1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994 Commission File No. 1-5273-1
----------------
STERLING BANCORP
(Exact Name of Registrant as specified in charter)
NEW YORK 13-2565216
(State or other jurisdiction of (I.R.S. employer identification No.)
incorporation or organization)
540 MADISON AVENUE, NEW YORK, N.Y. 10022-3299
(Address of principal executive offices) (Zip Code)
(212) 826-8000
(Registrant's telephone number, including area code)
----------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
Common Shares, $1 par value New York Stock Exchange
Floating Interest Rate Convertible Subordinated
Debentures, Third Series, due July 1, 1996 New York Stock Exchange
Floating Interest Rate Convertible Subordinated
Debentures, 4th Series, due November 1, 1998 New York Stock Exchange
Floating Interest Rate Convertible Subordinated
Debentures, Series V, due July 1, 2001 New York Stock Exchange
----------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. / /
On February 28, 1995 the aggregate market value of the voting stock held by
non-affiliates of the Registrant was $41,807,149.
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
THE REGISTRANT HAS ONE CLASS OF COMMON STOCK OF WHICH 6,346,262 SHARES WERE
OUTSTANDING AT MARCH 16, 1995.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Specified portions of the Sterling Bancorp 1994 Annual Report are
incorporated by reference in Parts I and II.
(2) Specified portions of the Sterling Bancorp definitive Proxy Statement
dated March 16, 1995 are incorporated by reference in Part III.
================================================================================
2
STERLING BANCORP
FORM 10-K
TABLE OF CONTENTS
PAGE
------
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I- 1
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
Item 4. Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . II-1
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . II-1
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . II-1
Item 9. Changes in and disagreements with accountants on
Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . II-1
PART III
Item 10. Directors and Executive Officers of the
Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
Item 13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . III-1
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
Signatures
Exhibits Submitted in a Separate Volume.
3
ITEM 1. BUSINESS
GENERAL
Sterling Bancorp (the Registrant), organized in 1966, is a bank holding
company, as defined by the Bank Holding Company Act of 1956 (the BHCA), as
amended, with subsidiaries providing a full range of financial services,
including business and consumer loans, asset based financing, factoring, trade
financing, mortgage lending, leasing and trust and estate services. The
Registrant owns virtually 100% of Sterling National Bank & Trust Company of New
York (the bank), its principal subsidiary, and all of the outstanding shares of
Standard Factors Corporation/Sterling Factors, Universal Finance Corporation,
Sterling Banking Corporation and Sterling Industrial Loan Association (finance
subsidiaries). Zenith Financial Services Company operates as a division of the
Registrant. As used throughout this report, "the Company" refers to Sterling
Bancorp and its subsidiaries.
There is competition in all areas in which the Company conducts its business,
including deposits, loans, domestic and international financing and trust
services. In addition to competing with other banks, the Company also competes
in certain areas of its business with other financial institutions. The
following table presents the components of the loan portfolio for both the
Company and the bank as of December 31, 1994 and 1993. Reference is made to the
information beginning on page 36 of the Company's 1994 Annual Report (pages 11
to 41 of which are incorporated herein by reference) under the caption "CREDIT
RISK".
December 31, 1994 December 31, 1993
--------------------------- --------------------------
The Company The bank The Company The bank
----------- --------- ----------- --------
(in thousands)
Domestic
Term Federal funds sold $ -- $ -- $ 40,000 $ 40,000
Commercial and industrial 260,869 232,303 218,559 198,120
Real estate - mortgage 42,079 42,079 34,808 34,808
Real estate - construction 1,486 1,486 1,665 1,665
Installment - individuals 12,920 12,920 8,403 8,403
Foreign
Governments and official
institutions 789 789 789 789
-------- -------- -------- --------
Loans, gross 318,143 289,577 304,224 283,785
Less: Unearned discounts 5,374 5,104 5,473 5,247
-------- -------- -------- --------
Loans, net of unearned
discounts $312,769 $284,473 $298,751 $278,538
======== ======== ======== ========
The BHCA requires the prior approval of the Federal Reserve Board for the
acquisition by a bank holding company of more than 5% of the voting stock or
substantially all of the assets of any bank or bank holding company. Also,
under the BHCA, bank holding companies are prohibited, with certain exceptions,
from engaging in, or from acquiring more than 5% of the voting stock of any
company engaging in, activities other than banking or managing or controlling
banks or furnishing services to or performing services for their subsidiaries.
The BHCA also authorized the Federal Reserve Board to permit bank holding
companies to
I-1
4
engage in, and to acquire or retain shares of companies that engage in,
activities which the Federal Reserve Board determines to be so closely related
to banking or managing or controlling banks as to be a proper incident thereto.
The Federal Reserve Board has ruled on a number of activities and found some of
them to come within such standard while finding that other activities do not
fall within the permissible scope of such standard; other activities
have been proposed by the Federal Reserve Board for consideration. The effect
of the Federal Reserve Board's findings under the standard has been to expand
the financially related activities in which bank holding companies may engage.
Revisions of the Federal Reserve Board's principal regulation (Regulation Y)
affecting bank holding companies have expanded the scope of permissible
bank-related activities and liberalized procedures to allow the entry into such
activities. In addition, the BHCA prohibits bank holding companies from
acquiring direct or indirect control of more than a 5% interest in a bank or
bank holding company located in a state other than New York unless the laws of
such state expressly authorize such acquisition.
There are also various requirements and restrictions imposed by the laws of the
United States and the State of New York and by regulations of the Federal
Reserve System, of which the bank is a member, affecting the operations of the
Company including the requirement to maintain reserves against deposits,
restrictions relating to: (a) the nature and amount of loans that may be made
by the bank and the interest that may be charged thereon; (b) extensions of
credit by subsidiary banks of a bank holding company to the bank holding
company or certain of its subsidiaries; (c) on investments in the stock or
other securities thereof, and on the taking of such stock or securities as
collateral for loans to any borrower; and (d) other investments, branching and
other activities of the Company and the bank. Regulatory limitations on the
payment of dividends to the Registrant by the bank are discussed in the
"FINANCIAL CONDITION" section beginning on page 35 of the Company's 1994 Annual
Report. The Registrant and its finance subsidiaries are subject to supervision
and regulation by the Federal Reserve Board (FRB); Sterling Industrial Loan
Association is subject to supervision and regulation by the Bureau of Financial
Institutions of the State Corporation Commission of the Commonwealth of
Virginia; Sterling Banking Corporation is subject to supervision and regulation
by the Banking Department of the State of New York; the bank is subject to
supervision and regulation by the Office of the Comptroller of the Currency
(the Comptroller) and, by reason of the insurance of its deposits to the extent
permitted by law, to the regulations of the Federal Deposit Insurance
Corporation (FDIC).
The Company and the bank are subject to risk-based capital and leverage
guidelines issued by U.S. banking industry regulators for banks and bank
holding companies in the United States. Pursuant to provisions of FDICIA,
which, among other things, requires the federal depository institution
regulatory agencies to take specific prompt actions with respect to
institutions that do not meet minimum capital standards, the agencies have
adopted regulations creating and defining five capital tiers, the highest of
which is "well capitalized". As of December 31, 1994 the bank was "well
capitalized". The capital components and ratios for the Company and the bank
are presented in the Company's 1994 Annual Report on page 40.
I-2
5
There have been a number of legislative and regulatory proposals that would
have an impact on the operations of bank holding companies and their banks.
While the changing legislation and regulatory environment does not permit
forecasts to be made with any degree of certainty, the Company is unaware of
any pending legislative reforms or regulatory activities which would materially
affect its financial position or operating results in the foreseeable future.
The Federal Reserve Board has issued regulations under the BHCA that require a
bank holding company to serve as a source of financial and managerial strength
to its subsidiary banks. As a result, the Federal Reserve Board, pursuant to
such regulations, may require the Registrant to stand ready to use its
resources to provide adequate capital funds to its banking subsidiaries during
periods of financial stress or adversity. This support may be required at
times when, absent such regulations, the bank holding company might not
otherwise provide such support.
The earnings of the Registrant and its finance subsidiaries and the bank are
affected by legislative changes and by regulations and policies of various
governmental authorities, including the Federal Reserve System, the
Comptroller, and the states in which the Registrant's subsidiaries operate.
Such changes and policies significantly affect the growth of deposits as well
as the cost of purchased funds and the return on earning assets.
Changing conditions in the national economy and in the money markets make it
impossible to predict future changes in interest rates, deposit levels, loan
demand or their effects on the business and earnings of the Registrant and its
subsidiaries. Foreign activities of the Company are not considered to be
material.
I-3
6
THE BANK
Sterling National Bank & Trust Company of New York was organized in 1929 under
the National Bank Act and commenced operations in New York City. The bank
maintains six offices in New York City (three branches and an International
Banking Facility in Manhattan and two branches in Queens). The executive
office is located at 540 Madison Avenue, New York, New York. There are
regional representatives located in Los Angeles, California and Richmond,
Virginia.
The bank provides a range of banking services to businesses and individuals
including checking, savings and money market accounts, certificates of deposit,
business loans, personal and installment loans, VISA/MASTERCARD, safe deposit
and night depository facilities. Business lending, depository and related
financial services are furnished to a wide range of customers in diverse
industries, including commercial, industrial and financial companies of all
sizes as well as government and non-profit agencies. Loan facilities available
to these customers include short-term revolving credit arrangements, term
loans, letters of credit, factoring, accounts receivable financing, equipment
financing, real estate and mortgage loans, leasing and lock box services.
Through its international division and International Banking Facility, the bank
offers financial services to its customers and correspondents in the world's
major financial centers. These services consist of financing import and export
transactions, issuance of letters of credit and creation of bankers
acceptances. In addition to its direct worldwide correspondent banking
relationships, active bank account relationships are maintained with leading
foreign banking institutions in major financial centers. The bank's trust
division provides a variety of fiduciary, investment management, advisory and
corporate agency services to individuals, corporations and foundations. The
bank acts as trustee for pension, profit-sharing and other employee benefit
plans and personal trusts and estates. For corporations, the bank acts as
trustee, transfer agent, registrar and in other corporate agency capacities.
Term Federal funds sold represent loans to commercial banks in the United
States. There are no industry concentrations (exceeding 10% of loans, gross)
in the commercial and industrial loan portfolio. Approximately 81% of the
bank's loans are to borrowers located in the metropolitan New York area. The
bank's legal lending limit to a single borrower was approximately $7.5 million
at December 31, 1994.
The composition of income from the bank's operations for the years ended: [1]
December 31, 1994 included interest and fees on commercial and other loans
(47%), interest and dividends on investments securities (44%) and other (9%);
[2] December 31, 1993 included interest on term Federal funds sold (2%),
interest and fees on commercial and other loans (44%), interest and dividends
on investment securities (43%), and other (11%); [3] December 31, 1992 included
interest on term Federal funds sold (6%), interest and fees on commercial and
other loans (37%), interest and dividends on investment securities (42%), and
other (15%).
At December 31, 1994, the bank had 189 employees, consisting of 73 officers and
116 supervisory and clerical employees. The bank considers its relations with
its employees to be satisfactory.
I-4
7
REGISTRANT AND FINANCE SUBSIDIARIES
The Registrant and its finance subsidiaries engage in various types of secured
financing activities such as asset based financing, factoring, consumer
receivables financing and residential mortgage loans and service certain such
accounts for the bank.
Asset based financing services rendered by the Registrant and its finance
subsidiaries include new business referral, collection, supervisory,
examination and bookkeeping to the bank for fees; and the bank assumes all
credit risks.
Standard Factors Corporation/Sterling Factors ("Factors") provides factoring
services. Factors purchases client's accounts receivable, assumes credit risk
on approved orders and handles credit and collection details and bookkeeping
requirements. Income for these services is derived from commissions charged
for receivables serviced and interest charged on advances to the client. In
addition, Factors services the bank's portfolio without assuming the credit
risk for those factored receivables managed for the bank. For these services,
Standard Factors Corporation receives a portion of factoring commissions paid
by the clients plus a portion of interest charged on advances. The accounts
receivable factored are for clients primarily engaged in the apparel and
textile industries.
The Registrant and its finance subsidiaries make business and consumer loans.
The loans are usually secured by real estate, personal property, accounts
receivable or other collateral; occasionally unsecured working capital advances
are provided to its customers.
Sterling Industrial Loan Association (S.I.L.A.), located in Richmond, Virginia,
jointly originates and services mortgage loans to homeowners funded by the
bank. S.I.L.A. receives a service fee. The loans are repayable in equal
monthly installments over periods ranging from 36 to 180 months. Loans are
usually made to allow the borrower to make home repairs, to consolidate debt or
to meet educational, medical or other expenses. The loans are secured by first
or second mortgages. The amounts loaned are less than the borrower's equity in
the home, as determined by appraisals.
On June 1, 1993, the Registrant acquired the assets of Zenith Financial
Corporation, a nationwide provider of consumer receivables financing. As a
division of the Registrant, Zenith engages in asset based lending with
independent dealers who market products (i.e., housewares, appliances,
automobiles, educational material, et al) to consumers on an installment basis
with repayment terms between 12 and 48 months. Zenith administers these
installment contracts for the dealer, providing billing, payment processing and
other bookkeeping services. Zenith makes advances to each dealer of up to 80%
of the discounted aggregate value of the dealer's installment contracts.
I-5
8
The composition of income (excluding equity in undistributed net income of the
banking subsidiary) of the Registrant and its finance subsidiaries for the
years ended: [1] December 31, 1994 included interest and fees on loans (46%),
interest and fees on accounts receivable factored (18%), dividends, interest
and service fees (35%) and other (1%); [2] December 31, 1993 included interest
and fees on loans (32%) interest and fees on accounts receivable factored
(14%), dividends, interest and service fees (50%), and other (4%); [3] December
31, 1992 included interest and fees on loans (11%), interest and fees on
accounts receivable factored (26%), dividends, interest and service fees (49%),
and other (14%).
At December 31, 1994, the Registrant and its finance subsidiaries employed 33
persons consisting of 10 officers with the balance of the employees performing
supervisory and clerical functions. Of these persons, 6 are represented by
District 65 Wholesale, Retail, Office and Processing Union. The Registrant and
its finance subsidiaries consider employee relations to be satisfactory.
SELECTED CONSOLIDATED STATISTICAL INFORMATION
I. Distribution of Assets, Liabilities and Shareholders' Equity; Interest
Rates and Interest Differential.
The information appearing on pages 38, 39 and 41 of the Company's 1994 Annual
Report is incorporated herein by reference.
II. Investment Portfolio
Shown below is a summary of the Company's investment securities by type with
related book values:
December 31,
------------------------------------
1994 1993 1992
------- ------- --------
(in thousands)
U.S. Treasury securities $ 41,022 $ 40,835 $ 28,427
Obligations of U.S. government corporations
and agencies--mortgage-backed securities 261,433 222,532 153,933
Obligations of states and political sub-
divisions................................... 30 30 178
Debt securities issued by foreign governments. 4,000 4,500 4,500
Corporate debt securities..................... -- 2,005 10,655
Other debt securities......................... 1,118 10,104 18,567
Federal Reserve Bank and other stock invest-
ments....................................... 4,179 6,810 3,311
-------- -------- --------
Total................................... $311,782 $286,816 $219,571
======== ======== ========
Information regarding book values and range of maturities by type of security
and weighted average yields for totals of each category is presented in the
Company's 1994 Annual Report on pages 18, 19 and 20 and is incorporated herein
by reference. The average yield by maturity range is not available.
I-6
9
III. Loan Portfolio
The following table sets forth the composition of the Company's loan portfolio
net of unearned discounts at the end of each of the most recent five fiscal
years:
December 31,
------------------------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(in thousands)
Domestic
Term Federal funds
sold............... $ -- $ 40,000 $ 99,000 $ 75,000 $200,000
Commercial and
industrial......... 260,869 218,559 150,681 115,782 130,488
Real estate -
mortgage........... 42,079 34,808 36,349 36,050 42,981
Real estate -
construction 1,486 1,665 1,606 1,833 --
Installment -
individuals........ 12,920 8,403 6,258 6,051 4,342
Other................ -- -- 982 639 1,389
Foreign
Government and
official insti-
tutions........... 789 789 789 789 789
-------- -------- -------- -------- --------
Loans, gross..... 318,143 304,224 295,665 236,144 379,989
Less: unearned discounts 5,374 5,473 6,874 8,546 11,426
-------- -------- -------- -------- --------
Loans, net of
unearned
discounts..... $312,769 $298,751 $288,791 $227,598 $368,563
======== ======== ======== ======== ========
The following table sets forth the maturities and sensitivity to changes in
interest rates of selected loans of the Company's loan portfolio at December
31, 1994:
Due One Due One Due Over Total
Year to Five Five Gross
or Less Years Years Loans
-------- -------- -------- --------
(in thousands)
Commercial, industrial and
other........................ $236,290 $ 24,495 $ 84 $260,869
Real estate - mortgage.......... 4,003 18,700 19,376 42,079
Real estate - construction 1,486 -- -- 1,486
Foreign......................... 789 -- -- 789
-------- -------- -------- --------
Total................... $242,568 $ 43,195 $ 19,460 $305,223
======== ======== ======== ========
Loans due after one year,
which have:
Predetermined interest
rates..................... $ 26,548 $ 19,460 $ 46,008
Floating or adjustable
interest rates........... 16,647 -- 16,647
-------- --------- --------
Total................... $ 43,195 $ 19,460 $ 62,655
======== ======== ========
I-7
10
It is the policy of the Company to consider all customer requests for
extensions of original maturity dates (rollovers), whether in whole or
in part, as though each was an application for a new loan subject to
standard approval criteria, including credit evaluation. The
information appearing in the Company's 1994 Annual Report beginning on
page 36 under the caption "CREDIT RISK", beginning on page 20 in
footnote 4 and on page 17 in footnote 1 under the caption "Loans" is
incorporated herein by reference.
The following table sets forth the aggregate amount of domestic
non-accrual, past due and restructured loans of the Company at the end
of each of the most recent five fiscal years; as of December 31, 1994,
there were no foreign loans accounted for on a nonaccrual basis or which
were troubled debt restructurings:
December 31,
---------------------------------------------------------
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
(in thousands)
Nonaccrual basis loans* $ 575[1] $2,297[1] $3,309[1] $4,499[1] $ 533
Past due 90 days or more
(other than the above)[2]. 293 146 619 3,873 254
------ ------ ------ ------ ------
Total................. $ 868 $2,443 $3,928 $8,372 $ 787
====== ====== ====== ====== ======
Note:Includes restructured
debt of............ $ -- $ -- $ -- $ -- $ 160
====== ====== ====== ====== ======
*Interest income that would
have been earned on non-
accrual and reduced rate
loans outstanding......... $ 86 $ 169 $ 313 $ 378 $ 73
====== ====== ====== ====== ======
Applicable interest income
actually realized......... $ 18 $ 98 $ 72 $ 16 $ --
====== ====== ====== ====== ======
Nonaccrual, past due and
restructured loans as a
percentage of total gross
loans.................... .27% .80% 1.33% 3.55% .20%
====== ====== ====== ====== =====
[1] Includes $-0-, $1.4, $1.9 and $2.5 million at December 31, 1994,
1993, 1992 and 1991, respectively, representing the balance of a
loan to a single borrower who filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code during the third quarter
of 1991.
[2] Loans contractually past due 90 days or more as to principal or
interest and still accruing are loans which are both well secured
or guaranteed by financially responsible third parties and are in
the process of collection.
I-8
11
IV. Summary of Loan Loss Experience
The information appearing in the Company's 1994 Annual Report on page 21 in
footnote 5 is incorporated herein by reference. The following table sets forth
certain information with respect to the Company's loan loss experience for each
of the most recent five fiscal years:
December 31,
--------------------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
Average loans outstanding, net
of unearned discounts, during
year............................ $255,223 $228,604 $211,917 $248,490 $351,388
======== ======== ======== ======== ========
Allowance for possible loan losses:
Balance at beginning of year...... $ 3,414 $ 3,177 $ 3,734 $ 3,373 $ 3,794
-------- -------- -------- -------- --------
Charge-offs:
Commercial and industrial..... 401 670 1,799 7,661 524
Real Estate 109 -- -- -- --
Installment................... 22 45 120 29 22
-------- -------- -------- -------- --------
Total charge-offs........... 532 715 1,919 7,690 546
-------- -------- -------- -------- --------
Recoveries:
Commercial and industrial..... 201 41 25 38 116
Installment................... -- 11 47 13 9
--------- -------- -------- -------- --------
Total recoveries............ 201 52 72 51 125
-------- -------- -------- -------- --------
Less: Net charge-offs............ 331 663 1,847 7,639 421
-------- -------- -------- -------- --------
Provision for possible loan losses 1,053 690 1,290 8,000 --
-------- -------- -------- -------- --------
Allowance - acquired portfolio -- 210 -- -- --
--------- -------- -------- -------- --------
Balance at end of year............ $ 4,136 $ 3,414 $ 3,177 $ 3,734 $ 3,373
======== ======== ======== ======== ========
Ratio of net charge-offs to
average loans outstanding, net
of unearned discounts during
year............................ .13% .29% .87% 3.07% .12%
======== ======= ======== ======== ========
On June 1, 1993 the parent company purchased for cash the assets (principally
loans) of Zenith Financial Corporation, a nationwide provider of consumer
receivables financing. The purchase price included the allowance for loan
losses of $209,627.
The Company's allowance for possible loan losses is a general reserve,
maintained without any specific dedication to the components of the loan
portfolio, available to meet the credit exposure implicit in any lending
activity. The information beginning on page 36 of the Company's 1994 Annual
Report under the caption "CREDIT RISK" is incorporated herein by reference.
The Company considers its allowance for possible loan losses to be adequate
based upon the size and risk characteristics of the outstanding loan portfolio
at December 31, 1994. While net losses within the loan portfolio are not
statistically predictable, it is possible that a deterioration in economic
conditions in the next twelve months could require future provisions for loan
losses above the level taken in 1994. The Company does not anticipate any
recurrence of net credit losses of the magnitude experienced in 1991.
I-9
12
V. Deposits
Average deposits and average rates paid for each of the most recent three years
is presented in the Company's 1994 Annual Report on page 38 and is incorporated
herein by reference.
Outstanding time certificates of deposit issued from domestic offices in
amounts of $100,000 or more and interest expense on domestic and foreign
deposits are presented in the Company's 1994 Annual Report on page 21 in
footnote 6 and is incorporated herein by reference.
The following table provides certain information with respect to the Company's
deposits for each of the most recent three fiscal years:
December 31,
------------------------------------------
1994 1993 1992
-------- -------- --------
(in thousands)
Domestic
Demand $174,897 $174,089 $159,235
NOW 34,055 32,253 28,441
Savings 29,201 33,078 34,851
Money Market 118,571 127,939 133,260
Time deposits, by remaining
periods to maturity
Within 3 months 58,527 67,128 72,219
After 3 months but within 1 year 23,172 23,249 16,066
After 1 but within 5 years 76,210 12,580 8,757
-------- -------- --------
Total domestic deposits 514,633 470,316 452,829
-------- -------- --------
Foreign
Time deposits, by remaining
periods to maturity
Within 3 months 1,670 1,670 2,330
After 3 months but within 1 year 1,000 1,000 1,000
-------- -------- --------
Total foreign deposits 2,670 2,670 3,330
-------- -------- --------
Total deposits $517,303 $472,986 $456,159
======== ======== ========
Interest expense for the most recent three fiscal years is as follows:
Years Ended December 31,
-----------------------------------------
1994 1993 1992
-------- -------- -------
(in thousands)
NOW $ 273 $ 394 $ 603
Savings 685 907 921
Money market 2,353 2,735 3,428
Time--domestic 5,058 2,403 2,818
--foreign 104 79 158
-------- -------- -------
Total interest expense $ 8,473 $ 6,518 $ 7,928
======== ======== =======
I-10
13
VI. Return on Equity and Assets
The Company's returns on average total assets and average shareholders' equity,
dividend payout ratio and average shareholders' equity to average total assets
for each of the most recent three years follow:
Years Ended December 31,
----------------------------------------
1994 1993 1992
-------- -------- -------
Return on average total assets (Net income
divided by average total assets)..... .61% .57% .52%
Return on average shareholders' equity (Net
income divided by average equity).... 7.52% 6.17% 5.19%
Dividend payout ratio (Dividends declared per
share divided by net income per share).... 33.33% 40.00% 48.78%
Average shareholders' equity to average total
assets (Average equity divided by average
total assets)............................. 8.08% 9.19% 9.98%
VII. Short-Term Borrowings
Balance and rate data for significant categories of the Company's Short-Term
Borrowings, for each of the most recent three years is presented in the
Company's 1994 Annual Report on page 22 in footnote 7 and is incorporated by
reference.
ITEM 2. PROPERTIES
The principal offices of the Company occupy four contiguous floors at 540
Madison Avenue at 55th Street, New York, N.Y. consisting of approximately
29,000 square feet. These are held under two leases, of which the one covering
the upper floor expires December 31, 1996. The other, covering the lower three
floors, expires December 31, 1996 with a renewal option to December 31, 2001.
Annual rental commitments approximate $882,000. Certain finance subsidiaries
maintain offices in Beverly Hills, California and Richmond, Virginia.
In addition to the principal offices, the bank maintains operating leases for
three additional branch offices, the International Banking Facility and an
Operations Center with an aggregate of approximately 43,100 square feet. The
annual office rental commitments for these premises approximates $542,000. The
leases have expiration dates ranging from 2001 through 2008 with varying
additional renewal options. The bank also maintains a branch located in Forest
Hills owned by the bank (and not subject to a mortgage).
I-11
14
ITEM 3. LEGAL PROCEEDINGS
Neither Registrant nor any of its subsidiaries is party to any material legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The information beginning on page 12 of the Sterling Bancorp Proxy Statement
dated March 16, 1995 under the captions "Approval of Stock Incentive Plan
Amendment" and "Shareholder Proposal" is incorporated herein by reference.
I-12
15
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The information appearing on page 37 of the Sterling Bancorp 1994 Annual Report
under the caption "MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS" is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information appearing on page 34 of the 1994 Annual Report under the
caption "Selected Financial Data" is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information appearing on pages 35 - 37 of the 1994 Annual Report under the
caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations" is incorporated herein by reference. Supplementary Data
appearing on page 32 of the 1994 Annual Report under the caption "Quarterly
Data (Unaudited)" is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's consolidated financial statements as of December 31, 1994 and
1993 and for each of the years in the three-year period ended December 31, 1994
and the statements of condition of Sterling National Bank & Trust Company of
New York as of December 31, 1994 and 1993, notes thereto and Independent
Auditors' Report thereon appearing on pages 11 - 33 of the 1994 Annual Report,
are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
II-1
16
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information beginning on page 1 of the Sterling Bancorp Proxy Statement
dated March 16, 1995 under the caption "Election of Directors" and on page 10
of the same proxy statement under the caption "Security Ownership of Directors
and Executive Officers and Certain Beneficial Owners" are incorporated herein
by reference.
Executive Officers - This information is included pursuant to Instruction 3 to
Item 401 (b) and (c) of Regulation S-K:
Held
Executive
Office
Name of Executive Title Age Since
----------------- ------------------- ---- ---------
Louis J. Cappelli..... Chairman of the Board and
Chief Executive Officer,
Director 64 1967
John C. Millman....... President, Director 52 1986
Jerrold Gilbert....... Executive Vice President, General
Counsel & Secretary 58 1974
John W. Tietjen....... Senior Vice President, Treasurer
and Chief Financial Officer 50 1989
John A. Aloisio....... Vice President 52 1992
Leonard Rudolph....... Vice President 47 1992
Frank J. Voso......... Vice President 51 1989
All executive officers are elected annually by the Board of Directors and serve
at the pleasure of the Board. There are no arrangements or understandings
between any of the foregoing officers and any other person or persons pursuant
to which he was selected as an executive officer.
ITEM 11. EXECUTIVE COMPENSATION
The information beginning on page 3 of the Sterling Bancorp Proxy Statement
dated March 16, 1995 under the caption " Executive Compensation and Related
Matters" and on page 9 of the same Proxy Statement under the caption
"Transactions with the Company and Other Matters" are incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The information beginning on page 10 of the Sterling Bancorp Proxy Statement
dated March 16, 1995 under the caption "Security Ownership of Directors and
Executive Officers and Certain Beneficial Owners" is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information appearing on page 9 of the Sterling Bancorp Proxy Statement
dated March 16, 1995 under the caption "Transactions with the Company and Other
Matters" is incorporated herein by reference.
III-1
17
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The documents filed as a part of this report are listed below:
1. Financial Statements
Annual Report to security holders, Sterling Bancorp
1994 Annual Report (This document is filed only to
the extent of pages 11 through 41 which are
incorporated by reference herein).
2. Financial Statement Schedules
None
3. Exhibits
3(i)(A) Amended and restated Certificate of
Incorporation filed with the State of New
York, Department of State, August 14, 1986
(Filed as Exhibit 3.3 to Registrant's Form
10-K for the fiscal year ended December
31, 1986 and incorporated by reference
herein).
(i)(B) Certificate of Amendment of The
Certificate of Incorporation filed with
the State of New York Department of State,
June 13, 1988 (Filed as Exhibit 3.5 to
Registrant's Form 10-K for the fiscal year
ended December 31, 1988 and incorporated
by reference herein).
(i)(C) Certificate of Amendment of the
Certificate of Incorporation filed with
the State of New York Department of
State, March 5, 1993 (Filed as Exhibit
4.1 to Registrant's Form 8-K dated March
5, 1993 and incorporated by reference
herein).
3(ii) By-Laws as in effect on March 15, 1993
(Filed as Exhibit 3.3 to the Registrant's
Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein
by reference).
4 (a) Indenture relating to floating interest
rate convertible subordinated debentures,
third series, due July 1, 1996 (Filed as
Exhibit 4(a) to Registrant's Registration
Statement 2-97263 and incorporated by
reference herein).
(b) Indenture relating to floating interest
rate convertible subordinated debentures,
4th series, due November 1, 1998 (Filed as
Exhibit 4(a) to Registrant's Registration
Statement 33-23877 and incorporated by
reference herein).
(c) Indenture dated as of August 1, 1994
relating to floating interest rate
convertible subordinated debentures,
series V, due July 1, 2001 (Filed as
Exhibit T3C to Registrant's Application
for Qualification of Indenture No.
022-22183 and incorporated herein by
reference).
10(i) Employment Agreements, dated as of
February 19, 1993 (Filed as Exhibits
3.4(a) and 3.4(b), respectively, to the
Registrant's Form 10-K for the fiscal year
ended December 31, 1992 and incorporated
herein by reference).
(a) For Louis J. Cappelli
(b) For John C. Millman
(ii) Amendments dated February 14, 1995 to
Employment Agreements
(a) For Louis J. Cappelli
(b) For John C. Millman
11 Statement re Computation of Per Share
Earnings.
IV-1
18
13 Annual Report to security holders,
Sterling Bancorp 1994 Annual Report (This
document is filed only to the extent of
pages 11 through 41 which are incorporated
by reference herein).
21 Subsidiaries of the Registrant.
27 Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the last quarter
of the period covered by this report.
IV-2
19
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, The Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
STERLING BANCORP
/s/ Louis J. Cappelli
---------------------------
Louis J. Cappelli, Chairman
(Principal Executive Officer)
March 29, 1995
Date
/s/ John W. Tietjen
---------------------------
John W. Tietjen, Treasurer
(Principal Financial and Accounting Officer)
March 29, 1995
Date
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
March 29, 1995 /s/ Louis J. Cappelli Director
-------------- ------------------------------ -----------------------
(Date) (Signature) (Title)
March 29, 1995 /s/ John C. Millman Director
-------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
March 29, 1995 /s/ Allan F. Hershfield Director
-------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
March 29, 1995 /s/ Maxwell M. Rabb Director
-------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
March 29, 1995 /s/ Walter Feldesman Director
-------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
March 29, 1995 /s/ Henry J. Humphreys Director
-------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
March 29, 1995 /s/ Lillian Berkman Director
-------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
20
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
DOCUMENTS FILED
AS A PART
OF THIS REPORT
ON
FORM 10-K
ANNUAL REPORT - 1994
------------
STERLING BANCORP
================================================================================
21
DOCUMENT INDEX
1. Financial Statements
Annual Report to security holders, Sterling Bancorp
1994 Annual Report (This document is filed only to
the extent of pages 11 through 41 which are
incorporated by reference herein).
2. Financial Statement Schedules
None
3. Exhibits
3(i)(A) Amended and restated Certificate of
Incorporation filed with the State of New
York, Department of State, August 14, 1986
(Filed as Exhibit 3.3 to Registrant's Form
10-K for the fiscal year ended December
31, 1986 and incorporated by reference
herein).
(i)(B) Certificate of Amendment of The
Certificate of Incorporation filed with
the State of New York Department of State,
June 13, 1988 (Filed as Exhibit 3.5 to
Registrant's Form 10-K for the fiscal year
ended December 31, 1988 and incorporated
by reference herein).
(i)(C) Certificate of Amendment of the
Certificate of Incorporation filed with
the State of New York Department of
State, March 5, 1993 (Filed as Exhibit
4.1 to Registrant's Form 8-K dated March
5, 1993 and incorporated by reference
herein).
3(ii) By-Laws as in effect on March 15, 1993
(Filed as Exhibit 3.3 to the Registrant's
Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein
by reference).
4 (a) Indenture relating to floating interest
rate convertible subordinated debentures,
third series, due July 1, 1996 (Filed as
Exhibit 4(a) to Registrant's Registration
Statement 2-97263 and incorporated by
reference herein).
(b) Indenture relating to floating interest
rate convertible subordinated debentures,
4th series, due November 1, 1998 (Filed as
Exhibit 4(a) to Registrant's Registration
Statement 33-23877 and incorporated by
reference herein).
(c) Indenture dated as of August 1, 1994
relating to floating interest rate
convertible subordinated debentures,
series V, due July 1, 2001 (Filed as
Exhibit T3C to Registrant's Application
for Qualification of Indenture No.
022-22183 and incorporated herein by
reference).
10(i) Employment Agreements, dated as of
February 19, 1993 (Filed as Exhibits
3.4(a) and 3.4(b), respectively, to the
Registrant's Form 10-K for the fiscal year
ended December 31, 1992 and incorporated
herein by reference).
(a) For Louis J. Cappelli
(b) For John C. Millman
(ii) Amendments dated February 14, 1995 to
Employment Agreements
(a) For Louis J. Cappelli
(b) For John C. Millman
11 Statement re Computation of Per Share
Earnings.
13 Annual Report to security holders,
Sterling Bancorp 1994 Annual Report (This
document is filed only to the extent of
pages 11 through 41 which are incorporated
by reference herein).
21 Subsidiaries of the Registrant.
27 Financial Data Schedule
4. Reports on Form 8-K:
There were no reports on Form 8-K filed during the last
quarter of the period covered by this report.
22
EXHIBIT INDEX
Exhibit
Number
-------
3(i)(A) Amended and restated Certificate of Incorporation filed with the State of New York,
Department of State, August 14, 1986 (Filed as Exhibit 3.3 to Registrant's Form 10-K
for the fiscal year ended December 31, 1986 and incorporated by reference herein).
(i)(B) Certificate of Amendment of The Certificate of Incorporation filed with the State of
New York Department of State, June 13, 1988 (Filed as Exhibit 3.5 to Registrant's Form 10-K
for the fiscal year ended December 31 1988 and incorporated by reference herein).
(i)(C) Certificate of Amendment of the Certificate of Incorporation filed with the State of
New York Department of State, March 5, 1993 (Filed as Exhibit 4.1 to Registrant's Form
8-K dated March 5, 1993 and incorporated by reference herein).
3(ii) By-Laws as in effect on March 15, 1993 (Filed as Exhibit 3.3 to the Registrant's Form 10-K
for the fiscal year ended December 31, 1992 and incorporated herein by reference).
4 (a) Indenture relating to floating interest rate convertible subordinated debentures, third
series, due July 1, 1996 (Filed as Exhibit 4(a) to Registrant's Registration Statement
2-97263 and incorporated by reference herein).
(b) Indenture relating to floating interest rate convertible subordinated debentures, 4th
series, due November 1, 1998 (Filed as Exhibit 4(a) to Registrant's Registration Statement
33-23877 and incorporated by reference herein).
(c) Indenture dated as of August 1, 1994 relating to floating interest rate convertibile
subordinated debentures, series V, due July 1, 2001 (Filed as Exhibit T3C to Registrant's
Application for Qualification of Indenture No. 022-22183 and incorporated herein by
reference).
10(i) Employment Agreements, dated as of February 19, 1993 (Filed as Exhibits 3.4(a) and 3.4(b),
respectively, to the Registrant's Form 10-K for the fiscal year ended December 31, 1992 and
incorporated herein by reference).
(a) For Louis J. Cappelli
(b) For John C. Millman
(ii) Amendments dated February 14, 1995 to Employment Agreements
(a) For Louis J. Cappelli
(b) For John C. Millman
11 Statement re Computation of Per Share Earnings.
13 Annual Report to security holders, Sterling Bancorp 1994 Annual Report (This document is
filed only to the extent of pages 11 through 41 which are incorporated by reference herein).
21 Subsidiaries of the Registrant.
27 Financial Data Schedule