Newtekone, Inc. · NASDAQ:NEWT
Newtekone — Newtek Business Services — Merger or Acquisition (August 2021)
23 slides from Newtekone's merger presentation, Aug 2, 2021
Slide 1: Newtek Enters into Agreement to Acquire National Bank of New York City
www.newtekone.com Newtek Business Services Corp. Nasdaq: NEWT Enters into Agreement to Acquire National Bank of New York City Investor & Analyst Call & Question and Answer Session August 3, 2021 Barry Sloane Founder, President & CEO bsloane@newtekone.com (212) 356-9550
Slide 2: Note Regarding Forward-Looking Statements
CONFIDENTIAL 1 Note Regarding Forward-Looking Statements 1 The matters discussed in this Presentation, as well as in future oral and written statements by management of Newtek Business Services Corp., that are forward-looking statements, including statements regarding our ability to close the pendin
Slide 3: Presenter Biography: Barry Sloane
CONFIDENTIAL 2 Presenter Biography Barry Sloane Barry Sloane President, Chairman, and CEO of Newtek CEO of Newtek Business Services Corp. (“Newtek”) [Nasdaq: NEWT], a publicly traded business development company (“BDC”), since its inception in 1998 Previously served as Managing Director of Smith Bar
Slide 4: Newtek Business Services Corp.
CONFIDENTIAL 3 Newtek Business Services Corp. 31Amount and timing of dividends, if any, remain subject to the discretion of the Company’s Board of Directors. Newtek has persevered through several economic cycles and market conditions, including two of the most devastating economic situations in the
Slide 5: Newtek to Acquire National Bank of New York City
CONFIDENTIAL 4 Newtek to Acquire National Bank of New York City 4 1. NBYNC to deliver $20mm of Tangible Common Equity at closing after special dividend of real estate property and excess capital 2. Newtek intends to apply for trust powers in connection with the Acquisition ACQUISITION STRUCTURE Acqu
Slide 6: Strategic Reasons for Converting to a Bank Holding Company
5 5 Newtek desires to continue to provide returns on a longer-term basis to its shareholder base and believes that a publicly traded BHC model would be a superior financial and operational structure on a go-forward basis Strategic Reasons for Converting to a Bank Holding Company & Acquiring a Bank N
Slide 7: Acquisition Anticipated to Unlock Shareholder Value
CONFIDENTIAL 6 Acquisition Anticipated to Unlock Shareholder Value 6 Becoming a BHC is intended to unlock superior valuation for Newtek’s high-performing business model BDCs typically trade near NAV (Newtek has historically traded at a premium), or based on a targeted dividend yield FHCs /BHC’s
Slide 8: Why National Bank of New York City?
CONFIDENTIAL 7 Why National Bank of New York City? 7 A Federally chartered institution enabled to take deposits, as well as make loans in all 50 states (we currently make loans in all 50 states)1 NBNYC to integrate into the Newtek infrastructure due to its size and strong capital base, and relativel
Slide 9: Why Now?
8 8 Why Now? Newtek has evolved during its 21-year history and desires to continue to grow prudently while reducing risk, and successfully utilize technology for customer acquisition and enable its staff to service clients1 Acquiring a nationally chartered bank is the next step in Newtek’s evolution
Slide 10: Bank Platform Expected to Enhance Newtek's Earnings Trajectory
9 Bank Platform Expected to Enhance Newtek’s Earnings Trajectory Significant Potential Synergies Anticipated in Pro Forma Corporate Structure SBA 7(a) and 504 Lending SBA Gain on Sale SBA Servicing Fees Factoring Income Conventional Lending Through JV Data Processing Merchant Services
Slide 11: Development of The NewtekOne Dashboard
CONFIDENTIAL 10 Development of The NewtekOne Dashboard™ 10
Slide 12: Newtek's Technology Platform
11 11 Newtek’s Technology Platform Wide Array of Tech-Enabled Business Services to Complement Banking Products1 Technology Solutions Merchant Solutions Infrastructure & Managed Cloud Security & Compliance Professional Services Disaster Recovery Business Software & Software Services WEB SOLUTIONS Eco
Slide 13: Current Structure and Pro Forma BHC Structure
NIA Insurance All Other Business Lines Current Structure NBL SBA 504 Funding NBC Receivables Financing SBL Loan Servicing ‒ BDC, publicly traded ‒ Consolidated BDC and NSBF ‒ All controlled portfolio companies are taxable and held as investments NBSC Newtek Business Services Corp. NCL Conventional L
Slide 14: Expected Management and Board of BDC/BHC
CONFIDENTIAL 13 Expected Management and Board of BDC/BHC 13 Newtek has hired Nicolas Young as Chief Risk Officer of Newtek Business Services Corp. Mr. Young is expected to help manage all risk matters concerning the BDC and its controlled portfolio companies Upon the closing of the Acquisition, it i
Slide 15: Anticipate A Well Capitalized Pro Forma Institution
14 14 Anticipate A Well Capitalized Pro Forma Institution Newtek's net asset value as of March 31, 2021 was $366,851,000 and gross assets at March 31, 2021 were $903,569,000, which the Company anticipates will form the capital base of the BHC and Newtek Bank & Trust The BHC and Newtek Bank & Tru
Slide 16: Bank Platform to Facilitate Remixing of Funding Toward Low Cost Deposits
15 Bank Platform to Facilitate Remixing of Funding Toward Low Cost Relationship Deposits Current Funding Mix (1) BDC Structure Illustrative Shift In Funding Mix(2) FHC Structure – 3-4 Years Out HoldCo. Notes 36% Credit Line: NSBF 11% Credit Line: Controlled Subs. 15% Securitization 38% Other Debt 20
Slide 17: Approval Process Update and Next Steps
CONFIDENTIAL 16 Legal: Sullivan and Cromwell, Eversheds Sutherland Investment Bank: Keefe, Bruyette & Woods Regulatory: FinPro Credit Review: Valuant Operational Advisor: Michael Rose – Metropolitan Capital Investment Banc The Company is required to file applications with the federal ban
Slide 18: Long-Term Strategic Considerations
17 17 Long-Term Strategic Considerations Acquisition Anticipated to Facilitate and Accelerate Newtek’s Long-term Vision Newtek has reached a point in its 21-year operating history where we believe a bank structure will allow Newtek to continue to grow prudently while reducing risk1 Newtek’s loan ori
Slide 19: Summary & Concluding Thoughts
18 18 Summary & Concluding Thoughts Newtek aims to continue to pay dividends as a Bank Holding Company (subject to regulatory approvals and anticipated to be consistent with other BHC payout ratios) Newtek converting to a Bank Holding Company is anticipated to allow it to: Retain earnings to fund gr
Slide 20: Proven Shareholder Value Creation
19 19 Proven Shareholder Value Creation Newtek’s Management Team Has A Track Record of Successful Growth Newtek aims to continue to produce shareholder returns in the BHC structure Total return(1) year to date through July 12, 2021 (including reinvested dividends): Current market capitalizatio
Slide 21: Appendix
APPENDIX Newtek’ Your Business Solutions Company” 20
Slide 22: National Bank of New York City Financial Highlights
21 21 National Bank of New York City Financial Highlights Financial Highlights (As of June 30, 2021, unaudited) Balance Sheet Composition Source: S&P Global Market Intelligence as of or for the quarter ended 6/30/2021 1) Annualized 2) PTPP = Pre-tax pre-provision income 3) Most Recent Quarter Total
Slide 23: Special Note Regarding Projected Financial Information
22 22 Special Note Regarding Projected Financial Information Projected financial information illustrates the effect of Newtek’s acquisition of NBNYC on our financial position and results of operations based upon management’s assessment of Newtek’s and NBNYC’s respective historical financial positi
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