Sterling Bancorp Reports Net Income Of $5.2 Million, Or $0.17 Per Diluted Share, For The 2013 First Quarter

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

Strong Financial Performance

• Net income was $5.2 million or $0.17 per diluted share for first quarter 2013, up from $4.6 million or $0.15 per diluted share a year earlier.
• Net interest income increased 8% from a year ago; net interest margin was 4.02% for 2013 first quarter.
• Gross revenues were $37.4 million for first quarter 2013, an increase of 5% over the same 2012 period.

Robust Loan and Deposit Growth

• Loans, net of unearned discount, were $1.8 billion, increasing 19%.
• Total deposits increased 15% to $2.3 billion.
• Demand deposits of $897.1 million represented 39% of total deposits.

Solid Credit Metrics

• Net charge-offs were 0.38% of loans in portfolio for first quarter 2013.
• Ratio of nonperforming assets to total assets decreased to 0.26%.
• Allowance for loan losses as a percentage of loans held in portfolio was 1.34%.

Comparisons above are at, or for the periods ended, March 31, 2013 vs. March 31, 2012 unless otherwise stated.

Sterling Bancorp (NYSE: STL) today reported on its financial and operating performance for the first quarter of 2013, highlighted by growth in loans and deposits, higher gross revenues and a continued focus on asset quality.

Net income rose to $5.2 million for the 2013 first quarter, an increase of 14% from $4.6 million in the same period of 2012. Diluted earnings per common share were $0.17 for the 2013 first quarter, up from $0.15 a year earlier.

Selected Financial Highlights

2013 First Quarter Results Reflect Profitable Growth

"Sterling Bancorp continued its strong growth momentum and solid earnings performance in the 2013 first quarter," noted Louis J. Cappelli, Sterling's Chairman and Chief Executive Officer.  "Our well-established focus on providing individualized financial solutions and superior service to clients in the dynamic New York metropolitan area marketplace and beyond once again propelled double-digit growth in loans and deposits.  At the same time, the Company's strategic management of assets and liabilities, control of expenses and stringent focus on asset quality produced an increase of more than 19% in pre-tax income."

Mr. Cappelli added, "Our team is sharply focused on delivering profitable growth, expanding the business, providing exceptional service to customers, and continuing to produce solid value for shareholders."

As previously announced on April 4, 2013, Sterling Bancorp and Provident New York Bancorp (NYSE: PBNY) have entered into a definitive merger agreement in a stock-for-stock transaction in which Sterling Bancorp shareholders will receive a fixed ratio of 1.2625 shares of Provident New York Bancorp common stock for each share of Sterling Bancorp common stock. Upon closing, Provident Bank will convert to a national bank charter and adopt the Sterling name, as will the holding company.  The transaction is subject to approval by the shareholders of both companies, regulatory approval and other customary closing conditions.  Subject to such conditions, the Company anticipates that the merger will close in the fourth calendar quarter of 2013.

Net Interest Income

Sterling's net interest income was $24.1 million for first quarter 2013, an increase of 8% from the 2012 period.  This primarily reflected higher loan balances due to a continuing strategy of shifting the Company's asset mix toward loans from investment securities, a reduction in cost of funds largely due to disciplined deposit pricing, rising noninterest-bearing demand deposit balances, and lower borrowings.

Noninterest Income

Noninterest income, excluding security gains, rose more than 12% comparing the first quarter of 2013 and 2012. This growth was primarily due to an 88% increase in mortgage banking income versus the prior year.  The rising mortgage volume reflected a strong performance by Sterling's original mortgage banking operations, as well as its August 2012 acquisition of Universal Mortgage, which positioned the Company for the rebound in the residential mortgage market.  Total noninterest income for first quarter 2013 was $10.7 million, up 4% from a year ago.  This reflected the higher mortgage banking income, as noted above, partially offset by a decrease in security gains and lower accounts receivable management and other related fees.  Noninterest income has consistently been an important contributor to Sterling's financial performance and represented 29% of gross revenues for the 2013 first quarter.  

Noninterest Expenses         

Noninterest expenses were $24.8 million for first quarter 2013, versus $23.0 million for the same 2012 period.  Noninterest expenses were essentially unchanged comparing the 2013 first quarter to the 2012 fourth quarter.  The increase from the year-ago first quarter primarily reflected higher personnel expenses due to investments in the growth in Sterling's business, as well as expenses associated with Universal Mortgage, acquired in the 2012 third quarter. 

Loan, Deposit and Asset Growth

Total loans, net of unearned discount were $1.8 billion as of March 31, 2013, an increase of approximately 19% from a year earlier.  The ratio of loans to deposits was 77% at March 31, 2013.

Total deposits were $2.3 billion at March 31, 2013, increasing 15% from a year earlier. Noninterest-bearing demand deposits represented over 39% 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 $2.8 billion and earning assets were $2.6 billion at March 31, 2013.  Total investment securities decreased by $137.3 million from a year ago, to $665.1 million, reflecting the successful strategy of redeploying assets from investments into loans. 

Asset Quality

Sterling continued to exhibit sound credit quality metrics during the 2013 first quarter.  Net charge-offs were $1.6 million for the recent quarter, compared to $2.9 million for the same 2012 period.  The allowance for loan losses as a percentage of nonaccrual loans was 431% at March 31, 2013, versus 314% a year earlier. Nonperforming assets were $7.1 million or 0.26% of total assets at March 31, 2013, compared to $8.0 million or 0.32% a year earlier.  The allowance for loan losses as a percentage of portfolio loans was 1.34% at March 31, 2013, compared to 1.38% a year earlier.  The provision for loan losses was $2.0 million for the first quarter 2013, compared with $3.0 million for the year-ago period. 

Capital

The Company's capital base has continued to exceed all regulatory requirements for well-capitalized institutions.  At March 31, 2013, Sterling's Tier 1 risk-based capital ratio was 11.68% (compared to a requirement of 6.00%), total risk-based capital was 12.81% (requirement of 10.00%), and the Tier 1 leverage ratio was 9.16% (requirement of 5.00%).  The tangible common equity ratio was 7.58% at March 31, 2013.

Conference Call

Sterling Bancorp will hold a conference call on Friday, April 26, 2013, at 10:00 a.m. Eastern Time to discuss these financial results.  To access the conference call live, interested parties may dial 800-288-8967 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 April 26, 2013, until 11:59 p.m. Eastern Time on May 10, 2013.  To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 291380.

About Sterling Bancorp

Sterling Bancorp (NYSE: STL) is a New York City-based financial corporation with assets of $2.8 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, our ability to continue to provide individualized financial solutions and superior service to clients in the New York metropolitan area marketplace and beyond, strategically manage assets and liabilities, control expenses and focus on asset quality, our ability to deliver profitable growth, expand the business, provide exceptional service to customers, and produce solid value for shareholders, 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 will file with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4 that will include a joint proxy statement of Provident and the Company and a prospectus of Provident, as well as other relevant documents concerning the proposed transaction.  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.

SOURCE Sterling Bancorp