DEFA14A: EverBank to Acquire Sterling Bancorp's Banking Operations for $261 Million

Sterling Bancorp, Inc. announces a definitive agreement for EverBank Financial Corp to acquire Sterling Bank and Trust, F.S.B. for $261 million, leading to a merger with EverBank, National Association and the eventual dissolution of Sterling Bancorp.

Summary

• Sterling Bancorp, Inc. has entered into a definitive Stock Purchase Agreement with EverBank Financial Corp, where EverBank will acquire all outstanding shares of Sterling Bank and Trust, F.S.B.
• The purchase price is a fixed $261 million in cash.
• Following the acquisition, Sterling Bank and Trust, F.S.B. will merge into EverBank, National Association, with EverBank, National Association as the surviving entity.
• Sterling Bancorp plans to hold a special meeting of stockholders to approve the Purchase Agreement and related transactions.
• Key conditions for closing include shareholder approval, regulatory approvals, and the absence of legal impediments.
• EverBank's obligation to complete the transaction is contingent on the sale of Sterling Bank's tenant-in-common loans to Bayview Asset Management and the maintenance of deposit balances.
• The agreement includes a termination fee of $9,135,000 payable by Sterling Bancorp to EverBank under certain circumstances.
• Trustees for K.I.S.S. Dynasty Trust No. 9 and K.I.S.S. Bank Stock Trust, representing approximately 38% of Sterling Bancorp's outstanding common stock, have entered into voting agreements to support the transaction.
• Sterling Bank and Trust, F.S.B. has also entered into a Mortgage Loan Purchase Agreement with Bayview Acquisitions LLC for the sale of its residential tenant-in-common mortgage loans, which had an aggregate principal balance of $372,880,890 as of June 30, 2024.
• Sterling Bancorp's board has approved a plan of dissolution, subject to shareholder approval, which will involve distributing remaining assets to shareholders after settling debts and obligations.

Sentiment

Score: 7

Explanation: The document outlines a strategic acquisition and dissolution plan, which is generally viewed positively by investors. The deal provides shareholders with immediate value and reduces risk for the acquiring company.

Positives

• Shareholders owning approximately 38% of the company have agreed to vote in favor of the deal, increasing the likelihood of approval.
• The sale of the tenant-in-common mortgage loans to Bayview Acquisitions LLC will simplify the balance sheet of Sterling Bank and Trust, F.S.B.
• The all-cash transaction provides Sterling Bancorp's shareholders with immediate value.

Negatives

• Sterling Bancorp will incur a termination fee of $9,135,000 if the agreement is terminated under certain circumstances.
• The deal is subject to various regulatory approvals, which could potentially delay or prevent the transaction from closing.
• The agreement is contingent on the sale of Sterling Bank's tenant-in-common loans to Bayview Asset Management, which introduces execution risk.

Risks

• Failure to obtain shareholder or regulatory approvals could prevent the transaction from closing.
• A material breach of the agreement by either party could lead to termination.
• Changes in laws or regulations could negatively impact the transaction.
• The average daily closing balance of the Banks deposits (excluding brokered deposits) for the monthly period ending on the last day of the month before closing must not be less than 85% of the average daily closing balance of such deposits for the monthly period ending on July 31, 2024.

Future Outlook

The document outlines the steps for Sterling Bancorp's dissolution and distribution of assets to shareholders after the acquisition and satisfaction of all liabilities.

Industry Context

This announcement reflects ongoing consolidation trends within the banking industry, where larger institutions acquire smaller banks to expand their market presence and customer base.

Comparison to Industry Standards

• The acquisition of Sterling Bancorp by EverBank is similar to other recent bank acquisitions, such as the merger of Flagstar Bancorp and New York Community Bancorp, in that it involves a larger institution acquiring a smaller one to expand its footprint.
• The purchase price of $261 million is within the typical range for community bank acquisitions, although the specific multiple depends on Sterling Bank's financial performance and asset quality.
• The tenant-in-common loan portfolio sale to Bayview Acquisitions LLC is a common practice in the banking industry to reduce risk and improve capital ratios, similar to how other banks manage their asset portfolios.

Stakeholder Impact

• Shareholders of Sterling Bancorp are expected to receive a distribution of assets after the acquisition and settlement of obligations.
• Employees of Sterling Bank and Trust, F.S.B. may be affected by the merger with EverBank, National Association.
• Customers of Sterling Bank and Trust, F.S.B. will become customers of EverBank, National Association.
• The acquisition may impact suppliers and creditors of Sterling Bancorp and Sterling Bank and Trust, F.S.B.

Next Steps

• Sterling Bancorp will hold a special meeting of stockholders to approve the Purchase Agreement and related transactions.
• The parties will seek regulatory approvals from the Federal Reserve Board and the Office of the Comptroller of the Currency.
• Sterling Bank and Trust, F.S.B. will sell its residential tenant-in-common mortgage loans to Bayview Acquisitions LLC.
• Following the acquisition, Sterling Bank and Trust, F.S.B. will merge into EverBank, National Association.
• Sterling Bancorp will file a certificate of dissolution with the Michigan Department of Licensing and Regulatory Affairs.
• Sterling Bancorp will distribute remaining assets to its shareholders after settling debts and obligations.

Key Dates

Keywords

acquisition, merger, banking, stock purchase agreement, dissolution, regulatory approvals, shareholder approval, mortgage loans, EverBank, Sterling Bancorp