Newtek Business Services Corp. (“Newtek” or the “Company”) (Nasdaq:
NEWT), an internally managed business development company (“BDC”),
announced today its financial and operating results for three and
six months ended June 30, 2022.
Barry Sloane, Chairman, President and Chief Executive Officer
said, “We are very pleased to report our results for the second
quarter 2022. We are proud to have been able to deliver what we
believe are strong results that meet our earnings and dividends
forecasts. Furthermore, we were able to grow SBA 7(a) loan fundings
by 112.8%, to a record $200.6 million, and increase loan units
funded by 154%, for the three months ended June 30, 2022. In
addition, we funded $62.0 million of SBA 7(a) loans in July 2022.
We are particularly proud because we believe that these record loan
fundings were accomplished without reducing the credit quality of
our borrowers; to the contrary, we believe that we tightened credit
standards which resulted in a reduced approval-rate percentage of
loans presented to the loan committee. Our year-over-year
comparables across some of our metrics, however, were down, even
though we posted strong results. We believe this decline was
primarily attributable to the fact the first two quarters of 2021
earnings materially benefited from Paycheck Protection Program
("PPP") fee income. As previously stated, this PPP fee income is
non-recurring, and has since been replaced with earnings from our
core and growing business lines and activities. We firmly believe
that our trajectory and growth will allow us to ultimately surpass
the earnings achieved during the PPP and pandemic-affected
environment, and that our business operations and strategy,
including the pending acquisition of the National Bank of New York
City ("NBNYC"), which remains subject to regulatory approvals, and
becoming a publicly traded bank holding company, is occurring at an
advantageous time." Second Quarter 2022 Financial
Highlights
- Total investment income of $19.2 million for the three
months ended June 30, 2022; a decrease of (47.5)% compared to total
investment income of $36.6 million for the three months ended
June 30, 2021. Second quarter 2021 total investment income included
$25.5 million of fee income from the PPP which, as previously
disclosed, is not recurring.
- Net investment income (loss) of $(2.3) million, or $(0.09)
per share, for the three months ended June 30, 2022, which
represents a (113.0)% decrease, on a per share basis, compared to
net investment income of $15.5 million, or $0.69 per share,
for the three months ended June 30, 2021. Second quarter 2021 net
investment income included $25.5 million of fee income from
the PPP which, as previously disclosed, is not recurring.
- Adjusted net investment income ("ANII")1 of $18.1 million,
or $0.75 per share, for the three months ended June 30, 2022; a
decrease of (37.5)%, on a per share basis, compared to ANII of
$27.0 million, or $1.20 per share, for the three months ended
June 30, 2021. Second quarter 2021 ANII included $25.5 million
of fee income from the PPP which, as previously disclosed, is not
recurring.
- Debt-to-equity ratio of 1.31x at June 30, 2022; proforma
debt-to-equity ratio was 1.15x after taking into account the sales
of government-guaranteed portions of SBA 7(a) loans prior to June
30, 2022, which sales settled subsequent to the balance sheet
date.
- Total investment portfolio increased by 8.8% to
$757.1 million at June 30, 2022, from $696.1 million at
June 30, 2021.
- Net asset value (“NAV”) of $394.5 million, or $16.31 per
share, at June 30, 2022 compared to NAV of $16.38 per share at
June 30, 2021.
2022 Financial Highlights For the Six Months Ended June
30, 2022
- Total investment income of $39.6 million for the six
months ended June 30, 2022; a decrease of (44.5)% over total
investment income of $71.3 million for the six months ended
June 30, 2021 which included $49.7 million of fee income from
the PPP, which, as previously disclosed, is not recurring.
- Net investment income (loss) of $(1.3) million, or $(0.05)
per share, for the six months ended June 30, 2022, which represents
a (103.6)% decrease, on a per share basis, compared to net
investment income of $30.7 million, or $1.37 per share, for the six
months ended June 30, 2021, which included $49.7 million of
fee income from the PPP which, as previously disclosed, is not
recurring.
- ANII1 of $35.3 million, or $1.46 per share, for the six
months ended June 30, 2022; a decrease of (35.1)%, on a per share
basis, compared to ANII of $50.5 million, or $2.25 per share,
for the six months ended June 30, 2021, which included
$49.7 million of fee income from the PPP which, as previously
disclosed, is not recurring.
- ANII of $1.46 per share for the six months ended June 30, 2022
was greater than the midpoint of our previously issued ANII
forecast, for the six months ended June 30, 2022, of $1.40 per
share to $1.50 per share.
Additional Second Quarter
Highlights
- On June 1, 2022, at a special meeting of shareholders, Newtek
shareholders overwhelmingly approved a proposal authorizing the
Company’s Board of Directors to discontinue the Company’s election
to be regulated as a BDC under the Investment Company Act of 1940,
as amended (subject to certain regulatory approvals and closing
conditions described in the Company’s Proxy Statement dated May 2,
2022) (the “Proposal”). As previously disclosed in a Form 8-K, 89%
of the votes cast at the Special Meeting were in favor of the
Proposal.
2022 Dividend Declarations & Payments
- On June 30, 2022, the Company paid a second quarter 2022
cash dividend of $0.75 per share to shareholders of record as of
June 20, 2022, which represented a 7.1% increase over the
second quarter 2021 dividend of $0.70 per share.
- The Company has paid and declared dividends totaling $1.40 per
share for the first and second quarters of 2022, which represents a
16.7% increase over dividends paid in the first and second quarters
of 2021.
- The Company forecasts paying a third quarter 2022 and fourth
quarter 2022 total dividend in a range of $1.00 per share to $1.50
per share, which dividends are expected to be paid by December 31,
2022, subject to Board approval, and is currently forecasting a
full year 2022 dividend of between $2.40 per share and $2.90 per
share.2
Lending Highlights
- Newtek Small Business Finance, LLC (“NSBF”) funded a record
$200.6 million of SBA 7(a) loans during the three months ended June
30, 2022; a 112.8% increase over the $94.3 million of SBA 7(a)
loans funded for the three months ended June 30, 2021.
- NSBF funded a record $363.9 million in SBA 7(a) loans for the
six months ended June 30, 2022, which represents an 83.2% increase
over $198.6 million SBA 7(a) loan fundings for the six months ended
June 30, 2021.
- NSBF funded $62.0 million SBA 7(a) loans during July 2022.
- NSBF forecasts funding approximately $750 million of SBA 7(a)
loans for the full year 2022, which would represent a 33.8%
increase over $560.6 million of SBA 7(a) loans funded in 2021.
- Newtek Business Lending ("NBL"), forecasts closing
approximately $150 million SBA 504 loans for the full year 2022,
which would represent a 66.5% increase over $90.1 million of SBA
504 closings in 2021.
Mr. Sloane continued, “We are exceptionally pleased with our
quarterly and first half of 2022 performance, in particular given
the market headwinds that publicly traded companies are facing,
which are out of anyone's control. Our weighted average net
gain-on-sale price for the second quarter 2022, which reflects
lagging prime rate increases and other capital market pressures,
decreased by 2.5% over the first quarter of 2022, however our core
business operations were able to make up for the decline by NSBF
funding 330 SBA 7(a) loan units in the second quarter 2022,
compared to 130 SBA 7(a) loan units in the same period last year.
Over our 24-year operating history, we believe that Newtek has
demonstrated its ability to push itself through high-rate,
low-rate, good credit and poor credit environments, and we believe
that it has been able to outperform market participants and
competitors. Being able to meet and exceed the midpoint of our ANII
targets, even with a 2.5% reduction in weighted average net
gain-on-sale pricing for the quarter, is evidence of such
resilience. Moreover, we are pleased to report that our borrowers
are currently above a 98% currency ratio in our accrual loan
portfolio as of June 30, 2022, and remain confident in the manner
in which we manage our relationships with our borrowers and work
with them to offer the best business and finance solutions
available in the market. In addition, I want to commend Newtek’s
senior management team and all staff for being able to deliver
these strong results while simultaneously positioning the Company
for what we believe will be a transition into owning a federally
chartered bank, NBNYC (subject to regulatory approvals and closing
conditions), which we contracted to purchase slightly over one year
ago, and converting Newtek into a bank holding company. We recently
received what we believe is an overwhelming shareholder response at
our special meeting of shareholders where 89% of Newtek’s
shareholders voting at the meeting gave Newtek’s board of directors
authorization to discontinue Newtek’s election as a BDC. I have a
tremendous appreciation for all of the work our staff has done
during the ongoing regulatory application process and to prepare
for the closing of the NBNYC acquisition, while simultaneously
working tirelessly to deliver above-average results to shareholders
during one of the most challenging market environments we have
experienced in the last decade. We continue to believe that the
required regulatory approvals will be forthcoming within the third
quarter of 2022.”
Mr. Sloane further commented, “In a separate press release,
issued today, we forecasted our total dividends for the second half
of 2022 in a range of $1.00 per share to $1.50 per share, which are
expected to be paid by December 31, 2022, and out of taxable income
as they always have been paid, subject to Board
approval. Newtek has paid a total of $1.40 per share in
dividends year to date through June 30, 2022, and we are currently
forecasting a full year 2022 dividend of between $2.40 per share
and $2.90 per share. We also provided the markets with an
illustration of certain financial targets for Newtek for 2023 as a
bank holding company, including from an earnings projection and
capital-level basis, if we were to receive regulatory approvals and
close the acquisition. This illustration can be found on our
corporate website at www.newtekone.com in the ‘Investor Relations’
section under ‘Events and Presentations’ and is titled ‘July 2022
Illustration of the NBNYC Acquisition and Conversion of Newtek
Business Services Corp. to a Bank Holding Company’. We would like
to note that management is even more confident in its decision to
acquire a bank and convert to a bank holding company given the
change in climate for interest rates, commercial finance, quality
spreads, and the hopeful and anticipated targets for capitalization
and earnings.”
Mr. Sloane concluded, “Through this new pending structure, in
addition to lowering our cost of capital and supporting our overall
growth, we believe our ability to deliver superior products as a
bank holding company and bank, and satisfy our client’s needs, will
be materially enhanced, helping us improve the business prospects
of independent business owners through our technology-enabled bank
in a significant way. We believe the process of acquiring NBNYC has
illuminated how advanced our two-decade-long history of
establishing people, processes, and technology is, and may allow us
to unlock shareholder value by potentially creating joint ventures
with, and licensing our technology to, other market participants
and distributing our technology to other financial institutions,
including but not limited to community banks, regional banks and
credit unions, which we believe could place us in an position to
monetize our technological assets and processes. During our
earnings conference call we will discuss the NewtekOne DashboardTM,
which we will be positioning as “The Newtek AdvantageTM”, which we
believe will allow us to offer our future banking clientele the
relationships, analytics, software, and transactional capability
that other banks simply do not offer. We will discuss this and our
financial and operating results on our earnings conference call
tomorrow morning at 8:30 am ET, along with what we believe are a
plethora of opportunities ahead for our organization.”
Second Quarter 2022 Conference Call and
Webcast
A conference call to discuss second quarter 2022 results will be
hosted by Barry Sloane, President, Chairman and Chief Executive
Officer, and Nicholas Leger, Chief Accounting Officer, tomorrow,
Thursday, August 4, 2022 at 8:30 a.m. ET.
Please note, to attend the conference call or webcast,
participants should register online at
http://investor.newtekbusinessservices.com/events-and-presentations.
To receive a dial-in number, participants are requested to register
one day in advance or at a minimum 15 minutes before the start of
the call. The corresponding presentation will be available in the
‘Events & Presentations’ section of the Investor Relations
portion of Newtek’s website at
http://investor.newtekbusinessservices.com/events-and-presentations.
A replay of the call with the corresponding presentation will be
available on Newtek’s website shortly following the live
presentation and will be available for a period of 90 days.
1Use of Non-GAAP Financial Measures -
Newtek Business Services Corp. and Subsidiaries
In evaluating its business, Newtek considers and uses ANII as a
measure of its operating performance. ANII includes short-term
capital gains from the sale of the guaranteed portions of SBA 7(a)
loans and conventional loans, and beginning in 2016, capital gain
distributions from controlled portfolio companies, which are
reoccurring events. The Company defines ANII as net investment
income (loss) plus net realized gains recognized from the sale of
guaranteed portions of SBA 7(a) loan investments, less realized
losses on non-affiliate investments, plus the net realized gains on
controlled investments, plus or minus the change in fair value of
contingent consideration liabilities, plus loss on extinguishment
of debt, plus or minus an adjustment for gains or losses on
derivative transactions.
We do not designate derivatives as hedges to qualify for hedge
accounting and therefore any net payments under, or fluctuations in
the fair value of, our derivatives are recognized currently in our
GAAP income statement. However, fluctuations in the fair value of
the related assets are not included in our income statement. We
consider the gain or loss on our hedging positions related to
assets that we still own as of the reporting date to be “open
hedging positions.” While recognized for GAAP purposes, we exclude
the results on the hedges from ANII until the related asset is sold
and/or the hedge position is “closed,” whereupon they would then be
included in ANII in that period. These are reflected as “adjustment
for realized gain/(loss) on derivatives” for purposes of computing
ANII for the period. Management believes that excluding these
specifically identified gains and losses associated with the open
hedging positions adjusts for timing differences between when we
recognize changes in the fair values of our assets and changes in
the fair value of the derivatives used to hedge such assets.
The term ANII is not defined under U.S. generally accepted
accounting principles, or U.S. GAAP, and is not a measure of
operating income, operating performance or liquidity presented in
accordance with U.S. GAAP. ANII has limitations as an analytical
tool and, when assessing the Company’s operating performance,
investors should not consider ANII in isolation, or as a substitute
for net investment income, or other consolidated income statement
data prepared in accordance with U.S. GAAP. Among other
things, ANII does not reflect the Company’s actual cash
expenditures. Other companies may calculate similar measures
differently than Newtek, limiting their usefulness as comparative
tools. The Company compensates for these limitations by
relying primarily on its GAAP results supplemented by ANII.
Reconciliation tables showing the adjustments made to net
investment income to determine NII are attached to this press
release.
2 Note Regarding Dividend
PaymentsAmount and timing of dividends, if any, remain
subject to the discretion of the Company's Board of Directors. The
Company's Board of Directors expects that it will maintain its
status as a BDC and regulated investment company ("RIC") in the
near term, and therefore expects to maintain a dividend policy with
the objective of making quarterly distributions in an amount that
approximates 90 - 100% of the Company's annual taxable income. The
determination of the tax attributes of the Company's distributions
is made annually as of the end of the Company's fiscal year based
upon its taxable income for the full year and distributions paid
for the full year.
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
StatementsThis 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 “Transaction”), obtain required regulatory approvals for
the pending Transaction, the timing of the closing of the
Transaction, the timing of the Company’s discontinuance from
regulation as a BDC under the 1940 Act, projections concerning or
considering the pending Transaction, the timing of our 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
NEWTEK BUSINESS SERVICES CORP. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF ASSETS AND
LIABILITIES(In Thousands, except for Per Share
Data) |
|
June 30, 2022 |
|
December 31, 2021 |
ASSETS |
(Unaudited) |
|
|
Investments, at fair
value |
|
|
|
SBA unguaranteed non-affiliate investments (cost of $470,399 and
$431,970, respectively; includes $312,677 and $344,266,
respectively, related to securitization trusts) |
$ |
459,981 |
|
$ |
424,417 |
SBA guaranteed non-affiliate investments (cost of $26,595 and
$65,728, respectively) |
|
28,192 |
|
|
72,970 |
Controlled investments (cost of $165,273 and $157,289,
respectively) |
|
267,924 |
|
|
260,398 |
Non-control investments (cost of $1,000 and $1,000,
respectively) |
|
1,000 |
|
|
1,000 |
Total investments at fair
value |
|
757,097 |
|
|
758,785 |
Cash |
|
4,165 |
|
|
2,397 |
Restricted cash |
|
121,861 |
|
|
184,463 |
Broker receivable |
|
78,721 |
|
|
44,537 |
Due from related parties |
|
841 |
|
|
4,395 |
Servicing assets, at fair
value |
|
31,820 |
|
|
28,008 |
Right of use assets |
|
6,695 |
|
|
7,310 |
Other assets |
|
25,097 |
|
|
26,666 |
Total assets |
$ |
1,026,297 |
|
$ |
1,056,561 |
|
|
|
|
LIABILITIES AND NET ASSETS |
|
|
|
Liabilities: |
|
|
|
Bank notes payable |
$ |
127,414 |
|
$ |
50,000 |
2024 Notes (par: $38,250 and $38,250 as of June 30, 2022 and
December 31, 2021) |
|
37,790 |
|
|
37,679 |
2025 6.85% Notes (par: $0 and $15,000 as of June 30, 2022 and
December 31, 2021) |
|
— |
|
|
14,545 |
2025 5.00% Notes (par: $30,000 and $0 as of June 30, 2022 and
December 31, 2021) |
|
29,187 |
|
|
— |
2026 Notes (par: $115,000 and $115,000 as of June 30, 2022 and
December 31, 2021) |
|
112,487 |
|
|
112,128 |
Notes payable - Securitization trusts (par: $207,582 and $249,750
as of June 30, 2022 and December 31, 2021) |
|
204,690 |
|
|
246,250 |
Notes payable - related parties |
|
200 |
|
|
11,450 |
Due to related parties |
|
855 |
|
|
1,490 |
Lease liabilities |
|
8,323 |
|
|
9,056 |
Deferred tax liabilities |
|
12,793 |
|
|
12,733 |
Due to participants |
|
83,050 |
|
|
146,225 |
Derivative instruments |
|
— |
|
|
183 |
Accounts payable, accrued expenses and other liabilities |
|
14,976 |
|
|
10,935 |
Total liabilities |
|
631,765 |
|
|
652,674 |
|
|
|
|
Commitment and
contingencies |
|
|
|
Net assets: |
|
|
|
Preferred stock (par value $0.02 per share; authorized 1,000
shares, no shares issued and outstanding) |
|
— |
|
|
— |
Common stock (par value $0.02 per share; authorized 200,000 shares,
24,187 and 24,159 issued and outstanding, respectively) |
|
480 |
|
|
483 |
Additional paid-in capital |
|
368,934 |
|
|
367,663 |
Accumulated undistributed earnings |
|
25,118 |
|
|
35,741 |
Total net assets |
|
394,532 |
|
|
403,887 |
Total liabilities and net assets |
$ |
1,026,297 |
|
$ |
1,056,561 |
Net asset value per common
share |
$ |
16.31 |
|
$ |
16.72 |
NEWTEK BUSINESS SERVICES CORP. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) |
(In Thousands, except for Per Share Data) |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Investment income |
|
|
|
|
|
|
|
From non-affiliate investments: |
|
|
|
|
|
|
|
Interest income - PPP loans |
$ |
— |
|
|
$ |
25,512 |
|
|
$ |
— |
|
|
$ |
49,720 |
|
Interest income - SBA 7(a) loans |
|
8,032 |
|
|
|
6,248 |
|
|
|
15,111 |
|
|
|
12,197 |
|
Servicing income |
|
3,175 |
|
|
|
2,787 |
|
|
|
6,356 |
|
|
|
5,527 |
|
Other income |
|
2,368 |
|
|
|
1,269 |
|
|
|
3,947 |
|
|
|
2,383 |
|
Total investment income from
non-affiliate investments |
|
13,575 |
|
|
|
35,816 |
|
|
|
25,414 |
|
|
|
69,827 |
|
From non-control investments: |
|
|
|
|
|
|
|
Interest income |
|
— |
|
|
|
124 |
|
|
|
— |
|
|
|
248 |
|
Dividend income |
|
21 |
|
|
|
21 |
|
|
|
43 |
|
|
|
47 |
|
Total investment income from
non-control investments |
|
21 |
|
|
|
145 |
|
|
|
43 |
|
|
|
295 |
|
From controlled investments: |
|
|
|
|
|
|
|
Interest income |
|
670 |
|
|
|
576 |
|
|
|
1,334 |
|
|
|
1,109 |
|
Dividend income |
|
4,960 |
|
|
|
51 |
|
|
|
12,784 |
|
|
|
51 |
|
Total investment income from
controlled investments |
|
5,630 |
|
|
|
627 |
|
|
|
14,118 |
|
|
|
1,160 |
|
Total investment income |
|
19,226 |
|
|
|
36,588 |
|
|
|
39,575 |
|
|
|
71,282 |
|
Expenses: |
|
|
|
|
|
|
|
Salaries and benefits |
|
4,499 |
|
|
|
5,926 |
|
|
|
9,608 |
|
|
|
10,376 |
|
Interest |
|
5,828 |
|
|
|
4,968 |
|
|
|
10,495 |
|
|
|
10,040 |
|
Depreciation and amortization |
|
60 |
|
|
|
79 |
|
|
|
123 |
|
|
|
164 |
|
Professional fees |
|
1,512 |
|
|
|
859 |
|
|
|
2,813 |
|
|
|
2,047 |
|
Origination and loan processing |
|
1,882 |
|
|
|
2,998 |
|
|
|
4,336 |
|
|
|
5,969 |
|
Origination and loan processing - related party |
|
5,239 |
|
|
|
4,510 |
|
|
|
9,268 |
|
|
|
7,653 |
|
Loss on extinguishment of debt |
|
417 |
|
|
|
— |
|
|
|
417 |
|
|
|
955 |
|
Other general and administrative costs |
|
2,043 |
|
|
|
1,706 |
|
|
|
3,796 |
|
|
|
3,341 |
|
Total expenses |
|
21,480 |
|
|
|
21,046 |
|
|
|
40,856 |
|
|
|
40,545 |
|
Net investment income
(loss) |
|
(2,254 |
) |
|
|
15,542 |
|
|
|
(1,281 |
) |
|
|
30,737 |
|
Net realized and unrealized
gains (losses): |
|
|
|
|
|
|
|
Net realized gain on non-affiliate investments - SBA 7(a)
loans |
|
19,891 |
|
|
|
11,414 |
|
|
|
35,186 |
|
|
|
18,807 |
|
Net realized gain on derivative transactions |
|
— |
|
|
|
— |
|
|
|
445 |
|
|
|
— |
|
Net unrealized appreciation (depreciation) on SBA guaranteed
non-affiliate investments |
|
(4,917 |
) |
|
|
(1,983 |
) |
|
|
(5,645 |
) |
|
|
2,410 |
|
Net unrealized appreciation (depreciation) on SBA unguaranteed
non-affiliate investments |
|
(872 |
) |
|
|
198 |
|
|
|
(2,862 |
) |
|
|
1,585 |
|
Net unrealized appreciation (depreciation) on controlled
investments |
|
1,566 |
|
|
|
(7,920 |
) |
|
|
(458 |
) |
|
|
(5,545 |
) |
Change in deferred taxes |
|
886 |
|
|
|
1,356 |
|
|
|
(57 |
) |
|
|
723 |
|
Net unrealized appreciation (depreciation) on non-control
investments |
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
524 |
|
Net unrealized appreciation (depreciation) on derivative
transactions |
|
— |
|
|
|
(37 |
) |
|
|
183 |
|
|
|
(37 |
) |
Net unrealized depreciation on servicing assets |
|
(781 |
) |
|
|
(1,193 |
) |
|
|
(2,340 |
) |
|
|
(1,706 |
) |
Net realized and unrealized
gains |
$ |
15,773 |
|
|
$ |
1,832 |
|
|
$ |
24,452 |
|
|
$ |
16,761 |
|
Net increase in net assets
resulting from operations |
$ |
13,519 |
|
|
$ |
17,374 |
|
|
$ |
23,171 |
|
|
$ |
47,498 |
|
Net increase in net assets resulting from operations per share |
$ |
0.56 |
|
|
$ |
0.77 |
|
|
$ |
0.96 |
|
|
$ |
2.12 |
|
Net investment income (loss) per share |
$ |
(0.09 |
) |
|
$ |
0.69 |
|
|
$ |
(0.05 |
) |
|
$ |
1.37 |
|
Dividends and distributions declared per common share |
$ |
0.75 |
|
|
$ |
0.70 |
|
|
$ |
1.40 |
|
|
$ |
1.20 |
|
Weighted average number of shares outstanding |
|
24,157 |
|
|
|
22,524 |
|
|
|
24,156 |
|
|
|
22,431 |
|
NEWTEK BUSINESS SERVICES CORP. AND
SUBSIDIARIESNON-GAAP FINANCIAL
MEASURES-ADJUSTED NET INVESTMENT INCOME
RECONCILIATION:
|
|
Six months ended |
|
|
|
Six months ended |
|
|
(in thousands, except per
share amounts) |
|
June 30, 2022 |
|
Per share |
|
June 30, 2021 |
|
Per share |
Net investment income (loss) |
|
$ |
(1,281 |
) |
|
$ |
(0.05 |
) |
|
$ |
30,737 |
|
$ |
1.37 |
Net realized gain on
non-affiliate investments - SBA 7(a) loans |
|
|
35,186 |
|
|
|
1.46 |
|
|
|
18,807 |
|
|
0.84 |
Adjustment for realized gain
on derivatives (1) |
|
|
1,010 |
|
|
|
0.04 |
|
|
|
— |
|
|
— |
Loss on debt
extinguishment |
|
|
417 |
|
|
|
0.02 |
|
|
|
955 |
|
|
0.04 |
Adjusted Net investment income |
|
$ |
35,332 |
|
|
$ |
1.46 |
|
|
$ |
50,499 |
|
$ |
2.25 |
Note: Amounts may not foot due to rounding
(1) The following is a reconciliation of GAAP net realized
gain/(loss) on derivative transactions to our adjustment for
realized gain/(loss) on derivatives on closed transactions
presented in the computation of ANII in the preceding tables:
|
|
Six months ended |
|
|
|
Six months ended |
|
|
(in thousands, except per
share amounts) |
|
June 30, 2022 |
|
Per share |
|
June 30, 2021 |
|
Per share |
Net realized gain on derivatives |
|
$ |
445 |
|
$ |
0.02 |
|
$ |
— |
|
$ |
— |
Hedging realized adjustment on
hedging positions closed during current period |
|
|
565 |
|
|
0.02 |
|
|
— |
|
|
— |
Adjustment for realized gain on derivatives |
|
$ |
1,010 |
|
$ |
0.04 |
|
$ |
— |
|
$ |
— |
Note: Amounts may not foot due to rounding
NEWTEK BUSINESS SERVICES CORP. AND
SUBSIDIARIESNON-GAAP FINANCIAL
MEASURES-ADJUSTED NET INVESTMENT INCOME
RECONCILIATION:
|
|
Three months ended |
|
|
|
Three months ended |
|
|
(in thousands, except per
share amounts) |
|
June 30, 2022 |
|
Per share |
|
June 30, 2021 |
|
Per share |
Net investment income (loss) |
|
|
(2,254 |
) |
|
|
(0.09 |
) |
|
$ |
15,542 |
|
$ |
0.69 |
Net realized gain on
non-affiliate investments - SBA 7(a) loans |
|
|
19,891 |
|
|
|
0.82 |
|
|
|
11,414 |
|
|
0.51 |
Loss on debt
extinguishment |
|
|
417 |
|
|
|
0.02 |
|
|
|
— |
|
|
— |
Adjusted Net investment income |
|
$ |
18,054 |
|
|
$ |
0.75 |
|
|
$ |
26,956 |
|
$ |
1.20 |
Note: Amounts may not foot due to rounding
NEWTEK BUSINESS SERVICES CORP. AND
SUBSIDIARIESDEBT-TO-EQUITY RATIO - ACTUAL AT JUNE 30, 2022
(in
thousands): |
|
|
|
Actual Debt-to-Equity Ratio at June 30, 2022 |
|
|
|
Total senior debt |
|
$ |
518,446 |
|
Total
equity |
|
$ |
394,532 |
|
Debt-to-equity ratio - actual |
|
1.31x |
|
|
|
|
|
NEWTEK BUSINESS SERVICES CORP. AND
SUBSIDIARIESDEBT-TO-EQUITY RATIO - PROFORMA AT JUNE 30, 2022
(in
thousands): |
|
|
|
Broker receivable, including premium income receivable |
|
$ |
78,721 |
|
|
Less:
realized gain on sale included in broker receivable |
|
|
(6,589 |
) |
|
Broker
receivable |
|
|
72,132 |
|
|
|
|
|
|
90%
advance rate on SBA guaranteed non-affiliate portions of loans
sold, not settled |
|
$ |
64,919 |
|
|
|
|
|
|
|
|
|
|
Proforma debt adjustments at June 30, 2022: |
|
|
|
Total
senior debt |
|
$ |
518,446 |
|
|
Proforma
adjustment for broker receivable |
|
|
(64,919 |
) |
|
Total
proforma debt |
|
$ |
453,527 |
|
|
|
|
|
|
|
|
|
|
Proforma Debt-to-Equity ratio at June 30,
2022: |
|
|
|
Total
proforma debt |
|
$ |
453,527 |
|
|
Total
equity |
|
$ |
394,532 |
|
|
Debt-to-equity ratio - proforma |
|
1.15x |
|
|
|
|
|
|
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