Oct 28, 2026 earnings call — Deposit growth, NII, and tech platform value
Reiterated 2026 EPS guidance of $1.70 to $1.80 and reported Q3 EPS of $0.34.
Revenue $0.1B (est $0.1B) · EPS $0.34 (est $0.45)
Key quotes
"In 15 quarters, we have grown Newtek Bank's deposits from $142 million when we took over the bank to $2.6 billion."
"Third quarter net interest income of $18.9 million is the highest quarterly net interest income that we've generated in the almost 4 years as a financial holding company."
Analyst Q&A 4
Drivers of stronger Q4 earnings
Q (Elizabeth Wainer · Raymond James): They asked what will drive the step-up in 4Q EPS given a sharp decline in gain on sale income. They also asked if softer small business confidence is cutting demand for SBA loans or hurting borrower performance and which industries look worse.
A: Management said Q4 has a seasonal lift in lending originations and that net interest income is growing, which should drive the improvement. They cited SBA loan economics (prime plus 3, about a 10% coupon vs cost of funds 3.6% or 3.65%) and said they are diversifying between selling loans and holding them. They also said they have adjusted risk models and CECL, muted origination volumes, and tightened underwriting as rates and inflation pressure older vintages.
"If you go back and look at the company's history as a bank, both and as a BDC, there clearly is a seasonal lift to Q4 particularly for lending originations, which do drive the P&L." — Barry R. Sloane (CEO·CHAIR)
Planned securitization and strategy review
Q (Emily Noelle Lee · Keefe, Bruyette, & Woods): They asked for details on the size and economics of the expected securitization in 1Q '27. They also asked what strategic alternatives are being considered to help the market recognize the firm's tech value.
A: Management said they expect a financing with about $350 million to $400 million of collateral, likely closer to $400 million, and plan to issue bonds in January. On strategic alternatives, they said they are in daily contact with strategic partners and technology providers, are open to conversations, and are opportunistic about ways to realize better value for shareholders but gave no specific transaction details.
"We're looking to hopefully do a financing with about $350 million to $400 million of collateral." — Barry R. Sloane (CEO·CHAIR)
Balance sheet, NIM, and deposit growth
Q (Christopher Nolan · Ladenburg Thalmann): They asked whether balance sheet growth will slow in 4Q ahead of the securitization and how moving 7(a) loans to the bank affected holdco NIM. They also asked about progress growing low-cost core deposits and timing.
A: Management said the January securitization will remove collateral from the balance sheet and help capital ratios, and they will manage capital one quarter at a time. They confirmed the NIM boost came from moving more 7(a) business onto the bank balance sheet and noted adjusted NIM is higher when those loans are on balance sheet. On deposits, they said growing core deposits is slower than they'd like, and they are trying to embed deposit relationships via payments, payroll, insurance, new hires, and Agentic AI to accelerate growth.
"So when we do the securitization in January, whatever is on the balance sheet will come off the balance sheet." — Barry R. Sloane (CEO·CHAIR)
Rise in C&I LA nonperformers
Q (Benjamin Graham · Piper Sandler): They asked what drove nonperformers rising to $82 million from $46 million, whether it is concentrated in any industry or borrower type, and the general credit outlook for the C&I LA book.
A: Management said the C&I LA book is just over $1 billion and the rise reflects the default curve as the portfolio seasons, with historic cumulative severity and charge-off embedded in their calculations. They said there is no specific industry concentration and the portfolio is diversified, and they expect these kinds of issues to occur as the portfolio ages.
"So I would say there's no specific industry where that might be coming from." — Barry R. Sloane (CEO·CHAIR)