Sterling Bancorp(US:SBT)2023-03-16 16:06Financial Performance - The company reported a net interest income of $80,074,000 for the year ending December 31, 2022, with a projected increase of 4% to $83,587,000 if interest rates rise by 200 basis points [431]. - Net interest income after provision for loan losses was $88,736,000 in 2022, compared to $99,445,000 in 2021, representing a decrease of about 11% [454]. - The company reported a net loss of $14,194,000 for the year ended December 31, 2022, compared to a net income of $23,390,000 in 2021 [454]. - Comprehensive loss for 2022 was $(32,822,000), compared to comprehensive income of $22,106,000 in 2021 [457]. - Non-interest expense increased to $97,648,000 in 2022 from $72,218,000 in 2021, marking an increase of approximately 35% [454]. - The company’s retained earnings decreased to $234,049,000 in 2022 from $248,243,000 in 2021, reflecting a decline of approximately 5.7% [452]. Asset and Loan Management - Total assets decreased to $2,444,735,000 in 2022 from $2,876,830,000 in 2021, reflecting a decline of approximately 15% [452]. - The allowance for loan losses was $45,464,000 as of December 31, 2022, down from $56,548,000 in 2021, indicating a reduction in the general valuation allowance for loans [444]. - The total ending loans balance as of December 31, 2022, was $1,658,849, compared to $2,012,814 in 2021, indicating a decrease of about 17.5% [554]. - The company recorded recoveries of $3,111 in 2022, compared to $2,312 in 2021, showing an increase of approximately 34.5% [553]. - The total past due loans as of December 31, 2022, amounted to $57,042 million, with a total loan portfolio of $1,658,849 million [561]. Risk Management - The company is exposed to risks from the termination of its Advantage Loan Program and potential claims related to governmental investigations [16]. - The company faces operational risks from increased reliance on technology and cybersecurity threats, which could impact financial transactions [22]. - The company has a concentration in residential real estate loans, which poses credit risks related to delinquencies and nonperforming assets [20]. - The company has established a liability for potential losses related to mortgage repurchase demands, which reflects subjective estimates and complex judgments [514]. Regulatory Compliance - The company is subject to extensive regulations affecting the financial services industry, including compliance with the Dodd-Frank Act and the Community Reinvestment Act [20]. - The Bank's regulatory capital ratios exceeded the requirements to be considered well capitalized for all regulatory purposes as of December 31, 2022 [613]. - The Company and the Bank had met all regulatory capital requirements as of December 31, 2022, and held capital in excess of the capital conservation buffer (CCB) [613]. Capital and Liquidity - The company’s liquidity management is overseen by the Asset Liability Committee, which regularly reviews liquidity, capital, and deposit mix [427]. - The total deposits decreased to $1,954,037,000 in 2022 from $2,261,735,000 in 2021, a decline of about 13.6% [452]. - The Company has additional borrowing capacity with the FHLB of $332,309 at December 31, 2022, based on collateralized investment securities and loans [587]. Employee and Compensation - The company’s ability to attract and retain key employees is critical for maintaining operational effectiveness [22]. - Stock-based compensation for 2022 amounted to $900,000, compared to $626,000 in 2021 [463]. - The Company recorded stock-based compensation expense of $906, $453, and $134 for the years ended December 31, 2022, 2021, and 2020, respectively [610]. Loan Portfolio Characteristics - As of December 31, 2022, residential real estate loans accounted for 84% of total gross loans, with 81% of gross loans originated in California [476]. - The residential real estate portfolio segment includes first and second mortgages, with credit quality closely tied to economic trends and borrower repayment capacity [504]. - The commercial real estate portfolio segment is affected by economic developments and vacancy rates, impacting credit quality and cash flow [504]. Changes in Loan Programs - The Company terminated its COVID-19 forbearance program effective July 31, 2021, with no loans outstanding under this program as of December 31, 2022 [567]. - As of December 31, 2022, the Advantage Loan Program loans totaled $880,373, representing 63% of gross residential loans, down from $1,185,458 or 69% in 2021 [478].