Sterling Bancorp, Inc. (NASDAQ:SBT) ("Sterling" or the "Company"), the holding company of Sterling Bank and Trust, F.S.B. (the "Bank"), today reported its unaudited financial results for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights

Net income of $1.2 million, or $0.02 per diluted share
Net interest margin of 3.19%
Non-interest expense of $21.6 million
Provision (recovery) for loan losses of $(4.4) million; ratio of allowance for loan losses to total loans held for investment of 2.70%
Shareholders' equity of $329.6 million
Bank capital ratios continue to be in excess of minimum ratios required to be considered "well-capitalized" with a leverage ratio of 15.88%, a total risk-based capital ratio of 26.60% and a common equity tier one ratio of 25.33%
The Company's consolidated leverage ratio of 14.13%, total risk-based capital ratio of 26.32% and common equity tier one ratio of 22.53% continue to exceed minimum regulatory capital requirements
Total deposits of $2.0 billion
Total gross loans of $1.7 billion
Nonperforming assets decline to $42.2 million; classified and criticized loans decline to $81.3 million
Completed sale of high risk commercial real estate loans with unpaid principal balances of $21.9 million
Advantage Loan Program loans with unpaid principal balances of $35.2 million repurchased
Consent Order with OCC entered on September 27, 2022
June 2019 Formal Agreement with OCC terminated
Shareholder derivative action settlement approved by court

The Company reported net income of $1.2 million, or $0.02 per diluted share, for the quarter ended September 30, 2022, compared to net loss of $(2.2) million, or $(0.04) per diluted share, for the quarter ended June 30, 2022.

During the third quarter, the Bank entered into a Consent Order (the "Consent Order") with the Office of the Comptroller of the Currency (the "OCC"), resolving the OCC's formal investigation relating to the Bank's former residential loan product, marketed as the Advantage Loan Program, and related matters. Under the Consent Order, the Bank has paid a civil money penalty of $6.0 million. The civil money penalty was applied against the Company's previously accrued liability for contingent losses. The Consent Order represents a full and final settlement of the OCC's investigation with respect to the Bank.

In addition, the settlement of the shareholder derivative action received final court approval during the third quarter. The full amount of the attorneys' fees and expenses due under the settlement was paid by the Company's insurance carriers under applicable insurance policies subsequent to September 30, 2022.

"Once more this quarter there are a lot of moving parts in our results, but the main headline is continued and significant improvements in virtually all phases of the Company's operations. Most importantly, as recently disclosed, Sterling and the OCC entered into a Consent Order wherein the Bank agreed to a $6.0 million civil money penalty. In that context and in recognition of the successful work in addressing the many regulatory issues and violations facing the Bank, the Formal Agreement from 2019 was lifted. These represent major milestones for the Bank and are the product of our aggressive approach to remediation and compliance.

"In our financial results, the very uncomfortable level of classified assets and nonperforming loans from two years ago have now been reduced to much more modest and manageable levels. We sold the last remaining bucket of high risk commercial real estate loans to remove that uncertainty and successfully worked out several more. Our margins have again improved with higher market interest rates however the cost of funding liabilities, notably our variable rate subordinated notes have likewise increased.

"We remain under the investigation of the DOJ and SEC. As I have stated previously, we have very little visibility into their decision making timetable. This remains a significant uncertainty and we continue to impress upon the importance of timely resolution," said Thomas M. O'Brien, Chairman, President and Chief Executive Officer.

Balance Sheet

Total Assets – Total assets of $2.4 billion at September 30, 2022 decreased $55.9 million, or 2%, from $2.5 billion at June 30, 2022.

Cash and due from banks increased $67.2 million, or 24%, to $352.4 million at September 30, 2022 compared to $285.2 million at June 30, 2022. Investment securities, which we consider part of our liquid assets, decreased $29.1 million, or 8%, to $353.2 million at September 30, 2022 compared to $382.3 million at June 30, 2022.

Total gross loans held for investment of $1.7 billion at September 30, 2022 declined $96.5 million, or 5%, from $1.8 billion at June 30, 2022 as loan payoffs and loan sales exceeded originations and loan repurchases during the third quarter.

Total Deposits – Total deposits of $2.0 billion at September 30, 2022 remained relatively consistent showing a slight decline from June 30, 2022. Money market, savings and NOW deposits decreased $128.9 million, or 10%, from June 30, 2022, which was partially offset by an increase in time deposits of $88.0 million, or 13%. Noninterest-bearing deposits decreased $12.3 million, or 15%, to $70.1 million at September 30, 2022 compared to $82.4 million at June 30, 2022.

Capital – Total shareholders' equity decreased $5.7 million, or 2%, to $329.6 million at September 30, 2022 compared to $335.3 million at June 30, 2022. The decline in shareholders' equity is primarily due to an increase in accumulated other comprehensive loss of $7.2 million due to increased unrealized losses on our investment securities portfolio. These unrealized losses on our investment portfolio are primarily attributable to changes in market value due to the current rising interest rate environment and are not realized in our consolidated statement of operations since the Bank has both the intent and ability to hold these investment securities until maturity or the price recovers.

The Bank exceeded all regulatory capital requirements required to be considered "well-capitalized" at September 30, 2022, and the Company exceeded all applicable minimum regulatory capital requirements as of such date, as summarized in the following tables:

Bank Capital	To Be Well Capitalized			Bank Actual at September 30, 2022
Total adjusted capital to risk-weighted assets		10.00	%		26.60	%
Tier 1 (core) capital to risk-weighted assets		8.00	%		25.33	%
Common Equity Tier 1 (CET1)		6.50	%		25.33	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)		5.00	%		15.88	%

Company Capital	Minimum Requirements			Company Actual at September 30, 2022
Total adjusted capital to risk-weighted assets		8.00	%		26.32	%
Tier 1 (core) capital to risk-weighted assets		6.00	%		22.53	%
Common Equity Tier 1 (CET1)		4.50	%		22.53	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)		4.00	%		14.13	%

Asset Quality and Provision (Recovery) for Loan Losses – Nonperforming assets at September 30, 2022 totaled $42.2 million, or 1.72% of total assets, compared to $55.0 million, or 2.20% of total assets, at June 30, 2022. Nonperforming assets at September 30, 2022 included $35.9 million of nonperforming loans held for investment, $3.7 million of nonaccrual loans held for sale and $2.6 million of troubled debt restructurings. Nonperforming assets at June 30, 2022 included $48.4 million of nonperforming loans held for investment, $4.0 million of nonaccrual loans held for sale and $2.6 million of troubled debt restructurings. The decrease in nonperforming assets is largely due to a $7.1 million decrease in nonperforming residential mortgages and a $5.8 million decrease in nonperforming construction loans. Gross loans held for investment delinquent 30 days or more decreased during the third quarter of 2022 to $60.0 million, or 3.57% of gross loans held for investment, from $72.4 million, or 4.07% of gross loans held for investment, at June 30, 2022. Classified and criticized loans held for investment decreased $23.8 million, or 23%, from $105.1 million at June 30, 2022 to $81.3 million at September 30, 2022, largely due to the sale of higher risk commercial real estate loans during the third quarter.

Reflecting the overall improvement in asset quality, a recovery for loan losses of $4.4 million was recorded for the third quarter of 2022 compared to a recovery for loan losses of $1.1 million for the second quarter of 2022. The allowance for loan losses decreased $6.4 million, or 12%, to $45.4 million at September 30, 2022, or 2.70% of total loans held for investment, from $51.8 million, or 2.91% of total loans held for investment, at June 30, 2022.

Net charge offs during the third quarter of 2022 were $2.0 million compared to net recoveries of $(0.4) million in the second quarter of 2022. Net charge offs in the third quarter of 2022 included $4.1 million in write-downs of our recorded investment in higher risk commercial real estate loans held in our portfolio with an unpaid principal balance of $21.9 million, which were subsequently sold for cash proceeds of $17.8 million during the quarter.

"As noted earlier, asset quality metrics continue to improve. Our delinquent loans at this time are entirely residential loans and we have no commercial delinquencies or nonaccruals," said Mr. O'Brien.

Results of Operations

Net Interest Income and Net Interest Margin – Net interest income of $19.5 million for the third quarter of 2022 was relatively unchanged from the second quarter of 2022. Although net interest income was relatively unchanged, both interest income on interest-earning assets and interest expense on interest-bearing liabilities increased in the third quarter when compared to the prior quarter due primarily from the effects of an increasing interest rate environment. The impact of the increase in interest rates was offset by a decline in both average interest-earning assets and average interest-bearing liabilities of $192.7 million and $213.1 million, respectively. The decrease in average interest-earning assets was primarily due to a decline in the average balance of our loan portfolio of $112.4 million, or 6%, from $1.8 billion in the second quarter of 2022 to $1.7 billion in the third quarter of 2022. The decline in average interest-bearing liabilities was primarily driven by the decrease in average interest-bearing deposits of $153.0 million in the third quarter of 2022 from $2.0 billion in the second quarter of 2022.

The net interest margin of 3.19% for the third quarter of 2022 increased compared to 2.95% for the second quarter of 2022. The rise in our net interest margin in the third quarter of 2022 reflects an increase in the average yield on interest-earning assets of 59 basis points while the average cost of interest-bearing liabilities increased 43 basis points.

Non-Interest Income – Non-interest income for the third quarter of 2022 decreased $0.4 million to $(0.4) million from the second quarter of 2022. The decrease is partially attributable to the net servicing loss incurred with the write-off of $0.5 million in mortgage servicing rights related to the repurchase of Advantage Loan Program loans during the third quarter compared to a write-off of $0.4 million in the second quarter related to the repurchase of Advantage Loan Program loans. Additionally, income earned on the cash surrender value of bank-owned life insurance ("BOLI") decreased $0.2 million in the third quarter due to the surrender of certain BOLI policies in the second quarter of 2022.

Non-Interest Expense – Non-interest expense of $21.6 million for the third quarter of 2022 increased $2.1 million, or 11%, from $19.5 million for the second quarter of 2022. The increase is primarily due to an increase in salaries and employee benefits expense of $3.8 million, or 68%. The second quarter of 2022 included a reduction in salaries and employee benefits expense of $4.0 million primarily related to the reversal of associated liabilities upon surrender of a large split-dollar life program and a few smaller BOLI policies. The second quarter of 2022 also reflected an increase in salaries and employee benefits expense of $0.4 million for separation costs paid to terminated mortgage origination employees. Additionally, we experienced a reduction in salaries and benefits expense in the third quarter of 2022 of $0.9 million as a result of the outsourcing of our residential lending service for mortgage loan production which occurred in the second quarter of 2022.

Additionally, other non-interest expense in the second quarter of 2022 includes $1.3 million in additional taxes related to the surrender of the split-dollar life program and certain BOLI policies. Other non-interest expenses for the third quarter of 2022 included a $1.6 million loss to record the fair value discount on $35.2 million of Advantage Loan Program loans repurchased in the third quarter of 2022, compared to $0.7 million fair value discount on $30.4 million of Advantage Loan Program loans repurchased second quarter of 2022. Non-interest expense for the third quarter of 2022 also decreased $1.3 million in professional fees from the second quarter of 2022 primarily made up of direct and third-party legal expenses related to the government investigations.

Income Tax Expense – Income tax expense was $0.7 million for the third quarter of 2022 compared to $3.3 million in the prior quarter on income before income taxes of $1.9 million and $1.1 million, respectively. This decrease is largely related to the surrender of certain split-dollar and BOLI policies during the second quarter, which resulted in the life-to-date increase in the cash surrender value of the policies of $13.1 million being treated as taxable income that was previously nontaxable.

Mr. O'Brien commented, "Profitability remains heavily constrained by fluctuating legal and consultant expenses related to the investigations and ultimate resolution of the ill-fated Advantage Loan Program. We believe that such expenses will begin to moderate in 2023 but the timing and magnitude remain inexorably linked to the conclusion of the DOJ investigation and ultimate settlement."

Conference Call and Webcast

Management will host a conference call on Monday, October 31, 2022 at 11:00 a.m. Eastern Time to discuss the Company's unaudited financial results for the quarter ended September 30, 2022. The conference call number for U.S. participants is (833) 535-2201 and the conference call number for participants outside the United States is (412) 902-6744. Additionally, interested parties can listen to a live webcast of the call in the "Investor Relations" section of the Company's website at www.sterlingbank.com. An archived version of the webcast will be available in the same location shortly after the live call has ended.

A replay of the conference call may be accessed through November 7, 2022 by dialing (877) 344-7529, using conference ID number 1874009.

About Sterling Bancorp, Inc.

Sterling Bancorp, Inc. is a unitary thrift holding company. Its wholly owned subsidiary, Sterling Bank and Trust, F.S.B., has primary branch operations in San Francisco and Los Angeles, California and New York City. Sterling offers a range of loan products to the residential and commercial markets, as well as retail and business banking services. Sterling also has an operations center and a branch in Southfield, Michigan. For additional information, please visit the Company's website at http://www.sterlingbank.com.

Forward-Looking Statements

This press release contains certain statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding the Company's plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "might," "should," "could," "predict," "potential," "believe," "expect," "attribute," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "goal," "target," "outlook," "aim," "would" and "annualized," or the negative versions of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and they are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. The risks, uncertainties and other factors detailed from time to time in our public filings, including those included in the disclosures under the headings "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2022, subsequent periodic reports and future periodic reports, could affect future results and events, causing those results and events to differ materially from those views expressed or implied in the Company's forward-looking statements. Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those projected in, or implied by, such forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. The Company disclaims any obligation to update, revise, or correct any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise.


Sterling Bancorp, Inc. Consolidated Financial Highlights (Unaudited)

	At and for the Three Months Ended
(dollars in thousands, except per share data)	September 30, 2022			June 30, 2022			September 30, 2021
Net income (loss)	$	1,176		$	(2,197	)	$	9,557
Income (loss) per share, diluted	$	0.02		$	(0.04	)	$	0.19
Net interest income	$	19,539		$	19,470		$	22,637
Net interest margin		3.19	%		2.95	%		2.83	%
Non-interest income	$	(357	)	$	45		$	2,058
Non-interest expense	$	21,621		$	19,494		$	11,076
Loans, net of allowance for loan losses	$	1,636,266		$	1,726,366		$	2,168,544
Total deposits⁽¹⁾	$	1,951,014		$	2,004,247		$	2,348,179
Asset Quality
Nonperforming loans	$	35,879		$	48,385		$	77,397
Allowance for loan losses to total loans		2.70	%		2.91	%		3.14	%
Allowance for loan losses to nonaccrual loans		127	%		107	%		91	%
Nonaccrual loans to total loans outstanding		2.13	%		2.72	%		3.46	%
Net charge offs (recoveries) during the period to average loans outstanding during the period		0.12	%		(0.02	)%		0.04	%
Provision (recovery) for loan losses	$	(4,357	)	$	(1,109	)	$	397
Net charge offs (recoveries)	$	2,047		$	(420	)	$	828
Performance Ratios
Return on average assets		0.19	%		(0.33	)%		1.18	%
Return on average shareholders' equity		1.39	%		(2.57	)%		11.50	%
Efficiency ratio ⁽²⁾		112.72	%		99.89	%		44.85	%
Yield on average interest-earning assets		4.06	%		3.47	%		3.50	%
Cost of average interest-bearing liabilities		1.05	%		0.62	%		0.76	%
Net interest spread		3.01	%		2.85	%		2.74	%
Capital Ratios ⁽³⁾
Regulatory and Other Capital Ratios— Consolidated:
Total adjusted capital to risk-weighted assets		26.32	%		24.70	%		19.51	%
Tier 1 (core) capital to risk-weighted assets		22.53	%		21.06	%		15.78	%
Common Equity Tier 1 (CET1)		22.53	%		21.06	%		15.78	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)		14.13	%		12.91	%		10.32	%

Regulatory and Other Capital Ratios—Bank:
Total adjusted capital to risk-weighted assets		26.60	%		24.93	%		19.44	%
Tier 1 (core) capital to risk-weighted assets		25.33	%		23.65	%		18.16	%
Common Equity Tier 1 (CET1)		25.33	%		23.65	%		18.16	%
Tier 1 (core) capital to adjusted tangible assets (leverage ratio)		15.88	%		14.44	%		11.85	%

⁽¹⁾ Refer to note to the condensed consolidated balance sheets.

⁽²⁾ Efficiency Ratio is computed as the ratio of non-interest expense divided by the sum of net interest income and non-interest income.

⁽³⁾ In order to provide a comparable trend analysis for the Bank's and the Company's risk based capital ratios applying the 100% risk weight to Advantage Loan Program loans, the table above presents the regulatory capital ratios applying the 100% risk weight at September 30, 2021.


Sterling Bancorp, Inc. Condensed Consolidated Balance Sheets (Unaudited)

(dollars in thousands)	September 30, 2022			June 30, 2022			% change			December 31, 2021			% change			September 30, 2021		% change
Assets
Cash and due from banks	$	352,404		$	285,165			24	%	$	411,676			(14	)%	$	609,412		(42	)%
Interest-bearing time deposits with other banks		1,183			1,183			0	%		1,183			0	%		805		47	%
Investment securities		353,219			382,309			(8	)%		313,879			13	%		204,689		73	%
Loans held for sale		8,833			8,964			(1	)%		64,987			(86	)%		12,744		(31	)%
Loans, net of allowance for loan losses of $45,362, $51,766, $56,548 and $70,238		1,636,266			1,726,366			(5	)%		1,956,266			(16	)%		2,168,544		(25	)%
Accrued interest receivable		7,061			6,721			5	%		7,696			(8	)%		8,355		(15	)%
Mortgage servicing rights, net		1,842			2,453			(25	)%		2,722			(32	)%		2,873		(36	)%
Leasehold improvements and equipment, net		6,585			6,848			(4	)%		7,421			(11	)%		8,931		(26	)%
Operating lease right-of-use assets		15,467			16,332			(5	)%		18,184			(15	)%		18,889		(18	)%
Federal Home Loan Bank stock, at cost		20,288			20,288			0	%		22,950			(12	)%		22,950		(12	)%
Cash surrender value of bank-owned life insurance		8,448			8,396			1	%		33,033			(74	)%		32,899		(74	)%
Deferred tax asset, net		23,907			22,028			9	%		21,426			12	%		23,379		2	%
Other assets		12,401			16,767			(26	)%		15,407			(20	)%		24,494		(49	)%
Total assets	$	2,447,904		$	2,503,820			(2	)%	$	2,876,830			(15	)%	$	3,138,964		(22	)%

Liabilities
Noninterest-bearing deposits	$	70,063		$	82,387			(15	)%	$	63,760			10	%	$	65,456		7	%
Interest-bearing deposits⁽¹⁾		1,880,951			1,921,860			(2	)%		2,197,975			(14	)%		2,282,723		(18	)%
Total deposits		1,951,014			2,004,247			(3	)%		2,261,735			(14	)%		2,348,179		(17	)%
Federal Home Loan Bank borrowings		50,000			50,000			0	%		150,000			(67	)%		307,000		(84	)%
Subordinated notes, net		65,290			65,308			(0	)%		65,343			(0	)%		65,360		(0	)%
Operating lease liabilities		16,664			17,540			(5	)%		19,400			(14	)%		20,106		(17	)%
Accrued expenses and other liabilities⁽¹⁾		35,335			31,393			13	%		36,725			(4	)%		61,754		(43	)%
Total liabilities		2,118,303			2,168,488			(2	)%		2,533,203			(16	)%		2,802,399		(24	)%

Shareholders' Equity
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding		—			—			—			—			—			—		—
Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 50,800,012 shares at September 30, 2022, 50,818,212 shares at June 30, 2022, 50,460,932 shares at December 31, 2021 and 50,475,064 shares at September 30, 2021		83,295			83,295			0	%		82,157			1	%		82,157		1	%
Additional paid-in capital		14,560			14,313			2	%		14,124			3	%		13,992		4	%
Retained earnings		252,482			251,306			0	%		248,243			2	%		240,187		5	%
Accumulated other comprehensive income (loss)		(20,736	)		(13,582	)		(53	)%		(897	)		N/M			229		N/M
Total shareholders' equity		329,601			335,332			(2	)%		343,627			(4	)%		336,565		(2	)%
Total liabilities and shareholders' equity	$	2,447,904		$	2,503,820			(2	)%	$	2,876,830			(15	)%	$	3,138,964		(22	)%

N/M - Not Meaningful

⁽¹⁾Certain prior period amounts have been reclassified to conform with the current period presentation. The Company has reclassified accrued interest on outstanding time deposits of $8,684 from accrued expenses and other liabilities to interest-bearing deposits in the condensed consolidated balance sheet at September 30, 2021.


Sterling Bancorp, Inc. Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended															Nine Months Ended
(dollars in thousands, except per share amounts)	September 30, 2022			June 30, 2022			% change			September 30, 2021			% change			September 30, 2022			September 30, 2021			% change
Interest income
Interest and fees on loans	$	20,975		$	20,746			1	%	$	27,348			(23	)%	$	65,589		$	88,716			(26	)%
Interest and dividends on investment securities and restricted stock		1,945			1,353			44	%		375			N/M			4,133			1,150			N/M
Other interest		1,925			791			N/M			253			N/M			2,931			743			N/M
Total interest income		24,845			22,890			9	%		27,976			(11	)%		72,653			90,609			(20	)%
Interest expense
Interest on deposits		3,724			2,016			85	%		3,541			5	%		8,070			15,479			(48	)%
Interest on Federal Home Loan Bank borrowings		253			314			(19	)%		826			(69	)%		919			2,511			(63	)%
Interest on subordinated notes		1,329			1,090			22	%		972			37	%		3,383			3,157			7	%
Total interest expense		5,306			3,420			55	%		5,339			(1	)%		12,372			21,147			(41	)%
Net interest income		19,539			19,470			0	%		22,637			(14	)%		60,281			69,462			(13	)%
Provision (recovery) for loan losses		(4,357	)		(1,109	)		N/M			397			N/M			(9,755	)		(2,146	)		N/M
Net interest income after provision (recovery) for loan losses		23,896			20,579			16	%		22,240			7	%		70,036			71,608			(2	)%
Non-interest income
Service charges and fees		124			105			18	%		120			3	%		351			423			(17	)%
Gain on sale of mortgage loans held for sale		—			3			(100	)%		151			(100	)%		200			619			(68	)%
Unrealized losses on equity securities		(184	)		(170	)		(8	)%		(24	)		N/M			(590	)		(99	)		N/M
Gain on sale of branch office		—			—			—			1,417			N/M			—			1,417			N/M
Net servicing loss		(384	)		(177	)		N/M			(31	)		N/M			(118	)		(1,369	)		N/M
Income on cash surrender value of bank-owned life insurance		87			255			(66	)%		325			(73	)%		670			960			(30	)%
Other		—			29			(100	)%		100			(100	)%		586			291			N/M
Total non-interest income		(357	)		45			N/M			2,058			N/M			1,099			2,242			(51	)%
Non-interest expense
Salaries and employee benefits		9,336			5,569			68	%		2,774			N/M			24,522			19,300			27	%
Occupancy and equipment		2,112			2,187			(3	)%		2,395			(12	)%		6,441			6,840			(6	)%
Professional fees		5,756			7,066			(19	)%		4,024			43	%		17,979			18,500			(3	)%
FDIC assessments		316			346			(9	)%		417			(24	)%		1,031			1,636			(37	)%
Data processing		725			762			(5	)%		403			80	%		2,292			1,189			93	%
Net recovery of mortgage repurchase liability		(145	)		(312	)		54	%		(298	)		51	%		(670	)		(963	)		30	%
Other		3,521			3,876			N/M			1,361			N/M			8,943			5,852			53	%
Total non-interest expense		21,621			19,494			11	%		11,076			95	%		60,538			52,354			16	%
Income before income taxes		1,918			1,130			70	%		13,222			(85	)%		10,597			21,496			(51	)%
Income tax expense		742			3,327			(78	)%		3,665			(80	)%		6,358			6,162			3	%
Net income (loss)	$	1,176		$	(2,197	)		N/M		$	9,557			N/M		$	4,239		$	15,334			(72	)%

Income (loss) per share, basic and diluted	$	0.02		$	(0.04	)				$	0.19					$	0.08		$	0.31
Weighted average common shares outstanding:
Basic		50,400,412			50,386,856						50,167,295						50,326,951			50,010,341
Diluted		50,572,931			50,386,856						50,262,686						50,523,076			50,079,931

N/M - Not Meaningful


Sterling Bancorp, Inc. Yield Analysis and Net Interest Income (Unaudited)

	Three Months Ended
	September 30, 2022							June 30, 2022							September 30, 2021
(dollars in thousands)	Average Balance		Interest		Average Yield/Rate			Average Balance		Interest		Average Yield Rate			Average Balance		Interest		Average Yield/Rate
Interest-earning assets
Loans⁽¹⁾
Residential real estate and other consumer	$	1,457,171	$	17,310		4.75	%	$	1,554,077	$	17,310		4.46	%	$	1,900,611	$	22,002		4.63	%
Commercial real estate		214,453		2,458		4.58	%		221,435		2,547		4.60	%		285,055		3,422		4.80	%
Construction		52,843		1,190		9.01	%		62,354		883		5.66	%		135,292		1,896		5.61	%
Commercial lines of credit		1,404		17		4.84	%		355		6		6.76	%		1,947		28		5.75	%
Total loans		1,725,871		20,975		4.86	%		1,838,221		20,746		4.51	%		2,322,905		27,348		4.71	%
Securities, includes restricted stock⁽²⁾		394,503		1,945		1.97	%		396,315		1,353		1.37	%		213,945		375		0.70	%
Other interest-earning assets		328,177		1,925		2.35	%		406,740		791		0.78	%		664,747		253		0.15	%
Total interest-earning assets		2,448,551		24,845		4.06	%		2,641,276		22,890		3.47	%		3,201,597		27,976		3.50	%
Noninterest-earning assets
Cash and due from banks		4,083							3,811							7,376
Other assets		20,238							46,390							41,360
Total assets	$	2,472,872						$	2,691,477						$	3,250,333
Interest-bearing liabilities
Money market, savings and NOW	$	1,184,601	$	2,053		0.69	%	$	1,288,796	$	756		0.24	%	$	1,329,832	$	771		0.23	%
Time deposits⁽³⁾		711,184		1,671		0.93	%		760,017		1,260		0.66	%		1,075,598		2,770		1.02	%
Total interest-bearing deposits		1,895,785		3,724		0.78	%		2,048,813		2,016		0.39	%		2,405,430		3,541		0.58	%
FHLB borrowings		50,380		253		1.97	%		110,440		314		1.12	%		307,733		826		1.06	%
Subordinated notes, net		65,301		1,329		7.96	%		65,319		1,090		6.60	%		65,372		972		5.95	%
Total borrowings		115,681		1,582		5.35	%		175,759		1,404		3.16	%		373,105		1,798		1.91	%
Total interest-bearing liabilities		2,011,466		5,306		1.05	%		2,224,572		3,420		0.62	%		2,778,535		5,339		0.76	%
Noninterest-bearing liabilities
Demand deposits		74,550							72,496							66,566
Other liabilities⁽³⁾		50,476							52,075							72,694
Shareholders' equity		336,380							342,334							332,538
Total liabilities and shareholders' equity	$	2,472,872						$	2,691,477						$	3,250,333
Net interest income and spread⁽²⁾			$	19,539		3.01	%			$	19,470		2.85	%			$	22,637		2.74	%
Net interest margin⁽²⁾						3.19	%						2.95	%						2.83	%

⁽¹⁾ Nonaccrual loans are included in the respective average loan balances. Income, if any, on such loans is recognized on a cash basis.

⁽²⁾ Interest income does not include taxable equivalence adjustments.

⁽³⁾ Certain prior period amounts have been reclassified to conform with the current period presentation. The Company has reclassified accrued interest on outstanding time deposits from accrued expenses and other liabilities to interest-bearing deposits in the consolidated balance sheets at September 30, 2021.


Sterling Bancorp, Inc. Yield Analysis and Net Interest Income (Unaudited)

	Nine Months Ended
	September 30, 2022							September 30, 2021
(dollars in thousands)	Average Balance		Interest		Average Yield/Rate			Average Balance		Interest		Average Yield/Rate
Interest-earning assets
Loans⁽¹⁾
Residential real estate and other consumer	$	1,556,569	$	52,898		4.53	%	$	1,955,375	$	70,392		4.80	%
Commercial real estate		227,524		8,441		4.95	%		266,763		10,049		5.02	%
Construction		70,027		4,222		8.04	%		168,382		8,096		6.41	%
Commercial lines of credit		707		28		5.28	%		3,295		179		7.24	%
Total loans		1,854,827		65,589		4.71	%		2,393,815		88,716		4.94	%
Securities, includes restricted stock⁽²⁾		380,485		4,133		1.45	%		265,545		1,150		0.58	%
Other interest-earning assets		395,400		2,931		0.99	%		838,223		743		0.12	%
Total interest-earning assets		2,630,712		72,653		3.68	%		3,497,583		90,609		3.45	%
Noninterest-earning assets
Cash and due from banks		3,848							7,472
Other assets		35,269							42,458
Total assets	$	2,669,829						$	3,547,513
Interest-bearing liabilities
Money market, savings and NOW	$	1,260,953	$	3,516		0.37	%	$	1,352,198	$	2,513		0.25	%
Time deposits⁽³⁾		777,110		4,554		0.78	%		1,350,172		12,966		1.28	%
Total interest-bearing deposits		2,038,063		8,070		0.53	%		2,702,370		15,479		0.77	%
FHLB borrowings		103,242		919		1.19	%		314,544		2,511		1.05	%
Subordinated notes, net		65,319		3,383		6.83	%		65,372		3,157		6.44	%
Total borrowings		168,561		4,302		3.37	%		379,916		5,668		1.96	%
Total interest-bearing liabilities		2,206,624		12,372		0.75	%		3,082,286		21,147		0.92	%
Noninterest-bearing liabilities
Demand deposits		70,427							62,131
Other liabilities⁽³⁾		51,314							75,162
Shareholders' equity		341,464							327,934
Total liabilities and shareholders' equity	$	2,669,829						$	3,547,513
Net interest income and spread⁽²⁾			$	60,281		2.93	%			$	69,462		2.53	%
Net interest margin⁽²⁾						3.06	%						2.65	%

⁽¹⁾ Nonaccrual loans are included in the respective average loan balances. Income, if any, on such loans is recognized on a cash basis.

⁽²⁾ Interest income does not include taxable equivalence adjustments.


Sterling Bancorp, Inc. Loan Composition (Unaudited)

(dollars in thousands)	September 30, 2022			June 30, 2022			% change			December 31, 2021			% change			September 30, 2021			% change
Residential real estate	$	1,430,472		$	1,506,852			(5	)%	$	1,704,231			(16	)%	$	1,818,633			(21	)%
Commercial real estate		199,446			214,494			(7	)%		201,240			(1	)%		291,649			(32	)%
Construction		50,320			55,150			(9	)%		106,759			(53	)%		126,571			(60	)%
Commercial lines of credit		1,389			1,418			(2	)%		363			N/M			1,923			(28	)%
Other consumer		1			218			N/M			221			N/M			6			N/M
Total loans held for investment		1,681,628			1,778,132			(5	)%		2,012,814			(16	)%		2,238,782			(25	)%
Less: allowance for loan losses		(45,362	)		(51,766	)		(12	)%		(56,548	)		(20	)%		(70,238	)		(35	)%
Loans, net	$	1,636,266		$	1,726,366			(5	)%	$	1,956,266			(16	)%	$	2,168,544			(25	)%

Loans held for sale	$	8,833		$	8,964			(1	)%	$	64,987			(86	)%	$	12,744			(31	)%
Total gross loans	$	1,690,461		$	1,787,096			(5	)%	$	2,077,801			(19	)%	$	2,251,526			(25	)%

N/M - Not Meaningful


Sterling Bancorp, Inc. Allowance for Loan Losses (Unaudited)

	Three Months Ended
(dollars in thousands)	September 30, 2022			June 30, 2022			December 31, 2021			September 30, 2021
Balance at beginning of period	$	51,766		$	52,455		$	70,238		$	70,669
Provision (recovery) for loan losses		(4,357	)		(1,109	)		(1,625	)		397
Charge offs		(4,064	)		(197	)		(12,415	)		(1,965	)
Recoveries		2,017			617			350			1,137
Balance at end of period	$	45,362		$	51,766		$	56,548		$	70,238


Sterling Bancorp, Inc. Deposit Composition (Unaudited)

(dollars in thousands)	September 30, 2022		June 30, 2022		% change			December 31, 2021		% change			September 30, 2021		% change
Noninterest-bearing deposits	$	70,063	$	82,387		(15	)%	$	63,760		10	%	$	65,456		7	%
Money Market, Savings and NOW		1,123,375		1,252,279		(10	)%		1,306,155		(14	)%		1,312,348		(14	)%
Time deposits⁽¹⁾		757,576		669,581		13	%		891,820		(15	)%		970,375		(22	)%
Total deposits	$	1,951,014	$	2,004,247		(3	)%	$	2,261,735		(14	)%	$	2,348,179		(17	)%

⁽¹⁾ The Company has included accrued interest on outstanding time deposits of $8,684 in interest-bearing deposits at September 30, 2021 to conform to the September 30, 2022, June 30, 2022, and December 31, 2021 presentation.

Sterling Bancorp, Inc.

Credit Quality Data (Unaudited)

At and for the Three Months Ended

(dollars in thousands)

September 30,

2022

June 30,

2022

December 31,

2021

September 30,

2021

Nonaccrual loans⁽¹⁾:

Residential real estate

35,843

42,567

Sterling Bancorp Reports Third Quarter 2022 Financial Results