Monitor the next 10-Q for continued NIM compression and loan production trends. The portfolio growth is offsetting some weakness, but the declining earnings and NIM warrant caution. Watch for the impact of the VCC 2026-3 securitization completed in July on future funding costs.
Price Chart
Executive Summary
Velocity Financial posted its Q2 2026 earnings presentation via 8-K. GAAP net income fell 3.2% YoY to $25.2M and diluted EPS declined to $0.64 from $0.69. Core net income rose 1.4% to $27.9M, but core diluted EPS fell to $0.71. Loan production dropped 7.3% YoY to $672.6M, though the total loan portfolio grew 19.2% to $7.0B UPB. Portfolio NIM contracted 16 bps to 3.66%. The mixed results show a growing portfolio but declining profitability and production.
Key Facts
- GAAP net income of $25.2 million, a 3.2% decrease from $26.0 million for 2Q25.
- Diluted EPS of $0.64, a decrease of $0.05 from $0.69 per share for 2Q25.
- Core net income of $27.9 million, an increase of 1.4% from $27.5 million for 2Q25.
- Core diluted EPS of $0.71, a decrease of $0.02 from $0.73 per share for 2Q25.
- Loan production for 2Q26 totaled $672.6 million, down 7.3% from $725.4 million for 2Q25.
- Total loan portfolio was $7.0 billion in UPB as of June 30, 2026, an increase of 19.2% from $5.9 billion as of June 30, 2025.
- Portfolio NIM for 2Q26 was 3.66%, a decrease of 16 bps from 3.82% for 2Q25.
- Nonperforming loans (NPL) as a % of HFI loans were 9.6% as of June 30, 2026, down from 10.3% as of June 30, 2025.
- Diluted book value per share of $18.43 as of June 30, 2026, up from $15.62 as of June 30, 2025.
- Liquidity of $240.0 million, consisting of $76.1 million in unrestricted cash and cash equivalents and $163.9 million in available borrowings from unpledged loans.
Financial Impact
GAAP net income down $0.8M YoY; loan production down $52.8M YoY; portfolio UPB up $1.1B YoY
Risk Factors
- Continued net interest margin compression below 3.5% target
- Declining loan production volume impacting future earnings growth
- Rising REO portfolio balance ($142.1M vs $93.4M YoY) and associated losses
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001193125-26-334993 |
| Document: vel-ex99.htm | 0001193125-26-334993 |
| Document: 0001193125-26-334993-index-headers.html | 0001193125-26-334993 |
| Document: 0001193125-26-334993-index.html | 0001193125-26-334993 |
| Document: 0001193125-26-334993.txt | 0001193125-26-334993 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 27, 2026 8w ago | 8-K | $18.08 $18.40 | ▲ +1.77% | ▲ +1.50% | $15.43 (−14.66%) |
Aug 11, 2026 10w ago | Insider Cluster | $18.01 $18.17 | ▼ −0.89% | ▼ −1.33% | $15.43 (+14.33%) |
Aug 5, 2026 11w ago | 8-K | $18.21 $18.10 | ▼ −0.60% | ▼ −1.82% | $15.43 (−15.27%) |
Aug 5, 2026 11w ago | 8-K | $18.21 $18.10 | ▲ +0.60% | ▲ +1.82% | $15.43 (+15.27%) |
Jun 12, 2026 19w ago | Institutional Cluster | $17.56 $17.54 | ▼ −0.11% | ▼ −0.79% | $15.43 (−12.13%) |
May 7, 2026 24w ago | 8-K | $18.29 $17.36 | ▼ −5.08% | ▼ −6.59% | $15.43 (−15.64%) |
May 6, 2026 24w ago | 8-K | $18.29 $17.36 | ▼ −5.08% | ▼ −6.59% | $15.43 (−15.64%) |
Apr 17, 2026 27w ago | 144 | $19.94 $19.51 | ▼ −2.16% | ▼ −3.07% | $15.43 (−22.62%) |
Apr 10, 2026 28w ago | DEFA14A | $19.14 $19.90 | ▲ +3.97% | ▼ −0.53% | $15.43 (−19.38%) |
Mar 13, 2026 32w ago | 8-K | $17.41 $17.26 | ▼ −0.86% | ▲ +1.26% | $15.43 (−11.37%) |
US Market Status
Subscribe to SecBot
Get Real-Time SEC Filing Intelligence
Comprehensive SEC filing analysis delivered the moment filings hit EDGAR. Sentiment scoring, impact analysis, and actionable insights for every material event.
Create a free account Live analysis, Telegram alerts, watchlists and the MCP server for subscribers