Velocity Financial Inc (VEL) Reports 21.1% Increase in Net Income for Q3 2023
Net income of $12.1 million, up 21.1% from $10.0 million for Q3 2022
Core net income of $12.9 million, up 29.4% from $10.0 million for Q3 2022
Loan production of $290.6 million, a 12.3% increase from Q2 2023
Total loan portfolio of $3.9 billion, an increase of 12.9% from September 30, 2022
Velocity Financial Inc (NYSE:VEL) released its Q3 2023 earnings report on November 3, 2023. The company reported a net income of $12.1 million, marking a 21.1% increase from the $10.0 million reported for Q3 2022. The diluted EPS stood at $0.35, up $0.06 from $0.29 per share for Q3 2022. The core net income was $12.9 million, up 29.4% from $10.0 million for Q3 2022, with the core diluted EPS at $0.37, up $0.08 from $0.29 per share for Q3 2022.
Financial Performance
The company's loan production for the quarter was $290.6 million in UPB, a 12.3% increase from Q2 2023, but a decrease of 36.5% from Q3 2022. The total loan portfolio stood at $3.9 billion in UPB, marking an increase of 12.9% from September 30, 2022. Nonperforming loans as a percentage of Held for Investment (HFI) loans was 10.1%, essentially flat Q/Q and an increase from 7.4% as of September 30, 2022.
Key Financial Indicators
Key performance indicators for Q3 2023 included a pretax income of $17.2 million, up 23% from Q3 2022, and a net income of $12.1 million, up 21% from Q3 2022. The diluted earnings per share were $0.35, up 19% from Q3 2022. The GAAP pretax return on equity was 16.8% for Q3 2023, compared to 15.3% for Q3 2022.
Loan Portfolio
Velocitys total loan portfolio was $3.9 billion in UPB as of September 30, 2023, an increase of 12.9% from $3.4 billion in UPB as of September 30, 2022. This was primarily driven by 19.3% Y/Y growth in loans collateralized by Investor 1-4 Rental properties and a combined 8.7% Y/Y growth in Multifamily and Mixed Use properties.
Outlook
Chris Farrar, President and CEO of Velocity Financial, Inc., expressed optimism about the company's performance. He stated,
Our third quarter results continued to build upon our momentum from the first half of 2023, with sequential quarter production volume increases and higher portfolio interest income resulting from continued portfolio growth."
Conference Call Information
Velocitys executive management team will host a conference call and webcast to review Q3 2023 financial results on November 2nd, 2023, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time.
Explore the complete 8-K earnings release (here) from Velocity Financial Inc for further details.
This article first appeared on GuruFocus.
