Executive Summary

Q3 2024 results were essentially flat to slightly negative: net loss of $0.1M (diluted EPS $0.00) as higher deposit costs compressed NIM to 2.30% from 2.44% in Q2; noninterest expense rose on deal-related professional fees .
Net interest income fell to $13.6M (−5% q/q; −15% y/y) as average interest-bearing deposit balances rose $42.0M and deposit rates increased 15 bps; partially offset by higher yields on loans/securities .
Strategic catalyst: on September 15 the Company agreed to sell Sterling Bank & Trust to EverBank for $261.0M and adopted a plan of dissolution, with closing expected in Q1 2025, driving focus on capital preservation and liquidity .
Asset quality remained solid though nonperforming loans rose modestly to $13.2M (1.08% of total loans; 0.54% of assets); allowance coverage of nonaccruals declined to 189% as the CRE allowance was reduced amid strong portfolio credit quality .

What Went Well and What Went Wrong

What Went Well

Commercial real estate loan yields increased 46 bps q/q, with CRE balances up $29.7M (11%), reflecting origination at higher yields and portfolio growth .
Liquidity and capital remained strong: cash and due from banks increased to $710.4M; consolidated leverage ratio at 14.18% and the Bank at 13.72% (both well-capitalized) .
Strategic clarity: announced sale of the Bank to EverBank and plan of dissolution to unlock value and streamline structure, aligning with prior management emphasis on protecting book value and financial position. “Our focus remains fixed on protecting book value… and increase net income… Credit quality remains strong as do our capital ratios.” — Thomas M. O’Brien (Q2) .

What Went Wrong

Margin compression persisted: NIM fell to 2.30% (−14 bps q/q; −32 bps y/y) as time deposits rose $67.0M and the rate paid on deposits increased 15 bps q/q, lifting interest expense by $1.3M .
Noninterest expense increased to $15.6M (+5% q/q) driven by $0.9M higher professional fees (deal-related), and salary/benefits +$0.3M; efficiency ratio deteriorated to 111.52% .
Tax expense of $0.9M included a $0.6M correction to reverse a prior state tax position on U.S. government interest deductibility, pressuring bottom line despite credit loss recoveries .

Financial Results

Metric	Q3 2023	Q1 2024	Q2 2024	Q3 2024
Net Interest Income ($USD Thousands)	$15,994	$14,934	$14,395	$13,618
Non-Interest Income ($USD Thousands)	$384	$199	$412	$379
Net Income (Loss) ($USD Thousands)	$314	$(197)	$1,316	$(143)
Diluted EPS ($USD)	$0.01	$(0.00)	$0.03	$(0.00)
Net Interest Margin (%)	2.62%	2.52%	2.44%	2.30%
Efficiency Ratio (%)	108.08%	101.71%	100.78%	111.52%
Net Interest Spread (%)	2.15%	1.95%	1.84%	1.71%

Segment breakdown — Loans held for investment:

Segment ($USD Thousands)	Q3 2023	Q2 2024	Q3 2024
Residential Real Estate	$1,139,205	$972,326	$904,438
Commercial Real Estate	$237,812	$277,273	$306,927
Construction	$22,292	$5,050	$5,212
Commercial & Industrial	$17,809	$9,593	$7,158
Other Consumer	$9	$1	$2
Total Loans HFI	$1,417,127	$1,264,243	$1,223,737

Key KPIs — Asset quality and capital:

KPI	Q3 2023	Q2 2024	Q3 2024
Nonperforming Loans ($USD Thousands)	$6,182	$12,213	$13,214
NPLs / Total Loans (%)	0.44%	0.97%	1.08%
NPLs / Total Assets (%)	0.25%	0.51%	0.54%
Allowance for Credit Losses / Total Loans (%)	2.42%	2.18%	2.04%
ACL / Nonaccrual Loans (%)	681%	249%	189%
Net Charge-offs (Recoveries) to Avg Loans (%)	0.00%	(0.03)%	0.00%
Consolidated Tier 1 Leverage Ratio (%)	13.42%	14.26%	14.18%
Bank Tier 1 Leverage Ratio (%)	12.93%	13.80%	13.72%

Deposits and liquidity:

Metric ($USD Thousands)	Q3 2023	Q2 2024	Q3 2024
Total Deposits	$2,040,658	$2,013,465	$2,067,193
Noninterest-bearing Deposits	$40,780	$32,167	$31,276
Money Market/Savings/NOW	$1,127,735	$1,076,079	$1,063,746
Time Deposits	$872,143	$905,219	$972,171
Cash and Due From Banks	$563,622	$599,774	$710,372

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Financial guidance (Revenue, EPS, Margins, OpEx, OI&E, Tax rate)	Q4 2024 onward	None provided	None provided	Maintained (no formal guidance)
Strategic Transaction (Sale of Bank to EverBank)	Expected close Q1 2025	Not applicable	$261.0M cash consideration; closing expected Q1 2025; plan of dissolution approved by Board; subject to shareholder and regulatory approvals	New strategic action announced Sep 2024

Earnings Call Themes & Trends

Note: No Q3 2024 earnings call transcript found in company filings; Q1 and Q2 had calls/webcasts.

Topic	Previous Mentions (Q1 2024)	Previous Mentions (Q2 2024)	Current Period (Q3 2024)	Trend
Capital and Liquidity	Emphasis on protecting book value and liquidity; well-capitalized status maintained	Continued strong capital ratios; leverage 14.26% consolidated; liquidity exerting downward pressure on earnings	Cash rose to $710.4M; leverage 14.18% consolidated; both Co/Bank well-capitalized	Stable/Strong
Margin and Deposit Costs	Deposit costs rising faster than asset yields; NIM 2.52%	NIM fell to 2.44% as deposit rates rose 22 bps; interest expense up	NIM 2.30%; deposit rates +15 bps q/q; time deposits +$67.0M	Worsening marginally
Credit Quality	Robust credit quality post legacy actions; allowance steady	Recovery of credit losses; NPLs 0.51% of assets	Recovery of credit losses $(2.3)M; NPLs 0.54% of assets; CRE allowance reduced on strong credit	Stable
Loan Mix Shift	Residential runoff; CRE modest growth	CRE up $32.7M; residential down $68.1M	Residential down $67.9M; CRE up $29.7M	Continuing mix shift to CRE
Regulatory/Legal	DOJ investigations on individuals; management focus on remediation	DOJ closed investigations related to prior program; expect lower legal costs	Deal announced; dissolution plan post-closing; continued forward-looking caution	Resolution progressing; strategic exit

Management Commentary

“Sterling’s first quarter of 2024 financial results are essentially break-even… We believe Sterling’s credit quality, liquidity and capital levels are robust… market interest rate movements continue to exert pressure on the margin as deposit costs have increased somewhat faster than earning asset yields” — Thomas M. O’Brien, Chairman, President & CEO (Q1) .
“Our focus remains fixed on protecting book value and Sterling’s financial position… Credit quality remains strong as do our capital ratios… Deposit levels remain essentially flat… residential portfolio continues to decline… growth in our commercial portfolio” — Thomas M. O’Brien (Q2) .
Q3 press release emphasized underlying drivers: higher interest expense from deposit rate/balance increases, improved yields on loans/securities, and deal-related professional fees, as well as a tax correction impacting results .

Q&A Highlights

No Q3 2024 earnings call transcript was available in company filings or the investor relations press release; Q1 and Q2 featured calls/webcasts but none was identified for Q3 .

Estimates Context

S&P Global consensus EPS and revenue estimates for Q3 2024 were unavailable for SBT in our SPGI mapping; as a result, comparisons to Wall Street consensus could not be performed. Actual diluted EPS was $0.00; net interest income $13.6M; NIM 2.30% .
Implication: With no formal consensus, buyside will anchor on sequential and y/y trends; margin trajectory and deposit cost dynamics are the primary variables for forward expectations .
Values retrieved from S&P Global were unavailable for this ticker due to missing mapping.

Key Takeaways for Investors

Near-term EPS pressure is driven by deposit repricing and mix (time deposits up $67.0M; rate paid +15 bps q/q) compressing NIM to 2.30%; watch rate path and deposit competition for relief .
CRE growth at higher yields (balances +11%; yield +46 bps q/q) partially offsets residential runoff and supports NII stabilization into Q4 absent further rate spikes .
Strong liquidity ($710.4M cash) and well-capitalized status provide resiliency amid strategic transition; balance sheet optionality remains high .
Deal execution is the primary catalyst: $261.0M EverBank sale and post-close dissolution expected Q1 2025; monitor shareholder/regulatory approvals and any updated timeline signals .
Credit remains controlled (recoveries; ACL/loans 2.04%) though NPLs ticked up; coverage of nonaccruals declined as CRE allowance was right-sized — a sign of confidence in portfolio credit quality .
Noninterest expense bears deal-related costs (+$0.9M professional fees); expect elevated opex through closing, then normalization post-transaction .
Tax items can be lumpy (state tax correction +$0.6M); modelers should account for potential one-offs in tax lines near-term .

Additional Relevant Press Releases (Q3 2024 period)

Sterling Bancorp Reports Third Quarter 2024 Financial Results — October 30, 2024 .
Sterling Bancorp Announces Sale of Sterling Bank and Trust, F.S.B. to EverBank Financial Corp and Adoption of Plan of Dissolution — September 16, 2024 .

Appendix: Data Drivers and Explanations

NII decline q/q: +$1.3M interest expense from higher deposit balances/rates, partially offset by +$0.6M interest income from higher securities/other earning assets; loan yields up with CRE contribution .
Opex uptick: +$0.9M professional fees (transaction-related), +$0.3M salaries; offset by lower other expenses (−$0.5M) .
Tax: $0.9M expense includes $0.6M reversal of a prior state tax position (U.S. government interest deductibility), impacting bottom line .

Sterling Bancorp, Inc. (SBT)·Q3 2024 Earnings Summary