STERLING BANCORP 
By 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
