NewtekOne Shifts Focus to Recurring Net Interest Income, Adjusts Earnings Guidance
Event summary
- NewtekOne updated its 2026 and 2027 EPS guidance, targeting $1.70-$1.80 for 2026 and $2.00-$2.20 for 2027.
- The company plans to hold more guaranteed portions of SBA 7(a) loans on its balance sheet, shifting from historical practices of selling them within 90 days.
- Net interest income (NII) is expected to grow faster than noninterest income, comprising 30% or more of total revenue from the second half of 2026 through 2027.
- Deposit gathering capabilities have exceeded initial expectations, driven by digital onboarding and competitive deposit products.
The big picture
NewtekOne's strategic pivot towards emphasizing net interest income over gain-on-sale income reflects a broader industry trend of financial institutions leveraging their balance sheets for more stable, recurring revenue streams. The acquisition of Newtek Bank, N.A. in 2023 has enabled the company to fund loans more cost-effectively and gather deposits digitally, positioning it to capitalize on the shift towards digital banking and competitive deposit products.
What we're watching
- NII Growth
- How the shift to holding more SBA 7(a) loans will affect the pace of NII growth and overall revenue composition.
- Deposit Strategy
- Whether NewtekOne can sustain its deposit gathering momentum and leverage it for further loan growth.
- Platform Licensing
- The potential impact of licensing NewtekOne's lending and deposit gathering platforms on future revenue streams.
Related topics