Yahoo Finance Sterling Bancorp Inc (SBT) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges ...
Quarterly Performance: Break-even results.
Legal Expenses: Significant due to OCC investigations.
Risk Profile: Described as modest.
Commercial Real Estate: Weak performance, especially in metro New York.
Interest Rates: Pressure on margins expected to continue.
Inflation: Remains high, influencing economic forecasts.
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you clarify the expected future legal expenses following the conclusion of the OCC's investigations? A: Thomas O'Brien, Chairman, CEO and President of Sterling Bancorp, explained that with the OCC's investigations concluding, future legal expenses should be immaterial. However, some costs might arise if the Department of Justice requires interviews or witnesses from former employees, but these are not expected to be significant.
Q: Were there any non-recurring items that impacted this quarter's financials? A: An unidentified company representative mentioned that the quarter included a reversal of a former executive's deferred compensation, which provided a credit of about $360,000. This was somewhat offset by terminations at the beginning of the year, which will balance out in the next quarter.
Q: How are the loan maturities or repricing expected to impact financials in the coming quarters? A: Thomas O'Brien noted that Sterling Bancorp plans to pay off a $50 million home loan bank advance and will not renew it. The direction of margins will largely depend on liability costs rather than asset repricing.
Q: With the stock trading below $5, has the company considered buying back shares? A: Thomas O'Brien acknowledged that there are compelling reasons for buybacks but also strategic reasons why they might not proceed. He did not elaborate further, indicating a cautious approach.
Q: What is the status of non-accrual loans, and do you foresee resolving them in the near future? A: Thomas O'Brien mentioned that the $9 million in non-accrual loans are primarily residential, with about half currently paying and current. He expects no significant loss content from these, and those not paying are moving towards resolution, with some in foreclosure.
Q: Are there any concerns about loans in the delinquency bucket or those criticized? A: Thomas O'Brien reassured that there are no significant concerns regarding delinquent or criticized loans. He mentioned a specific case of a construction loan that had been a concern but is now seeing positive developments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
