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 or near break-even levels, with minor quarterly fluctuations; capital and liquidity remain strong.

• DOJ and OCC investigations into the former Advantage Loan Program are closed, eliminating future related legal and compliance costs.

• Commercial loan portfolio grew, while the residential portfolio continued to decline.

• Strategic focus remains on protecting book value and balance sheet integrity while seeking prudent growth opportunities.

Financial highlights

• Net interest income for Q2 2024 was $14.4 million, down 11% year-over-year; net interest margin declined to 2.44% from 2.64% in Q2 2023.

• Non-interest expense decreased 14% to $14.9 million, driven by lower professional fees and staff reductions.

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

• Professional fees for the quarter totaled $2.1 million, with $1.3 million in legal fees and $800,000 in other professional fees.

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

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.

• Lower interest rates, if realized, could help improve margins as liabilities reprice.

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