Velocity Financial, Inc. Corrects Typographical Error in Fourth Quarter and Full-Year 2023 Results

Rhea-AI Summary

Velocity Financial, Inc. (NYSE:VEL) released its Q4 and full-year 2023 results, noting a typographical error in the earnings release. The corrected ratio shows a Recourse debt to equity ratio of 1.2 times.

Insights

Financial Analyst

The correction from 'Non-recourse' to 'Recourse' debt to equity ratio is a significant detail that investors and analysts use to assess a company's financial leverage and risk profile. Recourse debt allows lenders to pursue the borrower's other assets if the collateral does not cover the debt value, implying a higher risk for the company. This adjustment in the earnings release can influence the perceived creditworthiness of Velocity Financial, Inc. and may affect investor sentiment. A debt to equity ratio of 1.2 times is within a reasonable range for many industries, but the specific impact on the company's stock would depend on the norms within the financial sector and the company's historical ratios.

Risk Management Expert

Understanding the distinction between recourse and non-recourse debt is crucial in risk assessment. The original misstatement could have led stakeholders to underestimate the potential liabilities of Velocity Financial, Inc. The corrected information provides a clearer picture of the company's obligations and the risks to which equity holders are exposed. Stakeholders should reassess their risk models and consider the implications of the company's actual leverage. It is also important to evaluate the company's history of reporting accuracy, as frequent errors could undermine confidence in management's transparency and reliability.

WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)-- Velocity Financial, Inc. (NYSE:VEL) (“Velocity” or “Company”), filed its fourth quarter and full year 2023 results on March 7, 2024. It has recently come to management’s attention that the earnings release contained a typographical error.

The ninth bullet under Fourth Quarter Highlights stated:

• Non-recourse debt to equity ratio of 1.2 times

The ninth bullet, as corrected, should read as follows:

• Recourse debt to equity ratio of 1.2 times

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 19 years.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240308886811/en/

Investors and Media:

Chris Oltmann

(818) 532-3708

Source: Velocity Financial, Inc.

FAQ

What were the key highlights of Velocity Financial, Inc.'s Q4 and full-year 2023 results?

Velocity Financial, Inc. (NYSE:VEL) reported a typographical error in its earnings release, correcting the Non-recourse debt to equity ratio to a Recourse debt to equity ratio of 1.2 times.

When did Velocity Financial, Inc. file its Q4 and full-year 2023 results?

Velocity Financial, Inc. (NYSE:VEL) filed its fourth quarter and full year 2023 results on March 7, 2024.

What was the error in the earnings release of Velocity Financial, Inc. regarding debt to equity ratio?

The ninth bullet under Fourth Quarter Highlights in the earnings release of Velocity Financial, Inc. stated Non-recourse debt to equity ratio instead of Recourse debt to equity ratio.