Sterling Bancorp Reports Fourth Quarter and Full Year 2022 Financial Results
Sterling Bancorp reported its financial results for the quarter and year ending December 31, 2022. The Company experienced a net loss of $0.2 million in Q4 2022, translating to $(0.00 per diluted share, down from a net income of $1.2 million in Q3 2022. For the full year, net income was $4.0 million or $0.08 per diluted share, significantly reduced from $23.4 million in 2021. The net interest margin was 3.09% for Q4 and 3.06% for 2022. The Company’s total deposits stood at $2.0 billion, with nonperforming assets at $38.3 million. Legal investigations continue to impact financial performance and resources.
- Total shareholders' equity increased to $330.9 million at year-end 2022.
- Net recoveries of $(0.3 million) for Q4 2022 compared to previous net charge-offs.
- Net loss of $(0.2 million) in Q4 2022 compared to net income of $1.2 million in Q3 2022.
- Net income decreased to $4.0 million for 2022 from $23.4 million in 2021.
- Ongoing DOJ investigation consuming significant resources and impacting profitability.
- Total deposits decreased by $307.7 million, or 14%, from $2.3 billion in 2021.
Fourth Quarter and Year-End 2022 Highlights
-
Fourth quarter net loss of
$(0.2) million $(0.00) $4.0 million $0.08 -
Fourth quarter net interest margin of
3.09% ; full year net interest margin of3.06% -
Fourth quarter provision (recovery) of loan losses of
$(179) thousand $(9.9) million -
Ratio of allowance for loan losses to total loans held for investment of
2.74% -
Total gross loans of
$1.7 billion -
Purchase of residential mortgage loans with unpaid principal of
$31.3 million -
Nonperforming assets were
$38.3 million $81.3 million -
Fourth quarter non-interest expense of
$18.9 million $79.4 million -
Total deposits of
$2.0 billion -
Shareholders’ equity of
$330.9 million -
The Bank’s leverage ratio of
16.15% , a total risk-based capital ratio of27.29% and a common equity tier one ratio of26.02% continue to be in excess of minimum ratios required to be considered “well-capitalized” -
The Company’s consolidated leverage ratio of
14.29% , total risk-based capital ratio of26.85% and common equity tier one ratio of23.01% continue to exceed minimum regulatory capital requirements
The Company reported a net loss of
“The Company’s fourth quarter and year-end results reflect a continuation of both the accomplishments and challenges that have characterized the last few years. The long-running saga of the Advantage Loan Program continues to be felt in the operating expense lines of our earnings. The institutional damage from this program has been far reaching, and we are finally beginning to enjoy the fruits of our labor. We have tried to right-size the balance sheet in order to maintain strong capital levels, improve margins and effectively utilize liquidity. The legal investigation and consultant costs have swamped our profitability in most quarters. We have been successful in building a strong internal control environment and carefully addressing a long list of deficiencies. Those successes were realized in the closure of the Formal Agreement entered into with the OCC in 2019. Nonetheless, the
Balance Sheet
Total Assets – Total assets were
Cash and due from banks increased
Total gross loans held for investment of
Cash surrender value of company-owned life insurance policies was
Total Deposits – Total deposits were
Money market, savings and NOW deposits of
Borrowings –
Capital – Total shareholders’ equity was
The Bank exceeded all regulatory capital requirements required to be considered “well-capitalized” as of
| To Be Well Capitalized |
At 2022 |
||
| Total adjusted capital to risk-weighted assets |
|
|
|
| Tier 1 (core) capital to risk-weighted assets |
|
|
|
| Common Equity Tier 1 (CET1) |
|
|
|
| Tier 1 (core) capital to adjusted tangible assets (leverage ratio) |
|
|
| Minimum Requirements |
At 2022 |
||
| Total adjusted capital to risk-weighted assets |
|
|
|
| Tier 1 (core) capital to risk-weighted assets |
|
|
|
| Common Equity Tier 1 (CET1) |
|
|
|
| Tier 1 (core) capital to adjusted tangible assets (leverage ratio) |
|
|
Asset Quality and Provision (Recovery) for Loan Losses – Nonperforming assets at
Reflective of our overall improvement in asset quality that continued into 2022, we recorded a recovery of loan losses of
During the fourth quarter of 2022, net recoveries were
“So far, the substantial increase in interest rates has helped the yield on repricing loans and liquidity. After years of heavily suppressed rates, consumers are also enjoying higher yields on their deposit products. Rate competition in the banking industry has seen somewhat of a rebirth. Maintaining a healthy net interest margin will be critically important to the Company’s profitability. Additionally, there continues to be very significant signs of a slowing economy. Employment levels, especially in the technology sector, are but one worrisome sign. In addition, pressure on corporate profits and ballooning government budget deficits will likely feed the contraction and continued inflation. I believe the de-risking measures taken in 2022 will help cushion Sterling for the credit risk expansion that is now beginning to be seen,” said Mr. O’Brien.
Results of Operations
Net Interest Income and Net Interest Margin – Net interest income for the fourth quarter of 2022 was
Net interest income for the year ended
Non-Interest Income – Non-interest income for the fourth quarter of 2022 was
Non-interest income for the year ended
Non-Interest Expense – Non-interest expense for the fourth quarter of 2022 was
Non-interest expense for the year ended
Other non-interest expense for the year ended
In the third quarter of 2022, the Company entered into a Consent Order with the OCC, resolving the formal investigation by the OCC. Pursuant to the Consent Order, the Bank paid a civil money penalty of
The Company remains under investigation by the
Mr. O’Brien stated, “I am proud of our extensive remediation efforts in addressing the many compliance issues and of our commitment to fully cooperate with the governmental investigations. As with the prior resolution of the OCC investigation resulting in the payment of a civil money penalty, we understand that the Company may incur additional penalties and other payments in order to resolve the
Income Tax Expense – For the year ended
Conference Call and Webcast
Management will host a conference call on
A replay of the conference call may be accessed through
About
Forward-Looking Statements
This press release contains certain statements that are, or may be deemed to be, “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, regarding the Company’s plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “attribute,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “outlook,” “aim,” “would” and “annualized,” or the negative versions of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and they are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. 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
| Consolidated Financial Highlights (Unaudited) | ||||||||||||||||||||
| At and for the Three Months Ended | At and for the Year Ended | |||||||||||||||||||
| (dollars in thousands, except per share data) | 2022 |
2022 |
2021 |
2022 |
2021 |
|||||||||||||||
| Net income (loss) | $ |
(194 |
) |
$ |
1,176 |
|
$ |
8,056 |
|
$ |
4,045 |
|
$ |
23,390 |
|
|||||
| Income (loss) per share, diluted | $ |
0.00 |
|
$ |
0.02 |
|
$ |
0.16 |
|
$ |
0.08 |
|
$ |
0.47 |
|
|||||
| Net interest income | $ |
18,521 |
|
$ |
19,539 |
|
$ |
21,718 |
|
$ |
78,802 |
|
$ |
91,180 |
|
|||||
| Net interest margin |
|
3.09 |
% |
|
3.19 |
% |
|
2.94 |
% |
|
3.06 |
% |
|
2.71 |
% |
|||||
| Non-interest income | $ |
248 |
|
$ |
(357 |
) |
$ |
3,564 |
|
$ |
1,347 |
|
$ |
5,806 |
|
|||||
| Non-interest expense | $ |
18,871 |
|
$ |
21,621 |
|
$ |
19,864 |
|
$ |
79,409 |
|
$ |
72,218 |
|
|||||
| Loans, net of allowance for loan losses | $ |
1,613,385 |
|
$ |
1,636,266 |
|
$ |
1,956,266 |
|
$ |
1,613,385 |
|
$ |
1,956,266 |
|
|||||
| Total deposits | $ |
1,954,037 |
|
$ |
1,951,014 |
|
$ |
2,261,735 |
|
$ |
1,954,037 |
|
$ |
2,261,735 |
|
|||||
| Asset Quality | ||||||||||||||||||||
| Nonperforming loans | $ |
33,725 |
|
$ |
35,879 |
|
$ |
62,654 |
|
$ |
33,725 |
|
$ |
62,654 |
|
|||||
| Allowance for loan losses to total loans |
|
2.74 |
% |
|
2.70 |
% |
|
2.81 |
% |
|
2.74 |
% |
|
2.81 |
% |
|||||
| Allowance for loan losses to nonaccrual loans |
|
135 |
% |
|
127 |
% |
|
90 |
% |
|
135 |
% |
|
90 |
% |
|||||
| Nonaccrual loans to total loans outstanding |
|
2.03 |
% |
|
2.13 |
% |
|
3.11 |
% |
|
2.03 |
% |
|
3.11 |
% |
|||||
| Net charge offs (recoveries) during the period to average loans outstanding during the period |
|
(0.02 |
)% |
|
0.12 |
% |
|
0.35 |
% |
|
0.06 |
% |
|
0.32 |
% |
|||||
| Provision (recovery) for loan losses | $ |
(179 |
) |
$ |
(4,357 |
) |
$ |
(6,119 |
) |
$ |
(9,934 |
) |
$ |
(8,265 |
) |
|||||
| Net charge offs (recoveries) | $ |
(281 |
) |
$ |
2,047 |
|
$ |
7,571 |
|
$ |
1,150 |
|
$ |
7,574 |
|
|||||
| Performance Ratios | ||||||||||||||||||||
| Return on average assets |
|
(0.03 |
)% |
|
0.19 |
% |
|
1.07 |
% |
|
0.15 |
% |
|
0.69 |
% |
|||||
| Return on average shareholders' equity |
|
(0.23 |
)% |
|
1.39 |
% |
|
9.49 |
% |
|
1.19 |
% |
|
7.07 |
% |
|||||
| Efficiency ratio (1) |
|
100.54 |
% |
|
112.72 |
% |
|
78.57 |
% |
|
99.08 |
% |
|
74.46 |
% |
|||||
| Yield on average interest-earning assets |
|
4.54 |
% |
|
4.06 |
% |
|
3.51 |
% |
|
3.88 |
% |
|
3.47 |
% |
|||||
| Cost of average interest-bearing liabilities |
|
1.74 |
% |
|
1.05 |
% |
|
0.66 |
% |
|
0.98 |
% |
|
0.86 |
% |
|||||
| Net interest spread |
|
2.80 |
% |
|
3.01 |
% |
|
2.85 |
% |
|
2.90 |
% |
|
2.61 |
% |
|||||
| Capital Ratios(2) | ||||||||||||||||||||
| Regulatory and Other Capital Ratios— Consolidated: | ||||||||||||||||||||
| Total adjusted capital to risk-weighted assets |
|
26.85 |
% |
|
26.21 |
% |
|
21.24 |
% |
|
26.85 |
% |
|
21.24 |
% |
|||||
| Tier 1 (core) capital to risk-weighted assets |
|
23.01 |
% |
|
22.43 |
% |
|
17.34 |
% |
|
23.01 |
% |
|
17.34 |
% |
|||||
| Common Equity Tier 1 (CET1) |
|
23.01 |
% |
|
22.43 |
% |
|
17.34 |
% |
|
23.01 |
% |
|
17.34 |
% |
|||||
| Tier 1 (core) capital to adjusted tangible assets (leverage ratio) |
|
14.29 |
% |
|
14.09 |
% |
|
11.47 |
% |
|
14.29 |
% |
|
11.47 |
% |
|||||
| Regulatory and Other Capital Ratios—Bank: | ||||||||||||||||||||
| Total adjusted capital to risk-weighted assets |
|
27.29 |
% |
|
26.60 |
% |
|
20.55 |
% |
|
27.29 |
% |
|
20.55 |
% |
|||||
| Tier 1 (core) capital to risk-weighted assets |
|
26.02 |
% |
|
25.33 |
% |
|
19.28 |
% |
|
26.02 |
% |
|
19.28 |
% |
|||||
| Common Equity Tier 1 (CET1) |
|
26.02 |
% |
|
25.33 |
% |
|
19.28 |
% |
|
26.02 |
% |
|
19.28 |
% |
|||||
| Tier 1 (core) capital to adjusted tangible assets (leverage ratio) |
|
16.15 |
% |
|
15.88 |
% |
|
12.77 |
% |
|
16.15 |
% |
|
12.77 |
% |
|||||
| (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) |
||||||||||||||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||||||||||||
| (dollars in thousands) | 2022 |
2022 |
% change |
2021 |
% change |
|||||||||||||
| Assets | ||||||||||||||||||
| Cash and due from banks | $ |
379,798 |
|
$ |
352,404 |
|
8 |
% |
$ |
411,676 |
|
(8 |
)% |
|||||
| Interest-bearing time deposits with other banks |
|
934 |
|
|
1,183 |
|
(21 |
)% |
|
1,183 |
|
(21 |
)% |
|||||
| Investment securities |
|
348,200 |
|
|
353,219 |
|
(1 |
)% |
|
313,879 |
|
11 |
% |
|||||
| Loans held for sale |
|
7,725 |
|
|
8,833 |
|
(13 |
)% |
|
64,987 |
|
(88 |
)% |
|||||
| Loans, net of allowance for loan losses of |
|
1,613,385 |
|
|
1,636,266 |
|
(1 |
)% |
|
1,956,266 |
|
(18 |
)% |
|||||
| Accrued interest receivable |
|
7,829 |
|
|
7,061 |
|
11 |
% |
|
7,696 |
|
2 |
% |
|||||
| Mortgage servicing rights, net |
|
1,794 |
|
|
1,842 |
|
(3 |
)% |
|
2,722 |
|
(34 |
)% |
|||||
| Leasehold improvements and equipment, net |
|
6,301 |
|
|
6,585 |
|
(4 |
)% |
|
7,421 |
|
(15 |
)% |
|||||
| Operating lease right-of-use assets |
|
14,800 |
|
|
15,467 |
|
(4 |
)% |
|
18,184 |
|
(19 |
)% |
|||||
|
20,288 |
|
|
20,288 |
|
0 |
% |
|
22,950 |
|
(12 |
)% |
||||||
| Company-owned life insurance |
|
8,501 |
|
|
8,448 |
|
1 |
% |
|
33,033 |
|
(74 |
)% |
|||||
| Deferred tax asset, net |
|
23,704 |
|
|
23,907 |
|
(1 |
)% |
|
21,426 |
|
11 |
% |
|||||
| Other assets |
|
11,476 |
|
|
12,401 |
|
(7 |
)% |
|
15,407 |
|
(26 |
)% |
|||||
| Total assets | $ |
2,444,735 |
|
$ |
2,447,904 |
|
0 |
% |
$ |
2,876,830 |
|
(15 |
)% |
|||||
| Liabilities | ||||||||||||||||||
| Noninterest-bearing deposits | $ |
53,041 |
|
$ |
70,063 |
|
(24 |
)% |
$ |
63,760 |
|
(17 |
)% |
|||||
| Interest-bearing deposits |
|
1,900,996 |
|
|
1,880,951 |
|
1 |
% |
|
2,197,975 |
|
(14 |
)% |
|||||
| Total deposits |
|
1,954,037 |
|
|
1,951,014 |
|
0 |
% |
|
2,261,735 |
|
(14 |
)% |
|||||
|
50,000 |
|
|
50,000 |
|
0 |
% |
|
150,000 |
|
(67 |
)% |
||||||
| Subordinated notes, net |
|
65,271 |
|
|
65,290 |
|
0 |
% |
|
65,343 |
|
0 |
% |
|||||
| Operating lease liabilities |
|
15,990 |
|
|
16,664 |
|
(4 |
)% |
|
19,400 |
|
(18 |
)% |
|||||
| Accrued expenses and other liabilities |
|
28,571 |
|
|
35,335 |
|
(19 |
)% |
|
36,725 |
|
(22 |
)% |
|||||
| Total liabilities |
|
2,113,869 |
|
|
2,118,303 |
|
0 |
% |
|
2,533,203 |
|
(17 |
)% |
|||||
| 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 50,795,871 shares at |
|
83,295 |
|
|
83,295 |
|
0 |
% |
|
82,157 |
|
1 |
% |
|||||
| Additional paid-in capital |
|
14,808 |
|
|
14,560 |
|
2 |
% |
|
14,124 |
|
5 |
% |
|||||
| Retained earnings |
|
252,288 |
|
|
252,482 |
|
0 |
% |
|
248,243 |
|
2 |
% |
|||||
| Accumulated other comprehensive loss |
|
(19,525 |
) |
|
(20,736 |
) |
6 |
% |
|
(897 |
) |
N/M |
|
|||||
| Total shareholders’ equity |
|
330,866 |
|
|
329,601 |
|
0 |
% |
|
343,627 |
|
(4 |
)% |
|||||
| Total liabilities and shareholders’ equity | $ |
2,444,735 |
|
$ |
2,447,904 |
|
0 |
% |
$ |
2,876,830 |
|
(15 |
)% |
|||||
| N/M - Not Meaningful | ||||||||||||||||||
| Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | 2022 |
2022 |
% change |
2021 |
% change |
2022 |
2021 |
% change |
|||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ |
21,786 |
|
$ |
20,975 |
|
4 |
% |
$ |
25,106 |
|
(13 |
)% |
$ |
87,375 |
|
$ |
113,822 |
|
(23 |
)% |
||||||||
| Interest and dividends on investment securities and restricted stock |
|
2,293 |
|
|
1,945 |
|
18 |
% |
|
644 |
|
N/M |
|
|
6,426 |
|
|
1,794 |
|
N/M |
|
||||||||
| Other interest |
|
3,200 |
|
|
1,925 |
|
66 |
% |
|
182 |
|
N/M |
|
|
6,131 |
|
|
925 |
|
N/M |
|
||||||||
| Total interest income |
|
27,279 |
|
|
24,845 |
|
10 |
% |
|
25,932 |
|
5 |
% |
|
99,932 |
|
|
116,541 |
|
(14 |
)% |
||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Interest on deposits |
|
6,922 |
|
|
3,724 |
|
86 |
% |
|
2,637 |
|
N/M |
|
|
14,992 |
|
|
18,116 |
|
(17 |
)% |
||||||||
| Interest on |
|
250 |
|
|
253 |
|
(1 |
)% |
|
607 |
|
(59 |
)% |
|
1,169 |
|
|
3,118 |
|
(63 |
)% |
||||||||
| Interest on subordinated notes |
|
1,586 |
|
|
1,329 |
|
19 |
% |
|
970 |
|
64 |
% |
|
4,969 |
|
|
4,127 |
|
20 |
% |
||||||||
| Total interest expense |
|
8,758 |
|
|
5,306 |
|
65 |
% |
|
4,214 |
|
N/M |
|
|
21,130 |
|
|
25,361 |
|
(17 |
)% |
||||||||
| Net interest income |
|
18,521 |
|
|
19,539 |
|
(5 |
)% |
|
21,718 |
|
(15 |
)% |
|
78,802 |
|
|
91,180 |
|
(14 |
)% |
||||||||
| Provision (recovery) for loan losses |
|
(179 |
) |
|
(4,357 |
) |
(96 |
)% |
|
(6,119 |
) |
(97 |
)% |
|
(9,934 |
) |
|
(8,265 |
) |
20 |
% |
||||||||
| Net interest income after provision (recovery) for loan losses |
|
18,700 |
|
|
23,896 |
|
(22 |
)% |
|
27,837 |
|
(33 |
)% |
|
88,736 |
|
|
99,445 |
|
(11 |
)% |
||||||||
| Non-interest income | |||||||||||||||||||||||||||||
| Service charges and fees |
|
84 |
|
|
124 |
|
(32 |
)% |
|
86 |
|
(2 |
)% |
|
435 |
|
|
509 |
|
(15 |
)% |
||||||||
| Gain on sale of investment securities |
|
32 |
|
|
— |
|
N/M |
|
|
— |
|
N/M |
|
|
32 |
|
|
— |
|
N/M |
|
||||||||
| Gain (loss) on sale of mortgage loans held for sale |
|
(57 |
) |
|
— |
|
N/M |
|
|
15 |
|
N/M |
|
|
143 |
|
|
634 |
|
(77 |
)% |
||||||||
| Unrealized gain (loss) on equity securities |
|
10 |
|
|
(184 |
) |
N/M |
|
|
(43 |
) |
N/M |
|
|
(580 |
) |
|
(142 |
) |
N/M |
|
||||||||
| Gain on sale of branch office |
|
— |
|
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
1,417 |
|
(100 |
)% |
||||||||
| Net servicing income (loss) |
|
98 |
|
|
(384 |
) |
N/M |
|
|
161 |
|
(39 |
)% |
|
(20 |
) |
|
(1,208 |
) |
(98 |
)% |
||||||||
| Income on cash surrender value of company-owned life insurance |
|
81 |
|
|
87 |
|
(7 |
)% |
|
326 |
|
(75 |
)% |
|
751 |
|
|
1,286 |
|
(42 |
)% |
||||||||
| Other |
|
— |
|
|
— |
|
— |
|
|
3,019 |
|
(100 |
)% |
|
586 |
|
|
3,310 |
|
82 |
% |
||||||||
| Total non-interest income |
|
248 |
|
|
(357 |
) |
N/M |
|
|
3,564 |
|
(93 |
)% |
|
1,347 |
|
|
5,806 |
|
(77 |
)% |
||||||||
| Non-interest expense | |||||||||||||||||||||||||||||
| Salaries and employee benefits |
|
8,985 |
|
|
9,336 |
|
(4 |
)% |
|
8,920 |
|
1 |
% |
|
33,507 |
|
|
28,220 |
|
19 |
% |
||||||||
| Occupancy and equipment |
|
2,216 |
|
|
2,112 |
|
5 |
% |
|
2,268 |
|
(2 |
)% |
|
8,657 |
|
|
9,108 |
|
(5 |
)% |
||||||||
| Professional fees |
|
5,929 |
|
|
5,756 |
|
3 |
% |
|
6,209 |
|
(5 |
)% |
|
23,908 |
|
|
24,709 |
|
(3 |
)% |
||||||||
|
115 |
|
|
316 |
|
(64 |
)% |
|
393 |
|
(71 |
)% |
|
1,146 |
|
|
2,029 |
|
(44 |
)% |
|||||||||
| Data processing |
|
766 |
|
|
725 |
|
6 |
% |
|
711 |
|
8 |
% |
|
3,058 |
|
|
1,900 |
|
61 |
% |
||||||||
| Net provision (recovery) of mortgage repurchase liability |
|
31 |
|
|
(145 |
) |
N/M |
|
|
(271 |
) |
N/M |
|
|
(639 |
) |
|
(1,234 |
) |
48 |
% |
||||||||
| Other |
|
829 |
|
|
3,521 |
|
(76 |
)% |
|
1,634 |
|
(49 |
)% |
|
9,772 |
|
|
7,486 |
|
31 |
% |
||||||||
| Total non-interest expense |
|
18,871 |
|
|
21,621 |
|
(13 |
)% |
|
19,864 |
|
(5 |
)% |
|
79,409 |
|
|
72,218 |
|
10 |
% |
||||||||
| Income before income taxes |
|
77 |
|
|
1,918 |
|
(96 |
)% |
|
11,537 |
|
(99 |
)% |
|
10,674 |
|
|
33,033 |
|
(68 |
)% |
||||||||
| Income tax expense |
|
271 |
|
|
742 |
|
(63 |
)% |
|
3,481 |
|
(92 |
)% |
|
6,629 |
|
|
9,643 |
|
(31 |
)% |
||||||||
| Net income (loss) | $ |
(194 |
) |
$ |
1,176 |
|
N/M |
|
$ |
8,056 |
|
N/M |
|
$ |
4,045 |
|
$ |
23,390 |
|
(83 |
)% |
||||||||
| Income (loss) per share, basic and diluted | $ |
0.00 |
|
$ |
0.02 |
|
$ |
0.16 |
|
$ |
0.08 |
|
$ |
0.47 |
|
||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||||||||
| Basic |
|
50,403,310 |
|
|
50,400,412 |
|
|
50,167,295 |
|
|
50,346,198 |
|
|
50,049,902 |
|
||||||||||||||
| Diluted |
|
50,403,310 |
|
|
50,572,931 |
|
|
50,316,155 |
|
|
50,544,636 |
|
|
50,139,310 |
|
||||||||||||||
| N/M - Not Meaningful | |||||||||||||||||||||||||||||
| Yield Analysis and Net Interest Income (Unaudited) | |||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance |
Interest | Average Yield/Rate |
Average Balance |
Interest | Average Yield Rate |
Average Balance |
Interest | Average Yield/Rate |
||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||||||||
| Loans(1) | |||||||||||||||||||||||||||
| Residential real estate and other consumer | $ |
1,428,840 |
$ |
18,331 |
5.13 |
% |
$ |
1,457,171 |
$ |
17,310 |
4.75 |
% |
$ |
1,775,663 |
$ |
19,593 |
4.41 |
% |
|||||||||
| Commercial real estate |
|
219,414 |
|
2,480 |
4.52 |
% |
|
214,453 |
|
2,458 |
4.58 |
% |
|
281,844 |
|
3,351 |
4.76 |
% |
|||||||||
| Construction |
|
45,486 |
|
957 |
8.42 |
% |
|
52,843 |
|
1,190 |
9.01 |
% |
|
114,974 |
|
2,139 |
7.44 |
% |
|||||||||
| Commercial lines of credit |
|
1,389 |
|
18 |
5.18 |
% |
|
1,404 |
|
17 |
4.84 |
% |
|
1,622 |
|
23 |
5.67 |
% |
|||||||||
| Total loans |
|
1,695,129 |
|
21,786 |
5.14 |
% |
|
1,725,871 |
|
20,975 |
4.86 |
% |
|
2,174,103 |
|
25,106 |
4.62 |
% |
|||||||||
| Securities, includes restricted stock(2) |
|
370,460 |
|
2,293 |
2.48 |
% |
|
394,503 |
|
1,945 |
1.97 |
% |
|
300,435 |
|
644 |
0.86 |
% |
|||||||||
| Other interest-earning assets |
|
335,237 |
|
3,200 |
3.82 |
% |
|
328,177 |
|
1,925 |
2.35 |
% |
|
484,631 |
|
182 |
0.15 |
% |
|||||||||
| Total interest-earning assets |
|
2,400,826 |
|
27,279 |
4.54 |
% |
|
2,448,551 |
|
24,845 |
4.06 |
% |
|
2,959,169 |
|
25,932 |
3.51 |
% |
|||||||||
| Noninterest-earning assets | |||||||||||||||||||||||||||
| Cash and due from banks |
|
4,221 |
|
4,083 |
|
4,216 |
|||||||||||||||||||||
| Other assets |
|
28,432 |
|
20,238 |
|
36,201 |
|||||||||||||||||||||
| Total assets | $ |
2,433,479 |
$ |
2,472,872 |
$ |
2,999,586 |
|||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||
| Money market, savings and NOW | $ |
1,078,873 |
$ |
3,490 |
1.28 |
% |
$ |
1,184,601 |
$ |
2,053 |
0.69 |
% |
$ |
1,304,133 |
$ |
711 |
0.22 |
% |
|||||||||
| Time deposits |
|
799,524 |
|
3,432 |
1.70 |
% |
|
711,184 |
|
1,671 |
0.93 |
% |
|
927,129 |
|
1,926 |
0.82 |
% |
|||||||||
| Total interest-bearing deposits |
|
1,878,397 |
|
6,922 |
1.46 |
% |
|
1,895,785 |
|
3,724 |
0.78 |
% |
|
2,231,262 |
|
2,637 |
0.47 |
% |
|||||||||
| FHLB borrowings |
|
50,000 |
|
250 |
1.96 |
% |
|
50,380 |
|
253 |
1.97 |
% |
|
233,413 |
|
607 |
1.02 |
% |
|||||||||
| Subordinated notes, net |
|
65,283 |
|
1,586 |
9.51 |
% |
|
65,301 |
|
1,329 |
7.96 |
% |
|
65,354 |
|
970 |
5.94 |
% |
|||||||||
| Total borrowings |
|
115,283 |
|
1,836 |
6.23 |
% |
|
115,681 |
|
1,582 |
5.35 |
% |
|
298,767 |
|
1,577 |
2.07 |
% |
|||||||||
| Total interest-bearing liabilities |
|
1,993,680 |
|
8,758 |
1.74 |
% |
|
2,011,466 |
|
5,306 |
1.05 |
% |
|
2,530,029 |
|
4,214 |
0.66 |
% |
|||||||||
| Noninterest-bearing liabilities | |||||||||||||||||||||||||||
| Demand deposits |
|
60,615 |
|
74,550 |
|
65,083 |
|||||||||||||||||||||
| Other liabilities |
|
49,036 |
|
50,476 |
|
64,841 |
|||||||||||||||||||||
| Shareholders' equity |
|
330,148 |
|
336,380 |
|
339,633 |
|||||||||||||||||||||
| Total liabilities and shareholders' equity | $ |
2,433,479 |
$ |
2,472,872 |
$ |
2,999,586 |
|||||||||||||||||||||
| Net interest income and spread(2) | $ |
18,521 |
2.80 |
% |
$ |
19,539 |
3.01 |
% |
$ |
21,718 |
2.85 |
% |
|||||||||||||||
| Net interest margin(2) | 3.09 |
% |
3.19 |
% |
2.94 |
% |
|||||||||||||||||||||
| (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 equivalence adjustments. | |||||||||||||||||||||||||||
| Year Ended | |||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance |
Interest | Average Yield/Rate |
Average Balance |
Interest | Average Yield/Rate |
|||||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||||||||
| Loans(1) | |||||||||||||||||||||||||||
| Residential real estate and other consumer | $ |
1,524,373 |
$ |
71,229 |
4.67 |
% |
$ |
1,910,078 |
$ |
89,985 |
4.71 |
% |
|||||||||||||||
| Commercial real estate |
|
225,480 |
|
10,921 |
4.84 |
% |
|
270,564 |
|
13,400 |
4.95 |
% |
|||||||||||||||
| Construction |
|
63,841 |
|
5,179 |
8.11 |
% |
|
154,920 |
|
10,235 |
6.61 |
% |
|||||||||||||||
| Commercial lines of credit |
|
879 |
|
46 |
5.23 |
% |
|
2,873 |
|
202 |
7.03 |
% |
|||||||||||||||
| Total loans |
|
1,814,573 |
|
87,375 |
4.82 |
% |
|
2,338,435 |
|
113,822 |
4.87 |
% |
|||||||||||||||
| Securities, includes restricted stock(2) |
|
377,959 |
|
6,426 |
1.70 |
% |
|
274,339 |
|
1,794 |
0.65 |
% |
|||||||||||||||
| Other interest-earning assets |
|
380,236 |
|
6,131 |
1.61 |
% |
|
747,837 |
|
925 |
0.12 |
% |
|||||||||||||||
| Total interest-earning assets |
|
2,572,768 |
|
99,932 |
3.88 |
% |
|
3,360,611 |
|
116,541 |
3.47 |
% |
|||||||||||||||
| Noninterest-earning assets | |||||||||||||||||||||||||||
| Cash and due from banks |
|
3,942 |
|
6,652 |
|||||||||||||||||||||||
| Other assets |
|
33,547 |
|
40,881 |
|||||||||||||||||||||||
| Total assets | $ |
2,610,257 |
$ |
3,408,144 |
|||||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||
| Money market, savings and NOW | $ |
1,215,059 |
$ |
7,006 |
0.58 |
% |
$ |
1,340,083 |
$ |
3,224 |
0.24 |
% |
|||||||||||||||
| Time deposits |
|
782,760 |
|
7,986 |
1.02 |
% |
|
1,244,116 |
|
14,892 |
1.20 |
% |
|||||||||||||||
| Total interest-bearing deposits |
|
1,997,819 |
|
14,992 |
0.75 |
% |
|
2,584,199 |
|
18,116 |
0.70 |
% |
|||||||||||||||
| FHLB borrowings |
|
89,822 |
|
1,169 |
1.30 |
% |
|
294,095 |
|
3,118 |
1.06 |
% |
|||||||||||||||
| Subordinated notes, net |
|
65,310 |
|
4,969 |
7.50 |
% |
|
65,367 |
|
4,127 |
6.31 |
% |
|||||||||||||||
| Total borrowings |
|
155,132 |
|
6,138 |
3.90 |
% |
|
359,462 |
|
7,245 |
2.02 |
% |
|||||||||||||||
| Total interest-bearing liabilities |
|
2,152,951 |
|
21,130 |
0.98 |
% |
|
2,943,661 |
|
25,361 |
0.86 |
% |
|||||||||||||||
| Noninterest-bearing liabilities | |||||||||||||||||||||||||||
| Demand deposits |
|
67,953 |
|
62,875 |
|||||||||||||||||||||||
| Other liabilities |
|
50,740 |
|
70,725 |
|||||||||||||||||||||||
| Shareholders' equity |
|
338,613 |
|
330,883 |
|||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ |
2,610,257 |
$ |
3,408,144 |
|||||||||||||||||||||||
| Net interest income and spread(2) | $ |
78,802 |
2.90 |
% |
$ |
91,180 |
2.61 |
% |
|||||||||||||||||||
| Net interest margin(2) | 3.06 |
% |
2.71 |
% |
|||||||||||||||||||||||
| (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 equivalence adjustments. | |||||||||||||||||||||||||||
| Loan Composition (Unaudited) | ||||||||||||||||||||
| (dollars in thousands) | 2022 |
2022 |
% change |
2021 |
% change |
|||||||||||||||
| Residential real estate | $ |
1,391,276 |
|
$ |
1,430,472 |
|
|
(3 |
)% |
$ |
1,704,231 |
|
|
(18 |
)% |
|||||
| Commercial real estate |
|
221,669 |
|
|
199,446 |
|
|
11 |
% |
|
201,240 |
|
|
10 |
% |
|||||
| Construction |
|
44,503 |
|
|
50,320 |
|
|
(12 |
)% |
|
106,759 |
|
|
(58 |
)% |
|||||
| Commercial lines of credit |
|
1,396 |
|
|
1,389 |
|
|
1 |
% |
|
363 |
|
|
N/M |
|
|||||
| Other consumer |
|
5 |
|
|
1 |
|
|
N/M |
|
|
221 |
|
|
(98 |
)% |
|||||
| Total loans held for investment |
|
1,658,849 |
|
|
1,681,628 |
|
|
(1 |
)% |
|
2,012,814 |
|
|
(18 |
)% |
|||||
| Less: allowance for loan losses |
|
(45,464 |
) |
|
(45,362 |
) |
|
0 |
% |
|
(56,548 |
) |
|
20 |
% |
|||||
| Loans, net | $ |
1,613,385 |
|
$ |
1,636,266 |
|
|
(1 |
)% |
$ |
1,956,266 |
|
|
(18 |
)% |
|||||
| Loans held for sale | $ |
7,725 |
|
$ |
8,833 |
|
|
(13 |
)% |
$ |
64,987 |
|
|
(88 |
)% |
|||||
| Total gross loans | $ |
1,666,574 |
|
$ |
1,690,461 |
|
|
(1 |
)% |
$ |
2,077,801 |
|
|
(20 |
)% |
|||||
| N/M - Not Meaningful | ||||||||||||||||||||
| Allowance for Loan Losses (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||
| (dollars in thousands) | 2022 |
2022 |
2021 |
2022 |
2021 |
|||||||||||||||
| Balance at beginning of period | $ |
45,362 |
|
$ |
51,766 |
|
$ |
70,238 |
|
$ |
56,548 |
|
$ |
72,387 |
|
|||||
| Provision (recovery) for loan losses |
|
(179 |
) |
|
(4,357 |
) |
|
(6,119 |
) |
|
(9,934 |
) |
|
(8,265 |
) |
|||||
| Charge offs |
|
— |
|
|
(4,064 |
) |
|
(7,921 |
) |
|
(4,261 |
) |
|
(9,886 |
) |
|||||
| Recoveries |
|
281 |
|
|
2,017 |
|
|
350 |
|
|
3,111 |
|
|
2,312 |
|
|||||
| Balance at end of period | $ |
45,464 |
|
$ |
45,362 |
|
$ |
56,548 |
|
$ |
45,464 |
|
$ |
56,548 |
|
|||||
| Deposit Composition (Unaudited) | ||||||||||||||||||||
| (dollars in thousands) | 2022 |
2022 |
% change |
2021 |
% change |
|||||||||||||||
| Noninterest-bearing deposits | $ |
53,041 |
|
$ |
70,063 |
|
|
(24 |
)% |
$ |
63,760 |
|
|
(17 |
)% |
|||||
| Money Market, Savings and NOW |
|
1,039,263 |
|
|
1,123,375 |
|
|
(7 |
)% |
|
1,306,155 |
|
|
(20 |
)% |
|||||
| Time deposits |
|
861,733 |
|
|
757,576 |
|
|
14 |
% |
|
891,820 |
|
|
(3 |
)% |
|||||
| Total deposits | $ |
1,954,037 |
|
$ |
1,951,014 |
|
|
0 |
% |
$ |
2,261,735 |
|
|
(14 |
)% |
|||||
| Credit Quality Data (Unaudited) | ||||||||||||
| At and for the Three Months Ended | ||||||||||||
| (dollars in thousands) | 2022 |
2022 |
2021 |
|||||||||
| Nonaccrual loans(1): | ||||||||||||
| Residential real estate | $ |
33,690 |
|
$ |
35,843 |
|
$ |
45,675 |
|
|||
| Commercial real estate |
|
— |
|
|
— |
|
|
4,441 |
|
|||
| Construction |
|
— |
|
|
— |
|
|
12,499 |
|
|||
| Total nonaccrual loans(2) |
|
33,690 |
|
|
35,843 |
|
|
62,615 |
|
|||
| Loans past due 90 days or more and still accruing interest |
|
35 |
|
|
36 |
|
|
39 |
|
|||
| Nonperforming loans |
|
33,725 |
|
|
35,879 |
|
|
62,654 |
|
|||
| Other troubled debt restructurings(3) |
|
2,637 |
|
|
2,643 |
|
|
2,664 |
|
|||
| Nonaccrual loans held for sale |
|
1,942 |
|
|
3,657 |
|
|
18,026 |
|
|||
| Nonperforming assets | $ |
38,304 |
|
$ |
42,179 |
|
$ |
83,344 |
|
|||
| Total loans (1) | $ |
1,658,849 |
|
$ |
1,681,628 |
|
$ |
2,012,814 |
|
|||
| Total assets | $ |
2,444,735 |
|
$ |
2,447,904 |
|
$ |
2,876,830 |
|
|||
| Nonaccrual loans to total loans outstanding (2) |
|
2.03 |
% |
|
2.13 |
% |
|
3.11 |
% |
|||
| Nonperforming assets to total assets |
|
1.57 |
% |
|
1.72 |
% |
|
2.90 |
% |
|||
| Allowance for loan losses to total loans |
|
2.74 |
% |
|
2.70 |
% |
|
2.81 |
% |
|||
| Allowance for loan losses to nonaccrual loans |
|
135 |
% |
|
127 |
% |
|
90 |
% |
|||
| Net charge offs (recoveries) during the period to average loans outstanding during the period |
|
(0.02 |
)% |
|
0.12 |
% |
|
0.35 |
% |
|||
| (1) Loans are classified as held for investment and are presented before the allowance for loan losses. | ||||||||||||
| (2) Total nonaccrual loans exclude nonaccrual loans held for sale but include troubled debt restructurings on nonaccrual status. If nonaccrual loans held for sale are included, the ratio of total nonaccrual loans to total gross loans would be |
||||||||||||
| (3) Other troubled debt restructurings exclude those loans presented above as nonaccrual or past due 90 days or more and still accruing interest. | ||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230130005184/en/
Investor Contact:
Executive Vice President and Chief Financial Officer
(248) 359-6624
kzaborney@sterlingbank.com
Source:
FAQ
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