Velocity Financial, Inc. (NYSE: VEL) (Velocity or the Company) reported net income and core income of $8.02 million for 3Q21, compared to net income of $9.45 million and core income of $8.45 million in 2Q21. Earnings and core earnings per diluted share were $0.23 in 3Q21, compared to $0.28 and $0.25, respectively, in 2Q21. Book value per common share was $12.05 as of September 30, 2021, compared to $11.62 as of June 30, 2021.
“Third quarter results reflect outstanding execution by our loan origination team which delivered 33% quarter-over-quarter production growth, in addition to strong earnings and improved credit performance from our held for investment portfolio,” said Chris Farrar, President and CEO. “Demand for small balance business purposed loans accelerated in the third quarter with solid growth in rental demand driven by consumer preference for single family homes. Our strong originations trends continued in October as we originated $138.5 million of new loans, an all-time record for Velocity.”
“We are focused on driving continued organic growth in our core business, while at the same time seeking attractive opportunities that will allow us to reach new markets as we continue to execute on our vision of becoming the lender of choice in small-balance commercial lending.”
Third Quarter Operating Results |
|||||||||||||
KEY PERFORMANCE INDICATORS | |||||||||||||
($ in thousands) |
|
3Q 2021 |
|
|
2Q 2021 |
|
$ Variance |
% Variance |
|||||
Pretax income | $ |
10,927 |
|
$ |
12,885 |
|
$ |
(1,958 |
) |
(15 |
)% |
||
Net income | $ |
8,022 |
|
$ |
9,453 |
|
$ |
(1,431 |
) |
(15 |
)% |
||
Diluted earnings per share | $ |
0.23 |
|
$ |
0.28 |
|
$ |
(0 |
) |
(16 |
)% |
||
Core income(1) | $ |
8,022 |
|
$ |
8,453 |
|
$ |
(431 |
) |
(5 |
)% |
||
Core diluted earnings per share(1) | $ |
0.23 |
|
$ |
0.25 |
|
$ |
(0 |
) |
(6 |
)% |
||
Pretax return on equity |
|
18.23 |
% |
|
22.57 |
% |
n.a. |
(19 |
)% |
||||
Net interest margin - portfolio |
|
4.97 |
% |
|
4.83 |
% |
n.a. |
3 |
% |
||||
Net interest margin - total company |
|
4.13 |
% |
|
3.98 |
% |
n.a. |
4 |
% |
||||
Average common equity | $ |
239,790 |
|
$ |
228,314 |
|
$ |
11,476 |
|
5 |
% |
||
(1) Core income is a non-GAAP measure. Please see the reconciliation to GAAP net income at the end of this release. |
Discussion of results:
TOTAL LOAN PORTFOLIO | |||||||||||||
($ of UPB in millions) |
|
3Q 2021 |
|
|
2Q 2021 |
|
$ Variance | % Variance | |||||
Held for Investment | |||||||||||||
Investor 1-4 Rental | $ |
1,150 |
|
$ |
1,019 |
|
$ |
131 |
|
13 |
% |
||
Mixed Use |
|
302 |
|
|
293 |
|
|
10 |
|
3 |
% |
||
Multi-Family |
|
203 |
|
|
184 |
|
|
19 |
|
10 |
% |
||
Retail |
|
197 |
|
|
183 |
|
|
14 |
|
8 |
% |
||
All Other |
|
419 |
|
|
384 |
|
|
35 |
|
9 |
% |
||
Total | $ |
2,271 |
|
$ |
2,062 |
|
$ |
209 |
|
10 |
% |
||
Held for Sale | |||||||||||||
Investor 1-4 Rental | $ |
- |
|
$ |
8 |
|
$ |
(8 |
) |
n.m. | |||
Total Managed Loan Portfolio UPB | $ |
2,271 |
|
$ |
2,070 |
|
$ |
201 |
|
10 |
% |
||
Key loan portfolio metrics: | |||||||||||||
Total loan count |
|
6,430 |
|
|
6,125 |
|
|||||||
Weighted average loan to value |
|
67.22 |
% |
|
66.70 |
% |
|||||||
Weighted average total portfolio yield |
|
8.77 |
% |
|
8.90 |
% |
|||||||
Weighted average portfolio debt cost |
|
4.48 |
% |
|
4.81 |
% |
|||||||
n.m. - non meaningful |
Discussion of results:
LOAN PRODUCTION VOLUMES | |||||||||||
($ in millions) |
|
3Q 2021 |
|
2Q 2021 |
$ Variance | % Variance | |||||
Investor 1-4 Rental | $ |
234 |
$ |
147 |
$ |
87 |
|
59 |
% |
||
Traditional Commercial |
|
81 |
|
95 |
|
(13 |
) |
(14 |
)% |
||
Short-term loans |
|
25 |
|
15 |
|
11 |
|
72 |
% |
||
Total loan production | $ |
341 |
$ |
257 |
$ |
84 |
|
33 |
% |
Discussion of results:
CREDIT PERFORMANCE INDICATORS |
|
|
|
||||||||||
($ in thousands) |
|
3Q 2021 |
|
|
2Q 2021 |
|
$ Variance | % Variance | |||||
Nonperforming loans(1) | $ |
288,436 |
|
$ |
315,542 |
|
$ |
(27,106 |
) |
(9 |
)% |
||
Nonperforming loans % total HFI Loans |
|
12.70 |
% |
|
15.30 |
% |
n.a. | (17 |
)% |
||||
Total Charge Offs(2) | $ |
162.08 |
|
$ |
917.61 |
|
$ |
(756 |
) |
(82 |
)% |
||
Charge-offs as a % of Avg. Loans HFI(3) |
|
0.030 |
% |
|
0.183 |
% |
n.a. | (83 |
)% |
||||
Loan Loss Reserve | $ |
4,028 |
|
$ |
3,963 |
|
$ |
65 |
|
2 |
% |
||
(1) Nonperforming/Nonaccrual loans include loans 90+ days past due, loans in foreclosure, bankruptcy and on nonaccrual. | |||||||||||||
(2) $420.47 thousand of the 2Q21 charge-off amount was related to one loan that transferred to REO. | |||||||||||||
(3) Annualized |
Discussion of results:
NET REVENUES | |||||||||||||
($ in thousands) |
|
3Q 2021 |
|
|
2Q 2021 |
|
$ Variance | % Variance | |||||
Interest income | $ |
46,923 |
|
$ |
44,978 |
|
$ |
1,945 |
|
4 |
% |
||
Interest expense - portfolio related | $ |
(20,321 |
) |
|
(20,566 |
) |
|
245 |
|
(1 |
)% |
||
Interest expense - corporate debt |
|
(4,488 |
) |
|
(4,309 |
) |
|
(179 |
) |
4 |
% |
||
Net Interest Income | $ |
22,114 |
|
$ |
20,103 |
|
$ |
2,011 |
|
10 |
% |
||
Loan loss provision |
|
(228 |
) |
|
1,000 |
|
|
(1,228 |
) |
n.m. | |||
Gain on loan sales |
|
306 |
|
|
2,391 |
|
|
(2,085 |
) |
(87 |
)% |
||
Other operating income (expense) |
|
33 |
|
|
41 |
|
|
(8 |
) |
(20 |
)% |
||
Total Net Revenues | $ |
22,225 |
|
$ |
23,535 |
|
$ |
(1,310 |
) |
(6 |
)% |
||
n.m. - non meaningful |
Discussion of results:
OPERATING EXPENSES | |||||||||||
($ in thousands) |
|
3Q 2021 |
|
2Q 2021 |
$ Variance | % Variance | |||||
Compensation and employee benefits | $ |
4,738 |
$ |
4,546 |
$ |
192 |
|
4 |
% |
||
Rent and occupancy |
|
447 |
|
430 |
|
17 |
|
4 |
% |
||
Loan servicing |
|
2,014 |
|
1,922 |
|
92 |
|
5 |
% |
||
Professional fees |
|
736 |
|
795 |
|
(59 |
) |
(7 |
)% |
||
Real estate owned, net |
|
1,186 |
|
1,039 |
|
147 |
|
14 |
% |
||
Other expenses |
|
2,177 |
|
1,918 |
|
259 |
|
14 |
% |
||
Total expenses | $ |
11,298 |
$ |
10,650 |
$ |
648 |
|
6 |
% |
Discussion of results:
SECURITIZATIONS | ||||||||||||
Securities | Balance at | Balance at | ||||||||||
Trusts | Issued | 9/30/2021 | W.A. Rate | 6/30/2021 | W.A. Rate | |||||||
2014-1 Trust | $ |
161,076 |
$ |
18,910 |
8.12 |
% |
$ |
19,973 |
7.86 |
% |
||
2015-1 Trust |
|
285,457 |
|
21,161 |
7.57 |
% |
|
24,852 |
7.63 |
% |
||
2016-1 Trust |
|
319,809 |
|
40,354 |
8.25 |
% |
|
43,925 |
8.12 |
% |
||
2016-2 Trust |
|
166,853 |
|
29,207 |
7.54 |
% |
|
34,440 |
7.08 |
% |
||
2017-1 Trust |
|
211,910 |
|
50,258 |
6.34 |
% |
|
55,648 |
6.02 |
% |
||
2017-2 Trust |
|
245,601 |
|
94,486 |
3.45 |
% |
|
101,179 |
3.33 |
% |
||
2018-1 Trust |
|
176,816 |
|
72,219 |
4.02 |
% |
|
79,377 |
4.02 |
% |
||
2018-2 Trust |
|
307,988 |
|
156,587 |
4.34 |
% |
|
175,943 |
4.48 |
% |
||
2019-1 Trust |
|
235,580 |
|
146,086 |
4.08 |
% |
|
159,345 |
4.06 |
% |
||
2019-2 Trust |
|
207,020 |
|
130,198 |
3.44 |
% |
|
141,446 |
3.51 |
% |
||
2019-3 Trust |
|
154,419 |
|
105,570 |
3.26 |
% |
|
112,848 |
3.28 |
% |
||
2020-1 Trust |
|
248,700 |
|
186,400 |
2.86 |
% |
|
199,267 |
2.86 |
% |
||
2020-2 Trust |
|
96,352 |
|
88,695 |
4.51 |
% |
|
97,601 |
4.44 |
% |
||
2020-MC1 Trust |
|
179,371 |
|
57,111 |
4.51 |
% |
|
84,454 |
4.43 |
% |
||
2021-1 Trust |
|
251,301 |
|
245,423 |
1.72 |
% |
|
250,109 |
1.73 |
% |
||
2021-2 Trust |
|
194,918 |
|
203,743 |
1.77 |
% |
||||||
$ |
3,504,213 |
$ |
1,646,408 |
3.55 |
% |
$ |
1,580,407 |
3.83 |
% |
|||
Discussion of results:
RESOLUTION ACTIVITIES | ||||||||||||
LONG-TERM LOANS | ||||||||||||
RESOLUTION ACTIVITY | THIRD QUARTER 2021 | SECOND QUARTER 2021 | ||||||||||
($ in thousands) | UPB $ | Gain / (Loss) $ | UPB $ | Gain / (Loss) $ | ||||||||
Paid in full | $ |
13,353 |
$ |
1,251 |
|
$ |
21,925 |
$ |
1,446 |
|
||
Paid current |
|
7,722 |
|
79 |
|
|
14,949 |
|
219 |
|
||
REO sold(1) |
|
4,680 |
|
31 |
|
|
947 |
|
(2 |
) |
||
Total resolutions | $ |
25,755 |
$ |
1,361 |
|
$ |
37,821 |
$ |
1,663 |
|
||
Resolutions as a % of nonperforming UPB |
|
105.3 |
% |
|
104.4 |
% |
||||||
Note (1) There was an REO property held since January 2019 that was sold during the quarter ended September 30, 2021, with a total lifetime loss of $1.7 million, all of which was recognized in prior periods. | ||||||||||||
SHORT-TERM AND FORBEARANCE LOANS | ||||||||||||
RESOLUTION ACTIVITY | THIRD QUARTER 2021 | SECOND QUARTER 2021 | ||||||||||
($ in thousands) | UPB $ | Gain / (Loss) $ | UPB $ | Gain / (Loss) $ | ||||||||
Paid in full | $ |
8,960 |
$ |
664 |
|
$ |
13,517 |
$ |
682 |
|
||
Paid current |
|
25,141 |
|
29 |
|
|
7,794 |
|
59 |
|
||
REO sold |
|
104 |
|
47 |
|
|
164 |
|
(73 |
) |
||
Total resolutions | $ |
34,205 |
$ |
740 |
|
$ |
21,475 |
$ |
668 |
|
||
Resolutions as a % of nonperforming UPB |
|
102.2 |
% |
|
103.1 |
% |
||||||
Grand total resolutions | $ |
59,960 |
$ |
2,101 |
|
$ |
59,296 |
$ |
2,331 |
|
||
Grand total resolutions as a % of nonperforming UPB |
|
103.5 |
% |
|
103.9 |
% |
Discussion of results:
Conference Call and Webcast
Velocity’s executive management team will host a conference call and webcast to review its financial results on Wednesday, November 3, 2021, 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 Velocity Financial’s Investor Relations website at https://www.velfinance.com/events-and-presentations. To listen to the webcast, please go to Velocity’s website at least 15 minutes before the call to register and to download and install any needed software.
Management’s slide presentation will be available through the Events and Presentations section of the Company’s Investor Relations website after the market close on Wednesday, November 3, 2021.
Conference Call Information
To participate by phone, please dial-in 15 minutes prior to the start time to allow for wait times to access the conference call. The live conference call will be accessible by dialing 1-833-316-0544 in the U.S. and Canada and 1-412-317-5725 for international callers. Callers should ask to be joined into the Velocity Financial, Inc. earnings call.
A replay of the call will be available through midnight on November 30, 2021 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 #10160806. 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 investor 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 16 years.
(1) |
Core Income and Core EPS are non-GAAP financial measures the Company presents to help investors better understand unique items that impact earnings. For a reconciliation of GAAP Net Income to Core Income, please refer to the sections of this press release titled “Non-GAAP Financial Measures” and “Adjusted Financial Metric Reconciliation to GAAP Net Income.” |
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with United States generally accepted accounting principles (“GAAP”), the Company uses Core Income, which is a non-GAAP financial measure. 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,” 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, (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 contemplated securitization and (6) 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, Inc. Consolidated Statements of Financial Condition |
||||||||||||||
Quarter Ended | ||||||||||||||
9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | ||||||||||
Unaudited | Unaudited | Unaudited | Audited | Unaudited | ||||||||||
(In thousands) | ||||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ |
35,497 |
$ |
27,741 |
$ |
20,434 |
$ |
13,273 |
$ |
19,210 |
||||
Restricted cash |
|
9,586 |
|
7,921 |
|
6,808 |
|
7,020 |
|
7,821 |
||||
Loans held for sale, net |
|
0 |
|
7,916 |
|
0 |
|
13,106 |
|
0 |
||||
Loans held for investment, at fair value |
|
1,360 |
|
1,370 |
|
1,364 |
|
1,539 |
|
3,327 |
||||
Loans held for investment |
|
2,265,922 |
|
2,057,046 |
|
1,983,435 |
|
1,924,489 |
|
1,977,236 |
||||
Net deferred loan costs |
|
29,775 |
|
26,707 |
|
25,070 |
|
23,600 |
|
23,850 |
||||
Total loans, net |
|
2,297,057 |
|
2,093,039 |
|
2,009,869 |
|
1,962,734 |
|
2,004,413 |
||||
Accrued interest receivables |
|
11,974 |
|
11,094 |
|
11,169 |
|
11,373 |
|
13,134 |
||||
Receivables due from servicers |
|
57,058 |
|
73,517 |
|
77,731 |
|
71,044 |
|
44,466 |
||||
Other receivables |
|
870 |
|
10,169 |
|
3,879 |
|
4,085 |
|
402 |
||||
Real estate owned, net |
|
17,905 |
|
20,046 |
|
14,487 |
|
15,767 |
|
14,653 |
||||
Property and equipment, net |
|
3,348 |
|
3,625 |
|
3,891 |
|
4,145 |
|
4,446 |
||||
Deferred tax asset |
|
17,026 |
|
13,196 |
|
9,246 |
|
6,654 |
|
1,832 |
||||
Other assets |
|
6,843 |
|
7,257 |
|
7,325 |
|
6,779 |
|
16,489 |
||||
Total Assets | $ |
2,457,164 |
$ |
2,267,605 |
$ |
2,164,839 |
$ |
2,102,874 |
$ |
2,126,866 |
||||
Liabilities and members' equity | ||||||||||||||
Accounts payable and accrued expenses | $ |
79,360 |
$ |
70,049 |
$ |
65,003 |
$ |
63,361 |
$ |
61,859 |
||||
Secured financing, net |
|
163,449 |
|
164,053 |
|
129,666 |
|
74,982 |
|
74,776 |
||||
Securitizations, net |
|
1,623,674 |
|
1,558,163 |
|
1,453,386 |
|
1,579,019 |
|
1,670,930 |
||||
Warehouse & repurchase facilities |
|
258,491 |
|
151,872 |
|
203,314 |
|
75,923 |
|
19,541 |
||||
Total Liabilities |
|
2,124,974 |
|
1,944,137 |
|
1,851,369 |
|
1,793,285 |
|
1,827,106 |
||||
Mezzanine Equity | ||||||||||||||
Series A Convertible preferred stock |
|
90,000 |
|
90,000 |
|
90,000 |
|
90,000 |
|
90,000 |
||||
Stockholders' Equity | ||||||||||||||
Stockholders' equity |
|
242,190 |
|
233,468 |
|
223,470 |
|
219,589 |
|
209,760 |
||||
Total Liabilities and members' equity | $ |
2,457,164 |
$ |
2,267,605 |
$ |
2,164,839 |
$ |
2,102,874 |
$ |
2,126,866 |
||||
Book value per share | $ |
12.05 |
$ |
11.62 |
$ |
11.12 |
$ |
10.93 |
$ |
10.44 |
||||
Shares outstanding |
|
20,098 |
|
20,087 |
|
20,087 |
|
20,087 |
|
20,087 |
Velocity Financial, Inc.
Consolidated Statements of Income (Quarterly) |
||||||||||||||||||
Quarter Ended | ||||||||||||||||||
($ in thousands) | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | |||||||||||||
Unaudited | Unaudited | Unaudited | Audited | Unaudited | ||||||||||||||
Revenues | ||||||||||||||||||
Interest income | $ |
46,923 |
$ |
44,978 |
|
$ |
40,707 |
|
$ |
41,556 |
|
$ |
41,374 |
|
||||
Interest expense - portfolio related |
|
20,321 |
|
20,566 |
|
|
20,832 |
|
|
21,442 |
|
|
22,347 |
|
||||
Net interest income - portfolio related |
|
26,602 |
|
24,412 |
|
|
19,875 |
|
|
20,114 |
|
|
19,027 |
|
||||
Interest expense - corporate debt |
|
4,488 |
|
4,309 |
|
|
7,350 |
|
|
1,900 |
|
|
1,913 |
|
||||
Net interest income |
|
22,114 |
|
20,103 |
|
|
12,525 |
|
|
18,214 |
|
|
17,114 |
|
||||
Provision for loan losses |
|
228 |
|
(1,000 |
) |
|
105 |
|
|
406 |
|
|
1,573 |
|
||||
Net interest income after provision for loan losses |
|
21,886 |
|
21,103 |
|
|
12,420 |
|
|
17,808 |
|
|
15,541 |
|
||||
Other operating income | ||||||||||||||||||
Gain on disposition of loans |
|
306 |
|
2,391 |
|
|
2,839 |
|
|
4,855 |
|
|
(51 |
) |
||||
Unrealized gain/(loss) on fair value loans |
|
0 |
|
20 |
|
|
(2 |
) |
|
32 |
|
|
379 |
|
||||
Other income (expense) |
|
33 |
|
21 |
|
|
(36 |
) |
|
(196 |
) |
|
1,021 |
|
||||
Other operating income (expense) |
|
339 |
|
2,432 |
|
|
2,801 |
|
|
4,691 |
|
|
1,349 |
|
||||
Total net revenues |
|
22,225 |
|
23,535 |
|
|
15,221 |
|
|
22,499 |
|
|
16,890 |
|
||||
Operating expenses | ||||||||||||||||||
Compensation and employee benefits |
|
4,738 |
|
4,546 |
|
|
5,186 |
|
|
4,135 |
|
|
5,692 |
|
||||
Rent and occupancy |
|
447 |
|
430 |
|
|
463 |
|
|
424 |
|
|
415 |
|
||||
Loan servicing |
|
2,014 |
|
1,922 |
|
|
1,867 |
|
|
1,977 |
|
|
2,168 |
|
||||
Professional fees |
|
736 |
|
795 |
|
|
533 |
|
|
1,415 |
|
|
1,051 |
|
||||
Real estate owned, net |
|
1,186 |
|
1,039 |
|
|
509 |
|
|
217 |
|
|
898 |
|
||||
Other operating expenses |
|
2,177 |
|
1,918 |
|
|
2,059 |
|
|
2,578 |
|
|
1,641 |
|
||||
Total operating expenses |
|
11,298 |
|
10,650 |
|
|
10,617 |
|
|
10,746 |
|
|
11,865 |
|
||||
Income before income taxes |
|
10,927 |
|
12,885 |
|
|
4,604 |
|
|
11,753 |
|
|
5,025 |
|
||||
Income tax expense |
|
2,905 |
|
3,432 |
|
|
1,208 |
|
|
2,177 |
|
|
1,544 |
|
||||
Net income | $ |
8,022 |
$ |
9,453 |
|
$ |
3,396 |
|
$ |
9,576 |
|
$ |
3,481 |
|
||||
Less: Deemed dividends on preferred stock |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||||
Less: Undistributed earnings allocated to participating securities |
|
3,030 |
$ |
3,571 |
|
$ |
1,281 |
|
n.a. | n.a. | ||||||||
Net income (loss) allocated to common shareholders | $ |
4,992 |
$ |
5,882 |
|
$ |
2,115 |
|
$ |
9,576 |
|
$ |
3,481 |
|
||||
Basic earnings (loss) per share | $ |
0.25 |
$ |
0.29 |
|
$ |
0.11 |
|
$ |
0.48 |
|
$ |
0.17 |
|
||||
Diluted earnings (loss) per common share | $ |
0.23 |
$ |
0.28 |
|
$ |
0.10 |
|
$ |
0.29 |
|
$ |
0.11 |
|
||||
Basic weighted average common shares outstanding |
|
20,090 |
|
20,087 |
|
|
20,087 |
|
|
20,087 |
|
|
20,087 |
|
||||
Diluted weighted average common shares outstanding |
|
34,212 |
|
33,960 |
|
|
33,407 |
|
|
32,793 |
|
|
32,435 |
|
Velocity Financial, Inc.
Net Interest Margin ‒ Portfolio Related and Total Company (Unaudited) |
||||||||||||||||||||||||||
Quarter Ended September 30, 2021 | Quarter Ended June 30, 2021 | Quarter Ended September 30, 2020 | ||||||||||||||||||||||||
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 | $ |
2,284 |
$ |
11,524 |
$ |
- |
||||||||||||||||||||
Loans held for investment |
|
2,137,505 |
|
2,010,962 |
|
2,016,414 |
||||||||||||||||||||
Total loans | $ |
2,139,789 |
$ |
46,923 |
8.77 |
% |
$ |
2,022,486 |
$ |
44,978 |
8.90 |
% |
$ |
2,016,414 |
$ |
41,374 |
8.21 |
% |
||||||||
Debt: | ||||||||||||||||||||||||||
Warehouse and repurchase facilities | $ |
182,383 |
|
2,365 |
5.19 |
% |
$ |
166,981 |
|
2,361 |
5.66 |
% |
$ |
22,306 |
|
703 |
12.61 |
% |
||||||||
Securitizations |
|
1,633,059 |
|
17,956 |
4.40 |
% |
|
1,543,295 |
|
18,205 |
4.72 |
% |
|
1,742,669 |
|
21,644 |
4.97 |
% |
||||||||
Total debt - portfolio related |
|
1,815,442 |
|
20,321 |
4.48 |
% |
|
1,710,276 |
|
20,566 |
4.81 |
% |
|
1,764,975 |
|
22,347 |
5.07 |
% |
||||||||
Corporate debt |
|
172,934 |
|
4,488 |
10.38 |
% |
|
166,335 |
|
4,309 |
10.36 |
% |
|
78,000 |
|
1,913 |
9.81 |
% |
||||||||
Total debt | $ |
1,988,376 |
$ |
24,809 |
4.99 |
% |
$ |
1,876,611 |
$ |
24,875 |
5.30 |
% |
$ |
1,842,975 |
$ |
24,260 |
5.27 |
% |
||||||||
Net interest spread - portfolio related (2) | 4.29 |
% |
4.08 |
% |
3.14 |
% |
||||||||||||||||||||
Net interest margin - portfolio related | 4.97 |
% |
4.83 |
% |
3.77 |
% |
||||||||||||||||||||
Net interest spread - total company (3) | 3.78 |
% |
3.59 |
% |
2.94 |
% |
||||||||||||||||||||
Net interest margin - total company | 4.13 |
% |
3.98 |
% |
3.39 |
% |
||||||||||||||||||||
(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) |
|||||||||||||||
Core Income | |||||||||||||||
Quarter Ended | |||||||||||||||
($ in thousands) | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | ||||||||||
Net Income | $ |
8,022 |
$ |
9,453 |
|
$ |
3,396 |
$ |
9,576 |
$ |
3,481 |
||||
Recovery of Loan Loss Provision |
|
- |
$ |
(1,000 |
) |
|
- |
|
- |
|
- |
||||
Nonrecurring debt amortization |
|
- |
|
- |
|
|
3,326 |
|
- |
|
- |
||||
COVID-19 Impact |
|
- |
|
- |
|
|
- |
|
- |
|
- |
||||
Workforce reduction costs |
|
- |
|
- |
|
|
- |
|
- |
|
432 |
||||
Core Income | $ |
8,022 |
$ |
8,453 |
|
$ |
6,722 |
$ |
9,576 |
$ |
3,913 |
||||
Core diluted earnings per share | $ |
0.23 |
$ |
0.25 |
|
$ |
0.20 |
$ |
0.29 |
$ |
0.12 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20211103006149/en/
Investors and Media:
Chris Oltmann
(818) 532-3708