8-K: Newtek Bank Achieves 11.7% Deposit Growth in Q3 2024, Business Core Deposits Surge 45%

Newtek Bank, N.A. reports a significant 11.7% increase in total deposits and a 45% jump in business core deposits for the third quarter of 2024.

Summary

• Newtek Bank, N.A. experienced substantial deposit growth in the third quarter of 2024.
• Total deposits are expected to reach $742 million as of September 30, 2024, a sequential increase of 11.7% from $664 million at June 30, 2024.
• This also represents a 43% increase compared to $519 million at December 31, 2023.
• Insured deposits are estimated to be approximately 75% of total deposits.
• Business core deposits are projected to reach $119 million, a 45% increase or $37 million from the previous quarter.
• Deposits from lending clients are expected to be $78 million, a $30 million increase from the prior quarter.
• The bank is launching a new marketing initiative called Newtek Zero-Fee BankingTM.

Sentiment

Score: 8

Explanation: The document conveys a very positive sentiment due to the strong deposit growth figures and the launch of a new product. The management's comments are also optimistic, indicating confidence in the bank's future performance.

Positives

• The bank has shown strong sequential deposit growth from Q2 to Q3 2024.
• Business core deposits have increased significantly by 45%, indicating strong business customer engagement.
• The increase in deposits from lending clients suggests a positive synergy between lending and deposit activities.
• The launch of Newtek Zero-Fee BankingTM is expected to attract new customers.
• The bank has scaled its staff from 21 to 358 employees, demonstrating significant growth and operational capacity.

Risks

• The forward-looking statements are subject to risks and uncertainties, and actual results may differ.
• The preliminary estimates for assets under supervision, capital ratios, and other financial data are subject to change.
• The company's success depends on the continued implementation of its deposit-gathering strategy.

Future Outlook

The company expects to continue its deposit growth strategy, focusing on business checking and money market accounts, and is launching Newtek Zero-Fee BankingTM. They will report Q3 2024 earnings on November 6, 2024.

Management Comments

• Barry Sloane, President, Chairman and CEO, stated that they are pleased with the sequential deposit growth from Q2 to Q3 2024.
• Barry Sloane highlighted the importance of Jennifer Merritt's role in implementing strategies to capitalize on existing business customers.
• Management emphasized the significant effort in scaling the bank's staff and integrating new business processes.

Industry Context

This announcement reflects a positive trend in deposit growth for Newtek Bank, which is competing in the financial services sector. The focus on business core deposits and digital banking initiatives aligns with current industry trends towards digital transformation and customer-centric banking solutions.

Comparison to Industry Standards

• While specific competitor data is not provided, an 11.7% sequential deposit growth is a strong result compared to the average growth rates of many traditional banks.
• The 45% increase in business core deposits is particularly notable, suggesting a successful strategy in attracting and retaining business clients.
• The focus on digital banking and zero-fee products is in line with the strategies of other fintech-focused banks like Ally Bank and Discover Bank, which have seen success in attracting deposits through online platforms.

Stakeholder Impact

• Shareholders are likely to view the deposit growth positively, potentially leading to increased stock value.
• Employees may benefit from the company's growth and expansion.
• Customers will have access to new banking products and services, including the Newtek Zero-Fee BankingTM.
• Suppliers and creditors may see increased business opportunities with the growing bank.

Next Steps

• The company will launch and announce its Newtek Zero-Fee BankingTM initiative.
• The company will report its third quarter 2024 earnings results on November 6, 2024.

Key Dates

Keywords

Newtek Bank, deposit growth, business core deposits, Newtek Zero-Fee Banking, financial services, banking, digital banking