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Kroll affirms Michigan-based Sterling's debt ratings

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Kroll affirms Michigan-based Sterling's debt ratings

Kroll Bond Rating Agency on Nov. 22 affirmed Sterling Bancorp Inc.'s BBB senior unsecured debt rating, BBB- subordinated debt rating and K3 short-term debt rating. Southfield, Mich.-based Sterling raised approximately $85.6 million in net proceeds through a recently completed IPO.

Kroll also affirmed subsidiary Sterling Bank and Trust FSB's deposit and senior unsecured debt ratings of BBB+, subordinated debt rating of BBB and short-term deposit and debt ratings of K2.

The ratings reflect the company's "above-average earnings metrics ... [and] an exceptional efficiency ratio." Sterling reported a return on average assets of 1.91% and an efficiency ratio of 30.58% for its fiscal third quarter. Kroll said the company's ratings are constrained, however, by its "significant" exposure to nontraditional real estate lending and its high loan-deposit ratio. The ratio was 113.52% for the recent quarter, down from the linked period's 123.68%.

The outlook for all long-term ratings is stable.