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

Summary of NewtekOne, Inc. Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Earnings Per Share (EPS): Reported at $0.43, beating consensus by $0.01, reflecting 19% growth year-over-year.
• Book Value: Ended Q1 2026 at $12.35 per share; tangible book value at $11.84, up from $6.92 in Q1 2023.
• Loan Originations: 961 loan units originated, a 40% increase year-over-year, totaling $391 million.
• Deposits: Grew to $1.9 billion, with 37,000 deposit accounts, more than doubling year-over-year.
• Return on Average Assets: 1.96%, favorable compared to industry standards.
• Efficiency Ratio: 40% for Newtek Bank, indicating strong operational efficiency.

2. Strategic Updates and Business Highlights

• Technological Advancements: NewtekOne is leveraging technology to enhance customer experience, including real-time payments via FedNow and The Clearing House RTP.
• C&I LA Loans: New program launched, contributing significantly to loan growth with average loan sizes of $4 million to $5 million.
• SBA Lending: Newtek is the largest SBA lender by units and ranks among the top in loan volume.
• Customer Service: High customer satisfaction ratings (4.7-4.8 on Trustpilot) attributed to effective service and technology integration.

3. Forward Guidance and Outlook

• 2026 EPS Guidance: Reconfirmed at a midpoint of $2.35, with 2027 guidance set at $2.60.
• Loan Growth Expectations: Anticipated low double-digit growth in loans, with a focus on diversifying the portfolio and improving credit metrics.
• Securitization Plans: Next securitization expected in Q4 2026, targeting a pool size of $400 million to $500 million.

4. Challenges and Points of Concern

• NIM Compression: Net interest margin is expected to decline post-securitization, affecting short-term profitability.
• Market Conditions: The SBA market has faced challenges, including regulatory changes that may impact borrower volume and confidence.
• Loan Size Variability: Some loan sizes are shrinking, particularly in the SBA category, which may reflect market conditions rather than strategic decisions.
• Credit Quality Monitoring: While credit metrics are stabilizing, there is a need for ongoing vigilance as the loan portfolio seasons.

5. Notable Q&A Insights

• Loan Growth Trajectory: Barry Sloane indicated that loan growth will primarily occur within the bank, with a focus on C&I LA loans for better credit quality.
• Deposit Liquidity: While current liquidity is high, management acknowledged the need to normalize cash levels at the Fed.
• SBA Pricing Dynamics: Gain-on-sale premiums for SBA loans remain stable, with pricing around 1.105%.
• Market Positioning: Newtek is well-positioned to capture market share from competitors struggling with technology and underwriting processes.

Overall, NewtekOne reported strong financial results for Q1 2026, driven by significant loan and deposit growth, while also navigating challenges in the SBA lending landscape and managing net interest margin pressures. The company remains optimistic about future growth and profitability, leveraging technology and customer service excellence.