0001587987-23-000225 | 10-Q | XBRL Viewer

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LOANS HELD FOR INVESTMENT - Aging Status (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	$ 280,934		$ 0
Total Loans Accounted for Under the Fair Value Option	492,987		505,268
Total	765,712
Deferred fees and costs	(126)		0
Allowance for credit losses	(8,209)	$ (4,764)	0
Total Loans	272,725		0
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	172,033		0
Total Loans Accounted for Under the Fair Value Option	0
Total	172,033
Allowance for credit losses	(1,431)	(1,373)	0
Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	8,430		0
Total Loans Accounted for Under the Fair Value Option	0
Total	8,430
Allowance for credit losses	(316)	(267)	0
SBA
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	100,597		0
Total Loans Accounted for Under the Fair Value Option	492,987		505,268
Total	593,584		505,268
Allowance for credit losses	(6,463)	$ (3,124)	0
Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	281,060		0
Total Loans Accounted for Under the Fair Value Option	492,987
Total	774,047
Performing \| 30-59 Days Past Due and Accruing \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	0
Performing \| 30-59 Days Past Due and Accruing \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	0
Performing \| 30-59 Days Past Due and Accruing \| SBA
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	0		18,681
Performing \| 30-59 Days Past Due and Accruing \| Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	0
Performing \| 60-89 Days Past Due and Accruing \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	0
Performing \| 60-89 Days Past Due and Accruing \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	0
Performing \| 60-89 Days Past Due and Accruing \| SBA
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	29,743		12,754
Performing \| 60-89 Days Past Due and Accruing \| Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	29,743
Performing \| 90 or more Days Past Due and Accruing \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	0
Performing \| 90 or more Days Past Due and Accruing \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	0
Performing \| 90 or more Days Past Due and Accruing \| SBA
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	10,759		0
Performing \| 90 or more Days Past Due and Accruing \| Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	10,759
Performing \| Total past Due and Non-accrual \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	4,621
Performing \| Total past Due and Non-accrual \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	0
Performing \| Total past Due and Non-accrual \| SBA
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	87,905		65,867
Performing \| Total past Due and Non-accrual \| Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	92,526
Performing \| Current \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	167,412
Performing \| Current \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	8,430
Performing \| Current \| SBA
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	505,678		439,401
Performing \| Current \| Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Carried at Amortized Cost	681,520
Nonperforming \| Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non- accrual	4,621
Nonperforming \| Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non- accrual	0
Nonperforming \| SBA
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non- accrual	47,403		$ 34,432
Nonperforming \| Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non- accrual	$ 52,024

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2023
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 19—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 Company filed its final RIC tax return for the year ended December 31, 2022. 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 September 30, 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. One of the Company’s former consolidated holding companies is undergoing a NYS tax audit for the fiscal years ended December 31, 2020 and December 31, 2021. Effective Tax Rate and Net Operating Losses The effective tax rate was 2.30% for the nine months ended September 30, 2023. The effective tax rate differs from the federal tax rate of 21% for the nine months ended September 30, 2023 due primarily to the recognition of subsidiary federal net operating losses (“NOLs”) expected to be realized in a federal consolidated return setting and other discrete items. At December 31, 2022, the Company had NOLs in the amount of $34.5 million. Certain of these NOLs ($4.6 million) expire in 2029 through 2037 with the remainder NOLs ($29.9 million) having 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’s 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
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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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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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
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-Paragraph 2
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-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

Reclassifications

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

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 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 held by Newtek Bank that are classified as “available for sale” and 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 instruments 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 instruments will decline. As interest rates fall and/or credit spreads tighten, the fair value of instruments will rise. The Company evaluates available-for-sale instruments in unrealized loss positions at least quarterly to determine if an allowance for credit losses is required.

Purchases and sales of debt securities are accounted for on a trade-date basis.

Cash

The Company considers all highly liquid instruments 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 September 30, 2023, cash deposits in excess of insured amounts totaled $63.4 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 September 30, 2023.

Restricted cash

Restricted cash includes amounts due on SBA loan-related remittances to third parties, cash reserves established as part of agreements with the SBA, cash reserves associated with securitization transactions, and cash margin as collateral for derivative instruments. As of September 30, 2023, total restricted cash was $70.7 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 September 30, 2023 and 2022 and December 31, 2022 and 2021:


	September 30, 2023		September 30, 2022		December 31, 2022		December 31, 2021
Cash and due from banks	$	15,610	$	7,355	$	53,692	$	2,397
Restricted cash	70,737		74,777		71,914		184,463
Interest bearing deposits in banks	137,346		—		—		—
Cash and restricted cash	$	223,693	$	82,132	$	125,606	$	186,860

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.

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. The guaranteed portion of the loans are held for sale and carried at LCM and therefore are not subject to CECL. The unguaranteed portion of the loans are held on balance sheet at amortized cost and are subject to CECL.

Allowance for Credit Losses – Available-for Sale (“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, Newtek 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 September 30, 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.

Settlement Receivable

Settlement receivable represents amounts due from third parties for guaranteed portions of SBA 7(a) loans which have been sold at period-end but have not yet settled.

Loans

Held for Investment

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are classified as held for investment.

At amortized cost, net of deferred fees and costs: Loans are reported at their principal amount outstanding, net of charge-offs, deferred origination costs and fees and purchase premiums and discounts. Loan origination and commitment fees and certain direct and indirect costs incurred in connection with loan originations are deferred and amortized to income over the life of the related loans as an adjustment to yield. Premiums or discounts on purchased portfolios are amortized or accreted to income using the level yield method over the remaining period to contractual maturity. Currently, all LHI at amortized cost, net of deferred fees and costs are originated and carried at Newtek Bank and have a weighted average life of five years. Newtek Bank originates SBA 7(a) loans, under its PLP status, and typically sells the guaranteed portions and holds the unguaranteed portions for investment. Newtek Bank also holds CRE and C&I loans for investment.

At fair value: On a quarterly basis, management determines the fair values of the retained unguaranteed portions of SBA 7(a) loans HFI, and unrealized changes in FV are recognized in the income statement. The loans within this portfolio were originated by NSBF. Refer to the “Fair Value Option” section below for further information on loans HFI carried at FV under the FV option.

Held for Sale

Management designates loans as HFS based on its intent to sell loans, or portions of loans, in established secondary markets or to participant banks and credit unions. Salability requirements of government guaranteed portions include, but are not limited to, full disbursement of the loan commitment amount. The Company occasionally transfers loans between the HFS and HFI classifications based on its intent and ability to hold or sell loans. Management’s intent to sell may be impacted by secondary market conditions, loan credit quality, or other factors.

At lower of amortized cost basis or fair value: Both mortgage and nonmortgage loans classified as HFS are carried at the LCM. If the amortized cost basis of a loan exceeds FV, a valuation allowance should be established for the difference. Currently, HFS loans at LCM are carried at Newtek Bank. This includes the government guaranteed portion of SBA 7(a) loans and SBA 504 loans. Management may also make a determination to market for sale certain CRE and C&I loans on a loan by loan basis.

At fair value: The Company originates nonconforming loans HFS via its nonbank subsidiaries, and joint ventures. Nonconforming loans are carried at FV. The Company also originated SBA 504 loans HFS prior to the Acquisition through its nonbank subsidiaries. SBA 504 loans HFS held at Holdco 6 are accounted for under the FV option. Nonconforming loans are held at Holdco 6, NCL JV, and TSO JV and are also accounted for under the FV option. Additionally, the existing government guaranteed portion of SBA 7(a) loans held at NSBF are also HFS at FV. Refer to the “Fair Value Option” section below for further information on loans HFS carried at FV under the FV option.

Fair Value Option

Those loans for which the FV option were elected are measured at FV and classified as either HFS or HFI, as outlined above. Not electing FV 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 FV was previously elected continue to be measured as such. Interest income is recognized in the same manner on loans reported at FV as on non-FV loans, except in regard to origination fees and costs which are recognized immediately upon FV election. The changes in FV of loans are reported in noninterest income as Net gain (loss) on loans accounted for under the fair value option. FV of loans includes adjustments for historical credit losses, market liquidity, and economic conditions.

Goodwill and Intangible Assets

Goodwill is an indefinite lived asset, which is not amortized and is instead subject to impairment testing, at least annually. Intangible assets, such as customer merchant accounts, with finite lives are amortized over an estimated useful life of 66 to 168 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.

Servicing AssetsThe Company accounts for servicing assets in accordance with ASC Topic 860-50 - Transfers and Servicing - Servicing Assets and Liabilities. The Company and Newtek Bank earn servicing fees from the guaranteed portions of SBA 7(a) loans they originate and sell. Servicing assets for loans originated by the Company’s nonbank subsidiaries are measured at FV at each reporting date and the Company reports changes in the FV of servicing assets in earnings in the period in which the changes occur. 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.

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 September 30, 2023, NSBF engaged in thirteen (13) 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 vehicles, based on its power to direct activities through its role as servicer for the Trusts and its obligation to absorb losses and right to receive benefits, it needed to consolidate the Trusts. The Company therefore consolidates the entities using the carrying amounts of the Trusts’ 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.

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.

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

Technology: 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.

Payments: 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 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.

At September 30, 2023 the allowance for doubtful accounts was $0.8 million. There was no allowance for doubtful accounts as of December 31, 2022 prior to the Acquisition.

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. Historically, the Company has not experienced uncollectible accrued interest receivable on investment securities.

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.

Derivative Instruments

The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets and liabilities 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.

Fixed AssetsFixed assets, which are composed of merchant processing 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

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.

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 or in full to the participant and amounts are recorded as a liability on the consolidated statements of assets and liabilities.

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.

Loan Interest Income Recognition

Held for Investment

At LCM: Interest on loans is generally recognized on a daily accrual basis at the applicable interest rate. Interest is not accrued on loans that are more than 90 days delinquent on payments, and any interest that was accrued but unpaid on such loans is reversed from interest income at that time, or when deemed to be uncollectible. Interest subsequently received on such loans is recorded as interest income or alternatively as a reduction in the amortized cost of the loan if there is significant doubt as to the collectability of the unpaid principal balance. Loans are returned to accrual status when principal and interest amounts contractually due are brought current and future payments are reasonably assured.

At FV: In accordance with accounting standards, any loans for which FV was previously elected continue to be measured as such. Interest income is recognized in the same manner on loans reported at FV as on non-FV loans, except in regard to origination fees and costs which are recognized immediately upon FV election. The changes in FV of loans are reported within noninterest income as Net gain (loss) on loans accounted for under the fair value option. FV of loans includes adjustments for historical credit losses, market liquidity, and economic conditions.

Held for Sale

At LCM: Net unrealized losses, if any, on loans without a FV election, are recognized through a valuation allowance and recorded as a charge to Other noninterest income. The cost basis of loans HFS includes unamortized loan origination fees and costs. The pro-rata portion, based on the percent of the total loan sold, of the remaining deferred fees and costs are recognized as an adjustment to the gain on sale. Not electing FV 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.

If the transfer is accounted for as a sale, the loans are derecognized from the Company’s consolidated balance sheet and a gain or loss is recognized in net gains on sales of loans line item on the consolidated statements of income. The gain on sale recognized in income is the sum of the premium on the guaranteed loan and the FV of the servicing assets recognized, less the discount recorded on the unguaranteed portion of the loan retained, and any FV fluctuations in associated exchange-traded interest rate futures contracts. If the transfer does not satisfy the aforementioned control criteria, the transaction is recorded as a secured borrowing with the transferred loans remaining on the Company’s consolidated balance sheet and proceeds recognized as a liability.

Non-Interest Income

Dividend income: Dividend income is recognized on an accrual basis for 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 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 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.

Servicing income: The Company earns servicing income related to the guaranteed portions of SBA 7(a) loan investments sold into the secondary market. These recurring servicing fees are earned and recorded daily. Servicing income is earned for the full term of the loan or until the loan is repaid.

Electronic payment processing 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’s revenue is primarily derived from electronic payment processing and related fee income.

Electronic payment processing and fee income is derived from NMS’s 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 September 30, 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.

Technology and IT support income

Our technology segment sells a range of services and goods, including managed IT services, product and procurement services, professional services, webhosting, secure private cloud hosting, and backup disaster recovery. Our technology segment sells hardware and software products on both a stand-alone basis without any services and as solutions bundled with services. When our technology segment provides a combination of hardware and software products with the provision of services, it separately identifies its performance obligations under its contract with the customer as the distinct goods (hardware and/or software products) or services that will be provided. The total transaction price for an arrangement with multiple performance obligations is allocated at contract inception to each distinct performance obligation in proportion to its stand-alone selling price. The stand-alone selling price is the price at which it would sell a promised good or service separately to a customer. Our technology segment estimates the price based on observable inputs, including direct labor hours and allocatable costs, or uses observable stand-alone prices when they are available. Our technology segment’s professional services include the design and implementation of a wide range of IT products and services. Such services are typically provided by us or third-party sub-contractor vendors on a stand-alone basis.

Revenue is measured based on the consideration specified in a contract with a customer. Our technology segment recognizes revenue when it satisfies a performance obligation by transferring control of a product or service or by arranging for the sale of a vendor’s products or service to a customer. Our technology segment recognizes revenue from sale of services as its technology segment performs the underlying services, typically based on time and materials basis based upon hours incurred for the performance completed to date for which we have the right to consideration. Our technology segment recognizes revenue on sales of goods at a point in time when customer takes control of goods, which typically occurs when title and risk of loss have passed to the customer. Our technology segment recognizes revenue on a gross basis for each of its services and product offerings principally because it is primarily responsible for fulfilling the promise to provide specified goods or service and it has discretion in establishing the price of specified good or service.

Other noninterest income:

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.

Realized gains or losses on joint ventures: 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 joint venture investments as a component of the net change in unrealized appreciation (depreciation) on joint ventures in the consolidated statements of operations

Other: 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 loans with non-affiliates.

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 September 30, 2023, the Company partnered with two sponsor banks for substantially all merchant transactions. Substantially all merchant transactions were processed by one merchant processor.

Technology Services Expenses

Costs of services and goods sold include product costs, outbound and inbound freight costs, and direct time and materials in delivering service and goods to customers.

Selling and administrative expenses include salaries and wages for staff who are not directly associated with delivering services, bonuses and incentives, employee-related expenses, facility-related expenses, marketing and advertising expense, depreciation of property and equipment, professional fees, amortization of intangible assets, provisions for losses on accounts receivable and other operating expenses.

Stock – Based Compensation

The Company accounts for its equity-based compensation plans 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.

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 assets and liabilities recorded on the statement of financial condition were a deferred tax asset, net of $8.7 million at September 30, 2023 and a deferred tax liability, net of $19.2 million at December 31, 2022, respectively.

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 on January 1, 2023 with the start of the 2023 fiscal year, the Company no longer qualifies as a RIC and will be subject to corporate level income tax. See NOTE 19—INCOME TAXES.

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 20—SEGMENTS. In determining the appropriateness of a segment definition, the Company considers the criteria of FASB ASC 280, Segment Reporting.

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 Company 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.

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.

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.

INVESTMENTS - Available-for-Sale Debt Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	$ 33,420
Unrealized Gains	0
Unrealized Losses	281
Fair Value	33,138
Total available for sale securities pledge	30,720	$ 0
U.S. Treasury notes
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	29,420
Unrealized Gains	0
Unrealized Losses	98
Fair Value	29,321
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	183
Fair Value	3,817
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	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	$ 30,720	$ 0

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 08, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 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)		24,648,181
Entity Central Index Key	0001587987
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
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
8.00% Notes due 2028
Document Information [Line Items]
Title of 12(b) Security	8.00% Notes due 2028
Trading Symbol	NEWTI
Security Exchange Name	NASDAQ

STOCK BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 0.6	$ 0.6	$ 2.0	$ 1.8
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unrecognized compensation expense	$ 4.1		$ 4.1
Remaining weighed-average period			1 year 9 months 18 days
Restricted Stock [Member] \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting period			1 year
Restricted Stock [Member] \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting period			3 years

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Section 50
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Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

+ Details

DEPOSITS (Tables)

9 Months Ended

Sep. 30, 2023

Banking and Thrift, Interest [Abstract]

Deposit liabilities

The following table summarizes deposits by type:


	September 30, 2023		December 31, 2022
Non-interest-bearing:
Demand	$	20,316	$	—
Interest-bearing:
Checking	3,409		—
Money market	32,807		—
Savings	229,502		—
Time deposits	146,525		—
Total interest-bearing	$	412,243	$	—
Total deposits	$	432,559	$	—

Time deposits, money market, and interest-bearing checking obtained through brokers	$	37,143	$	—
Aggregate amount of deposit accounts that exceeded the FDIC limit	$	72,772	$	—
Demand deposit overdrafts reclassified as loan balances	$	1	$	—

Time deposit maturities

The following table summarizes the scheduled maturities of time deposits:


Remainder of 2023	$	66,090
2024	26,342
2025	16,269
2026	21,702
2027	15,491
Thereafter	631
Total time deposits	$	146,525

- Definition

Tabular disclosure of type of deposit liability.

+ References

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

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (1)
-Publisher SEC

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (2)
-Publisher SEC

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (3)
-Publisher SEC

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (4)
-Publisher SEC

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (5)
-Publisher SEC

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

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

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

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (1)
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Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)
-Publisher SEC

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
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Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(ii)
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Reference 14: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iii)
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Reference 15: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iv)
-Publisher SEC

+ Details

INVESTMENTS - Joint Venture Summarized Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Investment Company, Balance Sheet Items [Abstract]
Cash	$ 15,610	$ 7,355	$ 15,610	$ 7,355	$ 53,692	$ 2,397
Restricted cash	70,737	74,777	70,737	74,777	71,914	$ 184,463
Investments in loans, at fair value	42,073		42,073		283,599
Cost	39,225		39,225		156,169
Other assets	50,688		50,688		28,506
Total assets	1,380,413		1,380,413		998,902
Total liabilities	1,153,390		1,153,390		623,544
Net assets	227,023		227,023		375,358
Total liabilities and shareholders' equity	1,380,413		1,380,413		998,902
Investment Company, Income and Expense [Abstract]
Net investment income (loss)		205		(1,076)
Realized gain on derivative transactions	1,158	0	843	445
Unrealized loss on derivative transactions	(441)	0	54	183
Net increase (decrease) in net assets resulting from operations	9,975	11,362	28,545	34,533
Newtek Conventional Lending, LLC
Investment Company, Balance Sheet Items [Abstract]
Cash	557		557		791
Restricted cash	2,115		2,115		2,362
Investments in loans, at fair value	71,698		71,698		78,595
Cost	70,173		70,173		78,785
Other assets	1,624		1,624		1,807
Total assets	75,994		75,994		83,555
Securitization notes payable	39,775		39,775		49,273
Other Liabilities	782		782		1,109
Total liabilities	40,557		40,557		50,382
Net assets	35,437		35,437		33,173
Total liabilities and shareholders' equity	75,994		75,994		83,555
Investment Company, Income and Expense [Abstract]
Interest and other income	1,291	1,744	4,576	5,258
Total expenses	614	737	1,923	2,223
Net investment income (loss)	677	1,007	2,653	3,035
Unrealized appreciation on investments	(216)	(2,778)	1,713	(4,824)
Net increase (decrease) in net assets resulting from operations	461	(1,771)	4,366	(1,789)
Newtek-TSO JV
Investment Company, Balance Sheet Items [Abstract]
Cash	3,921		3,921		1,046
Restricted cash	999		999		498
Investments in loans, at fair value	65,784		65,784		22,449
Cost	63,102		63,102		21,038
Other assets	1,742		1,742		2,034
Total assets	72,446		72,446		26,027
Bank notes payable	29,636		29,636		12,950
Other Liabilities	783		783		206
Total liabilities	30,419		30,419		13,156
Net assets	42,027		42,027		12,871
Total liabilities and shareholders' equity	72,446		72,446		$ 26,027
Investment Company, Income and Expense [Abstract]
Interest and other income	876	0	1,968	0
Total expenses	1,424	0	3,042	0
Net investment income (loss)	(548)	0	(1,074)	0
Unrealized appreciation on investments	1,464	0	1,270	0
Realized loss on investments	0	0	(16)	0
Realized gain on derivative transactions	351	0	518	0
Unrealized loss on derivative transactions	(151)	0	(146)	0
Net increase (decrease) in net assets resulting from operations	$ 1,116	$ 0	$ 552	$ 0

BORROWINGS - Fair Value of Debt (Details) $ in Thousands	Sep. 30, 2023 USD ($) $ / shares	Dec. 31, 2022 USD ($) $ / shares
Debt Instrument [Line Items]
Borrowings	$ 644,445	$ 541,356
2028 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Borrowings	$ 38,704
2028 Notes \| Medium-term Notes \| Measurement Input, Share Price
Debt Instrument [Line Items]
Closing price (in dollars per share) \| $ / shares	24.19
2026 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Borrowings	$ 110,630	$ 118,542
2026 Notes \| Medium-term Notes \| Measurement Input, Share Price
Debt Instrument [Line Items]
Closing price (in dollars per share) \| $ / shares	24.05	25.77
2024 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Borrowings	$ 37,868	$ 37,944
2024 Notes \| Medium-term Notes \| Measurement Input, Share Price
Debt Instrument [Line Items]
Closing price (in dollars per share) \| $ / shares	24.75	24.80

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482900/835-30-50-1

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(f))
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1B
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

LOANS HELD FOR INVESTMENT - Narrative (Details) $ in Millions	Sep. 30, 2023 USD ($)
Receivables [Abstract]
Contractual principal balance	$ 5.3

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

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 September 30, 2023 and December 31, 2022:


	Fair Value Measurements at September 30, 2023
	Total		Level 1		Level 2		Level 3
Assets:

Debt securities available-for-sale
U.S. Treasury notes	$	29,321	$	29,321	$	—	$	—
Government agency debentures	3,817		—		3,817		—
Loans held for sale, at fair value	70,467		—		1,251		69,216
Loans held for investment, at fair value	492,987		—		—		492,987
Other real estate owned 1	2,829		—		—		2,829
Non-controlled/affiliate investments	1,360		—		—		1,360
Servicing assets	31,292		—		—		31,292
Derivative instruments1,2	122		—		122		—
Joint ventures	40,713		—		—		40,713
Total assets	$	672,908	$	29,321	$	5,190	$	638,397
Liabilities:
Equity warrants3	$	194	$	—	$	—	$	194

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

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

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


	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 following tables represents the changes in the investments, servicing assets and liabilities measured at fair value using Level 3 inputs for the nine months ended September 30, 2023 and 2022:


	Nine Months Ended September 30, 2023
	Loans HFI, at FV		Loans HFS, at FV		Controlled Investments		Joint Ventures		Servicing Assets		Non-Control Investments		Warrant Liabilities2		Other Real Estate Owned1
Fair value, December 31, 2022	$	505,268	$	—	$	259,217	$	23,022	$	30,268	$	1,360	$	—	$	3,529
Additions/(removal) of entities consolidating after Conversion to BHC	—		69,745		(259,217)		—		—		—		—		—
Reclass of loans HFS to HFI	5,879		—		—		—		—		—		—		—
Reclass of loans HFS at FV to HFS at LCM			(18,833)		—		—		—		—		—		—
Net gain (loss) on loans under the fair value option	12,132		1,071		—		—		—		—		—		—
Gain (loss) on sales	(18,032)		(37)		—		—		—		—		—		(457)
SBA loans, funded	38,616		42,966		—		—		—		—		—		—
Conventional loans, funded	—		44,660		—		—		—		—		—		—
Foreclosed real estate acquired	(2,195)		—		—		—		—		—		—		2,195
Purchase of loans	—		5,279		—		—		—		—		—		—
Repurchases of SBA loans	9,461		—		—		—		—		—		—		—
Sales	—		(68,960)		—		—		—		—		—		(2,198)


Principal payments received	(58,142)		(6,675)		—		—		—		—		—		—
Change in valuation due to:
Changes in valuation inputs or assumptions	—		—		—		3,141		3,584		—		(117)		—
Other factors	—		—		—		—		(5,150)		—		—		(240)
Additions	—		—		—		14,550		2,590		—		311		—
Fair value, September 30, 2023	$	492,987	$	69,216	$	—	$	40,713	$	31,292	$	1,360	$	194	$	2,829

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

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


	Nine Months Ended September 30, 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	(6,473)		5,295		—		—		(172)
Change in net unrealized depreciation on servicing assets due to factors other than changes in valuation inputs or assumptions	—		—		(3,964)		—		—
Realized loss	(8,131)		—		—		—		(205)
SBA unguaranteed non-affiliate investments, funded	142,974		—		—		—		—
Foreclosed real estate acquired	(1,646)		—		—		—		1,646
Purchase of investments	—		26,308		—		360		—
Purchase of loans from SBA	600		—		—		—		—
Sale of investment	—		—		—		—		(1,308)

Principal payments received on debt investments	(63,365)		(5,870)		—		—		—
Additions to servicing assets	—		—		9,486		—		—
Fair value, September 30, 2022	$	488,376	$	256,668	$	33,530	$	1,360	$	2,315

(1) Included in Other Assets on 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:


	September 30, 2023
	Carrying Amount		Fair Value Amount by Level:						Total Fair Value
			Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	15,610	$	15,610	$	—	$	—	$	15,610
Restricted cash	70,737		70,737		—		—		70,737
Interest bearing deposits in banks	137,346		137,346		—		—		137,346
Loans held for sale, at LCM	48,450		—		—		48,715		48,715
Total loans held for investment, at amortized cost, net of deferred fees and costs	280,934		—		—		281,759		281,759
Federal Home Loan Bank and Federal Reserve Bank stock	3,657		—		3,657		—		3,657
Servicing assets at LCM	5,482		—		—		5,646		5,646
Financial Liabilities:
Deposits	432,559		—		435,875		—		435,875
Borrowings	648,700		—		187,202		457,243		644,445

	December 31, 2022
	Carrying Amount		Fair Value Amount by Level:						Total Fair Value
			Level 1		Level 2		Level 3
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		—		152,162		389,194		541,356

Fair value and valuation assumption

The following tables summarizes the fair value and valuation assumptions related to servicing assets at September 30, 2023 and December 31, 2022:


	September 30, 2023								December 31, 2022
			Weighted		Range						Weighted		Range
Unobservable Input	Amount		Average		Minimum		Maximum		Amount		Average		Minimum		Maximum

Servicing Assets at FV:	$	31,292							$	30,268
Discount factor1			13.75	%	13.75	%	13.75	%			16.50	%	16.50	%	16.50	%
Cumulative prepayment rate			22.50	%	22.50	%	22.50	%			25.00	%	25.00	%	25.00	%
Average cumulative default rate			19.00	%	19.00	%	19.00	%			25.00	%	25.00	%	25.00	%

Servicing Assets at LCM:	5,482								—
Discount factor1			13.75	%	13.75	%	13.75	%			—	%	—	%	—	%
Cumulative prepayment rate			22.50	%	22.50	%	22.50	%			—	%	—	%	—	%
Average cumulative default rate			19.00	%	19.00	%	19.00	%			—	%	—	%	—	%

Total	$	36,774							$	30,268

(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 September 30, 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 September 30, 2023 and December 31, 2022.


	Fair Value as of			Weighted		Range
	September 30, 2023		Unobservable Input	Average1		Minimum		Maximum
Assets:
Held for investment, at fair value - accrual loans	$	446,220	Market yields	8.50	%	8.50	%	8.50	%
			Cumulative prepayment rate	22.50	%	22.50	%	22.50	%
			Average cumulative default rate	19.00	%	19.00	%	19.00	%
Held for investment, at fair value - non-accrual loans	$	46,767	Market yields	8.80	%	8.80	%	8.80	%
			Cumulative prepayment rate	—	%	—	%	—	%
			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Held for sale, at fair value	$	69,216	Market yields	7.55	%	7.55	%	7.55	%
			Cumulative prepayment rate	55.60	%	55.60	%	55.60	%
			Average cumulative default rate	20.00	%	20.00	%	20.00	%
Joint Ventures	$	40,713	Market yields	9.00	%	9.00	%	9.00	%
			Cost of equity	11.00	%	10.00	%	12.00	%
			Weighted average cost of capital	8.50	%	7.50	%	9.50	%
Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Cost basis	N/A		N/A		N/A
Servicing assets1	$	31,292	Market yields	13.75	%	13.75	%	13.75	%
			Cumulative prepayment rate	22.50	%	22.50	%	22.50	%
			Average cumulative default rate	19.00	%	19.00	%	19.00	%
Other real estate owned	$	2,829	Appraised value	N/A		N/A		N/A

Liabilities:
Equity warrants	$	194	Expected volatility	47.00	%	47.00	%	47.00	%
			Dividend yield	4.90	%	4.90	%	4.90	%
			Risk free rate	4.59	%	4.59	%	4.59	%

(1) $31.3 million of servicing assets at held at FV and $5.5 million of servicing assets are held at LCM. Refer to NOTE 7—SERVICING ASSETS.


	Fair Value as of			Weighted		Range
	December 31, 2022		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	470,835	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	$	34,433	Market yields	8.87	%	8.87	%	8.87	%
			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	241,113	EBITDA multiples-TTM2	8.00x		7.50x		8.50x
			EBITDA multiples-NTM2	6.90x		6.00x		7.50x
			Revenue multiples2	2.46x		0.80x		3.20x
			Book value multiples2	1.00x		0.80x		1.20x
			Weighted average cost of capital2	13.20	%	11.50	%	23.60	%
Controlled debt investments	$	18,104	Market yields	10.00	%	10.00	%	10.00	%
Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Recent transaction	N/A		N/A		N/A
Servicing assets	$	30,268	Market yields	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	%
Other real estate owned	$	3,529	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.

(2) The Company valued $145.6 million of investments using a combination of EBITDA, 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 $95.3 million of investments using only discounted cash flows.

LOANS HELD FOR INVESTMENT - Allowance for Credit Loss (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	$ 4,764	$ 0
Adjustment to Beginning Balance due to PCD marks1				$ 870
Charge offs	0	0
Recoveries	0	0
Provision	3,446	7,339	$ 0
Ending Balance	8,209	8,209
Commercial Real Estate
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	1,373	0
Adjustment to Beginning Balance due to PCD marks1				774
Charge offs	0	0
Recoveries	0	0
Provision	58	657
Ending Balance	1,431	1,431
Commercial & Industrial
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	267	0
Adjustment to Beginning Balance due to PCD marks1				$ 96
Charge offs	0	0
Recoveries	0	0
Provision	49	220
Ending Balance	316	316
SBA
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	3,124	0
Charge offs	0	0
Recoveries	0	0
Provision	3,339	6,463
Ending Balance	$ 6,463	$ 6,463

- Definition

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

+ References + Details

INVESTMENTS

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

NOTE 4—INVESTMENTS:

Investments consisted of the following at:


	September 30, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Non-controlled equity investments	$	1,360	$	1,360	$	1,360	$	1,360
Joint ventures	37,865		40,713		23,314		23,022
Controlled investments:
Equity	—		—		99,195		241,113
Debt	—		—		32,300		18,104
Total investments	$	39,225	$	42,073	$	156,169	$	283,599

The Company’s Non-Conforming Conventional Loan Program

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 the Company, and Conventional Lending TCP Holding, LLC, a wholly-owned, indirect subsidiary of BlackRock TCP Capital Corp. (Nasdaq: TCPC). NCL JV ceased funding new 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 NCL JV’s 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	September 30, 2023		December 31, 2022
	(Unaudited)		(Unaudited)
Cash	$	557	$	791
Restricted cash	2,115		2,362
Investments in loans, at fair value (amortized cost of $70,173 and $78,785, respectively)	71,698		78,595
Other Assets	1,624		1,807
Total assets	$	75,994	$	83,555

Securitization notes payable	$	39,775	$	49,273
Other liabilities	782		1,109
Total liabilities	40,557		50,382

Net assets	35,437		33,173
Total liabilities and net assets	$	75,994	$	83,555


Selected Statements of Operations Information	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022


	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Interest and other income	$	1,291	$	1,744	$	4,576	$	5,258
Total expenses	614		737		1,923		2,223
Net investment income	677		1,007		2,653		3,035
Unrealized (depreciation) appreciation on investments	(216)		(2,778)		1,713		(4,824)
Net increase (decrease) in net assets resulting from operations	$	461	$	(1,771)	$	4,366	$	(1,789)

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 in non-conforming conventional commercial and industrial term loans 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	September 30, 2023		December 31, 2022
	(Unaudited)		(Unaudited)
Cash	$	3,921	$	1,046
Restricted cash	999		498
Investments in loans, at fair value (amortized cost of $63,102 and $21,038, respectively)	65,784		22,449
Other assets	1,742		2,034
Total assets	$	72,446	$	26,027

Bank notes payable	$	29,636	$	12,950


Other liabilities	783		206
Total liabilities	30,419		13,156

Net assets	42,027		12,871
Total net assets	$	72,446	$	26,027


Selected Statements of Operations Information	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Interest and other income	$	876	$	—	$	1,968	$	—
Total expenses	1,424		—		3,042		—
Net investment loss	(548)		—		(1,074)		—
Unrealized appreciation on investments	1,464		—		1,270		—
Realized loss on investments	—		—		(16)		—
Realized gain on derivative transactions	351		—		518		—
Unrealized loss on derivative transactions	(151)		—		(146)		—
Net increase in net assets resulting from operations	$	1,116	$	—	$	552	$	—

Debt Securities Available-for-Sale

The following tables summarize the amortized cost and fair value of available-for-sale securities by major type as of September 30, 2023:


At September 30, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury notes	$	29,420	$	—	$	98	$	29,321
Government agency debentures	4,000		—		183		3,817
Total available for sale securities	$	33,420	$	—	$	281	$	33,138

There was $0.1 million accrued interest receivable on available-for-sale securities at September 30, 2023, and is included in Other assets in the accompanying Unaudited Consolidated Statements of Financial Condition.

During the three and nine months ended September 30, 2023, no securities were sold or settled.

Unrealized Losses

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


	At September 30, 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	$	29,321	$	98	$	—	$	—	2		$	29,321	$	98
Government agency debentures	3,817		183		—		—		3		3,817		183
Total	$	33,138	$	281	$	—	$	—	$	5	$	33,138	$	281

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 Newtek Bank 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 Newtek Bank 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 September 30, 2023				At December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Maturing within 1 year	$	30,420	$	30,321	$	—	$	—
After 1 year through 5 years	3,000		2,817		—		—


Total available for sale securities	$	33,420	$	33,138	$	—	$	—

Other information

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


	At September 30, 2023		At December 31, 2022
Pledged for deposits	$	—	$	—
Pledged for borrowings and other	30,720		—
Total available for sale securities pledge	$	30,720	$	—

GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying Amount	$ 18,426	$ 0
Accumulated Amortization	(12,403)	0
Net Carrying amount	6,023	0
Core Deposits
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying Amount	1,040	0
Accumulated Amortization	(150)	0
Net Carrying amount	890	0
Technology Customer lists \| Payments
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying Amount	8,575	0
Accumulated Amortization	(8,488)	0
Net Carrying amount	87	0
Technology Customer lists \| Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying Amount	8,811	0
Accumulated Amortization	(3,765)	0
Net Carrying amount	$ 5,046	$ 0

SERVICING ASSETS

9 Months Ended

Sep. 30, 2023

Transfers and Servicing [Abstract]

SERVICING ASSETS

NOTE 7—SERVICING ASSETS:

Servicing assets held by NSBF and Newtek Bank are measured at fair value and lower of cost or market, respectively. The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells. As of September 30, 2023 the Company services $1.7 billion in SBA 7(a) loans.

The following tables summarizes the fair value and valuation assumptions related to servicing assets at September 30, 2023 and December 31, 2022:


	September 30, 2023								December 31, 2022
			Weighted		Range						Weighted		Range
Unobservable Input	Amount		Average		Minimum		Maximum		Amount		Average		Minimum		Maximum

Servicing Assets at FV:	$	31,292							$	30,268
Discount factor1			13.75	%	13.75	%	13.75	%			16.50	%	16.50	%	16.50	%
Cumulative prepayment rate			22.50	%	22.50	%	22.50	%			25.00	%	25.00	%	25.00	%
Average cumulative default rate			19.00	%	19.00	%	19.00	%			25.00	%	25.00	%	25.00	%

Servicing Assets at LCM:	5,482								—
Discount factor1			13.75	%	13.75	%	13.75	%			—	%	—	%	—	%
Cumulative prepayment rate			22.50	%	22.50	%	22.50	%			—	%	—	%	—	%
Average cumulative default rate			19.00	%	19.00	%	19.00	%			—	%	—	%	—	%

Total	$	36,774							$	30,268

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

Servicing fee income earned for the three months ended September 30, 2023 and 2022 was $4.6 million and $3.6 million, respectively. Servicing fee income earned for the nine months ended September 30, 2023 and 2022 was $13.3 million and $9.9 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 860
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1A
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481420/860-30-50-1A

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 860
-SubTopic 50
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)(7)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481229/860-50-50-4

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 860
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (b)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481326/860-20-50-3

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 860
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (b)(2)(ii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481326/860-20-50-3

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 860
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481326/860-20-50-4

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479617/946-210-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 860
-SubTopic 50
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481229/860-50-50-3

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 860
-SubTopic 50
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)(4)(ii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481229/860-50-50-3

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 860
-SubTopic 50
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)(5)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481229/860-50-50-3

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 860
-SubTopic 50
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481229/860-50-50-2

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-Topic 860
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//860/tableOfContent

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-Topic 860
-SubTopic 20
-Name Accounting Standards Codification
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-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481326/860-20-50-3

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 860
-SubTopic 20
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147481326/860-20-50-3

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-SubTopic 20
-Name Accounting Standards Codification
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+ Details

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	9 Months Ended
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	Sep. 30, 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 provider of business and financial solutions 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 NBNYC’s 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 (NBL was subsequently merged into 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 subsidiary, SBL, the following NewtekOne portfolio companies and subsidiaries are now consolidated non-bank subsidiaries in the Company’s financial statements: NSBF; NMS; Mobil Money; NBC; PMT; NIA; TAM; Holdco 6; NCL; EWS; and NTS. Our investment in POS 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 NTS, including its subsidiary SIDCO, and EWS, within two years of becoming a financial holding company, subject to any extension of the two-year period. Moreover, on April 13, 2023, the Company, NSBF and the SBA entered into an agreement in connection with NSBF’s and Newtek Bank’s participation in the SBA 7(a) loan program (the "Wind-down Agreement"). The Company’s business plan prepared in connection with the Acquisition 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 Wind-down Agreement, NSBF has begun to wind-down its operations and NSBF’s SBA 7(a) pipeline of new loans was transitioned to Newtek Bank during the second quarter of 2023. 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. SBL will service and liquidate NSBF’s SBA loan portfolio, including processing forgiveness and loan reviews for PPP Loans, pursuant to an SBA approved lender service provider agreement. 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 the SBA for post-purchase denials and repairs on the guaranteed portions of SBA 7(a) loans originated and sold by NSBF. The Company has guaranteed NSBF’s obligations to the SBA and has funded a $10 million account at Newtek Bank to secure these potential obligations. As a result of the Acquisition and its effects as described above, comparisons to prior periods 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 the Company’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.

STOCK BASED COMPENSATION

9 Months Ended

Sep. 30, 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 measures 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 Compensation, Corporate Governance and Nominating Committee of the Board approves the issuance of shares of restricted stock to employees and directors pursuant to the following Board and shareholder equity incentive plans: the 2015 Stock Incentive Plan, which was terminated by the Board in April 2023, and the 2023 Stock Incentive Plan, which was approved by the Board in April 2023 and the Company’s shareholders on June 14, 2023. Shares of restricted stock granted under these plans 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 2015 Stock Incentive Plan, net of shares forfeited, if any.


Restricted Stock authorized under the 2015 plan1						1,500,000
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)
Nine months ended September 30, 2023						28,409
Total net restricted stock (granted)/forfeited						(660,021)

(1) No stock options were granted under the 2015 Stock Incentive Plan. The 2015 Stock Incentive Plan was terminated by the Board in April 2023 and the 2023 Stock Incentive Plan was approved by the Board in April 2023 and the Company’s shareholders on June 14, 2023. As of September 30, 2023, there was $4.1 million of total unrecognized compensation expense related to unvested shares of restricted stock granted. This compensation expense is expected to be recognized over a remaining weighted-average period of approximately 1.8 years as of September 30, 2023.For the three months ended September 30, 2023 and 2022 the Company recognized total stock-based compensation expense of $0.6 million and $0.6 million, respectively. For the nine months ended September 30, 2023 and 2022 the Company recognized total stock-based compensation expense of $2.0 million and $1.8 million, respectively.

DERIVATIVE INSTRUMENTS - Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Unrealized Gain (Loss) on Derivatives	$ (441)	$ 0	$ 54	$ 183
Gain (Loss) on Sale of Derivatives	$ 1,158	$ 0	$ 843	$ 445

- Definition

The net change in the difference between the fair value and the carrying value, or in the comparative fair values, of derivative instruments, including options, swaps, futures, and forward contracts, held at each balance sheet date, that was included in earnings for the period.

+ References + Details

BUSINESS COMBINATION - Purchase Price (Details) - USD ($) $ in Thousands	Jan. 06, 2023	Sep. 30, 2023	Dec. 31, 2022
Fair value of assets acquired:
Goodwill		$ 21,134	$ 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	1,224
Core deposit intangible	1,040
Deferred tax asset	760
Other Assets	927
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

SERVICING ASSETS (Tables)

9 Months Ended

Sep. 30, 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 September 30, 2023 and December 31, 2022:


	September 30, 2023								December 31, 2022
			Weighted		Range						Weighted		Range
Unobservable Input	Amount		Average		Minimum		Maximum		Amount		Average		Minimum		Maximum

Servicing Assets at FV:	$	31,292							$	30,268
Discount factor1			13.75	%	13.75	%	13.75	%			16.50	%	16.50	%	16.50	%
Cumulative prepayment rate			22.50	%	22.50	%	22.50	%			25.00	%	25.00	%	25.00	%
Average cumulative default rate			19.00	%	19.00	%	19.00	%			25.00	%	25.00	%	25.00	%

Servicing Assets at LCM:	5,482								—
Discount factor1			13.75	%	13.75	%	13.75	%			—	%	—	%	—	%
Cumulative prepayment rate			22.50	%	22.50	%	22.50	%			—	%	—	%	—	%
Average cumulative default rate			19.00	%	19.00	%	19.00	%			—	%	—	%	—	%

Total	$	36,774							$	30,268

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


	Fair Value as of			Weighted		Range
	September 30, 2023		Unobservable Input	Average1		Minimum		Maximum
Assets:
Held for investment, at fair value - accrual loans	$	446,220	Market yields	8.50	%	8.50	%	8.50	%
			Cumulative prepayment rate	22.50	%	22.50	%	22.50	%
			Average cumulative default rate	19.00	%	19.00	%	19.00	%
Held for investment, at fair value - non-accrual loans	$	46,767	Market yields	8.80	%	8.80	%	8.80	%
			Cumulative prepayment rate	—	%	—	%	—	%
			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Held for sale, at fair value	$	69,216	Market yields	7.55	%	7.55	%	7.55	%
			Cumulative prepayment rate	55.60	%	55.60	%	55.60	%
			Average cumulative default rate	20.00	%	20.00	%	20.00	%
Joint Ventures	$	40,713	Market yields	9.00	%	9.00	%	9.00	%
			Cost of equity	11.00	%	10.00	%	12.00	%
			Weighted average cost of capital	8.50	%	7.50	%	9.50	%
Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Cost basis	N/A		N/A		N/A
Servicing assets1	$	31,292	Market yields	13.75	%	13.75	%	13.75	%
			Cumulative prepayment rate	22.50	%	22.50	%	22.50	%
			Average cumulative default rate	19.00	%	19.00	%	19.00	%
Other real estate owned	$	2,829	Appraised value	N/A		N/A		N/A

Liabilities:
Equity warrants	$	194	Expected volatility	47.00	%	47.00	%	47.00	%
			Dividend yield	4.90	%	4.90	%	4.90	%
			Risk free rate	4.59	%	4.59	%	4.59	%

(1) $31.3 million of servicing assets at held at FV and $5.5 million of servicing assets are held at LCM. Refer to NOTE 7—SERVICING ASSETS.


	Fair Value as of			Weighted		Range
	December 31, 2022		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	470,835	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	$	34,433	Market yields	8.87	%	8.87	%	8.87	%
			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	241,113	EBITDA multiples-TTM2	8.00x		7.50x		8.50x
			EBITDA multiples-NTM2	6.90x		6.00x		7.50x
			Revenue multiples2	2.46x		0.80x		3.20x
			Book value multiples2	1.00x		0.80x		1.20x
			Weighted average cost of capital2	13.20	%	11.50	%	23.60	%
Controlled debt investments	$	18,104	Market yields	10.00	%	10.00	%	10.00	%
Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Recent transaction	N/A		N/A		N/A
Servicing assets	$	30,268	Market yields	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	%
Other real estate owned	$	3,529	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.

LOANS HELD FOR INVESTMENT - Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 280,934	$ 0
Deferred fees and costs	(126)	0
Loans held for investment, at amortized cost, net of deferred fees and costs	280,934	0
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	172,033	0
Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	8,430	0
SBA
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	100,597	0
Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 281,060	$ 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

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 9,975	$ 11,362	$ 28,545	$ 34,533
Other comprehensive loss before tax:
Net unrealized loss on debt securities available-for-sale during the period	(79)	0	(281)	0
Other comprehensive loss before tax	(79)	0	(281)	0
Income tax benefit	98	0	97	0
Other comprehensive income (loss), net of tax	19	0	(184)	0
Comprehensive income	$ 9,994	$ 11,362	$ 28,361	$ 34,533

- 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

LEASES - Narrative (Details)	Sep. 30, 2023
Leases [Abstract]
Remaining contractual term	4 years
Renewal term	10 years

Insider Trading Arrangements	3 Months Ended	9 Months Ended
Insider Trading Arrangements	Sep. 30, 2023 shares	Sep. 30, 2023 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Salvatore Mulia [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		On June 16, 2023, Salvatore Mulia, a Director of the Company, entered into a written plan for the sale of an aggregate 9,000 shares of common stock. The plan is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The plan commenced on September 21, 2023 and terminates on September 22, 2024.
Name	Salvatore Mulia
Title	Director
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	June 16, 2023
Arrangement Duration	367 days
Aggregate Available	9,000	9,000

DIVIDENDS AND DISTRIBUTIONS - Dividends Declared and Distributed (Details) - USD ($) $ / shares in Units, $ in Thousands							3 Months Ended		9 Months Ended
	Oct. 20, 2023	Jul. 21, 2023	Apr. 14, 2023	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Distribution of Assets, Liabilities and Stockholders' Equity [Line Items]
Amount Per Share		$ 0.18	$ 0.18	$ 0.75	$ 0.65	$ 0.65
Cash Distribution		$ 4,293	$ 4,291	$ 17,634	$ 15,361	$ 15,325
DRIP Shares Issued		4,000	6,000	21,000	9,000	21,000
DRIP Shares Value		$ 73	$ 72	$ 374	$ 225	$ 323	$ 71	$ 321		$ 919
Subsequent Event
Distribution of Assets, Liabilities and Stockholders' Equity [Line Items]
Amount Per Share	$ 0.18
Cash Distribution	$ 4,293
DRIP Shares Issued	6,000
DRIP Shares Value	$ 71
Restricted Stock [Member]
Distribution of Assets, Liabilities and Stockholders' Equity [Line Items]
DRIP Shares Issued									12,700	21,700
DRIP Shares Value									$ 200	$ 400

GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

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


	September 30, 2023		December 31, 2022
NBNYC Acquisition	$	1,224	$	—
Payments	14,909		$	—
Technology	5,001		$	—
Total goodwill	$	21,134	$	—

Schedule of intangible assets

The following table summarizes intangible assets:


	At September 30, 2023						At December 31, 2022
	Gross carrying Amount		Accumulated Amortization		Net Carrying amount		Gross carrying Amount		Accumulated Amortization		Net Carrying amount
Core Deposits	$	1,040	$	(150)	$	890	$	—	$	—	$	—
Payments Customer lists	8,575		(8,488)		87		—		—		—
Technology Customer lists	8,811		(3,765)		5,046		—		—		—
Total intangible assets	$	18,426	$	(12,403)	$	6,023	$	—	$	—	$	—

Intangible asset amortization schedule

The remaining estimated aggregate future amortization expense for intangible assets as of September 30, 2023 is as follows:


	Amortization Expense
Remainder of 2023	$	319
2024	982
2025	948
2026	928
2027	907
Thereafter	1,939
Total	$	6,023

- Definition

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

+ References

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+ Details

STOCK BASED COMPENSATION - Restricted Stock Issuances (Details) - 2023 Stock Incentive Plan	3 Months Ended
	Sep. 30, 2023 shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted (in shares)	0
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares authorized (in shares)	3,000,000
Total net restricted stock (granted)/forfeited (in shares)	(56,052)

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

FAIR VALUE MEASUREMENTS - Level III Rollforward (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 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)	Net Unrealized Gains/(Losses)
Unrealized Gain (Loss) On Servicing Assets
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
Loans Held for Investment
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	$ 505,268
Reclass of loans HFS to HFI	5,879
Funded	38,616
Sales	(2,195)
Purchases	9,461
Settlements	(58,142)
Fair value, ending balance	492,987
Loans Held for 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	12,132
Loans Held for 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	(18,032)
Loans Held For Sale
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	0
Additions/(removal) of entities consolidating after Conversion to BHC	69,745
Reclass of loans HFS to HFI	(18,833)
Funded	42,966
Purchases	5,279
Sales	68,960
Settlements	(6,675)
Fair value, ending balance	69,216
Loans Held For Sale \| Conventional Loans
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Funded	44,660
Loans Held For Sale \| 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	1,071
Loans Held For Sale \| 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	(37)
SBA investment
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance		$ 424,417
Funded		142,974
Sales		(1,646)
Sales		600
Settlements		(63,365)
Fair value, ending balance		488,376
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		(6,473)
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		(8,131)
Investments \| Controlled Investments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	259,217	230,935
Additions/(removal) of entities consolidating after Conversion to BHC	(259,217)
Gain (loss) included in earnings		5,295
Purchases		26,308
Settlements		(5,870)
Fair value, ending balance	0	256,668
Investments \| Joint Ventures
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	23,022
Gain (loss) included in earnings	3,141
Purchases	14,550
Fair value, ending balance	40,713
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
Purchases		360
Fair value, ending balance	1,360	1,360
Servicing assets
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	30,268	28,008
Purchases	2,590	9,486
Fair value, ending balance	31,292	33,530
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	3,584	(3,964)
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	(5,150)
Warrant Liabilities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	0
Gain (loss) included in earnings	(117)
Purchases	311
Fair value, ending balance	194
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
Sales	(2,198)	(1,308)
Purchases	2,195	1,646
Fair value, ending balance	2,829	2,315
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	(240)	(172)
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	$ (457)	$ (205)

LEASES (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Lease cost

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


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$676	$471	$2,015	$1,404
Weighted-average remaining lease term - operating leases	3.10 years	4.41 years	3.10 years	4.41 years
Weighted-average discount rate - operating leases	5.61%	4.55%	5.61%	4.55%
Total lease costs (included in other general and administrative costs on the consolidated statements of operations)	$610	$253	$2,269	$729

Lessee, operating lease, liability, maturity

The following table represents the maturity of the Company’s operating lease liabilities as of September 30, 2023:


Maturity of Lease Liabilities
2023	$	679
2024	2,637
2025	2,398
2026	1,842
2027	430
Thereafter	—
Total future minimum lease payments	$	7,986
Less: Imputed interest	(643)
Present value of future minimum lease payments	$	7,343

GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Goodwill [Line Items]
NBNYC Acquisition	$ 1,224	$ 0
Total goodwill	21,134	0
Payments
Goodwill [Line Items]
Total goodwill	14,909	0
Technology
Goodwill [Line Items]
Total goodwill	$ 5,001	$ 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

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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-Section 50
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1A
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1A

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-2

+ Details

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net income	$ 28,545	$ 34,533
Adjustments to reconcile net income to net cash used in operating activities:
Net (gain) loss on loans accounted for under the fair value option	(12,588)	12,415
Net unrealized depreciation on servicing assets	1,566	3,964
Net unrealized appreciation on derivative transactions	(54)	(183)
Net gains on sales of loans	(32,452)	(49,953)
Net accretion of premium/discount	(1,970)	0
Loss on extinguishment of debt	0	417
Amortization of deferred financing costs	3,028	1,891
Provision for credit losses	7,339	0
Lower of cost or market adjustment on loans held for sale	139	0
Stock compensation expense	2,029	0
Deferred income tax (benefit) expense	(8,934)	175
Depreciation and amortization	2,517	181
Proceeds from sale of loans held for sale	533,117	534,378
Purchase of loans held for sale	0	(602)
Funding of investments	(532,993)	(586,858)
Principal received on loans held for sale	8,204	65,551
Return of investment from controlled investments	0	9,741
Contributions to joint ventures	(14,550)	0
Other, net	(481)	2,174
Changes in operating assets and liabilities:
Settlement receivable	(63,957)	(27,097)
Capitalized servicing asset	(140)	0
Due to/from related parties	(391)	3,807
Other assets	7,461	1,340
Dividends payable	4,769	0
Due to participants	(14,392)	(111,565)
Accounts payable, accrued expenses and other liabilities	(24,082)	723
Other, net	0	6
Net cash used in operating activities	(116,690)	(127,593)
Cash flows from investing activities:
Net decrease in loans held for investment, at fair value	12,259	0
Net increase in loans held for investment, at cost	(115,968)	0
Purchase of fixed assets	(293)	(11)
Net increase in Federal Home Loan and Federal Reserve Bank stock	(2,133)	0
Purchases of available-for-sale securities	(28,134)	0
Acquisitions, net of cash acquired	11,252	0
Net cash used in investing activities	(123,017)	(11)
Cash flows from financing activities:
Net (paydowns) borrowings on bank notes payable	(105,700)	17,500
Net increase in deposits	295,544	0
Repayment of Federal Home Loan Bank advances	(4,336)	0
Proceeds from common shares sold, net of offering costs	0	726
Proceeds from preferred stock, net of offering costs	19,493	0
Net repayments under related party line of credit	0	(11,300)
Payments on Notes Payable - Securitization Trusts	(68,918)	(63,707)
Issuance of Notes Payable - Securitization Trusts	103,860	116,210
Dividends paid, net of dividend reinvestment plan	(9,378)	(48,319)
Payments of deferred financing costs	(4,556)	(2,405)
Purchase of vested stock for employee payroll tax withholding	(521)	(829)
Net cash provided by financing activities	315,488	22,876
Net increase (decrease) in cash and restricted cash	75,781	(104,728)
Cash and restricted cash—beginning of period (Note 2)	125,606	186,860
Consolidation of cash from controlled investments	22,306	0
Cash and restricted cash—end of period (Note 2)	223,693	82,132
Non-cash operating, investing and financing activities:
Foreclosed real estate acquired	2,195	1,646
Dividends declared but not paid during the period	4,363	2,998
Issuance of common shares under dividend reinvestment plan	219	922
Supplemental disclosure of cash flow information:
Interest paid	48,282	18,344
2025 5.00% Notes
Cash flows from financing activities:
Proceeds from Notes	0	30,000
2025 8.125% Notes
Cash flows from financing activities:
Proceeds from Notes	50,000	0
2028 8.00% Notes
Cash flows from financing activities:
Proceeds from Notes	40,000	0
2025 6.85% Notes
Cash flows from financing activities:
Redemption of Notes	0	(15,000)
Controlled Investments
Adjustments to reconcile net income to net cash used in operating activities:
Net unrealized (appreciation) depreciation on investments	0	(1,582)
Funding of investments	0	(26,558)
Principal received on investments	0	5,869
Joint Ventures
Adjustments to reconcile net income to net cash used in operating activities:
Net unrealized (appreciation) depreciation on investments	(3,141)	0
Affiliate Investments
Adjustments to reconcile net income to net cash used in operating activities:
Net unrealized (appreciation) depreciation on investments	(3,141)
Purchase of loans held for sale from affiliate	(5,279)	0
Non-Control Investments
Adjustments to reconcile net income to net cash used in operating activities:
Net unrealized (appreciation) depreciation on investments	0
Funding of investments	$ 0	$ (360)

BUSINESS COMBINATION - Narrative (Details) - USD ($) $ in Thousands	Jan. 06, 2023	Sep. 30, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill		$ 21,134	$ 0
NBNYC
Business Acquisition [Line Items]
Acquisition consideration	$ 20,000
Acquisition costs	1,300
Contributions to subsidiary	31,000
Transaction costs		$ 200
Goodwill	$ 1,224
NBNYC \| Core Deposits
Business Acquisition [Line Items]
Intangible asset, useful life	10 years

- Definition

+ References + Details

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 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. 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, derivative contracts and 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 assets, warrant liabilities, joint ventures, guaranteed loans held at fair value, 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 nine months ended September 30, 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.

The Company has two joint venture investments. For TSO JV, the Company calculates the fair value of the investment based on the net asset NAV of the entity. The fair value of the investment is equivalent to 50% of the total NAV of the JV, which represents the Company’s share of the entity and is based upon the practical expedient method permitted under ASC 820. For NCL JV, the Company uses a discounted cash flow methodology and adjusts the NAV of the entity by a fair value adjustment for the fixed rate debt liability.

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 September 30, 2023, in addition to other circumstances and events that are not yet known.


	Fair Value Measurements at September 30, 2023
	Total		Level 1		Level 2		Level 3
Assets:

Debt securities available-for-sale
U.S. Treasury notes	$	29,321	$	29,321	$	—	$	—
Government agency debentures	3,817		—		3,817		—
Loans held for sale, at fair value	70,467		—		1,251		69,216
Loans held for investment, at fair value	492,987		—		—		492,987
Other real estate owned 1	2,829		—		—		2,829
Non-controlled/affiliate investments	1,360		—		—		1,360
Servicing assets	31,292		—		—		31,292
Derivative instruments1,2	122		—		122		—
Joint ventures	40,713		—		—		40,713
Total assets	$	672,908	$	29,321	$	5,190	$	638,397
Liabilities:
Equity warrants3	$	194	$	—	$	—	$	194

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

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

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


	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 nine months ended September 30, 2023 and 2022:


	Nine Months Ended September 30, 2023
	Loans HFI, at FV		Loans HFS, at FV		Controlled Investments		Joint Ventures		Servicing Assets		Non-Control Investments		Warrant Liabilities2		Other Real Estate Owned1
Fair value, December 31, 2022	$	505,268	$	—	$	259,217	$	23,022	$	30,268	$	1,360	$	—	$	3,529
Additions/(removal) of entities consolidating after Conversion to BHC	—		69,745		(259,217)		—		—		—		—		—
Reclass of loans HFS to HFI	5,879		—		—		—		—		—		—		—
Reclass of loans HFS at FV to HFS at LCM			(18,833)		—		—		—		—		—		—
Net gain (loss) on loans under the fair value option	12,132		1,071		—		—		—		—		—		—
Gain (loss) on sales	(18,032)		(37)		—		—		—		—		—		(457)
SBA loans, funded	38,616		42,966		—		—		—		—		—		—
Conventional loans, funded	—		44,660		—		—		—		—		—		—
Foreclosed real estate acquired	(2,195)		—		—		—		—		—		—		2,195
Purchase of loans	—		5,279		—		—		—		—		—		—
Repurchases of SBA loans	9,461		—		—		—		—		—		—		—
Sales	—		(68,960)		—		—		—		—		—		(2,198)


Principal payments received	(58,142)		(6,675)		—		—		—		—		—		—
Change in valuation due to:
Changes in valuation inputs or assumptions	—		—		—		3,141		3,584		—		(117)		—
Other factors	—		—		—		—		(5,150)		—		—		(240)
Additions	—		—		—		14,550		2,590		—		311		—
Fair value, September 30, 2023	$	492,987	$	69,216	$	—	$	40,713	$	31,292	$	1,360	$	194	$	2,829

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

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


	Nine Months Ended September 30, 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	(6,473)		5,295		—		—		(172)
Change in net unrealized depreciation on servicing assets due to factors other than changes in valuation inputs or assumptions	—		—		(3,964)		—		—
Realized loss	(8,131)		—		—		—		(205)
SBA unguaranteed non-affiliate investments, funded	142,974		—		—		—		—
Foreclosed real estate acquired	(1,646)		—		—		—		1,646
Purchase of investments	—		26,308		—		360		—
Purchase of loans from SBA	600		—		—		—		—
Sale of investment	—		—		—		—		(1,308)

Principal payments received on debt investments	(63,365)		(5,870)		—		—		—
Additions to servicing assets	—		—		9,486		—		—
Fair value, September 30, 2022	$	488,376	$	256,668	$	33,530	$	1,360	$	2,315

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


	Fair Value as of			Weighted		Range
	September 30, 2023		Unobservable Input	Average1		Minimum		Maximum
Assets:
Held for investment, at fair value - accrual loans	$	446,220	Market yields	8.50	%	8.50	%	8.50	%
			Cumulative prepayment rate	22.50	%	22.50	%	22.50	%
			Average cumulative default rate	19.00	%	19.00	%	19.00	%
Held for investment, at fair value - non-accrual loans	$	46,767	Market yields	8.80	%	8.80	%	8.80	%
			Cumulative prepayment rate	—	%	—	%	—	%
			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Held for sale, at fair value	$	69,216	Market yields	7.55	%	7.55	%	7.55	%
			Cumulative prepayment rate	55.60	%	55.60	%	55.60	%
			Average cumulative default rate	20.00	%	20.00	%	20.00	%
Joint Ventures	$	40,713	Market yields	9.00	%	9.00	%	9.00	%
			Cost of equity	11.00	%	10.00	%	12.00	%
			Weighted average cost of capital	8.50	%	7.50	%	9.50	%
Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Cost basis	N/A		N/A		N/A
Servicing assets1	$	31,292	Market yields	13.75	%	13.75	%	13.75	%
			Cumulative prepayment rate	22.50	%	22.50	%	22.50	%
			Average cumulative default rate	19.00	%	19.00	%	19.00	%
Other real estate owned	$	2,829	Appraised value	N/A		N/A		N/A

Liabilities:
Equity warrants	$	194	Expected volatility	47.00	%	47.00	%	47.00	%
			Dividend yield	4.90	%	4.90	%	4.90	%
			Risk free rate	4.59	%	4.59	%	4.59	%

(1) $31.3 million of servicing assets at held at FV and $5.5 million of servicing assets are held at LCM. Refer to NOTE 7—SERVICING ASSETS.


	Fair Value as of			Weighted		Range
	December 31, 2022		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	470,835	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	$	34,433	Market yields	8.87	%	8.87	%	8.87	%
			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	241,113	EBITDA multiples-TTM2	8.00x		7.50x		8.50x
			EBITDA multiples-NTM2	6.90x		6.00x		7.50x
			Revenue multiples2	2.46x		0.80x		3.20x
			Book value multiples2	1.00x		0.80x		1.20x
			Weighted average cost of capital2	13.20	%	11.50	%	23.60	%
Controlled debt investments	$	18,104	Market yields	10.00	%	10.00	%	10.00	%
Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Recent transaction	N/A		N/A		N/A
Servicing assets	$	30,268	Market yields	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	%
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:


	September 30, 2023
	Carrying Amount		Fair Value Amount by Level:						Total Fair Value
			Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	15,610	$	15,610	$	—	$	—	$	15,610
Restricted cash	70,737		70,737		—		—		70,737
Interest bearing deposits in banks	137,346		137,346		—		—		137,346
Loans held for sale, at LCM	48,450		—		—		48,715		48,715
Total loans held for investment, at amortized cost, net of deferred fees and costs	280,934		—		—		281,759		281,759
Federal Home Loan Bank and Federal Reserve Bank stock	3,657		—		3,657		—		3,657
Servicing assets at LCM	5,482		—		—		5,646		5,646
Financial Liabilities:
Deposits	432,559		—		435,875		—		435,875
Borrowings	648,700		—		187,202		457,243		644,445

	December 31, 2022
	Carrying Amount		Fair Value Amount by Level:						Total Fair Value
			Level 1		Level 2		Level 3
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		—		152,162		389,194		541,356

- 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

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Interest income
Debt securities available-for-sale	$ 436	$ 0	$ 1,083	$ 0
Loans and fees on loans	23,232	8,804	60,341	23,915
Interest from affiliates	0	753	0	2,087
Other interest earning assets	3,068	0	6,580	0
Total interest income	26,736	9,557	68,004	26,002
Interest expense
Deposits	5,212	0	10,738	0
Total interest expense	18,659	6,917	49,671	17,412
Net interest income	8,077	2,640	18,333	8,590
Provision for credit losses	3,446	0	7,339	0
Net interest income after provision for credit losses	4,631	2,640	10,994	8,590
Noninterest income
Dividend income	388	7,224	1,397	20,051
Loan servicing asset revaluation	(1,951)	(1,624)	(1,566)	(3,964)
Servicing income, net of amortization	4,602	3,575	13,304	9,931
Net gains on sales of loans	12,718	14,767	32,452	49,953
Net gain (loss) on loans under the fair value option	2,809	(3,908)	12,588	(12,415)
Technology and IT support income	5,499	0	18,667	0
Electronic payment processing income	11,192	0	32,196	0
Other noninterest income	7,643	5,264	23,075	9,381
Total noninterest income	42,900	25,298	132,113	72,937
Noninterest expense
Salaries and employee benefits expense	15,300	4,772	53,837	14,380
Technology services expense	2,738	0	10,007	0
Electronic payment processing expense	4,817	0	14,159	0
Professional services expense	3,170	1,509	9,766	4,322
Other loan origination and maintenance expense	3,405	8,296	9,791	21,900
Depreciation and amortization	812	58	2,517	181
Loss on extinguishment of debt	0	0	0	417
Other general and administrative costs	4,303	1,823	13,814	5,619
Total noninterest expense	34,545	16,458	113,891	46,819
Net income before taxes	12,986	11,480	29,216	34,708
Income tax expense	3,011	118	671	175
Net income	9,975	11,362	28,545	34,533
Dividends to preferred shareholders	(400)	0	(1,049)	0
Net income available to common shareholders	$ 9,575	$ 11,362	$ 27,496	$ 34,533
Earnings per share, basic (in dollars per share)	$ 0.38	$ 0.47	$ 1.10	$ 1.43
Earnings per share, diluted (in dollars per share)	$ 0.38	$ 0.47	$ 1.10	$ 1.43
Related Party
Interest expense
Notes payable related party	$ 0	$ 98	$ 0	$ 284
Notes and securitizations
Interest expense
Interest expense	11,005	5,488	28,806	14,433
Bank and FHLB borrowings
Interest expense
Interest expense	$ 2,442	$ 1,331	$ 10,127	$ 2,695

BUSINESS COMBINATION (Tables)

9 Months Ended

Sep. 30, 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:


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	1,224
Core deposit intangible	1,040
Deferred tax asset	760
Other Assets	927
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:


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

LOANS HELD FOR INVESTMENT

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

LOANS HELD FOR INVESTMENT

NOTE 5—LOANS HELD FOR INVESTMENT:

Loans held for investment included SBA 7(a) loans originated by NSBF and Newtek Bank, as well as CRE and C&I 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
	September 30, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Food Services and Drinking Places	$	45,922	$	45,828	$	47,012	$	47,198
Specialty Trade Contractors	42,746		38,055		42,082		38,059
Professional, Scientific, and Technical Services	37,856		36,642		39,910		38,086
Ambulatory Health Care Services	28,180		27,183		27,275		25,151
Amusement, Gambling, and Recreation Industries	23,809		25,196		23,812		24,928
Merchant Wholesalers, Durable Goods	23,085		22,573		22,164		22,004
Administrative and Support Services	22,705		21,222		22,352		20,827
Repair and Maintenance	16,144		17,082		16,993		17,165
Merchant Wholesalers, Nondurable Goods	16,648		16,083		16,183		15,312
Personal and Laundry Services	12,971		13,708		12,949		13,333
Fabricated Metal Product Manufacturing	12,534		13,234		13,483		14,032
Truck Transportation	16,745		12,893		23,673		18,071
Accommodation	9,523		10,569		11,476		10,428
Construction of Buildings	10,009		9,913		11,252		10,194
Social Assistance	8,936		9,780		9,150		9,857
Motor Vehicle and Parts Dealers	9,436		9,732		10,071		9,536
Transportation Equipment Manufacturing	8,604		8,988		8,272		8,445
Food Manufacturing	10,614		8,416		10,756		8,873
Food and Beverage Stores	7,789		7,913		5,711		5,857
Support Activities for Mining	8,621		7,835		10,426		8,615
Rental and Leasing Services	6,907		7,312		7,417		7,647
Building Material and Garden Equipment and Supplies Dealers	7,752		7,124		8,098		7,689
Nursing and Residential Care Facilities	6,230		6,723		8,187		8,697
Educational Services	5,508		5,716		5,838		6,133
Other	109,107		103,267		118,251		109,131
Total	$	508,381	$	492,987	$	532,793	$	505,268

Past Due and Non-Accrual Loans

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


	As of September 30, 2023
		30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		90 or more Days Past Due and Accruing(1)		Non- accrual		Total past Due and Non-accrual		Current		Total Carried at Amortized Cost		Total Loans Accounted for Under the Fair Value Option		Total Loans
Commercial Real Estate		$	—	$	—	$	—	$	4,621	$	4,621	$	167,412	$	172,033	$	—	$	172,033
Commercial & Industrial		—		—		—		—		—		8,430		$	8,430	—		8,430
SBA		—		29,743		10,759		47,403		87,905		505,678		$	100,597	492,987		593,584
Total loans		$	—	$	29,743	$	10,759	$	52,024	$	92,526	$	681,520	$	281,060	$	492,987	$	774,047
Deferred fees and costs														(126)		—		(126)
Allowance for credit losses														$	(8,209)	$	—	$	(8,209)
Total loans, net														$	272,725	$	492,987	$	765,712

(1)Represents loans that are considered well secured and in the process of collection.


	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		$	18,681	$	12,754	$	—	$	34,432	$	65,867	$	439,401	$	—	$	505,268	$	505,268

The Company identified three 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 was $5.3 million as of the nine months ended September 30, 2023.

Credit Quality Indicators

Newtek 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 Newtek Bank’s annual review of each borrower’s financial performance is to validate the adequacy of the risk grade assigned.

Newtek 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 Newtek 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 as of September 30, 2023.


	Term Loans Held for Investment by Origination Year
	2023		2022		2021		2020		2019		Prior		Total
Commercial Real Estate
Risk Grades 1-4	$	51,855	$	28,332	$	14,676	$	—	$	10,595	$	58,508	$	163,966
Risk Grades 5-6	—		—		950		915		1,581		4,621		8,067
Risk Grade 7	—		—		—		—		—		—		—
Total	$	51,855	$	28,332	$	15,626	$	915	$	12,176	$	63,129	$	172,033

Commercial & Industrial
Risk Grades 1-4	$	6,413	$	—	$	—	$	—	$	—	$	2,017	$	8,430
Risk Grades 5-6	—		—		—		—		—		—		—
Risk Grade 7	—		—		—		—		—		—		—
Total	$	6,413	$	—	$	—	$	—	$	—	$	2,017	$	8,430

SBA
Risk Grades 1-4	$	135,190	$	156,428	$	57,882	$	29,466	$	58,524	$	106,174	$	543,664
Risk Grades 5-6	200		7,973		5,684		983		10,309		23,891		49,040
Risk Grade 7	—		—		—		—		—		—		—
Risk Grade 8	—		124		17		22		10		707		880
Total	$	135,390	$	164,525	$	63,583	$	30,471	$	68,843	$	130,772	$	593,584
Total	$	193,658	$	192,857	$	79,209	$	31,386	$	81,019	$	195,918	$	774,047

	Term Loans Held for Investment by Origination Year
December 31, 2022	2022		2021		2020		2019		2018		Prior		Total
SBA
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		37,371
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 months ended September 30, 2023:


	Commercial Real Estate		Commercial & Industrial		Small Business Administration		Total
Beginning Balance	$	1,373	$	267	$	3,124	4,764
Charge offs	—		—		—		—
Recoveries	—		—		—		—
Provision	58		49		3,339		3,446
Ending Balance	$	1,431	$	316	$	6,463	$	8,209

The following table details activity in the ACL for the nine months ended September 30, 2023:


	Commercial Real Estate		Commercial & Industrial		Small Business Administration		Total
Beginning Balance	$	—	$	—	$	—	$	—
Adjustment to Beginning Balance due to PCD marks1	774		96		—		870
Charge offs	—		—		—		—
Recoveries	—		—		—		—
Provision	657		220		6,463		7,339
Ending Balance	$	1,431	$	316	$	6,463	$	8,209

(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 and nine months ended September 30, 2023.

Loan Modifications Made to Borrowers Experiencing Financial DifficultyThe 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 three and nine months ended September 30, 2023. Additionally there were no troubled debt restructurings under legacy U.S. GAAP as of the period ended December 31, 2022.

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 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:


	September 30, 2023		December 31, 2022
NBNYC Acquisition	$	1,224	$	—
Payments	14,909		$	—
Technology	5,001		$	—
Total goodwill	$	21,134	$	—

The Company did not have any goodwill as of December 31, 2022 prior to the Acquisition. The $21.1 million balance of goodwill consists of $1.2 million relating to the Acquisition of Newtek Bank itself, as well as $14.9 million and $5.0 million, respectively, from the payments and technology segments due to the consolidation of previously unconsolidated portfolio companies due to the Company’s reorganization related to the Acquisition.

Intangible Assets

The following table summarizes intangible assets:


	At September 30, 2023						At December 31, 2022
	Gross carrying Amount		Accumulated Amortization		Net Carrying amount		Gross carrying Amount		Accumulated Amortization		Net Carrying amount
Core Deposits	$	1,040	$	(150)	$	890	$	—	$	—	$	—
Payments Customer lists	8,575		(8,488)		87		—		—		—
Technology Customer lists	8,811		(3,765)		5,046		—		—		—
Total intangible assets	$	18,426	$	(12,403)	$	6,023	$	—	$	—	$	—

Amortization expense for the three and nine months ended September 30, 2023 was $0.4 million and $1.2 million, respectively, and is included in Depreciation and amortization on the Consolidated Statements of Income. There was no amortization expense for the three and nine months ended September 30, 2022 since there were no intangible assets prior to the Acquisition.

The remaining estimated aggregate future amortization expense for intangible assets as of September 30, 2023 is as follows:


	Amortization Expense
Remainder of 2023	$	319
2024	982
2025	948
2026	928
2027	907
Thereafter	1,939
Total	$	6,023

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 21—SUBSEQUENT EVENTS: On October 2, 2023, the Company paid off and terminated NSBF’s Capital One line of credit for both guaranteed and unguaranteed loans. The Company recognized $0.3 million of loss on extinguishment of debt in association with the payoff. On November 7, 2023, the Company issued a 30-day notice of its termination of the DRIP.

DEPOSITS - Deposits by Type (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Banking and Thrift, Interest [Abstract]
Noninterest-bearing	$ 20,316	$ 0
Interest-bearing:
Checking	3,409	0
Money market	32,807	0
Savings	229,502	0
Time deposits	146,525	0
Interest-bearing	412,243	0
Total deposits	432,559	0
Time deposits, money market, and interest-bearing checking obtained through brokers	37,143	0
Aggregate amount of deposit accounts that exceeded the FDIC limit	72,772	0
Demand deposit overdrafts reclassified as loan balances	$ 1	$ 0

LEASES

9 Months Ended

Sep. 30, 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 four 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 September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$676	$471	$2,015	$1,404
Weighted-average remaining lease term - operating leases	3.10 years	4.41 years	3.10 years	4.41 years
Weighted-average discount rate - operating leases	5.61%	4.55%	5.61%	4.55%
Total lease costs (included in other general and administrative costs on the consolidated statements of operations)	$610	$253	$2,269	$729

The following table represents the maturity of the Company’s operating lease liabilities as of September 30, 2023:


Maturity of Lease Liabilities
2023	$	679
2024	2,637
2025	2,398
2026	1,842
2027	430
Thereafter	—
Total future minimum lease payments	$	7,986
Less: Imputed interest	(643)
Present value of future minimum lease payments	$	7,343

COMMITMENTS AND CONTINGENCIES - Obligations and Commitments Under Operating Lease and Employment Agreements (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Operating Leases
2023	$ 679
2024	2,637
2025	2,398
2026	1,842
2027	430
Lessee, Operating Lease, Liability, to be Paid, after Year Five	0
Total	7,986
Employment Agreement
2023	815
2024	525
2025	0
2026	0
2027	0
Thereafter	0
Total	1,340
Total
2023	1,494
2024	3,162
2025	2,398
2026	1,842
2027	430
Thereafter	0
Total	$ 9,326

SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)	9 Months Ended
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)	Sep. 30, 2023 USD ($) sponsorBank merchantProcessor segment	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Property, Plant and Equipment [Line Items]
Loan-to-value ratio	75.00%
Debt service coverage, minimum	1.2
Weighted average life	5 years
Cash deposits in excess of insured amounts	$ 63,400,000
Restricted cash	70,737,000	$ 71,914,000	$ 74,777,000	$ 184,463,000
Deferred tax asset, net	8,656,000	0
Deferred tax liabilities, net	$ 0	19,194,000
Number of reportable segments \| segment	4
Allowance for credit loss	$ 800,000	$ 0
Useful life	3 years
Number of sponsor banks \| sponsorBank	2
Number of merchant processors \| merchantProcessor	1
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	66 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	168 months
Maximum \| Leasehold Improvements
Property, Plant and Equipment [Line Items]
Tangible asset, Useful life	5 years

BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of long-term debt instruments

At September 30, 2023 and December 31, 2022, the Company had borrowings composed of the following:


	September 30, 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	$	3,550	7.75	%	$	150,000	$	10,500	6.75	%
Capital One line of credit - unguaranteed1	—		2,196		8.75	%	—		45,385		7.75	%
Webster NMS Note2	54,871		37,595		7.93	%	—		—		—
SPV I Capital One Facility2	60,000		(264)		8.18	%	—		—		—
SPV II Deutsche Bank Facility2	50,000		(130)		9.79	%	—		—		—
SPV III One Florida Bank Facility2	30,000		(139)		9.50	%	—		—		—
FHLB Advances	116,649		23,636		2.16	%	—		—		—
Notes:
2024 Notes2	38,250		38,069		5.75	%	38,250		37,903		5.75	%
2025 5.00% Notes2	30,000		29,484		5.00	%	30,000		29,306		5.00	%
2025 8.125% Notes2,3	50,000		49,302		8.13	%	—		—		—	%
2026 Notes2	115,000		113,384		5.50	%	115,000		112,846		5.50	%
2028 Notes2,4	40,000		38,384		8.00	%	—		—		—	%
Notes payable - related parties	—		—		—	%	50,000		24,250		6.72	%
Notes payable - Securitization Trusts2,5	318,085		313,633		7.81	%	283,143		279,136		6.19	%
Total	$	1,052,855	$	648,700	7.00	%	$	666,393	$	539,326	6.11	%

(1) Total combined commitments of the guaranteed and unguaranteed lines of credit were $150.0 million at September 30, 2023 and December 31, 2022.

(2) Net of deferred financing costs. Negative borrowings outstanding are the result of the facilities being paid down to zero principal balance as of September 30, 2023 while the associated deferred financing costs remain.

(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, payable semiannually on February 1 and August 1 each year, commencing on August 1, 2023. The Notes will mature on February 1, 2025.

(4) On August 31, 2023, the Company completed a registered offering of $40.0 million in aggregate principal amount of its 8.00% 2028 Notes payable quarterly on March 1, June 1, September 1 and December 1 of each year, commencing on December 1, 2023. The 2028 Notes trade on the Nasdaq Global Market under the trading symbol “NEWTI.”

(5) At September 30, 2023 and 2022, the assets of the consolidated Trusts totaled $10.8 million and $14.1 million, respectively.

Outstanding borrowings that are presented net of deferred financing costs including the bank lines of credit, the 2024, 2025, 2026, and 2028 Notes, and the Notes payable - Securitization Trusts consisted of the following:


	September 30, 2023			December 31, 2022
	Principal balance	Unamortized deferred financing costs	Net carrying amount1	Principal balance	Unamortized deferred financing costs	Net carrying amount


Webster NMS Note	37,877	(282)	37,595	—	—	—
SPV I Capital One Facility	—	(264)	(264)	—	—	—
SPV II Deutsche Bank Facility	—	(130)	(130)	—	—	—
SPV III One Florida Bank Facility	—	(139)	(139)	—	—	—
2024 Notes	38,250	(181)	38,069	38,250	(347)	37,903
2025 5.00% Notes	30,000	(516)	29,484	—	—	—
2025 6.85% Notes	—	—	—	30,000	(694)	29,306
2025 8.125% Notes	50,000	(698)	49,302	—	—	—
2026 Notes	115,000	(1,616)	113,384	115,000	(2,154)	112,846
2028 Notes	40,000	(1,616)	38,384	—	—	—

Notes Payable - Securitization Trusts	318,085	(4,452)	313,633	283,143	(4,007)	279,136

(1) Net of deferred financing costs. Negative borrowings outstanding are the result of the facilities being paid down to zero principal balance as of September 30, 2023 while the associated deferred financing costs remain.

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The fair values of the fixed rate 2028 Notes, 2026 Notes and 2024 Notes are based on the closing public share price on the date of measurement as included in the chart below.


	September 30, 2023				December 31, 2022
	Closing Price		Fair Value		Closing Price	Fair Value
2028 Notes	$	24.19	$	38,704	n/a	n/a
2026 Notes	24.05		110,630		25.77	118,542
2024 Notes	24.75		37,868		24.80	37,944

These borrowings are not recorded at fair value on a recurring basis. The fixed rate 2025 Notes are held at par as of September 30, 2023 and December 31, 2022.

- 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

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 69B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69B

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
-Section 55
-Paragraph 69E
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-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69E

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-3

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
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-Paragraph 1
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Topic 942
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-Section 50
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-URI https://asc.fasb.org//1943274/2147480848/942-470-50-3

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

LOANS HELD FOR INVESTMENT (Tables)

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Investment holdings, schedule of investments

Investments consisted of the following at:


	September 30, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Non-controlled equity investments	$	1,360	$	1,360	$	1,360	$	1,360
Joint ventures	37,865		40,713		23,314		23,022
Controlled investments:
Equity	—		—		99,195		241,113
Debt	—		—		32,300		18,104
Total investments	$	39,225	$	42,073	$	156,169	$	283,599

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
	September 30, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Food Services and Drinking Places	$	45,922	$	45,828	$	47,012	$	47,198
Specialty Trade Contractors	42,746		38,055		42,082		38,059
Professional, Scientific, and Technical Services	37,856		36,642		39,910		38,086
Ambulatory Health Care Services	28,180		27,183		27,275		25,151
Amusement, Gambling, and Recreation Industries	23,809		25,196		23,812		24,928
Merchant Wholesalers, Durable Goods	23,085		22,573		22,164		22,004
Administrative and Support Services	22,705		21,222		22,352		20,827
Repair and Maintenance	16,144		17,082		16,993		17,165
Merchant Wholesalers, Nondurable Goods	16,648		16,083		16,183		15,312
Personal and Laundry Services	12,971		13,708		12,949		13,333
Fabricated Metal Product Manufacturing	12,534		13,234		13,483		14,032
Truck Transportation	16,745		12,893		23,673		18,071
Accommodation	9,523		10,569		11,476		10,428
Construction of Buildings	10,009		9,913		11,252		10,194
Social Assistance	8,936		9,780		9,150		9,857
Motor Vehicle and Parts Dealers	9,436		9,732		10,071		9,536
Transportation Equipment Manufacturing	8,604		8,988		8,272		8,445
Food Manufacturing	10,614		8,416		10,756		8,873
Food and Beverage Stores	7,789		7,913		5,711		5,857
Support Activities for Mining	8,621		7,835		10,426		8,615
Rental and Leasing Services	6,907		7,312		7,417		7,647
Building Material and Garden Equipment and Supplies Dealers	7,752		7,124		8,098		7,689
Nursing and Residential Care Facilities	6,230		6,723		8,187		8,697
Educational Services	5,508		5,716		5,838		6,133
Other	109,107		103,267		118,251		109,131
Total	$	508,381	$	492,987	$	532,793	$	505,268

Schedule of loans and leases


	Loans Held for Investment, at Amortized Cost
	September 30, 2023		December 31, 2022
Commercial Real Estate	$	172,033	$	—
Commercial & Industrial	8,430		—
Small Business Administration	100,597		—
Total Loans	281,060		—
Deferred fees and costs	(126)		—
Loans held for investment, at amortized cost, net of deferred fees and costs	$	280,934	$	—

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


	As of September 30, 2023
		30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		90 or more Days Past Due and Accruing(1)		Non- accrual		Total past Due and Non-accrual		Current		Total Carried at Amortized Cost		Total Loans Accounted for Under the Fair Value Option		Total Loans
Commercial Real Estate		$	—	$	—	$	—	$	4,621	$	4,621	$	167,412	$	172,033	$	—	$	172,033
Commercial & Industrial		—		—		—		—		—		8,430		$	8,430	—		8,430
SBA		—		29,743		10,759		47,403		87,905		505,678		$	100,597	492,987		593,584
Total loans		$	—	$	29,743	$	10,759	$	52,024	$	92,526	$	681,520	$	281,060	$	492,987	$	774,047
Deferred fees and costs														(126)		—		(126)
Allowance for credit losses														$	(8,209)	$	—	$	(8,209)
Total loans, net														$	272,725	$	492,987	$	765,712

(1)Represents loans that are considered well secured and in the process of collection.


	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		$	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 as of September 30, 2023.


	Term Loans Held for Investment by Origination Year
	2023		2022		2021		2020		2019		Prior		Total
Commercial Real Estate
Risk Grades 1-4	$	51,855	$	28,332	$	14,676	$	—	$	10,595	$	58,508	$	163,966
Risk Grades 5-6	—		—		950		915		1,581		4,621		8,067
Risk Grade 7	—		—		—		—		—		—		—
Total	$	51,855	$	28,332	$	15,626	$	915	$	12,176	$	63,129	$	172,033

Commercial & Industrial
Risk Grades 1-4	$	6,413	$	—	$	—	$	—	$	—	$	2,017	$	8,430
Risk Grades 5-6	—		—		—		—		—		—		—
Risk Grade 7	—		—		—		—		—		—		—
Total	$	6,413	$	—	$	—	$	—	$	—	$	2,017	$	8,430

SBA
Risk Grades 1-4	$	135,190	$	156,428	$	57,882	$	29,466	$	58,524	$	106,174	$	543,664
Risk Grades 5-6	200		7,973		5,684		983		10,309		23,891		49,040
Risk Grade 7	—		—		—		—		—		—		—
Risk Grade 8	—		124		17		22		10		707		880
Total	$	135,390	$	164,525	$	63,583	$	30,471	$	68,843	$	130,772	$	593,584
Total	$	193,658	$	192,857	$	79,209	$	31,386	$	81,019	$	195,918	$	774,047

	Term Loans Held for Investment by Origination Year
December 31, 2022	2022		2021		2020		2019		2018		Prior		Total
SBA
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		37,371
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 months ended September 30, 2023:


	Commercial Real Estate		Commercial & Industrial		Small Business Administration		Total
Beginning Balance	$	1,373	$	267	$	3,124	4,764
Charge offs	—		—		—		—
Recoveries	—		—		—		—
Provision	58		49		3,339		3,446
Ending Balance	$	1,431	$	316	$	6,463	$	8,209

The following table details activity in the ACL for the nine months ended September 30, 2023:


	Commercial Real Estate		Commercial & Industrial		Small Business Administration		Total
Beginning Balance	$	—	$	—	$	—	$	—
Adjustment to Beginning Balance due to PCD marks1	774		96		—		870
Charge offs	—		—		—		—
Recoveries	—		—		—		—
Provision	657		220		6,463		7,339
Ending Balance	$	1,431	$	316	$	6,463	$	8,209

LEASES - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
LEASES - Lease Cost (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating Lease, Payments	$ 676	$ 471	$ 2,015	$ 1,404
Operating Lease, Weighted Average Remaining Lease Term	3 years 1 month 6 days	4 years 4 months 28 days	3 years 1 month 6 days	4 years 4 months 28 days
Operating Lease, Weighted Average Discount Rate, Percent	5.61%	4.55%	5.61%	4.55%
Operating Lease, Cost	$ 610	$ 253	$ 2,269	$ 729

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) $ in Millions	Jan. 06, 2023 USD ($) subsidiary	Apr. 13, 2023 USD ($)
Business Acquisition [Line Items]
Funded account		$ 10.0
NBNYC
Business Acquisition [Line Items]
Acquisition consideration	$ 20.0
Contributions to subsidiary	$ 31.0
Number of subsidiaries \| subsidiary	2
Divest or termination period	2 years
Divest or termination period, extension	2 years

DIVIDENDS AND DISTRIBUTIONS

9 Months Ended

Sep. 30, 2023

Investment Company [Abstract]

DIVIDENDS AND DISTRIBUTIONS

NOTE 17—DIVIDENDS AND DISTRIBUTIONS:

On February 3, 2023, the Company issued 20 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 47.54 shares of the Company’s Common Stock. During the nine months ended September 30, 2023 the Company paid $1.0 million in dividends on its preferred stock.

The Company’s dividends and distributions on the Company’s common shares are recorded on the declaration date. The following table summarizes the Company’s dividend declarations and distributions during the nine months ended September 30, 2023 and 2022.


Date Declared	Record Date	Payment Date	Amount Per Share		Cash Distribution		DRIP Shares Issued	DRIP Shares Value
Nine months ended September 30, 2023
February 27, 2023	April 4, 2023	April 14, 2023	$	0.18	$	4,291	6	$	72
June 27, 2023	July 10, 2023	July 21, 2023	$	0.18	$	4,293	4	$	73
September 27, 2023	October 10, 2023	October 20, 2023	$	0.18	$	4,293	6	$	71


Nine months ended September 30, 2022
December 20, 2021	March 21, 2022	March 31, 2022	$	0.65	$	15,361	9	$	225
April 20, 2022	June 20, 2022	June 30, 2022	$	0.75	$	17,634	21	$	374
August 30, 2022	September 20, 2022	September 30, 2022	$	0.65	$	15,325	21	$	323

During the nine months ended September 30, 2023 and 2022, an additional 12,700 and 21,700 shares valued at $0.2 million and $0.4 million, respectively, were issued related to dividends on unvested shares of restricted stock granted.

DEPOSITS - Maturities (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Banking and Thrift, Interest [Abstract]
Time Deposit Maturities, Remainder of Fiscal Year	$ 66,090
Time Deposit Maturities, Year One	26,342
Time Deposit Maturities, Year Two	16,269
Time Deposit Maturities, Year Three	21,702
Time Deposit Maturities, Year Four	15,491
Time Deposit Maturities, After Year Four	631
Time Deposits, Total	$ 146,525

DIVIDENDS AND DISTRIBUTIONS (Tables)

9 Months Ended

Sep. 30, 2023

Investment Company [Abstract]

Distribution of assets, liabilities and stockholders' equity

The following table summarizes the Company’s dividend declarations and distributions during the nine months ended September 30, 2023 and 2022.


Date Declared	Record Date	Payment Date	Amount Per Share		Cash Distribution		DRIP Shares Issued	DRIP Shares Value
Nine months ended September 30, 2023
February 27, 2023	April 4, 2023	April 14, 2023	$	0.18	$	4,291	6	$	72
June 27, 2023	July 10, 2023	July 21, 2023	$	0.18	$	4,293	4	$	73
September 27, 2023	October 10, 2023	October 20, 2023	$	0.18	$	4,293	6	$	71


Nine months ended September 30, 2022
December 20, 2021	March 21, 2022	March 31, 2022	$	0.65	$	15,361	9	$	225
April 20, 2022	June 20, 2022	June 30, 2022	$	0.75	$	17,634	21	$	374
August 30, 2022	September 20, 2022	September 30, 2022	$	0.65	$	15,325	21	$	323

INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Investments, Owned, Federal Income Tax Note [Line Items]
Effective tax rate	2.30%
Net operating losses		$ 34.5
Tax Year 2029 through 2037
Investments, Owned, Federal Income Tax Note [Line Items]
Net operating losses		4.6
Indefinite Carryforward
Investments, Owned, Federal Income Tax Note [Line Items]
Net operating losses		$ 29.9

SEGMENTS

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

SEGMENTS

NOTE 20—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 - Newtek Bank 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, Newtek Bank offers depository services.

NSBF - relates to NSBF’s legacy portfolio held outside Newtek Bank, no new originating activity takes place. NSBF’s legacy portfolio consists of SBA 7(a) Loans, a material portion of which reside in securitization trusts.

Payments - Includes NMS, POS and Mobil Money. NMS markets credit and debit card processing services, check approval services, processing equipment, and software and:

–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 Mobil Money’s merchant portfolio of taxi cabs and related licensed payment processing software.

– POS is a provider of 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 - Includes NTS and EWS. NTS provides website hosting, dedicated server hosting, cloud hosting, 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. EWS provides web design and development. 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 “Corporate and 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:


As of and for the three months ended September 30, 2023
	Banking		Technology		NSBF		Payments		Corporate and Other		Eliminations		Consolidated
Interest income	$	10,513	$	—	$	12,868	$	482	$	3,848	$	(975)	$	26,736
Interest expense	5,371		—		6,930		925		6,408		(975)		18,659
Net interest income	5,142		—		5,938		(443)		(2,560)		—		8,077
Provision for loan credit losses	3,446		—		—		—		—		—		3,446
Net interest income after provision for loan credit losses	1,696		—		5,938		(443)		(2,560)		—		4,631
Noninterest income	28,111		7,406		188		12,173		41,283		(46,261)		42,900
Noninterest expense	17,935		6,598		4,697		7,756		6,419		(8,860)		34,545
Income tax expense (benefit)	4,045		—		5		—		(1,039)		—		3,011
Net income (loss)	7,827		808		1,424		3,974		33,343		(37,401)		9,975
Assets	$	602,105	$	25,617	$	659,821	$	52,090	$	692,773	$	(651,993)	$	1,380,413


As of and for the nine months ended September 30, 2023
	Banking		Technology		NSBF		Payments		Corporate and Other		Eliminations		Consolidated
Interest income	$	22,364	$	—	$	38,841	$	1,627	$	8,673	$	(3,501)	$	68,004
Interest expense	11,265		246		20,222		2,735		18,704		(3,501)		49,671
Net interest income	11,099		(246)		18,619		(1,108)		(10,031)		—		18,333
Provision for loan credit losses	7,339		—		—		—		—		—		7,339
Net interest income after provision for loan credit losses	3,760		(246)		18,619		(1,108)		(10,031)		—		10,994
Noninterest income	62,934		23,894		26,500		34,982		76,053		(92,250)		132,113
Noninterest expense	48,443		21,796		23,455		23,975		22,673		(26,451)		113,891
Income tax expense (benefit)	6,264		89		45		445		(6,172)		—		671
Net income (loss)	11,987		1,763		21,619		9,454		49,521		(65,799)		28,545
Assets	$	602,105	$	25,617	$	659,821	$	52,090	$	692,773	$	(651,993)	$	1,380,413

- 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
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
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-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

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-Topic 280
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
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+ Details

LOANS HELD FOR INVESTMENT - Investment Portfolio (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	$ 508,381	$ 532,793
Fair Value	492,987	505,268
Food Services and Drinking Places
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	45,922	47,012
Fair Value	45,828	47,198
Specialty Trade Contractors
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	42,746	42,082
Fair Value	38,055	38,059
Professional, Scientific, and Technical Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	37,856	39,910
Fair Value	36,642	38,086
Ambulatory Health Care Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	28,180	27,275
Fair Value	27,183	25,151
Amusement, Gambling, and Recreation Industries
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	23,809	23,812
Fair Value	25,196	24,928
Merchant Wholesalers, Durable Goods
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	23,085	22,164
Fair Value	22,573	22,004
Administrative and Support Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	22,705	22,352
Fair Value	21,222	20,827
Repair and Maintenance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	16,144	16,993
Fair Value	17,082	17,165
Merchant Wholesalers, Nondurable Goods
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	16,648	16,183
Fair Value	16,083	15,312
Personal and Laundry Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	12,971	12,949
Fair Value	13,708	13,333
Fabricated Metal Product Manufacturing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	12,534	13,483
Fair Value	13,234	14,032
Truck Transportation
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	16,745	23,673
Fair Value	12,893	18,071
Accommodation
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	9,523	11,476
Fair Value	10,569	10,428
Construction of Buildings
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	10,009	11,252
Fair Value	9,913	10,194
Social Assistance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	8,936	9,150
Fair Value	9,780	9,857
Motor Vehicle and Parts Dealers
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	9,436	10,071
Fair Value	9,732	9,536
Transportation Equipment Manufacturing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	8,604	8,272
Fair Value	8,988	8,445
Food Manufacturing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	10,614	10,756
Fair Value	8,416	8,873
Food and Beverage Stores
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	7,789	5,711
Fair Value	7,913	5,857
Support Activities for Mining
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	8,621	10,426
Fair Value	7,835	8,615
Rental and Leasing Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	6,907	7,417
Fair Value	7,312	7,647
Building Material and Garden Equipment and Supplies Dealers
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	7,752	8,098
Fair Value	7,124	7,689
Nursing and Residential Care Facilities
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	6,230	8,187
Fair Value	6,723	8,697
Educational Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	5,508	5,838
Fair Value	5,716	6,133
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cost	109,107	118,251
Fair Value	$ 103,267	$ 109,131

DERIVATIVE INSTRUMENTS - Derivatives Outstanding (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Asset	$ 122
Liability	194
Foreign Exchange Future
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional		$ 0
Asset	122	0
Liability	$ 0	$ 0
Remaining Maturity	3 months
Foreign Exchange Future \| Short
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional	$ (23,406)

- Definition

Fair value, after the effects of master netting arrangements, of a financial asset or other contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes assets not subject to a master netting arrangement and not elected to be offset.

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- Definition

Fair value, after the effects of master netting arrangements, of a financial liability or contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes liabilities not subject to a master netting arrangement and not elected to be offset.

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+ Details

BORROWINGS - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
BORROWINGS - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Debt Instrument [Line Items]
Valuation adjustment, FHLB	$ (200)		$ (200)
Current principal amount	23,800		23,800
Borrowings	648,700		648,700		$ 539,326
Secured Debt \| FHLB Advances
Debt Instrument [Line Items]
Borrowings	23,636		23,636
Medium-term Notes
Debt Instrument [Line Items]
Interest expense	$ 13,400	$ 6,900	$ 38,900	$ 17,400

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2023	Apr. 27, 2023	Apr. 13, 2023
Other Commitments [Line Items]
Funded account			$ 10.0
Landlord Case \| Pending Litigation
Other Commitments [Line Items]
Accrued reserve	$ 0.5
Commitments to Extend Credit
Other Commitments [Line Items]
Commitment	98.0
SBA investment
Other Commitments [Line Items]
Commitment	18.4
504 Loan
Other Commitments [Line Items]
Commitment	74.0
Commercial & Industrial
Other Commitments [Line Items]
Commitment	5.6
NBL Capital One Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities	0.0
NBL Deutsche Bank Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities	0.0
NBL One Florida Bank Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities	0.0
Webster Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities	37.9
Newtek Business Lending, LLC \| NBL Capital One Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity	60.0
Newtek Business Lending, LLC \| NBL Deutsche Bank Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity	50.0
Newtek Business Lending, LLC \| NBL One Florida Bank Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity	30.0	$ 30.0
Newtek Merchant Solutions, LLC \| Webster Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity	$ 54.9

SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 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 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 held by Newtek Bank that are classified as “available for sale” and 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 instruments 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 instruments will decline. As interest rates fall and/or credit spreads tighten, the fair value of instruments will rise. The Company evaluates available-for-sale instruments in unrealized loss positions at least quarterly to determine if an allowance for credit losses is required. Purchases and sales of debt securities are accounted for on a trade-date basis.
Cash and Restricted Cash	Cash The Company considers all highly liquid instruments 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 September 30, 2023, cash deposits in excess of insured amounts totaled $63.4 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 September 30, 2023. Restricted cashRestricted cash includes amounts due on SBA loan-related remittances to third parties, cash reserves established as part of agreements with the SBA, cash reserves associated with securitization transactions, and cash margin as collateral for derivative instruments. As of September 30, 2023, total restricted cash was $70.7 million.
Interest bearing deposits in banks	Interest bearing deposits in banksThe Company’s interest bearing deposits in banks reflects cash held at other financial institutions that earn interest.
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. 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. The guaranteed portion of the loans are held for sale and carried at LCM and therefore are not subject to CECL. The unguaranteed portion of the loans are held on balance sheet at amortized cost and are subject to CECL.
Allowance for Credit Losses – Available-for Sale (“AFS”) Debt Securities	Allowance for Credit Losses – Available-for Sale (“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, Newtek 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 September 30, 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.
Settlement Receivable	Settlement Receivable Settlement receivable represents amounts due from third parties for guaranteed portions of SBA 7(a) loans which have been sold at period-end but have not yet settled.
Loans and Loan Interest Income Recognition	Loans Held for Investment Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are classified as held for investment. At amortized cost, net of deferred fees and costs: Loans are reported at their principal amount outstanding, net of charge-offs, deferred origination costs and fees and purchase premiums and discounts. Loan origination and commitment fees and certain direct and indirect costs incurred in connection with loan originations are deferred and amortized to income over the life of the related loans as an adjustment to yield. Premiums or discounts on purchased portfolios are amortized or accreted to income using the level yield method over the remaining period to contractual maturity. Currently, all LHI at amortized cost, net of deferred fees and costs are originated and carried at Newtek Bank and have a weighted average life of five years. Newtek Bank originates SBA 7(a) loans, under its PLP status, and typically sells the guaranteed portions and holds the unguaranteed portions for investment. Newtek Bank also holds CRE and C&I loans for investment. At fair value: On a quarterly basis, management determines the fair values of the retained unguaranteed portions of SBA 7(a) loans HFI, and unrealized changes in FV are recognized in the income statement. The loans within this portfolio were originated by NSBF. Refer to the “Fair Value Option” section below for further information on loans HFI carried at FV under the FV option. Held for Sale Management designates loans as HFS based on its intent to sell loans, or portions of loans, in established secondary markets or to participant banks and credit unions. Salability requirements of government guaranteed portions include, but are not limited to, full disbursement of the loan commitment amount. The Company occasionally transfers loans between the HFS and HFI classifications based on its intent and ability to hold or sell loans. Management’s intent to sell may be impacted by secondary market conditions, loan credit quality, or other factors. At lower of amortized cost basis or fair value: Both mortgage and nonmortgage loans classified as HFS are carried at the LCM. If the amortized cost basis of a loan exceeds FV, a valuation allowance should be established for the difference. Currently, HFS loans at LCM are carried at Newtek Bank. This includes the government guaranteed portion of SBA 7(a) loans and SBA 504 loans. Management may also make a determination to market for sale certain CRE and C&I loans on a loan by loan basis. At fair value: The Company originates nonconforming loans HFS via its nonbank subsidiaries, and joint ventures. Nonconforming loans are carried at FV. The Company also originated SBA 504 loans HFS prior to the Acquisition through its nonbank subsidiaries. SBA 504 loans HFS held at Holdco 6 are accounted for under the FV option. Nonconforming loans are held at Holdco 6, NCL JV, and TSO JV and are also accounted for under the FV option. Additionally, the existing government guaranteed portion of SBA 7(a) loans held at NSBF are also HFS at FV. Refer to the “Fair Value Option” section below for further information on loans HFS carried at FV under the FV option. Fair Value Option Those loans for which the FV option were elected are measured at FV and classified as either HFS or HFI, as outlined above. Not electing FV 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 FV was previously elected continue to be measured as such. Interest income is recognized in the same manner on loans reported at FV as on non-FV loans, except in regard to origination fees and costs which are recognized immediately upon FV election. The changes in FV of loans are reported in noninterest income as Net gain (loss) on loans accounted for under the fair value option. FV of loans includes adjustments for historical credit losses, market liquidity, and economic conditions. Loan Interest Income Recognition Held for Investment At LCM: Interest on loans is generally recognized on a daily accrual basis at the applicable interest rate. Interest is not accrued on loans that are more than 90 days delinquent on payments, and any interest that was accrued but unpaid on such loans is reversed from interest income at that time, or when deemed to be uncollectible. Interest subsequently received on such loans is recorded as interest income or alternatively as a reduction in the amortized cost of the loan if there is significant doubt as to the collectability of the unpaid principal balance. Loans are returned to accrual status when principal and interest amounts contractually due are brought current and future payments are reasonably assured. At FV: In accordance with accounting standards, any loans for which FV was previously elected continue to be measured as such. Interest income is recognized in the same manner on loans reported at FV as on non-FV loans, except in regard to origination fees and costs which are recognized immediately upon FV election. The changes in FV of loans are reported within noninterest income as Net gain (loss) on loans accounted for under the fair value option. FV of loans includes adjustments for historical credit losses, market liquidity, and economic conditions. Held for Sale At LCM: Net unrealized losses, if any, on loans without a FV election, are recognized through a valuation allowance and recorded as a charge to Other noninterest income. The cost basis of loans HFS includes unamortized loan origination fees and costs. The pro-rata portion, based on the percent of the total loan sold, of the remaining deferred fees and costs are recognized as an adjustment to the gain on sale. Not electing FV 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. If the transfer is accounted for as a sale, the loans are derecognized from the Company’s consolidated balance sheet and a gain or loss is recognized in net gains on sales of loans line item on the consolidated statements of income. The gain on sale recognized in income is the sum of the premium on the guaranteed loan and the FV of the servicing assets recognized, less the discount recorded on the unguaranteed portion of the loan retained, and any FV fluctuations in associated exchange-traded interest rate futures contracts. If the transfer does not satisfy the aforementioned control criteria, the transaction is recorded as a secured borrowing with the transferred loans remaining on the Company’s consolidated balance sheet and proceeds recognized as a liability. At FV: In accordance with accounting standards, any loans for which FV was previously elected continue to be measured as such. Interest income is recognized in the same manner on loans reported at FV as on non-FV loans, except in regard to origination fees and costs which are recognized immediately upon FV election. The changes in FV of loans are reported within noninterest income as Net gain (loss) on loans accounted for under the fair value option. FV of loans includes adjustments for historical credit losses, market liquidity, and economic conditions.
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill is an indefinite lived asset, which is not amortized and is instead subject to impairment testing, at least annually. Intangible assets, such as customer merchant accounts, with finite lives are amortized over an estimated useful life of 66 to 168 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.
Servicing Assets and Transfers of Financial Assets	Servicing AssetsThe Company accounts for servicing assets in accordance with ASC Topic 860-50 - Transfers and Servicing - Servicing Assets and Liabilities. The Company and Newtek Bank earn servicing fees from the guaranteed portions of SBA 7(a) loans they originate and sell. Servicing assets for loans originated by the Company’s nonbank subsidiaries are measured at FV at each reporting date and the Company reports changes in the FV of servicing assets in earnings in the period in which the changes occur. 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. 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 September 30, 2023, NSBF engaged in thirteen (13) 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 vehicles, based on its power to direct activities through its role as servicer for the Trusts and its obligation to absorb losses and right to receive benefits, it needed to consolidate the Trusts. The Company therefore consolidates the entities using the carrying amounts of the Trusts’ 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.
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.
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 Technology: 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.
Reserve for Losses on Merchant Accounts	Payments: 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 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.
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. Historically, the Company has not experienced uncollectible accrued interest receivable on investment securities.
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.
Derivative Instruments	Derivative Instruments The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets and liabilities 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.
Fixed Assets	Fixed AssetsFixed assets, which are composed of merchant processing 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.
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 or in full to the participant and amounts are recorded as a liability on the consolidated statements of assets and liabilities.
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.
Non-Interest Income	Non-Interest Income Dividend income: Dividend income is recognized on an accrual basis for 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 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 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. Servicing income: The Company earns servicing income related to the guaranteed portions of SBA 7(a) loan investments sold into the secondary market. These recurring servicing fees are earned and recorded daily. Servicing income is earned for the full term of the loan or until the loan is repaid. Electronic payment processing 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’s revenue is primarily derived from electronic payment processing and related fee income. Electronic payment processing and fee income is derived from NMS’s 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 September 30, 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. Technology and IT support income Our technology segment sells a range of services and goods, including managed IT services, product and procurement services, professional services, webhosting, secure private cloud hosting, and backup disaster recovery. Our technology segment sells hardware and software products on both a stand-alone basis without any services and as solutions bundled with services. When our technology segment provides a combination of hardware and software products with the provision of services, it separately identifies its performance obligations under its contract with the customer as the distinct goods (hardware and/or software products) or services that will be provided. The total transaction price for an arrangement with multiple performance obligations is allocated at contract inception to each distinct performance obligation in proportion to its stand-alone selling price. The stand-alone selling price is the price at which it would sell a promised good or service separately to a customer. Our technology segment estimates the price based on observable inputs, including direct labor hours and allocatable costs, or uses observable stand-alone prices when they are available. Our technology segment’s professional services include the design and implementation of a wide range of IT products and services. Such services are typically provided by us or third-party sub-contractor vendors on a stand-alone basis. Revenue is measured based on the consideration specified in a contract with a customer. Our technology segment recognizes revenue when it satisfies a performance obligation by transferring control of a product or service or by arranging for the sale of a vendor’s products or service to a customer. Our technology segment recognizes revenue from sale of services as its technology segment performs the underlying services, typically based on time and materials basis based upon hours incurred for the performance completed to date for which we have the right to consideration. Our technology segment recognizes revenue on sales of goods at a point in time when customer takes control of goods, which typically occurs when title and risk of loss have passed to the customer. Our technology segment recognizes revenue on a gross basis for each of its services and product offerings principally because it is primarily responsible for fulfilling the promise to provide specified goods or service and it has discretion in establishing the price of specified good or service. Other noninterest income: 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. Realized gains or losses on joint ventures: 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 joint venture investments as a component of the net change in unrealized appreciation (depreciation) on joint ventures in the consolidated statements of operations Other: 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 loans with non-affiliates.
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 September 30, 2023, the Company partnered with two sponsor banks for substantially all merchant transactions. Substantially all merchant transactions were processed by one merchant processor.
Technology Services Expenses	Technology Services Expenses Costs of services and goods sold include product costs, outbound and inbound freight costs, and direct time and materials in delivering service and goods to customers. Selling and administrative expenses include salaries and wages for staff who are not directly associated with delivering services, bonuses and incentives, employee-related expenses, facility-related expenses, marketing and advertising expense, depreciation of property and equipment, professional fees, amortization of intangible assets, provisions for losses on accounts receivable and other operating expenses.
Stock-Based Compensation	Stock – Based Compensation The Company accounts for its equity-based compensation plans 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.
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 assets and liabilities recorded on the statement of financial condition were a deferred tax asset, net of $8.7 million at September 30, 2023 and a deferred tax liability, net of $19.2 million at December 31, 2022, respectively. 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 on January 1, 2023 with the start of the 2023 fiscal year, the Company no longer qualifies as a RIC and will be subject to corporate level income tax. See NOTE 19—INCOME TAXES.
Segments	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 20—SEGMENTS. In determining the appropriateness of a segment definition, the Company considers the criteria of FASB ASC 280, Segment Reporting.
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 Company 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.
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. 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.
Reclassifications	Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation.
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. 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, derivative contracts and 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 assets, warrant liabilities, joint ventures, guaranteed loans held at fair value, and highly structured or long-term derivative contracts.

BENEFIT PLANS	9 Months Ended
BENEFIT PLANS	Sep. 30, 2023
Retirement Benefits [Abstract]
BENEFIT PLANS	NOTE 18—BENEFIT PLANS: Defined Contribution Plan The Company’s employees participate in a defined contribution 401(k) plan (the “Plan”) adopted in 2004 which covers substantially all employees based on eligibility. The Plan is designed to encourage savings on the part of eligible employees and qualifies under Section 401(k) of the Code. Under the Plan, eligible employees may elect to have a portion of their pay, including overtime and bonuses, reduced each pay period, as pre-tax contributions up to the maximum allowed by law. The Company may elect to make a matching contribution equal to a specified percentage of the participant’s contribution, on their behalf as a pre-tax contribution. Employee Stock Purchase Plan (ESPP) On June 14, 2023, the Company's stockholders approved the ESPP. The aggregate number of shares of common stock that may be purchased under the ESPP will not exceed 0.2 million shares. Under the terms of the ESPP, employees may authorize the withholding of up to 15% of their eligible compensation to purchase our shares of common stock, not to exceed $25,000 of common stock for any calendar year. The purchase price per shares acquired under the ESPP will never be less than 85% of the fair market value of the lesser of our common stock on the offering date or purchase date. The Compensation, Corporate Governance and Nominating Committee of our Board of Directors in its discretion may terminate the ESPP at any time with respect to any shares for which options have not been granted and has the right to amend the ESPP with stockholder approval within 12 months before or after the adoption of the amendment. The difference between the common stock’s fair value and the employee’s discounted purchase price is expensed at the time of purchase. During the third quarter of 2023, There were no shares purchased under the ESPP.

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 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. In addition, during 2023, the Company entered into one-year employment agreements with its named executive officers.

The following summarizes the Company’s obligations and commitments, as of September 30, 2023 for future minimum cash payments required under operating lease and employment agreements:


Year	Operating Leases		Employment Agreements1		Total
2023	$	679	$	815	$	1,494
2024	2,637		525		3,162
2025	2,398		—		2,398
2026	1,842		—		1,842
2027	430		—		430
Thereafter	—		—		—
Total	$	7,986	$	1,340	$	9,326

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

Legal Matters

The Company and its subsidiaries are routinely subject to actual or threatened legal proceedings, including litigation and regulatory matters, arising in the ordinary course of business. Litigation matters range from individual actions involving a single plaintiff to class action lawsuits and can involve claims for substantial or indeterminate alleged damages or for injunctive or other relief. Regulatory investigations and enforcement matters may involve formal or informal proceedings and other inquiries initiated by various governmental agencies, law enforcement authorities, and self-regulatory organizations, and can result in fines, penalties, restitution, changes to the Company’s business practices, and other related costs, including reputational damage. At any given time, these legal proceedings are at varying stages of adjudication, arbitration, or investigation, and may relate to a variety of topics.

Assessment of exposure that could result from legal proceedings is complex because these proceedings often involve inherently unpredictable factors, including, but not limited to, the following: whether the proceeding is in early stages; whether damages or the amount of potential fines, penalties, and restitution are unspecified, unsupported, or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions; whether discovery or other investigation has begun or is not complete; whether material facts may be disputed or unsubstantiated; whether meaningful settlement discussions have commenced; and whether the matter involves class allegations. As a result of these complexities, the Company may be unable to develop an estimate or range of loss.

The Company evaluates legal proceedings based on information currently available, including advice of counsel. The Company establishes accruals for those matters, pursuant to ASC 450, when a loss is considered probable and the related amount is reasonably estimable. While the final outcomes of legal proceedings are inherently unpredictable, management is currently of the opinion that the outcomes of pending and threatened matters will not have a material effect on the Company’s business, consolidated financial position, results of operations or cash flows as a whole. As of September 30, 2023, the Company had accrued a reserve of $0.5 million.

As available information changes, the matters for which the Company is able to estimate, as well as the estimates themselves, will be adjusted accordingly. The Company’s estimates are subject to significant judgment and uncertainties, and the matters underlying the estimates will change from time to time. In the event of unexpected future developments, it is possible that an adverse outcome in any such matter could be material to the Company’s business, consolidated financial position, results of operations, or cash flows as a whole for any particular reporting period of occurrence.

In addition. as a result of a litigation brought by the Federal Trade Commission (the “FTC”) in October 2012, NMS voluntarily entered into, and continues to operate under, a permanent injunction with respect to certain of its business practices.

Guarantees

The Company is a guarantor on the SPV I Capital One Facility. Maximum borrowings under the SPV I Facility are $60.0 million. The lender’s commitments terminate in November 2024, with all amounts due under the SPV I Facility maturing in November 2025. At September 30, 2023, total principal owed by SPV I was $0.0 million. At September 30, 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 September 30, 2023, total principal owed by SPV II was $0.0 million. At September 30, 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 $30.0 million. The One Florida Bank Facility matures in May 2025. At September 30, 2023, total principal owed by SPV III was $0.0 million. At September 30, 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 September 30, 2023, total principal outstanding was $37.9 million. At September 30, 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 certain of NSBF’s potential obligations to the SBA pursuant to the Wind-down Agreement. Specifically, pursuant to the Wind-down Agreement, the Company has guaranteed NSBF’s obligations to the SBA for post-purchase repairs or denials on the guaranteed portion of 7(a) Loans sold by NSBF on the secondary market or servicing/liquidation post-purchase repairs or denial, and has funded a $10.0 million restricted cash account at Newtek Bank to secure these potential obligations.

Unfunded Commitments

At September 30, 2023, the Company had $98.0 million of unfunded commitments consisting of $18.4 million in connection with its SBA 7(a) loans, $74.0 million in connection with its SBA 504 loans, and $5.6 million relating to commercial and industrial loans. The Company anticipates these commitments will be funded from the same sources it used to fund its other loan commitments.

DIVIDENDS AND DISTRIBUTIONS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Feb. 03, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Distribution of Assets, Liabilities and Stockholders' Equity [Line Items]
Preferred stock, par value (in dollars per share)		$ 0.02		$ 0.02
Issuance of Preferred stock			$ 726	$ 20,000	$ 726
Dividends paid		$ 400	$ 0	$ 1,049	$ 0
Series A Convertible Preferred Stock
Distribution of Assets, Liabilities and Stockholders' Equity [Line Items]
Issuance of stock (in shares)	20,000
Preferred stock, par value (in dollars per share)	$ 0.02
Issuance of Preferred stock	$ 20,000
Issuance price (in dollars per share)	$ 1,000
Convertible shares (in shares)	47.54053782

- Definition

Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering.

+ References + Details

BORROWINGS - Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Aug. 31, 2023	Jan. 23, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total	$ 1,052,855			$ 666,393
Borrowings	$ 648,700			$ 539,326
Weighted Average Interest Rate	7.00%			6.11%
Collateralized deposit	$ 1,380,413			$ 998,902
Securitization Trusts
Debt Instrument [Line Items]
Collateralized deposit	10,800			14,100
Line of Credit \| Capital One Facilities
Debt Instrument [Line Items]
Loans	0
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	$ 3,550			$ 10,500
Weighted Average Interest Rate	7.75%			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	$ 2,196			$ 45,385
Weighted Average Interest Rate	8.75%			7.75%
Line of Credit \| Capital One Facilities \| Capital One, SP1
Debt Instrument [Line Items]
Commitments - line of credit	$ 60,000
Borrowings Outstanding - line of credit	$ (264)
Weighted Average Interest Rate	8.18%
Line of Credit \| Deutsche Bank Line of Credit
Debt Instrument [Line Items]
Commitments - line of credit	$ 50,000
Borrowings Outstanding - line of credit	$ (130)
Weighted Average Interest Rate	9.79%
Loans	$ 0
Line of Credit \| One Florida line of credit - SP3
Debt Instrument [Line Items]
Commitments - line of credit	30,000
Borrowings Outstanding - line of credit	$ (139)
Weighted Average Interest Rate	9.50%
Loans	$ 0
Line of Credit \| Related Party Notes Payable
Debt Instrument [Line Items]
Commitments - line of credit				$ 50,000
Borrowings Outstanding - line of credit				$ 24,250
Weighted Average Interest Rate				6.72%
Medium-term Notes \| Webster Note - MWI
Debt Instrument [Line Items]
Commitments - Notes	54,871
Borrowings	$ 37,595
Weighted Average Interest Rate	7.93%
Loans	$ 37,877
Medium-term Notes \| 2024 Notes
Debt Instrument [Line Items]
Commitments - Notes	38,250			$ 38,250
Borrowings	$ 38,069			$ 37,903
Weighted Average Interest Rate	5.75%			5.75%
Loans	$ 38,250
Medium-term Notes \| 2025 5.00% Notes
Debt Instrument [Line Items]
Commitments - Notes	30,000			$ 30,000
Borrowings	$ 29,484			$ 29,306
Weighted Average Interest Rate	5.00%			5.00%
Loans	$ 30,000
Medium-term Notes \| 2025 8.125% Notes
Debt Instrument [Line Items]
Commitments - Notes	50,000			$ 0
Borrowings	$ 49,302			$ 0
Weighted Average Interest Rate	8.125%		8.125%	0.00%
Loans	$ 50,000		$ 50,000
Medium-term Notes \| 2026 Notes
Debt Instrument [Line Items]
Commitments - Notes	115,000			$ 115,000
Borrowings	$ 113,384			$ 112,846
Weighted Average Interest Rate	5.50%			5.50%
Loans	$ 115,000			$ 115,000
Medium-term Notes \| 2028 Notes
Debt Instrument [Line Items]
Commitments - Notes	40,000	$ 40,000		0
Borrowings	$ 38,384			$ 0
Weighted Average Interest Rate	8.00%	8.00%		0.00%
Loans	$ 40,000			$ 0
Secured Debt \| FHLB Advances
Debt Instrument [Line Items]
Commitments - Notes	116,649
Borrowings	$ 23,636
Weighted Average Interest Rate	2.16%
Secured Debt \| Securitization Trusts
Debt Instrument [Line Items]
Commitments - Notes	$ 318,085			283,143
Borrowings	$ 313,633			$ 279,136
Weighted Average Interest Rate	7.81%			6.19%
Loans	$ 318,085			$ 283,143

EARNINGS PER SHARE - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Feb. 03, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Total adjustments to weighted average shares outstanding (in shares)		1,000,000		900,000
Preferred stock, par value (in dollars per share)		$ 0.02		$ 0.02
Aggregate purchase price			$ 726	$ 20,000	$ 726
Warrants issued (in shares)		47,540		47,540
Price of warrant (in dollars per share)		$ 21.03468		$ 21.03468
Expiration period				10 years
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

BORROWINGS - Outstanding Borrowings (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Aug. 31, 2023	Jan. 23, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Weighted Average Interest Rate	7.00%			6.11%
Webster Note - MWI \| Medium-term Notes
Debt Instrument [Line Items]
Principal balance	$ 37,877
Unamortized deferred financing costs	(282)
Net carrying amount	$ 37,595
Weighted Average Interest Rate	7.93%
Capital One Facilities \| Line of Credit
Debt Instrument [Line Items]
Principal balance	$ 0
Unamortized deferred financing costs	(264)
Net carrying amount	(264)
Deutsche Bank Line of Credit \| Line of Credit
Debt Instrument [Line Items]
Principal balance	0
Unamortized deferred financing costs	(130)
Net carrying amount	$ (130)
Weighted Average Interest Rate	9.79%
One Florida line of credit - SP3 \| Line of Credit
Debt Instrument [Line Items]
Principal balance	$ 0
Unamortized deferred financing costs	(139)
Net carrying amount	$ (139)
Weighted Average Interest Rate	9.50%
2024 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Principal balance	$ 38,250
Unamortized deferred financing costs	(181)			$ (347)
Net carrying amount	$ 38,069			$ 37,903
Weighted Average Interest Rate	5.75%			5.75%
2025 5.00% Notes \| Medium-term Notes
Debt Instrument [Line Items]
Principal balance	$ 30,000
Unamortized deferred financing costs	(516)
Net carrying amount	$ 29,484
Weighted Average Interest Rate	5.00%			5.00%
2025 6.85% Notes \| Medium-term Notes
Debt Instrument [Line Items]
Principal balance				$ 30,000
Unamortized deferred financing costs				(694)
Net carrying amount				$ 29,306
Weighted Average Interest Rate	6.85%			6.85%
2025 8.125% Notes \| Medium-term Notes
Debt Instrument [Line Items]
Principal balance	$ 50,000		$ 50,000
Unamortized deferred financing costs	(698)
Net carrying amount	$ 49,302
Weighted Average Interest Rate	8.125%		8.125%	0.00%
2026 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Principal balance	$ 115,000			$ 115,000
Unamortized deferred financing costs	(1,616)			(2,154)
Net carrying amount	$ 113,384			$ 112,846
Weighted Average Interest Rate	5.50%			5.50%
2028 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Principal balance	$ 40,000			$ 0
Unamortized deferred financing costs	(1,616)			0
Net carrying amount	$ 38,384			$ 0
Weighted Average Interest Rate	8.00%	8.00%		0.00%
Securitization Trusts \| Secured Debt
Debt Instrument [Line Items]
Principal balance	$ 318,085			$ 283,143
Unamortized deferred financing costs	(4,452)			(4,007)
Net carrying amount	$ 313,633			$ 279,136
Weighted Average Interest Rate	7.81%			6.19%

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 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. For the three and nine months ended September 30, 2023, we had 1.0 million and 0.9 million of anti-dilutive shares, respectively.

The following table summarizes the calculations for earnings per share for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023				2022		2023					2022
	Financial Holding Company				Investment Company			Financial Holding Company					Investment Company
	($)		(%)		($)			($)		(%)			($)
Net income	$	9,975			$	11,362		$	28,545				$	34,533
Dividends to Series A Convertible Preferred shareholders	(400)				—			(1,049)					—
Net income available to common shareholders	9,575				11,362			27,496					34,533
Dividends to common shareholders	(4,363)							(13,092)
Undistributed net income	$	5,212						$	14,404

Basic weighted average shares outstanding	24,663				24,299			24,626					24,204


Diluted weighted average shares outstanding(1,2)	24,663				24,299			24,626					24,204

Basic EPS	$	0.38			$	0.47		$	1.10				$	1.43
Diluted EPS(3)	$	0.38			$	0.47		$	1.10				$	1.43

Allocation of undistributed net income - common	$	5,018	96.3	%				$	13,931	96.7	%
Allocation of undistributed net income - Series A Convertible Preferred	$	193	3.7	%				$	473	3.3	%

(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 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. For the three and nine months ended September 30, 2023, the convertible preferred stock has an anti-dilutive impact on earnings per share. There was no preferred stock prior to February 3, 2023.

(2) The Company issued warrants to Patriot to purchase, in the aggregate, 47.54 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. For the three and nine months ended September 30, 2023, the Warrants have an anti-dilutive impact on earnings per share. There were no Warrants prior to February 3, 2023.

(3) Diluted EPS may not exceed Basic EPS; therefore, antidilutive securities are excluded from the Diluted EPS calculation.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Previously Reported	Revision of Prior Period, Adjustment	Controlled Investments Revision of Prior Period, Adjustment	Common stock	Common stock Previously Reported	Common stock Revision of Prior Period, Adjustment	Preferred stock	Preferred stock Previously Reported	Preferred stock Controlled Investments Revision of Prior Period, Adjustment	Additional paid-in capital	Additional paid-in capital Previously Reported	Additional paid-in capital Revision of Prior Period, Adjustment	Additional paid-in capital Controlled Investments Revision of Prior Period, Adjustment	Accumulated other comprehensive income	Accumulated other comprehensive income Previously Reported	Accumulated undistributed earnings	Accumulated undistributed earnings Previously Reported	Accumulated undistributed earnings Revision of Prior Period, Adjustment	Retained earnings	Retained earnings Previously Reported
Beginning balance (in shares) at Dec. 31, 2021					24,159
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)					50
DRIP shares issued	919				$ 1						918
Stock-based compensation expense, net of forfeitures	1,801										1,801
Dividends declared related to RSA (in shares)					9
Dividends declared related to RSA, net of accrued dividends forfeited	0										422						(422)
Purchase of vested stock for employee payroll tax withholding (in shares)					(30)
Purchase of vested stock for employee payroll tax withholding	(826)										(826)
Issuance of stock (in shares)					36
Issuance of stock	$ 726				$ 1						725
Restricted stock awards (in shares)	201
Dividends declared common shares	$ (49,241)																(49,241)
Dividends declared preferred shares	0
Other comprehensive income (loss), net of tax	0
Net Investment Income	(1,076)																(1,076)
Net realized gain on investments	50,398																50,398
Net unrealized depreciation on investments	(14,789)																(14,789)
Ending balance (in shares) at Sep. 30, 2022					24,425
Ending balance at Sep. 30, 2022	391,799				$ 485						370,703						20,611
Beginning balance (in shares) at Jun. 30, 2022					24,187
Beginning balance at Jun. 30, 2022	394,535				$ 483						368,934						25,118
Increase (Decrease) in Stockholders' Equity [Roll Forward]
DRIP shares issued (in shares)					20
DRIP shares issued	321				$ 1						320
Stock-based compensation expense, net of forfeitures	553										553
Dividends declared related to RSA, net of accrued dividends forfeited	0										(221)						221
Purchase of vested stock for employee payroll tax withholding	(50)										(50)
Issuance of stock (in shares)					36
Issuance of stock	$ 726				$ 1						725
Restricted stock awards (in shares)	182
Dividends declared common shares	$ (15,648)																(15,648)
Dividends declared preferred shares	0
Other comprehensive income (loss), net of tax	0
Net Investment Income	205																205
Net realized gain on investments	14,767																14,767
Net unrealized depreciation on investments	(3,610)																(3,610)
Ending balance (in shares) at Sep. 30, 2022					24,425
Ending balance at Sep. 30, 2022	$ 391,799				$ 485						370,703						20,611
Beginning balance (in shares) at Dec. 31, 2022	24,609					24,609
Beginning balance at Dec. 31, 2022		$ 375,358				$ 492			$ 0			$ 354,243				$ 0		$ 20,623			$ 0
Beginning balance, preferred stock (in shares) at Dec. 31, 2022									0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Change in presentation			$ 1										$ 20,624						$ (20,623)
Removal of fair value adjustments			(138,043)										(138,043)
Consolidation of controlled investments				$ (64,970)						$ 245				$ (65,215)
Reassessment of deferred tax assets and liabilities			19,266										19,266
DRIP shares issued (in shares)							16
DRIP shares issued			$ 217										$ 217
Stock-based compensation expense, net of forfeitures	$ 2,015										2,015
Dividends declared related to RSA (in shares)					9
Dividends declared related to RSA, net of accrued dividends forfeited	0										137									$ (137)
Purchase of vested stock for employee payroll tax withholding (in shares)					(16)
Purchase of vested stock for employee payroll tax withholding	(534)				$ (1)						(533)
Issuance of stock (in shares)								20
Issuance of stock	$ 20,000							$ 20,000
Restricted stock awards (in shares)	27
Preferred stock issuance costs	$ (507)							(507)
Dividends declared common shares	(13,092)																			(13,092)
Dividends declared preferred shares	(1,049)																			(1,049)
Net income (loss)	28,545																			28,545
Other comprehensive income (loss), net of tax	$ (184)														$ (184)
Ending balance (in shares) at Sep. 30, 2023	24,645				24,645
Ending balance at Sep. 30, 2023	$ 227,023				$ 491			$ 19,738			192,711				(184)		0			14,267
Ending balance, preferred stock (in shares) at Sep. 30, 2023	20							20
Beginning balance (in shares) at Jun. 30, 2023					24,614
Beginning balance at Jun. 30, 2023	$ 221,215				$ 491			$ 19,738			192,114				(203)					9,075
Beginning balance, preferred stock (in shares) at Jun. 30, 2023								20
Increase (Decrease) in Stockholders' Equity [Roll Forward]
DRIP shares issued (in shares)					6
DRIP shares issued	71										71
Stock-based compensation expense, net of forfeitures	592										592
Dividends declared related to RSA (in shares)					2
Dividends declared related to RSA, net of accrued dividends forfeited	0										20									(20)
Purchase of vested stock for employee payroll tax withholding (in shares)					(4)
Purchase of vested stock for employee payroll tax withholding	$ (86)										(86)
Restricted stock awards (in shares)	27
Dividends declared common shares	$ (4,363)																			(4,363)
Dividends declared preferred shares	(400)																			(400)
Net income (loss)	9,975																			9,975
Other comprehensive income (loss), net of tax	$ 19														19
Ending balance (in shares) at Sep. 30, 2023	24,645				24,645
Ending balance at Sep. 30, 2023	$ 227,023				$ 491			$ 19,738			$ 192,711				$ (184)		$ 0			$ 14,267
Ending balance, preferred stock (in shares) at Sep. 30, 2023	20							20

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS - Investments with Affiliates (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	$ 283,599
Fair Value	42,073
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	95
Investment, Identifier [Axis]: Newtek Conventional Lending, LLC
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	16,587
Purchases (Cost)	248
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	2,865
Fair Value	19,700
Interest and Other Income	0
Dividend Income	1,302
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)	14,302
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	276
Fair Value	21,013
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)	14,550
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	3,141
Fair Value	42,073
Interest and Other Income	0
Dividend Income	1,397
Joint Ventures
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value	23,022
Purchases (Cost)	14,550
Principal Received	0
Net Realized Gains/(Losses)	0
Net Unrealized Gains/(Losses)	3,141	$ 0
Fair Value	40,713
Interest and Other Income	0
Dividend Income	1,302
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	$ 95

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Joint ventures, cost	$ 37,865	$ 23,314
Investments, cost	$ 39,225	$ 156,169
Preferred stock, par value (in dollars per share)	$ 0.02
Preferred stock, shares authorized (in shares)	20
Preferred stock, shares issued (in shares)	20
Preferred stock, shares outstanding (in shares)	20
Common stock, par value (in dollars per share)	$ 0.02	$ 0.02
Common stock, shares authorized (in shares)	200,000	200,000
Common stock, shares issued (in shares)	24,645	24,609
Common shares outstanding at end of period (in shares)	24,645	24,609
Controlled Investments
Investments, cost	$ 0	$ 131,495
Non-Control Investments
Investments, cost	$ 1,360	$ 1,360

DEPOSITS

9 Months Ended

Sep. 30, 2023

Banking and Thrift, Interest [Abstract]

DEPOSITS

NOTE 10—DEPOSITS:

The following table summarizes deposits by type:


	September 30, 2023		December 31, 2022
Non-interest-bearing:
Demand	$	20,316	$	—
Interest-bearing:
Checking	3,409		—
Money market	32,807		—
Savings	229,502		—
Time deposits	146,525		—
Total interest-bearing	$	412,243	$	—
Total deposits	$	432,559	$	—

Time deposits, money market, and interest-bearing checking obtained through brokers	$	37,143	$	—
Aggregate amount of deposit accounts that exceeded the FDIC limit	$	72,772	$	—
Demand deposit overdrafts reclassified as loan balances	$	1	$	—

The following table summarizes the scheduled maturities of time deposits:


Remainder of 2023	$	66,090
2024	26,342
2025	16,269
2026	21,702
2027	15,491
Thereafter	631
Total time deposits	$	146,525

STOCK BASED COMPENSATION - Restricted Stock Activity (Details) - 2015 Equity Incentive Plan - shares	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Sep. 30, 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]
Options granted (in shares)	0
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares authorized (in shares)	1,500,000	1,500,000
Net restricted stock (granted)/forfeited (in shares)		28,409	(250,622)	(214,654)	2,639	(6,285)	(93,568)	(5,007)	(120,933)
Shares available for issuance (in shares)	(660,021)	(660,021)

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands	Oct. 02, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Subsequent Event [Line Items]
Loss on extinguishment of debt		$ 0	$ 0	$ 0	$ 417
Subsequent Event \| Capital One Facilities \| Line of Credit
Subsequent Event [Line Items]
Loss on extinguishment of debt	$ 300

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 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 nine months ended September 30, 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 September 30, 2023		Interest and Other Income		Dividend Income
Joint Ventures
Newtek Conventional Lending, LLC	$	16,587	$	248	$	—	$	—	$	2,865	$	19,700	$	—	$	1,302
Newtek TSO II Conventional Credit Partners, LP	6,435		14,302		—		—		276		21,013		—		—
Total Joint Ventures	$	23,022	$	14,550	$	—	$	—	$	3,141	$	40,713	$	—	$	1,302

Non-Control Investments
EMCAP Loan Holdings, LLC	$	1,000	$	—	$	—	$	—	$	—	$	1,000	$	—	$	95
Biller Genie Software, LLC	360		—		—		—		—		360		—		—
Total Non-Control Investments	$	1,360	$	—	$	—	$	—	$	—	$	1,360	$	—	$	95

Total Affiliate Investments	$	24,382	$	14,550	$	—	$	—	$	3,141	$	42,073	$	—	$	1,397

Amounts due from affiliated companies was $0.4 million and $1.3 million at September 30, 2023 and December 31, 2022, respectively, and are included within Other Assets. Amounts due to related parties were $0.1 and $1.2 million at September 30, 2023 and December 31, 2022, respectively, and are included within Other Liabilities.

The Company purchased $5.3 million of loans from a related party, TSO JV during the nine months ended September 30, 2023.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
ASSETS
Cash and due from banks	$ 15,610	$ 53,692
Restricted cash	70,737	71,914
Interest bearing deposits in banks	137,346	0
Total cash and cash equivalents	223,693	125,606
Debt securities available-for-sale, at fair value	33,138	0
Loans held for sale, at fair value	70,467	19,171
Loans held for sale, at LCM	48,450	0
Loans held for investment, at fair value	492,987	505,268
Loans held for investment, at amortized cost, net of deferred fees and costs	280,934	0
Allowance for credit losses	(8,209)	0
Loans held for investment, at amortized cost, net	272,725	0
Federal Home Loan Bank and Federal Reserve Bank stock	3,657	0
Settlement receivable	63,957	0
Investments	42,073	283,599
Goodwill and intangibles	27,157	0
Right of use assets	5,991	6,484
Deferred tax asset, net	8,656	0
Servicing assets	36,774	30,268
Other assets	50,688	28,506
Total assets	1,380,413	998,902
Deposits:
Noninterest-bearing	20,316	0
Interest-bearing	412,243	0
Total deposits	432,559	0
Borrowings	648,700	539,326
Dividends payable	4,769	0
Lease liabilities	7,343	7,973
Deferred tax liabilities, net	0	19,194
Due to participants	21,235	35,627
Accounts payable, accrued expenses and other liabilities	38,784	21,424
Total liabilities	1,153,390	623,544
Shareholders' Equity:
Preferred stock (par value $0.02 per share; authorized 20 shares, 20 and 20 shares issued and outstanding, respectively)	19,738
Common stock (par value $0.02 per share; authorized 200,000 shares, 24,645 and 24,609 shares issued and outstanding, respectively)	491	492
Additional paid-in capital	192,711	354,243
Retained earnings	14,267	20,623
Accumulated other comprehensive loss, net of income taxes	(184)	0
Total shareholders' equity	227,023	375,358
Total liabilities and shareholders' equity	1,380,413	998,902
Controlled Investments
ASSETS
Investments	0	259,217
Joint Ventures
ASSETS
Investments	40,713	23,022
Non-Control Investments
ASSETS
Investments	$ 1,360	$ 1,360

SERVICING ASSETS - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Servicing Assets at Fair Value [Line Items]
Servicing assets at fair value	$ 36,774		$ 36,774		$ 30,268
SBA
Servicing Assets at Fair Value [Line Items]
Servicing assets at fair value	1,700,000		1,700,000
Non-affiliate
Servicing Assets at Fair Value [Line Items]
Servicing fee income	$ 4,600	$ 3,600	$ 13,300	$ 9,900

SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of segments

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


As of and for the three months ended September 30, 2023
	Banking		Technology		NSBF		Payments		Corporate and Other		Eliminations		Consolidated
Interest income	$	10,513	$	—	$	12,868	$	482	$	3,848	$	(975)	$	26,736
Interest expense	5,371		—		6,930		925		6,408		(975)		18,659
Net interest income	5,142		—		5,938		(443)		(2,560)		—		8,077
Provision for loan credit losses	3,446		—		—		—		—		—		3,446
Net interest income after provision for loan credit losses	1,696		—		5,938		(443)		(2,560)		—		4,631
Noninterest income	28,111		7,406		188		12,173		41,283		(46,261)		42,900
Noninterest expense	17,935		6,598		4,697		7,756		6,419		(8,860)		34,545
Income tax expense (benefit)	4,045		—		5		—		(1,039)		—		3,011
Net income (loss)	7,827		808		1,424		3,974		33,343		(37,401)		9,975
Assets	$	602,105	$	25,617	$	659,821	$	52,090	$	692,773	$	(651,993)	$	1,380,413


As of and for the nine months ended September 30, 2023
	Banking		Technology		NSBF		Payments		Corporate and Other		Eliminations		Consolidated
Interest income	$	22,364	$	—	$	38,841	$	1,627	$	8,673	$	(3,501)	$	68,004
Interest expense	11,265		246		20,222		2,735		18,704		(3,501)		49,671
Net interest income	11,099		(246)		18,619		(1,108)		(10,031)		—		18,333
Provision for loan credit losses	7,339		—		—		—		—		—		7,339
Net interest income after provision for loan credit losses	3,760		(246)		18,619		(1,108)		(10,031)		—		10,994
Noninterest income	62,934		23,894		26,500		34,982		76,053		(92,250)		132,113
Noninterest expense	48,443		21,796		23,455		23,975		22,673		(26,451)		113,891
Income tax expense (benefit)	6,264		89		45		445		(6,172)		—		671
Net income (loss)	11,987		1,763		21,619		9,454		49,521		(65,799)		28,545
Assets	$	602,105	$	25,617	$	659,821	$	52,090	$	692,773	$	(651,993)	$	1,380,413

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

FAIR VALUE MEASUREMENTS - Fair Value Levels (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	$ 33,138
Loans held for sale, at fair value	70,467	$ 19,171
Investments	42,073	283,599
Loans held for investment, at fair value	492,987	505,268
Other real estate owned	2,829	3,529
Servicing asset	31,292	30,268
Derivative instruments	122
Total assets	672,908	841,835
Liabilities	194
Carrying Amount
Cash and due from banks	15,610	53,692	$ 7,355	$ 2,397
Restricted cash	70,737	71,914	74,777	184,463
Interest bearing deposits in banks	137,346	0	$ 0	$ 0
Loans held for sale, at LCM	48,450	0
Loans held for investment, at amortized cost, net of deferred fees and costs	280,934	0
Federal Home Loan Bank and Federal Reserve Bank stock	3,657	0
Servicing assets at LCM	5,482
Deposits	432,559	0
Borrowings	648,700	539,326
Other Fair Value Financial Instruments
Loans held for sale, at LCM	48,715
Total loans held for investment, at amortized cost, net of deferred fees and costs	281,759
Federal Home Loan Bank and Federal Reserve Bank stock	3,657
Servicing assets at LCM	5,646
Deposits	435,875
Borrowings	644,445	541,356
U.S. Treasury notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	29,321
Government agency debentures
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale	3,817
Loans Held For Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale, at fair value	70,467	19,171
Loans Held for Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for investment, at fair value	492,987	505,268
Cash and due from banks
Other Fair Value Financial Instruments
Cash and cash equivalents	15,610	53,692
Restricted cash
Other Fair Value Financial Instruments
Cash and cash equivalents	70,737	71,914
Interest bearing deposits in banks
Other Fair Value Financial Instruments
Cash and cash equivalents	137,346
Controlled Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	259,217
Joint Ventures
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	40,713	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
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned	0	0
Servicing asset	0	0
Derivative instruments	0
Total assets	29,321	0
Liabilities	0
Other Fair Value Financial Instruments
Loans held for sale, at LCM	0
Total loans held for investment, at amortized cost, net of deferred fees and costs	0
Federal Home Loan Bank and Federal Reserve Bank stock	0
Servicing assets at LCM	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	29,321
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]
Loans held for sale, at fair value	0	0
Level 1 \| Loans Held for Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for investment, at fair value	0	0
Level 1 \| Cash and due from banks
Other Fair Value Financial Instruments
Cash and cash equivalents	15,610	53,692
Level 1 \| Restricted cash
Other Fair Value Financial Instruments
Cash and cash equivalents	70,737	71,914
Level 1 \| Interest bearing deposits in banks
Other Fair Value Financial Instruments
Cash and cash equivalents	137,346
Level 1 \| Controlled Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		0
Level 1 \| Joint Ventures
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
Derivative instruments	122
Total assets	5,190	19,171
Liabilities	0
Other Fair Value Financial Instruments
Loans held for sale, at LCM	0
Total loans held for investment, at amortized cost, net of deferred fees and costs	0
Federal Home Loan Bank and Federal Reserve Bank stock	3,657
Servicing assets at LCM	0
Deposits	435,875
Borrowings	187,202	152,162
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	3,817
Level 2 \| Loans Held For Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale, at fair value	1,251	19,171
Level 2 \| Loans Held for Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for investment, at fair value	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 \| Joint Ventures
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	2,829	3,529
Servicing asset	31,292	30,268
Derivative instruments	0
Total assets	638,397	799,642
Liabilities	194
Other Fair Value Financial Instruments
Loans held for sale, at LCM	48,715
Total loans held for investment, at amortized cost, net of deferred fees and costs	281,759
Federal Home Loan Bank and Federal Reserve Bank stock	0
Servicing assets at LCM	5,646
Deposits	0
Borrowings	457,243	389,194
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]
Loans held for sale, at fair value	69,216	0
Level 3 \| Loans Held for Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for investment, at fair value	492,987	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 \| Non-affiliate \| Loans Held For Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	69,216
Level 3 \| Controlled Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		259,217
Level 3 \| Joint Ventures
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	40,713
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

STOCK BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of restricted stock issuances

The following table summarizes the restricted stock issuances under the 2015 Stock Incentive Plan, net of shares forfeited, if any.


Restricted Stock authorized under the 2015 plan1						1,500,000
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)
Nine months ended September 30, 2023						28,409
Total net restricted stock (granted)/forfeited						(660,021)

The following table summarizes the restricted stock issuances under the 2023 Stock Incentive Plan, net of shares forfeited, if any.


Restricted Stock authorized under the 2023 plan1						3,000,000
Net restricted stock (granted)/forfeited during:
Three months ended September 30, 2023						(56,052)
Total net restricted stock (granted)/forfeited						(56,052)

(1) No stock options were granted under the 2023 Stock Incentive Plan. The 2023 Stock Incentive Plan provides for grants of up to 3,000,000 shares of Common Stock.

BUSINESS COMBINATION

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

BUSINESS COMBINATION

NOTE 3—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 (NBL was subsequently merged into 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 September 30, 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 and nine months ended September 30, 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:


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	1,224
Core deposit intangible	1,040
Deferred tax asset	760
Other Assets	927
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 $1.2 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 20—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:


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 nine months ended September 30, 2023, related to the NBNYC Acquisition. These costs have been included in the Consolidated Statement of Operations in Professional Services Expense.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)	Sep. 30, 2023	Aug. 31, 2023	Jan. 23, 2023	Dec. 31, 2022
Weighted Average Interest Rate	7.00%			6.11%
2025 5.00% Notes \| Medium-term Notes
Weighted Average Interest Rate	5.00%			5.00%
2025 8.125% Notes \| Medium-term Notes
Weighted Average Interest Rate	8.125%		8.125%	0.00%
2028 8.00% Notes \| Medium-term Notes
Weighted Average Interest Rate	8.00%	8.00%		0.00%
2025 6.85% Notes \| Medium-term Notes
Weighted Average Interest Rate	6.85%			6.85%

GOODWILL AND INTANGIBLE ASSETS - Future Amortization (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2023	$ 319
2024	982
2025	948
2026	928
2027	907
Thereafter	1,939
Total	$ 6,023	$ 0

DERIVATIVE INSTRUMENTS

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

NOTE 12—DERIVATIVE INSTRUMENTS:

The Company historically uses 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 September 30, 2023 and December 31, 2022:


	September 30, 2023							December 31, 2022
			Fair Value				Remaining			Fair Value				Remaining
Contract Type	Notional1		Asset2		Liability		Maturity (years)	Notional		Asset		Liability		Maturity (years)
5-year Treasury Futures	$	(23,406)	$	122	$	—	0.25 years	$	—	$	—	$	—	—

(1) Shown as a negative number when the position is sold short.

(2) Shown in Other Assets in the accompanying consolidated balance sheets.

The following table indicated the net realized gains (losses) and unrealized appreciation (depreciation) on derivatives as included in Other Noninterest Income in the consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended								Nine Months Ended
	September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Contract Type	Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)
5-year Treasury Futures	$	(441)	$	1,158	$	—	$	—	$	54	$	843	$	183	$	445

Collateral posted with our futures counterparty is segregated in the Company’s books and records. Historically, the Company’s counterparty has 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.

DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Breakdown of derivatives outstanding

The following is a breakdown of the derivatives outstanding as of September 30, 2023 and December 31, 2022:


	September 30, 2023							December 31, 2022
			Fair Value				Remaining			Fair Value				Remaining
Contract Type	Notional1		Asset2		Liability		Maturity (years)	Notional		Asset		Liability		Maturity (years)
5-year Treasury Futures	$	(23,406)	$	122	$	—	0.25 years	$	—	$	—	$	—	—

(1) Shown as a negative number when the position is sold short.

(2) Shown in Other Assets in the accompanying consolidated balance sheets.

Gains and losses on derivatives


	Three Months Ended								Nine Months Ended
	September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Contract Type	Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)
5-year Treasury Futures	$	(441)	$	1,158	$	—	$	—	$	54	$	843	$	183	$	445

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of earnings per share

The following table summarizes the calculations for earnings per share for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023				2022		2023					2022
	Financial Holding Company				Investment Company			Financial Holding Company					Investment Company
	($)		(%)		($)			($)		(%)			($)
Net income	$	9,975			$	11,362		$	28,545				$	34,533
Dividends to Series A Convertible Preferred shareholders	(400)				—			(1,049)					—
Net income available to common shareholders	9,575				11,362			27,496					34,533
Dividends to common shareholders	(4,363)							(13,092)
Undistributed net income	$	5,212						$	14,404

Basic weighted average shares outstanding	24,663				24,299			24,626					24,204


Diluted weighted average shares outstanding(1,2)	24,663				24,299			24,626					24,204

Basic EPS	$	0.38			$	0.47		$	1.10				$	1.43
Diluted EPS(3)	$	0.38			$	0.47		$	1.10				$	1.43

Allocation of undistributed net income - common	$	5,018	96.3	%				$	13,931	96.7	%
Allocation of undistributed net income - Series A Convertible Preferred	$	193	3.7	%				$	473	3.3	%

(3) Diluted EPS may not exceed Basic EPS; therefore, antidilutive securities are excluded from the Diluted EPS calculation.

SERVICING ASSETS - Fair Value and Valuation Assumptions (Details) $ in Thousands	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Servicing Assets at Fair Value [Line Items]
Servicing assets at fair value	$ 36,774	$ 30,268
Fair Value
Servicing Assets at Fair Value [Line Items]
Servicing assets at fair value	31,292	30,268
Lower of Cost or Market
Servicing Assets at Fair Value [Line Items]
Servicing assets at fair value	$ 5,482	$ 0
Weighted Average \| Discount factor \| Fair Value
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1375	0.1650
Weighted Average \| Discount factor \| Lower of Cost or Market
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1375	0
Weighted Average \| Cumulative prepayment rate \| Fair Value
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2250	0.2500
Weighted Average \| Cumulative prepayment rate \| Lower of Cost or Market
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2250	0
Weighted Average \| Average cumulative default rate \| Fair Value
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1900	0.2500
Weighted Average \| Average cumulative default rate \| Lower of Cost or Market
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1900	0
Minimum \| Discount factor \| Fair Value
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1375	0.1650
Minimum \| Discount factor \| Lower of Cost or Market
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1375	0
Minimum \| Cumulative prepayment rate \| Fair Value
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2250	0.2500
Minimum \| Cumulative prepayment rate \| Lower of Cost or Market
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2250	0
Minimum \| Average cumulative default rate \| Fair Value
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1900	0.2500
Minimum \| Average cumulative default rate \| Lower of Cost or Market
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1900	0
Maximum \| Discount factor \| Fair Value
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1375	0.1650
Maximum \| Discount factor \| Lower of Cost or Market
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1375	0
Maximum \| Cumulative prepayment rate \| Fair Value
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2250	0.2500
Maximum \| Cumulative prepayment rate \| Lower of Cost or Market
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2250	0
Maximum \| Average cumulative default rate \| Fair Value
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1900	0.2500
Maximum \| Average cumulative default rate \| Lower of Cost or Market
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1900	0

EARNINGS PER SHARE - Schedule of Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 9,975	$ 11,362	$ 28,545	$ 34,533
Dividends to Series A Convertible Preferred shareholders	(400)	0	(1,049)	0
Net income available to common shareholders	9,575	11,362	27,496	34,533
Dividends declared common shares	(4,363)	$ (15,648)	(13,092)	$ (49,241)
Undistributed net income	$ 5,212		$ 14,404
Basic weighted average shares outstanding (in shares)	24,663	24,299	24,626	24,204
Diluted weighted average shares outstanding (in shares)	24,663	24,299	24,626	24,204
Basic EPS (in dollars per share)	$ 0.38	$ 0.47	$ 1.10	$ 1.43
Diluted EPS (in dollars per share)	$ 0.38	$ 0.47	$ 1.10	$ 1.43
Allocation of undistributed net income - common	$ 5,018		$ 13,931
Allocation of Undistributed Net Income - Common, percent	96.30%		96.70%
Allocation of undistributed net income - Series A Convertible Preferred	$ 193		$ 473
Allocation of Undistributed Net Income - Series A Convertible Preferred, percent	3.70%		3.30%

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023
Statement of Stockholders' Equity [Abstract]
Dividends declared common shares (in dollars per share)	$ 0.18	$ 0.75	$ 0.18
Dividends declared preferred shares (in dollars per share)	$ 12.27		$ 12.27

BENEFIT PLANS (Details) - Employee Stock Purchase Plan $ in Thousands, shares in Millions	Jun. 14, 2023 USD ($) shares
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Shares authorized (in shares) \| shares	0.2
Percentage of eligible compensation to withhold	15.00%
Fair market value of shares to be purchased \| $	$ 25
Percentage of fair market value of common stock	85.00%

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net income	$ 9,975	$ 11,362	$ 28,545	$ 34,533

- Definition

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

+ References

+ Details

INVESTMENTS - Debt Securities, Unrealized Losses (Details) $ in Thousands	Sep. 30, 2023 USD ($) loan
Debt Securities, Available-for-Sale [Line Items]
Less Than 12 Months, Fair Value	$ 33,138
Less Than 12 Months, Unrealized Losses	281
12 Months or More, Fair Value	0
12 Months or More, Unrealized Losses	$ 0
Debt Securities, Available-for-Sale, Unrealized Loss Position, Number of Positions \| loan	5
Total, Fair Value	$ 33,138
Total, Unrealized Losses	281
U.S. Treasury notes
Debt Securities, Available-for-Sale [Line Items]
Less Than 12 Months, Fair Value	29,321
Less Than 12 Months, Unrealized Losses	98
12 Months or More, Fair Value	0
12 Months or More, Unrealized Losses	$ 0
Debt Securities, Available-for-Sale, Unrealized Loss Position, Number of Positions \| loan	2
Total, Fair Value	$ 29,321
Total, Unrealized Losses	98
Government agency debentures
Debt Securities, Available-for-Sale [Line Items]
Less Than 12 Months, Fair Value	3,817
Less Than 12 Months, Unrealized Losses	183
12 Months or More, Fair Value	0
12 Months or More, Unrealized Losses	$ 0
Debt Securities, Available-for-Sale, Unrealized Loss Position, Number of Positions \| loan	3
Total, Fair Value	$ 3,817
Total, Unrealized Losses	$ 183

SEGMENTS (Details) $ in Thousands		3 Months Ended		9 Months Ended
SEGMENTS (Details) $ in Thousands	Jan. 06, 2023	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) segment	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| segment				4
Interest income		$ 26,736	$ 9,557	$ 68,004	$ 26,002
Total interest expense		18,659	6,917	49,671	17,412
Net interest income		8,077	2,640	18,333	8,590
Provision for credit losses		3,446	0	7,339	0
Interest Income (Expense), after Provision for Loan Loss		4,631	2,640	10,994	8,590
Noninterest income		42,900	25,298	132,113	72,937
Noninterest expense		34,545	16,458	113,891	46,819
Income tax expense		3,011	118	671	175
Net income		9,975	$ 11,362	28,545	$ 34,533
Assets		1,380,413		1,380,413		$ 998,902
NBNYC
Segment Reporting Information [Line Items]
Divest or termination period	2 years
Divest or termination period, extension	2 years
Operating Segments \| Banking
Segment Reporting Information [Line Items]
Interest income		10,513		22,364
Total interest expense		5,371		11,265
Net interest income		5,142		11,099
Provision for credit losses		3,446		7,339
Interest Income (Expense), after Provision for Loan Loss		1,696		3,760
Noninterest income		28,111		62,934
Noninterest expense		17,935		48,443
Income tax expense		4,045		6,264
Net income		7,827		11,987
Assets		602,105		602,105
Operating Segments \| Technology
Segment Reporting Information [Line Items]
Interest income		0		0
Total interest expense		0		246
Net interest income		0		(246)
Provision for credit losses		0		0
Interest Income (Expense), after Provision for Loan Loss		0		(246)
Noninterest income		7,406		23,894
Noninterest expense		6,598		21,796
Income tax expense		0		89
Net income		808		1,763
Assets		25,617		25,617
Operating Segments \| NSBF
Segment Reporting Information [Line Items]
Interest income		12,868		38,841
Total interest expense		6,930		20,222
Net interest income		5,938		18,619
Provision for credit losses		0		0
Interest Income (Expense), after Provision for Loan Loss		5,938		18,619
Noninterest income		188		26,500
Noninterest expense		4,697		23,455
Income tax expense		5		45
Net income		1,424		21,619
Assets		659,821		659,821
Operating Segments \| Payments
Segment Reporting Information [Line Items]
Interest income		482		1,627
Total interest expense		925		2,735
Net interest income		(443)		(1,108)
Provision for credit losses		0		0
Interest Income (Expense), after Provision for Loan Loss		(443)		(1,108)
Noninterest income		12,173		34,982
Noninterest expense		7,756		23,975
Income tax expense		0		445
Net income		3,974		9,454
Assets		52,090		52,090
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Interest income		3,848		8,673
Total interest expense		6,408		18,704
Net interest income		(2,560)		(10,031)
Provision for credit losses		0		0
Interest Income (Expense), after Provision for Loan Loss		(2,560)		(10,031)
Noninterest income		41,283		76,053
Noninterest expense		6,419		22,673
Income tax expense		(1,039)		(6,172)
Net income		33,343		49,521
Assets		692,773		692,773
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Interest income		975		3,501
Total interest expense		975		3,501
Net interest income		0		0
Provision for credit losses		0		0
Interest Income (Expense), after Provision for Loan Loss		0		0
Noninterest income		46,261		92,250
Noninterest expense		8,860		26,451
Income tax expense		0		0
Net income		37,401		65,799
Assets		$ 651,993		$ 651,993

INVESTMENTS - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2023	Jan. 28, 2022	May 20, 2019
Debt Securities, Available-for-Sale [Line Items]
Accrued interest receivable on available-for-sale securities	$ 0.1
Newtek Conventional Lending, LLC
Debt Securities, Available-for-Sale [Line Items]
Investment sale		$ 56.3
Yield percentage		3.209%
Newtek Conventional Lending, LLC \| Newtek Commercial Lending
Debt Securities, Available-for-Sale [Line Items]
Joint venture ownership percentage			50.00%
Newtek Conventional Lending, LLC \| Conventional Lending TCP Holding
Debt Securities, Available-for-Sale [Line Items]
Joint venture ownership percentage			50.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
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-Name Accounting Standards Codification
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-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

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

BORROWINGS

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

BORROWINGS

NOTE 11—BORROWINGS:

At September 30, 2023 and December 31, 2022, the Company had borrowings composed of the following:


	September 30, 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	$	3,550	7.75	%	$	150,000	$	10,500	6.75	%
Capital One line of credit - unguaranteed1	—		2,196		8.75	%	—		45,385		7.75	%
Webster NMS Note2	54,871		37,595		7.93	%	—		—		—
SPV I Capital One Facility2	60,000		(264)		8.18	%	—		—		—
SPV II Deutsche Bank Facility2	50,000		(130)		9.79	%	—		—		—
SPV III One Florida Bank Facility2	30,000		(139)		9.50	%	—		—		—
FHLB Advances	116,649		23,636		2.16	%	—		—		—
Notes:
2024 Notes2	38,250		38,069		5.75	%	38,250		37,903		5.75	%
2025 5.00% Notes2	30,000		29,484		5.00	%	30,000		29,306		5.00	%
2025 8.125% Notes2,3	50,000		49,302		8.13	%	—		—		—	%
2026 Notes2	115,000		113,384		5.50	%	115,000		112,846		5.50	%
2028 Notes2,4	40,000		38,384		8.00	%	—		—		—	%
Notes payable - related parties	—		—		—	%	50,000		24,250		6.72	%
Notes payable - Securitization Trusts2,5	318,085		313,633		7.81	%	283,143		279,136		6.19	%
Total	$	1,052,855	$	648,700	7.00	%	$	666,393	$	539,326	6.11	%

(1) Total combined commitments of the guaranteed and unguaranteed lines of credit were $150.0 million at September 30, 2023 and December 31, 2022.

(5) At September 30, 2023 and 2022, the assets of the consolidated Trusts totaled $10.8 million and $14.1 million, respectively.


	September 30, 2023			December 31, 2022
	Principal balance	Unamortized deferred financing costs	Net carrying amount1	Principal balance	Unamortized deferred financing costs	Net carrying amount


Webster NMS Note	37,877	(282)	37,595	—	—	—
SPV I Capital One Facility	—	(264)	(264)	—	—	—
SPV II Deutsche Bank Facility	—	(130)	(130)	—	—	—
SPV III One Florida Bank Facility	—	(139)	(139)	—	—	—
2024 Notes	38,250	(181)	38,069	38,250	(347)	37,903
2025 5.00% Notes	30,000	(516)	29,484	—	—	—
2025 6.85% Notes	—	—	—	30,000	(694)	29,306
2025 8.125% Notes	50,000	(698)	49,302	—	—	—
2026 Notes	115,000	(1,616)	113,384	115,000	(2,154)	112,846
2028 Notes	40,000	(1,616)	38,384	—	—	—

Notes Payable - Securitization Trusts	318,085	(4,452)	313,633	283,143	(4,007)	279,136

At September 30, 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, and the Notes payable - Securitization Trusts, approximates fair value due to their variable interest rates.

At September 30, 2023, the carrying amount of Newtek Bank’s FHLB borrowings includes a $0.2 million purchase accounting adjustment from the $23.8 million current principal amount to reach a balance sheet value of $23.6 million.

The fair values of the fixed rate 2028 Notes, 2026 Notes and 2024 Notes are based on the closing public share price on the date of measurement as included in the chart below.


	September 30, 2023				December 31, 2022
	Closing Price		Fair Value		Closing Price	Fair Value
2028 Notes	$	24.19	$	38,704	n/a	n/a
2026 Notes	24.05		110,630		25.77	118,542
2024 Notes	24.75		37,868		24.80	37,944

These borrowings are not recorded at fair value on a recurring basis. The fixed rate 2025 Notes are held at par as of September 30, 2023 and December 31, 2022.

Total interest expense including unused line fees and amortization of deferred financing costs related to borrowings for the nine months ended September 30, 2023 and 2022 was $38.9 million and $17.4 million, respectively. Total interest expense including unused line fees and amortization of deferred financing costs related to borrowings for the three months ended September 30, 2023 and 2022 was $13.4 million and $6.9 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

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-Section 50
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+ Details

INVESTMENTS - Investment Portfolio (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-Sale [Line Items]
Cost	$ 39,225	$ 156,169
Fair Value	42,073	283,599
Non-Control Investments
Debt Securities, Available-for-Sale [Line Items]
Cost	1,360	1,360
Fair Value	1,360	1,360
Controlled Investments
Debt Securities, Available-for-Sale [Line Items]
Cost	0	131,495
Fair Value	0	259,217
Joint Ventures
Debt Securities, Available-for-Sale [Line Items]
Cost	37,865	23,314
Fair Value	40,713	23,022
Equity \| Controlled Investments
Debt Securities, Available-for-Sale [Line Items]
Cost	0	99,195
Fair Value	0	241,113
Debt \| Controlled Investments
Debt Securities, Available-for-Sale [Line Items]
Cost	0	32,300
Fair Value	$ 0	$ 18,104

- Definition

Cost of the investment.

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- Definition

Fair value of investment in security owned.

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+ Details

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2023

Investments in and advances to affiliates

Transactions related to our joint ventures and non-controlled investments for the nine months ended September 30, 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 September 30, 2023		Interest and Other Income		Dividend Income
Joint Ventures
Newtek Conventional Lending, LLC	$	16,587	$	248	$	—	$	—	$	2,865	$	19,700	$	—	$	1,302
Newtek TSO II Conventional Credit Partners, LP	6,435		14,302		—		—		276		21,013		—		—
Total Joint Ventures	$	23,022	$	14,550	$	—	$	—	$	3,141	$	40,713	$	—	$	1,302

Non-Control Investments
EMCAP Loan Holdings, LLC	$	1,000	$	—	$	—	$	—	$	—	$	1,000	$	—	$	95
Biller Genie Software, LLC	360		—		—		—		—		360		—		—
Total Non-Control Investments	$	1,360	$	—	$	—	$	—	$	—	$	1,360	$	—	$	95

Total Affiliate Investments	$	24,382	$	14,550	$	—	$	—	$	3,141	$	42,073	$	—	$	1,397

INVESTMENTS - Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Amortized Cost
Maturing within 1 year	$ 30,420	$ 0
After 1 year through 5 years	3,000	0
Total available for sale securities	33,420	0
Fair Value
Maturing within 1 year	30,321	0
After 1 year through 5 years	2,817	0
Total available for sale securities	$ 33,138	$ 0

LOANS HELD FOR INVESTMENT - Credit Quality Indicators (Details) - USD ($) $ in Thousands	Sep. 30, 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	$ 280,934	$ 0
Total	765,712
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	51,855
Year Two	28,332
Year Three	15,626
Year Four	915
Year Five	12,176
Prior	63,129
Loans held for investment, at amortized cost, net of deferred fees and costs	172,033	0
Total	172,033
Commercial Real Estate \| Risk Grades 1-4
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	51,855
Year Two	28,332
Year Three	14,676
Year Four	0
Year Five	10,595
Prior	58,508
Total	163,966
Commercial Real Estate \| Risk Grades 5-6
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	0
Year Two	0
Year Three	950
Year Four	915
Year Five	1,581
Prior	4,621
Total	8,067
Commercial Real Estate \| Risk Grade 7
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	0
Year Two	0
Year Three	0
Year Four	0
Year Five	0
Prior	0
Total	0
Commercial & Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	6,413
Year Two	0
Year Three	0
Year Four	0
Year Five	0
Prior	2,017
Loans held for investment, at amortized cost, net of deferred fees and costs	8,430	0
Total	8,430
Commercial & Industrial \| Risk Grades 1-4
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	6,413
Year Two	0
Year Three	0
Year Four	0
Year Five	0
Prior	2,017
Total	8,430
Commercial & Industrial \| Risk Grades 5-6
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	0
Year Two	0
Year Three	0
Year Four	0
Year Five	0
Prior	0
Total	0
Commercial & Industrial \| Risk Grade 7
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	0
Year Two	0
Year Three	0
Year Four	0
Year Five	0
Prior	0
Total	0
SBA
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	135,390	172,646
Year Two	164,525	69,746
Year Three	63,583	34,711
Year Four	30,471	74,963
Year Five	68,843	62,148
Prior	130,772	91,054
Loans held for investment, at amortized cost, net of deferred fees and costs	100,597	0
Total	593,584	505,268
SBA \| Risk Grades 1-4
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	135,190	171,948
Year Two	156,428	66,113
Year Three	57,882	34,116
Year Four	29,466	69,563
Year Five	58,524	55,376
Prior	106,174	70,669
Total	543,664	467,785
SBA \| Risk Grades 5-6
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	200	698
Year Two	7,973	3,633
Year Three	5,684	595
Year Four	983	5,400
Year Five	10,309	6,772
Prior	23,891	20,273
Total	49,040	37,371
SBA \| Risk Grade 7
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	0	0
Year Two	0	0
Year Three	0	0
Year Four	0	0
Year Five	0	0
Prior	0	112
Total	0	112
SBA \| Risk Grade 8
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	0
Year Two	124
Year Three	17
Year Four	22
Year Five	10
Prior	707
Total	880
Total Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Year One	193,658
Year Two	192,857
Year Three	79,209
Year Four	31,386
Year Five	81,019
Prior	195,918
Loans held for investment, at amortized cost, net of deferred fees and costs	281,060	$ 0
Total	$ 774,047

INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investment holdings, schedule of investments

Investments consisted of the following at:


	September 30, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Non-controlled equity investments	$	1,360	$	1,360	$	1,360	$	1,360
Joint ventures	37,865		40,713		23,314		23,022
Controlled investments:
Equity	—		—		99,195		241,113
Debt	—		—		32,300		18,104
Total investments	$	39,225	$	42,073	$	156,169	$	283,599

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
	September 30, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value
Food Services and Drinking Places	$	45,922	$	45,828	$	47,012	$	47,198
Specialty Trade Contractors	42,746		38,055		42,082		38,059
Professional, Scientific, and Technical Services	37,856		36,642		39,910		38,086
Ambulatory Health Care Services	28,180		27,183		27,275		25,151
Amusement, Gambling, and Recreation Industries	23,809		25,196		23,812		24,928
Merchant Wholesalers, Durable Goods	23,085		22,573		22,164		22,004
Administrative and Support Services	22,705		21,222		22,352		20,827
Repair and Maintenance	16,144		17,082		16,993		17,165
Merchant Wholesalers, Nondurable Goods	16,648		16,083		16,183		15,312
Personal and Laundry Services	12,971		13,708		12,949		13,333
Fabricated Metal Product Manufacturing	12,534		13,234		13,483		14,032
Truck Transportation	16,745		12,893		23,673		18,071
Accommodation	9,523		10,569		11,476		10,428
Construction of Buildings	10,009		9,913		11,252		10,194
Social Assistance	8,936		9,780		9,150		9,857
Motor Vehicle and Parts Dealers	9,436		9,732		10,071		9,536
Transportation Equipment Manufacturing	8,604		8,988		8,272		8,445
Food Manufacturing	10,614		8,416		10,756		8,873
Food and Beverage Stores	7,789		7,913		5,711		5,857
Support Activities for Mining	8,621		7,835		10,426		8,615
Rental and Leasing Services	6,907		7,312		7,417		7,647
Building Material and Garden Equipment and Supplies Dealers	7,752		7,124		8,098		7,689
Nursing and Residential Care Facilities	6,230		6,723		8,187		8,697
Educational Services	5,508		5,716		5,838		6,133
Other	109,107		103,267		118,251		109,131
Total	$	508,381	$	492,987	$	532,793	$	505,268

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	September 30, 2023		December 31, 2022
	(Unaudited)		(Unaudited)
Cash	$	557	$	791
Restricted cash	2,115		2,362
Investments in loans, at fair value (amortized cost of $70,173 and $78,785, respectively)	71,698		78,595
Other Assets	1,624		1,807
Total assets	$	75,994	$	83,555

Securitization notes payable	$	39,775	$	49,273
Other liabilities	782		1,109
Total liabilities	40,557		50,382

Net assets	35,437		33,173
Total liabilities and net assets	$	75,994	$	83,555


Selected Statements of Operations Information	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022


	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Interest and other income	$	1,291	$	1,744	$	4,576	$	5,258
Total expenses	614		737		1,923		2,223
Net investment income	677		1,007		2,653		3,035
Unrealized (depreciation) appreciation on investments	(216)		(2,778)		1,713		(4,824)
Net increase (decrease) in net assets resulting from operations	$	461	$	(1,771)	$	4,366	$	(1,789)

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


Selected Statement of Assets and Liabilities Information	September 30, 2023		December 31, 2022
	(Unaudited)		(Unaudited)
Cash	$	3,921	$	1,046
Restricted cash	999		498
Investments in loans, at fair value (amortized cost of $63,102 and $21,038, respectively)	65,784		22,449
Other assets	1,742		2,034
Total assets	$	72,446	$	26,027

Bank notes payable	$	29,636	$	12,950


Other liabilities	783		206
Total liabilities	30,419		13,156

Net assets	42,027		12,871
Total net assets	$	72,446	$	26,027


Selected Statements of Operations Information	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Interest and other income	$	876	$	—	$	1,968	$	—
Total expenses	1,424		—		3,042		—
Net investment loss	(548)		—		(1,074)		—
Unrealized appreciation on investments	1,464		—		1,270		—
Realized loss on investments	—		—		(16)		—
Realized gain on derivative transactions	351		—		518		—
Unrealized loss on derivative transactions	(151)		—		(146)		—
Net increase in net assets resulting from operations	$	1,116	$	—	$	552	$	—

Schedule of available-for-sale securities

The following tables summarize the amortized cost and fair value of available-for-sale securities by major type as of September 30, 2023:


At September 30, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury notes	$	29,420	$	—	$	98	$	29,321
Government agency debentures	4,000		—		183		3,817
Total available for sale securities	$	33,420	$	—	$	281	$	33,138

Debt securities, unrealized losses


	At September 30, 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	$	29,321	$	98	$	—	$	—	2		$	29,321	$	98
Government agency debentures	3,817		183		—		—		3		3,817		183
Total	$	33,138	$	281	$	—	$	—	$	5	$	33,138	$	281

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 September 30, 2023				At December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Maturing within 1 year	$	30,420	$	30,321	$	—	$	—
After 1 year through 5 years	3,000		2,817		—		—


Total available for sale securities	$	33,420	$	33,138	$	—	$	—

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


	At September 30, 2023		At December 31, 2022
Pledged for deposits	$	—	$	—
Pledged for borrowings and other	30,720		—
Total available for sale securities pledge	$	30,720	$	—

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-9

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
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-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
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-Section 50
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-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

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-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
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-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

+ Details

LEASES - Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
2023	$ 679
2024	2,637
2025	2,398
2026	1,842
2027	430
Lessee, Operating Lease, Liability, to be Paid, after Year Five	0
Total	7,986
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(643)
Operating Lease, Liability	$ 7,343	$ 7,973

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Related Party
Related Party Transaction [Line Items]
Other receivables	$ 0.4	$ 1.3
Due to related parties	0.1	$ 1.2
Newtek-TSO JV \| Financing Receivable
Related Party Transaction [Line Items]
Purchase of loans	$ 5.3

GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 0.4		$ 1.2

SIGNIFICANT ACCOUNTING POLICIES - Cash and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and due from banks	$ 15,610	$ 53,692	$ 7,355	$ 2,397
Restricted cash	70,737	71,914	74,777	184,463
Interest bearing deposits in banks	137,346	0	0	0
Cash and restricted cash	$ 223,693	$ 125,606	$ 82,132	$ 186,860

- Definition

Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation.

+ References + Details

SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Reconciliation of cash

The following table provides a reconciliation of cash and restricted cash as of September 30, 2023 and 2022 and December 31, 2022 and 2021:


	September 30, 2023		September 30, 2022		December 31, 2022		December 31, 2021
Cash and due from banks	$	15,610	$	7,355	$	53,692	$	2,397
Restricted cash	70,737		74,777		71,914		184,463
Interest bearing deposits in banks	137,346		—		—		—
Cash and restricted cash	$	223,693	$	82,132	$	125,606	$	186,860

Reconciliation of restricted cash

The following table provides a reconciliation of cash and restricted cash as of September 30, 2023 and 2022 and December 31, 2022 and 2021:


	September 30, 2023		September 30, 2022		December 31, 2022		December 31, 2021
Cash and due from banks	$	15,610	$	7,355	$	53,692	$	2,397
Restricted cash	70,737		74,777		71,914		184,463
Interest bearing deposits in banks	137,346		—		—		—
Cash and restricted cash	$	223,693	$	82,132	$	125,606	$	186,860

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 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 September 30, 2023 for future minimum cash payments required under operating lease and employment agreements:


Year	Operating Leases		Employment Agreements1		Total
2023	$	679	$	815	$	1,494
2024	2,637		525		3,162
2025	2,398		—		2,398
2026	1,842		—		1,842
2027	430		—		430
Thereafter	—		—		—
Total	$	7,986	$	1,340	$	9,326

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