Title

Presentation

NewtekOne, Inc. reports earnings inline with expectations. Reported EPS is $0.43 EPS, expectations were $0.43.

Operator: Good day, and thank you for standing by. Welcome to the NewtekOne, Inc. first quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during your session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Barry R. Sloane, president and CEO. Please go ahead.

Barry R. Sloane: Thank you very much, and welcome to our Q1 2026 financial results conference call. My name is Barry R. Sloane, president, CEO, and founder of NewtekOne, Inc. Also presenting today is Frank DeMaria, chief financial officer of NEWT, the financial holding company that is publicly traded, and Frank is also chief financial officer of Newtek Bank National Association. For those who want to follow today’s presentation along, please go to newtekone.com — n e w t e k o n e dot com. Go to the investor relations section and the presentation section. Appreciate everyone’s attending today. Given that this is our 25th year as a publicly traded company, and our 13th quarter reporting as a bank holding company, after acquiring National Bank of New York City.

We have accomplished quite a lot from $180 million of total assets in National Bank of New York City to over $2 billion. The financial holding company is approximately $2.9 billion of assets. And the bank has over $2 billion of deposits, up from $140 million at the time we acquired it approximately three and a quarter years ago. We want to make sure in today’s presentation, one of the biggest concerns I think people have, particularly in the current volatile market, is credit quality. I want to point everyone towards slide 21, where we are able to demonstrate that the bank clearly has stabilized credit. NPLs are down as a percentage, when you typically take out the government guaranteed for both the numerator and the denominator. With that said, let us go to slide number two under forward-looking statements.

Let us absorb that. And then let us go to slide number three. Important always to note you look at NewtekOne, Inc. as its purpose, our mission has not changed since we were founded in 1998 at 120 West 18th Street, Apartment 4B, with three founders. The focus of NewtekOne, Inc. is to provide small to medium-sized businesses, small to medium-sized enterprises, and to business owners all across the United States financial and business solutions that are state of the art. We help our clients become more successful by growing their revenues, reducing their expense, and reducing their risk. I think more importantly, we are very much involved in the concept of real-time payments. We will talk about that quite a bit today. Moving money, and giving businesses the analytics that they really desire and require apart from what they typically get from the top four large financial institutions in the United States, regional banks, and community banks.

On slide number four, how do we do this? NewtekOne, Inc. uses technology to tackle its mission statement. I think it is important to point out that although we have taken many different sizes and shapes as a publicly traded company, we started off as a 1933 Act company, converted in November 2011 to a 1940s Act BDC company, and then converted back into a financial holding company. We acquired National Bank of New York City primarily for the purpose of improving our client experiences historically. We believe that by using technology, we have solved the three primary challenges that the banking industry needs to overcome to be able to help the customer base. One, the high cost of infrastructure with too many branches and expensive traditional bankers.

We are traditional bankerless, and branchless. If you take a look at the efficiency ratio at Newtek Bank National Association, this particular quarter it was 40%. Insufficient lending margins from riskless loans — we think this particular industry, their lending, generally is avoiding risk. They are not managing risk. And we think that there is very little margin in their business. Frankly, if they are not able to acquire deposits materially below the risk-free rate, there is not a lot of margin in their business. Lastly, from a deposit perspective, basically, taking in deposits with zero interest paid or noninterest-bearing deposits and charging excessive fees for the business client is not in the domain of NewtekOne, Inc. or Newtek Bank National Association.

We have an extremely attractive platform that pays for business clients 1% on checking, 3.5% on business savings, and a true no-asterisk zero-fee bank account. Important to note, we are a major adopter of real-time payments. We can announce today that we now have FedNow for receiving payments for our client base. We have been approved by the Federal Reserve’s FedNow program and the Clearing House RTP. So we are fully approved, this is live, and we are able to benefit our clients today with real-time payments appearing in their account. On slide number five, obviously, these are things I think many of you are already aware of in terms of our structure. NewtekOne, Inc. is considered a bank holding company regulated by the Fed Board of Governors.

Newtek Bank National Association, which used to be called National Bank of New York City, is a depository offering great solutions, real-time payments, and is obviously the lender to the business community. Through its holding company investment in Newtek Merchant Solutions, we provide payment processing solutions, payroll solutions, and insurance solutions that support independent business owners all across the United States. We utilize our own proprietary and patented technological solutions to acquire customers cost-effectively. We receive 600 to 800 unique business referrals a day through our NewTracker trademark client acquisition tool, and we give cloud customers through the Newtek Advantage a far advanced business portal to help them manage the business, move money on a real-time basis, as well as get the types of historic data and analytics that they so rightly deserve.

NewtekOne, Inc. provides a full menu of best-in-class on-demand business and financial solutions to independent business owners. Importantly, we do not leave clients to just software. We have staff over 300 that are available on demand on camera. So, in addition to great software and great technology in a frictionless manner, they can also get somebody on camera when they need them. On slide number six, we talk about our target market. I think the relevance of our target market is the SMB, SME, or independent business owner market is quite large and quite lucrative. It is estimated that there are 36 million independent business owners in the United States that identify themselves in this category. According to the U.S. Chamber of Commerce, it is 43% of U.S. GDP.

Frankly, we have been tremendously supportive of this particular asset class. And according to the SBA, we have stabilized and supported over 110 thousand jobs over the last five years, the second highest amongst all SBA lenders. The independent business owner is a huge economic demographic that, frankly, the existing industry has taken advantage of by basically taking their deposits and not really providing them attractive lending solutions that enable them to grow their business or, for that matter, the ability to move money on a real-time basis. It is important to point out that in recent SBA data, NewtekOne, Inc. is the largest SBA lender by units and is top two or three by loan volume. Also important to note that even though the bank’s balance sheet is a little over $2.1 billion, when we make an SBA loan 75% is government guaranteed.

We typically sell it. So even though the bank is $2 billion, when you look at the government guarantees and the fact that we are servicing them, it is a much bigger infrastructure. I guess over our history, if we kept all the government guarantees on the balance sheet rather than selling them, it would be approximately $4 billion of total assets. On slide number seven, we are going to focus on the really attractive quarter that we just reported. A really good start to 2026. EPS of $0.43, beating Street consensus by about a penny. Reflected 1,923% growth over Q1 2025 basic and diluted EPS and was within our $0.37 to $0.47 guidance range. We want to reconfirm our 2026 guidance of $2.35 at the midpoint and establish a $2.60 midpoint for 2027. The current Street consensus for 2027 is $2.35, $2.40, $2.45, and $2.50 from four of the six analysts, to blend to $2.43.

Also, for those that follow our stock closely, you are familiar we have done a very nice job in growing book value and tangible book value. So book value per share ended Q1 2026 at $12.35. Tangible book at $11.84. Started off at a tangible book at $6.92 in Q1 2023. Quite a substantial growth over the course of time. It is the technological advancements that are supporting a record number of originated loans and tremendous year-over-year growth. In the fourth quarter in 2026, we originated 961 loan units, a 40% year over year, with 500 loan units alone originated in March versus 287. In dollar terms, $391 million of loans versus March 2025. And March’s momentum has continued in April with approximately 10% year-over-year growth. In addition, we are able to capture the operating leverage.

Q1 2026 operating expense was just over up over 7.5% on year-over-year asset growth of 35% and a return on average assets of 1.96%, very favorable to the industry, but also important for those of you that follow the company. The first quarter is clearly our weakest from an earnings perspective. I think it is important to note using technology on a loan under $350,000. We are using AI to read tax returns, read lease agreements, read operating agreements, as well as alternative valuation methods. So, by being able to do this, we are able to really fund small business loans quite quickly. As a matter of fact, we talked about, which we will do in future slides, the seven-day loan. Once the loan application is completed, we can clearly fund that particular application under $350,000 within seven days.

Slide number eight, deposit growth, extremely important for banks. We have two consecutive quarters of a record number of deposit accounts. Ended Q1 2026 with 37 thousand deposit accounts, more than doubling year over year. In 13 quarters, we have grown deposits from $142 million to $1.9 billion. Business deposits, which come in at a lower cost, increased quarter over quarter and year over year by $37 million and $173 million, respectively. Consumer deposits also climbing quarter over quarter and year over year by $392 million and $668 million. Since the acquisition of Newtek Bank in 2023, 54% of our lending clients have opened up a business deposit account. And since February 2024, when we initiated T Man Life to Newtek Bank business lending clients, 25% of those clients have purchased T Man Life and do so on an automatic, frictionless basis where they apply once and they can get a bank account, T Man Life.

They can currently get flood insurance. In the menu in the very near future, we are also going to be able to offer property and casualty. All automated, one app, frictionless, and get that client their funds as quickly as possible for those who qualify. We just started in January originating C&I Long Am loans, nicknamed C&I LA. We used to call them ALP loans. And these are being originated at the bank. The C&I LA originations approximated $85.7 million versus $68.5 million in the same quarter a year earlier. We are now funding these, obviously, with bank deposits where historically, in 2025 and earlier than that, we funded them up at the holding company with warehouse facilities. Cost of those facilities are approximately SOFR plus 3.25%. But the bigger cost, which I will describe in a second, has been not using a warehouse facility, but the bank funding.

We have historically securitized C&I LA loans on a regular basis and we may do so from the bank’s balance sheet. Once again, let us take an example of, say, a $500 million portfolio. So a $500 million portfolio historically was originated at the holding company, with a 70% advance rate from a street warehouse line. And we should note we just paid two of those down to zero — one from Capital One, one from Deutsche Bank. That had a 30% equity haircut. So on $500 million worth of loans, you need $150 million of capital from the holdco. Once you securitize with a 15% OC or owner certificate, meaning that you had three classes of bonds above it — single A bond, a triple B bond, and a double B bond — to give you an 85% advance rate. An 85% advance rate on $500 million of collateral is $75 million.

All would have to be contributed from the holding company. In the event that we securitize off the bank’s balance sheet, it is dramatically less. You are funding it with core deposits at approximately a 10-to-1 leverage. Much more efficient and much more profitable. On slide number nine, tangible book value per share, one of my favorite slides. So, real simple for those people that like to invest based upon tangible book value growing, if you look at this slide, it is a little dizzy to a certain degree. $6.92 in Q1 2023. It is currently $11.84. Frank DeMaria will talk about where we think we will be at the end of the year, and it will be approximately $13.50. And then on top of that, you look at the dividends that we paid. $2.43 of cumulative common dividends declared.

$4.92 of tangible book value growth since the conversion. We have delivered $7.35 of value to shareholders, more than double the Q1 tangible value of $6.92, something we are really proud of. On slide number 10, we touched upon this a little earlier, the technological advances that are supporting increased loan volume. Those advances have also helped us with deposit growth. I think once again, it is important to note we had tremendous unit and dollar growth in the first quarter. We talked about the seven-day business loan. We talked about our AI that we use for smaller balance loans with respect to using it to read tax returns, which are very important to spreading financials, and actually calculating debt service coverage. Some of our competitors in the marketplace, frankly, that have been scoring some of these loans cannot do it.

They have got to change their technology. It is creating friction. We have had several of our competitors in the space reporting problems with their fintech originators that are not able to actually deliver the solution. Not a problem for NewtekOne, Inc. or Newtek Bank. We have been using five C’s of credit lending in our entire history. We are doing that on the $350,000 loans to basically get liens, get appraisals, read operating agreements, and lease agreements. Importantly, when you compare our business loans, which are structured to amortize over 10 to 25 years with no balloon payments, these are commercially viable rates. Compare it to merchant cash advance, or the daily debit type loans, we can create monthly payments that are 7% lower than a borrower with experience with alternative financing options that are structured with shorter maturities.

Our business model, whether it is 7(a), C&I LA, or loans that go into the bank — I think it is important. We have been long-amortizing lenders since 2003. We have that expertise. Our loans give the borrower a lot of flexibility. There is no covenant. So it allows them to distribute all the income. It allows them to borrow more without asking. It allows them to do an acquisition. What is the trade off? We get a personal guarantee. We get a lien on all business assets. And in many cases, personal assets. We would trade that all day long. We have the knowledge and experience making loans over two decades to have a very good feel for the full frequency and severity. We know these businesses. We know these markets. We do know how to manage making these types of loans, get greater net returns after provisions, after allowance for credit losses, which are almost 5%.

Very, very strong risk management within the walls of Newtek Bank. We are very proud of what we have been able to do here. And now when you add technology, there is no need for a business owner to borrow money from an MCA or a daily debit loan and use rages. They might have to wait a couple of more days, but they get a long hand. They get an adult payment. They actually get an adult loan. Those technological advances that we have created for ourselves internally have also been very valuable to our digital account opening and deposit growth on slide number 11. A look at the graphs — they are very attractive. You can see we have grown business deposits. We have grown total deposits. We have grown depository accounts. We are just doing very, very well in this particular area.

Importantly, these are insured deposits — 78% insured. These deposits are not going anywhere. They are insured. They are small. You are not going to have a Silicon Valley Bank-type problem because the customers were not paid any interest. They had millions or tens of millions or hundreds of millions of dollars. It just flew at a moment’s notice. We are very, very happy about paying market rates of interest. We get good margins on our loans. Net of write-offs, it is a real good, smart business model. Slide number 12. This is our nonbank lender, held over from the days when we did not own a bank. We had to fund our business with warehouse lines and securitization at the holding company. So Newtek Small Business Finance is winding down. I think it is also important to note that this portfolio has really experienced what we consider the great financial crisis for small business where rates went up 3% to 5% in a short period of time.

And inflation really made it difficult for businesses. So when you look at net increase in nonaccruals shrinking, the accruing portfolio shrinking, nonaccruals at fair value shrinking. The outstanding securitization notes down to $113 million. That is really important because the loans that are in the securitizations — all the cash flow is being used to pay down the debt in the securitization. So once you hit the cleanup call — and there are three securitizations left; we started off with 13 — and you hit the cleanup call, which we are going to start to hit those in the next six to 24 months, probably on all three, then those loans and the monthly P&I flows through, and we are able to use that cash flow for a lot of nice things up at the holding company.

Also, when you look at NSBF, on a total consolidated basis, at 2025 it was 21%. On 03/31/2025, that is 13%. So it continues to shrink. We are happy about that. The remaining portfolio is fairly seasoned. The weighted average life is about 66 months, so we think we are through the worst part of the curve. And we certainly appreciate the opportunity to participate in the program as a nonbank lender, and we have been participating as a bank lender pretty much for three and a quarter — actually, about three years. Slide 13, the C&I LA program, extremely additive. I want to really emphasize how additive it is. The average loan size on C&I LA is about $4 million to $5 million. Let us use $5 million because it is a nice round number. So on 100 units, you have got $500 million.

On 200 units, it is $1 billion. To do $1 billion of 7(a) loans, you almost have to do 3 thousand units. So the ability to grow with our pipeline in a quality manner exists. It is there. Without reaching for bad credits. Importantly, the C&I LA program is not a 7(a) type program with a 7(a) borrower. The borrowers are seasoned. We will go through the metric profile. You will see these are very strong credits. So this is going to help us diversify. As a matter of fact, at March, the 7(a) portfolio with the bank, I think, was down to about 41% of the total portfolio. So diversification is an extremely important part of risk management at the bank. We plan on doing more CRE at the bank, more short A/M C&I, as well as the C&I LA program which has great margins, and we have developed a six- to seven-year expertise in it.

Once again, the size of the loans are extremely important. They will enable us to grow the balance sheet in a better quality manner without having to reach. In January 2026, we successfully launched our fourth C&I LA securitization. There was $295 million of securitized notes sold by $342 million of loans. It was our 17th securitization in our history. The deal was 10 times oversubscribed with 32 institutions purchasing the notes. Slide number 14, very important. I think you need to absorb this. These businesses on a weighted average basis have been around for about 10 years. That is not an SBA borrower. Weighted average LTV, 47%. Weighted average debt service coverage over three. That is not an SBA borrower. When you look at the coupon, you say, why are they getting a coupon?

If you give an entrepreneur the flexibility of not dealing with intrusive covenants, letting them distribute their income, but they are willing to personally guarantee, lien all business assets and some personal assets so that you are covered. This is a good loan program. We have repositioned the value of early amortizing a C&I loan, of putting a three-year or five-year balloon payment on a loan, of requiring certain financials 45 days in arrears after the quarter. I would much rather look into their bank account, see what they are doing, who they are paying, what they are paying, seeing the revenues coming into the bank account, than have those financials all day long. That is, once again, the advantage of being technologically on top of this particular business and this particular industry.

Once again, limiting state concentrations, limiting industry concentrations, diversification, diversification, and more diversification. This is a program with stronger credit than 7(a), with really good margins, and we have an expertise in it. Slide number 15 just kind of gives you an idea of how successful we have been in this particular marketplace. I would like to point out a recent deal we did, 2026-1. So the gross spread before we deduct the servicing fee was 6.6%. That is the coupon on the collateral versus the yield on the securities. Net of the servicing fee, 5.66%. Now securitization interest expense is higher than bank deposits. Also, it is match funded, which is extremely important. So you get the duration benefit. Now the other thing about securitization — you set it, and forget it.

And I say that — I am not talking about what we are doing on the servicing side because we are fairly active on the servicing side with our borrowers — but think about a 5.66% spread after servicing. So if you went to a bank and said, oh, by the way, I can give you and make loans at a 5.66% spread and there is no cost to run the bank. You do not need FDIC insurance. You do not need people managing depository accounts. You do not need branches. You do not need bankers. You just put the loans in a special purpose vehicle. You clip the coupon. You service the loans. And you pay the bondholders. That is a winning business. And when you look at the valuations on the owner certificates, we are slightly over two to one on the value, but look at that spread.

And you are probably five to five and a half times cash flow. Very reasonable. That is after the markup. So we love this business. We have an expertise in this business. We have a track record in this business. We are good at this business. Slide number 16. So when you look at the active securitizations, because the first one is already paid off and wound up, look at the 2024 deal. And look at how the overcollateralization grows because you have got all that excess cash flow that goes to pay down the senior notes. So the OC went from $36.2 million to $50 million. That shows you that the book value will ultimately get to the fair value in about three to three and a half years. Because you have got all that excess cash flow flowing into the securitizations, into the special purpose, it really hyperamortizes the bonds.

I would now like to turn the rest of the presentation over to Frank DeMaria.

Frank DeMaria: Thanks, Barry. Slide 18 highlights our consolidated profitability metrics, of which there are two primary takeaways. One, our measures of profitability continue to be very strong, with the first quarter return on average assets just below 2% and a return on tangible common equity approaching 15%. And two, profitability is improving with notable step-ups over the 2025 first quarter. I would like to again reiterate that there is an element of seasonality to the business with the first quarter of the year being typically our weakest. Slide 19 focuses on trends specifically at Newtek Bank. Note the pickup in the returns on average assets, equity, and tangible common equity, and the improvement in the efficiency ratio, all of which are influenced by moving the origination and funding of longer amortizing C&I loans to our bank subsidiary.

We also show margin trends on this slide. Due to the exceptional deposit growth in the first quarter, the bank experienced a meaningful shift in its quarter-over-quarter earning asset mix, leading to NIM compression. However, the absolute dollar balance of net interest income continues to increase. Also, as Barry noted, significant loan production occurred in the second half of the quarter, which should bode well for net interest income and the bank’s NIM in the second quarter. Loan and deposit growth remained very healthy, and we saw a decline in delinquencies and NPLs excluding government guaranteed loans. The next slide shows the geography of our loan production on the NewtekOne, Inc. balance sheet. With the shift of C&I LA loan originations into the bank, the first quarter securitization that moved loans off balance sheet and the ongoing wind down of the NSPF portfolio, loans at Newtek Bank now comprise 83% of total loans, up from 65% for year-end 2025 and 57% for 2025.

Slide 21 walks through credit trends at Newtek Bank, which highlight the following. One, delinquencies were down for a third quarter in a row. Two, the ratio of NPLs to loans excluding government guaranteed loans was down for a fourth consecutive quarter. Three, provisioning continues to cover net charge-offs. And four, as expected, net charge-offs have picked up as the loan portfolio has seasoned. That seasoning was anticipated and captured by our CECL calculation that called for building our allowance for credit losses as we grew the loan portfolio almost from scratch after acquiring the bank. Slide 22 covers Newtek Bank’s held-for-investment loan portfolio. The held-for-investment portfolio increased roughly 10% in the first quarter with solid contributions from all three components: traditional CRE, traditional C&I, and unguaranteed SBA 7(a) loans.

Unguaranteed portions of SBA 7(a) loans comprise roughly 59% of the held-for-investment book, down slightly quarter over quarter from 60%. The allowance for credit losses related to the unguaranteed 7(a) portfolio continues to make up a bulk of the bank’s ACL. Slide 23 is a depiction of how our strong asset growth is supported by healthy cap ratios, with leverage being above 13%, CET1 over 15.5%, Tier 1 capital above 18%, and total capital approaching 19.5%. Lastly, on slide 24, we have reaffirmed the EPS and origination guidance for 2026 and, as Barry noted, laid out an EPS range for 2027 to give market participants an early read on how we see future trends. And with that, I will turn it back to Barry.

Barry R. Sloane: Thank you, Frank, and before we go to Q&A, I want to point out just a few more quick items for emphasis. Net interest margin for the business, once we do a securitization, particularly in C&I LA, typically declines. So I ask all of you please, the best way to value our organization is on a year-over-year basis. Certainly, look at us quarter to quarter — we are not telling you how to look at it. But to give you an example, we have, I think, about $383.19 billion of cash at the Fed. That is a bit of a drag, particularly on interest income. So someone would say, well, why do you have that much cash at the Fed? Well, we had the opportunity to get deposits. We are very constructive on our loan platform going forward.

And we are going to use it. Now that may hurt in the near term, but on a long-term basis, it should work out really well. And if you can develop a little bit of foresight, putting these C&I LA loans down at the bank, all of a sudden you are going to start to get some really nice interest spreads, some really nice margins. Nice diversification of the portfolio, improved credit metrics — it falls in very nicely. Also want to point out the ability to grow the business is a lot stronger with C&I LA at an average loan size of $4 million to $5 million. And the efficiency ratio with the bank is very indicative. As you could see, there is more activity at the bank, and that is our goal. And our goal is to do this methodically. A lot of times I am asked, can you grow faster?

And the answer is I do not want to grow any faster. It makes everybody comfortable we are growing fast enough, but we are doing controlled growth. We are managing our risk well. We are basically staying to our knitting in what we know. And from the results you could see from this particular quarter, and, frankly, three years and a quarter of operating, we are hitting our stride in a good spot. So with that, operator, I would like to open this up to Q&A. Thank you.

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Operator: At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your hand to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Timothy Switzer of KBW. Your line is open.

Timothy Switzer: Good afternoon. How are you guys doing?

Barry R. Sloane: Good, Tim. How are you?

Timothy Switzer: Good. Thanks for taking my questions. My first one — you just kind of touched on it, Barry, but on balance sheet growth.

Barry R. Sloane: You know, quite a bit of growth in the loan book this quarter, excluding the securitization here, drove assets a little bit higher. Does that change kind of the trajectory of loan growth going forward, or what should we be expecting?

Barry R. Sloane: I think the growth of loans is going to be in the bank. I do not think you are going to see any loan origination at the holding company whatsoever. And I think the holding company is going to continue to house Merchant Solutions. It is conceivable we might put payroll down into the bank. That makes it a lot easier to currently do same-day payroll. What I mean by that is we have the ability and are doing this: if a business wants to make money available on Monday, they could pay their employees on Monday, same-day payroll. It is easier to do that if the payroll business is down into the bank. But I think you are going to see the same type of historic growth — I will use the word low double digit — and I think you are going to see greater diversification.

You are going to see improved credit metrics because we are going to be putting on a lot more of these C&I LA loans, which are clearly better credits, down in the bank, but also do so with good margins.

Timothy Switzer: Okay. Got it. Very clear. And then similar question, but on the deposit side, tons of growth there. Your LDR now is super low. Is that going to normalize down at all, or are you going to maintain this liquidity?

Barry R. Sloane: It is interesting. On one side, I have banks that were holding all that cash at the Fed at a low amount, and on the other side, it is like, okay, I know I have got the liquidity to basically make loans going forward. I think this is a bit excessive. I do not think we need $390 million, but I think we are always going to keep a good amount of liquidity at the bank. We have got waiting lists of people for deposits, frankly. If you go to Trustpilot, I believe we are like a 4.7 or 4.8, which is extremely favorable for customer service. Hats off to Jen Merritt and the Wilmington Group. They do a fantastic job there. It is not just rate. We do a really good job servicing customers. I think that is important. I think it is also important that with real-time payments — and we have a real real-time payments offering.

It is not just ACH. We now have the real-time payments with FedNow and the Clearing House RTP. At some point, we might use stablecoin, but not something that we are going to use for deposits. So we are going to stay out of the traffic there, but just give people the ability to move money quicker using probably somebody else’s stablecoin. But being able to use the Newtek Advantage and the portal for the analytics to make payroll quicker, to have merchant money in your account on the same day and show up and get credit for it — these are all very beneficial. So we do think that we are going to get more business deposits over time because of this. These things do take time. It takes time to train your staff, use artificial intelligence where you can to deliver those solutions to customers better.

We are early adopters of technology, and we will continue to do so.

Operator: Thank you for your question. One moment for our next question. This question comes from Christopher Nolan of Ladenburg Thalmann & Company. Your line is open.

Christopher Nolan: Hey, guys. Frank, what was the lower loan yields due to again, please?

Frank DeMaria: The loan yields are on a blended rate around 7.25%.

Christopher Nolan: Yeah. Why was it decreased quarter over quarter, please?

Frank DeMaria: Oh, the decrease quarter over quarter is mainly driven by the ALP loans going off balance sheet at the beginning of the quarter. And then with the second half of the quarter being strong, we, on an average basis, did not get as much credit for that given we had to go off the beginning of the quarter into the securitization and then started to see some originations later in the second quarter on the higher yielding ALP loans. So you should see that kind of come back to a normalized basis as we get into the second quarter and start getting the benefit of those loans being on balance sheet for the full quarter.

Christopher Nolan: Okay. So it is timing issues for the late loans, right? It is timing, but it is also a little recharacterization because the coupon did not go away. It is just in a securitization with those spreads. So we get the income from the owner certificate. Does that make sense, Chris? It is just that it is a recharacterization of the income.

Frank DeMaria: Not really, but I will catch up with you guys later on and ask.

Christopher Nolan: Thank you. And then second, my follow-up question is the leverage ratio. You guys are growing, and the capital ratios are going down. And, you know, I think your leverage ratio at the holdco is, like, 9% or so. And I know you have mentioned that you are not going to chase growth for growth’s sake, but is it now become more of a balancing act where you know, you have to moderate growth with securitizations just because you are starting to approach, you know, capitalization constraints? Is that correct? And I want to be clear on this.

Barry R. Sloane: And I commented it is really hard — and maybe this is our cross to bear — to look at us quarter over quarter. But when I have got $390 million of cash at the Fed, which I am fine with long term, and I take loans and I put them into a special purpose vehicle, I mean, people that are looking at this should not be penalizing us for that. They should be going, okay, you are good managers. Now relative to the concept of the capitalization, as I start to put those into loans, all of a sudden — example, the first quarter is the weakest quarter for income. I think you will see a marked jump in both the capitalization and the income of the bank. So, no, we are not stretching. We are not going to overuse that capital. I think that will gravitate back up, and then it will just keep going back and forth.

Frank DeMaria: Okay. Thank you. And, Chris, just to clarify, the leverage ratio at the holding company is 13.1%.

Christopher Nolan: Okay. Thank you.

Operator: Thank you. Our next question comes from Harold Goetsch at B. Riley Securities. Your line is open.

Harold Goetsch: Hey. Thank you, and terrific quarter, guys. Well done. Got a question on the seven-day loan. Is there any data on that — how much of the loans were from that program in the first quarter, if there were any? And if there was not, is this a competitive advantage to have a tech-led stack that allows you to basically convert your funnel at a better rate, giving a better user experience to the borrower? Let me get your thoughts on that.

Barry R. Sloane: Hal, I think we do not have it broken out specifically, but I think if you look at the loan volume, which we talked about in the deck in the month of March when we announced it, and the precipitous jump, we also indicated that we are up 10% on total loans April 2026 versus April 2025. We think that that could be a continuing trend. So I think we continue to make more loans at double-digit rates without stretching for credit.

Harold Goetsch: Okay. And my next question, could you go over some of the before and after again? That was pretty interesting about, you know, I think, in a securitization where there are three tranches, then there is a 70% advance rate and a 30% equity stake. You are essentially transitioned to a model where you have to weigh out substantially less equity capital for these — is that what you are saying? Could you go over some of those numbers again?

Barry R. Sloane: Sure. Let us use a $100 million. Let us take a $100 million portfolio. If you were going to do it at the holding company, you would get a $70 million line of credit from, say, Deutsche Bank or Capital One. So you would need $30 million of equity during the accumulation. When you do a securitization, you get three classes of rated bonds, which we sell, at an 85% advance rate. That means your owner certificate in the securitization is about 15% or $15 million. And that has to be permanently financed at the holding company. In the bank, I finance all the activity with deposits at 3.6% to 3.7%. One hundred cents on the dollar. So I financed $100 million with deposits. Now I have capital against it. But that is okay. We have calculated it. It works out just fine.

Harold Goetsch: Alright. Okay. Thank you very much.

Barry R. Sloane: So it is a major benefit with less need to pull in capital with the holding company.

Harold Goetsch: Okay.

Operator: Thank you. Our next question comes from Stephen M. Moss of Raymond James. Your line is now open.

Stephen M. Moss: Good afternoon.

Barry R. Sloane: Hey, Steve.

Stephen M. Moss: Barry, Frank, maybe just start off on your cost of funds here going forward and just go into that — getting rid of the lines that you were parking the C&I LA loans at — seems like a pretty meaningful cost savings. It should be a pretty meaningful cost savings just on the spread. Just thinking about, you know, you are going to be running several hundred million dollars in average balances. You know, NII should be probably taking a pretty decent step up as the year goes on here — just kind of curious as to how you guys are thinking about that.

Barry R. Sloane: Got it. When you say step up, I am not sure I know what you mean. What do you mean?

Stephen M. Moss: Just that there is — you know, it looks like you are funding them with deposits at, call it, 4%. And before, you were funding those loans at, call it, 7% with SOFR plus 3.25%.

Barry R. Sloane: Plus an equity haircut. Yes.

Stephen M. Moss: Correct.

Barry R. Sloane: Right.

Stephen M. Moss: So it is immeasurably beneficial, and the program now is six and a half, seven years old, and we have developed a good track record and four securitizations and have improved a lot of different aspects within our organization to be able to manage the risk, and that is why it is now being funded down at the bank.

Stephen M. Moss: Right. So maybe just trying to put it this way — as I think about your funding, your NII growth before your next securitization, could it peak around, you know, $24 million to $25 million? Or are my numbers just maybe a little too large as we think about when you will do the next securitization?

Barry R. Sloane: Frank, I will let you handle that one. That is above my pay grade.

Frank DeMaria: I think that is a little — so, one, to answer your question, Steve, you are right. We will see a benefit from the spread because we are going to see reduced cost of funds. But I do think the $24 million is a little bit high. We are not getting quite there on our projections. But you are right. We are going to see a noticeable step-up as we go quarter over quarter just given the spreads that we do anticipate with the lower cost of funds and as we do see those yields starting to come back on the asset side with getting past the timing issue we had in the first quarter.

Stephen M. Moss: And then in terms of when we think about the next securitization coming — I know you guys generally want them to be larger — but any updated thoughts maybe as this is now on balance sheet as to how large the next securitization could be?

Barry R. Sloane: We are hoping it is a fourth quarter event, Steve. And we would like the collateral pool to be $400 million to $500 million.

Stephen M. Moss: Okay. And then one last one for me, Barry. Just, you know, you have been good in terms of a barometer of the health or challenges of the SBA market. Just kind of curious as to what you are seeing these days in terms of borrower confidence and activity. It has been an interesting couple of months, to say the least.

Barry R. Sloane: Yeah. And I appreciate it, Steve. I just came from the National Association of Government Guaranteed Lenders. I was up in Orlando yesterday and the day before. And there have been a lot of changes to the program. So some of the changes: change number one, 100% of the owners must be U.S. citizens. I think that knocked volume down by 10% to 20% in last calendar year. The ability to use the funds to refinance a merchant cash advance or a daily debit loan when the money is going to purchase a receivable — also a no-go. Now on the flip side of it, the changes that we have made for the seven-day loan, for example, are very valuable because when you think of merchant cash advance and daily debit opportunities, let us say 65% to 70% of those credits are actually credits that will last five or 10 years.

Maybe 30% will not and they go bad. But based upon the math, they still make money — the lenders. So we are now extraordinarily competitive with borrowers to be able to give them funding to repay the loan over 10 years at a 70% discount to the monthly pay rate for good borrowers. So we believe that we will get back to the volumes we had previously. But 2025 was a challenging year for 7(a). Now there are certain fintechs that are not spreading financials. They are not doing debt service coverage. And their technology was not positioned for that. And they do not have underwriters to do that. And now the program does not work for them anymore. So I think we have picked up a nice competitive advantage. I think the business has gotten harder, but I think we are well positioned to continue to be a leader in the space.

Stephen M. Moss: Okay. Great. Appreciate all that color. I will step back here. Thank you very much, guys.

Barry R. Sloane: Thank you, Steve.

Operator: Thank you. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. One moment for our next question. This question comes from Ken Billingsley of Compassport Point Research and Trading. Your line is open.

Ken Billingsley: Hi. Good afternoon.

Barry R. Sloane: Hi, Ken. Good afternoon.

Frank DeMaria: Welcome to our call. Good to have you.

Ken Billingsley: So one of my questions is partially answered. It sounds like you are looking at a fourth quarter event next for the next securitization. And the trigger would be a pool of $400 million to $500 million. Just would that all be coming out of the bank?

Barry R. Sloane: Yes.

Ken Billingsley: Okay. Then my second question: is the loan size — I saw that you have grown number of loans. But it seems — are the loan sizes shrinking at least quarter over quarter? And if that is the case, is it just something that you are doing with underwriting, or is it just market conditions in the first quarter?

Barry R. Sloane: It is a good question, Ken. I think in the SBA bucket, the loan sizes are getting smaller. We are doing a lot of commercial and industrial short-term loans and commercial real estate loans that are going to be that middle bucket. And then the C&I LA will probably be bigger-sized loans. So I think from our standpoint, the one thing that I have learned managing Newtek over two decades is diversification in different credit aspects, different loan sizes, and it has served us well. So we are not going smaller. We are not going bigger. We are pretty much spreading it out. I think that is going to serve us well. Pete Downs and I work very closely together on these things and loan committee. One of the key aspects of loan committee — the credit you always want to see is the credit a good credit or not a good credit — but one of the big things is what is the makeup of the portfolio.

Do I have too much in this state? Do I have too much in this category? How does it balance? And that is, I think, part of where our heads are at here. But we are very pleased with how things are rolling out. Risk-adjusted returns are where they should be. They are expected. That is why we are able to continue to grow the business.

Ken Billingsley: I appreciate you taking my question. Thank you.

Barry R. Sloane: Thank you, Ken.

Operator: Thank you. Our next question comes from Timothy Switzer of KBW. Your line is open.

Timothy Switzer: Hey, guys. Got a quick one real quick. I did not see it in the materials anywhere. What was the SBA gain-on-sale premium this quarter? And how have the pricing dynamics changed with — I mean, Barry just mentioned, you know, 10% to 20% of borrowers basically have been eliminated. And, obviously, there are other disruptions to the market, I guess, on the supply side. You know, what is the trajectory of premiums going forward?

Barry R. Sloane: So, Tim, I will take the price, and I will let Frank fill in the gain number. We are seeing pricing being maintained. I think we are about $1.10 and a half, plus or minus. And that is being maintained. I think on a supply and demand basis, there was a little bit less supply, and that held prices up quite a bit. I do not really see prices declining. That is always a question people ask about. The big issue on a price decline is prepay driven. Period. End of story. It is not rates higher, rates lower. It is prepay driven, and then you could have a conversation about what is driving the prepay. Is it voluntary defaults, involuntary defaults? You know? The markets know — put it this way: rates were moving 3% to 5% in an 18- to 24-month period of time.

That was pretty bold when you had a lot of changes. Right now, they are fairly — I mean, although I will tell you, rates have moved around by 50 basis points. Hopefully, they will kind of stay in that range. So I think prices are in pretty good shape. There is not a lot of supply out there right now selling into the secondary market. Frank, you can comment on the dollars.

Frank DeMaria: Yeah. We are seeing the price that you said — right around the $1.10 and a half — and then if you see that in the balance sheet there, Tim, you know, we had a net gain on sale number for the quarter of about $26.7 million driven mainly by those 7(a) sales with some final floor sales sprinkled in there.

Timothy Switzer: Got it. And then, I mean, Barry, you mentioned the prepayment rates. Just curious. What percent of your production is floating versus fixed? Is it pretty much all floating?

Barry R. Sloane: 100% floating.

Timothy Switzer: Okay. And one last one for me. Your new business deposits — you are seeing really good growth here. What is the average account size right now? And, you know, what do spending patterns look like in those accounts?

Barry R. Sloane: Frank, what do you see in savings? I am going to leave it to you, Frank. It is pretty healthy in savings on the consumer side, but that money does not move. It just kind of sits there. Frank, you could help on the — if you know the average size of consumer and business.

Frank DeMaria: The average deposit account size, Tim? Was that the question?

Timothy Switzer: Yep.

Frank DeMaria: Yeah. I think we are seeing that on the consumer side, the averages are probably around $10,000 on the account. They are relatively small. The business accounts we are seeing closer to that $200,000 to $250,000 mark.

Timothy Switzer: Nice. Okay. Thank you, guys.

Operator: Thank you. I am showing no further questions at this time. I would now like to turn it back to Barry R. Sloane for closing remarks.

Barry R. Sloane: Alright. Thank you, everyone. Appreciate your attendance. Great questions, and glad to be able to wrap it up in an hour. So I again thank everybody for attending and paying attention to NewtekOne, Inc. We look forward to delivering great results for the second quarter as well. Thank you.

Operator: Thank you for your participation in today’s conference. This does conclude the program, and you may now disconnect.

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