Velocity Financial, Inc. · NYSE:VEL
Velocity Financial — Q2 2026 Earnings Presentation
21 slides from Velocity Financial's earnings presentation, Aug 5, 2026
Slide 1: 2Q26 Results Presentation
2Q26 Results Presentation August 5, 2026
Slide 2: Forward-looking statements
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
Slide 3: 2Q26 Highlights
2Q26 Highlights ▪ Net income of $25.2 million, a 3.2% decrease from $26.0 million for 2Q25. Diluted EPS of $0.64, a decrease of $0.05 from $0.69 per share for 2Q25. ▪ Core net income(1) of $27.9 million, an increase of 1.4% from $27.5 million for 2Q25. Core Earnings diluted EPS(1) of $0.71, a decrea
Slide 4: Loan Production
Loan Production 2Q26 Originations Rise Q/Q On Strong Government Insured Volume ▪ Loan production in 2Q26 totaled $672.6 million in UPB, up 5.2% from 1Q26 and down 7.3% from $725.4 million for 2Q25 – Loan units produced were flat Q/Q and grew 3.2% Y/Y. Average loan size decreased to $348.6 thousand f
Slide 5: Loan Portfolio
Loan Portfolio Portfolio Reached $7 Billion Driven By Traditional Commercial Properties Loan Portfolio by Property Type ▪ The total loan portfolio was $7.0 billion in (UPB in millions) UPB as of June 30, 2026, an increase of $6,836.5 $6,985.9 19.2% from $5.9 billion as of $565.9 $560.0 June 30, 2025
Slide 6: Net Interest Margin
Net Interest Margin NIM Remains Above 3.5% Target ▪ Portfolio NIM(1) for 2Q26 was 3.66%, a decrease of 16 bps from 3.82% for 2Q25 ▪ Portfolio Yield: Decreased 36 bps from 2Q25. Y/Y decrease primarily from higher receipt of nonperforming loan interest in 2Q25 ▪ Portfolio Cost of Funds: Decreased 15 b
Slide 7: HFI Portfolio Performance
HFI Portfolio Performance NPLs as % of HFI Loans Decrease; NPL Allowance Reflects Increased Market Value ▪ Total nonperforming loans (NPL) as a percentage of total HFI loans UPB was 9.6% as of June 30, 2026, a decrease from 10.3% as of June 30, 2025 – Driven by the sale of nonperforming loans into V
Slide 8: CECL Reserve, Charge-Offs and REO
CECL Reserve, Charge-Offs and REO CECL Reserve Increased From Modestly Higher Nonaccruals Credit Loss Reserve & Gain (Loss) on REO ▪ The amortized cost loan credit loss Quarter Ended (CECL) reserve balance was $5.1 ($ in thousands) 6/30/2025 6/30/2026 $ Variance % Variance million as of June 30, 202
Slide 9: Real Estate Owned (REO) Activity
Real Estate Owned (REO) Activity REO Portfolio Realizes Net Gains ▪ The REO portfolio totaled $142.1 million as of June 30, 2026, compared to $93.4 million as of June 30, 2025 – Comprised 2.0% of HFI loans as of June 30, 2026, compared to 1.6% as of June 30, 2025 ▪ Total gain on new REO for 2Q26 was
Slide 10: Non-Performing Loan Resolution Activity
Non-Performing Loan Resolution Activity 2Q26 NPL Resolutions and Recoveries Remained Strong NPL Resolution Activity RESOLUTION ACTIVITIES LONG-TERM NONPERFORMING LOANS $ in thousands SECOND QUARTER 2025 SECOND QUARTER 2026 RESOLUTION ACTIVITY Net Gain Total $ Recovered Net Gain Total $ Recovered Net
Slide 11: Durable Funding and Liquidity Framework
Durable Funding and Liquidity Framework Two Securitizations in 2Q26(1) Outstanding Debt Balances(2) ▪ Completed the VCC 2026-2 totaling $398.5 ($ in Millions) $7,051.9 million of securities issued and weighted $6,537.5 $6,722.0 $559.6 $6,150.6 $558.7 average rate of 5.85% $5,709.3 $286.7 $308.5 $98.
Slide 12: Outlook for Velocity's Key Business Drivers
Outlook for Velocity’s Key Business Drivers Small Balance Commercial Market Expected to Grow 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 poised for levels, with tar
Slide 13: Appendix
Appendix
Slide 14: Velocity Financial, Inc. Balance Sheet
Velocity Financial, Inc. Balance Sheet Quarter Ended 6/30/2026 3/31/2026 12/31/2025 Unaudited Unaudited Audited (In thousands) Assets Cash and cash equivalents $ 76,115 $ 87,054 $ 92,103 Restricted cash 169,088 24,996 157,134 Loans held for investment, at fair value 5,460,522 5,154,508 4,729,869 Loa
Slide 15: Velocity Financial, Inc. Income Statements
Velocity Financial, Inc. Income Statements Quarter Ended ($ in thousands) 6/30/2026 3/31/2026 6/30/2025 Unaudited Unaudited Unaudited Revenues Interest income $ 160,986 $ 153,080 $ 135,567 Interest expense - portfolio related 97,627 94,027 81,838 Net interest income - portfolio related 63,359 59,053
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) $ 2.16 $20.59 $ 0.71 $ 18.43 GAAP Net Income $25,163 $17.75 $0.04 $(0.07) Non-core items $2,690 Core Net Income $27,853 Diluted book Non-Core Non-Ea
Slide 17: Reinvested Earnings Compounds Returns
Reinvested Earnings Compounds Returns Core Diluted Earnings Per Share ▪ Our proprietary operating platform CAGR = (1) and expertise delivers strong 30.0% results and durable long-term $2.91 $3.01 growth for our shareholders $2.03 ▪ Earnings growth re-invested at high marginal ROE compounds book valu
Slide 18: HFI Portfolio Delinquency Trends
HFI Portfolio Delinquency Trends June 30, 2025 September 30, 2025 December 31, 2025 March 31, 2026 June 30, 2026 ($ in thousands) $ % $ % $ % $ % $ % Performing/Accruing: Current $ 4,878,317 83.3% $ 5,202,057 82.9% $ 5,432,204 83.7% $ 5,648,159 82.6% $ 5,772,386 82.6% 30-59 days past due 263,390 4.4
Slide 19: Loan Portfolio Rollforward
Loan Portfolio Rollforward Total Loan Portfolio UPB Rollforward (UPB in millions) $672.6 $6,985.9 $6,836.5 $(272.8) $(222.8) $(27.6) Loan Portfolio at Principal Payments Loan Sales Transfer to REO Loan Production Loan Portfolio at 3/31/26 6/30/26 Confidential 19
Slide 20: HFI Loan Portfolio
HFI Loan Portfolio Portfolio by Property Type Portfolio by State (100% = $6.99 billion UPB)(1) Retail 11.5% California Mixed use 19.7% 11.0% Investor 1-4 Rental 45.6% Office Other New York 9.4% 41.5% 13.1% Warehouse 7.5% Florida 11.5% Multifamily 7.0% Texas Other 6.3% 8.0% New Jersey 7.9% Confidenti
Slide 21: Adjusted Financial Metric Reconciliation
Adjusted Financial Metric Reconciliation: Adjusted Financial Metric Reconciliation to GAAP Net Income xC̀ore Pretax Income ($ in thousands) Quarter Ended 6/30/2026 3/31/2026 6/30/2025 Income before income taxes $ 35,235 $ 30,877 $ 33,922 Equity awards & ESPP expenses 3,079 2,695 2,028 Potential M&A