Velocity Financial, Inc. · NYSE:VEL
Velocity Financial — Q4 2019 Earnings Presentation
13 slides from Velocity Financial's earnings presentation, Apr 8, 2020
Slide 1: 4Q19 Earnings Presentation
4Q19 Earnings Presentation April 08, 2020
Slide 2: Forward-looking statements
Forward-looking statements Some of the statements contained in this presentation may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, projections, plans and strategies, anticipated events or trends, and simila
Slide 3: Earnings Highlights
Earnings Highlights Fourth Quarter Highlights: ▪ Net income was $5.2 million; pro forma diluted earnings per share (EPS) was $0.44(1) ▪ Pro forma book value per share of $13.01(1) ▪ Net operating income of $12.2 million, up 28% from 3Q19(2) ▪ Total loan portfolio of $2.1 billion in UPB at December 3
Slide 4: Key Performance Metrics
Key Performance Metrics Strong Financial Performance Resulting From Improved Operating Efficiency ▪ Increase in net income driven primarily by our ▪ Higher net operating income reflects the continued growing loan portfolio and improved portfolio- realization of scale efficiencies as the company rela
Slide 5: Quarterly Origination Volume
Quarterly Origination Volume Record Production Volume from Our Comprehensive Origination Platform Loan Production and Product Mix (UPB in millions) $321 $278 $123 $211 $213 $95 $199 $61 $54 $67 $84 $103 $82 $70 $80 $100 $95 $69 $76 $66 4Q18 1Q19 2Q19 3Q19 4Q19 Investor 1-4 Perm Traditional Perm Shor
Slide 6: Strong Organic Production Drives Portfolio Growth
Strong Organic Production Drives Portfolio Growth Strict Underwriting Discipline and Low LTVs Result In a High-Quality Portfolio Total Loans Portfolio Composition(1) (UPB in millions) (by property type) $2,059 $1,928 Mixed Use $216 $1,749 $171 14% $1,631 $1,657 $59 $83 $79 Multifamily 11% 65% 65% 66
Slide 7: Net Interest Margin
Net Interest Margin Improving Funding Costs and Higher Yields Driving NIM Improvement ▪ Net Interest Margin (NIM) rose to 4.32%, an increase of 26 bps from the prior quarter ▪ Growth reflects structural improvements in securitization-related costs of funds and additional improvement is projected in
Slide 8: Loan Portfolio Performance
Loan Portfolio Performance ▪ Nonperforming loans totaled $142 million in UPB at December 31, 2019, or 6.88% of total loans (held for sale and held for investment), up 20% from September 30th driven by normal portfolio seasoning ▪ Significant success historically resolving nonperforming loans prior t
Slide 9: Appendix
Appendix
Slide 10: Velocity Financial, Inc. Balance Sheet
Velocity Financial, Inc. Balance Sheet (Unaudited) Quarter Ended 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 (In thousands) Assets Cash and cash equivalents $ 21,465 $ 8,849 $ 14,105 $ 16,948 $ 15,008 Restricted cash 6,087 3,152 1,542 1,986 1,669 Loans held for sale, net 214,467 170,440 8
Slide 11: Velocity Financial, Inc. Income Statement
Velocity Financial, Inc. Income Statement (Unaudited) Quarter Ended Year Ended ($ in thousands) 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 12/31/2019 12/31/2018 Revenues Interest income $ 44,124 $ 40,379 $ 36,884 $ 36,143 $ 33,560 $ 157,531 $ 124,722 Interest expense - portfolio related
Slide 12: Adjusted Financial Metric Reconciliation to GAAP
Adjusted Financial Metric Reconciliation to GAAP Quarter Ended Year Ended 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 12/31/2019 12/31/2018 Reconcilliation of Velocity Financial Inc. Net Income to Net Operating Income GAAP Net Income $ 5,182 $ 3,880 $ 3,535 $ 4,695 $ 1,939 $ 17,292 $ 7,63
Slide 13: Loan Portfolio Delinquency Status
Loan Portfolio Delinquency Status $ UPB in millions HFI HFS Grand Total CURRENT $ 1,559.37 $ 167.97 $ 1,727.34 30 DPD 123.70 14.08 137.79 60 DPD 48.06 4.55 52.61 Total Performing $ 1,731.14 $ 186.60 $ 1,917.74 90+ DPD $ 24.79 $ 9.17 $ 33.97 BK 8.69 0.82 9.51 FC 78.67 19.47 98.13 Total NPL $ 112.15 $