EX-99

EX-99 2 d939111dex99.htm EX-99 EX-99

Exhibit 99

LOGO

Investors and Media:

Chris Oltmann

(818) 532-3708

Velocity Financial, Inc. Reports

First Quarter 2025 Results

First Quarter Highlights:

•

Net income of $18.9 million, up 9.5% from $17.3 million for 1Q24. Diluted EPS of $0.51, up $0.02 from $0.49 per share for 1Q24

•

Core net income⁽¹⁾ of $20.3 million, an increase of 11.0% from $18.2 million for 1Q24. Core diluted EPS⁽¹⁾ of $0.55, up from $0.51 per share for 1Q24

•

Record loan production of $640.4 million in UPB, a 13.7% and 69.1% increase from 4Q24 and 1Q24, respectively

•

Nonperforming loans (NPL) as a percentage of HFI⁽²⁾ loans were 10.8%, relatively consistent with 10.7% as of December 31, 2024, and 10.1% as of March 31, 2024, respectively

•

Resolutions of NPL and real estate owned (REO) totaled $76.4 million in UPB

•

Realized gains of $1.9 million or 102.4% of UPB resolved

•

Portfolio net interest margin (NIM) of 3.35%, a decrease of 35 bps from 3.70% for 4Q24 and flat compared to 3.35% for 1Q24. NIM in 4Q24 included higher cash interest received on nonperforming loans.

•

Completed the VCC 2025-1 securitization totaling $342.8 million of securities issued

•

Collapsed the VCC 2023-1R securitization, which released $52.6 million of marketable retained securities after paying off the associated debt

•

Liquidity⁽³⁾ of $75.6 million and total available warehouse line capacity of $238.2 million as of March 31, 2025

•

Recourse debt to equity ratio of 1.5x, compared to 1.4x as of March 31, 2024

•

Issued 1.6 million common shares, realizing net proceeds of $28.8 million through Velocity’s At The Market (ATM) offering program at an accretive to book value weighted average price of $18.35

•

GAAP Book value per common share of $16.19 as of March 31, 2025, a 15.6% increase from $14.01 as of March 31, 2024

⁽¹⁾	Core income and Core EPS are non-GAAP financial measures that exclude nonrecurring and unusual activities from GAAP net income.

⁽²⁾	Held for Investment (HFI) includes the unpaid principal balance of loans carried on an amortized cost basis and loans carried at fair value (FVO).

⁽³⁾	Liquidity includes unrestricted cash reserves of $51.7 million and available liquidity in unfinanced loans of $23.9 million.


		First Quarter 2025 Results

Westlake Village, CA – May 1, 2025 – Velocity Financial, Inc. (NYSE: VEL) (Velocity or the Company), a leader in business purpose loans, reported net income of $18.9 million and core net income of $20.3 million for 1Q25, compared to net income of $17.3 million and core net income of $18.2 million for 1Q24. Earnings and core earnings per diluted share were $0.51 and $0.55, respectively, for 1Q25, compared to $0.49 and $0.51 for 1Q24.

“We began 2025 with tremendous momentum, delivering a new record for quarterly production volume and solid earnings,” said Chris Farrar, President and CEO. “Velocity’s first quarter 2025 results were driven by higher portfolio net interest income and noninterest income from our growing production volume. Financing demand remained strong during the quarter, in both the traditional commercial and 1-4 family residential rental property markets, as investors continued to see considerable value in smaller commercial properties. For the foreseeable future, we expect investor loan demand to remain solid. We also continue to be opportunistic in seeking opportunities that would allow Velocity to leverage its core lending expertise and platform to expand into other lending markets. Despite the recent market volatility, we remain confident in Velocity’s long-term growth prospects and our ability to sustain profitable market share growth”.

First Quarter Operating Results


KEY PERFORMANCE INDICATORS
($ in thousands)	1Q 2025			1Q 2024			$ Variance		% Variance
Pretax income	$	26,894.2		$	23,235.9		$	3,658.3		15.7	%
Net income	$	18,887.2		$	17,251.0		$	1,636.2		9.5	%
Diluted earnings per share	$	0.51		$	0.49		$	0.02		5.4	%
Core pretax income	$	27,133.1		$	23,153.5		$	3,979.6		17.2	%
Core net income^(a)	$	20,253.3		$	18,249.5		$	2,003.9		11.0	%
Core diluted earnings per share^(a)	$	0.55		$	0.51		$	0.04		6.8	%
Pretax return on equity		20.11	%		20.76	%		n.a.		(3.2	)%
Core pretax return on equity^(a)		20.29	%		20.69	%		n.a.		(1.9	)%
Net interest margin - portfolio		3.35	%		3.35	%		n.a.		(0.1	)%
Net interest margin - total company		2.88	%		2.83	%		n.a.		1.5	%
Average common equity	$	534,940.4		$	447,612.7		$	87,327.6		19.5	%

^(a)	Core income, core diluted earnings per share and core pretax return on equity are non-GAAP measures. Please see the reconciliation to GAAP net income at the end of this release.

n.a.- not applicable

Discussion of results:

•

Net income for 1Q25 was $18.9 million, compared to $17.3 million for 1Q24

•

Driven by record production volume and strong portfolio earnings

•

Core net income was $20.3 million, compared to $18.2 million for 1Q24

•

1Q25 core adjustments included incentive compensation expenses and costs related to the Company’s employee stock purchase plan (ESPP)

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		First Quarter 2025 Results

•

Portfolio NIM for 1Q25 was 3.35%, essentially flat to 3.35% for 1Q24. Consistently strong NIM levels have resulted from rate discipline on record new loan production, with average loan coupons of 10.8% on loans produced over the last five quarters.


TOTAL LOAN PORTFOLIO
($ of UPB in millions)	1Q 2025			1Q 2024			$ Variance		% Variance
*Held for Investment*
Investor 1-4 Rental	$	2,799.5		$	2,336.7		$	462.8		19.8	%
Mixed Use		605.7			494.7			111.0		22.4	%
Multi-Family		397.8			323.4			74.5		23.0	%
Retail		522.4			378.0			144.4		38.2	%
Warehouse		367.3			295.5			71.8		24.3	%
Office		421.4			282.5			138.9		49.2	%
All Other		330.9			170.8			160.1		93.8	%

Total	$	5,445.0		$	4,281.5		$	1,163.5		27.2	%

*Held for Sale*
Investor 1-4 Rental	$	—		$	—		$	—		n.m.
Government Insured Multifamily (CHHC)		4.9			—			4.9		n.m.
Multi-Family		—			—			—		n.m.
Warehouse		—			—			—		n.m.
All Other		—			—			—		n.m.

Total Managed Loan Portfolio UPB	$	5,449.9		$	4,281.5		$	1,168.4		27.3	%

*Key loan portfolio metrics:*
Total loan count		13,858			11,013
Weighted average loan to value		66.1	%		67.6	%
Weighted average coupon		9.59	%		9.07	%
Weighted average total portfolio yield		9.11	%		8.71	%
Weighted average portfolio debt cost		6.23	%		5.93	%

n.m. - non meaningful

Discussion of results:

•

Velocity’s total loan portfolio was $5.4 billion in UPB as of March 31, 2025, an increase of 27.3% from $4.3 billion in UPB as of March 31, 2024

•

Primarily driven by 19.8% Y/Y growth in loans collateralized by Investor 1-4 Rental properties and 93.8% Y/Y growth in loans collateralized by “Other” commercial properties

•

Loan prepayments totaled $196.0 million in UPB, down 3.5% from $203.2 million for 4Q24, and an increase of 37.2% from $142.9 million for 1Q24

•

The UPB of fair value option (FVO) HFI loans was $3.1 billion, or 57.7% of total loans, as of March 31, 2025, an increase from $1.6 billion in UPB, or 36.8% as of March 31, 2024

•

The weighted average portfolio loan-to-value ratio was 66.1% as of March 31, 2025, down from 67.6% as of March 31, 2024, and below the five-quarter trailing average of 66.9%

•

The weighted average total portfolio yield was 9.11%, an increase of 40 bps from 1Q24, primarily driven by higher loan coupons on record levels of new HFI loan production

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		First Quarter 2025 Results

•

Portfolio-related debt cost was 6.23%, an increase of 30 bps from 1Q24, driven by higher warehouse financing utilization and securitized debt costs


LOAN PRODUCTION VOLUMES
($ in millions)	1Q 2025		1Q 2024		$ Variance			% Variance
Investor 1-4 Rental	$	266.6	$	167.1	$	99.6			59.6	%
Traditional Commercial		324.8		166.6		158.2			94.9	%
Short-term		44.1		45.0		(0.9	)		(1.9	)%
Government Insured Multifamily (CHHC)		4.9		—		4.9				n.m.

Total loan production	$	640.4	$	378.7	$	261.8			69.1	%

Acquisitions	$	—	$	12

n.m. - non meaningful

Discussion of results:

•

Loan production totaled $640.4 million in UPB, a 69.1% increase from $378.7 million for 1Q24, which is a new record for the highest quarterly production volume in the Company’s history

•

1Q25 production volume was driven by demand for Traditional Commercial financing, which increased 94.9% from 1Q24, in addition to a 59.6% Y/Y increase in long-term financing for Investor 1-4 rentals

•

The weighted average coupon (WAC) on 1Q25 HFI loan production was 10.5%, a decrease of 60bps from 11.1% for 1Q24 as we maintained our spreads due to a drop in our marginal securitization cost of funds

•

Government-insured Multifamily loans are originated by our subsidiary Century Health & Housing Capital and the GNMA securities are sold to investors for cash gains shortly after closing

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		First Quarter 2025 Results


HFI PORTFOLIO CREDIT PERFORMANCE INDICATORS
($ in thousands)	1Q 2025			1Q 2024			$ Variance			% Variance
Nonperforming loans^(a)	$	587,811.0		$	432,560.2		$	155,250.8			35.9	%
Total HFI loans	$	5,445,014.7		$	4,281,533.3		$	1,163,481.4			27.2	%
Nonperforming loans % total HFI loans		10.8	%		10.1	%		n.a.			6.9	%
Average nonperforming loans subject to CECL reserve ^(b)	$	297,379.8		$	321,442.0		$	(24,062.2	)		(7.5	)%
Loan loss reserve	$	5,016.8		$	5,266.7		$	(249.9	)		(4.7	)%
Total charge offs	$	1,029.1		$	504.0		$	525.1			104.2	%
Charge-offs as a % of avg. nonperforming CECL loans^(c)		1.4	%		0.6	%		n.a.			120.7	%
*Gain/(Loss) on REO*
Gain on transfer to REO	$	2,834.0		$	1,160.0		$	1,674.0			144.3	%
REO valuations, net	$	(2,073.2	)	$	285.8		$	(2,359.0	)		(825.5	)%
Gain (loss) on sale of REO	$	300.1		$	(1,721.8	)	$	2,021.8			(117.4	)%

Total gain (loss) on REO	$	1,060.8		$	(276.0	)	$	1,336.9			n.m.

^(a)	Total HFI nonperforming/nonaccrual loans include loans 90+ days past due, loans in foreclosure, bankruptcy and on nonaccrual.

^(b)	Reflects monthly average nonperforming loans held for investment, excluding FVO loans, during the period.

^(c)	Reflects the annualized quarter-to-date charge-offs to average nonperforming loans for the period.

n.a.- not applicable

n.m. - non meaningful

Discussion of results:

•

Nonperforming loans (NPL) totaled $587.8 million in UPB as of March 31, 2025, or 10.8% of loans HFI, compared to $432.6 million and 10.1% as of March 31, 2024

•

Charge-offs for 1Q25 totaled $1,029.1 thousand, compared to $504.0 thousand for 1Q24, mainly due to one large loss on a loan

•

The trailing five-quarter charge-off average was $559.2 thousand

•

Total gain on REO was $1.1 million, compared to a loss of $0.3 million for 1Q24, driven by gains on loans transferred to REO

•

The loan loss reserve totaled $5.0 million as of March 31, 2025, a 4.7% decrease from $5.3 million as of March 31, 2024

•

The CECL reserve rate was 0.22% (CECL Reserve as % of Amortized Cost HFI loans), which was above the recent five-quarter average rate of 0.19% and modestly higher than management’s expected range of 0.15% to 0.20%

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		First Quarter 2025 Results


NET REVENUES
($ in thousands)	1Q 2025			1Q 2024			$Variance			% Variance
Interest income	$	118,739.6		$	90,528.7		$	28,210.9			31.2	%
Interest expense - portfolio related		(75,088.2	)		(55,674.5	)		(19,413.7	)		34.9	%

Net Interest Income - portfolio related		43,652.4			34,854.2			8,798.2			25.2	%
Interest expense - corporate debt		(6,142.8	)		(5,380.0	)		(762.8	)		14.2	%
Loan loss provision		(1,871.9	)		(1,001.8	)		(870.0	)		86.8	%

Net interest income after provision for loan losses	$	35,637.8		$	28,472.4		$	7,165.3			25.2	%

Gain on disposition of loans		2,834.0			1,699.1			1,134.9			66.8	%
Unrealized (loss) gain on fair value loans		34,836.5			18,924.8			15,911.7			84.1	%
Unrealized gain (loss) on fair value of securitized debt		(13,682.3	)		(2,318.5	)		(11,363.8	)		490.1	%
Unrealized gain/(loss) on mortgage servicing rights		(1,080.6	)		444.0			(1,524.5	)		(343.4	)%
Origination fee income		8,679.3			4,985.7			3,693.6			74.1	%
Interest income on cash balance		1,339.0			1,631.1			(292.1	)		(17.9	)%
Other operating income (expense)		520.9			408.2			112.7			27.6	%

Total other operating income (expense)	$	33,445.7		$	25,775.3		$	7,670.4			29.8	%

Net revenue	$	69,083.5		$	54,246.8		$	14,836.7			27.4	%

Discussion of results:

•

Net Revenue was $69.1 million, an increase of 27.4% from $54.2 million for 1Q24

•

Resulting from continued strong production-driven portfolio net interest income growth, net unrealized FV gains and origination fee income

•

Total net interest income was $35.6 million, a 25.2% increase from $28.5 million for 1Q24

•

Portfolio net Interest income was $43.7 million for 1Q25, an increase of 25.2% from 1Q24, resulting from portfolio growth and consistent NPL resolution gains

•

Total other operating income was $33.4 million for 1Q25, an increase from $25.8 million for 1Q24

•

Origination fee income totaled $8.7 million, a 74.1% increase from $5.0 million for 1Q24, resulting from record loan production in 1Q25

•

Net unrealized FVO gains on loans, securitized debt and MSRs were $20.1 million, compared to a net gain of $17.1 million for 1Q24

•

Gain on disposition of loans totaled $2.8 million for 1Q25, driven mainly by loans transferred to REO

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		First Quarter 2025 Results


OPERATING EXPENSES
($ in thousands)	1Q 2025		1Q 2024		$ Variance			% Variance
Compensation and employee benefits	$	21,684.2	$	15,357.0	$	6,327.2			41.2	%
Origination expense		837.7		645.8		192.0			29.7	%
Securitization expenses		4,042.7		2,874.5		1,168.2			40.6	%
Rent and occupancy		274.5		497.6		(223.0	)		(44.8	)%
Loan servicing		8,007.9		4,823.6		3,184.3			66.0	%
Professional fees		1,783.1		2,115.5		(332.4	)		(15.7	)%
Real estate owned, net		3,029.1		2,455.3		573.8			23.4	%
Other expenses		2,530.1		2,241.7		288.4			12.9	%

Total operating expenses	$	42,189.3	$	31,010.9	$	11,178.4			36.0	%

Discussion of results:

•

Operating expenses totaled $42.2 million for 1Q25, an increase of 36.0% from 1Q24, primarily resulting from higher production-driven compensation expenses

•

Compensation expense totaled $21.7 million, compared to $15.4 million for 1Q24

•

Driven by commission compensation on higher production volume

•

Securitization expenses totaled $4.0 million from the issuance of one securitization during the quarter, compared to costs of $2.9 million for one securitization during 1Q24

•

Loan servicing expense totaled $8.0 million, as compared to $4.8 million for 1Q24, driven by higher servicing advance expense and portfolio growth

•

Professional fees totaled $1.8 million, a decrease of 15.7% from $2.1 million for 1Q24, driven by a reduction in legal expenses

•

REO expenses totaled $3.0 million, a 23.4% increase from $2.5 million for 1Q24, driven by $2.1 million of REO valuation losses

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		First Quarter 2025 Results


SECURITIZATIONS
($ in thousands)	Securities		Balance at					Balance at
Trusts	Issued		3/31/2025		W.A. Rate			3/31/2024		W.A. Rate
2017-2 Trust		245,601		31,786		4.14	%		41,610		4.06	%
2018-1 Trust		176,816		23,452		4.28	%		31,981		4.09	%
2018-2 Trust		307,988		55,604		4.49	%		74,490		4.51	%
2019-1 Trust		235,580		57,696		4.13	%		70,253		4.06	%
2019-2 Trust		207,020		44,334		3.45	%		62,467		3.44	%
2019-3 Trust		154,419		44,746		3.27	%		54,912		3.30	%
2020-1 Trust		248,700		88,265		2.88	%		101,991		2.89	%
2020-2 Trust		96,352		—		—			42,088		4.57	%
2021-1 Trust		251,301		146,536		1.76	%		165,657		1.77	%
2021-2 Trust		194,918		120,071		2.03	%		141,057		2.03	%
2021-3 Trust		204,205		132,082		2.47	%		153,438		2.46	%
2021-4 Trust		319,116		204,304		3.27	%		237,277		3.25	%
2022-1 Trust		273,594		207,933		3.93	%		233,429		3.94	%
2022-2 Trust		241,388		188,190		5.07	%		205,358		5.07	%
2022-MC1 Trust		84,967		6,031		6.85	%		27,519		6.92	%
2022-3 Trust		296,323		226,040		5.70	%		251,143		5.71	%
2022-4 Trust		308,357		221,499		6.21	%		263,336		6.22	%
2022-5 Trust		188,754		169,359		7.11	%		154,783		7.01	%
2023-1 Trust		198,715		148,803		7.08	%		169,107		7.04	%
2023-1R Trust		64,833		—		—			54,342		7.63	%
2023-2 Trust		202,210		150,964		7.64	%		178,713		8.24	%
2023-RTL1 Trust		81,608		63,163		8.29	%		81,608		7.22	%
2023-3 Trust		234,741		186,260		8.04	%		220,689		7.87	%
2023-4 Trust		202,890		168,737		8.30	%		215,821		8.32	%
2024-1 Trust		209,862		172,104		7.93	%		207,855		7.91	%
2024-2 Trust		286,235		244,591		7.11	%
2024-3 Trust		204,599		187,913		7.22	%
2024-4 Trust		253,612		231,625		7.29	%
2024-5 Trust		292,880		279,527		6.15	%
2024-6 Trust		293,895		285,272		6.15	%
2025-1 Trust		342,791		342,353		6.73	%

	$	6,904,270	$	4,429,240		5.87	%	$	3,440,924		5.43	%

Discussion of results

•

The weighted average rate on Velocity’s outstanding securitizations was 5.87% as of March 31, 2025, an increase of 44 bps from March 31, 2024

•

The Company completed one securitization during 1Q25, totaling $342.8 million of securities issued with a weighted average rate of 6.7%, a decrease from a weighted average rate of 7.9% for securitizations issued during 1Q24

•

Prepaid the VCC 2023-1R securitization totaling $35.6 million of debt outstanding, which released $52.6 million of marketable retained securities

•

In April 2025, the Company successfully completed two securitizations:

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		First Quarter 2025 Results

•

The VCC 2025-RTL1, totaling $111.4 million of securities issued. The transaction included $59.2 million in UPB of collateral from the VCC 2023-RTL1 securitization, which was simultaneously collapsed, and $52.2 million in UPB of recently originated short-term loans.

•

The VCC 2025-2 securitization totaling $377.5 million of securities issued with a weighted average rate of 6.4%, and comprised of recently originated long-term traditional commercial and investor 1-4 rental loans


RESOLUTION ACTIVITIES
LONG-TERM NONPERFORMING ASSETS
RESOLUTION ACTIVITY	FIRST QUARTER 2025					FIRST QUARTER 2024
($ in thousands)	UPB $		Gain / (Loss) $			UPB $		Gain / (Loss) $
Paid in full	$	20,589	$	989		$	16,563	$	798
Paid current		30,563		375			27,494		164
REO sold		4,541		337			3,888		224

Total resolutions	$	55,693	$	1,701		$	47,945	$	1,186

Recovery rate on resolved nonperforming assets				103.1	%				102.5	%

SHORT-TERM AND FORBEARANCE NONPERFORMING ASSETS
RESOLUTION ACTIVITY	FIRST QUARTER 2025					FIRST QUARTER 2024
($ in thousands)	UPB $		Gain / (Loss) $			UPB $		Gain / (Loss) $
Paid in full	$	5,341	$	182		$	2,496	$	—
Paid current		11,845		14			2,927		25
REO sold		3,558		(37	)		1,161		62

Total resolutions	$	20,744	$	159		$	6,584	$	87

Recovery rate on resolved nonperforming assets				100.8	%				101.3	%

Grand total resolutions	$	76,437	$	1,860		$	54,529	$	1,274

Recovery rate on resolved nonperforming assets				102.4	%				102.3	%

Discussion of results:

•

NPA resolutions totaled $76.4 million in UPB, realizing 102.4% of UPB resolved compared to $54.5 million in UPB and realization of 102.3% of UPB resolved for 1Q24

•

The UPB of loan resolutions for 1Q25 was modestly above the recent five-quarter resolution average of $71.9 million in UPB, but below the average gains of 103.4% of UPB resolved

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		First Quarter 2025 Results

Velocity’s executive management team will host a conference call and webcast on May 1^st, 2025, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to review its 1Q25 financial results.

Webcast Information

The conference call will be webcast live in listen-only mode and can be accessed through the Events and Presentations section of the Velocity Financial Investor Relations website: https://www.velfinance.com/events-and-presentations. To listen to the webcast, please visit Velocity’s website at least 15 minutes before the call to register, download, and install any needed software. An audio replay of the call will also be available on Velocity’s website after the conference call is completed.

Conference Call Information

To participate by phone, please dial in 15 minutes before the start time to allow for wait times to access the conference call. The live conference call will be accessible by dialing 1-833-316-0544 in the U.S. and Canada and 1-412-317-5725 for international callers. Callers should ask to join the Velocity Financial, Inc. conference call.

A replay of the call will be available through midnight on May 30, 2025, and can be accessed by dialing 1-877-344-7529 in the U.S. and 855-669-9658 in Canada or 1-412-317-0088 internationally. The passcode for the replay is 3542103. The replay will also be available on the Investor Relations section of the Company’s website under “Events and Presentations.”

About Velocity Financial, Inc.

Based in Westlake Village, California, Velocity is a vertically integrated real estate finance company that primarily originates and manages business purpose loans secured by 1-4 unit residential rental and small commercial properties. Velocity originates loans nationwide across an extensive network of independent mortgage brokers built and refined over 20 years.

Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with United States generally accepted accounting principles (GAAP), the Company uses non-GAAP core net income and core diluted EPS, which are non-GAAP financial measures.

Non-GAAP core net income and non-GAAP core diluted EPS are non-GAAP financial measures that represent our net income (loss) and net income (loss) per diluted share, adjusted to eliminate the effect of certain costs incurred from activities that are not normal recurring operating expenses, such as COVID-stressed charges and recoveries of loan loss provision, nonrecurring debt amortization, the impact of operational measures taken to address the COVID-19 pandemic and workforce reduction costs, and costs associated with acquisitions. To calculate non-GAAP core diluted EPS, we use the weighted average number of shares of common stock outstanding that is used to calculate net income per diluted share under GAAP.

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		First Quarter 2025 Results

We have included non-GAAP core net income, and non-GAAP core diluted EPS because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that non-GAAP core net income and non-GAAP core diluted EPS provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain items that we expect to be nonrecurring.

These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.

For more information on Core Income, please refer to the section of this press release below titled “Adjusted Financial Metric Reconciliation to GAAP Net Income” at the end of this press release.

Forward-Looking Statements

Some of the statements contained in this press release may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to anticipated results, expectations, projections, plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “goal,” ”position,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans, or intentions.

The forward-looking statements contained in this press release reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions, and changes in circumstances that may cause actual results to differ significantly from those expressed or contemplated in any forward-looking statement. While forward-looking statements reflect our good faith projections, assumptions, and expectations, they are not guarantees of future results. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events, or other changes, except as required by applicable law. Factors that could cause our results to differ materially include, but are not limited to (1) general economic and real estate market conditions, including the risk of recession (2) regulatory and/or legislative changes, (3) our customers’ continued interest in loans and doing business with us, (4) market conditions and investor interest in our future securitizations, and (5) the continued conflict in Ukraine and Israel and (6) changes in federal government fiscal and monetary policies.

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		First Quarter 2025 Results

Additional information relating to these and other factors that could cause future results to differ materially from those expressed or contemplated in any forward-looking statements can be found in the section titled ‘‘Risk Factors” in our Form 10-Q filed with the SEC on May 14, 2020, as well as other cautionary statements we make in our current and periodic filings with the SEC. Such filings are available publicly on our Investor Relations web page at www.velfinance.com.

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		First Quarter 2025 Results

Velocity Financial, Inc.

Consolidated Balance Sheet


	Quarter Ended
	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
	Unaudited			Audited			Unaudited			Unaudited			Unaudited
(In thousands)
Assets
Cash and cash equivalents	$	51,676		$	49,901		$	44,094		$	47,366		$	34,829
Restricted cash		22,785			20,929			23,167			32,293			24,216
Loans held for sale, at fair value		5,008			—			19,231			—			—
Loans held for investment, at fair value		3,287,188			2,766,951			2,354,718			1,971,683			1,649,540
Loans held for investment, at amortized cost		2,322,009			2,420,116			2,526,320			2,619,619			2,727,518

Total loans, net		5,614,205			5,187,067			4,900,269			4,591,302			4,377,058
Accrued interest receivables		38,460			35,235			32,944			31,124			29,374
Receivables due from servicers		120,016			123,494			93,681			82,359			87,523
Other receivables		3,599			1,359			4,265			6,566			2,113
Real estate owned, net		83,444			68,000			62,361			50,757			46,280
Property and equipment, net		1,592			1,650			1,693			1,912			2,013
Deferred tax asset		11,051			13,612			14,501			1,144			1,580
Mortgage Servicing Rights, at fair value		12,631			13,712			12,416			12,229			9,022
Derivative assets		—			—			—			—			1,967
Goodwill		6,775			6,775			6,775			6,775			6,775
Other assets		5,296			5,674			6,308			9,566			5,468

Total Assets	$	5,971,530		$	5,527,408		$	5,202,474		$	4,873,393		$	4,628,218

Liabilities and members’ equity
Accounts payable and accrued expenses	$	153,475		$	147,814		$	140,534		$	138,033		$	123,988
Secured financing, net		285,294			284,833			284,371			283,909			283,813
Securitized debt, at amortized cost		1,935,746			2,019,056			2,105,099			2,228,941			2,329,906
Securitized debt, at fair value		2,459,767			2,207,408			1,749,268			1,509,952			1,073,843
Warehouse & repurchase facilities		570,025			348,082			434,027			237,437			360,216
Derivative liability		1,004			—			1,486			374			—

Total Liabilities		5,405,311			5,007,193			4,714,785			4,398,646			4,171,766
Stockholders’ Equity
Stockholders’ equity		563,187			516,944			484,636			471,323			452,941
Noncontrolling interest in subsidiary		3,032			3,271			3,053			3,424			3,511

Total equity		566,219			520,215			487,689			474,747			456,452

Total Liabilities and members’ equity	$	5,971,530		$	5,527,408		$	5,202,474		$	4,873,393		$	4,628,218

Book value per share	$	16.19		$	15.70		$	14.91		$	14.52		$	14.01

Shares outstanding		34,966	⁽¹⁾		33,143	⁽²⁾		32,712	⁽³⁾		32,701	⁽⁴⁾		32,574	⁽⁵⁾

⁽¹⁾	Based on 34,965,587 common shares outstanding as of March 31, 2025, and excludes unvested shares of common stock authorized for incentive compensation totaling 419,160.

⁽²⁾	Based on 33,142,650 common shares outstanding as of December 31, 2024, and excludes unvested shares of common stock authorized for incentive compensation totaling 402,935.

⁽³⁾	Based on 32,711,910 common shares outstanding as of September 30, 2024, and excludes unvested shares of common stock authorized for incentive compensation totaling 402,935.

⁽⁴⁾	Based on 32,701,185 common shares outstanding as of June 30, 2024, and excludes unvested shares of common stock authorized for incentive compensation totaling 397,450.

⁽⁵⁾	Based on 32,574,498 common shares outstanding as of March 31, 2024, and excludes unvested shares of common stock authorized for incentive compensation totaling 411,296.

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		First Quarter 2025 Results

Velocity Financial, Inc.

Consolidated Statements of Income (Quarters)


	Quarter Ended
($ in thousands)	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
	Unaudited			Unaudited			Unaudited			Unaudited			Unaudited
Revenues
Interest income	$	118,740		$	113,484		$	105,070		$	97,760		$	90,529
Interest expense - portfolio related		75,088			68,484			63,871			59,188			55,675

Net interest income - portfolio related		43,652			45,000			41,199			38,572			34,854
Interest expense - corporate debt		6,143			6,143			6,143			6,155			5,380

Net interest income		37,510			38,857			35,056			32,417			29,474
Provision for (reversal of) credit losses		1,872			22			(69	)		218			1,002

Net interest income after provision for loan losses		35,638			38,835			35,125			32,199			28,472
Other operating income
Gain on disposition of loans		2,834			2,784			2,291			3,168			1,699
Unrealized gain (loss) on fair value loans		34,836			(15,723	)		35,530			17,123			18,925
Unrealized gain (loss) on fair value securitized debt		(13,682	)		34,539			(24,995	)		(4,643	)		(2,318	)
Unrealized gain/(loss) on mortgage servicing rights		(1,081	)		1,297			(993	)		(373	)		444
Origination fee income		8,679			7,245			6,704			5,072			4,986
Interest income on cash balance		1,339			1,451			1,676			1,731			1,631
Other income		521			736			519			483			408

Total other operating income		33,446			32,330			20,732			22,561			25,775

Net revenue		69,084			71,165			55,857			54,760			54,247

Operating expenses
Compensation and employee benefits		21,684			20,084			17,586			16,562			15,357
Origination expenses		838			816			867			749			646
Securitizations expenses		4,043			7,103			3,186			6,232			2,874
Rent and occupancy		275			296			519			617			498
Loan servicing		8,008			6,749			5,656			5,160			4,824
Professional fees		1,783			1,477			2,305			1,718			2,115
Real estate owned, net		3,029			268			1,951			1,355			2,455
Other operating expenses		2,530			2,335			2,543			2,494			2,242

Total operating expenses		42,190			39,127			34,613			34,887			31,011

Income before income taxes		26,894			32,038			21,244			19,873			23,236
Income tax expense		8,246			11,233			5,627			5,162			5,903

Net income		18,649			20,805			15,617			14,711			17,333

Net income (loss) attributable to noncontrolling interest		(239	)		218			(186	)		(67	)		82

Net income attributable to Velocity Financial, Inc.		18,887			20,587			15,803			14,778			17,251

Less undistributed earnings attributable to participating securities		233			253			191			182			217

Net earnings attributable to common shareholders	$	18,654		$	20,334		$	15,612		$	14,596		$	17,034

Basic earnings (loss) per share	$	0.55		$	0.62		$	0.48		$	0.45		$	0.52

Diluted earnings (loss) per common share	$	0.51		$	0.57		$	0.44		$	0.42		$	0.49

Basic weighted average common shares outstanding		33,687			32,771			32,711			32,585			32,541

Diluted weighted average common shares outstanding		36,811			36,097			35,895			35,600			35,439

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		First Quarter 2025 Results

Velocity Financial, Inc.

Net Interest Margin – Portfolio Related and Total Company

(Unaudited)

Quarters:


	Quarter Ended March 31, 2025							Quarter Ended March 31, 2024
($ in thousands)	Average Balance		Interest Income / Expense		Average Yield / Rate⁽¹⁾			Average Balance		Interest Income / Expense		Average Yield / Rate⁽¹⁾
Loan portfolio:
Loans held for sale	$	998						$	9,662
Loans held for investment		5,213,188							4,149,750

Total loans	$	5,214,186	$	118,740		9.11	%	$	4,159,412	$	90,529		8.71	%

Debt:
Warehouse and repurchase facilities	$	433,790		8,505		7.84	%	$	267,559		6,392		9.56	%
Securitizations		4,387,277		66,583		6.07	%		3,486,173		49,283		5.65	%

Total debt - portfolio related		4,821,067		75,088		6.23	%		3,753,732		55,675		5.93	%
Corporate debt		290,000		6,142		8.47	%		261,552		5,380		8.23	%

Total debt	$	5,111,067	$	81,230		6.36	%	$	4,015,284	$	61,055		6.08	%

Net interest spread - portfolio related⁽²⁾						2.88	%						2.77	%
Net interest margin - portfolio related						3.35	%						3.35	%
Net interest spread - total company⁽³⁾						2.75	%						2.62	%
Net interest margin - total company						2.88	%						2.83	%

⁽¹⁾	Annualized.

⁽²⁾	Net interest spread — portfolio related is the difference between the rate earned on our loan portfolio and the interest rates paid on our portfolio-related debt.

⁽³⁾	Net interest spread — total company is the difference between the rate earned on our loan portfolio and the interest rates paid on our total debt.

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		First Quarter 2025 Results

Velocity Financial, Inc.

Adjusted Financial Metric Reconciliation to GAAP Net Income

(Unaudited)

Quarters:

Core Net Income

Quarter Ended

3/31/2025

12/31/20234

9/30/2024

6/30/2024

3/31/2024

Net Income

18,887

20,587

15,803

14,778

17,251

Equity award & ESPP costs

1,366

1,167

1,146

1,140

998

Core Net Income

20,253

21,754

16,949

15,918

18,249

Diluted weighted average common shares outstanding

36,811

36,097

35,895

35,600

35,439

Core diluted earnings per share

0.55

0.60

0.47

0.45

0.51

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