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Newtekone Q1 2025 Earnings Report
NewtekOne, Inc. reported basic and diluted EPS of $0.36 and $0.35 respectively, for the three months ended March 31, 2025, exceeding its projected range.
Key Takeaways
NewtekOne, Inc. reported solid first-quarter results with diluted EPS of $0.35, surpassing its guidance. The company demonstrated strong balance sheet growth, increased tangible book value per share, and above-average profitability, despite a heavier loan loss provision. Pre-provision net revenue also saw significant year-over-year growth.
Diluted EPS for Q1 2025 was $0.35, exceeding the projected range of $0.28-$0.32.
Tangible book value per common share increased by 23.0% year-over-year and 8.3% quarter-over-quarter to $10.17.
Pre-provision net revenue (PPNR) increased by 47.0% year-over-year to $25.2 million.
The efficiency ratio improved to 62.1% from 70.6% in the prior year quarter.
Newtekone
Newtekone
Forward Guidance
NewtekOne forecasts annual EPS in the range of $2.10 to $2.50 for 2025, implying 17% growth despite a projected near-doubling of the loan loss provision. The company also expects significant growth in loan fundings, closings, and deposits across various segments.
Positive Outlook
- Annual EPS forecast of $2.10 to $2.50, with a midpoint implying 17% growth in 2025.
- Projected $1.0 billion in total SBA 7(a) loan fundings for 2025.
- Expected $250 million in SBA 504 loan closings for 2025.
- Anticipated $500 million in ALP loan originations for 2025.
- Newtek Bank's combined C&I and CRE loan portfolios expected to grow by $225 million.
Challenges Ahead
- Projected near-doubling of the loan loss provision in 2025.
- The first quarter is historically the lowest for earnings, loan originations, and profitability.
- The NSBF subsidiary, while winding down, still incurred a loss of $5.0 million in 1Q25.
- The company's ability to meet guidance is subject to risks and uncertainties, particularly concerning interest rates, monetary policy, and economic conditions.
- Actual operating results, including EPS, may differ materially from stated guidance.