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 first quarter ended March 31, 2023.
First Quarter 2023
Highlights
- Net loss of $(0.5) million, or $(0.01) per diluted
share
- Net interest margin of 2.93%
- Adopted Current Expected Credit Loss (“CECL”) methodology on
January 1, 2023, resulting in a $0.5 million increase (after tax)
to retained earnings
- Recorded provision for credit losses of $0.7 million; ratio
of allowance for credit losses to total loans held for investment
of 2.48%
- Non-interest expense of $17.8 million
- Shareholders’ equity of $315.5 million
- Company’s consolidated and Bank’s leverage ratio of 13.49%
and 16.52%, respectively
- Total deposits of $1.9 billion
- Total gross loans held for investment of $1.6
billion
- All debt securities are available for sale; none held to
maturity
- Reclassified $41.1 million of nonaccrual and delinquent
residential loans as held for sale; with this reclassification
there are virtually no nonperforming assets held for investment;
reduced total nonperforming assets to $26.3 million, almost
entirely comprised of nonaccrual residential loans
held for sale
- Entered into Plea Agreement with Department of Justice,
resolving the investigation of the Bank and the Company relating to
the Bank’s former Advantage Loan Program
The Company reported a net loss of $(0.5) million, or $(0.01)
per diluted share, for the quarter ended March 31, 2023, compared
to a net loss of $(18.4) million, or $(0.37) per diluted share, for
the quarter ended December 31, 2022.
The Company reclassified approximately $41.1 million of
nonaccrual and delinquent residential loans as held for sale with
the intent to liquidate that exposure in the next few months. In
reclassifying these loans, we recorded a $6.5 million charge off
applied against the allowance for credit losses to reflect these
loans at their estimated fair value of $34.6 million. The Bank
engaged an independent third-party advisor to market the loans to
multiple investors and has received several favorable bids.
“Sterling’s first quarter of 2023 results continue the very
deliberate remediation and repositioning begun in 2020. As most are
no doubt aware, we announced a settlement with the U. S. Department
of Justice in their long running investigation of the ill-fated
Advantage Loan Program. That settlement, when combined with last
year’s settlement with the Office of the Comptroller of the
Currency, helps clear the uncertainty that has existed with these
governmental investigations. Sterling is well positioned now with
strong capital levels, abundant liquidity and exceptional asset
quality,” said Thomas M. O’Brien, Chairman, President, and Chief
Executive Officer.
Balance Sheet
Total Assets – Total assets were $2.4 billion at March
31, 2023, a decrease of $33.2 million, or 1%, from December 31,
2022.
Cash and due from banks increased $39.4 million, or 10%, to
$419.2 million at March 31, 2023 compared to $379.8 million at
December 31, 2022. Debt securities, all of which are available for
sale, are of relatively short duration and which we consider part
of our liquid assets, of $342.5 million at March 31, 2023 were
relatively unchanged from December 31, 2022.
Total gross loans held for investment of $1.6 billion at March
31, 2023 declined $106.8 million, or 6%, from $1.7 billion at
December 31, 2022. Loans held for sale of $38.0 million at March
31, 2023 increased $30.3 million from $7.7 million at December 31,
2022 primarily due to the reclassification of residential real
estate loans from held for investment to held for sale.
Total Deposits – Total deposits were $1.9 billion at
March 31, 2023, a decrease of $32.2 million, or 2%, from December
31, 2022. Money market, savings and NOW deposits were $958.2
million, a decrease of $81.1 million, or 8%, from December 31,
2022. Time deposits were $917.2 million, an increase of $55.5
million, or 6%, compared to $861.7 million at December 31, 2022.
Noninterest-bearing deposits were $46.5 million at March 31, 2023
compared to $53.0 million at December 31, 2022. Total estimated
uninsured deposits were approximately 20.2% of total deposits at
March 31, 2023 compared to 20.8% at December 31, 2022. Our customer
deposit balances have remained relatively stable following the
recent bank failures. Our current strategy is to continue to offer
competitive interest rates on our deposit products to maintain our
existing customer deposit base and help manage our liquidity.
Capital – Total shareholders’ equity was $315.5 million
at March 31, 2023 compared to $312.6 million at December 31, 2022.
The increase in shareholders’ equity is primarily attributable to
unrealized losses on our investment securities portfolio in
accumulated other comprehensive loss that have recovered by $2.8
million since December 31, 2022 primarily due to changes in market
value related to the shift in the interest rate yield curve.
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, we are required to
maintain a Tier 1 leverage ratio of greater than 9.0% to be
considered to have satisfied the risk-based and leverage capital
requirements in the regulatory agencies’ generally applicable
capital rules and to have met the well capitalized ratio
requirements. At March 31, 2023, the consolidated Company’s and
Bank’s leverage ratio were 13.49% and 16.52%, respectively.
Asset Quality and Provision for (Recovery of) Credit
Losses – On January 1, 2023, the Company adopted the CECL
methodology under Accounting Standards Codification Topic 326, in
which the allowance for credit losses reflects expected credit
losses for the remaining estimated life of loans using historical
experience, current conditions, and reasonable and supportable
forecasts. The Company decreased its allowance for credit losses by
$1.7 million and established a liability for unfunded commitments
of $0.6 million on the adoption date. Also on January 1, 2023, the
Company adopted ASU No. 2022-02 which eliminated the accounting
guidance for troubled debt restructurings, as a result the Company
increased the allowance for credit losses by $0.4 million on the
adoption date. The adoption of these standards resulted in a
cumulative-effect adjustment, after tax, of $0.5 million increase
to retained earnings.
A provision for credit losses of $0.7 million was recorded for
the first quarter of 2023 compared to a recovery of $(0.2) million
for the fourth quarter of 2022. The allowance for credit losses at
March 31, 2023 was $38.6 million, or 2.48% of total loans held for
investment, compared to $45.5 million, or 2.74% of total loans held
for investment, at December 31, 2022.
Net charge offs during the first quarter of 2023 were $6.4
million compared to net recoveries of $(0.3) million in the fourth
quarter of 2022. Net charge offs in the first quarter of 2023
primarily reflects the $6.5 million in charge offs of our recorded
investment on those residential loans reclassified as held for
sale, which also contributed to the decrease in our allowance for
credit losses.
There were no loans held for investment in nonaccrual status at
March 31, 2023, compared to $33.7 million at December 31, 2022.
Nonperforming assets at March 31, 2023, which includes nonaccrual
loans held for sale at their fair value, totaled $26.3 million, or
1.09% of total assets, compared to $38.3 million, or 1.57% of total
assets at December 31, 2022 and $54.1 million, or 1.93% of total
assets, at March 31, 2022. The residential real estate loans that
were reclassified from held for investment to held for sale in the
first quarter of 2023 included all nonaccrual loans as we have
commenced a process to liquidate that exposure.
“We have accomplished much in strengthening our balance sheet
since 2020, and we are now focused on building profitability. In
that time, we have removed most of the wholesale funding
liabilities, including all broker deposits and high interest rate
time deposits, and built a very comprehensive risk management
framework and culture. In the first quarter of 2023, we adopted
CECL and successfully completed our first SOX-compliant audit,”
said O’Brien.
Results of Operations
Net Interest Income and Net Interest Margin – Net
interest income for the first quarter of 2023 was $17.7 million
compared to $18.5 million for the fourth quarter of 2022 and $21.3
million for the first quarter of 2022. The decrease in net interest
income during the first quarter of 2023 compared to the prior
quarter was primarily due to an increase in interest expense on our
average balance of interest-bearing deposits since the average rate
paid during the first quarter of 2023 increased 63 basis points,
partially offset by an increase in interest income earned on our
average balance of interest-bearing assets since the average yield
for the first quarter of 2023 increased 34 basis points.
The decrease in net interest income during the first quarter of
2023 compared to the first 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
174 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 133 basis points. The average
balance in our loan portfolio declined $369.6 million, or 18%, from
$2.0 billion at March 31, 2022 to $1.6 billion at March 31, 2023.
Loan repayments continue to outpace new loan production as the
result of our decisions to delay the development of new residential
and commercial loan products and to stop originating construction
loans.
The net interest margin of 2.93% for the first quarter of 2023
decreased from the net interest margin of 3.09% for the fourth
quarter of 2022 and decreased from the net interest margin of 3.03%
for the first quarter of 2022.
Non-Interest Income – Although non-interest income for
the first quarter of 2023 was relatively flat compared to the
fourth quarter of 2022, it reflected a decrease of $1.1 million
compared to the first quarter of 2022 primarily as a result of
declines in net servicing income of $0.4 million and approximately
$0.4 million in recoveries of the loan valuation losses previously
taken on the commercial real estate loan portfolio that was sold in
the first quarter of 2022.
Non-Interest Expense – Non-interest expense of $17.8
million for the first quarter of 2023 reflected a decrease of $19.3
million, or 52%, compared to $37.1 million for the fourth quarter
of 2022. This decrease was primarily due to the $18.2 million
provision for contingent losses in the prior quarter reflecting the
financial impact of the resolution of the U.S. Department of
Justice (the “DOJ”) investigation of the Company and Bank related
to the Advantage Loan Program. On March 15, 2023, the Company
entered into a Plea Agreement (the “Plea Agreement”) with the DOJ,
resolving the DOJ’s investigation. Under the Plea Agreement, the
Company has agreed to plead guilty to one count of securities fraud
primarily relating to disclosures in certain securities law filings
with respect to the Advantage Loan Program, pay $27.2 million in
restitution and further enhance its compliance program and internal
controls related to securities law compliance.
Professional fees were $2.7 million lower in the first quarter
of 2023 compared to the prior quarter principally due to
reimbursements received from an insurance carrier of $2.2 million
for previously incurred direct and third party legal expenses
related to the governmental investigations. The insurance
reimbursements received in the current quarter also contributed to
the decrease in non-interest expense from the first quarter of
2022.
Income Tax Expense (Benefit)– For the three months ended
March 31, 2023, the Company recorded an income tax benefit of $(54)
thousand, or effective tax rate of 9.7%, compared to an income tax
provision of $0.3 million, or effective tax rate of (1.5)% for the
three months ended December 31, 2022. Our effective tax rate varies
from the statutory rate for the current quarter due to the impact
of non-deductible compensation related expenses and from the prior
quarter due to the impacts of non-deductible compensation and the
provision for contingent losses of $18.2 million, which is not
deductible for tax purposes.
Mr. O’Brien said, “Of course, any discussion of early 2023 in
the banking world would be lacking without a discussion of the
collapse of Silicon Valley Bank and Signature Bank of New York. The
epitaphs are still being written, but, in my experience, these
crises can be distilled down to the consequences of not following
the critical elements of proper risk management. Management must
know their institution intimately along with its critical risks and
exposures. Event risk is always pervasive and in no industry more
so than banking. Too much focus on short-term, quarterly results
often leads to a missed opportunity to address needed structural
changes or repositioning. The lessons the finance world learned
from the 1980s and 1930s in liquidity planning, especially for fast
growing and volatile deposit concentrations, should have been
burned into bank management training courses. It certainly does
very few any good to have a stock price trade at $350 per share
only to collapse to zero. These failures will undoubtedly have
repercussions in our industry in the times ahead.
In all of that chaos, however, Sterling’s deposits held
reasonably firm. In the first few days we had some minor account
repositioning and some deposit amounts leave, while we also had
some new money flow into the Bank. As of late April, our deposits
levels were up over $25 million from the day before the failures. I
should also point out that all of our securities are classified as
available for sale with none in the opaque held to maturity
classification. Like at most banks, the higher interest rate
environment has encouraged our customers to look more favorably at
CDs than had been the case in recent years. Consequently, margin
pressures are being witnessed here and throughout the
industry.”
Conference Call and Webcast
Management will host a conference call on Monday, May 1, 2023 at
11:00 a.m. Eastern Time to discuss the Company’s unaudited
financial results for the quarter ended March 31, 2023. 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 May 8,
2023 by dialing (877) 344-7529, using conference ID number
2309497.
About Sterling Bancorp, Inc.
Sterling Bancorp, Inc. is a unitary thrift holding company. Its
wholly owned subsidiary, Sterling Bank and Trust, F.S.B., has
primary branch operations in San Francisco and Los Angeles,
California and New York City. Sterling offers a range of loan
products as well as retail and business banking services. Sterling
also has an operations center and a branch in Southfield, Michigan.
For additional information, please visit the Company’s website at
http://www.sterlingbank.com.
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 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. 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
March 31,
December 31,
March 31,
(dollars in thousands, except per share data)
2023
2022
2022
Net income (loss)
$
(503
)
$
(18,433
)
$
5,260
Income (loss) per share, diluted
$
(0.01
)
$
(0.37
)
$
0.10
Net interest income
$
17,676
$
18,521
$
21,272
Net interest margin
2.93
%
3.09
%
3.03
%
Non-interest income
$
278
$
248
$
1,411
Non-interest expense
$
17,837
$
37,110
$
19,423
Loans, net of allowance for credit losses
$
1,513,481
$
1,613,385
$
1,822,186
Total deposits
$
1,921,822
$
1,954,037
$
2,200,172
Asset Quality Nonperforming loans
$
34
$
33,725
$
44,229
Allowance for credit losses to total loans
2.48
%
2.74
%
2.80
%
Allowance for credit losses to nonaccrual loans
—
135
%
119
%
Nonaccrual loans to total loans outstanding
—
2.03
%
2.36
%
Net charge offs (recoveries) to average loans outstanding during
the period
0.39
%
(0.02
)%
(0.01
)%
Provision for (recovery of) credit losses
$
674
$
(179
)
$
(4,289
)
Net charge offs (recoveries)
$
6,412
$
(281
)
$
(196
)
Performance Ratios Return on average assets
(0.08
)%
(3.01
)%
0.74
%
Return on average shareholders' equity
(0.65
)%
(22.15
)%
6.08
%
Efficiency ratio (1)
99.35
%
197.72
%
85.63
%
Yield on average interest-earning assets
4.88
%
4.54
%
3.55
%
Cost of average interest-bearing liabilities
2.36
%
1.74
%
0.62
%
Net interest spread
2.52
%
2.80
%
2.93
%
Capital Ratios(2)(3) Regulatory and Other Capital Ratios
— Consolidated: Tier 1 (core) capital to average total assets
(leverage ratio)
13.49
%
13.54
%
12.24
%
Regulatory and Other Capital Ratios — Bank: Tier 1 (core)
capital to average total assets (leverage ratio)
16.52
%
16.56
%
13.65
%
(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) March 31, 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) March 31, December 31,
% March 31, % (dollars in thousands)
2023
2022
change
2022
change
Assets Cash and due from banks
$
419,219
$
379,798
10
%
$
486,743
(14
)%
Interest-bearing time deposits with other banks
934
934
0
%
1,183
(21
)%
Debt securities available for sale
342,534
343,558
(0
)%
359,375
(5
)%
Equity securities
4,712
4,642
2
%
4,986
(5
)%
Loans held for sale
37,979
7,725
N/M
12,230
N/M
Loans, net of allowance for credit losses of $38,565, $45,464 and
$52,455
1,513,481
1,613,385
(6
)%
1,822,186
(17
)%
Accrued interest receivable
7,617
7,829
(3
)%
6,655
14
%
Mortgage servicing rights, net
1,703
1,794
(5
)%
2,888
(41
)%
Leasehold improvements and equipment, net
6,139
6,301
(3
)%
7,144
(14
)%
Operating lease right-of-use assets
13,916
14,800
(6
)%
17,210
(19
)%
Federal Home Loan Bank stock, at cost
20,288
20,288
0
%
20,288
0
%
Company-owned life insurance
8,553
8,501
1
%
33,163
(74
)%
Deferred tax asset, net
20,065
23,704
(15
)%
20,865
(4
)%
Other assets
14,408
11,476
26
%
14,213
1
%
Total assets
$
2,411,548
$
2,444,735
(1
)%
$
2,809,129
(14
)%
Liabilities Noninterest-bearing deposits
$
46,496
$
53,041
(12
)%
$
64,944
(28
)%
Interest-bearing deposits
1,875,326
1,900,996
(1
)%
2,135,228
(12
)%
Total deposits
1,921,822
1,954,037
(2
)%
2,200,172
(13
)%
Federal Home Loan Bank borrowings
50,000
50,000
0
%
150,000
(67
)%
Subordinated notes, net
65,253
65,271
(0
)%
65,326
(0
)%
Operating lease liabilities
15,089
15,990
(6
)%
18,421
(18
)%
Accrued expenses and other liabilities
43,874
46,810
(6
)%
33,804
30
%
Total liabilities
2,096,038
2,132,108
(2
)%
2,467,723
(15
)%
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 50,808,116 at March 31, 2023, 50,795,871 at
December 31, 2022 and 50,496,833 at March 31, 2022
83,295
83,295
0
%
82,157
1
%
Additional paid-in capital
14,906
14,808
1
%
14,186
5
%
Retained earnings
234,048
234,049
(0
)%
253,503
(8
)%
Accumulated other comprehensive loss
(16,739
)
(19,525
)
14
%
(8,440
)
(98
)%
Total shareholders’ equity
315,510
312,627
1
%
341,406
(8
)%
Total liabilities and shareholders’ equity
$
2,411,548
$
2,444,735
(1
)%
$
2,809,129
(14
)%
N/M - Not Meaningful
Sterling Bancorp, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended March 31, December
31, % March 31, % (dollars in
thousands, except per share amounts)
2023
2022
change
2022
change Interest income Interest and fees on loans
$
22,160
$
21,786
2
%
$
23,868
(7
)%
Interest and dividends on investment securities and restrictedstock
2,456
2,293
7
%
835
N/M
Other interest
4,807
3,200
50
%
215
N/M
Total interest income
29,423
27,279
8
%
24,918
18
%
Interest expense Interest on deposits
9,809
6,922
42
%
2,330
N/M
Interest on Federal Home Loan Bank borrowings
245
250
(2
)%
352
(30
)%
Interest on subordinated notes
1,693
1,586
7
%
964
76
%
Total interest expense
11,747
8,758
34
%
3,646
N/M
Net interest income
17,676
18,521
(5
)%
21,272
(17
)%
Provision for (recovery of) credit losses
674
(179
)
N/M
(4,289
)
N/M
Net interest income after provision for (recovery of) credit losses
17,002
18,700
(9
)%
25,561
(33
)%
Non-interest income Service charges and fees
94
84
12
%
122
(23
)%
Gain (loss) on sale of investment securities
(2
)
32
N/M
—
N/M
Gain (loss) on sale of mortgage loans held for sale
(25
)
(57
)
56
%
197
N/M
Unrealized gain (loss) on equity securities
71
10
N/M
(236
)
N/M
Net servicing income
59
98
(40
)%
443
(87
)%
Income earned on company-owned life insurance
80
81
(1
)%
328
(76
)%
Other
1
—
N/M
557
(100
)%
Total non-interest income
278
248
12
%
1,411
(80
)%
Non-interest expense Salaries and employee benefits
9,410
8,985
5
%
9,617
(2
)%
Occupancy and equipment
2,112
2,216
(5
)%
2,142
(1
)%
Professional fees
3,221
5,929
(46
)%
5,157
(38
)%
FDIC assessments
257
115
N/M
369
(30
)%
Data processing
738
766
(4
)%
805
(8
)%
Net provision for (recovery of) mortgage repurchase liability
120
31
N/M
(213
)
N/M
Provision for contingent losses
—
18,239
(100
)%
—
N/M
Other
1,979
829
N/M
1,546
28
%
Total non-interest expense
17,837
37,110
(52
)%
19,423
(8
)%
Income (loss) before income taxes
(557
)
(18,162
)
97
%
7,549
N/M
Income tax expense (benefit)
(54
)
271
N/M
2,289
N/M
Net income (loss)
$
(503
)
$
(18,433
)
97
%
$
5,260
N/M
Income (loss) per share, basic and diluted
$
(0.01
)
$
(0.37
)
$
0.10
Weighted average common shares outstanding: Basic
50,444,463
50,403,310
50,191,288
Diluted
50,444,463
50,403,310
50,406,123
N/M - Not Meaningful
Sterling Bancorp, Inc. Yield
Analysis and Net Interest Income (Unaudited) Three
Months Ended March 31, 2023 December 31, 2022
March 31, 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
$
1,366,872
$
18,514
5.42
%
$
1,428,840
$
18,331
5.13
%
$
1,660,692
$
18,278
4.40
%
Commercial real estate
223,929
2,596
4.64
%
219,414
2,480
4.52
%
247,044
3,436
5.56
%
Construction
41,436
1,034
9.98
%
45,486
957
8.42
%
95,123
2,149
9.04
%
Commercial lines of credit
1,382
16
4.63
%
1,389
18
5.18
%
350
5
5.71
%
Total loans
1,633,619
22,160
5.43
%
1,695,129
21,786
5.14
%
2,003,209
23,868
4.77
%
Securities, includes restricted stock(2)
366,346
2,456
2.68
%
370,460
2,293
2.48
%
350,150
835
0.95
%
Other interest-earning assets
411,766
4,807
4.67
%
335,237
3,200
3.82
%
452,651
215
0.19
%
Total interest-earning assets
2,411,731
29,423
4.88
%
2,400,826
27,279
4.54
%
2,806,010
24,918
3.55
%
Noninterest-earning assets Cash and due from banks
4,475
4,221
4,016
Other assets
28,398
28,432
43,322
Total assets
$
2,444,604
$
2,433,479
$
2,853,348
Interest-bearing liabilities Money market, savings and NOW
$
1,001,505
$
4,614
1.87
%
$
1,078,873
$
3,490
1.28
%
$
1,310,848
$
707
0.22
%
Time deposits
900,890
5,195
2.34
%
799,524
3,432
1.70
%
861,785
1,623
0.76
%
Total interest-bearing deposits
1,902,395
9,809
2.09
%
1,878,397
6,922
1.46
%
2,172,633
2,330
0.43
%
FHLB borrowings
50,000
245
1.96
%
50,000
250
1.96
%
150,000
352
0.94
%
Subordinated notes, net
65,264
1,693
10.38
%
65,283
1,586
9.51
%
65,337
964
5.90
%
Total borrowings
115,264
1,938
6.73
%
115,283
1,836
6.23
%
215,337
1,316
2.44
%
Total interest-bearing liabilities
2,017,659
11,747
2.36
%
1,993,680
8,758
1.74
%
2,387,970
3,646
0.62
%
Noninterest-bearing liabilities Demand deposits
50,284
60,615
64,119
Other liabilities
63,308
49,036
55,479
Shareholders' equity
313,353
330,148
345,780
Total liabilities and shareholders' equity
$
2,444,604
$
2,433,479
$
2,853,348
Net interest income and spread(2)
$
17,676
2.52
%
$
18,521
2.80
%
$
21,272
2.93
%
Net interest margin(2)
2.93
%
3.09
%
3.03
%
(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)
March 31, December 31, % March
31, % (dollars in thousands)
2023
2022
change
2022
change Residential real estate
$
1,289,554
$
1,391,276
(7
)%
$
1,580,759
(18
)%
Commercial real estate
224,792
221,669
1
%
219,767
2
%
Construction
36,255
44,503
(19
)%
73,778
(51
)%
Commercial lines of credit
1,368
1,396
(2
)%
334
N/M
Other consumer
77
5
N/M
3
N/M
Total loans held for investment
1,552,046
1,658,849
(6
)%
1,874,641
(17
)%
Less: allowance for credit losses
(38,565
)
(45,464
)
(15
)%
(52,455
)
(26
)%
Loans, net
$
1,513,481
$
1,613,385
(6
)%
$
1,822,186
(17
)%
Loans held for sale
$
37,979
$
7,725
N/M
$
12,230
N/M
Total gross loans
$
1,590,025
$
1,666,574
(5
)%
$
1,886,871
(16
)%
N/M - Not Meaningful
Sterling Bancorp, Inc. Allowance for Credit Losses
(Unaudited) Three Months Ended March 31,
December 31, March 31, (dollars in thousands)
2023
2022
2022
Balance at beginning of period
$
45,464
$
45,362
$
56,548
Adjustment to Adopt ASU No. 2016-13
(1,651
)
—
—
Adjustment to Adopt ASU No. 2022-02
380
—
—
Balance after adoption
$
44,193
$
45,362
$
56,548
Provision for (recovery of) credit losses
784
(179
)
(4,289
)
Charge offs
(6,478
)
—
—
Recoveries
66
281
196
Balance at end of period
$
38,565
$
45,464
$
52,455
Sterling Bancorp, Inc. Deposit Composition
(Unaudited) March 31, December 31,
% March 31, % (dollars in thousands)
2023
2022
change
2022
change Noninterest-bearing deposits
$
46,496
$
53,041
(12
)%
$
64,944
(28
)%
Money Market, Savings and NOW
958,165
1,039,263
(8
)%
1,319,444
(27
)%
Time deposits
917,161
861,733
6
%
815,784
12
%
Total deposits
$
1,921,822
$
1,954,037
(2
)%
$
2,200,172
(13
)%
Sterling Bancorp, Inc. Credit Quality Data
(Unaudited) At and for the Three Months Ended
March 31, December 31, March 31, (dollars
in thousands)
2023
2022
2022
Nonaccrual loans(1): Residential real estate
$
-
$
33,690
$
38,300
Commercial
—
—
5,891
Total nonaccrual loans(2)
—
33,690
44,191
Loans past due 90 days or more and still accruing interest
34
35
38
Nonperforming loans
34
33,725
44,229
Other troubled debt restructurings(3)
—
2,637
2,662
Nonaccrual loans held for sale
26,270
1,942
7,249
Nonperforming assets
$
26,304
$
38,304
$
54,140
Total loans (1)
$
1,552,046
$
1,658,849
$
1,874,641
Total assets
$
2,411,548
$
2,444,735
$
2,809,129
Nonaccrual loans to total loans outstanding (2)
—
2.03
%
2.36
%
Nonperforming assets to total assets
1.09
%
1.57
%
1.93
%
Allowance for credit losses to total loans
2.48
%
2.74
%
2.80
%
Allowance for credit losses to nonaccrual loans
—
135
%
119
%
Net charge offs (recoveries) to average loans outstanding during
the period
0.39
%
(0.02
)%
(0.01
)%
(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 1.65%, 2.14% and
2.73% at March 31, 2023, December 31, 2022 and March 31, 2022,
respectively. (3) Other troubled debt restructurings at December
31, 2022 and March 31, 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 March 31, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230501005147/en/
Investor Contact: Sterling Bancorp, Inc. Karen Knott
Executive Vice President and Chief Financial Officer (248) 359-6624
kzaborney@sterlingbank.com
Sterling Bancorp (NASDAQ:SBT)
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