Core Insights - NewtekOne, Inc. is strategically positioned to serve approximately 30 million independent business owners in the U.S. with a diverse ecosystem of financial and business solutions [1][2] - The company has a 20-year history of providing cost-efficient products and services aimed at helping independent business owners grow sales, control expenses, and reduce risk [2][3] Company Overview - NewtekOne operates as a financial holding company, offering a wide range of solutions under the Newtek brand, including banking, business lending, electronic payment processing, technology solutions, eCommerce, and insurance solutions [2][3] - The company has consolidated subsidiaries that enhance its ability to provide comprehensive services to independent business owners across all 50 states [2][3] Leadership Insights - CEO Barry Sloane emphasized the importance of NewtekOne's accomplishments over its two decades of operation and its potential for continued growth as a bank holding company [1]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____to_____ Commission file number: 814-01035 NEWTEKONE, INC. (Exact name of registrant as specified in its charter) | --- | --- | |-------------------------------- ...

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.45 for Q3 2024, which was above the street consensus of $0.43, and would have been $0.47 without a deferred tax charge of $527,000 [10][11][14] - Return on average assets (ROAA) was 6.3%, and return on tangible common equity (ROTCE) was 49%, with a net interest margin (NIM) of 5.29% [20][11] - The provision for loan losses was higher than expected at $6.9 million, indicating a focus on risk-adjusted returns [11][12] Business Line Data and Key Metrics Changes - The bank experienced a 12% growth in deposits and a 17% growth in loans, with a loan loss reserve coverage of 500 basis points [16] - The Alternative Loan Program (ALP) gained traction, contributing to future earnings per share growth potential [17] - The efficiency ratio stood at 39%, indicating strong operational performance compared to industry peers [18] Market Data and Key Metrics Changes - The company completed a registered public offering of $75 million in bonds, with an 8.625% coupon [19] - The average yield on loans was reported at 11.12%, which does not include gain on sale income [20] - The company is positioned to grow its payment processing segment, which is not directly tied to rate movements [28] Company Strategy and Development Direction - The company aims to provide a frictionless banking experience for customers, leveraging technology to enhance service delivery [29] - There is a focus on integrating the payments business with banking services to create a comprehensive ecosystem for small to medium-sized businesses [38] - The company is transitioning to a financial holding company and divesting its technology unit to focus on core banking operations [56][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a diluted earnings per share range of $2 to $2.25 for 2025, reflecting an 8% to 12.5% increase over 2024 [27][29] - The management team emphasized their experience in risk management and their ability to navigate economic challenges, citing past performance during crises [61][66] - The company is optimistic about its growth trajectory, particularly in the ALP and payment processing segments, which are expected to drive future profitability [28][76] Other Important Information - The company has a strong management team with extensive banking experience, which is crucial for scaling operations [72] - The insurance agency business has seen growth, with a 37% increase in active policies since becoming a bank [53] - The company is focused on maintaining transparency and aligning interests with employees and shareholders [80] Q&A Session Summary Question: What are the expectations for future earnings growth? - Management confirmed guidance for 2025 earnings per share in the range of $2 to $2.25, indicating confidence in continued growth despite market volatility [27][29] Question: How is the company managing risk in its loan portfolio? - Management highlighted their proactive approach to risk management, including higher loan loss reserves and a focus on risk-adjusted returns [11][64] Question: What is the strategy for the payment processing segment? - The company is integrating its payment processing services with banking operations to provide a comprehensive solution for small business clients, enhancing customer value [38][41]

| --- | --- | --- | |-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------| | | | | | | NASDAQ: NEWT Third Quarter 2024 Financial Results Conference Call November 7, 2024 Hosted and Presented by: Barry Sloane, CEO & President ...

Core Insights - NewtekOne (NEWT) reported a revenue of $62.83 million for Q3 2024, marking a year-over-year increase of 23.3% and exceeding the Zacks Consensus Estimate of $61.76 million by 1.73% [1] - The company achieved an EPS of $0.45, up from $0.38 a year ago, surpassing the consensus EPS estimate of $0.41 by 9.76% [1] Financial Performance Metrics - Total noninterest income reached $51.85 million, slightly above the average estimate of $51.50 million from three analysts [3] - Net interest income was reported at $10.98 million, exceeding the average estimate of $10.26 million from three analysts [3] - Noninterest income from net gains on sales of loans was $25.68 million, significantly higher than the average estimate of $18.76 million from two analysts [3] - Electronic payment processing income was $11.78 million, below the average estimate of $12.54 million from two analysts [3] - Other noninterest income totaled $11.63 million, surpassing the average estimate of $8.79 million from two analysts [3] - Servicing income was reported at $4.96 million, slightly above the average estimate of $4.75 million from two analysts [3] - Dividend income was $0.37 million, below the average estimate of $0.46 million from two analysts [3] - Technology and IT support income was $3.31 million, significantly lower than the average estimate of $5.92 million from two analysts [3] Stock Performance - Over the past month, NewtekOne shares have returned +3.1%, outperforming the Zacks S&P 500 composite's +0.7% change [4] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [4]

Core Viewpoint - NewtekOne (NEWT) reported quarterly earnings of $0.45 per share, exceeding the Zacks Consensus Estimate of $0.41 per share, and showing an increase from $0.38 per share a year ago [1][2] Financial Performance - The company achieved revenues of $62.83 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.73% and increasing from $50.97 million year-over-year [3] - NewtekOne has surpassed consensus EPS estimates three times over the last four quarters [2][3] Market Performance - NewtekOne shares have declined approximately 4.4% since the beginning of the year, contrasting with the S&P 500's gain of 21.2% [4] - The current Zacks Rank for NewtekOne is 4 (Sell), indicating expectations of underperformance in the near future [7] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.65 on revenues of $71.32 million, and for the current fiscal year, it is $1.90 on revenues of $252.5 million [8] - The estimate revisions trend for NewtekOne has been unfavorable ahead of the earnings release [7] Industry Context - The Financial - Miscellaneous Services industry, to which NewtekOne belongs, is currently ranked in the top 29% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

Core Insights - NewtekOne, Inc. reported financial results for the three and nine months ended September 30, 2024, showing growth in net income and earnings per share compared to previous periods [2][4][7]. Financial Highlights for Q3 2024 - Net income for Q3 2024 was $11.9 million, with earnings per share (EPS) of $0.45, reflecting a 4.7% increase from Q2 2024 and Q3 2023 [2]. - Net interest income increased by 20.9% from $9.1 million in Q2 2024 to $11.0 million in Q3 2024, and by 35.8% from $8.1 million in Q3 2023 [2]. - Total assets reached $1.7 billion, a 21.4% increase from $1.4 billion at the end of 2023 [2]. - Loans held for investment rose to $913.0 million, a 13.3% increase from $806.1 million at the end of 2023 [2]. - The net interest margin improved to 3.08%, up 14.1% from Q2 2024 and 18.5% from Q3 2023 [2]. - Return on Tangible Common Equity (ROTCE) was 21.3%, a slight decrease from 21.4% in Q2 2024 and a significant decrease from 24.9% in Q3 2023 [2]. - The efficiency ratio improved to 61.8%, down from 66.3% in Q2 2024 and 63.8% in Q3 2023 [2]. Financial Highlights for YTD Q3 2024 - For the nine months ended September 30, 2024, net income was $32.5 million, with EPS of $1.26, compared to $36.5 million and $1.46 in the same period of 2023 [4]. - Net interest income for the nine months was $29.0 million, a 58.5% increase from $18.3 million in the same period of 2023 [4]. - The efficiency ratio improved to 66.2%, down from 74.1% in the same period of 2023 [4]. Newtek Bank Highlights - Total deposits at Newtek Bank were $745.7 million, a 12.4% increase from $663.7 million in Q2 2024 and a 43.7% increase from $519.1 million at the end of 2023 [5]. - The net interest margin for Newtek Bank was 5.29%, up 9.5% from Q2 2024 and 49.9% from Q3 2023 [5]. - ROTCE for Newtek Bank was 49.3%, an increase from 48.9% in Q2 2024 and 44.1% in Q3 2023 [5]. Lending Highlights - SBA 7(a) loan closings totaled $245.3 million for Q3 2024, a 12.5% increase from $218.0 million in Q3 2023 [6]. - Newtek Bank closed $38.4 million of SBA 504 loans, a 117.0% increase from $17.7 million in Q3 2023 [6]. - Total loans closed across all products reached $372.1 million, a 43.0% increase from $260.2 million in Q3 2023 [6]. Future Outlook - The company maintains its 2024 annual EPS forecast range of $1.85 to $2.05 and forecasts a 2025 EPS range of $2.00 to $2.25 [3][9].

Core Insights - NewtekOne (NEWT) is expected to report quarterly earnings of $0.41 per share, a 7.9% increase year-over-year, with revenues projected at $61.76 million, reflecting a 21.2% year-over-year growth [1] Earnings Projections - There have been no revisions in the consensus EPS estimate for the quarter over the last 30 days, indicating stability in analysts' forecasts [1][2] - Changes in earnings projections are crucial for predicting investor reactions to the stock [2] Key Financial Metrics - Analysts estimate 'Net interest income' to be $10.26 million, up from $8.08 million a year ago [4] - 'Noninterest income- Net gains on sales of loans' is projected to reach $18.76 million, compared to $12.72 million last year [4] - 'Noninterest income- Electronic payment processing income' is expected to be $12.54 million, an increase from $11.19 million [5] - 'Noninterest income- Other noninterest income' is forecasted at $8.79 million, up from $7.65 million [5] - 'Noninterest income- Servicing income' is likely to reach $4.75 million, compared to $4.60 million in the same quarter last year [6] - 'Noninterest income- Technology and IT support income' is estimated at $5.92 million, up from $5.50 million a year ago [6] Stock Performance - NewtekOne shares have increased by 1.7% over the past month, contrasting with a -0.5% change in the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 4 (Sell), indicating expectations of underperformance relative to the overall market in the near term [6]

Core Viewpoint - NewtekOne, Inc. has appointed Craig "CJ" Brunet to its boards of directors, enhancing its focus on risk management and technology strategy [1][3]. Company Overview - NewtekOne, Inc. is a financial holding company that provides a variety of business and financial solutions to independent business owners across the United States since 1999 [4]. - The company operates under the Newtek brand and offers services including banking, business lending, electronic payment processing, technology solutions, eCommerce, accounts receivable financing, insurance solutions, and payroll services [5]. Appointment of Craig "CJ" Brunet - CJ Brunet brings over 50 years of experience in information technology and financial services, with expertise in strategic planning, mergers and acquisitions, SaaS, cyber security, compliance, and risk management [2]. - He has previously held significant roles within NewtekOne, including CIO, CTO, and President/COO of Newtek Technology Solutions, and is expected to chair a new Technology Steering Committee [3]. Strategic Importance - The addition of Brunet to the board is seen as a strategic move to enhance the company's risk management capabilities and technology initiatives, aligning with the company's growth objectives [3].

Core Viewpoint - NewtekOne, Inc. will have its CEO Barry Sloane present at the LD Micro Main Event XVII on October 29, 2024, and will also hold one-on-one meetings on October 29-30, 2024 [1] Group 1: Company Overview - NewtekOne, Inc. is a financial holding company that provides a wide range of business and financial solutions to independent business owners across all 50 states since 1999 [2] - The company's services include banking, business lending, SBA lending solutions, electronic payment processing, technology solutions, eCommerce, accounts receivable financing, inventory financing, insurance solutions, web services, and payroll and benefits solutions [2] Group 2: Event Details - Barry Sloane's presentation will be available via a real-time webcast on NewtekOne's website, with a replay accessible shortly after the live event [1]