investment operator XXXX financial you, all interest. participants for and your well like welcome quarter second the your today call our to – Newtek results continued thank as as everybody to Thank in conference I'd call.
Towers. earnings to presentation today me our you follow hung last the Chris section our website, from call Go like you the to Chief take at Accounting is where Go Joining the the also typically will to our released to call we that's newtekone.com. along PowerPoint night. the Officer, on time I'd able everyone's presentation. at attention can to Investor and a Relations look be
the historic we with I'd to start-off returns presentation equity like now to X and everyone's like do our forward NEWT. attention of to on page
So and years when dividends XXth; XXX%, a of which includes that fully you these of almost we BDC, the return also return. prices one-year XXX%, see could June course five-year of time as return the period that three-year XX.X% five-year all five were over return during encompasses are the
So to deliver shareholders. being we're our able proud to our extremely and results of history
the three of financial XX% number the over the to increase slide quarter at to months quarter for the looking prior the in XXXX in – month forward Moving total investment second XX, June highlights, an XXXX our able were prior for we and grow income quarter year. ended ended three
XXXX ended reported $X.X XX, to for a loss, originally narrowing with June net million million. Our had investment months three which NII income $X.X for we GAAP BDCs, income the was in
we stands beneficial and proud means why what for that into clearly clearly what go of will We it's that shareholders. it and narrowing our to and are actually
for June that quarter XX.X% gives XXXX. note exceeded an quarterly analyst we ended loan we strong only by given NII, encompasses I and a XX, earlier to a guidance a our analysts. of the X(a) had to compared breakouts as And we with increase the us it NII of annual activity, dividends forecast all one SBA year company should penny. better on metric real the the Adjusted adjusted which that leave view quarter
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with only also $XX which by versus earlier not and increased June million a June senior also facility our that of the $XXX based XXXX. X(a) year XX% SBA from credit off Capital XX.X% We're to and proud that upon XX, in and XXXX our from business, a portfolio Bank was investment the increase signed by Total number lenders the indicative go that our our up XX, good million, $XXX was announce approved to regulator. increase but had is to One million by standing we
slide a Slide number X utilizing. this have is that we kept
upon receiving be receivable. of it's at based have the cash important we'll that by assemblage from quarter Street end the piece. broker note is The broker a that government-guaranteed XX Wall the receivable think I we to a
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number the is NII, BDCs. X Moving which to slide term we for about GAAP talked
has aware, event As Newtek reoccurring we for income for you XX X(a) SBA have This are significant of many gain-on-sale been from loans. years. a
not And BDC vehicle. and a investment different them. sell It's make are for based of the utilize hold calculated They a gain we do calculation an loss. format a comes that loans for odd upon and BDCs make out as investment the been show five little why way is up a bit Now us sale the format. on duck We them. of years. which type They loans like great and net NII look is
portfolio our we that contributions our get servicing and larger. our We're our this portfolio up, will loan as report income we believe from grows and to and anticipate lending that trend gains particular larger from business area. of this continue income conventional that and of float Important particular to happy grows the other to the note companies form
about to applaud new different. like investors that has analysts investors to and able typically analyst investors work. from the other to bones ask be our done an analysts BDC. model that our track make business believe We the do who us We We community and have those do any to we're it. that We please create would I tell no work. entirely
about and split been the and throes of have in think XXXX, the last historic you at I our rewarded reverse in the you would $X.XX financial collapse our $X.XX. per stocks even traded if about Clearly, at five years have over did the equaled day. look years, XX We returns which
thankful the analysts those worked those for studied it's community with for we're do have have investment its understand model and historically, We done So been Newtek, Newtek, the business that people that rewarding. ask and work.
trend important upward was the we NII. number felt in slide On adjusted X, to demonstrate it
in calendar at we a take We year. will you the 'XX, a We've anticipate that very If dividend of the out been and be paid dividend nice 'XX typically here. so and growth always able have forecast look that those XXXX earnings. do for to also state forecasted $X.XX 'XX,
forecasts believe those from company see, could the those in that year. have adjusted So, for two the NII in they growth will further
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and earnings do have and dividend, third seasonality and significant also we X, is a do bigger point quarter adjusted earnings. we for that fourth fundings. originations The in payments number part loan quarters of our out our business quarters They're our for our quarter NII. slide are bigger which On
trends, look take half at approximately come you of a our of in the in year. If XX% the do the earnings calendar second
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right So that moving we're the what see. clearly based we state upon to direction proud in we're
above dividend of income to above.XX. have or where always as And and metrics look our our you XX a that can do to we a XXX% at currently between our initially XXXX be And state, within payout forecast anticipate range. XXXX. paid dividends And cash take it's XX% in at annual dividend taxable at been historically we we
again once to important note, not BDCs. think, other please it's I with do confuse us
And in hard a to prices word as right being tandem time loans. command dividend maintain dividend. as of are them earnings, portfolio we they purchase we should our obviously we and able other stock static growing grow a really most have our use I'll the BDCs their should. and It's and around Most better with the with dividend, trade, NAV
three the highlights, lending increase talks XXXX. funded Slide and a months XX, during loans XX.X% number X(a) in growth ended X X(a) about June our
annual remind at of It's a we last quarter-to-quarter. we forecast Looking in in stock annually of not It and things here year not this a range. once like XXXX, please numbers, everybody we point I SBA straight $XX.X but had want look have million forecast again, exaggerate loans XXXX. $XX.X over the call, annually off we we trading traded because, that, an was the don't on are in XXX% us basis, XX%. we at do mean, increase that I fundings million funded business, factual $XX go to in July to of those a on and December in a line. up where week July, why to is
And that said, to the going No, have I window freeze we you of question from and what a can't trend get look institutions another perspective doing how opportunity the I've have one Well, when missed in. take did they're spoken that is, tell to, people to at going you or I kind primarily to that we're a get gee, maybe many comes long-term investors that here in? participate? are to dip.
$XXX million X(a). at XX.X%. $XXX looking be of million funding XXXX forecast still would to That a We're X(a) for
fair, the point. the what I the of would half or will that guide year, that be the I still but range, keeping still the experienced or to possible lower we're midpoint we're wide is first the we're guidance the Given certainly hit guiding and midpoint the But you, be it tell range keeping to able over to to midpoint we've lower or point. to high end of but probably
gave NEWTL. dip us issue Sufficient XX the have It's bond is on opportunity on business. be NASDAQ, to capital been rally premium. is the to at with the our income a trading fixed recent listed market, that market trading able in bond able and a We're number that The the do thrilled to to slide well.
human going to respect fundings on that of require tremendous not will capital, capital We're expense in estate. or flexibility. for There's us including really our anticipate into capital investment All baked us We side, very future historic gives nice give the amount made that real with well going issuance numbers. million forward. operating green loan some doesn't good some equity, $XX demand. nice additional forward, us raise positioned the and shoe, big a is leverage to growth
XX, XX to $XXX a loan April conventional really and number million, if joint will it. we enable We need about which $XXX Deutsche it. million us facility excited BlackRock. will about we us with on additional to Bank Slide We're talk secured give venture leverage up closed our with senior recording
We JV contributing referrals between we be qualify business. investment program. or inconceivable could what our of growing, not future loans to for material in non-conforming this that believe that could see, non-conforming current Based the it's X% and X% upon conventional our
the community in JV investment remind audience, the I'd believe, closed around the mid-May. I like to
So relative to we're June, days. operational for XX only about through mid-May
XX, about refinancing talked raise. the to of X.X% We're going the XXXX. be NEWTL we notes Slide number NEWTZ
a maintained of Egan-Jones mentioned on par as As notes rating. I X $XX.XX these their amount. August $XX trading you, were A to minus at
agencies that that pleased to and business So of tend credit are minus. Egan-Jones at at forward guide for rating as A quality, to the our leverage dividends, rating at on those our looked for of looked maintained serve are our model, leverage, looked going and going you our focused growing our we're diversification
Newtek not value propositions of talk with and we're fact NewTracker. a one we investing of them you of Services in the asset take group about XX, fees. professionals is, and lever Corp Business that in number major that familiar are investment Many buy management Slide loans the
with business technology, breathing living, of none shows a are up in number. superior growth employees, which NAV XXX We
the only platform, decade It's over but has secret on been patent, core ago. really the X.X, launched company. which not We've software service of was our a NewTracker a got on the methodology. sauce been our
of Director Dan fabulous of We're XXXX. excited during development us, that IT rolling team, doing third out and quarter who job his Hendel, the a NewTracker for X.X anticipates are
referral team our business partners back putting gives our NewTracker assembling gives into office of and their management transparency It together. referral who memos taking helps are confidence service clients. our manage our our complete specialists we're also full that underwriters staff, from partners credit loans, care
us have grow, to enable our more which robust will launch us capability to data all data this to capability. full our place, all-in-one enable So platform, ultimately database outbound e-mails recorded give increase will calls, master clients, central
extremely efficient origination our are in platform. We loan
be appear the is more see of goal to You'll that and our stagnant, sense just as pipeline, that slowing able the forward, to or growth a work on and line. loans over get which through going being put efficiently might in function makes
just Slide crew great point to XX, wanted of a number out analysts.
our we've addition this and us Day appreciate business that senior follow on and staff. certainly and we Analyst XX, model. XX, covered work number XX, We our companies our to Slide recent tremendous have in five do do calls they the Meeting that XX,
in spent taking to a months of and last Once of on important referrals BSS' some to again time we take to note working and those. be six training able over lot energy the
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of let my have taking I'll on rule. slide after joke commented you about So -- always some
year of first handsomely off back We of in additional continue and So XX-year our the into We'll we staff, into into half look money year investment. software, lot this paid our a to to a into at plowed estate. real over shareholders. training, do of the that as history five-year as investment
at program. largest look X(a) pedigree. the non-bank our the slide Looking SBA XX XX, only number licenses. at is of lender we under We're this There as these
this fourth over more past issued in do like recently Capital entities the decade. JP and average been history nine loans SBA got haven't cetera. track We've We're the category done $XXX,XXX. loan X(a) size full One We've of surpassed et record licenses Morgan including New Bank, in Bank We the lender largest banks. frequency. America, of great a severity and and securitizations of
just efficient. quicker. loans take very earnings a feel weed "Oh some a being We With that. our able our lot very at making to good our go, and the slide pipeline XX about number look about don't We slowing." for god, my more and it's people good We're agree year. feel loan with out pipeline. forecasts We're budget We our
loans through. increased some referrals had need -- typically call For of $XX.X, funding is which partners, you the ended, year-over-year for slow we referrals X.X%. us. fundings in three June month do up XXth and Mind to July XX% a loan Growth we terrific months these loan a
For hit we're those down might of great to are giving the us and opportunities party. without slow them that us always new a referring partners rate, adding we
one last runs at no about acquire technology this opportunities of excited to XX,XXX cost similar probably looked year. a looking To large we're quantities at We're effectively. look knowledge over the really our count excited volumes. we're gross but for what about referral what We year, we're coming at opportunities model. using -- business We'll our business
trend trends for dynamics of sale declining strong are a good up. that's segment Premium market our economy this X(a) of slowing for a business. on very for The the XX.X% and particular rates gain current
and will cause buy investors assume prepayments prepayments. activity Less bonds at So causes higher we less these are to also economic constructive robust which will premiums. slow,
means got seasoning we of that a loans, is XX, talk it's portfolio. seasoning aging. portfolio that's adding number at the rate new and now We've a seasoning, which than large the faster portfolio right the Slide about
the on the amount of we of discussed, this delinquencies curve are and XX, get nature, through default we've loans As in you XX peak defaults month that. experiencing
into our some doing some of XX. number these comfortable see have Slide to out I on we number could non-performing You I you extremely recategorized examples point why XX, loans slide non-performing. that. will slowdown of with give that and trends. we're sub-performing want
get Sometimes to granular community. a little educate think the investment I we too
but the of the balance loan upon to a that non-performing from in the off A no principal that based paid want will collateral. business. valuation to at the want confusing loan be interest loan a longer be able to look too we're is information. cash share the loan A a we repay as current We process liquidating of out sub-performing as loan will We're and that don't able and is The we be business flows in is be a transparent. us to of liquidation. standpoint
that these to you and from can't I'd a are or statistics a XX Q. like to important go number slide deem K
base a how these is a track record high on were our transparent to public at based team has management degree things. non-performing and category. it integrity that and as company are BDC of a as got this strong that two record loans XX-year You've a the track with really looks These five-year
this are in at So written our for area non-performing that not you familiar with looking banks world. of means in off, those lending
loans is into falls category. off These were it Non-performing that loans loan that recently full. two in XX-days the delinquent; past means that paid
of based we've off Okay? paid the loan loan. a and -- $XXX,XXX The redacted the in estate That commercial collateral. first full was the upon sale real name,
loan $X.XXX of The repurchasing wound second government pool. a to up this million, was liquidation. loan The we out transferred guaranteed
in workout loan had Our full. team the paid off
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sheet balance on real-time slide you -- is marked this once number a hitting is on basis. NII, the our be portfolio should are marked attention slide to your -- marking is Driving we XX, off
quarter. an that there single So the is occur will impairment to if think every loan we
gravitate these will hit think We higher charge-offs to numbers. that the stream. earning numbers The
Our get X% belly numbers us When a business somewhere the guesstimate for model giving of that. repeat equity high as are to these business. the to criteria supports X.X%. into curve comfortable we want and credit between I return a on our
Slide with. number you familiar XX, are XX XX,
performance aspect: the we portfolio. -- rehabilitating, do of better of And estate is of credits smaller Here quality amount very trends pleased by clearly real our the acquiring, lot do are a that loan the We commercial purpose for collateralized good our us important business startups. no is we give acquisitions. with refinancing of practically and a
XX XX, number community Slide the familiar quite with. investment
Moving XX go has business review, We slow our XXX anticipated. a XX, number been company than $XX.X I'll to loans to funded the portfolio July of through slide only XXX over SBA roller we've million XXXX.
We are $XXX of revising closings. guidance fundings our in a million million in million from forecast to and down previous $XXX $XX
Delta sometimes between fundings portion closings is funded a partially is and that are construction and occurs. loans of
in continue we this program. off. area and we confident this will are we in more business be optimistic our repositioning a loans, going size larger However, to pipeline to XXX and that's and We've talent growing regarding ourselves as are take bringing
slide conventional were loans quarter piece of these number XXX first million the On the position made we of second that sold. were first XXXX. $XX.X of sales during XX loans
of Some these were sold servicing released.
them see on. of get. nice Some points could prices you that retained the XX basis were But we
second taken senior X by on receive of to piece origination out X fee gets points point both the on government. typically We the the lean which and
on of could X we the to portfolio. can X that and go the where look points books, gains you our loans when So X X, not carry at see including these make on you from
this at quite could see high. equity we on return slide number on business The XX,
loan million believe May our Our XX. on closed through once XX, May I July around loans venture again, in We non-conventional somewhere May JV $XX.X XX. first of funded We XX. lending funded the pipeline the
jump. the could is You pipeline to see starting
to starting to are get this out partners. criteria our alliance We
through, jump very to certainly a it takes the are for that we this pipeline, this imagine, can you about excited while As in but with flow business.
coming can next income from for loan the no year. have joint this venture material do believe it year. conventional We We be
in operating leverage, underwriters their that loan show NAV. our off leverage off our service. Important up These our of to our business, assemblers, of don't are getting capability note are significant referrals, operating of off to we things
in operating number are umbrella nonbank the have businesses lender, that underneath up in NAV. fourth the we The BDC X(a). that doesn't fact We largest show one
that $X.X as things capability our two We've We that billion entities have get show And none final conclusion. a the these -- got are to we'll up to when we NAV. in in of get servicing portfolio.
business Adjusted $X even about last I period off growth like Slide X.X% to portion growing significant the also million which same fourth the same XX, of sold EBITDA is the this income. nicely. number Elavon portfolio occurring time processing in our reoccurring payment year, the note at of with quarter reoccurring we a was income over though
$XX to we $XXX value This point very So business. the business has public growing million We point are I think pleased. the to to enterprise We $XXX which only day comps. This can million business was be payments cash million a operations event being of every business. the of our in needed value lot created leveraged for in debt. certainly that single further has
XX, business. talk our we about technology
have Technology look real IPM to forward only X.X struggle have report Newtek this from We made and of about that coming year, good primarily entities. acquisition Sidco we years with. were were second for which a ago. We Solutions X half the
opportunity as future. get in portfolio we business the the from private competing security a this business And number companies great to could IT service, at things business think XX. provide Amazon, opportunity services are look slide opportunity. not in as middle-market with service, They're contribution great service, portfolio to look hybrid which with think reporting, is with We a dealing big the a execute in on Azure our with we're not nice technology forward optimistic major with take the there could is and believe to be strategy cloud like that on we Google, space We able this dealing a companies. to competing We We're that cloud, competing space. e-mail, They're public cloud, a entity. company. a big you ability about we secure to not give not cloud, as desktop the Microsoft we're
number outstanding are any Management's internally XX. an in think portion ourselves don't we pay an the interest aligned a X.X% our interest is float outstanding with with Moving I very a From managed We've got very of We summary BDC. Management's management shareholders. aligned close investment it's to is much conclusion, much of shares. shareholders. slide fees. significant the
We CDO leverage. not in equity. We're investing don't do SBIC second liens. We have don't
the direct lending getting no isn't exposure lending have from important. a any hair survived the to XXXX-XXXX oil gas bailout or without that our extremely we've and We industry This rodeo; debt track record XX-year holders a got through first cutting government.
I the want to point out one premium on important aspect. to That is NAV price. our stock
see, As and a value very Service we dividends strong made think in growth earnings dividends. factual in way are about Newtek in argument Corp. you could I Growth today Business the growth to
baby benefits BDC over ability that are the which to us, effective capital, tax the to five-years last invest operate We things need to be We we because business, the recent done to including rates raise bond able we've our offering. BDC. appreciate higher treatment particularly because we and generate grow nicely of And a in to we them. model that very of gives the don't our leverage return, lot
an from Street. not buying products in Wall packaged We're auction
on our invested that that that's gain enabling of there The move much, a do none if to floating portion to the are $X premium servicing trade we And Well premium, big portion NAV non-confront platform right? people were is the share? So NAV rate distributing for that a some that's what of argument business. the on valued us NAV. income, are having in in sake, shouldn't a heartburn the significant because However, really sale, at that loan a shouldn't NAV. of is securities
And other for us based that streams. of those a one-on-one different can textbook, in back finance price it's discounted back a of go your of you future rapper. upon for at earnings a stock So business versus you or are those main just to that looking BDC BDCs, a is
that business. entirely And please So well we'll hope flow. we BDCs us. the Please BDC, although if will feel us we we And continue to performance other served particular reward the comparison market have, irrelevant. in follow and a is cash history we that space. this has They've anticipate to are and different this
a Main look really which risk you at Street, took us $XX is the million average investment, look XXX a When perspective, at from I important investments. bellwether.
We average Apollo borrowers over risky? less in to units. XXX balance. What's less X,XXX our XXX book million What's XXX,XXX $XX average have investment risky?
is know I at look X.X at X if lot two is cost or were and a for LTV XX.XX% versus X.X of heartburn fact not midpoint? I let's invest BDC the and say don't a a then to looked space. over ours, LTV in I or XX% But bank like in of in one, the to to have was would measured the a company I I And genre that a is the me matter this how today's versus risk what
it's Now I wrong. but realize, I comment: a might be a lone wolf, I'm going make to
all You other factors. need to these look at
your that Historically, I that need us work to the been appreciate spent work. time rewarded. with you've has do today. You
over to I turn Chris presentation the Chief like Accounting our Officer. to would Towers
