|
| |
| | Sterling Bancorp |
| | 400 Rella Boulevard |
| | Montebello, NY 10901-4243 |
| | |
| News Release | T 845.369.8040 |
| F 845.369.8255 |
| |
| | http://www.sterlingbancorp.com |
|
| |
| FOR IMMEDIATE RELEASE | |
| February 4, 2014 | |
| | |
| STERLING BANCORP CONTACT: | |
| Luis Massiani, EVP & Chief Financial Officer | |
| 845.369.8040 | |
Sterling Bancorp Announces
Results for the First Fiscal Quarter ended December 31, 2013
Merger of Provident New York Bancorp and legacy Sterling Bancorp creates larger, more diversified full service commercial bank with $6.7 billion in total assets serving the greater New York metropolitan region
MONTEBELLO, N.Y. – February 4, 2014 – Sterling Bancorp (NYSE: STL), the parent company of Sterling National Bank, today announced results for the quarter ended December 31, 2013. Net loss for the quarter, including a number of merger-related expenses and other charges, was ($14.0 million), or ($0.20) per diluted share, compared to net income of $7.0 million, or $0.16 per diluted share for the same quarter last year; and net income of $5.3 million, or $0.12 per diluted share for the linked quarter ended September 30, 2013.
Excluding the impact of the charges discussed below and which are included in non-interest expense, net income for the first quarter was $9.4 million, or $0.13 per diluted share. Results for the quarter were impacted by pre-tax merger-related expenses of $9.1 million associated with the legacy Sterling Bancorp transaction; a pre-tax charge for asset write-downs, retention and severance compensation of $22.2 million included in other non-interest expense, a pre-tax charge on settlement of a portion of defined benefit pension plan obligations of $2.7 million included in compensation and benefits and pre-tax amortization of non-compete agreements of approximately $1.0 million included in amortization of intangibles. Results for the quarter were also impacted by a net loss on sale of securities of $645 thousand. See the reconciliation of these non-GAAP measures on page 10.
President’s Comments
Jack Kopnisky, President and CEO, commented: “During the quarter we continued to execute our strategy and made significant progress towards achieving our goal of building a high performing regional bank. We successfully completed our merger with legacy Sterling Bancorp on October 31, 2013 and are well-positioned to deliver on the full potential of the merger by achieving superior growth and profitability as a larger, more diversified company going forward. As of December 31, 2013, our total assets were $6.7 billion, total loans were $4.2 billion and total deposits were $4.9 billion.
“Core earnings results for the quarter were strong and included only two months as a combined institution. Our loan portfolio has a diverse mix of loans by type and asset class. Approximately 42% of our loan portfolio consists of commercial and industrial loans, 38% consists of commercial real estate loans and 20% consists of residential mortgage and other consumer loans. We continue to execute our differentiated, single point of contact distribution strategy and are now organized into 21 commercial relationship teams and 46 financial centers covering the greater New York metropolitan region. Significant opportunities abound across all of our markets to deliver our full suite of lending and deposit products to our core target of small and middle market clients.
“We have also diversified our mix of fee-based revenues and have expanded capabilities across a broad range of fee-based businesses including mortgage banking, factoring, payroll finance, wealth management and title insurance. Excluding the impact of net loss on sale of securities, non-interest income for the quarter was $9.8 million, which represented 17.6% of core total revenue. Our objective is to continue growing these fee-based businesses targeting a non-interest income to core total revenue ratio of 20-25%.
“Our core operating efficiency ratio was 65.4%. This ratio does not yet reflect the significant cost saving opportunities we have identified as a result of the merger and will begin to realize in the second fiscal quarter of 2014. Our long-term core operating efficiency ratio target of below 60% upon the phase-in of merger-related cost savings remains unchanged.
“Our credit quality has continued to show positive trends across all of our portfolios. For the quarter ended December 31, 2013, net charge-offs against the allowance for loan losses were $1.3 million compared to $2.2 million in the prior quarter. We acquired $1.7 billion of loans in the merger with legacy Sterling Bancorp which were recorded at fair value at the acquisition date. At December 31, 2013, $1.5 billion of these loans carry no allowance for loan losses. The fair value adjustment recorded on the legacy Sterling Bancorp merger transaction was $25.4 million consisting of an interest rate and credit mark.The allowance for loan losses to total loans, excluding loans acquired in the Gotham and legacy Sterling Bancorp transactions that were recorded at fair value at the acquisition date and continue to carry no allowance, was 1.24%.
“Our capital and liquidity positions remain strong. Our Tier 1 leverage ratio was 10.58% at Sterling National Bank and our consolidated tangible equity to tangible assets ratio was 7.78%. We have ample capital and liquidity to support our growth and execute our strategy. I am pleased to announce that consistent with the announcement of the merger, our Board of Directors has declared a dividend on our common stock of $0.07 per share payable February 24, 2014.”
Key Highlights
| |
| ▪ | Total loans including loans held for sale were $4.2 billion at December 31, 2013. |
| |
| ▪ | Tax equivalent net interest margin was 3.58% for the first quarter of fiscal 2014 compared to 3.23% in the linked quarter and 3.37% in the first quarter of fiscal 2013. |
| |
| ▪ | Total non-interest income for the quarter was $9.8 million, excluding net loss on sale of securities, which represented 17.6% of core total revenue. |
| |
| ▪ | Core operating efficiency ratio was 65.4%. See the reconciliation of this non-GAAP financial measure on page 10. |
| |
| ▪ | The allowance for loan losses increased to $30.6 million at December 31, 2013. The allowance as a percentage of non-performing loans was 79.6% at December 31, 2013 as compared to 107.3% at September 30, 2013, due to non-performing loans acquired in the merger transaction with legacy Sterling Bancorp, which are covered by the fair value adjustment recorded at the acquisition date. |
| |
| ▪ | Non-performing loans were $38.4 million at December 31, 2013 and represented 0.93% of total loans. |
| |
| ▪ | Provision for loan losses for the quarter was $3.0 million compared to $2.7 million in the linked quarter. |
Net Interest Income and Margin
First quarter fiscal 2014 compared to the first quarter fiscal 2013
Net interest income was $45.9 million, up $18.0 million compared to the first quarter of fiscal 2013. This was mainly the result of higher average loans and investment securities balances and an increase in net interest margin due to the merger transaction with legacy Sterling Bancorp. The tax-equivalent yield on investments increased 28 basis points and yield on loans decreased 16 basis points. Yield on loans included $2.0 million in accretion of the fair value discount associated with the loans acquired from Gotham and legacy Sterling Bancorp. The cost of total deposits was 17 basis points and the cost of borrowings was 2.80%, which included $1.5 million in interest expense associated with our senior notes offering which was completed in July 2013. The net interest margin on a tax-equivalent basis was 3.58% compared to 3.37% for the same period a year ago.
First quarter fiscal 2014 compared with linked quarter ended September 30, 2013
Net interest income increased $17.8 million compared to the linked quarter ended September 30, 2013. The increase in net interest income for the first quarter was due to higher average loans and investment securities balances and an increase in net interest margin due to the merger with legacy Sterling Bancorp. Average earning assets for the quarter were $5.2 billion and tax-equivalent yield on interest earning assets was 4.10%. Tax-equivalent net interest margin increased to 3.58% from 3.23% in the linked quarter.
Non-interest Income
First quarter fiscal 2014 compared with first quarter fiscal 2013
Excluding net gains and losses on sale of securities, non-interest income increased $3.6 million to $9.8 million for the first quarter of fiscal 2014. The increase was mainly due to an increase in fees associated with service charges on deposits, fees generated in factoring and payroll finance businesses and gain on sale income in mortgage banking. The Company realized a net loss on sale of securities of $645 thousand for the first quarter of fiscal 2014 compared to net gain on sale of securities of $1.4 million in the year ago quarter.
First quarter fiscal 2014 compared with linked quarter ended September 30, 2013
Excluding net gains and losses on sale of securities, non-interest income increased $5.0 million to $9.8 million for the first fiscal quarter of 2014. The increase was mainly due to the factors discussed above. The Company realized a net gain on sale of securities of $1.8 million in the linked quarter ended September 30, 2013.
Non-interest Expense
First quarter fiscal 2014 compared with first quarter fiscal 2013
Non-interest expense increased $50.4 million relative to the first quarter of fiscal 2013 to $73.0 million, principally the result of increased compensation and benefits expense and occupancy and office operations expense due to the merger transaction with legacy Sterling Bancorp. Expenses for the quarter included merger-related expenses of $9.1 million, a charge for asset write-downs, retention and severance compensation of $22.2 million, a charge on settlement of a portion of defined benefit pension plan obligations of $2.7 million and amortization of non-compete agreements of approximately $1.0 million. The charge for asset write-downs, retention and severance compensation includes approximately $11.0 million of write-downs of legacy Provident New York Bancorp fixed assets due mainly to the re-alignment and consolidation of office locations and financial centers as a result of the merger and a charge related to the write-off of the naming rights to Provident Bank Ballpark. The charge on settlement of defined benefit pension plans represented the acceleration of future amortization of items recorded in accumulated other comprehensive loss.
First quarter fiscal 2014 compared with the linked quarter ended September 30, 2013
Non-interest expense increased $49.6 million compared to the linked quarter to $73.0 million, due to the factors discussed above.
Income Taxes
In the first quarter of fiscal 2014 the Company recorded an income tax benefit at a rate of 33.2% compared to an effective tax expense rate of 38.3% in the linked quarter and 30.4% for the same period in fiscal 2013. Income tax benefit for the period was impacted by the Company’s pre-tax loss as well as a portion of merger-related expenses that are anticipated will not be deductible.
Credit Quality
Non-performing loans increased $11.5 million to $38.4 million at December 31, 2013 compared to $26.9 million at September 30, 2013. This increase is a result of non-performing loans acquired in the merger transaction with legacy Sterling Bancorp. Net charge-offs for the first quarter that were charged to the allowance for loan losses were $1.3 million compared to $2.2 million in the linked quarter. The allowance for loan losses at December 31, 2013 was $30.6 million, which represented 79.6% of non-performing loans and 0.74% of our total loan portfolio. The increase in the allowance for loan losses was related to the higher balance of loans outstanding at December 31, 2013, which included approximately $153 million in loans acquired from legacy Sterling Bancorp that were included in the calculation of the allowance for loan losses. The allowance for loan losses to total loans, excluding loans acquired in the Gotham and legacy Sterling Bancorp transactions that were recorded at fair value at the acquisition date and continue to carry no allowance, was 1.24% at December 31, 2013. Please refer to the Company’s reconciliation of this non-GAAP measure on page 9.
Key Balance Sheet Changes Year-to-Date at December 31, 2013
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| ▪ | Total assets were $6.7 billion. |
| |
| ▪ | Total loans including loans held for sale were $4.2 billion. |
| |
| ▪ | Commercial and industrial loans represented 41.6%, commercial real estate loans represented 37.8%, consumer and residential mortgage loans represented 18.3%, and acquisition, construction and development loans represented 2.3% of the total loan portfolio. |
| |
| ▪ | Securities, excluding FHLB Stock, were $1.7 billion at and represented 24.9% of total assets. |
| |
| ▪ | Total deposits were $4.9 billion. |
| |
| ▪ | Transaction deposits were $2.4 billion and represented 47.8% of total deposits. |
| |
| ▪ | Tangible book value per share was $5.77. |
Capital
The Company’s stockholders’ equity was $925.1 million at December 31, 2013, an increase of $442.2 million relative to the linked quarter. The increase was mainly the result of the issuance of 39.1 million common shares in connection with the acquisition of legacy Sterling Bancorp. This increase was partially offset by an increase in accumulated other comprehensive loss of $4.1 million due to a decline in the fair value of the investment securities portfolio during the quarter. Retained earnings decreased by $14.0 million due to the net loss incurred in the quarter.
Tangible book value per share decreased from $7.08 at September 30, 2013 to $5.77 at December 31, 2013. Total goodwill and other intangible assets were $440.5 million at December 31, 2013, an increase of $271.5 million over the linked quarter. For the quarter ended December 31, 2013, basic and diluted weighted average common shares outstanding increased to 70.5 million, compared to 43.7 million, basic and 43.9 million diluted shares, respectively, for the quarter ended September 30, 2013. The increase in basic and diluted shares is mainly the result of the issuance of 39.1 million shares of common stock in October 2013 in connection with the acquisition of legacy Sterling Bancorp. Total shares outstanding at December 31, 2013 were approximately 84.0 million.
Consolidated tangible equity to tangible assets was 7.78% at December 31, 2013 and Sterling National Bank remained well capitalized with a Tier 1 leverage ratio of 10.58%.
About Sterling Bancorp
Headquartered in Montebello, N.Y., Sterling Bancorp is the holding company for Sterling National Bank, a growing financial services firm with $6.7 billion in assets that specializes in the delivery of service and solutions to business owners, their families, and consumers in communities within the greater New York City metropolitan region through teams of dedicated and experienced relationship managers. Sterling National Bank offers a complete line of commercial, business, and consumer banking products and services. For more information, visit the Sterling Bancorp web site at www.sterlingbancorp.com.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS
In addition to historical information, this earnings release may contain forward-looking statements for purposes of applicable securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties. There are a number of important factors described in documents previously filed by the Company with the Securities and Exchange Commission, and other factors that could cause the Company’s actual results to differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. In addition to factors previously disclosed in reports filed with the Securities and Exchange Commission, the following factors, among others, could cause actual results to differ materially from forward-looking statements: difficulties and delays in integrating the combined businesses of Provident New York Bancorp and Sterling Bancorp (the “Merger”) or fully realizing cost savings and other benefits; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; the reaction to the Merger of the companies’ customers, employees and counterparties; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms. These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. Actual results or future events could differ, possibly materially, from those that we anticipated in our forward-looking statements, and future results could differ materially from our historical performance. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2013. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the 10-Q to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.
Sterling Bancorp and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION (unaudited, in thousands, except share and per share data)
|
| | | | | | | | | | | | |
| | | 12/31/2013 | | 9/30/2013 | | 12/31/2012 |
| Assets: | | | | | | |
| Cash and due from banks | | $ | 152,662 |
| | $ | 113,090 |
| | $ | 160,241 |
|
| Investment securities | | 1,661,650 |
| | 1,208,392 |
| | 1,131,172 |
|
| Loans held for sale | | 24,483 |
| | 1,011 |
| | 5,423 |
|
| Loans: | | | | | | |
| Residential mortgage | | 527,425 |
| | 400,009 |
| | 352,014 |
|
| Commercial real estate | | 1,568,895 |
| | 1,277,037 |
| | 1,136,965 |
|
| Commercial and industrial | | 1,727,037 |
| | 439,787 |
| | 376,052 |
|
| Acquisition, development and construction | | 95,787 |
| | 102,494 |
| | 122,518 |
|
| Consumer | | 207,997 |
| | 193,571 |
| | 205,580 |
|
| Total loans, gross | | 4,127,141 |
| | 2,412,898 |
| | 2,193,129 |
|
| Allowance for loan losses | | (30,612 | ) | | (28,877 | ) | | (28,114 | ) |
| Total loans, net | | 4,096,529 |
| | 2,384,021 |
| | 2,165,015 |
|
| Federal Home Loan Bank stock, at cost | | 21,891 |
| | 24,312 |
| | 19,246 |
|
| Accrued interest receivable | | 16,056 |
| | 11,698 |
| | 10,429 |
|
| Premises and equipment, net | | 49,925 |
| | 36,520 |
| | 38,086 |
|
| Goodwill | | 387,517 |
| | 163,117 |
| | 163,247 |
|
| Other intangibles | | 53,020 |
| | 5,891 |
| | 6,926 |
|
| Bank owned life insurance | | 117,030 |
| | 60,914 |
| | 59,526 |
|
| Other real estate owned | | 11,751 |
| | 6,022 |
| | 7,053 |
|
| Other assets | | 74,923 |
| | 34,184 |
| | 23,150 |
|
| Total assets | | $ | 6,667,437 |
| | $ | 4,049,172 |
| | $ | 3,789,514 |
|
| Liabilities: | | | | | | |
| Deposits | | $ | 4,920,564 |
| | $ | 2,962,294 |
| | $ | 2,904,384 |
|
| FHLB and other borrowings | | 571,628 |
| | 462,953 |
| | 345,411 |
|
| Senior notes | | 98,123 |
| | 98,033 |
| | — |
|
| Subordinated debentures | | 26,519 |
| | — |
| | — |
|
| Mortgage escrow funds | | 13,460 |
| | 12,646 |
| | 19,577 |
|
| Other liabilities | | 112,034 |
| | 30,380 |
| | 26,259 |
|
| Total liabilities | | 5,742,328 |
| | 3,566,306 |
| | 3,295,631 |
|
| Stockholders’ equity | | 925,109 |
| | 482,866 |
| | 493,883 |
|
| Total liabilities and stockholders’ equity | | $ | 6,667,437 |
| | $ | 4,049,172 |
| | $ | 3,789,514 |
|
| | | | | | | |
| Shares of common stock outstanding at period end | | 83,955,647 |
| | 44,351,046 |
| | 44,348,787 |
|
| Book value per share | | $ | 11.02 |
| | $ | 10.89 |
| | $ | 11.14 |
|
| Tangible book value per share | | 5.77 |
| | 7.08 |
| | 7.30 |
|
Sterling Bancorp and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share and per share data)
|
| | | | | | | | | | | | |
| | | For the Quarter Ended |
| | | 12/31/2013 | | 9/30/2013 | | 12/31/2012 |
| Interest and dividend income: | | | | | | |
| Loans and loan fees | | $ | 43,288 |
| | $ | 27,723 |
| | $ | 27,071 |
|
| Securities taxable | | 6,903 |
| | 4,748 |
| | 4,284 |
|
| Securities non-taxable | | 2,161 |
| | 1,235 |
| | 1,457 |
|
| Other earning assets | | 359 |
| | 197 |
| | 333 |
|
| Total interest income | | 52,711 |
| | 33,903 |
| | 33,145 |
|
| Interest expense: | | | | | | |
| Deposits | | 1,834 |
| | 1,051 |
| | 2,097 |
|
| Borrowings | | 5,001 |
| | 4,744 |
| | 3,125 |
|
| Total interest expense | | 6,835 |
| | 5,795 |
| | 5,222 |
|
| Net interest income | | 45,876 |
| | 28,108 |
| | 27,923 |
|
| Provision for loan losses | | 3,000 |
| | 2,700 |
| | 2,950 |
|
| Net interest income after provision for loan losses | | 42,876 |
| | 25,408 |
| | 24,973 |
|
| Non-interest income: | | | | | | |
| Accounts receivable / factoring commissions and other fees | | 2,226 |
| | — |
| | — |
|
| Mortgage banking income | | 1,616 |
| | 297 |
| | 746 |
|
| Deposit fees and service charges | | 3,942 |
| | 2,835 |
| | 2,778 |
|
| Net (loss) gain on sale of securities | | (645 | ) | | 1,801 |
| | 1,416 |
|
| Investment management fees | | 540 |
| | 673 |
| | 705 |
|
| Bank owned life insurance | | 740 |
| | 502 |
| | 509 |
|
| Other | | 729 |
| | 492 |
| | 1,505 |
|
| Total non-interest income | | 9,148 |
| | 6,600 |
| | 7,659 |
|
| Non-interest expense: | | | | | | |
| Compensation and benefits | | 23,554 |
| | 12,409 |
| | 12,299 |
|
| Stock-based compensation plans | | 991 |
| | 513 |
| | 500 |
|
| Occupancy and office operations | | 6,333 |
| | 3,766 |
| | 3,810 |
|
| Merger-related expenses | | 9,068 |
| | 714 |
| | — |
|
| Advertising and promotion | | 309 |
| | 416 |
| | 244 |
|
| Professional fees | | 1,818 |
| | 740 |
| | 1,215 |
|
| Data and check processing | | 595 |
| | 460 |
| | 649 |
|
| Amortization of intangible assets | | 1,875 |
| | 310 |
| | 261 |
|
| FDIC insurance and regulatory assessments | | 1,164 |
| | 664 |
| | 718 |
|
| Other real estate owned expense | | 368 |
| | 390 |
| | 285 |
|
| Other | | 26,899 |
| | 2,985 |
| | 2,565 |
|
| Total non-interest expense | | 72,974 |
| | 23,367 |
| | 22,546 |
|
| Income before income tax expense | | (20,950 | ) | | 8,641 |
| | 10,086 |
|
| Income tax expense | | (6,948 | ) | | 3,312 |
| | 3,066 |
|
| Net income | | $ | (14,002 | ) | | $ | 5,329 |
| | $ | 7,020 |
|
| Basic earnings per share | | $ | (0.20 | ) | | $ | 0.12 |
| | $ | 0.16 |
|
| Diluted earnings per share | | (0.20 | ) | | 0.12 |
| | 0.16 |
|
| Dividends declared per share | | — |
| | 0.12 |
| | 0.06 |
|
| Weighted average common shares: | | | | | | |
| Basic | | 70,493,305 |
| | 43,742,903 |
| | 43,637,315 |
|
| Diluted | | 70,493,305 |
| | 43,859,834 |
| | 43,721,091 |
|
Sterling Bancorp and Subsidiaries SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)
|
| | | | | | | | | | | | | | | | | | | |
| | As of and for the Quarter Ended |
| End of Period | 12/31/2013 | | 9/30/2013 | | 6/30/2013 | | 3/31/2013 | | 12/31/2012 |
| Total assets | $ | 6,667,437 |
| | $ | 4,049,172 |
| | $ | 3,824,429 |
| | $ | 3,710,440 |
| | $ | 3,789,514 |
|
| Securities available for sale | 1,153,313 |
| | 954,393 |
| | 889,747 |
| | 945,678 |
| | 991,298 |
|
| Securities held to maturity | 508,337 |
| | 253,999 |
| | 175,977 |
| | 183,535 |
| | 139,874 |
|
Loans, gross 1 | 4,127,141 |
| | 2,412,898 |
| | 2,336,534 |
| | 2,204,555 |
| | 2,193,129 |
|
| Goodwill | 387,517 |
| | 163,117 |
| | 163,117 |
| | 163,117 |
| | 163,247 |
|
| Other intangibles | 53,020 |
| | 5,891 |
| | 6,201 |
| | 6,538 |
| | 6,926 |
|
| Deposits | 4,920,564 |
| | 2,962,294 |
| | 2,739,214 |
| | 2,799,658 |
| | 2,904,384 |
|
| Municipal deposits (included above) | 673,656 |
| | 757,066 |
| | 465,566 |
| | 537,070 |
| | 538,212 |
|
| Borrowings | 696,270 |
| | 560,986 |
| | 552,805 |
| | 367,976 |
| | 345,411 |
|
| Stockholders’ equity | 925,109 |
| | 482,866 |
| | 480,165 |
| | 494,711 |
| | 493,883 |
|
| Tangible equity | 484,572 |
| | 313,858 |
| | 310,847 |
| | 325,056 |
| | 323,710 |
|
| Average Balances | | | | | | | | | |
| Total assets | $ | 6,013,816 |
| | $ | 3,907,960 |
| | $ | 3,745,356 |
| | $ | 3,804,660 |
| | $ | 3,792,201 |
|
| Loans, gross: | | | | | | | | | |
| Residential mortgage | 491,231 |
| | 379,640 |
| | 366,823 |
| | 360,840 |
| | 344,064 |
|
| Commercial real estate | 1,466,986 |
| | 1,247,055 |
| | 1,175,094 |
| | 1,138,333 |
| | 1,107,779 |
|
| Commercial and industrial | 1,268,492 |
| | 443,349 |
| | 398,622 |
| | 368,896 |
| | 354,137 |
|
| Acquisition, development and construction | 98,691 |
| | 104,856 |
| | 114,286 |
| | 122,937 |
| | 138,881 |
|
| Consumer | 200,637 |
| | 194,718 |
| | 199,861 |
| | 203,492 |
| | 208,064 |
|
Loans, total 1 | 3,526,037 |
| | 2,369,618 |
| | 2,254,686 |
| | 2,194,498 |
| | 2,152,925 |
|
| Securities (taxable) | 1,330,646 |
| | 963,949 |
| | 909,312 |
| | 967,889 |
| | 954,372 |
|
| Securities (non-taxable) | 250,520 |
| | 157,480 |
| | 184,325 |
| | 181,803 |
| | 174,201 |
|
| Total earning assets | 5,207,436 |
| | 3,529,321 |
| | 3,378,655 |
| | 3,403,209 |
| | 3,380,875 |
|
| Deposits: | | | | | | | | | |
| Non-interest bearing demand | 1,361,622 |
| | 669,067 |
| | 625,684 |
| | 641,194 |
| | 649,077 |
|
| Interest bearing demand | 619,746 |
| | 426,602 |
| | 461,390 |
| | 508,129 |
| | 469,180 |
|
| Savings (including mortgage escrow funds) | 622,530 |
| | 601,272 |
| | 581,106 |
| | 575,380 |
| | 531,107 |
|
| Money market | 1,182,858 |
| | 715,351 |
| | 777,857 |
| | 877,101 |
| | 908,262 |
|
| Certificates of deposit | 565,462 |
| | 335,616 |
| | 338,017 |
| | 355,917 |
| | 380,244 |
|
| Total deposits and mortgage escrow | 4,352,218 |
| | 2,747,908 |
| | 2,784,054 |
| | 2,957,721 |
| | 2,937,870 |
|
| Borrowings | 709,125 |
| | 653,147 |
| | 440,579 |
| | 345,717 |
| | 345,951 |
|
| Equity | 780,241 |
| | 478,491 |
| | 494,049 |
| | 492,725 |
| | 492,506 |
|
| Tangible equity | 432,703 |
| | 309,327 |
| | 324,540 |
| | 322,683 |
| | 319,783 |
|
| Condensed Tax Equivalent Income Statement | | | | | |
| Interest and dividend income | $ | 52,711 |
| | $ | 33,903 |
| | $ | 32,593 |
| | $ | 32,420 |
| | $ | 33,145 |
|
Tax equivalent adjustment* | 1,164 |
| | 666 |
| | 808 |
| | 802 |
| | 785 |
|
| Interest expense | 6,835 |
| | 5,795 |
| | 4,276 |
| | 4,601 |
| | 5,222 |
|
| Net interest income (tax equivalent) | 47,040 |
| | 28,774 |
| | 29,125 |
| | 28,621 |
| | 28,708 |
|
| Provision for loan losses | 3,000 |
| | 2,700 |
| | 3,900 |
| | 2,600 |
| | 2,950 |
|
| Net interest income after provision for loan losses | 44,040 |
| | 26,074 |
| | 25,225 |
| | 26,021 |
| | 25,758 |
|
| Non-interest income | 9,148 |
| | 6,600 |
| | 6,581 |
| | 6,852 |
| | 7,659 |
|
| Non-interest expense | 72,974 |
| | 23,367 |
| | 21,789 |
| | 23,339 |
| | 22,546 |
|
| (Loss) income before income tax expense | (19,786 | ) | | 9,307 |
| | 10,017 |
| | 9,534 |
| | 10,871 |
|
Income tax (benefit) expense (tax equivalent)* | (5,784 | ) | | 3,978 |
| | 3,641 |
| | 3,005 |
| | 3,851 |
|
| Net (loss) income | $ | (14,002 | ) | | $ | 5,329 |
| | $ | 6,376 |
| | $ | 6,529 |
| | $ | 7,020 |
|
1 Does not reflect allowance for loan losses of $30,612, $28,877, $28,374, $27,544, and $28,114. |
*Tax exempt income assumed at a statutory 35% federal tax rate. |
Sterling Bancorp and Subsidiaries SELECTED FINANCIAL RATIOS
(unaudited, in thousands, except share and per share data)
|
| | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended |
| Per Share Data | 12/31/2013 | | 9/30/2013 | | 6/30/2013 | | 3/31/2013 | | 12/31/2012 |
| Basic earnings per share | $ | (0.20 | ) | | $ | 0.12 |
| | $ | 0.15 |
| | $ | 0.15 |
| | $ | 0.16 |
|
| Diluted earnings per share | (0.20 | ) | | 0.12 |
| | 0.15 |
| | 0.15 |
| | 0.16 |
|
| Dividends declared per share | — |
| | 0.12 |
| | 0.06 |
| | 0.06 |
| | 0.06 |
|
| Tangible book value per share | 5.77 |
| | 7.08 |
| | 7.01 |
| | 7.33 |
| | 7.30 |
|
| Shares of common stock outstanding | 83,955,647 |
| | 44,351,046 |
| | 44,353,276 |
| | 44,353,276 |
| | 44,348,787 |
|
| Basic weighted average common shares outstanding | 70,493,305 |
| | 43,742,903 |
| | 43,801,867 |
| | 43,743,640 |
| | 43,637,315 |
|
| Diluted weighted average common shares outstanding | 70,493,305 |
| | 43,859,834 |
| | 43,906,158 |
| | 43,848,486 |
| | 43,721,091 |
|
| Performance Ratios (annualized) | | | | | | | | | |
| Return on average assets | (0.92 | )% | | 0.54 | % | | 0.68 | % | | 0.70 | % | | 0.73 | % |
| Return on average equity | (7.12 | )% | | 4.42 | % | | 5.18 | % | | 5.37 | % | | 5.65 | % |
Return on average tangible equity 1 | (12.84 | )% | | 6.83 | % | | 7.88 | % | | 8.21 | % | | 8.71 | % |
Core operating efficiency 1 | 65.4 | % | | 64.7 | % | | 59.1 | % | | 67.4 | % | | 63.7 | % |
| Analysis of Net Interest Income | | | | | | | | | |
| Yield on loans | 4.88 | % | | 4.70 | % | | 4.80 | % | | 4.93 | % | | 5.04 | % |
Yield on investment securities - tax equivalent2 | 2.57 | % | | 2.35 | % | | 2.38 | % | | 2.32 | % | | 2.29 | % |
Yield on earning assets - tax equivalent2 | 4.10 | % | | 3.89 | % | | 3.97 | % | | 3.96 | % | | 3.98 | % |
| Cost of deposits | 0.17 | % | | 0.15 | % | | 0.17 | % | | 0.22 | % | | 0.28 | % |
| Cost of borrowings | 2.80 | % | | 2.88 | % | | 2.84 | % | | 3.49 | % | | 3.58 | % |
| Cost of interest bearing liabilities | 0.73 | % | | 0.84 | % | | 0.66 | % | | 0.70 | % | | 0.79 | % |
Net interest rate spread - tax equivalent basis2 | 3.37 | % | | 3.05 | % | | 3.31 | % | | 3.26 | % | | 3.19 | % |
Net interest margin - tax equivalent basis2 | 3.58 | % | | 3.23 | % | | 3.46 | % | | 3.41 | % | | 3.37 | % |
| Capital | | | | | | | | | |
| Tier 1 leverage ratio - Bank only | 10.58 | % | | 9.33 | % | | 8.49 | % | | 8.62 | % | | 8.23 | % |
| Tier 1 risk-based capital - Bank only | $ | 593,462 |
| | $ | 363,274 |
| | $ | 311,507 |
| | $ | 304,696 |
| | $ | 297,089 |
|
| Total risk-based capital - Bank only | 624,469 |
| | 392,376 |
| | 340,077 |
| | 332,447 |
| | 325,410 |
|
Tangible equity as a % of tangible assets - consolidated 1 | 7.78 | % | | 8.09 | % | | 8.50 | % | | 9.18 | % | | 8.94 | % |
| Asset Quality | | | | | | | | | |
| Non-performing loans (NPLs) non-accrual | $ | 35,386 |
| | $ | 22,807 |
| | $ | 27,244 |
| | $ | 27,019 |
| | $ | 27,730 |
|
| Non-performing loans (NPLs) still accruing | 3,056 |
| | 4,099 |
| | 4,216 |
| | 4,257 |
| | 5,823 |
|
| Other real estate owned | 11,751 |
| | 6,022 |
| | 4,376 |
| | 5,486 |
| | 7,053 |
|
| Non-performing assets (NPAs) | 50,193 |
| | 32,928 |
| | 35,836 |
| | 36,762 |
| | 40.606 |
|
| Net charge-offs | 1,265 |
| | 2,197 |
| | 3,070 |
| | 3,170 |
| | 3,118 |
|
| Net charge-offs as a % of average loans (annualized) | 0.14 | % | | 0.37 | % | | 0.54 | % | | 0.58 | % | | 0.58 | % |
| NPLs as a % of total loans | 0.93 | % | | 1.12 | % | | 1.35 | % | | 1.42 | % | | 1.53 | % |
| NPAs as a % of total assets | 0.75 | % | | 0.81 | % | | 0.94 | % | | 0.99 | % | | 1.07 | % |
| Allowance for loan losses as a % of NPLs | 79.6 | % | | 107.3 | % | | 90.2 | % | | 88.1 | % | | 83.8 | % |
| Allowance for loan losses as a % of total loans | 0.74 | % | | 1.20 | % | | 1.21 | % | | 1.25 | % | | 1.28 | % |
Allowance for loan losses as a % of total loans, excluding Gotham and legacy Sterling loans1 | 1.24 | % | | 1.27 | % | | 1.30 | % | | 1.36 | % | | 1.41 | % |
| Special mention loans | $ | 38,834 |
| | $ | 13,530 |
| | $ | 24,327 |
| | $ | 41,778 |
| | $ | 29,755 |
|
| Substandard / doubtful loans | 77,337 |
| | 61,095 |
| | 62,165 |
| | 70,688 |
| | 83,109 |
|
1 See reconciliation of non-GAAP measure on following page. | | | | | | | | |
2 Tax equivalent adjustment represents interest income earned on municipal securities divided by the applicable Federal tax rate of 35% for all periods presented. |
Sterling Bancorp and Subsidiaries NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands, except share and per share data)
|
| | | | | | | | | | | | | | | | | | | | |
| | As of and for the Quarter Ended |
| | 12/31/2013 | | 9/30/2013 | | 6/30/2013 | | 3/31/2013 | | 12/31/2012 |
| The Company provides supplemental reporting of non-GAAP measures as management believes this information is useful to investors. |
| The following table shows the reconciliation of stockholders’ equity to tangible equity and the tangible equity ratio: |
| Total assets | $ | 6,667,437 |
| | $ | 4,049,172 |
| | $ | 3,824,429 |
| | $ | 3,710,440 |
| | $ | 3,789,514 |
|
| Goodwill and other intangibles | (440,537 | ) | | (169,008 | ) | | (169,318 | ) | | (169,655 | ) | | (170,173 | ) |
| Tangible assets | 6,226,900 |
| | 3,880,164 |
| | 3,655,111 |
| | 3,540,785 |
| | 3,619,341 |
|
| Stockholders’ equity | 925,109 |
| | 482,866 |
| | 480,165 |
| | 494,711 |
| | 493,883 |
|
| Goodwill and other intangibles | (440,537 | ) | | (169,008 | ) | | (169,318 | ) | | (169,655 | ) | | (170,173 | ) |
| Tangible stockholders’ equity | 484,572 |
| | 313,858 |
| | 310,847 |
| | 325,056 |
| | 323,710 |
|
| Shares of common stock outstanding at period end | 83,955,647 |
| | 44,351,046 |
| | 44,353,276 |
| | 44,353,276 |
| | 44,348,787 |
|
| Tangible equity as a % of tangible assets | 7.78 | % | | 8.09 | % | | 8.50 | % | | 9.18 | % | | 8.94 | % |
| Tangible book value per share | $ | 5.77 |
| | $ | 7.08 |
| | $ | 7.01 |
| | $ | 7.33 |
| | $ | 7.30 |
|
| The Company believes that tangible equity is useful as a tool to help assess a company’s capital position. |
| |
| The following table shows the reconciliation of return on average tangible equity: |
| Average stockholders’ equity | $ | 780,241 |
| | $ | 478,491 |
| | $ | 494,049 |
| | $ | 492,725 |
| | $ | 492,506 |
|
| Average goodwill and other` intangibles | (347,538 | ) | | (169,164 | ) | | (169,509 | ) | | (170,042 | ) | | (172,723 | ) |
| Average tangible stockholders’ equity | 432,703 |
| | 309,327 |
| | 324,540 |
| | 322,683 |
| | 319,783 |
|
| Net (loss) income | (14,002 | ) | | 5,329 |
| | 6,376 |
| | 6,529 |
| | 7,020 |
|
| Net (loss) income, if annualized | (55,551 | ) | | 21,142 |
| | 25,574 |
| | 26,479 |
| | 27,851 |
|
| Return on average tangible equity | (12.84 | )% | | 6.83 | % | | 7.88 | % | | 8.21 | % | | 8.71 | % |
| The Company believes that the return on average tangible stockholders’ equity is useful as a tool to help assess a company’s use of tangible equity. |
| |
| The following table shows the reconciliation of the allowance for loan losses to total loans and to total loans excluding Gotham and legacy Sterling Bancorp loans: |
| Total loans | $ | 4,127,141 |
| | $ | 2,412,898 |
| | $ | 2,336,534 |
| | $ | 2,204,555 |
| | $ | 2,193,129 |
|
| Gotham loans | (117,046 | ) | | (133,493 | ) | | (152,825 | ) | | (176,383 | ) | | (194,518 | ) |
| Legacy Sterling loans | (1,539,962 | ) | | — |
| | — |
| | — |
| | — |
|
| Total loans, excluding Gotham and legacy Sterling loans | 2,470,133 |
| | 2,279,405 |
| | 2,183,709 |
| | 2,028,172 |
| | 1,998,611 |
|
| Allowance for loan losses | 30,612 |
| | 28,877 |
| | 28,374 |
| | 27,544 |
| | 28,114 |
|
| Allowance for loan losses to total loans | 0.74 | % | | 1.20 | % | | 1.21 | % | | 1.25 | % | | 1.28 | % |
| Allowance for loan losses to total loans, excluding Gotham and legacy Sterling loans | 1.24 | % | | 1.27 | % | | 1.30 | % | | 1.36 | % | | 1.41 | % |
| As required by GAAP, the Company recorded at fair value the loans acquired in the Gotham and legacy Sterling transactions. These loans carry no allowance for loan losses for the periods reflected above. |
Sterling Bancorp and Subsidiaries NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands, except share and per share data)
|
| | | | | | | | | | | | | | | | | | | | |
| | As of and for the Quarter Ended |
| | 12/31/2013 | | 9/30/2013 | | 6/30/2013 | | 3/31/2013 | | 12/31/2012 |
| The following table shows the reconciliation of the core operating efficiency ratio: |
| Net interest income | $ | 45,876 |
| | $ | 28,108 |
| | $ | 28,317 |
| | $ | 27,819 |
| | $ | 27,923 |
|
| Non-interest income | 9,148 |
| | 6,600 |
| | 6,581 |
| | 6,852 |
| | 7,659 |
|
| Total net revenues | 55,024 |
| | 34,708 |
| | 34,898 |
| | 34,671 |
| | 35,582 |
|
| Tax equivalent adjustment on securities interest income | 1,164 |
| | 666 |
| | 808 |
| | 802 |
| | 785 |
|
| Net loss (gain) on sale of securities | 645 |
| | (1,801 | ) | | (1,945 | ) | | (2,229 | ) | | (1,416 | ) |
| Other than temporary loss on securities | — |
| | — |
| | — |
| | 7 |
| | 25 |
|
| Other (other gains and fair value loss on interest rate caps) | (93 | ) | | 81 |
| | — |
| | — |
| | (4 | ) |
| Core total revenues | 56,740 |
| | 33,654 |
| | 33,761 |
| | 33,251 |
| | 34,972 |
|
| Non-interest expense | 72,974 |
| | 23,367 |
| | 21,789 |
| | 23,339 |
| | 22,546 |
|
| Merger-related expenses | (9,068 | ) | | (714 | ) | | (1,516 | ) | | (542 | ) | | — |
|
| Charge for asset write-downs, retention and severance compensation | (22,167 | ) | | (564 | ) | | — |
| | — |
| | — |
|
| Charge on pension plan settlement | (2,743 | ) | | — |
| | — |
| | — |
| | — |
|
| Amortization of intangible assets | (1,875 | ) | | (310 | ) | | (337 | ) | | (388 | ) | | (261 | ) |
| Core non-interest expense | 37,121 |
| | 21,779 |
| | 19,936 |
| | 22,409 |
| | 22,285 |
|
| Core efficiency ratio | 65.4 | % | | 64.7 | % | | 59.1 | % | | 67.4 | % | | 63.7 | % |
| The Company believes the core operating efficiency ratio is a useful tool to help assess a company’s core operating performance. |
| | | |
|
| | | | | | |
| The following table shows the reconciliation of net (loss) income and (loss) earnings per share excluding merger-related expenses, charge for asset write-downs, retention and severance compensation, a charge on settlement of a portion of the defined benefit pension plans and amortization of non-compete agreements: |
| (Loss) income before income tax expense | $ | (20,950 | ) | | $ | 8,641 |
| | $ | 9,209 |
| | $ | 8,732 |
| | $ | 10,086 |
|
| Income tax (benefit) expense | (6,948 | ) | | 3,312 |
| | 2,833 |
| | 2,203 |
| | 3,066 |
|
| Net (loss) income | (14,002 | ) | | 5,329 |
| | 6,376 |
| | 6,529 |
| | 7,020 |
|
| | | | | | | | | | |
| Merger-related expenses | 9,068 |
| | 714 |
| | 1,516 |
| | 542 |
| | — |
|
| Charge for asset write-downs, retention and severance compensation | 22,167 |
| | 564 |
| | — |
| | — |
| | — |
|
| Charge on pension plan settlement | 2,743 |
| | — |
| | — |
| | — |
| | — |
|
| Amortization of non-compete agreements | 998 |
| | — |
| | — |
| | — |
| | — |
|
| Total charges | 34,976 |
| | 1,278 |
| | 1,516 |
| | 542 |
| | — |
|
| Income tax (benefit) | (11,600 | ) | | (490 | ) | | (466 | ) | | (137 | ) | | — |
|
| Total charges net of tax benefit | 23,376 |
| | 788 |
| | 1,050 |
| | 405 |
| | — |
|
| Net income excluding total charges | $ | 9,374 |
| | $ | 6,117 |
| | $ | 7,426 |
| | $ | 6,934 |
| | $ | 7,020 |
|
| | | | | | | | | | |
Weighted Average Diluted shares1 | 70,707,292 |
| | 43,859,834 |
| | 43,906,158 |
| | 43,848,486 |
| | 43,721,091 |
|
| Diluted EPS as reported | $ | (0.20 | ) | | $ | 0.12 |
| | $ | 0.15 |
| | $ | 0.15 |
| | $ | 0.16 |
|
| Diluted EPS excluding total charges | 0.13 |
| | 0.14 |
| | 0.17 |
| | 0.16 |
| | 0.16 |
|
| The Company believes the presentation of its net income excluding total charges provides a useful tool to help assess a company’s profitability. |
1 Represents diluted share calculation to compute diluted EPS. |
