Company: NEWTP
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001587987-25-000084
Chunk: 37

Company: NewtekOne, Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 2
Chunk 37
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 pursuant to an SBA approved lender service provider agreement with SBL. The Company will continue to measure NSBF’s SBA 7(a) loan portfolio at fair value until the portfolio is completely runoff. The Company will report both realized and unrealized gains and losses relating to the fair value adjustments on the legacy NSBF SBA 7(a) portfolio.

Net Gain (Loss) on Loans under the Fair Value Option

Net gain (loss) on loans accounted for under the fair value option for the three months ended March 31, 2025 and 2024 were as follows:

For the three months endedMarch 31, 2025March 31, 2024ChangeSBA 7(a) Unguaranteed Loans$(4,579)$(1,891)$(2,688)SBA 7(a) Guaranteed Loans7,965 13 7,952 SBA 504 and Non-SBA Loans14,691 4,676 10,015 Net Gain (Loss) on Loans Accounted for Under the Fair Value Option$18,077 $2,798 $15,279 

Net unrealized gain (loss) on loans accounted for under the fair value option relates to the guaranteed portions of SBA loans made which the Company sells into a secondary market, the unguaranteed portions of SBA loans made which the Company holds, SBA 504 loans that are held for sale, and ALP loans that are held for sale. This gain (loss) represents the fair value adjustment of loans. The amount of the unrealized gain (loss) is determined by the quantity of loans held for sale at quarter end, the change in secondary market pricing conditions, and the valuation of the loans that are not held for sale. 

During the three months ended March 31, 2025, the Company recorded unrealized losses on SBA 7(a) unguaranteed loans accounted for under the fair value option as the portfolio paid down. During the three months ended March 31, 2024, the Company recorded unrealized gains on SBA 7(a) guaranteed loans accounted for under the fair value option of $8.0 million primarily due to holding guaranteed portions of SBA 7(a) loans for longer periods of time.

The $10.0 million increase in gain on loans accounted for under the fair value option from SBA 504 and Non-SBA loans is primarily volume driven from an increase in ALP and 504 origin