NewtekOne (NEWT) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $11.9 million ($0.45 per share), up 4.7% year-over-year and sequentially, beating consensus and guidance midpoint.

• Total assets reached $1.7 billion, up 17.1%–21.4% from year-end 2023, driven by strong loan originations and deposit growth.

• Payments segment pretax income rose 32.5% year-over-year in Q3 and 43% for the nine months, with segment expansion driving results.

• Completed $75 million public offering of 8.625% senior notes due 2029 and agreed to sell the technology subsidiary.

• Board approved a 1 million share buyback authorization and paid a quarterly dividend of $0.19 per share in October 2024.

Financial highlights

• Net interest income for Q3 2024 was $11.0 million, up 20.3%–20.9% sequentially and 35.8%–36% year-over-year.

• Net interest margin for Q3 2024 was 3.08% (NewtekOne) and 5.29% (Newtek Bank), both up sequentially.

• Total deposits at the bank were $745.7 million–$746 million at September 30, 2024, up 12.4% sequentially and 43.7% year-to-date.

• Loans held for investment grew 13.3% year-to-date to $913.0 million.

• Noninterest income for Q3 2024 was $51.9 million, up from $41.0 million in Q3 2023.

Outlook and guidance

• 2024 EPS guidance reaffirmed at $1.85–$2.05; 2025 EPS forecast set at $2.00–$2.25, above consensus.

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

• Payments segment pretax income expected to reach $17.7 million in 2024 and $19.6 million in 2025.

• Projected $200 million in ALP loans by year-end 2024, enabling potential securitization in early 2025.

• NTS divestiture expected by January 2025, subject to regulatory and shareholder approvals.