Sterling Bancorp (NYSE: STL) (the “Company”), the parent company of
Sterling National Bank (the “Bank”), today announced results for
the three months ended March 31, 2021. Net income available to
common stockholders for the three months ended March 31, 2021
was $97.2 million, or $0.50 per diluted share, compared to net
income available to common stockholders of $74.5 million, or $0.38
per diluted share, for the linked quarter ended December 31,
2020, and net income available to common stockholders of $12.2
million, or $0.06 per diluted share, for the three months ended
March 31, 2020.
Chief Executive Officer’s Comments
Jack Kopnisky, President and Chief Executive Officer, commented:
“We are pleased with our results for the first quarter of 2021.
While the economic environment remains challenging, the dedication
of our colleagues, resilience of our business model and high
quality of our client relationships is evident in our operating
results. We continue to prioritize supporting our clients,
colleagues and communities, and delivered strong profitability and
substantial growth in tangible capital and tangible book value per
common share.
“We opened 2021 with a strong first quarter. Our
adjusted net income available to common stockholders was $97.6
million, or $0.51 per diluted share, which was an increase of two
cents per share over the linked quarter. We saw improvements across
many of our key profitability metrics, delivering adjusted return
on average tangible assets of 1.42% and adjusted return on average
tangible common equity of 14.6%. Adjusted PPNR excluding accretion
income was $123.9 million, a decrease of 4.9% relative to the
linked quarter, largely as a result of two fewer calendar days in
the first quarter. Although loan origination activity continued to
rebound in the first quarter of 2021, prepayment activity in
certain portfolios has remained elevated, which impacted our
earning assets balances. At March 31, 2021, our tangible book
value per common share was $14.08, an increase of 9.7% over a year
ago.
“We benefit from diversified asset origination
capabilities allowing us to allocate capital to those business
segments that deliver the most attractive risk-adjusted returns. We
have a solid pipeline and anticipate stronger loan growth in the
second quarter of 2021, driven by our C&I, CRE, and public
sector businesses. Total commercial loans grew to $19.5 billion, an
increase of 0.4% over the same period a year ago. At March 31,
2021, our total core deposits were $22.2 billion, which represented
growth of $733.5 million, or 3.4%, over the linked quarter.
Crucially, we continue to effectively manage our interest rate
margin by substantially reducing our funding costs and protecting
our earning asset yields. Our net interest income was $217.9
million in the first quarter and our tax equivalent net interest
margin excluding accretion income was 3.30%, an increase of 5 basis
points over the linked quarter.
“In our fee-based businesses, client activity and
transaction volumes, while still below pre-pandemic levels, are
beginning to recover. In the first quarter, total non-interest
income was $32.4 million, a decline of $1.6 million versus the
linked quarter, which included a gain of $3.7 million on the sale
of commercial loans originated pursuant to the Paycheck Protection
Program (“PPP”). Relative to the linked quarter, we saw growth in
fee income in our loan syndications and cash management businesses
and an increase in revenue from our customer derivatives
businesses.
“In the first quarter, our adjusted non-interest
expenses were $110.6 million and our adjusted operating efficiency
ratio was 44.3%. We continue to invest in our technology
infrastructure and digital capabilities, including in our digital
banking offering Brio Direct, and in our Banking as a Service
business. In the last 30 days, we announced a collaboration with
Google to offer digital checking and savings accounts through the
Google Plex platform, and entered into alliances with Rho
Technologies and Bright Fi to offer a variety of banking services.
We are also investing in our core business, to drive organic growth
in key, high growth potential commercial verticals that offer
attractive risk-adjusted returns, including by adding resources to
our syndication, innovation finance, treasury management and small
business teams. We are investing for the future, and are confident
that these investments will drive scalable and sustainable growth
in our business and earnings.
“Asset quality performance was in line with our
expectations. As of March 31, 2021, the majority of our
clients on loan payment deferrals had resumed making payments; with
total loans on deferral decreasing $77.9 million to $130.5 million,
or 0.6% of total portfolio loans. Total net charge-offs in the
first quarter were $12.9 million, which included charges associated
with the sale of $70.0 million of commercial loans, most of which
were rated criticized or classified. As of March 31, 2021, our
allowance for credit losses - portfolio loans was $323.2 million,
or 1.53% of total loans and 191.7% of non-performing loans,
reflecting an improving macro economic outlook but also our
conservative approach to reserve releases as we continue to
navigate through the credit cycle.
“We have a strong capital position. Our tangible
common equity to tangible assets ratio increased eight basis points
in the first quarter to 9.63% and our Tier 1 leverage ratio was
10.50%. We declared our regular dividend of $0.07 on our common
stock, payable on May 14, 2021 to holders of record as of
April 30, 2021. We restarted our stock repurchase program in
the fourth quarter of 2020, repurchased 1.2 million shares in the
first quarter of 2021 and have repurchased nearly 3.2 million
shares since resuming our stock repurchase program. The program had
13.5 million shares available for repurchase as of March 31,
2021.
“Finally, I would like to thank our clients,
shareholders, and colleagues, all of whom have exhibited
extraordinary resilience to come through an exceptionally
challenging period. I remain confident that the strength and
diversification of our business model, our continued investments in
technology and the dedication and commitment of our colleagues,
positions us to drive
2
continued and sustainable growth.”
Reconciliation of GAAP Results to Adjusted
Results (non-GAAP)The Company’s GAAP net income available
to common stockholders of $97.2 million, or $0.50 per diluted
share, for the first quarter of 2021, included the following
items:
- a pre-tax gain of
$719 thousand on the sale of investment securities;
- a pre-tax charge of
$633 thousand related to the sale of two financial centers and the
exit of two back office locations; and
- the pre-tax
amortization of non-compete agreements and acquired customer list
intangible assets of $148 thousand.
Excluding the impact of these items, adjusted net
income available to common stockholders was $97.6 million, or $0.51
per diluted share. For the three months ended March 31, 2021,
our effective income tax rate was 18.8%, which was comprised of an
estimated effective tax rate for 2021 of 18.5% and the impact
discrete items related to executive compensation and the vesting of
stock-based compensation awards. Our effective tax rate for
purposes of reporting for adjusted earnings was 13.5% and 12.5% for
the three months ended December 31, 2020 and March 31,
2020, respectively.
Non-GAAP financial measures include the terms
“adjusted” or “excluding”. See the reconciliation of the Company’s
non-GAAP financial measures beginning on page 20.
Net Interest Income and Margin
($ in thousands) |
For the three months ended |
|
Change % / bps |
|
March 31, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
|
Y-o-Y |
|
Linked Qtr |
Interest and dividend income |
$ |
273,527 |
|
|
$ |
242,610 |
|
|
$ |
233,847 |
|
|
(14.5 |
) |
% |
|
(3.6 |
) |
% |
Interest expense |
61,755 |
|
|
20,584 |
|
|
15,933 |
|
|
(74.2 |
) |
|
|
(22.6 |
) |
|
Net interest income |
$ |
211,772 |
|
|
$ |
222,026 |
|
|
$ |
217,914 |
|
|
2.9 |
|
|
|
(1.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
Accretion income on acquired loans |
$ |
10,686 |
|
|
$ |
8,560 |
|
|
$ |
8,272 |
|
|
(22.6 |
) |
% |
|
(3.4 |
) |
% |
Yield on loans |
4.47 |
% |
|
3.90 |
% |
|
3.92 |
% |
|
(55 |
) |
|
|
2 |
|
|
Tax equivalent yield on investment securities4 |
2.96 |
|
|
2.94 |
|
|
3.02 |
|
|
6 |
|
|
|
8 |
|
|
Tax equivalent yield on
interest earning assets4 |
4.13 |
|
|
3.69 |
|
|
3.68 |
|
|
(45 |
) |
|
|
(1 |
) |
|
Cost of total deposits |
0.81 |
|
|
0.22 |
|
|
0.15 |
|
|
(66 |
) |
|
|
(7 |
) |
|
Cost of interest bearing deposits |
1.00 |
|
|
0.29 |
|
|
0.20 |
|
|
(80 |
) |
|
|
(9 |
) |
|
Cost of borrowings |
2.49 |
|
|
3.35 |
|
|
3.97 |
|
|
148 |
|
|
|
62 |
|
|
Cost of interest bearing liabilities |
1.19 |
|
|
0.43 |
|
|
0.34 |
|
|
(85 |
) |
|
|
(9 |
) |
|
Total cost of funding liabilities5 |
0.98 |
|
|
0.33 |
|
|
0.27 |
|
|
(71 |
) |
|
|
(6 |
) |
|
Tax equivalent net interest margin6 |
3.21 |
|
|
3.38 |
|
|
3.43 |
|
|
22 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
Average loans, including loans
held for sale |
$ |
21,206,177 |
|
|
$ |
21,879,511 |
|
|
$ |
21,294,550 |
|
|
0.4 |
|
% |
|
(2.7 |
) |
% |
Average commercial loans |
18,820,094 |
|
|
19,992,074 |
|
|
19,553,823 |
|
|
3.9 |
|
|
|
(2.2 |
) |
|
Average investment
securities |
5,046,573 |
|
|
4,155,784 |
|
|
4,054,978 |
|
|
(19.6 |
) |
|
|
(2.4 |
) |
|
Average cash balances |
489,691 |
|
|
331,587 |
|
|
648,178 |
|
|
32.4 |
|
|
|
95.5 |
|
|
Average total interest earning
assets |
26,980,261 |
|
|
26,522,991 |
|
|
26,149,732 |
|
|
(3.1 |
) |
|
|
(1.4 |
) |
|
Average deposits and mortgage
escrow |
22,692,568 |
|
|
23,849,187 |
|
|
23,546,928 |
|
|
3.8 |
|
|
|
(1.3 |
) |
|
4. Tax equivalent basis represents interest income
earned on tax exempt securities divided by the applicable federal
tax rate of 21%.5. Includes interest bearing liabilities and
non-interest bearing deposits.6. Tax equivalent net interest margin
is equal to net interest income plus the tax equivalent adjustment
for tax exempt securities divided by average interest earning
assets. The tax equivalent adjustment is assumed at a 21% federal
tax rate in all periods presented.
First quarter 2021 compared with first quarter
2020
Net interest income was $217.9 million for the
quarter ended March 31, 2021, an increase of $6.1 million compared
to the first quarter of 2020. This was mainly due to a decline in
interest expense in line with decreases in market rates of interest
and the
3
repayment of higher cost FHLB borrowings. Other key
components of changes in net interest income were the
following:
- The tax equivalent
yield on interest earning assets decreased 45 basis points to
3.68%, in line with period over period decreases in market rates of
interest.
- The decline in
market interest rates drove a decrease in our yield on loans, from
4.47% in the first quarter of 2020 to 3.92% in the first quarter of
2021.
- Accretion income on
acquired loans was $8.3 million in the first quarter of 2021,
compared to $10.7 million in the first quarter of 2020.
- Average investment
securities were $4.1 billion, or 15.5%, of average total interest
earning assets for the first quarter of 2021 compared to $5.0
billion, or 18.7%, of average total interest earning assets for the
first quarter of 2020. The tax equivalent yield on investment
securities was 3.02% compared to 2.96% for the three months ended
March 31, 2020, mainly as a result of an increase in corporate
securities held in the portfolio.
- In the first
quarter of 2021, strong growth in deposits drove increases in
average cash balances to $648.2 million compared to $489.7 million
in the first quarter of 2020.
- Total interest
expense was $15.9 million, a decline of $45.8 million compared to
the first quarter of 2020. This was mainly due to lower interest
expense paid on deposits and short-term borrowings and the impact
of repayment of senior notes that matured in the second quarter of
2020.
- The cost of total
deposits was 15 basis points for the first quarter of 2021 compared
to 81 basis points for the same period a year ago, in line with
repricing of deposits in response to the low interest rate
environment.
- The cost of
borrowings was 3.97% for the first quarter of 2021 compared to
2.49% for the same period a year ago. The increase was mainly due
to the change in composition of our borrowings, with average
borrowings of $721.6 million in the current quarter being comprised
of $86.0 million in short-term borrowings and $635.6 million in
higher coupon longer term borrowings, while for the prior year
quarter average borrowings of $2.6 billion were comprised of
predominately shorter term borrowings.
- The total cost of
interest bearing liabilities was 0.34% for the first quarter of
2021 compared to 1.19% for the same period a year ago. The decline
was due to both changes in market rates of interest and changes in
funding mix.
- Average deposits
and mortgage escrow increased $854.4 million during the first
quarter of 2021 compared to the same period a year ago, due to
growth generated by our commercial banking teams and financial
centers.
First quarter 2021 compared with linked quarter
ended December 31, 2020
Net interest income decreased $4.1 million for the
quarter ended March 31, 2021 compared to the linked quarter, mainly
due to the impact of the two fewer days of interest income recorded
in the first quarter, as well as the impact of continued prepayment
activity in certain portfolios. Other key components of the changes
in net interest income were the following:
- The average balance
of commercial loans decreased $438.3 million, and the average
balance of residential mortgage loans declined $133.3 million.
- The tax equivalent
net interest margin was 3.43% compared to 3.38% in the linked
quarter. Excluding accretion income on acquired loans, tax
equivalent net interest margin increased five basis points to
3.30%.
- The yield on loans
was 3.92% compared to 3.90% for the linked quarter. The increase
was mainly due to prepayment fees on multi-family and other loans.
Accretion income on acquired loans decreased $288 thousand to $8.3
million for the first quarter of 2021.
- The remaining
balance of PPP loans in the portfolio was $110.1 million at the end
of the quarter, and all loans are in process of being forgiven. We
recognized $367 thousand in PPP loan fees as interest income
in the first quarter of 2021, compared to $846 thousand in the
linked quarter. The decline was due to lower levels of
repayments.
- The tax equivalent
yield on interest earning assets was 3.68% compared to 3.69% in the
linked quarter, primarily as a result of an increase in the amount
of cash held as a proportion of total earnings assets.
- The tax equivalent
yield on investment securities was 3.02% compared to 2.94% for the
linked quarter. The increase in yield was mainly due to an increase
in corporate securities.
- The cost of total
deposits decreased seven basis points to 15 basis points, mainly
due to deposit repricing in response to the low interest rate
environment.
- Total interest
expense decreased $4.7 million as a result of continued repricing
of deposits and the impact of repayment of higher cost FHLB
borrowings.
- The total cost of
borrowings increased 62 basis points to 3.97%, mainly due to the
change in mix of borrowings with shorter term borrowings
representing a smaller percentage of total borrowings.
4
- Average deposits
and mortgage escrow decreased by $302.3 million and average
borrowings decreased by $130.4 million relative to the linked
quarter.
Non-interest Income
($ in thousands) |
For the three months ended |
|
Change % |
|
March 31, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
|
Y-o-Y |
|
Linked Qtr |
Deposit fees and service charges |
$ |
6,622 |
|
|
$ |
5,975 |
|
|
$ |
6,563 |
|
|
(0.9 |
) |
% |
|
9.8 |
|
% |
Accounts receivable management
/ factoring commissions and other related fees |
5,538 |
|
|
6,498 |
|
|
5,426 |
|
|
(2.0 |
) |
% |
|
(16.5 |
) |
% |
Bank owned life insurance
(“BOLI”) |
5,018 |
|
|
4,961 |
|
|
4,955 |
|
|
(1.3 |
) |
% |
|
(0.1 |
) |
% |
Loan commissions and fees |
11,024 |
|
|
13,220 |
|
|
10,477 |
|
|
(5.0 |
) |
% |
|
(20.7 |
) |
% |
Investment management
fees |
1,847 |
|
|
1,700 |
|
|
1,852 |
|
|
0.3 |
|
% |
|
8.9 |
|
% |
Net gain (loss) on sale of
securities |
8,412 |
|
|
(111 |
) |
|
719 |
|
|
(91.5 |
) |
% |
|
NM |
|
|
Net gain on security
calls |
4,880 |
|
|
— |
|
|
— |
|
|
NM |
|
|
|
NM |
|
|
Other |
3,985 |
|
|
1,678 |
|
|
2,364 |
|
|
(40.7 |
) |
% |
|
40.9 |
|
% |
Total non-interest income |
47,326 |
|
|
33,921 |
|
|
32,356 |
|
|
(31.6 |
) |
% |
|
(4.6 |
) |
% |
Net gain (loss) on sale of
securities |
8,412 |
|
|
(111 |
) |
|
719 |
|
|
(91.5 |
) |
% |
|
NM |
|
|
Adjusted non-interest
income |
$ |
38,914 |
|
|
$ |
34,032 |
|
|
$ |
31,637 |
|
|
(18.7 |
) |
% |
|
(7.0 |
) |
% |
First quarter 2021 compared with first quarter 2020
Adjusted non-interest income decreased $7.3 million in the first
quarter of 2021 to $31.6 million, compared to $38.9 million in the
same quarter last year. The decrease was mainly due to net gains
realized on security calls in the first quarter of 2020 that did
not recur, as well as from the impact of lower transactional volume
in our derivatives business. In the first quarter of 2020, we
realized a gain of $8.4 million on the sale of available for sale
securities, which we sold to fund commercial loan growth.
Loan commissions and fees in the first quarter of
2020 included a $2.8 million gain on sale of small business
equipment finance loans, which did not recur in 2021. In the first
quarter of 2021, loan commissions and fees included
$1.8 million in fees in connection with second round PPP loans
originated by a third party in respect of which we earned a
referral fee. A total of 1,118 loans closed with a principal amount
of $160.9 million.
First quarter 2021 compared with linked quarter
ended December 31, 2020
Adjusted non-interest income decreased
approximately $2.4 million relative to the linked quarter to $31.6
million primarily as a result of a gain on sale of PPP loans of
$3.7 million in the linked quarter. Treasury management fees, swap
fees and net mortgage loan servicing fees increased versus the
linked quarter.
In the first quarter of 2021, we realized a gain of
$719 thousand on sale of securities, compared to a loss of $111
thousand in the fourth quarter of 2020.
5
Non-interest Expense
($ in thousands) |
For the three months ended |
|
Change % / bps |
|
March 31, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
|
Y-o-Y |
|
Linked Qtr |
Compensation and benefits |
$ |
54,876 |
|
|
$ |
56,563 |
|
|
$ |
58,087 |
|
|
|
5.9 |
|
% |
|
2.7 |
|
% |
Stock-based compensation plans |
6,006 |
|
|
5,222 |
|
|
6,617 |
|
|
|
10.2 |
|
|
|
26.7 |
|
|
Occupancy and office operations |
15,199 |
|
|
14,742 |
|
|
14,515 |
|
|
|
(4.5 |
) |
|
|
(1.5 |
) |
|
Information technology |
8,018 |
|
|
9,559 |
|
|
9,246 |
|
|
|
15.3 |
|
|
|
(3.3 |
) |
|
Amortization of intangible
assets |
4,200 |
|
|
4,200 |
|
|
3,776 |
|
|
|
(10.1 |
) |
|
|
(10.1 |
) |
|
FDIC insurance and regulatory
assessments |
3,206 |
|
|
2,865 |
|
|
3,230 |
|
|
|
0.7 |
|
|
|
12.7 |
|
|
Other real estate owned
(“OREO”), net |
52 |
|
|
283 |
|
|
(68 |
) |
|
|
NM |
|
|
|
NM |
|
|
Impairment related to
financial centers and real estate consolidation strategy |
— |
|
|
13,311 |
|
|
633 |
|
|
|
NM |
|
|
|
NM |
|
|
Loss on extinguishment of
borrowings |
744 |
|
|
2,749 |
|
|
— |
|
|
|
NM |
|
|
|
NM |
|
|
Other expenses |
22,412 |
|
|
23,979 |
|
|
22,129 |
|
|
|
(1.3 |
) |
|
|
(7.7 |
) |
|
Total non-interest
expense |
$ |
114,713 |
|
|
$ |
133,473 |
|
|
$ |
118,165 |
|
|
|
3.0 |
|
|
|
(11.5 |
) |
|
Full time equivalent employees
(“FTEs”) at period end |
1,619 |
|
|
1,460 |
|
|
1,457 |
|
|
|
(10.0 |
) |
|
|
(0.2 |
) |
|
Operating efficiency ratio, as reported7 |
44.3 |
% |
|
52.1 |
% |
|
47.2 |
|
% |
|
290 |
|
|
|
(490 |
) |
|
Operating efficiency ratio, as adjusted7 |
42.4 |
|
|
43.0 |
|
|
44.3 |
|
|
|
190 |
|
|
|
130 |
|
|
7 See a reconciliation of non-GAAP financial
measures beginning on page 20.
First quarter 2021 compared with first quarter 2020
Total non-interest expense increased $3.5 million relative to the
first quarter of 2020. Key components of the change in non-interest
expense between the periods include the following:
- Compensation and
benefits increased $3.2 million mainly due to a higher bonus
compensation accrual and an increase in medical costs incurred in
the first quarter.
- Occupancy and
office operations expense decreased $684 thousand, mainly due to
the consolidation of financial centers and other back-office
locations. In the first quarter of 2021, we sold two financial
centers, and exited two leases for financial center and back office
location.
- Information
technology expense increased $1.2 million mainly due to the
amortization of investments related to various back-office
automation and digital banking initiatives.
- Impairment related
to financial centers and our real estate consolidation strategy
represents loss on sale of financial center and other locations and
early termination payments on leased locations.
First quarter 2021 compared with linked quarter
ended December 31, 2020 Total non-interest expense decreased
$15.3 million to $118.2 million. Key components of the change in
non-interest expense include the following:
- Compensation and
benefits increased $1.5 million to $58.1 million in the first
quarter of 2021. The increase was mainly due to payroll taxes and
employer contributions to benefit plans, which are usually higher
in the first quarter of the year compared to other quarters.
- Loss on
extinguishment of borrowings in the linked quarter was incurred in
connection with the repayment of $250.0 million of FHLB advances
and $30.0 million of subordinated notes - Bank.
- Other expenses
decreased by $1.9 million versus the linked quarter, mainly due to
lower charitable contributions and other donations and lower
write-downs associated with repossessed assets related to
foreclosed equipment finance loans.
Taxes
We recorded income tax expense of $23.0 million in
the first quarter of 2021, compared to income tax expense of
$18.6 million in the linked quarter and income tax benefit of
$8.0 million in the prior year quarter. For the three months
ended March 31, 2021, we recorded income tax expense at an
estimated effective income tax rate of 18.8% compared to 19.5% for
the three months ended December 31, 2020.
6
Key Balance Sheet Highlights as of
March 31, 2021
($ in thousands) |
As of |
|
Change % / bps |
|
March 31, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
|
Y-o-Y |
|
Linked Qtr |
Total assets |
$ |
30,335,036 |
|
|
$ |
29,820,138 |
|
|
$ |
29,914,282 |
|
|
(1.4 |
) |
% |
|
0.3 |
|
% |
Total portfolio loans, gross |
21,709,957 |
|
|
21,848,409 |
|
|
21,151,973 |
|
|
(2.6 |
) |
|
|
(3.2 |
) |
|
Commercial & industrial
(“C&I”) loans |
8,483,474 |
|
|
9,160,268 |
|
|
8,451,615 |
|
|
(0.4 |
) |
|
|
(7.7 |
) |
|
Commercial real estate loans
(including multi-family) |
10,399,566 |
|
|
10,238,650 |
|
|
10,421,131 |
|
|
0.2 |
|
|
|
1.8 |
|
|
Acquisition, development and
construction (“ADC”) loans |
524,714 |
|
|
642,943 |
|
|
618,295 |
|
|
17.8 |
|
|
|
(3.8 |
) |
|
Total commercial loans |
19,407,754 |
|
|
20,041,861 |
|
|
19,491,041 |
|
|
0.4 |
|
|
|
(2.7 |
) |
|
Residential mortgage loans |
2,077,534 |
|
|
1,616,641 |
|
|
1,486,597 |
|
|
(28.4 |
) |
|
|
(8.0 |
) |
|
Loan portfolio composition: |
|
|
|
|
|
|
|
|
|
Commercial & industrial
(“C&I”) loans |
39.1 |
% |
|
41.9 |
% |
|
40.0 |
% |
|
90 |
|
|
|
(190 |
) |
|
Commercial real estate loans
(including multi-family) |
47.9 |
|
|
46.9 |
|
|
49.3 |
|
|
140 |
|
|
|
240 |
|
|
Acquisition, development and
construction (“ADC”) loans |
2.4 |
|
|
2.9 |
|
|
2.9 |
|
|
50 |
|
|
|
— |
|
|
Residential and consumer |
10.6 |
|
|
8.3 |
|
|
7.8 |
|
|
(280 |
) |
|
|
(50 |
) |
|
BOLI |
$ |
616,648 |
|
|
$ |
629,576 |
|
|
$ |
630,430 |
|
|
2.2 |
|
|
|
0.1 |
|
|
Core deposits9 |
20,704,023 |
|
|
21,482,525 |
|
|
22,216,035 |
|
|
7.3 |
|
|
|
3.4 |
|
|
Total deposits |
22,558,280 |
|
|
23,119,522 |
|
|
23,841,718 |
|
|
5.7 |
|
|
|
3.1 |
|
|
Municipal deposits (included in core deposits) |
2,091,259 |
|
|
1,648,945 |
|
|
2,047,349 |
|
|
(2.1 |
) |
|
|
24.2 |
|
|
Investment securities, net |
4,614,513 |
|
|
4,039,456 |
|
|
4,241,457 |
|
|
(8.1 |
) |
|
|
5.0 |
|
|
Investment securities, net to
earning assets |
17.2 |
% |
|
15.4 |
% |
|
16.5 |
% |
|
(70 |
) |
|
|
110 |
|
|
Total borrowings |
$ |
2,598,698 |
|
|
$ |
1,321,714 |
|
|
$ |
667,499 |
|
|
(74.3 |
) |
|
|
(49.5 |
) |
|
Loans to deposits |
96.2 |
% |
|
94.5 |
% |
|
88.7 |
% |
|
(750 |
) |
|
|
(580 |
) |
|
Core deposits9 to total
deposits |
91.8 |
|
|
92.9 |
|
|
93.2 |
|
|
140 |
|
|
|
30 |
|
|
9 Core deposits include retail, commercial and
municipal transaction, money market, savings accounts and
certificates of deposit accounts, and reciprocal Certificate of
Deposit Account Registry balances and exclude brokered and
wholesale deposits.
Highlights related to balance sheet items as of
March 31, 2021 were the following:
- C&I loans and
commercial real estate loans represented 89.3% of our loan
portfolio at March 31, 2021 compared to 87.0% a year ago.
C&I loans includes traditional C&I, PPP, asset-based
lending, payroll finance, warehouse lending, factored receivables,
equipment financing and public sector finance loans.
- A slowdown in
mortgage refinance activity drove a $558.7 million decline in our
mortgage warehouse lending balance at the end of the first quarter
and was the primary driver of the decline in total portfolio, total
commercial loans and total portfolio balance.
- In the first
quarter of 2021, we sold $70.0 million of commercial real
estate loan which were mostly rated substandard or special mention.
We recorded charge-offs of $5.9 million against the allowance
for credit losses - loans to reduce the carrying value of loans to
fair value prior to completing the transaction.
- In the fourth
quarter of 2020, we sold $464.2 million of PPP loans, which
included the majority of such loans for which the forgiveness
process had not yet been started.
- Residential
mortgage loans were $1.5 billion at March 31, 2021, a decline
of $130.0 million from the linked quarter and a decline of $590.9
million from the same period a year ago. The decline was mainly due
to repayments, and as compared to the same period a year ago also
reflected our 2020 sale of non-performing residential mortgage
loans with a net book value of $53.2 million.
- Core deposits at
March 31, 2021 were $22.2 billion an increase of $733.5
million compared to December 31, 2020, and an increase of $1.5
billion compared to March 31, 2020. The increase in the first
quarter included increases primarily in interest bearing and
non-interest bearing transaction accounts, money market accounts
and municipal deposits. Certificate of deposit accounts declined
$273.8 million as higher costing balances matured and were not
renewed. Compared to March 31, 2020, certificate of deposit
accounts declined $920.3 million. The growth in core and total
deposits is a result both of our successful deposit gathering
strategies as well as the increase in liquidity in the banking
system overall, from government stimulus and other measures
implemented in response to the economic downturn brought about by
the pandemic.
7
- Municipal deposits
at March 31, 2021 were $2.0 billion, an increase of $398.4
million relative to December 31, 2020. Municipal deposits
generally increase in the first quarter of the year from tax
collections by local municipalities.
- Investment
securities, net increased by $202.0 million from December 31,
2020 and decreased $373.1 million from March 31, 2020,
representing 16.5% of earning assets at March 31, 2021. In the
first quarter of 2021 the increase in investment securities
included the purchase of US Treasury and corporate securities in
response to the significant levels of excess liquidity generated by
deposit inflows and the contraction in our loan portfolio.
- Total borrowings at
March 31, 2021 were $667.5 million, a decrease of $654.2
million relative to December 31, 2020 and a decrease of $1.9
billion relative to March 31, 2020, in both cases largely as a
result of the repayments of higher costing FHLB borrowings.
- On April 1, 2021,
we redeemed the remaining balance of subordinated notes - Bank with
a principal balance of $145.0 million at March 31, 2021 and coupon
interest rate of 5.25%.
Credit Quality
($ in thousands) |
For the three months ended |
|
Change % / bps |
|
March 31, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
|
Y-o-Y |
|
Linked Qtr |
Provision for credit losses - loans |
$ |
136,577 |
|
|
$ |
27,500 |
|
|
$ |
10,000 |
|
|
(92.7 |
) |
% |
|
(63.6 |
) |
% |
Net charge-offs |
6,955 |
|
|
27,343 |
|
|
12,914 |
|
|
85.7 |
|
|
|
(52.8 |
) |
|
Allowance for credit losses
(“ACL”) - loans |
326,444 |
|
|
326,100 |
|
|
323,186 |
|
|
(1.0 |
) |
|
|
(0.9 |
) |
|
Loans 30 to 89 days past due,
accruing |
69,769 |
|
|
72,912 |
|
|
42,165 |
|
|
(39.6 |
) |
|
|
(42.2 |
) |
|
Non-performing loans |
253,750 |
|
|
167,059 |
|
|
168,557 |
|
|
(33.6 |
) |
|
|
0.9 |
|
|
Annualized net charge-offs to
average loans |
0.13 |
% |
|
0.50 |
% |
|
0.25 |
% |
|
12 |
|
|
|
(25 |
) |
|
Special mention loans |
$ |
132,356 |
|
|
$ |
461,458 |
|
|
$ |
494,452 |
|
|
273.6 |
|
|
|
7.1 |
|
|
Substandard loans |
402,393 |
|
|
528,760 |
|
|
590,109 |
|
|
46.6 |
|
|
|
11.6 |
|
|
ACL - loans to total
loans |
1.50 |
% |
|
1.49 |
% |
|
1.53 |
% |
|
3 |
|
|
|
4 |
|
|
ACL - loans to non-performing
loans |
128.6 |
|
|
195.2 |
|
|
191.7 |
|
|
6,310 |
|
|
|
(350 |
) |
|
For the three months ended March 31, 2021,
provision for credit losses on portfolio loans was $10.0 million.
The provision for credit losses is based on our reasonable and
supportable forecasts of expected future losses inherent in our
portfolio.
Net charge-offs were $12.9 million in the first
quarter of 2021 and consisted of $5.9 million in charge-offs
related to the sale of $70.0 million of CRE loans, most of
which were rated special mention or substandard, a charge-off of
$5.0 million on a large non-performing construction loan and $2.0
million of other net charge-offs.
Non-performing loans increased by $1.5 million to
$168.6 million at March 31, 2021 compared to the linked
quarter. Loans 30 to 89 days past due were $42.2 million, a
decrease of $30.7 million from the linked quarter.
Special mention loans increased $33.0 million
compared to the linked quarter. Substandard loans, which include
non-performing loans, increased $61.3 million relative to the
linked quarter. The increase was mainly due to CRE and multi-family
loans, the majority of which are related to borrowers that
previously requested payment forbearance under the CARES Act. The
increases in special mention and substandard loans in the first
quarter of 2021 are after recording the impact of the sale of a
portfolio of CRE loans that contained a total of $60.1 million in
loans rated special mention or substandard. As of March 31,
2021, loan payment deferrals were $130.5 million, or 0.6% of the
total portfolio loans.
For additional information on our credit quality
metrics including delinquency, criticized and classified see page
17, “Asset Quality Information by Portfolio”.
8
Capital
($ in thousands, except share
and per share data) |
As of |
|
Change % / bps |
|
March 31, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
|
Y-o-Y |
|
Linked Qtr |
Total stockholders’ equity |
$ |
4,422,424 |
|
|
$ |
4,590,514 |
|
|
$ |
4,620,164 |
|
|
4.5 |
|
% |
|
0.6 |
|
% |
Preferred stock |
137,363 |
|
|
136,689 |
|
|
136,458 |
|
|
(0.7 |
) |
|
|
(0.2 |
) |
|
Goodwill and other intangible
assets |
1,789,646 |
|
|
1,777,046 |
|
|
1,773,270 |
|
|
(0.9 |
) |
|
|
(0.2 |
) |
|
Tangible common stockholders’
equity 10 |
$ |
2,495,415 |
|
|
$ |
2,676,779 |
|
|
$ |
2,710,436 |
|
|
8.6 |
|
|
|
1.3 |
|
|
Common shares outstanding |
194,460,656 |
|
|
192,923,371 |
|
|
192,567,901 |
|
|
(1.0 |
) |
|
|
(0.2 |
) |
|
Book value per common share |
$ |
22.04 |
|
|
$ |
23.09 |
|
|
$ |
23.28 |
|
|
5.6 |
|
|
|
0.8 |
|
|
Tangible book value per common
share 10 |
12.83 |
|
|
13.87 |
|
|
14.08 |
|
|
9.7 |
|
|
|
1.5 |
|
|
Tangible common equity as a %
of tangible assets 10 |
8.74 |
% |
|
9.55 |
% |
|
9.63 |
% |
|
89 |
|
|
|
8 |
|
|
Est. Tier 1 leverage ratio - Company |
9.41 |
|
|
10.14 |
|
|
10.50 |
|
|
109 |
|
|
|
36 |
|
|
Est. Tier 1 leverage ratio - Company fully implemented |
9.06 |
|
|
9.80 |
|
|
10.15 |
|
|
N/A |
|
|
|
35 |
|
|
Est. Tier 1 leverage ratio -
Bank |
9.99 |
|
|
11.33 |
|
|
11.76 |
|
|
177 |
|
|
|
43 |
|
|
Est. Tier 1 leverage ratio - Bank fully implemented |
9.65 |
|
|
11.01 |
|
|
11.42 |
|
|
N/A |
|
|
|
41 |
|
|
|
|
|
|
|
|
|
|
|
|
10 See a reconciliation of non-GAAP financial measures beginning on
page 20. |
Total stockholders’ equity increased $29.7 million
to $4.6 billion versus the linked quarter as a result of net income
of $99.2 million, stock-based compensation and stock option
exercises of $7.4 million, partially offset by common stock
repurchases of $27.3 million, common shares acquired from stock
compensation plan activity of $6.6 million, common dividends of
$13.5 million, preferred dividends of $2.2 million, and other
comprehensive loss of $27.2 million.
We elected the five-year transition provision to
delay for two years the full impact on regulatory capital of our
adoption of the Current Expected Credit Loss (“CECL”) accounting
standard, followed by a three year transition period. The
March 31, 2021 fully implemented ratio data reflects the full
impact of CECL and excludes the benefits of phase-ins.
Tangible book value per common share was $14.08 at
March 31, 2021, which represented an increase of 9.7% compared
to a year ago.
Subsequent EventAs announced and
further described in a separate press release issued by Sterling
Bancorp today, Sterling Bancorp and Webster Financial Corporation,
have entered into a merger agreement under which the companies will
combine in an all stock merger of equals transaction.
Conference Call InformationIn
light of the announcement earlier today of entry into a merger
agreement with Webster Financial Corporation ("Webster"), there
will be a joint conference call to discuss the transaction and
first quarter earnings at 8:30 A.M. Eastern Time today. To listen
to the live call, please dial 877-407-8289 (US) or 201-689-8341
(International). A webcast can be accessed via Webster’s Investor
Relations website at www.wbst.com. Sterling has cancelled its
originally scheduled earnings conference call on April 22,
2021.
About Sterling BancorpSterling
Bancorp, whose principal subsidiary is Sterling National Bank,
specializes in the delivery of services and solutions to business
owners, their families and consumers within the communities it
serves 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 website at
www.sterlingbancorp.com.
9
CAUTION CONCERNING FORWARD-LOOKING STATEMENTSThis
release may contain certain forward-looking statements, including,
but not limited to, certain plans, expectations, goals,
projections, and statements about the Company and the the proposed
transaction, between Webster and the Company. Such statements are
subject to numerous assumptions, risks, and uncertainties.
Statements that do not describe historical or current facts,
including statements about beliefs and expectations, are
forward-looking statements. Forward-looking statements may be
identified by words such as expect, anticipate, believe, intend,
estimate, plan, target, goal, or similar expressions, or future or
conditional verbs such as will, may, might, should, would, could,
or similar variations. The forward-looking statements are intended
to be subject to the safe harbor provided by Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act
of 1934, and the Private Securities Litigation Reform Act of
1995.
While there is no assurance that any list of risks and
uncertainties or risk factors is complete, below are certain
factors which could cause actual results to differ materially from
those contained or implied in the forward-looking statements:
changes in general economic, political, or industry conditions; the
magnitude and duration of the COVID-19 pandemic and its impact on
the global economy and financial market conditions and our
business, results of operations, and financial condition;
uncertainty in U.S. fiscal and monetary policy, including the
interest rate policies of the Federal Reserve Board; volatility and
disruptions in global capital and credit markets; movements in
interest rates; reform of LIBOR; competitive pressures on product
pricing and services; success, impact, and timing of our business
strategies, including market acceptance of any new products or
services; the nature, extent, timing, and results of governmental
actions, examinations, reviews, reforms, regulations, and
interpretations, including those related to the Dodd-Frank Wall
Street Reform and Consumer Protection Act and the Basel III
regulatory capital reforms, as well as those involving the OCC,
Federal Reserve, FDIC, and CFPB; the occurrence of any event,
change or other circumstances that could give rise to the right of
one or both of the parties to terminate the merger agreement
between Webster and the Company; the outcome of any legal
proceedings that may be instituted against Webster or the Company;
delays in completing the transaction; the failure to obtain
necessary regulatory approvals (and the risk that such approvals
may result in the imposition of conditions that could adversely
affect the combined company or the expected benefits of the
transaction); the failure to obtain stockholder approvals or to
satisfy any of the other conditions to the transaction on a timely
basis or at all; the possibility that the anticipated benefits of
the transaction are not realized when expected or at all, including
as a result of the impact of, or problems arising from, the
integration of the two companies or as a result of the strength of
the economy and competitive factors in the areas where Webster and
the Company do business; the possibility that the transaction may
be more expensive to complete than anticipated, including as a
result of unexpected factors or events; diversion of management's
attention from ongoing business operations and opportunities;
potential adverse reactions or changes to business or employee
relationships, including those resulting from the announcement or
completion of the transaction; the ability to complete the
transaction and integration of Webster and the Company
successfully; and other factors that may affect the future results
of Webster and the Company. Additional factors that could cause
results to differ materially from those described above can be
found in the Company's Annual Report on Form 10-K for the year
ended December 31, 2020, which is on file with the SEC and
available on the Company's investor relations website,
https://sterlingbank.gcs-web.com/investor-relations, under the
heading "Financials" and in other documents the Company files with
the SEC.
All forward-looking statements speak only as of the date they
are made and are based on information available at that time. The
Company assumes no obligation to update forward-looking statements
to reflect circumstances or events that occur after the date the
forward-looking statements were made or to reflect the occurrence
of unanticipated events except as required by federal securities
laws. As forward-looking statements involve significant risks and
uncertainties, caution should be exercised against placing undue
reliance on such statements.
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 three months ended March 31, 2021. 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
Quarterly Report on Form 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.
IMPORTANT ADDITIONAL INFORMATIONIn connection with the proposed
transaction, Webster will file with the SEC a Registration
Statement on Form S-4 that will include a Joint Proxy Statement of
Webster and the Company and a Prospectus of Webster , as well as
other relevant documents concerning the proposed transaction. The
proposed transaction involving Webster and the Company will be
submitted to the Company's stockholders and Webster's stockholders
for their consideration. This communication does not constitute an
offer to sell or the solicitation of an offer to buy any securities
or a solicitation of any vote or approval, nor shall there be any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
INVESTORS AND STOCKHOLDERS OF WEBSTER AND STOCKHOLDERS OF THE
COMPANY ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT
PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION WHEN IT
BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will
be able to obtain a free copy of the definitive joint proxy
statement/prospectus, as well as other filings containing
information about Webster and the Company, without charge, at the
SEC's website (http://www.sec.gov). Copies of the joint proxy
statement/prospectus and the filings with the SEC that will be
incorporated by reference in the joint proxy statement/prospectus
can also be obtained, without charge, by directing a request to
Kristen Manginelli, Director of Investor Relations, Webster
Financial Corporation, 145 Bank Street, Waterbury, Connecticut
06702, (203) 578-2202 or to Emlen Harmon, Managing Director,
Investor Relations, Sterling Bancorp, Two Blue Hill Plaza, Second
Floor, Pearl River, New York 10965, (845) 369-8040.
PARTICIPANTS IN THE SOLICITATIONWebster, the Company, and
certain of their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
stockholders of Webster and the Company in connection with the
proposed transaction under the rules of the SEC. Information
regarding Webster’s directors and executive officers is available
in its definitive proxy statement relating to its 2021 Annual
Meeting of Stockholders, which was filed with the SEC on March 19,
2021, and other documents filed by Webster with the SEC.
Information regarding Sterling’s directors and executive
officers is available in its definitive proxy statement relating to
its 2021 Annual Meeting of Stockholders, which was filed with the
SEC on April 14, 2021, and other documents filed by Sterling with
the SEC. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the joint proxy statement/prospectus and other relevant materials
filed with the SEC. Free copies of this document may be obtained as
described in the preceding paragraph.
10
Sterling Bancorp and SubsidiariesCONSOLIDATED CONDENSED
STATEMENTS OF FINANCIAL CONDITION(unaudited, in thousands, except
share and per share data)
|
March 31, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
Assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
348,636 |
|
|
|
$ |
305,002 |
|
|
|
$ |
935,633 |
|
|
Investment securities, net |
4,614,513 |
|
|
|
4,039,456 |
|
|
|
4,241,457 |
|
|
Loans held for sale |
8,124 |
|
|
|
11,749 |
|
|
|
36,237 |
|
|
Portfolio loans: |
|
|
|
|
|
Commercial and industrial (“C&I”) |
8,483,474 |
|
|
|
9,160,268 |
|
|
|
8,451,614 |
|
|
Commercial real estate (including multi-family) |
10,399,566 |
|
|
|
10,238,650 |
|
|
|
10,421,132 |
|
|
Acquisition, development and construction (“ADC”) loans |
524,714 |
|
|
|
642,943 |
|
|
|
618,295 |
|
|
Residential mortgage |
2,077,534 |
|
|
|
1,616,641 |
|
|
|
1,486,597 |
|
|
Consumer |
224,669 |
|
|
|
189,907 |
|
|
|
174,335 |
|
|
Total portfolio loans, gross |
21,709,957 |
|
|
|
21,848,409 |
|
|
|
21,151,973 |
|
|
Allowance for credit losses |
(326,444 |
) |
|
|
(326,100 |
) |
|
|
(323,186 |
) |
|
Total portfolio loans, net |
21,383,513 |
|
|
|
21,522,309 |
|
|
|
20,828,787 |
|
|
FHLB and Federal Reserve Bank
Stock, at cost |
240,722 |
|
|
|
166,190 |
|
|
|
153,968 |
|
|
Accrued interest receivable |
102,101 |
|
|
|
97,505 |
|
|
|
103,323 |
|
|
Premises and equipment, net |
228,526 |
|
|
|
202,555 |
|
|
|
199,782 |
|
|
Goodwill |
1,683,482 |
|
|
|
1,683,482 |
|
|
|
1,683,482 |
|
|
Other intangibles |
106,164 |
|
|
|
93,564 |
|
|
|
89,788 |
|
|
BOLI |
616,648 |
|
|
|
629,576 |
|
|
|
630,430 |
|
|
Other real estate owned |
11,815 |
|
|
|
5,347 |
|
|
|
5,227 |
|
|
Other assets |
990,792 |
|
|
|
1,063,403 |
|
|
|
1,006,168 |
|
|
Total assets |
$ |
30,335,036 |
|
|
|
$ |
29,820,138 |
|
|
|
$ |
29,914,282 |
|
|
Liabilities: |
|
|
|
|
|
Deposits |
$ |
22,558,280 |
|
|
|
$ |
23,119,522 |
|
|
|
$ |
23,841,718 |
|
|
FHLB borrowings |
1,955,451 |
|
|
|
382,000 |
|
|
|
— |
|
|
Federal Funds Purchased |
— |
|
|
|
277,000 |
|
|
|
— |
|
|
Other borrowings |
27,562 |
|
|
|
27,101 |
|
|
|
31,679 |
|
|
Senior notes |
171,422 |
|
|
|
— |
|
|
|
— |
|
|
Subordinated notes - Company |
271,019 |
|
|
|
491,910 |
|
|
|
492,063 |
|
|
Subordinated notes - Bank |
173,244 |
|
|
|
143,703 |
|
|
|
143,757 |
|
|
Mortgage escrow funds |
96,491 |
|
|
|
59,686 |
|
|
|
82,245 |
|
|
Other liabilities |
659,143 |
|
|
|
728,702 |
|
|
|
702,656 |
|
|
Total liabilities |
25,912,612 |
|
|
|
25,229,624 |
|
|
|
25,294,118 |
|
|
Stockholders’ equity: |
|
|
|
|
|
Preferred stock |
137,363 |
|
|
|
136,689 |
|
|
|
136,458 |
|
|
Common stock |
2,299 |
|
|
|
2,299 |
|
|
|
2,299 |
|
|
Additional paid-in capital |
3,749,508 |
|
|
|
3,761,993 |
|
|
|
3,745,890 |
|
|
Treasury stock |
(660,069 |
) |
|
|
(686,911 |
) |
|
|
(699,415 |
) |
|
Retained earnings |
1,125,702 |
|
|
|
1,291,628 |
|
|
|
1,377,341 |
|
|
Accumulated other comprehensive income |
67,621 |
|
|
|
84,816 |
|
|
|
57,591 |
|
|
Total stockholders’ equity |
4,422,424 |
|
|
|
4,590,514 |
|
|
|
4,620,164 |
|
|
Total liabilities and stockholders’ equity |
$ |
30,335,036 |
|
|
|
$ |
29,820,138 |
|
|
|
$ |
29,914,282 |
|
|
|
|
|
|
|
|
Shares of common stock outstanding at period end |
194,460,656 |
|
|
|
192,923,371 |
|
|
|
192,567,901 |
|
|
Book value per common share |
$ |
22.04 |
|
|
|
$ |
23.09 |
|
|
|
$ |
23.28 |
|
|
Tangible book value per common share1 |
12.83 |
|
|
|
13.87 |
|
|
|
14.08 |
|
|
1 See reconciliation of non-GAAP financial measures beginning on
page 20. |
11
Sterling Bancorp and SubsidiariesCONSOLIDATED INCOME
STATEMENT(unaudited, in thousands, except share and per share
data)
|
For the Quarter Ended |
|
March 31, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
Interest and dividend income: |
|
|
|
|
|
Loans and loan fees |
$ |
235,439 |
|
|
|
$ |
214,522 |
|
|
|
$ |
205,855 |
|
|
Securities taxable |
20,629 |
|
|
|
15,679 |
|
|
|
15,352 |
|
|
Securities non-taxable |
12,997 |
|
|
|
11,839 |
|
|
|
11,738 |
|
|
Other earning assets |
4,462 |
|
|
|
570 |
|
|
|
902 |
|
|
Total interest and dividend income |
273,527 |
|
|
|
242,610 |
|
|
|
233,847 |
|
|
Interest expense: |
|
|
|
|
|
Deposits |
45,781 |
|
|
|
13,417 |
|
|
|
8,868 |
|
|
Borrowings |
15,974 |
|
|
|
7,167 |
|
|
|
7,065 |
|
|
Total interest expense |
61,755 |
|
|
|
20,584 |
|
|
|
15,933 |
|
|
Net interest income |
211,772 |
|
|
|
222,026 |
|
|
|
217,914 |
|
|
Provision for credit losses - loans |
136,577 |
|
|
|
27,500 |
|
|
|
10,000 |
|
|
Provision for credit losses - held to maturity securities |
1,703 |
|
|
|
— |
|
|
|
— |
|
|
Net interest income after provision for credit losses |
73,492 |
|
|
|
194,526 |
|
|
|
207,914 |
|
|
Non-interest income: |
|
|
|
|
|
Deposit fees and service charges |
6,622 |
|
|
|
5,975 |
|
|
|
6,563 |
|
|
Accounts receivable management / factoring commissions and other
related fees |
5,538 |
|
|
|
6,498 |
|
|
|
5,426 |
|
|
BOLI |
5,018 |
|
|
|
4,961 |
|
|
|
4,955 |
|
|
Loan commissions and fees |
11,024 |
|
|
|
13,220 |
|
|
|
10,477 |
|
|
Investment management fees |
1,847 |
|
|
|
1,700 |
|
|
|
1,852 |
|
|
Net gain (loss) on sale of securities |
8,412 |
|
|
|
(111 |
) |
|
|
719 |
|
|
Net gain on security calls |
4,880 |
|
|
|
— |
|
|
|
— |
|
|
Other |
3,985 |
|
|
|
1,678 |
|
|
|
2,364 |
|
|
Total non-interest income |
47,326 |
|
|
|
33,921 |
|
|
|
32,356 |
|
|
Non-interest expense: |
|
|
|
|
|
Compensation and benefits |
54,876 |
|
|
|
56,563 |
|
|
|
58,087 |
|
|
Stock-based compensation plans |
6,006 |
|
|
|
5,222 |
|
|
|
6,617 |
|
|
Occupancy and office operations |
15,199 |
|
|
|
14,742 |
|
|
|
14,515 |
|
|
Information technology |
8,018 |
|
|
|
9,559 |
|
|
|
9,246 |
|
|
Amortization of intangible assets |
4,200 |
|
|
|
4,200 |
|
|
|
3,776 |
|
|
FDIC insurance and regulatory assessments |
3,206 |
|
|
|
2,865 |
|
|
|
3,230 |
|
|
Other real estate owned, net |
52 |
|
|
|
283 |
|
|
|
(68 |
) |
|
Impairment related to financial centers and real estate
consolidation strategy |
— |
|
|
|
13,311 |
|
|
|
633 |
|
|
Loss on extinguishment of borrowings |
744 |
|
|
|
2,749 |
|
|
|
— |
|
|
Other |
22,412 |
|
|
|
23,979 |
|
|
|
22,129 |
|
|
Total non-interest expense |
114,713 |
|
|
|
133,473 |
|
|
|
118,165 |
|
|
Income before income tax expense |
6,105 |
|
|
|
94,974 |
|
|
|
122,105 |
|
|
Income tax (benefit) expense |
(8,042 |
) |
|
|
18,551 |
|
|
|
22,955 |
|
|
Net income |
14,147 |
|
|
|
76,423 |
|
|
|
99,150 |
|
|
Preferred stock dividend |
1,976 |
|
|
|
1,966 |
|
|
|
1,963 |
|
|
Net income available to common stockholders |
$ |
12,171 |
|
|
|
$ |
74,457 |
|
|
|
$ |
97,187 |
|
|
Weighted average common shares: |
|
|
|
|
|
Basic |
196,344,061 |
|
|
|
193,036,678 |
|
|
|
191,890,512 |
|
|
Diluted |
196,709,038 |
|
|
|
193,530,930 |
|
|
|
192,621,907 |
|
|
Earnings per common share: |
|
|
|
|
|
Basic earnings per share |
$ |
0.06 |
|
|
|
$ |
0.39 |
|
|
|
$ |
0.51 |
|
|
Diluted earnings per share |
0.06 |
|
|
|
0.38 |
|
|
|
0.50 |
|
|
Dividends declared per share |
0.07 |
|
|
|
0.07 |
|
|
|
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the Quarter Ended |
End of Period |
March 31, 2020 |
|
June 30, 2020 |
|
September 30, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
Total assets |
$ |
30,335,036 |
|
|
$ |
30,839,893 |
|
|
$ |
30,617,722 |
|
|
$ |
29,820,138 |
|
|
$ |
29,914,282 |
|
Tangible assets 1 |
28,545,390 |
|
|
29,054,447 |
|
|
28,836,476 |
|
|
28,043,092 |
|
|
28,141,012 |
|
Securities available for sale |
2,660,835 |
|
|
2,620,624 |
|
|
2,419,458 |
|
|
2,298,618 |
|
|
2,524,671 |
|
Securities held to maturity, net |
1,956,177 |
|
|
1,924,955 |
|
|
1,781,892 |
|
|
1,740,838 |
|
|
1,716,786 |
|
Loans held for sale2 |
8,124 |
|
|
44,437 |
|
|
36,826 |
|
|
11,749 |
|
|
36,237 |
|
Portfolio loans |
21,709,957 |
|
|
22,295,267 |
|
|
22,281,940 |
|
|
21,848,409 |
|
|
21,151,973 |
|
Goodwill |
1,683,482 |
|
|
1,683,482 |
|
|
1,683,482 |
|
|
1,683,482 |
|
|
1,683,482 |
|
Other intangibles |
106,164 |
|
|
101,964 |
|
|
97,764 |
|
|
93,564 |
|
|
89,788 |
|
Deposits |
22,558,280 |
|
|
23,600,621 |
|
|
24,255,333 |
|
|
23,119,522 |
|
|
23,841,718 |
|
Municipal deposits (included above) |
2,091,259 |
|
|
1,724,049 |
|
|
2,397,072 |
|
|
1,648,945 |
|
|
2,047,349 |
|
Borrowings |
2,598,698 |
|
|
2,582,609 |
|
|
993,535 |
|
|
1,321,714 |
|
|
667,499 |
|
Stockholders’ equity |
4,422,424 |
|
|
4,484,187 |
|
|
4,557,785 |
|
|
4,590,514 |
|
|
4,620,164 |
|
Tangible common equity 1 |
2,495,415 |
|
|
2,561,599 |
|
|
2,639,622 |
|
|
2,676,779 |
|
|
2,710,436 |
|
Quarterly Average Balances |
|
|
|
|
|
|
|
|
|
Total assets |
30,484,433 |
|
|
30,732,914 |
|
|
30,652,856 |
|
|
30,024,165 |
|
|
29,582,605 |
|
Tangible assets 1 |
28,692,033 |
|
|
28,944,714 |
|
|
28,868,840 |
|
|
28,244,364 |
|
|
27,806,859 |
|
Loans, gross: |
|
|
|
|
|
|
|
|
|
Commercial real estate (includes multi-family) |
10,288,977 |
|
|
10,404,643 |
|
|
10,320,930 |
|
|
10,191,707 |
|
|
10,283,292 |
|
ADC |
497,009 |
|
|
519,517 |
|
|
636,061 |
|
|
685,368 |
|
|
624,259 |
|
C&I: |
|
|
|
|
|
|
|
|
|
Traditional C&I (includes PPP loans) |
2,470,570 |
|
|
3,130,248 |
|
|
3,339,872 |
|
|
3,155,851 |
|
|
2,917,721 |
|
Asset-based lending3 |
1,107,542 |
|
|
981,518 |
|
|
864,075 |
|
|
876,377 |
|
|
751,861 |
|
Payroll finance3 |
217,952 |
|
|
173,175 |
|
|
143,579 |
|
|
162,762 |
|
|
146,839 |
|
Warehouse lending3 |
1,089,576 |
|
|
1,353,885 |
|
|
1,550,425 |
|
|
1,637,507 |
|
|
1,546,947 |
|
Factored receivables3 |
229,126 |
|
|
188,660 |
|
|
163,388 |
|
|
214,021 |
|
|
224,845 |
|
Equipment financing3 |
1,703,016 |
|
|
1,677,273 |
|
|
1,590,855 |
|
|
1,535,582 |
|
|
1,474,993 |
|
Public sector finance3 |
1,216,326 |
|
|
1,286,265 |
|
|
1,481,260 |
|
|
1,532,899 |
|
|
1,583,066 |
|
Total C&I |
8,034,108 |
|
|
8,791,024 |
|
|
9,133,454 |
|
|
9,114,999 |
|
|
8,646,272 |
|
Residential mortgage |
2,152,440 |
|
|
2,006,400 |
|
|
1,862,390 |
|
|
1,691,567 |
|
|
1,558,266 |
|
Consumer |
233,643 |
|
|
219,052 |
|
|
206,700 |
|
|
195,870 |
|
|
182,461 |
|
Loans, total4 |
21,206,177 |
|
|
21,940,636 |
|
|
22,159,535 |
|
|
21,879,511 |
|
|
21,294,550 |
|
Securities (taxable) |
2,883,367 |
|
|
2,507,384 |
|
|
2,363,059 |
|
|
2,191,333 |
|
|
2,103,768 |
|
Securities (non-taxable) |
2,163,206 |
|
|
2,122,672 |
|
|
2,029,805 |
|
|
1,964,451 |
|
|
1,951,210 |
|
Other interest earning assets |
727,511 |
|
|
669,422 |
|
|
610,938 |
|
|
487,696 |
|
|
800,204 |
|
Total interest earning assets |
26,980,261 |
|
|
27,240,114 |
|
|
27,163,337 |
|
|
26,522,991 |
|
|
26,149,732 |
|
Deposits: |
|
|
|
|
|
|
|
|
|
Non-interest bearing demand |
4,346,518 |
|
|
5,004,907 |
|
|
5,385,939 |
|
|
5,530,334 |
|
|
5,521,538 |
|
Interest bearing demand |
4,616,658 |
|
|
4,766,298 |
|
|
4,688,343 |
|
|
4,870,544 |
|
|
4,981,415 |
|
Savings (including mortgage escrow funds) |
2,800,021 |
|
|
2,890,402 |
|
|
2,727,475 |
|
|
2,712,041 |
|
|
2,717,622 |
|
Money market |
7,691,381 |
|
|
8,035,750 |
|
|
8,304,834 |
|
|
8,577,920 |
|
|
8,382,533 |
|
Certificates of deposit |
3,237,990 |
|
|
2,766,580 |
|
|
2,559,325 |
|
|
2,158,348 |
|
|
1,943,820 |
|
Total deposits and mortgage escrow |
22,692,568 |
|
|
23,463,937 |
|
|
23,665,916 |
|
|
23,849,187 |
|
|
23,546,928 |
|
Borrowings |
2,580,922 |
|
|
2,101,016 |
|
|
1,747,941 |
|
|
852,057 |
|
|
721,642 |
|
Stockholders’ equity |
4,506,537 |
|
|
4,464,403 |
|
|
4,530,334 |
|
|
4,591,770 |
|
|
4,616,660 |
|
Tangible common stockholders’ equity 1 |
2,576,558 |
|
|
2,538,842 |
|
|
2,609,179 |
|
|
2,675,055 |
|
|
2,704,227 |
|
|
|
|
|
|
|
|
|
|
|
1 See a reconciliation of non-GAAP financial measures beginning on
page 20. |
2 Loans held for sale mainly includes commercial syndication
loans. |
3 Asset-based
lending, payroll finance, warehouse lending, factored receivables,
equipment finance and public sector finance comprise our commercial
finance loan portfolio. |
4 Includes loans held for sale, but excludes allowance for credit
losses. |
13
Sterling Bancorp and SubsidiariesSELECTED FINANCIAL DATA AND
PERFORMANCE RATIOS(unaudited, in thousands, except share and per
share data)
|
As of and for the Quarter Ended |
Per Common Share Data |
March 31, 2020 |
|
June 30, 2020 |
|
September 30, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
Basic earnings per share |
$ |
0.06 |
|
|
|
$ |
0.25 |
|
|
$ |
0.43 |
|
|
$ |
0.39 |
|
|
$ |
0.51 |
|
Diluted earnings per share |
0.06 |
|
|
|
0.25 |
|
|
0.43 |
|
|
0.38 |
|
|
0.50 |
|
Adjusted diluted (loss)
earnings per share, non-GAAP 1 |
(0.02 |
) |
|
|
0.29 |
|
|
0.45 |
|
|
0.49 |
|
|
0.51 |
|
Dividends declared per common share |
0.07 |
|
|
|
0.07 |
|
|
0.07 |
|
|
0.07 |
|
|
0.07 |
|
Book value per common share |
22.04 |
|
|
|
22.35 |
|
|
22.73 |
|
|
23.09 |
|
|
23.28 |
|
Tangible book value per common share1 |
12.83 |
|
|
|
13.17 |
|
|
13.57 |
|
|
13.87 |
|
|
14.08 |
|
Shares of common stock o/s |
194,460,656 |
|
|
|
194,458,805 |
|
|
194,458,841 |
|
|
192,923,371 |
|
|
192,567,901 |
|
Basic weighted average common
shares o/s |
196,344,061 |
|
|
|
193,479,757 |
|
|
193,494,929 |
|
|
193,036,678 |
|
|
191,890,512 |
|
Diluted weighted average common
shares o/s |
196,709,038 |
|
|
|
193,604,431 |
|
|
193,715,943 |
|
|
193,530,930 |
|
|
192,621,907 |
|
Performance Ratios (annualized) |
|
|
|
|
|
|
|
|
|
Return on average assets |
0.16 |
|
% |
|
0.64 |
% |
|
1.07 |
% |
|
0.99 |
% |
|
1.33 |
% |
Return on average equity |
1.09 |
|
|
|
4.40 |
|
|
7.24 |
|
|
6.45 |
|
|
8.54 |
|
Return on average tangible assets |
0.17 |
|
|
|
0.68 |
|
|
1.14 |
|
|
1.05 |
|
|
1.42 |
|
Return on average tangible common equity |
1.90 |
|
|
|
7.73 |
|
|
12.57 |
|
|
11.07 |
|
|
14.58 |
|
Return on average tangible assets, adjusted 1 |
(0.04 |
) |
|
|
0.79 |
|
|
1.21 |
|
|
1.33 |
|
|
1.42 |
|
Return on avg. tangible common equity, adjusted 1 |
(0.49 |
) |
|
|
9.02 |
|
|
13.37 |
|
|
14.03 |
|
|
14.64 |
|
Operating efficiency ratio, as adjusted 1 |
42.4 |
|
|
|
45.1 |
|
|
43.1 |
|
|
43.0 |
|
|
44.3 |
|
Analysis of Net Interest Income |
|
|
|
|
|
|
|
|
|
Accretion income on acquired loans |
$ |
10,686 |
|
|
|
$ |
10,086 |
|
|
$ |
9,172 |
|
|
$ |
8,560 |
|
|
$ |
8,272 |
|
Yield on loans |
4.47 |
|
% |
|
4.03 |
% |
|
3.82 |
% |
|
3.90 |
% |
|
3.92 |
% |
Yield on investment securities - tax equivalent 2 |
2.96 |
|
|
|
3.05 |
|
|
3.09 |
|
|
2.94 |
|
|
3.02 |
|
Yield on interest earning assets - tax equivalent 2 |
4.13 |
|
|
|
3.79 |
|
|
3.63 |
|
|
3.69 |
|
|
3.68 |
|
Cost of interest bearing deposits |
1.00 |
|
|
|
0.61 |
|
|
0.40 |
|
|
0.29 |
|
|
0.20 |
|
Cost of total deposits |
0.81 |
|
|
|
0.48 |
|
|
0.31 |
|
|
0.22 |
|
|
0.15 |
|
Cost of borrowings |
2.49 |
|
|
|
2.26 |
|
|
1.95 |
|
|
3.35 |
|
|
3.97 |
|
Cost of interest bearing liabilities |
1.19 |
|
|
|
0.78 |
|
|
0.53 |
|
|
0.43 |
|
|
0.34 |
|
Net interest rate spread - tax equivalent basis 2 |
2.94 |
|
|
|
3.01 |
|
|
3.10 |
|
|
3.26 |
|
|
3.34 |
|
Net interest margin - GAAP basis |
3.16 |
|
|
|
3.15 |
|
|
3.19 |
|
|
3.33 |
|
|
3.38 |
|
Net interest margin - tax equivalent basis 2 |
3.21 |
|
|
|
3.20 |
|
|
3.24 |
|
|
3.38 |
|
|
3.43 |
|
Capital |
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio - Company 3 |
9.41 |
|
% |
|
9.51 |
% |
|
9.93 |
% |
|
10.14 |
% |
|
10.50 |
% |
Tier 1 leverage ratio - Bank only 3 |
9.99 |
|
|
|
10.09 |
|
|
10.48 |
|
|
11.33 |
|
|
11.76 |
|
Tier 1 risk-based capital ratio - Bank only 3 |
12.19 |
|
|
|
12.24 |
|
|
12.39 |
|
|
13.38 |
|
|
14.02 |
|
Total risk-based capital ratio - Bank only 3 |
13.80 |
|
|
|
13.85 |
|
|
13.86 |
|
|
14.73 |
|
|
15.40 |
|
Tangible common equity -
Company 1 |
8.74 |
|
|
|
8.82 |
|
|
9.15 |
|
|
9.55 |
|
|
9.63 |
|
Condensed Five Quarter Income Statement |
|
|
|
|
|
|
|
|
|
Interest and dividend income |
$ |
273,527 |
|
|
|
$ |
253,226 |
|
|
$ |
244,658 |
|
|
$ |
242,610 |
|
|
$ |
233,847 |
|
Interest expense |
61,755 |
|
|
|
39,927 |
|
|
26,834 |
|
|
20,584 |
|
|
15,933 |
|
Net interest income |
211,772 |
|
|
|
213,299 |
|
|
217,824 |
|
|
222,026 |
|
|
217,914 |
|
Provision for credit losses |
138,280 |
|
|
|
56,606 |
|
|
30,000 |
|
|
27,500 |
|
|
10,000 |
|
Net interest income after provision for credit losses |
73,492 |
|
|
|
156,693 |
|
|
187,824 |
|
|
194,526 |
|
|
207,914 |
|
Non-interest income |
47,326 |
|
|
|
26,090 |
|
|
28,225 |
|
|
33,921 |
|
|
32,356 |
|
Non-interest expense |
114,713 |
|
|
|
124,881 |
|
|
119,362 |
|
|
133,473 |
|
|
118,165 |
|
Income before income tax (benefit) expense |
6,105 |
|
|
|
57,902 |
|
|
96,687 |
|
|
94,974 |
|
|
122,105 |
|
Income tax (benefit) expense |
(8,042 |
) |
|
|
7,110 |
|
|
12,280 |
|
|
18,551 |
|
|
22,955 |
|
Net income |
$ |
14,147 |
|
|
|
$ |
50,792 |
|
|
$ |
84,407 |
|
|
$ |
76,423 |
|
|
$ |
99,150 |
|
|
|
|
|
|
|
|
|
|
|
1 See a reconciliation of non-GAAP financial measures beginning on
page 20. |
2 Tax equivalent basis represents interest income earned on tax
exempt securities divided by the applicable federal tax rate of
21%. |
3 Regulatory capital amounts and ratios are preliminary estimates
pending filing of the Company’s and Bank’s regulatory reports. |
14
Sterling Bancorp and SubsidiariesASSET QUALITY INFORMATION BY
PORTFOLIO(unaudited, in thousands, except share and per share
data)
|
As of and for the Quarter Ended |
Allowance for Credit Losses Roll Forward |
March 31, 2020 |
|
June 30, 2020 |
|
September 30, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
Balance, beginning of period |
$ |
106,238 |
|
|
|
$ |
326,444 |
|
|
|
$ |
365,489 |
|
|
|
$ |
325,943 |
|
|
|
$ |
326,100 |
|
|
Implementation of CECL accounting standard: |
|
|
|
|
|
|
|
|
|
Gross up from purchase credit impaired loans |
22,496 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Transition amount charged to equity |
68,088 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Provision for credit losses - loans |
136,577 |
|
|
|
56,606 |
|
|
|
31,000 |
|
|
|
27,500 |
|
|
|
10,000 |
|
|
Loan charge-offs1: |
|
|
|
|
|
|
|
|
|
Traditional C&I |
(298 |
) |
|
|
(3,988 |
) |
|
|
(1,089 |
) |
|
|
(17,757 |
) |
|
|
(1,027 |
) |
|
Asset-based lending |
(985 |
) |
|
|
(1,500 |
) |
|
|
(1,297 |
) |
|
|
— |
|
|
|
— |
|
|
Payroll finance |
— |
|
|
|
(560 |
) |
|
|
— |
|
|
|
(730 |
) |
|
|
— |
|
|
Factored receivables |
(7 |
) |
|
|
(3,731 |
) |
|
|
(6,893 |
) |
|
|
(2,099 |
) |
|
|
(4 |
) |
|
Equipment financing |
(4,793 |
) |
|
|
(7,863 |
) |
|
|
(42,128 |
) |
|
|
(3,445 |
) |
|
|
(2,408 |
) |
|
Commercial real estate |
(1,275 |
) |
|
|
(11 |
) |
|
|
(3,650 |
) |
|
|
(3,266 |
) |
|
|
(2,933 |
) |
|
Multi-family |
— |
|
|
|
(154 |
) |
|
|
— |
|
|
|
(430 |
) |
|
|
(3,230 |
) |
|
ADC |
(3 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
(307 |
) |
|
|
(5,000 |
) |
|
Residential mortgage |
(1,072 |
) |
|
|
(702 |
) |
|
|
(17,353 |
) |
|
|
(23 |
) |
|
|
(267 |
) |
|
Consumer |
(1,405 |
) |
|
|
(172 |
) |
|
|
(97 |
) |
|
|
(62 |
) |
|
|
(391 |
) |
|
Total charge-offs |
(9,838 |
) |
|
|
(18,682 |
) |
|
|
(72,507 |
) |
|
|
(28,119 |
) |
|
|
(15,260 |
) |
|
Recoveries of loans previously charged-off1: |
|
|
|
|
|
|
|
|
|
Traditional C&I |
475 |
|
|
|
116 |
|
|
|
677 |
|
|
|
194 |
|
|
|
468 |
|
|
Payroll finance |
9 |
|
|
|
1 |
|
|
|
262 |
|
|
|
38 |
|
|
|
2 |
|
|
Factored receivables |
4 |
|
|
|
1 |
|
|
|
185 |
|
|
|
122 |
|
|
|
406 |
|
|
Equipment financing |
1,105 |
|
|
|
387 |
|
|
|
816 |
|
|
|
217 |
|
|
|
854 |
|
|
Commercial real estate |
60 |
|
|
|
584 |
|
|
|
— |
|
|
|
174 |
|
|
|
487 |
|
|
Multi-family |
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Acquisition development & construction |
105 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Residential mortgage |
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
37 |
|
|
Consumer |
1,125 |
|
|
|
31 |
|
|
|
21 |
|
|
|
30 |
|
|
|
92 |
|
|
Total recoveries |
2,883 |
|
|
|
1,121 |
|
|
|
1,961 |
|
|
|
776 |
|
|
|
2,346 |
|
|
Net loan charge-offs |
(6,955 |
) |
|
|
(17,561 |
) |
|
|
(70,546 |
) |
|
|
(27,343 |
) |
|
|
(12,914 |
) |
|
Balance, end of period |
$ |
326,444 |
|
|
|
$ |
365,489 |
|
|
|
$ |
325,943 |
|
|
|
$ |
326,100 |
|
|
|
$ |
323,186 |
|
|
Asset Quality Data and Ratios |
|
|
|
|
|
|
|
|
|
Non-performing loans (“NPLs”) non-accrual |
$ |
252,205 |
|
|
|
$ |
260,333 |
|
|
|
$ |
180,795 |
|
|
|
$ |
166,889 |
|
|
|
$ |
168,555 |
|
|
NPLs still accruing |
1,545 |
|
|
|
272 |
|
|
|
56 |
|
|
|
170 |
|
|
|
2 |
|
|
Total NPLs |
253,750 |
|
|
|
260,605 |
|
|
|
180,851 |
|
|
|
167,059 |
|
|
|
168,557 |
|
|
Other real estate owned |
11,815 |
|
|
|
8,665 |
|
|
|
6,919 |
|
|
|
5,346 |
|
|
|
5,227 |
|
|
Non-performing assets (“NPAs”) |
$ |
265,565 |
|
|
|
$ |
269,270 |
|
|
|
$ |
187,770 |
|
|
|
$ |
172,405 |
|
|
|
$ |
173,784 |
|
|
Loans 30 to 89 days past due |
$ |
69,769 |
|
|
|
$ |
66,268 |
|
|
|
$ |
68,979 |
|
|
|
$ |
72,912 |
|
|
|
$ |
42,165 |
|
|
Net charge-offs as a % of average loans (annualized) |
0.13 |
|
% |
|
0.32 |
|
% |
|
1.27 |
|
% |
|
0.50 |
|
% |
|
0.25 |
|
% |
NPLs as a % of total loans |
1.17 |
|
|
|
1.17 |
|
|
|
0.81 |
|
|
|
0.76 |
|
|
|
0.80 |
|
|
NPAs as a % of total assets |
0.88 |
|
|
|
0.87 |
|
|
|
0.61 |
|
|
|
0.58 |
|
|
|
0.58 |
|
|
Allowance for credit losses as a % of NPLs |
128.6 |
|
|
|
140.2 |
|
|
|
180.2 |
|
|
|
195.2 |
|
|
|
191.7 |
|
|
Allowance for credit losses as a % of total loans |
1.50 |
|
|
|
1.64 |
|
|
|
1.46 |
|
|
|
1.49 |
|
|
|
1.53 |
|
|
Special mention loans |
$ |
132,356 |
|
|
|
$ |
141,805 |
|
|
|
$ |
204,267 |
|
|
|
$ |
461,458 |
|
|
|
$ |
494,452 |
|
|
Substandard loans |
402,393 |
|
|
|
415,917 |
|
|
|
375,427 |
|
|
|
528,760 |
|
|
|
590,109 |
|
|
Doubtful loans |
— |
|
|
|
— |
|
|
|
— |
|
|
|
304 |
|
|
|
295 |
|
|
|
|
|
|
|
|
|
|
|
|
1 There were no
charge-offs or recoveries on warehouse lending or public sector
finance loans during the periods presented. There were no
asset-based lending recoveries during the periods presented. |
15
Sterling Bancorp and SubsidiariesASSET QUALITY INFORMATION BY
PORTFOLIO(unaudited, in thousands, except share and per share
data)
|
At or for the quarter ended March 31, 2021 |
|
CECL ACL |
|
Total loans |
|
Crit/Class |
|
30-89 Days Delinquent |
|
NPLs |
|
NCOs |
|
ACL $ |
|
% of Portfolio |
Traditional C&I |
$ |
2,886,337 |
|
|
$ |
133,449 |
|
|
$ |
3,009 |
|
|
$ |
50,351 |
|
|
$ |
(559 |
) |
|
$ |
46,393 |
|
|
1.61 |
% |
Asset Based Lending |
693,015 |
|
|
106,351 |
|
|
— |
|
|
10,149 |
|
|
— |
|
|
11,165 |
|
|
1.61 |
|
Payroll Finance |
153,987 |
|
|
3,489 |
|
|
— |
|
|
2,313 |
|
|
2 |
|
|
1,519 |
|
|
0.99 |
|
Mortgage Warehouse |
1,394,945 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,232 |
|
|
0.09 |
|
Factored Receivables |
229,629 |
|
|
— |
|
|
— |
|
|
— |
|
|
402 |
|
|
3,237 |
|
|
1.41 |
|
Equipment Finance |
1,475,716 |
|
|
53,850 |
|
|
2,514 |
|
|
28,870 |
|
|
(1,554 |
) |
|
28,025 |
|
|
1.90 |
|
Public Sector Finance |
1,617,986 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,632 |
|
|
0.29 |
|
Commercial Real Estate |
6,029,281 |
|
|
588,163 |
|
|
14,039 |
|
|
24,269 |
|
|
(2,446 |
) |
|
159,422 |
|
|
2.64 |
|
Multi-family |
4,391,850 |
|
|
145,730 |
|
|
14,029 |
|
|
778 |
|
|
(3,230 |
) |
|
33,376 |
|
|
0.76 |
|
ADC |
618,295 |
|
|
26,613 |
|
|
— |
|
|
25,000 |
|
|
(5,000 |
) |
|
13,803 |
|
|
2.23 |
|
Total commercial loans |
19,491,041 |
|
|
1,057,645 |
|
|
33,591 |
|
|
141,730 |
|
|
(12,385 |
) |
|
302,804 |
|
|
1.55 |
|
Residential |
1,486,597 |
|
|
17,368 |
|
|
7,347 |
|
|
17,081 |
|
|
(230 |
) |
|
15,970 |
|
|
1.07 |
|
Consumer |
174,335 |
|
|
9,843 |
|
|
1,229 |
|
|
9,746 |
|
|
(299 |
) |
|
4,412 |
|
|
2.53 |
|
Total portfolio loans |
$ |
21,151,973 |
|
|
$ |
1,084,856 |
|
|
$ |
42,167 |
|
|
$ |
168,557 |
|
|
$ |
(12,914 |
) |
|
$ |
323,186 |
|
|
1.53 |
|
|
At or for the quarter ended December 31, 2020 |
|
CECL ACL |
|
Total loans |
|
Crit/Class |
|
30-89 Days Delinquent |
|
NPLs |
|
NCOs |
|
ACL $ |
|
% of Portfolio |
Traditional C&I |
$ |
2,920,205 |
|
|
$ |
109,258 |
|
|
$ |
1,168 |
|
|
$ |
19,317 |
|
|
$ |
(17,563 |
) |
|
$ |
42,670 |
|
|
1.46 |
% |
Asset Based Lending |
803,004 |
|
|
123,266 |
|
|
— |
|
|
5,255 |
|
|
— |
|
|
12,762 |
|
|
1.59 |
|
Payroll Finance |
159,237 |
|
|
2,300 |
|
|
— |
|
|
2,300 |
|
|
(692 |
) |
|
1,957 |
|
|
1.23 |
|
Mortgage Warehouse |
1,953,677 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,724 |
|
|
0.09 |
|
Factored Receivables |
220,217 |
|
|
5,523 |
|
|
— |
|
|
— |
|
|
(1,977 |
) |
|
2,904 |
|
|
1.32 |
|
Equipment Finance |
1,531,109 |
|
|
52,755 |
|
|
34,016 |
|
|
30,636 |
|
|
(3,228 |
) |
|
31,794 |
|
|
2.08 |
|
Public Sector Finance |
1,572,819 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,516 |
|
|
0.29 |
|
Commercial Real Estate |
5,831,990 |
|
|
530,199 |
|
|
17,229 |
|
|
46,127 |
|
|
(3,092 |
) |
|
155,313 |
|
|
2.66 |
|
Multi-family |
4,406,660 |
|
|
106,018 |
|
|
11,546 |
|
|
4,485 |
|
|
(430 |
) |
|
33,320 |
|
|
0.76 |
|
ADC |
642,943 |
|
|
31,407 |
|
|
— |
|
|
30,000 |
|
|
(307 |
) |
|
17,927 |
|
|
2.79 |
|
Total commercial loans |
20,041,861 |
|
|
960,726 |
|
|
63,959 |
|
|
138,120 |
|
|
(27,289 |
) |
|
304,887 |
|
|
1.52 |
|
Residential |
1,616,641 |
|
|
19,410 |
|
|
7,911 |
|
|
18,661 |
|
|
(22 |
) |
|
16,529 |
|
|
1.02 |
|
Consumer |
189,907 |
|
|
10,386 |
|
|
1,042 |
|
|
10,278 |
|
|
(32 |
) |
|
4,684 |
|
|
2.47 |
|
Total portfolio loans |
$ |
21,848,409 |
|
|
$ |
990,522 |
|
|
$ |
72,912 |
|
|
$ |
167,059 |
|
|
$ |
(27,343 |
) |
|
$ |
326,100 |
|
|
1.49 |
|
16
Sterling Bancorp and SubsidiariesNon-GAAP Financial
Measures(unaudited, in thousands, except share and per share
data)
|
For the Quarter Ended |
|
December 31, 2020 |
|
March 31, 2021 |
|
Averagebalance |
|
Interest |
|
Yield/Rate |
|
Averagebalance |
|
Interest |
|
Yield/Rate |
|
(Dollars in thousands) |
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
Traditional C&I and commercial finance loans |
$ |
9,114,999 |
|
|
$ |
83,429 |
|
|
3.64 |
% |
|
$ |
8,646,272 |
|
|
$ |
78,006 |
|
|
3.66 |
% |
Commercial real estate (includes multi-family) |
10,191,707 |
|
|
105,193 |
|
|
4.11 |
|
|
10,283,292 |
|
|
103,625 |
|
|
4.09 |
|
ADC |
685,368 |
|
|
6,500 |
|
|
3.77 |
|
|
624,259 |
|
|
5,856 |
|
|
3.80 |
|
Commercial loans |
19,992,074 |
|
|
195,122 |
|
|
3.88 |
|
|
19,553,823 |
|
|
187,487 |
|
|
3.89 |
|
Consumer loans |
195,870 |
|
|
2,028 |
|
|
4.12 |
|
|
182,461 |
|
|
2,081 |
|
|
4.63 |
|
Residential mortgage loans |
1,691,567 |
|
|
17,372 |
|
|
4.11 |
|
|
1,558,266 |
|
|
16,287 |
|
|
4.18 |
|
Total gross loans 1 |
21,879,511 |
|
|
214,522 |
|
|
3.90 |
|
|
21,294,550 |
|
|
205,855 |
|
|
3.92 |
|
Securities taxable |
2,191,333 |
|
|
15,679 |
|
|
2.85 |
|
|
2,103,768 |
|
|
15,352 |
|
|
2.96 |
|
Securities non-taxable |
1,964,451 |
|
|
14,985 |
|
|
3.05 |
|
|
1,951,210 |
|
|
14,858 |
|
|
3.05 |
|
Interest earning deposits |
331,587 |
|
|
105 |
|
|
0.13 |
|
|
648,178 |
|
|
149 |
|
|
0.09 |
|
FHLB and Federal Reserve Bank Stock |
156,109 |
|
|
465 |
|
|
1.18 |
|
|
152,026 |
|
|
753 |
|
|
2.01 |
|
Total securities and other earning assets |
4,643,480 |
|
|
31,234 |
|
|
2.68 |
|
|
4,855,182 |
|
|
31,112 |
|
|
2.60 |
|
Total interest earning assets |
26,522,991 |
|
|
245,756 |
|
|
3.69 |
|
|
26,149,732 |
|
|
236,967 |
|
|
3.68 |
|
Non-interest earning assets |
3,501,174 |
|
|
|
|
|
|
3,432,873 |
|
|
|
|
|
Total assets |
$ |
30,024,165 |
|
|
|
|
|
|
$ |
29,582,605 |
|
|
|
|
|
Interest bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Demand and savings 2 deposits |
$ |
7,582,585 |
|
|
$ |
3,230 |
|
|
0.17 |
% |
|
$ |
7,699,037 |
|
|
$ |
2,513 |
|
|
0.13 |
% |
Money market deposits |
8,577,920 |
|
|
6,065 |
|
|
0.28 |
|
|
8,382,533 |
|
|
3,813 |
|
|
0.18 |
|
Certificates of deposit |
2,158,348 |
|
|
4,122 |
|
|
0.76 |
|
|
1,943,820 |
|
|
2,542 |
|
|
0.53 |
|
Total interest bearing deposits |
18,318,853 |
|
|
13,417 |
|
|
0.29 |
|
|
18,025,390 |
|
|
8,868 |
|
|
0.20 |
|
Other borrowings |
261,787 |
|
|
518 |
|
|
0.79 |
|
|
85,957 |
|
|
36 |
|
|
0.17 |
|
Subordinated debentures - Bank |
168,222 |
|
|
2,293 |
|
|
5.45 |
|
|
143,722 |
|
|
1,957 |
|
|
5.45 |
|
Subordinated debentures - Company |
422,048 |
|
|
4,356 |
|
|
4.13 |
|
|
491,963 |
|
|
5,072 |
|
|
4.12 |
|
Total borrowings |
852,057 |
|
|
7,167 |
|
|
3.35 |
|
|
721,642 |
|
|
7,065 |
|
|
3.97 |
|
Total interest bearing liabilities |
19,170,910 |
|
|
20,584 |
|
|
0.43 |
|
|
18,747,032 |
|
|
15,933 |
|
|
0.34 |
|
Non-interest bearing deposits |
5,530,334 |
|
|
|
|
|
|
5,521,538 |
|
|
|
|
|
Other non-interest bearing liabilities |
731,151 |
|
|
|
|
|
|
697,375 |
|
|
|
|
|
Total liabilities |
25,432,395 |
|
|
|
|
|
|
24,965,945 |
|
|
|
|
|
Stockholders’ equity |
4,591,770 |
|
|
|
|
|
|
4,616,660 |
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
30,024,165 |
|
|
|
|
|
|
$ |
29,582,605 |
|
|
|
|
|
Net interest rate spread 3 |
|
|
|
|
3.26 |
% |
|
|
|
|
|
3.34 |
% |
Net interest earning assets 4 |
$ |
7,352,081 |
|
|
|
|
|
|
$ |
7,402,700 |
|
|
|
|
|
Net interest margin - tax equivalent |
|
|
225,172 |
|
|
3.38 |
% |
|
|
|
221,034 |
|
|
3.43 |
% |
Less tax equivalent adjustment |
|
|
(3,146 |
) |
|
|
|
|
|
(3,120 |
) |
|
|
Net interest income |
|
|
222,026 |
|
|
|
|
|
|
217,914 |
|
|
|
Accretion income on acquired loans |
|
|
8,560 |
|
|
|
|
|
|
8,272 |
|
|
|
Tax equivalent net interest
margin excluding accretion income on acquired loans |
|
|
$ |
216,612 |
|
|
3.25 |
% |
|
|
|
$ |
212,762 |
|
|
3.30 |
% |
Ratio of interest earning
assets to interest bearing liabilities |
138.4 |
% |
|
|
|
|
|
139.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Average balances include loans held for sale and
non-accrual loans. Interest includes prepayment fees and late
charges.2 Includes club accounts and interest bearing mortgage
escrow balances.3 Net interest rate spread represents the
difference between the tax equivalent yield on average interest
earning assets and the cost of average interest bearing
liabilities.4 Net interest earning assets represents total interest
earning assets less total interest bearing liabilities.
17
Sterling Bancorp and SubsidiariesNon-GAAP Financial
Measures(unaudited, in thousands, except share and per share
data)
|
For the Quarter Ended |
|
March 31, 2020 |
|
March 31, 2021 |
|
Averagebalance |
|
Interest |
|
Yield/Rate |
|
Averagebalance |
|
Interest |
|
Yield/Rate |
|
(Dollars in thousands) |
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
Traditional C&I and commercial finance loans |
$ |
8,034,108 |
|
|
$ |
89,150 |
|
|
4.46 |
% |
|
$ |
8,646,272 |
|
|
$ |
78,006 |
|
|
3.66 |
% |
Commercial real estate (includes multi-family) |
10,288,977 |
|
|
110,742 |
|
|
4.33 |
|
|
10,283,292 |
|
|
103,625 |
|
|
4.09 |
|
ADC |
497,009 |
|
|
6,320 |
|
|
5.11 |
|
|
624,259 |
|
|
5,856 |
|
|
3.80 |
|
Commercial loans |
18,820,094 |
|
|
206,212 |
|
|
4.41 |
|
|
19,553,823 |
|
|
187,487 |
|
|
3.89 |
|
Consumer loans |
233,643 |
|
|
2,939 |
|
|
5.06 |
|
|
182,461 |
|
|
2,081 |
|
|
4.63 |
|
Residential mortgage loans |
2,152,440 |
|
|
26,288 |
|
|
4.89 |
|
|
1,558,266 |
|
|
16,287 |
|
|
4.18 |
|
Total gross loans 1 |
21,206,177 |
|
|
235,439 |
|
|
4.47 |
|
|
21,294,550 |
|
|
205,855 |
|
|
3.92 |
|
Securities taxable |
2,883,367 |
|
|
20,629 |
|
|
2.88 |
|
|
2,103,768 |
|
|
15,352 |
|
|
2.96 |
|
Securities non-taxable |
2,163,206 |
|
|
16,451 |
|
|
3.04 |
|
|
1,951,210 |
|
|
14,858 |
|
|
3.05 |
|
Interest earning deposits |
489,691 |
|
|
1,832 |
|
|
1.50 |
|
|
648,178 |
|
|
149 |
|
|
0.09 |
|
FHLB and Federal Reserve Bank stock |
237,820 |
|
|
2,630 |
|
|
4.45 |
|
|
152,026 |
|
|
753 |
|
|
2.01 |
|
Total securities and other earning assets |
5,774,084 |
|
|
41,542 |
|
|
2.89 |
|
|
4,855,182 |
|
|
31,112 |
|
|
2.60 |
|
Total interest earning assets |
26,980,261 |
|
|
276,981 |
|
|
4.13 |
|
|
26,149,732 |
|
|
236,967 |
|
|
3.68 |
|
Non-interest earning assets |
3,504,172 |
|
|
|
|
|
|
3,432,873 |
|
|
|
|
|
Total assets |
$ |
30,484,433 |
|
|
|
|
|
|
$ |
29,582,605 |
|
|
|
|
|
Interest bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Demand and savings 2 deposits |
$ |
7,416,679 |
|
|
$ |
13,064 |
|
|
0.71 |
% |
|
$ |
7,699,037 |
|
|
$ |
2,513 |
|
|
0.13 |
% |
Money market deposits |
7,691,381 |
|
|
18,396 |
|
|
0.96 |
|
|
8,382,533 |
|
|
3,813 |
|
|
0.18 |
|
Certificates of deposit |
3,237,990 |
|
|
14,321 |
|
|
1.78 |
|
|
1,943,820 |
|
|
2,542 |
|
|
0.53 |
|
Total interest bearing deposits |
18,346,050 |
|
|
45,781 |
|
|
1.00 |
|
|
18,025,390 |
|
|
8,868 |
|
|
0.20 |
|
Senior notes |
173,323 |
|
|
1,434 |
|
|
3.31 |
|
|
— |
|
|
— |
|
|
— |
|
Other borrowings |
1,963,428 |
|
|
9,353 |
|
|
1.92 |
|
|
85,957 |
|
|
36 |
|
|
0.17 |
|
Subordinated debentures - Bank |
173,203 |
|
|
2,360 |
|
|
5.45 |
|
|
143,722 |
|
|
1,957 |
|
|
5.45 |
|
Subordinated debentures - Company |
270,968 |
|
|
2,827 |
|
|
4.17 |
|
|
491,963 |
|
|
5,072 |
|
|
4.12 |
|
Total borrowings |
2,580,922 |
|
|
15,974 |
|
|
2.49 |
|
|
721,642 |
|
|
7,065 |
|
|
3.97 |
|
Total interest bearing liabilities |
20,926,972 |
|
|
61,755 |
|
|
1.19 |
|
|
18,747,032 |
|
|
15,933 |
|
|
0.34 |
|
Non-interest bearing deposits |
4,346,518 |
|
|
|
|
|
|
5,521,538 |
|
|
|
|
|
Other non-interest bearing liabilities |
704,406 |
|
|
|
|
|
|
697,375 |
|
|
|
|
|
Total liabilities |
25,977,896 |
|
|
|
|
|
|
24,965,945 |
|
|
|
|
|
Stockholders’ equity |
4,506,537 |
|
|
|
|
|
|
4,616,660 |
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
30,484,433 |
|
|
|
|
|
|
$ |
29,582,605 |
|
|
|
|
|
Net interest rate spread 3 |
|
|
|
|
2.94 |
% |
|
|
|
|
|
3.34 |
% |
Net interest earning assets 4 |
$ |
6,053,289 |
|
|
|
|
|
|
$ |
7,402,700 |
|
|
|
|
|
Net interest margin - tax equivalent |
|
|
215,226 |
|
|
3.21 |
% |
|
|
|
221,034 |
|
|
3.43 |
% |
Less tax equivalent adjustment |
|
|
(3,454 |
) |
|
|
|
|
|
(3,120 |
) |
|
|
Net interest income |
|
|
211,772 |
|
|
|
|
|
|
217,914 |
|
|
|
Accretion income on acquired loans |
|
|
10,686 |
|
|
|
|
|
|
8,272 |
|
|
|
Tax equivalent net interest
margin excluding accretion income on acquired loans |
|
|
$ |
204,540 |
|
|
3.05 |
% |
|
|
|
$ |
212,762 |
|
|
3.30 |
% |
Ratio of interest earning
assets to interest bearing liabilities |
128.9 |
% |
|
|
|
|
|
139.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Average balances include loans held for sale and
non-accrual loans. Interest includes prepayment fees and late
charges.2 Includes club accounts and interest bearing mortgage
escrow balances.3 Net interest rate spread represents the
difference between the tax equivalent yield on average interest
earning assets and the cost of average interest bearing
liabilities.4 Net interest earning assets represents total interest
earning assets less total interest bearing liabilities.
18
Sterling Bancorp and SubsidiariesNon-GAAP Financial
Measures(unaudited, in thousands, except share and per share
data)
The Company provides supplemental reporting of non-GAAP/adjusted
financial measures as management believes this information is
useful to investors. See legend beginning on page 22. |
|
As of and for the Quarter Ended |
|
March 31, 2020 |
|
June 30, 2020 |
|
September 30, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
|
The following table shows the reconciliation of pretax
pre-provision net revenue to adjusted pretax pre-provision net
revenue1: |
|
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
211,772 |
|
|
|
$ |
213,299 |
|
|
|
$ |
217,824 |
|
|
|
$ |
222,026 |
|
|
|
$ |
217,914 |
|
|
Non-interest income |
47,326 |
|
|
|
26,090 |
|
|
|
28,225 |
|
|
|
33,921 |
|
|
|
32,356 |
|
|
Total net revenue |
259,098 |
|
|
|
239,389 |
|
|
|
246,049 |
|
|
|
255,947 |
|
|
|
250,270 |
|
|
Non-interest expense |
114,713 |
|
|
|
124,881 |
|
|
|
119,362 |
|
|
|
133,473 |
|
|
|
118,165 |
|
|
PPNR |
144,385 |
|
|
|
114,508 |
|
|
|
126,687 |
|
|
|
122,474 |
|
|
|
132,105 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Accretion income |
(10,686 |
) |
|
|
(10,086 |
) |
|
|
(9,172 |
) |
|
|
(8,560 |
) |
|
|
(8,272 |
) |
|
Net (gain) loss on sale of securities |
(8,412 |
) |
|
|
(485 |
) |
|
|
(642 |
) |
|
|
111 |
|
|
|
(719 |
) |
|
Loss on extinguishment of debt |
744 |
|
|
|
9,723 |
|
|
|
6,241 |
|
|
|
2,749 |
|
|
|
— |
|
|
Impairment related to financial centers and real estate
consolidation strategy |
— |
|
|
|
— |
|
|
|
— |
|
|
|
13,311 |
|
|
|
633 |
|
|
Amortization of non-compete agreements and acquired customer list
intangible assets |
172 |
|
|
|
172 |
|
|
|
172 |
|
|
|
172 |
|
|
|
148 |
|
|
Adjusted PPNR |
$ |
126,203 |
|
|
|
$ |
113,832 |
|
|
|
$ |
123,286 |
|
|
|
$ |
130,257 |
|
|
|
$ |
123,895 |
|
|
19
Sterling Bancorp and SubsidiariesNON-GAAP FINANCIAL
MEASURES(unaudited, in thousands, except share and per share
data)
The Company provides supplemental reporting of non-GAAP/adjusted
financial measures as management believes this information is
useful to investors. See legend beginning on page 22. |
|
As of and for the Quarter Ended |
|
March 31, 2020 |
|
June 30, 2020 |
|
September 30, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
|
The following table shows the reconciliation of
stockholders’ equity to tangible common equity and the tangible
common equity ratio2: |
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
30,335,036 |
|
|
|
$ |
30,839,893 |
|
|
|
$ |
30,617,722 |
|
|
|
$ |
29,820,138 |
|
|
|
$ |
29,914,282 |
|
|
Goodwill and other intangibles |
(1,789,646 |
) |
|
|
(1,785,446 |
) |
|
|
(1,781,246 |
) |
|
|
(1,777,046 |
) |
|
|
(1,773,270 |
) |
|
Tangible assets |
28,545,390 |
|
|
|
29,054,447 |
|
|
|
28,836,476 |
|
|
|
28,043,092 |
|
|
|
28,141,012 |
|
|
Stockholders’ equity |
4,422,424 |
|
|
|
4,484,187 |
|
|
|
4,557,785 |
|
|
|
4,590,514 |
|
|
|
4,620,164 |
|
|
Preferred stock |
(137,363 |
) |
|
|
(137,142 |
) |
|
|
(136,917 |
) |
|
|
(136,689 |
) |
|
|
(136,458 |
) |
|
Goodwill and other intangibles |
(1,789,646 |
) |
|
|
(1,785,446 |
) |
|
|
(1,781,246 |
) |
|
|
(1,777,046 |
) |
|
|
(1,773,270 |
) |
|
Tangible common stockholders’ equity |
2,495,415 |
|
|
|
2,561,599 |
|
|
|
2,639,622 |
|
|
|
2,676,779 |
|
|
|
2,710,436 |
|
|
Common stock outstanding at period end |
194,460,656 |
|
|
|
194,458,805 |
|
|
|
194,458,841 |
|
|
|
192,923,371 |
|
|
|
192,567,901 |
|
|
Common stockholders’ equity as
a % of total assets |
14.13 |
|
% |
|
14.10 |
|
% |
|
14.44 |
|
% |
|
14.94 |
|
% |
|
14.99 |
|
% |
Book value per common share |
$ |
22.04 |
|
|
|
$ |
22.35 |
|
|
|
$ |
22.73 |
|
|
|
$ |
23.09 |
|
|
|
$ |
23.28 |
|
|
Tangible common equity as a %
of tangible assets |
8.74 |
|
% |
|
8.82 |
|
% |
|
9.15 |
|
% |
|
9.55 |
|
% |
|
9.63 |
|
% |
Tangible book value per common share |
$ |
12.83 |
|
|
|
$ |
13.17 |
|
|
|
$ |
13.57 |
|
|
|
$ |
13.87 |
|
|
|
$ |
14.08 |
|
|
|
The following table shows the reconciliation of reported
return on average tangible common equity and adjusted return on
average tangible common
equity3: |
|
|
|
|
|
|
|
|
|
|
Average stockholders’ equity |
$ |
4,506,537 |
|
|
|
$ |
4,464,403 |
|
|
|
$ |
4,530,334 |
|
|
|
$ |
4,591,770 |
|
|
|
$ |
4,616,660 |
|
|
Average preferred stock |
(137,579 |
) |
|
|
(137,361 |
) |
|
|
(137,139 |
) |
|
|
(136,914 |
) |
|
|
(136,687 |
) |
|
Average goodwill and other
intangibles |
(1,792,400 |
) |
|
|
(1,788,200 |
) |
|
|
(1,784,016 |
) |
|
|
(1,779,801 |
) |
|
|
(1,775,746 |
) |
|
Average tangible common
stockholders’ equity |
2,576,558 |
|
|
|
2,538,842 |
|
|
|
2,609,179 |
|
|
|
2,675,055 |
|
|
|
2,704,227 |
|
|
Net income available to common |
12,171 |
|
|
|
48,820 |
|
|
|
82,438 |
|
|
|
74,457 |
|
|
|
97,187 |
|
|
Net income, if annualized |
48,951 |
|
|
|
196,353 |
|
|
|
327,960 |
|
|
|
296,209 |
|
|
|
394,147 |
|
|
Reported return on avg
tangible common equity |
1.90 |
|
% |
|
7.73 |
|
% |
|
12.57 |
|
% |
|
11.07 |
|
% |
|
14.58 |
|
% |
Adjusted net (loss) income (see reconciliation on page 22) |
$ |
(3,124 |
) |
|
|
$ |
56,926 |
|
|
|
$ |
87,682 |
|
|
|
$ |
94,323 |
|
|
|
$ |
97,603 |
|
|
Annualized adjusted net (loss) income |
(12,565 |
) |
|
|
228,955 |
|
|
|
348,822 |
|
|
|
375,242 |
|
|
|
395,834 |
|
|
Adjusted return on average
tangible common equity |
(0.49 |
) |
% |
|
9.02 |
|
% |
|
13.37 |
|
% |
|
14.03 |
|
% |
|
14.64 |
|
% |
|
|
|
|
|
|
|
|
|
|
The following table shows the reconciliation of reported
return on average tangible assets and adjusted return on average
tangible assets4: |
|
|
|
|
|
|
|
|
|
|
Average assets |
$ |
30,484,433 |
|
|
|
$ |
30,732,914 |
|
|
|
$ |
30,652,856 |
|
|
|
$ |
30,024,165 |
|
|
|
$ |
29,582,605 |
|
|
Average goodwill and other intangibles |
(1,792,400 |
) |
|
|
(1,788,200 |
) |
|
|
(1,784,016 |
) |
|
|
(1,779,801 |
) |
|
|
(1,775,746 |
) |
|
Average tangible assets |
28,692,033 |
|
|
|
28,944,714 |
|
|
|
28,868,840 |
|
|
|
28,244,364 |
|
|
|
27,806,859 |
|
|
Net income available to common |
12,171 |
|
|
|
48,820 |
|
|
|
82,438 |
|
|
|
74,457 |
|
|
|
97,187 |
|
|
Net income, if annualized |
48,951 |
|
|
|
196,353 |
|
|
|
327,960 |
|
|
|
296,209 |
|
|
|
394,147 |
|
|
Reported return on average tangible assets |
0.17 |
|
% |
|
0.68 |
|
% |
|
1.14 |
|
% |
|
1.05 |
|
% |
|
1.42 |
|
% |
Adjusted net (loss) income
(see reconciliation on page 22) |
$ |
(3,124 |
) |
|
|
$ |
56,926 |
|
|
|
$ |
87,682 |
|
|
|
$ |
94,323 |
|
|
|
$ |
97,603 |
|
|
Annualized adjusted net (loss) income |
(12,565 |
) |
|
|
228,955 |
|
|
|
348,822 |
|
|
|
375,242 |
|
|
|
395,834 |
|
|
Adjusted return on average tangible assets |
(0.04 |
) |
% |
|
0.79 |
|
% |
|
1.21 |
|
% |
|
1.33 |
|
% |
|
1.42 |
|
% |
|
|
|
|
|
|
|
|
|
|
20
Sterling Bancorp and SubsidiariesNON-GAAP FINANCIAL
MEASURES(unaudited, in thousands, except share and per share
data)
The Company provides supplemental reporting of non-GAAP/adjusted
financial measures as management believes this information is
useful to investors. See legend beginning on page 22. |
|
|
As of and for the Quarter Ended |
|
March 31, 2020 |
|
June 30, 2020 |
|
September 30, 2020 |
|
December 31, 2020 |
|
March 31, 2021 |
The following table shows the reconciliation of the
reported operating efficiency ratio and adjusted operating
efficiency ratio5: |
|
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
211,772 |
|
|
|
$ |
213,299 |
|
|
|
$ |
217,824 |
|
|
|
$ |
222,026 |
|
|
|
$ |
217,914 |
|
|
Non-interest income |
47,326 |
|
|
|
26,090 |
|
|
|
28,225 |
|
|
|
33,921 |
|
|
|
32,356 |
|
|
Total revenue |
259,098 |
|
|
|
239,389 |
|
|
|
246,049 |
|
|
|
255,947 |
|
|
|
250,270 |
|
|
Tax equivalent adjustment on
securities |
3,454 |
|
|
|
3,411 |
|
|
|
3,258 |
|
|
|
3,146 |
|
|
|
3,120 |
|
|
Net (gain) loss on sale of securities |
(8,412 |
) |
|
|
(485 |
) |
|
|
(642 |
) |
|
|
111 |
|
|
|
(719 |
) |
|
Depreciation of operating leases |
(3,492 |
) |
|
|
(3,136 |
) |
|
|
(3,130 |
) |
|
|
(3,130 |
) |
|
|
(3,124 |
) |
|
Adjusted total revenue |
250,648 |
|
|
|
239,179 |
|
|
|
245,535 |
|
|
|
256,074 |
|
|
|
249,547 |
|
|
Non-interest expense |
114,713 |
|
|
|
124,881 |
|
|
|
119,362 |
|
|
|
133,473 |
|
|
|
118,165 |
|
|
Impairment related to
financial centers and real estate consolidation strategy |
— |
|
|
|
— |
|
|
|
— |
|
|
|
(13,311 |
) |
|
|
(633 |
) |
|
Loss on extinguishment of
borrowings |
(744 |
) |
|
|
(9,723 |
) |
|
|
(6,241 |
) |
|
|
(2,749 |
) |
|
|
— |
|
|
Depreciation of operating leases |
(3,492 |
) |
|
|
(3,136 |
) |
|
|
(3,130 |
) |
|
|
(3,130 |
) |
|
|
(3,124 |
) |
|
Amortization of intangible assets |
(4,200 |
) |
|
|
(4,200 |
) |
|
|
(4,200 |
) |
|
|
(4,200 |
) |
|
|
(3,776 |
) |
|
Adjusted non-interest expense |
106,277 |
|
|
|
107,822 |
|
|
|
105,791 |
|
|
|
110,083 |
|
|
|
110,632 |
|
|
Reported operating efficiency ratio |
44.3 |
|
% |
|
52.2 |
|
% |
|
48.5 |
|
% |
|
52.1 |
|
% |
|
47.2 |
|
% |
Adjusted operating efficiency ratio |
42.4 |
|
|
|
45.1 |
|
|
|
43.1 |
|
|
|
43.0 |
|
|
|
44.3 |
|
|
|
|
|
|
|
|
|
|
|
|
The following table shows the reconciliation of reported
net income (GAAP) and earnings per share to adjusted net income
available to common stockholders (non-GAAP) and adjusted diluted
earnings per
share(non-GAAP)6: |
|
|
|
|
|
|
|
|
|
|
Income before income tax expense |
$ |
6,105 |
|
|
|
$ |
57,902 |
|
|
|
$ |
96,687 |
|
|
|
$ |
94,974 |
|
|
|
$ |
122,105 |
|
|
Income tax (benefit) expense |
(8,042 |
) |
|
|
7,110 |
|
|
|
12,280 |
|
|
|
18,551 |
|
|
|
22,955 |
|
|
Net income (GAAP) |
14,147 |
|
|
|
50,792 |
|
|
|
84,407 |
|
|
|
76,423 |
|
|
|
99,150 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Net (gain) loss on sale of securities |
(8,412 |
) |
|
|
(485 |
) |
|
|
(642 |
) |
|
|
111 |
|
|
|
(719 |
) |
|
Loss on extinguishment of debt |
744 |
|
|
|
9,723 |
|
|
|
6,241 |
|
|
|
2,749 |
|
|
|
— |
|
|
Impairment related to financial centers and real estate
consolidation strategy. |
— |
|
|
|
— |
|
|
|
— |
|
|
|
13,311 |
|
|
|
633 |
|
|
Amortization of non-compete agreements and acquired customer list
intangible assets |
172 |
|
|
|
172 |
|
|
|
172 |
|
|
|
172 |
|
|
|
148 |
|
|
Total pre-tax adjustments |
(7,496 |
) |
|
|
9,410 |
|
|
|
5,771 |
|
|
|
16,343 |
|
|
|
62 |
|
|
Adjusted pre-tax (loss) income |
(1,391 |
) |
|
|
67,312 |
|
|
|
102,458 |
|
|
|
111,317 |
|
|
|
122,167 |
|
|
Adjusted income tax (benefit) expense |
(243 |
) |
|
|
8,414 |
|
|
|
12,807 |
|
|
|
15,028 |
|
|
|
22,601 |
|
|
Adjusted net (loss) income
(non-GAAP) |
(1,148 |
) |
|
|
58,898 |
|
|
|
89,651 |
|
|
|
96,289 |
|
|
|
99,566 |
|
|
Preferred stock dividend |
1,976 |
|
|
|
1,972 |
|
|
|
1,969 |
|
|
|
1,966 |
|
|
|
1,963 |
|
|
Adjusted net (loss) income
available to common stockholders (non-GAAP) |
$ |
(3,124 |
) |
|
|
$ |
56,926 |
|
|
|
$ |
87,682 |
|
|
|
$ |
94,323 |
|
|
|
$ |
97,603 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
shares |
196,709,038 |
|
|
|
193,604,431 |
|
|
|
193,715,943 |
|
|
|
193,530,930 |
|
|
|
192,621,907 |
|
|
Reported diluted EPS (GAAP) |
$ |
0.06 |
|
|
|
$ |
0.25 |
|
|
|
$ |
0.43 |
|
|
|
$ |
0.38 |
|
|
|
$ |
0.50 |
|
|
Adjusted diluted EPS
(non-GAAP) |
(0.02 |
) |
|
|
0.29 |
|
|
|
0.45 |
|
|
|
0.49 |
|
|
|
0.51 |
|
|
The non-GAAP/as adjusted measures presented above
are used by our management and the Company’s Board of Directors on
a regular basis in addition to our GAAP results to facilitate the
assessment of our financial performance and to assess our
performance compared to our annual budget and strategic plans.
These non-GAAP/adjusted financial measures complement our GAAP
reporting and are presented above to provide investors, analysts,
regulators and others information that we use to manage and
evaluate our performance each period. This information supplements
our GAAP reported results, and should not be viewed in isolation
from, or as a substitute for, our GAAP results. When
non-GAAP/adjusted measures are impacted by income tax expense, we
present the pre-tax amount for the income and expense items that
result in the non-GAAP adjustments and present the income tax
expense impact at the effective tax rate in effect for the period
presented.
21
Sterling Bancorp and SubsidiariesNON-GAAP FINANCIAL
MEASURES(unaudited, in thousands, except share and per share
data)
1 PPNR is a non-GAAP financial measure calculated
by summing our GAAP net interest income plus GAAP non-interest
income minus our GAAP non-interest expense and eliminating
provision for credit losses and income taxes. We believe the use of
PPNR provides useful information to readers of our financial
statements because it enables an assessment of our ability to
generate earnings to cover credit losses through a credit cycle.
Adjusted PPNR includes the adjustments we make for adjusted
earnings and excludes accretion income. We believe adjusted PPNR
supplements our PPNR calculation. We use this calculation to assess
our performance in the current operating environment.
2 Stockholders’ equity as a percentage of total
assets, book value per common share, tangible common equity as a
percentage of tangible assets and tangible book common value per
share provides information to help assess our capital position and
financial strength. We believe tangible book measures improve
comparability to other banking organizations that have not engaged
in acquisitions that have resulted in the accumulation of goodwill
and other intangible assets.
3 Reported return on average tangible common equity
and adjusted return on average tangible common equity measures
provide information to evaluate the use of our tangible common
equity.
4 Reported return on average tangible assets and
adjusted return on average tangible assets measures provide
information to help assess our profitability.
5 The reported operating efficiency ratio is a
non-GAAP measure calculated by dividing our GAAP non-interest
expense by the sum of our GAAP net interest income plus GAAP
non-interest income. The adjusted operating efficiency ratio is a
non-GAAP measure calculated by dividing non-interest expense
adjusted for intangible asset amortization and certain expenses
generally associated with discrete merger transactions and
non-recurring strategic plans by the sum of net interest income
plus non-interest income plus the tax equivalent adjustment on
securities income and elimination of the impact of gain or loss on
sale of securities. The adjusted operating efficiency ratio is a
measure we use to assess our operating performance.
6 Adjusted net income available to common
stockholders and adjusted diluted earnings per share present a
summary of our earnings, which includes adjustments to exclude
certain revenues and expenses (generally associated with discrete
merger transactions and non-recurring strategic plans) to help in
assessing our profitability.
22
STERLING BANCORP CONTACT: |
Emlen Harmon, Managing
Director - Investor Relations |
212.309.7646 |
http://www.sterlingbancorp.com |
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