Sterling Bancorp calls $65 million 7% fixed-to-floaters

By Mary-Katherine Stinson

Lexington, Ky., June 15 – Sterling Bancorp, the holding company of Sterling Bank and Trust, F.S.B., will redeem all $65 million of its 7% fixed-to-floating rate subordinated notes due April 2026 at par plus interest on July 15, according to a news release on Thursday.

The subordinated notes currently bear interest at Libor plus 582 basis points.

Interest will cease to accrue on the redemption date.

The payment of the $65 million principal portion of the redemption price will be funded by a dividend to be paid by the bank to the company.

“The early redemption of these subordinated notes comes at a watershed moment for Sterling. The subordinated notes have been an expensive drag on earnings, and consequently this redemption will improve our profitability and margins. The company and bank remain very well capitalized and very liquid,” chairman, president, and chief executive officer Thomas M. O’Brien said in the press release.

“Furthermore, this action represents the final step in resolving the significant legacy challenges we have faced over the last three years. While there will continue to be further costs related to ongoing investigations of individuals and the need to work through the re-positioning of our product offerings, the goals we set forth three years ago have been successfully addressed, and we look forward to a brighter future.”

Sterling is a New York-based bank holding company.

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