Provident New York Bancorp, Sterling Bancorp Announce Merger, Fixed Ratio Equals ~$11.12/Share for Sterling

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.