August 8, 2022
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Velocity reports earnings growth in Q2

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Real estate finance company Velocity Financial saw its second quarter net income increase and its total loan portfolio grow from 2021 to 2022, according to an earnings statement the company released on Aug. 4.

The Westlake Village-based company reported net income of $10.6 million, or diluted earnings per share of 31 cents, in the second quarter of 2022, compared with $9.5 million, or 28 cents per share, in the same quarter a year earlier.

Velocity attributed the results to an increase in interest income from its loan portfolio, in addition to default interest and fees realized from the resolution of nonperforming loans.

Velocity’s total loan portfolio was $3.1 billion in unpaid principal balance as of June 30, an increase of 49.3% from $2.1 billion in unpaid principal balance a year earlier. The company said the portfolio growth was driven by record loan production volume.
Earnings and core earnings per diluted share were both 31 cents for the second quarter of 2022, compared with 28 cents and 25 cents per share, respectively, in the second quarter a year ago.

In a news release, Velocity CEO Chris Farrar said the company issued three new securitizations totaling $622.7 million during the second quarter of 2022. He said the results demonstrate Velocity’s “differentiation in today’s market resulting from our extensive securitization track record and reputation for high-quality loan collateral.”

“These securitizations allowed us to further optimize non-recourse leverage and enhance our liquidity position,” Farrar said. “While financing costs have increased along with market volatility, we have been able to successfully increase rates on new production while maintaining solid volume levels.”