Financial Data and Key Metrics Changes - The company reported basic and diluted earnings per share of $0.68 and $0.67 for Q3 2025, with year-to-date earnings of $1.57 and $1.54, reflecting a growth rate of 47% and 22% respectively compared to the previous year [11][12] - Revenue growth was reported at 19% for the quarter, with a tangible book value increase from $6.92 to $11.22 per share [12][20] - The efficiency ratio improved from 61.8% to 56.3%, while return on average assets was 3.15%, significantly ahead of industry standards [14][17] Business Line Data and Key Metrics Changes - Core deposits increased, with business deposits rising by $52 million (17%) and consumer deposits by $95 million (12%) [12][20] - The alternative loan program (ALP) is expected to see its largest securitization to date, ranging from $325 million to $350 million, indicating strong growth potential [13][22] - The company has opened 22,000 depository accounts and has 10,000 borrowers in its database, showcasing its ability to operate without traditional banking methods [8][9] Market Data and Key Metrics Changes - The company is focusing on independent business owners, a market that represents 43% of U.S. GDP, with over 36 million business owners in the U.S. [10] - The company has stabilized its credit quality, with non-performing loans (NPLs) at 8.1%, which is high compared to community banks but has been written off or written down [17][19] - The company is avoiding volatile industries such as oil and gas, transportation, and agriculture, while maintaining a strong consumer side [40][41] Company Strategy and Development Direction - The company aims to leverage technology and efficiency to create a future-oriented business model for a technology-enabled bank [3][4] - There is a strategic focus on diversifying the loan portfolio by adding more commercial and industrial (C&I) and commercial real estate (CRE) loans [59] - The company plans to continue its growth trajectory while managing risks effectively, with a goal to enhance transparency and provide better insights into its operations [63][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current economic environment, despite challenges such as a government shutdown [42][44] - The company anticipates that the current credit cycle will stabilize, with expectations of lower provisions and a more favorable lending environment [18][41] - Management highlighted the importance of maintaining a strong capital position and the potential for increased leverage in the future [64] Other Important Information - The company has raised significant capital, including $80 million in Tier 1 capital and $30 million in common equity, to support its growth [13][35] - The company is also focusing on enhancing its payment processing, payroll, and insurance services, which are expected to contribute positively to its overall business model [33] Q&A Session Summary Question: Update on credit trends and market pressures - Management noted that the economy is experiencing a divide, with stress in small businesses due to rising rates, but the consumer side remains strong [40][41] Question: Guidance for Q4 amidst government shutdown - Management did not pull guidance but acknowledged the uncertainty due to the government shutdown, indicating that it could impact loan originations [42][44] Question: Impact of government shutdown on loan processing - Management confirmed that they are still able to process loans that were approved before the shutdown and have provisions to bridge borrowers through this period [43][44] Question: Tier 1 and total capital risk-based ratios - The company reported a Tier 1 capital ratio of about 12.5% and total risk-based capital just shy of 16% [45] Question: SBA lenders leaving the market - Management highlighted that some SBA lenders are exiting due to regulatory changes and increased competition, but the company remains well-positioned to capture market share [70]

Financial Performance - NewtekOne's 3Q25 diluted EPS increased by 49% year-over-year to $067, and YTD diluted EPS increased by 22% to $154[11] - Net income for 3Q25 was $174 million, a 51% increase compared to $115 million in 3Q24[13] - Pre-Provision Net Revenue (PPNR) for 3Q25 was $328 million, a 35% increase compared to $240 million in 3Q24[13] - The efficiency ratio improved from 618% in 3Q24 to 563% in 3Q25[11] Balance Sheet and Capital - Newtek Bank's loans held for investment (HFI) increased by 61% year-over-year, reaching $8341 million in 3Q25[13] - Deposits increased by 81% year-over-year, totaling $11780 million in 3Q25[13] - Tangible book value per share increased by 26% year-over-year[13, 19] ALP Program and Securitization - ALP originations for 3Q25 were approximately $104 million, compared to $66 million in 3Q24[11] - The company anticipates executing an ALP securitization of $325 million to $350 million in 4Q25[11] NSBF Wind-Down - The loss from Newtek Small Business Finance (NSBF) declined to $14 million for the first three quarters of 2025, compared to a $287 million loss in 2024[11]

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 remains unchanged at $2.1 to $2.5, with a midpoint implying a growth rate of 17% [23][24] - The net interest margin at the bank increased by 56 basis points, reaching 5.46% [34] - The cost of deposits declined from 3.99% to 3.71% [34] Business Line Data and Key Metrics Changes - Business deposits grew by $50 million sequentially, with most 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][21] Market Data and Key Metrics Changes - The company estimates that by the end of the year, its loan book will consist of approximately 10,000 borrowers and $4.4 billion in servicing [30] - The average net premium from SBA 7 loans for Q2 2025 was 110.91, with expectations for a slight decrease to 110 for the second half of the year [56] Company Strategy and Development Direction - The company aims to provide integrated solutions for small and medium-sized businesses (SMBs) and independent business owners, focusing on technology and digital banking [6][12] - The strategy includes acquiring deposits below the risk-free rate and enhancing customer analytics and transactional capabilities [27] - The company is positioning itself for future opportunities in stablecoin transactions [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, despite challenges in finding good credits and tariffs impacting borrowing appetite [92] - The company anticipates a higher provision for the second half of the year, with a reserve ratio expected to be between 4.5% to 5.5% [119] Other Important Information - The company has a historical charge-off rate of 1% in its ALP portfolio [36] - The tangible book value per share increased by 3.7% sequentially and 21% year-over-year [35] Q&A Session Summary Question: What helped bring in $50 million of growth on the commercial deposit side? - Management highlighted the benefits of their banking account offerings and integrated solutions for clients, which have driven deposit growth [63][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 [68] 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 zero [72][73] 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 [88] Question: What are the expectations for SBA originations for the current year? - Management confirmed they are sticking with the expectation of $1 billion in SBA originations for the year [99]