Sterling Bancshares Takes Actions To Reduce Nonperforming Loans And Increase Allowance For Credit Losses
- Proposed loan sales totaling approximately $51 million (including $42 million in nonperforming loans) - Accounting standard on subsequent events requires losses associated with proposed loan sales to be recorded in the third quarter of 2009 - Management revised certain accounting estimates used in determining the adequacy of the allowance for loan losses to better reflect current conditions - Allowance for credit losses built to 2.18% of total loans in the third quarter of 2009 - Nonperforming loans decreased to 2.83% of total loans in the third quarter of 2009
On November 2, 2009 Sterling Bancshares, Inc. (NASDAQ:SBIB) , in order to sell certain nonperforming loans and further strengthen its allowance for loan losses, determined that it was necessary to record an additional loan loss provision in the amount of $28.6 million for the third quarter of 2009, or $0.23 per diluted share at September 30, 2009. This additional provision resulted in a total provision for credit losses of $56.1 million and $76.6 million for the three and nine months ended September 30, 2009, respectively. The net loss applicable to common shareholders for the third quarter of 2009 was $24.7 million, or $0.30 per diluted common share and $24.1 million, or $0.31 per diluted common share for the nine months ended September 30, 2009.
'We have taken steps to significantly reduce our total nonperforming loans and increase our allowance for loan losses thereby better positioning our balance sheet for future growth and profitability,' said J. Downey Bridgwater, Sterling's Chairman, President, and CEO. 'We were able to take these actions due to our strong capital levels.'
Subsequent to announcing third quarter results on October 22, 2009, management has taken several actions to reduce nonperforming loans and further build the allowance for loan losses recorded as of September 30, 2009. The further build-up in allowance and corresponding increase in provision for loan losses was primarily driven by the following three decisions by management:
-- Execution of a definitive agreement to sell $19 million in net book
value loans related to Semgroup (a previously disclosed nonperforming
energy loan relationship);
-- Execution of a letter of intent to sell approximately $32 million in
net book value commercial real estate loans out of our national
SBA/Commercial Real Estate Portfolio; and
-- Revision of certain accounting estimates used in determining the
adequacy of our allowance for loan losses.
As a result of the above proposed loan sales, management determined that it was appropriate to provide $13.6 million in additional provision in order to record these loans at their underlying and agreed upon sales price. Management charged-off a portion of these loans against the related allowance for credit losses and reclassified these loans as held for sale at September 30, 2009. The amount of nonperforming loans that are part of these proposed loan sales totaled $42 million at September 30, 2009 and assuming both loan sale transactions are consummated, the company's nonperforming loans would be further reduced by approximately $30 million or an additional 90 basis points during the fourth quarter. These loan sales are expected to close in the fourth quarter of 2009.
Management concluded that in light of the two proposed loan sale transactions discussed above, the deterioration in the real estate market, and the continuing uncertainty in the economy, it was appropriate to revise certain accounting estimates used in determining the adequacy of the allowance for loan losses to better reflect current conditions. The application of these accounting estimates resulted in the Company recording an additional $15 million in provision for credit losses in the third quarter of 2009.
Sterling has built its total allowance for credit losses to loans as of September 30, 2009 to $72.9 million or 2.18% of period-end loans, up from $54.2 million or 1.53% of period-end loans linked-quarter.
Sterling's capital position remains strong with a tangible capital ratio of 7.70% at the end of the third quarter. At September 30, 2009, tier 1 capital to risk-weighted assets was 11.20%, and total capital to risk-weighted assets stood at 13.95%, both well above regulatory minimums to be considered well-capitalized.
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 Tuesday, November 3, 2009 at 9:00 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) 332-0342. An audio archive of the call will also be available on the web site beginning Wednesday, November 4, 2009.
A telephone replay of the conference call will be available beginning Tuesday, November 3, 2009 at 10:30 a.m. until Tuesday, November 10, 2009 at 11:59 p.m. Central Time by dialing (800) 475-6701. The access code for the replay is 122236.
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 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission and 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 $4.9 billion, which operates 60 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:
J. Downey Bridgwater, Chairman, President and
Chief Executive Officer, (713) 507-2670
Zach L. Wasson, Executive Vice President and
Chief Financial Officer, (713) 507-1297
-Tables to follow-
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands, except for per share data)
Page 3
Quarter Ended Year-to-date
------------- ------------
Sep. 30, Jun. 30, Sep. 30,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Profitability
Net income (loss) $(24,724) $2,607 $7,090 $(14,710) $29,006
Net income (loss)
applicable to
common shareholders $(24,724) $(4,851) $7,090 $(24,052) $29,006
Earnings (loss)
per common share (1):
Basic $(0.30) $(0.06) $0.10 $(0.31) $0.40
Diluted $(0.30) $(0.06) $0.10 $(0.31) $0.39
Return on average
common equity (2) (16.98)% (3.46)% 5.61% (5.77)% 7.75%
Return on average
assets (2) (1.97)% 0.21% 0.57% (0.39)% 0.81%
Tax equivalent
net interest
margin (3) 4.20% 4.33% 4.44% 4.26% 4.59%
Efficiency Ratio (4):
Consolidated 69.56% 70.54% 64.08% 68.73% 62.57%
Sterling Bank 67.79% 68.37% 62.14% 66.76% 60.59%
Liquidity and
Capital Ratios
Average loans to
average deposits 85.86% 91.81% 101.77% 91.82% 100.19%
Period-end stockholders'
equity to
total assets 11.23% 11.61% 10.14% 11.23% 10.14%
Average stockholders'
equity to
average assets 11.60% 12.14% 10.20% 12.18% 10.44%
Period-end tangible
capital to total
tangible assets 7.70% 8.13% 6.60% 7.70% 6.60%
Tier 1 capital to risk-
weighted assets 11.20% 11.08% 9.18% 11.20% 9.18%
Total capital to risk-
weighted assets 13.95% 13.72% 11.82% 13.95% 11.82%
Tier 1 leverage ratio
(Tier 1 capital
to average assets) 8.88% 9.38% 8.15% 8.88% 8.15%
Other Data
Shares used in computing
earnings per
common share
Basic shares 81,707 77,894 73,186 77,659 73,158
Diluted shares 81,707 77,894 73,525 77,659 73,475
End of period common
shares outstanding 81,755 81,685 73,219 81,755 73,219
Book value per common
share at period-end $6.67 $6.98 $6.85 $6.67 $6.85
Cash dividends paid
per common share $0.055 $0.055 $0.055 $0.165 $0.165
Common stock dividend
payout ratio (18.19)% 154.89% 56.83% (85.45)% 41.65%
Full-time equivalent
employees 1,013 1,038 1,119 1,013 1,119
Number of banking centers 60 61 59 60 59
STERLING BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands)
Page 4
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2009 2009 2009 2008 2008
---- ---- ---- ---- ----
ASSETS
Cash and cash
equivalents $158,114 $74,736 $142,769 $113,163 $113,070
Available-for-sale
securities, at fair
value 836,521 766,536 673,960 633,357 543,545
Held-to-maturity
securities, at
amortized
cost 162,990 163,611 169,973 172,039 174,434
Loans held for
sale 38,187 1,642 1,395 1,524 322
Loans held for
investment 3,312,520 3,537,221 3,727,368 3,792,290 3,744,772
--------- --------- --------- --------- ---------
Total loans 3,350,707 3,538,863 3,728,763 3,793,814 3,745,094
Allowance for
loan losses (70,059) (53,075) (56,703) (49,177) (45,222)
------- ------- ------- ------- -------
Loans, net 3,280,648 3,485,788 3,672,060 3,744,637 3,699,872
Premises and
equipment, net 49,128 50,272 50,738 46,875 41,195
Real estate acquired
by foreclosure 11,674 8,095 8,144 5,625 4,562
Goodwill 173,210 173,210 173,210 173,210 173,210
Core deposits and
other intangibles,
net 12,179 12,744 13,309 13,874 14,444
Accrued interest
receivable 16,142 18,189 18,285 19,428 17,968
Other assets 158,912 159,186 152,383 157,771 164,929
------- ------- ------- ------- -------
TOTAL ASSETS $4,859,518 $4,912,367 $5,074,831 $5,079,979 $4,947,229
========== ========== ========== ========== ==========
LIABILITIES AND
SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-
bearing
demand $1,094,346 $1,127,717 $1,173,745 $1,123,746 $1,085,882
Interest-
bearing
demand 1,874,746 1,670,437 1,586,754 1,523,969 1,397,614
Certificates
and other
time 1,038,362 1,160,081 1,173,958 1,171,422 1,090,624
--------- --------- --------- --------- ---------
Total
deposits 4,007,454 3,958,235 3,934,457 3,819,137 3,574,120
Other borrowed
funds 99,486 176,631 278,274 408,586 668,069
Subordinated debt 77,616 77,028 78,310 78,335 74,266
Junior subordinated
debt 82,734 82,734 82,734 82,734 82,734
Accrued interest
payable and other
liabilities 46,716 47,631 53,942 48,048 46,145
------ ------ ------ ------ ------
Total
liabilities 4,314,006 4,342,259 4,427,717 4,436,840 4,445,334
COMMITMENTS AND
CONTINGENCIES - - - - -
SHAREHOLDERS' EQUITY
Preferred stock - - 118,332 118,012 -
Common stock 83,622 83,552 75,168 75,128 75,086
Capital surplus 171,955 170,708 122,877 121,918 113,611
Retained earnings 295,401 324,619 333,498 332,009 326,826
Treasury stock (21,399) (21,399) (21,399) (21,399) (21,399)
Accumulated other
comprehensive
income,
net of tax 15,933 12,628 18,638 17,471 7,771
------ ------ ------ ------ -----
Total
shareholders'
equity 545,512 570,108 647,114 643,139 501,895
------- ------- ------- ------- -------
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY $4,859,518 $4,912,367 $5,074,831 $5,079,979 $4,947,229
========== ========== ========== ========== ==========
STERLING BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(dollars in thousands, except for per share data)
Page 5
Quarter Ended
-------------
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2009 2009 2009 2008 2008
---- ---- ---- ---- ----
Interest income:
Loans, including
fees $49,658 $51,691 $53,000 $58,387 $59,636
Securities:
Taxable 9,286 8,815 8,558 7,989 7,714
Non-taxable 897 890 900 907 909
Deposits in
financial
institutions 64 - - - 2
Other
interest-
earning
assets 29 26 6 3 53
--- --- --- --- ---
Total
interest
income 59,934 61,422 62,464 67,286 68,314
------ ------ ------ ------ ------
Interest expense:
Demand and
savings
deposits 4,403 3,886 3,492 3,645 4,136
Certificates
and other
time deposits 5,504 6,503 7,467 8,041 8,763
Other
borrowed
funds 346 425 812 2,414 3,432
Subordinated debt 748 885 979 1,380 1,198
Junior
subordinated
debt 1,082 1,155 1,204 1,430 1,317
----- ----- ----- ----- -----
Total
interest
expense 12,083 12,854 13,954 16,910 18,846
------ ------ ------ ------ ------
Net interest
income 47,851 48,568 48,510 50,376 49,468
Provision
for credit
losses 56,131 11,500 9,000 7,500 10,100
------ ------ ----- ----- ------
Net interest income
after provision
for credit losses (8,280) 37,068 39,510 42,876 39,368
------ ------ ------ ------ ------
Noninterest income:
Customer
service
fees 3,845 3,752 4,112 3,865 3,882
Net gain
(loss) on
securities 4 (2) 15 (57) (187)
Wealth management
fees 1,862 1,840 2,202 2,028 2,255
Other 3,402 4,903 4,469 3,805 3,851
----- ----- ----- ----- -----
Total
noninterest
income 9,113 10,493 10,798 9,641 9,801
----- ------ ------ ----- -----
Noninterest expense:
Salaries and
employee
benefits 21,005 24,152 22,277 21,937 21,692
Occupancy 5,967 6,168 5,869 5,790 5,367
Technology 2,495 2,475 2,505 2,559 2,600
Professional fees 1,065 1,157 1,197 1,226 1,257
Postage, delivery
and
supplies 700 760 721 765 871
Marketing 557 499 431 781 627
Core deposits and
other
intangibles
amortization 565 565 565 571 586
Acquisition costs 154 - - - -
FDIC
insurance
assessments 1,741 4,001 1,232 762 561
Other 5,826 4,244 4,801 4,726 5,436
----- ----- ----- ----- -----
Total
noninterest
expense 40,075 44,021 39,598 39,117 38,997
------ ------ ------ ------ ------
Income (loss) before
income taxes (39,242) 3,540 10,710 13,400 10,172
Provision
for income
taxes (14,518) 933 3,303 3,787 3,082
------- --- ----- ----- -----
Net income
(loss) $(24,724) $2,607 $7,407 $9,613 $7,090
======== ====== ====== ====== ======
Preferred
stock
dividends - 7,458 1,884 398 -
--- ----- ----- --- ---
Net income (loss)
applicable to
common
shareholders $(24,724) $(4,851) $5,523 $9,215 $7,090
======== ======= ====== ====== ======
Earnings
(loss) per
common share (1):
Basic $(0.30) $(0.06) $0.08 $0.13 $0.10
====== ====== ===== ===== =====
Diluted $(0.30) $(0.06) $0.08 $0.13 $0.10
====== ====== ===== ===== =====
Year-to-date
------------
2009 2008
---- ----
Interest income:
Loans, including fees $154,349 $182,770
Securities:
Taxable 26,659 21,671
Non-taxable 2,687 2,725
Deposits in financial
institutions 64 10
Other interest-earning assets 61 162
--- ---
Total interest income 183,820 207,338
------- -------
Interest expense:
Demand and savings
deposits 11,781 13,640
Certificates and
other time deposits 19,474 29,402
Other borrowed funds 1,583 9,193
Subordinated debt 2,612 3,094
Junior subordinated debt 3,441 4,301
----- -----
Total interest expense 38,891 59,630
------ ------
Net interest income 144,929 147,708
Provision for credit losses 76,631 22,417
------ ------
Net interest income after
provision for credit losses 68,298 125,291
------ -------
Noninterest income:
Customer service fees 11,709 11,906
Net gain (loss) on securities 17 (187)
Wealth management fees 5,904 6,956
Other 12,774 12,711
------ ------
Total noninterest income 30,404 31,386
------ ------
Noninterest expense:
Salaries and employee benefits 67,434 63,316
Occupancy 18,004 15,992
Technology 7,475 7,235
Professional fees 3,419 3,481
Postage, delivery and
supplies 2,181 2,907
Marketing 1,487 1,764
Core deposits and other
intangibles amortization 1,695 1,757
Acquisition costs 154 562
FDIC insurance assessments 6,974 1,762
Other 14,871 15,317
------ ------
Total noninterest expense 123,694 114,093
------- -------
Income (loss) before income taxes (24,992) 42,584
Provision for income taxes (10,282) 13,578
------- ------
Net income (loss) $(14,710) $29,006
======== =======
Preferred stock dividends 9,342 -
----- ---
Net income (loss) applicable
to common shareholders $(24,052) $29,006
======== =======
Earnings (loss) per common share (1):
Basic $(0.31) $0.40
====== =====
Diluted $(0.31) $0.39
====== =====
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 6
Quarter Ended
-------------
Sep. 30,
2009
----
Average Balance Interest Yield/Rate
--------------- -------- ----------
Interest-Earning Assets:
Loans held for sale $1,607 $23 5.68%
Loans held for investment:
Taxable 3,467,555 49,586 5.67%
Non-taxable (3) 5,080 72 5.60%
Securities:
Taxable 844,651 9,286 4.36%
Non-taxable (3) 97,858 1,307 5.30%
Deposits in financial institutions 106,392 64 0.24%
Other interest-earning assets 38,419 29 0.30%
------ --- ----
Total interest-earning assets 4,561,562 60,367 5.25%
Noninterest-earning assets 416,340
-------
Total Assets $4,977,902
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,837,612 $4,403 0.95%
Certificates and other time 1,084,513 5,504 2.01%
Other borrowed funds 145,625 346 0.94%
Subordinated debt 77,232 748 3.84%
Junior subordinated debt 82,734 1,082 5.19%
------ ----- ----
Total interest-bearing
liabilities 3,227,716 12,083 1.49%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,172,556
Shareholders' equity 577,630
-------
Total Liabilities and Shareholders'
Equity $4,977,902
========== ------ ----
Tax Equivalent Net Interest Income
and Margin (3) 48,284 4.20%
====
Tax Equivalent Adjustment:
Loans 23
Securities 410
---
Total tax equivalent adjustment 433
---
Net Interest Income $47,851
=======
Quarter Ended
-------------
Jun. 30,
2009
----
Average Balance Interest Yield/Rate
--------------- -------- ----------
Interest-Earning Assets:
Loans held for sale $2,714 $40 5.84%
Loans held for investment:
Taxable 3,634,159 51,598 5.69%
Non-taxable (3) 5,294 77 5.87%
Securities:
Taxable 761,249 8,815 4.64%
Non-taxable (3) 96,447 1,292 5.37%
Deposits in financial institutions 281 - 0.00%
Other interest-earning assets 39,534 26 0.26%
------ --- ----
Total interest-earning assets 4,539,678 61,848 5.46%
Noninterest-earning assets 451,642
-------
Total Assets $4,991,320
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,674,468 $3,886 0.93%
Certificates and other time 1,175,434 6,503 2.22%
Other borrowed funds 216,342 425 0.79%
Subordinated debt 77,701 885 4.57%
Junior subordinated debt 82,734 1,155 5.60%
------ ----- ----
Total interest-bearing
liabilities 3,226,679 12,854 1.60%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,158,883
Shareholders' equity 605,758
-------
Total Liabilities and Shareholders'
Equity $4,991,320
========== ------ ----
Tax Equivalent Net Interest Income
and Margin (3) 48,994 4.33%
====
Tax Equivalent Adjustment:
Loans 24
Securities 402
---
Total tax equivalent adjustment 426
---
Net Interest Income $48,568
=======
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 7
Year-to-date
------------
2009
----
Average Balance Interest Yield/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
and Margin (3) 146,219 4.26%
====
Tax Equivalent Adjustment:
Loans 75
Securities 1,215
-----
Total tax equivalent adjustment 1,290
-----
Net Interest Income $144,929
========
Year-to-date
------------
2008
----
Average Balance Interest Yield/Rate
--------------- -------- ----------
Interest-Earning Assets:
Loans held for sale $94,677 $4,681 6.60%
Loans held for investment:
Taxable 3,514,320 177,950 6.76%
Non-taxable (3) 3,260 202 8.27%
Securities:
Taxable 610,877 21,671 4.74%
Non-taxable (3) 97,278 3,820 5.25%
Deposits in financial institutions 590 10 2.26%
Other interest-earning assets 10,168 162 2.13%
------ --- ----
Total interest-earning assets 4,331,170 208,496 6.43%
Noninterest-earning assets 460,904
-------
Total Assets $4,792,074
==========
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,419,654 $13,640 1.28%
Certificates and other time 1,109,199 29,402 3.54%
Other borrowed funds 500,268 9,193 2.45%
Subordinated debt 57,687 3,094 7.16%
Junior subordinated debt 82,734 4,301 6.94%
------ ----- ----
Total interest-bearing
liabilities 3,169,542 59,630 2.51%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,122,443
Shareholders' equity 500,089
-------
Total Liabilities and Shareholders'
Equity $4,792,074
========== ------- ----
Tax Equivalent Net Interest Income
and Margin (3) 148,866 4.59%
====
Tax Equivalent Adjustment:
Loans 63
Securities 1,095
-----
Total tax equivalent adjustment 1,158
-----
Net Interest Income $147,708
========
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 8
Quarter Ended
-------------
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2009 2009 2009 2008 2008
---- ---- ---- ---- ----
Condensed Average
Balance Sheet
Loans held for sale $1,607 $2,714 $1,876 $684 $110,721
Loans held for
investment 3,472,635 3,639,453 3,780,147 3,795,340 3,602,853
--------- --------- --------- --------- ---------
Total loans 3,474,242 3,642,167 3,782,023 3,796,024 3,713,574
Available-for-sale
securities, at
fair value 779,792 689,541 635,423 573,073 564,779
Held-to-maturity
securities, at
amortized cost 162,717 168,155 171,245 173,584 174,980
Deposits in
financial
institutions 106,392 281 257 273 326
Other interest-
earning assets 38,419 39,534 9,740 4,093 11,122
------ ------ ----- ----- ------
Total interest-
earning
assets 4,561,562 4,539,678 4,598,688 4,547,047 4,464,781
Goodwill 173,210 173,210 173,210 173,210 173,106
Core deposits and other
intangibles, net 12,463 13,028 13,587 14,158 14,740
All other noninterest
-earning
assets 230,667 265,404 286,454 301,516 281,156
------- ------- ------- ------- -------
Total assets $4,977,902 $4,991,320 $5,071,939 $5,035,931 $4,933,783
========== ========== ========== ========== ==========
Noninterest-
bearing demand
deposits $1,124,076 $1,117,335 $1,130,230 $1,116,607 $1,093,053
Interest bearing
deposits:
Interest-
bearing demand
deposits 1,837,612 1,674,468 1,565,770 1,407,482 1,410,719
Jumbo certificates
of deposit 614,418 658,983 651,798 634,499 677,251
Regular certificates
of deposit 287,243 308,842 306,686 306,224 316,567
Brokered
certificates
of deposit 182,852 207,609 195,936 162,654 151,378
------- ------- ------- ------- -------
Total
deposits 4,046,201 3,967,237 3,850,420 3,627,466 3,648,968
Other borrowed funds 145,625 216,342 365,408 667,933 581,212
Subordinated debt 77,232 77,701 77,820 75,354 74,098
Junior subordinated
debt 82,734 82,734 82,734 82,734 82,734
Accrued interest
payable and other
liabilities 48,480 41,548 45,698 44,340 43,608
------ ------ ------ ------ ------
Total
liabilities 4,400,272 4,385,562 4,422,080 4,497,827 4,430,620
Common equity 577,630 561,540 531,736 510,965 503,163
Preferred equity - 44,218 118,123 27,139 -
--- ------ ------- ------ ---
Total shareholders'
equity 577,630 605,758 649,859 538,104 503,163
------- ------- ------- ------- -------
Total liabilities
and shareholders'
equity $4,977,902 $4,991,320 $5,071,939 $5,035,931 $4,933,783
========== ========== ========== ========== ==========
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2009 2009 2009 2008 2008
---- ---- ---- ---- ----
Period-end Loans:
Loans held for sale $38,187 $1,642 $1,395 $1,524 $322
Loans held for
investment:
Commercial and
industrial 823,797 930,445 1,060,572 1,107,519 1,094,767
Real Estate:
Commercial 1,703,629 1,768,824 1,788,488 1,765,843 1,564,989
Construction
and
development 394,819 458,386 499,262 545,303 732,174
Residential
mortgage 335,007 323,520 320,021 309,665 284,036
Consumer/other 55,268 56,046 59,025 63,960 68,806
------ ------ ------ ------ ------
Loans held for
investment 3,312,520 3,537,221 3,727,368 3,792,290 3,744,772
--------- --------- --------- --------- ---------
Total period-end
loans $3,350,707 $3,538,863 $3,728,763 $3,793,814 $3,745,094
========== ========== ========== ========== ==========
Period-End Deposits:
Noninterest-
bearing demand $1,094,346 $1,127,717 $1,173,745 $1,123,746 $1,085,882
Interest-bearing
demand 1,874,746 1,670,437 1,586,754 1,523,969 1,397,614
Certificates and
other time deposits:
Jumbo 594,590 644,965 666,722 660,427 636,447
Regular 273,721 306,988 301,047 317,719 304,050
Brokered 170,051 208,128 206,189 193,276 150,127
------- ------- ------- ------- -------
Total period-end
deposits $4,007,454 $3,958,235 $3,934,457 $3,819,137 $3,574,120
========== ========== ========== ========== ==========
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 9
Quarter Ended
-------------
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2009 2009 2009 2008 2008
---- ---- ---- ---- ----
Allowance For Credit
Losses
Allowance for loan
losses at beginning
of period $53,075 $56,703 $49,177 $45,222 $41,651
Charge-offs:
Commercial,
financial and
industrial 3,895 13,523 1,960 1,764 3,713
Real estate,
mortgage and
construction 33,621 1,903 438 1,629 1,879
Consumer 318 331 460 648 657
--- --- --- --- ---
Total
charge-offs 37,834 15,757 2,858 4,041 6,249
------ ------ ----- ----- -----
Recoveries:
Commercial,
financial and
industrial 251 286 640 286 277
Real estate,
mortgage and
construction 23 180 98 5 28
Consumer 163 163 94 205 142
--- --- --- --- ---
Total
recoveries 437 629 832 496 447
--- --- --- --- ---
Net charge-offs 37,397 15,128 2,026 3,545 5,802
Provision for loan
losses 54,381 11,500 9,552 7,500 9,373
------ ------ ----- ----- -----
Allowance for loan
losses at end of
period $70,059 $53,075 $56,703 $49,177 $45,222
------- ------- ------- ------- -------
Allowance for unfunded
loan commitments at
beginning of period 1,102 1,102 1,654 1,654 927
Provision for losses
on unfunded loan
commitments 1,750 - (552) - 727
----- --- ---- --- ---
Allowance for
unfunded loan
commitments at end
of period 2,852 1,102 1,102 1,654 1,654
----- ----- ----- ----- -----
Total allowance
for credit
losses $72,911 $54,177 $57,805 $50,831 $46,876
======= ======= ======= ======= =======
Nonperforming
Assets
Nonaccrual loans:
Loans held for sale $29,472 $- $- $- $-
Loans held for
investment 65,515 114,069 102,450 87,491 70,538
Real estate
acquired by
foreclosure 11,674 8,095 8,144 5,625 4,562
Other repossessed
assets 33 419 144 154 234
--- --- --- --- ---
Total nonperforming
assets $106,694 $122,583 $110,738 $93,270 $75,334
======== ======== ======== ======= =======
Restructured
loans - accruing $27,110 $2,828 $- $- $-
======= ====== === === ===
Accruing loans 30
to 89 days past
due $23,364 $30,131 $26,640 $30,492 $31,749
======= ======= ======= ======= =======
Accruing loans
past due 90 days
or more $681 $2,112 $7,464 $8,448 $3,142
==== ====== ====== ====== ======
Ratios
Period-end allowance
for credit losses to
period-end
loans 2.18% 1.53% 1.55% 1.34% 1.25%
Period-end allowance
for loan losses to
period-end
loans 2.09% 1.50% 1.52% 1.30% 1.21%
Period-end allowance
for loan losses to
nonperforming loans 73.76% 46.53% 55.35% 56.21% 64.11%
Nonperforming
loans to period-
end loans 2.83% 3.22% 2.75% 2.31% 1.88%
Nonperforming
assets to period-
end assets 2.20% 2.50% 2.18% 1.84% 1.52%
Net charge-offs
to average
loans (2) 4.27% 1.67% 0.22% 0.37% 0.62%
Year-to-date
------------
2009 2008
---- ----
Allowance For Credit Losses
Allowance for loan losses at beginning of
period $49,177 $34,446
Charge-offs:
Commercial, financial and industrial 19,378 7,644
Real estate, mortgage and construction 35,962 3,612
Consumer 1,109 1,311
----- -----
Total charge-offs 56,449 12,567
------ ------
Recoveries:
Commercial, financial and industrial 1,177 1,106
Real estate, mortgage and construction 301 112
Consumer 420 435
--- ---
Total recoveries 1,898 1,653
----- -----
Net charge-offs 54,551 10,914
Provision for loan losses 75,433 21,690
------ ------
Allowance for loan losses at end of period $70,059 $45,222
------- -------
Allowance for unfunded loan commitments at
beginning of period 1,654 927
Provision for losses on unfunded loan
commitments 1,198 727
----- ---
Allowance for unfunded loan commitments at
end of period 2,852 1,654
----- -----
Total allowance for credit losses $72,911 $46,876
======= =======
Nonperforming Assets
Nonaccrual loans:
Loans held for sale $29,472 $-
Loans held for investment 65,515 70,538
Real estate acquired by foreclosure 11,674 4,562
Other repossessed assets 33 234
--- ---
Total nonperforming assets $106,694 $75,334
======== =======
Restructured loans - accruing $27,110 $-
======= ===
Accruing loans 30 to 89 days past due $23,364 $31,749
======= =======
Accruing loans past due 90 days or more $681 $3,142
==== ======
Ratios
Period-end allowance for credit losses to
period-end loans 2.18% 1.25%
Period-end allowance for loan losses to
period-end loans 2.09% 1.21%
Period-end allowance for loan losses to
nonperforming loans 73.76% 64.11%
Nonperforming loans to period-end loans 2.83% 1.88%
Nonperforming assets to period-end assets 2.20% 1.52%
Net charge-offs to average loans (2) 2.01% 0.40%
STERLING BANCSHARES, INC.
FOOTNOTES TO EARNINGS RELEASE
Page 10
(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.
(4) The efficiency ratio is calculated by dividing noninterest expense
less acquisition costs, hurricane related costs and a one-time severance
charge by tax equivalent basis net interest income plus noninterest income
less net gain (loss) on investment securities. |
