Sterling Bancorp in New York is shedding its consumer finance subsidiary so it can focus on business lines that make more money.
The $2 billion-asset Sterling said last week that it plans to sell its Sterling Financial Services Co. Inc. The parent company did not disclose the buyer, but it did say it would take a one-time charge of about $8.5 million after taxes, resulting in a loss for the third quarter.
The unit, which Sterling said was just breaking even, has a $132 million loan portfolio.
Sterling said it plans to invest the proceeds in higher-revenue businesses. In April, Sterling bought PL Services LP, a Woodbury, N.Y., company specializing in financing temporary staffing agencies.
The company also said it may use the proceeds to lower its cost of funds, continue share buybacks, and reduce operating expenses.
Lana Chan, an analyst at Bank of Montreal's Harris Nesbitt Corp., wrote in a research note that the sale also would affect fourth-quarter earnings but should be accretive next year.
Sterling's stock fell 4.43% in heavy trading Friday, to close at $20.07 a share.
