Velocity Financial, Inc. · NYSE:VEL
Velocity Financial — Q1 2026 Earnings Presentation
21 slides from Velocity Financial's earnings presentation, May 6, 2026
Slide 1: 1Q26 Results Presentation
1Q26 Results Presentation May 6, 2026
Slide 2: Forward-looking statements
Forward-looking statements Some of the statements contained in this presentation may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, projections, plans and strategies, positioning, anticipated events or trend
Slide 3: 1Q26 Highlights
1Q26 Highlights ▪ Net income of $22.4 million, up 18.4% from $18.9 million for 1Q25. Diluted EPS of $0.57, an increase of $0.06 from $0.51 per share for 1Q25. ▪ Core net income(1) of $26.5 million, an increase of 30.8% from $20.3 million for 1Q25. Earnings Core diluted EPS(1) of $0.68, an increase o
Slide 4: Loan Production
Loan Production 1Q26 Originations In-line With Q/Q and Y/Y Levels ▪ Total loan production in 1Q26 totaled $639.4 million, consistent with the $640.4 million for 1Q25 – Y/Y unit growth of 11.2% as average loan size decreased to $378.8 thousand for 1Q26 from $420.1 thousand for 1Q25 ▪ The WAC(1) on 1Q
Slide 5: Loan Portfolio
Loan Portfolio Portfolio Growth Strong Across Property Types Loan Portfolio by Property Type ▪ The total loan portfolio was $6.8 billion in (UPB in millions) $6,837 UPB as of March 31, 2026, an increase of $6,491 $565.9 25.4% from $5.4 billion as of $506.4 $606.9 March 31, 2025 $5,445 $542.6 $330.9
Slide 6: Net Interest Margin
Net Interest Margin 1Q26 NIM Consistency Results From Rate Discipline on New Production ▪ Portfolio NIM(1) for 1Q26 was 3.56%, an increase of 21 bps from 3.35% for 1Q25 ▪ Portfolio Yield: Increased 12 bps from 1Q25. Y/Y growth primarily resulted from continued rate discipline on new production drivi
Slide 7: HFI Portfolio Performance
HFI Portfolio Performance NPLs as % of HFI Loans Below Prior Year Level ▪ Total nonperforming loans (NPL) as a percentage of total HFI loans UPB was 10.1% as of March 31, 2026, a decrease from 10.8% as of March 31, 2025 ▪ Total NPL allowance was $57.1 million as of March 31, 2026, compared to $55.9
Slide 8: CECL Reserve, Charge-Offs and REO
CECL Reserve, Charge-Offs and REO CECL Reserve Lower As Loans Subject to CECL Decrease 16% Y/Y Credit Loss Reserve & Gain (Loss) on REO ▪ The credit loss (CECL) reserve Quarter Ended balance was $4.9 million as of ($ in thousands) 3/31/2025 3/31/2026 $ Variance % Variance March 31, 2026, a modest de
Slide 9: Real Estate Owned (REO) Activity
Real Estate Owned (REO) Activity REO Portfolio Activity Delivers Net Gains for 1Q26 ▪ The REO portfolio totaled $131.8 million as of March 31, 2026, compared to $83.4 million as of March 31, 2025 – Comprised 1.9% of HFI loans as of March 31, 2026, compared to 1.5% as of March 31, 2025 ▪ Total gains
Slide 10: Non-Performing Loan Resolution Activity
Non-Performing Loan Resolution Activity NPL Resolutions and Recoveries Consistent With Prior Year Levels NPL Resolution Activity LONG-TERM NONPERFORMING LOANS $ in thousands FIRST QUARTER 2025 FIRST QUARTER 2026 RESOLUTION ACTIVITY Net Gain Total $ Recovered Net Gain Total $ Recovered Net Accrued To
Slide 11: Durable Funding and Liquidity Framework
Durable Funding and Liquidity Framework Two Securitizations in 1Q26(1); Unsecured Debt Issuance Optimizes Capital Structure for Growth Outstanding Debt Balances(2) ▪ Completed the VCC 2026-1 and ($ in Millions) $6,722.0 VCC 2026- P1 securitizations totaling $513.8 $6,537.5 $6,150.6 $286.7 $558.7 mil
Slide 12: Outlook for Velocity’s Key Business Drivers
Outlook for Velocity’s Key Business Drivers Real Estate Values Expected to Remain Supportive of Growth MARKET CREDIT CAPITAL EARNINGS ▪ Market for small ▪ NPA levels to remain ▪ Next long-term loan ▪ NIM target remains balance investor at manageable securitization ~ 3.5% properties remains levels wi
Slide 13: Appendix
Appendix
Slide 14: Velocity Financial, Inc. Balance Sheet
Velocity Financial, Inc. Balance Sheet Quarter Ended 3/31/2026 12/31/2025 Unaudited Audited (In thousands) Assets Cash and cash equivalents $ 87,054 $ 92,103 Restricted cash 24,996 157,134 Loans held for sale, net Loans held for sale, at fair value - FV Loans HFI, UPB Valuations on Fair Value Loans
Slide 15: Velocity Financial, Inc. Income Statements
Velocity Financial, Inc. Income Statements Quarter Ended ($ in thousands) 3/31/2026 12/31/2025 3/31/2025 Unaudited Unaudited Unaudited Revenues Interest income $ 153,080 $ 152,403 $ 118,740 Interest expense - portfolio related 94,027 94,652 75,088 Net interest income - portfolio related 59,053 57,75
Slide 16: Core Net Income, Diluted Book Value & Adjusted Book Value Per Share
Core Net Income, Diluted Book Value & Adjusted Book Value Per Share Core Net Income(1) Book Value and Adjusted Book Value Per Share(2) ($ in thousands) $20.26 $ 2.50 GAAP Net Income $22,363 $ 0.68 $ 17.75 $17.19 $(0.11) $(0.03) Non-core items $4,119 Core Net Income $26,482 Diluted book Non-Core Non-
Slide 17: Reinvested Earnings Compounds Returns
Reinvested Earnings Compounds Returns Core Diluted Earnings Per Share ▪ Our proprietary operating platform CAGR = and expertise delivers strong 31.8%(1) results and durable long-term $2.91 $2.86 growth for our shareholders $2.03 ▪ Earnings growth re-invested at high marginal ROE compounds book value
Slide 18: HFI Portfolio Delinquency Trends
HFI Portfolio Delinquency Trends March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 March 31, 2026 ($ in thousands) $ % $ % $ % $ % $ % Performing/Accruing: Current $ 4,504,854 82.7% $ 4,878,317 83.3% $ 5,202,057 82.9% $ 5,432,204 83.7% $ 5,648,159 82.6% 30-59 days past due 239,547 4.
Slide 19: Loan Portfolio Rollforward
Loan Portfolio Rollforward Total Loan Portfolio UPB Rollforward (UPB in millions) $639.4 $6,836.5 $6,491.3 $(257.2) $(2.2) $(34.7) Loan Portfolio at Principal Payments Loan Sales Transfer to REO Loan Production Loan Portfolio at 12/31/25 3/31/26 Confidential 19
Slide 20: HFI Loan Portfolio
HFI Loan Portfolio Portfolio by Property Type Portfolio by State (100% = $6.84 billion UPB)(1) Mixed Use 10.8% Retail California 10.8% 19.6% Multifamily Other 41.2% New York Investor 1-4 7.1% 13.6% Rental 46.9% Warehouse 7.2% Florida Office 11.7% Other 8.9% Texas 8.3% 6.3% New Jersey 7.6% Confidenti
Slide 21: Adjusted Financial Metric Reconciliation
Adjusted Financial Metric Reconciliation: Adjusted Financial Metric Reconciliation to GAAP Net Income Core Pretax Income ($ in thousands) Quarter Ended 3/31/2026 12/31/2025 3/31/2025 Income before income taxes $ 30,877 $ 50,049 $ 26,894 Equity awards & ESPP expenses 2,695 2,131 1,970 Potential M&A d