NewtekOne, Inc. Shows Solid EPS Growth Amidst Challenges

NewtekOne, Inc. Reports Strong Financial Performance

NewtekOne, Inc. (NASDAQ: NEWT) has announced its financial results showcasing significant progress. The earnings per share for the recent quarter reached $0.36 and $0.35 on a basic and diluted basis, respectively. This reflects a robust performance given the fluctuating economic landscape and various financial pressures.

Commentary from Leadership

Barry Sloane, the CEO, expressed confidence in the company's strategy stating, "Despite a challenging economic climate, our performance has been commendable. Achieving diluted earnings per share of $0.35 signals our strong market position and the effectiveness of our operational model." 

Sloane further emphasized that NewtekOne's capability to generate profits even with precautionary measures for loan losses demonstrates the resilience of their business model. He noted that in the first quarter, the firm continued to experience profitability that significantly surpassed the average returns of banks in their asset category.

Financial Highlights for 1Q25

The financial highlights for the first quarter of the year include:

• Basic EPS of $0.36 and diluted EPS of $0.35, compared to $0.38 for both in the previous year.
• Book value per common share improved by 13.2% year-over-year, reaching $10.73.
• Tangible book value increased approximately 23.0% year-over-year to $10.17.
• Net income before taxes stood at approximately $11.6 million, reflecting a slight decline from the previous year's $13.1 million.
• Pre-provision net revenue surged by 47.0% year-over-year, amounting to approximately $25.2 million.
• The efficiency ratio showed marked improvement, decreasing to 62.1% from 70.6% a year ago.

Lending Performance Metrics

In terms of lending, NewtekOne experienced impressive performance metrics:

• SBA 7(a) loan originations totaled about $213.4 million, slightly above the previous year's $211.5 million.
• Alternative Loan Program (ALP) loan originations amounted to $68.5 million.
• Newtek Bank also showcased significant achievements, originating a total of $41.2 million and $22.7 million in commercial real estate (CRE) and commercial & industrial (C&I) loans respectively.

Expectations for 2025

The company has laid out ambitious forecasts for the year:

• Annual EPS guidance models project growth in the range of $2.10 to $2.50.
• Management anticipates funding $1 billion in SBA 7(a) loans, with provisions for a substantial increase in ALP originations to $500 million.
• Expected growth in deposits of approximately $345 million, bolstered by strong commercial deposit growth.

Strategic Growth and Market Positioning

Sloane pointed out that they are confident in NewtekOne's unique position as a financial holding company with a focus on both bank and non-bank operations. Through initiatives like the Alternative Loan Program and merchant services, they are able to diversify their revenue streams effectively. The management team looks forward to building on this foundation to enhance profitability as they navigate through market challenges.

Conclusion

NewtekOne, Inc. continues to forge a path in the financial services sector, demonstrating resilience and a clear strategy for growth amidst various economic pressures. Their focus on innovative solutions provides a solid base for future performance.

Frequently Asked Questions

What were NewtekOne’s key financial results for Q1 2025?

NewtekOne reported a basic EPS of $0.36 and diluted EPS of $0.35, alongside a significant increase in tangible book value.

How does NewtekOne's performance compare to the banking sector?

NewtekOne's profitability metrics have been reported to be nearly double the average profitability of similar-sized banks.

What is the outlook for NewtekOne for the year 2025?

The company forecasts an annual EPS in the range of $2.10 to $2.50 and anticipates considerable growth in loans and deposits.

What strategies is NewtekOne employing for growth?

The company is focusing on expanding its Alternative Loan Program and enhancing its financial service offerings to better serve clients.

Where can I find more information about NewtekOne's financial performance?

Further details are generally available in their quarterly earnings reports or during their conference calls.

About The Author

Hi there I'm 38-year-old author and financial consultant Owen Jenkins. Having worked in the financial sector for more than ten years, I am well-versed in the subtleties and complexity that mold our financial environment. Following a degree in finance, I worked in a number of financial institutions honing my abilities in market analysis, financial planning, and investment strategies.

My love is teaching others about investing and personal finance. My goal in writing many books and articles has been to demystify financial ideas and give readers the information they need to make wise financial decisions. I write with a direct, useful style that emphasizes doable suggestions for daily living.

Along with writing, I lead webinars and seminars where I impart knowledge on how to successfully negotiate the financial world. I also write for financial journals and show up as a guest expert on financial news programs a lot. Whether they are new to investing or want to improve their approach, my mission is to enable people to take charge of their financial futures.

Beyond work, I like to hike, play the guitar, and spend time with my family. I think that balance is crucial and want to encourage people to strike a balance between their financial aspirations and their hobbies. I want to help people succeed and achieve financial security through my work, so having a good influence.

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