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SEGMENTS
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
SEGMENTS
NOTE 22—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. The Company's segment reporting process begins with the assignment of all loans directly to the segments where these products are originated and/or serviced. All deposit accounts are allocated to the Banking segment as our wholly owned FDIC insured depository is included within the Banking segment. Equity capital is assigned to each segment based on the risk profile of their assets and liabilities. With the exception of goodwill, which is assigned a 100% weighting, equity capital allocations ranged from 0% to 25% during the year. Any excess or deficient equity not allocated to segments based on risk is assigned to the Corporate & Other segment.

Net interest income, provision for credit losses, and non-interest expense amounts are recorded in their respective segments to the extent the amounts are directly attributable to those segments. The net income amount for each reportable segment is further derived by the use of expense allocations. Certain expenses not directly attributable to a specific segment are allocated across all segments based on key metrics, such as number of employees. These types of expenses include information technology, operations, human resources, finance, risk management, credit administration, legal, and marketing.
The assignment and allocation methodologies used in the segment reporting process discussed above change from time to time as systems are enhanced, methods for evaluating segment performance or product lines change or as business segments are realigned.

The Company operates five reportable segments for management reporting purposes with their operating and financials results reviewed by the chief operating decision maker (“CODM”), which is the Chief Executive Officer of the Company. The CODM assesses overall segment performance based on pre-tax income and uses this metric to allocate resources for each segment, focusing on budgeting and forecasting. The Company has five segments, 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.

Alternative Lending

Alternative Lending includes NALH and its subsidiaries as well as NH6. The Company has originated loans under its alternative lending program since 2019. Prior to July 1, 2024, the Company originated ALP loans with the intent to sell to a JV. While the Company continues to source JV partners to participate in this program, the Company could also originate ALP loans designated as HFI. The Company does not expect any significant changes to the underwriting or terms of loans in its ALP.

NSBF

NSBF relates to NSBF’s legacy portfolio of SBA 7(a) loans held outside Newtek Bank; no new loan origination activity takes place. A material portion of NSBF’s legacy portfolio of SBA 7(a) loans reside in securitization trusts.
Payments

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

NTS provides website hosting, web design and development, 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. As a result of commitments made to the Federal Reserve in connection with the Acquisition, the Company has divested of NTS on January 2, 2025. As a result of the Company’s entry into the NTS Sale Agreement and the Company’s completion of the NTS Sale, the Company has reported NTS as Held for Sale as of December 31, 2024 and will not be reported as a segment in future filings given the sale of NTS. See NOTE 9—ASSETS AND LIABILITIES DIRECTLY ASSOCIATED WITH ASSETS HELD FOR SALE. See NOTE 25—SUBSEQUENT EVENTS: Sale of NTS.

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 NIA and PMT, and elimination adjustments to reconcile the results of the operating segments to the 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 year ended December 31, 2024
Banking
Alternative Lending
TechnologyNSBFPayments
Corporate & Other
Consolidated
Segment
Elim
SegmentElimSegmentElimSegmentElimSegmentElimSegmentElim
Interest income$69,576 $(2)$15,073 $(12)$6 $(6)$36,655 $(421)$2,362 $(2,310)$2,364 $(1,867)$121,418 
Interest expense29,855 (643)3,539 — — — 21,097 — 2,984 (77)28,256 (3,898)81,113 
Net interest income/(loss)
39,721 641 11,534 (12)6 (6)15,558 (421)(622)(2,233)(25,892)(2,233)40,305 
Provision for loan credit losses26,216 — — — — — — — — — — — 26,216 
Net interest income after provision for loan credit losses13,505 641 11,534 (12)6 (6)15,558 (421)(622)(2,233)(25,892)(2,233)14,089 
Noninterest income136,080 (28,068)55,824 — 27,020 (7,139)(23,410)— 48,852 (2,028)65,242 (55,061)217,312 
Technology services expense — — — — 12,575 (314)— — — — — — 12,261 
Electronic payment processing expense— — — — — — — — 21,046 (1,168)— — 19,878 
Salaries and employee benefits expense45,346 (2,531)1,202 (1,202)8,690 — 219 682 7,188 11 15,285 3,041 77,931 
Professional services expense3,941 — 165 — 678 — 2,482 — 684 — 7,863 — 15,813 
Other loan origination and maintenance expense20,385 (14,060)6,095 (4,044)38 — 16,069 (11,020)— — 402 (95)13,770 
Depreciation and amortization182 — — — 1,062 — 114 — 356 — 70 — 1,784 
Other general and administrative costs12,426 (2,548)172 — 3,794 (271)1,948 (11)2,757 (1,769)7,690 (2,916)21,272 
Income before taxes
67,305 (8,288)59,724 5,234 189 (6,560)(28,684)9,928 16,199 (1,335)8,040 (57,324)68,692 
Income tax expense (benefit)15,308 (15,308)— — 103 (103)— — — — 2,428 15,411 17,839 
Net income
$51,997 $7,020 $59,724 $5,234 $86 $(6,457)$(28,684)$9,928 $16,199 $(1,335)$5,612 $(72,735)$50,853 
Other Segment Disclosures:
Assets$1,238,899 $(29,932)$439,101 $(97,352)$23,317 $(1,393)$479,896 $(55,488)$60,347 $(36,707)$644,867 $(605,643)$2,059,912 
Goodwill & intangible assets
$938 $— $— $— $13,814 $— $14,752 
Amortization of intangible assets
$176 $— $350 $— $13 $— $539 
As of and for the year ended December 31, 2023
Banking
Alternative Lending
TechnologyNSBFPayments
Corporate & Other
Consolidated
SegmentElimSegmentElimSegmentElimSegmentElimSegmentElimSegmentElim
Interest income$34,349 $— $8,198 $(3)$— $— $50,823 $(75)$2,087 $(2,053)$3,427 $(2,380)$94,373 
Interest expense16,625 (99)4,035 — 246 (246)26,796 — 3,577 (132)20,971 (4,034)67,739 
Net interest income/(loss)
17,724 99 4,163 (3)(246)246 24,027 (75)(1,490)(1,921)(17,544)1,654 26,634 
Provision for loan credit losses11,704 — — — — — — — — — — — 11,704 
Net interest income after provision for loan credit losses6,020 99 4,163 (3)(246)246 24,027 (75)(1,490)(1,921)(17,544)1,654 14,930 
Noninterest income92,129 (26,091)12,278 — 31,692 (6,660)25,142 — 46,422 (2,893)79,781 (75,028)176,772 
Technology services expense — — — — 14,794 (522)— — — — — — 14,272 
Electronic payment processing expense— — — — — — — — 19,680 (1,353)— — 18,327 
Salaries and employee benefits expense35,385 — — — 8,989 — 973 — 7,152 — 13,209 — 65,708 
Professional services expense2,903 — 294 — 468 — 1,508 — 660 — 7,244 — 13,077 
Other loan origination and maintenance expense9,373 (7,133)2,222 (1,469)11 — 24,327 (18,100)— — 273 (71)9,433 
Loss on extinguishment of debt
— — — — — — 271 — — — — — 271 
Depreciation and amortization208 — — — 1,498 — 123 — 1,021 — 34 — 2,884 
Other general and administrative costs10,506 (2,266)117 — 4,090 (236)4,906 (24)3,087 (1,910)5,872 (1,785)22,357 
Income before taxes
39,774 (16,593)13,808 1,466 1,596 (5,656)17,061 18,049 13,332 (1,551)35,605 (71,518)45,373 
Income tax expense (benefit)11,647 — (150)— 229 — — — 1,178 — (14,860)— (1,956)
Net income
$28,127 $(16,593)$13,958 $1,466 $1,367 $(5,656)$17,061 $18,049 $12,154 $(1,551)$50,465 $(71,518)$47,329 
Other Segment Disclosures:
Assets$683,202 $(29,136)$196,062 $(51,820)$23,403 $(884)$633,206 $(97,683)$51,819 $(27,154)$529,941 $(481,443)$1,429,513 
Goodwill & intangible assets
$1,114 $— $15,179 $— $13,827 $— $30,120 
Amortization of intangible assets
$197 $— $466 $— $805 $— $1,468