STERLING BANCSHARES, INC. 
By HOUSTON, Oct. 28 /PRNewswire-FirstCall/ -- Sterling Bancshares, Inc. (Nasdaq: SBIB) today reported net income of $4.5 million, or $0.04 per diluted common share, for the third quarter ended September 30, 2010, as compared to a net loss of $24.7 million, or $0.30 for the third quarter of 2009.
Key items and metrics for the quarter include the following:
-- Total nonperforming assets decreased $6 million, or 3.2% over the prior
quarter;
-- Period-end allowance for credit losses to period-end loans increased to
2.88% at September 30, 2010, from 2.18% at September 30, 2009;
-- Provision for credit losses was $7.7 million for the third quarter of
2010, a reduction of $1.6 million on a linked-quarter basis;
-- Tangible capital ratio was 9.13% and all regulatory capital ratios were
in excess of those considered to be well-capitalized at September 30,
2010.
"We are pleased to see stabilization in a number of our credit metrics during the third quarter, which contributed to our overall improved profitability," commented J. Downey Bridgwater, Sterling's Chairman, President, and Chief Executive Officer. "Nonperforming loans, foreclosed real estate owned, and past due loans all decreased during the quarter. We continue to see property values stabilize for the most part which has helped to decrease our credit costs over the last couple of quarters. "
"The Texas economy continues to recover from the recession at a fairly modest pace," continued Bridgwater. "However, historically low interest rates combined with low loan demand has remained a headwind for revenue generation. As the economic recovery continues and there is additional clarity from a political and regulatory perspective, we anticipate more of our business customers will start to invest in the future growth of their businesses. Sterling is extremely well-positioned from a capital and liquidity standpoint to take advantage of these future opportunities as they arise."
Total loans decreased $129 million or 4.3% on a linked-quarter basis to $2.9 billion at September 30, 2010, and decreased $481 million or 14.3% since September 30, 2009. The decline in loans during the third quarter of 2010 was due in part to a decrease in commercial real estate and construction and development loans of $42.1 million and $42.0 million, respectively, resulting from the Company's decision to reduce exposure to these loan categories. The remaining decrease in loans was related to commercial and industrial loans which were impacted by continued low line-of-credit usage.
Average deposits decreased $61.1 million to $4.1 billion for the third quarter of 2010 compared to the second quarter of 2010. On average, noninterest-bearing deposits increased $27.0 million or 2.3% for the third quarter of 2010 compared to the second quarter of 2010. Due to continued growth in core deposits during the quarter, the Company was able to reduce higher-cost brokered and jumbo certificates of deposit by $58.8 million on a linked-quarter basis. Average total deposits increased $52.2 million or 1.2% for the third quarter of 2010 compared to the same quarter in 2009.
At September 30, 2010, nonperforming assets were $178 million or 3.54% of total assets, compared to $184 million or 3.63% at June 30, 2010. Potential problem loans were $170 million at September 30, 2010, an increase of $27.5 million over the prior quarter. The increase in potential problem loans during the third quarter of 2010 was due to a downgrade of certain non-owner occupied commercial real estate loans. Accruing loans 30-89 days past due were $16.2 million at September 30, 2010, a decrease of $3.1 million compared to the prior quarter and $18.0 million compared to December 31, 2009.
At September 30, 2010, the total allowance for credit losses was $82.8 million or 2.88% of period-end total loans, up slightly from $82.5 million or 2.75% of period-end total loans at June 30, 2010, and up from $72.9 million or 2.18% of period-end total loans at September 30, 2009.
Net charge-offs for the third quarter of 2010 were $7.4 million or 1.01% of average total loans, compared to $6.3 million or 0.83% of average total loans for the second quarter of 2010.
Tax-equivalent net interest income for the third quarter of 2010 was $42.6 million, down $655 thousand on a linked-quarter basis. Tax-equivalent net interest margin was 3.68% for the third quarter of 2010, down six basis points from 3.74% for the second quarter of 2010. Net interest income and margin during the third quarter of 2010 were negatively impacted by a decrease in average loans and a reduction in interest income from the interest rate hedge that was fully amortized during the third quarter.
Noninterest income for the third quarter of 2010 was $9.5 million, an increase of $965 thousand on a linked-quarter basis. This increase in noninterest income was due in part to a decrease in losses on loans classified as held for sale. During the second quarter of 2010, the Company recorded losses on loans classified as held for sale of $418 thousand. The Company did not record any losses on loans classified as held for sale during the third quarter of 2010.
Total noninterest expense for the third quarter of 2010 was $37.8 million, a decrease of $3.0 million on a linked-quarter basis. The decrease in noninterest expense was primarily due to gains from sales of other real estate owned net of carrying costs of $414 thousand recorded during the third quarter of 2010 compared to net losses and carrying costs of $1.4 million in the second quarter of 2010.
As of September 30, 2010, Sterling had total assets of $5.0 billion, total loans of $2.9 billion and total deposits of $4.1 billion. Shareholders' equity of $627 million at September 30, 2010, was 12.4% of total assets. Book value per common share at period-end was $6.15.
Conference Call
Management of Sterling will host a conference call for investors and analysts that will be broadcast live via telephone and over the Internet on Thursday, October 28, 2010 at 11:00 a.m. Eastern Time. To participate, visit the Investor Relations section of the Company's web site at http://www.banksterling.com or call (612) 332-0335. An audio archive of the call will also be available on the web site beginning Friday, October 29, 2010.
A telephone replay of the conference call will be available beginning Thursday, October 28, 2010 at 12:00 p.m. until Thursday, November 4, 2010 at 11:59 p.m. Central Time by dialing (800) 475-6701. The access code for the replay is 173152.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and are based on beliefs and assumptions of management at the time that this release was prepared. The Company does not assume any obligation to update the forward-looking statements. There are several factors, many beyond the Company's control, that could cause results to differ significantly from expectations including: adverse changes in the loan portfolio and the resulting credit risk-related losses and expenses; potential inadequacy of the allowance for credit losses; the ability to maintain or improve origination volumes; competitive influences on product pricing; the ability to integrate acquisitions and realize expected cost savings and revenue enhancements; effects of changes in interest rates on net interest margin; and changes in federal and state regulations and laws. Additional factors can be found in the Company's 2009 Annual Report on Form 10-K which has been filed with the Securities and Exchange Commission and is available at the Securities and Exchange Commission's web site (www.sec.gov).
About Sterling Bancshares
Sterling Bancshares, Inc. is a Houston-based bank holding company with total assets of $5.0 billion, which operates 56 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
-Tables to follow-
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands, except for per share data)
Quarter Ended Year-to-date
------------- ------------
Sep. 30, Jun. 30, Sep. 30,
2010 2010 2009 2010 2009
---- ---- ---- ---- ----
Profitability
Net income $4,455 $596 $(24,724) $(1,197) $(14,710)
Net income
available to
common
shareholders $4,455 $596 $(24,724) $(1,197) $(24,052)
Earnings per
common share (1)
Basic $0.04 $0.01 $(0.30) $(0.01) $(0.31)
Diluted $0.04 $0.01 $(0.30) $(0.01) $(0.31)
Return on average
common equity (2) 2.80% 0.38% (16.98)% (0.26)% (5.77)%
Return on average
assets (2) 0.35% 0.05% (1.97)% (0.03)% (0.39)%
Net interest
margin (3) 3.68% 3.74% 4.20% 3.81% 4.26%
Efficiency Ratio
(4):
Consolidated 72.53% 78.77% 69.56% 75.86% 68.73%
Sterling Bank 70.74% 76.40% 67.79% 73.58% 66.76%
Liquidity and
Capital Ratios
Average loans to
average deposits 71.63% 73.39% 85.86% 74.51% 91.82%
Period-end
stockholders'
equity to total
assets 12.44% 12.30% 11.23% 12.44% 11.23%
Average
stockholders'
equity to average
assets 12.53% 12.28% 11.60% 12.15% 12.18%
Period-end
tangible capital
to total tangible
assets 9.13% 9.01% 7.70% 9.13% 7.70%
Tier 1 capital to
risk-weighted
assets 15.23% 14.45% 11.20% 15.23% 11.20%
Total capital to
risk-weighted
assets 17.88% 17.04% 13.95% 17.88% 13.95%
Tier 1 leverage
ratio (Tier 1
capital to
average assets) 10.53% 10.32% 8.88% 10.53% 8.88%
Other Data
Shares used in
computing
earnings per
common share
Basic shares 101,934 101,898 81,707 97,487 77,659
Diluted shares 102,212 102,144 81,707 97,487 77,659
End of period
common shares
outstanding 101,952 101,927 81,755 101,952 81,755
Book value per
common share at
period-end $6.15 $6.13 $6.67 $6.15 $6.67
Cash dividends
paid per common
share $0.015 $0.015 $0.055 $0.045 $0.165
Common stock
dividend payout
ratio 34.35% 256.65% (18.19)% (358.14)% (85.45)%
Full-time
equivalent
employees 986 991 1,013 986 1,013
Number of banking
centers 56 57 60 56 60
STERLING BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands)
Sep. 30, Jun. 30, Mar. 31,
2010 2010 2010
---- ---- ----
ASSETS
Cash and cash equivalents $366,590 $359,388 $361,199
Available-for-sale securities,
at fair value 1,169,519 1,069,964 920,082
Held-to-maturity securities, at
amortized cost 280,215 280,658 267,503
Loans held for sale 7,123 6,509 18,055
Loans held for investment 2,862,952 2,992,370 3,096,261
--------- --------- ---------
Total loans 2,870,075 2,998,879 3,114,316
Allowance for loan losses (80,754) (80,983) (76,646)
------- ------- -------
Loans, net 2,789,321 2,917,896 3,037,670
Premises and equipment, net 48,507 47,812 47,396
Real estate acquired by
foreclosure 14,571 18,151 17,282
Goodwill 173,210 173,210 173,210
Core deposits and other
intangibles, net 10,004 10,540 11,077
Accrued interest receivable 14,356 14,951 15,462
Other assets 173,328 183,429 192,498
------- ------- -------
TOTAL ASSETS $5,039,621 $5,075,999 $5,043,379
========== ========== ==========
LIABILITIES AND SHAREHOLDERS'
EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $1,248,321 $1,266,781 $1,167,602
Interest-bearing demand 2,014,207 1,962,854 2,031,399
Certificates and other time
deposits 840,683 921,495 925,427
------- ------- -------
Total deposits 4,103,211 4,151,130 4,124,428
Other borrowed funds 106,546 100,770 99,012
Subordinated debt 78,624 78,247 77,737
Junior subordinated debt 82,734 82,734 82,734
Accrued interest payable and other
liabilities 41,704 38,722 39,944
------ ------ ------
Total liabilities 4,412,819 4,451,603 4,423,855
COMMITMENTS AND CONTINGENCIES - - -
SHAREHOLDERS' EQUITY
Common stock 103,820 103,795 103,745
Capital surplus 238,536 238,186 237,439
Retained earnings 290,429 287,503 288,436
Treasury stock (21,399) (21,399) (21,399)
Accumulated other comprehensive
income, net of tax 15,416 16,311 11,303
------ ------ ------
Total shareholders' equity 626,802 624,396 619,524
------- ------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $5,039,621 $5,075,999 $5,043,379
========== ========== ==========
Dec. 31, Sep. 30,
2009 2009
---- ----
ASSETS
Cash and cash equivalents $246,215 $158,114
Available-for-sale securities, at fair
value 846,216 836,521
Held-to-maturity securities, at
amortized cost 222,845 162,990
Loans held for sale 11,778 38,187
Loans held for investment 3,233,273 3,312,520
--------- ---------
Total loans 3,245,051 3,350,707
Allowance for loan losses (74,732) (70,059)
------- -------
Loans, net 3,170,319 3,280,648
Premises and equipment, net 48,816 49,128
Real estate acquired by foreclosure 16,763 11,674
Goodwill 173,210 173,210
Core deposits and other intangibles, net 11,626 12,179
Accrued interest receivable 16,502 16,142
Other assets 184,536 158,912
------- -------
TOTAL ASSETS $4,937,048 $4,859,518
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $1,144,133 $1,094,346
Interest-bearing demand 2,004,539 1,874,746
Certificates and other time deposits 946,279 1,038,362
------- ---------
Total deposits 4,094,951 4,007,454
Other borrowed funds 97,245 99,486
Subordinated debt 77,338 77,616
Junior subordinated debt 82,734 82,734
Accrued interest payable and other
liabilities 44,247 46,716
------ ------
Total liabilities 4,396,515 4,314,006
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY
Common stock 83,721 83,622
Capital surplus 170,848 171,955
Retained earnings 295,909 295,401
Treasury stock (21,399) (21,399)
Accumulated other comprehensive income,
net of tax 11,454 15,933
------ ------
Total shareholders' equity 540,533 545,512
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $4,937,048 $4,859,518
========== ==========
STERLING BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(dollars in thousands, except for per share data)
Quarter Ended
-------------
Sep. Jun. Mar. Dec. Sep.
30, 30, 31, 31, 30,
2010 2010 2010 2009 2009
---- ---- ---- ---- ----Interest income:
Loans, including
fees $40,153 $42,087 $43,649 $46,876 $49,658
Securities:
Taxable 9,841 9,602 9,117 9,758 9,286
Non-taxable 1,013 915 925 929 897
Deposits in
financial
institutions 157 231 115 90 64
Other interest-
earning assets 1 3 1 19 29
--- --- --- --- ---
Total interest
income 51,165 52,838 53,807 57,672 59,934
------ ------ ------ ------ ------
Interest expense:
Demand and savings
deposits 3,583 4,319 4,212 4,243 4,403
Certificates and
other time
deposits 2,823 3,159 3,352 4,577 5,504
Other borrowed
funds 784 768 448 314 346
Subordinated debt 747 705 687 713 748
Junior
subordinated debt 1,071 1,040 1,028 1,045 1,082
----- ----- ----- ----- -----
Total interest
expense 9,008 9,991 9,727 10,892 12,083
----- ----- ----- ------ ------
Net interest
income 42,157 42,847 44,080 46,780 47,851
Provision for
credit losses 7,716 9,336 22,936 11,000 56,131
----- ----- ------ ------ ------
Net interest
income after
provision for
credit losses 34,441 33,511 21,144 35,780 (8,280)
------ ------ ------ ------ ------
Noninterest
income:
Customer service
fees 3,728 3,591 3,488 3,722 3,845
Net gain (loss) on
securities 43 17 20 (1,823) 4
Wealth management
fees 1,733 2,102 2,098 2,049 1,862
Other 3,986 2,815 931 1,543 3,402
Total noninterest
income 9,490 8,525 6,537 5,491 9,113
----- ----- ----- ----- -----
Noninterest
expense:
Salaries and
employee benefits 20,722 20,453 20,503 19,496 21,005
Occupancy 5,566 5,709 5,790 5,822 5,967
Technology 2,267 2,332 2,417 2,375 2,495
Professional fees 1,452 1,372 2,005 1,283 1,065
Postage, delivery
and supplies 661 719 708 685 700
Marketing 198 271 269 443 557
Core deposits &
other intangibles
amortization 537 537 549 552 565
Acquisition costs - - - 980 154
FDIC insurance
assessments 2,478 2,438 2,547 1,856 1,741
Other 3,899 6,975 4,165 5,998 5,826
Total noninterest
expense 37,780 40,806 38,953 39,490 40,075
------ ------ ------ ------ ------
Income (loss)
before income
taxes 6,151 1,230 (11,272) 1,781 (39,242)
Income taxes
provision
(benefit) 1,696 634 (5,024) 45 (14,518)
----- --- ------ --- -------
Net income (loss) $4,455 $596 $(6,248) $1,736 $(24,724)
Preferred stock
dividends - - - - -
--- --- --- --- ---
Net income (loss)
available to
common
shareholders $4,455 $596 $(6,248) $1,736 $(24,724)
====== ==== ======= ====== ========
Earnings (loss)
per common share
(1):
Basic $0.04 $0.01 $(0.07) $0.02 $(0.30)
Diluted $0.04 $0.01 $(0.07) $0.02 $(0.30)
===== ===== ====== ===== ======
Year-to-date
------------
2010 2009
---- ----
Interest income:
Loans, including fees $125,889 $154,349
Securities:
Taxable 28,560 26,659
Non-taxable 2,853 2,687
Deposits in financial
institutions 503 64
Other interest-earning
assets 5 61
--- ---
Total interest income 157,810 183,820
--- ---
Interest expense:
Demand and savings deposits 12,114 11,781
Certificates and other time
deposits 9,334 19,474
Other borrowed funds 2,000 1,583
Subordinated debt 2,139 2,612
Junior subordinated debt 3,139 3,441
Total interest expense 28,726 38,891
Net interest income 129,084 144,929
Provision for credit losses 39,988 76,631
Net interest income after
provision for credit losses 89,096 68,298
------ ------
Noninterest income:
Customer service fees 10,807 11,709
Net gain (loss) on securities 80 17
Wealth management fees 5,933 5,904
Other 7,732 12,774
Total noninterest income 24,552 30,404
Noninterest expense:
Salaries and employee
benefits 61,678 67,434
Occupancy 17,065 18,004
Technology 7,016 7,475
Professional fees 4,829 3,419
Postage, delivery and
supplies 2,088 2,181
Marketing 738 1,487
Core deposits & other
intangibles amortization 1,623 1,695
Acquisition costs - 154
FDIC insurance assessments 7,463 6,974
Other 15,039 14,871
Total noninterest expense 117,539 123,694
--- ---
Income (loss) before income
taxes (3,891) (24,992)
Income taxes provision
(benefit) (2,694) (10,282)
------ -------
Net income (loss) $(1,197) $(14,710)
Preferred stock dividends - 9,342
--
Net income (loss) available
to common shareholders $(1,197) $(24,052)
======= ========
Earnings (loss) per common
share (1):
Basic $(0.01) $(0.31)
Diluted $(0.01) $(0.31)
====== ======
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Quarter Ended
-------------
Sep. 30,
2010
----
Yield/
Average Balance Interest Rate
--------------- -------- -------
Interest-Earning Assets:
Loans held for sale $5,390 $28 2.06%
Loans held for investment:
Taxable 2,930,124 40,122 5.43%
Non-taxable (3) 295 4 5.52%
Securities:
Taxable 1,286,050 9,841 3.04%
Non-taxable (3) 112,188 1,497 5.30%
Deposits in financial
institutions 260,167 157 0.24%
Other interest-earning
assets 566 1 0.84%
--- --- ----
Total interest-earning
assets 4,594,780 51,650 4.46%
Noninterest-earning assets 438,522
-------
Total Assets $5,033,302
==========
Interest-Bearing
Liabilities:
Deposits:
Demand and savings $2,003,914 $3,583 0.71%
Certificates and other time 870,041 2,823 1.29%
Other borrowed funds 103,902 784 2.99%
Subordinated debt 78,472 747 3.78%
Junior subordinated debt 82,734 1,071 5.14%
------ ----- ----
Total interest-bearing
liabilities 3,139,063 9,008 1.14%
Noninterest-bearing sources:
Noninterest-bearing
liabilities 1,263,481
Shareholders' equity 630,758
-------
Total Liabilities and
Shareholders' Equity $5,033,302
==========
Tax Equivalent Net Interest
Income & Margin (3) 42,642 3.68%
====
Non-GAAP to GAAP
Reconciliation:
Tax Equivalent adjustment:
Loans 1
Securities 484
---
Total tax equivalent
adjustment 485
---
Net Interest Income $42,157
=======
Quarter Ended
-------------
Jun. 30,
2010
----
Yield/
Average Balance Interest Rate
--------------- -------- -------
Interest-Earning Assets:
Loans held for sale $11,454 $54 1.90%
Loans held for investment:
Taxable 3,036,770 41,994 5.55%
Non-taxable (3) 4,260 57 5.34%
Securities:
Taxable 1,125,517 9,602 3.42%
Non-taxable (3) 100,192 1,347 5.39%
Deposits in financial
institutions 362,429 231 0.26%
Other interest-earning
assets 840 3 1.27%
--- --- ----
Total interest-earning
assets 4,641,462 53,288 4.60%
Noninterest-earning assets 444,933
-------
Total Assets $5,086,395
==========
Interest-Bearing
Liabilities:
Deposits:
Demand and savings $2,027,133 $4,319 0.85%
Certificates and other time 934,941 3,159 1.36%
Other borrowed funds 100,976 768 3.05%
Subordinated debt 77,831 705 3.63%
Junior subordinated debt 82,734 1,040 5.04%
------ ----- ----
Total interest-bearing
liabilities 3,223,615 9,991 1.24%
Noninterest-bearing sources:
Noninterest-bearing
liabilities 1,238,352
Shareholders' equity 624,428
-------
Total Liabilities and
Shareholders' Equity $5,086,395
==========
Tax Equivalent Net Interest
Income & Margin (3) 43,297 3.74%
====
Non-GAAP to GAAP
Reconciliation:
Tax Equivalent adjustment:
Loans 18
Securities 432
---
Total tax equivalent
adjustment 450
---
Net Interest Income $42,847
=======
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Year-to-date
------------
2010
----
Average Yield/
Balance Interest Rate
-------- -------- -------
Interest-Earning Assets:
Loans held for sale $10,109 $129 1.70%
Loans held for investment:
Taxable 3,046,899 125,677 5.51%
Non-taxable (3) 3,113 122 5.26%
Securities:
Taxable 1,138,539 28,560 3.35%
Non-taxable (3) 104,647 4,206 5.37%
Deposits in financial institutions 272,475 503 0.25%
Other interest-earning assets 1,268 5 1.01%
----
Total interest-earning assets 4,577,050 159,202 4.65%
Noninterest-earning assets 442,382
Total Assets $5,019,432
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $2,008,236 $12,114 0.81%
Certificates and other time 909,618 9,334 1.37%
Other borrowed funds 101,602 2,000 2.63%
Subordinated debt 78,012 2,139 3.67%
Junior subordinated debt 82,734 3,139 5.07%
----
Total interest-bearing liabilities 3,180,202 28,726 1.21%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,229,222
Shareholders' equity 610,008
Total Liabilities and Shareholders'
Equity $5,019,432
==========
Tax Equivalent Net Interest Income &
Margin (3) 130,476 3.81%
====
Non-GAAP to GAAP Reconciliation:
Tax equivalent adjustment:
Loans 39
Securities 1,353
Total tax equivalent adjustment 1,392
Net Interest Income $129,084
========
Year-to-date
------------
2009
----
Average Yield/
Balance Interest Rate
-------- -------- ------
Interest-Earning Assets:
Loans held for sale $2,064 $89 5.75%
Loans held for investment:
Taxable 3,624,478 154,098 5.68%
Non-taxable (3) 5,141 237 6.16%
Securities:
Taxable 772,386 26,659 4.61%
Non-taxable (3) 97,069 3,902 5.37%
Deposits in financial institutions 60,885 64 0.14%
Other interest-earning assets 29,336 61 0.28%
----
Total interest-earning assets 4,591,359 185,110 5.39%
Noninterest-earning assets 422,017
Total Assets $5,013,376
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,693,613 $11,781 0.93%
Certificates and other time 1,137,866 19,474 2.29%
Other borrowed funds 241,653 1,583 0.88%
Subordinated debt 77,582 2,612 4.50%
Junior subordinated debt 82,734 3,441 5.56%
----
Total interest-bearing liabilities 3,233,448 38,891 1.61%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,169,110
Shareholders' equity 610,818
Total Liabilities and Shareholders'
Equity $5,013,376
==========
Tax Equivalent Net Interest Income &
Margin (3) 146,219 4.26%
====
Non-GAAP to GAAP Reconciliation:
Tax equivalent adjustment:
Loans 75
Securities 1,215
Total tax equivalent adjustment 1,290
Net Interest Income $144,929
========
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Quarter Ended
-------------
Sep. 30, Jun. 30, Mar. 31,
2010 2010 2010
---- ---- ----
Condensed Average Balance Sheet
Loans held for sale $5,390 $11,454 $13,572
Loans held for investment 2,930,419 3,041,030 3,181,345
--------- --------- ---------
Total loans 2,935,809 3,052,484 3,194,917
Available-for-sale securities, at
fair value 1,113,780 953,742 860,466
Held-to-maturity securities, at
amortized cost 284,458 271,967 241,894
Deposits in financial institutions 260,167 362,429 194,104
Other earning assets 566 840 2,418
--- --- -----
Total earning assets 4,594,780 4,641,462 4,493,799
Goodwill 173,210 173,210 173,210
Core deposits and other
intangibles, net 10,262 10,800 11,340
All other non-interest earning
assets 255,050 260,923 259,198
------- ------- -------
Total assets $5,033,302 $5,086,395 $4,937,547
========== ========== ==========
Noninterest-bearing demand $1,224,402 $1,197,400 $1,144,754
Interest bearing deposits:
Interest-bearing demand 2,003,914 2,027,133 1,993,546
Jumbo certificates of deposits 539,094 582,727 549,723
Regular certificates of deposit 227,490 233,592 241,649
Brokered certificates of deposit 103,457 118,622 133,101
------- ------- -------
Total deposits 4,098,357 4,159,474 4,062,773
Other borrowed funds 103,902 100,976 99,884
Subordinated debt 78,472 77,831 77,724
Junior subordinated debt 82,734 82,734 82,734
Accrued interest payable and other
liabilities 39,079 40,952 40,216
------ ------ ------
Total liabilities 4,402,544 4,461,967 4,363,331
Total shareholders' equity 630,758 624,428 574,216
------- ------- -------
Total liabilities and shareholders'
equity $5,033,302 $5,086,395 $4,937,547
========== ========== ==========
Sep. 30, Jun. 30, Mar. 31,
2010 2010 2010
---- ---- ----
Period-end Loans:
Loans held for sale $7,123 $6,509 $18,055
Loans held for investment:
Commercial and industrial 597,205 658,141 697,998
Real Estate:
Commercial 1,590,081 1,632,213 1,672,562
Construction and development 268,691 310,689 330,855
Residential mortgage 362,404 343,894 346,400
Consumer/other 44,571 47,433 48,446
------ ------ ------
Loans held for investment 2,862,952 2,992,370 3,096,261
--------- --------- ---------
Total period-end loans $2,870,075 $2,998,879 $3,114,316
========== ========== ==========
Period-End Deposits:
Noninterest-bearing demand $1,248,321 $1,266,781 $1,167,602
Interest-bearing demand 2,014,207 1,962,854 2,031,399
Certificates and other time
deposits:
Jumbo 512,178 587,377 560,093
Regular 224,290 231,404 234,010
Brokered 104,215 102,714 131,324
------- ------- -------
Total period-end deposits $4,103,211 $4,151,130 $4,124,428
========== ========== ==========
Quarter Ended
-------------
Dec. 31, Sep. 30,
2009 2009
---- ----
Condensed Average Balance Sheet
Loans held for sale $38,844 $1,607
Loans held for investment 3,262,525 3,472,635
--------- ---------
Total loans 3,301,369 3,474,242
Available-for-sale securities, at
fair value 897,733 779,792
Held-to-maturity securities, at
amortized cost 168,940 162,717
Deposits in financial institutions 163,195 106,392
Other earning assets 26,825 38,419
------ ------
Total earning assets 4,558,062 4,561,562
Goodwill 173,210 173,210
Core deposits and other
intangibles, net 11,890 12,463
All other non-interest earning
assets 236,710 230,667
------- -------
Total assets $4,979,872 $4,977,902
========== ==========
Noninterest-bearing demand $1,158,023 $1,124,076
Interest bearing deposits:
Interest-bearing demand 1,946,308 1,837,612
Jumbo certificates of deposits 576,984 614,418
Regular certificates of deposit 264,388 287,243
Brokered certificates of deposit 166,319 182,852
------- -------
Total deposits 4,112,022 4,046,201
Other borrowed funds 107,211 145,625
Subordinated debt 77,824 77,232
Junior subordinated debt 82,734 82,734
Accrued interest payable and other
liabilities 46,348 48,480
------ ------
Total liabilities 4,426,139 4,400,272
Total shareholders' equity 553,733 577,630
------- -------
Total liabilities and shareholders'
equity $4,979,872 $4,977,902
========== ==========
Dec. 31, Sep. 30,
2009 2009
---- ----
Period-end Loans:
Loans held for sale $11,778 $38,187
Loans held for investment:
Commercial and industrial 806,542 823,797
Real Estate:
Commercial 1,669,118 1,703,629
Construction and development 360,444 394,819
Residential mortgage 344,838 335,007
Consumer/other 52,331 55,268
------ ------
Loans held for investment 3,233,273 3,312,520
--------- ---------
Total period-end loans $3,245,051 $3,350,707
========== ==========
Period-End Deposits:
Noninterest-bearing demand $1,144,133 $1,094,346
Interest-bearing demand 2,004,539 1,874,746
Certificates and other time
deposits:
Jumbo 549,588 594,590
Regular 252,682 273,721
Brokered 144,009 170,051
------- -------
Total period-end deposits $4,094,951 $4,007,454
========== ==========
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Quarter Ended
-------------
Sep. Jun. Mar.
30, 30, 31,
2010 2010 2010
---- ---- ----
Allowance For Credit Losses
Allowance for loan losses at beginning
of period $80,983 $76,646 $74,732
Charge-offs:
Commercial, financial and industrial 1,034 1,687 1,968
Real estate, mortgage and construction 7,314 5,786 20,214
Consumer 285 205 262
Total charge-offs 8,633 7,678 22,444
Recoveries:
Commercial, financial and industrial 481 433 483
Real estate, mortgage and construction 633 845 821
Consumer 72 51 118
Total Recoveries 1,186 1,329 1,422
Net charge-offs 7,447 6,349 21,022
Provision for loan losses 7,218 10,686 22,936
Allowance for loan losses at end of
period $80,754 $80,983 $76,646
------- ------- -------
Reserve for unfunded loan commitments
at beginning of period $1,502 $2,852 $2,852
Provision for losses on unfunded loan
commitments 498 (1,350) -
--- ------ ---
Reserve for unfunded loan commitments
at end of period 2,000 1,502 2,852
----- ----- -----
Total allowance for credit losses $82,754 $82,485 $79,498
======= ======= =======
Nonperforming Assets
Nonperforming loans:
Loans held for sale $1,665 $3,491 $10,883
Loans held for investment 162,096 162,669 125,025
Real estate acquired by foreclosure 14,571 18,151 17,282
Other repossessed assets 50 20 60
Total nonperforming assets $178,382 $184,331 $153,250
======== ======== ========
Restructured loans - accruing $17,495 $15,001 $10,675
======= ======= =======
Potential problem loans $169,646 $142,123 $172,020
======== ======== ========
Accruing loans 30 to 89 days past due $16,234 $19,307 $46,410
======= ======= =======
Accruing loans past due 90 days or more $953 $441 $306
==== ==== ====
Ratios
Period-end allowance for credit losses
to period-end loans 2.88% 2.75% 2.55%
Period-end allowance for loan losses
to period-end loans 2.81% 2.70% 2.46%
Period-end allowance for loan losses
to nonperforming loans 49.31% 48.74% 56.40%
Nonperforming loans to period-end loans 5.71% 5.54% 4.36%
Nonperforming assets to period-end
assets 3.54% 3.63% 3.04%
Net charge-offs to average loans (2) 1.01% 0.83% 2.67%
Quarter Ended
-------------
Dec. Sep.
31, 30,
2009 2009
---- ----
Allowance For Credit Losses
Allowance for loan losses at beginning
of period $70,059 $53,075
Charge-offs:
Commercial, financial and industrial 1,536 5,049
Real estate, mortgage and construction 5,448 32,464
Consumer 477 321
Total charge-offs 7,461 37,834
Recoveries:
Commercial, financial and industrial 536 251
Real estate, mortgage and construction 488 23
Consumer 110 163
Total Recoveries 1,134 437
Net charge-offs 6,327 37,397
Provision for loan losses 11,000 54,381
Allowance for loan losses at end of
period $74,732 $70,059
------- -------
Reserve for unfunded loan commitments
at beginning of period $2,852 $1,102
Provision for losses on unfunded loan
commitments - 1,750
--- -----
Reserve for unfunded loan commitments
at end of period 2,852 2,852
----- -----
Total allowance for credit losses $77,584 $72,911
======= =======
Nonperforming Assets
Nonperforming loans:
Loans held for sale $9,896 $29,472
Loans held for investment 92,668 65,515
Real estate acquired by foreclosure 16,763 11,674
Other repossessed assets 38 33
Total nonperforming assets $119,365 $106,694
======== ========
Restructured loans - accruing $69,857 $45,981
======= =======
Potential problem loans $187,513 $131,950
======== ========
Accruing loans 30 to 89 days past due $34,243 $23,364
======= =======
Accruing loans past due 90 days or more $41 $681
=== ====
Ratios
Period-end allowance for credit losses
to period-end loans 2.39% 2.18%
Period-end allowance for loan losses
to period-end loans 2.30% 2.09%
Period-end allowance for loan losses
to nonperforming loans 72.86% 73.76%
Nonperforming loans to period-end loans 3.16% 2.83%
Nonperforming assets to period-end
assets 2.42% 2.20%
Net charge-offs to average loans (2) 0.76% 4.27%
Year-to-date
------------
2010 2009
---- ----
Allowance For Credit Losses
Allowance for loan losses at beginning
of period $74,732 $49,177
Charge-offs:
Commercial, financial and industrial 4,689 19,378
Real estate, mortgage and construction 33,314 35,962
Consumer 752 1,109
Total charge-offs 38,755 56,449
Recoveries:
Commercial, financial and industrial 1,397 1,177
Real estate, mortgage and construction 2,299 301
Consumer 241 420
Total Recoveries 3,937 1,898
Net charge-offs 34,818 54,551
Provision for loan losses 40,840 75,433
Allowance for loan losses at end of
period $80,754 $70,059
------- -------
Reserve for unfunded loan commitments
at beginning of period $2,852 $1,654
Provision for losses on unfunded loan
commitments (852) 1,198
---- -----
Reserve for unfunded loan commitments
at end of period 2,000 2,852
----- -----
Total allowance for credit losses $82,754 $72,911
======= =======
Nonperforming Assets
Nonperforming loans:
Loans held for sale $1,665 $29,472
Loans held for investment 162,096 65,515
Real estate acquired by foreclosure 14,571 11,674
Other repossessed assets 50 33
Total nonperforming assets $178,382 $106,694
======== ========
Restructured loans - accruing $17,495 $45,981
======= =======
Potential problem loans $169,646 $131,950
======== ========
Accruing loans 30 to 89 days past due $16,234 $23,364
======= =======
Accruing loans past due 90 days or more $953 $681
==== ====
Ratios
Period-end allowance for credit losses
to period-end loans 2.88% 2.18%
Period-end allowance for loan losses
to period-end loans 2.81% 2.09%
Period-end allowance for loan losses
to nonperforming loans 49.31% 73.76%
Nonperforming loans to period-end loans 5.71% 2.83%
Nonperforming assets to period-end
assets 3.54% 2.20%
Net charge-offs to average loans (2) 1.52% 2.01%
STERLING BANCSHARES, INC.
FOOTNOTES TO EARNINGS RELEASE
(1) Earnings per share in each quarter is computed individually using the
weighted-average number of shares
outstanding during that quarter while earnings per share for the full
period is computed using the
weighted-average number of shares outstanding during the year.
Thus, the sum for all quarters does not
necessarily equal the full period earnings per share.
(2) Interim periods annualized.
(3) 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 sources.
(4) The efficiency ratio is calculated by dividing noninterest expense
less acquisition costs and a one-time
severance charge by tax equivalent basis net interest income plus
noninterest income less net
gain (loss) on investment securities.
SOURCE Sterling Bancshares, Inc.
