NewtekOne, Inc.NEWT

NewtekOne, Inc. Income Taxes Disclosure

10-KFiled Mar 10, 20263 min read
NOTE 21—INCOME TAXES:
The components of income tax expense for the years ended December 31, 2025, 2024 and 2023 were as follows:

Years ended December 31,
202520242023
Current income tax expense:
Federal$8,144 $4,637 $1,251 
State2,839 2,799 1,593 
Total current expense10,983 7,436 2,844 
Deferred income tax expense/(benefit):
Federal7,501 9,076 (4,318)
State981 1,327 (482)
Total deferred expense/(benefit)8,482 10,403 (4,800)
Total income tax expense/(benefit)$19,465 $17,839 $(1,956)
The components of income taxes paid for the years ended December 31, 2025, 2024 and 2023 were as follows:

Years ended December 31,
202520242023
Total Incomes Taxes Paid 12,502 7,429 6,884 
Federal8,471 3,904 4,650 
State:
Florida615 — — 
New York:
New York City— 314 — 
New York State1,544 1,704 1,128 
Other1,872 1,507 1,106 
For the years ended December 31, 2025, 2024 and 2023, income taxes for financial reporting purposes differ from the amount computed by applying the statutory federal income tax rate of 21% as shown in the following table:

Years ended December 31,
202520242023
US federal statutory income tax rate $16,795 21.00 %14,425 21.00 %9,528 21.00 %
State and local income taxes, net of federal effect3,125 3.91 %3,538 5.15 %911 2.01 %
Domestic federal reconciling items
Nontaxable and nondeductible items, net531 0.66 %(148)(0.22)%788 1.74 %
Other(986)(1.23)%24 0.04 %(203)(0.45)%
Realization of net operating loss carryforwards— — %— — %(7,430)(16.38)%
DTA realization due to change in taxpayer status— — %— — %(5,550)(12.23)%
Income tax expense/(benefit)$19,465 24.34 %17,839 25.97 %(1,956)(4.31)%

For the years ended December 31, 2025, state income taxes in Florida and New York comprise the majority of the state income tax expense, net of federal effect category. For the years ended December 31, 2024 and 2023, state income taxes in New York comprise the majority of the state income tax expense, net of federal effect category.
Significant components of the Company’s net deferred tax asset at December 31, 2025 and 2024 are listed below:

December 31, 2025December 31, 2024
Deferred tax assets:
Allowance for credit losses$11,599 $7,914 
Lease liabilities747 1,737 
Other1,865 2,757 
Purchase accounting, net9 183 
Stock compensation21 1,134 
Goodwill and intangible assets— 217 
Federal and state net operating losses, net of federal tax effect832 201 
Total deferred tax assets15,073 14,143 
Deferred tax liabilities:
Investments1,076 2,481 
Servicing rights7,484 6,234 
Right of use assets725 1,488 
Goodwill and intangible assets1,128 — 
Loans15,381 6,069 
Other7 115 
Total deferred tax liabilities25,801 16,387 
Net deferred tax liability$(10,728)$(2,244)
At December 31, 2025 and December 31, 2024, the Company has $19.1 million and $4.1 million of state net operating loss carryforwards, respectively.

The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The Company files tax returns in federal and certain state and local jurisdictions. The periods subject to examination are generally for tax years ended in 2022 and beyond, including the following major jurisdictions: U.S. Federal, New York, and Florida. However, the Company’s net operating losses continue to be subject to review by tax authorities in the period utilized notwithstanding origination in closed periods.

The following table provides details of the expiration dates for Company’s net operating loss carryforwards at December 31, 2025 and 2024:

Expiring:December 31, 2025December 31, 2024
Years ended 2029 - 2035$38 $154 
Years ended 2036 - 204318,944 3,872 
Never86 86 
Total
$19,068 $4,112 

As of December 31, 2025, the Company had no uncertain tax positions. The Company has elected to recognize interest and penalties related to income tax matters as a component of income tax expense, of which no interest or penalties were recorded for the years ended December 31, 2025, 2024 and 2023.

Historical Timeline

Fiscal YearFiled
2025Mar 10, 2026Showing above
2024Mar 17, 2025
2023Apr 1, 2024

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

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