STERLING BANCSHARES, INC. 
By HOUSTON, July 19, 2011 /PRNewswire/ -- Sterling Bancshares, Inc. (Nasdaq: SBIB) today reported a net loss from continuing operations of $2.9 million, or $0.03 per diluted share, for the second quarter ended June 30, 2011, compared to a net loss from continuing operations of $495 thousand, or $0.00 per diluted share for the first quarter of 2011.
The Company recorded a loss on discontinued operations of $9.0 million during the second quarter of 2011. This loss was the result of Sterling Bank entering into an agreement to sell all of the shares of MBM Advisors, Inc. (MBM), a wholly-owned subsidiary of Sterling Bank that provides investment advisory and pension administration and consulting services. This sale is expected to close in the third quarter of 2011 following the completion of the Company's pending merger with Comerica which is expected to close on July 28, 2011. As such, MBM's operations and the estimated loss on sale are presented as discontinued operations beginning in the second quarter of 2011.
For the second quarter of 2011, loans decreased $191 million or 7.3% to $2.4 billion at June 30, 2011. This decrease was due primarily to combined reductions of $91 million in commercial real estate and construction and development loans, resulting from the Company's continued efforts to reduce exposure to these loan types. Commercial and industrial loans decreased $87 million during the second quarter of 2011 due to continued low loan demand and line usage.
At June 30, 2011, total deposits were $4.1 billion, an increase of $11.6 million compared to March 31, 2011. This increase was primarily related to growth in interest-bearing demand deposits.
Nonperforming assets were $202 million at June 30, 2011, an increase of $15.9 million compared to March 31, 2011. The increase in nonperforming assets during the quarter was due to an increase in nonperforming commercial real estate loans.
At June 30, 2011, the total allowance for loan losses was $78.0 million or 3.24% of period-end total loans, up from $75.5 million or 2.90% of period-end total loans at March 31, 2011. Net charge-offs for the second quarter of 2011 were $6.7 million or 1.06% of average total loans, compared to $12.4 million or 1.87% of average total loans for the first quarter of 2011. The provision for credit losses decreased $1.6 million on a linked-quarter basis due primarily to lower charge-offs during the second quarter.
Tax-equivalent net interest income for the second quarter of 2011 was $38.9 million, down slightly on a linked-quarter basis. Tax-equivalent net interest margin was 3.39% for the second quarter of 2011, down 13 basis points from 3.52% for the first quarter of 2011. The decrease in the net interest margin during the second quarter of 2011 was due to a decrease in average loans of $138 million which resulted in an increase in lower-yielding average interest-bearing cash of $129 million.
Noninterest income for the second quarter of 2011 was $5.9 million, a decrease of $2.6 million compared to the first quarter of 2011. Net losses on securities were $1.1 million and $429 thousand for the second and first quarters of 2011, respectively. These losses were due to the sale of certain securities that were downgraded to below investment grade during their respective quarters. Other noninterest income decreased $1.7 million for the second quarter of 2011 compared to the first quarter of 2011 due to payout claims on certain bank-owned life insurance policies during the first quarter.
Total noninterest expense for the second quarter of 2011 was $40.6 million, an increase of $916 thousand compared to the first quarter of 2011. Other noninterest expense increased $3.8 million due to additional write-downs on foreclosed assets. The increase in other noninterest expense was offset by a decrease in salaries and benefits and FDIC insurance assessments of $1.4 million and $501 thousand, respectively, on a linked-quarter basis. Additionally, professional fees decreased $837 thousand on a linked-quarter basis due primarily to legal fees that were incurred during the first quarter of 2011 in connection with the pending merger with Comerica.
As of June 30, 2011, Sterling had total assets of $5.1 billion, total loans of $2.4 billion and total deposits of $4.1 billion. Shareholders' equity of $621 million at June 30, 2011, was 12.26% of total assets. Book value per common share at period-end was $6.07. Tangible capital ratio was 9.16% and all regulatory capital ratios were in excess of those considered to be well-capitalized at June 30, 2011.
Forward-Looking Statements
Any statements in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "opportunity," "initiative," "outcome," "continue," "remain," "maintain," "trend," "objective" and variations of such words and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "might," "can," "may" or similar expressions, as they relate to Comerica Incorporated ("Comerica") , Sterling, the proposed transaction or the combined company following the transaction often identify forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of management based on information known to management as of the date of this filing and do not purport to speak as of any other date. Forward-looking statements may include descriptions of the expected benefits and costs of the transaction; forecasts of revenue, earnings or other measures of economic performance, including statements of profitability, business segments and subsidiaries; management plans relating to the transaction; the expected timing of the completion of the transaction; the ability to complete the transaction; the ability to obtain any required regulatory or other approvals; any statements of the plans and objectives of management for future or past operations, products or services, including the execution of integration plans; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Such statements reflect the view of management as of this date with respect to future events and are subject to risks and uncertainties. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, actual results could differ materially from those anticipated by the forward-looking statements or historical results. Factors that could cause or contribute to such differences include, but are not limited to, the possibility that expected benefits may not materialize in the timeframe expected or at all, or may be more costly to achieve; that the transaction may not be timely completed, if at all; that prior to the completion of the transaction or thereafter, Comerica's and Sterling's respective businesses may not perform as expected due to transaction-related uncertainty or other factors; that the parties are unable to successfully implement integration strategies; that required regulatory or other approvals are not obtained or other closing conditions are not satisfied in a timely manner or at all; reputational risks and the reaction of the companies' customers to the transaction; diversion of management time on merger-related issues; and those factors referenced in Comerica's and Sterling's filings with the Securities and Exchange Commission (the "SEC"). Forward-looking statements speak only as of the date they are made. Comerica and Sterling do not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. For any forward-looking statements made in this release or in any documents, Comerica and Sterling claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Additional Information
Management of Sterling will not host a conference call.
As previously announced, on January 16, 2011, Sterling Bancshares, Inc, and Comerica Incorporated, a company headquartered in Dallas, Texas, agreed to a strategic business combination in which Sterling will merge with Comerica. The transaction is expected to close on July 28, 2011, following the expiration of the required 15-day Department of Justice waiting period that is detailed in the Federal Reserve Board's approval order issued on July 13, 2011.
In connection with the proposed merger transaction, Comerica has filed with the SEC a Registration Statement on Form S-4 that includes a Proxy Statement of Sterling and a Prospectus of Comerica, and Sterling mailed the definitive Proxy Statement/Prospectus to its shareholders on or about April 6, 2011. Each of Comerica and Sterling may file other relevant documents concerning the proposed transaction. SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
A free copy of the definitive Proxy Statement/Prospectus, as well as other filings containing information about Comerica and Sterling, may be obtained at the SEC's Internet site (http://www.sec.gov). You may be able to obtain these documents, free of charge, from Comerica at www.comerica.com under the tab "Investor Relations" and then under the heading "SEC Filings" or from Sterling by accessing Sterling's website at www.banksterling.com under the tab "Investor Relations" and then under the heading "SEC Filings."
About Sterling Bancshares
Sterling Bancshares, Inc. is a Houston-based bank holding company with total assets of $5.1 billion, which operates 57 banking centers in the greater metropolitan areas of Houston, San Antonio, Dallas and Fort Worth, Texas. The Company's common stock is traded through the NASDAQ Global Select Market under the symbol "SBIB". For more information on Sterling Bancshares, please visit the Company's web site at http://www.banksterling.com.
For More Information Contact:
Chris Reid, Vice President and Director of Investor Relations, (713)
507-2873
Media:
Graham Painter, Executive Vice President and
Director of Corporate Communication,
(713) 507-2770
-Tables to follow-
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands, except for per share data)
Quarter Ended
-------------
Mar. Jun.
Jun. 30, 31, 30,
2011 2011 2010
---- ---- ----
Profitability
Income (loss) from continuing operations $(2,860) $(495) $545
Income (loss) from discontinued operations (8,974) 125 51
Net income (loss) (11,834) (370) 596
Earnings (loss) per share from continuing
operations (1)
Basic $(0.03) $(0.00) $0.01
Diluted $(0.03) $(0.00) $0.01
Earnings (loss) per share from discontinuing
operations (1)
Basic $(0.09) $0.00 $0.00
Diluted $(0.09) $0.00 $0.00
Earnings (loss) per share (1)
Basic $(0.12) $(0.00) $0.01
Diluted $(0.12) $(0.00) $0.01
Return on average common equity (2)
Continuing operations (1.82)% (0.32)% 0.35%
Total (7.52)% (0.24)% 0.38%
Return on average assets (2)
Continuing operations (0.23)% (0.04)% 0.04%
Total (0.94)% (0.03)% 0.05%
Tax equivalent net interest margin (3) 3.39% 3.52% 3.74%
Efficiency Ratio (4):
Consolidated 88.31% 81.14% 78.28%
Sterling Bank 84.64% 76.02% 75.86%
Liquidity and Capital Ratios
Average loans to average deposits 61.98% 65.32% 73.39%
Period-end stockholders' equity to total
assets 12.26% 12.34% 12.30%
Average stockholders' equity to average
assets 12.47% 12.35% 12.28%
Period-end tangible capital to total
tangible assets 9.16% 9.06% 9.01%
Tier 1 capital to risk-weighted assets 16.50% 15.41% 14.45%
Total capital to risk-weighted assets 18.97% 18.13% 17.04%
Tier 1 leverage ratio (Tier 1 capital to
average assets) 10.12% 10.08% 10.32%
Other Data
Shares used in computing earnings (loss) per
common share
Basic shares 102,165 102,034 101,898
Diluted shares 102,165 102,034 102,144
End of period common shares outstanding 102,180 102,141 101,927
Book value per common share at period-end $6.07 $6.10 $6.13
Cash dividends paid per common share $0.015 $0.015 $0.015
Common stock dividend payout ratio N/M N/M 256.65%
Full-time equivalent employees 896 938 991
Number of banking centers 57 57 57
Year-to-date
------------
2011 2010
---- ----
Profitability
Income (loss) from continuing operations $(3,355) $(5,917)
Income (loss) from discontinued operations (8,849) 265
Net income (loss) (12,204) (5,652)
Earnings (loss) per share from continuing
operations (1)
Basic $(0.03) $(0.06)
Diluted $(0.03) $(0.06)
Earnings (loss) per share from discontinuing
operations (1)
Basic $(0.09) $0.00
Diluted $(0.09) $0.00
Earnings (loss) per share (1)
Basic $(0.12) $(0.06)
Diluted $(0.12) $(0.06)
Return on average common equity (2)
Continuing operations (1.08)% (1.99)%
Total (3.92)% (1.90)%
Return on average assets (2)
Continuing operations (0.13)% (0.24)%
Total (0.49)% (0.23)%
Tax equivalent net interest margin (3) 3.45% 3.88%
Efficiency Ratio (4):
Consolidated 84.61% 77.23%
Sterling Bank 80.19% 74.63%
Liquidity and Capital Ratios
Average loans to average deposits 63.64% 75.97%
Period-end stockholders' equity to total
assets 12.26% 12.30%
Average stockholders' equity to average
assets 12.41% 11.96%
Period-end tangible capital to total
tangible assets 9.16% 9.01%
Tier 1 capital to risk-weighted assets 16.50% 14.45%
Total capital to risk-weighted assets 18.97% 17.04%
Tier 1 leverage ratio (Tier 1 capital to
average assets) 10.12% 10.32%
Other Data
Shares used in computing earnings (loss) per
common share
Basic shares 102,100 95,227
Diluted shares 102,100 95,227
End of period common shares outstanding 102,180 101,927
Book value per common share at period-end $6.07 $6.13
Cash dividends paid per common share $0.030 $0.030
Common stock dividend payout ratio N/M N/M
Full-time equivalent employees 896 991
Number of banking centers 57 57
STERLING BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands)
Jun. 30, Mar. 31,
2011 2011
---- ----
ASSETS
Cash and cash equivalents $742,880 $462,700
Available-for-sale securities, at
fair value 1,298,567 1,343,536
Held-to-maturity securities, at
amortized cost 235,326 246,768
Loans held for sale 2,709 1,877
Loans held for investment 2,407,942 2,599,778
--------- ---------
Total loans 2,410,651 2,601,655
Allowance for loan losses (78,002) (75,535)
------- -------
Loans, net 2,332,649 2,526,120
Premises and equipment, net 48,811 49,618
Real estate acquired by foreclosure 46,158 49,826
Goodwill 165,309 173,210
Core deposits and other intangibles,
net 7,302 8,951
Accrued interest receivable 13,290 13,588
Other assets 171,064 175,230
------- -------
TOTAL ASSETS $5,061,356 $5,049,547
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $1,268,801 $1,287,921
Interest-bearing demand 2,160,404 2,084,062
Certificates and other time deposits 699,642 745,301
------- -------
Total deposits 4,128,847 4,117,284
Other borrowed funds 111,959 109,701
Subordinated debt 77,690 77,673
Junior subordinated debt 82,734 82,734
Accrued interest payable and other
liabilities 39,578 39,074
------ ------
Total liabilities 4,440,808 4,426,466
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY
Common stock 104,047 104,008
Capital surplus 242,092 241,280
Retained earnings 275,533 288,901
Treasury stock (21,399) (21,399)
Accumulated other comprehensive
income, net of tax 20,275 10,291
------ ------
Total shareholders' equity 620,548 623,081
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $5,061,356 $5,049,547
========== ==========
Dec. 31, Sep. 30, Jun. 30,
2010 2010 2010
---- ---- ----
ASSETS
Cash and cash equivalents $502,894 $366,590 $359,388
Available-for-sale
securities, at fair value 1,287,555 1,169,519 1,069,964
Held-to-maturity securities,
at amortized cost 265,080 280,215 280,658
Loans held for sale 2,691 7,123 6,509
Loans held for investment 2,752,349 2,862,952 2,992,370
--------- --------- ---------
Total loans 2,755,040 2,870,075 2,998,879
Allowance for loan losses (77,141) (80,754) (80,983)
------- ------- -------
Loans, net 2,677,899 2,789,321 2,917,896
Premises and equipment, net 49,421 48,507 47,812
Real estate acquired by
foreclosure 37,064 14,571 18,151
Goodwill 173,210 173,210 173,210
Core deposits and other
intangibles, net 9,477 10,004 10,540
Accrued interest receivable 14,673 14,356 14,951
Other assets 174,680 173,328 183,429
------- ------- -------
TOTAL ASSETS $5,191,953 $5,039,621 $5,075,999
========== ========== ==========
LIABILITIES AND SHAREHOLDERS'
EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $1,322,492 $1,248,321 $1,266,781
Interest-bearing demand 2,138,822 2,014,207 1,962,854
Certificates and other time
deposits 796,116 840,683 921,495
------- ------- -------
Total deposits 4,257,430 4,103,211 4,151,130
Other borrowed funds 112,202 106,546 100,770
Subordinated debt 78,059 78,624 78,247
Junior subordinated debt 82,734 82,734 82,734
Accrued interest payable and
other liabilities 39,604 41,704 38,722
------ ------ ------
Total liabilities 4,570,029 4,412,819 4,451,603
COMMITMENTS AND CONTINGENCIES - - -
SHAREHOLDERS' EQUITY
Common stock 103,852 103,820 103,795
Capital surplus 239,940 238,536 238,186
Retained earnings 290,800 290,429 287,503
Treasury stock (21,399) (21,399) (21,399)
Accumulated other comprehensive
income, net of tax 8,731 15,416 16,311
----- ------ ------
Total shareholders' equity 621,924 626,802 624,396
------- ------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $5,191,953 $5,039,621 $5,075,999
========== ========== ==========
STERLING BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(dollars in thousands, except for per share data)
Quarter Ended
-------------
Jun. 30, Mar. 31,
2011 2011
---- ----
Interest income:
Loans, including fees $33,057 $34,906
Securities:
Taxable 10,904 10,359
Non-taxable 1,027 1,044
Deposits in financial institutions 294 209
Other interest-earning assets 2 2
Total interest income 45,284 46,520
------ ------
Interest expense:
Demand and savings deposits 2,683 2,660
Certificates and other time deposits 1,655 1,937
Other borrowed funds 771 764
Subordinated debt 700 696
Junior subordinated debt 1,040 1,034
Total interest expense 6,849 7,091
----- -----
Net interest income 38,435 39,429
Provision for credit losses 9,200 10,800
Net interest income after provision for
credit losses 29,235 28,629
------ ------
Noninterest income:
Customer service fees 3,159 3,284
Net gain (loss) on securities (1,138) (429)
Wealth management fees 269 342
Other 3,566 5,298
Total noninterest income 5,856 8,495
----- -----
Noninterest expense:
Salaries and employee benefits 17,182 18,570
Occupancy 5,784 5,959
Technology 1,974 1,965
Professional fees 1,612 2,449
Postage, delivery and supplies 567 533
Marketing 80 63
Core deposits and other intangibles
amortization 507 526
FDIC insurance assessments 1,637 2,138
Other 11,223 7,447
Total noninterest expense 40,566 39,650
------ ------
Income (loss) from continuing
operations before income taxes (5,475) (2,526)
Income tax provision (benefit) (2,615) (2,031)
------ ------
Income (loss) from continuing
operations $(2,860) $(495)
------- -----
Income (loss) from discontinued
operations before income taxes (8,936) 192
Income tax provision 38 67
--- ---
Income (loss) from discontinued
operations $(8,974) $125
------- ----
Net income (loss) $(11,834) $(370)
======== =====
Earnings (loss) per share from
continuing operations (1):
Basic $(0.03) $(0.00)
====== ======
Diluted $(0.03) $(0.00)
====== ======
Earnings (loss) per share from
discontinuing operations (1):
Basic $(0.09) $0.00
====== =====
Diluted $(0.09) $0.00
====== =====
Earnings (loss) per share (1):
Basic $(0.12) $(0.00)
====== ======
Diluted $(0.12) $(0.00)
====== ======
Quarter Ended
-------------
Dec. 31, Sep. 30, Jun. 30,
2010 2010 2010
---- ---- ----
Interest income:
Loans, including fees $37,003 $40,153 $42,087
Securities:
Taxable 9,342 9,841 9,602
Non-taxable 1,028 1,013 915
Deposits in financial institutions 258 157 231
Other interest-earning assets 2 1 3
Total interest income 47,633 51,165 52,838
------ ------ ------
Interest expense:
Demand and savings deposits 3,158 3,583 4,319
Certificates and other time deposits 2,328 2,823 3,159
Other borrowed funds 781 784 768
Subordinated debt 714 747 705
Junior subordinated debt 1,043 1,071 1,040
Total interest expense 8,024 9,008 9,991
----- ----- -----
Net interest income 39,609 42,157 42,847
Provision for credit losses 5,250 7,716 9,336
Net interest income after provision for
credit losses 34,359 34,441 33,511
------ ------ ------
Noninterest income:
Customer service fees 3,569 3,728 3,591
Net gain (loss) on securities (136) 43 17
Wealth management fees 362 351 651
Other 3,333 3,927 2,752
Total noninterest income 7,128 8,049 7,011
----- ----- -----
Noninterest expense:
Salaries and employee benefits 18,975 19,735 19,466
Occupancy 6,010 5,493 5,637
Technology 2,052 2,148 2,214
Professional fees 2,202 1,433 1,319
Postage, delivery and supplies 578 627 689
Marketing 216 198 271
Core deposits and other intangibles
amortization 527 537 537
FDIC insurance assessments 2,667 2,478 2,438
Other 6,854 3,690 6,798
Total noninterest expense 40,081 36,339 39,370
------ ------ ------
Income (loss) from continuing
operations before income taxes 1,406 6,151 1,152
Income tax provision (benefit) (283) 1,669 607
---- ----- ---
Income (loss) from continuing
operations $1,689 $4,482 $545
------ ------ ----
Income (loss) from discontinued
operations before income taxes 326 (0) 78
Income tax provision 114 27 27
--- --- ---
Income (loss) from discontinued
operations $212 $(27) $51
---- ---- ---
Net income (loss) $1,901 $4,455 $596
====== ====== ====
Earnings (loss) per share from
continuing operations (1):
Basic $0.02 $0.04 $0.01
===== ===== =====
Diluted $0.02 $0.04 $0.01
===== ===== =====
Earnings (loss) per share from
discontinuing operations (1):
Basic $0.00 $(0.00) $0.00
===== ====== =====
Diluted $0.00 $(0.00) $0.00
===== ====== =====
Earnings (loss) per share (1):
Basic $0.02 $0.04 $0.01
===== ===== =====
Diluted $0.02 $0.04 $0.01
===== ===== =====
Year-to-date
------------
2011 2010
---- ----
Interest income:
Loans, including fees $67,963 $85,736
Securities:
Taxable 21,263 18,719
Non-taxable 2,071 1,840
Deposits in financial institutions 503 346
Other interest-earning assets 4 4
Total interest income 91,804 106,645
------ -------
Interest expense:
Demand and savings deposits 5,343 8,531
Certificates and other time deposits 3,592 6,511
Other borrowed funds 1,535 1,216
Subordinated debt 1,396 1,392
Junior subordinated debt 2,074 2,068
Total interest expense 13,940 19,718
------ ------
Net interest income 77,864 86,927
Provision for credit losses 20,000 32,272
Net interest income after provision
for credit losses 57,864 54,655
------ ------
Noninterest income:
Customer service fees 6,443 7,079
Net gain (loss) on securities (1,567) 37
Wealth management fees 611 1,207
Other 8,864 3,540
Total noninterest income 14,351 11,863
------ ------
Noninterest expense:
Salaries and employee benefits 35,752 39,055
Occupancy 11,743 11,351
Technology 3,939 4,501
Professional fees 4,061 3,299
Postage, delivery and supplies 1,100 1,369
Marketing 143 540
Core deposits and other intangibles
amortization 1,033 1,086
FDIC insurance assessments 3,775 4,985
Other 18,670 10,782
Total noninterest expense 80,216 76,968
------ ------
Income (loss) from continuing
operations before income taxes (8,001) (10,450)
Income tax provision (benefit) (4,646) (4,533)
------ ------
Income (loss) from continuing
operations $(3,355) $(5,917)
------- -------
Income (loss) from discontinued
operations before income taxes (8,744) 407
Income tax provision 105 142
--- ---
Income (loss) from discontinued
operations $(8,849) $265
------- ----
Net income (loss) $(12,204) $(5,652)
======== =======
Earnings (loss) per share from
continuing operations (1):
Basic $(0.03) $(0.06)
Diluted $(0.03) $(0.06)
====== ======
Earnings (loss) per share from
discontinuing operations (1):
Basic $(0.09) $0.00
Diluted $(0.09) $0.00
====== =====
Earnings (loss) per share (1):
Basic $(0.12) $(0.06)
Diluted $(0.12) $(0.06)
====== ======
STERLING BANCSHARES, INC.
YIELD/RATE ANALYSIS
(dollars in thousands)
Quarter Ended
-------------
Jun. 30,
2011
----
Average Yield/
Balance Interest Rate
-------- -------- -------
Interest-Earning Assets:
Loans held for sale $3,423 $10 1.21%
Loans held for investment:
Taxable 2,554,191 33,046 5.19%
Non-taxable (3) 50 1 4.58%
Securities:
Taxable 1,464,279 10,904 2.99%
Non-taxable (3) 110,948 1,534 5.55%
Deposits in financial
institutions 475,731 294 0.25%
Other interest-earning assets 1,931 2 0.42%
----
Total interest-earning assets 4,610,553 45,791 3.98%
Noninterest-earning assets 452,699
-------
Total Assets $5,063,252
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $2,127,814 $2,683 0.51%
Certificates and other time 723,961 1,655 0.92%
Other borrowed funds 105,644 771 2.93%
Subordinated debt 77,771 700 3.61%
Junior subordinated debt 82,734 1,040 5.04%
Total interest-bearing
liabilities 3,117,924 6,849 0.88%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,314,129
Shareholders' equity 631,199
-------
Total Liabilities and
Shareholders' Equity $5,063,252
==========
Tax Equivalent Net Interest
Income and Margin (3) 38,942 3.39%
====
Non-GAAP to GAAP Reconciliation:
Tax Equivalent Adjustment:
Loans -
Securities 507
---
Total tax equivalent adjustment 507
Net Interest Income $38,435
=======
Quarter Ended
-------------
Mar. 31,
2011
---
Average Yield/
Balance Interest Rate
-------- -------- -------
Interest-Earning Assets:
Loans held for sale $3,008 $12 1.55%
Loans held for investment:
Taxable 2,692,192 34,893 5.26%
Non-taxable (3) 63 1 6.81%
Securities:
Taxable 1,447,767 10,359 2.90%
Non-taxable (3) 112,947 1,558 5.59%
Deposits in financial
institutions 347,116 209 0.24%
Other interest-earning assets 4,016 2 0.20%
----- --- ----
Total interest-earning assets 4,607,109 47,034 4.14%
Noninterest-earning assets 454,688
Total Assets $5,061,797
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $2,087,550 $2,660 0.52%
Certificates and other time 772,172 1,937 1.02%
Other borrowed funds 109,885 764 2.82%
Subordinated debt 77,959 696 3.62%
Junior subordinated debt 82,734 1,034 5.07%
----
Total interest-bearing
liabilities 3,130,300 7,091 0.92%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,306,235
Shareholders' equity 625,262
Total Liabilities and
Shareholders' Equity $5,061,797
==========
Tax Equivalent Net Interest
Income and Margin (3) 39,943 3.52%
====
Non-GAAP to GAAP Reconciliation:
Tax Equivalent Adjustment:
Loans -
Securities 514
Total tax equivalent adjustment 514
Net Interest Income $39,429
=======
STERLING BANCSHARES, INC.
YIELD/RATE ANALYSIS
(dollars in thousands)
Year-to-date
------------
2011
----
Average Yield/
Balance Interest Rate
-------- -------- -------
Interest-Earning Assets:
Loans held for sale $3,217 $22 1.37%
Loans held for investment:
Taxable 2,622,811 67,939 5.22%
Non-taxable (3) 56 2 6.50%
Securities:
Taxable 1,456,069 21,263 2.94%
Non-taxable (3) 111,942 3,093 5.57%
Deposits in financial
institutions 411,779 503 0.25%
Other interest-earning assets 2,967 4 0.27%
----
Total interest-earning assets 4,608,841 92,826 4.06%
Noninterest-earning assets 453,688
-------
Total Assets $5,062,529
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $2,107,794 $5,343 0.51%
Certificates and other time 747,933 3,592 0.97%
Other borrowed funds 107,753 1,535 2.87%
Subordinated debt 77,865 1,396 3.62%
Junior subordinated debt 82,734 2,074 5.06%
Total interest-bearing
liabilities 3,124,079 13,940 0.90%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,310,203
Shareholders' equity 628,247
-------
Total Liabilities and
Shareholders' Equity $5,062,529
==========
Tax Equivalent Net Interest
Income and Margin (3) 78,886 3.45%
====
Non-GAAP to GAAP Reconciliation
Tax Equivalent Adjustment:
Loans -
Securities 1,022
-----
Total tax equivalent adjustment 1,022
-----
Net Interest Income $77,864
=======
Year-to-date
------------
2010
----
Average Yield/
Balance Interest Rate
-------- -------- ------
Interest-Earning Assets:
Loans held for sale $12,507 $101 1.63%
Loans held for investment:
Taxable 3,106,255 85,555 5.55%
Non-taxable (3) 4,546 118 5.26%
Securities:
Taxable 1,063,562 18,719 3.55%
Non-taxable (3) 100,814 2,709 5.42%
Deposits in financial
institutions 278,731 346 0.25%
Other interest-earning assets 1,623 4 0.50%
----- --- ----
Total interest-earning assets 4,568,038 107,552 4.75%
Noninterest-earning assets 444,343
Total Assets $5,012,381
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $2,010,433 $8,531 0.86%
Certificates and other time 929,735 6,511 1.41%
Other borrowed funds 100,433 1,216 2.44%
Subordinated debt 77,778 1,392 3.61%
Junior subordinated debt 82,734 2,068 5.04%
Total interest-bearing
liabilities 3,201,113 19,718 1.24%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,211,808
Shareholders' equity 599,460
Total Liabilities and
Shareholders' Equity $5,012,381
==========
Tax Equivalent Net Interest
Income and Margin (3) 87,834 3.88%
====
Non-GAAP to GAAP Reconciliation
Tax Equivalent Adjustment:
Loans 38
Securities 869
---
Total tax equivalent adjustment 907
Net Interest Income $86,927
=======
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Quarter Ended
-------------
Jun. 30, Mar. 31,
2011 2011
---- ----
Condensed Average Balance Sheet
Loans held for sale $3,423 $3,008
Loans held for investment 2,554,241 2,692,255
--------- ---------
Total loans 2,557,664 2,695,263
Available-for-sale securities, at
fair value 1,331,079 1,304,941
Held-to-maturity securities, at
amortized cost 244,148 255,773
Deposits in financial institutions 475,731 347,116
Other interest-earning assets 1,931 4,016
Total interest-earning assets 4,610,553 4,607,109
Goodwill 173,123 173,210
Core deposits and other
intangibles, net 8,676 9,208
All other noninterest-earning
assets 270,900 272,270
Total assets $5,063,252 $5,061,797
========== ==========
Noninterest-bearing demand $1,275,043 $1,266,324
Interest-bearing deposits:
Interest-bearing demand 2,127,814 2,087,550
Jumbo certificates of deposit 432,209 468,726
Regular certificates of deposit 202,232 211,043
Brokered certificates of deposit 89,520 92,403
------ ------
Total deposits 4,126,818 4,126,046
Other borrowed funds 105,644 109,885
Subordinated debt 77,771 77,959
Junior subordinated debt 82,734 82,734
Accrued interest payable and other
liabilities 39,086 39,911
Total liabilities 4,432,053 4,436,535
Total shareholders' equity 631,199 625,262
Total liabilities and shareholders'
equity $5,063,252 $5,061,797
========== ==========
Jun. 30, Mar. 31,
2011 2011
---- ----
Period-end Loans:
Loans held for sale $2,709 $1,877
Loans held for investment:
Commercial and industrial 494,389 581,703
Real Estate:
Commercial 1,280,241 1,421,683
Construction and development 263,398 213,102
Residential mortgage 332,454 344,774
Consumer/other 37,460 38,516
Loans held for investment 2,407,942 2,599,778
Total period-end loans $2,410,651 $2,601,655
========== ==========
Period-End Deposits:
Noninterest-bearing demand $1,268,801 $1,287,921
Interest-bearing demand 2,160,404 2,084,062
Certificates and other time
deposits:
Jumbo 429,422 445,833
Regular 197,822 205,840
Brokered 72,398 93,628
Total period-end deposits $4,128,847 $4,117,284
========== ==========
Quarter Ended
-------------
Dec. 31, Sep. 30, Jun. 30,
2010 2010 2010
---- ---- ----
Condensed Average Balance Sheet
Loans held for sale $6,728 $5,390 $11,454
Loans held for investment 2,807,423 2,930,419 3,041,030
--------- --------- ---------
Total loans 2,814,151 2,935,809 3,052,484
Available-for-sale securities, at
fair value 1,188,610 1,113,780 953,742
Held-to-maturity securities, at
amortized cost 272,184 284,458 271,967
Deposits in financial institutions 416,917 260,167 362,429
Other interest-earning assets 4,859 566 840
Total interest-earning assets 4,696,721 4,594,780 4,641,462
Goodwill 173,210 173,210 173,210
Core deposits and other
intangibles, net 9,732 10,262 10,800
All other noninterest-earning
assets 252,801 255,050 260,923
Total assets $5,132,464 $5,033,302 $5,086,395
========== ========== ==========
Noninterest-bearing demand $1,293,021 $1,224,402 $1,197,400
Interest-bearing deposits:
Interest-bearing demand 2,069,470 2,003,914 2,027,133
Jumbo certificates of deposit 509,458 539,094 582,727
Regular certificates of deposit 220,615 227,490 233,592
Brokered certificates of deposit 97,501 103,457 118,622
------ ------- -------
Total deposits 4,190,065 4,098,357 4,159,474
Other borrowed funds 108,810 103,902 100,976
Subordinated debt 78,517 78,472 77,831
Junior subordinated debt 82,734 82,734 82,734
Accrued interest payable and other
liabilities 42,030 39,079 40,952
Total liabilities 4,502,156 4,402,544 4,461,967
Total shareholders' equity 630,308 630,758 624,428
Total liabilities and shareholders'
equity $5,132,464 $5,033,302 $5,086,395
========== ========== ==========
Dec. 31, Sep. 30, Jun. 30,
2010 2010 2010
---- ---- ----
Period-end Loans:
Loans held for sale $2,691 $7,123 $6,509
Loans held for investment:
Commercial and industrial 623,487 597,205 658,141
Real Estate:
Commercial 1,511,846 1,590,081 1,632,213
Construction and development 220,076 268,691 310,689
Residential mortgage 354,310 362,404 343,894
Consumer/other 42,630 44,571 47,433
Loans held for investment 2,752,349 2,862,952 2,992,370
Total period-end loans $2,755,040 $2,870,075 $2,998,879
========== ========== ==========
Period-End Deposits:
Noninterest-bearing demand $1,322,492 $1,248,321 $1,266,781
Interest-bearing demand 2,138,822 2,014,207 1,962,854
Certificates and other time
deposits:
Jumbo 487,037 512,178 587,377
Regular 215,867 224,290 231,404
Brokered 93,212 104,215 102,714
Total period-end deposits $4,257,430 $4,103,211 $4,151,130
========== ========== ==========
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Quarter Ended
-------------
Jun. 30, Mar. 31, Dec. 31,
2011 2011 2010
---- ---- ----
Allowance For Credit Losses
Allowance for loan losses at
beginning of period $75,535 $77,141 $80,754
Charge-offs:
Commercial, financial and
industrial 657 239 1,845
Real estate, mortgage and
construction 6,622 12,220 8,535
Consumer 189 713 323
Total charge-offs 7,468 13,172 10,703
----- ------ ------
Recoveries:
Commercial, financial and
industrial 238 405 342
Real estate, mortgage and
construction 431 255 631
Consumer 66 106 67
Total recoveries 735 766 1,040
--- --- -----
Net charge-offs 6,733 12,406 9,663
Provision for loan losses 9,200 10,800 6,050
----- ------ -----
Allowance for loan losses at end
of period $78,002 $75,535 $77,141
------- ------- -------
Allowance for unfunded loan
commitments at beginning of
period 1,200 1,200 2,000
Provision for losses on unfunded
loan commitments - - (800)
--- --- ----
Allowance for unfunded loan
commitments at end of period 1,200 1,200 1,200
----- ----- -----
Total allowance for credit losses $79,202 $76,735 $78,341
======= ======= =======
Nonperforming Assets
Nonperforming loans:
Loans held for sale $1,367 $- $-
Loans held for investment 154,106 135,791 133,264
Real estate acquired by
foreclosure 46,158 49,826 37,064
Other repossessed assets 25 127 3
--- ---
Total nonperforming assets $201,656 $185,744 $170,331
======== ======== ========
Restructured loans - accruing $23,075 $15,001 $27,699
======= ======= =======
Potential problem loans $152,551 $171,276 $166,442
======== ======== ========
Accruing loans 30 to 89 days past
due $26,689 $31,720 $23,680
======= ======= =======
Accruing loans past due 90 days or
more $1,762 $2,334 $507
====== ====== ====
Ratios
Period-end allowance for credit
losses to period-end loans 3.29% 2.95% 2.84%
Period-end allowance for loan
losses to period-end loans 3.24% 2.90% 2.80%
Period-end allowance for loan
losses to nonperforming loans 50.17% 55.63% 57.89%
Nonperforming loans to period-end
loans 6.45% 5.22% 4.84%
Nonperforming assets to period-
end assets 3.98% 3.68% 3.28%
Net charge-offs to average loans
(2) 1.06% 1.87% 1.36%
Quarter Ended
-------------
Sep. 30, Jun. 30,
2010 2010
---- ----
Allowance For Credit Losses
Allowance for loan losses at beginning
of period $80,983 $76,646
Charge-offs:
Commercial, financial and industrial 1,034 1,687
Real estate, mortgage and construction 7,314 5,786
Consumer 285 205
Total charge-offs 8,633 7,678
----- -----
Recoveries:
Commercial, financial and industrial 481 433
Real estate, mortgage and construction 633 845
Consumer 72 51
Total recoveries 1,186 1,329
----- -----
Net charge-offs 7,447 6,349
Provision for loan losses 7,218 10,686
----- ------
Allowance for loan losses at end of
period $80,754 $80,983
------- -------
Allowance for unfunded loan commitments
at beginning of period 1,502 2,852
Provision for losses on unfunded loan
commitments 498 (1,350)
--- ------
Allowance for unfunded loan commitments
at end of period 2,000 1,502
----- -----
Total allowance for credit losses $82,754 $82,485
======= =======
Nonperforming Assets
Nonperforming loans:
Loans held for sale $1,665 $3,491
Loans held for investment 162,096 162,669
Real estate acquired by foreclosure 14,571 18,151
Other repossessed assets 50 20
Total nonperforming assets $178,382 $184,331
======== ========
Restructured loans - accruing $17,495 $15,001
======= =======
Potential problem loans $169,646 $142,123
======== ========
Accruing loans 30 to 89 days past due $16,234 $19,307
======= =======
Accruing loans past due 90 days or more $953 $441
==== ====
Ratios
Period-end allowance for credit losses
to period-end loans 2.88% 2.75%
Period-end allowance for loan losses to
period-end loans 2.81% 2.70%
Period-end allowance for loan losses to
nonperforming loans 49.31% 48.74%
Nonperforming loans to period-end loans 5.71% 5.54%
Nonperforming assets to period-end
assets 3.54% 3.63%
Net charge-offs to average loans (2) 1.01% 0.83%
Year-to-date
------------
2011 2010
---- ----
Allowance For Credit Losses
Allowance for loan losses at beginning
of period $77,141 $74,732
Charge-offs:
Commercial, financial and industrial 896 3,655
Real estate, mortgage and construction 18,842 26,000
Consumer 902 467
Total charge-offs 20,640 30,122
------ ------
Recoveries:
Commercial, financial and industrial 643 916
Real estate, mortgage and construction 686 1,666
Consumer 172 169
Total recoveries 1,501 2,751
----- -----
Net charge-offs 19,139 27,371
Provision for loan losses 20,000 33,622
------ ------
Allowance for loan losses at end of
period $78,002 $80,983
------- -------
Allowance for unfunded loan commitments
at beginning of period 1,200 2,852
Provision for losses on unfunded loan
commitments - (1,350)
--- ------
Allowance for unfunded loan commitments
at end of period 1,200 1,502
----- -----
Total allowance for credit losses $79,202 $82,485
======= =======
Nonperforming Assets
Nonperforming loans:
Loans held for sale $1,367 $3,491
Loans held for investment 154,106 162,669
Real estate acquired by foreclosure 46,158 18,151
Other repossessed assets 25 20
Total nonperforming assets $201,656 $184,331
======== ========
Restructured loans - accruing $23,075 $15,001
======= =======
Potential problem loans $152,551 $142,123
======== ========
Accruing loans 30 to 89 days past due $26,689 $19,307
======= =======
Accruing loans past due 90 days or more $1,762 $441
====== ====
Ratios
Period-end allowance for credit losses
to period-end loans 3.29% 2.75%
Period-end allowance for loan losses to
period-end loans 3.24% 2.70%
Period-end allowance for loan losses to
nonperforming loans 50.17% 48.74%
Nonperforming loans to period-end loans 6.45% 5.54%
Nonperforming assets to period-end
assets 3.98% 3.63%
Net charge-offs to average loans (2) 1.47% 1.77%
STERLING BANCSHARES, INC.
FOOTNOTES TO EARNINGS RELEASE
Earnings per share in each quarter is computed individually using
the weighted-average number of shares outstanding during that
(1) quarter.
(2) Interim periods annualized.
Taxable-equivalent basis assuming a 35% tax rate. The Company
presents net interest income on a tax-equivalent basis.
Accordingly, net interest income from tax-exempt securities and
loans is presented in the net interest income results on a basis
comparable to taxable securities and loans. This non-GAAP
financial measure allows management to assess the comparability
of net interest income arising from both taxable and tax-exempt
(3) sources.
The efficiency ratio is calculated by dividing noninterest
expense by tax equivalent basis net interest income plus
noninterest income less net gain (loss) on investment securities
(4) and loss on disposal of assets.
N/M Not meaningful.
SOURCE Sterling Bancshares, Inc.
