Velocity Financial, Inc. (NYSE:VEL) Q3 2022 Earnings Conference Call November 3, 2022 5:00 PM ET

Company Participants

Chris Oltmann – Treasurer

Chris Farrar – President and Chief Executive Officer

Mark Szczepaniak – Chief Financial Officer

Conference Call Participants

Steve Delaney – JMP Securities

Operator

Good afternoon, and welcome to the Velocity Financial, Inc. Third Quarter 2022 Conference Call. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I’d now like to turn the conference over to Chris Oltmann, Treasurer. Please go ahead.

Chris Oltmann

Thank you, Ari. Hello, everyone, and thank you for joining us today for the discussion of Velocity Financial’s third quarter 2022 results. Joining me today are Chris Farrar, Velocity’s President and Chief Executive Officer; and Mark Szczepaniak, Velocity’s Chief Financial Officer.

Earlier this afternoon, we released our third quarter 2022 press release and the accompanying presentation, which are available on our Investor Relations website.

I’d like to remind everybody that today’s call may include forward-looking statements, which are uncertain and outside of the company’s control and actual results may differ materially. For a discussion of some of the risks and other factors that could affect results, please see the risk factors and other cautionary statements made in our communications with shareholders, including the risk factors disclosed in our filings with the Securities and Exchange Commission.

Please also note that the content of this conference call contains time-sensitive information that is accurate only as of today, and we do not undertake any duty to update forward-looking statements. We may also reserve to certain non-GAAP measures on this call. For reconciliations of these non-GAAP measures, you should refer to the earnings materials in our Investor Relations website. Finally, today’s call is being recorded and will be available on the company’s website later today.

And with that, I will now turn the call over to Chris Farrar.

Chris Farrar

Thanks, Chris, and we appreciate everyone joining the call today. After the close, we reported another very strong quarter of performance despite continued market headwinds. Our originations were consistent with the prior quarter as we continue to raise rates based on the general rise in our underlying benchmarks. Our delinquency level has returned to a more typical range, and we’re still recognizing impressive gains from resolved assets by our special servicing team.

Real estate markets softening to a more balanced level as investors adjust to the change in federal reserve policy. Unlike many originators, a large portion of our earnings come from our in-place portfolio, which allows us to manage origination volumes appropriately. We’re still experiencing strong borrower demand for new loans, but have recently begun to tighten our credit policy as we can be choosy about deploying our capital.