Sterling Bancorp Reports 2010 Second Quarter Results
-- Net Income Increases from Prior Year and Prior Quarter --
-- Total Assets Reach a New Record --
-- Strong Capital Resources Support Growth Strategies --
NEW YORK, July 26 /PRNewswire-FirstCall/ -- Sterling Bancorp (NYSE: STL), a financial holding company headquartered in New York City and the parent company of Sterling National Bank, today reported net income available to common shareholders of $2.3 million, or $0.09 per diluted share, for the second quarter ended June 30, 2010. The Company attributed its increasing profitability to a series of recent initiatives, including the acquisition and launch of complementary products, a capital raise in March 2010 that provided additional resources for growth, a continued sharp focus on meeting the needs of customers in its marketplace, and a disciplined approach to expense control.
Financial Highlights
- Rising profitability – For the 2010 second quarter, Sterling's net income available to common shareholders reached its highest level since the first quarter of 2009.
- Strong capital – The tangible common equity ratio rose to 7.33% from 4.47% a year earlier, and all capital ratios exceeded the regulatory "well-capitalized" requirements.
- Loans – Responding to opportunities in its marketplace, Sterling approved significant new credit facilities during the first half of this year. Total loans in portfolio rose 14.9% from a year ago, excluding lease financing receivables, which experienced a planned reduction in volume. The portfolio exceeded $1.2 billion at June 30, 2010.
- Demand deposits increase – Demand deposits rose to $525.2 million at June 30, 2010, up 19.2% from a year ago. The ratio of demand deposits to total deposits remains one of the highest in the industry, at 32.0%, and represents a stable source of low-cost funds.
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- Noninterest income growth – Noninterest income rose 5.2% to $11.4 million, primarily driven by growth in Sterling's accounts receivable management, factoring and import trade finance fees.
- Improving credit quality – The level of nonaccrual loans decreased by $1.9 million compared with the second quarter of 2009.
Management Comments
"Our ongoing efforts to use our increased capital resources to support profitable growth resulted in higher earnings for the second quarter of 2010," said Louis J. Cappelli, Sterling's Chairman and Chief Executive Officer. "Net income rose to the highest level of the past four quarters. Total assets reached a record $2.28 billion and deposits also have increased substantially. We have continued to grow our lending activities in a prudent and disciplined manner, in accordance with our traditional credit standards."
"Sterling is working diligently to build upon this solid performance, while continuing to meet the needs of our customers and prospects. Our already strong capital base has been further enhanced by our stock offering in the first quarter of this year. We have continued to expand our range of products – and our potential to create shareholder value – both through acquisitions and organic growth. Strategic initiatives have enabled us to extend our reach to new customers and markets, while adding to our revenue and earnings-generating capacity. One such recent initiative was our launch of a mortgage warehouse lending program in April 2010, which is a natural extension of our expertise in asset-based lending and mortgage finance."
"Looking ahead, we have abundant capital and liquidity to respond to the vast opportunities we see in our marketplace, but are still in the early stages of prudently deploying that capital. As a result, our current asset mix reflects a relatively high level of short-term, lower-yielding investment securities. As we continue to respond to the needs of quality borrowers, we would expect to shift that asset mix to loans, thus achieving higher yields. The results of this and other efforts to grow our business should be reflected in Sterling's future performance," Mr. Cappelli noted.
Second Quarter 2010 Financial Results
Net income available to common shareholders for the second quarter of 2010 was $2.3 million, or $0.09 per diluted share, versus $0.1 million, or $0.01 per diluted share, for the same period of 2009. The significant increase in profitability reflected the Company's recent growth initiatives, while the year-ago results included an industry-wide FDIC special assessment and other factors related to the economic downturn. Sterling's performance in the 2010 second quarter benefitted from higher noninterest income, a lower provision for loan losses, and reduced noninterest expenses. This more than offset lower net interest income due to asset mix and prevailing interest rates. Earnings per share in the 2010 period reflected the impact of a significant increase in the average number of common shares outstanding due to Sterling's stock offering completed on March 19, 2010.
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Net interest income, on a tax-equivalent basis, was $21.1 million for the 2010 second quarter, compared to $21.5 million for the 2009 period. This change primarily reflected higher average loan and investment securities balances, reduced borrowings and lower funding costs, offset by the impact of lower yields on loans and securities, and higher interest-bearing deposit balances. Net interest margin was 4.12% for the 2010 second quarter, on a tax-equivalent basis, compared to 4.37% for the 2010 first quarter and 4.53% for the second quarter of 2009, primarily due to Sterling's deployment of the proceeds of its March 2010 stock offering in short-term, lower yielding investment securities.
Noninterest income rose 5.2% to $11.4 million for the 2010 second quarter from $10.8 million a year earlier. This increase primarily reflected higher accounts receivable management, factoring and import trade finance fees, due to Sterling's expansion of that business through an acquisition as well as organic growth. Service charges on deposit accounts also contributed to the rise in noninterest income. These factors were partially offset by lower mortgage banking income.
Noninterest expenses fell 8.3% to $22.1 million for the 2010 second quarter, from $24.1 million a year ago, primarily as the result of lower advertising, professional fee and deposit insurance expenses. Included in the results for the year-ago period was the impact of the industry-wide FDIC special assessment.
First Half 2010 Financial Results
Net income available to common shareholders for the first half of 2010 was $4.3 million, or $0.19 per diluted share, up from $2.9 million, or $0.16 per diluted share, for the same period of 2009. Earnings per share in the 2010 period reflected the impact of a significant increase in the average number of common shares outstanding due to Sterling's stock offering completed on March 19, 2010.
Net interest income, on a tax-equivalent basis, was $41.5 million for the first half of 2010, compared to $43.0 million for the same 2009 period. The decrease primarily reflected higher average loan and investment securities balances, reduced borrowings and lower funding costs, offset by the impact of lower yields on loans and securities, and higher interest-bearing deposit balances. Net interest margin was 4.27% for the first six months of 2010, on a tax-equivalent basis, compared to 4.55% for the same period of 2009, primarily due to Sterling's deployment of the proceeds of its March 2010 stock offering in short-term, lower yielding investment securities.
Noninterest income rose to $22.5 million for the first half of 2010, compared to $21.6 million a year ago. This increase primarily reflected Sterling's expansion of its accounts receivable management, factoring and import trade finance business through acquisition and organic growth. This was partially offset by lower mortgage banking income and securities gains.
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Noninterest expenses were $43.5 million for the first half of 2010, down from $44.2 million in 2009, primarily as a result of lower professional fee and deposit insurance expenses. Included in the results for the year-ago period was the impact of the industry-wide FDIC special assessment.
Loans and Deposits
Total loans held in portfolio were $1.24 billion at June 30, 2010, rising from $1.16 billion a year earlier. Excluding lease financing receivables, which had a planned reduction in volume, loans held in portfolio increased 14.9% from a year ago. Sterling extended a significant level of new credit facilities during the first six months of 2010, while maintaining its traditional disciplined credit standards.
Noninterest-bearing demand deposits totaled $525.2 million at June 30, 2010, a 19.2% increase from a year ago, and represented 32.0% of total deposits, one of the highest ratios of demand to total deposits in the industry. Total deposits were $1.64 billion at June 30, 2010, up from $1.30 billion a year earlier.
Asset Quality
The Company has continued to experience an improvement in credit quality. The provision for loan losses declined to the lowest level of the past six quarters, at $5.5 million for the 2010 second quarter. Net charge-offs were $5.0 million for the 2010 second quarter, compared to $5.6 million a year ago. The allowance for loan losses as a percent of nonaccrual loans was 109.8% at June 30, 2010, an improvement in coverage from 88.0% at June 30, 2009.
The level of nonaccrual loans was $18.7 million at June 30, 2010, compared to $20.6 million a year earlier. The ratio of nonaccrual loans to total loans was 1.46% at June 30, 2010, versus 1.69% at June 30, 2009.
Capital
Sterling's capital base, which previously exceeded all regulatory requirements for well-capitalized institutions, was further strengthened by the capital raise completed on March 19, 2010. The tangible common equity ratio rose to 7.33% at June 30, 2010 from 4.54% at December 31, 2009 and 4.47% at June 30, 2009. Book value per common share increased to $7.04 at June 30, 2010 from $6.73 at December 31, 2009 and $6.51 at June 30, 2009.
At June 30, 2010, Sterling's Tier 1 risk-based capital ratio was 14.32% (compared to a requirement of 6.00%), total risk-based capital was 15.55% (requirement of 10.00%), and the Tier 1 leverage ratio was 10.76% (requirement of 5.00%).
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Conference Call
Sterling Bancorp will host a teleconference call for the financial community on July 26, 2010, at 10:00 a.m. Eastern Daylight Time to discuss the second quarter 2010 financial results. To access the conference call live, interested parties may dial 800-230-1093 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 July 26, 2010, until 11:59 p.m. Eastern Daylight Time on August 9, 2010. To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 164601.
About Sterling Bancorp
Sterling Bancorp (NYSE: STL) is a New York City-based financial corporation with assets exceeding $2 billion. Since 1929, Sterling National Bank, the company's principal banking subsidiary, has successfully served the needs of businesses, professionals and individuals in the NY metropolitan area and beyond. Sterling is well-known for its high-touch, hands-on approach to customer service and a special focus on serving the business community.
Sterling offers clients a full range of depository and cash management services plus a broad portfolio of financing solutions – including working capital lines, accounts receivable and inventory financing, factoring, international trade financing, payroll funding and processing, equipment leasing and financing, commercial and residential mortgages and trust and custodial account services.
Certain statements in this press release, including but not limited to, statements as to future events, future liquidity, future interest rate risk and operating expenses, statements concerning future results of operations, financial position or dividends, and plans and objectives for future operations, future capital, future liquidity and future growth, statements concerning the economic environment and credit quality, and the Company's position for future growth and ability to benefit from an economic recovery, and other statements contained herein 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, and the Company makes no commitment to update or revise forward-looking statements to reflect new information or subsequent events or changes in expectations. 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2009.
# # # |
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Page 5 of 15 |
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STERLING BANCORP |
|||||||||
Consolidated Financial Highlights |
|||||||||
(Unaudited) |
|||||||||
(dollars in thousands, except per share data) |
|||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||
2010 |
2009 |
2010 |
2009 |
||||||
BALANCE SHEET HIGHLIGHTS |
|||||||||
Period End Balances |
|||||||||
Investment securities |
$819,079 |
$708,089 |
$819,079 |
$708,089 |
|||||
Loans held for sale |
41,053 |
57,385 |
41,053 |
57,385 |
|||||
Loans held in portfolio, |
|||||||||
net of unearned discount |
1,237,270 |
1,160,429 |
1,237,270 |
1,160,429 |
|||||
Federal Reserve Bank and Federal Home Loan |
|||||||||
Bank stock, at cost |
8,497 |
9,382 |
8,497 |
9,382 |
|||||
Total earning assets |
2,118,327 |
1,940,896 |
2,118,327 |
1,940,896 |
|||||
Allowance for loan losses |
20,512 |
18,134 |
20,512 |
18,134 |
|||||
Total assets |
2,284,308 |
2,127,567 |
2,284,308 |
2,127,567 |
|||||
Demand deposits |
525,242 |
440,626 |
525,242 |
440,626 |
|||||
Savings, NOW and money market deposits |
526,701 |
532,275 |
526,701 |
532,275 |
|||||
Time deposits |
589,531 |
331,766 |
589,531 |
331,766 |
|||||
Customer repurchase agreements |
21,071 |
55,129 |
21,071 |
55,129 |
|||||
Other short-term borrowings |
107,733 |
263,001 |
107,733 |
263,001 |
|||||
Long-term borrowings |
150,656 |
175,774 |
150,656 |
175,774 |
|||||
Shareholders' equity |
229,275 |
157,721 |
229,275 |
157,721 |
|||||
Average Balances |
|||||||||
Investment securities |
$836,270 |
$669,581 |
$766,621 |
$704,645 |
|||||
Loans held for sale |
25,676 |
52,653 |
26,257 |
43,101 |
|||||
Loans held in portfolio, |
|||||||||
net of unearned discount |
1,194,574 |
1,151,915 |
1,163,587 |
1,139,887 |
|||||
Federal Reserve Bank and Federal Home Loan |
|||||||||
Bank stock |
7,808 |
9,382 |
8,136 |
9,665 |
|||||
Total earning assets |
2,088,834 |
1,910,029 |
1,998,485 |
1,916,576 |
|||||
Total assets |
2,258,219 |
2,059,981 |
2,164,853 |
2,067,560 |
|||||
Demand deposits |
466,017 |
417,509 |
467,337 |
416,847 |
|||||
Savings, NOW and money market deposits |
558,506 |
556,407 |
575,451 |
569,818 |
|||||
Time deposits |
593,243 |
335,258 |
523,333 |
331,844 |
|||||
Customer repurchase agreements |
54,829 |
77,261 |
52,689 |
75,987 |
|||||
Other short-term borrowings |
61,494 |
228,019 |
53,212 |
227,156 |
|||||
Long-term borrowings |
150,131 |
175,774 |
152,778 |
175,774 |
|||||
Shareholders' equity |
227,102 |
158,907 |
199,330 |
158,224 |
|||||
ASSET QUALITY HIGHLIGHTS |
|||||||||
Period End |
|||||||||
Net charge-offs |
$4,951 |
$5,635 |
$10,821 |
$10,632 |
|||||
Nonaccrual loans |
18,688 |
20,607 |
18,688 |
20,607 |
|||||
Other real estate owned |
761 |
1,105 |
761 |
1,105 |
|||||
Nonperforming assets |
19,449 |
21,712 |
19,449 |
21,712 |
|||||
Nonaccrual loans/loans (1) |
1.46% |
1.69% |
1.46% |
1.69% |
|||||
Nonperforming assets/assets |
0.85% |
1.02% |
0.85% |
1.02% |
|||||
Allowance for loan losses/loans (2) |
1.66% |
1.56% |
1.66% |
1.56% |
|||||
Allowance for loan losses/nonaccrual loans |
109.76% |
88.00% |
109.76% |
88.00% |
|||||
CAPITAL RATIOS |
|||||||||
Period End |
|||||||||
Tier 1 risk based |
14.32% |
11.65% |
14.32% |
11.65% |
|||||
Total risk based |
15.55% |
12.87% |
15.55% |
12.87% |
|||||
Leverage |
10.76% |
8.53% |
10.76% |
8.53% |
|||||
Tangible common equity |
7.33% |
4.47% |
7.33% |
4.47% |
|||||
Book value per common share |
$7.04 |
$6.51 |
$7.04 |
$6.51 |
|||||
(1) The term "loans" includes loans held for sale and loans held in portfolio. |
|||||||||
(2) The term "loans" includes loans held in portfolio only. |
|||||||||
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STERLING BANCORP |
|||||||||
Consolidated Balance Sheets |
|||||||||
(Unaudited) |
|||||||||
(in thousands, except number of shares) |
|||||||||
June 30, |
|||||||||
2010 |
2009 |
||||||||
ASSETS |
|||||||||
Cash and due from banks |
$ |
32,511 |
$ |
34,816 |
|||||
Interest-bearing deposits with other banks |
12,428 |
5,611 |
|||||||
Investment securities |
|||||||||
Available for sale (at estimated fair value) |
478,647 |
344,094 |
|||||||
Held to maturity (at amortized cost) |
340,432 |
363,995 |
|||||||
Total investment securities |
819,079 |
708,089 |
|||||||
Loans held for sale |
41,053 |
57,385 |
|||||||
Loans held in portfolio, net of unearned discounts |
1,237,270 |
1,160,429 |
|||||||
Less allowance for loan losses |
20,512 |
18,134 |
|||||||
Loans held in portfolio, net |
1,216,758 |
1,142,295 |
|||||||
Federal Reserve Bank and Federal Home Loan Bank stock, at cost |
8,497 |
9,382 |
|||||||
Customers' liability under acceptances |
0 |
180 |
|||||||
Goodwill |
22,901 |
22,901 |
|||||||
Premises and equipment, net |
14,451 |
10,041 |
|||||||
Other real estate |
761 |
1,105 |
|||||||
Accrued interest receivable |
10,110 |
7,772 |
|||||||
Cash surrender value of life insurance policies |
50,166 |
47,631 |
|||||||
Other assets |
55,593 |
80,359 |
|||||||
$ |
2,284,308 |
$ |
2,127,567 |
||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||
Deposits |
|||||||||
Demand |
$ |
525,242 |
$ |
440,626 |
|||||
Savings, NOW and money market |
526,701 |
532,275 |
|||||||
Time |
589,531 |
331,766 |
|||||||
Total deposits |
1,641,474 |
1,304,667 |
|||||||
Securities sold under agreements to repurchase - customers |
21,071 |
55,129 |
|||||||
Securities sold under agreements to repurchase - dealers |
39,893 |
0 |
|||||||
Federal funds purchased |
10,000 |
87,000 |
|||||||
Commercial paper |
11,061 |
11,739 |
|||||||
Short-term borrowings - FRB |
0 |
160,000 |
|||||||
Short-term borrowings - other |
46,779 |
4,262 |
|||||||
Long-term borrowings - FHLB |
124,882 |
150,000 |
|||||||
Long-term borrowings - subordinated debentures |
25,774 |
25,774 |
|||||||
Acceptances outstanding |
0 |
180 |
|||||||
Accrued interest payable |
1,622 |
1,874 |
|||||||
Due to factored clients |
77,918 |
65,535 |
|||||||
Accrued expenses and other liabilities |
54,559 |
103,686 |
|||||||
Total liabilities |
2,055,033 |
1,969,846 |
|||||||
Shareholders' equity |
229,275 |
157,721 |
|||||||
$ |
2,284,308 |
$ |
2,127,567 |
||||||
MEMORANDA |
|||||||||
Available for sale securities - amortized cost |
$ |
476,013 |
$ |
342,988 |
|||||
Held to maturity securities - estimated fair value |
351,007 |
370,844 |
|||||||
Shares outstanding |
|||||||||
Common issued |
31,138,545 |
22,226,425 |
|||||||
Common in treasury |
4,297,782 |
4,119,934 |
|||||||
NOTE: Certain reclassifications have been made to prior period's financial data to conform to current |
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STERLING BANCORP |
|||||||||
Consolidated Statements of Income |
|||||||||
(Unaudited) |
|||||||||
(dollars in thousands, except per share data) |
|||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||
2010 |
2009 |
2010 |
2009 |
||||||
INTEREST INCOME |
|||||||||
Loans |
$ |
17,121 |
$ |
18,264 |
$ |
33,632 |
$ |
35,816 |
|
Investment securities - available for sale |
3,377 |
4,159 |
6,330 |
9,629 |
|||||
Investment securities - held to maturity |
3,890 |
3,594 |
8,302 |
7,128 |
|||||
FRB and FHLB stock |
63 |
177 |
184 |
196 |
|||||
Deposits with other banks |
24 |
9 |
43 |
19 |
|||||
Total interest income |
24,475 |
26,203 |
48,491 |
52,788 |
|||||
INTEREST EXPENSE |
|||||||||
Savings, NOW and money market deposits |
825 |
943 |
1,790 |
2,068 |
|||||
Time deposits |
1,637 |
2,049 |
3,312 |
4,215 |
|||||
Securities sold u/a/r - customers |
65 |
88 |
126 |
203 |
|||||
Securities sold u/a/r - dealers |
5 |
0 |
5 |
0 |
|||||
Federal funds purchased |
19 |
7 |
23 |
41 |
|||||
Commercial paper |
9 |
17 |
22 |
40 |
|||||
Short-term borrowings - FHLB |
0 |
0 |
0 |
11 |
|||||
Short-term borrowings - FRB |
0 |
126 |
9 |
225 |
|||||
Short-term borrowings - other |
4 |
0 |
4 |
1 |
|||||
Long-term borrowings - FHLB |
849 |
1,134 |
1,720 |
2,256 |
|||||
Long-term subordinated debentures |
524 |
524 |
1,047 |
1,047 |
|||||
Total interest expense |
3,937 |
4,888 |
8,058 |
10,107 |
|||||
Net interest income |
20,538 |
21,315 |
40,433 |
42,681 |
|||||
Provision for loan losses |
5,500 |
6,800 |
11,500 |
13,000 |
|||||
Net interest income after provision for loan losses |
15,038 |
14,515 |
28,933 |
29,681 |
|||||
NONINTEREST INCOME |
|||||||||
Accounts receivable management/factoring commissions and other fees |
5,946 |
4,858 |
11,073 |
8,101 |
|||||
Service charges on deposit accounts |
1,548 |
1,360 |
3,021 |
2,743 |
|||||
Trade finance income |
501 |
437 |
993 |
842 |
|||||
Other customer related service charges and fees |
171 |
202 |
326 |
476 |
|||||
Mortgage banking income |
1,496 |
2,541 |
3,173 |
4,647 |
|||||
Trust fees |
82 |
117 |
166 |
256 |
|||||
Income from life insurance policies |
296 |
289 |
560 |
548 |
|||||
Securities gains |
746 |
874 |
2,248 |
3,939 |
|||||
Gain on sale of OREO |
15 |
22 |
28 |
20 |
|||||
Other income |
560 |
97 |
875 |
29 |
|||||
Total noninterest income |
11,361 |
10,797 |
22,463 |
21,601 |
|||||
NONINTEREST EXPENSES |
|||||||||
Salaries |
10,462 |
9,985 |
20,120 |
19,974 |
|||||
Employee benefits |
3,199 |
3,268 |
6,703 |
5,945 |
|||||
Total personnel expense |
13,661 |
13,253 |
26,823 |
25,919 |
|||||
Occupancy and equipment expenses, net |
3,052 |
2,903 |
5,592 |
5,575 |
|||||
Advertising and marketing |
678 |
1,026 |
1,684 |
1,680 |
|||||
Professional fees |
1,020 |
1,900 |
2,373 |
3,023 |
|||||
Communications |
562 |
435 |
910 |
866 |
|||||
Deposit insurance |
770 |
1,513 |
1,524 |
1,864 |
|||||
Other expenses |
2,396 |
3,113 |
4,569 |
5,268 |
|||||
Total noninterest expenses |
22,139 |
24,143 |
43,475 |
44,195 |
|||||
Income before income taxes |
4,260 |
1,169 |
7,921 |
7,087 |
|||||
Provision for income taxes |
1,278 |
394 |
2,376 |
2,700 |
|||||
Net income |
2,982 |
775 |
5,545 |
4,387 |
|||||
Dividends on preferred shares and accretion |
644 |
637 |
1,280 |
1,479 |
|||||
Net income available to common shareholders |
$ |
2,338 |
$ |
138 |
$ |
4,265 |
$ |
2,908 |
|
Page 8 of 15 |
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STERLING BANCORP |
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Consolidated Statements of Income |
|||||||||
(Unaudited) |
|||||||||
(dollars in thousands, except per share data) |
|||||||||
(continued) |
|||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||
2010 |
2009 |
2010 |
2009 |
||||||
Average number of common shares outstanding |
|||||||||
Basic |
25,752,172 |
18,106,491 |
22,479,292 |
18,103,014 |
|||||
Diluted |
25,752,172 |
18,150,721 |
22,484,177 |
18,222,941 |
|||||
Net income available to common shareholders per average common share |
|||||||||
Basic |
$ 0.09 |
$ 0.01 |
$ 0.19 |
$ 0.16 |
|||||
Diluted |
0.09 |
0.01 |
0.19 |
0.16 |
|||||
Dividends per common share |
0.09 |
0.19 |
0.18 |
0.38 |
|||||
Page 9 of 15 |
|||||||||
STERLING BANCORP |
|||||||||
Consolidated Statements of Comprehensive Income |
|||||||||
(Unaudited) |
|||||||||
(in thousands) |
|||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||
2010 |
2009 |
2010 |
2009 |
||||||
Net income |
$ |
2,982 |
$ |
775 |
$ |
5,545 |
$ |
4,387 |
|
Other comprehensive income, net of tax: |
|||||||||
Unrealized holding gains on securities arising during the period |
946 |
1,667 |
2,160 |
1,688 |
|||||
Reclassification adjustment for securities gains included in net income |
(408) |
(478) |
(1,228) |
(2,152) |
|||||
Amortization of: |
|||||||||
Prior service cost |
9 |
9 |
18 |
18 |
|||||
Net actuarial losses |
424 |
518 |
837 |
872 |
|||||
Comprehensive income |
$ |
3,953 |
$ |
2,491 |
$ |
7,332 |
$ |
4,813 |
|
STERLING BANCORP |
|||||||||
Consolidated Statements of Changes in Shareholders' Equity |
|||||||||
(Unaudited) |
|||||||||
(in thousands) |
|||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||
2010 |
2009 |
2010 |
2009 |
||||||
Balance, at beginning of period |
$ |
228,164 |
$ |
159,160 |
$ |
161,950 |
$ |
160,480 |
|
Net income for period |
2,982 |
775 |
5,545 |
4,387 |
|||||
Common shares issued |
16 |
0 |
64,881 |
0 |
|||||
Common shares issued under stock incentive plan and related tax benefits |
0 |
0 |
1,477 |
209 |
|||||
Stock option and restricted stock compensation expense |
81 |
33 |
118 |
66 |
|||||
Cash dividends-Common shares |
(2,414) |
(3,438) |
(4,045) |
(6,875) |
|||||
Cash dividends-Preferred shares |
(525) |
(525) |
(1,050) |
(828) |
|||||
Surrender of shares issued under incentive compensation plan |
0 |
0 |
(1,388) |
(144) |
|||||
Change in net unrealized holding gains on securities |
946 |
1,667 |
2,160 |
1,688 |
|||||
Reclassification adjustment for securities gains included in net income |
(408) |
(478) |
(1,228) |
(2,152) |
|||||
Amortization of: |
|||||||||
Prior service cost |
9 |
9 |
18 |
18 |
|||||
Net actuarial losses |
424 |
518 |
837 |
872 |
|||||
Balance, at end of period |
$ |
229,275 |
$ |
157,721 |
$ |
229,275 |
$ |
157,721 |
|
Page 10 of 15 |
|||||||||
STERLING BANCORP |
||||||||||||||||
Average Balance Sheets [1] |
||||||||||||||||
(Unaudited) |
||||||||||||||||
(dollars in thousands) |
||||||||||||||||
Three Months Ended |
||||||||||||||||
June 30, 2010 |
June 30, 2009 |
|||||||||||||||
AVERAGE |
AVERAGE |
AVERAGE |
AVERAGE |
|||||||||||||
BALANCE |
INTEREST |
RATE |
BALANCE |
INTEREST |
RATE |
|||||||||||
Assets |
||||||||||||||||
Interest-bearing deposits with other banks |
$ |
24,506 |
$ |
24 |
0.41 |
% |
$ |
26,498 |
$ |
9 |
0.14 |
% |
||||
Investment securities - available for sale |
472,897 |
3,169 |
2.68 |
341,849 |
3,944 |
4.62 |
||||||||||
Investment securities - held to maturity |
252,550 |
2,987 |
4.73 |
292,956 |
3,476 |
4.75 |
||||||||||
Investment securities - tax exempt [2] |
110,823 |
1,709 |
6.17 |
34,776 |
510 |
5.87 |
||||||||||
Total investment securities |
836,270 |
7,865 |
3.76 |
669,581 |
7,930 |
4.74 |
||||||||||
FRB and FHLB stock [2] |
7,808 |
64 |
3.28 |
9,382 |
178 |
7.57 |
||||||||||
Loans, net of unearned discount [3] |
1,220,250 |
17,121 |
5.87 |
1,204,568 |
18,264 |
6.19 |
||||||||||
Total Interest-Earning Assets [2] |
2,088,834 |
25,074 |
4.91 |
% |
1,910,029 |
26,381 |
5.58 |
% |
||||||||
Cash and due from banks |
36,009 |
29,623 |
||||||||||||||
Allowance for loan losses |
(22,104) |
(17,994) |
||||||||||||||
Goodwill |
22,901 |
22,901 |
||||||||||||||
Other |
132,579 |
115,422 |
||||||||||||||
Total Assets |
$ |
2,258,219 |
$ |
2,059,981 |
||||||||||||
Liabilities and Shareholders' Equity |
||||||||||||||||
Interest-bearing deposits |
||||||||||||||||
Domestic |
||||||||||||||||
Savings |
$ |
18,014 |
3 |
0.07 |
% |
$ |
18,080 |
6 |
0.13 |
% |
||||||
NOW |
203,307 |
106 |
0.21 |
196,441 |
126 |
0.26 |
||||||||||
Money market |
337,185 |
716 |
0.85 |
341,886 |
811 |
0.95 |
||||||||||
Time |
592,665 |
1,635 |
1.11 |
334,680 |
2,047 |
2.45 |
||||||||||
Foreign |
||||||||||||||||
Time |
578 |
2 |
1.08 |
578 |
2 |
1.09 |
||||||||||
Total Interest-Bearing Deposits |
1,151,749 |
2,462 |
0.86 |
891,665 |
2,992 |
1.35 |
||||||||||
Borrowings |
||||||||||||||||
Securities sold u/a/r - customers |
54,829 |
65 |
0.48 |
77,261 |
88 |
0.45 |
||||||||||
Securities sold u/a/r - dealers |
4,243 |
5 |
0.47 |
0 |
0 |
0.00 |
||||||||||
Federal funds purchased |
35,545 |
19 |
0.21 |
12,309 |
7 |
0.22 |
||||||||||
Commercial paper |
13,006 |
9 |
0.31 |
11,101 |
17 |
0.62 |
||||||||||
Short-term borrowings - FRB |
0 |
0 |
0.00 |
202,857 |
126 |
0.25 |
||||||||||
Short-term borrowings - other |
8,700 |
4 |
0.17 |
1,752 |
0 |
0.00 |
||||||||||
Long-term borrowings - FHLB |
124,357 |
849 |
2.74 |
150,000 |
1,134 |
3.03 |
||||||||||
Long-term borrowings - sub debt |
25,774 |
524 |
8.38 |
25,774 |
524 |
8.37 |
||||||||||
Total Borrowings |
266,454 |
1,475 |
2.22 |
481,054 |
1,896 |
1.58 |
||||||||||
Total Interest-Bearing Liabilities |
1,418,203 |
3,937 |
1.11 |
% |
1,372,719 |
4,888 |
1.43 |
% |
||||||||
Noninterest-bearing demand deposits |
466,017 |
417,509 |
||||||||||||||
Other liabilities |
146,897 |
110,846 |
||||||||||||||
Total Liabilities |
2,031,117 |
1,901,074 |
||||||||||||||
Shareholders' equity |
227,102 |
158,907 |
||||||||||||||
Total Liabilities and Shareholders' Equity |
$ |
2,258,219 |
$ |
2,059,981 |
||||||||||||
Net interest income/spread [2] |
21,137 |
3.80 |
% |
21,493 |
4.15 |
% |
||||||||||
Net yield on interest-earning assets [2] |
4.12 |
% |
4.53 |
% |
||||||||||||
Less: Tax-equivalent adjustment |
599 |
179 |
||||||||||||||
Net interest income |
$ |
20,538 |
$ |
21,314 |
||||||||||||
[1] The average balances of assets, liabilities and shareholders' equity are computed on the basis of daily averages. Average rates are |
||||||||||||||||
[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 |
||||||||||||||||
Page 11 of 15 |
||||||||||||||||
STERLING BANCORP |
||||||||||||||||
Average Balance Sheets [1] |
||||||||||||||||
(Unaudited) |
||||||||||||||||
(dollars in thousands) |
||||||||||||||||
Six Months Ended |
||||||||||||||||
June 30, 2010 |
June 30, 2009 |
|||||||||||||||
AVERAGE |
AVERAGE |
AVERAGE |
AVERAGE |
|||||||||||||
BALANCE |
INTEREST |
RATE |
BALANCE |
INTEREST |
RATE |
|||||||||||
Assets |
||||||||||||||||
Interest-bearing deposits with other banks |
$ |
33,884 |
$ |
43 |
0.26 |
% |
$ |
19,278 |
$ |
19 |
0.21 |
% |
||||
Investment securities - available for sale |
383,120 |
5,903 |
3.08 |
379,903 |
9,201 |
4.84 |
||||||||||
Investment securities - held to maturity |
282,209 |
6,702 |
4.75 |
295,245 |
6,999 |
4.74 |
||||||||||
Investment securities - tax exempt [2] |
101,292 |
3,118 |
6.16 |
29,497 |
857 |
5.81 |
||||||||||
Total investment securities |
766,621 |
15,723 |
4.10 |
704,645 |
17,057 |
4.84 |
||||||||||
FRB and FHLB stock [2] |
8,136 |
186 |
4.56 |
9,665 |
198 |
4.10 |
||||||||||
Loans, net of unearned discount [3] |
1,189,844 |
33,632 |
5.98 |
1,182,988 |
35,816 |
6.24 |
||||||||||
Total Interest-Earning Assets [2] |
1,998,485 |
49,584 |
5.12 |
% |
1,916,576 |
53,090 |
5.64 |
% |
||||||||
Cash and due from banks |
35,798 |
31,017 |
||||||||||||||
Allowance for loan losses |
(22,131) |
(17,445) |
||||||||||||||
Goodwill |
22,901 |
22,901 |
||||||||||||||
Other |
129,800 |
114,511 |
||||||||||||||
Total Assets |
$ |
2,164,853 |
$ |
2,067,560 |
||||||||||||
Liabilities and Shareholders' Equity |
||||||||||||||||
Interest-bearing deposits |
||||||||||||||||
Domestic |
||||||||||||||||
Savings |
$ |
18,233 |
6 |
0.07 |
% |
$ |
18,148 |
12 |
0.14 |
% |
||||||
NOW |
226,361 |
331 |
0.29 |
211,650 |
294 |
0.28 |
||||||||||
Money market |
330,857 |
1,453 |
0.89 |
340,020 |
1,762 |
1.04 |
||||||||||
Time |
522,754 |
3,309 |
1.28 |
331,266 |
4,212 |
2.56 |
||||||||||
Foreign |
||||||||||||||||
Time |
579 |
3 |
1.09 |
578 |
3 |
1.09 |
||||||||||
Total Interest-Bearing Deposits |
1,098,784 |
5,102 |
0.94 |
901,662 |
6,283 |
1.41 |
||||||||||
Borrowings |
||||||||||||||||
Securities sold u/a/r - customers |
52,689 |
126 |
0.48 |
75,987 |
203 |
0.54 |
||||||||||
Securities sold u/a/r - dealers |
2,133 |
5 |
0.47 |
0 |
0 |
0.00 |
||||||||||
Federal funds purchased |
23,440 |
23 |
0.20 |
34,783 |
41 |
0.23 |
||||||||||
Commercial paper |
14,696 |
22 |
0.31 |
11,487 |
40 |
0.70 |
||||||||||
Short-term borrowings - FHLB |
0 |
0 |
0.00 |
6,878 |
11 |
0.31 |
||||||||||
Short-term borrowings - FRB |
7,459 |
9 |
0.25 |
172,405 |
225 |
0.26 |
||||||||||
Short-term borrowings - other |
5,484 |
4 |
0.13 |
1,603 |
1 |
0.07 |
||||||||||
Long-term borrowings - FHLB |
127,004 |
1,720 |
2.73 |
150,000 |
2,256 |
3.03 |
||||||||||
Long-term borrowings - sub debt |
25,774 |
1,047 |
8.38 |
25,774 |
1,047 |
8.38 |
||||||||||
Total Borrowings |
258,679 |
2,956 |
2.30 |
478,917 |
3,824 |
1.61 |
||||||||||
Total Interest-Bearing Liabilities |
1,357,463 |
8,058 |
1.20 |
% |
1,380,579 |
10,107 |
1.48 |
% |
||||||||
Noninterest-bearing demand deposits |
467,337 |
416,847 |
||||||||||||||
Other liabilities |
140,723 |
111,910 |
||||||||||||||
Total Liabilities |
1,965,523 |
1,909,336 |
||||||||||||||
Shareholders' equity |
199,330 |
158,224 |
||||||||||||||
Total Liabilities and Shareholders' Equity |
$ |
2,164,853 |
$ |
2,067,560 |
||||||||||||
Net interest income/spread [2] |
41,526 |
3.92 |
% |
42,983 |
4.16 |
% |
||||||||||
Net yield on interest-earning assets [2] |
4.27 |
% |
4.55 |
% |
||||||||||||
Less: Tax-equivalent adjustment |
1,093 |
302 |
||||||||||||||
Net interest income |
$ |
40,433 |
$ |
42,681 |
||||||||||||
[1] The average balances of assets, liabilities and shareholders' equity are computed on the basis of daily averages. Average rates are |
||||||||||||||||
[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 |
||||||||||||||||
Page 12 of 15 |
||||||||||||||||
STERLING BANCORP |
|||||||||
Rate/Volume Analysis [1] |
|||||||||
(Unaudited) |
|||||||||
(in thousands) |
|||||||||
Increase/(Decrease) |
|||||||||
Three Months Ended |
|||||||||
June 30, 2010 |
|||||||||
Volume |
Rate |
Net [2] |
|||||||
INTEREST INCOME |
|||||||||
Interest-bearing deposits with other banks |
$ |
(1) |
$ |
16 |
$ |
15 |
|||
Investment securities - available for sale |
1,208 |
(1,983) |
(775) |
||||||
Investment securities - held to maturity |
(474) |
(15) |
(489) |
||||||
Investment securities - tax exempt |
1,172 |
27 |
1,199 |
||||||
Total investment securities |
1,906 |
(1,971) |
(65) |
||||||
FRB and FHLB stock |
(26) |
(88) |
(114) |
||||||
Loans, net of unearned discounts [3] |
157 |
(1,300) |
(1,143) |
||||||
TOTAL INTEREST INCOME |
$ |
2,036 |
$ |
(3,343) |
$ |
(1,307) |
|||
INTEREST EXPENSE |
|||||||||
Interest-bearing deposits |
|||||||||
Domestic |
|||||||||
Savings |
$ |
0 |
$ |
(3) |
$ |
(3) |
|||
NOW |
4 |
(24) |
(20) |
||||||
Money market |
(11) |
(84) |
(95) |
||||||
Time |
1,067 |
(1,479) |
(412) |
||||||
Foreign |
|||||||||
Time |
0 |
0 |
0 |
||||||
Total interest-bearing deposits |
1,060 |
(1,590) |
(530) |
||||||
Borrowings |
|||||||||
Securities sold under agreements to repurchase - customers |
(28) |
5 |
(23) |
||||||
Securities sold under agreements to repurchase - dealers |
5 |
0 |
5 |
||||||
Federal funds purchased |
12 |
0 |
12 |
||||||
Commercial paper |
3 |
(11) |
(8) |
||||||
Short-term borrowings - FRB |
(126) |
0 |
(126) |
||||||
Short-term borrowings - other |
0 |
4 |
4 |
||||||
Long-term borrowings - FHLB |
(183) |
(102) |
(285) |
||||||
Long-term borrowings - subordinated debentures |
0 |
0 |
0 |
||||||
Total borrowings |
(317) |
(104) |
(421) |
||||||
TOTAL INTEREST EXPENSE |
$ |
743 |
$ |
(1,694) |
$ |
(951) |
|||
NET INTEREST INCOME |
$ |
1,293 |
$ |
(1,649) |
$ |
(356) |
|||
[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 |
|||||||||
[3] Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans |
|||||||||
Page 13 of 15 |
|||||||||
STERLING BANCORP |
|||||||||
Rate/Volume Analysis [1] |
|||||||||
(Unaudited) |
|||||||||
(in thousands) |
|||||||||
Increase/(Decrease) |
|||||||||
Six Months Ended |
|||||||||
June 30, 2010 |
|||||||||
Volume |
Rate |
Net [2] |
|||||||
INTEREST INCOME |
|||||||||
Interest-bearing deposits with other banks |
$ |
18 |
$ |
6 |
$ |
24 |
|||
Investment securities - available for sale |
76 |
(3,374) |
(3,298) |
||||||
Investment securities - held to maturity |
(312) |
15 |
(297) |
||||||
Investment securities - tax exempt |
2,207 |
54 |
2,261 |
||||||
Total investment securities |
1,971 |
(3,305) |
(1,334) |
||||||
FRB and FHLB stock |
(33) |
21 |
(12) |
||||||
Loans, net of unearned discounts [3] |
106 |
(2,290) |
(2,184) |
||||||
TOTAL INTEREST INCOME |
$ |
2,062 |
$ |
(5,568) |
$ |
(3,506) |
|||
INTEREST EXPENSE |
|||||||||
Interest-bearing deposits |
|||||||||
Domestic |
|||||||||
Savings |
$ |
0 |
$ |
(6) |
$ |
(6) |
|||
NOW |
25 |
12 |
37 |
||||||
Money market |
(48) |
(261) |
(309) |
||||||
Time |
1,771 |
(2,674) |
(903) |
||||||
Foreign |
|||||||||
Time |
0 |
0 |
0 |
||||||
Total interest-bearing deposits |
1,748 |
(2,929) |
(1,181) |
||||||
Borrowings |
|||||||||
Securities sold under agreements to repurchase - customers |
(56) |
(21) |
(77) |
||||||
Securities sold under agreements to repurchase - dealers |
5 |
0 |
5 |
||||||
Federal funds purchased |
(13) |
(5) |
(18) |
||||||
Commercial paper |
9 |
(27) |
(18) |
||||||
Short-term borrowings - FHLB |
(11) |
0 |
(11) |
||||||
Short-term borrowings - FRB |
(207) |
(9) |
(216) |
||||||
Short-term borrowings - other |
3 |
0 |
3 |
||||||
Long-term borrowings - FHLB |
(326) |
(210) |
(536) |
||||||
Long-term borrowings - subordinated debentures |
0 |
0 |
0 |
||||||
Total borrowings |
(596) |
(272) |
(868) |
||||||
TOTAL INTEREST EXPENSE |
$ |
1,152 |
$ |
(3,201) |
$ |
(2,049) |
|||
NET INTEREST INCOME |
$ |
910 |
$ |
(2,367) |
$ |
(1,457) |
|||
[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 |
|||||||||
[3] Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans |
|||||||||
Page 14 of 15 |
|||||||||
STERLING BANCORP |
|||||||||
Reconciliation of Tangible Assets and |
|||||||||
Tangible Common Equity |
|||||||||
(Unaudited) |
|||||||||
(dollars in thousands) |
|||||||||
This press release contains certain supplemental financial information, described in the following table, |
|||||||||
June 30, |
|||||||||
2010 |
2009 |
||||||||
Tangible common equity |
|||||||||
Total shareholders' equity |
$ |
229,275 |
$ |
157,721 |
|||||
Less: |
|||||||||
Preferred equity |
40,343 |
39,869 |
|||||||
Goodwill and other intangible assets |
23,314 |
23,864 |
|||||||
Total tangible common equity |
$ |
165,618 |
$ |
93,988 |
|||||
Tangible assets |
|||||||||
Total assets |
$ |
2,284,308 |
$ |
2,127,567 |
|||||
Less: |
|||||||||
Goodwill and other intangible assets |
23,314 |
23,864 |
|||||||
Total tangible assets |
$ |
2,260,994 |
$ |
2,103,703 |
|||||
Tangible common equity ratio |
7.33% |
4.47% |
|||||||
Page 15 of 15 |
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SOURCE Sterling Bancorp
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