NewtekOne (NEWT)·Q4 2025 Earnings Summary

NewtekOne Posts FY25 EPS Growth of 12%, Guides 2026 to $2.35 Midpoint

January 29, 2026 · by Fintool AI Agent

NewtekOne (NASDAQ: NEWT) reported Q4 2025 results showing continued execution of its technology-enabled financial holding company strategy. While Q4 EPS of $0.65 declined 7% from the prior year period, full-year 2025 delivered strong fundamentals: EPS up 12%, total revenue up 11%, and operating leverage driving efficiency ratio improvement from 63.2% to 58.3%. The company issued 2026 EPS guidance of $2.15-$2.55, implying 6% growth at the midpoint.

Did NewtekOne Beat Earnings?

NewtekOne reported Q4 2025 diluted EPS of $0.65, compared to consensus of $0.654 (essentially in-line at -0.6%) and $0.69 in Q4 2024. What matters more is the full-year picture:

The Q4 EPS decline reflects year-over-year comparison dynamics rather than deteriorating fundamentals. Q4 2024 benefited from elevated gain-on-sale activity, while Q4 2025 showed steadier recurring revenue growth.

What Did Management Guide?

NewtekOne established 2026 EPS guidance of $2.15-$2.55, with a midpoint of $2.35. This represents approximately 6% growth versus 2025's $2.21.

Management provided quarterly guidance showing back-end weighted EPS:

The back-end weighting reflects seasonal lending patterns and continued operating leverage. The guidance was established at the company's Investor Day on January 8, 2026, preceding this earnings release.

How Did the Stock React?

NEWT shares gained approximately 4.7% on the earnings release, closing at $14.31 versus the prior close of $13.67. The stock is trading within 4% of its 52-week high of $14.91 and has rallied 57% from its 52-week low of $9.12.

The positive reaction reflects confidence in:

1. Full-year EPS growth despite Q4 YoY decline
2. 2026 guidance implying continued growth trajectory
3. Successful $295M securitization completed post-quarter

What Changed From Last Quarter?

Operating Leverage Materializing: The efficiency ratio improved to 55.2% in Q4 2025 from 55.9% in Q4 2024. For the full year, efficiency improved dramatically from 63.2% in 2024 to 58.3% in 2025. Total revenue grew 10.6% while operating expenses increased just 2.1%.

Book Value Inflection: Book value per share reached $12.19, up 15.9% YoY and 4.0% sequentially. Tangible book value per share hit $11.68, up 24.4% YoY.

Deposit Momentum Accelerating: Newtek Bank opened over 9,000 deposit accounts in Q4 2025, surpassing the prior quarterly record (set in Q4 2024) by roughly 50%. Commercial deposits grew 70% YoY while core consumer deposits grew 40% YoY.

Key Profitability Metrics

Management highlighted the 2.78% full-year ROAA as being "among the top 2% of comparably-sized bank holding companies."

Lending Activity Trends

The Alternative Loan Program (ALP) continues to gain traction with originations up 34% YoY, while SBA 7(a) volumes normalized from elevated 2024 levels.

ALP Portfolio Quality Metrics (as of 12/31/25):

• Principal balance: $694M outstanding (includes off-balance sheet loans in JV and securitizations)
• Weighted Average FICO Score: 731
• Weighted Average LTV at origination: 48%
• Weighted Average DSCR: 3.3x
• Weighted Average Coupon: 13.29%

Non-Bank Subsidiaries Performance

NewtekOne's non-lending business lines continue to grow and contribute cross-sell opportunities:

Notably, 25% of Newtek Bank business lending clients have purchased life insurance through Newtek Insurance Agency since the cross-sell initiative launched in February 2024. Management is launching "Triple Play by Newtek" soon—bundling merchant/payroll + line of credit + bank account.

What Did Management Say?

CEO Barry Sloane emphasized the transformation story entering its fourth year:

"We are pleased to report basic and diluted EPS of $2.21 and $2.18 for 2025... Our operating model, designed to produce healthy balance sheet growth and profitability and to capture operating leverage, is working as planned. Growth in loans, deposits, and assets for 2025 approximated 53%, 46%, and 33%, respectively."

On the recent securitization momentum:

"Last week, we closed a $295 million ALP securitization that was... ten times oversubscribed and distributed across 32 buyers, including ten first-time buyers of our securitization notes."

On franchise value creation:

"We believe we have created meaningful franchise value in transforming a single-branch sixty year old bank in Flushing, New York, with an antiquated operating model into a branchless, bankerless digital bank."

Post-Quarter Developments

$295M Securitization Closes: On January 21, 2026, NewtekOne closed its fourth ALP securitization and 17th overall rated securitization. The deal was 10x oversubscribed with 32 institutional buyers participating.

Capital Return: The company repurchased 126,595 shares in Q4 2025 at a weighted average cost of $10.43/share. A quarterly dividend of $0.19/share was paid January 2, 2026.

Balance Sheet Snapshot

Valuation Versus Peers

NewtekOne trades at a significant discount to fintech-enabled bank peers on multiple metrics:

Management specifically named SoFi, Live Oak, Triumph, Northeast Bank, and Axos as comparable disruptors, noting that each required 3-6 years of operating history before the market recognized their franchise value.

"Axos, almost 5 years... before the stock started to move. Now it trades 11x consensus and 207% of book value. Live Oak Bank, 5 years before the stock started to move... I hope this doesn't take 6 years."

Forward Catalysts

1. 2026 Guidance Execution: Midpoint implies 6% EPS growth; management has guided conservatively historically
2. ALP Program Scale: Growing recurring interest income base from $363M of 2025 originations
3. Deposit Franchise Build-Out: 50% of lending clients now have deposit accounts; cross-sell opportunities persist
4. Securitization Access: Consistent access to capital markets at attractive terms enables growth funding
5. Operating Leverage: Efficiency ratio improvement trajectory has room to continue

Credit Quality Update

Credit metrics showed improvement in Q4, with NPLs (excluding government-guaranteed loans) declining for two consecutive quarters:

At Newtek Bank, credit quality metrics are stabilizing:

The legacy NSBF portfolio (non-bank subsidiary in wind-down) continues to shrink, with losses declining from $28.7M in 2024 to $20.0M in 2025. Management expects NSBF losses will continue to decline throughout 2026.

Q&A Highlights

On Deposit Growth Acceleration (Tim Switzer, KBW)

Asked about the 50% increase in deposit account openings, CEO Barry Sloane attributed it to frictionless digital access and competitive rates:

"We're able to offer a generous rate and no fees, no asterisk, no way... Those people aren't going anywhere. So our portfolio can afford to pay that deposit base. I think that's a more stable deposit than one that is at zero."

The bank's NIM sits at 5.25%, enabling attractive deposit rates while maintaining profitability.

On SBA Lending Environment

Sloane discussed several recent SBA regulatory changes creating disruption:

• Citizenship requirements proving "dramatic" for some applicants
• Inability to refinance MCA products creating friction
• SBA eliminating SBSS scoring—requiring lenders to use their own methodology
• New debt service coverage forecasting requirements

"Most of the competitors in the fintech space, these are technology companies that are not credit. They've got to change their whole front-end intake. We don't."

On Business Confidence (Steve Moss, Raymond James)

"It is absolutely 100% K-shaped economy, haves and have-nots. And businesses servicing the lower end of the market, as a customer, they're struggling. And businesses that are serving the middle market or the upper end are doing well."

On EPS Growth Leverage (Christopher Nolan, Ladenburg Thalmann)

Sloane identified two key growth levers for 2026:

1. Lower Deposit Costs: Growing business deposits from payroll and merchant services to reduce funding costs
2. ALP Loan Scale: Average ALP loan is $4.5M-$5M versus $400K for SBA 7(a)—easier to build volume

Management also disclosed that borrowers are now required to make loan payments from a Newtek deposit account, with business checking at 1%—creating sticky, low-cost deposits.

On Credit Performance (Dylan Hines, B. Riley)

"If you go to SBA.gov, what you'll basically see is that our 5-year and 10-year charge-off rates are about industry average."

Bank-level charge-offs were $8.2M for Q4 and $23M for full-year 2025.

Key Risks

1. Credit Quality: While improving, NPL ratios remain elevated; ACL increased to $45.2M from $30.2M YoY
2. SBA Volume Sensitivity: SBA 7(a) originations down 19% YoY; regulatory changes impacting fintech competitors more than Newtek
3. Interest Rate Sensitivity: Net interest margin pressures from rate environment
4. Execution Risk: Transformation to digital bank model still in progress
5. Economic Bifurcation: K-shaped economy creating headwinds for borrowers serving lower-income consumers

---

NewtekOne hosted its Q4 2025 earnings call on January 29, 2026 at 4:30 PM ET.