Third Quarter 2020

Earnings Presentation

November 5, 2020

Forward Looking Statements

This presentation may contain "forward-looking" statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, competitive position and potential organic and inorganic growth opportunities. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as "anticipate," "believe," "could," "seek," "estimate," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" or similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause

our actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our beliefs and assumptions only as of the date of this presentation. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in

the forward-looking statements, even if new information becomes available in the future.

Victory Capital uses non-GAAP financial measures referred to as Adjusted EBITDA and Adjusted Net Income to measure the operating profitability of the business. These measures eliminate the impact of one-time acquisition, restructuring and integration costs and demonstrate the ongoing operating earnings metrics of the business. The Company has included these non-GAAP measures to provide investors with the same financial metrics used by management to assess the operating performance of the Company. Reconciliations of non-GAAP metrics to their closest comparable GAAP metrics can be found in the Appendix that accompanies this presentation.

2

Agenda

Quarterly Business Overview

Investment Performance

THB Asset Management Acquisition & Alderwood Investment

Third Quarter 2020 Financial Results

Appendix

3

Quarterly Business Overview

4

Business Overview

Total AUM of $132.7Bn at September 30, 2020

AUM & FLOWS

˃ Up 3% from June 30, 2020, and up 7% from March 31, 2020

Total LT gross flows of $5.1Bn and net flows -$2.9Bn in 3Q

3Q OPERATING

  • FINANCIAL HIGHLIGHTS
  • Investment performance was strong in 3Q, as of September 30, 2020:
    • 70% of AUM outperforming benchmark over three years
    • 69% of AUM outperforming benchmark over five years
  • Record high $1.00 Adjusted Net Income with tax benefit per diluted share
    • Up 12% from 2Q 2020 and up 10% from 3Q 2019
  • Record high 51% Adjusted EBITDA Margin for the quarter
    • Expanded 320 basis points versus 2Q 2020
    • Expanded 590 basis points versus 3Q 2019
  • Ended quarter with $837MM of debt, and leverage ratio of 2.0x; subsequently reduced by an additional $20MM to $817MM
  • Increased cash dividend by 17%, new $15 million stock repurchase authorization

ACQUISITION & INVESTMENTS

  • Announced THB Asset Management Acquisition, 10th Investment Franchise
  • Strategic investment in Alderwood Partners
  • Conducting diligence on larger-scale acquisition opportunities

5

Direct-to-Consumer Digital Marketplace Update

  • Multi-channelpaid media campaign commenced in select geographies with large military populations
    • Radio
    • Digital
    • Paid Search
    • Social Media
  • To be debuting new digital experience
  • Referral agreement with USAA®
    • ~100K new account registrations since acquisition
  • Broadening investment choices in direct marketplace with member share classes for 11 Victory Funds
  • Launched fixed income SMA capabilities
  • Introducing ESG-focused strategy with USAA® Sustainable World Fund
  • Distribution of USAA® Mutual Funds and ETFs outside of direct marketplace beginning to gain traction
    • USAA® branded active fixed income ETFs will reach 3-year anniversary in 4Q commencing Morningstar coverage
    • New share classes introduced for USAA® Mutual Funds to increase options for financial advisors and their clients

USAA and the USAA logos are registered trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license.

6

Victory Capital and its affiliates are not affiliated with USAA or its affiliates.

Investment Performance

7

Commitment to Long-Term Investment Performance

Total Mutual

39 Funds and ETFs

with 4- or 5-Star

overall ratings

Total Mutual Funds

67% and ETFs AUM with

4- or 5-Star overall ratings

% of AUM outperforming benchmarks

% of strategies outperforming benchmarks

80%

70%

69%

75%

80%

64%

60%

55%

60%

50%

53%

43%

40%

40%

20%

20%

0%

0%

1-year

3-year

5-year

10-year

1-year

3-year

5-year

10-year

period

period

period

period

period

Period

period

period

8

All figures as of September 30, 2020.

THB Asset Management Acquisition & Alderwood Investment

9

THB Asset Management Acquisition

  • Victory Capital's 10th Investment Franchise
  • Creative deal structure
    • Nominal consideration paid
    • Standard compensation agreement based on revenue sharing
    • Immediately accretive to earnings
  • Full ESG integration in investment process
    • 30-yearhistory of managing SRI portfolios
  • Proven investment excellence
  • Opportunity to leverage THB's distribution in Australia and Europe
  • Four primary investment strategies in capacity- constrained asset classes, all with significant room for asset growth:
    • U.S. Micro-Cap
    • U.S. Small-Cap
    • U.S. Mid-Cap
    • International Opportunities (small/micro)
  • Will be fully integrated into operating and distribution platforms

10

THB Asset Management Acquisition

Peer Rankings and Excess Returns vs. Benchmarks, as of Sep 30, 2020

U.S. Micro-Cap1

U.S.Small-Cap2

U.S.Mid-Cap3

International

Opportunities4

Peer Rank (%)

QTD

4%

30%

7%

4%

Excess return vs. benchmark

+867 bps

+123 bps

+260 bps

+551 bps

Peer Rank (%)

1-Year

24%

14%

9%

7%

Excess return vs. benchmark

-100 bps

+720 bps

+936 bps

+1,298 bps

Peer Rank (%)

3-Year

25%

32%

10%

8%

Excess return vs. benchmark

+75 bps

+128 bps

+620 bps

+511 bps

Peer Rank (%)

5-Year

20%

21%

18%

2%

Excess return vs. benchmark

+242 bps

+135 bps

+276 bps

+846 bps

10-Year

Peer Rank (%)

35%

64%

NA

NA

Excess return vs. benchmark

+64 bps

-59 bps

NA

NA

Since Inception

Jun 1998

Jan 1992

Feb 2014

Apr 2015

Excess return vs. benchmark

+444 bps

+61 bps

+297 bps

+819 bps

Performance data quoted represents past performance net of fees and is not indicative of future results. Periods greater than 1 year are annualized. Returns represented

include reinvestment of dividends and other income. Benchmark Indexes: 1) Russell Microcap; 2) Russell 2000; 3) Russell Midcap®; and, 4) MSCI EAFE Small Cap

11

Source: eVestment and THB Asset Management

Strategic Investment: Alderwood Partners

  • Proven M&A team
    • Founded in 2020 by Jonathan Little
    • Based in London
    • Raising a PE-style fund to invest in specialized asset management businesses
  • VCTR acquired 15% GP ownership stake
    • Board representation
    • Planning to also invest at fund level
  • Strategic rationale:
    • Broadens scope of growth opportunities outside of U.S.
    • Exposure to new potential acquisition prospects
    • Potential complementary distribution opportunities
  1. Selling VCTR products into new geographies
    1. Distributing products manufactured offshore in
      U.S. via VCTR's established sales networks
  • Access to offshore operational and regulatory platforms

12

Third Quarter 2020 Financial Results

13

Third Quarter 2020 Financial Results

THIRD QUARTER FINANCIAL RESULTS

  • $188.7MM revenue
    • Up 4% from 2Q 2020
    • Down 12% from 3Q 2019
  • GAAP operating margin of 43%
    • Up 650 bps from 2Q 2020
    • Up 1,680 bps from 3Q 2019
  • Record high Adjusted EBITDA Margin of 51%
  • GAAP Earnings per diluted share of $0.76
    • Up 25% from 2Q 2020
    • Up 117% from 3Q 2019
  • Record high adjusted Net Income with tax benefit per diluted share of $1.00

CAPITAL MANAGEMENT

  • Net Debt / Annualized Adjusted EBITDA down to 2.0x at September 30
  • Returned $13.9MM to shareholders in 3Q
  • New $15MM share repurchase plan authorization
  • Quarterly cash dividend increased 17% to $0.07 per share

14

Assets Under Management (End of Period)

• Total AUM of $132.7Bn at Sep. 30, 2020

($mm)

˃ Up

3% from June 30, 2020

˃ Up

7% from March 31, 2020

$Bn

Retail

Institutional

Direct

• Diversified distribution channels

˃ Retail

˃ Institutional

˃ Direct

$151.8

$123.8

$129.1 $132.7

4Q19

1Q20

2Q20

3Q20

15

Long-Term Asset Flows

$Bn

3Q 2020

Gross LT Sales

Gross LT Redemptions

• Gross LT sales of $5.1Bn

3/31/18

($mm)

• LT net outflows $2.9Bn

$7.3

• Multiple franchises/strategies generated

$5.3

$5.2

$5.1

long-term net inflows in 3Q & YTD 2020: ˃ INCORE

˃ Trivalent

˃ Sophus

˃ RS Global

Operating Metrics

4Q19

1Q20

2Q20

3Q20

Net long-term flows ($MM)

-$1,474

-$3,101

-$3,466

-$2,878

16

Revenues

($mm)

3/31/18

$MM

9/30/17

• 3Q 2020 revenue $189MM

$218.6

˃ Up 4%, vs 2Q 2020

$204.4

˃ Down 8% vs 1Q 2020

$105.0

$181.9

$188.7

  • YTD 2020 revenue $575MM
    • Up 46% vs 2019 nine months
  • Average YTD 2020 fee rate of 56.7bps

Operating Metrics

4Q19

1Q20

2Q20

3Q20

Average AUM ($Bn)

$147.9

$144.1

$128.9

$133.1

Average Fee Rate (bps), as reported

58.7

57.1

56.7

56.4

17

Expenses

3/31/18

3Q

2020 Total expenses

$MM

˃ Declined 6% from 2Q

$170.1

9/30/17

˃ Down 36% from $181

million in 3Q 2019

$130.4

3Q

2020 operating expenses

$122.7

$115.9

down 5% vs 2Q

  • Acquisition-related,restructuring and integration expenses declined 44%

Operating Metrics ($MM)

4Q19

1Q20

2Q20

3Q20

Personnel

$54.2

$47.6

$49.1

$47.4

Operating

77.8

70.8

59.1

56.3

Non-Operating

15.8

16.6

6.6

7.8

Acquisition-related, restructuring & integration

22.3

(4.6)

7.9

4.4

18

Non-GAAP Metrics

($mm)

  • 3Q 2020 Adjusted Net Income (ANI) with tax benefit of $1.00 per diluted

share

$100.0

˃ Up 12% from 2Q 2020

˃ Up 10% from 3Q 2019

• 3Q 2020 ANI with tax benefit of

$73.4MM$75.0

    • $66.7MM ANI
    • $6.7MM tax benefit
  • Record high Adjusted EBITDA$50.0 Margin of 50.7%
    • Up 320 bps from 2Q 2020
    • Up 590 bps from 3Q 2019 $25.0

$-

3/31/18$MM except per share data

9/30/17

ANI

Tax Benefit

ANI with tax benefit per diluted share

$1.20

$0.99

$1.00

$1.00

$0.92

$0.89

$72.8

$73.4

$0.80

$68.5

$6.8

$65.1

$6.7

$6.7

$6.7

$0.60

$66.0

$61.7

$58.3

$66.7

$0.40

$0.20

$0.00

Operating Metrics

4Q19

1Q20

2Q20

3Q20

Adjusted EBITDA ($MM)

$102.3

$91.5

$86.3

$95.6

Adjusted EBITDA Margin

46.8%

44.8%

47.5%

50.7%

Adjusted measures are non-GAAP financial measures. Reconciliations and explanations of these non-GAAP financial measures are provided at the end of this presentation.

19

Capital Management

($mm)

Selected Balance Sheet Items ($MM)

9/30/2020

Cash / Cash Equivalents

$56

Debt (4Q to-date, further reduced to $817MM)

$837

Stockholders' Equity

$660

Diluted Shares Outstanding (MM)

73.4

Net Debt / Adjusted EBITDA1 (at 9/30/2020)

2.0x

3Q 2020 Highlights

  • Returned $13.9 million to shareholders
    • Repurchased 529K shares
  • Increased cash dividend 17%
  • Reduced debt by $44 million in 3Q
  • Leverage ratio declined to 2.0x
  • Cost of debt declined 51% year-over- year
    • Interest rate declined 250bps to 3.1%, vs 5.6%

Interest Expense and Other

3/31/18

Debt ($MM)

9/30/17

Financing Costs ($MM)

$1,100

$16.9

$14.9

$952

$914

$881

$11.4

$9.7

$837

$8.2

7-1-19 4Q19 1Q20 2Q20 3Q20

3Q19 4Q19 1Q20 2Q20 3Q20

Leverage Ratio1

GAAP Operating Cash Flow ($MM)

$118.4

2.4x

2.3x

2.3x

2.2x

$59.7

$69.0

$61.8

$51.9

2.0x

3Q19 4Q19 1Q20 2Q20 3Q20

3Q19 4Q19 1Q20 2Q20 3Q20

1 Net Debt / Run Rate Adjusted EBITDA ratio was 2.0x at 9.30.2020, from Annualized Adjusted EBITDA of $383MM, and net debt of $781MM from $837MM in debt, less $56MM in cash.

20

Successful Execution … Promises Kept

STATED OBJECTIVES

During 2018 IPO

Make Accretive Acquisitions

Increase Scale

Diversify Asset Classes

Broaden Distribution

Become the Industry's

Consolidator of Choice

TANGIBLE RESULTS

Today

USAA® AMCO acquisition earnings accretion >100%

AUM up >100%, enhancing operating efficiencies

Acquired Fixed Income and Solutions capabilities, balancing asset class mix

Opened unique Direct-to-Consumer Channel

Next Generation integrated multi-franchise platform provides distinct competitive advantages for current trends in asset management industry

Nine months ended Sept. 30,

%Growth

(in millions, except per share amounts and percentages)

2020

2019

2018

'20 vs. '18

'20 vs. '19

'19 vs. '18

Revenue

$575.0

$393.8

$317.4

+81%

+46%

+24%

Adjusted EBITDA

$273.5

$166.5

$123.8

+121%

+64%

+34%

Adjusted EBITDA Margin

47.6%

42.3%

39.0%

+860bps

+530bps

+330bps

ANI with Tax Benefit

$206.9

$120.3

$88.6

+134%

+72%

+36%

GAAP EPS

$2.14

$0.75

$0.71

+201%

+185%

+6%

ANI with Tax Benefit per Diluted Share

$2.81

$1.64

$1.26

+123%

+71%

+30%

Cash Dividends Declared per Share

$0.16

$0.05

$0.00

NA

+220%

NA

21

Ongoing and Future Cash-Tax Benefits

  • Section 338(h)(10) Election
    • Stepped up cost basis of acquired indefinite lived intangible assets is deductible for corporate income tax purposes over 15 years
      • $1.8 billion in total future tax amortization
      • $441 million in future cash tax savings, assuming 25% tax rate
      • NPV >$200 million conservatively discounted at 10%, or ~$3.00 per share

$MM

$140

$120

$100

$80

$60

$40

$20

$0

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

Current Tax Amortization Schedule

Cash Tax Benefit using 25% Tax Rate

Enhancing Shareholder Value with

Balance Sheet Flexibility

Interest

Share

Repurchases

De-leveraging

Dividends

Cap Ex

Enhancing Shareholder Value by:

  • Improving platform with every strategic acquisition
  • Gaining efficiency from integrated platform
  • Expanding margins by increasing scale and efficiency
  • Evaluating numerous acquisition opportunities
  • Being acquirer of choice for many asset managers

Maintaining Balance Sheet Flexibility with:

  • Strategic capital allocation policy
  • Strong free cash flow generation
  • Capacity to quickly de-leverage to do additional deals
  • Minor share repurchases
  • Ancillary cash dividend
  • Minimal cap ex, due to business model

23

Appendix

24

Notes and Disclosures

Information Regarding Non-GAAP Financial Measures

Victory Capital uses non-GAAP financial measures referred to as Adjusted EBITDA and Adjusted Net Income to measure the operating profitability of the Company. These measures eliminate the impact of one-time acquisition, restructuring and integration costs and demonstrate the ongoing operating earnings metrics of the Company. The Company has included these non-GAAP measures to provide investors with the same financial metrics used by management to assess the operating performance of the Company. Due to rounding, numbers presented in the following tables may not add up to precisely the totals provided.

Adjusted EBITDA

Adjustments made to GAAP Net Income to calculate Adjusted EBITDA, as applicable, are:

  • Adding back income tax expense;
  • Adding back interest paid on debt and other financing costs net of interest income;
  • Adding back depreciation on property and equipment;
  • Adding back other business taxes;
  • Adding back amortization expense on acquisition-related intangible assets;
  • Adding back stock-based compensation expense associated with equity awards issued from pools created in connection with the management-led buyout and various acquisitions and as a result of equity grants related to the IPO;
  • Adding back direct incremental costs of acquisitions and the IPO, including restructuring costs;
  • Adding back debt issuance costs; and
  • Adjusting for earnings/losses on equity method investments.

25

Notes and Disclosures

Information Regarding Non-GAAP Financial Measures (cont.)

Adjusted Net Income

Adjustments made to GAAP Net Income to calculate Adjusted Net Income, as applicable, are:

  • Adding back other business taxes;
  • Adding back amortization expense on acquisition-related intangible assets;
  • Adding back stock-based compensation expense associated with equity awards issued from pools created in connection with the management-led buyout and various acquisitions and as a result of any equity grants related to the IPO;
  • Adding back direct incremental costs of acquisitions and the IPO, including restructuring costs;
  • Adding back debt issuance costs; and
  • Subtracting an estimate of income tax expense applied to the sum of the adjustments above.

Tax Benefit of Goodwill and Acquired Intangible Assets

Due to Victory Capital's acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide it with additional significant supplemental economic benefit. The tax benefit of goodwill and intangible assets represent the tax benefits associated with deductions allowed for intangible assets and goodwill generated from prior acquisitions in which the Company received a step-up in basis for tax purposes. Acquired intangible assets and goodwill may be amortized for tax purposes, generally over a 15-year period. The tax benefit from amortization on these assets is included to show the full economic benefit of deductions for all acquired intangible assets with a step-up in tax basis.

26

Consolidated Reconciliations of Adjusted EBITDA

For the three months ended,

(in thousands)

9/30/2019

12/31/2019

3/31/2020

6/30/2020

9/30/2020

GAAP Net income

$

25,992

$

37,589

$

57,166

$

44,720

$

55,741

GAAP Income tax expense

(8,058)

(10,854)

(16,823)

(14,487)

(17,027)

GAAP income before taxes

34,050

48,443

73,989

59,207

72,768

Interest expense

18,388

14,852

10,528

8,267

7,497

Depreciation

682

1,130

884

746

814

Other business taxes

146

359

(3,296)

219

256

GAAP amortization of acquisition-related intangibles

7,086

4,490

3,166

3,420

3,122

Stock-based compensation

4,326

5,724

5,372

3,068

2,806

Acquisition, restructuring and exit costs

24,452

24,947

(1,542)

10,105

6,996

Debt issuance costs

10,002

2,387

2,389

1,312

1,386

Earnings/losses from equity method investments

(2,837)

-

-

-

-

Adjusted EBITDA

$

96,295

$

102,332

$

91,490

$

86,344

$

95,645

Revenue (in thousands)

$

214,980

$

218,554

$

204,421

$

181,886

$

188,656

Adjusted EBITDA Margin

44.8%

46.8%

44.8%

47.5%

50.7%

27

Consolidated Reconciliations of Adjusted Net Income

For the three months ended,

(in thousands, except per-share data)

9/30/2019

12/31/2019

3/31/2020

6/30/2020

9/30/2020

GAAP Net Income

$

25,992

$

37,589

$

57,166

$

44,720

$

55,741

Other business taxes

146

359

(3,296)

219

256

GAAP amortization of acquisition-related intangibles

7,086

4,490

3,166

3,420

3,122

Stock-based compensation

4,326

5,724

5,372

3,068

2,806

Acquisition, restructuring and exit costs

24,452

24,947

(1,542)

10,105

6,996

Debt issuance costs

10,002

2,387

2,389

1,312

1,386

Tax effect of above adjustments

(11,503)

(9,477)

(1,522)

(4,531)

(3,642)

Adjusted Net Income

60,501

66,019

61,733

58,313

66,665

Tax benefit of goodwill and acquired intangibles

6,802

6,801

6,728

6,745

6,745

Adjusted Net Income with Tax Benefit

$

67,303

$

72,820

$

68,461

$

65,058

$

73,410

Weighted average shares outstanding - diluted

73,671

73,856

74,350

73,204

73,703

Adjusted Net income with Tax Benefit

Per Diluted Share

$

0.91

$

0.99

$

0.92

$

0.89

$

1.00

28

Detailed Reconciliation of

3Q20 Adjusted Net Income

(in thousands, except per-share amounts)

Adjustments

GAAP

Amortization

of

Tax Benefit

Other

Acquisition-

Acquisition,

Debt

of Goodwill

U.S. GAAP

Business

Related

Stock-Based

Restructuring

Issuance

Total

Non-GAAP

and Acquired

Basis

Taxes

Intangibles

Compensation

and Exit Costs

Costs

Adjustments

Basis

Intangibles

Revenue

Investment management fees

$

137,240

$

-

$

-

$

-

$

-

$

-

$

-

$

137,240

$

-

Fund administration and distribution fees

51,416

-

-

-

-

-

-

51,416

-

Total revenue

188,656

-

-

-

-

-

-

188,656

-

Expenses

Personnel compensation and benefits (1)

47,375

-

-

(2,806)

-

-

(2,806)

44,569

-

Distribution and other asset-based expenses (2)

39,123

-

-

-

-

-

-

39,123

-

General and administrative (2)

13,196

(256)

-

-

(2,563)

48

(2,771)

10,425

-

Depreciation and amortization (2)

3,936

-

(3,122)

-

-

-

(3,122)

814

-

Change in value of consideration payable for

2,000

-

-

-

(2,000)

-

(2,000)

-

-

acquisition of business (2)

Acquisition-related costs (2)

1,148

-

-

-

(1,148)

-

(1,148)

-

-

Restructuring and integration costs (2)

1,285

-

-

-

(1,285)

-

(1,285)

-

-

Total operating expenses

108,063

(256)

(3,122)

(2,806)

(6,996)

48

(13,132)

94,931

-

Income/(loss) from operations

80,593

256

3,122

2,806

6,996

(48)

13,132

93,725

-

Other income (expense)

Interest income and other income/(expense) (3)

1,120

-

-

-

-

-

-

1,120

-

Interest expense and other financing costs (3)

(8,187)

-

-

-

-

738

738

(7,449)

-

Loss on debt extinguishment (3)

(758)

-

-

-

-

696

696

(62)

-

Total other income (expense), net

(7,825)

-

-

-

-

1,434

1,434

(6,391)

-

Income/(loss) before income taxes

72,768

256

3,122

2,806

6,996

1,386

14,566

87,334

-

Income tax (expense)/benefit

(17,027)

(64)

(781)

(702)

(1,749)

(347)

(3,642)

(20,669)

6,745

Net income/(loss)

$

55,741

$

192

$

2,342

$

2,105

$

5,247

$

1,040

$

10,925

$

66,665

$

6,745

=

$

73,410

Earnings per share-basic

$

0.82

$

0.98

$

0.10

Earnings per share-diluted

$

0.76

$

0.91

+

$

0.09

$

1.00

Weighted average shares outstanding-basic

67,743

67,743

67,743

Weighted average shares outstanding-diluted

73,437

73,437

73,437

Memo: Expenses

Personnel (1)

47,375

44,569

Operating (2)

60,688

50,362

Non-Operating (3)

7,825

6,391

29

Detailed Reconciliation of 2Q20 Adjusted Net Income

(in thousands, except per-share amounts)

Adjustments

GAAP

Amortization

of

Other

Acquisition-

Acquisition,

Debt

U.S. GAAP

Business

Related

Stock-Based

Restructuring

Issuance

Total

Basis

Taxes

Intangibles

Compensation

and Exit Costs

Costs

Adjustments

Revenue

Investment management fees

$

130,032

$

-

$

-

$

-

$

-

$

-

$

-

Fund administration and distribution fees

51,854

-

-

-

-

-

-

Total revenue

181,886

-

-

-

-

-

-

Expenses

Non-GAAP

Basis

$ 130,032 51,854

181,886

Tax Benefit

of Goodwill

and Acquired

Intangibles

$-

-

-

Personnel compensation and benefits (1)

49,105

-

-

(3,068)

(595)

-

(3,663)

Distribution and other asset-based expenses (2)

41,630

-

-

-

-

-

-

General and administrative (2)

13,289

(219)

-

-

(1,628)

-

(1,847)

Depreciation and amortization (2)

4,166

-

(3,420)

-

-

-

(3,420)

Change in value of consideration payable for

5,300

-

-

-

(5,300)

-

(5,300)

acquisition of business (2)

Acquisition-related costs (2)

(23)

-

-

-

23

-

23

Restructuring and integration costs (2)

2,605

-

-

-

(2,605)

-

(2,605)

Total operating expenses

116,072

(219)

(3,420)

(3,068)

(10,105)

-

(16,812)

Income/(loss) from operations

65,814

219

3,420

3,068

10,105

-

16,812

Other income (expense)

Interest income and other income/(expense) (3)

2,966

-

-

-

-

-

-

Interest expense and other financing costs (3)

(9,710)

-

-

-

-

755

755

Loss on debt extinguishment (3)

137

-

-

-

-

557

557

Total other income (expense), net

(6,607)

-

-

-

-

1,312

1,312

Income/(loss) before income taxes

59,207

219

3,420

3,068

10,105

1,312

18,124

Income tax (expense)/benefit

(14,487)

(55)

(855)

(767)

(2,526)

(328)

(4,531)

45,442

-

41,630

-

11,442

-

746

-

-

-

-

-

-

-

99,260

-

82,626

-

2,966

-

(8,955)

-

694

-

(5,295)

-

77,331

-

(19,018)

6,745

Net income/(loss)

$

44,720

$

164

$

2,565

$

2,301

$

7,579

$

984

$

13,593

$

58,313

$

6,745

=

$

65,058

Earnings per share-basic

$

0.66

$

0.86

$

0.10

Earnings per share-diluted

$

0.61

$

0.80

+

$

0.09

$

0.89

Weighted average shares outstanding-basic

67,821

67,821

67,821

Weighted average shares outstanding-diluted

73,204

73,204

73,204

Memo: Expenses

Personnel (1)

49,105

45,442

Operating (2)

66,967

53,818

Non-Operating (3)

6,607

5,295

30

Detailed Reconciliation of

1Q20 Adjusted Net Income

(in thousands, except per-share amounts)

Adjustments

GAAP

Amortization

Other

of Acquisition-

Acquisition,

U.S. GAAP

Business

Related

Stock-Based

Restructuring and

Debt Issuance

Total

Non-GAAP

Basis

Taxes

Intangibles

Compensation

Exit Costs

Costs

Adjustments

Basis

Revenue

Investment management fees

$ 146,881

$

-

$ 146,881

Fund administration and distribution fees

57,540

-

57,540

Total revenue

204,421

-

-

-

-

-

-

204,421

Expenses

Personnel compensation and benefits (1)

47,571

(5,372)

(593)

(5,965)

41,606

Distribution and other asset-based expenses (2)

54,860

-

54,860

General and administrative (2)

11,888

3,296

(2,436)

(946)

(86)

11,802

Depreciation and amortization (2)

4,050

(3,166)

(3,166)

884

Tax Benefit of Goodwill and

Acquired

Intangibles

Change in value of consideration payable for acquisition of

(5,500)

5,500

5,500

-

business (2)

Acquisition-related costs (2)

(69)

69

69

-

Restructuring and integration costs (2)

998

(998)

(998)

-

Total operating expenses

113,798

3,296

(3,166)

(5,372)

1,542

(946)

(4,646)

109,152

Income/(loss) from operations

90,623

(3,296)

3,166

5,372

(1,542)

946

4,646

95,269

Other income (expense)

Interest income and other income/(expense) (3)

(4,172)

-

(4,172)

Interest expense and other financing costs (3)

(11,408)

782

782

(10,626)

Loss on debt extinguishment (3)

(1,054)

661

661

(393)

Total other income (expense), net

(16,634)

-

-

-

-

1,443

1,443

(15,191)

Income/(loss) before income taxes

73,989

(3,296)

3,166

5,372

(1,542)

2,389

6,089

80,078

Income tax (expense)/benefit

(16,823)

824

(792)

(1,343)

386

(597)

(1,522)

(18,345)

6,728

Net income/(loss)

$

57,166

$

(2,472)

$

2,375

$

4,029

$

(1,157)

$

1,792

$

4,567

$

61,733

+ $

6,728

= $

68,461

Earnings per share-basic

$

0.84

$

0.91

$

0.10

Earnings per share-diluted

$

0.77

$

0.83

+ $

0.09

= $

0.92

Weighted average shares outstanding-basic

67,790

67,790

67,790

Weighted average shares outstanding-diluted

74,350

74,350

74,350

Memo: Expenses

Personnel (1)

47,571

41,606

Operating (2)

66,227

67,546

Non-Operating (3)

16,634

15,191

31

Detailed Reconciliation of

4Q19 Adjusted Net Income

Adjustments

GAAP

Amortization of

Tax Benefit of

Acquisition-

Acquisition,

Goodwill and

U.S. GAAP

Other Business

Related

Stock-Based

Restructuring and

Debt Issuance

Total

Non-GAAP

Acquired

Basis

Taxes

Intangibles

Compensation

Exit Costs

Costs

Adjustments

Basis

Intangibles

Revenue

Investment management fees

$

158,943

$

-

$

158,943

Fund administration and distribution fees

59,611

-

59,611

Total revenue

218,554

-

-

-

-

-

-

218,554

-

Expenses

Personnel compensation and benefits (1)

54,210

(5,724)

(416)

(6,140)

48,070

Distribution and other asset-based expenses (2)

57,471

-

57,471

General and administrative (2)

14,740

(359)

(2,229)

(2,588)

12,152

Depreciation and amortization (2)

5,620

(4,490)

(4,490)

1,130

Change in value of consideration payable for

19,900

(19,886)

(19,886)

14

acquisition of business (2)

Acquisition-related costs (2)

367

(367)

(367)

-

Restructuring and integration costs (2)

2,049

(2,049)

(2,049)

-

Total operating expenses

154,357

(359)

(4,490)

(5,724)

(24,947)

-

(35,520)

118,837

Income/(loss) from operations

64,197

359

4,490

5,724

24,947

-

35,520

99,717

Other income (expense)

Interest income and other income/(expense) (3)

1,598

-

-

1,598

Interest expense and other financing costs (3)

(14,901)

848

848

(14,053)

Loss on debt extinguishment (3)

(2,451)

1,539

1,539

(912)

Total other income (expense), net

(15,754)

-

-

-

-

2,387

2,387

(13,367)

Income/(loss) before income taxes

48,443

359

4,490

5,724

24,947

2,387

37,907

86,350

Income tax (expense)/benefit

(10,854)

(90)

(1,123)

(1,431)

(6,236)

(597)

(9,477)

(20,331)

6,801

Net income/(loss)

$

37,589

$

269

$

3,367

$

4,293

$

18,711

$

1,790

$

28,430

$

66,019

+

$

6,801 =

$

72,820

Earnings per share-basic

$

0.56

$

0.98

$

0.10

Earnings per share-diluted

$

0.51

$

0.89

+

$

0.09

$

0.99

Weighted average shares outstanding-basic

67,633

67,633

67,633

Weighted average shares outstanding-diluted

73,856

73,856

73,856

Memo: Expenses

Personnel (1)

54,210

48,070

Operating (2)

100,147

70,767

Non-Operating (3)

15,754

13,367

32

Detailed Reconciliation of

3Q19 Adjusted Net Income

Three months ended September 30, 2019

Adjustments

(in thousands, except per-share amounts)

GAAP

Amortization of

Tax Benefit of

Other

Acquisition-

Acquisition,

Debt

Goodwill and

U.S. GAAP

Business

Related

Stock-Based

Restructuring and

Issuance

Total

Non-GAAP

Acquired

Basis

Taxes

Intangibles

Compensation

Exit Costs

Costs

Adjustments

Basis

Intangibles

Revenue

Investment management fees

$

155,406

$

-

$

155,406

Fund administration and distribution fees

59,574

-

59,574

Total revenue

214,980

-

-

-

-

-

-

214,980

Expenses

Personnel compensation and benefits (1)

55,556

(4,326)

(1,205)

(5,531)

50,025

Distribution and other asset-based expenses (2)

57,202

-

57,202

General and administrative (2)

17,654

(146)

(2,020)

(4,340)

(6,506)

11,148

Depreciation and amortization (2)

7,768

(7,086)

(7,086)

682

Change in value of consideration payable for acquisition of

-

-

-

business (2)

Acquisition-related costs (2)

16,386

(16,386)

(16,386)

-

Restructuring and integration costs (2)

4,841

(4,841)

(4,841)

-

Total operating expenses

159,407

(146)

(7,086)

(4,326)

(24,452)

(4,340)

(40,350)

119,057

Income/(loss) from operations

55,573

146

7,086

4,326

24,452

4,340

40,350

95,923

Other income (expense)

Interest income and other income/(expense) (3)

2,742

-

2,742

Interest expense and other financing costs (3)

(16,856)

920

920

(15,936)

Loss on debt extinguishment (3)

(7,409)

4,742

4,742

(2,667)

Total other income (expense), net

(21,523)

-

-

-

-

5,662

5,662

(15,861)

Income/(loss) before income taxes

34,050

146

7,086

4,326

24,452

10,002

46,012

80,062

Income tax (expense)/benefit

(8,058)

(37)

(1,772)

(1,082)

(6,113)

(2,501)

(11,503)

(19,561)

6,802

Net income/(loss)

$

25,992

$

110

$

5,315

$

3,245

$

18,339

$

7,502

$

34,509

$

60,501

+ $

6,802

= $

67,303

Earnings per share-basic

$

0.38

$

0.89

$

0.10

Earnings per share-diluted

$

0.35

$

0.82

+ $

0.09

= $

0.91

Weighted average shares outstanding-basic

67,724

67,724

67,724

Weighted average shares outstanding-diluted

73,671

73,671

73,671

Memo: Expenses

Personnel (1)

55,556

50,025

Operating (2)

103,851

69,032

Non-Operating (3)

21,523

15,861

33

Detailed Reconciliation of Nine-Months 2020 Adjusted Net Income

(in thousands, except per-share amounts)

U.S. GAAP

Basis

Revenue

Investment management fees

$ 414,153

Fund administration and distribution fees

160,810

Total revenue

574,963

Expenses

Personnel compensation and benefits (1)

144,051

Distribution and other asset-based expenses (2)

135,613

General and administrative (2)

38,373

Adjustments

GAAP

Amortization

of

Other

Acquisition-

Acquisition,

Debt

Business

Related

Stock-Based

Restructuring

Issuance

Total

Non-GAAP

Taxes

Intangibles

Compensation

and Exit Costs

Costs

Adjustments

Basis

$

-

$ 414,153

-

160,810

-

-

-

-

-

-

574,963

(11,246)

(1,188)

(12,434)

131,617

-

135,613

2,821

(6,627)

(898)

(4,704)

33,669

Tax Benefit of

Goodwill and

Acquired

Intangibles

Depreciation and amortization (2)

12,152

Change in value of consideration payable for acquisition

1,800

of business (2)

Acquisition-related costs (2)

1,056

Restructuring and integration costs (2)

4,888

Total operating expenses

337,933

Income/(loss) from operations

237,030

Other income (expense)

Interest income and other income/(expense) (3)

(86)

Interest expense and other financing costs (3)

(29,305)

Loss on debt extinguishment (3)

(1,675)

Total other income (expense), net

(31,066)

Income/(loss) before income taxes

205,964

(9,708)

(1,800)

(1,056)

(4,888)

2,821

(9,708)

(11,246)

(15,559)

(898)

(2,821)

9,708

11,246

15,559

898

2,275

1,914

-

-

-

-

4,189

(2,821)

9,708

11,246

15,559

5,087

(9,708)

2,444

(1,800)

-

(1,056)

-

(4,888)

-

(34,590)

303,343

34,590

271,620

-

(86)

2,275

(27,030)

1,914

239

4,189

(26,877)

38,779

244,743

Income tax (expense)/benefit

(48,337)

Net income/(loss)

$

157,627

Earnings per share-basic

$

2.33

Earnings per share-diluted

$

2.14

Weighted average shares outstanding-basic

67,785

Weighted average shares outstanding-diluted

73,703

Memo: Expenses

Personnel (1)

144,051

Operating (2)

193,882

Non-Operating (3)

31,066

705

(2,427)

(2,812)

(3,890)

(1,272)

(9,695)

(58,032)

20,218

$

(2,116)

$

7,281

$

8,435

$

11,669

$

3,815

$

29,084

$

186,711 +

$

20,218

= $

206,929

$

2.75

$

0.30

$

2.53

+

$

0.27

=

$

2.81

67,785

67,785

73,703

73,703

131,617

171,726

26,877

34

Detailed Reconciliation of

Nine-Months 2019 Adjusted Net Income

Nine months ended September 30, 2019

(in thousands, except per-share amounts)

Adjustments

GAAP

Amortization

Tax Benefit of

Other

of Acquisition-

Acquisition,

Goodwill and

U.S. GAAP

Business

Related

Stock-Based

Restructuring and

Debt Issuance

Total

Non-GAAP

Acquired

Basis

Taxes

Intangibles

Compensation

Exit Costs

Costs

Adjustments

Basis

Intangibles

Revenue

Investment management fees

$

307,859

$

-

$

307,859

Fund administration and distribution fees

85,960

-

85,960

Total revenue

393,819

-

-

-

-

-

-

393,819

Expenses

Personnel compensation and benefits (1)

125,599

(9,125)

(1,205)

(10,330)

115,269

Distribution and other asset-based expenses (2)

89,151

-

89,151

General and administrative (2)

31,828

(1,125)

(2,020)

(4,340)

(7,485)

24,343

Depreciation and amortization (2)

18,253

(16,388)

(16,388)

1,865

Change in value of consideration payable for acquisition of

(14)

(14)

business (2)

Acquisition-related costs (2)

21,950

(21,950)

(21,950)

-

Restructuring and integration costs (2)

6,629

(6,629)

(6,629)

-

Total operating expenses

293,396

(1,125)

(16,388)

(9,125)

(31,804)

(4,340)

(62,782)

230,614

Income/(loss) from operations

100,423

1,125

16,388

9,125

31,804

4,340

62,782

163,205

Other income (expense)

Interest income and other income/(expense) (3)

5,231

-

5,231

Interest expense and other financing costs (3)

(26,000)

1,650

1,650

(24,350)

Loss on debt extinguishment (3)

(7,409)

4,742

4,742

(2,667)

Total other income (expense), net

(28,178)

-

-

-

-

6,392

6,392

(21,786)

Income/(loss) before income taxes

72,245

1,125

16,388

9,125

31,804

10,732

69,174

141,419

Income tax (expense)/benefit

(17,343)

(281)

(4,097)

(2,281)

(7,951)

(2,683)

(17,293)

(34,636)

13,523

Net income/(loss)

$

54,902

$

844

$

12,291

$

6,844

$

23,853

$

8,049

$

51,881

$

106,783

+

$

13,523

= $

120,306

Earnings per share-basic

$

0.81

$

1.58

$

0.20

Earnings per share-diluted

$

0.75

$

1.46

+

$

0.18

= $

1.64

Weighted average shares outstanding-basic

67,610

67,610

67,610

Weighted average shares outstanding-diluted

73,300

73,300

73,300

Memo: Expenses

Personnel (1)

125,599

115,269

Operating (2)

167,797

115,345

Non-Operating (3)

28,178

21,786

35

Notes and Disclosures

Investing involves risk, including the potential loss of principal. There are no assurances that any fund will achieve its stated objective. All data in this presentation, unless otherwise noted, is as of September 30, 2020.

Past performance does not guarantee future results. A fund's most recent performance can be found at vcm.com. 59 mutual funds and ETFs did not have 4- or 5- star overall ratings. 33% of AUM in mutual funds and ETFs did not receive overall rating of 4 or 5 stars.

Consider the investment objectives, risks, charges and expenses of the funds and the USAA 529 College Savings Plan (Plan) carefully before investing. Visit vcm.com/prospectus for a Mutual Fund or ETF prospectus or summary prospectus or for a Plan Description and Participation Agreement containing this and other important information about the Funds and Plan. Read it carefully

before investing. You should compare the Plan with any 529 Plan offered by your home state or your beneficiary's home state and consider, before investing, any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in the home state's plan.

Victory Capital means Victory Capital Management Inc., the investment adviser of the Victory Capital mutual funds, USAA Mutual Funds, VictoryShares ETFs, VictoryShares USAA ETFs, and USAA 529 College Savings Plan (Plan). Victory Capital mutual funds, USAA Mutual Funds, and the Plan are distributed by Victory Capital Services, Inc. (VCS), an affiliate of Victory Capital. VictoryShares ETFs and VictoryShares USAA ETFs are distributed by Foreside Fund Services, LLC (Foreside). VCS and Foreside are members of FINRA. VCS and Victory Capital are not affiliated with Foreside. USAA is not affiliated with Foreside, Victory Capital, or VCS. USAA and the USAA logos are registered trademarks and the USAA Mutual Funds, USAA Investments, and the Plan logos are trademarks of United Services Automobile Association and are being used by Victory Capital and its affiliates under license. Use of the term "member" or "membership" refers to membership in USAA Membership Services and does not convey any legal or ownership rights in USAA.

The Morningstar Rating for funds, or "star rating," is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-,five-, and ten-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% ten-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the ten-year overall star rating formula seems to give the most weight to the ten-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings may reflect fee waivers in effect; in their absence, ratings may have been lower.

36

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Victory Capital Holdings Inc. published this content on 05 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 November 2020 14:06:06 UTC