NEWT — NewtekOne, Inc.

Summary of NewtekOne, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Income Before Taxes: Approximately $80 million for 2025, up 16.4% year-over-year.
• Total Revenue: $284 million, a 10.6% increase from $257 million in 2024.
• Earnings Per Share (EPS): Q4 EPS of $0.65; full-year basic EPS of $2.21, diluted EPS of $2.18, representing a 1211% increase over 2024.
• Tangible Book Value: Increased to $12.19 from approximately $6.92 at the beginning of the year.
• Efficiency Ratio: Improved from 63.2% to 58.3% at the holding company level.
• Return on Average Assets (ROAA): 2.78% for the year.
• Deposits: 9,000 new depository accounts opened in Q4, with total business deposits increasing by $34 million in the quarter and $164 million for the year.

2. Strategic Updates and Business Highlights

• Celebrated the three-year anniversary of operating an OCC-chartered bank and the successful acquisition of the National Bank of New York City.
• Focused on serving independent business owners and small to medium-sized businesses (SMBs) with long-term loans that have lower monthly payments.
• Launched new technology for digital account opening and lending operations, enhancing customer experience.
• Introduced life insurance offerings to business lending clients, with 25% of borrowers purchasing through Newtek's agency.
• Continued to grow the alternative loan program (ALP), with a successful securitization that was oversubscribed.

3. Forward Guidance and Outlook

• 2026 EPS Guidance: Mid-range estimate of $2.35, with expectations for continued growth in SBA and ALP loan originations.
• Anticipated originations include $1 billion in SBA 7(a) loans, $500 million in ALP loans, and $175 million in SBA 504 loans.
• The company expects to maintain a strong deposit base to support loan growth and continue improving efficiency ratios.

4. Bad News, Challenges, or Points of Concern

• NSBF Losses: Continued losses from the Newtek Small Business Finance subsidiary, projected to decline from $28.7 million in 2024 to approximately $20 million in 2025, indicating ongoing challenges in that segment.
• Market Competition: Increased competition from fintechs and traditional lenders, particularly in the SBA lending space, as regulatory changes impact the landscape.
• Economic Conditions: The company noted a K-shaped economic recovery, with some businesses struggling while others thrive, which could impact loan demand and performance.

5. Notable Q&A Insights

• Deposit Growth: Management attributed a 50% increase in deposit account openings to improved digital access and competitive rates, with a focus on maintaining customer relationships.
• SBA Loan Performance: Newtek's SBA loans are performing at industry average charge-off rates, but the company believes its margins are superior to competitors.
• First Quarter Expectations: Historically, the first quarter is weaker for lending, but management remains optimistic about the long-term growth potential of ALP loans.
• Expense Management: The company plans to control expenses while investing in technology and business development, aiming for continued operational efficiency.

Overall, NewtekOne reported strong financial performance in 2025 with a focus on strategic growth initiatives, despite facing challenges in specific segments and a competitive lending environment.