New York, NY, October 27, 2009 – Sterling Bancorp (NYSE: STL), the parent company of New York City-based Sterling National Bank, today reported net income of $2.4 million, or $0.13 per diluted share, for the third quarter ended September 30, 2009. Adjusted net income, which excludes the tax-effected provision for loan losses, was $7.1 million, or $0.39 per diluted share, for the 2009 third quarter.
Management Comments
“Sterling has enhanced its competitive position and continued to demonstrate resiliency in the face of a global economic recession that is the most severe in recent memory. Our progress is supported by a solid capital base, a sharp focus on serving our customers, and a willingness to invest in growth opportunities. We delivered an increase in pre-tax, pre-provision income for the 2009 third quarter, to $10.5 million, which was significantly in excess of our credit costs and would have resulted in growth in capital,” said Louis J. Cappelli, Sterling’s Chairman and Chief Executive Officer.
“Our third quarter performance was broad-based across many of Sterling’s product lines, as we focused on deepening existing customer relationships and adding new clients. We experienced growth in most of our loan portfolios as our business development efforts yielded quality new borrower relationships. We also generated higher income from our accounts receivable management and factoring services and mortgage banking operations.”
“Sterling’s third quarter performance comes at a time when the economic outlook remains uncertain. Taking nothing for granted, we will maintain our focus on the core strengths that have distinguished the Company during the current economic cycle. We are pursuing our traditional prudent approach to lending, distinguished by stringent underwriting and an emphasis on strong asset quality. Our capital levels remain in excess of well-capitalized requirements. We have kept tight control of expenses. And we have continued to enhance our business franchises. We believe these strengths will enable Sterling to continue to serve our marketplace and to pursue additional opportunities as they arise,” Mr. Cappelli stated.
Third Quarter 2009 Financial Results
Sterling’s net income for the 2009 third quarter was $2.4 million, or $0.13 per diluted share, compared to $3.8 million, or $0.21 per diluted share, for the third quarter of 2008. The decrease in net income was primarily due to a $5.0 million increase in the provision for loan losses and a $1.5 million increase in noninterest expenses, which more than offset a $4.5 million increase in noninterest income.
Adjusted net income, which excludes the tax-effected provision for loan losses, was $7.1 million, or $0.39 per diluted share, for the third quarter of 2009, compared to $5.2 million, or $0.28 per diluted share, for the year-ago period.
Net interest income, on a tax-equivalent basis, was $22.3 million for the 2009 third quarter, up from $21.8 million for the 2008 period. Net interest income benefitted from higher average loan balances, lower interest-bearing deposit balances and lower funding
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costs due to the Company’s strategy of employing wholesale funding in lieu of higher priced deposits. These benefits were partially 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 third quarter, on a tax-equivalent basis, compared to 4.46% for the third quarter of 2008.
Noninterest income increased to $11.7 million for the 2009 third quarter, from $7.2 million a year ago. The increase reflected higher income from accounts receivable management and factoring services, largely due to Sterling’s acquisition of a factoring, import trade financing and accounts receivable management business early this year, as well as higher mortgage banking income and deposit and other customer-related fees. Noninterest income also benefitted from securities gains in the 2009 third quarter, compared to securities losses in the prior year period. Excluding securities gains/losses, noninterest income rose 24.9% from the prior year.
Noninterest expenses totaled $23.2 million for the 2009 third quarter, versus $21.7 million a year ago. The increase was largely due to additional expenses associated with the acquired factoring business, higher FDIC deposit insurance premiums, and an increase in pension costs. Excluding such items, noninterest expense for the 2009 third quarter increased only 0.3% from the prior year.
The provision for income taxes was $1.2 million for the 2009 third quarter, compared to $1.5 million for the same period of 2008.
Nine Months 2009 Financial Results
Net income for the first nine months of 2009 was $6.8 million, or $0.37 per diluted share, compared to $12.0 million, or $0.66 per diluted share, for the same period of 2008. The decrease in net income was primarily due to a $13.9 million increase in the provision for loan losses and a $4.4 million increase in noninterest expenses, which more than offset a $1.6 million increase in net interest income and an $8.9 million increase in noninterest income.
Adjusted net income, which excludes the tax-effected provision for loan losses, was $19.5 million, or $1.07 per diluted share, for the first nine months of 2009, compared to $15.9 million, or $0.87 per diluted share, for the year-ago period.
Net interest income, on a tax-equivalent basis, rose to $65.4 million for the first nine months of 2009, from $63.4 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 4.58% for the first nine months of 2009, on a tax-equivalent basis, compared to 4.53% for the same period of 2008.
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Noninterest income rose to $33.3 million for the first nine months of 2009, compared to $24.5 million a year ago. The increase was primarily due to higher income from accounts receivable management and factoring services, higher mortgage banking income, and deposit fees. Noninterest income also benefitted from securities gains in the 2009 period, compared to securities losses a year ago.
Noninterest expenses were $67.4 million for the 2009 period, compared with $63.0 million a year ago. Excluding the industry-wide FDIC special assessment, additional expenses associated with the acquired factoring business, and an increase in pension expense, which totaled $4.4 million, noninterest expense decreased slightly from the 2008 period.
The provision for income taxes was $3.9 million for the first nine months of 2009, compared to $6.5 million for the same period of 2008.
Loans and Deposits
Total loans held in portfolio were $1,207.8 million at September 30, 2009. The Company extended $60.6 million in new credit during the 2009 third quarter. At the same time, Sterling has reduced its lease financing balances by approximately $44.0 million, or 17.2%, since the end of 2008 as a prudent response to the impact of the recession on customers for this type of financing.
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 85.7% at September 30, 2009.
Demand deposits totaled $470.4 million at September 30, 2009, and represented 33.4% of total deposits, one of the highest ratios of demand to total deposits in the industry.
Asset Quality
The recession has had a disproportionately negative impact on the small and midsized businesses that constitute much of Sterling’s traditional customer base and, in particular, provide most of its lease financing business. Beginning this year, the Company has experienced elevated levels of nonaccrual loans and net charge-offs as compared with its historical experience, particularly in the lease financing portfolio.
Throughout 2009, Sterling has taken prudent action in response to the unprecedented conditions affecting much of the lending industry. The provision for loan losses was increased to $7.0 million for the 2009 third quarter, compared to $2.0 million a year ago. Net charge-offs were $5.7 million for the 2009 third quarter, compared to $5.6 million for the 2009 second quarter. The 2009 third quarter provision exceeded net charge-offs for the period by approximately $1.3 million. The allowance for loan losses has been strengthened to $19.1 million or 1.58% of loans held in portfolio at September 30, 2009, from $15.7 million or 1.33% a year earlier. Management also has intensified collection activities, especially with respect to the lease financing portfolio, and has further strengthened underwriting standards and enhanced credit evaluation criteria.
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The level of nonaccrual loans decreased to $19.8 million at September 30, 2009, from $20.6 million at June 30, 2009. Nonaccrual loans at September 30, 2008, were $6.8 million. The ratio of nonaccrual loans to total loans was 1.60% at September 30, 2009, compared to 1.69% at June 30, 2009 and 0.57% at September 30, 2008.
Capital
Sterling’s capital ratios exceeded all regulatory requirements for well-capitalized institutions at September 30, 2009. The Tier 1 risk-based capital ratio at that date was 11.40% (compared to a requirement of 6.00%), total risk-based capital was 12.66% (requirement of 10.00%), and the Tier 1 leverage ratio was 8.28% (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.
Conference Call
Sterling Bancorp will host a teleconference call for the financial community on October 27, 2009, at 10:00 a.m. Eastern Daylight Time to discuss the 2009 third quarter financial results. To access the conference call live, interested parties may dial 800-230-1951 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 October 27, 2009 until 11:59 p.m. Eastern Standard Time on November 10, 2009. To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 120744.
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
Page 5 of 19
future growth, statements concerning the Company’s belief that its capital levels in excess of well-capitalized requirements, tight control of expenses and continued enhancement of its business franchise will enable the Company to continue to serve its marketplace and to pursue additional opportunities as they arise and that its strong liquidity should provide capacity for further loan growth, 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.
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Page 6 of 19
STERLING BANCORP
Consolidated Financial Highlights
(Unaudited)
(dollars and shares in thousands, except per share data)
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| |
| |
| |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| |
| |
| |
| |
| |
GAAP OPERATING HIGHLIGHTS | | | | | | | | | | | | | |
Net income | | $ | 2,398 | | $ | 3,785 | | $ | 6,785 | | $ | 11,957 | |
Dividends on preferred shares and accretion | | | 646 | | | 0 | | | 2,125 | | | 0 | |
Net income available to common shareholders | | | 1,752 | | | 3,785 | | | 4,660 | | | 11,957 | |
| | | | | | | | | | | | | |
Net income per average common share: | | | | | | | | | | | | | |
Basic | | | 0.13 | | | 0.21 | | | 0.37 | | | 0.67 | |
Diluted | | | 0.13 | | | 0.21 | | | 0.37 | | | 0.66 | |
Net income available to common shareholders, per average common share: | | | | | | | | | | | | | |
Basic | | | 0.10 | | | 0.21 | | | 0.26 | | | 0.67 | |
Diluted | | | 0.10 | | | 0.21 | | | 0.26 | | | 0.66 | |
| | | | | | | | | | | | | |
Annualized return on average assets (1) | | | 0.45 | % | | 0.71 | % | | 0.43 | % | | 0.78 | % |
Annualized return on average tangible common
equity (2) | | | 10.20 | % | | 16.24 | % | | 9.60 | % | | 16.64 | % |
Annualized return on average stated common
equity (3) | | | 8.13 | % | | 13.03 | % | | 7.69 | % | | 13.44 | % |
Net interest margin, tax-equivalent basis | | | 4.53 | % | | 4.46 | % | | 4.58 | % | | 4.53 | % |
| | | | | | | | | | | | | |
Common shares outstanding: | | | | | | | | | | | | | |
Period end | | | 18,106 | | | 18,043 | | | 18,106 | | | 18,043 | |
Average Basic | | | 18,106 | | | 18,016 | | | 18,104 | | | 17,973 | |
Average Diluted | | | 18,120 | | | 18,227 | | | 18,193 | | | 18,219 | |
| | | | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | |
NON-GAAP OPERATING HIGHLIGHTS | | | | | | | | | | | | | |
Adjusted net income | | $ | 7,056 | | $ | 5,173 | | $ | 19,477 | | $ | 15,916 | |
|
Adjusted net income per average common share: | | | | | | | | | | | | | |
Basic | | | 0.39 | | | 0.29 | | | 1.08 | | | 0.89 | |
Diluted | | | 0.39 | | | 0.28 | | | 1.07 | | | 0.87 | |
|
Annualized return on average assets (1) | | | 1.32 | % | | 0.98 | % | | 1.25 | % | | 1.03 | % |
Annualized return on average tangible common
equity (2) | | | 30.01 | % | | 22.20 | % | | 27.56 | % | | 22.15 | % |
Annualized return on average stated common
equity (3) | | | 23.91 | % | | 17.80 | % | | 22.06 | % | | 17.89 | % |
Net interest margin, tax-equivalent basis | | | 4.53 | % | | 4.46 | % | | 4.58 | % | | 4.53 | % |
| | | | | | | | | | | | | |
Common shares outstanding: | | | | | | | | | | | | | |
Period end | | | 18,106 | | | 18,043 | | | 18,106 | | | 18,043 | |
Average Basic | | | 18,106 | | | 18,016 | | | 18,104 | | | 17,973 | |
Average Diluted | | | 18,120 | | | 18,227 | | | 18,193 | | | 18,219 | |
| |
(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. |
Page 7 of 19
STERLING BANCORP
Consolidated Financial Highlights
(Unaudited)
(dollars in thousands, except per share data)
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| |
| |
| |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| |
| |
| |
| |
| |
BALANCE SHEET HIGHLIGHTS | | | | | | | | | | | | | |
Period End Balances | | | | | | | | | | | | | |
Investment securities | | $ | 722,617 | | $ | 719,420 | | $ | 722,617 | | $ | 719,420 | |
Loans held for sale | | | 25,782 | | | 15,987 | | | 25,782 | | | 15,987 | |
Loans held in portfolio, net of unearned discount | | | 1,207,788 | | | 1,182,926 | | | 1,207,788 | | | 1,182,926 | |
Federal Reserve Bank and Federal Home Loan Bank stock, at cost | | | 9,832 | | | 14,730 | | | 9,832 | | | 14,730 | |
Total earning assets | | | 1,987,138 | | | 1,936,837 | | | 1,987,138 | | | 1,936,837 | |
Allowance for loan losses | | | 19,099 | | | 15,733 | | | 19,099 | | | 15,733 | |
Total assets | | | 2,136,805 | | | 2,088,890 | | | 2,136,805 | | | 2,088,890 | |
| | | | | | | | | | | | | |
Demand deposits | | | 470,404 | | | 452,044 | | | 470,404 | | | 452,044 | |
Savings, NOW and money market deposits | | | 545,829 | | | 599,737 | | | 545,829 | | | 599,737 | |
Time deposits | | | 392,292 | | | 363,353 | | | 392,292 | | | 363,353 | |
Customer repurchase agreements | | | 55,628 | | | 55,022 | | | 55,628 | | | 55,022 | |
Other short-term borrowings | | | 179,154 | | | 224,490 | | | 179,154 | | | 224,490 | |
Long-term borrowings | | | 185,774 | | | 175,774 | | | 185,774 | | | 175,774 | |
Shareholders’ equity | | | 160,538 | | | 118,344 | | | 160,538 | | | 118,344 | |
| | | | | | | | | | | | | |
Average Balances | | | | | | | | | | | | | |
Investment securities | | $ | 726,934 | | $ | 755,355 | | $ | 712,155 | | $ | 745,641 | |
Loans held for sale | | | 44,433 | | | 18,226 | | | 43,550 | | | 24,247 | |
Loans held in portfolio, net of unearned discount | | | 1,144,597 | | | 1,154,487 | | | 1,141,475 | | | 1,106,021 | |
Federal Reserve Bank and Federal Home Loan Bank stock | | | 9,769 | | | 13,640 | | | 9,700 | | | 11,139 | |
Total earning assets | | | 1,976,118 | | | 1,946,041 | | | 1,936,641 | | | 1,890,593 | |
Total assets | | | 2,126,044 | | | 2,108,263 | | | 2,086,485 | | | 2,057,360 | |
| | | | | | | | | | | | | |
Demand deposits | | | 437,551 | | | 432,045 | | | 423,825 | | | 425,912 | |
Savings, NOW and money market deposits | | | 528,260 | | | 576,677 | | | 555,813 | | | 504,508 | |
Time deposits | | | 375,666 | | | 399,994 | | | 346,612 | | | 486,285 | |
Customer repurchase agreements | | | 76,495 | | | 89,900 | | | 76,159 | | | 87,192 | |
Other short-term borrowings | | | 229,902 | | | 210,808 | | | 228,080 | | | 175,302 | |
Long-term borrowings | | | 184,366 | | | 181,644 | | | 178,670 | | | 159,351 | |
Shareholders’ equity | | | 156,990 | | | 115,602 | | | 157,808 | | | 118,863 | |
| | | | | | | | | | | | | |
ASSET QUALITY HIGHLIGHTS | | | | | | | | | | | | | |
Period End | | | | | | | | | | | | | |
Net charge-offs | | $ | 5,654 | | $ | 1,361 | | $ | 16,286 | | $ | 4,470 | |
Nonaccrual loans | | | 19,794 | | | 6,776 | | | 19,794 | | | 6,776 | |
Other real estate owned | | | 1,837 | | | 1,991 | | | 1,837 | | | 1,991 | |
Nonperforming assets | | | 21,631 | | | 8,767 | | | 21,631 | | | 8,767 | |
Nonaccrual loans/loans (1) | | | 1.60 | % | | 0.57 | % | | 1.60 | % | | 0.57 | % |
Nonperforming assets/assets | | | 1.01 | % | | 0.42 | % | | 1.01 | % | | 0.42 | % |
Allowance for loan losses/loans (2) | | | 1.58 | % | | 1.33 | % | | 1.58 | % | | 1.33 | % |
Allowance for loan losses/nonaccrual loans | | | 96.49 | % | | 232.19 | % | | 96.49 | % | | 232.19 | % |
| | | | | | | | | | | | | |
CAPITAL RATIOS | | | | | | | | | | | | | |
Period End | | | | | | | | | | | | | |
Tier 1 risk based | | | 11.40 | % | | 9.70 | % | | 11.40 | % | | 9.70 | % |
Total risk based | | | 12.66 | % | | 10.84 | % | | 12.66 | % | | 10.84 | % |
Leverage | | | 8.28 | % | | 6.48 | % | | 8.28 | % | | 6.48 | % |
|
Book value per common share (period end) | | $ | 6.66 | | $ | 6.56 | | $ | 6.66 | | $ | 6.56 | |
| |
(1) | The term “loans” includes loans held for sale and loans held in portfolio. |
| |
(2) | The term “loans” includes loans held in portfolio only. |
Page 8 of 19
STERLING BANCORP
Consolidated Balance Sheets
(Unaudited)
(in thousands, except number of shares)
| | | | | | | |
| | September 30, | |
| |
| |
| | 2009 | | 2008 | |
| |
| |
| |
ASSETS | | | | | | | |
Cash and due from banks | | $ | 31,188 | | $ | 32,251 | |
Interest-bearing deposits with other banks | | | 21,119 | | | 3,774 | |
| | | | | | | |
Investment securities | | | | | | | |
Available for sale (at estimated fair value) | | | 327,109 | | | 406,845 | |
Held to maturity (at amortized cost) | | | 395,508 | | | 312,575 | |
| |
|
| |
|
| |
Total investment securities | | | 722,617 | | | 719,420 | |
| |
|
| |
|
| |
| | | | | | | |
Loans held for sale | | | 25,782 | | | 15,987 | |
| |
|
| |
|
| |
Loans held in portfolio, net of unearned discounts | | | 1,207,788 | | | 1,182,926 | |
Less allowance for loan losses | | | 19,099 | | | 15,733 | |
| |
|
| |
|
| |
Loans held in portfolio, net | | | 1,188,689 | | | 1,167,193 | |
| |
|
| |
|
| |
Federal Reserve Bank and Federal Home Loan Bank stock, at cost | | | 9,832 | | | 14,730 | |
| | | | | | | |
Customers’ liability under acceptances | | | 0 | | | 886 | |
Goodwill | | | 22,901 | | | 22,901 | |
Premises and equipment, net | | | 9,666 | | | 10,659 | |
Other real estate | | | 1,837 | | | 1,991 | |
Accrued interest receivable | | | 8,141 | | | 8,371 | |
Cash surrender value of life insurance policies | | | 48,419 | | | 45,355 | |
Other assets | | | 46,614 | | | 45,372 | |
| |
|
| |
|
| |
| | $ | 2,136,805 | | $ | 2,088,890 | |
| |
|
| |
|
| |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
Deposits | | | | | | | |
Demand | | $ | 470,404 | | $ | 452,044 | |
Savings, NOW and money market | | | 545,829 | | | 599,737 | |
Time | | | 392,292 | | | 363,353 | |
| |
|
| |
|
| |
Total deposits | | | 1,408,525 | | | 1,415,134 | |
| | | | | | | |
Securities sold under agreements to repurchase - customers | | | 55,628 | | | 55,022 | |
Securities sold under agreements to repurchase - dealers | | | 0 | | | 19,515 | |
Federal funds purchased | | | 25,675 | | | 55,000 | |
Commercial paper | | | 14,692 | | | 12,944 | |
Short-term borrowings - FHLB | | | 0 | | | 120,000 | |
Short-term borrowings - FRB | | | 135,000 | | | 15,000 | |
Short-term borrowings - other | | | 3,787 | | | 2,031 | |
Long-term borrowings - FHLB | | | 160,000 | | | 150,000 | |
Long-term borrowings - subordinated debentures | | | 25,774 | | | 25,774 | |
Acceptances outstanding | | | 0 | | | 886 | |
Accrued interest payable | | | 1,529 | | | 2,223 | |
Accrued expenses and other liabilities | | | 145,657 | | | 97,017 | |
| |
|
| |
|
| |
Total liabilities | | | 1,976,267 | | | 1,970,546 | |
| | | | | | | |
Shareholders’ equity | | | 160,538 | | | 118,344 | |
| |
|
| |
|
| |
| | $ | 2,136,805 | | $ | 2,088,890 | |
| |
|
| |
|
| |
MEMORANDA | | | | | | | |
Available for sale securities - amortized cost | | $ | 323,127 | | $ | 418,705 | |
Held to maturity securities - estimated fair value | | | 407,730 | | | 311,888 | |
Shares outstanding | | | | | | | |
Common issued | | | 22,226,425 | | | 21,962,295 | |
Common in treasury | | | 4,119,934 | | | 3,919,524 | |
NOTE: Certain reclassifications have been made to prior period’s financial data to conform to current financial statement presentations.
Page 9 of 19
STERLING BANCORP
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share data)
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| |
| |
| |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| |
| |
| |
| |
| |
INTEREST INCOME | | | | | | | | | | | | | |
Loans | | $ | 18,024 | | $ | 20,387 | | $ | 53,840 | | $ | 61,208 | |
Investment securities - available for sale | | | 4,123 | | | 5,523 | | | 13,751 | | | 15,662 | |
Investment securities - held to maturity | | | 4,357 | | | 3,795 | | | 11,485 | | | 12,054 | |
Federal Reserve Bank and Federal Home Loan Bank stock | | | 191 | | | 257 | | | 387 | | | 500 | |
Federal funds sold | | | 0 | | | 7 | | | 0 | | | 8 | |
Deposits with other banks | | | 27 | | | 11 | | | 46 | | | 30 | |
| |
|
| |
|
| |
|
| |
|
| |
Total interest income | | | 26,722 | | | 29,980 | | | 79,509 | | | 89,462 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
INTEREST EXPENSE | | | | | | | | | | | | | |
Savings, NOW and money market deposits | | | 872 | | | 2,011 | | | 2,940 | | | 4,710 | |
Time deposits | | | 1,933 | | | 3,062 | | | 6,148 | | | 12,434 | |
Securities sold u/a/r - customers | | | 79 | | | 419 | | | 282 | | | 1,507 | |
Securities sold u/a/r - dealers | | | 0 | | | 382 | | | 0 | | | 1,115 | |
Federal funds purchased | | | 2 | | | 197 | | | 43 | | | 776 | |
Commercial paper | | | 15 | | | 99 | | | 55 | | | 411 | |
Short-term borrowings - FHLB | | | 0 | | | 470 | | | 11 | | | 996 | |
Short-term borrowings - FRB | | | 131 | | | 1 | | | 356 | | | 2 | |
Short-term borrowings - other | | | 0 | | | 9 | | | 1 | | | 28 | |
Long-term borrowings - FHLB | | | 1,197 | | | 1,107 | | | 3,453 | | | 2,906 | |
Long-term subordinated debentures | | | 523 | | | 523 | | | 1,570 | | | 1,570 | |
| |
|
| |
|
| |
|
| |
|
| |
Total interest expense | | | 4,752 | | | 8,280 | | | 14,859 | | | 26,455 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
Net interest income | | | 21,970 | | | 21,700 | | | 64,650 | | | 63,007 | |
Provision for loan losses | | | 6,950 | | | 1,950 | | | 19,950 | | | 6,100 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
Net interest income after provision for loan losses | | | 15,020 | | | 19,750 | | | 44,700 | | | 56,907 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
NONINTEREST INCOME | | | | | | | | | | | | | |
Accounts receivable management/factoring commissions and other fees | | | 4,997 | | | 4,348 | | | 13,098 | | | 11,712 | |
Service charges on deposit accounts | | | 1,553 | | | 1,346 | | | 4,296 | | | 4,029 | |
Other customer related service charges and fees | | | 817 | | | 682 | | | 2,136 | | | 2,094 | |
Mortgage banking income | | | 2,505 | | | 1,469 | | | 7,152 | | | 6,670 | |
Trust fees | | | 110 | | | 136 | | | 366 | | | 395 | |
Income from life insurance policies | | | 280 | | | 289 | | | 828 | | | 852 | |
Gain/(Loss) on sale of OREO | | | 19 | | | (58 | ) | | 39 | | | (361 | ) |
Securities gains/(losses) | | | 1,221 | | | (1,177 | ) | | 5,160 | | | (1,684 | ) |
Other income | | | 233 | | | 208 | | | 262 | | | 780 | |
| |
|
| |
|
| |
|
| |
|
| |
Total noninterest income | | | 11,735 | | | 7,243 | | | 33,337 | | | 24,487 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
NONINTEREST EXPENSES | | | | | | | | | | | | | |
Salaries | | | 9,960 | | | 9,617 | | | 29,934 | | | 28,456 | |
Employee benefits | | | 3,206 | | | 2,411 | | | 9,151 | | | 7,499 | |
| |
|
| |
|
| |
|
| |
|
| |
Total personnel expense | | | 13,166 | | | 12,028 | | | 39,085 | | | 35,955 | |
Occupancy and equipment expenses, net | | | 2,806 | | | 2,919 | | | 8,381 | | | 8,702 | |
Advertising and marketing | | | 916 | | | 740 | | | 2,596 | | | 2,728 | |
Professional fees | | | 1,847 | | | 2,644 | | | 4,870 | | | 5,882 | |
Communications | | | 429 | | | 450 | | | 1,295 | | | 1,311 | |
Deposit insurance | | | 1,195 | | | 243 | | | 3,059 | | | 512 | |
Other expenses | | | 2,818 | | | 2,653 | | | 8,086 | | | 7,883 | |
| |
|
| |
|
| |
|
| |
|
| |
Total noninterest expenses | | | 23,177 | | | 21,677 | | | 67,372 | | | 62,973 | |
| |
|
| |
|
| |
|
| |
|
| |
Income before income taxes | | | 3,578 | | | 5,316 | | | 10,665 | | | 18,421 | |
Provision for income taxes | | | 1,180 | | | 1,531 | | | 3,880 | | | 6,464 | |
| |
|
| |
|
| |
|
| |
|
| |
Net income | | | 2,398 | | | 3,785 | | | 6,785 | | | 11,957 | |
Dividends on preferred shares and accretion | | | 646 | | | 0 | | | 2,125 | | | 0 | |
| |
|
| |
|
| |
|
| |
|
| |
Net income available to common shareholders | | $ | 1,752 | | $ | 3,785 | | $ | 4,660 | | $ | 11,957 | |
| |
|
| |
|
| |
|
| |
|
| |
Page 10 of 19
STERLING BANCORP
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share data)
(continued)
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| |
| |
| |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| |
| |
| |
| |
| |
Average number of common shares outstanding | | | | | | | | | | | | | |
Basic | | | 18,106,491 | | | 18,015,871 | | | 18,104,057 | | | 17,972,517 | |
Diluted | | | 18,120,412 | | | 18,226,811 | | | 18,192,585 | | | 18,219,375 | |
| | | | | | | | | | | | | |
Net Income per average common share | | | | | | | | | | | | | |
Basic | | $ | 0.13 | | $ | 0.21 | | $ | 0.37 | | $ | 0.67 | |
Diluted | | | 0.13 | | | 0.21 | | | 0.37 | | | 0.66 | |
| | | | | | | | | | | | | |
Net income available to common shareholders per average common share | | | | | | | | | | | | | |
Basic | | | 0.10 | | | 0.21 | | | 0.26 | | | 0.67 | |
Diluted | | | 0.10 | | | 0.21 | | | 0.26 | | | 0.66 | |
| | | | | | | | | | | | | |
Dividends per common share | | | 0.09 | | | 0.19 | | | 0.47 | | | 0.57 | |
NOTE: Certain reclassifications have been made to prior periods’ financial data to conform to current financial statement presentations.
Page 11 of 19
STERLING BANCORP
Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands)
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| |
| |
| |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| |
| |
| |
| |
| |
|
Net income | | $ | 2,398 | | $ | 3,785 | | $ | 6,785 | | $ | 11,957 | |
|
Other comprehensive income, net of tax: | | | | | | | | | | | | | |
Unrealized holding gains on securities, arising during the period | | | 2,664 | | | (2,727 | ) | | 4,352 | | | (6,531 | ) |
|
Reclassification adjustment for securities (gains) losses included in net income | | | (666 | ) | | 645 | | | (2,818 | ) | | 923 | |
|
Amortization of: | | | | | | | | | | | | | |
Prior service cost | | | 9 | | | 9 | | | 27 | | | 27 | |
|
Net actuarial losses | | | 532 | | | 229 | | | 1,404 | | | 689 | |
|
| |
|
| |
|
| |
|
| |
|
| |
Comprehensive income | | $ | 4,937 | | $ | 1,941 | | $ | 9,750 | | $ | 7,065 | |
| |
|
| |
|
| |
|
| |
|
| |
|
STERLING BANCORP |
Consolidated Statements of Changes in Shareholders’ Equity |
(Unaudited) |
(in thousands) |
| | | | | |
| | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| |
| |
| |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| |
| |
| |
| |
| |
Balance, at beginning of period | | $ | 157,721 | | $ | 119,725 | | $ | 160,480 | | $ | 121,070 | |
Net income for period | | | 2,398 | | | 3,785 | | | 6,785 | | | 11,957 | |
Common shares issued under stock incentive plan and related tax benefits | | | 0 | | | 1,672 | | | 209 | | | 7,971 | |
Stock option compensation expense | | | 33 | | | 0 | | | 99 | | | 0 | |
Cash dividends-Common shares | | | (1,628 | ) | | (3,425 | ) | | (8,503 | ) | | (10,249 | ) |
Cash dividends-Preferred shares | | | (525 | ) | | 0 | | | (1,353 | ) | | 0 | |
Surrender of shares issued under incentive compensation plan | | | 0 | | | (1,569 | ) | | (144 | ) | | (6,787 | ) |
Change in net unrealized holding gains on available for sale securities | | | 2,664 | | | (2,727 | ) | | 4,352 | | | (6,531 | ) |
Reclassification adjustment for securities (gains) losses included in net income | | | (666 | ) | | 645 | | | (2,818 | ) | | 923 | |
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 | | | 27 | | | 27 | |
Net actuarial losses | | | 532 | | | 229 | | | 1,404 | | | 689 | |
|
| |
|
| |
|
| |
|
| |
|
| |
Balance, at end of period | | $ | 160,538 | | $ | 118,344 | | $ | 160,538 | | $ | 118,344 | |
| |
|
| |
|
| |
|
| |
|
| |
Page 12 of 19
STERLING BANCORP
Average Balance Sheets[1]
(Unaudited)
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | |
| |
| |
| | September 30, 2009 | | September 30, 2008 | |
| | AVERAGE | | | | | AVERAGE | | AVERAGE | | | | | AVERAGE | |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | BALANCE | | INTEREST | | RATE | | BALANCE | | INTEREST | | RATE | |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits with other banks | | $ | 50,385 | | $ | 27 | | | 0.21 | % | $ | 2,920 | | $ | 11 | | | 1.51 | % |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Investment securities - available for sale | | | 320,494 | | | 3,903 | | | 4.87 | | | 409,132 | | | 5,308 | | | 5.19 | |
Investment securities - held to maturity | | | 345,186 | | | 3,975 | | | 4.61 | | | 323,145 | | | 3,795 | | | 4.70 | |
Investment securities - tax exempt [2] | | | 61,254 | | | 969 | | | 6.33 | | | 23,078 | | | 351 | | | 6.08 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
Total investment securities | | | 726,934 | | | 8,847 | | | 4.87 | | | 755,355 | | | 9,454 | | | 5.01 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
FRB and FHLB stock [2] | | | 9,769 | | | 192 | | | 7.87 | | | 13,640 | | | 258 | | | 7.58 | |
Federal Funds sold | | | 0 | | | 0 | | | 0.00 | | | 1,413 | | | 7 | | | 1.81 | |
Loans, net of unearned discount [3] | | | 1,189,030 | | | 18,024 | | | 6.25 | | | 1,172,713 | | | 20,387 | | | 6.99 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
| | | | | | | | | | | | | | | | | | | |
Total Interest-Earning Assets [2] | | | 1,976,118 | | | 27,090 | | | 5.53 | % | | 1,946,041 | | | 30,117 | | | 6.19 | % |
| | | | |
|
| |
|
| | | | |
|
| |
|
| |
| | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 28,342 | | | | | | | | | 50,264 | | | | | | | |
Allowance for loan losses | | | (20,307 | ) | | | | | | | | (16,367 | ) | | | | | | |
Goodwill | | | 22,901 | | | | | | | | | 22,901 | | | | | | | |
Other | | | 118,990 | | | | | | | | | 105,424 | | | | | | | |
| |
|
| | | | | | | |
|
| | | | | | | |
Total Assets | | $ | 2,126,044 | | | | | | | | $ | 2,108,263 | | | | | | | |
| |
|
| | | | | | | |
|
| | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits | | | | | | | | | | | | | | | | | | | |
Domestic | | | | | | | | | | | | | | | | | | | |
Savings | | $ | 18,022 | | | 3 | | | 0.07 | % | $ | 17,527 | | | 14 | | | 0.33 | % |
NOW | | | 180,753 | | | 106 | | | 0.23 | | | 251,271 | | | 633 | | | 1.00 | |
Money market | | | 329,485 | | | 763 | | | 0.92 | | | 307,879 | | | 1,364 | | | 1.76 | |
Time | | | 375,087 | | | 1,931 | | | 2.04 | | | 399,417 | | | 3,060 | | | 3.05 | |
Foreign | | | | | | | | | | | | | | | | | | | |
Time | | | 579 | | | 2 | | | 1.09 | | | 577 | | | 2 | | | 1.09 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
Total Interest-Bearing Deposits | | | 903,926 | | | 2,805 | | | 1.23 | | | 976,671 | | | 5,073 | | | 2.07 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
Borrowings | | | | | | | | | | | | | | | | | | | |
Securities sold u/a/r - customers | | | 76,495 | | | 79 | | | 0.41 | | | 89,900 | | | 419 | | | 1.85 | |
Securities sold u/a/r - dealers | | | 0 | | | 0 | | | 0.00 | | | 62,977 | | | 382 | | | 2.41 | |
Federal funds purchased | | | 6,911 | | | 2 | | | 0.16 | | | 37,717 | | | 197 | | | 2.04 | |
Commercial paper | | | 13,448 | | | 15 | | | 0.43 | | | 18,331 | | | 99 | | | 2.15 | |
Short-term borrowings - FHLB | | | 0 | | | 0 | | | 0.00 | | | 90,295 | | | 470 | | | 2.07 | |
Short-term borrowings - FRB | | | 207,554 | | | 131 | | | 0.25 | | | 326 | | | 1 | | | 1.11 | |
Short-term borrowings - other | | | 1,989 | | | 0 | | | 0.00 | | | 1,162 | | | 9 | | | 2.88 | |
Long-term borrowings - FHLB | | | 158,592 | | | 1,197 | | | 2.99 | | | 155,870 | | | 1,107 | | | 2.84 | |
Long-term borrowings - sub debt | | | 25,774 | | | 523 | | | 8.38 | | | 25,774 | | | 523 | | | 8.37 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
Total Borrowings | | | 490,763 | | | 1,947 | | | 1.58 | | | 482,352 | | | 3,207 | | | 2.65 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
| | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | | 1,394,689 | | | 4,752 | | | 1.35 | % | | 1,459,023 | | | 8,280 | | | 2.26 | % |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 437,551 | | | | | | | | | 432,045 | | | | | | | |
Other liabilities | | | 136,814 | | | | | | | | | 101,593 | | | | | | | |
| |
|
| | | | | | | |
|
| | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 1,969,054 | | | | | | | | | 1,992,661 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Shareholders’ equity | | | 156,990 | | | | | | | | | 115,602 | | | | | | | |
| |
|
| | | | | | | |
|
| | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 2,126,044 | | | | | | | | $ | 2,108,263 | | | | | | | |
| |
|
| | | | | | | |
|
| | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Net interest income/spread [2] | | | | | | 22,338 | | | 4.18 | % | | | | | 21,837 | | | 3.93 | % |
| | | | | | | |
|
| | | | | | | |
|
| |
| | | | | | | | | | | | | | | | | | | |
Net yield on interest-earning assets | | | | | | | | | 4.53 | % | | | | | | | | 4.46 | % |
| | | | | | | |
|
| | | | | | | |
|
| |
| | | | | | | | | | | | | | | | | | | |
Less: Tax-equivalent adjustment | | | | | | 368 | | | | | | | | | 137 | | | | |
| | | | |
|
| | | | | | | |
|
| | | | |
| | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | $ | 21,970 | | | | | | | | $ | 21,700 | | | | |
| | | | |
|
| | | | | | | |
|
| | | | |
| |
[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. |
Page 13 of 19
STERLING BANCORP
Average Balance Sheets[1]
(Unaudited)
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended | |
| |
| |
| | September 30, 2009 | | September 30, 2008 | |
| |
| |
| | AVERAGE
BALANCE | | INTEREST | | AVERAGE
RATE | | AVERAGE
BALANCE | | INTEREST | | AVERAGE
RATE | |
| |
| |
Assets | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits with other banks | | $ | 29,761 | | $ | 46 | | | 0.21 | % | $ | 2,952 | | $ | 30 | | | 1.34 | % |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | | | | | | | |
Investment securities - available for sale | | | 359,882 | | | 13,103 | | | 4.85 | | | 383,934 | | | 15,065 | | | 5.23 | |
Investment securities - held to maturity | | | 312,075 | | | 10,974 | | | 4.69 | | | 340,313 | | | 12,054 | | | 4.72 | |
Investment securities - tax exempt [2] | | | 40,198 | | | 1,865 | | | 6.19 | | | 21,394 | | | 979 | | | 6.10 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
Total investment securities | | | 712,155 | | | 25,942 | | | 4.86 | | | 745,641 | | | 28,098 | | | 5.02 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
FRB and FHLB stock [2] | | | 9,700 | | | 390 | | | 5.37 | | | 11,139 | | | 503 | | | 6.02 | |
Federal funds sold | | | 0 | | | 0 | | | 0.00 | | | 593 | | | 8 | | | 1.81 | |
Loans, net of unearned discount [3] | | | 1,185,025 | | | 53,840 | | | 6.32 | | | 1,130,268 | | | 61,208 | | | 7.46 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
| | | | | | | | | | | | | | | | | | | |
Total Interest-Earning Assets [2] | | | 1,936,641 | | | 80,218 | | | 5.64 | % | | 1,890,593 | | | 89,847 | | | 6.45 | % |
| | | | |
|
| |
|
| | | | | |
| |
|
| |
| | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 30,115 | | | | | | | | | 55,133 | | | | | | | |
Allowance for loan losses | | | (18,409 | ) | | | | | | | | (15,963 | ) | | | | | | |
Goodwill | | | 22,901 | | | | | | | | | 22,901 | | | | | | | |
Other | | | 115,237 | | | | | | | | | 104,696 | | | | | | | |
| |
|
| | | | | | | |
|
| | | | | | | |
Total Assets | | $ | 2,086,485 | | | | | | | | $ | 2,057,360 | | | | | | | |
| |
|
| | | | | | | |
|
| | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits | | | | | | | | | | | | | | | | | | | |
Domestic | | | | | | | | | | | | | | | | | | | |
Savings | | $ | 18,105 | | | 15 | | | 0.11 | % | $ | 18,633 | | | 48 | | | 0.34 | % |
NOW | | | 201,238 | | | 400 | | | 0.27 | | | 248,112 | | | 2,001 | | | 1.08 | |
Money market | | | 336,470 | | | 2,525 | | | 1.00 | | | 237,763 | | | 2,661 | | | 1.50 | |
Time | | | 346,034 | | | 6,143 | | | 2.37 | | | 485,709 | | | 12,429 | | | 3.42 | |
Foreign | | | | | | | | | | | | | | | | | | | |
Time | | | 578 | | | 5 | | | 1.09 | | | 576 | | | 5 | | | 1.09 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
Total Interest-Bearing Deposits | | | 902,425 | | | 9,088 | | | 1.35 | | | 990,793 | | | 17,144 | | | 2.31 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
Borrowings | | | | | | | | | | | | | | | | | | | |
Securities sold u/a/r - customers | | | 76,159 | | | 282 | | | 0.49 | | | 87,192 | | | 1,507 | | | 2.31 | |
Securities sold u/a/r - dealers | | | 0 | | | 0 | | | 0.00 | | | 55,205 | | | 1,115 | | | 2.70 | |
Federal funds purchased | | | 25,390 | | | 43 | | | 0.23 | | | 41,976 | | | 776 | | | 2.43 | |
Commercial paper | | | 12,148 | | | 55 | | | 0.60 | | | 19,672 | | | 412 | | | 2.79 | |
Short-term borrowings - FHLB | | | 4,560 | | | 11 | | | 0.31 | | | 56,763 | | | 995 | | | 2.34 | |
Short-term borrowings - FRB | | | 184,249 | | | 356 | | | 0.26 | | | 197 | | | 2 | | | 1.63 | |
Short-term borrowings - other | | | 1,733 | | | 1 | | | 0.05 | | | 1,489 | | | 28 | | | 2.45 | |
Long-term borrowings - FHLB | | | 152,896 | | | 3,453 | | | 3.02 | | | 133,577 | | | 2,906 | | | 2.90 | |
Long-term borrowings - sub debt | | | 25,774 | | | 1,570 | | | 8.38 | | | 25,774 | | | 1,570 | | | 8.38 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
Total Borrowings | | | 482,909 | | | 5,771 | | | 1.60 | | | 421,845 | | | 9,311 | | | 2.95 | |
| |
|
| |
|
| | | | |
|
| |
|
| | | | |
| | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | | 1,385,334 | | | 14,859 | | | 1.43 | % | | 1,412,638 | | | 26,455 | | | 2.50 | % |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 423,825 | | | | | | | | | 425,912 | | | | | | | |
Other liabilities | | | 119,518 | | | | | | | | | 99,947 | | | | | | | |
| |
|
| | | | | | | |
|
| | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 1,928,677 | | | | | | | | | 1,938,497 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Shareholders’ equity | | | 157,808 | | | | | | | | | 118,863 | | | | | | | |
| |
|
| | | | | | | |
|
| | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 2,086,485 | | | | | | | | $ | 2,057,360 | | | | | | | |
| |
|
| | | | | | | |
|
| | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Net interest income/spread [2] | | | | | | 65,359 | | | 4.21 | % | | | | | 63,392 | | | 3.95 | % |
| | | | | | | |
|
| | | | | | | |
|
| |
| | | | | | | | | | | | | | | | | | | |
Net yield on interest-earning assets | | | | | | | | | 4.58 | % | | | | | | | | 4.53 | % |
| | | | | | | |
|
| | | | | | | |
|
| |
| | | | | | | | | | | | | | | | | | | |
Less: Tax-equivalent adjustment | | | | | | 709 | | | | | | | | | 385 | | | | |
| | | | |
|
| | | | | | | |
|
| | | | |
| | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | $ | 64,650 | | | | | | | | $ | 63,007 | | | | |
| | | | |
|
| | | | | | | |
|
| | | | |
| |
[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. |
Page 14 of 19
STERLING BANCORP
Rate/Volume Analysis [1]
(Unaudited)
(in thousands)
| | | | | | | | | | |
| | Increase/(Decrease)
Three Months Ended
September 30, 2009 | |
| |
| |
| | | | | | | |
| | Volume | | Rate | | Net [2] | |
INTEREST INCOME | | | | | | | | | | |
Interest-bearing deposits with other banks | | $ | 34 | | $ | (18 | ) | $ | 16 | |
| |
|
| |
|
| |
|
| |
Investment securities - available for sale | | | (1,094 | ) | | (311 | ) | | (1,405 | ) |
Investment securities - held to maturity | | | 255 | | | (75 | ) | | 180 | |
Investment securities - tax exempt | | | 603 | | | 15 | | | 618 | |
| |
|
| |
|
| |
|
| |
Total investment securities | | | (236 | ) | | (371 | ) | | (607 | ) |
| |
|
| |
|
| |
|
| |
FRB and FHLB stock | | | (76 | ) | | 10 | | | (66 | ) |
Federal funds sold | | | (8 | ) | | 0 | | | (8 | ) |
|
Loans, net of unearned discounts [3] | | | 233 | | | (2,596 | ) | | (2,363 | ) |
| |
|
| |
|
| |
|
| |
TOTAL INTEREST INCOME | | $ | (53 | ) | $ | (2,975 | ) | $ | (3,028 | ) |
| |
|
| |
|
| |
|
| |
| | | | | | | | | | |
INTEREST EXPENSE | | | | | | | | | | |
Interest-bearing deposits | | | | | | | | | | |
Domestic | | | | | | | | | | |
Savings | | $ | 0 | | $ | (11 | ) | $ | (11 | ) |
NOW | | | (141 | ) | | (386 | ) | | (527 | ) |
Money market | | | 90 | | | (691 | ) | | (601 | ) |
Time | | | (175 | ) | | (954 | ) | | (1,129 | ) |
Foreign | | | | | | | | | | |
Time | | | 0 | | | 0 | | | 0 | |
| |
|
| |
|
| |
|
| |
Total interest-bearing deposits | | | (226 | ) | | (2,042 | ) | | (2,268 | ) |
| |
|
| |
|
| |
|
| |
| | | | | | | | | | |
Borrowings | | | | | | | | | | |
Securities sold under agreements to repurchase - customers | | | (55 | ) | | (285 | ) | | (340 | ) |
Securities sold under agreements to repurchase - dealers | | | (382 | ) | | 0 | | | (382 | ) |
Federal funds purchased | | | (91 | ) | | (104 | ) | | (195 | ) |
Commercial paper | | | (21 | ) | | (63 | ) | | (84 | ) |
Short-term borrowings - FHLB | | | (469 | ) | | 0 | | | (469 | ) |
Short-term borrowings - FRB | | | 132 | | | (2 | ) | | 130 | |
Short-term borrowings - other | | | 3 | | | (12 | ) | | (9 | ) |
Long-term borrowings - FHLB | | | 22 | | | 68 | | | 90 | |
Long-term borrowings - subordinated debentures | | | 0 | | | 0 | | | 0 | |
| |
|
| |
|
| |
|
| |
Total borrowings | | | (861 | ) | | (398 | ) | | (1,259 | ) |
| |
|
| |
|
| |
|
| |
| | | | | | | | | | |
| |
|
| |
|
| |
|
| |
TOTAL INTEREST EXPENSE | | $ | (1,087 | ) | $ | (2,440 | ) | $ | (3,527 | ) |
| |
|
| |
|
| |
|
| |
| | | | | | | | | | |
NET INTEREST INCOME | | $ | 1,034 | | $ | (535 | ) | $ | 499 | |
| |
|
| |
|
| |
|
| |
| |
[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-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. |
Page 15 of 19
STERLING BANCORP
Rate/Volume Analysis [1]
(Unaudited)
(in thousands)
| | | | | | | | | | |
| | Increase/(Decrease)
Nine Months Ended
September 30, 2009 | |
| |
| |
| | | | | | | |
| | Volume | | Rate | | Net [2] | |
INTEREST INCOME | | | | | | | | | | |
Interest-bearing deposits with other banks | | $ | 60 | | $ | (44 | ) | $ | 16 | |
| |
|
| |
|
| |
|
| |
Investment securities - available for sale | | | (937 | ) | | (1,026 | ) | | (1,963 | ) |
Investment securities - held to maturity | | | (1,007 | ) | | (73 | ) | | (1,080 | ) |
Investment securities - tax exempt | | | 873 | | | 14 | | | 887 | |
| |
|
| |
|
| |
|
| |
Total investment securities | | | (1,071 | ) | | (1,085 | ) | | (2,156 | ) |
| |
|
| |
|
| |
|
| |
FRB and FHLB stock | | | (63 | ) | | (50 | ) | | (113 | ) |
Federal funds sold | | | (8 | ) | | 0 | | | (8 | ) |
|
Loans, net of unearned discounts [3] | | | 2,689 | | | (10,057 | ) | | (7,368 | ) |
| |
|
| |
|
| |
|
| |
TOTAL INTEREST INCOME | | $ | 1,607 | | $ | (11,236 | ) | $ | (9,629 | ) |
| |
|
| |
|
| |
|
| |
| | | | | | | | | | |
INTEREST EXPENSE | | | | | | | | | | |
Interest-bearing deposits | | | | | | | | | | |
Domestic | | | | | | | | | | |
Savings | | $ | (1 | ) | $ | (32 | ) | $ | (33 | ) |
NOW | | | (327 | ) | | (1,274 | ) | | (1,601 | ) |
Money market | | | 905 | | | (1,041 | ) | | (136 | ) |
Time | | | (3,060 | ) | | (3,226 | ) | | (6,286 | ) |
Foreign | | | | | | | | | | |
Time | | | 0 | | | 0 | | | 0 | |
| |
|
| |
|
| |
|
| |
Total interest-bearing deposits | | | (2,483 | ) | | (5,573 | ) | | (8,056 | ) |
| |
|
| |
|
| |
|
| |
| | | | | | | | | | |
Borrowings | | | | | | | | | | |
Securities sold under agreements to repurchase - customers | | | (174 | ) | | (1,051 | ) | | (1,225 | ) |
Securities sold under agreements to repurchase - dealers | | | (1,115 | ) | | 0 | | | (1,115 | ) |
Federal funds purchased | | | (224 | ) | | (509 | ) | | (733 | ) |
Commercial paper | | | (118 | ) | | (239 | ) | | (357 | ) |
Short-term borrowings - FHLB | | | (508 | ) | | (476 | ) | | (984 | ) |
Short-term borrowings - FRB | | | 358 | | | (4 | ) | | 354 | |
Short-term borrowings - other | | | 0 | | | (27 | ) | | (27 | ) |
Long-term borrowings - FHLB | | | 423 | | | 124 | | | 547 | |
Long-term borrowings - subordinated debentures | | | 0 | | | 0 | | | 0 | |
| |
|
| |
|
| |
|
| |
Total borrowings | | | (1,358 | ) | | (2,182 | ) | | (3,540 | ) |
| |
|
| |
|
| |
|
| |
| | | | | | | | | | |
| |
|
| |
|
| |
|
| |
TOTAL INTEREST EXPENSE | | $ | (3,841 | ) | $ | (7,755 | ) | $ | (11,596 | ) |
| |
|
| |
|
| |
|
| |
| | | | | | | | | | |
NET INTEREST INCOME | | $ | 5,448 | | $ | (3,481 | ) | $ | 1,967 | |
| |
|
| |
|
| |
|
| |
| |
[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- other 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. |
Page 16 of 19
STERLING BANCORP
Reconciliation of GAAP and Adjusted
Net Income
(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. 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 other companies’ non-GAAP financial measures that may have the same or similar names.
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| |
| |
| |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| |
| |
| |
| |
| |
Adjusted net income | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
GAAP net income | | $ | 2,398 | | $ | 3,785 | | $ | 6,785 | | $ | 11,957 | |
| |
|
| |
|
| |
|
| |
|
| |
Adjustments to GAAP net income: | | | | | | | | | | | | | |
Provision for loan losses | | | 6,950 | | | 1,950 | | | 19,950 | | | 6,100 | |
Tax effect | | | 2,292 | | | 562 | | | 7,258 | | | 2,141 | |
| |
|
| |
|
| |
|
| |
|
| |
Total adjustments to GAAP net income: | | | 4,658 | | | 1,388 | | | 12,692 | | | 3,959 | |
| |
|
| |
|
| |
|
| |
|
| |
Adjusted net income | | $ | 7,056 | | $ | 5,173 | | $ | 19,477 | | $ | 15,916 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
Adjusted per share data | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Adjusted net income | | $ | 7,056 | | $ | 5,173 | | $ | 19,477 | | $ | 15,916 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
Average number of basic shares outstanding | | | 18,106 | | | 18,016 | | | 18,104 | | | 17,973 | |
| | | | | | | | | | | | | |
Basic earnings, as adjusted | | $ | 0.39 | | $ | 0.29 | | $ | 1.08 | | $ | 0.89 | |
| | | | | | | | | | | | | |
Average number of diluted shares outstanding | | | 18,120 | | | 18,227 | | | 18,193 | | | 18,219 | |
| | | | | | | | | | | | | |
Diluted earnings, as adjusted | | $ | 0.39 | | $ | 0.28 | | $ | 1.07 | | $ | 0.87 | |
Page 17 of 19
STERLING BANCORP
Reconciliation of Average Shareholders’ Equity and Adjusted
Average Stated and Tangible Common Equity
(Unaudited)
(dollars in thousands)
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 other companies’ non-GAAP financial measures that may have the same or similar names.
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| |
| |
| |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| |
| |
| |
| |
| |
Adjusted average tangible common equity | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Average shareholders’ equity | | $ | 156,990 | | $ | 115,602 | | $ | 157,808 | | $ | 118,863 | |
Less: | | | | | | | | | | | | | |
Preferred equity | | | 39,922 | | | 0 | | | 39,787 | | | 0 | |
Goodwill and intangible assets | | | 23,793 | | | 23,899 | | | 23,534 | | | 22,901 | |
| |
|
| |
|
| |
|
| |
|
| |
Average tangible common equity | | $ | 93,275 | | $ | 91,703 | | $ | 94,487 | | $ | 95,962 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
Adjusted average stated common equity | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Average shareholders’ equity | | $ | 156,990 | | $ | 115,602 | | $ | 157,808 | | $ | 118,863 | |
Less: | | | | | | | | | | | | | |
Preferred equity | | | 39,922 | | | 0 | | | 39,787 | | | 0 | |
| |
|
| |
|
| |
|
| |
|
| |
Average stated common equity | | $ | 117,068 | | $ | 115,602 | | $ | 118,021 | | $ | 118,863 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
Adjusted return on average tangible common equity | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Adjusted net income | | $ | 7,056 | | $ | 5,173 | | $ | 19,477 | | $ | 15,916 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
Average shareholders’ equity | | | 156,990 | | | 115,602 | | | 157,808 | | | 118,863 | |
Less: | | | | | | | | | | | | | |
Preferred equity | | | 39,922 | | | 0 | | | 39,787 | | | 0 | |
Goodwill and intangible assets | | | 23,793 | | | 23,899 | | | 23,534 | | | 22,901 | |
| |
|
| |
|
| |
|
| |
|
| |
Average tangible common equity | | $ | 93,275 | | $ | 91,703 | | $ | 94,487 | | $ | 95,962 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
Adjusted annualized return on average tangible common equity | | | 30.01 | % | | 22.44 | % | | 27.56 | % | | 22.15 | % |
| | | | | | | | | | | | | |
Adjusted return on average stated common equity | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Average shareholders’ equity | | $ | 156,990 | | $ | 115,602 | | $ | 157,808 | | $ | 118,863 | |
Less: | | | | | | | | | | | | | |
Preferred equity | | | 39,922 | | | 0 | | | 39,787 | | | 0 | |
| |
|
| |
|
| |
|
| |
|
| |
Average stated common equity | | $ | 117,068 | | $ | 115,602 | | $ | 118,021 | | $ | 118,863 | |
| |
|
| |
|
| |
|
| |
|
| |
Adjusted annualized return on average stated common equity | | | 23.91 | % | | 17.80 | % | | 22.06 | % | | 17.89 | % |
Page 18 of 19
STERLING BANCORP
Reconciliation of GAAP and Adjusted
Pre-tax Income
Noninterest Income and Noninterest Expense
(Unaudited)
(dollars in thousands)
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. Pre-tax, pre-provision income and noninterest income excluding securities gains (losses) exclude 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 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 other companies’ non-GAAP financial measures that may have the same or similar names.
| | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| |
| |
| |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| |
| |
| |
| |
| |
Pre-tax, pre-provision income | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
GAAP pre-tax income | | $ | 3,578 | | $ | 5,316 | | $ | 10,665 | | $ | 18,421 | |
Plus: | | | | | | | | | | | | | |
Provision for loan losses | | | 6,950 | | | 1,950 | | | 19,950 | | | 6,100 | |
| |
|
| |
|
| |
|
| |
|
| |
Pre-tax, pre-provision income | | $ | 10,528 | | $ | 7,266 | | $ | 30,615 | | $ | 24,521 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
Noninterest income excluding securities gains (losses) | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total noninterest income | | $ | 11,735 | | $ | 7,243 | | $ | 33,337 | | $ | 24,487 | |
Less (Plus): | | | | | | | | | | | | | |
Securities gains (losses) | | | 1,221 | | | (1,177 | ) | | 5,160 | | | (1,684 | ) |
| |
|
| |
|
| |
|
| |
|
| |
Noninterest income excluding securities gains (losses) | | $ | 10,514 | | $ | 8,420 | | $ | 28,177 | | $ | 26,171 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
Adjusted noninterest expenses | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total noninterest expenses | | $ | 23,177 | | $ | 21,677 | | $ | 67,372 | | $ | 62,973 | |
| |
|
| |
|
| |
|
| |
|
| |
Less: | | | | | | | | | | | | | |
Special FDIC assessment | | | 0 | | | 0 | | | 978 | | | 0 | |
Incremental pension plan expense | | | 775 | | | 0 | | | 1,697 | | | 0 | |
Acquired factoring business | | | 657 | | | 0 | | | 1,761 | | | 0 | |
| |
|
| |
|
| |
|
| |
|
| |
Total adjustments to noninterest expenses | | | 1,432 | | | 0 | | | 4,436 | | | 0 | |
| |
|
| |
|
| |
|
| |
|
| |
Adjusted noninterest expenses | | $ | 21,745 | | $ | 21,677 | | $ | 62,936 | | $ | 62,973 | |
| |
|
| |
|
| |
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