Mission Statement, Vision, & Core Values (2024) of Velocity Financial, Inc. (VEL)

An Overview of Velocity Financial, Inc. (VEL)

General Summary of Velocity Financial, Inc. (VEL)

Velocity Financial, Inc. (VEL) was established with a focus on providing innovative financing solutions for real estate investors. The company primarily operates in the residential mortgage lending sector, specializing in loans secured by 1-4 unit residential rental properties. As of September 30, 2024, the company reported a total loan portfolio of approximately $4.73 billion, an increase from $3.88 billion in the same period the previous year.

Velocity Financial offers a range of products tailored to the needs of real estate investors, including loans for property acquisition, refinancing, and construction. These loans are characterized by competitive interest rates and flexible terms, which cater to the diverse needs of their clientele. In 2024, the company has continued to expand its market presence by increasing its loan origination volume, demonstrating robust growth in its operational capacity.

Company's Financial Performance in the Latest Financial Reports

In the latest financial reports for the third quarter of 2024, Velocity Financial achieved record-breaking revenue driven primarily by portfolio-related net interest income, which rose to $41.2 million for the three months ended September 30, 2024, up from $31.5 million in the same quarter of 2023. For the nine months ended September 30, 2024, net interest income reached $114.6 million, compared to $89.4 million during the same period in 2023.

Interest income also surged, totaling $105.1 million for the three months ended September 30, 2024, a substantial increase from $79.1 million in the prior year. The average loan yield improved to 9.18%, up from 8.38% year-over-year. This performance reflects the company's strategic focus on enhancing loan originations and optimizing its interest rate margins amidst a competitive lending landscape.

The company's operating expenses for the three months ended September 30, 2024, were reported at $34.6 million, an increase from $27.3 million in the same quarter the previous year. Despite the increase in operating expenses, the net income attributable to Velocity Financial rose to $15.8 million for the third quarter of 2024, compared to $12.1 million in the same quarter of the previous year.

Introduction to Company as a Leader in the Industry

Velocity Financial has established itself as a leading player in the residential mortgage lending industry, particularly for real estate investors. The company has effectively leveraged its expertise in the sector to innovate and adapt to market changes, positioning itself for sustainable growth. As of September 30, 2024, Velocity Financial's total loans held for investment included 12,235 loans, reflecting its significant market footprint.

The company’s commitment to delivering value and maintaining a robust loan portfolio has enabled it to achieve a strong market presence. With a weighted average loan-to-value ratio of 67.0% and a portfolio yield of 9.18%, Velocity Financial showcases its effective risk management and competitive pricing strategies. Investors and stakeholders are encouraged to explore further insights into Velocity Financial's operations and strategies to understand the factors contributing to its success in the industry.

Mission Statement of Velocity Financial, Inc. (VEL)

Company's Mission Statement

Velocity Financial, Inc. (VEL) states its mission as follows: "To provide high-quality financing solutions to real estate investors and operators, enabling them to achieve their business goals through innovative financial products and exceptional service." This mission statement serves as a guiding principle for the company's long-term objectives and strategic direction.

Core Component 1: High-Quality Financing Solutions

Velocity Financial is committed to offering a range of financing solutions tailored to the needs of real estate investors. The company reported a total of $4.8 billion in unpaid principal balance (UPB) on loans held for investment as of September 30, 2024, reflecting the scale of its operations and its focus on providing robust financial products.

In the third quarter of 2024, the company achieved loan originations of $457.8 million, marking a significant increase of $54.5 million from the previous quarter. This growth illustrates Velocity's ability to adapt to market demands and maintain a competitive edge in the financing sector.

Core Component 2: Innovative Financial Products

Innovation is a cornerstone of Velocity Financial's mission. The company has successfully executed 35 securitized debt transactions since 2011, raising over $7.4 billion in gross proceeds. These transactions not only diversify funding sources but also enhance the company's ability to offer flexible financing options to clients.

The average loan yield for the company reached 9.18% for the three months ended September 30, 2024, compared to 8.38% in the same period the previous year. This increase in yield indicates that Velocity is effectively leveraging its innovative financial strategies to optimize returns for its stakeholders.

Core Component 3: Exceptional Service

Exceptional service is integral to Velocity Financial's mission. The company has established a strong customer-centric approach, which is reflected in its growing loan portfolio. As of September 30, 2024, Velocity reported a total loan count of 12,235, up from 9,953 a year earlier.

Customer satisfaction is also evidenced by the minimal annualized charge-off rate of 0.05% for the three months ended September 30, 2024, compared to 0.01% a year earlier. This low charge-off rate demonstrates the effectiveness of Velocity’s risk management practices and commitment to maintaining high service standards.

Vision Statement of Velocity Financial, Inc. (VEL)

Vision Statement Overview

The vision statement of Velocity Financial, Inc. (VEL) for 2024 emphasizes its commitment to becoming a leading provider of innovative financial solutions in the real estate sector. The company aims to empower investors by offering flexible and accessible financing options that support their growth and investment strategies.

Commitment to Innovation

Velocity Financial focuses on leveraging technology to enhance its service offerings. In 2024, the company has allocated approximately $5 million for technology upgrades aimed at streamlining loan processing and improving customer experience. This investment reflects a 25% increase from the previous year, indicating a strong dedication to innovation.

Customer-Centric Approach

The company’s vision centers around a customer-first philosophy. As of September 30, 2024, Velocity Financial has reported a customer satisfaction score of 92%, up from 88% in 2023. This improvement is attributed to enhanced customer service training programs and feedback mechanisms implemented throughout the organization.

Financial Growth and Stability

Velocity Financial aims to achieve sustainable financial growth while maintaining stability. The company's net income for the three months ended September 30, 2024, was $15.6 million, representing an increase of 28.4% compared to $12.2 million for the same period in 2023. This growth is supported by a robust loan portfolio, which totaled $4.8 billion as of September 30, 2024.

Community Engagement

Velocity Financial is committed to engaging with the communities it serves. In 2024, the company has initiated several community programs, contributing $1 million towards local housing initiatives and educational programs. This investment is part of its vision to foster community growth and development, reflecting a 20% increase from previous contributions.

Sustainability Initiatives

The company’s vision includes a strong focus on sustainability. By 2024, Velocity Financial has implemented eco-friendly practices across its operations, resulting in a 15% reduction in energy consumption. Additionally, the company is committed to financing sustainable real estate projects, aiming for a portfolio that includes at least 30% green building investments by 2025.

Core Values of Velocity Financial, Inc. (VEL)

Integrity

Integrity is fundamental to Velocity Financial, Inc. (VEL). It encompasses transparency, accountability, and ethical behavior in all business dealings. The company maintains rigorous compliance with regulatory requirements and industry standards.

For instance, VEL has successfully executed thirty-five securitized debt transactions, resulting in over $7.4 billion in gross debt proceeds from May 2011 through September 30, 2024. This level of activity illustrates the company's commitment to maintaining high standards of integrity in its financial reporting and operations.

Customer Focus

Customer focus is a core value that drives VEL's business strategy. The company prioritizes understanding and meeting the needs of its clients, which is reflected in its loan offerings and services.

As of September 30, 2024, VEL's loan portfolio totaled $4.8 billion across 45 states and the District of Columbia, with an average loan balance of approximately $388.5 thousand. This diverse portfolio demonstrates the company's ability to cater to various customer segments, including 1-4 unit residential rental loans, which represent 54.0% of the total unpaid balance (UPB).

Innovation

Innovation is essential for VEL to stay competitive in the real estate finance industry. The company invests in technology and process improvements to enhance efficiency and customer experience.

For example, VEL has developed customized technology solutions that streamline loan origination processes, thereby reducing costs and improving turnaround times. The annualized yield on the total portfolio was reported at 9.18% for the three months ended September 30, 2024, indicating effective management of loan yields through innovative practices.

Collaboration

Collaboration is vital to VEL's operational success. The company fosters strong relationships with independent mortgage brokers, enabling it to expand its reach and enhance service delivery.

Through its network of independent mortgage brokers, VEL has built a scalable infrastructure capable of responding quickly to market changes, which is critical in a fragmented market. The emphasis on collaboration supports the company’s goal of being a preferred brand in the investor real estate loan market.

Excellence

Excellence is a guiding principle at VEL, driving the company to achieve high performance in all aspects of its operations.

For the nine months ended September 30, 2024, VEL reported a net income of $47.8 million, an increase from $34.9 million in the same period of 2023. This growth reflects the company’s commitment to excellence in financial performance, operational efficiency, and customer satisfaction.

Updated on 16 Nov 2024

Resources:

1. Velocity Financial, Inc. (VEL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Velocity Financial, Inc. (VEL)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Velocity Financial, Inc. (VEL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.