[8-K] Velocity Financial, Inc. Reports Material Event

Rhea-AI Filing Summary

Velocity Financial, Inc. outlined new incentive programs for key executives for 2026. The Compensation Committee approved an FY 2026 Annual Cash Incentive Program tied to Core Net Income Annual Growth for CEO Christopher D. Farrar, CFO Mark R. Szczepaniak and EVP Capital Markets Jeffrey T. Taylor. If 2026 Core Net Income growth meets the threshold, their performance-based cash bonuses would be $750,000, $350,000 and $275,000, respectively, and at the maximum growth level those bonuses rise to $1,500,000, $700,000 and $550,000.

Each executive can also earn an additional individual performance bonus ranging from $0 up to $1,500,000 for Farrar, $700,000 for Szczepaniak and $550,000 for Taylor, based on qualitative criteria such as asset quality, leadership and strategic initiatives. Separately, the FY 2026 Performance Stock Units Program grants performance stock units that can settle in up to 178,570 shares for Farrar and up to 38,264 shares each for Szczepaniak and Taylor, depending on the average Core Net Income Annual Growth for 2026–2028. Cash bonuses are certified after fiscal year-end 2026, and stock units after fiscal year-end 2028.

8-K Event Classification

Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers

1 item

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers Governance

Key personnel changes including departures, elections, or appointments of directors and executive officers.

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Accepted by SEC EDGAR 01/16/2026 - 06:28 PM Learn about SEC filing dates

FAQ

What executive incentive plans did VEL approve for 2026?

Velocity Financial approved an FY 2026 Annual Cash Incentive Program and an FY 2026 Performance Stock Units Program for certain executive officers, both tied to Core Net Income Annual Growth.

How are Velocity Financial (VEL) 2026 cash bonuses determined for executives?

Cash bonuses for 2026 are based on Core Net Income Annual Growth for the year ending December 31, 2026, plus an individual performance component based on asset quality, leadership, strategic initiatives, team cooperation and special projects.

What are the potential 2026 performance-based cash bonuses for VEL executives?

If Core Net Income growth reaches the maximum level, CEO Christopher D. Farrar can earn a $1,500,000 performance-based bonus, CFO Mark R. Szczepaniak $700,000 and EVP Jeffrey T. Taylor $550,000, with lower amounts at the threshold level.

What are the individual performance bonus ranges for Velocity Financial executives?

Individual performance-based bonus opportunities range from $0 to $1,500,000 for Christopher D. Farrar, $0 to $700,000 for Mark R. Szczepaniak and $0 to $550,000 for Jeffrey T. Taylor.

How does the 2026 Performance Stock Units Program work at Velocity Financial (VEL)?

The Performance Stock Units vest based on the numerical average of Core Net Income Annual Growth for 2026, 2027 and 2028. Depending on threshold, target and maximum growth rates, Farrar may receive up to 178,570 shares, and Szczepaniak and Taylor up to 38,264 shares each.

When will VEL determine payouts under the 2026 incentive programs?

Cash bonuses under the 2026 program are subject to Compensation Committee certification after fiscal year-end 2026, and vesting of Performance Stock Units is subject to certification after fiscal year-end 2028.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 15, 2026

Velocity Financial, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware			001-39183	46-0659719
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
2945 Townsgate Road, Suite 110
Westlake Village, California				91361
(Address of Principal Executive Offices)				(Zip Code)

Registrant’s Telephone Number, Including Area Code: (818) 532-3700

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		VEL		The New York Stock Exchange
Common stock, par value $0.01 per share		VEL		NYSE Texas, Inc.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January 15, 2025, the Compensation Committee of the Board of Directors approved the Velocity Financial FY 2026 Annual Cash Incentive Program and FY 2026 Performance Stock Units Program for certain of our executive officers.

2026 Annual Cash Incentive Program

The Compensation Committee of the Board of Directors approved the Velocity Financial FY 2026 Annual Cash Incentive Program for the following named executive officers, Christopher D. Farrar, Chief Executive Officer, Mark R. Szczepaniak, Chief Financial Officer and Jeffrey T. Taylor, Executive Vice President, Capital Markets.

The Compensation Committee approved Core Net Income Annual Growth for the year ending December 31, 2026 as the performance metric and individual performance objectives for determining cash bonus opportunities for the 2026 fiscal year. Core Net Income Annual Growth is the percentage growth calculated by subtracting Core Net Income for fiscal year 2025 from Core Net Income for fiscal year 2026 and dividing that difference by Core Net Income for fiscal year 2025. Core Net Income represents our net income after taxes adjusted to eliminate the effect of certain costs incurred or benefits received from activities that are not normal or recurring operating expenses or revenues.

If our 2026 Core Net Income Annual Growth is less than the Compensation Committee approved threshold, Messrs. Farrar, Szczepaniak and Taylor will not receive any performance-based bonus. If our 2026 Core Net Income Annual Growth equals the approved threshold, Messrs. Farrar, Szczepaniak and Taylor will be eligible to receive a performance-based bonus equal to $750,000, $350,000 and $275,000, respectively. If our 2026 Core Net Income Annual Growth equals or exceeds the approved maximum, Messrs. Farrar, Szczepaniak and Taylor will be eligible to receive a performance-based bonus equal to $1,500,000, $700,000 and $550,000, respectively. If actual 2026 Core Net Income Annual Growth falls between the approved threshold and maximum, the executives will be eligible to receive a performance-based bonus based on straight line interpolation between such points.

Each executive will also be eligible to receive an individual performance-based bonus based on an assessment of such executive's performance relating to the following criteria:

•Asset quality and overall corporate risk management

•Leadership and decision making

•Velocity’s strategic initiatives

•Inter department cooperation and team building

•Completion of special projects

Based on such individual assessments, the participating executive officers are eligible to receive the following individual performance-based bonus opportunities:

Christopher D. Farrar $0 - $1,500,000

Mark R. Szczepaniak $0 - $700,000

Jeffrey T. Taylor $0 - $550,000

Bonuses under the program will be subject to Compensation Committee certification following fiscal year-end 2026.

2026 Performance Stock Units Program

Under our FY 2026 Performance Stock Units Program, the Compensation Committee approved grants of Performance Stock Units with vesting conditioned on the numerical average of our Core Net Income Annual Growth for fiscal years 2026, 2027 and 2028.

Based on our average Core Net Income Annual Growth over the three-year period and the threshold, target and maximum growth rates approved by the Compensation Committee, the participating executive officers are eligible to receive the following shares of common stock in settlement of their grants:

Christopher D. Farrar 0 – 178,570

Mark R. Szczepaniak 0 – 38,264

Jeffrey T. Taylor 0 – 38,264

If our average Core Net Income Annual Growth is less than the Compensation Committee approved threshold, Messrs. Farrar, Szczepaniak and Taylor will not receive any shares. If our average Core Net Income Annual Growth is equal to or greater than the Compensation Committee approved maximum, Messrs. Farrar, Szczepaniak and Taylor will receive 178,570, 38,264 and 38,264 shares respectively. If our actual average Core Net Income Annual Growth falls between the approved threshold and maximum, the executives will be eligible to receive shares based on straight line interpolation between such points.

Vesting of the Performance Stock Units will be subject to Compensation Committee certification following fiscal year-end 2028.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			Velocity Financial, Inc.
Date:	January 16, 2026	By:	/s/ Roland T. Kelly
			Chief Legal Officer and General Counsel