Velocity Financial, Inc. · NYSE:VEL
Velocity Financial — Q1 2025 Earnings Presentation
20 slides from Velocity Financial's earnings presentation, May 1, 2025
Slide 1: 1Q25 Results Presentation
1Q25 Results Presentation May 1, 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: 1Q25 Highlights
1Q25 Highlights ▪ Net income of $18.9 million, up 9.5% from $17.3 million for 1Q24. Diluted EPS of $0.51, up $0.02 from $0.49 per share for 1Q24 Earnings ▪ Core net income(1) of $20.3 million, an increase of 11.0% from $18.2 million for 1Q24. Core diluted EPS(1) of $0.55, up from $0.51 per share for
Slide 4: Subsequent to Quarter End
Subsequent to Quarter End ▪ Successfully completed two securitizations in April: – VCC 2025-RTL1 totaling $111.4 million of securities issued. The transaction included $59.2 million in UPB of collateral from the VCC 2023-RTL1 securitization, which was simultaneously collapsed, and $52.2 million in U
Slide 5: Core Income, Book Value and Adjusted Book Value Per Share
Core Income, Book Value and Adjusted Book Value Per Share Core Net Income(1) Book Value and Adjusted Book Value Per Share(2) ($ in thousands) $18.50 $ 2.31 GAAP Net Income $18,887 $15.70 $ 0.55 $ 16.19 $(0.04) $(0.02) Equity award & ESPP costs $1,366 Core Net Income $20,253 Book value Non-Core Equit
Slide 6: Loan Production
Loan Production 1Q25 Production Sets a New Record ▪ Loan production in 1Q25 totaled $640.4 million in UPB, a 13.7% increase from $563.5 million for 4Q24 and a 69.1% increase from $378.7 million for 1Q24 – Q/Q growth was driven by 33.4% increase in Investor 1-4 Rental volume. Y/Y volume growth driven
Slide 7: Loan Portfolio
Loan Portfolio Strong Portfolio Growth Continues Loan Portfolio by Property Type ▪ The total loan portfolio was $5.4 billion in UPB as (UPB in millions) $5,445.0 of March 31, 2025, an increase of 7.8% from $5,055.9 $330.9 $5.1 billion as of December 31, 2024, and 27.3% $385.0 $421.4 from $4.3 billio
Slide 8: Net Interest Margin
Net Interest Margin NIM Stable Year-Over-Year ▪ Portfolio NIM(1) in 1Q25 was 3.35%, a decrease of 35 bps from 3.70% for 4Q24 and flat compared to 3.35% for 1Q24 ▪ Portfolio Yield: decreased 23 bps from 4Q24 and increased 40 bps from 1Q24. Q/Q, the decrease resulted from lower realization of NPL inte
Slide 9: HFI Portfolio Performance
HFI Portfolio Performance NPLs Stable as % of HFI Loans; 1Q25 Resolution Gains Align To Historical Average ▪ Total nonperforming loans (NPL) as a percentage of total HFI loans was 10.8% as of March 31, 2025, relatively consistent with 10.7% as of December 31, 2024, and up slightly from 10.1% as of M
Slide 10: Non-Performing Asset Resolution Activity
Non-Performing Asset Resolution Activity NPA Volume and Gains Normalized in 1Q25 Resolution Activity RESOLUTION ACTIVITIES LONG-TERM NONPERFORMING ASSETS ▪ NPA resolutions totaled $76.4 million RESOLUTION ACTIVITY FIRST QUARTER 2025 FOURTH QUARTER 2024 FIRST QUARTER 2024 in UPB, realizing 102.4% of
Slide 11: CECL Reserve, Charge-Offs and REO
CECL Reserve, Charge-Offs and REO CECL Reserve Slightly Increases; REO Gains Normalized ▪ The reserve balance was $5.0 million as of March 31, 2025, an increase from $4.2 million as of December 31, 2024, and a decrease from $5.3 million as of March 31, 2024 – The Q/Q increase is driven by lower valu
Slide 12: Durable Funding and Liquidity Strategy
Durable Funding and Liquidity Strategy One Securitization in 1Q25(1); April Securitizations Reflect Strong Investor Support Outstanding Debt Balances(2) ▪ Cash reserves and unfinanced collateral of ($ in Millions) $5,250.8 $75.6 million as of March 31, 2025 $4,859.4 $285.3 $4,572.8 $284.8 $570.0 ▪ A
Slide 13: Outlook for Velocity's Key Business Drivers
Outlook for Velocity’s Key Business Drivers Outlook for Markets and Growth Evolving But Remains Positive MARKET CREDIT CAPITAL EARNINGS ▪ Outlook for the ▪ U.S. economic ▪ Next long-term loan ▪ Stable NIM and diverse universe of outlook remains securitization strong interest small balance uncertain;
Slide 14: Appendix
Appendix
Slide 15: Velocity Financial, Inc. Balance Sheet
Velocity Financial, Inc. Balance Sheet Confidential 15
Slide 16: Velocity Financial, Inc. Income Statement (Quarters)
Velocity Financial, Inc. Income Statement (Quarters) Confidential 16
Slide 17: HFI Portfolio Delinquency Trends
HFI Portfolio Delinquency Trends March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025 ($ in thousands) $ % $ % $ % $ % $ % Performing/Accruing: Current $ 3,517,715 82.2% $ 3,669,659 81.9% $ 3,921,488 82.8% $ 4,169,830 82.5% $ 4,504,854 82.7% 30-59 days past due 239,493 5.
Slide 18: Loan Portfolio Rollforward
Loan Portfolio Rollforward Total Loan Portfolio UPB Rollforward (UPB in millions) $640.4 $5,449.9 $5,055.9 $(223.2) $(23.2) Loan Porfolio at Principal Payments Foreclosures Loan Production Loan Porfolio at 12/31/24 3/31/25 . Confidential 18
Slide 19: HFI Loan Portfolio
HFI Loan Portfolio Portfolio by Property Type Portfolio by State (100% = $5.45 billion UPB)(1) Mixed Use 11.0% California Retail 21.2% 9.6% Investor 1-4 Other Rental 37.7% 51.4% New York Multifamily 15.3% 7.3% Warehouse 6.7% Florida 12.8% Texas Office 5.6% Other 7.7% New Jersey 6.1% 7.4% Confidentia
Slide 20: Adjusted Financial Metric Reconciliation
Adjusted Financial Metric Reconciliation: Adjusted Financial Metric Reconciliation to GAAP Net Income Quarters: Core Net Income Quarter Ended ($ in thousands) 3/31/2025 12/31/20234 9/30/2024 6/30/2024 3/31/2024 Net Income $ 18,887 $ 20,587 $ 15,803 $ 14,778 $ 17,251 Equity award & ESPP costs 1,366 1