NewtekOne (NEWT) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $10.9 million ($0.43 per share), up 59% year-over-year and 13.2% sequentially, with total assets reaching $1.62 billion, up over 13% since year-end 2023.

• Q2 2024 EPS of $0.43 beat consensus and prior year, with net interest income up 59.6% year-over-year to $9.1 million.

• Reaffirmed full-year 2024 EPS guidance of $1.85–$2.05 per share, maintaining confidence despite market volatility.

• Achieved strong sequential deposit growth of 17% and loan growth of 13% at Newtek Bank, outperforming industry averages.

• Completed a $71.9 million public offering of 8.50% fixed rate senior notes due 2029 and closed a $154.3 million ALP loan securitization in July 2024.

Financial highlights

• Net interest margin at Newtek Bank was 4.83% for Q2 2024, up from 3.18% in Q2 2023; holding company NIM was 2.70%.

• Net income for the first half of 2024 was $20.6 million ($0.81 per share), up 84.1% over adjusted prior-year EPS.

• Noninterest income for Q2 2024 was $52.0 million, up 17.5% year-over-year, driven by loan sales and payment processing.

• Efficiency ratio at Newtek Bank improved to 42.3%; at holding company level, it was 66.3%.

• Q2 2024 dividend of $0.19 per share paid July 19, 2024, with a current yield of 5.8%.

Outlook and guidance

• Full-year 2024 EPS guidance reaffirmed at $1.85–$2.05 per share, with a midpoint of $1.95.

• SBA 7(a) loan fundings forecasted at $935 million for 2024, a 14.7% increase over 2023.

• Year-end 2024 projections: HFI loans $1.1 billion, total deposits $755 million, net interest margin 3.00–3.25%.

• Expects commercial depository accounts to reach $200–$250 million by year-end 2024.

• Loan production expectations trimmed for the rest of the year, but guidance maintained due to strength in non-interest income.