NEWTO · NewtekOne, Inc. 8.5 % Notes -01.02.31

NewtekOne’s Q1 2026 results reflect a material inflection point driven by deliberate technological investment—specifically AI-enhanced loan origination capabilities and the launch of the Newtek Seven Day Business Loan™. The 40% year-over-year increase in loan units (961 vs. 686) and 7% rise in dollar volume ($391M vs. $366M) were not linear across the quarter: management explicitly noted a slower start in January and early February due to staff training and system integration, followed by a sharp acceleration—particularly in March, where unit originations surged 74% YoY to 500 and dollar volume rose 34% to ~$230M. This pattern confirms that the operational improvements are now yielding scalable, repeatable output. Critically, the company attributes this performance to AI’s dual role in reducing time-to-close and lowering costs while simultaneously supporting deposit gathering—a rare synergy that strengthens balance sheet flexibility and funding stability. Management’s reaffirmation of full-year EPS guidance ($2.15–$2.55) despite rapid growth signals confidence in sustained credit quality and margin discipline, especially as they emphasize attracting 'higher-quality credits' through speed and efficiency. The strategic implication is clear: NewtekOne is transitioning from a volume-focused SBA lender to a technology-enabled business finance platform, where speed-to-fund has become a defensible competitive moat in its target demographic of independent business owners. With the Newtek Seven Day Business Loan™ now fully embedded and proven in live production, the company is positioned to capture incremental market share without proportional increases in overhead—potentially improving returns on assets and tangible common equity, as referenced in the press release.