NewtekOne, Inc. Announces Loan Closings for the First Quarter 2024

Rhea-AI Summary

NewtekOne, Inc. (NASDAQ: NEWT) achieved record loan approvals in the first quarter of 2024, with $207.7 million of SBA 7(a) loans closed, marking a 36.2% increase from the previous year. The company's total loans closed across all products reached $308.6 million, a 35.8% increase year-over-year. Additionally, Newtek Bank saw a $30 million increase in deposits in the first quarter of 2024, driven by digital account openings for lending clients.

Insights

Financial Analyst

The substantial increase in SBA 7(a) loan closures and overall loan product closures by NewtekOne in the first quarter of 2024 is a strong indicator of the company's growth in the lending market. The 36.2% year-over-year increase in SBA 7(a) loans, a popular loan program for small businesses, suggests that NewtekOne is capitalizing on a growing demand for small business financing. This growth is not only a positive sign for the company's revenue stream but also reflects a potential increase in market share within the small business lending sector.

Moreover, the record loan approval pipeline indicates an efficient loan processing capability and a robust demand for the company's lending products. The $30 million deposit increase, primarily through digital channels, shows the company's successful integration of technology in its operations, which may lead to improved customer satisfaction and retention. The ability to open deposit accounts seamlessly at the point of loan origination can be a significant competitive advantage, potentially reducing customer acquisition costs and improving operational efficiency.

However, it's important to monitor the quality of the loan portfolio as rapid growth can sometimes lead to a dilution in underwriting standards. Investors should watch for the company's non-performing loan ratios in subsequent quarters to ensure that the growth in loan approvals does not compromise asset quality.

Market Research Analyst

The announcement by NewtekOne reflects broader trends in the financial industry, where there is a significant push towards digital transformation. The increase in deposit activity linked to digital account openings aligns with consumer preferences for online banking services, which have been accelerated by the pandemic. This digital shift is likely to continue and NewtekOne's investment in its proprietary platform could enhance its scalability and customer reach.

It is also noteworthy that the company is maintaining its EPS forecast for the full year 2024. This suggests confidence in their business model and operational stability. Yet, it is essential for stakeholders to consider the broader economic context, such as interest rate trends and regulatory changes, which could impact the company's performance. A conservative EPS forecast might also indicate management's awareness of potential headwinds or a strategic decision to set achievable targets to manage investor expectations.

Banking Industry Expert

The performance of NewtekOne in the first quarter of 2024 highlights the strategic importance of Small Business Administration (SBA) loans in the company's portfolio. The SBA 7(a) and 504 loan programs are designed to support the growth of small businesses, which are a critical component of the U.S. economy. NewtekOne's success in this area suggests they are effectively serving the needs of this sector and may be benefiting from favorable SBA policies or economic conditions that are encouraging small business growth.

The company's deposit growth is also a key metric, as deposits are a primary source of low-cost funding for banks. The increase in deposits over a short period implies successful cross-selling strategies and could lead to a lower cost of capital, which can be leveraged to offer more competitive loan products. The focus on a frictionless client experience is important in an industry where customer loyalty is heavily influenced by convenience and service quality.

Record Loan Approvals Across All Loan Products in First Quarter 2024

Strong Growth in Lending and Deposits in the First Quarter 2024

BOCA RATON, Fla., April 01, 2024 (GLOBE NEWSWIRE) -- NewtekOne, Inc. (the “Company” or “NewtekOne”) (NASDAQ: NEWT), announced today that its nationally chartered bank subsidiary, Newtek Bank, N.A., closed $207.7 million of SBA 7(a) loans for the three months ended March 31, 2024, which represents a 36.2% increase over $152.5 million of SBA 7(a) loans closed in the first quarter 2023. Newtek Bank and the Company’s non-bank subsidiaries closed $308.6 million of loans, across all loan products, for the three months ended March 31, 2024, which represents a 35.8% increase over $227.2 million for the same period in 2023. The Company also announced strong growth in its loan approval pipeline across all lending products year-to-date through March 31, 2024. In particular, the Company approved $507.7 million of new loans, across all loan products, for the three months ended March 31, 2024. which represents a quarterly record for the Company. NewtekOne’s loan programs include SBA 7(a) loans, SBA 504 loans, alternative lending program (formerly referred to as our non-conforming conventional loan program), conforming C&I loans and conforming CRE loans.

Finally, the Company announced that Newtek Bank has experienced increased deposit activity during the first quarter 2024. Specifically, from the period of March 15, 2024 through March 31, 2024, deposits increased by approximately $30 million. This increase in deposits was primarily driven by digital deposit account openings for the Company’s lending clients, aided by using the Company’s proprietary platform at the time of loan origination, which eliminates the need to fill out multiple forms for the Company’s lending clients.

Barry Sloane, Chairman, President and Chief Executive Officer commented, “I am extremely appreciative of the ability of the senior management team and all of our NewtekOne associates to produce outstanding results in lending and deposit growth, which financed NewtekOne’s business in the first quarter of 2024, while at the same time continuing our growth as a financial holding company. We are maintaining our full year 2024 EPS forecast in a range of $1.80 to $2.00 per basic and diluted common share, which we now believe to be conservative in light of, among other things, our lending performance in the first quarter 2024. We plan to update our 2024 forecast when we release our first quarter 2024 financial results. We appreciated the challenges in being able to hit-the-ground running, grow a business in a compliant, well-capitalized manner, all the while setting up and developing the policies, procedures and compliance tools to meet the requirements of regulators. We are excited to report our first quarter 2024 earnings in May and look forward to being further acknowledged as an organization that is operationally delivering on deposit gathering, lending, client experience, and customer service. We must earn our client’s business every single day with the best solutions in a frictionless environment. We are extremely appreciative of all of our employee’s efforts to deliver that each and every day.”

About NewtekOne, Inc.

NewtekOne^®, Your Business Solutions Company^®, is a financial holding company, which along with its bank and non-bank consolidated subsidiaries (collectively, “NewtekOne”), provides a wide range of business and financial solutions under the Newtek^® brand to the small- and medium-sized business (“SMB”) market. Since 1999, NewtekOne has provided state-of-the-art, cost-efficient products and services and efficient business strategies to SMB relationships across all 50 states to help them grow their sales, control their expenses and reduce their risk.

NewtekOne’s and its subsidiaries’ business and financial solutions include: banking (Newtek Bank, N.A.), Business Lending, SBA Lending Solutions, Electronic Payment Processing, Technology Solutions (Cloud Computing, Data Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Inventory Financing, Insurance Solutions, Web Services, and Payroll and Benefits Solutions.

Newtek^®, NewtekOne^®, Newtek Bank^®, Your Business Solutions Company^® and One Solution for All Your Business Needs^® are registered trademarks of NewtekOne, Inc.

Note Regarding Forward-Looking Statements

Certain statements in this press release are “forward-looking statements” within the meaning of the rules and regulations of the Private Securities Litigation and Reform Act of 1995. These statements are based on management’s current expectations and are subject to significant risks and uncertainties.  See “Note Regarding Forward-Looking Statements” and the sections entitled “Risk Factors” in the Company's filings with the Securities and Exchange Commission which are available on NewtekOne's website (https://investor.newtekbusinessservices.com/sec-filings) and on the Securities and Exchange Commission’s website (www.sec.gov). Any forward-looking statements made by or on behalf of NewtekOne speak only as to the date they are made, and NewtekOne does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

SOURCE: NewtekOne, Inc.

Investor Relations & Public Relations
Contact: Jayne Cavuoto
Telephone: (212) 273-8179 / jcavuoto@newtekone.com

FAQ

How much did NewtekOne close in SBA 7(a) loans in the first quarter of 2024?

NewtekOne closed $207.7 million in SBA 7(a) loans in the first quarter of 2024, a 36.2% increase from the previous year.

What was the total amount of loans closed by NewtekOne in the first quarter of 2024?

NewtekOne closed $308.6 million of loans across all products in the first quarter of 2024, representing a 35.8% increase from the same period in 2023.

How much did Newtek Bank's deposits increase in the first quarter of 2024?

Newtek Bank experienced a $30 million increase in deposits in the first quarter of 2024, primarily driven by digital account openings for lending clients.

What is the EPS forecast range for NewtekOne in 2024?

NewtekOne's full year 2024 EPS forecast range is $1.80 to $2.00 per basic and diluted common share.