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NewtekOne, Inc. Reports Second Quarter 2024 Financial Results

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NewtekOne (Nasdaq: NEWT) reports strong Q2 2024 financial results. Net income was $10.9 million, with an EPS of $0.43, marking a 13.2% increase from Q1 2024 and a 59.3% increase from Q2 2023. Net interest income rose by 2.2% quarter-over-quarter to $9.1 million. Total assets increased by 14.3% to $1.6 billion. Loans held for investment grew by 7.6% to $867.7 million. However, the net interest margin decreased to 2.70% from 2.92% in Q1 2024. NewtekOne completed a $71.875 million public offering of 8.50% fixed-rate senior notes due 2029. They maintained their 2024 annual EPS forecast of $1.85-$2.05.

Highlights include a 17.4% increase in total deposits to $663.7 million and a 13% growth in total loans. The company forecasts $935 million in total SBA 7(a) loan fundings for 2024. Additionally, Newtek Bank sold $3.0 million of past due and non-accrual loans. Despite positive quarterly performance, net income for the first half of 2024 decreased to $20.6 million from $25.6 million in H1 2023, which had benefited from a $14.2 million income tax benefit.

NewtekOne (Nasdaq: NEWT) riporta risultati finanziari solidi per il secondo trimestre del 2024. L'utile netto è stato di 10,9 milioni di dollari, con un EPS di 0,43 dollari, segnando un incremento del 13,2% rispetto al primo trimestre del 2024 e un aumento del 59,3% rispetto al secondo trimestre del 2023. Il reddito netto da interessi è aumentato del 2,2% trimestre su trimestre, raggiungendo i 9,1 milioni di dollari. Gli attivi totali sono aumentati del 14,3%, fino a 1,6 miliardi di dollari. I prestiti detenuti per investimento sono cresciuti del 7,6%, arrivando a 867,7 milioni di dollari. Tuttavia, il margine di interesse netto è diminuito al 2,70% rispetto al 2,92% nel primo trimestre del 2024. NewtekOne ha completato un'offerta pubblica di 71,875 milioni di dollari di obbligazioni senior a tasso fisso dell'8,50% in scadenza nel 2029. Hanno mantenuto la loro previsione annuale di EPS per il 2024 tra 1,85 e 2,05 dollari.

Tra i punti salienti si segnala un aumento del 17,4% nei depositi totali, arrivando a 663,7 milioni di dollari, e una crescita del 13% nei prestiti totali. L'azienda prevede finanziamenti totali per prestiti SBA 7(a) di 935 milioni di dollari per il 2024. Inoltre, Newtek Bank ha venduto prestiti scaduti e non in interesse per un valore di 3,0 milioni di dollari. Nonostante le performance trimestrali positive, l'utile netto per la prima metà del 2024 è diminuito a 20,6 milioni di dollari rispetto ai 25,6 milioni di dollari nel primo semestre del 2023, che aveva beneficiato di un vantaggio fiscale di 14,2 milioni di dollari.

NewtekOne (Nasdaq: NEWT) informa sobre resultados financieros sólidos del segundo trimestre de 2024. La utilidad neta fue de 10,9 millones de dólares, con un EPS de 0,43 dólares, marcando un aumento del 13,2% en comparación con el primer trimestre de 2024 y un incremento del 59,3% con respecto al segundo trimestre de 2023. Los ingresos netos por intereses crecieron un 2,2% intertrimestral a 9,1 millones de dólares. Los activos totales aumentaron un 14,3% a 1,6 mil millones de dólares. Los préstamos mantenidos para inversión crecieron un 7,6% a 867,7 millones de dólares. Sin embargo, el margen de intereses neto disminuyó al 2,70% desde el 2,92% en el primer trimestre de 2024. NewtekOne completó una oferta pública de 71,875 millones de dólares de notas senior a tasa fija del 8,50% con vencimiento en 2029. Mantuvieron su pronóstico de EPS anual para 2024 en un rango de 1,85 a 2,05 dólares.

Los aspectos destacados incluyen un aumento del 17,4% en los depósitos totales a 663,7 millones de dólares y un crecimiento del 13% en los préstamos totales. La empresa prevé 935 millones de dólares en financiamiento total de préstamos SBA 7(a) para 2024. Además, Newtek Bank vendió 3,0 millones de dólares en préstamos morosos y no acumulativos. A pesar del rendimiento trimestral positivo, la utilidad neta para la primera mitad de 2024 disminuyó a 20,6 millones de dólares desde los 25,6 millones de dólares en la primera mitad de 2023, que se benefició de un beneficio fiscal de 14,2 millones de dólares.

NewtekOne (Nasdaq: NEWT)는 2024년 2분기 재무 결과를 발표했습니다. 순이익은 1,090만 달러로, EPS는 0.43달러로 2024년 1분기 대비 13.2% 증가하고, 2023년 2분기 대비 59.3% 증가했습니다. 순이자 수익은 전분기 대비 2.2% 증가하여 910만 달러에 이르렀습니다. 총 자산은 14.3% 증가하여 16억 달러에 달했습니다. 투자용 대출은 7.6% 증가하여 8억 6,770만 달러에 이르렀습니다. 그러나 순이자 마진은 2.70%로 2024년 1분기 2.92%에서 감소했습니다. NewtekOne은 2029년 만기 8.50% 고정금리 선순위 채권 공개 공모를 7187.5만 달러로 완료했습니다. 2024년 연간 EPS 예상치를 1.85~2.05달러로 유지했습니다.

주요 내용으로는 총 예금이 6억 6,370만 달러로 17.4% 증가했고, 총 대출이 13% 성장했습니다. 회사는 2024년 총 SBA 7(a) 대출 자금이 9억 3,500만 달러에 이를 것으로 예상하고 있습니다. 또한 Newtek Bank는 연체 및 비수익 대출을 300만 달러에 매각했습니다. 긍정적인 분기 실적에도 불구하고, 2024년 상반기 순이익은 2,060만 달러로 2023년 상반기의 2,560만 달러에서 감소했으며, 이는 1,420만 달러의 세금 혜택을 포함한 것이었습니다.

NewtekOne (Nasdaq: NEWT) annonce de solides résultats financiers pour le deuxième trimestre 2024. Le revenu net s'élevait à 10,9 millions de dollars, avec un EPS de 0,43 dollar, marquant une augmentation de 13,2 % par rapport au premier trimestre 2024 et une hausse de 59,3 % par rapport au deuxième trimestre 2023. Le revenu net d'intérêts a augmenté de 2,2 % par rapport au trimestre précédent pour atteindre 9,1 millions de dollars. Les actifs totaux ont augmenté de 14,3 % pour s'établir à 1,6 milliard de dollars. Les prêts détenus à des fins d'investissement ont crû de 7,6 % pour atteindre 867,7 millions de dollars. Cependant, la marge d'intérêt nette a diminué à 2,70 % contre 2,92 % au premier trimestre 2024. NewtekOne a complété une offre publique de 71,875 millions de dollars sur des obligations senior à taux fixe de 8,50 % arrivant à échéance en 2029. Ils ont maintenu leur prévision d'EPS annuel pour 2024 entre 1,85 et 2,05 dollars.

Parmi les points forts, on note une augmentation de 17,4 % des dépôts totaux pour atteindre 663,7 millions de dollars et une croissance de 13 % des prêts totaux. L'entreprise prévoit 935 millions de dollars de financements totaux pour les prêts SBA 7(a) en 2024. De plus, Newtek Bank a vendu 3,0 millions de dollars de prêts en souffrance et non productifs. Malgré de bonnes performances trimestrielles, le revenu net pour la première moitié de 2024 a diminué à 20,6 millions de dollars contre 25,6 millions de dollars au premier semestre 2023, qui avait bénéficié d'un avantage fiscal de 14,2 millions de dollars.

NewtekOne (Nasdaq: NEWT) berichtet von starken finanziellen Ergebnissen für das zweite Quartal 2024. Der Nettogewinn betrug 10,9 Millionen Dollar, mit einem EPS von 0,43 Dollar, was einem Anstieg von 13,2% gegenüber dem ersten Quartal 2024 und einem Anstieg von 59,3% gegenüber dem zweiten Quartal 2023 entspricht. Die Nettzinsüberschüsse stiegen um 2,2% im Quartalsvergleich auf 9,1 Millionen Dollar. Die Gesamtvermögen stiegen um 14,3% auf 1,6 Milliarden Dollar. Die für Investitionen gehaltenen Kredite wuchsen um 7,6% auf 867,7 Millionen Dollar. Der Nettozinsmargen sank jedoch von 2,92% im ersten Quartal 2024 auf 2,70%. NewtekOne schloss eine öffentliche Platzierung von 71,875 Millionen Dollar an festverzinslichen Senior Notes mit einer Laufzeit bis 2029 ab. Die Prognose für das EPS im Jahr 2024 wurde bei 1,85 bis 2,05 Dollar belassen.

Zu den Höhepunkten gehört ein Anstieg der Gesamteinlagen um 17,4% auf 663,7 Millionen Dollar sowie ein Wachstum der Gesamtkredite um 13%. Das Unternehmen rechnet für 2024 mit 935 Millionen Dollar an Gesamtfinanzierungen für SBA 7(a)-Kredite. Darüber hinaus hat Newtek Bank nicht zahlungsfähige und überfällige Kredite im Wert von 3,0 Millionen Dollar verkauft. Trotz positiver Quartalsergebnisse sank der Nettogewinn in der ersten Hälfte von 2024 auf 20,6 Millionen Dollar von 25,6 Millionen Dollar im ersten Halbjahr 2023, welches von einem Einkommenssteuervorteil in Höhe von 14,2 Millionen Dollar profitierte.

Positive
  • Net income for Q2 2024 increased 59.3% YoY to $10.9 million.
  • EPS grew 13.2% QoQ to $0.43.
  • Total assets rose by 14.3% to $1.6 billion.
  • Loans held for investment increased by 7.6% to $867.7 million.
  • Total deposits increased by 17.4% to $663.7 million.
  • SBA 7(a) loan fundings forecasted to reach $935 million in 2024.
Negative
  • Net interest margin decreased to 2.70% from 2.92% in Q1 2024.
  • Net income for H1 2024 decreased to $20.6 million from $25.6 million in H1 2023.

Insights

NewtekOne's Q2 2024 results show solid financial performance with notable improvements across key metrics. Net income increased to $10.9 million, resulting in EPS of $0.43 per share, a 59.3% year-over-year increase. The company's net interest income grew by 59.6% to $9.1 million, reflecting improved lending operations.

Particularly impressive is Newtek Bank's performance, with deposits growing 17.4% quarter-over-quarter to $663.7 million. The bank's efficiency ratio improved to 42.3%, indicating effective cost management. The 4.83% net interest margin is strong in the current environment.

However, investors should note the slight decrease in capital ratios, which bears watching. Overall, NewtekOne's unique business model appears to be delivering results, but continued execution on deposit growth and maintaining loan quality will be important for sustained success.

NewtekOne's transformation from a BDC to a financial holding company is showing promising results. The company's ability to generate a 6.4% ROAA and 48.8% ROTCE at Newtek Bank is exceptional compared to traditional banks. This performance underscores the potential of their differentiated business model.

The growth in commercial deposits to $136 million is a positive sign, as it could lead to lower funding costs over time. The successful $154.3 million alternative loan program securitization demonstrates the company's ability to access capital markets efficiently.

However, the banking industry faces challenges with higher interest rates and potential credit quality issues. NewtekOne's ability to maintain loan quality while growing its portfolio will be critical. The 79.1% insured deposit ratio provides some stability, but further diversification of funding sources would be beneficial.

NewtekOne's Q2 results reflect a company successfully navigating the challenging financial services landscape. The 18.06% increase in SBA 7(a) loan closings to $229.8 million indicates strong demand for their lending products. Their forecast of $935.0 million in total SBA 7(a) loan fundings for 2024 suggests confidence in continued growth.

The company's ability to maintain its 2024 EPS forecast of $1.85 to $2.05 per share is positive, especially given industry headwinds. The 26.33% increase in total loan closings across all products demonstrates effective cross-selling and market penetration.

Investors should monitor the company's progress in growing commercial deposits and expanding the alternative loan program, as these are identified as key catalysts for future earnings growth. The unique positioning as a technology-enabled bank serving independent business owners could provide a competitive advantage in attracting and retaining customers.

Newtek Bank, N.A. Demonstrates Loan and Deposit Growth

Maintains its 2024 Annual EPS Forecast in a Range of $1.85 to $2.05 per Basic and Diluted Common Share

BOCA RATON, Fla., Aug. 05, 2024 (GLOBE NEWSWIRE) -- NewtekOne, Inc. (Nasdaq: NEWT), reports its financial and operating results for the three and six months ended June 30, 2024.

NewtekOne Financial Highlights for the Three Months ended June 30, 2024

  • Net income was $10.9 million, and earnings per share (“EPS”) was $0.43 per basic and diluted common share, for the three months ended June 30, 2024; a 13.2% increase, on a per share basis, compared to $9.7 million and $0.38 per basic and diluted common share, for the three months ended March 31, 2024, and a 59.3% increase, on a per share basis, compared to $7.0 million and $0.27 per basic and diluted common share, for the three months ended June 30, 2023.
  • Net interest income was $9.1 million for the three months ended June 30, 2024; an increase of 2.2% over $8.9 million for the three months ended March 31, 2024, and an increase of 59.6% over $5.7 million for the three months ended June 30, 2023.
  • Total assets were $1.6 billion at June 30, 2024; an increase of 14.3% from $1.4 billion at December 31, 2023.
  • Total borrowings were $652.0 million at June 30, 2024; an increase of 1.2% from $644.1 million at December 31, 2023.
  • NewtekOne completed a registered public offering of $71.875 million aggregate principal amount of its 8.50% Fixed Rate Senior Notes due 2029, listed on the Nasdaq Global Market® under the trading symbol “NEWTG”
  • Loans held for investment were $867.7 million at June 30, 2024; an increase of 7.6% over $806.1 million at December 31, 2023.
  • Net interest margin2 was 2.70% for the three months ended June 30, 2024; a decrease of 7.5% compared to 2.92% for the three months ended March 31, 2024, and an increase of 34.3% over 2.01% for the three months ended June 30, 2023.
  • Return on Tangible Common Equity (“ROTCE”)1 of 21.1% for the three months ended June 30, 2024; an increase of 2.4% over 20.6% for the three months ended March 31, 2024, and an increase of 37.0% over 15.4% for the three months ended June 30, 2023.
  • Return on Average Assets (“ROAA”)1,2 of 2.8% for the three months ended June 30, 2024; consistent with the 2.8% for the three months ended March 31, 2024, and an increase of 33.3% over 2.1% for the three months ended June 30, 2023.
  • Efficiency ratio2 of 66.3% for the three months ended June 30, 2024; a decrease of 6.1% compared to 70.6% for the three months ended March 31, 2024, and a decrease of 12.3% compared to 75.6% for the three months ended June 30, 2023.
  • Total risk-based capital ratio2 was 18.8% at June 30, 2024; a decrease of 1.6% over 19.1% at December 31, 2023.
  • Tier-1 leverage ratio2 was 13.7% at June 30, 2024; an increase of 0.7% over 13.6% at December 31, 2023.

Post Second Quarter 2024 Highlights

  • The Company maintains its 2024 annual EPS forecast to a range of $1.85 to $2.05 per basic and diluted common share.
  • On July 19, 2024, the Company paid a quarterly cash dividend of $0.19 per share on its outstanding common shares.
  • On July 23, 2024, NewtekOne's joint venture, Newtek-TSO II Conventional Credit Partners, LP, closed a $154.3 million alternative business loan backed securitization rated by Morningstar DBRS.
  • On August 1, 2024, Newtek Bank sold $3.0 million of past due and non-accrual loans acquired through the acquisition of National Bank of New York City.

NewtekOne Financial Highlights for the Six Months ended June 30, 2024

  • Net income was $20.6 million and EPS was $0.81 per basic and diluted common share, for the six months ended June 30, 2024, compared to $25.6 million and $1.03 per basic and diluted common share, for the six months ended June 30, 2023. Net income for the six months ended June 30, 2023 was positively impacted by an income tax benefit of $14.2 million, or $0.59 per basic and diluted share. Excluding this income tax benefit, EPS for the six months ended June 30, 2023 would have been $0.44 per basic and diluted share.1
  • Net interest income was $18.0 million for the six months ended June 30, 2024; an increase of 74.8% over $10.3 million for the three months ended June 30, 2023.
  • Net interest margin2 was 2.81% for the six months ended June 30, 2024; an increase of 39.8% over 2.01% for the six months ended June 30, 2024.
  • ROTCE1 of 20.9% for the six months ended June 30, 2024; a decrease of 34.3% compared to 31.8% for the six months ended June 30, 2023. ROTCE for the six months ended June 30, 2023 was positively impacted by the income tax benefit in the first quarter of 2023.
  • ROAA1,2 of 2.8% for the six months ended June 30, 2024; a decrease of 33.3% compared to 4.2% for the six months ended June 30, 2023. ROAA for the six months ended June 30, 2023 was positively impacted by the income tax benefit in the first quarter of 2023.
  • Efficiency ratio2 of 68.4% for the six months ended June 30, 2024; a decrease of 13.7% compared to 79.3% for the six months ended June 30, 2023.

Newtek Bank, N.A.

  • Total deposits3 were $663.7 million at June 30, 2024; an increase of 17.4% over $565.3 million at March 31, 2024 and an increase of 27.9% over $519.1 million in deposits at December 31, 2023.
  • Insured deposits represented approximately 79.1% of total deposits at June 30, 2024.
  • Net interest margin was 4.83% for the three months ended June 30, 2024; an increase of 0.2% over 4.82% for the three months ended March 31, 2024, and an increase of 51.9% over 3.18% for the three months ended June 30, 2023.
  • ROTCE1 of 48.8% for the three months ended June 30, 2024; an increase of 28.8% over 37.9% for the three months ended March 31, 2024, and an increase of 47.4% over 33.1% for the three months ended June 30, 2023.
  • ROAA1 of 6.4% for the three months ended June 30, 2024; an increase of 10.3% over 5.8% for the three months ended March 31, 2024, and an increase of 25.5% over 5.1% for the three months ended June 30, 2023.
  • Efficiency ratio1 of 42.3% for the three months ended June 30, 2024; a decrease of 15.6% from 50.1% for the three months ended March 31, 2024, and a decrease of 20.3% from 53.1% for the three months ended June 30, 2023.
  • Total risk-based capital ratio was 18.3% at June 30, 2024; a decrease of 3.2% from 18.9% at December 31, 2023.
  • Tier-1 leverage ratio was 13.6% at June 30, 2024; a decrease of 12.3% from 15.5% at December 31, 2023.

Lending Highlights

  • SBA 7(a) loan closings of $229.8 million for the three months ended June 30, 2024; an increase of 18.06% over $194.7 million of SBA 7(a) loans closings for the three months ended June 30, 2023.
  • The Company forecasts $935.0 million in total SBA 7(a) loan fundings for 2024, which would represent a 14.7% increase over 2023.
  • Newtek Bank closed $16.4 million of SBA 504 loans for the three months ended June 30, 2024; an increase of 3.94% over $15.8 million SBA 504 loans closed for the three months ended June 30, 2023.
  • Newtek Bank and the Company’s non-bank lending subsidiaries closed $316.5 million of loans across all loan products for the three months ended June 30, 2024; a 26.33% increase over $250.5 million of loans closed for the same period in 2023.

________________________
1 Non-GAAP; reconciliations of non-GAAP financial measures to the most comparable GAAP measures are set forth on the last page of the financial information accompanying this press release.
2 Assets under supervision, capital ratios, risk-weighted assets and supplementary leverage ratio are preliminary data and subject to change with our filings with regulatory agencies and our Form 10-Q for the period ended June 30, 2024.
3 Total deposits as reported include deposits from affiliates held at Newtek Bank, which are eliminated through consolidation on NewtekOne's consolidated financial statements.


Barry Sloane, Chairman, President, and Chief Executive Officer said, "We are pleased to report EPS of $0.43 per basic and diluted common share for the second quarter of 2024. As our industry continues to experience the pains of higher short-term interest rates, an inverted yield curve and slumping commercial real estate prices, we continue to meet and exceed our expectations and have established ourselves as a differentiated and new model for a financial holding company, operating a nationally chartered bank."

Mr. Sloane continued, “In addition, when examining the financial performance of Newtek Bank for the second quarter 2024, we are pleased by its powerful earnings model that has been consistently generating returns through the past six quarters, the term over which Newtek Bank has been owned by NewtekOne, its financial holding company. We want to continue to remind the marketplace that since January 2023, when NewtekOne converted to a financial holding company from a BDC, NewtekOne has met the challenges of operating under a different business model subject to different regulations. In addition, Newtek Bank's predecessor, the National Bank of New York City, was a 60 year old Flushing, New York based bank which required a complete modernization. We are very proud of the excellent job our management team has done in modernizing Newtek Bank to a state-of-the art technology enabled bank, and expect that investors and analysts are watching us grow Newtek Bank and see that we are meeting and beating our expectations. In addition, we believe that our business model, which is unique, can offer outstretched returns compared to a typical bank. For example, in the second quarter of 2024, Newtek Bank had an ROAA of 6.4%, an ROTCE of 48.8% and an efficiency ratio of 42.3%, none of which are typical returns produced by traditional banks. Indeed, we believe that Newtek Bank's returns are driven by its distinctive differentiated business model. Moreover, Newtek Bank's net interest margin continued to expand and reached 4.83% in the second quarter of 2024, while its average rate on deposits remained constant at 4.47%. Newtek Bank also experienced total loan growth of 13% over the first quarter 2024 and growth in deposits of 17% over the first quarter 2024."

Mr. Sloane further commented, "As we have previously communicated to the market, we believe that the two of the most important catalysts to our growth in quality EPS will be our ability to acquire commercial deposits at lower interest rates and to grow our alternative loan program ("ALP") at the holding company. We are grateful that our management team continues to execute on our goals of raising lower-cost commercial deposits as well as originating high-quality loans in the current higher interest rate environment. In addition to a business model that has consistently performed to meet or exceed our expectations, we could not be more pleased with the results that our joint venture Newtek TSO-II Conventional Credit Partners achieved in its July 23, 2024 ALP securitization, NALP Business Loan Trust 2024–1, when it sold $154.3 million of notes rated “A (sf)” and “BBB (high) (sf)” by Morningstar DBRS and collateralized by approximately $191 million of ALP loans originated by NewtekOne's ALP. More information on this deal, can be found through the following link NALP Business Loan Trust 2024-1. When one considers the coupon, both gross and net of servicing (an asset owned by NewtekOne), on the ALP loans that went into the securitization and the cost of the securitized debt, you should be able to see why we view this business as very profitable and a growth opportunity for NewtekOne and its shareholders. In addition, the ALP provides tremendous value for our customers looking for long amortizations, with respect to the principal repayment, and no balloon payments, as well as the desire for smaller monthly principal and interest payments and full flexibility to run their business. The ALP allows us to reach out to and satisfy the financial needs of a larger pool of borrowers, including larger and higher credit-worthy borrowers that come through our NewTracker® referral platform.”

Mr. Sloane concluded, “We ended the second quarter with $136 million of commercial depository accounts, up from $116 million at the end of the first quarter 2024, which represents approximately 20% of our total deposits. We anticipate finishing the calendar year 2024 with between $200 million and $250 million of commercial depository accounts. We look forward to a complete review of our quarterly performance in our conference call tomorrow morning at 8:30am ET. You can register online through the following link NewtekOne Second Quarter 2024 Financial Results.”

Second Quarter 2024 Conference Call and Webcast

A conference call to discuss the second quarter 2024 financial results will be hosted by Barry Sloane, President, Chairman and Chief Executive Officer and M. Scott Price, Chief Financial Officer, tomorrow, Tuesday, August 6, 2024, 8:30 a.m. EDT.

Please note, to attend the conference call or webcast, participants should register online at NewtekOne, Inc. Second Quarter 2024 Financial Results Conference Call. To receive a dial-in number, participants are requested to register at a minimum 15 minutes before the start of the call. The corresponding presentation will be available in the ‘Events & Presentations’ section of the Investor Relations portion of NewtekOne's website at NewtekOne, Inc. Second Quarter 2024 Financial Results Conference Call. A replay of the call with the corresponding presentation will be available on NewtekOne's website shortly following the live presentation and will be available for a period of 90 days.

Note Regarding Dividend Payments

Amount and timing of dividends, if any, remain subject to the discretion of the Company's Board of Directors.

NewtekOne®, Your Business Solutions Company®, is a financial holding company, which along with Newtek Bank and NewtekOne's non-bank consolidated subsidiaries, provides a wide range of business and financial solutions under the Newtek® brand to independent business owners. Since 1999, NewtekOne has provided state-of-the-art, cost-efficient products and services and efficient business strategies to our independent business owner 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. Information regarding the Company’s assets under supervision, capital ratios, risk-weighted assets, supplementary leverage ratio and balance sheet data consists of preliminary estimates and are subject to change with our filings with regulatory agencies and the filing of the Company's Form 10-Q for the quarterly period ended June 30, 2024. These statements and other forward-looking statements herein are based on the current beliefs and expectations of NewtekOne's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. In addition, earnings per share guidance reflects risks, uncertainties and assumptions with respect to facts and circumstances that are beyond our control, in particular concerning interest rates, monetary policy and prevailing economic conditions (including the impacts from a government shutdown ) during the relevant periods, any of which may differ significantly from our assumptions about the applicable period, causing our actual operating results, including our earnings per share, to differ materially from the stated guidance. See “Note Regarding Forward-Looking Statements” and the sections entitled “Risk Factors” in our 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


 
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, except for Per Share Data)
 June 30, 2024 December 31, 2023
ASSETS(Unaudited)  
Cash and due from banks$36,909  $15,398 
Restricted cash 36,832   30,919 
Interest bearing deposits in banks 132,597   137,689 
Total cash and cash equivalents 206,338   184,006 
Debt securities available-for-sale, at fair value 28,418   32,171 
Loans held for sale, at fair value 179,739   118,867 
Loans held for sale, at LCM 59,402   56,607 
Loans held for investment, at fair value 415,893   469,801 
Loans held for investment, at amortized cost, net of deferred fees and costs 451,829   336,305 
Allowance for credit losses (21,098)  (12,574)
Loans held for investment, at amortized cost, net 430,731   323,731 
Federal Home Loan Bank and Federal Reserve Bank stock 3,765   3,635 
Settlement receivable 79,928   62,230 
Joint ventures, at fair value (cost of $63,506 and $37,864), respectively 69,803   40,859 
Non-control investments (cost of $680 and $796), respectively 740   728 
Goodwill and intangibles 29,783   30,120 
Right of use assets 5,110   5,701 
Deferred tax asset, net 1,943   5,230 
Servicing assets 44,633   39,725 
Other assets 60,778   56,102 
   Total assets$1,617,004  $1,429,513 
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Liabilities:   
Deposits:   
Noninterest-bearing$4,921  $10,053 
Interest-bearing 605,504   453,452 
Total deposits 610,425   463,505 
Borrowings 651,972   644,122 
Dividends payable 5,247   4,792 
Lease liabilities 6,225   6,952 
Due to participants 22,407   23,796 
Accounts payable, accrued expenses and other liabilities 46,726   37,300 
Total liabilities 1,343,002   1,180,467 
    
Shareholders' Equity:   
Preferred stock (par value $0.02 per share; authorized 20 shares, 20 shares issued and outstanding) 19,738   19,738 
Common stock (par value $0.02 per share; authorized 199,980 shares, 25,852 and 24,680 issued and outstanding, respectively) 517   492 
Additional paid-in capital 215,633   200,913 
Retained earnings 38,251   28,051 
Accumulated other comprehensive loss, net of income taxes (137)  (148)
   Total shareholders' equity 274,002   249,046 
   Total liabilities and shareholders' equity$1,617,004  $1,429,513 


 
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Thousands, except for Per Share Data)
 
 Three Months Ended Six Months Ended
 June 30,
2024		 March 31,
2024		 June 30,
2023
(as restated)		 June 30,
2024		 June 30,
2023
(as restated)
Interest income         
Debt securities available-for-sale$374   460  $415  $834  $647 
Loans and fees on loans 26,773   24,985   19,607   51,758   37,109 
Other interest earning assets 2,206   1,622   2,531   3,828   3,512 
Total interest income 29,353   27,067   22,553   56,420   41,268 
Interest expense         
Deposits 6,865   5,576   4,051   12,441   5,526 
Notes and securitizations 11,118   10,827   9,083   21,945   17,801 
Bank and FHLB borrowings 2,244   1,758   3,746   4,002   7,685 
Total interest expense 20,227   18,161   16,880   38,388   31,012 
Net interest income 9,126   8,906   5,673   18,032   10,256 
Provision for credit losses 5,799   4,015   2,575   9,814   3,893 
Net interest income after provision for credit losses 3,327   4,891   3,098   8,218   6,363 
Noninterest income         
Dividend income 368   386   505   754   1,009 
Loan servicing asset revaluation (1,861)  (1,735)  (534)  (3,596)  385 
Servicing income 4,606   5,357   4,299   9,963   8,702 
Net gains on sales of loans 22,564   20,292   13,364   42,856   19,731 
Net gain (loss) on loans under the fair value option (2,894)  2,798   4,363   (96)  10,268 
Technology and IT support income 5,174   5,770   6,371   10,944   13,080 
Electronic payment processing income 12,645   10,987   10,676   23,632   21,004 
Other noninterest income 11,418   5,512   5,241   16,930   12,462 
Total noninterest income 52,020   49,367   44,285   101,387   86,641 
Noninterest expense         
Salaries and employee benefits expense 20,790   20,506   18,374   41,296   37,447 
Technology services expense 3,420   3,408   3,466   6,828   7,269 
Electronic payment processing expense 5,693   4,846   4,838   10,539   9,342 
Professional services expense 2,743   4,565   3,156   7,308   6,596 
Other loan origination and maintenance expense 3,015   2,244   2,313   5,259   5,094 
Depreciation and amortization 521   532   750   1,053   1,541 
Other general and administrative costs 4,382   5,058   4,880   9,440   9,511 
Total noninterest expense 40,564   41,159   37,777   81,723   76,800 
Net income before taxes 14,783   13,099   9,606   27,882   16,204 
Income tax expense (benefit) 3,838   3,449   2,595   7,287   (9,357)
Net income 10,945   9,650   7,011   20,595   25,561 
Dividends to preferred shareholders (400)  (400)  (400)  (800)  (649)
Net income available to common shareholders$10,545  $9,250  $6,611  $19,795  $24,912 
          
Earnings per share:         
Basic$0.43  $0.38  $0.27  $0.81  $1.03 
Diluted$0.43  $0.38  $0.27  $0.81  $1.03 


Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
The information provided below presents a reconciliation of each of our non-GAAP financial measures to the most directly comparable GAAP financial measure. Ratios for three and six month periods ended have been annualized based on calendar days.

Reconciliation of Core EPS to GAAP EPS:

  Six Months Ended
June 30, 2023		 Three Months Ended
June 30, 2023
  GAAP EPS Adjustments Core EPS GAAP EPS Adjustments Core EPS
  Based on
Net Income		 Discrete Tax
Benefits on
Reorg		 Based on
Adjusted
Net Income		 Based on
Net Income		 Discrete Tax
Benefits on
Reorg		 Based on
Adjusted
Net Income
             
Net income before taxes $16,204  $—  $16,204  $9,606  $— $9,606 
Income tax expense (benefit)  (9,357)  14,244   4,887   2,595   —  2,595 
Net income  25,561   (14,244)  11,317   7,011   —  7,011 
Preferred dividends  (649)  —   (649)  (400)  —  (400)
Net income available to common shareholders $24,912  $(14,244) $10,668  $6,611  $— $6,611 
             
Basic:            
Income available to common shareholders $24,912  $(14,244) $10,668  $6,611  $— $6,611 
Weighted-average basic shares outstanding  24,223   —   24,223   24,264   —  24,264 
Basic $1.03  $0.59  $0.44  $0.27  $— $0.27 
             
Diluted:            
Income available to common shareholders $24,912  $(14,244) $10,668  $6,611  $— $6,611 
Total weighted-average diluted shares outstanding  24,298   —   24,298   24,306   —  24,306 
Diluted $1.03  $0.59  $0.44  $0.27  $— $0.27 


Reconciliation of Newtek Bank and NewtekOne Inc. Non-GAAP Measures:

Newtek Bank, NAAs of and for the
three months ended 		 As of and for the
six months ended
(in thousands)June 30, 2024 March 31, 2024 June 30, 2023
(as restated)		 June 30, 2024 June 30, 2023
(as restated)
Return on Average Tangible Common Equity         
Numerator: Net Income (Loss) (GAAP)$12,453 $9,402 $6,179 $21,855 $4,258
Average Total Shareholders' Equity1103,678 100,792 77,176 102,235 75,072
Deduct: Average Goodwill and Intangibles11,052 1,100 2,195 1,076 2,193
Denominator: Tangible Average Common Equity1$102,626 $99,692 $74,981 $101,159 $72,879
Return on Average Tangible Common Equity148.8% 37.9% 33.1% 43.4% 11.8%
          
Return on Average Assets         
Numerator: Net Income (GAAP)$12,453 $9,402 $6,179 $21,855 $4,258
Denominator: Average Assets1782,138 652,609 485,963 717,374 386,512
Return on Average Assets16.4% 5.8% 5.1% 6.1% 2.2%
          
Efficiency Ratio         
Numerator: Non-Interest Expense (GAAP)$17,308 $17,433 $13,844 $34,741 $27,066
Net Interest Income (GAAP)9,310 7,722 3,771 17,032 5,782
Non-Interest Income (GAAP)31,641 27,226 21,865 58,867 31,725
Denominator: Total Income$40,951 $34,948 $25,636 $75,899 $37,507
Efficiency Ratio142.3% 49.9% 54.0% 45.8% 72.2%


NewtekOne, Inc.As of and for the
three months ended 		 As of and for the
six months ended
(dollars and number of shares in thousands)June 30, 2024 March 31, 2024 June 30, 2023
(as restated)		 June 30, 2024 June 30, 2023
(as restated)
Return on Average Tangible Common Equity         
Numerator: Net Income (GAAP)$10,945 $9,650 $7,011 $20,595 $25,561
Average Total Shareholders' Equity1258,326 237,831 234,018 248,079 214,014
Deduct: Preferred Stock (GAAP)19,738 19,738 19,738 19,738 19,738
Average Common Shareholders' Equity1238,588 218,093 214,280 228,341 194,276
Deduct: Average Goodwill and Intangibles129,883 30,060 31,879 29,972 31,971
Denominator: Average Tangible Common Equity1$208,705 $188,033 $182,401 $198,369 $162,305
Return on Tangible Common Equity121.1% 20.6% 15.4% 20.9% 31.8%
          
Return on Average Assets         
Numerator: Net Income (GAAP)$10,945 $9,650 $7,011 $20,595 $25,561
Denominator: Average Assets11,551,009 1,401,554 1,355,410 1,476,284 1,240,052
Return on Average Assets12.8% 2.8% 2.1% 2.8% 4.2%
          
Efficiency Ratio         
Numerator: Non-Interest Expense (GAAP)$40,564 $41,159 $37,777 $81,723 $76,800
Net Interest Income (GAAP)9,126 8,906 5,673 18,032 10,256
Non-Interest Income (GAAP)52,020 49,367 44,285 101,387 86,641
Denominator: Total Income$61,146 $58,273 $49,958 $119,419 $96,897
Efficiency Ratio166.3% 70.6% 75.6% 68.4% 79.3%

1 Non-GAAP


Reconciliation of NewtekOne, Inc. Tangible Book Value:

NewtekOne, Inc.June 30, 2024 March 31, 2024 June 30, 2023
(as restated)
Tangible Book Value Per Share     
Total Shareholders' Equity (GAAP)$274,002 $254,132 $235,449
Deduct: Goodwill and Intangibles (GAAP)29,783 29,944 31,667
Numerator: Total Tangible Book Value1$244,219 $224,188 $203,782
Denominator: Total Number of Shares Outstanding25,852 24,715 24,615
Tangible Book Value Per Share1$9.45 $9.07 $8.28
      
Tangible Book Value Per Common Share     
Total Tangible Book Value1$244,219 $224,188 $203,782
Deduct: Preferred Stock (GAAP)19,738 19,738 19,738
Numerator: Tangible Book Value Per Common Share1$224,481 $204,450 $184,044
Denominator: Total Number of Shares Outstanding25,852 24,715 24,615
Tangible Book Value Per Common Share1$8.68 $8.27 $7.48

1 Non-GAAP


FAQ

What were NewtekOne's Q2 2024 financial results?

NewtekOne reported a net income of $10.9 million and an EPS of $0.43 for Q2 2024.

How did NewtekOne's net interest income perform in Q2 2024?

Net interest income increased by 2.2% QoQ to $9.1 million.

What is NewtekOne's 2024 annual EPS forecast?

NewtekOne maintained its 2024 annual EPS forecast in the range of $1.85 to $2.05.

How much did NewtekOne raise through its recent public offering?

NewtekOne completed a $71.875 million public offering of 8.50% fixed-rate senior notes due 2029.

What is the forecast for NewtekOne's SBA 7(a) loan fundings in 2024?

NewtekOne forecasts $935 million in total SBA 7(a) loan fundings for 2024.

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NewtekOne, Inc.

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NEWT Latest News

Nov 14, 2024
NewtekOne, Inc.’s, CEO, Barry Sloane, Interviewed at the LD Micro Main Event XVII Investor Conference
Nov 6, 2024
NewtekOne, Inc. Reports Third Quarter 2024 Earnings of $0.45 per Basic and Diluted Common Share
Nov 4, 2024
NewtekOne, Inc. Hires Ron Lay as Chief Technology Officer at NewtekOne, Inc. and Newtek Bank, N.A.
Oct 31, 2024
NewtekOne, Inc. Announces Appointment of a New Independent Director
Oct 25, 2024
NewtekOne, Inc. CEO, Barry Sloane, to Present at the LD Micro Main Event XVII on October 29, 2024

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