UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of Earliest Event Reported)
(Exact Name of Company as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (Commission File No.) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices and zip code)
(212 ) 356-9500
(Company’s telephone number, including area code)
(Former name or former address, if changed from last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Forward-Looking Statements
Statements in NewtekOne, Inc.’s (“NewtekOne” or the “Company”) Current Report on Form 8-K contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of NewtekOne's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause NewtekOne's actual results to differ materially from those described in the forward-looking statements can be found in NewtekOne's Annual Report on Form 10-K for the year ended December 31, 2022, which has been filed with the Securities and Exchange Commission and are available on NewtekOne's website (https://investor.newtekbusinessservices.com/sec-filings), and on the Securities and Exchange Commission’s website (www.sec.gov). Any forward-looking statements made by or on behalf of NewtekOne speak only as to the date they are made, and NewtekOne does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.
Item 2.02. Results of Operations and Financial Condition
NewtekOne is filing this Current Report on Form 8-K to correct information in certain tables and other information that appeared in the Management Discussion and Analysis sections of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, filed with the SEC on May11, 2023, and the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023, filed with the SEC on August 7, 2023 (each a “Report”). There are no changes to the financial statements contained in either Report. The corrections solely relate to typographical errors in the tables and information below. Although the corrections only relate to a limited number of figures in the tables, we have provided the full tables for convenience. In each case, investors should refer to these tables going forward. The information in this report shall be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended.
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023:
The table appearing under the heading “Loans” on page 59 is revised as follows:
| March 31, 2023 | December 31, 2022 | Change | |||||||||||||||
| Loans held for sale, at fair value | $ | 125,639 | $ | 19,171 | $ | 106,468 | |||||||||||
| Loans held for investment, at fair value | 532,788 | 505,268 | 27,520 | ||||||||||||||
| Loans held for investment, at amortized cost, net of deferred fees and costs | 166,828 | — | 166,828 | ||||||||||||||
| Allowance for credit losses | (2,189) | — | (2,189) | ||||||||||||||
| Total loans held for investment, at amortized cost, net | 164,639 | — | 164,639 | ||||||||||||||
| Total Loans | $ | 823,066 | $ | 524,439 | $ | 298,627 | |||||||||||
The table appearing under the heading “Borrowings” on page 60 is revised as follows:
| March 31, 2023 | December 31, 2022 | ||||||||||||||||
| Borrowings Outstanding | Borrowings Outstanding | Change | |||||||||||||||
| Capital One Lines of Credit: | |||||||||||||||||
| Capital One line of credit - guaranteed | $ | 46,150 | $ | 10,500 | $ | 35,650 | |||||||||||
| Capital One line of credit - unguaranteed | 67,603 | 45,385 | 22,218 | ||||||||||||||
| 113,753 | 55,885 | 57,868 | |||||||||||||||
| Other Bank Borrowings: | |||||||||||||||||
| Webster NMS Note | 39,538 | — | 39,538 | ||||||||||||||
| Webster CDS Line of Credit | 2,180 | — | 2,180 | ||||||||||||||
| SPV II Deutsche Bank Facility | 6,933 | — | 6,933 | ||||||||||||||
| SPV I Capital One Facility | 18,882 | — | 18,882 | ||||||||||||||
| SPV III One Florida Bank Facility | 13,613 | — | 13,613 | ||||||||||||||
| FHLB Advances | 24,531 | — | 24,531 | ||||||||||||||
| Total Lines of Credit | 105,677 | — | 105,677 | ||||||||||||||
| Notes due 2024, 2025, and 2026: | |||||||||||||||||
| 2024 Notes | 37,958 | 37,903 | 55 | ||||||||||||||
| 2025 5.00% Notes | 29,365 | 29,306 | 59 | ||||||||||||||
| 2025 8.125% Notes | 49,040 | — | 49,040 | ||||||||||||||
| 2026 Notes | 113,025 | 112,846 | 179 | ||||||||||||||
| Total 2024, 2025, and 2026 Notes | 229,388 | 180,055 | 49,333 | ||||||||||||||
| Notes payable - Securitization Trusts | 248,577 | 279,136 | (30,559) | ||||||||||||||
| Notes payable - related parties | — | 24,250 | (24,250) | ||||||||||||||
| Total | $ | 697,395 | $ | 539,326 | $ | 158,069 | |||||||||||
The table appearing under the heading “Interest Expense” on page 62 is revised as follows:
| (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change | ||||||||||||||
| Notes payable - Securitization Trusts | $ | 5,034 | $ | 1,490 | $ | 3,544 | |||||||||||
| Bank notes payable | 3,731 | 425 | 3,306 | ||||||||||||||
2024 Notes1 | 605 | 605 | — | ||||||||||||||
2025 6.85% Notes2 | — | 280 | (280) | ||||||||||||||
| 2025 5.00% Notes | 434 | — | 434 | ||||||||||||||
2025 8.125% Notes3 | 884 | — | 884 | ||||||||||||||
| 2026 Notes | 1,761 | 1,761 | — | ||||||||||||||
| Deposits | 1,475 | — | 1,475 | ||||||||||||||
| FHLB Advances | 207 | — | 207 | ||||||||||||||
| Notes payable - related parties | — | 106 | (106) | ||||||||||||||
| Total interest expense | $ | 14,131 | $ | 4,667 | $ | 9,464 | |||||||||||
(1) On December 29, 2021, the Company partially redeemed $40.0 million in aggregate principal amount of the $78.25 million principal amount of 2024 Notes outstanding at 100% of their principal amount ($25 per Note), plus the accrued and unpaid interest thereon from November 1, 2021 through, but excluding, the redemption date.
(2) On May 2, 2022, the Company redeemed all $15.0 million in aggregate principal amount of the 2025 6.85% Notes at 100% of their principal amount ($25 per Note), plus the accrued and unpaid interest thereon from February 28, 2022 through, but excluding, the redemption date.
(3) On January 23, 2023 the Company completed a private placement offering of $50.0 million aggregate principal amount of 8.125% notes due 2025. The Notes will mature on February 1, 2025. The Notes bear interest at a rate of 8.125% per year payable semiannually on February 1 and August 1 each year, commencing on August 1, 2023.
The table appearing under the heading “Non-Interest Expense” on page 66 is revised as follows:
| Three months ended March 31, | 2023/2022 Increase/(Decrease) | ||||||||||||||||||||||
| (in thousands) | 2023 | 2022 | Amount | Percent | |||||||||||||||||||
| Technology services expense | $ | 3,803 | $ | — | $ | 3,803 | 100.0 | % | |||||||||||||||
| Electronic payment processing expense | 4,504 | — | 4,504 | 100.0 | |||||||||||||||||||
| Salaries and employee benefits expense | 19,119 | 5,109 | 14,010 | 274.2 | |||||||||||||||||||
| Professional services expense | 3,440 | 1,301 | 2,139 | 164.4 | |||||||||||||||||||
| Other loan origination and maintenance expense | 2,827 | 6,483 | (3,656) | (56.4) | |||||||||||||||||||
| Depreciation and amortization | 873 | 63 | 810 | 1285.7 | |||||||||||||||||||
| Other general and administrative costs | 4,631 | 1,753 | 2,878 | 164.2 | |||||||||||||||||||
| Total other expense | $ | 39,197 | $ | 14,709 | $ | 24,488 | 166.5 | % | |||||||||||||||
The information appearing under the heading “Origination and Loan Processing” on page 66 is revised as follows:
Origination and loan processing expenses during the three months ended March 31, 2023 was $2.8 million compared to $6.5 million for the three months ended March 31, 2022. The change was due to the consolidation of the affiliated servicing company during the year, resulting in the elimination of the intercompany expenses.
The table appearing under the heading “Cash Flows and Liquidity” on page 74 is revised as follows:
| (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||||
| Net cash provided by (used in) operating activities | $ | (116,359) | $ | 6,478 | |||||||
| Net cash used in investing activities | (23,898) | — | |||||||||
| Net cash provided by (used in) financing activities | 186,899 | (29,884) | |||||||||
| Net (decrease) increase in cash and restricted cash | 46,642 | (23,406) | |||||||||
| Cash and restricted cash, beginning of period | 125,606 | 186,860 | |||||||||
| Consolidation of cash from controlled investments | 24,896 | — | |||||||||
| Cash and restricted cash, end of period | $ | 197,144 | $ | 163,454 | |||||||
The table appearing under the heading “Contractual Obligations” on page 75 is revised as follows:
| (in thousands) | Payments due by period | ||||||||||||||||||||||||||||||||||||||||
| Contractual Obligations | Total | 2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | ||||||||||||||||||||||||||||||||||
| Bank notes payable | $ | 113,753 | $ | 113,753 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||
| Webster NMS Note | 39,871 | — | — | — | — | 39,871 | — | ||||||||||||||||||||||||||||||||||
FHLB Advances1 | 24,761 | — | 6,000 | 6,000 | — | 12,761 | — | ||||||||||||||||||||||||||||||||||
| SPV I Capital One Facility | 19,347 | — | — | 19,347 | — | — | — | ||||||||||||||||||||||||||||||||||
| SPV III One Florida Bank Facility | 13,698 | — | 13,698 | — | — | — | — | ||||||||||||||||||||||||||||||||||
| SPV II Deutsche Bank Facility | 7,123 | — | 7,123 | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Webster CDS Line of Credit | 2,180 | 2,180 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Notes payable - Securitization Trusts1 | 252,128 | — | — | — | — | — | 252,128 | ||||||||||||||||||||||||||||||||||
2024 Notes1 | 38,250 | — | 38,250 | — | — | — | — | ||||||||||||||||||||||||||||||||||
2025 5.00% Notes1 | 30,000 | — | — | 30,000 | — | — | — | ||||||||||||||||||||||||||||||||||
2025 8.125% Notes1 | 50,000 | — | — | 50,000 | — | — | — | ||||||||||||||||||||||||||||||||||
2026 Notes1 | 115,000 | — | — | — | 115,000 | — | — | ||||||||||||||||||||||||||||||||||
| Employment agreements | 2,494 | 2,131 | 363 | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Operating leases | 10,082 | 2,163 | 2,820 | 2,585 | 2,035 | 479 | — | ||||||||||||||||||||||||||||||||||
| Totals | $ | 718,687 | $ | 120,227 | $ | 68,254 | $ | 107,932 | $ | 117,035 | $ | 53,111 | $ | 252,128 | |||||||||||||||||||||||||||
(1) These amounts are presented at the gross principal amounts outstanding and exclude unamortized debt issuance costs and purchase accounting adjustments.
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023:
The table appearing under the heading “Borrowings” on page 65 is revised as follows:
| June 30, 2023 | December 31, 2022 | ||||||||||||||||
| Borrowings Outstanding | Borrowings Outstanding | Change | |||||||||||||||
| Capital One Lines of Credit: | |||||||||||||||||
| Capital One line of credit - guaranteed | $ | 4,950 | $ | 10,500 | $ | (5,550) | |||||||||||
| Capital One line of credit - unguaranteed | 4,607 | 45,385 | (40,778) | ||||||||||||||
| 9,557 | 55,885 | (46,328) | |||||||||||||||
| Other Bank Borrowings: | |||||||||||||||||
| Webster NMS Note | 38,562 | — | 38,562 | ||||||||||||||
| SPV II Deutsche Bank Facility | 7,965 | — | 7,965 | ||||||||||||||
| SPV I Capital One Facility | 26,660 | — | 26,660 | ||||||||||||||
| SPV III One Florida Bank Facility | 26,684 | — | 26,684 | ||||||||||||||
| FHLB Advances | 24,085 | — | 24,085 | ||||||||||||||
| Total Lines of Credit | 123,956 | — | 123,956 | ||||||||||||||
| Notes due 2024, 2025, and 2026: | |||||||||||||||||
| 2024 Notes | 38,013 | 37,903 | 110 | ||||||||||||||
| 2025 5.00% Notes | 29,425 | 29,306 | 119 | ||||||||||||||
| 2025 8.125% Notes | 49,171 | — | 49,171 | ||||||||||||||
| 2026 Notes | 113,205 | 112,846 | 359 | ||||||||||||||
| Total 2024, 2025, and 2026 Notes | 229,814 | 180,055 | 49,759 | ||||||||||||||
| Notes payable - Securitization Trusts | 334,060 | 279,136 | 54,924 | ||||||||||||||
| Notes payable - related parties | — | 24,250 | (24,250) | ||||||||||||||
| Total | $ | 697,387 | $ | 539,326 | $ | 158,061 | |||||||||||
The table appearing under the heading “Net Realized Gains and Losses” on page 80 is revised as follows:
| (in thousands) | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Change | ||||||||||||||
| Net gains on sales of loans | $ | 13,208 | $ | 19,891 | $ | (6,683) | |||||||||||
| Net gain (loss) on loans accounted for under the fair value option | 4,363 | (5,789) | 10,152 | ||||||||||||||
| Loan servicing asset revaluation | (534) | (781) | 247 | ||||||||||||||
| Net gain on derivative transactions | 674 | — | 674 | ||||||||||||||
| Total net gains | $ | 17,711 | $ | 13,321 | $ | 4,390 | |||||||||||
The table appearing under the heading “Cash Flows and Liquidity” on page 88 is revised as follows:
| (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | ||||||||||||
| Net cash provided by (used in) operating activities | $ | (204,852) | $ | (65,181) | ||||||||||
| Net cash used in investing activities | (72,546) | (11) | ||||||||||||
| Net cash provided by (used in) financing activities | 385,820 | 4,358 | ||||||||||||
| Net (decrease) increase in cash and restricted cash | 108,422 | (60,834) | ||||||||||||
| Cash and restricted cash, beginning of period | 125,606 | 186,860 | ||||||||||||
| Consolidation of cash from controlled investments | 22,306 | — | ||||||||||||
| Cash and restricted cash, end of period | $ | 256,334 | $ | 126,026 | ||||||||||
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NEWTEKONE, INC. | ||||||||
| Date: August 24, 2023 | By: | /S/ BARRY SLOANE | ||||||
| Barry Sloane | ||||||||
| Chief Executive Officer, President and Chairman of the Board | ||||||||