Sterling Bancorp has settled a shareholder lawsuit that alleged disclosures about the Southfield, Mich., company’s residential lending practices violated federal securities laws.
The lawsuit was filed in February 2020 in U.S. District Court for the Eastern District of Michigan, about two months after Sterling
The $3.9 billion-asset company said in a press release Monday that the settlement in the case included a cash payment that was paid by its insurance carriers. The shareholders agreed to drop all claims against Sterling.
Sterling did not disclose the amount of the payment, though it said the settlement allowed it to reclaim a $10 million contingent loss liability it created in late 2019 to cover potential legal expenses.
The company still reported an $11 million loss in the fourth quarter that reflected a $27.6 million loan-loss provision. Sterling also added $2.5 million to the mortgage-repurchase liability it established a year earlier tied to loans it made and sold under the Advantage program.
Sterling has been grappling with several issues since it ended the Advantage program, which allowed applicants to use nonstandard documentation, such as a letter from an employer or a monthly bank statement. Problems raised concerns about potentially broader issues with internal controls.
Sterling has also been operating under a formal agreement with the Office of the Comptroller of the Currency since June tied to Bank Secrecy Act and anti-money-laundering compliance.
Sterling
The company announced in June that it had
