John Tietjen	Edward Nebb
Chief Financial Officer	Investor Relations
Sterling Bancorp	Comm-Counsellors, LLC
john.tietjen@sterlingbancorp.com	enebb@optonline.net
212.757.8035	203.972.8350

 

Sterling Bancorp Reports SIGNIFICANT INCREASE IN NET INCOME AVAILABLE TO COMMON SHAREHOLDERS FOR 2011 THIRD Quarter, TO $4.4 MILLION, OR $0.14 PER DILUTED SHARE

 

LOANS, DEPOSITS AND TOTAL ASSETS SET RECORDS,

CONTINUE DOUBLE-DIGIT GROWTH

 

 

Highlights*:
	•	Net income available to common shareholders rose 74% as compared to the 2011 second quarter, to $4.4 million. This growth was driven by higher revenues, an unchanged provision for loan losses, and the elimination of dividends and accretion on preferred shares.
	•	Net interest income, on a tax equivalent basis, was $22.7 million, increasing 5%.
	•	Noninterest income totaled $11.5 million, representing 31% of total revenue in the 2011 third quarter.
	•	Noninterest expenses were essentially unchanged from the year-ago level.
	•	Total loans in portfolio set a record, approaching $1.5 billion, an increase of 13%.
	•	Total deposits exceeded $2.0 billion, an increase of 24%.
	•	Noninterest-bearing demand deposits were $594.3 million, up 10%.
	•	Total assets set a record, approaching $2.7 billion, an increase of over 15%.
	•	The tangible common equity ratio was 7.43%, up from 7.05%.
	•	The ratio of nonperforming assets to total assets continued to improve to 0.28%.
		*   Third quarter 2011 as compared to third quarter 2010 unless otherwise noted.

 

Page 1 of 16

 

 

 

New York, N.Y., October 20, 2011 — Sterling Bancorp (NYSE: STL), a financial holding company headquartered in New York City and the parent company of Sterling National Bank, today reported a significant increase in earnings for the quarter ended September 30, 2011, and also noted that loans, deposits and total assets reached record levels.

 

Net income available to common shareholders was $4.4 million for the 2011 third quarter, rising 74% on a sequential basis from $2.5 million for the 2011 second quarter. Net income available to common shareholders per diluted share rose sequentially to $0.14 for the 2011 third quarter, from $0.08 per diluted share in the 2011 second quarter.

 

Management Perspective

 

“Sterling has continued on a strong and well-defined growth trajectory throughout the first nine months of this year, which is reflected in our sharp rise in profitability and record loan balances, deposits and total assets for the 2011 third quarter,” said Louis J. Cappelli, Sterling’s Chairman and Chief Executive Officer. “Our 74% increase in net income available to common shareholders compared to the 2011 second quarter reflects positive trends in net interest income and noninterest income, as well as firm control of noninterest expenses.”

 

Mr. Cappelli added, “We have continued to do our part to move the economy forward by providing credit for the small and mid-sized businesses that are the primary engines of economic growth. This resulted in a 13% increase in our loan portfolio for the third quarter, representing an accelerated pace of loan growth compared to the strong levels we achieved during the first two quarters of this year.”

 

“Looking ahead, we will maintain our efforts to capitalize on the opportunities in the New York metropolitan area and beyond. We will continue to focus on providing exceptional service and individualized solutions to small-to-midsized businesses and individuals. We will continue working to enhance our revenue base and market share by expanding our relationships with new and existing customers. And we will employ our strong balance sheet and liquidity to support profitable growth and long-term shareholder value,” Mr. Cappelli concluded.

 

Third Quarter 2011 Financial Results

 

Net income available to common shareholders for the third quarter of 2011 was $4.4 million, or $0.14 per diluted share. In the third quarter of 2010, the Company reported a net loss available to common shareholders of $3.3 million, or $0.12 per diluted share, largely due to its decision to accelerate the resolution of certain nonaccrual loans, resulting in an additional provision for loan losses in that period. The significant increase in net income available to common shareholders as compared to the year-ago period reflected higher net interest income and effective management of noninterest expenses, coupled with the substantially lower provision for loan losses. Per share results in the 2011 third quarter reflected the impact of an additional 4.1 million average common shares outstanding, due to Sterling’s March 2011 common share offering. The proceeds of the offering provided additional capital to respond to loan demand, with the effect of the higher share count being partially offset by the resulting growth in earnings.

 

Page 2 of 16

 

Net interest income, on a tax-equivalent basis, was $22.7 million for the 2011 third quarter, compared to $21.6 million for the 2010 third quarter. This primarily reflected the benefit of higher average loan and investment securities balances and reduced funding costs, partially offset by the impact of lower yields on loans and securities and higher interest-bearing deposit balances. Net interest margin was 3.81% for the 2011 third quarter, compared to 4.11% for the 2010 third quarter, on a tax-equivalent basis, due in part to the strategy of maintaining liquidity for future loan demand by investing in short-term investment securities and interest-bearing bank deposits.

 

“Sterling has maintained and strengthened our liquidity position, which we have temporarily deployed in a manner that will enable us to access these funds as needed to support anticipated future loan growth. We have accomplished this through positions in short-term investment securities and interest-bearing bank deposits that have the near-term effect of reducing the net interest margin due to the lower yields on these types of investments. Our strategy is to redeploy these funds in loans, with a resulting improvement in yields,” noted Mr. Cappelli.

 

The provision for loan losses decreased to $3.0 million for the 2011 third quarter, from $14.0 million for the 2010 third quarter, reflecting the Company’s improved asset quality.

 

Total noninterest income was $11.5 million for the 2011 third quarter, compared to $13.1 million in the same period of 2010. This primarily reflected higher accounts receivable management and factoring fees, more than offset by lower residential mortgage banking income, service charges and securities gains.

 

Noninterest expenses were $23.8 million for the 2011 third quarter, virtually unchanged from a year ago. The trend reflected an increase in compensation expenses primarily due to the growth in Sterling’s business and ongoing business development efforts, as well as higher professional fees, offset by decreases in occupancy and equipment costs and deposit insurance premiums.

 

Nine Months 2011 Financial Results

 

Net income available to common shareholders for the first nine months of 2011 was $10.2 million, or $0.35 per diluted share, compared to $0.9 million, or $0.04 per diluted share, for the same period of 2010. Results for the 2011 period included a charge for accelerated accretion of $1.2 million due to the redemption of all issued and outstanding Series A preferred shares and repurchase of the related warrant to purchase common shares in each case issued under the TARP Capital Purchase Program. Results for the 2010 period included the additional provision for loan losses noted earlier. Per share results in the 2011 period also reflected the impact of an additional 5.7 million average common shares outstanding, largely due to Sterling’s March 2011 common share offering.

 

Page 3 of 16

 

 

 

Net interest income, on a tax-equivalent basis, was $64.8 million for the first nine months of 2011, up $1.7 million from the same 2010 period. The comparison reflected the benefit of higher average loan and investment securities balances and reduced funding costs, partially offset by the impact of lower yields on loans and securities and higher interest-bearing deposit balances. Net interest margin was 3.90% for the first nine months of 2011, on a tax-equivalent basis, compared to 4.26% for the same period of 2010, due in part to the practice of maintaining liquidity for future loan demand by investing in short-term investment securities and interest-bearing bank deposits, as noted earlier.

 

The provision for loan losses decreased to $9.0 million for the first nine months of 2011, compared to $25.5 million a year earlier, reflecting the Company’s improved asset quality.

 

Total noninterest income was $33.8 million for the first nine months of 2011, compared to $35.5 million a year earlier. This primarily reflected higher accounts receivable management, factoring and trade finance fees, more than offset by lower residential mortgage banking income, service charges and securities gains.

 

Noninterest expenses were $69.7 million for the first nine months of 2011, compared to $67.2 million in the 2010 period, primarily due to additional compensation expenses and occupancy costs related to the growth in Sterling’s business, partially offset by lower deposit insurance premiums, advertising and marketing expenses, and professional fees.

 

Loans, Deposits and Total Assets

 

Total loans held in portfolio approached a record $1.5 billion at September 30, 2011, rising 13% from a year earlier. The Company continues to have a robust loan pipeline. The ratio of portfolio loans to deposits was approximately 71.5% at September 30, 2011.

 

Total deposits were a record $2.0 billion at September 30, 2011, up 24% from $1.6 billion a year earlier. Noninterest-bearing demand deposits totaled $594.3 million at September 30, 2011, a 10% increase from a year ago, and represented 29% of total deposits, among the highest ratios of demand to total deposits in the industry.

 

Total assets approached a record $2.7 billion at September 30, 2011, an increase of more than 15% from approximately $2.3 billion a year ago.

 

Asset Quality

 

Sterling continued to exhibit strong credit quality during the 2011 third quarter. As noted previously, the provision for loan losses declined to $3.0 million for the 2011 third quarter, compared to $14.0 million a year earlier. Net charge-offs declined to $2.0 million for the 2011 third quarter, from $15.9 million for the year-ago period. Nonperforming assets were 0.28% of total assets at September 30, 2011, compared to 0.30% a year ago. The allowance for loan losses as a percentage of nonaccrual loans was 347% at September 30, 2011, improved from 290% a year earlier. Results for the 2010 period largely reflected an additional provision for loan losses due to the Company’s decision to accelerate the resolution of certain nonaccrual loans, as noted earlier.

 

Page 4 of 16

 

Capital

 

Sterling’s capital base has continued to exceed all regulatory requirements for well-capitalized institutions. At September 30, 2011, Sterling’s Tier 1 risk-based capital ratio was 12.14% (compared to a requirement of 6.00%), total risk-based capital was 13.18% (requirement of 10.00%), and the Tier 1 leverage ratio was 9.08% (requirement of 5.00%).

 

The tangible common equity ratio rose to 7.43% at September 30, 2011 from 7.05% a year ago.

 

Conference Call

 

Sterling Bancorp will host a teleconference call for the financial community on October 20, 2011, at 10:00 a.m. Eastern Time to discuss the third quarter 2011 financial results. To access the conference call live, interested parties may dial 800-398-9367 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 October 20, 2011, until 11:59 p.m. Eastern Time on November 3, 2011. To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 220223.

 

About Sterling Bancorp

 

Sterling Bancorp (NYSE: STL) is a New York City-based financial corporation with assets exceeding $2.6 billion. Since 1929, Sterling National Bank, the company’s principal banking subsidiary, has successfully served the needs of businesses, professionals and individuals in the New York metropolitan area and beyond. Sterling is well-known for its high-touch, hands-on approach to customer service and a special focus on serving the business community.

 

Sterling offers clients a full range of depository and cash management services plus a broad portfolio of financing solutions – including working capital lines, accounts receivable and inventory financing, factoring, trade financing, payroll funding and processing, equipment financing, commercial and residential mortgages and mortgage warehouse lines of credit.

 

Page 5 of 16

 

 

 

Certain statements in this press release, including but not limited to, statements as to future events, future liquidity, future interest rate risk and operating expenses, statements concerning future results of operations, financial position or dividends, and plans and objectives for future operations, future capital, future liquidity and future growth, statements concerning the economic environment, asset quality and future levels of nonaccrual loans, charge-offs and provisions for loan losses, and the Company’s ability to provide exceptional service and individualized solutions to small-to-midsized businesses and individuals, to enhance its revenue base and market share by expanding its relationships with new and existing customers, to employ its balance sheet and liquidity to support profitable growth and long-term shareholder value, and to redeploy funds invested in lower-yielding instruments to higher-yielding loans, 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, 2010.

 

# # #

 

 

Page 6 of 16

 

STERLING BANCORP

Consolidated Financial Highlights

(Unaudited)

(dollars in thousands, except per share data)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2011				2010				2011				2010
BALANCE SHEET HIGHLIGHTS
Period End Balances
Investment securities		$	777,812			$	764,461			$	777,812			$	764,461
Loans held for sale			22,874				34,046				22,874				34,046
Loans held in portfolio,
net of unearned discounts			1,463,171				1,296,166				1,463,171				1,296,166
Federal Reserve Bank and Federal Home Loan
Bank stock, at cost			8,502				9,381				8,502				9,381
Total earning assets			2,458,991				2,123,354				2,458,991				2,123,354
Allowance for loan losses			19,547				18,152				19,547				18,152
Total assets			2,656,975				2,303,477				2,656,975				2,303,477
Demand deposits			594,250				539,633				594,250				539,633
Savings, NOW and money market deposits			607,049				555,262				607,049				555,262
Time deposits			846,496				550,718				846,496				550,718
Customer repurchase agreements			43,503				21,084				43,503				21,084
Other short-term borrowings			22,726				82,466				22,726				82,466
Advances FHLB/Long-term borrowings			148,869				170,302				148,869				170,302
Shareholders' equity			218,685				224,378				218,685				224,378
Average Balances
Investment securities		$	867,225			$	783,868			$	865,132			$	772,434
Loans held for sale			28,344				43,351				25,881				32,018
Loans held in portfolio,
net of unearned discounts			1,425,685				1,271,495				1,319,054				1,199,952
Federal Reserve Bank and Federal Home Loan
Bank stock			8,714				8,810				8,862				8,363
Total earning assets			2,396,929				2,121,704				2,271,999				2,040,010
Total assets			2,596,845				2,294,204				2,464,512				2,208,435
Demand deposits			582,042				478,474				558,059				471,081
Savings, NOW and money market deposits			618,840				544,900				590,722				565,155
Time deposits			798,705				580,445				708,919				542,579
Customer repurchase agreements			40,340				41,880				42,096				49,046
Other short-term borrowings			37,630				117,289				38,413				74,806
Advances FHLB/Long-term borrowings			153,556				157,597				157,590				154,402
Shareholders' equity			219,470				228,776				226,873				209,253
ASSET QUALITY HIGHLIGHTS
Period End
Net charge-offs		$	1,967			$	15,861			$	7,665			$	26,682
Nonaccrual loans			5,627				6,270				5,627				6,270
Other real estate owned			1,929				744				1,929				744
Nonperforming assets			7,556				7,014				7,556				7,014
Nonaccrual loans/loans (1)			0.38	%			0.47	%			0.38	%			0.47	%
Nonperforming assets/assets			0.28	%			0.30	%			0.28	%			0.30	%
Allowance for loan losses/loans (2)			1.34	%			1.40	%			1.34	%			1.40	%
Allowance for loan losses/nonaccrual loans			347.38	%			289.51	%			347.38	%			289.51	%
CAPITAL RATIOS
Period End
Tier 1 risk-based			12.14	%			13.63	%			12.14	%			13.63	%
Total risk-based			13.18	%			14.70	%			13.18	%			14.70	%
Leverage			9.08	%			10.35	%			9.08	%			10.35	%
Tangible common equity			7.43	%			7.05	%			7.43	%			7.05	%
Book value per common share		$	7.07			$	6.85			$	7.07			$	6.85

 

(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 16

 

STERLING BANCORP

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands, except number of shares)

 

		September 30,
		2011				2010
ASSETS
Cash and due from banks		$	32,418			$	36,745
Interest-bearing deposits with other banks			186,632				19,300
Investment securities
Available for sale (at estimated fair value)			324,087				421,984
Held to maturity (at amortized cost)			453,725				342,477
Total investment securities			777,812				764,461
Loans held for sale			22,874				34,046
Loans held in portfolio, net of unearned discounts			1,463,171				1,296,166
Less allowance for loan losses			19,547				18,152
Loans held in portfolio, net			1,443,624				1,278,014
Federal Reserve Bank and Federal Home Loan Bank stock, at cost			8,502				9,381
Customers' liability under acceptances			122				313
Goodwill			22,901				22,901
Premises and equipment, net			24,163				15,725
Other real estate			1,929				744
Accrued interest receivable			8,640				9,216
Cash surrender value of  life insurance policies			53,000				50,877
Other assets			74,358				61,754
		$	2,656,975			$	2,303,477
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Demand		$	594,250			$	539,633
Savings, NOW and money market			607,049				555,262
Time			846,496				550,718
Total deposits			2,047,795				1,645,613
Securities sold under agreements to repurchase - customers			43,503				21,084
Securities sold under agreements to repurchase - dealers			5,000				5,000
Short-term borrowings - other			17,726				77,466
Advances - FHLB			123,095				144,528
Long-term borrowings - subordinated debentures			25,774				25,774
Acceptances outstanding			122				313
Accrued interest payable			1,081				1,639
Due to factored clients			94,141				92,854
Accrued expenses and other liabilities			80,053				64,828
Total liabilities			2,438,290				2,079,099
Shareholders' equity			218,685				224,378
		$	2,656,975			$	2,303,477
MEMORANDA
Available for sale securities - amortized cost		$	327,981			$	418,452
Held to maturity securities - estimated fair value			468,614				355,462
Shares outstanding
Common issued			35,225,110				31,138,545
Common in treasury			4,300,278				4,297,782

 

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

 

Page 8 of 16

 

STERLING BANCORP

Consolidated Statements of Operations

(Unaudited)

(dollars in thousands, except per share data)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2011				2010				2011				2010
INTEREST INCOME
Loans		$	19,121			$	18,275			$	53,776			$	51,907
Investment securities - available for sale			2,597				2,985				7,704				9,315
Investment securities - held to maturity			3,351				3,320				10,230				11,622
FRB and FHLB stock			75				112				241				296
Deposits with other banks			35				10				92				53
Total interest income			25,179				24,702				72,043				73,193
INTEREST EXPENSE
Savings, NOW and money market deposits			752				746				2,152				2,536
Time deposits			1,470				1,545				4,212				4,857
Securities sold u/a/r - customers			45				49				145				175
Securities sold u/a/r - dealers			16				23				49				28
Short-term borrowings - other			18				70				50				128
Advances - FHLB			483				871				1,647				2,591
Long-term subordinated debentures			523				523				1,570				1,570
Total interest expense			3,307				3,827				9,825				11,885
Net interest income			21,872				20,875				62,218				61,308
Provision for loan losses			3,000				14,000				9,000				25,500
Net interest income after provision for loan losses			18,872				6,875				53,218				35,808
NONINTEREST INCOME
Accounts receivable management/    factoring commissions and other fees			6,574				6,454				18,041				17,527
Service charges on deposit accounts			1,445				1,606				4,248				4,627
Trade finance income			607				657				1,735				1,650
Other customer related service charges and fees			287				298				708				665
Mortgage banking income			1,493				2,458				5,268				5,631
Income from life insurance policies			288				290				860				850
Securities gains			420				1,171				1,529				3,419
(Loss) Gain on sale of OREO			(5	)			(11	)			0				17
Other income			350				135				1,380				1,135
Total noninterest income			11,459				13,058				33,769				35,521
NONINTEREST EXPENSES
Salaries			11,037				10,689				32,708				30,809
Employee benefits			3,396				2,834				10,450				9,537
Total personnel expense			14,433				13,523				43,158				40,346
Occupancy and equipment expenses, net			3,069				3,375				9,857				8,967
Advertising and marketing			781				816				2,079				2,500
Professional fees			1,741				1,540				3,448				3,913
Communications			430				392				1,314				1,302
Deposit insurance			374				1,033				2,204				2,557
Other expenses			2,942				3,074				7,609				7,643
Total noninterest expenses			23,770				23,753				69,669				67,228
Income  (Loss) before income taxes			6,561				(3,820	)			17,318				4,101
Provision (Benefit) for income taxes			2,191				(1,146	)			5,060				1,230
Net income (loss)			4,370				(2,674	)			12,258				2,871
Dividends on preferred shares and accretion			0				654				833				1,934
Net income (loss) available to common shareholders    before accelerated accretion from redemption    of preferred shares			4,370				(3,328	)			11,425				937
Accelerated accretion from redemption    of preferred shares			0				0				1,241				0
Net income (loss) available to common      shareholders		$	4,370			$	(3,328	)		$	10,184			$	937

 

 

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STERLING BANCORP

Consolidated Statements of Operations

(Unaudited)

(dollars in thousands, except per share data)

 

(continued)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2011				2010				2011				2010
Average number of common shares outstanding
Basic			30,789,539				26,757,035				29,375,816				23,729,461
Diluted			30,789,539				26,757,035				29,375,816				23,732,888
Net income (loss) available to common    shareholders, before accelerated accretion from    redemption, per average common share
Basic		$	0.14			$	(0.12	)		$	0.39			$	0.04
Diluted			0.14				(0.12	)			0.39				0.04
Net income (loss) available to common    shareholders per average common share
Basic			0.14				(0.12	)			0.35				0.04
Diluted			0.14				(0.12	)			0.35				0.04
Dividends per common share			0.09				0.09				0.27				0.27

 

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STERLING BANCORP

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(dollars in thousands)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2011				2010				2011				2010
Net income (loss)		$	4,370			$	(2,674	)		$	12,258			$	2,871
Other comprehensive income, net of tax:
Unrealized holding (losses) gains on securities        arising during the period			(2,566	)			921				(1,258	)			3,081
Reclassification adjustment for securities        gains included in net income			(229	)			(638	)			(835	)			(1,866	)
Amortization of:
Prior service cost			9				9				26				27
Net actuarial losses			487				354				1,266				1,191
Comprehensive income (loss)		$	2,071			$	(2,028	)		$	11,457			$	5,304

 

STERLING BANCORP

Consolidated Statements of Changes in Shareholders' Equity

(Unaudited)

(dollars in thousands)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2011				2010				2011				2010
Balance, at beginning of period		$	219,256			$	229,275			$	222,742			$	161,950
Net income (loss) for period			4,370				(2,674	)			12,258				2,871
Common shares issued			0				0				36,454				64,881
Common shares issued under stock incentive    plan and related tax benefits			0				0				0				1,477
Stock option and restricted stock   compensation expense			141				70				287				188
Preferred shares redeemed in connection with the   TARP Capital Purchase Program			0				0				(42,000	)			0
Repurchase of warrant			0				0				(945	)			0
Cash dividends-Common shares			(2,783	)			(2,414	)			(8,341	)			(6,459	)
Cash dividends-Preferred shares			0				(525	)			(945	)			(1,575	)
Surrender of shares issued under    incentive compensation plan			0				0				(24	)			(1,388	)
Change in net unrealized holding (losses) gains on    securities			(2,566	)			921				(1,258	)			3,081
Reclassification adjustment for securities    gains included in net income			(229	)			(638	)			(835	)			(1,866	)
Amortization of:
Prior service cost			9				9				26				27
Net actuarial losses			487				354				1,266				1,191
Balance, at end of period		$	218,685			$	224,378			$	218,685			$	224,378

 

Page 11 of 16

 

STERLING BANCORP

Average Balance Sheets [1]

(Unaudited)

(dollars in thousands)

 

		Three Months Ended
		September 30, 2011												September 30, 2010
		AVERAGE								AVERAGE				AVERAGE								AVERAGE
		BALANCE				INTEREST				RATE				BALANCE				INTEREST				RATE
Assets
Interest-bearing deposits with other banks		$	66,961			$	35				0.21	%		$	14,180			$	10				0.27	%
Investment Securities
Available for sale - taxable			371,174				2,364				2.55				449,055				2,767				2.46
Held to maturity - taxable			337,634				1,978				2.34				198,280				2,172				4.38
Tax-exempt [2]			158,417				2,471				6.24				136,533				2,102				6.16
Total investment securities			867,225				6,813				3.14				783,868				7,041				3.59
FRB and FHLB stock  [2]			8,714				75				3.44				8,810				113				5.16
Loans, net of unearned discount  [3]			1,454,029				19,121				5.37				1,314,846				18,275				5.71
Total Interest-Earning Assets [2]			2,396,929				26,044				4.38	%			2,121,704				25,439				4.86	%
Cash and due from banks			38,558												34,635
Allowance for loan losses			(19,798	)											(22,735	)
Goodwill			22,901												22,901
Other			158,255												137,699
Total Assets		$	2,596,845											$	2,294,204
Liabilities and Shareholders' Equity
Interest-bearing deposits
Domestic
Savings		$	17,497				2				0.05	%		$	18,505				2				0.05	%
NOW			223,566				117				0.21				183,780				67				0.14
Money market			377,777				633				0.67				342,615				677				0.78
Time			798,705				1,470				0.73				580,328				1,545				1.06
Foreign
Time			0				0				0.00				117				0				1.10
Total Interest-Bearing Deposits			1,417,545				2,222				0.62				1,125,345				2,291				0.81
Borrowings
Securities sold u/a/r - customers			40,340				45				0.44				41,880				49				0.46
Securities sold u/a/r - dealers			5,002				16				1.30				13,093				23				0.68
Federal funds purchased			13,912				5				0.13				73,533				44				0.23
Commercial paper			14,521				11				0.29				14,424				12				0.30
Short-term borrowings - other			4,195				2				0.10				16,239				14				0.35
Advances - FHLB			127,782				483				1.50				131,823				871				2.62
Long-term borrowings - sub debt			25,774				523				8.38				25,774				523				8.38
Total Borrowings			231,526				1,085				1.87				316,766				1,536				1.93
Total Interest-Bearing Liabilities			1,649,071				3,307				0.80	%			1,442,111				3,827				1.05	%
Noninterest-bearing demand deposits			582,042												478,474
Total including noninterest-bearing demand deposits			2,231,113				3,307				0.59	%			1,920,585				3,827				0.79	%
Other liabilities			146,262												144,843
Total Liabilities			2,377,375												2,065,428
Shareholders' equity			219,470												228,776
Total Liabilities and Shareholders' Equity		$	2,596,845											$	2,294,204
Net interest income/spread [2]							22,737				3.58	%							21,612				3.81	%
Net yield on interest-earning assets [2]											3.81	%											4.11	%
Less: Tax-equivalent adjustment							865												737
Net interest income						$	21,872											$	20,875

 

[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 16

 

 

STERLING BANCORP

Average Balance Sheets [1]

(Unaudited)

(dollars in thousands)

 

		Nine Months Ended
		September 30, 2011												September 30, 2010
		AVERAGE								AVERAGE				AVERAGE								AVERAGE
		BALANCE				INTEREST				RATE				BALANCE				INTEREST				RATE
Assets
Interest-bearing deposits with other banks		$	53,070			$	92				0.23	%		$	27,243			$	53				0.26	%
Investment Securities
Available for sale - taxable			374,278				6,839				2.44				405,340				8,670				2.85
Held to maturity - taxable			333,710				6,335				2.53				253,926				8,874				4.66
Tax-exempt [2]			157,144				7,323				6.21				113,168				5,220				6.15
Total investment securities			865,132				20,497				3.16				772,434				22,764				3.93
FRB and FHLB stock  [2]			8,862				243				3.66				8,363				299				4.77
Loans, net of unearned discount  [3]			1,344,935				53,776				5.59				1,231,970				51,907				5.96
Total Interest-Earning Assets [2]			2,271,999				74,608				4.49	%			2,040,010				75,023				5.07	%
Cash and due from banks			37,998												35,408
Allowance for loan losses			(19,648	)											(22,334	)
Goodwill			22,901												22,901
Other			151,262												132,450
Total Assets		$	2,464,512											$	2,208,435
Liabilities and Shareholders' Equity
Interest-bearing deposits
Domestic
Savings		$	18,450				7				0.05	%		$	18,324				9				0.06	%
NOW			212,857				289				0.18				212,012				398				0.25
Money market			359,415				1,856				0.69				334,819				2,129				0.85
Time			708,919				4,212				0.79				542,156				4,854				1.20
Foreign
Time			0				0				0.00				423				3				1.09
Total Interest-Bearing Deposits			1,299,641				6,364				0.65				1,107,734				7,393				0.89
Borrowings
Securities sold u/a/r - customers			42,096				145				0.46				49,046				175				0.48
Securities sold u/a/r - dealers			5,249				49				1.24				5,827				28				0.63
Federal funds purchased			14,608				14				0.13				40,321				67				0.22
Commercial paper			14,762				33				0.30				14,604				34				0.31
Short-term borrowings - other			3,794				3				0.08				14,054				27				0.26
Advances - FHLB			131,816				1,647				1.67				128,628				2,591				2.69
Long-term borrowings - sub debt			25,774				1,570				8.38				25,774				1,570				8.38
Total Borrowings			238,099				3,461				1.95				278,254				4,492				2.16
Total Interest-Bearing Liabilities			1,537,740				9,825				0.85	%			1,385,988				11,885				1.15	%
Noninterest-bearing demand deposits			558,059												471,081
Total including noninterest-bearing demand deposits			2,095,799				9,825				0.63	%			1,857,069				11,885				0.86	%
Other liabilities			141,840												142,113
Total Liabilities			2,237,639												1,999,182
Shareholders' equity			226,873												209,253
Total Liabilities and Shareholders' Equity		$	2,464,512											$	2,208,435
Net interest income/spread [2]							64,783				3.64	%							63,138				3.92	%
Net yield on interest-earning assets [2]											3.90	%											4.26	%
Less: Tax-equivalent adjustment							2,565												1,830
Net interest income						$	62,218											$	61,308

 

[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 16

 

STERLING BANCORP

Rate/Volume Analysis [1]

(Unaudited)

(dollars in thousands)

 

		Increase/(Decrease)
		Three Months Ended
		September 30, 2011
		Volume				Rate				Net  [2]
INTEREST INCOME
Interest-bearing deposits with other banks		$	27			$	(2	)		$	25
Investment Securities
Available for sale - taxable			(501	)			98				(403	)
Held to maturity - taxable			1,110				(1,304	)			(194	)
Tax-exempt			341				28				369
Total investment securities			950				(1,178	)			(228	)
FRB and FHLB stock			(1	)			(37	)			(38	)
Loans, net of unearned discounts [3]			1,984				(1,138	)			846
TOTAL INTEREST INCOME		$	2,960			$	(2,355	)		$	605
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings		$	0			$	0			$	0
NOW			15				35				50
Money market			61				(105	)			(44	)
Time			487				(562	)			(75	)
Foreign
Time			0				0				0
Total interest-bearing deposits			563				(632	)			(69	)
Borrowings
Securities sold under agreements to repurchase - customers			(2	)			(2	)			(4	)
Securities sold under agreements to repurchase - dealers			(19	)			12				(7	)
Federal funds purchased			(25	)			(14	)			(39	)
Commercial paper			(1	)			0				(1	)
Short-term borrowings - other			(6	)			(6	)			(12	)
Advances - FHLB			(26	)			(362	)			(388	)
Long-term borrowings - subordinated debentures			0				0				0
Total borrowings			(79	)			(372	)			(451	)
TOTAL INTEREST EXPENSE		$	484			$	(1,004	)		$	(520	)
NET INTEREST INCOME		$	2,476			$	(1,351	)		$	1,125

 

[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 change in interest expense for foreign time deposits 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 14 of 16

 

STERLING BANCORP

Rate/Volume Analysis [1]

(Unaudited)

(dollars in thousands)

 

		Increase/(Decrease)
		Nine Months Ended
		September 30, 2011
		Volume				Rate				Net  [2]
INTEREST INCOME
Interest-bearing deposits with other banks		$	46			$	(7	)		$	39
Investment Securities
Available for sale - taxable			(636	)			(1,195	)			(1,831	)
Held to maturity - taxable			2,262				(4,801	)			(2,539	)
Tax-exempt			2,051				52				2,103
Total investment securities			3,677				(5,944	)			(2,267	)
FRB and FHLB stock			17				(73	)			(56	)
Loans, net of unearned discounts [3]			5,180				(3,311	)			1,869
TOTAL INTEREST INCOME		$	8,920			$	(9,335	)		$	(415	)
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings		$	0			$	(2	)		$	(2	)
NOW			2				(111	)			(109	)
Money market			148				(421	)			(273	)
Time			1,272				(1,914	)			(642	)
Foreign
Time			(3	)			0				(3	)
Total interest-bearing deposits			1,419				(2,448	)			(1,029	)
Borrowings
Securities sold under agreements to repurchase - customers			(23	)			(7	)			(30	)
Securities sold under agreements to repurchase - dealers			(3	)			24				21
Federal funds purchased			(32	)			(21	)			(53	)
Commercial paper			0				(1	)			(1	)
Short-term borrowings - other			(12	)			(12	)			(24	)
Advances - FHLB			62				(1,006	)			(944	)
Long-term borrowings - subordinated debentures			0				0				0
Total borrowings			(8	)			(1,023	)			(1,031	)
TOTAL INTEREST EXPENSE		$	1,411			$	(3,471	)		$	(2,060	)
NET INTEREST INCOME		$	7,509			$	(5,864	)		$	1,645

 

[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 change in interest expense for foreign time deposits 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 16

 

STERLING BANCORP

Reconciliation of Tangible Common 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, 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. 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.

 

		September 30,
		2011				2010
Tangible common equity
Total shareholders' equity		$	218,685			$	224,378
Less:
Preferred equity			0				40,472
Goodwill and other intangible assets			22,975				23,176
Total tangible common equity		$	195,710			$	160,730
Tangible assets
Total assets		$	2,656,975			$	2,303,477
Less: Goodwill and other intangible assets			22,975				23,176
Total tangible assets		$	2,634,000			$	2,280,301
Tangible common equity ratio			7.43	%			7.05	%

 

Page 16 of 16

 

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