Velocity Financial(VEL) - 2024 Q4 - Annual Results

Financial Performance - Net income for full year 2024 was $68.4 million, up 30.7% from $52.3 million in 2023, with diluted EPS increasing to $1.91 from $1.52[3] - Fourth quarter net income reached $20.6 million, an 18.6% increase from $17.4 million in Q4 2023, with core net income rising 34.6% to $21.8 million[4] - Net revenue for Q4 2024 was $71.2 million, an increase of 38.0% from $51.6 million in Q4 2023[22] - The company reported a net revenue of $236,029 thousand for the year ended December 31, 2024, compared to $171,746 thousand in 2023, an increase of 37.4%[62] - Core net income for FY 2024 reached $72.9 million, a 36.5% increase from $53.4 million in FY 2023[39] - Basic earnings per share for Q4 2024 was $0.62, compared to $0.53 in Q4 2023, indicating an increase of 17%[60] - Core diluted EPS for FY 2024 was $2.03, a 31.8% increase from $1.54 in FY 2023[39] Loan Production and Portfolio - Loan production for Q4 2024 was $563.5 million, a significant 60.0% increase from $352.1 million in Q4 2023, marking the second-highest quarterly volume in the company's history[16] - Loan production for FY 2024 totaled $1.84 billion, a 64.6% increase from $1.12 billion in FY 2023[36] - The total loan portfolio increased to $5.1 billion in UPB as of December 31, 2024, reflecting a 24.1% growth from $4.1 billion in 2023[12] - Average loans for FY 2024 were $4.49 billion, a 20.5% increase from $3.73 billion in FY 2023[36] - The total loans for the year ended December 31, 2024, were $4,488,301, with an interest income of $406,843, resulting in a yield of 9.06%, compared to $3,725,197 in loans and $310,775 in interest income for 2023, yielding 8.34%[65] Interest Income and Margin - Total net interest income for Q4 2024 was $38.8 million, a 29.9% increase from $29.9 million in Q4 2023[22] - Interest income for the year ended December 31, 2024, reached $406,843 thousand, a significant rise from $310,776 thousand in 2023, representing a growth of 30.8%[62] - The portfolio net interest margin (NIM) improved to 3.70% in Q4 2024, up from 3.52% in Q4 2023[9] - Portfolio net interest margin (NIM) for FY 2024 was 3.56%, up from 3.34% in FY 2023[39] - The net interest margin for the portfolio related to the total company was 3.20% in Q4 2024, up from 3.10% in Q4 2023[63] Nonperforming Loans and Resolutions - Nonperforming loans (NPL) totaled $539.4 million, representing 10.7% of loans held for investment, up from 9.7% in 2023[16] - Total gains on nonperforming loan (NPL) resolutions were $10.2 million, an 84.6% increase from $5.5 million in FY 2023[39] - NPL resolution totaled $79.4 million in UPB for Q4 2024, realizing 107.0% of UPB resolved compared to 102.2% in Q4 2023[32] - Nonperforming loans as a percentage of total held-for-investment loans were 10.7% as of December 31, 2024, compared to 9.7% as of December 31, 2023[39] Expenses and Operating Costs - Total operating expenses for Q4 2024 were $39.1 million, up 33.7% from $29.3 million in Q4 2023, primarily due to increased securitization expenses[27] - Total expenses for FY 2024 were $167.6 million, a 40.3% increase from $119.5 million in FY 2023[39] - Compensation and employee benefits increased to $20.1 million in Q4 2024, a 32.6% rise from $15.1 million in Q4 2023[24] - Total operating expenses for the year ended December 31, 2024, were $139,638 thousand, up from $100,619 thousand in 2023, marking a 38.8% increase[62] Capital and Equity - The average common equity increased by 15.5% to $498.9 million in Q4 2024 compared to $431.9 million in Q4 2023[7] - The company issued $7.3 million in new common equity through its ATM program, supporting ongoing growth initiatives[4] - The book value per share rose to $15.70 as of December 31, 2024, compared to $13.49 a year earlier, an increase of 16.4%[56] Debt and Interest Expense - Total debt for the year ended December 31, 2024, was $4,359,484, with an interest expense of $271,039, resulting in a yield of 6.22%, compared to $3,556,411 in total debt and $203,024 in interest expense for 2023, yielding 5.71%[65] - The corporate debt for the year ended December 31, 2024, was $282,888, with an interest expense of $23,821, yielding 8.42%, compared to $215,000 and $16,556 in interest expense for 2023, yielding 7.70%[65]