Velocity Financial, Inc. (VEL) SEC Filings & Earnings Calls

Elevated Nonperforming Loans

“Nonperforming loans were $673.3 million, or 9.6% of our held for investment loan portfolio as of June 30, 2026.” · word for word

Geopolitical and Macroeconomic Uncertainty

“Management concluded that applying the severe stress scenario was appropriate and reflected the economic uncertainties due to the ongoing conflict in Iran, unstable labor market, and softening economic conditions.” · word for word

Increased Operating Expenses

“Total operating expenses increased to $59.8 million from $51.9 million for the three months ended June 30, 2026 and 2025, respectively.”

GAAP net income declined 3.2% due to higher effective tax rate, while core net income grew only 1.4%

“Net income $25.2M vs $26.0M; core net income $27.9M vs $27.5M”

Portfolio NIM decreased 16bps YoY, partly due to lower nonperforming loan cash receipts

“Portfolio NIM 3.66% vs 3.82%”

Operating expenses grew 15.1% YoY, outpacing net revenue growth of 10.7%

“Operating expenses $59.8M vs $51.9M; net revenue $95.0M vs $85.8M”

Rising Nonperforming Loans

“Nonperforming loans were $692.1 million, or 10.1% of our held for investment loan portfolio as of March 31, 2026, compared to $554.5 million, or 8.5% as of December 31, 2025” · word for word

Geopolitical and Macroeconomic Uncertainty

“Management concluded that applying the severe stress scenario was appropriate and reflected the economic uncertainties due to the recent Iran War and unstable labor market conditions.” · word for word

Nonperforming loans (NPL) at 10.1% of HFI loans, though down from 10.8% YoY.

“Nonperforming loans (NPL) as a % of HFI loans were 10.1% as of March 31, 2026, down from 10.8% as of March 31, 2025” · word for word

Operating expenses increased 28.8% YoY, driven by higher professional fees related to M&A due diligence and headcount growth.

“Operating expenses $54.3M vs $42.2M; professional fees $5.8M vs $1.8M.”

NPL ratio remains elevated at 10.1%, though improved from 10.8%.

“NPL as % of HFI loans 10.1%.”

Concentration in Investor Loans

“Our success in 2025 was driven by our unique ability to grow market share in the underserved investor loan market” · word for word

Cybersecurity Risk

“We recognize that the risks and impacts of cyber based attacks are significant and increasing.” · word for word

Provision for credit losses increased significantly to $1.95M from $22K, driven by portfolio growth and potential credit normalization.

“Provision for credit losses 1,954 22 1,932 8,781.8%” · word for word

REO expense increased sharply to $8.7M from $0.3M, driven by valuation adjustments on real estate owned.

“REO, net expense was $8.7 million compared to $0.3 million for 4Q24, driven mainly by valuation adjustments” · word for word

Interest Rate Risk

“In a period of rising interest rates, our interest expense on floating rate debt would increase, and it is possible that any additional interest income we earn on our floating rate investments may not compensate for such increase in interest expense.” · word for word

Credit Risk from Nonperforming Loans

“Nonperforming loans were $554.5 million, or 8.5% of our held for investment loan portfolio as of December 31, 2025” · word for word

Funding/Liquidity Risk

“Our substantial indebtedness could adversely affect our financial condition and impair our ability to operate our business.” · word for word

Concentration Risk

“Geographically, the principal balance of our loans held for investment were concentrated 20.3% in California, 13.8% in New York, 12.0% in Florida” · word for word

NPL ratio remains elevated but improving; credit risk manageable.

“NPL ratio 8.5% as of Dec 31, 2025, down from 10.7% a year ago.”

Increased leverage from new debt issuance; no details on terms or amount in excerpt.

“Issuance of notes; no specific terms or amounts disclosed in the excerpt.”

Market and economic conditions could impact offering completion.

“risks related to market and other general economic conditions” · word for word

Preliminary results subject to completion of closing procedures

“preliminary and subject to completion of financial and operating closing procedures” · word for word

No financial metrics disclosed; compensation structure may incentivize short-term earnings growth

“Compensation tied to Core Net Income Annual Growth; no other metrics mentioned”

No material risk; routine portfolio management

Credit risk remains elevated but improving; NPL ratio declining.

“NPL ratio 9.8% vs 10.6% YoY; NPA resolutions realized gains of 102.6% of UPB.”

NPL ratio remains elevated at 9.8% despite improvement.

“Nonperforming loans (NPL) as a percentage of Held for Investment (HFI) loans was 9.8%.” · word for word

Operating expenses grew 45.6% YoY, driven by compensation and securitization costs.

“Operating expenses totaled $50.4 million, an increase of 45.6% from 3Q24.” · word for word

Nonperforming loan increase

“Nonperforming loans were $614.2 million, or 9.8% of our held for investment loan portfolio as of September 30, 2025, compared to $601.8 million, or 10.3% as of June 30, 2025, and $503.9 million, or 10.6% as of September 30, 2024.” · word for word

REO expense increase

“Net expenses of real estate owned increased to $7.9 million for the three months ended September 30, 2025 from $2.0 million for the three months ended September 30, 2024.” · word for word

Macroeconomic uncertainty

“Management concluded that applying the severe stress scenario was appropriate and reflected the uncertainties of a volatile market in light of the economic uncertainties surrounding tariffs and federal government layoffs and prolonged shutdown, contributing to a forecasted decreasing GDP and rising unemployment.” · word for word