EX-99 2 d811857dex99.htm EX-99 EX-99

Exhibit 99

 

LOGO

 

     

Investors and Media: 

Chris Oltmann

(818) 532-3708

Velocity Financial, Inc. Reports

Fourth Quarter and Full Year 2024 Results

Fourth Quarter Highlights:

 

•  

Net income of $20.6 million, up 18.6% from $17.4 million for 4Q23. Diluted EPS of $0.57, up $0.07 from $0.50 per share for 4Q23

 

•  

Core net income(1) of $21.8 million, an increase of 34.6% from $16.2 million for 4Q23. Core diluted EPS(1) of $0.60, up from $0.46 per share for 4Q23

 

•  

Loan production of $563.5 million in UPB, an 18.2% and 60.0% increase from 3Q24 and 4Q23, respectively

 

  •  

Year-to-date 2025 loan production through February of $429.4 million

 

•  

Nonperforming loans (NPL) as a percentage of Held for Investment (HFI)(2) loans was 10.7%, up slightly from 10.6% as of September 30, 2024, and 9.7% as of December 31, 2023, respectively

 

•  

Resolutions of NPL and real estate owned (REO) totaled $79.4 million in UPB

 

  •  

Realized gains of $5.6 million or 107.0% of UPB resolved

 

•  

Portfolio net interest margin (NIM) of 3.70%, an increase of 10 bps from 3.60% for 3Q24 and 18 bps from 3.52% for 4Q23

 

•  

Completed the VCC 2024-5 and VCC 2024-6 securitizations totaling $292.9 million and 293.9 million, respectively, of securities issued

 

•  

Liquidity(3) of $95.9 million and total available warehouse line capacity of $435.0 million as of December 31, 2024

 

•  

Recourse debt to equity ratio of 1.2x

 

•  

GAAP Book value per common share of $15.70 as of December 31, 2024, a 16.4% increase from $13.49 as of December 31, 2023

 

•  

Issued $7.3 million in new common equity through Velocity At The Market (ATM) program

Westlake Village, CA – March 6, 2024 – Velocity Financial, Inc. (NYSE: VEL) (Velocity or the Company), a leader in business purpose loans, reported net income of $68.4 million and core net income of $72.9 million for the full year 2024, compared to net income of $52.3 million and core net income of $53.4 million for the full year 2023. Earnings and core earnings per diluted share were $1.91 and $2.03, respectively, for the full year 2024, compared to $1.52 and $1.54 for the full year 2023.

 

(1) 

Core income and Core EPS are non-GAAP measures that exclude nonrecurring and unusual activities from GAAP net income.

(2) 

Held for Investment (HFI) includes the unpaid principal balance of loans carried on an amortized cost basis and loans carried at fair value (FVO).

(3) 

Liquidity includes unrestricted cash reserves of $49.9 million and available liquidity in unfinanced loans of $46.0 million.

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Fourth Quarter and Full Year 2024 Results

 

“Velocity delivered impressive earnings in the fourth quarter and full year 2024,” said Chris Farrar, President and CEO. “The Company’s record full-year 2024 earnings were driven by continued strong production, which also reached record levels in 2024, on both a UPB and loans produced basis and by maintaining high underwriting standards. Our success resulted from ongoing initiatives to grow and streamline our loan production platform to capture a greater share of the large but fragmented business purpose loan market. I’m especially proud of our team’s ability to achieve outstanding production volume growth while remaining focused on maintaining strong returns with average loan coupons of 11 percent. This discipline is a key driver of our strong earnings and the reason we exceeded our 5x25 goal of $5 billion in UPB loan portfolio by 2025. Velocity is poised to build on our momentum to drive sustained earnings growth and enhanced long-term shareholder value.”

Fourth Quarter Operating Results

 

KEY PERFORMANCE INDICATORS                          

($ in thousands)

    4Q 2024     4Q 2023     $ Variance      % Variance  

Pretax income

    $ 32,038.2     $ 22,307.3     $ 9,730.8        43.6 % 

Net income

    $ 20,587.1     $ 17,354.6     $ 3,232.5        18.6 % 

Diluted earnings per share

    $ 0.57     $ 0.50     $ 0.07        15.0 % 

Core pretax income

    $ 33,464.0     $ 21,554.8     $ 11,909.2        55.3 % 

Core net income(a)

    $ 21,754.4     $ 16,161.5     $ 5,592.9        34.6 % 

Core diluted earnings per share(a)

    $ 0.60     $ 0.46     $ 0.14        30.5 % 

Pretax return on equity

      25.69 %      20.66 %      n.a.        24.3 % 

Core pretax return on equity(a)

      26.83 %      19.96 %      n.a.        34.4 % 

Net interest margin - portfolio

      3.70 %      3.52 %      n.a.        5.3 % 

Net interest margin - total company

      3.20 %      3.10 %      n.a.        3.2 % 

Average common equity

    $ 498,887.4     $ 431,891.2     $ 66,996.2        15.5 % 

 

(a) 

Core income, core diluted earnings per share and core pretax return on equity are non-GAAP measures. Please see the reconciliation to GAAP net income at the end of this release.

n.a.- not applicable

Discussion of results:

 

  •  

Net income for 4Q24 was $20.6 million, compared to $17.4 million for 4Q23

 

  •  

Driven by record production volumes and consistently strong loan resolution gains

 

  •  

Core net income was $21.8 million, compared to $16.2 million for 4Q23

 

  •  

4Q24 core adjustments included incentive compensation expenses and costs related to the Company’s employee stock purchase plan (ESPP)

 

  •  

Portfolio NIM for 4Q24 was 3.70%, compared to 3.52% for 4Q23, driven by consistent production-driven HFI portfolio growth and average loan coupons of 10.9% on 2024 loan production

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

TOTAL LOAN PORTFOLIO                         

($ of UPB in millions)

    4Q 2024     4Q 2023     $ Variance     % Variance  

Held for Investment

         

Investor 1-4 Rental

    $ 2,653.3     $ 2,224.8     $ 428.5       19.3 % 

Mixed Use

      560.5       474.9       85.6       18.0 % 

Multi-Family

      367.0       316.3       50.7       16.0 % 

Retail

      446.6       344.0       102.6       29.8 % 

Warehouse

      334.3       265.0       69.3       26.1 % 

All Other

      694.2       430.9       263.4       61.1 % 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 5,055.9     $ 4,055.9     $ 1,000.0       24.7 % 
  

 

 

    

 

 

    

 

 

    

 

 

  

Held for Sale

         

Investor 1-4 Rental

    $ —      $ 17.0     $ (17 )      (100.0 )% 

Government Insured Multifamily (CHHC)

      —        —        —        n.m.  

Multi-Family

      —        —        —        n.m.  

Warehouse

      —        —        —        n.m.  

All Other

      —        —        —        n.m.  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total Managed Loan Portfolio UPB

    $ 5,055.9     $ 4,072.9     $ 983.0       24.1 % 
  

 

 

    

 

 

    

 

 

    

 

 

  

Key loan portfolio metrics:

         

Total loan count

      12,932       10,477      

Weighted average loan to value

      66.6 %      67.8 %     

Weighted average coupon

      9.53 %      8.88 %     

Weighted average total portfolio yield

      9.34 %      8.70 %     

Weighted average portfolio debt cost

      6.14 %      5.75 %     

n.m. - non meaningful

Discussion of results:

 

  •  

Velocity’s total loan portfolio was $5.1 billion in UPB as of December 31, 2024, an increase of 24.1% from $4.1 billion in UPB as of December 31, 2023

 

  •  

Primarily driven by 19.3% Y/Y growth in loans collateralized by Investor 1-4 Rental properties and 61.1% Y/Y growth in loans collateralized by “Other” commercial properties

 

  •  

Loan prepayments totaled $203.2 million in UPB, an increase from $173.9 million for 3Q24, and $118.1 million for 4Q23

 

  •  

The UPB of fair value option (FVO) HFI loans was $2.7 billion, or 52.5% of total loans, as of December 31, 2024, an increase from $1.3 billion in UPB, or 30.7% as of December 31, 2023

 

  •  

The weighted average portfolio loan-to-value ratio was 66.6% as of December 31, 2024, down from 67.8% as of December 31, 2023, and below the five-quarter trailing average of 67.3%

 

  •  

The weighted average total portfolio yield was 9.34%, an increase of 64 bps from 4Q23, primarily driven by a corresponding increase in the weighted average loan coupons over the same period

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

  •  

Portfolio-related debt cost was 6.14%, an increase of 39 bps from 4Q23, driven by an increase in the weighted average securitized debt cost

 

LOAN PRODUCTION VOLUMES                            

($ in millions)

    4Q 2024      4Q 2023      $ Variance      % Variance  

Investor 1-4 Rental

    $ 199.9      $ 183.2      $ 16.7        9.1 % 

Traditional Commercial

      320.3        130.3        190.0        145.9 % 

Short-term

      38.7        38.6        0.0        0.1 % 

Government Insured Multifamily (CHHC)

      4.6        —         4.6        n.m.  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total loan production

    $ 563.5      $ 352.1      $ 211.3        60.0 % 
  

 

 

     

 

 

     

 

 

     

 

 

  

Acquisitions

    $ —       $ —         
  

 

 

     

 

 

        

n.m. - non meaningful

Discussion of results:

 

  •  

Loan production totaled $563.5 million in UPB, a 60.0% increase from $352.1 million for 4Q23 and the second-highest quarterly volume in the Company’s history

 

  •  

Traditional Commercial financing demand led Y/Y growth, increasing 145.9% from 4Q23, driven by a strategic focus on increasing investment in this fragmented and underserved market

 

  •  

The weighted average coupon (WAC) on 4Q24 HFI loan production was 10.8%, a modest decrease from 11.2% for 4Q23

 

  •  

Government Insured Multifamily loans are originated by our subsidiary CHHC and sold to investors for cash gains shortly after closing

 

HFI PORTFOLIO CREDIT PERFORMANCE INDICATORS                          

($ in thousands)

    4Q 2024     4Q 2023     $ Variance      % Variance  

Nonperforming loans(a)

    $ 539,438.0     $ 394,562.0     $ 144,876.0        36.7 % 

Total HFI loans

    $ 5,055,937.0     $ 4,055,936.0     $ 1,000,001.0        24.7 % 

Nonperforming loans % total HFI loans

      10.7 %      9.7 %      n.a.        9.7 % 

Average nonperforming loans subject to CECL reserve (b)

    $ 314,510.7     $ 332,971.1     $ (18,460.4 )       (5.5 )% 

Loan loss reserve

    $ 4,174.0     $ 4,768.9     $ (594.9 )       (12.5 )% 

Total charge offs

    $ 698.8     $ 743.5     $ (44.7 )       (6.0 )% 

Charge-offs as a % of avg. nonperforming CECL loans(c)

      0.9 %      0.9 %      n.a.        (0.5 )% 

Gain on transfer to REO

    $ 2,381.7     $ 1,403.0     $ 978.7        69.8 % 

REO valuations, net

    $ (2,217.3 )    $ (1,417.0 )    $ (800.3 )       56.5 % 

Gain (loss) on sale of REO

    $ 3,411.2     $ 456.0     $ 2,955.2        648.1 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Total gain on REO

    $ 3,575.5     $ 442.0     $ 3,133.5        708.9 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

 

(a) 

Total HFI nonperforming/nonaccrual loans include loans 90+ days past due, loans in foreclosure, bankruptcy and on nonaccrual.

(b) 

Reflects monthly average nonperforming loans held for investment, excluding FVO loans, during the period.

(c) 

Reflects the annualized quarter-to-date charge-offs to average nonperforming loans for the period.

n.a.- not applicable

Discussion of results:

 

  •  

Nonperforming loans (NPL) totaled $539.4 million in UPB as of December 31, 2024, or 10.7% of loans HFI, compared to $394.6 million and 9.7% as of December 31, 2023

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

  •  

Charge-offs for 4Q24 totaled $698.8 thousand, compared to $743.5 thousand for 4Q23

 

  •  

The trailing five-quarter charge-off average was $502.5 thousand

 

  •  

For 4Q24, total gain on REO was $3.6 million, up from a gain of $0.4 million for 4Q23, driven by gains on sale of REO and loans transferred to REO

 

  •  

The loan loss reserve totaled $4.2 million as of December 31, 2024, a 12.5% decrease from $4.8 million as of December 31, 2023

 

  •  

Mainly driven by the increase in the valuation of the real estate underlying the individually assessed NPL portfolio

 

  •  

The CECL reserve rate was 0.17% (CECL Reserve as % of Amortized Cost HFI loans), which was consistent with the recent five-quarter average rate of 0.19% and within management’s expected range of 0.15% to 0.20%

 

NET REVENUES                            

($ in thousands)

    4Q 2024      4Q 2023      $ Variance      % Variance  

Interest income

    $ 113,484.1      $ 86,269.5      $ 27,214.6        31.5 % 

Interest expense - portfolio related

      (68,484.4 )       (51,405.0 )       (17,079.4 )       33.2 % 
  

 

 

     

 

 

     

 

 

     

 

 

  

Net Interest Income - portfolio related

      44,999.7        34,864.5        10,135.2        29.1 % 

Interest expense - corporate debt

      (6,142.8 )       (4,139.9 )       (2,002.8 )       48.4 % 

Loan loss provision

      (22.0 )       (826.7 )       804.7        (97.3 )% 
  

 

 

     

 

 

     

 

 

     

 

 

  

Net interest income after provision for loan losses

    $ 38,834.9      $ 29,896.8      $ 8,938.0        29.9 % 
  

 

 

     

 

 

     

 

 

     

 

 

  

Gain on disposition of loans

      2,784.0        1,482.0        1,302.0        87.9 % 

Unrealized (loss) gain on fair value loans

      (15,722.6 )       39,367.4        (55,090.0 )       (139.9 )% 

Unrealized gain (loss) on fair value of securitized debt

      34,538.5        (24,085.1 )       58,623.6        (243.4 )% 

Unrealized gain/(loss) on mortgage servicing rights

      1,297.0        (1,208.2 )       2,505.2        (207.4 )% 

Origination fee income

      7,245.1        3,981.4        3,263.7        82.0 % 

Interest income on cash balance

      1,451.3        1,715.6        (264.3 )       (15.4 )% 

Other operating income (expense)

      736.4        418.1        318.3        76.1 % 
  

 

 

     

 

 

     

 

 

     

 

 

  

Total other operating income (expense)

    $ 32,329.7      $ 21,670.2      $ 10,659.5        49.2 % 
  

 

 

     

 

 

     

 

 

     

 

 

  

Net revenue

    $ 71,164.6      $ 51,567.1      $ 19,597.5        38.0 % 
  

 

 

     

 

 

     

 

 

     

 

 

  

Discussion of results:

 

  •  

Net Revenue for 4Q24 was $71.2 million, an increase of 38.0% from $51.6 million for 4Q23

 

  •  

Driven by continued strong production volumes, unrealized FV gains and NPL resolutions

 

  •  

Total net interest income for 4Q24 was $38.8 million, a 29.9% increase from $29.9 million for 4Q23

 

  •  

Portfolio net Interest income was $45.0 million for 4Q24, an increase of 29.1% from 4Q23 resulting from portfolio growth and a 19 bps increase in NIM

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

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Total other operating income was $32.3 million for 4Q24, an increase from $21.7 million for 4Q23

 

  •  

Origination fee income totaled $7.2 million, resulting from 4Q24 new loan production

 

  •  

Net unrealized FVO gains on loans and securitized debt were $18.8 million, compared to a net gain of $15.3 million for 4Q23

 

  •  

Gain on disposition of loans totaled $2.8 million for 4Q24, driven mainly by loans transferred to REO

 

OPERATING EXPENSES                            

($ in thousands)

    4Q 2024      4Q 2023      $ Variance      % Variance  

Compensation and employee benefits

    $ 20,083.5      $ 15,143.37      $ 4,940.2        32.6 % 

Origination expense

      815.6        172.5        643.1        372.8 % 

Securitization expenses

      7,103.1        2,709.2        4,394.0        162.2 % 

Rent and occupancy

      295.8        550.6        (254.8 )       (46.3 )% 

Loan servicing

      6,749.1        4,635.8        2,113.3        45.6 % 

Professional fees

      1,476.9        1,732.8        (256.0 )       (14.8 )% 

Real estate owned, net

      268.4        2,068.2        (1,799.8 )       (87.0 )% 

Other expenses

      2,335.3        2,248.3        87.0        3.9 % 
  

 

 

     

 

 

     

 

 

     

 

 

  

Total operating expenses

    $ 39,126.8      $ 29,259.7      $ 9,867.0        33.7 % 
  

 

 

     

 

 

     

 

 

     

 

 

  

Discussion of results:

 

  •  

Operating expenses totaled $39.1 million for 4Q24, an increase of 33.7% from 4Q23, primarily driven by securitization expenses for two securitization issuances during the quarter and production-driven compensation expenses

 

  •  

Compensation expense totaled $20.1 million, compared to $15.1 million for 4Q23

 

  •  

Primarily driven by higher commissions on increased production volume

 

  •  

Securitization expenses totaled $7.1 million from the issuance of two securitizations during the quarter, compared to costs of $2.7 million for one securitization during 4Q23

 

  •  

Loan servicing expense totaled $6.7 million, a 45.6% increase from $4.6 million for 4Q23, driven by portfolio growth and an increase in the percentage of securitized loans in the portfolio

 

  •  

Professional fees totaled $1.5 million, a 14.8% decrease from $1.7 million for 4Q23, driven by decreased legal expenses

 

  •  

REO expenses totaled $0.3 million, an 87.0% decrease from $2.1 million for 4Q23, driven by $3.4 million of realized gains on REO sales in 4Q24

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

SECURITIZATIONS                             
($ in thousands)    Securities      Balance at            Balance at         

Trusts

    Issued      12/31/2024      W.A. Rate     12/31/2023      W.A. Rate  

2017-2 Trust

      245,601        33,012        4.09 %      45,869        3.97 % 

2018-1 Trust

      176,816        24,482        4.13 %      33,505        4.03 % 

2018-2 Trust

      307,988        59,091        4.47 %      76,871        4.48 % 

2019-1 Trust

      235,580        60,459        4.07 %      76,391        4.07 % 

2019-2 Trust

      207,020        46,872        3.41 %      66,340        3.42 % 

2019-3 Trust

      154,419        46,827        3.30 %      58,089        3.29 % 

2020-1 Trust

      248,700        91,135        2.88 %      106,976        2.85 % 

2020-2 Trust

      96,352        —         —        45,180        4.61 % 

2021-1 Trust

      251,301        152,995        1.76 %      171,748        1.76 % 

2021-2 Trust

      194,918        125,391        2.04 %      143,797        2.02 % 

2021-3 Trust

      204,205        136,510        2.47 %      158,043        2.46 % 

2021-4 Trust

      319,116        214,284        3.25 %      244,919        3.22 % 

2022-1 Trust

      273,594        217,190        3.94 %      236,358        3.93 % 

2022-2 Trust

      241,388        191,764        5.06 %      210,217        5.07 % 

2022-MC1 Trust

      84,967        12,041        6.90 %      31,508        6.90 % 

2022-3 Trust

      296,323        234,647        5.72 %      257,047        5.70 % 

2022-4 Trust

      308,357        232,064        6.21 %      274,419        6.24 % 

2022-5 Trust

      188,754        132,519        7.04 %      162,925        7.06 % 

2023-1 Trust

      198,715        144,724        7.02 %      177,250        7.02 % 

2023-1R Trust

      64,833        38,508        7.57 %      58,237        7.68 % 

2023-2 Trust

      202,210        157,198        7.33 %      188,805        7.19 % 

2023-RTL1 Trust

      81,608        81,608        8.24 %      81,608        8.24 % 

2023-3 Trust

      234,741        195,799        7.94 %      227,228        7.82 % 

2023-4 Trust

      202,890        181,307        8.33 %      201,813        8.38 % 

2024-1 Trust

      209,862        178,234        7.75 %      

2024-2 Trust

      286,235        260,500        7.11 %      

2024-3 Trust

      204,599        191,583        7.20 %      

2024-4 Trust

      253,612        243,945        7.08 %      

2024-5 Trust

      292,880        290,552        6.14 %      

2024-6 Trust

      293,895        293,767        5.92 %      
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  
   $ 6,561,479      $ 4,269,008        5.75 %    $ 3,335,143        5.22 % 
  

 

 

     

 

 

       

 

 

     

Discussion of results

 

  •  

The weighted average rate on Velocity’s outstanding securitizations was 5.75% as of December 31, 2024, an increase of 53 bps from December 31, 2023

 

  •  

The Company completed two securitizations during 4Q24, totaling $586.8 million of securities issued with a weighted average rate of 6.0%

 

  •  

Down from a weighted average rate of 8.3% for securitizations issued during 4Q23

 

  •  

In 1Q25, the Company completed the VCC 2025-1 securitization totaling $351.6 million of securities issued with a weighted average rate of 6.6%

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

RESOLUTION ACTIVITIES

LONG-TERM LOANS

 

RESOLUTION ACTIVITY    FOURTH QUARTER 2024     FOURTH QUARTER 2023  

($ in thousands)

    UPB $      Gain / (Loss)
$		     UPB $      Gain /
(Loss) $		  

Paid in full

    $ 32,078.3      $ 1,810.0     $ 22,341.8      $ 826.2  

Paid current

      19,830.3        182.4       36,025.9        206.0  

REO sold (a)

      4,821.4        3,243.0       1,588.1        140.4  
  

 

 

     

 

 

    

 

 

     

 

 

  

Total resolutions

    $ 56,730      $ 5,235     $ 59,955.8      $ 1,172.5  
  

 

 

     

 

 

    

 

 

     

 

 

  

Resolutions as a % of nonperforming UPB

         109.2 %         102.0 % 

SHORT-TERM AND FORBEARANCE LOANS

 

RESOLUTION ACTIVITY    FOURTH QUARTER 2024     FOURTH QUARTER 2023  

($ in thousands)

    UPB $      Gain / (Loss)
$		     UPB $      Gain /
(Loss) $		  

Paid in full

    $ 9,858.1      $ 170.9     $ 2,770.0      $ 37.0  

Paid current

      7,536.0        1.2       7,560.3        12.9  

REO sold

      5,233.2        168.1       603.8        315.9  
  

 

 

     

 

 

    

 

 

     

 

 

  

Total resolutions

    $ 22,627      $ 340.2     $ 10,934.1      $ 365.8  
  

 

 

     

 

 

    

 

 

     

 

 

  

Resolutions as a % of nonperforming UPB

         101.5 %         103.3 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

Grand total resolutions

    $ 79,357.3      $ 5,575.6     $ 70,889.8      $ 1,538.3  
  

 

 

     

 

 

    

 

 

     

 

 

  

Grand total resolutions as a % of nonperforming UPB

         107.0 %         102.2 % 

Discussion of results:

 

  •  

NPL resolution totaled $79.4 million in UPB, realizing 107.0% of UPB resolved compared to $70.1 million in UPB and realization of 102.2% of UPB resolved for 4Q23

 

  •  

The UPB of loan resolutions in 4Q24 was in line with the recent five-quarter resolution average of $70.8 million in UPB, and the gain was significantly above the 103.3% average of UPB resolved

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

Full Year 2024 Operating Results

 

FULL-YEAR OPERATING RESULTS                          

($ in thousands)

    FY 2024     FY 2023     $ Variance      % Variance  

Investor 1-4 Rental

    $ 771,129.8     $ 616,837.0     $ 154,292.8        25.0 % 

Traditional Commercial

      836,763.0       361,958.5       474,804.5        131.2 % 

Short-term

      209,707.4       120,456.7       89,250.7        74.1 % 

Government Insured Multifamily (CHHC)

      23,553.8       19,088.2       4,465.6        23.4 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Total loan production

    $ 1,841,154.0     $ 1,118,340.4     $ 722,813.6        64.6 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Average loans

    $ 4,488,300.8     $ 3,725,197.0     $ 763,103.8        20.5 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Portfolio yield

      9.06 %      8.34 %      n.a.        8.7 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Average debt - portfolio related

    $ 4,076,596.4     $ 3,341,411.0     $ 735,185.4        22.0 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Cost of funds - portfolio related

      6.06 %      5.58 %      n.a.        8.7 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Net Interest Margin - Portfolio

      3.56 %      3.34 %      n.a.        6.5 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Total gains on NPL resolutions

    $ 10,190.9     $ 5,521.0     $ 4,670        84.6 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Nonperforming loans % total HFI loans

      10.7 %      9.7 %      n.a.        9.7 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Total Net interest income(a)

    $ 134,631.1     $ 105,836.3     $ 28,794.9        27.2 % 

Total other income

    $ 101,397.66     $ 65,909.84     $ 35,487.82        53.8 % 

Total expenses(b)

    $ 167,610.82     $ 119,473.20     $ 48,137.62        40.3 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Net income

    $ 68,419.0     $ 52,272.6     $ 16,146.4        30.9 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Diluted EPS

    $ 1.91     $ 1.52     $ 0.40        26.2 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Core net income(c)

    $ 72,870.5     $ 53,384.3     $ 19,486.3        36.5 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Core diluted EPS(c)

    $ 2.03     $ 1.54     $ 0.49        31.8 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Pretax return on equity

      20.3 %      17.5 %      n.a.        16.2 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

 

(a) 

After provision for loan losses.

(b) 

Total expenses includes total operating expenses, income taxes and income attributable to minority interest.

(c) 

Core income, core diluted earnings per share and core pretax return on equity are non-GAAP measures. Please see the reconciliation to GAAP net income

n.a.- not applicable

 

     Year Ended               

($ in thousands)

    12/31/2024     12/31/2023     $ Variance      % Variance  

Average nonperforming loans for the period (1)

    $ 318,858     $ 328,105.0     $ (9,247.0 )       (2.8 )% 

Charge-offs

      1,768.1       2,039.6       (271.5 )       (13.3 )% 

Charge-offs / Average nonperforming loans for the period (1)

      0.55 %      0.62 %      —         (10.8 )% 

Gain on REO:

          

Gain on transfer of REO

      8,703.9       7,411.9       1,292.0        17.4 % 

Gain on sale of REO

      4,275.3       568.0       3,707.4        652.7 % 

REO valuations, net

      (6,120.8 )      (3,903.4 )      (2,217.4 )       56.8 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

Total gain on REO (2)

    $ 6,858.5     $ 4,076.5     $ 2,781.9        68.2 % 
  

 

 

    

 

 

    

 

 

     

 

 

  

 

(1) 

Reflects the monthly average of nonperforming loans held for investment, excluding FVO loans, during the period

(2) 

Total gain on REO excludes charge-offs.

Discussion of full-year 2024 results:

 

  •  

Loan production for the full year 2024 totaled $1.8 billion in UPB, a 64.6% increase from $1.1 billion in UPB for 2023

 

  •  

2024 loan production volume reached the highest annual volume in Velocity’s history

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

  •  

Driven by strategic growth of our origination platform and focus on providing financing solutions to underserved market segments

 

  •  

Portfolio net interest margin (NIM) was 3.56% for FY 2024, a 22 bps increase from 3.34% for FY 2023

 

  •  

Strong portfolio growth and disciplined focus on maintaining a weighted average coupon on FY 2024 loan production of 10.9%

 

  •  

Realized gains on the NPL loan resolutions of $10.2 million, or 103.6% of UPB resolved, compared to $5.5 million, or 102.5% for FY 2023

 

  •  

NPLs as a percentage of average loans HFI was 10.7% as of December 31, 2024, compared to 9.7% as of December 31, 2023

 

  •  

Charge-offs for FY 2024 totaled $1.8 million, compared to $2.0 million for FY 2023

 

  •  

Net REO gains were $6.9 million, up from a net gain of $4.1 million for FY 2023, driven by gains from loans transferred to REO and positive REO sale resolutions from our special servicing efforts.

 

  •  

Net income totaled $68.4 million for FY 2024, a 30.9% increase from $52.3 million for FY 2023

 

  •  

Net interest income totaled $134.6 million, a 27.2% increase from $105.8 million in FY 2023

 

  •  

Other income totaled $101.4 million, a 53.8% increase from $65.9 million for FY 2023

 

  •  

Net unrealized FVO gains on loans and securitized debt were $58.4 million, compared to a net gain of $38.8 million for FY 2023

 

  •  

For FY 2024, total expenses were $167.6 million, a 40.3% increase from $119.5 million in FY 2023, driven by higher commissions and increased operating expenses to support our growth.

 

  •  

Core net income(1) totaled $72.9 million, a 36.5% increase from $53.4 million for FY 2023

 

  •  

Core income adjustments totaled $4.5 million, compared to $1.1 million for FY 2023

 

  •  

Core diluted EPS(1) was $2.03 per share, a 31.8% increase from $1.54 per share for FY 2023

 

  •  

Pretax return on equity was 20.3% compared to 17.5% for FY 2023

###

 

(1)

Core income and Core EPS are non-GAAP measures that exclude nonrecurring and unusual activities from GAAP net income.

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

Velocity’s executive management team will host a conference call and webcast on March 6th, 2025, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to review 4Q24 and the full-year 2024 financial results.

Webcast Information

The conference call will be webcast live in listen-only mode and can be accessed through the Events and Presentations section of the Velocity Financial Investor Relations website: https://www.velfinance.com/events-and-presentations. To listen to the webcast, please visit Velocity’s website at least 15 minutes before the call to register, download, and install any needed software. An audio replay of the call will also be available on Velocity’s website after the conference call is completed.

Conference Call Information

To participate by phone, please dial in 15 minutes before the start time to allow for wait times to access the conference call. The live conference call will be accessible by dialing 1-833-316-0544 in the U.S. and Canada and 1-412-317-5725 for international callers. Callers should ask to join the Velocity Financial, Inc. conference call.

A replay of the call will be available through midnight on March 28, 2024, and can be accessed by dialing 1-877-344-7529 in the U.S. and 855-669-9658 in Canada or 1-412-317-0088 internationally. The passcode for the replay is 2785466. The replay will also be available on the Investor Relations section of the Company’s website under “Events and Presentations.”

About Velocity Financial, Inc.

Based in Westlake Village, California, Velocity is a vertically integrated real estate finance company that primarily originates and manages business purpose loans secured by 1-4 unit residential rental and small commercial properties. Velocity originates loans nationwide across an extensive network of independent mortgage brokers built and refined over 20 years.

Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with United States generally accepted accounting principles (GAAP), the Company uses non-GAAP core net income and core diluted EPS, which are non-GAAP financial measures.

Non-GAAP core net income and non-GAAP core diluted EPS are non-GAAP financial measures that represent our net income (loss) and net income (loss) per diluted share, adjusted to eliminate the effect of certain costs incurred from activities that are not normal recurring operating expenses, such as COVID-stressed charges and recoveries of loan loss provision, nonrecurring debt amortization, the impact of operational measures taken to address the COVID-19 pandemic and workforce reduction costs, and costs associated with acquisitions. To calculate non-GAAP core diluted EPS, we use the weighted average number of shares of common stock outstanding that is used to calculate net income per diluted share under GAAP.

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

We have included non-GAAP core net income, and non-GAAP core diluted EPS because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that non-GAAP core net income and non-GAAP core diluted EPS provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain items that we expect to be nonrecurring.

These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.

For more information on Core Income, please refer to the section of this press release below titled “Adjusted Financial Metric Reconciliation to GAAP Net Income” at the end of this press release.

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, 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,” ”position,” 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) the continued course and severity of the COVID-19 pandemic and its direct and indirect impacts, (2) general economic

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

and real estate market conditions, including the risk of recession (3) regulatory and/or legislative changes, (4) our customers’ continued interest in loans and doing business with us, (5) market conditions and investor interest in our future securitizations, and (6) the continued conflict in Ukraine and Israel 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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Fourth Quarter and Full Year 2024 Results

 

Velocity Financial, Inc.

Consolidated Balance Sheet

 

     Quarter Ended  
     12/31/2024     9/30/2024     6/30/2024     3/31/2024     12/31/2023  
     Unaudited     Unaudited     Unaudited     Unaudited     Audited  
(In thousands)                               

Assets

           

Cash and cash equivalents

    $ 49,901     $ 44,094     $ 47,366     $ 34,829     $ 40,566  

Restricted cash

      20,929       23,167       32,293       24,216       21,361  

Loans held for sale, at fair value

      —        19,231       —        —        17,590  

Loans held for investment, at fair value

      2,766,951       2,354,718       1,971,683       1,649,540       1,306,072  

Loans held for investment, at amortized cost

      2,420,116       2,526,320       2,619,619       2,727,518       2,828,123  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans, net

      5,187,067       4,900,269       4,591,302       4,377,058       4,151,785  

Accrued interest receivables

      35,235       32,944       31,124       29,374       27,028  

Receivables due from servicers

      123,494       93,681       82,359       87,523       85,077  

Other receivables

      1,359       4,265       6,566       2,113       8,763  

Real estate owned, net

      68,000       62,361       50,757       46,280       44,268  

Property and equipment, net

      1,650       1,693       1,912       2,013       2,785  

Deferred tax asset

      13,612       14,501       1,144       1,580       2,339  

Mortgage Servicing Rights, at fair value

      13,712       12,416       12,229       9,022       8,578  

Derivative assets

      —        —        —        1,967       —   

Goodwill

      6,775       6,775       6,775       6,775       6,775  

Other assets

      5,674       6,308       9,566       5,468       5,248  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Assets

    $ 5,527,408     $ 5,202,474     $ 4,873,393     $ 4,628,218     $ 4,404,573  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities and members’ equity

           

Accounts payable and accrued expenses

    $ 147,814     $ 140,534     $ 138,033     $ 123,988     $ 121,969  

Secured financing, net

      284,833       284,371       283,909       283,813       211,083  

Securitized debt, at amortized cost

      2,019,056       2,105,099       2,228,941       2,329,906       2,418,811  

Securitized debt, at fair value

      2,207,408       1,749,268       1,509,952       1,073,843       877,417  

Warehouse & repurchase facilities

      348,082       434,027       237,437       360,216       334,755  

Derivative liability

      —        1,486       374       —        3,665  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Liabilities

      5,007,193       4,714,785       4,398,646       4,171,766       3,967,700  

Stockholders’ Equity

           

Stockholders’ equity

      516,944       484,636       471,323       452,941       433,444  

Noncontrolling interest in subsidiary

      3,271       3,053       3,424       3,511       3,429  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total equity

      520,215       487,689       474,747       456,452       436,873  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Liabilities and members’ equity

    $ 5,527,408     $ 5,202,474     $ 4,873,393     $ 4,628,218     $ 4,404,573  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Book value per share

    $ 15.70     $ 14.91     $ 14.52     $ 14.01     $ 13.49  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Shares outstanding

      33,143 (1)      32,712 (2)      32,701 (3)      32,574 (4)      32,395 (5) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(1) 

Based on 33,142,650 common shares outstanding as of December 31, 2024, and excludes unvested shares of common stock authorized for incentive compensation totaling 402,935.

(2) 

Based on 32,711,910 common shares outstanding as of September 30, 2024, and excludes unvested shares of common stock authorized for incentive compensation totaling 402,935.

(3) 

Based on 32,701,185 common shares outstanding as of June 30, 2024, and excludes unvested shares of common stock authorized for incentive compensation totaling 397,450.

(4) 

Based on 32,574,498 common shares outstanding as of March 31, 2024, and excludes unvested shares of common stock authorized for incentive compensation totaling 411,296.

(5) 

Based on 32,395,423 common shares outstanding as of December 31, 2023, and excludes unvested shares of common stock authorized for incentive compensation totaling 470,413.

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

Velocity Financial, Inc.

Consolidated Statements of Income (Quarters)

 

     Quarter Ended  
     12/31/2024     9/30/2024     6/30/2024     3/31/2024     12/31/2023  
($ in thousands)    Unaudited     Unaudited     Unaudited     Unaudited     Unaudited  

Revenues

           

Interest income

    $ 113,484     $ 105,070     $ 97,760     $ 90,529     $ 86,269  

Interest expense - portfolio related

      68,484       63,871       59,188       55,675       51,405  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income - portfolio related

      45,000       41,199       38,572       34,854       34,864  

Interest expense - corporate debt

      6,143       6,143       6,155       5,380       4,140  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

      38,857       35,056       32,417       29,474       30,724  

Provision for loan losses

      22       (69 )      218       1,002       827  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

      38,835       35,125       32,199       28,472       29,897  

Other operating income

           

Gain on disposition of loans

      2,784       2,291       3,168       1,699       1,482  

Unrealized gain (loss) on fair value loans

      (15,723 )      35,530       17,123       18,925       39,367  

Unrealized gain (loss) on fair value securitized debt

      34,539       (24,995 )      (4,643 )      (2,318 )      (24,085 ) 

Unrealized gain/(loss) on mortgage servicing rights

      1,297       (993 )      (373 )      444       (1,208 ) 

Origination fee income

      7,245       6,704       5,072       4,986       3,981  

Interest income on cash balance

      1,451       1,676       1,731       1,631       1,716  

Other income (expense)

      736       519       483       408       418  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total other operating income

      32,330       20,732       22,561       25,775       21,670  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net revenue

      71,165       55,857       54,760       54,247       51,567  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating expenses

           

Compensation and employee benefits

      20,084       17,586       16,562       15,357       15,143  

Origination expenses

      816       867       749       646       173  

Securitizations expenses

      7,103       3,186       6,232       2,874       2,709  

Rent and occupancy

      296       519       617       498       551  

Loan servicing

      6,749       5,656       5,160       4,824       4,636  

Professional fees

      1,477       2,305       1,718       2,115       1,733  

Real estate owned, net

      268       1,951       1,355       2,455       2,068  

Other operating expenses

      2,335       2,543       2,494       2,242       2,248  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total operating expenses

      39,127       34,613       34,887       31,011       29,260  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

      32,038       21,244       19,873       23,236       22,307  

Income tax expense

      11,233       5,627       5,162       5,903       5,141  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income

      20,805       15,617       14,711       17,333       17,166  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income attributable to noncontrolling interest

      218       (186 )      (67 )      82       (189 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income attributable to Velocity Financial, Inc.

      20,587       15,803       14,778       17,251       17,355  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Less undistributed earnings attributable to participating securities

      253       191       182       217       225  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings attributable to common shareholders

    $ 20,334     $ 15,612     $ 14,596     $ 17,034     $ 17,130  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Basic earnings (loss) per share

   $ 0.62     $ 0.48     $ 0.45     $ 0.52     $ 0.53  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Diluted earnings (loss) per common share

    $ 0.57     $ 0.44     $ 0.42     $ 0.49     $ 0.50  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Basic weighted average common shares outstanding

     32,771       32,711       32,585       32,541       32,326  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Diluted weighted average common shares outstanding

      36,097       35,895       35,600       35,439       34,991  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

Velocity Financial, Inc.

Consolidated Statements of Income (Quarters)

 

     Year Ended  
($ in thousands)    12/31/2024      12/31/2023  
     Audited      Audited  

Revenues

      

Interest income

    $ 406,843      $ 310,776  

Interest expense - portfolio related

      247,218        186,468  
  

 

 

     

 

 

  

Net interest income - portfolio related

      159,625        124,307  

Interest expense - corporate debt

      23,821        16,556  
  

 

 

     

 

 

  

Net interest income

      135,804        107,751  

Provision for loan losses

      1,173        1,914  
  

 

 

     

 

 

  

Net interest income after provision for loan losses

      134,631        105,836  

Other operating income

      

Gain on disposition of loans

      9,940        8,238  

Unrealized gain (loss) on fair value loans

      55,857        47,850  

Unrealized gain (loss) on fair value securitized debt

      2,581        (9,002 ) 

Unrealized gain/(loss) on mortgage servicing rights

      375        (660 ) 

Origination fee income

      24,007        12,450  

Interest income on cash balance

      6,490        5,194  

Other income (expense)

      2,148        1,840  
  

 

 

     

 

 

  

Total other operating income

      101,398        65,910  
  

 

 

     

 

 

  

Net revenue

      236,029        171,746  
  

 

 

     

 

 

  

Operating expenses

      

Compensation and employee benefits

      69,589        48,344  

Origination expenses

      3,077        518  

Securitizations expenses

      19,396        12,923  

Rent and occupancy

      1,929        1,927  

Loan servicing

      22,388        17,631  

Professional fees

      7,616        4,599  

Real estate owned, net

      6,030        6,153  

Other operating expenses

      9,613        8,524  
  

 

 

     

 

 

  

Total operating expenses

      139,638        100,619  
  

 

 

     

 

 

  

Income before income taxes

      96,391        71,127  

Income tax expense

      27,925        18,834  
  

 

 

     

 

 

  

Net income

      68,466        52,293  
  

 

 

     

 

 

  

Net income attributable to noncontrolling interest

      47        20  
  

 

 

     

 

 

  

Net income attributable to Velocity Financial, Inc.

      68,419        52,273  
  

 

 

     

 

 

  

Less undistributed earnings attributable to participating securities

      834        753  
  

 

 

     

 

 

  

Net earnings attributable to common shareholders

    $ 67,585      $ 51,520  
  

 

 

     

 

 

  

Basic earnings (loss) per share

    $ 2.07      $ 1.60  
  

 

 

     

 

 

  

Diluted earnings (loss) per common share

    $ 1.91      $ 1.52  
  

 

 

     

 

 

  

Basic weighted average common shares outstanding

      32,653        32,206  
  

 

 

     

 

 

  

Diluted weighted average common shares outstanding

      35,760        34,484  
  

 

 

     

 

 

  

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

Velocity Financial, Inc.

Net Interest Margin – Portfolio Related and Total Company

(Unaudited)

Quarters:

 

     Quarter Ended December 31, 2024     Quarter Ended December 31, 2023  
            Interest      Average            Interest      Average  
     Average      Income /      Yield /     Average      Income /      Yield /  
($ in thousands)    Balance      Expense      Rate(1)     Balance      Expense      Rate(1)  

Loan portfolio:

                 

Loans held for sale

    $ 3,145           $ 14,918        

Loans held for investment

      4,855,794             3,949,642        
  

 

 

          

 

 

        

Total loans

    $ 4,858,939           9.34 %    $ 3,964,560      $ 86,268        8.70 % 
  

 

 

          

 

 

        

Debt:

                 

Warehouse and repurchase facilities

    $ 341,596        7,179        8.41 %    $ 255,266        6,040        9.46 % 

Securitizations

      4,117,512        61,306        5.96 %      3,320,467        45,365        5.46 % 
  

 

 

     

 

 

       

 

 

     

 

 

     

Total debt - portfolio related

      4,459,108        68,484        6.14 %      3,575,733        51,405        5.75 % 

Corporate debt

      290,000        6,143        8.47 %      215,000        4,138        7.70 % 
  

 

 

     

 

 

       

 

 

     

 

 

     

Total debt

    $ 4,749,108      $ 74,627        6.29 %    $ 3,790,733      $ 55,543        5.86 % 
  

 

 

     

 

 

       

 

 

     

 

 

     

Net interest spread - portfolio related (2)

            3.20 %            2.95 % 

Net interest margin - portfolio related

            3.70 %            3.52 % 

Net interest spread - total company (3)

            3.06 %            2.84 % 

Net interest margin - total company

            3.20 %            3.10 % 

 

(1) 

Annualized.

(2) 

Net interest spread — portfolio related is the difference between the rate earned on our loan portfolio and the interest rates paid on our portfolio-related debt.

(3) 

Net interest spread — total company is the difference between the rate earned on our loan portfolio and the interest rates paid on our total debt.

Years:

 

     Year Ended December 31, 2024     Year Ended December 31, 2023  
            Interest      Average            Interest      Average  
     Average      Income /      Yield /     Average      Income /      Yield /  
($ in thousands)    Balance      Expense      Rate     Balance      Expense      Rate  

Loan portfolio:

                 

Loans held for sale

    $ 6,488           $ 8,615        

Loans held for investment

      4,481,813             3,716,582        
  

 

 

          

 

 

        

Total loans

    $ 4,488,301      $ 406,843        9.06 %    $ 3,725,197      $ 310,775        8.34 % 
  

 

 

          

 

 

        

Debt:

                 

Warehouse and repurchase facilities

    $ 295,936        26,790        9.05 %    $ 227,911        21,726        9.53 % 

Securitizations

      3,780,660        220,428        5.83 %      3,113,500        164,742        5.29 % 
  

 

 

     

 

 

       

 

 

     

 

 

     

Total debt - portfolio related

      4,076,596        247,219        6.06 %      3,341,411        186,468        5.58 % 

Corporate debt

      282,888        23,821        8.42 %      215,000        16,556        7.70 % 
  

 

 

     

 

 

       

 

 

     

 

 

     

Total debt

    $ 4,359,484      $ 271,039        6.22 %    $ 3,556,411      $ 203,024        5.71 % 
  

 

 

     

 

 

       

 

 

     

 

 

     

Net interest spread - portfolio related (1)

            3.00 %            2.76 % 

Net interest margin - portfolio related

            3.56 %            3.34 % 

Net interest spread - total company (2)

            2.85 %            2.63 % 

Net interest margin - total company

            3.03 %            2.89 % 

 

(1) 

Net interest spread — portfolio related is the difference between the rate earned on our loan portfolio and the interest rates paid on our portfolio-related debt.

(2) 

Net interest spread — total company is the difference between the rate earned on our loan portfolio and the interest rates paid on our total debt.

 

 

 

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Fourth Quarter and Full Year 2024 Results

 

Velocity Financial, Inc.

Adjusted Financial Metric Reconciliation to GAAP Net Income

(Unaudited)

Quarters:

 

Core Net Income

               
     Quarter Ended  
     12/31/20234      9/30/2024      6/30/2024      3/31/2024      12/31/2023  

Net Income

    $ 20,587      $ 15,803      $ 14,778      $ 17,251      $ 17,355  

Tax liability reduction

      —         —         —         —         (1,866 ) 

Equity award & ESPP costs

      1,167        1,146        1,140        998        673  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Core Net Income

    $ 21,754      $ 16,949      $ 15,918      $ 18,249      $ 16,161  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Diluted weighted average common shares outstanding

      36,097        35,895        35,600        35,439        34,991  

Core diluted earnings per share

    $ 0.60      $ 0.47      $ 0.45      $ 0.51      $ 0.46  

Years:

 

Core Net Income

      
     Year Ended  
     12/31/2024      12/31/2023  

Net Income

    $ 68,419      $ 52,273  

Tax liability reduction

      —         (1,866 ) 

Equity award & ESPP costs

      4,452        2,977  
  

 

 

     

 

 

  

Core Net Income

    $ 72,871      $ 53,384  
  

 

 

     

 

 

  

Diluted weighted average common shares outstanding

    $ 35,760      $ 34,484  

Core diluted earnings per share

    $ 2.03      $ 1.54  

 

 

 

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