Sterling Bancorp | research notes

Sterling Bancorp: A Leading Community Bank Holding Company

About Sterling Bancorp

Sterling Bancorp, Inc. (NASDAQ: STL) is a financial holding company headquartered in Sterling, Virginia. It operates through its wholly-owned subsidiary, Sterling National Bank, a full-service commercial bank providing a range of financial services to individuals, businesses, and institutions.

History

Sterling Bancorp was founded in 1988 and has since grown through organic expansion and strategic acquisitions. The bank has a strong presence in the Washington, D.C. metropolitan area and has expanded into other markets in the Mid-Atlantic region.

Financial Performance

Sterling Bancorp has consistently delivered strong financial performance. In 2022, it reported:

• Total assets: $16.4 billion
• Total deposits: $12.7 billion
• Net income: $196.9 million

Product and Services

Sterling National Bank offers a comprehensive suite of banking services, including:

• Personal banking (checking and savings accounts, loans, mortgages)
• Business banking (commercial loans, lines of credit, treasury management)
• Wealth management (investment services, financial planning)
• International banking

Community Involvement

Sterling Bancorp is actively involved in the communities it serves. The company supports various non-profit organizations and provides financial literacy programs to underserved communities.

Awards and Recognition

Sterling Bancorp has received numerous awards and recognition for its performance and community involvement, including:

• Top 200 Community Banks in the United States (Forbes, 2023)
• Best Banks in the Washington, D.C. Area (Money, 2023)
• Community Bank of the Year (Bank Director, 2022)

Future Prospects

Sterling Bancorp is well-positioned for continued growth. The company has a strong capital base, a growing customer base, and a commitment to providing exceptional financial services. The bank plans to continue expanding its operations in the Mid-Atlantic region and enhancing its digital offerings to meet the evolving needs of its customers.

Conclusion

Sterling Bancorp is a leading community bank holding company with a strong financial performance, a wide range of products and services, and a commitment to its customers and communities. The company is well-positioned for continued growth and success in the future.

Sterling Bancorp's Business Model

Sterling Bancorp is a regional bank headquartered in Sterling, Virginia, that focuses on providing a range of commercial and consumer banking services primarily in the mid-Atlantic and Northeast regions of the United States. Its business model revolves around the following core elements:

• Community Banking: Sterling Bancorp serves businesses, individuals, and municipalities in its local markets, building strong customer relationships through personalized service and financial guidance.
• Commercial Lending: The bank provides a variety of loan products to businesses of all sizes, including term loans, lines of credit, and commercial real estate financing.
• Consumer Banking: Sterling Bancorp offers deposit accounts, mortgages, home equity loans, and personal loans to individual consumers.
• Wealth Management: The bank's wealth management division provides investment and financial planning services to high-net-worth individuals and institutions.
• Technology: Sterling Bancorp invests heavily in technology to enhance customer experience, automate processes, and improve risk management.

Advantages to Competitors

Sterling Bancorp's business model offers several advantages over its competitors:

• Local Focus: By focusing on specific regional markets, Sterling Bancorp can tailor its products and services to the unique needs of its customers and build deep relationships within the community.
• Strong Commercial Lending Expertise: The bank has a long history of providing financing to businesses, which has enabled it to develop deep industry knowledge and a strong network of clients.
• Personalized Service: Sterling Bancorp emphasizes personal service and relationship building, giving it an edge over larger banks that may offer more impersonal experiences.
• Technology Advantage: The bank's commitment to technology allows it to offer innovative solutions, streamline operations, and improve risk management capabilities.
• Efficient Cost Structure: As a regional bank, Sterling Bancorp can operate with a leaner cost structure than larger national competitors, which translates into more competitive rates and fees for customers.
• Strong Capital Position: The bank maintains a strong capital position, which provides stability and flexibility to weather economic downturns and invest in growth opportunities.

Sterling Bancorp Outlook

Company Overview

• Sterling Bancorp, Inc. is a financial holding company headquartered in Nanuet, New York.
• It operates through its principal subsidiary, Sterling National Bank, which provides a range of financial services to businesses, consumers, and municipalities.
• The company has over 140 branches and lending offices across New York, New Jersey, Connecticut, and Pennsylvania.

Financial Performance

• Revenue: Sterling Bancorp's revenue has grown steadily in recent years, driven by strong loan growth and expansion of fee-based income.
• Earnings: Net income has also increased, reflecting improved net interest margin and reduced expenses.
• Capital Adequacy: The company maintains a strong capital position, with ample Tier 1 capital and total risk-based capital ratios exceeding regulatory requirements.
• Asset Quality: Loan quality has remained sound, with low levels of non-performing loans and net charge-offs.

Industry Environment

• Competition: The banking industry is highly competitive, with numerous large and regional banks vying for market share.
• Regulatory Changes: The regulatory environment for banks has been evolving, with increased focus on risk management and compliance.
• Technology: Technological advancements are transforming the financial services landscape, creating opportunities and challenges for banks.

Growth Strategy

• Sterling Bancorp is focused on organic growth through:
  • Expanding its branch network
  • Enhancing its digital capabilities
  • Cross-selling products and services
• The company is also pursuing strategic acquisitions to complement its core business.

Outlook

• The company's long-term prospects are positive, supported by its:
  • Strong financial performance
  • Solid asset quality
  • Committed management team
• Challenges to watch include:
  • Increased competition
  • Regulatory changes
  • Uncertain economic environment

Analysts' Consensus

• Analysts generally have a favorable outlook on Sterling Bancorp, citing the company's strong financial position, growth potential, and attractive dividend yield.
• The consensus target price for the stock is approximately 10% above its current market price.

Investment Considerations

• Dividend Yield: Sterling Bancorp offers a competitive dividend yield, making it attractive to income-oriented investors.
• Growth Potential: The company's growth strategy and focus on organic expansion and acquisitions provide potential for share price appreciation.
• Valuation: The stock trades at a reasonable valuation relative to its peers.
• Risks: Investors should consider the potential risks associated with the banking industry, including competition, regulatory changes, and economic uncertainty.

Similar Companies to Sterling Bancorp that Customers May Also Like:

1. Customers Bancorp, Inc. (CUS)

• Homepage: https://www.customersbank.com/
• Review: Customers Bancorp is a community-oriented bank known for its personalized service and competitive interest rates on deposits. Customers appreciate its local presence, convenient branches, and strong customer support.

2. Fulton Financial Corporation (FULT)

• Homepage: https://www.fultonbank.com/
• Review: Fulton Financial is a regional bank with a reputation for financial stability and innovation. Customers enjoy its wide range of banking products, including competitive mortgage rates and convenient online banking services.

3. Webster Financial Corporation (WBS)

• Homepage: https://www.websterbank.com/
• Review: Webster Financial offers a comprehensive suite of banking and wealth management services. Customers value its strong track record, local expertise, and customer-centric approach.

4. M&T Bank Corporation (MTB)

• Homepage: https://www.mtb.com/
• Review: M&T Bank is a large regional bank with a wide branch network. Customers appreciate its convenient locations, competitive interest rates, and range of financial products.

5. KeyCorp (KEY)

• Homepage: https://www.key.com/
• Review: KeyCorp is a national bank known for its strong commercial banking capabilities. Customers value its personalized service, competitive rates, and innovative financial solutions.

History of Sterling Bancorp

1981:

• Sterling Bancorp is founded as Sterling Savings & Loan Association of New York.

1983:

• The company opens its first branch in the Bronx, New York.

1990:

• Sterling converts from a savings and loan association to a commercial bank.

1993:

• Sterling acquires East Coast Savings Bank, expanding its presence in New York.

1998:

• The company changes its name to Sterling Bancorp.

1999:

• Sterling acquires Broadview Savings Bank, further expanding its operations in New York.

2006:

• Sterling acquires Troy Bancorp, entering the New Jersey market.

2007:

• Sterling acquires Flagship National Bank, increasing its presence in metropolitan New York.

2012:

• The company acquires The Bancorp, Inc., a Delaware-based thrift holding company.

2016:

• Sterling acquires First Choice Bank, expanding into upstate New York.

2017:

• Sterling acquires Village Bank and Trust Financial Corp., further consolidating its market position in New York.

2020:

• The company acquires Astoria Bank, a leading community bank in the New York City metropolitan area.

2022:

• Sterling Bancorp becomes the second-largest regional bank headquartered in New York.

Key Milestones:

• 1998: Name change to Sterling Bancorp
• 1999-2007: Expansion through acquisitions in New York and New Jersey
• 2012: Acquisition of The Bancorp, Inc.
• 2016-2020: Continued growth through acquisitions in upstate New York, New York City metropolitan area
• 2022: Second-largest regional bank in New York

Last Three Years Timeline of Sterling Bancorp

2020

• Acquired Bank of Newington for $165 million
• Increased deposits by 20% to $10.4 billion
• Expanded into the Boston market with the opening of two new branches

2021

• Completed the acquisition of Cortlandt Bancorp for $140 million
• Increased total assets to $15.1 billion
• Declared a special dividend of $0.50 per share

2022

• Acquired Partners Trust Financial Group for $425 million
• Announced plans to merge with Webster Financial Corporation
• Reported record net income of $259.3 million

Recent Timelines

June 2023

• Merger with Webster Financial Corporation completed

July 2023

• Announced the sale of its insurance business to USI Insurance Services
• Renamed Webster Bank National Association

Sterling Bancorp: A Customer-Centric Champion

As a valued customer of Sterling Bancorp, I am ecstatic to share my overwhelmingly positive experience with this exceptional financial institution. From the moment I first interacted with their team, I was struck by their unwavering commitment to customer satisfaction.

Personalized Service, Every Step of the Way

The staff at Sterling Bancorp went above and beyond to understand my unique financial needs and tailor solutions specifically designed to meet them. They took the time to listen attentively, ask probing questions, and provide clear and concise explanations. I felt as if I had a dedicated financial advisor at my fingertips, always ready to assist me with personalized guidance.

Cutting-Edge Products and Services

Sterling Bancorp offers an extensive range of innovative products and services that cater to every financial need. From personal banking to commercial lending, they have solutions for individuals, businesses, and non-profits alike. Their online banking platform is user-friendly and secure, making it easy to manage my finances from anywhere, anytime.

Community-Oriented Values

What sets Sterling Bancorp apart is their unwavering commitment to the communities they serve. They actively support local businesses, sponsor community events, and invest in initiatives that make a positive impact. Their passion for giving back is evident in everything they do, and it is one of the reasons I am proud to be a customer.

Exceptional Customer Service

The customer service team at Sterling Bancorp is truly exceptional. They are responsive, efficient, and genuinely care about resolving any inquiries or concerns promptly and effectively. Whether I'm interacting with them over the phone, through email, or in person, I am consistently met with a level of professionalism and courtesy that exceeds expectations.

A True Partner in Financial Success

Over the years, Sterling Bancorp has proven to be more than just a financial institution; they are a true partner in my financial success. Their holistic approach to banking has helped me achieve my financial goals and build a secure financial future. I highly recommend Sterling Bancorp to anyone seeking a customer-centric, community-oriented, and innovative financial services provider. Five stars all around!

Unlock Your Financial Potential with Sterling Bancorp: Visit Our Website Today!

Are you seeking a trusted and reliable financial partner to guide you on your financial journey? Look no further than Sterling Bancorp, a leading provider of a comprehensive suite of banking and financial services.

Why Choose Sterling Bancorp?

• Financial Expertise and Stability: With over 100 years of experience, Sterling Bancorp has the expertise and financial stability to support your banking and investment needs.
• Customized Solutions: We understand that every financial situation is unique. That's why we offer tailored solutions to meet your specific goals and aspirations.
• Exceptional Customer Service: Our team of dedicated professionals is committed to providing exceptional customer service, ensuring your satisfaction every step of the way.

Discover Our Extensive Services

Visit our website today to explore our wide range of services:

• Banking Products: Access personal and business checking and savings accounts, loans, mortgages, and more.
• Wealth Management: Plan for the future with our personalized investment management, retirement planning, and estate services.
• Business Banking: Support your business with customized lending solutions, cash management, and merchant services.
• Technology Solutions: Stay connected with our mobile banking, online account management, and financial planning tools.

Exclusive Online Benefits

By visiting our website, you can unlock exclusive online benefits:

• Convenient Account Management: Manage your accounts online, anytime, anywhere.
• Financial Insights and Resources: Access valuable articles, webinars, and financial calculators to empower your decision-making.
• Exclusive Promotions and Rewards: Take advantage of special offers and discounts available only to our online customers.

Start Your Banking Journey Today

Don't wait any longer to take control of your financial future. Visit the Sterling Bancorp website at www.sterlingbancorp.com to connect with our experienced team, explore our services, and start your banking journey on the right foot.

Your financial well-being is our priority. Choose Sterling Bancorp as your trusted financial partner and unlock a world of financial possibilities.

Main Suppliers (Upstream Service Providers) of Sterling Bancorp

Sterling Bancorp, a leading regional bank in the United States, relies on various suppliers to provide essential services and materials that support its operations. Here are some of the main suppliers for Sterling Bancorp:

1. Fiserv

• Website: www.fiserv.com
• Services: Core banking services, payment processing, risk management, and digital banking solutions

2. Jack Henry & Associates

• Website: www.jackhenry.com
• Services: Core banking software, payment processing, and digital banking platforms

3. IBM

• Website: www.ibm.com
• Services: Cloud computing, data analytics, and IT infrastructure

4. Microsoft

• Website: www.microsoft.com
• Services: Software licenses, cloud services, and technology support

5. Oracle

• Website: www.oracle.com
• Services: Database software, cloud services, and enterprise applications

6. Diebold Nixdorf

• Website: www.dieboldnixdorf.com
• Services: ATMs, self-service kiosks, and other banking equipment

7. NCR Corporation

• Website: www.ncr.com
• Services: ATMs, point-of-sale systems, and managed services

8. Payment Alliance International (PAI)

• Website: www.paymentalliance.org
• Services: Credit card processing and payment gateway services

9. Visa

• Website: www.visa.com
• Services: Debit and credit card processing

10. Mastercard

• Website: www.mastercard.com
• Services: Debit and credit card processing

These suppliers are crucial for Sterling Bancorp's operations. They provide the bank with the necessary infrastructure, software, equipment, and services to effectively serve its customers and manage its financial activities. Sterling Bancorp's ability to maintain strong relationships with its suppliers is essential for its ongoing success and growth.

Main Customer Segments of Sterling Bancorp

As a financial holding company, Sterling Bancorp primarily serves the following customer segments:

1. Commercial and Industrial Lending

• Name: Businesses of various sizes and industries
• Website: N/A

Sterling Bancorp provides a range of credit and financing solutions to businesses, including loans, lines of credit, and equipment financing.

2. Commercial Real Estate Lending

• Name: Property owners, developers, and investors
• Website: N/A

The company offers commercial real estate loans for properties such as office buildings, multi-family dwellings, and industrial facilities.

3. Consumer Banking

• Name: Individuals and families
• Website: https://www.sterlingbancorp.com/personal-banking

Sterling Bancorp's consumer banking services include checking and savings accounts, mortgages, personal loans, and credit cards.

4. Wealth Management

• Name: High-net-worth individuals and families
• Website: https://www.sterlingbancorp.com/wealth-management

The company provides investment management, estate planning, and trust services through its subsidiary, Sterling Wealth Management.

Downstream Company

Sterling Bancorp does not have any notable downstream companies, as it primarily operates as a financial services provider rather than a manufacturer or retailer.

Additional Information

Sterling Bancorp's customer base is concentrated in the metropolitan areas of New York City, Long Island, and the Hudson Valley in New York State. The company has a strong presence in the healthcare, education, and technology sectors.

Key Revenue Streams

1. Net Interest Income:

• Description: Revenue generated from the difference between interest income earned on loans and investments, and interest expense paid on deposits and other liabilities.
• Estimated Annual Revenue: $950 million (as of December 31, 2022)

2. Service Charges on Deposits and Other Accounts:

• Description: Fees charged for services such as account maintenance, overdraft protection, and wire transfers.
• Estimated Annual Revenue: $150 million (as of December 31, 2022)

3. Non-Interest Income:

• Description: Revenue from sources other than lending and deposit fees, such as wealth management, investment banking, and insurance.
• Estimated Annual Revenue: $180 million (as of December 31, 2022)

4. Other Operating Revenue:

• Description: Revenue from activities such as loan origination fees and equipment sales.
• Estimated Annual Revenue: $30 million (as of December 31, 2022)

Total Annual Revenue (as of December 31, 2022): Approximately $1.31 billion

Additional Details:

• Net Interest Margin (NIM): The spread between net interest income and average interest-earning assets. Sterling Bancorp's NIM as of December 31, 2022, was 3.51%.
• Non-Interest Income to Total Revenue Ratio: The percentage of revenue generated from non-interest sources. For Sterling Bancorp, this ratio was 13.7% as of December 31, 2022.
• Efficiency Ratio: The ratio of non-interest expenses to total revenue. Sterling Bancorp's efficiency ratio as of December 31, 2022, was 57.4%.

It's important to note that these revenue estimates are based on the company's financial statements and may vary in subsequent periods.

Key Partners of Sterling Bancorp

1. Fiserv, Inc.

• Website: https://www.fiserv.com/
• Description: A leading provider of financial technology solutions to banks, credit unions, and other financial institutions. Sterling Bancorp partners with Fiserv for core banking, payment processing, and other technology services.

2. Fiserv Capital Markets

• Website: https://www.fiservcapitalmarkets.com/
• Description: A division of Fiserv that provides investment banking, capital markets, and advisory services. Sterling Bancorp utilizes Fiserv Capital Markets for underwriting, mergers and acquisitions, and other capital-raising activities.

3. The Clearing House

• Website: https://www.theclearinghouse.org/
• Description: A non-profit organization that provides payment and settlement services to commercial banks and other financial institutions in the United States. Sterling Bancorp participates in The Clearing House's RTP (Real-Time Payments) network.

4. Jack Henry & Associates, Inc.

• Website: https://www.jackhenry.com/
• Description: A provider of core banking and other software solutions to financial institutions. Sterling Bancorp uses Jack Henry's SilverLake System as its core banking platform.

5. Mastercard Incorporated

• Website: https://www.mastercard.com/
• Description: A global payments technology company. Sterling Bancorp issues Mastercard credit and debit cards to its customers.

6. Visa Inc.

• Website: https://www.visa.com/
• Description: A global payments technology company. Sterling Bancorp issues Visa credit and debit cards to its customers.

7. Fiserv Source

• Website: https://www.fiservsource.com/
• Description: A division of Fiserv that provides outsourced business process solutions to financial institutions. Sterling Bancorp outsources certain back-office functions to Fiserv Source.

8. Crowe LLP

• Website: https://www.crowe.com/
• Description: An accounting and consulting firm. Sterling Bancorp engages Crowe LLP for auditing, tax advisory, and other professional services.

9. Davis Polk & Wardwell LLP

• Website: https://www.davispolk.com/
• Description: A global law firm. Sterling Bancorp utilizes Davis Polk & Wardwell LLP for legal advice on mergers and acquisitions, regulatory compliance, and other matters.

10. Ernst & Young LLP

• Website: https://www.ey.com/
• Description: A global accounting and consulting firm. Sterling Bancorp engages Ernst & Young LLP for tax planning, risk management, and other consulting services.

Key Cost Structure of Sterling Bancorp

Personnel Expenses

• Salaries and wages: $515.7 million (2022)

• Benefits: $154.2 million (2022)

• Estimated annual cost: $670 million

Interest Expense

• Interest paid on deposits: $120.6 million (2022)

• Interest paid on borrowings: $21.1 million (2022)

• Estimated annual cost: $142 million

Non-Interest Expenses

• Occupancy and equipment: $48.2 million (2022)

• Marketing and advertising: $15.3 million (2022)

• Regulatory and legal expenses: $14.0 million (2022)

• Technology and data processing: $12.6 million (2022)

• Estimated annual cost: $165 million

Other Expenses

• Loan loss provision: $19.8 million (2022)

• Depreciation and amortization: $10.6 million (2022)

• Estimated annual cost: $30 million

Total Estimated Annual Cost

Based on the 2022 financial data, the estimated annual cost structure of Sterling Bancorp is approximately $947 million.

Key Observations

• Personnel expenses: Sterling Bancorp's largest expense is personnel, accounting for approximately 71% of total costs.
• Interest expense: Interest expense is a significant cost, reflecting the bank's reliance on deposits and borrowings to fund its operations.
• Non-interest expenses: Occupancy, equipment, and technology are other major cost drivers for the bank.
• Loan loss provision: The loan loss provision is a key indicator of the bank's credit risk exposure.
• Total costs: Sterling Bancorp's total costs have been increasing steadily in recent years, driven by rising salaries, interest rates, and operating expenses.

Sales Channels

Sterling Bancorp primarily operates through its branch network and digital channels, with a focus on personalized services for its customers.

• Branch Network: Sterling Bancorp operates a network of over 165 branches in the New York metropolitan area and Long Island. The branches provide a range of retail banking services, including:

  • Account opening and management
  • Lending (mortgages, commercial loans, consumer loans)
  • Wealth management and investment services
  • Cash management and treasury services

• Digital Channels: Sterling Bancorp offers a suite of digital banking services, including:

  • Online and mobile banking
  • Online account opening
  • Mobile check deposit
  • Bill pay
  • Digital lending (e.g., personal loans, auto loans)

• Other Sales Channels: Sterling Bancorp also utilizes other sales channels to reach its target customers, including:

  • Referral programs
  • Marketing campaigns (e.g., print advertising, online advertising, social media)
  • Partnerships with other businesses (e.g., mortgage brokers, financial advisors)

Estimated Annual Sales

Specific sales figures for each sales channel are not publicly available. However, Sterling Bancorp's total revenue for the fiscal year ended December 31, 2022, was $1.62 billion. This revenue is generated from a combination of interest income (from loans and investments), non-interest income (e.g., fees from banking services, wealth management services), and other income sources.

It is estimated that the majority of Sterling Bancorp's sales are generated through its branch network, followed by its digital channels and other sales channels. The branch network provides a personal touch and allows customers to build relationships with bankers, while the digital channels offer convenience and accessibility. Sterling Bancorp's sales are also likely to be influenced by factors such as economic conditions, interest rates, and competition within the banking industry.

Customer Segments and Estimated Annual Sales of Sterling Bancorp

Consumers

• Estimated annual sales: $2.5 billion
• Description: Individuals and families who use Sterling Bancorp for their personal banking needs, such as checking and savings accounts, loans, and credit cards.

Small Businesses

• Estimated annual sales: $1.5 billion
• Description: Businesses with annual revenue of less than $10 million that use Sterling Bancorp for their banking needs, such as checking and savings accounts, loans, and lines of credit.

Middle Market Businesses

• Estimated annual sales: $1.0 billion
• Description: Businesses with annual revenue between $10 million and $500 million that use Sterling Bancorp for their banking needs, such as commercial loans, treasury management services, and investment banking services.

Large Corporate Clients

• Estimated annual sales: $0.5 billion
• Description: Corporations with annual revenue exceeding $500 million that use Sterling Bancorp for their banking needs, such as syndicated loans, capital markets transactions, and foreign exchange services.

Nonprofit Organizations

• Estimated annual sales: $0.2 billion
• Description: Nonprofit organizations that use Sterling Bancorp for their banking needs, such as checking and savings accounts, loans, and investment services.

Public Sector

• Estimated annual sales: $0.1 billion
• Description: Government entities that use Sterling Bancorp for their banking needs, such as tax deposits, payroll processing, and investment services.

Total Estimated Annual Sales: $6.0 billion

Additional Insights:

• Sterling Bancorp's consumer segment is the largest segment in terms of both number of customers and revenue.
• The small business segment is a growing segment for Sterling Bancorp, as the company continues to expand its product offerings and services for small businesses.
• Sterling Bancorp is a niche player in the middle market and large corporate segments, but it has strong relationships with a number of large clients in these segments.
• The nonprofit and public sector segments are important segments for Sterling Bancorp, as they provide the company with a stable source of revenue.

Sterling Bancorp's Value Proposition

Sterling Bancorp is a financial services company that provides a comprehensive suite of banking, lending, and wealth management products and services to businesses and individuals in the New York metropolitan area and beyond. The company's value proposition is based on its:

• Strong local presence: Sterling Bancorp has a long history of serving the New York metropolitan area, and its deep understanding of the local market gives it a competitive advantage.
• Comprehensive suite of products and services: Sterling Bancorp offers a wide range of products and services to meet the needs of its customers, including business banking, personal banking, lending, and wealth management.
• Commitment to customer service: Sterling Bancorp is committed to providing excellent customer service, and its team of experienced professionals is dedicated to helping customers achieve their financial goals.

Benefits of Banking with Sterling Bancorp

There are many benefits to banking with Sterling Bancorp, including:

• Convenience: Sterling Bancorp offers a variety of convenient banking options, including online banking, mobile banking, and a network of ATMs.
• Competitive rates: Sterling Bancorp offers competitive rates on all of its products and services.
• Personal service: Sterling Bancorp is a community bank that values personal relationships, and its team of experienced professionals is dedicated to providing excellent customer service.

Conclusion

Sterling Bancorp is a leading financial services company that provides a comprehensive suite of banking, lending, and wealth management products and services to businesses and individuals in the New York metropolitan area and beyond. The company's value proposition is based on its strong local presence, comprehensive suite of products and services, and commitment to customer service.

Credit Risk

• High reliance on commercial real estate (CRE) lending: Sterling Bancorp has a significant exposure to CRE loans, which accounted for 53% of total loans as of June 30, 2022. This concentration poses a risk if the CRE market experiences a downturn.
• Increased risk of non-performing loans (NPLs): The economic impact of the COVID-19 pandemic has led to an increase in NPLs. Sterling Bancorp's NPL ratio was 0.75% as of June 30, 2022, up from 0.30% a year earlier.
• Concentration in certain industries and geographies: Sterling Bancorp has a significant exposure to certain industries, such as hospitality and healthcare, and to certain geographies, such as New York City and South Florida. This concentration increases the risk of losses if specific industries or regions experience economic challenges.

Interest Rate Risk

• High proportion of floating-rate loans: A significant portion of Sterling Bancorp's loan portfolio consists of floating-rate loans, which are sensitive to changes in interest rates. If interest rates rise, the company's net interest margin (NIM) could be adversely affected.
• Mismatch between asset and liability durations: Sterling Bancorp's assets tend to have longer durations than its liabilities, which exposes it to interest rate volatility. If interest rates rise, the company's cost of funds could increase faster than its loan yields, leading to a decline in NIM.

Liquidity Risk

• Dependence on wholesale funding: Sterling Bancorp relies heavily on wholesale funding sources, such as brokered deposits and repurchase agreements. These sources can be volatile and may not be available in times of financial stress.
• Limited deposit base: Sterling Bancorp has a relatively small deposit base compared to its loan portfolio, which increases its reliance on wholesale funding and exposes it to liquidity risks.

Operational Risk

• Cybersecurity threats: Sterling Bancorp, like all financial institutions, faces cybersecurity risks, which could lead to data breaches, financial losses, and reputational damage.
• Compliance risks: Sterling Bancorp must comply with a complex and evolving regulatory environment, including the Dodd-Frank Wall Street Reform and Consumer Protection Act. Non-compliance could lead to penalties, fines, and reputational damage.
• Technology risks: Sterling Bancorp heavily relies on technology for its operations and services. Any disruptions or failures in technology could adversely affect the company's business.

Other Risks

• Economic downturns: Sterling Bancorp is vulnerable to economic downturns, which could lead to increased loan defaults, reduced lending activity, and a decline in fee income.
• Competition: Sterling Bancorp faces intense competition from other financial institutions, including large national banks and smaller community banks. Competition could lead to lower margins and reduced market share.
• Regulatory changes: Changes in regulatory requirements could have a significant impact on Sterling Bancorp's operations and profitability.