Loan Portfolio and Performance - As of September 30, 2024, the company's loan portfolio totaled $4.8 billion, with an average loan balance of approximately $388.5 thousand[109]. - The annualized yield on the total portfolio for the three months ended September 30, 2024, was 9.18%[109]. - The portfolio-related net interest margin increased to 3.60% for the three months ended September 30, 2024, compared to 3.34% for the same period in 2023[109]. - Total loans originated in Q3 2024 reached $476.775 million, an increase from $422.226 million in Q2 2024 and $290.581 million in Q3 2023[122]. - The net loans held for investment as of September 30, 2024, amounted to $4.881 billion, up from $4.134 billion as of September 30, 2023[123]. - The weighted average loan-to-value ratio at origination was 67.0% as of September 30, 2024[121]. - The weighted average coupon for loans held for investment was 10.85% in Q3 2024, compared to 11.03% in Q2 2024[122]. - The average loan size for loans held for investment in Q3 2024 was $388,000, compared to $381,000 in Q2 2024[122]. Income and Expenses - For the three months ended September 30, 2024, the company generated pre-tax income of $21.2 million and net income of $15.8 million[109]. - Net income for the three months ended September 30, 2024, was $15,617 thousand, up from $12,169 thousand in the same period last year, representing a growth of 28.5%[150]. - Total operating expenses were $34.61 million for the three months ended September 30, 2024, compared to $27.33 million for the same period in 2023[160]. - Interest income increased by $25.98 million to $105.07 million for the three months ended September 30, 2024, compared to $79.09 million for the same period in 2023, primarily due to higher portfolio balances and average loan yield[161]. - Other operating income increased to $20.73 million for the three months ended September 30, 2024, from $17.36 million for the same period in 2023[160]. Nonperforming Loans and Credit Losses - Nonperforming loans as of September 30, 2024, amounted to $503.9 million, representing 10.6% of total loans[121]. - Nonperforming loans represented 12.5% of total UPB as of September 30, 2024, compared to 11.8% as of September 30, 2023[129]. - The allowance for credit losses as of September 30, 2024, was $4.9 million, compared to $4.7 million as of September 30, 2023, reflecting an increase in the individually-assessed component of the reserve[128]. - The charge-offs for Q3 2024 were $1.069 million, with a charge-off rate of 0.06% of total UPB for the nine months ended September 30, 2024[126]. - The recovery rate on resolved nonperforming loans was 103.0% for Q3 2024, compared to 101.1% for Q2 2024 and 102.1% for Q3 2023[132]. Debt and Financing - The company executed thirty-five securitized debt transactions, resulting in over $7.4 billion in gross debt proceeds from May 2011 through September 30, 2024[109]. - In February 2024, the company issued $75.0 million principal amount of five-year Senior Secured Notes bearing interest at 9.875%[110]. - Total debt for the company reached $4,442,040 thousand, an increase from $3,594,611 thousand year-over-year, indicating a growth of 23.6%[143]. - The total outstanding borrowings as of September 30, 2024, amounted to $3.86 billion, an increase from $3.34 billion as of December 31, 2023[180]. - The company entered into a five-year $215.0 million syndicated corporate debt agreement in March 2022, bearing interest at a fixed rate of 7.125%[182]. Market Conditions and Risks - The company operates in a highly fragmented market with substantial demand for financing and limited supply of institutional financing alternatives[109]. - The company anticipates continued economic challenges, including rising unemployment and geopolitical tensions, impacting future credit loss estimates[127]. - The primary market risk for the company is interest rate volatility, which impacts income and expenses recorded on assets and liabilities[187]. - Forward-looking statements regarding the company's future performance and strategies are subject to risks and uncertainties[186]. Cash and Liquidity - Cash and cash equivalents totaled $44.1 million as of September 30, 2024, up from $29.4 million in the same period last year[174]. - The total liquidity, including available warehouse capacity, was $442.1 million as of September 30, 2024[174]. - The company reported a net cash provided by operating activities of $4.5 million for the nine months ended September 30, 2024, down from $22.7 million for the same period in 2023[175].

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Core Viewpoint - The article emphasizes the importance of value investing and highlights Velocity Financial (VEL) as a strong value stock based on its financial metrics and Zacks Rank [2][4][7] Company Metrics - Velocity Financial (VEL) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4][7] - VEL's Forward P/E ratio is 10.17, significantly lower than the industry's average of 24.59, suggesting it may be undervalued [4] - The stock's Forward P/E has fluctuated between 7.14 and 11.88 over the past year, with a median of 10 [4] Valuation Ratios - VEL has a Price-to-Book (P/B) ratio of 1.38, which is favorable compared to the industry's average P/B of 2.41, indicating solid market value relative to book value [5] - The P/B ratio for VEL has ranged from 0.85 to 1.39 in the past year, with a median of 1.24 [5] - The Price-to-Cash Flow (P/CF) ratio for VEL is 9.01, well below the industry's average of 20.58, further supporting the notion of undervaluation [6] - VEL's P/CF has varied between 5.68 and 9.30 over the past year, with a median of 7.97 [6] Investment Outlook - The combination of VEL's favorable financial metrics and strong earnings outlook positions it as a compelling value stock in the current market [7]

Core Viewpoint - Velocity Financial (VEL) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - For Velocity Financial, the rising earnings estimates and the rating upgrade suggest an improvement in the company's underlying business, likely leading to an increase in stock price [5][10]. Earnings Estimate Revisions - For the fiscal year ending December 2024, Velocity Financial is expected to earn $1.91 per share, reflecting a 24% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Velocity Financial has increased by 13%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Velocity Financial to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Financial Data and Key Metrics Changes - The company reported a 41% increase in net revenue year-over-year, leading to a 23% increase in core earnings, reaching $0.45 per share for the quarter [4][6] - The net interest margin (NIM) widened by 30 basis points compared to Q2 2023, reflecting improved spreads from new originations [6][12] - Total loan production for Q2 was $422 million in UPB, representing an 11.5% increase from Q1 and a 63% increase from Q2 2023 [10][4] Business Line Data and Key Metrics Changes - The total loan portfolio grew to nearly $4.5 billion, a 4.6% increase from Q1 and over 20% year-over-year [11] - The weighted average coupon for new originations remained stable at 11%, while the portfolio's weighted average coupon increased to 9.25% [10][11] - Non-performing loans (NPL) slightly increased to 10.5%, but the company continues to see positive resolutions on these loans [13][7] Market Data and Key Metrics Changes - The real estate market remains strong, with continued demand for financing from borrowers, as banks are constrained [6][4] - The company issued two securitizations in Q2, totaling approximately $491 million, which were well-received by bond investors [15][5] Company Strategy and Development Direction - The company is executing its 5x25 growth strategy, aiming to reach $5 billion in UPB by 2025 [6] - The management emphasizes maintaining credit standards while capitalizing on market opportunities, particularly in an underserved niche [24][4] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing healthy market conditions and expectations for continued positive NPL resolutions [15][16] - The company is prepared to adjust rates in response to market changes, maintaining a focus on spread management [25][24] Other Important Information - The company reported a net gain of over $2 million from REO activities during the quarter, compared to a slight net loss in Q1 [14] - Total liquidity at the end of Q2 was just under $84 million, with significant warehouse capacity available for future growth [15][14] Q&A Session Summary Question: Outlook on loan production levels - Management expects production levels for the remainder of the year to be similar to Q2, indicating a stable outlook [17][19] Question: Update on adjusted book value and fair value mark - Management indicated that there would likely be a positive change in the fair value mark if assessed today, influenced by recent rate drops [19] Question: Competition from banks in the market - Management noted that banks remain constrained and are not significantly competing for borrowers, allowing the company to maintain its market position [20] Question: Relationship with brokers and market presence - Management affirmed that their strong relationships with brokers and borrowers contribute to their consistent production and market presence [23] Question: Impact of potential rate cuts on loan rates - Management acknowledged that they would adjust rates in response to market changes but would maintain their spread [25] Question: Operational capacity for loan origination - Management believes they have excess capacity to increase loan production by 10% to 20% without significantly increasing costs [27] Question: Return on equity (ROE) from securitization - Management estimates ROEs are above 25% at current levels, with potential increases if spreads tighten [28]

Investor 1-4 Mixed-Use Multi-Family Commercial > 2Q24 Results Presentation August 1, 2024 Forward-looking statements Some of the statements contained in this presentation may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, projections, plans and strategies, positioning, anticipated events or trends, and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looki ...

Exhibit 99 Second Quarter Highlights: Investors and Media: Chris Oltmann (818) 532-3708 Velocity Financial, Inc. Reports Second Quarter 2024 Results • Net income of $14.7 million, up 21.3% from $12.2 million for 2Q23. Diluted EPS of $0.42, up $0.06 from $0.36 per share for 2Q23 • Core net income (1) of $15.9 million, an increase of 23.1% from $12.9 million for 2Q23. Core diluted EPS(1) of $0.45, up from $0.38 per share for 2Q23 • Loan production of $422.2 million in UPB, an 11.5% and 63.2% increase from 1Q2 ...

Velocity Financial (VEL) came out with quarterly earnings of $0.45 per share, beating the Zacks Consensus Estimate of $0.43 per share. This compares to earnings of $0.38 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 4.65%. A quarter ago, it was expected that this company would post earnings of $0.40 per share when it actually produced earnings of $0.51, delivering a surprise of 27.50%. Over the last four quarters, the compa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Common stock, par value $0.01 per share VEL The New York Stock Exchange FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _____ Commission File Number: 001-39183 | --- | --- | |------------------------ ...

Exhibit 99 Investors and Media: Chris Oltmann (818) 532-3708 Velocity Financial, Inc. Reports First Quarter 2024 Results First Quarter Highlights: Westlake Village, CA – May 2, 2024 – Velocity Financial, Inc. (NYSE: VEL) (Velocity or the Company), a leader in business purpose loans, reported net income of $17.3 million and core net income of $18.2 million for 1Q24, compared to net income of $10.6 million and core net income of $11.4 million for 1Q23. Earnings and core earnings per diluted share were $0.49 a ...