Velocity Financial (NYSE: VEL), a leading provider of business purpose loans, saw its stock soar 5.93% in after-hours trading on Thursday, following the release of its fourth-quarter and full-year 2024 financial results.

The company reported strong performances across key metrics, driven by record loan production volumes, consistently high underwriting standards, and successful resolution of non-performing loans (NPLs).

Q4 2024 Highlights

• Net income of $20.6 million, up 18.6% from Q4 2023

• Core net income of $21.8 million, an increase of 34.6% from Q4 2023

• Loan production of $563.5 million in unpaid principal balance (UPB), up 60.0% from Q4 2023

• NPLs as a percentage of loans held for investment (HFI) was 10.7%, up slightly from 9.7% in Q4 2023

• Resolutions of NPLs and real estate owned (REO) totaled $79.4 million in UPB, realizing gains of 107.0% of UPB resolved

• Portfolio net interest margin (NIM) of 3.70%, an increase of 18 bps from Q4 2023

Full-Year 2024 Highlights

• Loan production totaled $1.8 billion in UPB, the highest annual volume in Velocity's history, up 64.6% from 2023

• Portfolio NIM was 3.56%, a 22 bps increase from 2023

• Realized gains on NPL loan resolutions of $10.2 million, or 103.6% of UPB resolved, compared to $5.5 million, or 102.5% for 2023

• Net income of $68.4 million, up 30.9% from 2023

• Core net income of $72.9 million, a 36.5% increase from 2023

• Pretax return on equity of 20.3%, compared to 17.5% for 2023

Velocity Financial's strong performance was driven by continued strategic growth of its origination platform and focus on providing financing solutions to underserved market segments. The company's disciplined approach to maintaining high underwriting standards and strong loan resolution efforts also contributed to its impressive results.

With a robust loan pipeline and solid financial position, Velocity Financial is well-positioned to capitalize on growth opportunities and deliver long-term shareholder value.