Sterling Bancorp Reports Second Quarter 2022 Financial Results
Second Quarter 2022 Highlights
-
Net loss of
$(2.2) million , or$(0.04) per diluted share - Net interest margin of 2.95%
-
Non-interest expense of
$19.5 million -
Provision (recovery) for loan losses of
$(1.1) million ; ratio of allowance for loan losses to total loans held for investment of 2.91% -
Shareholders’ equity of
$335.3 million - Bank capital ratios continue to be in excess of minimum ratios required to be considered “well-capitalized” with a leverage ratio of 14.44%, a total risk-based capital ratio of 24.93% and a common equity tier one ratio of 23.65%
- The Company’s consolidated leverage ratio of 12.91%, total risk-based capital ratio of 24.70% and common equity tier one ratio of 21.06% continue to exceed minimum regulatory capital requirements
-
Total deposits of
$2.0 billion -
Total gross loans of
$1.8 billion -
Advantage Loan Program loans with unpaid principal balances of
$30.4 million repurchased during the quarter - Surrender of a large split-dollar life program and certain older BOLI policies for former executives and a controlling shareholder and reversal of associated liabilities
- New outsourced platform implemented for residential loan originations, minimizing the fixed costs of the residential lending business
The Company reported a net loss of
During the second quarter, we outsourced our residential lending to Promontory MortgagePath (“MortgagePath”), which provides community banks with an outsourced residential lending service for mortgage loan production. The transition was fully implemented and launched at the end of
“The MortgagePath program allows us to continue an active participation in the residential loan market without the fixed costs of a full-time staff. Our residential lending product is now introduced to our customers through an online Sterling channel and integrated into MortgagePath’s fully compliant system,” said Thomas M. O’Brien, Chairman, President and Chief Executive Officer.
Balance Sheet
Total Assets – Total assets of
Cash and due from banks decreased
Total gross loans held for investment of
Cash surrender value of a large split-dollar life program and bank-owned life insurance (BOLI) policies decreased
Total Deposits – Total deposits of
Borrowings – Federal Home Loan Bank Borrowings decreased
Capital – Total shareholders’ equity was
The Bank exceeded all regulatory capital requirements required to be considered “well-capitalized” as of
| To Be Well Capitalized |
Bank Actual at |
||
| Total adjusted capital to risk-weighted assets |
10.00% |
24.93% |
|
| Tier 1 (core) capital to risk-weighted assets |
8.00% |
23.65% |
|
| Common Equity Tier 1 (CET1) |
6.50% |
23.65% |
|
| Tier 1 (core) capital to adjusted tangible assets (leverage ratio) |
5.00% |
14.44% |
| Minimum Requirements |
Company Actual at |
||
| Total adjusted capital to risk-weighted assets |
8.00% |
24.70% |
|
| Tier 1 (core) capital to risk-weighted assets |
6.00% |
21.06% |
|
| Common Equity Tier 1 (CET1) |
4.50% |
21.06% |
|
| Tier 1 (core) capital to adjusted tangible assets (leverage ratio) |
4.00% |
12.91% |
Asset Quality and Provision (Recovery) for Loan Losses – A recovery for loan losses of
Net recoveries during the second quarter of 2022 were
Nonperforming assets at
“The concerns expressed in the past over commercial asset quality have largely been controlled at this point. Through diligent management of troubled credits and the recent successful sale of the SRO loans, commercial credit concerns have been greatly diminished. We will continue to review the remaining weaker commercial credits for potential sale or other exit opportunities. On the residential side, the delinquent loans are mostly from our former Advantage Loan Program. Of those, approximately
Results of Operations
Net Interest Income and Net Interest Margin – Net interest income for the second quarter of 2022 was
The net interest margin of 2.95% for the second quarter of 2022 decreased compared to 3.03% for the first quarter of 2022 and increased compared to 2.70% for the second quarter of 2021. The decline in our net interest margin in the second quarter of 2022 reflects a decrease in the average yield on interest earning assets of 8 basis points while the average cost of interest-bearing liabilities stayed consistent. The decrease in the average yield on interest earning assets related to approximately
Non-Interest Income – Non-interest income for the second quarter of 2022 was
Non-Interest Expense – Non-interest expense of
Income Tax Expense – Income tax expense increased to
Mr. O’Brien commented, “There is some noise around the insurance surrenders, however, the net impact is fairly insignificant. In these cases, the board determined that the reasons the policies were originally undertaken as many as 20 years ago were no longer appropriate for Sterling. Also, in the quarter we experienced some increase in legal costs as the settlement process with the various government agencies gained momentum. Furthermore, we did experience some costs related to advancement for legal expenses for certain indemnified parties.
We have achieved some major milestones with respect to the various investigations. I believe that the Bank has now implemented all of the requirements to comply with the formal agreement with the OCC. This was a major undertaking by the board and management and is critical to our ability to close out the government investigations. I am hopeful we can resolve the government investigations this calendar year, however the timing is in the hands of the government agencies.
The damage done by the Advantage Loan Program is significant and its consequences are painful for all stakeholders. Notwithstanding all of the above and in my opinion, the success we have had in addressing the myriad of major issues at Sterling over the past 24 months is nothing short of remarkable. It is a testament to the total commitment of our board of directors and the management team to address these legacy problems forthrightly and proactively.”
Conference Call and Webcast
Management will host a conference call on
A replay of the conference call may be accessed through
About
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
| Consolidated Financial Highlights (Unaudited) | ||||||||||||
| At and for the Three Months Ended | ||||||||||||
| (dollars in thousands, except per share data) | 2022 |
2022 |
2021 |
|||||||||
| Net income (loss) |
$ |
(2,197 |
) |
$ |
5,260 |
|
$ |
3,452 |
|
|||
| Income (loss) per share, diluted |
$ |
(0.04 |
) |
$ |
0.10 |
|
$ |
0.07 |
|
|||
| Net interest income |
$ |
19,470 |
|
$ |
21,272 |
|
$ |
23,598 |
|
|||
| Net interest margin |
|
2.95 |
% |
|
3.03 |
% |
|
2.70 |
% |
|||
| Non-interest income |
$ |
45 |
|
$ |
1,411 |
|
$ |
(269 |
) |
|||
| Non-interest expense |
$ |
19,494 |
|
$ |
19,423 |
|
$ |
19,944 |
|
|||
| Loans, net of allowance for loan losses |
$ |
1,726,366 |
|
$ |
1,822,186 |
|
$ |
2,287,857 |
|
|||
| Total deposits(1) |
$ |
2,004,247 |
|
$ |
2,200,172 |
|
$ |
2,628,872 |
|
|||
| Asset Quality | ||||||||||||
| Nonperforming loans |
$ |
48,385 |
|
$ |
44,229 |
|
$ |
74,810 |
|
|||
| Allowance for loan losses to total loans |
|
2.91 |
% |
|
2.80 |
% |
|
3.00 |
% |
|||
| Allowance for loan losses to nonaccrual loans |
|
107 |
% |
|
119 |
% |
|
95 |
% |
|||
| Nonaccrual loans to total loans outstanding |
|
2.72 |
% |
|
2.36 |
% |
|
3.17 |
% |
|||
| Net recoveries during the period to average loans outstanding during the period |
|
(0.02 |
)% |
|
(0.01 |
)% |
|
(0.03 |
)% |
|||
| Provision (recovery) for loan losses |
$ |
(1,109 |
) |
$ |
(4,289 |
) |
$ |
(1,806 |
) |
|||
| Net recoveries |
$ |
(420 |
) |
$ |
(196 |
) |
$ |
(604 |
) |
|||
| Performance Ratios | ||||||||||||
| Return on average assets |
|
(0.33 |
)% |
|
0.74 |
% |
|
0.39 |
% |
|||
| Return on average shareholders' equity |
|
(2.57 |
)% |
|
6.08 |
% |
|
4.22 |
% |
|||
| Efficiency ratio (2) |
|
99.89 |
% |
|
85.63 |
% |
|
85.49 |
% |
|||
| Yield on average interest-earning assets |
|
3.47 |
% |
|
3.55 |
% |
|
3.51 |
% |
|||
| Cost of average interest-bearing liabilities |
|
0.62 |
% |
|
0.62 |
% |
|
0.92 |
% |
|||
| Net interest spread |
|
2.85 |
% |
|
2.93 |
% |
|
2.59 |
% |
|||
| Capital Ratios (3) | ||||||||||||
| Regulatory and Other Capital Ratios— Consolidated: | ||||||||||||
| Total adjusted capital to risk-weighted assets |
|
24.70 |
% |
|
23.21 |
% |
|
17.71 |
% |
|||
| Tier 1 (core) capital to risk-weighted assets |
|
21.06 |
% |
|
19.72 |
% |
|
14.16 |
% |
|||
| Common Equity Tier 1 (CET1) |
|
21.06 |
% |
|
19.72 |
% |
|
14.16 |
% |
|||
| Tier 1 (core) capital to adjusted tangible assets (leverage ratio) |
|
12.91 |
% |
|
12.23 |
% |
|
9.16 |
% |
|||
| Regulatory and Other Capital Ratios—Bank: | ||||||||||||
| Total adjusted capital to risk-weighted assets |
|
24.93 |
% |
|
23.29 |
% |
|
17.59 |
% |
|||
| Tier 1 (core) capital to risk-weighted assets |
|
23.65 |
% |
|
22.02 |
% |
|
16.32 |
% |
|||
| Common Equity Tier 1 (CET1) |
|
23.65 |
% |
|
22.02 |
% |
|
16.32 |
% |
|||
| Tier 1 (core) capital to adjusted tangible assets (leverage ratio) |
|
14.44 |
% |
|
13.65 |
% |
|
10.53 |
% |
|||
| (1) Refer to note to the condensed consolidated balance sheets. | ||||||||||||
| (2) Efficiency Ratio is computed as the ratio of non-interest expense divided by the sum of net interest income and non- interest income. | ||||||||||||
| (3) In order to provide a comparable trend analysis for the Bank's and the Company's risk based capital ratios applying the 100% risk weight to Advantage Loan Program loans, the table above presents the regulatory capital ratios applying the 100% risk weight at |
||||||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||||||||||||||||||
| (dollars in thousands) | 2022 |
2022 |
% change |
2021 |
% change |
2021 |
% change |
|||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Cash and due from banks |
$ |
285,165 |
|
$ |
486,743 |
|
(41 |
)% |
$ |
411,676 |
|
(31 |
)% |
$ |
774,478 |
(63 |
)% |
|||||||
| Interest-bearing time deposits with other banks |
|
1,183 |
|
|
1,183 |
|
0 |
% |
|
1,183 |
|
0 |
% |
|
805 |
47 |
% |
|||||||
| Investment securities |
|
382,309 |
|
|
364,361 |
|
5 |
% |
|
313,879 |
|
22 |
% |
|
195,974 |
95 |
% |
|||||||
| Loans held for sale |
|
8,964 |
|
|
12,230 |
|
(27 |
)% |
|
64,987 |
|
(86 |
)% |
|
15,107 |
(41 |
)% |
|||||||
| Loans, net of allowance for loan losses of |
|
1,726,366 |
|
|
1,822,186 |
|
(5 |
)% |
|
1,956,266 |
|
(12 |
)% |
|
2,287,857 |
(25 |
)% |
|||||||
| Accrued interest receivable |
|
6,721 |
|
|
6,655 |
|
1 |
% |
|
7,696 |
|
(13 |
)% |
|
9,660 |
(30 |
)% |
|||||||
| Mortgage servicing rights, net |
|
2,453 |
|
|
2,888 |
|
(15 |
)% |
|
2,722 |
|
(10 |
)% |
|
3,232 |
(24 |
)% |
|||||||
| Leasehold improvements and equipment, net |
|
6,848 |
|
|
7,144 |
|
(4 |
)% |
|
7,421 |
|
(8 |
)% |
|
9,423 |
(27 |
)% |
|||||||
| Operating lease right-of-use assets |
|
16,332 |
|
|
17,210 |
|
(5 |
)% |
|
18,184 |
|
(10 |
)% |
|
19,817 |
(18 |
)% |
|||||||
|
|
20,288 |
|
|
20,288 |
|
0 |
% |
|
22,950 |
|
(12 |
)% |
|
22,950 |
(12 |
)% |
||||||||
| Cash surrender value of bank-owned life insurance |
|
8,396 |
|
|
33,163 |
|
(75 |
)% |
|
33,033 |
|
(75 |
)% |
|
32,766 |
(74 |
)% |
|||||||
| Deferred tax asset, net |
|
22,028 |
|
|
20,865 |
|
6 |
% |
|
21,426 |
|
3 |
% |
|
23,749 |
(7 |
)% |
|||||||
| Other assets |
|
16,767 |
|
|
14,213 |
|
18 |
% |
|
15,407 |
|
9 |
% |
|
21,634 |
(22 |
)% |
|||||||
| Total assets |
$ |
2,503,820 |
|
$ |
2,809,129 |
|
(11 |
)% |
$ |
2,876,830 |
|
(13 |
)% |
$ |
3,417,452 |
(27 |
)% |
|||||||
| Liabilities | ||||||||||||||||||||||||
| Noninterest-bearing deposits(1) |
$ |
82,387 |
|
$ |
64,944 |
|
27 |
% |
$ |
63,760 |
|
29 |
% |
$ |
58,230 |
41 |
% |
|||||||
| Interest-bearing deposits(2) |
|
1,921,860 |
|
|
2,135,228 |
|
(10 |
)% |
|
2,197,975 |
|
(13 |
)% |
|
2,497,259 |
(23 |
)% |
|||||||
| Deposits held for sale(3) |
|
— |
|
|
— |
|
— |
|
|
— |
|
— |
|
|
73,383 |
(100 |
)% |
|||||||
| Total deposits |
|
2,004,247 |
|
|
2,200,172 |
|
(9 |
)% |
|
2,261,735 |
|
(11 |
)% |
|
2,628,872 |
(24 |
)% |
|||||||
|
|
50,000 |
|
|
150,000 |
|
(67 |
)% |
|
150,000 |
|
(67 |
)% |
|
318,000 |
(84 |
)% |
||||||||
| Subordinated notes, net |
|
65,308 |
|
|
65,326 |
|
(0 |
)% |
|
65,343 |
|
(0 |
)% |
|
65,377 |
(0 |
)% |
|||||||
| Operating lease liabilities |
|
17,540 |
|
|
18,421 |
|
(5 |
)% |
|
19,400 |
|
(10 |
)% |
|
21,085 |
(17 |
)% |
|||||||
| Accrued expenses and other liabilities(1)(2) |
|
31,393 |
|
|
33,804 |
|
(7 |
)% |
|
36,725 |
|
(15 |
)% |
|
57,076 |
(45 |
)% |
|||||||
| Total liabilities |
|
2,168,488 |
|
|
2,467,723 |
|
(12 |
)% |
|
2,533,203 |
|
(14 |
)% |
|
3,090,410 |
(30 |
)% |
|||||||
| Shareholders’ Equity | ||||||||||||||||||||||||
| Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding |
|
— |
|
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
— |
|
|||||||
| Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 50,818,212 shares at |
|
83,295 |
|
|
82,157 |
|
1 |
% |
|
82,157 |
|
1 |
% |
|
82,157 |
1 |
% |
|||||||
| Additional paid-in capital |
|
14,313 |
|
|
14,186 |
|
1 |
% |
|
14,124 |
|
1 |
% |
|
13,796 |
4 |
% |
|||||||
| Retained earnings |
|
251,306 |
|
|
253,503 |
|
(1 |
)% |
|
248,243 |
|
1 |
% |
|
230,630 |
9 |
% |
|||||||
| Accumulated other comprehensive income (loss) |
|
(13,582 |
) |
|
(8,440 |
) |
(61 |
)% |
|
(897 |
) |
N/M |
|
|
459 |
N/M |
|
|||||||
| Total shareholders’ equity |
|
335,332 |
|
|
341,406 |
|
(2 |
)% |
|
343,627 |
|
(2 |
)% |
|
327,042 |
3 |
% |
|||||||
| Total liabilities and shareholders’ equity |
$ |
2,503,820 |
|
$ |
2,809,129 |
|
(11 |
)% |
$ |
2,876,830 |
|
(13 |
)% |
$ |
3,417,452 |
(27 |
)% |
|||||||
| N/M - Not Meaningful | ||||||||||||||||||||||||
| (1) (2) Certain prior period amounts have been reclassified to conform with the current period presentation. The Company has (1) reclassified custodial escrow balances maintained with serviced loans of |
||||||||||||||||||||||||
| (3) Deposits held for sale were transferred on the sale of the |
||||||||||||||||||||||||
| Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | 2022 |
2022 |
% change |
2021 |
% change |
2022 |
2021 |
% change |
|||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||
| Interest and fees on loans |
$ |
20,746 |
|
$ |
23,868 |
|
(13 |
)% |
$ |
30,074 |
|
(31 |
)% |
$ |
44,614 |
|
$ |
61,368 |
|
(27 |
)% |
||||||||
| Interest and dividends on investment securities and restricted stock |
|
1,353 |
|
|
835 |
|
62 |
% |
|
385 |
|
N/M |
|
|
2,188 |
|
|
775 |
|
N/M |
|
||||||||
| Other interest |
|
791 |
|
|
215 |
|
N/M |
|
|
227 |
|
N/M |
|
|
1,006 |
|
|
490 |
|
N/M |
|
||||||||
| Total interest income |
|
22,890 |
|
|
24,918 |
|
(8 |
)% |
|
30,686 |
|
(25 |
)% |
|
47,808 |
|
|
62,633 |
|
(24 |
)% |
||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Interest on deposits |
|
2,016 |
|
|
2,330 |
|
(13 |
)% |
|
5,236 |
|
(61 |
)% |
|
4,346 |
|
|
11,938 |
|
(64 |
)% |
||||||||
| Interest on |
|
314 |
|
|
352 |
|
(11 |
)% |
|
847 |
|
(63 |
)% |
|
666 |
|
|
1,685 |
|
(60 |
)% |
||||||||
| Interest on subordinated notes |
|
1,090 |
|
|
964 |
|
13 |
% |
|
1,005 |
|
8 |
% |
|
2,054 |
|
|
2,185 |
|
(6 |
)% |
||||||||
| Total interest expense |
|
3,420 |
|
|
3,646 |
|
(6 |
)% |
|
7,088 |
|
(52 |
)% |
|
7,066 |
|
|
15,808 |
|
(55 |
)% |
||||||||
| Net interest income |
|
19,470 |
|
|
21,272 |
|
(8 |
)% |
|
23,598 |
|
(17 |
)% |
|
40,742 |
|
|
46,825 |
|
(13 |
)% |
||||||||
| Provision (recovery) for loan losses |
|
(1,109 |
) |
|
(4,289 |
) |
74 |
% |
|
(1,806 |
) |
39 |
% |
|
(5,398 |
) |
|
(2,543 |
) |
N/M |
|
||||||||
| Net interest income after provision (recovery) for loan losses |
|
20,579 |
|
|
25,561 |
|
(19 |
)% |
|
25,404 |
|
(19 |
)% |
|
46,140 |
|
|
49,368 |
|
(7 |
)% |
||||||||
| Non-interest income | |||||||||||||||||||||||||||||
| Service charges and fees |
|
105 |
|
|
122 |
|
(14 |
)% |
|
144 |
|
(27 |
)% |
|
227 |
|
|
303 |
|
(25 |
)% |
||||||||
| Gain on sale of mortgage loans held for sale |
|
3 |
|
|
197 |
|
(98 |
)% |
|
70 |
|
(96 |
)% |
|
200 |
|
|
468 |
|
(57 |
)% |
||||||||
| Unrealized gain (losses) on equity securities |
|
(170 |
) |
|
(236 |
) |
28 |
% |
|
15 |
|
N/M |
|
|
(406 |
) |
|
(75 |
) |
N/M |
|
||||||||
| Net servicing income (loss) |
|
(177 |
) |
|
443 |
|
N/M |
|
|
(908 |
) |
81 |
% |
|
266 |
|
|
(1,338 |
) |
N/M |
|
||||||||
| Income on cash surrender value of bank-owned life insurance |
|
255 |
|
|
328 |
|
(22 |
)% |
|
322 |
|
(21 |
)% |
|
583 |
|
|
635 |
|
(8 |
)% |
||||||||
| Other |
|
29 |
|
|
557 |
|
(95 |
)% |
|
88 |
|
(67 |
)% |
|
586 |
|
|
191 |
|
N/M |
|
||||||||
| Total non-interest income |
|
45 |
|
|
1,411 |
|
(97 |
)% |
|
(269 |
) |
N/M |
|
|
1,456 |
|
|
184 |
|
N/M |
|
||||||||
| Non-interest expense | |||||||||||||||||||||||||||||
| Salaries and employee benefits |
|
5,569 |
|
|
9,617 |
|
(42 |
)% |
|
8,678 |
|
(36 |
)% |
|
15,186 |
|
|
16,526 |
|
(8 |
)% |
||||||||
| Occupancy and equipment |
|
2,187 |
|
|
2,142 |
|
2 |
% |
|
2,249 |
|
(3 |
)% |
|
4,329 |
|
|
4,445 |
|
(3 |
)% |
||||||||
| Professional fees |
|
7,066 |
|
|
5,157 |
|
37 |
% |
|
5,721 |
|
24 |
% |
|
12,223 |
|
|
14,476 |
|
(16 |
)% |
||||||||
|
|
346 |
|
|
369 |
|
(6 |
)% |
|
500 |
|
(31 |
)% |
|
715 |
|
|
1,219 |
|
(41 |
)% |
|||||||||
| Data processing |
|
762 |
|
|
805 |
|
(5 |
)% |
|
440 |
|
73 |
% |
|
1,567 |
|
|
786 |
|
99 |
% |
||||||||
| Net recovery of mortgage repurchase liability |
|
(312 |
) |
|
(213 |
) |
(46 |
)% |
|
(512 |
) |
39 |
% |
|
(525 |
) |
|
(665 |
) |
21 |
% |
||||||||
| Other |
|
3,876 |
|
|
1,546 |
|
N/M |
|
|
2,868 |
|
35 |
% |
|
5,422 |
|
|
4,491 |
|
21 |
% |
||||||||
| Total non-interest expense |
|
19,494 |
|
|
19,423 |
|
0 |
% |
|
19,944 |
|
(2 |
)% |
|
38,917 |
|
|
41,278 |
|
(6 |
)% |
||||||||
| Income before income taxes |
|
1,130 |
|
|
7,549 |
|
(85 |
)% |
|
5,191 |
|
(78 |
)% |
|
8,679 |
|
|
8,274 |
|
5 |
% |
||||||||
| Income tax expense |
|
3,327 |
|
|
2,289 |
|
45 |
% |
|
1,739 |
|
91 |
% |
|
5,616 |
|
|
2,497 |
|
N/M |
|
||||||||
| Net income (loss) |
$ |
(2,197 |
) |
$ |
5,260 |
|
N/M |
|
$ |
3,452 |
|
N/M |
|
$ |
3,063 |
|
$ |
5,777 |
|
(47 |
)% |
||||||||
| Income (loss) per share, basic and diluted |
$ |
(0.04 |
) |
$ |
0.10 |
|
$ |
0.07 |
|
$ |
0.06 |
|
$ |
0.12 |
|
||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||||||||
| Basic |
|
50,386,856 |
|
|
50,191,288 |
|
|
50,009,053 |
|
|
50,289,612 |
|
|
49,930,563 |
|
||||||||||||||
| Diluted |
|
50,386,856 |
|
|
50,406,123 |
|
|
50,060,775 |
|
|
50,496,487 |
|
|
49,987,253 |
|
||||||||||||||
| N/M - Not Meaningful | |||||||||||||||||||||||||||||
| Yield Analysis and Net Interest Income (Unaudited) | ||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||
2022 |
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 |
$ |
1,554,077 |
$ |
17,310 |
4.46 |
% |
$ |
1,660,692 |
$ |
18,278 |
4.40 |
% |
$ |
1,960,561 |
$ |
23,794 |
4.85 |
% |
||||||
| Commercial real estate |
|
221,435 |
|
2,547 |
4.60 |
% |
|
247,044 |
|
3,436 |
5.56 |
% |
|
258,310 |
|
3,444 |
5.33 |
% |
||||||
| Construction |
|
62,354 |
|
883 |
5.66 |
% |
|
95,123 |
|
2,149 |
9.04 |
% |
|
171,921 |
|
2,788 |
6.49 |
% |
||||||
| Commercial lines of credit |
|
355 |
|
6 |
6.76 |
% |
|
350 |
|
5 |
5.71 |
% |
|
2,292 |
|
48 |
8.38 |
% |
||||||
| Total loans |
|
1,838,221 |
|
20,746 |
4.51 |
% |
|
2,003,209 |
|
23,868 |
4.77 |
% |
|
2,393,084 |
|
30,074 |
5.03 |
% |
||||||
| Securities, includes restricted stock(2) |
|
396,315 |
|
1,353 |
1.37 |
% |
|
350,150 |
|
835 |
0.95 |
% |
|
270,809 |
|
385 |
0.57 |
% |
||||||
| Other interest-earning assets |
|
406,740 |
|
791 |
0.78 |
% |
|
452,651 |
|
215 |
0.19 |
% |
|
837,866 |
|
227 |
0.11 |
% |
||||||
| Total interest-earning assets |
|
2,641,276 |
|
22,890 |
3.47 |
% |
|
2,806,010 |
|
24,918 |
3.55 |
% |
|
3,501,759 |
|
30,686 |
3.51 |
% |
||||||
| Noninterest-earning assets | ||||||||||||||||||||||||
| Cash and due from banks |
|
3,811 |
|
4,016 |
|
7,373 |
||||||||||||||||||
| Other assets |
|
46,390 |
|
43,322 |
|
42,921 |
||||||||||||||||||
| Total assets |
$ |
2,691,477 |
$ |
2,853,348 |
$ |
3,552,053 |
||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||
| Money market, savings and NOW |
$ |
1,288,796 |
$ |
756 |
0.24 |
% |
$ |
1,310,848 |
$ |
707 |
0.22 |
% |
$ |
1,344,949 |
$ |
807 |
0.24 |
% |
||||||
| Time deposits(3) |
|
760,017 |
|
1,260 |
0.66 |
% |
|
861,785 |
|
1,623 |
0.76 |
% |
|
1,364,906 |
|
4,429 |
1.30 |
% |
||||||
| Total interest-bearing deposits |
|
2,048,813 |
|
2,016 |
0.39 |
% |
|
2,172,633 |
|
2,330 |
0.43 |
% |
|
2,709,855 |
|
5,236 |
0.78 |
% |
||||||
| FHLB borrowings |
|
110,440 |
|
314 |
1.12 |
% |
|
150,000 |
|
352 |
0.94 |
% |
|
318,000 |
|
847 |
1.05 |
% |
||||||
| Subordinated notes, net |
|
65,319 |
|
1,090 |
6.60 |
% |
|
65,337 |
|
964 |
5.90 |
% |
|
65,385 |
|
1,005 |
6.15 |
% |
||||||
| Total borrowings |
|
175,759 |
|
1,404 |
3.16 |
% |
|
215,337 |
|
1,316 |
2.44 |
% |
|
383,385 |
|
1,852 |
1.91 |
% |
||||||
| Total interest-bearing liabilities |
|
2,224,572 |
|
3,420 |
0.62 |
% |
|
2,387,970 |
|
3,646 |
0.62 |
% |
|
3,093,240 |
|
7,088 |
0.92 |
% |
||||||
| Noninterest-bearing liabilities | ||||||||||||||||||||||||
| Demand deposits(4) |
|
72,496 |
|
64,119 |
|
63,122 |
||||||||||||||||||
| Other liabilities(3)(4) |
|
52,075 |
|
55,479 |
|
68,524 |
||||||||||||||||||
| Shareholders' equity |
|
342,334 |
|
345,780 |
|
327,167 |
||||||||||||||||||
| Total liabilities and shareholders' equity |
$ |
2,691,477 |
$ |
2,853,348 |
$ |
3,552,053 |
||||||||||||||||||
| Net interest income and spread(2) |
$ |
19,470 |
2.85 |
% |
$ |
21,272 |
2.93 |
% |
$ |
23,598 |
2.59 |
% |
||||||||||||
| Net interest margin(2) |
2.95 |
% |
3.03 |
% |
2.70 |
% |
||||||||||||||||||
| (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. | ||||||||||||||||||||||||
| (3) (4) Certain prior period amounts have been reclassified to conform with the current period presentation. The Company has (3) reclassified accrued interest on outstanding time deposits from other liabilities to interest-bearing deposits and (4) reclassified custodial escrow balances maintained with serviced loans from other liabilities to noninterest-bearing deposits in the average consolidated balance sheet at |
||||||||||||||||||||||||
| Six Months Ended | ||||||||||||||||
| (dollars in thousands) | Average Balance |
Interest | Average Yield/Rate |
Average Balance |
Interest | Average Yield/Rate |
||||||||||
| Interest-earning assets | ||||||||||||||||
| Loans(1) | ||||||||||||||||
| Residential real estate and other consumer |
$ |
1,607,090 |
$ |
35,588 |
4.43 |
% |
$ |
1,983,211 |
$ |
48,390 |
4.88 |
% |
||||
| Commercial real estate |
|
234,169 |
|
5,983 |
5.11 |
% |
|
257,465 |
|
6,627 |
5.15 |
% |
||||
| Construction |
|
78,762 |
|
3,032 |
7.70 |
% |
|
185,201 |
|
6,200 |
6.70 |
% |
||||
| Commercial lines of credit |
|
352 |
|
11 |
6.25 |
% |
|
3,980 |
|
151 |
7.54 |
% |
||||
| Total loans |
|
1,920,373 |
|
44,614 |
4.65 |
% |
|
2,429,857 |
|
61,368 |
5.05 |
% |
||||
| Securities, includes restricted stock(2) |
|
373,360 |
|
2,188 |
1.17 |
% |
|
291,772 |
|
775 |
0.53 |
% |
||||
| Other interest-earning assets |
|
429,569 |
|
1,006 |
0.47 |
% |
|
923,854 |
|
490 |
0.11 |
% |
||||
| Total interest-earning assets |
|
2,723,302 |
|
47,808 |
3.51 |
% |
|
3,645,483 |
|
62,633 |
3.44 |
% |
||||
| Noninterest-earning assets | ||||||||||||||||
| Cash and due from banks |
|
3,728 |
|
6,935 |
||||||||||||
| Other assets |
|
45,918 |
|
42,945 |
||||||||||||
| Total assets |
$ |
2,772,948 |
$ |
3,695,363 |
||||||||||||
| Interest-bearing liabilities | ||||||||||||||||
| Money market, savings and NOW |
$ |
1,299,761 |
$ |
1,463 |
0.23 |
% |
$ |
1,363,566 |
$ |
1,742 |
0.26 |
% |
||||
| Time deposits(3) |
|
810,620 |
|
2,883 |
0.72 |
% |
|
1,489,734 |
|
10,196 |
1.38 |
% |
||||
| Total interest-bearing deposits |
|
2,110,381 |
|
4,346 |
0.42 |
% |
|
2,853,300 |
|
11,938 |
0.84 |
% |
||||
| FHLB borrowings |
|
130,111 |
|
666 |
1.03 |
% |
|
318,006 |
|
1,685 |
1.05 |
% |
||||
| Subordinated notes, net |
|
65,328 |
|
2,054 |
6.25 |
% |
|
65,372 |
|
2,185 |
6.68 |
% |
||||
| Total borrowings |
|
195,439 |
|
2,720 |
2.77 |
% |
|
383,378 |
|
3,870 |
2.01 |
% |
||||
| Total interest-bearing liabilities |
|
2,305,820 |
|
7,066 |
0.62 |
% |
|
3,236,678 |
|
15,808 |
0.99 |
% |
||||
| Noninterest-bearing liabilities | ||||||||||||||||
| Demand deposits(4) |
|
68,331 |
|
64,916 |
||||||||||||
| Other liabilities(3)(4) |
|
54,752 |
|
68,826 |
||||||||||||
| Shareholders' equity |
|
344,045 |
|
324,943 |
||||||||||||
| Total liabilities and shareholders' equity |
$ |
2,772,948 |
$ |
3,695,363 |
||||||||||||
| Net interest income and spread(2) |
$ |
40,742 |
2.89 |
% |
$ |
46,825 |
2.45 |
% |
||||||||
| Net interest margin(2) |
2.99 |
% |
2.57 |
% |
||||||||||||
| (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. | ||||||||||||||||
| (3) (4) Certain prior period amounts have been reclassified to conform with the current period presentation. The Company has (3) reclassified accrued interest on outstanding time deposits from other liabilities to interest-bearing deposits and (4) reclassified custodial escrow balances maintained with serviced loans from other liabilities to noninterest-bearing deposits in the average consolidated balance sheet at |
||||||||||||||||
| Loan Composition (Unaudited) | |||||||||||||||||||||||||||
| (dollars in thousands) | 2022 |
2022 |
% change |
2021 |
% change |
2021 |
% change |
||||||||||||||||||||
| Residential real estate |
$ |
1,506,852 |
|
$ |
1,580,759 |
|
(5 |
)% |
$ |
1,704,231 |
|
|
(12 |
)% |
$ |
1,948,892 |
|
|
(23 |
)% |
|||||||
| Commercial real estate |
|
214,494 |
|
|
219,767 |
|
(2 |
)% |
|
201,240 |
|
|
7 |
% |
|
263,278 |
|
|
(19 |
)% |
|||||||
| Construction |
|
55,150 |
|
|
73,778 |
|
(25 |
)% |
|
106,759 |
|
|
(48 |
)% |
|
144,385 |
|
|
(62 |
)% |
|||||||
| Commercial lines of credit |
|
1,418 |
|
|
334 |
|
N/M |
|
|
363 |
|
|
N/M |
|
|
1,971 |
|
|
(28 |
)% |
|||||||
| Other consumer |
|
218 |
|
|
3 |
|
N/M |
|
|
221 |
|
|
(1 |
)% |
|
— |
|
|
N/M |
|
|||||||
| Total loans held for investment |
|
1,778,132 |
|
|
1,874,641 |
|
(5 |
)% |
|
2,012,814 |
|
|
(12 |
)% |
|
2,358,526 |
|
|
(25 |
)% |
|||||||
| Less: allowance for loan losses |
|
(51,766 |
) |
|
(52,455 |
) |
(1 |
)% |
|
(56,548 |
) |
|
(8 |
)% |
|
(70,669 |
) |
|
(27 |
)% |
|||||||
| Loans, net |
$ |
1,726,366 |
|
$ |
1,822,186 |
|
(5 |
)% |
$ |
1,956,266 |
|
|
(12 |
)% |
$ |
2,287,857 |
|
|
(25 |
)% |
|||||||
| Loans held for sale |
$ |
8,964 |
|
$ |
12,230 |
|
(27 |
)% |
$ |
64,987 |
|
|
(86 |
)% |
$ |
15,107 |
|
|
(41 |
)% |
|||||||
| Total gross loans |
$ |
1,787,096 |
|
$ |
1,886,871 |
|
(5 |
)% |
$ |
2,077,801 |
|
|
(14 |
)% |
$ |
2,373,633 |
|
|
(25 |
)% |
|||||||
| N/M - Not Meaningful | |||||||||||||||||||||||||||
| Allowance for Loan Losses (Unaudited) | |||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||
| (dollars in thousands) | 2022 |
2022 |
2021 |
||||||||||||||||||||||||
| Balance at beginning of period |
$ |
52,455 |
|
$ |
56,548 |
|
$ |
71,871 |
|
||||||||||||||||||
| Provision (recovery) for loan losses |
|
(1,109 |
) |
|
(4,289 |
) |
|
(1,806 |
) |
||||||||||||||||||
| Charge offs |
|
(197 |
) |
|
— |
|
|
— |
|
||||||||||||||||||
| Recoveries |
|
617 |
|
|
196 |
|
|
604 |
|
||||||||||||||||||
| Balance at end of period |
$ |
51,766 |
|
$ |
52,455 |
|
$ |
70,669 |
|
||||||||||||||||||
| Deposit Composition (Unaudited) | |||||||||||||||||||||||||||
| (dollars in thousands) | 2022 |
2022 |
% change |
2021 |
% change |
2021 |
% change |
||||||||||||||||||||
| Noninterest-bearing deposits(1) |
$ |
82,387 |
|
$ |
64,944 |
|
27 |
% |
$ |
63,760 |
|
|
29 |
% |
$ |
58,230 |
|
|
41 |
% |
|||||||
| Money Market, Savings and NOW |
|
1,252,279 |
|
|
1,319,444 |
|
(5 |
)% |
|
1,306,155 |
|
|
(4 |
)% |
|
1,309,981 |
|
|
(4 |
)% |
|||||||
| Time deposits(2) |
|
669,581 |
|
|
815,784 |
|
(18 |
)% |
|
891,820 |
|
|
(25 |
)% |
|
1,187,278 |
|
|
(44 |
)% |
|||||||
| Deposits held for sale(3) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
73,383 |
|
|
(100 |
)% |
|||||||
| Total deposits |
$ |
2,004,247 |
|
$ |
2,200,172 |
|
(9 |
)% |
$ |
2,261,735 |
|
|
(11 |
)% |
$ |
2,628,872 |
|
|
(24 |
)% |
|||||||
| (1) The Company has included custodial escrow balances maintained with serviced loans of |
|||||||||||||||||||||||||||
| (2) The Company has included accrued interest on outstanding time deposits of |
|||||||||||||||||||||||||||
| (3) Deposits held for sale were transferred on the sale of the |
|||||||||||||||||||||||||||
| Credit Quality Data (Unaudited) | ||||||||||||||||
| At and for the Three Months Ended | ||||||||||||||||
| (dollars in thousands) | 2022 |
2022 |
2021 |
2021 |
||||||||||||
| Nonaccrual loans(1): | ||||||||||||||||
| Residential real estate |
$ |
42,567 |
|
$ |
38,300 |
|
$ |
45,675 |
|
$ |
27,871 |
|
||||
| Commercial real estate |
|
— |
|
|
— |
|
|
4,441 |
|
|
19,092 |
|
||||
| Construction |
|
5,781 |
|
|
5,891 |
|
|
12,499 |
|
|
27,803 |
|
||||
| Total nonaccrual loans(2) |
|
48,348 |
|
|
44,191 |
|
|
62,615 |
|
|
74,766 |
|
||||
| Loans past due 90 days or more and still accruing interest |
|
37 |
|
|
38 |
|
|
39 |
|
|
44 |
|
||||
| Nonperforming loans |
|
48,385 |
|
|
44,229 |
|
|
62,654 |
|
|
74,810 |
|
||||
| Other troubled debt restructurings(3) |
|
2,646 |
|
|
2,662 |
|
|
2,664 |
|
|
2,940 |
|
||||
| Nonaccrual loans held for sale |
|
3,999 |
|
|
7,249 |
|
|
18,026 |
|
|
14,867 |
|
||||
| Nonperforming assets |
$ |
55,030 |
|
$ |
54,140 |
|
$ |
83,344 |
|
$ |
92,617 |
|
||||
| Total loans (1) |
$ |
1,778,132 |
|
$ |
1,874,641 |
|
$ |
2,012,814 |
|
$ |
2,358,526 |
|
||||
| Total assets |
$ |
2,503,820 |
|
$ |
2,809,129 |
|
$ |
2,876,830 |
|
$ |
3,417,452 |
|
||||
| Nonaccrual loans to total loans outstanding (2) |
|
2.72 |
% |
|
2.36 |
% |
|
3.11 |
% |
|
3.17 |
% |
||||
| Nonperforming assets to total assets |
|
2.20 |
% |
|
1.93 |
% |
|
2.90 |
% |
|
2.71 |
% |
||||
| Allowance for loan losses to total loans |
|
2.91 |
% |
|
2.80 |
% |
|
2.81 |
% |
|
3.00 |
% |
||||
| Allowance for loan losses to nonaccrual loans |
|
107 |
% |
|
119 |
% |
|
90 |
% |
|
95 |
% |
||||
| Net charge offs (recoveries) during the period to average loans outstanding during the period |
|
(0.02 |
)% |
|
(0.01 |
)% |
|
0.35 |
% |
|
(0.03 |
)% |
||||
| (1) Loans are classified as held for investment and are presented before the allowance for loan losses. | ||||||||||||||||
| (2) Total nonaccrual loans exclude nonaccrual loans held for sale but include troubled debt restructurings on nonaccrual status. If nonaccrual loans held for sale are included, the ratio of total nonaccrual loans to total gross loans would be 2.93%, 2.73%, 3.88% and 3.78% at |
||||||||||||||||
| (3) Other troubled debt restructurings exclude those loans presented above as nonaccrual or past due 90 days or more and still accruing interest. | ||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20220815005229/en/
Investor Contact:
Executive Vice President and Chief Financial Officer
(248) 359-6624
kzaborney@sterlingbank.com
Source: