Newtek Business Services, Inc.

NASDAQ: NEWT

First Quarter 2008

Financial Results Conference Call

May 8, 2008, 4:15 PM

Hosted By:

Barry Sloane, CEO and Chairman

Seth A. Cohen, CFO

Investor Relations Contact:

Jayne L. Cavuoto

212-273-8193

jcavuoto@newtekbusinessservices.com

Exhibit 99.1

2

Safe Harbor Statement

The

statements

in

this

slide

presentation

including

statements

regarding

anticipated

future

financial

performance,

Newtek's

beliefs,

expectations,

intentions

or

strategies

for

the

future,

may

be

"forward-looking

statements"

under

the

Private

Securities

Litigation

Reform

Act

of

1995.

All

forward-looking

statements

involve

a

number

of

risks

and

uncertainties

that

could

cause

actual

results

to

differ

materially

from

the

plans,

intentions

and

expectations

reflected

in

or

suggested

by

the

forward-looking

statements.

Such

risks

and

uncertainties

include,

among

others,

intensified

competition,

operating

problems

and

their

impact

on

revenues

and

profit

margins,

anticipated

future

business

strategies

and

financial

performance,

anticipated

future

number

of

customers,

business

prospects,

legislative

developments

and

similar

matters.

Risk

factors,

cautionary

statements

and

other

conditions

which

could

cause

Newtek’s

actual

results

to

differ

from

management's

current

expectations

are

contained

in

Newtek’s

filings

with

the

Securities

and

Exchange

Commission

and

available

through

http://www.sec.gov

Also

we

need

to

point

out

that

our

Capcos

operate

under

a

different

set

of

rules

in

each

of

the

8

jurisdictions

and

that

these

place

varying

requirements

on

the

structure

of

our

investments.

In

some

cases,

particularly

in

Louisiana,

and

New

York

we

don’t

control

the

equity

or

management

of

a

qualified

business,

but

that

cannot

always

be

presented

orally

or

in

written

presentations

3

Q1 2008 Conference Call Agenda

Financial Results Snapshot

Newtek’s

Value Proposition

Adoption of SFAS No. 159

Reduction in Cash Borrowings

Momentum in EPP Segment

Web Hosting Initiatives

Small Business Finance Initiatives

Insurance Agency Initiatives

Cost Reduction Measures

Financial Review

2008 Outlook

4

Q1 2008 Financial Results

Q1 2008 v. Q1 2007 core operating segment revenue

increased 10%

Electronic Payment Processing:

$15.2 million -

up 21% over

Q1 2007

Web Hosting:

$4.3 million -

up 10% over Q1 2007

Small Business Finance:

$1.9 million -

down (38)% over Q1

2007

Q1 2008 pre-tax loss of $3.9 million

In line with previously stated guidance

Depreciation and amortization non-cash expense of $1.8

million in Q1 2008

Lending segment put pressure on Q1 2008 earnings

Maintaining quarterly and annual guidance with SFAS 159

5

Financial Strength & Liquidity

Financial strength (at March 31, 2007)

$30.9 million in cash and cash equivalents, and restricted

cash

•

Equates to $0.86 cash per share

Very little quantifiable debt

Liquidity (at March 31, 2007)

GE line of credit: $50 million total capacity for small business

lending

North Fork Bank revolving credit facility: $10 million total

capacity

Wells Fargo line of credit: $10 million total capacity for

account receivables financing

Currently have unused capacity in these lines

6

Newtek™

Business Service Suite

7

Newtek™

Insurance Portal

8

Adoption of SFAS No.159

Adopted Fair Market Value (FMV) accounting for Capco

segment as of January 1, 2008.

SFAS 159 became effective for financial statements issued

for fiscal years beginning after November

15, 2007

Realigns revenues and expenses, enabling us to

significantly reduce the expected non-cash losses in the

Capco

segment in 2008 and thereafter

One-time $14.3 million non-cash reduction to retained

earnings

Reduces the deferred tax liability by $9.6 million

Enables us to simplify our financials and to more accurately

depict our operating businesses

Improves the transparency of the financials

9

-0.645

-0.303

0.012

0.102

0.076

-$10.0

-$8.0

-$6.0

-$4.0

-$2.0

$0.0

$2.0

Capco Non-Cash Loss

Adoption of SFAS No.159

-$8.3

-$6.3

-$4.3

-$2.7

-$1.4

$9.4*

-$10.0

-$8.0

-$6.0

-$4.0

-$2.0

$0.0

$2.0

Capco Non-Cash Loss

Without the Adoption of SFAS

159

Pro-forma Non-Cash Loss

Assumes Adoption of SFAS 159

Capco

Non-Cash Loss Expectation

Without Adoption of SFAS 159

With Adoption of SFAS 159

*Actual Capco

non-cash loss in 2007

2008

2009

2012

2010

2011

2008

2009

2012

2010

2011

2007

10

Deferred Tax Liability

Reduced deferred tax liability by $9.6 million.

Deferred tax liability created through mismatch of GAAP

and tax earnings

11

Reduction of Cash Borrowings

For the year ended March 31, 2008, total cash borrowings

were reduced by $6.8 million

Paid TICC Note: $1.0 million

Paid down payables: $1.0 million

Paid AI Credit: $4.8 million

12

Momentum in EPP Business

Increase in processing volume and active processing

merchants over Q1 2007

Added over 2,000 new processing merchants in the previous

six-month period (October 2007-March 2008)

Cash flow positive business

EBITDA margin of 10.8% for Q1 2008

Significant operating leverage

Potential to increase market share

NewTracker™

client acquisition and processing model

works well with EPP

2008 EPP segment EBITDA forecast:

$6.5 to $7.0 million

EPP segment does not have any debt

13

Web Hosting Initiatives

Continue to invest in Web Hosting segment to support

future growth

Continue to evaluate expenditures versus productivity,

particularly in marketing, in the Web Hosting segment

seeking additional cost savings where applicable

Currently at 50% capacity in our data center

Anticipate launch of wholesale outreach in Q3 2008

2008 Web Hosting segment EBITDA forecast:

$6.2 to $6.6 million

Web Hosting segment currently does not have any debt

Great marketing channel to target

IT partners and web developers

14

Small Business Finance

Q1 2008 revenue decreased by 38% to $1.9 million over Q1 2007

primarily as a result of:

Decrease in loan originations due to tighter underwriting standards

Sold fewer guaranteed loans in Q1 2008 vs. Q1 2007

In Q1 2008, the average premium received on the sale of guaranteed loans

decreased from Q1 2007 levels

•

Q1 2008 average premium of 8.57% versus Q1 2007 average premium of

9.90%

CDS consolidation accounts for approximately $200,000 of the Q1 2008

pre-tax loss of $1.5 million in the lending segment

Taking longer to originate required amount of loans to outweigh fixed

costs

No capital market dependence in lending segment

Long-term loan portfolio performance

•

Loan portfolio performing tacking better than in Q1 2007, and continues to

be in line with expectations

•

Adequately reserved

15

Small Business Finance Initiatives

Recruiting new lending personnel

Reevaluation of primary loan origination sources

Increasing alliances and lending partners

Actively bidding on both performing and non-performing

loan portfolios

SBA lending expertise and in-house SBA servicing

capabilities

Ability to purchase SBA loan portfolios and servicing from banks

exiting this area of lending and provide new outsourced funding

solutions

Expect to participate in government-guaranteed USDA

loan program by Q3 2008

16

Value of USDA Loan Program

USDA loans are primarily not

agricultural loans; program to

support the rural community

USDA loans will allow us to expand our product offering

beyond solely SBA loans

Greater flexibility than under the 7a program

Offer loans up to $25 million

Offer multiple rate options for clients other than a floating rate

Potential for additional income

Fee income (processing/application fees) are allowable under

this program

Premium fee income on the sale of the guaranteed portion of

these loans as:

•

Guaranteed pricing is currently higher for these loans than 7a

pricing

•

Loans in this program have an 80% guarantee versus 75%

guarantee in the 7a program

17

Insurance Agency Initiatives

Currently have alliance partner relationships with brand-

recognized-names such as AIG, Navy Federal Credit Union and

CEFCU

Actively exploring new major alliance deals

Constantly reevaluating and upgrading our processing capabilities

NewTracker™

works well with the Insurance Agency

0%

5%

10%

15%

20%

Oct

Nov

Dec

Jan

Feb

Mar

Closing Ratio

0

200

400

600

800

1,000

1,200

1,400

Oct

Nov

Dec

Jan

Feb

Mar

Referrals

Increase in Insurance Referrals

From October to March

Increase in Closed Insurance Referrals

From October to March

18

Cost Reduction Measures

Continue to reduce headcount and salary-related

expenses at the Holding Company (Newtek Business

Services, Inc.)

Plan to review other segments to recognize additional

cost reductions

Seek to close and consolidate certain company facilities

throughout the U.S. to realize additional cost reductions

19

Financial Review

Seth A. Cohen -

CFO

20

Q1 2008 Actual vs. Q1 2007 Actual

(3.539)

(1.383)

1.636

1.636

CAPCO

Revenue

Q1 2008

Actual

Revenue

Q1 2007

Actual

Pretax Net

Income (Loss)

Q1 2008

Actual

Pretax Net

Income (Loss)

Q1 2007

Actual

EBITDA

Q1 2008

Actual

EBITDA

Q1 2007

Actual

Electronic

Payment

Processing

15.211

12.557

1.080

0.921

1.642

1.369

Web Hosting

4.282

3.888

0.614

0.929

1.448

1.715

Small Business

Finance

1.866

3.011

(1.502)

(0.118)

(0.690)

0.793

All Other

0.661

0.823

(0.556)

(0.099)

(0.525)

(0.036)

Corporate

Activities

1.073

1.126

(2.186)

(2.160)

(2.089)

(2.061)

Intercompany

Eliminations

(1.209)

(1.232)

Total

23.520

21.809

(3.933)

(4.066)

In millions of dollars

21

Q1 2008 Guidance vs. Q1 2008 Actual

(1.383)

(1.4) –

(1.4)

1.636

1.5 –

1.5

CAPCO

Revenue

Guidance

Revenue

Actual

Pretax Net

Income (Loss)

Guidance

Pretax Net

Income (Loss)

Actual

EBITDA

Guidance

EBITDA

Actual

Electronic

Payment

Processing

14.8 –

15.0

15.211

0.9 –

1.0

1.080

1.4 –

1.6

1.642

Web Hosting

4.2 –

4.4

4.282

0.6 –

0.7

0.614

1.4 –

1.5

1.448

Small Business

Finance

1.6 –

1.7

1.866

(1.5) –

(1.4)

(1.502)

(0.7) –

(0.6)

(0.690)

All Other

0.5 –

0.7

0.661

(0.9) –

(0.8)

(0.556)

(0.9) –

(0.7)

(0.525)

Corporate

Activities

1.0 –

1.1

1.073

(2.1) –

(2.0)

(2.186)

(2.0) –

(1.9)

(2.089)

Intercompany

Eliminations

(1.2) –

(1.2)

(1.209)

Total

22.4 –

23.2

23.520

(4.4) –

(3.9)

(3.933)

In millions of dollars

22

Cash Flows from Operating Activities

Cash Flows from Operating Activities by Segment

For The Three Months Ended March 31, 2008

23

Going Forward: 2008

Barry Sloane -

CEO

24

2008 Segment Guidance

*Note: totals may not add due to rounding

In millions of dollars

Electronic

Small

Payment

Web

Business

All

Corporate

Processing

Hosting

Finance

Other

Activities

Low

High

Low

High

Low

High

Low

High

Low

High

2008 Full Year

Revenue

65.5

66.1

18.0

18.5

10.5

11.0

2.5

3.0

3.5

4.0

Pretax Net Income

4.3

4.8

2.9

3.3

(2.0)

(1.5)

(3.2)

(2.7)

(8.7)

(8.2)

Interest Expense

0.1

0.1

0.0

0.0

1.8

1.8

-

-

-

-

Depreciation and Amortization

2.2

2.2

3.3

3.3

1.5

1.5

0.1

0.1

0.3

0.3

EBITDA

6.5

7.0

6.2

6.6

1.3

1.8

(3.1)

(2.6)

(8.3)

(7.8)

2008 2nd Quarter

Revenue

15.8

16.0

4.4

4.5

2.1

2.2

0.6

0.8

0.9

1.0

Pretax Net Income

1.0

1.1

0.7

0.8

(0.9)

(0.8)

(0.8)

(0.7)

(2.2)

(2.1)

Interest Expense

0.0

0.0

0.0

0.0

0.4

0.4

-

-

-

-

Depreciation and Amortization

0.5

0.5

0.8

0.8

0.3

0.3

-

-

0.1

0.1

EBITDA

1.6

1.7

1.5

1.6

(0.1)

-

(0.8)

(0.7)

(2.1)

(2.0)

2008 3rd Quarter

Revenue

16.7

16.8

4.6

4.7

3.2

3.3

0.6

0.8

0.9

1.0

Pretax Net Income

1.1

1.2

0.8

0.9

(0.1)

0.1

(0.8)

(0.7)

(2.2)

(2.1)

Interest Expense

0.0

0.0

0.0

0.0

0.5

0.5

-

-

-

-

Depreciation and Amortization

0.5

0.5

0.9

0.9

0.4

0.4

-

-

0.1

0.1

EBITDA

1.6

1.7

1.6

1.8

0.8

0.9

(0.8)

(0.6)

(2.1)

(2.0)

2008 4th Quarter

Revenue

18.2

18.3

4.7

4.9

3.7

3.8

0.7

0.8

0.8

1.0

Pretax Net Income

1.4

1.5

0.8

0.9

0.4

0.6

(0.7)

(0.6)

(2.2)

(2.1)

Interest Expense

0.0

0.0

0.0

0.0

0.5

0.5

-

-

-

-

Depreciation and Amortization

0.5

0.5

0.9

0.9

0.4

0.4

-

-

0.1

0.1

EBITDA

2.0

2.1

1.7

1.8

1.3

1.5

(0.7)

(0.6)

(2.1)

(2.0)

25

2008 Segment Guidance

In millions of dollars

Note: Totals may not add due to rounding.

Total

Business

CAPCO

Intercompany

Segments

Segment

Eliminations

Total

Low

High

Low

High

Low

High

2008 Full Year

Revenue

100.0

102.6

6.1

6.1

(4.6)

101.5

104.1

Pretax Net Income

(6.7)

(4.3)

(5.3)

(5.3)

-

(12.0)

(9.6)

2008 2nd Quarter

Revenue

23.7

24.5

1.5

1.5

(1.1)

24.2

24.9

Pretax Net Income

(2.2)

(1.6)

(1.3)

(1.3)

-

(3.5)

(2.9)

2008 3rd Quarter

Revenue

26.0

26.6

1.6

1.6

(1.1)

26.5

27.0

Pretax Net Income

(1.2)

(0.6)

(1.3)

(1.3)

-

(2.5)

(1.9)

2008 4th Quarter

Revenue

28.1

28.8

1.6

1.6

(1.1)

28.6

29.2

Pretax Net Income

(0.3)

0.4

(1.3)

(1.3)

-

(1.6)

(1.0)

26

Questions & Answers

27

Addendums

28

(0.690)

0.310

0.502

(1.502)

Small Business Finance

(0.525)

0.031

-

(0.556)

All Other

Pretax Income

(Loss) for Q1 2008

Interest Expense for

Q1 2008

Depreciation and

amortization for Q1 2008

Q1 2008 EBITDA

Electronic Payment

Processing

1.080

-

0.562

1.642

Web Hosting

0.614

0.016

0.818

1.448

Corporate Activities

(2.186)

0.019

0.078

(2.089)

0.793

0.277

0.634

(0.118)

Small Business Finance

(0.036)

0.063

-

(0.099)

All Other

Pretax Income

(Loss) for Q1 2007

Interest Expense for

Q1 2007

Depreciation and

amortization  for Q1 2007

Q1 2007 EBITDA

Electronic Payment

Processing

0.921

-

0.448

1.369

Web Hosting

0.929

0.077

0.709

1.715

Corporate Activities

(2.160)

0.039

0.060

(2.061)

EBITDA Reconciliation

EBITDA Reconciliation to Net Income (Loss)

For The Three Months Ended March 31, 2008

In millions of dollars

EBITDA Reconciliation to Net Income (Loss)

For The Three Months Ended March 31, 2007

In millions of dollars

29

Non-GAAP Financial Measures

In evaluating its business, Newtek considers and uses EBITDA as a supplemental measure

of its operating performance.  The Company defines EBITDA as earnings before interest

expense, taxes, depreciation and amortization.  Newtek uses EBITDA as a supplemental

measure to review and assess its operating performance.  The Company also presents

EBITDA because it believes it is frequently used by securities analysts, investors and other

interested parties as a measure of financial performance.

The term EBITDA is not defined under U.S generally accepted accounting principles, or U.S.

GAAP, and is not a measure of operating income, operating performance or liquidity

presented in accordance with U.S. GAAP.  EBITDA has limitations as a analytical tool and,

when assessing the Company’s operating performance, investors should not consider

EBITDA in isolation, or as a substitute for net income (loss) or

other consolidated income

statement data prepared in accordance with U.S. GAAP.  Among other things, EBITDA does

not reflect the Company’s actual cash expenditures.  Other companies may calculate similar

measures differently than Newtek, limiting their usefulness as comparative tools.  Newtek

compensates for these limitations by relying primarily on its GAAP results and using

EBITDA only supplementally.