Velocity Financial, Inc.

Good day and welcome to Velocity Financial Inc first quarter 2025 conference call. All participants will be in 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 telephone keypad. 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 Mr. Chris Altman, Treasurer. Please go ahead.

Thanks, Kaylee. Hello, everyone, and thank you for joining us today for the discussion of Velocity's first quarter 2025 results. Joining me today are Chris Farrar, Velocity's President and Chief Executive Officer, and Mark Supaniak, Velocity's Chief Financial Officer. Earlier this afternoon, we released our first quarter results. and you can find the press release and the accompanying presentation we will refer to during this call on our investor relations website at www.delfinance.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 the results, please see the risk factors and other cautionary statements made in our communications with shareholders. including the risk factors disclosed in our filing for 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 on 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 we appreciate everyone joining our first quarter earnings call. The strong momentum we experienced in 2024 carried into the first quarter this year as we originated $640 million in new loans, an increase of 69% versus the prior year, which drove a 27% increase in net revenue and a 17% increase in core pre-tax earnings. Our team grew production and remained disciplined by preserving our spreads and credit standards. We continue to see increased demand for all property types with a more recent tilt towards commercial loans versus the investor one to four residential loans and robust margins in both products. Looking forward, our pipeline is strong and growing across the board. With respect to the portfolio, we continue to realize consistent net interest income and healthy cash flows, and our special servicing team is doing a great job of resolving delinquent assets favorably. Our real estate markets remain healthy with plenty of dry capital ready to deploy in reasonably priced assets. From a capital markets perspective, we've been very busy this year with four successful debt transactions already completed, And we issued three new securitizations, paid down debt and collapsed one of our re-REMICs, and also sold new shares through our ATM program. Despite the recent volatility, we are very encouraged to see healthy investor demand and participation in our offerings. We appreciate all our partners that have supported our platform for so many years. Although the markets are choppy, our team is well prepared to operate in this environment. and we believe we offer a great platform for investors to earn consistent, compelling returns. I want to congratulate all Velocity team members on another fantastic quarter, and as always, we'll continue to work hard to deliver shareholder value. With that, I'll turn over to today's presentation, starting on slide three. As I mentioned, strong net income, core earnings of 55 cents a share, up from 51 cents a share a year ago, and our second best quarterly earnings in the company history, just a little bit below what we did in Q4 of last year. I mentioned the production. On a net basis, the portfolio is up 27%, and non-performing loans continue to be relatively stable at 10.8%. Most importantly there, NPA resolutions, again, in the quarter of 102.4, above par resolutions continue, which is great. In the financing and capital section, I mentioned the first securitization we completed with a weighted average rate of 6.7%. Collapsed the RE-REMEC, which freed up $52.6 million of retained securities that are available to us to do with whatever we want. We issued 1.6 million common shares, just under $29 million of proceeds, and those shares were accretive to book value. In terms of our liquidity and warehouse capacity, you can see we're in great shape there. On page four, one of the other securitizations we did in early April was our short-term, backed by our short-term loans, and that was another successful transaction. And the third one listed here on this page was the second deal that we did, and I highlight this one for a very important reason. It priced April 8th, and that was, you know, in the heart of all of the disruption in the market. And as you can see, our weighted average rate actually was 30 bps better than our first deal in the first part of the year. So again, although there's all this volatility, we continue to see strong support from our investors, and we're very pleased with the execution we've seen so far this year. On page five, walk you through just the simple adjustments that we make to get to core earnings. And then on the right, we have a bridge showing the buildup in book value. And to the far right, we make an adjustment if GAAP allowed us to adjust all of our held for cost loans to fair value, we would be reporting an adjusted book value of $18.50 a share. That is reflective of all of the assets that are in place and on the balance sheet at 331. So you can see we're getting nice growth in book value as we retain our earnings and execute on our strategy. And with that, I'll turn the presentation back over to Mark to continue.