SOUTHFIELD, Mich. - Sterling Bancorp, Inc. (NASDAQ: NASDAQ:SBT), parent company of Sterling Bank and Trust, F.S.B., has entered into a definitive agreement to sell the bank to EverBank Financial Corp for $261 million in cash. This transaction, unanimously approved by Sterling's board of directors, is expected to close in the first quarter of 2025, pending regulatory approvals and shareholder consent.
Key stakeholders, including trustees for family trusts holding approximately 38% of Sterling's common stock, have agreed to vote in favor of the transaction. Prior to the sale, Sterling will also sell its residential tenant-in-common mortgage loans to Bayview Acquisitions LLC.
Post-sale, Sterling plans to dissolve the company in line with Michigan law and a pre-approved Plan of Dissolution. Shareholders are anticipated to receive cash distributions in two stages, the first following the sale's closing and the final after settling all company obligations.
Thomas M. O'Brien, Sterling's Chairman, President, and CEO, highlighted the challenges faced by the company, including high operational costs, extended strategic review periods due to market disruptions, and the impracticality of continuing independent operations without substantial financial risk. The board concluded that a sale to EverBank, which has the necessary capital and is expected to smoothly navigate regulatory approvals, was the optimal path forward for shareholders.
Sterling's banking operations will be integrated into EverBank, excluding the Michigan branch, which will be closed in accordance with applicable laws. All deposit accounts will continue with FDIC coverage under EverBank, and loan customers will transition to EverBank's servicing platform.
The sale agreement stipulates that EverBank's purchase is contingent upon the bank's deposit levels and the successful sale of the loan portfolio to Bayview. Following the transaction, Sterling will delist from Nasdaq and terminate its SEC reporting obligations.
Sterling will convene a special shareholders' meeting to seek approval for the sale and the dissolution plan. The company has engaged financial advisor Keefe, Bruyette & Woods and legal advisor Arnold & Porter Kaye Scholer LLP for this transaction.
The information in this article is based on a press release statement from Sterling Bancorp, Inc.
In other recent news, Sterling Bancorp has announced a change of control agreement with its Chief Financial Officer, Karen Knott. The agreement, which came into effect recently, outlines compensatory arrangements should a change of control occur at the bank. If Ms. Knott is terminated without cause or resigns for good reason after such a change, she will receive a severance payment equivalent to her annual base salary of $350,000. This payment would be made 60 days following her termination, contingent upon a release of claims. The agreement also includes provisions for continued salary payments in the case of disability following a change of control. The document is subject to banking regulatory requirements and the company's clawback policy. The agreement will remain in effect until the third anniversary of its date or the first anniversary of a change of control, whichever comes first.
InvestingPro Insights
As Sterling Bancorp, Inc. (NASDAQ: SBT) prepares for its acquisition by EverBank Financial Corp, investors and stakeholders are paying close attention to the company's financial metrics and market performance. According to recent data from InvestingPro, Sterling Bancorp currently has a market capitalization of $245.94 million. Despite facing operational challenges, the company has shown resilience with a strong return over the last three months, boasting an 18.56% price total return in that period.
InvestingPro Tips indicate that Sterling Bancorp is trading at a low P/E ratio relative to near-term earnings growth, which might attract investors looking for potential undervalued opportunities. Moreover, the company is profitable over the last twelve months, which could reassure stakeholders as the acquisition process unfolds. However, analysts are anticipating a sales decline in the current year, which is reflected in a revenue decrease of -13.36% over the last twelve months as of Q2 2024. This could be a point of consideration for investors assessing the company’s growth trajectory post-acquisition.
For those interested in a deeper dive into Sterling Bancorp's financials and future outlook, InvestingPro offers additional insights. There are currently 9 more InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/SBT. These tips provide a comprehensive analysis that could be invaluable for shareholders and potential investors as they navigate the implications of the upcoming sale and dissolution of the company.
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