Dillion Hines

Dillion Hines asked about the weighted average yield for originations during the quarter and the company's strategy regarding Equity ATM issuances.

Answer

Josh Weinstein, Chief Investment Officer, stated that the weighted average yield for new originations in the quarter was approximately 10.50%, based on a 6.5% spread, 3x leverage, and 36% loan-to-value. Regarding ATM issuances, he noted a historical range of $30 million to $50 million per quarter, which fluctuates based on deal flow, repayments, and liquidity needs. He indicated that a similar range could be expected for the coming quarter, given the favorable premium.

Dillion Hines inquired about the weighted average yield for originations during the quarter and the company's expectations for continued ATM issuances.

Answer

Josh Weinstein, Chief Investment Officer, stated that the weighted average yield for new originations in the quarter was approximately 10.50%. He confirmed that ATM issuances are expected to continue at a rate of $30 million to $50 million per quarter, depending on deal flow, repayments, and liquidity needs, given the favorable premium at which the stock is trading.

Dillion Hines sought Newtek's perspective on the performance of its SBA loans relative to other lenders in the sector, particularly those lacking Newtek's comprehensive underwriting and business services.

Answer

President and CEO Barry Sloane stated that Newtek's 5-year and 10-year SBA loan charge-off rates are consistent with the industry average. He emphasized that Newtek's margins, including ROAA, ROTCE, and gain on sale, typically surpass competitors due to their ability to secure full-margin loans by prioritizing customer relationships and service.

Dillion Hines asked for Newtek's perspective on how its SBA loans are performing compared to other lenders in the SBA sector, particularly those without Newtek's comprehensive underwriting and business services offerings.

Answer

President and CEO Barry Sloane stated that Newtek's 5-year and 10-year SBA charge-off rates are approximately at the industry average, fulfilling their mission to serve business owners. He emphasized that Newtek's margins typically 'dwarf' those of some larger competitors in the space, highlighting the ability to achieve full margin loans by treating customers well and providing a comprehensive product.