Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| We're proud of all these numbers |
| And as we grow, I do think we have a good chance of these things expanding in the future |
| We've been able to demonstrate an ability to raise insured deposits quickly with a high growth rate through digital account opening |
| We're proud of the fact that we're able to hit a midpoint |
| We also believe that a return on average assets or return on tangible common equity and capital ratios when you compare them to the banking industry are well capitalized, very high, and also well reserved against |
| I'm proud of what we've been able to accomplish in all aspects this calendar year |
| It will, as we get through the presentation, explain why we're able to generate such high returns |
| So we believe we're well positioned |
| So we feel pretty good about it |
| So we feel pretty good about where we're currently priced |
| We might have a little bit of an uptick next year as some old, low interest bearing CDs roll off, but we feel pretty good about the future for that |
| So we believe that we can generate very good volumes and we believe that we are currently demonstrating that we have the ability to manage the risk |
| So we're very proud of this particular accomplishment with respect to margin |
| All the while, our capital ratios are strong, CET1 |
| Obviously, there's going to be a lot more detail in the K, but just as an overview, this is a very good quality portfolio |
| We've also maintained a very strong capital position and a prudent risk-based tolerance |
| We're excited about our business going forward |
| We had a really terrific year from my perspective |
| Now, important to note as we go forward, we'll explain why we feel that the risk reward on those loans is well calculated, it's well documented, and that we believe these types of returns we will be able to preserve them and also be able to withhold any increases in delinquencies or charge offs as time goes forward |
| We are excited about the opportunity |
| These are all very, very attractive numbers for a bank holding company |
| Slide number 27 and 28, look, we feel really good about where we are in the marketplace |
| Slide number 14, important from a lending activity perspective, and we have been reporting that our pipeline continues to grow based upon our unique business model of acquiring referrals from partners, as well as our efficiencies in making loans using technology, but not cutting corners on a fintech type basis but doing the underwriting |
| And we had a really good year and quarter-over-quarter comparison when you take a look at things like portfolio of loans growing, net interest margins expanding, and deposit growth |
| We're very proud of that fact |
| We're growing very well |
| You can see 11.5% floating rate quarterly adjust, no cap, real attractive, sell the government guaranteed piece at a 10 to 11 point gain gets a really nice return, even posting, you know, a high CECL reserve of 6.75% upfront, which obviously was far more |
| We also had a good year in 504 loans, $60.5 million of 504 loans for the three months, a big increase over the prior quarter, total loan closings of $142 million ending December 31, 2023 |
| Our margins and returns are much higher than that of a traditional bank because of the way we lend on a risk-adjusted basis with more than adequate reserves and floating rate assets that work really well a) for our customers and b) for our shareholders |
| We have a very good handle on what our losses, delinquencies should be, and we are very confident that our reserves are more than adequate |
| Statement |
|---|
| Obviously, 2023 was a challenging year, about midpoint through the year, based upon issues that were relating to the banking industry, Silicon Valley Bank, Signature Bank Issues, First Republic issues |
| So by being in a bank and reserving that loan loss reserve up front, it really knocks your earnings down precipitously early on, but then you pick it up out in the future, at least with respect to that aspect |
| So when rates are going higher, it actually hurts Newtek relative to the frequency of the adjustments versus when rates are falling |
| This is clearly a reoccurring event |
| We also saw a few loans that were from the acquired portfolio that we expect 100% recovery on that are showing some weakness, but no charge-offs at the bank |
| It made it for a more difficult year |
| And we think small business credit is going to get weaker |
| We did see a couple of loans in the bank, a few 7(a) that are microloans that are showing signs of weakness |
| So, yes, we have construction risks |
| So I think it's important when you look at year-over-year comparisons, the Q1 2024 comparison might be a little bit choppy versus the Q1 2023 |
| The alternative loan program has been growing through difficult times, that being a pandemic and a banking crisis since 2017 |
| By the way, the problem in itself is not an exaggeration, it really exists |
| We slowed down our alternative loan program |
| I will point out that the comparisons year-over-year are virtually difficult given the change in accounting model and the fact that we're consolidating our previously unconsolidated investments |
| I mean, if you look at the loan production volumes, Crispin, as we go through the year, the first quarter is just naturally a slower time for businesses |
| And therefore, when we also look at our 2023 performance, it's very difficult to do the comparisons test as a prior BDC |
| Going from a BDC with 1940s back to accounting into banking accounting caused a lot of issues for us to be able to track, follow, make those updates |
| I'd point out that there's a reason that that reserve is high |
| We're losing some amortization and depreciation |
| We were questioned whether we were able to raise deposits for $340 million last year up from I think $140 million when we took over the bank |
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