Sterling Bancorp Reports Fourth Quarter and Full Year 2020 Financial Results
Sterling Bancorp (NASDAQ: SBT) reported a net loss of $11.7 million for Q4 2020, resulting in a full-year net loss of $13.0 million. The Q4 net interest margin was 2.51%, with total deposits increasing to $3.099 billion, a 24% rise YoY. The company recorded $27.6 million in provisions for loan losses, raising the allowance for loan losses to 2.89% of total loans. On a positive note, total shareholders' equity stood at $319.6 million, exceeding regulatory capital requirements. Additionally, the company is progressing toward regulatory compliance and improving profitability.
- Total deposits increased 24% YoY to $3.099 billion.
- Total shareholders' equity of $319.6 million exceeds regulatory capital requirements.
- Provision for loan losses reflects proactive management amidst credit risk challenges.
- Net loss of $11.7 million in Q4 2020, marking continued financial struggles.
- Total loans decreased 14% YoY to $2.507 billion.
- High level of nonperforming loans at $94.7 million, 3.78% of total loans.
Sterling Bancorp, Inc. (NASDAQ: SBT) (“Sterling” or the “Company”), the holding company of Sterling Bank and Trust, F.S.B. (the “Bank”), today reported its financial results for the quarter and year ended December 31, 2020.
Fourth Quarter and Year-End 2020 Highlights
-
Fourth quarter net loss of
$11.7 million , or$(0.23) per diluted share; full year net loss of$13.0 million , or$(0.26) per diluted share -
Fourth quarter net interest margin of
2.51% ; full year net interest margin of2.94% -
Fourth quarter non-interest expense of
$14.9 million ; full year non-interest expense of$74.1 million -
Fourth quarter provision for loan losses of
$27.6 million , increasing the allowance for loan losses to2.89% of total loans held for investment; full year provision for loan losses of$54.9 million -
Total shareholders’ equity of
$319.6 million -
Bank capital ratios continue to be in excess of minimum ratios required to be considered “well-capitalized” with a leverage ratio of
9.20% , a total risk-based capital ratio of21.56% and a common equity tier one ratio of20.27% -
The Company’s consolidated leverage ratio of
8.08% , total risk-based capital ratio of22.58% and common equity tier one ratio of17.68% continue to exceed minimum regulatory capital requirements -
Total deposits of
$3.09 9 billion -
Total loans held for investment of
$2.50 7 billion -
Total loan originations of
$51.6 million for the fourth quarter of 2020 -
Nonperforming loans and troubled debt restructurings were
$94.7 million (or3.78% of total loans held for investment) compared to$98.1 million (or3.67% of total loans held for investment) at September 30, 2020 - On December 17, 2020, the Company announced the appointment of a new independent director to the Board
The Company reported net loss of
Thomas M. O’Brien, Chairman, President, and Chief Executive Officer commented on the Company’s results, “The results being reported today reflect multiple priority initiatives undertaken in the previous six months. While the efforts to bring Sterling into regulatory compliance and consistent profitability will continue into the coming year, the challenges addressed to date represent substantial efforts and good success.”
As separately disclosed today, the Company has reached an agreement in principle to settle the pending class action lawsuit related to our disclosures regarding our residential lending practices that were made in connection with our initial public offering and subsequent filings and releases. The settlement agreement provides for a cash payment that will be fully covered by insurance. Mr. O’Brien said, “Importantly, we announced earlier today the pending settlement of the class action litigation with a resolution that, when ultimately finalized, will put an end to a matter that has generated costly legal fees and management distraction.”
Mr. O’Brien added, “Additionally, the Company increased the allowance for loan losses to a level that reflects management’s analysis of the increased credit weakness in the legacy loan book. The level of criticized and classified loans is stubbornly high, and the increased allowance reflects the need to address these as expeditiously and prudently as possible. These are very uncertain times from the perspective of bank credit risk, and, as I have discussed previously, the thought that Sterling will escape without some cyclically high loan loss experience is most likely not reasonable. Sterling’s previous focus on commercial and construction lending remains a source of concern.
“Furthermore, management moved approximately
Balance Sheet
Total Assets – Total assets of
Liquid assets, comprising cash and due from banks and investment securities, increased
Total loans held for investment of
Total Deposits – Total deposits of
Capital – Total shareholders’ equity was
|
Adequately
|
|
Company
|
Total adjusted capital to risk-weighted assets |
|
|
|
Tier 1 (core) capital to risk-weighted assets |
|
|
|
Common Tier 1 (CET 1) |
|
|
|
Tier 1 (core) capital to adjusted tangible assets |
|
|
|
|
Adequately
|
|
Bank Actual at
|
Total adjusted capital to risk-weighted assets |
|
|
|
Tier 1 (core) capital to risk-weighted assets |
|
|
|
Common Tier 1 (CET 1) |
|
|
|
Tier 1 (core) capital to adjusted tangible assets |
|
|
|
Asset Quality and Provision for Loan Losses – Provision for loan losses of
Net charge offs during the fourth quarter were
Nonperforming assets at December 31, 2020 totaled
“While the level of nonperforming assets remains high, included in nonperforming assets are
The principal balance of loans modified due to the economic effects of the pandemic and still in forbearance has continued to decline from the June 30 high and from September 30 levels. We continue to work together with our borrowers as circumstances may permit. Total loans in forbearance as of December 31, 2020 were
Forbearance Composition |
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||
Residential real estate |
|
|
|
|
|
|
|
|
Commercial real estate |
5,056 |
18,674 |
7,029 |
- |
||||
Total loans in forbearance |
|
|
|
|
|
|
|
|
Loans in forbearance to total loans held for investment |
|
|
|
|
Results of Operations
Net Interest Income and Net Interest Margin – Net interest income during the fourth quarter of 2020 was
Net interest income during the year ended December 31, 2020 was
Non-Interest Income – Non-interest income for the fourth quarter of 2020 was
Non-interest income for the year ended December 31, 2020 was
Non-Interest Expense – Non-interest expense of
Non-interest expense of
Mr. O’Brien said, “Management and the board are confronting multiple initiatives and priorities. While this is no small task, there have been some important achievements to date, and we remain committed to continue to work through the challenges ahead.”
Appointment of New Independent Director
On December 17, 2020, the Board of Directors (the “Board”) of the Company appointed Ms. Tracey Dedrick as a director, effective upon receipt of regulatory non-objection from the Office of the Comptroller of the Currency (the “OCC.”). The Board of Directors has determined that Ms. Dedrick is an independent director under applicable Company and Nasdaq standards.
Ms. Dedrick is filling the newly-created vacancy on the Board due to Mr. Barry Allen’s resignation on December 11, 2020. “As disclosed recently, Barry Allen has retired from the boards after 22 years of service to Sterling. Barry has been extremely helpful to me and always supportive. In filling the vacancy created by his retirement, the boards have chosen Ms. Tracey Dedrick to join Sterling. Tracey brings very relevant experience in bank risk management and treasury practices. We welcome her enthusiastically,” O’Brien said.
Conference Call and Webcast
Management will host a conference call on Monday, February 1, 2021 at 2:00 p.m. Eastern Time to discuss the Company’s unaudited financial results for the quarter and year ended December 31, 2020. The conference call number for U.S. participants is (833) 535-2201 and the conference call number for participants outside the United States is (412) 902-6744. Additionally, interested parties can listen to a live webcast of the call in the “Investor Relations” section of the Company’s website at www.sterlingbank.com. An archived version of the webcast will be available in the same location shortly after the live call has ended.
A replay of the conference call may be accessed through February 15, 2021 by dialing (877) 344-7529, using conference ID number 10151576.
About Sterling Bancorp, Inc.
Sterling Bancorp, Inc. is a unitary thrift holding company. Its wholly owned subsidiary, Sterling Bank and Trust, F.S.B., has primary branch operations in San Francisco and Los Angeles, California, New York City and Bellevue, Washington. Sterling offers loan products to the residential and commercial markets, as well as retail and business banking services. Sterling also has an operations center and a branch in Southfield, Michigan. For additional information, please visit the Company’s website at http://www.sterlingbank.com.
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures include “Average Tangible Common Equity,” and “Return on Average Tangible Common Equity,” each of which are common metrics in the banking industry. Our management uses these non-GAAP financial measures to assess the Company’s capital strength and business performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies. For further information see “Return on Average Tangible Common Equity Reconciliations (non-GAAP)” below.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements generally can be identified by the use of forward-looking terminology such as “will,” “may,” “expect,” “anticipate,” “believe,” “probable,” “continue,” “project,” “could,” “would,” “should” or similar terminology, including references to assumptions. Forward-looking statements are based on various assumptions and analyses made by us in light of our management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events that may be subject to circumstances beyond our control; increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment; changes in deposit flows, loan demand or collateral values; changes in accounting principles, policies or guidelines; changes in general economic, business and political conditions, either nationally or locally in some or all areas in which we do business, or conditions in the real estate, securities or financial markets or the banking industry; legislative or regulatory changes; supervision and examination by the OCC and the Board of Governors of the Federal Reserve System; our ability to successfully implement technological changes; our ability to successfully consummate new business initiatives; litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, including litigation and investigations relating to our residential lending practices and the Advantage Loan Program; the outcomes of such litigation and investigations, including the risk of civil or criminal enforcement action, regulatory restrictions on the Bank’s activities, financial penalties or judgments, other adverse consequences and any resulting effects on the Company’s business, financial condition and/or results of operations; losses from such litigation and investigations that may be materially higher than expected and that may materially exceed our contingency reserves; repurchase requests related to the sale of loans originated under the Advantage Loan Program may be materially higher than expected and result in repurchase obligations that may materially exceed our loan repurchase reserves; our ability to implement enhanced risk management policies, procedures and controls commensurate with shifts in our business strategies and regulatory expectations; the occurrence of natural and other disasters, pandemics, terrorist activities, significant political events, cyberattacks, security breaches or system failures that affect us or our counterparties or service providers, including the COVID-19 pandemic and the regulatory and governmental actions implemented in response to COVID-19; and the risks, uncertainties and other factors detailed from time to time in our public filings, including those included in the disclosures under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 6, 2020, subsequent periodic reports and future periodic reports. Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those projected in, or implied by, such forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update, revise, or correct any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, the receipt of new information or otherwise.
Sterling Bancorp, Inc. |
||||||||||||||||||||
Consolidated Financial Highlights (Unaudited) |
||||||||||||||||||||
|
|
At and for the Three Months Ended |
|
At and for the Year Ended |
||||||||||||||||
(dollars in thousands, except per share data) |
|
December 31,
|
September 30,
|
December 31,
|
|
December 31,
|
December 31,
|
|||||||||||||
Net income (loss) |
|
$ |
(11,693 |
) |
|
$ |
(111 |
) |
|
$ |
(13,753 |
) |
|
$ |
(12,967 |
) |
|
$ |
29,248 |
|
Income (loss) per share, diluted |
$ |
(0.23 |
) |
$ |
(0.00 |
) |
$ |
(0.28 |
) |
|
$ |
(0.26 |
) |
$ |
0.57 |
|
||||
Net interest income |
|
$ |
24,370 |
|
|
$ |
25,705 |
|
|
$ |
29,959 |
|
|
$ |
105,765 |
|
|
$ |
120,984 |
|
Net interest margin |
|
2.51 |
% |
|
2.74 |
% |
|
3.74 |
% |
|
|
2.94 |
% |
|
3.78 |
% |
||||
Non-interest income |
|
$ |
1,373 |
|
|
$ |
1,111 |
|
|
$ |
2,386 |
|
|
$ |
4,336 |
|
|
$ |
11,447 |
|
Non-interest expense |
$ |
14,856 |
|
$ |
24,974 |
|
$ |
47,400 |
|
|
$ |
74,112 |
|
$ |
87,673 |
|
||||
Loans, net of allowance for loan losses |
|
$ |
2,434,356 |
|
|
$ |
2,627,324 |
|
|
$ |
2,891,530 |
|
|
$ |
2,434,356 |
|
|
$ |
2,891,530 |
|
Total deposits |
$ |
3,098,966 |
|
$ |
3,095,170 |
|
$ |
2,495,440 |
|
|
$ |
3,098,966 |
|
$ |
2,495,440 |
|
||||
Nonperforming loans |
|
$ |
86,470 |
|
|
$ |
83,162 |
|
|
$ |
14,782 |
|
|
$ |
86,470 |
|
|
$ |
14,782 |
|
Allowance for loan losses to total loans |
|
2.89 |
% |
|
1.80 |
% |
|
0.75 |
% |
|
|
2.89 |
% |
|
0.75 |
% |
||||
Allowance for loan losses to nonperforming loans |
|
|
84 |
% |
|
|
58 |
% |
|
|
147 |
% |
|
|
84 |
% |
|
|
147 |
% |
Provision (recovery) for loan losses |
$ |
27,592 |
|
$ |
2,123 |
|
$ |
450 |
|
$ |
54,865 |
|
$ |
(133 |
) |
|||||
Net charge offs (recoveries) |
|
$ |
3,463 |
|
|
$ |
796 |
|
|
$ |
(76 |
) |
|
$ |
4,208 |
|
|
$ |
(13 |
) |
Return on average assets |
|
(1.19 |
)% |
|
(0.01 |
)% |
|
(1.67 |
)% |
|
|
(0.35 |
)% |
|
0.89 |
% |
||||
Return on average shareholders' equity |
|
|
(13.92 |
)% |
|
|
(0.13 |
)% |
|
|
(15.39 |
)% |
|
|
(3.85 |
)% |
|
|
8.41 |
% |
Efficiency ratio |
|
57.71 |
% |
|
93.12 |
% |
|
146.55 |
% |
|
|
67.31 |
% |
|
66.20 |
% |
||||
Capital Ratios |
|
|
|
|
|
|
|
|
|
|
||||||||||
Regulatory and Other Capital Ratios—Consolidated: |
|
|||||||||||||||||||
Total adjusted capital to risk-weighted assets |
|
|
22.58 |
% |
|
|
22.17 |
% |
|
|
21.49 |
% |
|
|
22.58 |
% |
|
|
21.49 |
% |
Tier 1 (core) capital to risk-weighted assets |
|
17.68 |
% |
|
17.46 |
% |
|
17.04 |
% |
|
|
17.68 |
% |
|
17.04 |
% |
||||
Common Tier 1 (CET 1) |
|
|
17.68 |
% |
|
|
17.46 |
% |
|
|
17.04 |
% |
|
|
17.68 |
% |
|
|
17.04 |
% |
Tier 1 (core) capital to adjusted tangible assets |
|
8.08 |
% |
|
8.64 |
% |
|
10.11 |
% |
|
|
8.08 |
% |
|
10.11 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Regulatory and Other Capital Ratios—Bank: |
|
|||||||||||||||||||
Total adjusted capital to risk-weighted assets |
|
|
21.56 |
% |
|
|
21.30 |
% |
|
|
17.82 |
% |
|
|
21.56 |
% |
|
|
17.82 |
% |
Tier 1 (core) capital to risk-weighted assets |
|
20.27 |
% |
|
20.03 |
% |
|
16.70 |
% |
|
|
20.27 |
% |
|
16.70 |
% |
||||
Common Tier 1 (CET 1) |
|
|
20.27 |
% |
|
|
20.03 |
% |
|
|
16.70 |
% |
|
|
20.27 |
% |
|
|
16.70 |
% |
Tier 1 (core) capital to adjusted tangible assets |
|
9.20 |
% |
|
9.90 |
% |
|
9.90 |
% |
|
|
9.20 |
% |
|
9.90 |
% |
||||
Sterling Bancorp, Inc. |
||||||||||||||||
Condensed Consolidated Balance Sheets (Unaudited) |
||||||||||||||||
(dollars in thousands) |
December 31,
|
September 30,
|
%
|
December 31,
|
%
|
|||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and due from banks |
$ |
998,497 |
$ |
917,996 |
9 |
% |
$ |
77,819 |
N/M |
|
||||||
Interest-bearing time deposits with other banks |
|
|
7,021 |
|
|
7,988 |
|
(12 |
)% |
|
|
1,025 |
|
585 |
% |
|
Investment securities |
|
304,958 |
|
247,884 |
23 |
% |
|
152,544 |
100 |
% |
||||||
Mortgage loans held for sale |
|
|
22,284 |
|
|
3,643 |
|
512 |
% |
|
|
1,337 |
|
N/M |
|
|
Loans, net of allowance for loan losses of |
|
2,434,356 |
|
2,627,324 |
(7 |
)% |
|
2,891,530 |
(16 |
)% |
||||||
Accrued interest receivable |
|
|
10,990 |
|
|
12,385 |
|
(11 |
)% |
|
|
13,718 |
|
(20 |
)% |
|
Mortgage servicing rights, net |
|
5,688 |
|
6,423 |
(11 |
)% |
|
9,765 |
(42 |
)% |
||||||
Leasehold improvements and equipment, net |
|
|
8,512 |
|
|
8,493 |
|
0 |
% |
|
|
9,198 |
|
(7 |
)% |
|
Operating lease right-of-use assets |
|
19,232 |
|
19,253 |
0 |
% |
|
18,715 |
3 |
% |
||||||
Federal Home Loan Bank stock, at cost |
|
|
22,950 |
|
|
22,950 |
|
0 |
% |
|
|
22,950 |
|
0 |
% |
|
Cash surrender value of bank-owned life insurance |
|
32,495 |
|
32,355 |
0 |
% |
|
31,917 |
2 |
% |
||||||
Deferred tax asset, net |
|
|
24,326 |
|
|
20,589 |
|
18 |
% |
|
|
12,095 |
|
101 |
% |
|
Other assets |
|
22,736 |
|
9,322 |
144 |
% |
|
2,271 |
901 |
% |
||||||
Total assets |
|
$ |
3,914,045 |
|
$ |
3,936,605 |
|
(1 |
)% |
|
$ |
3,244,884 |
|
21 |
% |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|||||
Noninterest-bearing deposits |
$ |
58,458 |
$ |
66,316 |
(12 |
)% |
$ |
77,563 |
(25 |
)% |
||||||
Interest-bearing deposits |
|
|
3,040,508 |
|
|
3,028,854 |
|
0 |
% |
|
|
2,417,877 |
|
26 |
% |
|
Total deposits |
|
3,098,966 |
|
3,095,170 |
0 |
% |
|
2,495,440 |
24 |
% |
||||||
Federal Home Loan Bank borrowings |
|
|
318,000 |
|
|
318,000 |
|
0 |
% |
|
|
229,000 |
|
39 |
% |
|
Subordinated notes, net |
|
65,341 |
|
65,300 |
0 |
% |
|
65,179 |
0 |
% |
||||||
Operating lease liabilities |
|
|
20,497 |
|
|
20,514 |
|
0 |
% |
|
|
19,868 |
|
3 |
% |
|
Accrued expenses and other liabilities |
|
91,650 |
|
106,477 |
(14 |
)% |
|
102,783 |
(11 |
)% |
||||||
Total liabilities |
|
|
3,594,454 |
|
|
3,605,461 |
|
0 |
% |
|
|
2,912,270 |
|
23 |
% |
|
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|||||
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding |
|
- |
|
- |
|
- |
- |
|
||||||||
Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 49,981,861 shares at December 31, 2020, 49,977,209 shares at September 30, 2020 and 49,944,473 shares at December 31, 2019 |
|
|
80,807 |
|
|
80,807 |
|
0 |
% |
|
|
80,889 |
|
0 |
% |
|
Additional paid-in capital |
|
13,544 |
|
13,386 |
1 |
% |
|
13,210 |
3 |
% |
||||||
Retained earnings |
|
|
224,853 |
|
|
236,546 |
|
(5 |
)% |
|
|
238,319 |
|
(6 |
)% |
|
Accumulated other comprehensive income |
|
387 |
|
405 |
(4 |
)% |
|
196 |
97 |
% |
||||||
Total shareholders’ equity |
|
|
319,591 |
|
|
331,144 |
|
(3 |
)% |
|
|
332,614 |
|
(4 |
)% |
|
Total liabilities and shareholders’ equity |
$ |
3,914,045 |
$ |
3,936,605 |
(1 |
)% |
$ |
3,244,884 |
21 |
% |
||||||
|
|
|||||||||||||||
N/M- not meaningful |
||||||||||||||||
Sterling Bancorp, Inc. |
|||||||||||||||||||||||||||||
Condensed Consolidated Statements of Income (Unaudited) |
|||||||||||||||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||||||||||||||
(dollars in thousands, except per share amounts) |
|
December 31,
|
|
|
|
September 30,
|
|
|
%
|
|
|
December 31,
|
|
|
%
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
%
|
||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest and fees on loans |
$ |
33,758 |
|
$ |
35,918 |
|
(6 |
)% |
$ |
41,581 |
|
(19 |
)% |
$ |
146,702 |
|
$ |
168,955 |
|
(13 |
)% |
||||||||
Interest and dividends on investment securities and restricted stock |
|
|
646 |
|
|
|
901 |
|
|
(28 |
)% |
|
|
1,225 |
|
|
(47 |
)% |
|
|
3,618 |
|
|
|
4,976 |
|
|
(27 |
)% |
Other interest |
|
257 |
|
|
211 |
|
22 |
% |
|
378 |
|
(32 |
)% |
|
1,043 |
|
|
1,438 |
|
(27 |
)% |
||||||||
Total interest income |
|
|
34,661 |
|
|
|
37,030 |
|
|
(6 |
)% |
|
|
43,184 |
|
|
(20 |
)% |
|
|
151,363 |
|
|
|
175,369 |
|
|
(14 |
)% |
Interest expense: |
|||||||||||||||||||||||||||||
Interest on deposits |
|
|
8,254 |
|
|
|
9,288 |
|
|
(11 |
)% |
|
|
11,264 |
|
|
(27 |
)% |
|
|
37,482 |
|
|
|
45,693 |
|
|
(18 |
)% |
Interest on Federal Home Loan Bank borrowings |
|
857 |
|
|
859 |
|
0 |
% |
|
784 |
|
9 |
% |
|
3,403 |
|
|
3,991 |
|
(15 |
)% |
||||||||
Interest on subordinated notes |
|
|
1,180 |
|
|
|
1,178 |
|
|
0 |
% |
|
|
1,177 |
|
|
0 |
% |
|
|
4,713 |
|
|
|
4,701 |
|
|
0 |
% |
Total interest expense |
|
10,291 |
|
|
11,325 |
|
(9 |
)% |
|
13,225 |
|
(22 |
)% |
|
45,598 |
|
|
54,385 |
|
(16 |
)% |
||||||||
Net interest income |
|
|
24,370 |
|
|
|
25,705 |
|
|
(5 |
)% |
|
|
29,959 |
|
|
(19 |
)% |
|
|
105,765 |
|
|
|
120,984 |
|
|
(13 |
)% |
Provision (recovery) for loan losses |
|
27,592 |
|
|
2,123 |
|
N/M |
|
|
450 |
|
N/M |
|
|
54,865 |
|
|
(133 |
) |
N/M |
|
||||||||
Net interest income after provision for loan losses |
|
(3,222 |
) |
|
|
23,582 |
|
|
(114 |
)% |
|
|
29,509 |
|
|
(111 |
)% |
|
|
50,900 |
|
|
|
121,117 |
|
|
(58 |
)% |
|
Non-interest income: |
|||||||||||||||||||||||||||||
Service charges and fees |
|
|
153 |
|
|
|
61 |
|
|
151 |
% |
|
|
117 |
|
|
31 |
% |
|
|
426 |
|
|
|
444 |
|
|
(4 |
)% |
Investment management and advisory fees |
|
246 |
|
|
310 |
|
(21 |
)% |
|
335 |
|
(27 |
)% |
|
1,124 |
|
|
1,577 |
|
(29 |
)% |
||||||||
Gain on sale of loans |
|
|
593 |
|
|
|
437 |
|
|
36 |
% |
|
|
7 |
|
|
N/M |
|
|
|
2,050 |
|
|
|
6,366 |
|
|
(68 |
)% |
Net servicing income (loss) |
|
(85 |
) |
|
(121 |
) |
30 |
% |
|
675 |
|
(113 |
)% |
|
(1,324 |
) |
|
238 |
|
(656 |
)% |
||||||||
Other income |
|
|
466 |
|
|
|
424 |
|
|
10 |
% |
|
|
1,252 |
|
|
(63 |
)% |
|
|
2,060 |
|
|
|
2,822 |
|
|
(27 |
)% |
Total non-interest income |
|
1,373 |
|
|
1,111 |
|
24 |
% |
|
2,386 |
|
(42 |
)% |
|
4,336 |
|
|
11,447 |
|
(62 |
)% |
||||||||
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Salaries and employee benefits |
|
9,049 |
|
|
7,517 |
|
20 |
% |
|
7,310 |
|
24 |
% |
|
30,655 |
|
|
29,503 |
|
4 |
% |
||||||||
Occupancy and equipment |
|
|
2,243 |
|
|
|
2,219 |
|
|
1 |
% |
|
|
2,455 |
|
|
(9 |
)% |
|
|
8,788 |
|
|
|
8,988 |
|
|
(2 |
)% |
Professional fees |
|
8,859 |
|
|
12,207 |
|
(27 |
)% |
|
2,529 |
|
250 |
% |
|
32,646 |
|
|
5,984 |
|
446 |
% |
||||||||
Advertising and marketing |
|
|
115 |
|
|
|
71 |
|
|
62 |
% |
|
|
250 |
|
|
(54 |
)% |
|
|
529 |
|
|
|
1,364 |
|
|
(61 |
)% |
FDIC assessments |
|
553 |
|
|
956 |
|
(42 |
)% |
|
(4 |
) |
N/M |
|
|
1,768 |
|
|
436 |
|
306 |
% |
||||||||
Data processing |
|
|
380 |
|
|
|
392 |
|
|
(3 |
)% |
|
|
351 |
|
|
8 |
% |
|
|
1,458 |
|
|
|
1,233 |
|
|
18 |
% |
Provision for mortgage repurchase liability |
|
2,502 |
|
|
- |
|
100 |
% |
|
7,823 |
|
(68 |
)% |
|
2,527 |
|
|
7,823 |
|
(68 |
)% |
||||||||
Provision (recovery) for contingent losses |
|
|
(10,000 |
) |
|
|
- |
|
|
(100 |
)% |
|
|
25,000 |
|
|
(140 |
)% |
|
|
(10,000 |
) |
|
|
25,000 |
|
|
(140 |
)% |
Other |
|
1,155 |
|
|
1,612 |
|
(28 |
)% |
|
1,686 |
|
(31 |
)% |
|
5,741 |
|
|
7,342 |
|
(22 |
)% |
||||||||
Total non-interest expense |
|
|
14,856 |
|
|
|
24,974 |
|
|
(41 |
)% |
|
|
47,400 |
|
|
(69 |
)% |
|
|
74,112 |
|
|
|
87,673 |
|
|
(15 |
)% |
Income (loss) before income taxes |
|
(16,705 |
) |
|
(281 |
) |
N/M |
|
|
(15,505 |
) |
(8 |
)% |
|
(18,876 |
) |
|
44,891 |
|
(142 |
)% |
||||||||
Income tax expense (benefit) |
|
|
(5,012 |
) |
|
|
(170 |
) |
|
N/M |
|
|
|
(1,752 |
) |
|
(186 |
)% |
|
|
(5,909 |
) |
|
|
15,643 |
|
|
(138 |
)% |
Net income (loss) |
$ |
(11,693 |
) |
$ |
(111 |
) |
N/M |
|
$ |
(13,753 |
) |
15 |
% |
$ |
(12,967 |
) |
$ |
29,248 |
|
(144 |
)% |
||||||||
Income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Basic |
$ |
(0.23 |
) |
$ |
(0.00 |
) |
$ |
(0.28 |
) |
$ |
(0.26 |
) |
$ |
0.57 |
|
||||||||||||||
Diluted |
|
$ |
(0.23 |
) |
|
$ |
(0.00 |
) |
|
|
|
$ |
(0.28 |
) |
|
|
|
$ |
(0.26 |
) |
|
$ |
0.57 |
|
|
|
|||
Weighted average common shares outstanding: |
|||||||||||||||||||||||||||||
Basic |
|
|
49,843,925 |
|
|
|
49,843,925 |
|
|
|
|
|
50,006,001 |
|
|
|
|
|
49,840,882 |
|
|
|
51,115,986 |
|
|
|
|||
Diluted |
|
49,843,925 |
|
|
49,843,925 |
|
|
50,006,001 |
|
|
49,840,882 |
|
|
51,127,879 |
|
||||||||||||||
N/M- not meaningful |
|||||||||||||||||||||||||||||
Sterling Bancorp, Inc. |
|
||||||||||
Selected Financial Data (Unaudited) |
|
||||||||||
|
Three Months Ended |
|
Year Ended |
|
|||||||
Performance Ratios: |
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
||||||
Return on average assets |
|
(1.19)% |
|
(0.01)% |
|
(1.67)% |
|
(0.35)% |
|
|
|
Return on average shareholders' equity |
|
(13.92)% |
|
(0.13)% |
|
(15.39)% |
|
(3.85)% |
|
|
|
Return on average tangible common equity (2) |
|
(13.92)% |
|
(0.13)% |
|
(15.40)% |
|
(3.85)% |
|
|
|
Yield on earning assets |
|
|
|
|
|
|
|
|
|
|
|
Cost of average interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
|
|
|
|
|
|
|
|
|
Net interest margin |
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Efficiency Ratio is computed as the ratio of non-interest expense divided by the sum of net interest income and non-interest income. |
|||||||||||
(2) Non-GAAP |
|||||||||||
Sterling Bancorp, Inc. |
||||||||||||||||||||||||||||||||||||
Yield Analysis and Net Interest Income (Unaudited) |
||||||||||||||||||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||||||||||||
December 31, 2020 |
September 30, 2020 |
December 31, 2019 |
||||||||||||||||||||||||||||||||||
(dollars in thousands) |
Average
|
Interest |
Average
|
Average
|
Interest |
Average
|
Average
|
Interest |
Average
|
|||||||||||||||||||||||||||
Interest earning assets |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Loans (1) |
|
$ |
2,608,437 |
$ |
33,758 |
5.18 |
% |
$ |
2,723,381 |
$ |
35,918 |
5.28 |
% |
$ |
2,938,052 |
$ |
41,581 |
5.66 |
% |
|||||||||||||||||
Securities, includes restricted stock |
|
|
324,978 |
|
646 |
0.80 |
% |
|
276,643 |
|
901 |
1.30 |
% |
|
189,336 |
|
1,225 |
2.59 |
% |
|||||||||||||||||
Other interest earning assets |
|
|
950,405 |
|
257 |
0.11 |
% |
|
757,657 |
|
211 |
0.11 |
% |
|
79,310 |
|
378 |
1.91 |
% |
|||||||||||||||||
Total interest earning assets |
|
$ |
3,883,820 |
$ |
34,661 |
3.57 |
% |
$ |
3,757,681 |
$ |
37,030 |
3.94 |
% |
$ |
3,206,698 |
$ |
43,184 |
5.39 |
% |
|||||||||||||||||
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Money Market, Savings and NOW |
|
$ |
1,371,194 |
$ |
1,554 |
0.45 |
% |
$ |
1,282,452 |
$ |
2,315 |
0.72 |
% |
$ |
1,271,702 |
$ |
3,682 |
1.15 |
% |
|||||||||||||||||
Time deposits |
|
|
1,680,865 |
|
6,700 |
1.58 |
% |
|
1,642,492 |
|
6,973 |
1.68 |
% |
|
1,190,740 |
|
7,582 |
2.53 |
% |
|||||||||||||||||
Total interest-bearing deposits |
|
|
3,052,059 |
|
8,254 |
1.07 |
% |
|
2,924,944 |
|
9,288 |
1.26 |
% |
|
2,462,442 |
|
11,264 |
1.81 |
% |
|||||||||||||||||
FHLB borrowings |
|
318,000 |
|
857 |
1.05 |
% |
|
318,783 |
|
859 |
1.05 |
% |
|
230,492 |
|
784 |
1.33 |
% |
||||||||||||||||||
Subordinated debt |
|
|
65,316 |
|
1,180 |
7.23 |
% |
|
65,273 |
|
1,178 |
7.22 |
% |
|
65,157 |
|
1,177 |
7.23 |
% |
|||||||||||||||||
Total borrowings |
|
|
383,316 |
|
2,037 |
2.08 |
% |
|
384,056 |
|
2,037 |
2.08 |
% |
|
295,649 |
|
1,961 |
2.60 |
% |
|||||||||||||||||
Total interest-bearing liabilities |
|
$ |
3,435,375 |
|
10,291 |
1.19 |
% |
$ |
3,309,000 |
|
11,325 |
1.36 |
% |
$ |
2,758,091 |
|
13,225 |
1.90 |
% |
|||||||||||||||||
Net interest income and spread (2) |
|
|
$ |
24,370 |
2.38 |
% |
|
$ |
25,705 |
2.58 |
% |
|
$ |
29,959 |
3.49 |
% |
||||||||||||||||||||
Net interest margin (2) |
|
|
|
2.51 |
% |
|
|
2.74 |
% |
|
|
3.74 |
% |
|||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
(1) Nonaccrual loans are included in the respective average loan balances. Income, if any, on such loans is recognized on a cash basis. |
||||||||||||||||||||||||||||||||||||
(2) Interest income does not include taxable equivalent adjustments. |
||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||
Year Ended |
||||||||||||||||||||
December 31, 2020 |
December 31, 2019 |
|||||||||||||||||||
(dollars in thousands) |
|
Average
|
Interest |
Average
|
Average
|
Interest |
Average
|
|||||||||||||
Interest earning assets |
|
|
|
|
|
|
|
|||||||||||||
Loans (1） |
|
$ |
2,756,916 |
$ |
146,702 |
5.32 |
% |
$ |
2,961,472 |
$ |
168,955 |
5.71 |
% |
|||||||
Securities, includes restricted stock |
|
|
251,003 |
|
3,618 |
1.44 |
% |
|
178,032 |
|
4,976 |
2.80 |
% |
|||||||
Other interest earning assets |
|
|
585,484 |
|
1,043 |
0.18 |
% |
|
59,462 |
|
1,438 |
2.42 |
% |
|||||||
Total interest earning assets |
|
$ |
3,593,403 |
$ |
151,363 |
4.21 |
% |
$ |
3,198,966 |
$ |
175,369 |
5.48 |
% |
|||||||
Interest-bearing liabilities |
|
|
|
|
|
|
|
|||||||||||||
Money Market, Savings, NOW |
|
$ |
1,281,880 |
$ |
9,435 |
0.74 |
% |
$ |
1,350,013 |
$ |
18,479 |
1.37 |
% |
|||||||
Time deposits |
|
|
1,491,151 |
|
28,047 |
1.88 |
% |
|
1,094,911 |
|
27,214 |
2.49 |
% |
|||||||
Total interest-bearing deposits |
|
|
2,773,031 |
|
37,482 |
1.35 |
% |
|
2,444,924 |
|
45,693 |
1.87 |
% |
|||||||
FHLB borrowings |
|
308,368 |
|
3,403 |
1.10 |
% |
|
262,939 |
|
3,991 |
1.52 |
% |
||||||||
Subordinated debt |
|
|
65,255 |
|
4,713 |
7.22 |
% |
|
65,099 |
|
4,701 |
7.22 |
% |
|||||||
Total borrowings |
|
|
373,623 |
|
8,116 |
2.17 |
% |
|
328,038 |
|
8,692 |
2.65 |
% |
|||||||
Total interest-bearing liabilities |
|
$ |
3,146,654 |
|
45,598 |
1.45 |
% |
$ |
2,772,962 |
|
54,385 |
1.96 |
% |
|||||||
Net interest income and spread (2) |
|
|
$ |
105,765 |
2.76 |
% |
|
$ |
120,984 |
3.52 |
% |
|||||||||
Net interest margin (2) |
|
|
|
2.94 |
% |
|
|
3.78 |
% |
|||||||||||
|
||||||||||||||||||||
(1) Nonaccrual loans are included in the respective average loan balances. Income, if any, on such loans is recognized on a cash basis. |
||||||||||||||||||||
(2) Interest income does not include taxable equivalent adjustments. |
||||||||||||||||||||
Sterling Bancorp, Inc. |
||||||||||||||||||
Loan Composition (Unaudited) |
||||||||||||||||||
(dollars in thousands) |
December 31,
|
September 30,
|
%
|
December 31,
|
%
|
|||||||||||||
Residential real estate |
|
$ |
2,033,526 |
|
|
$ |
2,183,546 |
|
|
(7 |
)% |
|
$ |
2,476,866 |
|
|
(18 |
)% |
Commercial real estate |
|
259,958 |
|
|
262,116 |
|
(1 |
)% |
|
240,081 |
|
8 |
% |
|||||
Construction |
|
|
206,581 |
|
|
|
211,460 |
|
|
(2 |
)% |
|
|
178,376 |
|
|
16 |
% |
Commercial lines of credit |
|
6,671 |
|
|
18,452 |
|
(64 |
)% |
|
17,903 |
|
(63 |
)% |
|||||
Other consumer |
|
|
7 |
|
|
|
8 |
|
|
(13 |
)% |
|
|
34 |
|
|
(79 |
)% |
Total loans held for investment |
|
2,506,743 |
|
|
2,675,582 |
|
(6 |
)% |
|
2,913,260 |
|
(14 |
)% |
|||||
Less: allowance for loan losses |
|
|
(72,387 |
) |
|
|
(48,258 |
) |
|
50 |
% |
|
|
(21,730 |
) |
|
233 |
% |
Loans, net |
$ |
2,454,767 |
|
$ |
2,627,324 |
|
(7 |
)% |
$ |
2,891,530 |
|
(15 |
)% |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mortgage loans held for sale |
$ |
22,284 |
|
$ |
3,643 |
|
512 |
% |
$ |
1,337 |
|
N/M |
|
|||||
Total gross loans |
|
$ |
2,529,027 |
|
|
$ |
2,679,225 |
|
|
(6 |
)% |
|
$ |
2,914,597 |
|
|
(13 |
)% |
N/M- not meaningful |
|
|||||||||||||||||
Sterling Bancorp, Inc. |
|||||||||||||||||||
Allowance for Loan Losses (Unaudited) |
|||||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||||
(dollars in thousands) |
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||||
Balance at beginning of period |
|
$ |
48,258 |
|
|
$ |
46,931 |
|
|
$ |
21,204 |
|
$ |
21,730 |
|
|
$ |
21,850 |
|
Provision (recovery) for loan losses |
|
27,592 |
|
|
2,123 |
|
|
450 |
|
54,865 |
|
|
(133 |
) |
|||||
Charge offs |
|
|
(3,486 |
) |
|
|
(815 |
) |
|
|
- |
|
|
(4,301 |
) |
|
|
(176 |
) |
Recoveries |
|
23 |
|
|
19 |
|
|
76 |
|
93 |
|
|
189 |
|
|||||
Balance at end of period |
|
$ |
72,387 |
|
|
$ |
48,258 |
|
|
$ |
21,730 |
|
$ |
72,387 |
|
|
$ |
21,730 |
|
Sterling Bancorp, Inc. |
||||||||||||||||
Deposit Composition (Unaudited) |
||||||||||||||||
(dollars in thousands) |
December 31,
|
September 30,
|
%
|
December 31,
|
%
|
|||||||||||
Noninterest bearing demand deposits |
|
$ |
58,458 |
|
$ |
66,316 |
|
(12 |
)% |
|
$ |
77,563 |
|
(25 |
)% |
|
Money Market, Savings and NOW |
|
1,393,985 |
|
1,340,971 |
4 |
% |
|
1,263,801 |
10 |
% |
||||||
Time deposits |
|
|
1,646,523 |
|
|
1,687,883 |
|
(2 |
)% |
|
|
1,154,076 |
|
43 |
% |
|
Total deposits |
$ |
3,098,966 |
$ |
3,095,170 |
0 |
% |
$ |
2,495,440 |
24 |
% |
||||||
|
||||||||||||||||
Sterling Bancorp, Inc. |
|
|
|
|
|
|
||||||
Credit Quality Ratios (Unaudited) |
||||||||||||
|
|
At and for the Three Months Ended |
||||||||||
(dollars in thousands) |
|
December 31,
|
September 30,
|
December 31,
|
||||||||
Credit Quality Data |
||||||||||||
Nonperforming loans (1) |
|
$ |
86,470 |
|
|
$ |
83,162 |
|
|
$ |
14,782 |
|
Nonperforming loans to total loans |
|
3.45 |
% |
|
3.11 |
% |
|
0.51 |
% |
|||
Troubled debt restructurings (2) |
|
|
8,246 |
|
|
|
14,983 |
|
|
|
13,570 |
|
Nonaccrual loans held for sale |
|
19,375 |
|
|
- |
|
|
- |
|
|||
Nonperforming assets (3) |
|
|
114,258 |
|
|
|
98,312 |
|
|
|
28,352 |
|
Nonperforming assets to total assets |
|
2.92 |
% |
|
2.50 |
% |
|
0.87 |
% |
|||
Allowance for loan losses to total loans |
|
|
2.89 |
% |
|
|
1.80 |
% |
|
|
0.75 |
% |
Allowance for loan losses to nonperforming loans |
|
84 |
% |
|
58 |
% |
|
147 |
% |
|||
Net charge offs to average loans |
|
|
0.13 |
% |
|
|
0.03 |
% |
|
|
0.00 |
% |
|
||||||||||||
(1) Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing interest. |
||||||||||||
(2) Troubled debt restructurings exclude those loans presented as nonaccrual or past due 90 days or more and still accruing interest. |
||||||||||||
(3) Nonperforming assets include nonperforming loans, nonaccrual loans held for sale, loans modified under troubled debt restructurings and other repossessed assets. |
||||||||||||
|
|
|
|
|
|
|
||||||
Return on Average Tangible Common Equity Reconciliations (non-GAAP)
Average tangible common equity and return on average tangible common equity are non-GAAP disclosures. Sterling’s management uses these non-GAAP financial measures to assess the Company’s capital strength and business performance. Average tangible common equity excludes the effect of intangible assets. This non-GAAP financial measure should not be considered a substitute for those comparable measures that are similarly titled that are determined in accordance with U.S. GAAP that may be used by other companies. The following is a reconciliation of average tangible common equity to the average shareholders’ equity, its most comparable GAAP measure, as well as a calculation of return on average tangible common equity as of December 31, 2020 and 2019, and September 30, 2020.
Sterling Bancorp, Inc. |
||||||||||||||||||||
GAAP to Non-GAAP Reconciliations |
||||||||||||||||||||
At and for the Three Months Ended |
At and for the Year Ended |
|||||||||||||||||||
(dollars in thousands) |
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||||
Net Income (loss) |
|
$ |
(11,693 |
) |
|
$ |
(111 |
) |
|
$ |
(13,753 |
) |
|
$ |
(12,967 |
) |
|
$ |
29,248 |
|
Average shareholders' equity |
|
336,120 |
|
|
336,116 |
|
|
357,370 |
|
|
336,978 |
|
|
347,849 |
|
|||||
Adjustment |
|
|
|
|
|
|
|
|
|
|
||||||||||
Customer-related intangible |
|
- |
|
|
- |
|
|
(75 |
) |
|
- |
|
|
(243 |
) |
|||||
Average tangible common equity |
|
$ |
336,120 |
|
|
$ |
336,116 |
|
|
$ |
357,295 |
|
|
$ |
336,978 |
|
|
$ |
347,606 |
|
Return on average tangible common equity |
|
(13.92 |
)% |
* |
|
(0.13 |
)% |
* |
|
(15.40 |
)% |
* |
|
(3.85 |
)% |
|
8.41 |
% |
||
*Annualized |
||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20210201005636/en/
FAQ
What were Sterling Bancorp's earnings for Q4 2020?
How did Sterling Bancorp perform in 2020?
What is the loan loss provision for Sterling Bancorp in 2020?
What is the total deposits figure for Sterling Bancorp as of December 31, 2020?
What is the status of Sterling Bancorp's shareholders' equity?
