Third Quarter Highlights:
- Net income and Core income(1) of $8.02 million; diluted EPS and
Core diluted EPS(1) of $0.23
- Loan production volume increased 32.81% quarter-over-quarter
and totaled $340.66 million in unpaid principal balance (UPB),
driven mainly by growth in demand for Investor 1-4 Rental
loans
- Portfolio net interest income of $26.6 million, an increase of
9.0% from 2Q21
- Portfolio net interest margin of 4.97%
- Book value per common share of $12.05 as of September 30, 2021,
an increase from $11.62 per share as of June 30, 2021
- Loans held for investment (HFI) UPB of $2.27 billion as of
September 30, 2021
- Nonaccrual loans as a percentage of HFI loans was 12.7% as of
September 30, 2021
- 3Q21 nonperforming loan (NPL) resolutions totaled $59.96
million in UPB, realizing 103.5% of UPB resolved
- Issued our VCC 2021-2 securitization totaling $205.18 million
in UPB
- Upsized and renewed a warehouse financing facility with a key
liquidity provider, doubling the maximum capacity to $200 million
and extending the renewal period from one year to two years
- Completed a registration statement with the capacity to issue
up to $100 million of our common stock, $50 million of which, or up
to a maximum of 4,000,000 shares, is authorized for issuance
through a newly established “at the market” (ATM) program
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:
- Net income for 3Q21 totaled $8.02 million, a decrease from
$9.45 million in 2Q21, mainly as a result of a $2.2MM gain from the
sale of loans during 2Q21 and only a $0.3 million gain from loans
sold in 3Q21, as we decided to retain all new production for
securitization
- GAAP Net income and Core income were the same in 3Q21
- Portfolio NIM in 3Q21 was 4.97%, a 14 bps increase from 4.83%
in 2Q21, driven by a quarter-over-quarter increase in
portfolio-related interest income and a decrease in
portfolio-related interest expense
- The pretax return on equity was 18.23% in 3Q21, a decrease from
22.57% for 2Q21, mainly as a result our decision to reduce whole
loan sales in 3Q21.
TOTAL LOAN PORTFOLIO ($ 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:
- Velocity’s total loan portfolio was $2.27 billion in UPB as of
September 30, 2021, a 9.71% increase from $2.07 billion in UPB as
of June 30, 2021 ‒ HFI portfolio growth driven by record production
activity, and also aided by a 5% quarter-over-quarter decrease in
loan payoffs
- The weighted average loan-to-value of the HFI portfolio was
67.22% as of September 30, 2021, consistent with 66.70% as of June
30, 2021
- The weighted average total portfolio yield was 8.77% in 3Q21, a
decrease of 13 bps from 2Q21, primarily driven by a reduction in
delinquent contractual (NPL) interest received in 3Q21
- Portfolio related debt cost in 3Q21 was 4.48%, a decrease of 33
bps from 2Q21, primarily driven by the attractive issuance levels
of Velocity’s securitization thus far in 2021
LOAN PRODUCTION VOLUMES ($ 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:
- Loan production in 2Q21 totaled $340.66 million in UPB, a
32.81% increase from $256.51 million in UPB in 2Q21 ‒ Driven by
strong demand for 1-4 residential rental financing and the
introduction of lending products tailored to meeting the evolving
needs of our customers
- Loan origination volume in October 2021 totaled $138.5 million
in UPB
CREDIT PERFORMANCE INDICATORS
($ 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:
- Nonperforming loans totaled $288.44 million as of September 30,
2021, or 12.70% of loans HFI, compared to $315.54 million as of
June 30, 2021, or 15.30% of loans HFI ‒ The quarter-over-quarter
improvement was driven by resolution of 19.00% of nonperforming
loan UPB as of June 30, 2021, 10.41% through payoff and 7.07% were
brought back to performing (accrual) status, 1.52% from sales of
REO properties. Loan resolutions in 3Q21 realized all delinquent
contractual interest in addition to default interest and prepayment
fees.
- Charge-offs in 3Q21 totaled $162.08 thousand compared to $917.6
thousand in 2Q21 ‒ Charge-offs in 3Q21 reflect a reversion to more
normalized levels, which have averaged $358 thousand per quarter
over the past eight quarters
- The reserve for loan losses was $4.03 million as of September
30, 2021, compared to $3.96 million as of June 30, 2021 ‒ The
reserve remained consistent. An increase in reserve attributable to
portfolio growth was mainly offset by a reduction in reserve driven
by strong resolutions on nonperforming loans.
- Capitalized interest recovered on COVID forbearance loans
granted a deferral through the end of 3Q21 totaled $1.77 million,
with a remaining balance of $8.03 million as of September 30, 2021.
None of the capitalized interest has been forgiven.
NET REVENUES ($ 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:
- Total net interest income, including corporate interest
expense, increased by $2.01 million, or 10.0% sequentially,
primarily resulting from growth in our HFI portfolio.
- Net Revenues decreased quarter-over-quarter by $1.31 million,
mainly due to our decision to retain loans for securitization and a
more normalized loan loss provision
OPERATING EXPENSES ($ 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:
- Operating expenses in 3Q21 of $11.3 million were generally
consistent with the $10.7 million in 2Q21
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:
- Weighted Average Rate decreased 28bps as a result of our
continued lower cost issuances
- Securitization balances as of September 30, 2021, totaled $1.65
billion, an increase from $1.58 billion as of June 30, 2021, driven
by the issuance of Velocity’s VCC 2021-2 securitization in August,
partially offset by prepayment activity and contractual principal
amortization
- Exploring strategies to opportunistically refinance certain of
our existing securitizations with exercisable call rights to
further reduce financing costs
RESOLUTION ACTIVITIES LONG-TERM
LOANS RESOLUTION ACTIVITY THIRD QUARTER
2021 SECOND QUARTER 2021 ($ 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:
- Resolution activities on $60.0 million of UPB in 3Q21 resulted
in net gains of $2.1 million or 103.5% of UPB resolved
- Long-term loan resolutions totaled $25.76 million in UPB and
realized $1.4 million of gains ‒ Gains in 3Q21 were primarily
comprised of default interest realized when the loans payoff or
cure, and prepayment penalties on payoff if the loan is still
within the prepayment window
- Short-term loan resolutions totaled $34.2 million in UPB and
realized $0.74 million of gains ‒ Gains in 3Q21 were primarily
comprised of default interest realized when the loans payoff ‒ The
UPB of short-term loans that paid current was $25.1 million in
3Q21, and increase from $7.8 million in 2Q21
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
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