Core Viewpoint - NewtekOne, Inc. has completed a transaction with Patriot Financial Partners, resulting in the issuance of 2,307,692 shares of common stock in exchange for 20,000 shares of convertible preferred stock and $10 million in cash, which is expected to enhance the company's capital structure and tangible book value per share [1][2][3]. Group 1: Transaction Details - The transaction involved the exchange of 20,000 shares of Series A Preferred Stock and $10 million in cash for 2,307,692 shares of common stock [1]. - Patriot relinquished the right to convert the preferred stock into 950,800 shares of common stock as part of the deal [1]. - The common shares were issued in a private placement under Section 4(a)(2) of the Securities Act of 1933, with a two-year transfer restriction [1]. Group 2: Capital Impact - The transaction is projected to increase the company's common equity tier one capital (CET1 capital) and tier one capital by $30 million [2]. - Pro forma as of June 30, 2025, CET1 capital will rise from $256 million to $286 million due to this transaction [2]. - When combined with $48.357 million from a previous offering, tier one capital will increase from $256 million to $335 million, and tangible book value per common share will reach approximately $10.74 [2]. Group 3: Management Commentary - Barry Sloane, Chairman and CEO of NewtekOne, expressed satisfaction with the transaction, highlighting the confidence shown by Patriot in the company's strategy and management [3]. - Kirk Wycoff, Managing Partner of Patriot, emphasized the excitement of converting preferred stock to common equity and the additional investment, reflecting confidence in NewtekOne's operational execution and business strategy [3]. Group 4: Company Overview - NewtekOne is a financial holding company providing a range of business and financial solutions to independent business owners across the U.S. since 1999 [5]. - The company's offerings include banking, business lending, electronic payment processing, and technology solutions [6].

Core Insights - The article discusses the challenges and unpredictability of financial markets, emphasizing the difficulty in accurately predicting trends and identifying value opportunities [1]. Group 1 - The author expresses a strong interest in financial history and its application to current market analysis [1]. - There is a focus on the subjective nature of opinions regarding market predictions, suggesting that they should be taken with caution [2]. - The article highlights the importance of individual analysis in understanding market dynamics, rather than relying solely on external recommendations [3].

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Group 1 - The article discusses NewtekOne's recently listed IPO, which features an 8.500% Fixed-Rate Reset Non-Cumulative structure [1] - The focus is on new fixed-income vehicles available on the exchange, indicating a trend towards innovative financial products [1] Group 2 - The article emphasizes that all active investors are welcome to join a free trial and engage in discussions with sophisticated traders and investors [1]

BOCA RATON, Fla., Aug. 25, 2025 (GLOBE NEWSWIRE) -- On August 20, 2025, NewtekOne, Inc. (the “Company” or “NewtekOne”) (NASDAQ: NEWT) successfully closed an offering of 2,000,000 depositary shares (the “Depositary Shares”), each representing a 1/40th interest in a share of the Company's 8.500% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25.00 per Depositary Share). The offering generat ...

[PART I - FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents NewtekOne's unaudited consolidated financial statements for Q2 2025 and comparative 2024, covering financial condition, income, comprehensive income, equity, and cash flows, with detailed accounting notes [Consolidated Statements of Financial Condition](index=7&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) As of June 30, 2025, total assets increased to $2.13 billion, liabilities to $1.81 billion, and shareholders' equity to $312.2 million, reflecting growth in loans and deposits Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $2,126,217 | $2,059,912 | | Total Loans, Net | $1,598,215 | $1,392,253 | | Total Deposits | $1,083,828 | $973,052 | | Total Liabilities | $1,814,037 | $1,763,630 | | Total Shareholders' Equity | $312,180 | $296,282 | [Consolidated Statements of Income](index=9&type=section&id=Consolidated%20Statements%20of%20Income) For the six months ended June 30, 2025, net income available to common shareholders increased to $22.3 million from $19.8 million, driven by higher net interest income and securitization gains, resulting in diluted EPS of $0.87, up from $0.81 Key Income Statement Data (in thousands, except EPS) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Interest Income | $27,856 | $18,032 | | Provision for Credit Losses | $22,622 | $9,814 | | Total Noninterest Income | $108,673 | $101,387 | | Total Noninterest Expense | $83,486 | $81,723 | | Net Income Available to Common Shareholders | $22,270 | $19,795 | | Diluted EPS | $0.87 | $0.81 | [Consolidated Statements of Cash Flows](index=15&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company experienced a net cash decrease of $168.1 million, primarily due to $260.5 million used in operating activities and $124.1 million in investing activities, partially offset by $216.5 million provided by financing activities Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(260,518) | $(35,751) | | Net Cash Used in Investing Activities | $(124,076) | $(97,763) | | Net Cash Provided by Financing Activities | $216,509 | $155,846 | | **Net (Decrease) Increase in Cash** | **$(168,085)** | **$22,332** | [Notes to Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on the company's accounting policies, business segments, loan portfolios, securitization activities, fair value measurements, and debt obligations, including specifics on ACL methodology under CECL and Variable Interest Entities (VIEs) - The company is a financial holding company providing solutions to small and medium-sized businesses (SMBs) through its consolidated subsidiaries, including Newtek Bank[28](index=28&type=chunk) - The Allowance for Credit Losses (ACL) is estimated using the Current Expected Credit Loss (CECL) model, which requires an estimate of credit losses expected over the life of a loan or pool of loans[41](index=41&type=chunk) - The company consolidates Variable Interest Entities (VIEs) when it is determined to be the primary beneficiary, which includes several securitization trusts holding unguaranteed portions of SBA 7(a) loans[40](index=40&type=chunk)[68](index=68&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=63&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operational results, providing an executive overview of its SMB-focused financial holding company business, including a detailed comparison of financial performance for Q2 2025 and 2024, liquidity, capital resources, and critical accounting policies [Executive Overview](index=64&type=section&id=Executive%20Overview) NewtekOne operates as a financial holding company with a branchless national bank focused on SMBs, primarily generating income from noninterest sources like SBA 7(a) loan sales and market value adjustments, funded by deposits, credit lines, and securitizations, and regulated by the Federal Reserve and OCC - NewtekOne is a financial holding company with a branchless, OCC-chartered national bank focused on the SMB market[187](index=187&type=chunk) - The majority of income is driven by noninterest income, particularly gains on sales of SBA 7(a) loans and market value adjustments[187](index=187&type=chunk) - Funding sources include deposit products, capital and lines of credit for non-bank loans, securitizations, and public/private bond issuance[188](index=188&type=chunk) [Financial Condition](index=68&type=section&id=Financial%20Condition) As of June 30, 2025, total assets grew 3.2% to $2.1 billion, driven by increased loans, while total liabilities rose 2.9% to $1.8 billion due to higher deposits, and total borrowings decreased by $50.7 million Change in Assets and Liabilities (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $2,126,217 | $2,059,912 | $66,305 | | Total Loans, Net | $1,598,215 | $1,392,253 | $205,962 | | Total Deposits | $1,083,828 | $973,052 | $110,244 | | Total Borrowings | $657,327 | $708,041 | $(50,714) | - Non-accrual loans as a percentage of loans held at amortized cost increased to **6.0%** at June 30, 2025, from **3.9%** at December 31, 2024[209](index=209&type=chunk) [Results of Operations](index=73&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's operational results for the three and six-month periods ending June 30, 2025, and 2024, showing net income growth to $23.1 million for six months and $13.7 million for three months, driven by higher net interest income and securitization gains Six Months Ended June 30 - Performance Summary (in thousands) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $27,856 | $18,032 | $9,824 | | Provision for Credit Losses | $22,622 | $9,814 | $12,808 | | Noninterest Income | $108,673 | $101,387 | $7,286 | | Net Income | $23,070 | $20,595 | $2,475 | Three Months Ended June 30 - Performance Summary (in thousands) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $13,923 | $9,126 | $4,797 | | Provision for Credit Losses | $9,117 | $5,799 | $3,318 | | Noninterest Income | $56,275 | $52,020 | $4,255 | | Net Income | $13,703 | $10,945 | $2,758 | - A significant driver of noninterest income in 2025 was a **$31.5 million** gain on residuals from a new securitization transaction, which did not occur in 2024[246](index=246&type=chunk)[285](index=285&type=chunk) - Net gains on sales of loans decreased by **33.5%** for the six-month period, from **$42.9 million** in 2024 to **$28.5 million** in 2025, due to lower sales volume and slightly lower premiums[238](index=238&type=chunk)[243](index=243&type=chunk) [Liquidity and Capital Resources](index=90&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity, sourced from deposits, notes, securitizations, and operations, totaled $287.2 million as of June 30, 2025, with all capital ratios for both the holding company and Newtek Bank exceeding 'well-capitalized' thresholds - Total liquidity sources stood at **$287.2 million** as of June 30, 2025, down from **$483.8 million** at year-end 2024, primarily due to a decrease in interest-bearing deposits held in other banks[331](index=331&type=chunk) - The company maintains an 'at-the-market' (ATM) equity program allowing for the sale of up to **5.0 million** shares of common stock[304](index=304&type=chunk)[305](index=305&type=chunk) Newtek Bank Capital Ratios (June 30, 2025) | Ratio | Actual | Well-Capitalized Minimum | | :--- | :--- | :--- | | Tier 1 Capital (to Average Assets) | 11.4% | 5.0% | | Common Equity Tier 1 (to RWA) | 13.0% | 6.5% | | Tier 1 Capital (to RWA) | 13.0% | 8.0% | | Total Capital (to RWA) | 14.2% | 10.0% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=102&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include interest rate fluctuations, funding availability, and the SBA secondary market, with interest rate risk managed by ALCO through EVE and NII simulations, indicating an asset-sensitive position as of June 30, 2025 - Principal market risks include interest rate fluctuations, funding ability, and the health of the secondary market for SBA loans[373](index=373&type=chunk) Interest Rate Sensitivity Analysis (as of June 30, 2025) | Rate Change (bps) | Estimated Change in NII (12 Months) | Estimated Change in EVE | | :--- | :--- | :--- | | +200 | +17.0% | +1.4% | | +100 | +8.4% | +0.7% | | -100 | -9.7% | -0.6% | | -200 | -19.1% | -1.0% | - The company is considered asset-sensitive, as its variable-rate loan portfolio is expected to reprice faster than its funding sources in a changing rate environment[384](index=384&type=chunk) [Item 4. Controls and Procedures](index=105&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting identified during the quarter - Management concluded that disclosure controls and procedures were effective as of the end of the period covered by this report[388](index=388&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter ended June 30, 2025[389](index=389&type=chunk) [PART II - OTHER INFORMATION](index=106&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=106&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to routine legal proceedings, with management believing pending matters will not materially affect financial condition or results, while subsidiary NMS continues under a 2012 FTC permanent injunction - Management believes that pending legal matters will not have a material impact on the company's financial position or results[392](index=392&type=chunk) [Item 1A. Risk Factors](index=106&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2024 Form 10-K, advising investors to consider those existing risks - No material changes have occurred from the risk factors disclosed in the company's 2024 Form 10-K[394](index=394&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=106&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued a small number of unregistered common stock shares for dividends on unvested restricted stock awards, totaling 35 shares valued at $367 for the six months ended June 30, 2025 Unregistered Shares Issued for RSA Dividends | Period | Shares Issued | Value | | :--- | :--- | :--- | | Six Months Ended June 30, 2025 | 35 | $367 | | Six Months Ended June 30, 2024 | 12 | $149 |

Core Insights - NewtekOne, Inc. and its subsidiary Newtek Bank have introduced an integrated onboarding process for independent business owners, allowing them to obtain a Newtek Zero-Fee Business Banking checking account and a merchant payment solution simultaneously through a single online application [1][2]. Group 1: Product Offering - The unified onboarding experience enables business owners to manage payments and cash flow in one step, with automatic approval for both Newtek Bank checking accounts and NMS merchant accounts [2]. - The Instant Merchant Account feature allows business owners to accept debit and credit card payments immediately, eliminating the need for multiple applications [2][4]. Group 2: Technology and User Experience - The Newtek Advantage Dashboard provides a real-time online portal for various business services, including banking, payments, payroll, and IT solutions, offering transparency and control that traditional banks cannot match [3][4]. - Barry Sloane, CEO, emphasized the need for a streamlined, real-time solution for independent business owners, highlighting the integration of multiple services into one application [4]. Group 3: Company Background - NewtekOne has been providing a range of business and financial solutions since 1999, aiming to help independent business owners grow sales, control expenses, and reduce risk [5]. - The company's offerings include banking, business lending, electronic payment processing, and technology solutions, among others [6].

Core Viewpoint - NewtekOne, Inc. has amended its revolving credit facility with Capital One, increasing the facility from $60 million to $100 million and extending its maturity by two years, which supports the origination of Alternative Loan Program loans before securitization [1][2]. Group 1: Company Overview - NewtekOne is a financial holding company that provides a variety of business and financial solutions to independent business owners across all 50 states since 1999 [3]. - The company's offerings include banking, business lending, SBA lending solutions, electronic payment processing, accounts receivable financing, inventory financing, insurance solutions, payroll and benefits solutions, and technology solutions [4]. Group 2: Partnership and Financing - The relationship between NewtekOne and Capital One spans nearly 15 years, with Capital One playing a crucial role in NewtekOne's growth as a non-bank lender and financial holding company [2]. - The recent amendment to the Capital One facility follows a similar amendment to the Deutsche Bank ALP facility, indicating a strategic expansion in financing capabilities [1][2].

Core Viewpoint - NewtekOne (NEWT) reported quarterly earnings of $0.52 per share, exceeding the Zacks Consensus Estimate of $0.50 per share, and showing an increase from $0.43 per share a year ago [1][2]. Financial Performance - The earnings surprise for the quarter was +4.00%, with the company having surpassed consensus EPS estimates in all four of the last quarters [2]. - NewtekOne's revenues for the quarter ended June 2025 were $70.2 million, which fell short of the Zacks Consensus Estimate by 4.75%, compared to $61.15 million in the same quarter last year [3]. - The company has exceeded consensus revenue estimates three times in the last four quarters [3]. Stock Performance and Outlook - NewtekOne shares have declined approximately 8.3% since the beginning of the year, while the S&P 500 has gained 8.6% [4]. - The company's earnings outlook is mixed, with a current Zacks Rank of 3 (Hold), indicating expected performance in line with the market in the near future [7]. - The consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $78.68 million, and for the current fiscal year, it is $2.22 on revenues of $303.41 million [8]. Industry Context - The Financial - Miscellaneous Services industry, to which NewtekOne belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9].

Financial Data and Key Metrics Changes - The company reported a revenue growth of 15% in Q2 2025, reaching $78.2 million compared to $61 million in Q2 2024 [14] - Earnings per share (EPS) guidance for 2024 is maintained at $2.1 to $2.5, with basic and diluted EPS for Q2 2025 at $0.53 and $0.52 respectively [22][25] - The cost of funds at the bank decreased by 28 basis points to 3.71%, while the net interest margin increased by 56 basis points [16][17] Business Line Data and Key Metrics Changes - Business deposits grew by $50 million sequentially, with most funds coming from demand deposit accounts [16] - Losses in Newtek Small Business Finance decreased from $10.7 million to $3.7 million over recent quarters [18] - The alternative loan program (ALP) has completed three successful securitizations and is growing with high-quality loans [19][20] Market Data and Key Metrics Changes - The company serves over 33 million independent business owners in the U.S., contributing to 43% of U.S. GDP [9] - The company has supported over 110,000 jobs through its lending activities over the past five and a half years [9] Company Strategy and Development Direction - The company aims to leverage technology and artificial intelligence to enhance customer acquisition and service delivery [12][28] - The focus is on providing integrated financial solutions to small and medium-sized businesses, moving away from traditional banking models [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a billion dollars in SBA loan originations for the year despite market challenges [95][104] - The company anticipates an increase in provisions in the second half of the year, reflecting a cautious approach to credit quality [122][123] Other Important Information - The company has a strong pre-provision earnings profile, benefiting from wider lending spreads and healthy fee income [53] - The efficiency ratio improved year-over-year from 66.3% to 60.3% [25] Q&A Session Summary Question: What helped bring in $50 million of growth on the commercial deposit side? - Management attributed the growth to the competitive offerings of business accounts and the integration of banking services with lending and payroll solutions [61][64] Question: What were the total charge-offs this quarter for the held-for-investment portfolio? - Total charge-offs were reported at $5 million, consistent with the previous quarter [65][66] Question: Can you break down the various drivers that went through the net fair value line item? - The primary component of the negative $11.7 million was the reversal of previous unrealized gains on ALP loans, which were written down to par [69][71] Question: Will the net gain in residuals and securitizations only occur with ALP securitizations? - Management confirmed that this is the first time they own 100% of the residual, which differs from previous joint ventures [92] Question: What are the expectations for SBA loan volumes following recent rule changes? - Management does not expect a drop in volumes, maintaining guidance for $1 billion in SBA loans for the year [95][104]