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Mar 31, 2022
Newtekone Q1 2022 Earnings Report
Announced first quarter 2022 financial results, with SBA 7(a) loan fundings increasing by 56.5%.
Key Takeaways
Newtek Business Services Corp. reported its Q1 2022 financial results, noting a decrease in total investment income by 41.4% compared to Q1 2021, which included non-recurring PPP fee income. However, the company saw a 56.5% increase in SBA 7(a) loan fundings and declared a second quarter dividend of $0.752 per share, a 7.1% increase over Q2 2021.
Total investment income decreased by 41.4% to $20.3 million due to the absence of Paycheck Protection Program (PPP) fee income.
Net investment income decreased by 94.1% on a per share basis to $1.0 million, or $0.04 per share.
Adjusted net investment income (ANII) decreased by 31.4% on a per share basis to $17.3 million, or $0.72 per share.
SBA 7(a) loan fundings increased by 56.5% to $163.3 million.
Newtekone
Newtekone
Forward Guidance
Newtek forecasts funding approximately $750 million of SBA 7(a) loans and closing approximately $150 million SBA 504 loans for the full year 2022.
Positive Outlook
- NSBF forecasts funding approximately $750 million of SBA 7(a) loans for the full year 2022, which represents a 33.8% increase over $560.6 million of SBA 7(a) loans funded in 2021.
- NBL forecasts closing approximately $150 million SBA 504 loans for the full year 2022, which would represent a 66.5% increase over $90.1 million of SBA 504 closings in 2021.
- The Company has paid and declared dividends totaling $1.40 per share for the first and second quarters of 2022, which represents a 16.7% increase over dividends paid in the first and second quarters of 2021.
- Newtek's joint venture, Newtek Conventional Lending LLC (“NCL”), closed a conventional commercial loan securitization with the sale of $56.3 million of Class A Notes
- NewTracker® enables the company to remotely originate all business opportunities beyond lending through strategic alliance partnerships without the traditional use of branches, brokers, business development officers, and frequent salesforce contact
Challenges Ahead
- The pandemic influenced business results in 2020 and 2021, and Newtek's goal in 2022 is to replace approximately $50 million in PPP fee income earned in 2021.
- Net asset value (“NAV”) of $398.5 million, or $16.49 per share, at March 31, 2022; a decrease of (1.4)% on a per share basis, compared to NAV of $16.72 per share at December 31, 2021.
- Total investment income of $20.3 million for the three months ended March 31, 2022; a decrease of (41.4)% over total investment income of $34.7 million for the three months ended March 31, 2021.
- Net investment income of $1.0 million, or $0.04 per share, for the three months ended March 31, 2022, which represents a (94.1)% decrease, on a per share basis, compared to net investment income of $15.2 million, or $0.68 per share, for the three months ended March 31, 2021.
- Adjusted net investment income ("ANII") of $17.3 million, or $0.72 per share, for the three months ended March 31, 2022; a decrease of (31.4)%, on a per share basis, compared to ANII of $23.5 million, or $1.05 per share, for the three months ended March 31, 2021.