The following is a summary of the NewtekOne, Inc. (NEWT) Q3 2024 Earnings Call Transcript:

Financial Performance:

• NewtekOne reported earnings per share of $0.45 for Q3 2024, with an adjusted EPS of $0.47 after accounting for a deferred tax liability.

• Return on average assets was noted at 2.8%, nearly three times the peer median.

• Deposits grew by 12% and loans by 17% at the bank, with a net interest margin of 5.29%.

• The loan loss reserve coverage was substantial at 500 basis points, reflecting strong risk management.

Business Progress:

• NewtekOne highlighted significant deposit and loan growth at the bank.

• The company is focusing on increasing its commercial low-cost business deposits and integrating more services into the Newtek Advantage ecosystem, enhancing value for customers.

• Continued enhancement in Payment segments, predicting an increase in pre-tax income for the coming years.

• Plans for the divestiture of the technology unit into a standalone public company, anticipated to focus on outsourced IT and cyber security solutions.

Opportunities:

• NewtekOne is actively working to capitalize on its differentiated business model and unconventional approach to financial solutions, aiming to draw in more customers with its zero-fee banking and higher interest rates on business savings.

• The company's expansion in payment processing and insurance services directly through its banking platform is set to enhance customer value and stickiness.

Risks:

• The forecasted increase in loan loss provisions points to potential higher risk exposures in their lending portfolio.

• Economic volatility and competitive pressures in the banking sector could impact the company's growth trajectory.

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