Webster Financial Corporation (NYSE:WBS) entered into an agreement to acquire Sterling Bancorp (NYSE:STL) in merger of equals transaction for $5.1 billion on April 18, 2021. Under the terms of the agreement, Sterling will merge into Webster, and Sterling's shareholders will receive a fixed exchange ratio of 0.463 of a Webster share for each share of Sterling stock they own. Each share of Series A preferred stock of Sterling outstanding immediately prior to the Effective Time will be converted into the right to receive one share of a newly created series of preferred stock of Webster having substantially the same terms as such Sterling Series A preferred stock. Following the closing of the transaction, Webster shareholders will own approximately 50.4% of the combined company, and Sterling shareholders will own approximately 49.6%, on a fully diluted basis. The combined company will retain the Webster name, establish a new corporate headquarters in Stamford, CT, and have a continued multi-campus presence in the greater New York City area and Waterbury, CT. The Merger Agreement provides certain termination rights for both Sterling and Webster and further provides that a termination fee of $185 million will be payable by either Sterling or Webster, as applicable, upon termination of the Merger Agreement under certain circumstances. The board and executive management team will draw from both sides: Jack L. Kopnisky, President & Chief Executive Officer of Sterling, will serve as Executive Chairman of the combined company for 24 months after closing, and will continue in a consulting capacity for an additional 12 months thereafter; John R. Ciulla, Chairman, President & Chief Executive Officer of Webster, will serve as President & Chief Executive Officer of the combined company until 24 months after closing, at which time he will become Chairman, President & Chief Executive Officer; the combined company's executive management team will be comprised of executives from both companies, including Luis Massiani as Chief Operating Officer and Glenn I. MacInnes as Chief Financial Officer; the board of directors of the combined company will have 15 directors, consisting of eight directors from Webster and seven directors from Sterling, including Jack L. Kopnisky and John R. Ciulla; William L. Atwell, current lead independent director of Webster, will serve as lead independent director for 24 months after closing, after which the Lead Independent Director will be a legacy Sterling director.

The transaction is subject to regulatory approvals including approvals from Board of Governors of the Federal Reserve System, approval by the shareholders of each company, listing/approval of new shares on stock exchange, registration statement effectiveness and merger must qualify under specific tax code. As of April 19, 2021, the boards of directors of Webster Financial and Sterling have approved by unanimous vote. As of August 17, 2021, The transaction has been approved by shareholders of Sterling Bancorp and Webster Financial. Webster Bank, National Association and Sterling National Bank, the respective subsidiary banks of Webster and Sterling also received approval to merge from the Office of the Comptroller of the Currency as part of the proposed merger. On December 17, 2021, Federal Reserve Board announced its unanimous approval of the application by Webster Financial to acquire Sterling Bancorp. As of December 20, 2021, all required regulatory approvals, including regulatory approval from the Board of Governors of the Federal Reserve System to complete the merger have been received. The merger is expected to close in the fourth quarter of 2021. As of December 20, 2021, is expected to close on or around February 1, 2022. The transaction will be GAAP EPS accretive to Webster and Sterling, i.e. the deal is more than 20% accretive to Webster shareholders, more than 10% accretive to Sterling shareholders.

Mitchell S. Eitel, Stephen M. Salley and Terence H. Kim of Sullivan & Cromwell LLP represents J.P. Morgan Securities, LLC acted as lead financial advisor to Webster and rendered a fairness opinion to its board of directors. Piper Sandler & Co. acted as financial advisor to Webster Financial Corporation and also rendered a fairness opinion to Webster's board. Edward D. Herlihy and Jacob A. Kling of Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Webster. Citigroup Global Markets Inc. acted as lead financial advisor to Sterling and rendered a fairness opinion to its board of directors. Keefe, Bruyette & Woods, Inc. also rendered a fairness opinion to Sterling's board. James J. Barresi and Abby E. Brown of Squire Patton Boggs (US) LLP is serving as legal counsel to Sterling. Ben Plotkin, Joseph Moeller and Jordan Banov of Stifel, Nicolaus & Company, Incorporated acted as financial advisor to Sterling Bancorp. Morrow & Co., LLC acted as the information agent to Webster and will receive a fee of $15,000 for its services. Okapi Partners LLC acted as the information agent to Sterling and will receive a fee of $0.03 million for its services. Webster has agreed to pay J.P. Morgan a fee of $37 million, $5 million of which became payable upon the delivery of J.P. Morgan's opinion and the remainder of which will become payable only upon closing of the merger. Piper Sandler received a $3.25 million fee from Webster upon rendering its opinion. Citi will receive a fee of $28.5 million, $3.5 million of which was payable upon delivery of Citi's opinion and $25 million of which is payable contingent upon consummation of the transaction. Sterling agreed to pay KBW a cash fee of $1.5 million upon the rendering of the opinion by KBW.

Webster Financial Corporation (NYSE:WBS) completed the acquisition of Sterling Bancorp (NYSE:STL) in merger of equals transaction on January 31, 2022. In connection with the merger, the Webster Board of Directors appointed seven new directors, all former directors of Sterling: Jack L. Kopnisky, Executive Chairman, Webster Financial Corporation; Mona Aboelnaga Kanaan; John P. Cahill; James J. Landy; Maureen B. Mitchell; Richard L. O'Toole; and William E. Whiston. In connection with the transaction, Elizabeth E. Flynn resigned from Webster board