NewtekOne, Inc.NEWT
NewtekOne, Inc. Fair Value Disclosure
NOTE 10—FAIR VALUE MEASUREMENTS:
The following tables present fair value measurements of certain of the Company’s assets and liabilities measured at fair value and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values as of December 31, 2025 and December 31, 2024:
| Fair Value Measurements at December 31, 2025 | |||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
Debt securities available-for-sale, at fair value | |||||||||||||||||||||||
| U.S. Treasury notes | $ | 16,829 | $ | 16,829 | $ | — | $ | — | |||||||||||||||
| Loans held for sale, at fair value | 971,837 | — | 324,467 | 647,370 | |||||||||||||||||||
| Loans held for investment, at fair value | 281,198 | — | — | 281,198 | |||||||||||||||||||
Individually evaluated loans1 | 94,322 | — | — | 94,322 | |||||||||||||||||||
Other real estate owned, at fair value2 | 7,570 | — | — | 7,570 | |||||||||||||||||||
Other real estate owned, at LCM1,2 | 1,286 | — | — | 1,286 | |||||||||||||||||||
Residuals in securitizations, at fair value3 | 76,701 | — | — | 76,701 | |||||||||||||||||||
Servicing assets, at fair value | 15,358 | — | — | 15,358 | |||||||||||||||||||
Servicing assets, at LCM1 | 29,564 | — | — | 29,564 | |||||||||||||||||||
| Joint ventures and other investments, at fair value | 47,719 | 6,880 | 5 | 1,983 | 6 | 38,856 | |||||||||||||||||
| 737 | — | 737 | — | ||||||||||||||||||||
Total assets measured at fair value | $ | 1,543,121 | $ | 23,709 | $ | 327,187 | $ | 1,192,225 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Equity warrants3,4 | $ | 81 | $ | — | $ | — | $ | 81 | |||||||||||||||
Total liabilities measured at fair value | $ | 81 | $ | — | $ | — | $ | 81 | |||||||||||||||
1 Non-recurring.
2 Included in Other assets on the Consolidated Statements of Financial Condition.
3 Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.
4 Included in Accounts payable, accrued expenses, and other liabilities on the Consolidated Statements of Financial Condition.
5 Includes four million shares of IPM Preferred Stock valued at the closing price per share of IPM common stock of $1.72 on December 31, 2025
6 Includes the Biller Genie investment valued at the price that settled in January 2026.
| Fair Value Measurements at December 31, 2024 | |||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Debt securities available-for-sale | |||||||||||||||||||||||
| U.S. Treasury notes | $ | 23,916 | $ | 23,916 | $ | — | $ | — | |||||||||||||||
| Loans held for sale, at fair value | 372,286 | — | — | 372,286 | |||||||||||||||||||
| Loans held for investment, at fair value | 369,746 | — | — | 369,746 | |||||||||||||||||||
Individually evaluated loans2 | 24,341 | — | — | 24,341 | |||||||||||||||||||
Other real estate owned, at fair value1 | 3,764 | — | — | 3,764 | |||||||||||||||||||
Servicing assets, at fair value | 22,062 | — | — | 22,062 | |||||||||||||||||||
Servicing assets, at LCM1 | 24,195 | — | — | 24,195 | |||||||||||||||||||
| Joint ventures and other investments | 57,678 | — | — | 57,678 | |||||||||||||||||||
| 715 | — | 715 | — | ||||||||||||||||||||
| Total assets measured at fair value | $ | 898,703 | $ | 23,916 | $ | 715 | $ | 874,072 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Equity warrants3,4 | $ | 133 | $ | — | $ | — | $ | 133 | |||||||||||||||
Total liabilities measured at fair value | $ | 133 | $ | — | $ | — | $ | 133 | |||||||||||||||
1 Included in Other assets on the Consolidated Statements of Financial Condition.
2 Non-recurring.
3 Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.
4 Included in Accounts payable, accrued expenses, and other liabilities on the Consolidated Statements of Financial Condition.
The following tables represents the changes in the investments, servicing assets and liabilities measured at fair value using Level 3 inputs for the years ended December 31, 2025 and 2024:
| Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Loans HFI, at FV | Loans HFS, at FV | Joint Ventures and Other Investments | Residuals in Securitizations, at FV | Servicing Assets, at FV | Equity Warrants1 | Other Real Estate Owned2 | |||||||||||||||||||||||||||||||||||
| Fair value, December 31, 2024 | $ | 369,746 | $ | 372,286 | $ | 57,678 | $ | — | $ | 22,062 | $ | 133 | $ | 3,764 | |||||||||||||||||||||||||||
| Reclasses between loans at FV and LCM | — | 7,133 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Sales | 483 | (270,910) | — | — | — | — | (2,371) | ||||||||||||||||||||||||||||||||||
| Principal payments received | (71,830) | (12,293) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Foreclosed real estate acquired | (5,781) | — | — | — | — | — | 7,778 | ||||||||||||||||||||||||||||||||||
| SBA loans, funded | — | 125,262 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
ALP loans, funded | — | 363,410 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Purchases and repurchases of loans | 4,669 | 25,094 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Residuals in securitizations, notional | — | — | — | 32,481 | — | — | — | ||||||||||||||||||||||||||||||||||
Additions3 | — | — | 2,268 | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Asset purchase of controlling interest, net of cash acquired | 10,120 | ||||||||||||||||||||||||||||||||||||||||
| Capital contributions | — | — | 85 | — | — | — | — | ||||||||||||||||||||||||||||||||||
Returns of capital4 | — | — | (26,227) | — | — | — | — | ||||||||||||||||||||||||||||||||||
Change in valuation due to: | |||||||||||||||||||||||||||||||||||||||||
Changes in valuation inputs or assumptions | (1,468) | 42,244 | (3,568) | 44,220 | (19) | (52) | (1,601) | ||||||||||||||||||||||||||||||||||
Other factors | (14,621) | — | — | — | (6,685) | — | — | ||||||||||||||||||||||||||||||||||
| Transfers out of Level 3 | — | (4,856) | 5 | (1,500) | 6 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Fair value, December 31, 2025 | $ | 281,198 | $ | 647,370 | $ | 38,856 | $ | 76,701 | $ | 15,358 | $ | 81 | $ | 7,570 | |||||||||||||||||||||||||||
1 Included in Accounts payable, accrued expenses, and other liabilities on the Consolidated Statements of Financial Condition.
2 Included in Other assets on the Consolidated Statements of Financial Condition.
3 Investment in IPM.
4 Includes $26.2 million of loans and accrued interest returned as part of the asset purchase of controlling interest in NCL JV.
5 As of April 1, 2025, the Company is using broker quotes to calculate the fair value of its unguaranteed portions of its SBA 7(a) loans moving them from Level 3 to Level 2.
6 As of October 1, 2025, the Company is using the sales offering agreement to calculate the fair value of its investment in Biller Genie, moving it from Level 3 to Level 2. The sale of Biller Genie was completed in January 2026 at the anticipated pricing that was used in the December 31, 2025 valuation model.
| Year Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Loans HFI, at FV | Loans HFS, at FV | Joint Ventures and Other Investments | Servicing Assets, at FV | Assets HFS | Equity Warrants1 | Other Real Estate Owned2 | |||||||||||||||||||||||||||||||||||
| Fair value, December 31, 2023 | $ | 469,801 | $ | 118,867 | $ | 41,587 | $ | 29,336 | — | $ | 141 | $ | 1,110 | ||||||||||||||||||||||||||||
| Reclasses between loans HFS and HFI | — | (599) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Reclasses between loans at FV and LCM | 263 | 4,077 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Sales | (2,586) | (179,949) | — | — | — | — | (1,446) | ||||||||||||||||||||||||||||||||||
| Principal payments received | (71,791) | (16,178) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Foreclosed real estate acquired | (4,569) | — | — | — | — | — | 4,569 | ||||||||||||||||||||||||||||||||||
| SBA loans, funded | 122 | 26,863 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| ALP loans, funded | — | 283,822 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Mortgage loans, funded | — | 103,838 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Additions | — | — | — | 14 | 21,924 | — | — | ||||||||||||||||||||||||||||||||||
| Purchases and repurchases of loans | 4,851 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Capital contributions/(distributions) | — | — | 5,379 | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Change in valuation due to: | |||||||||||||||||||||||||||||||||||||||||
| Changes in valuation inputs or assumptions | 597 | 31,569 | 10,712 | 924 | (616) | (8) | (469) | ||||||||||||||||||||||||||||||||||
| Other factors | (26,942) | (24) | — | (8,212) | — | — | — | ||||||||||||||||||||||||||||||||||
| Fair Value, December 31, 2024 | $ | 369,746 | $ | 372,286 | $ | 57,678 | $ | 22,062 | $ | 21,308 | $ | 133 | $ | 3,764 | |||||||||||||||||||||||||||
1 Included in Accounts payable, accrued expenses, and other liabilities on the Consolidated Statements of Financial Condition.
2 Included in Other assets on the Consolidated Statements of Financial Condition.
The following tables provide a summary of quantitative information about the Company’s Level 3 fair value measurements as of December 31, 2025 and December 31, 2024. In addition to the inputs noted in the table below, according to our valuation policy we may also use other valuation techniques and methodologies when determining our fair value measurements. The tables below are not intended to be all-inclusive but rather provide information on the significant Level 3 inputs as they relate to the Company’s fair value measurements at December 31, 2025 and December 31, 2024.
| Fair Value as of | Weighted | Range | ||||||||||||||||||||||||||||||
| December 31, 2025 | Unobservable Input | Average | Minimum | Maximum | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
Loans HFI, at FV - accrual | $ | 208,655 | Market yields | 6.55 | % | 6.55 | % | 6.55 | % | |||||||||||||||||||||||
| Cumulative prepayment rate | 22.50 | % | 22.50 | % | 22.50 | % | ||||||||||||||||||||||||||
| Average cumulative default rate | 21.00 | % | 21.00 | % | 21.00 | % | ||||||||||||||||||||||||||
Loans HFI, at FV - non-accrual | $ | 72,543 | Market yields | 7.00 | % | 7.00 | % | 7.00 | % | |||||||||||||||||||||||
| Average cumulative default rate | 30.00 | % | 30.00 | % | 30.00 | % | ||||||||||||||||||||||||||
Loans HFS, at FV | $ | 647,370 | Market yields | 7.19 | % | 6.43 | % | 8.13 | % | |||||||||||||||||||||||
| Cumulative prepayment rate | 56.17 | % | 50.00 | % | 60.00 | % | ||||||||||||||||||||||||||
| Average cumulative default rate | 11.17 | % | 5.00 | % | 15.00 | % | ||||||||||||||||||||||||||
| Joint ventures and other investments | $ | 38,856 | Market yields | 7.40 | % | 6.71 | % | 12.49 | % | |||||||||||||||||||||||
| Cost of equity | 14.00 | % | 12.00 | % | 16.00 | % | ||||||||||||||||||||||||||
| Weighted average cost of capital | 9.00 | % | 7.00 | % | 11.00 | % | ||||||||||||||||||||||||||
| Residuals in securitizations, at FV | $ | 76,701 | Market yields | 7.58 | % | 7.58 | % | 7.58 | % | |||||||||||||||||||||||
| Cost of equity | 14.00 | % | 12.00 | % | 16.00 | % | ||||||||||||||||||||||||||
| Weighted average cost of capital | 9.00 | % | 7.00 | % | 11.00 | % | ||||||||||||||||||||||||||
Servicing assets, at FV1 | $ | 15,358 | Market yields | 11.25 | % | 11.25 | % | 11.25 | % | |||||||||||||||||||||||
| Cumulative prepayment rate | 22.50 | % | 22.50 | % | 22.50 | % | ||||||||||||||||||||||||||
| Average cumulative default rate | 21.00 | % | 21.00 | % | 21.00 | % | ||||||||||||||||||||||||||
Other real estate owned, at FV | $ | 7,570 | Appraised value | N/A | N/A | N/A | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Equity warrants | $ | 81 | Expected volatility | 45.00 | % | 45.00 | % | 45.00 | % | |||||||||||||||||||||||
Dividend yield | 6.70 | % | 6.70 | % | 6.70 | % | ||||||||||||||||||||||||||
Risk free rate | 3.95 | % | 3.95 | % | 3.95 | % | ||||||||||||||||||||||||||
1 $15.4 million of servicing assets held at FV and $29.6 million of servicing assets held at LCM. Refer to NOTE 7—SERVICING ASSETS.
| Fair Value as of | Weighted | Range | ||||||||||||||||||||||||||||||
| December 31, 2024 | Unobservable Input | Average | Minimum | Maximum | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
Loans HFI, at FV - accrual | $ | 302,442 | Market yields | 6.55 | % | 6.55 | % | 6.55 | % | |||||||||||||||||||||||
| Cumulative prepayment rate | 22.50 | % | 22.50 | % | 22.50 | % | ||||||||||||||||||||||||||
| Average cumulative default rate | 21.00 | % | 21.00 | % | 21.00 | % | ||||||||||||||||||||||||||
Loans HFI, at FV - non-accrual | $ | 67,304 | Market yields | 7.30 | % | 7.30 | % | 7.30 | % | |||||||||||||||||||||||
| Average cumulative default rate | 30.00 | % | 30.00 | % | 30.00 | % | ||||||||||||||||||||||||||
Loans HFS, at FV | $ | 372,286 | Market yields | 7.62 | % | 7.08 | % | 8.18 | % | |||||||||||||||||||||||
| Cumulative prepayment rate | 59.78 | % | 50.00 | % | 70.00 | % | ||||||||||||||||||||||||||
| Average cumulative default rate | 9.89 | % | 5.00 | % | 15.00 | % | ||||||||||||||||||||||||||
| Joint ventures and other investments | $ | 57,678 | Market yields | 8.40 | % | 8.00 | % | 12.00 | % | |||||||||||||||||||||||
| Cost of equity | 11.00 | % | 8.00 | % | 14.00 | % | ||||||||||||||||||||||||||
| Weighted average cost of capital | 7.72 | % | 6.00 | % | 23.98 | % | ||||||||||||||||||||||||||
Servicing assets, at FV1 | $ | 22,062 | Market yields | 12.00 | % | 12.00 | % | 12.00 | % | |||||||||||||||||||||||
| Cumulative prepayment rate | 22.50 | % | 22.50 | % | 22.50 | % | ||||||||||||||||||||||||||
| Average cumulative default rate | 21.00 | % | 21.00 | % | 21.00 | % | ||||||||||||||||||||||||||
| Assets held for sale | $ | 21,308 | Present value factor | 90.70 | % | 89.50 | % | 93.20 | % | |||||||||||||||||||||||
| Discount rate | 10.23 | % | 7.27 | % | 11.71 | % | ||||||||||||||||||||||||||
| Other real estate owned, at FV | $ | 3,764 | Appraised value | N/A | N/A | N/A | ||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Equity warrants | $ | 133 | Expected volatility | 48.00 | % | 48.00 | % | 48.00 | % | |||||||||||||||||||||||
| Dividend yield | 6.00 | % | 6.00 | % | 6.00 | % | ||||||||||||||||||||||||||
| Risk free rate | 4.52 | % | 4.52 | % | 4.52 | % | ||||||||||||||||||||||||||
1 $22.1 million of servicing assets held at FV and $24.2 million of servicing assets held at LCM. Refer to NOTE 7—SERVICING ASSETS.
Estimated Fair Value of Other Financial Instruments
GAAP also requires disclosure of the fair value of financial instruments carried at book value on the Consolidated Statements of Financial Condition. The carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value on a recurring or non-recurring basis are as follows:
| December 31, 2025 | |||||||||||||||||||||||||||||
| Carrying Amount | Fair Value Amount by Level: | Total Fair Value | |||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||||||||
| Cash and due from banks | $ | 4,196 | $ | 4,196 | $ | — | $ | — | $ | 4,196 | |||||||||||||||||||
| Restricted cash | 26,477 | 26,477 | — | — | 26,477 | ||||||||||||||||||||||||
| Interest bearing deposits in banks | 279,618 | 279,618 | — | — | 279,618 | ||||||||||||||||||||||||
| Loans HFS, at LCM | 26,532 | — | — | 26,532 | 26,532 | ||||||||||||||||||||||||
| Loans HFI, at amortized cost, net of deferred fees and costs | 896,689 | — | — | 1,012,200 | 1,012,200 | ||||||||||||||||||||||||
| Federal Home Loan Bank and Federal Reserve Bank stock | 4,234 | — | 4,234 | — | 4,234 | ||||||||||||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||||||||
| Time deposits | 439,805 | — | 440,688 | — | 440,688 | ||||||||||||||||||||||||
| Borrowings | 819,888 | — | 283,999 | 543,999 | 827,998 | ||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
| Carrying Amount | Fair Value Amount by Level: | Total Fair Value | |||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||||||||
| Cash and due from banks | $ | 6,941 | $ | 6,941 | $ | — | $ | — | $ | 6,941 | |||||||||||||||||||
| Restricted cash | 28,226 | 28,226 | — | — | 28,226 | ||||||||||||||||||||||||
| Interest bearing deposits in banks | 346,207 | 346,207 | — | — | 346,207 | ||||||||||||||||||||||||
| Loans HFS, at LCM | 58,803 | — | — | 58,856 | 58,856 | ||||||||||||||||||||||||
| Loans HFI, at amortized cost, net of deferred fees and costs | 621,651 | — | — | 668,687 | 668,687 | ||||||||||||||||||||||||
| Federal Home Loan Bank and Federal Reserve Bank stock | 3,585 | — | 3,585 | — | 3,585 | ||||||||||||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||||||||
| Time deposits | 409,251 | — | 410,442 | — | 410,442 | ||||||||||||||||||||||||
| Borrowings | 708,041 | — | 306,549 | 413,818 | 720,367 | ||||||||||||||||||||||||
The fair values of the components of Borrowings are included in the chart below:
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
Closing Price | Fair Value | Closing Price | Fair Value | |||||||||||||||||||||||
Public Parent Company Notes1: | ||||||||||||||||||||||||||
2026 Notes (5.50%)2 | $ | 25.19 | $ | 95,722 | $ | 25.21 | $ | 115,966 | ||||||||||||||||||
2028 Notes (8.00%) | 25.20 | 40,320 | 25.28 | 40,448 | ||||||||||||||||||||||
2029 Notes (8.50%) | 25.16 | 72,267 | 25.32 | 72,795 | ||||||||||||||||||||||
2029 Notes (8.625%) | 25.23 | 75,690 | 25.78 | 77,340 | ||||||||||||||||||||||
Subtotal (Level 2) | $ | 283,999 | $ | 306,549 | ||||||||||||||||||||||
Private Parent Company Notes3 | $ | 102,758 | $ | 80,926 | ||||||||||||||||||||||
Securitizations4 | 127,050 | 186,635 | ||||||||||||||||||||||||
FHLB Borrowings4 | 7,349 | 15,330 | ||||||||||||||||||||||||
Bank Borrowings4 | 306,842 | 130,927 | ||||||||||||||||||||||||
Subtotal (Level 3) | $ | 543,999 | $ | 413,818 | ||||||||||||||||||||||
Total Borrowings | $ | 827,998 | $ | 720,367 | ||||||||||||||||||||||
1 Fair values are based on the closing public share price on the date of measurement.
2 On February 1, 2026, the 2026 Notes matured. See “NOTE 24—SUBSEQUENT EVENTS - Exchange of 2026 Notes for 2031 Notes and Repayment of 2026 Notes” for additional information.
3 Not recorded at fair value on a recurring basis. The fixed rate private Notes are held at par as of December 31, 2025 and December 31, 2024. Fair value calculations are performed based on implied treasury rates as of year end.
4 Fair value is calculated as the Borrowings Outstanding. Refer to NOTE 13—BORROWINGS.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 10, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
| 2023 | Apr 1, 2024 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.