Sterling Bancorp in Southfield, Mich., chose to sell its bank to EverBank in Jacksonville, Fla., after a group of experienced bankers failed to secure a lead investor to finance a separate deal.
EverBank agreed in September to buy Sterling Bank and Trust for $261 million in a deal expected to close in the first quarter.
Thomas O’Brien, who was hired as Sterling’s CEO and tasked with helping the bank resolve a number of regulatory, legal and operational challenges tied to a disastrous mortgage program, was introduced to an EverBank senior officer at a November 2023 conference, according to a regulatory filing tied to the bank’s pending sale.
A group of unnamed investors sent Sterling a nonbinding letter of intent on April 17 to buy the company for $4.75 to $4.95 a share. The offer relied on the group securing 100% financing from private equity capital sources. The group increased its offer to $5.20 a share on June 5.
EverBank’s initial offer, submitted on May 10, was largely limited to Sterling’s operations in California and included a 1.75% deposit premium. Sterling rejected the offer due to the time and cost of having to separately wind down its Michigan and New York operations.
EverBank, however, had no interest buying the holding company due to “collateral consequences from acquiring an entity that is subject to a guilty plea for securities fraud,” the filing said. It did offer on July 26 to pay $261 million for the entire bank.
Around that time, the investor group was struggling to find a financial backer.
The group’s letter of intent required it to secure a lead investor by July 19 that was willing to commit at least a quarter of the necessary funds. Even though that deadline was extended to Aug. 19, the group was unable to secure the financing.
EverBank and Sterling entered a 30-day exclusivity agreement on Aug. 5 and talks with the consortium ended.
EverBank sealed the deal by letting Sterling Bank pay a $3 million dividend to Sterling Bancorp to support winding down the company, effectively increasing the consideration to $264 million.