Overview

* Velocity Financial ( VEL ) Q2 revenue beats analyst expectations, driven by record loan production

* Core EPS for Q2 exceeds analyst estimates, reflecting strong portfolio earnings

* Net interest margin rises due to higher cash interest from resolved NPLs

Outlook

* Velocity Financial ( VEL ) confident in sustaining profitable market share growth

Result Drivers

* RECORD LOAN PRODUCTION - Driven by demand for traditional commercial loans and investor 1-4 rental loans, increasing 93.1% and 53.4% from 2Q24

* PORTFOLIO EARNINGS - Strong portfolio earnings and record production volume contributed to increased net income and core net income

* NIM IMPROVEMENT - Higher cash interest from resolved nonperforming loans boosted net interest margin, supported by rate discipline on new loan production

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Beat $85.84 $41 mln

Revenue mln (1

Analyst)

Q2 Core Beat $0.73 $0.53 (3

EPS Analysts

)

Q2 EPS $0.69

Q2 Core Beat $27.47 $20.20

Net mln mln (3

Income Analysts

)

Q2 Net $26 mln

Income

Q2 $33.92

Pretax mln

Income

Analyst Coverage

* The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and 1 "sell" or "strong sell"

* The average consensus recommendation for the consumer lending peer group is "hold."

* Wall Street's median 12-month price target for Velocity Financial Inc ( VEL ) is $21.00, about 21.4% above its August 6 closing price of $16.50

* The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 7 three months ago

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)