Provident New York Bancorp PBNY and Sterling Bancorp STL announced today they have entered into a definitive merger
agreement in a stock-for-stock transaction valued at $344 million,
based on the closing price of Provident New York Bancorp common stock
on April 3, 2013. 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.
In the merger, 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% of stock in
the combined company; Sterling Bancorp shareholders will own
approximately 47%. 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 merger is expected to generate approximately
$34 million in fully phased-in annual cost savings or approximately
18% of the expected combined expense total. The merger is expected to
be accretive to Provident New York Bancorp's earnings per share in
2014, excluding the impact of the potential revenue enhancement
opportunities.
Provident New York Bancorp expects to raise $80 million through a
debt offering prior to the closing of the transaction and anticipates
using the net proceeds to fund a capital contribution to Provident
Bank, redeem Sterling's trust preferred securities and for general
corporate purposes.
Beginning with the first dividend payment after closing and subject
to board approval, Provident New York Bancorp currently intends to
increase its regular quarterly cash dividend on its common stock to
$0.07 per share -- this will result in current shareholders of
Sterling Bancorp common stock maintaining a consistent dividend
payment after the closing of the transaction.
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