EX-99

EX-99 2 d104077dex99.htm EX-99 EX-99

Exhibit 99

Velocity Financial, Inc. Reports

Fourth Quarter and Full-Year 2025 Results

Fourth Quarter Highlights

Financial Results

•

Net income of $34.8 million, an increase of 69.0% from $20.6 million for 4Q24. Diluted EPS of $0.89, an increase of $0.32 from $0.57 per share for 4Q24

•

Driven by record production volume, strong portfolio earnings and a tax effected gain of $13.4 million on sale of NPL loans

•

Core net incomeof $36.3 million, an increase of 67.0% from $21.8 million for 4Q24. Core diluted EPS of $0.93, an increase from $0.60 per share for 4Q24¹

•

Diluted book value per common share of $17.19 or $675.7 million, an increase of 20.5% from $14.26 or $520.2 million as of December 31, 2024

•

Portfolio net interest margin (NIM) of 3.59%, a decrease of 11 bps from 3.70% for 4Q24

•

Consistently strong NIM levels have resulted from rate discipline on record new loan production, with average loan coupons of 10.40% on loans produced over the last five quarters

Portfolio

•

Total loan production of $634.6 million, an increase of 12.6% from 4Q24

•

Nonperforming loans (NPLs) as a percentage of Held for Investment (HFI) loans was 8.5%, a decrease from 10.7% as of December 31, 2024

•

NPLs resolution totaled $78.1 million in UPB

•

Net gains of 103.0% or $2.3 million

•

Total NPLs recoveries of 109.8% or $7.6 million of UPB resolved including accrued interest received

Liquidity and Capitalization

•

Completed two securitizations totaling $646.3 million

•

Liquidity of $116.8 million, consisting of $92.1 million in unrestricted cash and $24.7 million in available borrowings from unpledged loans

•

Total available warehouse line capacity of $599.9 million

Core net income and core diluted EPS are non-GAAP financial measures. Non-GAAP core adjustments include stock-based compensation expenses and costs related to the Company’s employee stock purchase plan. See “Non-GAAP Financial Measures” and “Non-GAAP Financial Measure Reconciliations to GAAP Measures” at the end of this press release for more information regarding the use of non-GAAP measures.

Westlake Village, CA – March 11, 2026 – Velocity Financial, Inc. (NYSE: VEL) (Velocity or the Company), a leader in business purpose loans, reported net income of $105.1 million and core net income of $111.0 million for 2025, compared to $68.4 million and $72.9 million, respectively, for 2024. Earnings and core earnings per diluted share were $2.75 and $2.91 for 2025, compared to $1.91 and $2.03, respectively, for 2024.

“Velocity delivered impressive earnings in the fourth quarter and full year 2025” said Chris Farrar, President and CEO. “The Company’s record full-year 2025 earnings were driven by continued strong production, which also reached record levels. Our success resulted from ongoing initiatives to capture a greater share of the large but fragmented business purpose loan market. I’m especially proud of our team’s ability to achieve outstanding production volume growth while remaining focused on credit discipline and maintaining strong margins. We are well positioned to drive future earnings by addressing the important niche we serve.”

Operating Results

Key Performance Indicators²


	Three Months Ended December 31,
	2025			2024			Variance			% Variance
	($ in thousands, except per share amounts)
Income before income tax	$	50,049		$	32,038		$	18,011			56.2	%
Net income	$	34,797		$	20,587		$	14,210			69.0	%
Diluted earnings per share	$	0.89		$	0.57		$	0.32			56.1	%
Core income before income tax	$	52,224		$	33,463		$	18,761			56.1	%
Core net income	$	36,327		$	21,754		$	14,573			67.0	%
Core diluted earnings per share	$	0.93		$	0.60		$	0.33			54.3	%
Net interest margin — portfolio related		3.59	%⁽¹⁾		3.70	%⁽¹⁾		(0.11	)%		(3.1	)%
Net interest margin — total company		3.21	%⁽¹⁾		3.20	%⁽¹⁾		0.01	%		0.3	%
Operating expense ratio		25.7	%		26.8	%		(1.1	)%		(4.2	)%
Average common equity	$	651,352		$	498,887		$	152,465			30.6	%
Pre-tax return on average equity		30.7	%⁽¹⁾		25.7	%⁽¹⁾		5.0	%		19.7	%
Core pre-tax return on average equity		32.1	%⁽¹⁾		26.8	%⁽¹⁾		5.2	%		19.5	%

⁽¹⁾	Annualized

²	Core income before income tax, core net income, core diluted EPS and core pre-tax return on average equity are non-GAAP measures. Please see “Non-GAAP Financial Measures” and “Non-GAAP Financial Measure Reconciliations to GAAP Measures” at the end of this press release.

Condensed Results of Operations


	Three Months Ended December 31,
	2025			2024		$ Variance			% Variance
				($ in thousands)
Net interest income	$	51,609		$	38,857	$	12,752			32.8	%
Provision for credit losses		1,954			22		1,932			8,781.8	%

Net interest income after provision		49,655			38,835		10,820			27.9	%
Other operating income		53,249			32,330		20,919			64.7	%

Net revenue		102,904			71,165		31,739			44.6	%
Operating expenses		52,855			39,127		13,728			35.1	%

Income before income taxes		50,049			32,038		18,011			56.2	%
Income tax expense		15,296			11,233		4,063			36.2	%

Net income		34,753			20,805		13,948			67.0	%
Net income (loss) attributable to noncontrolling interest		(44	)		218		(262	)		(120.2	)%

Net income attributable to Velocity Financial, Inc.	$	34,797		$	20,587	$	14,210			69.0	%

•

Net interest income after provision for credit losses was $49.7 million, an increase of 27.9% from $38.8 million for 4Q24

•

Driven by strong portfolio growth and recoveries of interest income from NPLs by our asset management team

•

Other operating income was $53.2 million, an increase from $32.3 million for 4Q24

•

Driven primarily by net unrealized gain on fair value instruments and origination fee income

•

Net revenue was $102.9 million, an increase of 44.6% from $71.2 million for 4Q24

•

Resulted from continued strong production-driven portfolio net interest income growth, fair value gains and origination fee income

•

Operating expenses totaled $52.9 million, an increase of 35.1% from 4Q24, primarily from higher production-driven compensation expenses

•

Compensation expense totaled $22.6 million compared to $20.1 million for 4Q24

•

Driven by increases in headcount and commission compensation on higher production volume

•

Securitization expense totaled $6.3 million from the issuance of two securitizations, compared to costs of $7.1 million for two securitizations during 4Q24

•

Loan servicing expense totaled $9.4 million, from $6.7 million for 4Q24, driven by portfolio growth

•

REO, net expense was $8.7 million compared to $0.3 million for 4Q24, driven mainly by valuation adjustments

Loan Portfolio


	December 31,
	2025		2024		Variance		% Variance
	($ in thousands)
Total Loans Outstanding:
Investor 1-4	$	3,125,346	$	2,653,264	$	472,082		17.8	%
Mixed use		709,131		560,548		148,583		26.5	%
Retail		691,683		446,576		245,107		54.9	%
Office		542,556		309,222		233,334		75.5	%
Multifamily		461,666		367,007		94,659		25.8	%
Warehouse		454,527		334,307		120,220		36.0	%
Other ⁽¹⁾		506,429		385,013		121,416		31.5	%

Total loans	$	6,491,338	$	5,055,937	$	1,435,401		28.4	%

⁽¹⁾	All other properties individually comprised less than 5.0% of the total unpaid principal balance


Key Loan Portfolio Metrics ⁽¹⁾:
Loan count	16,652		12,932		3,720		28.8	%
Loan-to-value	65.2	%	66.6	%	(1.4	)%	(2.1	)%
Coupon	9.74	%	9.53	%	0.21	%	2.2	%
Portfolio yield ⁽²⁾	9.47	%	9.34	%	0.13	%	1.4	%
Portfolio cost of debt ⁽²⁾	6.23	%	6.14	%	0.09	%	1.5	%
Portfolio spread ⁽²⁾	3.24	%	3.20	%	0.04	%	1.3	%

⁽¹⁾	Weighted averages, except for loan count

⁽²⁾	Annualized

•

Total loan portfolio was $6.5 billion in UPB as of December 31, 2025, an increase of 28.4% from $5.1 billion as of December 31, 2024

•

Driven by healthy growth across all types of collateral securing our loans

•

Loan prepayments totaled $227.6 million in UPB, an increase of 12.0% from $203.2 million for 4Q24

•

UPB of HFI FVO loans was $4.5 billion, or 69.0% of total HFI loans, as of December 31, 2025, an increase from $2.7 billion, or 52.5% as of December 31, 2024

•

Weighted average portfolio loan-to-value ratio was 65.2% as of December 31, 2025, down from 66.6% as of December 31, 2024, and slightly below the five-quarter trailing average of 65.4%

•

Weighted average portfolio yield was 9.47%, an increase of 13 bps from 4Q24, primarily driven by higher weighted average loan coupons

•

Portfolio-related debt cost was 6.23%, an increase of 9 bps from 4Q24, driven by higher warehouse financing utilization and securitized debt interest expense

Loan Production Volumes


	Three Months Ended December 31,
	2025		2024		$ Variance			% Variance
	($ in thousands)
Originations Including Unfunded Commitments:
Traditional commercial	$	322,096	$	320,306	$	1,790			0.6	%
Investor 1-4 rental		281,105		199,895		81,210			40.6	%
Short-term		29,595		38,675		(9,080	)		(23.5	)%
Government insured multifamily		1,818		4,607		(2,789	)		(60.5	)%

Total	$	634,614	$	563,483	$	71,131			12.6	%

•

Loan production totaled $634.6 million, an increase of 12.6% from $563.5 million for 4Q24

•

4Q25 production volume was driven mainly by demand for Investor 1-4 rental loans, which increased 40.6% from 4Q24

•

Weighted average coupon on 4Q25 HFI loan production was 10.14%, a decrease of 65 bps from 10.79% for 4Q24 mirroring a similar reduction in shorter term interest rates

•

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

Total HFI Portfolio Credit Performance


	December 31,
	2025			2024			Variance			% Variance
	($ in thousands)
Key Nonperforming Loans Metrics:
Nonperforming loans UPB	$	554,540		$	539,438		$	15,102			2.8	%
Total UPB	$	6,491,338		$	5,055,937		$	1,435,401			28.4	%
Nonperforming loans UPB / Total UPB		8.5	%		10.7	%		(2.1	)%		(19.9	)%

•

NPL totaled $554.5 million in UPB as of December 31, 2025, or 8.5% of total HFI loans, compared to $539.4 million or 10.7% as of December 31, 2024

CECL Portfolio Credit Performance


	Three Months Ended December 31,
	2025			2024			Variance			% Variance
	($ in thousands)
Allowance for Credit Losses:
Beginning balance	$	4,586		$	4,851		$	(265	)		(5.5	)%
Provision for credit losses		1,954			22			1,932			8,781.8	%
Charge-offs		(2,019	)		(699	)		(1,320	)		(188.8	)%

Ending balance	$	4,521		$	4,174		$	347			8.3	%

Total UPB subject to CECL	$	2,013,514		$	2,400,720			(387,206	)		(16.1	)%
Nonperforming loans UPB subject to CECL	$	234,490		$	309,970			(75,480	)		(24.4	)%
Nonperforming loans UPB subject to CECL / Total UPB subject to CECL		11.6	%		12.9	%		(1.3	)%		(9.8	)%
Allowance for credit losses / Total UPB subject to CECL		0.22	%		0.17	%		0.05	%		29.1	%
Charge-offs / Total UPB subject to CECL		0.40	%⁽¹⁾		0.12	%⁽¹⁾		0.28	%		244.4	%

⁽¹⁾	Annualized

•

Charge-offs for 4Q25 totaled $2.0 million, compared to $0.7 million for 4Q24

•

The trailing five-quarter charge-offs average was $1.2 million

•

Credit loss reserve totaled $4.5 million as of December 31, 2025, an increase of 8.3% from $4.2 million as of December 31, 2024

•

Driven by higher provision for credit losses and charge-offs

•

CECL reserve rate of 0.22% (CECL reserve as % of HFI loans at amortized cost) was relatively consistent with the recent five-quarter average rate of 0.21%

Real Estate Owned


	Three Months Ended December 31,
	2025			2024			$ Variance			% Variance
	($ in thousands)
Gain (Loss) on REO:
Gain on transfer to REO	$	3,104		$	2,382		$	722			30.3	%
REO valuation loss, net		(6,990	)		(2,218	)		(4,772	)		(215.1	)%
Gain on sale of REO		203			3,411			(3,208	)		(94.0	)%

Total gain (loss) on REO	$	(3,683	)	$	3,575		$	(7,258	)		(203.0	)%

•

Total loss on REO was $3.7 million, compared to a gain of $3.6 million for 4Q24, driven by higher valuation loss and lower gain on sale

NPLs Resolution


	Three Months Ended December 31, 2025
Total Nonperforming Loans	UPB		Default Interest		Prepayment Penalty		Net Gain			Regular Accrued Interest		Servicing Advances Write-Offs			Total Recovered
	($ in thousands)
Resolved — loans paid off	$	41,191	$	1,157	$	706	$	1,863		$	3,781	$	(435	)	$	5,209
Resolved — loans paid current		36,926		463		—		463			1,990		(26	)		2,427

Total resolutions	$	78,117	$	1,620	$	706	$	2,326		$	5,771	$	(461	)	$	7,636

Recovery rate								103.0	%							109.8	%


	Three Months Ended December 31, 2024
Total Nonperforming Loans	UPB		Default Interest		Prepayment Penalty		Net Gain			Regular Accrued Interest		Servicing Advances Write-Offs			Total Recovered
	($ in thousands)
Resolved — loans paid off	$	41,936	$	1,085	$	896	$	1,981		$	4,951	$	(756	)	$	6,176
Resolved — loans paid current		27,364		172		12		184			1,112		(6	)		1,290

Total resolutions	$	69,300	$	1,257	$	908	$	2,165		$	6,063	$	(762	)	$	7,466

Recovery rate								103.1	%							110.8	%

•

NPLs resolution totaled $78.1 million in UPB compared to $69.3 million for 4Q24, and was below the recent five-quarter average of $80.1 million

•

Total NPLs recovered was 109.8% or $7.6 million of UPB resolved compared to 110.8% or $7.5 million for 4Q24. Total NPLs recovered was above the recent five-quarter average of 109.4% in UPB resolved

Full-Year 2025 Results

Key Performance Indicators²


	Twelve Months Ended December 31,
	2025			2024			Variance			% Variance
	($ in thousands, except per share amounts)
Income before income tax	$	146,240		$	96,391		$	49,849			51.7	%
Net income	$	105,054		$	68,419		$	36,635			53.5	%
Diluted earnings per share	$	2.75		$	1.91		$	0.84			44.0	%
Core income before income tax	$	154,595		$	102,499		$	52,096			50.8	%
Core net income	$	110,987		$	72,871		$	38,116			52.3	%
Core diluted earnings per share	$	2.91		$	2.03		$	0.88			43.2	%
Net interest margin — portfolio related		3.61	%		3.56	%		0.05	%		1.5	%
Net interest margin — total company		3.19	%		3.03	%		0.16	%		5.3	%
Operating expense ratio		27.6	%		27.5	%		0.1	%		0.5	%
Average common equity		599,586			474,942		$	124,644			26.2	%
Pre-tax return on average equity		24.4	%		20.3	%		4.1	%		20.2	%
Core pre-tax return on average equity		25.8	%		21.6	%		4.2	%		19.5	%

Condensed Results of Operations


	Twelve Months Ended December 31,
	2025			2024		$ Variance			% Variance
				(In thousands)
Net interest income	$	185,781		$	135,804	$	49,977			36.8	%
Provision for credit losses		5,805			1,173		4,632			394.9	%

Net interest income after provision		179,976			134,631		45,345			33.7	%
Other operating income		163,619			101,398		62,221			61.4	%

Net revenue		343,595			236,029		107,566			45.6	%
Operating expenses		197,355			139,638		57,717			41.3	%

Income before income taxes		146,240			96,391		49,849			51.7	%
Income tax expense		41,257			27,925		13,332			47.7	%

Net income		104,983			68,466		36,517			53.3	%
Net income (loss) attributable to noncontrolling interest		(71	)		47		(118	)		(251.1	)%

Net income attributable to Velocity Financial, Inc.	$	105,054		$	68,419	$	36,635			53.5	%

•

Net income of $105.1 million, an increase of 53.5% from $68.4 million for 2024. Diluted EPS of $2.75, an increase of $0.84 from $1.91 per share for 2024

•

Net interest income after provision for credit losses was $180.0 million, an increase of 33.7% from $134.6 million for 2024

•

Other operating income totaled $163.6 million, an increase of 61.4% from $101.4 million for 2024, mainly attributable to net unrealized FVO gains on loans and securitized debt of $86.4 million, compared to $58.4 million for 2024

²	Core income before income tax, core net income, core diluted EPS and core pre-tax return on average equity are non-GAAP measures. Please see “Non-GAAP Financial Measures” and “Non-GAAP Financial Measure Reconciliations to GAAP Measures” at the end of this press release.

•

Total operating expenses were $197.4 million, an increase of 41.3% from $139.6 million for 2024, driven by higher headcount, commissions and loan servicing expenses to support our growth and valuation adjustments on REOs

•

Core net incomeof $111.0 million, an increase of 52.3% from $72.9 million for 2024. Core diluted EPS of $2.91, an increase from $2.03 per share for 2024¹

•

Portfolio NIM of 3.61%, an increase of 5 bps from 3.56% for 2024

Loan Portfolio


	Twelve Months Ended December 31,
	2025		2024		$ Variance			% Variance
	($ in thousands)
Originations Including Unfunded Commitments:
Traditional commercial	$	1,371,975	$	836,763	$	535,212			64.0	%
Investor 1-4 rental		1,134,736		771,130		363,606			47.2	%
Short-term		159,103		209,707		(50,604	)		(24.1	)%
Government insured multifamily		71,749		23,554		48,195			204.6	%

Total	$	2,737,563	$	1,841,154	$	896,409			48.7	%

•

Loan production totaled $2.7 billion, including the unfunded portion of a construction loan originated by Century of $22.1 million, an increase of 48.7% from $1.8 billion for 2024

•

2025 loan production volume reached the highest annual volume in Velocity’s history

•

Driven by strategic growth of our origination platform and focus on providing financing solutions to underserved market segments

CECL Portfolio Credit Performance


	December 31,
	2025			2024			Variance			% Variance
	($ in thousands)
Allowance for Credit Losses:
Beginning balance	$	4,174		$	4,769		$	(595	)		(12.5	)%
Provision for credit losses		5,805			1,173			4,632			394.9	%
Charge-offs		(5,458	)		(1,768	)		(3,690	)		(208.7	)%

Ending balance	$	4,521		$	4,174		$	347			8.3	%

Total UPB subject to CECL	$	2,013,514		$	2,400,720		$	(387,206	)		(16.1	)%
Nonperforming loans UPB subject to CECL	$	234,490		$	309,970		$	(75,480	)		(24.4	)%
Nonperforming loans UPB subject to CECL / Total UPB subject to CECL		11.6	%		12.9	%		(1.3	)%		(9.8	)%
Allowance for credit losses / Total UPB subject to CECL		0.22	%		0.17	%		0.05	%		29.1	%
Charge-offs / Total UPB subject to CECL		0.27	%		0.07	%		0.20	%		268.1	%

•

Charge-offs for 2025 totaled $5.5 million, compared to $1.8 million for 2024, resulted mainly from two unusually large charge-offs taken during 2025

Real Estate Owned


	December 31,
	2025			2024			$ Variance			% Variance
	($ in thousands)
Gain (Loss) on REO:
Gain on transfer to REO	$	15,653		$	8,704		$	6,949			79.8	%
REO valuation loss, net		(17,520	)		(6,121	)		(11,399	)		(186.2	)%
Gain on sale of REO		1,445			4,275			(2,830	)		(66.2	)%

Total gain (loss) on REO	$	(422	)	$	6,858		$	(7,280	)		(106.2	)%

•

Net REO loss was $0.4 million, compared to a net gain of $6.9 million for 2024, driven mainly by higher valuation loss, largely offset by a gain from loans transferred to REO.

NPLs Resolution


	Twelve Months Ended December 31, 2025
Total Nonperforming Loans	UPB		Default Interest		Prepayment Penalty		Net Gain			Regular Accrued Interest		Servicing Advances Write-Offs			Total Recovered
	($ in thousands)
Resolved — loans paid off	$	151,900	$	4,991	$	2,669	$	7,660		$	13,631	$	(1,629	)	$	19,662
Resolved — loans paid current		179,646		1,706		13		1,719			8,776		(156	)		10,339

Total resolutions	$	331,546	$	6,697	$	2,682	$	9,379		$	22,407	$	(1,785	)	$	30,001

Recovery rate								102.8	%							109.0	%


	Twelve Months Ended December 31, 2024
Total Nonperforming Loans	UPB		Default Interest		Prepayment Penalty		Net Gain			Regular Accrued Interest		Servicing Advances Recoveries (Write-Offs)			Total Recovered
	($ in thousands)
Resolved — loans paid off	$	120,508	$	2,535	$	2,246	$	4,781		$	12,534	$	(1,526	)	$	15,789
Resolved — loans paid current		132,845		1,108		28		1,136			5,372		2			6,510

Total resolutions	$	253,353	$	3,643	$	2,274	$	5,917		$	17,906	$	(1,524	)	$	22,299

Recovery rate								102.3	%							108.8	%

•

NPLs resolution totaled $331.5 million and $253.4 million in UPB for the years ended December 31, 2025 and 2024, respectively

•

Total NPLs recovered was 109.0% of UPB resolved compared to 108.8% for 2024

Other

•

Completed nine securitizations totaling $2.6 billion in 2025

Velocity’s executive management team will host a conference call and webcast on March 11, 2026, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to review Velocity’s 4Q25 and full-year 2025 financial results.

Investors and Media:

Chris Oltmann

(818) 532-3708

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 following the completion of the conference call.

Conference Call Information

To participate by phone, please dial in 15 minutes prior to the start time to allow for wait time 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. earnings call.

A replay of the call will be available through midnight on March 27, 2026, and can be accessed by dialing 1-855-669-9658 in the U.S and Canada or 1-412-317-0088 internationally. The passcode for the replay is 4826570. 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 21 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, core income before income tax, core pre-tax return on average equity 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, costs incurred from activities that are not normal recurring operating expenses, 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. Non-GAAP core income before income tax is core net income before deducting income taxes. Non-GAAP core pre-tax return on average equity is core income before income tax divided by our average shareholders’ equity.

We have included non-GAAP core net income, non-GAAP core income before income tax, non-GAAP core pre-tax return on average equity 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, non-GAAP core income before income tax, non-GAAP core pre-tax return on average equity 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 Net Income, please refer to the section of this press release below titled “Non-GAAP Financial Measure Reconciliations to GAAP Measures” 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) changes in federal government fiscal and monetary policies, (2) general economic and real estate market conditions, including the risk of recession, (3) regulatory and/or legislative changes, (4) our customers’ continued interest in loans and doing business with us, (5) market conditions and investor interest in our future securitizations, and (6) geopolitical conflicts.

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 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.

Velocity Financial, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)


	December 31,
	2025		2024
ASSETS
Cash, cash equivalents, and restricted cash	$	249,237	$	70,830
Total loans, net		6,758,131		5,187,067
Accrued interest and receivables		202,477		160,088
Real estate owned, net		118,289		68,000
Other assets		53,379		41,423

Total assets	$	7,381,513	$	5,527,408

LIABILITIES
Accounts payable and accrued expenses	$	168,314	$	147,814
Secured financing, net		286,679		284,833
Securitized debt		5,942,326		4,226,464
Warehouse and repurchase facilities, net		308,506		348,082

Total liabilities		6,705,825		5,007,193
Commitments and contingencies
EQUITY
Stockholders’ equity		672,535		516,944
Noncontrolling interest in subsidiary		3,153		3,271

Total equity		675,688		520,215

Total liabilities and equity	$	7,381,513	$	5,527,408

Diluted book value per share	$	17.19	$	14.26
Diluted shares at period end		39,297		36,469

Velocity Financial, Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended
	December 31, 2025			September 30, 2025			December 31, 2024
Interest income	$	152,403		$	144,119		$	113,484
Interest expense - portfolio related		94,652			88,899			68,484

Net interest income - portfolio related		57,751			55,220			45,000
Interest expense - corporate debt		6,142			6,144			6,143

Net interest income		51,609			49,076			38,857
Provision for credit losses		1,954			381			22

Net interest income after provision for credit losses		49,655			48,695			38,835
Other operating income
Unrealized gain (loss) on fair value loans		21,129			30,982			(15,723	)
Unrealized gain (loss) on fair value securitized debt		800			(9,988	)		34,539
Origination fee income		6,644			9,723			7,245
Other income		24,676			6,360			6,269

Total other operating income		53,249			37,077			32,330
Operating expenses
Compensation and employee benefits		22,628			23,300			20,084
Loan servicing		9,448			7,748			6,748
Real estate owned, net		8,651			7,931			268
Other operating expenses		12,128			11,418			12,027

Total operating expenses		52,855			50,397			39,127

Income before income taxes		50,049			35,375			32,038
Income tax expense		15,296			9,963			11,233

Net income		34,753			25,412			20,805
Net income (loss) attributable to noncontrolling interest		(44	)		39			218

Net income attributable to Velocity Financial, Inc.		34,797			25,373			20,587
Less undistributed earnings attributable to unvested restricted stock awards		477			352			253

Net earnings attributable to common stockholders	$	34,320		$	25,021		$	20,334

Earnings per common share:
Basic	$	0.89		$	0.66		$	0.62
Diluted	$	0.89		$	0.65		$	0.57
Weighted average common shares outstanding:
Basic		38,378			38,073			32,771
Diluted		39,243			38,800			36,098

Velocity Financial, Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share amounts)

(Audited)


	Twelve Months Ended December 31,
	2025			2024		2023
Interest income	$	550,829		$	406,843	$	310,775
Interest expense - portfolio related		340,477			247,218		186,468

Net interest income - portfolio related		210,352			159,625		124,307
Interest expense - corporate debt		24,571			23,821		16,556

Net interest income		185,781			135,804		107,751
Provision for credit losses		5,805			1,173		1,915

Net interest income after provision for credit losses		179,976			134,631		105,836
Other operating income
Unrealized gain on fair value loans		116,853			55,857		47,850
Unrealized gain (loss) on fair value securitized debt		(30,454	)		2,581		(9,002	)
Origination fee income		33,982			24,007		12,450
Other income		43,238			18,953		14,612

Total other operating income		163,619			101,398		65,910
Operating expenses
Compensation and employee benefits		90,217			69,589		48,344
Loan servicing		33,409			22,388		17,631
Real estate owned, net		22,909			6,030		6,153
Other operating expenses		50,820			41,631		28,491

Total operating expenses		197,355			139,638		100,619

Income before income taxes		146,240			96,391		71,127
Income tax expense		41,257			27,925		18,834

Net income		104,983			68,466		52,293
Net income (loss) attributable to noncontrolling interest		(71	)		47		20

Net income attributable to Velocity Financial, Inc.		105,054			68,419		52,273
Less undistributed earnings attributable to unvested restricted stock awards		1,348			834		753

Net earnings attributable to common stockholders	$	103,706		$	67,585	$	51,520

Earnings per common share:
Basic	$	2.81		$	2.07	$	1.60
Diluted	$	2.75		$	1.91	$	1.52
Weighted average common shares outstanding:
Basic		36,850			32,653		32,206
Diluted		38,178			35,760		34,484

Velocity Financial, Inc.

Net Interest Margin - Portfolio Related and Total Company

($ in thousands)


	Three Months Ended December 31,
	2025							2024
	Average Balance		Interest Income / Expense		Average Yield / Rate ⁽¹⁾			Average Balance		Interest Income / Expense		Average Yield / Rate ⁽¹⁾
Loan Portfolio:
Loans held for sale	$	359						$	3,145
Loans held for investment		6,433,855							4,855,794

Total loans	$	6,434,214	$	152,403		9.47	%	$	4,858,939	$	113,484		9.34	%

Debt:
Warehouse facilities	$	353,540	$	6,939		7.85	%	$	341,596	$	7,179		8.41	%
Securitized debt		5,726,298		87,713		6.13	%		4,117,512		61,305		5.96	%

Total debt - portfolio related		6,079,838		94,652		6.23	%		4,459,108		68,484		6.14	%
Corporate debt		290,000		6,142		8.47	%		290,000		6,143		8.47	%

Total debt	$	6,369,838	$	100,794		6.33	%	$	4,749,108	$	74,627		6.29	%

Net interest spread - portfolio related⁽²⁾						3.25	%						3.20	%
Net interest margin - portfolio related						3.59	%						3.70	%
Net interest spread - total company⁽³⁾						3.15	%						3.06	%
Net interest margin - total company						3.21	%						3.20	%

⁽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

Velocity Financial, Inc.

Net Interest Margin - Portfolio Related and Total Company

($ in thousands)


	Twelve Months Ended December 31,
	2025							2024
	Average Balance		Interest Income / Expense		Average Yield / Rate			Average Balance		Interest Income / Expense		Average Yield / Rate
Loan Portfolio:
Loans held for sale	$	3,549						$	6,488
Loans held for investment		5,824,811							4,481,813

Total loans	$	5,828,360	$	550,829		9.45	%	$	4,488,301	$	406,843		9.06	%

Debt:
Warehouse facilities	$	401,320	$	31,976		7.97	%	$	295,936	$	26,790		9.05	%
Securitized debt		5,053,930		308,501		6.10	%		3,780,660		220,428		5.83	%

Total debt - portfolio related		5,455,250		340,477		6.24	%		4,076,596		247,218		6.06	%
Corporate debt		290,000		24,571		8.47	%		282,888		23,821		8.42	%

Total debt	$	5,745,250	$	365,048		6.35	%	$	4,359,484	$	271,039		6.22	%

Net interest spread - portfolio related⁽¹⁾						3.21	%						3.00	%
Net interest margin - portfolio related						3.61	%						3.56	%
Net interest spread - total company⁽²⁾						3.10	%						2.85	%
Net interest margin - total company						3.19	%						3.03	%

⁽¹⁾	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

⁽²⁾	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

Velocity Financial, Inc.

Non-GAAP Financial Measure Reconciliations to GAAP Measures

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2025			2024			2025			2024
Income before income tax	$	50,049		$	32,038		$	146,240		$	96,391
Equity award & ESPP expenses		2,131			1,644			8,284			6,155
Net income (loss) attributable to noncontrolling interest		(44	)		218			(71	)		47

Core income before income tax	$	52,224		$	33,464		$	154,595		$	102,499

Average common equity		651,352			498,887			599,586			474,942
Pre-tax return on average equity		30.7	%⁽¹⁾		25.7	%⁽¹⁾		24.4	%		20.3	%
Tax effect of equity award & ESPP expenses		1.3	%⁽¹⁾		1.3	%⁽¹⁾		1.4	%		1.3	%
Tax effect of net income (loss) attributable to noncontrolling interest		(0.0	)%⁽¹⁾		0.2	%⁽¹⁾		(0.0	)%		0.0	%

Core pre-tax return on average equity		32.1	%		26.8	%		25.8	%		21.6	%

⁽¹⁾	Annualized


	Three Months Ended December 31,				Twelve Months Ended December 31,
	2025		2024		2025		2024
Net income	$	34,797	$	20,587	$	105,054	$	68,419
Equity award & ESPP expenses		1,530		1,167		5,933		4,452

Core net income	$	36,327	$	21,754	$	110,987	$	72,871

Diluted weighted average common shares outstanding		39,243		36,097		38,178		35,760
Core diluted earnings per share	$	0.93	$	0.60	$	2.91	$	2.03