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Other Debt
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Other Debt

Note 12 — Other Debt

Secured and unsecured financings and warehouse facilities are utilized to finance the origination and purchase of commercial real estate mortgage loans. Warehouse facilities are designated to fund mortgage loans that are purchased and originated within specified underwriting guidelines. Most of these lines of credit fund less than 100% of the principal balance of the mortgage loans originated and purchased, requiring the use of working capital to fund the remaining portion.

(a)
Secured Financing, Net (Corporate Debt)

On March 15, 2022, the Company entered into a five-year $215.0 million syndicated corporate debt agreement, the (“the 2022 Term Loan”). The 2022 Term Loan bore interest at a fixed rate of 7.125% and was to mature on March 15, 2027. Interest on the 2022 Term Loan was paid every six months. As of March 31, 2026 and December 31, 2025, the balance of the 2022 Term Loan was zero and $215.0 million, respectively. The 2022 Term Loan was paid off on January 30, 2026 with proceeds from the issuance and sale of $500.0 million 2026 Term Notes.

On February 5, 2024, the Company entered into a five-year $75.0 million syndicated corporate debt agreement, the (“the 2024 Term Loan”). The 2024 Term Loan bears interest at 9.875% and matures on February 15, 2029. Interest on the 2024 Term Loan is paid every six months. As of March 31, 2026 and December 31, 2025, the balance of the 2024 Term Loan was $75.0 million.

The total balance of the 2022 Term Loan and the 2024 Term Loan in the Consolidated Balance Sheets is net of debt issuance costs and discount of $1.7 million and $3.3 million as of March 31, 2026 and December 31, 2025, respectively. The secured financing is secured by substantially all assets of the Company not otherwise pledged under a securitized debt or warehouse facility and contains certain reporting and financial covenants. Should the Company fail to adhere to those covenants, the lenders have the right to demand immediate repayment that may require the Company to sell the collateral at less than the carrying amounts. As of March 31, 2026, the Company was in compliance with all covenants.

(b)
Unsecured Senior Notes, Net (Corporate Debt)

On January 30, 2026, Velocity Commercial Capital, LLC (“VCC”) completed the issuance and sale of $500.0 million aggregate principal amount of 9.375% Unsecured Senior Notes due 2031 (the “2026 Term Notes”). The 2026 Term Notes were sold at an offering price equal to 100% of the principal thereof and bear interest at a rate of 9.375% per annum. Interest on the 2026 Term Notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2026 and will mature on February 15, 2031. The 2026 Term Notes are guaranteed by the Company on a senior unsecured basis, with no conditions to the guarantee and no additional risks on a consolidated basis as VCC is the Company's primary operating company. After deducting fees and expenses, the net proceeds from the issuance and sale of the 2026 Term Notes were approximately $484.9 million. The 2026 Term Notes were sold in an offering exempt from the registration requirements of the Securities Act of 1933. The balance of the 2026 Term Notes in the Consolidated Balance Sheets is net of debt issuance costs of $14.6 million as of March 31, 2026.

(c) Warehouse Repurchase and Revolving Loan Facilities, Net

On January 4, 2011, Century entered into a Master Participation and Facility Agreement with a bank (“the September 2022 Term Repurchase Agreement”). The Facility Agreement has a current extended maturity date of July 31, 2026, and is a short-term borrowing facility, collateralized by performing loans, with a maximum capacity of $60.0 million, and bears interest at one-month SOFR plus 1.60% with a 0.25% floor.

On May 17, 2013, the Company entered into a Repurchase Agreement (“the 2013 Repurchase Agreement”) with a warehouse lender. The 2013 Repurchase Agreement is a modified mark-to-market agreement and has a current maturity date of September 23, 2026, and is a short-term borrowing facility, collateralized by a pool of performing loans, with a maximum capacity of $400.0 million, and bears interest at SOFR plus 2.75%. All borrower payments on loans financed under the warehouse repurchase facility are first used to pay interest on the facility.

On January 29, 2021, the Company entered into a non-mark-to-market Repurchase Agreement (“the 2021 Repurchase Agreement”) with a warehouse lender. The 2021 Repurchase Agreement has a current extended maturity date of May 20, 2026, and is a short-term borrowing facility, collateralized by a pool of loans. On July 25, 2024, the Company entered into a mark-to-market Repurchase Agreement (“the 2024 Repurchase Agreement”) with the same warehouse lender. The 2024 Repurchase Agreement also has a maturity date of May 20, 2026, and is a short-term borrowing facility, collateralized by a pool of loans. The maximum capacity under both agreements is $200.0 million individually and in the aggregate. The 2024 Repurchase Agreement includes a $75.0 million sublimit for nonperforming loans. Borrowings under these two facilities bear interest at SOFR plus 3.00% during the availability period and 4.00% during the amortization period. All borrower payments on loans financed under the warehouse repurchase facilities are first used to pay interest on the facilities.

On April 16, 2021, the Company entered into a non-mark-to-market Term Repurchase Agreement (“the 2021 Term Repurchase Agreement”) with a warehouse lender. The 2021 Term Repurchase Agreement has a maturity date of April 14, 2028, with an extended borrowing period through April 14, 2027. During the borrowing period, the Company can take loan advances from time to time, subject to availability. Each loan advance bears interest at SOFR plus 2.95%. The maximum capacity under this facility is $100.0 million.

On December 27, 2023, the Company entered into a loan facility agreement (“the 2023 Repurchase Agreement”) with a bank. The 2023 Repurchase Agreement has a maturity date of December 27, 2026. During the borrowing period, the Company can take loan advances from time to time subject to availability. Each loan advance bears interest at SOFR plus 3.00%. The maximum loan amount under this facility is $125.0 million.

On November 7, 2024, the Company entered into a non-mark-to-market secured revolving loan facility agreement (“the 2024 Bank Credit Agreement”) with a bank. The 2024 Bank Credit Agreement has a current maturity date of May 7, 2027. Each loan advance bears interest at SOFR plus 3.50%, with a floor of 2.00%. The maximum loan amount under this facility is $50.0 million.

Certain loans are pledged as collateral under the warehouse repurchase facilities and the revolving loan facility, which contain covenants. Should the Company fail to adhere to those covenants or otherwise default under the facilities, the lenders have the right to terminate the facilities and demand immediate repayment that may require the Company to sell the collateral at less than the carrying amounts. As of March 31, 2026 and December 31, 2025, the Company was in compliance with all covenants.

The following table summarizes the maximum borrowing capacity, current gross balances outstanding, and effective interest rates of the Company’s warehouse facilities and loan agreements as of March 31, 2026 and December 31, 2025:

 

 

 

 

 

 

March 31, 2026

 

December 31, 2025

 

 

Contract Date

 

Current Maturity Date

 

Period End
Balance (1)

 

 

Maximum
Borrowing
Capacity

 

 

Effective Interest Rate

 

 

 

Period End
Balance (1)

 

 

Maximum
Borrowing
Capacity

 

 

Effective Interest Rate

 

 

 

 

 

 

 

 

($ in thousands)

The September 2022 term repurchase agreement

 

01/04/11

 

07/31/26

 

$

—

 

 

$

60,000

 

 

 

—

 

%

 

$

—

 

 

$

60,000

 

 

 

6.0

 

%

The 2013 repurchase agreement

 

05/17/13

 

09/23/26

 

 

—

 

 

 

400,000

 

 

 

7.6

 

 

 

 

132,100

 

 

 

400,000

 

 

 

7.6

 

 

The 2021/2024 repurchase agreements

 

1/29/2021
7/25/2024

 

05/20/26

 

 

—

 

 

 

200,000

 

 

 

8.2

 

 

 

 

105,712

 

 

 

200,000

 

 

 

7.9

 

 

The 2021 term repurchase agreement

 

04/16/21

 

04/14/28

 

 

—

 

 

 

100,000

 

 

 

7.9

 

 

 

 

18,132

 

 

 

100,000

 

 

 

7.7

 

 

The 2023 repurchase agreement

 

12/27/23

 

12/27/26

 

 

50,000

 

 

 

125,000

 

 

 

11.0

 

(2)

 

 

24,400

 

 

 

125,000

 

 

 

8.8

 

 

The 2024 bank credit agreement

 

11/07/24

 

05/07/27

 

 

49,354

 

 

 

50,000

 

 

 

7.9

 

 

 

 

30,095

 

 

 

50,000

 

 

 

8.7

 

 

Total

 

 

 

 

 

$

99,354

 

 

$

935,000

 

 

 

 

 

 

$

310,439

 

 

$

935,000

 

 

 

 

 
(1)
Warehouse repurchase facilities amounts on the Consolidated Balance Sheets are net of debt issuance costs, amounting to $1.3 million and $1.9 million as of March 31, 2026 and December 31, 2025, respectively.
(2)
The higher effective interest rate for the 2023 repurchase agreement reflects the lower average outstanding balance during the quarter, which resulted from the paydown of the warehouse line using proceeds from the Company's unsecured debt issuance.

The following table provides an overview of the activity and effective interest rates of the Company’s warehouse facilities and loan agreements for the three months ended March 31, 2026 and 2025:

 

 

Three Months Ended March 31,

 

 

 

2026

 

 

2025

 

 

 

($ in thousands)

 

Average outstanding balance

 

$

176,760

 

 

$

433,790

 

Highest outstanding balance at any month-end

 

 

201,390

 

 

 

571,834

 

Effective interest rate (1)

 

 

8.43

%

 

 

7.84

%
(1)
Effective interest rate represents annualized interest expense divided by average gross outstanding balance. The rate includes average rate of 7.10% and 7.45%, and debt issuance cost amortization of 1.33% and 0.39%, for the three months ended March 31, 2026 and 2025, respectively. The 1.33% debt cost amortization rate for the three months ended March 31, 2026, reflects the lower average outstanding balance during the quarter, which resulted from the paydown of warehouse lines with proceeds from the Company's unsecured debt issuance.

The following table provides a summary of interest expense that includes interest, amortization of discount, and deal cost amortization of the Company’s warehouse facilities, securitizations and other financing for the three months ended March 31, 2026 and 2025:

 

 

Three Months Ended March 31,

 

 

 

2026

 

 

2025

 

 

 

(In thousands)

 

Warehouse and repurchase facilities

 

$

3,723

 

 

$

8,505

 

Securitized debt

 

 

90,304

 

 

 

66,583

 

Interest expense — portfolio related

 

 

94,027

 

 

 

75,088

 

Interest expense — Corporate - Secured debt

 

 

6,681

 

 

 

6,142

 

Interest expense — Corporate - Unsecured debt

 

 

8,452

 

 

 

—

 

Total interest expense

 

$

109,160

 

 

$

81,230