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, 2023 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 Velocity Financial, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 46-0659719 (State or ...

Financial Performance - Interest income for the year ended December 31, 2022, was $240.3 million, an increase of 32% from $182.0 million in 2021[81] - Net interest income after provision for loan losses was $82.0 million in 2022, compared to $76.3 million in 2021, reflecting a growth of 7%[81] - Net income attributable to Velocity Financial, Inc. for 2022 was $32.2 million, up from $29.2 million in 2021, reflecting an increase of 10%[81] - The company generated income before income taxes of $44.6 million and net income of $32.5 million for the year ended December 31, 2022[87] - Portfolio related net interest income increased by $16.0 million or 16.7%, from $96.6 million in 2021 to $112.6 million in 2022[119] - Net income for 2022 was $32,519 thousand, an increase from $29,224 thousand in 2021, representing an 7.8% growth[169] - Earnings per common share increased to $0.99 in 2022 from $0.90 in 2021[186] Loan Portfolio - The total loan portfolio as of December 31, 2022, amounted to $3.5 billion, with an average loan balance of approximately $395,000[85] - Total loans (UPB) rose to $3.51 billion in 2022, up from $2.59 billion in 2021, representing a growth of 35.7%[127] - Total loan originations for 2022 reached $1.76 billion, an increase of $435.6 million or 32.8% from $1.33 billion in 2021[132] - Nonperforming loans (UPB) decreased to $292.8 million, accounting for 8.34% of total loans, down from 10.56% in 2021[127] - Total loans held for investment (UPB) rose to $3,243,854,000 in 2022, up from $2,498,466,000 in 2021, indicating a growth of approximately 29.8%[139] - The weighted average loan-to-value (LTV) ratio at origination for the loan portfolio was 68.2%, with investor 1-4 loans representing 52.7% of the total unpaid principal balance (UPB)[85] - The weighted average loan-to-value ratio improved to 68.2% in 2022 from 67.7% in 2021, indicating better borrower equity[127] Expenses and Costs - Total operating expenses increased by 33.6%, or $15.0 million, to $59.7 million in 2022 from $44.7 million in 2021[198] - Compensation and employee benefits rose by 58.7% to $30.5 million in 2022, attributed to higher commission expenses from increased loan originations[199] - Interest expense related to the portfolio increased by $42.3 million, or 49.4%, to $127.7 million in 2022, primarily due to an increase in the loan portfolio[187] - Income tax expense increased to $12.0 million in 2022 from $10.6 million in 2021, with an effective tax rate of 27.2% compared to 26.6% in the previous year[204] Securitization and Debt - The company has executed 25 securitizations, issuing $5.4 billion in principal amount of securities from May 2011 through December 2022[86] - The company entered into a five-year $215.0 million syndicated corporate debt agreement on March 15, 2022, with a fixed interest rate of 7.125%[254] - Total debt for the company reached $2,956,801 thousand in 2022, up from $1,968,938 thousand in 2021, marking a 50.2% increase[161] - As of December 31, 2022, borrowings under warehouse facilities amounted to $331.7 million, with $500.1 million of available capacity remaining[232] Credit Quality - The allowance for loan losses increased to $4.9 million as of December 31, 2022, from $4.3 million in 2021, reflecting the growth in loans held for investment[134] - The allowance for credit losses increased to $4,893,000 as of December 31, 2022, from $4,262,000 in 2021, reflecting a provision for loan losses of $1,152,000[139] - The company resolved $142.2 million of nonperforming loans in 2022, with a recovery rate on resolved nonperforming UPB of 106.7%[143] - Charge-offs ratio improved to 0.02% in 2022 from 0.08% in 2021, indicating better credit quality[166] Market Conditions and Strategy - The operational and financial performance of the company is influenced by market developments, including the impact of the COVID-19 pandemic and macroeconomic conditions[96] - The investor real estate loan market remains highly competitive, impacting profitability and growth potential[121] - The company plans to expand its broker network and enhance brand awareness to drive future loan originations[119] - The transition from LIBOR to SOFR is expected to occur before June 30, 2023, with no material adverse effect anticipated on funding costs[123] Liquidity and Cash Flow - Total liquidity as of December 31, 2022, was $559.3 million, consisting of $45.2 million in cash and $500.1 million in available warehouse capacity[228] - The company generated approximately $14.5 million of net cash from operations for the year ended December 31, 2022, compared to a net cash usage of $27.3 million in the previous year[230] - Cash used in investing activities for the year ended December 31, 2022, was $908.2 million, primarily for originating held for investment loans[243] - Net cash provided by financing activities for the year ended December 31, 2022, was $874.0 million, mainly from $1.7 billion in borrowings from warehouse and repurchase facilities[246]

Velocity Financial, Inc. (NYSE:VEL) Q4 2022 Earnings Conference Call March 9, 2023 5:00 PM ET Company Participants Chris Oltmann - Treasurer and Head IR Chris Farrar - President and Chief Executive Officer Mark Szczepaniak - Chief Financial Officer Conference Call Participants Stephen Laws - Raymond James Steve Delaney - JMP Securities Arren Cyganovich - Citigroup Operator Good afternoon, everyone, and welcome to the Velocity Financial, Incorporated Q4 2022 Conference Call. [Operator Instructions] For your ...

Velocity Financial, Inc. (NYSE:VEL) Q3 2022 Earnings Conference Call November 3, 2022 5:00 PM ET Company Participants Chris Oltmann – Treasurer Chris Farrar – President and Chief Executive Officer Mark Szczepaniak – Chief Financial Officer Conference Call Participants Steve Delaney – JMP Securities Operator Good afternoon, and welcome to the Velocity Financial, Inc. Third Quarter 2022 Conference Call. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operato ...

Investor 1-4 Mixed-Use Multi-Family Commercial > 3Q22 Results Presentation November 3, 2022 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-loo ...

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 September 30, 2022 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 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 ...

Velocity Financial, Inc. (NYSE:VEL) Q2 2022 Earnings Conference Call August 4, 2022 6:00 PM ET Company Participants Chris Oltmann - Treasurer & Director, Investor Relations Chris Farrar - President & Chief Executive Officer Mark Szczepaniak - Chief Financial Officer Conference Call Participants Arren Cyganovich - Citi Steve DeLaney - JMP Securities Operator Good day, and welcome to the Velocity Financial Inc. Second Quarter 2022 Conference Earnings Call. All participants will be in listen-only mode. [Operat ...

Loan Portfolio and Performance - As of June 30, 2022, the company's loan portfolio totaled $3.1 billion, with an average loan balance of approximately $397,000 and a weighted average loan-to-value (LTV) ratio of 68.2%[119] - Nonperforming loans represented 8.16% of the total loan portfolio as of June 30, 2022, down from 10.56% as of December 31, 2021[141] - Total loan originations for the three months ended June 30, 2022, were $445.4 million, a decrease of $136.0 million from $581.4 million in the previous quarter, but an increase of $189.0 million, or 73.6%, from $256.5 million in the same quarter of 2021[146] - The unpaid principal balance (UPB) of loans held for investment as of June 30, 2022, was $3,090.3 million, up from $2,799.9 million as of March 31, 2022, and $2,062.4 million as of June 30, 2021[147] - The weighted average loan-to-value (LTV) for total loans originated and acquired was 69.7% for the three months ended June 30, 2022, compared to 69.2% for the previous quarter and 69.6% for the same quarter of 2021[146] - The loan portfolio was concentrated in investor 1-4 loans, representing 49.1% of the unpaid principal balance (UPB) as of June 30, 2022[162] Financial Results - The company reported pre-tax income of $14.7 million and net income of $10.6 million for the three months ended June 30, 2022[121] - Net income for the three months ended June 30, 2022, was $10.6 million, compared to $9.5 million for the same period in 2021, reflecting an increase of 12.6%[202] - Pre-tax return on equity for the quarter ended June 30, 2022 was 16.4%, significantly higher than 4.4% for the previous quarter[184] - The net interest margin for the total company increased to 3.54% for the three months ended June 30, 2022, from 1.69% for the quarter ended March 31, 2022[178] - Interest income increased by $14.3 million to $59.2 million for the three months ended June 30, 2022, compared to $44.9 million for the same period in 2021, primarily due to higher portfolio balances[203] Securitizations and Debt - The company completed three securitizations totaling $682.5 million of investor real estate loans during the quarter ended June 30, 2022[124] - The company has executed a total of twenty-three securitizations, resulting in over $4.9 billion in gross debt proceeds from May 2011 through June 2022[120] - The outstanding bond balances increased from $1,939,146,000 on December 31, 2021, to $2,527,119,000 as of June 30, 2022[242] - The company entered into a five-year $215.0 million syndicated corporate debt agreement on March 15, 2022, with a fixed interest rate of 7.125%[243] - The corporate debt average rate was reported at 7.78%, with a significant impact from one-time costs associated with debt repayment[180] Expenses and Operating Costs - Total operating expenses increased by $3.6 million to $14.3 million for the three months ended June 30, 2022, from $10.7 million for the same period in 2021, primarily driven by a $2.0 million increase in compensation and employee benefits[217] - Loan servicing expenses increased from $1.9 million for the three months ended June 30, 2021 to $3.3 million for the same period in 2022, reflecting a 73.7% increase[220] - Other operating expenses increased from $1.9 million for the three months ended June 30, 2021 to $3.2 million for the same period in 2022, a 68.4% increase[223] Liquidity and Cash Flow - Total liquidity was $134.1 million as of June 30, 2022, comprised of $46.3 million in cash and $87.8 million of available borrowings[230] - Net cash provided by operating activities for the six months ended June 30, 2022 was $13.1 million, down from $20.9 million for the same period in 2021[232] - Net cash used in investing activities for the six months ended June 30, 2022 was $507.9 million, compared to $139.6 million for the same period in 2021[234] Non-Performing Loans and Credit Losses - The company resolved $47.1 million of non-performing loans during the quarter ended June 30, 2022, compared to $58.2 million during the same quarter in 2021[156] - The allowance for loan losses increased to $4.9 million as of June 30, 2022, compared to $4.7 million as of March 31, 2022, and $4.0 million as of June 30, 2021[150] - The company’s rigorous screening and underwriting process aims to minimize actual credit losses, with borrower equity of 25% to 40% providing significant protection against credit losses[150] - The company’s active management of loans and significant equity cushion at origination are expected to continue minimizing credit losses on defaulted loans[155] Future Strategy - The company aims to resume loan originations and resolve non-performing loans as part of its future strategy[250] - The company plans to use proceeds from new securities issuance primarily for repaying warehouse borrowings and originating new investor real estate loans[242] - The company does not plan to structure any securitizations as sales or utilize off-balance-sheet vehicles[242] - The company has not maintained relationships with unconsolidated entities for off-balance-sheet arrangements[249]

Financial Data and Key Metrics Changes - Velocity Financial reported a net income of $3 million on a core basis, translating to $0.36 per share, with core EPS growth of 23% from the prior quarter [10] - The company achieved a 43% increase in portfolio-related net interest income compared to Q1 2021, resulting in a 14% return on equity (ROE) on a core earnings basis for the quarter [8][10] - The net interest margin (NIM) remained stable at 4.25%, compared to 4.27% in the previous quarter [24] Business Line Data and Key Metrics Changes - Loan production reached a record $581 million in Q1, marking a 16.8% increase sequentially and a 150% increase year-over-year [8][11][17] - The total loan portfolio grew to $2.9 billion, reflecting an 11% increase from year-end [20] - The weighted average coupon (WAC) on new applications increased to 8.1% in April, aligning with historical averages [11][19] Market Data and Key Metrics Changes - The delinquency rate continued to decline, reaching 9.8% by the end of Q1, down from a high of 17% during the pandemic [25] - The company reported a recovery rate of 104.8% on non-performing loans (NPLs), indicating successful resolutions [27] Company Strategy and Development Direction - Velocity Financial's strategy focuses on maintaining strong customer relationships while adapting to changing market conditions, which has allowed for record loan production [8][9] - The company aims to provide durable and stable earnings across various market environments, with a cautiously optimistic outlook despite rising interest rates [9][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by increased short-term rates and market volatility but expressed confidence in the company's ability to navigate these conditions [7][9] - The outlook remains positive, with strong demand from customers and expectations for continued growth in the loan portfolio [33] Other Important Information - The company successfully refinanced its corporate debt, lowering the coupon by approximately 200 basis points and fixing the debt for five years [12][30] - Velocity Financial completed two securitization deals in Q1 and early April, although the execution was not as strong as in previous periods [13][29] Q&A Session Summary Question: Clarification on whole loan sales gains - A participant sought clarification on the reported gains from whole loan sales, noting a discrepancy in the figures presented [38] - The CFO clarified that the reported number may have been affected by tax considerations, confirming the company operates as a C-corp [39][40] Question: Future market conditions and NIM - A participant inquired about the conditions necessary for the securitization markets to stabilize and the impact on the company's NIM [41] - Management responded that a combination of higher coupons and clearer guidance from the Federal Reserve would be essential for market recalibration [42]

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, 2022 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 Velocity Financial, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 46-0659719 (State or ...