The company made net income from continuing operations of $80 million for the period ended June 30, unchanged from the first quarter and up from a $5 million loss one year prior.

"Just one year ago, we were exiting a period of transformation," CEO Graham Fleming said on the earnings call. "Since then, we've delivered five consecutive quarters of volume growth, regained profitability, launched a national brand campaign and stabilized our balance sheet."

The detail on FOA's transaction with Blackstone

One day prior to the earnings release, Finance of America announced it will repurchase all of Blackstone's equity stake in the company.

The total consideration will be just under $80.3 million, a Securities and Exchange Commission filing said.

The agreement values the Class A common shares of FOA at $10 per share; the Class B shares are being purchased for no consideration.

As part of this transaction, FOA retired an $85 million working capital line at a 15% interest rate, said Matthew Engel, chief financial officer.

Investors apparently looked favorably on this transaction. FOA announced it after the market closed on Aug. 4, with its stock price that day at $21.96 per share. The following morning it opened at $22.09 and closed at $22.89.

The filing also disclosed that FOA entered into convertible note purchase agreements for $40 million of debt. The notes mature on Aug. 4, 2028 and have a 0% note rate. In addition, FOA obtained a $20 million working capital line at a 10% interest rate, Engel noted.

These notes can be converted by the company or the holders into Class A shares at $19 per share at or after the first anniversary of issuance or "an early conversion price" of $18.

"This marks a natural evolution in our journey, and I want to take a moment to thank our longtime partners at Blackstone for their support over the last 10 years, their belief in our team and our vision played a meaningful role in shaping the company we are today," Fleming said.

"Looking forward, we are excited for the further support of longtime investors and bondholders through a new convertible debt facility," he added.

FOA is well-positioned for its next chapter as it addresses this "turning point in our ownership," Fleming said.

"We appreciate the strong partnership with Finance of America and their management team, which has spanned over 10 years," said Christopher James, global head of Blackstone's Tactical Opportunities group in the press release. "With this transaction, we will conclude our ownership role, but we look forward to continuing to work together in new and impactful ways in the future."

When FOA did its merger with special purpose acquisition company Replay Acquisitions to go public, then-CEO Patricia Cook mentioned Chinh Chu, a managing director at Blackstone when it invested in the mortgage lender.

Then when FOA purchased American Advisors Group, entities affiliated with Blackstone bought $15 million of Class A shares in a private placement. This equated to just under 1.1 million shares, the first quarter 10-Q filing said. FOA Chairman Brian Libman bought another $15 million of those shares at the time. 

FOA operation results in the second quarter

FOA funded $602 million of reverse mortgages during the quarter, versus $561 million in the first quarter and $447 million one year ago.

Retirement Solutions, as the segment is known, posted pretax income of $10 million. This was up from $3 million three months prior and a loss of $2 million for the second quarter of 2024. The better results quarter-to-quarter was from this higher volume as well as improved margins.

FOA's other reporting segment, Portfolio Management, recorded pretax income of $108 million, a 3% improvement from the first quarter's $105 million and 391% up from $22 million in the second quarter 2024.

The improvement was "due to positive fair value adjustments on retained interests in securitizations, resulting from changes in market inputs and model assumptions, combined with an increase in accreted yield on the company's residual interests," the FOA press release said.

On the marketing front, as of the end of the quarter, the company "fully transitioned to our new a better way with FOA campaign, concluding our long standing partnership with Tom Selleck," said Kristen Sieffert, president.

The early indicators of the switch are promising, she continued.

"TV leads signal growing appeal among younger demographics and in markets with higher home values," Sieffert said. "At the same time, our digital acquisition strategy is gaining traction, with a 10% increase in leads from digital channels."

After the quarter, in July, FOA did its first ever $1 billion plus securitization of its proprietary second lien Homesafe product, Fleming pointed out.