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NewtekOne
NEWT
#7898
Rank
S$0.41 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
S$14.20
Share price
1.10%
Change (1 day)
-8.50%
Change (1 year)
๐Ÿ’ฐ Investment
Categories
  1. NewtekOne
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2025 Q3

NewtekOne - 10-Q quarterly report FY2025 Q3


Text size:
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
    
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to_____
Commission file number: 814-01035
NEWTEKONE, INC.
(Exact name of registrant as specified in its charter)
 
Maryland46-3755188
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
4800 T Rex Avenue, Suite 120, Boca Raton, Florida
33431
(Address of principal executive offices)(Zip Code)
(212) 356-9500
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.02 per shareNEWTNasdaq Global Market LLC
5.50% Notes due 2026NEWTZNasdaq Global Market LLC
8.00% Notes due 2028
NEWTI
Nasdaq Global Market LLC
8.50% Notes due 2029NEWTGNasdaq Global Market LLC
8.625% Notes due 2029
NEWTH
Nasdaq Global Market LLC
Depositary Shares, each representing a 1/40th interest in a share of 8.500% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series BNEWTPNasdaq Global Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated Filerx
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial or accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No x
As of November 6, 2025, there were 28,887,295 shares outstanding of the registrant’s Common Stock, par value $0.02 per share.



TABLE OF CONTENTS
 
 Page
4
PART I - FINANCIAL INFORMATION
Item 1.
7
9
8
13
15
18
Item 2.
65
Item 3.
104
Item 4.
106
PART II - OTHER INFORMATION
Item 1.
108
Item 1A.
108
Item 2.
108
Item 3.
108
Item 4.
108
Item 5.
108
Item 6.
109
110


Defined Terms

We have used “we,” “us,” “our,” “our company,” and “the Company” to refer to NewtekOne, Inc. and its subsidiaries in this report. We also have used several other terms in this report, which are explained or defined below:
Terms
1940 ActInvestment Company Act of 1940, as amended
2017-1 TrustNewtek Small Business Loan Trust, Series 2017-1, terminated in February 2023
2018-1 TrustNewtek Small Business Loan Trust, Series 2018-1, terminated in October 2024
2019-1 TrustNewtek Small Business Loan Trust, Series 2019-1, terminated in October 2024
2021-1 TrustNewtek Small Business Loan Trust, Series 2021-1
2022-1 TrustNewtek Small Business Loan Trust, Series 2022-1
2023-1 TrustNewtek Small Business Loan Trust, Series 2023-1
2025-1 TrustNALP Business Loan Trust, Series 2025-1
2024 Notes5.75% Notes due 2024, matured August 1, 2024
2025 5.00% Notes
5.00% Notes due 2025, matured March 31, 2025
2025 8.125% Notes
8.125% Notes due 2025, exchanged for 2027 Notes
2025 Notes
Collectively, the 2025 5.00% Notes and 2025 8.125% Notes
2026 Notes5.50% Notes due 2026
2027 Notes
8.125% Notes due 2027
2028 Notes
8.00% Notes due 2028
2029 8.50% Notes8.50% Notes due 2029
2029 8.625% Notes8.625% Notes due 2029
2029 NotesCollectively, the 2029 8.50% Notes and 2029 8.625% Notes
2030 Notes
8.375% Notes due 2030
ABLAsset based lending
ACLAllowance for credit losses
AcquisitionThe Company’s Acquisition of NBNYC, pursuant to which the Company acquired from the NBNYC shareholders all of the issued and outstanding stock of NBNYC
ALP
Alternative Lending Program
ASCAccounting Standards Codification, as issued by the FASB
ASUAccounting Standards Updates, as issued by the FASB
Original ATM Equity Distribution Agreement
The Original ATM Equity Distribution Agreement, dated November 17, 2023, by and among the Company and the placement agents
Amended and Restated Equity Distribution Agreement
The Amended and Restated Equity Distribution Agreement, dated June 6, 2025, by and among the Company and the placement agents
BDCBusiness Development Company under the 1940 Act
BHCA
Bank Holding Company Act of 1956
BoardThe Company's board of directors
Capital OneCapital One Bank, National Association
C&IConventional commercial and industrial loans
CodeInternal Revenue Code of 1986, as amended
CODM
Chief Operating Decision Maker
CRE
Commercial real estate
Deutsche BankDeutsche Bank AG
DRIP
The Company's former dividend reinvestment plan
EBITDAEarnings before interest, taxes, depreciation and amortization
2015 Stock Incentive PlanThe Company's 2015 Stock Incentive Plan
2023 Stock Incentive PlanThe Company’s 2023 Stock Incentive Plan
ESPP
Employee Stock Purchase Plan
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
4


Federal ReserveBoard of Governors of the Federal Reserve System
FDICFederal Deposit Insurance Corporation
FV
Fair Value
HFI
Held for investment
HFS
Held for sale
LCM
Lower of amortized cost basis or fair value
LTV
Loan-to-Value
NAVNet Asset Value
NBNYC
National Bank of New York City, renamed Newtek Bank, National Association
NOO
Non-owner occupied
OCCOffice of the Comptroller of the Currency
PCD
Purchased Financial Assets with Credit Deterioration
PLPPreferred Lenders Program, as authorized by the SBA
PPPPaycheck Protection Program
RICRegulated investment company under the Code
S&PStandard and Poor's
SBAUnited States Small Business Administration
SECU.S. Securities and Exchange Commission
SMB
Small-and-medium sized businesses; revenue from $1.0 million to $100.0 million
SOFR
Secured Overnight Financing Rate
SPV I Capital One Facility
Revolving Credit and Security Agreement between NBL SPV I, LLC, a wholly-owned subsidiary of NALH, and Capital One
SPV II Deutsche Bank Facility
Revolving Credit and Security Agreement between NBL SPV II, LLC, a wholly-owned subsidiary of NALH, and Deutsche Bank
SPV III One Florida Bank Facility
Revolving Credit and Security Agreement between NBL SPV III, LLC, a wholly-owned subsidiary of NALH, and One Florida Bank
TrusteeU.S. Bank, National Association
TSO IITSO II Booster Aggregator, L.P.
U.S. GAAP or GAAPGenerally accepted accounting principles in the United States
VIE
Variable Interest Entity
WebsterWebster Bank, N.A.
Consolidated Subsidiaries
NSBF
Newtek Small Business Finance, LLC
NBL
Newtek Business Lending, LLC, a former wholly-owned subsidiary of Newtek Bank, merged into SBL on May 2, 2023
NCLNewtek Commercial Lending, Inc., a former wholly-owned subsidiary of NewtekOne Inc., merged into NALH on May 13, 2025
Newtek Bank
Newtek Bank, National Association
NALH or Newtek ALP Holdings
Newtek Business Services Holdco 6, Inc.
NMS
Newtek Merchant Solutions, LLC, a wholly-owned subsidiary of NBC
Mobil Money
Mobil Money, LLC, a wholly-owned subsidiary of NMS
NTSNewtek Technology Solutions, Inc., a former wholly-owned subsidiary of the Company, sold to IPM on January 2, 2025
NBC
CDS Business Services, Inc. dba Newtek Business Credit Solutions
SBL
Small Business Lending, LLC, a wholly-owned subsidiary of Newtek Bank
PMT
PMTWorks Payroll, LLC, dba Newtek Payroll and Benefits Solutions
NIA
Newtek Insurance Agency, LLC
TAM
Titanium Asset Management, LLC
POS
POS on Cloud, LLC, dba Newtek Payment Systems, an 88.34% owned consolidated subsidiary
5


Joint Ventures and Non-Control Investments
NCL JV
Newtek Conventional Lending, LLC, a former 50% owned joint venture, 100% Company owned as of August 27, 2025 and dissolved on September 30, 2025
TSO JV
Newtek-TSO II Conventional Credit Partners, LP, a 50% owned joint venture
IPM
Intelligent Protection Management Corp., formerly Paltalk, Inc. (PALT)
IPM Preferred Stock
4.0 million shares of IPM Series A Non-Voting Common Equivalent Stock

6

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, except for Per Share Data)
September 30, 2025December 31, 2024
(Unaudited)
ASSETS
Cash and due from banks$3,980 $6,941 
Restricted cash (amounts related to VIEs of $6.3 million and $6.3 million, respectively)
24,737 28,226 
Interest bearing deposits in banks188,214 346,207 
Total cash and cash equivalents216,931 381,374 
Debt securities available-for-sale, at fair value18,009 23,916 
Loans held for sale, at fair value757,001 372,286 
Loans held for sale, at LCM28,678 58,803 
Loans held for investment, at fair value (amounts related to VIEs of $213.8 million and $257.2 million, respectively)
305,720 369,746 
Loans held for investment, at amortized cost, net of deferred fees and costs834,087 621,651 
Allowance for credit losses(45,166)(30,233)
Loans held for investment, at amortized cost, net788,921 591,418 
Federal Home Loan Bank and Federal Reserve Bank stock4,064 3,585 
Settlement receivable469 52,465 
Residuals in securitizations, at fair value76,701 — 
Joint ventures and other non-control investments, at fair value (cost of $36,692 and $44,039), respectively
51,390 57,678 
Goodwill and intangibles14,633 14,752 
Right of use assets2,292 5,688 
Servicing assets, at fair value17,023 22,062 
Servicing assets, at LCM30,540 24,195 
Other assets86,727 60,636 
Assets held for sale— 21,308 
Total assets$2,399,099 $2,059,912 
F-7
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, except for Per Share Data)
September 30, 2025December 31, 2024
(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
 Liabilities:
Deposits:
Noninterest-bearing$21,771 $11,142 
Interest-bearing1,156,193 961,910 
Total deposits1,177,964 973,052 
Borrowings (including borrowings of VIEs of $140.6 million and $186.6 million, respectively)
748,549 708,041 
Dividends payable5,387 5,233 
Lease liabilities2,322 6,498 
Deferred tax liabilities, net5,343 2,244 
Due to participants35,047 21,532 
Accounts payable, accrued expenses and other liabilities37,780 40,806 
Liabilities directly associated with assets held for sale— 6,224 
Total liabilities2,012,392 1,763,630 
Commitment and contingencies (Note 13)
Shareholders' Equity:
Series A Preferred stock (par value $0.00 and $0.02 per share; 0 and 20 authorized, 0 and 20 issued and outstanding, respectively)
— 19,738 
Series B Preferred stock (par value $0.02 and $0.00 per share; 54 and 0 authorized, 50 and 0 issued and outstanding, respectively)
48,181 — 
Common stock (par value $0.02 per share; 199,980 authorized, 28,876 and 24,680 issued and outstanding, respectively)
577 526 
Retained earnings81,981 57,773 
Additional paid-in capital255,963 218,266 
Accumulated other comprehensive income (loss), net of income taxes5 (21)
Total shareholders' equity386,707 296,282 
Total liabilities and shareholders' equity$2,399,099 $2,059,912 
F-8
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Thousands, except for Per Share Data)
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Interest income
Debt securities available-for-sale$200 $334 $690 $1,168 
Loans and fees on loans36,376 28,588 104,213 80,346 
Other interest earning assets2,518 2,349 8,599 6,177 
Total interest income39,094 31,271 113,502 87,691 
Interest expense
Deposits10,879 7,314 30,081 19,755 
Notes and securitizations10,710 11,482 32,592 33,427 
Bank and FHLB borrowings2,956 1,494 8,424 5,496 
Total interest expense24,545 20,290 71,097 58,678 
Net interest income14,549 10,981 42,405 29,013 
Provision for credit losses7,712 6,928 30,334 16,742 
Net interest income after provision for credit losses6,837 4,053 12,071 12,271 
Noninterest income
Dividend income425 374 2,711 1,128 
Net loss on loan servicing assets(4,493)(1,786)(12,500)(5,383)
Servicing income6,076 4,958 17,655 14,922 
Net gains on sales of loans9,563 25,675 38,050 68,531 
Net (loss) gain on residuals in securitizations(1,450)— 30,015 — 
Net gain (loss) on loans under the fair value option29,250 (4,085)35,566 (4,181)
Technology and IT support income— 3,311 — 14,255 
Electronic payment processing income11,053 11,777 33,401 35,409 
Other noninterest income9,964 11,627 24,163 28,557 
Total noninterest income60,388 51,851 169,061 153,238 
Noninterest expense
Salaries and employee benefits expense19,973 19,149 64,424 60,445 
Technology services expense— 1,796 — 8,624 
Electronic payment processing expense4,429 4,438 13,304 14,977 
Professional services expense3,793 3,929 11,532 11,237 
Other loan origination and maintenance expense6,764 4,132 14,468 9,391 
Depreciation and amortization129 517 549 1,570 
Loss on extinguishment of debt179 — 179 — 
Other general and administrative costs6,892 4,886 21,189 14,326 
Total noninterest expense42,159 38,847 125,645 120,570 
Net income before taxes25,066 17,057 55,487 44,939 
Income tax expense7,165 5,123 14,516 12,410 
Net income17,901 11,934 40,971 32,529 
Dividends to preferred shareholders(472)(400)(1,272)(1,200)
Net income available to common shareholders$17,429 $11,534 $39,699 $31,329 
Earnings per Common Share:
Basic$0.68 $0.45 $1.57 $1.26 
Diluted$0.67 $0.45 $1.54 $1.26 
F-9
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(In Thousands)
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Net income$17,901 $11,934 $40,971 $32,529 
Other comprehensive income (loss) before tax:
Net unrealized gain (loss) on debt securities available-for-sale during the period(3)241 23 257 
Other comprehensive income (loss) before tax
(3)241 23 257 
Income tax expense (benefit)
— 73 (3)78 
Other comprehensive income (loss) net of tax
(3)168 26 179 
Comprehensive income$17,898 $12,102 $40,997 $32,708 


F-10
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
(In Thousands, except for Per Share Data)
Series A
Preferred stock
Series B
Preferred stock
Common stockRetained earningsAdditional paid-in capitalAccumulated other comprehensive income (loss), net of income taxesTotal shareholders' equity
SharesAmountSharesAmountSharesAmount
Balance at June 30, 202520 $19,738 — — 26,317 $525 $69,995 $221,914 $8 $312,180 
Stock-based compensation expense, net of forfeitures— — — — — — — 611 — 611 
Dividends declared related to RSA, net of accrued dividends forfeited— — — — (3)— (54)54 — — 
Purchase of vested stock for employee payroll tax withholding— — — — (90)(1)— (1,066)— (1,067)
Restricted stock awards, net of forfeitures— — — — (33)(1)— — — (1)
ESPP issuances— — — — 6 — — 70 — 70 
Issuance of preferred stock, net of issuance costs— — 50 48,181 (54)(1)— 1 — 48,181 
Securities purchase and exchange agreement(20)(19,738)— — 2,308 46 — 29,447 — 9,755 
Issuance of common stock, net of offering costs— — — — 425 9 — 5,081 — 5,090 
Amortization of offering costs related to ATM Program— — — — — — — (149)— (149)
Dividends declared common shares ($0.19/share)
— — — — — — (5,389)— — (5,389)
Dividends declared preferred shares ($9.44/share)
— — — — — — (472)— — (472)
Net income— — — — — — 17,901 — — 17,901 
Other comprehensive loss, net of tax— — — — — — — — (3)(3)
Balance at September 30, 2025— $— 50 $48,181 28,876 $577 $81,981 $255,963 $5 $386,707 
F-11
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
(In Thousands, except for Per Share Data)
Series A
Preferred stock
Common stockRetained earningsAdditional paid-in capitalAccumulated other comprehensive income (loss), net of income taxesTotal shareholders' equity
SharesAmountSharesAmount
Balance at June 30, 202420 $19,738 25,852 $517 $38,251 $215,633 $(137)$274,002 
Stock-based compensation expense, net of forfeitures— — — — — 913 — 913 
Dividends declared related to RSA, net of accrued dividends forfeited— — 8 — (114)114 — — 
Purchase of vested stock for employee payroll tax withholding— — (4)— — (46)— (46)
Restricted stock awards, net of forfeitures— — 158 3 — — — 3 
ESPP issuances— — 4 — — 48 — 48 
Dividends declared common shares ($0.19/share)
— — — — (4,837)— — (4,837)
Dividends declared preferred shares ($20.00/share)
— — — — (400)— — (400)
Net income
— — — — 11,934 — — 11,934 
Other comprehensive income, net of tax— — — — — — 168 168 
Balance at September 30, 202420 $19,738 26,018 $520 $44,834 $216,662 $31 $281,785 
    
F-12
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
(In Thousands, except for Per Share Data)
Series A
Preferred stock
Series B
Preferred stock
Common stockRetained earningsAdditional paid-in capitalAccumulated other comprehensive income (loss), net of income taxesTotal shareholders' equity
SharesAmountSharesAmountSharesAmount
Balance at December 31, 202420 $19,738 — — 26,291 $526 $57,773 $218,266 $(21)$296,282 
Stock-based compensation expense, net of forfeitures— — — — — — — 3,972 — 3,972 
Dividends declared related to RSA, net of accrued dividends forfeited— — — — 26 1 (421)420 — — 
Purchase of vested stock for employee payroll tax withholding— — — — (95)(1)— (1,136)— (1,137)
Restricted stock awards, net of forfeitures— — — — (31)(2)— — — (2)
Retirement of common shares— — — — (13)(1)— (166)— (167)
ESPP issuances— — — — 19 — — 227 — 227 
Issuance of common stock, net of offering costs— — — — 425 9 — 5,081 — 5,090 
Issuance of preferred stock, net of issuance costs— — 50 48,181 (54)(1)— 1 — 48,181 
Securities purchase and exchange agreement(20)(19,738)— — 2,308 46 — 29,447 — 9,755 
Amortization of offering costs related to ATM Program— — — — — — — (149)— (149)
Dividends declared common shares ($0.38/share)
— — — — — — (15,070)— — (15,070)
Dividends declared preferred shares ($25.44/share)
— — — — — — (1,272)— — (1,272)
Net income (loss)— — — — — — 40,971 — — 40,971 
Other comprehensive income, net of tax— — — — — — — — 26 26 
Balance at September 30, 2025— $— 50 $48,181 28,876 $577 $81,981 $255,963 $5 $386,707 
F-13
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
(In Thousands, except for Per Share Data)
Series A
Preferred stock
Common stockRetained earningsAdditional paid-in capitalAccumulated other comprehensive income (loss), net of income taxesTotal shareholders' equity
SharesAmountSharesAmount
Balance at December 31, 202320 $19,738 24,680 $492 $28,051 $200,913 $(148)$249,046 
Stock-based compensation expense, net of forfeitures— — — — — 2,244 — 2,244 
Dividends declared related to RSA, net of accrued dividends forfeited— — 20 — (265)265 — — 
Purchase of vested stock for employee payroll tax withholding— — (25)— — (299)— (299)
Restricted stock awards, net of forfeitures— — 228 5 — — — 5 
ESPP issuances— — 15 — — 167 — 167 
Amortization of offering costs— — — — — (423)— (423)
Issuance of common stock, net of offering costs— — 1,100 23 — 13,795 — 13,818 
Dividends declared common shares ($0.38/share)
— — — — (14,281)— — (14,281)
Dividends declared preferred shares ($60.00/share)
— — — — (1,200)— — (1,200)
Net income— — — — 32,529 — — 32,529 
Other comprehensive income, net of tax— — — — — — 179 179 
Balance at September 30, 202420 $19,738 26,018 $520 $44,834 $216,662 $31 $281,785 
F-14
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
Nine Months Ended September 30,
20252024
Cash flows from operating activities:
Net income$40,971 $32,529 
Adjustments to reconcile net income to net cash used in operating activities:
Net unrealized depreciation (appreciation) on joint ventures and non-control investments734 (9,562)
Net (gain) loss on loans accounted for under the fair value option(35,566)4,181 
Net gain on residuals in securitizations(30,015)— 
Net loss on loan servicing assets12,500 5,383 
Net unrealized depreciation (appreciation) on warrants and derivative transactions427 (562)
Net gain on sales of loans(38,050)(68,531)
Net accretion of premium/discount on debt securities available-for-sale and loans(1,423)(564)
Loss on extinguishment of debt, deferred financing costs expensed158 — 
Amortization of deferred financing costs and deferred loan fees and costs3,225 3,154 
Provision for credit losses30,334 16,742 
Lower of cost or market adjustment on loans held for sale(53)(73)
Bad debt expense, net of recoveries283 (133)
Stock compensation expense4,008 2,261 
Deferred income tax expense (benefit)3,097 11,472 
Depreciation and amortization549 1,570 
Proceeds from sale of loans held for sale310,246 598,186 
Sale of loans held for sale from affiliate— 131,155 
Funding of loans held for sale(777,953)(799,644)
Principal received on loans held for sale7,275 14,507 
Other, net(1,145)(435)
Changes in operating assets and liabilities:
Settlement receivable51,996 112 
Other assets(16,097)(5,093)
Due to participants13,516 (1,579)
Accounts payable, accrued expenses and other liabilities(6,853)3,505 
Net cash used in operating activities(427,836)(61,419)
F-15
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
Nine Months Ended September 30,
20252024
Cash flows from investing activities:
Principal received on loans held for investment, at fair value53,907 54,533 
Repurchases of loans held for investment, at fair value(4,669)(1,296)
Net increase in loans held for investment, at cost(242,775)(179,018)
Proceeds from sale of Newtek Technology Solutions, Inc.4,000 — 
Contributions to joint ventures and other non-control investments(15,835)(25,642)
Return of capital from joint ventures and other non-control investments5,644 20,301 
Purchase of fixed assets(96)(375)
Sales of Federal Home Loan Bank and Federal Reserve Bank stock338 1,048 
Purchases of Federal Home Loan Bank and Federal Reserve Bank stock(817)(1,021)
Purchases of available-for-sale securities(11,573)(30,863)
Maturities of available-for-sale securities18,000 39,500 
Net cash used in investing activities(193,876)(122,833)
Cash flows from financing activities:
Borrowing on bank notes payable390,200 175,840 
Repayment on bank notes payable(295,531)(194,534)
Net increase in deposits204,384 184,983 
Repayment of Federal Home Loan Bank advances(7,513)(7,437)
Proceeds from common shares sold, net of offering costs5,090 13,818 
Proceeds from preferred stock, net of offering costs48,181 — 
Securities purchase and exchange agreement10,000 — 
Repurchase of common shares under share repurchase plan(167)— 
Redemption of 2024 Notes— (38,250)
Maturity of 2025 5.00% Notes
(30,000)— 
Proceeds from 2029 8.50% Notes
— 71,875 
Proceeds from 2029 8.625% Notes
— 75,000 
Proceeds from 2030 Notes30,000 — 
Purchase of 2029 8.50% Notes
(67)— 
Payments on Notes Payable - Securitization Trusts(46,671)(68,922)
Proceeds related to residuals in securitizations169,420 — 
Dividends paid, net of dividend reinvestment plan(16,176)(15,015)
Payments of deferred financing costs(2,934)(5,067)
Proceeds from common stock issued under ESPP, net of discount190 140 
Purchase of vested stock for employee payroll tax withholding(1,137)(299)
Net cash provided by financing activities457,269 192,132 
Net (decrease) increase in cash and restricted cash(164,443)7,880 
Cash and restricted cash—beginning of period (NOTE 2)
381,374 184,006 
Deconsolidation of cash and restricted cash from controlled investments related to business dispositions
— (1,464)
Cash and restricted cash—end of period (NOTE 2)
$216,931 $190,422 
F-16
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
Nine Months Ended September 30,
20252024
Non-cash operating, investing and financing activities:
Foreclosed real estate acquired$7,599 $2,251 
Dividends declared but not paid during the period$5,387 $5,237 
IPM stock acquired$8,200 $— 
IPM earn-out$2,268 $— 
Loans and accrued interest acquired upon acquisition of 100% of NCL JV$26,213 $— 
Supplemental disclosure of cash flow information:
Interest paid$71,899 $59,570 
Income taxes paid $10,699 $7,215 
F-17
See accompanying notes to consolidated financial statements.
NEWTEKONE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION:

The Company is a financial holding company that is a leading provider of business and financial solutions to independent business owners (SMBs) and provides SMBs with the following Newtek® branded business and financial solutions: Newtek Banking, Newtek Alternative Lending, Newtek Payments, Newtek Insurance and Newtek Payroll.

NewtekOne reports on a consolidated basis the financial condition and results of operations for the following consolidated subsidiaries: Newtek Bank; NSBF; NMS (and its subsidiary Mobil Money); NBC; PMT; NIA; TAM; POS; and NALH.

Except as otherwise noted, all financial information included in the tables in the following footnotes is stated in thousands, except per share data.

The accompanying notes to the consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 17, 2025 (the “2024 Form 10-K”). The unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and footnotes necessary for a fair presentation of the consolidated financial statements in accordance with U.S. GAAP. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications that are necessary for the fair presentation of financial results as of and for the periods presented. The annualized results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year. The December 31, 2024 consolidated statement of assets and liabilities has been derived from the audited financial statements as of that date. All intercompany balances and transactions have been eliminated in consolidation.

Consolidation

The consolidated financial statements include the accounts of NewtekOne, its subsidiaries and certain VIEs. Significant intercompany balances and transactions have been eliminated. The Company consolidates a subsidiary if the Company has a controlling financial interest in the entity as a result of holding a majority of the voting rights. VIEs are consolidated if NewtekOne has the power to direct the activities of the VIE that significantly impact financial performance and has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE (i.e., NewtekOne is the primary beneficiary). The determination of whether the Company is the primary beneficiary of a VIE is reassessed on an ongoing basis. Investments in companies which are not VIEs, but in which the Company has more than minor influence over the operating and financial policies, are accounted for using the equity method of accounting. Investments in VIEs where NewtekOne is not the primary beneficiary of a VIE are accounted for using the equity method of accounting. The maximum potential exposure to losses relative to investments in VIEs is generally limited to the investment balance. Refer to NOTE 3—SECURITIZATIONS AND VARIABLE INTEREST ENTITIES

Reclassifications

Certain items in the prior financial statements have been reclassified to conform to current presentation.

The previous net presentation of cash flows from investing and financing activities within the consolidated statements of cash flows has been revised to reflect a gross presentation of repayments and borrowings, principal received on and repurchases of loans held for investment, purchases and redemptions of Federal Home Loan Bank stock and Federal Reserve Bank stock, contributions and return of capital on joint venture investments, as well as purchases, sales and maturities of available-for-sale securities for all comparative periods.

These reclassifications did not result in any changes to previously reported net income, shareholder’s equity or net cash used in investing or financing activities.




F-18
NOTE 2—SIGNIFICANT ACCOUNTING POLICIES:
A more detailed description of our accounting policies is included in the Company’s 2024 Form 10-K, which accounting policies remain significantly unchanged. There have been no other significant changes to our accounting policies, or the estimates made pursuant to those policies as described in our 2024 Form 10-K.

Cash and due from banks

The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. Invested cash is held exclusively at financial institutions of high credit quality. As of September 30, 2025, cash deposits in excess of insured amounts totaled $29.0 million. The Company has not experienced any losses with respect to cash balances in excess of insured amounts and management does not believe there was a significant concentration of risk with respect to cash balances as of September 30, 2025.
Restricted cash

Restricted cash includes amounts due on SBA loan-related remittances to third parties, cash reserves established as part of agreements with the SBA, cash reserves associated with consolidated securitization transactions, and cash margin as collateral for derivative instruments.

Interest bearing deposits in banks

The Company’s interest bearing deposits in banks reflects cash held at other financial institutions that earn interest.

The following table provides a reconciliation of cash, restricted cash, and interest bearing deposits in banks as of September 30, 2025 and 2024 and December 31, 2024:

September 30, 2025December 31, 2024September 30, 2024
Cash and due from banks$3,980 $6,941 $9,688 
Restricted cash24,737 28,226 27,929 
Interest bearing deposits in banks188,214 346,207 152,805 
Cash and restricted cash$216,931 $381,374 $190,422 

September 30, 2025December 31, 2024September 30, 2024
Cash held at Federal Reserve Bank1
$187,731 $345,680 $152,283 
Cash held at other financial institutions29,200 35,694 38,139 
Total cash and cash equivalents$216,931 $381,374 $190,422 
1 Subject to changes in the Federal Funds rate set by the Federal Open Market Committee

Transfers and Servicing of Financial Assets
For a transfer of financial assets to be considered a sale, the transfer must meet the sale criteria of ASC 860, which, at the time of the transfer, requires that the transferred assets qualify as recognized financial assets and the Company surrender control over the assets. Such surrender requires that the assets be isolated from the Company, even in bankruptcy or other receivership, the purchaser have the right to pledge or sell the assets transferred and the Company not have an option or obligation to reacquire the assets.

Assets related to transactions that do not meet ASC Topic 860 — Transfers and Servicing (“ASC Topic 860”) requirements for accounting sale treatment are reflected in the Company’s consolidated statements of financial condition as investments and the sale proceeds are recognized as a liability.
F-19
The Company accounts for servicing assets in accordance with ASC Topic 860-50 - Transfers and Servicing - Servicing Assets and Liabilities. The Company and Newtek Bank earn servicing fees from the guaranteed portions of SBA 7(a) loans they originate and sell. The Company has also recorded servicing assets/liabilities on loans sold where the Company retained an obligation to service the loan sold. Servicing assets for loans originated by the Company’s nonbank subsidiaries are measured at FV at each reporting date and the Company reports changes in the FV of servicing assets in earnings in the period in which the changes occur. The valuation model for servicing assets incorporates assumptions including, but not limited to, servicing costs, discount rate, prepayment rate, and default rate. Considerable judgment is required to estimate the fair value of servicing assets and as such these assets are classified as Level 3 in our fair value hierarchy. Servicing assets for loans originated by Newtek Bank are initially measured at FV and subsequently measured at LCM and amortized based on their estimated life and impairment is recorded to the extent the amortized cost exceeds the asset’s FV.

Variable Interest Entities

A variable interest entity (“VIE”) is an entity in which equity investors lack the characteristics of a controlling financial interest, do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support, or substantially all of the activities of the entity are conducted on behalf of an investor with disproportionally few voting rights. VIEs are consolidated by the primary beneficiary, which is the party who has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and who has an obligation to absorb losses of the VIE or a right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE upon initial involvement with a VIE and reassesses whether it is the primary beneficiary of a VIE on an ongoing basis. The determination of whether an entity is a VIE and whether the Company is the primary beneficiary of a VIE is based upon the facts and circumstances for the VIE and requires significant judgments such as whether the Company’s interest in a VIE is a variable interest, whether the Company controls the activities that most significantly impact the economic performance of the VIE, and whether the Company has the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the VIE. A VIE is consolidated if management determines the Company, is the primary beneficiary.

Allowance for Credit Losses – Loans

Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”) approach requires an estimate of the credit losses expected over the life of a loan (or pool of loans). The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net, lifetime amount expected to be collected on the loans. Loan losses are charged off against the allowance when management believes a loan balance is uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The allowance is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis, which generally includes larger non-accruing commercial loans.

The discounted cash flow (“DCF”) method is used to estimate expected credit losses for all loan portfolio segments measured on a collective (pool) basis. For each loan segment, cash flow projections are generated at the instrument level wherein payment expectations are adjusted for estimated prepayment speeds, probability of default, and loss given default. The modeling of prepayment speeds is based on a combination of historical internal data and peer data.

Regression analysis of historical internal and peer data is used to determine suitable loss drivers to utilize when modeling lifetime probability of default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For all loan pools utilizing the DCF method, management utilizes various economic indicators such as changes in unemployment rates, gross domestic product, real estate values, and other relevant factors as loss drivers. For all DCF models, management has determined that due to historic volatility in economic data, four quarters currently represents a reasonable and supportable forecast period, followed by a four-quarter reversion to historical mean levels for each of the various economic indicators.

The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. Specific instrument effective yields are calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level Net Present Value (“NPV”). An allowance is established for the difference between the instrument’s NPV and amortized cost basis.

F-20
The allowance evaluation also considers various qualitative factors, such as: (i) changes to lending policies, underwriting standards and/or management personnel performing such functions, (ii) delinquency and other credit quality trends, (iii) credit risk concentrations, if any, (iv) changes to the nature of the Company's business impacting the loan portfolio, and (v) other external factors, that may include, but are not limited to, results of internal loan reviews, stress testing, examinations by bank regulatory agencies, or other events such as a natural disaster. Significant management judgment is required at each point in the measurement process.

Arriving at an appropriate level of allowance involves a high degree of judgment. The determination of the adequacy of the allowance and provisioning for estimated losses is evaluated regularly based on review of loans, with particular emphasis on non-performing and other loans that management believes warrant special consideration. While management uses available information to recognize losses on loans, changing economic conditions and the economic prospects of the borrowers may necessitate future additions or reductions to the allowance. Management estimates the allowance balance using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. The Company’s historical credit loss experience provides the basis for the estimation of expected credit losses, supplemented with peer loss information, and results in expected probabilities of default and expected losses given default. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as changes in environmental conditions, such as changes in unemployment rates, production metrics, property values, or other relevant factors.

Expected losses are applied to loans grouped in portfolio segments, which are pools of loans aggregated based on type of borrower and collateral, generally based upon federal call report segmentation. Portfolio segments have been combined or sub-segmented as needed to ensure loans of similar risk profiles are appropriately pooled. These portfolio segments are as follows:

CRE:     The CRE portfolio is comprised of loans to borrowers on small offices, owner-occupied commercial buildings, industrial/warehouse properties, income producing/investor real estate properties, and multi-family loans secured by first mortgages. The Company’s underwriting standards generally target a loan-to-value ratio of 75%, depending on the type of collateral, and requires debt service coverage of a minimum of 1.2 times.

C&I:     The C&I portfolio consists of loans made for general business purposes consisting of short-term working capital loans, equipment loans and unsecured business lines.

SBA 7(a):     The SBA 7(a) portfolio includes loans originated under the federal Section 7(a) loan program (the “SBA 7(a) Program”), i.e., SBA 7(a) loans. The SBA is an independent government agency that facilitates one of the nation’s largest sources of SMB financing by providing credit guarantees for its loan programs. SBA 7(a) loans are partially guaranteed by the SBA, with SBA guarantees typically ranging between 50% and 90% of the principal and interest due. Under the SBA’s 7(a) Program, a bank or other lender licensed by the SBA may underwrite loans between $5.0 thousand and $5.0 million for a variety of general business purposes based on the SBA’s loan program requirements. The Company applies the zero loss expectation exemption under CECL to the guaranteed portion of the loans. The unguaranteed portion of the loans that are held on balance sheet at amortized cost are subject to an ACL. In the context of CECL, these SBA 7(a) loans are held at Newtek Bank.

Individually Evaluated Loans. Loans that do not share risk characteristics with existing pools are evaluated on an individual basis. Management defines these loans as nonaccrual loans with exposure above $100 thousand. In the first quarter of 2025, management began evaluating the remaining PCD loans individually, regardless of accrual status. For loans that are individually evaluated and collateral dependent, financial loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and management expects repayment of the financial asset to be provided substantially through the sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral or going concern, the specific credit loss reserve is calculated as the amount by which the amortized cost basis of the financial asset exceeds the NPV from the operation of the collateral. When repayment is expected to be from the sale of the collateral, the specific credit loss reserve is calculated as the amount by which the amortized costs basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The allowance may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.

F-21
Accrued Interest. Upon the Acquisition and adoption of CECL, the Company made the following elections regarding accrued interest receivable: (1) presented accrued interest receivable balances separately within other assets balance sheet line item; (2) excluded interest receivable that is included in amortized cost of financing receivables from related disclosures requirements and (3) continued our policy to write off accrued interest receivable by reversing interest income. For loans, write off typically occurs upon becoming over 90 to 120 days past due. Generally, accrued interest is reversed when a loan is placed on non-accrual or is written-off. Current year accrued interest is reversed through interest income while accrued interest from prior years is written-off through the ACL. Historically, the Company has not experienced uncollectible accrued interest receivable on investment securities.

Allowance for off-balance sheet credit exposures. The exposure is a component of other liabilities in the consolidated balance sheet and represents the estimate for probable credit losses inherent in unfunded commitments to extend credit. Unfunded commitments to extend credit include unused portions of lines of credit and standby and commercial letters of credit. The process used to determine the allowance for these exposures is consistent with the process for determining the allowance for loans, as adjusted for estimated funding probabilities or loan equivalency factors. A charge (credit) to provision for credit losses on the consolidated statements of income is made to account for the change in the allowance on off-balance sheet exposures between reporting periods.

Allowance for Credit Losses – Available-for Sale (“AFS”) Debt Securities

The impairment model for AFS debt securities differs from the CECL approach utilized for financial instruments measured at amortized cost because AFS debt securities are measured at fair value. For AFS debt securities in an unrealized loss position, Newtek Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities AFS that do not meet the aforementioned criteria, in making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, adverse conditions specifically related to the security, failure of the issuer of the debt security to make scheduled interest or principal payments, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. The cash flows should be estimated using information relevant to the collectability of the security, including information about past events, current conditions and reasonable and supportable forecasts. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the AFS security is uncollectible or when either of the criteria regarding intent or requirement to sell is met. As of September 30, 2025 and 2024, the Company determined that the unrealized loss positions in the AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded.

Accrued Interest Receivable

Upon the Acquisition and adoption of CECL, the Company made the following elections regarding accrued interest receivable: (1) presented accrued interest receivable balances separately within other assets balance sheet line item; (2) excluded interest receivable that is included in amortized cost of financing receivables from related disclosures requirements and (3) continued our policy to write-off accrued interest receivable by reversing interest income. For loans, write-off typically occurs upon becoming over 90 to 120 days past due. Historically, the Company has not experienced uncollectible accrued interest receivable on investment securities.

Settlement Receivable

Settlement receivable represents amounts due from third parties for guaranteed portions of SBA 7(a) loans which have been sold at period-end but have not yet settled. The guaranteed portion of SBA 7(a) loan principal balances that have been sold but not yet settled as of September 30, 2025 and December 31, 2024 was $0.4 million and $47.4 million, respectively. The settlement receivable also includes $43.0 thousand and $5.0 million of premiums, which have been recognized in Net Gains on Sales of Loans as of September 30, 2025 and December 31, 2024, respectively.

F-22
Income Taxes

Deferred tax assets and liabilities are computed based upon the differences between the financial statement and income tax basis of assets and liabilities using the enacted tax rates in effect for the year in which those temporary differences are expected to be realized or settled. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. See NOTE 17—INCOME TAXES.

Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes in the United States and its political subdivisions. Significant judgments and estimates are required in determining the consolidated income tax expense.

The Company’s U.S. federal and state income tax returns prior to fiscal year 2021 are generally closed, and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. Interest and penalties assessed by tax jurisdictions for income tax matters are presented as income tax expense on the consolidated statement of income.

Recently Adopted Accounting Pronouncements

Business Combinations—Joint Venture Formations (ASU 2023-05): In August 2023, the FASB issued ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60). The amendments in this Update address the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. The objectives of the amendments are to (1) provide decision-useful information to investors and other allocators of capital (collectively, investors) in a joint venture’s financial statements and (2) reduce diversity in practice. The amendments in this Update are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. Additionally, a joint venture that was formed before January 1, 2025, may elect to apply the amendments retrospectively if it has sufficient information. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for issuance), either prospectively or retrospectively. The Company adopted this guidance as of January 1, 2025 and the adoption of this standard is not expected to a have a material impact on its consolidated financial statements.

Improvements to Income Tax Disclosures (ASU 2023-09): In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The purpose of this guidance is to enhance the rate reconciliation and income taxes paid disclosures. This ASU requires that an entity disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. For the state and local income tax category of the rate reconciliation, entities must disclose a qualitative description of the states and local jurisdictions that make up the majority (greater than 50 percent) of the category. For the income taxes paid disclosures, entities will be required to disclose, on an annual basis, the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes. The amendments must be applied using either a prospective or retrospective approach. The Company adopted this guidance as of January 1, 2025, which will result in enhanced income tax disclosures within the consolidated financial statements beginning with its December 31, 2025 Form 10-K.

Compensation—Stock Compensation (ASU 2024-01): In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718), Scope Application of Profits Interest and Similar Awards. This standard provides clarity regarding whether profits interest and similar awards are within the scope of Topic 718 of the Accounting Standards Codification. This standard is effective for fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company adopted ASU 2024-01 on January 1, 2025 and the adoption of this standard is not expected to a have a material impact on its consolidated financial statements.

Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122 (ASU 2025-02): In March 2025, the FASB issued ASU 2025-02. The purpose of this guidance is to amend the Accounting Standards Codification to remove the text of SEC Staff Accounting Bulletin (“SAB”) 121 “Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users” as it has been rescinded by the issuance of SAB 122. ASU 2025-02 is effective immediately and is not expected to have an impact on its consolidated financial statements.

F-23
New Accounting Standards

Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (ASU 2024-03): In November 2024, the FASB issued ASU 2024-03, and in January 2025, the FASB issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures: Clarifying the Effective Date (ASU 2025-01). ASU 2024-03 requires public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items in the notes to the financial statements. Public business entities are required to apply the guidance prospectively and may elect to apply it retrospectively. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is in the process of evaluating the impact of adopting this standard and, at this time, does not anticipate it will have a material impact on its consolidated financial statements.

Debt with Conversion and Other Options (Subtopic 470-20) Induced Conversions of Convertible Debt Instruments (ASU 2024-04): In November 2024, the FASB issued ASU 2024-04, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions rather than as debt extinguishments. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years, though early adoption is permitted. The Company is in the process of evaluating the impact of adopting this standard and, at this time, does not anticipate it will have a material impact on its consolidated financial statements.

Business Combinations (Topic 805) and Consolidation (Topic 810)—Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (ASU 2025-03): In May 2025, the FASB issued ASU No. 2025-03, which revises current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition of a business. The amendments require that an entity consider the same factors that are currently required for determining which entity is the accounting acquirer in other acquisition transactions. ASU 2025-03 is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-03 is required to be applied prospectively. The Company is evaluating adoption timing and the impact ASU 2025-03 will have on its financial statements and related disclosures.

Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606)—Clarifications to Share-Based Consideration Payable to a Customer(ASU 2025-04): In May 2025, the FASB issued ASU 2025-04, to reduce diversity in practice and improve the decision usefulness and operability of the guidance for share-based consideration payable to a customer in conjunction with selling goods or services. This update is effective for annual reporting periods (including interim reporting periods within annual reporting periods) beginning after December 15, 2026, though early adoption is permitted. The Company has not engaged in providing share-based compensation to a customer and does not presently anticipate doing so.

Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets: In July 2025, the FASB issued ASU No. 2025-05, which provides a practical expedient when estimating expected credit losses on current accounts receivable and/or current contract assets arising from Transactions under Topic 606, including those assets acquired in a transaction accounted for under Topic 805, Business Combinations. The amendments require that an entity may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for the Company’s annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 is required to be applied prospectively. The Company is evaluating adoption timing and the impact ASU 2025-05 will have on its financial statements and at this time, does not anticipate it will have a material impact on its consolidated financial statements.

Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. In September 2025, the FASB issued ASU No. 2025-06, which modernizes the accounting for internal-use software costs under ASC 350-40 by aligning it with current development practices, especially agile and iterative methods. It clarifies when to begin capitalizing costs, improves operability across different development approaches, and enhances disclosure requirements. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company is evaluating adoption timing and the impact ASU 2025-06 will have on its consolidated financial statements and, at this time, does not anticipate it will have a material impact.

F-24
Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. In September 2025, the FASB issued ASU No. 2025-07, which refines the scope of derivative accounting under Topic 815 and clarifies the treatment of share-based noncash consideration under ASC 606. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those annual periods, with early adoption permitted. Entities may apply the amendments prospectively to new contracts or retrospectively with a cumulative-effect adjustment. The Company is evaluating adoption timing and the impact ASU 2025-07 will have on its consolidated financial statements and, at this time, does not anticipate it will have a material impact.

NOTE 3—SECURITIZATIONS AND VARIABLE INTEREST ENTITIES:
In a securitization, the unguaranteed portions of SBA 7(a) loans are transferred to a special purpose vehicle (a “Trust”), which in turn issues notes against the Trust’s assets in private placements. The Trust’s primary source of income for repaying the securitization notes is the cash flows generated from the unguaranteed portion of SBA 7(a) loans owned by the Trust. A Trust is considered to be a VIE.
Assets owned by securitization Trusts, which are VIEs, are included in the Company’s consolidated financial statements when the Company has concluded that it is the primary beneficiary of the Trust. The Company therefore consolidates the entities using the carrying amounts of the Trusts’ assets and liabilities and reflects the assets in Restricted cash and Loans held for investment, at fair value and reflects the associated financing in Borrowings on the Consolidated Statements of Financial Condition. The creditors or other beneficial interest holders of Trusts for which the Company is the primary beneficiary generally have recourse only to the assets and cash flows of the Trust and do not have recourse to the Company.
From 2010 through June 2023, NSBF engaged in thirteen (13) securitizations of the unguaranteed portions of its SBA 7(a) loans where management determined the Company was the primary beneficiary and thus consolidated the Trusts. Three (3) of these securitizations remain consolidated as of September 30, 2025. Risks associated with the Company’s involvement with the consolidated Trusts includes potential losses of residual interests in the Trusts.
The following table presents the total assets and total liabilities associated with the Company’s variable interests in consolidated Trusts, as classified in the consolidated statements of financial condition:
September 30, 2025December 31, 2024
Restricted cash
$6,303 $6,303 
Loans held for investment, at fair value
213,814 257,179 
Total assets
$220,117 $263,482 
Borrowings
$140,596 $186,635 
Total liabilities
$140,596 $186,635 
Assets owned by securitization Trusts, which are VIEs, are not included in the Company’s consolidated financial statements financial statements when the Company has concluded that it is not the primary beneficiary of the Trust and the transfer of the financial assets meet the sale criteria of ASC 860. As the beneficial interests in these securitizations meet the definition of a debt security, pertain to securitized financial assets and based on other criteria met, it falls under the scope of ASC 325-40. This guidance also permits an entity to elect to account for the beneficial interests under the fair value option. The Company has made the irrevocable decision to measure the beneficial interests using the fair value option under ASC 825 with changes in fair value recognized in earnings each reporting period.
On April 23, 2025, the Company’s subsidiary Newtek ALP Holdings closed a securitization pursuant to which it sold $155,930,000 of Class A Notes, $23,820,000 of Class B Notes, and $4,330,000 of a Class C Note (collectively, the “2025-1 Notes”) issued by NALP Business Loan Trust 2025-1 (the “Securitization Trust”). The 2025-1 Notes were backed by $216,564,700 of collateral, consisting of Newtek ALP Holdings originated ALP loans. The Class A Notes received a Morningstar DBRS rating of “A (low) (sf)” and were priced at a yield of 6.338%; the Class B Notes received a Morningstar DBRS rating of “BBB (sf)” and were priced at a yield of 7.838%; and the Class C Note received a Morningstar DBRS rating of “BB (sf)” and was priced at a yield of 10.338%. The 2025-1 Notes had a weighted average yield of 6.62% and an 85% advance rate.
F-25
The 2025-1 Trust meets the definition of a VIE and the Company holds a variable interest in the 2025-1 Trust, however, the Company is not considered the primary beneficiary of the 2025-1 Trust, because the power over the activities that have the most significant impact on the economic performance of the Securitization Trust is held by a single noteholder who has the ability to remove the Company as decision maker over the activities that most significantly impact the economic performance of the 2025-1 Trust. Consequently the Company is not required to consolidate the 2025-1 Trust. The Company’s beneficial interest in the 2025-1 Trust is evidenced by sole ownership of the Ownership Certificate and its beneficial interest in the credit risk of the securitized ALP Loans. Newtek ALP Holdings, the sponsor of the Securitization Trust, is a wholly owned subsidiary of the Company, therefore the Company effectively owns 100% of the equity interest in the 2025-1 Trust.
The Company’s continuing involvement with and exposure to loss from the VIEs includes the carrying value of the retained interest, and obligations under representations and warranties contained in the loan sale agreements. Creditors of the 2025-1 Trust have no recourse to the Company’s assets or general credit. The underlying performance of the ALP loans transferred to the Trust has a direct impact on the fair values and cash flows of the beneficial interests held and the servicing asset recognized.
The Company’s investments in the unconsolidated 2025-1 Trust is accounted for using the fair value option under ASC 825, with changes in fair value recognized in earnings each reporting period, and is classified in Residuals in securitizations, at fair value in the Company’s consolidated statements of financial condition, and consisted of the following:

September 30, 2025
Carrying ValueMaximum Exposure to LossTotal Assets in VIE
AssetsLiabilities
Transfer of loans - sale treatment
Retained interests$76,701 $— $76,701 $212,509 

NOTE 4—INVESTMENTS:

Investments consisted of the following at:
September 30, 2025December 31, 2024
CostFair ValueCostFair Value
Residuals in securitizations, at fair value (NOTE 3)
$32,481 $76,701 $— $— 
Joint ventures and other non-control investments, at fair value
36,692 51,390 44,039 57,678 
Debt securities available-for-sale, at fair value
18,004 18,009 23,934 23,916 
Federal Home Loan Bank and Federal Reserve Bank stock
4,064 4,064 3,585 3,585 
Total investments$91,241 $150,164 $71,558 $85,179 

The Company’s Investments in Joint Ventures (JV) and Other Non-Control Investments

NCL JV: On May 20, 2019, the Company and its joint venture partner launched NCL JV to provide ALP loans (formerly referred to as non-conforming conventional commercial and industrial term loans) to U.S. middle-market companies and small businesses. NCL JV is a 50/50 joint venture between NCL, a wholly-owned subsidiary of the Company, and Conventional Lending TCP Holding, LLC (“TCP”), a wholly-owned, indirect subsidiary of BlackRock TCP Capital Corp. (Nasdaq: TCPC). NCL JV ceased funding new ALP loans during 2020. On January 28, 2022, NCL JV closed a securitization with the sale of $56.3 million of Class A Notes, NCL Business Loan Trust 2022-1, Business Loan-Backed Notes, Series 2022-1, secured by a segregated asset pool consisting primarily of NCL JV’s portfolio of ALP loans secured by liens on commercial or residential mortgaged properties, originated by NCL JV and NBL. The Notes were rated “A” (sf) by DBRS Morningstar. The Notes were priced at a yield of 3.209%. The proceeds of the securitization were used, in part, to repay NCL JV’s credit facility and return capital to the NCL JV partners. On August 25, 2025, the Class A Noteholders were re-paid in full, the assets owned by the NCL Business Loan Trust 2022-1 were distributed to NCL JV and the NCL Business Loan Trust 2022-1 was subsequently terminated. On August 27, 2025, NALH entered into an interest purchase agreement with TCP to acquire TCP’s 50% ownership interest in NCL JV for $15.75 million, resulting in NALH owning 100% of NCL JV. Since the assets acquired did not meet the definition of a business under ASC 805-10-55, the transaction was accounted for as an asset acquisition under ASC 805-50. On September 30, 2025, NALH caused the dissolution of NCL JV.

F-26
The following tables show certain summarized financial information for NCL JV:

Selected Statements of Assets and Liabilities Information (Unaudited)
September 30, 2025December 31, 2024
Cash$— $587 
Restricted cash— 5,513 
Loans, at FV (amortized cost of $0 and $52,751, respectively)
— 53,895 
Other assets— 1,737 
Total assets$— $61,732 
Securitization notes payable$— $25,322 
Other liabilities— 867 
Total liabilities— 26,189 
Net assets— 35,543 
Total liabilities and net assets$— $61,732 

Selected Statements of Operations Information (Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Interest and other income$1,181 $1,202 $3,825 $3,766 
Total expenses1,194 442 1,737 1,374 
Net investment (loss) income(13)760 2,088 2,392 
Unrealized (depreciation) appreciation on investments(1,118)417 (5,085)(652)
Net (decrease) increase in net assets resulting from operations$(1,131)$1,177 $(2,997)$1,740 

TSO JV: On August 5, 2022, NCL and TSO II Booster Aggregator, L.P. (“TSO II”) entered into a joint venture, TSO JV, and began making investments in ALP loans during the fourth quarter of 2022. NCL and TSO II each committed to contribute an equal share of equity funding to the TSO JV and each have equal voting rights on all material matters. On July 23, 2024, TSO JV closed a securitization backed by ALP loans, selling $137.2 million of Class A Notes and $17.2 million of Class B Notes (collectively, the “TSO Notes”) issued by NALP Business Loan Trust 2024-1. The TSO Notes were backed by $190.5 million of collateral, consisting of Company originated ALP loans. The Class A and Class B Notes received Morningstar DBRS ratings of “A (sf)” and “BBB (high) (sf),” respectively. TSO JV ceased investing in new ALP loans in July 2023.

The following tables show certain summarized financial information for TSO JV:

Selected Statements of Assets and Liabilities Information (Unaudited)
September 30, 2025December 31, 2024
Cash$701 $1,780 
Restricted cash15,251 18,399 
Loans, at FV (amortized cost of $153,915 and $173,654, respectively)
169,693 183,084 
Other assets2,799 2,457 
Total assets$188,444 $205,720 
Securitization notes payable$109,182 $137,569 
Dividends payable
850 — 
Other liabilities421 427 
Total liabilities110,453 137,996 
Net assets77,991 67,724 
Total net assets$188,444 $205,720 

F-27
Selected Statements of Operations Information (Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Interest and other income$5,187 $5,722 $16,047 $12,405 
Total expenses2,383 3,114 7,577 6,678 
Net investment income2,804 2,608 8,470 5,727 
Unrealized (depreciation) appreciation on investments(2,757)2,114 6,347 6,392 
Realized loss on derivative transactions— (1,436)— (391)
Unrealized gain on derivative transactions— 832 — 694 
Net increase in net assets resulting from operations$47 $4,118 $14,817 $12,422 

Intelligent Protection Management Corp.

On January 2, 2025, the Company completed the sale of its wholly owned subsidiary Newtek Technology Solutions, Inc. (“NTS”) to Paltalk, Inc. (subsequently renamed Intelligent Protection Management Corp. (“IPM”)) (Nasdaq: IPM) (the “NTS Sale”). In connection with the NTS Sale, the Company received the Closing Consideration consisting of $4.0 million Cash Consideration and 4.0 million shares of IPM Preferred Stock. Upon the occurrence of certain specified transfers of the IPM Preferred Stock, each share of IPM Preferred Stock will automatically convert into one share of common stock of IPM, subject to certain anti-dilution adjustments. In addition to the Closing Consideration, the Company may be entitled to receive an earn-out in an amount of up to $5.0 million, payable in cash, IPM Preferred Stock, or a combination thereof (as determined in IPM’s discretion), based on IPM’s achievement of certain cumulative average Adjusted EBITDA thresholds for the 2025 and 2026 fiscal years. The Company is entitled to appoint one representative to the IPM board of directors. Barry Sloane, the Company’s President, Chairman and Chief Executive Officer serves on the IPM board of directors as the Company’s representative. The Company has accounted for its investment in IPM under ASC 321 beginning in the first quarter of 2025 and as such management measured the equity investment at fair value and the carrying amount will be remeasured at each reporting period with changes in fair value recorded in earnings. In addition, the assets, liabilities and operations of NTS were classified as held for sale as of December 31, 2024.

F-28
Investments in Affiliated Companies

An affiliated company is an unconsolidated entity in which the Company has an ownership of 5% or more of its voting securities. Investments related to our joint ventures and other non-controlled investments for the nine months ended September 30, 2025 and 2024 were as follows:
CompanyFair Value at December 31, 2024Purchases (Cost)Return of Investment
Net Gains/(Losses)
Fair Value at September 30, 2025Dividend Income
Joint Ventures
NCL JV
$18,800 $15,835 $(31,843)
3
$(2,792)$— $861 
TSO JV
38,100 — — 1,650 39,750 1,850 
Total Joint Ventures$56,900 $15,835 $(31,843)$(1,142)$39,750 $2,711 
Other Non-Control Investments
EMCAP Loan Holdings, LLC$320 $— $(14)$— $306 $— 
Biller Genie Software, LLC458 — — 1,042 1,500 — 
Intelligent Protection Management Corp.
IPM Earnout
— 2,268 
1
— (394)1,874 — 
IPM Stock
$— 8,200 
2
— (240)27,960 — 
Total Other Non-Control Investments$778 $10,468 $(14)$408 $11,640 $— 
Total
$57,678 $26,303 $(31,857)$(734)$51,390 $2,711 

1    Fair value of the Earn-out of $2.268 million as of January 2, 2025, valued in accordance with ASC 805 and ASC 820.
2    Four million shares of IPM Preferred Stock initially valued at $2.05 per share, which was the closing price of IPM’s common shares on January 2, 2025, with net gains/(losses) calculated based on a closing price of $1.99 on September 30, 2025.
3    Includes $26.2 million of loans and accrued interest acquired as part of NALH’s August 2025 acquisition of the remaining 50% of NCL JV not previously owned by NALH.

CompanyFair Value at December 31, 2023Purchases (Cost)Return of Investment
Net Gains/(Losses)
Fair Value at September 30, 2024Dividend Income
Joint Ventures
NCL JV
$19,400 $— $— $(500)$18,900 $1,112 
TSO JV
21,459 25,642 (20,185)9,934 36,850 — 
Total Joint Ventures$40,859 $25,642 $(20,185)$9,434 $55,750 $1,112 
Other Non-Control Investments
EMCAP Loan Holdings, LLC$368 $— $(116)$68 $320 $16 
Biller Genie Software, LLC360 — — 60 420 — 
Total Other Non-Control Investments$728 $— $(116)$128 $740 $16 
Total
$41,587 $25,642 $(20,301)$9,562 $56,490 $1,128 

Debt Securities Available-for-Sale

The following tables summarize the amortized cost and fair value of debt securities available-for-sale by major type as of September 30, 2025 and December 31, 2024:

September 30, 2025December 31, 2024
Amortized CostUnrealized GainsUnrealized LossesFair ValueAmortized CostUnrealized GainsUnrealized LossesFair Value
U.S. Treasury notes$18,004 $8 $3 $18,009 $23,934 $11 $29 $23,916 

F-29
As of September 30, 2025 and December 31, 2024, there was none and $30.4 thousand of accrued interest receivable on available-for-sale securities, respectively, included in Other assets in the accompanying Consolidated Statements of Financial Condition.

During the nine months ended September 30, 2025 and 2024, securities sold or settled were as follows:

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
# of Securities
$
# of Securities
$
# of Securities
$
# of Securities
$
Securities sold or settled
one settled$4,000two settled$10,000five settled$18,000three settled$39,500

Unrealized Losses

The following tables summarize the gross unrealized losses and fair value of debt securities available-for-sale by length of time each major security type has been in a continuous unrealized loss position:

September 30, 2025
Less Than 12 Months12 Months or MoreTotal
Fair ValueUnrealized LossesFair ValueUnrealized LossesNumber of Holdings Fair ValueUnrealized Losses
U.S. Treasury notes$9,634 $3 $— $— 3 $9,634 $3 

December 31, 2024
Less Than 12 Months12 Months or MoreTotal
Fair ValueUnrealized LossesFair ValueUnrealized LossesNumber of Holdings Fair ValueUnrealized Losses
U.S. Treasury notes$12,061 $29 $— $— 2 $12,061 $29 

Management evaluates debt securities available-for-sale debt to determine whether the unrealized loss is due to credit-related factors or non-credit-related factors. The evaluation considers the extent to which the security’s fair value is less than cost, the financial condition and near-term prospects of the issuer, and intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. These unrealized losses are primarily the result of non-credit-related volatility in the market and market interest rates. Since none of the unrealized losses relate to marketability of the securities or the issuers' ability to honor redemption obligations and the Company has the intent and ability to hold the securities for a sufficient period of time to recover unrealized losses, none of the losses have been recognized in the Company’s Consolidated Statements of Income.

Contractual Maturities

The following table summarizes the amortized cost and fair value of debt securities available-for-sale by contractual maturity:

September 30, 2025December 31, 2024
Amortized CostFair ValueAmortized CostFair Value
Maturing within 1 year$18,004 $18,009 $15,833 $15,838 
After 1 year through 5 years— — 8,101 8,078 
Total$18,004 $18,009 $23,934 $23,916 

F-30
Other information

The following table summarizes Newtek Bank’s debt securities available-for-sale pledged for deposits, borrowings, and other purposes:
September 30, 2025December 31, 2024
Pledged for deposits$— $— 
Pledged for borrowings and other:18,009 23,916 
FRB borrowings6,957 2,980 
FHLB borrowings11,052 20,937 
Total pledged$18,009 $23,916 

NOTE 5—LOANS:

Loans held for investment (HFI), at fair value

Loans HFI, at fair value, includes SBA 7(a) loans originated by NSBF. On occasion, NSBF has distributed loans to NewtekOne that were originated as SBA 7(a) loans by NSBF where the SBA guarantee has been subsequently repurchased by NSBF. The following table shows the Company’s loan portfolio by collateral type for loans HFI, at fair value:

Loans HFI, at Fair Value
September 30, 2025December 31, 2024
CostFair ValueCostFair Value
CRE$141,575 $150,175 $162,894 $175,353 
Residential Real Estate56,448 54,359 69,667 67,474 
Machinery and Equipment¹50,508 46,325 60,460 56,454 
Accounts Receivable and Inventory48,304 43,193 59,449 54,267 
Unsecured4,506 4,659 5,643 5,644 
Other²9,185 7,009 13,033 10,554 
Total$310,526 $305,720 $371,146 $369,746 
1    Machinery and Equipment includes one loan at NewtekOne at $4.7 million Cost and $4.4 million Fair value as of September 30, 2025, and $4.7 million Cost and $4.6 million Fair Value as of December 31, 2024.
2    Other includes one loan at NewtekOne at $1.1 million Cost and $0.3 million Fair Value as of September 30, 2025, and one loan at $2.0 million Cost and $1.1 million Fair Value as of December 31, 2024.

Loans HFI, at amortized cost, net of deferred fees and costs
Loans HFI, at amortized cost, net of deferred fees and costs, includes unguaranteed portions of SBA 7(a) loans, guaranteed portions of SBA 7(a) loans repurchased from the secondary market, CRE, and C&I loans originated and held by Newtek Bank. The following table shows the Company’s loan portfolio by loan type for loans HFI, at amortized cost:
Loans HFI, at Amortized Cost
September 30, 2025December 31, 2024
SBA$509,912 $380,981 
CRE256,921 191,831 
C&I64,887 47,558 
Total Loans831,720 620,370 
Deferred fees and costs, net2,367 1,281 
Loans held for investment, at amortized cost, net of deferred fees and costs$834,087 $621,651 
F-31
Past Due and Non-Accrual Loans HFI

Loans HFI, at fair value

The following tables summarize the aging of accrual and non-accrual loans HFI, at fair value by class:
As of September 30, 2025
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Accounted for Under the FV Option
30-59 Days
60-89 Days
90+ Days
SBA, at fair value$8,995 $12,092 $2,182 $73,145 $96,414 $209,306 $305,720 
As of December 31, 2024
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Accounted for Under the FV Option
30-59 Days
60-89 Days
90+ Days
SBA, at fair value$23,158 $18,400 $9,268 $67,304 $118,130 $251,616 $369,746 

Loans HFI, at amortized cost, net of deferred fees and costs

The following tables summarize the aging of accrual and non-accrual loans HFI, at amortized cost by class:
As of September 30, 2025
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Carried at Amortized Cost
30-59 Days
60-89 Days
90+ Days
At amortized cost
SBA
$12,813 $10,391 $295 $60,048 $83,547 $426,365 $509,912 
CRE— — — 3,165 3,165 253,756 256,921 
C&I516 274 104 2,465 3,359 61,528 64,887 
Total, at amortized cost
$13,329 $10,665 $399 $65,678 $90,071 $741,649 $831,720 
Deferred fees and costs2,367 
Total, at amortized cost net of deferred fees and costs$834,087 
Allowance for credit losses(45,166)
Total, at amortized cost, net
$788,921 
As of December 31, 2024
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Carried at Amortized Cost
30-59 Days
60-89 Days
90+ Days
At amortized cost
SBA$11,264 $9,046 $— $21,706 $42,016 $338,965 $380,981 
CRE— — — 2,635 2,635 189,196 191,831 
C&I275 — — — 275 47,283 47,558 
Total, at amortized cost$11,539 $9,046 $— $24,341 $44,926 $575,444 $620,370 
Deferred fees and costs1,281 
Total, at amortized cost net of deferred fees and costs$621,651 
Allowance for credit losses(30,233)
Total, at amortized cost, net$591,418 

F-32
Credit Quality Indicators

The Company uses internal loan reviews to assess the performance of individual loans. In addition, an independent review of the loan portfolio is performed annually by an external firm. The goal of the Company’s annual review of each borrower’s financial performance is to validate the adequacy of the risk grade assigned.

The Company uses a grading system to rank the quality of each loan. The grade is periodically evaluated and adjusted as performance dictates. Loan grades 1 through 4 are passing grades and grade 5 is special mention. Collectively, grades 6 through 7 represent classified loans in Newtek Bank’s portfolio. The following guidelines govern the assignment of these risk grades:

Exceptional (1 Rated): These loans are of the highest quality, with strong, well-documented sources of repayment. These loans will typically have multiple demonstrated sources of repayment with no significant identifiable risk to collection, exhibit well-qualified management, and have liquid financial statements relative to both direct and indirect obligations.

Quality (2 Rated): These loans are of very high credit quality, with strong, well-documented sources of repayment. These loans exhibit very strong, well defined primary and secondary sources of repayment, with no significant identifiable risk of collection and have internally generated cash flow that more than adequately covers current maturities of long-term debt.

Satisfactory (3 Rated): These loans exhibit satisfactory credit risk and have excellent sources of repayment, with no significant identifiable risk of collection. These loans have documented historical cash flow that meets or exceeds required minimum Bank guidelines, or that can be supplemented with verifiable cash flow from other sources. They have adequate secondary sources to liquidate the debt, including combinations of liquidity, liquidation of collateral, or liquidation value to the net worth of the borrower or guarantor.

Acceptable (4 Rated): These loans show signs of weakness in either adequate sources of repayment or collateral but have demonstrated mitigating factors that minimize the risk of delinquency or loss. These loans may have unproved, insufficient or marginal primary sources of repayment that appear sufficient to service the debt at this time. These loans also include loans underwritten using projected and/or proforma financial information provided by the borrower. Repayment weaknesses may be due to minor operational issues, financial trends, or reliance on projected performance. They may also contain marginal or unproven secondary sources to liquidate the debt, including combinations of liquidation of collateral and
liquidation value to the net worth of the borrower or guarantor.

Special mention (5 Rated): These loans show signs of weaknesses in either adequate sources of repayment or collateral. These loans may contain underwriting guideline tolerances and/or exceptions with no mitigating factors; and/or instances where adverse economic conditions develop subsequent to origination that do not jeopardize liquidation of the debt but substantially increase the level of risk.

Substandard (6 Rated): Loans graded Substandard are inadequately protected by current sound net worth, paying capacity of the obligor, or pledged collateral. Loans classified as Substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These loans are consistently not meeting the repayment schedule.

Doubtful (7 Rated): Loans graded Doubtful have all the weaknesses inherent in those classified as Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. The ability of the borrower to service the debt is extremely weak, overdue status is constant, the debt has been placed on non-accrual status, and no definite repayment schedule exists. Once the loss position is determined, the amount is charged off.

Loss (8 Rated): Loss rated loans are considered uncollectible and of such little value that their continuance as assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this credit even though partial recovery may be affected in the future.

F-33
The following tables present asset quality indicators by portfolio class and origination year at September 30, 2025 and December 31, 2024:
September 30, 2025Term Loans HFI by Origination Year
20252024202320222021PriorTotal
SBA, at fair value
Risk Grades 1-4$— $— $19,172 $86,721 $30,891 $93,382 $230,166 
Risk Grades 5-6— — 3,599 19,964 6,399 41,462 71,424 
Risk Grade 7— — 32 60 — — 92 
Risk Grade 8— — — 49 — 3,989 4,038 
Total$— $— $22,803 $106,794 $37,290 $138,833 $305,720 
SBA, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$150,232 $180,416 $85,132 $— $— $— $415,780 
Risk Grades 5-6533 38,387 28,189 — — — 67,109 
Risk Grade 7148 11,621 12,218 — — — 23,987 
Risk Grade 846 1,306 1,684 — — — 3,036 
Total$150,959 $231,730 $127,223 $— $— $— $509,912 
CRE, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$77,676 $52,371 $25,499 $30,666 $15,866 $48,957 $251,035 
Risk Grades 5-6— 897 — 1,750 — 3,239 5,886 
Risk Grade 7— — — — — — — 
Total$77,676 $53,268 $25,499 $32,416 $15,866 $52,196 $256,921 
C&I, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$42,765 $13,144 $1,602 $— $— $— $57,511 
Risk Grades 5-6560 5,249 39 — — — 5,848 
Risk Grade 7— 1,528 — — — — 1,528 
Total$43,325 $19,921 $1,641 $— $— $— $64,887 
Total$271,960 $304,919 $177,166 $139,210 $53,156 $191,029 $1,137,440 
December 31, 2024Term Loans HFI by Origination Year
20242023202220212020PriorTotal
SBA, at fair value
Risk Grades 1-4$— $24,061 $112,058 $40,641 $20,379 $102,569 $299,708 
Risk Grades 5-6— 3,469 18,592 5,365 3,188 39,225 69,839 
Risk Grade 7— — — — — — — 
Risk Grade 8— — 144 17 22 16 199 
Total$— $27,530 $130,794 $46,023 $23,589 $141,810 $369,746 
SBA, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$224,958 $110,735 $— $— $— $— $335,693 
Risk Grades 5-67,475 32,753 — — — — 40,228 
Risk Grade 7588 4,132 — — — — 4,720 
Risk Grade 885 255 — — — — 340 
Total$233,106 $147,875 $— $— $— $— $380,981 
CRE, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$51,889 $25,697 $33,235 $15,763 $395 $60,614 $187,593 
Risk Grades 5-6— — — — 883 3,355 4,238 
Risk Grade 7— — — — — — — 
Total$51,889 $25,697 $33,235 $15,763 $1,278 $63,969 $191,831 
C&I, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$44,251 $1,532 $— $— $— $1,500 $47,283 
Risk Grades 5-6— 275 — — — — 275 
Risk Grade 7— — — — — — — 
Total$44,251 $1,807 $— $— $— $1,500 $47,558 
Total$329,246 $202,909 $164,029 $61,786 $24,867 $207,279 $990,116 
F-34

Allowance for Credit Losses

See NOTE 2—SIGNIFICANT ACCOUNTING POLICIES for a description of the methodologies used to estimate the ACL.

The following table details activity in the ACL for the nine months ended September 30, 2025 and 2024:

September 30, 2025September 30, 2024
CRE
C&I
SBA
Total
CRE
C&I
SBA
Total
Beginning balance$1,430 $315 $28,488 $30,233 $1,408 $314 $10,852 $12,574 
Charge offs(122)(275)(15,008)(15,405)(236)— (2,697)(2,933)
Recoveries— — 35 35 — — — — 
Provision for credit losses1
523 3,068 26,712 30,303 98 (286)16,592 16,404 
Ending balance$1,831 $3,108 $40,227 $45,166 $1,270 $28 $24,747 $26,045 

1     Excludes $31 thousand and $338 thousand of Provision for credit losses relating to unfunded commitments for the nine months ended September 30, 2025 and September 30, 2024, respectively, which is recorded within Accounts payable, accrued expenses and other liabilities in accordance with ASC 326.


The following table details activity in the ACL for the three months ended September 30, 2025 and 2024:

September 30, 2025September 30, 2024
CREC&ISBATotal
CRE
C&I
SBATotal
Beginning balance$2,045 $1,540 $39,040 $42,625 $1,358 $215 $19,525 $21,098 
Charge offs(122)(8)(5,062)(5,192)— — (1,763)(1,763)
Recoveries— — 18 18 — — — — 
Provision for credit losses1
(92)1,576 6,231 7,715 (88)(187)6,985 6,710 
Total
$1,831 $3,108 $40,227 $45,166 $1,270 $28 $24,747 $26,045 
1    Excludes $3 thousand and $218 thousand of Provision for credit losses relating to unfunded commitments for the three months ended September 30, 2025 and 2024, respectively, which is recorded within Accounts payable, accrued expenses and other liabilities in accordance with ASC 326.

The Company identified 383 and 145 loans as of September 30, 2025 and December 31, 2024, respectively, that did not share similar risk characteristics with the loan segments identified in NOTE 2—SIGNIFICANT ACCOUNTING POLICIES and evaluated them for impairment individually.

The following table presents the individually evaluated and collectively evaluated ACL by segment:

September 30, 2025December 31, 2024
ACL
CREC&ISBATotalCREC&ISBATotal
Individually Evaluated
$— $1,536 $12,788 $14,324 $— $— $7,019 $7,019 
Collectively Evaluated
1,831 1,572 27,439 30,842 1,430 315 21,469 23,214 
Total
$1,831 $3,108 $40,227 $45,166 $1,430 $315 $28,488 $30,233 

The following table presents the recorded investment in loans individually evaluated and collectively evaluated by segment:

September 30, 2025December 31, 2024
Recorded Investment
CREC&ISBATotalCREC&ISBATotal
Individually Evaluated
$18,824 $2,465 $60,048 $81,337 $2,635 $— $21,706 $24,341 
Collectively Evaluated
238,097 62,422 449,864 750,383 189,196 47,558 359,275 596,029 
Total
$256,921 $64,887 $509,912 $831,720 $191,831 $47,558 $380,981 $620,370 
F-35

The amortized cost basis of loans on nonaccrual status and the associated ACL are as follows:

September 30, 2025December 31, 2024
Nonaccrual without AllowanceNonaccrual with AllowanceACL
Nonaccrual without Allowance
Nonaccrual with AllowanceACL
SBA$20,730 $39,317 $12,789 $7,264 $14,442 $7,019 
CRE3,165 — — 2,635 — — 
C&I456 2,010 1,536 — — — 
Total
$24,351 $41,327 $14,325 $9,899 $14,442 $7,019 


The unpaid contractual principal balance and recorded investment for the loans individually assessed is shown in the table below by type:

September 30, 2025December 31, 2024
Real Estate CollateralNon-Real Estate CollateralTotal
ACL
Real Estate Collateral
Non-Real Estate Collateral
Total
ACL
SBA$49,585 $10,463 $60,048 $12,789 $19,586 $2,120 $21,706 $7,019 
CRE18,824 — 18,824 — 2,635 — 2,635 — 
C&I2,375 90 2,465 1,536 — — — — 
Total$70,784 $10,553 $81,337 $14,325 $22,221 $2,120 $24,341 $7,019 

Accrued interest on loans totaled $20.2 million and $15.5 million as of September 30, 2025 and December 31, 2024, respectively, and is excluded from the estimate of credit losses. The Company writes off accrued interest receivable by reversing interest income and typically occurs upon loans becoming 90 to 120 days past due.

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

During the three months ended September 30, 2025, the Company executed one loan modification involving a borrower experiencing financial difficulty, with an amortized cost basis of $0.25 million. The modification resulted in an other-than-insignificant delay in payments; however, the Company expects to receive all contractual principal and interest. The terms of the modification did not include principal forgiveness, term extension, or interest rate reductions.

No other loan modifications to borrowers experiencing financial difficulty were executed during the three and nine months ended September 30, 2025 and 2024.

Loans held for sale, at fair value
September 30, 2025December 31, 2024
SBA 504 First Lien$155,459 $128,255 
SBA 504 Second Lien31,009 26,678 
SBA 7(a)265,521 4,855 
SBA 7(a) Partials1
18,384 — 
ALP286,628 212,498 
Loans held for sale, at fair value$757,001 $372,286 
1    Reclassified from Loans held for sale, at LCM
F-36
The following tables summarize the aging of accrual and non-accrual loans HFS, at fair value by class:
As of September 30, 2025
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Accounted for Under the FV Option
30-59 Days
60-89 Days
90+ Days
SBA, at fair value$1,566 $1,454 $1,417 $13,149 $17,586 $452,786 $470,372 
ALP, at fair value8,746 — 11,488 1,740 21,974 264,655 286,629 
Total$10,312 $1,454 $12,905 $14,889 $39,560 $717,441 $757,001 
As of December 31, 2024
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Accounted for Under the FV Option
30-59 Days
60-89 Days
90+ Days
SBA, at fair value$29,119 $13,367 $— $250 $42,736 $117,052 $159,788 
ALP, at fair value— 2,492 — — 2,492 210,006 212,498 
Total$29,119 $15,859 $— $250 $45,228 $327,058 $372,286 

Loans held for sale, at LCM
September 30, 2025December 31, 2024
SBA 504 First Lien$22,119 $36,783 
SBA 504 Second Lien6,559 8,203 
SBA 7(a) Partials1
— 13,817 
Loans held for sale, at LCM
$28,678 $58,803 
1    Reclassified to Loans held for sale, at fair value

The following tables summarize the aging of accrual and non-accrual loans HFS, at LCM by class:
As of September 30, 2025
Past Due and AccruingNon- accrualTotal Past Due and Non-accrualCurrentTotal Carried at Amortized Cost
30-59 Days60-89 Days90+ Days
SBA$— $151 $— $2,504 2,655 $26,023 $28,678 
As of December 31, 2024
Past Due and AccruingNon- accrualTotal Past Due and Non-accrualCurrentTotal Carried at Amortized Cost
30-59 Days60-89 Days90+ Days
SBA$2,164 $1,099 $— $— $3,263 $55,540 $58,803 
F-37
NOTE 6—TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS:

Due to/from affiliated companies

The following table summarizes the amounts due to and due from affiliated companies as of September 30, 2025 and December 31, 2024:

September 30, 2025December 31, 2024
Due to affiliated companies1
$109 $242 
Due from affiliated companies2
26 — 
Total due to/due from affiliated companies
$83 $242 
1    Included within Accounts payable, accrued expenses, and other liabilities
2    Included within Other assets

Transactions with joint ventures and other non-control investments

Refer to NOTE 4—INVESTMENTS for a schedule of transactions with our joint ventures and other non-control equity investments.

The following table summarizes the income earned from our joint ventures and other non-control investments for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Servicing income
$357 $576 $1,292 $1,446 
Dividend income
425 374 2,711 1,128 
Total income$782 $950 $4,003 $2,574 
Expenses2,117 — 6,009 — 
Net income/(expense)
$(1,335)$950 $(2,006)$2,574 

Newtek Bank Deposits

In the normal course of business, Newtek Bank holds FDIC insured deposits from certain of the Company’s officers, directors and their associated companies. The following table summarizes the amounts due of deposits from related parties and their affiliated companies as of September 30, 2025 and December 31, 2024:

September 30, 2025December 31, 2024
FDIC insured deposits
$4,497 $4,732 
Non-FDIC insured deposits
291 1,098 
Total deposits from related parties and their affiliated companies
$4,788 $5,830 

F-38
NOTE 7—SERVICING ASSETS:
Servicing assets held by NSBF are measured at fair value and the Company performs valuations on a quarterly basis. Servicing assets held by Newtek Bank, including Newtek Bank’s subsidiary SBL, are measured at lower of cost or market where the assets are initially recorded at fair value, then subsequently amortized, and assessed for impairment each reporting period.
The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells, for the unguaranteed portions of SBA 7(a) loans in the NSBF sponsored securitizations, and for the portfolios of ALP loans SBL services for the NCL JV (dissolved in September 2025), TSO JV sponsored securitization and Newtek ALP Holdings and its sponsored securitization.
The following table summarizes the unpaid principle balance of loans serviced at September 30, 2025 and December 31, 2024:
September 30, 2025December 31, 2024
SBA 7(a)
$1,770,719 $1,996,715 
ALP
363,162 169,842 
50448,385 12,475 
Total loans serviced
$2,182,266 $2,179,032 
The following table summarizes the fair value and valuation assumptions related to servicing assets at September 30, 2025 and December 31, 2024:
September 30, 2025December 31, 2024
WeightedRangeWeightedRange
Unobservable Input
Amount
AverageMinimumMaximum
Amount
AverageMinimumMaximum
Servicing assets at FV:
$17,023 $22,062 
Discount factor1
11.75 %11.75 %11.75 %12.00 %12.00 %12.00 %
Cumulative prepayment rate22.50 %22.50 %22.50 %22.50 %22.50 %22.50 %
Average cumulative default rate21.00 %21.00 %21.00 %21.00 %21.00 %21.00 %
Servicing assets at LCM:
30,540 24,195 
Discount factor1
11.27 %10.75 %12.00 %12.97 %12.00 %13.50 %
Cumulative prepayment rate34.98 %22.50 %50.00 %34.65 %22.50 %75.00 %
Average cumulative default rate16.50 %5.00 %21.00 %18.90 %5.00 %20.00 %
Total
$47,563 $46,257 
1 Determined based on risk spreads and observable secondary market transactions.
Refer to NOTE 9—FAIR VALUE MEASUREMENTS for a rollforward of servicing assets, at fair value. The following tables show a rollforward of servicing assets, at LCM for the nine months ended September 30, 2025 and 2024:
Servicing Assets, at LCMSeptember 30, 2025September 30, 2024
Balance at beginning of the period
$24,195 $10,389 
Amortization1
(7,461)(2,959)
Additions2
13,806 14,715 
Impairment assessment
— — 
Balance at end of the period
$30,540 $22,145 
1    Included within Net loss on loan servicing assets in the Consolidated Statements of Income
2    Included within Net gains on sales of loans in the Consolidated Statements of Income

Servicing income earned for the three and nine months ended September 30, 2025 and 2024 was as follows:

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Servicing income
$6,076$4,958$17,655$14,922
F-39
NOTE 8—GOODWILL AND INTANGIBLE ASSETS:

Goodwill

The following table summarizes the carrying amount of goodwill:

September 30, 2025December 31, 2024
Banking$271 $271 
Payments13,814 13,814 
Total goodwill$14,085 $14,085 

Banking: The goodwill in the banking segment was generated from the Acquisition, representing the excess of the purchase price over the fair value of the net assets acquired.

Payments: The goodwill in the payments segment was generated from acquisitions by the legal entities within this segment prior to the consolidation of those entities into NewtekOne following the Acquisition.

Intangible Assets

The following table summarizes intangible assets:

At September 30, 2025At December 31, 2024
Gross carrying AmountAccumulated AmortizationNet Carrying amountGross carrying AmountAccumulated AmortizationNet Carrying amount
Banking - Core Deposits$1,040 $(492)$548 $1,040 $(373)$667 


Core Deposits Intangible. CDI is a measure of the value of non-interest-bearing and interest-bearing checking accounts, savings accounts, and money market accounts that are acquired in a business combination. The fair value of the CDI stemming from any given business combination is based on the present value of the expected cost savings attributable to the core deposit funding, relative to an alternative source of funding. The CDI relating to the NBNYC Acquisition will be amortized over an estimated useful life of 10 years using the sum of years digits depreciation method. The Company evaluates such identifiable intangibles for impairment when an indication of impairment exists.

Amortization expense for the three and nine months ended September 30, 2025 and 2024 is as follows, and is included in Depreciation and amortization on the Consolidated Statements of Income:

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Amortization expense$43 $192 $129 $593 

The remaining estimated aggregate future amortization expense for intangible assets as of September 30, 2025 is as follows:

Amortization Expense
2025$37 
2026135 
2027114 
202894 
202973 
Thereafter95 
Total
$548 

F-40
NOTE 9—FAIR VALUE MEASUREMENTS:

The following tables present fair value measurements of certain of the Company’s assets and liabilities measured at fair value and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values as of September 30, 2025 and December 31, 2024:
 Fair Value Measurements at September 30, 2025
TotalLevel 1Level 2Level 3
Assets:
Debt securities available-for-sale, at fair value
U.S. Treasury notes$18,009 $18,009 $— $— 
Loans held for sale, at fair value757,001 — 278,678 478,323 
Loans held for investment, at fair value305,720 — — 305,720 
Individually evaluated loans1
81,337 — — 81,337 
Other real estate owned, at fair value2
5,629 — — 5,629 
Other real estate owned, at LCM1,2
2,261 — — 2,261 
Residuals in securitizations, at fair value3
76,701 — — 76,701 
Servicing assets, at fair value
17,023 — — 17,023 
Servicing assets, at LCM1
30,540 — — 30,540 
Joint ventures and other non-control investments, at fair value
51,390 7,960 
5
— 43,430 
Derivative instruments1,2,3
232 — 232 — 
Total assets measured at fair value
$1,345,843 $25,969 $278,910 $1,040,964 
Liabilities:
Equity warrants3,4
$77 $— $— $77 
Total liabilities measured at fair value
$77 $— $— $77 
1    Non-recurring.
2    Included in Other assets on the Consolidated Statements of Financial Condition.
3    Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.
4    Included in Accounts payable, accrued expenses, and other liabilities on the Consolidated Statements of Financial Condition.
5    Four million shares of IPM Preferred Stock valued at the closing price per share of IPM common stock of $1.99 on September 30, 2025.

 Fair Value Measurements at December 31, 2024
TotalLevel 1Level 2Level 3
Assets:
Debt securities available-for-sale
U.S. Treasury notes$23,916 $23,916 $— $— 
Loans held for sale, at fair value372,286 — — 372,286 
Loans held for investment, at fair value369,746 — — 369,746 
Other real estate owned1
3,764 — — 3,764 
Servicing assets, at fair value
22,062 — — 22,062 
Joint ventures and other non-control investments57,678 — — 57,678 
Assets held for sale2
21,308 — — 21,308 
Derivative instruments1,3
715 — 715 — 
Total assets measured at fair value$871,475 $23,916 $715 $846,844 
Liabilities:
Equity warrants3,4
$133 $— $— $133 
Total liabilities measured at fair value
$133 $— $— $133 
1    Included in Other assets on the Consolidated Statements of Financial Condition.
2    Non-recurring.
3    Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.
4    Included in Accounts payable, accrued expenses, and other liabilities on the Consolidated Statements of Financial Condition.
F-41

The following tables represents the changes in the investments, servicing assets and liabilities measured at fair value using Level 3 inputs for the nine months ended September 30, 2025 and 2024:
Nine Months Ended September 30, 2025
Loans HFI,
at FV		Loans HFS,
at FV		Joint Ventures and Other Non-Control InvestmentsResiduals in Securitizations, at FVServicing Assets,
at FV
Equity Warrants1
Other Real Estate Owned2
Fair value, December 31, 2024$369,746 $372,286 $57,678 $— $22,062 $133 $3,764 
Reclasses between loans at FV and LCM— 7,133 — — — — — 
Sales
282 (261,392)— — — — (1,937)
Principal payments received(53,905)(4,678)— — — — — 
Foreclosed real estate acquired(4,405)— — — — — 4,405 
SBA loans, funded— 72,723 — — — — — 
ALP loans, funded
— 250,635 — — — — — 
Purchases and repurchases of loans
4,669 25,094 — — — — — 
Residuals in securitizations, notional— — — 32,481 — — — 
Additions3
— — 2,268 — — — — 
Capital contributions— — 15,835 — — — — 
Returns of capital4
— — (31,857)— — — — 
Change in valuation due to:
Changes in valuation inputs or assumptions
(1,075)21,378 (494)44,220 12 (56)(603)
Other factors
(9,592)— — — (5,051)— — 
Transfers out of Level 35
— (4,856)— — — — — 
Fair value, September 30, 2025$305,720 $478,323 $43,430 $76,701 $17,023 $77 $5,629 
1    Included in Accounts payable, accrued expenses, and other liabilities on the Consolidated Statements of Financial Condition.
2    Included in Other assets on the Consolidated Statements of Financial Condition.
3    Investment in IPM.
4    Includes $26.2 million of loans and accrued interest returned as part of the acquisition of 100% of NCL JV.
5    As of April 1, 2025, the Company is using broker quotes to calculate the fair value of its unguaranteed portions of its SBA 7(a) loans moving them from Level 3 to Level 2.

F-42
Nine Months Ended September 30, 2024
Loans HFI, at FVLoans HFS,
at FV		Joint Ventures and Other Non-Control InvestmentsServicing Assets,
at FV
Equity Warrants1
Other Real Estate Owned2
Fair value, December 31, 2023$469,801 $118,867 $41,587 $29,336 $141 $1,110 
Reclasses between loans HFS and HFI— — — — — — 
Reclasses between loans at FV and LCM263 2,508 — — — — 
Sales(2,888)(166,648)— — — (956)
Principal payments received(54,656)(9,375)— — — — 
Foreclosed real estate acquired(2,251)— — — — 2,251 
SBA loans, funded122 12,966 — — — — 
ALP loans, funded— 191,440 — — — — 
Mortgage loans, funded— 79,432 — — — — 
Additions— — — 14 — — 
Purchases and repurchases of loans1,296 — — — — — 
Capital contributions/(distributions)— — 5,341 — — — 
Change in valuation due to:
Changes in valuation inputs or assumptions2,614 13,058 9,562 805 (33)(206)
Other factors(19,830)(23)— (6,188)— — 
Fair Value, September 30, 2024$394,471 $242,225 $56,490 $23,967 $108 $2,199 
1    Included in Accounts payable, accrued expenses, and other liabilities on the Consolidated Statements of Financial Condition.
2    Included in Other assets on the Consolidated Statements of Financial Condition.


F-43
The following tables provide a summary of quantitative information about the Company’s Level 3 fair value measurements as of September 30, 2025 and December 31, 2024. In addition to the inputs noted in the table below, according to our valuation policy we may also use other valuation techniques and methodologies when determining our fair value measurements. The tables below are not intended to be all-inclusive but rather provide information on the significant Level 3 inputs as they relate to the Company’s fair value measurements at September 30, 2025 and December 31, 2024.

Fair Value as ofWeightedRange
September 30, 2025Unobservable Input
Average
MinimumMaximum
Assets:
Loans HFI, at FV - accrual
$232,575 Market yields6.55 %6.55 %6.55 %
Cumulative prepayment rate22.50 %22.50 %22.50 %
Average cumulative default rate21.00 %21.00 %21.00 %
Loans HFI, at FV - non-accrual
$73,145 Market yields7.00 %7.00 %7.00 %
Average cumulative default rate30.00 %30.00 %30.00 %
Loans HFS, at FV
$478,323 Market yields7.17 %6.44 %11.75 %
Cumulative prepayment rate58.18 %22.50 %65.00 %
Average cumulative default rate10.82 %5.00 %21.00 %
Joint ventures and non-control investments$43,430 Market yields7.42 %7.64 %12.00 %
Cost of equity14.00 %12.00 %18.00 %
Weighted average cost of capital9.18 %8.00 %22.57 %
Residuals in securitizations, at FV$76,701 Market yields7.64 %7.64 %7.64 %
Cost of equity14.00 %12.00 %16.00 %
Weighted average cost of capital9.50 %8.50 %10.50 %
Servicing assets, at FV
$17,023 Market yields11.75 %11.75 %11.75 %
Cumulative prepayment rate22.50 %22.50 %22.50 %
Average cumulative default rate21.00 %21.00 %21.00 %
Other real estate owned, at FV
$5,629 Appraised valueN/AN/AN/A
Liabilities:
Equity warrants
$77 
Expected volatility
43.00 %43.00 %43.00 %
Dividend yield
6.60 %6.60 %6.60 %
Risk free rate
3.96 %3.96 %3.96 %
F-44
Fair Value as ofWeightedRange
December 31, 2024Unobservable Input
Average
MinimumMaximum
Assets:
Loans HFI, at FV - accrual
$302,442 Market yields6.55 %6.55 %6.55 %
Cumulative prepayment rate22.50 %22.50 %22.50 %
Average cumulative default rate21.00 %21.00 %21.00 %
Loans HFI, at FV - non-accrual
$67,304 Market yields7.30 %7.30 %7.30 %
Average cumulative default rate30.00 %30.00 %30.00 %
Loans HFS, at FV
$372,286 Market yields7.62 %7.08 %8.18 %
Cumulative prepayment rate59.78 %50.00 %70.00 %
Average cumulative default rate9.89 %5.00 %15.00 %
Joint ventures and non-control investments$57,678 Market yields8.40 %8.00 %12.00 %
Cost of equity11.00 %8.00 %14.00 %
Weighted average cost of capital7.72 %6.00 %23.98 %
Servicing assets, at FV
$22,062 Market yields12.00 %12.00 %12.00 %
Cumulative prepayment rate22.50 %22.50 %22.50 %
Average cumulative default rate21.00 %21.00 %21.00 %
Assets held for sale$21,308 Present value factor90.70 %89.50 %93.20 %
Discount rate10.23 %7.27 %11.71 %
Other real estate owned$3,764 Appraised valueN/AN/AN/A
Liabilities:
Equity warrants$133 Expected volatility48.00 %48.00 %48.00 %
Dividend yield6.00 %6.00 %6.00 %
Risk free rate4.52 %4.52 %4.52 %


F-45
Estimated Fair Value of Other Financial Instruments

GAAP also requires disclosure of the fair value of financial instruments carried at book value on the Consolidated Statements of Financial Condition. The carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value on a recurring or non-recurring basis are as follows:

September 30, 2025
Carrying Amount
Fair Value Amount by Level:
Total Fair Value
Level 1Level 2Level 3
Financial Assets:
Cash and due from banks$3,980 $3,980 $— $— $3,980 
Restricted cash24,737 24,737 — — 24,737 
Interest bearing deposits in banks188,214 188,214 — — 188,214 
Debt securities available-for-sale, at FV18,009 18,009 — — 18,009 
Loans HFS, at FV757,001 — 203,586 553,415 757,001 
Loans HFS, at LCM28,678 — — 28,678 28,678 
Loans HFI, at FV305,720 — — 305,720 305,720 
Loans HFI, at amortized cost, net of deferred fees and costs834,087 — — 944,601 944,601 
Federal Home Loan Bank and Federal Reserve Bank stock4,064 — 4,064 — 4,064 
Joint ventures and other non-control investments, at FV51,390 7,960 — 43,430 51,390 
Residuals in securitizations, at FV76,701 — — 76,701 76,701 
Financial Liabilities:
Time deposits481,531 — 482,945 — 482,945 
Borrowings748,549 — 302,403 452,022 754,425 
December 31, 2024
Carrying Amount
Fair Value Amount by Level:
Total Fair Value
Level 1Level 2Level 3
Financial Assets:
Cash and due from banks$6,941 $6,941 $— $— $6,941 
Restricted cash28,226 28,226 — — 28,226 
Interest bearing deposits in banks346,207 346,207 — — 346,207 
Debt securities available-for-sale, at FV23,916 23,916 — — 23,916 
Loans HFS, at FV372,286 — — 372,286 372,286 
Loans HFS, at LCM58,803 — — 58,856 58,856 
Loans HFI, at FV369,746 — — 369,746 369,746 
Loans HFI, at amortized cost, net of deferred fees and costs621,651 — — 668,687 668,687 
Federal Home Loan Bank and Federal Reserve Bank stock3,585 — 3,585 — 3,585 
Joint ventures and other non-control investments, at FV57,678 — — 57,678 57,678 
Financial Liabilities:
Time deposits409,251 — 410,442 — 410,442 
Borrowings708,041 — 306,549 413,818 720,367 

F-46
NOTE 10—DEPOSITS:

The following table summarizes deposits by type:
September 30, 2025December 31, 2024
Non-interest-bearing:
Demand$21,771 $11,142 
Interest-bearing:
Checking154,754 103,978 
Money market64,284 62,001 
Savings455,624 386,680 
Time deposits481,531 409,251 
Total interest-bearing1,156,193 961,910 
Total deposits$1,177,964 $973,052 
Time deposits, money market, and interest-bearing checking obtained through brokers$38,100 $27,100 
Aggregate amount of deposit accounts that exceeded the FDIC limit$177,929 $140,679 
Deposit overdrafts reclassified as loan balances$16 $17 
Certificates of deposit in excess of $0.25 million $177,485 $99,231 

The following table summarizes the scheduled maturities of time deposits:
2025$158,023 
2026275,302 
202737,559 
202810,509 
2029117 
Thereafter21 
Total time deposits$481,531 

F-47
NOTE 11—BORROWINGS:

At September 30, 2025 and December 31, 2024, the Company had borrowings composed of the following:
September 30, 2025December 31, 2024
CommitmentsBorrowings OutstandingWeighted Avg Interest RateCommitmentsBorrowings OutstandingWeighted Avg Interest Rate
Bank Borrowings1:
NMS Webster Note2
$— $— 6.68 %$54,871 $32,688 7.30 %
NMS Goldman Facility3
95,000 88,617 9.83 %— — — %
SPV I Capital One Facility100,000 23,155 7.13 %60,000 21,192 7.22 %
SPV II Deutsche Bank Facility170,000 103,970 7.73 %120,000 54,036 7.57 %
SPV III One Florida Bank Facility35,000 8,262 8.25 %30,000 23,011 8.50 %
FHLB Advances
14,000 7,862 2.79 %20,000 15,330 2.19 %
Parent Company Notes1:
2025 Notes4
— — 5.00 %30,000 29,913 5.00 %
2026 Notes115,000 114,820 5.50 %115,000 114,282 5.50 %
2027 Notes5
50,000 49,960 8.125 %50,000 49,944 8.125 %
  2028 Notes40,000 38,986 8.00 %40,000 38,726 8.00 %
  2029 Notes
71,808 69,938 8.50 %71,875 69,622 8.50 %
2029 Notes
75,000 73,028 8.625 %75,000 72,662 8.625 %
2030 Notes6
30,000 29,355 8.375 %— — — %
Notes payable - Securitization Trusts1
142,560 140,596 6.94 %189,231 186,635 7.32 %
Total borrowings
$938,368 $748,549 7.65 %$855,977 $708,041 7.22 %

Outstanding borrowings that are presented net of deferred financing costs, which include the bank borrowings, the Parent Company Notes, and the Notes payable - Securitization Trusts, consisted of the following:
September 30, 2025December 31, 2024
Principal balanceUnamortized deferred financing costs
Net carrying amount1
Principal balanceUnamortized deferred financing costs
Net carrying amount1
Bank Borrowings:
NMS Webster Note2
$— $— $— $32,894 $(206)$32,688 
NMS Goldman Facility3
90,000 (1,383)88,617 — — — 
SPV I Capital One Facility23,740 (585)23,155 21,300 (108)21,192 
SPV II Deutsche Bank Facility104,691 (721)103,970 54,800 (764)54,036 
SPV III One Florida Bank Facility8,307 (45)8,262 23,075 (64)23,011 
Parent Company Notes:
2025 Notes (5.00%)3
— — — 30,000 (87)29,913 
2026 Notes (5.50%)
115,000 (180)114,820 115,000 (718)114,282 
2027 Notes (8.125%)4
50,000 (40)49,960 50,000 (56)49,944 
2028 Notes (8.00%)
40,000 (1,014)38,986 40,000 (1,274)38,726 
2029 Notes (8.50%)
71,808 (1,870)69,938 71,875 (2,253)69,622 
2029 Notes (8.625%)
75,000 (1,972)73,028 75,000 (2,338)72,662 
2030 Notes (8.375%)5
30,000 (645)29,355 — — — 
Notes Payable - Securitization Trusts
142,560 (1,964)140,596 189,231 (2,596)186,635 
1    Net of deferred financing costs.
2     On September 26, 2025, the NMS Webster Note was repaid in full. Refer to more detailed information below.
3    On September 26, 2025, NMS entered into the Goldman Facility. Refer to more detailed information below.
4    On March 31, 2025, the 2025 5.00% Notes matured.
5    Effective December 11, 2024, the Company entered into the Amendment and Exchange Agreements with each of the holders of the 2025 8.125% Notes, pursuant to which the Company and the holders of the 2025 8.125% Notes agreed to exchange the 2025 8.125% Notes for the 2027 Notes, effecting amendments solely to (i) extend the February 1, 2025 maturity date of the
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2025 8.125% Notes to the new maturity date of February 1, 2027 (the “New Maturity Date”) and (ii) provide that the 2027 Notes will be redeemable in whole, but not in part, at any time, at the option of the Company, from November 1, 2026 to the New Maturity Date, at a redemption price of 100% of the outstanding principal amount being redeemed plus any accrued but unpaid interest, to but excluding the redemption date.
6    On March 19, 2025, the Company closed an exempt offering of $30.0 million in aggregate principal amount of its 2030 Notes. The 2030 Notes bear interest at a rate of 8.375% per year payable semiannually on April 1 and October 1 each year, beginning October 1, 2025.
2030 Notes

On March 19, 2025, the Company closed an exempt offering of $30.0 million in aggregate principal amount of its 2030 Notes. The offering was consummated pursuant to the terms of a purchase agreement dated March 19, 2025 among the Company and eleven institutional accredited investors (each a “Purchaser”). Pursuant to the purchase agreement, the 2030 Notes were issued to the Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The 2030 Notes are scheduled to mature on April 1, 2030 and can be redeemed in whole or in part at any time, at a make-whole price prior to January 1, 2030, or at a price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, thereafter. The 2030 Notes bear interest at a rate of 8.375% per year payable semiannually on April 1 and October 1 each year, beginning October 1, 2025. Total net proceeds received after deducting structuring fees and estimated offering expenses was approximately $29.25 million.
NMS Webster Note
On September 26, 2025, the Company’s wholly-owned subsidiary NMS repaid in full all of the outstanding obligations under that certain Credit Agreement, dated as of November 8, 2018. As a result, the Webster Credit Agreement and the other loan documents executed in connection therewith have been terminated, including that certain Parent Guaranty Agreement, dated as of November 8, 2018, by and between the Company and Webster Bank. No early termination penalties were incurred by the Company or the Loan Parties as a result of the termination. As a result of the termination, the Company recognized a $0.2 million loss on extinguishment of debt.
NMS Goldman Facility
On September 26, 2025, NMS and its wholly-owned subsidiary, Mobil Money, LLC (collectively, the “Borrowers”), together with NBSH Holdings, LLC, the direct sole member of NMS, as guarantor, entered into a Credit and Guaranty Agreement (the “Goldman Credit Agreement”), with Private Credit at Goldman Sachs Alternatives ("Goldman") as Administrative Agent and Collateral Agent thereunder and the lenders party thereto from time to time (the “Lenders”). Pursuant to the terms of the Goldman Credit Agreement, the Lenders made available to the Borrowers term loans up to an aggregate principal amount of $90.0 million (the “Term Loans”) and a revolving facility up to an aggregate principal amount of $5.0 million (together with the Term Loans, collectively the “Goldman Facility”). The Goldman Facility will mature on September 26, 2030. The Company incurred approximately $1.4 million of deferred financing costs in connection with the Goldman Facility.

On September 26, 2025, the Borrowers drew down the full $90.0 million in Term Loans and used the proceeds to repay in full the outstanding amounts under the Webster Facility and pay transaction expenses related to the closing of the Goldman Facility. In addition, the Borrowers used the proceeds to fund $58.5 million of loans to the Company. The Company intends to use the proceeds of such loans to repay and reduce the Company’s outstanding unsecured debt, repurchase Company common shares (subject to market conditions and the terms of existing or any future share repurchase authorizations by the Company’s board of directors) and for other general corporate purposes.

Pursuant to the terms of the guaranty under the Goldman Credit Agreement, NBSH has unconditionally guaranteed the prompt and unconditional payment of all of the Borrowers’ obligations under the Goldman Credit Agreement.
SPV I Capital One Facility
Newtek ALP Holdings’ subsidiary (our indirect subsidiary) SPV I maintains a credit facility with Capital One. On July 28, 2025 the facility was upsized to maximum borrowings of $100.0 million. Capital One’s commitments to fund new amounts terminate in July 2027, with all amounts due under the Facility maturing in July 2028. The Company incurred approximately $0.6 million of deferred financing costs in connection with this upsize.
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Total interest expense including unused line fees and amortization of deferred financing costs related to borrowings for the three and nine months ended September 30, 2025 and 2024 were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Total interest expense$13,666 $12,976 $41,016 $38,923 

NOTE 12—DERIVATIVE INSTRUMENTS:

The Company historically uses derivative instruments primarily to economically manage the fair value variability of certain fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. The following is a breakdown of the derivatives outstanding as of September 30, 2025 and December 31, 2024:
September 30, 2025December 31, 2024
Fair ValueRemainingFair ValueRemaining
Contract Type
Notional1
Asset2
Liability3
Maturity (years)
Notional1
Asset2
Liability3
Maturity (years)
5-year Treasury Futures
$(150,704)$232 $— 0.25 years$(153,049)$715 $— 0.25 years
1    Shown as a negative number when the position is sold short.
2     Shown in Other assets in the accompanying Consolidated Statements of Financial Condition.
3    Shown in Accounts payable, accrued expenses, and other liabilities in the accompanying Consolidated Statements of Financial Condition.

The following table indicates the net realized gains (losses) and unrealized appreciation (depreciation) on derivatives as included in Other noninterest income in the Consolidated Statements of Income for the three and nine months ended September 30, 2025 and 2024:
Three Months EndedNine Months Ended
September 30, 2025September 30, 2024September 30, 2025September 30, 2024
Contract TypeUnrealized Appreciation/(Depreciation)Realized Gain/(Loss)Unrealized Appreciation/(Depreciation)Realized Gain/(Loss)Unrealized Appreciation/(Depreciation)Realized Gain/(Loss)Unrealized Appreciation/(Depreciation)Realized Gain/(Loss)
5-year Treasury Futures
$1,054 $(1,202)$356 $(2,015)$(482)$(3,393)$562 $(1,527)
Collateral posted with our futures counterparty is segregated in the Company’s books and records. Historically, the Company’s counterparty has held cash margin as collateral for derivatives, which is included in restricted cash in the consolidated balance sheets. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. The Company is required to post initial margin and daily variation margin for interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.

NOTE 13—COMMITMENTS AND CONTINGENCIES:
Operating and Employment Commitments
The Company leases office space and other office equipment in several states under operating lease agreements which expire at various dates through 2030. Those office space leases which are for more than one year generally contain scheduled rent increases or escalation clauses. In addition, during 2025, the Company entered into one-year employment agreements with its named executive officers.
Lease Terminations

On April 10, 2025, NSBF entered into a Lease Termination and Surrender Agreement with respect to office space leased at 1981 Marcus Avenue, Lake Success, NY 11042, which lease had an expiration date of March 31, 2027, to terminate the lease effective April 30, 2025. In addition, on April 11, 2025, NSBF entered into an Early Termination Agreement to terminate an additional lease for office space at 1985 Marcus Avenue, Lake Success, NY 11042, which lease had an expiration date of March 31, 2027, to terminate the lease effective April 11, 2025.
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The following summarizes the Company’s obligations and commitments, as of September 30, 2025 for future minimum cash payments required under operating lease and employment agreements:
YearOperating Leases
Employment Agreements1
Total
2025$167 $702 $869 
2026499 702 1,201 
2027329 — 329 
2028242 — 242 
2029249 — 249 
Thereafter2,237 — 2,237 
Total$3,723 $1,404 $5,127 
1    Employment agreements with the Company’s named executive officers

Legal Matters

The Company and its subsidiaries are routinely subject to actual or threatened legal proceedings, including litigation and regulatory matters, arising in the ordinary course of business. Litigation matters range from individual actions involving a single plaintiff to class action lawsuits and can involve claims for substantial or indeterminate alleged damages or for injunctive or other relief. Regulatory investigations and enforcement matters may involve formal or informal proceedings and other inquiries initiated by various governmental agencies, law enforcement authorities, and self-regulatory organizations, and can result in fines, penalties, restitution, changes to the Company’s business practices, and other related costs, including reputational damage. At any given time, these legal proceedings are at varying stages of adjudication, arbitration, or investigation, and may relate to a variety of topics.

Assessment of exposure that could result from legal proceedings is complex because these proceedings often involve inherently unpredictable factors, including, but not limited to, the following: whether the proceeding is in early stages; whether damages or the amount of potential fines, penalties, and restitution are unspecified, unsupported, or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions; whether discovery or other investigation has begun or is not complete; whether material facts may be disputed or unsubstantiated; whether meaningful settlement discussions have commenced; and whether the matter involves class allegations. As a result of these complexities, the Company may be unable to develop an estimate or range of loss.

The Company evaluates legal proceedings based on information currently available, including advice of counsel. The Company establishes accruals for those matters, pursuant to ASC 450, when a loss is considered probable and the related amount is reasonably estimable. While the final outcomes of legal proceedings are inherently unpredictable, management is currently of the opinion that the outcomes of pending and threatened matters will not have a material effect on the Company’s business, consolidated financial position, results of operations or cash flows as a whole.

As available information changes, the matters for which the Company is able to estimate, as well as the estimates themselves, will be adjusted accordingly. The Company’s estimates are subject to significant judgment and uncertainties, and the matters underlying the estimates will change from time to time. In the event of unexpected future developments, it is possible that an adverse outcome in any such matter could be material to the Company’s business, consolidated financial position, results of operations, or cash flows as a whole for any particular reporting period of occurrence.

In addition. as a result of a litigation brought by the Federal Trade Commission (the “FTC”) in October 2012, NMS voluntarily entered into, and continues to operate under, a permanent injunction with respect to certain of its business practices.

Unfunded Commitments

At September 30, 2025, the Company had $106.4 million of unfunded commitments consisting of $29.1 million in connection with its SBA 7(a) loans, $69.8 million in connection with its SBA 504 loans, and $7.5 million relating to commercial and industrial loans. The Company funds these commitments from the same sources it uses to fund its other loan commitments.

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NOTE 14—SHAREHOLDERS EQUITY:

Preferred Stock

Series A Preferred Stock

On February 3, 2023, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Patriot Financial Partners IV, L.P., and Patriot Financial Partners Parallel IV, L.P. (collectively, “Patriot”) in respect of 20 thousand shares of the Company’s Series A Convertible Preferred Stock, par value $0.02 per share (the “Series A Preferred Stock”), in a private placement transaction. The aggregate purchase price was $20.0 million. Each share of Series A Preferred Stock was issued at a price of $1.0 thousand per share and was convertible at Patriot’s option into 47.54 shares of the Company’s Common Stock. The Company had not issued preferred stock prior to February 3, 2023.

On September 16, 2025, the Company entered into a Securities Purchase and Exchange Agreement (the “Purchase and Exchange Agreement”) with Patriot, pursuant to which Patriot exchanged (i) the 20 thousand outstanding shares of the Company’s Series A Preferred Stock originally issued to Patriot for an aggregate purchase price of $20.0 million and (ii) $10 million in cash, for 2,307,692 shares of the Company’s Common Stock (the “Shares”). Patriot is subject to restrictions on transferring the Shares for two years following the date of the Purchase and Exchange Agreement without the Company’s consent, subject to certain customary exceptions.

Series B Preferred Stock

On August 20, 2025, the Company closed an offering of 2,000,000 depository shares (the “Depository Shares”), each representing a 1/40th interest in a share of the Company’s 8.500% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent to $25.00 per Depositary Share). The offering generated approximately $48.357 million in net proceeds to the Company. The newly issued Series B Preferred Stock will pay (and the holders of the Depository Shares will correspondingly receive) a non-cumulative 8.500% per annum cash dividend (payable quarterly when, as and if declared by the Company’s Board, on January 1, April 1, July 1 and October 1 of each year, beginning on October 1, 2025) through October 1, 2030, at which time the dividend rate will reset based on the five-year US treasury rate on the relevant determination date plus a fixed spread and thereafter will reset on the fifth anniversary of the preceding reset date, with the dividend rate determined in the same manner. The Depository Shares are listed on the Nasdaq Global Market® under the ticker symbol “NEWTP.” The Company has not subsequently issued any preferred stock.

Warrants for Common Stock

On February 3, 2023, pursuant to the Securities Purchase Agreement, the Company issued warrants to Patriot to purchase, in the aggregate, 47.54 thousand shares of Common Stock for $21.03 per share. The Warrants are exercisable in whole or in part until the ten year anniversary of the entry into the Securities Purchase Agreement and may be exercised for cash or on a “net share” basis, with the number of shares withheld determined based on the closing price of the Common Stock on the date of such exercise. Warrants are included in Accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition.

Common Stock

ATM Program

The Company’s shelf registration statement on Form S-3 was declared effective by the SEC on July 27, 2023. On November 17, 2023, the Company entered into an ATM equity distribution agreement (the “Original ATM Equity Distribution Agreement”). The Original ATM Equity Distribution Agreement provided that the Company may offer and sell up to 3.0 million shares of Common Stock from time to time through the placement agents thereunder (the “ATM Program”). The Original ATM Equity Distribution Agreement was amended and restated on June 6, 2025 (the “Amended and Restated Equity Distribution Agreement”). The Amended and Restated Equity Distribution Agreement provides that the Company may offer and sell up to 5.0 million shares of Common Stock from time to time through the placement agents thereunder (inclusive of shares of Common Stock sold under the Original ATM Distribution Agreement) and added certain additional placement agents. The Company may, subject to market conditions, engage in activity under the ATM Program.

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The following table summarizes the total shares sold and net proceeds received under the ATM Program:

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Shares sold425 — 425 1,100 
Net weighted average price per share$12.22 $— $12.22 $12.56 
Net proceeds$5,090 $— $5,090 $13,818 
Placement agent fees paid
$104 $— $104 $282 

We used the net proceeds for funding investments in accordance with our investment objective and strategies and for general corporate purposes including repaying outstanding indebtedness and other general corporate purposes.

Stock and Debt Repurchase Programs

On November 1, 2024, the Company’s Board of Directors approved a new stock repurchase program granting the Company authority to repurchase up to 1.0 million shares of Company common stock during the following twelve months. The actual timing and amount of any repurchases under the plan will be determined by the Company in its discretion, and will depend on a number of factors, including market conditions, applicable legal requirements, the Company's capital needs and whether there is a better alternative use of capital. The Company has no obligation to repurchase any amount of its common stock under its new stock repurchase program.

The following table summarizes the total Common Shares repurchased and net proceeds received under the stock repurchase program:
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Shares repurchased
— — 16 — 
Net weighted average price per share$— $— $10.42 $— 
Net proceeds$— $— $167 $— 

In addition, on September 11, 2025, the Board approved a debt repurchase program granting the Company authority to repurchase up to $5.0 million aggregate principal amount of the Company’s 2029 Notes during the following six months. The actual timing and amount of any repurchases under the plan will be determined by the Company in its discretion, and will depend on a number of factors, including market conditions, applicable legal requirements, the Company's capital needs and whether there is a better alternative use of capital. The Company has no obligation to repurchase any amount of its debt securities under this debt repurchase program. Pursuant to the debt repurchase program, the Company repurchased 2,700 shares of its 2029 8.50% Notes on September 22, 2025.
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Dividends and Distributions

Preferred Stock

The Company’s dividends and distributions on its Preferred Stock are recorded on the declaration date. The following table summarizes dividend declarations and distributions on the Series A and Series B Preferred Stock during the nine months ended September 30, 2025 and 2024:

Date Declared
Series1
Record DatePayment DateAmount Per ShareCash Distribution
Nine months ended September 30, 2025
March 31, 2025
A
March 30, 2025April 1, 2025$20.00 $400 
June 30, 2025
A
June 30, 2025July 1, 2025$20.00 $400 
September 29, 2025
B
September 29, 2025October 1, 2025$9.44 
2
$472 
2
Nine months ended September 30, 2024
March 19, 2024
A
March 28, 2024April 1, 2024$20.00 $400 
June 27, 2024
A
June 28, 2024July 1, 2024$20.00 $400 
September 16, 2024
A
September 30, 2024October 1, 2024$20.00 $400 
1    Series A Preferred Stock exchanged for Common Stock and cash on September 16, 2025.    
2    Prorated for the initial dividend period from the date of the issuance of the Series B preferred stock on August 20, 2025.

Common Stock

The Company’s dividends and distributions on the Common Stock are recorded on the declaration date. Effective December 8, 2023, the Company terminated the DRIP. The following table summarizes the Company’s dividend declarations and distributions, including dividend shares issued on vested restricted stock awards, during the nine months ended September 30, 2025 and 2024:
Record DatePayment DateAmount Per ShareCash Distribution
Dividend Shares Issued on Unvested RSAs
Date Declared#$
Nine months ended September 30, 2025
March 31, 2025April 15, 2025April 30, 2025$0.19 $4,835 35 $367 
June 25, 2025July 9, 2025July 21, 2025$0.19 $4,836 — $— 
September 30, 2025October 14, 2025October 24, 2025$0.19 $5,387 3 $54 
Nine months ended September 30, 2024
March 19, 2024April 1, 2024April 15, 2024$0.19 $4,617 6 $71 
June 27, 2024July 9, 2024July 19, 2024$0.19 $4,827 5 $78 
September 16, 2024October 10, 2024October 21, 2024$0.19 $4,837 8 $114 

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NOTE 15—EARNINGS PER SHARE:

Basic and diluted earnings per share are computed based on the weighted average number of shares outstanding during each period. Diluted earnings per share reflects the potential dilution that could occur upon the exercise of stock options, to the extent outstanding, or upon the vesting of restricted stock grants, any of which would result in the issuance of Common Stock that would then share in the net income of the Company.
Three Months Ended
September 30,		Nine Months Ended
September 30,
2025202420252024
Basic earnings per share:
Net income available to common shareholders$17,429 $11,534 $39,699 $31,329 
Weighted-average basic shares outstanding25,600 25,425 25,310 24,773 
Basic earnings per share$0.68 $0.45 $1.57 $1.26 
Diluted earnings per share:
Net income, for diluted earnings per share$17,429 $11,534 $39,699 $31,329 
Add: Preferred dividends on dilutive Series A convertible preferred stock¹— 400 — — 
Net income, for diluted earnings per share$17,429 $11,934 $39,699 31,329 
Total weighted-average basic shares outstanding25,600 25,425 25,310 24,773 
Add effect of dilutive restricted stock awards²443 213 458 151 
Add effect of dilutive Series A convertible preferred stock³— 951 — — 
Total weighted-average diluted shares outstanding4
26,043 26,589 25,768 24,924 
Diluted earnings per share$0.67 $0.45 $1.54 $1.26 
Anti-dilutive warrants, restricted stock awards, and Series A convertible preferred stock 48 48 48 998 
1    For periods presented other than the three months ended September 30, 2024, the Series A convertible preferred stock was anti-dilutive and, therefore, the preferred dividends have not been added back to the numerator of Net income, for diluted earnings per share.
2    Incremental diluted shares from restricted stock awards under the treasury stock method.
3    Incremental diluted shares from Series A convertible preferred stock under the treasury stock method. The dilutive effect on common shares under the if-converted method of the Series A convertible preferred stock have been added back to the denominator in calculating diluted earnings per share for the three months ended September 30, 2024.
4    For the three and nine months ended September 30, 2025 and September 30, 2024, the warrants were not included in the diluted share count because the results would have been anti-dilutive under the if-converted method.

NOTE 16—BENEFIT PLANS:
Defined Contribution Plan
The Company’s employees participate in a defined contribution 401(k) plan (the “Plan”) adopted in 2004 which covers substantially all employees based on eligibility. The Plan is designed to encourage savings on the part of eligible employees and qualifies under Section 401(k) of the Code. Under the Plan, eligible employees may elect to have a portion of their pay, including overtime and bonuses, reduced each pay period, as pre-tax contributions up to the maximum allowed by law. The Company may elect to make a matching contribution equal to a specified percentage of the participant’s contribution, on their behalf as a pre-tax contribution.

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Stock-based Compensation Plans

Restricted Stock Awards

The Company accounts for its stock-based compensation plan using the fair value method, as prescribed by ASC 718, Compensation—Stock Compensation. Accordingly, for restricted stock awards, the Company measures the grant date fair value based upon the market price of its Common Stock on the date of the grant and amortizes the fair value of the awards as stock-based compensation expense over the requisite service period, which is generally the vesting term.
 
The Compensation, Corporate Governance and Nominating Committee of the Board approves the issuance of awards of restricted stock to employees and directors pursuant to the 2023 Stock Incentive Plan, which was approved by the Board in April 2023 and the Company’s shareholders on June 14, 2023. No new awards may be granted under the 2015 Stock Incentive Plan, which was terminated by the Board in April 2023. The following table summarizes the restricted stock issuances under the 2015 and 2023 Stock Incentive Plans, net of shares forfeited, if any:

2023 Plan1
2015 Plan
Restricted Stock authorized under the plan2
3.0 million1.5 million
Net restricted stock (granted)/forfeited during:
Year ended December 31, 2021 and prior—(438)
Year ended December 31, 2022—(251)
Year ended December 31, 2023(82)28
Year ended December 31, 2024(497)—
Nine months ended September 30, 202533—
Total net restricted stock (granted)/forfeited(546)(661)
1    The 2023 Stock Incentive Plan provides for an initial share reserve of up to 3.0 million shares of Common Stock.
2    No stock options were granted under the 2015 or 2023 Stock Incentive Plans.

Awards of restricted stock granted under the 2015 and 2023 Stock Incentive Plans generally vest over a one- to three-year periods from the grant date; awards of restricted stock granted under the 2023 Stock Incentive Plan to non-employee directors generally vest over a one-year period. The grant date fair value is expensed over the service period, starting on the grant date.

Details of the Company’s outstanding shares related to restricted stock awards as of September 30, 2025 and December 31, 2024 are outlined below:

September 30, 2025December 31, 2024
Shares outstanding related to grants of restricted stock awards508771
Weighted average grant date fair value of awards$12.95$14.51
Additional shares outstanding related to dividends on awards4859

As of September 30, 2025 and December 31, 2024, the Company’s total unrecognized compensation expense related to unvested shares of restricted stock granted was as follows:

September 30, 2025December 31, 2024
Unrecognized compensation expense on unvested awards$2,560$5,929
Weighted-average period of unrecognized compensation expense1.2 years1.0 year
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Employee Stock Purchase Plan (ESPP)

On June 14, 2023, the Company's stockholders approved the ESPP. The initial aggregate number of shares of Common Stock that may be purchased under the ESPP will not exceed 0.2 million shares. Under the terms of the ESPP, employees may authorize the withholding of up to 15% of their eligible compensation to purchase our shares of Common Stock, not to exceed $25 thousand of Common Stock for any calendar year. The purchase price per shares acquired under the ESPP will never be less than 85% of the fair market value of the lesser of our Common Stock on the offering date or purchase date. The Compensation, Corporate Governance and Nominating Committee of our Board, in its discretion, may terminate the ESPP at any time with respect to any shares for which options have not been granted and has the right to amend the ESPP with stockholder approval within 12 months before or after the adoption of the amendment. The difference between the Common Stock’s fair value and the employee’s discounted purchase price is expensed at the time of purchase.

The following table summarizes the Company’s ESPP activity from inception through September 30, 2025:

Nine Months Ended September 30, 2025
Year Ended December 31, 2024
Offering Period
Total
Offering Period
Total
Commencement date
4/1/20254/1/202510/1/202410/1/20244/1/202410/1/2023
End date
9/15/20256/15/20253/15/202512/15/20249/15/20243/15/2024
Shares purchased
6 9 4 19 5 10 5 20 
Weighted average share price
$10.77 $9.40 $10.97 $10.16 $11.03 $10.21 $9.83 $10.32 
Total purchased, net of discount
$62 $80 $48 $190 $55 $101 $51 $207 

The ESPP share activity is as follows:
Shares
ESPP shares authorized under the plan200 
ESPP shares purchased during:
Year ended December 31, 2023 (4)
Year ended December 31, 2024(20)
Period ended September 30, 2025(19)
Available for future purchases, September 30, 2025157 

The Company’s total stock-based compensation expense included within Salaries and employee benefits expense in the Consolidated Statements of Income for the three and nine months ended September 30, 2025 and 2024 is summarized below:

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Restricted stock awards$611 $913 $3,972 $2,244 
ESPP8 5 36 17 
Total compensation cost recognized for stock-based compensation plans$619 $918 $4,008 $2,261 

NOTE 17—INCOME TAXES:

Effective Tax Rate

The effective tax rate was 26.16% and 27.62% for the nine months ended September 30, 2025 and September 30, 2024, respectively. The effective tax rate differs from the federal tax rate of 21% for the nine months ended September 30, 2025, due primarily to the recognition of the difference in basis in the Company’s investment in NTS and state taxes. The effective tax rate differs from the federal tax rate of 21% for the nine months ended September 30, 2024, due primarily due to state taxes.

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The effective tax rate was 28.58% and 30.03% for the three months ended September 30, 2025 and September 30, 2024, respectively. The effective tax rate differs from the federal tax rate of 21% for the three months ended September 30, 2025 and September 30, 2024 primarily due to state taxes.

NOTE 18—SEGMENTS:

The Company's management reporting process measures the performance of its operating segments based on internal operating structure, which is subject to change from time to time. The Company's segment reporting process begins with the assignment of all loans directly to the segments where these products are originated and/or serviced. All deposit accounts are allocated to the Banking segment as our wholly owned FDIC insured depository is included within the Banking segment. Equity capital is assigned to each segment based on the risk profile of their assets and liabilities. With the exception of goodwill, which is assigned a 100% weighting, equity capital allocations ranged from 0% to 25% during the year. Any excess or deficient equity not allocated to segments based on risk is assigned to the Corporate & Other segment.

Net interest income, provision for credit losses, and non-interest expense amounts are recorded in their respective segments to the extent the amounts are directly attributable to those segments. The net income amount for each reportable segment is further derived by the use of expense allocations. Certain expenses not directly attributable to a specific segment are allocated across all segments based on key metrics, such as number of employees. These types of expenses include information technology, operations, human resources, finance, risk management, credit administration, legal, and marketing.

The assignment and allocation methodologies used in the segment reporting process discussed above change from time to time as systems are enhanced, methods for evaluating segment performance or product lines change or as business segments are realigned.

The Company operates four reportable segments for management reporting purposes with their operating and financial results reviewed by the chief operating decision maker (“CODM”), which is the Chief Executive Officer of the Company. The CODM assesses overall segment performance based on pre-tax income and uses this metric to allocate resources for each segment, focusing on budgeting and forecasting. The Company has four segments, as discussed below:

Banking

Newtek Bank originates, services and sells SBA 7(a) loans in a similar manner to NSBF’s historic business model (see Non-Bank Lending below) and originates and services SBA 504 loans, C&I loans, CRE loans and ABL loans. In addition, Newtek Bank offers depository services.

Alternative Lending

Alternative Lending includes NALH (Newtek ALP Holdings) and its subsidiaries. The Company has originated loans under its Alternative Lending Program (ALP) since 2019. Prior to July 1, 2024, the Company originated ALP loans with the intent to sell to a JV. While the Company may continue to source JV partners to participate in the ALP, the Company’s subsidiary Newtek ALP Holdings (NALH) currently originates ALP loans designated as HFI. The Company does not expect any significant changes to the underwriting or terms of loans in its ALP.

NSBF

NSBF relates to NSBF’s legacy portfolio of SBA 7(a) loans held outside Newtek Bank; no new loan origination activity takes place. A material portion of NSBF’s legacy portfolio of SBA 7(a) loans reside in three securitization trusts.
Payments

Payments includes NMS, POS and Mobil Money. NMS markets credit and debit card processing services, check approval services, processing equipment, and software and:

–Assist merchants with initial installation of equipment and on-going service, as well as any other special processing needs that they may have.
–Handles payment processing for Mobil Money’s merchant portfolio of taxi cabs and related licensed payment processing software.
–POS is a provider of a cloud based Point of Sale (POS) system for a variety of restaurant, retail, assisted living, parks and golf course businesses, which provides not only payments and purchase technology solutions, but also inventory, customer management, reporting, employee time clock, table and menu layouts, and ecommerce solutions as the central operating system for an SMB.

F-58
Corporate and Other

The information provided under the caption “Corporate and Other” represents operations not considered to be reportable segments and/or general operating expenses of the Company, and includes the parent company, other non-bank subsidiaries including NIA and PMT, and elimination adjustments to reconcile the results of the operating segments to the condensed consolidated financial statements prepared in conformity with GAAP.

Former Reportable Segment

Technology

NTS provided website hosting, web design and development, dedicated server hosting, cloud hosting, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services for commercial clients. As a result of commitments made to the Federal Reserve in connection with the Acquisition, the Company divested of NTS on January 2, 2025. As a result of the Company’s completion of the NTS Sale, Technology is no longer be reported as a reportable segment. See NOTE 4—INVESTMENTS: Intelligent Protection Management Corp.


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The following tables provide financial information for the Company's segments:

As of and for the nine months ended September 30, 2025
Banking
Alternative Lending
NSBFPayments
Corporate & Other
Consolidated
Segment
Elim
SegmentElimSegmentElimSegmentElimSegmentElim
Interest income$74,811 $(7)$19,566 $(69)$19,239 $(372)$1,872 $(1,829)$933 $(642)$113,502 
Interest expense30,943 (616)6,141 — 9,521 — 2,088 (49)25,318 (2,249)71,097 
Net interest income/(loss)
43,868 609 13,425 (69)9,718 (372)(216)(1,780)(24,385)1,607 42,405 
Provision for loan credit losses30,334 — — — — — — — — — 30,334 
Net interest income after provision for loan credit losses13,534 609 13,425 (69)9,718 (372)(216)(1,780)(24,385)1,607 12,071 
Noninterest income105,339 (21,734)55,537 — (7,491)— 35,881 (1,910)73,788 (70,349)169,061 
Electronic payment processing expense— — — — — — 14,333 (1,160)131 — 13,304 
Salaries and employee benefits expense43,339 (3,463)859 (859)285 188 6,514 (1,007)13,428 5,140 64,424 
Professional services expense4,049 — 216 — 1,447 — 329 — 5,491 — 11,532 
Other loan origination and maintenance expense19,160 (11,136)5,483 (3,748)11,449 (6,776)— — 100 (64)14,468 
Depreciation and amortization129 — — — 155 — 265 — — — 549 
Loss on extinguishment of debt— — — — — — 179 — — — 179 
Other general and administrative costs10,564 (316)1,959 (43)2,503 (3)1,492 (261)5,768 (474)21,189 
Income before taxes
41,632 (6,210)60,445 4,581 (13,612)6,219 12,553 (1,262)24,485 (73,344)55,487 
Income tax expense (benefit)10,766 (10,766)— — — — (3)— 3,753 10,766 14,516 
Net income
$30,866 $4,556 $60,445 $4,581 $(13,612)$6,219 $12,556 $(1,262)$20,732 $(84,110)$40,971 
Assets$1,520,476 $(31,544)$625,297 $(152,070)$415,364 $(48,251)$120,028 $(98,083)$762,879 $(714,997)$2,399,099 
Goodwill & intangible assets
$820 $— $— $13,813 $— $14,633 
Amortization of intangible assets
$129 $— $— $— $— $129 

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As of and for the nine months ended September 30, 2024
Banking
Alternative Lending
TechnologyNSBFPayments
Corporate & Other
Consolidated
SegmentElimSegmentElimSegmentElimSegmentElimSegmentElimSegmentElim
Interest income$48,884 $— $9,811 $(10)$3 $(3)$28,894 $(315)$1,776 $(1,741)$1,817 $(1,425)$87,691 
Interest expense20,635 (469)2,855 — — — 16,733 — 2,289 (60)19,660 (2,965)58,678 
Net interest income/(loss)
28,249 469 6,956 (10)3 (3)12,161 (315)(513)(1,681)(17,843)1,540 29,013 
Provision for loan credit losses16,742 — — — — — — — — — — — 16,742 
Net interest income after provision for loan credit losses11,507 469 6,956 (10)3 (3)12,161 (315)(513)(1,681)(17,843)1,540 12,271 
Noninterest income100,326 (20,389)31,555 — 19,701 (5,232)(15,475)— 39,090 (3,044)45,091 (38,385)153,238 
Technology services expense — — — — 8,846 (222)— — — — — — 8,624 
Electronic payment processing expense— — — — — — — — 15,889 (912)— — 14,977 
Salaries and employee benefits expense35,134 (1,859)— — 6,636 — 381 341 5,659 11 12,635 1,507 60,445 
Professional services expense2,769 — 127 — 335 — 1,664 — 522 — 5,820 — 11,237 
Other loan origination and maintenance expense14,077 (10,011)4,117 (2,633)17 — 12,065 (8,460)— — 290 (71)9,391 
Depreciation and amortization138 — — — 1,062 — 73 — 264 — 33 — 1,570 
Other general and administrative costs9,240 (1,909)120 — 2,860 (204)463 (9)2,070 (1,313)5,148 (2,140)14,326 
Income before taxes
50,475 (6,141)34,147 2,623 (52)(4,809)(17,960)7,813 14,173 (2,511)3,322 (36,141)44,939 
Income tax expense (benefit)15,136 (15,136)— — — — — — — — (2,726)15,136 12,410 
Net income
$35,339 $8,995 $34,147 $2,623 $(52)$(4,809)$(17,960)$7,813 $14,173 $(2,511)$6,048 $(51,277)$32,529 
Other Segment Disclosures:
Assets$935,319 $(22,719)$336,605 $(116,051)$21,919 $(1,400)$536,000 $(82,082)$62,710 $(36,007)$651,769 $(611,893)$1,674,170 
Goodwill & intangible assets
$980 $— $— $— $13,814 $— $14,794 
Amortization of intangible assets
$593 $— $— $— $— $— $593 
                                            

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The following tables provide financial information for the Company's segments:

As of and for the three months ended September 30, 2025
Banking
Alternative Lending
NSBFPayments
Corporate & Other
Consolidated
Segment
Elim
SegmentElimSegmentElimSegmentElimSegmentElim
Interest income$27,720 $(3)$5,529 $(35)$5,889 $(115)$737 $(720)$219 $(127)$39,094 
Interest expense11,154 (217)2,110 — 2,974 — 806 (17)8,496 (761)24,545 
Net interest income/(loss)
16,566 214 3,419 (35)2,915 (115)(69)(703)(8,277)634 14,549 
Provision for loan credit losses7,712 — — — — — — — — — 7,712 
Net interest income after provision for loan credit losses8,854 214 3,419 (35)2,915 (115)(69)(703)(8,277)634 6,837 
Noninterest income34,848 (7,424)22,079 — (2,208)— 11,853 (636)27,346 (25,470)60,388 
Electronic payment processing expense— — — — — — 4,767 (386)47 1 4,429 
Salaries and employee benefits expense14,140 (1,152)203 (204)43 (44)2,013 (289)3,574 1,689 19,973 
Professional services expense1,482 — 50 — 480 — 147 — 1,634 — 3,793 
Other loan origination and maintenance expense7,056 (3,677)2,529 (1,567)4,724 (2,155)— — (125)(21)6,764 
Depreciation and amortization43 — — — — — 86 — — — 129 
Loss on extinguishment of debt— — — — — — 179 — — — 179 
Other general and administrative costs3,286 (119)398 — 344 — 380 (79)2,833 (151)6,892 
Income before taxes
17,695 (2,262)22,318 1,736 (4,884)2,084 4,212 (585)11,106 (26,354)25,066 
Income tax expense (benefit)5,121 — — — — — — — 2,044 — 7,165 
Net income
$12,574 $(2,262)$22,318 $1,736 $(4,884)$2,084 $4,212 $(585)$9,062 $(26,354)$17,901 
Assets$1,520,476 $(31,544)$625,297 $(152,070)$415,364 $(48,251)$120,028 $(98,083)$762,879 $(714,997)$2,399,099 
Goodwill & intangible assets
$820 $— $— $13,813 $— $14,633 
Amortization of intangible assets
$43 $— $— $— $— $43 

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As of and for the three months ended September 30, 2024
Banking
Alternative Lending
TechnologyNSBFPayments
Corporate & Other
Consolidated
SegmentElimSegmentElimSegmentElimSegmentElimSegmentElimSegmentElim
Interest income$18,820 $— $3,528 $(5)$2 $(2)$8,871 $(103)$612 $(601)$594 $(445)$31,271 
Interest expense7,603 (158)648 — — — 5,079 — 730 (16)7,386 (982)20,290 
Net interest income/(loss)
11,217 158 2,880 (5)2 (2)3,792 (103)(118)(585)(6,792)537 10,981 
Provision for loan credit losses6,928 — — — — — — — — — — — 6,928 
Net interest income after provision for loan credit losses4,289 158 2,880 (5)2 (2)3,792 (103)(118)(585)(6,792)537 4,053 
Noninterest income35,424 (7,036)15,237 — 5,494 (2,008)(8,845)— 12,469 (498)21,299 (19,685)51,851 
Electronic payment processing expense— — — — — — — — 4,730 (292)— — 4,438 
Salaries and employee benefits expense11,337 (628)— — 2,123 — 117 113 1,665 — 3,908 514 19,149 
Technology services expense— — — — 1,832 (36)— — — — — — 1,796 
Professional services expense853 — 25 — 160 — 679 — 156 — 2,056 — 3,929 
Other loan origination and maintenance expense5,207 (3,683)1,666 (979)11 — 4,509 (2,672)— — 96 (23)4,132 
Depreciation and amortization44 — — — 362 — 25 — 80 — 6 — 517 
Other general and administrative costs3,026 (812)49 — 908 (71)407 (3)665 (450)2,008 (841)4,886 
Income before taxes
19,246 (1,755)16,377 974 100 (1,903)(10,790)2,459 5,055 (341)6,433 (18,798)17,057 
Income tax expense (benefit)5,760 (11,101)— — — — — — — — (637)11,101 5,123 
Net income
$13,486 $9,346 $16,377 $974 $100 $(1,903)$(10,790)$2,459 $5,055 $(341)$7,070 $(29,899)$11,934 
Other Segment Disclosures:
Assets$935,319 $(22,719)$336,605 $(116,051)$21,919 $(1,400)$536,000 $(82,082)$62,710 $(36,007)$651,769 $(611,893)$1,674,170 
Goodwill & intangible assets
$980 $— $— $— $13,814 $— $14,794 
Amortization of intangible assets
$192 $— $— $— $— $— $192 

F-63
NOTE 19—SUBSEQUENT EVENTS:

Note Purchase and Exchange

On October 21, 2025, the Company entered into agreements with two institutional investors that were existing holders of the Company’s 2026 Notes to exchange $20.0 million in total principal amount of the Company’s 2026 Notes held by such investors for an equal principal amount of the Company’s 2030 Notes. One of the investors also agreed to purchase $2.0 million in newly issued additional principal amount of the Company’s 2030 Notes. The transactions were conducted pursuant to exemptions from the registration requirements of the Securities Act.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements

The matters discussed in this report, as well as in future oral and written statements by Company management that are forward-looking statements, are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our industry, our beliefs, and our assumptions. Words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or variations of these words and similar expressions are intended to identify forward-looking statements. Important assumptions include our ability to originate new investments, achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, including recent economic and market events and unrelated bank failures and declines in depositor confidence in certain types of depository institutions, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans or objectives will be achieved. The forward-looking statements contained in this report, including the documents we incorporate by reference, involve risks and uncertainties, including statements as to:
•our future operating results;
•our business prospects and the prospects of our subsidiaries;
•our contractual arrangements and relationships with third parties;
•the dependence of our future success on the general economy and its impact on the industries in which we and our borrowers operate;
•the ability of our business to achieve its objectives;
•the impact of a protracted decline in the liquidity of credit markets on our business;
•the adequacy of our cash resources and working capital;
•our ability to operate as a financial holding company and our ability to operate our subsidiary Newtek Bank, a national bank regulated and supervised by the OCC, and the increased compliance and other costs associated with such operations;
•our ability to adequately manage liquidity, deposits, capital levels and interest rate risk;
•the timing of cash flows, if any, from the operations of our subsidiaries;

These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in any and all of the forward-looking statements, including without limitation:

•an economic downturn, which could impair our subsidiaries’ ability to continue to operate or repay their borrowings, which could adversely affect our results;
•a contraction of available credit and/or an inability to access the equity markets could impair our lending and business activities;
•impacts to financial markets and the global macroeconomic and geopolitical environment, including higher inflation, tariffs and their impacts;
•higher interest rates and the impacts on macroeconomic conditions and our funding costs;
•changes to the SBA 7(a) loan program, including recent revisions to SBA Standard Operating Procedure (“SOP”) as well as the impact of the current Federal government shutdown on the SBA, including the SBA 7(a) Program and SBA 504 program, each of which are currently frozen as a result of the current Federal government shutdown and could materially and adversely affect Newtek Bank’s lending business; and
•the risks, uncertainties and other factors we identify in “Risk Factors” and elsewhere in this report and in our filings with the SEC, including the documents we incorporate by reference.



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The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this report. In addition to historical information, the following discussion and other parts of this report contain forward-looking information that involves risks and uncertainties. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include the ability of Newtek Bank to originate loans under the SBA 7(a) program, maintain PLP status, sell SBA guaranteed portions of SBA 7(a) loans at premiums and grow deposits; our ability to originate new loans; our subsidiaries’ ability to generate revenue and obtain and maintain certain margins and levels of profitability; and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report, including the documents that we incorporate by reference herein, should not be regarded as a representation by us that our plans and objectives will be achieved. Our actual results could differ materially from those anticipated by such forward-looking information due to the factors discussed under Part II “Item 1A. Risk Factors” of this quarterly report on Form 10-Q and “Item 1A. Risk Factors” of our 2024 Form 10-K, and in any subsequent filings we have made with the SEC that are incorporated by reference into this report.

You should not place undue reliance on these forward-looking statements, which apply only as of the date of this report. And while we believe such information forms, or will form, a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely on these statements. Any forward-looking statements made by or on behalf of the Company speak only as to the date they are made, and the Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made, except as required by applicable law.

Executive Overview

We are a financial holding company owning Newtek Bank - a branchless OCC nationally chartered bank. In 2023, we converted to a financial holding company from a BDC and a non-bank lender (see below). Our target market is owners and prospective owners of SMBs and our services are offered online and in some cases delivered and fulfilled by our staff via video and voice calls. We offer lending products, FDIC insured deposit products and services, payments processing, payroll services and insurance brokerage services. We source our business through our NewtekOne.com web site, our alliance partner network and our marketing database, which is facilitated through our patented NewTracker® platform. Our loan products include SBA 7(a), ALP, SBA 504, and traditional C&I and CRE bank loans. Our deposit products primarily include consumer high yield savings accounts, high yield certificates of deposit, zero-fee business checking, and business money market accounts. We offer business and financial solutions under the Newtek® and NewtekOne® brands to the independent business owner (SMB) market.

Our process to extend credit to borrowers begins with technology, but finishes with credit committee approval. We record CECL reserves on loans held for investment at amortized cost, which for unguaranteed SBA 7(a) loans exceeds 6%. For SBA7(a) loans, we hold the unguaranteed portion and sell portions guaranteed by the SBA, within approximately ninety days of origination (or we may hold guaranteed portions for longer periods), for premiums that have historically exceeded 10%, depending on loan characteristics and market conditions. Unlike traditional financial and bank holding companies, the majority of our income is driven and influenced by noninterest income, specifically gains on sales and market value adjustments on loans. We sell certain loans servicing retained, in which case we record a servicing asset that increases our gain on sale and provides a stream of future income to the extent the loan balance continues to be outstanding.

We fund our activities at Newtek Bank primarily through the aforementioned deposit products. We also offer loans outside of our bank (primarily ALP loans that have been funded by our JVs and our non-bank subsidiary Newtek ALP Holdings) that are initially funded with capital and lines of credit and hedged until a sufficient volume is attained at which time the loans are securitized. We are required by law to hold risk retention in securitization transactions, and the majority of our interests in securitizations are designed to absorb first loss on the loans held in the securitization trusts. Historically, we have participated in joint ventures as additional sources of funding and risk diversification for our ALP loans, and these joint ventures have also securitized their loans. We have also continued to actively issue bonds in the public and private capital markets.

We are subject to the regulation and supervision of the Federal Reserve and the Federal Reserve Bank of Atlanta. In addition Newtek Bank is regulated by the OCC and we are required to follow SBA rules and guidelines in the origination, servicing and sale of our SBA loans. Complying with this level of regulation requires investments in technology and process and personnel costs.

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Conversion to a Financial Holding Company

As of January 6, 2023, we became a financial holding company that, together with our consolidated subsidiaries, provide a wide range of business and financial solutions under the Newtek® and NewtekOne® brands to the independent business owner (SMB) market. Effective January 6, 2023, following authorization by our shareholders, we withdrew our previous election to be regulated as a BDC under the 1940 Act. Contemporaneously with withdrawing our election to be regulated as a BDC, on January 6, 2023, we completed the Acquisition of NBNYC, a national bank regulated and supervised by the OCC, pursuant to which we acquired from NBNYC’s shareholders all of the issued and outstanding stock of NBNYC. NBNYC was renamed Newtek Bank and became our wholly owned bank subsidiary. As a result of the Acquisition, we became a financial holding company subject to the regulation and supervision of the Federal Reserve and the Federal Reserve Bank of Atlanta. We no longer qualified as a RIC under Subchapter M of the Code for federal income tax purposes and no longer qualified for accounting treatment as an investment company. As a result, in addition to Newtek Bank and its consolidated subsidiary SBL, the following former portfolio companies and subsidiaries are consolidated non-bank subsidiaries in our financial statements: NSBF; NMS; Mobil Money; NBC; PMT; NIA; TAM; NALH; and POS. In addition, as a result of commitments made to the Federal Reserve, we divested of NTS on January 2, 2025. Refer to NOTE 4—INVESTMENTS: Intelligent Protection Management Corp.

Effective January 13, 2023, we filed Articles of Amendment amending our Charter to change the name of the Company to “NewtekOne, Inc.”

On April 13, 2023, the Company, NSBF and the SBA entered into the Wind-down Agreement, pursuant to which NSBF is winding-down its operations and NSBF’s SBA 7(a) pipeline of new loans was transitioned to Newtek Bank. During this wind-down process, NSBF continues to own the SBA 7(a) loans and PPP Loans currently in its SBA loan portfolio to maturity, liquidation, charge-off or (subject to SBA’s prior written approval) sale or transfer. SBL is servicing and liquidating NSBF’s SBA loan portfolio pursuant to an SBA approved lender service provider agreement. In addition, during the wind-down process, NSBF is subject to minimum capital requirements established by the SBA, required to continue to maintain certain amounts of restricted cash available to meet any obligations to the SBA, has restrictions on its ability to make dividends and distributions to the Company, and remains liable to the SBA for post-purchase denials and repairs on the guaranteed portions of SBA 7(a) loans originated and sold by NSBF, from the proceeds generated by NSBF’s SBA loan portfolio. The Company has guaranteed certain of NSBF’s obligations to the SBA and has funded a $10.0 million account to secure these potential obligations.

Historical Business Regulation and Taxation

Prior to January 6, 2023, we operated as an internally managed non-diversified closed-end management investment company that elected to be regulated as a BDC under the 1940 Act. As a BDC under the 1940 Act we were not permitted to acquire any asset other than assets of the type listed in Section 55(a) of the 1940 Act, which are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets, and we were not permitted to issue senior securities unless the ratio of our total assets (less total liabilities other than indebtedness represented by senior securities) to our total indebtedness represented by senior securities plus preferred stock, if any, was at least 150%. As of December 31 2022, our asset coverage was 169%. Although we are no longer regulated as a BDC, certain covenants in our outstanding 2026 Notes require us to maintain an asset coverage of at least 150% as long as the 2026 Notes are outstanding. See 2024 Form 10-K, “ITEM 1A. RISK FACTORS – Risks Related to our Outstanding Indebtedness – We are subject to 150% asset coverage requirements due to covenants contained in certain of our outstanding debt.”

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Additionally, prior to January 6, 2023, due to our status as a BDC, we elected to be treated as a RIC for U.S. federal income tax purposes, beginning with our 2015 tax year. As an entity electing to be treated as a RIC, we generally did not have to pay U.S. federal income taxes at corporate rates on any ordinary income or capital gains that we distributed to our shareholders as dividends. The Company and its subsidiaries no longer qualify as a RIC for U.S. federal income tax purposes and filed a consolidated U.S. federal income tax return beginning with the 2023 fiscal year. Financial holding companies are subject to federal and state income taxes in essentially the same manner as other corporations. Taxable income is generally calculated under applicable sections of the Internal Revenue Code of 1986, as amended (the “Code”), including Sections 581 through 597 that apply specifically to financial institutions. Some modifications are required by state law and the 2017 tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). Among other things, the Tax Act (i) established a new, flat corporate federal statutory income tax rate of 21%, (ii) eliminates the corporate alternative minimum tax and allowed the use of any such carryforwards to offset regular tax liability for any taxable year, (iii) limited the deduction for net interest expense incurred by U.S. corporations, (iv) allowed businesses to immediately expense, for tax purposes, the cost of new investments in certain qualified depreciable assets, (v) eliminated or reduced certain deductions related to meals and entertainment expenses, (vi) modified the limitation on excessive employee remuneration to eliminate the exception for performance-based compensation and clarified the definition of a covered employee and (vii) limited the deductibility of deposit insurance premiums. There can be no assurance as to the actual effective rate because it will be dependent upon the nature and amount of future income and expenses as well as actual investments generating investment tax credits and transactions with discrete tax effects.

From 2012 through December 31, 2022, NSBF was consistently the largest non-bank SBA 7(a) lender in the U.S. based on dollar volume of loan approvals, and, as of December 31, 2022, was the third largest SBA 7(a) lender in the United States. Currently, Newtek Bank is ranked as the second largest SBA 7(a) lender based on dollar volume of loans approved. Historically, NSBF structured its loans so that it could both sell the government guaranteed portions of SBA 7(a) loans and securitize the unguaranteed portions. This structure generally allowed NSBF to recover its capital and earn excess capital on each loan, typically within a year. Pursuant to the Wind-down Agreement described above, in April 2023 NSBF transitioned its SBA 7(a) loan originations to Newtek Bank and is in the process of winding down its operations and will continue to own the 7(a) Loans and PPP Loans in its SBA loan portfolio to maturity, liquidation, charge-off or (subject to SBA’s prior written approval) sale or transfer.
Additionally, we and our subsidiaries provide a wide range of business and financial solutions to independent business owner relationships, including Business Lending, which includes SBA 7(a) loans, SBA 504 loans, ALP loans, C&I loans, CRE loans and ABL loans; Electronic Payment Processing, personal and commercial lines Insurance Services, and Payroll and Benefits Solutions to independent business owner relationships nationwide across all industries. With the divestiture of NTS, we no longer provide Managed Technology Solutions to our clients, however, we are currently referring our clients to IPM for its offering of Managed Technology Solutions and can earn a finder’s fee pursuant to a referral promotion agreement. We support the operations of our subsidiaries by providing access to our proprietary and patented technology platform, including NewTracker®, our patented prospect management software. We have historically defined independent business owners (SMBs) as companies having revenues of $1 million to $100 million, and we have generally estimated the SMB market to be over 34 million businesses in the United States. We make loans and provide business and financial solutions to the SMB market through our bank and non-bank subsidiaries. In addition, we now offer the Newtek Advantage®, the One Dashboard for All of Your Business Needs®, which provides independent business owners with instant access to a team of NewtekOne business and financial solutions experts in the areas of Business Lending, Electronic Payment Processing, personal and commercial lines Insurance Services and Payroll and Benefits Solutions. Moreover, the Newtek Advantage provides our independent business owner clients with analytics on their businesses, as well as transactional capabilities, including free unlimited document storage, free real-time updated traffic analytics, free real-time credit card processing and chargeback batch information for merchant solutions clients and the ability for PMT clients to make payroll directly from the Newtek Advantage business portal.

The Company has originated loans under its ALP since 2019. These loans have terms between 10 and 25 years, bear fixed interest rates that reset every five years, and have prepayment penalties. The criteria evaluated in underwriting ALP loans and the terms of these loans have been generally consistent over the ALP’s existence. Prior to July 1, 2024, the Company originated ALP loans with the intent to sell the loans to a JV. While the Company may continue to source JV partners to participate in the ALP, during the third quarter of 2024, we made the decision to originate with the intent to securitize ALP loans with our subsidiary Newtek ALP Holdings as the originator and sponsor. For example, during the second quarter of 2025, Newtek ALP Holdings closed a securitization backed by $216,564,700 of ALP loans. The Company could also originate ALP loans designated as HFI.
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Following the Acquisition, there can be no assurance regarding our continued lending prospects or operations as a financial holding company. See 2024 Form 10-K, “ITEM 1A. RISK FACTORS – Risks Related to Operation as a Financial Holding Company – We are subject to extensive regulation and supervision as a financial holding company, which may adversely affect our business.”

Our common shares are currently listed on the Nasdaq Global Market under the symbol “NEWT”.

Newtek Bank is a national bank and nationally licensed SBA lender under the SBA 7(a) Program, and originates, sells and services SBA 7(a) loans. Newtek Bank has been granted PLP status and is authorized to place SBA guarantees on loans without seeking prior SBA review and approval. Being a national lender with PLP status allows Newtek Bank to expedite the origination of SBA 7(a) loans since Newtek Bank is not required to present applications to the SBA for concurrent review and approval. The loss of PLP status would adversely impact our marketing efforts and ultimately our loan origination volume, which would negatively impact our results of operations. See 2024 Form 10-K, “ITEM 1A. RISK FACTORS - Risks Related to SBA Lending - There can be no guarantee that Newtek Bank will be able to maintain its SBA 7(a) lending license and PLP status.” and “ITEM 1A. RISK FACTORS - Risks Related to SBA Lending - A governmental failure to fund the SBA could adversely affect Newtek Bank’s SBA 7(a) loan originations and our results of operations.”

Economic Developments

We have observed and continue to observe commodity inflation, rising interest rates, unrelated bank failures and declines in depositor confidence in certain types of depository institutions. In addition, the conflicts in the Middle East and the war between Russia and Ukraine, and resulting market volatility, could adversely affect our business, financial condition or results of operations. The ongoing conflicts have negatively affected the global economy and business activity and could have a material adverse effect on our business, financial condition, cash flows and results of operations. The severity and duration of conflicts and their impact on global economic and market conditions are impossible to predict. In 2024, numerous elections were held globally, including the recent U.S. presidential election. The outcomes of the elections are expected to result in changes in policy, which could also have adverse effects on us or the business environment in which we operate more generally. For example, the new U.S. presidential administration has imposed or increased tariffs, including on imports from China, and proposed imposing or increasing tariffs on U.S. trading partners, which could adversely affect markets, the business environment and our business. On July 4, 2025, federal legislation generally referred to as H.R. 1 - One Big Beautiful Bill Act (the “Act”) was signed into law. The Act includes a variety of tax provisions including permanently extending and modifying certain key aspects of existing federal tax law. U.S. GAAP requires the effects of changes in tax laws and rates to be recognized in its financial statements in the period in which legislation is enacted. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline. We monitor developments and seek to manage our investments in a manner consistent with achieving our investment objective, but there can be no assurance that we will be successful in doing so.

Income

For the quarterly period ended September 30, 2025, we generated income in the form of interest, net gains on the sales of loans originated (which primarily include sales of SBA 7(a) and ALP loans) and related servicing assets on such sales, dividends, electronic payment processing income, servicing income, and other fee income generated by loan originations and by our subsidiaries. We originated loans that typically have terms of 10 to 25 years and bear interest at prime plus a margin. In some instances, we received payments on our loans based on scheduled amortization of the outstanding balances. In addition, we received repayments of some of our loans prior to their scheduled maturity date. The frequency or volume of these repayments fluctuated significantly from period to period. Our portfolio activity for the quarterly period ended September 30, 2025, also reflects the proceeds of sales of guaranteed portions of SBA 7(a) loans we originated. In addition, we received servicing income related to the guaranteed portions of SBA 7(a) loans which we originated and sold into the secondary market as well as on the portfolios of ALP loans owned and then securitized by NCL JV (dissolved in September 2025), TSO JV and Newtek ALP Holdings. These recurring fees are outlined in servicing agreements and were recorded when earned. In addition, we generated revenue in the form of loan origination fees (packaging and legal fees) as well as loan prepayment and late fees. We recorded such fees related to loans held for sale as other income. Distributions of earnings from our joint ventures were evaluated to determine if the distribution was income, return of capital or realized gain.

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We recognized realized gains or losses on loans based on the difference between (1) the net proceeds from the disposition and any servicing assets recognized and (2) the cost basis of the loan without regard to unrealized gains or losses previously recognized. We recorded current period changes in fair value of loans and assets that were measured at fair value as a component of the net change in unrealized appreciation (depreciation) on the loans or servicing assets, as appropriate, as well as amortization and impairment, if any, of LCM servicing rights in the consolidated statements of operations.

Expenses

For the quarterly period ended September 30, 2025, our primary operating expenses were salaries and benefits, interest expense including interest on deposits, electronic payment processing expense, loan origination and servicing expenses, and other general and administrative costs, such as professional fees, marketing, referral fees, servicing costs and rent.

Discussion and Analysis of Financial Condition

September 30, 2025 vs. December 31, 2024

ASSETS

Total assets at September 30, 2025 were $2.4 billion, an increase of $339.2 million, or 16.5%, compared to total assets of $2.1 billion at December 31, 2024. As of December 31, 2024, the Company held the assets and liabilities of NTS for sale. Refer to NOTE 4—INVESTMENTS: Intelligent Protection Management Corp.

Loans
September 30, 2025December 31, 2024Change
Loans held for sale, at fair value$757,001 $372,286 $384,715 
Loans held for sale, at LCM28,678 58,803 (30,125)
Loans held for investment, at fair value305,720 369,746 (64,026)
Loans held for investment, at amortized cost, net of deferred fees and costs834,087 621,651 212,436 
Allowance for credit losses(45,166)(30,233)(14,933)
Loans held for investment, at amortized cost, net788,921 591,418 197,503 
Total Loans$1,880,320 $1,392,253 $488,067 

Loans held for sale

Loans HFS, at fair value increased $384.7 million during the nine months ended September 30, 2025. The overall increase was primarily the result of holding guaranteed portions of SBA 7(a) loans for longer periods of time as well as new loan originations during 2025, in the amount of $310.6 million in SBA loans and an increase of $74.1 million for ALP loans.

September 30, 2025December 31, 2024
Change
SBA 504 First Lien$155,459 $128,255 $27,204 
SBA 504 Second Lien31,009 26,678 4,331 
SBA 7(a)265,521 4,855 260,666 
SBA 7(a) Partials1
18,384 — 18,384 
Total SBA loans
470,373 159,788 310,585 
ALP286,628 212,498 74,130 
Loans HFS, at fair value
$757,001 $372,286 $384,715 
1    Reclassified from Loans HFS, at LCM

Loans HFS, at LCM decreased $30.1 million during the same period. The overall decrease was primarily the result of loan sales that occurred in 2025.

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September 30, 2025December 31, 2024
Change
SBA 504 First Lien$22,119 $36,783 $(14,664)
SBA 504 Second Lien6,559 8,203 (1,644)
SBA 7(a) Partials1
— 13,817 (13,817)
Loans HFS, at LCM$28,678 $58,803 $(30,125)
1    Reclassified to Loans HFS, at fair value

Loans held for investment

At Fair value: Loans HFI, at fair value were $305.7 million at September 30, 2025 compared to $369.7 million at December 31, 2024. The balance consists primarily of SBA 7(a) loans as well as $5.8 million of loans that the Company owns 100% as a result of originating the loan and subsequently repurchasing the guaranteed portion from the SBA. As previously discussed, NSBF ceased originating loans during 2023, resulting in the decrease in the balance of loans held for investment from December 31, 2024 to September 30, 2025, primarily due to the principal payments of existing loans held by NSBF.

At Amortized Cost: Loans HFI, at amortized cost consist of loans originated at or purchased by Newtek Bank. The $212.4 million increase in loans HFI, at amortized cost is the result of an increase in originations for the nine months ended September 30, 2025 over 2024.

Credit Quality: The following table presents an analysis of loans HFI with credit metrics, including a breakdown by days aged:

Credit Quality RatiosSeptember 30, 2025December 31, 2024
At Amortized Cost
Current$741,649 89.2 %$575,444 92.8 %
Past Due 30-89 Days and accruing23,994 2.9 %20,585 3.3 %
Past Due 90 and more Days and accruing399 — %— — %
Nonaccrual loans65,678 7.9 %24,341 3.9 %
Total, at amortized cost
$831,720 100.0 %$620,370 100.0 %
Deferred fees and costs
2,367 1,281 
Total, at amortized cost, net of deferred fees and costs
$834,087 $621,651 
Allowance for credit losses$(45,166)5.4 %$(30,233)4.9 %
At Fair Value
Current$209,306 68.5 %$251,616 68.1 %
Past Due 30-89 Days and accruing21,087 6.9 %41,558 11.2 %
Past Due 90 and more Days and accruing2,182 0.7 %9,268 2.5 %
Nonaccrual loans73,145 23.9 %67,304 18.2 %
Total$305,720 100.0 %$369,746 100.0 %
Past due and nonaccrual loans as % of Outstanding UPB$96,414 31.5 %$118,130 31.9 %
Nonperforming Assets, as a percentage of total assets
Loans HFI, at amortized cost
$65,678 2.7 %$24,341 1.2 %
Loans HFI, at fair value
73,145 3.0 %67,304 3.2 %
Other real estate owned7,890 0.3 %3,764 0.2 %
  Total Nonperforming Assets$146,713 6.0 %$95,409 4.6 %

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CRE exposure

The Company’s loan portfolio consists of loans to independent business owners (SMBs). The Company’s Loans HFI at amortized cost and Loans HFS at LCM include a total of $342.7 million of loans, including unfunded commitments, backed by CRE and considered non-owner occupied as of September 30, 2025. The average loan-to-value for this CRE portfolio was 58.3%.
The table below presents detail of the loans considered non-owner occupied CRE that are not carried at fair value:

September 30, 2025December 31, 2024
HFI at amortized cost, net of deferred fees and costsHFS at LCMTotalLTV
by CRE type		HFI at amortized cost, net of deferred fees and costsHFS at LCMTotalLTV
by CRE type
Loans not backed by NOO CRE$577,166 $— $577,166 $429,820 $— $429,820 
Loans backed by NOO CRE256,921 28,678 285,599 191,831 58,803 250,634 
Total loans$834,087 $28,678 $862,765 $621,651 $58,803 $680,454 
Loans backed by NOO CRE by type:
Retail$69,288 $— $69,288 54.3 %$45,594 $— $45,594 51.4 %
1-4 Family21,212 — 21,212 54.3 %25,139 — 25,139 56.1 %
Multifamily65,934 — 65,934 57.9 %35,713 — 35,713 52.6 %
Industrial34,615 — 34,615 50.7 %27,866 — 27,866 50.1 %
Office30,977 — 30,977 49.7 %21,586 — 21,586 47.7 %
Construction and land development1
16,318 22,119 38,437 66.6 %22,775 44,986 67,761 65.1 %
Hotel5,220 6,559 11,779 59.0 %— 13,817 13,817 66.2 %
Other13,357 — 13,357 61.7 %13,158 — 13,158 61.5 %
Total NOO CRE$256,921 $28,678 $285,599 58.3 %$191,831 $58,803 $250,634 57.9 %
Unfunded Commitments
Construction and land development1
$— $57,053 $57,053 $— $48,402 $48,402 
Hotel— — — — 13 13 
Total unfunded commitments— 57,053 57,053 — 48,415 48,415 
Total CRE Loans
$256,921 $85,731 $342,652 $191,831 $107,218 $299,049 
1 Construction and land development includes SBA 504 first and second lien loans. The LTV on first lien is generally 65%. Second liens are typically taken out by the SBA following project completion and occupancy by the borrower. The LTV calculated is based on total exposure.

Goodwill and Intangibles

The table below presents detail of the Company’s Goodwill and intangibles:
September 30, 2025December 31, 2024
GoodwillIntangible AssetsTotalGoodwillIntangible AssetsTotal
Banking segment
$271 $548 $819 $271 $667 $938 
Payments segment
13,814 — 13,814 13,814 — 13,814 
Total$14,085 $548 $14,633 $14,085 $667 $14,752 

The change in goodwill and intangible assets relates to amortization of intangible assets during the nine months ended September 30, 2025.

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A sensitivity analysis of the loan servicing assets at fair value to adverse changes in significant assumptions as of September 30, 2025 and December 31, 2024 is as follows:

September 30, 2025December 31, 2024
Discount factor
Effect on fair value of a 100 basis point adverse change$(649)$(831)
Effect on fair value of a 200 basis point adverse change(1,252)(1,604)
Cumulative prepayment rate
Effect on fair value of a 100 basis point adverse change$(53)$(85)
Effect on fair value of a 500 basis point adverse change(265)(423)
Average cumulative default rate
Effect on fair value of a 100 basis point adverse change$(36)$(72)
Effect on fair value of a 500 basis point adverse change(182)(358)

The sensitivity analysis presents the hypothetical effect on fair value of the servicing assets due to the change in significant assumptions. Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value is not linear. Additionally, the sensitivity analysis shocks each significant assumption individually, while keeping all other assumptions unchanged. In practice, changes in one assumption generally impact other assumptions, which could increase or lessen the effect of the change.

Residuals in Securitizations, at Fair Value

The residuals in securitizations, at fair value arise from the NALP Business Loan Trust 2025-1 ALP securitization that the Company closed on April 23, 2025. Residuals in securitizations were $76.7 million as of September 30, 2025. The Securitization Trust meets the definition of a VIE. The Company holds a variable interest in the VIE, however, the Company is not considered the primary beneficiary of the VIE, because the power over the activities that have the most significant impact on the economic performance of the Securitization Trust is held by the Class C Noteholder, and therefore, the Company is not required to consolidate the Securitization Trust. The Company’s beneficial interest in the Securitization Trust is evidenced by sole ownership of the Ownership Certificate and its beneficial interest in the credit risk of the securitized ALP Loans. As the Sponsor is a wholly owned subsidiary of the Company, the Company effectively owns 100% of the equity interest in the Trust. Refer to NOTE 3—SECURITIZATIONS AND VARIABLE INTEREST ENTITIES in the accompanying notes to the consolidated financial statements for additional information.

Settlement Receivable

Settlement receivables were $0.5 million as of September 30, 2025, a decrease of $52.0 million compared to December 31, 2024. The settlement receivable arises from the guaranteed portions of SBA 7(a) loans that were traded in the period but did not settle during the current period end and the cash was not received from the purchasing broker during the current period; the amount varies depending on loan origination volume and timing of sales at quarter end. The reduction in the settlement receivable was primarily the result of our holding guaranteed portions of SBA 7(a) loans for longer periods of time.

LIABILITIES

Total liabilities at September 30, 2025, were $2.0 billion, an increase of $248.8 million, or 14.1%, compared to total liabilities of $1.8 billion at December 31, 2024.

Deposits

Total deposits were $1.2 billion at September 30, 2025, consisting of $21.8 million in non-interest bearing deposits and $1.2 billion in interest bearing deposits, a $0.2 billion increase from the balance as of December 31, 2024. As of September 30, 2025 and December 31, 2024, insured deposits represent 78.3% and 80.3%, respectively, of deposits.


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Borrowings
Borrowings Outstanding
September 30, 2025December 31, 2024Change
Bank Borrowings1:
NMS Webster Note2
$— $32,688 $(32,688)
NMS Goldman Facility3
88,617 — 88,617 
SPV I Capital One Facility23,155 21,192 1,963 
SPV II Deutsche Bank Facility103,970 54,036 49,934 
SPV III One Florida Bank Facility8,262 23,011 (14,749)
FHLB Advances
7,862 15,330 (7,468)
Total Lines of Credit231,866 146,257 85,609 
Parent Company Notes1:
2025 Notes (5.00%)4
— 29,913 (29,913)
2026 Notes (5.50%)
114,820 114,282 538 
2027 Notes (8.125%)5
49,960 49,944 16 
2028 Notes (8.00%)
38,986 38,726 260 
2029 Notes (8.50%)
69,938 69,622 316 
2029 Notes (8.625%)
73,028 72,662 366 
2030 Notes (8.375%)6
29,355 — 29,355 
Total Parent Company Notes
376,087 375,149 938 
Notes Payable - Securitization Trusts1
140,596 186,635 (46,039)
Total$748,549 $708,041 $40,508 
1     Net of deferred financing costs.
2     On September 26, 2025, the NMS Webster Note was repaid in full.
3    On September 26, 2025, NMS entered into the Goldman Facility.

4    On March 31, 2025, the 2025 5.00% Notes matured.
5    Effective December 11, 2024, the Company entered into the Amendment and Exchange Agreements with each of the holders of the 2025 8.125% Notes, pursuant to which the Company and the holders of the 2025 8.125% Notes agreed to exchange the 2025 8.125% Notes for the 2027 Notes.
6    On March 19, 2025, the Company closed an exempt offering of $30.0 million in aggregate principal amount of its 2030 Notes. The 2030 Notes bear interest at a rate of 8.375% per year payable semiannually on April 1 and October 1 each year, beginning October 1, 2025.

Borrowings were $748.5 million at September 30, 2025, compared to $708.0 million at December 31, 2024. This increase was primarily due to $88.6 million of new borrowings under the NMS Goldman Facility, additional borrowings of $49.9 million on the SPV II facility as well as $29.4 million issuance of the 2030 Notes. These increases were partially offset by $32.7 million repayment in full of the NMS Webster Note, the maturity of $29.9 million of the 2025 5.00% Notes, $46.0 million reduction in the notes payable on securitization trusts, and $14.7 million repayments of borrowings on the SPV III facility, and $7.5 million in maturities of FHLB advances.

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Results of Operations
Set forth below is a comparison of the results of operations for the nine months ended September 30, 2025 and 2024.
Summary

For the nine months ended September 30, 2025, the Company reported net income of $41.0 million, or $1.57 per basic and $1.54 per diluted share, compared to net income of $32.5 million, or $1.26 per basic and diluted share, for the nine months ended September 30, 2024.

The net increase in net income before taxes was due to a $23.9 million increase of interest income on loans, and a $15.8 million increase in noninterest income, partially offset by a $13.6 million increase of provision for credit losses, a $10.3 million increase of interest expense on deposits. Below is a summary of changes in the components of Net income:

Nine Months Ended September 30,
20252024Change
Net interest income after provision for credit losses$12,071 $12,271 $(200)
Noninterest income169,061 153,238 15,823 
Noninterest expense125,645 120,570 5,075 
Net income before taxes55,487 44,939 10,548 
Income tax expense14,516 12,410 2,106 
Net income$40,971 $32,529 $8,442 

Net Interest Income

Nine Months Ended September 30,
20252024Change
Interest income
Debt securities available-for-sale$690 $1,168 $(478)
Loans and fees on loans104,213 80,346 23,867 
Other interest earning assets8,599 6,177 2,422 
Total interest income113,502 87,691 25,811 
Interest expense
Deposits30,081 19,755 10,326 
Notes and securitizations32,592 33,427 (835)
Bank and FHLB borrowings8,424 5,496 2,928 
Total interest expense71,097 58,678 12,419 
Net interest income42,405 29,013 13,392 
Provision for credit losses30,334 16,742 13,592 
Net interest income after provision for credit losses
$12,071 $12,271 $(200)

In response to market conditions and consistent with its business plan, Newtek Bank has been focused on increasing its liquidity position by raising additional deposits and maintaining a significant portion of its liquidity in the form of cash held at the Federal Reserve, approximately $187.7 million as of September 30, 2025, as opposed to long-term investments. In addition, Newtek Bank management continues to closely monitor market conditions with a focus on its asset liability management policies, as well as closely monitoring, among other things, capital levels, to ensure compliance with regulatory guidelines and the OCC Operating Agreement.
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Interest Income
Loans and fees on loans: The $23.9 million increase in interest income on the Company’s loan portfolio was attributable to increases in the average balances of loans HFI and HFS, which increased $200.5 million and $175.2 million, respectively, as well as the average outstanding accrual portfolio of loans held for investment increasing to $1.5 billion from $1.1 billion for the nine months ended September 30, 2025 and 2024, respectively. The increase in the average balance of loans HFS was attributable to originations of SBA 504 and ALP loans, and the increase in the average outstanding accrual loan portfolio resulted from the origination of new SBA 7(a) loans period over period.
Other interest earning assets: The $2.4 million increase in interest income from other interest earnings assets was attributable to higher interest rates on cash and due from banks, as well as interest bearing deposits in banks, including Newtek Bank earning interest on Federal Reserve Bank cash deposits.
Interest Expense
The following is a summary of interest expense by facility for the nine months ended September 30, 2025 and 2024:
Nine Months Ended
September 30, 2025September 30, 2024Change
Deposits$30,081 $19,755 $10,326 
Notes and securitizations:
Notes payable - Securitization Trusts9,522 16,734 (7,212)
2024 Notes1
— 1,409 (1,409)
2025 5.00% Notes2
462 1,387 (925)
2025 8.125% Notes3
— 3,440 (3,440)
2026 Notes5,282 5,282 — 
2027 Notes3
3,068 — 3,068 
2028 Notes4
2,661 2,661 — 
2029 8.50% Notes5
4,965 2,224 2,741 
2029 8.625% Notes6
5,217 290 4,927 
2030 Notes7
1,415 — 1,415 
Total notes and securitizations32,592 33,427 (835)
Bank and FHLB Borrowings:
Bank notes payable8,180 5,085 3,095 
FHLB Advances244 411 (167)
Total bank and FHLB borrowings8,424 5,496 2,928 
Total interest expense$71,097 $58,678 $12,419 
1    On August 1, 2024, the 2024 Notes matured.
2    On March 31, 2025, the 2025 5.00% Notes matured.
3    Effective December 11, 2024, the Company entered into the Amendment and Exchange Agreements with each of the holders of the 2025 8.125% Notes, pursuant to which the Company and the holders of the 2025 8.125% Notes agreed to exchange the 2025 8.125% Notes for the 2027 Notes.
4    On August 31, 2023, the Company completed a public offering of $40.0 million aggregate principal amount of 8.00% notes due 2028. The Notes will mature on September 1, 2028. The Notes bear interest at a rate of 8.000% per year, payable quarterly on March 1, June 1, September 1, and December 1 each year, commencing on December 1, 2023.
5    On May 30, 2024, the Company completed a public offering of $62.5 million aggregate principal amount of 8.500% notes due 2029. On June 3, 2024, the underwriters exercised their option to purchase an additional $9.4 million in aggregate principal amount of the 2029 Notes. The Notes will mature on June 1, 2029. The Notes bear interest at a rate of 8.500% per year, payable quarterly on March 1, June 1, September 1, and December 1 each year, commencing on September 1, 2024.
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6    On September 16, 2024, the Company completed a public offering of $75.0 million aggregate principal amount of 8.625% notes due 2029. The Notes will mature on October 15, 2029. The Notes bear interest at a rate of 8.625% per year, payable quarterly on January 15, April 15, July 15, and October 15 each year, commencing on January 15, 2025.
7    On March 19, 2025, the Company completed an exempt offering of $30.0 million aggregate principal amount of notes due 2030. The Notes will mature on April 1, 2030. The Notes bear interest at a rate of 8.375% per year, payable semiannually on April 1 and October 1 each year, commencing on October 1, 2025.

The increase in interest expense period over period is primarily from additional interest expense on deposits of $10.3 million, additional interest expense of $2.9 million on bank and FHLB borrowings, and additional interest expense of $3.1 million, $2.7 million, and $4.9 million on the 2027 Notes, 2029 8.50% Notes and the 2029 8.625% Notes, respectively. The increase is partially offset by a $7.2 million reduction in interest due to securitization payoffs, as well as a $3.4 million reduction in interest expense on the 2025 8.125% Notes.

Provision for Credit Losses
The provision for loan and lease credit losses represents the amount necessary to be charged against the current period’s earnings to maintain the ACL on loans at a level that the Company believes is appropriate in relation to the estimated losses inherent in the loan portfolio.
For the nine months ended September 30, 2025 and 2024, there was a provision for credit losses of $30.3 million and $16.7 million, respectively. The increase was due to increases in net charge-offs, specific reserves on individually evaluated loans, and balances of loans held for investment at amortized cost, across all products but specifically SBA 7(a) loans.
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Net Interest Income and Margin

Average Balances and Yields. The following table presents information regarding average balances for assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amount of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. The yields and costs for the periods indicated are derived by dividing the income or expense by the average balances for assets or liabilities, respectively, for the periods presented and annualizing that result. Loan fees are included in interest income on loans.

Nine Months Ended September 30,
20252024
Average BalanceInterestAverage Yield / RateAverage BalanceInterestAverage Yield / Rate
Interest-earning assets:
Other interest-earning assets$271,996 $8,599 4.23 %$157,415 $6,177 5.24 %
Investment securities17,485 690 5.28 29,641 1,168 5.26 
Loans held for sale413,150 31,348 10.14 210,110 17,743 11.28 
Loans held for investment1,152,504 72,865 8.45934,010 62,603 8.95
Total interest-earning assets1,855,135 113,502 8.181,331,176 87,691 8.80
Less: Allowance for credit losses on loans(35,850)(16,663)
Noninterest earning assets213,246 206,952 
Total assets$2,032,531 $1,521,465 
Interest-bearing liabilities:
Demand$112,218 $788 0.94 %$33,442 $282 1.13 %
Savings and NOW404,063 13,409 4.44 252,295 9,603 5.08 
Money Market51,390 1,560 4.06 23,878 767 4.29 
Time395,975 14,324 4.84 239,477 9,103 5.08 
Total deposits963,646 30,081 4.17 549,092 19,755 4.81 
Borrowings693,298 41,016 7.91 641,106 38,923 8.11 
Total interest-bearing liabilities1,656,944 71,097 5.74 1,190,198 58,678 6.59 
Noninterest-bearing deposits— 9,511 
Noninterest-bearing liabilities80,167 64,675 
Shareholders’ equity295,420 257,081 
Total liabilities and shareholders' equity$2,032,531 $1,521,465 
Net interest income and interest rate spread$42,405 2.44 %$29,013 2.21 %
Net interest margin3.06 %2.91 %
Ratio of average interest-earning assets to average interest bearing liabilities111.96 %111.84 %

In response to market conditions and consistent with its business plan, Newtek Bank has been focused on increasing its liquidity position by raising additional deposits and maintaining a significant portion of its liquidity in the form of cash held at the Federal Reserve, approximately $187.7 million as of September 30, 2025, as opposed to long-term investments. In addition, Newtek Bank management continues to closely monitor market conditions with a focus on its asset liability management policies, as well as closely monitoring, among other things, capital levels, to ensure compliance with regulatory guidelines and the OCC Operating Agreement. The increase in the average balance of loans HFS was attributable to originations of SBA 504, SBA 7(a) and ALP loans, and the increase in the average outstanding accrual loan portfolio resulted from the origination of new SBA 7(a) loans period over period.
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Rate/Volume Analysis

The following table sets forth the effects of changing rates and volumes on net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, increases or decreases attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on the changes due to rate and the changes due to volume.

Nine Months Ended September 30,
2025 vs. 2024
Increase (Decrease) Due to
RateVolumeTotal
Interest income:
Other interest-earning assets$(2,074)$4,496 $2,422 
Investment securities1 (479)(478)
Loans held for sale(3,541)17,146 13,605 
Loans held for investment(4,383)14,645 10,262 
Total interest income(9,997)35,808 25,811 
Interest expense:
Demand(158)664 506 
Savings and NOW(1,971)5,777 3,806 
Money Market(91)884 793 
Time(728)5,949 5,221 
Borrowings(1,076)3,169 2,093 
Total interest expense(4,024)16,443 12,419 
Net interest income$(5,973)$19,365 $13,392 

Noninterest Income
Nine months ended September 30,2025/2024 Increase/(Decrease)
20252024AmountPercent
Dividend income$2,711 $1,128 $1,583 140.3 %
Net loss on loan servicing assets(12,500)(5,383)(7,117)132.2 
Servicing income17,655 14,922 2,733 18.3 
Net gains on sales of loans38,050 68,531 (30,481)(44.5)
Net gain on residuals in securitizations30,015 — 30,015 100.0 
Net gain (loss) on loans under the fair value option35,566 (4,181)39,747 (950.7)
Technology and IT support income— 14,255 (14,255)(100.0)
Electronic payment processing income33,401 35,409 (2,008)(5.7)
Other noninterest income24,163 28,557 (4,394)(15.4)
  Total noninterest income$169,061 $153,238 $15,823 10.3 %

Dividend Income

For the nine months ended September 30, 2025 and 2024, dividend income was dependent on the earnings of our joint ventures.

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Net Loss on Loan Servicing Assets

The Company accounts for servicing assets in accordance with ASC Topic 860-50 - Transfers and Servicing - Servicing Assets and Liabilities. The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells, from the SBA 7(a) loan securitizations sponsored by NSBF, and from servicing the ALP portfolios in securitizations sponsored by NCL JV (terminated in August 2025), TSO JV and Newtek ALP Holdings. Servicing assets for loans originated by the Company’s nonbank subsidiaries are measured at FV at each reporting date and the Company reports changes in the FV of servicing assets in earnings in the period in which the changes occur. The valuation model for servicing assets incorporates assumptions including, but not limited to, servicing costs, discount rate, prepayment rate, and default rate. Considerable judgment is required to estimate the fair value of servicing assets and, as such, these assets are classified as Level 3 in our fair value hierarchy. Servicing assets for loans originated by Newtek Bank are measured at LCM and amortized based on their estimated life, and impairment is recorded to the extent the amortized cost exceeds the asset’s FV. Net loss on loan servicing assets is shown net of amortization expense.
The larger loss in Net loss on loan servicing assets is due to the decrease in NSBF’s total portfolio of loans during the wind-down.

Servicing Income
The increase in servicing income was related to an increase of $127.2 million in the average total loan portfolio for which we earn servicing income period over period.

Net Gains on Sales of Loans

Net gains on sales of loans for the nine months ended September 30, 2025 and 2024 were as follows:

 Nine Months Ended
 September 30, 2025September 30, 2024
Gains recognized on sales of loans
$38,239 $72,089 
Losses recognized on sales of loans
(189)(3,558)
Net gains on sales of loans
$38,050 $68,531 

 Nine Months Ended
 September 30, 2025September 30, 2024
# of Loans
$ Amount
# of Loans
$ Amount
SBA 7(a) loans originated
1,589 $606,228 1,732 $680,659 
SBA 7(a) guaranteed loans sold
788 211,772 1,449 501,570 
Average net sale price as a percent of principal balance1
110.67 %111.00 %
1    Realized gains greater than 110.00% must be split 50/50 with the SBA in accordance with SBA regulations. The realized gains recognized above reflect amounts net of split with the SBA.

For the nine months ended September 30, 2025, the average sale price on SBA 7(a) loans as a percent of principal balance was 110.67% compared to 111.00% for the prior period. The decrease in sales prices in 2025 resulted from lower demand. The decrease in overall net gains on sales of loans resulted from lower volumes of sales compared to the prior year at lower market premiums than the prior year. Additionally, the decrease in SBA 7(a) guaranteed loans sold is primarily due to management holding the loans for a longer period of time.

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The table below provides selected statistics on the historical net premiums on sales of guaranteed portions of SBA 7(a) loans realized by NewtekOne:

SBA 7(a) Sales Price as Percent of Principal Balance (%)
Average
HighLowMedian
Year ended December 31, 2023110.20 %114.04 %106.00 %110.42 %
Year ended December 31, 2024110.97 %114.80 %107.18 %111.19 %
Nine months ended September 30, 2025111.41 %114.06 %108.31 %110.71 %
Weighted Average
110.62 %114.80 %106.00 %110.81 %

During the wind-down of NSBF’s operations, NSBF is required to continue to own its SBA 7(a) loans and PPP Loans in its SBA loan portfolio to maturity, liquidation, charge-off, or (subject to SBA’s prior written approval) sale or transfer. In addition, SBL will service and liquidate NSBF’s SBA Loan Portfolio, including processing forgiveness and loan reviews for PPP Loans pursuant to an SBA approved lender service provider agreement with SBL. The Company will continue to measure NSBF’s SBA 7(a) loan portfolio at fair value until the portfolio is completely runoff. The Company will report both realized and unrealized gains and losses relating to the fair value adjustments on the legacy NSBF SBA 7(a) portfolio.

Net Gain on Residuals in Securitizations

Net gains on residuals in securitizations for the nine months ended September 30, 2025 were $30.0 million. There were no net gains on residuals in securitizations for the nine months ended September 30, 2024. This resulted from the Company’s equity interest in the 2025-1 Securitization Trust which closed on April 23, 2025. To consummate the transaction, $216.6 million of ALP loans held for sale at fair value were sold into the securitization trust at par. This resulted in $35.4 million of previously recorded gains on ALP loans under the fair value option to be reversed, which was a large driver of the change described in the section below. The residual in the securitization (represented by the ownership certificate) was then valued resulting in a gain that was netted against the transaction costs. Refer to NOTE 3—SECURITIZATIONS AND VARIABLE INTEREST ENTITIES in the accompanying notes to the consolidated financial statements for additional information.

Net Gain (Loss) on Loans under the Fair Value Option

Net gain (loss) on loans accounted for under the fair value option for the nine months ended September 30, 2025 and 2024 were as follows:

For the nine months ended
September 30, 2025September 30, 2024Change
SBA 7(a) Unguaranteed Loans$(10,665)$(17,216)$6,551 
SBA 7(a) Guaranteed Loans30,080 326 29,754 
SBA 504 and Non-SBA Loans16,151 12,709 3,442 
Net Gain (Loss) on Loans Accounted for Under the Fair Value Option$35,566 $(4,181)$39,747 

Net unrealized gain (loss) on loans accounted for under the fair value option relates to the guaranteed portions of SBA loans made which the Company sells into a secondary market, the unguaranteed portions of SBA loans made which the Company holds, SBA 504 loans that are held for sale, and ALP loans that are held for sale. This unrealized gain (loss) represents the fair value adjustment of loans. The amount of the unrealized gain (loss) is determined by the quantity of loans held for sale at quarter end, the change in secondary market pricing conditions, and the valuation of the loans that are not held for sale.

During the nine months ended September 30, 2025 and 2024, the Company recorded unrealized gains on SBA 7(a) unguaranteed loans accounted for under the fair value option as the portfolio paid down. During the nine months ended September 30, 2025 and 2024, the Company recorded unrealized gains on SBA 7(a) guaranteed loans accounted for under the fair value option primarily due to holding guaranteed portions of SBA 7(a) loans for longer periods of time.

The $3.4 million increase in unrealized gain (loss) on loans accounted for under the fair value option from SBA 504 and Non-SBA loans is primarily volume driven from the reversal of the previous gains on ALP loans to consummate the NALP 2025-1 transaction as noted above.
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Technology and IT Support Income

Technology and IT support income was $14.3 million for the nine months ended September 30, 2024. There was no Technology and IT support income for the nine months ended September 30, 2025, due to the sale of NTS. Refer to NOTE 4—INVESTMENTS: Intelligent Protection Management Corp.

Other Noninterest Income

For the nine months ended September 30, 2025 and 2024, other noninterest income was related primarily to loan origination fees (legal and packaging) on loans sold or carried at fair value. Other items that contributed to the $4.4 million decrease included a decrease on prepayment and late fees earned from SBA 7(a) loans. The Company originated 1,589 of SBA 7(a) loans compared to 1,732 loans for the nine months ended September 30, 2025 and 2024, respectively. Adding to the decrease was $(0.7) million of net unrealized losses on joint ventures and other non-control investments for the nine months ended September 30, 2025 compared to none in the prior period.

Non-Interest Expense

Nine months ended September 30,2025/2024 Increase/(Decrease)
20252024AmountPercent
Salaries and employee benefits expense$64,424 $60,445 $3,979 6.6 %
Technology services expense— 8,624 (8,624)(100.0)
Electronic payment processing expense13,304 14,977 (1,673)(11.2)
Professional services expense11,532 11,237 295 2.6 
Other loan origination and maintenance expense14,468 9,391 5,077 54.1 
Depreciation and amortization549 1,570 (1,021)(65.0)
Loss on extinguishment of debt179 — 179 — 
Other general and administrative costs21,189 14,326 6,863 47.9 
Total noninterest expense$125,645 $120,570 $5,075 4.2 %

Salaries and Employee Benefits Expense

The increase in salaries and employee benefits was primarily attributable to higher benefit costs, including medical and other insurance expenses, as well as an increase in stock-based compensation expense.

Technology Services Expense

The $8.6 million decrease in technology services expenses for the nine months ended September 30, 2025 corresponded with the NTS Sale. Refer to NOTE 4—INVESTMENTS: Intelligent Protection Management Corp.

Other Loan Origination and Maintenance Expense

Other loan origination and maintenance expenses during the nine months ended September 30, 2025, was $14.5 million compared to $9.4 million for the nine months ended September 30, 2024 due to a larger dollar volume and count of loan originations in 2025 compared to 2024.

Depreciation and Amortization

The decrease in depreciation and amortization period over period is primarily attributable to the full amortization of intangible assets during the second half of 2024, which resulted in less amortization in 2025 compared to the prior year.

Loss on Extinguishment of Debt

The increase in loss on extinguishment of debt period over period is attributable to the repayment in full of the NMS Webster Note on September 26, 2025.
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Other General and Administrative Costs

The increase in other general and administrative costs of $6.9 million is primarily driven by higher technology-related costs following the sale of NTS in 2025. These costs were previously eliminated in consolidation but are now recognized as standalone expenses post-divestiture.
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Results of Segment Operations

The Company has four reportable segments Banking, Alternative Lending, NSBF, and Payments. A description of each segment and the methodologies used to measure financial performance is described in NOTE 18—SEGMENTS in the accompanying Notes to the Consolidated Financial Statements. Net income (loss) by operating segment is presented below:

Nine Months Ended2025/2024 Increase/(Decrease)
September 30, 2025September 30, 2024AmountPercent
Banking$30,866 $35,339 $(4,473)(13)%
Alternative Lending60,445 34,147 26,298 77 %
Technology1
— (52)52 (100)%
NSBF(13,612)(17,960)4,348 (24)%
Payments12,556 14,173 (1,617)(11)%
Corporate & Other20,732 6,048 14,684 243 %
Eliminations(70,016)(39,166)(30,850)79 %
Consolidated net income$40,971 $32,529 $8,442 26 %
1     As a result of commitments made to the Federal Reserve, the Company divested of NTS on January 2, 2025, and is no longer a reportable segment. See NOTE 4—INVESTMENTS: Intelligent Protection Management Corp.

Banking

The banking segment includes Newtek Bank as well as its consolidated subsidiary SBL. The financial results include the origination, sale, and servicing of SBA 7(a) loans, SBA 504 loans, C&I loans, CRE loans and ABL loans. In addition, Newtek Bank offers depository services. The results include $43.9 million of net interest income during the nine months ended September 30, 2025 compared to $28.2 million of net interest income during the nine months ended September 30, 2024. During 2025, the Company increased the average balances of loans HFI and HFS as well as the average outstanding accrual portfolio of loans HFI, which was partially offset by an increase in the provision for credit losses, resulting in higher net income for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Alternative Lending

Alternative Lending includes Newtek ALP Holdings (NALH) and its subsidiaries. The Company has originated loans under its Alternative Lending Program since 2019. Prior to July 1, 2024, the Company originated ALP loans with the intent to sell to a JV. While the Company continues to source JV partners to participate in this program, during the third quarter of 2024, the Company made the decision to originate with the intent to securitize ALP loans with our subsidiary Newtek ALP Holdings as the originator and sponsor without a joint venture partner; the Company’s first such securitization transaction was consummated during the second quarter of 2025. The Company could also originate ALP loans designated as HFI. On August 27, 2025, NALH entered into an interest purchase agreement with TCP to acquire TCP’s 50% ownership interest in NCL JV for $15.75 million, resulting in NALH owning 100% of NCL JV. Compared to the nine months ended September 30, 2024, there were more loans originations that drove higher income for the nine months ended September 30, 2025, as well as larger gains on loans at fair value.

NSBF

NSBF includes NSBF’s legacy portfolio of SBA 7(a) loans held outside Newtek Bank. The change in net income is due to the wind-down of NSBF’s operations.

Payments

Payments includes NMS, POS and Mobil Money. Within the segment’s results are $35.9 million of noninterest income for the nine months ended September 30, 2025 resulting from marketing credit and debit card processing services, check approval services, processing equipment, and software, compared to $39.1 million during the nine months ended September 30, 2024. The net income also included $23.1 million and $24.4 million of noninterest expense for the nine months ended September 30, 2025 and 2024, respectively.

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Corporate and Other

Corporate and Other represents operations not considered to be reportable segments and/or general operating expenses of the Company, and includes the parent company, other non-bank subsidiaries including NIA, PMT, and elimination adjustments to reconcile the results of the operating segments to the consolidated financial statements prepared in conformity with GAAP.
Results of Operations
Set forth below is a comparison of the results of operations for the three months ended September 30, 2025 and 2024.
Summary

For the three months ended September 30, 2025, the Company reported net income of $17.9 million, or $0.68 per basic and $0.67 per diluted share, compared to net income of $11.9 million, or $0.45 per basic and diluted share, for the three months ended September 30, 2024.

The net increase in net income was attributable to the following items:
Three Months Ended September 30,
20252024Change
Net interest income after provision for credit losses$6,837 $4,053 $2,784 
Noninterest income60,388 51,851 8,537 
Noninterest expense42,159 38,847 3,312 
Net income before taxes25,066 17,057 8,009 
Income tax expense7,165 5,123 2,042 
Net income$17,901 $11,934 $5,967 
Net Interest Income

Three Months Ended September 30,
20252024Change
Interest income
Debt securities available-for-sale$200 $334 $(134)
Loans and fees on loans36,376 28,588 7,788 
Other interest earning assets2,518 2,349 169 
Total interest income39,094 31,271 7,823 
Interest expense
Deposits10,879 7,314 3,565 
Notes and securitizations10,710 11,482 (772)
Bank and FHLB borrowings2,956 1,494 1,462 
Total interest expense24,545 20,290 4,255 
Net interest income14,549 10,981 3,568 
Provision for credit losses7,712 6,928 784 
Net interest income after provision for credit losses
$6,837 $4,053 $2,784 
Interest Income
Loans and fees on loans: The $7.8 million increase in interest income on the Company’s loan portfolio was attributable to an increase in the average outstanding accrual portfolio of loans held for investment increasing to $1.6 billion from $1.2 billion for the three months ended September 30, 2025 and 2024, respectively. The increase in the average outstanding accrual loan portfolio resulted from the origination of new SBA 7(a) loans period over period.
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Interest Expense
The following is a summary of interest expense by facility for the three months ended September 30, 2025 and 2024:
Three Months Ended
September 30, 2025September 30, 2024Change
Deposits
$10,879 $7,314 $3,565 
Notes and securitizations:
Notes payable - Securitization Trusts2,974 5,078 (2,104)
2024 Notes1
— 201 (201)
2025 5.00% Notes2
— 462 (462)
2025 8.125% Notes3
— 1,147 (1,147)
2026 Notes1,761 1,761 — 
2027 Notes3
1,023 — 1,023 
2028 Notes4
887 887 — 
2029 8.50% Notes5
1,655 1,655 — 
2029 8.625% Notes6
1,739 291 1,448 
2030 Notes7
671 — 671 
Total notes and securitizations10,710 11,482 (772)
Bank and FHLB Borrowings:
Bank notes payable2,900 1,362 1,538 
FHLB Advances56 132 (76)
Total bank and FHLB borrowings2,956 1,494 1,462 
Total interest expense$24,545 $20,290 $4,255 
1    On August 1, 2024, the 2024 Notes matured.
2    On March 31, 2025, the 2025 5.00% Notes matured.
3    Effective December 11, 2024, the Company entered into the Amendment and Exchange Agreements with each of the holders of the 2025 8.125% Notes, pursuant to which the Company and the holders of the 2025 8.125% Notes agreed to exchange the 2025 8.125% Notes for the 2027 Notes.
4    On August 31, 2023, the Company completed a public offering of $40.0 million aggregate principal amount of 8.00% notes due 2028. The Notes will mature on September 1, 2028. The Notes bear interest at a rate of 8.000% per year, payable quarterly on March 1, June 1, September 1, and December 1 each year, commencing on December 1, 2023.
5    On May 30, 2024, the Company completed a public offering of $62.5 million aggregate principal amount of 8.50% notes due 2029, and on June 3, 2024, the underwriters exercised their option to purchase an additional $9.4 million in aggregate principal amount of the 2029 Notes. The Notes will mature on June 1, 2029. The Notes bear interest at a rate of 8.500% per year, payable quarterly on March 1, June 1, September 1, and December 1 each year, commencing on September 1, 2024.
6    On September 16, 2024, the Company completed a public offering of $75.0 million aggregate principal amount of 8.625% notes due 2029. The Notes will mature on October 15, 2029. The Notes bear interest at a rate of 8.625% per year, payable quarterly on January 15, April 15, July 15, and October 15 each year, commencing on January 15, 2025.
7    On March 19, 2025, the Company completed an exempt offering of $30.0 million aggregate principal amount of notes due 2030. The Notes will mature on April 1, 2030. The Notes bear interest at a rate of 8.375% per year, payable semiannually on April 1 and October 1 each year, commencing on October 1, 2025.

The increase in interest expense period over period is primarily due to the Company’s continued growth in deposits that increased interest expense by $3.6 million. In addition, there was additional interest expense on the 2027, 2029 8.625% Notes and 2030 Notes of $1.0 million, $1.4 million and $0.7 million, respectively and an increase in interest expense on bank and FHLB borrowings of $1.5 million. The increase was partially offset by a reduction in Notes payable - Securitization Trusts of $2.1 million, and the 2025 8.125% Notes of $1.1 million.

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Provision for Credit Losses
The provision for loan and lease credit losses represents the amount necessary to be charged against the current period’s earnings to maintain the ACL on loans at a level that the Company believes is appropriate in relation to the estimated losses inherent in the loan portfolio.
For the three months ended September 30, 2025 and 2024, there was a provision for loan credit losses of $7.7 million and $6.9 million, respectively. The increase was due to an increase in loans held for investment at amortized cost, specifically SBA 7(a) loans, as well as a sequential build of the provision year over year.
Net Interest Income and Margin

Average Balances and Yields. The following table presents information regarding average balances for assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amount of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. The yields and costs for the periods indicated are derived by dividing the income or expense by the average balances for assets or liabilities, respectively, for the periods presented and annualizing that result. Loan fees are included in interest income on loans.

Three Months Ended September 30,
20252024
Average BalanceInterestAverage Yield / RateAverage BalanceInterestAverage Yield / Rate
Interest-earning assets:
Other interest-earning assets
$275,885 $2,518 3.62 %$171,193 $2,349 5.46 %
Investment securities13,015 200 6.10 25,472 334 5.22 
Loans held for sale624,531 11,516 7.32 248,507 6,634 10.62 
Loans held for investment1,105,354 24,860 8.92971,396 21,954 8.99
Total interest-earning assets2,018,785 39,094 7.681,416,568 31,271 8.78
Less: Allowance for credit losses on loans(42,724)(21,152)
Noninterest earning assets286,617 215,433 
Total assets$2,262,678 $1,610,849 
Interest-bearing liabilities:
Demand$157,657 $277 0.70 %$67,270 $191 1.13 %
Savings and NOW447,058 4,660 4.14 252,325 3,240 5.11 
Money Market64,113 576 3.56 30,049 311 4.12 
Time479,078 5,366 4.44 279,215 3,572 5.09 
Total deposits1,147,906 10,879 3.76 628,859 7,314 4.63 
Borrowings674,017 13,666 8.04 630,796 12,976 8.18 
Total interest-bearing liabilities1,821,923 24,545 5.34 1,259,655 20,290 6.41 
Noninterest-bearing deposits— 10,893 
Noninterest-bearing liabilities101,678 65,413 
Shareholders’ equity339,077 274,888 
Total liabilities and shareholders' equity$2,262,678 $1,610,849 
Net interest income and interest rate spread$14,549 2.34 %$10,981 2.37 %
Net interest margin2.86 %3.08 %
Ratio of average interest-earning assets to average interest bearing liabilities110.81 %112.46 %
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Rate/Volume Analysis

The following table sets forth the effects of changing rates and volumes on net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, increases or decreases attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on the changes due to rate and the changes due to volume.

Three Months Ended September 30,
2025 vs. 2024
Increase (Decrease) Due to
RateVolumeTotal
Interest income:
Other interest-earning assets$(1,225)$1,392 $167 
Investment securities78 (211)(133)
Loans held for sale(18,021)22,904 4,883 
Loans held for investment(3,847)6,753 2,906 
Total interest income(23,015)30,838 7,823 
Interest expense:
Demand(986)1,072 86 
Savings and NOW(1,244)2,664 1,420 
Money Market(181)446 265 
Time(6,608)8,402 1,794 
Borrowings583 107 690 
Total interest expense(8,436)12,691 4,255 
Net interest income$(14,579)$18,147 $3,568 
Non-Interest Income
Three Months Ended September 30,2025/2024 Increase/(Decrease)
20252024AmountPercent
Dividend income$425 $374 $51 13.6 %
Net loss on loan servicing assets(4,493)(1,786)(2,707)151.6 
Servicing income6,076 4,958 1,118 22.5 
Net gains on sales of loans9,563 25,675 (16,112)(62.8)
Net (loss) gain on residuals in securitizations
(1,450)— (1,450)100.0 
Net gain (loss) on loans under the fair value option29,250 (4,085)33,335 (816.0)
Technology and IT support income— 3,311 (3,311)(100.0)
Electronic payment processing income11,053 11,777 (724)(6.1)
Other noninterest income9,964 11,627 (1,663)(14.3)
  Total noninterest income$60,388 $51,851 $8,537 16.5 %
Dividend Income

For the three months ended September 30, 2025 and 2024, dividend income was dependent on the earnings of our joint ventures.
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Net Loss on Loan Servicing Assets
The Company accounts for servicing assets in accordance with ASC Topic 860-50 - Transfers and Servicing - Servicing Assets and Liabilities. The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells, from the SBA 7(a) loan securitizations sponsored by NSBF, and from servicing the ALP portfolios in securitizations sponsored by NCL JV (dissolved in September 2025), TSO JV and Newtek ALP Holdings. Servicing assets for loans originated by the Company’s nonbank subsidiaries are measured at FV at each reporting date and the Company reports changes in the FV of servicing assets in earnings in the period in which the changes occur. The valuation model for servicing assets incorporates assumptions including, but not limited to, servicing costs, discount rate, prepayment rate, and default rate. Considerable judgment is required to estimate the fair value of servicing assets and, as such, these assets are classified as Level 3 in our fair value hierarchy. Servicing assets for loans originated by Newtek Bank are measured at LCM and amortized based on their estimated life, and impairment is recorded to the extent the amortized cost exceeds the asset’s FV. Net loss on loan servicing assets is shown net of amortization expense.
The larger loss in Net loss on loan servicing assets is due to the decrease in NSBF’s total portfolio of loans during the wind-down.
Servicing Income
The increase in servicing income was related to an increase of $159.2 million in the average total loan portfolio for which we earn servicing income period over period.

Net Gains on Sales of Loans

Net gains on sales of loans for the three months ended September 30, 2025 and 2024 were as follows:

 Three Months Ended
 September 30, 2025September 30, 2024
Gains recognized on sales of loans
$9,563 $27,336 
Losses recognized on sales of loans
— (1,661)
Net gains on sales of loans
$9,563 $25,675 

 Three Months Ended
 September 30, 2025September 30, 2024
# of Loans$ Amount# of Loans$ Amount
SBA loans originated547 $187,253 639 $226,513 
SBA guaranteed loans sold210 69,086 525 176,002 
Average sale price as a percent of principal balance1
110.12 %110.78 %
1    Realized gains greater than 110.00% must be split 50/50 with the SBA in accordance with SBA regulations. The realized gains recognized above reflect amounts net of split with the SBA.

For the three months ended September 30, 2025, the average sale price on SBA 7(a) loans as a percent of principal balance was 110.12% compared to 110.78% for the prior period. The decrease in sales prices in 2025 resulted from lower demand. The decrease in overall net gains on sales of loans resulted from lower volumes of sales compared to the prior year at lower market premiums than the prior year. Additionally, the decrease in SBA 7(a) guaranteed loans sold is primarily due to management holding the loans for a longer period of time.

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The table below provides selected statistics on the historical net premiums on sales of guaranteed portions of SBA 7(a) loans realized by NewtekOne:

SBA 7(a) Sales Price as Percent of Principal Balance (%)
Average
HighLowMedian
Year ended December 31, 2023110.20 %114.04 %106.00 %110.42 %
Year ended December 31, 2024110.97 %114.80 %107.18 %111.19 %
Three months ended September 30, 2025110.21 %112.59 %108.31 %110.16 %
Weighted Average
110.59 %114.80 %106.00 %110.80 %

Net (Loss) Gain on Residuals in Securitizations

Net (loss) gain on residuals in securitizations for the three months ended September 30, 2025 were $(1.5) million. There were no net gains on residuals in securitizations for the three months ended September 30, 2024. This resulted from the Company’s equity interest in the 2025-1 Securitization Trust which closed on April 23, 2025. To consummate the transaction, $216.6 million of ALP loans held for sale at fair value were sold into the securitization trust at par. This resulted in $35.4 million of previously recorded gains on ALP loans under the fair value option to be reversed, which was a large driver of the change described in the section below. The residual in the securitization (represented by the ownership certificate) was then valued resulting in a gain that was netted against the transaction costs. Refer to NOTE 3—SECURITIZATIONS AND VARIABLE INTEREST ENTITIES in the accompanying notes to the consolidated financial statements for additional information.

Net Gain (Loss) on Loans Accounted for Under the Fair Value Option

Net gain (loss) on loans accounted for under the fair value option for the three months ended September 30, 2025 and 2024 were as follows:

For the three months ended
September 30, 2025September 30, 2024Change
SBA 7(a) Unguaranteed Loans$(3,319)$(11,538)$8,219 
SBA 7(a) Guaranteed Loans11,484 300 11,184 
SBA 504 and Non-SBA Loans21,085 7,153 13,932 
Net Gain (Loss) on Loans Accounted for Under the Fair Value Option$29,250 $(4,085)$33,335 

Net unrealized gain (loss) on loans accounted for under the fair value option relates to the guaranteed portions of SBA loans made which the Company sells into a secondary market, the unguaranteed portions of SBA loans made which the Company holds, SBA 504 loans that are HFS, and ALP loans that are held for sale. This unrealized gain (loss) represents the fair value adjustment of loans. The amount of the unrealized gain (loss) is determined by the quantity of loans held for sale at quarter end, the change in secondary market pricing conditions, and the valuation of the loans that are not held for sale.

During the three months ended September 30, 2025 and 2024, the Company recorded unrealized losses on SBA 7(a) unguaranteed loans accounted for under the fair value option as the portfolio paid down. During the three months ended September 30, 2024, the Company recorded unrealized gains on SBA 7(a) guaranteed loans accounted for under the fair value option primarily due to holding guaranteed portions of SBA 7(a) loans for longer periods of time.

The $13.9 million increase in unrealized gain on loans accounted for under the fair value option from SBA 504 and Non-SBA loans is primarily volume driven from the reversal of the previous gains on ALP loans to consummate the NALP 2025-1 transaction as noted above.
Technology and IT Support Income

Technology and IT support income was $3.3 million for the three months ended September 30, 2024. There was no Technology and IT support income for the three months ended September 30, 2025, due to the sale of NTS. Refer to NOTE 4—INVESTMENTS: Intelligent Protection Management Corp.
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Other Noninterest Income

For the three months ended September 30, 2025 and 2024, other noninterest income related primarily to loan origination fees (legal and packaging) on loans sold or carried at fair value. Other items that contributed to the $1.7 million decrease included a decrease on prepayment and late fees earned from SBA 7(a) loans. The Company originated 547 of SBA 7(a) loans compared to 639 loans for the three months ended September 30, 2025 and 2024, respectively. Adding to the decrease was $0.6 million of net unrealized losses on joint ventures and other non-control investments for the three months ended September 30, 2025 compared to none in the prior period.
Non-Interest Expense
Three Months Ended September 30,2025/2024 Increase/(Decrease)
2025September 30, 2024AmountPercent
Salaries and employee benefits expense$19,973 $19,149 $824 4.3 %
Technology services expense— 1,796 (1,796)(100.0)
Electronic payment processing expense4,429 4,438 (9)(0.2)
Professional services expense3,793 3,929 (136)(3.5)
Other loan origination and maintenance expense6,764 4,132 2,632 63.7 
Depreciation and amortization129 517 (388)(75.0)
Loss on extinguishment of debt179 — 179 100.0 
Other general and administrative costs6,892 4,886 2,006 41.1 
Total noninterest expense$42,159 $38,847 $3,312 8.5 %
Technology Services Expenses

The $1.8 million decrease in technology services expenses for the three months ended September 30, 2025 corresponded with the NTS Sale. Refer to NOTE 4—INVESTMENTS: Intelligent Protection Management Corp.
Other Loan Origination and Maintenance Expense

Other loan origination and maintenance expenses during the three months ended September 30, 2025, was $6.8 million compared to $4.1 million for the three months ended September 30, 2024. The increase was due to the increase in loans originated during the period.
Depreciation and Amortization
The decrease in depreciation and amortization period over period is primarily attributable to the full amortization of intangible assets during the second half of 2024, which results in less amortization in 2025 as compared to the prior year.
Loss on Extinguishment of Debt
The increase in loss on extinguishment of debt period over period is attributable to the repayment in full of the NMS Webster Note on September 26, 2025.
Other General and Administrative Costs

The increase in other general and administrative costs of $2.0 million is primarily driven by higher technology-related costs following the sale of NTS in 2025. These costs were previously eliminated in consolidation but are now recognized as standalone expenses post-divestiture.
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Results of Segment Operations

The Company has four reportable segments Banking, Alternative Lending, NSBF, and Payments. A description of each segment and the methodologies used to measure financial performance is described in NOTE 18—SEGMENTS in the accompanying Notes to the Consolidated Financial Statements. Net income (loss) by operating segment is presented below:

Three Months Ended September 30,2025/2024 Increase/(Decrease)
2025September 30, 2024AmountPercent
Banking$12,574 $13,485 $(911)(7)%
Alternative Lending22,318 16,377 5,941 36 %
Technology1
— 100 (100)(100)%
NSBF(4,884)(10,790)5,906 (55)%
Payments4,212 5,055 (843)(17)%
Corporate & Other9,062 7,070 1,992 28 %
Eliminations(25,381)(19,363)(6,018)31 %
Consolidated net income$17,901 $11,934 $5,967 50 %
1    As a result of commitments made to the Federal Reserve, the Company divested of NTS on January 2, 2025, and is no longer a reportable segment. See NOTE 4—INVESTMENTS: Intelligent Protection Management Corp.
Banking
The banking segment includes Newtek Bank as well as its consolidated subsidiary SBL. The financial results include the origination, sale, and servicing of SBA 7(a) loans, SBA 504 loans, C&I loans, CRE loans and ABL loans. In addition, Newtek Bank offers depository services. The results include $16.6 million of net interest income during the three months ended September 30, 2025 compared to $11.2 million of net interest income during the three months ended September 30, 2024.

Alternative Lending

Alternative Lending includes Newtek ALP Holdings (NALH) and its subsidiaries. The Company has originated loans under its Alternative Lending Program since 2019. Prior to July 1, 2024, the Company originated ALP loans with the intent to sell to a JV. While the Company continues to source JV partners to participate in this program, during the third quarter of 2024, the Company made the decision to originate with the intent to securitize ALP loans with our subsidiary Newtek ALP Holdings as the originator and sponsor without a joint venture partner; the Company’s first such securitization transaction was consummated during the second quarter of 2025. The Company could also originate ALP loans designated as HFI. On August 27, 2025, NALH entered into an interest purchase agreement with TCP to acquire TCP’s 50% ownership interest in NCL JV for $15.75 million, resulting in NALH owning 100% of NCL JV. Compared to the three months ended September 30, 2024, there were more loans originations that drove higher income for the three months ended September 30, 2025, as well as larger gains on loans at fair value.
NSBF
NSBF relates to NSBF’s legacy portfolio of SBA 7(a) loans held outside Newtek Bank. The change in net income is due to the wind-down of NSBF’s operations.
Payments
Payments includes NMS, POS and Mobil Money. Within the segment’s results are $11.9 million of noninterest income for the three months ended September 30, 2025, resulting from marketing credit and debit card processing services, check approval services, processing equipment, and software, compared to $12.5 million during the three months ended September 30, 2024. The net income also included $7.6 million and $7.3 million of noninterest expense for the three months ended September 30, 2025 and 2024, respectively.
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Corporate and Other
Corporate and Other represents operations not considered to be reportable segments and/or general operating expenses of the Company, and includes the parent company, other non-bank subsidiaries including NIA, PMT, and elimination adjustments to reconcile the results of the operating segments to the consolidated financial statements prepared in conformity with GAAP.


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Liquidity and Capital Resources
Overview

Our liquidity and capital resources are derived from our deposits, Company notes, securitization transactions and earnings and cash flows from operations, including loan sales and repayments. In the nine months ended September 30, 2025, our primary use of funds from operations included originations of loans and payments of fees, interest, and other operating expenses we incurred. We may raise additional equity or debt capital through both registered offerings off of a shelf registration, including “at-the-market” (ATM), and private offerings of securities. On January 27, 2023, the Company submitted a Form S-3 with the SEC in order to commence the process of re-establishing an effective shelf registration statement. The registration statement on Form S-3 was declared effective by the SEC on July 27, 2023. On November 17, 2023, the Company entered into the Original ATM Equity Distribution Agreement, which was amended and restated on June 6, 2025. The Amended and Restated Equity Distribution Agreement provides that the Company may offer and sell up to 5,000,000 shares of Common Stock from time to time through the placement agents. On November 1, 2024, the Company’s Board of Directors approved a new stock repurchase program granting the Company authority to repurchase up to 1.0 million shares of Company common stock during the next twelve months. In addition, on September 11, 2025, the Board approved a debt repurchase program granting the Company authority to repurchase up to $5.0 million aggregate principal amount of the Company’s 2029 Notes during the following six months.

Public Offerings

Equity ATM Program

The Company’s shelf registration statement on Form S-3 was declared effective by the SEC on July 27, 2023. On November 17, 2023, the Company entered into the Original ATM Equity Distribution Agreement. The Original ATM Equity Distribution Agreement provided that the Company may offer and sell up to 3.0 million shares of Common Stock from time to time through the placement agents thereunder. The Original ATM Equity Distribution Agreement was amended and restated on June 6, 2025. The Amended and Restated Equity Distribution Agreement provides that the Company may offer and sell up to 5.0 million shares of Common Stock from time to time through the placement agents thereunder (inclusive of shares of Common Stock sold under the Original ATM Distribution Agreement) and added certain additional placement agents. The Company may, subject to market conditions, engage in activity under the ATM Program.

The following table summarizes the total shares sold and net proceeds received under the ATM Equity Distribution Agreement:
Three Months Ended September 30,Nine months ended September 30,
2023 ATM Program
2025202420252024
Shares sold425 — 425 1,100 
Net weighted average price per share$12.22 $— $12.22 $12.56 
Net proceeds$5,090 $— $5,090 $13,818 
Placement agent fees paid
$104 $— $104 $282 

Stock and Debt Repurchase Programs

On November 1, 2024, the Company’s Board approved a new stock repurchase program granting the Company authority to repurchase up to 1.0 million shares of Company common stock during the following twelve months. The actual timing and amount of any repurchases under the plan will be determined by the Company in its discretion, and will depend on a number of factors, including market conditions, applicable legal requirements, the Company's capital needs and whether there is a better alternative use of capital. The Company has no obligation to repurchase any amount of its common stock under its new stock repurchase program. In addition, on September 11, 2025, the Board approved a debt repurchase program granting the Company authority to repurchase up to $5.0 million aggregate principal amount of the Company’s 2029 Notes during the following six months. The actual timing and amount of any repurchases under the debt repurchase plan will be determined by the Company in its discretion, and will depend on a number of factors, including market conditions, applicable legal requirements, the Company's capital needs and whether there is a better alternative use of capital. The Company has no obligation to repurchase any amount of its debt securities under this debt repurchase program. Pursuant to the debt repurchase program, the Company repurchased 2,700 shares of it s 2029 8.50% Notes on September 22, 2025.A

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The following table summarizes the total shares repurchased and net proceeds received under the stock repurchase program:
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Shares repurchased
— — 16 — 
Net weighted average price per share$— $— $10.42 $— 
Net proceeds$— $— $167 $— 
2029 Notes

On May 30, 2024, the Company completed a registered offering of $71.9 million in aggregate principal amount of its 2029 8.50% Notes, which includes the underwriters’ exercise of the option granted by the Company to purchase an additional $9.4 million in aggregate principal amount of the 2029 8.50% Notes. The Company received $69.6 million in proceeds, before expenses, from the sale of the 2029 8.50% Notes. The 2029 8.50% Notes bear interest at a rate of 8.50% per year payable quarterly on March 1, June 1, September 1 and December 1 of each year, commencing on September 1, 2024, and trade on the Nasdaq Global Market under the trading symbol “NEWTG.” At September 30, 2025, the Company was in compliance with all covenants related to the 2029 8.50% Notes.

On September 16, 2024, the Company completed a registered offering of $75.0 million aggregate principal amount of 2029 8.625% Notes. The 2029 8.625% Notes will mature on October 15, 2029. The Company received $72.8 million in proceeds, before expenses, from the sale of the 2029 8.625% Notes. These Notes bear interest at a rate of 8.625% per year, payable quarterly on January 15, April 15, July 15, and October 15 each year, commencing on January 15, 2025. , and trade on the Nasdaq Global Market under the trading symbol “NEWTH.” At September 30, 2025, the Company was in compliance with all covenants related to the 2029 8.625% Notes.

2028 Notes

On August 31, 2023, the Company completed a registered offering of $40.0 million in aggregate principal amount of its 8.00% 2028 Notes. The Company received $38.0 million in proceeds, before expenses, from the sale of the 2028 Notes. The 2028 Notes bear interest at a rate of 8.00% per year payable quarterly on March 1, June 1, September 1 and December 1 of each year, commencing on December 1, 2023, and trade on the Nasdaq Global Market under the trading symbol “NEWTI.” At September 30, 2025, the Company was in compliance with all covenants related to the 2028 Notes.

2026 Notes

In January 2021, the Company completed a registered offering of $115.0 million aggregate principal amount of 5.50% 2026 Notes. The sale of the 2026 Notes generated proceeds of approximately $111.3 million, net of underwriter's fees and expenses. The 2026 Notes will mature on February 1, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. The 2026 Notes bear interest at a rate of 5.50% per year payable quarterly on February 1, May 1, August 1 and November 1 of each year, commencing on May 1, 2021, and trade on the Nasdaq Global Market under the trading symbol “NEWTZ.” At September 30, 2025, the Company was in compliance with all covenants related to the 2026 Notes.

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The 2029, 2028 and 2026 Notes are the Company’s direct unsecured obligations and rank: (i) pari passu with the Company’s other outstanding and future unsecured indebtedness; (ii) senior to any of the Company’s future indebtedness that expressly provides it is subordinated to these Notes; (iii) effectively subordinated to all the Company’s existing and future secured indebtedness (including indebtedness that is initially unsecured to which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries. The Base Indenture, and each supplemental indenture thereto, contains certain covenants. The Base Indenture provides for customary events of default and further provides that the Trustee or the holders of 25% in aggregate principal amount of the outstanding Notes may declare such Notes immediately due and payable upon the occurrence of any event of default after expiration of any applicable grace period. In addition, the supplemental indenture for the 2026 Notes includes covenants requiring the Company to comply with (regardless of whether it is subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) of the 1940 Act as modified by Section 61(a) of the 1940 Act (or any successor provisions), to comply with (regardless of whether it is subject to) the restrictions on dividends, distributions and purchase of capital stock set forth in Section 18(a)(1)(B) of the 1940 Act as modified by Section 61(a) of the 1940 Act and to provide financial information to the holders of the 2026 Notes and the Trustee if the Company should no longer be subject to the reporting requirements under the Exchange Act (“BDC Covenants”). These covenants are subject to important limitations and exceptions that are described in the Base Indenture, as supplemented by the supplemental indentures. At September 30, 2025, the Company was in compliance with all covenants related to the Notes.

2024 Notes

In July 2019, the Company completed a registered offering of $63.25 million aggregate principal amount of 5.75% 2024 Notes. On February 16, 2021 and May 20, 2021, the Company issued an additional $5.0 million and $10.0 million in aggregate principal amount of the 2024 Notes, respectively. On December 29, 2021, the Company redeemed $40.0 million in aggregate principal amount of the $78.25 million of principal amount of 2024 Notes outstanding at 100% of their principal amount ($25 per Note), plus the accrued and unpaid interest thereon from November 1, 2021 through, but excluding, the redemption date. The 2024 Notes traded on the Nasdaq Global Market under the trading symbol “NEWTL” until the 2024 Notes matured on August 1, 2024.

Private Placements

2030 Notes

On March 19, 2025, the Company closed an exempt offering of $30.0 million in aggregate principal amount of its 2030 Notes. The offering was consummated pursuant to the terms of a purchase agreement dated March 19, 2025 among the Company and eleven institutional accredited investors. The purchase agreement provided for the 2030 Notes to be issued to the Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act. The 2030 Notes are scheduled to mature on April 1, 2030 and could be redeemed in whole or in part at any time. The 2030 Notes bear interest at a rate of 8.375% per year payable semiannually on April 1 and October 1 each year, beginning October 1, 2025.

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2027 Notes

On January 23, 2023, we completed a private placement offering of $50.0 million aggregate principal amount of 8.125% notes due 2025. The net proceeds from the sale of the notes were approximately $48.94 million after deducting estimated offering expenses payable by the Company. The Notes were scheduled to mature on February 1, 2025. Effective December 11, 2024, the Company entered into the Amendment and Exchange Agreements with each of the holders of the 2025 8.125% Notes, pursuant to which the Company and the holders of the 2025 8.125% Notes agreed to exchange the 2025 8.125% Notes for the 2027 Notes, effecting amendments solely to (i) extend the February 1, 2025 maturity date of the 2025 8.125% Notes to the new maturity date of February 1, 2027 (the “New Maturity Date”) and (ii) provide that the 2027 Notes will be redeemable in whole, but not in part, at any time, at the option of the Company, from November 1, 2026 to the New Maturity Date, at a redemption price of 100% of the outstanding principal amount being redeemed plus any accrued but unpaid interest, to but excluding the redemption date. The Notes bear interest at a rate of 8.125% per year payable semiannually on February 1 and August 1 each year.

2025 Notes

On March 31, 2022, the Company completed a private placement of $15.0 million aggregate principal amount of its 2025 5.00% Notes. The offering was consummated pursuant to the terms of a purchase agreement dated March 31, 2022 among the Company and an accredited investor, which provided for the 2025 5.00% Notes to be issued to the purchaser in a transaction that relied on Section 4(a)(2) of the Securities Act to be exempt from registration under the Securities Act. The net proceeds from the sale of the notes were approximately $14.5 million, after deducting structuring fees and estimated offering expenses. On May 2, 2022, the Company issued an additional $15.0 million in aggregate principal amount of the 2025 5.0% Notes. The 2025 5.00% Notes were issued under the Base Indenture and the Tenth Supplemental Indenture, dated as of March 31, 2022. The 2025 5.00% Notes matured on March 31, 2025.

NMS Webster Note
On September 26, 2025, the Company’s wholly-owned subsidiary NMS repaid in full all of the outstanding obligations under that certain Credit Agreement, dated as of November 8, 2018. As a result, the Webster Credit Agreement and the other loan documents executed in connection therewith have been terminated, including that certain Parent Guaranty Agreement, dated as of November 8, 2018, by and between the Company and Webster Bank. No early termination penalties were incurred by the Company or the Loan Parties as a result of the termination. As a result of the termination, the Company recognized a $0.2 million loss on extinguishment of debt.

NMS Goldman Facility
On September 26, 2025, NMS and its wholly-owned subsidiary, Mobil Money, LLC (collectively, the “Borrowers”), together with NBSH Holdings, LLC, the direct sole member of NMS, as guarantor, entered into a Credit and Guaranty Agreement (the “Goldman Credit Agreement”), with Private Credit at Goldman Sachs Alternatives ("Goldman") as Administrative Agent and Collateral Agent thereunder and the lenders party thereto from time to time (the “Lenders”). Pursuant to the terms of the Goldman Credit Agreement, the Lenders made available to the Borrowers term loans up to an aggregate principal amount of $90.0 million (the “Term Loans”) and a revolving facility up to an aggregate principal amount of $5.0 million (together with the Term Loans, collectively the “Goldman Facility”). The Goldman Facility will mature on September 26, 2030. At September 30, 2025, total principal outstanding was $88.6 million. The Company incurred approximately $1.4 million of deferred financing costs in connection with the Goldman Facility.

SPV I, II, and III Facilities
Newtek ALP Holdings’ subsidiaries (our indirect subsidiaries) SPV I, II, and III maintain credit facilities with third party lenders. SPV I has a Capital One facility with maximum borrowings of $100.0 million. Capital One’s commitment terminates in July 2027, with all amounts due under the SPV I Facility maturing in July 2028. At September 30, 2025, total principal owed by SPV I was $23.7 million. SPV II has a Deutsche Bank facility with maximum borrowings $170.0 million. The Deutsche Bank Facility matures in December 2027. At September 30, 2025, total principal owed by SPV II was $104.7 million. SPV III has a One Florida Bank facility with maximum borrowings of $35.0 million. On August 7, 2025, the One Florida Bank Facility was amended and upsized to maximum borrowings of $35.0 million; One Florida Bank’s facility matures in August 2028. At September 30, 2025, total principal owed by SPV III was $8.3 million.
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Securitization Transactions
On April 23, 2025, the Company’s subsidiary Newtek ALP Holdings closed a securitization pursuant to which it sold $155,930,000 of Class A Notes, $23,820,000 of Class B Notes, and $4,330,000 of a Class C Note (collectively, the “2025-1 Notes”) issued by NALP Business Loan Trust 2025-1 (the “Securitization Trust”). The 2025-1 Notes were backed by $216,564,700 of collateral, consisting of Newtek ALP Holdings originated ALP loans. The Class A Notes received a Morningstar DBRS rating of “A (low) (sf)” and were priced at a yield of 6.338%; the Class B Notes received a Morningstar DBRS rating of “BBB (sf)” and were priced at a yield of 7.838%; and the Class C Note received a Morningstar DBRS rating of “BB (sf)” and was priced at a yield of 10.338%. The 2025-1 Notes had a weighted average yield of 6.62% and an 85% advance rate.

From 2010 through June 2023, NSBF engaged in thirteen (13) securitizations of the unguaranteed portions of its SBA 7(a) loans. In the securitizations, NSBF used a special purpose entity (the “Trust”) which is considered a variable interest entity. Applying the consolidation requirements for VIEs under the accounting rules in ASC Topic 860, Transfers and Servicing, and ASC Topic 810, Consolidation, which became effective January 1, 2010, the Company determined that as the primary beneficiary of the securitization vehicle, based on its power to direct activities through its role as servicer for the Trust and its obligation to absorb losses and right to receive benefits, it needed to consolidate the Trusts. NSBF therefore consolidated the entity using the carrying amounts of the Trust’s assets and liabilities. NSBF reflects the legacy portfolio of SBA 7(a) loans and reflects the associated financing in Notes Payable - Securitization trusts on the Consolidated Statements of Financial Condition.

In June 2023, NSBF completed its thirteenth securitization which resulted in the transfer of $103.9 million of unguaranteed portions of SBA loans to the 2023-1 Trust. The 2023-1 Trust in turn issued securitization notes for the par amount of $103.9 million, consisting of $84.3 million of Class A notes and $19.6 million Class B notes, against the 2023-1 Trust assets in a private placement. The Class A and Class B notes received an “A-” and “BBB-” rating by S&P, respectively, and the final maturity date of the notes is October 2049. The Class A and Class B notes bear interest at an average rate of 30-day average compounded SOFR plus 3.24% across both classes. At such time as the sum of the principal amount of the Class A Notes and the Class B Notes is less than or equal to 20.00% of the sum of the principal amount of the Class A Notes and Class B Notes as of the closing date of the transaction, NSBF has the right, with the consent of the SBA, to terminate the 2023-1 Trust by purchasing the 2023-1 Trust assets, with the Class A and B noteholders receiving the redemption price from the proceeds.

In September 2022, NSBF completed its twelfth securitization which resulted in the transfer of $116.2 million of unguaranteed portions of SBA loans to the 2022-1 Trust. The 2022-1 Trust in turn issued securitization notes for the par amount of $116.2 million, consisting of $95.4 million of Class A notes and $20.8 million Class B notes, against the 2022-1 Trust assets in a private placement. The Class A and Class B notes received an “A-” and “BBB-” rating by S&P, respectively, and the final maturity date of the notes is October 2049. The Class A and Class B notes bear interest at an average rate of 30-day average compounded SOFR plus 2.97% across both classes. At such time as the sum of the principal amount of the Class A Notes and the Class B Notes is less than or equal to 20.00% of the sum of the principal amount of the Class A Notes and Class B Notes as of the closing date of the transaction, NSBF has the right, with the consent of the SBA, to terminate the 2022-1 Trust by purchasing the 2022-1 Trust assets, with the Class A and B noteholders receiving the redemption price from the proceeds.

In December 2021, NSBF completed its eleventh securitization which resulted in the transfer of $103.4 million of unguaranteed portions of SBA loans to the 2021-1 Trust. The 2021-1 Trust in turn issued securitization notes for the par amount of $103.4 million, consisting of $79.7 million of Class A notes and $23.8 million Class B notes, against the 2021-1 Trust assets in a private placement. The Class A and Class B notes received an “A” and “BBB-” rating by S&P, respectively, and the final maturity date of the notes is December 2048. The Class A and Class B notes bear interest at an average rate of adjusted SOFR plus 1.92% across both classes. At such time as the sum of the principal amount of the Class A Notes and the Class B Notes is less than or equal to 20.00% of the sum of the principal amount of the Class A Notes and Class B Notes as of the closing date of the transaction, NSBF has the right, with the consent of the SBA, to terminate the 2021-1 Trust by purchasing the 2021-1 Trust assets, with the Class A and B noteholders receiving the redemption price from the proceeds.

In October 2019, NSBF completed its tenth securitization which resulted in the transfer of $118.9 million of unguaranteed portions of SBA loans to the 2019-1 Trust. The 2019-1 Trust in turn issued securitization notes for the par amount of $118.9 million, consisting of $93.5 million of Class A notes and $25.4 million Class B notes, against the 2019-1 Trust assets in a private placement. The Class A and Class B notes received an “A” and “BBB-” rating by S&P, respectively, and the final maturity date of the notes is December 2044. The Class A and Class B notes bear interest at an average rate of adjusted SOFR plus 1.83% across both classes. In October, 2024, the 2019-1 Trust was terminated as a result of NSBF purchasing the 2019-1 Trust assets, with the 2019-1 Trust’s noteholders receiving the redemption price.

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In November 2018, NSBF completed its ninth securitization which resulted in the transfer of $108.6 million of unguaranteed portions of SBA loans to the 2018-1 Trust. The 2018-1 Trust in turn issued securitization notes for the par amount of $108.6 million, consisting of $82.9 million Class A notes and $25.7 million of Class B notes, against the assets in a private placement. The Class A and Class B notes received an “A” and “BBB-” rating by S&P, respectively, and the final maturity date of the notes is February 2044. In October, 2024, the 2018-1 Trust was terminated as a result of NSBF purchasing the 2018-1 Trust assets, with the 2018-1 Trust’s noteholders receiving the redemption price.

In December 2017, NSBF completed its eighth securitization which resulted in the transfer of $76.2 million of unguaranteed portions of SBA loans to the 2017-1 Trust. The 2017-1 Trust in turn issued securitization notes for the par amount of $75.4 million, consisting of $58.1 million Class A notes and $17.3 million of Class B notes, against the assets in a private placement. The Class A and Class B notes received an “A” and “BBB-” rating by S&P, respectively, and the final maturity date of the notes is February 2043. On February 27, 2023, the 2017-1 Trust was terminated as a result of NSBF purchasing the 2017-1 Trust assets, with the 2017-1 Trust’s noteholders receiving the redemption price.

Regulatory Capital

The Company strives to maintain prudent capital levels to absorb risk and maximizing returns to shareholders. The Company and Newtek Bank are primarily constrained by the Total Capital and Leverage ratios given the mix of assets vis-a-vis capital.

Capital amounts and ratios for the Company as of September 30, 2025 and 2024 are presented in the table below:
Actual
For Capital Adequacy Purposes1
For Consideration as Well-Capitalized
NewtekOne, Inc. - September 30, 2025
Amount
Ratio
Amount
Ratio
Amount
Ratio
Tier 1 Capital (to Average Assets)$351,998 15.8 %$89,119 4.0 %N/AN/A
Common Equity Tier 1 (to Risk-Weighted Assets)303,817 18.0 %76,062 4.5 %N/AN/A
Tier 1 Capital (to Risk-Weighted Assets)351,998 20.8 %101,416 6.0 %N/AN/A
Total Capital (to Risk-Weighted Assets)373,429 22.1 %135,222 8.0 %N/AN/A
NewtekOne, Inc. - September 30, 2024
Tier 1 Capital (to Average Assets)$218,604 13.9 %$62,703 4.0 %N/AN/A
Common Equity Tier 1 (to Risk-Weighted Assets)218,604 17.7 %55,678 4.5 %N/AN/A
Tier 1 Capital (to Risk-Weighted Assets)218,604 17.7 %74,237 6.0 %N/AN/A
Total Capital (to Risk-Weighted Assets)253,942 20.5 %98,983 8.0 %N/AN/A
1 Exclusive of the capital conservation buffer of 2.5% of risk-weighted assets.

Capital amounts and ratios for Newtek Bank as of September 30, 2025, and 2024 are presented in the table below. As of September 30, 2025 and 2024, Newtek Bank was categorized as “well-capitalized” under the prompt corrective action measures and met the capital conservation buffer requirements.
Actual
For Capital Adequacy Purposes1
For Consideration as Well-Capitalized
Newtek Bank - September 30, 2025
Amount
Ratio
Amount
Ratio
Amount
Ratio
Tier 1 Capital (to Average Assets)$150,178 11.2 %$53,683 4.0 %$67,103 5.0 %
Common Equity Tier 1 (to Risk-Weighted Assets)150,178 13.0 %52,066 4.5 %75,206 6.5 %
Tier 1 Capital (to Risk-Weighted Assets)150,178 13.0 %69,421 6.0 %92,562 8.0 %
Total Capital (to Risk-Weighted Assets)165,026 14.3 %92,562 8.0 %115,702 10.0 %
Newtek Bank - September 30, 2024
Tier 1 Capital (to Average Assets)$112,836 13.3 %33,941 4.0 %$42,426 5.0 %
Common Equity Tier 1 (to Risk-Weighted Assets)112,836 15.5 %32,742 4.5 %47,294 6.5 %
Tier 1 Capital (to Risk-Weighted Assets)112,836 15.5 %43,656 6.0 %58,208 8.0 %
Total Capital (to Risk-Weighted Assets)122,144 16.8 %58,207 8.0 %72,759 10.0 %
1 Exclusive of the capital conservation buffer of 2.5% of risk-weighted assets.

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Cash Flows and Liquidity
The following table summarizes the Company’s available sources of liquidity as of September 30, 2025 and December 31, 2024:
Availability as of
September 30, 2025December 31, 2024
Unrestricted cash$3,980$6,941
Lines of credit at other commercial banks1
58,25660,903
Newtek Bank:
Interest bearing deposits in banks
188,214346,207
FHLB borrowing availability1
61,00439,780
Lines of credit at other financial institutions30,00030,000
Total liquidity sources$341,454$483,831
1    Availability as of September 30, 2025 and December 31, 2024 is based on collateral pledged as of that date.

The Company has restricted cash of $24.7 million as of September 30, 2025. NSBF holds $7.6 million of the Company’s restricted cash, which includes reserves in the event payments are insufficient to cover interest and/or principal with respect to securitizations and loan principal and interest collected which are due to loan participants. In addition, the Company has funded a $10.0 million account at Newtek Bank to fund certain of NSBF’s potential obligations to the SBA pursuant to the Wind-down Agreement. of which the Company is a guarantor. The majority of the Company’s remaining restricted cash is held by the parent company.

The Company generated and used cash as follows:
Nine Months Ended September 30,
20252024
Net cash used in operating activities$(427,836)$(61,419)
Net cash used in investing activities(193,876)(122,833)
Net cash provided by financing activities457,269 192,132 
Net (decrease) increase in cash and restricted cash(164,443)7,880 
Cash and restricted cash—beginning of period (NOTE 2)
381,374 184,006 
Deconsolidation of cash and restricted cash from controlled investments related to business dispositions
— (1,464)
Cash and restricted cash—end of period (NOTE 2)
$216,931 $190,422 

During the nine months ended September 30, 2025, operating activities used cash of $427.8 million, consisting primarily of $778.0 million of funding loans held for sale. This use of cash was partially offset by (i) $310.2 million of proceeds from the sale of loans; and (ii) $52.0 million from the payment of settlement receivables.
Cash used by investing activities was $193.9 million primarily comprised (i) $242.8 million in the net increase in loans held for investment, at cost; (ii) $15.8 million in contributions to joint ventures and other non-control investments; and (iii) $11.6 million in purchases of available-for-sale securities. These uses were partially offset by (i) a $53.9 million principal received on loans held for investment, at fair value; and (ii) $18.0 million in maturities of available-for-sale securities.
Net cash provided by financing activities was $457.3 million consisting primarily of a (i) $390.2 million of borrowings on bank notes payable; (ii) $204.4 million net increase in deposits; (iii) $48.2 million of proceeds from preferred stock, net of offering costs; and (iv) $30.0 million of proceeds from the 2030 Notes. These sources of cash were partially offset by (i) $295.5 million repayment of bank notes payable; (ii) $46.7 million of principal payments related to Notes Payable - Securitization Trusts; (iii) $30.0 million maturity of the 2025 5.00% Notes; and (iv) $16.2 million of dividends paid.
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Contractual Obligations
The following table represents the Company’s obligations and commitments as of September 30, 2025. Amounts represent principal only and are not shown net of unamortized debt issuance costs. See NOTE 11—BORROWINGS.
Payments due by period
Contractual ObligationsTotal20252026202720282029Thereafter
Deposits:
Demand$21,771 $21,771 $— $— $— $— $— 
Checking154,754 154,754 — — — — — 
Money market64,284 64,284 — — — — — 
Savings455,624 455,624 — — — — — 
Time deposits481,531 158,023 275,302 37,559 10,509 117 21 
NMS Goldman Facility1
90,000 225 894 885 877 868 86,251 
FHLB Advances7,861 513 2,094 5,254 — — — 
SPV I Capital One Facility2
23,740 23,740 — — — — — 
SPV II Deutsche Bank Facility2
104,691 — — 104,691 — — — 
SPV III One Florida Bank Facility2
8,307 8,307 — — — — — 
Securitization Notes Payable142,560 — — — — — 142,560 
Parent Company Notes:
2026 Notes115,000 — 115,000 — — — 
2027 Notes3
50,000 — — 50,000 — — 
2028 Notes40,000 — — — 40,000 — 
2029 8.625% Notes75,000 — — — — 75,000 — 
2029 8.50% Notes71,808 — — — — 71,808 — 
2030 Notes30,000 — — — — — 30,000 
Employment Agreements41,404 702 702 — — — — 
Operating Leases3,723 167 499 329 242 249 2,237 
Totals$1,942,058 $888,110 $394,491 $198,718 $51,628 $148,042 $261,069 
1    Guaranteed by NBSH.
2    Guaranteed by the parent company
3    Effective December 11, 2024, the Company entered into the Amendment and Exchange Agreements with each of the holders of the 2025 8.125% Notes, pursuant to which the Company and the holders of the 2025 8.125% Notes agreed to exchange the 2025 8.125% Notes for the 2027 Notes.
4    Employment agreements with the Company’s named executive officers

Guarantees

The Company is a guarantor on several warehouse lines of credit as noted in the above table under Contractual Obligations. Refer to NOTE 11—BORROWINGS to the consolidated financial statements for the amounts outstanding, line availability, and term. The Company is also a guarantor on an NMS term loan facility. At September 30, 2025, the Company determined that it is not probable that payments would be required to be made under the guarantees. The Company is also a guarantor on certain of NSBF’s potential obligations to the SBA pursuant to the Wind-down Agreement. Specifically, pursuant to the Wind-down Agreement, the Company has guaranteed NSBF’s obligations to the SBA for post-purchase repairs or denials on the guaranteed portion of 7(a) Loans sold by NSBF on the secondary market or servicing/liquidation post-purchase repairs or denial, and has funded a $10.0 million account to secure these potential obligations.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies for the quarterly period ended September 30, 2025.
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Valuation of Loans at Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, management used various valuation approaches. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels for disclosure purposes. We consider our loans HFI, at fair value and HFS, at fair value to be Level 3 within the fair value hierarchy as described in Note 10. Determining the fair value of the Level 3 loans held for sale and loans held for investment, which are measured at fair value requires management to make significant judgments about the valuation methodologies and inputs and assumptions used in the fair value calculation, including, but not limited to, historical credit losses, discounts for lack of marketability, underlying cash flows, and the impact of economic conditions.

On a quarterly basis, management determines the fair values of the retained unguaranteed portions of SBA 7(a) loans HFI, and unrealized changes in FV are recognized in the income statement. The loans within this portfolio were originated by NSBF. NSBF ceased originating new loans in April 2023 when all new SBA 7(a) loan originations were transitioned to Newtek Bank. (See Historical Business Regulation and Taxation, for a discussion of the wind-down of NSBF’s operations.)

The Company originated SBA 504 loans HFS prior to the Acquisition through its nonbank subsidiaries. SBA 504 loans HFS held at NALH are accounted for under the FV option. Additionally, the existing government guaranteed portion of SBA 7(a) loans held at NSBF and certain SBA 504 loans held at Newtek Bank are also HFS at FV.

The Company also originates ALP loans (formerly referred to as our nonconforming conventional loans), which are either HFS or HFI, via its nonbank subsidiary. ALP loans are carried at FV. ALP loans are held at NALH and TSO JV and are also accounted for under the FV option.

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for credit losses and the reserve for unfunded commitments. As a result of the Company’s Acquisition the adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”) and its related amendments, we developed a methodology for estimating the reserve for credit losses. The standard replaced the “incurred loss” approach with an “expected loss” approach known as current expected credit loss. The CECL approach requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures). It removes the incurred loss approach’s threshold that delayed the recognition of a credit loss until it was “probable” a loss event was “incurred.” The estimate of expected credit losses under the CECL approach is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. The Company then considers whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the period from which historical experience was used. Finally, the Company considers forecasts about future economic conditions that are reasonable and supportable. The reserve for unfunded commitments represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. The reserve for unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws.

Management of the Company considers the accounting policy relating to the allowance for credit losses to be a critical accounting policy given the uncertainty in evaluating the level of the allowance required to cover management’s estimate of all expected credit losses over the expected contractual life of our loan portfolio. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the then-existing loan portfolio and other financial assets to which CECL applies, in light of the factors then prevailing, may result in significant changes in the allowance for credit losses in those future periods. While management’s current evaluation of the allowance for credit losses indicates that the allowance is appropriate, the allowance may need to be increased under adversely different conditions or assumptions. Going forward, the impact of utilizing the CECL approach to calculate the reserve for credit losses will be significantly influenced by the composition, characteristics, and quality of our loan portfolio, as well as the prevailing economic conditions and forecasts utilized. Material changes to these and other relevant factors may result in greater volatility in the reserve for credit losses, and therefore, greater volatility to our reported earnings.

Consideration of losses occurs when serious doubt regarding the repayment of the loan is present. For real estate loans, current appraisals will aid in determining the amount to be charged off. For commercial loans, collateral valuations and borrower guarantees should be considered; however, weight to these two sources should be limited. Once a deficiency in collateral is determined, a reserve equal to the deficiency should be made immediately to the Allowance for Credit Losses (ACL). A charge
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off should be made within 90 days if a full analysis confirms the deficiency cannot be covered via additional collateral or resources of the borrower or guarantors.

Valuation of Servicing Assets

For the quarterly period ended September 30, 2025, the Company accounted for servicing assets in accordance with ASC Topic 860-50 - Transfers and Servicing - Servicing Assets and Liabilities. The Company and Newtek Bank earn servicing fees primarily from the guaranteed portions of SBA 7(a) loans and to a lesser extent ALP and SBA 504 loans they originate and sell. Servicing assets for loans originated by the Company’s nonbank subsidiaries are measured at FV at each reporting date and the Company reports changes in the FV of servicing assets in earnings in the period in which the changes occur. The valuation model for servicing assets incorporates assumptions including, but not limited to, servicing costs, discount rate, prepayment rate, and default rate. Considerable judgment is required to estimate the fair value of servicing assets and as such these assets are classified as Level 3 in our fair value hierarchy. Servicing assets for loans originated by Newtek Bank are measured at LCM and amortized based on their estimated life and impairment is recorded to the extent the amortized cost exceeds the asset’s FV.

Recently Adopted Accounting Pronouncements and New Accounting Standards

Refer to NOTE 2—SIGNIFICANT ACCOUNTING POLICIES for information on recently adopted accounting pronouncements and new accounting standards.

Off Balance Sheet Arrangements

In the normal course of business, the Company enters into various transactions to meet the financing needs of clients, which, in accordance with GAAP, are not included in the consolidated balance sheets. These transactions may include commitments to extend credit, standby letters of credit, and the construction phase of SBA 504 loans, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The SBA 504 loans are expected to partially draw, if not fully draw. All off-balance sheet commitments are included in the determination of the amount of risk-based capital that the Company and Newtek Bank are required to hold.

The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit, standby letters of credit, and commercial letters of credit is represented by the contractual or notional amount of those instruments. The Company manages risk of exposure to credit losses under these commitments by subjecting them to credit approval and monitoring procedures. The Company assesses the credit risk associated with certain commitments to extend credit and establishes a liability for credit losses.

Further information related to financial instruments can be found in NOTE 13—COMMITMENTS AND CONTINGENCIES.

Residuals in Securitizations, at Fair Value

On April 23, 2025, the Company’s subsidiary Newtek ALP Holdings closed a securitization pursuant to which it sold $155.9 million of Class A Notes, $23.8 million of Class B Notes, and $4.3 million of a Class C Note (collectively, the “2025-1 Notes”) issued by NALP Business Loan Trust 2025-1 (the “Securitization Trust”). The 2025-1 Notes were backed by $216.6 million of collateral, consisting of Newtek ALP Holdings originated ALP loans. The Class A Notes received a Morningstar DBRS rating of “A (low) (sf)” and were priced at a yield of 6.338%; the Class B Notes received a Morningstar DBRS rating of “BBB (sf)” and were priced at a yield of 7.838%; and the Class C Note received a Morningstar DBRS rating of “BB (sf)” and was priced at a yield of 10.338%. The 2025-1 Notes had a weighted average yield of 6.62% and an 85% advance rate.

The 2025-1 Trust meets the definition of a VIE and the Company holds a variable interest in the 2025-1 Trust, however, the Company is not considered the primary beneficiary of the 2025-1 Trust, because the power over the activities that have the most significant impact on the economic performance of the Securitization Trust is held by a single noteholder who has the ability to remove the Company as decision maker over the activities that most significantly impact the economic performance of the 2025-1 Trust. Consequently the Company is not required to consolidate the 2025-1 Trust. The Company’s beneficial interest in the 2025-1 Trust is evidenced by sole ownership of the Ownership Certificate and its beneficial interest in the credit risk of the securitized ALP Loans. Newtek ALP Holdings, the sponsor of the Securitization Trust, is a wholly owned subsidiary of the Company, therefore the Company effectively owns 100% of the equity interest in the 2025-1Trust.
Further information related to financial instruments can be found in NOTE 3—SECURITIZATIONS AND VARIABLE INTEREST ENTITIES.
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Recent Developments

Note Purchase and Exchange

On October 21, 2025, the Company entered into agreements with two institutional investors that were existing holders of the Company’s 2026 Notes to exchange the $20.0 million in total principal amount of the Company’s 2026 Notes held by such investors for an equal principal amount of the Company’s 2030 Notes. One of the investors also agreed to purchase $2.0 million in newly issued additional principal amount of the Company’s 2030 Notes. The transactions were conducted pursuant to exemptions from the registration requirements of the Securities Act.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We consider the principal types of risk in our business activities to be fluctuations in interest rates, the ability to raise funds (deposits, debt, and or equity) to fund our operations, and the availability of the secondary market for our SBA loans. Risk management systems and procedures are designed to identify and analyze our risks, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs.

The Company’s interest rate profile on loans is based on a mix of fixed and variable rates. The same is true for its sources of funding (deposits, warehouse lines of credit, securitization trust notes, public notes, etc.). Some of our assets and liabilities are match funded, meaning that the interest rate and duration profiles are closely linked. Managing interest rate risk with matched funding means that movements in interest rates are expected to largely offset between income from assets and expenses on liabilities. For the remainder of our balance sheet, we largely take a portfolio approach to managing interest rate and liquidity risk that is inherently imprecise.

The Company depends on the availability of secondary market purchasers of our loans held for sale, but primarily for the guaranteed portions of SBA loans and the premium received on such sales to support its lending operations. Sale prices for guaranteed portions of SBA 7(a) loans could be negatively impacted by market conditions, in particular a higher interest rate environment, which typically lead to higher prepayments during the period, resulting in lower sale prices in the secondary market. A reduction in the price of guaranteed portions of SBA 7(a) loans or disruptions in the markets to which we sell could negatively impact our business.

The Company has cash and cash equivalents, which includes cash and due from banks, restricted cash, and interest bearing deposits in banks, of $216.9 million. We do not purchase or hold derivative financial instruments for trading purposes. All of our transactions are conducted in U.S. dollars and we do not have any foreign currency or foreign exchange risk. We do not trade commodities or have any commodity price risk.

We believe that we have placed our cash investments and their equivalents, which include deposits at other institutions, with high credit-quality financial institutions. As of September 30, 2025, cash deposits in excess of insured amounts totaled approximately $29.0 million. The Company and its non-bank subsidiaries have deposit accounts at Newtek Bank that total $105.9 million, of which $105.5 million is uninsured.

Interest rate risk is a significant market risk and can result from timing and volume differences in the repricing of rate-sensitive assets and liabilities, widening or tightening of credit spreads, changes in the general level of market interest rates and changes in the shape and level of market yield curves. The Company manages the interest rate sensitivity of interest-bearing liabilities and interest-earning assets in an effort to minimize the adverse effects of changes in the interest rate environment balanced against maximizing profit. Management of interest rate risk is carried out primarily through strategies involving cash, loan portfolio, and available funding sources.

The Newtek Bank board of directors has established an Asset/Liability Committee (the “ALCO Committee”) to oversee the implementation of an effective process for managing the risk profile inherent in Newtek Bank’s balance sheet and related business activities as well as the ongoing monitoring and reporting thereon. Risks inherent in Newtek Bank’s balance sheet include interest rate risk (i.e., the risk to liquidity and capital resulting from changes in interest rates), liquidity risk (the risk to the availability of funds to execute its business strategy and meet its obligations), and similar risks. The ALCO Committee, subject to Newtek Bank board approval, is responsible for establishing policies, risk limits and capital levels (collectively “ALM Policies”) as well overseeing and monitoring compliance therewith. Newtek Bank’s ALM Policies set forth a risk management framework relating to managing liquidity, managing fluctuations in interest rates, capital management, investments, and hedging and the use of derivatives. The ALCO Committee and Newtek Bank’s board may implement additional policies and procedures relating to these areas in order to manage risk to an appropriate level.

The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period. The Company analyzes interest rate sensitivity position to manage the risk associated with interest rate movements through the use of two simulation models: economic value of equity (“EVE”) and net interest income (“NII”) simulations. These simulations project both short-term and long-term interest rate risk under a variety of instantaneous parallel rate shocks applied to a static balance sheet. The EVE simulation provides a long-term view of interest rate risk because it analyzes all of the Company’s future cash flows. EVE is defined as the present value of the Company’s assets, less the present value of its liabilities, adjusted for any off-balance sheet items. The results show a theoretical change in the economic value of shareholders’ equity as interest rates change.

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EVE and NII simulations are completed routinely on Newtek Bank’s balance sheet and presented to the ALCO Committee. Other positions outside of Newtek Bank are typically match funded or hedged with instruments that have similar terms and/or interest rate features. The simulations provide an estimate of the impact of changes in interest rates on equity and net interest income under a range of assumptions. The numerous assumptions used in the simulation process are provided to the ALCO Committee on at least an annual basis. Changes to these assumptions can significantly affect the results of the simulation. The simulation incorporates assumptions regarding the potential timing in the repricing of certain assets and liabilities when market rates change and the changes in spreads between different market rates. The simulation analysis incorporates management’s current assessment of the risk that pricing margins will change adversely over time due to competition or other factors. Simulation analysis is only an estimate of interest rate risk exposure at a particular point in time. The Company regularly models various forecasted rate projections with non-parallel shifts that are reflective of potential current rate environment outcomes. Under these scenarios, the Company’s interest rate risk profile may increase in asset sensitivity, decrease in asset sensitivity, or depending on the scenario and timing of anticipated rate changes, may transition to a liability sensitive interest rate risk profile. Regular, robust modeling of various interest rate outcomes allows the Company to properly assess and manage potential risks from various rate shifts.

Estimated Changes in EVE and NII. The table below sets forth, as of September 30, 2025, the estimated changes in our (i) EVE that would result from the designated instantaneous changes in the forward rate curves; and (ii) NII that would result from the designated instantaneous changes in the U.S. Treasury yield curve, Prime Rate and the Secured Overnight Finance Rate. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied on as indicative of actual results.

Basis Point ("bp") Change inEstimated Increase/Decrease in Net Interest IncomeEstimated Percentage Change in EVE
Interest Rates12 Months Beginning September 30, 202512 Months Beginning September 30, 2026As of September 30, 2025
+20013.8%15.4%(0.4)%
+1006.87.6(0.2)
-100(8.0)(8.6)0.4
-200(15.8)(17.0)1.0

Rates are increased instantaneously at the beginning of the projection. The Company is asset sensitive, as the Company’s variable rate loan portfolio reprices the full amount of the assumed change in interest rates, while fixed-rate Company notes will reprice on maturity and the retail savings and short-term retail certificates of deposits portfolio will reprice with an assumed beta. Interest rates do not normally move all at once or evenly over time, but management believes that the analysis is useful to understanding the potential direction and magnitude of net interest income changes due to changing interest rates.

The EVE analysis shows that the Company would theoretically modestly increase market value in a rising rate environment. The EVE asset sensitivity results from the combination of fixed-rate debt and variable-rate debt which funds the variable-rate loan portfolio outside of Newtek Bank.


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ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures:

Our management, under the supervision and with the participation of the Chief Executive Officer (who is our principal executive officer) and Chief Financial Officer (who is our principal financial officer), evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of September 30, 2025. The term "disclosure controls and procedures" means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2025, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting:

There were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Refer to “NOTE 13—COMMITMENTS AND CONTINGENCIES” within the accompanying Notes to the Consolidated Financial Statements, which is incorporated by reference herein. While the final outcomes of legal proceedings are inherently unpredictable, management is currently of the opinion that the outcomes of pending and threatened matters will not have a material effect on the Company’s business, consolidated financial position, results of operations or cash flows as a whole.

In addition, as a result of a litigation brought by the Federal Trade Commission (the “FTC”) in October 2012, NMS voluntarily entered into, and is presently operating under, a permanent injunction with respect to certain of its business practices.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2024 Form 10-K, which could materially affect our business, financial condition and/or operating results. The risks described in our 2024 Form 10-K are not the only risks we face. Additional risks and uncertainties that are not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. There have been no material changes from the risk factors set forth in our 2024 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

We issue shares of common stock that are not subject to the registration requirements of the Securities Act in connection with dividends on unvested restricted stock awards. A breakdown of the shares related to dividends on unvested restricted stock awards is presented below:

Three Months Ended September 30,Nine Months Ended September 30,
2025
2024
2025
2024
#$#$#$#$
Dividend shares on unvested RSAs
3 $54 8 $114 38$420 $20 $263 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

None.

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Table of Contents
ITEM 6. EXHIBITS.
NumberDescription
Amended Bylaws of NewtekOne, Inc. (Incorporated by reference to Exhibit 99.1 of NewtekOne, Inc’s Current Report on Form 8-K, filed January 24, 2023).
101Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024; (ii) the Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024; (iii) the Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2025 and 2024; (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024; and (v) the Notes to the Consolidated Financial Statements.
104Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101)
* Filed herewith
** Furnished herewith

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NEWTEKONE, INC.
Date: November 7, 2025By:
/S/    BARRY SLOANE        
Barry Sloane
Chief Executive Officer, President and Chairman of the Board
(Principal Executive Officer)
Date: November 7, 2025By:
/S/    FRANK M. DEMARIA       
Frank M. DeMaria
Chief Financial Officer
(Principal Financial Officer)


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