Good morning, ladies and gentlemen, and welcome to the Newtek investor and analyst call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. If anyone requires assistance during this conference, please press star then zero on your touchtone phone. I would now like to turn the conference over to your host, Bobby Sloane. I'm sorry, Barry Sloane. Please begin, sir.
Thank you. Bobby's a nice name, too, but I appreciate that, operator. Good morning, everybody, and thank you for joining at this early hour. Obviously, we scheduled this a little bit late and didn't want to interfere with other earnings calls. We appreciate all the investors and analysts attending at a 7:30 Eastern call. The primary reason, obviously, for the call is we announced last night that Newtek Business Services Corp entered into an agreement to acquire National Bank of New York City, a watershed and exciting moment in time for Newtek Business Services Corp. The thrust of today's call will be to talk about that acquisition, explain its purpose, and give the rationale for it. Before we get into the data, the information on the call, I'd like to offer a few thanks to Keefe, Bruyette & Woods, our advisor on the transaction.
I'd also like to thank Piper Sandler, who represented the seller, for bringing us the transaction. I'd like to also thank our expert legal team of Sullivan & Cromwell, Eversheds Sutherland for being helpful. FinPro and advisor, helping us structure and model what the new entity would look like. In-house at Newtek, our legal team, our accounting team, managerial team, have done a terrific job, along with our board, in analyzing the benefits of this particular transaction. We're extremely excited to announce this particular transaction, and I will add, equally excited to talk about our earnings call next week, where we will release earnings on the 10th and report to investor analyst community on the 11th. Very excited about our upcoming earnings. We've had a really solid first half of the year and are set up for a great second half of the year.
For those of you that are following along, the presentation is hung on our website, NewtekOne, newtekone.com, in the investor relations section. I'd like to point everyone's attention to slide one, which is a note regarding forward-looking statements, and to proceed forward to slide number two. Many of you today are not familiar with Newtek Business Services Corp. Obviously, the potential to become a bank holding company opens up a wide swath of new investors that typically, by rule or investment thesis, do not invest in BDCs but do invest in bank holding companies, banks. Obviously, a big institutional shareholder investment opportunity here, as well as people that are buying index funds. With that, I want to give you a little background on myself. My name is Barry Sloane, President, CEO, and Founder of Newtek Business Services Corp.
Newtek was founded in 1998 in a spare bedroom in a New York City apartment at 120 West 18th Street, apartment 4B. The three founders put $25,000 into an LLC. Thus began the Newtek story. The mission and thrust of Newtek in 1998 is the same that we have today. The goal was to provide financial and business solutions to this very large, underserved small and medium-sized business market and middle market of community of independent business owners in all 50 states. We welcome the opportunity to introduce myself, one of the three original founders. Newtek today is a publicly traded company on the Nasdaq, stock symbol NEWT. We are a business development corporation. My background is primarily, prior to founding Newtek, a Wall Street background, working in the mortgage and asset-backed securities arena, both as a professional trader, senior salesperson, managing two institutional sales forces.
I'd like to move forward to slide number three. A little more background on Newtek Business Services Corp. As I've mentioned, we've been publicly traded since September of 2000. We currently trade under the ticker NEWT on the Nasdaq. Important to note, Newtek has persevered through several economic cycles and market conditions. Two of the most devastating economic conditions in the last 50 years being the 2008, 2009 credit crisis and the recent COVID-19 pandemic. Important to note, we've consistently been able to adapt to changing market conditions. We always have a forward-looking view, and management has consistently positioned the company for success. One of the primary reasons for making this acquisition, and potentially subject to regulatory approval and shareholder vote, becoming a bank holding company, owning a bank.
It's important to note that we converted to a BDC in November of 2014, and prior to that, we were a 1933 publicly traded C-Corp. If you go back to September of 2000, which was our initiation into becoming a public company, we did a reverse merger in September of 2000. Reverse mergers, for those youngsters on the phone, are today's version of a SPAC. I think it's just important to note that historically, we have done things that at times people look at and say, "Why are they doing that? I don't understand it. It doesn't make sense." That's why we're having this call today.
When we converted to a BDC in November of 2014, I have very vivid memories and recollections of investment banks, analysts, and investors saying, "You don't make sense as a BDC. That will never work. No one's going to understand you."
When we did our re-IPO in November of 2014, we were very thankful and appreciative of JMP Securities and Ladenburg bringing that deal out. I will remind everybody, in order to get that deal done, we traded at approximately a 17% discount to NAV, and that was not including the underwriting fee. Once again, very few people thought Newtek made sense as a BDC. They said, "No one's going to understand it," because we didn't look like any other BDC. We don't look like any other BDC today. I will note and comment that recently, and hopefully today, we'll be back trading above two to one to NAV. That's a multiple that most BDCs don't accomplish. I'm not even sure if the bellwether Main Street has ever traded above two to one .
I think it's important to note Newtek has achieved above average total returns over 10 years. I'll call everyone's attention to one of my favorite slides on page 19, which talks about our historic returns, which we will go over. Important also to note that we are reaffirming our 2021 annual dividend forecast with a midpoint of $3.15 a share. We've totally paid out $1.20 per share in the first six months of the year. With our forecast, which has to be approved by the board of directors, we will have $1.95 remaining through the third and fourth quarter if the board approved those dividends and our forecast stays intact. We are reaffirming that forecast as of today. I would note that as of today, August the 3rd, you've got five months to the end of the year. $1.95 hold for five months, pretty attractive.
We also have looked at our business. Our pipeline looks terrific for Q3, Q4, and actually exceeding into next year. We've made some nice changes transitioning out of our PPP business back into our full-scale lending business, and we're very excited about our future. We're excited about our earnings call next week, and we look forward to talking more about the current transaction and focus of today as well as our earnings call next week. On slide four, we are announcing the acquisition of National Bank of New York City. This is the primary reason for the call today. We've entered into an agreement to acquire NBNYC, which is an OCC federally regulated national bank. As of June 30th, approximately $204 million of assets for a $20 million purchase price.
I think it's important to note that at the time the deal closes, we believe that we'll have approximately $20 million of tangible book value. We've made the acquisition at 100% of tangible book value. I think it's important to note that we think from a long-term perspective, this is a good buy. We have signed that contract to make that purchase subject to regulatory approval as well as a shareholder vote. The name of the new bank, which could change, is subject to be named Newtek Bank and Trust. We're excited about that name. At the close, the existing BDC board will remain in place at the bank holding company, and we will replace the NBNYC board.
We have a full slate of potential board members with extensive bank board and bank officership experience to help guide us through the managing supervision and regulatory process of owning and operating a bank. Slide five. An important aspect to today's transactions, which is, what is the strategic reason for converting to a bank holding company and acquiring a bank? Newtek, clearly views itself that Newtek Bank and Trust will be a technology-enabled bank. We believe we can continue to provide great returns on a longer-term basis to our shareholder base in a publicly traded BDC model that although we've done great as a BDC. That's one of the questions. You were doing great as a BDC. Why are you doing this? Well, we believe from a longer-term perspective, the BDC model will give a superior financial and operational structure on a going-forward basis.
In today's market, which is rapidly changing, we've always got to be forward-looking. There's no more America Online. There's no more Sony Walkmans. There's no more payphones. You've got to look forward and make sure that you're best positioned. Just as we thought the best position in November of 2014 was to convert to a BDC, just as we thought our best position was to go off the Amex and go on the Nasdaq. Today, the board and the management team of Newtek Business Services Corp believes, subject to all the approvals, that we're better off in a superior financial and operational structure, taking all the assets that we've developed over the course of 20+ years into this particular model.
We believe that we're going to be able to offer the existing customer base very unique depository financial and business solutions that will be integrated into one single sign-on platform and touch point. We're announcing today that'll be called the NewtekOne Dashboard. The NewtekOne Dashboard will be further enhanced to include banking services. We currently have the right asset composition and strategic operating position to have Newtek Bank and Trust be and look like and act as the bank of the future. We currently have all the components. We believe this change will be accretive to shareholder value. Extremely important. We believe the change will be accretive to shareholder value and continue to produce the gains historically that all Newtek stakeholders, including shareholders, have been beneficial, as well as Newtek's alliance partners and commercial clientele.
We believe this transformation will significantly reduce our risk and dependence on the capital markets and certain third-party providers. It's important. We've done exceptionally well in our BDC structure and prior in an Securities Act of 19 33 operating structure. This change will broaden, enhance, and expand our tool chest to be able to grow the business. We're very excited about all the potential opportunities that this change could afford all of our stakeholders. Important to note that the technologies that we have created, NewTracker, our Secure File Vault, our NewtekOne Dashboard, similar to Live Oak Bank that's been able to develop technology and resell it, we believe Newtek will be able to license its technology banking as a service that's produced incredible results for our shareholders and our clients.
For example, look at what we were able to do in the PPP segment, which we'll talk about next week. The number of units processed, the dollars processed, the ease in which clients were able to use technology to give us the right tool set to be able to make those loans in compliance with SBA guidelines, as well as make things better for our staff internal to be able to serve our customers. We're really excited about talking about the NewTracker system, Secure File Vault, and our dashboard for banking. For those of you that look at these acquisitions and say, why is management doing this? A lot of managers and companies look to grow for growth's sake. We don't look to grow for growth's sake. The management team and the board have aligned our interests with shareholders.
Management and the board combined own about a 5% stake in the company. We're very aligned. We've managed the business from a long-term perspective over our two-decade-long history, and we don't grow for growth's sake. Moving to slide number six. Important. This acquisition is anticipated to unlock shareholder value. There's assets that we have that cannot be unlocked in a BDC structure. When I say it cannot be unlocked, I am appreciative of the fact that we've historically traded at great prices, at great multiples to NAV, particularly, through the course of this year. In a bank holding company structure and by owning a bank, we believe we're going to be able to unlock superior valuation for our high-performance model. BDCs typically are tethered to trade near NAV. They're typically tethered to trade at a dividend yield.
Financial holding companies and bank holding companies specifically, tech-enabled BDCs trade at attractive valuation multiples. These are the things that we'll be able to elaborate more when we issue our proxy prospectus to shareholders for the vote. On a pro forma basis, we believe the closest peers of Newtek Bank and Trust and Newtek Business Services Corp as a tech-enabled bank holding company would look like entities like Live Oak Bank, SoFi, LendingClub, and Square. Square, which obviously is viewed as a payments player and a lender, yesterday announced a large acquisition in the payment space. Obviously, people that know Newtek know we're in the payment space. We know we're a lender. Square was up, I believe, over 10% yesterday. Last week, LendingClub announced its earnings as it's operating as a first quarter as a bank and a bank holding company. Stock was up 50% in a day.
The market is extremely interested in the banking industry converting itself and repositioning itself, utilizing technology to be able to do the business and serve the market community in a much better way and manner. Branchless, brokerless, BDO-less type banking. Over time, the need in a bank holding company as well as owning a bank is going to reduce our need to constantly raise stock and constantly do common equity raises to support the balance sheet growth. It's very clear and should be clear to everybody on this call when you look at our dividend growth as a BDC, which was always paid out of earnings and reflected that way, that we're a growth company. We've grown our earnings. We've grown our dividend. This is a better structure for us to continue to grow going forward.
As we grow, this structure will allow us to retain earnings that are constrained in a BDC construct. It will also remove the 2: 1 debt-to-equity constraint that other BDC and RIC diversification tests that we have to adhere to. This transaction will give us significantly more flexibility, particularly the ability to grow without having to sell one share of stock, one debt amount to kind of maintain that 1:1 or 2:1 leverage ratio. Obviously, we're not currently near that 2:1. I think at the last quarter, we were a little bit 1.3±. In a bank construct, you can go up as much as 10:1 and still be considered well-capitalized. We also anticipate better relative valuation by broadening our set of comparable peers. You're looking at 80 to 90 publicly traded BDCs. You got 45,000 banks in the United States.
When you look at the potential box of investors that really, either by regulation or by desire, don't want to buy BDCs due to the AFFE test, the limitation, the inability of BDCs to be included in the S&P SmallCap 600 or the Russell 2000. This is going to broaden our base of pool of potential investors, particularly with institutions that typically do not invest in publicly traded BDCs. The regulatory framework should provide tremendous transparency and comfort to institutional investors. We're very excited about growing, looking at the structure. Once again, I want to repeat, subject to regulatory approval as well as shareholder approval. We believe that the bank holding company, financial holding company structure is going to be a much better structure for us to service our clients, to give our clients the ability to do digitized interaction from a banking perspective.
They get human interaction on demand. We're a 24/7 company. We don't see ourselves being like an Intuit, which is point and click and without any human interaction. We see ourselves a little bit in the middle. We've historically used technology to speed up mundane processes, to be able to reduce a human labor footprint, a real estate footprint. However, understand that in the Newtek model, whether you're borrowing money or getting a payment solution or insurance, there's always a human being to be able to help you, guide you through the process, and provide the absolute best solution for you. What we do well is have tremendous software capability to improve the client experience, to improve the worker experience, and our software products are very well integrated, which we'll talk a little bit more about when we get to the NewtekOne Dashboard.
Slide number seven. Why National Bank of New York City? Well, we're extremely appreciative of the Gelman family working through Sandler, and our advisors to make this acquisition. They've run a very clean, well-run bank. It has, I believe, one non-performing loan. I believe it's currently cash flowing. It's primarily commercial real estate-oriented, and this portfolio will give us very nice diversification. There's one branch. We will be taking over that branch and that facility, and that will be maintained as a New York presence. I would also like to add that our offices in Lake Success are only 10 miles-11 miles away from that particular facility. That'll give us some nice continuity. We expect that this acquisition will create the opportunity to be in the bank holding company and banking business without a big branch footprint, without a big human footprint.
There's 28 great employees at the bank that we're going to be bringing into our family. Without a significant expense structure. I think it's really important that this acquisition opportunity, although there's clearly going to need to be an integration into what we do in our lending operations versus what they do. Unlike other banks that are laden with very large portfolios, diverse portfolios, consumer portfolios, this particular acquisition will be easier than most for us to absorb. National Bank of New York City is a federally chartered institution, and they will take deposits to make loans in all 50 states. We envision that at the time this transaction closes, it will have a nice, strong capital base, approximately $200 million worth of assets. Once again, we're forecasting.
There's no guarantee that that'll be the exact size of the bank, plus or minus, with a $20 million capital base. Once again, we talked about the diversification of risk portfolio. Over the course of time, we will look to diversify the portfolio with other typical and traditional type banking products, which will enable us to get the kind of returns because their depository cost of funds with real retail core deposits will be significantly lower. We talked about maintaining New York as a key operating branch. We're very focused, obviously, in not having a big real estate footprint with big vaulted ceilings and marble. That's not where we're going, okay? We do see ourselves positioning ourselves clearly in the four major markets. From a state perspective, Texas, Florida, California.
We're excited about starting off with a nice, clean bank. With a great performing portfolio, not a big distraction to integrate into it. National Bank of New York City at a price of 100% of book value is terrific for us. I will also state that from a cyclical standpoint, with a flat yield curve, banks clearly are not trading at the upper end of their range. This is an opportunistic opportunity for a company like Newtek that pretty much functions as a bank today. We'll talk about what we have and we don't have to make this type of an acquisition.
Why now? Well, I guess on slide number eight, I already jumped the gun. We talked about the timing of buying into the banking system at a good point in time with a flat yield curve. Tech-enabled banks right now are clearly attracting interest. They're attracting capital. They're attracting attractive valuations.
Newtek, over its 21-year history, clearly has evolved, and we continue to desire to grow prudently while reducing risk and improving shareholder return and utilizing technology for customer acquisition, which we've been able to do through the NewTracker system, as well as enable our staff to serve clients to the highest level of service. We believe acquiring a nationally chartered bank is the next step in Newtek's evolution, subject to regulatory approval and shareholder vote. When we look at the market that we serve, that SMB middle-market client, according to the Small Business Administration, it's 9 out of 10 businesses in the United States fit this demographic. It's 30 million businesses. Most of the net new job growth is in this particular market, and it's 50% of non-farm GDP. We are very well-positioned to make this acquisition and to be in this particular space.
Some of you have heard me say, we're not a fintech, we're a Newtek. I draw that line just from the standpoint of a lot of fintechs are looked at. There's some magic sauce, there's some black box. You make a loan in 24 to 48 hours, boom, you're done. We use a full underwriting platform with banking standard credit memos, taking all available liens and guarantees, particularly from 350,000 and up. Our credit memos will average between 20 and 25 pages. We use technology to really cut out a lot of the expense, but we do not cut corners on credits. We're excited because we believe that our technology can lead the way, not only for Newtek, but other financial institutions to grow deposits, manage risks, and provide all forms of business services in an integrated manner to our particular target customer base.
We'll talk about when we talk about the NewtekOne Dashboard. We already have in place and are utilizing software and technologies that other people are imagining having. They're imagining creating them and potentially integrating them. That's really hard to do in the typical banking environment. We have that today. Over the course of time, Newtek will continue to further patent and commercialize its technologies for resale, similar to how we've put a patent on NewTracker. Slide number nine. The bank platform is expected to enhance Newtek's earnings trajectory, and we see a tremendous amount of synergies in what we'll call our pro forma corporate structure. For Newtek Bank, obviously, to create best-in-class digitized online banking and deposit products, whether they're from a mobile phone, a laptop, or a desktop.
Our view is to cater to independent business owners that have a tremendous amount of deposits and wealth in the United States. As we mentioned, we don't see ourselves as a point-and-click bank. We position ourselves right square in the middle between what a private bank would do and sort of banking on demand. When you look at slide number nine, these are the products that we currently offer to our existing client base. Slide number 10 is a visual image of what our mobile dashboard would look like. I think this is an important visual image because, once again, we would pick up the depository capability. We're already in the payments business, just like a Fiserv or a TSYS. We're in the payroll business like ADP or Paychex. We're in the insurance agency business like Marsh or Aon.
We make loans like all other banks do today. E-commerce analytics like GoDaddy. Designing websites like a Shopify. Document storage like an Azure or an AWS. Coming to Newtek, the development of the NewtekOne Dashboard, extremely important front end. This is the one dashboard for all your business needs. It's not only the ability to see it, visualize it, but with one single sign-on, have all these business solutions in one particular place. In addition, unlike an Intuit or a Quicken or a QuickBooks, where a lot of it's point and click and no interaction, you get human interaction in payroll with a customer service representative, in payments with a customer service representative, in lending with a customer service representative, and tech solutions as well. It's business and banking on demand. Extremely important.
Versus the traditional, let's go out for lunch, let's have dinner, let me come over for breakfast, let me come into your shop, let me meet you, let me talk about what we can do. Oh, we really like your deposits. No, that's not how Newtek plans on positioning itself in the market. We go to slide 11, you can see the wide array of tech-enabled business services that will complement the banking products. These are all solutions that exist today. Lending, payroll, payment processing, insurance, tech. They're all on our website. Go to newtekone.com. Check it out. They're all available. They're all offered. We don't have to imagine what the bank of the future is going to be. We already have it. We've got to position it. We've got to polish it.
We've got to get regulatory approval and a shareholder vote, then boom, we're already out the door. Slide number 12 is an overview of the proposed corporate reorganization structure of Newtek as a bank holding company. I want to note, it's not that dissimilar from Newtek as a BDC. Important to note, Newtek as a BDC, the portfolio companies, which will be situated at the bank holding company, have to do things on an arm's length basis with the BDC. Those types of transactions, contracts, arm's length, that exists today at Newtek. We give these portfolio companies a Newtek name, the Newtek brand, the access to the NewTracker system, as well as the overview of marketing and doing things sort of in a bundled format.
In the bank holding company structure, the portfolio companies of the BDC will be owned subject to regulatory approval at the bank holding company. The bank itself, an OCC chartered bank, will primarily have the lending activities. We will keep some of the lending activities up at the bank holding company, such as the conventional lending JVs and some of the other activities. We do today what most banks do in the lending area. I think that's really important to note. Particularly, we have the business solutions that banks struggle to deal with. We're going to be able to put that in place. What we don't have, the deposit-taking capability, as well as the regulatory and bank supervisory aspects. We have that covered as well. Let's go to slide 13. Expected management and board of the BDC and the bank holding company.
We see the current management and board of the BDC remaining post-acquisition. However, we do anticipate expanding the board and diversifying it to basically create more diversity, both with sex as well as race. Newtek has hired, and we put this press release out yesterday, Nick Young, a fantastic hire as Chief Risk Officer of the BDC. That press release went out yesterday at 4:10. Nick is expected to help manage all risk matters concerning the BDC and its controlled portfolio company. Nick historically, over two decades of experience as a Chief Credit Officer, Chief Risk Officer. He had these functions at smaller community banks. Did many acquisitions while he was there, and also had that position at Sabadell Bank and IBERIABANK, which is a $40 billion bank. Nick has had the experience in these particular positions, managing risk both for smaller banks growing to bigger banks.
He has really done it all. He's a tremendous acquisition for us. He will be Chief Risk Officer at the BDC. Starting yesterday, he's getting us perfectly positioned with all our policies and procedures, stress testing, dealing with diversifications, concentrations, setting up other products. We are hopeful and anticipate getting approved. We'll be able to hit the ground running. We're excited about Nick Young joining Newtek Business Services Corp. On slide number 14. This is an important slide for us because we anticipate a very well-capitalized performing institution. Obviously, we have limits to making forward-looking statements. Obviously, based upon the respect that we have for the regulatory bodies with respect to exactly the position of what the bank holding company would look like as a financial holding company as well as the bank.
However, we do believe that today we can talk about where Newtek Business Services Corp is. Net asset value, $366 million as of March 31. Using purchase accounting, that's the equity that's going to be split between the bank holding company and the bank. Gross assets, about $903 million. When you look at the acquisition of National Bank of New York City, which we anticipate a closing will be $200 million ± with $20 million ± of capital . You could look at an estimated balance sheet, which would be in excess of $1.1 billion. Maybe it's $1.2 billion, maybe it's $1.3 billion, maybe it's $1.4 billion. With a capital base distributed between the bank holding company and the bank of $366 million or greater. Clearly, this would be a very well-capitalized bank holding company and bank.
Important to note, this is what we will put into the proxy. We believe management, board, and the experts that we have spoken to, that this transaction will be accretive. Also, as a shareholder, we also believe it'll be a very compelling story to all investors. Current BDC investors, current shareholders of Newtek. As well as the new world of institutional investors and people that buy tech-enabled banks and bank holding company. Very exciting time. I want to point out once again, there's no assurance that this transaction will close, we believe based upon everything that we've done, we feel very good about it. We also feel good about the fact that we've done very well as a bank holding company. We'll do well in this structure.
We will be able to position ourselves, whether it's a 2008, 2009 crisis, whether it's a pandemic, whether we're a BDC, or whether we're a bank holding company. This company has persevered over two decades. It's got a great board. It's got a great management team. It's got a great thesis. It's in the right place at the right time. Slide number 15. We talk about our bank platform to facilitate the remixing of funding towards low-cost depository relationships. That's a mouthful. Basically, what we're saying here is in a bank holding company structure, we have the ability to broaden the deposit base with a liability stream. We still plan on using our commercial sources. Great. We still plan on doing securitizations. We still plan on doing debt at the holding company, whether it's senior, whether it's sub-debt.
This is going to give us a much broader opportunity to take advantage of markets without eliminating the old opportunities. When you look at the pie charts, obviously, with the current mix in the BDC structure, you have limitations to the debt-to-equity ratio of 2: 1 versus in a bank structure, and I'll use this as a round number, 10: 1. In addition, as you grow, and I make no bones about it, and we'll see this on slide number 19, we're a growth company. You can't fight that. We are a growth company. Historically, we've grown our dividend, we've grown our earnings, we've grown our balance sheet. We're not saying we're static. Okay? We are not your granddaddy’s BDC, dividend only, without a lot of price movement. It trades at a discount back up to NAV, everyone's happy.
That's not what Newtek has done as a BDC. I think that when you look at the shifting and the opportunity as a financial holding company, particularly multiple years out. The ability to grow the depository base, the ability to offer more services to clients, very, very valuable. In addition to that, once again, very important, we've got these estimated weighted average costs. These do not include the equity that has to be raised every time because you can't retain earnings in a BDC structure. When you add the equity in, these costs go higher. When you add the fact that you're doing maybe baby bonds or BDC debt, higher. We believe that we will be able to diversify, broaden the base, have a lower cost, which will be very useful and give us tremendous flexibility. Slide number 16. The approval process.
We are now working on our application with the federal banking regulators and the SBA. We're required to file a proxy statement to obtain shareholder approval. I want to once again thank our tremendous advisory team. Sullivan & Cromwell, Eversheds Sutherland. KBW, Keefe, Bruyette & Woods, our investment bank. From a regulatory perspective, FinPro. Credit review evaluation of the National Bank of New York City portfolio Valuant. An important great advisor to the company, Michael Rose, President and CEO of Metropolitan Capital Bank & Trust. Our next steps. Finalize application for regulatory approvals, seek shareholder approvals, and obtain the final regulatory approvals. We estimate this will take between six and 12 months. I also want to point out one other thing, and that is with respect to returns and taxability.
Obviously, with the current tax structure that we have in the U.S., capital gains and capital appreciation, which obviously shareholders of Newtek have gotten a lot of value out of, clearly at a lower tax rate than typically the majority of the ordinary income off of dividends. Dividends that have historically come up from the qualified businesses are taxed and come at from a preferential perspective. I think it is important to note that on a tax-adjusted basis, capital gains, lower tax rate, and obviously in the current environment, we're all trying to guess where the tax system is going to go. We think this is a very good structure for all of our shareholders. Slide number 17. Important slide. Long-term strategic considerations. Once again, why are we doing the acquisition, and how does this facilitate and accelerate Newtek's long-term visions?
We have been in business as a publicly traded company 21 years, 23 since its inception. We believe a bank structure will allow us to continue to grow prudently and reducing risk at the same time. Real important. Also note, we have operated in a regulated environment. The SBA regulates us through our SBLC. Historically, we owned and operated 16 certified capital companies under state regulation. We have regulations from Visa, MasterCard. We have regulations from state insurance agency. It's not to say that bank regulations won't be a higher bar for us to get to. With the addition of Nick Young and the talented team at Newtek, and we have tons of bankers that are currently in position at Newtek.
Such as Peter Downs, our Chief Lending Officer and President of the SBLC, who has a great track record prior to coming to Newtek at Citibank and European American Bank and many others. We believe that the bank holding company structure is a better structure. Once again, not to say that the BDC structure didn't work, but going forward, this is a better structure for all of our stakeholders with respect to reducing risk and enhancing shareholder returns. Our loan origination system is already in place. Uses a very robust underwriting platform with great control. This is scalable and it's going to be much more helpful to all of our stakeholders in a bank holding company platform. Our existing technologies can be leveraged to grow deposits, manage customer risk, and provide a full suite of solutions to SMB and middle-market companies.
We're real excited and what we see is a change in trends in how people are going to bank in the United States and borrow money and have their business solutions delivered to them, and we believe we can take advantage of that. The NewtekOne Dashboard, real important. What is this Dashboard? Why is this going to be different and special from other entities? Well, typically, when you bank, you see your loans, you see your deposits. Well, with the NewtekOne Dashboard, you'll be able to go make payroll, see payroll, right on the Dashboard. With the NewtekOne Dashboard, you'll be able to see your Visa, Mastercard statistics. Visa, Mastercard, American Express this day this year, this day last year. This quarter this year, this quarter last year. You'll be able to see your Google Analytics or your website.
How active your website is performing on a daily, weekly, monthly basis. Unique visitors, total visitors, time on the site, bounce rate, all that on the dashboard. Very important. Subject to regulatory approval. Document storage. We do that today. When you get a loan from Newtek, all your documents go into our Secure File Vault. We keep them there for customers, and they can go to that vault 24 hours a day, seven days a week. What's in that vault? What can be in that vault? Insurance policies, real estate leases, operating agreements, organizational documents, secretary certificates, buy-sell agreements, all stored for the business owner right there. When you look at the view from the customer's perspective, one single sign-on, one dashboard for all their business needs right there. We don't have to imagine this. We have these components currently broken out individually. Very attractive.
This we envision to be available and anticipate mobily, laptop, or desktop. We believe we've got going into the transaction, and obviously this is a forward statement that can't be relied upon, an optimal balance sheet and revenue mix for a tech-enabled bank. I mean, you look at our portfolio today, biggest geography I think is 11% and then declining. Biggest SIC code, 8%, then declining. $180,000 average balance of senior secured uninsured participation certificates. Look, particularly in the pandemic, being diversified, fantastic. I mean, you really didn't want to have a lot of certain states that were shut down or a lot of certain industries that were punished. We were well-positioned based upon diversification and being in a bank holding company and bank structure we believe will further get us there. Looking at Newtek's risk profile and dependence on capital markets, that's not going away.
Now we'll also be able to get core retail deposits, more stable, lower cost, and able to use that funding instead of selling additional shares in a BDC structure to continue to maintain those ratios. We're very excited about commercializing a technology that we've used to resell to others and unlocking a tremendous amount of value that's currently in the BDC that is not recognized. Going to slide number 18. In summation, we believe we'll continue subject to regulatory approval, board approval, pay dividends to the bank holding company consistent with bank holding company typical payout ratios. I think that's important to note. I just want to make a statement. We don't anticipate leaving the dividend business, okay. I'm a shareholder. I like dividends. However, this structure is a better structure and gives us more flexibility going forward.
The bank holding company will allow us to retain earnings to fund growth, not always selling shares. Providing depository services to a large database of clients that's in the tens of thousands currently. To create and deliver state-of-the-art NewtekOne Dashboard that we talked about. The single sign-in. The dashboard that's available for all your business needs. Get rid of the 2: 1 BDC leverage cap. We believe at Newtek Bank and Trust, you can bank with us and you can trust us. We're also excited about when you look at comparables. There's four to 5,000 banks in the United States versus 80 to 90 publicly traded BDCs. That was very helpful with respect to ultimate valuation and potentially ultimate exit one day. Dependency on selling additional shares. We will not be as dependent on constantly going back to the equity markets.
We're currently utilizing our branchless, bankerless, BDO-less existing operating structure. We will have bankers. There just won't be an army of them. We will have branches. The footprint will just be small, elegant, and high quality. Very valuable. Once again, important to note, Newtek's management and board are aligned with existing shareholders. In this structure, we should be eligible for the Russell 2000 and other various indices and ETFs, and the company hopes to appeal and anticipates increasing its institutional following and broadening its base. Important to note, I want to reflect back on this. We had a lot of questions when we converted to a BDC. How are you going to do that? That's not going to work. No one's going to understand it. It doesn't make sense. To the point where in our first re-IPO, we had to significantly discount our shares.
Within the first quarter, I believe first quarter of 2015, I think we were trading $17, $18, $19. Bounced right back up from $12.5. The reality of our history is we are unique, we are different, and we've proven to be able to persevere all different conditions. This opportunity enhances us, reduces risk, and enables us to grow. My favorite slide, number 19. I think at the end of the day, your track record is what you have in life. Now these numbers are as of July 12th. Our closing price isn't far away from that July 12th price. When you look at these numbers, and let's go to the 10-year return, okay? Well, a 10% dividend over 10 years does not get you that number. It doesn't get you 1,046. It just doesn't happen. There's a lot of price appreciation.
Why is there price appreciation? Growing revenues, growing earnings, price appreciation, preferential tax structure from capital gains, plus the dividend. I think it's really important to note that we believe that on a going forward basis, Newtek will be the same, except that in this structure, it could broaden its services, particularly with depository. It could broaden its ability to grow itself with more efficient capital structure. It enables itself to provide many more value-added services in a much easier presentable manner to the existing customer base of middle market and SMB clients all across the United States. I just want to highlight this. You just don't get these types of returns by just dividend only. It's dividend, price appreciation, and we believe we'll be able to continue that going forward. That is the end of our presentation. I really appreciate everyone hanging in there.
There was a lot of things to say. We are excited about our earnings call next week. I'd like to ask the operator to open it up to Q&A from any of the investors or the analysts that are on the call.
If you have a question at this time, please press star, then the number one on your touchtone telephone. If your question has been answered, or you wish to remove yourself from the queue, you may press the star key. Please hold for your first question. Your first question comes from the line of Robert Dodd with Raymond James.
Hi, guys. Good morning. First, on the timing question, I guess first, you mentioned obviously you've got to file a proxy and hold a shareholder vote. Do you have any preliminary indications for us on when we'd see the proxy with more details and when that shareholder vote about BDC-ing would occur?
Sure. I think that the proxy probably can be expected 90 days out, give or take. Obviously, we want to file our application. I think that's a two- to four-week type number, maybe a little longer. We want to get a sense from the regulators as to the thought process between what's in the bank holding company, what's in the bank. That obviously will help shape the pro forma and the projections that we'll be able to put into the proxy. I think we're probably looking at some time in the fourth quarter. In the meantime, at current forecasts, we've got $1.95 of dividends that have to be declared by the board. I say have to, provided that the earnings are there, and we anticipate them being based upon what I can see at this point, we reaffirm. I think we're in pretty good shape.
I do think we're going to have to wait a little bit to take a look at that pro forma. We've obviously looked at that internally, that's what convinced the board and the management team to be very supportive of the transaction.
Okay. Understood. Conceptually, on that pro forma, obviously no proxy, but do you have any even rough ideas you could give us? Obviously, as a bank holding company, taxpayer, which you mentioned, there'd be credit costs through the P&L, which BDCs obviously don't have. Then enhanced, being a bank is more expensive than BDC regulation. Do you have an idea of how much the total earnings or expense burden for those three components would be either as a % of earnings or as a % of assets? Holding company versus BDC structure?
Yep. Robert, I think you made three points. The first one I agree with, the second and third I don't. Let me go to the second one. The cost structure, particularly with respect to cost of capital. One of the drivers of doing this is the cost of capital will be less. I don't want to use the word significantly. It'll be less. Why will it be less? We don't have to constantly dilute ourselves with shares. We have the opportunity to use retail deposits, which are cheaper than commercial deposits. Let's talk about the expense of running a bank. At Newtek, at the BDC, particularly with all these regulated entities we have, we do not run an inexpensive BDC. As a matter of fact, we're internally managed. We're not paying the external fee out. Okay? Everything is very much aligned.
National Bank of New York City has a very lean cost structure. A lot of the lending expertise we already have. I don't really see major expenses getting laid into this. We made the statement, and it is a bold statement, that we believe this transaction is accretive to shareholders. Does that mean it's accretive in the first quarter or two? Not necessarily. From a long-term perspective, this is a win. We believe that even on an after-tax basis. It depends, listen, what your tax situation is. Is it taxable account, not taxable account? This is very beneficial to shareholders, which is why we voted for the transaction. Unfortunately, I cannot give you that forward number at this point in time, but we endeavor to do that in the very near term.
We also endeavor to ask the existing shareholder base and new shareholders to have confidence that this is a company that's able to do a really good job in different structures and be able to adapt to different regulated positions. In the BDC, we had significant regulations, particularly with how we run our BDC internally managed with the portfolio company. We feel pretty good about the transition. We feel pretty good about the benefits to shareholders. I happen to be one. There's no reason for doing this other than we believe this is a win for all.
Understood. Just to clarify, I asked about credit costs because obviously BDCs don't provision and banks provision under CECL accounting. Cost of capital understood it should be lower. Thank you for that.
Thank you.
Your next question comes from Paul Johnson with KBW.
Good morning, guys. Thanks for taking my questions. I'm curious. I guess first off, congrats on the acquisition and starting a new chapter in Newtek's story. I was wondering, does the conversion to a bank, does that change your target asset yield or any of the risk parameters for the SBA loans that you're underwriting going forward after the completion of the transaction?
I think that from just a pure asset perspective, I think that we will have a different mix of assets. Obviously, not materially going away from what we've been able to do as a core company. The flip side of that is the funding side of the business significantly better and the ability to lever our capital prudently, but in a higher manner than the BDC cap. I think that when trying to figure out where we're going to wind up in that pro forma, the viewpoint is, yes, asset mix will change, liability mix will change, and leverage will change. When you put all those vegetables in the soup, the board has looked at this and said, "Wow, this is a special opportunity." That's why we're doing it.
Got you. Thanks. Do you expect the acquisition to increase, like any other, I guess, internal business investments, either in the meantime or after completion, such as, I don't know, technology or any sort of compliance-related investments in the near term?
Yeah, I think that, obviously with National Bank of New York City and Nick Young coming on the board, we have certain things in place that will enable us to continue. Putting that aside, we're going to be a much larger organization. I could see us significantly upgrading certain software's and operating systems that are currently in place. We've analyzed it, and we don't think it's going to be a major change to the expense structure of what we anticipate.
Sure. Okay. Thanks for that. As far as the legacy bank loan portfolio, what are the plans after completion of the deal? Is it to allow the kind of legacy portfolio to run off over time, or are you going to be targeting similar assets? I guess what are your kind of big thoughts around the asset mix?
Well, we certainly like the portfolio and like the lower cost deposits that go along with it. It's been a good performing portfolio. I think that being able to serve our customers in a broader way versus the current lending tools that we have in the box, which are 7(a), 504, our non-conforming loan portfolio JVs, and our secured lines of credits by being able to do C&I lending. I think the bank will clearly have a focus on commercial. We do want to stay away from the consumer side for obvious reasons. I think the mix will change, but we feel very good about on a going forward basis, what I would refer to as the profitability, based upon the fact that maybe we wind up adding other assets that don't provide the returns, but the additional leverage and liability structure will clearly outweigh that.
Importantly, the ability to grow the entire brand of the company. I would point towards other technology-enabled banks like SoFi, LendingClub, and Square as organizations that we aspire to compete with and to be able to offer more fully encompassing products and solutions across the board.
Thanks for that. My last question was just around the dividend. I'm just wondering what investors should, kind of expect around the dividend long term. I guess something maybe that's slightly lower than where we are today, but maybe a more consistent fixed dividend because you're obviously retaining capital. Just do you or the board have any, I guess maybe preliminary thoughts around what you would like the dividend policy to look like over the long term?
Yeah, I think it's an important question, and I think that from our perspective, once again important to note over the course of our BDC life, dividend has grown significantly. Okay? That's because our earnings have grown significantly. In this structure, we're going to have, we believe, a greater opportunity to grow our earnings. Now, obviously in a RIC structure, everything's got to go out the window, right? The flip side of that is in order to grow, you have to keep selling shares. That mix has to factor into the cost of capital. We believe that we will look at other publicly traded bank holding companies. We believe subject to regulatory approval which we're hopeful will have the ability to get to the high end of that range because as we mentioned, we anticipate starting off as a very well-capitalized bank.
Go back to one of the slides that we talked about with $370 million of capital on a $1.1 billion, $1.2 billion, $1.4 billion. That look to put out not like a really skinny JPMorgan dividend, but a healthy dividend with capital appreciation. That dividend will be a qualified dividend, important to note, versus the typical BDC dividend that's ordinary income. Which people don't factor in. At the end of the day, current tax policy, you're at 37.38%, not including state or Obama tax versus 20% or 21%. All these things really do factor in. We've been very thoughtful in thinking about this, thinking about how this is going to affect investors. Once again, you go back and look at the returns that our investors have gotten. The capital appreciation has dwarfed the dividend.
In this structure, that probably will be the case as well. If we are short on the dividend, we hope that we'll be able to catch up fairly quickly. More importantly, these entities don't trade at BDC multiples. Live Oak Bank, north of 20x , 4x book. When you look at the Square, the LendingClub, et cetera, these tech-enabled institutions trade at significantly higher multiples with a very large institutional following as well.
Thanks for that, Barry. Yep, that's all from me. Congrats once again.
Thank you so much. I appreciate it.
You do have a question from the line of Harold Elish with UBS.
Good morning, Barry. Question as it relates to joint venture partners. One of your calling cards has been that you were a non-bank SBA lender. Does this change sort of the value proposition? Do you foresee any issues with existing co-branding that you're doing?
Harold, it's a good question. The answer is we don't. We have partnered with financial institutions historically, and they lend money, we lend money. The relationships that we have are based upon full transparency using the NewTracker system. I think obviously one of the tenets of those partnerships is to understand what you can do, what you can't do, but importantly, demonstrate to your partners on a real-time basis through transparency that you're not going over the line. No, we don't expect any major changes at all in those relationships. Could happen, but if that's the case, we'll wind up picking up others, which we've been able to do over the course of our history.
Great. Well, congratulations. That is all I had. Thanks very much.
Thank you.
Your last question comes from Scott Garfinkel with Raymond James.
Hey guys, congratulations. Really continues to be a fascinating story. You've obviously, from my eyes, have a unique headstart in this, what I call an elegant niche of the fintech space, with definitely a very unique and interesting moat. That comment being said, a lot of us sort of saw the way you guys were operating, really hitting the ball out of the park, and wondered what the next step might be. Some of us thought that perhaps a large bank might come in and try to court you guys for a liquidity event for you all. Obviously, you're taking a different route in that respect.
Assuming your success rates are where you're believing they will be, and many of us do, would you entertain perhaps a larger bank taking a look at what you put together and adding it to their portfolio at some point in the future?
Look, I think that from our standpoint, Scott, one of the points I brought out in the conference call is there's 45,000 banks out there in the market. A good chunk of them, I'm not saying those units, a lot of them are small, but you have a lot of very large, well-capitalized banks. Those banks are the ones that are struggling the most to develop the process, the technology to really be able to grow the franchise. I think from our standpoint, we've, I think, done a good job of executing on our strategy without the typical difficulties that you see in a very large organization. I think that the opportunity to acquire a national bank in New York City that is not saddled with. There's one branch, it's 28 employees.
Not a lot of expensive banker talent that you got to rework, massage, reposition, enables us to get in the game, integrate, prove concept, and potentially. We're not for sale, but we're a public company, and we do what's in the best interest of shareholders. When you look at the valuations that these enterprises are going at, the Square, the LendingClub, the Live Oak, the SoFi. This is why we look at this space and say, "Hey, we could take advantage of this in a multiple of ways." Reducing our cost of capital, reducing our risk, generating attractive returns for shareholders. Yeah, that's part of it. If people want to come along and pay that big proverbial premium, the board will look at it. I think it's important to note that we're not for sale.
Most of the time, to be frank with you, Scott, we appreciate the investors that we have. People, like in 2014, they look at us like, "Man, you must have three heads. Why are you doing this? You're up 90% for the year. Why are you doing this?" The reason why we're doing it is because we want to have long-term returns that we've always been able to generate. Obviously, can we guarantee that we're going to generate it in the future? Can we guarantee that we're going to perform like we've been able to perform? We can't. All we can do is give it 120%, embrace our staff, our partners that mutually we've been good to, and make it happen. I'm real confident about it. The board is. Our advisors feel the same way. I think this is a very exciting, terrific opportunity.
Frankly, in the meantime, we're going to produce great BDC results and dividends for our shareholders, and hopefully continue our track record.
Well, thanks for that. I definitely high five you on that. Sort of speaking to that whole new route. Now perhaps focusing on a NAV book valuation growth versus the dividend growth. Do you have any blue sky goals? This is not a proxy front run, but just, do you have any kind of growth rate bogeys you might be targeting in that NAV book valuation, EPS growth?
Yeah. Look, I would say this, Scott. I think that, we've got to get a plan in place with our advisors, work through them with the regulators. Look, we lend to small and medium-sized businesses, middle-market companies in all 50 states. Clearly an important market for the U.S. economy. Everybody saw that during the pandemic. I believe 30% of our portfolio is women and minority-owned businesses. We do the things that government, we believe, wants to have done in the marketplace. With that said, we believe that we've gotten historic great support from the SBA as a regulated lender, and we hope and anticipate we'll get that continued support from the banking perspective. The nice thing is. We're imagining that we start off with a well-capitalized bank.
That puts us in a good spot so that we'll be able to be a different bank than those 4,000-5,000 banks that we talk about that trade at 1.2 to book or book or at a discount to NAV. Just like way back when in 2014, when we raised our first capital lot at a discount to NAV, and we had to get out there, talk to people, tell people what we do. Even though it was a fairly small universe of BDC investors versus the investment pool of bank holding companies and publicly traded banks, we're proud of our performance. We've done really well.
People are going to have to get comfortable that we're going to be able to manage and navigate and produce those alpha returns in this sector that we produced when we were a Securities Act of 1933 company, as well as when we converted to a BDC.
Thanks very much for that. I think you certainly have the heads turned from the traditional banking perspective, and we're excited to see it unfold. Good luck.
Thank you. Appreciate it.
I would now like to turn the call back over to management for closing comments or remarks.
Sure. Operator, thank you very much, and for all of our analysts and investors, we clearly appreciate the opportunity to present. If you have any questions, please feel free to email them to Jayne Cavuoto , investor relations, or myself. Take a look at our website, take a look at our product set, and please tune into our conference call next week. We really look forward to reporting and delivering the types of results that everybody expects of Newtek Business Services. Thanks very much and have a great day. Thank you.
This does conclude today's conference call. Thank you for your participation. You may now disconnect your lines.