Newtek Business Services Corp. (NasdaqGM:NEWT) entered into an agreement to acquire National Bank of New York City from certain shareholders for $20 million on August 2, 2021. Under the term, Newtek will acquire 0.0336 million shares of National Bank of New York City for $20 million subject to certain adjustments.

Post completion, existing business development company board and management to remain in the bank holding company, National Bank of New York City's board will resign and will be replace, National Bank of New York City's management will remain in place with additional hires. Nicolas Young will became the president and chief operating officer to National Bank of New York City. National Bank of New York City to be renamed as Newtek Bank & Trust, NA.

The transaction will be funded from debt, equity and cash on hand. Newtek will pay $0.2 million as a termination fee. The transaction is subject to approval from federal banking regulators and the U.S. Small Business Administration and Newtek shareholders to withdraw Newtek's election as a business development company.

Upon shareholder and regulatory approvals, and other closing conditions, Newtek will become a bank holding company that will elect financial holding company status. As of June 1, 2022, the shareholders of Newtek approved to withdraw its election as a business development company, and convert to a bank holding company, subject to regulatory approvals. The transaction is expected to close within six to twelve months.

Michael Rose of Metropolitan Capital Investment Banc, Inc. and Keefe, Bruyette, & Woods, Inc. acted as a financial advisor, Jeannette E Bander and Jared M. Fishman of Sullivan & Cromwell LLP and Eversheds Sutherland (US) LLP acted as a legal advisor, FinPro acted as a regulatory advisor and Valuant acted as a credit review advisor to Newtek. Silver, Freedman, Taff & Tiernan LLP acted as a legal advisor and Piper Sandler & Co. acted as a financial advisor to National Bank of New York City.