NewtekOne Q1 EPS $0.43, Revenue $100M; Deposits +$173M YoY, Loans +40%
NewtekOne reported Q1 EPS of $0.43, with revenues of $100M and $71M adjusted, missing forecasts by $4M. Business deposits grew $37M QoQ and $173M YoY, loan origination units rose 40% Y/Y, and Fed approval for real-time payments was secured, while net interest margin compressed and loan yields fell.
1. Q1 Financial Results
NewtekOne reported net income of $13.4 million in Q1, translating to EPS of $0.43. Total revenue reached $100 million with adjusted revenue of $71 million, falling $4 million short of analyst estimates and matching EPS consensus.
2. Deposit and Loan Growth
Business deposits rose by $37 million quarter-over-quarter and $173 million year-over-year, reflecting strong client inflows. Loan origination units jumped 40% year-over-year after the integration of new technology platforms, with management targeting low double-digit growth in high-quality CNILA loans.
3. Real-Time Payments and Capital Ratios
The Federal Reserve approved NewtekOne for FedNow and Clearinghouse RTP, enabling immediate client payments and bolstering deposit acquisition strategies. The bank sustained a leverage ratio above 13% and a CET1 capital ratio exceeding 15.5%, underpinning continued asset expansion.
4. Margin Pressure and Outlook
Net interest margin contracted due to a shift in earning asset mix and timing of securitizations, while quarter-end loan yields dipped. Management anticipates maintaining healthy liquidity, managing leverage constraints, and focusing loan growth within the bank at low double-digit rates.