Velocity Financial (VEL) investor relations material

Executive summary

• 2025 was a transformational year with record core earnings per share of $2.91, up 43% year-over-year, and core pretax income rising 51% to $154.6 million compared to 2024.

• Net income for 4Q25 was $34.8 million, up 69% year-over-year; full-year net income reached $105.1 million, up 53.5% from 2024.

• Core net income for 2025 rose 52% to $111 million; 4Q25 core net income was $36.3 million, up 67% year-over-year.

• Total loan portfolio reached $6.5 billion, a 28% increase from the prior year, with strong diversification across property types and geographies.

• Record loan production and strong portfolio earnings, with significant gains from NPL loan sales and fair value adjustments.

Financial highlights

• Core pretax ROE for 2025 was 26%; diluted book value per share grew 21% year-over-year to $17.19.

• Loan originations for 2025 totaled $2.74 billion, up 49% year-over-year; 4Q25 originations were $634.6 million, up 12.6%.

• Portfolio net interest margin for 2025 was 3.61%; 4Q25 NIM was 3.59%.

• Nonperforming loans as a percentage of HFI loans decreased to 8.5% from 10.7% year-over-year, driven by NPL sales.

• CECL reserve at year-end was $4.5 million (0.22% of portfolio); charge-offs rose to $2.0 million in 4Q25.

Outlook and guidance

• Management expects continued strong portfolio growth and stable NIM in 2026, supported by robust capital markets and disciplined credit standards.

• Real estate values expected to remain stable to slightly positive, supporting growth in small balance investor properties.

• Next long-term loan securitization targeted for March 2026, with supportive securitization market conditions.

• Optimism for future earnings and growth, with no significant concerns about competition or rate changes impacting core business.

• Forward-looking statements note risks from economic, regulatory, and market conditions, as well as investor demand for securitizations.