Velocity Financial, Inc. · NYSE:VEL
Velocity Financial — Q2 2025 Earnings Presentation
20 slides from Velocity Financial's earnings presentation, Aug 7, 2025
Slide 1: 2Q25 Results Presentation
2Q25 Results Presentation August 7, 2025
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: 2Q25 Highlights
2Q25 Highlights ▪ Net income of $26.0 million, up 75.9% from $14.8 million for 2Q24. Diluted EPS of $0.69, up $0.27 from $0.42 per share for 2Q24. ▪ Core net income(1) of $27.5 million, an increase of 72.6% from $15.9 million for 2Q24. Earnings Core diluted EPS(1) of $0.73, up from $0.45 per share f
Slide 4: Unique Strategy Generates Meaningful Outperformance
Unique Strategy Generates Meaningful Outperformance Core Diluted Earnings Per Share ▪ Our proprietary operating platform CAGR = and expertise delivers strong 33.0% (1) results and durable long-term $2.36 growth for our shareholders $2.03 $1.54 ▪ Track record of execution and ability to successfully
Slide 5: Core Net Income, Diluted Book Value and Adjusted Book Value Per Share
Core Net Income, Diluted Book Value and Adjusted Book Value Per Share Core Net Income(1) Book Value and Adjusted Book Value Per Share(2) ($ in thousands) $ 1.99 $17.60 GAAP Net Income $25,997 $14.87 $ 0.73 $ 0.06 $ 15.62 $(0.04) Equity award & ESPP costs $1,473 Core Net Income $27,470 Diluted book N
Slide 6: Loan Production
Loan Production 2Q25 Production Reaches New Record ▪ Loan production in 2Q25 totaled $725.4 million in UPB, a 13.3% increase from $640.4 million for 1Q25 and a 71.8% increase from $422.2 million for 2Q24 – Y/Y volume growth driven by a 93.1% increase in Traditional Commercial loans and 53.4% Y/Y inc
Slide 7: Loan Portfolio
Loan Portfolio Portfolio Set to Reach $6 Billion, Driven by Strong Loan Originations Loan Portfolio by Property Type ▪ The total loan portfolio was $5.9 billion in UPB as (UPB in millions) $5,859.7 of June 30, 2025, an increase of 7.5% from $5,445.0 $432.1 $5.4 billion as of March 31, 2025, and 30.8
Slide 8: Net Interest Margin
Net Interest Margin Significant Increase in NIM ▪ Portfolio NIM(1) for 2Q25 was 3.82%, an increase of 47 bps from 3.35% for 1Q25 and 28 bps from 3.54% for 2Q24 ▪ Portfolio Yield: increased 54 bps from 1Q25 and 67 bps from 2Q24. Q/Q, change driven by increased NPA resolutions; Y/Y growth primarily re
Slide 9: HFI Portfolio Performance
HFI Portfolio Performance NPLs as % of HFI Loans Reach Lowest Level in Five Qtrs.; 2Q25 Resolution Gains Increased ▪ Total nonperforming loans (NPL) as a percentage of total HFI loans was 10.3% as of June 30, 2025, a decrease from 10.8% as of March 31, 2025, and 10.5% as of June 30, 2024 ▪ Gains on
Slide 10: Non-Performing Asset Resolution Activity
Non-Performing Asset Resolution Activity NPA Volume and Gains Rise for 2Q25 Resolution Activity RESOLUTION ACTIVITIES ▪ NPA resolutions totaled $104.0 LONG-TERM NONPERFORMING ASSETS RESOLUTION ACTIVITY SECOND QUARTER 2024 FIRST QUARTER 2025 SECOND QUARTER 2025 million in UPB, realizing 103.5% Gain /
Slide 11: CECL Reserve, Charge-Offs and REO
CECL Reserve, Charge-Offs and REO CECL Reserve Decreased Slightly; Transfer Gains Drive Improved REO Results Loan Loss Reserve & Gain (Loss) on REO ▪ The reserve balance was $4.9 million as of June 30, 2025, a decrease from $5.2 Quarter Ended million as of June 30, 2024 ($ in thousands) 6/30/2025 6/
Slide 12: Durable Funding and Liquidity Strategy
Durable Funding and Liquidity Strategy Four Securitization in 2Q25(1); Securitizations Reflect Strong Investor Support Outstanding Debt Balances(2) ▪ Completed four securitizations in 2Q25: ($ in Millions) $5,709.3 – Issued the VCC 2025-2 & 2025-3 $5,250.8 $285.8 securitizations totaling $760.0 mill
Slide 13: Outlook for Velocity’s Key Business Drivers
Outlook for Velocity’s Key Business Drivers Investor Loan Market Outlook Remains Positive MARKET CREDIT CAPITAL EARNINGS ▪ Large addressable ▪ U.S. economic ▪ Next long-term loan ▪ Targeting stable NIM market for continued outlook remains securitization and strong interest organic growth mixed; rece
Slide 14: Appendix
Appendix
Slide 15: Velocity Financial, Inc. Balance Sheet
Velocity Financial, Inc. Balance Sheet Quarter Ended 6/30/2025 12/31/2024 Unaudited Audited (In thousands) Assets Cash and cash equivalents $ 79,559 $ 49,901 Restricted cash 17,630 20,929 Loans held for sale, at fair value - - Loans held for investment, at fair value 3,826,505 2,766,951 Loans held f
Slide 16: Velocity Financial, Inc. Income Statement
Velocity Financial, Inc. Income Statement (Quarters) Quarter Ended ($ in thousands) 6/30/2025 3/31/2025 6/30/2024 Unaudited Unaudited Unaudited Revenues Interest income $ 135,567 $ 118,740 $ 97,760 Interest expense - portfolio related 81,838 75,088 59,188 Net interest income - portfolio related 53,7
Slide 17: HFI Portfolio Delinquency Trends
HFI Portfolio Delinquency Trends June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025 June 30, 2025 ($ in thousands) $ % $ % $ % $ % $ % Performing/Accruing: Current $ 3,669,659 81.9% $ 3,921,488 82.8% $ 4,169,830 82.5% $ 4,504,854 82.7% $ 4,878,317 83.3% 30-59 days past due 247,100 5.5
Slide 18: Loan Portfolio Rollforward
Loan Portfolio Rollforward Total Loan Portfolio UPB Rollforward (UPB in millions) $725.4 $5,859.7 $5,449.9 $(248.8) $(45.8) $(21.1) Loan Porfolio at Principal Loan Sales Foreclosures Loan Production Loan Porfolio at 3/31/25 Payments 6/30/25 . Confidential 18
Slide 19: HFI Loan Portfolio
HFI Loan Portfolio Portfolio by Property Type Portfolio by State (100% = $5.86 billion UPB)(1) Mixed Use 10.8% California 20.9% Retail Investor 1-4 9.7% Other Rental 38.7% 50.4% Multifamily New York 7.2% 14.3% Warehouse 6.7% Office Florida 7.8% 12.6% Other 7.4% Texas 5.8% New Jersey 7.7% Confidentia
Slide 20: Adjusted Financial Metric Reconciliation
Adjusted Financial Metric Reconciliation: Adjusted Financial Metric Reconciliation to GAAP Net Income Quarters: Core Net Income Quarter Ended ($ in thousands) 6/30/2025 3/31/2025 6/30/2024 Net Income $ 25,997 $ 18,887 $ 14,778 Equity award & ESPP costs 1,473 1,366 1,140 Core Net Income $ 27,470 $ 20