Velocity Financial, Inc. Reports Fourth Quarter and Full-Year 2025 Results
WESTLAKE VILLAGE, Calif.--( BUSINESS WIRE)--Velocity Financial, Inc. (NYSE: VEL) (Velocity or the Company), a leader in business purpose loans, reported net income of $105.1 million and core net income of $111.0 million for 2025, compared to $68.4 million and $72.9 million, respectively, for 2024. Earnings and core earnings per diluted share were $2.75 and $2.91 for 2025, compared to $1.91 and $2.03, respectively, for 2024.
“Velocity delivered impressive earnings in the fourth quarter and full year 2025,” said Chris Farrar, President and CEO. “The Company’s record full-year 2025 earnings were driven by continued strong production, which also reached record levels. Our success resulted from ongoing initiatives to capture a greater share of the large but fragmented business purpose loan market. I’m especially proud of our team’s ability to achieve outstanding production volume growth while remaining focused on credit discipline and maintaining strong margins. We are well positioned to drive future earnings by addressing the important niche we serve.”
Operating Results
Key Performance Indicators 2
Three Months Ended December 31,
2025
2024
Variance
% Variance
($ in thousands, except per share amounts)
Income before income tax
$
50,049
$
32,038
$
18,011
56.2
%
Net income
$
34,797
$
20,587
$
14,210
69.0
%
Diluted earnings per share
$
0.89
$
0.57
$
0.32
56.1
%
Core income before income tax
$
52,224
$
33,463
$
18,761
56.1
%
Core net income
$
36,327
$
21,754
$
14,573
67.0
%
Core diluted earnings per share
$
0.93
$
0.60
$
0.33
54.3
%
Net interest margin — portfolio related
3.59
%
(1)
3.70
%
(1)
(0.11
)%
(3.1
)%
Net interest margin — total company
3.21
%
(1)
3.20
%
(1)
0.01
%
0.3
%
Operating expense ratio
25.7
%
26.8
%
(1.1
)%
(4.2
)%
Average common equity
$
651,352
$
498,887
$
152,465
30.6
%
Pre-tax return on average equity
30.7
%
(1)
25.7
%
(1)
5.0
%
19.7
%
Core pre-tax return on average equity
32.1
%
(1)
26.8
%
(1)
5.2
%
19.5
%
(1) Annualized
2 Core income before income tax, core net income, core diluted EPS and core pre-tax return on average equity are non-GAAP measures. Please see “Non-GAAP Financial Measures” and “Non-GAAP Financial Measure Reconciliations to GAAP Measures” at the end of this press release.
Condensed Results of Operations
Three Months Ended
December 31,
2025
2024
$ Variance
% Variance
($ in thousands)
Net interest income
$
51,609
$
38,857
$
12,752
32.8
%
Provision for credit losses
1,954
22
1,932
8,781.8
%
Net interest income after provision
49,655
38,835
10,820
27.9
%
Other operating income
53,249
32,330
20,919
64.7
%
Net revenue
102,904
71,165
31,739
44.6
%
Operating expenses
52,855
39,127
13,728
35.1
%
Income before income taxes
50,049
32,038
18,011
56.2
%
Income tax expense
15,296
11,233
4,063
36.2
%
Net income
34,753
20,805
13,948
67.0
%
Net income (loss) attributable to noncontrolling interest
(44
)
218
(262
)
(120.2
)%
Net income attributable to Velocity Financial, Inc.
$
34,797
$
20,587
$
14,210
69.0
%
Loan Portfolio
December 31,
2025
2024
Variance
% Variance
($ in thousands)
Total Loans Outstanding:
Investor 1-4
$
3,125,346
$
2,653,264
$
472,082
17.8
%
Mixed use
709,131
560,548
148,583
26.5
%
Retail
691,683
446,576
245,107
54.9
%
Office
542,556
309,222
233,334
75.5
%
Multifamily
461,666
367,007
94,659
25.8
%
Warehouse
454,527
334,307
120,220
36.0
%
Other (1)
506,429
385,013
121,416
31.5
%
Total loans
$
6,491,338
$
5,055,937
$
1,435,401
28.4
%
(1) All other properties individually comprised less than 5.0% of the total unpaid principal balance
Key Loan Portfolio Metrics (1):
Loan count
16,652
12,932
3,720
28.8
%
Loan-to-value
65.2
%
66.6
%
(1.4
)%
(2.1
)%
Coupon
9.74
%
9.53
%
0.21
%
2.2
%
Portfolio yield (2)
9.47
%
9.34
%
0.13
%
1.4
%
Portfolio cost of debt (2)
6.23
%
6.14
%
0.09
%
1.5
%
Portfolio spread (2)
3.24
%
3.20
%
0.04
%
1.3
%
(1) Weighted averages, except for loan count
(2) Annualized
Loan Production Volumes
Three Months Ended December 31,
2025
2024
$ Variance
% Variance
($ in thousands)
Originations Including Unfunded Commitments:
Traditional commercial
$
322,096
$
320,306
$
1,790
0.6
%
Investor 1-4 rental
281,105
199,895
81,210
40.6
%
Short-term
29,595
38,675
(9,080
)
(23.5
)%
Government insured multifamily
1,818
4,607
(2,789
)
(60.5
)%
Total
$
634,614
$
563,483
$
71,131
12.6
%
Total HFI Portfolio Credit Performance
December 31,
2025
2024
Variance
% Variance
($ in thousands)
Key Nonperforming Loans Metrics:
Nonperforming loans UPB
$
554,540
$
539,438
$
15,102
2.8
%
Total UPB
$
6,491,338
$
5,055,937
$
1,435,401
28.4
%
Nonperforming loans UPB / Total UPB
8.5
%
10.7
%
(2.1
)%
(19.9
)%
CECL Portfolio Credit Performance
Three Months Ended December 31,
2025
2024
Variance
% Variance
($ in thousands)
Allowance for Credit Losses:
Beginning balance
$
4,586
$
4,851
$
(265
)
(5.5
)%
Provision for credit losses
1,954
22
1,932
8,781.8
%
Charge-offs
(2,019
)
(699
)
(1,320
)
(188.8
)%
Ending balance
$
4,521
$
4,174
$
347
8.3
%
Total UPB subject to CECL
$
2,013,514
$
2,400,720
(387,206
)
(16.1
)%
Nonperforming loans UPB subject to CECL
$
234,490
$
309,970
(75,480
)
(24.4
)%
Nonperforming loans UPB subject to CECL / Total UPB subject to CECL
11.6
%
12.9
%
(1.3
)%
(9.8
)%
Allowance for credit losses / Total UPB subject to CECL
0.22
%
0.17
%
0.05
%
29.1
%
Charge-offs / Total UPB subject to CECL
0.40
%
(1)
0.12
%
(1)
0.28
%
244.4
%
(1) Annualized
Real Estate Owned
Three Months Ended December 31,
2025
2024
$ Variance
% Variance
($ in thousands)
Gain (Loss) on REO:
Gain on transfer to REO
$
3,104
$
2,382
$
722
30.3
%
REO valuation loss, net
(6,990
)
(2,218
)
(4,772
)
(215.1
)%
Gain on sale of REO
203
3,411
(3,208
)
(94.0
)%
Total gain (loss) on REO
$
(3,683
)
$
3,575
$
(7,258
)
(203.0
)%
NPLs Resolution
Three Months Ended December 31, 2025
Total Nonperforming Loans
UPB
Default
Interest
Prepayment
Penalty
Net Gain
Regular
Accrued
Interest
Servicing
Advances
Write-Offs
Total
Recovered
($ in thousands)
Resolved — loans paid off
$
41,191
$
1,157
$
706
$
1,863
$
3,781
$
(435
)
$
5,209
Resolved — loans paid current
36,926
463
—
463
1,990
(26
)
2,427
Total resolutions
$
78,117
$
1,620
$
706
$
2,326
$
5,771
$
(461
)
$
7,636
Recovery rate
103.0
%
109.8
%
Three Months Ended December 31, 2024
Total Nonperforming Loans
UPB
Default
Interest
Prepayment
Penalty
Net Gain
Regular
Accrued
Interest
Servicing
Advances
Write-Offs
Total
Recovered
($ in thousands)
Resolved — loans paid off
$
41,936
$
1,085
$
896
$
1,981
$
4,951
$
(756
)
$
6,176
Resolved — loans paid current
27,364
172
12
184
1,112
(6
)
1,290
Total resolutions
$
69,300
$
1,257
$
908
$
2,165
$
6,063
$
(762
)
$
7,466
Recovery rate
103.1
%
110.8
%
Full-Year 2025 Results
Key Performance Indicators 2
Twelve Months Ended December 31,
2025
2024
Variance
% Variance
($ in thousands, except per share amounts)
Income before income tax
$
146,240
$
96,391
$
49,849
51.7
%
Net income
$
105,054
$
68,419
$
36,635
53.5
%
Diluted earnings per share
$
2.75
$
1.91
$
0.84
44.0
%
Core income before income tax
$
154,595
$
102,499
$
52,096
50.8
%
Core net income
$
110,987
$
72,871
$
38,116
52.3
%
Core diluted earnings per share
$
2.91
$
2.03
$
0.88
43.2
%
Net interest margin — portfolio related
3.61
%
3.56
%
0.05
%
1.5
%
Net interest margin — total company
3.19
%
3.03
%
0.16
%
5.3
%
Operating expense ratio
27.6
%
27.5
%
0.1
%
0.5
%
Average common equity
599,586
474,942
$
124,644
26.2
%
Pre-tax return on average equity
24.4
%
20.3
%
4.1
%
20.2
%
Core pre-tax return on average equity
25.8
%
21.6
%
4.2
%
19.5
%
Condensed Results of Operations
Twelve Months Ended December 31,
2025
2024
$ Variance
% Variance
(In thousands)
Net interest income
$
185,781
$
135,804
$
49,977
36.8
%
Provision for credit losses
5,805
1,173
4,632
394.9
%
Net interest income after provision
179,976
134,631
45,345
33.7
%
Other operating income
163,619
101,398
62,221
61.4
%
Net revenue
343,595
236,029
107,566
45.6
%
Operating expenses
197,355
139,638
57,717
41.3
%
Income before income taxes
146,240
96,391
49,849
51.7
%
Income tax expense
41,257
27,925
13,332
47.7
%
Net income
104,983
68,466
36,517
53.3
%
Net income (loss) attributable to noncontrolling interest
(71
)
47
(118
)
(251.1
)%
Net income attributable to Velocity Financial, Inc.
$
105,054
$
68,419
$
36,635
53.5
%
2 Core income before income tax, core net income, core diluted EPS and core pre-tax return on average equity are non-GAAP measures. Please see “Non-GAAP Financial Measures” and “Non-GAAP Financial Measure Reconciliations to GAAP Measures” at the end of this press release.
Loan Portfolio
Twelve Months Ended December 31,
2025
2024
$ Variance
% Variance
($ in thousands)
Originations Including Unfunded Commitments:
Traditional commercial
$
1,371,975
$
836,763
$
535,212
64.0
%
Investor 1-4 rental
1,134,736
771,130
363,606
47.2
%
Short-term
159,103
209,707
(50,604
)
(24.1
)%
Government insured multifamily
71,749
23,554
48,195
204.6
%
Total
$
2,737,563
$
1,841,154
$
896,409
48.7
%
CECL Portfolio Credit Performance
December 31,
2025
2024
Variance
% Variance
($ in thousands)
Allowance for Credit Losses:
Beginning balance
$
4,174
$
4,769
$
(595
)
(12.5
)%
Provision for credit losses
5,805
1,173
4,632
394.9
%
Charge-offs
(5,458
)
(1,768
)
(3,690
)
(208.7
)%
Ending balance
$
4,521
$
4,174
$
347
8.3
%
Total UPB subject to CECL
$
2,013,514
$
2,400,720
$
(387,206
)
(16.1
)%
Nonperforming loans UPB subject to CECL
$
234,490
$
309,970
$
(75,480
)
(24.4
)%
Nonperforming loans UPB subject to CECL / Total UPB subject to CECL
11.6
%
12.9
%
(1.3
)%
(9.8
)%
Allowance for credit losses / Total UPB subject to CECL
0.22
%
0.17
%
0.05
%
29.1
%
Charge-offs / Total UPB subject to CECL
0.27
%
0.07
%
0.20
%
268.1
%
1 Core net income and core diluted EPS are non-GAAP financial measures. Non-GAAP core adjustments include stock-based compensation expenses and costs related to the Company’s employee stock purchase plan. See “Non-GAAP Financial Measures” and “Non-GAAP Financial Measure Reconciliations to GAAP Measures” at the end of this press release for more information regarding the use of non-GAAP measures.
Real Estate Owned
December 31,
2025
2024
$ Variance
% Variance
($ in thousands)
Gain (Loss) on REO:
Gain on transfer to REO
$
15,653
$
8,704
$
6,949
79.8
%
REO valuation loss, net
(17,520
)
(6,121
)
(11,399
)
(186.2
)%
Gain on sale of REO
1,445
4,275
(2,830
)
(66.2
)%
Total gain (loss) on REO
$
(422
)
$
6,858
$
(7,280
)
(106.2
)%
NPLs Resolution
Twelve Months Ended December 31, 2025
Total Nonperforming Loans
UPB
Default
Interest
Prepayment
Penalty
Net Gain
Regular
Accrued
Interest
Servicing
Advances
Write-Offs
Total
Recovered
($ in thousands)
Resolved — loans paid off
$
151,900
$
4,991
$
2,669
$
7,660
$
13,631
$
(1,629
)
$
19,662
Resolved — loans paid current
179,646
1,706
13
1,719
8,776
(156
)
10,339
Total resolutions
$
331,546
$
6,697
$
2,682
$
9,379
$
22,407
$
(1,785
)
$
30,001
Recovery rate
102.8
%
109.0
%
Twelve Months Ended December 31, 2024
Total Nonperforming Loans
UPB
Default
Interest
Prepayment
Penalty
Net Gain
Regular
Accrued
Interest
Servicing
Advances
Recoveries
(Write-
Offs)
Total
Recovered
($ in thousands)
Resolved — loans paid off
$
120,508
$
2,535
$
2,246
$
4,781
$
12,534
$
(1,526
)
$
15,789
Resolved — loans paid current
132,845
1,108
28
1,136
5,372
2
6,510
Total resolutions
$
253,353
$
3,643
$
2,274
$
5,917
$
17,906
$
(1,524
)
$
22,299
Recovery rate
102.3
%
108.8
%
Other
Velocity’s executive management team will host a conference call and webcast on March 11, 2026, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to review Velocity’s 4Q25 and full-year 2025 financial results.
Webcast Information
The conference call will be webcast live in listen-only mode and can be accessed through the Events and Presentations section of the Velocity Financial Investor Relations website: https://www.velfinance.com/events-and-presentations. To listen to the webcast, please visit Velocity’s website at least 15 minutes before the call to register, download, and install any needed software. An audio replay of the call will also be available on Velocity’s website following the completion of the conference call.
Conference Call Information
To participate by phone, please dial in 15 minutes prior to the start time to allow for wait time to access the conference call. The live conference call will be accessible by dialing 1-833-316-0544 in the U.S. and Canada and 1-412-317-5725 for international callers. Callers should ask to join the Velocity Financial, Inc. earnings call.
A replay of the call will be available through midnight on March 27, 2026, and can be accessed by dialing 1-855-669-9658 in the U.S and Canada or 1-412-317-0088 internationally. The passcode for the replay is 4826570. The replay will also be available on the Investor Relations section of the Company's website under "Events and Presentations.”
About Velocity Financial, Inc.
Based in Westlake Village, California, Velocity is a vertically integrated real estate finance company that primarily originates and manages business purpose loans secured by 1-4 unit residential rental and small commercial properties. Velocity originates loans nationwide across an extensive network of independent mortgage brokers built and refined over 21 years.
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with United States generally accepted accounting principles (GAAP), the Company uses non-GAAP core net income, core income before income tax, core pre-tax return on average equity and core diluted EPS, which are non-GAAP financial measures.
Non-GAAP core net income and non-GAAP core diluted EPS are non-GAAP financial measures that represent our net income (loss) and net income (loss) per diluted share, adjusted to eliminate the effect of certain costs, costs incurred from activities that are not normal recurring operating expenses, and costs associated with acquisitions. To calculate non-GAAP core diluted EPS, we use the weighted average number of shares of common stock outstanding that is used to calculate net income per diluted share under GAAP. Non-GAAP core income before income tax is core net income before deducting income taxes. Non-GAAP core pre-tax return on average equity is core income before income tax divided by our average shareholders’ equity.
We have included non-GAAP core net income, non-GAAP core income before income tax, non-GAAP core pre-tax return on average equity and non-GAAP core diluted EPS because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that non-GAAP core net income, non-GAAP core income before income tax, non-GAAP core pre-tax return on average equity and non-GAAP core diluted EPS provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain items that we expect to be nonrecurring.
These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.
For more information on Core Net Income, please refer to the section of this press release below titled “Non-GAAP Financial Measure Reconciliations to GAAP Measures” at the end of this press release.
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 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 press release 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.
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
December 31,
2025
2024
ASSETS
Cash, cash equivalents, and restricted cash
$
249,237
$
70,830
Total loans, net
6,758,131
5,187,067
Accrued interest and receivables
202,477
160,088
Real estate owned, net
118,289
68,000
Other assets
53,379
41,423
Total assets
$
7,381,513
$
5,527,408
LIABILITIES
Accounts payable and accrued expenses
$
168,314
$
147,814
Secured financing, net
286,679
284,833
Securitized debt
5,942,326
4,226,464
Warehouse and repurchase facilities, net
308,506
348,082
Total liabilities
6,705,825
5,007,193
Commitments and contingencies
EQUITY
Stockholders' equity
672,535
516,944
Noncontrolling interest in subsidiary
3,153
3,271
Total equity
675,688
520,215
Total liabilities and equity
$
7,381,513
$
5,527,408
Diluted book value per share
$
17.19
$
14.26
Diluted shares at period end
39,297
36,469
Velocity Financial, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
December 31,
2025
September 30,
2025
December 31,
2024
Interest income
$
152,403
$
144,119
$
113,484
Interest expense - portfolio related
94,652
88,899
68,484
Net interest income - portfolio related
57,751
55,220
45,000
Interest expense - corporate debt
6,142
6,144
6,143
Net interest income
51,609
49,076
38,857
Provision for credit losses
1,954
381
22
Net interest income after provision for credit losses
49,655
48,695
38,835
Other operating income
Unrealized gain (loss) on fair value loans
21,129
30,982
(15,723
)
Unrealized gain (loss) on fair value securitized debt
800
(9,988
)
34,539
Origination fee income
6,644
9,723
7,245
Other income
24,676
6,360
6,269
Total other operating income
53,249
37,077
32,330
Operating expenses
Compensation and employee benefits
22,628
23,300
20,084
Loan servicing
9,448
7,748
6,748
Real estate owned, net
8,651
7,931
268
Other operating expenses
12,128
11,418
12,027
Total operating expenses
52,855
50,397
39,127
Income before income taxes
50,049
35,375
32,038
Income tax expense
15,296
9,963
11,233
Net income
34,753
25,412
20,805
Net income (loss) attributable to noncontrolling interest
(44
)
39
218
Net income attributable to Velocity Financial, Inc.
34,797
25,373
20,587
Less undistributed earnings attributable to unvested restricted stock awards
477
352
253
Net earnings attributable to common stockholders
$
34,320
$
25,021
$
20,334
Earnings per common share:
Basic
$
0.89
$
0.66
$
0.62
Diluted
$
0.89
$
0.65
$
0.57
Weighted average common shares outstanding:
Basic
38,378
38,073
32,771
Diluted
39,243
38,800
36,098
Velocity Financial, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Audited)
Twelve Months Ended December 31,
2025
2024
2023
Interest income
$
550,829
$
406,843
$
310,775
Interest expense - portfolio related
340,477
247,218
186,468
Net interest income - portfolio related
210,352
159,625
124,307
Interest expense - corporate debt
24,571
23,821
16,556
Net interest income
185,781
135,804
107,751
Provision for credit losses
5,805
1,173
1,915
Net interest income after provision for credit losses
179,976
134,631
105,836
Other operating income
Unrealized gain on fair value loans
116,853
55,857
47,850
Unrealized gain (loss) on fair value securitized debt
(30,454
)
2,581
(9,002
)
Origination fee income
33,982
24,007
12,450
Other income
43,238
18,953
14,612
Total other operating income
163,619
101,398
65,910
Operating expenses
Compensation and employee benefits
90,217
69,589
48,344
Loan servicing
33,409
22,388
17,631
Real estate owned, net
22,909
6,030
6,153
Other operating expenses
50,820
41,631
28,491
Total operating expenses
197,355
139,638
100,619
Income before income taxes
146,240
96,391
71,127
Income tax expense
41,257
27,925
18,834
Net income
104,983
68,466
52,293
Net income (loss) attributable to noncontrolling interest
(71
)
47
20
Net income attributable to Velocity Financial, Inc.
105,054
68,419
52,273
Less undistributed earnings attributable to unvested restricted stock awards
1,348
834
753
Net earnings attributable to common stockholders
$
103,706
$
67,585
$
51,520
Earnings per common share:
Basic
$
2.81
$
2.07
$
1.60
Diluted
$
2.75
$
1.91
$
1.52
Weighted average common shares outstanding:
Basic
36,850
32,653
32,206
Diluted
38,178
35,760
34,484
Velocity Financial, Inc.
Net Interest Margin - Portfolio Related and Total Company
($ in thousands)
Three Months Ended December 31,
2025
2024
Interest
Average
Interest
Average
Average
Income /
Yield /
Average
Income /
Yield /
Balance
Expense
Rate (1)
Balance
Expense
Rate (1)
Loan Portfolio:
Loans held for sale
$
359
$
3,145
Loans held for investment
6,433,855
4,855,794
Total loans
$
6,434,214
$
152,403
9.47
%
$
4,858,939
$
113,484
9.34
%
Debt:
Warehouse facilities
$
353,540
$
6,939
7.85
%
$
341,596
$
7,179
8.41
%
Securitized debt
5,726,298
87,713
6.13
%
4,117,512
61,305
5.96
%
Total debt - portfolio related
6,079,838
94,652
6.23
%
4,459,108
68,484
6.14
%
Corporate debt
290,000
6,142
8.47
%
290,000
6,143
8.47
%
Total debt
$
6,369,838
$
100,794
6.33
%
$
4,749,108
$
74,627
6.29
%
Net interest spread - portfolio related (2)
3.25
%
3.20
%
Net interest margin - portfolio related
3.59
%
3.70
%
Net interest spread - total company (3)
3.15
%
3.06
%
Net interest margin - total company
3.21
%
3.20
%
Annualized
Net interest spread — portfolio related is the difference between the rate earned on our loan portfolio and the interest rates paid on our portfolio-related debt
Net interest spread — total company is the difference between the rate earned on our loan portfolio and the interest rates paid on our total debt
Velocity Financial, Inc.
Net Interest Margin - Portfolio Related and Total Company
($ in thousands)
Twelve Months Ended December 31,
2025
2024
Interest
Average
Interest
Average
Average
Income /
Yield /
Average
Income /
Yield /
Balance
Expense
Rate
Balance
Expense
Rate
Loan Portfolio:
Loans held for sale
$
3,549
$
6,488
Loans held for investment
5,824,811
4,481,813
Total loans
$
5,828,360
$
550,829
9.45
%
$
4,488,301
$
406,843
9.06
%
Debt:
Warehouse facilities
$
401,320
$
31,976
7.97
%
$
295,936
$
26,790
9.05
%
Securitized debt
5,053,930
308,501
6.10
%
3,780,660
220,428
5.83
%
Total debt - portfolio related
5,455,250
340,477
6.24
%
4,076,596
247,218
6.06
%
Corporate debt
290,000
24,571
8.47
%
282,888
23,821
8.42
%
Total debt
$
5,745,250
$
365,048
6.35
%
$
4,359,484
$
271,039
6.22
%
Net interest spread - portfolio related (1)
3.21
%
3.00
%
Net interest margin - portfolio related
3.61
%
3.56
%
Net interest spread - total company (2)
3.10
%
2.85
%
Net interest margin - total company
3.19
%
3.03
%
Net interest spread — portfolio related is the difference between the rate earned on our loan portfolio and the interest rates paid on our portfolio-related debt
Net interest spread — total company is the difference between the rate earned on our loan portfolio and the interest rates paid on our total debt
Velocity Financial, Inc.
Non-GAAP Financial Measure Reconciliations to GAAP Measures
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2025
2024
2025
2024
Income before income tax
$
50,049
$
32,038
$
146,240
$
96,391
Equity award & ESPP expenses
2,131
1,644
8,284
6,155
Net income (loss) attributable to noncontrolling interest
(44
)
218
(71
)
47
Core income before income tax
$
52,224
$
33,464
$
154,595
$
102,499
Average common equity
651,352
498,887
599,586
474,942
Pre-tax return on average equity
30.7
%
(1)
25.7
%
(1)
24.4
%
20.3
%
Tax effect of equity award & ESPP expenses
1.3
%
(1)
1.3
%
(1)
1.4
%
1.3
%
Tax effect of net income (loss) attributable to noncontrolling interest
(0.0
)%
(1)
0.2
%
(1)
(0.0
)%
0.0
%
Core pre-tax return on average equity
32.1
%
26.8
%
25.8
%
21.6
%
Three Months Ended December 31,
Twelve Months Ended December 31,
2025
2024
2025
2024
Net income
$
34,797
$
20,587
$
105,054
$
68,419
Equity award & ESPP expenses
1,530
1,167
5,933
4,452
Core net income
$
36,327
$
21,754
$
110,987
$
72,871
Diluted weighted average common shares outstanding
39,243
36,097
38,178
35,760
Core diluted earnings per share
$
0.93
$
0.60
$
2.91
$
2.03