NewtekOne Reports Q2 2026 Results: Full Earnings Call Transcript

NewtekOne (NASDAQ: NEWT ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

2 million in Q2 2025 to $25 million in Q2 2026. The company is transitioning more operations to Newtek Bank to increase efficiency, focusing on net interest income over gain-on-sale income, which may affect near-term earnings guidance. 2 billion over 14 quarters. Technological innovation continues to be a core focus, with efforts to use AI for data analysis and client interaction, potentially offering white-label technology solutions to other institutions.

Management expressed confidence in managing credit risk, citing a consistent track record of no credit downgrades and maintaining adequate reserves. Full Transcript OPERATOR Good day and thank you for standing by. Welcome to the NewtekOne second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode.

After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Barry Sloane, President and CEO of NewtekOne. Please go ahead. Barry Sloane, President and CEO Thank you very much, everyone, and welcome to our second quarter 2026 financial results conference call.

We appreciate everybody attending and thank you for tuning in today. I wanted to also let everybody know that presenting, in addition to myself, will be Frank DeMaria, EVP, CFO of NewtekOne, the publicly traded holding company, stock symbol NEWT, and Newtek Bank, National Association. We appreciate everyone patching into our call, and we always sort of start off with: why should you care about NewtekOne? The company was established in 1998.

I'm the original founder of the company, established out of a spare bedroom in a New York City apartment. When you take a look at the business model that we have today and look at metrics such as return on average assets, return on tangible common equity, the dividend yield, the book value, growth over time, all things that we'll talk about extensively today, it's a very interesting, what I would call a value and a growth story. However, three and a half years into our inception, we're still evolving, and we're appreciative of things that are changing in the marketplace today and we're adopting to all different changing conditions.

Obviously, if you take a look at our presentation today and recent presentations, more things are being done out of the bank than in the bank holding company. We recently acquired or merged the payroll solutions business into the bank. We're doing our commercial and industrial loans out of the bank. And one thing that's important to notice, you'll see that our income, our net interest income at the bank is growing, particularly on comparisons, and we'll talk about that in the call.

So I think going forward, as we transform, you'll see a little bit less gain on sale, more net interest income, more use of the balance sheet and the portfolio. I think as we've grown in this particular space, obviously we traded at market multiples to earnings of five and a half times to six times where the banking industry is trading at 9 or 11. So from that perspective, our goal is to do good credits, do what's best for shareholders, most importantly, really do a great job for our customers. And let's go to slide number three.

Newtek's mission statement hasn't changed from 1998: to provide business and financial solutions to this sort of underserved demographic, independent business owners in the United States. Most importantly, we provide real good products and solutions for our customers for the purpose of making them more successful. Many times I am asked, Barry, is there a comp, is there a company like yours? And I have to say, not really.

Sometimes historically that works against you. But from our perspective, we believe we've got the right business model, the right way to handle our customers, work with all of our employees, associates in-house to provide the solution to the client and really provide a valuable service to the independent business owner community. Which on slide number four we can see that utilizing technology, which we've done over two decades, is extremely important. Instead of traditional bankers' branches, we use technology to exchange data, analyze the data, put the data in a better decision making mode.

We've recently started to use AI when we're analyzing data coming to us from the customer. It reduces friction, increases speed, all these things are extremely valuable. So when we look at what we do, which is a technology-oriented company there to service the independent business community across the United States, we believe we have taken on some of the tasks in a bank holding company owning a nationally chartered bank that we think most of the market in the industry is interested in adopting to in a very big way, but is slow to adopt. Number one, the high-cost infrastructure with branches and traditional bankers.

For those of you that haven't used our solutions, you get an executive on camera 24/7 and you also get great software to exchange data that has minimal amounts of friction and, important for us, accuracy. Two, and by the way, the existing bank model is extremely costly. We think going forward the giants of the industry, the top four players, are pouring huge dollars into the space to do what we believe we have done within our confines already. Second, inefficient lending margins from loans that bear very little risk and frankly just really tight on the margins, deposit products that we're able to offer our business clients with.

Historically we're competing against zero interest paid and excessive fees for the business client. I think it's important our goal is to manage risk, not avoid it. Put a fair product and price onto our customers, beat the competition like merchant cash advance or daily debit type loans and basically provide our banking solution in a safe and sound manner. Slide number five.

These are things that you've heard previously. It pretty much labels all the things that we do. Slide number six. We talk about the importance of our target market, that SMB, SME, independent business owner.

There's 36 million of them in the United States. According to the Chamber of Commerce, it's 43% of US GDP. Importantly, over the last six and a half years, according to the SBA statistics, we have supported or created 280,000 jobs, second highest amongst all SBA lenders in the 7(a) program. The independent business owner is a huge economic demographic and even the top four large institutions struggle with acquiring the client, solutioning the client and therefore what we have built, our technology, our infrastructure—and we'll take you through some of those things today—we think is extremely valuable.

We don't believe it's fully reflected in our current stock price which is mostly driven by the typical analytics of taking the call report, pushing it through a model and coming out with numbers. By the way, I will comment: you know the concept of, you know, loan loss provisions and things of that nature. At the end of the day it's a business expense. That's what it is.

Now. You don't want it growing or going out of control, mind you. It's an organization that's been in this space for over 23 years lending to SMBs, 17 securitizations, never credit watch, never downgrade. So we're proud of what we've been able to accomplish.

Slide number seven talks about the quarterly highlights. 47 respectively. Importantly, book value — we have a slide to address that — continues to grow very nicely and that's really important. That's value to our shareholders.

6. At the holding company, ROA is 2%, compared very favorably to the industry. We recently switched to putting our C&I lending business down in the bank versus doing it up at the holding company. We believe this will pay great dividends going forward.

We'll continue to securitize the C&I loans out of the bank. We've had tremendous success in our digital account opening with deposit gathering, focusing on business and consumer-type deposits. 2 billion. Non-affiliate deposits increased in the quarter by $15 million.

And obviously the core consumer deposits, which are very sticky, not very transactional, with basically close to zero acquisition costs, climbed by $297 million in the quarter. And we're very proud of how we've been able to get deposits digitally. It's part of our technological advantage. Slide number 8.

We focus on tangible book value per share growth. You can see all the math and you can see that when you add the dividends in, it's been a nice run since we've gotten into this financial holding company owning a nationally chartered bank structure. 3% in 12 quarters since converting to a technology-enabled financial holding company. Extremely important.

We're very proud of growing tangible book. Obviously that's the value portion of it. Slide number 9 shows the profitability of NewtekOne with all these different data points. Slide number 10 really drills down on the deposit growth.

We talked about the non-affiliate deposits, we talked about the total deposit changes. Deposit accounts, 1,471 accounts quarter over quarter; core consumer, 2,600 accounts. I believe combined you're looking at about 40,000 depository accounts. Important to note, 81% of our depository accounts are insured under the $250,000 balance.

Loan-to-deposit ratio, about 90%. You know, when we think about deposits, we're extremely pleased with how we acquire them — extremely efficient — and we give a great value to consumers and businesses that do business with us, and that's very important for branding and brand loyalty. Slide number 11 talks about the three active C&I loan amortization securitizations. There's a lot to talk about with this.

We've spent a lot of time in prior calls which are all archived on our website. I think the important aspect of the C&I securitization business is what we refer to as the initial overcollateralization — that's more loans versus the bonds — and we hyper-amortize the bonds and drive the cash flow to pay the bonds down. So the current overcollateralization, for example on the 2026-1 deal which has just been done, started off at $47 million; it's grown by $11 million. 6 million; current OC is $45 million.

So you can see it's really nice growth there, about $13 to $14 million. The 2024 deal also, $14 million increase on the OC. You can see that the notes have paid down across all three issues, and obviously the collateral is paying down too at the same time. Let's go to slide number 12.

This is Newtek Bank financial highlights. You can see by putting more of our activity down in the bank, we believe we'll provide much greater efficiencies, much greater value. When you think of things like payments or insurance, those are both eligible. We want to do this slowly, we want to do it methodically, we want to do it correctly.

But when you look at our ROA, our ROTCE — these are numbers in the final column on slide number 12 — they are just extremely attractive. 2 million; Q2 2026, $25 million. That's the recurring income that most people that invest in institutions like ourselves really want to be very involved with. I also would like to point out the cost of deposits over this window has been pretty flattish, which we're really appreciative about.

As you go from Q2 2025 to Q2 2026, it actually declined from Q1 2026 to Q2 2026. Also a very nice NIM. That NIM is helped by putting more SBA 7(a) loans on our books and holding them prior to a potential sale, but we're going to hold more of these on our books. And in addition to that, the C&I LA business provides some nice NIM to the bank while we're accumulating for securitization.

When you take a look at our capital ratios, they're all in line with what we consider a more than adequately capitalized bank. Obviously we always focus on our cushion with respect to our ACL in particular, and we're pleased. 31%. 14%.

So it's a ratio we keep close attention to, to make sure that we've got the right amount of reserves. Because, as I said, we manage credit risk, we don't avoid it. These things are mark-to-market on a quarterly basis with our CECL calculation. So we're very pleased with how our performance has been over the course of three and a half years.

Many of you will see that we increased that provision on a quarterly basis and net charge-offs went down. So once again, we are pleased with how we're handling and managing the risks. Slide number 13. A little repetitive here with some charts and graphs, particularly — I just discussed the provision for credit losses versus net charge-offs at the bottom right category.

I will point out that although you see 30-days-past-due increasing somewhat, we believe that this is a brand-new bank with a brand-new portfolio. So when you're starting from zero, it's almost impossible, as you're climbing that default curve with most loans defaulting in the first 30 to 36 months — we've only been around for three and a half years — that is going to grow and it's going to begin to flatten. But once again, having the right reserves with the right underwriting and the right mix of assets is extremely important. Needless to say, most of that comes in from the SBA 7(a) business.

But by adding the higher-quality C&I LA, the CRE book, the C&I short-term book to the portfolio, I believe that our unguaranteed 7(a) balances are about 42%, down from close to 50, and we want to continue to diversify our book of business. Slide number 14 gives a nice quarterly profitability snapshot at the bank. You can see these numbers that don't look — frankly, they're really high, I'm sorry to say. I know that sounds funny, but people look at it and go, how can you do that?

Well, if you invest in assets that provide an attractive return net of the anticipated and expected losses and continue to manage that risk quarter to quarter, you'll do just fine. With that said, I would now like to pass the presentation off to Frank DeMaria, EVP and CFO of NewtekOne and Newtek Bank. Frank DeMaria, EVP and CFO Thanks, Barry. Barry's covered most of the highlights for the quarter, but I wanted to touch on a couple of noteworthy items that are outlined on the next couple of slides.

The pre-provision net revenue continues to grow in absolute dollar terms with balance sheet growth. 22% for this quarter, but still remains well ahead of the industry average, which is below 2%. Moving to the next slide, we provide some details on the bank's loans held for investment at cost, which is the loan portfolio against where CECL is applied, consistent with past quarters. As Barry mentioned, the bulk of our CECL reserves — about 89% of our allowance for credit losses — is directed at the unguaranteed SBA 7(a) loans.

56% of that portion of the loan portfolio, which is elevated to appropriately reflect the higher loss characteristics of those 7(a) loans. With that, I'll turn it back to Barry for some closing remarks before we take questions. Barry Sloane, President and CEO Thank you, Frank. Slide number 18.

I think this is an important slide. It's the technology. When you look at how we do our business, how we acquire clients — 600 to 800 unique business referrals a day — how we open up accounts for digital account opening, how we process loans through our secure file vault in an automated and frictionless manner, how we have rolled out our real-time payments offering so businesses can move money quicker, faster, cheaper with real-time information through the Newtek Advantage in an automatic manner to do so.

The NewTracker referral system, which is how we track referrals, manage the opportunity as it goes through — whether it's payroll, whether it's insurance, whether it's loans, whether it's deposits — everything is in NewTracker. At Newtek, we say if it's not in NewTracker, it doesn't exist.

And the very important Newtek Advantage, which is the business portal for the customer, that really helps the client with so many different things: to be able to make payroll from their banking interface, to be able to look at their credit card batches, refunds, chargebacks from their banking interface, to be able to look at their line of credit, to be able to see that they're not being charged for an ACH or a wire. It really is a tool that gives the customer an advantage and helps them manage their business.