NewtekOne (NEWT) Q2 2024 earnings summary

Executive summary

• Q2 2024 EPS was $0.43, up 13.2% sequentially and 59.3% year-over-year, with net income of $10.9 million and revenue of $60.6 million.

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

• Total assets grew to $1.62 billion, up 14.3% since year-end 2023, driven by strong loan originations and deposit growth.

• 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.

• Continued focus on technology-driven business model, emphasizing non-interest income and digital banking solutions.

Financial highlights

• Net interest income for Q2 2024 was $9.1 million, up 2.2% sequentially and 59.6% year-over-year.

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

• Efficiency ratio improved to 42.3% at Newtek Bank and 66.3% at NewtekOne in Q2 2024.

• Q2 2024 EPS increased to $0.43 from $0.27 in Q2 2023, and six-month 2024 EPS was $0.81, up from $0.44 (excluding tax benefit) in the prior year period.

• Deposits rose to $663.7 million, up 27.9% since year-end 2023.

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.

• Loan production expectations trimmed for H2 2024, but non-interest income, especially from ALP and merchant services, expected to offset.

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

• Assumes one 25 basis point rate cut in 2024; expects 11% premiums on SBA 7(a) loans for the next two quarters.