Finance of America Companies Q1 Earnings Call Highlights

Key Points

• Profitable Q1 and stronger balance sheet: FOA reported net income of $35 million and adjusted net income of $26 million (up 112% YoY), tangible equity of $268 million, cash of $108 million, used $40 million to repurchase Blackstone’s stake, and plans to retire the remaining $150 million of senior secured notes later in 2026.
• Originations and marketing momentum: Fundings rose to $596 million (up 6% YoY) while submissions hit a record $918 million (up 20% YoY), supported by digital/AI enhancements and a 32% increase in the HomeSafe Second product.
• Capital markets strength and updated outlook: Portfolio management benefited from $1.7 billion of securitizations, management raised full‑year adjusted EPS guidance to $4.50–$5.00, and the PHH transaction will close in two phases with the first phase expected in May and HECM servicing rights pending Ginnie Mae approval.

Finance of America Companies NYSE: FOA reported a profitable start to fiscal 2026, pointing to accelerating origination momentum and strong capital markets execution in its first quarter earnings call. Management highlighted rising submissions, improving marketing efficiency, and significant securitization activity as key drivers of results, while also updating investors on the timing of its previously announced PHH transaction.

First quarter results and balance sheet progress

Chief Executive Officer Graham Fleming said the quarter featured “operational momentum and originations driving an acceleration of volumes,” alongside “excellent profitability” in the company’s portfolio management segment and ongoing improvement in liquidity and capital position.

Fleming reported net income of $35 million and adjusted net income of $26 million, or $1.10 per share, which he said was up 112% from the year-ago quarter. He added that the performance drove tangible equity to $268 million, or about $15 per share.

Chief Financial Officer Matt Engel said cash increased to $108 million at the end of the first quarter from $90 million at the end of 2025, and was up 108% year-over-year. Engel also noted the company generated $58 million in cash flow from originations and capital markets activities during the quarter and used $40 million to complete the repurchase of Blackstone’s equity position.

Looking ahead on capital structure, Engel said the company views retiring the remaining $150 million balance of its senior secured corporate notes later in 2026 as “the most prudent use of our liquidity and capital in the near term,” describing the plan as a path to a “very strong balance sheet.”

Originations rise as submissions and second-lien demand build

From a production standpoint, Fleming said Finance of America funded $596 million in the quarter, up 6% year-over-year. He said operational enhancements to the platform are beginning to show up in March and April fundings, consistent with the company’s prior volume outlook.

President Kristen Sieffert described first quarter performance as evidence the business is reaching an “inflection point.” She said originations increased 6% year-over-year, while submissions—applications with supporting paperwork completed—reached a record $918 million, up 20% year-over-year. Sieffert called submissions one of the company’s “clearest leading indicators of future funded volume.”

Sieffert also highlighted growth in the company’s second-lien proprietary reverse mortgage offering. HomeSafe Second reached a “high watermark” in the quarter, increasing 32% year-over-year, and the company rolled out a new line-of-credit option for HomeSafe Second to broaden customer use cases.

In response to an analyst question about product mix and customer behavior, Sieffert said borrowers typically select the product that best matches their needs, largely based on proceeds relative to existing debt and home value. She said proprietary products tend to be a natural fit for jumbo homes, while the second-lien product is aimed at homeowners who want to keep an existing first mortgage—often with a low interest rate—while accessing home equity without taking on another payment that would affect cash flow.

Marketing funnel trends and technology initiatives

Sieffert said momentum exiting the quarter was strong across the marketing funnel. She reported that inquiry volume in March was up 84% versus the 2025 average, while cost per inquiry declined 19%. She also said “opportunities,” defined as qualified warm transfers to loan officers, reached a new high in March, up roughly 58% over 2025 levels.

Further down the funnel, Sieffert said customers opting into the company’s digital prequalification experience more than doubled sequentially, and submissions per loan officer in March reached the highest level in the history of the retail channel, up 47% compared to 2025 levels.

Sieffert attributed the improvements to the company’s operating model and proprietary technology, including an end-to-end platform she referred to as “HELOCs,” with “Joy” as an AI layer. She said the AI deployment is intended to more consistently match customers with appropriate solutions and improve the customer experience, while also enhancing marketing efficiency and lowering the cost per lead.

Portfolio management strength driven by securitizations

Engel said the retirement solutions segment (originations) generated $14 million in adjusted net income, down from the fourth quarter due to typical seasonality, but up 56% year-over-year. He credited higher conversion rates and improved revenue margins, which he said increased year-over-year as proprietary production grows.

In portfolio management, Engel reported $28 million in adjusted net income. He said performance was driven primarily by $1.7 billion of securitization activity across proprietary reverse and HECM buyouts. Engel said results benefited from “tight spreads and relatively lower interest rates,” as well as the timing of execution within the quarter, while noting that timing can vary from quarter to quarter.

For the corporate segment, Engel said adjusted earnings—reflecting overhead and interest expense on non-funding debt—were materially in line with prior quarters, with reduced non-funding interest expense offset by technology investments.

Guidance raised; PHH transaction split into two phases

Engel said the company is maintaining its 2026 funded volume outlook of $2.8 billion to $3.1 billion. However, he raised full-year adjusted earnings per share guidance “above our previously stated range” to $4.50 to $5.00 per share, citing first quarter performance and business momentum.

On the previously announced PHH transaction, Fleming said the deal has been modified to close in two phases. He said the first phase—covering origination, product marketing, and sub-servicing components—is expected to close in May. The second phase, which includes the purchase of HECM servicing rights, will follow after the company continues working with its primary regulator, Ginnie Mae, on related approval. During the Q&A, management directed investors to additional details in an 8-K filed after the market close.

In closing remarks, Fleming said the “takeaway from the first quarter is straightforward,” citing “clear improvement in the underlying drivers of the business” that is translating into stronger production and financial results. The company said it expects to provide an update with second quarter results in August.

About Finance of America Companies NYSE: FOA

Finance of America Companies NYSE: FOA is a diversified nonbank financial services firm specializing in mortgage and insurance products for consumers. The company operates across multiple business segments, delivering home financing solutions, retirement products and specialized lending services through a blend of digital and traditional distribution channels.

In its mortgage segment, FOA originates and purchases a range of home loans including purchase, refinance, FHA, VA and USDA loans.

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