NewtekOne Inc (NEWT) Reports Solid Earnings Amidst Banking Sector Challenges
Net Income: $43.0 million, or $1.71 per basic share and $1.70 per diluted share for the full year 2023.
Net Interest Income: Increased to $26.6 million for the full year 2023.
Total Assets: Remained consistent at $1.4 billion as of December 31, 2023.
Deposits Growth: Total deposits surged to $463.5 million, a 227.3% increase year-over-year.
SBA Lending: SBA 7(a) loan fundings reached $815.0 million for 2023, with a forecast of $925.0 million for 2024.
Efficiency Ratio: Improved to 61.2% for Q4 2023, indicating increased operational efficiency.
Dividends: Paid a quarterly cash dividend of $0.18 per share on January 12, 2024.
On March 5, 2024, NewtekOne Inc (NASDAQ:NEWT) released its 8-K filing, detailing the financial and operating results for the fourth quarter and the full year ended December 31, 2023. As a financial holding company, NewtekOne has successfully navigated the complexities of the banking sector, leveraging its patented NewTracker system and the Newtek Advantage platform to drive growth and efficiency.
Company Overview
NewtekOne Inc is a financial holding company that offers a comprehensive suite of business and financial solutions to small and medium-sized businesses across the United States. With a focus on technology and innovation, NewtekOne has established a unique position in the market, providing clients with a single online dashboard to manage a variety of services, including banking, lending, payments, and insurance.
Financial Performance and Challenges
The company reported a net income of $43.0 million for the full year 2023, with basic and diluted earnings per share (EPS) of $1.71 and $1.70, respectively. This performance aligns with the previously issued guidance and demonstrates the company's ability to achieve controlled growth despite the broader challenges faced by the banking sector. NewtekOne's non-interest-bearing revenue model has proven to be a valuable asset in the current economic environment.
Key Financial Metrics
Key financial metrics such as return on average assets (ROAA) and return on tangible common equity (ROTCE) stood at 3.2% and 22.7%, respectively, for the full year 2023. These metrics are indicative of the company's profitability and capital efficiency. The efficiency ratio, a measure of the company's operational efficiency, improved to 61.2% for the fourth quarter of 2023, down from 63.8% in the previous quarter.
Commentary from Management
"We are pleased to report our first full year as a financial holding company owning Newtek Bank, a nationally chartered bank. We achieved basic earnings per share (EPS) of $1.71 and diluted EPS of $1.70, in line with our previously issued annual earnings guidance of $1.60 to $1.80 per basic and diluted common share. For 2024, we are currently forecasting annual EPS in a range of $1.80 to $2.00 per basic and diluted common share, which would represent an approximate 11% increase from 2023 EPS to the midpoint of the 2024 forecasted range." - Barry Sloane, CEO, President, and Chairman
Looking Ahead
NewtekOne is forecasting EPS for the full year 2024 to be in the range of $1.80 to $2.00 per basic and diluted common share, representing a 13.1% increase from the full year 2023 EPS of $1.70 at the midpoint of the forecasted range. The company's strategic focus on technology and a diversified income stream positions it well for continued growth and resilience in the dynamic banking industry.
For a detailed analysis of NewtekOne Inc's financial results and future outlook, investors and interested parties are encouraged to review the full 8-K filing and join the upcoming conference call.
Explore the complete 8-K earnings release (here) from NewtekOne Inc for further details.
This article first appeared on GuruFocus.
