NEWTI

• Celebrated 3-year anniversary of owning an OCC chartered bank and acquisition in Jan 2023.
• Opened 9,000 new depository accounts and 34,000 active depository accounts.
• Highlighted technology like digital account opening and lending operating systems.
• Noted net income before taxes up 16.4% and total revenue up 10.6% in 2025.
• Focus on independent business owners (SMBs) as target market.
• Changed financial structure, with HoldCo regulated by Fed and bank by OCC.
• Tangible book value ended 2025 at $12.19, materially grown from ~$6.92 initially.
• January 2026 closed largest securitization for alternative loan program, which was 10 times oversubscribed.
• NSBF lending subsidiary loss expected to continue declining in 2026.
• ALP loans have stronger credit quality than 7(a) loans, with great margins and prepaid penalties.

• 2026 EPS guidance range: $2.15 to $2.55, midpoint $2.35.
• Projections include $1 billion of SBA 7(a) originations, $500 million of ALP (long amortizing C&I loan) originations, $175 million of SBA 504 originations, and $150 million of net growth in combined C&I and CRE portfolios.
• Quarterly EPS view for 2026 reflects first quarter securitization and projection of second securitization in fourth quarter.

For the fourth quarter 2025 and annual 2025, net income before taxes was approximately $80 million, up 16.4%. Total revenue, defined as the sum of net interest income and noninterest income, was $284 million, up 10.6% over 2024's $257 million. Deposit growth was significant with 9,000 new depository accounts and 34,000 active depository accounts opened. In terms of lending, ALP loans had a current origination balance of $694 million with nonperforming ALP loans at $27.6 million. The efficiency ratio at the HoldCo declined from 63.2 to 58.3 with assets up 33%, and at the bank, it was approximately 47%. The NSBF lending subsidiary's loss was $28.7 million in 2024 and expected to be ~$20 million in 2025, with further decline expected in 2026.

• NSBF lending subsidiary had a stressed portfolio from tougher vintages of 2021-2023, though stabilization in credits is seen.
• Impact of rate changes on loan debt service coverage, as rates went up 3-5 points affecting debt service.
• SBA rule changes, like citizenship issue and requiring forecasting of debt service coverage, which could disrupt competitors but also affect operations.
• Potential attrition of deposit clients if rates change significantly, though current deposit base is stable due to market rates and frictionless access.

Q: Tim Switzer asked about the sizable increase in deposit account openings in the quarter and expectations going forward.

A: Barry R. Sloane said it's due to frictionless digital access, generous deposit rates with 78% insured, and growing alliance partners.

Q: Tim Switzer also asked about noninterest income detail, specifically gain on sale.

A: Barry R. Sloane mentioned SBA world changes like citizenship issue and SBA moving away from SBSS score, expecting volumes to improve.

Q: Stephen Moss asked about business confidence and activity.

A: Barry R. Sloane said it's a k-shaped economy, with some businesses struggling and others doing well, hoping productivity kicks in in 2026.

Q: Stephen Moss asked about AOP originations cadence.

A: Barry R. Sloane said first quarter is typically weak for lending, but ALP loans have a good reputation for long-term patient capital.

Q: Christopher Nolan asked about leverage for EPS growth in 2026 and deposit growth mechanism.

A: Barry R. Sloane said leverage from growing business deposits and ALP loans, and deposit growth is via automatic application using loan data with KYC/AML/BSA checks.

Q: Dylan Hines asked about Newtek's SBA loans performance vs others.

A: Barry R. Sloane said 5-year and 10-year charge-off rates are about industry average, but margins dwarf some competitors.