Velocity Financial Inc. missed Wall Street expectations on earnings but beat on revenue for the fourth quarter.
The Westlake Village alternative lender to owners of one to four unit residential rental and small commercial properties reported on Thursday net income of $8.5 million (25 cents a share) for the quarter ending Dec. 31, compared with net income of $8.4 million (24 cents) in the same period a year earlier. Revenue increased by 37% from the fourth quarter of the prior year to $32 million.
Analysts on average expected earnings of 29 cents on revenue of $27.7 million, according to Thomson Financial Network.
Christopher Farrar, the chief executive of Velocity, said that last year was “an exceptional” one for the company as it delivered record loan production and portfolio growth of 36%.
“While the market environment presented us with challenges resulting from the precipitous rise in interest rates, Velocity’s extensive track record of solid performance allowed us to issue six securitizations throughout the year, facilitating our impressive portfolio growth,” Farrar said in a statement. “We see considerable potential to grow our core business, which is underpinned by persistent demand for income-generating rental properties and small businesses that want to own the property where they operate.”
Velocity’s total loan portfolio was $3.5 billion as of the end of the fourth quarter, an increase of 36% from the same period a year earlier.
Shares in Velocity (VEL) closed down 16 cents, or about 1.8%, to $8.84 on the New York Stock Exchange, on a day when the Dow Jones closed down nearly 1.7%.