NewtekOne(US:NEWT)2021-08-11 19:02Financial Data and Key Metrics Changes - The company reported an adjusted ANII of $27.1 million, or $1.20 per share, which was a decline from the previous year but exceeded consensus estimates by approximately $0.46 [29][30] - Year-to-date stock price increased by 42% through August 5, 2021, with a ten-year return of 754% and a one-year return of over 50% [10][11] - The midpoint dividend forecast for 2021 is $3.15, representing a 53% increase over the prior year [22][27] Business Line Data and Key Metrics Changes - The company funded $722 million in PPP loans in the second quarter, surpassing the previous forecast of $600 million [24] - The SBA 7(a) loan forecast for the year was adjusted to 550 to 600 million, down from a previous lower end of 580 million [23] - The 504 loan business forecast was increased to 125 to 150 million, up from a previous forecast of 125 million [25] Market Data and Key Metrics Changes - The company is shifting focus from PPP loans to SBA 7(a), 504, non-conforming, and secured lines of credit as the economy opens up [17][20] - The company has a robust pipeline for funding 7(a) loans in Q3 and Q4, indicating strong market demand [52] Company Strategy and Development Direction - The company is in the process of acquiring the National Bank of New York City, which is expected to enhance its digital platform and transform it into a technology-enabled bank [90][91] - The transition to a bank holding company is seen as a strategic move to better position the company for growth compared to its current BDC structure [89][121] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to changing market conditions and highlighted the importance of partnerships with the government [16][18] - The company anticipates continued growth in its payments and tech solutions businesses, as well as a shift back to traditional lending products [17][31] Other Important Information - The company has not distributed any income from portfolio companies to the BDC in the first half of the year, which was a conscious decision to retain cash for future needs [36] - The company has made 46 net new hires in 2021, reflecting a 25% increase in staff to support growth [33] Q&A Session Summary Question: What is the outlook for the company's growth and dividend? - Management indicated that the company is well-positioned for growth and reaffirmed the dividend forecast, expecting to maintain a strong performance in the upcoming quarters [27][121] Question: How is the company adapting to the current economic environment? - The company has successfully shifted its business model to address the challenges posed by the pandemic and is focusing on expanding its lending capabilities [14][16]