STERLING BANCSHARES, INC. 
By HOUSTON, Jan. 18, 2011 /PRNewswire/ -- Sterling Bancshares, Inc. (Nasdaq: SBIB) today reported net income of $1.9 million, or $0.02 per diluted common share, for the fourth quarter ended December 31, 2010, as compared to net income of $4.5 million, or $0.04 per diluted common share, for the third quarter of 2010.
Net income for the year ended December 31, 2010, was $704 thousand, or $0.01 per diluted common share, compared to a net loss of $13 million for 2009. Net loss applicable to common shareholders for the year ended December 31, 2009, was $22.3 million, or $0.28 per diluted common share, which included total preferred dividends of $9.3 million, or $0.12 per diluted common share.
Key items and metrics include the following:
-- Total nonperforming loans decreased $30.5 million, or 19% over the prior
quarter;
-- Real estate acquired by foreclosure increased $22.5 million due to work
out efforts on problem loans;
-- Period-end allowance for loan losses to period-end loans was 2.80% at
December 31, 2010, compared to 2.81% at September 30, 2010;
-- Annual deposit growth of $162 million or 4%; and
-- Tangible capital ratio was 8.77% and all regulatory capital ratios were
in excess of those considered to be well-capitalized at December 31,
2010.
At December 31, 2010, total loans were $2.8 billion, a decrease of $490 million or 15.1% compared to December 31, 2009. This decrease was due primarily to reductions in commercial real estate and construction and development loans of $157 million and $140 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 reductions in the energy lending portfolio of approximately $100 million and continued low loan demand.
At December 31, 2010, total deposits were $4.3 billion, an increase of $162 million or 4.0% compared to December 31, 2009. Noninterest-bearing deposits increased $178 million or 15.6% for December 31, 2010, compared to December 31, 2009. Due to continued growth in core deposits during 2010, the Company was able to reduce higher-cost certificates of deposit by $150 million for the year.
Overall credit quality improved during the fourth quarter of 2010 with total nonperforming assets decreasing $8.1 million to $170 million at December 31, 2010, including a decrease in nonperforming loans of $30.5 million. Foreclosed assets increased $22.5 million on a linked-quarter basis due to problem loans transitioning into this category. Potential problem loans were $166 million at December 31, 2010, a decrease of $3.2 million over the prior quarter.
At December 31, 2010, the total allowance for loan losses was $77.1 million or 2.80% of period-end total loans, down from $80.8 million or 2.81% of period-end total loans at September 30, 2010, and up from $74.7 million or 2.30% of period-end total loans at December 31, 2009.
Net charge-offs for the fourth quarter of 2010 were $9.7 million or 1.36% of average total loans, compared to $7.4 million or 1.01% of average total loans for the third quarter of 2010. Net charge-offs for the year ended December 31, 2010, were $44.5 million or 1.48% of average total loans, down from $60.9 million or 1.72% for 2009.
Tax-equivalent net interest income for the fourth quarter of 2010 was $40.1 million, down $2.5 million on a linked-quarter basis. Tax-equivalent net interest margin was 3.39% for the fourth quarter of 2010, down 29 basis points from 3.68% for the third quarter of 2010. Net interest income and margin during the fourth 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 of 2010.
Noninterest income for the fourth quarter of 2010 was $8.9 million, an increase of $3.4 million compared to the same period in 2009. The fourth quarter of 2009 was negatively impacted by $1.6 million in losses on sale of loans classified as held for sale and $1.8 million of losses on the sale of securities. Noninterest income was $33.4 million for 2010, a decrease of $2.5 million compared to 2009. This decrease was primarily related to gains from interest rate hedge ineffectiveness recorded in 2009.
Total noninterest expense for the fourth quarter of 2010 was $41.5 million, an increase of $2.0 million compared to the same period in 2009. The increase in noninterest expense was primarily due to an increase in professional fees of $937 thousand and FDIC assessments of $811 thousand. Noninterest expense was $159 million for 2010, a decrease of $4.1 million compared to 2009 which was primarily related to reductions in salary and benefits of $5.3 million.
As of December 31, 2010, Sterling had total assets of $5.2 billion, total loans of $2.8 billion and total deposits of $4.3 billion. Shareholders' equity of $622 million at December 31, 2010, was 11.98% of total assets. Book value per common share at period-end was $6.10.
Additional Information
Management of Sterling will not be hosting a conference call. For more financial information on Sterling refer to the Investor Relations section of the Company's web site at www.banksterling.com. The previous conference call scheduled for January 26, 2011, will no longer take place.
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; any adjustments to the Company's reported results after final review by the Company's independent registered public accounting firm; 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 $5.2 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
-------------
Dec. 31, Sep. 30, Dec. 31,
2010 2010 2009
---- ---- ----
Profitability
Net income (loss) $1,901 $4,455 $1,736
Net income (loss) applicable to common
shareholders $1,901 $4,455 $1,736
Earnings (loss) per common share (1)
Basic $0.02 $0.04 $0.02
Diluted $0.02 $0.04 $0.02
Return on average common equity (2) 1.20% 2.80% 1.24%
Return on average assets (2) 0.15% 0.35% 0.14%
Tax equivalent net interest margin (3) 3.39% 3.68% 4.11%
Efficiency Ratio (4):
Consolidated 84.49% 72.53% 70.60%
Sterling Bank 80.60% 70.74% 67.64%
Liquidity and Capital Ratios
Average loans to average deposits 67.16% 71.63% 80.29%
Period-end stockholders' equity to total
assets 11.98% 12.44% 10.95%
Average stockholders' equity to average
assets 12.28% 12.53% 11.12%
Period-end tangible capital to total
tangible assets 8.77% 9.13% 7.48%
Tier 1 capital to risk-weighted assets 15.43% 15.23% 11.61%
Total capital to risk-weighted assets 18.10% 17.88% 14.41%
Tier 1 leverage ratio (Tier 1 capital to
average assets) 10.32% 10.53% 8.89%
Other Data
Shares used in computing earnings (loss)
per common share
Basic shares 101,967 101,934 81,771
Diluted shares 102,331 102,212 82,019
End of period common shares outstanding 101,984 101,952 81,853
Book value per common share at period-end $6.10 $6.15 $6.60
Cash dividends paid per common share $0.015 $0.015 $0.015
Common stock dividend payout ratio 80.53% 34.35% 70.74%
Full-time equivalent employees 946 986 1,012
Number of banking centers 57 56 58
Year Ended
----------
2010 2009
---- ----
Profitability
Net income (loss) $704 $(12,974)
Net income (loss) applicable to common
shareholders $704 $(22,316)
Earnings (loss) per common share (1)
Basic $0.01 $(0.28)
Diluted $0.01 $(0.28)
Return on average common equity (2) 0.11% (4.01)%
Return on average assets (2) 0.01% (0.26)%
Tax equivalent net interest margin (3) 3.70% 4.22%
Efficiency Ratio (4):
Consolidated 77.93% 69.17%
Sterling Bank 75.27% 66.97%
Liquidity and Capital Ratios
Average loans to average deposits 72.63% 88.83%
Period-end stockholders' equity to total
assets 11.98% 10.95%
Average stockholders' equity to average
assets 12.19% 11.92%
Period-end tangible capital to total
tangible assets 8.77% 7.48%
Tier 1 capital to risk-weighted assets 15.43% 11.61%
Total capital to risk-weighted assets 18.10% 14.41%
Tier 1 leverage ratio (Tier 1 capital to
average assets) 10.32% 8.89%
Other Data
Shares used in computing earnings (loss)
per common share
Basic shares 98,617 78,696
Diluted shares 98,827 78,696
End of period common shares outstanding 101,984 81,853
Book value per common share at period-end $6.10 $6.60
Cash dividends paid per common share $0.060 $0.180
Common stock dividend payout ratio 827.32% (106.36)%
Full-time equivalent employees 946 1,012
Number of banking centers 57 58
STERLING BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands)
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
========== ========== ==========
Mar. 31, Dec. 31,
2010 2009
---- ----
ASSETS
Cash and cash equivalents $361,199 $246,215
Available-for-sale securities, at
fair value 920,082 846,216
Held-to-maturity securities, at
amortized cost 267,503 222,845
Loans held for sale 18,055 11,778
Loans held for investment 3,096,261 3,233,273
---------
Total loans 3,114,316 3,245,051
Allowance for loan losses (76,646) (74,732)
-------
Loans, net 3,037,670 3,170,319
Premises and equipment, net 47,396 48,816
Real estate acquired by foreclosure 17,282 16,763
Goodwill 173,210 173,210
Core deposits and other intangibles,
net 11,077 11,626
Accrued interest receivable 15,462 16,502
Other assets 192,498 184,536
-------
TOTAL ASSETS $5,043,379 $4,937,048
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $1,167,602 $1,144,133
Interest-bearing demand 2,031,399 2,004,539
Certificates and other time deposits 925,427 946,279
-------
Total deposits 4,124,428 4,094,951
Other borrowed funds 99,012 97,245
Subordinated debt 77,737 77,338
Junior subordinated debt 82,734 82,734
Accrued interest payable and other
liabilities 39,944 44,247
------
Total liabilities 4,423,855 4,396,515
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY
Common stock 103,745 83,721
Capital surplus 237,439 170,848
Retained earnings 288,436 295,909
Treasury stock (21,399) (21,399)
Accumulated other comprehensive
income, net of tax 11,303 11,454
------
Total shareholders' equity 619,524 540,533
-------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $5,043,379 $4,937,048
========== ==========
STERLING BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(dollars in thousands, except for per share data)
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 1,997 1,733 2,102
Other 3,447 3,986 2,815
----- ----- -----
Total noninterest income 8,877 9,490 8,525
----- ----- -----
Noninterest expense:
Salaries and employee benefits 19,933 20,722 20,453
Occupancy 6,083 5,566 5,709
Technology 2,176 2,267 2,332
Professional fees 2,220 1,452 1,372
Postage, delivery and supplies 606 661 719
Marketing 216 198 271
Core deposits and other intangibles
amortization 527 537 537
Acquisition costs - - -
FDIC insurance assessments 2,667 2,478 2,438
Other 7,076 3,899 6,975
----- ----- -----
Total noninterest expense 41,504 37,780 40,806
------ ------ ------
Income (loss) before income taxes 1,732 6,151 1,230
Income tax provision (benefit) (169) 1,696 634
---- ----- ---
Net income (loss) $1,901 $4,455 $596
====== ====== ====
Preferred stock dividends - - -
--- --- ---
Net income (loss) applicable to common
shareholders $1,901 $4,455 $596
====== ====== ====
Earnings (loss) per common share (1):
Basic $0.02 $0.04 $0.01
===== ===== =====
Diluted $0.02 $0.04 $0.01
===== ===== =====
Quarter Ended
-------------
Mar. 31, Dec. 31,
2010 2009
---- ----
Interest income:
Loans, including fees $43,649 $46,876
Securities:
Taxable 9,117 9,758
Non-taxable 925 929
Deposits in financial institutions 115 90
Other interest-earning assets 1 19
--- ---
Total interest income 53,807 57,672
------ ------
Interest expense:
Demand and savings deposits 4,212 4,243
Certificates and other time deposits 3,352 4,577
Other borrowed funds 448 314
Subordinated debt 687 713
Junior subordinated debt 1,028 1,045
----- -----
Total interest expense 9,727 10,892
----- ------
Net interest income 44,080 46,780
Provision for credit losses 22,936 11,000
------ ------
Net interest income after provision for
credit losses 21,144 35,780
------ ------
Noninterest income:
Customer service fees 3,488 3,722
Net gain (loss) on securities 20 (1,823)
Wealth management fees 2,098 2,049
Other 931 1,543
--- -----
Total noninterest income 6,537 5,491
----- -----
Noninterest expense:
Salaries and employee benefits 20,503 19,496
Occupancy 5,790 5,822
Technology 2,417 2,375
Professional fees 2,005 1,283
Postage, delivery and supplies 708 685
Marketing 269 443
Core deposits and other intangibles
amortization 549 552
Acquisition costs - 980
FDIC insurance assessments 2,547 1,856
Other 4,165 5,998
----- -----
Total noninterest expense 38,953 39,490
------ ------
Income (loss) before income taxes (11,272) 1,781
Income tax provision (benefit) (5,024) 45
------ ---
Net income (loss) $(6,248) $1,736
======= ======
Preferred stock dividends - -
--- ---
Net income (loss) applicable to common
shareholders $(6,248) $1,736
======= ======
Earnings (loss) per common share (1):
Basic $(0.07) $0.02
====== =====
Diluted $(0.07) $0.02
====== =====
Year Ended
----------
2010 2009
---- ----
Interest income:
Loans, including fees $162,892 $201,225
Securities:
Taxable 37,902 36,417
Non-taxable 3,881 3,616
Deposits in financial institutions 761 154
Other interest-earning assets 7 80
--- ---
Total interest income 205,443 241,492
------- -------
Interest expense:
Demand and savings deposits 15,272 16,024
Certificates and other time deposits 11,662 24,051
Other borrowed funds 2,781 1,897
Subordinated debt 2,853 3,325
Junior subordinated debt 4,182 4,486
----- -----
Total interest expense 36,750 49,783
------ ------
Net interest income 168,693 191,709
Provision for credit losses 45,238 87,631
------ ------
Net interest income after provision for
credit losses 123,455 104,078
------- -------
Noninterest income:
Customer service fees 14,376 15,431
Net gain (loss) on securities (56) (1,806)
Wealth management fees 7,930 7,953
Other 11,179 14,317
------ ------
Total noninterest income 33,429 35,895
------ ------
Noninterest expense:
Salaries and employee benefits 81,611 86,930
Occupancy 23,148 23,826
Technology 9,192 9,850
Professional fees 7,049 4,702
Postage, delivery and supplies 2,694 2,866
Marketing 954 1,930
Core deposits and other intangibles
amortization 2,150 2,247
Acquisition costs - 1,134
FDIC insurance assessments 10,130 8,830
Other 22,115 20,869
------ ------
Total noninterest expense 159,043 163,184
------- -------
Income (loss) before income taxes (2,159) (23,211)
Income tax provision (benefit) (2,863) (10,237)
------ -------
Net income (loss) $704 $(12,974)
==== ========
Preferred stock dividends - 9,342
--- -----
Net income (loss) applicable to common
shareholders $704 $(22,316)
==== ========
Earnings (loss) per common share (1):
Basic $0.01 $(0.28)
===== ======
Diluted $0.01 $(0.28)
===== ======
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Quarter Ended
-------------
Dec. 31,
2010
----
Average Yield/
Balance Interest Rate
-------- -------- -------
Interest-Earning Assets:
Loans held for sale $6,728 $36 2.15%
Loans held for investment:
Taxable 2,807,348 36,967 5.22%
Non-taxable (3) 75 1 6.61%
Securities:
Taxable 1,348,061 9,342 2.75%
Non-taxable (3) 112,733 1,527 5.37%
Deposits in financial
institutions 416,917 258 0.25%
Other interest-earning assets 4,859 2 0.14%
Total interest-earning assets 4,696,721 48,133 4.07%
Noninterest-earning assets 435,743
-------
Total Assets $5,132,464
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $2,069,470 $3,158 0.61%
Certificates and other time 827,574 2,328 1.12%
Other borrowed funds 108,810 781 2.85%
Subordinated debt 78,517 714 3.61%
Junior subordinated debt 82,734 1,043 5.00%
Total interest-bearing
liabilities 3,167,105 8,024 1.01%
Noninterest-bearing sources:
Noninterest-bearing
liabilities 1,335,051
Shareholders' equity 630,308
-------
Total Liabilities and
Shareholders' Equity $5,132,464
==========
Tax Equivalent Net Interest
Income and Margin (3) 40,109 3.39%
====
Non-GAAP to GAAP
Reconciliation:
Tax Equivalent Adjustment:
Loans 1
Securities 499
Total tax equivalent adjustment 500
Net Interest Income $39,609
=======
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 1.12%
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 and
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
=======
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Year Ended
-----------
2010
----
Average Yield/
Balance Interest Rate
-------- -------- -------
Interest-Earning Assets:
Loans held for sale $9,256 $165 1.79%
Loans held for investment:
Taxable 2,986,519 162,643 5.45%
Non-taxable (3) 2,347 124 5.28%
Securities:
Taxable 1,191,352 37,902 3.18%
Non-taxable (3) 106,685 5,733 5.37%
Deposits in financial
institutions 308,882 761 0.25%
Other interest-earning assets 2,174 7 0.33%
Total interest-earning assets 4,607,215 207,335 4.50%
Noninterest-earning assets 440,708
-------
Total Assets $5,047,923
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $2,023,670 $15,272 0.75%
Certificates and other time 888,939 11,662 1.31%
Other borrowed funds 103,419 2,781 2.69%
Subordinated debt 78,139 2,853 3.65%
Junior subordinated debt 82,734 4,182 5.05%
Total interest-bearing
liabilities 3,176,901 36,750 1.16%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,255,896
Shareholders' equity 615,126
-------
Total Liabilities and
Shareholders' Equity $5,047,923
==========
Tax Equivalent Net Interest
Income and Margin (3) 170,585 3.70%
====
Non-GAAP to GAAP Reconciliation:
Tax Equivalent Adjustment:
Loans 40
Securities 1,852
-----
Total tax equivalent adjustment 1,892
-----
Net Interest Income $168,693
========
Year Ended
-----------
2009
----
Average Yield/
Balance Interest Rate
-------- -------- ------
Interest-Earning Assets:
Loans held for sale $11,335 $156 1.37%
Loans held for investment:
Taxable 3,532,002 200,860 5.69%
Non-taxable (3) 5,089 306 6.01%
Securities:
Taxable 820,887 36,417 4.44%
Non-taxable (3) 98,278 5,262 5.35%
Deposits in financial
institutions 86,673 154 0.18%
Other interest-earning assets 28,703 80 0.28%
------ --- ----
Total interest-earning assets 4,582,967 243,235 5.31%
Noninterest-earning assets 421,964
Total Assets $5,004,931
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,757,305 $16,024 0.91%
Certificates and other time 1,105,055 24,051 2.18%
Other borrowed funds 207,766 1,897 0.91%
Subordinated debt 77,643 3,325 4.28%
Junior subordinated debt 82,734 4,486 5.42%
Total interest-bearing
liabilities 3,230,503 49,783 1.54%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,177,999
Shareholders' equity 596,429
Total Liabilities and
Shareholders' Equity $5,004,931
==========
Tax Equivalent Net Interest
Income and Margin (3) 193,452 4.22%
====
Non-GAAP to GAAP Reconciliation:
Tax Equivalent Adjustment:
Loans 97
Securities 1,646
-----
Total tax equivalent adjustment 1,743
Net Interest Income $191,709
========
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
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
========== ========== ==========
Quarter Ended
-------------
Mar. 31, Dec. 31,
2010 2009
---- ----
Condensed Average Balance Sheet
Loans held for sale $13,572 $38,844
Loans held for investment 3,181,345 3,262,525
--------- ---------
Total loans 3,194,917 3,301,369
Available-for-sale securities,
at fair value 860,466 897,733
Held-to-maturity securities, at
amortized cost 241,894 168,940
Deposits in financial institutions 194,104 163,195
Other interest-earning assets 2,418 26,825
------
Total interest-earning assets 4,493,799 4,558,062
Goodwill 173,210 173,210
Core deposits and other
intangibles, net 11,340 11,890
All other noninterest-earning
assets 259,198 236,710
-------
Total assets $4,937,547 $4,979,872
========== ==========
Noninterest-bearing demand $1,144,754 $1,158,023
Interest-bearing deposits:
Interest-bearing demand 1,993,546 1,946,308
Jumbo certificates of deposit 549,723 576,984
Regular certificates of deposit 241,649 264,388
Brokered certificates of deposit 133,101 166,319
------- -------
Total deposits 4,062,773 4,112,022
Other borrowed funds 99,884 107,211
Subordinated debt 77,724 77,824
Junior subordinated debt 82,734 82,734
Accrued interest payable and other
liabilities 40,216 46,348
------
Total liabilities 4,363,331 4,426,139
Total shareholders' equity 574,216 553,733
-------
Total liabilities and
shareholders' equity $4,937,547 $4,979,872
========== ==========
Mar. 31, Dec. 31,
2010 2009
---- ----
Period-end Loans:
Loans held for sale $18,055 $11,778
Loans held for investment:
Commercial and industrial 697,998 806,542
Real Estate:
Commercial 1,672,562 1,669,118
Construction and development 330,855 360,444
Residential mortgage 346,400 344,838
Consumer/other 48,446 52,331
------
Loans held for investment 3,096,261 3,233,273
---------
Total period-end loans $3,114,316 $3,245,051
========== ==========
Period-End Deposits:
Noninterest-bearing demand $1,167,602 $1,144,133
Interest-bearing demand 2,031,399 2,004,539
Certificates and other time
deposits:
Jumbo 560,093 549,588
Regular 234,010 252,682
Brokered 131,324 144,009
-------
Total period-end deposits $4,124,428 $4,094,951
========== ==========
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Quarter Ended
-------------
Dec. 31, Sep. 30, Jun. 30,
2010 2010 2010
---- ---- ----
Allowance For Credit Losses
Allowance for loan losses at
beginning of period $80,754 $80,983 $76,646
Charge-offs:
Commercial, financial and industrial 1,845 1,034 1,687
Real estate, mortgage and
construction 8,535 7,314 5,786
Consumer 323 285 205
Total Charge-offs 10,703 8,633 7,678
------ ----- -----
Recoveries:
Commercial, financial and industrial 342 481 433
Real estate, mortgage and
construction 631 633 845
Consumer 67 72 51
Total Recoveries 1,040 1,186 1,329
----- ----- -----
Net charge-offs 9,663 7,447 6,349
Provision for loan losses 6,050 7,218 10,686
----- ----- ------
Allowance for loan losses at end of
period $77,141 $80,754 $80,983
------- ------- -------
Allowance for unfunded loan
commitments at beginning of period $2,000 $1,502 $2,852
Provision for losses on unfunded
loan commitments (800) 498 (1,350)
---- --- ------
Allowance for unfunded loan
commitments at end of period 1,200 2,000 1,502
----- ----- -----
Total allowance for credit losses $78,341 $82,754 $82,485
======= ======= =======
Nonperforming Assets
Nonperforming loans:
Loans held for sale $- $1,665 $3,491
Loans held for investment 133,264 162,096 162,669
Real estate acquired by foreclosure 37,064 14,571 18,151
Other repossessed assets 3 50 20
--- ---
Total nonperforming assets $170,331 $178,382 $184,331
======== ======== ========
Restructured loans - accruing $27,699 $17,495 $15,001
======= ======= =======
Potential problem loans $166,442 $169,646 $142,123
======== ======== ========
Accruing loans 30 to 89 days past
due $23,680 $16,234 $19,307
======= ======= =======
Accruing loans past due 90 days or
more $507 $953 $441
==== ==== ====
Ratios
Period-end allowance for credit
losses to period-end loans 2.84% 2.88% 2.75%
Period-end allowance for loan
losses to period-end loans 2.80% 2.81% 2.70%
Period-end allowance for loan
losses to nonperforming loans 57.89% 49.31% 48.74%
Nonperforming loans to period-end
loans 4.84% 5.71% 5.54%
Nonperforming assets to period-end
assets 3.28% 3.54% 3.63%
Net charge-offs to average loans (2) 1.36% 1.01% 0.83%
Quarter Ended
-------------
Mar. 31, Dec. 31,
2010 2009
---- ----
Allowance For Credit Losses
Allowance for loan losses at beginning of
period $74,732 $70,059
Charge-offs:
Commercial, financial and industrial 1,968 1,536
Real estate, mortgage and construction 20,214 5,448
Consumer 262 477
Total Charge-offs 22,444 7,461
------ -----
Recoveries:
Commercial, financial and industrial 483 536
Real estate, mortgage and construction 821 488
Consumer 118 110
Total Recoveries 1,422 1,134
----- -----
Net charge-offs 21,022 6,327
Provision for loan losses 22,936 11,000
------ ------
Allowance for loan losses at end of period $76,646 $74,732
------- -------
Allowance for unfunded loan commitments at
beginning of period $2,852 $2,852
Provision for losses on unfunded loan
commitments - -
--- ---
Allowance for unfunded loan commitments at
end of period 2,852 2,852
----- -----
Total allowance for credit losses $79,498 $77,584
======= =======
Nonperforming Assets
Nonperforming loans:
Loans held for sale $10,883 $9,896
Loans held for investment 125,025 92,668
Real estate acquired by foreclosure 17,282 16,763
Other repossessed assets 60 38
Total nonperforming assets $153,250 $119,365
======== ========
Restructured loans - accruing $10,675 $69,857
======= =======
Potential problem loans $172,020 $187,513
======== ========
Accruing loans 30 to 89 days past due $46,410 $34,243
======= =======
Accruing loans past due 90 days or more $306 $41
==== ===
Ratios
Period-end allowance for credit losses to
period-end loans 2.55% 2.39%
Period-end allowance for loan losses to
period-end loans 2.46% 2.30%
Period-end allowance for loan losses to
nonperforming loans 56.40% 72.86%
Nonperforming loans to period-end loans 4.36% 3.16%
Nonperforming assets to period-end assets 3.04% 2.42%
Net charge-offs to average loans (2) 2.67% 0.76%
Year Ended
----------
2010 2009
---- ----
Allowance For Credit Losses
Allowance for loan losses at beginning of
period $74,732 $49,177
Charge-offs:
Commercial, financial and industrial 6,534 22,068
Real estate, mortgage and construction 41,849 40,253
Consumer 1,075 1,589
-----
Total Charge-offs 49,458 63,910
------ ------
Recoveries:
Commercial, financial and industrial 1,739 1,713
Real estate, mortgage and construction 2,930 789
Consumer 308 530
---
Total Recoveries 4,977 3,032
----- -----
Net charge-offs 44,481 60,878
Provision for loan losses 46,890 86,433
------ ------
Allowance for loan losses at end of period $77,141 $74,732
------- -------
Allowance for unfunded loan commitments at
beginning of period $2,852 $1,654
Provision for losses on unfunded loan
commitments (1,652) 1,198
------ -----
Allowance for unfunded loan commitments at
end of period 1,200 2,852
----- -----
Total allowance for credit losses $78,341 $77,584
======= =======
Nonperforming Assets
Nonperforming loans:
Loans held for sale $- $9,896
Loans held for investment 133,264 92,668
Real estate acquired by foreclosure 37,064 16,763
Other repossessed assets 3 38
---
Total nonperforming assets $170,331 $119,365
======== ========
Restructured loans - accruing $27,699 $69,857
======= =======
Potential problem loans $166,442 $187,513
======== ========
Accruing loans 30 to 89 days past due $23,680 $34,243
======= =======
Accruing loans past due 90 days or more $507 $41
==== ===
Ratios
Period-end allowance for credit losses to
period-end loans 2.84% 2.39%
Period-end allowance for loan losses to
period-end loans 2.80% 2.30%
Period-end allowance for loan losses to
nonperforming loans 57.89% 72.86%
Nonperforming loans to period-end loans 4.84% 3.16%
Nonperforming assets to period-end assets 3.28% 2.42%
Net charge-offs to average loans (2) 1.48% 1.72%
STERLING BANCSHARES, INC.
FOOTNOTES TO EARNINGS RELEASE
Earnings per share in each quarter is computed individually
(1) 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.
Taxable-equivalent basis assuming a 35% tax rate. The
(3) 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.
The efficiency ratio is calculated by dividing noninterest
(4) 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.
