NewtekOne EPS Jumps 21 Percent in Q2

Key Points

• - GAAP earnings per share were $0.52 for Q2 2025, matching consensus expectations, while GAAP revenue of $70.2 million fell short of the $73.9 million estimate.

• - Efficiency improvements boosted profitability, with the company-wide efficiency ratio improving by 6.0 percentage points year over year (calendar year, non-GAAP).

• - SBA 7(a) loan originations declined 9.2% year-over-year, but capital and deposit growth remained robust.

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NewtekOne (NASDAQ:NEWT), a digital-first business financial solutions provider focused on small and medium-sized businesses (SMBs), released its earnings report for the quarter ended June 30, 2025, on July 28, 2025. The company reported diluted earnings per share (GAAP) of $0.52, in line with analyst forecasts. Total revenue (GAAP) came in at $70.2 million, missing consensus estimates by $3.7 million, or about 5%. Year over year, GAAP diluted earnings per share rose 21%. Revenue increased 15% year over year. Overall, the period highlighted improved profitability and cost control, though the shortfall in lending volume and revenue presents key watch areas.

Source: Analyst estimates for the quarter provided by FactSet.

About NewtekOne’s Business Model and Focus

NewtekOne (NASDAQ:NEWT) delivers business banking, payment processing, and lending solutions to independent business owners across the U.S. Its core business centers on Small Business Administration (SBA) lending, deposit gathering, and technology-driven services. The company leverages digital tools to reach customers directly and reduce costs tied to traditional brick-and-mortar banking.

In recent years, NewtekOne has shifted focus toward digital channels, developing proprietary software aimed at enhancing customer acquisition and process efficiency. Its core priorities include growing its SBA 7(a) lending program, expanding deposit bases, and scaling new technology offerings. Key success factors are cost efficiency, digital innovation, and regulatory compliance.

Quarter in Review: Financial and Operational Highlights

NewtekOne grew its diluted earnings per share (GAAP) to $0.52, 21% higher than last year, matching forecasts. Total revenue (GAAP) rose 15% year over year, but fell short of market projections. The company improved its pre-provision net revenue by more than a third, reflecting strong cost discipline and operational gains from technology investments. Its efficiency ratio, which measures how much it spends to earn a dollar of revenue, improved 6 percentage points to 60.3% (non-GAAP) compared to the prior-year period.

One of the main stories was a 9% decrease in SBA 7(a) loan originations, dropping from $226.5 million in Q2 2024 to $205.6 million. SBA 7(a) loans, partially guaranteed by the U.S. government, are key to NewtekOne’s business—generating recurring revenue and liquidity when guaranteed sections are sold to the secondary market.

Technology and process automation are now core to NewtekOne’s operations. It has rolled out platforms like NewTracker, which manages customer prospects, and Newtek Advantage, a dashboard that helps clients track business operations and access integrated services like lending, insurance, and payment solutions. These tools help the company serve more customers at lower cost, as leadership claims, operating efficiency ratio was 49%, without sacrificing the ability to gather high quality, lower cost deposits Artificial intelligence (AI) also supports loan underwriting and document review, letting NewtekOne make quicker, more accurate decisions while streamlining the customer experience.

Deposit growth remained a major achievement. Commercial deposit balances rose $50.0 million, up 19% quarter-over-quarter, while core consumer deposits climbed by $14.0 million, or 2% quarter-over-quarter. The proportion of insured deposits stood at 78%. Falling deposit costs -- down 28 basis points from the last quarter -- supported bank segment net interest margin, which rose to 5.46%. At the broader company level, net interest margin (non-GAAP) slipped from 3.04% in Q1 2025 to 2.78%. Private credit operations through the Alternative Loan Program (ALP) continued to expand, with $78.3 million in new loans and a $184 million securitization completed in April 2025. These initiatives support NewtekOne’s goal of broadening revenue streams and reducing reliance on any single business line.

Business Context and Product Overview

NewtekOne’s banking segment is built around a digital-only strategy. Unlike traditional banks with physical branches and in-person relationship managers, it relies on online platforms and automated processes for customer acquisition, account management, and support. This approach is underpinned by proprietary technology. Products include NewTracker, a digital prospect management system, and Newtek Advantage, a cloud-based business dashboard offering lending, payment processing, and insurance tools.

In lending, the SBA 7(a) program remains the flagship, providing partially guaranteed loans that NewtekOne can originate and then sell into the secondary market, often at a premium. The ALP (Alternative Loan Program) also continues to grow: this program extends credit outside the strict parameters of government-backed loans and is supported by warehouse facilities and securitization deals. The company’s merchant solutions business processes electronic payments for small businesses and is on track to generate approximately $17 million in EBITDA (non-GAAP) for 2025.

Forward Outlook and Dividend Information

Management reaffirmed its earnings per share outlook for fiscal 2025, maintaining a GAAP target range of $2.10 to $2.50. At the halfway point of the year, NewtekOne has reported $0.89 per share in basic EPS (GAAP) for the first half of 2025, in line with prior guidance. Leadership stated that return metrics, including return on average assets and return on equity, are also on pace with full-year goals. The company expects return on average tangible common equity (non-GAAP) to reach 18.7–22.0% in 2025.

For investors, monitoring trends in new loan originations, deposit growth, and efficiency metrics will be important as the year progresses. The decline in SBA 7(a) originations and the impact of nonrecurring revenue from activities like loan securitizations will warrant close attention. On July 21, 2025, NewtekOne paid a quarterly dividend of $0.19 per share, unchanged from the previous quarter.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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