管理層發言
Thank you very much, and welcome everybody to our first quarter 2025 final results conference call. Today I am joined by my two Chief Financial Officers, Scott Price, the CFO of Newtek Bank National Association, and Frank DeMaria, the CFO of NewtekOne, the Publicly Traded Bank Holding Company. For those of you who would like to follow along on our presentation, please go to our website newtekone.com, go to the Investor Relations section, and the PowerPoint presentation that we'll be addressing today is hung there. I also wanted to do a couple of honorable mentions. I wanted to thank Bryce Rowe, who recently joined us as VP of Investor Relations. He's done a terrific job in helping put our deck and press release together, and giving a lot of data within the deck and the press release to simplify our story. And I also wanted to thank Nick Young. Nick is the former President and Chief Operating Officer of Newtek Bank National Association.
Nick, as many of you are aware, has left our organization, although he's still with us until the middle of May. We haven't banished him to the Gulag. He hasn't banished us to Siberia. If you'd like to chat with him, you can get him at nyoung@newtekone.com. Nick, over the course of approximately four years, did a great job of taking a single branch, very manual bank in Flushing, Queens, and creating our digital platform, which today does a fabulous job of opening up 15,000 accounts remotely, transferring over our lending business to the bank, getting through to regulatory audits, which we're very appreciative of. And the mark of a great company is having a deep bench. Peter Downs, a 22-year veteran of Newtek, the Chief Lending Officer and current President of Newtek Small Business Finance, who was largely responsible for SBA business and its success over the course of two decades, has been named as President of Newtek Bank, and we're appreciative of having that deep bench.
We did a lot of listening to shareholders and analysts recently, particularly yesterday and in the evening. We've done a lot of reshaping and structuring of the presentation, simplifying a bunch of different important issues. More importantly, we believe we'll be able to demonstrate today the really attractive progress that we've made, growing deposits, growing loan growth, being compliant, balance sheet growth, and basically moving through the cycle of establishing a portfolio at the bank level, which is very different than what you'd normally see in 98% to 99% of the other banks. I think one of the things that we want to stress is the traditional metrics that are being used to analyze banks don't apply here. And I think as you go through the deck and we start to explain things a little bit in more of a granular fashion, you'll be able to appreciate that. Once again, part of our challenge is we don't really look anything like a typical bank.
Most banks have bank holding companies, which is the publicly traded stock that has very little in them except the bank itself. We actually have more capital invested in other assets and in equity than we do at the bank. I think that's important to note. I think it's important to note that some of the things that differentiate us, we make loans and we sell them. It's a good mark that you can sell them. Sell them means that the loans are made in a good manner, whether they go into a securitization, whether they're 504 loans that are sold to other banks, whether or not they are SBA loans, they're done according to SBA guidelines, a business that we've been in for over two decades. Fair value, I think, has confused a lot of investors and analysts. We've been a fair value player almost our entire life, but significantly since 2014, we were a BDC. The CECL Reserve accounting, which we have adopted in the bank, is fairly punitive because you take the losses up front and you don't get the benefit in the SBA business of the prime plus three coupon, except into the future.
We're building a very nice portfolio of those. We still believe very strongly that a lot of the metrics we're being measured on don't hold. Banks, frankly, it's a bit of an oxymoron, a growing bank. Most banks our size do not grow; they maintain themselves. So if you look at what we're doing here, we make money. You can see that by earnings; we grow shareholder equity. We believe this is the way banks will operate in the future, without branches, without traditional bankers. Obviously, we're all familiar with AI and the benefits that AI is going to provide businesses and industry. We're doing a lot of things that utilize artificial intelligence today. And I think that we're clearly misunderstood. And as a matter of time and data and analysis, there is opportunity in NewtekOne. We feel really good about our progress. But to be frank with you, we feel bad about the market's misunderstanding.
And today's efforts are going to be directed towards bridging that gap. Once again, I want to thank you for your time and interest before we go into the presentation and investment. And either way, we appreciate you, whether you like us or you're one of the 1.8 million stockholders that are short the stock. Let's go to Slide number 3.
I'm here, Barry. Thank you. Good morning, everyone. Slide 16 shows our deposit growth through and the mix as of March 31st. You'll note that deposits were relatively flat when compared to 12-31, '24, with the mix shifting to core deposits in the business and consumer spaces and slightly lower brokered funds. Our average cost of deposits at Newtek Bank were approximately 4%, and we expect that to drift down to roughly 3.8% to 3.85% for the full year of 2025. We did lower our rate on high-yield savings during the quarter, as well as our rates offered on our six-month consumer CD. It's important to note that we have approximately $250 million of consumer CDs that will mature or renew in the second quarter of 2025. Those CDs will be maturing at rates that approximate 5%. Our current offer rate is around 4.25%. It could drift up, depending on retention, and so we expect our manager's margin, as well as the weighted average rate on our deposits to drift down over the course of the year. We expect deposit growth in our business category, which is much lower cost in the consumer space, and we will be exploring the brokered market as we move through the year. This will all contribute to lower costs as we move from here and contribute to the positive carry on the SBA 7(a) loans that Barry mentioned earlier. So, with that, I'll turn the call over to Frank.
Thank you, Scott. On Slide 17, we see a snapshot of our net interest margin, which has grown both year-over-year and quarter-over-quarter. Year-over-year, net interest income rose by approximately 56%, surpassing the average increase in earning assets of about 52%. When comparing it to Q4 on a linked quarter basis, the net interest margin expanded by around 24 basis points, compared to a 12 basis point increase year-over-year. We have also showcased our adjusted net interest margin, which includes loans and joint ventures, resulting in an expansion of about 27 basis points. The securitization that was finalized last month will also contribute to increasing that margin due to the higher advance rate associated with it. Overall, our adjusted net interest margin is expected to continue benefiting from the ongoing growth in our ALP program.
分析師問答
Thank you. Good morning, everyone. First, just on the net gain on loans accounted for under the fair value option been elevated in recent quarters, but can you speak to how sustainable you expect those gains to be throughout 2025 with gains related to ALP loans, not the SBA side? Can you just walk through some of the math there on how you generate those gains on the ALP side? Thank you.
Sure. Crispin, on the ALP side, if you take a look at the recent securitization press release, we securitized approximately $215 million of loans with a $13.30 gross coupon. After servicing, of which we get 100 basis points of the servicing, it's $12.30. The net yield on the bonds was about 6.62%, I think, so approximately 570 basis points. So, you know, I ask all of you analysts and investors, you have to do your own math, but we put a fair value on those loans and we discount them back. A lot of this data is going to be in the Q, and I believe it's been in the K, in terms of what we think that the anticipated loss frequency and severity will be. In the DBRS memo and all the information that's public, you can see what the prepayment fees are. We believe our cumulative net charge will also be between 3% to 3.5%, and we have the loans valued as such. So that's how we come up with our pricing.
Okay, you'll have to come up with your own pricing. I think, you know, investors and analysts come up with their own sense of what the value is as well. But when you think about the concept of getting a 570 basis points spread per year on loans that have 5% prepay penalties for the first three years and then three in the fourth, they're not going away that quickly. Our historic charge offs on this portfolio, I think it's currently about $580 million, is about 70 basis points. Now, we think they're going to grow over time, which is why we have them valued using our loss curves at about between 3% to 3.5%. So do we think that's sustainable? We do. We've forecasted, you know, $500 million. That's going to be a challenge. It's always a challenge. It's never easy, but that's a growing book of business. Now, the average loan size on that book is 5 million. So it's 100 units. Okay, 100 units. We did 2,400 loan units last year.
We'll do 2,700 loan units approximately this year. So the answer to your question is, obviously, and I appreciate the question, because it puts us on record. We believe that our earnings and our projections are real, and they're sustainable. Needless to say, anybody that tells you they can 100% accurately predict the future, they're full of it. Okay, this is extremely difficult. We've seen public companies pull their guidance, no guidance, miss badly. You know, we took this bank from a dead start and built a real solid business opportunity in it, which I hate to say we're not getting a lot of credit for our technological business, opening up 15,000 bank accounts, moving the lending business in, going through two regulatory audits, hiring people. And by the way, you know, people coming in and out, that's just a natural thing. People come and go all the time. So yes, I believe it's sustainable.
The 7(a) business, we've been in for over two decades. So we know it pretty well. We know it at high rates, low rates, good, good markets, 08, 09. We've seen a lot of these shows before. So I do appreciate the question. Thank you.
Hey, good morning. Hope you guys are doing well. Can you help us parse through the various pieces that drove the $18 million of fair value gains this quarter? I know there is that $5.7 million benefit sequentially from the lower NSBF losses, but this line item, it still doubled quarter over quarter when ALP originations are about two-thirds the level of Q4, and I think spreads kind of generally widened in Q1. Can you help us parse through the different pieces there? What drove that?
Sure. So, a couple of things, Tim. I would disagree that spreads widened. If you notice, number one, we wound up in our ALP securitization getting an 85% advance rate, and then we sold a BB class with another two points. So, we got much more leverage on that securitization, and we got very good execution on the bonds as well. So, that actually worked to our favor. In the Qs, you're going to get a lot of breakouts specifically. Frank or Scott, do you know what the gain on sale was for the SBA piece of the puzzle that everyone's so wigged out about?
My questions have been asked and answered. Thank you.
All right. Thank you. I appreciate everyone's interest and looking into the company. The questions were great today. It's in depth. We may have disagreements, but we have strong opinions on what we're doing. We've been operating in this space for over two decades. We're good stewards of risk. And we do think we're coming into a difficult time in the market and the environment, and we don't take that lightly. But we're very well prepared for it. We've weathered these storms and flourished in them, and we think we're well positioned to do that going forward. I want to thank the management team. I want to thank Scott and Frank and Bryce and everybody that helped put the presentation on together. We have a lot of new data for people to look at and analyze and look forward to producing the Q, which will give people a lot more information. So, thank you very much. I want to thank the analysts for their questions and participation. Thank you.