Sterling Bancorp Reports Third Quarter 2020 Financial Results
Third Quarter Highlights
- Net loss of
$111 thousand , or$(0.00) per share - Net interest margin of 2.74%
- Non-interest expense of
$25.0 million , including$12.2 million of professional fees - Provision for loan losses of
$2.1 million , increasing the allowance for loan losses to 1.80% of total loans - Shareholders’ equity of
$331.1 million - Bank capital ratios continue to be in excess of minimum ratios required to be considered “well-capitalized” with a leverage ratio of 9.90%, a total risk-based capital ratio of 21.30% and a common equity tier one ratio of 20.03%
- The Company’s consolidated leverage ratio of 8.64%, risk-based capital ratio of 22.17% and common equity tier one ratio of 17.46% continue to exceed minimum regulatory capital requirements
- Total deposits of
$3.095 billion - Total loans held for investment of
$2.676 billion - Total loan originations of
$67.3 million for the third quarter of 2020 - Nonperforming loans and trouble debt restructurings increased to
$98.1 million (or 3.67% of total loans) from$77.3 million (or 2.84% of total loans) atJune 30, 2020 - On
September 22, 2020 , the Company announced the appointment of two new independent directors to the Board - On
October 15, 2020 , the Company announced an agreement to sell substantially all of the assetsQCM, LLC , its registered investment advisory business, in order to streamline business lines
“Since the Company has now successfully filed its past due 10-K and 10-Qs, this quarter marks the first opportunity where the Company can issue a standard earnings release with more traditional tables and discussion around results. In the time since my appointment as CEO, we have worked tirelessly to bring finality to the 2019 financial reporting and the 2020 interim quarterly reports. The process was complex and time-consuming. In this most recent quarter, Sterling is reporting a loss of
Credit quality metrics continued to face pressures particularly in the commercial real estate and construction loan portfolios, but began to stabilize in the residential real estate portfolio. Residential forbearances, which generally consist of a 120-day deferral of principal and interest with an extension of the loan’s maturity date, remain on 68 loans with balances totaling
| Forbearance Composition | 2020 |
2020 |
2020 |
|||||||||
| Residential real estate |
$ |
35,740 |
|
$ |
118,793 |
|
$ |
70,288 |
|
|||
| Commercial real estate |
|
18,674 |
|
|
7,029 |
|
|
- |
|
|||
| Total loans in forbearance |
$ |
54,414 |
|
$ |
125,822 |
|
$ |
70,288 |
|
|||
| Loans in forbearance to total loans |
|
2.03 |
% |
|
4.55 |
% |
|
2.47 |
% |
|||
Balance Sheet
Total Assets – Total assets of
Liquid assets, including cash and investment securities, increased
Total loans held for investment of
Total Deposits – Total deposits of
“The Company has seen a steady increase in deposits. Part of this was due to the need to build liquidity with respect to the Advantage Loan Program loans previously sold to investors. As we recently disclosed, we have notified all such investors of the potential breaches of representations and warranties with respect to the sold Advantage Loan Program loans and offered to buy back all such loans from their portfolios or securitizations under the terms of the various loan sales agreements. To date we have re-acquired approximately
Capital – Total shareholders’ equity was
| Adequately Capitalized |
Company Actual at 2020 |
|||||
| Total adjusted capital to risk-weighted assets |
8.00 |
% |
22.17 |
% |
||
| Tier 1 (core) capital to risk-weighted assets |
6.00 |
% |
17.46 |
% |
||
| Common Tier 1 (CET 1) |
4.50 |
% |
17.46 |
% |
||
| Tier 1 (core) capital to adjusted tangible assets |
4.00 |
% |
8.64 |
% |
||
| Well Capitalized |
Bank Actual at 2020 |
|||||
| Total adjusted capital to risk-weighted assets |
10.00 |
% |
21.30 |
% |
||
| Tier 1 (core) capital to risk-weighted assets |
8.00 |
% |
20.03 |
% |
||
| Common Tier 1 (CET 1) |
6.00 |
% |
20.03 |
% |
||
| Tier 1 (core) capital to adjusted tangible assets |
5.00 |
% |
9.90 |
% |
||
Asset Quality and Provision for Loan Losses – Provision for loan losses of
Net charge-offs during the quarter of
Nonperforming assets totaled
“In the last few months, we have reshaped our lending practices, brought in experienced senior talent and placed a strong emphasis on risk acceptance standards. This is most especially seen in the commercial and construction lending areas where we have refocused our efforts on more traditional bankers’ conservative underwriting standards. Unfortunately, there are legacy issues in these portfolios that require close oversight and evaluation. Our credit quality metrics reflect this attention. We anticipate some continued weakness in these portfolios and will undoubtedly see some losses develop. In addition, credit has been stressed with the impact from the COVID-19 pandemic and its dramatic impact on the global economy. Our forbearance levels have, however, continued to decline from the
Financial Operating Results
Third Quarter Earnings – A net loss of
Net Interest Income and Net Interest Margin – Net interest income during the third quarter 2020 was
Non-Interest Income – Non-interest income for the quarter was
Non-Interest Expense – Non-interest expense of
Agreement to Sell Substantially All the Assets of
On
“We recently announced the signing of an agreement to sell substantially all of the assets of our
Appointment of Two Independent Directors
On
“The Board of Directors continues to be actively engaged in all of our remedial efforts, and we are very pleased to welcome two new directors to the boards of the Company and the Bank.
Conference Call and Webcast
Management will host a conference call tomorrow at
A replay of the conference call may be accessed through
About
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with accounting principles generally accepted in
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements generally can be identified by the use of forward-looking terminology such as “will,” “propose,” “may,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “continue,” “predict,” “project,” “potential,” “could,” “would,” “should” or similar terminology, including references to assumptions. Forward-looking statements are based on various assumptions and analyses made by us in light of our management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events that may be subject to circumstances beyond our control; increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment; changes in deposit flows, loan demand or collateral values; changes in accounting principles, policies or guidelines; changes in general economic, business and political conditions, either nationally or locally in some or all areas in which we do business, or conditions in the real estate, securities or financial markets or the banking industry; legislative or regulatory changes; supervision and examination by the OCC and the
| Financial Highlights (Unaudited) | ||||||||||||||
| At or for the Three Months Ended | ||||||||||||||
| (dollars in thousands, except per share data) | 2020 |
2020 |
2019 |
|||||||||||
| Net income (loss) |
$ |
(111 |
) |
$ |
2,867 |
|
$ |
13,884 |
|
|||||
| Income (loss) per share, diluted |
$ |
(0.00 |
) |
$ |
0.06 |
|
$ |
0.28 |
|
|||||
| Net interest income |
$ |
25,705 |
|
$ |
27,048 |
|
$ |
30,010 |
|
|||||
| Net interest margin |
|
2.74 |
% |
|
3.08 |
% |
|
3.70 |
% |
|||||
| Non-interest income |
$ |
1,074 |
|
$ |
1,323 |
|
$ |
3,165 |
|
|||||
| Non-interest expense |
$ |
24,937 |
|
$ |
20,047 |
|
$ |
13,426 |
|
|||||
| Loans, net of allowance for loan losses |
$ |
2,627,324 |
|
$ |
2,717,224 |
|
$ |
2,904,232 |
|
|||||
| Total deposits |
$ |
3,095,170 |
|
$ |
2,892,082 |
|
$ |
2,571,845 |
|
|||||
| Nonperforming loans |
$ |
83,162 |
|
$ |
54,260 |
|
$ |
9,974 |
|
|||||
| Allowance for loan losses to total loans |
|
1.80 |
% |
|
1.70 |
% |
|
0.72 |
% |
|||||
| Allowance for loan losses to nonperforming loans |
|
58 |
% |
|
86 |
% |
|
213 |
% |
|||||
| Provision for loan losses |
$ |
2,123 |
|
$ |
4,297 |
|
$ |
251 |
|
|||||
| Net charge offs (recoveries) |
$ |
796 |
|
$ |
(21 |
) |
$ |
(35 |
) |
|||||
| Return on average assets |
|
(0.01 |
)% |
|
0.32 |
% |
|
1.67 |
% |
|||||
| Return on average shareholders' equity |
|
(0.13 |
)% |
|
3.43 |
% |
|
15.97 |
% |
|||||
| Efficiency ratio |
|
93.12 |
% |
|
70.66 |
% |
|
40.47 |
% |
|||||
| Capital Ratios | ||||||||||||||
| Regulatory and Other Capital Ratios— Consolidated: | ||||||||||||||
| Total adjusted capital to risk-weighted assets |
|
22.17 |
% |
|
21.68 |
% |
|
22.64 |
% |
|||||
| Tier 1 (core) capital to risk-weighted assets |
|
17.46 |
% |
|
17.05 |
% |
|
18.17 |
% |
|||||
| Common Tier 1 (CET 1) |
|
17.46 |
% |
|
17.05 |
% |
|
18.17 |
% |
|||||
| Tier 1 (core) capital to adjusted tangible assets |
|
8.64 |
% |
|
9.20 |
% |
|
10.54 |
% |
|||||
| Regulatory and Other Capital Ratios—Bank: | ||||||||||||||
| Total adjusted capital to risk-weighted assets |
|
21.30 |
% |
|
20.71 |
% |
|
18.47 |
% |
|||||
| Tier 1 (core) capital to risk-weighted assets |
|
20.03 |
% |
|
19.44 |
% |
|
17.37 |
% |
|||||
| Common Tier 1 (CET 1) |
|
20.03 |
% |
|
19.44 |
% |
|
17.37 |
% |
|||||
| Tier 1 (core) capital to adjusted tangible assets |
|
9.90 |
% |
|
10.49 |
% |
|
10.07 |
% |
|||||
| Condensed Consolidated Balance Sheets (Unaudited) | |||||||||||||||||||||||
| (dollars in thousands) | 2020 |
2020 |
% change |
2019 |
% change |
2019 |
% change |
||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and due from banks |
$ |
917,996 |
$ |
623,376 |
47 |
% |
$ |
77,819 |
1080 |
% |
$ |
146,246 |
528 |
% |
|||||||||
| Interest-bearing time deposits with other banks |
|
7,988 |
|
9,731 |
(18 |
)% |
|
1,025 |
679 |
% |
|
1,100 |
626 |
% |
|||||||||
| Investment securities |
|
247,884 |
|
257,730 |
(4 |
)% |
|
152,544 |
63 |
% |
|
153,306 |
62 |
% |
|||||||||
| Mortgage loans held for sale |
|
3,643 |
|
3,184 |
14 |
% |
|
1,337 |
172 |
% |
|
837 |
335 |
% |
|||||||||
| Loans, net of allowance for loan losses of |
|
2,627,324 |
|
2,717,224 |
(3 |
)% |
|
2,891,530 |
(9 |
)% |
|
2,904,232 |
(10 |
)% |
|||||||||
| Accrued interest receivable |
|
12,385 |
|
13,864 |
(11 |
)% |
|
13,718 |
(10 |
)% |
|
13,861 |
(11 |
)% |
|||||||||
| Mortgage servicing rights, net |
|
6,423 |
|
7,266 |
(12 |
)% |
|
9,765 |
(34 |
)% |
|
9,910 |
(35 |
)% |
|||||||||
| Leasehold improvements and equipment, net |
|
8,493 |
|
8,849 |
(4 |
)% |
|
9,198 |
(8 |
)% |
|
9,386 |
(10 |
)% |
|||||||||
| Operating lease right-of-use assets |
|
19,253 |
|
19,804 |
(3 |
)% |
|
18,715 |
3 |
% |
|
19,662 |
(2 |
)% |
|||||||||
|
|
22,950 |
|
22,950 |
0 |
% |
|
22,950 |
0 |
% |
|
22,950 |
0 |
% |
||||||||||
| Cash surrender value of bank-owned life insurance |
|
32,355 |
|
32,215 |
0 |
% |
|
31,917 |
1 |
% |
|
31,761 |
2 |
% |
|||||||||
| Deferred tax asset, net |
|
20,589 |
|
20,093 |
2 |
% |
|
12,095 |
70 |
% |
|
6,681 |
208 |
% |
|||||||||
| Other assets |
|
9,322 |
|
2,217 |
320 |
% |
|
2,271 |
310 |
% |
|
2,298 |
306 |
% |
|||||||||
| Total assets |
$ |
3,936,605 |
$ |
3,738,503 |
5 |
% |
$ |
3,244,884 |
21 |
% |
$ |
3,322,230 |
18 |
% |
|||||||||
| Liabilities | |||||||||||||||||||||||
| Noninterest-bearing deposits |
$ |
66,316 |
$ |
72,714 |
(9 |
)% |
$ |
77,563 |
(15 |
)% |
$ |
77,335 |
(14 |
)% |
|||||||||
| Interest-bearing deposits |
|
3,028,854 |
|
2,819,368 |
7 |
% |
|
2,417,877 |
25 |
% |
|
2,494,510 |
21 |
% |
|||||||||
| Total deposits |
|
3,095,170 |
|
2,892,082 |
7 |
% |
|
2,495,440 |
24 |
% |
|
2,571,845 |
20 |
% |
|||||||||
|
|
318,000 |
|
329,000 |
(3 |
)% |
|
229,000 |
39 |
% |
|
229,000 |
39 |
% |
||||||||||
| Subordinated notes, net |
|
65,300 |
|
65,259 |
0 |
% |
|
65,179 |
0 |
% |
|
65,140 |
0 |
% |
|||||||||
| Operating lease liabilities |
|
20,514 |
|
21,056 |
(3 |
)% |
|
19,868 |
3 |
% |
|
20,804 |
(1 |
)% |
|||||||||
| Accrued expenses and other liabilities |
|
106,477 |
|
99,701 |
7 |
% |
|
102,783 |
4 |
% |
|
84,064 |
27 |
% |
|||||||||
| Total liabilities |
|
3,605,461 |
|
3,407,098 |
6 |
% |
|
2,912,270 |
24 |
% |
|
2,970,853 |
21 |
% |
|||||||||
| Shareholders’ Equity | |||||||||||||||||||||||
| Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding |
|
- |
|
- |
|
- |
- |
|
|
- |
- |
|
|||||||||||
| Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 49,977,209 shares at 49,944,473 shares at shares at |
|
80,807 |
|
80,807 |
0 |
% |
|
80,889 |
0 |
% |
|
85,515 |
(6 |
)% |
|||||||||
| Additional paid-in capital |
|
13,386 |
|
13,328 |
0 |
% |
|
13,210 |
1 |
% |
|
13,138 |
2 |
% |
|||||||||
| Retained earnings |
|
236,546 |
|
236,657 |
0 |
% |
|
238,319 |
(1 |
)% |
|
252,571 |
(6 |
)% |
|||||||||
| Accumulated other comprehensive income |
|
405 |
|
613 |
(34 |
)% |
|
196 |
107 |
% |
|
153 |
165 |
% |
|||||||||
| Total shareholders’ equity |
|
331,144 |
|
331,405 |
0 |
% |
|
332,614 |
0 |
% |
|
351,377 |
(6 |
)% |
|||||||||
| Total liabilities and shareholders’ equity |
$ |
3,936,605 |
$ |
3,738,503 |
5 |
% |
$ |
3,244,884 |
21 |
% |
$ |
3,322,230 |
18 |
% |
|||||||||
| Condensed Consolidated Statements of Income (Unaudited) | |||||||||||||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||||||||
|
|
|
|
|
% |
|
|
|
% |
|
|
|
|
|
% |
|||||||||||||||
| (dollars in thousands, except per share amounts) |
|
2020 |
|
|
|
2020 |
|
|
change |
|
|
2019 |
|
|
change |
|
|
2020 |
|
|
|
2019 |
|
|
change |
||||
| Interest income: | |||||||||||||||||||||||||||||
| Interest and fees on loans |
$ |
35,918 |
|
$ |
37,501 |
|
(4 |
)% |
$ |
42,351 |
|
(15 |
)% |
$ |
112,944 |
|
$ |
127,374 |
|
(11 |
)% |
||||||||
| Interest and dividends on investment securities and restricted stock |
|
901 |
|
|
1,037 |
|
(13 |
)% |
|
1,252 |
|
(28 |
)% |
|
2,972 |
|
|
3,751 |
|
(21 |
)% |
||||||||
| Other interest |
|
211 |
|
|
141 |
|
50 |
% |
|
608 |
|
(65 |
)% |
|
786 |
|
|
1,060 |
|
(26 |
)% |
||||||||
| Total interest income |
|
37,030 |
|
|
38,679 |
|
(4 |
)% |
|
44,211 |
|
(16 |
)% |
|
116,702 |
|
|
132,185 |
|
(12 |
)% |
||||||||
| Interest expense: | |||||||||||||||||||||||||||||
| Interest on deposits |
|
9,288 |
|
|
9,576 |
|
(3 |
)% |
|
12,249 |
|
(24 |
)% |
|
29,228 |
|
|
34,429 |
|
(15 |
)% |
||||||||
| Interest on |
|
859 |
|
|
877 |
|
(2 |
)% |
|
777 |
|
11 |
% |
|
2,546 |
|
|
3,207 |
|
(21 |
)% |
||||||||
| Interest on subordinated notes |
|
1,178 |
|
|
1,178 |
|
0 |
% |
|
1,175 |
|
0 |
% |
|
3,533 |
|
|
3,524 |
|
0 |
% |
||||||||
| Total interest expense |
|
11,325 |
|
|
11,631 |
|
(3 |
)% |
|
14,201 |
|
(20 |
)% |
|
35,307 |
|
|
41,160 |
|
(14 |
)% |
||||||||
| Net interest income |
|
25,705 |
|
|
27,048 |
|
(5 |
)% |
|
30,010 |
|
(14 |
)% |
|
81,395 |
|
|
91,025 |
|
(11 |
)% |
||||||||
| Provision (recovery) for loan losses |
|
2,123 |
|
|
4,297 |
|
(51 |
)% |
|
251 |
|
746 |
% |
|
27,273 |
|
|
(583 |
) |
N/M |
|
||||||||
| Net interest income after provision (recovery) for loan losses |
|
23,582 |
|
|
22,751 |
|
4 |
% |
|
29,759 |
|
(21 |
)% |
|
54,122 |
|
|
91,608 |
|
(41 |
)% |
||||||||
| Non-interest income: | |||||||||||||||||||||||||||||
| Service charges and fees |
|
61 |
|
|
95 |
|
(36 |
)% |
|
111 |
|
(45 |
)% |
|
273 |
|
|
327 |
|
(17 |
)% |
||||||||
| Investment management and advisory fees |
|
310 |
|
|
255 |
|
22 |
% |
|
477 |
|
(35 |
)% |
|
878 |
|
|
1,242 |
|
(29 |
)% |
||||||||
| Gain on sale of loans |
|
437 |
|
|
751 |
|
(42 |
)% |
|
1,877 |
|
(77 |
)% |
|
1,457 |
|
|
6,359 |
|
(77 |
)% |
||||||||
| Net servicing income (loss) |
|
(121 |
) |
|
(207 |
) |
42 |
% |
|
240 |
|
(150 |
)% |
|
(1,239 |
) |
|
(437 |
) |
(184 |
)% |
||||||||
| Other income |
|
424 |
|
|
429 |
|
(1 |
)% |
|
460 |
|
(8 |
)% |
|
1,594 |
|
|
1,570 |
|
2 |
% |
||||||||
| Total non-interest income |
|
1,111 |
|
|
1,323 |
|
(16 |
)% |
|
3,165 |
|
(65 |
)% |
|
2,963 |
|
|
9,061 |
|
(67 |
)% |
||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||
| Salaries and employee benefits |
|
7,517 |
|
|
7,336 |
|
2 |
% |
|
7,545 |
|
0 |
% |
|
21,606 |
|
|
22,193 |
|
(3 |
)% |
||||||||
| Occupancy and equipment |
|
2,219 |
|
|
2,208 |
|
0 |
% |
|
2,126 |
|
4 |
% |
|
6,545 |
|
|
6,533 |
|
0 |
% |
||||||||
| Professional fees |
|
12,207 |
|
|
8,268 |
|
48 |
% |
|
1,389 |
|
779 |
% |
|
23,787 |
|
|
3,455 |
|
588 |
% |
||||||||
| Advertising and marketing |
|
71 |
|
|
70 |
|
1 |
% |
|
269 |
|
(74 |
)% |
|
414 |
|
|
1,114 |
|
(63 |
)% |
||||||||
|
|
956 |
|
|
240 |
|
298 |
% |
|
(5 |
) |
N/M |
|
|
1,215 |
|
|
440 |
|
176 |
% |
|||||||||
| Data processing |
|
392 |
|
|
351 |
|
12 |
% |
|
271 |
|
45 |
% |
|
1,078 |
|
|
882 |
|
22 |
% |
||||||||
| Other |
|
1,612 |
|
|
1,574 |
|
2 |
% |
|
1,831 |
|
(12 |
)% |
|
4,611 |
|
|
5,656 |
|
(18 |
)% |
||||||||
| Total non-interest expense |
|
24,974 |
|
|
20,047 |
|
25 |
% |
|
13,426 |
|
86 |
% |
|
59,256 |
|
|
40,273 |
|
47 |
% |
||||||||
| Income (loss) before income taxes |
|
(281 |
) |
|
4,027 |
|
(107 |
)% |
|
19,498 |
|
(101 |
)% |
|
(2,171 |
) |
|
60,396 |
|
(104 |
)% |
||||||||
| Income tax expense (benefit) |
|
(170 |
) |
|
1,160 |
|
(115 |
)% |
|
5,614 |
|
(103 |
)% |
|
(897 |
) |
|
17,395 |
|
(105 |
)% |
||||||||
| Net income (loss) |
$ |
(111 |
) |
$ |
2,867 |
|
(104 |
)% |
$ |
13,884 |
|
(101 |
)% |
$ |
(1,274 |
) |
$ |
43,001 |
|
(103 |
)% |
||||||||
| Income per share: | |||||||||||||||||||||||||||||
| Basic |
$ |
(0.00 |
) |
$ |
0.06 |
|
$ |
0.28 |
|
$ |
(0.03 |
) |
$ |
0.84 |
|
||||||||||||||
| Diluted |
$ |
(0.00 |
) |
$ |
0.06 |
|
$ |
0.28 |
|
$ |
(0.03 |
) |
$ |
0.83 |
|
||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||||||||
| Basic |
|
49,843,925 |
|
|
49,837,948 |
|
|
50,428,108 |
|
|
49,839,860 |
|
|
51,490,046 |
|
||||||||||||||
| Diluted |
|
49,843,925 |
|
|
49,841,741 |
|
|
50,441,572 |
|
|
49,839,860 |
|
|
51,500,657 |
|
||||||||||||||
| N/M- not meaningful | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Selected Financial Data (Unaudited) |
|
|
||||||||||||
|
|
As of and for the Three Months Ended |
|
|
|
||||||||||
|
Performance Ratios: |
|
|
|
|
|
|
|
|
||||||
|
Return on average assets |
|
(0.01 |
)% |
|
0.32 |
% |
|
1.67 |
% |
|
|
|
||
|
Return on average shareholders' equity |
|
(0.13 |
)% |
|
3.43 |
% |
|
15.97 |
% |
|
|
|
||
|
Return on average tangible common equity |
|
(0.13 |
)% |
|
3.43 |
% |
|
15.98 |
% |
|
|
|
||
|
Yield on earning assets |
|
3.94 |
% |
|
4.41 |
% |
|
5.45 |
% |
|
|
|
||
|
Cost of average interest-bearing liabilities |
|
1.36 |
% |
|
1.52 |
% |
|
2.00 |
% |
|
|
|
||
|
Net interest spread |
|
2.58 |
% |
|
2.89 |
% |
|
3.45 |
% |
|
|
|
||
|
Net interest margin |
|
2.74 |
% |
|
3.08 |
% |
|
3.70 |
% |
|
|
|
||
|
Efficiency ratio (1) |
|
93.12 |
% |
|
70.66 |
% |
|
40.47 |
% |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||||
|
(1) Efficiency Ratio is computed as the ratio of non-interest expense divided by the sum of net interest income and non-interest income. |
||||||||||||||
| Yield Analysis and Net Interest Income (Unaudited) | |||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||
| (dollars in thousands) |
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|||||||||
| Interest earning assets | |||||||||||||||||||||||||||
| Loans (1) |
$ |
2,723,381 |
$ |
35,918 |
5.28 |
% |
$ |
2,827,131 |
$ |
37,501 |
5.31 |
% |
$ |
2,971,369 |
$ |
42,351 |
5.70 |
% |
|||||||||
| Securities, includes restricted stock |
|
276,643 |
|
901 |
1.30 |
% |
|
226,497 |
|
1,037 |
1.83 |
% |
|
177,646 |
|
1,252 |
2.82 |
% |
|||||||||
| Other interest earning assets |
|
757,657 |
|
211 |
0.11 |
% |
|
459,222 |
|
141 |
0.12 |
% |
|
98,281 |
|
608 |
2.47 |
% |
|||||||||
| Total interest earning assets |
$ |
3,757,681 |
$ |
37,030 |
3.94 |
% |
$ |
3,512,850 |
$ |
38,679 |
4.41 |
% |
$ |
3,247,296 |
$ |
44,211 |
5.45 |
% |
|||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||
| Money Market, Savings and NOW |
$ |
1,282,452 |
$ |
2,315 |
0.72 |
% |
$ |
1,215,610 |
$ |
2,258 |
0.75 |
% |
$ |
1,300,786 |
$ |
4,458 |
1.36 |
% |
|||||||||
| Time deposits |
|
1,642,492 |
|
6,973 |
1.68 |
% |
|
1,463,806 |
|
7,318 |
2.01 |
% |
|
1,217,234 |
|
7,791 |
2.54 |
% |
|||||||||
| Total interest-bearing deposits |
|
2,924,944 |
|
9,288 |
1.26 |
% |
|
2,679,416 |
|
9,576 |
1.43 |
% |
|
2,518,020 |
|
12,249 |
1.93 |
% |
|||||||||
| FHLB borrowings |
|
318,783 |
|
859 |
1.05 |
% |
|
329,002 |
|
877 |
1.05 |
% |
|
229,897 |
|
777 |
1.32 |
% |
|||||||||
| Subordinated debt |
|
65,273 |
|
1,178 |
7.22 |
% |
|
65,235 |
|
1,178 |
7.22 |
% |
|
65,116 |
|
1,175 |
7.22 |
% |
|||||||||
| Total borrowings |
|
384,056 |
|
2,037 |
2.08 |
% |
|
394,237 |
|
2,055 |
2.06 |
% |
|
295,013 |
|
1,952 |
2.59 |
% |
|||||||||
| Total interest-bearing liabilities |
$ |
3,309,000 |
|
11,325 |
1.36 |
% |
$ |
3,073,653 |
|
11,631 |
1.52 |
% |
$ |
2,813,033 |
|
14,201 |
2.00 |
% |
|||||||||
| Net interest income and spread (2) |
$ |
25,705 |
2.58 |
% |
$ |
27,048 |
2.89 |
% |
$ |
30,010 |
3.45 |
% |
|||||||||||||||
| Net interest margin (2) |
2.74 |
% |
3.08 |
% |
3.70 |
% |
|||||||||||||||||||||
| (1) Nonaccrual loans are included in the respective average loan balances. Income, if any, on such loans is recognized on a cash basis. | |||||||||||||||||||||||||||
| (2) Interest income does not include taxable equivalent adjustments. | |||||||||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance |
Interest | Average Yield/ Rate |
Average Balance |
Interest | Average Yield/ Rate |
|||||||||||||||||||||
| Interest earning assets | |||||||||||||||||||||||||||
| Loans (1) |
$ |
2,806,770 |
$ |
112,944 |
5.37 |
% |
$ |
2,969,364 |
$ |
127,374 |
5.72 |
% |
|||||||||||||||
| Securities, includes restricted stock |
|
226,165 |
|
2,972 |
1.75 |
% |
|
174,223 |
|
3,751 |
2.87 |
% |
|||||||||||||||
| Other interest earning assets |
|
462,955 |
|
786 |
0.23 |
% |
|
52,773 |
|
1,060 |
2.68 |
% |
|||||||||||||||
| Total interest earning assets |
$ |
3,495,890 |
$ |
116,702 |
4.45 |
% |
$ |
3,196,360 |
$ |
132,185 |
5.51 |
% |
|||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||
| Money Market, Savings, NOW |
$ |
1,251,891 |
$ |
7,880 |
0.84 |
% |
$ |
1,376,403 |
$ |
14,797 |
1.44 |
% |
|||||||||||||||
| Time deposits |
|
1,427,451 |
|
21,348 |
1.99 |
% |
|
1,062,617 |
|
19,632 |
2.47 |
% |
|||||||||||||||
| Total interest-bearing deposits |
|
2,679,342 |
|
29,228 |
1.45 |
% |
|
2,439,020 |
|
34,429 |
1.89 |
% |
|||||||||||||||
| FHLB borrowings |
|
305,134 |
|
2,546 |
1.10 |
% |
|
273,874 |
|
3,207 |
1.54 |
% |
|||||||||||||||
| Subordinated debt |
|
65,234 |
|
3,533 |
7.22 |
% |
|
65,080 |
|
3,524 |
7.22 |
% |
|||||||||||||||
| Total borrowings |
|
370,368 |
|
6,079 |
2.16 |
% |
|
338,954 |
|
6,731 |
2.62 |
% |
|||||||||||||||
| Total interest-bearing liabilities |
$ |
3,049,710 |
|
35,307 |
1.54 |
% |
$ |
2,777,974 |
|
41,160 |
1.98 |
% |
|||||||||||||||
| Net interest income and spread (2) |
$ |
81,395 |
2.91 |
% |
$ |
91,025 |
3.53 |
% |
|||||||||||||||||||
| Net interest margin (2) |
3.10 |
% |
3.80 |
% |
|||||||||||||||||||||||
| (1) Nonaccrual loans are included in the respective average loan balances. Income, if any, on such loans is recognized on a cash basis. | |||||||||||||||||||||||||||
| (2) Interest income does not include taxable equivalent adjustments. | |||||||||||||||||||||||||||
| Loan Composition (Unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | 2020 |
2020 |
% change |
2019 |
% change |
2019 |
% change |
|||||||||||||||||||
| Residential real estate |
$ |
2,183,546 |
|
$ |
2,280,473 |
|
(4 |
)% |
$ |
2,476,866 |
|
(12 |
)% |
$ |
2,505,274 |
|
(13 |
)% |
||||||||
| Commercial real estate |
|
262,116 |
|
|
265,068 |
|
(1 |
)% |
|
240,081 |
|
9 |
% |
|
224,570 |
|
17 |
% |
||||||||
| Construction |
|
211,460 |
|
|
201,084 |
|
5 |
% |
|
178,376 |
|
19 |
% |
|
171,051 |
|
24 |
% |
||||||||
| Commercial lines of credit |
|
18,452 |
|
|
17,510 |
|
5 |
% |
|
17,903 |
|
3 |
% |
|
24,512 |
|
(25 |
)% |
||||||||
| Other consumer |
|
8 |
|
|
20 |
|
(60 |
)% |
|
34 |
|
(76 |
)% |
|
29 |
|
(72 |
)% |
||||||||
| Total loans held for investment |
|
2,675,582 |
|
|
2,764,155 |
|
(3 |
)% |
|
2,913,260 |
|
(8 |
)% |
|
2,925,436 |
|
(9 |
)% |
||||||||
| Less: allowance for loan losses |
|
(48,258 |
) |
|
(46,931 |
) |
3 |
% |
|
(21,730 |
) |
122 |
% |
|
(21,204 |
) |
128 |
% |
||||||||
| Loans, net |
$ |
2,627,324 |
|
$ |
2,717,224 |
|
(3 |
)% |
$ |
2,891,530 |
|
(9 |
)% |
$ |
2,904,232 |
|
(10 |
)% |
||||||||
| Mortgage loans held for sale |
$ |
3,643 |
|
$ |
3,184 |
|
14 |
% |
$ |
1,337 |
|
172 |
% |
$ |
837 |
|
335 |
% |
||||||||
| Total gross loans |
$ |
2,679,225 |
|
$ |
2,767,339 |
|
(3 |
)% |
$ |
2,914,597 |
|
(8 |
)% |
$ |
2,926,273 |
|
(8 |
)% |
||||||||
| Allowance for Loan Losses (Unaudited) | ||||||||||||||||
| Three Months Ended | ||||||||||||||||
| (dollars in thousands) | 2020 |
2020 |
2019 |
2019 |
||||||||||||
| Balance at beginning of period |
$ |
46,931 |
|
$ |
42,613 |
$ |
21,204 |
$ |
20,918 |
|||||||
| Provision for loan losses |
|
2,123 |
|
|
4,297 |
|
450 |
|
251 |
|||||||
| Charge offs |
|
(815 |
) |
|
- |
|
- |
|
- |
|||||||
| Recoveries |
|
19 |
|
|
21 |
|
76 |
|
35 |
|||||||
| Balance at end of period |
$ |
48,258 |
|
$ |
46,931 |
$ |
21,730 |
$ |
21,204 |
|||||||
| Deposit Composition (Unaudited) | ||||||||||||||||||||||||
| (dollars in thousands) | 2020 |
2020 |
% change |
2019 |
% change |
2019 |
% change |
|||||||||||||||||
| Noninterest bearing demand deposits |
$ |
66,316 |
$ |
72,714 |
(9 |
)% |
$ |
77,563 |
(15 |
)% |
$ |
77,335 |
(14 |
)% |
||||||||||
| Money Market, Savings and NOW |
|
1,340,971 |
|
1,238,776 |
8 |
% |
|
1,263,801 |
6 |
% |
|
1,277,518 |
5 |
% |
||||||||||
| Time deposits |
|
1,687,883 |
|
1,580,592 |
7 |
% |
|
1,154,076 |
46 |
% |
|
1,216,992 |
39 |
% |
||||||||||
| Total deposits |
$ |
3,095,170 |
$ |
2,892,082 |
7 |
% |
$ |
2,495,440 |
24 |
% |
$ |
2,571,845 |
20 |
% |
||||||||||
| Credit Quality Ratios (Unaudited) | ||||||||||||||||||
| As of and for the Three Months Ended | ||||||||||||||||||
| (dollars in thousands) | 2020 |
2020 |
2019 |
2019 |
||||||||||||||
| Credit Quality Data | ||||||||||||||||||
| Nonperforming loans (1) |
$ |
83,162 |
|
$ |
54,260 |
|
$ |
14,782 |
|
$ |
9,974 |
|
||||||
| Nonperforming loans to total loans |
|
3.11 |
% |
|
1.96 |
% |
|
0.51 |
% |
|
0.34 |
% |
||||||
| Trouble debt restructurings (2) |
|
14,983 |
|
|
23,017 |
|
|
13,570 |
|
|
2,371 |
|
||||||
| Nonperforming assets (3) |
|
98,312 |
|
|
77,277 |
|
|
28,352 |
|
|
12,345 |
|
||||||
| Nonperforming assets to total assets |
|
2.50 |
% |
|
2.07 |
% |
|
0.87 |
% |
|
0.37 |
% |
||||||
| Allowance for loan losses to total loans |
|
1.80 |
% |
|
1.70 |
% |
|
.75 |
% |
|
.72 |
% |
||||||
| Allowance for loan losses to nonperforming loans |
|
58 |
% |
|
86 |
% |
|
147 |
% |
|
213 |
% |
||||||
| Net charge offs (recoveries) to average loans |
|
0.03 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
||||||
| (1) Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing interest. | ||||||||||||||||||
| (2) Trouble debt restructurings exclude those loans presented as nonaccrual or past 90 days and still accruing. | ||||||||||||||||||
| (3) Nonperforming assets include nonperforming loans and loans modified under troubled debt restructurings and other repossessed assets. | ||||||||||||||||||
Return on Average Tangible Common Equity Reconciliations (non-GAAP)
Average tangible common equity and return on average tangible common equity are non-GAAP disclosures. Sterling’s management uses these non-GAAP financial measures to assess the Company’s capital strength and business performance. Average tangible common equity excludes the effect of intangible assets. This non-GAAP financial measure should not be considered a substitute for those comparable measures that are similarly titled that are determined in accordance with
| GAAP to Non-GAAP Reconciliations | ||||||||||||||||||||||
| As of and for the Three Months Ended | As of and for the Nine Months Ended | |||||||||||||||||||||
| (dollars in thousands) | 2020 |
2020 |
2019 |
2020 |
2019 |
|||||||||||||||||
| Net Income (loss) |
$ |
(111 |
) |
$ |
2,867 |
|
$ |
13,884 |
|
$ |
(1,274 |
) |
$ |
43,001 |
|
|||||||
| Average shareholders' equity |
|
336,116 |
|
|
334,521 |
|
|
347,810 |
|
|
337,269 |
|
|
344,640 |
|
|||||||
| Adjustment | ||||||||||||||||||||||
| Customer-related intangible |
|
- |
|
|
- |
|
|
(188 |
) |
|
- |
|
|
(299 |
) |
|||||||
| Average tangible common equity |
$ |
336,116 |
|
$ |
334,521 |
|
$ |
347,622 |
|
$ |
337,269 |
|
$ |
344,341 |
|
|||||||
| Return on average tangible common equity |
|
(0.13 |
)% |
* |
|
3.43 |
% |
* |
|
15.98 |
% |
* |
|
(0.50 |
)% |
|
16.65 |
% |
||||
| *Annualized | ||||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20201028006153/en/
310-622-8223
310-622-8230
SBT@finprofiles.com
Source: