Sterling Bancorp in Southfield, Mich., narrowed its losses in the first quarter.
The $2.4 billion-asset company said in a press release that it lost $500,000, an improvement from the $18.4 million loss it had in the fourth quarter.
Sterling recorded a $6.5 million charge off in the first quarter after reclassifying about $41.1 million of nonaccrual and delinquent mortgages as held for sale.
The company said it has received several favorable bids and plans to sell the loans, which have a fair value of $34.6 million, in the coming months.
Sterling also recorded a $674,000 loan-loss provision.
The results “continue the very deliberate remediation and repositioning begun in 2020,” Thomas O’Brien, the company’s chairman, president and CEO, said in the release.
“Sterling is well positioned now with strong capital levels, abundant liquidity and exceptional asset quality,” he added.
Total deposits fell 2% from the end of last year, to $1.9 billion.
The company’s massive fourth-quarter loss was a result of a plea agreement with the Justice Department over a defunct mortgage program. Sterling agreed to plead guilty to a count of securities fraud tied to disclosures for its Advantage Loan Program made between 2017 and 2019.
Sterling paid $27.2 million in restitution to non-insider shareholders and agreed to further enhance its compliance program and internal controls.