FINANCE OF AMERICA REPORTS FOURTH QUARTER AND FULL YEAR 2020 RESULTS

[Pages:12]FINANCE OF AMERICA REPORTS FOURTH QUARTER AND FULL YEAR 2020 RESULTS

? Full Year Pre-Tax Income and Adjusted EBITDA Exceed Previously Increased Guidance ? ? Funded Volume Grew 7% From Prior Quarter and 70% in 2020 ?

? Investor Call Scheduled For Tuesday, March 2, 2021 At 5:00 pm Eastern Time ?

Irving, TX (March 2, 2021): Finance of America Companies, ("Finance of America") which intends to merge in a business combination with Replay Acquisition Corp. (NYSE: RPLA) ("Replay Acquisition") that will result in Finance of America becoming a publicly-listed company, reported fourth quarter and full year results for the period ended December 31, 2020. Finance of America is a diversified, vertically integrated consumer lending platform operating in three lending segments: Mortgage Originations, Reverse Originations, Commercial Originations, and two non-lending segments: Lender Services and Portfolio Management.

Fourth Quarter 2020 Highlights Total funded volume grew 7% to $9.77 billion, compared to $9.17 billion in the prior quarter Total net rate lock volume came in at $7.86 billion, compared to $9.29 billion in the prior quarter Total revenues were $539 million, compared to $605 million in the prior quarter Pre-tax net income totaled $153 million, compared to $242 million in the prior quarter Adjusted EBITDA* totaled $174 million, compared to $235 million in the prior quarter

Full Year 2020 Highlights Total funded volume increased 70% to $32.63 billion, compared to $19.16 billion in 2019 Total net rate lock volume grew 83% to $30.16 billion, compared to $16.52 billion in 2019 Total revenues rose 101% to $1.80 billion, compared to $894 million in 2019 Pre-tax net income grew 541% to $500 million, compared to $78 million in 2019 Adjusted EBITDA* increased 381% to $597 million, compared to $124 million in 2019 Adjusted EBITDA of $597 million exceeded high-end of previously increased guidance of $565 million

*See reconciliation of Adjusted EBITDA to Net income before taxes.

"Finance of America delivered on all fronts as strong fourth quarter results drove record full-year performance beating the high-end of our upwardly revised guidance," stated Patricia Cook, CEO of Finance of America. "Our central tenet is to engage in businesses that complement one another, with a broadly diversified platform to generate sustainable growth across economic cycles and capitalize on tailwinds as they present themselves. Persistent low interest rates facilitated record mortgage originations volumes and margins, while other segments continued to gain traction and perform well. Our Portfolio Management business invested in its first MSRs fund last quarter, and we continue to launch new products and extend Reverse and Commercial Originations footprints. Finally, as we near the milestone of becoming a public company, our team remains energized to continue to deliver market leading results while driving shareholder value."

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Fourth Quarter Financial Summary

($ amounts in millions)

Funded volume Net rate lock volume(1) Total revenue

Q4'20

9,769 7,855 539

Q3'20

9,170 9,286 605

Variance (%)

Q4'20 vs Q3'20

7%

Q4'19 6,029

-15% 3,972

-11%

250

Variance (%)

Q4'20 vs Q4'19 62%

98%

116%

FY 2020

32,626 30,157 1,797

FY 2019

19,159 16,524

894

Variance (%)

2020 vs 2019 70%

83%

101%

Total expenses

386

362

7%

235

64%

1,297

816

59%

Pre-tax net income

153

242

-37%

15

920%

500

78

541%

Net income

153

242

-37%

15

920%

498

77

547%

Adjusted EBITDA(3)

174

235

-26%

23

657%

597

124

381%

Mortgage originations margin(2)

4.31%

4.39%

-2% 3.08%

40%

3.88%

2.80%

39%

(1) Net rate lock volume relates only to the Mortgage Originations segment

(2) Calculated for each period as Gain on sale of mortgage loans, net and other income related to the origination

of mortgage loans held for sale, net divided by Net rate lock volume.

(3) See reconciliation of Adjusted EBITDA to Net income before taxes

Discussion of Fourth Quarter 2020 Results:

Pre-tax net income totaled $153 million for the quarter and $500 million for the year 2020, compared to $15 million and $78 million in the prior year periods, respectively.

Generated record origination volume of $9,769 million (funded volume) and $7,855 million (net lock volume), as well as continuing strong gain-on-sale margins.

Successfully resumed Commercial Originations in June 2020 with strong market response and growth driving profitability in the fourth quarter.

Completed two asset securitizations in Portfolio Management segment for $555 million during the fourth quarter and ten asset securitizations for $3,270 million during 2020, including non-agency reverse mortgage, rehab/construction commercial loans and HECM buyout loans.

Balance Sheet Highlights ($ amounts in millions)

Cash and cash equivalents Total assets Total liabilities CRNCI Members' equity

December 31, 2020

233 19,565 18,771

166 628

December 31, 2019

118 16,584 15,913

188 483

Variance (%) 2020 vs 2019

97% 18% 18% -12% 30%

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 Cash and cash equivalents excluding restricted cash grew 97% to $233 million.

Total assets and liabilities grew $2,981 million and $2,858 million, respectively, during 2020 primarily as a result of the growth in our mortgage loans held for sale and related interest-rate lock pipeline of $1,048 million and securitized mortgage loans held for investment of $2,334 million. Increases in these assets were partially offset by a reduction in unsecuritized loans held for investment of $683 million.

Retained or purchased mortgage servicing rights (MSRs) grew by $178 million during 2020.

Completed issuance of $350 million in senior unsecured notes due in 2025.

Equity, including CRNCI (Contingently Redeemable Noncontrolling Interest), increased $123 million in 2020 primarily as a result of $498 million of net income partially offset by member distributions.

Segment Results

Mortgage Originations The Mortgage Originations segment generates revenue through fee income from loan originations and gain on sale of mortgage loans into the secondary market.

($ amounts in millions)

Q4'20

Funded volume

8,808

Net rate lock volume 7,855

Total revenue

Mortgage originations margin

Pre-tax net income

367 4.31% 129

Q3'20

8,454 9,286 444 4.39% 204

Variance (%)

Q4'20 vs Q3'20 4%

-15%

-17%

-2%

-37%

Q4'19

4,440 3,972 143 3.08%

2

Variance (%) Q4'20 vs Q4'19

98% 98% 157%

40%

6,350%

FY 2020

29,064 30,157 1,292 3.88%

460

FY 2019

15,437 16,524

527 2.80%

20

Variance (%) 2020 vs 2019

88% 83% 145% 39% 2,200%

Produced record originations of $8,808 million (funded volume) and $7,855 million (net rate lock volume) and pre-tax net income of $129 million during the fourth quarter. Pre-tax earnings were up meaningfully compared to the prior year quarter, while the sequential decline was largely a function of lower net rate lock volume.

Full year 2020 funded volume grew 88% and net rate lock volume increased 83% compared to the prior year.

Pre-tax net income of $460 million for the year was up considerably compared to $20 million in 2019.

Growth in segment profitability has been a function of the overall robust mortgage market as well as increased gain on sale margins and Company productivity.

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Reverse Originations The Reverse Originations segment generates revenue and earnings in the form of net origination gains and origination fees earned on the origination of reverse mortgage loans.

($ amounts in millions)

Funded volume Total revenue Pre-tax net income

Q4'20

655 55 33

Q3'20

626 49 24

Variance (%)

Q4'20 vs Q3'20 5%

12%

38%

Q4'19

686 37 13

Variance (%)

Q4'20 vs Q4'19 -5%

49%

154%

FY 2020

2,707 194 107

FY 2019

2,487 145 65

Variance (%)

2020 vs 2019 9%

34%

65%

Reverse Originations generated pre-tax net income of $33 million during the fourth quarter compared to $24 million in the prior quarter and $13 million in the prior-year period.

With funded volume increasing 9% in 2020, pre-tax net income was up 65% compared to full year 2019 levels due to improved margins in the segment.

Commercial Originations The Commercial Originations segment provides business purpose lending solutions for residential real estate investors. The Commercial Originations segment generates revenue and earnings in the form of net origination gains and origination fees earned on the origination of mortgage loans.

($ amounts in millions)

Funded volume

Total revenue Pre-tax net income (loss)

Q4'20

307 13 1

Q3'20

90 5 (2)

Variance (%)

Q4'20 vs Q3'20 241%

160%

100%

Q4'19

400 21

Variance (%)

Q4'20 vs Q4'19

-23%

-38%

5

-80%

FY 2020

855 37 (4)

FY 2019

1,235 67 15

Variance (%)

2020 vs 2019 -31%

-45%

-127%

Commercial Originations temporarily suspended loan originations in March 2020 as a result of market uncertainty during the initial stages of the COVID-19 pandemic. Loan originations resumed in June and grew steadily through the remainder of the year.

Funded volume increased 241% sequentially in the fourth quarter, while pre-tax net income of $1 million marked the return of the Commercial Originations segment to profitability.

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Portfolio Management The Portfolio Management segment generates revenue and earnings in the form of gain on sale of loans, fair value gains, interest income, servicing income, fees for underwriting, advisory and valuation services and other ancillary fees.

($ amounts in millions)

Assets under management Total revenue Pre-tax net income (loss)

Q4'20

16,896 38 8

Q3'20

16,639 42 19

Variance (%)

Q4'20 vs Q3'20 2%

-10%

-58%

Q4'19 15,056

Variance (%)

Q4'20 vs Q4'19

12%

25

52%

5

60%

FY 2020

16,896 69 (22)

FY 2019

15,056 73 9

Variance (%)

2020 vs 2019 12%

-5%

-344%

Assets under management grew $257 million compared to the prior quarter as a result of growth in retained reverse mortgage loans and MSR.

Completed the formation of the Company's first managed MSR fund.

Year-to-date revenue and pre-tax net income decreased from the prior year due to fair value adjustments on loans and securities held for investment.

Lender Services The Lender Services business generates revenue and earnings in the form of fees. Lender Services supports over 1,000 third party clients across the lending industry.

($ amounts in millions)

Total revenue Pre-tax net income

Q4'20

66 4

Q3'20

53 8

Variance (%)

Q4'20 vs Q3'20 25%

-50%

Q4'19

31 1

Variance (%)

Q4'20 vs Q4'19 113%

300%

FY 2020

205 20

FY 2019

110 5

Variance (%)

2020 vs 2019 86%

300%

The Lender Services segment earned $4 million during the fourth quarter primarily as a result of strong title agency and underwriting revenue along with increased activity in our MSR brokerage and advisory business.

Full year pre-tax net income increased 300% over 2019 making 2020 our strongest year in history for Lender Services. Our strategic additions of new business lines combined with the onboarding of new third party customers across our businesses facilitated record top-line growth.

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Reconciliation to GAAP:

($ amounts in millions)

Net income before taxes Adjustments for:

Change in fair value of loans and securities HFI Interest expense on non-funding debt Depreciation, amortization, and other impairments Other fair value adjustments on earnouts Shared based compensation Change in fair value of minority investments Certain non-recurring costs Adjusted EBITDA

Q4'20 153

(4) 5 4 3 6 7 174

Q3'20 242

(17) 2 8

235

Q4'19 15

2 1 3 (3) 5 23

FY 2020 500

50 8 11 3 6 19 597

FY 2019 78

20 3 9 (2) 3 (2) 15 124

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Finance of America Equity Capital LLC and Subsidiaries Consolidated Statements of Financial Position (Amounts in $000s)

ASSETS Cash and cash equivalents Restricted cash Reverse mortgage loans held for investment, subject to HMBS obligations, at fair value Mortgage loans held for investment, subject to nonrecourse debt, at fair value Mortgage loans held for investment, at fair value Mortgage loans held for sale, at fair value Debt securities, at fair value Mortgage servicing rights, at fair value

Derivative assets, at fair value Fixed assets and leasehold improvements, net Goodwill Intangible assets, net Due from related parties Other assets, net

Total Assets

12/31/2020 (unaudited)

$ 233,101 306,262

9,929,163

5,396,167

730,821 2,222,811

10,773 180,684

92,065 24,512 121,233 16,931

2,559 298,073 $19,565,155

LIABILITIES HMBS related obligations, at fair value Nonrecourse debt, at fair value Other secured lines of credit Payables and accrued liabilities Notes payable Total Liabilities

$ 9,788,668 5,257,754 2,973,743 414,146 336,573

18,770,884

CRNCI Members' equity Total Liabilities, CRNCI and Members' Equity

166,231 628,040

$ 19,565,155

12/31/2019

$ 118,083 264,581

9,480,504

3,511,212 1,414,073 1,251,574

114,701 2,600

15,553 26,686 121,137 18,743

2,814 241,840 $ 16,584,101

9,320,209 3,490,196 2,749,413

326,176 27,313

15,913,307

187,981 482,813 $ 16,584,101

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Finance of America Equity Capital LLC and Subsidiaries Consolidated Statements of Operations (Amounts in $000s)

REVENUES Gain on sale of mortgage loans, net and other income related to the origination of mortgage loans held for sale, net Net fair value gains on mortgage loans and related obligations Fee income Net interest expense: Interest income Interest expense Net interest expense Total Revenues

EXPENSES Salaries, benefits and related expenses Occupancy, equipment rentals and other office related expenses General and administrative expenses Total Expenses

Three Months 12/31/2020 (unaudited)

Three Months 09/30/2020 (unaudited)

$ 342,094

90,060 123,264

12,969 (29,836) (16,867) 538,551

253,231

6,826 125,301 385,358

$ 407,926

95,955 116,905

9,937 (25,935) (15,998) 604,788

240,381

8,184 113,804 362,369

Net income before taxes

153,193

242,419

Provision for income taxes Net income

770 152,423

808 241,611

CRNCI Noncontrolling interest

Net income attributable to FOA Equity Capital LLC

1,210 198

$ 151,015

(4,953) 276

$ 246,288

Twelve Months 12/31/2020 (unaudited)

Twelve Months 12/31/2019 (unaudited)

$ 1,178,995

311,698 386,752

42,584 (123,001)

(80,417) 1,797,028

868,265

29,621 398,885 1,296,771

500,257

2,344 497,913

(21,749) 1,274

$ 518,388

$ 464,308

329,526 201,628

37,323 (138,731) (101,408)

894,054

529,250

32,811 254,414 816,475

77,579

949 76,630

21,707 511

$ 54,412

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