Sterling Bancorp (SBT) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $1.3 million, reversing a Q1 2024 net loss, but down from $2.5 million in Q2 2023 due to lower net interest and non-interest income, partially offset by reduced expenses.

• Operating at break-even levels with minor fluctuations, while capital and liquidity remain strong and leverage ratio at 14.26%.

• Credit quality remains robust, with nonperforming loans at 0.97% of total loans and nonperforming assets at 0.51% of total assets.

• All DOJ and OCC investigations related to the former Advantage Loan Program have concluded, eliminating future related legal costs.

• Strategic focus is on protecting book value, seeking growth opportunities, and prudent repositioning.

Financial highlights

• Net interest income for Q2 2024 was $14.4 million, down 11% year-over-year; net interest margin declined to 2.44%.

• Non-interest income was $0.4 million, mainly from FHLB-related funds, and non-interest expense decreased 14% to $14.9 million due to lower professional fees and staff reductions.

• Provision for credit losses was a recovery of $2.1 million, reflecting improved credit quality and portfolio reduction.

• Total assets were $2.4 billion, down 2% from Q1 2024.

• Professional fees for the quarter totaled $2.1 million, with $1.3 million in legal fees.

Outlook and guidance

• Management continues to focus on protecting book value and liquidity amid financial uncertainty and high interest rates.

• No new residential real estate loans are being originated; commercial loan growth is ongoing.

• The company is exploring new banking products and strategic alternatives.

• No large expenditures anticipated beyond regular merit increases.

• Signs of easing inflation and moderating rates are seen as positive for future performance.