Velocity Financial, Inc. Announces Fourth Quarter and Full Year 2020 Results

Fourth Quarter Highlights:

  • Net income and core income(1) of $9.6 million and diluted EPS of $0.29
    - Net income growth of 175% from the prior quarter driven by gains from the sale of newly originated loans and improved net interest margin
  • 4Q20 loan production volume totaled $179.3 million, driven by strong demand
  • Book value per common share as of December 31, 2020, was $10.93 compared to $10.44 as of September 30, 2020
  • Portfolio net interest margin of 4.07%, an increase of 30 basis points (bps) from 3Q20, driven by improved loan yields and lower portfolio debt costs
  • Resolutions in 4Q20 were 103.5% of assets resolved, continuing our consistent track record of net gains over and above contractual principal and interest due
  • Nonaccrual loans totaled $332.8 million as of December 31, 2020, up from $314.7 million as of September 30, 2020, driven by the continuing impacts of the pandemic

Full-year 2020 Highlights:

  • Net income of $17.8 million, an increase of 3% from $17.3 million in 2019
  • Total production of $435.0 million UPB
    - Loan production activities in 2020 were adversely impacted by the COVID-19 pandemic, resulting in the suspension of loan production operations from March 2020 to September 2020
  • Portfolio net interest margin of 3.89%, a decrease of 24 bps from 4.13% in 2019
  • Completed Initial Public Offering (IPO) in January
  • Completed three securitizations totaling $524.4 million during the pandemic, which demonstrated our extensive track record of performance
  • Issued 45,000 shares of Preferred Stock and Warrants, with proceeds used to pay down warehouse debt and to originate new loans

WESTLAKE VILLAGE, Calif.--()--Velocity Financial, Inc. (NYSE: VEL) (“Velocity” or the “Company”) reported net income and core income of $9.6 million for the fourth quarter of 2020 and diluted earnings per common share of $0.29. Book value per common share was $10.93, an increase from $10.44 as of December 31, 2020.

“The fourth quarter marked a significant turning point in the Company’s emergence from the effects of the pandemic,” said Chris Farrar, President and CEO. “The excellent operating results reflect the strength of our business model, despite unprecedented economic stress in 2020. I am proud of our team’s return to increasing production levels and the ongoing positive resolution of delinquent loans. We have continued to drive momentum in our production activities as we move into 2021, and looking forward, we expect to organically grow originations and opportunistically evaluate other areas to deploy capital profitably.”

Fourth Quarter Operating Results

KEY PERFORMANCE INDICATORS  
($ in thousands)

4Q 2020

 

3Q 2020

$ Variance % Variance
Pretax income

$ 11,753

 

$ 5,025

$ 6,728

134%

Net income

$ 9,576

 

$ 3,481

$ 6,095

175%

Diluted earnings (loss) per share

$ 0.29

 

$ 0.11

$ 0.18

165%

Core Income(1)

$ 9,576

 

$ 3,913

$ 5,663

145%

Pretax return on equity

21.82%

 

9.60%

n.a.

127%

Return on equity

17.78%

 

6.60%

n.a.

169%

Net interest margin - portfolio

4.07%

 

3.77%

n.a.

8%

Net interest margin -total company

3.68%

 

3.39%

n.a.

9%

Operating Margin

52.24%

 

29.75%

n.a.

76%

Average common equity

$ 215,489

 

$ 209,468

$ 6,021

3%

   

(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:

  • 4Q20 net income totaled $9.6 million, an increase from $3.5 million in 3Q20, and reflects improved portfolio income and gain on the sale of newly originated loans

‒ Gain on loan sales in 4Q20 totaled $4.7 million (105% of UPB). There were no loan sales in 3Q20

  • Net interest margin increased 30 bps from 3Q20, driven by growth in realization of delinquent/default interest on nonperforming loans and prepayment fees, along with lower portfolio related debt costs
TOTAL LOAN PORTFOLIO  
($ of UPB in millions)

4Q 2020

 

3Q 2020

$ Variance % Variance
Held for Investment  
Investor 1-4 Rental

$ 959

 

$ 1,008

$ (49)

(5)%

Mixed Use

259

 

254

5

2%

Multi-Family

182

 

187

(5)

(3)%

Retail

172

 

173

(1)

(0)%

All Other

360

 

364

(4)

(1)%

Total

$ 1,932

 

$ 1,986

$ (54)

(7)%

Held for Sale  
Investor 1-4 Rental

$ 13

 

$ -

$ 13

n.m.
Total Managed Loan Portfolio UPB

$ 1,945

 

$ 1,986

$ (42)

(2)%

Key loan portfolio metrics:  
Total loan count

5,878

 

6,029

Weighted average loan to value

66.13%

 

66.18%

Weighted average total portfolio yield

8.40%

 

8.21%

Weighted average portfolio debt cost

4.97%

 

5.07%

n.m. - non meaningful  

Discussion of results:

  • Velocity’s total loan portfolio was $1.9 billion as of December 31, 2020, a 2% quarter-over-quarter decrease from September 30, 2020

‒ Driven by loan sales of $96.3 million in UPB and higher prepayment activity

  • The weighted average total portfolio yield was 8.40% in 4Q20, an increase of 19 bps from 3Q20, primarily driven by the increased realization of nonperforming/default interest and prepayment fees
  • The 10 bps decrease in portfolio related debt cost was attributable to the relatively faster paydown of 2020-2-MC1 securitization, which is the Company’s only outstanding securitization collateralized primarily by short-term loans
LOAN PRODUCTION VOLUMES  
($ in millions)

4Q 2020

 

3Q 2020

$ Variance % Variance
Investor 1-4 Rental

$ 129

 

$ 6

n.m. n.m.
Traditional Commercial

50

 

2

n.m. n.m.
Total loan production

$ 179

 

$ 8

n.m. n.m.
n.m. - non meaningful  

Discussion of results:

  • The fourth quarter was Velocity’s first full quarter of production since the Company suspended originations in mid-March, funding $179.3 million in UPB of 30-year Investor 1-4 and Traditional Commercial loans
  • Loan production in 1Q21 through February 28, 2021, totaled $125.5 million in UPB
CREDIT PERFORMANCE INDICATORS  
($ in thousands)

4Q 2020

 

3Q 2020

$ Variance % Variance
Nonperforming loans(1)

$ 332,813

 

$ 314,727

$ 18,086

6%

Nonperforming loans % total HFI Loans

17.23%

 

15.84%

n.a.

9%

Total Charge Offs(2)

$ 308

 

$ 1,046

$ (738)

(71)%

Charge-offs as a % of HFI loans

0.016%

 

0.053%

n.a.

(70)%

Loan Loss Reserve

$ 5,845

 

$ 5,748

$ 97

2%

   

(1) Nonperforming/Nonaccrual loans include loans 90+ days past due, loans in foreclosure, bankruptcy and on nonaccrual.

(2) $788 thousand of 3Q 2020 is related to an unusual and nonrecurring event.

Discussion of results:

  • Nonperforming loans as a percent of total HFI loans as of December 31, 2020, increased to 17.23% from 15.84% as of September 30, 2020, mainly driven by modified COVID forbearance loans that became delinquent
  • Charge-offs in 4Q20 totaled $308.4 thousand, in-line with our historical average

‒ The prior quarter’s charge-offs included $787.3 thousand resulting from an unusual circumstance on a single loan

  • The reserve for loan losses as of December 31, 2020, was $5.8 million, a 2% increase from September 30, 2020, reflecting continued low actual credit losses despite higher levels of nonperforming loans

‒ Low LTVs and considerable expertise in loan resolutions through Velocity’s in-house special servicing team helps minimize losses

NET REVENUES  
($ in thousands)

4Q 2020

 

3Q 2020

$ Variance % Variance
Interest income

$ 41,556

 

$ 41,374

$ 182

0%

Interest expense - portfolio related

(21,442)

 

(22,347)

905

(4)%

Interest expense - corporate debt

(1,900)

 

(1,913)

13

(1)%

Net Interest Income

$ 18,214

 

$ 17,114

$ 1,100

6%

Loan loss provision

(406)

 

(1,573)

1,167

(74)%

Gain on loan sales

4,855

 

(51)

4,906

n.m.
Other Operating (loss) income

(164)

 

1,400

(1,564)

(112)%

Total Net Revenues

$ 22,499

 

$ 16,890

$ 5,609

33%

n.m. - non meaningful  

Discussion of results:

  • Net Revenue grew by 33% quarter-over-quarter, driven by sales of newly originated loans and increased net interest income
  • Lower loan loss provision reflects continued low losses on delinquent loans and stabilization of macroeconomic conditions
OPERATING EXPENSES  
($ in thousands)

4Q 2020

 

3Q 2020

$ Variance % Variance
Compensation and employee benefits

$ 4,135

 

$ 5,692

$ (1,557)

(27)%

Rent and occupancy

424

 

415

9

2%

Loan servicing

1,977

 

2,168

(191)

(9)%

Professional fees

1,415

 

1,051

364

35%

Real estate owned, net

217

 

898

(681)

(76)%

Other expenses

2,578

 

1,641

937

57%

Total expenses

$ 10,746

 

$ 11,865

$ (1,119)

(9)%

Discussion of results:

  • Operating expenses decreased 9% quarter-over-quarter due to deferred direct loan origination costs attributable to new originations, partially offset by legal costs related to the successful defense of a class-action lawsuit
SECURITIZATIONS      
  Securities   Balance at   Balance at  
Trusts   Issued   12/31/2020   W.A. Rate 9/30/2020   W.A. Rate
2011-1 Trust  

$ 61,042

 

$ -

 

-

$ -

 

-

2014-1 Trust  

161,076

 

23,391

 

7.46%

25,599

 

6.97%

2015-1 Trust  

285,457

 

36,966

 

7.20%

41,190

 

7.52%

2016-1 Trust  

319,809

 

57,963

 

7.78%

62,339

 

7.54%

2016-2 Trust  

166,853

 

45,195

 

6.63%

46,984

 

6.40%

2017-1 Trust  

211,910

 

72,910

 

5.31%

80,174

 

5.08%

2017-2 Trust  

245,601

 

129,478

 

3.42%

138,456

 

3.34%

2018-1 Trust  

176,816

 

102,063

 

4.04%

110,262

 

4.02%

2018-2 Trust  

307,988

 

200,451

 

4.48%

208,206

 

4.51%

2019-1 Trust  

235,580

 

181,579

 

4.01%

192,856

 

4.05%

2019-2 Trust  

207,020

 

158,199

 

3.48%

168,819

 

3.42%

2019-3 Trust  

154,419

 

127,045

 

3.26%

132,893

 

3.25%

2020-1 Trust  

248,700

 

220,052

 

2.83%

233,005

 

2.84%

2020-2 Trust  

96,352

 

109,832

 

4.55%

94,113

 

4.48%

2020-MC1 Trust  

179,371

 

137,794

 

4.50%

162,173

 

4.50%

 

$ 3,057,994

 

$ 1,602,917

 

$ 1,697,069

 
         

Discussion of results:

  • Securitization balances outstanding $1.6 billion as of December 31, 2020, down from $1.7 billion at the end of the prior quarter, driven by paydown of the 2020-MC1 securitization collateralized primarily with short-term loans
  • No new securitizations were issued during 4Q20. The Company’s next securitization is expected to be issued during 2Q21
RESOLUTION ACTIVITY FOURTH QUARTER 2020 THIRD QUARTER 2020
($ in thousands) UPB $   Gain / (Loss) $ UPB $   Gain / (Loss) $
Paid in full

$ 16,370

 

$ 115

$ 9,705

 

$ 728

Paid current

13,414

 

880

1,152

 

24

REO sold

237

 

69

1,628

 

(312)

$ 30,022

 

$ 1,063

$ 12,485

 

$ 439.9

     
Resolutions as a % of nonperforming UPB  

103.5%

 

103.5%

Discussion of results:

  • Strong asset resolution trends continued in 4Q20, realizing gains of $1.1 million, or 103.5% of nonperforming UPB resolved, compared to $439.9 thousand in the prior quarter.

Full Year 2020 Results

  • Net income totaled $17.8 million, a 3% year-over-year increase from $17.3 million in the prior year
  • Loss per common share of $(1.55), resulting from a non-cash deemed dividend on preferred stock issued in 2Q20

‒ The preferred stock deemed dividend reduced common stockholders’ equity and correspondingly increased preferred stock under mezzanine equity, resulting in a non-cash loss per common share for the 12-months ended December 31, 2020

  • Pretax income of $23.1 million, a 9% decrease from $25.4 million in the prior year primarily driven by a $10.5 million increase in operating expenses resulting primarily from higher compensation and employee benefits related to the suspension of loan production activities. The increase in expenses was partially offset by an $8.4 million increase in net interest income.
  • Total net interest income was $67.4 million, a 14% increase from $59.0 million in the prior year, driven by a 15% increase in average loans outstanding that was partially offset by a 24 bps decrease in net interest margin.
  • Total loan production of $435.0 million in UPB, down from $1.0 billion in UPB in the prior year

‒ Loan production activities in 2020 were adversely impacted by the COVID-19 pandemic, resulting in the suspension of loan production operations from March 2020 to September 2020

‒ Loan production since the resumption of operations is comprised of long-term Investor 1-4 Rental and Traditional Commercial loans

  • Charge-offs for the year totaled $1.6 million, a 176% increase from $579.1 thousand in 2019

‒ Charge-offs in 2020 included a single loan charge-off of $788.3 thousand, resulting from an unusual and nonrecurring event. Adjusted charge-offs for the year ended December 31, 2020, totaled $812.7 thousand.

  • Total operating expenses were $45.6 million, a 30% increase from $35.1 million in the prior year. The increase was primarily driven by higher compensation and employee benefits related to the suspension of loan production activities.
  • Pretax return on equity was 11%, and decreased from 17% in the prior year, and reflects the resilience of Velocity’s business model in the face of extreme and unprecedented impacts from the pandemic

Webcast Information

Velocity’s executive management team will host a conference call and webcast to review its financial results on Tuesday, March 16, 2021, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time.

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 Tuesday, March 16, 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 1-866-807-9684 in the U.S. and Canada and 1-412-317-5415 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 March 23, 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 #10152720. 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 15 years.

(1) Core Income is a non-GAAP financial measure 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
12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019
Audited Unaudited Unaudited Unaudited Audited
(In thousands)
Assets
Cash and cash equivalents

$ 13,273

$ 19,210

$ 9,803

$ 7,649

$ 21,465

Restricted cash

7,020

7,821

6,735

4,483

6,087

Loans held for sale, net

13,106

0

212,344

223,123

214,467

Loans held for investment, at fair value

1,539

3,327

2,956

2,987

2,960

Loans held for investment

1,948,089

2,001,086

1,861,819

1,922,485

1,863,360

Total loans, net

1,962,734

2,004,413

2,077,119

2,148,595

2,080,787

Accrued interest receivables

11,373

13,134

17,793

14,470

13,295

Receivables due from servicers

71,044

44,466

36,028

37,884

49,659

Other receivables

4,085

402

4,609

2,516

4,778

Real estate owned, net

15,767

14,653

15,648

16,164

13,068

Property and equipment, net

4,145

4,446

4,718

4,964

4,680

Deferred tax asset

6,654

1,832

5,556

10,111

8,280

Other assets

6,779

16,489

9,042

10,519

12,667

Total Assets

$ 2,102,874

$ 2,126,866

$ 2,187,051

$ 2,257,354

$ 2,214,766

 
Liabilities and members' equity
Accounts payable and accrued expenses

$ 63,361

$ 61,859

$ 55,938

$ 58,591

$ 56,146

Secured financing, net

74,982

74,776

74,571

74,364

145,599

Securitizations, net

1,579,019

1,670,930

1,599,719

1,576,431

1,438,629

Warehouse & repurchase facilities

75,923

19,541

160,796

297,537

421,548

Total Liabilities

1,793,285

1,827,106

1,891,024

2,006,924

2,061,922

 
Mezzanine Equity
Series A Convertible preferred stock

90,000

90,000

90,000

-

-

Stockholders' Equity
Stockholders' equity

219,589

209,760

206,027

250,430

152,844

Total Liabilities and members' equity

$ 2,102,874

$ 2,126,866

$ 2,187,051

$ 2,257,354

$ 2,214,766

 
 
Book value per share

$ 10.93

$ 10.44

$ 10.26

$ 12.47

n.a.
 
Shares outstanding

20,087

20,087

20,087

20,087

n.a.

Velocity Financial, LLC

Consolidated Statements of Income (Quarterly)

 
Quarter Ended
Quarter Ended
($ in thousands) 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019
Audited Unaudited Unaudited Unaudited Audited
 
Revenues
Interest income

$ 41,556

$ 41,374

$ 39,755

$ 44,637

$ 44,124

Interest expense - portfolio related

21,442

22,347

21,189

22,848

22,689

Net interest income - portfolio related

20,114

19,027

18,566

21,789

21,435

Interest expense - corporate debt

1,900

1,913

1,894

6,342

4,070

Net interest income

18,214

17,114

16,672

15,447

17,365

Provision for loan losses

406

1,573

1,800

1,289

242

Net interest income after provision for loan losses

17,808

15,541

14,872

14,157

17,123

Other operating income (expense)

4,691

1,349

(1,339)

1,620

833

Total net revenues

22,499

16,890

13,533

15,777

17,956

 
Operating expenses
Compensation and employee benefits

4,135

5,692

5,863

5,041

3,992

Rent and occupancy

424

415

448

455

426

Loan servicing

1,977

2,168

1,754

2,239

1,939

Professional fees

1,415

1,051

588

1,184

469

Real estate owned, net

217

898

408

1,134

1,300

Other operating expenses

2,578

1,641

1,847

1,998

1,688

Total operating expenses

10,746

11,865

10,908

12,050

9,814

Income before income taxes

11,753

5,025

2,625

3,727

8,142

Income tax expense

2,177

1,544

484

1,148

2,960

Net income

$ 9,576

$ 3,481

$ 2,141

$ 2,579

$ 5,182

Less deemed dividends on preferreds stock

$ 48,955

Net loss allocated to common shareholders

$ (46,814)

 
Basic earnings (loss) per share

$ 0.48

$ 0.17

$ (2.33)

$ 0.13

n.a.
 
Diluted earnings (loss) per common share

$ 0.29

$ 0.11

$ (2.33)

$ 0.13

n.a.
 
Basic weighted average common shares outstanding

20,087

20,087

20,087

20,087

n.a.
 
Diluted weighted average common shares outstanding

32,793

32,435

20,087

20,087

n.a.

Velocity Financial, LLC

Consolidated Statements of Income(Annual)

 
 
Year Ended
($ in thousands) 12/31/2020 12/31/2019 12/31/2018
Audited Audited Audited
 
Revenues
Interest income

$ 167,322

$ 157,531

$ 124,722

Interest expense - portfolio related

87,826

83,903

62,597

Net interest income - portfolio related

79,496

73,628

62,125

Interest expense - corporate debt

12,049

14,618

13,322

Net interest income

67,447

59,010

48,803

Provision for loan losses

5,068

1,139

201

Net interest income after provision for loan losses

62,379

57,871

48,602

Other operating income (expense)

6,320

2,649

2,807

Total net revenues

68,699

60,520

51,409

 
Operating expenses
Compensation and employee benefits

20,731

15,511

15,105

Rent and occupancy

1,743

1,531

1,320

Loan servicing

7,802

7,396

6,009

Professional fees

4,238

2,056

3,040

Real estate owned, net

2,656

2,647

1,373

Other operating expenses

8,400

5,981

5,313

Total operating expenses

45,570

35,122

32,160

Income before income taxes

23,129

25,398

19,249

Income tax expense

5,352

8,106

11,618

Net income

$ 17,777

$ 17,292

$ 7,631

Less deemed dividends on preferreds stock

$ 48,955

Net loss allocated to common shareholders

$ (31,178)

 
Basic earnings (loss) per share

$ (1.55)

n.a. n.a.
 
Diluted earnings (loss) per common share

$ (1.55)

n.a. n.a.
 
Basic weighted average common shares outstanding

20,087

n.a. n.a.
 
Diluted weighted average common shares outstanding

20,087

Velocity Financial, Inc.

Net Interest Margin — Portfolio Related and Total Company

(Unaudited)

 

Quarter Ended December 31, 2020 Quarter Ended September 30, 2020 Quarter Ended December 31, 2019
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

$

20,719

$

-

$

184,021

Loans held for investment

 

1,958,436

 

2,016,414

 

1,800,507

Total loans

$

1,979,155

$

41,557

8.40

%

$

2,016,414

$

41,374

8.21

%

 

1,984,528

$

$

44,124

8.89

%

 
Debt:
Warehouse and repurchase facilities

$

60,065

 

717

4.78

%

$

22,306

 

703

12.61

%

 

320,456

$

 

4,223

Securitizations

 

1,666,180

 

20,726

4.98

%

 

1,742,669

 

21,645

4.97

%

 

1,495,456

 

18,467

Total debt - portfolio related

 

1,726,245

 

21,443

4.98

%

 

1,764,975

 

22,348

5.07

%

 

1,815,912

 

22,690

5.00

%

Corporate debt

 

78,000

 

1,900

9.74

%

 

78,000

 

1,913

9.81

%

 

153,000

 

4,069

Total debt

$

1,804,245

$

23,343

5.18

%

$

1,842,975

$

24,261

5.27

%

 

1,968,912

$

 

26,759

5.44

%

 
Net interest spread - portfolio related (1)

3.42

%

3.14

%

3.90

%

Net interest margin - portfolio related

4.07

%

3.77

%

4.32

%

 
Net interest spread - total company (2)

3.22

%

2.94

%

3.46

%

Net interest margin - total company

3.68

%

3.39

%

3.50

%

 
(1) 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.
(2) Net interest spread - total company is the difference between the yield 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) 12/31/2020 9/30/2020 6/30/2020 3/31/2020
 
Net Income

$ 9,576

$ 3,481

$ 2,141

$ 2,579

One-time Debt Amortization & Expenses

-

-

-

2,610

COVID-19 Impact

-

-

1,267

615

Workforce reduction costs

-

432

-

-

"Core" Income

$ 9,576

$ 3,913

$ 3,408

$ 5,804

 

 

Contacts

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

Contacts

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