Strategic Investment Shift: Patriot Financial Partners Strengthens Ties with NewtekOne
Patriot Financial Partners Expands Its Stake in NewtekOne
Patriot Financial Partners, L.P. has made a significant move in the investment world by exchanging its convertible preferred shares in NewtekOne, Inc. for common stock. This strategic decision reflects a stronger commitment between the two firms and underscores confidence in NewtekOne's future potential.
Details of the Exchange Transaction
In a private placement transaction, Patriot received 2,307,692 shares of NewtekOne’s common stock in exchange for 20,000 shares of series A convertible preferred stock worth $20 million, along with an additional $10 million cash investment. The preferred stock was originally issued to Patriot but will be relinquished in this exchange. With this transition, Patriot is boosting NewtekOne’s common equity, enhancing its capital structure significantly.
The Capital Gains from the Transaction
This transaction is poised to enhance NewtekOne's common equity tier one capital (CET1 capital) by $30 million, increasing it from $256 million to a projected $286 million. Pro forma analysis also shows that when coupled with prior financing solutions, NewtekOne's tier one capital will reach $335 million, alongside a tangible book value per share of approximately $10.74. This financial maneuver is essential for maintaining the company's competitive edge in the market.
Leadership Perspectives on the Transaction
Barry Sloane, NewtekOne’s Chairman and CEO, expressed optimism about this partnership, highlighting the significance of having an institutional investor like Patriot who understands the company's business model. He appreciated the long-term commitment, noting that Patriot has held a presence on Newtek Bank's board of directors, which adds further depth to their collaboration.
Patriot's Commitment to NewtekOne’s Vision
Kirk Wycoff, Patriot's Managing Partner, shared his excitement regarding this investment. He acknowledged the operational success of NewtekOne since its transition to a financial holding company in early 2023, expressing confidence in the company’s strategy focused on technology and operational efficiency.
The Industry Context and Future Outlook
The bank and financial services landscape is evolving rapidly. NewtekOne's strategic focus on technology and efficiency positions it to lead in a dynamic environment. As banks increasingly embrace innovation, NewtekOne is setting a standard for operational models that could inspire the industry.
About Patriot Financial Partners
Founded in 2007, Patriot Financial Partners is a growth equity firm that provides capital and strategic support across various financial services sectors in the U.S. The firm's cumulative investment portfolio has now amassed $1.3 billion across 89 transactions, highlighting its pivotal role in the financial sector.
About NewtekOne, Inc.
NewtekOne, known as the "Business Solutions Company," is a financial holding company that offers comprehensive business and financial solutions through its various subsidiaries. Since its inception, NewtekOne has provided services aimed at enhancing operational efficiency and profitability for independent business owners across the nation.
Frequently Asked Questions
What transaction did Patriot Financial Partners conduct with NewtekOne?
Patriot exchanged its 20,000 shares of convertible preferred stock for 2,307,692 shares of common stock and made an additional investment of $10 million.
How will this transaction benefit NewtekOne?
This deal increases NewtekOne's common equity tier one capital, enhancing its financial stability and growth potential.
Who are the key executives involved in this transaction?
Barry Sloane, Chairman and CEO of NewtekOne, and Kirk Wycoff, Managing Partner of Patriot Financial Partners, are instrumental in this investment decision.
What is the background of Patriot Financial Partners?
Established in 2007, Patriot focuses on growth equity investments in the financial services sector, with significant capital invested over the years.
What does NewtekOne specialize in?
NewtekOne provides a range of business and financial solutions to independent business owners, focusing on efficiency and profitability.
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