Velocity Financial, Inc. has recently released its 10-Q report, providing insights into its business operations and financial performance. The company, founded in 2004, operates as a real estate finance company that originates, securitizes, and manages a portfolio of loans secured by real estate, including residential rental properties, residential apartments with office or retail space, and loans for multi-family, mixed-use, and commercial properties. Velocity Financial primarily offers its products through independent mortgage brokers and direct borrower relationships, aiming to be a preferred and recognized brand in its core market.
In the 10-Q report, Velocity Financial highlighted its primary source of revenue, which is interest income earned on its loan portfolio. As of June 30, 2025, the company's loan portfolio totaled $5.9 billion on properties in 48 states and the District of Columbia, with an average loan balance of approximately $394.0 thousand. The company funds its portfolio primarily through a combination of committed and uncommitted secured warehouse facilities, securitized debt, corporate debt, and equity. Notably, Velocity Financial executed 42 securitized debt transactions, resulting in a total of over $9.3 billion in gross debt proceeds from May 2011 through June 2025.
One of the core profitability measurements for Velocity Financial is its portfolio-related net interest margin, which measures the difference between interest income earned on loans and interest expense paid on portfolio-related debt. For the three and six months ended June 30, 2025, the company's annualized portfolio-related net interest margins were 3.82% and 3.60%, respectively. Moreover, for the same periods, including net income attributable to noncontrolling interest, Velocity Financial generated pre-tax income of $33.9 million and $60.8 million, and net income of $26.2 million and $44.8 million, respectively.
In December 2021, the company acquired an 80% ownership interest in Century Health & Housing Capital, LLC, a licensed Ginnie Mae issuer/servicer providing government-insured Federal Housing Administration mortgage financing for multifamily housing, senior housing, and long-term care/assisted living facilities.
The report also addressed factors affecting the comparability of Velocity Financial's financial results, including market uncertainties, critical accounting policies, and use of estimates. The company closely monitors its net interest income, credit losses, and operating expenses as primary metrics for assessing business performance. Additionally, the report discussed the impact of competition, availability and cost of funding, loan performance, macroeconomic conditions, and portfolio and asset quality on the company's results of operations.
Key portfolio statistics as of June 30, 2025, were also provided, indicating the total loans, loan count, average loan balance, weighted average loan-to-value, weighted average coupon, and nonperforming loans as a percentage of total loans.
As a result of these announcements, the company's shares have moved -1.03% on the market, and are now trading at a price of $16.33. For more information, read the company's full 10-Q submission here.
