On November 6, 2024, NewtekOne Inc (NEWT, Financial) released its 8-K filing detailing its financial performance for the third quarter of 2024. The company reported earnings per share (EPS) of $0.45, exceeding the analyst estimate of $0.43. Revenue for the quarter was not explicitly stated in the filing, but the company's performance in key segments suggests robust growth.
Company Overview
NewtekOne Inc is a financial holding company that provides a range of financial solutions through its technology-driven business model. The company operates through four segments: Banking, Technology, NSBF, and Payments. Its proprietary NewTracker software enhances client interaction across various financial services.
Performance Highlights
NewtekOne Inc reported a net income of $11.9 million for the third quarter of 2024, with an EPS of $0.45, marking a 4.7% increase from the previous quarter and the same period last year. The company's net interest income rose by 20.9% from the previous quarter to $11.0 million, reflecting a significant improvement in its core banking operations.
Financial Achievements
The company's total assets increased by 21.4% to $1.7 billion as of September 30, 2024, compared to December 31, 2023. Loans held for investment grew by 13.3% to $913.0 million, indicating strong demand for NewtekOne's lending products. The net interest margin improved to 3.08%, up from 2.70% in the previous quarter, showcasing enhanced profitability in its lending activities.
Key Financial Metrics
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Interest Income | $11.0 million | $9.1 million | $8.1 million |
| Net Interest Margin | 3.08% | 2.70% | 2.60% |
| Return on Tangible Common Equity | 21.3% | 21.4% | 24.9% |
| Efficiency Ratio | 61.8% | 66.3% | 63.8% |
Analysis and Commentary
NewtekOne's performance in the third quarter highlights its ability to leverage its technology-driven model to achieve growth in deposits, loans, and its payments segment. The company's efficiency ratio improved to 61.8%, indicating better cost management and operational efficiency. However, the slight decrease in Return on Tangible Common Equity (ROTCE) to 21.3% from 24.9% a year ago suggests challenges in maintaining profitability margins.
Barry Sloane, CEO, President, and Chairman, commented, "We are extremely pleased with our third quarter 2024 financial and operational performance across the areas of total deposit growth, business deposit growth, loan growth, and growth in the electronic payment processing segment, which enabled us to achieve earnings of $0.45 per basic and diluted common share, beating the midpoint of our previously stated forecast of $0.43."
Conclusion
NewtekOne Inc's third-quarter results demonstrate its successful transition into a financial holding company, with significant growth in key financial metrics. The company's strategic focus on technology and efficiency positions it well for continued growth, although maintaining profitability margins remains a challenge. Investors and stakeholders will be keen to see how NewtekOne navigates these challenges in the coming quarters.
Explore the complete 8-K earnings release (here) from NewtekOne Inc for further details.
