EXHIBIT 99.1
NEWS RELEASE
| For More Information Contact: | For Release - July 19, 2011 |
Chris Reid, Vice President and Director of Investor Relations, (713) 507-2873 Media: Graham Painter, Executive Vice President and Director of Corporate Communication, (713) 507-2770 |
STERLING BANCSHARES REPORTS SECOND QUARTER 2011 RESULTS
HOUSTON, TX, July 19, 2011 – Sterling Bancshares, Inc. (Nasdaq: SBIB) today reported a net loss from continuing operations of $2.9 million, or $0.03 per diluted share, for the second quarter ended June 30, 2011, compared to a net loss from continuing operations of $495 thousand, or $0.00 per diluted share for the first quarter of 2011.
The Company recorded a loss on discontinued operations of $9.0 million during the second quarter of 2011. This loss was the result of Sterling Bank entering into an agreement to sell all of the shares of MBM Advisors, Inc. (MBM), a wholly-owned subsidiary of Sterling Bank that provides investment advisory and pension administration and consulting services. This sale is expected to close in the third quarter of 2011 following the completion of the Company’s pending merger with Comerica which is expected to close on July 28, 2011. As such, MBM’s operations and the estimated loss on sale are presented as discontinued operations beginning in the second quarter of 2011.
For the second quarter of 2011, loans decreased $191 million or 7.3% to $2.4 billion at June 30, 2011. This decrease was due primarily to combined reductions of $91 million in commercial real estate and construction and development loans, resulting from the Company’s continued efforts to reduce exposure to these loan types. Commercial and industrial loans decreased $87 million during the second quarter of 2011 due to continued low loan demand and line usage.
At June 30, 2011, total deposits were $4.1 billion, an increase of $11.6 million compared to March 31, 2011. This increase was primarily related to growth in interest-bearing demand deposits.
Nonperforming assets were $202 million at June 30, 2011, an increase of $15.9 million compared to March 31, 2011. The increase in nonperforming assets during the quarter was due to an increase in nonperforming commercial real estate loans.
At June 30, 2011, the total allowance for loan losses was $78.0 million or 3.24% of period-end total loans, up from $75.5 million or 2.90% of period-end total loans at March 31, 2011. Net charge-offs for the second quarter of 2011 were $6.7 million or 1.06% of average total loans, compared to $12.4 million or 1.87% of average total loans for the first quarter of 2011. The provision for credit losses decreased $1.6 million on a linked-quarter basis due primarily to lower charge-offs during the second quarter.
Tax-equivalent net interest income for the second quarter of 2011 was $38.9 million, down slightly on a linked-quarter basis. Tax-equivalent net interest margin was 3.39% for the second quarter of 2011, down 13 basis points from 3.52% for the first quarter of 2011. The decrease in the net interest margin during the second quarter of 2011 was due to a decrease in average loans of $138 million which resulted in an increase in lower-yielding average interest-bearing cash of $129 million.
Sterling Bancshares, Inc., News Release
July 19, 2011
Page 2
Noninterest income for the second quarter of 2011 was $5.9 million, a decrease of $2.6 million compared to the first quarter of 2011. Net losses on securities were $1.1 million and $429 thousand for the second and first quarters of 2011, respectively. These losses were due to the sale of certain securities that were downgraded to below investment grade during their respective quarters. Other noninterest income decreased $1.7 million for the second quarter of 2011 compared to the first quarter of 2011 due to payout claims on certain bank-owned life insurance policies during the first quarter.
Total noninterest expense for the second quarter of 2011 was $40.6 million, an increase of $916 thousand compared to the first quarter of 2011. Other noninterest expense increased $3.8 million due to additional write-downs on foreclosed assets. The increase in other noninterest expense was offset by a decrease in salaries and benefits and FDIC insurance assessments of $1.4 million and $501 thousand, respectively on a linked-quarter basis. Additionally, professional fees decreased $837 thousand on a linked-quarter basis due primarily to legal fees that were incurred during the first quarter of 2011 in connection with the pending merger with Comerica.
As of June 30, 2011, Sterling had total assets of $5.1 billion, total loans of $2.4 billion and total deposits of $4.1 billion. Shareholders’ equity of $621 million at June 30, 2011, was 12.26% of total assets. Book value per common share at period-end was $6.07. Tangible capital ratio was 9.16% and all regulatory capital ratios were in excess of those considered to be well-capitalized at June 30, 2011.
Forward-Looking Statements
Any statements in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “believes,” “feels,” “expects,” “estimates,” “seeks,” “strives,” “plans,” “intends,” “outlook,” “forecast,” “position,” “target,” “mission,” “assume,” “achievable,” “potential,” “strategy,” “goal,” “aspiration,” “opportunity,” “initiative,” “outcome,” “continue,” “remain,” “maintain,” “trend,” “objective” and variations of such words and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions, as they relate to Comerica Incorporated (“Comerica”) , Sterling, the proposed transaction or the combined company following the transaction often identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of management based on information known to management as of the date of this filing and do not purport to speak as of any other date. Forward-looking statements may include descriptions of the expected benefits and costs of the transaction; forecasts of revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries; management plans relating to the transaction; the expected timing of the completion of the transaction; the ability to complete the transaction; the ability to obtain any required regulatory or other approvals; any statements of the plans and objectives of management for future or past operations, products or services, including the execution of integration plans; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Such statements reflect the view of management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, actual results could differ materially from those anticipated by the forward-looking statements or historical results. Factors that could cause or contribute to such differences include, but are not limited to, the possibility that expected benefits may not materialize in the timeframe expected or at all, or may be more costly to achieve; that the transaction may not be timely completed, if at all; that prior to the completion of the transaction or thereafter, Comerica’s and Sterling’s respective businesses may not perform as expected due to transaction-related uncertainty or other factors; that the parties are unable to successfully implement integration strategies; that required regulatory or other approvals are not obtained or other closing conditions are not satisfied in a timely manner or at all; reputational risks and the reaction of the companies’ customers to the transaction; diversion of management time on merger-related issues; and those factors referenced in Comerica’s and Sterling’s filings with the Securities and Exchange Commission (the “SEC”). Forward-looking statements speak only as of the date they are made. Comerica and Sterling do not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this release or in any documents, Comerica and Sterling claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Sterling Bancshares, Inc., News Release
July 19, 2011
Page 3
Additional Information
Management of Sterling will not host a conference call.
As previously announced, on January 16, 2011, Sterling Bancshares, Inc, and Comerica Incorporated, a company headquartered in Dallas, Texas, agreed to a strategic business combination in which Sterling will merge with Comerica. The transaction is expected to close on July 28, 2011, following the expiration of the required 15-day Department of Justice waiting period that is detailed in the Federal Reserve Board’s approval order issued on July 13, 2011.
In connection with the proposed merger transaction, Comerica has filed with the SEC a Registration Statement on Form S-4 that includes a Proxy Statement of Sterling and a Prospectus of Comerica, and Sterling mailed the definitive Proxy Statement/Prospectus to its shareholders on or about April 6, 2011. Each of Comerica and Sterling may file other relevant documents concerning the proposed transaction. SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
A free copy of the definitive Proxy Statement/Prospectus, as well as other filings containing information about Comerica and Sterling, may be obtained at the SEC’s Internet site (http://www.sec.gov). You may be able to obtain these documents, free of charge, from Comerica at www.comerica.com under the tab “Investor Relations” and then under the heading “SEC Filings” or from Sterling by accessing Sterling’s website at www.banksterling.com under the tab “Investor Relations” and then under the heading “SEC Filings.”
About Sterling Bancshares
Sterling Bancshares, Inc. is a Houston-based bank holding company with total assets of $5.1 billion, which operates 57 banking centers in the greater metropolitan areas of Houston, San Antonio, Dallas and Fort Worth, Texas. The Company’s common stock is traded through the NASDAQ Global Select Market under the symbol “SBIB”. For more information on Sterling Bancshares, please visit the Company’s web site at http://www.banksterling.com.
–Tables to follow–
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands, except for per share data)
Page 4
| Quarter Ended | Year-to-date | |||||||||||||||||||
| Jun. 30, | Mar. 31, | Jun. 30, | ||||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| Profitability | ||||||||||||||||||||
| Income (loss) from continuing operations | $ | (2,860 | ) | $ | (495 | ) | $ | 545 | $ | (3,355 | ) | $ | (5,917 | ) | ||||||
| Income (loss) from discontinued operations | (8,974 | ) | 125 | 51 | (8,849 | ) | 265 | |||||||||||||
| Net income (loss) | (11,834 | ) | (370 | ) | 596 | (12,204 | ) | (5,652 | ) | |||||||||||
| Earnings (loss) per share from continuing operations (1) | ||||||||||||||||||||
| Basic | $ | (0.03 | ) | $ | (0.00 | ) | $ | 0.01 | $ | (0.03 | ) | $ | (0.06 | ) | ||||||
| Diluted | $ | (0.03 | ) | $ | (0.00 | ) | $ | 0.01 | $ | (0.03 | ) | $ | (0.06 | ) | ||||||
| Earnings (loss) per share from discontinuing operations (1) | ||||||||||||||||||||
| Basic | $ | (0.09 | ) | $ | 0.00 | $ | 0.00 | $ | (0.09 | ) | $ | 0.00 | ||||||||
| Diluted | $ | (0.09 | ) | $ | 0.00 | $ | 0.00 | $ | (0.09 | ) | $ | 0.00 | ||||||||
| Earnings (loss) per share (1) | ||||||||||||||||||||
| Basic | $ | (0.12 | ) | $ | (0.00 | ) | $ | 0.01 | $ | (0.12 | ) | $ | (0.06 | ) | ||||||
| Diluted | $ | (0.12 | ) | $ | (0.00 | ) | $ | 0.01 | $ | (0.12 | ) | $ | (0.06 | ) | ||||||
| Return on average common equity (2) | ||||||||||||||||||||
| Continuing operations | (1.82 | )% | (0.32 | )% | 0.35 | % | (1.08 | )% | (1.99 | )% | ||||||||||
| Total | (7.52 | )% | (0.24 | )% | 0.38 | % | (3.92 | )% | (1.90 | )% | ||||||||||
| Return on average assets (2) | ||||||||||||||||||||
| Continuing operations | (0.23 | )% | (0.04 | )% | 0.04 | % | (0.13 | )% | (0.24 | )% | ||||||||||
| Total | (0.94 | )% | (0.03 | )% | 0.05 | % | (0.49 | )% | (0.23 | )% | ||||||||||
| Tax equivalent net interest margin (3) | 3.39 | % | 3.52 | % | 3.74 | % | 3.45 | % | 3.88 | % | ||||||||||
| Efficiency Ratio (4): | ||||||||||||||||||||
| Consolidated | 88.31 | % | 81.14 | % | 78.28 | % | 84.61 | % | 77.23 | % | ||||||||||
| Sterling Bank | 84.64 | % | 76.02 | % | 75.86 | % | 80.19 | % | 74.63 | % | ||||||||||
| Liquidity and Capital Ratios | ||||||||||||||||||||
| Average loans to average deposits | 61.98 | % | 65.32 | % | 73.39 | % | 63.64 | % | 75.97 | % | ||||||||||
| Period-end stockholders' equity to total assets | 12.26 | % | 12.34 | % | 12.30 | % | 12.26 | % | 12.30 | % | ||||||||||
| Average stockholders' equity to average assets | 12.47 | % | 12.35 | % | 12.28 | % | 12.41 | % | 11.96 | % | ||||||||||
| Period-end tangible capital to total tangible assets | 9.16 | % | 9.06 | % | 9.01 | % | 9.16 | % | 9.01 | % | ||||||||||
| Tier 1 capital to risk-weighted assets | 16.50 | % | 15.41 | % | 14.45 | % | 16.50 | % | 14.45 | % | ||||||||||
| Total capital to risk-weighted assets | 18.97 | % | 18.13 | % | 17.04 | % | 18.97 | % | 17.04 | % | ||||||||||
| Tier 1 leverage ratio (Tier 1 capital to average assets) | 10.12 | % | 10.08 | % | 10.32 | % | 10.12 | % | 10.32 | % | ||||||||||
| Other Data | ||||||||||||||||||||
| Shares used in computing earnings (loss) per common share | ||||||||||||||||||||
| Basic shares | 102,165 | 102,034 | 101,898 | 102,100 | 95,227 | |||||||||||||||
| Diluted shares | 102,165 | 102,034 | 102,144 | 102,100 | 95,227 | |||||||||||||||
| End of period common shares outstanding | 102,180 | 102,141 | 101,927 | 102,180 | 101,927 | |||||||||||||||
| Book value per common share at period-end | $ | 6.07 | $ | 6.10 | $ | 6.13 | $ | 6.07 | $ | 6.13 | ||||||||||
| Cash dividends paid per common share | $ | 0.015 | $ | 0.015 | $ | 0.015 | $ | 0.030 | $ | 0.030 | ||||||||||
| Common stock dividend payout ratio | N/M | N/M | 256.65 | % | N/M | N/M | ||||||||||||||
| Full-time equivalent employees | 896 | 938 | 991 | 896 | 991 | |||||||||||||||
| Number of banking centers | 57 | 57 | 57 | 57 | 57 | |||||||||||||||
STERLING BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands)
Page 5
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and cash equivalents | $ | 742,880 | $ | 462,700 | $ | 502,894 | $ | 366,590 | $ | 359,388 | ||||||||||
| Available-for-sale securities, at fair value | 1,298,567 | 1,343,536 | 1,287,555 | 1,169,519 | 1,069,964 | |||||||||||||||
| Held-to-maturity securities, at amortized cost | 235,326 | 246,768 | 265,080 | 280,215 | 280,658 | |||||||||||||||
| Loans held for sale | 2,709 | 1,877 | 2,691 | 7,123 | 6,509 | |||||||||||||||
| Loans held for investment | 2,407,942 | 2,599,778 | 2,752,349 | 2,862,952 | 2,992,370 | |||||||||||||||
| Total loans | 2,410,651 | 2,601,655 | 2,755,040 | 2,870,075 | 2,998,879 | |||||||||||||||
| Allowance for loan losses | (78,002 | ) | (75,535 | ) | (77,141 | ) | (80,754 | ) | (80,983 | ) | ||||||||||
| Loans, net | 2,332,649 | 2,526,120 | 2,677,899 | 2,789,321 | 2,917,896 | |||||||||||||||
| Premises and equipment, net | 48,811 | 49,618 | 49,421 | 48,507 | 47,812 | |||||||||||||||
| Real estate acquired by foreclosure | 46,158 | 49,826 | 37,064 | 14,571 | 18,151 | |||||||||||||||
| Goodwill | 165,309 | 173,210 | 173,210 | 173,210 | 173,210 | |||||||||||||||
| Core deposits and other intangibles, net | 7,302 | 8,951 | 9,477 | 10,004 | 10,540 | |||||||||||||||
| Accrued interest receivable | 13,290 | 13,588 | 14,673 | 14,356 | 14,951 | |||||||||||||||
| Other assets | 171,064 | 175,230 | 174,680 | 173,328 | 183,429 | |||||||||||||||
| TOTAL ASSETS | $ | 5,061,356 | $ | 5,049,547 | $ | 5,191,953 | $ | 5,039,621 | $ | 5,075,999 | ||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| LIABILITIES: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 1,268,801 | $ | 1,287,921 | $ | 1,322,492 | $ | 1,248,321 | $ | 1,266,781 | ||||||||||
| Interest-bearing demand | 2,160,404 | 2,084,062 | 2,138,822 | 2,014,207 | 1,962,854 | |||||||||||||||
| Certificates and other time deposits | 699,642 | 745,301 | 796,116 | 840,683 | 921,495 | |||||||||||||||
| Total deposits | 4,128,847 | 4,117,284 | 4,257,430 | 4,103,211 | 4,151,130 | |||||||||||||||
| Other borrowed funds | 111,959 | 109,701 | 112,202 | 106,546 | 100,770 | |||||||||||||||
| Subordinated debt | 77,690 | 77,673 | 78,059 | 78,624 | 78,247 | |||||||||||||||
| Junior subordinated debt | 82,734 | 82,734 | 82,734 | 82,734 | 82,734 | |||||||||||||||
| Accrued interest payable and other liabilities | 39,578 | 39,074 | 39,604 | 41,704 | 38,722 | |||||||||||||||
| Total liabilities | 4,440,808 | 4,426,466 | 4,570,029 | 4,412,819 | 4,451,603 | |||||||||||||||
| COMMITMENTS AND CONTINGENCIES | - | - | - | - | - | |||||||||||||||
| SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| Common stock | 104,047 | 104,008 | 103,852 | 103,820 | 103,795 | |||||||||||||||
| Capital surplus | 242,092 | 241,280 | 239,940 | 238,536 | 238,186 | |||||||||||||||
| Retained earnings | 275,533 | 288,901 | 290,800 | 290,429 | 287,503 | |||||||||||||||
| Treasury stock | (21,399 | ) | (21,399 | ) | (21,399 | ) | (21,399 | ) | (21,399 | ) | ||||||||||
| Accumulated other comprehensive income, net of tax | 20,275 | 10,291 | 8,731 | 15,416 | 16,311 | |||||||||||||||
| Total shareholders' equity | 620,548 | 623,081 | 621,924 | 626,802 | 624,396 | |||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 5,061,356 | $ | 5,049,547 | $ | 5,191,953 | $ | 5,039,621 | $ | 5,075,999 | ||||||||||
STERLING BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(dollars in thousands, except for per share data)
Page 6
| Quarter Ended | Year-to-date | |||||||||||||||||||||||||||
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | 2011 | 2010 | ||||||||||||||||||||||
| Interest income: | ||||||||||||||||||||||||||||
| Loans, including fees | $ | 33,057 | $ | 34,906 | $ | 37,003 | $ | 40,153 | $ | 42,087 | $ | 67,963 | $ | 85,736 | ||||||||||||||
| Securities: | ||||||||||||||||||||||||||||
| Taxable | 10,904 | 10,359 | 9,342 | 9,841 | 9,602 | 21,263 | 18,719 | |||||||||||||||||||||
| Non-taxable | 1,027 | 1,044 | 1,028 | 1,013 | 915 | 2,071 | 1,840 | |||||||||||||||||||||
| Deposits in financial institutions | 294 | 209 | 258 | 157 | 231 | 503 | 346 | |||||||||||||||||||||
| Other interest-earning assets | 2 | 2 | 2 | 1 | 3 | 4 | 4 | |||||||||||||||||||||
| Total interest income | 45,284 | 46,520 | 47,633 | 51,165 | 52,838 | 91,804 | 106,645 | |||||||||||||||||||||
| Interest expense: | ||||||||||||||||||||||||||||
| Demand and savings deposits | 2,683 | 2,660 | 3,158 | 3,583 | 4,319 | 5,343 | 8,531 | |||||||||||||||||||||
| Certificates and other time deposits | 1,655 | 1,937 | 2,328 | 2,823 | 3,159 | 3,592 | 6,511 | |||||||||||||||||||||
| Other borrowed funds | 771 | 764 | 781 | 784 | 768 | 1,535 | 1,216 | |||||||||||||||||||||
| Subordinated debt | 700 | 696 | 714 | 747 | 705 | 1,396 | 1,392 | |||||||||||||||||||||
| Junior subordinated debt | 1,040 | 1,034 | 1,043 | 1,071 | 1,040 | 2,074 | 2,068 | |||||||||||||||||||||
| Total interest expense | 6,849 | 7,091 | 8,024 | 9,008 | 9,991 | 13,940 | 19,718 | |||||||||||||||||||||
| Net interest income | 38,435 | 39,429 | 39,609 | 42,157 | 42,847 | 77,864 | 86,927 | |||||||||||||||||||||
| Provision for credit losses | 9,200 | 10,800 | 5,250 | 7,716 | 9,336 | 20,000 | 32,272 | |||||||||||||||||||||
| Net interest income after provision for credit losses | 29,235 | 28,629 | 34,359 | 34,441 | 33,511 | 57,864 | 54,655 | |||||||||||||||||||||
| Noninterest income: | ||||||||||||||||||||||||||||
| Customer service fees | 3,159 | 3,284 | 3,569 | 3,728 | 3,591 | 6,443 | 7,079 | |||||||||||||||||||||
| Net gain (loss) on securities | (1,138 | ) | (429 | ) | (136 | ) | 43 | 17 | (1,567 | ) | 37 | |||||||||||||||||
| Wealth management fees | 269 | 342 | 362 | 351 | 651 | 611 | 1,207 | |||||||||||||||||||||
| Other | 3,566 | 5,298 | 3,333 | 3,927 | 2,752 | 8,864 | 3,540 | |||||||||||||||||||||
| Total noninterest income | 5,856 | 8,495 | 7,128 | 8,049 | 7,011 | 14,351 | 11,863 | |||||||||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||||||||
| Salaries and employee benefits | 17,182 | 18,570 | 18,975 | 19,735 | 19,466 | 35,752 | 39,055 | |||||||||||||||||||||
| Occupancy | 5,784 | 5,959 | 6,010 | 5,493 | 5,637 | 11,743 | 11,351 | |||||||||||||||||||||
| Technology | 1,974 | 1,965 | 2,052 | 2,148 | 2,214 | 3,939 | 4,501 | |||||||||||||||||||||
| Professional fees | 1,612 | 2,449 | 2,202 | 1,433 | 1,319 | 4,061 | 3,299 | |||||||||||||||||||||
| Postage, delivery and supplies | 567 | 533 | 578 | 627 | 689 | 1,100 | 1,369 | |||||||||||||||||||||
| Marketing | 80 | 63 | 216 | 198 | 271 | 143 | 540 | |||||||||||||||||||||
| Core deposits and other intangibles amortization | 507 | 526 | 527 | 537 | 537 | 1,033 | 1,086 | |||||||||||||||||||||
| FDIC insurance assessments | 1,637 | 2,138 | 2,667 | 2,478 | 2,438 | 3,775 | 4,985 | |||||||||||||||||||||
| Other | 11,223 | 7,447 | 6,855 | 3,690 | 6,799 | 18,670 | 10,782 | |||||||||||||||||||||
| Total noninterest expense | 40,566 | 39,650 | 40,081 | 36,339 | 39,370 | 80,216 | 76,968 | |||||||||||||||||||||
| Income (loss) from continuing operations before income taxes | (5,475 | ) | (2,526 | ) | 1,406 | 6,151 | 1,152 | (8,001 | ) | (10,450 | ) | |||||||||||||||||
| Income tax provision (benefit) | (2,615 | ) | (2,031 | ) | (283 | ) | 1,669 | 607 | (4,646 | ) | (4,533 | ) | ||||||||||||||||
| Income (loss) from continuing operations | $ | (2,860 | ) | $ | (495 | ) | $ | 1,689 | $ | 4,482 | $ | 545 | $ | (3,355 | ) | $ | (5,917 | ) | ||||||||||
| Income (loss) from discontinued operations before income taxes | (8,936 | ) | 192 | 326 | (0 | ) | 78 | (8,744 | ) | 407 | ||||||||||||||||||
| Income tax provision | 38 | 67 | 114 | 27 | 27 | 105 | 142 | |||||||||||||||||||||
| Income (loss) from discontinued operations | $ | (8,974 | ) | $ | 125 | $ | 212 | $ | (27 | ) | $ | 51 | $ | (8,849 | ) | $ | 265 | |||||||||||
| Net income (loss) | $ | (11,834 | ) | $ | (370 | ) | $ | 1,901 | $ | 4,455 | $ | 596 | $ | (12,204 | ) | $ | (5,652 | ) | ||||||||||
| Earnings (loss) per share from continuing operations (1): | ||||||||||||||||||||||||||||
| Basic | $ | (0.03 | ) | $ | (0.00 | ) | $ | 0.02 | $ | 0.04 | $ | 0.01 | $ | (0.03 | ) | $ | (0.06 | ) | ||||||||||
| Diluted | $ | (0.03 | ) | $ | (0.00 | ) | $ | 0.02 | $ | 0.04 | $ | 0.01 | $ | (0.03 | ) | $ | (0.06 | ) | ||||||||||
| Earnings (loss) per share from discontinuing operations (1): | ||||||||||||||||||||||||||||
| Basic | $ | (0.09 | ) | $ | 0.00 | $ | 0.00 | $ | (0.00 | ) | $ | 0.00 | $ | (0.09 | ) | $ | 0.00 | |||||||||||
| Diluted | $ | (0.09 | ) | $ | 0.00 | $ | 0.00 | $ | (0.00 | ) | $ | 0.00 | $ | (0.09 | ) | $ | 0.00 | |||||||||||
| Earnings (loss) per share (1): | ||||||||||||||||||||||||||||
| Basic | $ | (0.12 | ) | $ | (0.00 | ) | $ | 0.02 | $ | 0.04 | $ | 0.01 | $ | (0.12 | ) | $ | (0.06 | ) | ||||||||||
| Diluted | $ | (0.12 | ) | $ | (0.00 | ) | $ | 0.02 | $ | 0.04 | $ | 0.01 | $ | (0.12 | ) | $ | (0.06 | ) | ||||||||||
STERLING BANCSHARES, INC.
YIELD/RATE ANALYSIS
(dollars in thousands)
Page 7
| Quarter Ended | ||||||||||||||||||||||||
| Jun. 30, | Mar. 31, | |||||||||||||||||||||||
| 2011 | 2011 | |||||||||||||||||||||||
| Average Balance | Interest | Yield/Rate | Average Balance | Interest | Yield/Rate | |||||||||||||||||||
| Interest-Earning Assets: | ||||||||||||||||||||||||
| Loans held for sale | $ | 3,423 | $ | 10 | 1.21 | % | $ | 3,008 | $ | 12 | 1.55 | % | ||||||||||||
| Loans held for investment: | ||||||||||||||||||||||||
| Taxable | 2,554,191 | 33,046 | 5.19 | % | 2,692,192 | 34,893 | 5.26 | % | ||||||||||||||||
| Non-taxable (3) | 50 | 1 | 4.58 | % | 63 | 1 | 6.81 | % | ||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Taxable | 1,464,279 | 10,904 | 2.99 | % | 1,447,767 | 10,359 | 2.90 | % | ||||||||||||||||
| Non-taxable (3) | 110,948 | 1,534 | 5.55 | % | 112,947 | 1,558 | 5.59 | % | ||||||||||||||||
| Deposits in financial institutions | 475,731 | 294 | 0.25 | % | 347,116 | 209 | 0.24 | % | ||||||||||||||||
| Other interest-earning assets | 1,931 | 2 | 0.42 | % | 4,016 | 2 | 0.20 | % | ||||||||||||||||
| Total interest-earning assets | 4,610,553 | 45,791 | 3.98 | % | 4,607,109 | 47,034 | 4.14 | % | ||||||||||||||||
| Noninterest-earning assets | 452,699 | 454,688 | ||||||||||||||||||||||
| Total Assets | $ | 5,063,252 | $ | 5,061,797 | ||||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||
| Demand and savings | $ | 2,127,814 | $ | 2,683 | 0.51 | % | $ | 2,087,550 | $ | 2,660 | 0.52 | % | ||||||||||||
| Certificates and other time | 723,961 | 1,655 | 0.92 | % | 772,172 | 1,937 | 1.02 | % | ||||||||||||||||
| Other borrowed funds | 105,644 | 771 | 2.93 | % | 109,885 | 764 | 2.82 | % | ||||||||||||||||
| Subordinated debt | 77,771 | 700 | 3.61 | % | 77,959 | 696 | 3.62 | % | ||||||||||||||||
| Junior subordinated debt | 82,734 | 1,040 | 5.04 | % | 82,734 | 1,034 | 5.07 | % | ||||||||||||||||
| Total interest-bearing liabilities | 3,117,924 | 6,849 | 0.88 | % | 3,130,300 | 7,091 | 0.92 | % | ||||||||||||||||
| Noninterest-bearing sources: | ||||||||||||||||||||||||
| Noninterest-bearing liabilities | 1,314,129 | 1,306,235 | ||||||||||||||||||||||
| Shareholders' equity | 631,199 | 625,262 | ||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 5,063,252 | $ | 5,061,797 | ||||||||||||||||||||
| Tax Equivalent Net Interest Income and Margin (3) | 38,942 | 3.39 | % | 39,943 | 3.52 | % | ||||||||||||||||||
| Non-GAAP to GAAP Reconciliation: | ||||||||||||||||||||||||
| Tax Equivalent Adjustment: | ||||||||||||||||||||||||
| Loans | - | - | ||||||||||||||||||||||
| Securities | 507 | 514 | ||||||||||||||||||||||
| Total tax equivalent adjustment | 507 | 514 | ||||||||||||||||||||||
| Net Interest Income | $ | 38,435 | $ | 39,429 | ||||||||||||||||||||
STERLING BANCSHARES, INC.
YIELD/RATE ANALYSIS
(dollars in thousands)
Page 8
| Year-to-date | ||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||
| Average Balance | Interest | Yield/Rate | Average Balance | Interest | Yield/Rate | |||||||||||||||||||
| Interest-Earning Assets: | ||||||||||||||||||||||||
| Loans held for sale | $ | 3,217 | $ | 22 | 1.37 | % | $ | 12,507 | $ | 101 | 1.63 | % | ||||||||||||
| Loans held for investment: | ||||||||||||||||||||||||
| Taxable | 2,622,811 | 67,939 | 5.22 | % | 3,106,255 | 85,555 | 5.55 | % | ||||||||||||||||
| Non-taxable (3) | 56 | 2 | 6.50 | % | 4,546 | 118 | 5.26 | % | ||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Taxable | 1,456,069 | 21,263 | 2.94 | % | 1,063,562 | 18,719 | 3.55 | % | ||||||||||||||||
| Non-taxable (3) | 111,942 | 3,093 | 5.57 | % | 100,814 | 2,709 | 5.42 | % | ||||||||||||||||
| Deposits in financial institutions | 411,779 | 503 | 0.25 | % | 278,731 | 346 | 0.25 | % | ||||||||||||||||
| Other interest-earning assets | 2,967 | 4 | 0.27 | % | 1,623 | 4 | 0.50 | % | ||||||||||||||||
| Total interest-earning assets | 4,608,841 | 92,826 | 4.06 | % | 4,568,038 | 107,552 | 4.75 | % | ||||||||||||||||
| Noninterest-earning assets | 453,688 | 444,343 | ||||||||||||||||||||||
| Total Assets | $ | 5,062,529 | $ | 5,012,381 | ||||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||
| Demand and savings | $ | 2,107,794 | $ | 5,343 | 0.51 | % | $ | 2,010,433 | $ | 8,531 | 0.86 | % | ||||||||||||
| Certificates and other time | 747,933 | 3,592 | 0.97 | % | 929,735 | 6,511 | 1.41 | % | ||||||||||||||||
| Other borrowed funds | 107,753 | 1,535 | 2.87 | % | 100,433 | 1,216 | 2.44 | % | ||||||||||||||||
| Subordinated debt | 77,865 | 1,396 | 3.62 | % | 77,778 | 1,392 | 3.61 | % | ||||||||||||||||
| Junior subordinated debt | 82,734 | 2,074 | 5.06 | % | 82,734 | 2,068 | 5.04 | % | ||||||||||||||||
| Total interest-bearing liabilities | 3,124,079 | 13,940 | 0.90 | % | 3,201,113 | 19,718 | 1.24 | % | ||||||||||||||||
| Noninterest-bearing sources: | ||||||||||||||||||||||||
| Noninterest-bearing liabilities | 1,310,203 | 1,211,808 | ||||||||||||||||||||||
| Shareholders' equity | 628,247 | 599,460 | ||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 5,062,529 | $ | 5,012,381 | ||||||||||||||||||||
| Tax Equivalent Net Interest Income and Margin (3) | 78,886 | 3.45 | % | 87,834 | 3.88 | % | ||||||||||||||||||
| Non-GAAP to GAAP Reconciliation | ||||||||||||||||||||||||
| Tax Equivalent Adjustment: | ||||||||||||||||||||||||
| Loans | - | 38 | ||||||||||||||||||||||
| Securities | 1,022 | 869 | ||||||||||||||||||||||
| Total tax equivalent adjustment | 1,022 | 907 | ||||||||||||||||||||||
| Net Interest Income | $ | 77,864 | $ | 86,927 | ||||||||||||||||||||
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 9
| Quarter Ended | ||||||||||||||||||||
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Condensed Average Balance Sheet | ||||||||||||||||||||
| Loans held for sale | $ | 3,423 | $ | 3,008 | $ | 6,728 | $ | 5,390 | $ | 11,454 | ||||||||||
| Loans held for investment | 2,554,241 | 2,692,255 | 2,807,423 | 2,930,419 | 3,041,030 | |||||||||||||||
| Total loans | 2,557,664 | 2,695,263 | 2,814,151 | 2,935,809 | 3,052,484 | |||||||||||||||
| Available-for-sale securities, at fair value | 1,331,079 | 1,304,941 | 1,188,610 | 1,113,780 | 953,742 | |||||||||||||||
| Held-to-maturity securities, at amortized cost | 244,148 | 255,773 | 272,184 | 284,458 | 271,967 | |||||||||||||||
| Deposits in financial institutions | 475,731 | 347,116 | 416,917 | 260,167 | 362,429 | |||||||||||||||
| Other interest-earning assets | 1,931 | 4,016 | 4,859 | 566 | 840 | |||||||||||||||
| Total interest-earning assets | 4,610,553 | 4,607,109 | 4,696,721 | 4,594,780 | 4,641,462 | |||||||||||||||
| Goodwill | 173,123 | 173,210 | 173,210 | 173,210 | 173,210 | |||||||||||||||
| Core deposits and other intangibles, net | 8,676 | 9,208 | 9,732 | 10,262 | 10,800 | |||||||||||||||
| All other noninterest-earning assets | 270,900 | 272,270 | 252,801 | 255,050 | 260,923 | |||||||||||||||
| Total assets | $ | 5,063,252 | $ | 5,061,797 | $ | 5,132,464 | $ | 5,033,302 | $ | 5,086,395 | ||||||||||
| Noninterest-bearing demand | $ | 1,275,043 | $ | 1,266,324 | $ | 1,293,021 | $ | 1,224,402 | $ | 1,197,400 | ||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||
| Interest-bearing demand | 2,127,814 | 2,087,550 | 2,069,470 | 2,003,914 | 2,027,133 | |||||||||||||||
| Jumbo certificates of deposit | 432,209 | 468,726 | 509,458 | 539,094 | 582,727 | |||||||||||||||
| Regular certificates of deposit | 202,232 | 211,043 | 220,615 | 227,490 | 233,592 | |||||||||||||||
| Brokered certificates of deposit | 89,520 | 92,403 | 97,501 | 103,457 | 118,622 | |||||||||||||||
| Total deposits | 4,126,818 | 4,126,046 | 4,190,065 | 4,098,357 | 4,159,474 | |||||||||||||||
| Other borrowed funds | 105,644 | 109,885 | 108,810 | 103,902 | 100,976 | |||||||||||||||
| Subordinated debt | 77,771 | 77,959 | 78,517 | 78,472 | 77,831 | |||||||||||||||
| Junior subordinated debt | 82,734 | 82,734 | 82,734 | 82,734 | 82,734 | |||||||||||||||
| Accrued interest payable and other liabilities | 39,086 | 39,911 | 42,030 | 39,079 | 40,952 | |||||||||||||||
| Total liabilities | 4,432,053 | 4,436,535 | 4,502,156 | 4,402,544 | 4,461,967 | |||||||||||||||
| Total shareholders' equity | 631,199 | 625,262 | 630,308 | 630,758 | 624,428 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 5,063,252 | $ | 5,061,797 | $ | 5,132,464 | $ | 5,033,302 | $ | 5,086,395 | ||||||||||
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Period-end Loans: | ||||||||||||||||||||
| Loans held for sale | $ | 2,709 | $ | 1,877 | $ | 2,691 | $ | 7,123 | $ | 6,509 | ||||||||||
| Loans held for investment: | ||||||||||||||||||||
| Commercial and industrial | 494,389 | 581,703 | 623,487 | 597,205 | 658,141 | |||||||||||||||
| Real Estate: | ||||||||||||||||||||
| Commercial | 1,280,241 | 1,421,683 | 1,511,846 | 1,590,081 | 1,632,213 | |||||||||||||||
| Construction and development | 263,398 | 213,102 | 220,076 | 268,691 | 310,689 | |||||||||||||||
| Residential mortgage | 332,454 | 344,774 | 354,310 | 362,404 | 343,894 | |||||||||||||||
| Consumer/other | 37,460 | 38,516 | 42,630 | 44,571 | 47,433 | |||||||||||||||
| Loans held for investment | 2,407,942 | 2,599,778 | 2,752,349 | 2,862,952 | 2,992,370 | |||||||||||||||
| Total period-end loans | $ | 2,410,651 | $ | 2,601,655 | $ | 2,755,040 | $ | 2,870,075 | $ | 2,998,879 | ||||||||||
| Period-End Deposits: | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 1,268,801 | $ | 1,287,921 | $ | 1,322,492 | $ | 1,248,321 | $ | 1,266,781 | ||||||||||
| Interest-bearing demand | 2,160,404 | 2,084,062 | 2,138,822 | 2,014,207 | 1,962,854 | |||||||||||||||
| Certificates and other time deposits: | ||||||||||||||||||||
| Jumbo | 429,422 | 445,833 | 487,037 | 512,178 | 587,377 | |||||||||||||||
| Regular | 197,822 | 205,840 | 215,867 | 224,290 | 231,404 | |||||||||||||||
| Brokered | 72,398 | 93,628 | 93,212 | 104,215 | 102,714 | |||||||||||||||
| Total period-end deposits | $ | 4,128,847 | $ | 4,117,284 | $ | 4,257,430 | $ | 4,103,211 | $ | 4,151,130 | ||||||||||
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 10
| Quarter Ended | Year-to-date | |||||||||||||||||||||||||||
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | 2011 | 2010 | ||||||||||||||||||||||
| Allowance For Credit Losses | ||||||||||||||||||||||||||||
| Allowance for loan losses at beginning of period | $ | 75,535 | $ | 77,141 | $ | 80,754 | $ | 80,983 | $ | 76,646 | $ | 77,141 | $ | 74,732 | ||||||||||||||
| Charge-offs: | ||||||||||||||||||||||||||||
| Commercial, financial and industrial | 657 | 239 | 1,845 | 1,034 | 1,687 | 896 | 3,655 | |||||||||||||||||||||
| Real estate, mortgage and construction | 6,622 | 12,220 | 8,535 | 7,314 | 5,786 | 18,842 | 26,000 | |||||||||||||||||||||
| Consumer | 189 | 713 | 323 | 285 | 205 | 902 | 467 | |||||||||||||||||||||
| Total charge-offs | 7,468 | 13,172 | 10,703 | 8,633 | 7,678 | 20,640 | 30,122 | |||||||||||||||||||||
| Recoveries: | ||||||||||||||||||||||||||||
| Commercial, financial and industrial | 238 | 405 | 342 | 481 | 433 | 643 | 916 | |||||||||||||||||||||
| Real estate, mortgage and construction | 431 | 255 | 631 | 633 | 845 | 686 | 1,666 | |||||||||||||||||||||
| Consumer | 66 | 106 | 67 | 72 | 51 | 172 | 169 | |||||||||||||||||||||
| Total recoveries | 735 | 766 | 1,040 | 1,186 | 1,329 | 1,501 | 2,751 | |||||||||||||||||||||
| Net charge-offs | 6,733 | 12,406 | 9,663 | 7,447 | 6,349 | 19,139 | 27,371 | |||||||||||||||||||||
| Provision for loan losses | 9,200 | 10,800 | 6,050 | 7,218 | 10,686 | 20,000 | 33,622 | |||||||||||||||||||||
| Allowance for loan losses at end of period | $ | 78,002 | $ | 75,535 | $ | 77,141 | $ | 80,754 | $ | 80,983 | $ | 78,002 | $ | 80,983 | ||||||||||||||
| Allowance for unfunded loan commitments at beginning of period | 1,200 | 1,200 | 2,000 | 1,502 | 2,852 | 1,200 | 2,852 | |||||||||||||||||||||
| Provision for losses on unfunded loan commitments | - | - | (800 | ) | 498 | (1,350 | ) | - | (1,350 | ) | ||||||||||||||||||
| Allowance for unfunded loan commitments at end of period | 1,200 | 1,200 | 1,200 | 2,000 | 1,502 | 1,200 | 1,502 | |||||||||||||||||||||
| Total allowance for credit losses | $ | 79,202 | $ | 76,735 | $ | 78,341 | $ | 82,754 | $ | 82,485 | $ | 79,202 | $ | 82,485 | ||||||||||||||
| Nonperforming Assets | ||||||||||||||||||||||||||||
| Nonperforming loans: | ||||||||||||||||||||||||||||
| Loans held for sale | $ | 1,367 | $ | - | $ | - | $ | 1,665 | $ | 3,491 | $ | 1,367 | $ | 3,491 | ||||||||||||||
| Loans held for investment | 154,106 | 135,791 | 133,264 | 162,096 | 162,669 | 154,106 | 162,669 | |||||||||||||||||||||
| Real estate acquired by foreclosure | 46,158 | 49,826 | 37,064 | 14,571 | 18,151 | 46,158 | 18,151 | |||||||||||||||||||||
| Other repossessed assets | 25 | 127 | 3 | 50 | 20 | 25 | 20 | |||||||||||||||||||||
| Total nonperforming assets | $ | 201,656 | $ | 185,744 | $ | 170,331 | $ | 178,382 | $ | 184,331 | $ | 201,656 | $ | 184,331 | ||||||||||||||
| Restructured loans - accruing | $ | 23,075 | $ | 15,001 | $ | 27,699 | $ | 17,495 | $ | 15,001 | $ | 23,075 | $ | 15,001 | ||||||||||||||
| Potential problem loans | $ | 152,551 | $ | 171,276 | $ | 166,442 | $ | 169,646 | $ | 142,123 | $ | 152,551 | $ | 142,123 | ||||||||||||||
| Accruing loans 30 to 89 days past due | $ | 26,689 | $ | 31,720 | $ | 23,680 | $ | 16,234 | $ | 19,307 | $ | 26,689 | $ | 19,307 | ||||||||||||||
| Accruing loans past due 90 days or more | $ | 1,762 | $ | 2,334 | $ | 507 | $ | 953 | $ | 441 | $ | 1,762 | $ | 441 | ||||||||||||||
| Ratios | ||||||||||||||||||||||||||||
| Period-end allowance for credit losses to period-end loans | 3.29 | % | 2.95 | % | 2.84 | % | 2.88 | % | 2.75 | % | 3.29 | % | 2.75 | % | ||||||||||||||
| Period-end allowance for loan losses to period-end loans | 3.24 | % | 2.90 | % | 2.80 | % | 2.81 | % | 2.70 | % | 3.24 | % | 2.70 | % | ||||||||||||||
| Period-end allowance for loan losses to nonperforming loans | 50.17 | % | 55.63 | % | 57.89 | % | 49.31 | % | 48.74 | % | 50.17 | % | 48.74 | % | ||||||||||||||
| Nonperforming loans to period-end loans | 6.45 | % | 5.22 | % | 4.84 | % | 5.71 | % | 5.54 | % | 6.45 | % | 5.54 | % | ||||||||||||||
| Nonperforming assets to period-end assets | 3.98 | % | 3.68 | % | 3.28 | % | 3.54 | % | 3.63 | % | 3.98 | % | 3.63 | % | ||||||||||||||
| Net charge-offs to average loans (2) | 1.06 | % | 1.87 | % | 1.36 | % | 1.01 | % | 0.83 | % | 1.47 | % | 1.77 | % | ||||||||||||||
STERLING BANCSHARES, INC.
FOOTNOTES TO EARNINGS RELEASE
Page 11
| (1) | Earnings per share in each quarter is computed individually using the weighted-average number of shares outstanding during that quarter. |
| (2) | Interim periods annualized. |
| (3) | Taxable-equivalent basis assuming a 35% tax rate. The Company presents net interest income on a tax-equivalent basis. Accordingly, net interest income from tax-exempt securities and loans is presented in the net interest income results on a basis comparable to taxable securities and loans. This non-GAAP financial measure allows management to assess the comparability of net interest income arising from both taxable and tax-exempt sources. |
| (4) | The efficiency ratio is calculated by dividing noninterest expense by tax equivalent basis net interest income plus noninterest income less net gain (loss) on investment securities and loss on disposal of assets. |
| N/M | Not meaningful. |