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Sep 30, 2021
Newtekone Q3 2021 Earnings Report
Announced third quarter 2021 financial results, demonstrating growth in core lending products and reconfirming full year 2021 earnings guidance.
Key Takeaways
Newtek Business Services Corp. reported its Q3 2021 financial results, highlighting growth in core lending operations and a robust pipeline of opportunities. The company reconfirmed its full-year 2021 earnings guidance.
Total investment income decreased by 16.7% to $12.4 million for the three months ended September 30, 2021, compared to the same period in 2020.
Net investment income/(loss) was $(6.7) million, or $(0.30) per share, for the three months ended September 30, 2021, a decrease of $(0.38) per share compared to the prior year.
Adjusted net investment income (ANII) increased by 1300.0% on a per share basis to $12.6 million, or $0.56 per share, for the three months ended September 30, 2021.
Newtek Small Business Finance, LLC funded $163.9 million of SBA 7(a) loans during the three months ended September 30, 2021, a 1160.8% increase over the same period in 2020.
Forward Guidance
Newtek reconfirmed its forecasted 2021 full year 2021 NII of $0.80 per share and ANII of $3.40 per share.
Positive Outlook
- The Company believes it is emerging from the pandemic with momentum from its core lending operations.
- Technological efficiencies in lending are contributing to the positive outlook.
- A robust pipeline of opportunities is being generated by the NewTracker(R) referral system.
- The Company anticipates growth and higher-trending results in 2022.
- The level of SBA 7(a) loan fundings demonstrates strong momentum going forward.
Challenges Ahead
- Non-conforming conventional loan program has experienced a slow start.
- Year-over-year comparisons of loan origination volumes of 2021 to 2020 are not as meaningful due to the pandemic effects.
- The Company will address its options to refinance more expensive debt and lower our cost of capital.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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