Company: NEWTP
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001587987-25-000141
Chunk: 96

Company: NewtekOne, Inc.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 96
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    On March 19, 2025, the Company completed an exempt offering of $30.0 million aggregate principal amount of notes due 2030. The Notes will mature on April 1, 2030. The Notes bear interest at a rate of 8.375% per year, payable semiannually on April 1 and October 1 each year, commencing on October 1, 2025.

The increase in interest expense period over period is primarily from additional interest expense on deposits of $6.8 million, additional interest expense of $1.5 million on bank and FHLB borrowings, and additional interest expense of $2.0 million, $2.7 million, and $3.5 million on the 2027 Notes, 2029 8.50% Notes and the 2029 8.625% Notes, respectively. The increase is partially offset by a $5.1 million reduction in interest due to securitization payoffs, as well as a $2.3 million reduction in interest expense on the 2025 8.125% Notes. 

Provision for Credit Losses

The provision for loan and lease credit losses represents the amount necessary to be charged against the current period’s earnings to maintain the ACL on loans at a level that the Company believes is appropriate in relation to the estimated losses inherent in the loan portfolio.

For the six months ended June 30, 2025 and 2024, there was a provision for credit losses of $22.6 million and $9.8 million, respectively. The increase was due to increases in net charge-offs, specific reserves on individually evaluated loans, and balances of loans held for investment at amortized cost, across all products but specifically SBA 7(a) loans.

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Net Interest Income and Margin

Average Balances and Yields. The following table presents information regarding average balances for assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amount of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. The yields and costs for the periods indicated are derived by dividing the income or expense by the average balances for assets or liabilities, respectively, for the periods presented and annualizing that result. Loan fees are included in interest income on loans.

Six Months Ended June 30,20252024Average BalanceInterestAverage Yield / RateAverage BalanceInterestAverage Yield / RateInterest-earning assets:Other interest