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
- Net income was $11.9 million, and earnings per share (“EPS”) was $0.45 per basic and diluted common share, for the three months ended September 30, 2024; a 4.7% increase, on a per share basis, compared to $10.9 million and $0.43 per basic and diluted common share for the three months ended June 30, 2024, and a 4.7% increase, on a per share basis, compared to $10.9 million and $0.43 per basic and diluted common share for the three months ended September 30, 2023.
- Net interest income was $11.0 million for the three months ended September 30, 2024; an increase of 20.9% over $9.1 million for the three months ended June 30, 2024, and an increase of 35.8% over $8.1 million for the three months ended September 30, 2023.
- Total assets were $1.7 billion at September 30, 2024; an increase of 21.4% from $1.4 billion at December 31, 2023.
- Loans held for investment were $913.0 million at September 30, 2024; an increase of 13.3% over $806.1 million at December 31, 2023.
- Total borrowings were $655.8 million at September 30, 2024; an increase of 1.8% from $644.1 million at December 31, 2023.
- Net interest margin2 was 3.08% for the three months ended September 30, 2024; an increase of 14.1% compared to 2.70% for the three months ended June 30, 2024, and an increase of 18.5% over 2.60% for the three months ended September 30, 2023.
- Return on Tangible Common Equity (“ROTCE”)1 of 21.3% for the three months ended September 30, 2024; a decrease of 0.5% over 21.4% for the three months ended June 30, 2024, and a decrease of 14.5% over 24.9% for the three months ended September 30, 2023.
- Return on Average Assets (“ROAA”)1,2 of 2.9% for the three months ended September 30, 2024; an increase of 3.6% over 2.8% for the three months ended June 30, 2024, and a decrease of 3.3% over 3.0% for the three months ended September 30, 2023.
- Efficiency ratio2 of 61.8% for the three months ended September 30, 2024; an improvement of 6.8% compared to 66.3% for the three months ended June 30, 2024, and an improvement of 3.1% compared to 63.8% for the three months ended September 30, 2023.
- Total risk-based capital ratio2 was 20.5% at September 30, 2024; an increase of 7.3% over 19.1% at December 31, 2023.
- Tier-1 leverage ratio2 was 13.9% at September 30, 2024; an increase of 2.2% over 13.6% at December 31, 2023.
- The Newtek Payments segment, which includes Newtek Merchant Solutions ("NMS") and Mobil Money, had pretax income of $5.3 million for the three months ended September 30, 2024; a 32.5% increase over the three months ended September 30, 2023.
- On September 16, 2024, the Company completed a registered public offering of $75.0 million aggregate principal amount of its 8.625% Fixed Rate Senior Notes due 2029 (the "2029 Notes") (Nasdaq: NEWTH). The 2029 Notes were rated BBB+ by Egan-Jones Ratings Company.
- On July 23, 2024, NewtekOne's joint venture, Newtek-TSO II Conventional Credit Partners, LP, closed a $154.3 million alternative business loan backed securitization rated by Morningstar DBRS.
- On August 11, 2024, the Company entered into a definitive agreement to sell its wholly owned subsidiary Newtek Technology Solutions, Inc. ("NTS") to Paltalk, Inc. (Nasdaq: PALT). As previously disclosed, in connection with the Company’s acquisition of Newtek Bank and transition to a financial holding company, the Company made a commitment to the Board of Governors of the Federal Reserve System to divest or terminate the activities of NTS by January 6, 2025. As such, the Company reported NTS as held for sale as of September 30, 2024.
Post Third Quarter 2024 Highlights
- The Company maintains its 2024 annual EPS forecast range of $1.85 to $2.05 per basic and diluted common share.
- On October 21, 2024, the Company paid a quarterly cash dividend of $0.19 per share on its outstanding common shares.
- The Company forecasts 2025 annual EPS forecast in a range of $2.00 to $2.25 per basic and diluted share.
NewtekOne Financial Highlights for the Nine Months Ended September 30, 2024
- Net income was $32.5 million and EPS was $1.26 per basic and diluted common share for the nine months ended September 30, 2024, compared to $36.5 million and $1.46 per basic and diluted common share for the nine months ended September 30, 2023. Net income for the nine months ended September 30, 2023, was positively impacted by an income tax benefit of $14.2 million, or $0.59 per basic and diluted share. Excluding this income tax benefit, EPS for the nine months ended September 30, 2023, would have been $0.87 per basic and diluted share.1
- Net interest income was $29.0 million for the nine months ended September 30, 2024; an increase of 58.5% over $18.3 million for the nine months ended September 30, 2023.
- Net interest margin2 was 2.91% for the nine months ended September 30, 2024; an increase of 30.5% over 2.23% for the nine months ended September 30, 2023.
- ROTCE1 of 21.2% for the nine months ended September 30, 2024; a decrease of 26.9% compared to 29.0% for the nine months ended September 30, 2023. ROTCE for the nine months ended September 30, 2023, was positively impacted by the income tax benefit in the first quarter of 2023.
- ROAA1,2 of 2.9% for the nine months ended September 30, 2024; a decrease of 23.7% compared to 3.8% for the nine months ended September 30, 2023. ROAA for the nine months ended September 30, 2023, was positively impacted by the income tax benefit in the first quarter of 2023.
- Efficiency ratio2 of 66.2% for the nine months ended September 30, 2024; an improvement of 10.7% compared to 74.1% for the nine months ended September 30, 2023.
- The Newtek Payments segment, which includes NMS and Mobil Money, had pretax income of $14.2 million for the nine months ended September 30, 2024; a 43.4% increase over the nine months ended September 30, 2023.
Newtek Bank, N.A. Financial Highlights
- Total deposits3 were $745.7 million at September 30, 2024; an increase of 12.4% over $663.7 million at June 30, 2024 and an increase of 43.7% over $519.1 million in deposits at December 31, 2023.
- Insured deposits represented approximately 74.6% of total deposits at September 30, 2024.
- Net interest margin was 5.29% for the three months ended September 30, 2024; an increase of 9.5% over 4.83% for the three months ended June 30, 2024, and an increase of 49.9% over 3.53% for the three months ended September 30, 2023.
- ROTCE1 of 49.3% for the three months ended September 30, 2024; an increase of 0.8% over 48.9% for the three months ended June 30, 2024, and an increase of 11.8% over 44.1% for the three months ended September 30, 2023.
- ROAA1 of 6.3% for the three months ended September 30, 2024; a decrease of 1.6% over 6.4% for the three months ended June 30, 2024, and an increase of 5.0% over 6.0% for the three months ended September 30, 2023.
- Efficiency ratio1 of 39.4% for the three months ended September 30, 2024; an improvement of 6.9% from 42.3% for the three months ended June 30, 2024, and an improvement of 2.2% from 40.3% for the three months ended September 30, 2023.
- Total risk-based capital ratio was 16.8% at September 30, 2024; a decrease of 26.3% from 22.8% at December 31, 2023.
- Tier-1 leverage ratio was 13.3% at September 30, 2024; a decrease of 19.9% from 16.6% at December 31, 2023.
Lending Highlights
- SBA 7(a) loan closings of $245.3 million for the three months ended September 30, 2024; an increase of 12.5% over $218.0 million of SBA 7(a) loans closings for the three months ended September 30, 2023.
- The Company forecasts $935.0 million in total SBA 7(a) loan closings for 2024, which would represent a 14.7% increase over 2023.
- Newtek Bank closed $38.4 million of SBA 504 loans for the three months ended September 30, 2024; an increase of 117.0% over $17.7 million SBA 504 loans closed for the three months ended September 30, 2023.
- Newtek Bank and the Company’s non-bank lending subsidiaries closed $372.1 million of loans across all loan products for the three months ended September 30, 2024; a 43.0% increase over $260.2 million of loans closed for the same period in 2023.
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, NA | As 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 intangibles | 32 | 33 | 35 | 99 | 108 | ||||
| Numerator: Adjusted net income | 13,516 | 12,486 | 8,840 | 35,437 | 13,171 | ||||
| Average Total Shareholders' Equity1 | 110,124 | 103,678 | 81,601 | 104,884 | 77,286 | ||||
| Deduct: Average Goodwill and Intangibles1 | 1,009 | 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 Equity1 | 49.3% | 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 Assets1 | 855,992 | 782,138 | 584,887 | 763,917 | 453,361 | ||||
| Return on Average Assets1 | 6.3% | 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 Ratio1 | 39.4% | 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 intangibles | 141 | 143 | 279 | 437 | 863 | ||||
| Numerator: Adjusted net income | 12,075 | 11,088 | 11,198 | 32,966 | 37,343 | ||||
| Average Total Shareholders' Equity1 | 274,888 | 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' Equity1 | 255,150 | 238,588 | 210,168 | 237,343 | 204,314 | ||||
| Deduct: Average Goodwill and Intangibles1 | 29,729 | 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 Equity1 | 21.3% | 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 Assets1 | 1,610,849 | 1,551,009 | 1,424,670 | 1,521,465 | 1,294,762 | ||||
| Return on Average Assets1 | 2.9% | 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 Ratio1 | 61.8% | 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 Outstanding | 26,018 | 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 Outstanding | 26,018 | 25,852 | 24,645 | ||
| Tangible Book Value Per Common Share1 | $9.50 | $8.68 | $7.76 |
1 Non-GAAP
