NewtekOne Inc (NEWT, Financial) released its financial and operating results for the first quarter of 2024 on May 6, 2024, as detailed in its 8-K filing. The company reported a net income of $9.7 million, translating to earnings per share (EPS) of $0.38, which notably surpasses the analyst's estimated EPS of $0.25 for the quarter. This performance indicates a robust start to the year, prompting the company to raise its full-year EPS forecast to $1.85 - $2.05 from the previously projected range of $1.80 - $2.00.
Company Overview
NewtekOne Inc is a dynamic financial holding company that offers a broad spectrum of financial and business solutions. Leveraging its patented technology, NewTracker, the company provides a streamlined and cost-effective service model across its four reportable segments: Banking, Technology, NSBF, and Payments. This model facilitates a seamless interaction between clients and NewtekOne's experts, enhancing the overall efficiency and effectiveness of the services provided.
Financial Highlights and Operational Achievements
The first quarter of 2024 saw NewtekOne achieving significant growth in several key areas. Net interest income rose to $8.9 million, marking a 93.5% increase from the same period in the previous year. Total assets grew by 7.1% to $1.5 billion, and loans held for investment increased by 4.3% to $840.6 million. Additionally, the company's strategic focus on expanding its loan portfolio is evident from the $207.1 million in SBA 7(a) loan closings, representing a 35.9% increase year-over-year.
Challenges and Strategic Adjustments
Despite the positive outcomes, NewtekOne faced challenges such as a decrease in cash and cash equivalents by 11.3% and a decline in Return on Tangible Common Equity (ROTCE) and Return on Average Assets (ROAA). These metrics, crucial for assessing the company's profitability and asset efficiency, showed a downtrend from the previous quarter. However, the management remains confident in their strategic measures and reserve allocations to navigate the current economic conditions effectively.
Management's Perspective
"We are more than pleased to report our first quarter 2024 financial results. We broke several records this quarter and continue to perform exceptionally well as a financial holding company," stated Barry Sloane, Chairman, President, and CEO of NewtekOne. He further highlighted the transformative shift from a BDC to a financial holding company, emphasizing the improved EPS and robust loan funding activities.
Future Outlook and Dividend Announcement
Encouraged by the strong quarterly performance, NewtekOne's board declared a quarterly dividend of $0.19 per share, up 5.5% from the previous quarter. The company's revised earnings guidance and dividend increase reflect its confidence in sustained growth and profitability.
Conclusion
NewtekOne's first quarter of 2024 illustrates a company that is not only growing in terms of financial metrics but also adapting strategically to maintain its market position. By surpassing EPS estimates and raising future earnings guidance, NewtekOne continues to demonstrate its resilience and commitment to delivering value to its shareholders.
For a deeper dive into NewtekOne's detailed financial results and future strategies, stakeholders and interested investors are encouraged to join the upcoming earnings call or visit the Investor Relations section on NewtekOne's website.
Explore the complete 8-K earnings release (here) from NewtekOne Inc for further details.
