Company: NEWTP
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001587987-25-000084
Chunk: 275

Company: NewtekOne, Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 275
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 Company reports changes in the FV of servicing assets in earnings in the period in which the changes occur. The valuation model for servicing assets incorporates assumptions including, but not limited to, servicing costs, discount rate, prepayment rate, and default rate. Considerable judgment is required to estimate the fair value of servicing assets and, as such, these assets are classified as Level 3 in our fair value hierarchy. Servicing assets for loans originated by Newtek Bank are measured at LCM and amortized based on their estimated life, and impairment is recorded to the extent the amortized cost exceeds the asset’s FV. Net loss on loan servicing assets is shown net of amortization expense.

The larger loss in Net loss on loan servicing assets is due to the decrease in NSBF’s total portfolio of loans during the wind-down.

Servicing Income

The increase in servicing income was related to an increase of $49.8 million in the average total loan portfolio for which we earn servicing income period over period.

Net Gains on Sales of Loans

Net gains on sales of loans for the three months ended March 31, 2025 and 2024 were as follows:

 Three Months Ended March 31, 2025March 31, 2024$ Amount$ AmountGains recognized on sales of loans$13,138 $20,777 Losses recognized on sales of loans(177)(485)Net gains on sales of loans$12,961 $20,292 

 Three Months Ended March 31, 2025March 31, 2024# of Loans$ Amount# of Loans$ AmountSBA 7(a) loans originated542 $213,381 489 $211,504 SBA 7(a) guaranteed loans sold335 100,546 408 156,417 Average net sale price as a percent of principal balance1111.16 %111.23 %

1    Realized gains greater than 110.00% must be split 50/50 with the SBA in accordance with SBA regulations. The realized gains recognized above reflect amounts net of split with the SBA.

For the three months ended March 31, 2025, the average sale price on SBA 7(a) loans as a percent of principal balance was 111.16% compared to 111.23% for the prior period. The decrease in sales prices in 2025 resulted from lower