Q2 2025 NewtekOne Inc Earnings Call Transcript
Key Points
- NewtekOne Inc (NEWT) reported a 15% revenue growth in Q2 2025, reaching $70.2 million compared to $61 million in Q2 2024.
- The company successfully grew business deposits by $50 million sequentially, contributing to a 28 basis point decline in the bank's cost of funds.
- NewtekOne Inc (NEWT) maintained its earnings per share guidance of $2.10 to $2.50 for the calendar year 2024.
- The alternative loan program (ALP) is performing well, with three successful securitizations and high-quality loans that are accretive to earnings per share.
- The company's net interest margin at the bank increased by 56 basis points, indicating improved profitability.
- NewtekOne Inc (NEWT) faces challenges with nonperforming loans, although efforts are underway to sell these loans and improve metrics.
- The company experienced a $11.8 million negative impact on the net fair value line item due to the reversal of previous unrealized gains on ALP loans.
- There is a lower level of utilization on business accounts than desired, indicating room for improvement in customer engagement.
- The provision for credit losses is expected to increase in the second half of the year, which could impact profitability.
- Despite strong financial performance, NewtekOne Inc (NEWT) trades at a lower price-to-earnings ratio compared to the industry, reflecting market skepticism or lack of understanding of its business model.
Good day, and thank you for standing by. Welcome to the NewtekOne Inc second-quarter 2025 earnings conference call. (Operator Instructions)
Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, President and Chief Executive Officer, Barry Sloane. Please go ahead.
Thank you, operator, and welcome, everyone, to the NewtekOne NASDAQ NEWT second quarter 2025 financial results conference call. My name is Barry Sloane, CEO and President of NewtekOne. Joining me here today on the call will be Frank DeMaria, Chief Financial Officer of NewtekOne; and Scott Price, the CFO of Newtek Bank National Association.
I also want to introduce Bryce Rowe, who is not on the call in charge of Investor Relations. Bryce joined the organization recently from the firm of B Riley where he represented us. Bryce, he was there, was the equity analyst for BDCs and banks and very helpful and instrumental in shaping
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