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Sterling Bancorp Announces Results for the First Fiscal Quarter Ended December 31, 2013

Merger of Provident New York Bancorp and Legacy Sterling Bancorp Creates Larger, More Diversified Full Service Commercial Bank With $6.7 Billion in Total Assets Serving the Greater New York Metropolitan Region

MONTEBELLO, NY -- (Marketwired) -- 02/04/14 -- Sterling Bancorp (NYSE: STL), the parent company of Sterling National Bank, today announced results for the quarter ended December 31, 2013. Net loss for the quarter, including a number of merger-related expenses and other charges, was ($14.0 million), or ($0.20) per diluted share, compared to net income of $7.0 million, or $0.16 per diluted share for the same quarter last year; and net income of $5.3 million, or $0.12 per diluted share for the linked quarter ended September 30, 2013.

Excluding the impact of the charges discussed below and which are included in non-interest expense, net income for the first quarter was $9.4 million, or $0.13 per diluted share. Results for the quarter were impacted by pre-tax merger-related expenses of $9.1 million associated with the legacy Sterling Bancorp transaction; a pre-tax charge for asset write-downs, retention and severance compensation of $22.2 million included in other non-interest expense, a pre-tax charge on settlement of a portion of defined benefit pension plan obligations of $2.7 million included in compensation and benefits and pre-tax amortization of non-compete agreements of approximately $1.0 million included in amortization of intangibles. Results for the quarter were also impacted by a net loss on sale of securities of $645 thousand. See the reconciliation of these non-GAAP measures on page 10.

President's Comments
Jack Kopnisky, President and CEO, commented: "During the quarter we continued to execute our strategy and made significant progress towards achieving our goal of building a high performing regional bank. We successfully completed our merger with legacy Sterling Bancorp on October 31, 2013 and are well-positioned to deliver on the full potential of the merger by achieving superior growth and profitability as a larger, more diversified company going forward. As of December 31, 2013, our total assets were $6.7 billion, total loans were $4.2 billion and total deposits were $4.9 billion.

"Core earnings results for the quarter were strong and included only two months as a combined institution. Our loan portfolio has a diverse mix of loans by type and asset class. Approximately 42% of our loan portfolio consists of commercial and industrial loans, 38% consists of commercial real estate loans and 20% consists of residential mortgage and other consumer loans. We continue to execute our differentiated, single point of contact distribution strategy and are now organized into 21 commercial relationship teams and 46 financial centers covering the greater New York metropolitan region. Significant opportunities abound across all of our markets to deliver our full suite of lending and deposit products to our core target of small and middle market clients.

"We have also diversified our mix of fee-based revenues and have expanded capabilities across a broad range of fee-based businesses including mortgage banking, factoring, payroll finance, wealth management and title insurance. Excluding the impact of net loss on sale of securities, non-interest income for the quarter was $9.8 million, which represented 17.6% of core total revenue. Our objective is to continue growing these fee-based businesses targeting a non-interest income to core total revenue ratio of 20-25%.

"Our core operating efficiency ratio was 65.4%. This ratio does not yet reflect the significant cost saving opportunities we have identified as a result of the merger and will begin to realize in the second fiscal quarter of 2014. Our long-term core operating efficiency ratio target of below 60% upon the phase-in of merger-related cost savings remains unchanged.

"Our credit quality has continued to show positive trends across all of our portfolios. For the quarter ended December 31, 2013, net charge-offs against the allowance for loan losses were $1.3 million compared to $2.2 million in the prior quarter. We acquired $1.7 billion of loans in the merger with legacy Sterling Bancorp which were recorded at fair value at the acquisition date. At December 31, 2013, $1.5 billion of these loans carry no allowance for loan losses. The fair value adjustment recorded on the legacy Sterling Bancorp merger transaction was $25.4 million consisting of an interest rate and credit mark. The allowance for loan losses to total loans, excluding loans acquired in the Gotham and legacy Sterling Bancorp transactions that were recorded at fair value at the acquisition date and continue to carry no allowance, was 1.24%.

"Our capital and liquidity positions remain strong. Our Tier 1 leverage ratio was 10.58% at Sterling National Bank and our consolidated tangible equity to tangible assets ratio was 7.78%. We have ample capital and liquidity to support our growth and execute our strategy. I am pleased to announce that consistent with the announcement of the merger, our Board of Directors has declared a dividend on our common stock of $0.07 per share payable February 24, 2014."

Key Highlights

  • Total loans including loans held for sale were $4.2 billion at December 31, 2013.
  • Tax equivalent net interest margin was 3.58% for the first quarter of fiscal 2014 compared to 3.23% in the linked quarter and 3.37% in the first quarter of fiscal 2013.
  • Total non-interest income for the quarter was $9.8 million, excluding net loss on sale of securities, which represented 17.6% of core total revenue.
  • Core operating efficiency ratio was 65.4%. See the reconciliation of this non-GAAP financial measure on page 10.
  • The allowance for loan losses increased to $30.6 million at December 31, 2013. The allowance as a percentage of non-performing loans was 79.6% at December 31, 2013 as compared to 107.3% at September 30, 2013, due to non-performing loans acquired in the merger transaction with legacy Sterling Bancorp, which are covered by the fair value adjustment recorded at the acquisition date.
  • Non-performing loans were $38.4 million at December 31, 2013 and represented 0.93% of total loans.
  • Provision for loan losses for the quarter was $3.0 million compared to $2.7 million in the linked quarter.

Net Interest Income and Margin
First quarter fiscal 2014 compared to the first quarter fiscal 2013
Net interest income was $45.9 million, up $18.0 million compared to the first quarter of fiscal 2013. This was mainly the result of higher average loans and investment securities balances and an increase in net interest margin due to the merger transaction with legacy Sterling Bancorp. The tax-equivalent yield on investments increased 28 basis points and yield on loans decreased 16 basis points. Yield on loans included $2.0 million in accretion of the fair value discount associated with the loans acquired from Gotham and legacy Sterling Bancorp. The cost of total deposits was 17 basis points and the cost of borrowings was 2.80%, which included $1.5 million in interest expense associated with our senior notes offering which was completed in July 2013. The net interest margin on a tax-equivalent basis was 3.58% compared to 3.37% for the same period a year ago.

First quarter fiscal 2014 compared with linked quarter ended September 30, 2013
Net interest income increased $17.8 million compared to the linked quarter ended September 30, 2013. The increase in net interest income for the first quarter was due to higher average loans and investment securities balances and an increase in net interest margin due to the merger with legacy Sterling Bancorp. Average earning assets for the quarter were $5.2 billion and tax-equivalent yield on interest earning assets was 4.10%. Tax-equivalent net interest margin increased to 3.58% from 3.23% in the linked quarter.

Non-interest Income
First quarter fiscal 2014 compared with first quarter fiscal 2013
Excluding net gains and losses on sale of securities, non-interest income increased $3.6 million to $9.8 million for the first quarter of fiscal 2014. The increase was mainly due to an increase in fees associated with service charges on deposits, fees generated in factoring and payroll finance businesses and gain on sale income in mortgage banking. The Company realized a net loss on sale of securities of $645 thousand for the first quarter of fiscal 2014 compared to net gain on sale of securities of $1.4 million in the year ago quarter.

First quarter fiscal 2014 compared with linked quarter ended September 30, 2013
Excluding net gains and losses on sale of securities, non-interest income increased $5.0 million to $9.8 million for the first fiscal quarter of 2014. The increase was mainly due to the factors discussed above. The Company realized a net gain on sale of securities of $1.8 million in the linked quarter ended September 30, 2013.

Non-interest Expense
First quarter fiscal 2014 compared with first quarter fiscal 2013
Non-interest expense increased $50.4 million relative to the first quarter of fiscal 2013 to $73.0 million, principally the result of increased compensation and benefits expense and occupancy and office operations expense due to the merger transaction with legacy Sterling Bancorp. Expenses for the quarter included merger-related expenses of $9.1 million, a charge for asset write-downs, retention and severance compensation of $22.2 million, a charge on settlement of a portion of defined benefit pension plan obligations of $2.7 million and amortization of non-compete agreements of approximately $1.0 million. The charge for asset write-downs, retention and severance compensation includes approximately $11.0 million of write-downs of legacy Provident New York Bancorp fixed assets due mainly to the re-alignment and consolidation of office locations and financial centers as a result of the merger and a charge related to the write-off of the naming rights to Provident Bank Ballpark. The charge on settlement of defined benefit pension plans represented the acceleration of future amortization of items recorded in accumulated other comprehensive loss.

First quarter fiscal 2014 compared with the linked quarter ended September 30, 2013
Non-interest expense increased $49.6 million compared to the linked quarter to $73.0 million, due to the factors discussed above.

Income Taxes
In the first quarter of fiscal 2014 the Company recorded an income tax benefit at a rate of 33.2% compared to an effective tax expense rate of 38.3% in the linked quarter and 30.4% for the same period in fiscal 2013. Income tax benefit for the period was impacted by the Company's pre-tax loss as well as a portion of merger-related expenses that are anticipated will not be deductible.

Credit Quality
Non-performing loans increased $11.5 million to $38.4 million at December 31, 2013 compared to $26.9 million at September 30, 2013. This increase is a result of non-performing loans acquired in the merger transaction with legacy Sterling Bancorp. Net charge-offs for the first quarter that were charged to the allowance for loan losses were $1.3 million compared to $2.2 million in the linked quarter. The allowance for loan losses at December 31, 2013 was $30.6 million, which represented 79.6% of non-performing loans and 0.74% of our total loan portfolio. The increase in the allowance for loan losses was related to the higher balance of loans outstanding at December 31, 2013, which included approximately $153 million in loans acquired from legacy Sterling Bancorp that were included in the calculation of the allowance for loan losses. The allowance for loan losses to total loans, excluding loans acquired in the Gotham and legacy Sterling Bancorp transactions that were recorded at fair value at the acquisition date and continue to carry no allowance, was 1.24% at December 31, 2013. Please refer to the Company's reconciliation of this non-GAAP measure on page 9.

Key Balance Sheet Changes Year-to-Date at December 31, 2013

  • Total assets were $6.7 billion.
  • Total loans including loans held for sale were $4.2 billion.
  • Commercial and industrial loans represented 41.6%, commercial real estate loans represented 37.8%, consumer and residential mortgage loans represented 18.3%, and acquisition, construction and development loans represented 2.3% of the total loan portfolio.
  • Securities, excluding FHLB Stock, were $1.7 billion at and represented 24.9% of total assets.
  • Total deposits were $4.9 billion.
  • Transaction deposits were $2.4 billion and represented 47.8% of total deposits.
  • Tangible book value per share was $5.77.

Capital
The Company's stockholders' equity was $925.1 million at December 31, 2013, an increase of $442.2 million relative to the linked quarter. The increase was mainly the result of the issuance of 39.1 million common shares in connection with the acquisition of legacy Sterling Bancorp. This increase was partially offset by an increase in accumulated other comprehensive loss of $4.1 million due to a decline in the fair value of the investment securities portfolio during the quarter. Retained earnings decreased by $14.0 million due to the net loss incurred in the quarter.

Tangible book value per share decreased from $7.08 at September 30, 2013 to $5.77 at December 31, 2013. Total goodwill and other intangible assets were $440.5 million at December 31, 2013, an increase of $271.5 million over the linked quarter. For the quarter ended December 31, 2013, basic and diluted weighted average common shares outstanding increased to 70.5 million, compared to 43.7 million, basic and 43.9 million diluted shares, respectively, for the quarter ended September 30, 2013. The increase in basic and diluted shares is mainly the result of the issuance of 39.1 million shares of common stock in October 2013 in connection with the acquisition of legacy Sterling Bancorp. Total shares outstanding at December 31, 2013 were approximately 84.0 million.

Consolidated tangible equity to tangible assets was 7.78% at December 31, 2013 and Sterling National Bank remained well capitalized with a Tier 1 leverage ratio of 10.58%.

About Sterling Bancorp
Headquartered in Montebello, N.Y., Sterling Bancorp is the holding company for Sterling National Bank, a growing financial services firm with $6.7 billion in assets that specializes in the delivery of service and solutions to business owners, their families, and consumers in communities within the greater New York City metropolitan region through teams of dedicated and experienced relationship managers. Sterling National Bank offers a complete line of commercial, business, and consumer banking products and services. For more information, visit the Sterling Bancorp web site at www.sterlingbancorp.com.

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS
In addition to historical information, this earnings release may contain forward-looking statements for purposes of applicable securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties. There are a number of important factors described in documents previously filed by the Company with the Securities and Exchange Commission, and other factors that could cause the Company's actual results to differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. In addition to factors previously disclosed in reports filed with the Securities and Exchange Commission, the following factors, among others, could cause actual results to differ materially from forward-looking statements: difficulties and delays in integrating the combined businesses of Provident New York Bancorp and Sterling Bancorp (the "Merger") or fully realizing cost savings and other benefits; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; the reaction to the Merger of the companies' customers, employees and counterparties; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms. These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. Actual results or future events could differ, possibly materially, from those that we anticipated in our forward-looking statements, and future results could differ materially from our historical performance. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2013. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the 10-Q to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.


Sterling Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(unaudited, in thousands, except share and per share data)

                                       12/31/2013   9/30/2013    12/31/2012
                                      -----------  -----------  -----------
Assets:
Cash and due from banks               $   152,662  $   113,090  $   160,241
Investment securities                   1,661,650    1,208,392    1,131,172
Loans held for sale                        24,483        1,011        5,423
Loans:
  Residential mortgage                    527,425      400,009      352,014
  Commercial real estate                1,568,895    1,277,037    1,136,965
  Commercial and industrial             1,727,037      439,787      376,052
  Acquisition, development and
   construction                            95,787      102,494      122,518
  Consumer                                207,997      193,571      205,580
                                      -----------  -----------  -----------
    Total loans, gross                  4,127,141    2,412,898    2,193,129
  Allowance for loan losses               (30,612)     (28,877)     (28,114)
                                      -----------  -----------  -----------
    Total loans, net                    4,096,529    2,384,021    2,165,015
Federal Home Loan Bank stock, at cost      21,891       24,312       19,246
Accrued interest receivable                16,056       11,698       10,429
Premises and equipment, net                49,925       36,520       38,086
Goodwill                                  387,517      163,117      163,247
Other intangibles                          53,020        5,891        6,926
Bank owned life insurance                 117,030       60,914       59,526
Other real estate owned                    11,751        6,022        7,053
Other assets                               74,923       34,184       23,150
                                      -----------  -----------  -----------
    Total assets                      $ 6,667,437  $ 4,049,172  $ 3,789,514
                                      ===========  ===========  ===========
Liabilities:
Deposits                              $ 4,920,564  $ 2,962,294  $ 2,904,384
FHLB and other borrowings                 571,628      462,953      345,411
Senior notes                               98,123       98,033           --
Subordinated debentures                    26,519           --           --
Mortgage escrow funds                      13,460       12,646       19,577
Other liabilities                         112,034       30,380       26,259
                                      -----------  -----------  -----------
    Total liabilities                   5,742,328    3,566,306    3,295,631
Stockholders' equity                      925,109      482,866      493,883
                                      -----------  -----------  -----------
    Total liabilities and
     stockholders' equity             $ 6,667,437  $ 4,049,172  $ 3,789,514
                                      ===========  ===========  ===========

Shares of common stock outstanding at
 period end                            83,955,647   44,351,046   44,348,787
Book value per share                  $     11.02  $     10.89  $     11.14
Tangible book value per share                5.77         7.08         7.30



Sterling Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)

                                                For the Quarter Ended
                                        ------------------------------------
                                         12/31/2013   9/30/2013   12/31/2012
                                        -----------  ----------- -----------
Interest and dividend income:
  Loans and loan fees                   $    43,288  $    27,723 $    27,071
  Securities taxable                          6,903        4,748       4,284
  Securities non-taxable                      2,161        1,235       1,457
  Other earning assets                          359          197         333
                                        -----------  ----------- -----------
  Total interest income                      52,711       33,903      33,145
Interest expense:
  Deposits                                    1,834        1,051       2,097
  Borrowings                                  5,001        4,744       3,125
                                        -----------  ----------- -----------
Total interest expense                        6,835        5,795       5,222
                                        -----------  ----------- -----------
Net interest income                          45,876       28,108      27,923
Provision for loan losses                     3,000        2,700       2,950
                                        -----------  ----------- -----------
Net interest income after provision for
 loan losses                                 42,876       25,408      24,973
Non-interest income:
  Accounts receivable / factoring
   commissions and other fees                 2,226           --          --
  Mortgage banking income                     1,616          297         746
  Deposit fees and service charges            3,942        2,835       2,778
  Net (loss) gain on sale of securities        (645)       1,801       1,416
  Investment management fees                    540          673         705
  Bank owned life insurance                     740          502         509
  Other                                         729          492       1,505
                                        -----------  ----------- -----------
Total non-interest income                     9,148        6,600       7,659
Non-interest expense:
  Compensation and benefits                  23,554       12,409      12,299
  Stock-based compensation plans                991          513         500
  Occupancy and office operations             6,333        3,766       3,810
  Merger-related expenses                     9,068          714          --
  Advertising and promotion                     309          416         244
  Professional fees                           1,818          740       1,215
  Data and check processing                     595          460         649
  Amortization of intangible assets           1,875          310         261
  FDIC insurance and regulatory
   assessments                                1,164          664         718
  Other real estate owned expense               368          390         285
  Other                                      26,899        2,985       2,565
                                        -----------  ----------- -----------
Total non-interest expense                   72,974       23,367      22,546
                                        -----------  ----------- -----------
Income before income tax expense            (20,950)       8,641      10,086
Income tax expense                           (6,948)       3,312       3,066
                                        -----------  ----------- -----------
Net income                              $   (14,002) $     5,329 $     7,020
                                        ===========  =========== ===========
  Basic earnings per share              $     (0.20) $      0.12 $      0.16
  Diluted earnings per share                  (0.20)        0.12        0.16
  Dividends declared per share                   --         0.12        0.06
Weighted average common shares:
  Basic                                  70,493,305   43,742,903  43,637,315
  Diluted                                70,493,305   43,859,834  43,721,091



Sterling Bancorp and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)

                                 As of and for the Quarter Ended
                     -------------------------------------------------------
End of Period        12/31/2013   9/30/2013  6/30/2013  3/31/2013 12/31/2012
                     ----------  ---------- ---------- ---------- ----------
Total assets         $6,667,437  $4,049,172 $3,824,429 $3,710,440 $3,789,514
Securities available
 for sale             1,153,313     954,393    889,747    945,678    991,298
Securities held to
 maturity               508,337     253,999    175,977    183,535    139,874
Loans, gross (1)      4,127,141   2,412,898  2,336,534  2,204,555  2,193,129
Goodwill                387,517     163,117    163,117    163,117    163,247
Other intangibles        53,020       5,891      6,201      6,538      6,926
Deposits              4,920,564   2,962,294  2,739,214  2,799,658  2,904,384
Municipal deposits
 (included above)       673,656     757,066    465,566    537,070    538,212
Borrowings              696,270     560,986    552,805    367,976    345,411
Stockholders' equity    925,109     482,866    480,165    494,711    493,883
Tangible equity         484,572     313,858    310,847    325,056    323,710
Average Balances
Total assets         $6,013,816  $3,907,960 $3,745,356 $3,804,660 $3,792,201
Loans, gross:
Residential mortgage    491,231     379,640    366,823    360,840    344,064
Commercial real
 estate               1,466,986   1,247,055  1,175,094  1,138,333  1,107,779
Commercial and
 industrial           1,268,492     443,349    398,622    368,896    354,137
Acquisition,
 development and
 construction            98,691     104,856    114,286    122,937    138,881
Consumer                200,637     194,718    199,861    203,492    208,064
Loans, total (1)      3,526,037   2,369,618  2,254,686  2,194,498  2,152,925
Securities (taxable)  1,330,646     963,949    909,312    967,889    954,372
Securities (non-
 taxable)               250,520     157,480    184,325    181,803    174,201
Total earning assets  5,207,436   3,529,321  3,378,655  3,403,209  3,380,875
Deposits:
Non-interest bearing
 demand               1,361,622     669,067    625,684    641,194    649,077
Interest bearing
 demand                 619,746     426,602    461,390    508,129    469,180
Savings (including
 mortgage escrow
 funds)                 622,530     601,272    581,106    575,380    531,107
Money market          1,182,858     715,351    777,857    877,101    908,262
Certificates of
 deposit                565,462     335,616    338,017    355,917    380,244
Total deposits and
 mortgage escrow      4,352,218   2,747,908  2,784,054  2,957,721  2,937,870
Borrowings              709,125     653,147    440,579    345,717    345,951
Equity                  780,241     478,491    494,049    492,725    492,506
Tangible equity         432,703     309,327    324,540    322,683    319,783
Condensed Tax
 Equivalent Income
 Statement
Interest and
 dividend income     $   52,711  $   33,903 $   32,593 $   32,420 $   33,145
Tax equivalent
 adjustment*              1,164         666        808        802        785
Interest expense          6,835       5,795      4,276      4,601      5,222
                     ----------  ---------- ---------- ---------- ----------
Net interest income
 (tax equivalent)        47,040      28,774     29,125     28,621     28,708
Provision for loan
 losses                   3,000       2,700      3,900      2,600      2,950
                     ----------  ---------- ---------- ---------- ----------
Net interest income
 after provision for
 loan losses             44,040      26,074     25,225     26,021     25,758
Non-interest income       9,148       6,600      6,581      6,852      7,659
Non-interest expense     72,974      23,367     21,789     23,339     22,546
                     ----------  ---------- ---------- ---------- ----------
(Loss) income before
 income tax expense     (19,786)      9,307     10,017      9,534     10,871
Income tax (benefit)
 expense (tax
 equivalent)*            (5,784)      3,978      3,641      3,005      3,851
                     ----------  ---------- ---------- ---------- ----------
Net (loss) income    $  (14,002) $    5,329 $    6,376 $    6,529 $    7,020
                     ==========  ========== ========== ========== ==========
(1) Does not reflect allowance for loan losses of $30,612, $28,877, $28,374,
 $27,544, and $28,114.
*Tax exempt income assumed at a statutory 35% federal tax rate.



Sterling Bancorp and Subsidiaries
SELECTED FINANCIAL RATIOS
(unaudited, in thousands, except share and per share data)

                                   For the Quarter Ended
               ------------------------------------------------------------
Per Share Data  12/31/2013   9/30/2013   6/30/2013   3/31/2013   12/31/2012
               -----------  ----------- ----------- ----------- -----------
Basic earnings
 per share     $     (0.20) $      0.12 $      0.15 $      0.15 $      0.16
Diluted
 earnings per
 share               (0.20)        0.12        0.15        0.15        0.16
Dividends
 declared per
 share                  --         0.12        0.06        0.06        0.06
Tangible book
 value per
 share                5.77         7.08        7.01        7.33        7.30
Shares of
 common stock
 outstanding    83,955,647   44,351,046  44,353,276  44,353,276  44,348,787
Basic weighted
 average
 common shares
 outstanding    70,493,305   43,742,903  43,801,867  43,743,640  43,637,315
Diluted
 weighted
 average
 common shares
 outstanding    70,493,305   43,859,834  43,906,158  43,848,486  43,721,091
Performance
 Ratios
 (annualized)
Return on
 average
 assets              (0.92)%       0.54%       0.68%       0.70%       0.73%
Return on
 average
 equity              (7.12)%       4.42%       5.18%       5.37%       5.65%
Return on
 average
 tangible
 equity (1)         (12.84)%       6.83%       7.88%       8.21%       8.71%
Core operating
 efficiency
 (1)                  65.4%        64.7%       59.1%       67.4%       63.7%
Analysis of
 Net Interest
 Income
Yield on loans        4.88%        4.70%       4.80%       4.93%       5.04%
Yield on
 investment
 securities -
 tax
 equivalent(2)        2.57%        2.35%       2.38%       2.32%       2.29%
Yield on
 earning
 assets - tax
 equivalent(2)        4.10%        3.89%       3.97%       3.96%       3.98%
Cost of
 deposits             0.17%        0.15%       0.17%       0.22%       0.28%
Cost of
 borrowings           2.80%        2.88%       2.84%       3.49%       3.58%
Cost of
 interest
 bearing
 liabilities          0.73%        0.84%       0.66%       0.70%       0.79%
Net interest
 rate spread -
 tax
 equivalent
 basis(2)             3.37%        3.05%       3.31%       3.26%       3.19%
Net interest
 margin - tax
 equivalent
 basis(2)             3.58%        3.23%       3.46%       3.41%       3.37%
Capital
Tier 1
 leverage
 ratio - Bank
 only                10.58%        9.33%       8.49%       8.62%       8.23%
Tier 1 risk-
 based capital
 - Bank only   $   593,462  $   363,274 $   311,507 $   304,696 $   297,089
Total risk-
 based capital
 - Bank only       624,469      392,376     340,077     332,447     325,410
Tangible
 equity as a %
 of tangible
 assets -
 consolidated
 (1)                  7.78%        8.09%       8.50%       9.18%       8.94%
Asset Quality
Non-performing
 loans (NPLs)
 non-accrual   $    35,386  $    22,807 $    27,244 $    27,019 $    27,730
Non-performing
 loans (NPLs)
 still
 accruing            3,056        4,099       4,216       4,257       5,823
Other real
 estate owned       11,751        6,022       4,376       5,486       7,053
Non-performing
 assets (NPAs)      50,193       32,928      35,836      36,762      40.606
Net charge-
 offs                1,265        2,197       3,070       3,170       3,118
Net charge-
 offs as a %
 of average
 loans
 (annualized)         0.14%        0.37%       0.54%       0.58%       0.58%
NPLs as a % of
 total loans          0.93%        1.12%       1.35%       1.42%       1.53%
NPAs as a % of
 total assets         0.75%        0.81%       0.94%       0.99%       1.07%
Allowance for
 loan losses
 as a % of
 NPLs                 79.6%       107.3%       90.2%       88.1%       83.8%
Allowance for
 loan losses
 as a % of
 total loans          0.74%        1.20%       1.21%       1.25%       1.28%
Allowance for
 loan losses
 as a % of
 total loans,
 excluding
 Gotham and
 legacy
 Sterling
 loans(1)             1.24%        1.27%       1.30%       1.36%       1.41%
Special
 mention loans $    38,834  $    13,530 $    24,327 $    41,778 $    29,755
Substandard /
 doubtful
 loans              77,337       61,095      62,165      70,688      83,109
               -----------  ----------- ----------- ----------- -----------
(1) See reconciliation of non-GAAP measure on following page.
(2) Tax equivalent adjustment represents interest income earned on
 municipal securities divided by the applicable Federal tax rate of 35% for
 all periods presented.



Sterling Bancorp and Subsidiaries
NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands, except share and per share data)

                              As of and for the Quarter Ended
               ------------------------------------------------------------
                12/31/2013   9/30/2013   6/30/2013   3/31/2013   12/31/2012
               -----------  ----------- ----------- ----------- -----------
The Company provides supplemental reporting of non-GAAP measures as
 management believes this information is useful to investors.
The following table shows the reconciliation of stockholders' equity to
 tangible equity and the tangible equity ratio:
Total assets   $ 6,667,437  $ 4,049,172 $ 3,824,429 $ 3,710,440 $ 3,789,514
Goodwill and
 other
 intangibles      (440,537)    (169,008)   (169,318)   (169,655)   (170,173)
               -----------  ----------- ----------- ----------- -----------
Tangible
 assets          6,226,900    3,880,164   3,655,111   3,540,785   3,619,341
               -----------  ----------- ----------- ----------- -----------
Stockholders'
 equity            925,109      482,866     480,165     494,711     493,883
Goodwill and
 other
 intangibles      (440,537)    (169,008)   (169,318)   (169,655)   (170,173)
               -----------  ----------- ----------- ----------- -----------
Tangible
 stockholders'
 equity            484,572      313,858     310,847     325,056     323,710
               -----------  ----------- ----------- ----------- -----------
Shares of
 common stock
 outstanding
 at period end  83,955,647   44,351,046  44,353,276  44,353,276  44,348,787
Tangible
 equity as a %
 of tangible
 assets               7.78%        8.09%       8.50%       9.18%       8.94%
Tangible book
 value per
 share         $      5.77  $      7.08 $      7.01 $      7.33 $      7.30
The Company believes that tangible equity is useful as a tool to help
 assess a company's capital position.

The following table shows the reconciliation of return on average tangible
 equity:
Average
 stockholders'
 equity        $   780,241  $   478,491 $   494,049 $   492,725 $   492,506
Average
 goodwill and
 other`
 intangibles      (347,538)    (169,164)   (169,509)   (170,042)   (172,723)
               -----------  ----------- ----------- ----------- -----------
Average
 tangible
 stockholders'
 equity            432,703      309,327     324,540     322,683     319,783
               -----------  ----------- ----------- ----------- -----------
Net (loss)
 income            (14,002)       5,329       6,376       6,529       7,020
Net (loss)
 income, if
 annualized        (55,551)      21,142      25,574      26,479      27,851
Return on
 average
 tangible
 equity             (12.84)%       6.83%       7.88%       8.21%       8.71%
The Company believes that the return on average tangible stockholders'
 equity is useful as a tool to help assess a company's use of tangible
 equity.

The following table shows the reconciliation of the allowance for loan
 losses to total loans and to total loans excluding Gotham and legacy
 Sterling Bancorp loans:
Total loans    $ 4,127,141  $ 2,412,898 $ 2,336,534 $ 2,204,555 $ 2,193,129
Gotham loans      (117,046)    (133,493)   (152,825)   (176,383)   (194,518)
Legacy
 Sterling
 loans          (1,539,962)          --          --          --          --
               -----------  ----------- ----------- ----------- -----------
Total loans,
 excluding
 Gotham and
 legacy
 Sterling
 loans           2,470,133    2,279,405   2,183,709   2,028,172   1,998,611
Allowance for
 loan losses        30,612       28,877      28,374      27,544      28,114
Allowance for
 loan losses
 to total
 loans                0.74%        1.20%       1.21%       1.25%       1.28%
Allowance for
 loan losses
 to total
 loans,
 excluding
 Gotham and
 legacy
 Sterling
 loans                1.24%        1.27%       1.30%       1.36%       1.41%
               -----------  ----------- ----------- ----------- -----------
As required by GAAP, the Company recorded at fair value the loans acquired
 in the Gotham and legacy Sterling transactions. These loans carry no
 allowance for loan losses for the periods reflected above.



Sterling Bancorp and Subsidiaries
NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands, except share and per share data)

                              As of and for the Quarter Ended
                -----------------------------------------------------------
                 12/31/2013  9/30/2013   6/30/2013   3/31/2013   12/31/2012
                ----------- ----------- ----------- ----------- -----------
The following table shows the reconciliation of the core operating
 efficiency ratio:
Net interest
 income         $    45,876 $    28,108 $    28,317 $    27,819 $    27,923
Non-interest
 income               9,148       6,600       6,581       6,852       7,659
                ----------- ----------- ----------- ----------- -----------
Total net
 revenues            55,024      34,708      34,898      34,671      35,582
Tax equivalent
 adjustment on
 securities
 interest
 income               1,164         666         808         802         785
Net loss (gain)
 on sale of
 securities             645      (1,801)     (1,945)     (2,229)     (1,416)
Other than
 temporary loss
 on securities           --          --          --           7          25
Other (other
 gains and fair
 value loss on
 interest rate
 caps)                  (93)         81          --          --          (4)
                ----------- ----------- ----------- ----------- -----------
Core total
 revenues            56,740      33,654      33,761      33,251      34,972
                ----------- ----------- ----------- ----------- -----------
Non-interest
 expense             72,974      23,367      21,789      23,339      22,546
Merger-related
 expenses            (9,068)       (714)     (1,516)       (542)         --
Charge for
 asset write-
 downs,
 retention and
 severance
 compensation       (22,167)       (564)         --          --          --
Charge on
 pension plan
 settlement          (2,743)         --          --          --          --
Amortization of
 intangible
 assets              (1,875)       (310)       (337)       (388)       (261)
                ----------- ----------- ----------- ----------- -----------
Core non-
 interest
 expense             37,121      21,779      19,936      22,409      22,285
                ----------- ----------- ----------- ----------- -----------
Core efficiency
 ratio                 65.4%       64.7%       59.1%       67.4%       63.7%
The Company believes the core operating efficiency ratio is a useful tool
 to help assess a company's core operating performance.

The following table shows the reconciliation of net (loss) income and
 (loss) earnings per share excluding merger-related expenses, charge for
 asset write-downs, retention and severance compensation, a charge on
 settlement of a portion of the defined benefit pension plans and
 amortization of non-compete agreements:
(Loss) income
 before income
 tax expense    $   (20,950)$     8,641 $     9,209 $     8,732 $    10,086
Income tax
 (benefit)
 expense             (6,948)      3,312       2,833       2,203       3,066
                ----------- ----------- ----------- ----------- -----------
Net (loss)
 income             (14,002)      5,329       6,376       6,529       7,020

Merger-related
 expenses             9,068         714       1,516         542          --
Charge for
 asset write-
 downs,
 retention and
 severance
 compensation        22,167         564          --          --          --
Charge on
 pension plan
 settlement           2,743          --          --          --          --
Amortization of
 non-compete
 agreements             998          --          --          --          --
                ----------- ----------- ----------- ----------- -----------
Total charges        34,976       1,278       1,516         542          --
Income tax
 (benefit)          (11,600)       (490)       (466)       (137)         --
                ----------- ----------- ----------- ----------- -----------
Total charges
 net of tax
 benefit             23,376         788       1,050         405          --
                ----------- ----------- ----------- ----------- -----------
Net income
 excluding
 total charges  $     9,374 $     6,117 $     7,426 $     6,934 $     7,020
                =========== =========== =========== =========== ===========

Weighted
 Average
 Diluted
 shares(1)       70,707,292  43,859,834  43,906,158  43,848,486  43,721,091
Diluted EPS as
 reported       $     (0.20)$      0.12 $      0.15 $      0.15 $      0.16
Diluted EPS
 excluding
 total charges         0.13        0.14        0.17        0.16        0.16
The Company believes the presentation of its net income excluding total
 charges provides a useful tool to help assess a company's profitability.
(1) Represents diluted share calculation to compute diluted EPS.


STERLING BANCORP CONTACT:
Luis Massiani
EVP & Chief Financial Officer
845.369.8040


Sterling Bancorp
400 Rella Boulevard
Montebello, NY 10901-4243
T 845.369.8040
F 845.369.8255
http://www.sterlingbancorp.com

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