Velocity Financial Announces Conversion of Series A Preferred Shares


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WESTLAKE VILLAGE, Calif .– (BUSINESS WIRE) – Velocity Financial, Inc. (NYSE: VEL), (“Velocity” or the “Company”), a leading provider of low-value investor loans, announced today the voluntary conversion of the 45,000 outstanding shares of the Company’s Series A convertible preferred shares into 11,688,310 Velocity common shares.

Following the conversion, the $ 90 million liquidation preference value of the Series A convertible preferred shares, previously reflected as mezzanine capital in our statements of financial position, has been reclassified to permanent equity. Following the Conversion, the Company will no longer have any outstanding Convertible Preferred Shares Series A or any outstanding shares with liquidation preference.

Velocity’s equity as at June 30, 2021 was $ 233 million. For illustrative purposes, if the conversion had taken place on June 30, 2021, equity would have been $ 323 million.

“The successful conversion of the Series A Convertible Preferred Shares eliminates uncertainties regarding the preferred stock liquidation preference and further strengthens the capital structure of the company,” said Mark Szczepaniak, Chief Financial Officer. “The opportunity to convert our preferred shares is a result of Velocity’s strong financial performance and the momentum we have developed to develop our origination platform.”

About Velocity Financial, Inc.

Based in Westlake Village, Calif., Velocity is a vertically integrated real estate finance company that creates and manages investor loans secured by 1-4 unit residential rental housing 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 16 years. For more information, please visit the Company’s investor relations website at www.velfinance.com.

Investors and media:

Chris Oltmann

(818) 532-3708

Source: Velocity Financial, Inc.

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