Velocity Financial, Inc. Reports Fourth Quarter and Full Year 2024 Results
Velocity Financial (NYSE: VEL) reported strong Q4 2024 results with net income of $20.6 million, up 18.6% from Q4 2023. The company achieved diluted EPS of $0.57, increasing from $0.50 year-over-year.
Key highlights include:
- Record loan production of $563.5 million in Q4, up 60% year-over-year
- Portfolio net interest margin improved to 3.70%, up from 3.52% in Q4 2023
- Total loan portfolio reached $5.1 billion, growing 24.1% from previous year
- Nonperforming loans at 10.7% of portfolio, slightly up from 9.7% in Q4 2023
- GAAP Book value per share increased 16.4% to $15.70
For full-year 2024, Velocity reported net income of $68.4 million compared to $52.3 million in 2023, with core earnings per diluted share of $2.03, up from $1.54. The company completed two securitizations in Q4 totaling $586.8 million with a weighted average rate of 6.0%.
Velocity Financial (NYSE: VEL) ha riportato risultati solidi per il quarto trimestre del 2024 con un utile netto di 20,6 milioni di dollari, in aumento del 18,6% rispetto al quarto trimestre del 2023. L'azienda ha raggiunto un utile per azione diluito di 0,57 dollari, in crescita rispetto a 0,50 dollari rispetto all'anno precedente.
Tra i punti salienti ci sono:
- Produzione di prestiti record di 563,5 milioni di dollari nel quarto trimestre, in aumento del 60% rispetto all'anno precedente
- Il margine di interesse netto del portafoglio è migliorato al 3,70%, rispetto al 3,52% del quarto trimestre del 2023
- Il portafoglio totale di prestiti ha raggiunto 5,1 miliardi di dollari, crescendo del 24,1% rispetto all'anno precedente
- I prestiti non performanti sono al 10,7% del portafoglio, leggermente aumentati rispetto al 9,7% del quarto trimestre del 2023
- Il valore contabile GAAP per azione è aumentato del 16,4% a 15,70 dollari
Per l'intero anno 2024, Velocity ha riportato un utile netto di 68,4 milioni di dollari rispetto ai 52,3 milioni di dollari del 2023, con un utile core per azione diluita di 2,03 dollari, in aumento rispetto a 1,54 dollari. L'azienda ha completato due cartolarizzazioni nel quarto trimestre per un totale di 586,8 milioni di dollari con un tasso medio ponderato del 6,0%.
Velocity Financial (NYSE: VEL) reportó resultados sólidos para el cuarto trimestre de 2024 con un ingreso neto de 20.6 millones de dólares, un aumento del 18.6% en comparación con el cuarto trimestre de 2023. La compañía logró un EPS diluido de 0.57 dólares, aumentando de 0.50 dólares año tras año.
Los aspectos destacados incluyen:
- Producción de préstamos récord de 563.5 millones de dólares en el cuarto trimestre, un aumento del 60% en comparación con el año anterior
- El margen de interés neto de la cartera mejoró al 3.70%, en comparación con el 3.52% en el cuarto trimestre de 2023
- La cartera total de préstamos alcanzó 5.1 mil millones de dólares, creciendo un 24.1% en comparación con el año anterior
- Los préstamos no rentables representan el 10.7% de la cartera, ligeramente por encima del 9.7% en el cuarto trimestre de 2023
- El valor contable GAAP por acción aumentó un 16.4% a 15.70 dólares
Para el año completo 2024, Velocity reportó un ingreso neto de 68.4 millones de dólares en comparación con 52.3 millones de dólares en 2023, con ganancias básicas por acción diluida de 2.03 dólares, en aumento desde 1.54 dólares. La compañía completó dos titulizaciones en el cuarto trimestre por un total de 586.8 millones de dólares con una tasa promedio ponderada del 6.0%.
Velocity Financial (NYSE: VEL)는 2024년 4분기 강력한 실적을 보고하며, 순이익이 2,060만 달러로 2023년 4분기 대비 18.6% 증가했습니다. 회사는 희석 주당순이익(EPS)이 0.57달러로, 전년의 0.50달러에서 증가했습니다.
주요 하이라이트는 다음과 같습니다:
- 4분기 대출 생산이 5억 6350만 달러로, 전년 대비 60% 증가한 기록을 세웠습니다.
- 포트폴리오의 순이자 마진이 3.70%로 개선되어, 2023년 4분기의 3.52%에서 상승했습니다.
- 총 대출 포트폴리오는 51억 달러에 도달하여, 전년 대비 24.1% 성장했습니다.
- 비수익 대출은 포트폴리오의 10.7%를 차지하며, 2023년 4분기의 9.7%에서 약간 증가했습니다.
- 주당 GAAP 장부가치는 16.4% 증가하여 15.70달러에 도달했습니다.
2024년 전체 연도에 대해 Velocity는 6,840만 달러의 순이익을 보고했으며, 이는 2023년의 5,230만 달러와 비교됩니다. 희석 주당 기본 수익은 2.03달러로, 1.54달러에서 증가했습니다. 회사는 4분기에 총 5억 8680만 달러 규모의 두 건의 증권화 작업을 완료했으며, 가중 평균 금리는 6.0%입니다.
Velocity Financial (NYSE: VEL) a annoncé de solides résultats pour le quatrième trimestre 2024 avec un revenu net de 20,6 millions de dollars, en hausse de 18,6 % par rapport au quatrième trimestre 2023. La société a atteint un BPA dilué de 0,57 dollar, en augmentation par rapport à 0,50 dollar d'une année sur l'autre.
Les points forts incluent :
- Production de prêts record de 563,5 millions de dollars au quatrième trimestre, en hausse de 60 % par rapport à l'année précédente
- La marge d'intérêt nette du portefeuille a augmenté à 3,70 %, contre 3,52 % au quatrième trimestre 2023
- Le portefeuille total de prêts a atteint 5,1 milliards de dollars, en croissance de 24,1 % par rapport à l'année précédente
- Les prêts non performants représentent 10,7 % du portefeuille, légèrement en hausse par rapport à 9,7 % au quatrième trimestre 2023
- La valeur comptable GAAP par action a augmenté de 16,4 % pour atteindre 15,70 dollars
Pour l'année complète 2024, Velocity a rapporté un revenu net de 68,4 millions de dollars contre 52,3 millions de dollars en 2023, avec un bénéfice de base par action diluée de 2,03 dollars, en hausse par rapport à 1,54 dollar. L'entreprise a complété deux titrisations au quatrième trimestre totalisant 586,8 millions de dollars avec un taux d'intérêt moyen pondéré de 6,0 %.
Velocity Financial (NYSE: VEL) berichtete über starke Ergebnisse im vierten Quartal 2024 mit einem Nettogewinn von 20,6 Millionen Dollar, was einem Anstieg von 18,6% im Vergleich zum vierten Quartal 2023 entspricht. Das Unternehmen erzielte einen verwässerten Gewinn pro Aktie von 0,57 Dollar, ein Anstieg von 0,50 Dollar im Jahresvergleich.
Wichtige Highlights sind:
- Rekordkreditproduktion von 563,5 Millionen Dollar im vierten Quartal, ein Anstieg von 60% im Vergleich zum Vorjahr
- Der Nettozinssatzmargen des Portfolios verbesserte sich auf 3,70%, gegenüber 3,52% im vierten Quartal 2023
- Das gesamte Kreditportfolio erreichte 5,1 Milliarden Dollar und wuchs um 24,1% im Vergleich zum Vorjahr
- Nicht leistungsfähige Kredite machen 10,7% des Portfolios aus, leicht gestiegen von 9,7% im vierten Quartal 2023
- Der GAAP-Buchwert pro Aktie stieg um 16,4% auf 15,70 Dollar
Für das gesamte Jahr 2024 berichtete Velocity von einem Nettogewinn von 68,4 Millionen Dollar im Vergleich zu 52,3 Millionen Dollar im Jahr 2023, mit einem Kerngewinn pro verwässerter Aktie von 2,03 Dollar, ein Anstieg von 1,54 Dollar. Das Unternehmen schloss im vierten Quartal zwei Verbriefungen mit einem Gesamtvolumen von 586,8 Millionen Dollar und einem gewichteten Durchschnittszins von 6,0% ab.
- Net income up 18.6% YoY to $20.6M in Q4 2024
- Record loan production up 60% YoY to $563.5M
- Portfolio net interest margin improved to 3.70%
- Total loan portfolio grew 24.1% to $5.1B
- Book value per share increased 16.4% to $15.70
- Strong loan resolution gains at 107% of UPB resolved
- NPL ratio increased to 10.7% from 9.7% YoY
- Operating expenses increased 33.7% YoY in Q4
- $7.3M equity issuance through ATM program (potential dilution)
- Portfolio-related debt cost increased 39 bps YoY to 6.14%
Insights
Velocity Financial's Q4 and full-year 2024 results demonstrate robust financial performance across key metrics. The company posted Q4 net income of $20.6 million (up 18.6% YoY) and diluted EPS of $0.57 (up from $0.50 YoY), while core figures showed even stronger growth with core net income jumping 34.6% to $21.8 million.
Particularly impressive is VEL's loan production growth of 60% year-over-year to $563.5 million in Q4, reflecting successful expansion in the business purpose loan market despite a challenging interest rate environment. The portfolio net interest margin (NIM) improved to 3.70%, up 18 basis points from Q4 2023, demonstrating the company's ability to maintain pricing discipline with average loan coupons of approximately 11%.
The balance sheet shows substantial growth, with the total loan portfolio reaching $5.1 billion (up 24.1% YoY), allowing VEL to exceed its strategic "5x25" goal ahead of schedule. Book value per share increased 16.4% to $15.70, reflecting tangible equity growth.
Some concerns exist in credit quality, with nonperforming loans at 10.7% of the portfolio, a slight increase from 9.7% a year ago. However, the company demonstrated effective management of troubled assets with NPL resolutions totaling $79.4 million and realizing 107% of UPB resolved, suggesting their special servicing capabilities remain strong.
With a recourse debt-to-equity ratio of just 1.2x and $95.9 million in liquidity, VEL maintains a relatively conservative financial position while generating a pretax ROE of 20.3%, positioning the company well for continued growth in 2025.
Velocity Financial's results reveal a company executing exceptionally well within its specialized niche of business purpose loans. The 30.9% increase in full-year net income to $68.4 million demonstrates VEL's ability to scale profitably in a fragmented market with institutional competition.
Several strategic elements stand out that investors should note. First, VEL's disciplined underwriting approach maintains attractive economics despite rapid growth, as evidenced by the weighted average coupon on 2024 loan production holding at 10.9% while the portfolio's loan-to-value ratio improved to 66.6%. This conservative LTV provides significant downside protection against potential property value declines.
The company's securitization expertise serves as both a competitive advantage and growth enabler. Q4 securitizations were completed at a weighted average rate of 6.0%, down significantly from 8.3% a year earlier, expanding profit potential on new originations despite the high-rate environment. This spread business model becomes increasingly attractive as VEL gains scale.
While the uptick in nonperforming loans requires monitoring, the company's demonstrated ability to resolve troubled assets at 107% of UPB suggests their special servicing capabilities actually create value from distressed situations rather than representing pure risk.
VEL's strategic positioning in underserved segments - particularly the 145.9% growth in Traditional Commercial financing - indicates the company has identified high-margin opportunities where banks remain reluctant to lend, creating runway for continued double-digit growth without meaningful competitive pressure.
Velocity Financial's earnings report showcases impressive headline growth, but the credit quality metrics deserve deeper scrutiny given the company's focus on business purpose loans typically considered higher risk. The increase in nonperforming loans to 10.7% of the portfolio (from 9.7% YoY) initially raises some concerns, especially in a commercial real estate environment facing broader challenges.
However, several factors mitigate these credit quality concerns. First, VEL's special servicing capabilities have demonstrated remarkable effectiveness, with NPL resolutions achieving 107% of unpaid principal balance, suggesting they not only recover full loan value but generate additional gains from troubled assets. This performance indicates their underwriting captured appropriate collateral value and their workout process adds value.
The company's weighted average loan-to-value ratio improved to 66.6% despite the rapid portfolio growth, providing a substantial equity cushion against potential property value declines. This conservative approach gives VEL significant protection even if economic conditions deteriorate.
Charge-offs for the full year totaled just $1.8 million against a $5.1 billion portfolio, representing minimal actual credit losses. The CECL reserve ratio of 0.17%, while thin compared to traditional banks, remains within management's target range and appears adequate given the secured nature of the portfolio and historical loss experience.
The combination of disciplined underwriting, improving LTV ratios, and exceptional resolution performance suggests VEL has created a sustainable credit model that can withstand economic stress while generating superior returns compared to traditional lenders.
Fourth Quarter Highlights:
-
Net income of
$20.6 million 18.6% from$17.4 million $0.57 $0.07 $0.50 -
Core net income(1) of
$21.8 million 34.6% from$16.2 million $0.60 $0.46 -
Loan production of
$563.5 million 18.2% and60.0% increase from 3Q24 and 4Q23, respectively-
Year-to-date 2025 loan production through February of
$429.4 million
-
Year-to-date 2025 loan production through February of
-
Nonperforming loans (NPL) as a percentage of Held for Investment (HFI)(2) loans was
10.7% , up slightly from10.6% as of September 30, 2024, and9.7% as of December 31, 2023, respectively -
Resolutions of NPL and real estate owned (REO) totaled
$79.4 million -
Realized gains of
$5.6 million 107.0% of UPB resolved
-
Realized gains of
-
Portfolio net interest margin (NIM) of
3.70% , an increase of 10 bps from3.60% for 3Q24 and 18 bps from3.52% for 4Q23 -
Completed the VCC 2024-5 and VCC 2024-6 securitizations totaling
$292.9 million -
Liquidity(3) of
$95.9 million $435.0 million - Recourse debt to equity ratio of 1.2x
-
GAAP Book value per common share of
$15.70 16.4% increase from$13.49 -
Issued
$7.3 million
“Velocity delivered impressive earnings in the fourth quarter and full year 2024,” said Chris Farrar, President and CEO. “The Company’s record full-year 2024 earnings were driven by continued strong production, which also reached record levels in 2024, on both a UPB and loans produced basis and by maintaining high underwriting standards. Our success resulted from ongoing initiatives to grow and streamline our loan production platform to capture a greater share of the large but fragmented business purpose loan market. I’m especially proud of our team’s ability to achieve outstanding production volume growth while remaining focused on maintaining strong returns with average loan coupons of 11 percent. This discipline is a key driver of our strong earnings and the reason we exceeded our 5x25 goal of
(1) |
Core income and Core EPS are non-GAAP measures that exclude nonrecurring and unusual activities from GAAP net income. |
|
(2) |
Held for Investment (HFI) includes the unpaid principal balance of loans carried on an amortized cost basis and loans carried at fair value (FVO). |
|
(3) |
Liquidity includes unrestricted cash reserves of |
Fourth Quarter Operating Results
| KEY PERFORMANCE INDICATORS | ||||||||||||
| ($ 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 $17.4 million - Driven by record production volumes and consistently strong loan resolution gains
-
Core net income was
$21.8 million $16.2 million - 4Q24 core adjustments included incentive compensation expenses and costs related to the Company’s employee stock purchase plan (ESPP)
-
Portfolio NIM for 4Q24 was
3.70% , compared to3.52% for 4Q23, driven by consistent production-driven HFI portfolio growth and average loan coupons of10.9% on 2024 loan production
| TOTAL LOAN PORTFOLIO | |||||||||||||
| ($ 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 24.1% from$4.1 billion -
Primarily driven by
19.3% Y/Y growth in loans collateralized by Investor 1-4 Rental properties and61.1% Y/Y growth in loans collateralized by “Other” commercial properties -
Loan prepayments totaled
$203.2 million $173.9 million $118.1 million
-
Primarily driven by
-
The UPB of fair value option (FVO) HFI loans was
$2.7 billion 52.5% of total loans, as of December 31, 2024, an increase from$1.3 billion 30.7% as of December 31, 2023 -
The weighted average portfolio loan-to-value ratio was
66.6% as of December 31, 2024, down from67.8% as of December 31, 2023, and below the five-quarter trailing average of67.3% -
The weighted average total portfolio yield was
9.34% , an increase of 64 bps from 4Q23, primarily driven by a corresponding increase in the weighted average loan coupons over the same period -
Portfolio-related debt cost was
6.14% , an increase of 39 bps from 4Q23, driven by an increase in the weighted average securitized debt cost
| LOAN PRODUCTION VOLUMES | ||||||||
| ($ in millions) | 4Q 2024 |
4Q 2023 |
$ Variance | % Variance | ||||
| Investor 1-4 Rental | $ |
199.9 |
$ |
183.2 |
$ |
16.7 |
|
|
| Traditional Commercial |
|
320.3 |
|
130.3 |
|
190.0 |
|
|
| Short-term |
|
38.7 |
|
38.6 |
|
0.0 |
|
|
| Government Insured Multifamily (CHHC) |
|
4.6 |
|
- |
|
4.6 |
n.m. | |
| Total loan production | $ |
563.5 |
$ |
352.1 |
$ |
211.3 |
|
|
| Acquisitions | $ |
- |
$ |
- |
||||
Discussion of results:
-
Loan production totaled
$563.5 million 60.0% increase from$352.1 million -
Traditional Commercial financing demand led Y/Y growth, increasing
145.9% from 4Q23, driven by a strategic focus on increasing investment in this fragmented and underserved market -
The weighted average coupon (WAC) on 4Q24 HFI loan production was
10.8% , a modest decrease from11.2% for 4Q23 - Government Insured Multifamily loans are originated by our subsidiary CHHC and sold to investors for cash gains shortly after closing
| HFI PORTFOLIO CREDIT PERFORMANCE INDICATORS | |||||||||||||
| ($ 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 10.7% of loans HFI, compared to$394.6 million 9.7% as of December 31, 2023 -
Charge-offs for 4Q24 totaled
$698.8 thousand $743.5 thousand -
The trailing five-quarter charge-off average was
$502.5 thousand
-
The trailing five-quarter charge-off average was
-
For 4Q24, total gain on REO was
$3.6 million $0.4 million -
The loan loss reserve totaled
$4.2 million 12.5% decrease from$4.8 million - Mainly driven by the increase in the valuation of the real estate underlying the individually assessed NPL portfolio
-
The CECL reserve rate was
0.17% (CECL Reserve as % of Amortized Cost HFI loans), which was consistent with the recent five-quarter average rate of0.19% and within management’s expected range of0.15% to0.20%
| NET REVENUES | |||||||||||||
| ($ 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 38.0% from$51.6 million - Driven by continued strong production volumes, unrealized FV gains and NPL resolutions
-
Total net interest income for 4Q24 was
$38.8 million 29.9% increase from$29.9 million -
Portfolio net Interest income was
$45.0 million 29.1% from 4Q23 resulting from portfolio growth and a 19 bps increase in NIM
-
Portfolio net Interest income was
-
Total other operating income was
$32.3 million $21.7 million -
Origination fee income totaled
$7.2 million -
Net unrealized FVO gains on loans and securitized debt were
$18.8 million $15.3 million -
Gain on disposition of loans totaled
$2.8 million
-
Origination fee income totaled
| OPERATING EXPENSES | |||||||||||
| ($ 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 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 $15.1 million - Primarily driven by higher commissions on increased production volume
-
Securitization expenses totaled
$7.1 million $2.7 million -
Loan servicing expense totaled
$6.7 million 45.6% increase from$4.6 million -
Professional fees totaled
$1.5 million 14.8% decrease from$1.7 million -
REO expenses totaled
$0.3 million 87.0% decrease from$2.1 million $3.4 million
-
Compensation expense totaled
| SECURITIZATIONS | ||||||||||||
| ($ 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 6.0% -
Down from a weighted average rate of
8.3% for securitizations issued during 4Q23
-
Down from a weighted average rate of
-
In 1Q25, the Company completed the VCC 2025-1 securitization totaling
$351.6 million 6.6%
| RESOLUTION ACTIVITIES | ||||||||||||
| LONG-TERM LOANS | ||||||||||||
| RESOLUTION ACTIVITY | FOURTH QUARTER 2024 | FOURTH QUARTER 2023 | ||||||||||
| ($ 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 107.0% of UPB resolved compared to$70.1 million 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
$70.8 million 103.3% average of UPB resolved
Full Year 2024 Operating Results
| FULL-YEAR OPERATING RESULTS | ||||||||||||
| ($ 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 64.6% increase from$1.1 billion - 2024 loan production volume reached the highest annual volume in Velocity’s history
- 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 from3.34% 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 103.6% of UPB resolved, compared to$5.5 million 102.5% for FY 2023
-
Strong portfolio growth and disciplined focus on maintaining a weighted average coupon on FY 2024 loan production of
-
NPLs as a percentage of average loans HFI was
10.7% as of December 31, 2024, compared to9.7% as of December 31, 2023 -
Charge-offs for FY 2024 totaled
$1.8 million $2.0 million -
Net REO gains were
$6.9 million $4.1 million -
Net income totaled
$68.4 million 30.9% increase from$52.3 million -
Net interest income totaled
$134.6 million 27.2% increase from$105.8 million -
Other income totaled
$101.4 million 53.8% increase from$65.9 million -
Net unrealized FVO gains on loans and securitized debt were
$58.4 million $38.8 million
-
Net unrealized FVO gains on loans and securitized debt were
-
For FY 2024, total expenses were
$167.6 million 40.3% increase from$119.5 million
-
Net interest income totaled
-
Core net income(1) totaled
$72.9 million 36.5% increase from$53.4 million -
Core income adjustments totaled
$4.5 million $1.1 million -
Core diluted EPS(1) was
$2.03 31.8% increase from$1.54
-
Core income adjustments totaled
-
Pretax return on equity was
20.3% compared to17.5% for FY 2023
| (1) | Core income and Core EPS are non-GAAP measures that exclude nonrecurring and unusual activities from GAAP net income. |
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
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
About Velocity Financial, Inc.
Based in
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with
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.
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 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
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.
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. |
Velocity Financial, Inc. Consolidated Statements of Income (Quarters) |
|||||||||||||||||||
| Quarter Ended | |||||||||||||||||||
| ($ in thousands) | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | ||||||||||||||
| 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 |
|
||||
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 |
|
|
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. |
| Velocity Financial, Inc.
Adjusted Financial Metric Reconciliation to GAAP Net Income (Unaudited) |
|||||||||||||||
Quarters: |
|||||||||||||||
| Core Net Income | |||||||||||||||
| Quarter Ended | |||||||||||||||
| ($ in thousands) | 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 | ||||||
| ($ in thousands) | 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 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20250306265526/en/
Investors and Media:
Chris Oltmann
(818) 532-3708
Source: Velocity Financial, Inc.
FAQ
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