Good afternoon. Thank you for attending today’s Finance Of America First Quarter 2023 Earnings Call. My name is Frances, and I will be your moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answer at the end. [Operator Instructions] I would now like to pass the conference over to our host, Michael Fant with Finance Of America.

Thank you, and good afternoon, everyone. Welcome to Finance of America’s first quarter earnings call. With me today are Graham Fleming, Chief Executive Officer; and Johan Gericke, 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.financeofamerica.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 to the extent available without unreasonable effort discussed on today’s call in our earnings press release and presentation on the Investor Relations page of our website. 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 Factor section of Finance of America’s annual report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 16, 2023. As such, risk factors may be amended and updated in our subsequent filings with the SEC. We are not undertaking any commitment to update these statements if conditions change. Please note these are interim period financials and are unaudited. Now, I would like to turn the call over to Finance of America’s Chief Executive Officer, Graham Fleming. Graham?

Thank you, Michael. Good afternoon, everyone. And thank you for joining us on our first quarter 2023 earnings call. I am excited to join the call today as Finance Of America’s CEO. I believe strongly that Finance Of America provides a truly differentiated and modern retirement solutions platform that gives older Americans more choices and new ways to consider and fund their retirement and I am honored to drive that vision forward. For today’s call I will begin with a brief discussion of our financial results for the quarter. I will then spend the remaining time focused on our go-forward business structure and strategic priorities. Johan will then offer a deeper dive into our financials. We achieved several milestones in the first quarter. This was largely due to our efforts over the past year to streamline the organization and invest in core businesses that underpin our modern retirement platform with home equity as a centerpiece. Current demographic trends point to substantial market opportunity and we believe FOA has the significant competitive advantages needed to capitalize on this. On a continuing operations basis, we recorded GAAP net income of $55 million or $0.29 per basic share in Q1, driven primarily by favorable increases in valuations across our asset base. On an adjusted basis, we recognized a net loss of $15 million or $0.08 per fully diluted share. For the year, we expect our adjusted diluted earnings per share for continuing operations to be between $0.09 and $0.12, as we complete the integration of AAG and optimize our corporate structure. As Johan will touch on in a moment, we recently updated our segment reporting to align with our new operating structure. We believe the new structure offers a simpler and more accurate breakdown of Finance of America today and moving forward. Both…

Thank you, Graham, and good afternoon, everyone. As Graham mentioned, we have made significant changes to our financial reporting in the first quarter. Following the successful wind down of our mortgage operations, along with the recently announced divestitures of our commercial title insurance and lender services businesses, we have designated each of these business lines as discontinued operations. For the quarter, our continuing operations reported net income of $55 million or $0.29 per basic share, primarily driven by the market rate changes that increased the value of our reverse assets. Excluding these fair value changes and other non-recurring items, the company reported an adjusted net loss of $15 million or $0.08 per fully diluted share as earnings in our operating segments were more than offset by corporate expenses. From a balance sheet perspective, the acquisition of the assets of AAG occurred on March 31st, adding $5.6 billion in assets and $62 million in equity to the company. Most significantly, we added $5.4 billion in loans held for investment subject to HMBS obligations. Additionally, the $30 million capital raised from existing shareholders and profitable results for the quarter led to a significant improvement in tangible equity. As of March 31st, the company reported $203 million in tangible equity, an increase of 88% from December 31st. Additionally, we have worked diligently to delever our balance sheet. As of September 30 of last year, the company had $2.3 billion in other financing lines of credit. As of March 31, that number had decreased by 52% to $1.1 billion. Over the same time frame, loans held for investment and loans held for sale, declined from $2.2 billion to $0.8 billion or a reduction of 62%. As we streamline our organization, we have also updated our segments to more closely align with our go-forward business…

Thank you, Johan. Overall, we are pleased with our start to the year. The continuing operations of our business was profitable and we hope to deliver further value by focusing on our core businesses and rightsizing our corporate infrastructure. Moving forward, we are confident we will drive continued strength in Retirement Solutions and Portfolio Management, as we work through these efforts and we believe in the long-term earnings power of our organization. With that, Operator, we will open it up for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Stephen Laws with Raymond James. Please go ahead.

Hi. Good afternoon. Looks like a really solid quarter, you guys came in a little ahead of me and I always love to see that, kind of wanted to get your thoughts, maybe, first, Graham, from a higher level, can you talk about the turmoil of banks kind of what if any direct impacts are there from that? And maybe how much do you compete with banks for some of your loan products or maybe in home improvement or asked another way, credit availability is contracting elsewhere in the system. How much -- are you seeing anybody turn yet to your products, do you think that’s the coming opportunity, how do you think about the bigger picture in the banking market?

Yeah. So, Stephen, thanks for the question. So let’s look at it through two lines, right? On the reverse side, right, we haven’t necessarily seen banks in that space for a number of years, right, non-bank lenders? Although, we would be thrilled if the bank has been into the space that would increase the visibility of the product with our customer base. But on the home improvement, right? We have seen or we have read right around Goldman and Marcus and them selling their portfolio and potentially exiting that business. So we do see that as an opportunity. We haven’t seen -- we have been focused on the integration of AAG and getting those LOs licensed and getting the marketing up the curve. So we have been focused on getting the AAG guys back to where they were pre-acquisition. Haven’t seen any earlier indications yet on the tightening of credit. We have seen some widening of spreads here in Q2, as we work through some deals, but nothing that indicates it’s going to be longer term, right? But we have seen some widening, but we haven’t seen much in the way of credit tightening at this point.

Yeah. I appreciate those comments and kind of lead to a follow-up on outlook for origination volume. I think in your prepared remarks, maybe you said seasonality and maybe a little bit more competition, but can you talk about volumes maybe in April and it seems like margins really improved sequentially and how you are seeing margins hold up quarter-to-date?

Yeah. Stephen, thank you. Yeah. So we expect volumes to pick up in Q2, obviously, on the back of the AAG acquisition, right? And so, as I look at where we stand today, probably, closer to Q4, once we get the AAG integration fully up to speed. Just from a practical perspective, the first few weeks in April, we had to go through typical integrate some things when you do an asset acquisition, so there were some licensing. We are just getting everybody fully integrated into the platform and that’s working perfectly. So if all, obviously, we won’t have the full benefit of the origination power of AAG. But once we roll into the second part of Q2, I expect that to be operating smoothly and as it had prior to the acquisition. As Graham said, our spreads widened a little bit starting here in April, probably on the back of the banking dislocation, so to speak. So margins may be a little bit softer in Q2, but it’s so early, it’s hard to say where we end up, to be honest.

Yeah. No. Fair enough. I appreciate the comments this afternoon. Thank you.

Thank you for your questions.

Yeah.

The next question comes from Leon Cooperman with Omega Advisors. Please go ahead.

Yeah. Thank you. There have been a number of changes in the company as you transition to a modern retirement structure. What do you think your normalized earnings are as you restructure the company looking at 12 months, 18 months from today, no voice?

12 months, 18 months from today? It’s going to be, obviously, volume dependent. But I think if we look at where we saw Q4, right, and we say, okay, with the AAG acquisition, we can get something better than that, right? And then you say what is a decent bottomline for that business and I still believe that it’s somewhere in the 4% to 5% range of funded volume, right? And then you look at the Portfolio Management segment, which should run relatively stable and once we layer in the AAG acquisition, that number should maybe be twice as high as what it is today. And then we do some further rationalization in Q1, we said we expect our Corporate expenses to come down to what half of it what it was at the peak. So we are about two-thirds of the way there, I’d say. So when you layer all of that in, it should give you a good indication of kind of where the profitability is.

Is that in excess of $0.50 a share?

No. I mean…

Yeah. At the right volume could be, yeah.

Okay. Thank you.

Thank you for your question. At this time, there are no further questions waiting. So I will pass the conference back over to Graham for any additional remarks.

Yeah. Thank you, Frances. I want to thank everybody for joining the call. I appreciate the questions and we look forward to our next earnings call in August to provide an update on our progress. So thank you everybody for joining.

That concludes the Finance of America first quarter 2023 earnings call. Thank you for your participation. You may now disconnect your lines.