NewtekOne, Inc. 2026 Q2 10-Q Filing Summary
Business Context and Reporting Period
NewtekOne, Inc. (NEWT) is a financial holding company and a leading provider of business and financial solutions to small and medium-sized businesses (SMBs). The company operates through four primary segments: Banking, Alternative Lending, NSBF (legacy portfolio), and Payments. This report covers the quarterly period ended June 30, 2026, and the six months ended June 30, 2026. The company is transitioning its lending model from capital-market funded origination to a deposit-funded model centered at its subsidiary, Newtek Bank.
Key Financial Metrics (Six Months Ended June 30, 2026)
- Net Income: $28.0 million ($0.90 diluted EPS), up 21.4% from $23.1 million in the prior year period.
- Total Assets: $3.18 billion, an increase of $440.1 million (16.0%) from December 31, 2025.
- Net Interest Income: $32.2 million, up $4.3 million year-over-year.
- Noninterest Income: $113.8 million, driven by a $58.2 million gain on residuals in securitizations.
- Provision for Credit Losses: $21.7 million, a decrease of $0.9 million from the prior year.
- Deposits: Total deposits reached $2.15 billion, a $731.1 million increase from year-end 2025.
- Borrowings: Total borrowings decreased to $554.2 million from $819.9 million at year-end 2025.
- Liquidity: Total liquidity sources increased to $471.0 million.
- Capital Ratios: The Company maintained a Total Capital ratio of 22.0%, exceeding "well-capitalized" regulatory minimums.
Material Changes vs. Prior Period
- Loan Portfolio Reclassification: Loans held for sale (at fair value) decreased by $471.1 million, primarily due to the reclassification of $442.6 million of SBA 7(a) loans to loans held for investment following an agreement with the SBA regarding Newtek Bank's participation in the secondary market.
- Securitization Activity: The company closed the NALP Business Loan Trust 2026-1 securitization in January 2026, backed by $341.8 million of collateral. This resulted in a significant gain on residuals in securitizations ($58.2 million for the six months) but also a reversal of previously recorded gains on loans under the fair value option ($28.9 million loss).
- Debt Reduction: Borrowings declined significantly due to the full repayment and termination of the SPV I Capital One Facility ($16.1 million) and SPV II Deutsche Bank Facility ($169.1 million), as well as the maturity of the 2026 Notes ($87.1 million).
- Segment Performance: The Banking segment net income grew to $47.8 million (up 161.2% YoY), while the Alternative Lending segment net income declined to $9.1 million (down 76.2% YoY) as loan originations shifted to the Bank.
Guidance, Outlook, and Risks
- Strategic Shift: Management intends to rely less on gains from loan sales and more on interest income as the business model matures into a deposit-funded bank. Newtek Bank began originating C&I LA loans in Q1 2026.
- Subsequent Event: On August 6, 2026, Newtek Bank agreed to repurchase guaranteed portions of certain SBA 7(a) loans from the SBA, with an initial repurchase of $118 million expected in Q3 2026.
- Risks: Key risks include the impact of interest rate fluctuations on net interest margin, the availability of secondary market purchasers for SBA loans, and potential changes to SBA program rules. The company notes that forward-looking statements are subject to uncertainties regarding economic conditions and regulatory changes.
- Dividends: The company declared dividends of $0.19 per share on common stock and $21.25 per share on Series B Preferred Stock for the quarter.
Investor Verification Checklist
- Verify the impact of the $118 million SBA loan repurchase agreement (announced August 6, 2026) on future liquidity and balance sheet composition.
- Monitor the sustainability of noninterest income, specifically the volatility of gains/losses on residuals in securitizations and loans under the fair value option.
- Assess the trend in the Provision for Credit Losses relative to the growing loan portfolio and the seasoning of the SBA 7(a) portfolio.
- Review the cost of deposits versus the cost of borrowings to evaluate the success of the transition to a deposit-funded model.
- Confirm the status of the wind-down of the NSBF legacy portfolio and its impact on future earnings.