Velocity Financial, Inc. · NYSE:VEL
Velocity Financial — Q4 2024 Earnings Presentation
20 slides from Velocity Financial's earnings presentation, Mar 6, 2025
Slide 1: 4Q24 Results Presentation
4Q24 Results Presentation March 6, 2025
Slide 2: Forward-looking statements
Forward-looking statements Some of the statements contained in this presentation may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, projections, plans and strategies, positioning, anticipated events or trend
Slide 3: 4Q24 Highlights
4Q24 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. Earnings Core diluted EPS(1) of $0.60, up from $0.46 per share fo
Slide 4: Core Income, Book Value and Adjusted Book Value Per Share
Core Income, Book Value and Adjusted Book Value Per Share Core Income(1) Book Value and Adjusted Book Value Per Share(2) $ 3.03 $18.73 GAAP Net Income $20,587 $ 0.66 $ 15.70 $14.91 $ 0.17 $(0.04) Equity award & ESPP costs $1,167 Core Net Income $21,754 Book value Non-Core Equity Retained Book value
Slide 5: Loan Production
Loan Production 4Q24 Production 2nd Highest Quarter in Company’s History ▪ Loan production in 4Q24 totaled $563.5 million in UPB, an 18.2% increase from $476.8 million for 3Q24 and a 60.0% increase from $352.1 million for 4Q23 – Driven by 82% Q/Q growth in Traditional Commercial volume across a wide
Slide 6: Loan Portfolio
Loan Portfolio Portfolio Exceeds $5 billion Target Driven By Record Production Volume Loan Portfolio by Property Type ▪ The total loan portfolio was $5.1 billion in UPB as (UPB in millions) $5,055.9 of December 31, 2024, an increase of 6.8% from $4,753.3 $694.2 $4.7 billion as of September 30, 2024,
Slide 7: Net Interest Margin
Net Interest Margin NIM Growth Driven By Continued Focus On Loan Production Rate Discipline ▪ Portfolio NIM(1) in 4Q24 was 3.70%, an increase of 10 bps from 3.60% for 3Q24 and 18 bps from 3.52% for 4Q23 ‒ The Q/Q and Y/Y increases are the result of strong production-driven HFI portfolio growth and a
Slide 8: Loan Investment Portfolio Performance
Loan Investment Portfolio Performance Strong Gains on Nonperforming Loan Resolutions ▪ Gains on NPL resolutions in 4Q24 of 7.0%, an increase from 3.4% for 3Q24 and 2.2% for 4Q23 ▪ Total nonperforming loans (NPL) as a percentage of total HFI loans was 10.7% as of December 31, 2024, consistent with 10
Slide 9: Asset Resolution Activity
Asset Resolution Activity NPL Realization Activity and Gains Reached New High in 4Q24 Resolution Activity RESOLUTION ACTIVITIES LONG-TERM LOANS ▪ NPL resolution totaled $79.4 million RESOLUTION ACTIVITY FOURTH QUARTER 2024 THIRD QUARTER 2024 FOURTH QUARTER 2023 in UPB, realizing 107.0% of UPB Gain /
Slide 10: CECL Reserve, Charge-Offs and REO
CECL Reserve, Charge-Offs and REO Net Charge-off and REO Gains Increased In 4Q24; Slight Decrease in CECL Reserve ▪ The reserve balance was $4.2 million as of December 31, 2024, a decrease of 14.0% from $4.9 million as of September 30, 2024, and a 12.5% decrease from $4.8 million as of December 31,
Slide 11: Durable Funding and Liquidity Strategy
Durable Funding and Liquidity Strategy Two Securitizations in 4Q24(1); Continued Improvement In Securitization Market Execution Outstanding Debt Balances(2) ▪ Cash reserves and unfinanced collateral of ($ in Millions) $4,859.4 $4,572.8 $284.8 $95.9 million as of December 31, 2024 $4,260.2 $284.4 $4,
Slide 12: Outlook for Velocity’s Key Business Drivers
Outlook for Velocity’s Key Business Drivers Improving Outlook for Markets and Growth MARKET CREDIT CAPITAL EARNINGS ▪ Residential property ▪ U.S. economic ▪ Next long-term loan ▪ Rate discipline on value appreciation outlook is uncertain; securitization new production to (Single and heightened volat
Slide 13: Appendix
Appendix
Slide 14: Velocity Financial, Inc. Balance Sheet
Velocity Financial, Inc. Balance Sheet Confidential 14
Slide 15: Velocity Financial, Inc. Income Statement (Quarters)
Velocity Financial, Inc. Income Statement (Quarters) Quarter Ended ($ 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 68,48
Slide 16: Velocity Financial, Inc. Income Statement (Years)
Velocity Financial, Inc. Income Statement (Years) 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 d
Slide 17: HFI Portfolio Delinquency Trends
HFI Portfolio Delinquency Trends December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 ($ in thousands) $ % $ % $ % $ % $ % Performing/Accruing: Current $ 3,354,197 82.7% $ 3,517,715 82.2% $ 3,669,659 81.9% $ 3,921,488 82.8% $ 4,169,830 82.5% 30-59 days past due 231,590
Slide 18: Loan Portfolio Rollforward
Loan Portfolio Rollforward HFI Loan Portfolio UPB Rollforward (UPB in millions) $558.9 $5,055.9 $4,753.3 $(240.2) $(16.1) Loan Porfolio at Principal Payments(1) Foreclosures Loan Production Loan Porfolio at 9/30/24 12/31/24 . Confidential 18 (1) Includes $0.44 million in UPB of repurchased loans.
Slide 19: HFI Loan Portfolio
HFI Loan Portfolio Portfolio by Property Type Portfolio by State (100% = $5.06 billion UPB)(1) Mixed Use 11.1% California 21.0% Retail 8.8% Other Investor 1-4 Rental 37.1% 52.5% New York Multifamily 16.3% 7.3% Warehouse Florida 6.6% 12.7% Texas Office 5.4% 6.1% New Jersey Other 7.6% 7.5% Confidentia
Slide 20: Adjusted Financial Metric Reconciliation
Adjusted Financial Metric Reconciliation: Adjusted Financial Metric Reconciliation to GAAP Net Income Quarters: Years: Confidential 20