Finance of America Companies NYSE: FOA reported second-quarter adjusted net income of $19 million, or $0.84 per share, as higher reverse-mortgage production and cash generation supported its full-year outlook despite a GAAP net loss tied largely to fair-value adjustments.
For the first half of 2026, the company generated adjusted net income of $45 million, or $1.94 per share, representing an 81% increase from the first half of 2025, Chief Executive Officer Graham Fleming said during the company’s earnings call. Finance of America reaffirmed its full-year guidance for funded volume of $2.8 billion to $3.1 billion and adjusted earnings per share of $4.50 to $5.00.
Production Growth and Improving Conversion
Finance of America funded $730 million of reverse mortgages during the second quarter, up 21% from a year earlier. Originations for the first half rose 14% compared with the prior-year period, according to Fleming.
President Kristen Sieffert said quarterly submissions exceeded $1 billion, rising about 11% sequentially and 19% year over year, even as interest rates increased. The company attributed the growth to investments in distribution, technology and proprietary products.
Retail-channel results showed improving conversion and sales productivity. Retail opportunities rose 9%, submissions increased 19% and funded loans climbed 33%, while sales capacity remained stable. Funded loans per call-center loan officer increased nearly 30% from the first quarter, Sieffert said.
The company’s digital pre-qualification engine was also a source of customer engagement. About 10,000 website visitors used the tool in June, reaching Finance of America’s year-end monthly target six months early. Monthly pre-qualification offers rose nearly 90% from the first quarter, while time to application improved about 57%.
Sieffert said the company’s technology and artificial-intelligence capabilities, including its Helix platform and Joy AI initiatives, were supporting productivity improvements across loan-officer operations and the digital funnel.
Proprietary products continued to expand, with proprietary submissions increasing approximately 20% and fundings rising about 25% during the quarter. In response to an analyst question, Sieffert said demand for proprietary products has increased because those offerings currently provide better consumer cash flow in the prevailing rate environment. She said demand generally shifts toward the product best suited to an individual customer.
GAAP Loss Reflects Fair-Value Volatility
Finance of America recorded a GAAP net loss of $29 million in the second quarter, compared with adjusted net income of $19 million. Chief Financial Officer Matt Engel said the difference was driven primarily by $84 million of negative non-cash fair-value adjustments, as well as certain one-time impacts.
The fair-value adjustments included the effects of higher interest rates on the company’s portfolio and a $24 million adjustment related to its convertible notes. Because the notes are carried at fair value and indexed to the company’s stock price, an increase in Finance of America’s share price raised the value of the liability and resulted in a non-cash GAAP expense, Engel said.
The company also released its deferred-tax-asset valuation allowance, producing a $42 million tax benefit in the quarter. Engel said the adjustment reflects management’s expectation that future taxable income will support realization of the tax assets, and that investors should expect a more normalized effective tax rate going forward.
Adjusted EPS of $0.84 was 53% above the second quarter of 2025. The Retirement Solutions segment generated relatively stable sequential adjusted earnings despite higher personnel and marketing spending intended to support future production, Engel said. For the first half, the segment’s adjusted net income increased 21% on 14% higher funded volume.
Portfolio Management completed a securitization of more than $1 billion in June. The segment recognized $46 million in adjusted net income during the first half, up 24% from the prior-year period.
Cash Generation, Onity Acquisition and Debt Priorities
Cash generated from originations and capital-markets activities totaled $58 million in the second quarter and approximately $116 million for the first half, the company said. Finance of America used the quarterly cash generation to complete its acquisition of a mortgage servicing rights portfolio associated with a $5.2 billion HECM MSR facility from Onity, make a semiannual interest payment on its non-funding corporate notes and maintain cash balances at quarter-end.
Fleming said the Onity transaction, which closed June 30, diversifies the company’s servicing footprint and broadens the group of homeowners it can serve. In response to a question, he said the acquired asset had a book value of roughly $70 million and is expected to generate a yield in the mid-teens, with the contribution flowing through the income statement during the second half. The expected impact is already included in current guidance, he said.
Engel said the company’s first capital-allocation priority is retiring its remaining $150 million of senior secured notes in November. The repayment is expected to reduce non-funding debt, lower financing costs and improve recurring earnings. He said potential stock repurchases are unlikely to be a near-term focus before that debt is retired.
After the planned debt retirement, Finance of America expects to have greater flexibility for further deleveraging, share repurchases, dividends or business investment, Engel said.
Balance Sheet and Market Sensitivity
As of June 30, the adjusted net asset value of the company’s HECM mortgage-servicing-rights position totaled $326 million, with $46 million of financing, or roughly 14% leverage, according to Engel. The company said it continues to seek additional financing secured by that asset at what it considers a more appropriate attachment point.
Engel said rising rates contributed to portfolio markdowns during July, though market movements reversed somewhat during the first days of August. He did not provide a current tangible book value estimate because the company had not closed its July or third-quarter books.
Fleming added that fair value is influenced by more than interest rates, including home-price appreciation and credit spreads. The company expects an update on credit spreads through its planned September transaction.
Management said it remains focused on expanding reverse-mortgage production, improving operating efficiency, reducing debt and building a more scalable platform for home-equity solutions aimed at older homeowners.
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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