2009 Highlights:
- Net income before preferred stock dividends and accretion was
$3.6 million or$0.20 per diluted share for the first quarter. - Pre-tax income before loan loss provision and securities gains was up 8.5% from a year ago, to
$9.1 million . - Net interest income rose to
$21.4 million for the 2009 first quarter, up nearly 8% over the prior year period. - The net interest margin was 4.50% for the 2009 first quarter, rising 11 basis points from a year ago.
- Average loans held in portfolio increased 6.1% over the prior year period to
$1.15 billion . - Demand deposits were
$484 million atMarch 31, 2009 , representing 35% of total deposits. - Sterling's capital ratios exceeded 'well-capitalized' requirements, with total risk-based capital of 13.33% at
March 31, 2009 . - Through acquisition, the Company formed the Sterling Trade Capital division in early April, substantially expanding its factoring, import trade financing and receivables management business and broadening the market for its services.
Page 1 of 13
Management Comments
'Sterling's performance for the 2009 first quarter was distinguished by profitability and growth, in sharp contrast to the prevailing weakness in economic conditions on a local, national and global scale,' stated
Mr. Cappelli continued, 'We have benefited from the diversity and breadth of our business, and have experienced strong demand for our products and services, especially among business customers. Our greater net interest income for the first quarter largely reflected the increase in our loan portfolio, as well as our ongoing strategies to manage the balance sheet to achieve the lowest possible funding costs and a high net interest margin.'
'In this environment, we are continuing to explore and take action on attractive opportunities, as shown by our recent acquisition of a factoring, import trade financing and accounts receivable management business in early April. Now operating as Sterling Trade Capital, this is an excellent complement to our portfolio of services. Going forward, we are maintaining our focus on responsible growth, capital strength, asset quality and superior service, while continuing our effective balance sheet management and expense control,' Mr. Cappelli concluded.
First Quarter 2009 Financial Results
Net income before preferred dividends and accretion was
Net interest income, on a tax-equivalent basis, was
Page 2 of 13
Net interest margin for the 2009 first quarter, on a tax-equivalent basis, was 4.50%, an increase of 11 basis points compared to 4.39% for the first quarter of last year.
Noninterest income was
Noninterest expenses were
The provision for income taxes was
Earning Assets and Deposits
Loans held in portfolio, net of unearned discounts, averaged
Investment securities averaged
Demand deposits averaged
Asset Quality
The Company has continued to pursue a prudent and cautious approach to asset quality in the current recessionary environment. Sterling believes that its asset quality continued to compare favorably with industry peers, based on such measures as the ratio of nonperforming assets to total assets and the allowance for loan losses as a percentage of nonperforming loans.
During the first quarter of 2009, conditions deteriorated further across many segments of the economy. The symptoms of the economic downturn are widespread, and include a decline in gross domestic product, reduced business investment and manufacturing activity, weaker retail spending, rising unemployment, depressed housing values, and continued volatility and illiquidity in the financial markets. These and other factors have adversely affected the financial condition of certain of the Company's business borrowers, as well as the value of its collateral. Accordingly, Sterling experienced increases in both net charge-offs and nonperforming assets in the recent period as
Page 3 of 13
compared with its relatively low historical levels. For example, the ratio of nonperforming assets to total assets was 0.83% at
Asset quality improved in certain categories, as reflected in decreases in commercial and industrial nonaccrual loans, as well as other real estate owned (OREO), compared to the year-ago period. No industry concentrations in the commercial and industrial loan portfolio exceeded 10% of gross loans at
Based on the above factors, as well as management's regular evaluation of the loan portfolio and its assessment of current and expected economic conditions, Sterling increased its provision and allowance for loan losses during the quarter ended
Capital and Dividends
As of
Sterling recently declared a cash dividend of
Conference Call
Sterling Bancorp will host a teleconference call for the financial community on
Page 4 of 13
A replay of the conference call will be available beginning at approximately
About Sterling Bancorp
Sterling Bancorp (NYSE: STL) is a
Sterling offers working capital lines, asset-based financing, factoring, accounts receivable financing and management, payroll funding and processing, equipment leasing and financing, commercial and residential mortgages, import trade financing, a wide array of depository products and cash management services, trust and estate administration and custodial account services.
Certain statements in this press release, including but not limited to, statements as to 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 Company's belief that the business acquired in early April and now operating as Sterling Trade Capital is an excellent complement to the Company's portfolio of services and will expand both its business volume and potential customer base for its factoring and related services, that the Company's strong liquidity should provide capacity for further loan growth, and other statements 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. 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 the Company's Annual Report on Form 10-K for the fiscal year ended
Page 5 of 13
STERLING BANCORP
Consolidated Financial Highlights
(Unaudited)
(dollars and shares in thousands, except per share data)
Three Months Ended March 31,
----------------------------
2009 2008
---------- ---------
OPERATING HIGHLIGHTS
Interest income $ 26,591 $ 29,769
Interest expense 5,219 9,934
Net interest income 21,372 19,835
Provision for loan losses 6,200 1,950
Noninterest income 10,798 8,672
Noninterest expenses 20,052 20,166
Income before income taxes 5,918 6,391
Provision for income taxes 2,306 2,389
Net income 3,612 4,002
Dividends on preferred shares and
accretion 842 0
Net income available to common
shareholders 2,770 4,002
Net income per average common share:
Basic 0.20 0.22
Diluted 0.20 0.22
Net income available to common
shareholders, per average common
share:
Basic 0.15 0.22
Diluted 0.15 0.22
Cash dividends declared 0.19 0.19
Common shares outstanding:
Period end 18,106 17,989
Average Basic 18,099 17,870
Average Diluted 18,275 18,069
Return on average assets (1) 0.70% 0.80%
Return on average tangible common
equity (2) 15.42% 16.53%
Return on average stated common
equity (3) 12.43% 13.38%
Net interest margin, tax-equivalent
basis 4.50% 4.39%
CAPITAL RATIOS
Period End
Tier 1 risk based 12.16% 9.75%
Total risk based 13.33% 10.86%
Leverage 8.59% 6.78%
Book value per common share
(period end) $ 6.59 $ 6.87
(1) Calculated by dividing net income by average assets.
(2) Average tangible common equity represents average shareholders' equity
less average preferred stock and average goodwill. Calculated by
dividing net income by average tangible common equity.
(3) Average stated common equity is equal to average shareholders' equity
less average preferred stock. Calculated by dividing net income by
average stated common equity.
Page 6 of 13
STERLING BANCORP
Consolidated Financial Highlights
(Unaudited)
(dollars in thousands, except per share data)
Three Months Ended March 31,
----------------------------
2009 2008
----------- ----------
BALANCE SHEET HIGHLIGHTS
Period End Balances
Investment securities $ 661,233 $ 761,028
Loans held for sale 44,830 22,235
Loans held in portfolio,
net of unearned discount 1,185,224 1,155,402
Total earning assets 1,906,901 1,939,343
Allowance for loan losses 17,158 15,162
Total assets 2,127,171 2,105,357
Demand deposits 484,200 494,308
Savings, NOW and money market
deposits 565,843 466,070
Time deposits 322,363 534,657
Customer repurchase agreements 43,584 48,753
Other short-term borrowings 269,736 160,516
Long-term borrowings 175,774 175,774
Shareholders' equity 159,160 123,579
Average Balances
Investment securities $ 750,311 $ 720,486
Loans held for sale 33,443 23,388
Loans held in portfolio,
net of unearned discount 1,146,790 1,081,085
Total earning assets 1,942,524 1,828,290
Total assets 2,092,972 2,006,040
Demand deposits 435,242 440,860
Savings, NOW and money market
deposits 583,378 464,874
Time deposits 328,393 551,395
Customer repurchase agreements 74,700 82,460
Other short-term borrowings 226,282 133,838
Long-term borrowings 175,774 114,236
Shareholders' equity 157,533 120,279
ASSET QUALITY HIGHLIGHTS
Period End
Net charge-offs $ 4,997 $ 1,498
Nonaccrual loans 16,188 6,500
Other real estate owned 1,423 2,186
Nonperforming assets 17,611 8,686
Nonaccrual loans/loans (1) 1.32% 0.55%
Nonperforming assets/assets 0.83% 0.41%
Allowance for loan losses/loans (2) 1.45% 1.31%
Allowance for loan losses/nonaccrual
loans 105.99% 233.26%
(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 13
STERLING BANCORP
Consolidated Balance Sheets
(Unaudited)
(in thousands, except number of shares)
March 31,
----------
2009 2008
--------- ---------
ASSETS
Cash and due from banks $ 30,635 $ 53,033
Interest-bearing deposits with other
banks 15,614 678
Investment securities
Available for sale (at estimated
fair value) 355,128 412,521
Held to maturity (at amortized
cost) 306,105 348,507
------- -------
Total investment securities 661,233 761,028
------- -------
Loans held for sale 44,830 22,235
------ ------
Loans held in portfolio, net of
unearned discounts 1,185,224 1,155,402
Less allowance for loan losses 17,158 15,162
------ ------
Loans held in portfolio, net 1,168,066 1,140,240
--------- ---------
Customers' liability under
acceptances 230 0
Goodwill 22,901 22,901
Premises and equipment, net 10,327 10,776
Other real estate 1,423 2,186
Accrued interest receivable 7,037 8,168
Cash surrender value of life
insurance policies 46,926 43,212
Other assets 117,949 40,900
------- ------
$ 2,127,171 $ 2,105,357
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Demand $ 484,200 $ 494,308
Savings, NOW and money market 565,843 466,070
Time 322,363 534,657
------- -------
Total deposits 1,372,406 1,495,035
Securities sold under agreements to
repurchase - customers 43,584 48,753
Securities sold under agreements to
repurchase - dealers 0 44,514
Federal funds purchased 45,000 45,000
Commercial paper 11,382 19,990
Short-term borrowings - FHLB 0 49,000
Short-term borrowings - FRB 210,000 0
Short-term borrowings - other 3,354 2,012
Long-term borrowings - FHLB 150,000 150,000
Long-term borrowings - subordinated
debentures 25,774 25,774
Acceptances outstanding 230 0
Accrued interest payable 1,956 3,996
Accrued expenses and other
liabilities 104,325 97,704
------- ------
Total liabilities 1,968,011 1,981,778
Shareholders' equity 159,160 123,579
------- -------
$2,127,171 $ 2,105,357
========== ==========
MEMORANDA
Available for sale securities -
amortized cost $354,670 $ 411,868
Held to maturity securities -
estimated fair value 313,730 352,861
Shares outstanding
Common issued 22,226,425 21,813,131
Common in treasury 4,119,934 3,824,161
NOTE: Certain reclassifications have been made to prior
period's financial data to conform to current financial
statement presentations.
Page 8 of 13
STERLING BANCORP
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share data)
Three Months Ended March 31,
----------------------------
2009 2008
---------- --------
INTEREST INCOME
Loans $ 17,552 $ 20,820
Investment securities - available
for sale 5,495 4,712
Investment securities - held to
maturity 3,534 4,225
Deposits with other banks 10 12
---------- --------
Total interest income 26,591 29,769
---------- --------
INTEREST EXPENSE
Savings, NOW and money market
deposits 1,125 1,610
Time deposits 2,166 5,338
Securities sold u/a/r - customers 115 646
Securities sold u/a/r - dealers 0 317
Federal funds purchased 34 362
Commercial paper 23 195
Short-term borrowings - FHLB 11 215
Short-term borrowings - FRB 99 0
Short-term borrowings - other 1 14
Long-term borrowings - FHLB 1,122 714
Long-term subordinated debentures 523 523
---------- ---------
Total interest expense 5,219 9,934
---------- ---------
Net interest income 21,372 19,835
Provision for loan losses 6,200 1,950
---------- ---------
Net interest income after provision
for loan losses 15,172 17,885
---------- ---------
NONINTEREST INCOME
Accounts receivable management/
factoring commissions and other
fees 3,243 3,565
Service charges on deposit accounts 1,383 1,352
Other customer related service
charges and fees 680 675
Mortgage banking income 2,106 2,499
Trust fees 139 135
Income from life insurance policies 258 269
Loss on sale of OREO (2) (228)
Securities gains 3,065 0
Other income (74) 405
---------- ---------
Total noninterest income 10,798 8,672
---------- ---------
NONINTEREST EXPENSES
Salaries 9,989 9,348
Employee benefits 2,677 2,836
---------- ---------
Total personnel expense 12,666 12,184
Occupancy and equipment expenses, net 2,672 3,009
Advertising and marketing 654 635
Professional fees 1,123 1,364
Communications 431 456
Other expenses 2,506 2,518
---------- ---------
Total noninterest expenses 20,052 20,166
---------- ---------
Income before income taxes 5,918 6,391
Provision for income taxes 2,306 2,389
---------- ---------
Net income 3,612 4,002
Dividends on preferred shares and
accretion 842 0
---------- ---------
Net income available to common
shareholders $2,770 $ 4,002
========== =========
Page 9 of 13
STERLING BANCORP
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share data)
(continued)
Three Months Ended March 31,
---------------------------
2009 2008
---------- ---------
Average number of common shares
outstanding
Basic 18,098,521 17,870,084
Diluted 18,275,310 18,069,171
Net Income per average
common share
Basic $ 0.20 $ 0.22
Diluted 0.20 0.22
Net income available to common
shareholders
per average common share
Basic 0.15 0.22
Diluted 0.15 0.22
Dividends per common share 0.19 0.19
NOTE: Certain reclassifications have been made to prior
periods' financial data to conform to current financial
statement presentations.
Page 10 of 13
STERLING BANCORP
Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands)
Three Months Ended March 31,
----------------------------
2009 2008
---------- --------
Net income $ 3,612 $ 4,002
Other comprehensive income, net of
tax:
Unrealized holding gains on securities,
arising during the period 21 1,356
Reclassification adjustment for
securities (gains) losses included
in net income (1,674) 0
Amortization of:
Prior service cost 9 9
Net actuarial losses 354 230
-------- --------
Comprehensive income $ 2,322 $ 5,597
======== ========
STERLING BANCORP
Consolidated Statements of Changes in Shareholders'
Equity
(Unaudited)
(in thousands)
Three Months Ended March 31,
----------------------------
2009 2008
--------- ----------
Balance, at beginning of period $ 160,480 $ 121,070
Net income for period 3,612 4,002
Common shares issued under stock
incentive plan and related tax benefits 209 6,265
Stock option compensation expense 33 0
Cash dividends-Common shares (3,437) (3,409)
Cash dividends-Preferred shares (303) 0
Surrender of shares issued under
incentive compensation plan (144) (5,218)
Change in net unrealized holding gains
on available for sale securities 21 1,356
Reclassification adjustment for securities
(gains) losses included in net
income (1,674) 0
Adjustment to retained earnings upon
adoption of EITF Issue 06-4 effective
January 1, 2008 0 (726)
Amortization of:
Prior service cost 9 9
Net actuarial losses 354 230
--------- -----------
Balance, at end of period $ 159,160 $ 123,579
========== ==========
Page 11 of 13
STERLING BANCORP
Average Balance Sheets (1)
(Unaudited)
(dollars in thousands)
Three Months Ended
------------------
March 31, 2009 March 31, 2008
-------------------------- -------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
-------------------------------------------------------
Assets
Interest-bearing
deposits with
other banks $ 11,980 $ 10 0.35% $ 3,331 $ 12 1.40%
-------- ----- ----- -------- ----- -----
Investment
securities -
available for
sale 428,478 5,279 4.93 345,034 4,533 5.26
Investment
securities -
held to
maturity 297,558 3,523 4.74 356,320 4,225 4.74
Investment
securities -
tax exempt (2) 24,275 371 6.12 19,132 294 6.18
------ --- ------ ---
Total investment
securities 750,311 9,173 4.89 720,486 9,052 5.03
Loans, net of
unearned
discount (3) 1,180,233 17,552 6.19 1,104,473 20,820 7.80
--------- ------ --------- ------
Total
Interest-
Earning
Assets (2) 1,942,524 26,735 5.63% 1,828,290 29,884 6.65%
--------- ------ ===== ------ =====
Cash and due
from banks 32,423 67,626
Allowance for
loan losses (16,890) (15,570)
Goodwill 22,901 22,901
Other 112,014 102,793
---------- ----------
Total Assets $2,092,972 $2,006,040
========== ==========
Liabilities and
Shareholders'
Equity
Interest-bearing
deposits
Domestic
Savings $ 18,217 6 0.14% $ 18,649 16 0.34%
NOW 227,027 168 0.30 236,714 825 1.40
Money market 338,134 951 1.14 209,511 769 1.48
Time 327,815 2,164 2.68 550,819 5,336 3.90
Foreign
Time 578 2 1.09 576 2 1.09
------- ----- --------- -----
Total Interest-
Bearing
Deposits 911,771 3,291 1.46 1,016,269 6,948 2.75
------- ----- --------- -----
Borrowings
Securities
sold u/a/r -
customers 74,700 115 0.63 82,460 646 3.15
Securities
sold u/a/r -
dealers 0 0 0.00 36,026 317 3.54
Federal funds
purchased 57,507 34 0.23 48,956 362 2.92
Commercial
paper 11,877 23 0.78 21,150 195 3.70
Short-term
borrowings -
FHLB 13,833 11 0.31 25,868 215 3.34
Short-term
borrowings
- FRB 141,611 99 0.28 0 0 0.00
Short-term
borrowings -
other 1,454 1 0.17 1,838 14 3.09
Long-term
borrowings -
FHLB 150,000 1,122 3.03 88,462 714 3.23
Long-term
borrowings -
sub debt 25,774 523 8.38 25,774 523 8.38
------ ----- ------- ------
Total
Borrowings 476,756 1,928 1.64 330,534 2,986 3.63
------- ----- ------- ------
Total Interest-
Bearing
Liabilities 1,388,527 5,219 1.52% 1,346,803 9,934 2.96%
--------- ----- ===== --------- ----- =====
Noninterest-bearing
demand deposits 435,242 440,860
Other liabilities 111,670 98,098
Total
Liabilities 1,935,439 1,885,761
Shareholders'
equity 157,533 120,279
---------- ---------
Total
Liabilities
and
Shareholders'
Equity $ 2,092,972 $ 2,006,040
=========== ============
Net interest
income/spread (2) 21,516 4.11% 19,950 3.69%
===== =====
Net yield on
interest-
earning assets 4.50% 4.39%
====== =====
Less: Tax-
equivalent
adjustment 144 115
--- ---
Net interest
income $ 21,372 $ 19,835
========= =========
(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 13
STERLING BANCORP
Rate/Volume Analysis (1)
(Unaudited)
(in thousands)
Increase/(Decrease)
Three Months Ended
March 31, 2009
-------------------------------
Volume Rate Net (2)
-------- -------- ---------
INTEREST INCOME
Interest-bearing deposits with
other banks $ 12 $ (14) $ (2)
-------- -------- ---------
Investment securities -
available for sale 1,028 (282) 746
Investment securities - held
to maturity (702) 0 (702)
Investment securities -
tax exempt 80 (3) 77
-------- -------- --------
Total investment
securities 406 (285) 121
-------- ---- --------
Loans, net of unearned
discounts (3) 1,197 (4,465) (3,268)
-------- ---------- ---------
TOTAL INTEREST INCOME $ 1,615 $ (4,764) $ (3,149)
======== ========= =========
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings $ 0 $ (10) $ (10)
NOW (40) (617) (657)
Money market 386 (204) 182
Time (1,811) (1,361) (3,172)
Foreign
Time 0 0 0
-------- -------- --------
Total interest-bearing
deposits (1,465) (2,192) (3,657)
--------- -------- -------
Borrowings
Securities sold under
agreements to repurchase
- customers (61) (470) (531)
Securities sold under
agreements to repurchase
- dealers (159) (158) (317)
Federal funds purchased 48 (376) (328)
Commercial paper (63) (109) (172)
Short-term
borrowings - FHLB (70) (134) (204)
Short-term borrowings - FRB 99 0 99
Short-term borrowings - other (2) (11) (13)
Long-term borrowings - FHLB 454 (46) 408
Long-term borrowings -
subordinated debentures 0 0 0
-------- -------- --------
Total borrowings 246 (1,304) (1,058)
-------- -------- --------
--------- -------- --------
TOTAL INTEREST EXPENSE $ (1,219) $ (3,496) $ (4,715)
========= ========= =========
NET INTEREST INCOME $ 2,834 $ (1,268) $ 1,566
========= ========= =========
(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 2008 has been included in the change in
volume.
(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 13
SOURCE Sterling Bancorp
