| John Tietjen | Edward Nebb |
| Chief Financial Officer | Investor Relations |
| Sterling Bancorp | Comm-Counsellors, LLC |
| john.tietjen@sterlingbancorp.com | enebb@optonline.net |
| 212.757.8035 | 203.972.8350 |
STERLING BANCORP REPORTS 2009 SECOND QUARTER RESULTS, REFLECTING HIGHER NET INTEREST MARGIN AND LOAN PORTFOLIO GROWTH
QUARTERLY CASH DIVIDEND OF $0.09 PER SHARE DECLARED
New York, NY, August 7, 2009 – Sterling Bancorp (NYSE: STL), the parent company of New York City-based Sterling National Bank, today reported net income of $0.8 million, or $0.04 per diluted share, for the second quarter ended June 30, 2009. The results included an industry-wide FDIC special assessment, the provision for loan losses and an increase in pension expense, which together totaled $5.7 million after taxes, or $0.32 per diluted share. Excluding these items, Sterling’s adjusted net income was $6.5 million, or $0.36 per diluted share, for the 2009 second quarter.
| | Second Quarter 2009 Highlights |
| • | Rising Net Interest Margin. The net interest margin was 4.53%, up from 4.49% a year earlier, benefitting from Sterling’s asset-liability management strategies. |
| • | Higher Loan Volume. Average total loans rose 6.3% over the prior year to $1.2 billion, as Sterling continued to serve its customers and community. |
| • | Strengthened Loan Loss Allowance. The allowance for loan losses as a percent of loans in portfolio was increased to 1.56% at June 30, 2009, from 1.33% a year ago. |
| • | Strong Deposit Funding. Demand deposits were $441 million at June 30, 2009, or 34% of total deposits, representing a stable, cost-effective funding source. |
| • | Solid Capital Base. The Company’s capital ratios exceeded “well-capitalized” requirements, with total risk-based capital of 12.89% at June 30, 2009. |
| • | Growth Initiative. Sterling’s acquisition of a factoring, import trade finance and accounts receivable management business in April 2009 resulted in solid growth in this category. |
| • | Expense Control. Noninterest expenses, excluding the industry-wide FDIC special assessment, additional costs associated with the acquired factoring business and the increase in pension expenses, were up only 1.8% from the same quarter of 2008. |
Note: Reconciliations of GAAP net income, including per share data, and noninterest expenses to adjusted net income, including adjusted per share data, and adjusted noninterest expenses are presented on page 17.
Management Comments
“During a period of unprecedented economic distress that has had a devastating impact on many consumers and businesses, Sterling has shown its ability to operate profitably, to grow our business by serving our customers, and to maintain a strong capital foundation,” stated Louis J. Cappelli, Sterling’s Chairman and Chief Executive Officer. “Our financial performance for the second quarter of 2009 was demonstrated by our adjusted net income of $6.5 million, or $0.36 per diluted share, which was 16.6% higher than adjusted net income for the year-ago period.”
“From the onset of this recessionary period, we have focused on strategies designed to ensure Sterling’s strength, staying power and long-term potential. We have maintained capital levels in excess of well-capitalized requirements. We have followed an asset-liability management approach that has produced cost-effective funding and a widening net interest margin. We have kept firm control of expenses. And we have used our strong balance sheet to support continued lending to businesses and individuals.”
“We believe Sterling is positioned to build on and benefit from the opportunities arising from the marketplace turmoil: to capture market share based on our competitive strength, to acquire complementary operations, and to add to our team of talented professionals. For example, we see an opportunity to gain market share among small businesses due to the liquidity problems of a major lender in this space. Early in the second quarter we expanded our range of services by acquiring a factoring, import trade financing and accounts receivable management business that now operates as Sterling Trade Capital. And we continue to attract new team members who bring strong business development skills and solid management ability. We also believe that other opportunities will be available to Sterling as a result of our strong capital, sharply focused business model and commitment to superior customer service,” Mr. Cappelli said.
Second Quarter 2009 Financial Results
Adjusted net income was $6.5 million, or $0.36 per diluted share, for the 2009 second quarter, before the industry-wide FDIC special assessment, loan loss provision and higher pension expense. Including these items, net income for the 2009 second quarter was $0.8 million, or $0.04 per diluted share. For the second quarter of 2008, net income was $4.2 million, or $0.23 per diluted share.
Net interest income, on a tax-equivalent basis, was $21.5 million for the 2009 second quarter, compared to $21.6 million for the 2008 period. Net interest income benefitted from higher average loan balances, lower interest-bearing deposit balances and lower funding costs due to the Company’s strategy of employing wholesale funding in lieu of higher priced certificates of deposit. These benefits were offset by lower yield on loans and investment securities due to market rates, lower investment securities balances and higher borrowed funds balances.
Net interest margin increased to 4.53% for the 2009 second quarter, on a tax-equivalent basis, compared to 4.49% for the second quarter of 2008.
Noninterest income rose to $10.8 million for the 2009 second quarter, compared to $8.6 million a year ago. Higher income from accounts receivable management and factoring services accounted for much of this increase, largely due to Sterling’s acquisition of a factoring, import trade financing and accounts receivable management business early in the 2009 second quarter. Noninterest income in the 2009 period also reflected gains on sales of securities resulting from a strategy to decrease the average maturity of the securities portfolio.
Noninterest expenses totaled $24.1 million for the 2009 second quarter. The industry-wide FDIC special assessment, additional expenses associated with the acquired factoring business, and an increase in pension expense reflecting the impact of a lower return on plan assets due to market conditions accounted for $2.6 million of the $3.0 million total increase in noninterest expense versus the 2008 period. Excluding such items, noninterest expense for the 2009 second quarter increased only 1.8% from the prior year.
The provision for income taxes was $0.4 million for the 2009 second quarter, compared to $2.5 million for the same period of 2008.
First Half 2009 Financial Results
Adjusted net income was $13.6 million, or $0.75 per diluted share, for the first half of 2009, before the industry-wide FDIC special assessment, loan loss provision and higher pension expense. Including these items, net income was $4.4 million, or $0.24 per diluted share, for the first half of 2009. For the same period of 2008, net income was $8.2 million, or $0.45 per diluted share.
Net interest income, on a tax-equivalent basis, rose to $43.0 million for the first half of 2009, from $41.6 million for the same 2008 period. The increase primarily reflected higher average loan balances, lower interest-bearing deposit balances and lower funding costs, partially offset by lower yield on loans and securities, lower investment securities balances and higher borrowed funds balances.
Net interest margin increased to 4.55% for the first six months of 2009, on a tax-equivalent basis, compared to 4.49% for the same period of 2008.
Noninterest income rose to $21.6 million for the first half of 2009, compared to $17.2 million a year ago. The increase was primarily due to higher income from accounts receivable management and factoring services, as well as gains on sales of securities due to a strategy to shorten the average maturity of the Company’s investment portfolio.
Noninterest expenses were $44.2 million for the 2009 period. The industry-wide FDIC special assessment, additional expenses associated with the acquired factoring business, and an increase in pension expense reflecting the impact of a lower return on plan assets accounted for $2.8 million of the $2.9 million total increase in noninterest expense versus the 2008 period.
The provision for income taxes was $2.7 million for the 2009 first half, compared to $4.9 million for the same period of 2008.
Earning Assets and Deposits
Average total loans were $1,204.6 million for the 2009 second quarter, an increase of 6.3% from a year ago. Sterling experienced growth in a range of lending areas, with particularly strong increases in asset-based lending and factoring. The Company believes its strong liquidity should provide capacity for further loan growth, as the ratio of portfolio loans to deposits at Sterling National Bank was approximately 88.9% at June 30, 2009.
Investment securities averaged $679.2 million for the second quarter of 2009, compared to $781.2 million a year earlier. The decrease reflected calls and principal repayments, as well as the sale of certain investment securities as part of the Company’s strategy to decrease the average life of the portfolio, partially offset by investments made during the recent period.
Demand deposits totaled $440.6 million at June 30, 2009 and represented 34% of total deposits, one of the highest ratios of demand to total deposits in the industry.
Asset Quality
In the 2009 second quarter recessionary forces continued to impact the national economy. The recession has exerted disproportionately heavy pressure on the small and midsized businesses that constitute much of Sterling’s traditional customer base and, in particular, provide most of the Company’s leasing business. Consequently, while the Company has a track record of strict underwriting standards and historically strong asset quality, it has not been immune to the unprecedented economic turmoil, and since the first quarter of 2009 has experienced an uncharacteristic increase in nonperforming assets and net charge-offs in the lease finance portfolio.
During 2009 the allowance for loan losses increased $2.1 million from $16.0 million at December 31, 2008 primarily due to an increase of $4.0 million in the allowance allocated to lease financing, partially offset by a reduction of $1.0 million and $0.9 million in the allowance allocated to commercial and industrial and residential mortgage components, respectively. The allowance allocated to lease financing increased primarily as a result of increased losses and nonaccrual levels experienced in that category in 2009. The reduction in allowance allocated to commercial and industrial loans was primarily the result of lower losses experienced in that component of the portfolio in 2009. The reduction in allowance allocated to residential mortgage loans was primarily the result of lower anticipated losses based on the improved quality of loans in the portfolio.
Sterling has taken steps to respond to the challenging conditions affecting much of the lending industry. The Company increased its provision for loan losses to $6.8 million in the 2009 second quarter, from $2.2 million a year ago. The 2009 second quarter provision exceeded net charge-offs for the period by approximately $1.2 million. The allowance for loan losses has been strengthened to 1.56% of loans held in portfolio at June 30, 2009, from 1.33% of loans held in portfolio a year earlier. In addition, management has further strengthened underwriting standards and enhanced its credit evaluation criteria in response to the unprecedented sharp downturn in the economy, and has intensified its collection activities.
Total nonperforming assets were $21.7 million at June 30, 2009, compared to $17.6 million at March 31, 2009. The ratio of nonperforming assets to total assets was 1.02% at June 30, 2009, compared to 0.83% at March 31, 2009. Net charge-offs were $5.6 million for the 2009 second quarter, versus $5.0 million for the 2009 first quarter. As noted earlier, most of the increase in nonperforming assets during 2009 occurred in the lease financing portfolio, as worsening economic conditions have had a disproportionate impact on the small businesses that comprise a significant portion of the Company’s leasing business. Sterling has historically maintained outstanding asset quality in the leasing category, reflecting the underwriting criteria that the Company has consistently employed over many years. In response to the current challenging conditions, the Company has reduced its balances in the leasing category by approximately 11%, or $32 million, since the end of 2008.
Capital
Sterling’s capital ratios exceeded all regulatory requirements for well-capitalized institutions at June 30, 2009. The Tier 1 risk-based capital ratio at that date was 11.67% (compared to a requirement of 6.00%), total risk-based capital was 12.89% (requirement of 10.00%), and the Tier 1 leverage ratio was 8.53% (requirement of 5.00%).
The Company’s capital ratios reflect the receipt in December 2008 of $42 million in proceeds from the issuance of preferred stock under the U.S. Treasury Capital Purchase Program. Excluding such proceeds, Sterling’s capital ratios would continue to exceed regulatory requirements for a well-capitalized institution.
Dividends
Sterling’s Board of Directors has declared a cash dividend of $0.09 per common share, payable on September 30, 2009, to shareholders of record as of September 15, 2009. This continues a track record of cash dividends that extends to 255 consecutive quarters or more than 63 years. The dividend for the previous quarter was $0.19 per share.
“In the current environment, the ability to maintain a fortress balance sheet, buttressed by a solid capital base, is of vital importance,” Mr. Cappelli noted. “Lowering our dividend was a responsible measure designed to further reinforce the strong capital foundation needed to manage, grow and prosper at a time of great economic uncertainty. In addition, the incremental capital will enhance our financial flexibility and support ongoing investments in the growth of Sterling’s business, thereby contributing to our long-term shareholder value.”
“As a profitable, well-capitalized and growing institution, we have made this decision from a position of strength, after giving careful consideration to the best interests of our shareholders and our desire to be optimally positioned for both the challenges and opportunities of the present business cycle. We believe that the dividend adjustment is consistent with our obligation and commitment to keep the Company healthy, strong and growing,” said Mr. Cappelli.
Conference Call
Sterling Bancorp will host a teleconference call for the financial community on August 7, 2009, at 10:00 a.m. Eastern Daylight Time to discuss the 2009 second quarter financial results. To access the conference call live, interested parties may dial 800-230-1059 at least 10 minutes prior to the call.
A replay of the conference call will be available beginning at approximately 1:00 p.m. Eastern Daylight Time on Friday, August 7, 2009 until 11:59 p.m. Eastern Daylight Time on Friday, August 21, 2009. To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 107432.
About Sterling Bancorp
Sterling Bancorp (NYSE: STL) is a New York-based banking and financial services company with assets of $2.1 billion. Established in 1929, the Company’s principal banking subsidiary, Sterling National Bank, has successfully served the needs of businesses, professionals and individuals in the NY metropolitan area and beyond. Now in its 80th year, Sterling is well known for its focus on business customers, an extensive and diverse product portfolio and a high-touch, hands-on approach to customer service.
Sterling offers working capital lines, asset-based financing, factoring, accounts receivable financing and management, payroll funding and processing, equipment leasing and financing, commercial and residential mortgages, import trade financing, a wide array of depository products and cash management services, trust and estate administration and custodial account services.
Certain statements in this press release, including but not limited to, statements as to future liquidity, future interest rate risk and operating expenses, statements concerning future results of operations, financial position or dividends, and plans and objectives for future operations, future capital, future liquidity and future growth, statements concerning the Company’s belief that the Company is positioned to build on and benefit from the opportunities arising from the marketplace turmoil, to capture market share based on its competitive strength, to acquire complementary operations, to add to the Company’s team of professionals, and to gain market share among small businesses, that other opportunities will be available to the Company as a result of its strong capital, sharply focused business model and commitment to superior customer service, and that the incremental capital resulting from reduction of the dividend on its common shares will enhance the Company’s financial flexibility and support ongoing investments in the growth of its business, thereby contributing to its long-term shareholder value, and other statements regarding matters that are not historical facts, are "forward-looking statements" as defined in the Securities Exchange Act of 1934. These statements are not historical facts but instead are subject to numerous assumptions, risks and uncertainties, and represent only the Company’s belief regarding future events, many of which, by their nature, are inherently uncertain and outside its control. Any forward-looking statements the Company may make speak only as of the date on which such statements are made. The Company’s actual results and financial position may differ materially from the anticipated results and financial condition indicated in or implied by these forward-looking statements. For a discussion of some of the risks and important factors that could affect the Company’s future results and financial condition, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements and Factors that Could Affect Future Results” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
# # #
STERLING BANCORP
Consolidated Financial Highlights
(Unaudited)
(dollars and shares in thousands, except per share data)
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| GAAP OPERATING HIGHLIGHTS | | | | | | | | | | | | |
| Net income | | $ | 775 | | | $ | 4,170 | | | $ | 4,387 | | | $ | 8,172 | |
| Dividends on preferred shares and accretion | | | 637 | | | | 0 | | | | 1,479 | | | | 0 | |
| Net income available to common shareholders | | | 138 | | | | 4,170 | | | | 2,908 | | | | 8,172 | |
| | | | | | | | | | | | | | | | | |
| Net income per average common share: | | | | | | | | | | | | | | | | |
| Basic | | | 0.04 | | | | 0.23 | | | | 0.24 | | | | 0.46 | |
| Diluted | | | 0.04 | | | | 0.23 | | | | 0.24 | | | | 0.45 | |
| Net income available to common shareholders, | | | | | | | | | | | | | | | | |
| per average common share: | | | | | | | | | | | | | | | | |
| Basic | | | 0.01 | | | | 0.23 | | | | 0.16 | | | | 0.46 | |
| Diluted | | | 0.01 | | | | 0.23 | | | | 0.16 | | | | 0.45 | |
| | | | | | | | | | | | | | | | | |
Annualized return on average assets (1) | | | 0.15 | % | | | 0.81 | % | | | 0.43 | % | | | 0.81 | % |
Annualized return on average tangible common equity (2) | | | 3.26 | % | | | 17.14 | % | | | 9.30 | % | | | 16.84 | % |
Annualized return on average stated common equity (3) | | | 2.61 | % | | | 13.89 | % | | | 7.47 | % | | | 13.64 | % |
| Net interest margin, tax-equivalent basis | | | 4.53 | % | | | 4.49 | % | | | 4.55 | % | | | 4.49 | % |
| | | | | | | | | | | | | | | | | |
| Common shares outstanding: | | | | | | | | | | | | | | | | |
| Period end | | | 18,106 | | | | 17,989 | | | | 18,106 | | | | 17,989 | |
| Average Basic | | | 18,101 | | | | 17,904 | | | | 18,100 | | | | 17,885 | |
| Average Diluted | | | 18,145 | | | | 18,037 | | | | 18,219 | | | | 18,173 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| NON-GAAP OPERATING HIGHLIGHTS | | | | | | | | | | | | | | | | |
| Adjusted net income | | $ | 6,457 | | | $ | 5,536 | | | $ | 13,624 | | | $ | 10,760 | |
| | | | | | | | | | | | | | | | | |
| Adjusted net income per average common share: | | | | | | | | | | | | | | | | |
| Basic | | | 0.36 | | | | 0.31 | | | | 0.75 | | | | 0.60 | |
| Diluted | | | 0.36 | | | | 0.31 | | | | 0.75 | | | | 0.59 | |
| | | | | | | | | | | | | | | | | |
Annualized return on average assets (1) | | | 1.26 | % | | | 1.07 | % | | | 1.33 | % | | | 1.07 | % |
Annualized return on average tangible common equity (2) | | | 27.20 | % | | | 22.76 | % | | | 28.89 | % | | | 22.17 | % |
Annualized return on average stated common equity (3) | | | 21.74 | % | | | 18.44 | % | | | 23.18 | % | | | 17.96 | % |
| Net interest margin, tax-equivalent basis | | | 4.53 | % | | | 4.49 | % | | | 4.55 | % | | | 4.49 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Common shares outstanding: | | | | | | | | | | | | | | | | |
| Period end | | | 18,106 | | | | 17,989 | | | | 18,106 | | | | 17,989 | |
| Average Basic | | | 18,101 | | | | 17,904 | | | | 18,100 | | | | 17,885 | |
| Average Diluted | | | 18,145 | | | | 18,037 | | | | 18,219 | | | | 18,173 | |
| | | | | | | | | | | | | | | | | |
| (1) | Calculated by dividing net income by average assets. |
| (2) | Average tangible common equity represents average shareholders’ equity less average preferred stock and average goodwill. Calculated by dividing net income by average tangible common equity. See page 18. |
| (3) | Average stated common equity is equal to average shareholders’ equity less average preferred stock. Calculated by dividing net income by average stated common equity. See page 18. |
STERLING BANCORP
Consolidated Financial Highlights
(Unaudited)
(dollars in thousands, except per share data)
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| BALANCE SHEET HIGHLIGHTS | | | | | | | | | | | | |
| Period End Balances | | | | | | | | | | | | |
| Investment securities | | $ | 717,731 | | | $ | 767,806 | | | $ | 717,731 | | | $ | 767,806 | |
| Loans held for sale | | | 57,385 | | | | 24,410 | | | | 57,385 | | | | 24,410 | |
| Loans held in portfolio, | | | | | | | | | | | | | | | | |
| net of unearned discount | | | 1,160,429 | | | | 1,160,333 | | | | 1,160,429 | | | | 1,160,333 | |
| Total earning assets | | | 1,941,156 | | | | 1,955,930 | | | | 1,941,156 | | | | 1,955,930 | |
| Allowance for loan losses | | | 18,134 | | | | 15,480 | | | | 18,134 | | | | 15,480 | |
| Total assets | | | 2,125,706 | | | | 2,128,490 | | | | 2,125,706 | | | | 2,128,490 | |
| | | | | | | | | | | | | | | | | |
| Demand deposits | | | 440,626 | | | | 459,279 | | | | 440,626 | | | | 459,279 | |
| Savings, NOW and money market deposits | | | 532,275 | | | | 486,516 | | | | 532,275 | | | | 486,516 | |
| Time deposits | | | 331,766 | | | | 459,039 | | | | 331,766 | | | | 459,039 | |
| Customer repurchase agreements | | | 55,129 | | | | 64,758 | | | | 55,129 | | | | 64,758 | |
| Other short-term borrowings | | | 263,001 | | | | 261,090 | | | | 263,001 | | | | 261,090 | |
| Long-term borrowings | | | 175,774 | | | | 185,774 | | | | 175,774 | | | | 185,774 | |
| Shareholders’ equity | | | 157,721 | | | | 119,725 | | | | 157,721 | | | | 119,725 | |
| | | | | | | | | | | | | | | | | |
| Average Balances | | | | | | | | | | | | | | | | |
| Investment securities | | $ | 679,223 | | | $ | 781,249 | | | $ | 714,570 | | | $ | 750,868 | |
| Loans held for sale | | | 52,653 | | | | 31,193 | | | | 43,101 | | | | 27,291 | |
| Loans held in portfolio, net of unearned discount | | | 1,151,915 | | | | 1,101,843 | | | | 1,139,887 | | | | 1,081,520 | |
| Total earning assets | | | 1,910,289 | | | | 1,917,116 | | | | 1,916,836 | | | | 1,862,826 | |
| Total assets | | | 2,058,931 | | | | 2,077,112 | | | | 2,066,378 | | | | 2,031,632 | |
| | | | | | | | | | | | | | | | | |
| Demand deposits | | | 417,509 | | | | 424,658 | | | | 416,847 | | | | 422,814 | |
| Savings, NOW and money market deposits | | | 556,407 | | | | 471,182 | | | | 569,818 | | | | 468,027 | |
| Time deposits | | | 335,258 | | | | 508,415 | | | | 331,844 | | | | 529,903 | |
| Customer repurchase agreements | | | 77,261 | | | | 89,187 | | | | 75,987 | | | | 85,824 | |
| Other short-term borrowings | | | 228,019 | | | | 180,870 | | | | 227,156 | | | | 157,355 | |
| Long-term borrowings | | | 175,774 | | | | 181,928 | | | | 175,774 | | | | 148,082 | |
| Shareholders’ equity | | | 158,907 | | | | 120,744 | | | | 158,224 | | | | 120,512 | |
| | | | | | | | | | | | | | | | | |
| ASSET QUALITY HIGHLIGHTS | | | | | | | | | | | | | | | | |
| Period End | | | | | | | | | | | | | | | | |
| Net charge-offs | | $ | 5,635 | | | $ | 1,611 | | | $ | 10,632 | | | $ | 3,109 | |
| Nonaccrual loans | | | 20,606 | | | | 6,970 | | | | 20,606 | | | | 6,970 | |
| Other real estate owned | | | 1,105 | | | | 2,252 | | | | 1,105 | | | | 2,252 | |
| Nonperforming assets | | | 21,711 | | | | 9,222 | | | | 21,711 | | | | 9,222 | |
| Nonaccrual loans/loans (1) | | | 1.69 | % | | | 0.59 | % | | | 1.69 | % | | | 0.59 | % |
| Nonperforming assets/assets | | | 1.02 | % | | | 0.43 | % | | | 1.02 | % | | | 0.43 | % |
| Allowance for loan losses/loans (2) | | | 1.56 | % | | | 1.33 | % | | | 1.56 | % | | | 1.33 | % |
| Allowance for loan losses/nonaccrual loans | | | 88.00 | % | | | 222.09 | % | | | 88.00 | % | | | 222.09 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| CAPITAL RATIOS | | | | | | | | | | | | | | | | |
| Period End | | | | | | | | | | | | | | | | |
| Tier 1 risk based | | | 11.67 | % | | | 9.70 | % | | | 11.67 | % | | | 9.70 | % |
| Total risk based | | | 12.89 | % | | | 10.83 | % | | | 12.89 | % | | | 10.83 | % |
| Leverage | | | 8.53 | % | | | 6.57 | % | | | 8.53 | % | | | 6.57 | % |
| | | | | | | | | | | | | | | | | |
| Book value per common share (period end) | | $ | 6.51 | | | $ | 6.66 | | | $ | 6.51 | | | $ | 6.66 | |
| (1) | The term “loans” includes loans held for sale and loans held in portfolio. |
| (2) | The term “loans” includes loans held in portfolio only. |
| | |
STERLING BANCORP
Consolidated Balance Sheets
(Unaudited)
(in thousands, except number of shares)
| | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| ASSETS | | | | | | |
| Cash and due from banks | | $ | 34,816 | | | $ | 49,995 | |
| Interest-bearing deposits with other banks | | | 5,611 | | | | 881 | |
| Federal Funds Sold | | | 0 | | | | 2,500 | |
| | | | | | | | | |
| Investment securities | | | | | | | | |
| Available for sale (at estimated fair value) | | | 353,736 | | | | 434,700 | |
| Held to maturity (at amortized cost) | | | 363,995 | | | | 333,106 | |
| Total investment securities | | | 717,731 | | | | 767,806 | |
| | | | | | | | | |
| Loans held for sale | | | 57,385 | | | | 24,410 | |
| Loans held in portfolio, net of unearned discounts | | | 1,160,429 | | | | 1,160,333 | |
| Less allowance for loan losses | | | 18,134 | | | | 15,480 | |
| Loans held in portfolio, net | | | 1,142,295 | | | | 1,144,853 | |
| | | | | | | | | |
| Customers’ liability under acceptances | | | 180 | | | | 328 | |
| Goodwill | | | 22,901 | | | | 22,901 | |
| Premises and equipment, net | | | 10,041 | | | | 10,869 | |
| Other real estate | | | 1,105 | | | | 2,252 | |
| Accrued interest receivable | | | 7,772 | | | | 9,877 | |
| Cash surrender value of life insurance policies | | | 47,805 | | | | 44,379 | |
| Other assets | | | 78,064 | | | | 47,439 | |
| | | $ | 2,125,706 | | | $ | 2,128,490 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Deposits | | | | | | | | |
| Demand | | $ | 440,626 | | | $ | 459,279 | |
| Savings, NOW and money market | | | 532,275 | | | | 486,516 | |
| Time | | | 331,766 | | | | 459,039 | |
| Total deposits | | | 1,304,667 | | | | 1,404,834 | |
| | | | | | | | | |
| Securities sold under agreements to repurchase - customers | | | 55,129 | | | | 64,758 | |
| Securities sold under agreements to repurchase - dealers | | | 0 | | | | 72,833 | |
| Federal funds purchased | | | 87,000 | | | | 70,000 | |
| Commercial paper | | | 11,739 | | | | 20,544 | |
| Short-term borrowings - FHLB | | | 0 | | | | 77,000 | |
| Short-term borrowings - FRB | | | 160,000 | | | | 19,000 | |
| Short-term borrowings - other | | | 4,262 | | | | 1,713 | |
| Long-term borrowings - FHLB | | | 150,000 | | | | 160,000 | |
| Long-term borrowings - subordinated debentures | | | 25,774 | | | | 25,774 | |
| Acceptances outstanding | | | 180 | | | | 328 | |
| Accrued interest payable | | | 1,874 | | | | 2,761 | |
| Accrued expenses and other liabilities | | | 167,360 | | | | 89,220 | |
| Total liabilities | | | 1,967,985 | | | | 2,008,765 | |
| | | | | | | | | |
| Shareholders’ equity | | | 157,721 | | | | 119,725 | |
| | | $ | 2,125,706 | | | $ | 2,128,490 | |
| MEMORANDA | | | | | | | | |
| Available for sale securities - amortized cost | | $ | 352,631 | | | $ | 443,171 | |
| Held to maturity securities - estimated fair value | | | 370,844 | | | | 331,037 | |
| Shares outstanding | | | | | | | | |
| Common issued | | | 22,226,425 | | | | 21,813,131 | |
| Common in treasury | | | 4,119,934 | | | | 3,824,161 | |
| | | | | | | | | |
NOTE: Certain reclassifications have been made to prior period’s financial data to conform to current financial statement presentations.
STERLING BANCORP
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share data)
| | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | | | | | | | | | | | |
| INTEREST INCOME | | | | | | | | | | | | |
| Loans | | $ | 18,264 | | | $ | 20,001 | | | $ | 35,816 | | | $ | 40,821 | |
| Investment securities - available for sale | | | 4,335 | | | | 5,670 | | | | 9,830 | | | | 10,382 | |
| Investment securities - held to maturity | | | 3,594 | | | | 4,034 | | | | 7,128 | | | | 8,259 | |
| Federal funds sold | | | 0 | | | | 1 | | | | 0 | | | | 1 | |
| Deposits with other banks | | | 9 | | | | 7 | | | | 19 | | | | 19 | |
| Total interest income | | | 26,202 | | | | 29,713 | | | | 52,793 | | | | 59,482 | |
| | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Savings, NOW and money market deposits | | | 943 | | | | 1,089 | | | | 2,068 | | | | 2,699 | |
| Time deposits | | | 2,049 | | | | 4,034 | | | | 4,215 | | | | 9,372 | |
| Securities sold u/a/r – customers | | | 88 | | | | 442 | | | | 203 | | | | 1,088 | |
| Securities sold u/a/r – dealers | | | 0 | | | | 416 | | | | 0 | | | | 733 | |
| Federal funds purchased | | | 7 | | | | 217 | | | | 41 | | | | 579 | |
| Commercial paper | | | 17 | | | | 117 | | | | 40 | | | | 312 | |
| Short-term borrowings – FHLB | | | 0 | | | | 311 | | | | 11 | | | | 526 | |
| Short-term borrowings – FRB | | | 126 | | | | 1 | | | | 225 | | | | 1 | |
| Short-term borrowings – other | | | 0 | | | | 5 | | | | 1 | | | | 19 | |
| Long-term borrowings – FHLB | | | 1,134 | | | | 1,085 | | | | 2,256 | | | | 1,799 | |
| Long-term subordinated debentures | | | 524 | | | | 524 | | | | 1,047 | | | | 1,047 | |
| Total interest expense | | | 4,888 | | | | 8,241 | | | | 10,107 | | | | 18,175 | |
| | | | | | | | | | | | | | | | | |
| Net interest income | | | 21,314 | | | | 21,472 | | | | 42,686 | | | | 41,307 | |
| Provision for loan losses | | | 6,800 | | | | 2,200 | | | | 13,000 | | | | 4,150 | |
| | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 14,514 | | | | 19,272 | | | | 29,686 | | | | 37,157 | |
| | | | | | | | | | | | | | | | | |
| NONINTEREST INCOME | | | | | | | | | | | | | | | | |
| Accounts receivable management/ | | | | | | | | | | | | | | | | |
| factoring commissions and other fees | | | 4,858 | | | | 3,799 | | | | 8,101 | | | | 7,364 | |
| Service charges on deposit accounts | | | 1,360 | | | | 1,331 | | | | 2,743 | | | | 2,683 | |
| Other customer related service charges and fees | | | 639 | | | | 737 | | | | 1,319 | | | | 1,412 | |
| Mortgage banking income | | | 2,541 | | | | 2,702 | | | | 4,647 | | | | 5,201 | |
| Trust fees | | | 117 | | | | 124 | | | | 256 | | | | 259 | |
| Income from life insurance policies | | | 290 | | | | 294 | | | | 548 | | | | 563 | |
| Gain/(Loss) on sale of OREO | | | 22 | | | | (75 | ) | | | 20 | | | | (303 | ) |
| Securities gains/(losses) | | | 874 | | | | (507 | ) | | | 3,939 | | | | (507 | ) |
| Other income | | | 97 | | | | 167 | | | | 23 | | | | 572 | |
| Total noninterest income | | | 10,798 | | | | 8,572 | | | | 21,596 | | | | 17,244 | |
| | | | | | | | | | | | | | | | | |
| NONINTEREST EXPENSES | | | | | | | | | | | | | | | | |
| Salaries | | | 9,985 | | | | 9,491 | | | | 19,974 | | | | 18,839 | |
| Employee benefits | | | 3,268 | | | | 2,252 | | | | 5,945 | | | | 5,088 | |
| Total personnel expense | | | 13,253 | | | | 11,743 | | | | 25,919 | | | | 23,927 | |
| Occupancy and equipment expenses, net | | | 2,903 | | | | 2,774 | | | | 5,575 | | | | 5,783 | |
| Advertising and marketing | | | 1,026 | | | | 1,353 | | | | 1,680 | | | | 1,988 | |
| Professional fees | | | 1,900 | | | | 1,874 | | | | 3,023 | | | | 3,238 | |
| Communications | | | 435 | | | | 405 | | | | 866 | | | | 861 | |
| Deposit insurance | | | 1,513 | | | | 185 | | | | 1,864 | | | | 269 | |
| Other expenses | | | 3,113 | | | | 2,796 | | | | 5,268 | | | | 5,230 | |
| Total noninterest expenses | | | 24,143 | | | | 21,130 | | | | 44,195 | | | | 41,296 | |
| | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 1,169 | | | | 6,714 | | | | 7,087 | | | | 13,105 | |
| Provision for income taxes | | | 394 | | | | 2,544 | | | | 2,700 | | | | 4,933 | |
| Net income | | | 775 | | | | 4,170 | | | | 4,387 | | | | 8,172 | |
| Dividends on preferred shares and accretion | | | 637 | | | | 0 | | | | 1,479 | | | | 0 | |
| Net income available to common shareholders | | $ | 138 | | | $ | 4,170 | | | $ | 2,908 | | | $ | 8,172 | |
STERLING BANCORP
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share data)
(continued)
| | | | | | | | | | | | | |
| | | Six Months Ended June 30, | | | Three Months Ended June 30, | |
| | | | | | | | | | | | | |
| Average number of common shares outstanding | | | | | | | | | | | | |
| Basic | | | 18,100,860 | | | | 17,904,100 | | | | 18,099,523 | | | | 17,884,662 | |
| Diluted | | | 18,145,090 | | | | 18,037,377 | | | | 18,219,450 | | | | 18,173,427 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net Income per average common share | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.04 | | | $ | 0.23 | | | $ | 0.24 | | | $ | 0.46 | |
| Diluted | | | 0.04 | | | | 0.23 | | | | 0.24 | | | | 0.45 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income available to common shareholders | | | | | | | | | | | | | | | | |
| per average common share | | | | | | | | | | | | | | | | |
| Basic | | | 0.01 | | | | 0.23 | | | | 0.16 | | | | 0.46 | |
| Diluted | | | 0.01 | | | | 0.23 | | | | 0.16 | | | | 0.45 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Dividends per common share | | | 0.19 | | | | 0.19 | | | | 0.38 | | | | 0.38 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
NOTE: Certain reclassifications have been made to prior periods’ financial data to conform to current financial statement presentations.
STERLING BANCORP
Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands)
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Net income | | $ | 775 | | | $ | 4,170 | | | $ | 4,387 | | | $ | 8,172 | |
| | | | | | | | | | | | | | | | | |
| Other comprehensive income, net of tax: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Unrealized holding gains on securities, arising during the period | | | 1,667 | | | | (5,159 | ) | | | 1,688 | | | | (3,804 | ) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Reclassification adjustment for securities (gains) losses included in net income | | | (478 | ) | | | 278 | | | | (2,152 | ) | | | 278 | |
| | | | | | | | | | | | | | | | | |
| Amortization of: | | | | | | | | | | | | | | | | |
| Prior service cost | | | 9 | | | | 9 | | | | 18 | | | | 18 | |
| Net actuarial losses | | | 518 | | | | 230 | | | | 872 | | | | 461 | |
| | | | | | | | | | | | | | | | | |
| Comprehensive income | | $ | 2,491 | | | $ | (472 | ) | | $ | 4,813 | | | $ | 5,125 | |
| | | | | | | | | | | | | | | | | |
STERLING BANCORP
Consolidated Statements of Changes in Shareholders’ Equity
(Unaudited)
(in thousands)
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Balance, at beginning of period | | $ | 159,160 | | | $ | 123,579 | | | $ | 160,480 | | | $ | 121,070 | |
| Net income for period | | | 775 | | | | 4,170 | | | | 4,387 | | | | 8,172 | |
| | | | | | | | | | | | | | | | | |
Common shares issued under stock incentive plan and related tax benefits | | | 0 | | | | 33 | | | | 209 | | | | 6,298 | |
| Stock option compensation expense | | | 33 | | | | 0 | | | | 66 | | | | 0 | |
| Cash dividends-Common shares | | | (3,438 | ) | | | (3,415 | ) | | | (6,875 | ) | | | (6,824 | ) |
| Cash dividends-Preferred shares | | | (525 | ) | | | 0 | | | | (828 | ) | | | 0 | |
| | | | | | | | | | | | | | | | | |
Surrender of shares issued under incentive compensation plan | | | 0 | | | | 0 | | | | (144 | ) | | | (5,218 | ) |
| Change in net unrealized holding gains | | | | | | | | | | | | | | | | |
| on available for sale securities | | | 1,667 | | | | (5,159 | ) | | | 1,688 | | | | (3,804 | ) |
| | | | | | | | | | | | | | | | | |
Reclassification adjustment for securities (gains) losses included in net income | | | (478 | ) | | | 278 | | | | (2,152 | ) | | | 278 | |
| | | | | | | | | | | | | | | | | |
Adjustment to retained earnings upon adoption of EITF Issue 06-4 effective January 1, 2008 | | | 0 | | | | 0 | | | | 0 | | | | (726 | ) |
| Amortization of: | | | | | | | | | | | | | | | | |
| Prior service cost | | | 9 | | | | 9 | | | | 18 | | | | 18 | |
| Net actuarial losses | | | 518 | | | | 230 | | | | 872 | | | | 461 | |
| | | | | | | | | | | | | | | | | |
| Balance, at end of period | | $ | 157,721 | | | $ | 119,725 | | | $ | 157,721 | | | $ | 119,725 | |
STERLING BANCORP
Average Balance Sheets [1]
(Unaudited)
(dollars in thousands)
| | | | | | | | | Three Months Ended | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | AVERAGE | | | | | | AVERAGE | | | AVERAGE | | | | | | AVERAGE | |
| | | BALANCE | | | INTEREST | | | RATE | | | BALANCE | | | INTEREST | | | RATE | |
| Assets | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits with other banks | | $ | 26,498 | | | $ | 9 | | | | 0.14 | % | | $ | 2,474 | | | $ | 7 | | | | 1.14 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities – available for sale | | | 351,378 | | | | 4,119 | | | | 4.69 | | | | 417,409 | | | | 5,462 | | | | 5.23 | |
| Investment securities – held to maturity | | | 292,956 | | | | 3,477 | | | | 4.75 | | | | 341,662 | | | | 4,034 | | | | 4.72 | |
| Investment securities – tax exempt [2] | | | 34,889 | | | | 536 | | | | 6.15 | | | | 22,178 | | | | 340 | | | | 6.13 | |
| Total investment securities | | | 679,223 | | | | 8,132 | | | | 4.79 | | | | 781,249 | | | | 9,836 | | | | 5.04 | |
| Federal Funds Sold | | | 0 | | | | 0 | | | | 0.00 | | | | 357 | | | | 1 | | | | 1.79 | |
| Loans, net of unearned discount [3] | | | 1,204,568 | | | | 18,264 | | | | 6.19 | | | | 1,133,036 | | | | 20,001 | | | | 7.16 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Interest-Earning Assets [2] | | | 1,910,289 | | | | 26,405 | | | | 5.59 | % | | | 1,917,116 | | | | 29,845 | | | | 6.26 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 29,623 | | | | | | | | | | | | 47,695 | | | | | | | | | |
| Allowance for loan losses | | | (17,994 | ) | | | | | | | | | | | (15,948 | ) | | | | | | | | |
| Goodwill | | | 22,901 | | | | | | | | | | | | 22,901 | | | | | | | | | |
| Other | | | 114,112 | | | | | | | | | | | | 105,348 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Assets | | $ | 2,058,931 | | | | | | | | | | | $ | 2,077,112 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Shareholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | | | | | | | | |
| Domestic | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings | | $ | 18,080 | | | | 6 | | | | 0.13 | % | | $ | 19,735 | | | | 17 | | | | 0.36 | % |
| NOW | | | 196,441 | | | | 126 | | | | 0.26 | | | | 256,316 | | | | 542 | | | | 0.85 | |
| Money market | | | 341,886 | | | | 811 | | | | 0.95 | | | | 195,131 | | | | 530 | | | | 1.09 | |
| Time | | | 334,680 | | | | 2,047 | | | | 2.45 | | | | 507,839 | | | | 4,032 | | | | 3.19 | |
| Foreign | | | | | | | | | | | | | | | | | | | | | | | | |
| Time | | | 578 | | | | 2 | | | | 1.09 | | | | 576 | | | | 2 | | | | 1.09 | |
| Total Interest-Bearing Deposits | | | 891,665 | | | | 2,992 | | | | 1.35 | | | | 979,597 | | | | 5,123 | | | | 2.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Borrowings | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities sold u/a/r – customers | | | 77,261 | | | | 88 | | | | 0.45 | | | | 89,187 | | | | 442 | | | | 1.99 | |
| Securities sold u/a/r – dealers | | | 0 | | | | 0 | | | | 0.00 | | | | 66,627 | | | | 416 | | | | 2.52 | |
| Federal funds purchased | | | 12,309 | | | | 7 | | | | 0.22 | | | | 39,302 | | | | 217 | | | | 2.19 | |
| Commercial paper | | | 11,101 | | | | 17 | | | | 0.62 | | | | 19,547 | | | | 117 | | | | 2.42 | |
| Short-term borrowings – FHLB | | | 0 | | | | 0 | | | | 0.00 | | | | 53,758 | | | | 311 | | | | 2.32 | |
| Short-term borrowings – FRB | | | 202,857 | | | | 126 | | | | 0.25 | | | | 264 | | | | 1 | | | | 1.29 | |
| Short-term borrowings – other | | | 1,752 | | | | 0 | | | | 0.00 | | | | 1,472 | | | | 5 | | | | 2.27 | |
| Long-term borrowings – FHLB | | | 150,000 | | | | 1,134 | | | | 3.03 | | | | 156,154 | | | | 1,085 | | | | 2.78 | |
| Long-term borrowings – sub debt | | | 25,774 | | | | 524 | | | | 8.37 | | | | 25,774 | | | | 524 | | | | 8.37 | |
| Total Borrowings | | | 481,054 | | | | 1,896 | | | | 1.58 | | | | 451,985 | | | | 3,118 | | | | 2.77 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Interest-Bearing Liabilities | | | 1,372,719 | | | | 4,888 | | | | 1.43 | % | | | 1,431,582 | | | | 8,241 | | | | 2.31 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 417,509 | | | | | | | | | | | | 424,658 | | | | | | | | | |
| Other liabilities | | | 109,796 | | | | | | | | | | | | 100,128 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | | 1,900,024 | | | | | | | | | | | | 1,956,368 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders’ equity | | | 158,907 | | | | | | | | | | | | 120,744 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities and Shareholder’s Equity | | $ | 2,058,931 | | | | | | | | | | | $ | 2,077,112 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income/spread [2] | | | | | | | 21,517 | | | | 4.16 | % | | | | | | | 21,604 | | | | 3.95 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net yield on interest-earning assets | | | | | | | | | | | 4.53 | % | | | | | | | | | | | 4.49 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: Tax-equivalent adjustment | | | | | | | 203 | | | | | | | | | | | | 132 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest income | | | | | | $ | 21,314 | | | | | | | | | | | $ | 21,472 | | | | | |
| [1] | The average balances of assets, liabilities and shareholders’ equity are computed on the basis of daily averages. Average rates are presented on a tax-equivalent basis. Certain reclassifications have been made to prior period amounts to conform to current presentation. |
| [2] | Interest and/or average rates are presented on a tax-equivalent basis. |
| [3] | Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding and income has been included to the extent earned. |
STERLING BANCORP
Average Balance Sheets [1]
(Unaudited)
(dollars in thousands)
| | | | | | | | | Six Months Ended | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | AVERAGE | | | | | | AVERAGE | | | AVERAGE | | | | | | AVERAGE | |
| | | BALANCE | | | INTEREST | | | RATE | | | BALANCE | | | INTEREST | | | RATE | |
| Assets | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits with other banks | | $ | 19,278 | | | $ | 19 | | | | 0.21 | % | | $ | 2,968 | | | $ | 19 | | | | 1.26 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities – available for sale | | | 389,715 | | | | 9,398 | | | | 4.82 | | | | 381,222 | | | | 9,996 | | | | 5.24 | |
| Investment securities – held to maturity | | | 295,245 | | | | 6,999 | | | | 4.74 | | | | 348,991 | | | | 8,259 | | | | 4.73 | |
| Investment securities – tax exempt [2] | | | 29,610 | | | | 902 | | | | 6.09 | | | | 20,655 | | | | 633 | | | | 6.13 | |
| Total investment securities | | | 714,570 | | | | 17,299 | | | | 4.84 | | | | 750,868 | | | | 18,888 | | | | 5.03 | |
| Federal Funds Sold | | | 0 | | | | 0 | | | | 0.00 | | | | 179 | | | | 1 | | | | 1.78 | |
| Loans, net of unearned discount [3] | | | 1,182,988 | | | | 35,816 | | | | 6.24 | | | | 1,108,811 | | | | 40,821 | | | | 7.55 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Interest-Earning Assets [2] | | | 1,916,836 | | | | 53,134 | | | | 5.64 | % | | | 1,862,826 | | | | 59,729 | | | | 6.50 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 31,017 | | | | | | | | | | | | 57,594 | | | | | | | | | |
| Allowance for loan losses | | | (17,445 | ) | | | | | | | | | | | (15,759 | ) | | | | | | | | |
| Goodwill | | | 22,901 | | | | | | | | | | | | 22,901 | | | | | | | | | |
| Other | | | 113,069 | | | | | | | | | | | | 104,070 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Assets | | $ | 2,066,378 | | | | | | | | | | | $ | 2,031,632 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Shareholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | | | | | | | | |
| Domestic | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings | | $ | 18,148 | | | | 12 | | | | 0.14 | % | | $ | 19,192 | | | | 33 | | | | 0.35 | % |
| NOW | | | 211,650 | | | | 294 | | | | 0.28 | | | | 246,514 | | | | 1,368 | | | | 1.12 | |
| Money market | | | 340,020 | | | | 1,762 | | | | 1.04 | | | | 202,321 | | | | 1,298 | | | | 1.29 | |
| Time | | | 331,266 | | | | 4,212 | | | | 2.56 | | | | 529,327 | | | | 9,369 | | | | 3.56 | |
| Foreign | | | | | | | | | | | | | | | | | | | | | | | | |
| Time | | | 578 | | | | 3 | | | | 1.09 | | | | 576 | | | | 3 | | | | 1.09 | |
| Total Interest-Bearing Deposits | | | 901,662 | | | | 6,283 | | | | 1.41 | | | | 997,930 | | | | 12,071 | | | | 2.43 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Borrowings | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities sold u/a/r – customers | | | 75,987 | | | | 203 | | | | 0.54 | | | | 85,824 | | | | 1,088 | | | | 2.55 | |
| Securities sold u/a/r – dealers | | | 0 | | | | 0 | | | | 0.00 | | | | 51,277 | | | | 733 | | | | 2.88 | |
| Federal funds purchased | | | 34,783 | | | | 41 | | | | 0.23 | | | | 44,129 | | | | 579 | | | | 2.60 | |
| Commercial paper | | | 11,487 | | | | 40 | | | | 0.70 | | | | 20,349 | | | | 312 | | | | 3.09 | |
| Short-term borrowings – FHLB | | | 6,878 | | | | 11 | | | | 0.31 | | | | 39,813 | | | | 526 | | | | 2.65 | |
| Short-term borrowings – FRB | | | 172,405 | | | | 225 | | | | 0.26 | | | | 132 | | | | 1 | | �� | | 2.27 | |
| Short-term borrowings – other | | | 1,603 | | | | 1 | | | | 0.07 | | | | 1,655 | | | | 19 | | | | 2.29 | |
| Long-term borrowings – FHLB | | | 150,000 | | | | 2,256 | | | | 3.03 | | | | 122,308 | | | | 1,799 | | | | 2.94 | |
| Long-term borrowings – sub debt | | | 25,774 | | | | 1,047 | | | | 8.38 | | | | 25,774 | | | | 1,047 | | | | 8.38 | |
| Total Borrowings | | | 478,917 | | | | 3,824 | | | | 1.61 | | | | 391,261 | | | | 6,104 | | | | 3.13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Interest-Bearing Liabilities | | | 1,380,579 | | | | 10,107 | | | | 1.48 | % | | | 1,389,191 | | | | 18,175 | | | | 2.63 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 416,847 | | | | | | | | | | | | 424,814 | | | | | | | | | |
| Other liabilities | | | 110,278 | | | | | | | | | | | | 99,115 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | | 1,908,154 | | | | | | | | | | | | 1,911,120 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders’ equity | | | 158,224 | | | | | | | | | | | | 120,512 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities and Shareholder’s Equity | | $ | 2,066,378 | | | | | | | | | | | $ | 2,031,632 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income/spread [2] | | | | | | | 43,027 | | | | 4.16 | % | | | | | | | 41,554 | | | | 3.87 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net yield on interest-earning assets | | | | | | | | | | | 4.55 | % | | | | | | | | | | | 4.49 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: Tax-equivalent adjustment | | | | | | | 341 | | | | | | | | | | | | 247 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest income | | | | | | $ | 42,686 | | | | | | | | | | | $ | 41,307 | | | | | |
| [1] | The average balances of assets, liabilities and shareholders’ equity are computed on the basis of daily averages. Average rates are presented on a tax-equivalent basis. Certain reclassifications have been made to prior period amounts to conform to current presentation. |
| [2] | Interest and/or average rates are presented on a tax-equivalent basis. |
| [3] | Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding and income has been included to the extent earned. |
STERLING BANCORP
Rate/Volume Analysis[1]
(Unaudited)
(in thousands)
| | | Increase/(Decrease) Three Months Ended June 30, 2009 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| INTEREST INCOME | | | | | | | | | |
| Interest-bearing deposits with other banks | | $ | 13 | | | $ | (11 | ) | | $ | 2 | |
| | | | | | | | | | | | | |
| Investment securities - available for sale | | | (813 | ) | | | (530 | ) | | | (1,343 | ) |
| Investment securities - held to maturity | | | (583 | ) | | | 26 | | | | (557 | ) |
| Investment securities - tax exempt | | | 195 | | | | 1 | | | | 196 | |
| Total investment securities | | | (1,201 | ) | | | (503 | ) | | | (1,704 | ) |
| | | | | | | | | | | | | |
| Federal funds sold | | | (1 | ) | | | 0 | | | | (1 | ) |
| | | | | | | | | | | | | |
| Loans, net of unearned discounts [3] | | | 1,190 | | | | (2,927 | ) | | | (1,737 | ) |
| TOTAL INTEREST INCOME | | $ | 1 | | | $ | (3,441 | ) | | $ | (3,440 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | |
| Domestic | | | | | | | | | | | | |
| Savings | | $ | (1 | ) | | $ | (10 | ) | | $ | (11 | ) |
| NOW | | | (105 | ) | | | (311 | ) | | | (416 | ) |
| Money market | | | 356 | | | | (75 | ) | | | 281 | |
| Time | | | (1,181 | ) | | | (804 | ) | | | (1,985 | ) |
| Foreign | | | | | | | | | | | | |
| Time | | | 0 | | | | 0 | | | | 0 | |
| Total interest-bearing deposits | | | (931 | ) | | | (1,200 | ) | | | (2,131 | ) |
| | | | | | | | | | | | | |
| Borrowings | | | | | | | | | | | | |
| Securities sold under agreements to repurchase – customers | | | (52 | ) | | | (302 | ) | | | (354 | ) |
| Securities sold under agreements to repurchase – dealers | | | (416 | ) | | | 0 | | | | (416 | ) |
| Federal funds purchased | | | (91 | ) | | | (119 | ) | | | (210 | ) |
| Commercial paper | | | (37 | ) | | | (63 | ) | | | (100 | ) |
| Short-term borrowings – FHLB | | | (311 | ) | | | 0 | | | | (311 | ) |
| Short-term borrowings – FRB | | | 127 | | | | (2 | ) | | | 125 | |
| Short-term borrowings – other | | | 2 | | | | (7 | ) | | | (5 | ) |
| Long-term borrowings – FHLB | | | (45 | ) | | | 94 | | | | 49 | |
| Long-term borrowings - subordinated debentures | | | 0 | | | | 0 | | | | 0 | |
| Total borrowings | | | (823 | ) | | | (399 | ) | | | (1,222 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| TOTAL INTEREST EXPENSE | | $ | (1,754 | ) | | $ | (1,599 | ) | | $ | (3,353 | ) |
| | | | | | | | | | | | | |
| NET INTEREST INCOME | | $ | 1,755 | | | $ | (1,842 | ) | | $ | (87 | ) |
| | | | | | | | | | | | | |
| [1] | This table is presented on a tax-equivalent basis. |
| [2] | Changes in interest income and interest expense due to a combination of both volume and rate have been allocated to the change due to volume and the change due to rate in proportion to the relationship of change due solely to each. The change in interest income for Federal funds sold and in interest expense for securities sold under agreements to repurchase-dealers, short-term borrowings-FRB and short-term borrowings-FHLB has been allocated entirely to the volume variance. |
| [3] | Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding, and income has been included to the extent earned. |
| | |
STERLING BANCORP
Rate/Volume Analysis [1]
(Unaudited)
(in thousands)
| | | | | | Increase/(Decrease) | | | | |
| | | Six Months Ended | | | | |
| | | June 30, 2009 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| INTEREST INCOME | | | | | | | | | |
| Interest-bearing deposits with other banks | | $ | 26 | | | $ | (26 | ) | | $ | 0 | |
| | | | | | | | | | | | | |
| Investment securities - available for sale | | | 174 | | | | (772 | ) | | | (598 | ) |
| Investment securities - held to maturity | | | (1,277 | ) | | | 17 | | | | (1,260 | ) |
| Investment securities - tax exempt | | | 273 | | | | (4 | ) | | | 269 | |
| Total investment securities | | | (830 | ) | | | (759 | ) | | | (1,589 | ) |
| | | | | | | | | | | | | |
| Federal funds sold | | | (1 | ) | | | 0 | | | | (1 | ) |
| | | | | | | | | | | | | |
| Loans, net of unearned discounts [3] | | | 2,449 | | | | (7,454 | ) | | | (5,005 | ) |
| TOTAL INTEREST INCOME | | $ | 1,644 | | | $ | (8,239 | ) | | $ | (6,595 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | |
| Domestic | | | | | | | | | | | | |
| Savings | | $ | (2 | ) | | $ | (19 | ) | | $ | (21 | ) |
| NOW | | | (177 | ) | | | (897 | ) | | | (1,074 | ) |
| Money market | | | 750 | | | | (286 | ) | | | 464 | |
| Time | | | (2,964 | ) | | | (2,193 | ) | | | (5,157 | ) |
| Foreign | | | | | | | | | | | | |
| Time | | | 0 | | | | 0 | | | | 0 | |
| Total interest-bearing deposits | | | (2,393 | ) | | | (3,395 | ) | | | (5,788 | ) |
| | | | | | | | | | | | | |
| Borrowings | | | | | | | | | | | | |
| Securities sold under agreements to repurchase – customers | | | (117 | ) | | | (768 | ) | | | (885 | ) |
| Securities sold under agreements to repurchase – dealers | | | (733 | ) | | | 0 | | | | (733 | ) |
| Federal funds purchased | | | (103 | ) | | | (435 | ) | | | (538 | ) |
| Commercial paper | | | (99 | ) | | | (173 | ) | | | (272 | ) |
| Short-term borrowings – FHLB | | | (250 | ) | | | (265 | ) | | | (515 | ) |
| Short-term borrowings – FRB | | | 226 | | | | (2 | ) | | | 224 | |
| Short-term borrowings – other | | | 1 | | | | (19 | ) | | | (18 | ) |
| Long-term borrowings – FHLB | | | 401 | | | | 56 | | | | 457 | |
| Long-term borrowings - subordinated debentures | | | 0 | | | | 0 | | | | 0 | |
| Total borrowings | | | (674 | ) | | | (1,606 | ) | | | (2,280 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| TOTAL INTEREST EXPENSE | | $ | (3,067 | ) | | $ | (5,001 | ) | | $ | (8,068 | ) |
| | | | | | | | | | | | | |
| NET INTEREST INCOME | | $ | 4,711 | | | $ | (3,238 | ) | | $ | 1,473 | |
| | | | | | | | | | | | | |
| [1] | This table is presented on a tax-equivalent basis. |
| [2] | Changes in interest income and interest expense due to a combination of both volume and rate have been allocated to the change due to volume and the change due to rate in proportion to the relationship of change due solely to each. The change in interest income for Federal funds sold and in interest expense for securities sold under agreements to repurchase-dealers, and short-term borrowings- FRB has been allocated entirely to the volume variance. The effect of the extra day in 2008 has also been allocated entirely to the volume variance. |
| [3] | Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding, and income has been included to the extent earned. |
| | |
STERLING BANCORP
Reconciliation of GAAP and Adjusted
Net Income and Noninterest Expenses
(Unaudited)
(dollars in thousands, except per share data)
This press release contains certain supplemental financial information, described in the following tables, which has been determined by methods other than U. S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures provide useful supplemental information to both management and investors in evaluating Sterling’s financial results. Adjusted net income excludes the effect of certain items that are unusual and/or difficult to predict. The incremental pension expense is calculated by subtracting the pension expense for the 2008 period from the pension expense for the 2009 period. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Sterling strongly encourages investors to review its consolidated statements in their entirety an not to rely on any single financial measure. Non-GAAP financial measures are not standardized, and, therefore, it may not be possible to compare these financial measures with non-GAAP financial measures of other companies that may have the same or similar names.
| | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | | | | | | | | | | | |
| Adjusted net income | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| GAAP net income | | $ | 775 | | | $ | 4,170 | | | $ | 4,387 | | | $ | 8,172 | |
| Adjustments to GAAP net income: | | | | | | | | | | | | | | | | |
| Provision for loan losses | | | 6,800 | | | | 2,200 | | | | 13,000 | | | | 4,150 | |
| Special FDIC assessment | | | 1,000 | | | | 0 | | | | 1,000 | | | | 0 | |
| Incremental pension plan expense | | | 770 | | | | 0 | | | | 922 | | | | 0 | |
| Total adjustments to GAAP net income | | | 8,570 | | | | 2,200 | | | | 14,922 | | | | 4,150 | |
| Tax effect | | | 2,888 | | | | 834 | | | | 5,685 | | | | 1,562 | |
| Adjusted net income | | $ | 6,457 | | | $ | 5,536 | | | $ | 13,624 | | | $ | 10,760 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Adjusted per share data | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Adjusted net income | | $ | 6,457 | | | $ | 5,536 | | | $ | 13,624 | | | $ | 10,760 | |
| | | | | | | | | | | | | | | | | |
| Average number of basic shares outstanding | | | 18,101 | | | | 17,904 | | | | 18,100 | | | | 17,885 | |
| | | | | | | | | | | | | | | | | |
| Basic earnings, as adjusted | | $ | 0.36 | | | $ | 0.31 | | | $ | 0.75 | | | $ | 0.60 | |
| | | | | | | | | | | | | | | | | |
| Average number of diluted shares outstanding | | | 18,145 | | | | 18,037 | | | | 18,219 | | | | 18,173 | |
| | | | | | | | | | | | | | | | | |
| Diluted earnings, as adjusted | | $ | 0.36 | | | $ | 0.31 | | | $ | 0.75 | | | $ | 0.59 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Adjusted noninterest expenses | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Total noninterest expenses | | $ | $24,143 | | | $ | $21,130 | | | $ | $44,195 | | | $ | $41,296 | |
| Less: | | | | | | | | | | | | | | | | |
| Special FDIC assessment | | | 1,000 | | | | 0 | | | | 1,000 | | | | 0 | |
| Incremental pension plan expense | | | 770 | | | | 0 | | | | 922 | | | | 0 | |
| Acquired factoring business | | | 854 | | | | 0 | | | | 854 | | | | 0 | |
| Total adjustments to noninterest expenses | | | 2,624 | | | | 0 | | | | 2,776 | | | | 0 | |
| Adjusted noninterest expenses | | $ | 21,519 | | | $ | 21,130 | | | $ | 41,419 | | | $ | 41,296 | |
STERLING BANCORP
Reconciliation of Average Shareholders’ Equity and Adjusted
Average Stated and Tangible Common Equity
(Unaudited)
(dollars in thousands, except per share data)
This press release contains certain supplemental financial information, described in the following tables, which has been determined by methods other than U. S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures provide useful supplemental information to both management and investors in evaluating Sterling’s financial results. Adjusted average stated common equity excludes average preferred equity. Adjusted average tangible common equity excludes average preferred equity, average goodwill and average other intangible assets. Adjusted return on average stated common equity is calculated by dividing adjusted net income (annualized) by adjusted average stated common equity. Adjusted return on average tangible common equity is calculated by dividing adjusted net income by adjusted average tangible common equity. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Sterling strongly encourages investors to review its consolidated statements in their entirety and not to rely on any single financial measure. Non-GAAP financial measures are not standardized, and, therefore, it may not be possible to compare these financial measures with non-GAAP financial measures of other companies that may have the same or similar names.
| | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | | | | | | | | | | | |
| Adjusted average tangible common equity | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Average shareholders’ equity | | $ | 158,907 | | | $ | 120,744 | | | $ | 158,224 | | | $ | 120,512 | |
| Less: | | | | | | | | | | | | | | | | |
| Preferred equity | | | 39,800 | | | | 0 | | | | 39,719 | | | | 0 | |
| Goodwill and intangible assets | | | 23,899 | | | | 22,901 | | | | 23,403 | | | | 22,901 | |
| Average tangible common equity | | $ | 95,208 | | | $ | 97,843 | | | $ | 95,102 | | | $ | 97,611 | |
| | | | | | | | | | | | | | | | | |
| Adjusted average stated common equity | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Averageshareholders’ equity | | $ | 158,907 | | | $ | 120,744 | | | $ | 158,224 | | | $ | 120,512 | |
| Less: | | | | | | | | | | | | | | | | |
| Preferred equity | | | 39,800 | | | | 0 | | | | 39,719 | | | | 0 | |
| Average stated common equity | | $ | 119,107 | | | $ | 120,744 | | | $ | 118,505 | | | $ | 120,512 | |
| | | | | | | | | | | | | | | | | |
| Adjusted return on average tangible common equity | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Adjusted net income | | $ | 6,457 | | | $ | 5,536 | | | $ | 13,624 | | | $ | 10,760 | |
| | | | | | | | | | | | | | | | | |
| Average shareholders’ equity | | | 158,907 | | | | 120,744 | | | | 158,224 | | | | 120,512 | |
| Less: | | | | | | | | | | | | | | | | |
| Preferred equity | | | 39,800 | | | | 0 | | | | 39,719 | | | | 0 | |
| Goodwill and intangible assets | | | 23,899 | | | | 22,901 | | | | 23,403 | | | | 22,901 | |
| Average tangible common equity | | $ | 95,208 | | | $ | 97,843 | | | $ | 95,102 | | | $ | 97,611 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Adjusted annualized return on average tangible common equity | | | 27.20 | % | | | 22.76 | % | | | 28.89 | % | | | 22.17 | % |
| | | | | | | | | | | | | | | | | |
| Adjusted return on average stated common equity | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Averageshareholders’ equity | | $ | 158,907 | | | $ | 120,744 | | | $ | 158,224 | | | $ | 120,512 | |
| Less: | | | | | | | | | | | | | | | | |
| Preferred equity | | | 39,800 | | | | 0 | | | | 39,719 | | | | 0 | |
| Average stated common equity | | $ | 119,107 | | | $ | 120,744 | | | $ | 118,505 | | | $ | 120,512 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Adjusted annualized return on average stated common equity | | | 21.74 | % | | | 18.44 | % | | | 23.18 | % | | | 17.96 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
