v3.26.1
SERVICING ASSETS
 6 Months Ended
Jun. 30, 2026
Transfers and Servicing [Abstract]  
SERVICING ASSETS
NOTE 7—SERVICING ASSETS:
Servicing assets held by NSBF are measured at fair value and the Company performs valuations on a quarterly basis. Servicing assets held by Newtek Bank, including Newtek Bank’s subsidiary SBL, and Newtek ALP Holdings are measured at lower of cost or market where the assets are initially recorded at fair value, then subsequently amortized, and assessed for impairment each reporting period.
The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells, for the unguaranteed portions of SBA 7(a) loans in the NSBF sponsored securitizations, for SBA 504 loans sold where servicing is retained, and for the loan portfolios held by the TSO JV sponsored securitization and Newtek ALP Holdings and its sponsored securitizations.
The following table summarizes the unpaid principal balance of loans serviced at June 30, 2026 and December 31, 2025:
June 30, 2026December 31, 2025
SBA 7(a)
$1,598,679 $1,698,866 
ALP
643,809 345,856 
50448,134 48,302 
Total loans serviced
$2,290,622 $2,093,024 
The following table summarizes the fair value and valuation assumptions related to servicing assets at June 30, 2026 and December 31, 2025:
June 30, 2026December 31, 2025
WeightedRangeWeightedRange
Unobservable InputAmountAverageMinimumMaximumAmountAverageMinimumMaximum
Servicing assets at FV:
$12,456 $15,358 
Discount factor1
11.25 %11.25 %11.25 %11.25 %11.25 %11.25 %
Cumulative prepayment rate22.50 %22.50 %22.50 %22.50 %22.50 %22.50 %
Average cumulative default rate21.00 %21.00 %21.00 %21.00 %21.00 %21.00 %
Servicing assets at LCM:
39,500 29,564 
Discount factor1
10.67 %10.25 %11.25 %11.27 %10.75 %12.00 %
Cumulative prepayment rate32.90 %22.50 %50.00 %33.72 %22.50 %50.00 %
Average cumulative default rate17.31 %5.00 %21.00 %16.95 %5.00 %21.00 %
Total
$51,956 $44,922 
1 Determined based on risk spreads and observable secondary market transactions.
Refer to NOTE 9—FAIR VALUE MEASUREMENTS for a rollforward of servicing assets, at fair value. The following tables show a rollforward of servicing assets, at LCM for the six months ended June 30, 2026 and 2025:
Servicing Assets, at LCMJune 30, 2026June 30, 2025
Balance at beginning of the period
$29,564 $24,195 
Amortization1
(8,544)(4,329)
Additions2
18,480 11,965 
Impairment assessment
— — 
Balance at end of the period
$39,500 $31,831 
1    Included within Net loss on loan servicing assets in the Consolidated Statements of Income
2    Included within Net gains on sales of loans in the Consolidated Statements of Income
Servicing income earned for the three and six months ended June 30, 2026 and 2025 was as follows:

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Servicing income
$5,003$6,054$11,388$11,579