Forward-Looking Statements
The matters discussed in this report, as well as in future oral and written statements by management ofNewtek Business Services Corp. , that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. Important assumptions include our ability to originate new investments, achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, including the impact of the COVID-19 pandemic, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans or objectives will be achieved. The forward-looking statements contained in this report include statements as to: •our future operating results; •our business prospects and the prospects of our prospective portfolio companies, including our and their ability to achieve our respective objectives as a result of the ongoing COVID-19 pandemic, changes in base interest rates, rising inflation, significant market volatility, and supply chain disruptions; •the impact of investments that we expect to make; •our informal relationships with third parties; •the dependence of our future success on the general economy and its impact on the industries in which we invest; •our ability to access debt markets and equity markets; •our ability to consummate the transactions contemplated by the Stock Purchase Agreement; •our receipt of certain Regulatory Approvals to operate as a bank holding company and acquire NBNYC; •our management's ability to operate as a bank holding company; •our intended operations and structure as a bank holding company; •our tax and accounting treatment as aC Corporation if we convert to a bank holding company; •the decrease in our dividend payout due to no longer operating as a BDC and RIC if we discontinue our election as a BDC and the transaction with NBNYC is consummated; •our expected financings and investments; •our regulatory structure and tax status; •our ability to operate as a BDC and a RIC; •the timing of the discontinuance of our election to be a BDC and our status as a RIC; •NSBF's ability to maintain its license and PLP status under the SBA 7(a) program; •NSBF's ability to sell the guaranteed portions of SBA 7(a) loans at premiums; •the adequacy of our cash resources and working capital; •the timing of cash flows, if any, from the operations of our portfolio companies; •the impact of inflation on our business prospects and the prospects of our portfolio companies; •the timing, form and amount of any dividend distributions; •the impact of fluctuations in interest rates on our business including as a result of the decommissioning of LIBOR and implementation of alternatives to LIBOR; •the impact of inflation, rising interest rates and the risk of recession on our business prospects and the prospects of our portfolio companies; •the impact of the ongoing war betweenRussia andUkraine and general uncertainty surrounding the political stability ofthe United States , theUnited Kingdom , theEuropean Union andChina ; •the valuation of any investments in portfolio companies, particularly those having no liquid trading market; and •our ability to recover unrealized losses; •NSBF's ability to issue SBA 7(a) guaranteed loans; •the effect of legal, tax and regulatory changes, including the recently announced Inflation Reduction Act of 2022; •the ability of our SBA 7(a) borrowers to pay principal and interest, including after any deferment period granted by NSBF; and •the ability to enter into and/or maintain joint ventures or other financing arrangements. 367 -------------------------------------------------------------------------------- Table of Contents The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes and other financial information appearing elsewhere in this report. In addition to historical information, the following discussion and other parts of this report contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by such forward-looking information due to the factors discussed under Item 1A-"Risk Factors" of Part II of this quarterly report on Form 10-Q and the Company's Quarterly Reports on Form 10-Q for the quarters endedMarch 31, 2022 andJune 30, 2022 , filed with theSEC onMay 9, 2022 , andAugust 8, 2022 , respectively, Item 1A-"Risk Factors" of our Annual Report on Form 10-K for the year endedDecember 31, 2021 , filed with theSEC onMarch 1, 2022 , and under "Forward-Looking Statements" of this Item 2. Executive Overview We are a leading national non-bank lender and own and control certain portfolio companies under the Newtek® brand (our "controlled portfolio companies," as defined below) that provide a wide range of business and financial solutions to SMBs. Newtek's and its portfolio companies' business and financial solutions include: Business Lending, including origination of SBA 7(a), SBA 504, and non-conforming (non SBA) conventional loans, as well as PPP loans in the second and third quarters of 2020, as well as the first quarter of 2021, Electronic Payment Processing, Managed Technology Solutions (Cloud Computing),Technology Consulting , eCommerce, Accounts Receivable and Inventory Financing, personal and commercial Insurance Services, Web Services, Data Backup, Storage and Retrieval, and Payroll and Benefits Solutions to SMB accounts nationwide across all industries. We believe that we have an established and reliable platform that is not limited by client size, industry type, or location. As a result, we believe we have a strong and diversified client base across every state inthe United States and across a variety of different industries. In addition, we have developed a financial and technology enabled business model that allows us and our controlled portfolio companies to acquire and process our SMB clients in a very cost effective manner. This capability is supported in large part by NewTracker®, our patented prospect management technology software, which is similar to, but we believe better suited for our needs than, the system popularized by Salesforce.com. We believe that this technology and business model distinguishes us from our competitors. OnAugust 2, 2021 , the Company entered into the Stock Purchase Agreement to acquire all of the issued and outstanding stock of NBNYC (the Acquisition). This Acquisition is part of a plan to reposition the Company as a bank holding company that intends to elect financial holding company status, and is subject to Regulatory Approvals. In connection with this plan, onJune 1, 2022 , the Company held a special meeting of shareholders, at which the Company's shareholders approved a proposal to authorize the Company's Board of Directors to discontinue the Company's election to be regulated under the Investment Company Act of 1940, subject to Regulatory Approvals and other conditions described in the proxy statement filed with theSEC onMay 2, 2022 . Subsequent to the approval of this proposal, which was required under the 1940 Act, the Company may choose to discontinue its election as a BDC; however, the Company's Board of Directors will not seek to discontinue the Company's election as a BDC until after the Company receives the required Regulatory Approvals and after certain of the Acquisition closing conditions are met. The final decision on the timing of the Company's discontinuance from regulation as a BDC will be made by the Board of Directors based on such factors deemed appropriate by the Board of Directors, including the then current status of the Acquisition and discussions with applicable regulatory authorities; the Company currently intends to maintain its status as a BDC and RIC in the near term. The consideration payable by the Company at closing of the Acquisition will be$20.0 million in cash, subject to certain adjustments. In addition, the Stock Purchase Agreement contemplates that, as of the closing and subject to Regulatory Approvals, NBNYC will dividend to the NBNYC selling shareholders ("Sellers") both NBNYC's owned property inFlushing, New York and cash in the amount equal to the excess, if any, of NBNYC's tangible common equity as of the closing date over$20.0 million . The Stock Purchase Agreement contains certain customary representations and warranties made by each party. The Company and the Sellers have the right to terminate the Stock Purchase Agreement under certain circumstances, including if the purchase has not occurred on or prior toJanuary 3, 2023 or if the requisite applications and Regulatory Approvals have been denied. We anticipate receiving the required Regulatory Approvals during the fourth quarter of 2022. If the Stock Purchase Agreement is terminated in certain circumstances specified therein, the Company may be required to pay NBNYC a fee of$0.2 million . Following the closing of the Acquisition, the Company intends to operate as a bank holding company, subject to certain Regulatory Approvals. Specifically, the Company intends to contribute certain of its wholly-owned lending portfolio companies to NBNYC, and to provide centralized lending operations through NBNYC.The Company intends to further develop the Company's current patented technology, which the Company anticipates will complement its proposed banking offerings, subject to Regulatory Approvals. The Company also intends to retain its current board of directors and management, as supplemental by additional personnel with banking experience. However, there can be no assurances that the Company will close the Acquisition, receive the required Regulatory Approvals, or that the Company will be able to successfully operate as a bank holding company. If the Company obtains the required Regulatory Approvals and subsequently discontinues its election to be treated as a BDC and converts to a bank holding company, the Company will no longer be subject to the 1940 Act, and the Company would lose its ability to be taxed on a pass-through basis as a RIC. Additionally, as a bank holding company, the Company would be 368 -------------------------------------------------------------------------------- Table of Contents subject to regulation and supervision that may be different from its current regulation and supervision, and would be required to comply with accounting and financial reporting requirements that may be different from its current reporting requirements. Moreover, converting to a bank holding company may make it more difficult for the Company to be acquired. For information on the risks of converting to a bank holding company, see "Item 1A. Risk Factors - Risk Related to Converting to aFinancial Holding Company " in the Company's Annual Report on Form 10-K for the year endedDecember 31, 2021 , filed with theSEC onMarch 1, 2022 .
We consolidate the following wholly-owned subsidiaries:
Newtek Small Business Finance, LLC Newtek Asset Backed Securities, LLC CCC Real Estate Holdings, LLC The Whitestone Group, LLC Wilshire DC Partners, LLC Wilshire Holdings I, Inc.1Wilshire Louisiana BIDCO, LLC Wilshire Louisiana Partners II, LLC Wilshire Louisiana Partners III, LLC Wilshire Louisiana Partners IV, LLC Wilshire New York Advisers II, LLC Wilshire New York Partners III, LLC Wilshire Partners, LLC Exponential Business Development Co., Inc.1 Newtek Commercial Lending, Inc.1Newtek LSP Holdco, LLC Newtek Business Services Holdco 1 , Inc.1 (surviving entity ofJanuary 2021 merger with Newtek Business Services Holdco 2, Inc.) Newtek Business Services Holdco 3, Inc.1 Newtek Business Services Holdco 4, Inc.1 Newtek Business Services Holdco 5, Inc.1 (formerlyBanc-Serv Acquisition, Inc. ) Newtek Business Services Holdco 6, Inc.1
(1) Taxable Subsidiaries
We are an internally-managed, closed-end, non-diversified investment company that has elected to be regulated as a BDC under the 1940 Act. In addition, forU.S. federal income tax purposes, we have elected to be treated as a RIC under the Code beginning with our 2015 tax year. As a BDC and a RIC, we are also subject to certain constraints, including limitations imposed by the 1940 Act and the Code. As a result, previously consolidated subsidiaries are now recorded as investments in controlled portfolio companies at fair value. NSBF is a consolidated subsidiary and originates loans under the SBA's 7(a) loan program. However, as part of our plan to reposition ourself as a bank holding company that intends to elect financial holding company status, if we discontinue the Company's election as a business development company under the 1940 Act, we will no longer be subject to the investment restrictions under the 1940 Act, and no longer qualify as a RIC under the Code. See "Item 1A. Risk Factors - Risks Related to Converting to aFinancial Holding Company " in the Company's Annual Report on Form 10-K for the year endedDecember 31, 2021 , filed with theSEC onMarch 1, 2022 .
Our common shares are currently listed on the Nasdaq Global Market under the
symbol “NEWT”.
NSBF, a nationally licensed SBA lender under the federal Section 7(a) loan
program, has been granted PLP status and originates, sells and services SBA 7(a)
loans and is authorized to place SBA guarantees on loans without seeking prior
SBA review and approval. Being a national lender with PLP status allows NSBF to
expedite the origination of loans since NSBF is not required to present
applications to the SBA for concurrent review and approval. The loss of PLP
status would adversely impact our marketing efforts and ultimately our loan
origination volume, which would negatively impact our results of operations.
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As a BDC, our investment objective is to generate both current income and
capital appreciation primarily through loans originated by our business finance
ecosystem and our equity investments in certain portfolio companies that we
control.
We target our debt investments, which are principally made through our business
finance ecosystem under the SBA 7(a) program, to produce a coupon rate of prime
plus 2.25% to 3.00% which enables us to generate rapid sales of guaranteed
portions of SBA 7(a) loans in the secondary market. We typically structure our
debt investments with the maximum seniority and collateral along with personal
guarantees from portfolio company owners, in many cases collateralized by other
assets including real estate. In most cases, our debt investment will be
collateralized by a first lien on the assets of the portfolio company and a
first or second lien on assets of guarantors, in both cases primarily real
estate. All SBA loans are made with personal guarantees from any owner(s) of 20%
or more of the portfolio company's equity. The amount of new debt investments,
particularly SBA 7(a) loans that we originate, will directly impact future
investment income. In addition, future amounts of unrealized appreciation or
depreciation on our investments, as well as the amount of realized gains or
losses, will also fluctuate depending upon economic conditions and the
performance of our investment portfolio. The changes in realized gains and
losses and unrealized appreciation or depreciation could have a material impact
on our operating results.
We typically structure our debt investments to include non-financial covenants
that seek to minimize our risk of capital loss such as lien protection and
prohibitions against change of control. Our debt investments have what we
believe are strong protections, including default penalties, information rights
and, in some cases, board observation rights and affirmative, negative and
financial covenants. Debt investments in portfolio companies, including the
controlled portfolio companies, have historically and are expected to continue
to comprise the majority of our overall investments in number and dollar volume.
While the vast majority of our investments have been structured as debt, we have
in the past and expect in the future to make selective equity investments
primarily as either strategic investments to enhance the integrated operating
platform or, to a lesser degree, under the Capco programs. For investments in
our controlled portfolio companies, we focus more on tailoring them to the long
term growth needs of the companies than to return. Our objectives with these
companies is to foster the development of the businesses as a part of the
integrated operational platform of serving the SMB market, so we may reduce the
burden on these companies to enable them to grow faster than they would
otherwise and as another means of supporting their development.
We regularly engage in discussions with third parties with respect to various
potential transactions. We may acquire an investment or a portfolio of
investments or an entire company or sell a portion of our portfolio on an
opportunistic basis. We, our subsidiaries, or our affiliates may also agree to
manage certain other funds that invest in debt, equity or provide other
financing or services to companies in a variety of industries for which we may
earn management or other fees for our services. We may also invest in the equity
of these funds, along with other third parties, from which we would seek to earn
a return and/or future incentive allocations. We may enter into new joint
venture partnerships to create additional third-party capital to originate
loans. Some of these transactions could be material to our business.
Consummation of any such transaction will be subject to completion of due
diligence, finalization of key business and financial terms (including price)
and negotiation of final definitive documentation as well as a number of other
factors and conditions including, without limitation, the approval of our board
of directors and required regulatory or third-party consents and, in certain
cases, the approval of our shareholders. Accordingly, there can be no assurance
that any such transaction would be consummated. Any of these transactions or
funds may require significant management resources either during the transaction
phase or on an ongoing basis depending on the terms of the transaction.
On March 27, 2020 , the CARES Act was signed into law in response to the COVID-19
pandemic and established the PPP. NSBF participated in the PPP and funded the
balance of its PPP loans in July 2021 . Income earned in connection with the PPP
should not be viewed as recurring.
Economic and COVID-19 Developments
We have observed and continue to observe supply chain interruptions, significant labor and resource shortages, commodity inflation, rising interest rates, economic sanctions as a result of the ongoing war betweenRussia andUkraine and elements of economic and financial market instability inthe United States , theUnited Kingdom , theEuropean Union andChina . One or more of these factors may contribute to increased market volatility, may have long term effects inthe United States and worldwide financial markets, and may cause economic uncertainties or deterioration inthe United States and worldwide. Additionally, in the event that theU.S. economy enters into a protracted recession, it is possible that the results of some of the companies similar to those in which we invest could experience deterioration, which could ultimately lead to difficulty in meeting debt service requirements and an increase in defaults. While we are not seeing signs of an overall, broad deterioration in our portfolio company results at this time, there can be no assurance that the performance of certain of our portfolio companies will not be negatively impacted by economic conditions, which could have a negative impact on our future results. 370
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Over two years after COVID-19 was recognized as a pandemic by theWorld Health Organization , its continued persistence inthe United States and worldwide and the magnitude of the economic impact of the outbreak continue to create an uncertain environment in which we and our portfolio companies operate. The preventative measures taken to contain or mitigate the spread of COVID-19 have caused, and may in the future cause, business shutdowns, cancellations of events and other travel disruptions. We continue to closely monitor our portfolio companies; however, we are unable to predict the duration of any business and supply-chain disruptions and resource shortages, the extent to which COVID-19 or economic conditions will negatively affect our portfolio companies' operating results or the impact that such disruptions may have on our results of operations and financial condition.
Price Range of Common Stock
Our common stock is traded on the Nasdaq Global Market under the symbol "NEWT."
High and low prices for the common stock over the previous two years are set
forth below, based on the highest and lowest intraday sales price per share
during that period.
Premium of High Premium of Low Sales
Price Range NAV1 Sales Price to NAV2 Price to NAV2
High Low
2020
Third Quarter $20.50 $16.73 $15.41 33% 9%
Fourth Quarter $19.82 $16.24 $15.70 26% 3%
2021
First Quarter $28.63 $18.77 $16.28 76% 15%
Second Quarter $38.78 $26.41 $16.38 137% 61%
Third Quarter $36.41 $24.07 $16.23 124% 48%
Fourth Quarter $32.38 $25.63 $16.72 94% 53%
2022
First Quarter $28.70 $24.00 $16.49 74% 46%
Second Quarter $27.18 $17.65 $16.31 67% 8%
Third Quarter $23.11 $15.65 $16.04 44% (2)%
(1) Net asset value per share is determined as of the last day in the relevant
quarter and therefore may not reflect the net asset value per share on the date
of the high and low sales prices. The values reflect net asset value per share
and are based on outstanding shares at the end of each period.
(2) Calculated as the respective high or low sales price divided by net asset
value and subtracting 1.
Revenues
We generate revenue in the form of interest, dividend, servicing and other fee
income on debt and equity investments. Our debt investments typically have terms
of 10 to 25 years and bear interest at prime plus a margin. In some instances,
we receive payments on our debt investments based on scheduled amortization of
the outstanding balances. In addition, we receive repayments of some of our debt
investments prior to their scheduled maturity date. The frequency or volume of
these repayments fluctuates significantly from period to period. Our portfolio
activity also reflects the proceeds of sales of securities. We receive servicing
income related to the guaranteed portions of SBA investments which we originate
and sell into the secondary market. These recurring fees are earned daily and
recorded when earned. In addition, we may generate revenue in the form of
packaging, prepayment, legal and late fees. We record such fees related to loans
as other income. Dividends are recorded as dividend income on an accrual basis
to the extent that such amounts are payable by the portfolio company and are
expected to be collected. Dividend income is recorded at the time dividends are
declared. Distributions of earnings from portfolio companies are evaluated to
determine if the distribution is income, return of capital or realized gain. In
addition, under
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the PPP that began in the second quarter of 2020 and concluded during the third
quarter of 2021, the SBA reimbursed the Company for originating loans and such
SBA reimbursements are included as interest income on PPP loans. Income earned
in connection with the PPP should not be viewed as recurring. NSBF funded the
balance of its PPP loans by the end of July 2021 . NSBF has redeployed resources
used to generate PPP loans to the origination of SBA 7(a) loans.
We recognize realized gains or losses on investments based on the difference
between the net proceeds from the disposition and the cost basis of the
investment without regard to unrealized gains or losses previously recognized.
We record current period changes in fair value of investments and assets that
are measured at fair value as a component of the net change in unrealized
appreciation (depreciation) on investments or servicing assets, as appropriate,
in the consolidated statements of operations.
Expenses
Our primary operating expenses are salaries and benefits, interest expense, origination and servicing and other general and administrative costs, such as professional fees, marketing, referral fees, servicing costs and rent. Since we are an internally-managed BDC with no outside adviser or management company, the BDC incurs all the related costs to operate the Company.
Guarantees
The Company is a guarantor on the Receivable and Inventory Facility atNBC . Maximum borrowings under the Receivable and Inventory Facility are$12.0 million and will be reduced until the facility matures inMay 2023 . AtSeptember 30, 2022 , total principal owed byNBC was$10.3 million . In addition, the Company deposited$0.75 million to collateralize the guarantee. AtSeptember 30, 2022 , the Company determined that it is not probable that payments would be required to be made under the guarantee. The Company is a guarantor on the NBL Capital One Facility,NBL Deutsche Bank Facility and NBL One Florida Bank Facility. Maximum borrowings under the NBL Capital One Facility are$75.0 million with an accordion feature to increase maximum borrowings to$150.0 million . The lenders' commitments terminate inNovember 2022 , with all amounts due under the NBL Capital One Facility maturing inNovember 2023 . Maximum borrowings under theNBL Deutsche Bank facility$100.0 million with a maturity date inMarch 2023 . Maximum borrowings under theNBL One Florida Bank facility are$20.0 million with a maturity date inSeptember 2024 . AtSeptember 30, 2022 , total principal owed by NBL under these facilities was$37.1 million . AtSeptember 30, 2022 , the Company determined that it is not probable that payments would be required to be made under these guarantees. The Company is a guarantor on the Webster Facility, a term loan facility between NMS withWebster Bank with an aggregate principal amount up to$50.0 million . The Webster Facility matures inNovember 2023 . AtSeptember 30, 2022 , total principal outstanding was$21.9 million . AtSeptember 30, 2022 , the Company determined that it is not probable that payments would be required to be made under the guarantee.
The Company’s Non-Conforming Conventional Commercial Loan Program
NCL : We established a 50/50 joint venture,NCL , betweenNewtek Commercial Lending, Inc. , a wholly-owned subsidiary of Newtek, andConventional Lending TCP Holding, LLC , a wholly-owned, indirect subsidiary ofBlackRock TCP Capital Corp. (Nasdaq:TCPC).NCL provided non-conforming conventional commercial and industrial term loans toU.S. middle-market companies and small businesses.NCL ceased funding new loans during 2020. OnJanuary 28, 2022 ,NCL closed a conventional commercial loan securitization with the sale of$56.3 million Class A Notes,NCL Business Loan Trust 2022-1, Business Loan-Backed Notes, Series 2022-1, secured by a segregated asset pool consisting primarily ofNCL's portfolio of conventional commercial business loans, including loans secured by liens on commercial or residential mortgaged properties, originated byNCL and NBL. The Notes were rated "A" (sf) by DBRS Morningstar. The Notes were priced at a yield of 3.209%. The proceeds of the securitization were used, in part, to repay the Deutsche Bank credit facility and return capital to theNCL partners. Refer to NOTE 3-INVESTMENTS for selected financial information and a schedule of investments ofNCL as ofSeptember 30, 2022 . Newtek-TSO JV: OnAugust 5, 2022 ,Newtek Commercial Lending, Inc. andTSO II Booster Aggregator, L.P. ("TSO II") entered into a joint venture, Newtek-TSO JV, governed by the Amended and Restated Limited Partnership Agreement for the Newtek-TSO JV.Newtek Commercial Lending, Inc. and TSO II each committed to contribute an equal share of equity funding to the Newtek-TSO JV and each will have equal voting rights on all material matters. The Newtek-TSO JV intends to deploy capital over the course of time with additional leverage supported by a warehouse line of credit. The intended purpose of the Newtek-TSO JV will be to invest in non-conforming conventional commercial and industrial term loans made to middle-market companies as well as small businesses. It is anticipated that Newtek-TSO JV will begin making investments during the fourth 372 --------------------------------------------------------------------------------
Table of Contents quarter of 2022. Unfunded Commitments AtSeptember 30, 2022 , the Company had$15.3 million of unfunded commitments in connection with its SBA 7(a) non-affiliate investments related to portions of loans originated which are partially funded. The Company will fund these commitments from the same sources it uses to fund its other investment commitments.
Loan Portfolio Asset Quality and Composition
The following tables set forth distributions of the cost basis of the Company's SBA 7(a) loan portfolio atSeptember 30, 2022 andDecember 31, 2021 , respectively, in thousands. The tables include loans in which NSBF owns 100% as a result of NSBF originating the loan and subsequently repurchasing the guaranteed portion from the SBA. The total of 100% NSBF-owned loans atSeptember 30, 2022 andDecember 31, 2021 is$11.8 million and$18.5 million , respectively.
Distribution by Business Type
As of
Business Type # of Loans Balance Average
Balance % of Balance
Existing Business 2,655$ 404,591 $ 152 80.5 % Business Acquisition 377 68,662 207 13.7 % Start-Up Business 314 29,147 96 5.8 % Total 3,346$ 502,400 $ 150 100.0 % As ofDecember 31, 2021 Business Type # of Loans Balance Average
Balance % of Balance
Existing Business 2,162$ 349,999 $ 162 81.1 % Business Acquisition 333 59,794 207 13.8 % Start-Up Business 266 22,176 96 5.1 % Total 2,761$ 431,970 $ 156 100.0 %
Distribution by Borrower Credit Score
September 30, 2022
Credit Score # of Loans Balance Average Balance % of Balance
500 to 550 11 $ 3,060 $ 278 0.6 %
551 to 600 55 13,825 251 2.8 %
601 to 650 285 55,539 195 11.1 %
651 to 700 869 137,158 158 27.3 %
701 to 750 1,188 170,497 144 33.9 %
751 to 800 822 110,135 134 21.9 %
801 to 850 114 12,141 106 2.4 %
Not available 2 44 22 0.0 %
Total 3,346 $ 502,400 $ 150 100.0 %
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December 31, 2021
Credit Score # of Loans Balance Average Balance % of Balance
500 to 550 15 $ 3,562 $ 237 0.8 %
551 to 600 59 15,322 260 3.6 %
601 to 650 299 59,139 198 13.7 %
651 to 700 754 118,150 157 27.4 %
701 to 750 914 140,720 154 32.6 %
751 to 800 632 85,479 135 19.8 %
801 to 850 86 9,548 111 2.2 %
Not available 2 49 25 0.0 %
Total 2,761 $ 431,970 $ 179 100.0 %
Distribution by Primary Collateral Type
Collateral Type # of Loans Balance Average Balance % of Balance Commercial Real Estate 1,048$ 224,586 $ 214 44.8 % Machinery and Equipment 482 85,054 176 16.9 % Residential Real Estate 965 81,898 85 16.3 % Accts Receivable and Inventory 420 75,769 180 15.1 % Other 100 26,313 263 5.2 % Unsecured 282 5,718 20 1.1 % Furniture and Fixtures 36 2,210 61 0.4 % Liquid Assets 13 851 65 0.2 % Total 3,346$ 502,400 $ 150 100.0 %December 31, 2021
Collateral Type # of Loans Balance Average Balance % of Balance Commercial Real Estate 1,016$ 228,381 $ 225 53.0 % Machinery and Equipment 430 73,433 171 17.0 % Accounts Receivable and Inventory 312 50,692 162 11.7 % Residential Real Estate 707 47,240 67 10.9 % Other 93 26,509 285 6.1 % Unsecured 161 2,984 19 0.7 % Furniture and Fixtures 28 1,797 64 0.4 % Liquid Assets 14 936 67 0.2 % Total 2,761$ 431,970 $ 156 100.0 % 374
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Distribution by Days Delinquent
September 30, 2022
Delinquency Status # of Loans Balance Average Balance % of Balance
Accrual
Current 3,098 $ 431,347 $ 139 85.8 %
31 to 60 days 42 12,195 - 2.4 %
61 to 90 days - - - - %
91 days or greater - - - - %
Non-accrual 206 58,858 286 11.8 %
Total 3,346 $ 502,400 $ 150 100.0 %
December 31, 2021
Delinquency Status # of Loans Balance Average Balance % of Balance
Accrual
Current 2,512 365,198 $ 145 84.6 %
31 to 60 days 59 12,646 214 2.9 %
61 to 90 days - - - - %
91 days or greater - - - - %
Non-accrual 190 54,126 285 12.5 %
Total 2,761 $ 431,970 $ 156 100.0 %
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