EverBank Financial secures final approval for Sterling Bank acquisition

EverBank Financial Corp has secured final regulatory approval to acquire Sterling Bank and Trust, F.S.B., in a $261 million cash transaction, paving the way for a major expansion into California and New York. With this green light from the Federal Reserve Board, EverBank moves closer to integrating Sterling Bank’s operations, a deal expected to close before the market opens on April 1, 2025.

The Office of the Comptroller of the Currency (OCC) had already approved the deal, marking a critical regulatory milestone. This acquisition will result in Sterling Bancorp, Inc. delisting from Nasdaq, ending its tenure as a publicly traded company. Shareholders of Sterling Bancorp had overwhelmingly approved the sale in December 2024, alongside a plan of dissolution.

Why Is EverBank Acquiring Sterling Bank?

EverBank’s decision to acquire Sterling Bank and Trust, F.S.B. aligns with its broader strategy to expand in high-value banking markets, particularly in California and New York. Sterling Bank operates 25 branches across the San Francisco Bay Area and the Los Angeles metropolitan region, as well as one in Flushing, New York. These locations will be converted into EverBank financial centers, increasing EverBank’s physical presence in competitive banking territories.

Sterling Bank’s $2.4 billion in assets, $2 billion in deposits, and $900 million in loans will be absorbed into EverBank’s balance sheet, boosting its total assets to approximately $43.2 billion post-merger. The acquisition will elevate EverBank’s standing, but it will still control less than 1% of total U.S. banking deposits, ensuring no significant impact on national market competition.

What Happens to Sterling Bancorp Stock After the Acquisition?

With the deal set to close on April 1, 2025, Sterling Bancorp will delist from Nasdaq, effectively ending its operations as an independent entity. The company has already notified Nasdaq and will file a Form 25 with the U.S. Securities and Exchange Commission (SEC) to finalize the delisting.

According to the approved Plan of Dissolution, the closing date will serve as the record date for shareholder distributions. Further details on these distributions are expected to be released once the transaction is finalized.

How Did the Federal Reserve Evaluate the Acquisition?

The Federal Reserve Board examined EverBank’s acquisition proposal under section 3 of the Bank Holding Company Act, assessing factors such as financial stability, competitive impact, and compliance with the Community Reinvestment Act (CRA). EverBank, which currently ranks as the 61st largest insured depository institution in the U.S., is acquiring an entity that ranks 478th nationally, making the deal financially non-disruptive.

One public comment was submitted opposing the deal, referencing Sterling Bancorp’s 2023 guilty plea in a $69 million securities fraud case. However, the Federal Reserve determined that none of the individuals involved in the fraudulent activities would join EverBank’s leadership team, mitigating potential concerns about governance risks. The Department of Justice (DOJ) also reviewed the transaction and raised no competitive concerns, as EverBank’s presence in California remains relatively small compared to major market players.

How Will the Acquisition Affect Sterling Bank Customers?

EverBank has assured that all existing customer accounts and banking services at Sterling Bank will remain unchanged during the transition. The company intends to gradually integrate Sterling Bank’s operations, ensuring a smooth experience for customers.

One notable change is the planned rebranding of Sterling Bank branches into EverBank financial centers. While Sterling Bank’s only Michigan branch will be closed, EverBank has stated that no other major branch closures are anticipated. Customers will retain access to their current accounts, online banking, and financial services throughout the transition.

What Does This Mean for EverBank’s Growth Strategy?

The acquisition of Sterling Bank strengthens EverBank’s expansion strategy, particularly in California’s competitive banking sector. EverBank has already established a West Coast headquarters in Irvine, California, and recently announced plans to open new financial centers in Roseville and Encino. By absorbing Sterling Bank’s branch network, EverBank positions itself to increase its market share in mortgage lending, business banking, and commercial financial services.

CEO Greg Seibly highlighted the strategic benefits of the acquisition, emphasizing that Sterling Bank customers will gain access to EverBank’s broader suite of financial products, including specialty deposits, treasury services, and additional commercial lending options.

EverBank has also committed to renovating several Sterling Bank branches, reinforcing its focus on providing a modern banking experience while maintaining a strong digital presence.

What Are the Financial and Market Implications?

From a financial stability perspective, the Federal Reserve found no systemic risk posed by the acquisition. EverBank remains well-capitalized, and the transaction is structured as a cash purchase, ensuring no additional leverage or debt burden.

The competitive impact is minimal, as EverBank’s market share in California will remain below 1% even after absorbing Sterling Bank’s assets. This ensures that customers continue to have a wide range of banking options, and regulators did not identify any monopolistic risks.

The Community Reinvestment Act (CRA) rating played a role in the regulatory review. While EverBank holds a “Satisfactory” CRA rating, Sterling Bank faced past criticism for its investment practices in Michigan and New York. EverBank has stated that it will maintain its commitment to community reinvestment efforts, ensuring that the bank continues to support low- and moderate-income (LMI) communities.

What Comes Next?

With the final regulatory approvals in place, EverBank is preparing to finalize the transaction and integrate Sterling Bank’s operations. Customers will receive regular updates on the transition process, with EverBank expected to roll out new branding and services in phases.

For shareholders of Sterling Bancorp, the focus now shifts to the distribution process outlined in the Plan of Dissolution. Further financial details are expected to be announced once the closing date (April 1, 2025) passes.

EverBank’s expansion into California represents a strategic move in a competitive market, reinforcing its position as a growing nationwide specialty bank. With the acquisition of Sterling Bank, EverBank is set to broaden its customer base, enhance its digital banking capabilities, and strengthen its commercial lending portfolio.