Provident New York has agreed to purchase Sterling New York Bancorp and intends to adopt a national charter under the name Sterling National Bank, while remaining based out of its current Montebello offices. Since longtime CEO George Strayton retired in 2011 and due to changes in the structure of banking in the United States which favors larger banks over smaller ones, it has seemed inevitable that Provident would take such a step.
This is yet another community brand with 19th century roots to die off, although it remains a Rockland County-company for the immediate future. According to Provident “the merger will create a combined financial services firm specializing in serving small-to-middle market commercial and consumer clients in the greater New York metropolitan area.”
According to a Provident NY press release Sterling Bancorp shareholders will receive a fixed ratio of 1.2625 shares of Provident New York Bancorp common stock for each share of Sterling Bancorp common stock. Upon closing, Provident New York Bancorp shareholders will own approximately 53 percent of stock in the combined company; Sterling Bancorp shareholders will own approximately 47 percent.
Combined, the companies had annualized pro forma revenue of $257 million and $41 million in net income for the 2012 calendar year, and upon completion of the merger will have nearly $7 billion in assets. The companies expect to save $34 million by cutting redundant systems.
Provident Bank NY has not been able to expand into the New Jersey market due to the existence of a competitor by the name of The Provident Bank. “Sterling’s name is highly respected and allows us to grow beyond our combined footprint. The Provident name has served us well, but has limited our growth in New Jersey. Adopting the Sterling name will enable us to extend our brand to a broader regional market,” said Jack L. Kopnisky, president and CEO of Provident New York Bancorp. “This merger is a tremendous opportunity for Provident and a significant step in our strategy to expand within the greater New York metropolitan area. It provides greater diversity of product sets, clients, and revenue streams while presenting considerable potential to build our small-to-middle market and consumer client bases. The combined business will be a more effective competitor in the marketplace than either company on its own.”
“This is the right transaction for Sterling Bancorp’s shareholders, customers and communities,” said Louis J. Cappelli, Sterling Bancorp’s chairman and CEO. “For shareholders, it provides a premium to the current value of our stock and creates a banking institution with even greater competitive strength, growth potential and profitability. Customers will have an expanded range of financial solutions, delivered by a team with a shared focus on superior service. And our communities will benefit from the presence of a strong, soundly managed financial institution committed to serving businesses and individuals across our markets.”
The deal is not fait accompli. Bloomberg reports that a “Sterling Bancorp (STL) shareholder sued to block a proposed $344 million takeover by Provident New York Bancorp, saying the purchase price undervalues the company. Provident New York Bancorp agreed to acquire New York-based Sterling on April 4 in an all-stock deal, joining a list of U.S. lenders pairing up in the face of stiffer rules and capital requirements.”
“The intrinsic value of the company’s common stock is materially in excess of the amount offered in the proposed transaction, and the process by which the proposed transaction was completed is unfair to the class,” the complainant said in the filing. The case is Altman v. Sterling Bancorp, 651263/2013, New York State Supreme Court (Manhattan).
It is not clear when the baseball stadium in Ramapo currently named Provident Bank Park will have its name changed to Sterling. Provident signed a 10-year licensing contract with the stadium in 2011.