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%

Jul 26, 2013, 07:45 ET from Sterling Bancorp

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



RELATED LINKS

http://www.sterlingbancorp.com