NEWTZ — Newtek Business Services Corp. 5.50% Notes Due 2026

Summary of NewtekOne, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Net Income Before Taxes: Approximately $80 million, up 16.4% year-over-year.
• Total Revenue: $284 million, an increase of 10.6% from $257 million in 2024.
• Earnings Per Share (EPS): $0.65 for Q4; basic EPS for 2025 was $2.21, diluted EPS was $2.18, reflecting 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%, with assets growing by 33%.
• Return on Average Assets (ROAA): 2.78% for the year.
• Depository Accounts: 9,000 new accounts opened in Q4, totaling 34,000 active accounts.

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 with long-term loans (10-25 years) that offer lower monthly payments.
• Enhanced technology offerings, including digital account opening and integrated payroll solutions.
• Significant growth in business deposits, with $164 million added in 2025, and consumer deposits increasing by $293 million.
• Launched a new life insurance offering for business lending clients, with 25% of borrowers purchasing policies through Newtek.

3. Forward Guidance and Outlook:

• Projected diluted EPS for 2026 is between $2.15 and $2.55, with a midpoint of $2.35.
• Anticipated originations include $1 billion in SBA 7(a) loans, $500 million in alternative loans, and $175 million in SBA 504 loans.
• Expected continued growth in business deposits and a focus on maintaining a low cost of funds.

4. Bad News, Challenges, or Points of Concern:

• The NSBF lending subsidiary continues to experience losses, though these are expected to decline from $20 million in 2025.
• The first quarter is traditionally weak for lending, which may impact early 2026 results.
• Competitive pressures from fintech companies and changes in SBA regulations could pose challenges to maintaining market share and profitability.
• The economic environment remains uncertain, with a K-shaped recovery impacting different segments of the market.

5. Notable Q&A Insights:

• Management emphasized the importance of digital accessibility and competitive deposit rates in driving growth.
• Concerns were raised regarding the flat gain on sale figures, with management attributing this to recent changes in the SBA landscape.
• Barry Sloane highlighted the company's strong margins compared to competitors and the importance of maintaining customer relationships through quality service and products.
• The company is focused on leveraging technology to streamline operations and enhance customer experience, which is expected to support future growth.

Overall, NewtekOne reported solid financial growth and strategic advancements while acknowledging ongoing challenges in the lending environment and competitive landscape. The company remains optimistic about its future prospects and market positioning.