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.

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]