Newtek Business Services in Boca Raton, Fla., has agreed to buy National Bank of New York City as part of a plan to become a bank holding company.
Newtek said in a press release Monday that it will pay $20 million in cash for the $204 million-asset bank. The deal is expected to close in six to 12 months.
National Bank must have $20 million of tangible common equity on the closing data, according to the merger agreement.
“There is no doubt that our economy and financial system are demanding changes to the way services and solutions are offered to commercial clients,” Barry Sloane, Newtek’s president, chairman and CEO, said in the release.
“Newtek believes this acquisition and conversion to a bank holding company has the capacity to significantly reduce risk, provide enhanced shareholder value and provide greater flexibility to serve our business clientele in the future in ways we cannot under our current structure,” Sloane added.
The bank would operate as Newtek Bank & Trust. Sloane said he expects Newtek to hire more bankers over time.
The deal is expected to be accretive for Newtek’s shareholders over time.
Keefe, Bruyette & Woods, Sullivan and Cromwell, Eversheds Sutherland and Michael Rose of Metropolitan Capital Investment Banc advised Newtek. Piper Sandler and Silver, Freedman, Taff & Tiernan advised National Bank.