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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993 Commission File No. 1-5273-1
________________
STERLING BANCORP
(Exact Name of Registrant as specified in charter)
NEW YORK 13-2565216
(State or other jurisdiction of (I.R.S. employer identification No.)
incorporation or organization)
540 MADISON AVENUE, NEW YORK, N.Y. 10022-3299
(Address of principal executive offices) (Zip Code)
(212) 826-8000
(Registrant's telephone number, including area code)
________________
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
Common Shares, $1 par value New York Stock Exchange
Floating Interest Rate Convertible Subordinated
Debentures, Third Series, due July 1, 1996 New York Stock Exchange
Floating Interest Rate Convertible Subordinated
Debentures, 4th Series, due November 1, 1998 New York Stock Exchange
________________
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.( )
On February 28, 1994 the aggregate market value of the voting stock
held by non-affiliates of the Registrant was $45,210,965.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date:
THE REGISTRANT HAS ONE CLASS OF COMMON STOCK OF WHICH 6,346,212 SHARES
WERE OUTSTANDING AT MARCH 4, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Specified portions of the Sterling Bancorp 1993 Annual Report are
incorporated by reference in Parts I and II.
(2) Specified portions of the Sterling Bancorp definitive Proxy Statement
dated March 18, 1994 are incorporated by reference in Part III.
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STERLING BANCORP
FORM 10-K
TABLE OF CONTENTS
PAGE
------
PART I
Item 1. Business........................................... I-1
Item 2. Properties......................................... I-12
Item 3. Legal Proceedings.................................. I-12
Item 4. Submission of Matters to a Vote of Security
Holders.......................................... I-12
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters.................. II-1
Item 6. Selected Financial Data........................... II-1
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......... II-1
Item 8. Financial Statements and Supplementary Data....... II-1
Item 9. Disagreements on Accounting and Financial
Disclosure................................... II-1
PART III
Item 10. Directors and Executive Officers of the
Registrant.................................. III-1
Item 11. Executive Compensation........................... III-1
Item 12. Security Ownership of Certain Beneficial
Owners and Management....................... III-1
Item 13. Certain Relationships and Related Transactions... III-1
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K..................... IV-1
Signatures
Exhibits Submitted in a Separate Volume.
3
ITEM 1. BUSINESS
GENERAL
Sterling Bancorp (the Registrant), organized in 1966, is a bank holding
company, as defined by the Bank Holding Company Act of 1956 (the BHCA), as
amended, with subsidiaries engaged principally in commercial banking as well as
accounts receivable financing, factoring and other financial services. The
Registrant owns virtually 100% of Sterling National Bank & Trust Company of New
York (the bank), its principal subsidiary, and all of the outstanding shares of
Standard Factors Corporation, Universal Finance Corporation, Sterling Banking
Corporation and virtually 100% of Security Industrial Loan Association (finance
subsidiaries). Zenith Financial Services Company operates as a division of the
Registrant. As used throughout this report, "the Company" refers to Sterling
Bancorp and its subsidiaries.
There is intense competition in all areas in which the Company conducts its
business, including deposits, loans, domestic and international financing and
trust services. In addition to competing with other banks, the Company also
competes in certain areas of its business with other financial institutions.
The following table presents the components of the loan portfolio for both the
Company and the bank as of December 31, 1993 and December 31, 1992. Reference
is made to the information beginning on page 33 of the Company's 1993 Annual
Report (pages 9 to 39 of which are incorporated herein by reference) under the
caption "CREDIT RISK".
December 31, 1993 December 31, 1992
-------------------------- --------------------------
The Company The bank The Company The bank
----------- -------- ----------- --------
(in thousands)
Domestic
Term Federal funds sold $ 40,000 $ 40,000 $ 99,000 $ 99,000
Commercial and industrial 218,559 198,120 150,681 135,326
Real estate - mortgage 34,808 34,808 36,349 36,349
Real estate - construction 1,665 1,665 1,606 1,606
Installment - individuals 8,403 8,403 6,258 6,258
Other -- -- 982 982
Foreign
Governments and official
institutions 789 789 789 789
-------- -------- -------- --------
Loans, gross 304,224 283,785 295,665 280,310
Less: Unearned discount 5,473 5,247 6,874 6,833
-------- -------- -------- --------
Loans, net of unearned
discount $298,751 $278,538 $288,791 $273,477
======== ======== ======== ========
The BHCA requires the prior approval of the Federal Reserve Board for the
acquisition by a bank holding company of more than 5% of the voting stock or
substantially all of the assets of any bank or bank holding company. Also,
under the BHCA, bank holding companies are prohibited, with certain exceptions,
from engaging in, or from acquiring more than 5% of the voting stock of any
company engaging in, activities other than banking or managing or controlling
banks or furnishing services to or performing services for their subsidiaries.
The BHCA also authorized the Federal Reserve Board to permit bank holding
companies to
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engage in, and to acquire or retain shares of companies that engage in,
activities which the Federal Reserve Board determines to be so closely related
to banking or managing or controlling banks as to be a proper incident thereto.
The Federal Reserve Board has ruled on a number of activities and found some of
them to come within such standard while finding that other activities do not
fall within the permissible scope of such standard; other activities
have been proposed by the Federal Reserve Board for consideration. The effect
of the Federal Reserve Board's findings under the standard has been to expand
the financially related activities in which bank holding companies may engage.
Revisions of the Federal Reserve Board's principal regulation (Regulation Y)
affecting bank holding companies have expanded the scope of permissible
bank-related activities and liberalized procedures to allow the entry into such
activities. In addition, the BHCA prohibits bank holding companies from
acquiring direct or indirect control of more than a 5% interest in a bank or
bank holding company located in a state other than New York unless the laws of
such state expressly authorize such acquisition.
There are also various requirements and restrictions imposed by the laws of the
United States and the State of New York and by regulations of the Federal
Reserve System, of which the bank is a member, affecting the operations of the
Company including the requirement to maintain reserves against deposits,
restrictions relating to: (a) the nature and amount of loans that may be made
by the bank and the interest that may be charged thereon; (b) extensions of
credit by subsidiary banks of a bank holding company to the bank holding
company or certain of its subsidiaries; (c) on investments in the stock or
other securities thereof, and on the taking of such stock or securities as
collateral for loans to any borrower; and (d) other investments, branching and
other activities of the Company and the bank. Regulatory limitations on the
payment of dividends to the Registrant by the bank are discussed in the
"FINANCIAL CONDITION" section beginning on page 32 of the Company's 1993 Annual
Report. The Registrant and its finance subsidiaries are subject to supervision
and regulation by the Federal Reserve Board (FRB); Security Industrial Loan
Association is subject to supervision and regulation by the Bureau of Financial
Institutions of the State Corporation Commission of the Commonwealth of
Virginia; Sterling Banking Corporation is subject to supervision and regulation
by the Banking Department of the State of New York; the bank is subject to
supervision and regulation by the Office of the Comptroller of the Currency
(the Comptroller) and, by reason of the insurance of its deposits to the extent
permitted by law, to the regulations of the Federal Deposit Insurance
Corporation (FDIC).
The Company and the bank are subject to risk-based capital and leverage
guidelines which are discussed in the "FINANCIAL CONDITION" section beginning
on
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page 32 of the Company's 1993 Annual Report. Failure to meet applicable capital
guidelines could subject a national bank to a variety of enforcement remedies
available to the federal regulatory authorities. Depending upon circumstance,
the regulatory agencies may require an institution to surpass minimum capital
ratios established by the Comptroller and the FRB.
The enactment of the Federal Deposit Insurance Corporation Improvement Act of
1991 (FDICIA) was intended, among other things, to protect the federal deposit
insurance fund by requiring regulators to take specific prompt actions with
respect to institutions that do not meet minimum capital standards. FDICIA
established five capital tiers to be defined in implementing regulations to be
adopted: "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized," and "critically undercapitalized."
Significant restrictions are imposed on the operations of a bank that is below
the "adequately capitalized" category. The federal regulatory agencies adopted
regulations defining the five capital tiers. Under these regulations, a "well
capitalized" institution must have a Tier 1 capital ratio of at least 6%, a
Total (combined Tier 1 and Tier 2) capital ratio of at least 10%, and a
Leverage ratio of at least 5% and not be subject to a directive, order or
written agreement to meet and maintain specific capital levels; the regulatory
agencies may also impose more stringent requirements on an institution designed
to achieve a given capital status. At December 31, 1993, the bank's Tier 1
capital ratio, Total capital ratio and Leverage ratio were 14.95%, 15.94% and
7.57%, respectively, exceeding the capital and leverage ratio requirements for
"well capitalized" institutions.
FDICIA new regulations became effective June 16, 1992 governing the receipt of
brokered deposits. Under these regulations, an insured depository institution
cannot accept brokered deposits (which term is defined to include payment of an
interest rate more than 75 basis points above prevailing rates) unless (i) it
is "well capitalized," or (ii) it is "adequately capitalized" and receives a
waiver from the FDIC. A bank that cannot receive brokered deposits and that is
not "adequately capitalized" cannot offer "pass-through" insurance on certain
employee benefit accounts. In addition, a bank that is "adequately
capitalized" may not pay an interest rate on any deposits in excess of 75 basis
points over certain prevailing market rates. There are no such restrictions on
a bank that is "well capitalized." Since the bank meets the requirements for
classification as "well capitalized", the Company does not anticipate that
these regulations will have a material effect on its operations.
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Other FDICIA revisions included the imposition of specific accounting and
reporting requirements and risk-based assessments for FDIC insurance.
Effective January 1, 1993, the FDIC adopted a risk-based assessment system
under which the assessment rate for an insured depository institution varies
according to the level of risk incurred in its activities. Other rules adopted
pursuant to FDICIA include: (1) real estate lending standards for depository
institutions, which provide guidelines concerning loan-to-value ratios for
various types of real estate loans; (2) rules requiring depository institutions
to develop and implement internal procedures to evaluate and control credit and
settlement exposure to their correspondent banks; (3) rules implementing the
FDICIA provisions prohibiting, with certain exceptions, insured state banks
from making equity investments or engaging in activities of the types and
amounts not permissible for national banks; and (4) rules and guidelines for
enhanced financial reporting and audit requirements.
Further rules proposed or to be proposed under FDICIA, governing such matters
as operational and managerial standards and capital requirements, are expected
to be finalized and become effective in 1994. Until the various regulations
are adopted in final form, however, it is difficult to assess how they will
impact the Company's financial condition or operations.
The Federal Reserve Board has issued regulations under the BHCA that require a
bank holding company to serve as a source of financial and managerial strength
to its subsidiary banks. As a result, the Federal Reserve Board, pursuant to
such regulations, may require the Registrant to stand ready to use its
resources to provide adequate capital funds to its banking subsidiaries during
periods of financial stress or adversity. This support may be required at
times when, absent such regulations, the bank holding company might not
otherwise provide such support.
The earnings of the Registrant and its finance subsidiaries and the bank are
affected by legislative changes and by regulations and policies of various
governmental authorities, including the Federal Reserve System, the
Comptroller, and the states in which the Registrant's subsidiaries operate.
Such changes and policies significantly affect the growth of deposits as well
as the cost of purchased funds and the return on earning assets.
Changing conditions in the national economy and in the money markets make it
impossible to predict future changes in interest rates, deposit levels, loan
demand or their effects on the business and earnings of the Registrant and its
subsidiaries. Foreign activities of the Company are not considered to be
material.
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THE BANK
Sterling National Bank & Trust Company of New York was organized in 1929 under
the National Bank Act and commenced operations in New York City. The bank
maintains five branch offices in New York City (three branches in Manhattan and
two branches in Queens) and an International Banking Facility in New York City.
The main office is located at 540 Madison Avenue, New York, New York. There
are regional representatives located in Los Angeles, California and Richmond,
Virginia.
The bank provides a range of banking services to businesses and individuals
including checking, savings and money market accounts, certificates of deposit,
business loans, personal and installment loans, VISA/MASTERCARD, safe deposit
and night depository facilities. Lending, depository and related financial
services are furnished to a wide range of customers in diverse industries,
including commercial, industrial and financial companies of all sizes as well
as government and non-profit agencies. Loan facilities available to these
customers include short-term revolving credit arrangements, term loans, letters
of credit, factoring, accounts receivable financing, equipment financing, real
estate and mortgage loans, leasing and lock box services. Through its
international division and International Banking Facility, the bank offers
financial services to its customers and correspondents in the world's major
financial centers. These services consist of financing import and export
transactions, issuance of letters of credit and creation of bankers
acceptances. In addition to its direct worldwide correspondent banking
relationships, active bank account relationships are maintained with leading
foreign banking institutions in major financial centers. The bank's trust
division provides a variety of fiduciary, investment management, advisory and
corporate agency services to individuals, corporations and foundations. The
bank acts as trustee for pension, profit-sharing and other employee benefit
plans and personal trusts and estates. For corporations, the bank acts as
trustee, transfer agent, registrar and in other corporate agency capacities.
Most of the bank's business loans are short-term; approximately 83% of the
loans are to customers located in the New York metropolitan area. No single
borrower or group of related borrowers have loans which represent more than 15%
of the bank's shareholders' equity. The bank's legal lending limit to a single
borrower was approximately $7.5 million at December 31, 1993.
The composition of income of the bank for the years ended: (1) December 31,
1993 included interest on term Federal funds sold (2%), interest and fees on
commercial and other loans (44%), interest and dividends on investments
securities (43%) and other (11%); (2) December 31, 1992 included interest on
term Federal funds sold (6%), interest and fees on commercial and other loans
(37%), interest and dividends on investment securities (42%), and other (15%);
(3) December 31, 1991 included interest on term Federal funds sold (16%),
interest and fees on commercial and other loans (40%), interest and dividends
on investment securities (35%), and other (9%).
At December 31, 1993, the bank had 191 employees, consisting of 68 officers and
123 supervisory and clerical employees. The bank considers its relations with
its employees to be satisfactory.
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REGISTRANT AND FINANCE SUBSIDIARIES
The Registrant and its finance subsidiaries engage in various types of secured
and unsecured financing activities such as accounts receivable financing,
factoring and commercial, consumer and installment mortgage loans and service
such accounts for the bank. The Registrant also engages in consumer
receivables financing.
Accounts receivable financing services rendered by the Registrant and its
finance subsidiaries include new business referral, collection, supervisory,
examination and bookkeeping to the bank for a fee; and the bank assumes all
credit risks.
Standard Factors Corporation provides factoring services. Standard Factors
Corporation purchases client's accounts receivable, assumes credit risk on
approved orders and handles credit and collection details and bookkeeping
requirements. Income for these services is derived from commissions charged
for receivables serviced and interest charged on advances to the client. In
addition, Standard Factors Corporation services the bank's portfolio without
assuming the credit risk for those factored receivables managed for the bank.
For these services, Standard Factors Corporation receives a portion of
factoring commissions paid by the clients plus a portion of interest charged on
advances. The accounts receivable factored are for clients primarily engaged
in the apparel and textile industries.
The Registrant and its finance subsidiaries make business and consumer loans.
The loans are usually secured by real estate, personal property, accounts
receivable or other collateral; occasionally unsecured working capital advances
are provided to its customers.
Security Industrial Loan Association (S.I.L.A.), located in Richmond, Virginia,
jointly originates and services mortgage loans to homeowners funded by the
bank. S.I.L.A. receives a service fee. The loans are repayable in equal
monthly installments over periods ranging from 36 to 180 months. Loans are
usually made to allow the borrower to make home repairs, consolidate debt or to
meet educational, medical or other expenses. The loans are secured by first or
second mortgages. The amounts loaned are less than the borrower's equity in
the home, as determined by appraisals.
On June 1, 1993, the Registrant acquired the assets of Zenith Financial
Corporation, a nationwide provider of consumer receivables financing. As a
division of the Registrant Zenith engages in asset based lending with
independent dealers who market products (i.e., housewares, appliances,
automobiles, educational material, et al) to consumers on an installment basis
with repayment terms between 12 and 36 months. Zenith administers these
installment contracts for the dealer, providing billing, payment processing and
other bookkeeping services. Zenith makes advances to each dealer of between
30% and 80% of the discounted aggregate value of the dealer's installment
contracts.
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The composition of income (excluding equity in undistributed net income of the
banking subsidiary) of the Registrant and its finance subsidiaries for the
years ended: (1) December 31, 1993 included interest and fees on loans (32%),
interest and fees on accounts receivable factored (14%), dividends, interest
and service fees (50%) and other (4%); (2) December 31, 1992 included interest
and fees on loans (11%) interest and fees on accounts receivable factored
(26%), dividends, interest and service fees (49%), and other (14%); (3)
December 31, 1991 included interest and fees on accounts receivable factored
(32%), dividends, interest and service fees (61%), and other (7%).
At December 31, 1993, the Registrant and its finance subsidiaries employed 28
persons consisting of 9 officers with the balance of the employees performing
supervisory and clerical functions. Of these persons, 6 are represented by
District 65 Wholesale, Retail, Office and Processing Union. The Registrant and
its finance subsidiaries consider employee relations to be satisfactory.
SELECTED CONSOLIDATED STATISTICAL INFORMATION
I. Distribution of Assets, Liabilities and Shareholders' Equity; Interest
Rates and Interest Differential.
The information appearing on pages 36, 37 and 39 of the Company's 1993 Annual
Report is incorporated herein by reference.
II. Investment Portfolio
Shown below is a summary of the Company's investment securities by type with
related book values:
December 31,
----------------------------------
1993 1992 1991
------- ------- -------
(in thousands)
U.S.Treasury securities and obligations of
U.S. government corporations and agencies... $263,367 $182,360 $166,745
Obligations of states and political sub-
divisions................................... 30 178 177
Debt securities issued by foreign governments. 4,500 4,500 3,500
Corporate debt securities..................... 2,005 10,655 15,219
Other debt securities......................... 10,104 18,567 33,533
Federal Reserve Bank and other stock invest-
ments....................................... 6,810 3,311 1,455
-------- -------- --------
Total................................... $286,816 $219,571 $220,629
======== ======== ========
Information regarding book values and range of maturities by type of security
and weighted average yields for totals of each category is presented in the
Company's 1993 Annual Report on pages 15, 16 and 17 and is incorporated herein
by reference. The average yield by maturity range is not available.
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III. Loan Portfolio
The following table sets forth the composition of the Company's loan portfolio
net of unearned discounts at the end of each of the most recent five fiscal
years:
December 31,
-------------------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
(in thousands)
Domestic
Term Federal funds
sold............... $ 40,000 $ 99,000 $ 75,000 $200,000 $150,000
Commercial and
industrial......... 218,559 150,681 115,782 130,488 122,764
Real estate -
mortgage........... 34,808 36,349 36,050 42,981 40,975
Real estate -
construction 1,665 1,606 1,833 -- --
Installment -
individuals........ 8,403 6,258 6,051 4,342 7,719
Other................ -- 982 639 1,389 13,005
Foreign
Government and
official insti-
tutions........... 789 789 789 789 1,209
-------- -------- -------- -------- --------
Loans, gross..... 304,224 295,665 236,144 379,989 335,672
Less: unearned discount 5,473 6,874 8,546 11,426 11,361
-------- -------- -------- -------- --------
Loans, net of
unearned
discount..... $298,751 $288,791 $227,598 $368,563 $324,311
======== ======== ======== ======== ========
The following table sets forth the maturities and sensitivity to changes in
interest rates of selected loans of the Company's loan portfolio at December
31, 1993:
Due One Due One Due Over
Year to Five Five
or Less Years Years Total
-------- -------- -------- --------
(in thousands)
Term Federal funds sold......... $ 40,000 $ -- $ -- $ 40,000
Commercial, industrial and
other........................ 197,050 18,998 2,511 218,559
Real estate - mortgage.......... 4,035 15,377 15,396 34,808
Real estate - construction 1,665 -- -- 1,665
Foreign......................... 789 -- -- 789
-------- -------- -------- --------
Total................... $243,539 $ 34,375 $ 17,907 $295,821
======== ======== ======== ========
Loans due after one year,
which have:
Predetermined interest
rates..................... $ 13,988 $ 15,581 $ 29,569
Floating or adjustable
interest rates........... 20,387 2,326 22,713
-------- -------- --------
Total................... $ 34,375 $ 17,907 $ 52,282
======== ======== ========
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It is the policy of the Company to consider all customer requests for
extensions of original maturity dates (rollovers), whether in whole or in
part, as though each was an application for a new loan subject to standard
approval criteria, including credit evaluation. The information appearing in
the Company's 1993 Annual Report beginning on page 33 under the caption "CREDIT
RISK", on page 18 in footnote 5 and on page 14 in footnote 1 under the caption
"Loans" is incorporated herein by reference.
The following table sets forth the aggregate amount of domestic non-accrual,
past due and restructured loans of the Company at the end of each of the most
recent five fiscal years; as of December 31, 1993, there were no foreign
loans accounted for on a nonaccrual basis or which were troubled debt
restructurings:
December 31,
-------------------------------------------------------
1993 1992 1991 1990 1989
------ ------ ------ ------ -----
(in thousands)
Non-accrual basis loans* $2,297(1) $3,309(1) $4,499(1) $ 533 $ 587
Past due 90 days or more
(other than the above)(2). 146 619 3,873 254 287
------ ------ ------ ------ ------
Total........................... $2,443 $3,928 $8,372 $ 787 $ 874
====== ====== ====== ====== ======
Note: Includes restructured
debt of......................... $ -- $ -- $ -- $ 160 $ 160
====== ====== ====== ====== ======
*Interest income that would
have been earned on non-
accrual and reduced rate
loans outstanding...................... $ 169 $ 313 $ 378 $ 73 $ 112
====== ====== ====== ====== ======
Applicable interest income
actually realized...................... $ 98 $ 72 $ 16 $ -- $ 3
====== ====== ====== ====== ======
Non-accrual, past due and
restructured loans as a
percentage of total gross
loans.................................. .8% 1.33% 3.55% .2% .3%
====== ====== ====== ====== ======
(1) Includes $1.4, $1.9 and $2.5 million at December 31, 1993, 1992
and 1991, respectively, representing the balance of a loan to a
single borrower who filed for reorganization under Chapter 11 of
the U.S. Bankruptcy Code during the third quarter of 1991.
(2) Loans which are contractually past due 90 days or more and
accruing are loans which are both well secured or guaranteed by
financially responsible third parties and are in the process of
collection.
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IV. Summary of Loan Loss Experience
The information appearing in the Company's 1993 Annual Report on page 18 in
footnote 5 is incorporated herein by reference. The following table sets
forth certain information with respect to the Company's loan loss experience
for each of the most recent five fiscal years:
December 31,
----------------------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
Average loans outstanding, net
of unearned discounts, during
year............................ $228,604 $211,917 $248,490 $351,388 $291,438
======== ======== ======== ======== ========
Allowance for possible loan losses:
Balance at beginning of year...... $ 3,177 $ 3,734 $ 3,373 $ 3,794 $ 4,131
-------- -------- -------- -------- --------
Charge-offs:
Commercial and industrial..... 670 1,799 7,661 524 625
Installment................... 45 120 29 22 5
-------- -------- -------- -------- --------
Total charge-offs........... 715 1,919 7,690 546 630
-------- -------- -------- -------- --------
Recoveries:
Commercial and industrial..... 41 25 38 116 111
Installment................... 11 47 13 9 32
-------- -------- -------- -------- --------
Total recoveries............ 52 72 51 125 143
-------- -------- -------- -------- --------
Less: Net charge-offs............ 663 1,847 7,639 421 487
-------- -------- -------- -------- --------
Provision for possible loan losses 690 1,290 8,000 -- 150
-------- -------- -------- -------- --------
Allowance - acquired portfolio 210 -- -- -- --
-------- -------- -------- -------- --------
Balance at end of year............ $ 3,414 $ 3,177 $ 3,734 $ 3,373 $ 3,794
======== ======== ======== ======== ========
Ratio of net charge-offs to
average loans outstanding, net
of unearned discounts during
year............................ .29% .87% 3.07% .12% .17%
======== ======== ======== ======== ========
On June 1, 1993, the parent company purchased for cash the assets (principally
loans) of Zenith Financial Corporation, a nationwide provider of consumer
receivables financing. The purchase price included the allowance for loan
losses of $209,627.
The Company's allowance for possible loan losses is a general reserve,
maintained without any specific dedication to the components of the loan
portfolio, available to meet the credit exposure implicit in any lending
activity. The information beginning on page 33 of the Company's 1993 Annual
Report under the caption "CREDIT RISK" is incorporated herein by reference.
The Company considers its allowance for possible loan losses to be adequate
based upon the size and risk characteristics of the outstanding loan portfolio
at December 31, 1993. While net losses within the loan portfolio are not
statistically predictable, it is possible that a deterioration in economic
conditions in the next twelve months could require future provisions for loan
losses above the level taken in 1993. The Company does not anticipate any
recurrence of net credit losses of the magnitude experienced in 1991.
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V. Deposits
Average deposits for each of the most recent three years is presented in the
Company's 1993 Annual Report on page 36 and is incorporated herein by
reference.
Outstanding time certificates of deposit issued from domestic offices in
amounts of $100,000 or more and interest expense on domestic and foreign
deposits are presented in the Company's 1993 Annual Report on page 18 in
Footnote 6 and is incorporated herein by reference.
VI. Return on Equity and Assets
The Company's returns on average total assets and average shareholders' equity,
dividend payout ratio and average shareholders' equity to average total assets
for each of the most recent three years follow:
Years Ended December 31,
-------------------------------------
1993 1992 1991
-------- -------- -------
Return on average total assets (Net income
(loss) divided by average total assets)..... .57% .52% (.92)%
Return on average shareholders' equity (Net
income (loss) divided by average equity).... 6.17% 5.19% (8.91)%
Dividend payout ratio (Dividends declared per
share divided by net income per share)...... 40.00% 48.78% N/A
Average shareholders' equity to average total
assets (Average equity divided by average
total assets)............................... 9.19% 9.98% 10.37 %
Note: Dividend payout ratio is not shown for 1991
because the Company's results of operations
were a net loss for that year.
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VII. Short-Term Borrowings
Balance and rate data for significant categories of the Company's Short-Term
Borrowings, for each of the most recent three years is presented in the
Company's 1993 Annual Report on page 19 in Footnote 7 and is incorporated by
reference.
ITEM 2. PROPERTIES
The principal offices of the Registrant and the bank occupy four contiguous
floors at 540 Madison Avenue at 55th Street, New York, N.Y. consisting of
approximately 29,000 square feet. These are held under two leases, of which
the one covering the upper floor expires December 31, 1996. The other,
covering the lower three floors, expires December 31, 1996 with a renewal
option to December 31, 2001. Annual rental commitments approximates $860,000.
Certain finance subsidiaries maintain offices in Beverly Hills, California and
Richmond, Virginia.
In addition to the principal offices, the bank maintains operating leases for
three additional branch offices and an Operations Center with an aggregate of
approximately 43,100 square feet. The annual office rental commitments for
these premises approximates $448,000. The leases have expiration dates ranging
from 1996 through 2008 with varying additional renewal options. The bank also
maintains a branch located in Forest Hills owned by the bank (and not subject
to a mortgage).
ITEM 3. LEGAL PROCEEDINGS
Neither Registrant nor any of its subsidiaries is party to any material legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
I-12
15
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The information appearing on page 35 of the Sterling Bancorp 1993 Annual Report
under the caption "MARKET PRICE FOR THE COMPANY'S COMMON STOCK AND RELATED
SECURITY HOLDER MATTERS" is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information appearing on page 31 of the 1993 Annual Report under the
caption "Selected Financial Data" is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information appearing on pages 32 - 35 of the 1993 Annual Report under the
caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations" is incorporated herein by reference. Supplementary Data
appearing on page 29 of the 1993 Annual Report under the caption "Quarterly
Data (Unaudited)" is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's consolidated financial statements as of December 31, 1993 and
1992 and for each of the years in the three-year period ended December 31, 1993
and the statements of condition of Sterling National Bank & Trust Company of
New York as of December 31, 1993 and 1992, notes thereto and Independent
Auditors' Report thereon appearing on pages 9 - 30 of the 1993 Annual Report,
are incorporated herein by reference.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
II-1
16
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information beginning on page 1 of the Sterling Bancorp Proxy Statement
dated March 18, 1994 under the caption "Election of Directors" and on page 10
of the same proxy statement under the caption "Security Ownership of Directors
and Executive Officers and Certain Beneficial Owners" are incorporated herein
by reference.
Executive Officers - This information is included pursuant to Instruction 3 to
Item 401 (b) and (c) of Regulation S-K:
Held
Executive
Office
Name of Executive Title Age Since
----------------- ------------------- ---- ---------
Louis J. Cappelli..... Chairman of the Board and
Chief Executive Officer,
Director 63 1967
John C. Millman....... President, Director 51 1986
Jerrold Gilbert....... Executive Vice President, General
Counsel & Secretary 57 1974
John W. Tietjen....... Senior Vice President, Treasurer
and Chief Financial Officer 49 1989
John P. Murphy....... Senior Vice President 43 1993
John A. Aloisio....... Vice President 51 1992
Leonard Rudolph....... Vice President 46 1992
All executive officers are elected annually by the Board of Directors and serve
at the pleasure of the Board. There are no arrangements or understandings
between any of the foregoing officers and any other person or persons pursuant
to which he was selected as an executive officer.
ITEM 11. EXECUTIVE COMPENSATION
The information beginning on page 3 of the Sterling Bancorp Proxy Statement
dated March 18, 1994 under the caption " Executive Compensation and Related
Matters" and on page 9 of the same Proxy Statement under the caption
"Transactions with the Company and Other Matters" are incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The information beginning on page 10 of the Sterling Bancorp Proxy Statement
dated March 18, 1994 under the caption "Security Ownership of Directors and
Executive Officers and Certain Beneficial Owners" and is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information appearing on page 9 of the Sterling Bancorp Proxy Statement
dated March 18, 1994 under the caption "Transactions with the Company and Other
Matters" is incorporated herein by reference.
III-1
17
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The documents filed as a part of this report are listed below:
1. Financial Statements
Annual Report to security holders,
Sterling Bancorp 1993 Annual Report
(This document is filed only to the extent of
pages 9 through 39 which are
incorporated by reference herein).
2. Financial Statement Schedules
None
3. Exhibits
3 (i)(A) Amended and restated Certificate of
Incorporation filed with the State of New
York, Department of State, August 14, 1986
(Filed as Exhibit 3.3 to Registrant's Form
10-K for the fiscal year ended December
31, 1986 and incorporated by reference
herein).
(i)(B) Certificate of Amendment of The
Certificate of Incorporation filed with
the State of New York Department of State,
June 13, 1988 (Filed as Exhibit 3.5 to
Registrant's Form 10-K for the fiscal year
ended December 31, 1988 and incorporated
by reference herein).
(i)(C) Certificate of Amendment of the
Certificate of Incorporation filed with
the State of New York Department of
State, March 5, 1993 (Filed as Exhibit
4.1 to Registrant's Form 8-K dated March
5, 1993 and incorporated by reference
herein).
3 (ii) By-Laws as in effect on March 15, 1993
(Filed as Exhibit 3.3 to the Registrant's
Form 10-K for the fiscal year ended
December 31, 1992 and incorporated
herein by reference).
4 (a) Indenture relating to floating interest
rate convertible subordinated debentures,
third series, due July 1, 1998 (Filed as
Exhibit 4(a) to Registrant's Registration
Statement 2-97263 and incorporated by
reference herein).
(b) Indenture relating to floating interest
rate convertible subordinated debentures,
4th series, due November 1, 1998 (Filed as
Exhibit 4(a) to Registrant's Registration
Statement 33-23877 and incorporated by
reference herein).
10 Employment Agreements, dated as of
February 19, 1993 (Filed as Exhibits
3.4(a) and 3.4(b), respectively, to the
Registrant's Form 10-K for the fiscal year
ended December 31, 1992 and incorporated
herein by reference).
(a) For Louis J. Cappelli
(b) For John C. Millman
11 Statement re Computation of Per Share
Earnings.
13 Annual Report to security holders,
Sterling Bancorp 1993 Annual Report
(This document is filed only to the
extent of pages 9 through 39 which are
incorporated by reference herein).
21 Subsidiaries of the Registrant.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the last quarter
of the period covered by this report.
IV-1
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, The Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
STERLING BANCORP
/s/ Louis J. Cappelli
Louis J. Cappelli, Chairman
(Principal Executive Officer)
March 29, 1994
Date
/s/ John W. Tietjen
John W. Tietjen, Treasurer
(Principal Financial and Accounting Officer)
March 29, 1994
Date
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
March 29, 1994 /s/ Louis J. Cappelli Director
- -------------- ------------------------------ -----------------------
(Date) (Signature) (Title)
March 29, 1994 /s/ John C. Millman Director
- -------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
March 29, 1994 /s/ Joseph M. Adamko Director
- -------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
March 29, 1994 /s/ Lillian Berkman Director
- -------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
March 29, 1994 /s/ Walter Feldesman Director
- -------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
March 29, 1994 /s/ Maxwell M. Rabb Director
- -------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
March 29, 1994 /s/ William C. Warren Director
- -------------- ------------------------------ ------------------------
(Date) (Signature) (Title)
19
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
DOCUMENTS FILED
AS A PART
OF THIS REPORT
ON
FORM 10-K
ANNUAL REPORT - 1993
____________
STERLING BANCORP
================================================================================
20
DOCUMENT INDEX
1. Financial Statements
Annual Report to security holders,
Sterling Bancorp 1993 Annual Report
(This document is filed only to the extent of
pages 9 through 39 which are
incorporated by reference herein).
2. Financial Statement Schedules
None
3. Exhibits
3 (i)(A) Amended and restated Certificate of
Incorporation filed with the State of New
York, Department of State, August 14, 1986
(Filed as Exhibit 3.3 to Registrant's Form
10-K for the fiscal year ended December
31, 1986 and incorporated by reference
herein).
(i)(B) Certificate of Amendment of The
Certificate of Incorporation filed with
the State of New York Department of State,
June 13, 1988 (Filed as Exhibit 3.5 to
Registrant's Form 10-K for the fiscal year
ended December 31, 1988 and incorporated
by reference herein).
(i)(C) Certificate of Amendment of the
Certificate of Incorporation filed with
the State of New York Department of
State, March 5, 1993 (Filed as Exhibit
4.1 to Registrant's Form 8-K dated March
5, 1993 and incorporated by reference
herein).
3 (ii) By-Laws as in effect on March 15, 1993
(Filed as Exhibit 3.3 to the Registrant's
Form 10-K for the fiscal year ended
December 31, 1992 and incorporated
herein by reference).
4 (a) Indenture relating to floating interest
rate convertible subordinated debentures,
third series, due July 1, 1998 (Filed as
Exhibit 4(a) to Registrant's Registration
Statement 2-97263 and incorporated by
reference herein).
(b) Indenture relating to floating interest
rate convertible subordinated debentures,
4th series, due November 1, 1998 (Filed as
Exhibit 4(a) to Registrant's Registration
Statement 33-23877 and incorporated by
reference herein).
10 Employment Agreements, dated as of
February 19, 1993 (Filed as Exhibits
3.4(a) and 3.4(b), respectively, to the
Registrant's Form 10-K for the fiscal year
ended December 31, 1992 and incorporated
herein by reference).
(a) For Louis J. Cappelli
(b) For John C. Millman
11 Statement re Computation of Per Share
Earnings.
13 Annual Report to security holders,
Sterling Bancorp 1993 Annual Report
(This document is filed only to the
extent of pages 9 through 39 which are
incorporated by reference herein).
21 Subsidiaries of the Registrant.
4. Reports on Form 8-K:
There were no reports on Form 8-K filed during the last
quarter of the period covered by this report.
21
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
3 (i)(A) Amended and restated Certificate of
Incorporation filed with the State of New
York, Department of State, August 14, 1986
(Filed as Exhibit 3.3 to Registrant's Form
10-K for the fiscal year ended December
31, 1986 and incorporated by reference
herein).
(i)(B) Certificate of Amendment of The
Certificate of Incorporation filed with
the State of New York Department of State,
June 13, 1988 (Filed as Exhibit 3.5 to
Registrant's Form 10-K for the fiscal year
ended December 31, 1988 and incorporated
by reference herein).
(i)(C) Certificate of Amendment of the
Certificate of Incorporation filed with
the State of New York Department of
State, March 5, 1993 (Filed as Exhibit
4.1 to Registrant's Form 8-K dated March
5, 1993 and incorporated by reference
herein).
3 (ii) By-Laws as in effect on March 15, 1993
(Filed as Exhibit 3.3 to the Registrant's
Form 10-K for the fiscal year ended
December 31, 1992 and incorporated
herein by reference).
4 (a) Indenture relating to floating interest
rate convertible subordinated debentures,
third series, due July 1, 1998 (Filed as
Exhibit 4(a) to Registrant's Registration
Statement 2-97263 and incorporated by
reference herein).
(b) Indenture relating to floating interest
rate convertible subordinated debentures,
4th series, due November 1, 1998 (Filed as
Exhibit 4(a) to Registrant's Registration
Statement 33-23877 and incorporated by
reference herein).
10 Employment Agreements, dated as of
February 19, 1993 (Filed as Exhibits
3.4(a) and 3.4(b), respectively, to the
Registrant's Form 10-K for the fiscal year
ended December 31, 1992 and incorporated
herein by reference).
(a) For Louis J. Cappelli
(b) For John C. Millman
11 Statement re Computation of Per Share
Earnings.
13 Annual Report to security holders,
Sterling Bancorp 1993 Annual Report
(This document is filed only to the
extent of pages 9 through 39 which are
incorporated by reference herein).
21 Subsidiaries of the Registrant.