Prepared remarks
Thank you for standing by, and welcome to NewtekOne, Inc. Fourth Quarter 2025 Earnings Conference Call. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press *11 on your telephone. To remove yourself from the queue, you may press *11 again. I would now like to hand the call over to Barry Sloane, President and CEO. Please go ahead.
Thank you very much, operator, and welcome, everyone, to the Fourth Quarter 2025 Financial Results Conference Call. Joining me today on the call is Frank DeMaria, Executive Vice President and Chief Financial Officer of NewtekOne. For those of you that would like to follow the presentation online, go to newtekone.com and navigate to the investor relations section. The PowerPoint presentation for today's event is available there. Now, I would like to ask everybody to go to slide number two of that presentation and note the forward-looking statements. To begin our presentation today, we are happy to report the results of Q4 2025 and the annual achievements for 2025, including celebrating the three-year anniversary of NewtekOne owning and operating an OCC-chartered bank. We are extremely pleased about the acquisition that was done in January 2023. It's a very interesting slide on '24, which actually names several competitors in the space, SoFi, Livov, Triumph, Northeast Bank, and Axos. If you take a look at those charts, you'll see how their stock price action moved over the first several years of their operation and then started to change direction. We will talk about that later in the presentation. We are also celebrating today opening up 9,000 new depository accounts and 34,000 active depository accounts. We are celebrating the technology that we have built, particularly our digital account opening and our lending operating systems, as well as the Newtek advantage. All of these off-balance-sheet technological innovations are really important to serving our clients and being able to offer a true technology-enabled financial institution for independent business owners all across the United States to work with. We are celebrating our leading status as a lender to independent businesses. We refer to our lending programs as an adult loan: loans that have repayment of principal over ten to twenty-five years, not the six-month to twenty-four-month paybacks with 30% to 80% interest charges or effective yields to the customer. Lower monthly payments and patient capital make these loans exceptionally affordable to our clients. We are celebrating many new hires that were added to the senior management team: Greg Devaney, Chief Credit Officer of the bank; Chris Lucas, Chief Compliance Officer of the bank; Frank DeMaria, Chief Financial Officer of the bank; Andrew Kaplan, Chief Strategy Officer of NewtekOne, our holding company. We are also celebrating record earnings and revenue growth. I would like to report that as a financial holding company, net income before taxes for 2025 is approximately $80 million, up 16.4%, and our total revenue, defined as the sum of net interest income and noninterest income, is $284 million, up 10.6% over the 2024 number of $257 million. We are very pleased with how we did. With all that, I guess we can go right to the Q&A. Just kidding. Let's go to Slide number three. On slide number three, we particularly and historically have talked about the company's focus, which has been on the independent business owner, on SMBs. It's extremely important that the marketplace understands that this is our demographic. It is an underserved demographic, and it's been Newtek's primary focus from its inception as a private company in 1998 and a publicly traded company in September 2000. We believe we have better loans with long amortizations and more flexibility. We believe we have a better banking product with absolutely zero fees, no asterisks, no ifs, ands, or buts, better payroll solutions that are integrated into our bank account, with a dedicated concierge person that you can get on camera. Our insurance agency offers a frictionless opportunity for our clients to access all forms of insurance, both personal and business. Going to slide number four, we talk about our financial structure and product solutions. Obviously, in our history, from 2000 to 2014, we were a 1933 Act company. In November, we converted to a BDC. And in 2023, when we acquired National Bank of New York City, a $180 million total asset bank that today is approximately $1.415 billion. With the HoldCo consolidated assets at $2.425 billion, we have grown significantly. But it's important to note that we have changed our financial structure, and with that, you've had turnover of equity shareholders as well. The HoldCo is regulated by the Federal Reserve. The bank is regulated by the OCC. We utilize proprietary and patented advanced technological solutions to acquire customers cost-effectively and to manage our business. We have a full menu of best-in-class on-demand business and financial solutions for independent business owners. Our trademark: no branches, no traditional bankers, no brokers, no BDOs. A very cost-effective way to service our customers on demand. Let's go to slide number five. We talk about our target market. At the end of the day, the SBA defines this as 36 million businesses in the United States, 43% of non-farm GDP, and we believe this market is typically unfarmed, untapped, and we offer our best-of-breed solutions to this customer base, and we're very excited about what we've been able to do in the first three years of operating the OCC charter bank. And we're very excited about our future. On slide number six, we'll talk about the annual and quarterly highlights. The EPS for the quarter is $0.65, either basic or diluted, which aggregated up to a 2025 number of basic $2.21, diluted $2.18, up 1211% over the 2024 results. We're pleased to offer our 2026 guidance with a midrange of $2.35. Quite interesting at a $14 stock price handle what our multiple is compared to some of those other competitors in the marketplace. Then I would also call technology-enabled banks with a disruptive business plan and new entrants into the market but began many years before we did. The bullet point number three on slide number six is important. Tangible book value. We've been able to materially grow our tangible book value, which ended the year 2025 at $12.19. When we began, I think it was approximately $6.92. In addition, we've also paid a dividend during that period of time, which we'll talk about on a future slide. 2026 got off to a great start. On January 21, we closed our largest securitization, what we refer to as our alternative loan program, also known as C&I loans held for sale, or C&I LA, meaning longer amortization. These are basically business loans with long amortizations. And this is what we have experienced well over two decades in making these types of loans, whether it was in a 7(a) program or in the ALP program. We started originating these loans in 2018 and 2019. The deal that we kicked off in 2026 was 10 times oversubscribed, with 38 institutions subscribing and 32 institutions purchasing notes after we repriced after the IPT, and really pleased that 10 of the 32 purchasing institutions were new to our securitizations. We have a lot of ALP momentum growing, and the credit quality matrix overall on the entire portfolio on a consolidated basis, including the bank, including the old NSBF portfolio with the holding company and all loans, as we have indicated in prior press releases, seems to have stabilized. NPLs have declined for two consecutive quarters: 7.3% to 7.1% and then to 6.9% for 2025. Slide number seven. We talked about this a little while earlier, and that's deposit growth. I remember one of the things in acquiring the bank, people said, how are you going to grow deposits? Well, with our alliance partners and relationships, 9,000 deposit accounts in the fourth quarter, surpassing our previous record. Business deposits increased, and these are the important ones because they're at a lower cost, like $34 million in a quarter and $164 million for the year. So very, very nice growth. Obviously, consumer deposits are growing materially as well: $167 million in the quarter, $293 million for the year. We have a nice big deposit base going into the first quarter to be able to deploy in business loans. Since the acquisition of Newtek Bank, roughly 50% of Newtek's bank business lending clients have opened up a business deposit account. In addition, we started initiating the offering of life insurance, keyman life, to Newtek Bank business lending clients, and 25% of borrowers have now purchased life insurance through the Newtek agency. We continue to capture operating leverage. The efficiency ratio at the HoldCo declined from 63.2 to 58.3 with assets up 33%. So we're very, very pleased about our efficiency ratio. At the bank, I believe the efficiency ratio is in the forties, approximately 47%. Our return on average assets for the calendar year is 2.78% at the holding company. Also important to note, the earnings headwinds, which we'll talk about a little deeper in a further slide, from our NSBF lending subsidiary, continue to decline. We had a $28.7 million loss in 2024, and it should be approximately $20 million in 2025. We expect the NSBF loss will continue to materially decline throughout 2026. On slide number eight, we talk about our tangible book value growth. I think it's really important to analyze. Obviously, we paid $2.24 of dividends during our period of time as a bank holding company. Although we don't look like a traditional bank holding company, and we don't look like a lot of the other community banks that we're compared to. And a $4.76 share of tangible book value since conversion. So we're very, very pleased at how we've been able to deliver value to shareholders through growth, tangible book value, and dividends. Slide number nine. We talked about the alternative loan program. We'll drill down a little deeper here. I think it's important to note, and I have been asked by several investors, the credit quality for ALP loans is much stronger than the 7(a) loans. We'll show that on the next slide. The ALP loans are originated with the intention to sell them into a joint venture or securitizations. They have great margins on them. They have prepayment penalties, so they last for a longer period of time. So the spread that we get on them is enjoyed by the benefit of our shareholders and our earnings. I think it's important to note that similar to 7(a) loans, there is a structural similarity to the ALP loans: ten to twenty-five-year amortizations, no balloons, they're typically fixed for five years, with a spread over the five-year treasury curve of approximately 950 basis points at origination, and then they adjust from that initial rate and could adjust up based upon changes of rates. So we give the borrower flexibility in amortizing the principal over a longer period of time. Basically, we're giving them equity. We give them flexibility on distributions. We give them flexibility on borrowing. We give them flexibility in doing acquisitions. But that trade-off is for joint and several personal guarantees for every 20% equity owner or greater, liens on business and, in many cases, personal assets, and much stronger guarantors. We're very pleased that in January we brought our fourth ALP securitization to the market, and as I mentioned, it was extremely successful. On slide number 10, you can get a feel for the matrix or what the underlying loans look like in these securitizations. So the total amount of nonperforming ALP loans is $27.6 million, on a current origination balance of $694 million. But total originations, I believe, are $820 to $830 million. So we've actually had low levels of nonperformers and very low levels of charge-offs. I believe total charge-offs are about $6 million to date. Weighted average LTV at origination is 48%. Debt service coverage is 3.3. Very high coupon, very high spread. Now the spread is important because the spread is protected with the call protection of 5% prepayments through thirty-six months and 3% in month thirty-six through forty-eight. You could see we're big believers in the diversification of geography and industry. On slide number 11, the economics of this securitization is discussed further. On slide number 11, you could see that the gross spread before the 1% servicing fee on the last two deals was about $6.65 to $6.70. Net about $5.65 to $5.70. Now these are match funded in a securitization. I should say match funded by the durations. Important to note that although the liability arguably is more expensive than a deposit-gathering sense, it is match funded for term and there's no cost from a depository perspective. Obviously, take deposits in a bank. You've got a lot of different costs to service the loan, to help the customer, etc. But here, you've got a 565 basis point spread. Set it and forget it. Clip the coupon, and you could see that on slide number 12, these securitizations pay down very quickly. And they pay down quickly because the excess servicing goes to pay down the senior bonds. The overcollateralization that you see on slide 12 on 2026-1, 2025-1, 2024-1 happens rather quickly. As that's happening, what's occurring is the book value where the loans in the special purpose vehicle versus the amount of debt keeps growing. Matter of fact, on average, the book value should equal the fair value of these in approximately three to three and a half years. Extremely important when it comes to being comfortable with our valuations. Slide number 13, our nonbank lending subsidiaries: the payments business, which we've owned since 2002, grew and contributed about $16.8 million of adjusted EBITDA in 2025, and is forecasted to do $17.9 million in 2026. Our insurance agency is growing nicely, particularly as it's been positioned with the bank and uses automated processes to make insurance available to people that are borrowing money, and we've contributed $740,000 of pretax income in 2025. We think it'll be about $1.06 million in 2026. Payroll contributed $450,000 of pretax net income; we expect to generate $6.30 million. We have high hopes and expectations for both of these businesses as they are particularly payroll and payments connected to the bank account. All of NewtekOne's business lines have and should continue to contribute growth to business deposits. We've talked about the new triple play offering, which includes merchant, payroll, line of credit, and a bank account. We're continuing to polish up this offering and enhance the client experience: one application, three approvals. Slide number 14. Newtek Small Business Finance is the legacy nonbank SBA lender that has the uninsured loan participations that are sitting in securitizations and are paying down. The remaining loans are from the tougher vintages of 2021, 2022, and 2023 and had tremendous stress as rates went up three to five points during that period. In addition to having their debt service almost double, we all know that during that prior period we had a lot of inflation: labor costs going higher, insurance costs going higher, rent going higher. So this is a fairly stressed portfolio. However, we have reported stabilization in credits both at the HoldCo and in the bank. Nonaccruals at fair value are leveling off. Net increase in nonaccruals ticked up a little bit but remains a fairly low number. Notes issued in securitizations total only $127 million left. Those notes are capturing the cash flow until they get paid off, so we look forward to eliminating those notes as the loans pay off. The loans in the NSBF portfolio not too long ago represented 32% of the total balance sheet; it's now down to 13%. As we said earlier, the loss declined in NSBF to approximately $20 million from $28.7 million the year prior. The accrued portfolio is down $88 million over the course of the last year. One hundred percent of NSBF loans are now aged three months or more, so they're through the tough part of the default curve. Also on slide number 15, we talk about some of the creditworthy aspects at the bank. You can see our delinquency or currency ratio: the delinquency ratio is down precipitously. Charted provisions for credit losses are covering charge-offs; NPLs to total loans are stabilizing and declining—good metrics for NewtekOne and its shareholders. With that, I would like to pass the baton to Frank DeMaria, our CFO, who will go over some financial performance metrics for the company.
Thanks, Barry. The next seven slides will guide into the details of the highlights that Barry touched on. Turning to slide 17, we have our financial highlights for 2025. We are particularly proud that we're able to concurrently generate balance sheet growth, earnings growth, efficiency, and strong profitability while maintaining healthy capital ratios, all while our nonbank lender NSBF continues to run off. Slide 18 runs through Newtek Bank's highlights, which paint a similar picture of balance sheet growth, earnings growth, efficiency, and profitability. Important to note is the overall downward trend in our cost of deposits as we continue to see a shift in the deposit mix with the growth in business deposits throughout the year. While our ACL to loans held for investment coverage ratio remains healthy, we are starting to see a leveling as we've built the ACL over the last three years and start to see the bank's portfolio begin to season. On the next slide, Newtek's deposit story continues to be a good one. We're growing both business and consumer deposits and offering what we believe to be tremendous value to both consumer and business depositors. As I briefly mentioned, the cost of deposits at Newtek Bank declined roughly 16 basis points sequentially coinciding with lower market rates. As Barry mentioned earlier and as noted on this slide, we're finding success in lending clients opening bank accounts with roughly half of the borrowers opening at least one bank account since we acquired the bank in early 2023. We expect that penetration rate to grow over time. We also believe we're creating sticky deposit relationships given our competitive market rates on deposits, our integrated business portal, and our insured deposit rate, which currently sits at 74%. Shifting to Newtek Bank's held-for-investment portfolio on slide 20: the held-for-investment portfolio increased roughly 44% in 2025, with the portfolio mix largely unchanged throughout the year. Unguaranteed portions of SBA 7(a) loans comprise roughly 60% of the held-for-investment book, while the allowance for credit losses related to the unguaranteed 7(a) portfolio makes up the bulk of the bank's ACL, which resulted in the previously mentioned coverage ratio of just over 5% at the end of the year. On the next slide, we show the operating leverage continues to be a meaningful contributor to our financial performance. We have consistently stated that our technological and operational platform was designed to support a much larger balance sheet and organization, and we continue to deliver on those statements. Annual operating expenses were up just 2% in 2025, against 33% growth in assets, which supported the year-over-year decline in the efficiency ratio from 63% to 58%. We included the next slide in our Investor Day presentation a few weeks ago. We have maintained fairly stout regulatory capital ratios, and we've grown the balance sheet, strategically layering in capital along the way. I'll conclude my portion of today's discussion with Newtek's financial projections for 2026 on slide 23. Relative to diluted EPS of $2.18 for 2025, we have established an EPS guidance range of $2.15 to $2.55 for 2026, a midpoint of $2.35. Estimates incorporate $1 billion of SBA 7(a) originations, $500 million of ALP or long-amortizing C&I loan originations, $175 million of SBA 504 originations, and $150 million of net growth in the combined C&I and CRE portfolios. Projected originations and net growth reflect step-ups from 2025 levels. We've included a quarterly EPS view for 2026, which reflects the recently closed ALP 2026-1 transaction in the first quarter and a projection for a second securitization this year in the fourth quarter. With that, I'll turn it back to Barry for the last few slides ahead of Q&A.
Thank you, Frank. Slide number 24, which we talked about at the beginning of the presentation, represents a lot of what NewtekOne and Newtek Bank National Association are trying to do. We don't look like a community bank. We don't act like a community bank. We basically have built a financial institution to service our customers utilizing technology. We're able to provide a frictionless environment to exchange information, have customer service and business service specialists be on a camera, and be available on demand. We give our business clients the ability to send and receive money at the lowest cost with the greatest amount of data and the greatest amount of analytics to run their business. We actually give them loans that are valuable. Not 'I'll fund you in twenty-four to forty-eight hours and forget what the rate is, but you have to pay me back the principal in six to twenty-four months.' From a branding perspective, we disagree that being able to charge those high rates for quick money really provides great brand value. We do provide great brand value. Yes, we have larger provisions. Yes, we have greater allowance for credit losses covering the amount of losses that we'll achieve. We have accurately forecasted what our charge-offs are and what our losses are, and we have that reserve. On top of that, we have ROAs at the HoldCo of roughly 2.7% and ROTCEs at the HoldCo approximately 20%. So we're able to earn greater returns with greater margins on a net basis. We're an organization that manages credit risk, not avoids it. When you look at the other organizations in the market that were also disruptors—some for consumer, some for online deposits—Axos: almost five years on slide number four before their stock started to move higher; now trades 11 times consensus, 207% of book value. Why about bank? Five years before the stock started to move; trades at 13 times 2026 consensus, 164% of book. TFIN, six years before the stock started to move; trading at 40% of 2026 EPS. SoFi, two and a half to three-year period, sideways to low before the stock made a move. It just takes a while before investors get comfortable, get a feel for how the business works, and test the model. You see it in Northeast Bank. You see it in LendingClub. These are all good markers for us. They're all technology-enabled banks that have been able to service their client base in similar ways to what we are. But we obviously have positioning and expertise with SMBs and independent business owners, a very viable and valuable demographic in the marketplace that we've developed expertise in over two decades. With that, we appreciate the opportunity to present our Q4 and annual results, and operator, we'd like to go to the Q&A.
Questions and answers
Question. You will need to press *11 on your telephone. To remove yourself from the queue, you may press *11 again. My first question comes from the line of Tim Switzer of KBW. Question, please, Tim.
Hey. Good afternoon, guys. Thanks for taking my question.
Thank you, Tim. You too.
Yeah. Barry, you fooled me for a minute at the beginning—I thought we were getting this Q&A within the first five minutes. That would have made everybody happy, but it was a half an hour. We're getting better. We're practicing. So my first question is something in the press release: you mentioned that you increased deposit account openings by about 50% this quarter. I know you talked a little about that at Investor Day. It seems like a pretty sizable increase in one quarter. Could you talk about what was driving that and what your expectations are going forward? It seems like there are some pretty good trends.
Thank you, Tim. First of all, we believe that the ability to access us digitally from your home in a frictionless manner for business deposits as well as consumer deposits is important. There's plenty of firms that do consumer well; it's a little harder to do for business—harder to acquire and harder to manage. We've been through three years of audits, and it's worked out well. I think we've got very good margins in our business. I believe the NIM at the bank is in the five handle—around 5.3 or 5.4. So we're able to offer a generous rate and no fees, no asterisks. Now some people say those are really risky deposits. I think 78% of them are insured. The important part is they're at market rates. Those people aren't going anywhere. Our portfolio can afford to pay that deposit base. The fact that it's frictionless, the fact that our alliance partners appreciate what we're doing, we're bringing on more alliance partners, and we'll continue to grow deposits to fuel good loan growth.
Awesome. If I'm looking at the noninterest income detail, gain on sale was maybe a little light relative to what we had expected. It was flat quarter over quarter. Could you talk about some of the trends there and what we should expect next year given your guidance for about a billion dollars of SBA originations?
We do expect 7(a) business to pick up again. It was a bit of a shift. There have been a lot of changes in the SBA world; some were more dramatic than I expected, such as the citizenship issue and the inability to refinance MCA product. Recently, I think the SBA moving away from the SBSS score is somewhat helpful. We're waiting for further guidance on that, but they're asking us to use our own scoring methodology. The SBSS score will stick until the 31st. I think volumes will improve. Some fintechs have exited or are struggling. The SBA is requiring forecasting of debt service coverage over time, which will force many fintechs—technology companies that are not credit-focused—to change their front-end intake. We don't need to change as much. We've always used the five C's of credit: we take liens, we spread financials, and our technology and AI support this. I think we're better positioned competitively.
Okay. Got it. A few cleanup questions if you can. First, what were the net charge-offs for the bank subsidiary? I might have missed it.
Total charge-offs on all loans held for sale and investment at 12/31 were about 2.2%. At the bank, total charge-offs were $8.2 million for the quarter and $23 million for the year.
Okay. That's helpful. Are you able to provide the breakdown you have in the 10-Q for the gain on loans accounted for at fair value? Specifically, what portion of the combined $25.6 million this quarter was from ALP loans versus SBA loans?
So to answer that, Frank—go ahead.
It was about 35% on the ALP with the remainder on the 7(a) loans that we're holding, with a slight loss in NSBF.
Okay. With a slight loss in the NSBF, right?
Correct.
Okay. So I'm calculating NSBF with the $20 million loss for the full year. That's close to, like, a $67 million loss this quarter, so it stepped up a little bit.
That's right. That's correct.
Okay. That's all for me. Thank you, guys.
Thank you.
Our next question comes from the line of Steve Moss of Raymond James. Please go ahead, Steve.
Good afternoon, guys.
Steve.
Just circling back to the SBA originations: I hear you on the rule changes being a big disruptor. You indicated the challenges a lot of businesses faced. What are you seeing for business confidence and activity these days versus maybe six or twelve months ago?
I think the rate cuts of about one and a half percent from the high have been helpful, but it's a K-shaped economy: there are haves and have-nots. Businesses serving the lower end of the market are struggling; businesses serving the middle market or the upper end are doing well. You need to pick your spots. We hope productivity kicks in in 2026 and inflation numbers push things down. I wouldn't say we're seeing that broadly yet. Commodity prices have picked up, and the Fed likely won't move until there's more clarity. Overall, business confidence is pretty good. Businesses are willing to invest, particularly in technology to make their business more efficient and reduce expenses.
Great. On ALP originations, you had another good quarter. Do you expect that cadence to continue throughout the year, or a step up? Or might there be some weakness in the first quarter?
The first quarter is always a tough quarter for lending; it's typically our weakest quarter. Industry-wise, people tend to draw at year-end and then are quieter in Q1. Regarding ALP loans, business owners come to us for loans generally—they don't specifically ask for a 7(a) or ALP. We offer a product that lowers payments by providing a longer amortization, which is a different competitive offering than daily-debit MCA players. By adding ALP or C&I held-for-sale loans that go into securitizations, we're developing a reputation. If you want a loan that is not MCA or daily-debit and you want a low payment, we are the place to come for long-term patient capital. We're bullish on ALP or C&I held-for-sale because it can scale and go into securitizations. We also make other types of loans, including shorter-end loans with a full covenant package, balloons, and short repayments for borrowers that insist on a lower rate.
In terms of the expense side, you did a good job on expenses. You're continuing to upgrade systems and polish the client experience. How are you thinking about investments and the cadence of expenses going forward?
There's always a push and pull on the expense line. We're continuing to grow the business and are putting expenses into business deposit functionality and gathering. I feel very good about the C-suite—the team is solid and has a new-tech culture. I may add executives in business development to help grow the business and support Andrew Kaplan, our Chief Strategy Officer, who has done a fabulous job. I don't expect explosive expense growth. Revenue growth has outpaced expense growth. We had a good year last year, and we are reserving thoughtfully in the expense line for next year, so it should be comfortable for us.
Got you. I appreciate the color. I'll step back in the queue. Thank you very much.
Thank you, Steve.
Our next question comes from the line of Christopher Nolan of Ladenburg Thalmann and Company. Your question, please.
Hey, guys. Thank you for taking my questions. Looking at the forward guidance, it looks like the efficiency ratio is projected to be pretty flat at current levels, around 55% to 56%. Assuming that's true, what do you see as the leverage for EPS growth in 2026?
Chris, I hope we beat that expense line. I see the big leverage in continuing to grow business deposits from payroll and merchant services to lower our cost of funds so the dollars we spend to build out inexpensive deposits will lower recurring liability cost going forward. In addition, ALP loans or C&I loans held for sale are larger average sizes which makes it easier to get volume: average SBA loan size might be $400,000, while average ALP loan size is $4.5 to $5 million. That's where we see the leverage. There's also leverage in operating efficiency at both the bank and the HoldCo. We need to continue to watch the expense line; I'm hopeful we will beat the projected expense line for the year.
Okay. That sounds like margin expansion will be the leverage. As a follow-up, congratulations on the deposit growth. Have you put in a mechanism where you deposit the loan proceeds into a Newtek deposit account for that client, which helps drive deposit growth?
Yes. When you apply for a loan, the data used to apply for the loan automatically populates the application for a bank deposit, which goes through KYC/AML/BSA review so that the deposit account is approved without a separate application, using the data we get from the loan. That's made the process much more automatic, and we've had this in place for about six or seven months. We are requiring borrowers to make loan payments out of that Newtek account.
Oh, okay. Great. That account is a core deposit account with a competitive rate, correct? That will be a driver for lower deposit cost.
Correct. It's a very competitive insured deposit account with no fees for ACH or wires in many cases. That helps increase utilization and stickiness. If your staff is listening, they should diligently talk to customers and explain that this is one of the best accounts out there with zero fees and high functionality.
Sounds great. Thanks, Barry. I'll pass it on. Thank you.
Again, to ask a question, please press *11 on your telephone. Our next question comes from the line of Dylan Hines of B. Riley Securities. Your line is open, Dylan.
Hey. Thanks for taking the question. Could you share your perspective on how Newtek's SBA loans are performing versus many others in the SBA sector that don't have your underwriting and other business services offerings that create better long-term customer relationships?
If you look at SBA.gov, you'll see our five-year and ten-year charge-off rates are about industry average, which is where we'd like to be. That fits our mission of making loans to business owners across the United States. We prequalify customers quickly and then take in the other information; we're right in the industry range. Our margins typically dwarf some of our big competitors. I'd suggest looking at our margins versus competitors with respect to ROAA, ROTCE, and gain on sale. Being able to put the loan out and treat the customer well allows us to get a full-margin loan without resorting to extremely high pricing.
Got it. Thanks for the color.
I would now like to turn the conference back to Barry Sloane for closing remarks.
We appreciate the questions and the hard work the team has done to make this better and more concise. We look forward to continuing to drive results in 2026 with the momentum we had in 2025. We have some challenges but good momentum at our back, and we want to follow in the footsteps of other disruptors in this industry within our category of serving SMEs, SMBs, and independent business owners. This market is pretty untapped, and we've got a two-decade head start on most players in the space. Thank you everybody for attending, and we look forward to reporting in 2026.
This concludes today's conference call. Thank you for participating. You may now disconnect.