VEL · Velocity Financial, Inc.

Velocity Financial delivered strong Q1 2026 results with GAAP net income of $22.4 million, up 18.4% year-over-year, and core net income of $26.5 million, reflecting 30.8% growth after adjusting for stock-based compensation and employee stock purchase plan costs. Diluted EPS rose to $0.57 from $0.51, with core EPS at $0.68 versus $0.55 prior year. President and CEO Chris Farrar highlighted impressive earnings driven by higher portfolio net interest income and noninterest income from portfolio growth and new production, amid strong financing demand in commercial and 1-4 family rental markets. Net interest income after provision climbed 18.6% to $42.3 million, fueled by portfolio expansion and NPL interest recoveries, while other operating income surged 28.4% to $43.0 million from net unrealized gains on fair value instruments. The loan portfolio reached $6.8 billion UPB, up 25.4%, with balanced growth across investor 1-4 (14.4%), retail (41.5%), and office (44.0%) segments. Portfolio NIM expanded 21 bps to 3.56% due to rate discipline, with average coupons on recent production at 10.28%. Production held steady at $639.4 million, shifting toward traditional commercial (up 17.4%). Credit metrics improved with NPLs at 10.1% of HFI loans (down from 10.8%), resolutions of $70.1 million UPB yielding 102.3% recovery, and CECL reserve at 0.25%. Operating expenses rose 28.8% to $54.3 million from professional fees ($5.8 million, tied to M&A due diligence), compensation ($23.5 million for headcount growth), and securitization costs from two $513.8 million deals. Diluted book value per share hit $17.75, up 19.4%. No forward guidance provided; conference call scheduled for May 6, 2026.