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 June 30, 2026

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 other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2945 Townsgate Road, Suite 110 Westlake Village, California	91361
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (818) 532-3700

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		VEL		The New York Stock Exchange
Common stock, par value $0.01 per share		VEL		NYSE Texas, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☐		Accelerated filer		☒
Non-accelerated filer		☐		Smaller reporting company		☒
Emerging growth company		☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 31, 2026, the registrant had 39,481,457 shares of common stock outstanding.

 

Table of Contents

 

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (Unaudited)	2
	Consolidated Balance Sheets	2
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Changes in Stockholders’ Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	Controls and Procedures	65
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	66
Item 1A.	Risk Factors	66
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 3.	Defaults Upon Senior Securities	67
Item 4.	Mine Safety Disclosures	67
Item 5.	Other Information	67
Item 6.	Exhibits	68
SIGNATURES		70

 

PART I—FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited)

VELOCITY FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

		June 30, 2026				December 31, 2025
		(Unaudited)
ASSETS
Cash and cash equivalents		$	76,115			$	92,103
Restricted cash			169,088				157,134
Loans held for investment, at amortized cost (net of allowance for credit losses of $5,102 and $4,521 as of June 30, 2026 and December 31, 2025, respectively)			1,823,039				2,028,262
Loans held for investment, at fair value			5,460,522				4,729,869
Total loans, net			7,283,561				6,758,131
Retained securities, at fair value			29,924				—
Accrued interest receivables			53,107				49,678
Receivables due from servicers			152,182				150,902
Other receivables			6,006				1,897
Real estate owned, net			142,085				118,289
Property and equipment, net			1,291				1,415
Deferred tax asset, net			19,852				22,709
Mortgage servicing rights, at fair value			14,307				12,963
Derivative assets			118				66
Goodwill			6,775				6,775
Other assets			8,719				9,451
Total assets		$	7,963,130			$	7,381,513
LIABILITIES
Accounts payable and accrued expenses		$	186,020			$	168,314
Secured financing, net			73,427				286,679
Unsecured senior notes, net			486,170				—
Securitized debt, at amortized cost			1,570,782				1,705,589
Securitized debt, at fair value			4,609,891				4,236,737
Warehouse and repurchase facilities, net			311,676				308,506
Total liabilities			7,237,966				6,705,825
Commitments and contingencies
EQUITY
Common stock ($0.01 par value, 100,000,000 shares authorized; 40,279,046 and 39,573,657 shares issued, 39,293,655 and 38,965,317 shares outstanding as of June 30, 2026 and December 31, 2025, respectively)			405				398
Additional paid-in capital			390,977				382,564
Retained earnings			349,905				302,379
Treasury stock, at cost (985,391 and 608,340 common shares as of June 30, 2026 and December 31, 2025, respectively)			(17,483	)			(10,204	)
Accumulated other comprehensive loss			(2,267	)			(2,602	)
Total Velocity Financial, Inc. stockholders' equity			721,537				672,535
Noncontrolling interest in subsidiary			3,627				3,153
Total equity			725,164				675,688
Total liabilities and equity		$	7,963,130			$	7,381,513

See accompanying Notes to Consolidated Financial Statements.