8-K: Sterling Bancorp Amends Proxy Statement Amid Shareholder Litigation Over EverBank Acquisition

Sterling Bancorp has supplemented its definitive proxy statement regarding its acquisition by EverBank following demand letters from shareholders alleging disclosure deficiencies.

Summary

• Sterling Bancorp is being acquired by EverBank Financial Corp for $261 million.
• Following the announcement, Sterling received demand letters from shareholders alleging deficiencies in the proxy statements.
• To address these concerns and avoid potential litigation, Sterling has voluntarily supplemented its disclosures.
• The supplemental disclosures provide additional details about the background of the transaction, including the involvement of KBW and Hovde Group as financial advisors.
• The document includes details of the analysis performed by the financial advisors, including comparable company analysis, comparable transaction analysis and dividend discount models.
• The supplemental disclosures also clarify that no executive officers or directors were guaranteed positions with EverBank as part of the acquisition.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the shareholder litigation and the fact that the financial advisors' valuations were lower than the agreed purchase price. However, the company is taking proactive steps to address the issues.

Positives

• The company is proactively addressing shareholder concerns by supplementing the proxy statement.
• The company is providing additional transparency regarding the transaction process and financial analysis.
• The company is taking steps to avoid potential litigation and ensure a smooth transaction.

Negatives

• Shareholders have raised concerns about the disclosures in the proxy statements.
• The company has received demand letters alleging deficiencies in the proxy statements.
• The company is incurring additional costs and resources to address the shareholder concerns.

Risks

• There is a risk of additional or similar complaints or demand letters being received.
• The company may face further legal challenges related to the transaction.
• The transaction could be delayed or disrupted by ongoing litigation.
• The company's financial advisors' valuations were lower than the agreed purchase price.

Future Outlook

The company is moving forward with the acquisition by EverBank, and a special meeting of shareholders is scheduled for December 8, 2024, to vote on the transaction. The company has stated that it will not update any forward looking statements.

Management Comments

• The Company believes that the disclosures set forth in the Preliminary Proxy Statement and the Definitive Proxy Statement comply fully with all applicable law and denies the allegations in the Demand Letters.
• The Company specifically denies all allegations that any additional disclosure was or is required or material.

Industry Context

The banking industry is experiencing consolidation, and this acquisition is part of that trend. The document highlights the competitive landscape for bank acquisitions and the various factors considered in the valuation process.

Comparison to Industry Standards

• The document provides a detailed analysis of comparable companies and transactions, including multiples of stock price-to-tangible book value, stock price-to-LTM EPS, and transaction price-to-tangible book value.
• The selected companies for comparison included First Northwest Bancorp, Ames National Corporation, Finward Bancorp, and First Western Financial, Inc.
• The selected transactions for comparison included FirstSun Capital Bancorp / HomeStreet, Inc. and German American Bancorp, Inc. / Heartland BancCorp.
• The document notes that the low and high transaction price-to-tangible book value multiples of the selected transactions ranged from 0.49x to 2.18x, while the core deposit premiums ranged from (5.3%) to 15.6%.

Legal Proceedings

• The company has received demand letters from purported shareholders alleging deficiencies in the proxy statements.
• The company is supplementing its disclosures to moot the purported shareholders' disclosure claims and avoid potential litigation.

Stakeholder Impact

• Shareholders are impacted by the acquisition and the potential for litigation.
• Employees of Sterling Bank and Trust, F.S.B. may be impacted by the merger with EverBank, National Association.
• Customers of Sterling Bank and Trust, F.S.B. will become customers of EverBank, National Association.

Next Steps

• Shareholders will vote on the transaction at a special meeting on December 8, 2024.
• The company will continue to address any additional shareholder concerns or legal challenges.
• EverBank will integrate Sterling Bank and Trust, F.S.B. into EverBank, National Association.

Key Dates

Keywords

acquisition, merger, proxy statement, shareholder litigation, financial advisors, KBW, Hovde Group, EverBank, bank, transaction