NewtekOne, Inc. Begins 2024 with Strong January Loan Pipeline Growth
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Insights
The announcement by NewtekOne, Inc. of a significant year-to-date increase in its total loan pipeline, particularly in SBA 7(a) and alternative loan financing programs, indicates a robust start to 2024. This growth of 24% in the total loan pipeline and the forecasted 27% increase in total loan closings for 2024, compared to the previous year, suggests a positive outlook for the company's revenue and profitability. The expansion of loan product offerings and the implementation of technology efficiencies are key drivers behind this growth. Investors may see this as a sign of strong operational performance and potential for enhanced shareholder value.
It is also noteworthy that NewtekOne is experiencing expanding net interest margins, which contribute to an increase in net interest income. This financial metric is crucial as it reflects the company's ability to generate profit from its lending activities. In a rising rate environment, the ability to maintain or grow net interest margins can be challenging and NewtekOne's success in doing so may indicate effective asset-liability and credit risk management strategies.
The company's anticipation of using artificial intelligence to further increase efficiencies could signal ongoing innovation and a commitment to maintaining a competitive edge in the financial services industry. As a bank holding company, NewtekOne's performance and strategic initiatives could be of particular interest to investors focused on the banking sector's adaptation to technological advancements.
The reported year-over-year pipeline growth, especially in the alternative loan finance program with a 38.2% increase, suggests a strategic shift towards more diverse lending services. This diversification aligns with broader market trends where businesses seek alternative financing solutions due to the stringent requirements of traditional bank loans. The focus on alternative lending could position NewtekOne favorably within the niche market, potentially attracting a new customer base and increasing market share.
Furthermore, the mention of strong credit performance of the existing portfolio amidst rising rates indicates resilience and sound underwriting practices. For stakeholders, this is a reassuring sign of the company's ability to manage credit risk effectively. The emphasis on quality loans and prudent risk management is a critical aspect for investors, as it can mitigate the risk of loan defaults and ensure steady returns.
As NewtekOne prepares to report its first annual report as a bank holding company, the market will be looking for confirmation of these positive trends in the form of actual financial results. The transition to a bank holding company could also mean greater regulatory oversight and potential access to new funding sources, which could impact the company's strategic direction and financial stability.
The growth in NewtekOne's loan pipeline during a period of rising interest rates is indicative of underlying economic conditions and borrower confidence. An increase in loan demand could reflect optimism among small and medium-sized businesses, which are core recipients of SBA 7(a) loans. Such loans are crucial for business expansion, equipment purchase and working capital and their growth could signal a healthy economic environment for small businesses.
However, the broader economic implications of rising interest rates should not be overlooked. While NewtekOne has reported expanding net interest margins, the overall lending environment may become more challenging as borrowers face higher costs of capital. This could eventually lead to a tightening of credit conditions and a potential slowdown in loan growth. Thus, it will be important to monitor how NewtekOne and similar institutions navigate the evolving economic landscape and whether they can sustain growth in a potentially contracting credit market.
The proactive use of artificial intelligence and technology by NewtekOne could also reflect broader economic trends towards digital transformation within the financial sector. This transformation is not only about operational efficiency but also about the ability to offer tailored financial products, enhance customer experience and improve risk assessment. The company's performance and strategic investments in technology may offer insights into the broader adoption of fintech solutions in the banking industry.
BOCA RATON, Fla., Feb. 05, 2024 (GLOBE NEWSWIRE) -- NewtekOne, Inc. (the “Company”) (NASDAQ: NEWT), announced today strong growth in its total loan pipeline, across all lending products, year-to-date through January 31, 2024, compared to the same period last year. The total pipeline consists of loans that are in the Company’s three lending stages: prequalification, underwriting and approved pending closing. NewtekOne’s loan programs include SBA 7(a) loans, SBA 504 loans, alternative loan financing program (formerly referred to as our non-conforming conventional loan program), conforming C&I loans and conforming CRE loans. Newtek Bank’s flagship loan program, SBA 7(a) lending, and the Company’s alternative loan finance program, led the year-over-year pipeline growth for January. The following summarize the year-over-year pipeline growth year-to-date through January 31, 2024:
- The total loan pipeline across all loan products year-to-date through January 31, 2024 reached
$1.4 billion ; a24.0% increase over the same period in 2023. - The total pipeline for the alternative loan finance program year-to-date through January 31, 2024 reached
$183.2 million ; an increase of38.2% over the same period last year. - The total pipeline for SBA 7(a) loans year-to-date through January 31, 2024 reached
$771.6 million ; an increase of17.8% over the same period last year.
| Total Loans Across All Products | Year-to-Date Through | Year-Over-Year % Change | ||||
| 1/31/2023 | 1/31/2024 | |||||
| Prequalified | ||||||
| Underwriting | ||||||
| Approved Pending Closing | ||||||
| Total | $1,120,579,411 | $1,389,869,942 | 24.0% | |||
| Alternative Loan Program | Year-to-Date Through | Year-Over-Year % Change | ||||
| 1/31/2023 | 1/31/2024 | |||||
| Prequalified | ||||||
| Underwriting | ||||||
| Approved Pending Closing | ||||||
| Total | $132,589,000 | $183,169,520 | 38.2% | |||
| SBA 7(a) | Year-to-Date Through | Year-Over-Year % Change | ||||
| 1/31/2023 | 1/31/2024 | |||||
| Prequalified | - | |||||
| Underwriting | ||||||
| Approved Pending Closing | ||||||
| Total | $654,980,049 | $771,609,363 | 17.8% | |||
Barry Sloane, Chairman, President and Chief Executive Officer said, “We couldn’t be more pleased with the performance of our lending business in the month of January 2024. We anticipate that getting off to such a great start in 2024, will be helpful in achieving our record-breaking forecast of approximately
Mr. Sloane continued, “We are also pleased that the quality and credit performance of our existing portfolio has remained relatively strong despite rising rates. Our portfolio has experienced expanding net interest margins on a quarterly sequential basis, which has increased net interest income. We continue to demonstrate that our unique business model, which has been developed over two decades, produces high-quality loans. With prudent asset-liability, capital and credit risk management, and while appropriately growing our levels of reserves for credit losses, we have been able to produce metrics that we believe are not typically seen in the financial services and banking industry. We look forward to reporting our fourth quarter and full year 2023 results on March 5, 2024, after the market closes, which will be our first annual report as a bank holding company.”
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®, National Association, 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 uncertainty and changes in circumstances. These statements are not guarantees of future results or occurrences and are subject to change, possibly materially. See “Note Regarding Forward-Looking Statements” and the sections entitled “Risk Factors” in the Company's filings with the Securities and Exchange Commission 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
What is the total loan pipeline year-to-date through January 31, 2024 for NewtekOne, Inc. (NEWT)?
What was the year-over-year percentage change for the alternative loan finance program?
How much did the SBA 7(a) loans increase year-over-year?
Who is the Chairman, President, and CEO of NewtekOne, Inc. (NEWT)?
When will NewtekOne, Inc. (NEWT) report its fourth quarter and full year 2023 results?
