SOURCE: Sterling Bancorp

Sterling Bancorp

March 31, 2016 16:38 ET

Sterling Bancorp Acquires NewStar Business Credit, LLC

MONTEBELLO, NY--(Marketwired - March 31, 2016) - Sterling Bancorp  (NYSE: STL), through its principal subsidiary, Sterling National Bank, announced today that it has completed the acquisition of NewStar Business Credit, LLC ("NSBC"). NSBC is a wholly owned subsidiary of NewStar Financial Inc. (NASDAQ: NEWS), a provider of specialized direct lending and credit management capabilities for middle market companies and investors in the credit markets. Sterling will acquire client relationships with over $330 million in loan outstandings as of March 31, 2016, doubling its existing asset-based lending loan portfolio. Sterling is a leading secured lender with an established national asset-based lending platform and has been a trusted financial services provider for over 125 years.

The acquisition is priced at 127% of tangible book value. The purchase price is $112 million with 100% of the consideration paid in cash. The purchase price included a premium of 5.9% of gross loans which is equal to $19.5 million. The transaction is expected to be accretive to earnings per share in 2016 and 2017, has an estimated internal rate of return exceeding 20% and a tangible book value earn-back period within 2.5 years. NSBC's loan portfolio consists of 100% floating-rate assets and yields approximately 5.11%. The portfolio is well diversified across geographies throughout U.S. with a focus on light manufacturing, service, and retail industries. Sterling expects to gain substantial efficiencies through integration of NSBC's operations.

In addition to Sterling's acquisition of NSBC's client relationships and loan portfolio, NSBC's leadership team and support staff joined Sterling's experienced asset-based lending division. Michael Haddad, former President of NSBC, will manage Sterling's asset-based lending business. The addition of NSBC's team and capabilities advances Sterling's leading national secured lending capabilities.

"Delivering excellent service and financing flexibility to our clients has always been our primary goal," stated Thomas X. Geisel, President, Specialty Finance at Sterling National Bank. "This business expands the strength of our specialty finance offerings and creates further opportunities to serve asset-based borrowers nationally."

Michael Haddad, President of NSBC, said, "It gives us great confidence, after building this business, to know that Sterling will continue to provide our clients with the level of service they have come to expect, as well as the balance sheet strength and additional products that Sterling offers as a national bank. I am excited to join Sterling's impressive team."

Squire Patton Boggs (US) LLP served as legal counsel to Sterling National Bank in connection with the transaction.

About Sterling Bancorp

Sterling Bancorp, of which the principal subsidiary is Sterling National Bank, specializes in the delivery of service and solutions to business owners, their families, and consumers within the communities we serve through teams of dedicated and experienced relationship managers. Sterling National Bank offers a complete line of commercial, business, and consumer banking products and services.

Forward-Looking Statements

This release may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may concern Sterling's current expectations about its future results, plans, operations and prospects and are subject to numerous assumptions, risks and uncertainties, including inflation; the effects of, and changes in, trade; changes in asset quality and credit risk; introduction, withdrawal, success and timing of business initiatives; capital management activities; customer disintermediation; and the success of Sterling at managing these risks. Other factors that could cause Sterling's actual results to differ from those indicated in forward-looking statements are included in the "Risk Factors" section of Sterling's securities filings with the Securities and Exchange Commission. The forward-looking statements included herein are only made as of the date hereof, and Sterling specifically disclaims any obligation to update these statements in the future.

Contact Information

  • STERLING BANCORP CONTACT: 
    Luis Massiani
    SEVP & Chief Financial Officer

    845.369.8040

    Sterling Bancorp 
    400 Rella Boulevard
    Montebello, NY 10901-4243
    T 845.369.8040
    F 845.369.8255
    http://www.sterlingbancorp.com