Core Viewpoint - NewtekOne, Inc. is set to report its second quarter 2025 financial results on July 28, 2025, with expectations of continued progress in its business plan [1][2]. Group 1: Financial Results Announcement - The company will release its second quarter 2025 financial results after market close on July 28, 2025 [1]. - A conference call to discuss these results will be hosted by key executives at 4:30 pm ET on the same day [1][2]. - Investors can pre-register for the conference call to receive dial-in information and access the webcast [2]. Group 2: Business Overview - NewtekOne is a financial holding company that provides a variety of business and financial solutions to independent business owners across all 50 states [3]. - The company has been operational since 1999, offering cost-efficient products and services aimed at helping businesses grow sales, control expenses, and reduce risk [3]. Group 3: Services Offered - NewtekOne's services include banking, business lending, SBA lending solutions, electronic payment processing, accounts receivable financing, inventory financing, insurance solutions, and payroll and benefits solutions [4]. - The company also provides technology solutions such as cloud computing, data backup, storage and retrieval, IT consulting, and web services through its subsidiary Intelligent Protection Management Corp. [4].

Group 1 - NewtekOne, Inc. has issued 8.625% Fixed Rate Senior Notes due 2029, which are categorized as baby notes and have received limited analyst coverage [1] - Analysts have highlighted the company's strong balance sheet and limited leverage as positive attributes [1]

Company Overview - NewtekOne (NASDAQ: NEWT) is guiding for fiscal 2025 full-year earnings per share to be in the range of $2.10 to $2.50, which exceeds consensus estimates of $2.25 at the midpoint [1] Market Insights - The equity market serves as a powerful mechanism where daily price fluctuations can lead to significant wealth creation or destruction over the long term [1] - Pacifica Yield aims to pursue long-term wealth creation by focusing on undervalued yet high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Group 1 - Transformative acquisitions require significant risk tolerance and strategic asset management, especially in volatile macroeconomic conditions [1] - NewtekOne, Inc. (NASDAQ: NEWT) exemplifies a company engaging in transformative acquisitions [1] Group 2 - The logistics sector has seen increased interest from investors, with a focus on diversification across various industries and market capitalizations [1] - The article highlights the importance of comparing analyses between different markets, such as the US and ASEAN [1]

Company Structure and Operations - In 2023, the company converted to a financial holding company from a BDC and a non-bank lender, acquiring NBNYC, which has been renamed Newtek Bank[167]. - Newtek Bank is currently the second largest SBA 7(a) lender in the U.S. based on dollar volume of loans approved, following a transition of SBA 7(a) loan originations from NSBF[173]. - The company offers a range of financial products including SBA 7(a), ALP, SBA 504 loans, and various deposit products such as high yield savings accounts and business checking accounts[167]. - The company sources its business through an alliance partner network and a marketing database facilitated by its patented NewTracker® platform[167]. - The company no longer qualifies as a RIC for U.S. federal income tax purposes and filed a consolidated U.S. federal income tax return beginning with the 2023 fiscal year[172]. Financial Performance - For the three months ended March 31, 2025, the company reported net income of $9.4 million, a decrease of 3.1% from $9.7 million in the same period of 2024[202]. - The Banking segment reported net income of $6.027 million, down 36% from $9.401 million year-over-year, despite an increase in net interest income to $12.7 million from $7.7 million[241]. - Alternative Lending segment saw a significant increase in net income to $23.129 million, up 155% from $9.062 million in the prior year, driven by higher loan originations[240][242]. - NSBF segment experienced a net loss of $4.954 million, a 438% increase in losses compared to a loss of $920, attributed to the wind-down of operations[240][243]. - Consolidated net income for the three months ended March 31, 2025, was $9.367 million, a decrease of 3% from $9.650 million in the same period of 2024[240]. Loan and Asset Management - The company holds CECL reserves on loans held for investment at amortized cost, with unguaranteed SBA 7(a) loans exceeding 6%[167]. - Loans held for investment at amortized cost increased by $89.5 million, reflecting higher originations in Q1 2025 compared to the same period in 2024[190]. - As of March 31, 2025, total loans held for investment (HFI) at amortized cost were $711.166 million, an increase from $621.651 million as of December 31, 2024, representing a growth of 14.4%[191]. - The allowance for credit losses increased to $38.649 million (5.4% of total loans) as of March 31, 2025, compared to $30.233 million (4.9%) at the end of 2024[191]. - Nonaccrual loans at amortized cost rose to $38.125 million (5.4%) from $24.341 million (3.9%) in the previous quarter, indicating a deterioration in credit quality[191]. Regulatory Compliance and Risk Management - The company is subject to regulation and supervision by the Federal Reserve and the OCC, requiring investments in technology and personnel to comply with regulatory standards[169]. - The company has guaranteed certain obligations of NSBF to the SBA and funded a $10.0 million account to secure these potential obligations[170]. - The company has established an Asset/Liability Committee to oversee risk management related to interest rate and liquidity risks[321]. - The company’s interest rate risk profile may transition between asset sensitivity and liability sensitivity depending on the scenario and timing of anticipated rate changes[324]. Income and Expenses - Total interest income rose to $37.9 million in Q1 2025, up 40.0% from $27.1 million in Q1 2024, driven by a $9.5 million increase in interest income on loans[204]. - Interest expense increased to $24.0 million in Q1 2025, a rise of 32.0% from $18.2 million in Q1 2024, primarily due to a $4.3 million increase in interest on deposits[207]. - Noninterest income increased to $52.4 million in Q1 2025, up 6.1% from $49.4 million in Q1 2024, reflecting growth in various service fees[203]. - Total noninterest expense remained relatively stable, with a slight increase of $18, or less than 0.1%, compared to the previous year[234]. - Salaries and employee benefits expense increased by $0.81 million, or 4.0%, primarily due to higher benefits costs[234]. Capital and Liquidity - The Company had total liquidity sources of $341.2 million as of March 31, 2025, down from $483.8 million as of December 31, 2024[272]. - The Company’s Tier 1 Capital to Average Assets ratio was 12.2% as of March 31, 2025, compared to 13.7% as of March 31, 2024[270]. - The Company completed a registered offering of $71.9 million in 2029 8.50% Notes, with proceeds of $69.6 million received before expenses[250]. - The total cash and restricted cash at the end of the period was $294.1 million, down from $381.4 million at the beginning of the period[274]. - The company has restricted cash of $24.2 million as of March 31, 2025, including $5.0 million held by NSBF for securitization obligations[273]. Market and Economic Factors - The estimated percentage change in Economic Value of Equity (EVE) for a +200 basis point change is 0.6% as of March 31, 2025[326]. - A -100 basis point change in interest rates is projected to decrease NII by 5.5% for the 12 months beginning March 31, 2025[326]. - The EVE analysis indicates that the company would modestly increase market value in a rising rate environment due to its asset sensitivity[327]. - The company regularly models various forecasted rate projections to assess and manage potential risks from interest rate shifts[324].

Core Viewpoint - NewtekOne, Inc. held its First Quarter 2025 Earnings Conference Call, highlighting key financial results and company updates. Group 1: Company Overview - Barry Sloane serves as the Chairman, President, and CEO of NewtekOne, Inc. [2] - The conference call included participation from CFOs Scott Price and Frank DeMaria, representing Newtek Bank National Association and NewtekOne, respectively [3]. Group 2: Conference Call Details - The conference call was recorded and included a presentation available on the company's website for investors [3]. - The company acknowledged the contributions of Bryce Rowe, the new VP of Investor Relations, for his efforts in preparing the presentation and press release [4].

Financial Data and Key Metrics Changes - The first quarter earnings per share (EPS) were reported at $0.35 diluted and $0.36 basic, exceeding the consensus estimate of $0.31, with a previous forecast range of $0.28 to $0.32 [18][20] - The company maintained its annual EPS growth projection range of $2.10 to $2.50, indicating a projected growth of 17% using the midpoint [19][20] - Return on assets for the first quarter was reported at 1.18%, compared to the average of 90 basis points for banks with assets between $1 billion and $10 billion [21] Business Line Data and Key Metrics Changes - The alternative loan program (ALP) has shown significant success, with loans being of better quality than the SBA loans, and the average FICO score for these loans is around 740 [25][26] - The company reported a successful securitization with a 570 basis point spread between the net yield on the loans and the yield on the bonds [27] - The efficiency ratio for the holding company improved from 71% to 63%, indicating better operational efficiency [28] Market Data and Key Metrics Changes - Deposits were relatively flat compared to the previous quarter, with a shift towards core deposits in the business and consumer spaces [64] - The average cost of deposits was approximately 4%, expected to decrease to around 3.8% to 3.85% for the full year of 2025 [65] - The net interest margin (NIM) expanded year over year, with net interest income increasing by 56% compared to the previous year [67] Company Strategy and Development Direction - The company positions itself as a technology-enabled financial holding company, focusing on providing business and financial solutions to independent business owners, avoiding consumer loans [13][14] - The management emphasized the importance of adapting to market changes and indicated that further personnel changes may occur to align with strategic goals [82][84] - The company aims to leverage its digital banking capabilities to enhance customer acquisition and operational efficiency [15][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds in 2025 but expressed confidence in the company's ability to navigate challenges, particularly in loan acquisition [20][22] - The management highlighted that the first quarter is typically the weakest quarter, and historical trends indicate stronger performance in subsequent quarters [22] - The company is focused on maintaining profitability despite credit concerns and emphasized the importance of understanding its unique business model [21][11] Other Important Information - The company has seen a significant increase in shareholder equity, growing from $6.92 to $10.16 over two years, despite paying dividends [36] - The management noted that the merchant solutions business generates substantial EBITDA, contributing to overall profitability [39] - The company has a unique position in the market, with more capital deployed in activities outside of the bank than within it, which differentiates it from traditional banks [50] Q&A Session Summary Question: Sustainability of net gain on loans under fair value option - Management indicated that the gains from ALP loans are expected to be sustainable, with detailed calculations available in the upcoming reports [72][74] Question: Rationale behind recent management changes - Management acknowledged that changes are part of adapting to market dynamics and emphasized the importance of having focused leadership in key areas [82][84] Question: Breakdown of fair value gains this quarter - Management clarified that the fair value gains were influenced by securitization strategies and market conditions, with specific figures to be detailed in future reports [96][98]

Financial Data and Key Metrics Changes - The first quarter earnings per share (EPS) were reported at $0.35 diluted and $0.36 basic, exceeding the consensus estimate of $0.31, with a previous forecast range of $0.28 to $0.32 [17][18] - The company maintained its annual EPS growth projection range of $2.10 to $2.50, indicating a projected growth of 17% using the midpoint [18] - Return on assets for the first quarter was reported at 1.18%, compared to the average of 90 basis points for banks with assets between $1 billion and $10 billion [20] Business Line Data and Key Metrics Changes - The alternative loan program (ALP) has shown significant success, with loans being of higher quality than the SBA loans, and the average FICO score for these loans is around 740 [24][25] - The company reported a successful securitization with a 570 basis point spread between the net yield on the loans and the yield on the bonds [26] - The efficiency ratio for the holding company declined from 71% to 63%, indicating improved operational efficiency [27] Market Data and Key Metrics Changes - Deposits were relatively flat compared to the previous quarter, with a shift towards core deposits in the business and consumer spaces [61] - The average cost of deposits was approximately 4%, expected to decrease to around 3.8% to 3.85% for the full year of 2025 [62] - The net interest margin (NIM) increased year over year by 56%, with a quarter-over-quarter expansion of 24 basis points [64] Company Strategy and Development Direction - The company positions itself as a technology-enabled financial holding company, focusing on providing business and financial solutions to independent business owners, avoiding consumer loans [12][13] - The management emphasized the importance of adapting to market changes and indicated that further personnel changes may occur as the company evolves [78][84] - The company aims to leverage its digital banking capabilities to enhance customer acquisition and operational efficiency [14][19] Management Comments on Operating Environment and Future Outlook - Management acknowledged headwinds in 2025 but expressed confidence in the company's ability to navigate challenges, particularly in loan acquisition [20][21] - The management highlighted that Q1 is typically the weakest quarter, and comparisons with Q4 revenues should be approached with caution [21] - The company is optimistic about the sustainability of its earnings and projections, particularly in the ALP segment [76] Other Important Information - The company has seen a significant reduction in losses from its non-bank SBA lending subsidiary, with a decline of over 50% [22] - The management noted that the company has a unique business model that does not conform to traditional bank metrics, emphasizing its diversified revenue streams [7][48] - The company has a strong focus on maintaining a low-cost structure while providing high-quality financial solutions [15][19] Q&A Session Summary Question: Sustainability of net gains on loans under fair value option - Management indicated that the gains are expected to be sustainable throughout 2025, with specific metrics provided on ALP loans and their pricing [69][70] Question: Rationale behind recent management changes - Management acknowledged that changes are part of adapting to market dynamics and emphasized the importance of having focused leadership in key areas [78][84] Question: Breakdown of fair value gains this quarter - Management clarified that the fair value gains were driven by securitization and market execution, with specific figures provided for SBA loan sales [90][92]

Core Insights - NewtekOne (NEWT) reported revenue of $66.33 million for Q1 2025, a year-over-year increase of 13.8% [1] - The EPS for the same period was $0.35, down from $0.38 a year ago, with a surprise of +2.94% compared to the consensus estimate of $0.34 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $64.67 million, resulting in a surprise of +2.58% [1] Financial Performance Metrics - Efficiency Ratio was 62.1%, better than the average estimate of 67.6% from two analysts [4] - Net Interest Margin remained stable at 3%, matching the average estimate [4] - Noninterest income from Dividend income was $1.69 million, significantly higher than the average estimate of $0.40 million [4] - Noninterest income from Loan servicing asset revaluation was -$3.65 million, worse than the average estimate of -$1.80 million [4] - Noninterest income from Servicing income was $5.53 million, exceeding the average estimate of $4.98 million [4] - Net interest income was reported at $13.93 million, surpassing the average estimate of $13.15 million [4] - Noninterest income from Electronic payment processing income was $10.61 million, slightly below the average estimate of $11.47 million [4] - Noninterest income from Other noninterest income was $7.19 million, lower than the average estimate of $11.42 million [4] - Total noninterest income reached $52.40 million, above the average estimate of $51.52 million [4] - Noninterest income from Net gains on sales of loans was $12.96 million, significantly lower than the average estimate of $20.48 million [4] Stock Performance - NewtekOne shares returned -0.3% over the past month, while the Zacks S&P 500 composite increased by +11.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Group 1 - NewtekOne (NEWT) reported quarterly earnings of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, but down from $0.38 per share a year ago [1] - The company achieved a revenue of $66.33 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.58% and up from $58.27 million year-over-year [3] - Over the last four quarters, NewtekOne has consistently surpassed consensus EPS and revenue estimates [2][3] Group 2 - The stock has underperformed, losing approximately 22.9% since the beginning of the year, compared to a decline of 3.9% for the S&P 500 [4] - The current consensus EPS estimate for the upcoming quarter is $0.52 on revenues of $72.27 million, and for the current fiscal year, it is $2.20 on revenues of $293.85 million [8] - The Financial - Miscellaneous Services industry, to which NewtekOne belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook [9]