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 ...

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 ...

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 ...

Financial Data and Key Metrics Changes - The core EPS reached an all-time high of $0.51 per share, driven by fair value gains from new originations and net interest margin improvements [25][31] - Total loan portfolio as of March 31 was nearly $4.3 billion, reflecting a 5.1% increase from Q4 of the previous year and over a 19% increase year-over-year [9][70] - Nonperforming loan (NPL) rate at the end of Q1 was 10.1%, up from 9.7% in Q4 of last year and 8.7% year-over-year [10][71] - Total liquidity as of March 31 was approximately $79 million, consisting of about $35 million in cash and cash equivalents and $44 million in available liquidity [11][29] Business Line Data and Key Metrics Changes - Loan production for Q1 was almost $379 million in UPB, a 7.5% increase from $352 million in Q4 and nearly a 75% increase year-over-year [69][86] - The weighted average coupon on the total portfolio as of March 31 was 9.07%, which is 19 basis points higher than the end of last year and 92 basis points higher year-over-year [70] - The CECL Loan Loss Reserve as of March 31 was $5.3 million, or 19 basis points of the outstanding non-fair value loans held for investment portfolio, within the expected range of 15 to 20 basis points [29] Market Data and Key Metrics Changes - The securitization market remains supportive, with spreads tightening more than the rise in base rates, leading to improved execution in the company's second deal in April [5][30] - The company issued a record $2 billion worth of Letters of Intent (LOIs) in April, with the highest number of new applications in over two years at just under $400 million in combined UPB [6][69] Company Strategy and Development Direction - The company aims to increase its portfolio to $5 billion in UPB by 2025, supported by strong liquidity and capital retention strategies [87] - The management is focused on taking market share while maintaining healthy margins and deploying capital efficiently [75][67] - The company is targeting larger metropolitan statistical areas (MSAs) for its portfolio strategy, avoiding rural and tertiary markets to ensure quicker asset turnover [35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing healthy employment levels and a stable economy as positive indicators [73][31] - The company is seeing increased demand as banks tighten lending, allowing it to capture more market share [14][5] - Management noted that the delinquency rates will largely depend on the overall economy moving forward [75] Other Important Information - The company completed a $75 million five-year senior secured note in February to support growth [30] - The average loan-to-value ratio for the portfolio declined slightly to 67.6% as of March 31, compared to 67.8% at the end of the previous year [70] Q&A Session Summary Question: Trends on REO sales and exiting assets at a gain - Management indicated that they are disciplined in pricing REOs to avoid distressed perceptions, which helps in achieving better recovery rates [83] Question: Comfort level with liquidity position - Management expressed confidence in their liquidity position of around $80 million, indicating strong visibility well into the next year [49][40] Question: Growth in broker relationships - The company is actively growing its number of approved brokers, currently having over 2,000 and adding to that list quarterly [100]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 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 March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Identification No.) Registrant's telephone number, including area code: (818) 532-3700 Securities registered pursuant to Section 12(b) of the Act: | | Trading | | | --- | --- | --- | | Title ...

Production Volume Continues Strong Growth Trend $116.3 $163.1 $154.3 $183.2 $167.1 $79.7 $73.5 $97.5 $130.3 $166.6 $20.9 $22.1 $38.8 $38.6 $45.0 $217.0 $258.6 $290.6 $352.1 $378.7 1Q23 2Q23 3Q23 4Q23 1Q24 Investor 1-4 Rental Traditional Commercial Short-term Loan Products ($ of UPB in millions) Loan Portfolio $265.0 $276.3 $390.8 1Q23 4Q23 1Q24 Investor 1-4 Rental Mixed Use Multifamily – Driven by growth in loans collateralized by Inv. 1-4 Rental and "Other" Commercial properties | --- | --- | --- | --- | | ...

Loan Originations and Portfolio - The company originated 2,955 loans totaling $1.1 billion for investment in 2023, compared to 4,135 loans totaling $1.7 billion in 2022[45]. - The company funded 2,930 loans sourced by 1,046 different mortgage brokers in 2023, representing a small portion of the approximately 885,933 state-licensed mortgage originators in the U.S.[41]. - The primary product, a 30-year fixed-rate amortizing term loan, comprised 90.0% of loan originations in 2023, reflecting strong market demand[42]. - Total loans increased to $4,072.9 million in 2023 from $3,512.5 million in 2022, representing a growth of 16.0%[120]. - Total loan originations for 2023 were $1,117.8 million, a decrease of $644.0 million or 36.6% from $1,761.9 million in 2022[125]. - The company originated 2,965 loans in 2023, a decrease from 4,135 loans in 2022[125]. Loan Portfolio Performance - As of December 31, 2023, the company's portfolio of loans held for investment totaled $4.1 billion in unpaid principal balance, with an average loan balance of approximately $389,000[45]. - The weighted average loan-to-value (LTV) ratio at origination for loans held for investment was 67.7%, with borrower equity providing significant protection against credit losses[47]. - The loan portfolio totaled $4.1 billion with an average loan balance of approximately $389,000 and a weighted average loan-to-value ratio of 67.8%[79]. - Nonperforming loans increased to $394.6 million, accounting for 9.69% of total loans in 2023, up from 8.34% in 2022[120]. - As of December 31, 2023, nonperforming loans totaled $394.6 million, representing 9.7% of the held for investment loan portfolio, an increase from $292.8 million (8.3%) in 2022[134]. - The allowance for loan losses decreased to $4.8 million in 2023 from $4.9 million in 2022[128]. - The allowance for loan losses is maintained at a level deemed adequate by management to provide for expected losses in the portfolio at the balance sheet date[99]. Financial Performance - The company generated pre-tax income of $71.1 million and net income of $52.3 million for the year ended December 31, 2023[81]. - Net income rose to $52,293,000 in 2023, up from $32,519,000 in 2022, marking a growth of 60.9%[162]. - Earnings per common share increased to $1.60 for 2023, up from $0.99 in 2022[182]. - Interest income increased by $70.4 million, or 29.3%, to $310.8 million for the year ended December 31, 2023, compared to $240.3 million for 2022[184]. - Net interest income after provision for loan losses increased by 29.1% over the prior year, driven by higher net interest income[189]. - The company grew its portfolio-related net interest income by $11.7 million or 10.4%, from $112.6 million in 2022 to $124.3 million in 2023, primarily due to new loan originations[112]. Securitization Activities - The company executed 31 securitizations of investor real estate loans, issuing $6.4 billion in principal amount of securities from 2011 to 2023[30]. - In August 2023, the company completed its first securitization collateralized by its short-term loan product, issuing $81.6 million in securities[51]. - In January 2024, the company completed the securitization of $221.1 million of investor real estate loans and issued $75 million principal amount of five-year Senior Secured Notes at an interest rate of 9.875%[88]. Operating Expenses and Management - Total operating expenses increased by 62.9%, or $38.9 million, to $100.6 million during the year ended December 31, 2023, from $61.8 million in 2022[195]. - Compensation and employee benefits increased from $30.5 million in 2022 to $48.3 million in 2023, a rise of 58.7% driven by fair value option accounting on new loan originations[197]. - Origination expenses decreased significantly from $4.0 million in 2022 to $0.5 million in 2023, a reduction of 87.0% due to improved cost management[198]. - Loan servicing expenses rose from $12.3 million in 2022 to $17.6 million in 2023, an increase of 43.4% due to a larger loan portfolio[200]. Market Conditions and Competitive Landscape - The investor real estate loan market is highly competitive, impacting the company's profitability and growth, with competitors potentially offering more favorable rates and terms[114]. - The company anticipates that future performance will depend on growing origination/acquisition volume, leveraging its existing broker network while expanding with new brokers[112]. Debt and Interest Management - 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%[51]. - Corporate debt interest expense decreased to $16,556,000 in 2023 from $29,472,000 in 2022, indicating improved cost management[167]. - Total debt increased to $3,556,411,000 in 2023 from $2,956,801,000 in 2022, reflecting a growth of 20.3%[159]. - Cost of funds for the portfolio increased to 5.58% in 2023 from 4.64% in 2022, indicating rising borrowing costs[154]. Employee and Organizational Growth - As of December 31, 2023, the company had a total of 253 employees, reflecting a 30% increase from the prior year[58].

Financial Data and Key Metrics Changes - The company reported a core net income increase of 77% year-over-year, marking a record quarter and the best year in its history [32][38] - The total loan portfolio reached $4.1 billion, a 5% increase from Q3 and a 16% increase year-over-year [11][12] - The net interest margin (NIM) increased by 18 basis points from Q3 and 68 basis points year-over-year, reflecting strong growth in originations and improved portfolio yield [13][36] Business Line Data and Key Metrics Changes - Loan production for Q4 was over $352 million, a 21% increase from $290 million in Q3 and a nearly 27% increase year-over-year [9][10] - The weighted average coupon for new originations remained constant at 11% throughout the year, with a weighted average loan-to-value (LTV) ratio of 65% in the last six months of 2023 [10][12] Market Data and Key Metrics Changes - The company noted that banks continue to be constrained in extending credit, which has allowed it to grow its portfolio with compelling risk-adjusted spreads [33][36] - The securitization market showed improvement, benefiting from lower base rates and tighter spreads, leading to a significant decrease in the cost of funds [35][36] Company Strategy and Development Direction - The company aims to grow its portfolio to at least $5 billion by 2025, focusing on delivering value to customers and shareholders [37][23] - The management emphasized the importance of maintaining credit discipline while pursuing growth opportunities [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market position, expecting strong demand and favorable asset resolutions in 2024 [22][23] - The company highlighted the ongoing stress in some segments of the larger commercial real estate markets but noted healthy demand in its niche [33][36] Other Important Information - The company completed a securitization deal in Q4 and issued $75 million of senior secured notes to support growth [20][21] - The nonperforming loan (NPL) rate decreased to 9.7% from 10.1% at the end of Q3, reflecting successful collection efforts [14][15] Q&A Session Summary Question: Outlook for production and funding in 2024 - Management indicated that production is expected to grow, with a mix of 1 to 4 family loans dominating, and they plan to securitize every 2 to 3 months [25][45] Question: Thoughts on the Century acquisition and fee income - Management expects significant fee income from the Century acquisition in the second half of the year, with a pipeline nearly 4 times larger than last year [26] Question: Risk management perspective on loan growth - Management emphasized the importance of maintaining credit discipline and not sacrificing margins for volume [48][49] Question: Expectations for quarterly production numbers - Management did not provide exact guidance but expected growth throughout the year, consistent with previous trends [51] Question: Capital growth support from recent fundraising - The recent capital raise provides a long runway for growth ambitions, with retained earnings also fueling expansion [52] Question: Success in asset resolution and delinquency management - Management attributed success to disciplined underwriting and a talented asset management team, with favorable resolution times varying by state [69][70]