NewtekOne Reiterates 2026 EPS Outlook as Deposits Double

NewtekOne Inc. reported third-quarter 2026 basic and diluted earnings of $0.34 per share and reiterated its full-year EPS guidance of $1.70 to $1.80, as rapid deposit and loan growth supported higher net interest income. The digital banking and business-services company also posted continued tangible book value growth, although consolidated net income declined from a year earlier as the provision for credit losses increased.

Consolidated GAAP net income was $10.7 million for the quarter ended September 30, down from $17.9 million a year earlier and $14.6 million in the second quarter. Total income was $71.8 million, compared with $74.9 million in the prior-year period, as growth in net interest income was offset by lower non-interest income.

Net interest income rose 30% year over year and 26% sequentially to $18.9 million. It represented 26% of third-quarter revenue, up from 19% a year earlier. For the first nine months of 2026, net interest income increased 20% to $51.1 million and accounted for 23% of revenue.

The provision for credit losses increased to $15.4 million from $7.7 million a year earlier and $12.1 million in the preceding quarter. Pre-provision net revenue, a non-GAAP measure, was $29.6 million, compared with $32.8 million in the third quarter of 2025.

Deposit and loan growth

NewtekOne said Newtek Bank’s deposits had grown from $142 million to $2.6 billion over 15 quarters, with deposits more than doubling year over year for a second consecutive quarter. Non-affiliate business deposits increased 48% from a year earlier and 4% sequentially, while core consumer deposits rose 126% year over year and 13% from the second quarter.

During the quarter, non-affiliate business deposits increased by $13 million and core consumer deposits by $231 million. The bank added 711 business accounts and 5,037 core consumer accounts, ending the period with 11,646 business deposit accounts and 35,589 core consumer accounts. Its loan-to-deposit ratio was 95%, and 79% of deposits were insured.

Consolidated loans reached $2.81 billion at September 30, up from $1.93 billion a year earlier. Newtek Bank held 89% of total loans, compared with 66% in the prior-year quarter, reflecting the continued shift of lending activity toward the bank subsidiary.

Year-to-date funded loan originations totaled $1.2 billion, an increase of 12% from the comparable 2025 period. SBA 7(a) loans represented 56% of originations, while longer-amortizing commercial and industrial loans accounted for 20%. For the Small Business Administration’s fiscal year ended September 30, Newtek Bank ranked first by number of SBA 7(a) loans approved and second by approved dollar volume, according to the presentation.

Bank profitability and operating leverage

Newtek Bank generated third-quarter net income of $23.7 million, up from $12.6 million a year earlier but below the second quarter’s $27.6 million. Bank net interest income increased to $31.0 million from $18.3 million, while its net interest margin was 4.84%, compared with 4.55% sequentially and 5.40% a year earlier.

The bank’s non-GAAP efficiency ratio improved to 38.0% from 46.8% in the prior-year quarter, though it was slightly higher than 37.0% in the second quarter. Return on average assets was 3.65%, and non-GAAP return on average tangible common equity was 45.8%.

At the consolidated level, third-quarter operating expenses were nearly unchanged year over year at $42.2 million even as assets increased 47%. Year-to-date operating expenses rose 3.7%, which the company presented as evidence of operating leverage from its branchless platform.

Book value per share ended the quarter at $12.80, up 9.2% year over year. Tangible common book value per share, a non-GAAP measure, rose 9.6% to $12.30 and has increased 77.7% since NewtekOne converted to a financial holding company in January 2023.

Credit quality and capital

Credit indicators were mixed. At Newtek Bank, accruing loans at least 30 days past due, excluding government-guaranteed balances, declined to 2.76% of loans from 3.99% in the second quarter. Nonperforming loans excluding government guarantees also eased to 3.97% from 4.14%.

Including government-guaranteed balances, however, nonaccrual loans rose to 10.38% of total bank loans from 7.00% sequentially and 5.82% a year earlier. The allowance for credit losses equaled 5.18% of unguaranteed loans held for investment, with SBA 7(a) loans accounting for 89% of the bank’s allowance.

Regulatory capital ratios declined as the balance sheet expanded. Newtek Bank’s preliminary Tier 1 capital ratio was 10.6%, down from 13.0% a year earlier, while its total risk-based capital ratio fell to 11.8% from 14.3%. The leverage ratio decreased to 8.4% from 11.2%.

Management’s 2026 earnings guidance remains subject to risks including interest rates, monetary policy and prevailing economic conditions. The presentation also highlighted credit performance, rising nonaccrual balances, funding costs and declining capital ratios as important considerations as NewtekOne continues expanding its loan and deposit base.