Summary of NewtekOne Q2 2026 Earnings Call

1Key Financial Results and Metrics

Earnings Per Share (EPS): Basic EPS of $0.48 and diluted EPS of $0.47.

Return on Average Assets (ROA): 2%, significantly above the industry average.

Tangible Book Value Growth: Increased by 75.3% over 12 quarters since transitioning to a technology-enabled financial holding company.

Net Interest Income: Grew from $16.2 million in Q2 2025 to $25 million in Q2 2026.

Deposit Growth: Total deposits increased to $2.2 billion, with core consumer deposits rising by $297 million in the quarter.

2Strategic Updates and Business Highlights

Business Model Evolution: Shifted focus from gain-on-sale income to net interest income, with more lending activities now conducted through Newtek Bank.

Technological Integration: Continued emphasis on technology to streamline operations, including AI for data analysis and a digital account opening process.

Market Positioning: Targeting the underserved independent business owner demographic, which constitutes a significant portion of the U.S. economy.

3Forward Guidance and Outlook

Earnings Guidance: Anticipated near-term impact on EPS due to a shift towards holding more guaranteed portions of SBA loans on the balance sheet, potentially affecting top-line revenue in upcoming quarters.

Securitization Plans: Plans to conduct a securitization of $300 million to $400 million in the near future.

Long-Term Strategy: Aiming for a more stable income stream through increased net interest income, with a focus on maintaining competitive capital ratios.

4Bad News, Challenges, or Points of Concern

NIM Compression: Notable contraction in Net Interest Margin (NIM) attributed to the transition of operations to the bank, impacting holding company income.

Credit Quality Concerns: An increase in non-performing loans (NPLs), particularly in guaranteed loan balances, though management expressed confidence in recovery.

Market Multiples: The company currently trades at lower multiples compared to peers, which is a concern for investor sentiment.

Regulatory and Operational Risks: Transitioning operations to the bank requires careful management to maintain regulatory compliance and operational efficiency.

5Notable Q&A Insights

Loan Strategy: Management acknowledged the potential near-term impact of holding more guaranteed SBA loans on profitability but emphasized the long-term benefits of this strategy.

Securitization and Credit Management: Discussion on the rationale for buying back problem loans and the partnership with the SBA to manage credit risk effectively.

Technological Opportunities: Barry Sloane highlighted ongoing discussions with other financial institutions regarding the potential for white-labeling Newtek's technology solutions, indicating growth opportunities outside traditional banking.

Deposit Acquisition Strategy: Emphasis on the effectiveness of their digital account opening process and customer service in acquiring and retaining deposits, despite potential pressures from holding more loans on the balance sheet. Overall, NewtekOne demonstrated solid financial growth in Q2 2026, with strategic shifts aimed at enhancing long-term profitability, though challenges related to NIM compression and credit quality were acknowledged. The company remains focused on leveraging technology to serve the independent business sector effectively.