Velocity Financial Reports 31.1% Revenue Growth to $118.7 Million in Q1 2025

Velocity Financial, Inc. reported significant financial performance for the first quarter of 2025, with total revenue reaching $118.7 million, a 31.1% increase from $90.5 million in the same period last year. The company's net income attributable to common stockholders was $18.9 million, or $0.55 per share, compared to $17.3 million, or $0.52 per share, in the first quarter of 2024. This growth in profitability was driven by a rise in interest income, which increased by $28.2 million due to higher average loan balances and yields, with an annualized yield on the total portfolio at 9.11%.

In terms of operational metrics, Velocity's loan portfolio grew to $5.4 billion in unpaid principal balance (UPB) as of March 31, 2025, up from $5.1 billion at the end of 2024. The company originated $640.4 million in loans during the quarter, marking a substantial increase from $378.7 million in the same quarter last year. The average loan size was approximately $393,000, with a weighted average loan-to-value ratio of 66.1%. The number of loans held for investment also rose to 13,858, reflecting the company's expanding market presence.

Velocity's total assets increased to $5.97 billion as of March 31, 2025, compared to $5.53 billion at the end of 2024. The company's equity also saw a rise, reaching $566.2 million, up from $520.2 million. This growth was supported by the issuance of 1,569,255 shares of common stock under its at-the-market equity offering program, generating net proceeds of $28.8 million. The company maintained a strong liquidity position, with $74.5 million in cash and cash equivalents, alongside $238.2 million in available warehouse capacity.

The filing also highlighted an increase in nonperforming loans, which accounted for 10.8% of the total loan portfolio, up from 10.7% at the end of 2024. The allowance for credit losses was $5.0 million, reflecting a slight increase from the previous year. The company attributed the rise in nonperforming loans to a larger portfolio size and proactive management decisions to move loans into foreclosure earlier in the delinquency process.

Looking ahead, Velocity Financial remains focused on leveraging its extensive network of independent mortgage brokers to drive growth in the investor real estate loan market. The company anticipates continued demand for its financing solutions, despite potential macroeconomic challenges, including rising interest rates and geopolitical uncertainties. The management expressed confidence in its ability to navigate these challenges while maintaining a strong operational and financial foundation.