Velocity Financial(VEL) - 2024 Q3 - Quarterly Results

Financial Performance - Net income for Q3 2024 was $15.8 million, a 30.8% increase from$ 12.1 million in Q3 2023, with diluted EPS rising to $0.44 from$ 0.35[2] - Core net income reached $16.9 million, up 31.2% from$ 12.9 million in Q3 2023, with core diluted EPS increasing to $0.47 from$ 0.37[2] - Net revenue for 3Q24 was $55.9 million, a 25.3% increase from$ 44.6 million in 3Q23, driven by strong portfolio growth[13] - Net interest income after provision for loan losses was $35.1 million, a 29.1% increase from$ 27.2 million in 3Q23[13] - Net income attributable to Velocity Financial, Inc. for Q3 2024 was $15,803, compared to$ 12,086 in Q3 2023, marking a 30.2% increase[36] - Core net income for Q3 2024 was $16,949, up from$ 12,918 in Q3 2023, indicating a year-over-year growth of 31.4%[38] Loan Production and Portfolio - Loan production totaled $476.8 million in UPB, marking a 64.1% increase from$ 290.6 million in Q3 2023[9] - Total loan portfolio reached $4.8 billion in UPB, a 22.6% increase from$ 3.9 billion in UPB as of September 30, 2023[8] - Total HFI loans increased to $4.73 billion, up 22.7% from$ 3.86 billion in the same quarter last year[10] - The average loan portfolio balance for Q3 2024 was $4,578,911, compared to$ 3,773,630 in Q3 2023, representing a year-over-year increase of 21.3%[37] - The company aims for a $5 billion loan portfolio by 2025, supported by strong production volume growth[4] Interest and Margins - The portfolio net interest margin (NIM) improved to 3.60%, a 26 basis points increase from 3.34% in Q3 2023[2] - The net interest margin for the total company improved to 3.06% in Q3 2024, compared to 2.90% in Q3 2023[37] - The weighted average total portfolio yield was 9.18%, an increase of 80 basis points from September 30, 2023[9] - Interest income for Q3 2024 reached$ 105,070, an increase of 32.8% compared to $79,088 in Q3 2023[36] Nonperforming Loans - Nonperforming loans as a percentage of Held for Investment (HFI) loans was 10.6%, slightly up from 10.1% in Q3 2023[2] - Nonperforming loans (NPL) reached$ 503.9 million as of September 30, 2024, representing 10.6% of total HFI loans, an increase from $387.7 million and 10.1% a year earlier[11] - Resolutions of nonperforming loans and real estate owned totaled$ 68.6 million in UPB, with realized gains of $2.3 million[2] - NPL resolution totaled$ 68.6 million in UPB for 3Q24, realizing 103.4% of UPB resolved compared to $65.7 million and 101.8% for 3Q23[21] Operating Expenses - Operating expenses totaled$ 34.6 million for 3Q24, a 26.6% increase from $27.3 million in 3Q23, primarily due to higher production volume[16] - Compensation and employee benefits rose to$ 17.6 million, a 40.4% increase from $12.5 million in 3Q23, driven by higher commissions[15] - Total operating expenses for Q3 2024 were$ 34,613, a slight increase from $27,334 in Q3 2023, representing a year-over-year increase of 26.8%[36] Assets and Liabilities - Total assets increased to$ 5,202,474 thousand as of September 30, 2024, up from $4,873,393 thousand as of June 30, 2024, representing a growth of 6.7%[35] - Total liabilities increased to$ 4,714,785 thousand, up from $4,398,646 thousand, reflecting a growth of 7.2%[35] - Stockholders' equity increased to$ 484,636 thousand, up from $471,323 thousand, marking a growth of 2.8%[35] Securitization and Other Income - The company completed one securitization during 3Q24, totaling$ 253.6 million of securities issued with a weighted average rate of 6.9%, down from 7.6% in 3Q23[18] - Total other operating income was $20.7 million for 3Q24, an increase from$ 17.4 million in 3Q23[14] - Gain on disposition of loans was $2.3 million for 3Q24, driven by loans transferred to Real Estate Owned (REO)[14] Future Outlook - The company will host a conference call on November 7, 2024, to review 3Q24 financial results[22]