Q2 2024 NewtekOne Inc Earnings Call Transcript
Key Points
- NewtekOne Inc (NEWT) reported Q2 2024 earnings of $0.43 per share, beating the consensus estimate of $0.405.
- Quarterly deposit growth at Newtek Bank was approximately 17%, significantly higher than the industry average.
- Net interest margin remained stable at 4.83% for the three months ended June 30, 2024.
- The company completed a successful securitization of its Alternative Loan Program, demonstrating strong demand and investor interest.
- NewtekOne Inc (NEWT) reaffirmed its full-year 2024 EPS guidance of $1.85 to $2.05, showing confidence in its financial outlook.
- Net interest margin contracted by 12 basis points during the quarter due to increased leverage and higher cash balances.
- The company experienced higher expenses for credit losses, which are anticipated to continue.
- Origination underperformance in 504, conforming C&I, and CRE loans was noted, with expectations to correct this in the second half of the year.
- Non-accrual loans increased to $13.5 million, primarily from the National Bank of New York City portfolio.
- The company faces challenges in managing credit and interest rate risks, particularly with the higher cost of deposits and expected charge-offs.
Good day, and thank you for standing by. Welcome to the NewtekOne, Inc. second-quarter 2024 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your first speaker for today, Barry Sloane, CEO and President. Barry?
Thank you, operator, and thanks everybody for attending our Q1 second quarter 2024 financial results conference call. Joining me on the call is Scott Price, the Chief Financial Officer at NewtekOne and Newtek Bank National Association. Also attending is Nick Young, President and Chief Operating Officer of Newtek Bank NA. For those of you, who'd like to follow along to our call today, please go to our website, newtekone.com, n-e-w-t-e-k-o-n-e dot com or the Investor Relations section on the presentation, and our PowerPoint presentation is hung there today. I'd like you to draw your attention to Slide #1 on a note regarding forward-looking statements. On Slide #2,
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