Sterling Bancorp(US:SBT)2024-05-09 13:56Financial Performance - For the three months ended March 31, 2024, the net loss was $(0.2) million, an improvement from $(0.5) million for the same period in 2023[126]. - Net interest income decreased from $17.7 million in Q1 2023 to $14.9 million in Q1 2024, primarily due to increased deposit costs outpacing yield increases[126]. - The company recorded an income tax benefit of $(103) thousand for the three months ended March 31, 2024, with an effective tax rate of 34.3%[197]. - Non-interest income decreased by $79 thousand, or 28%, to $199 thousand for the three months ended March 31, 2024, primarily due to a decline in the fair value of equity securities[195]. - Average interest-earning assets totaled $2.37 billion for the three months ended March 31, 2024, generating interest income of $33.3 million[182]. - Interest income increased by $3.9 million, or 13%, to $33.3 million for the three months ended March 31, 2024, driven by higher yields on interest-earning assets[188]. - Interest expense rose by $6.6 million, or 56%, to $18.3 million for the three months ended March 31, 2024, primarily due to increased rates on interest-bearing deposits[189]. - The net interest margin decreased to 2.52% for the three months ended March 31, 2024, down from 2.93% in the prior year[182]. Credit Quality - The provision for credit losses decreased to $0.1 million in Q1 2024 from $0.7 million in Q1 2023[128]. - The company’s credit quality remains strong, with a focus on maintaining robust liquidity and capital levels[126]. - Nonperforming assets were $9.3 million, or 0.39% of total assets, at March 31, 2024, compared to $9.0 million, or 0.37% of total assets, at December 31, 2023[128]. - Total nonperforming assets to total assets ratio increased to 0.39% as of March 31, 2024, from 0.37% at December 31, 2023[147]. - The allowance for credit losses at March 31, 2024, was $29.3 million, or 2.24% of total loans held for investment, compared to $29.4 million, or 2.18% at December 31, 2023[158]. - No charge-offs were recorded during the three months ended March 31, 2024, compared to $6.5 million for the same period in 2023[159]. - The allowance for credit losses to nonaccrual loans was 314% at March 31, 2024, compared to 329% at December 31, 2023[161]. - Total Special Mention and Substandard loans were $48.7 million, or 4% of total gross loans, at March 31, 2024, down from $57.9 million, or 4% of total gross loans, at December 31, 2023[152]. Loan Portfolio - As of March 31, 2024, total loans amounted to $1,303.3 million, a decrease of $45.7 million, or 3.4%, from $1,348.9 million at December 31, 2023[134]. - Residential real estate loans accounted for 80% of total gross loans, totaling $1,040.5 million, down from $1,085.8 million, a decrease of $45.3 million, or 4%[134]. - Commercial real estate loans totaled $244.5 million, with 42% secured by multifamily properties, reflecting a slight decrease of $0.4 million from the previous quarter[135][136]. - The company originated commercial loans with an aggregate principal balance of $30.0 million during the three months ended March 31, 2024[135]. - The company’s construction loans decreased to $4.9 million from $10.4 million due to maturing loans being paid in full[135]. - Total loans past due decreased by $5.5 million, or 20%, from $27.9 million at December 31, 2023, to $22.4 million at March 31, 2024[149]. - Loans 30-59 days past due decreased by $6.3 million, or 38%, from $16.6 million at December 31, 2023[149]. - The company’s adjustable-rate loans accounted for 92% of the total loan portfolio, with 10% of these loans at their interest rate floor[141]. Deposits and Capital - Total deposits were $2.0 billion as of March 31, 2024, an increase of $1.9 million from December 31, 2023, with time deposits increasing by $27.8 million, or 3%[174]. - Noninterest-bearing deposits decreased by $2.6 million, or 7%, from December 31, 2023[174]. - Total shareholders' equity was $327.3 million at March 31, 2024, compared to $327.7 million at December 31, 2023[179]. - The company met all regulatory capital requirements as of March 31, 2024, with leveraged capital ratios of 14.10% and 13.58% for the company and the bank, respectively[208]. - Time deposits due within one year were $796.0 million, or 40% of total deposits, as of March 31, 2024, up from $761.7 million, or 38%, at December 31, 2023[204]. Market Conditions and Strategic Outlook - The company aims to protect book value and liquidity during financial uncertainty, reflecting a cautious approach to market conditions[126]. - The company continues to incur significant professional fees related to ongoing investigations, despite the resolution of prior governmental inquiries[127]. - The company continues to consider the impact of inflation and recession risks in estimating expected credit losses[155]. - The analysis highlights that actual results may differ significantly from projections due to various factors, including market conditions and timing of rate changes[222]. - The computations do not account for management actions that may be taken in response to anticipated interest rate changes[222]. - The EVE presented does not represent the fair market value of the company or amounts available for distribution to shareholders in the event of liquidation[222].