Velocity Financial reports drop in earnings
Velocity Financial, a Westlake Village-based mortgage lender for small multifamily residential and commercial properties, reported a steep decline in earnings for the first quarter of 2022 when compared to a year earlier.
In an earnings report released May 5, Velocity reported net income of $3.1 million, or 9 cents per share, down from $8.4 million, or 24 cents per share, in the first quarter of 2021.
Velocity did report an increase in its “core earnings,” from $10.1 million in 2021, or 29 cents per share, to $12.4 million in 2022, or 36 cents per share.
Christopher Oltmann, the chief accounting officer and director of investor relations at Velocity, said in an email on May 5 that “core earnings” include adjustments to eliminate the effect of certain costs incurred from activities that are not normal recurring operating expenses. Some historical examples were pandemic-stressed charges and recoveries of loan loss provision, nonrecurring debt amortization, the impact of operational measures taken to address the COVID-19 pandemic, workforce reduction costs and costs associated with acquisitions.
Velocity reported loan production volume of $581.4 million in unpaid principal balance, a third consecutive quarterly record and an increase of nearly 17% from the fourth quarter in 2021.
“This quarter’s strong financial performance was driven by our investment loan portfolio of nearly $3 billion in UPB (unpaid principal balance), which has grown at a compounded annual growth rate of 20% over the last four years from loan production sourced through our nationwide origination platform,” Velocity CEO Chris Farrar said in a news release. “While macroeconomic and geopolitical uncertainties have increased, our resilient business model has performed impressively through a variety of market environments.”