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Sterling Bancorp Reports Second Quarter 2024 Financial Results

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Sterling Bancorp (NASDAQ: SBT) reported net income of $1.3 million, or $0.03 per diluted share, for Q2 2024. Key highlights include:

- Net interest margin of 2.44%
- Nonperforming loans at 0.97% of total loans
- Recovery of credit losses of $2.1 million
- Total deposits of $2.0 billion
- Total gross loans of $1.3 billion
- Shareholders' equity of $328.9 million

The company's focus remains on protecting book value and financial position while exploring opportunities to reposition and increase net income. Credit quality and capital ratios remain strong, with some growth in the commercial portfolio offsetting declining residential loans.

Sterling Bancorp (NASDAQ: SBT) ha riportato un utile netto di 1,3 milioni di dollari, pari a 0,03 dollari per azione diluita, per il secondo trimestre del 2024. I punti salienti includono:

- Margine di interesse netto del 2,44%
- Prestiti non performanti allo 0,97% del totale dei prestiti
- Recupero di perdite creditizie di 2,1 milioni di dollari
- Depositi totali di 2,0 miliardi di dollari
- Prestiti lordi totali di 1,3 miliardi di dollari
- Capitale netto degli azionisti di 328,9 milioni di dollari

La priorità dell'azienda rimane quella di proteggere il valore contabile e la posizione finanziaria, esplorando nel contempo opportunità per riposizionarsi e aumentare l'utile netto. La qualità del credito e i rapporti di capitale rimangono solidi, con una certa crescita nel portafoglio commerciale che compensano il calo dei prestiti residenziali.

Sterling Bancorp (NASDAQ: SBT) reportó un ingreso neto de 1.3 millones de dólares, o 0.03 dólares por acción diluida, para el segundo trimestre de 2024. Los aspectos destacados incluyen:

- Margen de interés neto del 2.44%
- Préstamos no rentables en el 0.97% del total de préstamos
- Recuperación de pérdidas crediticias de 2.1 millones de dólares
- Depósitos totales de 2.0 mil millones de dólares
- Total de préstamos brutos de 1.3 mil millones de dólares
- Patrimonio de los accionistas de 328.9 millones de dólares

El enfoque de la empresa sigue siendo proteger el valor contable y la posición financiera, al mismo tiempo que explora oportunidades para reposicionarse y aumentar los ingresos netos. La calidad crediticia y los ratios de capital se mantienen sólidos, con un cierto crecimiento en el portafolio comercial que compensa la disminución de los préstamos residenciales.

스털링 뱅코프(NASDAQ: SBT)는 2024년 2분기 130만 달러의 순이익, 즉 희석 주당 0.03 달러를 보고했습니다. 주요 내용은 다음과 같습니다:

- 순이자 마진 2.44%
- 부실채권 비율 0.97%
- 신용 손실 회복 210만 달러
- 총 예금 20억 달러
- 총 원금 대출 13억 달러
- 주주 자본 3억 2,890만 달러

회사의 초점은 장부 가치를 보호하고 재무 상태를 유지하는 동시에 순이익을 증대시키기 위한 기회를 모색하는 것입니다. 신용 품질과 자본 비율은 여전히 강력하며, 일부 상업적 포트폴리오의 성장이 주택 대출 감소를 상쇄하고 있습니다.

Sterling Bancorp (NASDAQ: SBT) a annoncé un revenu net de 1,3 million de dollars, soit 0,03 dollar par action diluée, pour le 2ème trimestre 2024. Les points clés incluent :

- Marge d'intérêt nette de 2,44%
- Prêts non performants à 0,97% du total des prêts
- Récupération de pertes de crédit s'élevant à 2,1 millions de dollars
- Dépôts totaux de 2,0 milliards de dollars
- Total des prêts bruts de 1,3 milliard de dollars
- Capitaux propres des actionnaires de 328,9 millions de dollars

La priorité de l'entreprise reste de protéger la valeur comptable et la position financière tout en explorant des opportunités pour se repositionner et augmenter le revenu net. La qualité du crédit et les ratios de capital restent solides, avec une certaine croissance dans le portefeuille commercial compensant le déclin des prêts résidentiels.

Sterling Bancorp (NASDAQ: SBT) hat für das 2. Quartal 2024 einen Nettogewinn von 1,3 Millionen Dollar, bzw. 0,03 Dollar je verwässerter Aktie, gemeldet. Zu den wichtigsten Punkten gehören:

- Nettovorzugszinsmarge von 2,44%
- Nicht leistungsfähige Kredite bei 0,97% der Gesamtkredite
- Rückgewinnung von Kreditverlusten in Höhe von 2,1 Millionen Dollar
- Gesamteinlagen von 2,0 Milliarden Dollar
- Gesamte Bruttokredite von 1,3 Milliarden Dollar
- Eigenkapital der Aktionäre von 328,9 Millionen Dollar

Das Unternehmen konzentriert sich darauf, den Buchwert und die finanzielle Position zu schützen, während es gleichzeitig Möglichkeiten zur Neupositionierung und Erhöhung des Nettogewinns erkundet. Die Kreditqualität und die Kapitalquoten bleiben stark, wobei ein gewisses Wachstum im gewerblichen Portfolio den Rückgang der Wohnungsbaudarlehen ausgleicht.

Positive
  • Net income improved to $1.3 million from a net loss in the previous quarter
  • Strong capital ratios with consolidated leverage ratio of 14.26%
  • Recovery of credit losses of $2.1 million
  • Growth in commercial real estate loans by $32.7 million
  • Decrease in non-interest expense by $0.5 million or 3%
Negative
  • Net interest margin decreased to 2.44% from 2.52% in the previous quarter
  • Total assets decreased by $39.8 million or 2%
  • Total gross loans decreased by $39.0 million or 3%
  • Residential real estate loans decreased by $68.1 million
  • Nonperforming loans increased to 0.51% of total assets from 0.39% in the previous quarter

Insights

Sterling Bancorp's financial performance for Q2 2024 shows a positive net income of $1.3 million, reversing a net loss from Q1. The net interest margin (NIM) fell slightly to 2.44%, which is concerning as it indicates a squeeze in profitability from lending activities. Key metrics such as the leverage ratios are strong, indicating solid capitalization. The increase in commercial real estate loans and decline in residential real estate loans reflect a strategic shift, likely responding to market dynamics. The recovery of credit losses is a notable positive, signaling improved asset quality. However, the flat deposit growth might be a concern in a rising interest rate environment where competitive rates are essential. Overall, the mixed results reflect cautious optimism, with a focus on maintaining liquidity and credit quality.

From a market perspective, Sterling Bancorp's Q2 results show resilience amidst challenging conditions. The net income improvement and credit loss recovery highlight effective risk management. Investors might note the stable deposit levels, which indicate customer loyalty despite market fluctuations. The slight decrease in net interest income and NIM compression could be a concern, but the overall liquidity and capital strength provide a safety buffer. The strategic focus on commercial real estate loans could be a growth driver if executed well. However, the nonperforming loans increase requires close monitoring. Investors should weigh these factors considering the broader economic outlook.

The closure of investigations by the U.S. Department of Justice into Sterling's former Advantage Loan Program is a significant positive development. This removes a substantial legal overhang that could have resulted in further financial and reputational damage. The cessation of related legal expenses will also favorably impact future financial performance. From a regulatory compliance standpoint, maintaining strong leverage ratios above regulatory requirements positions Sterling well for any potential future scrutiny or economic downturns. This legal clarity should bolster investor confidence and support the bank's strategic initiatives going forward.

SOUTHFIELD, Mich.--(BUSINESS WIRE)-- 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 unaudited financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights

  • Net income of $1.3 million, or $0.03 per diluted share
  • Net interest margin of 2.44%
  • Nonperforming loans of $12.2 million, 0.97% of total loans and 0.51% of total assets
  • Provision for (recovery of) credit losses of $(2.1) million; ratio of allowance for credit losses to total loans of 2.18%
  • Non-interest expense of $14.9 million
  • Shareholders’ equity of $328.9 million
  • Company’s consolidated and Bank’s leverage ratio of 14.26% and 13.80%, respectively
  • Total deposits of $2.0 billion
  • Total gross loans of $1.3 billion

The Company reported net income of $1.3 million, or $0.03 per diluted share, for the quarter ended June 30, 2024, compared to a net loss of $(0.2) million, or $(0.00) per diluted share, for the quarter ended March 31, 2024.

“Our focus remains fixed on protecting book value and Sterling’s financial position while we continue to explore opportunities to prudently reposition the Company and increase net income. The margin compression experienced by Sterling is generally consistent with what is being felt in much of the community banking industry. Additionally, our substantial level of liquidity continues to exert some downward pressure on earnings. Credit quality remains strong as do our capital ratios. The capital markets have seen some welcome signs of life and recent activity continues to encourage us to maintain the course of action that we are on. Deposit levels remain essentially flat which is our preferred position at this time. While the residential portfolio continues to decline through prepayments and amortization, we are seeing some growth in our commercial portfolio as several very attractive opportunities have come to fruition,” said Thomas M. O’Brien, Chairman, President, and Chief Executive Officer.

Balance Sheet

Total Assets – Total assets were $2.4 billion at June 30, 2024, a decrease of $39.8 million, or 2%, from March 31, 2024.

Cash and due from banks decreased $46.4 million, or 7%, to $599.8 million at June 30, 2024 compared to $646.2 million at March 31, 2024. Debt securities increased $47.1 million, or 12%, to $441.9 million at June 30, 2024. All debt securities are available for sale, have a relatively short duration and are considered part of our liquid assets.

Total gross loans of $1.3 billion at June 30, 2024 decreased $39.0 million, or 3%, from March 31, 2024. Residential real estate loans were $972.3 million, a decrease of $68.1 million from March 31, 2024. Commercial real estate loans were $277.3 million, an increase of $32.7 million from March 31, 2024.

Total Deposits – Total deposits were $2.0 billion at June 30, 2024, an increase of $7.6 million from March 31, 2024. Money market, savings and NOW deposits were $1.1 billion, an increase of $3.9 million from March 31, 2024. Time deposits were $905.2 million, an increase of $4.2 million from March 31, 2024. Noninterest-bearing deposits were $32.2 million at June 30, 2024 compared to $32.7 million at March 31, 2024. Total estimated uninsured deposits to total deposits were approximately 22% at June 30, 2024, March 31, 2024 and December 31, 2023. Our current strategy is to continue to offer competitive interest rates on our deposit products to maintain our existing customer deposit base and maintain our liquidity.

Federal Home Loan Bank Borrowings – In May 2024 the Company repaid with existing cash $50.0 million of a long-term fixed rate borrowing that the Federal Home Loan Bank called, as expected.

Capital Total shareholders’ equity was $328.9 million at June 30, 2024, an increase of $1.6 million compared to $327.3 million at March 31, 2024.

At June 30, 2024, the consolidated Company’s and Bank’s leverage ratios were 14.26% and 13.80%, respectively. Both the Company and the Bank are required to maintain a Tier 1 leverage ratio of greater than 9.0% to have satisfied the minimum regulatory capital requirements as well as the capital ratio requirements to be considered well capitalized for regulatory purposes.

Asset Quality and Provision for (Recovery of) Credit Losses – A provision for (recovery of) credit losses of $(2.1) million was recorded for the second quarter of 2024 compared to a provision for credit losses of $41 thousand for the first quarter of 2024. In the second quarter of 2024, the recovery of credit losses related to loans of $(2.1) million was primarily the result of a reduction in the allowance for credit losses on our residential loans due to a decline in this portfolio and lower future loss rates on one of our residential loan products. A recovery of credit losses related to loans of $(0.1) million was recorded in the first quarter of 2024. A provision for credit losses on unfunded commitments was recorded for the three months ended June 30, 2024 and March 31, 2024 of $0.1 million and $0.2 million, respectively. The allowance for credit losses at June 30, 2024 was $27.6 million, or 2.18% of total loans, compared to $29.3 million, or 2.24% of total loans, at March 31, 2024.

Net charge offs (recoveries) during the second quarter of 2024 and first quarter of 2024 were $(0.4) million and $0, respectively.

Nonperforming loans, comprised primarily of nonaccrual residential real estate loans, totaled $12.2 million, or 0.51% of total assets at June 30, 2024, compared to $9.3 million, or 0.39% of total assets at March 31, 2024. Nonperforming loans at June 30, 2024 included a $1.1 million matured commercial real estate loan, which was extended subsequent to the end of the quarter and is included in loans 90 days past due and still accruing.

Results of Operations

Net Interest Income and Net Interest Margin – Net interest income for the second quarter of 2024 was $14.4 million compared to $14.9 million for the first quarter of 2024. The net interest margin was 2.44% and 2.52% for the second and first quarter of 2024, respectively. The decrease in net interest income during the second quarter of 2024 compared to the prior quarter was primarily due to a $1.3 million increase in interest expense on our average balance of interest-bearing deposits since the rate paid during the second quarter of 2024 increased 22 basis points. This decrease was partially offset by a $0.9 million increase in interest income earned on our average balance of investment securities and other interest-earnings assets. Interest income on loans declined $0.3 million in the second quarter of 2024 as compared to the prior quarter as a decline in the average loan portfolio balance of $58.7 million, or 4%, was offset in part by the 18 basis point increase in the yield on the average loan portfolio. The increase in the yield was due primarily to residential mortgage rates resetting in the higher interest rate environment.

Non-Interest Income – Non-interest income for the second quarter of 2024 and first quarter of 2024 was $0.4 million and $0.2 million, respectively, an increase of $0.2 million, primarily due to funds received from the Federal Home Loan Bank based on the performance of loans previously sold to them.

Non-Interest Expense – Non-interest expense of $14.9 million for the second quarter of 2024 reflected a decrease of $0.5 million, or 3%, compared to $15.4 million for the first quarter of 2024. This decrease was primarily due to a $0.3 million decrease in salaries and employee benefits. In the prior quarter, we completed staff reductions in various support positions which resulted in a decline of $0.2 million in salaries and employee benefits expense compared to the first quarter of 2024. Also, favorably impacting the first quarter of 2024 was a reversal of a liability for deferred compensation. In addition, the U.S. Department of Justice advised the Company in May 2024 that it had closed all of its investigations focused on the Bank’s former Advantage Loan Program. Accordingly, we no longer expect to incur any future costs to cooperate with these completed government investigations or in connection with claims for the advancement or reimbursement of legal fees to third parties due to such investigations.

Income Tax Expense (Benefit)– For the three months ended June 30, 2024, the Company recorded an income tax expense of $0.6 million, or an effective tax rate of 33.0%, compared to an income tax (benefit) of $(0.1) million, or an effective tax rate of 34.3%, for the three months ended March 31, 2024. Our effective tax rate varies from the statutory rate primarily due to the impact of non-deductible compensation related expenses.

Mr. O’Brien said, “The year is progressing quickly and we believe there are some hopeful signs of easing inflation, moderating interest rates, and lessening financial stress in the economy. The Company will continue to move forward and explore its opportunities. We believe this is the most prudent course of action given our unique circumstances and the current market dynamics.”

Conference Call and Webcast

Management will host a conference call on Wednesday, July 24, 2024 at 11:00 a.m. Eastern Time to discuss the Company’s unaudited financial results for the quarter ended June 30, 2024. 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 July 31, 2024 by U.S. callers dialing (877) 344-7529 and international callers dialing (412) 317-0088, using conference ID number 2233158.

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 the San Francisco and Los Angeles, California metropolitan areas and New York City. Sterling also has an operations center and a branch in Southfield, Michigan. Sterling offers a range of loan products as well as retail and business banking services. For additional information, please visit the Company’s website at http://www.sterlingbank.com.

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,” “believe,” “expect,” “continue,” “will,” “estimate,” “intend,” “plan,” “anticipate,” and “would” 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 14, 2024, 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 a 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)

2024

 

2024

 

2023

Net income (loss)

$

1,316

 

$

(197

)

$

2,539

 

Income (loss) per share, diluted

$

0.03

 

$

(0.00

)

$

0.05

 

Net interest income

$

14,395

 

$

14,934

 

$

16,184

 

Net interest margin

 

2.44

%

 

2.52

%

 

2.64

%

Non-interest income

$

412

 

$

199

 

$

1,911

 

Non-interest expense

$

14,923

 

$

15,392

 

$

17,341

 

Loans, net of allowance for credit losses

$

1,236,687

 

$

1,274,022

 

$

1,449,709

 

Total deposits

$

2,013,465

 

$

2,005,855

 

$

2,041,491

 

Asset Quality
Nonperforming loans

$

12,213

 

$

9,348

 

$

2,095

 

Allowance for credit losses to total loans

 

2.18

%

 

2.24

%

 

2.43

%

Allowance for credit losses to total nonaccrual loans

 

249

%

 

314

%

 

1753

%

Nonaccrual loans to total loans

 

0.87

%

 

0.71

%

 

0.14

%

Nonperforming loans to total loans

 

0.97

%

 

0.72

%

 

0.14

%

Nonperforming loans to total assets

 

0.51

%

 

0.39

%

 

0.08

%

Net charge offs (recoveries) to average loans during the period

 

(0.03

)%

 

0.00

%

 

(0.03

)%

Provision for (recovery of) credit losses

$

(2,079

)

$

41

 

$

(2,902

)

Net charge offs (recoveries)

$

(440

)

$

(0

)

$

(402

)

Performance Ratios
Return on average assets

 

0.22

%

 

(0.03

)%

 

0.41

%

Return on average shareholders' equity

 

1.62

%

 

(0.24

)%

 

3.24

%

Efficiency ratio (1)

 

100.78

%

 

101.71

%

 

95.83

%

Yield on average interest-earning assets

 

5.75

%

 

5.61

%

 

5.15

%

Cost of average interest-bearing liabilities

 

3.91

%

 

3.66

%

 

2.99

%

Net interest spread

 

1.84

%

 

1.95

%

 

2.16

%

Leverage Capital Ratios(2)
Consolidated

 

14.26

%

 

14.10

%

 

13.44

%

Bank

 

13.80

%

 

13.58

%

 

12.91

%

 
(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) Leverage capital ratio is Tier 1 (core) capital to average total assets. June 30, 2024 capital ratios are estimated.
Sterling Bancorp, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
 

June 30,

 

March 31,

 

%

 

December 31,

 

%

 

June 30,

 

%

(dollars in thousands)

 

2024

 

 

 

2024

 

 

change

 

 

2023

 

 

change

 

 

2023

 

 

change

Assets
Cash and due from banks

$

599,774

 

$

646,168

 

(7

)%

$

577,967

 

4

%

$

655,391

 

(8

)%

Interest-bearing time deposits with other banks

 

5,232

 

 

5,229

 

0

%

 

5,226

 

0

%

 

934

 

N/M

 

Debt securities available for sale

 

441,930

 

 

394,852

 

12

%

 

419,213

 

5

%

 

334,508

 

32

%

Equity securities

 

4,637

 

 

4,656

 

(0

)%

 

4,703

 

(1

)%

 

4,640

 

(0

)%

Loans, net of allowance for credit losses of $27,556, $29,257, $29,404 and $36,153

 

1,236,687

 

 

1,274,022

 

(3

)%

 

1,319,568

 

(6

)%

 

1,449,709

 

(15

)%

Accrued interest receivable

 

8,835

 

 

9,195

 

(4

)%

 

8,509

 

4

%

 

7,489

 

18

%

Mortgage servicing rights, net

 

1,392

 

 

1,485

 

(6

)%

 

1,542

 

(10

)%

 

1,658

 

(16

)%

Leasehold improvements and equipment, net

 

4,961

 

 

5,206

 

(5

)%

 

5,430

 

(9

)%

 

5,850

 

(15

)%

Operating lease right-of-use assets

 

11,481

 

 

12,358

 

(7

)%

 

11,454

 

0

%

 

13,025

 

(12

)%

Federal Home Loan Bank stock, at cost

 

18,423

 

 

18,923

 

(3

)%

 

18,923

 

(3

)%

 

20,288

 

(9

)%

Federal Reserve Bank stock, at cost

 

9,139

 

 

9,096

 

0

%

 

9,048

 

1

%

 

 

N/M

 

Company-owned life insurance

 

8,818

 

 

8,764

 

1

%

 

8,711

 

1

%

 

8,605

 

2

%

Deferred tax asset, net

 

17,923

 

 

18,240

 

(2

)%

 

16,959

 

6

%

 

18,538

 

(3

)%

Other assets

 

5,507

 

 

6,361

 

(13

)%

 

8,750

 

(37

)%

 

11,375

 

(52

)%

Total assets

$

2,374,739

 

$

2,414,555

 

(2

)%

$

2,416,003

 

(2

)%

$

2,532,010

 

(6

)%

 
Liabilities
Noninterest-bearing deposits

$

32,167

 

$

32,680

 

(2

)%

$

35,245

 

(9

)%

$

44,799

 

(28

)%

Interest-bearing deposits

 

1,981,298

 

 

1,973,175

 

0

%

 

1,968,741

 

1

%

 

1,996,692

 

(1

)%

Total deposits

 

2,013,465

 

 

2,005,855

 

0

%

 

2,003,986

 

0

%

 

2,041,491

 

(1

)%

Federal Home Loan Bank borrowings

 

 

 

50,000

 

(100

)%

 

50,000

 

(100

)%

 

50,000

 

(100

)%

Subordinated notes, net

 

 

 

 

N/M

 

 

 

N/M

 

 

65,234

 

(100

)%

Operating lease liabilities

 

12,504

 

 

13,407

 

(7

)%

 

12,537

 

(0

)%

 

14,176

 

(12

)%

Other liabilities

 

19,900

 

 

18,027

 

10

%

 

21,757

 

(9

)%

 

43,433

 

(54

)%

Total liabilities

 

2,045,869

 

 

2,087,289

 

(2

)%

 

2,088,280

 

(2

)%

 

2,214,334

 

(8

)%

 
Shareholders’ Equity
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding

 

 

 

 

 

 

 

 

 

 

 

Common stock, no par value, authorized shares 500,000,000; shares issued and outstanding 52,371,509, 52,046,683, 52,070,361 and 52,081,886

 

84,323

 

 

84,323

 

0

%

 

84,323

 

0

%

 

84,323

 

0

%

Additional paid-in capital

 

17,592

 

 

17,173

 

2

%

 

16,660

 

6

%

 

15,098

 

17

%

Retained earnings

 

243,083

 

 

241,767

 

1

%

 

241,964

 

0

%

 

236,587

 

3

%

Accumulated other comprehensive loss

 

(16,128

)

 

(15,997

)

(1

)%

 

(15,224

)

(6

)%

 

(18,332

)

12

%

Total shareholders’ equity

 

328,870

 

 

327,266

 

0

%

 

327,723

 

0

%

 

317,676

 

4

%

Total liabilities and shareholders’ equity

$

2,374,739

 

$

2,414,555

 

(2

)%

$

2,416,003

 

(2

)%

$

2,532,010

 

(6

)%

 
N/M - Not Meaningful
 
Sterling Bancorp, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
 

Three Months Ended

 

Six Months Ended

(dollars in thousands, except per share amounts)

 

June 30,

2024

 

 

 

March 31,

2024

 

 

%

change

 

June 30,

2023

 

%

change

 

June 30,

2024

 

 

June 30,

2023

 

%

change

Interest income
Interest and fees on loans

$

20,620

 

$

20,969

 

(2

)%

$

21,892

 

(6

)%

$

41,589

 

$

44,052

 

(6

)%

Interest and dividends on investment securities and restricted
stock

 

4,758

 

 

4,018

 

18

%

 

2,666

 

78

%

 

8,776

 

 

5,122

 

71

%

Interest on interest-bearing cash deposits

 

8,486

 

 

8,295

 

2

%

 

7,002

 

21

%

 

16,781

 

 

11,809

 

42

%

Total interest income

 

33,864

 

 

33,282

 

2

%

 

31,560

 

7

%

 

67,146

 

 

60,983

 

10

%

Interest expense
Interest on deposits

 

19,350

 

 

18,100

 

7

%

 

13,337

 

45

%

 

37,450

 

 

23,146

 

62

%

Interest on Federal Home Loan Bank borrowings

 

119

 

 

248

 

(52

)%

 

248

 

(52

)%

 

367

 

 

493

 

(26

)%

Interest on Subordinated Notes

 

 

 

 

N/M

 

 

1,791

 

(100

)%

 

 

 

3,484

 

(100

)%

Total interest expense

 

19,469

 

 

18,348

 

6

%

 

15,376

 

27

%

 

37,817

 

 

27,123

 

39

%

Net interest income

 

14,395

 

 

14,934

 

(4

)%

 

16,184

 

(11

)%

 

29,329

 

 

33,860

 

(13

)%

Provision for (recovery of) credit losses

 

(2,079

)

 

41

 

N/M

 

 

(2,902

)

28

%

 

(2,038

)

 

(2,228

)

9

%

Net interest income after provision for (recovery of) credit losses

 

16,474

 

 

14,893

 

11

%

 

19,086

 

(14

)%

 

31,367

 

 

36,088

 

(13

)%

Non-interest income
Service charges and fees

 

92

 

 

87

 

6

%

 

78

 

18

%

 

179

 

 

172

 

4

%

Loss on sale of investment securities

 

 

 

 

N/M

 

 

 

N/M

 

 

 

 

(2

)

100

%

Gain on sale of loans held for sale

 

 

 

 

N/M

 

 

1,720

 

(100

)%

 

 

 

1,695

 

(100

)%

Unrealized loss on equity securities

 

(19

)

 

(47

)

60

%

 

(71

)

73

%

 

(66

)

 

 

N/M

 

Net servicing income

 

46

 

 

75

 

(39

)%

 

102

 

(55

)%

 

121

 

 

161

 

(25

)%

Income earned on company-owned life insurance

 

84

 

 

83

 

1

%

 

81

 

4

%

 

167

 

 

161

 

4

%

Other

 

209

 

 

1

 

N/M

 

 

1

 

N/M

 

 

210

 

 

2

 

N/M

 

Total non-interest income

 

412

 

 

199

 

N/M

 

 

1,911

 

(78

)%

 

611

 

 

2,189

 

(72

)%

Non-interest expense
Salaries and employee benefits

 

8,196

 

 

8,460

 

(3

)%

 

9,274

 

(12

)%

 

16,656

 

 

18,684

 

(11

)%

Occupancy and equipment

 

2,005

 

 

2,084

 

(4

)%

 

2,051

 

(2

)%

 

4,089

 

 

4,163

 

(2

)%

Professional fees

 

2,147

 

 

2,182

 

(2

)%

 

3,521

 

(39

)%

 

4,329

 

 

6,742

 

(36

)%

FDIC insurance

 

262

 

 

262

 

0

%

 

263

 

(0

)%

 

524

 

 

520

 

1

%

Data processing

 

742

 

 

733

 

1

%

 

754

 

(2

)%

 

1,475

 

 

1,492

 

(1

)%

Other

 

1,571

 

 

1,671

 

(6

)%

 

1,478

 

6

%

 

3,242

 

 

3,577

 

(9

)%

Total non-interest expense

 

14,923

 

 

15,392

 

(3

)%

 

17,341

 

(14

)%

 

30,315

 

 

35,178

 

(14

)%

Income (loss) before income taxes

 

1,963

 

 

(300

)

N/M

 

 

3,656

 

(46

)%

 

1,663

 

 

3,099

 

(46

)%

Income tax expense (benefit)

 

647

 

 

(103

)

N/M

 

 

1,117

 

(42

)%

 

544

 

 

1,063

 

(49

)%

Net income (loss)

$

1,316

 

$

(197

)

N/M

 

$

2,539

 

(48

)%

$

1,119

 

$

2,036

 

(45

)%

 
Income (loss) per share, basic and diluted

$

0.03

 

$

(0.00

)

$

0.05

 

$

0.02

 

$

0.04

 

Weighted average common shares outstanding:
Basic

 

50,920,703

 

 

50,843,106

 

 

50,672,461

 

 

50,881,905

 

 

50,559,092

 

Diluted

 

51,349,764

 

 

50,843,106

 

 

50,778,213

 

 

51,326,379

 

 

50,705,998

 

 
N/M - Not Meaningful
 
Sterling Bancorp, Inc.
Yield Analysis and Net Interest Income (Unaudited)
 
Three Months Ended
June 30, 2024 March 31, 2024 June 30, 2023
Average Average Average Average Average Average
(dollars in thousands) Balance Interest Yield/Rate Balance Interest Yield/Rate Balance Interest Yield/Rate
Interest-earning assets
Loans(1)
Residential real estate and other consumer

$

1,006,040

$

17,007

6.76

%

$

1,064,200

$

17,197

6.46

%

$

1,277,408

$

18,250

5.71

%

Commercial real estate

 

252,380

 

3,252

5.15

%

 

246,423

 

3,213

5.22

%

 

224,836

 

2,787

4.96

%

Construction

 

4,997

 

130

10.41

%

 

7,246

 

242

13.36

%

 

31,819

 

820

10.31

%

Commercial and industrial

 

10,855

 

231

8.51

%

 

15,087

 

317

8.40

%

 

2,255

 

35

6.21

%

Total loans

 

1,274,272

 

20,620

6.47

%

 

1,332,956

 

20,969

6.29

%

 

1,536,318

 

21,892

5.70

%

Securities, includes restricted stock(2)

 

464,404

 

4,758

4.10

%

 

437,712

 

4,018

3.67

%

 

375,094

 

2,666

2.84

%

Other interest-earning assets

 

618,846

 

8,486

5.49

%

 

601,791

 

8,295

5.51

%

 

541,887

 

7,002

5.17

%

Total interest-earning assets

 

2,357,522

 

33,864

5.75

%

 

2,372,459

 

33,282

5.61

%

 

2,453,299

 

31,560

5.15

%

Noninterest-earning assets
Cash and due from banks

 

3,391

 

4,643

 

4,233

Other assets

 

29,717

 

29,521

 

27,645

Total assets

$

2,390,630

$

2,406,623

$

2,485,177

Interest-bearing liabilities
Money market, savings and NOW

$

1,062,347

$

9,827

3.71

%

$

1,074,937

$

9,655

3.60

%

$

980,359

$

6,270

2.57

%

Time deposits

 

911,466

 

9,523

4.19

%

 

884,115

 

8,445

3.83

%

 

969,938

 

7,067

2.92

%

Total interest-bearing deposits

 

1,973,813

 

19,350

3.93

%

 

1,959,052

 

18,100

3.71

%

 

1,950,297

 

13,337

2.74

%

FHLB borrowings

 

24,176

 

119

1.95

%

 

50,000

 

248

1.96

%

 

50,000

 

248

1.96

%

Subordinated notes, net

 

-

 

-

0.00

%

 

-

 

-

0.00

%

 

65,245

 

1,791

10.86

%

Total borrowings

 

24,176

 

119

1.95

%

 

50,000

 

248

1.96

%

 

115,245

 

2,039

7.00

%

Total interest-bearing liabilities

 

1,997,989

 

19,469

3.91

%

 

2,009,052

 

18,348

3.66

%

 

2,065,542

 

15,376

2.99

%

Noninterest-bearing liabilities
Demand deposits

 

31,930

 

35,348

 

44,005

Other liabilities

 

33,361

 

34,924

 

61,487

Shareholders' equity

 

327,350

 

327,299

 

314,143

Total liabilities and shareholders' equity

$

2,390,630

$

2,406,623

$

2,485,177

Net interest income and spread(2)

$

14,395

1.84

%

$

14,934

1.95

%

$

16,184

2.16

%

Net interest margin(2)

2.44

%

2.52

%

2.64

%

 
(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, 2024 June 30, 2023
Average Average Average Average
(dollars in thousands) Balance Interest Yield/Rate Balance Interest Yield/Rate
Interest-earning assets
Loans(1)
Residential real estate and other consumer

$

1,035,121

$

34,204

6.61

%

$

1,321,858

$

36,764

5.56

%

Commercial real estate

 

249,402

 

6,465

5.18

%

 

224,383

 

5,383

4.80

%

Construction

 

6,122

 

372

12.15

%

 

36,601

 

1,854

10.13

%

Commercial and industrial

 

12,971

 

548

8.45

%

 

1,821

 

51

5.60

%

Total loans

 

1,303,616

 

41,589

6.38

%

 

1,584,663

 

44,052

5.56

%

Securities, includes restricted stock(2)

 

451,059

 

8,776

3.89

%

 

370,744

 

5,122

2.76

%

Other interest-earning assets

 

610,318

 

16,781

5.50

%

 

477,186

 

11,809

4.95

%

Total interest-earning assets

 

2,364,993

 

67,146

5.68

%

 

2,432,593

 

60,983

5.01

%

Noninterest-earning assets
Cash and due from banks

 

4,018

 

4,353

Other assets

 

29,616

 

27,349

Total assets

$

2,398,627

$

2,464,295

Interest-bearing liabilities
Money market, savings and NOW

$

1,068,642

$

19,482

3.66

%

$

990,874

$

10,884

2.22

%

Time deposits

 

897,791

 

17,968

4.01

%

 

935,605

 

12,262

2.64

%

Total interest-bearing deposits

 

1,966,433

 

37,450

3.82

%

 

1,926,479

 

23,146

2.42

%

FHLB borrowings

 

37,088

 

367

1.98

%

 

50,000

 

493

1.99

%

Subordinated notes, net

 

-

 

-

0.00

%

 

65,255

 

3,484

10.62

%

Total borrowings

 

37,088

 

367

1.96

%

 

115,255

 

3,977

6.86

%

Total interest-bearing liabilities

 

2,003,521

 

37,817

3.79

%

 

2,041,734

 

27,123

2.68

%

Noninterest-bearing liabilities
Demand deposits

 

33,639

 

47,127

Other liabilities

 

34,142

 

61,892

Shareholders' equity

 

327,325

 

313,542

Total liabilities and shareholders' equity

$

2,398,627

$

2,464,295

Net interest income and spread(2)

$

29,329

1.89

%

$

33,860

2.33

%

Net interest margin(2)

2.48

%

2.78

%

 
(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 equivalence adjustments.
Sterling Bancorp, Inc.
Loan Composition (Unaudited)
 

June 30,

 

March 31,

 

%

 

December 31,

 

%

 

June 30,

 

%

(dollars in thousands)

 

2024

 

 

 

2024

 

 

change

 

 

2023

 

 

change

 

 

2023

 

 

change

Residential real estate

$

972,326

 

$

1,040,464

 

(7

)%

$

1,085,776

 

 

(10

)%

$

1,214,439

 

 

(20

)%

Commercial real estate

 

277,273

 

 

244,546

 

13

%

 

236,982

 

 

17

%

 

221,658

 

 

25

%

Construction

 

5,050

 

 

4,915

 

3

%

 

10,381

 

 

(51

)%

 

31,978

 

 

(84

)%

Commercial and industrial

 

9,593

 

 

13,348

 

(28

)%

 

15,832

 

 

(39

)%

 

17,772

 

 

(46

)%

Other consumer

 

1

 

 

6

 

(83

)%

 

1

 

 

0

%

 

15

 

 

(93

)%

Total loans held for investment

 

1,264,243

 

 

1,303,279

 

(3

)%

 

1,348,972

 

 

(6

)%

 

1,485,862

 

 

(15

)%

Less: allowance for credit losses

 

(27,556

)

 

(29,257

)

(6

)%

 

(29,404

)

 

(6

)%

 

(36,153

)

 

(24

)%

Loans, net

$

1,236,687

 

$

1,274,022

 

(3

)%

$

1,319,568

 

 

(6

)%

$

1,449,709

 

 

(15

)%

 
 
Sterling Bancorp, Inc.
Allowance for Credit Losses - Loans (Unaudited)
 
Three Months Ended

June 30,

 

March 31,

 

December 31,

 

June 30,

(dollars in thousands)

 

2024

 

 

 

2024

 

 

 

2023

 

 

 

2023

 

Balance at beginning of period

$

29,257

 

$

29,404

 

$

34,267

 

$

38,565

 

Provision for (recovery of) credit losses

 

(2,141

)

 

(147

)

 

(4,927

)

 

(2,814

)

Charge offs

 

 

 

 

 

 

 

 

Recoveries

 

440

 

 

 

 

64

 

 

402

 

Balance at end of period

$

27,556

 

$

29,257

 

$

29,404

 

$

36,153

 

 
 
Sterling Bancorp, Inc.
Deposit Composition (Unaudited)
 

June 30,

 

March 31,

 

%

 

December 31,

 

%

 

June 30,

 

%

(dollars in thousands)

 

2024

 

 

 

2024

 

 

change

 

 

2023

 

 

change

 

 

2023

 

 

change

Noninterest-bearing deposits

$

32,167

 

$

32,680

 

(2

)%

$

35,245

 

 

(9

)%

$

44,799

 

 

(28

)%

Money Market, Savings and NOW

 

1,076,079

 

 

1,072,179

 

0

%

 

1,095,521

 

 

(2

)%

 

1,015,394

 

 

6

%

Time deposits

 

905,219

 

 

900,996

 

0

%

 

873,220

 

 

4

%

 

981,298

 

 

(8

)%

Total deposits

$

2,013,465

 

$

2,005,855

 

0

%

$

2,003,986

 

 

0

%

$

2,041,491

 

 

(1

)%

 
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)

 

2024

 

 

 

2024

 

 

 

2023

 

 

 

2023

 

Nonaccrual loans(1)
Residential real estate

$

11,049

 

$

9,318

 

$

8,942

 

$

2,062

 

Loans past due 90 days or more and still accruing interest

 

1,164

 

 

30

 

 

31

 

 

33

 

Nonperforming loans

$

12,213

 

$

9,348

 

$

8,973

 

$

2,095

 

Total loans (1)

$

1,264,243

 

$

1,303,279

 

$

1,348,972

 

$

1,485,862

 

Total assets

$

2,374,739

 

$

2,414,555

 

$

2,416,003

 

$

2,532,010

 

Allowance for credit losses to total loans

 

2.18

%

 

2.24

%

 

2.18

%

 

2.43

%

Allowance for credit losses to total nonaccrual loans

 

249

%

 

314

%

 

329

%

 

1753

%

Nonaccrual loans to total loans

 

0.87

%

 

0.71

%

 

0.66

%

 

0.14

%

Nonperforming loans to total loans

 

0.97

%

 

0.72

%

 

0.67

%

 

0.14

%

Nonperforming loans to total assets

 

0.51

%

 

0.39

%

 

0.37

%

 

0.08

%

Net charge offs (recoveries) to average loans during the period

 

(0.03

)%

 

0.00

%

 

0.00

%

 

(0.03

)%

 
(1) Loans are classified as held for investment and are presented before the allowance for credit losses.

 

Investor Contact:

Sterling Bancorp, Inc.

Karen Knott

Executive Vice President and Chief Financial Officer

(248) 359-6624

kzaborney@sterlingbank.com

Source: Sterling Bancorp, Inc.

FAQ

What was Sterling Bancorp's (SBT) net income for Q2 2024?

Sterling Bancorp (SBT) reported a net income of $1.3 million, or $0.03 per diluted share, for the second quarter of 2024.

How did Sterling Bancorp's (SBT) total deposits change in Q2 2024?

Sterling Bancorp's (SBT) total deposits increased by $7.6 million to $2.0 billion at June 30, 2024, compared to the previous quarter.

What was Sterling Bancorp's (SBT) net interest margin in Q2 2024?

Sterling Bancorp's (SBT) net interest margin was 2.44% for the second quarter of 2024, down from 2.52% in the previous quarter.

How did Sterling Bancorp's (SBT) loan portfolio change in Q2 2024?

Sterling Bancorp's (SBT) total gross loans decreased by $39.0 million, or 3%, to $1.3 billion in Q2 2024. Residential real estate loans decreased by $68.1 million, while commercial real estate loans increased by $32.7 million.

Sterling Bancorp, Inc.

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247.96M
18.11M
66.98%
27.45%
0.6%
Banks - Regional
Savings Institution, Federally Chartered
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United States of America
SOUTHFIELD