A year after restructuring, Finance of America is moving forward with its reverse mortgage business ambitions, with the goal of ultimately doubling its current monthly origination volume.
While much of 2023 was focused on growing our presence in this space;
“There are significant gaps related to customer understanding and appeal of reverse mortgage products and the category as a whole,” Finance of America Company President Kristen Siefert said on the company's fourth-quarter earnings call.
Finance of America's goal is to ultimately originate $300 million per month in reverse mortgages, which would represent adjusted earnings of about 40 cents to 50 cents per share, Finance of America said. American executives said. Current monthly trading volume is between $100 million and $150 million, CEO Graham Fleming said on a conference call.
In the fourth quarter, Finance of America reported improved revenue with net income of $164.7 million. Earnings were highlighted by positive non-cash fair value changes in assets and factored in both his $171.4 million gain from continuing operations and his $6.7 million loss from discontinued segments.Quarterly profit reversed
For the full year, Finance of America reported a loss of $218.2 million, down from $715.6 million in 2022.
The company's Retirement Solutions segment generated $446 million in new reverse mortgages in the last three months of 2023, down from $512 million in the third quarter. The segment's pretax loss was $13 million, an improvement from $20 million in the third quarter.
The financial institution attributed the volume decline to seasonal patterns as well as the transition to a single origination platform following the AAG merger, the last major integration milestone.
“Much of the groundwork is nearly complete, which paves the way for us to shift our focus to the growth levers of the plan,” Seifert said.
Businesses may have major challenges in meeting their monthly sales goals.a
“We now have the ingredients to change this,” Seifert said. “In his three-year plan, we are committed to breaking through this adoption barrier by investing in the latest messaging digital technologies and customized customer-centric experiences.”
The plan will also lean toward artificial intelligence. “We have selected leading AI partners and are excited to leverage these tools across sales, operations, marketing and data analytics,” said Fleming.
Meanwhile, Finance of America's portfolio management unit posted a fourth-quarter profit before taxes of $217 million, compared with a loss of $124 million three months earlier.Assets under management increased to $26.8 billion from $26.0 billion sequentially
During the conference call, company leaders briefly addressed ongoing concerns regarding potential delisting from the New York Stock Exchange. The New York Stock Exchange warned Finance of America twice in three months for non-compliance after failing to maintain an average minimum stock price of $1 per share for 30 consecutive days.
As before, the company emphasized its intention to take the necessary steps for compliance within the six-month cure period.
“Finance of America's management team remains focused on increasing value for all stakeholders and ensuring the long-term success of the company,” said Matthew Engel, Chief Financial Officer. '', adding that there will be no impact on business operations.
The last time Finance of America closed above $1 was on February 15th, when it traded at $1.02. The stock's closing price on Wednesday was 87 cents.
