Velocity Financial Sets New Records in Q4 2025 with Impressive Growth Across Key Metrics
Velocity Financial, Inc. recently reported its fourth quarter 2025 results, showcasing a year of remarkable performance across various key metrics. The company's impressive growth is evident in its record levels of originations, portfolio expansion, new securitizations, book value, pre-tax return on equity (ROE), and earnings.
In his prepared remarks, Chris Farrar, Velocity Financial's President and Chief Executive Officer, expressed pride in the company's team for achieving these milestones. He attributed the success to their hard work, dedication to the company's vision, and commitment to maintaining credit discipline while growing the business.
One of the standout achievements was the 52% increase in core net income to $111 million, which drove a new record level of pre-tax ROE of 26%. This growth was achieved without compromising on margins, demonstrating the company's ability to balance profitability with responsible lending practices.
The originations volume reached an all-time high of $2.7 billion, driven by increases in productivity from account executives and capital markets team performance. The company successfully completed nine new securitizations, generating $2.6 billion in new issuance and solidifying its position in the fixed income market.
Velocity Financial's portfolio experienced significant growth, expanding by 28% compared to the previous year. The asset management team effectively resolved $331 million in non-performing loans (NPLs), with net recoveries of $30 million. A transformative partnership was also secured, resulting in the sale of $129 million worth of NPLs while retaining servicing rights for the entire pool, freeing up approximately $50 million in working capital.
From a liquidity perspective, Velocity Financial issued its first rated unsecured debt offering for $500 million in January, providing greater flexibility and reducing reliance on short-term warehouse lines. This new capital is expected to support the company's long-term plan of growing book value and maximizing shareholder returns.
The results demonstrate the company's strong momentum and position it well for continued growth. Velocity Financial's success can be attributed to its talented team, healthy end real estate markets, and oversubscribed deals with tight spreads in the fixed income market.
Overall, 2025 was a remarkable year for Velocity Financial, marked by impressive growth across various key metrics and a strong position for continued expansion. The company's commitment to maintaining credit discipline while driving growth is a testament to its responsible approach to lending practices.
