0001587987-23-000111 | 10-Q | XBRL Viewer

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SUBSEQUENT EVENTS	3 Months Ended
SUBSEQUENT EVENTS	Mar. 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 20—SUBSEQUENT EVENTS: NSBF Wind-down Agreement On April 13, 2023, NSBF, the Company and the SBA entered into an agreement in connection with NSBF’s and the Company’s subsidiary Newtek Bank’s participation in the SBA 7(a) loan program. NSBF has been licensed by the SBA for over twenty years as a small business lending company (SBLC) that has originated and serviced loans through the SBA 7(a) Program (as authorized by section 7(a) of the Small Business Act, 15 U.S.C. 636(a)). The Company’s business plan prepared in connection with the Acquisition of NBNYC, provided for all SBA 7(a) loan originations to be transitioned to Newtek Bank and for NSBF to cease originations of SBA 7(a) loans. Pursuant to the Agreement, NSBF has begun to wind-down its operations and NSBF’s SBA 7(a) pipeline of new loans has been transitioned to Newtek Bank. During this wind-down process, NSBF will continue to own the SBA 7(a) loans and PPP Loans currently in its SBA loan portfolio to maturity, liquidation, charge-off, or (subject to SBA’s prior written approval), sale or transfer. NSBF will continue to service and liquidate its SBA loan portfolio, including processing forgiveness and loan reviews for PPP Loans, pursuant to an SBA approved lender service provider agreement with Newtek Bank’s subsidiary SBL. In addition, during the wind-down process, NSBF will be subject to minimum capital requirements established by the SBA, be required to continue to maintain certain amounts of restricted cash available to meet any obligations to the SBA, have restrictions on its ability to make dividends and distributions to the Company, and remain liable to SBA for post-purchase denials and repairs on the guaranteed portions of SBA 7(a) loans originated and sold by NSBF, from the proceeds generated by NSBF’s SBA loan portfolio. The Company has guaranteed NSBF’s obligations to the SBA and has agreed to create and fund a $10 million account to secure these obligations. The Company’s, NSBF’s and SBL’s dedicated lending team and employees are now supporting Newtek Bank, as well as NSBF’s management team and employees who are now part of the Newtek Bank and its SBL subsidiary. In April 2023, Newtek Bank began funding and servicing the SBA 7(a) loans in NSBF's pipeline, following the NewtekOne SBA 7(a) loan business model. On April 27, 2023, Newtek Bank received preferred lenders program (PLP) status from the SBA, which provides Newtek Bank with delegated authority to process, close, service, and liquidate SBA-guaranteed loans.

LOANS HELD FOR INVESTMENT - Narrative (Details) $ in Millions	Mar. 31, 2023 USD ($)
Receivables [Abstract]
Contractual principal balance	$ 4.6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 11,718	$ 9,652
Other comprehensive loss before tax:
Net unrealized loss on debt securities available-for-sale during the period	(113)	0
Other comprehensive loss before tax	(113)	0
Income tax benefit	31	0
Other comprehensive loss, net of tax	(82)	0
Total comprehensive income	$ 11,636	$ 9,652

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

STOCK BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of restricted stock issuances

The following table summarizes the restricted stock issuances under the Equity Incentive Plan, net of shares forfeited, if any, and the remaining shares of restricted stock available for issuance as of March 31, 2023.


Restricted Stock authorized under the plan1						1,500,000
Less net restricted stock (granted)/forfeited during:
Year ended December 31, 2016						(120,933)
Year ended December 31, 2017						(5,007)
Year ended December 31, 2018						(93,568)
Year ended December 31, 2019						(6,285)
Year ended December 31, 2020						2,639
Year ended December 31, 2021						(214,654)
Year ended December 31, 2022						(250,622)
Three months ended March 31, 2023						(7,383)
Restricted stock available for issuance as of March 31, 2023						804,187

(1) A maximum of 20% of total shares of common stock issued and outstanding, calculated on a fully diluted basis, not to exceed 3.0 million shares, weree available for awards of restricted stock and stock options under the Equity Incentive Plan and no more than 50% of the shares of stock reserved for the grant of awards under the Equity Incentive Plan were permitted to be restricted stock awards at any time during the term of the Equity Incentive Plan. No stock options were granted under the Equity Incentive Plan. The Equity Incentive Plan was terminated by the Board of Directors in April 2023 and a new 2023 Equity Incentive Plan was approved by the Board of Directors and will be considered by the Company’s shareholders at the Company’s 2023 Annual Meeting of Shareholders.

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 13—COMMITMENTS AND CONTINGENCIES:

Operating and Employment Commitments

The Company leases office space and other office equipment in several states under operating lease agreements which expire at various dates through 2027. Those office space leases which are for more than one year generally contain scheduled rent increases or escalation clauses.

The following summarizes the Company’s obligations and commitments, as of March 31, 2023 for future minimum cash payments required under operating lease and employment agreements:


Year	Operating Leases		Employment Agreements1		Total
2023	$	2,163	$	2,131	$	4,294
2024	2,820		363		3,183
2025	2,585		—		2,585
2026	2,035		—		2,035
2027	479		—		479
Thereafter	—		—		—
Total	$	10,082	$	2,494	$	12,576

(1) Employment agreements with certain of the Company’s named executive officers

Legal Matters

In the ordinary course of business, the Company and its subsidiaries may from time to time be party to lawsuits and claims. The Company evaluates such matters on a case by case basis and its policy is to contest vigorously any claims it believes are without compelling merit.

For example, the Company closed on its $5.4 million investment in ADR Partners, LLC dba banc-serv Partners, LLC, a former wholly-owned controlled portfolio company (“BSP”) in June 2016. Subsequently, as previously disclosed, the Company invested $1.7 million in additional capital and recorded $7.1 million in unrealized losses on the BSP investment to write down the fair value of the investment to $0.0 million by June 30, 2019. The BSP investment resulted in protracted litigation with Kerri Agee, the former owner and President of BSP, who filed for bankruptcy and was indicted in 2019 for, and convicted in 2021 of, defrauding the SBA. The Agee litigation concluded with Holdco 5 obtaining a nondischargeable judgment against Agee in the amount of $6.2 million in January 2022. Holdco 5 is pursuing its rights relating to this matter, though there can be no assurances of the possibility of recovering some or substantially all of the assets referred to in the judgement. Holdco 5 has not recorded any gain contingency relating to this litigation.

As a result of a litigation brought by the Federal Trade Commission (the “FTC”) in October 2012, NMS voluntarily entered into, and is presently operating under, a permanent injunction with respect to certain of its business practices.

Guarantees

At March 31, 2023, the Company was a guarantor on the Receivable and Inventory Facility at NBC. At March 31, 2023, total principal owed by NBC was $2.2 million and maximum borrowings under the Receivable and Inventory Facility were $5.0 million. In addition, the Company deposited $0.75 million to collateralize the guarantee that was returned to the Company upon repayment of the facility. The Company repaid and terminated the facility in April 2023 ahead of the scheduled facility maturity date in May 2023 and the $0.75 million of cash collateral was returned to the Company.

The Company is a guarantor on the SPV I Capital One Facility. Maximum borrowings under the SPV I Facility are $60.0 million with an accordion feature to increase maximum borrowings to $150.0 million. The lender’s commitments terminate in November 2024, with all amounts due under the SPV I Facility maturing in November 2025. At March 31, 2023, total principal owed by SPV I was $19.3 million. At March 31, 2023, the Company determined that it is not probable that payments would be required to be made under the guarantee.

The Company is a guarantor on the SPV II Deutsche Bank Facility. Maximum borrowings under the SPV II Deutsche Bank Facility are $50.0 million. The Deutsche Bank Facility matures in November 2024. At March 31, 2023, total principal owed by SPV II was $7.1 million. At March 31, 2023, the Company determined that it is not probable that payments would be required to be made under the guarantee.

The Company is a guarantor on the SPV III One Florida Bank Facility. Maximum borrowings under the SPV III One Florida Bank Facility are $20.0 million. The One Florida Bank Facility matures in September 2024. At March 31, 2023, total principal owed by SPV III was $13.7 million. At March 31, 2023, the Company determined that it is not probable that payments would be required to be made under the guarantee. On April 27, 2023, the SPV III One Florida Bank Facility was amended to increase maximum borrowings under the line to $30.0 million.

The Company is a guarantor on the Webster Facility, a term loan facility between NMS with Webster Bank with an aggregate principal amount up to $54.9 million. The Webster Facility matures in November 2027. At March 31, 2023, total principal outstanding was $39.9 million. At March 31, 2023, the Company determined that it is not probable that payments would be required to be made under the guarantee.

Unfunded Commitments

At March 31, 2023, the Company had $110.4 million of unfunded commitments consisting of $14.3 million in connection with its SBA 7(a) loans, $81.7 million in connection with its SBA 504 loans, and $14.4 million relating to commercial and industrial loans. The Company funded these commitments from the same sources it used to fund its other investment commitments.

FAIR VALUE MEASUREMENTS - Fair Value Levels (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	$ 32,905
Investments	26,382	$ 283,599
Other real estate owned	3,516	3,529
Servicing asset	33,351	30,268
Total assets	754,581	841,835
Derivative instruments	624
Carrying Amount
Cash and due from banks	27,349	53,692	$ 4,911	$ 2,397
Restricted cash	72,599	71,914	158,543	184,463
Interest bearing deposits in banks	97,196	0	$ 0	$ 0
Total loans held for investment, at amortized cost, net	164,639	0
Deposits:	247,574	0
Borrowings	697,395	539,326
Other Fair Value Financial Instruments
Total loans held for investment, at amortized cost, net	166,433
Deposits:	247,574
Borrowings	697,395	539,326
U.S. Treasury notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	29,102
Government agency debentures
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	3,803
Loans Held For Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	125,639	19,171
Loans Held for Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	532,788	505,268
Cash and due from banks
Other Fair Value Financial Instruments
Cash and cash equivalents	27,349	53,692
Restricted cash
Other Fair Value Financial Instruments
Cash and cash equivalents	72,599	71,914
Interest bearing deposits in banks
Other Fair Value Financial Instruments
Cash and cash equivalents	97,196
Controlled Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	258,417
Joint Ventures
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	25,022	23,022
Non-Control Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	1,360	1,360
Level 1, 2 and 3 \| Controlled Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		259,217
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned	0	0
Servicing asset	0	0
Total assets	29,102	0
Derivative instruments	0
Other Fair Value Financial Instruments
Total loans held for investment, at amortized cost, net	0
Deposits:	0
Borrowings	0	0
Level 1 \| U.S. Treasury notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	29,102
Level 1 \| Government agency debentures
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	0
Level 1 \| Loans Held For Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Level 1 \| Loans Held for Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Level 1 \| Cash and due from banks
Other Fair Value Financial Instruments
Cash and cash equivalents	27,349	53,692
Level 1 \| Restricted cash
Other Fair Value Financial Instruments
Cash and cash equivalents	72,599	71,914
Level 1 \| Interest bearing deposits in banks
Other Fair Value Financial Instruments
Cash and cash equivalents	97,196
Level 1 \| Controlled Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		0
Level 1 \| Non-Control Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned	0	0
Servicing asset	0	0
Total assets	129,442	19,171
Derivative instruments	624
Other Fair Value Financial Instruments
Total loans held for investment, at amortized cost, net	0
Deposits:	247,574
Borrowings	0	0
Level 2 \| U.S. Treasury notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	0
Level 2 \| Government agency debentures
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	3,803
Level 2 \| Loans Held For Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	125,639	19,171
Level 2 \| Loans Held for Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Level 2 \| Cash and due from banks
Other Fair Value Financial Instruments
Cash and cash equivalents	0	0
Level 2 \| Restricted cash
Other Fair Value Financial Instruments
Cash and cash equivalents	0	0
Level 2 \| Interest bearing deposits in banks
Other Fair Value Financial Instruments
Cash and cash equivalents	0
Level 2 \| Controlled Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		0
Level 2 \| Non-Control Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned	3,516	3,529
Servicing asset	33,351	30,268
Total assets	571,015	799,642
Derivative instruments	0
Other Fair Value Financial Instruments
Total loans held for investment, at amortized cost, net	166,433
Deposits:	0
Borrowings	697,395	539,326
Level 3 \| U.S. Treasury notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	0
Level 3 \| Government agency debentures
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	0
Level 3 \| Loans Held For Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Level 3 \| Loans Held for Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	532,788	505,268
Level 3 \| Cash and due from banks
Other Fair Value Financial Instruments
Cash and cash equivalents	0	0
Level 3 \| Restricted cash
Other Fair Value Financial Instruments
Cash and cash equivalents	0	0
Level 3 \| Interest bearing deposits in banks
Other Fair Value Financial Instruments
Cash and cash equivalents	0
Level 3 \| Controlled Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		259,217
Level 3 \| Non-Control Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	1,360	1,360
NAV \| Controlled Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		$ 23,022
NAV \| Joint Ventures
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 25,022

STOCK BASED COMPENSATION

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

STOCK BASED COMPENSATION

NOTE 14—STOCK BASED COMPENSATION:

Stock Plan

The Company accounts for its stock-based compensation plan using the fair value method, as prescribed by ASC 718, Compensation—Stock Compensation. Accordingly, for restricted stock awards, the Company measured the grant date fair value based upon the market price of its common stock on the date of the grant and amortizes the fair value of the awards as stock-based compensation expense over the requisite service period, which is generally the vesting term.

The Board approves the issuance of shares of restricted stock to employees and directors pursuant to the Equity Incentive Plan. These shares generally vest over a one to three year period from the grant date. The fair value is expensed over the service period, starting on the grant date. The following table summarizes the restricted stock issuances under the Equity Incentive Plan, net of shares forfeited, if any, and the remaining shares of restricted stock available for issuance as of March 31, 2023.


Restricted Stock authorized under the plan1						1,500,000
Less net restricted stock (granted)/forfeited during:
Year ended December 31, 2016						(120,933)
Year ended December 31, 2017						(5,007)
Year ended December 31, 2018						(93,568)
Year ended December 31, 2019						(6,285)
Year ended December 31, 2020						2,639
Year ended December 31, 2021						(214,654)
Year ended December 31, 2022						(250,622)
Three months ended March 31, 2023						(7,383)
Restricted stock available for issuance as of March 31, 2023						804,187

As of March 31, 2023, there was $5.1 million of total unrecognized compensation expense related to unvested restricted shares. This compensation expense is expected to be recognized over a remaining weighted-average period of approximately 2.3 years as of March 31, 2023.

For the three months ended March 31, 2023 and 2022 the Company recognized total stock-based compensation expense of $0.7 million and $0.8 million, respectively.

SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Reconciliation of cash

The following table provides a reconciliation of cash and restricted cash as of March 31, 2023 and 2022 and December 31, 2022 and 2021:


	March 31, 2023		March 31, 2022		December 31, 2022		December 31, 2021
Cash and due from banks	$	27,349	4,911		53,692		$	2,397
Restricted cash	72,599		158,543		71,914		184,463
Interest bearing deposits in banks	97,196		—		—		—
Cash and restricted cash	$	197,144	$	163,454	$	125,606	$	186,860

Reconciliation of restricted cash

The following table provides a reconciliation of cash and restricted cash as of March 31, 2023 and 2022 and December 31, 2022 and 2021:


	March 31, 2023		March 31, 2022		December 31, 2022		December 31, 2021
Cash and due from banks	$	27,349	4,911		53,692		$	2,397
Restricted cash	72,599		158,543		71,914		184,463
Interest bearing deposits in banks	97,196		—		—		—
Cash and restricted cash	$	197,144	$	163,454	$	125,606	$	186,860

LOANS HELD FOR INVESTMENT - Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	$ 166,828	$ 0
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	101,172	0
Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	65,262	0
SBA 7(a)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	$ 394	$ 0

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 7A
-URI https://asc.fasb.org/extlink&oid=123577603&loc=SL6953401-111524

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 55
-Paragraph 79
-URI https://asc.fasb.org/extlink&oid=124267575&loc=SL82922352-210448

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(3)(b))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919253-210447

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 45
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=124255206&loc=SL82895884-210446

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 50
-Paragraph 5
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919230-210447

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 55
-Paragraph 80
-URI https://asc.fasb.org/extlink&oid=124267575&loc=SL82922355-210448

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (1)

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (2)

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1404
-Paragraph (a)

+ Details

GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 0.4

Deposits - Maturities (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Banking and Thrift, Interest [Abstract]
Remainder of 2023	$ 104,922
2024	19,431
2025	18,034
2026	22,737
2027	16,206
Thereafter	112
Time Deposits, Total	$ 181,442

SERVICING ASSETS - Fair Value and Valuation Assumptions (Details) $ in Thousands	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Servicing Assets at Fair Value [Line Items]
Servicing assets at fair value	$ 33,351	$ 30,268
SBA 7(a)
Servicing Assets at Fair Value [Line Items]
Servicing assets at fair value	$ 1,600,000
Weighted Average \| Discount factor
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1450	0.1650
Weighted Average \| Cumulative prepayment rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2500	0.2500
Weighted Average \| Average cumulative default rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input		0.2500
Minimum \| Discount factor
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1450	0.1650
Minimum \| Cumulative prepayment rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2500	0.2500
Minimum \| Average cumulative default rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2000	0.2500
Maximum \| Discount factor
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1450	0.1650
Maximum \| Cumulative prepayment rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2500	0.2500
Maximum \| Average cumulative default rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2000	0.2500

LOANS HELD FOR INVESTMENT (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Investment holdings, schedule of investments

Investments consisted of the following at:


	March 31, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Non-controlled equity investments	1,360		1,360		1,360		1,360
Joint Ventures	23,314		25,022		23,314		23,022
Controlled investments:
Equity	—		—		99,195		241,113
Debt	—		—		32,300		18,104
Total investments	$	24,674	$	26,382	$	156,169	$	283,599


	Loans Held for Investment, at Fair Value
	March 31, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Food Services and Drinking Places	$	51,194	$	49,014	$	48,551	$	48,796
Specialty Trade Contractors	46,513		46,513		42,330		38,314
Professional, Scientific, and Technical Services	42,815		42,374		41,066		39,287
Ambulatory Health Care Services	31,640		30,070		28,900		26,879
Merchant Wholesalers, Durable Goods	23,905		23,905		22,219		22,059
Amusement, Gambling, and Recreation Industries	24,828		24,339		24,743		25,917
Administrative and Support Services	24,186		24,186		23,400		21,249
Accommodation	10,673		10,673		11,476		10,428
Repair and Maintenance	18,701		18,618		17,108		17,280
Merchant Wholesalers, Nondurable Goods	18,622		18,344		19,501		18,637
Truck Transportation	22,100		22,100		23,846		18,245
Personal and Laundry Services	14,167		13,692		13,763		14,183
Fabricated Metal Product Manufacturing	13,011		13,011		14,190		14,739
Construction of Buildings	12,519		11,907		11,978		10,973
Real Estate	4,045		4,045		3,837		3,380
Motor Vehicle and Parts Dealers	11,377		11,377		10,186		9,651
Social Assistance	10,155		10,057		9,282		9,993
Building Material and Garden Equipment and Supplies Dealers	9,509		8,705		12,760		11,427
Food and Beverage Stores	8,691		8,424		5,789		5,935
Food Manufacturing	10,972		10,784		10,830		8,951
Rental and Leasing Services	8,643		7,693		8,158		8,448
Transportation Equipment Manufacturing	8,688		8,688		8,272		8,445
Support Activities for Mining	9,940		9,940		10,426		8,615
Nursing and Residential Care Facilities	6,322		6,322		8,187		8,697
Other	111,020		111,020		101,995		94,740
Total	$	554,236	$	532,788	$	532,793	$	505,268


	Loans Held for Investment, at Amortized Cost
	March 31, 2023		December 31, 2022
Commercial Real Estate	$	101,172	$	—
Commercial & Industrial	65,262		—
SBA 7(a)	394		—
Total	$	166,828	$	—

Schedule of loans and leases

Past Due and Non-Accrual Loans

The following tables summarize the aging of accrual and non-accrual loans by class:


	As of March 31, 2023
		30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		90 or more Days Past Due and Accruing		Non- accrual		Total past Due and Non-accrual		Current		Total Carried at Amortized Cost		Loans Accounted for Under the Fair Value Option		Total Loans
Commercial Real Estate		$	14,652	$	—	$	—	$	—	$	14,652	$	85,995	$	100,647	$	—	$	100,647
Commercial & Industrial		11,487		1,820		4,454		2,635		20,395		45,912		66,307		—		66,307
SBA 7(a)		42,197		3,102		—		39,745		85,044		447,744		—		532,788		532,788
Total Loans		68,336		4,922		4,454		42,380		120,091		579,651		166,954		532,788		699,742
Net deferred fees		—		—		—		—		—		—		(127)		—		(127)
Allowance for credit losses		$	—	$	—	$	—	$	—	$	—	$	—	$	(2,189)	$	—	$	(2,189)
Total		$	68,336	$	4,922	$	4,454	$	42,380	$	120,092	$	579,651	$	164,638	$	532,788	$	697,426


	As of December 31, 2022
		30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		90 or more Days Past Due and Accruing		Non- accrual		Total past Due and Non-accrual		Current		Total Carried at Amortized Cost		Loans Accounted for Under the Fair Value Option		Total Loans


SBA 7(a)		$	18,681	$	12,754	$	—	$	34,432	$	65,867	$	439,401	$	—	$	505,268	$	505,268

Credit quality indicators

The following tables present asset quality indicators by portfolio class and origination year.


		Term Loans Held for Investment by Origination Year
		2023		2022		2021		2020		2019		Prior		Total
Commercial Real Estate	Portfolio segments
Risk Grades 1-4		$	4,894	$	25,378	$	14,207	$	—	$	12,256	$	41,499	$	98,235
Risk Grades 5-6		—		—		572		834		720		811		2,937
Risk Grade 7		—		—		—		—		—		—		—
Total		$	4,894	$	25,378	$	14,780	$	834	$	12,977	$	42,310	$	101,172

Commercial & Industrial
Risk Grades 1-4		1,985		9,612		2,510		406		—		47,397		61,909
Risk Grades 5-6		—		—		—		—		719		2,635		3,353
Risk Grade 7		—		—		—		—		—		—		—
Total		$	1,985	$	9,612	$	2,510	$	406	$	719	$	50,031	$	65,262

SBA 7(a)
Risk Grades 1-4		36,260		171,397		64,750		33,614		66,886		118,762		491,669
Risk Grades 5-6		—		2,291		3,918		123		8,815		26,262		41,409
Risk Grade 7		—		—		—		—		—		104		104
Total		36,260		173,688		68,668		33,737		75,700		145,128		533,182
Total		$	43,140	$	208,677	$	85,958	$	34,977	$	89,396	$	237,469	$	699,616

		Term Loans Held for Investment by Origination Year
December 31, 2022		2022		2021		2020		2019		2018		Prior		Total
SBA 7(a)	Portfolio segments
Risk Grades 1-4		$	171,948	$	66,113	$	34,116	$	69,563	$	55,376	$	70,669	$	467,785
Risk Grades 5-6		698		3,633		595		5,400		6,772		20,273		37,370
Risk Grade 7		—		—		—		—		—		112		112
Total		$	172,646	$	69,746	$	34,711	$	74,963	$	62,148	$	91,054	$	505,268

Allowance for credit losses

The following table details activity in the ACL for the three month period ended March 31, 2023:


	March 31, 2023
	Commercial Real Estate		Commercial & Industrial		SBA 7(a)		Total
Beginning Balance	$	—	$	—	$	—	$	—
Adjustment to Beginning Balance due to PCD marks1	775		96				871
Charge offs	—		—		—		—
Recoveries	—		—		—		—
Provision	1,185		127		6		1,318
Ending Balance	$	1,960	$	223	$	6	$	2,189

(1)Given the January 6, 2023 transition to a financial holding company, the Company established an ACL with the beginning balance representing the purchased credit deteriorated loans acquired through the NBNYC Acquisition. There were no charge-offs or recoveries on the loans held for investment, at amortized cost during the three months ended March 31, 2023.

Debt Securities Available-for-Sale (Tables)

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of available-for-sale securities

The following tables summarize the amortized cost and fair value of available-for-sale securities by major type:


At March 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury notes	$	29,017	$	85	$	1	$	29,102
Government agency debentures	4,000		—		197		3,803
Total available for sale securities	$	33,017	$	85	$	198	$	32,905

Debt securities, unrealized losses

The following tables summarize the gross unrealized losses and fair value of available-for-sale securities by length of time each major security type has been in a continuous unrealized loss position:



	At March 31, 2023
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Holdings		Fair Value		Unrealized Losses
U.S. Treasury notes	$	245	$	1	$	—	$	—	$	1	$	245	$	1
Government agency debentures	3,803		197		—		—		3		3,803		197
Total	$	4,048	$	198	$	—	$	—	$	4	$	4,048	$	198

Available-for-sale maturity and other information

The following table summarizes the amortized cost and fair value of available-for-sale securities by contractual maturity:


	At March 31, 2023
	Amortized Cost		Fair Value
Maturing within 1 year	$	1,246	$	1,245
After 1 year through 5 years	31,771		31,660


Total available for sale securities	$	33,017	$	32,905

Other information

The following table summarizes available-for-sale securities pledged for deposits, borrowings, and other purposes:


	At March 31, 2023
Pledged for deposits	$	—
Pledged for borrowings and other	32,905
Total available for sale securities pledge	32,905

DIVIDENDS AND DISTRIBUTIONS

3 Months Ended

Mar. 31, 2023

Investment Company [Abstract]

DIVIDENDS AND DISTRIBUTIONS

NOTE 17—DIVIDENDS AND DISTRIBUTIONS:

The Company’s dividends and distributions are recorded on the declaration date. The following table summarizes the Company’s dividend declarations and distributions during the three months ended March 31, 2023 and 2022.


Date Declared	Record Date	Payment Date	Amount Per Share		Cash Distribution		DRIP Shares Issued	DRIP Shares Value
Three months ended March 31, 2023
February 27, 2023	April 4, 2023	April 14, 2023	$	0.18	$	4,291	6	$	72




Three months ended March 31, 2022
December 20, 2021	March 21, 2022	March 31, 2022	$	0.65	$	15,361	9	$	225

During the three months ended March 31, 2023 and 2022, an additional 4,700 and 4,100 shares valued at $0.1 million and $0.1 million, respectively, were issued related to dividends on unvested restricted stock awards.

EARNINGS PER SHARE - Schedule of Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 11,718	$ 9,652
Less dividends to preferred shareholders	249	0
Net income available to common shareholders	11,469	9,652
Dividends to common shareholders	4,363	$ 15,585
Undistributed Net Income	7,106
Distributed Net Income - Common	4,363
Distributed Net Income - Series A Convertible Preferred	249
Allocation of Undistributed Net Income - Common	$ 6,937
Allocation of Undistributed Net Income - Common, percent	97.60%
Allocation of Undistributed Net Income - Series A Convertible Preferred	$ 169
Allocation of Undistributed Net Income - Series A Convertible Preferred, percent	2.40%
Earnings per share, basic (in dollars per share)	$ 0.46	$ 0.40
Weighted average number of shares outstanding - basic (in shares)	24,609,000	24,156,000
Total adjustments to weighted average shares outstanding (in shares)	628,000	0
Shares used in computing earnings per share, diluted (in shares)	25,237,000
Earnings per share, diluted (in dollars per share)	$ 0.46	$ 0.40
Preferred stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Total adjustments to weighted average shares outstanding (in shares)	598,000	0
Warrant
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Total adjustments to weighted average shares outstanding (in shares)	30,000	0

BORROWINGS - Narrative (Details) $ in Thousands	3 Months Ended
BORROWINGS - Narrative (Details) $ in Thousands	Mar. 31, 2023 USD ($) $ / shares	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($) $ / shares
Debt Instrument [Line Items]
Valuation adjustment, FHLB	$ 200
Current principal amount	24,760
Borrowings	697,395		$ 539,326
Borrowings	697,395		539,326
Secured Debt \| FHLB Advances
Debt Instrument [Line Items]
Borrowings	24,531
Medium-term Notes
Debt Instrument [Line Items]
Interest expense	11,100	$ 26,300
Medium-term Notes \| 2026 Notes
Debt Instrument [Line Items]
Borrowings	113,025		112,846
Borrowings	$ 111,400		$ 118,500
Medium-term Notes \| 2026 Notes \| Measurement Input, Share Price
Debt Instrument [Line Items]
Closing price (in dollars per share) \| $ / shares	24.22		25.77
Medium-term Notes \| 2024 Notes
Debt Instrument [Line Items]
Borrowings	$ 37,958		$ 37,903
Borrowings	$ 37,600		$ 38,900
Medium-term Notes \| 2024 Notes \| Measurement Input, Share Price
Debt Instrument [Line Items]
Closing price (in dollars per share) \| $ / shares	24.58		25.40

LEASES (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Lease cost

The following table summarizes supplemental cash flow and other information related to our operating leases:


	Three Months Ended March 31,
		2023			2022
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)		$	709		$	461
Weighted-average remaining lease term - operating leases		3.63 years			4.91 years
Weighted-average discount rate - operating leases		5.64		%	4.76		%
Total lease costs (included in other general and administrative costs on the consolidated statements of operations)		$	949		$	239

Lessee, operating lease, liability, maturity

The following table represents the maturity of the Company’s operating lease liabilities as of March 31, 2023:


Maturity of Lease Liabilities
2023	2,163
2024	2,820
2025	2,585
2026	2,035
2027	479
Thereafter	—
Total future minimum lease payments	$	10,082
Less: Imputed interest	$	(938)
Present value of future minimum lease payments	$	9,144

SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Mar. 31, 2023
Accounting Policies [Abstract]
Use of Estimates in the Preparation of Financial Statements	Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expense during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are complete. Actual results could differ from those estimates.
Fair Value	Fair Value The Company applies fair value accounting to certain of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions reflect those that management believe market participants would use in pricing the financial instrument at the measurement date. The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value was greatest for financial instruments classified as Level 3. Any changes to the valuation methodology are reviewed by management and the Board to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies.
Debt securities, available for sale	Debt securities, available for sale The Company’s securities portfolio primarily consists of available for sale debt securities. Securities that are classified as “available for sale” are carried at their estimated fair value, with any unrealized gains or losses, net of taxes, reported as accumulated other comprehensive income or loss in stockholders’ equity. The fair values of our securities are affected by changes in market interest rates and credit spreads. In general, as interest rates rise and/or credit spreads widen, the fair value of securities will decline. As interest rates fall and/or credit spreads tighten, the fair value of securities will rise. The Company evaluates available-for-sale debt securities in unrealized loss positions at least quarterly to determine if an allowance for credit losses is required. Based on an evaluation of available information about past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability, the Company has concluded that it expects to receive all contractual cash flows from each security held in its available-for-sale securities portfolio.
Consolidation	Consolidation Assets related to transactions that do not meet ASC Topic 860 — Transfers and Servicing (“ASC Topic 860”) requirements for accounting sale treatment are reflected in the Company’s consolidated statements of assets and liabilities as investments. Those assets are owned by the securitization trusts and are included in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of the Company.
Business Combinations	Business Combinations Business combinations are accounted for under the acquisition method, in which the identifiable assets acquired and liabilities assumed are generally measured and recognized at fair value as of the acquisition date, with the excess of the purchase price over the fair value of the net assets acquired recognized as goodwill. Items such as acquired income-tax related balances are recognized in accordance with other applicable GAAP, which may result in measurements that differ from fair value. Business combinations are included in the consolidated financial statements from the respective dates of acquisition. Historical reporting periods reflect only the results of legacy Newtek operations. Acquisition-related costs are expensed in the period incurred and presented within the applicable non-interest expense category. Additional information regarding the Company’s acquisitions can be found within NOTE 3—BUSINESS COMBINATION.
Allowance for Credit Losses – Loans	Allowance for Credit Losses – Loans Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”) approach requires an estimate of the credit losses expected over the life of a loan (or pool of loans). It replaces the incurred loss approach’s threshold that required the recognition of a credit loss when it was probable a loss event was incurred. The allowance for credit losses is a valuation account that is deducted from, or added to, the loans’ amortized cost basis to present the net, lifetime amount expected to be collected on the loans. Loan losses are charged off against the allowance when management believes a loan balance is confirmed to be uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Company historical loss experience was supplemented with peer information when there was insufficient loss data for the Company. Peer selection was based on a review of institutions with comparable loss experience as well as loan yield, bank size, portfolio concentration and geography. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as changes in environmental conditions, such as changes in unemployment rates, production metrics, property values, or other relevant factors. Significant management judgment is required at each point in the measurement process. Portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses. Management developed segments for estimating loss based on type of borrower and collateral which is generally based upon federal call report segmentation and have been combined or sub-segmented as needed to ensure loans of similar risk profiles are appropriately pooled. These portfolio segments are as follows: Commercial Real Estate: The commercial real estate portfolio is comprised of loans to borrowers on small offices, owner-occupied commercial buildings, industrial/warehouse properties, income producing/investor real estate properties, and multi-family loans secured by first mortgages. The Company’s underwriting standards generally target a loan-to-value ratio of 75%, depending on the type of collateral, and requires debt service coverage of a minimum of 1.2 times. Commercial & Industrial: The commercial & industrial portfolio consists of loans made for general business purposes consisting of short-term working capital loans, equipment loans, and unsecured business lines. This includes 32 loans as of March 31, 2023. SBA 7(a): The SBA 7(a) portfolio includes loans originated under the federal Section 7(a) loan program. The SBA is an independent government agency that facilitates one of the nation’s largest sources of SMB financing by providing credit guarantees for its loan programs. SBA 7(a) loans are partially guaranteed by the SBA, with SBA guarantees typically ranging between 50% and 90% of the principal and interest due. Under the SBA’s 7(a) lending program, a bank or other lender may underwrite loans between $5,000 and $5.0 million for a variety of general business purposes based on the SBA’s loan program requirements.
Allowance for Credit Losses – Available-for Sales (“AFS”) Debt Securities	Allowance for Credit Losses – Available-for Sales (“AFS”) Debt Securities The impairment model for AFS debt securities differs from the CECL approach utilized for financial instruments measured at amortized cost because AFS debt securities are measured at fair value. For AFS debt securities in an unrealized loss position, the Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities AFS that do not meet the aforementioned criteria, in making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, adverse conditions specifically related to the security, failure of the issuer of the debt security to make scheduled interest or principal payments, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. The cash flows should be estimated using information relevant to the collectability of the security, including information about past events, current conditions and reasonable and supportable forecasts. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the AFS security is uncollectible or when either of the criteria regarding intent or requirement to sell is met. As of March 31, 2023, the Company determined that the unrealized loss positions in the AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded.
Accrued Interest Receivable	Accrued Interest Receivable Upon the Acquisition and adoption of CECL, the Company made the following elections regarding accrued interest receivable: (1) presented accrued interest receivable balances separately within other assets balance sheet line item; (2) excluded interest receivable that is included in amortized cost of financing receivables from related disclosures requirements and (3) continued our policy to write off accrued interest receivable by reversing interest income. For loans, write off typically occurs upon becoming over 90 to 120 days past due and therefore the amount of such write offs are immaterial. Historically, the Company has not experienced uncollectible accrued interest receivable on investment securities.
Distributions	Distributions Dividends and distributions to the Company's common stockholders are recorded on the declaration date. The timing and amount to be paid out as a dividend or distribution is determined by the Company's Board each quarter.
Cash and Restricted Cash	Cash The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Invested cash is held exclusively at financial institutions of high credit quality. As of March 31, 2023, cash deposits in excess of insured amounts totaled $49.3 million. The Company has not experienced any losses with respect to cash balances in excess of insured amounts and management does not believe there was a significant concentration of risk with respect to cash balances as of March 31, 2023. Restricted cash Restricted cash includes amounts due on SBA loan-related remittances to third parties, cash reserves established as part of a voluntary agreement with the SBA, cash reserves associated with securitization transactions, and cash margin as collateral for derivative instruments.
Interest Bearing Deposits in Banks	Interest bearing deposits in banks The Company’s interest bearing deposits in banks reflects cash held at other financial institutions that earn interest.
Broker Receivable	Broker Receivable Broker receivable represents amounts due from third parties for loans which have been traded at period-end but have not yet settled.
Transfers of Financial Assets and Servicing Assets	Transfers of Financial Assets For a transfer of financial assets to be considered a sale, the transfer must meet the sale criteria of ASC 860, which, at the time of the transfer, requires that the transferred assets qualify as recognized financial assets and the Company surrender control over the assets. Such surrender requires that the assets be isolated from the Company, even in bankruptcy or other receivership, the purchaser have the right to pledge or sell the assets transferred and the Company not have an option or obligation to reacquire the assets. If the sale criteria are not met, the transfer is considered to be a secured borrowing, the assets remain on the Company’s consolidated balance sheets and the sale proceeds are recognized as a liability. From 2010 through March 31, 2023, NSBF engaged in securitizations of the unguaranteed portions of its SBA 7(a) loans. A securitization uses a special purpose entity (the “Trust”), which is considered a variable interest entity. Applying the consolidation requirements for VIEs under the accounting rules in ASC Topic 860, Transfers and Servicing, and ASC Topic 810, Consolidation, which became effective January 1, 2010, the Company determined that as the primary beneficiary of the securitization vehicle, based on its power to direct activities through its role as servicer for the Trust and its obligation to absorb losses and right to receive benefits, it needed to consolidate the Trusts. The Company therefore consolidated the entities using the carrying amounts of the Trust’s assets and liabilities and reflects the assets in SBA Unguaranteed Loans and reflects the associated financing in Notes Payable - Securitization trusts on the Consolidated Statements of Assets and Liabilities. Servicing Assets The Company accounts for servicing assets in accordance with ASC Topic 860-50 - Transfers and Servicing - Servicing Assets and Liabilities. Servicing assets are measured at fair value at each reporting date and the Company reports changes in the fair value of servicing assets in earnings in the period in which the changes occur. The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells. The valuation model for servicing assets incorporates assumptions including, but not limited to, servicing costs, discount rate, prepayment rate, and default rate. Considerable judgement 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.
Due to Participants	Due to Participants Due to participants represents amounts due to third party investors in the SBA guaranteed portion of SBA 7(a) and PPP loans. When the Company receives principal payments, including PPP loan forgiveness, after the loan has been either partially or fully sold to the participant, the remittances received by the Company are either owed in part of in full to the participant and amounts are recorded as a liability on the consolidated statements of assets and liabilities.
Derivative Instruments	Derivative Instruments The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations. Derivative instruments consist of interest rate futures and are held at fair value on the balance sheet. Collateral posted with our futures counterparties is segregated in the Company’s books and records. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. Interest rate futures that are governed by an ISDA agreement provide for bilateral collateral pledging based on the counterparties’ market value. The counterparties have the right to re-pledge the collateral posted but have the obligation to return the pledged collateral, or, if the Company agrees, substantially the same collateral as the market value of the interest rate futures change. The Company is required to post initial margin and daily variation margin for interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Effective January 3, 2017, CME amended its rulebooks to legally characterize daily variation margin payments for centrally cleared interest rate futures as settlement rather than collateral. As a result of this rule change, variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.
Income Taxes	Income Taxes Deferred tax assets and liabilities are computed based upon the differences between the financial statement and income tax basis of assets and liabilities using the enacted tax rates in effect for the year in which those temporary differences are expected to be realized or settled. These differences stem from net unrealized gains and losses generated by the Company and on the book value of intangible assets held by the Company. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Such deferred tax liabilities recorded on the statement of financial condition were $3.52 million and $19.19 million at March 31, 2023 and December 31, 2022, respectively. Deferred tax assets was $8.23 million at March 31, 2023 and there was no deferred tax asset at December 31, 2022 on the statement of financial condition. The change in deferred tax liabilities is included as a component of income tax expense (benefit) in the consolidated statements of operations as a financial holding company. The Company’s U.S. federal and state income tax returns prior to fiscal year 2019 are generally closed, and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. Formerly, as a RIC ending with the Company’s December 31, 2022 fiscal year end, the Company was not subject to corporate level income tax. Beginning with the January 1, 2023 fiscal year, the Company no longer qualifies as a RIC and will be subject to corporate level income tax. See NOTE 18—INCOME TAXES.
Interest Income	Interest Income NSBF SBA 7(a) Portfolio: Management reviews all loans that become 90 days or more past due on principal or interest or when there is reasonable doubt that principal or interest will be collected for possible placement on management’s designation of non-accrual status. Interest receivable is analyzed regularly and reserved against when deemed uncollectible. Interest payments received on non-accrual loans are recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, is likely to remain current, although we may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection. In connection with the April 13, 2023 wind-down agreement between NSBF and the SBA, NSBF has begun to wind-down its operations and NSBF will continue to own the SBA 7(a) loans in its SBA loan portfolio to maturity, liquidation, charge-off, or (subject to SBA’s prior written approval), sale or transfer. NSBF will continue to service and liquidate its SBA loan portfolio, pursuant to an SBA approved lender service provider agreement with SBL. (See NOTE 20—SUBSEQUENT EVENTS: NSBF Wind-down Agreement).
Non-Interest Income	Non-Interest Income Dividend income is recognized on an accrual basis for preferred equity securities to the extent that such amounts are expected to be collected or realized. In determining the amount of dividend income to recognize, if any, from cash distributions on common equity securities, we assess many factors, including the joint ventures’ and non-controlled equity investments’ cumulative undistributed income and operating cash flow. Cash distributions from common equity securities received in excess of such undistributed amounts are recorded first as a reduction of our investment and then as a realized gain on investment. The Company earns servicing income related to the guaranteed portions of SBA loan investments which it sells into the secondary market. These recurring fees are earned and recorded daily. Servicing income is earned for the full term of the loan or until the loan is repaid. The Company earns a variety of fees from borrowers in the ordinary course of conducting its business, including packaging, legal, late payment and prepayment fees. All other income is recorded when earned. Other income is generally non-recurring in nature and earned as “one time” fees in connection with the origination of new debt investments with non-affiliates. Investment transactions are accounted for on a trade-date basis. Realized gains or losses on joint ventures are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in the fair value of investments as a component of the net change in unrealized appreciation (depreciation) on joint ventures in the consolidated statements of operations.
Stock-Based Compensation	Stock – Based Compensation The Company accounts for its equity-based compensation plan using the fair value method, as prescribed by ASC Topic 718 – Stock Compensation. Accordingly, for restricted stock awards, the Company measures the grant date fair value based upon the market price of the Company’s common stock on the date of the grant and amortizes this fair value to salaries and benefits ratably over the requisite service period or vesting term.
Recently Adopted Accounting Pronouncements and New Accounting Standards	Recently Adopted Accounting Pronouncements Beginning in 2023, the Company applies accounting standards applicable to our current status as a financial holding company. In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments” (Topic 326) and in April 2019, the FASB issued ASU 2019-04 “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” (collectively, “CECL”). CECL changed how entities measure potential credit losses for most financial assets and certain other instruments that are not measured at fair value. CECL replaced the “incurred loss” approach under existing guidance with an “expected loss” model for instruments measured at amortized cost. While ASU 2016-13 does not require any particular method for determining the CECL allowance, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan. CECL was effective for the Company beginning January 1, 2023; however, the Company continues to fair value NSBF’s SBA 7(a) loan portfolio and intends to do so until the portfolio is completely runoff. Following the Acquisition on January 6, 2023, the Company owns and consolidates Newtek Bank, which applies CECL. New Accounting Standards In June 2022, the FASB issued ASU No. 2022-03, “Fair Value Measurement (Topic 820),” which clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments affect all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction. ASU 2022-03 is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. For all other entities the amendments are effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. An entity that qualifies as an investment company under Topic 946 should apply the amendments in ASU No. 2022-03 to an investment in an equity security subject to a contractual sale restriction that is executed or modified on or after the date of adoption. The Company does not expect any material impact from adopting ASU No. 2022-03 on the consolidated financial statements.
Segments	SegmentsOperating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Management has determined that the Company has four reportable operating segments: Banking, Non-Bank SBA 7(a) Lending, Technology, Payments, and Other as discussed more fully in NOTE 19—SEGMENTS. In determining the appropriateness of a segment definition, the Company considers the criteria of FASB ASC 280, Segment Reporting.
Reclassifications	Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation.
Accounts Receivable	Accounts Receivable Accounts receivable represent amounts owed to the Company by third parties for electronic payment processing, technology services and related residuals. The Company estimates losses on accounts receivable based on known troubled accounts and historical experience of losses incurred. .
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts The allowance for doubtful accounts is established by management through provisions for bad debts charged against income. Amounts deemed to be uncollectible are charged against the allowance for doubtful accounts and subsequent recoveries, if any, are credited to income. The amount of the allowance for doubtful accounts is inherently subjective, as it requires making material estimates which may vary from actual results. Management’s ongoing estimates of the allowance for doubtful accounts are particularly affected by the performance of the client in their ability to provide the Company with future receivables coupled with the collections of their current receivables. The allowance consists of general and specific components. The specific component relates to a client’s aggregate net balance that is owed to the Company that is classified as doubtful. The general component covers non-classified balances and is based on historical loss experience. A client’s aggregate net balance is considered uncollectible when, based on current information and events, it is probable that the Company will be unable to collect the receivable payments or the Company has greatly reduced the amount of receivables to be purchased. The Company’s charge-off policy is based on a client-by-client review for which the estimated uncollectible portion is charged off against the corresponding client’s net balance and the allowance for doubtful accounts.
Inventory	Inventory Inventory consists primarily of equipment to be installed in NMS merchant locations to enable the NMS merchants to process electronic transactions. Inventory is stated at the lower of cost or net realizable value, which is determined on a FIFO (first in-first out) basis.
Fixed Assets	Fixed Assets Fixed assets, which are composed of terminals, software, telephone systems, computer equipment, automobile, website and leasehold improvements, are stated at cost less accumulated depreciation and amortization. Depreciation of fixed assets is provided on a straight-line basis using estimated useful lives of the related assets ranging from three to seven years. Amortization of leasehold improvements is provided on a straight-line basis using the lesser of the useful life of the asset, which is generally three to five years, or lease term.
Software Development Costs	Software Development Costs The Company capitalizes certain software development costs for internal use. Costs incurred during the preliminary project stage are expensed as incurred, while application stage projects are capitalized. The latter costs are typically employee and/or consulting services directly associated with the development of the internal use software. Software and website costs are included in fixed assets in the accompanying consolidated balance sheets. Amortization commences once the software and website costs are ready for their intended use and are amortized using the straight-line method over the estimated useful life, typically three years.
Goodwill and Customer Merchant Accounts	Goodwill and Customer Merchant Accounts Goodwill is an indefinite lived asset, which is not amortized and is instead subject to impairment testing, at least annually. Customer merchant accounts with finite lives are amortized over an estimated useful life of 30 or 66 months (See NOTE 8—GOODWILL AND INTANGIBLE ASSETS). The Company considers the following to be some examples of indicators that may trigger an impairment review outside of its annual impairment review: (i) significant under-performance or loss of key contracts acquired in an acquisition relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of the acquired assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s fair value for a sustained period of time; and (vi) regulatory changes. In assessing the recoverability of the Company’s goodwill and customer merchant accounts, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. These include estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the Company, the period over which cash flows will occur, and determination of the Company’s cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and conclusions on impairment.
Loans	Loans Fair Value Option Management evaluated retained participating interests in government guaranteed loans for the fair value option election. Those loans for which the fair value option were elected are measured at fair value and classified as either held for sale or held for investment, as outlined below. Not electing fair value generally results in a larger discount being recorded on the date of the sale. This discount will subsequently be accreted into interest income over the underlying loan’s remaining term using the effective interest method. Management made this change of election in alignment with its ongoing effort to reduce volatility and drive more predictable revenue. In accordance with accounting standards, any loans for which fair value was previously elected continue to be measured as such. Interest income is recognized in the same manner on loans reported at fair value as on non-fair value loans, except in regard to origination fees and costs which are recognized immediately upon fair value election. The changes in fair value of loans are reported in noninterest income. Fair value of loans includes adjustments for historical credit losses, market liquidity, and economic conditions. The credit loss adjustment is estimated using a discounted cash flow (“DCF”) methodology for each loan which incorporates measurements of (i) probability of default (“PD”), which is the likelihood a loan or lease will stop performing, (ii) loss given default (“LGD”), which is the expected loss rate for loans or leases in default, (iii) prepayments, (iv) the estimated outstanding exposure at default (“EAD”), and (v) the effective interest rate (“EIR”). PD rates are calculated using the number of defaults divided by the number of loans available to default for 1-year observation periods over the lifetime of data available for a certain pool. LGD rates are calculated by dividing the lifetime net charge-offs for each pool by the pool’s average outstanding balance. PD and LGD rates are adjusted for forecasted national unemployment rates during a reasonable and supportable forecast period. Management has determined that four quarters represents a reasonable and supportable forecast period and adjusted loss rates revert back to a historical loss rate over four quarters on a straight-line basis. Expected losses are calculated as the product of PD, LGD, and EAD. Expected losses are discounted using the loan or lease EIR, adjusted for prepayments. Market liquidity and economic condition adjustments are estimated using the sale prices of similar loans based on rate, term, and asset size. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.
Revenue Recognition	Revenue Recognition Electronic payment processing and fee income Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To achieve this core principle, the Company applies the following five steps: 1. Identify the contract with a customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognize revenue when or as the Company satisfies a performance obligation Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities. NMS’ revenue is primarily derived from electronic payment processing and related fee income. Electronic payment processing and fee income is derived from NMS’ electronic processing of credit and debit card transactions that are authorized and captured through third-party networks. Typically, merchants are charged for these processing services by applying a percentage to the dollar amount of each transaction plus a flat fee per transaction. Certain merchant customers are charged miscellaneous fees, including fees for handling charge-backs or returns, monthly minimum fees, statement fees and fees for other miscellaneous services. Revenues derived from the electronic processing of MasterCard®, Visa®, American Express® and Discover® sourced credit and debit card transactions are reported gross of amounts paid to sponsor banks. NMS's performance obligations are to stand ready to provide holistic electronic payment processing services consisting of a series of distinct elements that are substantially the same and have the same pattern of transfer over time. NMS’s promise to its customers is to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of payment transactions processed, number of cards on file, etc.); as such, the total transaction price is variable. The Company allocates the variable fees charged to the day in which it has the contractual right to bill under the contract. ASU 2014-09, "Revenues from Contracts with Customers (“Topic 606”)" (“ASC 606”) requires that the Company determine for each customer arrangement whether revenue should be recognized at a point in time or over time. For the quarter ended March 31, 2023, substantially all of the Company’s revenues were recognized at a point in time. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as permitted by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. As described above, the Company’s most significant performance obligations consist of variable consideration under a stand-ready series of distinct days of service. Such variable consideration meets the specified criteria for the disclosure exclusion; therefore, the majority of the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied is variable consideration that is not required for this disclosure. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. Receivable fees Receivable fees are derived from the funding (purchase) of receivables from the Company’s finance clients. The Company recognizes revenue on the date receivables are purchased at a percentage of face value as agreed to by the client. The Company also has arrangements with certain of its clients whereby it purchases the client’s receivables and charges a fee at a specified rate based on the amount of funds advanced against such receivables. The funds provided are collateralized and the income is recognized as earned which occurs as time passes. Billing fees Billing fees are derived from billing-only (non-finance) clients. These fees are recorded when earned, which occurs when the service is rendered.
Reserve for Losses on Merchant Accounts	Reserve for Losses on Merchant Accounts Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s acquiring bank and charged to the merchant. If the merchant has inadequate funds, the Company or, under limited circumstances, the Company and the acquiring bank, must bear the credit risk for the full amount of the transaction. The Company evaluates its risk for such transactions and estimates its potential loss for chargebacks based primarily on historical experience and other relevant factors. The Company records reserves for charge-backs and contingent liabilities when such amounts are deemed to be probable and estimable. The required reserves may change in the future due to new developments, including, but not limited to, changes in litigation or increased charge-back exposure as the result of merchant insolvency, liquidation, or other reasons. The required reserves are reviewed periodically to determine if adjustments are required.
Electronic Payment Processing Costs	Electronic Payment Processing Costs Electronic payment processing costs consist principally of costs directly related to the processing of merchant sales volume, bank processing fees and costs paid to third-party processing networks. Such costs are recognized at the time the merchant transactions are processed or when the services are performed. In addition to costs directly related to the processing of merchant sales volume, electronic payment processing costs also include residual expenses. Residual expenses represent fees paid to third-party sales referral sources. Residual expenses are paid in accordance with contracted terms. These are generally linked to revenues derived from merchants successfully referred to the Company and that begin using the Company for merchant processing services. Such residual expenses are recognized in the Company’s consolidated statements of income. During the quarter ended March 31, 2023, the Company partnered with two sponsor banks for substantially all merchant transactions. Substantially all merchant transactions were processed by one merchant processor.
Fair Value Measurements	Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, management used various valuation approaches, all of which were approved by the Company’s Board. In accordance with GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and gives the lowest priority to unobservable inputs (Level 3). The levels of the fair value hierarchy are as follows: Level 1Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as certain U.S. Treasury, other U.S. Government and agency mortgage-backed debt securities that are highly liquid and are actively traded in over-the-counter markets. Level 2Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency mortgage-backed debt securities, corporate debt securities, derivative contracts and residential mortgage loans held-for-sale. Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments, retained residual interests in securitizations, residential mortgage servicing rights, and highly structured or long-term derivative contracts.

DERIVATIVE INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Breakdown of derivatives outstanding

The following is a breakdown of the derivatives outstanding as of March 31, 2023 and December 31, 2022:


	March 31, 2023							December 31, 2022
			Fair Value				Remaining			Fair Value			Remaining
Contract Type	Notional		Asset1		Liability1		Maturity (years)	Notional		Asset1	Liability1		Maturity (years)
5-year Swap Futures	$	25,220	$	—	$	624	0.25 years	$	—	—	$	—	—

(1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

Gains and losses on derivatives

The following table indicated the net realized gains (losses) and unrealized appreciation (depreciation) on derivatives as included in the consolidated statements of operations for the three months ended March 31, 2023 and 2022:


	Three Months Ended
		March 31, 2023	March 31, 2022
Contract Type			Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)
5-year Swap Futures			$	(693)	$	197	$	183	$	445

GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

The following table summarizes changes in the carrying amount of goodwill:


(in thousands)	March 31, 2023		December 31, 2022
NBNYC acquisition	$	1,279	$	—
Other goodwill	19,910		$	—
Total goodwill	$	21,189	$	—

Schedule of intangible assets

The following table summarizes intangible assets:


	March 31, 2023						December 31, 2022
	Gross carrying Amount		Accumulated Amortization		Net Carrying amount		Gross carrying Amount		Accumulated Amortization		Net Carrying amount
Core Deposits	$	1,040	$	(51)	$	989	$	—	$	—	$	—
Customer lists	17,385		(11,463)		5,923		—		—		—
Total intangible assets	$	18,425	$	(11,514)	$	6,912	$	—	$	—	$	—

Intangible asset amortization schedule

The remaining estimated aggregate future amortization expense for intangible assets as of March 31, 2023 is as follows:


	Amortization Expense
Remainder of 2023	$	1,207
2024	982
2025	948
2026	928
2027	907
Thereafter	1,940
	$	6,912

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (h)
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Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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+ Details

Deposits

3 Months Ended

Mar. 31, 2023

Banking and Thrift, Interest [Abstract]

Deposits

NOTE 10—DEPOSITS:

The following table summarizes deposits by type:


	March 31,
(In thousands)	2023
Non-interest-bearing:
Demand	$	22,878
Interest-bearing:
Checking	784
Money market	25,770
Savings	16,700
Time deposits	181,442
Total interest-bearing	$	224,696
Total deposits	$	247,574

Time deposits, money market, and interest-bearing checking obtained through brokers	$	106,763
Aggregate amount of deposit accounts that exceeded the FDIC limit	$	13,357
Demand deposit overdrafts reclassified as loan balances	$	—

The following table summarizes the scheduled maturities of time deposits:


Remainder of 2023	$	104,922
2024	19,431
2025	18,034
2026	22,737
2027	16,206
Thereafter	112
Total time deposits	$	181,442

Debt Securities Available-for-Sale - Available-for-Sale Debt Securities (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	$ 33,017
Unrealized Gains	85
Unrealized Losses	198
Fair Value	32,905
Total available for sale securities pledge	32,905
U.S. Treasury notes
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	29,017
Unrealized Gains	85
Unrealized Losses	1
Fair Value	29,102
Government agency debentures
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	4,000
Unrealized Gains	0
Unrealized Losses	197
Fair Value	3,803
Pledged for deposits
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Total available for sale securities pledge	0
Pledged for borrowings and other
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Total available for sale securities pledge	$ 32,905

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($)	Mar. 31, 2023	Dec. 31, 2022
ASSETS
Cash and due from banks	$ 27,349,000	$ 53,692,000
Restricted cash	72,599,000	71,914,000
Interest bearing deposits in banks	97,196,000	0
Total cash and cash equivalents	197,144,000	125,606,000
Debt securities available-for-sale, at fair value	32,905,000	0
Loans held for sale, at fair value	125,639,000	19,171,000
Loans held for investment, at fair value	532,788,000	505,268,000
Loans held for investment, at amortized cost, net of deferred fees and costs	166,828,000	0
Allowance for credit losses	(2,189,000)	0
Total loans held for investment, at amortized cost, net	164,639,000	0
Federal Home Loan Bank Stock and Federal Reserve Bank Stock	1,288,000	0
Joint ventures, at fair value (cost of $23,314 and $23,314), respectively	25,022,000	23,822,000
Investments	26,382,000	283,599,000
Goodwill and Intangibles	28,101,000	0
Settlement receivable	41,438,000	0
Right of use assets	7,492,000	6,484,000
Deferred tax asset	8,225,000	0
Servicing assets	33,351,000	30,268,000
Other assets	50,347,000	28,506,000
Total assets	1,249,739,000	998,902,000
Deposits:
Noninterest-bearing	22,878,000	0
Interest-bearing	224,696,000	0
Total deposits	247,574,000	0
Borrowings	697,395,000	539,326,000
Derivative instruments	624,000
Lease liabilities	9,144,000	7,973,000
Deferred tax liabilities	3,519,000	19,194,000
Due to participants	28,188,000	35,627,000
Accounts payable, accrued expenses and other liabilities	45,257,000	21,424,000
Total liabilities	1,031,701,000	623,544,000
Shareholders' Equity:
Preferred stock (par value $0.02 per share; authorized 20,000 shares, 20,000 shares issued and no shares outstanding)	19,738,000	0
Common stock (par value $0.02 per share; authorized 200,000 shares, 24,609 and 24,609 issued and outstanding, respectively)	491,000	492,000
Additional paid-in capital	191,316,000	354,243,000
Retained earnings	7,047,000	20,623,000
Accumulated other comprehensive loss, net of income taxes	(82,000)	0
Total NewtekOne shareholders’ equity	218,510,000	375,358,000
Non-controlling interest	(472,000)	0
Total shareholders' equity	218,038,000	375,358,000
Total liabilities and shareholders' equity	1,249,739,000	998,902,000
Controlled Investments
ASSETS
Investments	0	258,417,000
Non-Control Investments
ASSETS
Investments	$ 1,360,000	$ 1,360,000

SEGMENTS

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

SEGMENTS

NOTE 19—SEGMENTS:

The Company's management reporting process measures the performance of its operating segments based on internal operating structure, which is subject to change from time to time. Accordingly, the Company operates four reportable segments for management reporting purposes as discussed below:

Banking - originates, services and sells SBA 7(a) loans in a similar manner to NSBF’s historic business model (see Non-Bank Lending below) and originates and services SBA 504 loans, C&I loans, CRE loans and ABL loans. In addition, the bank offers depository services.

NSBF - relates to the legacy portfolios held outside the bank, no new originating activity takes place. The legacy portfolio consists of SBA 7(a) Loans, these loans may be sold directly to third parties or securitized through trusts.

Payments - markets credit and debit card processing services, check approval services, processing equipment, and software.

–Assist merchants with initial installation of equipment and on-going service, as well as any other special processing needs that they may have.

–Handles payment processing for a merchant portfolio of taxi cabs and related licensed payment processing software.

– provider or a cloud based Point of Sale (POS) system for a variety of restaurant, retail, assisted living, parks and golf course businesses, which provides not only payments and purchase technology solutions, but also inventory, customer management, reporting, employee time clock, table and menu layouts, and ecommerce solutions as the central operating system for an SMB.

Technology - provides website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services including consulting and implementing technology solutions for enterprise and commercial clients across the U.S. As a result of commitments made to the Federal Reserve, the Company will divest or otherwise terminate the activities conducted by EWS and NTS, including its subsidiary SIDCO, within two years of becoming a financial holding company, subject to any extension of the two-year period.

Corporate and Other - The information provided under the caption “Other” represents operations not considered to be reportable segments and/or general operating expenses of the Company, and includes the parent company, other non-bank subsidiaries including Newtek Insurance and Newtek Payroll, and elimination adjustments to reconcile the results of the operating segments to the unaudited condensed consolidated financial statements prepared in conformity with GAAP.

The following tables provide financial information for the Company's segments:


	Banking		Technology		NSBF		Payments		Corporate and Other		Eliminations		Consolidated
March 31, 2023
Interest income	$	3,741	$	—	$	13,214	$	640	$	2,582	$	(1,462)	$	18,715
Interest expense	1,682		246		6,659		966		6,040		(1,461)		14,132
Net interest income	2,059		(246)		6,555		(326)		(3,458)		(1)		4,583
Provision for loan credit losses	1,318		—		—		—		—		—		1,318
Noninterest income	10,217		8,231		19,632		11,065		4,884		(11,242)		42,787
Noninterest expense	13,468		7,719		12,620		7,945		8,218		(10,772)		39,197
Income tax expense (benefit)	(27)		84		20		130		(5,069)		(1)		(4,863)
Net income (loss)	$	(2,483)	$	182	$	13,547	$	2,664	$	(1,723)	$	(470)	$	11,718
Assets	$	383,654	$	27,316	$	768,101	$	51,224	$	639,601	$	(620,158)	$	1,249,739

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Controlled Investments	Common stock	Preferred stock	Additional paid-in capital	Additional paid-in capital Controlled Investments	Accumulated other comprehensive income	Accumulated undistributed earnings	Retained earnings	Non-controlling Interest
Beginning balance (in shares) at Dec. 31, 2021			24,159,000
Beginning balance at Dec. 31, 2021	$ 403,887		$ 483		$ 367,663			$ 35,741
Increase (Decrease) in Stockholders' Equity [Roll Forward]
DRIP shares issued (in shares)			9,000
DRIP shares issued	225				225
Stock-based compensation expense	781				781
Dividends declared related to RSA (in shares)			4,000
Dividends declared related to RSA	0				110			(110)
Purchase of vested stock for employee payroll tax withholding (in shares)			(18,000)
Purchase of vested stock for employee payroll tax withholding	$ (480)				(480)
Restricted stock awards (in shares)	7,000
Dividends declared common shares ($0.18/share)	$ (15,585)							(15,585)
Dividends declared preferred shares ($12.27/share)	0
Income from operations	973							973
Net realized gain on investments	15,740							15,740
Net unrealized depreciation on investments	(7,061)							(7,061)
Net income	9,652
Other comprehensive loss, net of tax	0
Ending balance (in shares) at Mar. 31, 2022			24,161,000
Ending balance at Mar. 31, 2022	$ 398,480		$ 483		368,299			29,698
Beginning balance (in shares) at Dec. 31, 2022	24,609,000		24,617,000
Beginning balance at Dec. 31, 2022	$ 375,358		$ 492	$ 0	354,242		$ 0	20,624	$ 0	$ 0
Beginning balance, preferred stock (in shares) at Dec. 31, 2022				0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Change in presentation	0				20,624			(20,624)
Removal of fair value adjustments	(138,043)				(138,043)
Consolidation of controlled investments	(227)	$ (65,215)		$ 245		$ (65,215)				(472)
Reassessment of deferred tax assets and liabilities	19,266				19,266
DRIP shares issued (in shares)			6,000
DRIP shares issued	72				72
Stock-based compensation expense	738				738
Dividends declared related to RSA (in shares)			5,000
Dividends declared related to RSA	0				60				(60)
Purchase of vested stock for employee payroll tax withholding (in shares)			(19,000)
Purchase of vested stock for employee payroll tax withholding	(429)		$ (1)		(428)
Issuance of preferred stock (in shares)				20,000
Issuance of Preferred stock	20,000			$ 20,000
Preferred stock issuance costs	(507)			(507)
Dividends declared common shares ($0.18/share)	(4,363)								(4,363)
Dividends declared preferred shares ($12.27/share)	(249)								(249)
Net income	11,718								11,718
Other comprehensive loss, net of tax	$ (82)						(82)
Ending balance (in shares) at Mar. 31, 2023	24,609,000		24,609,000
Ending balance at Mar. 31, 2023	$ 218,038		$ 491	$ 19,738	$ 191,316		$ (82)	$ 0	$ 7,046	$ (472)
Ending balance, preferred stock (in shares) at Mar. 31, 2023	0			20,000

Debt Securities Available-for-Sale - Maturity (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Amortized Cost
Maturing within 1 year	$ 1,246
After 1 year through 5 years	31,771
Total available for sale securities	33,017
Fair Value
Maturing within 1 year	1,245
After 1 year through 5 years	31,660
Total available for sale securities	$ 32,905

EARNINGS PER SHARE - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Feb. 03, 2023	Mar. 31, 2023
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Preferred stock, par value (in dollars per share)		$ 0.02
Aggregate purchase price		$ 20,000
Warrants issued (in shares)		47,540
Price of warrant (in dollars per share)		$ 21.03468
Series A Convertible Preferred Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Shares issued in relation to purchase agreement (in shares)	20,000
Preferred stock, par value (in dollars per share)	$ 0.02
Aggregate purchase price	$ 20,000
Issuance price (in dollars per share)	$ 1,000
Convertible shares (in shares)	47.54053782

LEASES - Narrative (Details)	Mar. 31, 2023
Leases [Abstract]
Remaining contractual term	5 years
Renewal term	10 years

SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES:

Use of Estimates in the Preparation of Financial Statements

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expense during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are complete. Actual results could differ from those estimates.

Fair Value

The Company applies fair value accounting to certain of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions reflect those that management believe market participants would use in pricing the financial instrument at the measurement date.

The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value was greatest for financial instruments classified as Level 3.

Any changes to the valuation methodology are reviewed by management and the Board to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies. See further description of fair value methodology in NOTE 9—FAIR VALUE MEASUREMENTS.

Debt securities, available for sale

The Company’s securities portfolio primarily consists of available for sale debt securities. Securities that are classified as “available for sale” are carried at their estimated fair value, with any unrealized gains or losses, net of taxes, reported as accumulated other comprehensive income or loss in stockholders’ equity. The fair values of our securities are affected by changes in market interest rates and credit spreads. In general, as interest rates rise and/or credit spreads widen, the fair value of securities will decline. As interest rates fall and/or credit spreads tighten, the fair value of securities will rise. The Company evaluates available-for-sale debt securities in unrealized loss positions at least quarterly to determine if an allowance for credit losses is required. Based on an evaluation of available information about past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability, the Company has concluded that it expects to receive all contractual cash flows from each security held in its available-for-sale securities portfolio.

Consolidation

Assets related to transactions that do not meet ASC Topic 860 — Transfers and Servicing (“ASC Topic 860”) requirements for accounting sale treatment are reflected in the Company’s consolidated statements of assets and liabilities as investments. Those assets are owned by the securitization trusts and are included in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of the Company.

Business Combinations

Business combinations are accounted for under the acquisition method, in which the identifiable assets acquired and liabilities assumed are generally measured and recognized at fair value as of the acquisition date, with the excess of the purchase price over the fair value of the net assets acquired recognized as goodwill. Items such as acquired income-tax related balances are recognized in accordance with other applicable GAAP, which may result in measurements that differ from fair value. Business combinations are included in the consolidated financial statements from the respective dates of acquisition. Historical reporting periods reflect only the results of legacy Newtek operations. Acquisition-related costs are expensed in the period incurred and presented within the applicable non-interest expense category. Additional information regarding the Company’s acquisitions can be found within NOTE 3—BUSINESS COMBINATION.

Allowance for Credit Losses – Loans

Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”) approach requires an estimate of the credit losses expected over the life of a loan (or pool of loans). It replaces the incurred loss approach’s threshold that required the recognition of a credit loss when it was probable a loss event was incurred. The allowance for credit losses is a valuation account that is deducted from, or added to, the loans’ amortized cost basis to present the net, lifetime amount expected to be collected on the loans. Loan losses are charged off against the allowance when management believes a loan balance is confirmed to be uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Management estimates the allowance balance using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Company historical loss experience was supplemented with peer information when there was insufficient loss data for the Company. Peer selection was based on a review of institutions with comparable loss experience as well as loan yield, bank size, portfolio concentration and geography. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as changes in environmental conditions, such as changes in unemployment rates, production metrics, property values, or other relevant factors. Significant management judgment is required at each point in the measurement process.

Portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses. Management developed segments for estimating loss based on type of borrower and collateral which is generally based upon federal call report segmentation and have been combined or sub-segmented as needed to ensure loans of similar risk profiles are appropriately pooled. These portfolio segments are as follows:

Commercial Real Estate: The commercial real estate portfolio is comprised of loans to borrowers on small offices, owner-occupied commercial buildings, industrial/warehouse properties, income producing/investor real estate properties, and multi-family loans secured by first mortgages. The Company’s underwriting standards generally target a loan-to-value ratio of 75%, depending on the type of collateral, and requires debt service coverage of a minimum of 1.2 times.

Commercial & Industrial: The commercial & industrial portfolio consists of loans made for general business purposes consisting of short-term working capital loans, equipment loans, and unsecured business lines. This includes 32 loans as of March 31, 2023.

SBA 7(a): The SBA 7(a) portfolio includes loans originated under the federal Section 7(a) loan program. The SBA is an independent government agency that facilitates one of the nation’s largest sources of SMB financing by providing credit guarantees for its loan programs. SBA 7(a) loans are partially guaranteed by the SBA, with SBA guarantees typically ranging between 50% and 90% of the principal and interest due. Under the SBA’s 7(a) lending program, a bank or other lender may underwrite loans between $5,000 and $5.0 million for a variety of general business purposes based on the SBA’s loan program requirements.

Allowance for Credit Losses – Available-for Sales (“AFS”) Debt Securities

The impairment model for AFS debt securities differs from the CECL approach utilized for financial instruments measured at amortized cost because AFS debt securities are measured at fair value. For AFS debt securities in an unrealized loss position, the Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities AFS that do not meet the aforementioned criteria, in making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, adverse conditions specifically related to the security, failure of the

issuer of the debt security to make scheduled interest or principal payments, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. The cash flows should be estimated using information relevant to the collectability of the security, including information about past events, current conditions and reasonable and supportable forecasts. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the AFS security is uncollectible or when either of the criteria regarding intent or requirement to sell is met. As of March 31, 2023, the Company determined that the unrealized loss positions in the AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded.

Accrued Interest Receivable

Upon the Acquisition and adoption of CECL, the Company made the following elections regarding accrued interest receivable: (1) presented accrued interest receivable balances separately within other assets balance sheet line item; (2) excluded interest receivable that is included in amortized cost of financing receivables from related disclosures requirements and (3) continued our policy to write off accrued interest receivable by reversing interest income. For loans, write off typically occurs upon becoming over 90 to 120 days past due and therefore the amount of such write offs are immaterial. Historically, the Company has not experienced uncollectible accrued interest receivable on investment securities.

Distributions

Dividends and distributions to the Company's common stockholders are recorded on the declaration date. The timing and amount to be paid out as a dividend or distribution is determined by the Company's Board each quarter.

Cash

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Invested cash is held exclusively at financial institutions of high credit quality. As of March 31, 2023, cash deposits in excess of insured amounts totaled $49.3 million. The Company has not experienced any losses with respect to cash balances in excess of insured amounts and management does not believe there was a significant concentration of risk with respect to cash balances as of March 31, 2023.

Restricted cash

Restricted cash includes amounts due on SBA loan-related remittances to third parties, cash reserves established as part of a voluntary agreement with the SBA, cash reserves associated with securitization transactions, and cash margin as collateral for derivative instruments. As of March 31, 2023, total restricted cash was $72.6 million.

Interest bearing deposits in banks

The Company’s interest bearing deposits in banks reflects cash held at other financial institutions that earn interest.

The following table provides a reconciliation of cash and restricted cash as of March 31, 2023 and 2022 and December 31, 2022 and 2021:


	March 31, 2023		March 31, 2022		December 31, 2022		December 31, 2021
Cash and due from banks	$	27,349	4,911		53,692		$	2,397
Restricted cash	72,599		158,543		71,914		184,463
Interest bearing deposits in banks	97,196		—		—		—
Cash and restricted cash	$	197,144	$	163,454	$	125,606	$	186,860

Broker Receivable

Broker receivable represents amounts due from third parties for loans which have been traded at period-end but have not yet settled.

Transfers of Financial Assets

For a transfer of financial assets to be considered a sale, the transfer must meet the sale criteria of ASC 860, which, at the time of the transfer, requires that the transferred assets qualify as recognized financial assets and the Company surrender control over the assets. Such surrender requires that the assets be isolated from the Company, even in bankruptcy or other receivership, the purchaser have the right to pledge or sell the assets transferred and the Company not have an option or obligation to reacquire the assets. If the sale criteria are not met, the transfer is considered to be a secured borrowing, the assets remain on the Company’s consolidated balance sheets and the sale proceeds are recognized as a liability.

From 2010 through March 31, 2023, NSBF engaged in securitizations of the unguaranteed portions of its SBA 7(a) loans. A securitization uses a special purpose entity (the “Trust”), which is considered a variable interest entity. Applying the consolidation requirements for VIEs under the accounting rules in ASC Topic 860, Transfers and Servicing, and ASC Topic 810, Consolidation, which became effective January 1, 2010, the Company determined that as the primary beneficiary of the securitization vehicle, based on its power to direct activities through its role as servicer for the Trust and its obligation to absorb losses and right to receive benefits, it needed to consolidate the Trusts. The Company therefore consolidated the entities using the carrying amounts of the Trust’s assets and liabilities and reflects the assets in SBA Unguaranteed Loans and reflects the associated financing in Notes Payable - Securitization trusts on the Consolidated Statements of Assets and Liabilities.

Servicing Assets

The Company accounts for servicing assets in accordance with ASC Topic 860-50 - Transfers and Servicing - Servicing Assets and Liabilities. Servicing assets are measured at fair value at each reporting date and the Company reports changes in the fair value of servicing assets in earnings in the period in which the changes occur. The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells. The valuation model for servicing assets incorporates assumptions including, but not limited to, servicing costs, discount rate, prepayment rate, and default rate. Considerable judgement 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.

Due to Participants

Due to participants represents amounts due to third party investors in the SBA guaranteed portion of SBA 7(a) and PPP loans. When the Company receives principal payments, including PPP loan forgiveness, after the loan has been either partially or fully sold to the participant, the remittances received by the Company are either owed in part of in full to the participant and amounts are recorded as a liability on the consolidated statements of assets and liabilities.

Derivative Instruments

The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations. Derivative instruments consist of interest rate futures and are held at fair value on the balance sheet. Collateral posted with our futures counterparties is segregated in the Company’s books and records. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. Interest rate futures that are governed by an ISDA agreement provide for bilateral collateral pledging based on the counterparties’ market value. The counterparties have the right to re-pledge the collateral posted but have the obligation to return the pledged collateral, or, if the Company agrees, substantially the same collateral as the market value of the interest rate futures change.

The Company is required to post initial margin and daily variation margin for interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Effective January 3, 2017, CME amended its rulebooks to legally characterize daily variation margin payments for centrally cleared interest rate futures as settlement rather than collateral. As a result of this rule change, variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.

Income Taxes

Deferred tax assets and liabilities are computed based upon the differences between the financial statement and income tax basis of assets and liabilities using the enacted tax rates in effect for the year in which those temporary differences are expected to be realized or settled. These differences stem from net unrealized gains and losses generated by the Company and on the book value of intangible assets held by the Company. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Such deferred tax liabilities recorded on the statement of financial condition were $3.52 million and $19.19 million at March 31, 2023 and December 31, 2022, respectively. Deferred tax assets was $8.23 million at March 31, 2023 and there was no deferred tax asset at December 31, 2022 on the statement of financial condition. The change in deferred tax liabilities is included as a component of income tax expense (benefit) in the consolidated statements of operations as a financial holding company.

The Company’s U.S. federal and state income tax returns prior to fiscal year 2019 are generally closed, and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

Formerly, as a RIC ending with the Company’s December 31, 2022 fiscal year end, the Company was not subject to corporate level income tax. Beginning with the January 1, 2023 fiscal year, the Company no longer qualifies as a RIC and will be subject to corporate level income tax. See NOTE 18—INCOME TAXES.

Interest Income

NSBF SBA 7(a) Portfolio: Management reviews all loans that become 90 days or more past due on principal or interest or when there is reasonable doubt that principal or interest will be collected for possible placement on management’s designation of non-accrual status. Interest receivable is analyzed regularly and reserved against when deemed uncollectible. Interest payments received on non-accrual loans are recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, is likely to remain current, although we may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection. In connection with the April 13, 2023 wind-down agreement between NSBF and the SBA, NSBF has begun to wind-down its operations and NSBF will continue to own the SBA 7(a) loans in its SBA loan portfolio to maturity, liquidation, charge-off, or (subject to SBA’s prior written approval), sale or transfer. NSBF will continue to service and liquidate its SBA loan portfolio, pursuant to an SBA approved lender service provider agreement with SBL. (See NOTE 20—SUBSEQUENT EVENTS: NSBF Wind-down Agreement).

Non-Interest Income

Dividend income is recognized on an accrual basis for preferred equity securities to the extent that such amounts are expected to be collected or realized. In determining the amount of dividend income to recognize, if any, from cash distributions on common equity securities, we assess many factors, including the joint ventures’ and non-controlled equity investments’ cumulative undistributed income and operating cash flow. Cash distributions from common equity securities received in excess of such undistributed amounts are recorded first as a reduction of our investment and then as a realized gain on investment.

The Company earns servicing income related to the guaranteed portions of SBA loan investments which it sells into the secondary market. These recurring fees are earned and recorded daily. Servicing income is earned for the full term of the loan or until the loan is repaid.

The Company earns a variety of fees from borrowers in the ordinary course of conducting its business, including packaging, legal, late payment and prepayment fees. All other income is recorded when earned. Other income is generally non-recurring in nature and earned as “one time” fees in connection with the origination of new debt investments with non-affiliates.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on joint ventures are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in the fair value of investments as a component of the net change in unrealized appreciation (depreciation) on joint ventures in the consolidated statements of operations.

Stock – Based Compensation

The Company accounts for its equity-based compensation plan using the fair value method, as prescribed by ASC Topic 718 – Stock Compensation. Accordingly, for restricted stock awards, the Company measures the grant date fair value based upon the market price of the Company’s common stock on the date of the grant and amortizes this fair value to salaries and benefits ratably over the requisite service period or vesting term.

Recently Adopted Accounting Pronouncements

Beginning in 2023, the Company applies accounting standards applicable to our current status as a financial holding company.

In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments” (Topic 326) and in April 2019, the FASB issued ASU 2019-04 “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” (collectively, “CECL”). CECL changed how entities measure potential credit losses for most financial assets and certain other instruments that are not measured at fair value. CECL replaced the “incurred loss” approach under existing guidance with an “expected loss” model for instruments measured at amortized cost. While ASU 2016-13 does not require any particular method for determining the CECL allowance, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan. CECL was effective for the Company beginning January 1, 2023; however, the Company continues to fair value NSBF’s SBA 7(a) loan portfolio and intends to do so until the portfolio is completely runoff. Following the Acquisition on January 6, 2023, the Company owns and consolidates Newtek Bank, which applies CECL.

New Accounting Standards

In June 2022, the FASB issued ASU No. 2022-03, “Fair Value Measurement (Topic 820),” which clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments affect all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction. ASU 2022-03 is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. For all other entities the amendments are effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. An entity that qualifies as an investment company under Topic 946 should apply the amendments in ASU No. 2022-03 to an investment in an equity security subject to a contractual sale restriction that is executed or modified on or after the date of adoption. The Company does not expect any material impact from adopting ASU No. 2022-03 on the consolidated financial statements.

Segments

Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Management has determined that the Company has four reportable operating segments: Banking, Non-Bank SBA 7(a) Lending, Technology, Payments, and Other as discussed more fully in NOTE 19—SEGMENTS. In determining the appropriateness of a segment definition, the Company considers the criteria of FASB ASC 280, Segment Reporting.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

BORROWINGS - Outstanding Borrowings (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Net carrying amount	$ 697,395	$ 539,326
Weighted Average Interest Rate	6.69%	6.11%
Webster Note - MWI \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 39,871
Unamortized deferred financing costs	(333)
Net carrying amount	$ 39,538
Weighted Average Interest Rate	7.27%
Webster Bank Line of Credit \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 2,180
Unamortized deferred financing costs	0
Net carrying amount	$ 2,180
Webster Bank Line of Credit \| Line of Credit
Debt Instrument [Line Items]
Weighted Average Interest Rate	8.00%
Deutsche Bank Line of Credit \| Line of Credit
Debt Instrument [Line Items]
Commitments - Notes	$ 7,123
Unamortized deferred financing costs	(190)
Net carrying amount	$ 6,933
Weighted Average Interest Rate	7.42%
Capital One Facilities \| Line of Credit
Debt Instrument [Line Items]
Commitments - Notes	$ 19,347
Unamortized deferred financing costs	(465)
Net carrying amount	18,882
One Florida line of credit - SP3 \| Line of Credit
Debt Instrument [Line Items]
Commitments - Notes	13,698
Unamortized deferred financing costs	(84)
Net carrying amount	$ 13,613
Weighted Average Interest Rate	9.30%
2024 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 38,250	$ 38,250
Unamortized deferred financing costs	(292)	(347)
Net carrying amount	$ 37,958	$ 37,903
Weighted Average Interest Rate	5.75%	5.75%
2025 5.00% Notes \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 30,000	$ 30,000
Unamortized deferred financing costs	(635)
Net carrying amount	$ 29,365	$ 29,306
Weighted Average Interest Rate	5.00%	5.00%
2025 8.13% Notes \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 50,000	$ 0
Unamortized deferred financing costs	(960)
Net carrying amount	$ 49,040	$ 0
Weighted Average Interest Rate	8.125%	0.00%
2026 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 115,000	$ 115,000
Unamortized deferred financing costs	(1,975)	(2,154)
Net carrying amount	$ 113,025	$ 112,846
Weighted Average Interest Rate	5.50%	5.50%
Securitization Trusts \| Secured Debt
Debt Instrument [Line Items]
Commitments - Notes	$ 252,128	$ 283,143
Unamortized deferred financing costs	(3,551)	(4,007)
Net carrying amount	$ 248,577	$ 279,136
Weighted Average Interest Rate	6.85%	6.19%
2025 6.85% Notes \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes		$ 30,000
Unamortized deferred financing costs		(694)
Net carrying amount		$ 29,306
Weighted Average Interest Rate		6.85%

DERIVATIVE INSTRUMENTS - Derivatives Outstanding (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Liability	$ 624
Foreign Exchange Future
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional	25,220	0
Asset	0	0
Liability	$ 624	$ 0
Remaining Maturity	3 months

LOANS HELD FOR INVESTMENT - Credit Quality Indicators (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	$ 43,140
2022	208,677
2021	85,958
2020	34,977
2019	89,396
Prior	237,469
Loans held for investment, at amortized cost, net of deferred fees and costs	166,828	$ 0
Total	699,616
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	4,894
2022	25,378
2021	14,780
2020	834
2019	12,977
Prior	42,310
Loans held for investment, at amortized cost, net of deferred fees and costs	101,172	0
Commercial Real Estate \| Risk Grades 1-4
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	4,894
2022	25,378
2021	14,207
2020	0
2019	12,256
Prior	41,499
Total	98,235
Commercial Real Estate \| Risk Grades 5-6
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	0
2022	0
2021	572
2020	834
2019	720
Prior	811
Total	2,937
Commercial Real Estate \| Risk Grade 7
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Total	0
Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	1,985
2022	9,612
2021	2,510
2020	406
2019	719
Prior	50,031
Loans held for investment, at amortized cost, net of deferred fees and costs	65,262	0
Commercial & Industrial \| Risk Grades 1-4
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	1,985
2022	9,612
2021	2,510
2020	406
2019	0
Prior	47,397
Total	61,909
Commercial & Industrial \| Risk Grades 5-6
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	719
Prior	2,635
Total	3,353
Commercial & Industrial \| Risk Grade 7
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Total	0
SBA 7(a)
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	36,260	172,646
2022	173,688	69,746
2021	68,668	34,711
2020	33,737	74,963
2019	75,700	62,148
Prior	145,128	91,054
Loans held for investment, at amortized cost, net of deferred fees and costs	533,182
Total	532,788	505,268
SBA 7(a) \| Risk Grades 1-4
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	36,260	171,948
2022	171,397	66,113
2021	64,750	34,116
2020	33,614	69,563
2019	66,886	55,376
Prior	118,762	70,669
Total	491,669	467,785
SBA 7(a) \| Risk Grades 5-6
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	0	698
2022	2,291	3,633
2021	3,918	595
2020	123	5,400
2019	8,815	6,772
Prior	26,262	20,273
Total	41,409	37,370
SBA 7(a) \| Risk Grade 7
Accounts, Notes, Loans and Financing Receivable [Line Items]
2023	0	0
2022	0	0
2021	0	0
2020	0	0
2019	0	0
Prior	104	112
Total	$ 104	$ 112

Deposits - Deposits by Type (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Banking and Thrift, Interest [Abstract]
Noninterest-bearing	$ 22,878	$ 0
Interest-bearing:
Checking	784
Money market	25,770
Savings	16,700
Time deposits	181,442
Interest-bearing	224,696	0
Total deposits	247,574	$ 0
Time deposits, money market, and interest-bearing checking obtained through brokers	106,763
Aggregate amount of deposit accounts that exceeded the FDIC limit	13,357
Demand deposit overdrafts reclassified as loan balances	$ 0

INVESTMENTS - Joint Venture Summarized Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Investment Company, Balance Sheet Items [Abstract]
Cash and due from banks	$ 27,349	$ 4,911	$ 53,692	$ 2,397
Restricted cash	72,599	158,543	71,914	$ 184,463
Fair Value	26,382		283,599
Cost	24,674		156,169
Other assets	50,347		28,506
Total assets	1,249,739		998,902
Total liabilities	1,031,701		623,544
Net assets	218,510		375,358
Total liabilities and shareholders' equity	1,249,739		998,902
Investment Company, Income and Expense [Abstract]
Change in presentation		973
Realized gain on derivative transactions	(495)	628
Unrealized loss on derivative transactions	(495)	183
Net decrease in net assets resulting from operations	11,718	9,652
Newtek Conventional Lending, LLC
Investment Company, Balance Sheet Items [Abstract]
Cash and due from banks	554		791
Restricted cash	2,344		2,362
Fair Value	78,493		78,595
Cost	78,785		77,971
Other assets	1,771		1,807
Total assets	83,162		83,555
Bank notes payable	48,154		0
Secured Debt	969		49,273
Other Liabilities	138		1,109
Total liabilities	49,261		50,382
Net assets	33,901		33,173
Total liabilities and shareholders' equity	83,162		83,555
Investment Company, Income and Expense [Abstract]
Interest and other income	1,644	1,761
Total expenses	659	741
Change in presentation	985	1,020
Unrealized depreciation on investments	712	(2,009)
Net decrease in net assets resulting from operations	1,697	(989)
Newtek-TSO JV
Investment Company, Balance Sheet Items [Abstract]
Cash and due from banks	2,939		1,046
Restricted cash	768		498
Fair Value	16,571		22,449
Cost	15,670
Other assets	1,548		2,033
Total assets	21,826		26,026
Bank notes payable	9,250		12,950
Other Liabilities	331		205
Total liabilities	9,581		13,155
Net assets	12,245		12,871
Total liabilities and shareholders' equity	21,826		$ 26,026
Investment Company, Income and Expense [Abstract]
Interest and other income	615	0
Total expenses	550	0
Change in presentation	65	0
Unrealized depreciation on investments	(513)	0
Realized loss on investments	(16)	0
Realized gain on derivative transactions	275	0
Unrealized loss on derivative transactions	(436)	0
Net decrease in net assets resulting from operations	$ (625)	$ 0

INVESTMENTS - Investment Portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Summary of Investment Holdings [Line Items]
Cost	$ 24,674	$ 156,169
Fair Value	26,382	283,599
Non-Control Investments
Summary of Investment Holdings [Line Items]
Cost	1,360	1,360
Fair Value	1,360	1,360
Controlled Investments
Summary of Investment Holdings [Line Items]
Cost	0	131,495
Fair Value	0	258,417
Joint Ventures
Summary of Investment Holdings [Line Items]
Fair Value	25,022	23,022
Non-controlled equity investments \| Non-Control Investments
Summary of Investment Holdings [Line Items]
Cost	1,360	1,360
Fair Value	1,360	1,360
Non-controlled equity investments \| Controlled Investments
Summary of Investment Holdings [Line Items]
Cost	0	99,195
Fair Value	0	241,113
Joint Ventures \| Joint Ventures
Summary of Investment Holdings [Line Items]
Cost	23,314	23,314
Fair Value	25,022	23,022
Debt \| Controlled Investments
Summary of Investment Holdings [Line Items]
Cost	0	32,300
Fair Value	$ 0	$ 18,104

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair value, assets measured on recurring basis, unobservable input reconciliation

The table below provides a roll forward of the Level 3 equity warrant asset fair values.


Equity Warrant Assets	Three Months Ended March 31, 2023
Balance at beginning of period	$	—
New equity warrant assets	311
Changes in fair value, net	(162)
Balance at end of period	$	149

The following tables represents the changes in the investments, servicing assets and liabilities measured at fair value using Level 3 inputs for the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31, 2023
	Held for Investment, at fair value		Controlled Investments		Servicing Assets		Non-Control Investments		Other Real Estate Owned1
Fair value, December 31, 2022	$	505,268	$	258,417	$	30,268	$	1,360	$	3,529
Removal of new entities consolidating in current period	—		(258,417)		—		—		—
Reclass of Loans Held for Sale to Held for Investment	8,745		—		—		—		—

Gain on investments	6,077		—		—		—		(45)
Change in net unrealized depreciation on servicing assets due to changes in valuation inputs or assumptions	—		—		2,654		—		—
Change in net unrealized depreciation on servicing assets due to factors other than changes in valuation inputs or assumptions	—		—		(1,735)		—		—
Realized loss	(7,532)		—		—		—		—
SBA investments, funded	36,859		—		—		—		—


Foreclosed real estate acquired	(694)		—		—		—		674

Purchase of loans from SBA	5,797		—		—		—		—
Sale of investment	—		—		—		—		(641)






Principal payments received on debt investments	(21,732)		—		—		—		—
Additions to servicing assets	—		—		2,164		—		—
Fair value, March 31, 2023	$	532,788	$	—	$	33,351	$	1,360	$	3,516

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.



	Three Months Ended March 31, 2022
	SBA Unguaranteed Investments		Controlled Investments		Servicing Assets		Non-Control Investments		Other Real Estate Owned1
Fair value, December 31, 2021	$	424,417	$	230,935	$	28,008	$	1,000	$	2,354
Net change in unrealized appreciation (depreciation) on investments	(1,990)		297		—		—		(50)
Change in net unrealized appreciation on servicing assets due to changes in valuation inputs or assumptions	—		—		(1,559)		—		—

Realized loss	(1,887)		—		—		—		(36)
SBA unguaranteed non-affiliate investments, funded	39,322		—		—		—		—
Foreclosed real estate acquired	(105)		—		—		—		105
Purchase of investments	—		2,500		—		—		—
Purchase of loans from SBA	—		—		—		—		—
Sale of investment	—		—		—		—		(581)





Return of investment	—		—		—		—		—
Principal payments received on debt investments	(19,752)		—		—		—		—
Additions to servicing assets	—		—		2,406		—		—
Fair value, March 31, 2022	$	440,005	$	233,732	$	28,855	$	1,000	$	1,792

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.

Schedule of fair value, assets and liabilities measured on recurring basis

The following tables present fair value measurements of certain of the Company’s assets and liabilities measured at fair value and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values as of March 31, 2023 and December 31, 2022:


	Fair Value Measurements at March 31, 2023
	Total		Level 1		Level 2		Level 3
Assets:

Debt securities available-for-sale
U.S. Treasury notes	$	29,102	$	29,102	$	—	$	—
Government agency debentures	3,803		—		3,803		—
Loans held for sale, at fair value	125,639		—		125,639		—
Loans held for investment, at fair value	532,788		—		—		532,788
Other real estate owned 1	3,516		—		—		3,516
Non-controlled/affiliate investments	1,360		—		—		1,360
Servicing assets	33,351		—		—		33,351

Joint venture measured at NAV2	25,022		—		—		—
Total assets	$	754,581	$	29,102	$	129,442	$	571,015
Liabilities:
Derivative instruments3	$	624	$	—	$	624	$	—

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.

(2) The Company’s investments in TSO JV and NCL JV are measured at fair value using NAV and have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

(3) Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.


	Fair Value Measurements at December 31, 2022
	Total		Level 1		Level 2		Level 3
Assets:

Loans held for sale, at fair value	$	19,171	—		$	19,171	$	—
Loans held for investment, at fair value	505,268		—		—		505,268
Controlled investments	259,217		—		—		259,217
Other real estate owned1	3,529		—		—		3,529
Non-control investments	1,360		—		—		1,360
Servicing assets	30,268		—		—		30,268
Controlled investments measured at NAV2	23,022		—		—		—
Total assets	$	841,835	$	—	$	19,171	$	799,642

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.

(2) The Company’s investment in TSO JV and NCL JV are measured at fair value using NAV and have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

The carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value on a recurring or non-recurring basis are as follows:


	March 31, 2023
	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Financial Assets:
Cash and due from banks	$	27,349	$	27,349	$	—	$	—	$	27,349
Restricted cash	72,599		72,599		—		—		72,599
Interest bearing deposits in banks	97,196		97,196		—		—		97,196
Total loans held for investment, at amortized cost, net	164,639		—		—		166,433		166,433
Financial Liabilities:
Deposits:	247,574		—		247,574		—		247,574
Borrowings	697,395		—		—		697,395		697,395

	December 31, 2022
	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Financial Assets:
Cash and due from banks	53,692		53,692		$	—	$	—	$	53,692
Restricted cash	71,914		71,914		—		—		71,914
Financial Liabilities:
Borrowings	539,326		—		—		539,326		539,326

Fair value and valuation assumption

The following tables summarizes the fair value and valuation assumptions related to servicing assets at March 31, 2023 and December 31, 2022:


	Servicing Assets			Weighted		Range
Date	Fair Value		Unobservable Input	Average		Minimum		Maximum
March 31, 2023	$	33,351	Discount factor1	14.50	%	14.50	%	14.50	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	20.00	%	20.00	%	20.00	%

December 31, 2022	$	30,268	Discount factor1	16.50	%	16.50	%	16.50	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%

(1) Determined based on risk spreads and observable secondary market transactions.

The following tables provide a summary of quantitative information about the Company’s Level 3 fair value measurements as of March 31, 2023 and December 31, 2022. In addition to the inputs noted in the table below, according to our valuation policy we may also use other valuation techniques and methodologies when determining our fair value measurements. The tables below are not intended to be all-inclusive, but rather provide information on the significant Level 3 inputs as they relate to the Company’s fair value measurements at March 31, 2023 and December 31, 2022.


	Fair Value as of			Weighted		Range
	March 31, 2023		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	102,052	Market yields	7.90	%	7.90	%	7.90	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	250	Market yields	8.87	%	8.87	%	8.87	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%









Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Cost basis	N/A		N/A		N/A



Servicing assets	$	33,351	Market yields	14.50	%	14.50	%	14.50	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	20.00	%	20.00	%	20.00	%
Other real estate owned	$	3,516	Appraised value	N/A		N/A		N/A


	Fair Value as of			Weighted		Range
	December 31, 2022		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	393,910	Market yields	4.50	%	4.50	%	4.50	%
			Cumulative prepayment rate	22.00	%	22.00	%	22.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	30,507	Market yields	4.85	%	4.85	%	4.85	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	208,106	EBITDA multiples-TTM2	8.30x		7.50x		9.00x
			EBITDA multiples-NTM2	7.50x		6.30x		8.25x
			Revenue multiples2	2.67x		1.10x		3.50x
			Weighted average cost of capital2	12.34	%	11.00	%	18.50	%
Controlled debt investments	$	22,828	Market yields	8.52	%	3.80	%	12.00	%
Non-control equity investments	$	1,000	Market yields	9.50	%	8.00	%	12.00	%

Servicing assets	$	30,268	Market yields	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
Other real estate owned	$	3,529	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.

(2) The Company valued $152.8 million of investments using a combination of EBITDA, both trailing twelve months (“TTM”) and next twelve months (“NTM”), and revenue multiples in the overall valuation approach, which included the use of market comparable companies. The Company valued $55.3 million of investments using only discounted cash flows.

Debt Securities Available-for-Sale - Narrative (Details)	Mar. 31, 2023 USD ($)
Investments, Debt and Equity Securities [Abstract]
Accrued interest receivable on available-for-sale securities	$ 0

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2023	May 10, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Securities Act File Number	814-01035
Entity Registrant Name	NEWTEKONE, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	46-3755188
Entity Address, Address Line One	4800 T Rex Avenue
Entity Address, Address Line Two	Suite 120
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33431
City Area Code	212
Local Phone Number	356-9500
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		24,608,631
Entity Central Index Key	0001587987
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Common Stock, par value $0.02 per share
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.02 per share
Trading Symbol	NEWT
Security Exchange Name	NASDAQ
5.75% Notes due 2024
Document Information [Line Items]
Title of 12(b) Security	5.75% Notes due 2024
Trading Symbol	NEWTL
Security Exchange Name	NASDAQ
5.50% Notes due 2026
Document Information [Line Items]
Title of 12(b) Security	5.50% Notes due 2026
Trading Symbol	NEWTZ
Security Exchange Name	NASDAQ

SEGMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of segments

The following tables provide financial information for the Company's segments:


	Banking		Technology		NSBF		Payments		Corporate and Other		Eliminations		Consolidated
March 31, 2023
Interest income	$	3,741	$	—	$	13,214	$	640	$	2,582	$	(1,462)	$	18,715
Interest expense	1,682		246		6,659		966		6,040		(1,461)		14,132
Net interest income	2,059		(246)		6,555		(326)		(3,458)		(1)		4,583
Provision for loan credit losses	1,318		—		—		—		—		—		1,318
Noninterest income	10,217		8,231		19,632		11,065		4,884		(11,242)		42,787
Noninterest expense	13,468		7,719		12,620		7,945		8,218		(10,772)		39,197
Income tax expense (benefit)	(27)		84		20		130		(5,069)		(1)		(4,863)
Net income (loss)	$	(2,483)	$	182	$	13,547	$	2,664	$	(1,723)	$	(470)	$	11,718
Assets	$	383,654	$	27,316	$	768,101	$	51,224	$	639,601	$	(620,158)	$	1,249,739

SERVICING ASSETS

3 Months Ended

Mar. 31, 2023

Transfers and Servicing [Abstract]

SERVICING ASSETS

NOTE 7—SERVICING ASSETS:

Servicing assets are measured at fair value. The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells. As of March 31, 2023 the Company services $1.6 billion in SBA 7(a) loans.

The following tables summarizes the fair value and valuation assumptions related to servicing assets at March 31, 2023 and December 31, 2022:


	Servicing Assets			Weighted		Range
Date	Fair Value		Unobservable Input	Average		Minimum		Maximum
March 31, 2023	$	33,351	Discount factor1	14.50	%	14.50	%	14.50	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	20.00	%	20.00	%	20.00	%

December 31, 2022	$	30,268	Discount factor1	16.50	%	16.50	%	16.50	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%

(1) Determined based on risk spreads and observable secondary market transactions.

Servicing fee income earned for the three months ended March 31, 2023 and 2022 was $4.4 million and $3.2 million, respectively.

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

+ References

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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 4
-Subparagraph (a)(7)
-URI https://asc.fasb.org/extlink&oid=128311188&loc=d3e122739-111746

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 20
-Section 50
-Paragraph 4
-Subparagraph (a)(5)(ii)
-URI https://asc.fasb.org/extlink&oid=121570589&loc=d3e107314-111719

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 2
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=128311188&loc=d3e122596-111746

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 50
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=128311188&loc=d3e122596-111746

+ Details

DIVIDENDS AND DISTRIBUTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended
	Apr. 14, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Distribution of Assets, Liabilities and Stockholders' Equity [Line Items]
Amount Per Share		$ 0.65
Cash Distribution		$ 15,361
DRIP Shares Issued		9,000
DRIP Shares Value		$ 225	$ 72	$ 225
Subsequent Event
Distribution of Assets, Liabilities and Stockholders' Equity [Line Items]
Amount Per Share	$ 0.18
Cash Distribution	$ 4,291
DRIP Shares Issued	6,000
DRIP Shares Value	$ 72
Restricted Stock
Distribution of Assets, Liabilities and Stockholders' Equity [Line Items]
DRIP Shares Issued			4,700	4,100
DRIP Shares Value			$ 100	$ 100

GOODWILL AND INTANGIBLE ASSETS - Goodwill Roll forward (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
NBNYC acquisition	$ 1,279	$ 0
Other goodwill	19,910	0
Total goodwill	$ 21,189	$ 0

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

FAIR VALUE MEASUREMENTS - Level III Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Debt and Equity Securities, Unrealized Gain (Loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Net Unrealized Gains/(Losses)
Unrealized Gain (Loss) On Servicing Assets \| Changes In Valuation Inputs or Adjustments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Unrealized Gain (Loss) On Servicing Assets	Unrealized Gain (Loss) On Servicing Assets
Unrealized Gain (Loss) On Servicing Assets \| Factors Other Than Changes in Valuation Inputs Or Adjustments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Unrealized Gain (Loss) On Servicing Assets
Debt and Equity Securities, Realized Gain (Loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Net gains on sales of loans
SBA investment
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	$ 505,268	$ 424,417
Purchases		5,797
Reclass of Loans Held for Sale to Held for Investment	8,745
Funded	36,859	39,322
Sales	(694)	(105)
Settlements	(21,732)	(19,752)
Fair value, ending balance	532,788	440,005
SBA investment \| Debt and Equity Securities, Unrealized Gain (Loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings	6,077	(1,990)
SBA investment \| Debt and Equity Securities, Realized Gain (Loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings	(7,532)	(1,887)
Investments \| Controlled Investments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	258,417	230,935
Removal of new entities consolidating in current period	(258,417)
Purchases		2,500
Gain (loss) included in earnings		297
Fair value, ending balance	0	233,732
Investments \| Non-Control Investments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	1,360	1,000
Fair value, ending balance	1,360	1,000
Servicing assets
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	30,268	28,008
Purchases	2,164	2,406
Fair value, ending balance	33,351	28,855
Servicing assets \| Changes In Valuation Inputs or Adjustments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings	2,654	(1,559)
Servicing assets \| Factors Other Than Changes in Valuation Inputs Or Adjustments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings	(1,735)
Other Real Estate Owned
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	3,529	2,354
Purchases	674	105
Gain (loss) included in earnings	(45)
Sales	(641)	(581)
Fair value, ending balance	$ 3,516	1,792
Other Real Estate Owned \| Debt and Equity Securities, Unrealized Gain (Loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings		(50)
Other Real Estate Owned \| Debt and Equity Securities, Realized Gain (Loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings		$ (36)

GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

NOTE 8—GOODWILL AND INTANGIBLE ASSETS:

Goodwill

The following table summarizes changes in the carrying amount of goodwill:


(in thousands)	March 31, 2023		December 31, 2022
NBNYC acquisition	$	1,279	$	—
Other goodwill	19,910		$	—
Total goodwill	$	21,189	$	—

Other goodwill results from the Company’s filing with the SEC on January 6, 2023 of a Form N-54C, Notification of Withdrawal of Election to be Subject to the 1940 Act, and has ceased to be a BDC effective as of January 6, 2023. As a result of the Acquisition, the Company is now a financial holding company subject to the regulation and supervision of the Federal Reserve and the Federal Reserve Bank of Atlanta. The Company no longer qualifies as a regulated investment company (RIC) for federal income tax purposes and no longer qualifies for accounting treatment as an investment company. As a result, in addition to Newtek Bank and its consolidated subsidiaries, NBL and SBL, the following NewtekOne portfolio companies and subsidiaries are now consolidated non-bank subsidiaries in the Company’s financial statements: NSBF; Newtek Merchant Solutions, LLC; Mobil Money, LLC; CDS Business Services, Inc. d/b/a Newtek Business Credit Solutions; PMTWorks Payroll, LLC d/b/a Newtek Payroll and Benefits Solutions; Newtek Insurance Agency, LLC; Titanium Asset Management LLC; Newtek Business Services Holdco 6, Inc; Newtek Commercial Lending, Inc.; Excel WebSolutions, LLC; Newtek Technology Solutions, Inc. and POS on Cloud, LLC, d/b/a Newtek Payment Systems.

Intangible Assets

The following table summarizes intangible assets:


	March 31, 2023						December 31, 2022
	Gross carrying Amount		Accumulated Amortization		Net Carrying amount		Gross carrying Amount		Accumulated Amortization		Net Carrying amount
Core Deposits	$	1,040	$	(51)	$	989	$	—	$	—	$	—
Customer lists	17,385		(11,463)		5,923		—		—		—
Total intangible assets	$	18,425	$	(11,514)	$	6,912	$	—	$	—	$	—

Amortization expense for the three months ended March 31, 2023 was $0.4 million. There was no amortization expense for the three months ended March 31, 2022.

The remaining estimated aggregate future amortization expense for intangible assets as of March 31, 2023 is as follows:


	Amortization Expense
Remainder of 2023	$	1,207
2024	982
2025	948
2026	928
2027	907
Thereafter	1,940
	$	6,912

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Joint ventures, cost	$ 23,314	$ 23,314
Investments, cost	$ 24,674	$ 156,169
Preferred stock, par value (in dollars per share)	$ 0.02
Preferred stock, shares authorized (in shares)	20,000,000
Preferred stock, shares issued (in shares)	20,000,000
Preferred stock, shares outstanding (in shares)	0
Common stock, par value (in dollars per share)	$ 0.02	$ 0.02
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	24,609,000	24,609,000
Common shares outstanding at end of period (in shares)	24,609,000	24,609,000
Controlled Investments
Investments, cost	$ 0	$ 131,495
Non-Control Investments
Investments, cost	$ 1,360	$ 1,360

INVESTMENTS

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

NOTE 4—INVESTMENTS:

Investments consisted of the following at:


	March 31, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Non-controlled equity investments	1,360		1,360		1,360		1,360
Joint Ventures	23,314		25,022		23,314		23,022
Controlled investments:
Equity	—		—		99,195		241,113
Debt	—		—		32,300		18,104
Total investments	$	24,674	$	26,382	$	156,169	$	283,599

The Company’s Non-Conforming Conventional Loan Program

Newtek Conventional Lending, LLC (NCL JV): On May 20, 2019, the Company and its joint venture partner launched NCL JV to provide non-conforming conventional commercial and industrial term loans to U.S. middle-market companies and small businesses. NCL JV is a 50/50 joint venture between NCL a wholly-owned subsidiary of Newtek, and Conventional Lending TCP Holding, LLC, a wholly-owned, indirect subsidiary of BlackRock TCP Capital Corp. (Nasdaq: TCPC). NCL JV ceased funding new non-conventional conforming loans during 2020. On January 28, 2022, NCL JV closed a conventional commercial loan securitization with the sale of $56.3 million of Class A Notes, NCL Business Loan Trust 2022-1, Business Loan-Backed Notes, Series 2022-1, secured by a segregated asset pool consisting primarily of NCL JV’s portfolio of conventional commercial business loans, including loans secured by liens on commercial or residential mortgaged properties, originated by NCL JV and NBL. The Notes were rated “A” (sf) by DBRS Morningstar. The Notes were priced at a yield of 3.209%. The proceeds of the securitization were used, in part, to repay the Deutsche Bank credit facility and return capital to the NCL JV partners.

The following tables show certain summarized financial information for NCL JV:


Selected Statement of Assets and Liabilities Information	March 31, 2023		December 31, 2022
	(Unaudited)
Cash	$	554	$	791
Restricted cash	2,344		2,362
Investments in loans, at fair value (amortized cost of $77,971 and $78,785, respectively)	78,493		78,595
Other Assets	1,771		1,807
Total assets	$	83,162	$	83,555

Bank notes payable	$	48,154	$	—
Securitization notes payable	969		49,273
Other liabilities	138		1,109
Total liabilities	49,261		50,382

Net assets	33,901		33,173
Total liabilities and net assets	$	83,162	$	83,555


Selected Statements of Operations Information	Three Months Ended March 31,
		2023		2022


Interest and other income		$	1,644	$	1,761
Total expenses		659		741
Net investment income		985		1,020
Unrealized appreciation (depreciation) on investments		712		(2,009)
Net increase (decrease) in net assets resulting from operations		$	1,697	$	(989)

Newtek-TSO II Conventional Credit Partners, LP (TSO JV): On August 5, 2022, NCL and TSO II Booster Aggregator, L.P. (“TSO II”) entered into a joint venture, TSO JV, governed by the Amended and Restated Limited Partnership Agreement for the TSO JV. TSO JV began making investments during the fourth quarter of 2022. NCL and TSO II each committed to contribute an equal share of equity funding to the TSO JV and each have equal voting rights on all material matters. TSO JV intends to deploy capital over the course of time with additional leverage supported by a warehouse line of credit. The intended purpose of TSO JV is to invest in non-conforming conventional commercial and industrial term loans made to middle-market companies as well as small businesses.

The following tables show certain summarized financial information for TSO JV:


Selected Statement of Assets and Liabilities Information	March 31, 2023		December 31, 2022
	(Unaudited)
Cash	$	2,939	$	1,046
Restricted cash	768		498
Investments in loans, at fair value (amortized cost of $15,670)	16,571		22,449
Other assets	$	1,548	$	2,033
Total assets	$	21,826	$	26,026

Bank notes payable	$	9,250	$	12,950


Other liabilities	331		205
Total liabilities	9,581		13,155

Net assets	12,245		12,871
Total net assets	$	21,826	$	26,026


Selected Statements of Operations Information	Three Months Ended March 31,
	2023		2022
Interest and other income	$	615	$	—
Total expenses	550		—
Net investment income	65		—
Unrealized depreciation on investments	(513)		—
Realized loss on investments	(16)		—
Realized gain on derivative transactions	275		—
Unrealized loss on derivative transactions	(436)		—
Net decrease in net assets resulting from operations	$	(625)	$	—

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2023

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS

NOTE 6—TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS:

Transactions with Affiliated Companies

An affiliated company is an unconsolidated entity in which the Company has an ownership of 5% or more of its voting securities. Transactions related to our joint ventures and non-controlled investments for the three months ended March 31, 2023 were as follows:


Company	Fair Value at December 31, 2022		Purchases (Cost)		Principal Received		Net Realized Gains/(Losses)		Net Unrealized Gains/(Losses)		Fair Value at March 31, 2023		Interest and Other Income		Dividend Income
Joint Ventures
Newtek Conventional Lending, LLC	$	16,587	$	—	$	—	$	—	$	2,315	$	18,900	$	—	$	484
Newtek TSO II Conventional Credit Partners, LP	6,435		—		—		—		(313)		6,122		—		—
Total Joint Ventures	$	23,022	$	—	$	—	$	—	$	2,002	$	25,022	$	—	$	484

Non-Control Investments
EMCAP Loan Holdings, LLC	$	1,000	$	—	$	—	$	—	$	—	$	1,000	$	—	$	20
Biller Genie Software, LLC	360		—		—		—		—		360		—		—
Total Non-Control Investments	$	1,360	$	—	$	—	$	—	$	—	$	1,360	$	—	$	20

Total Affiliate Investments	$	24,382	$	—	$	—	$	—	$	2,002	$	26,382	$	—	$	504

Amounts due from affiliated companies was $0.1 million and $1.3 million at March 31, 2023 and December 31, 2022, respectively, and are included within Other assets. Amounts due to related parties were $0.0 million and $1.2 million at March 31, 2023 and December 31, 2022, respectively, and are included within Other Liabilities.

During the quarter ended March 31, 2023, Newtek Business Services Holdco 6, Inc purchased a loan from Newtek Conventional Lending, LLC for $5.3 million.

EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of earnings per share

The following table summarizes the calculations for earnings per share for the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31,
		2023			2022
		($)		(%)	($)		(%)
Net income		$	11,718		$	9,652
Dividends to preferred shareholders		(249)			—
Net income available to common shareholders		11,469			9,652
Dividends to common shareholders		4,363			n/a
Undistributed Net Income		7,106			n/a

Distributed Net Income - Common		$	4,363		n/a
Distributed Net Income - Series A Convertible Preferred		$	249		n/a

Allocation of Undistributed Net Income - Common		$	6,937	97.6%	n/a		n/a
Allocation of Undistributed Net Income - Series A Convertible Preferred		$	169	2.4%	n/a		n/a

Basic EPS		$	0.46		$	0.40
Weighted average shares outstanding		24,609			24,156
Adjustments to weighted average shares outstanding:
Preferred stock(1)		598			—
Warrants(2)		30			—
Total adjustments to weighted average shares outstanding		628			—

Diluted weighted average shares outstanding		25,237			n/a
Diluted EPS		$	0.46		n/a

(1) On February 3, 2023, we entered into a Securities Purchase Agreement with Patriot Financial Partners IV, L.P., and Patriot Financial Partners Parallel IV, L.P. in respect of 20,000 shares of the Company’s Series A Convertible Preferred Stock, par value $0.02 per share, in a private placement transaction. The aggregate purchase price was $20.0 million. Each share of Series A Preferred Stock was issued at a price of $1,000 per share and is convertible at the holder’s option into 47.54053782 shares of the Company’s Common Stock.

(2) The Company issued warrants to Patriot to purchase, in the aggregate, 47,540 shares of Common Stock for $21.03468 per share. The Warrants are exercisable in whole or in part until the ten year anniversary of the closing of the transaction and may be exercised for cash or on a “net share” basis, with the number of shares withheld determined based on the closing price of the Common Stock on the date of such exercise.

SEGMENTS (Details) $ in Thousands	3 Months Ended
SEGMENTS (Details) $ in Thousands	Mar. 31, 2023 USD ($) segment	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| segment	4
Interest income	$ 18,715	$ 7,743
Total interest expense	14,132	4,667
Net interest income	4,583	3,076
Provision for loan credit losses	1,318	0
Noninterest income	42,787	22,228
Noninterest expense	39,197	14,709
Income tax (benefit) expense	(4,863)	943
Net income	11,718	$ 9,652
Collateralized deposit	1,249,739		$ 998,902
Operating Segments \| Banking
Segment Reporting Information [Line Items]
Interest income	3,741
Total interest expense	1,682
Net interest income	2,059
Provision for loan credit losses	1,318
Noninterest income	10,217
Noninterest expense	13,468
Income tax (benefit) expense	(27)
Net income	(2,483)
Collateralized deposit	383,654
Operating Segments \| Technology
Segment Reporting Information [Line Items]
Interest income	0
Total interest expense	246
Net interest income	(246)
Provision for loan credit losses	0
Noninterest income	8,231
Noninterest expense	7,719
Income tax (benefit) expense	84
Net income	182
Collateralized deposit	27,316
Operating Segments \| NSBF
Segment Reporting Information [Line Items]
Interest income	13,214
Total interest expense	6,659
Net interest income	6,555
Provision for loan credit losses	0
Noninterest income	19,632
Noninterest expense	12,620
Income tax (benefit) expense	20
Net income	13,547
Collateralized deposit	768,101
Operating Segments \| Payments
Segment Reporting Information [Line Items]
Interest income	640
Total interest expense	966
Net interest income	(326)
Provision for loan credit losses	0
Noninterest income	11,065
Noninterest expense	7,945
Income tax (benefit) expense	130
Net income	2,664
Collateralized deposit	51,224
Corporate and Other
Segment Reporting Information [Line Items]
Interest income	2,582
Total interest expense	6,040
Net interest income	(3,458)
Provision for loan credit losses	0
Noninterest income	4,884
Noninterest expense	8,218
Income tax (benefit) expense	(5,069)
Net income	(1,723)
Collateralized deposit	639,601
Eliminations
Segment Reporting Information [Line Items]
Interest income	1,462
Total interest expense	1,461
Net interest income	1
Provision for loan credit losses	0
Noninterest income	11,242
Noninterest expense	10,772
Income tax (benefit) expense	1
Net income	470
Collateralized deposit	$ 620,158

COMMITMENTS AND CONTINGENCIES - Obligations and Commitments Under Operating Lease and Employment Agreements (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Operating Leases
2023	$ 2,163
2024	2,820
2025	2,585
2026	2,035
2027	479
Thereafter	0
Total	10,082
Employment Agreement
2023	2,131
2024	363
2025	0
2026	0
2027	0
Thereafter	0
Total	2,494
Total
2023	4,294
2024	3,183
2025	2,585
2026	2,035
2027	479
Thereafter	0
Total	$ 12,576

GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying Amount	$ 18,425	$ 0
Accumulated Amortization	(11,514)	0
Net Carrying amount	6,912	0
Core Deposits
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying Amount	1,040	0
Accumulated Amortization	(51)	0
Net Carrying amount	989	0
Customer lists
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying Amount	17,385	0
Accumulated Amortization	(11,463)	0
Net Carrying amount	$ 5,923	$ 0

SIGNIFICANT ACCOUNTING POLICIES - Cash and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and due from banks	$ 27,349	$ 53,692	$ 4,911	$ 2,397
Restricted cash	72,599	71,914	158,543	184,463
Interest bearing deposits in banks	97,196	0	0	0
Total cash and cash equivalents	$ 197,144	$ 125,606	$ 163,454	$ 186,860

SERVICING ASSETS (Tables)

3 Months Ended

Mar. 31, 2023

Transfers and Servicing [Abstract]

Fair value and valuation assumption

The following tables summarizes the fair value and valuation assumptions related to servicing assets at March 31, 2023 and December 31, 2022:


	Servicing Assets			Weighted		Range
Date	Fair Value		Unobservable Input	Average		Minimum		Maximum
March 31, 2023	$	33,351	Discount factor1	14.50	%	14.50	%	14.50	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	20.00	%	20.00	%	20.00	%

December 31, 2022	$	30,268	Discount factor1	16.50	%	16.50	%	16.50	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%

(1) Determined based on risk spreads and observable secondary market transactions.


	Fair Value as of			Weighted		Range
	March 31, 2023		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	102,052	Market yields	7.90	%	7.90	%	7.90	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	250	Market yields	8.87	%	8.87	%	8.87	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%









Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Cost basis	N/A		N/A		N/A



Servicing assets	$	33,351	Market yields	14.50	%	14.50	%	14.50	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	20.00	%	20.00	%	20.00	%
Other real estate owned	$	3,516	Appraised value	N/A		N/A		N/A


	Fair Value as of			Weighted		Range
	December 31, 2022		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	393,910	Market yields	4.50	%	4.50	%	4.50	%
			Cumulative prepayment rate	22.00	%	22.00	%	22.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	30,507	Market yields	4.85	%	4.85	%	4.85	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	208,106	EBITDA multiples-TTM2	8.30x		7.50x		9.00x
			EBITDA multiples-NTM2	7.50x		6.30x		8.25x
			Revenue multiples2	2.67x		1.10x		3.50x
			Weighted average cost of capital2	12.34	%	11.00	%	18.50	%
Controlled debt investments	$	22,828	Market yields	8.52	%	3.80	%	12.00	%
Non-control equity investments	$	1,000	Market yields	9.50	%	8.00	%	12.00	%

Servicing assets	$	30,268	Market yields	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
Other real estate owned	$	3,529	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.

INVESTMENTS - Narrative (Details) - USD ($) $ in Millions	Jan. 28, 2022	May 20, 2019
Newtek Conventional Lending, LLC
Summary of Investment Holdings [Line Items]
Investment sale	$ 56.3
Yield percentage	3.209%
Newtek Conventional Lending, LLC \| Newtek Commercial Lending
Summary of Investment Holdings [Line Items]
Joint venture ownership percentage		50.00%
Newtek Conventional Lending, LLC \| Conventional Lending TCP Holding
Summary of Investment Holdings [Line Items]
Joint venture ownership percentage		50.00%

DERIVATIVE INSTRUMENTS - Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Unrealized Appreciation/(Depreciation)	$ (495)	$ 183
Realized Gain/(Loss)	(495)	628
Foreign Exchange Future
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Unrealized Appreciation/(Depreciation)	(693)	183
Realized Gain/(Loss)	$ 197	$ 445

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net income	$ 11,718	$ 9,652
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Net (gain) loss on loans accounted for under the fair value option	(5,905)	2,718
Net unrealized (appreciation) depreciation on servicing assets	(919)	1,559
Net unrealized depreciation (appreciation) on derivative transactions	495	(183)
Net gains on loans held for sale	(6,526)	(12,889)
Amortization of deferred financing costs	1,249	553
Allowance for credit losses on loans	(1,318)	0
Deferred income taxes	(4,863)	943
Depreciation and amortization	873	63
Proceeds from sale of loans held for sale	121,575	99,646
Purchase of loans held for sale	(5,797)	0
Funding of investments	(156,742)	(124,019)
Principal received on loans held for sale	1,347	19,754
Return of investment from controlled investments	0	9,741
Other, net	739	863
Changes in operating assets and liabilities:
Settlement receivable	(41,427)	27,812
Capitalized servicing asset	(2,164)	(2,406)
Due to/from related parties	37	(1,325)
Other assets	6,655	2,189
Due to participants	(7,447)	(28,766)
Accounts payable, accrued expenses and other liabilities	(20,603)	910
Other, net	(39)	9
Net cash (used in) provided by operating activities	(116,359)	6,478
Cash flows from investing activities:
Net increase in loans held for investment, at fair value	(7,595)	0
Net increase in loans held for investment, at cost	269
Purchase of fixed assets	(165)	0
Net increase in Federal Home Loan Bank stock	242	0
Purchases of available-for-sale securities	(27,901)	0
Acquisitions, net of cash acquired	11,252	0
Net cash used in investing activities	(23,898)	0
Cash flows from financing activities:
Net borrowings on bank notes payable	47,274	0
Net increase in deposits	105,933	0
Repayment of Federal Home Loan Bank advances	(3,699)	0
Proceeds from preferred stock, net of offering costs	19,493	0
Net repayments under related party line of credit	0	(11,450)
Payments on Notes Payable - Securitization Trusts	(31,015)	(17,144)
Dividends paid	0	(15,360)
Additions to deferred financing costs	(1,087)	(450)
Purchase of vested stock for employee payroll tax withholding	0	(480)
Net cash provided by (used in) financing activities	186,899	(29,884)
Net increase (decrease) in cash and restricted cash	46,642	(23,406)
Cash and restricted cash—beginning of period (Note 2)	125,606	186,860
Consolidation of cash from controlled investments	24,896	0
Cash and restricted cash—end of period (Note 2)	197,144	163,454
Non-cash operating, investing and financing activities:
Foreclosed real estate acquired	694	105,245
Dividends declared but not paid during the period	4,363	2,541
Issuance of common shares under dividend reinvestment plan	72	225
2025 5.00% Notes
Cash flows from financing activities:
Proceeds from Notes	0	15,000
2025 8.13% Notes
Cash flows from financing activities:
Proceeds from Notes	50,000	0
Controlled Investments
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Net unrealized (appreciation) depreciation on investments	0	(297)
Funding of investments	0	(2,500)
Joint Ventures
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Net unrealized (appreciation) depreciation on investments	(2,002)	2,321
Affiliate Investments
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Net unrealized (appreciation) depreciation on investments	(2,002)
Purchase of loans from affiliate	$ (5,295)	$ 0

STOCK BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 0.7	$ 0.8
Restricted Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unrecognized compensation expense	$ 5.1
Remaining weighed-average period	2 years 3 months 18 days
Restricted Stock \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting period	1 year
Restricted Stock \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting period	3 years

BORROWINGS (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of long-term debt instruments

At March 31, 2023 and December 31, 2022, the Company had borrowings composed of the following:


	March 31, 2023						December 31, 2022
	Commitments		Borrowings Outstanding		Weighted Average Interest Rate		Commitments		Borrowings Outstanding		Weighted Average Interest Rate
Bank Lines of Credit:
Capital One line of credit - guaranteed1	$	150,000	$	46,150	7.25	%	$	150,000	$	10,500	6.75	%
Capital One line of credit - unguaranteed1	—		67,603		8.25	%	—		45,385		7.75	%
Webster NMS Note	39,871		39,538		7.27	%	—		—		—
Webster CDS Line of Credit	5,000		2,180		8.00	%	—		—		—
SPV II Deutsche Bank Facility	150,000		6,933		7.42	%	—		—		—
SPV I Capital One Facility	20,000		18,882		9.00	%	—		—		—
SPV III One Florida Bank Facility	50,000		13,613		9.30	%	—		—		—
FHLB Advances	24,531		24,531		2.20	%	—		—		—
Notes:
2024 Notes	38,250		37,958		5.75	%	38,250		37,903		5.75	%
2025 5.00% Notes	30,000		29,365		5.00	%	30,000		29,306		5.00
2025 8.125% Notes	50,000		49,040		8.13	%	—		—		—	%
2026 Notes	115,000		113,025		5.50	%	115,000		112,846		5.50	%
Notes payable - related parties	—		—		—	%	50,000		24,250		6.72	%
Notes payable - Securitization Trusts	252,128		248,577		6.85	%	283,143		279,136		6.19	%
Total	$	924,780	$	697,395	6.69	%	$	666,393	$	539,326	6.11	%

(1) Total combined commitments of the guaranteed and unguaranteed lines of credit were $150.0 million at March 31, 2023 and December 31, 2022.

(2) 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 net proceeds from the sale of the notes were approximately $48.94 million, after deducting estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the sale of the Notes for general corporate purposes, including payment of expenses incurred in connection with the issuance of the notes and other working capital purposes. 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.

Outstanding borrowings under the 2024 Notes, 2025 Notes, 2026 Notes, bank lines of credit, and Notes payable - Securitization Trusts consisted of the following:


	March 31, 2023
	Webster NMS Note		Webster CDS Line of Credit		SPV II Deutsche Bank Facility		SPV I Capital One Facility		SPV III One Florida Bank Facility		2024 Notes		2025 5.00% Notes		2025 8.125% Notes		2026 Notes		Notes Payable- Securitization Trusts
Principal balance	$	39,871	$	2,180	$	7,123	$	19,347	$	13,698	$	38,250	$	30,000	$	50,000	$	115,000	$	252,128
Unamortized deferred financing costs	(333)		—		(190)		(465)		(84)		(292)		(635)		(960)		(1,975)		(3,551)
Net carrying amount	$	39,538	$	2,180	$	6,933	$	18,882	$	13,613	$	37,958	$	29,365	$	49,040	$	113,025	$	248,577

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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-SubTopic 10
-Section S99
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-Subparagraph (SX 210.12-04(a))
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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+ Details

LOANS HELD FOR INVESTMENT

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

LOANS HELD FOR INVESTMENT

NOTE 5—LOANS HELD FOR INVESTMENT:

Loans held for investment included SBA 7(a) investments as well as mortgage and commercial loans originated by Newtek Bank. The following tables shows the Company’s loan portfolio by industry for loans held for investment, at fair value and loans held for investment, at amortized cost:


	Loans Held for Investment, at Fair Value
	March 31, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Food Services and Drinking Places	$	51,194	$	49,014	$	48,551	$	48,796
Specialty Trade Contractors	46,513		46,513		42,330		38,314
Professional, Scientific, and Technical Services	42,815		42,374		41,066		39,287
Ambulatory Health Care Services	31,640		30,070		28,900		26,879
Merchant Wholesalers, Durable Goods	23,905		23,905		22,219		22,059
Amusement, Gambling, and Recreation Industries	24,828		24,339		24,743		25,917
Administrative and Support Services	24,186		24,186		23,400		21,249
Accommodation	10,673		10,673		11,476		10,428
Repair and Maintenance	18,701		18,618		17,108		17,280
Merchant Wholesalers, Nondurable Goods	18,622		18,344		19,501		18,637
Truck Transportation	22,100		22,100		23,846		18,245
Personal and Laundry Services	14,167		13,692		13,763		14,183
Fabricated Metal Product Manufacturing	13,011		13,011		14,190		14,739
Construction of Buildings	12,519		11,907		11,978		10,973
Real Estate	4,045		4,045		3,837		3,380
Motor Vehicle and Parts Dealers	11,377		11,377		10,186		9,651
Social Assistance	10,155		10,057		9,282		9,993
Building Material and Garden Equipment and Supplies Dealers	9,509		8,705		12,760		11,427
Food and Beverage Stores	8,691		8,424		5,789		5,935
Food Manufacturing	10,972		10,784		10,830		8,951
Rental and Leasing Services	8,643		7,693		8,158		8,448
Transportation Equipment Manufacturing	8,688		8,688		8,272		8,445
Support Activities for Mining	9,940		9,940		10,426		8,615
Nursing and Residential Care Facilities	6,322		6,322		8,187		8,697
Other	111,020		111,020		101,995		94,740
Total	$	554,236	$	532,788	$	532,793	$	505,268


	Loans Held for Investment, at Amortized Cost
	March 31, 2023		December 31, 2022
Commercial Real Estate	$	101,172	$	—
Commercial & Industrial	65,262		—
SBA 7(a)	394		—
Total	$	166,828	$	—

Past Due and Non-Accrual Loans

The following tables summarize the aging of accrual and non-accrual loans by class:


	As of March 31, 2023
		30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		90 or more Days Past Due and Accruing		Non- accrual		Total past Due and Non-accrual		Current		Total Carried at Amortized Cost		Loans Accounted for Under the Fair Value Option		Total Loans
Commercial Real Estate		$	14,652	$	—	$	—	$	—	$	14,652	$	85,995	$	100,647	$	—	$	100,647
Commercial & Industrial		11,487		1,820		4,454		2,635		20,395		45,912		66,307		—		66,307
SBA 7(a)		42,197		3,102		—		39,745		85,044		447,744		—		532,788		532,788
Total Loans		68,336		4,922		4,454		42,380		120,091		579,651		166,954		532,788		699,742
Net deferred fees		—		—		—		—		—		—		(127)		—		(127)
Allowance for credit losses		$	—	$	—	$	—	$	—	$	—	$	—	$	(2,189)	$	—	$	(2,189)
Total		$	68,336	$	4,922	$	4,454	$	42,380	$	120,092	$	579,651	$	164,638	$	532,788	$	697,426


	As of December 31, 2022
		30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		90 or more Days Past Due and Accruing		Non- accrual		Total past Due and Non-accrual		Current		Total Carried at Amortized Cost		Loans Accounted for Under the Fair Value Option		Total Loans


SBA 7(a)		$	18,681	$	12,754	$	—	$	34,432	$	65,867	$	439,401	$	—	$	505,268	$	505,268

The Company identified two loans that did not share similar risk characteristics with the loan segments identified in NOTE 2—SIGNIFICANT ACCOUNTING POLICIES and evaluated them for impairment individually. The unpaid contractual principal balance and recorded investment with no allowance for the loans individually assessed were $4.6 million, respectively, given there were no charge-offs during the three months ended March 31, 2023.

Credit Quality Indicators

The Bank uses internal loan reviews to assess the performance of individual loans. An independent review of the loan portfolio is performed annually by an external firm. The goal of the Bank’s annual review of each borrower’s financial performance is to validate the adequacy of the risk grade assigned.

The Bank uses a grading system to rank the quality of each loan and lease. The grade is periodically evaluated and adjusted as performance dictates. Loan and lease grades 1 through 4 are passing grades and grade 5 is special mention. Collectively, grades 6 through 7 represent classified loans in the Bank’s portfolio. The following guidelines govern the assignment of these risk grades:

Exceptional (1 Rated): These loans are of the highest quality, with strong, well-documented sources of repayment. These loans and leases will typically have multiple demonstrated sources of repayment with no significant identifiable risk to collection, exhibit well-qualified management, and have liquid financial statements relative to both direct and indirect obligations.

Quality (2 Rated): These loans are of very high credit quality, with strong, well-documented sources of repayment. These loans and leases exhibit very strong, well defined primary and secondary sources of repayment, with no significant identifiable risk of collection and have internally generated cash flow that more than adequately covers current maturities of long-term debt.

Satisfactory (3 Rated): These loans exhibit satisfactory credit risk and have excellent sources of repayment, with no significant identifiable risk of collection. These loans and leases have documented historical cash flow that meets or exceeds required minimum Bank guidelines, or that can be supplemented with verifiable cash flow from other sources. They have adequate secondary sources to liquidate the debt, including combinations of liquidity, liquidation of collateral, or liquidation value to the net worth of the borrower or guarantor.

Acceptable (4 Rated): These loans show signs of weakness in either adequate sources of repayment or collateral but have demonstrated mitigating factors that minimize the risk of delinquency or loss. These loans and leases may have unproved, insufficient or marginal primary sources of repayment that appear sufficient to service the debt at this time. Repayment weaknesses may be due to minor operational issues, financial trends, or reliance on projected performance. They may also contain marginal or unproven secondary sources to liquidate the debt, including combinations of liquidation of collateral and

liquidation value to the net worth of the borrower or guarantor.

Special mention (5 Rated): These loans show signs of weaknesses in either adequate sources of repayment or collateral. These loans and leases may contain underwriting guideline tolerances and/or exceptions with no mitigating factors; and/or instances where adverse economic conditions develop subsequent to origination that do not jeopardize liquidation of the debt but substantially increase the level of risk.

Substandard (6 Rated): Loans graded Substandard are inadequately protected by current sound net worth, paying capacity of the obligor, or pledged collateral. Loans and leases classified as Substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These loans and leases are consistently not meeting the repayment schedule.

Doubtful (7 Rated): Loans graded Doubtful have all the weaknesses inherent in those classified as Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. The ability of the borrower to service the debt is extremely weak, overdue status is constant, the debt has been placed on non-accrual status, and no definite repayment schedule exists. Once the loss position is determined, the amount is charged off.

Loss (8 Rated): Loss rated loans are considered uncollectible and of such little value that their continuance as assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this credit even though partial recovery may be affected in the future.

The following tables present asset quality indicators by portfolio class and origination year.


		Term Loans Held for Investment by Origination Year
		2023		2022		2021		2020		2019		Prior		Total
Commercial Real Estate	Portfolio segments
Risk Grades 1-4		$	4,894	$	25,378	$	14,207	$	—	$	12,256	$	41,499	$	98,235
Risk Grades 5-6		—		—		572		834		720		811		2,937
Risk Grade 7		—		—		—		—		—		—		—
Total		$	4,894	$	25,378	$	14,780	$	834	$	12,977	$	42,310	$	101,172

Commercial & Industrial
Risk Grades 1-4		1,985		9,612		2,510		406		—		47,397		61,909
Risk Grades 5-6		—		—		—		—		719		2,635		3,353
Risk Grade 7		—		—		—		—		—		—		—
Total		$	1,985	$	9,612	$	2,510	$	406	$	719	$	50,031	$	65,262

SBA 7(a)
Risk Grades 1-4		36,260		171,397		64,750		33,614		66,886		118,762		491,669
Risk Grades 5-6		—		2,291		3,918		123		8,815		26,262		41,409
Risk Grade 7		—		—		—		—		—		104		104
Total		36,260		173,688		68,668		33,737		75,700		145,128		533,182
Total		$	43,140	$	208,677	$	85,958	$	34,977	$	89,396	$	237,469	$	699,616

		Term Loans Held for Investment by Origination Year
December 31, 2022		2022		2021		2020		2019		2018		Prior		Total
SBA 7(a)	Portfolio segments
Risk Grades 1-4		$	171,948	$	66,113	$	34,116	$	69,563	$	55,376	$	70,669	$	467,785
Risk Grades 5-6		698		3,633		595		5,400		6,772		20,273		37,370
Risk Grade 7		—		—		—		—		—		112		112
Total		$	172,646	$	69,746	$	34,711	$	74,963	$	62,148	$	91,054	$	505,268

Allowance for Credit Losses

See NOTE 2—SIGNIFICANT ACCOUNTING POLICIES for a description of the methodologies used to estimate the ACL.

The following table details activity in the ACL for the three month period ended March 31, 2023:


	March 31, 2023
	Commercial Real Estate		Commercial & Industrial		SBA 7(a)		Total
Beginning Balance	$	—	$	—	$	—	$	—
Adjustment to Beginning Balance due to PCD marks1	775		96				871
Charge offs	—		—		—		—
Recoveries	—		—		—		—
Provision	1,185		127		6		1,318
Ending Balance	$	1,960	$	223	$	6	$	2,189

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

The Company did not make any loan modifications to borrowers experiencing financial difficulty that would require disclosure, such as principal forgiveness, term extension, or interest rate reductions as of the period ended March 31, 2023. Additionally there were no troubled debt restructurings under legacy U.S. GAAP as of the period ended December 31, 2022.

SUBSEQUENT EVENTS (Details) $ in Millions	Apr. 13, 2023 USD ($)
Subsequent Event
Subsequent Event [Line Items]
SBA Obligations, Secured Fund	$ 10

BUSINESS COMBINATION - Narrative (Details) - USD ($) $ in Thousands	Jan. 06, 2023	Mar. 31, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill		$ 21,189	$ 0
NBNYC
Business Acquisition [Line Items]
Acquisition consideration	$ 20,000
Acquisition costs	1,300
Contributions to subsidiary	31,000
Transaction costs		$ 200
Goodwill	$ 1,279

- Definition

+ References + Details

INCOME TAXES	3 Months Ended
INCOME TAXES	Mar. 31, 2023
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 18—INCOME TAXES: The Company elected to be treated as a RIC under the Code beginning with the 2015 tax year and, through the year ended December 31, 2022, operated in a manner so as to continue to qualify for the tax treatment applicable to RICs. The RIC tax return for the year ended December 31, 2022 will include the Company and NSBF, a single member LLC disregarded for tax purposes. None of the Company’s other subsidiaries will be included in the RIC tax return. As a RIC, the Company was required to pay a 4% excise tax if it did not distribute in each calendar year an amount at least equal to the sum of: • 98% of our net ordinary income, excluding certain ordinary gains and losses, recognized during a calendar year; • 98.2% of our capital gain net income, adjusted for certain ordinary gains and losses, recognized for the twelve-month period ending on October 31 of such calendar year; and • 100% of any income or gains recognized, but not distributed, in preceding years. While the Company operated as a RIC, it was required to distribute substantially all of its respective net taxable income each tax year as dividends to its shareholders. Accordingly, for the period March 31, 2022, no provision for federal income tax was made in the financial statements. For 2023, the Company no longer qualifies as a RIC and instead will file a consolidated U.S. federal income tax return Financial holding companies are subject to federal and state income taxes in essentially the same manner as other corporations. Taxable income is generally calculated under applicable sections of the Internal Revenue Code of 1986, as amended (the “Code”), including Sections 581 through 597 that apply specifically to financial institutions. Some modifications are required by state law and the 2017 tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). Among other things, the Tax Act (i) established a new, flat corporate federal statutory income tax rate of 21%, (ii) eliminates the corporate alternative minimum tax and allowed the use of any such carryforwards to offset regular tax liability for any taxable year, (iii) limited the deduction for net interest expense incurred by U.S. corporations, (iv) allowed businesses to immediately expense, for tax purposes, the cost of new investments in certain qualified depreciable assets, (v) eliminated or reduced certain deductions related to meals and entertainment expenses, (vi) modified the limitation on excessive employee remuneration to eliminate the exception for performance-based compensation and clarified the definition of a covered employee and (vii) limited the deductibility of deposit insurance premiums. For the Quarter ended March 31, 2023 The effective tax rate was (71.41)% for the three months ended March 31, 2023. The effective tax rate differs from the federal tax rate of 21% for the three months ended March 31, 2023 due primarily to the recognition of subsidiary net operating losses expected to be realized in a federal consolidated return setting and other discrete items. At December 31, 2022, the Company had federal net operating losses (“NOLs”) in the amount of $34.2 million. Certain of these NOLs ($4.6 million) expire in 2029 through 2037 with the remainder NOLs ($29.6 million) have indefinite lives. The Tax Cuts & Jobs Act of 2017 limits the amount of net operating loss utilized each year after December 31, 2020 to 80% of taxable income. Income tax expense is recorded using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between amounts reported for income tax purposes and financial statement purposes, using current tax rates. A valuation allowance is recognized if it is anticipated that some or all of a deferred tax asset will not be realized. The Company must assess the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent that the Company believes that recovery is not likely, it must establish a valuation allowance. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. The Company and its subsidiaries federal income tax returns are generally open to review by the tax authorities for the tax years ended in 2019 and beyond. However, the Company’s NOLs continue to be subject to review by tax authorities in the period utilized notwithstanding origination in closed periods.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) - NBNYC $ in Millions	Jan. 06, 2023 USD ($)
Business Acquisition [Line Items]
Acquisition consideration	$ 20
Contributions to subsidiary	$ 31

FAIR VALUE MEASUREMENTS - Narrative (Details) - Level 3 $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Servicing assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) included in earnings	$ 0.9
Non-affiliate \| Unguaranteed Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) included in earnings	$ 6.1

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS - Investments with Affiliates (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	$ 283,599
Fair Value	26,382
Investment, Identifier [Axis]: Biller Genie Software, LLC
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	360
Purchases (Cost)	0
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	0
Fair Value	360
Interest and Other Income	0
Dividend Income	0
Investment, Identifier [Axis]: EMCAP Loan Holdings, LLC
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	1,000
Purchases (Cost)	0
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	0
Fair Value	1,000
Interest and Other Income	0
Dividend Income	20
Investment, Identifier [Axis]: Newtek Conventional Lending, LLC
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	16,587
Purchases (Cost)	0
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	2,315
Fair Value	18,900
Interest and Other Income	0
Dividend Income	484
Investment, Identifier [Axis]: Newtek TSO II Conventional Credit Partners, LP
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	6,435
Purchases (Cost)	0
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	(313)
Fair Value	6,122
Interest and Other Income	0
Dividend Income	0
Affiliate Investments
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	24,382
Purchases (Cost)	0
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	2,002
Fair Value	26,382
Interest and Other Income	0
Dividend Income	504
Joint Ventures
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	23,022
Purchases (Cost)	0
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	2,002	$ (2,321)
Fair Value	25,022
Interest and Other Income	0
Dividend Income	484
Non-Control Investments
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	1,360
Purchases (Cost)	0
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	0
Fair Value	1,360
Interest and Other Income	0
Dividend Income	$ 20

STOCK BASED COMPENSATION - Restricted Stock Activity (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares authorized (in shares)	3,000,000
Restricted Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares authorized (in shares)	1,500,000
Net restricted stock (granted)/forfeited (in shares)	(7,383)	(250,622)	(214,654)	2,639	(6,285)	(93,568)	(5,007)	(120,933)
Shares available for issuance (in shares)	804,187
Percentage of common stock issued and outstanding available for restricted stock issuance under plan	20.00%
Percentage of shares allowed to be restricted stock	50.00%

Deposits (Tables)

3 Months Ended

Mar. 31, 2023

Banking and Thrift, Interest [Abstract]

Deposit liabilities

The following table summarizes deposits by type:


	March 31,
(In thousands)	2023
Non-interest-bearing:
Demand	$	22,878
Interest-bearing:
Checking	784
Money market	25,770
Savings	16,700
Time deposits	181,442
Total interest-bearing	$	224,696
Total deposits	$	247,574

Time deposits, money market, and interest-bearing checking obtained through brokers	$	106,763
Aggregate amount of deposit accounts that exceeded the FDIC limit	$	13,357
Demand deposit overdrafts reclassified as loan balances	$	—

Time deposit maturities

The following table summarizes the scheduled maturities of time deposits:


Remainder of 2023	$	104,922
2024	19,431
2025	18,034
2026	22,737
2027	16,206
Thereafter	112
Total time deposits	$	181,442

- Definition

Tabular disclosure of type of deposit liability.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (e)

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(ii)

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (1)

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (1)

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (d)

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iv)

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (5)

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iii)

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (4)

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (c)

Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (2)

Reference 14: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (3)

Reference 15: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)

+ Details

LEASES - Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Leases [Abstract]
2023	$ 2,163
2024	2,820
2025	2,585
2026	2,035
2027	479
Thereafter	0
Total	10,082
Less: Imputed interest	(938)
Present value of future minimum lease payments	$ 9,144	$ 7,973

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Interest income
Loans and fees on loans	$ 17,502	$ 7,079
Debt securities available-for-sale	232	0
Interest from affiliates	0	664
Other interest earning assets	981	0
Total interest income	18,715	7,743
Interest expense
Notes payable related party	0	106
Deposits	1,475	0
Total interest expense	14,132	4,667
Net interest income	4,583	3,076
Provision for loan credit losses	1,318	0
Net interest income after provision for loan credit losses	3,265	3,076
Noninterest income
Dividend income	504	7,846
Loan servicing asset revaluation	919	(1,559)
Servicing income	4,403	3,181
Net gains on sales of loans	6,526	15,295
Net (loss) gain on derivative transactions	(495)	628
Net gain (loss) on loans accounted for under the fair value option	5,905	(2,718)
Net unrealized appreciation (depreciation) on joint ventures	2,002	(2,321)
Technology and IT support income	6,709	0
Electronic payment processing income	10,328	0
Other noninterest income	5,986	1,579
Total noninterest income	42,787	22,228
Noninterest expense
Technology services expense	3,803	0
Electronic payment processing expense	4,504	0
Salaries and employee benefits expense	19,119	5,109
Professional services expense	3,440	1,301
Other loan origination and maintenance expense	2,827	6,483
Depreciation and amortization	873	63
Other general and administrative costs	4,631	1,753
Total noninterest expense	39,197	14,709
Income before tax	6,855	10,595
Income tax (benefit) expense	(4,863)	943
Net income	11,718	9,652
Less dividends to preferred shareholders	(249)	0
Net income available to common shareholders	$ 11,469	$ 9,652
Earnings per share, basic (in dollars per share)	$ 0.46	$ 0.40
Earnings per share, diluted (in dollars per share)	$ 0.46	$ 0.40
Notes and securitizations
Interest expense
Interest expense	$ 8,718	$ 4,136
Bank and FHLB borrowings
Interest expense
Interest expense	3,939	425
Controlled Investments
Noninterest income
Net unrealized appreciation on controlled investments	$ 0	$ 297

BUSINESS COMBINATION - Loans Purchased (Details) - NBNYC $ in Thousands	Jan. 06, 2023 USD ($)
Business Acquisition [Line Items]
Par value (unpaid principal balance)	$ 159,057
Financial Asset Acquired with Credit Deterioration
Business Acquisition [Line Items]
Par value (unpaid principal balance)	42,443
ACL at acquisition	(871)
Non-credit (discount)	(2,688)
Fair Value	$ 38,884

INCOME TAXES - Narrative (Details) - USD ($)	3 Months Ended
INCOME TAXES - Narrative (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Investments, Owned, Federal Income Tax Note [Line Items]
Effective tax rate	(71.41%)
Domestic Tax Authority
Investments, Owned, Federal Income Tax Note [Line Items]
Net operating losses		$ 34,200,000
Domestic Tax Authority \| Tax Year 2029 through 2037
Investments, Owned, Federal Income Tax Note [Line Items]
Net operating losses		4,600,000
Domestic Tax Authority \| Indefinite Carryforward
Investments, Owned, Federal Income Tax Note [Line Items]
Net operating losses		$ 29,600,000

COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	37 Months Ended
	Jan. 31, 2022	Jun. 30, 2019	Apr. 27, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2016
Other Commitments [Line Items]
Fair value				$ 26,382	$ 283,599
Collateralized deposit				1,249,739	$ 998,902
Commitments to Extend Credit
Other Commitments [Line Items]
Commitment				110,400
SBA investment
Other Commitments [Line Items]
Commitment				14,300
504 Loan
Other Commitments [Line Items]
Commitment				81,700
Commercial & Industrial
Other Commitments [Line Items]
Commitment				14,400
BSP
Other Commitments [Line Items]
Investment						$ 5,400
Additional capital investment		$ 1,700
Net unrealized appreciation on controlled investments		(7,100)
Fair value		$ 0
Receivable And Inventory Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities				2,200
Receivable And Inventory Facility \| Line of Credit \| Payment guarantee \| Asset Pledged as Collateral
Other Commitments [Line Items]
Collateralized deposit				750
NBL Capital One Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities				19,300
NBL Deutsche Bank Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities				7,100
NBL One Florida Bank Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities				13,700
Webster Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities				39,900
BSP
Other Commitments [Line Items]
Non-dischargeable judgement amount	$ 6,200
Newtek Business Credit Solutions \| Receivable And Inventory Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity				5,000
Newtek Business Lending, LLC \| NBL Capital One Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity				60,000
Accordion feature, increase limit				150,000
Newtek Business Lending, LLC \| NBL Deutsche Bank Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity				50,000
Newtek Business Lending, LLC \| NBL One Florida Bank Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity				20,000
Newtek Business Lending, LLC \| NBL One Florida Bank Facility \| Line of Credit \| Subsequent Event
Other Commitments [Line Items]
Maximum borrowing capacity			$ 30,000
Newtek Merchant Solutions, LLC \| Webster Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity				$ 54,900

EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 15—EARNINGS PER SHARE:

Under the two-class method, earnings available to common stockholders for the period are allocated between common stockholders and participating securities according to participation rights in undistributed earnings. Our time-based and performance-based restricted stock units are not considered participating securities as they do not receive dividend distributions until satisfaction of the related vesting requirements. As of March 31, 2023, we had 0.63 million anti-dilutive shares. As of March 31, 2022 there were no anti-dilutive securities.

The following table summarizes the calculations for earnings per share for the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31,
		2023			2022
		($)		(%)	($)		(%)
Net income		$	11,718		$	9,652
Dividends to preferred shareholders		(249)			—
Net income available to common shareholders		11,469			9,652
Dividends to common shareholders		4,363			n/a
Undistributed Net Income		7,106			n/a

Distributed Net Income - Common		$	4,363		n/a
Distributed Net Income - Series A Convertible Preferred		$	249		n/a

Allocation of Undistributed Net Income - Common		$	6,937	97.6%	n/a		n/a
Allocation of Undistributed Net Income - Series A Convertible Preferred		$	169	2.4%	n/a		n/a

Basic EPS		$	0.46		$	0.40
Weighted average shares outstanding		24,609			24,156
Adjustments to weighted average shares outstanding:
Preferred stock(1)		598			—
Warrants(2)		30			—
Total adjustments to weighted average shares outstanding		628			—

Diluted weighted average shares outstanding		25,237			n/a
Diluted EPS		$	0.46		n/a

SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)	3 Months Ended
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)	Mar. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Property, Plant and Equipment [Line Items]
Loan-to-value ratio	75.00%
Debt service coverage, minimum	1.2
Cash deposits in excess of insured amounts	$ 49,300,000
Restricted cash	72,599,000	$ 71,914,000	$ 158,543,000	$ 184,463,000
Deferred tax liabilities	3,519,000	19,194,000
Deferred tax asset	$ 8,225,000	0
Number of reportable segments \| segment	4
Allowance for credit loss	$ 1,900,000	$ 2,500,000
Useful life	3 years
Minimum
Property, Plant and Equipment [Line Items]
Tangible asset, Useful life	3 years
Minimum \| Customer Merchant Accounts
Property, Plant and Equipment [Line Items]
Intangible asset, useful life	30 months
Minimum \| Leasehold Improvements
Property, Plant and Equipment [Line Items]
Tangible asset, Useful life	3 years
Maximum
Property, Plant and Equipment [Line Items]
Tangible asset, Useful life	7 years
Maximum \| Customer Merchant Accounts
Property, Plant and Equipment [Line Items]
Intangible asset, useful life	66 months
Maximum \| Leasehold Improvements
Property, Plant and Equipment [Line Items]
Tangible asset, Useful life	5 years

LEASES - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended
LEASES - Lease Cost (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$ 709	$ 461
Weighted-average remaining lease term - operating leases	3 years 7 months 17 days	4 years 10 months 28 days
Weighted-average discount rate - operating leases	5.64%	4.76%
Total lease costs (included in other general and administrative costs on the consolidated statements of operations)	$ 949	$ 239

BORROWINGS - Long-term Debt (Details) - USD ($) $ in Thousands	Jan. 23, 2023	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total		$ 924,780	$ 666,393
Borrowings		$ 697,395	$ 539,326
Weighted Average Interest Rate		6.69%	6.11%
Line of Credit \| Capital One Facilities
Debt Instrument [Line Items]
Commitments - Notes		$ 19,347
Borrowings		18,882
Line of Credit \| Capital One Facilities \| Capital One, Guaranteed and Unguaranteed
Debt Instrument [Line Items]
Commitments - line of credit		150,000	$ 150,000
Line of Credit \| Capital One Facilities \| Capital One, Guaranteed
Debt Instrument [Line Items]
Commitments - line of credit		150,000	150,000
Borrowings Outstanding - line of credit		$ 46,150	$ 10,500
Weighted Average Interest Rate		7.25%	6.75%
Line of Credit \| Capital One Facilities \| Capital One, Unguaranteed
Debt Instrument [Line Items]
Commitments - line of credit		$ 0	$ 0
Borrowings Outstanding - line of credit		$ 67,603	$ 45,385
Weighted Average Interest Rate		8.25%	7.75%
Line of Credit \| Capital One Facilities \| Capital One, SP1
Debt Instrument [Line Items]
Commitments - line of credit		$ 20,000
Borrowings Outstanding - line of credit		$ 18,882
Weighted Average Interest Rate		9.00%
Line of Credit \| Webster Bank Line of Credit
Debt Instrument [Line Items]
Commitments - line of credit		$ 5,000
Borrowings Outstanding - line of credit		$ 2,180
Weighted Average Interest Rate		8.00%
Line of Credit \| Deutsche Bank Line of Credit
Debt Instrument [Line Items]
Commitments - line of credit		$ 150,000
Commitments - Notes		7,123
Borrowings Outstanding - line of credit		6,933
Borrowings		$ 6,933
Weighted Average Interest Rate		7.42%
Line of Credit \| One Florida line of credit - SP3
Debt Instrument [Line Items]
Commitments - line of credit		$ 50,000
Commitments - Notes		13,698
Borrowings Outstanding - line of credit		13,613
Borrowings		$ 13,613
Weighted Average Interest Rate		9.30%
Line of Credit \| Related Party Notes Payable
Debt Instrument [Line Items]
Commitments - line of credit		$ 0	$ 50,000
Borrowings Outstanding - line of credit		$ 0	$ 24,250
Weighted Average Interest Rate		0.00%	6.72%
Medium-term Notes \| Webster Note - MWI
Debt Instrument [Line Items]
Commitments - Notes		$ 39,871
Borrowings		$ 39,538
Weighted Average Interest Rate		7.27%
Medium-term Notes \| Webster Bank Line of Credit
Debt Instrument [Line Items]
Commitments - Notes		$ 2,180
Borrowings		2,180
Medium-term Notes \| 2024 Notes
Debt Instrument [Line Items]
Commitments - Notes		38,250	$ 38,250
Borrowings		$ 37,958	$ 37,903
Weighted Average Interest Rate		5.75%	5.75%
Medium-term Notes \| 2025 5.00% Notes
Debt Instrument [Line Items]
Commitments - Notes		$ 30,000	$ 30,000
Borrowings		$ 29,365	$ 29,306
Weighted Average Interest Rate		5.00%	5.00%
Medium-term Notes \| 2025 8.13% Notes
Debt Instrument [Line Items]
Commitments - Notes		$ 50,000	$ 0
Borrowings		$ 49,040	$ 0
Weighted Average Interest Rate		8.125%	0.00%
Medium-term Notes \| 2026 Notes
Debt Instrument [Line Items]
Commitments - Notes		$ 115,000	$ 115,000
Borrowings		$ 113,025	$ 112,846
Weighted Average Interest Rate		5.50%	5.50%
Medium-term Notes \| 2025 Notes
Debt Instrument [Line Items]
Weighted Average Interest Rate	8.125%
Loans	$ 50,000
Net proceeds	$ 48,940
Secured Debt \| FHLB Advances
Debt Instrument [Line Items]
Commitments - Notes		$ 24,531
Borrowings		$ 24,531
Weighted Average Interest Rate		2.20%
Secured Debt \| Securitization Trusts
Debt Instrument [Line Items]
Commitments - Notes		$ 252,128	$ 283,143
Borrowings		$ 248,577	$ 279,136
Weighted Average Interest Rate		6.85%	6.19%

BUSINESS COMBINATION

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

BUSINESS COMBINATION

Acquisition of NBNYC

On January 6, 2023, the Company completed the Acquisition of NBNYC, a national bank regulated and supervised by the OCC, pursuant to which the Company acquired from the NBNYC shareholders all of the issued and outstanding stock of NBNYC for $20 million, in an all-cash transaction. The Company also agreed to pay the seller’s acquisition costs of approximately $1.3 million. NBNYC has been renamed Newtek Bank and has become a wholly owned subsidiary of the Company. In connection with the completion of the Acquisition, the Company contributed to Newtek Bank $31 million of cash and two of the Company’s subsidiaries, NBL and SBL. Upon the consummation of the Acquisition, Newtek Bank entered into an operating agreement with the OCC concerning certain matters including capital, liquidity and concentration limits, and memorializing the business plan submitted to the OCC.

The NBNYC transaction is accounted for in accordance with ASC 805, Business Combinations, and the Company has performed a purchase price allocation under the acquisition method. Under ASC 805, if the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the acquirer shall report in its financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, which shall not exceed one year from the acquisition date, the acquirer shall adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date.

Pursuant to the above, the Company recorded the estimate of fair value of the consideration paid for the fair value of assets acquired and liabilities assumed from NBNYC, based on initial valuations at January 6, 2023. Due to the timing between the Acquisition and the Company’s filing of this quarterly report on Form 10-Q, these fair values are considered preliminary as of March 31, 2023, and subject to adjustment for up to one year after January 6, 2023. While the Company believes that the information available on January 6, 2023 provided a reasonable basis for estimating fair value, the Company expects that it may obtain additional information and evidence during the measurement period that would result in changes to the estimated fair value amounts. Management believes that final goodwill will not be materially adjusted. Valuations subject to change include, but are not limited to, loans and leases, certain deposits, intangibles, deferred tax assets and liabilities, and certain other assets and other liabilities.

The Company’s results of operations for the three months ended March 31, 2023 include the results of operations of Newtek Bank on and after January 6, 2023. Results for the period prior to January 6, 2023 do not include the results of operations of NBNYC.

The following table provides a preliminary allocation of consideration paid for the fair value of assets acquired and liabilities assumed from NBNYC as of January 6, 2023:

(in thousands)


Purchase price consideration			$21,322

Fair value of assets acquired:
Cash and cash equivalents			32,574
Securities			6,527
Loans held for investment:
Commercial			2,017
Mortgage			157,040
Total loans held for investment			159,057
Goodwill			1,279
Core deposit intangible			1,040
Deferred tax asset			705
Other Assets			926
Total assets acquired			202,108
Fair value of liabilities assumed:
Deposits			137,015
Borrowings			27,972
Other liabilities			15,799
Total liabilities assumed			180,786
Fair value of net assets acquired			$21,322

In connection with the Acquisition, the Company recorded $1.3 million of goodwill, which represents the excess of the purchase price over the fair value of the net assets acquired. Goodwill is an asset representing the acquired future economic benefits such as synergies that are not individually identified and separately recognized (i.e., it is measured as a residual). The amount of goodwill recognized is also impacted by measurement differences resulting from certain assets and liabilities not being recorded at fair value (e.g., income taxes, employee benefits). In accordance with ASC 805-30-30-1, the measurement of goodwill occurs on the Acquisition Date and, other than qualifying measurement period adjustments, no adjustments are made to goodwill recognized as of the Acquisition Date until and unless it becomes impaired. Information regarding the allocation of goodwill to the Company’s reportable segments, as well as the carrying amounts and amortization of the core deposit intangible, can be found within NOTE 19—SEGMENTS and NOTE 8—GOODWILL AND INTANGIBLE ASSETS, respectively.

Fair Value of Assets Acquired and Liabilities Assumed

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, reflecting assumptions that a market participant would use when pricing an asset or liability. In some cases, the estimation of fair values requires management to make estimates about discount rates, future expected cash flows, market conditions, and other future events that are highly subjective in nature and are subject to change. Described below are the methods used to determine the fair values of the significant assets acquired and liabilities assumed in the NBNYC Acquisition.

Cash and cash equivalents. The estimated fair values of cash and cash equivalents approximate their stated face amounts, as these financial instruments are either due on demand or have short-term maturities.

Investment securities available-for-sale. Quoted market prices for the securities acquired were used to determine their fair values. If quoted market prices were not available for a specific security, then quoted prices for similar securities in active markets were used to estimate the fair value.

Loans. Each loan was assessed individually. The fair values for loans were estimated using a discounted cash flow methodology that considered factors including the type of loan and the related collateral, classification status, fixed or variable interest rate, remaining term, amortization status, and current discount rates. In addition, the probability of default, loss given default, and prepayment assumptions that were derived based on loan characteristics, historical loss experience, comparable market data, and current and forecasted economic conditions were used to estimate expected credit losses. The discount rates used for loans and leases were based on current market rates for new originations or comparable loans and leases and include adjustments for liquidity. The discount rate did not include credit losses as that was included as a reduction to the estimated cash flows. We determined the fair value of the PCD loans using the asset and income approach. We used the income approach for PCD loans where there was evidence that the borrower may be able to continue to service the loan and more likely than not continue to pay. We used the asset approach for PCD loans when the loan is on non-accrual status. Acquired loans were marked to fair value and adjusted for any PCD gross up as of the Acquisition Date.

Core Deposit Intangible. CDI is a measure of the value of non-interest-bearing and interest-bearing checking accounts, savings accounts, and money market accounts that are acquired in a business combination. The fair value of the CDI stemming from any given business combination is based on the present value of the expected cost savings attributable to the core deposit funding, relative to an alternative source of funding. The CDI relating to the NBNYC acquisition will be amortized over an estimated useful life of 10 years using the sum of years digits depreciation method. The Company evaluates such identifiable intangibles for impairment when an indication of impairment exists.

Deposit Liabilities. The fair values used for the demand and savings deposits by definition equal the amount payable on demand at the Acquisition date. The fair values for time deposits were estimated using a discounted cash flow methodology that applies interest rates currently being offered to the contractual interest rates on such time deposits.

Borrowings. The estimated fair value of borrowed funds is based on bid quotations received from securities dealers or the discounted value of contractual cash flows with interest rates currently in effect for borrowed funds with similar maturities.

PCD loans

Purchased loans that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. For PCD loans and leases, the initial estimate of expected credit losses is recognized in the ACL on the date of acquisition using the same methodology as other loans and leases held-for-investment. The following table provides a summary of loans and leases purchased as part of the NBNYC acquisition with credit deterioration and associated credit loss reserve at acquisition:


(in thousands)
Par value (unpaid principal balance)	$	42,443
ACL at acquisition	(871)
Non-credit (discount)	(2,688)
Fair Value	$	38,884

Transaction costs describe the broad category of costs the Company incurs in connection with signed and/or closed acquisitions. Transaction costs include expenses associated with legal, accounting, regulatory, and other transition services rendered in connection with acquisition, travel expense, and other non-recurring direct expenses associated with acquisitions.

The Company incurred transaction costs of $0.2 million during the quarter ended March 31, 2023, related to the NBNYC Acquisition. These costs have been included in the Consolidated Statement of Operations in Professional Services Expense.

LOANS HELD FOR INVESTMENT - Investment Portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	$ 554,236	$ 532,793
Fair Value	532,788	505,268
Food Services and Drinking Places
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	51,194	48,551
Fair Value	49,014	48,796
Specialty Trade Contractors
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	46,513	42,330
Fair Value	46,513	38,314
Professional, Scientific, and Technical Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	42,815	41,066
Fair Value	42,374	39,287
Ambulatory Health Care Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	31,640	28,900
Fair Value	30,070	26,879
Merchant Wholesalers, Durable Goods
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	23,905	22,219
Fair Value	23,905	22,059
Amusement, Gambling, and Recreation Industries
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	24,828	24,743
Fair Value	24,339	25,917
Administrative and Support Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	24,186	23,400
Fair Value	24,186	21,249
Accommodation
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	10,673	11,476
Fair Value	10,673	10,428
Repair and Maintenance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	18,701	17,108
Fair Value	18,618	17,280
Merchant Wholesalers, Nondurable Goods
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	18,622	19,501
Fair Value	18,344	18,637
Truck Transportation
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	22,100	23,846
Fair Value	22,100	18,245
Personal and Laundry Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	14,167	13,763
Fair Value	13,692	14,183
Fabricated Metal Product Manufacturing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	13,011	14,190
Fair Value	13,011	14,739
Construction of Buildings
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	12,519	11,978
Fair Value	11,907	10,973
Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	4,045	3,837
Fair Value	4,045	3,380
Motor Vehicle and Parts Dealers
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	11,377	10,186
Fair Value	11,377	9,651
Social Assistance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	10,155	9,282
Fair Value	10,057	9,993
Building Material and Garden Equipment and Supplies Dealers
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	9,509	12,760
Fair Value	8,705	11,427
Food and Beverage Stores
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	8,691	5,789
Fair Value	8,424	5,935
Food Manufacturing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	10,972	10,830
Fair Value	10,784	8,951
Rental and Leasing Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	8,643	8,158
Fair Value	7,693	8,448
Transportation Equipment Manufacturing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	8,688	8,272
Fair Value	8,688	8,445
Support Activities for Mining
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	9,940	10,426
Fair Value	9,940	8,615
Nursing and Residential Care Facilities
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	6,322	8,187
Fair Value	6,322	8,697
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	111,020	101,995
Fair Value	$ 111,020	$ 94,740

FAIR VALUE MEASUREMENTS - Warrant Rollforward (Details) - Warrant $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value, beginning balance	$ 0
New equity warrant assets	311
Changes in fair value, net	(162)
Fair value, ending balance	$ 149

BORROWINGS

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

BORROWINGS

NOTE 11—BORROWINGS:

At March 31, 2023 and December 31, 2022, the Company had borrowings composed of the following:


	March 31, 2023						December 31, 2022
	Commitments		Borrowings Outstanding		Weighted Average Interest Rate		Commitments		Borrowings Outstanding		Weighted Average Interest Rate
Bank Lines of Credit:
Capital One line of credit - guaranteed1	$	150,000	$	46,150	7.25	%	$	150,000	$	10,500	6.75	%
Capital One line of credit - unguaranteed1	—		67,603		8.25	%	—		45,385		7.75	%
Webster NMS Note	39,871		39,538		7.27	%	—		—		—
Webster CDS Line of Credit	5,000		2,180		8.00	%	—		—		—
SPV II Deutsche Bank Facility	150,000		6,933		7.42	%	—		—		—
SPV I Capital One Facility	20,000		18,882		9.00	%	—		—		—
SPV III One Florida Bank Facility	50,000		13,613		9.30	%	—		—		—
FHLB Advances	24,531		24,531		2.20	%	—		—		—
Notes:
2024 Notes	38,250		37,958		5.75	%	38,250		37,903		5.75	%
2025 5.00% Notes	30,000		29,365		5.00	%	30,000		29,306		5.00
2025 8.125% Notes	50,000		49,040		8.13	%	—		—		—	%
2026 Notes	115,000		113,025		5.50	%	115,000		112,846		5.50	%
Notes payable - related parties	—		—		—	%	50,000		24,250		6.72	%
Notes payable - Securitization Trusts	252,128		248,577		6.85	%	283,143		279,136		6.19	%
Total	$	924,780	$	697,395	6.69	%	$	666,393	$	539,326	6.11	%

(1) Total combined commitments of the guaranteed and unguaranteed lines of credit were $150.0 million at March 31, 2023 and December 31, 2022.

Outstanding borrowings under the 2024 Notes, 2025 Notes, 2026 Notes, bank lines of credit, and Notes payable - Securitization Trusts consisted of the following:


	March 31, 2023
	Webster NMS Note		Webster CDS Line of Credit		SPV II Deutsche Bank Facility		SPV I Capital One Facility		SPV III One Florida Bank Facility		2024 Notes		2025 5.00% Notes		2025 8.125% Notes		2026 Notes		Notes Payable- Securitization Trusts
Principal balance	$	39,871	$	2,180	$	7,123	$	19,347	$	13,698	$	38,250	$	30,000	$	50,000	$	115,000	$	252,128
Unamortized deferred financing costs	(333)		—		(190)		(465)		(84)		(292)		(635)		(960)		(1,975)		(3,551)
Net carrying amount	$	39,538	$	2,180	$	6,933	$	18,882	$	13,613	$	37,958	$	29,365	$	49,040	$	113,025	$	248,577


	December 31, 2022
	2024 Notes		2025 6.85% Notes		2026 Notes		Notes Payable- Securitization Trusts
Principal balance	$	38,250	$	30,000	$	115,000	$	283,143
Unamortized deferred financing costs	(347)		(694)		(2,154)		(4,007)
Net carrying amount	$	37,903	$	29,306	$	112,846	$	279,136

At March 31, 2023 and December 31, 2022, the carrying amount of the Company’s borrowings under the Capital One, Deutsche Bank, Webster, and One Florida lines of credit, the Notes payable - related parties and Notes payable - Securitization Trusts, approximates fair value due to their variable interest rates.

At March 31, 2023, the carrying amount of the Company’s FHLB borrowings includes a $0.2 million adjustment from the $24.76 million current principal amount to reach a balance sheet value of $24.53 million.

The fair values of the fixed rate 2026 Notes and 2024 Notes are based on the closing public share price on the date of measurement. On March 31, 2023, the closing price of the 2026 Notes was $24.22 per note, or $111.4 million. On December 31, 2022, the closing price of the 2026 Notes was $25.77 per note, or $118.5 million. On March 31, 2023, the closing price of the 2024 Notes was $24.58 per note, or $37.6 million. On December 31, 2022, the closing price of the 2024 Notes was $25.40 per note, or $38.9 million. These borrowings are not recorded at fair value on a recurring basis. The fixed rate 2025 Notes are held at par as of March 31, 2023 and December 31, 2022.

Total interest expense including unused line fees and amortization of deferred financing costs related to borrowings for the three months ended March 31, 2023 and 2022 was $11.1 million and $26.3 million, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1I
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1C
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
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-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1E
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Debt Securities Available-for-Sale - Debt Securities, Unrealized Losses (Details) $ in Thousands	Mar. 31, 2023 USD ($) loan
Debt Securities, Available-for-Sale [Line Items]
Less Than 12 Months, Fair Value	$ 4,048
Less Than 12 Months, Unrealized Losses	198
12 Months or More, Fair Value	0
12 Months or More, Unrealized Losses	$ 0
Number of Holdings \| loan	4
Total, Fair Value	$ 4,048
Total, Unrealized Losses	198
U.S. Treasury notes
Debt Securities, Available-for-Sale [Line Items]
Less Than 12 Months, Fair Value	245
Less Than 12 Months, Unrealized Losses	1
12 Months or More, Fair Value	0
12 Months or More, Unrealized Losses	$ 0
Number of Holdings \| loan	1
Total, Fair Value	$ 245
Total, Unrealized Losses	1
Government agency debentures
Debt Securities, Available-for-Sale [Line Items]
Less Than 12 Months, Fair Value	3,803
Less Than 12 Months, Unrealized Losses	197
12 Months or More, Fair Value	0
12 Months or More, Unrealized Losses	$ 0
Number of Holdings \| loan	3
Total, Fair Value	$ 3,803
Total, Unrealized Losses	$ 197

GOODWILL AND INTANGIBLE ASSETS - Future Amortization (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2023	$ 1,207
2024	982
2025	948
2026	928
2027	907
Thereafter	1,940
Total	$ 6,912	$ 0

Debt Securities Available-for-Sale

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Debt Securities Available-for-Sale

The following tables summarize the amortized cost and fair value of available-for-sale securities by major type:


At March 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury notes	$	29,017	$	85	$	1	$	29,102
Government agency debentures	4,000		—		197		3,803
Total available for sale securities	$	33,017	$	85	$	198	$	32,905

There was no accrued interest receivable on available-for-sale securities at March 31, 2023, and is included in other assets in the accompanying Unaudited Consolidated Statements of Financial Condition.

During the three months ended March 31, 2023, no securities were sold or settled.

Unrealized Losses



	At March 31, 2023
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Holdings		Fair Value		Unrealized Losses
U.S. Treasury notes	$	245	$	1	$	—	$	—	$	1	$	245	$	1
Government agency debentures	3,803		197		—		—		3		3,803		197
Total	$	4,048	$	198	$	—	$	—	$	4	$	4,048	$	198

Management evaluates available-for-sale debt securities to determine whether the unrealized loss is due to credit-related factors or non-credit-related factors. The evaluation considers the extent to which the security’s fair value is less than cost, the financial condition and near-term prospects of the issuer, and intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. These unrealized losses are primarily the result of non-credit-related volatility in the market and market interest rates. Since none of the unrealized losses relate to marketability of the securities or the issuers' ability to honor redemption obligations and the Company has the intent and ability to hold the securities for a sufficient period of time to recover unrealized losses, none of the losses have been recognized in the Company’s Unaudited Consolidated Statements of Income.

Contractual Maturities

The following table summarizes the amortized cost and fair value of available-for-sale securities by contractual maturity:


	At March 31, 2023
	Amortized Cost		Fair Value
Maturing within 1 year	$	1,246	$	1,245
After 1 year through 5 years	31,771		31,660


Total available for sale securities	$	33,017	$	32,905

Other information

The following table summarizes available-for-sale securities pledged for deposits, borrowings, and other purposes:


	At March 31, 2023
Pledged for deposits	$	—
Pledged for borrowings and other	32,905
Total available for sale securities pledge	32,905

SERVICING ASSETS - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Servicing Assets at Fair Value [Line Items]
Servicing assets at fair value	$ 33,351		$ 30,268
SBA 7(a)
Servicing Assets at Fair Value [Line Items]
Servicing assets at fair value	1,600,000
Non-affiliate
Servicing Assets at Fair Value [Line Items]
Servicing fee income	$ 4,400	$ 3,200

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Related Party Transactions [Abstract]
Due from Related Parties	$ 0.1	$ 1.3
Due to related parties	0.0	$ 1.2
Loan Purchased	$ (5.3)

- Definition

For an unclassified balance sheet, amounts due from related parties including affiliates, employees, joint ventures, officers and stockholders, immediate families thereof, and pension funds.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/extlink&oid=126734703&loc=d3e572229-122910

+ Details

- Definition

Carrying amount as of the balance sheet date of obligations due all related parties.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(k)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

+ Details

INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investment holdings, schedule of investments

Investments consisted of the following at:


	March 31, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Non-controlled equity investments	1,360		1,360		1,360		1,360
Joint Ventures	23,314		25,022		23,314		23,022
Controlled investments:
Equity	—		—		99,195		241,113
Debt	—		—		32,300		18,104
Total investments	$	24,674	$	26,382	$	156,169	$	283,599


	Loans Held for Investment, at Fair Value
	March 31, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Food Services and Drinking Places	$	51,194	$	49,014	$	48,551	$	48,796
Specialty Trade Contractors	46,513		46,513		42,330		38,314
Professional, Scientific, and Technical Services	42,815		42,374		41,066		39,287
Ambulatory Health Care Services	31,640		30,070		28,900		26,879
Merchant Wholesalers, Durable Goods	23,905		23,905		22,219		22,059
Amusement, Gambling, and Recreation Industries	24,828		24,339		24,743		25,917
Administrative and Support Services	24,186		24,186		23,400		21,249
Accommodation	10,673		10,673		11,476		10,428
Repair and Maintenance	18,701		18,618		17,108		17,280
Merchant Wholesalers, Nondurable Goods	18,622		18,344		19,501		18,637
Truck Transportation	22,100		22,100		23,846		18,245
Personal and Laundry Services	14,167		13,692		13,763		14,183
Fabricated Metal Product Manufacturing	13,011		13,011		14,190		14,739
Construction of Buildings	12,519		11,907		11,978		10,973
Real Estate	4,045		4,045		3,837		3,380
Motor Vehicle and Parts Dealers	11,377		11,377		10,186		9,651
Social Assistance	10,155		10,057		9,282		9,993
Building Material and Garden Equipment and Supplies Dealers	9,509		8,705		12,760		11,427
Food and Beverage Stores	8,691		8,424		5,789		5,935
Food Manufacturing	10,972		10,784		10,830		8,951
Rental and Leasing Services	8,643		7,693		8,158		8,448
Transportation Equipment Manufacturing	8,688		8,688		8,272		8,445
Support Activities for Mining	9,940		9,940		10,426		8,615
Nursing and Residential Care Facilities	6,322		6,322		8,187		8,697
Other	111,020		111,020		101,995		94,740
Total	$	554,236	$	532,788	$	532,793	$	505,268


	Loans Held for Investment, at Amortized Cost
	March 31, 2023		December 31, 2022
Commercial Real Estate	$	101,172	$	—
Commercial & Industrial	65,262		—
SBA 7(a)	394		—
Total	$	166,828	$	—

Investment company, nonconsolidated subsidiary, summarized financial information

The following tables show certain summarized financial information for NCL JV:


Selected Statement of Assets and Liabilities Information	March 31, 2023		December 31, 2022
	(Unaudited)
Cash	$	554	$	791
Restricted cash	2,344		2,362
Investments in loans, at fair value (amortized cost of $77,971 and $78,785, respectively)	78,493		78,595
Other Assets	1,771		1,807
Total assets	$	83,162	$	83,555

Bank notes payable	$	48,154	$	—
Securitization notes payable	969		49,273
Other liabilities	138		1,109
Total liabilities	49,261		50,382

Net assets	33,901		33,173
Total liabilities and net assets	$	83,162	$	83,555


Selected Statements of Operations Information	Three Months Ended March 31,
		2023		2022


Interest and other income		$	1,644	$	1,761
Total expenses		659		741
Net investment income		985		1,020
Unrealized appreciation (depreciation) on investments		712		(2,009)
Net increase (decrease) in net assets resulting from operations		$	1,697	$	(989)

The following tables show certain summarized financial information for TSO JV:


Selected Statement of Assets and Liabilities Information	March 31, 2023		December 31, 2022
	(Unaudited)
Cash	$	2,939	$	1,046
Restricted cash	768		498
Investments in loans, at fair value (amortized cost of $15,670)	16,571		22,449
Other assets	$	1,548	$	2,033
Total assets	$	21,826	$	26,026

Bank notes payable	$	9,250	$	12,950


Other liabilities	331		205
Total liabilities	9,581		13,155

Net assets	12,245		12,871
Total net assets	$	21,826	$	26,026


Selected Statements of Operations Information	Three Months Ended March 31,
	2023		2022
Interest and other income	$	615	$	—
Total expenses	550		—
Net investment income	65		—
Unrealized depreciation on investments	(513)		—
Realized loss on investments	(16)		—
Realized gain on derivative transactions	275		—
Unrealized loss on derivative transactions	(436)		—
Net decrease in net assets resulting from operations	$	(625)	$	—

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Stockholders' Equity [Abstract]
Dividends declared common shares (in dollars per share)	$ 0.18	$ 0.65
Dividends declared preferred shares (in dollars per share)	$ 12.27

BUSINESS COMBINATION (Tables)

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of business acquisitions

The following table provides a preliminary allocation of consideration paid for the fair value of assets acquired and liabilities assumed from NBNYC as of January 6, 2023:

(in thousands)


Purchase price consideration			$21,322

Fair value of assets acquired:
Cash and cash equivalents			32,574
Securities			6,527
Loans held for investment:
Commercial			2,017
Mortgage			157,040
Total loans held for investment			159,057
Goodwill			1,279
Core deposit intangible			1,040
Deferred tax asset			705
Other Assets			926
Total assets acquired			202,108
Fair value of liabilities assumed:
Deposits			137,015
Borrowings			27,972
Other liabilities			15,799
Total liabilities assumed			180,786
Fair value of net assets acquired			$21,322

The following table provides a summary of loans and leases purchased as part of the NBNYC acquisition with credit deterioration and associated credit loss reserve at acquisition:


(in thousands)
Par value (unpaid principal balance)	$	42,443
ACL at acquisition	(871)
Non-credit (discount)	(2,688)
Fair Value	$	38,884

LOANS HELD FOR INVESTMENT - Aging Status (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	$ 166,828	$ 0
Net deferred fees	(127)
Allowance for credit losses	(2,189)	0
Loans held for investment, at fair value	532,788	505,268
Total	699,616
Total	164,638
Total	697,426
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	101,172	0
Allowance for credit losses	(1,960)	0
Loans held for investment, at fair value	0
Total Loans	100,647
Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	65,262	0
Allowance for credit losses	(223)	0
Loans held for investment, at fair value	0
Total Loans	66,307
SBA 7(a)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	533,182
Total Loans, gross	166,954
Total Loans, Fair Value	532,788
Total Loans	699,742
Allowance for credit losses	(6)	0
Loans held for investment, at fair value	532,788
Total	532,788	505,268
Total Loans	0
Performing \| 30-59 Days Past Due and Accruing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	68,336
Performing \| 30-59 Days Past Due and Accruing \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	14,652
Performing \| 30-59 Days Past Due and Accruing \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	11,487
Performing \| 30-59 Days Past Due and Accruing \| SBA 7(a)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	42,197	18,681
Total Loans, gross	68,336
Performing \| 60-89 Days Past Due and Accruing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	4,922
Performing \| 60-89 Days Past Due and Accruing \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	0
Performing \| 60-89 Days Past Due and Accruing \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	1,820
Performing \| 60-89 Days Past Due and Accruing \| SBA 7(a)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	3,102	12,754
Total Loans, gross	4,922
Performing \| 90 or more Days Past Due and Accruing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	4,454
Performing \| 90 or more Days Past Due and Accruing \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	0
Performing \| 90 or more Days Past Due and Accruing \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	4,454
Performing \| 90 or more Days Past Due and Accruing \| SBA 7(a)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	0	0
Total Loans, gross	4,454
Performing \| Total past Due and Non-accrual
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	120,092
Performing \| Total past Due and Non-accrual \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	14,652
Performing \| Total past Due and Non-accrual \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	20,395
Performing \| Total past Due and Non-accrual \| SBA 7(a)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	85,044	65,867
Total Loans, gross	120,091
Performing \| Current
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	579,651
Performing \| Current \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	85,995
Performing \| Current \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	45,912
Performing \| Current \| SBA 7(a)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for investment, at amortized cost, net of deferred fees and costs	447,744	439,401
Total Loans, gross	579,651
Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non- accrual	42,380
Nonperforming \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non- accrual	0
Nonperforming \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non- accrual	2,635
Nonperforming \| SBA 7(a)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non- accrual	39,745	$ 34,432
Total Loans, Non-accrual	$ 42,380

DERIVATIVE INSTRUMENTS

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

NOTE 12—DERIVATIVE INSTRUMENTS:

The Company historically used derivative instruments primarily to economically manage the fair value variability of certain fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. The following is a breakdown of the derivatives outstanding as of March 31, 2023 and December 31, 2022:


	March 31, 2023							December 31, 2022
			Fair Value				Remaining			Fair Value			Remaining
Contract Type	Notional		Asset1		Liability1		Maturity (years)	Notional		Asset1	Liability1		Maturity (years)
5-year Swap Futures	$	25,220	$	—	$	624	0.25 years	$	—	—	$	—	—

(1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.


	Three Months Ended
		March 31, 2023	March 31, 2022
Contract Type			Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)
5-year Swap Futures			$	(693)	$	197	$	183	$	445

Collateral posted with our futures counterparty is segregated in the Company’s books and records. Historically, the Company’s counterparty held cash margin as collateral for derivatives, which is included in restricted cash in the consolidated balance sheets. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. The Company is required to post initial margin and daily variation margin for interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	3 Months Ended
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	NOTE 1—DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION: The Company is a financial holding company that is a leading business and financial solutions provider to SMBs and provides SMBs with the following Newtek® branded business and financial solutions: Newtek Bank, Newtek Lending, Newtek Payments, Newtek Insurance, Newtek Payroll and Newtek Technology. On January 6, 2023, the Company completed the Acquisition of NBNYC, a national bank regulated and supervised by the OCC, pursuant to which the Company acquired from the NBNYC shareholders all of the issued and outstanding stock of NBNYC for $20 million, plus reimbursement of certain expenses. NBNYC has been renamed Newtek Bank, National Association and has become a wholly owned subsidiary of the Company. In connection with the completion of the Acquisition, the Company contributed to Newtek Bank $31 million of cash and two of the Company’s subsidiaries, NBL and SBL. Upon the consummation of the Acquisition, Newtek Bank entered into an operating agreement with the OCC concerning certain matters including capital, liquidity and concentration limits, and memorializing the business plan submitted to the OCC. In addition, on January 6, 2023, the Company filed with the SEC a Form N-54C, Notification of Withdrawal of Election to be Subject to the 1940 Act, and has ceased to be a BDC effective as of January 6, 2023. As a result of the Acquisition, the Company is now a financial holding company subject to the regulation and supervision of the Federal Reserve and the Federal Reserve Bank of Atlanta. The Company no longer qualifies as a regulated investment company (RIC) for federal income tax purposes and no longer qualifies for accounting treatment as an investment company. As a result, in addition to Newtek Bank and its consolidated subsidiaries, NBL and SBL, the following NewtekOne portfolio companies and subsidiaries are now consolidated non-bank subsidiaries in the Company’s financial statements: NSBF; Newtek Merchant Solutions, LLC; Mobil Money, LLC; CDS Business Services, Inc. d/b/a Newtek Business Credit Solutions; PMTWorks Payroll, LLC d/b/a Newtek Payroll and Benefits Solutions; Newtek Insurance Agency, LLC; Titanium Asset Management LLC; Newtek Business Services Holdco 6, Inc; Newtek Commercial Lending, Inc.; Excel WebSolutions, LLC; Newtek Technology Solutions, Inc.. Our investment in POS on Cloud, LLC, d/b/a Newtek Payment Systems is treated as a non-controlling interest and is included on our consolidated financial statements. In addition, as a result of commitments made to the Federal Reserve, the Company will divest or otherwise terminate the activities conducted by Excel WebSolutions, LLC and Newtek Technology Solutions, Inc., including its subsidiary SIDCO, LLC d/b/a/ Cloud Nine Services, within two years of becoming a financial holding company, subject to any extension of the two-year period. As a result of the foregoing, comparisons to prior period include adjustments made to reconcile prior investment company accounting to the current financial holding company accounting requirements. For example, the statement of changes in stockholders’ equity includes adjustments for changes in presentation between accumulated undistributed earnings and additional paid in capital, removal of fair value adjustments on entities that are now consolidating entities, and the reassessment of deferred tax assets and liabilities relating to the consolidation of the previous portfolio companies investments. The statement of cash flows includes an adjustment to the opening cash balance for the cash from the previously unconsolidated subsidiaries. On January 17, 2023, the Company changed its name from Newtek Business Services Corp. to NewtekOne, Inc. Except as otherwise noted, all financial information included in the tables in the following footnotes is stated in thousands, except per share data. The accompanying notes to the unaudited consolidated financial statements should be read in conjunction with NewtekOne’s Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 15, 2023. The unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and footnotes necessary for a fair presentation of the consolidated financial statements in accordance with U.S. GAAP. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications that are necessary for the fair presentation of financial results as of and for the periods presented. The results of operations for an interim period may not give a true indication of the results for the entire year. The December 31, 2022 consolidated statement of assets and liabilities has been derived from the audited financial statements as of that date. All intercompany balances and transactions have been eliminated in consolidation.

BUSINESS COMBINATION - Purchase Price (Details) - USD ($) $ in Thousands	Jan. 06, 2023	Mar. 31, 2023	Dec. 31, 2022
Fair value of assets acquired:
Goodwill		$ 21,189	$ 0
NBNYC
Fair value of assets acquired:
Purchase price consideration	$ 21,322
Cash and cash equivalents	32,574
Securities	6,527
Total loans held for investment	159,057
Goodwill	1,279
Core deposit intangible	1,040
Deferred tax asset	705
Other Assets	926
Total assets acquired	202,108
Fair value of liabilities assumed:
Deposits	137,015
Borrowings	27,972
Other liabilities	15,799
Total liabilities assumed	180,786
Fair value of net assets acquired	21,322
NBNYC \| Commercial
Fair value of assets acquired:
Total loans held for investment	2,017
NBNYC \| Mortgage
Fair value of assets acquired:
Total loans held for investment	$ 157,040

DIVIDENDS AND DISTRIBUTIONS (Tables)

3 Months Ended

Mar. 31, 2023

Investment Company [Abstract]

Distribution of assets, liabilities and stockholders' equity

The following table summarizes the Company’s dividend declarations and distributions during the three months ended March 31, 2023 and 2022.


Date Declared	Record Date	Payment Date	Amount Per Share		Cash Distribution		DRIP Shares Issued	DRIP Shares Value
Three months ended March 31, 2023
February 27, 2023	April 4, 2023	April 14, 2023	$	0.18	$	4,291	6	$	72




Three months ended March 31, 2022
December 20, 2021	March 21, 2022	March 31, 2022	$	0.65	$	15,361	9	$	225

FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 9—FAIR VALUE MEASUREMENTS:

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, management used various valuation approaches, all of which were approved by the Company’s Board. In accordance with GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and gives the lowest priority to unobservable inputs (Level 3). The levels of the fair value hierarchy are as follows:

Level 1Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as certain U.S. Treasury, other U.S. Government and agency mortgage-backed debt securities that are highly liquid and are actively traded in over-the-counter markets.

Level 2Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency mortgage-backed debt securities, corporate debt securities, derivative contracts and residential mortgage loans held-for-sale.

Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments, retained residual interests in securitizations, residential mortgage servicing rights, and highly structured or long-term derivative contracts.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company assesses the levels of assets and liabilities at each measurement date. There were no transfers to or from Level 3 of the fair value hierarchy for assets and liabilities during the three months ended March 31, 2023 or 2022.

Level 1 investments were valued using quoted market prices. Level 2 investments were valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities.

For the Company’s joint venture investments, the Company generally calculated the fair value of the investment primarily based on the net asset NAV of the entity and adjusted the fair value for other factors that would affect the fair value of the investment. The Company used this valuation approach for its investment in NCL JV and TSO JV.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company may realize significantly less than the value at which such investment had previously been recorded.

The Company’s investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded. In addition recent changes in inflation and base interest rates, supply chain disruptions, significant market volatility, risk of recession, recent economic and market events, unrelated bank failures and declines in depositor confidence in depository institutions, the ongoing war between Russia and Ukraine and general uncertainty surrounding the financial and political stability of the United States, United Kingdom, the European Union and China could further negatively impact the fair value of the Company’s investments after March 31, 2023, in addition to other circumstances and events that are not yet known.

The table below provides a roll forward of the Level 3 equity warrant asset fair values.


Equity Warrant Assets	Three Months Ended March 31, 2023
Balance at beginning of period	$	—
New equity warrant assets	311
Changes in fair value, net	(162)
Balance at end of period	$	149


	Fair Value Measurements at March 31, 2023
	Total		Level 1		Level 2		Level 3
Assets:

Debt securities available-for-sale
U.S. Treasury notes	$	29,102	$	29,102	$	—	$	—
Government agency debentures	3,803		—		3,803		—
Loans held for sale, at fair value	125,639		—		125,639		—
Loans held for investment, at fair value	532,788		—		—		532,788
Other real estate owned 1	3,516		—		—		3,516
Non-controlled/affiliate investments	1,360		—		—		1,360
Servicing assets	33,351		—		—		33,351

Joint venture measured at NAV2	25,022		—		—		—
Total assets	$	754,581	$	29,102	$	129,442	$	571,015
Liabilities:
Derivative instruments3	$	624	$	—	$	624	$	—

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.

(3) Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

The change in net gain/loss on loans accounted for under the fair value option included in the consolidated statements of operations attributable to Level 3 investments held at March 31, 2023 includes $6.1 million in gains on SBA unguaranteed non-affiliate investments and $0.9 million in unrealized depreciation on servicing assets.


	Fair Value Measurements at December 31, 2022
	Total		Level 1		Level 2		Level 3
Assets:

Loans held for sale, at fair value	$	19,171	—		$	19,171	$	—
Loans held for investment, at fair value	505,268		—		—		505,268
Controlled investments	259,217		—		—		259,217
Other real estate owned1	3,529		—		—		3,529
Non-control investments	1,360		—		—		1,360
Servicing assets	30,268		—		—		30,268
Controlled investments measured at NAV2	23,022		—		—		—
Total assets	$	841,835	$	—	$	19,171	$	799,642

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.

The following tables represents the changes in the investments, servicing assets and liabilities measured at fair value using Level 3 inputs for the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31, 2023
	Held for Investment, at fair value		Controlled Investments		Servicing Assets		Non-Control Investments		Other Real Estate Owned1
Fair value, December 31, 2022	$	505,268	$	258,417	$	30,268	$	1,360	$	3,529
Removal of new entities consolidating in current period	—		(258,417)		—		—		—
Reclass of Loans Held for Sale to Held for Investment	8,745		—		—		—		—

Gain on investments	6,077		—		—		—		(45)
Change in net unrealized depreciation on servicing assets due to changes in valuation inputs or assumptions	—		—		2,654		—		—
Change in net unrealized depreciation on servicing assets due to factors other than changes in valuation inputs or assumptions	—		—		(1,735)		—		—
Realized loss	(7,532)		—		—		—		—
SBA investments, funded	36,859		—		—		—		—


Foreclosed real estate acquired	(694)		—		—		—		674

Purchase of loans from SBA	5,797		—		—		—		—
Sale of investment	—		—		—		—		(641)






Principal payments received on debt investments	(21,732)		—		—		—		—
Additions to servicing assets	—		—		2,164		—		—
Fair value, March 31, 2023	$	532,788	$	—	$	33,351	$	1,360	$	3,516

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.



	Three Months Ended March 31, 2022
	SBA Unguaranteed Investments		Controlled Investments		Servicing Assets		Non-Control Investments		Other Real Estate Owned1
Fair value, December 31, 2021	$	424,417	$	230,935	$	28,008	$	1,000	$	2,354
Net change in unrealized appreciation (depreciation) on investments	(1,990)		297		—		—		(50)
Change in net unrealized appreciation on servicing assets due to changes in valuation inputs or assumptions	—		—		(1,559)		—		—

Realized loss	(1,887)		—		—		—		(36)
SBA unguaranteed non-affiliate investments, funded	39,322		—		—		—		—
Foreclosed real estate acquired	(105)		—		—		—		105
Purchase of investments	—		2,500		—		—		—
Purchase of loans from SBA	—		—		—		—		—
Sale of investment	—		—		—		—		(581)





Return of investment	—		—		—		—		—
Principal payments received on debt investments	(19,752)		—		—		—		—
Additions to servicing assets	—		—		2,406		—		—
Fair value, March 31, 2022	$	440,005	$	233,732	$	28,855	$	1,000	$	1,792

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.


	Fair Value as of			Weighted		Range
	March 31, 2023		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	102,052	Market yields	7.90	%	7.90	%	7.90	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	250	Market yields	8.87	%	8.87	%	8.87	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%









Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Cost basis	N/A		N/A		N/A



Servicing assets	$	33,351	Market yields	14.50	%	14.50	%	14.50	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	20.00	%	20.00	%	20.00	%
Other real estate owned	$	3,516	Appraised value	N/A		N/A		N/A


	Fair Value as of			Weighted		Range
	December 31, 2022		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	393,910	Market yields	4.50	%	4.50	%	4.50	%
			Cumulative prepayment rate	22.00	%	22.00	%	22.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	30,507	Market yields	4.85	%	4.85	%	4.85	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	208,106	EBITDA multiples-TTM2	8.30x		7.50x		9.00x
			EBITDA multiples-NTM2	7.50x		6.30x		8.25x
			Revenue multiples2	2.67x		1.10x		3.50x
			Weighted average cost of capital2	12.34	%	11.00	%	18.50	%
Controlled debt investments	$	22,828	Market yields	8.52	%	3.80	%	12.00	%
Non-control equity investments	$	1,000	Market yields	9.50	%	8.00	%	12.00	%

Servicing assets	$	30,268	Market yields	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
Other real estate owned	$	3,529	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.

Estimated Fair Value of Other Financial Instruments

GAAP also requires disclosure of the fair value of financial instruments carried at book value on the Unaudited Consolidated Statements of Financial Condition. The carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value on a recurring or non-recurring basis are as follows:


	March 31, 2023
	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Financial Assets:
Cash and due from banks	$	27,349	$	27,349	$	—	$	—	$	27,349
Restricted cash	72,599		72,599		—		—		72,599
Interest bearing deposits in banks	97,196		97,196		—		—		97,196
Total loans held for investment, at amortized cost, net	164,639		—		—		166,433		166,433
Financial Liabilities:
Deposits:	247,574		—		247,574		—		247,574
Borrowings	697,395		—		—		697,395		697,395

	December 31, 2022
	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Financial Assets:
Cash and due from banks	53,692		53,692		$	—	$	—	$	53,692
Restricted cash	71,914		71,914		—		—		71,914
Financial Liabilities:
Borrowings	539,326		—		—		539,326		539,326

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2023

Investments in and advances to affiliates

Transactions related to our joint ventures and non-controlled investments for the three months ended March 31, 2023 were as follows:


Company	Fair Value at December 31, 2022		Purchases (Cost)		Principal Received		Net Realized Gains/(Losses)		Net Unrealized Gains/(Losses)		Fair Value at March 31, 2023		Interest and Other Income		Dividend Income
Joint Ventures
Newtek Conventional Lending, LLC	$	16,587	$	—	$	—	$	—	$	2,315	$	18,900	$	—	$	484
Newtek TSO II Conventional Credit Partners, LP	6,435		—		—		—		(313)		6,122		—		—
Total Joint Ventures	$	23,022	$	—	$	—	$	—	$	2,002	$	25,022	$	—	$	484

Non-Control Investments
EMCAP Loan Holdings, LLC	$	1,000	$	—	$	—	$	—	$	—	$	1,000	$	—	$	20
Biller Genie Software, LLC	360		—		—		—		—		360		—		—
Total Non-Control Investments	$	1,360	$	—	$	—	$	—	$	—	$	1,360	$	—	$	20

Total Affiliate Investments	$	24,382	$	—	$	—	$	—	$	2,002	$	26,382	$	—	$	504

LOANS HELD FOR INVESTMENT - Allowance for Credit Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	$ 0
Adjustment to Beginning Balance due to PCD marks1			$ 871
Charge offs	0
Recoveries	0
Allowance for credit losses on loans	1,318	$ 0
Ending Balance	2,189
Commercial Real Estate
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	0
Adjustment to Beginning Balance due to PCD marks1			775
Charge offs	0
Recoveries	0
Allowance for credit losses on loans	1,185
Ending Balance	1,960
Commercial & Industrial
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	0
Adjustment to Beginning Balance due to PCD marks1			96
Charge offs	0
Recoveries	0
Allowance for credit losses on loans	127
Ending Balance	223
SBA 7(a)
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	0
Adjustment to Beginning Balance due to PCD marks1
Charge offs	0
Recoveries	0
Allowance for credit losses on loans	6
Ending Balance	$ 6

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

LEASES

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

LEASES

NOTE 16—LEASES:

Under ASC 842, operating lease expense is generally recognized on a straight-line basis over the term of the lease. The Company has entered into operating lease agreements for office space with remaining contractual terms up to five years, some of which include renewal options that extend the leases for up to 10 years. These renewal options are not considered in the remaining lease term unless it is reasonably certain the Company will exercise such options. The operating lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As the rate implicit in the leases generally is not readily determinable for our operating leases, the discount rates used to determine the present value of our lease liability are based on our incremental borrowing rate at the lease commencement date and commensurate with the remaining lease term. Our incremental borrowing rate for a lease is the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are excluded from our weighted-average remaining lease term.

The following table summarizes supplemental cash flow and other information related to our operating leases:


	Three Months Ended March 31,
		2023			2022
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)		$	709		$	461
Weighted-average remaining lease term - operating leases		3.63 years			4.91 years
Weighted-average discount rate - operating leases		5.64		%	4.76		%
Total lease costs (included in other general and administrative costs on the consolidated statements of operations)		$	949		$	239

The following table represents the maturity of the Company’s operating lease liabilities as of March 31, 2023:


Maturity of Lease Liabilities
2023	2,163
2024	2,820
2025	2,585
2026	2,035
2027	479
Thereafter	—
Total future minimum lease payments	$	10,082
Less: Imputed interest	$	(938)
Present value of future minimum lease payments	$	9,144

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Summary of obligations and commitments under operating lease and employment agreements

The following summarizes the Company’s obligations and commitments, as of March 31, 2023 for future minimum cash payments required under operating lease and employment agreements:


Year	Operating Leases		Employment Agreements1		Total
2023	$	2,163	$	2,131	$	4,294
2024	2,820		363		3,183
2025	2,585		—		2,585
2026	2,035		—		2,035
2027	479		—		479
Thereafter	—		—		—
Total	$	10,082	$	2,494	$	12,576

(1) Employment agreements with certain of the Company’s named executive officers