Southfield’s Sterling Bank to be Acquired by Florida’s EverBank

The Michigan-based Sterling Bank, well-known to those in Southfield, has news that affects its future. Sterling Bancorp., the parent company of Sterling Bank, announced Monday that it will sell all of its shares to EverBank Financial Corp, a Jacksonville, Florida-based institution. The cash deal is set to go down for $261 million.

The sale process is anticipated to wrap up by the first quarter of 2025. The part of the plan involves the conversion of all Sterling Bank branches into EverBank branches.

The different course of action is the exception of one branch, located in Southfield, Michigan, is to be shut down. Most Sterling Bank branches are in California, with also a presence in Flushing, New York, based on the information found right on the bank’s website.

Sterling’s Strategic Questions

According to Thomas M. O’Brien, who’s the big guy over at Sterling Bancorp. expressed that the company was exploring multiple paths for the future. These included possibly staying independent. However, the board of Sterling decided it was just too pricey and took too much time, thereby risking big money losses.

The company has had its fair share of a rough patch in the past. It was related to a home loan program, known as the Advantage Loan Program. In 2023, Sterling was in hot water with the U.S. Department of Justice for filing fraudulent securities statements. This mess originated from a whopping $5 billion in loans given out through the program from 2011-19.

Finding a Silver Lining

O’Brien also mentioned that during a tough time for banking investments post-March 2023, Sterling tried to find potential partners for a merger. Still, they were not successful initially. However, in EverBank, O’Brien said they found the right partner who was fully prepared and unlikely to cause any regulatory hiccups.

The Sterling story changed quite a bit after the tough events around 2020. The bank found itself on shaky ground, but its situation has since stabilized. Nevertheless, the bank faces an earnings challenge due to the single-focus nature of its past Advantage Loan Program operations.

Though the bank is now on the better side of financial health compared to a few years ago, its past reliance on a single business model has put a squeeze on its ability to earn significantly and grow.