Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Northeast regional bank Sterling Bancorp (STL) shot higher by as much as 16% after it agreed to be purchased by Provident New York Bancorp (NYSE: PBNY).
So what: Provident agreed to buy Sterling in what was valued at $344 million when the deal was announced -- shares of both companies have moved higher since then. Sterling shareholders will be receiving 1.2625 shares of Provident common stock and should expect the deal to close in the fourth quarter. When added to the fold, Provident shareholders will own 53% of the company, and Sterling shareholders the remaining 47%. Provident plans to use an $80 million debt offering to help fund the deal and anticipates it will be accretive to its 2014 EPS.
Now what: The deal really does make sense for both parties involved because they both service small- to medium-sized businesses in the New York metropolitan area. Synergies from the deal should help boost profits as the combined entity will have close to $7 billion in underlying assets. This seems like a win-win for both companies.
Craving more input? Start by adding Sterling Bancorp to your free and personalized Watchlist so you can keep up on the latest news with the company.
