Velocity Financial, Inc. Reports Third Quarter 2025 Results

Velocity Financial, Inc., a real estate finance company based in Westlake Village, California, has released its financial results for the third quarter of 2025. The company, which specializes in business purpose loans secured by 1-4 unit residential rental and small commercial properties, reported significant growth in several key financial metrics.

Financial Highlights

For the third quarter of 2025, Velocity Financial reported a net income of $25.4 million, a 60.6% increase from $15.8 million in the same period last year. The diluted earnings per share (EPS) rose to $0.65, up from $0.44 in the third quarter of 2024. Core net income also saw a substantial increase, reaching $26.9 million, up 58.9% from $16.9 million in the previous year. The core diluted EPS was $0.69, compared to $0.47 in the third quarter of 2024.

The company's net interest margin (NIM) for the portfolio was 3.65%, an increase of 5 basis points from 3.60% in the third quarter of 2024. The total net revenue for the quarter was $85.8 million, a 53.6% increase from $55.9 million in the same period last year.

Business and Operational Highlights

Velocity Financial achieved record loan production of $739.0 million, including the unfunded portion of a construction loan originated by Century of $23.9 million. This represents a 55.0% increase from the third quarter of 2024. The company's portfolio of nonperforming loans (NPL) as a percentage of Held for Investment (HFI) loans decreased to 9.8%, down from 10.6% in the same period last year.

The company also completed two securitizations during the quarter, including its first single counterparty securitization totaling $190.9 million and the VCC 2025-4 securitization totaling $457.5 million. Liquidity stood at $143.5 million, consisting of $99.0 million in unrestricted cash and $44.5 million in available borrowings from unpledged loans.

Strategic Initiatives and Corporate Developments

Velocity Financial's strategic initiatives included the completion of two significant securitizations and maintaining a strong liquidity position. The company also reported a total available warehouse line capacity of $600.3 million, indicating robust financial health and readiness for future growth.

Management's Perspective

Chris Farrar, President and CEO of Velocity Financial, commented on the company's performance, stating, "We continue to build on our strong momentum in 2025, delivering two record highs for quarterly loan production and pre-tax earnings. Velocity’s third quarter 2025 results were driven by higher portfolio net interest income and noninterest income from our growing production volume. Financing demand remained strong during the quarter, in both the traditional commercial and 1-4 family residential rental property markets, as investors continued to see considerable value in smaller commercial properties. We remain confident in Velocity’s long-term growth prospects and our ability to sustain profitable market share growth."

Future Outlook

While the company did not provide specific guidance for the next reporting period, the management expressed confidence in sustaining profitable market share growth, driven by strong financing demand and strategic initiatives.

Original SEC Filing: Velocity Financial, Inc. [ VEL ] - 8-K - Nov. 07, 2025