Sterling Bancorp Reports Second Quarter 2023 Financial Results
Second Quarter 2023 Highlights
-
Net income of
$2.5 million $0.05 -
Net interest margin of
2.64% -
Completed the sale of all loans held for sale, primarily consisting of nonperforming and chronically delinquent residential real estate loans; gain on sale of such loans of
$1.7 million -
Recorded provision for (recovery of) credit losses of
$(2.9) million 2.43% -
Nonperforming assets of
$2.1 million 0.08% of total assets -
Total gross loans of
$1.5 billion -
Total deposits of
$2.0 billion -
Non-interest expense of
$17.3 million -
Shareholders’ equity of
$317.7 million -
Company’s consolidated and Bank’s leverage ratio of
13.44% and12.91% , respectively -
Redeemed Subordinated Notes bearing interest at
11.08% on July 15, 2023 at par for aggregate cash payment of$66.8 million - Conclusion of SEC investigation
The Company reported net income of
In the second quarter of 2023, the Company completed its previously disclosed plan to sell nonperforming and chronically delinquent residential real estate loans, primarily consisting of Advantage Loan Program loans with an aggregate unpaid principal balance of approximately
In June 2023, the Company received a letter from the Division of Enforcement of the
On July 19, 2023, the United States District Court for the Eastern District of
On July 15, 2023, the Company redeemed its outstanding
“The second quarter results reflect several remedial steps we have undertaken to finish the job of repairing Sterling and the impact from poor decisions made in years past. We believe that the strategic actions we have taken serve to substantially reduce Sterling’s elevated credit risk profile and the excessive interest expense from the Subordinated Notes. These actions were designed to create a pathway to long-term and sustainable profitability. The Subordinated Notes alone accounted for approximately 23 basis points of margin pressure this quarter. The credit risk picture has been a cause for our concern over the last three years. It is worth remembering that the level of problem credit exposure was
Balance Sheet
Total Assets – Total assets were
Cash and due from banks increased
Total gross loans held for investment of
Total Deposits – Total deposits were
Capital – Total shareholders’ equity was
The Company and the Bank have elected to opt into the Community Bank Leverage Ratio framework, effective January 1, 2023. As such, the Company and the Bank are not required to meet minimum standards under the risk-based capital rules. Instead, each of the Company and the Bank is required to maintain a Tier 1 leverage ratio of greater than
Asset Quality and Provision for (Recovery of) Credit Losses – A provision for (recovery of) credit losses of
Net recoveries during the second quarter of 2023 were
Nonperforming assets at June 30, 2023 totaled
Results of Operations
Net Interest Income and Net Interest Margin – Net interest income for the second quarter of 2023 was
The decrease in net interest income during the second quarter of 2023 compared to the second quarter of 2022 was primarily due to an increase in interest expense on our average balance of interest-bearing liabilities since the average rate paid increased 237 basis points. This was partially offset by an increase in interest income as the average yield on our average balance of interest-bearing assets increased 168 basis points. The average balance in our loan portfolio declined
The net interest margin of
Non-Interest Income – Non-interest income for the second quarter of 2023 increased by
Non-Interest Expense – Non-interest expense of
Income Tax Expense (Benefit) – For the three months ended June 30, 2023, the Company recorded income tax expense of
Mr. O’Brien said, “With the redemption of the Subordinated Notes, I believe we have accomplished all the corrective elements we intended for Sterling’s turnaround. From the perspective of the multiple financial, regulatory, and internal control deficiencies, we believe we have built an entirely new bank that is both transparently governed and well positioned for future opportunity.
Although we anticipate that there will continue to be some ongoing news with respect to government enforcement actions against certain individuals, we believe that the Company is finally beyond those concerns. We do anticipate some additional future costs related to selected individual defense costs and our ongoing obligations to cooperate with the government investigations with respect to individuals. As of today’s date, the court has approved Sterling’s settlement with the Department of Justice, and that will move into the hands of a special master to be appointed by the court to make appropriate arrangements for the distribution of the proceeds of the restitution funds to non-insider victim-shareholders.
We believe Sterling has ample liquidity, strong capital levels and a low-risk balance sheet. We have several years of herculean efforts behind us needed to bring Sterling to the point where it is today. From this perspective, the board and management can finally get down to the business of looking at our strategic opportunities and develop business plans designed to meet the best long-term interests of Sterling and its shareholders.”
Non-GAAP Financial Measures
The Company’s disclosure of professional fees exclusive of insurance reimbursements is a non-GAAP financial measure and has been included to provide greater clarity to investors and comparability of actual professional expenses incurred due to the significant disconnect in timing of the identification of those expenses for which insurance reimbursements will be received and the incurrence of the expenses. Our use of non-GAAP financial measures has limitations as an analytical tool, and these measures should not be considered in isolation or as a substitute for analysis of financial results as reported under
|
|
Three Months Ended |
||||||||
(dollars in thousands) |
|
June 30,
|
|
March 31,
|
|
June 30,
|
||||
Professional Fees |
|
$ |
3,521 |
|
$ |
3,221 |
|
$ |
7,066 |
|
Insurance Reimbursements |
|
|
— |
|
|
2,203 |
|
|
79 |
|
Adjusted Professional Fees |
|
$ |
3,521 |
|
$ |
5,424 |
|
$ |
7,145 |
|
|
|
|
|
|
|
|
|
|
||
Conference Call and Webcast
Management will host a conference call on Wednesday, July 26, 2023 at 11:00 a.m. Eastern Time to discuss the Company’s unaudited financial results for the quarter ended June 30, 2023. The conference call number for
A replay of the conference call may be accessed through August 2, 2023 by
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
Forward-Looking Statements
This Press Release contains certain statements that are, or may be deemed to be, “forward-looking statements” regarding the Company’s plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance, including any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. 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,” “annualized” and “perspective,” or the negative versions of those words or other comparable words or phrases of a future or forward-looking nature, though the absence of these words does not mean a statement is not forward-looking. All statements other than statements of historical facts, including but not limited to statements regarding, the economy and financial markets, government investigations, credit quality, the regulatory scheme governing our industry, competition in our industry, interest rates, our liquidity, our business and our governance, are forward-looking statements. We have based the forward-looking statements in this Press Release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. 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. There can be no assurance that future developments will be those that have been anticipated. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. 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 Securities and Exchange Commission on March 16, 2023, subsequent periodic reports and future periodic reports, could affect future results and events, causing those results and events to differ materially from those views expressed or implied in the Company’s forward-looking statements. These risks are not exhaustive. Other sections of this Press Release and our filings with the Securities and Exchange Commission include additional factors that could adversely impact our business and financial performance. Moreover, we operate in very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Press Release. 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. Accordingly, you should not place undue reliance on any such forward-looking statements. The Company disclaims any obligation to update, revise, or correct any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise.
| Sterling Bancorp, Inc. | ||||||||||||
| Consolidated Financial Highlights (Unaudited) | ||||||||||||
| At and for the Three Months Ended | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| (dollars in thousands, except per share data) | 2023 |
2023 |
2022 |
|||||||||
| Net income (loss) | $ |
2,539 |
|
$ |
(503 |
) |
$ |
(2,197 |
) |
|||
| Income (loss) per share, diluted | $ |
0.05 |
|
$ |
(0.01 |
) |
$ |
(0.04 |
) |
|||
| Net interest income | $ |
16,184 |
|
$ |
17,676 |
|
$ |
19,470 |
|
|||
| Net interest margin |
|
2.64 |
% |
|
2.93 |
% |
|
2.95 |
% |
|||
| Non-interest income | $ |
1,911 |
|
$ |
278 |
|
$ |
45 |
|
|||
| Non-interest expense | $ |
17,341 |
|
$ |
17,837 |
|
$ |
19,494 |
|
|||
| Loans, net of allowance for credit losses | $ |
1,449,709 |
|
$ |
1,513,481 |
|
$ |
1,726,366 |
|
|||
| Total deposits | $ |
2,041,491 |
|
$ |
1,921,822 |
|
$ |
2,004,247 |
|
|||
| Asset Quality | ||||||||||||
| Nonperforming loans | $ |
2,095 |
|
$ |
34 |
|
$ |
48,385 |
|
|||
| Allowance for credit losses to total loans |
|
2.43 |
% |
|
2.48 |
% |
|
2.91 |
% |
|||
| Allowance for credit losses to nonaccrual loans |
|
1753 |
% |
|
— |
|
|
107 |
% |
|||
| Nonaccrual loans to total loans outstanding |
|
0.14 |
% |
|
— |
|
|
2.72 |
% |
|||
| Net charge offs (recoveries) to average loans outstanding during the period |
|
(0.03 |
)% |
|
0.39 |
% |
|
(0.02 |
)% |
|||
| Provision for (recovery of) credit losses | $ |
(2,902 |
) |
$ |
674 |
|
$ |
(1,109 |
) |
|||
| Net charge offs (recoveries) | $ |
(402 |
) |
$ |
6,412 |
|
$ |
(420 |
) |
|||
| Performance Ratios | ||||||||||||
| Return on average assets |
|
0.41 |
% |
|
(0.08 |
)% |
|
(0.33 |
)% |
|||
| Return on average shareholders' equity |
|
3.24 |
% |
|
(0.65 |
)% |
|
(2.57 |
)% |
|||
| Efficiency ratio (1) |
|
95.83 |
% |
|
99.35 |
% |
|
99.89 |
% |
|||
| Yield on average interest-earning assets |
|
5.15 |
% |
|
4.88 |
% |
|
3.47 |
% |
|||
| Cost of average interest-bearing liabilities |
|
2.99 |
% |
|
2.36 |
% |
|
0.62 |
% |
|||
| Net interest spread |
|
2.16 |
% |
|
2.52 |
% |
|
2.85 |
% |
|||
| Capital Ratios(2)(3) | ||||||||||||
| Regulatory and Other Capital Ratios — Consolidated: | ||||||||||||
| Tier 1 (core) capital to average total assets (leverage ratio) |
|
13.44 |
% |
|
13.49 |
% |
|
12.91 |
% |
|||
| Regulatory and Other Capital Ratios — Bank: | ||||||||||||
| Tier 1 (core) capital to average total assets (leverage ratio) |
|
12.91 |
% |
|
16.52 |
% |
|
14.44 |
% |
|||
| (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) June 30, 2023 capital ratios are estimated. | ||||||||||||
| (3) Effective January 1, 2023, the Company and Bank elected to opt into the community bank leverage ratio framework. | ||||||||||||
| Sterling Bancorp, Inc. | |||||||||||||||||||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | |||||||||||||||||||||||||
| June 30, | March 31, | % | December 31, | % | June 30, | % | |||||||||||||||||||
| (dollars in thousands) | 2023 |
2023 |
change | 2022 |
change | 2022 |
change | ||||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Cash and due from banks | $ |
655,391 |
|
$ |
419,219 |
|
56 |
% |
$ |
379,798 |
|
73 |
% |
$ |
285,165 |
|
N/M |
|
|||||||
| Interest-bearing time deposits with other banks |
|
934 |
|
|
934 |
|
0 |
% |
|
934 |
|
0 |
% |
|
1,183 |
|
(21 |
)% |
|||||||
| Debt securities available for sale |
|
334,508 |
|
|
342,534 |
|
(2 |
)% |
|
343,558 |
|
(3 |
)% |
|
377,492 |
|
(11 |
)% |
|||||||
| Equity securities |
|
4,640 |
|
|
4,712 |
|
(2 |
)% |
|
4,642 |
|
(0 |
)% |
|
4,817 |
|
(4 |
)% |
|||||||
| Loans held for sale |
|
— |
|
|
37,979 |
|
(100 |
)% |
|
7,725 |
|
(100 |
)% |
|
8,964 |
|
(100 |
)% |
|||||||
| Loans, net of allowance for credit losses of |
|
1,449,709 |
|
|
1,513,481 |
|
(4 |
)% |
|
1,613,385 |
|
(10 |
)% |
|
1,726,366 |
|
(16 |
)% |
|||||||
| Accrued interest receivable |
|
7,489 |
|
|
7,617 |
|
(2 |
)% |
|
7,829 |
|
(4 |
)% |
|
6,721 |
|
11 |
% |
|||||||
| Mortgage servicing rights, net |
|
1,658 |
|
|
1,703 |
|
(3 |
)% |
|
1,794 |
|
(8 |
)% |
|
2,453 |
|
(32 |
)% |
|||||||
| Leasehold improvements and equipment, net |
|
5,850 |
|
|
6,139 |
|
(5 |
)% |
|
6,301 |
|
(7 |
)% |
|
6,848 |
|
(15 |
)% |
|||||||
| Operating lease right-of-use assets |
|
13,025 |
|
|
13,916 |
|
(6 |
)% |
|
14,800 |
|
(12 |
)% |
|
16,332 |
|
(20 |
)% |
|||||||
| Federal Home Loan Bank stock, at cost |
|
20,288 |
|
|
20,288 |
|
0 |
% |
|
20,288 |
|
0 |
% |
|
20,288 |
|
0 |
% |
|||||||
| Company-owned life insurance |
|
8,605 |
|
|
8,553 |
|
1 |
% |
|
8,501 |
|
1 |
% |
|
8,396 |
|
2 |
% |
|||||||
| Deferred tax asset, net |
|
18,538 |
|
|
20,065 |
|
(8 |
)% |
|
23,704 |
|
(22 |
)% |
|
22,028 |
|
(16 |
)% |
|||||||
| Other assets |
|
11,375 |
|
|
14,408 |
|
(21 |
)% |
|
11,476 |
|
(1 |
)% |
|
16,767 |
|
(32 |
)% |
|||||||
| Total assets | $ |
2,532,010 |
|
$ |
2,411,548 |
|
5 |
% |
$ |
2,444,735 |
|
4 |
% |
$ |
2,503,820 |
|
1 |
% |
|||||||
| Liabilities | |||||||||||||||||||||||||
| Noninterest-bearing deposits | $ |
44,799 |
|
$ |
46,496 |
|
(4 |
)% |
$ |
53,041 |
|
(16 |
)% |
$ |
82,387 |
|
(46 |
)% |
|||||||
| Interest-bearing deposits |
|
1,996,692 |
|
|
1,875,326 |
|
6 |
% |
|
1,900,996 |
|
5 |
% |
|
1,921,860 |
|
4 |
% |
|||||||
| Total deposits |
|
2,041,491 |
|
|
1,921,822 |
|
6 |
% |
|
1,954,037 |
|
4 |
% |
|
2,004,247 |
|
2 |
% |
|||||||
| Federal Home Loan Bank borrowings |
|
50,000 |
|
|
50,000 |
|
0 |
% |
|
50,000 |
|
0 |
% |
|
50,000 |
|
0 |
% |
|||||||
| Subordinated notes, net |
|
65,234 |
|
|
65,253 |
|
(0 |
)% |
|
65,271 |
|
(0 |
)% |
|
65,308 |
|
(0 |
)% |
|||||||
| Operating lease liabilities |
|
14,176 |
|
|
15,089 |
|
(6 |
)% |
|
15,990 |
|
(11 |
)% |
|
17,540 |
|
(19 |
)% |
|||||||
| Accrued expenses and other liabilities |
|
43,433 |
|
|
43,874 |
|
(1 |
)% |
|
46,810 |
|
(7 |
)% |
|
31,393 |
|
38 |
% |
|||||||
| Total liabilities |
|
2,214,334 |
|
|
2,096,038 |
|
6 |
% |
|
2,132,108 |
|
4 |
% |
|
2,168,488 |
|
2 |
% |
|||||||
| Shareholders’ Equity | |||||||||||||||||||||||||
| Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding |
|
— |
|
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
— |
|
|||||||
| Common stock, no par value, authorized 500,000,000 shares; shares issued and outstanding 52,081,886 at June 30, 2023, 50,808,116 at March 31, 2023, 50,795,871 at December 31, 2022 and 50,818,212 at June 30, 2022 |
|
84,323 |
|
|
83,295 |
|
1 |
% |
|
83,295 |
|
1 |
% |
|
83,295 |
|
1 |
% |
|||||||
| Additional paid-in capital |
|
15,098 |
|
|
14,906 |
|
1 |
% |
|
14,808 |
|
2 |
% |
|
14,313 |
|
5 |
% |
|||||||
| Retained earnings |
|
236,587 |
|
|
234,048 |
|
1 |
% |
|
234,049 |
|
1 |
% |
|
251,306 |
|
(6 |
)% |
|||||||
| Accumulated other comprehensive loss |
|
(18,332 |
) |
|
(16,739 |
) |
(10 |
)% |
|
(19,525 |
) |
6 |
% |
|
(13,582 |
) |
(35 |
)% |
|||||||
| Total shareholders’ equity |
|
317,676 |
|
|
315,510 |
|
1 |
% |
|
312,627 |
|
2 |
% |
|
335,332 |
|
(5 |
)% |
|||||||
| Total liabilities and shareholders’ equity | $ |
2,532,010 |
|
$ |
2,411,548 |
|
5 |
% |
$ |
2,444,735 |
|
4 |
% |
$ |
2,503,820 |
|
1 |
% |
|||||||
| N/M - Not Meaningful | |||||||||||||||||||||||||
| Sterling Bancorp, Inc. | |||||||||||||||||||||||||||||
| Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | % | June 30, | % | June 30, | June 30, | % | ||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | 2023 |
2023 |
change | 2022 |
change | 2023 |
2022 |
change | |||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ |
21,892 |
|
$ |
22,160 |
|
(1 |
)% |
$ |
20,746 |
|
6 |
% |
$ |
44,052 |
|
$ |
44,614 |
|
(1 |
)% |
||||||||
| Interest and dividends on investment securities and restricted stock |
|
2,666 |
|
|
2,456 |
|
9 |
% |
|
1,353 |
|
97 |
% |
|
5,122 |
|
|
2,188 |
|
N/M |
|
||||||||
| Other interest |
|
7,002 |
|
|
4,807 |
|
46 |
% |
|
791 |
|
N/M |
|
|
11,809 |
|
|
1,006 |
|
N/M |
|
||||||||
| Total interest income |
|
31,560 |
|
|
29,423 |
|
7 |
% |
|
22,890 |
|
38 |
% |
|
60,983 |
|
|
47,808 |
|
28 |
% |
||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Interest on deposits |
|
13,337 |
|
|
9,809 |
|
36 |
% |
|
2,016 |
|
N/M |
|
|
23,146 |
|
|
4,346 |
|
N/M |
|
||||||||
| Interest on Federal Home Loan Bank borrowings |
|
248 |
|
|
245 |
|
1 |
% |
|
314 |
|
(21 |
)% |
|
493 |
|
|
666 |
|
(26 |
)% |
||||||||
| Interest on subordinated notes |
|
1,791 |
|
|
1,693 |
|
6 |
% |
|
1,090 |
|
64 |
% |
|
3,484 |
|
|
2,054 |
|
70 |
% |
||||||||
| Total interest expense |
|
15,376 |
|
|
11,747 |
|
31 |
% |
|
3,420 |
|
N/M |
|
|
27,123 |
|
|
7,066 |
|
N/M |
|
||||||||
| Net interest income |
|
16,184 |
|
|
17,676 |
|
(8 |
)% |
|
19,470 |
|
(17 |
)% |
|
33,860 |
|
|
40,742 |
|
(17 |
)% |
||||||||
| Provision for (recovery of) credit losses |
|
(2,902 |
) |
|
674 |
|
N/M |
|
|
(1,109 |
) |
N/M |
|
|
(2,228 |
) |
|
(5,398 |
) |
59 |
% |
||||||||
| Net interest income after provision for (recovery of) credit losses |
|
19,086 |
|
|
17,002 |
|
12 |
% |
|
20,579 |
|
(7 |
)% |
|
36,088 |
|
|
46,140 |
|
(22 |
)% |
||||||||
| Non-interest income | |||||||||||||||||||||||||||||
| Service charges and fees |
|
78 |
|
|
94 |
|
(17 |
)% |
|
105 |
|
(26 |
)% |
|
172 |
|
|
227 |
|
(24 |
)% |
||||||||
| Loss on sale of investment securities |
|
— |
|
|
(2 |
) |
100 |
% |
|
— |
|
N/M |
|
|
(2 |
) |
|
— |
|
N/M |
|
||||||||
| Gain (loss) on sale of loans held for sale |
|
1,720 |
|
|
(25 |
) |
N/M |
|
|
3 |
|
N/M |
|
|
1,695 |
|
|
200 |
|
N/M |
|
||||||||
| Unrealized gain (loss) on equity securities |
|
(71 |
) |
|
71 |
|
N/M |
|
|
(170 |
) |
58 |
% |
|
— |
|
|
(406 |
) |
100 |
% |
||||||||
| Net servicing income (loss) |
|
102 |
|
|
59 |
|
73 |
% |
|
(177 |
) |
N/M |
|
|
161 |
|
|
266 |
|
(39 |
)% |
||||||||
| Income earned on company-owned life insurance |
|
81 |
|
|
80 |
|
1 |
% |
|
255 |
|
(68 |
)% |
|
161 |
|
|
583 |
|
(72 |
)% |
||||||||
| Other |
|
1 |
|
|
1 |
|
0 |
% |
|
29 |
|
(97 |
)% |
|
2 |
|
|
586 |
|
(100 |
)% |
||||||||
| Total non-interest income |
|
1,911 |
|
|
278 |
|
N/M |
|
|
45 |
|
N/M |
|
|
2,189 |
|
|
1,456 |
|
50 |
% |
||||||||
| Non-interest expense | |||||||||||||||||||||||||||||
| Salaries and employee benefits |
|
9,274 |
|
|
9,410 |
|
(1 |
)% |
|
5,569 |
|
67 |
% |
|
18,684 |
|
|
15,186 |
|
23 |
% |
||||||||
| Occupancy and equipment |
|
2,051 |
|
|
2,112 |
|
(3 |
)% |
|
2,187 |
|
(6 |
)% |
|
4,163 |
|
|
4,329 |
|
(4 |
)% |
||||||||
| Professional fees |
|
3,521 |
|
|
3,221 |
|
9 |
% |
|
7,066 |
|
(50 |
)% |
|
6,742 |
|
|
12,223 |
|
(45 |
)% |
||||||||
| FDIC assessments |
|
263 |
|
|
257 |
|
2 |
% |
|
346 |
|
(24 |
)% |
|
520 |
|
|
715 |
|
(27 |
)% |
||||||||
| Data processing |
|
754 |
|
|
738 |
|
2 |
% |
|
762 |
|
(1 |
)% |
|
1,492 |
|
|
1,567 |
|
(5 |
)% |
||||||||
| Net provision for (recovery of) mortgage repurchase liability |
|
(59 |
) |
|
120 |
|
N/M |
|
|
(312 |
) |
81 |
% |
|
61 |
|
|
(525 |
) |
N/M |
|
||||||||
| Other |
|
1,537 |
|
|
1,979 |
|
(22 |
)% |
|
3,876 |
|
(60 |
)% |
|
3,516 |
|
|
5,422 |
|
(35 |
)% |
||||||||
| Total non-interest expense |
|
17,341 |
|
|
17,837 |
|
(3 |
)% |
|
19,494 |
|
(11 |
)% |
|
35,178 |
|
|
38,917 |
|
(10 |
)% |
||||||||
| Income (loss) before income taxes |
|
3,656 |
|
|
(557 |
) |
N/M |
|
|
1,130 |
|
N/M |
|
|
3,099 |
|
|
8,679 |
|
(64 |
)% |
||||||||
| Income tax expense (benefit) |
|
1,117 |
|
|
(54 |
) |
N/M |
|
|
3,327 |
|
(66 |
)% |
|
1,063 |
|
|
5,616 |
|
(81 |
)% |
||||||||
| Net income (loss) | $ |
2,539 |
|
$ |
(503 |
) |
N/M |
|
$ |
(2,197 |
) |
N/M |
|
$ |
2,036 |
|
$ |
3,063 |
|
(34 |
)% |
||||||||
| Income (loss) per share, basic and diluted | $ |
0.05 |
|
$ |
(0.01 |
) |
$ |
(0.04 |
) |
$ |
0.04 |
|
$ |
0.06 |
|
||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||||||||
| Basic |
|
50,672,461 |
|
|
50,444,463 |
|
|
50,386,856 |
|
|
50,559,092 |
|
|
50,289,612 |
|
||||||||||||||
| Diluted |
|
50,778,213 |
|
|
50,444,463 |
|
|
50,386,856 |
|
|
50,705,998 |
|
|
50,496,487 |
|
||||||||||||||
| N/M - Not Meaningful | |||||||||||||||||||||||||||||
| Net income |
|
2,539 |
|
|
(503 |
) |
|
(2,197 |
) |
|
2,036 |
|
|
3,063 |
|
||||||||||||||
| Check |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||||||||||||
| Sterling Bancorp, Inc. | |||||||||||||||||||||||||||
| Yield Analysis and Net Interest Income (Unaudited) | |||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||
| June 30, 2023 | March 31, 2023 | June 30, 2022 | |||||||||||||||||||||||||
| (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 | $ |
1,277,408 |
$ |
18,250 |
5.71 |
% |
$ |
1,366,872 |
$ |
18,514 |
5.42 |
% |
$ |
1,554,077 |
$ |
17,310 |
4.46 |
% |
|||||||||
| Commercial real estate |
|
224,836 |
|
2,787 |
4.96 |
% |
|
223,929 |
|
2,596 |
4.64 |
% |
|
221,435 |
|
2,547 |
4.60 |
% |
|||||||||
| Construction |
|
31,819 |
|
820 |
10.31 |
% |
|
41,436 |
|
1,034 |
9.98 |
% |
|
62,354 |
|
883 |
5.66 |
% |
|||||||||
| Commercial and industrial |
|
2,255 |
|
35 |
6.21 |
% |
|
1,382 |
|
16 |
4.63 |
% |
|
355 |
|
6 |
6.76 |
% |
|||||||||
| Total loans |
|
1,536,318 |
|
21,892 |
5.70 |
% |
|
1,633,619 |
|
22,160 |
5.43 |
% |
|
1,838,221 |
|
20,746 |
4.51 |
% |
|||||||||
| Securities, includes restricted stock(2) |
|
375,094 |
|
2,666 |
2.84 |
% |
|
366,346 |
|
2,456 |
2.68 |
% |
|
396,315 |
|
1,353 |
1.37 |
% |
|||||||||
| Other interest-earning assets |
|
541,887 |
|
7,002 |
5.17 |
% |
|
411,766 |
|
4,807 |
4.67 |
% |
|
406,740 |
|
791 |
0.78 |
% |
|||||||||
| Total interest-earning assets |
|
2,453,299 |
|
31,560 |
5.15 |
% |
|
2,411,731 |
|
29,423 |
4.88 |
% |
|
2,641,276 |
|
22,890 |
3.47 |
% |
|||||||||
| Noninterest-earning assets | |||||||||||||||||||||||||||
| Cash and due from banks |
|
4,233 |
|
4,475 |
|
3,811 |
|||||||||||||||||||||
| Other assets |
|
27,645 |
|
28,398 |
|
46,390 |
|||||||||||||||||||||
| Total assets | $ |
2,485,177 |
$ |
2,444,604 |
$ |
2,691,477 |
|||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||
| Money market, savings and NOW | $ |
980,359 |
$ |
6,270 |
2.57 |
% |
$ |
1,001,505 |
$ |
4,614 |
1.87 |
% |
$ |
1,288,796 |
$ |
756 |
0.24 |
% |
|||||||||
| Time deposits |
|
969,938 |
|
7,067 |
2.92 |
% |
|
900,890 |
|
5,195 |
2.34 |
% |
|
760,017 |
|
1,260 |
0.66 |
% |
|||||||||
| Total interest-bearing deposits |
|
1,950,297 |
|
13,337 |
2.74 |
% |
|
1,902,395 |
|
9,809 |
2.09 |
% |
|
2,048,813 |
|
2,016 |
0.39 |
% |
|||||||||
| FHLB borrowings |
|
50,000 |
|
248 |
1.96 |
% |
|
50,000 |
|
245 |
1.96 |
% |
|
110,440 |
|
314 |
1.12 |
% |
|||||||||
| Subordinated notes, net |
|
65,245 |
|
1,791 |
10.86 |
% |
|
65,264 |
|
1,693 |
10.38 |
% |
|
65,319 |
|
1,090 |
6.60 |
% |
|||||||||
| Total borrowings |
|
115,245 |
|
2,039 |
7.00 |
% |
|
115,264 |
|
1,938 |
6.73 |
% |
|
175,759 |
|
1,404 |
3.16 |
% |
|||||||||
| Total interest-bearing liabilities |
|
2,065,542 |
|
15,376 |
2.99 |
% |
|
2,017,659 |
|
11,747 |
2.36 |
% |
|
2,224,572 |
|
3,420 |
0.62 |
% |
|||||||||
| Noninterest-bearing liabilities | |||||||||||||||||||||||||||
| Demand deposits |
|
44,005 |
|
50,284 |
|
72,496 |
|||||||||||||||||||||
| Other liabilities |
|
61,487 |
|
63,308 |
|
52,075 |
|||||||||||||||||||||
| Shareholders' equity |
|
314,143 |
|
313,353 |
|
342,334 |
|||||||||||||||||||||
| Total liabilities and shareholders' equity | $ |
2,485,177 |
$ |
2,444,604 |
$ |
2,691,477 |
|||||||||||||||||||||
| Net interest income and spread(2) | $ |
16,184 |
2.16 |
% |
$ |
17,676 |
2.52 |
% |
$ |
19,470 |
2.85 |
% |
|||||||||||||||
| Net interest margin(2) | 2.64 |
% |
2.93 |
% |
2.95 |
% |
|||||||||||||||||||||
| (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. | |||||||||||||||||||||||||||
| Six Months Ended | ||||||||||||||||||
| June 30, 2023 | June 30, 2022 | |||||||||||||||||
| (dollars in thousands) | Average Balance | Interest | Average Yield/Rate |
Average Balance | Interest |
Average
|
||||||||||||
| Interest-earning assets | ||||||||||||||||||
| Loans(1) | ||||||||||||||||||
| Residential real estate and other consumer | $ |
1,321,858 |
$ |
36,764 |
5.56 |
% |
$ |
1,607,090 |
$ |
35,588 |
4.43 |
% |
||||||
| Commercial real estate |
|
224,383 |
|
5,383 |
4.80 |
% |
|
234,169 |
|
5,983 |
5.11 |
% |
||||||
| Construction |
|
36,601 |
|
1,854 |
10.13 |
% |
|
78,762 |
|
3,032 |
7.70 |
% |
||||||
| Commercial and industrial |
|
1,821 |
|
51 |
5.60 |
% |
|
352 |
|
11 |
6.25 |
% |
||||||
| Total loans |
|
1,584,663 |
|
44,052 |
5.56 |
% |
|
1,920,373 |
|
44,614 |
4.65 |
% |
||||||
| Securities, includes restricted stock(2) |
|
370,744 |
|
5,122 |
2.76 |
% |
|
373,360 |
|
2,188 |
1.17 |
% |
||||||
| Other interest-earning assets |
|
477,186 |
|
11,809 |
4.95 |
% |
|
429,569 |
|
1,006 |
0.47 |
% |
||||||
| Total interest-earning assets |
|
2,432,593 |
|
60,983 |
5.01 |
% |
|
2,723,302 |
|
47,808 |
3.51 |
% |
||||||
| Noninterest-earning assets | ||||||||||||||||||
| Cash and due from banks |
|
4,353 |
|
3,728 |
||||||||||||||
| Other assets |
|
27,349 |
|
45,918 |
||||||||||||||
| Total assets | $ |
2,464,295 |
$ |
2,772,948 |
||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||
| Money market, savings and NOW | $ |
990,874 |
$ |
10,884 |
2.22 |
% |
$ |
1,299,761 |
$ |
1,463 |
0.23 |
% |
||||||
| Time deposits |
|
935,605 |
|
12,262 |
2.64 |
% |
|
810,620 |
|
2,883 |
0.72 |
% |
||||||
| Total interest-bearing deposits |
|
1,926,479 |
|
23,146 |
2.42 |
% |
|
2,110,381 |
|
4,346 |
0.42 |
% |
||||||
| FHLB borrowings |
|
50,000 |
|
493 |
1.99 |
% |
|
130,111 |
|
666 |
1.03 |
% |
||||||
| Subordinated notes, net |
|
65,255 |
|
3,484 |
10.62 |
% |
|
65,328 |
|
2,054 |
6.25 |
% |
||||||
| Total borrowings |
|
115,255 |
|
3,977 |
6.86 |
% |
|
195,439 |
|
2,720 |
2.77 |
% |
||||||
| Total interest-bearing liabilities |
|
2,041,734 |
|
27,123 |
2.68 |
% |
|
2,305,820 |
|
7,066 |
0.62 |
% |
||||||
| Noninterest-bearing liabilities | ||||||||||||||||||
| Demand deposits |
|
47,127 |
|
68,331 |
||||||||||||||
| Other liabilities |
|
61,892 |
|
54,752 |
||||||||||||||
| Shareholders' equity |
|
313,542 |
|
344,045 |
||||||||||||||
| Total liabilities and shareholders' equity | $ |
2,464,295 |
$ |
2,772,948 |
||||||||||||||
| Net interest income and spread(2) | $ |
33,860 |
2.33 |
% |
$ |
40,742 |
2.89 |
% |
||||||||||
| Net interest margin(2) | 2.78 |
% |
2.99 |
% |
||||||||||||||
| (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. | ||||||||||||||||||
| Sterling Bancorp, Inc. | |||||||||||||||||||||||||||
| Loan Composition (Unaudited) | |||||||||||||||||||||||||||
| June 30, | March 31, | % | December 31, | % | June 30, | % | |||||||||||||||||||||
| (dollars in thousands) | 2023 |
2023 |
change | 2022 |
change |
2022 |
change | ||||||||||||||||||||
| Residential real estate | $ |
1,214,439 |
|
$ |
1,289,554 |
|
(6 |
)% |
$ |
1,391,276 |
|
|
(13 |
)% |
$ |
1,506,852 |
|
|
(19 |
)% |
|||||||
| Commercial real estate |
|
221,658 |
|
|
224,792 |
|
(1 |
)% |
|
221,669 |
|
|
(0 |
)% |
|
214,494 |
|
|
3 |
% |
|||||||
| Construction |
|
31,978 |
|
|
36,255 |
|
(12 |
)% |
|
44,503 |
|
|
(28 |
)% |
|
55,150 |
|
|
(42 |
)% |
|||||||
| Commercial and industrial |
|
17,772 |
|
|
1,368 |
|
N/M |
|
|
1,396 |
|
|
N/M |
|
|
1,418 |
|
|
N/M |
|
|||||||
| Other consumer |
|
15 |
|
|
77 |
|
(81 |
)% |
|
5 |
|
|
N/M |
|
|
218 |
|
|
(93 |
)% |
|||||||
| Total loans held for investment |
|
1,485,862 |
|
|
1,552,046 |
|
(4 |
)% |
|
1,658,849 |
|
|
(10 |
)% |
|
1,778,132 |
|
|
(16 |
)% |
|||||||
| Less: allowance for credit losses |
|
(36,153 |
) |
|
(38,565 |
) |
(6 |
)% |
|
(45,464 |
) |
|
(20 |
)% |
|
(51,766 |
) |
|
30 |
% |
|||||||
| Loans, net | $ |
1,449,709 |
|
$ |
1,513,481 |
|
(4 |
)% |
$ |
1,613,385 |
|
|
(10 |
)% |
$ |
1,726,366 |
|
|
(16 |
)% |
|||||||
| Loans held for sale | $ |
- |
|
$ |
37,979 |
|
(100 |
)% |
$ |
7,725 |
|
|
(100 |
)% |
$ |
8,964 |
|
|
(100 |
)% |
|||||||
| Total gross loans | $ |
1,485,862 |
|
$ |
1,590,025 |
|
(7 |
)% |
$ |
1,666,574 |
|
|
(11 |
)% |
$ |
1,787,096 |
|
|
(17 |
)% |
|||||||
| N/M - Not Meaningful | |||||||||||||||||||||||||||
| Sterling Bancorp, Inc. | |||||||||||||||||||||||||||
| Allowance for Credit Losses (Unaudited) | |||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||
| June 30, | March 31, | December 31, | June 30, | ||||||||||||||||||||||||
| (dollars in thousands) |
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|||||||||||||||
| Balance at beginning of period | $ |
38,565 |
|
$ |
45,464 |
|
$ |
45,362 |
|
$ |
52,455 |
|
|||||||||||||||
| Adjustment to adopt ASU 2016-13 |
|
— |
|
|
(1,651 |
) |
|
— |
|
|
— |
|
|||||||||||||||
| Adjustment to adopt ASU 2022-02 |
|
— |
|
|
380 |
|
|
— |
|
|
— |
|
|||||||||||||||
| Balance after adoption | $ |
38,565 |
|
$ |
44,193 |
|
$ |
45,362 |
|
$ |
52,455 |
|
|||||||||||||||
| Provision for (recovery of) credit losses |
|
(2,814 |
) |
|
784 |
|
|
(179 |
) |
|
(1,109 |
) |
|||||||||||||||
| Charge offs |
|
- |
|
|
(6,478 |
) |
|
— |
|
|
(197 |
) |
|||||||||||||||
| Recoveries |
|
402 |
|
|
66 |
|
|
281 |
|
|
617 |
|
|||||||||||||||
| Balance at end of period | $ |
36,153 |
|
$ |
38,565 |
|
$ |
45,464 |
|
$ |
51,766 |
|
|||||||||||||||
| Sterling Bancorp, Inc. | |||||||||||||||||||||||||||
| Deposit Composition (Unaudited) | |||||||||||||||||||||||||||
| June 30, | March 31, | % | December 31, | % | June 30, | % | |||||||||||||||||||||
| (dollars in thousands) |
|
2023 |
|
|
2023 |
|
change |
|
2022 |
|
change |
|
2022 |
|
change | ||||||||||||
| Noninterest-bearing deposits | $ |
44,799 |
|
$ |
46,496 |
|
(4 |
)% |
$ |
53,041 |
|
|
(16 |
)% |
$ |
82,387 |
|
|
(46 |
)% |
|||||||
| Money Market, Savings and NOW |
|
1,015,394 |
|
|
958,165 |
|
6 |
% |
|
1,039,263 |
|
|
(2 |
)% |
|
1,252,279 |
|
|
(19 |
)% |
|||||||
| Time deposits |
|
981,298 |
|
|
917,161 |
|
7 |
% |
|
861,733 |
|
|
14 |
% |
|
669,581 |
|
|
47 |
% |
|||||||
| Total deposits | $ |
2,041,491 |
|
$ |
1,921,822 |
|
6 |
% |
$ |
1,954,037 |
|
|
4 |
% |
$ |
2,004,247 |
|
|
2 |
% |
|||||||
| Sterling Bancorp, Inc. | ||||||||||||
| Credit Quality Data (Unaudited) | ||||||||||||
| At and for the Three Months Ended | ||||||||||||
| June 30, | March 31, | December 31, | June 30, | |||||||||
| (dollars in thousands) | 2023 |
2023 |
2022 |
2022 |
||||||||
| Nonaccrual loans(1): | ||||||||||||
| Residential real estate | $ |
2,062 |
$ |
- |
$ |
33,690 |
$ |
42,567 |
||||
| Construction |
|
— |
|
— |
|
— |
|
5,781 |
||||
| Total nonaccrual loans(2) |
|
2,062 |
|
— |
|
33,690 |
|
48,348 |
||||
| Loans past due 90 days or more and still accruing interest |
|
33 |
|
34 |
|
35 |
|
37 |
||||
| Nonperforming loans |
|
2,095 |
|
34 |
|
33,725 |
|
48,385 |
||||
| Other troubled debt restructurings(3) |
|
— |
|
— |
|
2,637 |
|
2,646 |
||||
| Nonaccrual loans held for sale |
|
— |
|
26,270 |
|
1,942 |
|
3,999 |
||||
| Nonperforming assets | $ |
2,095 |
$ |
26,304 |
$ |
38,304 |
$ |
55,030 |
||||
| Total loans (1) | $ |
1,485,862 |
$ |
1,552,046 |
$ |
1,658,849 |
$ |
1,778,132 |
||||
| Total assets | $ |
2,532,010 |
$ |
2,411,548 |
$ |
2,444,735 |
$ |
2,503,820 |
||||
| Nonaccrual loans to total loans outstanding (2) |
|
|
|
— |
|
|
|
|
||||
| Nonperforming assets to total assets |
|
|
|
|
|
|
|
|
||||
| Allowance for credit losses to total loans |
|
|
|
|
|
|
|
|
||||
| Allowance for credit losses to nonaccrual loans |
|
|
|
— |
|
|
|
|
||||
| Net charge offs (recoveries) to average loans outstanding during the period |
|
(0.03)% |
|
|
|
(0.02)% |
|
(0.02)% |
||||
| (1) Loans are classified as held for investment and are presented before the allowance for credit losses. | ||||||||||||
| (2) Total nonaccrual loans exclude nonaccrual loans held for sale. 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 at December 31, 2022 and June 30, 2022 exclude those loans presented above as nonaccrual or past due 90 days or more and still accruing interest. Effective January 1, 2023, loan modifications involving borrowers experiencing financial difficulty are evaluated under the new credit loss model. There were no such loan modifications during the three months ended June 30, 2023 and March 31, 2023. | ||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230726738650/en/
Investor Contact:
Sterling Bancorp, Inc.
Karen Knott
Executive Vice President and Chief Financial Officer
(248) 359-6624
kzaborney@sterlingbank.com
Source: Sterling Bancorp, Inc.
