Velocity Financial, Inc.

Good day and welcome to the Velocity Financial Third Quarter 2024 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Oltman, Director of Investor Relations. Please go ahead.

Thanks, Danielle. Hello, everyone, and thank you for joining us today for the discussion of Velocity's third quarter 2024 results. Joining me today are Chris Farrar, Velocity's President and Chief Executive Officer, and Mark Sapaniak, Velocity's Chief Financial Officer. Earlier this afternoon, we released our third quarter results, and you can find the press release and accompanying presentation we will refer to during this call on our investor relations website at www.bellfinance.com. I'd like to remind everyone that today's call may include forward-looking statements, which are uncertain and outside of the company's control, and actual results may differ materially. For discussion of some of the risks and other factors that could affect results, please see the risk factors and other cautionary statements made in our communications with shareholders, including the risk factors disclosed in our filings with the Securities and Exchange Commission. Please also note that the content of this conference call contains time-sensitive information that is accurate only as of today, and we do not undertake any duty to update forward-looking statements. We may also refer to certain non-GAAP measures on this call. For reconciliations of these non-GAAP measures, you should refer to the earnings materials in our Investor Relations website. Finally, today's call is being recorded and will be available on the company's website later today. And with that, I will now turn the call over to Chris Farrar.

Thanks, Chris. And thank you all for joining our third quarter earnings call. After the close, we reported another record quarter for the company as our team continues to execute well across the board. We saw strong demand for new loans as our origination volumes grew by 64% over the prior year quarter. and our net portfolio growth was $876 million, or 22% in total UPB. I want to congratulate our production team on closing just under 1,200 loans in the quarter while maintaining our margins and credit standards as the weighted average LTV actually dropped to 63%. In terms of the financials, our net interest income increased by 29%, Our NIM was up 26 basis points and earnings grew by 31%. Turning to credit performance, our special servicing team delivered another great quarter by successfully resolving delinquent assets favorably. And we continue to see healthy real estate markets in our niche, especially with stable rising values and plenty of liquidity from new investors. From a financing perspective, we're well positioned to fund our growth as our capital markets team continues to take advantage of the very strong market conditions. Our most recent deal closed in early October and was six times oversubscribed on the AAA bonds, which allowed us to realize an excellent cost of funds of approximately 6%. Looking forward, our pipeline is healthy and growing, and we received a new company record of over 900 applications for more than $450 million in UPV in the month of October alone, as borrowers look to finance, sorry, look to lock in financing by year end. Obviously, as our momentum continues, we will exceed our portfolio goal of $5 billion of UPV by 2025, and the future is bright. As always, we appreciate all the support we have from our partners and shareholders as we work every day to create long-term value for all. With that, we'll turn to our earnings presentation materials that were released after the close, starting on page three. As we take a look, as I mentioned, earnings were up significantly, really seeing nice portfolio growth in the income coming off that portfolio. NIM up to 3.6%, which was great for the quarter. In terms of production, $476.8 million, which is really just an incredible quarter for us. The team's doing a great job. In terms of non-performing loans, relatively flat with where we were last quarter, and most importantly, continue to see very healthy resolutions with a 3.4% gain over UPB. Turning to the financing and capital part of the business, I mentioned that we completed a couple of securitizations. The market there is very healthy and very strong, and we see a lot of demand from investors. We also collapsed the 2020-2 securitization during the quarter, which was underlevered and at about $25 million of retained equity that we were able to redeploy. So that's a great transaction for us. Very good in terms of liquidity and warehouse capacity. So we've got plenty of room there to grow the business. And as I mentioned, the October securitization really went off well. On page four. We reconciled to coordinate income with some of the adjustments there, and then obviously grow through a bar chart here, the book value, again, significantly in the quarter, and as in prior periods, reflect the adjusted book value, reminding everybody if we were allowed under GAAP to mark the rest of the portfolio to what we think is fair value, you'd come up with an adjusted book value of So, again, we think there's significant embedded gains in the legacy amortized cost portfolio that is continuing to run off. With that, I'll turn it over to Mark.