This story was originally published on Manufacturing Dive. To receive daily news and insights, subscribe to our free daily Manufacturing Dive newsletter. Dive Brief: The U.S. Small Business Administration awarded $3.65 billion in government-backed 7(a) and 504 loans to the manufacturing sector in fiscal year 2025, according to agency data. That was up 16.7% compared with the previous year. The agency delivered 4,456 total loans valued at nearly $2.8 billion to manufacturing borrowers through its 7(a) pro ...

Summary of NewtekOne Investor Day Conference Call Company Overview - **Company Name**: NewtekOne - **Founded**: 1998, originally as a small business solutions provider - **Current Structure**: Technology-enabled financial holding company regulated by the Fed, with a focus on providing business and financial solutions to independent business owners [4][7] Core Business Model - **Mission**: To provide business and financial solutions to independent business owners, enhancing their success [5] - **Services Offered**: - Depository solutions through banking - Business loans - Payment processing - Payroll services - Insurance agency services - **Client Base**: Approximately 80,000 independent business owners across the U.S. [8][9] Financial Performance - **Stock Price**: Historical fluctuations noted, with transparency about current stock performance [11] - **Risk Management**: Emphasis on managing risk effectively, with wider lending margins allowing for larger provisions for credit losses [12][13] - **Growth Metrics**: - Tangible book value per common share increased by 62% in less than three years [21] - Revenue growth driven by non-interest income, comprising roughly 80% of total revenue [23] - Efficiency ratio improved from over 80% to below 60% post-bank acquisition [24] 2026 Forecast - **Earnings Per Share (EPS)**: Projected range of $2.15-$2.55 - **Loan Originations**: - 7(a) loans: $1 billion - ALP or C&I loans: $500 million - SBA 504 loans: $175 million - Net growth in C&I and CRE portfolio: $150 million [27] Technological Advancements - **Newtek Advantage**: A cloud-based, user-friendly platform integrating various financial services for independent business owners, enhancing client experience [30][34] - **AI Utilization**: AI is used for analytics and streamlining processes, such as transcribing pre-qualification calls to create credit templates [52][53] - **NewTracker System**: A proprietary system developed for managing referrals, loan processing, and customer interactions, fully compliant with regulatory needs [48][55] Market Position and Competitive Advantage - **Unique Selling Proposition**: Newtek's integrated approach to financial services is designed to be client-centric and frictionless, addressing the interconnected needs of independent business owners [30][34] - **Scalability**: The business model is designed to scale efficiently without increasing headcount, leveraging technology to handle growth [50] - **Regulatory Compliance**: Fully compliant with banking regulations, enhancing trust and reliability in the services offered [58][63] Conclusion - NewtekOne is positioned as a leading provider of financial solutions for independent business owners, leveraging technology and a strong understanding of client needs to drive growth and profitability. The company aims to continue expanding its services and improving client experiences while maintaining a focus on risk management and regulatory compliance.

Core Insights - The article discusses influential figures in the banking industry for 2025, highlighting their actions and impacts on the sector, including regulatory changes and market dynamics. Group 1: Federal Reserve and Regulatory Changes - Michael Barr resigned as vice chair for supervision of the Federal Reserve but remains on the board, allowing him to critique the administration's policies without holding the supervisory role [5][6][7] - Michelle Bowman succeeded Barr as vice chair for supervision, initiating deregulatory measures and likely leading the implementation of the Basel III Endgame proposal and stablecoin regulations [18][15][17] - Travis Hill, as the new chair of the FDIC, aligns with the administration's priorities, focusing on transparency in crypto regulations and the upcoming Basel III capital proposal [49][53] Group 2: Mergers and Acquisitions - Mike Bell correctly predicted a record number of credit unions acquiring banks in 2024, but 2025 saw a slowdown in such acquisitions due to external economic factors [9][10][11] - Capital One's acquisition of Discover was approved under the Trump administration, making it the eighth-largest U.S. bank holding company [32][33] Group 3: Banking Performance and Strategy - TD Bank Group faced regulatory challenges and fines in 2025 but reported momentum across its business segments [20][21][22] - JPMorganChase expanded its digital asset strategy by moving its deposit token to a public blockchain, indicating a shift towards mainstream on-chain finance [35][36][37] - Bank of America experienced growth in lending and investment banking, with a focus on regulatory changes that favor large banks [70][71] Group 4: Notable Individuals and Their Impact - Jamie Dimon of JPMorganChase influenced market perceptions with his comments on economic resilience and potential risks in the private credit sector [28][29][30] - Jane Fraser, CEO of Citi, led efforts to simplify the bank's structure, resulting in a positive outlook for its stock and earnings [39][40][41] - Charlie Scharf of Wells Fargo celebrated the lifting of an asset cap, positioning the bank for growth and increased profitability [89][90][91] Group 5: Technological and Cybersecurity Developments - Google Cloud's cybersecurity division provided critical threat intelligence to banks, highlighting ongoing vulnerabilities in the sector [59][60] - The rise of AI and deepfake technology has raised concerns about misinformation and security risks within the banking industry [93][94]

Financial Data and Key Metrics Changes - NewtekOne reported earnings of $0.70 per basic share and $0.69 per diluted share, representing a 43% improvement over the previous year and quarter [11] - Net interest income increased by 36% compared to the same three-month period a year earlier [12] - Shareholders' equity rose to $296 million, a 19% increase [13] Business Line Data and Key Metrics Changes - The Alternative Loan Program (ALP) saw $269 million in loans for the year, with over $83 million in ALP loans for the 12 months [14] - The bank's core business deposits grew to $216 million, an increase of approximately $106 million from the previous year [27] Market Data and Key Metrics Changes - Newtek Bank achieved a Return on Average Assets (ROAA) of 6.3% and a Return on Tangible Common Equity (ROTCE) of 48% [28] - The efficiency ratio for Newtek Bank was reported at 42% [28] Company Strategy and Development Direction - NewtekOne aims to provide technology-enabled financial solutions to over 30 million independent business owners in the U.S. [9] - The company is transitioning from a Business Development Corporation to a financial holding company, focusing on depository solutions and real-time payments [3][10] - NewtekOne positions itself as a disruptor in the banking industry, similar to companies like Uber and Amazon [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage credit risk and maintain profitability despite potential increases in charge-offs [40][41] - The company anticipates a range of $2.10 to $2.50 in earnings per share for 2025, with a midpoint of $2.30 [31][36] - Management noted that the first quarter is typically the lowest quarter for earnings, with expectations for a ramp-up throughout the year [78] Other Important Information - NewtekOne's deposits are primarily in the insured category, with 75% to 80% of deposits insured [18] - The company has a significant amount of cash on hand, with over $300 million in deposits at the end of 2024 [58] Q&A Session Summary Question: Can you provide detail on the cadence of earnings throughout 2025? - Management noted that the first quarter is typically lower due to seasonal factors, with expectations for a ramp-up in subsequent quarters [78][80] Question: What drove the markup on loans accounted for under fair value options? - The markup was primarily driven by the fair value of ALP loans, which are securitized with high margins [84] Question: How are charge-off expectations modeled for the bank portfolio? - Charge-off expectations are based on historical patterns, with a projected increase from 1.5% to 2% for 2025 [92][94] Question: What are the drivers of expenses for 2025? - Management indicated plans for continued investment in resources to support growth, including accounting, compliance, and risk management [108]