Sterling Bancorp’s Mortgage Legal Costs Decrease Second Quarter Profits



On Monday, company officials said costs associated with a number of legal issues limited Sterling Bancorp’s profits in the second quarter.

After losing $ 13 million during 2020, the Southfield, Michigan-based bank made a profit in the first two quarters of 2021, posting second-quarter net income of $ 2.57 million, or $ 0.05 per diluted share. This rose from $ 2.33 million in the first quarter of this year and is down from $ 2.87 million in the second quarter of 2020.

Last year Sterling faced disclosure litigation and redeemed mortgages that he sold as part of the terminated Concessional lending program. The total buyback was about $ 80 million for the quarter, and the company is committed to providing an additional $ 100 million in loans over the next several quarters.

The bank is also currently transforming its IT system, which increased spending by $ 600,000 in the quarter. Chairman, CEO and President Tom O’Brien said on the call of income.

“Costs continue to rise and there were a lot of moving parts in the second quarter,” O’Brien said. “We are confident that they will decline in the third and fourth quarters, primarily because the results of the anti-money laundering and securities class action retrospective analyzes are nearing completion and the costs associated with them begin to dissipate.”

Sterling collected $ 19.9 million in non-interest expenses in the second quarter, including $ 5.7 million in legal and professional fees. They decreased from $ 21.3 million and $ 8.8 million in the previous quarter, respectively, and a year ago – from $ 20 million and $ 8.3 million. Due to amortization of mortgage servicing rights from repurchased loans, lower reimbursement allowance and lower service margins, non-interest income fell to $ 269,000 from $ 453,000 QoQ and $ 1.3 million YoY.

The company’s total assets fell to $ 3.42 billion from $ 3.69 billion in the first quarter and $ 3.74 billion a year earlier. Non-performing home mortgages held for sale fell to $ 14.9 million from $ 18.6 million and $ 19.4 million in the previous two quarters. Non-performing loans held for investment were $ 74.8 million in the quarter, compared to $ 83.6 million and $ 54.3 million in the quarter and a year earlier, respectively. Meanwhile, Sterling’s troubled debt restructuring totaled $ 2.9 million, compared with $ 7.6 million and $ 23 million in the same periods.


Source link