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VEL, Velocity Financial Inc.
A balance-sheet business, read on book value, net interest margin and credit losses rather than an earnings multiple.
We operate in a large and highly fragmented market with substantial demand for financing and limited supply of institutional financing alternatives.
Furthermore, by originating loans through our efficient and scalable network of approved mortgage brokers, we are able to maintain a wide geographical presence and nimble operating infrastructure capable of reacting quickly to changing market environments.
The business
What it sells, where the money comes from, the kind of company it is.
Next report By 11/8 · the 10-Q for the quarter ended late September · due within 40 days of period end · has filed ~38 days after · the wire records it on arrival
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Net interest margin, loan losses, and book value. A lender is read on the quality of its balance sheet, not an earnings multiple, and the worst year of credit losses matters more than the best. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Is it a good business?
- Not enough dataIndustry peers: median 5%
What this means
Net income or equity wasn't found in the filing data.
- Not enough dataIndustry peers: median 13%
What this means
Equity, goodwill or intangibles missing.
- Not enough data
What this means
Noninterest expense or revenue missing.
Is it sound?
- Capital cushion —Not enough data
What this means
Equity or total assets missing.
- Funding —Not enough data
What this means
Deposits or total assets missing.
- Credit cost (provision / NII) 3%LowProvision for credit losses $6M ÷ net interest income $186M
What this means
What the bank set aside this year against loans going bad, as a share of its lending income. This swings hard with the cycle, low in good years and spiking in recessions, so read it across the record, not in one year. Disciplined underwriting shows up as low, stable provisions through a downturn.
The franchise and the credit cycle
- Not enough data
What this means
The deposit mix isn't cleanly tagged in the filings' structured data; the funding read above carries what is.
- Not enough data
What this means
Not derivable from the filings' structured data — some filers carry recoveries only on segment axes, and a gross figure dressed as net would be a wrong number.
All figures as filed; the source filing is linked above.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.
| Fiscal year | Chief executive | Pay, as filed | “Actually paid” | Net income |
|---|---|---|---|---|
| 2023 | Mr. Farrar | $3.9M | $6.2M | — |
| 2024 | Mr. Farrar | $5.4M | $6.2M | — |
| 2025 | Mr. Farrar | $6.6M | $7.0M | — |
Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Net income is the whole business's, as filed, for the same fiscal years.
- Insider ownership4.7%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Peers, Capital Markets & Asset Management
The same industry, side by side on the bank lens. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | ROEmedian over the record | ROTCEmedian over the record | NII / assetsmedian over the record | Noninterest-bearing sharelatest FY |
|---|---|---|---|---|---|
| QFINQfin Holdings Inc. | $2.8B | 26% | 26% | 0.1% | — |
| GDOTGreen DOT Corp | $2.1B | 5% | 13% | -0.1% | 97% |
| LULufax Holding Ltd | $1.2B | 15% | 17% | -0.0% | — |
| UPSTUpstart | $1.0B | -7% | -8% | 0.0% | — |
| YRDYiren Digital Ltd. | $848M | 20% | 20% | 0.8% | — |
| KEELKeel Infrastructure Corp. | $229M | -17% | -17% | 0.7%2y | — |
| VELVelocity Financial Inc. | $186M | — | — | 2.5%1y | — |
| NCTYThe9 Limited American Depository Shares | $16M | -54% | -54% | 0.6%1y | — |
| Group median | — | — | — | 0.4% | — |
The price
What a price has to assume.
What the price implies
reverse-DCFA bank / financial isn't read on an owner-earnings DCF; its economics live on the balance sheet (book value, the return earned on it, and the cash the assets throw off).
Manual order: ← VEEV its page in the Manual VELO →
Industry order: ← VCTR the Capital Markets & Asset Management chapter VINP →