Patriot National Bancorp, the parent holding company of Patriot Bank, has signed a definitive purchase agreement with Hana Small Business Lending Inc. for its $490 million SBA portfolio.
The transaction includes the purchase of approximately $120 million of SBA 7(a) loans and servicing rights relating to a pool of $370 million in loans, and the assumption of two loan securitization vehicles, currently rated “AA+” (Hana SBL Loan Trust 2014) and “A-” (Hana SBL Loan Trust 2016) by Standard and Poor’s.
Total cash consideration is approximately $83 million with the assumption of approximately $41 million of liabilities. The transaction is subject to the satisfactory completion of certain due diligence requirements, purchase price adjustments at closing and the receipt of required governmental and regulatory approvals.
“This accelerates our desire to be in the SBA business on a large scale,” Richard Muskus Jr., president of the Stamford bank, told the Business Journal. “We started our SBA department in 2017, so it was very much in its infancy. Rather than grow organically, which is what we had been totally prepared to do, this will allow us to go from zero to 100 pretty quickly.”
The integration of Hana SBL into Patriot’s growing specialty finance category “delivers impactful market presence, product diversification and significant earnings accretion,” Patriot Chairman and CEO Michael Carrazza said.
Based in Los Angeles, Hana SBL was the third most active nonbank SBA lender in the nation last year, and one of the top 35 most active of all SBA lenders (among over 3,000 SBA lenders nationwide) as measured by the SBA 7(a)-approved face value of SBA 7(a) loans it originated and SBA-approved guaranteed dollars attributable to those loans.
Upon the closing of the transaction, the group will become part of Patriot’s SBA team and will be rebranded under Patriot’s name. The existing team will continue to operate from its base in Los Angeles and through its origination offices across the U.S.
Patriot’s SBA unit will oversee and service eastern U.S. markets and be based from Patriot’s Stamford offices.