NewtekOne, Inc. (NEWT) Stock Analysis and Metrics

Sector: Financial Services Industry: Banks - Regional CIK: 0001587987

Market Cap 380.81 Mn

P/E 5.87

P/S 1.32

Div. Yield 0.08

ROIC (Qtr) 0.00

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About

NewtekOne, Inc. is a financial holding company subject to regulation by the Federal Reserve and the Federal Reserve Bank of Atlanta, providing business and financial solutions to independent business owners under the Newtek® and NewtekOne® brands. The company operates as a technology-enabled platform delivering lending, payments, payroll, insurance, and banking services without traditional bank branches or brokers. Its core strategy centers on acquiring clients through alliance relationships and its patented NewTracker® prospect management technology,...

NewtekOne, Inc. is a financial holding company subject to regulation by the Federal Reserve and the Federal Reserve Bank of Atlanta, providing business and financial solutions to independent business owners under the Newtek® and NewtekOne® brands. The company operates as a technology-enabled platform delivering lending, payments, payroll, insurance, and banking services without traditional bank branches or brokers. Its core strategy centers on acquiring clients through alliance relationships and its patented NewTracker® prospect management technology, which processes referrals and supports end-to-end transaction transparency for partners.

NewtekOne generates revenue primarily through interest income from loan portfolios, gains on sales of guaranteed portions of SBA 7(a) loans in the secondary market, and fee-based income from its financial and business solutions. Key revenue drivers include SBA 7(a) lending via Newtek Bank, alternative lending through Newtek ALP Holdings, merchant processing via Newtek Merchant Solutions and Mobil Money, payroll and benefits services through PMTWorks Payroll, LLC, insurance brokerage via Newtek Insurance Agency, and technology-enabled services such as the Newtek Advantage® platform. The company serves independent business owners across the United States, leveraging digital channels and alliance networks to deliver solutions efficiently and at scale.

The company operates through the following segments:

• Newtek Banking: This segment encompasses Newtek Bank and its subsidiary SBL, which provide depository services, SBA 7(a) and 504 lending, commercial and industrial loans, CRE lending, and third-party loan servicing and origination. Newtek Bank offers business checking, high-yield savings, and retail CD products, and integrates its services through the Newtek Advantage® portal to deepen client relationships. The bank originated $767.8 million of SBA 7(a) loans in 2025 and $943.0 million in 2024, maintaining a diversified portfolio across 50 states and 82 industries as of December 31, 2025.

• Newtek Lending: This segment includes Newtek ALP Holdings, which originates alternative lending program (ALP) loans for independent business owners who may not qualify for SBA 7(a) financing due to eligibility, size, or maturity constraints. ALP loans are typically 10-25 year amortizing C&I loans with no balloon payments, funded through capital contributions and warehouse lines of credit, and have been sold individually or securitized via joint ventures such as Newtek Conventional Lending, LLC and Newtek-TSO II Conventional Credit Partners, LP. The segment also supports SBA 504 lending originated by Newtek ALP Holdings for major fixed asset financing.

• Newtek Payments: This segment comprises Newtek Merchant Solutions, LLC (NMS), its subsidiary Mobil Money, LLC, and POS on Cloud, LLC (d/b/a Newtek Payment Systems), which deliver credit and debit card processing, check approval, ACH services, and point-of-sale solutions. In 2025, NMS processed $5.2 billion in merchant transaction sales volume, leveraging direct and indirect sales channels, alliance partners, and proprietary technology to serve merchants in taxi cabs, restaurants, retail, assisted living, parks, and golf course industries.

• Newtek Payroll and Benefits Solutions: This segment is operated by PMTWorks Payroll, LLC (d/b/a Newtek Payroll and Benefits Solutions), which provides industry-standard payroll management, tax reporting, and payment services to independent business owners. The service enables clients to process payroll directly from the Newtek Advantage® business portal and supports deposit generation for Newtek Bank by offering sticky, business-related accounts.

• Newtek Insurance: This segment is managed by Newtek Insurance Agency, LLC (NIA), a licensed retail and wholesale brokerage in all 50 states, specializing in commercial and health/benefits lines insurance as well as personal lines for independent business owners. NIA uses automated data transfer from loan applications to issue key man life insurance without medical exams and is expanding automation for property and casualty insurance on lending opportunities.

NewtekOne holds a competitive position in the financial services industry as a technology-driven provider of integrated solutions for the underserved small business market, differentiated by its patented NewTracker® referral system and the Newtek Advantage® platform, which offers real-time analytics, transactional capabilities, and expert access via its portal. The company competes with traditional banks, non-bank lenders, and fintech providers in lending; Fiserv, Global Payments, and Worldpay in payments; and various payroll and insurance providers, but believes its alliance-based model, 24/7/365 on-camera client service, and cross-selling ecosystem create sustainable advantages. Its experience as a top SBA 7(a) lender—ranked third in the U. S. by dollar volume of approvals as of February 2026—further strengthens its market standing.

The company serves independent business owners (SMBs) across the United States, targeting privately held enterprises in diverse industries including retail, healthcare, professional services, manufacturing, and hospitality. Its client base is sourced through hundreds of alliance partners such as commercial and community banks, credit unions, trade associations, accounting firms, law firms, and small business aggregators, which refer clients via Referral Promotion or BizExec Agreements. NewtekOne maintains a database of prospects and engages them regularly through email, video, webinars, and outbound calling to nurture relationships and drive conversion.

Investment thesis

Bull case

The Q4 2025 results underscore a robust deposit expansion strategy, with 9,000 new deposit accounts and 34 million active accounts, a clear signal that the frictionless digital onboarding model is resonating with the target SMB market. This influx of deposits—both business and consumer—provides a low‑cost funding base that can support the company’s projected $1 billion in SBA originations and $500 million in long‑amortization alternative loans for 2026, thereby amplifying future earnings potential. The company’s deposit mix has shifted favorably toward business deposits, which carry a lower risk profile than consumer deposits, and the cost of deposits is expected to remain under 5.3% of net interest margin, further enhancing net interest income.
The newly launched triple‑play offering—merging merchant services, payroll, line‑of‑credit, and a core bank account—creates a self‑reinforcing ecosystem where borrowers can fund their own deposits, automatically trigger account approval, and channel loan repayments directly into the bank. This vertical integration increases customer stickiness, reduces acquisition cost, and opens an additional revenue stream from merchant fees, all of which are not fully priced into the current valuation. By eliminating a separate deposit application, the firm lowers friction and reduces the time to deposit, a critical advantage in a market where SMBs prioritize speed and convenience.
Technology remains the company’s core competitive moat, as evidenced by the patent‑protected lending operating systems and zero‑fee banking proposition that eliminates “asterisks” and “if‑s.” The absence of traditional branch infrastructure reduces overhead, and the robust data analytics enable a more precise underwriting of long‑amortization loans that align with the cash‑flow profiles of independent business owners. This capability translates into higher credit quality, as demonstrated by the drop in non‑performing loan ratios from 7.3% to 6.9% over two consecutive quarters, suggesting that the technology stack is effectively mitigating credit risk.
Securitization has emerged as a powerful catalyst, with the latest C & I loan securitization (ALP) being 10× oversubscribed and drawing interest from new institutional investors. The securitization structure is match‑funded, and the gross spread before servicing fees remains around 6.65–6.70 bps, delivering a net spread of roughly 5.65 bps—a significant margin that supports earnings even in a rising‑rate environment. Because the loans are held for sale, the company can offload credit risk while still earning a sizeable fee, effectively decoupling credit quality from earnings and providing a scalable path to growth.
The company’s return metrics are compelling: the holding company’s return on average assets (ROAA) was 2.78% in 2025, and return on tangible common equity (ROTCHE) hovered near 20%. These figures exceed the median for both community and digital banks, underscoring operational efficiency and the ability to generate consistent profits on capital. With a projected EPS range of $2.15 to $2.55 for 2026 and a midpoint of $2.35, the company is positioned to outperform peer valuation multiples, which are typically based on more modest growth expectations for SMB lenders.

The Q4 2025 results underscore a robust deposit expansion strategy, with 9,000 new deposit accounts and 34 million active accounts, a clear signal that the frictionless digital onboarding model is resonating with the target SMB market. This influx of deposits—both business and consumer—provides a low‑cost funding base that can support the company’s projected $1 billion in SBA originations and $500 million in long‑amortization alternative loans for 2026, thereby amplifying future earnings potential. The company’s deposit mix has shifted favorably toward business deposits, which carry a lower risk profile than consumer deposits, and the cost of deposits is expected to remain under 5.3% of net interest margin, further enhancing net interest income.
The newly launched triple‑play offering—merging merchant services, payroll, line‑of‑credit, and a core bank account—creates a self‑reinforcing ecosystem where borrowers can fund their own deposits, automatically trigger account approval, and channel loan repayments directly into the bank. This vertical integration increases customer stickiness, reduces acquisition cost, and opens an additional revenue stream from merchant fees, all of which are not fully priced into the current valuation. By eliminating a separate deposit application, the firm lowers friction and reduces the time to deposit, a critical advantage in a market where SMBs prioritize speed and convenience.
Technology remains the company’s core competitive moat, as evidenced by the patent‑protected lending operating systems and zero‑fee banking proposition that eliminates “asterisks” and “if‑s.” The absence of traditional branch infrastructure reduces overhead, and the robust data analytics enable a more precise underwriting of long‑amortization loans that align with the cash‑flow profiles of independent business owners. This capability translates into higher credit quality, as demonstrated by the drop in non‑performing loan ratios from 7.3% to 6.9% over two consecutive quarters, suggesting that the technology stack is effectively mitigating credit risk.
Securitization has emerged as a powerful catalyst, with the latest C & I loan securitization (ALP) being 10× oversubscribed and drawing interest from new institutional investors. The securitization structure is match‑funded, and the gross spread before servicing fees remains around 6.65–6.70 bps, delivering a net spread of roughly 5.65 bps—a significant margin that supports earnings even in a rising‑rate environment. Because the loans are held for sale, the company can offload credit risk while still earning a sizeable fee, effectively decoupling credit quality from earnings and providing a scalable path to growth.
The company’s return metrics are compelling: the holding company’s return on average assets (ROAA) was 2.78% in 2025, and return on tangible common equity (ROTCHE) hovered near 20%. These figures exceed the median for both community and digital banks, underscoring operational efficiency and the ability to generate consistent profits on capital. With a projected EPS range of $2.15 to $2.55 for 2026 and a midpoint of $2.35, the company is positioned to outperform peer valuation multiples, which are typically based on more modest growth expectations for SMB lenders.

Bear case

Regulatory scrutiny of technology‑enabled banks remains a significant and persistent threat, particularly in the wake of recent high‑profile enforcement actions targeting fintech institutions. The company operates under the dual oversight of the Federal Reserve and the OCC, and any tightening of capital or liquidity requirements could necessitate a sudden shift in growth strategy or additional capital raising, potentially diluting existing shareholders and diverting resources from product development. The complexity of operating as a bank holding company, coupled with the relatively new OCC charter, heightens the exposure to regulatory uncertainty that could impede the company’s ability to sustain aggressive expansion plans.
Deposit concentration risk is elevated, with a substantial portion of the bank’s deposits coming from the independent business owner segment, which historically exhibits higher volatility than traditional retail depositors. A sudden slowdown in the SMB sector—due to macroeconomic headwinds such as rising input costs, tightening credit conditions, or a shift in consumer spending—could precipitate deposit withdrawals, thereby raising the cost of funds and eroding net interest margins. The company’s deposit growth narrative may be underpinned by a short‑term surge that is not fully priced into the market, leaving room for future reversals that could hurt earnings.
While securitizations provide a compelling revenue stream, they also introduce exposure to liquidity risk and counterparty concentration. The company’s ALP securitization relies on a diversified pool of lenders, yet any deterioration in borrower credit quality or a significant drop in secondary market demand could impair the company’s ability to roll over or refinance outstanding securitizations. This risk is amplified by the fact that the loan book is composed of long‑amortization, higher‑interest products that may become unattractive to investors if rates rise or if the company’s credit risk profile changes, potentially forcing a loss on the securities and impacting earnings.
The company’s focus on long‑amortization loans (ten to twenty‑five years) and high‑interest rates places it in a sensitive position relative to the macroeconomic cycle. Rising rates will compress net interest margins, and the higher interest charged to borrowers could lead to increased default risk, especially among SMBs that are already operating on thin margins. Although the company’s underwriting models incorporate debt service coverage and lien analysis, the sheer volume of exposure to high‑rate loans could amplify credit losses if an economic downturn triggers a wave of defaults, as indicated by the modest uptick in non‑performing loans on the bank’s balance sheet.
The company’s underwriting and credit quality metrics have been questioned in the Q&A, particularly regarding the NSBF loss trajectory and the charge‑off rate for the bank subsidiary. While the loss on the NSBF unit declined to $20 million in 2025, the company remains exposed to a sizable portion of its loan book that has historically underperformed. The lack of transparency about the underlying quality of these loans and the reliance on proprietary risk models that have not yet been externally validated expose the company to potential surprises in future loss provisioning, which could materially depress earnings and erode capital.

Regulatory scrutiny of technology‑enabled banks remains a significant and persistent threat, particularly in the wake of recent high‑profile enforcement actions targeting fintech institutions. The company operates under the dual oversight of the Federal Reserve and the OCC, and any tightening of capital or liquidity requirements could necessitate a sudden shift in growth strategy or additional capital raising, potentially diluting existing shareholders and diverting resources from product development. The complexity of operating as a bank holding company, coupled with the relatively new OCC charter, heightens the exposure to regulatory uncertainty that could impede the company’s ability to sustain aggressive expansion plans.
Deposit concentration risk is elevated, with a substantial portion of the bank’s deposits coming from the independent business owner segment, which historically exhibits higher volatility than traditional retail depositors. A sudden slowdown in the SMB sector—due to macroeconomic headwinds such as rising input costs, tightening credit conditions, or a shift in consumer spending—could precipitate deposit withdrawals, thereby raising the cost of funds and eroding net interest margins. The company’s deposit growth narrative may be underpinned by a short‑term surge that is not fully priced into the market, leaving room for future reversals that could hurt earnings.
While securitizations provide a compelling revenue stream, they also introduce exposure to liquidity risk and counterparty concentration. The company’s ALP securitization relies on a diversified pool of lenders, yet any deterioration in borrower credit quality or a significant drop in secondary market demand could impair the company’s ability to roll over or refinance outstanding securitizations. This risk is amplified by the fact that the loan book is composed of long‑amortization, higher‑interest products that may become unattractive to investors if rates rise or if the company’s credit risk profile changes, potentially forcing a loss on the securities and impacting earnings.
The company’s focus on long‑amortization loans (ten to twenty‑five years) and high‑interest rates places it in a sensitive position relative to the macroeconomic cycle. Rising rates will compress net interest margins, and the higher interest charged to borrowers could lead to increased default risk, especially among SMBs that are already operating on thin margins. Although the company’s underwriting models incorporate debt service coverage and lien analysis, the sheer volume of exposure to high‑rate loans could amplify credit losses if an economic downturn triggers a wave of defaults, as indicated by the modest uptick in non‑performing loans on the bank’s balance sheet.
The company’s underwriting and credit quality metrics have been questioned in the Q&A, particularly regarding the NSBF loss trajectory and the charge‑off rate for the bank subsidiary. While the loss on the NSBF unit declined to $20 million in 2025, the company remains exposed to a sizable portion of its loan book that has historically underperformed. The lack of transparency about the underlying quality of these loans and the reliance on proprietary risk models that have not yet been externally validated expose the company to potential surprises in future loss provisioning, which could materially depress earnings and erode capital.

Investment, Issuer Affiliation Breakdown of Revenue (2022)

Peer comparison

Companies in the Banks - Regional

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	BCH	Bank Of Chile	90,891.20 Bn	47.15 Mn	-	0.00 Bn
2	BBD	Bank Bradesco	6,807.69 Bn	0.00 Mn	-	21.77 Bn
3	LYG	Lloyds Banking Group plc	426.28 Bn	0.00 Mn	16.65	-
4	NWG	NatWest Group plc	184.56 Bn	0.00 Mn	4.63	-
5	FCAP	First Capital Inc	181.18 Bn	0.00 Mn	25,111.90	-
6	LARK	Landmark Bancorp Inc	164.67 Bn	0.00 Mn	2,257.48	0.02 Bn
7	DB	Deutsche Bank Aktiengesellschaft	161.63 Bn	0.00 Mn	5.57	630.72 Bn
8	KB	KB Financial Group Inc.	150.02 Bn	0.00 Mn	-	8.28 Bn

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NewtekOne, Inc. (NASDAQ: NEWT)

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Investment thesis

Bull case

Bear case

Investment, Issuer Affiliation Breakdown of Revenue (2022)

Peer comparison

Research Tools

Developers

NewtekOne, Inc. (NASDAQ: NEWT)

About

Investment thesis

Bull case

Bear case

Investment, Issuer Affiliation Breakdown of Revenue (2022)

Peer comparison

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