Blog & Company News
Mar 31, 2014
NewtekOne Reports 33% Increase in 2013 Net Income Attributable to Newtek Business Services, Inc. to $7.5 Million
NewtekOne Reports 33% Increase in 2013 Diluted EPS to $0.20 Company Exceeds Previously Issued 2013 Diluted EPS Guidance
NewtekOne, today reported its financial results for the year ended December 31, 2013.
Full Year 2013 Consolidated Financial Highlights:
2013 Operational Highlights:
- Diluted earnings per share ("EPS") were $0.20; an increase of 33.3% over $0.15 in 2012.
- The Company exceeded the high end of its previously issued 2013 EPS guidance range of $0.17 to $0.19.
- Net income attributable to Newtek Business Services, Inc. was $7.5 million; an increase of 33.4% over $5.6 million in 2012.
- Pretax income was $11.1 million; an increase of 17.3% over $9.4 million in 2012.
- Operating revenues were $143.6 million; an increase of 9.5% over $131.1 million in 2012.
Revised 2014 Consolidated Guidance:
- Small business finance segment pretax income was $10.1 million; an increase of 25.3% from $8.1 million in 2012.
- The Company originated $177.9 million in loans; an increase of 65.6% over $107.4 million in 2012.
- Completed two securitizations, which totaled approximately $48.0 million of unguaranteed portions of SBA 7(a) loans. Both securitizations were rated 'A' by Standard and Poor's.
- The Company's loan servicing portfolio grew 98.6% to $1.1 billion at December 31, 2013.
- Electronic payment processing segment pretax income was $8.3 million; an increase of 17.9% over $7.0 million in 2012.
- EPS midpoint forecast at $0.23 per share, with a range of $0.20 and $0.26, which represents an increase of 15.0% over 2013 diluted EPS of $0.20.
- Revenue midpoint forecast at $161.0 million, with a range of $154.0 million and $168.0 million, which represents an increase of 12.1% over 2013 revenue of $143.6 million.
- Pretax income midpoint forecast at $13.5 million, with a range of $11.8 million and $15.1 million, which represents an increase of 21.6% over 2013 pretax income of $11.1 million.
- Adjusted EBITDA midpoint forecast at $26.0 million, with a range of $24.5 million and $27.5 million, which represents an increase of 26.2% over 2013 Adjusted EBITDA of $20.6 million.
- The Company expects to originate $240 to $260 million of SBA 7(a) loans in 2014.
Barry Sloane, Chairman, President and Chief Executive Officer said, "We are extremely pleased to report yet another fantastic year for NewtekOne with healthy top- and bottom-line growth. Specifically, we achieved 33% growth in net income attributable to Newtek Business Services, Inc. to $7.5 million on an approximate 10% increase in total revenue to $143.6 million, fully demonstrating the operating leverage of our business model. We also realized a 33% increase in diluted earnings per share to $0.20, exceeding the high end of our previously stated diluted EPS guidance range of $0.17 to $0.19."
Mr. Sloane continued, "We had several noteworthy achievements throughout 2013, with many of these successes and milestones emanating from our SBA lender, Newtek Small Business Finance.
With a 34% increase in revenue and 25% increase in pretax income, our lender was at the forefront of our overall growth illustrating the scalability of our lending platform. By the end of 2013, NewtekOne's lender advanced its ranking to the 6th
most active lender among all bank and non-bank lenders by SBA lending volume according to the U.S. Small Business Administration
. We exceeded our midpoint loan origination guidance for 2013, and originated approximately $180 million in loans; a 66% increase over 2012.
We aim to continue this robust but controlled growth, and anticipate originating between $240 and $260 million in loans in 2014, representing an approximate 40% increase over 2013. By the end of 2013, our total loan servicing portfolio reached $1.1 billion, a milestone in the Company's operating history. It is our goal to continue to grow the loan servicing aspect of our business organically, through a continued increase in loan origination volume, as well as through the addition of third-party loan servicing portfolios. Finally, we completed two securitizations during 2013 totaling approximately $48.0 million of unguaranteed portions of SBA 7(a) loans, both of which were rated 'A' by Standard and Poor's. This was the first time in the Company's history that we completed two securitization transactions in the same calendar year.
"Despite advice proffered in the past from investors and bankers to exit our lending business and focus on our Electronic Payment Processing
segments, we were always optimistic regarding the growth and earnings potential of our lender, evident in today's results. And while the business service space is not without its challenges, it is with that same optimism that we look forward to renewed growth in our other business service segments. We have meticulously and strategically built what we believe to be an unrivaled platform that delivers integrated business services hosted in our Cloud to independent business owners, which we believe gives us a tremendous competitive edge.
"We are confident that our ability to offer our clients better software and better service while lowering their costs will enable us to realize strong growth and success in the areas of Electronic Payment Processing
, Cloud Computing
, Health and Benefits Brokerage
, Insurance Agency
and, in the future, Digital Bookkeeping and Tax. We look forward to overcoming this challenging environment with our unparalleled business product and service offerings and truly believe in our anticipated success," concluded Mr. Sloane.