Velocity Financial, Inc. Reports Third Quarter 2021 Results

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

WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--November 3, 2021--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

Contacts

Investors and Media:
Chris Oltmann
(818) 532-3708

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Disclaimer

Velocity Financial Inc. published this content on 04 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2021 10:22:48 UTC.