Velocity Financial, Inc. Acquires Majority Interest in Century Health & Housing Capital
28 Dezembro 2021 - 6:15PM
Business Wire
Velocity Financial, Inc. (“Velocity” or the “Company”) (NYSE:
VEL), a leading provider of small balance investor loans, today
announced it has acquired a majority stake in Century Health &
Housing Capital (“Century”).
Founded in 1992, Century is a licensed “Ginnie Mae”
issuer/servicer that provides government-insured Federal Housing
Administration (FHA) mortgage financing for multifamily housing,
senior housing and long-term care/assisted living facilities.
Century originates loans through its borrower-direct origination
channel and services the loans through its in-house servicing
platform, which enables the formation of long-term relationships
with its clients and drives strong portfolio retention. Century
issued $158 million in unpaid principal balance (UPB) of loans for
the 11 months ended November 30, 2021, and manages a servicing
portfolio in excess of $500 million in UPB.
Transaction Highlights:
- Expands growth opportunities via new products for Velocity’s
broker network
- Capital light, fee-based business diversifies revenue and
enhances return on equity
- Immediately accretive to EPS and ROE with minimal book value
impact
- Stable and durable MSR income due to long term loan
characteristics
- Substantial organic growth opportunity by leveraging Velocity’s
national origination footprint
- Century’s government-insured product focus acts as a natural
hedge through market cycles
- Longer-term opportunity to further expand the product
suite
The Century acquisition expands Velocity’s commercial mortgage
product offerings through growth in a new channel and the ability
to offer new products to Velocity’s broker network. The addition of
Century is expected to be immediately accretive to Velocity’s
earnings with minimal impact to tangible book value. The
transaction also diversifies Velocity’s revenue with fee-based
origination and servicing income which generates strong returns on
capital and is durable through market cycles, in addition to
providing the opportunity for Century to leverage Velocity’s
technology-driven platform to broaden their Northeast-focused
origination footprint.
“The entire Century team is pleased to be joining Velocity’s
family and we look forward to realizing the opportunities this
transaction offers to both companies,” said Kyle Perry, Century’s
Chief Executive Officer. “Velocity’s national footprint and
operational capabilities will significantly expand our ability to
grow customer relationships and origination volume.”
“We are very excited to partner with a proven leader in Kyle and
accelerate the growth of the Century platform in this important
lending segment. We believe the long-term demographic trends will
be a strong tailwind for the healthcare lending area in
particular,” said Chris Farrar, President and Chief Executive
Officer. “The ability to offer government-insured products to our
brokers will drive incremental origination growth and enables
further expansion of our product menu in the future.”
About Velocity Financial,
Inc.
Based in Westlake Village, California, Velocity Financial, Inc.
(NYSE: VEL) is a vertically integrated real estate finance company
that originates and manages investor loans secured by 1-4 unit
residential rental and small commercial properties. Velocity
originates loans nationwide across an extensive network of
independent mortgage brokers it has built and refined over 17
years.
About Century
Founded in 1992, Century provides government-insured mortgage
financing for the multifamily housing industry, senior living and
long-term care facilities and hospitals. Century is an approved
Federal Housing Administration (“FHA”) mortgagee and Governmental
National Mortgage Association (“Ginnie Mae”) issuer/servicer,
including approvals for FHA Multifamily Accelerated Processing
(MAP) and LEAN healthcare lender programs. Century also acts as
financial advisor for non-FHA insured transactions and will assist
in arranging Bridge-to-HUD financing. Century is a relationship
driven lender that not only originates, processes, underwrites and
funds its own loans, but also services its loans during both the
construction and permanent loan stages – enabling it to form long
term relationships with 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.
Forward Looking
Statements
Some of the statements contained in this press release may
constitute forward-looking statements within the meaning of the
federal securities laws. Forward-looking statements relate to
anticipated results, including anticipated results from our
majority acquisition of Century, expectations, projections, plans
and strategies, anticipated events or trends, and similar
expressions concerning matters that are not historical facts. In
some cases, you can identify forward-looking statements by the use
of forward-looking terminology such as “may,” “will,” “expects,”
“intends,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “goal,” or “potential” or the negative of these words
and phrases or similar words or phrases that are predictions of or
indicate future events or trends and which do not relate solely to
historical matters. You can also identify forward-looking
statements by discussions of strategy, plans, or intentions.
The forward-looking statements contained in this press release
reflect our current views about future events and are subject to
numerous known and unknown risks, uncertainties, assumptions, and
changes in circumstances that may cause actual results to differ
significantly from those expressed or contemplated in any
forward-looking statement. While forward-looking statements reflect
our good faith projections, assumptions, and expectations, they are
not guarantees of future results. Furthermore, 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 as 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 with our existing
business and realize anticipated synergies, (2) the continued
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
customers' continued interest in loans and doing business with us,
(6) market conditions and investor interest in our securitizations
and (7) changes in federal government 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 any forward-looking statements can be
found in the section titled ‘‘Risk Factors” in our Form 10-Q filed
with the SEC on May 14, 2020, as well as other cautionary
statements we make in our current and periodic filings with the
SEC. Such filings are available publicly on our Investor Relations
web page at www.velfinance.com.
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Velocity Investors and
Media: Chris Oltmann (818) 532-3708
Velocity Financial (NYSE:VEL)
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