Kehoe Law Firm, P.C. Investigating Securities Claims on Behalf of Sterling Bancorp Investors and Shareholders
Kehoe Law Firm, P.C. is investigating potential securities claims on behalf of investors that purchased Sterling Bancorp, Inc. (“Sterling Bancorp” or the “Company”) (NasdaqCM: SBT) common stock: (a) pursuant and/or traceable to the Company’s initial public offering that commenced on or about November 17, 2017 (the “IPO”); and/or (b) between November 17, 2017 and December 8, 2019, inclusive (the “Class Period”).
On February 26, 2020, a class action lawsuit was filed against Sterling Bancorp, Inc. in United States District Court, Eastern District of Michigan, seeking to recover damages pursuant to §10(b) and §20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, as well as alleging claims under §§11,12(a)(2) and 15 of the Securities Act of 1933.
According to the lawsuit, during the Class Period and in connection with the Company’s IPO, the Sterling Bancorp Defendants, made untrue statements of material fact and failed to disclose material facts concerning, among other things, Sterling Bancorp’s loan underwriting, risk management and internal controls, including repeatedly touting its strict underwriting, asset quality and the Advantage Loan Program.
On December 9, 2019, Sterling Bancorp disclosed the following information:
Sterling Bank and Trust, FSB, Southfield, Michigan (the “Bank”), a wholly-owned subsidiary of Sterling Bancorp, Inc. (the “Company”) voluntarily and temporarily suspended its Advantage Loan program in connection with an ongoing internal review of the program’s documentation procedures. Management believes it is prudent to temporarily halt the program as it continues to audit documentation on past loans and puts in place additional systems and controls to ensure the Bank’s policies and procedures are followed on loans originated under the program. It is the Company’s intention to resume the Advantage Loan program as soon as management is confident its stated policies and procedures are being followed. However, it is presently difficult to estimate how long this suspension might last.
The Advantage Loan program is a material component of the Bank’s total loan originations. While it is difficult to quantify the financial impact of the program’s temporary suspension, management anticipates a reduced level of near-term loan originations, slower overall loan portfolio growth, and less loan sales. However, management does not anticipate any credit related issues from previous loans made under the program due to the substantial amount of equity required for each borrower and the resulting strong collateral package for each loan. In order to mitigate the operational and financial impact of the Advantage Loan program’s temporary suspension, the Company will continue to work on initiatives to diversify its overall loan production. Such initiatives include expanding the Bank’s commercial lending efforts, including multifamily, tenant-in-common, construction, and commercial and industrial loans. In addition, management will continue to review new residential loan products that meet the needs of its customers in its served markets.
It is too early to assess the level of success that the Company will have in replacing the lost loan production volume from the Advantage Loan program’s temporary suspension. If the Company is unable to replace the lost production in a timely matter, or if a decision is made to alter the program, the Company’s results of operations could be materially and adversely affected. [Emphasis added.]
On this news, the Company’s stock price fell $2.16, or nearly 23%, closing at $7.29 per share on December 9, 2019, thereby injuring investors.
If you purchased Sterling Bancorp common stock, pursuant and/or traceable to Sterling Bancorp’s IPO and/or during the Class Period, and suffered losses, you are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq, (215) 792-6676, Ext. 801, [email protected], to learn more about the Sterling Bancorp securities investigation or your potential legal claims.