Q1 2025 NewtekOne Inc Earnings Call Transcript
Key Points
- NewtekOne Inc (NEWT) reported a strong first quarter 2025 with earnings per share of $0.35, exceeding the consensus estimate of $0.31.
- The company has successfully grown its deposit base and loan portfolio, emphasizing its digital banking model and technology-driven approach.
- NewtekOne Inc (NEWT) has a diversified revenue stream, including a successful securitization of alternative loan programs (ALP) with a 570 basis points spread.
- The company has a strong track record in the SBA loan business, with over two decades of experience and no downgrades in its 13 securitizations.
- NewtekOne Inc (NEWT) has demonstrated significant growth in shareholder equity, increasing by 47% over two years, despite paying a material dividend.
- The market has misunderstood NewtekOne Inc (NEWT)'s business model, leading to a lack of credit for its technological advancements and digital banking strategy.
- The company faces challenges in acquiring attractive credits due to a tougher credit environment, impacting loan volumes.
- There is a significant focus on credit concerns related to the SBA 7(a) loan portfolio, which is a fraction of NewtekOne Inc (NEWT)'s business.
- The CECL reserve accounting is punitive, requiring upfront loss recognition without immediate benefit from the Prime plus three coupon.
- Personnel changes, including the departure of key executives, have raised concerns about stability and continuity within the company.
Good day and thank you for standing by. Welcome to the NewtekOne, first quarter 2025 earnings conference call. (Operator Instructions)
I would now like to hand the conference over to your first speaker today, Barry Sloane, Chairman, President and CEO. Please go ahead.
Thank you very much and welcome everybody to our first quarter 2025 financial results conference call. Today I'm joined by my two chief financial officers, Scott Price, the CFO of Newtek Bank National Association, and Frank DeMaria, the CFO of NewtekOne, the publicly traded bank holding company.
For those of you who would like to follow along on our presentation, please go to our website, newtechone.com. Go to the investor relations section. And the PowerPoint presentation that we'll be addressing today is hung there.
I also wanted to do a couple of honorable mentions. I wanted to thank Bryce Rowe, who recently joined us as VP of Investor Relations. He's done a terrific job in
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