Velocity Financial (VEL) investor relations material

Executive summary

• Net income for Q1 2026 was $22.4 million, up 18.4% year-over-year, with diluted EPS rising to $0.57 from $0.51.

• Core net income reached $26.5 million, a 30.8% increase year-over-year; core diluted EPS was $0.68.

• Total loan portfolio grew 25.6% year-over-year to $6.8 billion UPB as of March 31, 2026.

• Portfolio net interest margin improved to 3.56%, up 21 bps year-over-year.

• Issued $500 million in unsecured corporate debt, using proceeds to pay off $215 million secured debt and reduce warehouse debt.

Financial highlights

• Core net income increased 30% year-over-year compared to Q1 2025.

• Loan production for Q1 2026 was $639.4 million, flat year-over-year, funding over 1,600 loans.

• Portfolio yield rose to 9.23% and cost of funds decreased to 6.09% in Q1 2026.

• Non-performing loan (NPL) rate decreased to 10.1% from 10.8% year-over-year.

• REO activity resulted in a net gain of $6.8 million in Q1 2026, up from $4.4 million in Q1 2025.

Outlook and guidance

• Origination volumes and ROE are expected to remain strong through 2026, with NIM targeted around 3.5%.

• Management expects continued strong financing demand in both commercial and residential rental markets.

• Securitization market remains constructive, with next long-term loan securitization targeted for May 2026.

• Management remains confident in sustaining profitable growth and market share gains.

• Business model considered resilient despite macroeconomic and geopolitical uncertainties.