Velocity Financial, Inc. Reports Fourth Quarter and Full-Year 2021 Results
Velocity Financial, Inc. (NYSE: VEL) reported strong financial performance for 4Q21, with a net income of $8.4 million and diluted EPS of $0.24, reflecting a solid increase compared to 3Q21. The company achieved a record loan production volume of $497.8 million, a 46.1% quarter-over-quarter increase. Core net income rose 25.7% to $10.1 million, driven by growth in the held-for-investment loan portfolio, which increased 10.1% year-over-year to $2.5 billion. However, the portfolio net interest margin decreased to 4.27% from 4.97% in 3Q21, impacted by the collapse of higher-cost securitizations.
- Net income increased to $8.4 million in 4Q21, up from $8.0 million in 3Q21.
- Record loan production of $497.8 million in unpaid principal balance (UPB), a 46.1% increase from 3Q21.
- Core net income rose to $10.1 million, a 25.7% increase quarter-over-quarter.
- Held-for-investment loans increased to $2.5 billion, a 10.1% rise from 3Q21.
- Acquired a majority stake in Century Health & Housing Capital for $12.8 million, diversifying offerings.
- Net interest margin decreased to 4.27% from 4.97% in 3Q21, due to high-cost securitization collapses.
- Book value per common share dropped to $10.84 from $12.05 after preferred stock conversion.
Fourth Quarter Highlights:
-
Net Income of
$8.4 million $0.24 $8.0 million $0.23 -
Core net income(1) of
$10.1 million $0.29 $8.0 million $0.23 -
Loan production volume of
$497.8 million 46.1% from 3Q21 -
Loans held for investment (HFI) UPB of
$2.50 billion December 31, 2021 , an increase of10.1% fromSeptember 30, 2021 -
Nonaccrual loans as a percentage of HFI loans was
10.9% as ofDecember 31, 2021 , down from12.7% as ofSeptember 30, 2021 -
Resolutions of nonperforming loans (NPL) totaled
$44.1 million 104.0% of UPB resolved -
Portfolio net interest margin (NIM) of
4.27% , down from4.97% in 3Q21. Includes$1.5 million -
Completed the conversion of all 45,000 outstanding shares of the Company’s Series A Convertible Preferred Stock into 11,688,310 shares of Velocity common stock
‒ Reclassed$90 million -
Acquired a majority stake in
Century Health & Housing Capital, LLC (“Century”) for$12.8 million -
Completed two new securitizations of Velocity’s business purpose loans:
‒ VCC 2021-3, totaling$204.2 million
‒ VCC 2021-4, totaling$319.1 million $233.1 million $86.0 million -
Book value per common share of
$10.84 December 31, 2021 , a decrease from$12.05 September 30, 2021 , driven by the increase in common shares outstanding resulting from the preferred stock conversion
Full-Year Highlights:
-
Loan production in 2021 totaled
$1.3 billion $435.0 million -
Charge-offs in 2021 totaled
$1.3 million 19.3% decrease from$1.6 million -
Net income totaled
$29.2 million 64.4% increase from$17.8 million -
Diluted EPS of
$0.86 $(1.55) -
Core net income(1) totaled
$33.3 million 46.6% increase from$22.7 million -
Core diluted EPS of
$0.98 $1.13
“We delivered outstanding fourth quarter and full-year 2021 results that reflect strong operational execution from our production operations and investments in technology-driven efficiency gains,” said
“We are optimistic that the strong momentum we developed in 2021 positions us well for 2022. The acquisition of
Fourth Quarter Operating Results |
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| KEY PERFORMANCE INDICATORS | ||||||
| ($ in thousands) | 4Q 2021 |
3Q 2021 |
$ Variance |
% Variance |
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| Pretax income |
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|
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| Net income |
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|
|
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| Diluted earnings per share |
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| Core net income(a) |
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| Core diluted earnings per share(a) |
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|
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| Pretax return on equity(b) |
|
|
n.a. | (24.5)% |
||
| Net interest margin - portfolio |
|
|
n.a. | (14.0)% |
||
| Net interest margin - total company |
|
|
n.a. | (12.1)% |
||
| Average common equity |
|
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|
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| (a) Core income is a non-GAAP measure. Please see the reconciliation to GAAP net income at the end of this release. |
| (b) 4Q21 pretax ROE reflects the conversion of Velocity’s preferred equity into common equity during the quarter. |
Discussion of results:
- Higher net income in 4Q21 reflects strong growth in our HFI loan portfolio driven by record production volume in the second half of 2021, in addition to our special servicing team’s effective loan resolution activities that have resulted in many borrowers returning to performing status
-
Core net income(1) was
$10.1 million 25.7% quarter-over-quarter increase from the prior quarter. Core net income reflects after-tax adjustments of$1.1 million $0.6 million
‒ Management uses Core Net Income(1) as a measure of normal, recurring operational performance
-
Portfolio NIMin 4Q21 was
4.27% , a 70 bps decrease from 3Q21. The decrease was driven by the collapse of three higher-cost VCC securitizations and a lower weighted average rate on loans originated in 4Q21
‒ The portfolio weighted average coupon as of the end of 4Q21 was
-
The pretax return on equity was
13.8% in 4Q21, down from18.2% in 3Q21. The decrease resulted from the conversion of Velocity’s preferred equity into common equity in early October.
| TOTAL LOAN PORTFOLIO | ||||||
| ($ of UPB in millions) | 4Q 2021 |
3Q 2021 |
$ Variance |
% Variance |
||
| Held for Investment | ||||||
| Investor 1-4 Rental |
|
|
|
|
||
| Mixed Use | 331 |
302 |
28 |
|
||
| Multi-Family | 228 |
203 |
25 |
|
||
| Retail | 234 |
197 |
37 |
|
||
| Warehouse | 173 |
151 |
22 |
|
||
| All Other | 309 |
268 |
41 |
|
||
| Total |
|
|
|
|
||
| Held for Sale | ||||||
| Investor 1-4 Rental |
|
$ - |
|
n.m. | ||
| Total Managed Loan Portfolio UPB |
|
|
|
|
||
| Key loan portfolio metrics: | ||||||
| Total loan count | 6,964 |
6,430 |
||||
| Weighted average loan to value |
|
|
||||
| Weighted average total portfolio yield |
|
|
||||
| Weighted average portfolio debt cost (a) |
|
|
| (a) 4Q21 weighted average portfolio debt cost includes for one-time costs totaling |
| Adjusted for these costs, the 4Q21 weighted average cost of funds was |
| n.m. - non meaningful |
Discussion of results:
-
Velocity’s total loan portfolio was
$2.6 billion December 31, 2021 , an increase of13.9% from$2.3 billion September 30, 2021
‒ Portfolio growth was driven by another quarter of record-setting production volume, partially offset by a
-
The weighted average loan-to-value of the portfolio was
67.7% as ofDecember 31, 2021 , consistent with67.2% as ofSeptember 30, 2021 -
The weighted average total portfolio yield was
8.21% in 4Q21, a decrease of 56 bps from 3Q21, driven by lower rates on recent production and a decrease in default income as the population of nonperforming loans continued to decrease -
Portfolio related debt cost in 4Q21 was
4.58% , an increase of 10 bps from 3Q21 driven by the one-time write-off of unamortized deal costs resulting from the collapse of VCC securitizations
| LOAN PRODUCTION VOLUMES | ||||||
| ($ in millions) | 4Q 2021 |
3Q 2021 |
$ Variance |
% Variance |
||
| Investor 1-4 Rental |
|
|
|
|
||
| Traditional Commercial |
|
|
|
|
||
| Short-term loans |
|
|
|
|
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| Total loan production |
|
|
|
|
Discussion of results:
-
Loan production in 4Q21 totaled
$497.8 million 46.1% increase from$340.7 million
‒ Investor 1-4 Rental production was up
‒ Traditional Commercial production was up
-
Loan origination volume for the two months ended
February 28, 2022 , totaled$358.8 million 51.5% of which was Investor 1-4 Rental loans,47.1% Traditional Commercial and1.5% Short-term loans
| HFI PORTFOLIO CREDIT PERFORMANCE INDICATORS | ||||||
| ($ in thousands) | 4Q 2021 |
3Q 2021 |
$ Variance |
% Variance |
||
| Nonperforming loans(a) |
|
|
|
(5.3)% |
||
| Nonperforming loans % total HFI Loans |
|
|
n.a. | (14.0)% |
||
| Total Charge Offs |
|
|
|
(11.9)% |
||
| Charge-offs as a % of Avg. Loans HFI(b) |
|
|
n.a. | (20.7)% |
||
| Loan Loss Reserve |
|
|
|
|
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| (a) Nonperforming/Nonaccrual loans include loans 90+ days past due, loans in foreclosure, bankruptcy and on nonaccrual. |
| (b) Annualized |
Discussion of results:
-
Nonperforming loans totaled
$273.1 million December 31, 2021 , or10.9% of loans HFI, compared to$288.4 million 12.7% , respectively, as ofSeptember 30, 2021
‒ Credit performance improvements resulted in NPL loans 90+ days past due (not in foreclosure) decreasing by
-
Charge-offs in 4Q21 totaled
$142.7 thousand $162.1 thousand
‒ Lower charge-offs in 4Q21 reflect improved loan performance and strong property price appreciation. Charge-offs levels in 4Q21 were well below the trailing eight quarter average of
-
The loan loss reserve totaled
$4.3 million December 31, 2021 , a5.8% increase from$4.0 million September 30, 2021 , driven primarily by portfolio growth -
Capitalized interest recovered on COVID forbearance loans granted a deferral totaled
$2.4 million April 2020 , with a remaining balance of$7.7 million December 31, 2021 . None of the capitalized interest has been forgiven
| NET REVENUES | ||||||
| ($ in thousands) | 4Q 2021 |
3Q 2021 |
$ Variance |
% Variance |
||
| Interest income |
|
|
|
|
||
| Interest expense - portfolio related(a) | (23,666) |
(20,321) |
(3,345) |
|
||
| Interest expense - corporate debt | (4,462) |
(4,488) |
26 |
(0.6)% |
||
| Net Interest Income |
|
|
|
(4.0)% |
||
| Loan loss provision | (377) |
(228) |
(149) |
|
||
| Gain on disposition of loans | 2,357 |
306 |
2,051 |
|
||
| Other operating income (expense) | 260 |
33 |
227 |
|
||
| Total Net Revenues |
|
|
|
|
| (a) Includes |
Discussion of results:
-
Total net interest income, including corporate debt interest expense, decreased by
$0.9 million 4.0% from 3Q21, driven by higher portfolio-related interest expense due to one-time costs from the collapse of VCC securitizations
‒ Excluding these costs, portfolio net interest income was
-
Total net revenues increased by
$1.25 million $2.1 million $34.3 million
| OPERATING EXPENSES | ||||||
| ($ in thousands) | 4Q 2021 |
3Q 2021 |
$ Variance | % Variance | ||
| Compensation and employee benefits |
|
|
|
- |
||
| Rent and occupancy | 429 |
447 |
(18) |
- |
||
| Loan servicing | 2,480 |
2,014 |
466 |
|
||
| Professional fees | 1,716 |
736 |
980 |
|
||
| Real estate owned, net | 417 |
1,186 |
(769) |
- |
||
| Other expenses | 2,333 |
2,177 |
156 |
|
||
| Total operating expenses |
|
|
|
|
Discussion of results:
-
Operating expenses totaled
$12.1 million 7.1% from 3Q21, driven by legal fees from the Century acquisition and consulting services related to Sarbanes-Oxley (SOX) implementation
| SECURITIZATIONS | |||||||
| Securities | Balance at | Balance at | |||||
| Trusts | Issued | ||||||
| 2014-1 Trust |
|
$ - |
- |
|
|
||
| 2015-1 Trust | 285,457 |
17,536 |
|
21,161 |
|
||
| 2016-1 Trust | 319,809 |
36,401 |
|
40,354 |
|
||
| 2016-2 Trust | 166,853 |
- |
- |
29,207 |
|
||
| 2017-1 Trust | 211,910 |
- |
- |
50,258 |
|
||
| 2017-2 Trust | 245,601 |
86,497 |
|
94,486 |
|
||
| 2018-1 Trust | 176,816 |
62,375 |
|
72,219 |
|
||
| 2018-2 Trust | 307,988 |
143,152 |
|
156,587 |
|
||
| 2019-1 Trust | 235,580 |
132,306 |
|
146,086 |
|
||
| 2019-2 Trust | 207,020 |
122,205 |
|
130,198 |
|
||
| 2019-3 Trust | 154,419 |
95,521 |
|
105,570 |
|
||
| 2020-1 Trust | 248,700 |
174,550 |
|
186,400 |
|
||
| 2020-2 Trust | 96,352 |
80,676 |
|
88,695 |
|
||
| 2020- |
179,371 |
35,711 |
|
57,111 |
|
||
| 2021-1 Trust | 251,301 |
236,190 |
|
245,423 |
|
||
| 2021-2 Trust | 194,918 |
197,744 |
|
203,743 |
|
||
| 2021-3 Trust | 204,205 |
202,793 |
|
||||
| 2021-4 Trust | 319,116 |
315,489 |
|
||||
|
|
|
|
|
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Discussion of results:
-
The weighted average rate on Velocity’s outstanding securitizations decreased 25bps from 3Q21, primarily resulting from the issuance of the VCC 2021-3 and VCC 2021-4 securitizations with a combined balance of
$518.3 million December 31, 2021 , and total weighted average rate of2.85%
‒ The VCC 2014 securitization included
- We are continuing to explore opportunities to further optimize our financing costs by refinancing other VCC securitizations with exercisable call rights
| RESOLUTION ACTIVITIES | ||||||
| LONG-TERM LOANS | ||||||
| RESOLUTION ACTIVITY | FOURTH QUARTER 2021 | THIRD QUARTER 2021 | ||||
| ($ in thousands) | UPB $ | Gain / (Loss) $ | UPB $ | Gain / (Loss) $ | ||
| Paid in full |
|
|
|
|
||
| Paid current | 12,209 |
290 |
7,722 |
79 |
||
| REO sold(a) | 1,770 |
121.0 |
4,680 |
31 |
||
| Total resolutions |
|
|
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|
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| Resolutions as a % of nonperforming UPB |
|
|
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| (a) There was an REO property held since |
| SHORT-TERM AND FORBEARANCE LOANS | ||||||
| RESOLUTION ACTIVITY | FOURTH QUARTER 2021 | THIRD QUARTER 2021 | ||||
| ($ in thousands) | UPB $ | Gain / (Loss) $ | UPB $ | Gain / (Loss) $ | ||
| Paid in full |
|
|
|
|
||
| Paid current | 5,837 |
67 |
25,141 |
29 |
||
| REO sold | 266 |
48 |
104 |
47 |
||
| Total resolutions |
|
|
|
|
||
| Resolutions as a % of nonperforming UPB |
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|
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| Grand total resolutions |
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|
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| Grand total resolutions as a % of nonperforming UPB |
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Discussion of results:
-
Resolution activities in 4Q21 totaled
$44.1 million $1.8 million 104.0% of UPB resolved - The volume of loans resolved per quarter will vary due to a variety of factors but is expected to trend lower as portfolio performance continues to improve
-
Long-term loan resolutions totaled
$25.4 million $1.0 million
‒ Paid in full UPB resolved and the related gains decreased
‒ Paid current UPB resolved increased
‒ REO sold in 4Q21 had a carrying value of
-
Short-term loan resolutions totaled
$18.7 million $0.74 million
‒ Paid in full UPB resolved increased
‒ Paid current UPB resolved decreased
‒ REO sold in 4Q21 had a carrying value of
Full-Year 2021 Operating Results |
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| FULL-YEAR OPERATING RESULTS | ||||||
| ($ in thousands) | FY 2021 | FY2020 | $ Variance | % Variance | ||
| Investor 1-4 Rental |
|
|
|
|
||
| Traditional Commercial | 512 |
138 |
374 |
|
||
| Short-term loans | 67 |
96 |
(29) |
(30.1)% |
||
| Total Loan production |
|
|
|
|
||
| Net Interest Margin - Portfolio |
|
|
n.a. |
|
||
| Charge-offs as a % of Avg. Loans HFI |
|
|
n.a. | (27.2)% |
||
| Total charge-offs |
|
|
|
(19.3)% |
||
| Total Net Interest Income(a) | 76,265 |
62,379 |
13,886 |
|
||
| Total Other Income | 8,188 |
6,320 |
1,868 |
|
||
| Total Expenses | 55,229 |
50,922 |
4,307 |
|
||
| Net Income |
|
|
|
|
||
| Less deemed dividends on preferred stock | - |
48,955 |
n.a. | n.a. | ||
| Net loss allocated to shareholders | - |
(31,178) |
n.a. | n.a. | ||
| Diluted EPS |
|
|
n.a. | n.a. | ||
| Core Income(b) |
|
|
|
|
||
| Core Diluted EPS(b) |
|
|
n.a. | (13.3)% |
||
| (a) After provision for loan losses. |
| (b) Core income is a non-GAAP measure. Please see the reconciliation to GAAP net income at the end of this release. |
Discussion of results:
-
Loan production in 2021 totaled
$1.3 billion 204.8% increase from$435.0 million
‒ Driven by strong demand for financing and impacts to loan production activities in 2020 from the COVID-19 pandemic
-
Net interest margin (NIM) was
4.54% in 2021, a 65 bps increase from3.89% in 2020
‒ Resulting from strong HFI portfolio growth driven by record production volumes, the additional yield from elevated levels of NPL resolutions and significant improvement in securitized funding costs as market conditions normalized in 2021
-
Charge-offs in 2021 totaled
$1.3 million 19.3% decrease from$1.6 million
‒ As a percentage of average loans HFI, charge-offs were
-
Net income totaled 29.2 million in 2021, a
64.4% increase from 17.8 million in 2020
‒ Net interest income (after provision for loan losses) totaled
‒ Other income totaled
‒ Expenses totaled
-
Core net income(1) totaled
$33.3 million 46.6% increase from$22.7 million -
Core diluted EPS was
$0.98 13.3% decrease from$1.13
______________________________________________________
(1) “Core” income is a non-GAAP measure that excludes non-recurring and unusual activities from GAAP net income.
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 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, download, and install any needed software. An audio replay of the call will also be available on Velocity’s website following the completion of the conference call.
Conference Call Information
To participate by phone, please dial-in 15 minutes before 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
A replay of the call will be available through midnight on
1-412-317-0088 internationally. The passcode for the replay is #7444168. The replay will also be available on the Investor Relations section of the Company's website under "Events and Presentations.”
About
Based in
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with
Non-GAAP core net income and non-GAAP core diluted EPS share are non-GAAP financial measures that represent our net income (loss) and net income (loss) per diluted share, adjusted to eliminate the effect of certain costs incurred from activities that are not normal recurring operating expenses, such as COVID-stressed charges and recoveries of loan loss provision, nonrecurring debt amortization, the impact of operational measures taken to address the COVID-19 pandemic and workforce reduction costs, and costs associated with acquisitions. To calculate non-GAAP core diluted EPS, we use the weighted-average number of shares of common stock outstanding that is used to calculate net income per diluted share under GAAP.
We have included non-GAAP core net income and non-GAAP core diluted EPS because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that non-GAAP core net income and non-GAAP core diluted EPS provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain items that we expect to be non-recurring.
These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.
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-K filed with the
Consolidated Statements of Financial Condition |
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| Quarter Ended | |||||||||
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Unaudited |
|
Unaudited |
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Unaudited |
|
Unaudited |
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Audited |
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| (In thousands) | |||||||||
| Assets | |||||||||
| Cash and cash equivalents |
|
|
|
|
|
||||
| Restricted cash | 11,639 |
9,586 |
7,921 |
6,808 |
7,020 |
||||
| Loans held for sale, net | 87,908 |
0 |
7,916 |
0 |
13,106 |
||||
| Loans held for investment, at fair value | 1,359 |
1,360 |
1,370 |
1,364 |
1,539 |
||||
| Loans held for investment | 2,494,204 |
2,265,922 |
2,057,046 |
1,983,435 |
1,924,489 |
||||
| Net deferred loan costs | 33,360 |
29,775 |
26,707 |
25,070 |
23,600 |
||||
| Total loans, net | 2,616,831 |
2,297,057 |
2,093,039 |
2,009,869 |
1,962,734 |
||||
| Accrued interest receivables | 13,159 |
11,974 |
11,094 |
11,169 |
11,373 |
||||
| Receivables due from servicers | 74,330 |
57,058 |
73,517 |
77,731 |
71,044 |
||||
| Other receivables | 1,812 |
870 |
10,169 |
3,879 |
4,085 |
||||
| Real estate owned, net | 17,557 |
17,905 |
20,046 |
14,487 |
15,767 |
||||
| Property and equipment, net | 3,830 |
3,348 |
3,625 |
3,891 |
4,145 |
||||
| Deferred tax asset | 16,604 |
17,026 |
13,196 |
9,246 |
6,654 |
||||
| Mortgage Servicing Rights | 7,152 |
- |
- |
- |
- |
||||
6,775 |
- |
- |
- |
- |
|||||
| Other assets | 6,824 |
6,843 |
7,257 |
7,325 |
6,779 |
||||
| Total Assets |
|
|
|
|
|
||||
| Liabilities and members' equity | |||||||||
| Accounts payable and accrued expenses |
|
|
|
|
|
||||
| Secured financing, net | 162,845 |
163,449 |
164,053 |
129,666 |
74,982 |
||||
| Securitizations, net | 1,911,879 |
1,623,674 |
1,558,163 |
1,453,386 |
1,579,019 |
||||
| Warehouse & repurchase facilities | 301,069 |
258,491 |
151,872 |
203,314 |
75,923 |
||||
| Total Liabilities | 2,467,988 |
2,124,974 |
1,944,137 |
1,851,369 |
1,793,285 |
||||
| Mezzanine Equity | |||||||||
| Series A Convertible preferred stock | - |
90,000 |
90,000 |
90,000 |
90,000 |
||||
| Stockholders' Equity | |||||||||
| Stockholders' equity | 344,490 |
242,190 |
233,468 |
223,470 |
219,589 |
||||
| Total Liabilities and members' equity |
|
|
|
|
|
||||
| Book value per share |
|
|
|
|
|
||||
| Shares outstanding | 31,787 |
20,098 |
20,087 |
20,087 |
20,087 |
||||
Consolidated Statements of Income (Quarterly) |
|||||||||
| Quarter Ended | |||||||||
| ($ in thousands) |
|
|
|
|
|
|
|
|
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Revenues |
|||||||||
| Interest income |
|
|
|
|
|
||||
| Interest expense - portfolio related | 23,666 |
20,321 |
20,566 |
20,832 |
21,442 |
||||
| Net interest income - portfolio related | 25,694 |
26,602 |
24,412 |
19,875 |
20,114 |
||||
| Interest expense - corporate debt | 4,462 |
4,488 |
4,309 |
7,350 |
1,900 |
||||
| Net interest income | 21,232 |
22,114 |
20,103 |
12,525 |
18,214 |
||||
| Provision for loan losses | 377 |
228 |
(1,000) |
105 |
406 |
||||
| Net interest income after provision for loan losses | 20,855 |
21,886 |
21,103 |
12,420 |
17,808 |
||||
| Other operating income (expense) | 2,617 |
339 |
2,432 |
2,801 |
4,691 |
||||
| Total net revenues | 23,472 |
22,225 |
23,535 |
15,221 |
22,499 |
||||
Operating expenses |
|||||||||
| Compensation and employee benefits | 4,720 |
4,738 |
4,546 |
5,186 |
4,135 |
||||
| Rent and occupancy | 429 |
447 |
430 |
463 |
424 |
||||
| Loan servicing | 2,480 |
2,014 |
1,922 |
1,867 |
1,977 |
||||
| Professional fees | 1,716 |
736 |
795 |
533 |
1,415 |
||||
| Real estate owned, net | 417 |
1,186 |
1,039 |
509 |
217 |
||||
| Other operating expenses | 2,333 |
2,177 |
1,918 |
2,059 |
2,578 |
||||
| Total operating expenses | 12,095 |
11,298 |
10,650 |
10,617 |
10,746 |
||||
| Income before income taxes | 11,377 |
10,927 |
12,885 |
4,604 |
11,753 |
||||
| Income tax expense | 3,024 |
2,905 |
3,432 |
1,208 |
2,177 |
||||
Net income |
|
|
|
|
|
||||
| Less: Deemed dividends on preferred stock | - |
- |
- |
- |
- |
||||
| Less: Undistributed earnings allocated to participating securities | 362 |
3,030 |
|
|
n.a. | ||||
| Net income (loss) allocated to common shareholders |
|
|
|
|
|
||||
| Basic earnings (loss) per share |
|
|
|
|
|
||||
| Diluted earnings (loss) per common share |
|
|
|
|
|
||||
| Basic weighted average common shares outstanding | 30,897 |
20,090 |
20,087 |
20,087 |
20,087 |
||||
| Diluted weighted average common shares outstanding | 34,257 |
34,212 |
33,960 |
33,407 |
32,793 |
||||
Consolidated Statements of Income (Annual) |
|||
| Year Ended | |||
| ($ in thousands) | |||
| Audited | Audited | ||
| Revenues | |||
| Interest income |
|
|
|
| Interest expense - portfolio related | 85,386 |
87,826 |
|
| Net interest income - portfolio related | 96,582 |
79,496 |
|
| Interest expense - corporate debt | 20,609 |
12,049 |
|
| Net interest income | 75,973 |
67,447 |
|
| Provision for loan losses | (292) |
5,068 |
|
| Net interest income after provision for loan losses | 76,265 |
62,379 |
|
| Other operating income (expense) | 8,188 |
6,320 |
|
| Total net revenues | 84,453 |
68,699 |
|
| Operating expenses | |||
| Compensation and employee benefits | 19,190 |
20,731 |
|
| Rent and occupancy | 1,769 |
1,743 |
|
| Loan servicing | 8,282 |
7,802 |
|
| Professional fees | 3,781 |
4,238 |
|
| Real estate owned, net | 3,150 |
2,656 |
|
| Other operating expenses | 8,488 |
8,400 |
|
| Total operating expenses | 44,660 |
45,570 |
|
| Income before income taxes | 39,793 |
23,129 |
|
| Income tax expense | 10,569 |
5,352 |
|
| Net income |
|
|
|
| Less: Deemed dividends on preferred stock | - |
|
|
| Less: Undistributed earnings allocated to participating securities |
|
- |
|
| Net income (loss) allocated to common shareholders |
|
|
|
| Basic earnings (loss) per share |
|
|
|
| Diluted earnings (loss) per common share |
|
|
|
| Basic weighted average common shares outstanding | 22,813 |
20,087 |
|
| Diluted weighted average common shares outstanding | 33,982 |
20,087 |
|
Net Interest Margin ‒ (Unaudited) |
|||||||||||||||||
Quarterly: |
|||||||||||||||||
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|||||||||||||
|
|
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 |
|
|
|
||||||||||||||
| Loans held for investment | 2,363,987 |
2,137,505 |
1,958,436 |
||||||||||||||
| Total loans |
|
|
|
|
|
|
|
|
|
||||||||
| Debt: | |||||||||||||||||
| Warehouse and repurchase facilities |
|
3,273 |
|
|
2,365 |
|
|
717 |
|
||||||||
| Securitizations | 1,796,543 |
20,392 |
|
1,633,059 |
17,956 |
|
1,666,180 |
20,726 |
|
||||||||
| Total debt - portfolio related | 2,068,304 |
23,665 |
|
1,815,442 |
20,322 |
|
1,726,245 |
21,443 |
|
||||||||
| Corporate debt | 171,926 |
4,463 |
|
172,934 |
4,488 |
|
78,000 |
1,900 |
|
||||||||
| Total debt |
|
|
|
|
|
|
|
|
|
||||||||
| Net interest spread - portfolio related (2) |
|
|
|
||||||||||||||
| Net interest margin - portfolio related |
|
|
|
||||||||||||||
| Net interest spread - total company (3) |
|
|
|
||||||||||||||
| Net interest margin - total company |
|
|
|
||||||||||||||
| (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. |
Annual: |
|||||||||||
Year Ended |
Year Ended |
||||||||||
| Interest | Average | Interest | Average | ||||||||
| Average | Income / | Yield / | Average | Income / | Yield / | ||||||
| ($ in thousands) | Balance | Expense | Rate(1) | Balance | Expense | Rate(1) | |||||
| Loan portfolio: | |||||||||||
| Loans held for sale |
|
|
|||||||||
| Loans held for investment |
|
1,932,855 |
|||||||||
| Total loans |
|
|
|
|
|
|
|||||
| Debt: | |||||||||||
| Warehouse and repurchase facilities |
|
9,706 |
|
|
8,352 |
|
|||||
| Securitizations | 1,630,385 |
75,680 |
|
1,635,089 |
79,474 |
|
|||||
| Total debt - portfolio related | 1,814,048 |
85,386 |
|
1,803,189 |
87,826 |
|
|||||
| Corporate debt | 154,890 |
20,609 |
|
82,117 |
12,050 |
|
|||||
| Total debt |
|
|
|
|
|
|
|||||
| Net interest spread - portfolio related (2) |
|
|
|||||||||
| Net interest margin - portfolio related |
|
|
|||||||||
| Net interest spread - total company (3) |
|
|
|||||||||
| Net interest margin - total company |
|
|
|||||||||
| (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. |
Adjusted Financial Metric Reconciliation to GAAP Net Income (Unaudited) |
|||||||||
Quarterly: |
|||||||||
| Core Income | |||||||||
| Quarter Ended | |||||||||
| ($ in thousands) | |||||||||
| Net Income |
|
|
|
|
|
||||
| Deal cost write-off - collapsed securitizations |
|
- |
- |
- |
- |
||||
|
- |
- |
- |
- |
|||||
| Recovery of Loan Loss Provision | - |
- |
|
- |
- |
||||
| Nonrecurring debt amortization | - |
- |
- |
3,326 |
- |
||||
| COVID-19 Impact | - |
- |
- |
- |
- |
||||
| Workforce reduction costs | - |
- |
- |
- |
|||||
| Core Income |
|
|
|
|
|
||||
| Diluted weighted average common shares outstanding |
|
|
|
|
|
||||
| Core diluted earnings per share |
|
|
|
|
|
||||
Annual: |
|||
| Core Income | |||
| Year Ended | |||
| ($ in thousands) | |||
| Net Income |
|
|
|
| Deal cost write-off - collapsed securitizations | 1,104 |
- |
|
624 |
- |
||
| Recovery of Loan Loss Provision | (1,000) |
- |
|
| Nonrecurring debt amortization | 3,326 |
2,610 |
|
| COVID-19 Impact | - |
1,882 |
|
| Workforce reduction costs | - |
432 |
|
| Core Income |
|
|
|
| Diluted weighted average common shares outstanding |
|
|
|
| Core diluted earnings per share |
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220310005787/en/
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FAQ
What were Velocity Financial's earnings for 4Q21?
How much loan production did Velocity Financial achieve in 4Q21?
What was the core net income for Velocity Financial in 4Q21?
What are the loan portfolio metrics for Velocity Financial as of 12/31/21?
How did the net interest margin change for Velocity Financial in 4Q21?
