Today, NewtekOne, Inc., a national commercial bank headquartered in Boca Raton, Florida, announced the completion of a registered offering of $75 million in aggregate principal amount of its 8.6% Fixed Rate Senior Notes due 2029.
The offering, finalized today, was led by a group of underwriters including Morgan Stanley (NYSE:MS) & Co. LLC, Keefe, Bruyette & Woods, Inc., Raymond James & Associates, Inc., and UBS Securities LLC.
The company, which trades on the Nasdaq Global Market under the ticker NASDAQ:NEWT, also provided the underwriters an option to purchase up to an additional $11.25 million aggregate principal amount of the notes. NewtekOne disclosed that the proceeds from the sale, amounting to $72.75 million before expenses, are earmarked for the funding of investments, repayment of existing debt, and for general corporate purposes.
The notes were sold pursuant to NewtekOne's registration statement on Form S-3, which became effective as of July 27, 2023, and a prospectus supplement dated September 9, 2024. The notes are governed by an indenture agreement with U.S. Bank Trust Company, National Association, serving as trustee.
In other recent news, NewtekOne appointed Andrew Kaplan as its Chief Strategy Officer, leveraging his extensive experience in banking and financial services. The company also announced the divestiture of its subsidiary, Newtek Technology Solutions, Inc., to Paltalk, Inc., a transaction involving a $4 million cash payment and 4 million shares of Paltalk's newly created preferred stock.
On the financial front, NewtekOne surpassed analysts' expectations in its Q2 2024 earnings, reporting an earnings per share (EPS) of $0.43. The company reaffirmed its full-year EPS guidance, projecting a range between $1.85 and $2.05.
InvestingPro Insights
In light of NewtekOne's recent completion of a registered offering of senior notes, InvestingPro data provides a deeper financial context for investors considering the company's stock. With a market capitalization of approximately $289 million, NewtekOne is trading at a low P/E ratio of 6.64, suggesting that the stock may be undervalued relative to its near-term earnings growth. This is further supported by a PEG ratio of just 0.39, indicating potential for growth at a reasonable price.
From an income perspective, NewtekOne's dividend yield stands at an attractive 6.76%, backed by a history of maintaining dividend payments for 10 consecutive years. This demonstrates the company's commitment to returning value to shareholders. Additionally, the company's gross profit margin over the last twelve months is notably high at 83.07%, reflecting efficient operations and a strong market position.
An InvestingPro Tip highlights that while three analysts have revised their earnings estimates downwards for the upcoming period, the company still pays a significant dividend and is predicted to be profitable this year. For investors seeking further insights, InvestingPro offers additional tips on NewtekOne, which can be found at https://www.investing.com/pro/NEWT.
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