STERLING BANCORP 
By NEW YORK, Jan. 24, 2013 /PRNewswire/ --
Strong Financial Performance
-- Net income available to common shareholders was $20.0 million or $0.65
per diluted share for the full year and $5.2 million or $0.17 per
diluted share for fourth quarter 2012.
-- Pre-tax income rose 31% for the full year and 58% in the fourth quarter
of 2012, before the effect of a net tax benefit of approximately $1.9
million in the 2011 periods.
-- Gross revenues were $145.7 million for the full year 2012, an increase
of $5.1 million over 2011.
-- Growth in gross revenues of 4% for 2012 exceeded the noninterest expense
increase of 2%.
-- Net interest margin increased 16 basis points to 4.17% for full year
2012.
Robust Loan and Deposit Growth
-- Loans, net of unearned discount, reached an all-time high of $1.8
billion, increasing 17%.
-- Total deposits increased 14% to a record $2.3 billion.
-- Demand deposits of $924.4 million represented over 40% of total
deposits.
Solid Credit Metrics
Comparisons above are at, or for the periods ended, December 31, 2012 vs. December 31, 2011.
-- Net charge-offs were 0.47% of loans in portfolio for full year 2012.
-- Ratio of nonperforming assets to total assets decreased to 0.27%.
-- Allowance for loan losses as a percentage of loans held in portfolio was
1.35%.
Sterling Bancorp (NYSE: STL) today reported strong financial and operating performance for 2012, reflecting a more profitable earning asset mix, ongoing business growth, expense control and continued sound asset quality.
Net income available to common shareholders rose to $20.0 million for the full year 2012, from $15.5 million in 2011. Pre-tax income was $28.6 million in 2012, 31% higher than the amount reported for 2011. Diluted earnings per common share were $0.65 for 2012, up from $0.51 a year ago. Results for the full year 2011 included $2.1 million of dividends on preferred shares and accretion related to TARP preferred shares and warrants to purchase common shares, which were redeemed in April 2011.
For the 2012 fourth quarter, net income available to common shareholders was $5.2 million, or $0.17 per diluted share. In the 2011 fourth quarter, Sterling recorded a tax benefit of approximately $1.9 million, or $0.06 per diluted share. Including this tax benefit, net income available to common shareholders for the 2011 fourth quarter was $5.3 million or $0.17 per diluted share. Pre-tax income for the 2012 fourth quarter, excluding the effect of the year-ago tax benefit, rose 58% to $7.1 million.
Selected Financial Highlights
Year Ended
----------
12/31/12 12/31/11
-------- --------
EARNINGS HIGHLIGHTS
Income before income taxes (in millions) $28.6 $21.8
Net income available to common shareholders (in millions) $20.0 $15.5
Diluted earnings per common share $0.65 $0.51
Net interest margin 4.17% 4.01%
Return on average assets 0.78% 0.70%
Return on average tangible equity 9.80% 8.72%
--------------------------------- ---- ----
AVERAGE BALANCE SHEET HIGHLIGHTS (in millions)
Year Ended
----------
12/31/12 12/31/11
-------- --------
Total investment securities $755.4 $851.0
Loans, net of unearned discount $1,583.8 $1,379.4
Demand deposits $782.8 $596.6
Total deposits $2,081.8 $1,921.7
Total assets $2,576.8 $2,508.2
ASSET QUALITY HIGHLIGHTS (period end)
Nonaccrual loans/loans (1) 0.33% 0.42%
Nonperforming assets/assets 0.27% 0.33%
Allowance for loan losses/nonaccrual loans 377.36% 315.02%
(1) Includes loans held for sale and loans held in portfolio.
-------------------------------------------------------------
2012 Results Reflect Business Growth, Higher Profitability
"Sterling delivered outstanding growth and strong profitability in 2012," said Louis J. Cappelli, Sterling's Chairman and Chief Executive Officer. "Our accomplishments during the year were noteworthy for double-digit increases in loans and deposits, as we continued to capitalize on opportunities to serve the needs of customers in the dynamic New York metropolitan area marketplace and beyond. We delivered higher gross revenues, through an increase in interest income and diverse sources of noninterest income. In addition, we maintained disciplined management of operating expenses, even as we expanded the business organically and through an accretive acquisition, while our sound asset quality metrics were further strengthened."
"We have consistently pointed to our strategic focus on redeploying assets from lower yielding investments into higher yielding loans, and our results in 2012 benefitted from the successful execution of this strategy. This has led to higher loan balances, a more profitable earning asset mix, and a higher net interest margin, enabling Sterling to counter the margin compression that many other banks have experienced due to prevailing low interest rates. Our loan portfolio grew by 17% year-over-year and reached an all-time high of $1.8 billion at year end. Loans represented over 65% of earning assets for 2012 on average, a meaningful increase versus a year ago. Deploying our assets more profitably led to a 16 basis point increase in the net interest margin for the year 2012. Our model is built upon providing a portfolio of financial solutions for businesses, and the growth in our business activity produced higher noninterest income, as well as higher demand deposit balances."
"Another highlight of 2012 was our well-timed and successful acquisition of Universal Mortgage, Inc. in the third quarter. This transaction was planned in advance of the current rebound in the mortgage market and, as expected, has proven to be an excellent source of additional mortgage volume and higher mortgage banking income. Reflecting the positive impact of the Universal acquisition, and the growth in our overall mortgage banking business, we saw a sharp increase in mortgage banking income in the 2012 fourth quarter. We believe there are opportunities to expand upon Universal's well-established presence and relationships in Brooklyn, a market that is experiencing exceptional growth and has a high demand for all of our financial products. We plan to open a new Brooklyn location in the 2013 first quarter to serve both as a branch and as new and expanded offices for Universal Mortgage."
"We believe the positive momentum we experienced in 2012 is continuing and that Sterling is well positioned for 2013. Our performance in the year ahead should continue to benefit from the strengths and strategies that drove our solid results last year. Our team has demonstrated its ability to grow the business. We believe that our ability to redeploy our assets, while generating revenue from a diverse and balanced range of sources, and serving the needs of customers in a vibrant marketplace with our dedicated team of talented professionals will continue to contribute to enhanced shareholder value going forward," Mr. Cappelli stated.
Net Interest Income
Net interest income was $93.9 million for the full year 2012, up 8% from 2011. This primarily reflected a higher yield on earning assets due to the Company's previously noted strategy of shifting its asset mix toward loans from investment securities, as well as a lower cost of funds largely due to disciplined deposit pricing. For the fourth quarter of 2012, net interest income increased nearly 9% from the 2011 period, to $24.8 million.
Noninterest Income
Total noninterest income for full year 2012 was $40.8 million, relatively unchanged from a year ago. For the 2012 fourth quarter, total noninterest income was $9.6 million, up from $9.2 million in the 2011 period. The increase in the 2012 fourth quarter primarily reflected a sharp rise in mortgage banking income, which was partially offset by lower accounts receivable management and other related fees. Noninterest income was a significant contributor to Sterling's financial performance, representing 28% of total revenue for the full year 2012.
Noninterest Expenses
Sterling strengthened its operating leverage during 2012, as the rate of growth in noninterest expenses was exceeded by the increase in gross revenues. Personnel and occupancy expenses rose modestly due to investments to support new business development and the addition of Universal Mortgage, while this increase was largely offset by declines in other key expense categories. As a result, total noninterest expenses increased by approximately 2% for full year 2012 to $95.9 million. For the 2012 fourth quarter, noninterest expenses rose less than 2% from the prior year period, to $24.9 million.
Record Loans and Deposits
Loans, net of unearned discount were a record $1.8 billion as of December 31, 2012, an increase of approximately 17% from a year earlier. The ratio of loans to deposits was 78% at December 31, 2012.
Total deposits were a record $2.3 billion at December 31, 2012, increasing 14% from a year earlier. Noninterest-bearing demand deposits represented over 40% of total deposits, among the highest ratios of demand to total deposits in the industry. The growth in demand deposits reflects the Company's emphasis on generating such deposits as part of its customer relationship model.
Total assets increased to $2.7 billion and earning assets were $2.6 billion at December 31, 2012. The yield on earning assets rose six basis points to 4.64% for the full year 2012, reflecting the Company's strategy of redeploying assets into higher yielding loans from lower yielding investment securities.
Asset Quality
"Sterling maintained our longstanding underwriting discipline while increasing our lending to creditworthy borrowers, leading to continued strong credit quality metrics during 2012. It is significant to note that our allowance for loan losses has increased as charge-offs have continued to decline, and that our earnings improvement did not benefit from a reduced allowance for loan losses, as has been the case at some banking institutions," Mr. Cappelli said.
Net charge-offs were $7.7 million for the year 2012, compared to $10.2 million for 2011. The allowance for loan losses as a percentage of nonaccrual loans was 377% at December 31, 2012, versus 315% a year earlier. Nonperforming assets were $7.4 million or 0.27% of total assets at December 31, 2012, compared to $8.3 million or 0.33% a year earlier. The allowance for loan losses as a percentage of portfolio loans was 1.35% at December 31, 2012, compared to 1.36% a year earlier. The provision for loan losses was $2.5 million and $10.3 million for the fourth quarter and full year 2012, compared with $3.0 million and $12.0 million for the respective 2011 periods.
Capital
The Company's capital base has continued to exceed all regulatory requirements for well-capitalized institutions. At December 31, 2012, Sterling's Tier 1 risk-based capital ratio was 11.49% (compared to a requirement of 6.00%), total risk-based capital was 12.58% (requirement of 10.00%), and the Tier 1 leverage ratio was 9.14% (requirement of 5.00%). The tangible common equity ratio was 7.50% at December 31, 2012.
Conference Call
Sterling Bancorp will hold a conference call on Thursday, January 24, 2013, at 10:00 a.m. Eastern Time to discuss these financial results. To access the conference call live, interested parties may dial 800-230-1096 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 January 24, 2013, until 11:59 p.m. Eastern Time on February 7, 2013. To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 279219.
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.
Certain statements in this press release, including, but not limited to, statements as to future results of operations, liquidity, interest rate risk, operating expenses, financial position, dividends and other events, plans and objectives for future operations, capital, liquidity and growth, statements concerning the economic environment, asset quality and future levels of nonaccrual loans, charge-offs and provisions for loan losses, our ability to continue capitalizing on opportunities to serve the needs of customers in the New York metropolitan market and beyond, as well as the strength of that market, to redeploy assets from lower yielding investments into higher yielding loans, to improve our earning asset mix, net interest margin and demand deposit balances, to counter margin compression, to effectively provide a portfolio of financial solutions for businesses, to continue to achieve additional mortgage volume and higher mortgage banking income from the Universal acquisition or otherwise, and to expand on Universal's well-established presence and relationships in Brooklyn, the extent to which Brooklyn will experience continued growth and high demand for our financial products, our success in opening a Brooklyn location for Universal in the 2013 first quarter, the continuation of positive momentum for our business into 2013, whether our performance in 2013 will continue to benefit from the strengths and strategies that drove our results in 2012, our team's ability to grow the business both organically and through acquisitions, whether acquisitions will be available and permissible and, if so, whether they will be well executed and contribute to growth, whether our strategy will continue to be to redeploy our assets, while generating revenue from a diverse and balanced range of sources, and serving the needs of customers and, if so, whether we can execute that strategy and enhance shareholder value going forward, whether we can continue to shift our asset mix toward loans from investment securities, our ability to maintain underwriting discipline, 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, 2011.
STERLING BANCORP
Consolidated Financial Highlights
(Unaudited)
(dollars in thousands, except per share data)
Three Months Ended December Twelve Months Ended December
31, 31,
---------------------------- ----------------------------
2012 2011 2012 2011
---- ---- ---- ----
BALANCE SHEET HIGHLIGHTS
Period End Balances
Investment securities $683,245 $677,871 $683,245 $677,871
Loans held for sale 121,237 43,372 121,237 43,372
Loans held in portfolio,
net of unearned discount 1,649,753 1,473,309 1,649,753 1,473,309
Interest bearing deposits with other banks 112,886 126,448 112,886 126,448
Total earning assets 2,574,593 2,329,486 2,574,593 2,329,486
Allowance for loan losses 22,347 20,029 22,347 20,029
Total assets 2,749,711 2,493,297 2,749,711 2,493,297
Demand deposits 924,351 765,800 924,351 765,800
Savings, NOW and money market deposits 701,692 565,423 701,692 565,423
Time deposits 642,041 657,848 642,041 657,848
Customer repurchase agreements 32,950 47,313 32,950 47,313
Advances FHLB/Long-term borrowings 127,039 148,507 127,039 148,507
Shareholders' equity 228,090 220,821 228,090 220,821
Average Balances
Investment securities 718,377 751,832 755,399 850,997
Loans held for sale 84,051 34,107 49,358 27,954
Loans held in portfolio,
net of unearned discount 1,659,001 1,447,410 1,534,478 1,351,407
Interest bearing deposits with other banks 65,532 213,713 58,836 93,561
Total earning assets 2,534,429 2,455,554 2,406,089 2,332,689
Total assets 2,708,674 2,637,788 2,576,812 2,508,184
Demand deposits 849,094 711,011 782,771 596,608
Savings, NOW and money market deposits 686,271 611,691 653,292 596,007
Time deposits 690,283 788,800 645,745 729,053
Customer repurchase agreements 39,079 45,328 39,318 42,911
Advances FHLB/Long-term borrowings 127,165 148,630 139,067 155,332
Shareholders' equity 233,856 218,728 227,619 224,820
ASSET QUALITY HIGHLIGHTS
Period End
Net charge-offs $2,278 $2,518 $7,725 $10,184
Nonaccrual loans 5,922 6,358 5,922 6,358
Other real estate owned 1,452 1,929 1,452 1,929
Nonperforming assets 7,374 8,287 7,374 8,287
Nonaccrual loans/loans (1) 0.33% 0.42% 0.33% 0.42%
Nonperforming assets/assets 0.27% 0.33% 0.27% 0.33%
Allowance for loan losses/loans (2) 1.35% 1.36% 1.35% 1.36%
Allowance for loan losses/nonaccrual loans 377.36% 315.02% 377.36% 315.02%
CAPITAL RATIOS
Period End
Tier 1 risk based 11.49% 12.61% 11.49% 12.61%
Total risk based 12.58% 13.71% 12.58% 13.71%
Leverage 9.14% 9.02% 9.14% 9.02%
Equity/ assets 8.30% 8.86% 8.30% 8.86%
Tangible common equity 7.50% 8.01% 7.50% 8.01%
Book value per common share $7.37 $7.14 $7.37 $7.14
Return on average equity 8.85% 9.68% 8.79% 7.83%
Return on average tangible equity 9.84% 10.82% 9.80% 8.72%
(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)
December 31,
------------
2012 2011
---- ----
ASSETS
Cash and due from banks $38,944 $31,046
Interest-bearing deposits with other banks 112,886 126,448
Investment securities
Available for sale (at estimated fair value) 296,837 270,014
Held to maturity (at amortized cost) 386,408 407,857
Total investment securities 683,245 677,871
------- -------
Loans held for sale 121,237 43,372
------- ------
Loans held in portfolio, net of unearned discounts 1,649,753 1,473,309
Less allowance for loan losses 22,347 20,029
Loans held in portfolio, net 1,627,406 1,453,280
--------- ---------
Federal Reserve Bank and Federal Home Loan Bank stock, at cost 7,472 8,486
Customers' liability under acceptances - 4
Goodwill 22,901 22,901
Premises and equipment, net 22,578 23,625
Other real estate 1,452 1,929
Accrued interest receivable 6,853 6,838
Cash surrender value of life insurance policies 54,553 53,446
Other assets 50,184 44,051
$2,749,711 $2,493,297
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Demand $924,351 $765,800
Savings, NOW and money market 701,692 565,423
Time 642,041 657,848
Total deposits 2,268,084 1,989,071
Securities sold under agreements to repurchase - customers 32,950 47,313
Securities sold under agreements to repurchase - dealers - 5,000
Commercial paper and other short-term borrowings 15,345 13,485
Advances - FHLB 101,265 122,733
Long-term borrowings - subordinated debentures 25,774 25,774
Acceptances outstanding - 4
Accrued interest payable 649 1,064
Accrued expenses and other liabilities 77,554 68,032
Total liabilities 2,521,621 2,272,476
Shareholders' equity 228,090 220,821
$2,749,711 $2,493,297
========== ==========
MEMORANDA
Available for sale securities - amortized cost $291,574 $271,729
Held to maturity securities - estimated fair value 403,218 425,775
Shares outstanding
Common issued 35,263,768 35,225,110
Common in treasury 4,307,972 4,300,278
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 Income
(Unaudited)
(dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
2012 2011 2012 2011
---- ---- ---- ----
INTEREST INCOME
Loans $22,758 $20,245 $83,982 $75,251
Investment securities - available for sale 1,946 2,333 9,172 10,453
Investment securities - held to maturity 2,612 3,133 11,196 13,363
FRB and FHLB stock 127 130 409 371
Deposits with other banks 39 135 136 227
Total interest income 27,482 25,976 104,895 99,665
------ ------ ------- ------
INTEREST EXPENSE
Savings, NOW and money market deposits 655 703 2,586 2,855
Time deposits 1,023 1,371 4,151 5,583
Securities sold u/a/r - customers 34 41 141 186
Securities sold u/a/r - dealers - 17 31 66
Federal funds purchased 2 - 22 14
Commercial paper and other
short-term borrowings 12 9 43 45
Advances - FHLB 419 497 1,913 2,144
Long-term subordinated debentures 524 524 2,094 2,094
Total interest expense 2,669 3,162 10,981 12,987
----- ----- ------ ------
Net interest income 24,813 22,814 93,914 86,678
Provision for loan losses 2,500 3,000 10,250 12,000
Net interest income after provision for loan losses 22,313 19,814 83,664 74,678
------ ------ ------ ------
NONINTEREST INCOME
Accounts receivable management/
factoring commissions and other fees 3,947 5,560 19,131 22,371
Service charges on deposit accounts 1,333 1,269 5,301 5,093
Trade finance income 460 487 1,922 2,222
Other customer related service charges and fees 286 235 1,001 943
Mortgage banking income 2,977 1,047 10,275 6,315
Income from life insurance policies 276 280 1,315 1,140
Securities gains 323 257 1,813 2,491
Gain(Loss) on sale of OREO 14 - (61) -
Other income 25 64 76 323
Total noninterest income 9,641 9,199 40,773 40,898
----- ----- ------ ------
NONINTEREST EXPENSES
Salaries 11,774 11,040 45,530 43,748
Employee benefits 3,824 3,448 14,902 13,898
Total personnel expense 15,598 14,488 60,432 57,646
Occupancy and equipment expenses, net 3,644 3,391 13,689 13,248
Advertising and marketing 623 713 2,815 2,792
Professional fees 1,347 1,771 4,841 5,219
Communications 521 442 2,029 1,756
Deposit insurance 561 543 2,229 2,747
Other expenses 2,579 3,191 9,849 10,376
Total noninterest expenses 24,873 24,539 95,884 93,784
------ ------ ------ ------
Income before income taxes 7,081 4,474 28,553 21,792
Provision(Benefit) for income taxes 1,881 (864) 8,537 4,196
Net income 5,200 5,338 20,016 17,596
Dividends on preferred shares and accretion - - - 2,074
--- --- --- -----
Net income available to
common shareholders $5,200 $5,338 $20,016 $15,522
Page 9 of 16
STERLING BANCORP
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share data)
(continued)
Three Months Ended December Twelve Months Ended
31, December 31,
--------------------------- -------------------
2012 2011 2012 2011
---- ---- ---- ----
Average number of common shares outstanding
Basic 30,857,367 30,789,539 30,828,293 30,038,047
Diluted 30,857,367 30,789,539 30,828,293 30,038,047
Net income available to common
shareholders per average common share
Basic $0.17 $0.17 $0.65 $0.51
Diluted 0.17 0.17 0.65 0.51
Dividends per common share 0.09 0.09 0.36 0.36
Page 10 of 16
STERLING BANCORP
Consolidated Statements of Comprehensive (Loss) Income
(Unaudited)
(dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- --------------------
2012 2011 2012 2011
---- ---- ---- ----
Net income $5,200 $5,338 $20,016 $17,596
Other comprehensive (loss) income,
net of tax:
Unrealized holding gains on securities
arising during the period 139 1,502 4,878 244
Reclassification adjustment for securities
gains included in net income (179) (547) (1,006) (1,382)
Pension liability adjustment - net actuarial
losses (8,438) (2,006) (8,438) (2,006)
Amortization of:
Prior service cost 5 9 21 35
Net actuarial losses 626 514 2,270 1,780
Comprehensive (loss) income $(2,647) $4,810 $17,741 $16,267
STERLING BANCORP
Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
(dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- --------------------
2012 2011 2012 2011
---- ---- ---- ----
Balance, at beginning of period $233,436 $218,685 $220,821 $222,742
Net income for period 5,200 5,338 20,016 17,596
Common shares issued - - 375 36,454
compensation expense 85 107 360 394
Preferred shares redeemed in connection
with the TARP Capital Purchase Program - - - (42,000)
Repurchase of warrant - - - (945)
Cash dividends - common shares (2,784) (2,781) (11,132) (11,122)
Cash dividends - preferred shares - - - (945)
Surrender of shares issued under
incentive compensation plan - - (75) (24)
Unrealized holding gains on securities
arising during the period 139 1,502 4,878 244
Reclassification adjustment for securities
gains included in net income (179) (547) (1,006) (1,382)
Pension liability adjustment - net actuarial
losses (8,438) (2,006) (8,438) (2,006)
Amortization of:
Prior service cost 5 9 21 35
Net actuarial losses 626 514 2,270 1,780
Balance, at end of period $228,090 $220,821 $228,090 $220,821
Page 11 of 16
STERLING BANCORP
Average Balance Sheets [1]
(Unaudited)
(dollars in thousands)
Three Months Ended
------------------
December 31, 2012 December 31, 2011
----------------- -----------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- ---- ------- -------- ----
Assets
Interest-bearing deposits with other banks $65,532 $39 0.24% $213,713 $135 0.25%
Investment Securities
Available for sale - taxable 315,269 1,780 2.26 305,542 2,125 2.78
Held to maturity - taxable 250,624 1,229 1.96 288,493 1,743 2.42
Tax-exempt [2] 152,484 2,383 6.25 157,797 2,461 6.24
Total investment securities 718,377 5,392 3.00 751,832 6,329 3.37
------- ----- ------- -----
FRB and FHLB stock [2] 7,468 129 6.88 8,492 130 6.17
Loans, net of unearned discount [3] 1,743,052 22,758 5.20 1,481,517 20,245 5.64
Total Interest-Earning Assets [2] 2,534,429 28,318 4.43% 2,455,554 26,839 4.43%
------ ==== ------ ====
Cash and due from banks 41,235 44,890
Allowance for loan losses (23,701) (20,849)
Goodwill 22,901 22,901
Other 133,810 135,292
Total Assets $2,708,674 $2,637,788
Liabilities and Shareholders' Equity
Interest-bearing deposits
Domestic
Savings $24,811 1 0.02% $18,545 1 0.03%
NOW 220,227 60 0.11 203,280 83 0.16
Money market 441,233 594 0.54 389,866 619 0.63
Time 690,283 1,023 0.59 788,800 1,371 0.69
Total Interest-Bearing Deposits 1,376,554 1,678 0.48 1,400,491 2,074 0.59
--------- ----- --------- -----
Borrowings
Securities sold u/a/r - customers 39,079 34 0.35 45,328 41 0.36
Securities sold u/a/r - dealers - - - 5,000 17 1.30
Federal funds purchased 3,740 2 0.22 - - -
Commercial paper and other
short-term borrowings 16,167 12 0.29 16,827 9 0.23
Advances - FHLB 101,391 419 1.65 122,856 497 1.61
Long-term borrowings - sub debt 25,774 524 8.38 25,774 524 8.38
Total Borrowings 186,151 991 2.13 215,785 1,088 2.02
------- --- ------- -----
Total Interest-Bearing Liabilities 1,562,705 2,669 0.68% 1,616,276 3,162 0.78%
----- ==== ----- ====
Noninterest-bearing demand deposits 849,094 711,011
------- -------
Total including noninterest-bearing
demand deposits 2,411,799 2,669 0.45% 2,327,287 3,162 0.56%
----- ==== ----- ====
Other liabilities 63,019 91,773
Total Liabilities 2,474,818 2,419,060
Shareholders' equity 233,856 218,728
Total Liabilities and Shareholders' Equity $2,708,674 $2,637,788
Net interest income/spread [2] 25,649 3.75% 23,677 3.65%
==== ====
Net yield on interest-earning assets [2] 4.00% 3.90%
==== ====
Less: Tax-equivalent adjustment 836 863
Net interest income $24,813 $22,814
======= =======
[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)
Twelve Months Ended
December 31, 2012 December 31, 2011
----------------- -----------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- ---- ------- -------- ----
Assets
Interest-bearing deposits with other banks $58,836 $136 0.23% $93,561 $227 0.24%
Investment Securities
Available for sale - taxable 344,634 8,453 2.45 371,377 9,379 2.53
Held to maturity - taxable 255,878 5,622 2.20 322,312 8,078 2.51
Tax-exempt [2] 154,887 9,682 6.25 157,308 9,784 6.22
Total investment securities 755,399 23,757 3.14 850,997 27,241 3.20
------- ------ ------- ------
FRB and FHLB stock [2] 8,018 413 5.14 8,770 374 4.27
Loans, net of unearned discount [3] 1,583,836 83,982 5.56 1,379,361 75,251 5.81
Total Interest-Earning Assets [2] 2,406,089 108,288 4.64% 2,332,689 103,093 4.58%
------- ==== ------- ====
Cash and due from banks 38,180 39,734
Allowance for loan losses (22,444) (19,951)
Goodwill 22,901 22,901
Other 132,086 132,811
Total Assets $2,576,812 $2,508,184
Liabilities and Shareholders' Equity
Interest-bearing deposits
Domestic
Savings $21,796 4 0.02% $18,474 8 0.04%
NOW 218,021 258 0.12 210,443 372 0.18
Money market 413,475 2,324 0.56 367,090 2,475 0.67
Time 645,745 4,151 0.64 729,053 5,583 0.77
Total Interest-Bearing Deposits 1,299,037 6,737 0.52 1,325,060 8,438 0.64
--------- ----- --------- -----
Borrowings
Securities sold u/a/r - customers 39,318 141 0.36 42,911 186 0.43
Securities sold u/a/r - dealers 2,637 31 1.18 5,186 66 1.27
Federal funds purchased 10,093 22 0.22 10,926 14 0.13
Commercial paper and other
short-term borrowings 14,826 43 0.29 18,120 45 0.25
Advances - FHLB 113,293 1,913 1.69 129,558 2,144 1.66
Long-term borrowings - sub debt 25,774 2,094 8.38 25,774 2,094 8.38
Total Borrowings 205,941 4,244 2.07 232,475 4,549 1.96
------- ----- ------- -----
Total Interest-Bearing Liabilities 1,504,978 10,981 0.73% 1,557,535 12,987 0.83%
------ ==== ------ ====
Noninterest-bearing demand deposits 782,771 596,608
------- -------
Total including noninterest-bearing
demand deposits 2,287,749 10,981 0.50% 2,154,143 12,987 0.61%
------ ==== ------ ====
Other liabilities 61,444 129,221
Total Liabilities 2,349,193 2,283,364
Shareholders' equity 227,619 224,820
Total Liabilities and Shareholders' Equity $2,576,812 $2,508,184
Net interest income/spread [2] 97,307 3.91% 90,106 3.75%
==== ====
Net yield on interest-earning assets [2] 4.17% 4.01%
==== ====
Less: Tax-equivalent adjustment 3,393 3,428
Net interest income $93,914 $86,678
======= =======
[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
December 31, 2012
Volume Rate Net [2]
------ ---- -------
INTEREST INCOME
Interest-bearing deposits with other banks $(91) $(5) $(96)
Investment Securities
Available for sale - taxable 66 (411) (345)
Held to maturity - taxable (210) (304) (514)
Tax-exempt (82) 4 (78)
Total investment securities (226) (711) (937)
---- ---- ----
FRB and FHLB stock (16) 15 (1)
Loans, net of unearned discounts [3] 4,022 (1,509) 2,513
TOTAL INTEREST INCOME $3,689 $(2,210) $1,479
====== ======= ======
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings $ - $ - $ -
NOW 6 (29) (23)
Money market 73 (98) (25)
Time (161) (187) (348)
Total interest-bearing deposits (82) (314) (396)
--- ---- ----
Borrowings
Securities sold under agreements to repurchase - customers (6) (1) (7)
Securities sold under agreements to repurchase - dealers (17) - (17)
Federal funds purchased 2 - 2
Commercial paper and other short-term borrowings - 3 3
Advances - FHLB (90) 12 (78)
Long-term borrowings - subordinated debentures - - -
Total borrowings (111) 14 (97)
---- --- ---
TOTAL INTEREST EXPENSE $(193) $(300) $(493)
===== ===== =====
NET INTEREST INCOME $3,882 $(1,910) $1,972
====== ======= ======
[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 securities sold u/a/r -dealers and Federal funds purchased 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)
Twelve Months Ended
December 31, 2012
Volume Rate Net [2]
------ ---- -------
INTEREST INCOME
Interest-bearing deposits with other banks $(82) $(9) $(91)
Investment Securities
Available for sale - taxable (635) (291) (926)
Held to maturity - taxable (1,527) (929) (2,456)
Tax-exempt (144) 42 (102)
Total investment securities (2,306) (1,178) (3,484)
------ ------ ------
FRB and FHLB stock (33) 72 39
--- --- ---
Loans, net of unearned discounts [3] 12,173 (3,442) 8,731
TOTAL INTEREST INCOME $9,752 $(4,557) $5,195
====== ======= ======
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings $1 $(5) $(4)
NOW 15 (129) (114)
Money market 290 (441) (151)
Time (568) (864) (1,432)
Total interest-bearing deposits (262) (1,439) (1,701)
---- ------ ------
Borrowings
Securities sold under agreements to repurchase - customers (14) (31) (45)
Securities sold under agreements to repurchase - dealers (30) (5) (35)
Federal funds purchased (1) 9 8
Commercial paper and other short-term borrowings (9) 7 (2)
Advances - FHLB (269) 38 (231)
Long-term borrowings - subordinated debentures - - -
Total borrowings (323) 18 (305)
---- --- ----
TOTAL INTEREST EXPENSE $(585) $(1,421) $(2,006)
===== ======= =======
NET INTEREST INCOME $10,337 $(3,136) $7,201
======= ======= ======
[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 16
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.
December 31,
------------
2012 2011
---- ----
Tangible common equity
Total shareholders' equity $228,090 $220,821
Less: Goodwill and other intangible assets 23,674 22,975
Total tangible common equity $204,416 $197,846
======== ========
Tangible assets
Total assets $2,749,711 $2,493,297
Less: Goodwill and other intangible assets 23,674 22,975
Total tangible assets $2,726,037 $2,470,322
========== ==========
Tangible common equity ratio 7.50% 8.01%
==== ====
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2012 2011 2012 2011
---- ---- ---- ----
Average tangible equity
Average shareholders' equity $233,856 $218,728 $227,619 $224,820
Less:
Average goodwill and other intangible assets 23,683 22,975 23,273 22,975
Average tangible equity $210,173 $195,753 $204,346 $201,845
Return on average tangible equity
Net income (annualized)/average tangible equity 9.84% 10.82% 9.80% 8.72%
==== ===== ==== ====
Page 16 of 16
SOURCE Sterling Bancorp
