NEWTP — NewtekOne, Inc. Depositary Shares, Non-Cumulative Perpetual Preferred Stock, Series B

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 (1211% increase from 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; bank 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 and the acquisition of National Bank of New York City.
• Opened 9,000 new depository accounts in Q4, totaling 34,000 active accounts.
• Launched a new life insurance offering for business lending clients, with 25% of borrowers purchasing insurance.
• Significant growth in business deposits: $34 million in Q4 and $164 million for the year; consumer deposits also increased significantly.
• Continued focus on technology-enabled financial solutions for independent business owners, emphasizing a frictionless customer experience.

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 alternative loan programs (ALP).
• Expected continued growth in business deposits and operational efficiency.

4. Bad News, Challenges, or Points of Concern

• NSBF Losses: Continued losses from the Newtek Small Business Finance (NSBF) subsidiary, projected to decline from $28.7 million in 2024 to approximately $20 million in 2025.
• Market Conditions: Acknowledgment of a K-shaped economic recovery, with businesses serving lower-end markets facing challenges.
• Competitive Pressures: Ongoing changes in the SBA lending landscape and competition from fintech companies, which may impact market positioning and originations.

5. Notable Q&A Insights

• Deposit Growth Drivers: Management attributed the 50% increase in deposit account openings to a frictionless digital experience and competitive rates, with 78% of deposits insured.
• SBA Loan Performance: Management believes their SBA loans perform at industry average charge-off rates, but they maintain higher margins compared to competitors.
• Economic Outlook: Mixed signals regarding business confidence; while some sectors are thriving, lower-end markets are struggling.
• Expense Management: Management expressed confidence in controlling expenses while continuing to invest in technology and business development.

Overall, NewtekOne reported solid financial growth and strategic advancements in Q4 2025, while also addressing challenges and competitive pressures in the lending market.