NewtekOne Caps Third Year as a Bank with Strong Deposit Growth, Eyes Credit Improvement
NewtekOne, Inc. (NASDAQ: NEWT) marked a milestone in its fourth-quarter 2025 earnings report, celebrating three years operating under a national bank charter while charting a course for improved credit performance. The financial technology company, which acquired the National Bank of New York City in early 2023, is leveraging its hybrid model to attract small business clients with digital tools and bundled services.
"We are not just a lender; we are a financial partner for the independent business owner," stated President and CEO Barry Sloane. He emphasized the success of "frictionless" digital account opening and the company's suite of "no-fee" deposit products. A cornerstone of their strategy is the "Alternative Loan Program" (ALP)—long-amortizing commercial loans designed for sale to institutional investors—which recently saw a securitization oversubscribed by ten times.
The numbers underscore a year of transition. For full-year 2025, Newtek reported diluted earnings per share of $2.18, an 11% increase year-over-year. Total revenue reached $284 million, up 10.6%. Perhaps more telling is the deposit story: the company added 9,000 new depository accounts in Q4 alone, ending the year with 34,000 active accounts. Business deposits grew by $164 million for the year, while consumer deposits surged by $293 million.
CFO Frank DeMaria reiterated 2026 diluted EPS guidance of $2.15 to $2.55. The outlook assumes a gradual improvement in credit trends as a stressed portfolio from its legacy non-bank SBA lending subsidiary, Newtek Small Business Finance (NSBF), continues to wind down. Sloane noted that NSBF's losses declined to $20 million in 2025 from $28.7 million the prior year, and its share of the balance sheet has shrunk from 32% to 13%.
"The bank charter has been transformative," Sloane added, pointing to tangible book value per share growth to $12.19 from $6.92 since the conversion. He also highlighted that roughly half of their business lending clients have now opened a deposit account, deepening customer relationships.
Analyst & Investor Reactions
Michael Thorne, Portfolio Manager at Sterling Capital: "Newtek is executing a complex pivot in real time. The deposit growth is impressive and lowers their funding cost. The successful ALP securitization validates their model with institutional buyers, which is crucial for scaling."
Rebecca Shaw, Independent Financial Analyst: "While the headline numbers are solid, I'm watching the credit metrics closely. The decline in non-performing loans is a good start, but the NSBF runoff needs to continue smoothly. Their 2026 guidance hinges on that."
David Keller, host of 'The Skeptical Investor' podcast: "This is a classic 'spread the good news, downplay the risk' earnings call. They're touting deposit growth but what about the cost? A 74% insured deposit rate isn't bulletproof. And calling a 6.9% NPL ratio 'improving' is spin. This company is still wrestling with the ghosts of its old SBA book while trying to convince us it's a tech bank."
Anita Lopez, Small Business Owner in Phoenix: "As a customer, the digital application was seamless. Having my loan and deposit account linked saves time. The rates were competitive, but what sold me was the single point of contact. For a small business owner, that efficiency matters more than a few basis points."
As Newtek enters 2026, the challenge remains balancing its legacy as a non-bank SBA powerhouse with its ambition to be a technology-enabled, full-service banking partner for Main Street. The market will be watching to see if the improving credit trends management anticipates materialize as forecast.