Core Insights - NewtekOne, Inc. has appointed Justine Martin as Chief Revenue Officer of its subsidiary Newtek Merchant Solutions, LLC, focusing on enhancing integration across payments, banking, and lending functions [1][3] - Martin brings over 30 years of experience in the payments processing industry, primarily from Bank of America's Merchant Services division, where she successfully led sales teams and drove client and revenue growth [2] - The company aims to redefine payment processing for independent business owners by offering a comprehensive, integrated solution that simplifies transactions and financial management [3] Company Overview - NewtekOne, Inc. is a financial holding company providing a wide range of business and financial solutions to independent business owners across the United States since 1999 [4] - The company's offerings include banking, business lending, electronic payment processing, accounts receivable financing, insurance solutions, and technology solutions [5] Strategic Goals - The company seeks to empower clients with a seamless payment processing experience, integrating various payment methods and providing real-time information to help businesses understand their operations better [3] - NewtekOne differentiates itself from traditional banks by offering lower-cost, comprehensive solutions tailored for small businesses, aiming to enhance client satisfaction and operational efficiency [3]

Core Insights - NewtekOne, Inc. is a financial services company focused on providing innovative business lending and financial solutions tailored for small and medium-sized businesses [1] Company Performance - On November 3, 2025, Sloane Barry, the Chairman and CEO, purchased 2,000 shares at $10.16 each, increasing his total ownership to 1,206,459 shares, reflecting confidence in the company's future prospects [2] - NewtekOne held its Q3 2025 earnings call on October 29, 2025, with key figures discussing financial performance and strategic initiatives, indicating significant analyst interest from firms like Keefe, Bruyette, & Woods, Piper Sandler & Co., and Raymond James & Associates [3] - The current stock price of NASDAQ:NEWT is $10.42, showing a slight increase of 0.02, or 0.19%, with a yearly high of $15.49 and a low of $9.12, indicating market volatility [4][6] Market Activity - NewtekOne's market capitalization is approximately $274.3 million, with a trading volume of 90,714 shares, suggesting a moderate level of investor interest and activity [5]

Core Insights - NewtekOne (NEWT) reported revenue of $74.94 million for the quarter ended September 2025, reflecting a year-over-year increase of 19.3% [1] - The earnings per share (EPS) for the quarter was $0.67, up from $0.45 in the same quarter last year, with an EPS surprise of +6.35% against the consensus estimate of $0.63 [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $76.33 million, resulting in a revenue surprise of -1.83% [1] Financial Performance Metrics - Efficiency Ratio stood at 56.3%, slightly above the average estimate of 55% based on two analysts [4] - Net interest income was reported at $14.55 million, lower than the average estimate of $16.89 million from three analysts [4] - Total noninterest income reached $60.39 million, exceeding the average estimate of $59.25 million from three analysts [4] - Noninterest income from servicing was $6.08 million, surpassing the average estimate of $5.49 million [4] - Noninterest income from net gains on sales of loans was $9.56 million, significantly below the average estimate of $21.79 million [4] - Electronic payment processing income was reported at $11.05 million, lower than the average estimate of $13.29 million [4] - Other noninterest income was $9.96 million, exceeding the average estimate of $8.86 million [4] - Dividend income was $0.43 million, slightly below the average estimate of $0.53 million [4] - Loan servicing asset revaluation resulted in a loss of $12.5 million, compared to the average estimate of a loss of $4.21 million [4] Stock Performance - Over the past month, NewtekOne shares have returned -5.4%, contrasting with the Zacks S&P 500 composite's increase of +3.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - NewtekOne (NEWT) reported quarterly earnings of $0.67 per share, exceeding the Zacks Consensus Estimate of $0.63 per share, and showing an increase from $0.45 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was +6.35%, with the company having surpassed consensus EPS estimates in all four of the last quarters [2] - Revenues for the quarter ended September 2025 were $74.94 million, which was 1.83% below the Zacks Consensus Estimate, but an increase from $62.83 million year-over-year [3] Stock Performance - NewtekOne shares have declined approximately 15.2% since the beginning of the year, contrasting with the S&P 500's gain of 17.2% [4] - The current Zacks Rank for NewtekOne is 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.70 on revenues of $82.92 million, and for the current fiscal year, it is $2.23 on revenues of $295.8 million [8] - The outlook for the Financial - Miscellaneous Services industry, where NewtekOne operates, is currently in the top 30% of Zacks industries, suggesting a favorable environment for stock performance [9]

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]

Core Insights - NewtekOne, Inc. reported significant year-over-year growth in diluted earnings per share (EPS), with increases of approximately 49% for the third quarter of 2025 and 22% year-to-date [5][9]. Financial Performance - For the three months ended September 30, 2025, basic and diluted EPS were $0.68 and $0.67, respectively, compared to $0.45 for the same period in 2024, reflecting year-over-year increases of 51% and 49% [5]. - For the nine months ended September 30, 2025, basic and diluted EPS were $1.57 and $1.54, respectively, compared to $1.26 for the same period in 2024, reflecting year-over-year increases of 25% and 22% [5]. - Total revenue for the third quarter of 2025 was $74.9 million, up 19.3% from $62.8 million in the third quarter of 2024 [5]. - Year-to-date total revenue was $211.5 million, an increase of 16.0% from $182.3 million in the same period of 2024 [5]. Balance Sheet Highlights - Book value per common share at the end of the third quarter of 2025 was $11.72, up 16.4% year-over-year [5]. - Tangible book value per common share was $11.22, reflecting a year-over-year increase of 25.6% [5]. - Total assets as of September 30, 2025, were $2.399 billion, compared to $2.059 billion as of December 31, 2024 [19]. Capital and Funding - The company raised $30 million of Common Equity Tier 1 (CET1) capital and increased Tier 1 capital by issuing $50 million of depositary shares [6]. - Newtek Merchant Solutions refinanced and upsized its borrowing facility with a new $95 million financing solution [6]. Loan Originations - The company originated $104 million in Alternative Loan Program (ALP) loans in the third quarter of 2025, compared to $66 million in the same quarter of 2024 [6]. - SBA 7(a) loans originated in the third quarter of 2025 totaled $187 million, down from $243 million in the same quarter of 2024 [6]. Operational Efficiency - The efficiency ratio improved to 56.3% for the third quarter of 2025, compared to 61.8% for the same quarter in 2024 [5]. - Return on average assets (ROAA) was 3.06% for the third quarter of 2025, while return on average tangible common equity (ROTCE) was 23.7% [5][9]. Strategic Developments - The company has transitioned from a business development company to a financial holding company, enhancing its ability to provide business and financial solutions [9]. - NewtekOne aims to leverage technology to operate as a digital bank, having opened over 21,000 bank accounts digitally [9].

Core Points - NewtekOne, Inc. will report its third quarter 2025 financial results on October 29, 2025, after market close [1] - A conference call to discuss these results will be hosted by the CEO and CFO at 4:30 pm ET on the same day [1] - Participants are encouraged to pre-register for the conference call to secure a listening position [2] Company Overview - NewtekOne, Inc. is a financial holding company that provides a variety of business and financial solutions to independent business owners across all 50 states [3] - The company has been operational since 1999, offering cost-efficient products and services aimed at helping businesses grow sales, control expenses, and reduce risk [3] Services Offered - NewtekOne's services include banking, business lending, SBA lending solutions, electronic payment processing, accounts receivable financing, inventory financing, insurance solutions, and payroll and benefits solutions [4] - The company also provides technology solutions such as cloud computing, data backup, IT consulting, and web services through its subsidiary Intelligent Protection Management Corp. [4]

Group 1 - NewtekOne, Inc. is considered one of the most undervalued financial stocks by Wall Street analysts [1] - The company secured a $90 million term loan facility and a $5 million revolving line of credit from Goldman Sachs Alternatives [1][2] - The financing will be used to repay approximately $30 million of outstanding term debt and close a $10 million undrawn line of credit [1][2] Group 2 - The remaining funds from the financing are intended for general corporate purposes, including providing loans, repaying unsecured senior debt, and supporting growth initiatives [2] - NewtekOne operates Newtek Bank, N.A. and offers services such as SBA 7(a) lending, commercial real estate financing, electronic payment processing, payroll solutions, and insurance products [2]

Summary of NewtekOne Conference Call Company Overview - **Company Name**: NewtekOne - **Ticker Symbol**: NEWT - **Operating History**: Established in 1998, with a current workforce of approximately 600 employees and $2.2 billion in assets, generating over $50 million in after-tax income [3][4] Business Model - **Operating Model**: NewtekOne operates as a technology-oriented enterprise without traditional banking structures such as branches or commercial bankers, focusing on providing business and financial solutions to independent business owners [4][5] - **Target Market**: Approximately 36 million businesses in the U.S., contributing to 43% of GDP [4] - **Efficiency Ratio**: The company maintains an efficiency ratio between 45% and 48%, indicating low operational expenses due to the absence of physical branches [7] Technology Utilization - **Technology Integration**: NewtekOne leverages technology to create a frictionless environment for clients, enabling services such as payroll, electronic payments, and business loans without the need for in-person meetings [5][6] - **Artificial Intelligence**: The company employs AI to enhance operational efficiency, including reading tax returns and improving client interactions [28] SBA 7(a) Loan Program - **SBA 7(a) Loans**: NewtekOne is one of the largest originators of SBA 7(a) loans, which offer long-term financing with lower monthly payments due to extended amortization periods [12][13] - **Government Guarantee**: The government guarantees 75% of the loan, reducing risk for NewtekOne, which retains 25% on its balance sheet [12][13] Economic Insights - **Current Economic Climate**: The company notes a divided economy, with sectors like technology thriving while others struggle due to rising costs in insurance, interest rates, and labor [15][16] - **Adaptation to Change**: Businesses that fail to adapt to new technologies and economic conditions face challenges, while NewtekOne's diversified approach has proven beneficial [16] Funding and Securitization - **Bank Acquisition Benefits**: The acquisition of a bank has diversified funding sources and reduced funding costs, allowing for more efficient capital management [17][18] - **Alternative Loan Program**: NewtekOne has developed an Alternative Loan Program with similar terms to SBA loans, focusing on personal guarantees and flexibility for borrowers [20][21] Profitability and Scalability - **Sustainable Profitability**: The company emphasizes its scalable business model, which is supported by technology and a focus on high-margin products [27][30] - **Market Positioning**: NewtekOne differentiates itself from community banks by offering innovative solutions and maintaining a competitive edge in the market [30][34] Conclusion - **Unique Business Proposition**: NewtekOne encourages investors to recognize its unique business model and the value it provides to independent business owners, rather than comparing it to traditional community banks [34]