NewtekOne, Inc. (NASDAQ: NEWT) (the “Company”) today updated the
market on its financial holding company transition and forecasts.
Barry Sloane, Chief Executive Officer, will hold a conference call
with Q&A on Wednesday, March 15, 2023 at 8:30 am ET, to discuss
this information in greater detail.
On January 6, 2023, the Company completed the acquisition of
National Bank of New York City ("NBNYC"), withdrew its BDC
election, and became a financial holding company. On January 13,
2023, Newtek Business Services Corp. changed its name to NewtekOne®
and NBNYC, the 59-year-old nationally chartered bank, was renamed
Newtek Bank, National Association, a wholly owned subsidiary
of NewtekOne. As a result, NewtekOne, a financial holding company,
no longer qualifies as a regulated investment company for federal
income tax purposes and will no longer qualify for accounting
treatment as an investment company. Going forward, Newtek Bank,
N.A. and NewtekOne's former portfolio companies and other
subsidiaries will be consolidated in the Company’s financial
statements. As a result, NewtekOne's financial reporting metrics
will change beginning with the first quarter 2023 quarterly
report.
Barry Sloane, Chairman, President and Chief Executive Officer
said, “Given the volatility in capital markets and banking deposit
funding, we thought it would be useful to update the market on our
transition to a financial holding company. Important to note,
neither NewtekOne or its subsidiaries are borrowers or depositories
with Silicon Valley Bank or Silvergate Bank. In addition, Newtek
Bank, N.A., as a depository, only accepts USD currency and has zero
exposure to any depositor or borrower who wants to transact in
crypto currency, and does not accept or recognize it as a form of
currency or barter.”
Mr. Sloane continued, “Newtek Bank, N.A. estimates it will raise
up to $150 million in additional bank deposits in the first quarter
of 2023, in addition to the $120 million in deposits inherited from
NBNYC at the close of the acquisition on January 6, 2023. Newtek
Bank’s cost-of-funds acquisition model assumed the deposits to be
raised during its first three quarters of operations to be of a
higher-cost nature versus non-interest bearing
(www.newtekbank.com). We believe that Newtek Bank can afford this
level of cost of funds as it still has a material cost savings over
NewtekOne’s legacy BDC cost of funds, and does not invest in
low-yielding securities or fixed income investments except for a de
minimis amount of securities for liquidity.”
Mr. Sloane further commented, “Our current loan fundings in the
first quarter of 2023 were adjustable-rate loans with double-digit
initial coupons in the SBA 7(a) category, which enables us to have
a net interest margin of over 5% even in this higher interest rate
environment. Gain-on-sale margins of SBA 7(a) loans have improved
by greater than 1.50% to 2.0%, net to Newtek, since the fourth
quarter of 2022 due to what we believe is the demand for
floating-rate government guaranteed loans which can get favorable
mark-to-market treatment even in a rising-rate environment. Lastly,
the Company is comfortable to reiterate its recently released first
quarter 2023 earnings guidance on a consolidated basis as well as
its 2023 and 2024 annual earnings guidance on a consolidated basis
in a range of $1.70 to $2.00 per share and a range of $2.80 to
$3.20 per share, respectively, given current trends in the
market.”
Mr. Sloane concluded, “As a BDC, the Company valued its assets
at fair value and had taken the appropriate write-downs as of
December 31, 2022, and we believe our assets have the appropriate
market value. We believe our recent transition to a financial
company leave us very well positioned, different from other bank
holding companies whose success depends almost entirely on low-cost
deposits and low-margin fixed-rate assets. Our business model is
the antithesis of this latter approach and positions us for success
in the market. We look forward to our first quarter 2023
earnings report as well as other updates that we will make to
analysts and market participants.”
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
at a minimum of 15 minutes before the start of the call. 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.
NewtekOne®, Your Business Solutions Company®, is a financial
holding company, which along with its bank and non-bank
consolidated subsidiaries, 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.
NewtekOne’s and its subsidiaries’ business and financial
solutions include: banking (Newtek Bank, N.A.), 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®, NewtekOne®, Newtek Bank, National
AssociationTM, Your Business Solutions Company® and One Solution
for All Your Business Needs® are registered trademarks of
NewtekOne, Inc.
Note Regarding Forward Looking
Statements
Certain statements in this press release are
“forward-looking statements” within the meaning of the rules and
regulations of the Private Securities Litigation and Reform Act of
1995. These statements are based on management’s current
expectations and are subject to uncertainty and changes in
circumstances. These statements are not guarantees of future
results or occurrences. Actual results and capital and other
financial conditions may differ materially from those included in
these statements due to a variety of factors. These factors
include, among others: macroeconomic and other challenges and
uncertainties related to the U.S. and global economies, as well as
the broader impacts to financial markets and the global
macroeconomic and geopolitical environments; higher inflation and
its impacts; higher interest rates and the impacts on macroeconomic
conditions, and NewtekOne, Inc.’s funding costs; NewtekOne, Inc’s
conversion to a financial holding company, consummation of the
acquisition of Newtek Bank, N.A. and NewtekOne’s limited experience
as a financial holding company and owning and operating a bank; and
the precautionary statements included in this release. Factors that
could cause NewtekOne, Inc’s actual results to differ materially
from those described in the forward looking statements can be found
in NewtekOne, Inc.’s Annual Report on Form 10-K for the year ended
December 31, 2021 and Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2022, June 30, 2022, and September 30,
2022, filed May 9, 2022, August 8, 2022, and November 8, 2022, with
the Securities and Exchange Commission and are available on
NewtekOne, Inc.’s website
(https://investor.newtekbusinessservices.com/sec-filings), and on
the Securities and Exchange Commission’s website (www.sec.gov). Any
forward-looking statements made by or on behalf of NewtekOne, Inc.
speak only as to the date they are made, and NewtekOne, Inc. does
not undertake to update forward-looking statements to reflect the
impact of circumstances or events that arise after the date the
forward-looking statements were made.
SOURCE: NewtekOne, Inc.
Investor Relations & Public
RelationsContact: Jayne Cavuoto Telephone: (212) 273-8179
/ jcavuoto@newtekone.com
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