with our Q2 outcomes. So thanks, all people, for becoming a member of the decision in the present day.
Operator: This concludes in the present day’s name. Thanks for attending. Chances are you’ll now disconnect.
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FOA Q1 2026 Earnings Call Transcript was initially revealed by The Motley Idiot
