Sign in

You're signed outSign in or to get full access.

SB

Sterling Bancorp, Inc. (SBT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 returned to profitability: net income $1.16M ($0.02 diluted EPS) vs. $(0.14)M in Q3; FY24 net income $2.14M ($0.04 EPS) .
  • NIM compressed further to 2.24% (2.30% in Q3; 2.52% in Q4’23) as asset yields fell 23 bps QoQ while deposit costs fell 17 bps QoQ; average loans also declined YoY, pressuring NII .
  • Credit continued to be a tailwind: $(4.16)M recovery of credit losses in Q4 (vs. $(2.34)M in Q3) on lower criticized/classified CRE and residential run-off; ACL/loans fell to 1.80% (2.04% in Q3) .
  • Capital/liquidity remained strong and stable: cash rose to $878.2M (+24% QoQ), deposits steady at $2.07B, and consolidated leverage ratio 14.08% .
  • Key catalyst: sale of Sterling Bank & Trust to EverBank for $261M—shareholders approved Dec 18, 2024; closing expected in Q1 2025, subject to regulatory approvals .

What Went Well and What Went Wrong

  • What Went Well

    • Recoveries and lower risk in CRE drove a larger reserve release; Q4 provision was a $(4.2)M recovery as criticized/classified assets fell; residential allowance fell with run-off .
    • Liquidity and capital remained robust (cash $878.2M; leverage ratio 14.08% company/13.76% bank), supporting stability into the transaction close .
    • Nonperforming loans manageable at $14.6M (0.60% of assets), with no charge-offs and de minimis recoveries in Q4 .

  • What Went Wrong

    • NIM pressure persisted (2.24%), driven by lower asset yields and YoY higher deposit costs; net interest income declined YoY (Q4’24 $13.52M vs. $15.11M Q4’23) .
    • Operating expenses elevated (Q4 $15.9M) with $2.1M of transaction-related professional fees and higher “other” expenses; YoY comparisons are also affected by $3.8M insurance reimbursements in Q4’23 .
    • Asset shrinkage continued: loans fell 6% QoQ (residential down 6%; CRE down 3%), weighing on earning asset yields and NIM trajectory .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Diluted EPS ($)0.10 0.03 (0.00) 0.02
Net Income ($MM)5.063 1.316 (0.143) 1.162
Total Interest Income ($MM)32.928 33.864 34.354 33.635
Net Interest Income ($MM)15.105 14.395 13.618 13.523
Net Interest Margin (%)2.52% 2.44% 2.30% 2.24%
Non-interest Income ($MM)0.213 0.412 0.379 0.067
Non-interest Expense ($MM)12.830 14.923 15.610 15.888
Provision for (Recovery of) Credit Losses ($MM)(4.357) (2.079) (2.338) (4.160)
Efficiency Ratio (%)83.76% 100.78% 111.52% 116.91%

Balance Sheet and Asset Quality

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Cash & Due From Banks ($MM)577.967 599.774 710.372 878.181
Loans, net ($MM)1,319.568 1,236.687 1,198.767 1,134.925
Total Deposits ($MM)2,003.986 2,013.465 2,067.193 2,070.890
Nonperforming Loans ($MM)8.973 12.213 13.214 14.584
ACL / Total Loans (%)2.18% 2.18% 2.04% 1.80%
Leverage Ratio (Consolidated) (%)13.95% 14.26% 14.18% 14.08%

Loan Composition ($MM)

CategoryQ4 2023Q2 2024Q3 2024Q4 2024
Residential Real Estate1,085.776 972.326 904.438 849.350
Commercial Real Estate236.982 277.273 306.927 296.457
Construction10.381 5.050 5.212 2.509
Commercial & Industrial15.832 9.593 7.158 7.395
Total HFI Loans1,348.972 1,264.243 1,223.737 1,155.730

Deposit Composition ($MM)

CategoryQ4 2023Q2 2024Q3 2024Q4 2024
Noninterest-bearing35.245 32.167 31.276 38.086
Money Market/Savings/NOW1,095.521 1,076.079 1,063.746 1,079.744
Time Deposits873.220 905.219 972.171 953.060
Total Deposits2,003.986 2,013.465 2,067.193 2,070.890

Notes:

  • No earnings call transcript was found for Q4 2024; we relied on the company’s 8‑K/press release financials .
  • The company did not provide formal financial guidance in Q4 materials .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sale of Sterling Bank & Trust to EverBank (close timing)Q1 2025 (expected)Expected Q1 2025 (as of Q3 release) Expected Q1 2025; shareholder approval obtained Dec 18, 2024; pending regulatory approvals Maintained

No quantitative guidance (revenue, NIM, OpEx, tax rate, dividends) was issued in the Q4 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
NIM and Deposit CostsNIM 2.44%; deposit cost 3.91% in Q2; Q3 NIM 2.30% with higher deposit costs and mix shift pressure NIM 2.24%; asset yields −23 bps QoQ; deposit costs −17 bps QoQ Continued NIM pressure; modest relief in deposit costs
LiquidityCash $599.8M (Q2); $710.4M (Q3) Cash $878.2M (+24% QoQ) Liquidity further elevated
Loan Mix/VolumesResidential run-off; CRE growth in Q2/Q3 Residential −6% QoQ; CRE −3% QoQ Ongoing residential run-off; CRE stabilized/down slightly
Credit QualityRecovery of credit losses; NPLs $12.2M (Q2) → $13.2M (Q3) Recovery $(4.2)M; NPLs $14.6M; ACL/loans 1.80% Allowance down with risk reduction; NPLs modestly higher
Regulatory/LegalDOJ investigations closed (May 2024) No new items; FY24 effective tax rate 49.7% after Q3 state tax adjustment Legal overhang reduced; tax normalization expected
Strategic/M&AEverBank deal announced; expected close Q1 2025 Shareholders approved; close expected Q1 2025 pending approvals Transaction progressing

Management Commentary

  • Strategy: “Our focus remains fixed on protecting book value and Sterling’s financial position while we continue to explore opportunities to prudently reposition the Company and increase net income.” — Thomas M. O’Brien, Chairman, President & CEO (Q2 2024 press release) .
  • Macro/Tone: “We believe there are some hopeful signs of easing inflation, moderating interest rates, and lessening financial stress in the economy.” — Thomas M. O’Brien (Q2 2024 press release) .
  • Q4 operational color: NII was pressured QoQ by lower asset yields, partially offset by lower deposit costs; the larger reserve release was driven by lower criticized/classified CRE and residential run-off; Q4 OpEx included $2.1M of transaction costs, while Q4’23 had $3.8M in insurance reimbursements .

Q&A Highlights

No Q4 2024 earnings call transcript was available; therefore, there are no Q&A themes to report from the current period [functions.ListDocuments: earnings-call-transcript not found].

Estimates Context

S&P Global consensus estimates for Q4 2024 were unavailable for SBT (SPGI mapping error returned; no estimates to benchmark). As a result, comparisons to Street revenue/EPS are not provided for this quarter.

Key Takeaways for Investors

  • Profitability returned in Q4 ($0.02 EPS) with a larger reserve release; however, the earnings base remains constrained by NIM compression and shrinking loan balances .
  • Asset-sensitive dynamics remain a headwind: asset yields fell faster than deposit costs QoQ; watch for stabilization as rates evolve .
  • High liquidity ($878.2M cash) and strong capital (14.08% leverage) provide resiliency into the anticipated bank sale .
  • Credit remains supportive: continued recoveries/reserve release as criticized/classified CRE declines; NPLs increased but remain manageable .
  • Operating expenses include deal-related costs ($2.1M in Q4); ex-transaction costs, underlying expense trajectory improved YoY in FY24 .
  • Primary near-term catalyst: regulatory approvals and closing of the EverBank transaction in Q1 2025; shareholder approval already obtained .
  • Post-close considerations: dissolution plan approved; investors should focus on timing/certainty of deal close and any updates to consideration or regulatory conditions disclosed by the company .