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Share Name | Share Symbol | Market | Type |
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Velocity Financial Inc | NYSE:VEL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.69 | 3.94% | 18.19 | 18.25 | 17.36 | 17.45 | 38,216 | 21:06:32 |
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(Commission
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(IRS Employer
Identification No.)
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(Address of Principal Executive Offices)
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(Zip Code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Exhibit
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Description
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Velocity Financial, Inc.
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Date: November 2, 2023
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By:
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/s/ Roland T. Kelly
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Roland T. Kelly
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Chief Legal Officer and General Counsel
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Exhibit 99 |
Third Quarter Highlights:
WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--November 2, 2023--Velocity Financial, Inc. (NYSE: VEL) (Velocity or the Company), a leader in business purpose loans, reported net income of $12.1 million and core net income of $12.9 million for 3Q23, compared to net income and core net income of $10.0 million for 3Q22. Earnings and core earnings per diluted share were $0.35 and $0.37, respectively, for 3Q23, compared to $0.29 and $0.29 for 3Q22.
“Velocity’s differentiated business model and portfolio management strategies delivered another strong quarter for shareholders,” said Chris Farrar, President and CEO. “Our third quarter results continued to build upon our momentum from the first half of 2023, with sequential quarter production volume increases and higher portfolio interest income resulting from continued portfolio growth. We also successfully increased the coupon on production volumes again this quarter while capitalizing on the continued tightening of credit from regulated lenders. The result was higher net interest margin growth from 2Q23 and growth in non-interest-related origination income that delivered solid net income and return on equity this quarter. We also remain focused on opportunities to expand Velocity’s franchise by growing market share in our core lending business in addition to exploring opportunities to expand into other established loan products where we can leverage our lending expertise and existing infrastructure as a competitive advantage.”
(1) |
Core income and Core EPS are non-GAAP measures that exclude nonrecurring and unusual activities from GAAP net income. | |
(2) |
Liquidity includes unrestricted cash reserves of $29.4 million and available liquidity in unfinanced loans of $30.9 million. |
Third Quarter Operating Results |
||||||
KEY PERFORMANCE INDICATORS | ||||||
($ in thousands) |
3Q 2023 |
3Q 2022 |
$ Variance |
% Variance |
||
Pretax income |
$ 17,239 |
$ 14,049 |
$ 3,190 |
23% |
||
Net income |
$ 12,086 |
$ 9,983 |
$ 2,103 |
21% |
||
Diluted earnings per share |
$ 0.35 |
$ 0.29 |
$ 0.06 |
19% |
||
Core net income(a) |
$ 12,918 |
$ 9,983 |
$ 2,935 |
29% |
||
Core diluted earnings per share(a) |
$ 0.37 |
$ 0.29 |
$ 0.08 |
27% |
||
Pretax return on equity |
16.82% |
15.26% |
n.a. |
10% |
||
Core pretax return on equity(a) |
17.89% |
15.26% |
n.a. |
17% |
||
Net interest margin - portfolio |
3.34% |
3.59% |
n.a. |
(7)% |
||
Net interest margin - total company |
2.90% |
3.09% |
n.a. |
(6)% |
||
Average common equity |
$ 409,954 |
$ 368,270 |
$ 41,685 |
11% |
(a) |
Core income, core diluted earnings per share and core pretax return on equity are non-GAAP measures. Please see the reconciliation to GAAP net income at the end of this release. |
|
|
n.a.- not applicable |
Discussion of results:
TOTAL LOAN PORTFOLIO | ||||||
($ of UPB in millions) |
3Q 2023 |
3Q 2022 |
$ Variance |
% Variance |
||
Held for Investment | ||||||
Investor 1-4 Rental |
$ 2,120 |
$ 1,777 |
$ 343 |
19% |
||
Mixed Use |
457 |
432 |
25 |
6% |
||
Multi-Family |
305 |
297 |
8 |
3% |
||
Retail |
328 |
304 |
24 |
8% |
||
Warehouse |
247 |
228 |
19 |
8% |
||
All Other |
401 |
379 |
22 |
6% |
||
Total |
$ 3,858 |
$ 3,416 |
$ 441 |
13% |
||
Held for Sale | ||||||
Multi-Family |
$ 7 |
$ 17 |
$ (10) |
(60)% |
||
Warehouse |
11 |
- |
11 |
n.m. | ||
All Other |
1 |
- |
1 |
n.m. | ||
Total Managed Loan Portfolio UPB |
$ 3,877 |
$ 3,433 |
$ 444 |
13% |
||
Key loan portfolio metrics: | ||||||
Total loan count |
9,953 |
8,476 |
||||
Weighted average loan to value |
68.0% |
68.7% |
||||
Weighted average coupon |
8.63% |
7.71% |
||||
Weighted average total portfolio yield |
8.38% |
7.88% |
||||
Weighted average portfolio debt cost |
5.63% |
4.81% |
||||
n.m. - non meaningful |
Discussion of results:
LOAN PRODUCTION VOLUMES | ||||||
($ in millions) |
3Q 2023 |
3Q 2022 |
|
$ Variance |
|
% Variance |
Investor 1-4 Rental |
$ 154 |
$ 278 |
$ (124) |
(44)% |
||
Traditional Commercial |
98 |
133 |
(36) |
(27)% |
||
Short-term loans |
39 |
46 |
(7) |
(16)% |
||
Total loan production |
$ 291 |
$ 457 |
$ (167) |
(36)% |
||
Acquisitions |
$ - |
$ 10 |
Discussion of results:
HFI PORTFOLIO CREDIT PERFORMANCE INDICATORS | ||||||
($ in thousands) |
3Q 2023 |
3Q 2022 |
$ Variance | % Variance | ||
Nonperforming loans(a) |
$ 387,725 |
$ 253,341 |
$ 134,384 |
53% |
||
Average Nonperforming Loans |
$ 351,848 |
$ 249,297 |
$ 102,551 |
41% |
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Nonperforming loans % total HFI Loans |
10% |
7% |
n.a. |
36% |
||
Total Charge Offs |
$ 95.2 |
$ 155.2 |
$ (60) |
(39)% |
||
Charge-offs as a % of Avg. Nonperforming Loans(b) |
0.11% |
0.25% |
n.a. |
(57)% |
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Loan Loss Reserve |
$ 4,684.8 |
$ 5,330 |
$ (645) |
(12)% |
(a) |
Nonperforming/Nonaccrual loans include loans 90+ days past due, loans in foreclosure, bankruptcy and on nonaccrual. |
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(b) |
Reflects the annualized quarter-to-date charge-offs to average nonperforming loans for the period. |
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n.a.- not applicable |
Discussion of results:
NET REVENUES | ||||||
($ in thousands) |
3Q 2023 |
3Q 2022 |
$ Variance |
% Variance |
||
Interest income |
$ 79,088 |
$ 63,419 |
$ 15,669 |
25% |
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Interest expense - portfolio related |
(47,583) |
(34,561) |
(13,022) |
38% |
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Net Interest Income - portfolio related |
31,505 |
28,858 |
2,647 |
9% |
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Interest expense - corporate debt |
(4,138) |
(4,011) |
(127) |
3% |
||
Net Interest Income |
$ 27,367 |
$ 24,847 |
$ 2,520 |
10% |
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Loan loss provision |
(154) |
(580) |
427 |
(74)% |
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Gain on disposition of loans |
3,606 |
399 |
3,207 |
803% |
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Unrealized (loss) gain on fair value loans |
(1,284) |
453 |
(1,737) |
(383)% |
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Unrealized gain (loss) on fair value of securitized debt |
9,692 |
- |
9,692 |
n.m. | ||
Origination income |
3,323 |
518 |
2,805 |
541% |
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Bank interest income |
1,342 |
- |
1,342 |
n.m. | ||
Other operating income (expense) |
681 |
1,656 |
(976) |
(59)% |
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Total Other operating income (expense) |
$ 17,360 |
$ 3,027 |
$ 14,333 |
473% |
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Net Revenue |
$ 44,573 |
$ 27,294 |
$ 17,279 |
63% |
||
n.m. - non meaningful |
Discussion of results:
OPERATING EXPENSES | ||||||
($ in thousands) |
3Q 2023 |
3Q 2022 |
$ Variance |
% Variance |
||
Compensation and employee benefits |
$ 12,523 |
$ 6,788 |
$ 5,735 |
84% |
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Origination (income)/expense |
273 |
209 |
64 |
31% |
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Securitization expenses |
4,930 |
- |
4,930 |
n.m. | ||
Rent and occupancy |
472 |
445 |
27 |
6% |
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Loan servicing |
4,901 |
3,314 |
1,587 |
48% |
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Professional fees |
854 |
664 |
190 |
29% |
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Real estate owned, net |
1,239 |
(195) |
1,434 |
n.m. | ||
Other expenses |
2,142 |
2,020 |
122 |
6% |
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Total operating expenses |
$ 27,334 |
$ 13,245 |
$ 14,089 |
106% |
||
n.m. - non meaningful |
Discussion of results:
SECURITIZATIONS | |||||||
($ in thousands) | Securities | Balance at | Balance at | ||||
Trusts | Issued | 9/30/2023 | W.A. Rate | 9/30/2022 | W.A. Rate | ||
2016-1 Trust |
319,809 |
$ - |
0.00% |
$ 24,356 |
8.10% |
||
2017-2 Trust |
245,601 |
48,206 |
3.95% |
61,224 |
3.75% |
||
2018-1 Trust |
176,816 |
35,010 |
3.99% |
46,795 |
3.99% |
||
2018-2 Trust |
307,988 |
80,409 |
4.43% |
99,151 |
4.49% |
||
2019-1 Trust |
235,580 |
79,215 |
4.06% |
97,620 |
4.12% |
||
2019-2 Trust |
207,020 |
69,216 |
3.40% |
90,165 |
3.39% |
||
2019-3 Trust |
154,419 |
60,482 |
3.29% |
75,366 |
3.22% |
||
2020-1 Trust |
248,700 |
110,958 |
2.89% |
141,423 |
2.87% |
||
2020-2 Trust |
96,352 |
49,528 |
4.59% |
63,060 |
4.62% |
||
2021-1 Trust |
251,301 |
176,529 |
1.76% |
206,026 |
1.74% |
||
2021-2 Trust |
194,918 |
149,431 |
2.02% |
177,993 |
2.02% |
||
2021-3 Trust |
204,205 |
161,467 |
2.47% |
190,073 |
2.45% |
||
2021-4 Trust |
319,116 |
250,941 |
3.24% |
282,567 |
3.18% |
||
2022-1 Trust |
273,594 |
240,733 |
3.94% |
260,454 |
3.93% |
||
2022-2 Trust |
241,388 |
221,631 |
5.08% |
236,918 |
5.09% |
||
2022-MC1 Trust |
84,967 |
35,677 |
6.90% |
60,872 |
6.88% |
||
2022-3 Trust |
296,323 |
262,308 |
5.71% |
285,847 |
5.64% |
||
2022-4 Trust |
308,357 |
283,270 |
6.23% |
306,365 |
6.24% |
||
2022-5 Trust |
188,754 |
171,183 |
7.05% |
||||
2023-1 Trust |
198,715 |
181,006 |
7.01% |
||||
2023-1R Trust |
64,833 |
60,515 |
7.69% |
||||
2023-2 Trust |
202,210 |
194,955 |
7.19% |
||||
2023-RTL1 Trust |
81,608 |
81,608 |
8.23% |
||||
2023-3 Trust |
234,741 |
232,802 |
7.80% |
||||
$ 5,137,315 |
$ 3,237,080 |
5.01% |
$ 2,706,275 |
4.05% |
|||
Discussion of results
The company completed two securitizations during 3Q23 totaling $316.3 million of securities issued.
RESOLUTION ACTIVITIES | ||||||
LONG-TERM LOANS | ||||||
RESOLUTION ACTIVITY | THIRD QUARTER 2023 | THIRD QUARTER 2022 | ||||
($ in thousands) | UPB $ | Gain / (Loss) $ | UPB $ | Gain / (Loss) $ | ||
Paid in full |
$ 20,668 |
$ 758 |
$ 16,175 |
$ 967 |
||
Paid current |
26,950 |
206 |
11,410 |
182 |
||
REO sold |
6,341 |
162 |
3,171 |
250 |
||
Total resolutions |
$ 53,959 |
$ 1,126 |
$ 30,756 |
$ 1,399 |
||
Resolutions as a % of nonperforming UPB |
102.1% |
104.5% |
||||
SHORT-TERM AND FORBEARANCE LOANS | ||||||
RESOLUTION ACTIVITY | THIRD QUARTER 2023 | THIRD QUARTER 2022 | ||||
($ in thousands) | UPB $ | Gain / (Loss) $ | UPB $ | Gain / (Loss) $ | ||
Paid in full |
$ 2,967 |
$ 38 |
$ 8,691 |
$ 396 |
||
Paid current |
6,292 |
- |
2,075 |
- |
||
REO sold |
2,434 |
(11) |
3,672 |
865 |
||
Total resolutions |
$ 11,693 |
$ 27 |
$ 14,438 |
$ 1,261 |
||
Resolutions as a % of nonperforming UPB |
100.2% |
108.7% |
||||
Grand total resolutions |
$ 65,652 |
$ 1,153 |
$ 45,194 |
$ 2,660 |
||
Grand total resolutions as a % of nonperforming UPB |
101.8% |
105.9% |
Discussion of results:
Velocity’s executive management team will host a conference call and webcast to review 3Q23 financial results on November 2nd, 2023, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time.
Webcast Information
The conference call will be webcast live in listen-only mode and can be accessed through the Events and Presentations section of the Velocity Financial Investor Relations website https://www.velfinance.com/events-and-presentations. To listen to the webcast, please visit Velocity’s website at least 15 minutes before the call to register, download, and install any needed software. An audio replay of the call will also be available on Velocity’s website following the completion of the conference call.
Conference Call Information
To participate by phone, please dial-in 15 minutes before the start time to allow for wait times to access the conference call. The live conference call will be accessible by dialing
F1-833-316-0544 in the U.S. and Canada and 1-412-317-5725 for international callers. Callers should ask to join the Velocity Financial, Inc. conference call.
A replay of the call will be available through midnight on November 30, 2023, and can be accessed by dialing 1-877-344-7529 in the U.S. and 855-669-9658 in Canada or 1-412-317-0088 internationally. The passcode for the replay is #3150552. The replay will also be available on the Investor Relations section of the Company's website under "Events and Presentations.”
About Velocity Financial, Inc.
Based in Westlake Village, California, Velocity is a vertically integrated real estate finance company that primarily originates and manages business purpose loans secured by 1-4-unit residential rental and small commercial properties. Velocity originates loans nationwide across an extensive network of independent mortgage brokers built and refined over 19 years.
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with United States generally accepted accounting principles (GAAP), the Company uses non-GAAP core net income and core diluted EPS, which are non-GAAP financial measures.
Non-GAAP core net income and non-GAAP core diluted EPS are non-GAAP financial measures that represent our net income (loss) and net income (loss) per diluted share, adjusted to eliminate the effect of certain costs incurred from activities that are not normal recurring operating expenses, such as COVID-stressed charges and recoveries of loan loss provision, nonrecurring debt amortization, the impact of operational measures taken to address the COVID-19 pandemic and workforce reduction costs, and costs associated with acquisitions. To calculate non-GAAP core diluted EPS, we use the weighted-average number of shares of common stock outstanding that is used to calculate net income per diluted share under GAAP.
We have included non-GAAP core net income and non-GAAP core diluted EPS because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that non-GAAP core net income and non-GAAP core diluted EPS provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain items that we expect to be nonrecurring.
These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.
For more information on Core Income, please refer to the section of this press release below titled “Adjusted Financial Metric Reconciliation to GAAP Net Income” at the end of this press release.
Forward-Looking Statements
Some of the statements contained in this press release may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to anticipated results, expectations, projections, plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “goal,” ”position,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans, or intentions.
The forward-looking statements contained in this press release reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions, and changes in circumstances that may cause actual results to differ significantly from those expressed or contemplated in any forward-looking statement. While forward-looking statements reflect our good faith projections, assumptions, and expectations, they are not guarantees of future results. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events, or other changes, except as required by applicable law. Factors that could cause our results to differ materially include, but are not limited to, (1) the continued course and severity of the COVID-19 pandemic and its direct and indirect impacts, (2) general economic and real estate market conditions, including the risk of recession (3) regulatory and/or legislative changes, (4) our customers' continued interest in loans and doing business with us, (5) market conditions and investor interest in our future securitizations, and (6) the continued conflict in Ukraine and (7) changes in federal government fiscal and monetary policies.
Additional information relating to these and other factors that could cause future results to differ materially from those expressed or contemplated in any forward-looking statements can be found in the section titled ‘‘Risk Factors” in our Form 10-Q filed with the SEC on May 14, 2020, as well as other cautionary statements we make in our current and periodic filings with the SEC. Such filings are available publicly on our Investor Relations web page at www.velfinance.com.
Velocity Financial, LLC |
|||||||||
Consolidated Statements of Financial Condition |
|||||||||
Quarter Ended | |||||||||
9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | |||||
Unaudited | Unaudited | Unaudited | Audited | Unaudited | |||||
(In thousands) | |||||||||
Assets | |||||||||
Cash and cash equivalents |
$ 29,393 |
$ 33,987 |
$ 39,397 |
$ 45,248 |
$ 26,372 |
||||
Restricted cash |
17,703 |
16,786 |
16,636 |
16,808 |
14,533 |
||||
Loans held for sale, at fair value |
19,536 |
- |
18,081 |
- |
16,569 |
||||
Loans held for investment, at fair value |
951,990 |
705,330 |
450,732 |
276,095 |
926 |
||||
Loans held for investment |
2,945,840 |
3,057,940 |
3,169,280 |
3,272,390 |
3,445,563 |
||||
Total loans, net |
3,917,366 |
3,763,270 |
3,638,093 |
3,548,485 |
3,463,058 |
||||
Accrued interest receivables |
24,756 |
22,602 |
20,931 |
20,463 |
18,333 |
||||
Receivables due from servicers |
70,139 |
63,896 |
64,133 |
65,644 |
66,992 |
||||
Other receivables |
236 |
1,306 |
2,188 |
1,075 |
1,962 |
||||
Real estate owned, net |
29,299 |
20,388 |
21,778 |
13,325 |
13,188 |
||||
Property and equipment, net |
2,861 |
3,023 |
3,209 |
3,356 |
3,495 |
||||
Deferred tax asset |
705 |
1,878 |
2,543 |
5,033 |
4,337 |
||||
Mortgage Servicing Rights, at fair value |
9,786 |
9,445 |
9,143 |
9,238 |
9,868 |
||||
Derivative assets |
1,261 |
- |
- |
- |
- |
||||
Goodwill |
6,775 |
6,775 |
6,775 |
6,775 |
6,775 |
||||
Other assets |
7,028 |
7,789 |
12,268 |
13,525 |
18,453 |
||||
Total Assets |
$ 4,117,308 |
$ 3,951,145 |
$ 3,837,094 |
$ 3,748,975 |
$ 3,647,366 |
||||
Liabilities and members' equity | |||||||||
Accounts payable and accrued expenses |
$ 97,869 |
$ 95,344 |
$ 84,976 |
$ 91,525 |
$ 75,150 |
||||
Secured financing, net |
210,774 |
210,464 |
210,155 |
209,846 |
209,537 |
||||
Securitized debt, net |
2,504,334 |
2,622,547 |
2,657,469 |
2,736,290 |
2,651,895 |
||||
Securitized debt, at fair value |
669,139 |
381,799 |
194,941 |
- |
- |
||||
Warehouse & repurchase facilities |
215,176 |
235,749 |
298,313 |
330,814 |
340,050 |
||||
Total Liabilities |
3,697,292 |
3,545,903 |
3,445,854 |
3,368,475 |
3,276,632 |
||||
Stockholders' Equity | |||||||||
Stockholders' equity |
416,398 |
401,707 |
387,624 |
376,811 |
366,810 |
||||
Noncontrolling interest in subsidiary |
3,618 |
3,535 |
3,616 |
3,689 |
3,924 |
||||
Total equity |
420,016 |
405,242 |
391,240 |
380,500 |
370,734 |
||||
Total Liabilities and members' equity |
$ 4,117,308 |
$ 3,951,145 |
$ 3,837,094 |
$ 3,748,975 |
$ 3,647,366 |
||||
Book value per share |
$ 13.00 |
$ 12.57 |
$ 12.18 |
$ 11.89 |
$ 11.61 |
||||
Shares outstanding |
32,314(1) |
32,239(2) |
32,112(3) |
31,996(4) |
31,922(5) |
(1) |
Based on 32,313,744 common shares outstanding as of September 30, 2023, and excludes unvested shares of common stock authorized for incentive compensation totaling 589,634. | |
(2) |
Based on 32,238,715 common shares outstanding as of June 30, 2023, and excludes unvested shares of common stock authorized for incentive compensation totaling 502,913. | |
(3) |
Based on 32,111,906 common shares outstanding as of March 31, 2023, and excludes unvested shares of common stock authorized for incentive compensation totaling 490,526. | |
(4) |
Based on 31,955,730 common shares outstanding as of December 31, 2022, and excludes unvested shares of common stock authorized for incentive compensation totaling 494,139. | |
(5) |
Based on 31,921,721 common shares outstanding as of September 30, 2022, and excludes unvested shares of common stock authorized for incentive compensation totaling 494,139. |
Velocity Financial, LLC |
||||||||||
Consolidated Statements of Income (Quarters) |
||||||||||
Quarter Ended | ||||||||||
($ in thousands) | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | |||||
Unaudited | Unaudited | Unaudited | Audited | Unaudited | ||||||
Revenues | ||||||||||
Interest income |
$ 79,088 |
$ 74,897 |
$ 70,521 |
$ 65,632 |
$ 63,419 |
|||||
Interest expense - portfolio related |
47,583 |
45,451 |
42,029 |
40,854 |
34,561 |
|||||
Net interest income - portfolio related |
31,505 |
29,446 |
28,492 |
24,778 |
28,858 |
|||||
Interest expense - corporate debt |
4,138 |
4,139 |
4,139 |
4,139 |
4,011 |
|||||
Net interest income |
27,367 |
25,307 |
24,353 |
20,639 |
24,847 |
|||||
Provision for loan losses |
154 |
298 |
636 |
(437) |
580 |
|||||
Net interest income after provision for loan losses |
27,213 |
25,009 |
23,717 |
21,076 |
24,267 |
|||||
Other operating income | ||||||||||
Gain on disposition of loans |
3,606 |
1,237 |
1,913 |
391 |
399 |
|||||
Unrealized gain on fair value loans |
(1,284) |
2,413 |
7,354 |
7,795 |
453 |
|||||
Unrealized gain (loss) on fair value securitizations |
9,692 |
5,560 |
(170) |
- |
- |
|||||
Origination income |
3,323 |
2,735 |
2,411 |
3,521 |
518 |
|||||
Bank interest income |
1,342 |
1,188 |
948 |
- |
0 |
|||||
Other income (expense) |
681 |
903 |
386 |
(288) |
1,656 |
|||||
Total other operating income |
17,360 |
14,036 |
12,842 |
11,419 |
3,027 |
|||||
Net revenue |
44,573 |
39,046 |
36,560 |
32,495 |
27,294 |
|||||
Operating expenses | ||||||||||
Compensation and employee benefits |
12,523 |
10,670 |
10,008 |
11,793 |
6,788 |
|||||
Origination expenses |
273 |
123 |
(50) |
1,328 |
209 |
|||||
Securitizations expenses |
4,930 |
2,699 |
2,584 |
- |
- |
|||||
Rent and occupancy |
472 |
458 |
446 |
435 |
445 |
|||||
Loan servicing |
4,901 |
4,267 |
3,828 |
3,244 |
3,314 |
|||||
Professional fees |
854 |
1,056 |
955 |
1,091 |
664 |
|||||
Real estate owned, net |
1,239 |
1,018 |
1,829 |
552 |
(195) |
|||||
Other operating expenses |
2,142 |
1,931 |
2,202 |
2,360 |
2,020 |
|||||
Total operating expenses |
27,334 |
22,222 |
21,802 |
20,804 |
13,245 |
|||||
Income before income taxes |
17,239 |
16,824 |
14,757 |
11,692 |
14,049 |
|||||
Income tax expense |
5,070 |
4,602 |
4,021 |
3,465 |
3,759 |
|||||
Net income |
12,169 |
12,222 |
10,736 |
8,227 |
10,290 |
|||||
Net income attributable to noncontrolling interest |
83 |
39 |
87 |
(235) |
307 |
|||||
Net income attributable to Velocity Financial, Inc. |
12,086 |
12,183 |
10,649 |
8,462 |
9,983 |
|||||
Less undistributed earnings attributable to participating securities |
183 |
185 |
160 |
127 |
152 |
|||||
Net earnings attributable to common shareholders |
$ 11,903 |
$ 11,998 |
$ 10,489 |
$ 8,335 |
$ 9,831 |
|||||
Basic earnings (loss) per share |
$ 0.37 |
$ 0.37 |
$ 0.33 |
$ 0.26 |
$ 0.31 |
|||||
Diluted earnings (loss) per common share |
$ 0.35 |
$ 0.36 |
$ 0.31 |
$ 0.25 |
$ 0.29 |
|||||
Basic weighted average common shares outstanding |
32,275 |
32,122 |
32,098 |
31,923 |
31,922 |
|||||
Diluted weighted average common shares outstanding |
34,731 |
34,140 |
34,052 |
34,063 |
34,199 |
Velocity Financial, Inc. | |||||||||||||||||
Net Interest Margin — Portfolio Related and Total Company |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
Quarter Ended September 30, 2023 | Quarter Ended June 30, 2023 | Quarter Ended September 30, 2022 | |||||||||||||||
Interest | Average | Interest | Average | Interest | Average | ||||||||||||
Average | Income / | Yield / | Average | Income / | Yield / | Average | Income / | Yield / | |||||||||
($ in thousands) | Balance | Expense | Rate(1) | Balance | Expense | Rate(1) | Balance | Expense | Rate(1) | ||||||||
Loan portfolio: | |||||||||||||||||
Loans held for sale |
$ 3,170 |
$ 3,477 |
$ 176 |
||||||||||||||
Loans held for investment |
3,770,460 |
3,634,093 |
3,217,264 |
||||||||||||||
Total loans |
$ 3,773,631 |
$ 79,088 |
8.38% |
$ 3,637,570 |
$ 74,897 |
8.24% |
$ 3,217,440 |
$ 63,419 |
7.88% |
||||||||
Debt: | |||||||||||||||||
Warehouse and repurchase facilities |
$ 192,855 |
4,943 |
10.25% |
$ 238,027 |
5,910 |
9.93% |
$ 226,660 |
3,798 |
6.70% |
||||||||
Securitizations |
3,186,756 |
42,640 |
5.35% |
3,020,624 |
39,541 |
5.24% |
2,644,489 |
30,763 |
4.65% |
||||||||
Total debt - portfolio related |
3,379,610 |
47,583 |
5.63% |
3,258,651 |
45,451 |
5.58% |
2,871,149 |
34,561 |
4.81% |
||||||||
Corporate debt |
215,000 |
4,138 |
7.70% |
215,000 |
4,139 |
7.70% |
215,000 |
4,011 |
7.46% |
||||||||
Total debt |
$ 3,594,610 |
$ 51,721 |
5.76% |
$ 3,473,651 |
$ 49,590 |
5.71% |
$ 3,086,149 |
$ 38,572 |
5.00% |
||||||||
Net interest spread - portfolio related (2) |
2.75% |
2.66% |
3.07% |
||||||||||||||
Net interest margin - portfolio related |
3.34% |
3.24% |
3.59% |
||||||||||||||
Net interest spread - total company (3) |
2.63% |
2.53% |
2.88% |
||||||||||||||
Net interest margin - total company |
2.90% |
2.78% |
3.09% |
(1) |
Annualized. |
|
(2) |
Net interest spread — portfolio related is the difference between the rate earned on our loan portfolio and the interest rates paid on our portfolio-related debt." |
|
(3) |
Net interest spread — total company is the difference between the rate earned on our loan portfolio and the interest rates paid on our total debt." |
Velocity Financial, Inc.
Adjusted Financial Metric Reconciliation to GAAP Net Income (Unaudited) |
|||||||||
Quarters: |
|||||||||
Core Net Income | |||||||||
Quarter Ended | |||||||||
($ in thousands) | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | ||||
Net Income |
$ 12,086 |
$ 12,183 |
$ 10,649 |
$ 8,462 |
$ 9,983 |
||||
Equity award & ESPP costs |
832 |
745 |
728 |
656 |
- |
||||
Core Net Income |
$ 12,918 |
$ 12,928 |
$ 11,376 |
$ 9,118 |
$ 9,983 |
||||
Diluted weighted average common shares outstanding |
34,731 |
34,140 |
34,052 |
34,063 |
34,199 |
||||
Core diluted earnings per share |
$ 0.37 |
$ 0.38 |
$ 0.33 |
$ 0.27 |
$ 0.29 |
Investors and Media:
Chris Oltmann
(818) 532-3708
Document and Entity Information |
Nov. 02, 2023 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | Nov. 02, 2023 |
Entity Registrant Name | Velocity Financial, Inc. |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 001-39183 |
Entity Tax Identification Number | 46-0659719 |
Entity Address, Address Line One | 30699 Russell Ranch Road |
Entity Address, Address Line Two | Suite 295 |
Entity Address, City or Town | Westlake Village |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 91362 |
City Area Code | 818 |
Local Phone Number | 532-3700 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0001692376 |
Title of 12(b) Security | Common stock, par value $0.01 per share |
Trading Symbol | VEL |
Security Exchange Name | NYSE |
1 Year Velocity Financial Chart |
1 Month Velocity Financial Chart |
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