The short history of Arra Finance already includes some of the most significant moments a new operation can have.

The company specializing in subprime auto financing launched in spring 2022, then last summer gained new ownership with an asset management firm boasting lots of financial horsepower.

And now it’s poised to make an acquisition, as Arra Finance announced late on Wednesday afternoon that it has entered into a definitive agreement to acquire the auto-financing division of Crescent Bank, a New Orleans-based FDIC insured bank with approximately $1 billion in assets that has provided nationwide indirect auto lending since 1991.

According to a news release, Crescent will retain its branch and online retail banking platforms, as well as its commercial lending program, and Arra will become the servicer for Crescent’s $815 million auto loan portfolio.

The transaction is expected to close during the third quarter, and financial terms were not disclosed.

Arra Finance chief executive officer Kenn Wardle took Cherokee Media Group through the company’s journey, which started at NADA Show 2022 as Solera Auto Finance. Within two months, the company began building a portfolio from paper coming via dealers in 20 states.

Then last August, Obra Capital, an asset management firm with a specialized approach to alternative investing, announced a buyout of the finance company from Solera Corp., rebranding it as Arra Finance after it developed relationships with 6,000 franchise and independent dealerships across 44 states.

“When we initially started this platform back in March of 2022, it was a great place to start out our platform and get all the technology and all the processes in place and start building out the dealer relations,” Wardle told Cherokee Media Group.

“I was extremely glad to find a capital partner that has a level of expertise in the credit markets that Obra Capital has in the various assets that they invest in over time. It’s allowed us to design and ramp a plan in a controlled manner that’s prudent to building out our credit processes to something that we can then scale off of,” he continued.

Then on Wednesday came Arra’s major move with a well-established operator in the subprime auto financing space.

According to the news release, Crescent has originated more than $5.3 billion in auto loans nationwide during its 30-year history and $652 million in the last two years. This acquisition brings Crescent’s e-contracting, internal loan servicing and accelerated auto-decision capabilities to the Arra platform, alongside advanced analytics and additional fraud protection tools in underwriting and funding.

“With this transaction specifically, and why I’m really excited about it, it’s effectively taken my two-and-a-half to three-year strategic project plan from a technology and analytics perspective and advanced it to this year,” Wardle told Cherokee Media Group.

“Being able to acquire Crescent and the technology, the platform and the analytics that they’ve built up over the years puts me in a spot that I would never even have thought possible at this time last year,” he added.

As part of the acquisition, Arra will welcome approximately 180 new employees from Crescent, expanding Arra’s team by a factor of six. This group includes 24 new sales team members, who will support the deployment of Arra’s capital base and provide a consistent touchpoint for new and existing dealer customers alike.

The company said the new additions will continue to be primarily based in Carrollton, Texas, supporting a seamless operational integration while opening new pathways for opportunity, as enabled by Arra’s access to asset-backed financing solutions.

“With today’s announcement, we have rapidly advanced Arra’s growth trajectory, substantially improving our ability to be the premier financing partner for franchise and select independent dealers,” Wardle said in the news release. “After only six months in market, we are on track to outpace our growth targets by a number of years, and we have developed the platform capabilities necessary to deliver responses to credit applications in a matter of seconds.

“I look forward to welcoming our new team members as we bring our combined offerings to market and continue to streamline the car buying experience for dealers and consumers across the country,” he added.

Crescent Bank chairman Gary Solomon Sr. explained why the institution made this move to depart the auto-finance business after three decades.

“Partnering with Arra and Obra has ensured the talent, momentum and reputation Crescent has garnered over the years will continue to support the auto industry, as Crescent Bank shifts its focus to our core retail banking business,” Solomon said in the news release.

Crescent Bank also has significantly grown its online banking presence nationwide in recent years, particularly in its offering of certificates of deposits.

“This is a pivotal moment for Crescent Bank, as we refocus our investment strategy in support of our local New Orleans area community and nationwide customers alike,” Solomon added.

Meanwhile, the move bolsters the portfolio of Obra, which had approximately $5.8 billion in capital under management as of May 31. Obra provides investment products and solutions across insurance, multi-sector credit, asset-based finance and longevity investment strategies.

“Today’s announcement is a major growth milestone for Arra, and a testament to the opportunity in the auto finance market,” Obra president and CEO Blair Wallace said in the news release.

“With the capital structure and flexibility provided by Obra’s insurance company balance sheets, Arra has taken decisive and aggressive steps to meet the needs of dealers across the country and become a leading player in the subprime space. The business is capitalized for success in the long term, and we look forward to seeing what’s next,” Wallace went on to say.

Wardle conveyed similar sentiments to dealer clients during the conversation with Cherokee Media Group.

“The basic message to them is expect the best of both worlds,” Wardle said. “We’re in a pretty unique position where we can take the best processes from both our platforms and deliver high-quality decisions and customer service to our dealers and our consumers in an efficient manner.

“Obra Capital has a sufficient capital support to weather the economic headwinds that will happen in the future. I’m not trying to predict any kind of ups or downs in the near future. The capital support that we have from Obra will be sufficient for us to continue to be there for our dealer customers,” Wardle went on to say.