Sterling Bancorp entered into a definitive agreement to acquire Advantage Funding Management, a provider of commercial vehicle and transportation financing services based in Lake Success, NY. Advantage Funding is part of Macquarie’s Corporate and Asset Finance Group and is a wholly-owned subsidiary of Macquarie Bank.
As of December 31, 2017, Advantage Funding had total outstanding loans and leases of $458 million, with a client base across various industry sectors and geographic markets nationwide. Advantage Funding will be integrated into Sterling’s established national equipment finance platform, which will result in a combined equipment finance portfolio with more than $1 billion in total outstanding loans post-closing and aggregate net loan receivables growth of approximately $205 million in 2017.
Jack Kopnisky, president and CEO of Sterling, said, “The acquisition of Advantage Funding is consistent with our strategy of transitioning our balance sheet to a more diversified and higher-yielding commercial loan mix following our merger with Astoria, and will augment strong organic origination volumes that we anticipate in our commercial businesses in 2018. We look forward to welcoming Advantage’s colleagues and customers to Sterling.”
“Delivering excellent service and financing flexibility to our clients has always been our primary goal,” said Thomas X. Geisel, president of Specialty Finance and National Markets at Sterling National Bank. “This business complements and expands our specialty finance offerings, while creating further opportunities to serve the equipment financing needs of our borrowers nationally.”
Sterling will acquire 100% of the stock of Advantage Funding, which will be paid 100% in cash through a combination of cash on hand, run-off of existing residential mortgage loans and sales of securities. In the quarter ended December 31, 2017, the Advantage Funding loan portfolio had a weighted average yield of approximately 7.5%. Excluding the impact of accretion income on acquired loans, the acquisition is expected to be accretive to loan yield, net interest margin and earnings per share available to common stockholders and has an estimated internal rate of return exceeding 25%. Advantage Funding’s leadership team and support staff will join Sterling National Bank. The acquisition will result in an increase of approximately $6 million in operating expenses in 2018. The transaction is expected to be completed in April 2018.
Hovde Group served as financial advisor to Sterling Bancorp. Macquarie Capital served as financial advisor and Mayer Brown served as legal counsel to Macquarie Group.