Earnings Per Share

6 Months Ended

Jun. 30, 2026

Note 16 — Earnings Per Share

The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock that shared in earnings.

The following table presents the basic and diluted earnings per share calculations for the three and six months ended June 30, 2026 and 2025:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(In thousands, except per share data)
Basic EPS:
Net income attributable to Velocity Financial, Inc.	$	25,163	$	25,997	$	47,526	$	44,884
Less: undistributed earnings attributable to unvested restricted stock awards		341		286		694		523
Net earnings attributable to common stockholders	$	24,822	$	25,711	$	46,832	$	44,361
Weighted average common shares outstanding		38,730		37,194		38,678		35,450
Basic earnings per common share	$	0.64	$	0.69	$	1.21	$	1.25
Diluted EPS:
Net income attributable to Velocity Financial, Inc.	$	25,163	$	25,997	$	47,526	$	44,884
Weighted average common shares outstanding		38,730		37,194		38,678		35,450
Add dilutive effects for warrants		—		—		—		1,217
Add dilutive effects for stock options		214		199		227		218
Add dilutive effects of unvested restricted stock awards		104		95		106		111
Add dilutive effects of unvested performance-based stock units		256		302		224		312
Add dilutive effects of employee stock purchase plan		—		—		4		1
Weighted average diluted common shares outstanding		39,304		37,790		39,239		37,309
Diluted earnings per common share	$	0.64	$	0.69	$	1.21	$	1.20

The following table sets forth the weighted average number of shares excluded from the computation of diluted earnings per share, as their inclusion would have been anti-dilutive:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(In thousands)
Stock options		34		313		34		313
Unvested restricted stock awards		16		17		103		99
Unvested performance-based stock units		—		—		85		—
Share equivalents excluded from EPS		50		330		222		412