Velocity Financial (VEL) investor relations material

Executive summary

• Pretax income rose 3.9% year-over-year to $35.2 million, while net income declined 3.2% to $25.2 million due to a higher effective tax rate.

• Core net income increased 1.4% to $27.9 million, with core diluted EPS at $0.71, down from $0.73 in 2Q25.

• Loan portfolio reached $7.0 billion UPB, up 19.2% year-over-year, driven by traditional commercial properties.

• Nonperforming loans as a percentage of HFI loans decreased to 9.6% from 10.3% a year ago.

• Completed significant securitizations, including the 2026-MC2, and issued $500 million in unsecured senior notes, strengthening long-term funding.

Financial highlights

• Portfolio net interest margin was 3.66% for Q2 2026, down from 3.82% in Q2 2025 but above the 3.5% target.

• Diluted book value per share increased to $18.43 from $15.62 year-over-year.

• Loan production for Q2 2026 was $672.6 million, down 7.3% year-over-year but unit production rose 3.3%.

• Core pre-tax ROE for Q2 2026 was 21.8%.

• Liquidity stood at $240 million, with $76.1 million in cash and $163.9 million in available borrowings.

Outlook and guidance

• Origination volumes expected to increase in the second half of 2026, with portfolio growth anticipated to accelerate.

• NIM expected to remain above 3.5% for the remainder of the year and into 2027.

• Management expects continued market uncertainty due to macroeconomic and geopolitical factors but remains confident in sustaining profitable growth.