Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
August 24, 2023
Date of Report (date of Earliest Event Reported)
NEWTEKONE, INC.
(Exact Name of Company as Specified in its Charter)
Maryland
814-01035
46-3755188
(State or Other Jurisdiction of Incorporation or Organization)
(Commission File No.)
(I.R.S. Employer Identification No.)
4800 T Rex Avenue, Suite 120, Boca Raton, Florida33431
(Address of principal executive offices and zip code)
(212) 356-9500
(Company’s telephone number, including area code)
(Former name or former address, if changed from last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.02 per share
NEWT
Nasdaq Global Market LLC
5.75% Notes due 2024
NEWTL
Nasdaq Global Market LLC
5.50% Notes due 2026
NEWTZ
Nasdaq Global Market LLC
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Forward-Looking Statements
Statements in NewtekOne, Inc.’s (“NewtekOne” or the “Company”) Current Report on Form 8-K contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of NewtekOne's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause NewtekOne's actual results to differ materially from those described in the forward-looking statements can be found in NewtekOne's Annual Report on Form 10-K for the year ended December 31, 2022, which has been filed with the Securities and Exchange Commission and are available on NewtekOne's website (https://investor.newtekbusinessservices.com/sec-filings), and on the Securities and Exchange Commission’s website (www.sec.gov). Any forward-looking statements made by or on behalf of NewtekOne speak only as to the date they are made, and NewtekOne does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.
Item 2.02. Results of Operations and Financial Condition
NewtekOne is filing this Current Report on Form 8-K to correct information in certain tables and other information that appeared in the Management Discussion and Analysis sections of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, filed with the SEC on May11, 2023, and the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023, filed with the SEC on August 7, 2023 (each a “Report”). There are no changes to the financial statements contained in either Report. The corrections solely relate to typographical errors in the tables and information below. Although the corrections only relate to a limited number of figures in the tables, we have provided the full tables for convenience. In each case, investors should refer to these tables going forward. The information in this report shall be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended.
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023:
The table appearing under the heading “Loans” on page 59 is revised as follows:
March 31, 2023
December 31, 2022
Change
Loans held for sale, at fair value
$
125,639
$
19,171
$
106,468
Loans held for investment, at fair value
532,788
505,268
27,520
Loans held for investment, at amortized cost, net of deferred fees and costs
166,828
—
166,828
Allowance for credit losses
(2,189)
—
(2,189)
Total loans held for investment, at amortized cost, net
164,639
—
164,639
Total Loans
$
823,066
$
524,439
$
298,627
The table appearing under the heading “Borrowings” on page 60 is revised as follows:
March 31, 2023
December 31, 2022
Borrowings Outstanding
Borrowings Outstanding
Change
Capital One Lines of Credit:
Capital One line of credit - guaranteed
$
46,150
$
10,500
$
35,650
Capital One line of credit - unguaranteed
67,603
45,385
22,218
113,753
55,885
57,868
Other Bank Borrowings:
Webster NMS Note
39,538
—
39,538
Webster CDS Line of Credit
2,180
—
2,180
SPV II Deutsche Bank Facility
6,933
—
6,933
SPV I Capital One Facility
18,882
—
18,882
SPV III One Florida Bank Facility
13,613
—
13,613
FHLB Advances
24,531
—
24,531
Total Lines of Credit
105,677
—
105,677
Notes due 2024, 2025, and 2026:
2024 Notes
37,958
37,903
55
2025 5.00% Notes
29,365
29,306
59
2025 8.125% Notes
49,040
—
49,040
2026 Notes
113,025
112,846
179
Total 2024, 2025, and 2026 Notes
229,388
180,055
49,333
Notes payable - Securitization Trusts
248,577
279,136
(30,559)
Notes payable - related parties
—
24,250
(24,250)
Total
$
697,395
$
539,326
$
158,069
The table appearing under the heading “Interest Expense” on page 62 is revised as follows:
(in thousands)
Three Months Ended March 31, 2023
Three Months Ended March 31, 2022
Change
Notes payable - Securitization Trusts
$
5,034
$
1,490
$
3,544
Bank notes payable
3,731
425
3,306
2024 Notes1
605
605
—
2025 6.85% Notes2
—
280
(280)
2025 5.00% Notes
434
—
434
2025 8.125% Notes3
884
—
884
2026 Notes
1,761
1,761
—
Deposits
1,475
—
1,475
FHLB Advances
207
—
207
Notes payable - related parties
—
106
(106)
Total interest expense
$
14,131
$
4,667
$
9,464
(1) On December 29, 2021, the Company partially redeemed $40.0 million in aggregate principal amount of the $78.25 million principal amount of 2024 Notes outstanding at 100% of their principal amount ($25 per Note), plus the accrued and unpaid interest thereon from November 1, 2021 through, but excluding, the redemption date.
(2) On May 2, 2022, the Company redeemed all $15.0 million in aggregate principal amount of the 2025 6.85% Notes at 100% of their principal amount ($25 per Note), plus the accrued and unpaid interest thereon from February 28, 2022 through, but excluding, the redemption date.
(3) On January 23, 2023 the Company completed a private placement offering of $50.0 million aggregate principal amount of 8.125% notes due 2025. The Notes will mature on February 1, 2025. The Notes bear interest at a rate of 8.125% per year payable semiannually on February 1 and August 1 each year, commencing on August 1, 2023.
The table appearing under the heading “Non-Interest Expense” on page 66 is revised as follows:
Three months ended March 31,
2023/2022 Increase/(Decrease)
(in thousands)
2023
2022
Amount
Percent
Technology services expense
$
3,803
$
—
$
3,803
100.0
%
Electronic payment processing expense
4,504
—
4,504
100.0
Salaries and employee benefits expense
19,119
5,109
14,010
274.2
Professional services expense
3,440
1,301
2,139
164.4
Other loan origination and maintenance expense
2,827
6,483
(3,656)
(56.4)
Depreciation and amortization
873
63
810
1285.7
Other general and administrative costs
4,631
1,753
2,878
164.2
Total other expense
$
39,197
$
14,709
$
24,488
166.5
%
The information appearing under the heading “Origination and Loan Processing” on page 66 is revised as follows:
Origination and loan processing expenses during the three months ended March 31, 2023 was $2.8 million compared to $6.5 million for the three months ended March 31, 2022. The change was due to the consolidation of the affiliated servicing company during the year, resulting in the elimination of the intercompany expenses.
The table appearing under the heading “Cash Flows and Liquidity” on page 74 is revised as follows:
(in thousands)
Three Months Ended March 31, 2023
Three Months Ended March 31, 2022
Net cash provided by (used in) operating activities
$
(116,359)
$
6,478
Net cash used in investing activities
(23,898)
—
Net cash provided by (used in) financing activities
186,899
(29,884)
Net (decrease) increase in cash and restricted cash
46,642
(23,406)
Cash and restricted cash, beginning of period
125,606
186,860
Consolidation of cash from controlled investments
24,896
—
Cash and restricted cash, end of period
$
197,144
$
163,454
The table appearing under the heading “Contractual Obligations” on page 75 is revised as follows:
(in thousands)
Payments due by period
Contractual Obligations
Total
2023
2024
2025
2026
2027
Thereafter
Bank notes payable
$
113,753
$
113,753
$
—
$
—
$
—
$
—
$
—
Webster NMS Note
39,871
—
—
—
—
39,871
—
FHLB Advances1
24,761
—
6,000
6,000
—
12,761
—
SPV I Capital One Facility
19,347
—
—
19,347
—
—
—
SPV III One Florida Bank Facility
13,698
—
13,698
—
—
—
—
SPV II Deutsche Bank Facility
7,123
—
7,123
—
—
—
—
Webster CDS Line of Credit
2,180
2,180
—
—
—
—
—
Notes payable - Securitization Trusts1
252,128
—
—
—
—
—
252,128
2024 Notes1
38,250
—
38,250
—
—
—
—
2025 5.00% Notes1
30,000
—
—
30,000
—
—
—
2025 8.125% Notes1
50,000
—
—
50,000
—
—
—
2026 Notes1
115,000
—
—
—
115,000
—
—
Employment agreements
2,494
2,131
363
—
—
—
—
Operating leases
10,082
2,163
2,820
2,585
2,035
479
—
Totals
$
718,687
$
120,227
$
68,254
$
107,932
$
117,035
$
53,111
$
252,128
(1) These amounts are presented at the gross principal amounts outstanding and exclude unamortized debt issuance costs and purchase accounting adjustments.
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023:
The table appearing under the heading “Borrowings” on page 65 is revised as follows:
June 30, 2023
December 31, 2022
Borrowings Outstanding
Borrowings Outstanding
Change
Capital One Lines of Credit:
Capital One line of credit - guaranteed
$
4,950
$
10,500
$
(5,550)
Capital One line of credit - unguaranteed
4,607
45,385
(40,778)
9,557
55,885
(46,328)
Other Bank Borrowings:
Webster NMS Note
38,562
—
38,562
SPV II Deutsche Bank Facility
7,965
—
7,965
SPV I Capital One Facility
26,660
—
26,660
SPV III One Florida Bank Facility
26,684
—
26,684
FHLB Advances
24,085
—
24,085
Total Lines of Credit
123,956
—
123,956
Notes due 2024, 2025, and 2026:
2024 Notes
38,013
37,903
110
2025 5.00% Notes
29,425
29,306
119
2025 8.125% Notes
49,171
—
49,171
2026 Notes
113,205
112,846
359
Total 2024, 2025, and 2026 Notes
229,814
180,055
49,759
Notes payable - Securitization Trusts
334,060
279,136
54,924
Notes payable - related parties
—
24,250
(24,250)
Total
$
697,387
$
539,326
$
158,061
The table appearing under the heading “Net Realized Gains and Losses” on page 80 is revised as follows:
(in thousands)
Three months ended June 30, 2023
Three months ended June 30, 2022
Change
Net gains on sales of loans
$
13,208
$
19,891
$
(6,683)
Net gain (loss) on loans accounted for under the fair value option
4,363
(5,789)
10,152
Loan servicing asset revaluation
(534)
(781)
247
Net gain on derivative transactions
674
—
674
Total net gains
$
17,711
$
13,321
$
4,390
The table appearing under the heading “Cash Flows and Liquidity” on page 88 is revised as follows:
(in thousands)
Six Months Ended June 30, 2023
Six Months Ended June 30, 2022
Net cash provided by (used in) operating activities
$
(204,852)
$
(65,181)
Net cash used in investing activities
(72,546)
(11)
Net cash provided by (used in) financing activities
385,820
4,358
Net (decrease) increase in cash and restricted cash
108,422
(60,834)
Cash and restricted cash, beginning of period
125,606
186,860
Consolidation of cash from controlled investments
22,306
—
Cash and restricted cash, end of period
$
256,334
$
126,026
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NEWTEKONE, INC.
Date: August 24, 2023
By:
/S/ BARRY SLOANE
Barry Sloane
Chief Executive Officer, President and Chairman of the Board