Sterling Bancorp Net Income From Recurring Operations Rises 15% To $5.6 Million For The 2013 Second Quarter GAAP NET INCOME IS $4.5 MILLION

RISING LOANS AND DEPOSITS, REVENUE GROWTH AND CONTINUED SOUND ASSET QUALITY REFLECTED IN STRONG QUARTERLY PERFORMANCE

LOANS INCREASE OVER 12%, DEPOSITS GROW 10%

NEW YORK, July 26, 2013 /PRNewswire/ -- 

 




Strong Financial Performance


  • Net income from recurring operations rose 15% to $5.6 million, or $0.18 per diluted share, excluding merger-related expenses.
  • Net income on a GAAP basis was $4.5 million, or $0.15 per diluted share, for second quarter 2013.
  • Net interest margin rose to 4.10%, increasing in comparison to both the 2012 second quarter and the 2013 first quarter.
  • Net interest income increased 7% from a year ago.

Robust Loan and Deposit Growth


  • Loans, net of unearned discount, were $1.8 billion, increasing more than 12%.
  • Total deposits rose to $2.2 billion, an increase of 10%.
  • Demand deposits increased 20% to $940.9 million, representing 42% of total deposits.

Solid Credit Metrics


  • Net charge-offs were 0.32% of loans in portfolio for second quarter 2013.
  • Ratio of nonperforming assets to total assets decreased to 0.24%.
  • Allowance for loan losses as a percentage of portfolio loans was 1.30%.


    Comparisons above are at, or for the periods ended, June 30, 2013 vs. June 30, 2012 unless otherwise stated.

 

Sterling Bancorp (NYSE: STL) today reported on its financial and operating results for the 2013 second quarter, highlighted by growth in loans and deposits, higher revenues, expense discipline and continued sound asset quality.

Net income from recurring operations rose 15% for the 2013 second quarter to $5.6 million, or $0.18 per diluted share.  This figure excludes professional fee expenses related to the planned merger with Provident New York Bancorp of $1.1 million after tax effect.  On a GAAP basis, including the merger-related fee expenses, net income for the 2013 second quarter was $4.5 million, or $0.15 per diluted share.      

For the first six months of 2013, net income from recurring operations rose 15% from the year-ago period, to $10.9 million, or $0.35 per diluted share.  GAAP net income was $9.8 million or $0.32 per diluted share, including the merger-related professional fee expenses.

Selected Financial Highlights



At or For Quarter Ended


6/30/13

6/30/12

EARNINGS HIGHLIGHTS



Net income from recurring operations (in millions) (1)

$5.61

$4.87

Earnings from recurring operations per share (diluted) (1)

$0.18

$0.16

Net interest margin

4.10%

4.04%




BALANCE SHEET HIGHLIGHTS (period end, in millions)


Total investment securities

$675.16

$727.38

Loans, net of unearned discount

$1,791.25

$1,595.87

Demand deposits

$940.88

$786.36

Total deposits

$2,241.38

$2,043.05

Total assets

$2,732.30

$2,551.70




ASSET QUALITY HIGHLIGHTS (period end)



Nonaccrual loans/loans (2)

0.29%

0.35%

Nonperforming assets/assets

0.24%

0.28%

Allowance for loan losses/portfolio loans

1.30%

1.35%




(1)     Excluding merger-related expenses.

(2)     Includes loans held for sale and loans held in portfolio.

 



 

2013 Second Quarter: Business Growth, Rising Operating Earnings

"Sterling Bancorp's solid performance for the 2013 second quarter is clearly reflected in the increase of 19% in pre-tax income from recurring operations. Our progress is also demonstrated by the continued growth of loans and deposits, higher gross revenues, expense discipline and sound asset quality," noted Louis J. Cappelli, Sterling's Chairman and Chief Executive Officer. 

"These results also continued to benefit from our successful asset-liability management strategy, which provided the liquidity to fund a meaningful level of loan growth and led to an expansion of the net interest margin to 4.10% – which increased as compared to both the year-ago second quarter and the first quarter of 2013. We believe Sterling is well positioned for a rising interest rate environment that may result from the market's reaction to anticipated actions by the Federal Reserve Board.  We offer a range of financial products that should experience rising demand in a strengthening economy, and that provide diverse sources of interest income and noninterest income, and we also have an asset-sensitive balance sheet that should benefit from higher interest rates."

Sterling Bancorp-Provident Bancorp Merger

As previously announced on April 4, 2013, Sterling Bancorp and Provident New York Bancorp have entered into a definitive merger agreement in a stock-for-stock transaction.  Following the merger, the resulting holding company and national bank will maintain the Sterling brand name.  The merger is expected to close in the fourth calendar quarter of 2013, subject to approval by the shareholders of both companies, regulatory approval and other customary closing conditions. Sterling Bancorp shareholders will be notified when a special meeting to vote on the merger has been scheduled.   

"Our enthusiasm about the merger with Provident, and the enormous opportunity to create a premier high performing banking institution, grows stronger every day.  Merger integration planning is in process, with the engagement of both the Sterling and Provident teams, to ensure that the transaction is a success from Day 1, and that we deliver the full potential of the merger through revenue growth, expense savings and a high level of customer service.  We will offer a broader range of services to small-to-middle market businesses and consumers in the greater New York metropolitan area and beyond, and are committed to delivering solid value for shareholders," Mr. Cappelli noted.

The merger agreement provides for Sterling and Provident to coordinate with each other regarding the declaration and payment of dividends. Accordingly, Sterling recently announced that its next quarterly cash dividend of $0.09 per common share will be payable on August 15, 2013 to shareholders of record as of August 1, 2013. This payment extends Sterling's history of continuous cash dividends to 271 consecutive quarters or more than 67 years.

Net Interest Income

Net interest income was $24.4 million for second quarter 2013, an increase of 7% from the 2012 period. This growth was primarily driven by higher loan balances due to a continuing strategy of shifting the Company's asset mix toward loans from investment securities, as well as a reduction in cost of funds largely due to disciplined deposit pricing, rising noninterest-bearing demand deposit balances, and a pay-down of higher cost borrowings. Net interest margin increased to 4.10% for the 2013 second quarter, increasing 6 basis points compared to the 2012 second quarter and 8 basis points from the 2013 first quarter.  For the first six months of 2013, net interest income increased more than 7% to $48.5 million.

Noninterest Income

Noninterest income was $9.8 million for the 2013 second quarter, versus $10.5 million a year ago. For the first six months of 2013, noninterest income was $20.5 million, compared to $20.8 million a year ago.  Noninterest income in 2013 benefitted from growth in mortgage banking income.  Accounts receivable management and other related fees and security gains decreased, offsetting this benefit.  

Noninterest Expenses

Noninterest expenses were $25.8 million for second quarter 2013, versus $23.6 million for the same 2012 period. Excluding the merger-related professional fee expenses previously noted, noninterest expenses increased 3% from a year ago, primarily reflecting investments in the growth of Sterling's business along with expenses associated with Universal Mortgage, acquired in the 2012 third quarter.  Noninterest expenses for the first six months of 2013 were $50.6 million, compared to $46.7 million a year earlier, again reflecting merger-related fee expenses, investments in the growth of Sterling's business, and expenses associated with Universal Mortgage. 

Loan, Deposit and Asset Growth

Total loans, net of unearned discount approached $1.8 billion as of June 30, 2013, an increase of 12% from a year earlier.  The ratio of loans to deposits was 80% at June 30, 2013.

Total deposits were more than $2.2 billion at June 30, 2013, increasing approximately 10% from a year earlier. Noninterest-bearing demand deposits represented 42% of total deposits, among the highest ratios of demand to total deposits in the industry.  The growth in demand deposits reflects the Company's emphasis on generating such deposits as part of its customer relationship model.

Total assets increased to over $2.7 billion at June 30, 2013.  Total investment securities decreased by $52.2 million from a year ago, to $675.2 million, reflecting the successful strategy of redeploying assets from investments into loans. 

Asset Quality

Sterling continued to demonstrate sound credit quality metrics during the 2013 second quarter.  Net charge-offs were $1.4 million for the recent quarter, down from $1.7 million for the same 2012 period.  Nonperforming assets were $6.7 million or 0.24% of total assets at June 30, 2013, compared to $7.1 million or 0.28% a year earlier.  The allowance for loan losses as a percentage of portfolio loans was 1.30% at June 30, 2013, compared to 1.35% a year earlier.  The Company's continued sound asset quality is reflected in a provision for loan losses of $1.5 million for second quarter 2013, a decrease from $2.8 million a year ago. 

Capital

The Company's capital base has continued to exceed all regulatory requirements for well-capitalized institutions.  At June 30, 2013, Sterling's Tier 1 risk-based capital ratio was 11.54% (compared to a requirement of 6.00%), total risk-based capital was 12.65% (requirement of 10.00%), and the Tier 1 leverage ratio was 9.36% (requirement of 5.00%).  The tangible common equity ratio was 7.75% at June 30, 2013.

Conference Call

Sterling Bancorp will hold a conference call on Friday, July 26, 2013, at 10:00 a.m. Eastern Time to discuss these financial results.  To access the conference call live, interested parties may dial 800-288-8976 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 Time on July 26, 2013, until 11:59 p.m. Eastern Time on August 9, 2013.  To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 298680.

About Sterling Bancorp

Sterling Bancorp (NYSE: STL) is a New York City-based financial corporation with assets of $2.7 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 provides clients with a full range of depository and cash management services and a broad portfolio of financing solutions—including working capital lines, accounts receivable and inventory financing, factoring, trade financing, payroll funding and processing, equipment financing, commercial and residential mortgages and mortgage warehouse lines of credit.

Forward Looking Statements
Certain statements in this press release, including, but not limited to, statements as to future results of operations, liquidity, interest rate risk, operating expenses, financial position, dividends and other events, plans and objectives for future operations, capital, liquidity, and growth, statements concerning the economic environment, asset quality and future levels of nonaccrual loans, charge-offs and provisions for loan losses, the effect of actions of the Federal Reserve on interest rates, the impact of rising interest rates on our performance and financial condition, the demand for our products in a strengthened economy, our ability to offer a broader range of services to small-to-middle market businesses and consumers in the greater New York metropolitan area and beyond, whether we can continue to shift our asset mix toward loans from investment securities, our ability and Provident's ability to obtain shareholder and regulatory approvals and meet other closing conditions to the merger, 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, 2012.

Additional Information for Stockholders
In connection with the proposed merger with Provident, Provident has filed with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4 that includes a joint proxy statement of Provident and the Company and a prospectus of Provident, as well as other relevant documents concerning the proposed transaction and will file further amendments to certain of these documents.  The Company will mail the joint proxy statement/prospectus to its stockholders.  SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.  Investors and security holders may obtain a free copy of the proxy statement/prospectus (when available) and other filings containing information about Provident and Sterling at the SEC's website at www.sec.gov.  The joint proxy statement/prospectus (when available) and the other filings may also be obtained free of charge at Provident's website at www.providentbanking.com under the tab "Investor Relations," and then under the heading "SEC Filings" or at the Company's website at www.snb.com under the tab "Investor Relations," and then under the heading "SEC Filings."

Provident, the Company and certain of their respective directors and executive officers, under the SEC's rules, may be deemed to be participants in the solicitation of proxies of Provident and the Company's shareholders in connection with the proposed merger.  Information about the directors and executive officers of Provident and their ownership of Provident common stock is set forth in the proxy statement for Provident's 2013 annual meeting of shareholders, as filed with the SEC on Schedule 14A on January 10, 2013. Information about the directors and executive officers of the Company and their ownership of our common stock is set forth in the proxy statement for the Company's 2012 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on April 3, 2012.  Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the joint proxy statement/prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.

 

STERLING BANCORP

Consolidated Financial Highlights

(Unaudited)

(dollars in thousands, except per share data)












Three Months Ended June 30,


Six Months Ended June 30,



2013


2012


2013


2012

BALANCE SHEET HIGHLIGHTS 









Period End Balances









   Investment securities


$675,155


$727,378


$675,155


$727,378

   Loans held for sale


49,188


30,287


49,188


30,287

   Loans held in portfolio, 









      net of unearned discount


1,742,065


1,565,580


1,742,065


1,565,580

   Interest bearing deposits with other banks


81,115


39,517


81,115


39,517

   Total earning assets


2,555,213


2,371,156


2,555,213


2,371,156

   Allowance for loan losses


22,594


21,135


22,594


21,135

   Total assets


2,732,298


2,551,696


2,732,298


2,551,696










   Demand deposits


940,881


786,359


940,881


786,359

   Savings, NOW and money market deposits


802,452


638,870


802,452


638,870

   Time deposits


498,048


617,817


498,048


617,817

   Customer repurchase agreements


40,616


43,199


40,616


43,199

   Advances FHLB/Long-term borrowings


126,366


147,776


126,366


147,776

   Shareholders' equity 


233,480


227,551


233,480


227,551










Average Balances









   Investment securities


$698,035


$803,989


$713,384


$784,373

   Loans held for sale


56,092


31,663


81,338


34,182

   Loans held in portfolio, 









      net of unearned discount


1,679,401


1,483,436


1,647,918


1,444,353

   Interest bearing deposits with other banks


70,885


35,962


80,877


56,530

   Total earning assets


2,512,095


2,363,455


2,531,089


2,327,878

   Total assets


2,695,178


2,533,439


2,714,141


2,496,744










   Demand deposits


874,140


767,170


885,665


763,058

   Savings, NOW and money market deposits


805,411


647,544


782,612


634,535

   Time deposits


528,410


610,651


561,463


599,646

   Customer repurchase agreements


37,121


42,151


34,798


40,962

   Advances FHLB/Long-term borrowings


126,438


147,955


126,614


148,111

   Shareholders' equity  


232,204


225,534


230,733


223,609










ASSET QUALITY HIGHLIGHTS 









Period End









   Net charge-offs


$1,411


$1,698


$2,987


$4,581

   Nonaccrual loans


5,212


5,601


5,212


5,601

   Other real estate owned


1,481


1,547


1,481


1,547

   Nonperforming assets


6,693


7,148


6,693


7,148

   Nonaccrual loans/loans (1)


0.29%


0.35%


0.29%


0.35%

   Nonperforming assets/assets


0.24%


0.28%


0.24%


0.28%

   Allowance for loan losses/loans (2)


1.30%


1.35%


1.30%


1.35%

   Allowance for loan losses/nonaccrual loans


433.50%


377.34%


433.50%


377.34%










CAPITAL RATIOS









Period End









   Tier 1 risk based


11.54%


11.81%


11.54%


11.81%

   Total risk based


12.65%


12.89%


12.65%


12.89%

   Leverage


9.36%


9.58%


9.36%


9.58%

   Equity/ assets


8.55%


8.92%


8.55%


8.92%

   Tangible common equity


7.75%


8.09%


7.75%


8.09%

   Book value per common share


$7.54


$7.36


$7.54


$7.36










Return on average equity


7.81%


8.69%


8.54%


8.52%

Return on average tangible equity


8.70%


9.68%


9.51%


9.50%










(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 7 of 18

 

STERLING BANCORP

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands, except number of shares)
















June 30,







2013


2012

ASSETS









Cash and due from banks





$

43,981

$

44,138

Interest-bearing deposits with other banks






81,115


39,517










Investment securities









    Available for sale (at estimated fair value)






291,561


348,714

    Held to maturity (at amortized cost)






383,594


378,664

            Total investment securities






675,155


727,378










Loans held for sale






49,188


30,287

Loans held in portfolio, net of unearned discounts





1,742,065


1,565,580

Less allowance for loan losses






22,594


21,135

            Loans held in portfolio, net






1,719,471


1,544,445

Federal Reserve Bank and Federal Home Loan Bank stock, at cost




7,690


8,394

Goodwill






22,901


22,901

Premises and equipment, net






22,053


23,174

Other real estate






1,481


1,547

Accrued interest receivable






6,468


8,077

Cash surrender value of  life insurance policies






54,935


54,039

Other assets






47,860


47,799






$

2,732,298

$

2,551,696










LIABILITIES AND SHAREHOLDERS' EQUITY









Deposits









    Demand





$

940,881

$

786,359

    Savings, NOW and money market






802,452


638,870

    Time






498,048


617,817

            Total deposits






2,241,381


2,043,046










Securities sold under agreements to repurchase - customers




40,616


43,199

Commercial paper and other short-term borrowings                 




8,445


17,455

Advances - FHLB






100,592


122,002

Long-term borrowings - subordinated debentures






25,774


25,774

Accrued interest payable






687


754

Accrued expenses and other liabilities






81,323


71,915

            Total liabilities






2,498,818


2,324,145










Shareholders' equity






233,480


227,551






$

2,732,298

$

2,551,696

MEMORANDA









    Available for sale securities - amortized cost





$

287,043

$

347,407

    Held to maturity securities - estimated fair value





385,499


395,298

    Shares outstanding









        Common issued






35,263,768


35,225,110

        Common in treasury






4,309,663


4,307,972




























NOTE: Certain reclassifications have been made to prior period's financial data to conform to current financial statement presentations.


Page 8 of 18

 

STERLING BANCORP

Consolidated Statements of Income

(Unaudited)

(dollars in thousands, except per share data)












Three Months Ended June 30,


Six Months Ended June 30,



2013


2012


2013


2012

INTEREST INCOME









Loans

$

22,600

$

20,044

$

44,842

$

39,730

Investment securities









  Available for sale - taxable


1,577


2,465


3,243


4,636

  Held to maturity - taxable


1,053


1,441


2,184


3,074

  Tax exempt


1,529


1,581


3,073


3,184

FRB and FHLB stock


116


134


177


215

Deposits with other banks


43


18


100


64

            Total interest income


26,918


25,683


53,619


50,903










INTEREST EXPENSE









Savings, NOW and money market deposits


734


658


1,460


1,302

Time deposits


800


1,012


1,710


2,075

Securities sold u/a/r - customers


32


38


61


74

Securities sold u/a/r - dealers


-


15


-


31

Federal funds purchased


3


6


3


7

Commercial paper and other









  short-term borrowings


12


10


25


21

Advances - FHLB


390


518


782


1,037

Long-term subordinated debentures


524


524


1,047


1,047

            Total interest expense


2,495


2,781


5,088


5,594










Net interest income


24,423


22,902


48,531


45,309

Provision for loan losses


1,500


2,750


3,500


5,750

Net interest income after provision for loan losses

22,923


20,152


45,031


39,559










NONINTEREST INCOME









Accounts receivable management/









    factoring commissions and other fees


4,005


5,065


7,480


9,933

Service charges on deposit accounts


1,202


1,407


2,497


2,667

Trade finance income


427


467


857


967

Other customer related service charges and fees


288


256


680


505

Mortgage banking income


3,357


2,393


7,756


4,729

Income from life insurance policies


277


536


746


792

Securities gains


213


329


345


1,208

Loss on sale of OREO


(1)


-


(13)


(66)

Other income


68


22


163


26

            Total noninterest income


9,836


10,475


20,511


20,761










NONINTEREST EXPENSES









Salaries


11,753


11,168


23,766


22,355

Employee benefits


3,750


3,727


7,851


7,451

    Total personnel expense


15,503


14,895


31,617


29,806

Occupancy and equipment expenses, net


3,392


3,402


6,831


6,616

Advertising and marketing


608


775


1,245


1,418

Professional fees


2,874


1,508


4,060


2,411

Communications


493


462


857


932

Deposit insurance


567


540


1,153


1,124

Other expenses


2,369


2,044


4,882


4,363

            Total noninterest expenses


25,806


23,626


50,645


46,670










Income before income taxes


6,953


7,001


14,897


13,650

Provision for income taxes 


2,429


2,128


5,129


4,175

Net income

$

4,524

$

4,873

$

9,768

$

9,475


Page 9 of 18

 

STERLING BANCORP

Consolidated Statements of Income

(Unaudited)

(dollars in thousands, except per share data)












(continued)



























Three Months Ended June 30,


Six Months Ended June 30,



2013


2012


2013


2012

Average number of common shares outstanding









        Basic


30,902,957


30,818,709


30,882,237


30,805,484

        Diluted


30,902,957


30,818,709


30,882,237


30,805,484




























Net income per average common share









        Basic

$

0.15

$

0.16

$

0.32

$

0.31

        Diluted


0.15


0.16


0.32


0.31



















Dividends per common share


0.09


0.09


0.18


0.18










Page 10 of 18

 

STERLING BANCORP

Consolidated Statements of Comprehensive Income 

(Unaudited)      

(dollars in thousands)      





















Three Months Ended June 30,


Six Months Ended June 30,



2013


2012


2013


2012










Net income

$

4,524

$

4,873

$

9,768

$

9,475










Other comprehensive income, net of tax:









     Unrealized holding (losses) gains on









        securities arising during the period


(1,079)


(338)


(222)


2,347










     Reclassification adjustment for securities









        gains included in net income


(118)


(183)


(191)


(671)










    Prior service cost


-


7


5


12

    Net actuarial losses


877


564


1,445


1,017










Comprehensive income

$

4,204

$

4,923

$

10,805

$

12,180




































































































STERLING BANCORP

Consolidated Statements of Changes in Shareholders' Equity

(Unaudited)

(dollars in thousands)












Three Months Ended June 30,


Six Months Ended June 30,



2013


2012


2013


2012

Balance, at beginning of period

$

231,992

$

225,324

$

228,090

$

220,821

Net income for period


4,524


4,873


9,768


9,475

Stock option and restricted stock









   compensation expense


86


86


172


189

Cash dividends - common shares


(2,784)


(2,782)


(5,569)


(5,564)

Surrender of shares issued under









    incentive compensation plan


(18)


-


(18)


(75)

Unrealized holding (losses) gains on 









    securities arising during the period


(1,079)


(338)


(222)


2,347

Reclassification adjustment for securities









    gains included in net income


(118)


(183)


(191)


(671)

Amortization of:









    Prior service cost


-


7


5


12

    Net actuarial losses


877


564


1,445


1,017










Balance, at end of period

$

233,480

$

227,551

$

233,480

$

227,551


Page 11 of 18

 

STERLING BANCORP

Average Balance Sheets   [1]

(Unaudited)

(dollars in thousands)


















Three Months Ended



June 30, 2013



June 30, 2012




Average




Average



Average




Average




Balance


Interest


Rate



Balance


Interest


Rate


Assets















  Interest-bearing deposits with other banks

$

70,885

$

43


0.24

%

$

35,962

$

18


0.20

%
















  Investment Securities















    Available for sale - taxable


299,720


1,577


2.10



398,737


2,465


2.47


    Held to maturity - taxable


247,850


1,053


1.70



249,691


1,441


2.31


    Tax-exempt [2]


150,465


2,352


6.25



155,561


2,431


6.25


      Total investment securities


698,035


4,982


2.86



803,989


6,337


3.15


  FRB and FHLB stock  [2]


7,682


118


6.11



8,405


136


6.46

















  Loans, net of unearned discount  [3]


1,735,493


22,600


5.37



1,515,099


20,044


5.39

















Total Interest-Earning Assets [2]


2,512,095


27,743


4.51

%


2,363,455


26,535


4.52

%
















  Cash and due from banks


42,308







36,644






  Allowance for loan losses


(24,113)







(21,678)






  Goodwill


22,901







22,901






  Other


141,987







132,117






Total Assets

$

2,695,178






$

2,533,439





















Liabilities and Shareholders' Equity















  Interest-bearing deposits















    Domestic















      Savings

$

26,033


1


0.01

%

$

20,812


1


0.02

%

      NOW


221,541


43


0.08



212,453


64


0.12


      Money market


557,837


690


0.50



414,279


593


0.58


      Time


528,410


800


0.61



610,651


1,012


0.67


   Total Interest-Bearing Deposits


1,333,821


1,534


0.46



1,258,195


1,670


0.53


  Borrowings















    Securities sold u/a/r - customers


37,121


32


0.35



42,151


38


0.36


    Securities sold u/a/r - dealers


365


-


0.27



5,604


15


1.04


    Federal funds purchased


4,604


3


0.23



11,592


6


0.20


    Commercial paper and other















      short-term borrowings


14,434


12


0.32



15,306


10


0.29


    Advances - FHLB


100,664


390


1.55



122,181


518


1.70


    Long-term borrowings - sub debt


25,774


524


8.38



25,774


524


8.38


Total Borrowings


182,962


961


2.11



222,608


1,111


2.01

















   Total Interest-Bearing Liabilities


1,516,783


2,495


0.66

%


1,480,803


2,781


0.75

%

Noninterest-bearing demand deposits


874,140







767,170






  Total including noninterest-bearing















   demand deposits


2,390,923


2,495


0.43

%


2,247,973


2,781


0.51

%

Other liabilities


72,051







59,932





















Total Liabilities


2,462,974







2,307,905





















Shareholders' equity


232,204







225,534





















Total Liabilities and Shareholders' Equity

$

2,695,178






$

2,533,439





















Net interest income/spread [2]




25,248


3.85

%




23,754


3.77

%
















Net yield on interest-earning assets [2]






4.10

%






4.04

%
















Less: Tax-equivalent adjustment




825







852



















Net interest income



$

24,423






$

22,902


































[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 12 of 18


 

STERLING BANCORP

Average Balance Sheets  [1]

(Unaudited)

(dollars in thousands)


















Six Months Ended



June 30, 2013



June 30, 2012




Average




Average



Average




Average




Balance


Interest


Rate



Balance


Interest


Rate


Assets















  Interest-bearing deposits with other banks

$

80,877

$

100


0.25

%

$

56,530

$

64


0.23

%
















  Investment Securities















    Available for sale - taxable


311,560


3,243


2.08



362,549


4,636


2.56


    Held to maturity - taxable


250,656


2,184


1.74



265,034


3,074


2.32


    Tax-exempt [2]


151,168


4,728


6.25



156,790


4,898


6.25


      Total investment securities


713,384


10,155


2.85



784,373


12,608


3.22


  FRB and FHLB stock  [2]


7,572


179


4.71



8,440


217


5.13

















  Loans, net of unearned discount  [3]


1,729,256


44,842


5.37



1,478,535


39,730


5.54

















Total Interest-Earning Assets [2]


2,531,089


55,276


4.47

%


2,327,878


52,619


4.59

%
















  Cash and due from banks


42,536







37,125






  Allowance for loan losses


(24,096)







(21,631)






  Goodwill


22,901







22,901






  Other


141,711







130,471






Total Assets

$

2,714,141






$

2,496,744





















Liabilities and Shareholders' Equity















  Interest-bearing deposits















    Domestic















      Savings

$

25,869


2


0.02

%

$

19,889


2


0.02

%

      NOW


221,557


92


0.08



217,081


143


0.13


      Money market


535,186


1,366


0.51



397,565


1,157


0.59


      Time


561,463


1,710


0.61



599,646


2,075


0.70


   Total Interest-Bearing Deposits


1,344,075


3,170


0.48



1,234,181


3,377


0.55


  Borrowings















    Securities sold u/a/r - customers


34,798


61


0.35



40,962


74


0.36


    Securities sold u/a/r - dealers


183


-


0.27



5,302


31


1.16


    Federal funds purchased


2,514


3


0.23



7,032


7


0.19


    Commercial paper and other















      short-term borrowings


15,440


25


0.32



14,943


21


0.29


    Advances - FHLB


100,840


782


1.56



122,337


1,037


1.70


    Long-term borrowings - sub debt


25,774


1,047


8.38



25,774


1,047


8.38


Total Borrowings


179,549


1,918


2.15



216,350


2,217


2.06

















   Total Interest-Bearing Liabilities


1,523,624


5,088


0.67

%


1,450,531


5,594


0.78

%

Noninterest-bearing demand deposits


885,665







763,058






  Total including noninterest-bearing















   demand deposits


2,409,289


5,088


0.44

%


2,213,589


5,594


0.53

%

Other liabilities


74,119







59,546





















Total Liabilities


2,483,408







2,273,135





















Shareholders' equity


230,733







223,609





















Total Liabilities and Shareholders' Equity

$

2,714,141






$

2,496,744





















Net interest income/spread [2]




50,188


3.80

%




47,025


3.81

%
















Net yield on interest-earning assets [2]






4.06

%






4.09

%
















Less: Tax-equivalent adjustment




1,657







1,716



















Net interest income



$

48,531






$

45,309


































[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 18






 

STERLING BANCORP

Rate/Volume Analysis  [1]

(Unaudited)

(dollars in thousands)























Increase/(Decrease)





Three Months Ended





June 30, 2013 to June 30, 2012














Volume


Rate


Net  [2]

INTEREST INCOME









Interest-bearing deposits with other banks



$

20

$

5

$

25










Investment Securities









  Available for sale - taxable




(554)


(334)


(888)

  Held to maturity - taxable




(11)


(377)


(388)

  Tax-exempt 




(79)


-


(79)

      Total investment securities




(644)


(711)


(1,355)










FRB and FHLB stock




(11)


(7)


(18)










Loans, net of unearned discounts [3]




2,640


(84)


2,556

TOTAL INTEREST INCOME



$

2,005

$

(797)

$

1,208



















INTEREST EXPENSE









Interest-bearing deposits









  Domestic









    Savings



$

-

$

-

$

-

    NOW




3


(24)


(21)

    Money market




188


(91)


97

    Time




(127)


(85)


(212)

      Total interest-bearing deposits




64


(200)


(136)










Borrowings









  Securities sold under agreements to repurchase - customers


(5)


(1)


(6)

  Securities sold under agreements to repurchase - dealers


(8)


(7)


(15)

  Federal funds purchased




(4)


1


(3)

  Commercial paper and other short-term borrowings



-


2


2

  Advances - FHLB




(85)


(43)


(128)

  Long-term borrowings - subordinated debentures



-


-


-

      Total borrowings




(102)


(48)


(150)



















TOTAL INTEREST EXPENSE



$

(38)

$

(248)

$

(286)










NET INTEREST INCOME



$

2,043

$

(549)

$

1,494























































[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. 

[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 18

 

STERLING BANCORP

Rate/Volume Analysis  [1]

(Unaudited)

(dollars in thousands)























Increase/(Decrease)





Six Months Ended





June 30, 2013 to June 30, 2012














Volume


Rate


Net  [2]

INTEREST INCOME









Interest-bearing deposits with other banks



$

30

$

6

$

36










Investment Securities









  Available for sale - taxable




(610)


(783)


(1,393)

  Held to maturity - taxable




(172)


(718)


(890)

  Tax-exempt 




(170)


-


(170)

      Total investment securities




(952)


(1,501)


(2,453)










FRB and FHLB stock




(21)


(17)


(38)










Loans, net of unearned discounts [3]




6,405


(1,293)


5,112

TOTAL INTEREST INCOME



$

5,462

$

(2,805)

$

2,657



















INTEREST EXPENSE









Interest-bearing deposits









  Domestic









    Savings



$

-

$

-

$

-

    NOW




2


(53)


(51)

    Money market




375


(166)


209

    Time




(128)


(237)


(365)

      Total interest-bearing deposits




249


(456)


(207)










Borrowings









  Securities sold under agreements to repurchase - customers


(11)


(2)


(13)

  Securities sold under agreements to repurchase - dealers


(17)


(14)


(31)

  Federal funds purchased




(5)


1


(4)

  Commercial paper and other short-term borrowings



1


3


4

  Advances - FHLB




(175)


(80)


(255)

  Long-term borrowings - subordinated debentures



-


-


-

      Total borrowings




(207)


(92)


(299)



















TOTAL INTEREST EXPENSE



$

42

$

(548)

$

(506)



















NET INTEREST INCOME



$

5,420

$

(2,257)

$

3,163














































[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 effect

     of the extra day in 2012 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 18

 

STERLING BANCORP

Reconciliation of  Tangible Common Equity, Average Tangible Equity and Tangible Assets 

(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"). Management believes

that these non-GAAP financial measures provide useful supplemental information to both management and investors 

in evaluating Sterling's capital position. Tangible common equity represents shareholders' equity less preferred equity 

(if any), goodwill and other intangibles.  Tangible assets are equal to total assets less goodwill and other intangibles. 

Tangible common equity ratio is calculated by dividing tangible common equity by tangible assets. Average tangible

equity represents average shareholders' equity less average goodwill and other intangible assets.  Return on average

tangible equity is calculated by dividing net income (annualized) by average tangible 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 financial 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.



























June 30, 







2013


2012

Tangible common equity


















   Total shareholders' equity





$

233,480

$

227,551

   Less: Goodwill and other intangible assets






23,638


22,975

   Total tangible common equity





$

209,842

$

204,576










Tangible assets


















   Total assets





$

2,732,298

$

2,551,696

   Less: Goodwill and other intangible assets






23,638


22,975

   Total tangible assets





$

2,708,660

$

2,528,721










Tangible common equity ratio 






7.75%


8.09%







































Three Months Ended June 30, 


Six Months Ended June 30,



2013


2012


2013


2012

Average tangible equity


















   Average shareholders' equity

$

232,204

$

225,534

$

230,733

$

223,609

   Less:









    Average goodwill and other intangible assets


23,647


22,975


23,656


22,975

   Average tangible equity

$

208,557

$

202,559

$

207,077

$

200,634




























Return on average tangible equity


















  Net income (annualized)/average tangible equity

8.70%


9.68%


9.51%


9.50%


Page 16 of 18

 

STERLING BANCORP

Reconciliation of Income Before Income Taxes, Net 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"). Management believes 

that these non-GAAP financial measures provide useful supplemental information to both management and investors 

in evaluating Sterling's noninterest expenses, income before income taxes and net income. Income from recurring 

operations before income taxes represents income before taxes and merger related professional fees. Net income 

from recurring operations represents income from recurring operations before income taxes reduced by the amount of 

income taxes attributable to merger related professional fees. Noninterest expense from recurring operations represents 

noninterest expenses before the impact of merger related professional fees. 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 financial 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 June 30, 


Six Months Ended June 30, 



2013


2012


2013


2012










Income before income taxes

$

6,953

$

7,001

$

14,897

$

13,650

Merger related professional fees


1,400


-


1,400


-

Income from recurring operations before









  income taxes

$

8,353

$

7,001

$

16,297

$

13,650





































Net income

$

4,524

$

4,873

$

9,768

$

9,475

Merger related professional fees,









  net of income tax


1,089


-


1,089


-










Net income from recurring operations

$

5,613

$

4,873

$

10,857

$

9,475





































Noninterest expense

$

25,806

$

23,626

$

50,645

$

46,670

Merger related professional fees


(1,400)


-


(1,400)


-










Noninterest expense from recurring operations 

$

24,406

$

23,626

$

49,245

$

46,670


Page 17 of 18

 

STERLING BANCORP

Reconciliation of Net Income Per Average Common Share 

(Unaudited)



















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"). Management believes 

that these non-GAAP financial measures provide useful supplemental information to both management and investors 

in evaluating Sterling's net income per average common share. Net income from recurring operations per average 

common share is calculated by dividing net income from recurring operations by the average number of common 

shares outstanding. 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 financial 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 June 30,


Six Months Ended June 30,



2013


2012


2013


2012

Average number of common shares outstanding









        Basic


30,902,957


30,818,709


30,882,237


30,805,484

        Diluted


30,902,957


30,818,709


30,882,237


30,805,484




























Net income per average common share









        Basic

$

0.15

$

0.16

$

0.32

$

0.31

        Diluted


0.15


0.16


0.32


0.31





































Net income from recurring operations









    per average common share









        Basic

$

0.18

$

0.16

$

0.35

$

0.31

        Diluted


0.18


0.16


0.35


0.31


Page 18 of 18

 

 

SOURCE Sterling Bancorp



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