8-K: Sterling Bancorp Finalizes Sale to EverBank, Announces Dissolution and Initial Liquidating Distribution

Sterling Bancorp has completed the sale of Sterling Bank and Trust to EverBank Financial Corp for $261 million, initiating its plan of dissolution and announcing an initial liquidating distribution of $4.85 per share.

Summary

• Sterling Bancorp, Inc. has completed the sale of Sterling Bank and Trust, F.S.B. to EverBank Financial Corp, effective April 1, 2025.
• The company received $261 million in cash as a fixed purchase price.
• Sterling Bank and Trust has merged into EverBank, National Association.
• The company has filed a certificate of dissolution and will wind down operations.
• Trading of Sterling Bancorp's common stock on the Nasdaq Capital Market has been halted, and the stock will be delisted.
• An initial liquidating distribution of $4.85 per share, totaling approximately $252 million, will be paid on April 8, 2025, to shareholders of record as of April 1, 2025.
• After the initial distribution, the company will have approximately $16 million remaining to complete the wind down.
• Thomas M. OBrien has stepped down as Chairman, President, and CEO, but will remain on the Board of Directors.
• Steven E. Gallotta has been appointed Chairman of the Board.
• Christine Meredith will serve as President and Karen Knott will continue as Chief Financial Officer and Treasurer, both as consultants.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive as the sale was completed and shareholders are receiving a liquidating distribution, but the company is ceasing operations.

Positives

• The sale to EverBank Financial Corp was successfully completed, providing $261 million in cash to Sterling Bancorp.
• Shareholders will receive an initial liquidating distribution of $4.85 per share.
• The company is proceeding with its Plan of Dissolution in an orderly manner.
• Former executives will receive payments under their Change of Control Agreements: $850,000 to Mr. OBrien, $410,000 to Ms. Meredith, and $350,000 to Ms. Keogh.

Negatives

• The company is dissolving and ceasing operations.
• The common stock will be delisted from the Nasdaq Capital Market.
• The company's reporting obligations under the Securities Exchange Act of 1934 will be suspended.
• The final liquidating distribution amount and timing are uncertain.

Risks

• The final cash distribution to shareholders is subject to completing the wind down and paying creditors and existing debts.
• Potential liabilities and defense costs related to demand letters from a purported shareholder and former executive officers could impact the final distribution amount.
• The company operates in a competitive and rapidly changing environment, with new risks and uncertainties emerging.

Future Outlook

The company intends to make a final cash distribution to shareholders after completing the wind down and paying or providing for creditors and existing debts, but the timing and amount of the final distribution are uncertain.

Management Comments

• 'The closing of this transaction with EverBank was only possible with the extraordinary contributions of our Board of Directors, Executive team, and all Sterling employees,' said Thomas M. OBrien.
• Mr. OBrien also stated that he was thankful to shareholders for their consistent support, patience and encouragement.

Industry Context

The acquisition of Sterling Bank and Trust by EverBank Financial Corp reflects ongoing consolidation trends within the banking industry, where larger institutions seek to expand their market presence and customer base through strategic acquisitions.

Comparison to Industry Standards

• Comparing the $261 million sale price to other bank acquisitions, the valuation appears reasonable given Sterling Bancorp's circumstances and the regulatory environment.
• The initial liquidating distribution of $4.85 per share provides shareholders with immediate value, which is a common practice in corporate dissolutions.
• The retention of key personnel as consultants, such as Christine Meredith and Karen Knott, is a standard practice to ensure a smooth transition and maintain institutional knowledge during the wind-down process.

Management Changes

Legal Proceedings

• The company is addressing potential liabilities and defense costs related to a previously disclosed demand letter received from a purported shareholder.
• The company is also addressing previously disclosed demand letters from two former executive officers of Sterling Bank and Trust, F.S.B.

Related Party Transactions

• Christine Meredith and Karen Knott have entered into independent contractor agreements with the company for a term of six months, receiving $38,000 and $33,000 per month, respectively.

Stakeholder Impact

• Shareholders will receive an initial liquidating distribution of $4.85 per share.
• Employees of Sterling Bank and Trust have transitioned to EverBank.
• Customers of Sterling Bank and Trust, other than at the Michigan branch, will become customers of EverBank.

Next Steps

• Computershare Inc. and Computershare Trust Company, N.A. will act as paying agent for the liquidating distributions.
• The company will file a Form 15 with the SEC within the next 20 days to suspend its periodic reporting obligations.
• The company intends to make a final cash distribution to shareholders after completing the wind down.

Key Dates

Keywords

dissolution, liquidating distribution, sale, EverBank, Sterling Bancorp, merger, delisting, acquisition, banking