Velocity Financial (VEL) Q3 2026 earnings summary

Executive summary

• Record 3Q26 loan production of $911.3M, up 23.3% YoY; portfolio UPB reached $7.46B, up 18.4% YoY.

• Net income was $27.2M; net income attributable to common shareholders was $26.4M, up 4.1% YoY. Core net income was $30.0M, up 11.5%, and core diluted EPS was $0.76.

• Portfolio NIM was 3.78%, above the 3.5% target, supported by lower securitized funding costs.

Financial highlights

• Net interest income was $53.5M vs. $49.1M YoY; net interest income after credit provision was $53.0M vs. $48.7M.

• Net revenue was $102.1M, up 19.1% YoY; other operating income rose 32.1% to $49.2M, driven primarily by originations, fees and fair-value gains.

• Operating expenses rose 26.7% to $63.9M, including $2.4M of M&A-related costs; excluding these costs, the expense ratio was 28.1% vs. 29.2% reported.

• Diluted EPS was $0.67 vs. $0.65 YoY; core diluted EPS was $0.76 vs. $0.69.

• Diluted book value per share rose 17.9% YoY to $19.23 and 4.3% QoQ.

Outlook and guidance

• Management expects portfolio NIM of ~3.5% or higher, with disciplined pricing on new originations supporting the target.

• Management expects credit performance to remain consistent with recent years and NPL resolutions to continue contributing gains.

• Small-balance investor property demand is expected to remain resilient despite higher interest rates; management cited a growing application pipeline and confidence in profitable growth.

• VCC 2026-4 closed in October; the next long-term loan securitization was targeted for November 2026.