Sterling Bancorp Moves Forward with Sale and Dissolution Plans

Sterling Bancorp Moves Forward with Sale and Dissolution Plans

Sterling Bancorp, Inc. (NASDAQ: SBT) has made significant strides in reshaping its future. Recently, the holding company of Sterling Bank and Trust, F.S.B. announced a definitive stock purchase agreement with EverBank Financial Corp. This agreement marks a turning point for Sterling as it pursues the sale of Sterling Bank for an impressive cash consideration of $261 million.

Strategic Acquisition and Shareholder Approval

The sale is contingent on several factors, including the approval from regulators and the shareholders of Sterling. Recently, the board of directors unanimously approved the transaction, indicating confidence in the deal, which is projected to close soon. Notably, family trust trustees holding nearly 38% of Sterling's common stock have committed their votes in favor of this significant transaction.

Mortgage Loan Purchase Agreement

As part of the financial maneuvering surrounding the sale, Sterling Bank has reached a crucial mortgage loan purchase agreement with Bayview Acquisitions LLC. This agreement facilitates the transfer of the Bank's residential tenant-in-common mortgage loans, demonstrating active steps taken to streamline operations before the merger completion.

Plan of Dissolution Following Sale

In conjunction with the bank's sale, Sterling Bancorp is also moving forward with a Plan of Dissolution. Under this plan, post-closing, the company intends to wind down operations quickly while adhering to Michigan law. This strategic move aims to optimize returns for shareholders, who are expected to receive cash distributions in two stages from the proceeds of the bank's sale.

CEO Insights on Strategic Decision

Thomas M. O’Brien, the Chairman and CEO of Sterling Bancorp, remarked on the extensive evaluation process that led to this pivotal decision. The board has worked closely with financial advisors, exploring various strategic routes while considering the challenging banking environment shaped by multiple market disruptions.

Market Context and Future Outlook

The banking landscape has shifted significantly since the turmoil observed in 2020 and again in March 2023. Following these events, Sterling had to reassess its operational strategies in light of increased costs and the complexities of independent operations. The board ultimately determined that merging with EverBank represented the most viable path forward, aligning with their financial aims and minimizing risks.

Regulatory Approvals and Future Operations

Upon completion of the sale, Sterling Bank will merge with EverBank, which will operate the bank's branches. Customers can rest assured that all existing deposit accounts will maintain FDIC coverage, and loan servicing will transition smoothly to EverBank’s platform.

Details of the Purchase Agreement

The defined terms within the stock purchase agreement highlight that EverBank will buy all of Sterling Bank's capital stock for $261 million. Following this acquisition, Sterling will cease to exist as a separate entity. The agreement also includes stringent conditions to ensure the stability of Sterling's operations leading up to the sale.

Conclusion and Next Steps

Sterling Bancorp is optimistically moving forward as it seeks to finalize this transformative agreement. Shareholders will be called to support not only the sale but also the adoption of the Plan of Dissolution in an upcoming special meeting. This efficient and decisive approach underscores the company's commitment to aptly handle its future while providing value for its shareholders.

Frequently Asked Questions

Q1: What is the sale price of Sterling Bank?

The sale price is set at $261 million, which EverBank Financial Corp will pay for the bank's stock.

Q2: When is the anticipated closing date for the sale?

The sale is expected to close in the first quarter of 2025, pending regulatory approvals and shareholder votes.

Q3: What happens to existing deposit accounts after the sale?

All existing deposit accounts will continue to enjoy FDIC coverage as customers of EverBank following the merger.

Q4: How will shareholders be compensated post-sale?

Shareholders are likely to receive distributions in two stages, primarily from the proceeds of the bank sale as per the Plan of Dissolution.

Q5: Who is advising Sterling Bancorp on this transaction?

Keefe, Bruyette & Woods acted as the financial advisor while Arnold & Porter Kaye Scholer LLP served as legal advisor for the company.

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