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Newtek Business Services Corp., a small-business lender and payment processor, has received approval from the Federal Reserve to become a bank-holding company and financial-holding company through its acquisition of National Bank of New York City. Newtek entered into an agreement to acquire the bank in August 2021. Approval of the acquisition is pending from the Office of the Comptroller of the Currency.
The Fed’s approval for Newtek to become a bank holding company is conditioned on several factors, including Newtek’s divesting certain portions of its technology portfolio within two years of becoming a bank holding company and agreeing to no longer be regulated under the Investment Company Act of 1940. Newtek anticipates the acquisition to close in January.
Newtek’s payment-processing subsidiary is an independent sales organization for several banks, including Westamerica Bank, Wells Fargo Bank N.A., Synovus Bank, Fifth Third Bank, N.A., and Elavon Inc., a wholly owned subsidiary of U.S. Bancorp.
As part of Newtek’s third-quarter results, the company announced that once the acquisition and the pending regulatory hurdles are cleared, the company will change its name to NewtekOne and rename National Bank of New York City as Newtek Bank, N.A.
“We look forward to our new role in the economy as a financial holding company and to further establish our corporate brand as NewtekOne,” Newtek chairman, chief executive, and president Barry Sloane said in a prepared statement.
