NewtekOne, Inc. Q1 FY2026 earnings call

• Emphasized the strength of the loan program with good credit and margins, repositioning of loan structures, and expertise in the market. • Highlighted success in the marketplace, recent deal details, and benefits of securitization like spread after servicing, duration benefit, and reduced operational costs. • Discussed consolidated profitability metrics, trends at New Tech Bank including loan and deposit growth, credit trends, held for investment loan portfolio, and healthy capital ratios. • Reaffirmed EPS and origination guidance for 2026 and laid out EPS range for 2027.

The businesses have been around for about 10 years with weighted average LDV 47% and debt service coverage over three. Recent deal 2026-1 had gross spread before servicing fee 6.6%. Consolidated profitability metrics: first quarter return on average assets just below 2%, return on tangible common equity approaching 15%, improving with step-ups over 2025 first quarter (seasonality with first quarter being weakest). New Tech Bank: returns on average assets, equity, tangible common equity picked up, efficiency ratio improved due to moving origination and funding of longer amortizing C&I loans to bank; deposit growth led to NIM compression but net interest income dollar balance increased; loan and deposit growth healthy, delinquencies and NPLs excluding government-guaranteed loans declined; loans at NewTek Bank now 83% of total loans; delinquencies down for three quarters, NPLs to loans excluding government-guaranteed loans down for four consecutive quarters, provisioning covers net charge-offs, net charge-offs picked up as loan portfolio seasoned; held for investment loan portfolio increased ~10% in first quarter with contributions from traditional CRE, traditional CNI, and unguaranteed SBA 7A loans (unguaranteed SBA 7A loans ~59% of held for investment book); strong asset growth supported by healthy capital ratios (leverage above 13%, CET1 over 15.5%, Tier 1 capital above 18%, total capital approaching 19.5%).

• Reaffirmed EPS and origination guidance for 2026. • Laid out an EPS range for 2027 to give market participants an early read on future trends. • Expect loan growth in the bank to be low double digit with greater diversification and improved credit metrics. • Hoping for a fourth quarter securitization event with a collateral pool of $400 to $500 million.

• Cash at the Fed is a drag on interest income. • Timing issues with loan yields due to securitization and recharacterization of income. • Need to balance growth with securitizations to manage capitalization, but management doesn't see stretching capital. • Changes in the SBA market like 100% of owners must be U.S. citizens reducing volume, restrictions on using funds for certain refinances affecting some lenders.

Q: On balance sheet growth, does it change loan growth trajectory?

A: Growth of loans will be in the bank, no loan origination at holding company, expect low double digit growth with greater diversification and improved credit metrics.

Q: On deposit side, will LDR normalize?

A: Have liquidity, will keep good amount, expect more business deposits over time as they take time.

Q: Lower loan yields, reason?

A: Mainly driven by ALP loans going off balance sheet at beginning of quarter and timing of originations later in second quarter.

Q: Leverage ratio, balancing growth?

A: Not stretching capital, capitalization and income will gravitate back up.

Q: Seven-day loan data and tech advantage?

A: Don't have specific breakout, tech-led stack helps convert funnel better.

Q: Next securitization?

A: Hoping for fourth quarter, collateral pool $400 - $500 million.

Q: SBA gain on sale premium and pricing dynamics?

A: Pricing maintained around 110.5, supply and demand held prices up, not seeing decline.

Q: Loan size and diversification?

A: Diversifying across different credit aspects and loan sizes.

Q: New business deposits average account size?

A: Consumer accounts around $10,000, business accounts closer to $250,000