Michael has over 20 years of experience representing individual and small business plaintiffs against the world’s large financial institutions, including Visa, Mastercard, and Chase.
Shares of Sterling Bancorp, Inc.dropped over 22% on December 9th after the company disclosed that its subsidiary suspended its Advantage Loan program indefinitely in connection with an internal review of the Bank’s documentation and procedures. The Advantage Loan program is a major component of the Bank’s total loan originations, and the company announced that the suspension will reduce near-term loan originations, slow overall loan portfolio growth, and will likely result in less loan sales.
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Sterling Bancorp Stock News: Shares Plummet 22% On Loan Program Suspension
On December 9, 2019, Sterling Bancorp filed a Form 8-K with the Securities and Exchange Commission (SEC). The filing disclosed that Sterling Bancorp’s subsidiary, Sterling Bank and Trust, FSB, suspended its Advantage Loan program in connection with an ongoing internal review. The review includes an audit of documentation on past loans, as well as new loan regulation efforts. As stated in the Form 8-K,
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.
The filing further states that the program will not be resumed until “management is confident its stated policies and procedures are being followed.” However, the company was not able to predict how long the suspension may last.
While the effects of the suspension of the loan program cannot be fully known, the company anticipates, among other things, a reduction in loan sales. This decreased production may have adverse effects. According to the Form 8-K,
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.
On this news, Sterling Bancorp share price plummeted nearly 22% during intraday trading on December 9th. Our firm will continue to investigate.
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