Sterling Bancorp, Inc. (Southfield, MI) (SBT): 5 FORCES Analysis [Nov-2025 Updated]

You're trying to map the competitive landscape that led to Sterling Bancorp, Inc.'s sale to EverBank Financial Corp by April 2025, and frankly, the pressures were stacked high. We're talking about high bargaining power from depositors and tech vendors, intense rivalry reflected in a $66.06 million revenue figure for 2024, and an almost insurmountable threat from FinTech substitutes that captured massive global transaction volumes. Before you model out any future strategy, you need to see exactly how the low switching costs for customers-who had 47 regional banks to pick from in Michigan-combined with regulatory supplier power to drive this outcome. See the full breakdown below.

Sterling Bancorp, Inc. (Southfield, MI) (SBT) - Porter's Five Forces: Bargaining power of suppliers

You're looking at the suppliers for Sterling Bancorp, Inc. (SBT) right as the firm completed its dissolution and merger with EverBank Financial Corp on April 1, 2025. Even in this wind-down phase, the market forces that governed its operations-especially funding and technology-remain sharp indicators of supplier leverage in the broader banking sector you are analyzing.

Depositors: The Cost of Core Funding

Depositors, the primary source of funding for any bank like the former Sterling Bancorp, Inc., held significant power in 2025. Why? Because switching costs for retail customers remain relatively low, forcing banks to compete aggressively for stable, low-cost core deposits. The 2025 CSBS Annual Survey of Community Banks clearly showed this tension; core deposit growth ranked as the second most important external risk facing community banks, right behind net interest margins. To be fair, this pressure was acute. For context, over half-specifically, 54%-of community bank executives cited growing deposits as their biggest challenge for 2025. This intense competition directly translates to higher costs for attracting and retaining those funds, which is exactly what Sterling Bancorp, Inc. faced before its final transaction.

Here's a quick look at how deposit competition stacks up against other external pressures cited by community bankers in the 2025 CSBS survey:

Cost of Funds: A Persistent External Headwind

The rising cost of funds was a major concern for the industry Sterling Bancorp, Inc. operated in. In the 2025 CSBS Annual Survey, the cost of funds was tied with economic conditions and technology costs as the third highest external risk. This indicates that even as the Federal Reserve paused rate hikes in late 2024, the pressure to pay more for deposits and wholesale funding sources persisted. This environment directly squeezes the net interest margin, which, as noted, was the top external risk at 88% of surveyed banks reporting it as "extremely important" or "very important."

Technology Providers: Leverage Through Necessity

Technology suppliers, especially those providing cloud infrastructure and advanced analytics, gained leverage. Banks must invest heavily to keep pace, particularly in areas like fraud detection using Generative AI. While we don't have Sterling Bancorp, Inc.'s specific 2025 technology budget, the industry-wide imperative to adopt these tools-and the associated risks of falling behind-gives these vendors pricing power. The need to secure operations is non-negotiable, so you pay the price.

The financial impact of supplier failure in the cybersecurity realm is staggering, which underscores the leverage these vendors hold:

• Average data breach cost for the financial sector in 2024: $6.08 million.
• This cost is 22% higher than the global average of $4.88 million.
• Cost per record containing sensitive data in finance: averages $181.
• Firms using AI and automation security tools saved an average of $1.9 million per breach.

Regulators: The Non-Traditional, Powerful Supplier

Regulators function as a powerful, non-traditional supplier because they dictate the operational parameters and capital structure of the bank. They supply the rules of engagement. While community bankers expressed less concern over regulatory burden in 2025-it fell to the sixth spot externally-the compliance costs remain substantial. For instance, adhering to safety and soundness practices accounted for the largest share of total compliance expenses for surveyed banks, at 27%. Money laundering and consumer protection standards followed closely at 25% and 23%, respectively. These mandates force Sterling Bancorp, Inc. to direct capital toward compliance infrastructure and personnel, effectively paying the regulatory 'supplier' for the license to operate.

For Sterling Bancorp, Inc. specifically, the final financial action related to its capital structure was the initial liquidating distribution of $4.85 per share, payable on April 8, 2025, following the approved Plan of Dissolution. Finance: draft 13-week cash view by Friday.

Sterling Bancorp, Inc. (Southfield, MI) (SBT) - Porter's Five Forces: Bargaining power of customers

You're looking at Sterling Bancorp, Inc. (SBT) post-sale, and the customer power dynamic is shaped by a fragmented, yet accessible, market. Honestly, the sheer number of choices facing any remaining or potential customer base is a huge factor in keeping pricing and service competitive.

Customer power is high due to a large number of alternatives, including the 47 regional banks in Michigan you mentioned. To put that in perspective, total FDIC-insured institutions in Michigan stood at 76 as of Q2 2025, showing a dense competitive field. This abundance of options means a customer looking for a basic checking account or a standard commercial loan has plenty of places to shop around. It's a buyer's market for commoditized products.

Switching costs for basic deposit and loan products are relatively low, especially with digital account opening. Think about it: opening a new account online can often take less than ten minutes now. This ease of exit puts constant pressure on Sterling Bancorp, Inc. to maintain superior service or better pricing, because the friction to leave is minimal. You don't have to wait for a branch visit anymore.

Customer expectations for digital services are high; 78% of Sterling Bancorp's customers used mobile banking platforms in 2024. This aligns with broader industry trends where digital proficiency is table stakes. For context, industry-wide, 72% of global banking customers preferred using mobile apps for core services in 2025, and over 83% of U.S. adults used some form of digital banking services as of 2025. If the digital experience lags, customers will definitely look elsewhere.

Commercial clients can easily access capital from non-bank lenders or larger, national institutions. This is critical because it means the competitive set isn't just other Michigan banks. In fact, competition from nonbanks in payment services showed a 7 percentage point year-over-year increase in perceived competition as of 2025. Furthermore, 83% of community bankers cited market competition as an 'extremely important' or 'very important' challenge when attracting core deposits in 2025, underscoring the external pressure.

Here's a quick view of the competitive pressures influencing customer decisions:

The power of the customer is also reflected in the ultimate financial outcome for the holding company, Sterling Bancorp, Inc., following the sale of its operating bank. The fixed purchase price received for the bank was $261 million in cash. Subsequently, the company declared an initial liquidating distribution to shareholders of approximately $252 million. This rapid return of capital suggests a market where the underlying operating asset's value was heavily scrutinized against customer-centric risks and alternatives.

You should review the projected timeline for the next liquidating distribution against the current cash position to ensure shareholder expectations, which are now highly focused on the wind-down, are managed precisely. Finance: draft 13-week cash view by Friday.

Sterling Bancorp, Inc. (Southfield, MI) (SBT) - Porter's Five Forces: Competitive rivalry

Rivalry is intense, operating in competitive metropolitan areas like Detroit, San Francisco, and New York. Sterling Bank and Trust, F.S.B. had primary branch operations in San Francisco and Los Angeles, California, and New York City before the sale.

The Michigan banking market alone holds a total asset value of $68,328 million as of Q2-2025, indicating significant scale competition within the home state.

The company's 2024 revenue of $66.06 million and earnings of $2.14 million showed a significant decrease, reflecting market pressure. This compares to the prior year's revenue of $76.27 million and earnings of $7.4 million for the year ended December 31, 2023.

The ultimate sign of rivalry pressure was the sale of the Bank to EverBank Financial Corp, which closed by April 1, 2025.

The transaction involved a fixed purchase price of $261 million in cash. Shareholder support for the sale and dissolution was high, with 74% of the outstanding shares voted in favor.

The competitive landscape is further defined by the assets absorbed by the acquirer:

The acquisition immediately expanded EverBank's presence in key markets, taking over specific branch locations:

• 25 Sterling Bank branches in the San Francisco Bay Area and metropolitan Los Angeles/Orange County.
• 1 branch in the Flushing neighborhood of New York City.
• The Michigan branch closed its operations on March 31, 2025.

The competitive environment leading to the sale can be summarized by key financial metrics for the full year 2024:

• Revenue: $66.06 million.
• Net Income: $2.14 million.
• Net Interest Income (FY 2024): $56.5 million.
• Net Interest Margin (Q4 2024): 2.24%.

Sterling Bancorp, Inc. (Southfield, MI) (SBT) - Porter's Five Forces: Threat of substitutes

The threat is extremely high from non-bank financial technology (FinTech) companies. You see this everywhere, honestly; the digital alternatives are simply too convenient and often cheaper for many core banking functions.

Digital payment platforms processed $9.46 trillion in global transactions in 2023, directly substituting traditional bank services. That number alone shows the scale of the migration away from traditional payment rails that Sterling Bancorp, Inc. (Southfield, MI) (SBT) relied upon for transaction-based revenue. The trend is accelerating, too; global digital payment volumes reached $18.7 trillion in 2024. This massive shift means fewer checks written and fewer in-person cash/card transactions processed through traditional bank infrastructure.

Mobile banking adoption reached 78% among U.S. consumers, shifting transactions away from physical branches. To be fair, the latest data suggests this is already a reality; as of 2025, about 72% of U.S. adults report using mobile banking apps. This high penetration means the majority of your retail customers are already comfortable managing their money without stepping foot in a branch. In fact, 64% of U.S. adults now prefer mobile banking over traditional methods. That preference directly erodes the value proposition of a physical footprint, which is a major cost center for a regional bank like Sterling Bancorp, Inc. (Southfield, MI) (SBT).

Money market funds and direct-to-consumer lending platforms substitute for Sterling Bancorp's deposit and loan products. When rates are high, money market funds (MMFs) become a very attractive substitute for bank deposits, offering better yield with perceived safety. In the U.S., MMF assets reached $7 trillion in 2024. That's a huge pool of customer cash that isn't sitting in an SBT checking or savings account. On the lending side, direct lending funds are eager to deploy more than $250 billion in dry powder in 2025 alone. This capital competes directly for commercial and industrial loan opportunities that Sterling Bancorp, Inc. (Southfield, MI) (SBT) would typically originate.

Here's the quick math on those deposit and lending substitutes:

• U.S. Money Market Fund Assets (2024): $7 trillion
• Direct Lending Dry Powder (2025 estimate): Over $250 billion
• Digital Wallet E-commerce Share (Forecast 2028): 61%
• Digital Wallet In-Store Share (Forecast 2027): 46%

Sterling Bancorp, Inc. (Southfield, MI) (SBT) - Porter's Five Forces: Threat of new entrants

You're looking at the landscape for Sterling Bancorp, Inc. (Southfield, MI) (SBT) and wondering just how hard it is for a new competitor to set up shop. The answer is complex; the barriers are high for some, but practically non-existent for others, depending on their model.

Regulatory hurdles and capital requirements for a new charter (deintely) create a high entry barrier for traditional banks. Getting a de novo national bank charter is not a quick process, even when regulators signal openness. For instance, a recently conditionally approved institution targeting digital assets in October 2025 faces enhanced scrutiny for its first three years, including maintaining a minimum 12% Tier 1 leverage ratio. This level of capital commitment right out of the gate is substantial. Even for established community banks, proposed regulatory changes suggest lowering the community bank leverage ratio requirement to 8% from the current 9%. For the largest institutions, finalized rules are trimming the enhanced supplementary leverage ratio (eSLR) for their depository institution subsidiaries to 4% from 6%. Still, meeting these baseline capital standards is a massive initial hurdle for any new, traditional entrant.

FinTechs and challenger banks, however, bypass many branch costs and enter with lower capital bases. They don't need the same physical footprint, which immediately lowers their fixed overhead. The funding environment, while more selective, still supports well-capitalized entrants. Global fintech funding in the first half of 2025 totaled $44.7B across 2,216 deals. For a startup seeking growth capital, the median annual revenue required to raise a Series A round in the past 24 months stood at $4M. While this threshold is up 4x from just $1M four years ago, it shows a clear path for venture-backed challengers to scale quickly without the immediate regulatory capital burden of a chartered bank. Plus, these companies are getting leaner; the median net cash burn for US VC-backed fintechs saw a 12% year-over-year decrease in Q2 2025.

New entrants leverage Generative AI and cloud infrastructure to offer hyper-personalized, low-cost services. This technology adoption is a game-changer for new players who can build their core systems on modern, efficient stacks from day one. For the industry overall, banks are allocating 22% of their budgets on average towards AI, with spending projected to rise by 6.3%. The promise of efficiency is real; AI adoption is expected to drive up to 20% in short-term net cost reductions for the banking sector. In specific markets, Generative AI has the potential to improve banking operations by up to 46%. These efficiencies translate directly into lower operating costs for new entrants compared to incumbents like Sterling Bancorp, Inc. (Southfield, MI) (SBT) who must integrate AI into legacy systems.

The cost of technology implementation is a significant barrier for smaller banks, but an entry tool for well-funded startups. While established players grapple with the cost of retrofitting, well-funded FinTechs treat this as an upfront investment that yields immediate operational leverage. For example, the AI in fintech market was valued at $14.13B in 2024 and is projected to reach $17.79B in 2025. This investment allows new firms to automate tasks like compliance checks or customer service, where AI can reduce the cost per unit of normal business activities to as low as one-tenth of traditional manual processes.

• New entrants can build AI-native platforms, avoiding costly legacy system migrations.
• Cloud infrastructure allows for variable cost structures, unlike fixed branch expenses.
• The potential for 20% cost reduction via AI pressures incumbents to spend heavily just to keep pace.
• Regtech, a subset of fintech, is gaining traction as institutions seek cost reduction via automation.