NewtekOne's Successful $75 Million Senior Notes Offering Boosts Growth

NewtekOne Achieves Significant Funding Through Senior Notes Offering

NewtekOne, Inc. recently announced a landmark achievement by successfully completing an offering of $75 million in 8.6% Fixed Rate Senior Notes set to mature in 2029. This venture not only marks a pivotal moment for the company but also aligns with its ongoing strategy to elevate its financial position within the competitive banking landscape.

Headquartered in Boca Raton, Florida, NewtekOne is a national commercial bank that has made waves in the financial sector. The offering was facilitated by a consortium of reputable underwriters consisting of Morgan Stanley & Co. LLC, Keefe, Bruyette & Woods, Inc., Raymond James & Associates, Inc., and UBS Securities LLC, ensuring robust market interest and a successful launch.

Utilizing Proceeds for Strategic Goals

The proceeds from this offering, totaling $72.75 million before expenses, are intended for important capital allocations that include funding strategic investments, repaying existing debts, and supporting general corporate purposes. This proactive approach showcases NewtekOne’s commitment to strengthening its financial foundation while also allocating resources for growth.

Additionally, the underwriters were granted an option to purchase up to an extra $11.25 million in aggregate principal amount of the notes, reflecting their confidence in NewtekOne's financial trajectory. By taking advantage of favorable market conditions, the company has positioned itself favorably for future endeavours.

Strong Financial Performance and Management Changes

NewtekOne has not only focused on external funding but has also made significant strides internally. The recent appointment of Andrew Kaplan as the Chief Strategy Officer is a testament to the company’s emphasis on strategic leadership. Kaplan brings a wealth of experience in the banking and financial services industry, which will be invaluable as NewtekOne navigates through its growth plans.

An important development occurred when NewtekOne divested its subsidiary, Newtek Technology Solutions, Inc., to Paltalk, Inc. The transaction, which includes a $4 million cash payment and 4 million shares of Paltalk's newly created preferred stock, aligns with NewtekOne’s strategy to streamline operations and focus on core banking services.

Q2 2024 Earnings and Market Performance

In its latest financial results, NewtekOne surpassed the expectations of analysts for Q2 2024, reporting an earnings per share (EPS) of $0.43. Furthermore, the company reaffirmed its full-year EPS guidance, predicting a range between $1.85 and $2.05. This indicates a solid operational performance and reinforces investor confidence in the company's growth potential.

Understanding NewtekOne’s Market Position

According to recent financial analyses, NewtekOne's stock appears to be undervalued in relation to its earnings potential. With a market capitalization of approximately $289 million, it has a P/E ratio of 6.64, signaling an attractive investment opportunity for those looking to engage with a company on the rise. Moreover, with a PEG ratio of just 0.39, it shows promise for growth at a reasonable price.

A Commitment to Shareholders

NewtekOne is also known for its substantial commitment to returning value to shareholders, evidenced by a commendable dividend yield of 6.76%. The company has maintained its dividend payouts for an impressive ten consecutive years, reinforcing its dedication to delivering consistent returns.

While it’s noteworthy that three analysts have recently adjusted their earnings estimates downward for the coming period, NewtekOne’s dividend policy remains significant, and predictions suggest the company will continue to be profitable this fiscal year.

Frequently Asked Questions

What was the amount raised by NewtekOne in the recent offering?

NewtekOne raised $75 million through its recent senior notes offering.

What is the maturity date for the senior notes?

The senior notes are due to mature in 2029.

Who led the offering for NewtekOne?

The offering was led by underwriters including Morgan Stanley & Co. LLC and Raymond James & Associates, Inc.

How has NewtekOne performed in its recent earnings report?

NewtekOne reported an EPS of $0.43 for Q2 2024, surpassing analyst expectations.

What is NewtekOne’s approach to shareholder value?

NewtekOne has a strong commitment to returning value to shareholders, with a dividend yield of 6.76% maintained over the last ten years.

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