VEL · Velocity Financial, Inc.

Velocity Financial delivered strong Q1 2026 results with GAAP net income rising 18.4% to $22.4 million and core net income surging 30.8% to $26.5 million, driven by portfolio net interest margin expansion to 3.56% from 3.35% year-over-year. This NIM improvement stemmed from a 12 bps increase in portfolio yield due to rate discipline on new production and a 14 bps decline in cost of funds, aided by the $500 million unsecured corporate debt issuance that repaid $215 million of secured debt and reduced warehouse utilization. Loan production held steady at $639.4 million with 11.2% unit growth despite smaller average loan sizes, supporting robust portfolio expansion to $6.8 billion UPB, up 25.4%. Credit quality improved with NPLs at 10.1% of HFI loans, down from 10.8%, and NPL resolutions yielding 106.5% recovery of principal resolved. REO activity generated net gains, with $6.8 million on new REO offsetting losses on existing holdings. Financing activity was robust, including two securitizations totaling $513.8 million and optimized recourse debt to equity of 1.0x from 1.5x. Management highlights ongoing rate discipline to sustain ~3.5% NIM target, strong portfolio growth, and constructive securitization markets, positioning for continued earnings growth and book value accretion to $17.75 per diluted share.