Q1 2024 Earnings Call Transcript for Velocity Financial, Inc. (NYSE:VEL)

Velocity Financial, Inc. (NYSE:VEL) recently held its Q1 2024 Earnings Call on May 3, 2024, where the company’s executives discussed the impressive results and future outlook for the company. The call was led by Chris Oltmann, Treasurer of Velocity Financial, Inc., with Chris Farrar, President and CEO, and Mark Szczepaniak, CFO, also present.

During the call, Farrar highlighted the company’s strong performance in the first quarter of 2024, with origination volumes up by almost 75% compared to the previous year. The company saw significant demand in its niche market, especially considering the typically lighter volume in the first quarter. Velocity Financial, Inc. has been able to control expenses while driving increased earnings and higher returns on equity.

The company’s securitization market remains supportive, with spreads tightening and improved execution on their second deal in April. Participation from investors was broad, with 27 different investors purchasing bonds, and the deal was oversubscribed. Velocity Financial, Inc. has built a healthy investor base that believes in their program.

In terms of the company’s portfolio, they continue to resolve delinquent assets favorably, with plenty of fresh money available to purchase the real estate securing their loans. Velocity Financial, Inc. also secured $75 million in new corporate debt in February to fuel their goal of increasing the portfolio to $5 billion in UPB by 2025.

Overall, the company reported record earnings, with core EPS reaching $0.51 per share, driven by fair value gains from new originations and a strong net interest margin. The company’s pipeline is strong, with a record $2 billion worth of LOIs issued in April and a significant increase in new applications.

Velocity Financial, Inc. remains optimistic about the future, with a healthy market, strong earnings growth, and a positive outlook on key business drivers. The company’s focus on retaining earnings, growing book value, and redeploying capital into high-returning assets is expected to drive continued success and shareholder value in the future.