NewtekOne Resets 2026 EPS Guidance to $1.70-$1.80 as It Stops Selling Its SBA Loans

by Carter Whitfield · August 31, 2026

Equities Reporter, The SmallCap Signal

NewtekOne told investors on Aug. 28 that it now expects earnings per share of $1.70 to $1.80 for 2026 and $2.00 to $2.20 for 2027, a reset the company framed as a deliberate shift toward recurring net interest income rather than a deterioration in the underlying business.

The comparison point is the company's own January guidance. In a Jan. 8 release accompanying its investor day presentation, NewtekOne issued 2026 EPS guidance of $2.15 to $2.55. Friday's range is therefore materially lower at both ends. Neither release labelled the figures as GAAP or non-GAAP, and readers should treat them as unlabelled forward-looking projections rather than a defined accounting measure.

Gain-on-sale, or interest income

The mechanism is straightforward and is the same trade every SBA lender eventually faces. NewtekOne originates Small Business Administration 7(a) loans, the guaranteed portion of which can be sold into a liquid secondary market soon after origination, producing an immediate gain booked as revenue. Sloane said in the Aug. 28 release that the company had typically sold those guaranteed portions within 90 days of origination and recognised gain-on-sale income. Retain the loan instead and the income arrives as net interest income spread across the life of the credit.

According to the Aug. 28 release, NewtekOne is choosing to retain more of those guaranteed portions. The company said net interest income accounted for 21% of total revenue in 2025 and 22% in the first half of 2026, and that it expects the share to reach 30% or more in the second half of 2026 and in 2027. That is the arithmetic behind the lower near-term EPS range: income that would have been recognised at once is now recognised over time.

Chief executive Barry Sloane attributed the ability to make that switch to the deposit base at Newtek Bank, the national bank the company acquired in 2023 as part of its conversion from a business development company to a financial holding company. He said in the release that deposit gathering has run ahead of the company's original expectations, crediting digital account opening, competitive rates with no fees, and round-the-clock video customer service.

What the second quarter showed

The direction of travel was already visible in results announced Aug. 6. NewtekOne reported second-quarter 2026 basic EPS of $0.48 and diluted EPS of $0.47, against $0.53 and $0.52 respectively a year earlier. Net income rose to $14.6 million from $13.7 million over the same comparison, so absolute profit grew while per-share earnings fell — arithmetic that points to a larger denominator rather than a weaker quarter. These are figures as of June 30, 2026 and predate Friday's guidance change.

Balance sheet growth continued. Total assets reached $3.18 billion and total deposits $2.15 billion. Book value per share was $12.64, up 13.8% year over year, and tangible book value per share was $12.13, up 15.0%. Profitability ratios moved the other way: return on average assets fell to 1.97% from 2.58% and return on average equity to 13.3% from 17.4%, while the efficiency ratio improved to 58.4% from 60.3%.

Origination volumes in the quarter were $208 million of SBA 7(a) loans, $104 million of commercial and industrial loans, and $49 million of SBA 504 loans. Management said at the time that existing guidance was being re-evaluated because of the shifting revenue mix — a signal that Friday's release completed rather than initiated.

The risks the reset introduces

Retaining loans is not a free trade. Credit exposure that would previously have been transferred to secondary-market buyers now stays with the bank for the life of the loan, and holding assets rather than selling them consumes capital that would otherwise have been recycled into new originations. The offset is a more predictable revenue line and a funding cost the company controls through its own deposit franchise rather than through the appetite of loan buyers.

The company also said it will explore licensing its NewTracker and Newtek Advantage platforms, which it describes as covered by patented and patent-pending technology, and will evaluate broader strategic alternatives aimed at shareholder value. That last phrase is deliberately open-ended and should not be read as a specific transaction.

NewtekOne paid a quarterly cash dividend of $0.19 a share on its common stock on July 1, alongside $21.25 a share on its Series B preferred, according to the second-quarter release. Nothing in Friday's guidance announcement addressed the dividend.

Context

The reset landed in a week that was already difficult for smaller companies. The Russell 2000 closed Friday at 2,972.37, down 1.39%, a heavier fall than the S&P 500's 0.25% decline to 7,711.76. Rate expectations are part of that: Benzinga's Monday premarket wrap, timestamped 5:37 a.m. ET, cited CME Group's FedWatch tool showing a 61.9% probability of a Federal Reserve rate increase in September. Higher policy rates cut both ways for a lender like NewtekOne, lifting asset yields but also deposit costs and small-business borrowing stress.

The immediate tests are whether the net interest income share actually reaches the 30% threshold management has set for the back half of this year, and whether credit performance on retained SBA balances holds up now that the loans stay in-house.