Newtek Business Services Corp., (NASDAQ: NEWT), an internally
managed business development company (“BDC”), announced today that
Newtek Small Business Finance, LLC (“NSBF”) has funded a record
amount of SBA 7(a) loans for the three and six months ended June
30, 2022. For the three months ended June 30, 2022, NSBF funded a
record $200.6 million in SBA 7(a) loans, which represents a 112.7%
increase over $94.3 million SBA 7(a) loan fundings for the three
months ended June 30, 2021. For the six months ended June 30, 2022,
NSBF funded a record $363.9 million in SBA 7(a) loans, which
represents an 83.2% increase over $198.6 million SBA 7(a) loan
fundings for the six months ended June 30, 2021. In addition, for
the six months ended June 30, 3022, the Company reaffirmed its
forecasts for net investment income (loss) (“NII”) in a range
($0.01) per share to $0.00 per share and adjusted net investment
income (“ANII”) in a range of $1.40 per share to $1.50 per share.
Barry Sloane, Chairman, President and Chief Executive Officer
said, “We couldn’t be more pleased to announce record SBA 7(a)
fundings for the second quarter 2022. We believe these record
fundings are testament to a seasoned management team and staff, and
it is quite clear that the people, process, and software that we
have been able to put in place has given us strong momentum in the
second quarter and we believe will continue in the many quarters
ahead. Additionally, we look forward to reporting a growing and
robust pipeline of lending opportunities on our second quarter
earnings conference call. Furthermore, and important to note, is
that the year-over-year increase in second quarter 2022 loan
fundings was not driven by any reduction in the credit quality of
the borrowers we closed and funded loans for, as we do not believe
in sacrificing credit quality for the sake of growth. In fact,
during the second quarter 2022, the approval rate of all loan
requests submitted and decisioned at the loan-committee level was
lower than it has been in previous quarters which indicates a
modest tightening of loan approvals.”
Mr. Sloane continued, “We previously forecasted that we expected
to realize some margin compression in 2022 compared to the higher
margins in 2021 during which we realized record gain-on-sale and
margins. While we did experience margin compression in the second
quarter of 2022, we want to note we were still able to meet our
forecasts. We believe the decline in price margin we are seeing in
the sales of guaranteed portions of SBA 7(a) loan is primarily
driven by the Federal Reserve Bank (“Fed”) lagging behind the
Treasury market in short-term rates, which has caused a lag in
price adjustment on the floating-rate Prime, adjusted quarterly
based coupon of SBA 7(a) loans, which impacts the pricing on
government guaranteed loan sales and in the unguaranteed portions
of SBA 7(a) loans held in our portfolio. However, based on
commentary provided by the Fed, we believe the Fed will raise
interest rates, which we believe should translate into more
normalized pricing during the third quarter 2022, holding all else
constant.”
Mr. Sloane further stated, “Based upon improvements in our
process and people, we expect that going forward we will continue
to realize greater productivity in our SBA 7(a) and SBA 504
lending, as well as our non-conforming conventional lending
program. In addition, we also are hopeful to receive regulatory
approval to convert to a bank holding company as well as approval
to acquire the National Bank of New York City during the third
quarter 2022, which we believe will assist us in building bank
lending products and round out our lending menu, increasing
productivity in conforming C&I lending and well as conforming
CRE lending.”
Mr. Sloane concluded, “We are extremely proud that even with the
increased market instability and changes, we continue to be able to
deliver dividends to our shareholders which always have been
and continue to be paid out of taxable income. We continue to focus
on creating a diversified stream of income from our portfolio
companies which can help support our overall business model with
the goal of providing reoccurring streams of revenue and income
without the associated capital investment in the payments,
technology, payroll and insurance agency businesses. We look
forward to reporting our full second quarter 2022 earnings in the
first or second week of August. We hope to continue to demonstrate
that our 24-year-old organization, publicly traded for 22 years,
which has been through the 2008-2009 credit crisis and the
pandemic, during strong and weak credit environments, and high and
low interest rate environments, has been able to navigate all
market environments and deliver above-average results to
shareholders, will continue to do so. We thank our shareholders for
their continued support and most importantly, thank all Newtek
employees and the Newtek management team for delivering on our
strategy and great results to all stakeholders.”
Newtek Business Services Corp., Your Business Solutions
Company®, is an internally managed BDC, which along with its
controlled portfolio companies, provides a wide range of business
and financial solutions under the Newtek® brand to the small- and
medium-sized business (“SMB”) market. Since 1999, Newtek has
provided state-of-the-art, cost-efficient products and services and
efficient business strategies to SMB relationships across all 50
states to help them grow their sales, control their expenses and
reduce their risk.
Newtek’s and its portfolio companies’ products and services
include: 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® and Your Business Solutions Company® are registered
trademarks of Newtek Business Services Corp.
Note Regarding Forward Looking Statements
This press release contains certain forward-looking statements.
Words such as “believes,” “intends,” “expects,” “projects,”
“anticipates,” “forecasts,” “goal” and “future” or similar
expressions are intended to identify forward-looking statements.
All forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from the plans, intentions and expectations reflected in or
suggested by the forward-looking statements. Such risks and
uncertainties include, among others, include our ability to close
the pending acquisition of the National Bank of New York City (the
“Acquisition”), obtain required regulatory approvals for the
pending Acquisition, as well as projections concerning or
considering the pending Acquisition, our ability to originate new
investments, achieve certain margins and levels of profitability,
the availability of additional capital and the ability to maintain
certain debt to asset ratios, intensified competition, operating
problems and their impact on revenues and profit margins,
anticipated future business strategies and financial performance,
anticipated future number of customers, business prospects,
legislative developments and similar matters. Risk factors,
cautionary statements and other conditions, which could cause
Newtek’s actual results to differ from management’s current
expectations, are contained in Newtek’s filings with the Securities
and Exchange Commission and available through
http://www.sec.gov/. Newtek cautions you that forward-looking
statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected
or implied in these statements.
SOURCE: Newtek Business Services Corp.
Investor Relations & Public
RelationsContact: Jayne Cavuoto Telephone: (212) 273-8179
/ jcavuoto@newtekone.com
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