NewtekOne, Inc. (NEWT) - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. NewtekOne, Inc. 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 (Newtek Bank), Alternative Lending (NALH), NSBF (legacy SBA portfolio), and Payments. A significant operational shift occurred in Q1 2026, with the company transitioning the origination of C&I Long Amortizing (LA) loans (formerly ALP loans) from its non-bank subsidiary to Newtek Bank.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Net Income | $13.4 million | $9.4 million | +43.1% |
| Diluted EPS | $0.43 | $0.35 | +22.9% |
| Total Assets | $2.89 billion | $2.14 billion (Dec 31, 2025) | +5.2% (QoQ) |
| Net Interest Income | $17.2 million | $13.9 million | +23.6% |
| Provision for Credit Losses | $9.6 million | $13.5 million | -29.0% |
| Total Deposits | $1.86 billion | $1.42 billion (Dec 31, 2025) | +31.0% (QoQ) |
| Total Borrowings | $550.5 million | $819.9 million (Dec 31, 2025) | -32.9% (QoQ) |
| Cash & Equivalents | $403.0 million | $310.3 million (Dec 31, 2025) | +29.9% (QoQ) |
Material Changes vs. Prior Period
- Profitability Surge: Net income increased significantly to $13.4 million, driven by a $7.2 million improvement in net interest income after provision and a $13.7 million increase in net gains on sales of loans.
- Securitization Impact: The company recorded a $56.1 million net gain on residuals in securitizations, a new line item compared to Q1 2025. This resulted from the NALP Business Loan Trust 2026-1 transaction closed in January 2026, which involved selling $341.8 million of ALP loans.
- Loan Portfolio Shift: Loans held for sale (at fair value) decreased by $202.6 million quarter-over-quarter, primarily due to the transfer of $394.9 million of ALP loans into the 2026-1 securitization trust. Conversely, loans held for investment (at amortized cost) increased by $91.6 million due to new originations at Newtek Bank.
- Debt Reduction: Total borrowings decreased by $269.4 million compared to year-end 2025. This was driven by the maturity of $95.0 million in 2026 Notes and the full repayment/termination of the SPV I Capital One Facility ($16.1 million) and significant paydowns on SPV II and III facilities.
- Deposit Growth: Total deposits grew by $439.5 million quarter-over-quarter, fueled by competitive interest rates and the "Newtek Advantage" platform.
Guidance, Outlook, and Risks
- Operational Transition: The company has ceased originating ALP loans through its non-bank subsidiary NALH as of December 31, 2025. All C&I LA loan origination has moved to Newtek Bank, shifting revenue recognition from the Alternative Lending segment to the Banking segment.
- Capital Markets Activity: In Q1 2026, the company issued $15.0 million of 2033 Notes and exchanged $7.9 million of 2026 Notes for new 2031 Notes. A new Debt ATM program was established in March 2026 to sell up to $50.0 million of notes and preferred stock.
- Regulatory Risks: The filing highlights risks related to the potential loss of Preferred Lenders Program (PLP) status for Newtek Bank and the impact of a federal government shutdown on SBA 7(a) and 504 programs, which could freeze lending operations.
- Market Risks: The company remains asset-sensitive regarding interest rate risk. Rising rates are expected to increase net interest income, while falling rates could compress margins. Secondary market pricing for SBA loans remains a critical variable for non-interest income.
Investor Verification Checklist
- Securitization Accounting: Verify the sustainability of the $56.1 million gain on residuals in securitizations, as this is a non-recurring event tied to the specific 2026-1 Trust closing.
- Loan Migration: Confirm the successful transition of ALP/C&I LA origination to Newtek Bank and monitor the impact on the Banking segment's yield and expense ratios.
- Deposit Stability: Assess the cost of the $439.5 million deposit increase and whether the higher interest expense on deposits will continue to compress net interest margins.
- Debt Maturity Wall: Review the repayment schedule for remaining secured borrowings (SPV II and III facilities) and the impact of the new 2033 Notes on future interest obligations.
- SBA Program Status: Monitor regulatory updates regarding the SBA 7(a) program funding and PLP status, as these are existential risks to the core lending business.