v3.26.1
LOANS
 6 Months Ended
Jun. 30, 2026
Receivables [Abstract]  
LOANS
NOTE 5—LOANS:
Loans held for investment (HFI), at fair value

Loans HFI, at fair value, includes SBA 7(a) loans originated by NSBF and C&I LA loans and 504 loans held by SPV IV, a wholly-owned subsidiary of NALH. On occasion, NSBF has distributed loans to NewtekOne that were originated as SBA 7(a) loans and the SBA guarantee has been subsequently repurchased by NSBF. The following table shows the Company’s loan portfolio by collateral type for loans HFI, at fair value:

Loans HFI, at Fair Value
June 30, 2026December 31, 2025
CostFair ValueCostFair Value
CRE$276,121 $281,084 $131,015 $138,110 
Residential Real Estate160,024 159,011 52,229 50,539 
Machinery and Equipment100,537 96,223 46,552 43,266 
Accounts Receivable and Inventory95,716 88,249 43,944 38,670 
Unsecured75,966 76,064 4,295 4,259 
Other22,457 20,937 8,619 6,354 
Total$730,821 $721,568 $286,654 $281,198 
Loans HFI, at amortized cost, net of deferred fees and costs
Loans HFI, at amortized cost, net of deferred fees and costs, includes unguaranteed portions of SBA 7(a) loans, guaranteed portions of SBA 7(a) loans repurchased from the SBA and the secondary market, CRE, and C&I loans originated and held by Newtek Bank. The following table shows the Company’s loan portfolio by loan type for loans HFI, at amortized cost:
Loans HFI, at Amortized Cost
June 30, 2026December 31, 2025
SBA$689,897 $539,746 
CRE337,327 274,194 
C&I109,786 80,380 
Total Loans1,137,010 894,320 
Deferred fees and costs, net2,527 2,369 
Loans held for investment, at amortized cost, net of deferred fees and costs$1,139,537 $896,689 
Past Due and Non-Accrual Loans HFI

Loans HFI, at fair value

The following tables summarize the aging of accrual and non-accrual loans HFI, at fair value by class:
As of June 30, 2026
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Accounted for Under the FV Option
30-59 Days
60-89 Days
90+ Days
SBA, at fair value$9,992 $19,962 $5,920 $99,671 $135,545 $576,079 $711,624 
C&I LA, at fair value— — — 9,944 9,944 — 9,944 
Total, at fair value$9,992 $19,962 $5,920 $109,615 $145,489 $576,079 $721,568 
As of December 31, 2025
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Accounted for Under the FV Option
30-59 Days
60-89 Days
90+ Days
SBA, at fair value$10,843 $5,903 $2,732 $72,543 $92,021 $189,177 $281,198 
Loans HFI, at amortized cost, net of deferred fees and costs

The following tables summarize the aging of accrual and non-accrual loans HFI, at amortized cost by class:
As of June 30, 2026
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Carried at Amortized Cost
30-59 Days
60-89 Days
90+ Days
At amortized cost
SBA
$27,151 $25,351 $3,284 $132,870 $188,656 $501,241 $689,897 
CRE732 — 440 2,729 3,901 333,426 337,327 
C&I1,102 591 — 1,405 3,098 106,688 109,786 
Total, at amortized cost
$28,985 $25,942 $3,724 $137,004 $195,655 $941,355 $1,137,010 
Deferred fees and costs2,527 
Total, at amortized cost net of deferred fees and costs$1,139,537 
Allowance for credit losses(52,715)
Total, at amortized cost, net
$1,086,822 
As of December 31, 2025
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Carried at Amortized Cost
30-59 Days
60-89 Days
90+ Days
At amortized cost
SBA$9,740 $5,628 $— $74,008 $89,376 $450,370 $539,746 
CRE— — — 2,976 2,976 271,218 274,194 
C&I5,089 98 — 1,830 7,017 73,363 80,380 
Total, at amortized cost$14,829 $5,726 $— $78,814 $99,369 $794,951 $894,320 
Deferred fees and costs2,369 
Total, at amortized cost net of deferred fees and costs$896,689 
Allowance for credit losses(45,226)
Total, at amortized cost, net$851,463 
Credit Quality Indicators

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

The Company uses a grading system to rank the quality of each loan. The grade is periodically evaluated and adjusted as performance dictates. Loan 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 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 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 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 may have unproved, insufficient or marginal primary sources of repayment that appear sufficient to service the debt at this time. These loans also include loans underwritten using projected and/or proforma financial information provided by the borrower. 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 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 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 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 at June 30, 2026 and December 31, 2025:
June 30, 2026Term Loans HFI by Origination Year
20262025202420232022PriorTotal
SBA, at fair value
Risk Grades 1-4$325,312 $93,805 $6,273 $12,682 $58,465 $83,148 $579,685 
Risk Grades 5-6447 6,329 10,447 12,918 44,122 56,964 131,227 
Risk Grade 7— — — 110 26 180 316 
Risk Grade 8— — — — 126 270 396 
Total$325,759 $100,134 $16,720 $25,710 $102,739 $140,562 $711,624 
C&I LA, at fair value
Risk Grades 5-6$— $— $— $— $— $9,944 $9,944 
Total$— $— $— $— $— $9,944 $9,944 
SBA, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$105,913 $169,178 $130,757 $59,732 $— $— $465,580 
Risk Grades 5-6278 21,931 84,644 60,055 — — 166,908 
Risk Grade 7— 9,189 21,556 10,233 — — 40,978 
Risk Grade 8— 2,179 5,373 8,879 — — 16,431 
Total$106,191 $202,477 $242,330 $138,899 $— $— $689,897 
CRE, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$82,073 $93,206 $44,348 $24,483 $30,171 $48,810 $323,091 
Risk Grades 5-6— 8,788 849 — 1,725 2,874 14,236 
Total$82,073 $101,994 $45,197 $24,483 $31,896 $51,684 $337,327 
C&I, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$37,772 $51,989 $10,141 $2,884 $— $— $102,786 
Risk Grades 5-6— 1,052 5,853 29 — — 6,934 
Risk Grade 7— — 66 — — — 66 
Total$37,772 $53,041 $16,060 $2,913 $— $— $109,786 
Total$551,795 $457,646 $320,307 $192,005 $134,635 $202,190 $1,858,578 
December 31, 2025Term Loans HFI by Origination Year
20252024202320222021PriorTotal
SBA, at fair value
Risk Grades 1-4$— $— $17,823 $78,437 $27,409 $82,954 $206,623 
Risk Grades 5-6— — 3,861 19,677 7,498 43,431 74,467 
Risk Grade 7— — 33 50 — — 83 
Risk Grade 8— — — 25 — — 25 
Total$— $— $21,717 $98,189 $34,907 $126,385 $281,198 
SBA, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$189,147 $168,558 $74,500 $— $— $— $432,205 
Risk Grades 5-63,454 39,769 35,032 — — — 78,255 
Risk Grade 7332 11,069 10,205 — — — 21,606 
Risk Grade 846 2,371 5,263 — — — 7,680 
Total$192,979 $221,767 $125,000 $— $— $— $539,746 
CRE, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$100,724 $52,167 $25,429 $30,508 $15,753 $42,090 $266,671 
Risk Grades 5-61,800 885 — 1,742 — 3,096 7,523 
Total$102,524 $53,052 $25,429 $32,250 $15,753 $45,186 $274,194 
C&I, at amortized cost, net of deferred fees and costs
Risk Grades 1-4$58,284 $12,367 $3,315 $— $— $— $73,966 
Risk Grades 5-6711 5,383 36 — — — 6,130 
Risk Grade 7— 284 — — — — 284 
Total$58,995 $18,034 $3,351 $— $— $— $80,380 
Total$354,498 $292,853 $175,497 $130,439 $50,660 $171,571 $1,175,518 
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 June 30, 2026 and 2025:

June 30, 2026June 30, 2025
CREC&ISBATotal
CRE
C&I
SBATotal
Beginning balance$2,180 $3,172 $41,369 $46,721 $1,837 $609 $36,203 $38,649 
Charge offs(81)(296)(5,642)(6,019)— (267)(4,815)(5,082)
Recoveries— 1 199 200 — — 13 13 
Provision for credit losses1
536 403 10,874 11,813 208 1,198 7,639 9,045 
Total
$2,635 $3,280 $46,800 $52,715 $2,045 $1,540 $39,040 $42,625 
1    Excludes $0.3 million and $72 thousand of Provision for credit losses relating to unfunded commitments for the three months ended June 30, 2026 and 2025, respectively, which is recorded within Accounts payable, accrued expenses and other liabilities in accordance with ASC 326.
The following table details activity in the ACL for the six months ended June 30, 2026 and 2025:

June 30, 2026June 30, 2025
CRE
C&I
SBA
Total
CRE
C&I
SBA
Total
Beginning balance$1,873 $3,282 $40,071 $45,226 $1,430 $315 $28,488 $30,233 
Charge offs(211)(880)(13,436)(14,527)— (267)(9,946)(10,213)
Recoveries— 488 385 873 — — 17 17 
Provision for credit losses1
973 390 19,780 21,143 615 1,492 20,481 22,588 
Ending balance$2,635 $3,280 $46,800 $52,715 $2,045 $1,540 $39,040 $42,625 
1     Excludes $579 thousand and $34 thousand of Provision for credit losses relating to unfunded commitments for the six months ended June 30, 2026 and June 30, 2025, respectively, which is recorded within Accounts payable, accrued expenses and other liabilities in accordance with ASC 326.
The amortized cost basis of loans on nonaccrual status and the associated ACL are as follows:

June 30, 2026December 31, 2025
Nonaccrual without AllowanceNonaccrual with AllowanceACL
Nonaccrual without Allowance
Nonaccrual with AllowanceACL
SBA$64,087 $68,783 $15,644 $34,058 $39,950 $12,311 
CRE1,880 849 300 2,979 — — 
C&I644 761 201 419 1,408 1,328 
Total
$66,611 $70,393 $16,145 $37,456 $41,358 $13,639 


The unpaid contractual principal balance and recorded investment for the loans individually assessed is shown in the table below by type:

June 30, 2026December 31, 2025
Real Estate CollateralNon-Real Estate CollateralTotal
ACL
Real Estate Collateral
Non-Real Estate Collateral
Total
ACL
SBA$80,409 $52,461 $132,870 $15,644 $44,066 $29,942 $74,008 $12,311 
CRE16,118 — 16,118 300 18,487 — 18,487 — 
C&I1,182 223 1,405 201 419 1,408 1,827 1,328 
Total$97,709 $52,684 $150,393 $16,145 $62,972 $31,350 $94,322 $13,639 

Accrued interest on loans totaled $25.0 million and $22.4 million as of June 30, 2026 and December 31, 2025, respectively, and is excluded from the estimate of credit losses. The Company writes off accrued interest receivable by reversing interest income and typically occurs upon loans becoming 90 to 120 days past due.
Loan Modifications Made to Borrowers Experiencing Financial Difficulty

During the three months ended June 30, 2026, the Company executed 11 loan modification involving borrowers experiencing financial difficulty. The following table summarizes the amortized cost basis of loans that were modified:

Three Months Ended June 30, 2026
Other-Than-Insignificant Payment Delay Term ExtensionCombination - Other-Than-Insignificant Payment Delay and Term Extensionof Total Class of Financing Receivable
SBA$426 $— $1,814 0.3 %
CRE— — — — 
C&I— — — — 
Total$426 $— $1,814 0.2 %

As of June 30, 2026, the amortized cost basis of modified loans was $2.2 million.
During the three months ended June 30, 2025, the Company executed 1 loan modification involving borrowers experiencing financial difficulty. The following table summarizes the amortized cost basis of loans that were modified:

Three Months Ended June 30, 2025
Other-Than-Insignificant Payment DelayTerm ExtensionCombination - Other-Than-Insignificant Payment Delay and Principal Forgivenessof Total Class of Financing Receivable
SBA$248 $— $— — %
CRE— — — — 
C&I— — — — 
Total$248 $— $— — %

As of June 30, 2025, the amortized cost basis of modified loans was $248 thousand.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three months ended June 30, 2026 and 2025:


During the six months ended June 30, 2026, the Company executed 11 loan modification involving borrowers experiencing financial difficulty. The following table summarizes the amortized cost basis of loans that were modified:

Six Months Ended June 30, 2026
Other-Than-Insignificant Payment DelayTerm ExtensionCombination - Other-Than-Insignificant Payment Delay and Term Extensionof Total Class of Financing Receivable
SBA$426 $— $1,814 0.3 %
CRE— — — — 
C&I— — — — 
Total$426 $— $1,814 0.2 %

As of June 30, 2026, the amortized cost basis of modified loans was $2.2 million.

During the six months ended June 30, 2025, the Company executed 1 loan modification involving borrowers experiencing financial difficulty. The following table summarizes the amortized cost basis of loans that were modified:

Six Months Ended June 30, 2025
Other-Than-Insignificant Payment DelayTerm ExtensionCombination - Other-Than-Insignificant Payment Delay and Principal Forgivenessof Total Class of Financing Receivable
SBA$248 $— $— — %
CRE— — — — 
C&I— — — — 
Total$248 $— $— — %

As of June 30, 2025, the amortized cost basis of modified loans was $248 thousand.

There were no modifications for borrowers experiencing financial difficulty that subsequently defaulted within twelve months of the modification date in the first six months of 2026 or 2025.
Loans held for sale, at fair value
June 30, 2026December 31, 2025
SBA 504 First Lien$239,449 $201,013 
SBA 504 Second Lien30,002 31,207 
SBA 7(a)1
— 324,469 
C&I LA2
220,627 — 
ALP
10,705 415,148 
Loans held for sale, at fair value$500,783 $971,837 
1    As a result of an agreement with the SBA with respect to Newtek Bank’s participation in the SBA Secondary Market, $442.6 million of loans held for sale, at fair value, as of June 30, 2026, were reclassified to loans held for investment, at fair value.
2    C&I LA loans originated by Newtek Bank, which began during the first quarter of 2026.
The following tables summarize the aging of accrual and non-accrual loans HFS, at fair value by class:
As of June 30, 2026
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Accounted for Under the FV Option
30-59 Days
60-89 Days
90+ Days1
SBA, at fair value$— $1,120 $— $20,470 $21,590 $247,861 $269,451 
C&I LA, at fair value1
— — — — — 220,627 220,627 
ALP, at fair value8,896 — — — 8,896 1,809 10,705 
Total$8,896 $1,120 $— $20,470 $30,486 $470,297 $500,783 
1    C&I LA loans originated by Newtek Bank, which began during the first quarter of 2026.

As of December 31, 2025
Past Due and Accruing
Non- accrual
Total Past Due and Non-accrual
CurrentTotal Accounted for Under the FV Option
30-59 Days
60-89 Days
90+ Days
SBA, at fair value$21,441 $5,018 $8,713 $12,580 $47,752 $508,937 $556,689 
ALP, at fair value9,049 — — 11,634 20,683 394,465 415,148 
Total$30,490 $5,018 $8,713 $24,214 $68,435 $903,402 $971,837 
Loans held for sale, at LCM
June 30, 2026December 31, 2025
SBA 504 First Lien$15,837 $19,075 
SBA 504 Second Lien4,636 7,457 
Loans held for sale, at LCM
$20,473 $26,532 
The following tables summarize the aging of accrual and non-accrual loans HFS, at LCM by class:
As of June 30, 2026
Past Due and AccruingNon- accrualTotal Past Due and Non-accrualCurrentTotal Carried at Amortized Cost
30-59 Days60-89 Days90+ Days
SBA$— $— $— $2,413 2,413 $18,060 $20,473 
As of December 31, 2025
Past Due and AccruingNon- accrualTotal Past Due and Non-accrualCurrentTotal Carried at Amortized Cost
30-59 Days60-89 Days90+ Days
SBA$— $— $— $2,435 $2,435 $24,097 $26,532