NewtekOne, Inc. Common Stock 2026 Q3 Earnings Call

Please go ahead. Thank you very much, operator, and good afternoon, everyone, and welcome to the third quarter 2026 financial results conference call for NewtekOne, stock symbol NEWT on the Nasdaq.

Joining me today on today's call is Frank DeMaria, the Chief Financial Officer of NewtekOne, as well as the CFO of Newtek Bank, National Association. I wanted to thank Bryce Rowe, in charge of investor relations for NewtekOne, for helping put the presentation together, and also the management team of all the Newtek entities for helping deliver a real solid quarter for us. For those of you that want to follow the PowerPoint presentation along, please go to newtekone.com, go to the investor relations section, and you'll be able to follow along with this presentation in that particular area under presentations. I'd like to bring everyone's attention to slide number 2 in that presentation.

Please note the note that is in the document regarding forward-looking statements. Let us go to slide number 3. Third quarter 2026 highlights. We delivered basic and diluted earnings per share of $0.34. We are able to reiterate the 2026 earnings per share guidance range of $1.70-$1.80 for the full calendar year. That is maintained. Important to note, up and to the right pattern in growth in book value and tangible value continues to be maintained intact. Matter of fact, our book value came in at $12.80, tangible book, $12.30, respectively. The tangible book value growth was up 10% year-over-year and 78% since we took over the bank in January of 2023 and converted the publicly traded NewtekOne into a financial holding company.

Also important to note that we are able to continue to grow earnings with real good operating leverage on a year-over-year basis. Our Q3 2026 operating expenses were flat and 3.7% respectively on asset growth of 47%. The 3.7% is on a year-over-year comparison. Important to note the company, since acquiring the nationally chartered bank, has had good experience in growing deposits, and they have more than doubled for the second consecutive quarter. In 15 quarters, we have grown Newtek Bank's deposits from $142 million when we took over the bank to $2.6 billion. Non-affiliate business deposits increased quarter-over-quarter and year-over-year by $13 million, $109 million respectively.

Core consumer deposits climbed $231 million quarter-over-quarter and $1.1 billion year-over-year, with loan originations also growing with deposits fueling that growth. Year-to-date loan originations of $1.2 billion were up 12% year-over-year. Also important to note for the SBA's fiscal year ending September 30, 2026, Newtek Bank ranked number 1 by volume, excuse me, number 1 in units of SBA loans approved and number 2 by dollars. Slide number 4. Focusing on NewtekOne, I think the important aspect of our organization as we look at the market and the economy, clearly the concept of how are businesses going to grow going forward with the marketplace really embracing artificial intelligence, or as the president calls it, super intelligence.

We have built one integrated platform over the course of 28 years to serve the 36 million demographic that are defined as U.S. SMBs through five digital solutions without the use of traditional bankers, brokers, or BDOs. We think this is extremely important because as the marketplace starts to move towards the use of super intelligence or artificial intelligence, organizations that embrace that, particularly financial institutions and banks, are going to be extremely important and viable going forward. We do have concerns over an industry that is primarily focused on traditional bankers and traditional branch network to acquire customers. On slide number 4, our NewTracker system, you could see, is able to acquire 600-800 unique business referrals per day, and the cost per referral is zero. We manage that through alliance partners. It's all in our public documentation and our 10-Ks and 10-Qs.

Organizations like UBS and Morgan Stanley and Raymond James, Mine came up with Trade Association, that don't make these types of loans, aren't depositories, don't do payroll, don't do insurance, don't do real-time payments, refer their customers to us to provide them solution and enhance the overall benefit to the relationship they have with the customer. I think it's important to note that over 28 years and 3 1/2 years operating as a digital direct bank, we have excelled in banking, lending, insurance, real-time payments, and payroll. The patented NewTracker system, which I think is extremely important to our business model and its proprietary capabilities, are extremely valuable.

The Newtek Advantage, which is the business portal which is on our website that gives the client a real advantage of doing business with us over other financial institutions, offers a single pane of glass delivering a full product suite to the customers. It gives them transactional capability, analytics, and data that our competitors simply do not. Looking at our organization further, we are an S&P-rated servicer. We're currently servicing over $5 billion worth of loans, and this is a business that we excel in. We service for the FDIC. We service for NCUA. NCUA is the credit union regulator. We have a nice reputation in servicing small and medium-sized business owners and loans that are made to that particular investor group. Also important to note, we have a frictionless digital account opening infrastructure that continues to gain momentum.

Now, a lot of banks have digital account opening, but it is primarily for consumer checking or consumer high-yield savings. There are very few financial institutions, and particularly even the biggest banks in the United States, that in order to open up a banking account for business, you have to go into the branch and fill out the paperwork. We have done a very good job in this particular area. We have approximately 47,000 depository accounts with no traditional bankers, with zero branches, that basically are assisted by business service specialists on camera in the United States 24 hours a day, 7 days a week. We are very proud of our operating history and have really delivered robust, flexible, and financial returns both for ROAA, ROTCE, revenue growth, and our last 12 months of trailing net income.

On slide number 5, we talk about our ecosystem for the customer, where there are five solutions built around the SMB: banking, lending, insurance, payments, and payroll. All necessary and important functions for business owners that instead of dealing with us, if they do not deal with us, they are going to an ADP and Paychex. They are going to a local insurance agency. They go to a fintech for their loan and their bank for deposits. Regarding real-time payments, they just do not have it. We are very proud of the ecosystem that we have built for our customers and think it is very much of a hidden value in our organization. Historically, we have expensed the intellectual property and the IT off of our balance sheet and income statement. Slide number 6. NewtekOne's ecosystem, once again, focusing on that SMB value proposition.

It all relates to the customer, helping them grow their business and their revenues, reduce business owner risk, reduces business owner expenses, and give them one platform, the Newtek Advantage, for real-time data, which enables us to onboard them in a frictionless manner, very quickly. Give the customer a real-time view of their balances, card batches, chargebacks, ACH, Fedwires visible in the Newtek Advantage, as well as an invoicing system. As well as full analytics capturing historic transaction information, and a lot of information that exists in the Advantage including document storage and QuickBooks integration, as well as QuickBooks analytics. On slide number 7, there is a nice diagram on slide 7 which really discusses how clients approach us with a referral through the NewTracker system. You have this very big funnel. Some coming from financial institutions for referrals, trade associations, CPAs, law firms, and alliance partners.

We get these unique referrals. We do not pay for them. We do pay a success fee if we provide a solution. Some upfront in the case of lending and ongoing reoccurring income, usually on the other solutions. We are able to do this without branches, traditional bankers, or brokers. We say hundreds of alliance partners. It is actually in excess of 1,000 that we have contracts with. These referrals come in on a regular basis. When customers come to us for a loan, we do not look at the client saying, "You are applying for an SBA loan. You are applying for a commercial and industrial loan or a line of credit." We look at the customer and fit them with the best solution. If you actually go to our website, we do not advertise on the website that we are an SBA lender.

In many cases, they get an SBA loan, but we wind up giving them the best product at an attractive price and a low monthly payment to fit their needs. NewTracker is our patented engine. It is one application. It is one CRM. It gives us tremendous intake, particularly using artificial intelligence, to examine tax returns and spread financials, to examine lease agreements, to examine operating agreements, as well as using AI to go to municipalities and get liens. This is how we are able to make loans on a completed loan package within 7 days from having all the information in one particular area. We also offer real-time tracking to our alliance partners 24/7/365, as well as giving them nightly reports. Underwriting and compliance check, it is terrific. We have complete data on the interaction with the customer, whether it is a text, whether it is an email or telephonic conversation.