NEWTI — NewtekOne, Inc. 8.00% Fixed Rate Senior Notes due 2028

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 65¢; full-year basic EPS of $2.21 (up 1211% from 2024).
• Tangible Book Value: Increased to $12.19 from approximately $6.92 at the start of the year.
• Efficiency Ratio: Improved from 63.2% to 58.3% at the holding company level, with the bank's efficiency ratio around 47%.
• Return on Average Assets (ROAA): 2.78% for the year.

2. Strategic Updates and Business Highlights:

• Celebrated the three-year anniversary of operating an OCC-chartered bank.
• Opened 9,000 new depository accounts, totaling 34,000 active accounts.
• Significant growth in business deposits, with $164 million added for the year.
• Launched a new life insurance offering for business lending clients, with 25% of borrowers purchasing policies.
• Continued focus on technology-enabled banking solutions, emphasizing a frictionless customer experience.
• Successful securitization of the alternative loan program (ALP), which was oversubscribed and indicates strong market demand.

3. Forward Guidance and Outlook:

• 2026 EPS Guidance: Projected range of $2.15 to $2.55, with a midpoint of $2.35.
• Anticipated originations for 2026 include $1 billion in SBA 7(a) loans and $500 million in ALP loans.
• Expectation of continued deposit growth and improved margins due to a focus on business deposits and lower-cost funding.

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.
• SBA Market Challenges: Regulatory changes and competitive pressures impacting SBA loan originations, with some competitors struggling financially.
• Economic Environment: A K-shaped recovery noted, with varying performance across different market segments; businesses serving lower-end markets are facing struggles.

5. Notable Q&A Insights:

• Management highlighted the importance of digital access and frictionless service in driving deposit growth.
• Concerns were raised about the performance of SBA loans compared to competitors, with management asserting that their margins and service offerings remain competitive.
• The first quarter is typically weaker for lending, but management remains optimistic about the long-term potential of their loan products, particularly ALP loans.
• Management is focused on maintaining expense control while investing in business development to support growth.

Overall, NewtekOne reported strong financial performance and strategic growth initiatives while acknowledging challenges in the SBA lending market and ongoing losses from its nonbank subsidiary. The company remains optimistic about its future prospects, particularly in the technology-enabled banking space for independent business owners.