MOUNT LAUREL, N.J., Feb. 9 /PRNewswire-FirstCall/ -- Sterling Bank
(NASDAQ:STNJ) today reported income before taxes of $1,190,000 for
the year ended December 31, 2006. This compares to the year ended
December 31, 2005 total of $2,597,000. This result reflects, as
noted previously, the absorption of the increased operating
expenses related to the expansion of the Bank's retail branch
system; the effects of the industry wide compression of net
interest margins; and the termination of loan funding associated
with the national student loan program. In addition, and in
response to the softening in real estate markets, Sterling Bank
added $470,000 to its loan loss reserve during the fourth quarter
of 2006, compared to $32,000 in the fourth quarter of 2005, to
ensure that the appropriate level of balance sheet strength is in
place as the organization enters the year 2007. Net income for the
year ended December 31, 2006 totaled $738,000, compared to net
income for the year ended December 31, 2005, which totaled
$1,631,000. On a basic and diluted per share basis, the net income
for the year ended December 31, 2006 was $0.15 per share, compared
to net income of $0.39 and $0.38 per share (adjusted for stock
dividends), respectively, for the year ended December 31, 2005.
Robert H. King, President and CEO, noted, "From the backdrop of an
inverted yield curve and growing credit quality concerns, the
banking industry is experiencing challenges. Current commentary has
documented the significant levels of competition in both basic
lending and deposit gathering activities, which have caused the
cost of funds to escalate at a rapid pace while restraining
expansion of interest earned. Sterling Bank continues to prepare
for the assimilation of Farnsworth Bancorp, Inc. and is taking the
necessary steps to provide for the smooth transition of operations,
while we continue to work diligently to achieve regulatory agency
approvals." For the quarter ended December 31, 2006, the loss
before tax benefit totaled $382,000, compared to income before
taxes of $561,000 for the fourth quarter of 2005. The net loss
amounted to $237,000 for the fourth quarter of 2006, compared to
net income of $345,000 for the fourth quarter of 2005. On a basic
and diluted per share basis, the net loss for the fourth quarter of
2006 amounted to $0.05 per share, compared to net income of $0.07
per share (adjusted for stock dividends), for the fourth quarter of
2005. Sterling Bank's expansion initiatives, which includes the
Voorhees Township, NJ location opened in November 2005, have met
with significant marketplace acceptance, with customer activity, of
both a deposit gathering and lending nature, continuing at elevated
levels. The effects of growth initiatives on earnings for the
annual period primarily caused an increase of $1,241,000, or 13%,
in noninterest expenses, from $9.8 million during the year ended
December 31, 2005, to $11.1 million during the year ended December
31, 2006. Included in this total is an increase in compensation
expense of $713,000, or 13%, and increases in occupancy, equipment
and data processing expenses of $476,000, or 20%. As of December
31, 2006, Sterling Bank's assets totaled $337 million, compared to
assets of $351 million on December 31, 2005, representing a 4%
decrease. Total loans amounted to $245 million on December 31,
2006, reflecting a decrease of 8% over total loans as of December
31, 2005 of $266 million. Total deposits totaled $295 million on
December 31, 2006, a decrease of 2% from $300 million on December
31, 2005. The decrease in total loans is primarily attributable to
the termination of initial advances for student loans originated
through SLM, Inc., the national student loan marketing association.
These loans are classified as held for sale, and have declined from
$41 million as of December 31, 2005, to $2 million as of December
31, 2006. This decrease of $39 million resulted from SLM's decision
to self fund these specific student loans. Loans held for
investment expanded to $243 million on December 31, 2006, from $225
million on December 31, 2005, an 8% increase. In response to the
operating change created by the initiation of an Industrial Bank
Charter by SLM, Inc., management has sought to systematically match
and balance the level and expansion of deposit balances to be
consistent with the roll down of student loan advances. Sterling
Bank Financial Highlights (unaudited) As of, and for the years
ended, December 31, 2006 and December 31, 2005 Three Months Ended
Years Ended 12/31/2006 12/31/2005 12/31/2006 12/31/2005 INCOME
STATEMENT Interest income $5,641,000 $5,302,000 $22,546,000
$19,132,000 Interest expense 2,735,000 2,175,000 10,352,000
7,153,000 Net interest income 2,906,000 3,127,000 12,194,000
11,979,000 Provision for loan losses 470,000 32,000 605,000 284,000
Net interest income after provision for loan losses 2,436,000
3,095,000 11,589,000 11,695,000 Noninterest income 133,000 209,000
651,000 711,000 Noninterest expenses 2,951,000 2,743,000 11,050,000
9,809,000 (Loss) Income before taxes (382,000) 561,000 1,190,000
2,597,000 Income tax (benefit) expense (145,000) 216,000 452,000
966,000 Net (loss) income $(237,000) $345,000 $738,000 $1,631,000
PER SHARE DATA Basic (losses) earnings per share $(0.05) $0.07
$0.15 $0.39 Diluted (losses) earnings per share $(0.05) $0.07 $0.15
$0.38 Dividends paid on common shares $ 0.03 $0.03 $0.12 $0.12
Average shares outstanding - Basic 4,778,677 4,762,499 4,772,717
4,192,422 Average shares outstanding - Diluted 4,859,732 4,852,054
4,865,259 4,262,775 BALANCE SHEET Assets Cash & due from banks
$16,064,000 $17,847,000 Federal funds sold 6,878,000 321,000 Total
investment securities 56,818,000 55,294,000 Restricted stock
1,436,000 1,876,000 Total loans 244,901,000 266,059,000 Allowance
for loan losses (1,760,000) (1,154,000) Other assets 12,911,000
11,073,000 Total assets $337,248,000 $351,316,000 Liabilities Total
deposits $295,290,000 $300,411,000 Total borrowings 5,885,000
15,641,000 Other liabilities 1,305,000 1,016,000 Total liabilities
302,480,000 317,068,000 Shareholders' equity Common stock 9,567,000
9,073,000 Additional paid-in capital 22,930,000 23,263,000 Retained
earnings 2,931,000 2,746,000 Accumulated other comprehensive losses
(660,000) (834,000) Total shareholders' equity 34,768,000
34,248,000 Total liabilities and shareholders' equity $337,248,000
$351,316,000 PERFORMANCE RATIOS Book value per share $7.27 $7.19
Return on average assets (0.28)% 0.40% 0.21% 0.50% Return on
average equity (2.69)% 4.02% 2.14% 5.58% Net interest margin 3.60%
3.81% 3.71% 3.86% Sterling Bank is a community bank headquartered
in Burlington County, New Jersey, with assets of $337 million as of
December 31, 2006. Sterling Bank's main office is located in Mount
Laurel, New Jersey, and its six other Community Banking Centers are
located in Burlington and Camden counties in New Jersey. Sterling
Bank began operations in December 1990 with the purpose of serving
consumers and small to medium-sized businesses in its market area.
The Bank's deposits are insured to the applicable regulatory limits
per depositor by the Federal Deposit Insurance Corporation.
Sterling Bank is a member of the Federal Reserve System. The common
stock of Sterling Bank is traded on the NASDAQ Capital Market under
the symbol "STNJ". For additional information about Sterling Bank
visit our website at http://www.sterlingnj.com/. This news release
may contain certain forward-looking statements, such as statements
of the Bank's plans, objectives, expectations, estimates and
intentions. Forward-looking statements may be identified by the use
of words such as "expects," "subject," "believe," "will,"
"intends," "will be" or "would." These statements are subject to
change based on various important factors (some of which are beyond
the Bank's control). Readers should not place undue reliance on any
forward-looking statements (which reflect management's analysis
only as of the date of which they are given). These factors include
general economic conditions, trends in interest rates, the ability
of our borrowers to repay their loans, the ability of the Bank to
effectively manage its growth, results of regulatory examinations,
and the decision of regulatory authorities relating to the merger
and holding company reorganization applications, among other
factors. Sterling Bank cautions that the foregoing list of
important factors is not exclusive. Readers should carefully review
the risk factors described in other documents the Bank files from
time to time with the Federal Reserve, including the Bank's Annual
Report on Form 10-KSB for the year ended December 31, 2005,
Quarterly Reports on Form 10-QSB, and Current Reports on Form 8-K.
DATASOURCE: Sterling Bank CONTACT: Robert H. King, President,
+1-856-273-5900, ; or R. Scott Horner, Executive Vice President,
+1-856-273-5900, , both of Sterling Bank Web site:
http://www.sterlingnj.com/
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