Sterling Bancorp Advances with Sale and Dissolution Plans
Sterling Bancorp, Inc. (NASDAQ: SBT) is making meaningful progress in shaping its future. The holding company of Sterling Bank and Trust, F.S.B. recently announced a definitive stock purchase agreement with EverBank Financial Corp. This deal marks a pivotal moment for Sterling as it aims to sell Sterling Bank for a substantial cash amount of $261 million.
Acquisition Details and Shareholder Support
The sale depends on several key factors, including approvals from regulators and the shareholders of Sterling. Recently, the board of directors unanimously backed the transaction, showing strong confidence in the deal, which is expected to close soon. Notably, family trust trustees holding almost 38% of Sterling's common stock have pledged their support for this significant transaction.
Mortgage Loan Purchase Agreement
In preparation for the sale, Sterling Bank has struck an important mortgage loan purchase agreement with Bayview Acquisitions LLC. This agreement allows for the transfer of the Bank's residential tenant-in-common mortgage loans, highlighting proactive measures taken to streamline operations leading up to the merger.
Dissolution Plan Following the Sale
Alongside the bank's sale, Sterling Bancorp is also implementing a Plan of Dissolution. Under this plan, after closing, the company intends to wind down operations promptly while following Michigan law. This strategic move aims to maximize returns for shareholders, who are anticipated to receive cash distributions in two phases from the bank's sale proceeds.
CEO Perspectives on a Strategic Choice
Thomas M. O’Brien, the Chairman and CEO of Sterling Bancorp, shared insights about the thorough evaluation process that led to this important decision. The board worked closely with financial advisors, exploring various strategic avenues while navigating a challenging banking environment affected by market disruptions.
Market Overview and Future Projections
The banking landscape has undergone considerable changes since the disruptions seen in 2020 and again in March 2023. In light of these events, Sterling had to rethink its operational strategies due to rising costs and the challenges of functioning independently. After careful consideration, the board concluded that merging with EverBank was the most feasible way forward, aligning with their financial goals while minimizing risks.
Regulatory Approvals and Future Operations
Once the sale concludes, Sterling Bank will merge with EverBank, which will manage the bank's branches. Customers can be assured that their existing deposit accounts will maintain FDIC coverage, and the loan servicing will transition seamlessly to EverBank’s platform.
Purchase Agreement Details
The specific terms within the stock purchase agreement reveal that EverBank will acquire all of Sterling Bank's capital stock for $261 million. After this acquisition, Sterling will no longer operate as a separate entity. The agreement also includes strict conditions designed to ensure the stability of Sterling's operations leading up to the sale.
Conclusion and Next Steps
Sterling Bancorp is moving forward with optimism as it aims to finalize this transformative agreement. In an upcoming special meeting, shareholders will be called to support not just the sale, but also the adoption of the Plan of Dissolution. This decisive and efficient approach highlights the company's commitment to managing its future carefully while delivering value to its shareholders.
Frequently Asked Questions
Q1: What is the sale price of Sterling Bank?
The sale price is established at $261 million, which will be paid by EverBank Financial Corp for the bank's stock.
Q2: When is the expected closing date for the sale?
The sale is anticipated to close in the first quarter of 2025, subject to regulatory approvals and shareholder votes.
Q3: What will happen to existing deposit accounts after the sale?
All existing deposit accounts will continue to have FDIC coverage as they transition to EverBank after the merger.
Q4: How can shareholders expect to be compensated post-sale?
Shareholders are expected to receive cash distributions in two stages, primarily sourced from the bank sale proceeds in line with the Plan of Dissolution.
Q5: Who is advising Sterling Bancorp on this deal?
Keefe, Bruyette & Woods acted as the financial advisor, while Arnold & Porter Kaye Scholer LLP served as the legal advisor for the company.
