NewtekOne Q1 Earnings Call Highlights

Key Points

• Q1 EPS $0.43 beat consensus by $0.01; management reaffirmed 2026 EPS guidance with a midpoint of $2.35 and set a 2027 midpoint of $2.60, while book value per share was $12.35 (tangible $11.84).
• Deposits have surged to $1.9 billion with 37,000 accounts (up from $142 million over 13 quarters), enabling a funding shift into the bank so that bank-held loans now comprise 83% of total loans and reduce reliance on costly warehouse funding.
• Credit metrics improved—delinquencies fell for a third straight quarter and non-performing loans declined for a fourth—provisioning covers net charge-offs, and capital remains solid with a holding company leverage ratio of about 13.1% and CET1 >15.5%.

NewtekOne NASDAQ: NEWT reported what management described as a “really good start to 2026,” highlighting first-quarter earnings that modestly exceeded consensus expectations, strong origination volumes, rapid deposit growth, and improving credit trends at its bank subsidiary.

Barry Sloane, President, CEO, and founder, said the company is now in its 25th year as a publicly traded company and its 13th quarter reporting as a bank holding company following the acquisition of National Bank of New York City. Sloane said the organization has grown from roughly $180 million of total assets at the acquired bank to a financial holding company with approximately $2.9 billion in assets, while the bank has grown to over $2 billion of deposits from $140 million at the time of acquisition.

Quarterly results and guidance

Sloane reported first-quarter 2026 EPS of $0.43, which he said was about $0.01 above Street consensus and within the company’s $0.37 to $0.47 guidance range. He said EPS reflected 19% and 23% growth over Q1 2025 for basic and diluted EPS, respectively.

Management reaffirmed its 2026 earnings outlook and provided an early view into 2027. Sloane said NewtekOne reaffirmed 2026 EPS guidance with a midpoint of $2.35 and established a 2027 midpoint of $2.60. He also emphasized growth in book value metrics, noting book value per share of $12.35 at quarter-end and tangible book value per share of $11.84, up from $6.92 in Q1 2023.

Frank DeMaria, CFO of NewtekOne and Newtek Bank, said consolidated profitability remained “very strong,” citing a Q1 return on average assets just below 2% and a return on tangible common equity approaching 15%. Both Sloane and DeMaria noted seasonality, with DeMaria reiterating that the first quarter is typically the company’s weakest period.

Originations, technology, and operating leverage

Sloane pointed to increased loan production supported by technology and process changes. He said NewtekOne originated 961 loan units in Q1 2026, up 40% year over year, with 500 units originated in March versus 287 in the prior-year March. In dollar terms, Sloane said total originations were $391 million compared with $366 million in Q1 2025, adding that March momentum continued into April with approximately 10% year-over-year growth.

He also described what he called operating leverage: Q1 2026 operating expense was up over 7.5% on 35% year-over-year asset growth. Sloane said the company uses AI to analyze documents such as tax returns and lease agreements for smaller-balance loans, and reiterated the company’s capability to fund certain loans under $350,000 within seven days after an application is completed.

In discussing its operating model, Sloane described Newtek Bank as “traditional bankerless and branchless” and pointed to the bank’s 40% efficiency ratio for the quarter. He also outlined deposit pricing, saying the bank pays 1% on checking and 3.5% on business savings with what he called a “true no asterisk, zero fee bank account.”

Deposit growth and real-time payments

Management highlighted rapid deposit and account growth. Sloane said Newtek ended Q1 2026 with 37,000 deposit accounts, more than doubling year over year. He said deposits have grown from $142 million to $1.9 billion in 13 quarters.

Sloane broke out deposit trends, stating business deposits increased by $37 million quarter over quarter and $173 million year over year, while consumer deposits increased by $392 million quarter over quarter and $668 million year over year. He also said that since the bank acquisition in 2023, 54% of lending clients have opened a business deposit account.

During Q&A, DeMaria said average deposit account sizes were “relatively small” on the consumer side at around $10,000, while business accounts averaged closer to $250,000. Sloane also emphasized that deposits were largely insured, stating that 78% are insured.

Sloane said the bank is now live for receiving real-time payments through both FedNow and The Clearing House RTP. He also discussed the possibility of using stablecoin in the future for faster money movement, while stating the company does not intend to use stablecoin for deposits.

Portfolio mix shift, credit trends, and funding strategy

Executives repeatedly stressed credit quality and a shift toward originating and funding longer-amortizing C&I loans within the bank. DeMaria said exceptional deposit growth led to a quarter-over-quarter shift in earning assets and “meaningful” net interest margin compression, though he noted net interest income dollars continued to rise. He also said significant loan production in the second half of the quarter “should bode well” for net interest income and the bank’s net interest margin in Q2.

DeMaria said loans at Newtek Bank now comprise 83% of total loans, up from 65% at year-end 2025 and 57% in Q1 2025, citing the shift of C&I LA originations into the bank, a Q1 securitization that moved loans off balance sheet, and the wind-down of the Newtek Small Business Finance (NSBF) portfolio.

On credit, DeMaria said:

• Delinquencies were down for a third consecutive quarter.
• The ratio of non-performing loans to loans, excluding government-guaranteed loans, was down for a fourth consecutive quarter.
• Provisioning continues to cover net charge-offs.
• Net charge-offs have increased as the portfolio seasoned, which he said was anticipated in the CECL calculation and reflected in building the allowance for credit losses.

DeMaria also described capital levels supporting growth, citing a leverage ratio above 13%, CET1 over 15.5%, Tier 1 capital above 18%, and total capital approaching 19.5%. Later, in response to an analyst question, DeMaria clarified that the holding company leverage ratio was 13.1%.

Sloane discussed the benefits of shifting C&I LA lending from warehouse funding at the holding company to deposit funding at the bank, noting prior warehouse costs of approximately SOFR +325 and describing the capital intensity of warehouse funding versus bank funding. In Q&A, he said he expects loan growth to be “in the bank” and not at the holding company, and characterized expected growth as “low double-digit,” with greater diversification and improved credit metrics as more C&I LA loans are added.

Regarding securitizations, Sloane said the company launched its fourth C&I LA securitization in January 2026, involving $295 million of securitized notes backed by $342 million of loans, and called it the company’s 17th securitization. He said the deal was “10x oversubscribed” with 32 institutions purchasing notes. Looking ahead, he told analysts the next securitization is hoped to be a Q4 event with a collateral pool of $400 million to $500 million, and confirmed it would come out of the bank.

On SBA loan sales, Sloane said secondary market pricing was being maintained around 110.5. DeMaria reported gain on sale of about $26.7 million for the quarter, driven mainly by 7(a) sales. Sloane also stated that the company’s SBA production is 100% floating.

Sloane closed the call by reiterating that management expects to use its liquidity and deposit inflows to support loan growth, even if excess cash at the Fed creates a near-term earnings drag, and said the company looks forward to “delivering great results for the Q2 as well.”

About NewtekOne NASDAQ: NEWT

NewtekOne, Inc NASDAQ: NEWT is a publicly traded business development company that specializes in providing financial and business services to small and medium‐sized enterprises across the United States. Operating under the trade name The Newtek Small Business Finance, the company offers a diversified array of lending solutions designed to meet the working capital, equipment acquisition and growth needs of its clients.

The company's core lending offerings include Small Business Administration (SBA) 7(a) loans, equipment financing, lines of credit and commercial real estate financing.

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