Velocity Financial, Inc. · NYSE:VEL
Velocity Financial — Q3 2026 Earnings Presentation
30 slides from Velocity Financial's earnings presentation, Nov 4, 2026
Slide 1: 3Q26 Results
3Q26 Results November 4, 2026
Slide 2: Forward-looking statements
DISCLOSURE Forward-looking statements Some of the statements contained in this presentation The forward-looking statements contained in this Factors that could cause our results to differ materially may constitute forward-looking statements within the presentation reflect our current views about fut
Slide 3: 3Q26 Financial Highlights
EARNINGS 3Q26 Financial Highlights MEASURE ($ in thousands) 3Q25 2Q26 3Q26 CHANGE VS 3Q25 Net income $25,373 $25,163 $26,418 4.1% Diluted EPS $0.65 $0.64 $0.67 3.1% Pre-tax return on average equity 22.7% 20.0% 20.5% 9.9% Core net income 1 $26,937 $27,853 $30,043 11.5% Core diluted EPS 1 $0.69 $0.71
Slide 4: Third Quarter 2026 Results
THIRD QUARTER 2026 Results Strong earnings and record production from a unique market segment and lending model CORE EPS 1 PORTFOLIO NIM 2 FINANCING 2nd highest 3.8% $516.0 Million quarterly core EPS result in the NIM2 remained well above 3.5% of securities issued from the completion of Company’s hi
Slide 5: Production & Loan Portfolio
PRODUCTION & LOAN PORTFOLIO Production & Loan Portfolio MEASURE ($ in millions) 3Q25 2Q26 3Q26 CHANGE VS 3Q25 HFI loan portfolio (UPB) $6,273.3 $6,985.9 $7,428.0 18.4% Loan Production $739.0 $672.6 $911.3 23.3% Nonperforming loans (NPL) as a % of HFI loans 1 9.8% 9.6% 10.1% 30 bps NPL realized gains
Slide 6: 3Q26 Originations Reach Record Levels
LOAN PRODUCTION 3Q26 Originations Reach Record Levels Loan Production Volume1 · $ in millions $911.3 Strong growth of 23.3% Y/Y and 35.5% Q/Q $739.0 ➢ Traditional Commercial volume totaled $672.6 $422.5 million in UPB, an increase of 12.8% $634.6 $639.4 from 3Q25 and 25.1% from 2Q26 ➢ Investor 1-4 v
Slide 7: Total Loan Portfolio UPB
LOAN PORTFOLIO TOTAL LOAN PORTFOLIO · UPB +30.3% five-year compounded annual growth Diversified portfolio across multiple property types UPB in millions 7,457.7 6,985.9 6,275.4 Investor 1-4 Rental · Mixed Use · Multifamily · Retail · Warehouse · Office · All Other Velocity’s total loan portfolio was
Slide 8: Portfolio Yield, Cost of Funds and NIM
NET INTEREST MARGIN Portfolio Yield, Cost of Funds and NIM1 9.54% 9.29% 9.41% P O R TF O L IO N IM · 3Q 2 6 3.78% 6.27% 6.09% 6.04% up 13 bps from 3.65% for 3Q25 3.65% 3.66% 3.78% −13 bps Portfolio Yield: Decreased 13 bps from 3Q25. Y/Y decrease primarily driven by lower NPL-related interest income
Slide 9: Resolved NPLs Result In Net Gains
NONPERFORMING LOANS Resolved NPLs Result In Net Gains Nonperforming loan UPB1 · $ in millions $756.5 $756.5 1 NONPERFORMING LOANS $673.3 $2.7 million $614.2 10.1% 9.6% 9.8% ➢ of resolution gains over and above the receipt $614.2 of all past due contractual interest on NPLs for 3Q26, or 103.0% of tot
Slide 10: 3Q26 NPL Resolutions and Recoveries Remained Strong
RESOLUTION ACTIVITIES 3Q26 NPL Resolutions and Recoveries Remained Strong $ in thousands T OT A L NPL R ES OLU T I ON G A I NS NET ACCRUED INTEREST 1 TOTAL RECOVERED $2,690 $4,737 $7,427 3Q26 realized gains of $2.6 million on + Contractual accrued interest recovered = Total recovered revenue of $7.4
Slide 11: Gain (Loss) on New & Existing REO
REAL ESTATE OWNED (REO) ACTIVITY Gain (Loss) on New & Existing REO REO PORTFOLI O BALANCE · $ IN MILLIONS $ IN THOUSAN DS 9/30/2025 9/30/2026 $ VAR % VAR $154.6 GAIN ON NEW REO $113.7 Gain on transfer to REO — amortized 2,583 1,140 (1,443) (55.9)% 2.0% cost loans 1.7% Valuation gain on transfer to R
Slide 12: Modest CECL Reserve Increase as Amortized Cost Portfolio Pays Down
CREDIT LOSS RESERVE Modest CECL Reserve Increase as Amortized Cost Portfolio Pays Down $ IN THOUS AN DS 9/30/2025 9/30/2026 VAR % VAR CECL RESERVE BALANCE Beginning balance 4,882 5,102 220 4.5% $5.3M compared to $4.6 million as of Provision for credit losses 381 531 150 39.4% September 30, 2025 Char
Slide 13: Two Securitizations Issued in 3Q26 and One in October
LIQUIDITY Two Securitizations Issued in 3Q26 and One in October VCC 2026 -3 & VCC 2026 -P2 VCC 2026 -4 $516.0 million $465.7 million weighted average rate of 6.18% for the VCC 2026-3 and 6.49% Subsequent to quarter end, issued the VCC 2026-4 for the VCC 2026-P2 securitization with a weighted average
Slide 14: Outstanding Debt Balances
FINANCING AND CAPITAL 1 Outstanding Debt Balances $ in millions $7,051.9 $7,306.3 $6,537.5 $6,722.0 $6,150.6 Securitizations Warehouse Lines Corporate Debt 9/30/2025 12/31/2025 3/31/2026 6/30/2026 9/30/2026 Debt / Equity 9.6X 9.7X 9.7X 9.7X 9.6X 2 Recourse Debt / Equity 1.0X 1.0X 1.0X 1.2X 1.5X Secu
Slide 15: Toorak Acquisition Remains On Track to Close in Q4 2026
TOORAK CAPITAL ACQUISITION · TRANSACTION UPDATE Toorak Acquisition Remains On Track to Close in Q4 2026 Adding a leading short-term business-purpose lender to complement our core investor loan activities PU R C H A S E PR I C E 1 T OOR A K BPL POR T F O LI O T OT A L A U M ( U PB) A F T ER C LOS E 2
Slide 16: Toorak Increases Production and Diversifies Mix
TOORAK CAPITAL ACQUISITION · STRATEGIC RATIONALE Toorak Increases Production and Diversifies Mix F Y 2 02 5 PR OD U C T I ON PR OF I LE 1 F I V E S T R A T EG I C PI LLA R S FY 2025 Velocity Toorak Combined 01 Scale ~$2.7bn to ~$4.8bn+ production; operating leverage Production volume $2.7bn $2.1bn $
Slide 17: Small Balance Investor Loan Market to Remain Resilient
OUTLOOK FOR VELOCITY’S KEY BUSINESS DRIVERS Small Balance Investor Loan Market to Remain Resilient MARKET CREDIT CAPITAL EARNINGS Next long-term loan ~3.5% Market demand for NPL resolution trends securitization targeted small balance investor (UPB volume & gains) for November 2026 properties to rema
Slide 18: Appendix
Appendix Velocity Financial, Inc. - 3Q26 Results Presentation 18
Slide 19: Total Loan Portfolio UPB Rollforward
LOAN PORTFOLIO Total Loan Portfolio UPB Rollforward UPB in millions · waterfall; each movement bridges the running balance, vertical scale truncated $911.3 $7,457.7 $6,985.9 $(283.9) $(125.2) $(30.3) Loan Portfolio Principal CHHC Loan Sales1 Transfer Loan Loan Portfolio at 6/30/26 Payments to REO Pr
Slide 20: HFI Loan Portfolio
HFI LOAN PORTFOLIO HFI Loan Portfolio 100% = $7.43 billion UPB as of September 30, 2026 PORTFOLIO BY PROPERTY TYPE PORTFOLIO BY STATE Investor 1-4 Rental 44.9% Retail 11.7% Mixed use 10.8% $7.43B Office 9.9% UPB Warehouse 7.3% Multifamily 7.0% Other 8.4% RESIDENTIAL PROPERTY TYPES COMMERCIAL PROPERT
Slide 21: Loan Portfolio Metrics
APPENDIX Loan Portfolio Metrics LOAN PORTFOLIO 3Q25 2Q26 3Q26 Loan to Value 65.5% 64.6% 64.5% Loan Count 15,978 18,219 19,481 WAC 1 9.7% 9.7% 9.8% Average Loan Balance 2 $392.8 $383.4 $382.8 FVO% 66.3% 74.1% 76.5% (1) Weighted Average Coupon on the total loan portfolio. (2) $ in thousands. Velocity
Slide 22: HFI Production Metrics
LOAN PRODUCTION HFI Production Metrics Change since Change since HFI PRODUCTION METRICS 3Q25 4Q25 1Q26 2Q26 3Q26 2Q26 3Q25 1 HFI Production Investor 1-4 Rental $302.3 $281.1 $232.6 $232.3 $318.3 37.0% 5.3% Traditional Commercial 374.6 322.1 381.3 337.6 422.5 25.1% 12.8% Short-term 36.1 29.6 23.3 16.
Slide 23: Book Value and Adjusted Book Value Per Share
BOOK VALUE PER SHARE Book Value and Adjusted Book Value Per Share 2 Book value per share · pillars scaled, vertical scale truncated at $15.00 $21.43 $19.23 $18.43 Diluted book value Diluted book value Adjusted book value 3 4 5 at 6/30/26 at 9/30/26 at 9/30/26 $18.43 $(0.09) $0.13 +$0.76 $19.23 +$2.2
Slide 24: Reinvested Earnings and Core Return on Average Equity
REINVESTED EARNINGS COMPOUNDS RETURNS Reinvested Earnings and Core Return on Average Equity 1 Core Diluted Earnings Per Share Average Stockholders’ Equity Core Return on Average Stockholders’ Equity Stockholders’ Equity 2 $696.6 $599.6 18.5% $3.07 17.3% $2.91 15.3% $474.9 $2.03 12/31/2024 12/31/2025
Slide 25: Velocity Financial, Inc. Balance Sheet
APPENDIX Velocity Financial, Inc. Balance Sheet ASSETS 9/30/2026 6/30/2026 12/31/2025 LIABILITIES AND EQUITY 9/30/2026 6/30/2026 12/31/2025 Cash and cash equivalents $ 86,754 $ 76,115 $ 92,103 Accounts payable and accrued expenses $ 185,555 $ 186,020 $ 168,314 Restricted cash 22,530 169,088 157,134
Slide 26: Velocity Financial, Inc. Income Statements
APPENDIX Velocity Financial, Inc. Income Statements $ in thousands. Quarters ended, unaudited. REVENUES 9/30/2026 6/30/2026 9/30/2025 OPERATING EXPENSES 9/30/2026 6/30/2026 9/30/2025 Interest income $ 169,461 $ 160,986 $ 144,119 Compensation and employee benefits 29,164 25,514 23,300 Interest expens
Slide 27: HFI Portfolio Delinquency Trends
APPENDIX HFI Portfolio Delinquency Trends $ IN THOUSANDS SEPTEMBER 30, 2026 JUNE 30, 2026 MARCH 31, 2026 DECEMBER 31, 2025 SEPTEMBER 30, 2025 $ % $ % $ % $ % $ % PERFORMING / ACCRUING Current 6,125,379 82.6% 5,772,386 82.6% 5,648,159 82.6% 5,432,204 83.7% 5,202,058 82.9% 30–59 days past due 372,407
Slide 28: Resolution Activities
APPENDIX Resolution Activities THIRD QUARTER 2026 THIRD QUARTER 2025 RESOLUTION ACTIVITY UPB $ GAINS NET TOTAL RESOLUTION ACTIVITY UPB $ GAINS NET TOTAL ACCRUED RECOVERED ACCRUED RECOVERED INTEREST 1 INTEREST 1 LONG-TERM NONPERFORMING LONG-TERM NONPERFORMING LOANS LOANS Paid in full $ 31,155 $ 2,013
Slide 29: Adjusted Financial Metric Reconciliation to GAAP Net Income
APPENDIX Adjusted Financial Metric Reconciliation to GAAP Net Income 1 CORE PRETAX INCOME CORE NET INCOME $ in thousands, except per share amounts. QUARTER ENDED 9/30/2026 6/30/2026 9/30/2025 QUARTER ENDED 9/30/2026 6/30/2026 9/30/2025 Income before income taxes $ 38,280 $ 35,235 $ 35,375 Net income
Slide 30: 3Q26 Results
3Q26 Results November 4, 2026