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, 2023.

Third Quarter 2023 Highlights

Net income of $0.3 million, or $0.01 per diluted share
Net interest margin of 2.62%
Recorded provision for (recovery of) credit losses of $(1.9) million; ratio of allowance for credit losses to total loans of 2.42%
Nonperforming assets of $6.2 million, 0.25% of total assets
Total gross loans of $1.4 billion
Total deposits of $2.0 billion
Non-interest expense of $17.7 million
Shareholders' equity of $316.1 million
Company's consolidated and Bank's leverage ratio of 13.41% and 12.93%, respectively
Completed redemption of all subordinated notes with an aggregate outstanding principal balance of $65.0 million

The Company reported net income of $0.3 million, or $0.01 per diluted share, for the quarter ended September 30, 2023, compared to net income of $2.5 million, or $0.05 per diluted share, for the quarter ended June 30, 2023. The decrease in our net income for the quarter ended September 30, 2023 is primarily attributable to a decrease in our recovery of credit losses, the absence of any gains on the sale of loans during the quarter, and an increase in our professional fees. As previously disclosed, we have engaged both a consulting firm and an investment bank to help us develop a comprehensive range of viable strategic options available to us. The new plan will be prepared in light of our election to be a "covered savings association" under applicable law, which became effective this quarter and generally allows us to operate as a commercial bank without the constraints applicable to a thrift institution. We expect these engagements may, among other alternatives, consider the build-out of our presence in California and the relocation of certain operational and executive oversight functions. In that scenario, we expect that repositioning the Bank in this fashion will take significant time and expense.

Thomas M. O'Brien, Chairman, President, and Chief Executive Officer commented:

"Sterling's third quarter reflects the lingering impacts from the long running government investigations. We continue to bear expenses from certain indemnified individuals who are responding to government inquiries. In this quarter, those expenses were approximately $1.7 million. While we anticipate receiving insurance reimbursements for certain prior invoices, our directors and officers insurance was ultimately exhausted during this quarter, and we do not expect any future defense costs to be covered by insurance.

Margins remain tight, and we anticipate that continued upward pressure on interest rates and deposit prices will not likely improve in the near-term. I believe the most prudent course of action for us, at this time, remains protecting our strengths, namely: strong capital, strong liquidity and solid credit quality. There continues to be some ominous signs in certain real estate sectors and geographies. We believe that we have positioned Sterling well to confront those challenges should conditions deteriorate. Nonetheless, the capital markets remain very cautious with many smaller and regional banks trading at discounts to tangible book value."

Balance Sheet

Total Assets – Total assets were $2.4 billion at September 30, 2023, reflecting a decrease of $85.3 million, or 3%, from $2.5 billion at June 30, 2023.

Cash and due from banks decreased $91.8 million, or 14%, to $563.6 million at September 30, 2023 compared to $655.4 million at June 30, 2023. In the third quarter of 2023, we made cash payments of $66.8 million to redeem the subordinated notes including accrued interest and $27.2 million as restitution for the benefit of non-insider victim shareholders pursuant to the Company's Plea Agreement with the United States Department of Justice (the "DOJ"). The Plea Agreement was approved by the United States District Court for the Eastern District of Michigan in the third quarter of 2023, which resolution releases the Company, as well as the Bank, from further prosecution for securities fraud and underlying mortgage fraud in the Advantage Loan Program.

Debt securities, all of which are available for sale, which we consider part of our liquid assets, were $398.3 million at September 30, 2023 compared to $334.5 million at June 30, 2023, an increase of $63.8 million, or 19%. During the third quarter of 2023, the Bank purchased $9.0 million of capital stock of the Federal Reserve Bank of Chicago in connection with becoming a member of the Federal Reserve System.

Total gross loans held for investment of $1.4 billion at September 30, 2023 declined $68.7 million, or 5%, from $1.5 billion at June 30, 2023.

Total Deposits – Total deposits were $2.0 billion at September 30, 2023, virtually unchanged from June 30, 2023. Money market, savings and NOW deposits were $1.1 billion, an increase of $112.3 million, or 11%, from June 30, 2023. Time deposits were $872.1 million, a decrease of $109.2 million, or 11%, compared to $981.3 million at June 30, 2023. Noninterest-bearing deposits were $40.8 million and $44.8 million at September 30, 2023 and June 30, 2023, respectively. Total estimated uninsured deposits to total deposits were 21.4%, 24.2%, and 20.8% at September 30, 2023, June 30, 2023, and December 31, 2022, respectively. Our current strategy is to continue to offer market interest rates on our deposit products to maintain our existing customer base and our liquidity position.

Capital – Total shareholders' equity was $316.1 million at September 30, 2023 compared to $317.7 million at June 30, 2023. The decrease in shareholders' equity is primarily attributable to a $(2.7) million increase in the unrealized loss on our investment securities portfolio included in accumulated other comprehensive loss, partially offset by $0.8 million of stock-based compensation expense and $0.3 million of net income in the present quarter.

The Company and the Bank elected to opt into the Community Bank Leverage Ratio framework, effective January 1, 2023. As such, each of the Company and the Bank is required to maintain a Tier 1 leverage ratio of greater than 9.0% to be considered to have satisfied the minimum regulatory capital requirements as well as the capital ratio requirements to be considered "well capitalized" under applicable prompt corrective action requirements. At September 30, 2023, the Company's consolidated and the Bank's leverage ratio were 13.41% and 12.93%, respectively.

Asset Quality and Recovery of Credit Losses – A recovery of credit losses of $(1.9) million was recorded for the third quarter of 2023 compared to a recovery of credit losses of $(2.9) million for the second quarter of 2023. The recovery of credit losses during the third quarter reflects the decline in our loan portfolio over the period. In addition, we moderated the severe economic forecast component of our economic outlook. The allowance for credit losses was $34.3 million at September 30, 2023, or 2.42% of total loans held for investment, compared to $36.2 million, or 2.43% of total loans held for investment, at June 30, 2023.

Recoveries during the third and second quarter of 2023 were $(1) thousand and $(402) thousand, respectively, with no charge offs in either quarter.

Nonperforming assets at September 30, 2023 totaled $6.2 million, or 0.25% of total assets, compared to $2.1 million, or 0.08% of total assets, at June 30, 2023 due to an increase of $3.0 million in nonaccrual residential real estate loans and a $1.1 million matured construction loan, which was extended subsequent to September 30, 2023.

Results of Operations

Net Interest Income and Net Interest Margin – Net interest income for the third quarter of 2023 was $16.0 million compared to $16.2 million for the second quarter of 2023. The decrease in net interest income during the third quarter of 2023 compared to the prior quarter was primarily due to an increase in interest expense on our average balance of interest-bearing deposits since the average rate paid during the third quarter of 2023 increased 50 basis points as deposits continued to reprice upward in the prevailing high interest rate environment. The impact of the increased rates on deposits was partially offset by a decrease in interest expense on the subordinated notes of $1.5 million due to the redemption of the notes early in the third quarter of 2023. Interest income earned on our average balance of interest-bearing assets increased 24 basis points during the third quarter of 2023 from the prior quarter.

The net interest margin of 2.62% for the third quarter of 2023 decreased slightly from the net interest margin of 2.64% for the second quarter of 2023.

Non-Interest Income – Non-interest income for the third quarter of 2023 decreased by $1.5 million compared to the second quarter of 2023, primarily due to the $1.7 million gain on the sale of all loans held for sale in the second quarter of 2023, consisting primarily of nonperforming and chronically delinquent residential real estate loans and the $0.2 million gain on the extinguishment of the subordinated notes in the third quarter of 2023.

Non-Interest Expense – Non-interest expense of $17.7 million for the third quarter of 2023 reflected an increase of $0.4 million, or 2%, compared to the second quarter of 2023. Professional fees were $0.7 million higher in the third quarter of 2023 compared to the prior quarter, which was primarily due to ongoing government investigations against selected individuals and our decision to cover defense costs with respect to these individuals. We were recently informed that our directors and officers insurance for these matters was exhausted based on invoices submitted prior to and during the third quarter of 2023. Therefore any future costs will not be reimbursed by our insurance carriers. We expect to receive our final insurance reimbursement payment in the fourth quarter of 2023. The increase in professional fees was partially offset by a decrease in salaries and employee benefits of $0.5 million in the third quarter of 2023 as compared to the prior quarter reflecting revisions in compensation programs, including the restructuring of our chief executive officer's compensation that took effect during the third quarter of 2023, as well as continued staff reductions in various support functions.

Income Tax Expense – For the three months ended September 30, 2023, the Company recorded income tax expense of $0.3 million, or an effective tax rate of 49.2%, and an effective tax rate of 36.8% for the nine months ended September 30, 2023. For the three months ended June 30, 2023, the Company recorded an income tax expense of $1.1 million, or an effective rate of 30.6%. Our effective tax rate in 2023 varies from the statutory tax rate primarily due to the impact of non-deductible compensation.

Mr. O'Brien said, "The uncertainty that continues to cloud the economy, coupled with the recent tragedies in Israel and the ensuing escalation of armed conflict in the Middle East along with the continuing conflict in Ukraine, will likely cause volatility in commodity prices, especially oil, and further strain fiscal and monetary policy in the U.S. and among its allies. We believe the level of regional armed conflicts along with flashpoints in other high tension geographies are a cause for very serious concern. The risk of contagion appears to be very high. Taken together these conditions will likely exert further pressures in many capital market sectors. At some point, I believe the markets stabilize around whatever the new normal might be and activity returns. In the coming quarters, I expect to see credit weakness in many office backed mortgage bonds and, in selected markets, growing instability in multi-family loans. While never immune, those conditions are not expected to have noticeable impact on Sterling since we disposed of many higher risk commercial and residential product in prior periods."

Conference Call and Webcast

Management will host a conference call on Wednesday, October 25, 2023 at 11:00 a.m. Eastern Time to discuss the Company's unaudited financial results for the quarter ended September 30, 2023. 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 1, 2023 by U.S callers dialing (877) 344-7529 and international callers dialing (412) 317-0088, using conference ID number 1707057.

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 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" regarding the Company's plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance, including any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. These statements are often, but not always, made through the use of words or phrases such as "may," "might," "should," "could," "believe," "expect," "continue," "will," "seek," "estimate," "intend," "plan," "anticipate," "appear" and "would," or the negative versions of those words or other comparable words or phrases of a future or forward-looking nature, though the absence of these words does not mean a statement is not forward-looking. All statements other than statements of historical facts, including but not limited to statements regarding, the economy and financial markets, government investigations, credit quality, the regulatory scheme governing our industry, competition in our industry, interest rates, our liquidity, our business and our governance, are forward-looking statements. We have based the forward-looking statements in this Press Release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. 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. There can be no assurance that future developments will be those that have been anticipated. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. 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" in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 9, 2023 and "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2023, 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. These risks are not exhaustive. Other sections of this Press Release and our filings with the Securities and Exchange Commission include additional factors that could adversely impact our business and financial performance. Moreover, we operate in very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Press Release. 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
	September 30,			June 30,			September 30,
(dollars in thousands, except per share data)		2023			2023			2022
Net income	$	314		$	2,539		$	1,176
Income per share, diluted	$	0.01		$	0.05		$	0.02
Net interest income	$	15,994		$	16,184		$	19,539
Net interest margin		2.62	%		2.64	%		3.19	%
Non-interest income	$	384		$	1,911		$	(357	)
Non-interest expense	$	17,702		$	17,341		$	21,621
Loans, net of allowance for credit losses	$	1,382,860		$	1,449,709		$	1,636,266
Total deposits	$	2,040,658		$	2,041,491		$	1,951,014
Asset Quality
Nonperforming loans	$	6,182		$	2,095		$	35,879
Allowance for credit losses to total loans		2.42	%		2.43	%		2.70	%
Allowance for credit losses to nonaccrual loans		681	%		1753	%		127	%
Nonaccrual loans to total loans outstanding		0.36	%		0.14	%		2.13	%
Net charge offs (recoveries) to average loans outstanding during the period		0.00	%		(0.03	)%		0.12	%
Recovery of credit losses	$	(1,942	)	$	(2,902	)	$	(4,357	)
Net charge offs (recoveries)	$	(1	)	$	(402	)	$	2,047
Performance Ratios
Return on average assets		0.05	%		0.41	%		0.19	%
Return on average shareholders' equity		0.39	%		3.24	%		1.39	%
Efficiency ratio⁽¹⁾		108.08	%		95.83	%		112.72	%
Yield on average interest-earning assets		5.39	%		5.15	%		4.06	%
Cost of average interest-bearing liabilities		3.24	%		2.99	%		1.05	%
Net interest spread		2.15	%		2.16	%		3.01	%
Capital Ratios⁽²⁾⁽³⁾
Regulatory and Other Capital Ratios — Consolidated:
Tier 1 (core) capital to average total assets (leverage ratio)		13.41	%		13.44	%		14.09	%
Regulatory and Other Capital Ratios — Bank:
Tier 1 (core) capital to average total assets (leverage ratio)		12.93	%		12.91	%		15.88	%

⁽¹⁾ Efficiency ratio is computed as the ratio of non-interest expense divided by the sum of net interest income and non-interest income.
⁽²⁾ September 30, 2023 capital ratios are estimated.
⁽³⁾ Effective January 1, 2023, the Company and Bank elected to opt into the community bank leverage ratio framework.

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

	September 30,			June 30,			%		December 31,			%		September 30,			%
(dollars in thousands)		2023			2023		change			2022		change			2022		change
Assets
Cash and due from banks	$	563,622		$	655,391		(14	)%	$	379,798		48	%	$	352,404		60	%
Interest-bearing time deposits with other banks		1,174			934		26	%		934		26	%		1,183		(1	)%
Debt securities available for sale		398,302			334,508		19	%		343,558		16	%		348,587		14	%
Equity securities		4,505			4,640		(3	)%		4,642		(3	)%		4,632		(3	)%
Loans held for sale		—			—		N/M			7,725		(100	)%		8,833		(100	)%
Loans, net of allowance for credit losses of $34,267, $36,153, $45,464 and $45,362		1,382,860			1,449,709		(5	)%		1,613,385		(14	)%		1,636,266		(15	)%
Accrued interest receivable		8,854			7,489		18	%		7,829		13	%		7,061		25	%
Mortgage servicing rights, net		1,631			1,658		(2	)%		1,794		(9	)%		1,842		(11	)%
Leasehold improvements and equipment, net		5,583			5,850		(5	)%		6,301		(11	)%		6,585		(15	)%
Operating lease right-of-use assets		12,197			13,025		(6	)%		14,800		(18	)%		15,467		(21	)%
Federal Home Loan Bank stock, at cost		18,923			20,288		(7	)%		20,288		(7	)%		20,288		(7	)%
Federal Reserve Bank stock, at cost		9,001			—		N/M			—		N/M			—		N/M
Company-owned life insurance		8,658			8,605		1	%		8,501		2	%		8,448		2	%
Deferred tax asset, net		22,475			18,538		21	%		23,704		(5	)%		23,907		(6	)%
Other assets		8,888			11,375		(22	)%		11,476		(23	)%		12,401		(28	)%
Total assets	$	2,446,673		$	2,532,010		(3	)%	$	2,444,735		0	%	$	2,447,904		(0	)%

Liabilities
Noninterest-bearing deposits	$	40,780		$	44,799		(9	)%	$	53,041		(23	)%	$	70,063		(42	)%
Interest-bearing deposits		1,999,878			1,996,692		0	%		1,900,996		5	%		1,880,951		6	%
Total deposits		2,040,658			2,041,491		(0	)%		1,954,037		4	%		1,951,014		5	%
Federal Home Loan Bank borrowings		50,000			50,000		0	%		50,000		0	%		50,000		0	%
Subordinated notes, net		—			65,234		(100	)%		65,271		(100	)%		65,290		(100	)%
Operating lease liabilities		13,317			14,176		(6	)%		15,990		(17	)%		16,664		(20	)%
Accrued expenses and other liabilities		26,595			43,433		(39	)%		46,810		(43	)%		35,335		(25	)%
Total liabilities		2,130,570			2,214,334		(4	)%		2,132,108		(0	)%		2,118,303		1	%

Shareholders' Equity
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding		—			—		—			—		—			—		—
Common stock, no par value, authorized 500,000,000 shares; shares issued and outstanding 52,072,631 at September 30, 2023, 52,081,886 at June 30, 2023, 50,795,871 at December 31, 2022 and 50,800,012 at September 30, 2022		84,323			84,323		0	%		83,295		1	%		83,295		1	%
Additional paid-in capital		15,882			15,098		5	%		14,808		7	%		14,560		9	%
Retained earnings		236,901			236,587		0	%		234,049		1	%		252,482		(6	)%
Accumulated other comprehensive loss		(21,003	)		(18,332	)	(15	)%		(19,525	)	(8	)%		(20,736	)	(1	)%
Total shareholders' equity		316,103			317,676		(0	)%		312,627		1	%		329,601		(4	)%
Total liabilities and shareholders' equity	$	2,446,673		$	2,532,010		(3	)%	$	2,444,735		0	%	$	2,447,904		(0	)%

N/M - Not Meaningful

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

	Three Months Ended													Nine Months Ended
(dollars in thousands, except per share amounts)	September 30, 2023			June 30, 2023			% change		September 30, 2022			% change		September 30, 2023			September 30, 2022			% change
Interest income
Interest and fees on loans	$	21,663		$	21,892		(1	)%	$	20,975		3	%	$	65,715		$	65,589		0	%
Interest and dividends on investment securities and restricted stock		3,134			2,666		18	%		1,945		61	%		8,256			4,133		100	%
Interest on interest-bearing cash deposits		8,081			7,002		15	%		1,925		N/M			19,890			2,931		N/M
Total interest income		32,878			31,560		4	%		24,845		32	%		93,861			72,653		29	%
Interest expense
Interest on deposits		16,391			13,337		23	%		3,724		N/M			39,537			8,070		N/M
Interest on Federal Home Loan Bank borrowings		250			248		1	%		253		(1	)%		743			919		(19	)%
Interest on subordinated notes		243			1,791		(86	)%		1,329		(82	)%		3,727			3,383		10	%
Total interest expense		16,884			15,376		10	%		5,306		N/M			44,007			12,372		N/M
Net interest income		15,994			16,184		(1	)%		19,539		(18	)%		49,854			60,281		(17	)%
Recovery of credit losses		(1,942	)		(2,902	)	33	%		(4,357	)	55	%		(4,170	)		(9,755	)	57	%
Net interest income after recovery of credit losses		17,936			19,086		(6	)%		23,896		(25	)%		54,024			70,036		(23	)%
Non-interest income
Service charges and fees		97			78		24	%		124		(22	)%		269			351		(23	)%
Loss on sale of investment securities		—			—		N/M			—		N/M			(2	)		—		N/M
Gain on sale of loans held for sale		—			1,720		(100	)%		—		N/M			1,695			200		N/M
Unrealized loss on equity securities		(137	)		(71	)	(93	)%		(184	)	26	%		(137	)		(590	)	77	%
Net servicing income (loss)		107			102		5	%		(384	)	N/M			268			(118	)	N/M
Income earned on company-owned life insurance		83			81		2	%		87		(5	)%		244			670		(64	)%
Other		234			1		N/M			—		N/M			236			586		(60	)%
Total non-interest income		384			1,911		(80	)%		(357	)	N/M			2,573			1,099		N/M
Non-interest expense
Salaries and employee benefits		8,753			9,274		(6	)%		9,336		(6	)%		27,437			24,522		12	%
Occupancy and equipment		2,110			2,051		3	%		2,112		(0	)%		6,273			6,441		(3	)%
Professional fees		4,242			3,521		20	%		5,756		(26	)%		10,984			17,979		(39	)%
FDIC insurance		274			263		4	%		316		(13	)%		794			1,031		(23	)%
Data processing		745			754		(1	)%		725		3	%		2,237			2,292		(2	)%
Net provision for (recovery of) mortgage repurchase liability		(80	)		(59	)	(36	)%		(145	)	45	%		(19	)		(670	)	97	%
Other		1,658			1,537		8	%		3,521		(53	)%		5,174			8,943		(42	)%
Total non-interest expense		17,702			17,341		2	%		21,621		(18	)%		52,880			60,538		(13	)%
Income before income taxes		618			3,656		(83	)%		1,918		(68	)%		3,717			10,597		(65	)%
Income tax expense		304			1,117		(73	)%		742		(59	)%		1,367			6,358		(78	)%
Net income	$	314		$	2,539		(88	)%	$	1,176		(73	)%	$	2,350		$	4,239		(45	)%

Income per share, basic and diluted	$	0.01		$	0.05				$	0.02				$	0.05		$	0.08
Weighted average common shares outstanding:
Basic		50,699,967			50,672,461					50,400,412					50,606,566			50,326,951
Diluted		51,069,683			50,778,213					50,572,931					50,749,879			50,523,076

N/M - Not Meaningful

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

	Three Months Ended
	September 30, 2023						June 30, 2023						September 30, 2022
(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	$	1,174,075	$	17,546	5.98	%	$	1,277,408	$	18,250	5.71	%	$	1,457,171	$	17,310	4.75	%
Commercial real estate		228,939		2,953	5.16	%		224,836		2,787	4.96	%		214,453		2,458	4.58	%
Construction		29,337		786	10.72	%		31,819		820	10.31	%		52,843		1,190	9.01	%
Commercial and industrial		17,796		378	8.50	%		2,255		35	6.21	%		1,404		17	4.84	%
Total loans		1,450,147		21,663	5.98	%		1,536,318		21,892	5.70	%		1,725,871		20,975	4.86	%
Securities, includes restricted stock⁽²⁾		400,838		3,134	3.13	%		375,094		2,666	2.84	%		394,503		1,945	1.97	%
Other interest-earning assets		589,267		8,081	5.49	%		541,887		7,002	5.17	%		328,177		1,925	2.35	%
Total interest-earning assets		2,440,252		32,878	5.39	%		2,453,299		31,560	5.15	%		2,448,551		24,845	4.06	%
Noninterest-earning assets
Cash and due from banks		4,780						4,233						4,083
Other assets		29,535						27,645						20,238
Total assets	$	2,474,567					$	2,485,177					$	2,472,872
Interest-bearing liabilities
Money market, savings and NOW	$	1,099,070	$	8,930	3.22	%	$	980,359	$	6,270	2.57	%	$	1,184,601	$	2,053	0.69	%
Time deposits		907,466		7,461	3.26	%		969,938		7,067	2.92	%		711,184		1,671	0.93	%
Total interest-bearing deposits		2,006,536		16,391	3.24	%		1,950,297		13,337	2.74	%		1,895,785		3,724	0.78	%
FHLB borrowings		50,000		250	1.96	%		50,000		248	1.96	%		50,380		253	1.97	%
Subordinated notes, net		9,218		243	10.32	%		65,245		1,791	10.86	%		65,301		1,329	7.96	%
Total borrowings		59,218		493	3.26	%		115,245		2,039	7.00	%		115,681		1,582	5.35	%
Total interest-bearing liabilities		2,065,754		16,884	3.24	%		2,065,542		15,376	2.99	%		2,011,466		5,306	1.05	%
Noninterest-bearing liabilities
Demand deposits		42,355						44,005						74,550
Other liabilities		48,640						61,487						50,476
Shareholders' equity		317,818						314,143						336,380
Total liabilities and shareholders' equity	$	2,474,567					$	2,485,177					$	2,472,872
Net interest income and spread⁽²⁾			$	15,994	2.15	%			$	16,184	2.16	%			$	19,539	3.01	%
Net interest margin⁽²⁾					2.62	%					2.64	%					3.19	%

⁽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.

	Nine Months Ended
	September 30, 2023						September 30, 2022
(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	$	1,272,056	$	54,310	5.69	%	$	1,556,569	$	52,898	4.53	%
Commercial real estate		225,919		8,336	4.92	%		227,524		8,441	4.95	%
Construction		34,153		2,640	10.31	%		70,027		4,222	8.04	%
Commercial and industrial		7,204		429	7.94	%		707		28	5.28	%
Total loans		1,539,332		65,715	5.69	%		1,854,827		65,589	4.71	%
Securities, includes restricted stock⁽²⁾		380,886		8,256	2.89	%		380,485		4,133	1.45	%
Other interest-earning assets		514,957		19,890	5.15	%		395,400		2,931	0.99	%
Total interest-earning assets		2,435,175		93,861	5.14	%		2,630,712		72,653	3.68	%
Noninterest-earning assets
Cash and due from banks		4,497						3,848
Other assets		28,085						35,269
Total assets	$	2,467,757					$	2,669,829
Interest-bearing liabilities
Money market, savings and NOW	$	1,027,336	$	19,814	2.58	%	$	1,260,953	$	3,516	0.37	%
Time deposits		926,122		19,723	2.85	%		777,110		4,554	0.78	%
Total interest-bearing deposits		1,953,458		39,537	2.71	%		2,038,063		8,070	0.53	%
FHLB borrowings		50,000		743	1.99	%		103,242		919	1.19	%
Subordinated notes, net		46,370		3,727	10.60	%		65,319		3,383	6.83	%
Total borrowings		96,370		4,470	6.12	%		168,561		4,302	3.37	%
Total interest-bearing liabilities		2,049,828		44,007	2.87	%		2,206,624		12,372	0.75	%
Noninterest-bearing liabilities
Demand deposits		45,519						70,427
Other liabilities		57,426						51,314
Shareholders' equity		314,983						341,464
Total liabilities and shareholders' equity	$	2,467,756					$	2,669,829
Net interest income and spread⁽²⁾			$	49,854	2.27	%			$	60,281	2.93	%
Net interest margin⁽²⁾					2.73	%					3.06	%

⁽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)

	September 30,			June 30,			%			December 31,			%			September 30,			%
(dollars in thousands)		2023			2023		change				2022		change				2022		change
Residential real estate	$	1,139,205		$	1,214,439			(6	)%	$	1,391,276			(18	)%	$	1,430,472			(20	)%
Commercial real estate		237,812			221,658			7	%		221,669			7	%		199,446			19	%
Construction		22,292			31,978			(30	)%		44,503			(50	)%		50,320			(56	)%
Commercial and industrial		17,809			17,772			0	%		1,396			N/M			1,389			N/M
Other consumer		9			15			(40	)%		5			80	%		1			N/M
Total loans held for investment		1,417,127			1,485,862			(5	)%		1,658,849			(15	)%		1,681,628			(16	)%
Less: allowance for credit losses		(34,267	)		(36,153	)		(5	)%		(45,464	)		(25	)%		(45,362	)		24	%
Loans, net	$	1,382,860		$	1,449,709			(5	)%	$	1,613,385			(14	)%	$	1,636,266			(15	)%

Loans held for sale	$	-		$	-			N/M		$	7,725			(100	)%	$	8,833			(100	)%
Total gross loans	$	1,417,127		$	1,485,862			(5	)%	$	1,666,574			(15	)%	$	1,690,461			(16	)%

N/M - Not Meaningful



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

							Three Months Ended
							September 30,			June 30,			March 31,			December 31,			September 30,
(dollars in thousands)								2023			2023			2023			2022			2022
Balance at beginning of period							$	36,153		$	38,565		$	45,464		$	45,362		$	51,766
Adjustment to adopt ASU 2016-13								—			—			(1,651	)		—			—
Adjustment to adopt ASU 2022-02								—			—			380			—			—
Balance after adoption							$	36,153		$	38,565		$	44,193		$	45,362		$	51,766
Provision for (recovery of) credit losses								(1,887	)		(2,814	)		784			(179	)		(4,357	)
Charge offs								—			—			(6,478	)		—			(4,064	)
Recoveries								1			402			66			281			2,017
Balance at end of period							$	34,267		$	36,153		$	38,565		$	45,464		$	45,362



Sterling Bancorp, Inc.
Deposit Composition (Unaudited)

	September 30,			June 30,			%			December 31,			%			September 30,			%
(dollars in thousands)		2023			2023		change				2022		change				2022		change
Noninterest-bearing deposits	$	40,780		$	44,799			(9	)%	$	53,041			(23	)%	$	70,063			(42	)%
Money Market, Savings and NOW		1,127,735			1,015,394			11	%		1,039,263			9	%		1,123,375			0	%
Time deposits		872,143			981,298			(11	)%		861,733			1	%		757,576			15	%
Total deposits	$	2,040,658		$	2,041,491			(0	)%	$	1,954,037			4	%	$	1,951,014			5	%

Sterling Bancorp, Inc.
Credit Quality Data (Unaudited)

	At and for the Three Months Ended
	September 30,			June 30,			December 31,			September 30,
(dollars in thousands)		2023			2023			2022			2022
Nonaccrual loans⁽¹⁾⁽²⁾
Residential real estate	$	5,035		$	2,062		$	33,690		$	35,843
Loans past due 90 days or more and still accruing interest		1,147			33			35			36
Nonperforming loans		6,182			2,095			33,725			35,879
Other troubled debt restructurings⁽³⁾		—			—			2,637			2,643
Nonaccrual loans held for sale		—			—			1,942			3,657
Nonperforming assets	$	6,182		$	2,095		$	38,304		$	42,179
Total loans⁽¹⁾	$	1,417,127		$	1,485,862		$	1,658,849		$	1,681,628
Total assets	$	2,446,673		$	2,532,010		$	2,444,735		$	2,447,904
Nonaccrual loans to total loans outstanding⁽²⁾		0.36	%		0.14	%		2.03	%		2.13	%
Nonperforming assets to total assets		0.25	%		0.08	%		1.57	%		1.72	%
Allowance for credit losses to total loans		2.42	%		2.43	%		2.74	%		2.70	%
Allowance for credit losses to nonaccrual loans		681	%		1753	%		135	%		127	%
Net charge offs (recoveries) to average loans outstanding during the period		0.00	%		(0.03	)%		(0.02	)%		0.12	%

⁽¹⁾ Loans are classified as held for investment and are presented before the allowance for credit losses.
⁽²⁾ Total nonaccrual loans exclude nonaccrual loans held for sale. If nonaccrual loans held for sale are included, the ratio of total nonaccrual loans to total gross loans would be 0.36%, 0.14%, 2.14%, and 2.34% at September 30, 2023, June 30, 2023, December 31, 2022 and September 30, 2022, respectively.
⁽³⁾ Other troubled debt restructurings at December 31, 2022 and September 30, 2022 exclude those loans presented above as nonaccrual or past due 90 days or more and still accruing interest. Effective January 1, 2023, loan modifications involving borrowers experiencing financial difficulty are evaluated under the new credit loss model. There were no such loan modifications during the three months ended September 30, 2023 and June 30, 2023.

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Sterling Bancorp Reports Third Quarter 2023 Financial Results