Good day, ladies and gentlemen, and welcome to Newtek Business Services Q3 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions). Later, we'll conduct a question-and-answer session and instructions will follow at that time. I would also like to reminder everyone that this conference is being recorded. I’d now like to introduce to you to your host for today conference Mr. Barry Sloane, CEO and President. Mr. Sloane the floor is your.

Thank you very much operator and welcome to the third quarter 2013 financial results conference call. My name is Barry Sloane, I am President, Founder and CEO of Newtek Business Services, stock symbol NEWT on the NASDAQ. Also here with me today is Jenny Eddelson, our Chief Accounting Officer. Jenny would you please read the Safe Harbor statement.

Sure. The statements in this slide presentation including statements regarding anticipated future financial performance, Newtek’s beliefs, expectations, intentions or strategies for the future maybe 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 impacts 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 www.sec.gov.

Thank you, Jenny. For those of you that are interest in following the presentation today, the corresponding presentation is available on the Events and Presentations section of the Investor Relation section on our website thesba.com and following this conference call shortly thereafter we will have a audio version on our website. I would like to now turn your attention to slide three of the presentation. For many of you that follow the company closely, Newtek Business Services 8-K is filed and to registration statement on October 1st that was filed under Newtek Business Services Corp. Today we will not comment at all on this call on anything outside of the registration statement until its affective date. As CEO of Newtek, I don’t expect the results to necessarily improve quarter-over-quarter, however I do expect that demand from my team as they improve year-over-year. Having said that we are extremely happy with the big picture for Newtek Business Services and our third quarter earnings per share was up 66.7% over last year’s third quarter. Our letter is on track for its best year ever in terms of deals close and net income. And in the fourth quarter just in the month of October we closed $17 million of loans and the pipeline is very, very robust to close at a record breaking year. Today we are going to be reaffirming our guidance for the company as a whole in terms of EPS revenues, net income and EBITDA and we have big gains in each of those aspects year-over-year. The Board and I believe in this company, Board and I believe very much in this company and we are not alone. Goldman Sachs just extended us the $75 million credit facility which will allow us to grow even more in 2014. We are…

Sure. Thank you, Barry. To summarize our consolidated third quarter results we had operating revenue of $34.8 million, a 4% increase over the third quarter of 2012. Consolidated pre-tax income was $2 million for the quarter and net income attributable to new tax was $1.8 million favorably impacting 2013 net income during the period with the benefit related to the tax true up for the period. We reported diluted EPS of $0.05 per share, a 67% increase over the third quarter of 2012. And we had adjusted EBITDA of $4.4 million for the quarter. For the nine months ended September 30, 2013, we had operating revenues of $105.9 million, a 10% increase over the prior year. Our consolidated pre-tax income was $7 million and net income attributable to Newtek was $5.1 million. Both improvements over the year ago, pre-tax income of $6.2 million and net income of $3.6 million and we had a 40% increase in our EPS which was $0.14 per diluted share. Our adjusted EBITDA for the nine months ended September 30, 2013 was $13.9 million, a 21% improvement over the prior year. Please turn to slide 31 and 32 for a summary of the third quarter and year-to-date 2013 segment results compared to the same period in 2012. In the Electronic Payment Processing segment revenue grew by 2% between quarters to $22.2 million. The overall increase in revenue was due to growth in processing volumes which on average increased by 5% for merchant partially offset by lower average pricing between years. Pre-tax income for this segment increased 8% to $1.9 million for the quarter principally due to a reduction in the salaries and benefits and depreciation and amortization between years. Our year-to-date EPP revenue increased by 6% and pre-tax income increased 18% year-over-year to $6.2 million principally…

Operator we would like to take questions now.

(Operator Instructions) Our first question comes from the line of Marc Silk from Silk Investment Advisors. Mr. Silk your line is open, please go ahead.

Congratulations on another good quarter, Barry. My only question is, can you just give us a little color as far as what went on during the government shutdown? So for instance I know you can do the FDA loans but will you still getting customers prepared in the minute the government open you hitting the ground running or it’s not as simple as that?

Yeah, I appreciate the question. During the shutdown we were still taking in applications. We were growing the pipeline. We were getting deals ready to be closed. So for the most part, we didn’t stop our operations. Remind you things do tend to bunch up during that, if you add for a periods on. So it definitely made things a bit more difficult, but our operation went very smoothly and it did not slow us down along the pipeline at all.

Alright, thanks.

(Operator Instructions). Our next question comes from the line of Frank DiLorenzo. Mr. DiLorenzo, your line is open. Please go ahead.

I had a question about electronic payment processing, could you give us a little detail on what you’re seeing going into the holiday season in 2014 with regards to consumer demands and the overall economy just on your end sort of internally if you have any particular expectations relative to the holiday 2012 as well as fiscal year 2013?

Thank you, Frank. It’s a little too close. I should say too far away to really get a deal for what I would say holiday shopping is coming and I will tell you crossing volumes for the month of November exactly firm. We are not seeing double-digit growth like in one quarter in this particular business or in the market. Unfortunately a lot of the negative news in the last four weeks whether it was two weeks of government shutdown and two weeks of the Affordable Healthcare Act hasn’t really helped the overall confidence level in small business. I think you are looking generally for on holiday season that will be low single digit growth for retail activities, that is the feeling that we are seeing. In the payment side, we think our revenue growth will be beyond that based upon the mix of accounts that we have, but that’s pretty much what we’re seeing at this point.

Question regarding Managed Technology, some of the metrics you provided us looks solid, however we haven’t really seen the translation into strong revenue growth. I was wondering what that is a function of, is that the pricing scenario? We are seeing some good metrics, but we are not quite seeing that growth yet, is there going to be inflection point there where we see a nice uptick on the revenue side of the business?

Frank, I'm still optimistic, but I would tell you at this point in time, I'm disappointed in the quarter as well. And we have to work harder to figure out where our customers are spending money, why they are spending money and why they are not coming to us to make those expenditures. So I'm optimistic in the sense that this particular unit we know very well, we have done a great job of servicing customers historically. I think that we have as the markets are changing particularly with respect to cloud we need the market to know that we are on Linux and cloud provider, but historically we have been a Microsoft Windows only provider. We also need to reach out to the end customer itself. So, I've actually got a meeting with [C J Brunet] tomorrow in New York to discuss this, but we are not happy with the results at this point of time and I would view our performance in this segment is underperformance based upon what we should do.

Great. Thanks. I'll go back into the queue.

Our next question comes from the line of Harold Elish of UBS. Mr. Elish, your line is open.

Thanks so much, Barry, and thank you for your [candid] regarding Managed Technology. I mean, give me some feeling strategically of how you perceive that business, I mean is this a business we have to be in as a loss leader regardless of its profitability?

Thank you, Harry. I want to take a part of that question, because it's a great question. Is this a business we have to be in? So I'm going to roll to take back to 2008 and 2009 on my Board of Directors meeting who said this lending business, do we need to be in this lending business? And I am very glad the Board made the decision to stick with it. This is a business that we have a very good back-end capability. We have a dedicated staff. It does a great job of picking up the phone, servicing customers. We have a great record of being up time with our clients. There is software, the hardware solving problem, solving solutions and knock with that (inaudible). We've never had major technical outages which a lot of our competitors have. Our biggest problem is the marketplace doesn’t know that yet. In terms of this being an important category, the one thing I feel extremely strongly about is the market of cloud computing solutions, which is sort of [fancy] term for not having a server in your closet, a tower on your desk with data, getting your data, your software and your hardware out of your premise and into a data center. This is not a space to Google and Amazon is going to playing because they don’t really handle or deal with small clients, they don’t want to know from. This is a market for us to take advantage of and we're going to take advantage of it and it’s hard to tell you exactly when this should be fixed. But my goal will be post some of these financings which take an unbelievable amount of management time effort, energy and resources plus some of the other issues we've had this year to dig in with the existing management team and refocus our efforts, I am very optimistic about the strategy and being in the right place with this particular segment of the market. I think (inaudible) everything. I think at the end of the day, business owners, they are going to run their business from a tablet. I don’t know if you notice this quick books and advertising based on (inaudible) tablet based desktop that’s going to take advantage and we can complete with them because we actually provide the service and they don’t. So appreciate question.

But, I mean, I certainly don’t in any way to perform want to convey the sense that it would be a good idea to have a diversified platform. We know that in the long run you are not going to be able to make profit margins, (inaudible) business, but I guess, what I am hearing from you is, if it turns out for whatever reason the cloud computing can said to be a pretty competitive place and then just a profit margins are hard come by that you perceive this as the entrée to small business then leave them into doing things (inaudible) and they are more profitable.

100%, I mean our payroll was in the cloud, our insurance payment is in the cloud, payment processing, the data, that business owners want from payment processing that comes in through their websites or their registers, the POS system, they are going to want that in the cloud. So it’s a big market, it’s a big trend, it’s a big opportunity. There is a private equity in the market called Endurance that did roll up on the lot of companies similar to ours. The talk on that rollup is huge multiples, I mean high single digits. So we’ll get it right.

I appreciate it. Have a good evening.

Thank you. And at this time, I see no further questions in the queue. I’d like to turn the call back over to Barry Sloane.

I want to thank everybody for joining the call and listening in. We have a lot of listeners today and we really appreciate the interest in our company. We look forward to reporting our fourth quarter results and look forward to further execution of our strategy over the long term. Thank you very much.

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program, and you may all disconnect. Have a wonderful evening.