Sterling Bancorp Inc (SBT) Tops Q4 EPS by 3c

Sterling Bancorp Inc (NASDAQ: SBT) reported Q4 EPS of $0.28, $0.03 better than the analyst estimate of $0.25.

Q4 2019 Highlights

• Net income of $14.0 million, up 0.5% from Q3 2019, and down 13% from Q4 2018
• Fully diluted EPS of $0.28, unchanged from Q3 2019 and down 7% from Q4 2018
• Fourth quarter ROAA of 1.70% and ROATCE of 15.62%, and full year 2019 ROAA of 1.74% and ROATCE of 16.38%.
• Revenue, net of interest expense, was $32.3 million, down 3% from Q3 2019, and 12% from Q4 2018
• Total loan originations of $281.7 million, consistent with Q3 2019 and down from $332.7 million in Q4 2018
• Total gross loans, including loans held for investment and loans held for sale, of $2.91 billion, down slightly from Q3 2019 and Q4 2018
• Total deposits of $2.50 billion, a 3% decrease from Q3 2019, and a 2% increase from Q4 2018
• Net interest margin of 3.74%, compared to 3.70% in Q3 2019 and 3.90% in Q4 2018
• Repurchased approximately 0.5 million shares of common stock at an average price of $9.93 during the quarter

For the fourth quarter 2019, net income totaled $14.0 million, or $0.28 per diluted share, based on 50.0 million weighted average diluted shares outstanding. This compares to third quarter 2019 net income of $13.9 million, or $0.28 per diluted share, based on 50.4 million weighted average diluted shares outstanding. For the fourth quarter of 2018, net income totaled $16.0 million, or $0.30 per diluted share, based on 53.0 million weighted average diluted shares outstanding.

“Overall, our financial results for the fourth quarter were in line with our expectations,” said Tom Lopp, Chairman, CEO and President of Sterling Bancorp. “Our EPS for the quarter was consistent with the third quarter despite lower revenue and higher operating expenses as we benefited from a lower income tax rate. We continue to generate strong returns, as our annualized return on average assets was 1.70% and our annualized return on average tangible common equity was 15.62%.

“During the quarter, net interest margin improved, primarily due to lower deposit costs more than offsetting the decline in the yield on our interest earning assets. Our loan production was lower during the quarter primarily due to lower residential mortgage production, which was partially offset by higher commercial real estate and construction loan production. As a result, our total loans declined slightly during the quarter.

“As we previously announced, on December 9, 2019, we suspended our Advantage Loan program in connection with an ongoing internal review of the program’s documentation procedures. As a result of this action, we expect our near-term total loan production to be below historical levels and adversely impact our portfolio loan growth rates. Our operating expense levels are also expected to be elevated as we invest in our compliance infrastructure. We intend to offset a portion of our reduced loan volume by continuing to work on initiatives to diversify our overall loan production, including expanding our commercial lending and tenant-in-common lending efforts. In addition, we will continue to develop new residential loan products that we believe will meet the needs of our customers, as well as have a broader appeal in our served markets. We are committed to making the necessary investments in order to realize the bank’s long-term growth potential,” concluded Mr. Lopp.

For earnings history and earnings-related data on Sterling Bancorp Inc (SBT) click here.

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