Velocity Financial Q3 loan production hits $911M record
Loan production reached a record $911.3 million, while the Toorak operating-platform acquisition remains on track to close in Q4 2026, subject to customary closing conditions.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Velocity Financial, Inc. reported third-quarter 2026 net revenue of $102.149 million, compared with $85.772 million a year earlier. Core net income, a non-GAAP measure, was $30.043 million, up 11.5% year over year, and core diluted EPS was $0.76, up 10.1%. GAAP diluted EPS was $0.67 versus $0.65; portfolio net interest margin was 3.78% versus 3.65%.
Loan production reached a record $911.3 million, up 23.3% year over year. Held-for-investment loan portfolio UPB was $7.428 billion as of September 30, 2026, up 18.4% from a year earlier; nonperforming loans were 10.1% of HFI loans, compared with 9.8%. Liquidity was $193.4 million, including $86.8 million of unrestricted cash and $106.6 million of available borrowings from unpledged loans.
The Toorak operating-platform acquisition has an approximately $62 million purchase price to be paid from cash and remains on track to close in Q4 2026, subject to customary closing conditions. It is expected to be accretive to GAAP earnings in 2027 and beyond. Toorak’s approximately $3 billion BPL portfolio is to be managed by Velocity for a third-party investor.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointCore net income increased 11.5% year over year to $30.043 million.
- Moderate pointRecord loan production reached $911.3 million, up 23.3% year over year.
Negative
- None.
Filing Explained
The presentation reports $465.7 million of October securitization issuance and $425.4 million of warehouse-line capacity available at September 30.
This 8-K furnishes management’s third-quarter presentation; it reports two completed securitizations totaling
The presentation separately reports
8-K Event Classification
Key Figures
Key Terms
Core net income financial
Net Interest Margin financial
Unpaid principal balance financial
CECL financial
Mortgage servicing rights financial
FAQ
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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
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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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 7.01 Regulation FD Disclosure.
We posted to our Investor Relations website, www.velfinance.com, management's third quarter 2026 earnings presentation. A copy of the presentation is furnished as Exhibit 99 and is incorporated herein by reference.
The information provided in this Form 8-K, including Exhibit 99, is intended to be furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act or the Securities Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
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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.
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Velocity Financial, Inc. |
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3Q26 Results November 4, 2026 Exhibit 99
DISCLOSURE 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 anticipated results, expectations, projections, prospects, plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward- looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “goal,” ”position,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans, or intentions. The forward-looking statements contained in this presentation reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions, and changes in circumstances that may cause actual results to differ significantly from those expressed or contemplated in any forward-looking statement. While forward-looking statements reflect our good faith projections, assumptions, and expectations, they are not guarantees of future results. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events, or other changes, except as required by applicable law. Factors that could cause our results to differ materially include, but are not limited to, (1) changes in federal government fiscal and monetary policies, (2) general economic and real estate market conditions, including the risk of recession, (3) regulatory and/or legislative changes, (4) our customers’ continued interest in loans and doing business with us, (5) market conditions and investor interest in our future securitizations, and (6) geopolitical conflicts. Additional information relating to these and other factors that could cause future results to differ materially from those expressed or contemplated in any forward-looking statements can be found in other cautionary statements we make in our current and periodic filings with the SEC. Such filings are available publicly on our Investor Relations web page at www.velfinance.com. Velocity Financial, Inc. - 3Q26 Results Presentation 2
EARNINGS 3Q26 Financial Highlights MEASURE ($ in thousands) 3Q26 2Q26 3Q25 CHANGE VS 3Q25 Core net income1 11.5% Core diluted EPS1 $0.76 $0.71 $0.69 10.1% Net income $26,418 $25,163 $25,373 Diluted EPS $0.67 $0.64 $0.65 3.1% Portfolio NIM2 3.78% 3.66% 3.65% 13 bps (1) “Core net income” and “Core diluted EPS” are non-GAAP financial measures. See “Adjusted Financial Metric to GAAP Net Income” in the Appendix (2) Net Interest Margin. 3 4.1% Velocity Financial, Inc. - 3Q26 Results Presentation $30,043 $27,853 $26,937 Diluted book value per share $19.23 $18.43 $16.31 17.9% Pre-tax return on average equity 20.5% 20.0% 22.7% 9.9%
THIRD QUARTER 2026 Results Strong earnings and record production from a unique market segment and lending model CORE EPS1 2nd highest quarterly core EPS result in the Company’s history PORTFOLIO NIM2 3.8% NIM2 remained well above 3.5% target, driven by lower average cost of securitized debt LOAN PRODUCTION Record Production resulted in a 23.3% increase in volume from 3Q25 LOAN PORTFOLIO GROWTH 30% CAGR five-year loan portfolio CAGR; 18.4% HFI loan portfolio growth from 3Q25 CAPITAL & LIQUIDITY FINANCING Core EPS is a non-GAAP financial measure. See the appendix for a reconciliation to the most directly comparable GAAP measure. See forward-looking statements disclaimer. (2) Net Interest Margin 4 Velocity Financial, Inc. - 3Q26 Results Presentation $516.0 Million of securities issued from the completion of two securitizations that were met with solid investor demand $425.4 Million of available warehouse line capacity $193.4 Million of liquidity consisting of $86.8 million in unrestricted cash and $106.6 million in available borrowings from unpledged loans
PRODUCTION & LOAN PORTFOLIO Production & Loan Portfolio MEASURE ($ in millions) 3Q26 2Q26 3Q25 CHANGE VS 3Q25 HFI loan portfolio (UPB) $7,428.0 $6,985.9 $6,273.3 18.4% Loan Production $911.3 $672.6 $739.0 23.3% Nonperforming loans (NPL) as a % of HFI loans1 10.1% 9.6% 9.8% 30 bps NPL realized gains as % of UPB resolved 103.0% 102.7% 102.8% 20 bps NPL realized gains2 $2.7 $2.5 $2.6 1.5% (1) Held for investment (2) Nonperforming loan net gains as a percentage of unpaid principal balance resolved were 103.0% for 3Q26, 102.7% for 2Q26 and 102.8% for 3Q25. 5 Velocity Financial, Inc. - 3Q26 Results Presentation
LOAN PRODUCTION 3Q26 Originations Reach Record Levels Loan Production Volume1 · $ in millions Traditional Commercial Investor 1-4 Rental Short-term Loan Products Government Insured Multifamily (CHHC) Strong growth of 23.3% Y/Y and 35.5% Q/Q Traditional Commercial volume totaled $422.5 million in UPB, an increase of 12.8% from 3Q25 and 25.1% from 2Q26 Investor 1-4 volume totaled $318.3 million in UPB, an increase of 5.3% from 3Q25 and 37.0% from 2Q26 (1) Including advances. 6 Velocity Financial, Inc. - 3Q26 Results Presentation Government Insured Multifamily HFS production delivers strong growth Volume increased to $154.9 million in UPB from $86.3 million for 2Q26 and $25.9 million for 3Q25 Loans are sold to third-party investors, generating origination fees and servicing fees from the retention of the mortgage servicing rights
LOAN PORTFOLIO TOTAL LOAN PORTFOLIO · UPB +30.3% five-year compounded annual growth Velocity’s total loan portfolio was $7.5 billion in UPB as of September 30, 2026, an increase of 18.8% from $6.3 billion in UPB as of September 30, 2025 Investor 1-4 Rental · Mixed Use · Multifamily · Retail · Warehouse · Office · All Other UPB in millions 7 Diversified portfolio across multiple property types Loan prepayments totaled $261.9 million in UPB, an increase of 11.5% from $235.0 million for 3Q25 Velocity Financial, Inc. - 3Q26 Results Presentation
NET INTEREST MARGIN Portfolio Yield, Cost of Funds and NIM1 PORTFOLIO NIM · 3Q26 3.78% up 13 bps from 3.65% for 3Q25 −13 bps Portfolio Yield: Decreased 13 bps from 3Q25. Y/Y decrease primarily driven by lower NPL-related interest income realized in 3Q26 −23 bps Portfolio Cost of Funds: Decreased 23 bps from 3Q25 reflecting the impact of the lower cost securitized debt issued since September 30, 2025. (1) Net Interest Margin related to the loan portfolio only; excludes corporate debt. 8 Velocity Financial, Inc. - 3Q26 Results Presentation
NONPERFORMING LOANS Resolved NPLs Result In Net Gains 10.3% 9.6% NONPERFORMING LOANS 1 $2.7 million of resolution gains over and above the receipt of all past due contractual interest on NPLs for 3Q26, or 103.0% of total UPB resolved The recent five-quarter average quarterly NPL resolution gains were $2.3 million or 102.7% of UPB resolved Velocity has consistently realized gains from NPL resolutions across a variety of market cycles and operating conditions Resolution activities are performed by our in-house asset management specialists (1) For additional detail, please see HFI Portfolio Delinquency Trends in the Appendix. 9 $614.2 $673.3 $756.5 Nonperforming loan UPB1 · $ in millions 10.1% 9.6% 9.8% Velocity Financial, Inc. - 3Q26 Results Presentation
RESOLUTION ACTIVITIES 3Q26 NPL Resolutions and Recoveries Remained Strong TOTAL NPL RESOLUTION GAINS $2,690 3Q26 realized gains of $2.6 million on long-term NPLs, or 103.1% of UPB resolved and $0.1 million of gains, or 101.7% on short-term NPLs + NET ACCRUED INTEREST 1 $4,737 Contractual accrued interest recovered on resolution, net of any servicing advances written off = TOTAL RECOVERED $7,427 Total recovered revenue of $7.4 million, or 108.2%, of UPB resolved, including accrued interest, compared to $8.4 million, or 108.9% for 3Q25 NPL resolutions for 3Q26 totaled $90.0 million in UPB resolved, realizing gains from default interest and prepayment penalties of $2.7 million, compared to $94.7 million in UPB resolved and gains of $2.7 million for 3Q25 RECOVERY RATE · LONG-TERM NPL 108.3% RECOVERY RATE · SHORT-TERM & FORBEARANCE 108.2% GRAND TOTAL RECOVERY RATE 108.2% (1) Net Accrued Interest includes contractual accrued interest recovered upon resolution of the loan, net of servicing advances written off. $ in thousands. 10 Velocity Financial, Inc. - 3Q26 Results Presentation $ in thousands
REAL ESTATE OWNED (REO) ACTIVITY Gain (Loss) on New & Existing REO REO PORTFOLIO BALANCE · $ IN MILLIONS % of HFI loans shown inside each bar GAIN ON NEW REO $4.8M LOSS ON EXISTING REO $8.8M 2.0% $ IN THOUSANDS 9/30/2025 9/30/2026 $ VAR % VAR GAIN ON NEW REO Gain on transfer to REO — amortized cost loans 2,583 1,140 (1,443) (55.9)% Valuation gain on transfer to REO — fair value loans 5,199 3,653 (1,546) (29.7)% Total gain on new REO1 7,782 4,793 (2,989) (38.4)% GAIN / (LOSS) ON EXISTING REO REO valuation loss, net (6,307) (8,693) (2,386) 37.8% Gain (loss) on sale of REO 152 (72) (224) (147.4)% Total loss on existing REO1 (6,155) (8,765) (2,610) 42.4% (1) Total (loss) / gain on REO excludes charge-offs. 11 Velocity Financial, Inc. - 3Q26 Results Presentation
CREDIT LOSS RESERVE Modest CECL Reserve Increase as Amortized Cost Portfolio Pays Down $ IN THOUSANDS 9/30/2025 9/30/2026 VAR % VAR Beginning balance 4,882 5,102 220 4.5% Provision for credit losses 381 531 150 39.4% Charge-offs (677) (326) 351 (51.8)% Ending balance 4,586 5,307 721 15.7% Total UPB subject to CECL 2,111,569 1,744,942 (366,627) (17.4)% Nonperforming loans UPB subject to CECL 259,683 174,647 (85,036) (32.7)% Nonperforming loans UPB subject to CECL / Total UPB subject to CECL 12.3% 10.0% (2.3)% (18.6)% Allowance for credit losses / Total UPB subject to CECL 0.22% 0.30% 0.1% 40.0% Charge-offs / Total UPB subject to CECL1 0.13% 0.07% (0.1)% (41.7)% CECL RESERVE BALANCE $5.3M compared to $4.6 million as of September 30, 2025 CECL RESERVE RATE 0.30% as % of amortized cost HFI loans, up from 0.22% as of September 30, 2025 CHARGE-OFFS $0.33M for 3Q26. Five-quarter average charge-offs of $1.0 million (1) Annualized. 12 Velocity Financial, Inc. - 3Q26 Results Presentation
Two Securitizations Issued in 3Q26 and One in October $516.0 million VCC 2026-4 $465.7 million Subsequent to quarter end, issued the VCC 2026-4 securitization with a weighted average rate of 6.97%. CASH AND UNPLEDGED LOANS $193.4 million consisting of $86.8 million in unrestricted cash and cash equivalents and $106.6 million in available borrowings from unpledged loans AVAILABLE WAREHOUSE LINE CAPACITY $425.4 million Available warehouse line capacity of $425.4 million as of September 30, 2026 13 Velocity Financial, Inc. - 3Q26 Results Presentation LIQUIDITY VCC 2026-3 & VCC 2026-P2 weighted average rate of 6.18% for the VCC 2026-3 and 6.49% for the VCC 2026-P2
Outstanding Debt Balances1 Debt / Equity 9.6X 9.7X 9.7X 9.6X Recourse Debt / Equity2 1.0X 1.0X 1.0X 1.5X Securitizations Issued 2 2 2 2 Max. Warehouse Line Capacity $935 $935 $935 $975 (1) Debt balances are net of issuance costs and discounts as reported in the consolidated balance sheet. (2) Recourse debt to equity of 1.5X, an increase from 1.2X as of June 30, 2026, driven by higher warehouse debt utilization. 14 9.7X 1.2X 2 $975 $ in millions Velocity Financial, Inc. - 3Q26 Results Presentation FINANCING AND CAPITAL
TOORAK CAPITAL ACQUISITION · TRANSACTION UPDATE Toorak Acquisition Remains On Track to Close in Q4 2026 (1) Subject to customary purchase price adjustments. (2) Velocity loan portfolio as of 6/30/2026; Toorak loan portfolio as of 5/31/2026. See forward-looking statements disclaimer. 15 Adding a leading short-term business-purpose lender to complement our core investor loan activities PURCHASE PRICE 1 ~$62mm From cash TOORAK BPL PORTFOLIO ~$3bn To be managed by Velocity for a third-party investor TOTAL AUM (UPB) AFTER CLOSE 2 ~$10bn Total assets under management after closing EXPECTED CLOSING Q4 2026 Subject to customary closing conditions KEY TERMS Acquiring Toorak’s operating platform from funds advised by affiliates of KKR The majority of Toorak’s existing loan portfolio to be sold to a third-party investment firm; Toorak will manage the portfolio Toorak continues under its brands and leadership as a Velocity subsidiary; Founder & CEO John Beacham joins Velocity Commercial Capital as EVP EXPECTED FINANCIAL IMPACT Complementary product alignment expands opportunities to deepen relationships with broader product menu Adds recurring fee income (servicing, asset management and origination) Accretive to GAAP earnings in 2027 and beyond Velocity Financial, Inc. - 3Q26 Results Presentation
TOORAK CAPITAL ACQUISITION · STRATEGIC RATIONALE Toorak Increases Production and Diversifies Mix (1) Company and Toorak FY 2025 data, excluding TCP U.S. production except DSCR; combined figures are illustrative, not pro forma. (2) Velocity loan portfolio as of 6/30/2026; Toorak as of 5/31/2026. 16 FY 2025 PRODUCTION PROFILE 1 FY 2025 Velocity Toorak Combined Production volume $2.7bn $2.1bn $4.8bn Short-duration share 6% 91% 42% Direct origination 0% 40% 17% Markets U.S. U.S., U.K. U.S., U.K. INCREASE IN ORIGINATION PLATFORM SCALE 2 +76% INCREASE IN SERVICING PLATFORM SCALE 2 +39% FIVE STRATEGIC PILLARS 01 Scale ~$2.7bn to ~$4.8bn+ production; operating leverage 02 Product and channel diversification Expands RTL/GUC; adds U.S. direct retail origination 03 U.K. market entry Immediate presence; 30+ partners 04 Proprietary technology AI-enabled origination and servicing workflows 05 Fee-based revenue growth Forward-flow loan sales diversify revenue Velocity Financial, Inc. - 3Q26 Results Presentation
OUTLOOK FOR VELOCITY’S KEY BUSINESS DRIVERS Small Balance Investor Loan Market to Remain Resilient MARKET Market demand for small balance investor properties to remain resilient despite higher interest rates Rental demand to stay strong as consumer balance sheets continue to be in relatively good shape CREDIT NPL resolution trends (UPB volume & gains) expected to continue contributing profits CAPITAL Next long-term loan securitization targeted for November 2026 (completed issuance of the VCC 2026-4 in October) Securitization market remains constructive EARNINGS ~3.5% NIM TARGET Rate discipline on new originations to support NIM target 17 Expecting similar credit performance in our portfolio Velocity Financial, Inc. - 3Q26 Results Presentation
Appendix Velocity Financial, Inc. - 3Q26 Results Presentation 18
LOAN PORTFOLIO Total Loan Portfolio UPB Rollforward UPB in millions · waterfall; each movement bridges the running balance, vertical scale truncated Loan Portfolio at 6/30/26 Principal Payments CHHC Loan Sales1 Transfer to REO Loan Production Loan Portfolio at 9/30/26 19 (1) Held for sale loans sold by Century Health and Housing Capital during the quarter. Velocity Financial, Inc. - 3Q26 Results
HFI LOAN PORTFOLIO HFI Loan Portfolio 100% = $7.43 billion UPB as of September 30, 2026 PORTFOLIO BY PROPERTY TYPE Investor 1-4 Rental 44.9% Retail 11.7% Mixed use 10.8% Office 9.9% Warehouse 7.3% Multifamily 7.0% Other 8.4% PORTFOLIO BY STATE California 19.6% New York 12.6% Florida 11.4% New Jersey 7.8% Texas 6.6% All other states 42.0% 51.9% COMMERCIAL PROPERTY TYPES 48.1% 20 $7.43B UPB RESIDENTIAL PROPERTY TYPES Velocity Financial, Inc. - 3Q26 Results
LOAN PORTFOLIO 3Q25 2Q26 3Q26 Loan to Value 65.5% 64.6% 64.5% Loan Count 15,978 18,219 19,481 WAC1 9.7% 9.7% 9.8% Average Loan Balance2 $392.8 $383.4 $382.8 FVO% 66.3% 74.1% 76.5% APPENDIX Loan Portfolio Metrics (1) Weighted Average Coupon on the total loan portfolio. (2) $ in thousands. Velocity Financial, Inc. - 3Q26 Results 21
HFI PRODUCTION METRICS 3Q25 4Q25 1Q26 2Q26 3Q26 Change since 2Q26 Change since 3Q25 HFI Production1 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 16.4 15.5 (5.4%) (57.0%) Total HFI production $713.0 $632.8 $637.1 $586.3 $756.3 29.0% 6.1% WAC2 10.5% 10.1% 10.1% 10.0% 10.1% (36) bps 12 bps LTV3 62.8% 62.9% 62.5% 61.1% 61.7% (104) bps 62 bps Units 1,778 1,723 1,682 1,682 1,989 18.3% 11.9% Average loan balance4 $401.0 $368.3 $378.8 $348.6 $380.3 9.1% (5.2%) LOAN PRODUCTION HFI Production Metrics (1) $ in millions (2) Weighted Average Coupon on HFI production. (3) Loan to Value. (4) $ in thousands. 22 Velocity Financial, Inc. - 3Q26 Results Presentation
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 Diluted book value at 6/30/263 Diluted book value at 9/30/264 Adjusted book value at 9/30/265 $18.43 6/30/26 › $(0.09) Non-Core Items1 › $0.13 Non-Earnings Activity › +$0.76 Core Earnings1 › $19.23 9/30/26 › +$2.20 Adjustment5 › $21.43 Adjusted DILUTED BOOK VALUE PER SHARE $19.23 a 4.3% increase from $18.43 as of June 30, 2026, and a 17.9% increase from $16.31 as of September 30, 2025 ADJUSTMENT 5 +$2.20 the net incremental estimated pretax fair value of loans carried at amortized cost and related securitized debt over diluted book value CORE EARNINGS CONTRIBUTION +$0.76 Core net income totaled $30.0 million for 3Q26, compared to $27.9 million for 2Q26. 3Q26 core pre-tax ROE of 22.8% compared to 21.8% for 2Q26. (1) “Core net income” is a non-GAAP financial measure which excludes incentive compensation expenses, costs related to the Company’s employee stock purchase program (ESPP) and M&A due diligence from GAAP net income. (2) Diluted book value per share is the ratio of total GAAP equity divided by diluted shares at period end. Total equity includes non-controlling interest of $3.63 million as of June 30, 2026, and $4.43 million as of September 30, 2026. (3) Based on 39,346,340 diluted shares as of June 30, 2026.(4) Based on 39,404,692 diluted shares as of September 30, 2026. (5) Fair value adjustment is derived using the pretax net incremental estimated fair value of the Company’s loans and securitizations carried at amortized cost divided by the diluted share count as of September 30, 2026. For additional information, please see Fair Value Disclosures in the Company’s 10-Q for the period ended September 30, 2026. 23 Velocity Financial, Inc. - 3Q26 Results
REINVESTED EARNINGS COMPOUNDS RETURNS Reinvested Earnings and Core Return on Average Equity Core Diluted Earnings Per Share Stockholders’ Equity2 Earnings growth re-invested at high marginal ROE compounds book value and ROE (1) Stockholders’ equity includes noncontrolling interest in subsidiary as of 12/31/2024, 12/31/2025 and LTM 9/30/2026. $ in millions except per share amounts. Average Stockholders’ Equity1 Core Return on Average Stockholders’ Equity 24 Velocity Financial, Inc. - 3Q26 Results
APPENDIX Velocity Financial, Inc. Balance Sheet In thousands. 9/30/2026 and 6/30/2026 unaudited; 12/31/2025 audited. 25 ASSETS 9/30/2026 6/30/2026 12/31/2025 Cash and cash equivalents $ 86,754 $ 76,115 $ 92,103 Restricted cash 22,530 169,088 157,134 Loans held for sale, at fair value 26,278 — — Loans held for investment, at fair value 5,907,978 5,460,522 4,729,869 Loans held for investment, at amortized cost 1,756,120 1,823,039 2,028,262 Total loans, net 7,690,376 7,283,561 6,758,131 Retained securities, at fair value 29,322 29,924 — Accrued interest receivable 55,595 53,107 49,678 Receivables due from servicers 136,682 152,182 150,902 Other receivables 4,324 6,006 1,897 Real estate owned, net 154,574 142,085 118,289 Property and equipment, net 1,208 1,291 1,415 Deferred tax asset, net 14,135 19,852 22,709 Mortgage servicing rights, at fair value 16,408 14,307 12,963 Derivative assets 3,784 118 66 Goodwill 6,775 6,775 6,775 Note receivable, at fair value 15,320 — — Other assets 11,785 8,719 9,451 Total assets $ 8,249,572 $ 7,963,130 $ 7,381,513 LIABILITIES AND EQUITY 9/30/2026 6/30/2026 12/31/2025 Accounts payable and accrued expenses $ 185,555 $ 186,020 $ 168,314 Secured financing, net 73,579 73,427 286,679 Unsecured senior notes, net 486,918 486,170 — Securitized debt, at amortized cost 1,476,811 1,570,782 1,705,589 Securitized debt, at fair value 4,720,826 4,609,891 4,236,737 Warehouse & repurchase facilities, net 548,157 311,676 308,506 Total liabilities 7,491,846 7,237,966 6,705,825 STOCKHOLDERS’ EQUITY Stockholders’ equity 753,298 721,537 672,535 Noncontrolling interest in subsidiary 4,428 3,627 3,153 Total equity 757,726 725,164 675,688 Total liabilities and members’ equity $ 8,249,572 $ 7,963,130 $ 7,381,513 Diluted book value per share $ 19.23 $ 18.43 $ 17.19 Diluted shares outstanding 39,404 39,346 39,297 Velocity Financial, Inc. - 3Q26 Results
APPENDIX Velocity Financial, Inc. Income Statements $ in thousands. Quarters ended, unaudited. 26 REVENUES 9/30/2026 6/30/2026 9/30/2025 Interest income $ 169,461 $ 160,986 $ 144,119 Interest expense — portfolio related 101,481 97,627 88,899 Net interest income — portfolio related 67,980 63,359 55,220 Interest expense — corporate debt 14,470 14,469 6,144 Net interest income 53,510 48,890 49,076 Provision for credit losses 531 980 381 Net interest income after provision for credit losses 52,979 47,910 48,695 OTHER OPERATING INCOME Gain on disposition of loans 12,808 3,954 4,574 Unrealized gain (loss) on fair value loans (64,761) 24,483 30,982 Unrealized gain (loss) on fair value securitized debt 87,376 2,297 (9,988) Unrealized gain/(loss) on retained securities (602) — — Unrealized gain/(loss) on mortgage servicing rights 1,037 1,126 (343) Origination fee income 10,395 12,154 9,723 Interest income on cash balance 1,347 1,334 1,564 Other income 1,570 1,730 565 Total other operating income 49,170 47,078 37,077 Net revenue 102,149 94,988 85,772 OPERATING EXPENSES 9/30/2026 6/30/2026 9/30/2025 Compensation and employee benefits 29,164 25,514 23,300 Origination expenses 1,650 1,405 1,154 Securitization expenses 5,595 4,669 6,433 Rent and occupancy 388 352 274 Loan servicing 9,100 15,685 7,748 Professional fees 3,624 2,173 893 Real estate owned, net 10,590 6,723 7,931 Other operating expenses 3,758 3,232 2,664 Total operating expenses 63,869 59,753 50,397 Income before income taxes 38,280 35,235 35,375 Income tax expense 11,061 9,501 9,963 Net income 27,219 25,734 25,412 Net income (loss) attributable to noncontrolling interest 801 571 39 Net income attributable to Velocity Financial, Inc. 26,418 25,163 25,373 Basic earnings (loss) per common share $ 0.68 $ 0.651 $ 0.671 Diluted earnings (loss) per common share $ 0.67 $ 0.64 $ 0.65 Basic weighted average common shares outstanding 38,805 38,730 38,073 Diluted weighted average common shares outstanding 39,459 39,304 38,800 Velocity Financial, Inc. - 3Q26 Results (1) Basic earnings per share for the three months ended June 30, 2026 and September 30, 2025 were revised to conform to the current period presentation. The revisions had no effect on net income or diluted earnings per share.
$ 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 5.0% 374,269 5.4% 293,479 4.3% 296,100 4.6% 322,091 5.1% 60–89 days past due 173,719 2.3% 165,901 2.4% 202,833 3.0% 208,494 3.2% 134,923 2.2% Total performing loans HFI 6,671,505 89.9% 6,312,556 90.4% 6,144,471 89.9% 5,936,798 91.5% 5,659,072 90.2% NONPERFORMING / NONACCRUAL <90 days past due 54,399 0.7% 53,708 0.8% 57,685 0.8% 41,296 0.6% 33,560 0.5% 90+ days past due 114,058 1.5% 113,895 1.6% 108,963 1.6% 71,985 1.1% 54,812 0.9% Bankruptcy 90,510 1.2% 83,447 1.2% 50,669 0.7% 57,919 0.9% 67,522 1.1% In foreclosure 497,567 6.7% 422,285 6.0% 474,756 6.9% 383,340 5.9% 458,332 7.3% Total nonperforming loans HFI 756,534 10.1% 673,335 9.6% 692,073 10.1% 554,540 8.5% 614,226 9.8% Total loans held for investment 7,428,039 100% 6,985,891 100% 6,836,544 100% 6,491,338 100% 6,273,298 100% APPENDIX HFI Portfolio Delinquency Trends Percentages are of total loans held for investment UPB for the period shown. 27 Velocity Financial, Inc. - 3Q26 Results
APPENDIX Resolution Activities (1) Net Accrued Interest includes contractual accrued interest recovered upon resolution of the loan, net of servicing advances written off. $ in thousands. 28 THIRD QUARTER 2026 THIRD QUARTER 2025 RESOLUTION ACTIVITY UPB $ GAINS NET ACCRUED INTEREST1 TOTAL RECOVERED LONG-TERM NONPERFORMING LOANS Paid in full $ 31,155 $ 2,013 $ 2,175 $ 4,188 Paid current 52,084 560 2,124 2,684 Total resolutions $ 83,239 $ 2,573 $ 4,299 $ 6,872 Recovery rate on resolved nonperforming loans 103.1% 108.3% SHORT-TERM AND FORBEARANCE NONPERFORMING LOANS Paid in full $ 2,814 $ 54 $ (6) $ 48 Paid current 3,995 63 444 507 Total resolutions $ 6,809 $ 117 $ 438 $ 555 Recovery rate on resolved nonperforming loans 101.7% 108.2% Grand total resolutions $ 90,048 $ 2,690 $ 4,737 $ 7,427 Recovery rate on resolved nonperforming loans 103.0% 108.2% RESOLUTION ACTIVITY UPB $ GAINS NET ACCRUED INTEREST1 TOTAL RECOVERED LONG-TERM NONPERFORMING LOANS Paid in full $ 37,901 $ 1,980 $ 3,033 $ 5,013 Paid current 45,055 448 2,351 2,799 Total resolutions $ 82,956 $ 2,428 $ 5,384 $ 7,812 Recovery rate on resolved nonperforming loans 102.9% 109.4% SHORT-TERM AND FORBEARANCE NONPERFORMING LOANS Paid in full $ 5,695 $ 197 $ 398 $ 595 Paid current 6,091 25 (26) (1) Total resolutions $ 11,786 $ 222 $ 372 $ 594 Recovery rate on resolved nonperforming loans 101.9% 105.0% Grand total resolutions $ 94,742 $ 2,650 $ 5,756 $ 8,406 Recovery rate on resolved nonperforming loans 102.8% 108.9% Velocity Financial, Inc. - 3Q26 Results
APPENDIX Adjusted Financial Metric Reconciliation to GAAP Net Income (1) “Core net income” is a non-GAAP financial measure which excludes incentive compensation expenses, costs related to the Company’s employee stock purchase program (ESPP) and M&A due diligence from GAAP net income. $ in thousands, except per share amounts. 29 CORE PRETAX INCOME CORE NET INCOME1 QUARTER ENDED 9/30/2026 6/30/2026 9/30/2025 Income before income taxes $ 38,280 $ 35,235 $ 35,375 Equity awards & ESPP expenses 2,685 3,079 2,154 Potential M&A diligence 2,388 672 — Net (loss) income attributable to noncontrolling interest (801) (571) (39) Core income before income tax $ 42,552 $ 38,415 $ 37,490 Average common equity $ 748,670 $ 704,138 $ 623,239 Core pretax return on equity 22.8% 21.8% 24.1% QUARTER ENDED 9/30/2026 6/30/2026 9/30/2025 Net income $ 26,418 $ 25,163 $ 25,373 Equity award & ESPP expenses 1,919 2,208 1,564 Potential M&A diligence 1,706 482 — Core net income $ 30,043 $ 27,853 $ 26,937 Diluted weighted average common shares outstanding 39,459 39,304 38,800 Core diluted earnings per share $ 0.76 $ 0.71 $ 0.69 Velocity Financial, Inc. - 3Q26 Results $ in thousands, except per share amounts.
3Q26 Results November 4, 2026