Velocity Financial(US:VEL)2025-05-01 21:27Loan Portfolio and Performance - As of March 31, 2025, the company's loan portfolio totaled $5.4 billion, with an average loan balance of approximately $393.0 thousand[155]. - The annualized yield on the total portfolio for the three months ended March 31, 2025, was 9.11%[155]. - The portfolio-related net interest margin for both the three months ended March 31, 2025, and 2024, was 3.35%[157]. - Total loans increased from $4.28 billion as of March 31, 2024, to $5.45 billion as of March 31, 2025, representing a growth of approximately 27.3%[175]. - The weighted average loan-to-value (LTV) ratio at origination was 66.1% as of March 31, 2025, slightly down from 67.6% as of March 31, 2024[175]. - Total loan originations for the three months ended March 31, 2025, increased to $640.4 million, up $76.9 million from the previous quarter and $261.8 million from the same quarter last year[179]. - The weighted average loan-to-value (LTV) ratio for total loan originations was 62.3% for the three months ended March 31, 2025[179]. - The company’s portfolio of loans held for investment includes a significant portion (95.4%) maturing in more than five years as of March 31, 2025[180]. Nonperforming Loans and Credit Losses - Nonperforming loans as a percentage of total loans were 10.8% as of March 31, 2025, compared to 10.1% as of March 31, 2024[175]. - Nonperforming loans amounted to $587.8 million, or 10.8% of the held for investment loan portfolio, compared to $539.4 million, or 10.7% as of December 31, 2024[190]. - The allowance for credit losses as of March 31, 2025, was $5.0 million, slightly higher than the expected range of 0.15% to 0.20% of loans held for investment[186]. - Charge-offs for the three months ended March 31, 2025, were $1.03 million, representing 1.38% of average nonperforming loans[182]. - The provision for credit losses for the three months ended March 31, 2025, was $1.87 million, compared to $22,000 for the previous quarter[188]. - Resolved $76.4 million of nonperforming assets for Q1 2025, down from $79.4 million in Q4 2024, but up from $54.5 million in Q1 2024[191]. - Recovery rate on resolved nonperforming assets was 103.1% in Q1 2025, compared to 109.2% in Q4 2024 and 102.5% in Q1 2024[192]. Financial Performance - For the three months ended March 31, 2025, the company generated pre-tax income of $26.9 million and net income of $18.6 million, compared to $23.2 million and $17.3 million for the same period in 2024[157]. - Net income attributable to Velocity Financial, Inc. for the three months ended March 31, 2025, was $18,887,000, compared to $17,251,000 in the same period in 2024, a growth of 9%[230]. - Total operating expenses for the three months ended March 31, 2025, were $42,190,000, an increase from $31,011,000 in the same period of 2024, indicating a 36% rise[230]. - The provision for credit losses for the three months ended March 31, 2025, was $1,872,000, compared to $1,002,000 for the same period in 2024, showing an increase of 87%[230]. - Interest income for the three months ended March 31, 2025, was $118,740,000, compared to $90,529,000 for the same period in 2024, representing a 31% increase[230]. - Net interest income after provision for credit losses for the three months ended March 31, 2025, was $35,638,000, up from $28,472,000 in the same period of 2024, reflecting a 25% increase[230]. - Total other operating income increased by $7.7 million to $33.4 million for the three months ended March 31, 2025, primarily driven by increased origination fee income and unrealized gains from fair value marks[238]. Debt and Financing - The company has executed 38 securitized debt transactions, resulting in over $8.3 billion in gross debt proceeds from May 2011 through March 2025[156]. - Total debt as of March 31, 2025, was $5,111,067,000, with a portfolio-related interest expense of $75,088,000[230]. - The outstanding bond balance increased to $4,429,240,000 as of March 31, 2025, compared to $4,269,008,000 on December 31, 2024, reflecting a growth of approximately 3.75%[271]. - A five-year $215.0 million syndicated corporate debt agreement was established on March 15, 2022, with a fixed interest rate of 7.125% maturing on March 15, 2027[275]. - A subsequent five-year $75.0 million syndicated corporate debt agreement was entered into on February 5, 2024, with an interest rate of 9.875% maturing on February 15, 2029[276]. Cash Flow and Liquidity - Total liquidity, including available warehouse capacity, was $313.8 million as of March 31, 2025, consisting of $238.2 million in available warehouse capacity and $51.7 million in cash[259]. - Cash provided by operating activities was $3.54 million for the three months ended March 31, 2025, down from $10.58 million in the previous year[260]. - Cash used in investing activities was $401.41 million for the three months ended March 31, 2025, compared to $212.44 million in the previous year[260]. - Cash provided by financing activities was $401.51 million for the three months ended March 31, 2025, up from $198.98 million in the previous year[260]. - As of March 31, 2025, borrowings under warehouse facilities amounted to $571.8 million, with $238.2 million of available capacity[265]. Forward-Looking Statements - The company acknowledges that forward-looking statements may not prove to be correct and actual results may differ materially from anticipated results[285]. - Forward-looking statements include expectations regarding loan originations and the resolution of non-performing loans[285]. - The company will not update any forward-looking statements after the date they are made, except as required by law[286]. - Important factors that could cause actual results to differ are detailed in the Quarterly Report and other filed documents[285].