Velocity Financial, Inc. acquires majority stake in Century Health & Housing Capital
WESTLAKE VILLAGE, CA – (COMMERCIAL THREAD) – Velocity Financial, Inc. (âVelocityâ or the âCompanyâ) (NYSE: VEL), a leading provider of small-value investor loans, today announced that it has acquired a controlling interest in Century Health & Housing Capital (âCenturyâ).
Founded in 1992, Century is a licensed “Ginnie Mae” issuer / service agent that provides Federal Housing Administration (FHA) insured mortgage financing for multi-family dwellings, senior housing and long-term care facilities. assisted living. Century issues loans through its direct borrower origination channel and manages loans through its in-house service platform, which enables the formation of long-term relationships with its clients and promotes strong portfolio retention. Century issued $ 158 million of outstanding principal balance (UPB) of loans for the 11 months ended November 30, 2021 and manages a portfolio of services of more than $ 500 million in UPB.
Highlights of the transaction:
Expands Growth Opportunities Through New Products for Velocity’s Broker Network
Small-Cap, Fee-Based Business Diversifies Revenue and Improves Return on Equity
Immediate profitability of EPS and ROE with minimal impact on book value
Stable and sustainable MSR income thanks to long-term loan characteristics
Substantial organic growth opportunity by leveraging Velocity’s national origination footprint
Century’s focus on government-insured products acts as a natural hedge through market cycles
Longer term opportunity to further expand the product line
The Century acquisition expands Velocity’s commercial mortgage product offering through growth into a new channel and the ability to offer new products to Velocity’s broker network. The addition of Century is expected to have an immediate impact on Velocity’s earnings with minimal impact on tangible book value. The transaction also diversifies Velocity’s revenue with fee-based origination and service revenue that generates strong returns on capital and is sustainable through market cycles, in addition to providing the opportunity for Century to leverage leveraged Velocity’s technology platform to expand their northeast-focused origination footprint. .
âThe entire Century team is thrilled to join the Velocity family and we look forward to seizing the opportunities this transaction offers to both companies,â said Kyle Perry, CEO of Century. âVelocity’s national presence and operational capabilities will significantly increase our ability to grow customer relationships and origination volume. ”
âWe are very excited to partner with a proven leader from Kyle and accelerate the growth of the Century platform in this important credit segment. We believe long-term demographic trends will be positive winds for the healthcare lending industry in particular, âsaid Chris Farrar, President and CEO. âThe ability to offer government insured products to our brokers will drive the growth of incremental origination and further expand our product menu in the future. ”
About Velocity Financial, Inc.
Headquartered in Westlake Village, Calif., Velocity Financial, Inc. (NYSE: VEL) is a vertically integrated real estate finance company that creates and manages loans to investors secured by 1-4 unit residential rental units and small commercial properties. . Velocity provides loans nationwide through an extensive network of independent mortgage brokers that it has built and refined over the past 17 years.
About the century
Founded in 1992, Century provides government-backed mortgage financing to the multi-family housing industry, senior residences and long-term care facilities and hospitals. Century is a Federal Housing Administration (“FHA”) approved mortgagee and Governmental National Mortgage Association (“Ginnie Mae”) issuer / service including approvals for the Multi-Family Expedited Processing (MAP) programs. FHA and LEAN healthcare lender. Century also acts as a financial advisor for non-FHA insured transactions and will help organize Bridge-to-HUD financing. Century is a relationship-oriented lender that not only creates, processes, underwrites and finances its own loans, but also manages its loans during the construction and permanent loan phases, allowing it to build long-term relationships with its clients. clients. Century’s mission is to provide its clients with personalized, responsive and professional service while focusing on their immediate financing needs and long-term goals.
Some of the statements contained in this press release may constitute forward-looking statements within the meaning of federal securities laws. Forward-looking statements relate to anticipated results, including the anticipated results of our majority acquisition of Century, expectations, projections, plans and strategies, anticipated events or trends and similar expressions relating to matters which are not facts. historical. In some cases, you can identify forward-looking statements by using forward-looking terminology such as “may”, “will”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “” Estimates “,” predicted “,” target “or” potential “or the negative of such words and expressions or similar words or expressions which are predictions or indicate future events or trends and which do not relate solely to historical questions. You can also identify forward-looking statements by discussing strategy, plans or intentions.
The forward-looking statements contained in this press release reflect our current views on future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ materially from those expressed or contemplated in any forward-looking statement. Although forward-looking statements reflect our projections, assumptions and good faith expectations, they are not guarantees of future results. Further, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except if required by applicable law. Factors that could cause our results to differ materially include, but are not limited to, (1) our ability to successfully integrate Century into our existing business and achieve expected synergies, (2) the continuing course and severity of the COVID-19 pandemic and its direct and indirect impacts, (3) general economic and real estate market conditions, (4) regulatory and / or legislative changes, (5) our clients’ continued interest in loans and doing business with us, (6) market conditions and investors’ interest in our securitizations and (7) changes in federal fiscal and monetary policies.
Additional information relating to these and other factors that could cause future results to differ materially from those expressed or contemplated in forward-looking statements can be found in the section entitled âRisk Factorsâ in our Form 10-Q filed with the SEC on May 14, 2020, along with other caveats we make in our current and periodic filings with the SEC. These documents are publicly available on our Investor Relations webpage at www.velfinance.com.