Velocity Financial, Inc. has recently released its 10-Q report, providing a detailed look into its operations and financial performance. The company operates as a real estate finance company in the United States, originating and managing a portfolio of loans secured by various types of commercial properties, including residential apartments, retail properties, and more. As of March 31, 2024, Velocity Financial's loan portfolio totaled $4.3 billion on properties in 46 states and the District of Columbia, with a weighted average loan-to-value ratio of 67.6%. The company's annualized yield on its total portfolio for the three months ended March 31, 2024, was 8.71%.
Velocity Financial primarily funds its portfolio through a combination of committed and uncommitted secured warehouse facilities, securitized debt, corporate debt, and equity. The company has executed thirty securitized debt transactions, resulting in over $6.6 billion in gross debt proceeds from May 2011 through March 2024. Additionally, the company issued $75.0 million principal amount of five-year Senior Secured Notes in February 2024, bearing interest at 9.875% and maturing on February 15, 2029.
One of the significant developments highlighted in the report is the completion of the securitization of $295.1 million of investor real estate loans in April 2024. However, the company also acknowledges that its operational and financial performance is subject to market uncertainties, including the lingering impact of the COVID-19 pandemic, global conflicts, a potential recession, and macroeconomic conditions.
Velocity Financial closely monitors its net interest income, credit losses, and operating expenses as primary metrics for assessing its business performance. The company's net interest income, which is the largest contributor to its net income, is primarily achieved through long-term securitized debt. Additionally, the company strives to minimize credit losses through rigorous screening and underwriting processes and closely monitors the credit performance of its loan portfolio, including delinquency rates and expected and actual credit losses.
The company also emphasizes that its results of operations depend on factors such as the level of net interest income, the credit performance of its loan portfolio, and the efficiency of its operating platform. Velocity Financial operates in a highly competitive market for investor real estate loans and closely monitors the availability and cost of funding, loan performance, macroeconomic conditions, and portfolio and asset quality.
The 10-Q report provides detailed statistics regarding the company's loan portfolio, including total loans, loan count, average loan balance, weighted average loan-to-value, weighted average coupon, and nonperforming loans. As of March 31, 2024, nonperforming loans accounted for 10.1% of the total, reflecting the UPB of loans 90 days or more past due or placed on nonaccrual status.
Today the company's shares have moved 3.8% to a price of $18.0. Check out the company's full 10-Q submission here.
