Northpointe Bank, a Michigan-based regional bank, filed to go public Thursday, in another sign that PE-backed IPOs are on the upswing.
Castle Creek Capital, a PE firm focused on community banks, originally paid $25 million for a 27% stake in Northpointe in 2019.
Private equity is starting to reengage with the public market in its search for liquidity for its portfolio companies. According to PitchBook data, PE-backed IPOs accumulated $41 billion in exit value last year—a strong comeback from 2023, with only $8.2 billion in exits.
“The Northpointe IPO represents another sponsor joining the backlog of PE-backed companies that have filed for an IPO,” said PitchBook PE analyst Kyle Walters.
Banks, in particular, are positioning themselves for a rebound on the public markets, driven by shifts in political and economic landscapes.
“There are assumptions with the new administration that there will be a permissible attitude on banking regulation. Publicly traded bank stocks and valuations were quite healthy, and regulations are favorable,” said Morningstar equity analyst Michael Miller.
Suryansh Sharma, a financial services equity analyst at Morningstar, added, “The banking sector is currently experiencing strong profitability. A scenario where rates remain high and the economy remains strong is ideal for banks. A confluence of these factors and strong sentiment has led to a rally in bank stocks. In our opinion, bank stocks are richly valued, thereby setting a conducive environment for smaller banks to go public and raise capital.”
Northpointe Bank, founded in 1999, offers a range of banking and home lending products.
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