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Jun 30, 2022
Newtekone Q2 2022 Earnings Report
Reported strong results meeting earnings and dividends forecasts, with record SBA 7(a) loan fundings.
Key Takeaways
Newtek Business Services Corp. reported a decrease in total investment income and net investment income compared to the same period last year, primarily due to the non-recurrence of Paycheck Protection Program (PPP) fee income. However, SBA 7(a) loan fundings increased significantly, and the company is optimistic about future growth, especially with the pending acquisition of the National Bank of New York City.
Total investment income decreased by 47.5% to $19.2 million, mainly due to the absence of PPP fee income.
Net investment income (loss) was $(2.3) million, or $(0.09) per share, a decrease of 113.0% on a per share basis.
Adjusted net investment income (ANII) was $18.1 million, or $0.75 per share, a decrease of 37.5% on a per share basis.
SBA 7(a) loan fundings reached a record $200.6 million, a 112.8% increase over the same period last year.
Newtekone
Newtekone
Forward Guidance
Newtek forecasts paying a third quarter 2022 and fourth quarter 2022 total dividend in a range of $1.00 per share to $1.50 per share, which dividends are expected to be paid by December 31, 2022, subject to Board approval, and is currently forecasting a full year 2022 dividend of between $2.40 per share and $2.90 per share. NSBF forecasts funding approximately $750 million of SBA 7(a) loans for the full year 2022, and Newtek Business Lending forecasts closing approximately $150 million SBA 504 loans for the full year 2022.
Positive Outlook
- Company forecasts paying a third quarter 2022 and fourth quarter 2022 total dividend in a range of $1.00 per share to $1.50 per share
- Dividends are expected to be paid by December 31, 2022, subject to Board approval
- Company is currently forecasting a full year 2022 dividend of between $2.40 per share and $2.90 per share.
- NSBF forecasts funding approximately $750 million of SBA 7(a) loans for the full year 2022
- Newtek Business Lending forecasts closing approximately $150 million SBA 504 loans for the full year 2022
Challenges Ahead
- The third quarter 2022 and fourth quarter 2022 total dividend is subject to Board approval
- The forecasts are forward-looking statements which involve risks and uncertainties
- The forecasts depend on the company's ability to originate new investments and maintain certain debt to asset ratios
- The forecasts are subject to intensified competition and operating problems
- The forecasts are not guarantees of future performance and actual results may differ materially