BOCA RATON, Fla., Nov. 06, 2024 (GLOBE NEWSWIRE) -- NewtekOne, Inc. (NASDAQ:NEWT), reports its financial and operating results for the three and nine months ended September 30, 2024.

NewtekOne Financial Highlights for the Three Months Ended September 30, 2024

Post Third Quarter 2024 Highlights

NewtekOne Financial Highlights for the Nine Months Ended September 30, 2024

Newtek Bank, N.A. Financial Highlights

Lending Highlights

Barry Sloane, CEO, President and Chairman commented, "We are extremely pleased with our third quarter 2024 financial and operational performance across the areas of total deposit growth, business deposit growth, loan growth, and growth in the electronic payment processing segment, which enabled us to achieve earnings of $0.45 per basic and diluted common share, beating the midpoint of our previously stated forecast of $0.43. In our first 21 months of operating as a financial holding company, we are continuing to execute on our transition plan that began in January 2023, when we acquired the National Bank of New York City. Acquiring this 61-year old OCC chartered bank and transitioning from our prior business development company structure has taken some time, however we believe that we have successfully demonstrated, quarter after quarter, that we have been able to overcome any hurdles. Our business model and financial results continue to demonstrate that our business and financial solutions offerings, with over two decades of client acceptance and attractive margins, can readily overcome the costs associated with being a small, but growing financial holding company that provides business and financial solutions to independent business owners in all fifty states. Newtek Bank, with $900 million in assets and over 370 dedicated employees, is poised for growth while remaining focused on compliance, risk management, and customer service. We believe that Newtek Bank's low efficiency ratio of 39.4% is evidence that that our strategy of no branches, brokers, business development officers or traditional bankers is a more cost-efficient business strategy. Indeed, we conduct business with an increased level of efficiency and competency with our U.S.-based dedicated professionals, who are available on camera, around-the-clock, 7 days a week, for all of our clients' needs. We utilize what we view as cutting-edge technology, including aspects of artificial intelligence, to improve our associates' interface with our clients, and we believe the full potential of our business model has not yet been achieved. We are excited that Newtek Bank was able to outperform standard industry metrics, as well as our previously issued forecasted returns, in terms of ROAA, ROTCE, and efficiency ratios. We believe the market is recognizing our technology-enabled, solutions-provider approach to business banking, as we demonstrate more than sufficient loan loss reserves and capitalization levels, which we will detail during our third quarter 2024 earnings conference call."

1 Non-GAAP; reconciliations of non-GAAP financial measures to the most comparable GAAP measures are set forth on the last page of the financial information accompanying this press release.

2 Assets under supervision, capital ratios, risk-weighted assets and supplementary leverage ratio are preliminary data and subject to change with our filings with regulatory agencies and our Form 10-Q for the period ended September 30, 2024.

3 Total deposits as reported include deposits from affiliates held at Newtek Bank, which are eliminated through consolidation on NewtekOne's consolidated financial statements.

Mr. Sloane continued, "Pretax income in our Newtek Payments segment, which includes NMS and Mobil Money, for the three and nine months ended September 30, 2024, grew by 32.5% and 43.4%, respectively, over the same periods in 2023. We believe this pretax income growth has come from clients' appreciating the benefits of our integration of owning a payment processor and an affiliated nationally chartered bank. For example, we have clients that want to process payments with NMS because we also own Newtek Bank and are able to provide clients, through the Newtek Advantage®, real-time analytics and data and transactional capability all in one location for things like daily batches of chargebacks, refunds, specific card charges as well as ACH, and Fed wires, with the ability to integrate these payments directly into certain accounting software packages. We currently anticipate the Payments segment achieving $17.7 million in pretax income for the full year 2024, which would be an increase over 2023 pretax income of $13.3 million for this segment. We possess the ability to service clients through our proprietary platform the Newtek Advantage® and present a payments platform that we view as special. We believe we will continue to grow pretax income in this segment in the fourth quarter of 2024 and throughout 2025. We plan to discuss this double-digit growth and performance in our upcoming conference call. We believe we are well positioned to continue our growth trajectory and, most importantly, fulfill our mission of making our clients more successful each and every day through the utilization of our broad array of business and financial solutions and the Newtek Advantage®. As such, we are maintaining our 2024 earnings guidance of $1.85 to $2.05 per basic and diluted common share and are forecasting 2025 earnings guidance of $2.00 to $2.25 per basic and diluted common share."

Mr. Sloane concluded, "We could not be more excited about our future, as our original three-year growth plan continues to fully develop without the need to modify. In our upcoming earnings conference call, we will demonstrate several important factors to the investor and analyst community that will highlight our capabilities in risk management, compliance, and diversification of business lines, further illustrating that our differentiated products and solutions, available to our client base, continue to track and demonstrate that doing business with NewtekOne is truly a business advantage."

Third Quarter 2024 Conference Call and Webcast

A conference call to discuss the third quarter 2024 financial results will be hosted by Barry Sloane, President, Chairman and Chief Executive Officer and M. Scott Price, Chief Financial Officer, tomorrow, Thursday, November 7, 2024, 8:30 a.m. ET.

Please note, to attend the conference call or webcast, participants should register online at NewtekOne, Inc. Third Quarter 2024 Financial Results Conference Call. To receive a dial-in number, participants are requested to register at a minimum 15 minutes before the start of the call. The corresponding presentation will be available in the ‘Events & Presentations' section of the Investor Relations portion of NewtekOne's website at NewtekOne, Inc. Third Quarter 2024 Financial Results Conference Call. A replay of the call with the corresponding presentation will be available on NewtekOne's website shortly following the live presentation and will be available for a period of one year.

Note Regarding Dividend Payments

Amount and timing of dividends, if any, remain subject to the discretion of the Company's Board of Directors.

NewtekOne®, Your Business Solutions Company®, is a financial holding company, which along with Newtek Bank and NewtekOne's non-bank consolidated subsidiaries, provides a wide range of business and financial solutions under the Newtek® brand to independent business owners. Since 1999, NewtekOne has provided state-of-the-art, cost-efficient products and services and efficient business strategies to our independent business owner relationships across all 50 states to help them grow their sales, control their expenses and reduce their risk.

NewtekOne's and its subsidiaries' business and financial solutions include: banking (Newtek Bank, N.A.), Business Lending, SBA Lending Solutions, Electronic Payment Processing, Technology Solutions (Cloud Computing, Data Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Inventory Financing, Insurance Solutions, Web Services, and Payroll and Benefits Solutions.

Newtek®, NewtekOne®, Newtek Bank®, National Association, Your Business Solutions Company®, One Solution for All Your Business Needs® and Newtek Advantage are registered trademarks of NewtekOne, Inc.

Note Regarding Forward-Looking Statements

Certain statements in this press release are "forward-looking statements" within the meaning of the rules and regulations of the Private Securities Litigation and Reform Act of 1995. Information regarding the Company's assets under supervision, capital ratios, risk-weighted assets, supplementary leverage ratio and balance sheet data consists of preliminary estimates and are subject to change with our filings with regulatory agencies and the filing of the Company's Form 10-Q for the quarterly period ended September 30, 2024. These statements and other forward-looking statements herein are based on the current beliefs and expectations of NewtekOne's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. In addition, earnings per share guidance reflects risks, uncertainties and assumptions with respect to facts and circumstances that are beyond our control, in particular concerning interest rates, monetary policy and prevailing economic conditions during the relevant periods, any of which may differ significantly from our assumptions about the applicable period, causing our actual operating results, including our earnings per share, to differ materially from the stated guidance. See "Note Regarding Forward-Looking Statements" and the sections entitled "Risk Factors" in our filings with the Securities and Exchange Commission which are available on NewtekOne's website (https://investor.newtekbusinessservices.com/sec-filings) and on the Securities and Exchange Commission's website (www.sec.gov). Any forward-looking statements made by or on behalf of NewtekOne speak only as to the date they are made, and NewtekOne does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

SOURCE: NewtekOne, Inc.

Investor Relations & Public Relations

Contact: Jayne Cavuoto

Telephone: (212) 273-8179 / jcavuoto@newtekone.com



NEWTEKONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In Thousands, except for Per Share Data)
 September 30, 2024 December 31, 2023
ASSETS(Unaudited)  
Cash and due from banks$ 9,688  $15,398 
Restricted cash 27,929   30,919 
Interest bearing deposits in banks 152,805   137,689 
Total cash and cash equivalents 190,422   184,006 
Debt securities available-for-sale, at fair value 23,790   32,171 
Loans held for sale, at fair value 242,225   118,867 
Loans held for sale, at LCM 60,203   56,607 
Loans held for investment, at fair value 394,471   469,801 
Loans held for investment, at amortized cost, net of deferred fees and costs 518,489   336,305 
Allowance for credit losses (26,045)  (12,574)
Loans held for investment, at amortized cost, net 492,444   323,731 
Federal Home Loan Bank and Federal Reserve Bank stock 3,608   3,635 
Settlement receivable 62,117   62,230 
Joint ventures, at fair value (cost of $43,321 and $37,864), respectively 55,750   40,859 
Non-control investments (cost of $680 and $796), respectively 740   728 
Goodwill and intangibles 14,794   30,120 
Right of use assets 3,992   5,701 
Deferred tax asset, net —   5,230 
Servicing assets 46,111   39,725 
Other assets 62,984   56,102 
Assets classified as held for sale 20,519   — 
Total assets$1,674,170  $1,429,513 
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Liabilities:   
Deposits:   
Noninterest-bearing$11,040  $10,053 
Interest-bearing 638,418   453,452 
Total deposits 649,458   463,505 
Borrowings 655,834   644,122 
Dividends payable 5,237   4,792 
Lease liabilities 4,883   6,952 
Deferred tax liabilities, net 4,700   — 
Due to participants 22,217   23,796 
Accounts payable, accrued expenses and other liabilities 45,092   37,300 
Liabilities directly associated with assets classified as held for sale 4,964   — 
Total liabilities 1,392,385   1,180,467 
    
Shareholders' Equity:   
Preferred stock (par value $0.02 per share; authorized 20 shares, 20 shares issued and outstanding) 19,738   19,738 
Common stock (par value $0.02 per share; authorized 199,980 shares, 26,018 and 24,680 issued and outstanding, respectively) 520   492 
Additional paid-in capital 216,662   200,913 
Retained earnings 44,834   28,051 
Accumulated other comprehensive loss, net of income taxes 31   (148)
Total shareholders' equity 281,785   249,046 
Total liabilities and shareholders' equity$1,674,170  $1,429,513 



NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Thousands, except for Per Share Data)
 Three Months Ended Nine Months Ended
 September 30, 2024 June 30, 2024 September 30, 2023

(as restated)		 September 30, 2024 September 30, 2023

(as restated)
Interest income         
Debt securities available-for-sale$        334  $374  $436  $1,168  $1,083 
Loans and fees on loans 28,588   26,773   23,232   80,346   60,341 
Other interest earning assets 2,349   2,206   3,068   6,177   6,580 
Total interest income 31,271   29,353   26,736   87,691   68,004 
Interest expense         
Deposits 7,314   6,865   5,212   19,755   10,738 
Notes and securitizations 11,482   11,118   11,005   33,427   28,806 
Bank and FHLB borrowings 1,494   2,244   2,442   5,496   10,127 
Total interest expense 20,290   20,227   18,659   58,678   49,671 
Net interest income 10,981   9,126   8,077   29,013   18,333 
Provision for credit losses 6,928   5,799   3,446   16,742   7,339 
Net interest income after provision for credit losses 4,053   3,327   4,631   12,271   10,994 
Noninterest income         
Dividend income 374   368   388   1,128   1,397 
Loan servicing asset revaluation (1,786)  (1,862)  (1,951)  (5,383)  (1,566)
Servicing income 4,958   4,607   4,602   14,922   13,304 
Net gains on sales of loans 25,675   22,564   13,751   68,531   33,482 
Net (loss) gain on loans under the fair value option (4,085)  (2,894)  2,809   (4,181)  12,588 
Technology and IT support income 3,311   5,174   5,376   14,255   18,456 
Electronic payment processing income 11,777   12,645   11,192   35,409   32,196 
Other noninterest income 11,627   11,418   4,859   28,557   17,808 
Total noninterest income 51,851   52,020   41,026   153,238   127,665 
Noninterest expense         
Salaries and employee benefits expense 18,905   20,790   13,726   60,201   51,173 
Technology services expense 1,796   3,420   2,738   8,624   10,007 
Electronic payment processing expense 4,438   5,693   4,817   14,977   14,159 
Professional services expense 3,929   2,743   3,170   11,237   9,766 
Other loan origination and maintenance expense 4,132   3,015   1,836   9,391   6,930 
Depreciation and amortization 517   521   730   1,570   2,271 
Other general and administrative costs 5,130   4,382   4,303   14,570   13,814 
Total noninterest expense 38,847   40,564   31,320   120,570   108,120 
Net income before taxes 17,057   14,783   14,337   44,939   30,539 
Income tax expense (benefit) 5,123   3,838   3,418   12,410   (5,941)
Net income 11,934   10,945   10,919   32,529   36,480 
Dividends to preferred shareholders (400)  (400)  (400)  (1,200)  (1,049)
Net income available to common shareholders$11,534  $10,545  $10,519  $31,329  $35,431 
          
Earnings per share:         
Basic$0.45  $0.43  $0.43  $1.26  $1.46 
Diluted$0.45  $0.43  $0.43  $1.26  $1.46 



Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)

The information provided below presents a reconciliation of each of our non-GAAP financial measures to the most directly comparable GAAP financial measure. Ratios for three and nine month periods ended have been annualized based on calendar days.

Reconciliation of Core EPS to GAAP EPS:

  Three Months Ended

September 30, 2023		 Nine Months Ended

September 30, 2023
  GAAP EPS Adjustments Core EPS GAAP EPS Adjustments Core EPS
  Based on Net Income Discrete Tax Benefits on Reorg Based on Adjusted Net Income Based on Net Income Discrete Tax Benefits on Reorg Based on Adjusted Net Income
             
Net income before taxes $14,337  $— $14,337  $30,539  $—  $30,539 
Income tax expense (benefit)  3,418   —  3,418   (5,941)  14,244   8,303 
Net income  10,919   —  10,919   36,480   (14,244)  22,236 
Preferred dividends  (400)  —  (400)  (1,049)  —   (1,049)
Net income available to common shareholders $10,519  $— $10,519  $35,431  $(14,244) $21,187 
             
Basic:            
Income available to common shareholders $10,519  $— $10,519  $35,431  $(14,244) $21,187 
Weighted-average basic shares outstanding  24,277   —  24,277   24,255   —   24,255 
Basic $0.43  $— $0.43  $1.46  $0.59  $0.87 
             
Diluted:            
Income available to common shareholders $10,519  $— $10,519  $35,431  $(14,244) $21,187 
Total weighted-average diluted shares outstanding  24,413   —  24,413   24,336   —   24,336 
Diluted $0.43  $— $0.43  $1.46  $0.59  $0.87 



Reconciliation of Newtek Bank and NewtekOne Inc. Non-GAAP Measures:

Newtek Bank, NAAs of and for the

three months ended 		 As of and for the

nine months ended
(in thousands)September 30, 2024 June 30, 2024 September 30, 2023

(as restated)		 September 30, 2024 September 30, 2023

(as restated)
Return on Average Tangible Common Equity         
Net Income (GAAP)$13,484 $12,453 $8,805 $35,338 $13,063
Tax-adjusted amortization of intangibles32 33 35 99 108
Numerator: Adjusted net income13,516 12,486 8,840 35,437 13,171
Average Total Shareholders' Equity1110,124 103,678 81,601 104,884 77,286
Deduct: Average Goodwill and Intangibles11,009 1,052 2,146 1,053 2,177
Denominator: Tangible Average Common Equity1$109,115 $102,626 $79,455 $103,831 $75,109
Return on Average Tangible Common Equity149.3% 48.9% 44.1% 45.6% 23.4%
          
Return on Average Assets         
Numerator: Net Income (GAAP)$13,484 $12,453 $8,805 $35,338 $13,063
Denominator: Average Assets1855,992 782,138 584,887 763,917 453,361
Return on Average Assets16.3% 6.4% 6.0% 6.2% 3.9%
          
Efficiency Ratio         
Numerator: Non-Interest Expense (GAAP)$17,006 $17,308 $11,516 $51,747 $38,682
Net Interest Income (GAAP)11,216 9,310 5,368 28,248 10,871
Non-Interest Income (GAAP)31,960 31,641 23,233 90,827 54,958
Denominator: Total Income$43,176 $40,951 $28,601 $119,075 $65,829
Efficiency Ratio139.4% 42.3% 40.3% 43.5% 58.8%



NewtekOne, Inc.As of and for the

three months ended 		 As of and for the

nine months ended
(dollars and number of shares in thousands)September 30, 2024 June 30, 2024 September 30, 2023

(as restated)		 September 30, 2024 September 30, 2023

(as restated)
Return on Average Tangible Common Equity         
Numerator: Net Income (GAAP)$11,934 $10,945 $10,919 $32,529 $36,480
Tax-adjusted amortization of intangibles141 143 279 437 863
Numerator: Adjusted net income12,075 11,088 11,198 32,966 37,343
Average Total Shareholders' Equity1274,888 258,326 229,906 257,081 224,052
Deduct: Preferred Stock (GAAP)19,738 19,738 19,738 19,738 19,738
Average Common Shareholders' Equity1255,150 238,588 210,168 237,343 204,314
Deduct: Average Goodwill and Intangibles129,729 29,883 31,489 29,890 31,860
Denominator: Average Tangible Common Equity1$225,421 $208,705 $178,679 $207,453 $172,454
Return on Average Tangible Common Equity121.3% 21.4% 24.9% 21.2% 29.0%
          
Return on Average Assets         
Numerator: Net Income (GAAP)$11,934 $10,945 $10,919 $32,529 $36,480
Denominator: Average Assets11,610,849 1,551,009 1,424,670 1,521,465 1,294,762
Return on Average Assets12.9% 2.8% 3.0% 2.9% 3.8%
          
Efficiency Ratio         
Numerator: Non-Interest Expense (GAAP)$38,847 $40,564 $31,320 $120,570 $108,120
Net Interest Income (GAAP)10,981 9,126 8,077 29,013 18,333
Non-Interest Income (GAAP)51,851 52,020 41,024 153,238 127,665
Denominator: Total Income$62,832 $61,146 $49,101 $182,251 $145,998
Efficiency Ratio161.8% 66.3% 63.8% 66.2% 74.1%

1 Non-GAAP

Reconciliation of NewtekOne, Inc. Tangible Book Value:

NewtekOne, Inc.September 30, 2024 June 30, 2024 September 30, 2023

(as restated)
Tangible Book Value Per Share     
Total Shareholders' Equity (GAAP)$281,785 $274,002 $242,202
Deduct: Goodwill and Intangibles (GAAP)14,794 29,783 31,311
Numerator: Total Tangible Book Value1$266,991 $244,219 $210,891
Denominator: Total Number of Shares Outstanding26,018 25,852 24,645
Tangible Book Value Per Share1$10.26 $9.45 $8.56
      
Tangible Book Value Per Common Share     
Total Tangible Book Value1$266,991 $244,219 $210,891
Deduct: Preferred Stock (GAAP)19,738 19,738 19,738
Numerator: Tangible Book Value Per Common Share1$247,253 $224,481 $191,153
Denominator: Total Number of Shares Outstanding26,018 25,852 24,645
Tangible Book Value Per Common Share1$9.50 $8.68 $7.76

1 Non-GAAP



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