EX-99.1 5 file005.htm PRESS RELEASES

[NEWTEK BUSINESS SERVICES, INC. LOGO]

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

Newtek Business Services Completes the

Acquisition of CrystalTech Web Hosting, Inc.

NEW YORK, N.Y. - JULY 9, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS)
(www.newtekbusinessservices.com), a provider of business services and financial
products to the small to medium-sized business market, today announced that it
has completed its previously announced acquisition of the business CrystalTech
Web Hosting, Inc. The aggregate purchase price was $10,000,000 in cash and
$250,000 in Newtek common stock with additional payments of up to a total of
$1,250,000 in cash and $1,750,000 in Newtek common stock to be made if the
business meets certain profitability benchmarks over the next two years.

Based in Phoenix, Arizona, CrystalTech is currently the third largest Microsoft
Windows-only hosting company in the world, with approximately 30,000 customers,
80 percent of which are small to medium-sized businesses, a market which is also
the core of Newtek's market. CrystalTech is profitable, with net earnings in
2003 and 2002 of $2,299,740 and $235,547 on revenues of $5,524,165 and
$3,762,057 respectively, and has also achieved customer account growth of
approximately 1,100 new hosting accounts per month during 2004.

Barry Sloane, CEO of Newtek, stated, "This acquisition not only provides Newtek
with a profitable revenue source, but also greatly enhances our ability to
further one of our important strategic goals -- to cross-market our existing
menu of business and financial services to a large pre-existing customer base."

Newtek Business Services, Inc. is a premier provider of business services and
financial products to the small to medium-sized business market. Newtek's core
brands include:

o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced bookkeeping & controller
services;
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services; and
o NEWTEK INSURANCE AGENCY: customized business insurance (to be operational in
2004).

THE STATEMENTS IN THIS RELEASE MAY CONTAIN FORWARD-LOOKING STATEMENTS RELATING
TO SUCH MATTERS AS ANTICIPATED FUTURE BUSINESS STRATEGIES AND FINANCIAL
PERFORMANCE, ANTICIPATED FUTURE NUMBER OF CUSTOMERS, BUSINESS PROSPECTS,
LEGISLATIVE DEVELOPMENTS AND SIMILAR MATTERS. THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 PROVIDES A SAFE HARBOR FOR FORWARD LOOKING STATEMENTS. IN
ORDER TO COMPLY WITH THE TERMS OF THE SAFE HARBOR, THE COMPANY NOTES THAT A
VARIETY OF FACTORS COULD CAUSE THE COMPANY'S OR CRYSTALTECH'S ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THE ANTICIPATED RESULTS EXPRESSED IN THE COMPANY'S
FORWARD LOOKING STATEMENTS SUCH AS INTENSIFIED COMPETITION AND/OR OPERATING
PROBLEMS AND THEIR IMPACT ON REVENUES AND PROFIT MARGINS OR ADDITIONAL FACTORS
AS DESCRIBED IN NEWTEK BUSINESS SERVICES' 2003 ANNUAL REPORT ON FORM 10-K AND
SUBSEQUENTLY FILED REGISTRATION STATEMENTS.

CONTACTS:
Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com

Dave Gentry
Aurelius Consulting Group, Inc.
407-644-4256
dave@aurcg.com

[NEWTEK BUSINESS SERVICES, INC. LOGO]

FOR IMMEDIATE RELEASE

Newtek Announces Exercise of Over-Allotment Options

NEW YORK, N.Y. - JULY 15, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS)
(www.newtekbusinessservices.com), a provider of business services and financial
products to the small to medium-sized business market, today announced that it
has completed the sale of an additional 450,000 shares of its common stock
pursuant to the exercise of underwriters' over-allotment options which were
granted in connection with Newtek's secondary public offering which closed on
July 2, 2004. The sale resulted in net proceeds to Newtek of approximately $1.5
million after payment of underwriters' discount and commissions and estimated
offering expenses. In addition, three founding and principal shareholders of
Newtek sold an additional 450,000 shares, in the aggregate, pursuant to the
exercise of such underwriters' over-allotment options. Newtek did not pay any of
the offering costs for the selling shareholders.

This offering was underwritten by Roth Capital Partners and Maxim Group LLC. A
registration statement relating to these securities was filed with and has been
declared effective by the Securities and Exchange Commission. This press release
shall not constitute an offer to sell or solicitation of an offer to buy, nor
shall there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.

Newtek Business Services, Inc. is a premier provider of business services and
financial products to the small to medium-sized business market. Newtek's core
brands include:

o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced bookkeeping & controller
services;
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services;
o NEWTEK INSURANCE AGENCY: customized business insurance (to be operational in
2004);
o NEWTEK IT SERVICES: complete information technology solutions; and
o CRYSTALTECH WEB HOSTING: comprehensive web site services for small and medium
sized businesses.

CONTACTS:

Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com

Dave Gentry
Aurelius Consulting Group, Inc.
407-644-4256
dave@aurcg.com

[NEWTEK BUSINESS SERVICES, INC. LOGO]

FOR IMMEDIATE RELEASE

New Research Reports Released on Newtek Business Services, Inc.

NEW YORK, N.Y. - JULY 16, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS)
(www.newtekbusinessservices.com), a provider of business services and financial
products to the small to medium-sized business market, is pleased to announce
that two Wall Street investment banking firms, Maxim Group and Roth Capital,
have initiated research coverage on Newtek with a buy and strong buy
respectively. This research is available on Newtek's website for review under
Research Reports in Investor Relations. Please also feel free to call Roth
Capital at (949) 720-7100 and Maxim Group at (800) 724-0761 if you would like to
receive a hard copy of the report.

Newtek Business Services, Inc. is a premier provider of business services and
financial products to the small to medium-sized business market. Newtek's core
brands include:

o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced bookkeeping & controller
services;
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services;
o NEWTEK INSURANCE AGENCY: customized business insurance (to be operational in
2004);
o NEWTEK IT SERVICES: complete information technology solutions; and
o CRYSTALTECH WEB HOSTING: comprehensive web site services for small and medium
sized businesses.

CONTACTS:
Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com

Dave Gentry
Aurelius Consulting Group, Inc.
407-644-4256
dave@aurcg.com

[NEWTEK BUSINESS SERVICES, INC. LOGO]

FOR IMMEDIATE RELEASE

Newtek Business Services to Hold Earnings Conference Call

August 5 at 4:15 PM EST

NEW YORK, N.Y. - JULY 22, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS),
a provider of business services and financial products to the small business
market, will be conducting a conference call on August 5, 2004 at 4:15 pm. EST
to discuss the company's results for the second quarter 2004.

The conference call will be accessible via a toll free number by dialing
1-888-396-2386 and providing the pass code 96626281. Listeners are encouraged to
ask any questions that they may have during the call. The conference call will
also be broadcasted over the Internet through Newtek's website at
www.newtekbusinessservices.com. To listen to the webcast live, please go to
Newtek's website approximately 15 minutes prior to the call to download any
audio software which may be necessary. For those who miss the live broadcast, a
replay will be available on the website approximately one hour after the call.

Newtek Business Services, Inc. is a premier provider of business services and
financial products to the small to medium-sized business market. Newtek's core
brands include:

o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced digital bookkeeping
services;
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services;
o NEWTEK INSURANCE AGENCY: customized business insurance (to be operational in
2004);
o NEWTEK IT SERVICES: complete information technology solutions; and
o CRYSTALTECH WEB HOSTING: comprehensive web site services for small and medium
sized businesses.

CONTACTS:
Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com

Dave Gentry
Aurelius Consulting Group, Inc.
407-644-4256

[NEWTEK BUSINESS SERVICES, INC. LOGO]

FOR IMMEDIATE RELEASE

NEWTEK BUSINESS SERVICES, INC.
ENDORSED BY 11 STATE CREDIT UNION ORGANIZATIONS

New York, N.Y. - July 22, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS)
(www.newtekbusinessservices.com), a provider of business services and financial
products to the small business market, today announced that, through efforts
which commenced in the beginning of 2004, it has secured the endorsement of 11
state credit union leagues for Newtek to provide SBA lending and electronic
payment processing services to such leagues. These endorsements follow last
year's announced alliance by Newtek with Credit Union National Association
(CUNA), the national trade association serving America's credit unions. These
new endorsements are from leagues representing a total of 1,540 credit unions in
Alabama, Florida, Massachusetts, Rhode Island, New Hampshire, Nebraska, New
Mexico, Oklahoma, Oregon, Tennessee and Virginia. The credit unions in these
leagues are comprised of over 16 million members, of which 4 million are
estimated to be small to medium-sized businesses. Ten of the state credit union
leagues have endorsed Newtek Business Services for both SBA lending and
electronic payment processing.

Barry Sloane, Chairman and CEO of Newtek Business Services said, "Last year's
endorsement by CUNA nationally, as well as our more recent affiliation with the
state credit union organizations, is part of our overall marketing plan to
distribute our loan and merchant processing offerings through the 9,600 CUNA
credit unions and to their members. We believe our current efforts will continue
to help us reach our target markets for our services."

Newtek Business Services, Inc. is a premier provider of business services and
financial products to the small to medium-sized business market. Newtek's core
brands include:

o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced digital bookkeeping
services;
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services;
o NEWTEK INSURANCE AGENCY: customized business insurance (to be operational in
2004);
o NEWTEK IT SERVICES: complete information technology solutions; and
o CRYSTALTECH WEB HOSTING: comprehensive web site services for small and medium
sized businesses.

CONTACTS:
Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com

Dave Gentry
Aurelius Consulting Group, Inc.

[NEWTEK BUSINESS SERVICES, INC. LOGO]

407-644-4256
dave@aurcg.com

FOR IMMEDIATE RELEASE

Newtek Business Services, Inc. Completes Acquisition of Financial Keyosk

NEW YORK, N.Y. - AUGUST 2, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS)
(www.newtekbusinessservices.com), a provider of business services and financial
products to the small to medium-sized business market, today announced that it
has funded and completed the acquisition of Vistar Insurance Services, doing
business as Financial Keyosk. Financial Keyosk (www.financialkeyosk.com) is an
alternative insurance distributor helping financial institutions and agents
establish or expand insurance operations. It is licensed to conduct insurance
agency business in 49 states and has a complete line of insurance products in
the areas of life, health, property and casualty, disability and employee
benefits serving 3,500 customers.

The new organization will focus on serving banks and credit unions and Newtek's
small and medium-sized business client portfolio, as well as, offering insurance
products to new clients of other Newtek divisions, including its small business
lending and merchant processing business lines. Ultimately, the Financial Keyosk
brand will become Newtek Insurance Agency, a core offering of Newtek Business
Services, Inc.

Financial Keyosk has a unique turnkey web-based application solution for all
lines of insurance products which is consistent with and fits naturally into
Newtek's strategy of utilizing a centralized processing application and
decentralized cost-effective distribution channels, via strategic alliance
partners and its portfolio of business clients. Financial Keyosk will be setup
to cross-sell its products and services into Newtek's growing small to
medium-sized business customer base. Financial Keyosk has in excess of 40
nationally recognized "A" rated carriers providing insurance products to both
personal and commercial customers,

Financial Keyosk has a seasoned management team with John Dawson and Larry Paul
who together have over 50 years of insurance sales, marketing and underwriting
experience. Newtek management considers Larry Paul and John Dawson to be two of
the foremost experts in working with strategic alliance partners and their
customers to deliver insurance and other products, as evidenced by their current
portfolio of banks, credit unions and affinity customers along with publishing
two books in 2004 entitled How to Sell Insurance from Credit Unions (June 2004)
and How to Sell Insurance From Banks (April 2004).

"I couldn't be more pleased with the finalization of terms and our acquisition
of Financial Keyosk," said Barry Sloane, Chairman and CEO of Newtek Business
Services, Inc. "We have another 49-state platform with a full staff to begin
writing premiums immediately and service our clients and our strategic alliance
clientele as well. We are thrilled to have John Dawson lead the new organization
and Larry Paul as the president responsible for the financial institutions and
alliance partners. In addition to Financial Keyosk's management team and
personnel, Shawn Kolterman, President of COTS, LLC, the new parent of Financial
Keyosk, will be responsible for growing the Newtek Insurance customer base and
the continued development of the Financial Keyosk paperless back office service
center in Colorado. Shawn joins the team with 12 years experience in the
insurance industry.

Financial Keyosk was originally founded and financed by Zurich Insurance Company
of North America which will continue to own a minority equity stake in the
company. This acquisition was funded with Certified Capital Company proceeds and
will be a subsidiary of a qualified business in one of our state CAPCOs.

Newtek will address the purchase price and its projections for this business
line at its upcoming shareholder conference call on August 5, 2004 at 4:15pm.
The conference call will be accessible via a toll free number by dialing
1-888-396-2386 and providing the pass code 96626281.

ABOUT FINANCIAL KEYOSK
Financial Keyosk is an alternative insurance distributor helping financial
institutions and agents establish or expand insurance operations. Financial
institutions using the Keyosk system sell insurance through a combination of
employee referrals, internet and onsite agents, without having to operate an
insurance backroom. Keyosk's proprietary, web-based "Agency in a Box" technology
gives financial institutions a turnkey agency environment with licenses in all
states except Hawaii, selling for 40 insurance carriers including American
Medical Security, CNA, Foremost, Fortis, The Hartford, Hanover, Principal
Financial, SAFECO, St. Paul, UNICARE, Travelers, United Healthcare and Zurich
North America.

o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK INSURANCE AGENCY: customized business insurance (to be operational in
2004);
o NEWTEK IT SERVICES: complete information technology solutions;
o CRYSTALTECH WEB HOSTING: comprehensive web site services for small and medium
sized businesses;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced digital bookkeeping; and
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services.

CONTACTS:
Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com

Dave Gentry
Aurelius Consulting Group, Inc.
407-644-4256
dave@aurcg.com

[NEWTEK BUSINESS SERVICES, INC. LOGO]

FOR IMMEDIATE RELEASE

Newtek Business Services, Inc. Earns $0.07 per share for Second Quarter

Beats Wall Street Consensus by Approximately 40 Percent

NEW YORK, N.Y. - AUGUST 5, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS)
(www.newtekbusinessservices.com), a provider of business services and financial
products to the small to medium-sized business market, today announced its
second quarter earnings of $0.07 per share on revenues of $14.5 million. Wall
Street analyst estimates averaged $0.05 per share for the quarter.

During the second quarter Newtek experienced improvement in results in its small
business lending and electronic payment processing over the same period in the
previous year. Its new web hosting business (acquired in July 2004) also
experienced improvements over previously released pro forma estimates. The
company's certified capital company revenue did decline as compared to the same
period in 2003 due to the uneven nature of revenue recognition in this business.
Second quarter 2004 revenues from tax credits were $7 million vs. second quarter
2003 revenues from tax credits of $11.5 million.

"The second quarter 2004 results continue to be consistent with our business
plan and demonstrate our success," said Barry Sloane, Chairman and CEO of Newtek
Business Services, Inc. "We have a comprehensive plan to grow our core business
lines. Our lending, merchant processing and newly acquired web hosting company,
CrystalTech Web Hosting, have all had significant growth over the same period
last year.

"We also look forward to adding our insurance agency results due to our recent
acquisition of Financial Keyosk (www.financialkeyosk.com). As previously
announced, we have added to our cores business lines a full service insurance
agency business dedicated to meeting the needs of small and medium sized
businesses. As of the third quarter we are writing insurance business and will
be showing commission revenue. We are witnessing a validation of our business
model and look forward to reporting our continued success and progress.

"We are also pleased to announce that Roth Capital and The Maxim Group have
within the past two weeks initiated research coverage of Newtek Business
Services, Inc."

For those who miss the live broadcast, a replay will be available on the website
approximately one hour after the call.

o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK INSURANCE SERVICES: customized business insurance provided through
Financial Keyosk;
o NEWTEK IT SERVICES: complete information technology solutions;
o CRYSTALTECH WEB HOSTING: comprehensive web site services for small and medium
sized businesses;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced digital bookkeeping; and
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services.

CONTACTS:
Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com

Dave Gentry
Aurelius Consulting Group, Inc.
407-644-4256
dave@aurcg.com

NEWTEK BUSINESS SERVICES, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003

JUNE 30, DECEMBER 31,
2004 2003
------------ ------------
A S S E T S
-----------

Cash and cash equivalents ................................................. $ 37,649,541 $ 33,444,611

Restricted cash ........................................................... 2,060,788 2,107,471

Credits in lieu of cash ................................................... 70,853,664 71,294,083

SBA loans receivable, net of reserve for loan losses ...................... 38,096,972 52,050,725

Accounts receivable (net of allowance of $44,824 and $96,480, respectively) 902,157 469,768

Receivable from bank ...................................................... 2,002,756 2,670,353

SBA loans held for sale ................................................... 2,840,714 3,619,582

Accrued interest receivable ............................................... 272,596 281,072

Investments in qualified businesses - equity method investments ........... 300,000 300,000

Investments in qualified businesses -held to maturity investments ......... 1,255,475 1,420,179

Structured insurance product .............................................. 3,135,408 3,054,705

Prepaid insurance ......................................................... 14,170,099 13,282,630

Prepaid expenses and other assets ......................................... 3,511,002 1,907,132

Capitalized servicing asset (net of accumulated amortization of
$184,448 and $24,545, respectively) .................................... 1,526,052 754,064

Furniture, fixtures and equipment (net of accumulated depreciation of
$532,301 and $390,011, respectively) ................................... 815,058 670,715

Customer merchant accounts (net of accumulated amortization of $579,936
and $269,380, respectively) ............................................ 2,729,191 3,024,298

Goodwill .................................................................. 2,201,644 1,832,621
------------ ------------
Total assets .............................................................. $184,323,117 $192,184,009
------------ ------------

NEWTEK BUSINESS SERVICES, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
JUNE 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Accounts payable and accrued expenses ..................................... $ 6,001,753 $ 6,095,440

Notes payable - certified investors ....................................... 3,822,869 3,829,973

Notes payable - insurance ................................................. 6,003,088 4,115,136

Notes payable - other ..................................................... 760,000 1,000,000

Bank notes payable ........................................................ 37,658,253 51,990,047

Note payable in credits in lieu of cash ................................... 67,921,494 65,697,050

Deferred tax liability .................................................... 10,905,455 10,815,790
------------- -------------
Total liabilities .................................................... 133,072,912 143,543,436
------------- -------------
Minority interest ......................................................... 7,631,729 8,393,151
------------- -------------
Commitments and contingencies

Shareholders' equity:
Common stock (par value $0.02 per share; authorized 39,000,000 shares,
issued and outstanding 26,862,324 and 26,209,211, not including
582,980 shares held in escrow) ..................................... 537,246 524,184
Additional paid-in capital ........................................... 29,290,600 26,588,400
Unearned compensation ................................................ (1,579,826) (2,106,588)
Retained earnings .................................................... 15,370,456 15,241,426
------------- -------------
Total shareholders' equity ........................................... 43,618,476 40,247,422
------------- -------------
Total liabilities and shareholders' equity ........................... $ 184,323,117 $ 192,184,009
------------- -------------

NEWTEK BUSINESS SERVICES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004, AND 2003

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ----------------
2004 2003 2004 2003
---- ---- ---- ----

Revenue:
Income from tax credits ................................. $ 7,024,520 $ 11,470,752 $ 9,048,045 $ 21,859,334
Electronic payment processing ........................... 4,070,630 1,140,282 7,303,134 1,988,086
Servicing fee and premium income ........................ 2,141,745 353,013 3,254,112 721,460
Interest and dividend income ............................ 1,042,215 1,024,551 2,071,163 2,083,720
Other income ............................................ 203,225 731,550 676,374 986,992
------------ ------------ ------------ ------------
Total revenue ........................................ 14,482,335 14,720,148 22,352,828 27,639,592
------------ ------------ ------------ ------------
Expenses:

Interest ................................................ 3,478,022 3,486,235 7,242,797 7,204,087
Payroll and consulting fees ............................. 2,361,025 1,629,000 4,546,474 3,293,064
Electronic payment processing costs ..................... 2,578,749 399,811 4,679,735 1,519,753
Professional fees ....................................... 1,295,050 1,725,936 2,289,659 2,641,703
Insurance ............................................... 691,350 638,124 1,406,312 1,211,417
Other than temporary decline in value of investments .... -- 20,287 -- 1,733,701
Equity in net losses of affiliates ...................... -- 62,930 -- 117,904
Benefit for loan losses ................................. (151,930) -- (47,249) --
Other .................................................. 1,433,410 1,353,617 2,626,986 2,060,129
------------ ------------ ------------ ------------
Total expenses ....................................... 11,685,676 9,315,940 22,744,714 19,781,758
------------ ------------ ------------ ------------
Income (loss) before minority interest, provision for income
taxes and extraordinary items ............................ 2,796,659 5,404,208 (391,886) 7,857,834

Minority interest in loss (income) ......................... 310,267 (968,379) 610,581 (680,042)
------------ ------------ ------------ ------------
Income before provision for income taxes and extraordinary
items .................................................... 3,106,926 4,435,829 218,695 7,177,792

Provision for income taxes ................................. (1,273,839) (1,729,874) (89,665) (2,799,339)
------------ ------------ ------------ ------------
Income before extraordinary items .......................... 1,833,087 2,705,955 129,030 4,378,453

Extraordinary gain on acquisition of a business ............ -- -- -- 186,729
------------ ------------ ------------ ------------
Net income ................................................. $ 1,833,087 $ 2,705,955 $ 129,030 $ 4,565,182
------------ ------------ ------------ ------------

NEWTEK BUSINESS SERVICES, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (CONTINUED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004, AND 2003

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2004 2003 2004 2003
---- ---- ---- ----
Weighted average common shares outstanding

Basic .................................. 26,773,791 25,670,866 26,624,960 25,541,088

Diluted ................................ 27,227,038 26,047,237 27,158,205 25,857,904

Net income per share

Basic .................................. $ 0.07 $ 0.11 $ 0.00 $ 0.18

Diluted ................................ $ 0.07 $ 0.10 $ 0.00 $ 0.18
Income per share before extraordinary items

Basic .................................. $ 0.07 $ 0.11 $ 0.00 $ 0.17

Diluted ................................ $ 0.07 $ 0.10 $ 0.00 $ 0.17

SEGMENT REPORTING:

FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- ------------------------
2004 2003 2004 2003
---- ---- ---- ----

Revenue
SBA lending ................................... $ 3,158,625 $ 1,683,434 $ 5,298,678 $ 3,005,495
Electronic payment processing ................. 4,070,630 1,140,282 7,303,134 1,988,086
Capco and other ............................... 7,253,080 11,896,432 9,751,016 22,646,011
------------ ------------ ------------ ------------
TOTAL ...................................... $ 14,482,335 $ 14,720,148 $ 22,352,828 $ 27,639,592
------------ ------------ ------------ ------------
Income (loss) before provision for income taxes and
extraordinary items
SBA lending ................................... $ 1,431,185 $ (174,374) $ 1,719,946 $ (467,206)
Electronic payment processing ................. 95,066 (218,685) 105,639 (593,776)
Capco and other ............................... 1,580,675 4,828,888 (1,606,890) 8,238,774
------------ ------------ ------------ ------------
TOTAL ...................................... $ 3,106,926 $ 4,435,829 $ 218,695 $ 7,177,792
------------ ------------ ------------ ------------
Depreciation and amortization
SBA lending ................................... $ 112,183 $ 5,879 $ 191,387 $ 5,879
Electronic payment processing ................. 172,065 12,834 340,669 49,086
Capco and other ............................... 38,180 3,496 85,536 12,271
------------ ------------ ------------ ------------
TOTAL ...................................... $ 322,428 $ 22,209 $ 617,592 $ 67,236
------------ ------------ ------------ ------------
Intercompany revenue eliminated above
SBA lending ................................... $ -- $ -- $ -- $ --
Electronic payment processing ................. 236,365 70,349 451,297 162,993
Capco and other ............................... 488,692 242,828 905,224 619,784
------------ ------------ ------------ ------------
TOTAL ...................................... $ 725,057 $ 313,177 $ 1,356,521 $ 782,777
------------ ------------ ------------ ------------
Intercompany expenses eliminated above
SBA lending ................................... $ 161,783 $ 113,473 $ 319,896 $ 113,473
Electronic payment processing ................. 337,882 134,975 658,538 350,541
Capco and other ............................... 225,392 64,729 378,087 318,763
------------ ------------ ------------ ------------
TOTAL ...................................... $ 725,057 $ 313,177 $ 1,356,521 $ 782,777
------------ ------------ ------------ ------------

AT JUNE 30, AT DECEMBER 31,
2004 2003
----------- ---------------
Identifiable assets
SBA lending ................................... $ 51,546,653 $ 64,738,750
Electronic payment processing ................. 7,176,912 7,308,940
Capco and other ............................... 125,599,552 120,136,319
------------ ------------
TOTAL ...................................... $184,323,117 $192,184,009
------------ ------------

[NEWTEK BUSINESS SERVICES, INC. LOGO]

FOR IMMEDIATE RELEASE

Newtek Business Services, Inc. Earns $0.07 per share for Second Quarter

Beats Wall Street Consensus by Approximately 40 Percent

NEW YORK, N.Y. - AUGUST 23, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS)
(www.newtekbusinessservices.com), a provider of business services and financial
products to the small to medium-sized business market, today announced that a
video segment highlighting Newtek and its service lines will air on Forbes.com
live at 12:00 pm EST on Thursday, September 9, 2004. The "Newtek Success Story"
primarily features interviews with small business owners who have benefited from
Newtek's services, in addition to interviews with Barry Sloane, Chairman and CEO
of Newtek Business Services, and Craig J. Brunet, Chairman and CEO of Newtek
Strategies, Newtek's strategic marketing arm. The program will air on the
homepage of Forbes.com with promotion throughout the week of September 9 and
will remain in the Forbes archives for three months. The segment may also be
previewed on the Newtek homepage where it is currently posted and titled "Newtek
Overview and Customer Testimonials Video."

Newtek Business Services is the September company profile web cast presented by
WBwebcasting on Forbes.com. Other organizations featured in this series earlier
this year are Hewlett Packard, American Airlines, the Small Business
Administration and the US Vets Homeless initiative.

o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK INSURANCE SERVICES: customized business insurance provided through
Financial Keyosk;
o NEWTEK IT SERVICES: complete information technology solutions;
o CRYSTALTECH WEB HOSTING: comprehensive web site services for small and medium
sized businesses;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced digital bookkeeping; and
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services.

CONTACTS:
Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com
Dave Gentry
Aurelius Consulting Group, Inc.
407-644-4256
dave@aurcg.com

[NEWTEK BUSINESS SERVICES, INC. LOGO]

FOR IMMEDIATE RELEASE

Newtek Business Services, Inc. to Present at

the Roth Capital Partners New York Conference

NEW YORK, N.Y. - AUGUST 30, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS)
(www.newtekbusinessservices.com), a provider of business services and financial
products to the small to medium-sized business market, today announced that
Barry Sloane, Chairman and CEO, will be presenting at the Roth Capital Partners
New York Conference on September 14 at 1:30 pm. The presentation can be accessed
live by going to the website http://wsw.com/webcast/roth4/nkbs/ and filling out
a short registration form. The presentation will be archived for 60 days on the
Newtek Business Services homepage.

o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK INSURANCE SERVICES: customized business insurance provided through
Financial Keyosk;
o NEWTEK IT SERVICES: complete information technology solutions;
o CRYSTALTECH WEB HOSTING: comprehensive web site services for small and medium
sized businesses;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced digital bookkeeping; and
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services.

CONTACTS:
Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com

Dave Gentry
Aurelius Consulting Group, Inc.
407-644-4256
dave@aurcg.com

[NEWTEK BUSINESS SERVICES, INC. LOGO]

FOR IMMEDIATE RELEASE

Financial Keyosk to be Endorsed by Butte Community Bank

NEW YORK, NY - OCTOBER 12, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS)
(www.newtekbusinessservices.com) , a provider of business services and financial
products to the small to medium-sized business market, today announced that its
subsidiary, Financial Keyosk (www.financialkeyosk.com), will be exclusively
endorsed by Butte Community Bank to help establish the bank's insurance
operations. A subsidiary of Community Valley Bancorp (OTC BB: CVLL), Butte
Community Bank is a progressive Northern California bank with 10 branches, over
15,000 customers and assets totaling $418,000,000. Keyosk will provide insurance
back office support, including access to property/casualty and life/health
carriers, licensed care center agents and agency technology. Butte Community
Bank will be the first Keyosk bank serviced from its new Colorado Service
Center.

"Keyosk is just reaching its stride," stated John Dawson, CEO of Financial
Keyosk. "Enabling banks to hire their own agents and use our technology and
service centers allows them to enter into insurance sales at a fraction of the
cost of building or buying an agency. In addition, our 40-carrier platform
allows them to reach a larger percentage of their customers."

Barry Sloane, Chairman and CEO of Newtek Business Services, Inc., stated, "We
are proud to say that this is the eleventh financial institution to sign up with
Financial Keyosk to provide insurance agency services to their customer bases.
As Financial Keyosk continues to grow as our core operating system, we intend to
re-brand our 49-state licensed insurance agency, which currently does business
as Vistar Insurance, as the Newtek Insurance Agency."

ABOUT FINANCIAL KEYOSK

Financial Keyosk, a wholly owned subsidiary of Newtek Business Services, Inc.
(NASDAQ: NKBS) (www.newtekbusinessservices.com), is an alternative insurance
distributor helping financial institutions and agents establish or expand
insurance operations. Financial institutions using the Keyosk system sell
insurance through a combination of employee referrals, Internet and onsite
agents, without having to operate an insurance backroom. Keyosk's proprietary,
web-based "Agency in a Box" technology gives financial institutions a turnkey
agency environment with licenses in all states except Hawaii, selling for 40
insurance carriers including American Medical Security, CNA, Foremost, Fortis,
The Hartford, Hanover, Principal Financial, SAFECO, St. Paul, UNICARE,
Travelers, United Healthcare and Zurich North America.

ABOUT COMMUNITY VALLEY BANCORP

Community Valley Bancorp (OTC BB: CVLL) is the parent company of Butte Community
Bank, a progressive Northern California bank that combines traditional deposit
and lending services with innovative banking solutions.

Founded in 1990, Butte Community Bank is state-chartered with ten branches in
seven cities including Chico, Magalia, Marysville, Oroville, Paradise, Red Bluff
and Yuba City. It also operates loan production offices in Citrus Heights and
Redding. Community Valley Bancorp has headquarters in Chico, California.

o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK INSURANCE AGENCY: customized business insurance (to be operational in
2004);
o NEWTEK IT SERVICES: complete information technology solutions;
o CRYSTALTECH WEB HOSTING: comprehensive web site services for small and medium
sized businesses;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced digital bookkeeping; and
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services.

CONTACTS:
Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com

Dave Gentry
Aurelius Consulting Group, Inc.
407-644-4256
dave@aurcg.com

[NEWTEK BUSINESS SERVICES, INC. LOGO]

FOR IMMEDIATE RELEASE

CRYSTALTECH LOOKS TO BRING .NET TO THE MASSES

PHOENIX, AZ - OCTOBER 13, 2004 - Newtek Business Services, Inc. (NASDAQ: NKBS)
(www.newtekbusinessservices.com), a provider of business services and financial
products to the small to medium-sized business market, today announced that it's
subsidiary, CrystalTech Web Hosting, Inc., has released a hosting plan geared
towards providing ASP.NET programmers of all levels with a low-cost, stable and
reliable development environment. The new hosting plan, labeled the ASP.NET
Developer Plan, offers enough website space, bandwidth and Microsoft SQL Server
space to accommodate any one of a number of varied applications, from simple
websites to more complex applications like shopping carts and content management
systems. When asked about the initial origin of the new Plan, Tim Uzzanti,
CrystalTech's CEO, said, "This offer is related to our participation in the
ASP.NET Hosting Advantage program. We felt that the ASP.NET Developer Plan was
perfectly positioned for this market and we're thrilled to be working with
Microsoft on helping developers move to ASP.NET. Both experienced and novice
developers are looking for a reasonably priced hosting plan that they can take
advantage of to deploy their ASP.NET applications over the web. We decided to
make this plan available to all potential CrystalTech customers, as well as to
our already sizeable community of ASP.NET developers." Mr. Uzzanti went on to
say that CrystalTech has production hosting plans available as well to
accommodate developers who are ready to move their projects from the development
stage to actual deployment. These plans upgrade the allocations given in as part
of the new ASP.NET Developer Plan, including more disk space and bandwidth, web
site statistics, substantial email accounts and more.

Barry Sloane, Chairman and CEO of Newtek Business Services, Inc., added "We are
thrilled that Microsoft has recognized CrystalTech to be a high quality service
provider. We believe that this relationship will lead us to growth in this
important division and allow us to continue to penetrate the small to
medium-sized customer base with high quality products and services."

ABOUT CRYSTALTECH
Founded in 1992, CrystalTech Web Hosting, Inc. is one of the largest
Windows-based web hosting companies in the world, hosting customers in over 80
countries, ranging from small businesses to Fortune 100 corporations.
CrystalTech is responsible for hundreds of millions of visits each day on the
Internet and uses a state-of-the-art data center that includes redundancy
throughout core systems like power, air conditioning, network connectivity,
network transportation, as well as a secured environment for their network
operations center. CrystalTech is a wholly-owned subsidiary of Newtek Business
Services, Inc. (NASDAQ: NKBS), a premier provider of business services and
financial products to small and medium-sized businesses. For more information
about CrystalTech, please contact 877-323-4678 or visit www.crystaltech.com.

ABOUT NEWTEK BUSINESS SERVICES, INC.
Newtek Business Services, Inc. is a premier provider of business services and
financial products to the small to medium-sized business market. Newtek's core
brands include:
o NEWTEK SMALL BUSINESS FINANCE: small business and U.S. government-guaranteed
lending services;
o NEWTEK MERCHANT SOLUTIONS: electronic merchant payment processing solutions;
o NEWTEK INSURANCE AGENCY: customized business insurance (to be operational in
2004);
o NEWTEK IT SERVICES: complete information technology solutions;
o CRYSTALTECH WEB HOSTING: comprehensive web site services for small and medium
sized businesses;
o NEWTEK FINANCIAL INFORMATION SYSTEMS: outsourced digital bookkeeping; and
o NEWTEK TAX SERVICES: tax filing, preparation and advisory services.

CONTACTS:
Newtek Business Services
Barry Sloane
Chairman of the Board & CEO
212-356-9500
bsloane@newtekbusinessservices.com

Dave Gentry
Aurelius Consulting Group, Inc.
407-644-4256
dave@aurcg.com