Attached files
| file | filename |
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| 8-K - 8-K - STERLING BANCORP | stlform8-kpressrelease0930.htm |
Sterling Bancorp | |
400 Rella Boulevard | |
Montebello, NY 10901-4243 | |
News Release | T 845.369.8040 |
F 845.369.8255 | |
http://www.sterlingbancorp.com | |
FOR IMMEDIATE RELEASE | |
October 27, 2014 | |
STERLING BANCORP CONTACT: | |
Luis Massiani, SEVP & Chief Financial Officer | |
845.369.8040 | |
Sterling Bancorp Announces Results for the Fourth Fiscal Quarter and Fiscal Year ended September 30, 2014
Strong operating momentum continues highlighted by core diluted earnings per share1 of $0.22, GAAP diluted earnings per share of $0.19, and annualized commercial loan growth of 17.9%.
Key Highlights for the Fourth Fiscal Quarter 2014
▪ | Total revenue2 reached $71.9 million. |
▪ | Tax equivalent net interest margin was 3.77%, compared to 3.84% in the linked quarter and 3.23% in the fourth quarter of fiscal 2013. |
▪ | Total non-interest income excluding securities gains was $12.3 million, which represented 17.0% of total revenue2. |
▪ | Core total revenue1 grew 1.7% versus a decrease in core non-interest expense of 3.7% from the linked quarter. |
▪ | Core operating efficiency ratio1 was 54.7%. |
▪ | Annualized commercial loans grew 17.9% over linked quarter. |
▪ | Core return on average tangible assets1 was 1.06%, compared to 0.95% in the linked quarter and 0.53% in the fourth quarter of fiscal 2013. |
▪ | Core return on average tangible equity1 was 13.8%, compared to 12.4% in the linked quarter and 6.4% in the fourth quarter of fiscal 2013. |
MONTEBELLO, N.Y. – October 27, 2014 – Sterling Bancorp (NYSE: STL), the parent company of Sterling National Bank, today announced results for the quarter and fiscal year ended September 30, 2014. Net income for the quarter was $16.3 million, or $0.19 per diluted share, compared to net income of $5.3 million, or $0.12 per diluted share, for the same quarter last year and net income of $15.0 million, or $0.18 per diluted share, for the linked quarter ended June 30, 2014. For the fiscal year ended September 30, 2014, net income was $27.7 million, or $0.34 per diluted share, compared to net income of $25.3 million, or $0.58 per diluted share, for the fiscal year ended September 30, 2013.
President’s Comments
Jack Kopnisky, President and CEO, commented: “This has been a year of transformation for Sterling Bancorp, as our successful acquisition of legacy Sterling Bancorp by legacy Provident New York Bancorp in October 2013 has significantly accelerated our strategy of building a high performance regional bank that delivers superior service to our small and middle market commercial clients and consumers. This is evidenced by our strong results in the fourth quarter and full year. We are now a larger, more profitable and more diversified company with over $7.3 billion in assets, $4.8 billion in total loans and $5.3 billion in deposits as of September 30, 2014.”
1. Core measures are defined in the Non-GAAP tables beginning on page 10.
2. Total revenue is equal to net interest income plus non-interest income excluding securities gains and losses.
1
“Core net income for the quarter was $18.2 million and core earnings per diluted share were $0.22, increasing over both the linked and comparable last year quarters. Our core return on average tangible assets was 1.06% and core return on average tangible equity was 13.8%. This compares to 0.53% and 6.4%, respectively, for the same quarter a year ago.
“For the fiscal year ended September 30, 2014, our core net income was $57.8 million and core earnings per diluted share were $0.72. This represented an increase of 157.1% and 41.2%, respectively, over the prior year. Our core return on average tangible assets was 0.91% and core return on average tangible equity was 11.8%. Both metrics are on track to achieve our long-term profitability goals.
“On a linked quarter basis, our core total revenue grew 1.7% while core non-interest expense decreased by 3.7%. We continue to realize the anticipated revenue and expense benefits of the merger with legacy Sterling Bancorp and the consolidation of our financial centers and other locations. For the quarter, our core operating efficiency ratio was 54.7%, which compares to 57.8% in the linked quarter and 64.7% in the same quarter last year. For the fiscal year, our core operating efficiency ratio was 59.4% which represented an improvement of over 400 basis points relative to fiscal 2013.
“We continue to experience strong loan growth across multiple asset classes. As of September 30, 2014, total loans were $4.8 billion, which represented annualized growth of 17.7% over the prior quarter end and 17.5% since the completion of the legacy Sterling Bancorp merger. During the quarter, our commercial loan balances grew by $166.5 million to $3.9 billion, which represented annualized growth of 17.9% over the prior quarter end.
“As of September 30, 2014, our total deposits were $5.3 billion, which represented an increase of $196.2 million over the linked quarter. Our retail, commercial and municipal transaction, money market and savings accounts were $4.8 billion, which represented 90.2% of our total deposit balances. We continue to focus on growing our transaction deposits. During the quarter, commercial and consumer transaction deposits increased by $68.9 million, which represented annualized growth of 13.2% over the linked quarter.
“We continue to focus on diversifying and improving our revenue mix. Non-interest income excluding securities gains was $12.3 million for the quarter, which represented approximately 17.0% of total revenue. We have a significant opportunity to grow our specialty lending businesses, which we anticipate will allow us to grow fee income and increase the proportion of fee income to total revenue to greater than 20% over time.
“Net charge-offs against the allowance for loan losses for the quarter ended September 30, 2014 were $1.1 million, compared to $1.6 million in the prior quarter. The allowance for loan losses to total loans was 0.85%. As a result of purchase accounting, a substantial portion of the loans acquired in prior merger transactions are not subject to the allowance for loan losses. The ratio of allowance for loan losses to non-performing loans continues to strengthen and increased from 64.0% at June 30, 2014 to 79.7% at September 30, 2014.
“Our capital position remains strong. At September 30, 2014, our tangible equity to tangible assets ratio was 7.63% and our Tier 1 leverage ratio was 8.12%. At Sterling National Bank, our Tier 1 leverage ratio was 9.34%. We have ample capital and liquidity to support our organic growth and execute our strategy. Lastly, I am pleased to announce our Board of Directors has declared a dividend on our common stock of $0.07 per share payable on November 17, 2014 to our holders as of the record date of November 6, 2014.”
Reconciliation of Core to GAAP Results
Results for the fourth fiscal quarter of 2014 were impacted by pre-tax charges of $2.6 million, which are listed below. Excluding the impact of these items, net income was $18.2 million, or $0.22 per diluted share. The pre-tax charges were the following:
• | Costs associated with the banking systems conversion of $888 thousand. The charges were recognized as other non-interest expense. |
• | A charge to exit certain financial center locations of $215 thousand, which was recognized in other non-interest expense. |
• | Amortization of non-compete intangible assets of $1.5 million. |
Results for the fiscal year ended September 30, 2014 were impacted by merger-related expenses associated with the legacy Sterling Bancorp merger transaction, and charges for asset write-downs, the settlement of benefit plan obligations, costs associated with the banking systems conversion and other charges. In total, merger-related expenses, amortization of non-compete intangible assets, and other charges were $45.6 million for the fiscal year ended September 30, 2014. Partially offsetting these charges were
2
the gain on sale of a financial center and gain from the redemption of subordinated debentures that totaled $1.6 million. Excluding the impact of these items, net income for the fiscal year ended September 30, 2014 was $57.8 million, or $0.72 per diluted share.
See the reconciliation of the Company’s non-GAAP financial measures included in this press release beginning on page 10. Non-GAAP financial measures include references to the terms “core” or “excluding”.
Net Interest Income and Margin
Fourth quarter fiscal 2014 compared with fourth quarter fiscal 2013
Net interest income was $59.6 million, up $31.5 million compared to the fourth quarter of fiscal 2013. This was mainly the result of higher average loans and investment securities balances and an increase in net interest margin due to the merger transaction with legacy Sterling Bancorp. The tax-equivalent yield on investments increased 43 basis points and yield on loans increased 13 basis points. Yield on loans included $1.7 million in accretion of the fair value discount associated with the loans acquired from Gotham and legacy Sterling Bancorp. The cost of total deposits was 19 basis points and the cost of borrowings was 1.88%. The net interest margin on a tax-equivalent basis was 3.77% compared to 3.23% for the same period a year ago.
Fourth quarter fiscal 2014 compared with linked quarter ended June 30, 2014
Net interest income increased $1.2 million compared to the linked quarter ended June 30, 2014. The increase in net interest income was mainly due to a $264.4 million increase in the average balance of loans outstanding compared to the linked quarter. Partially offsetting this increase was a decline in the yield on loans, which was 4.83% for the fourth quarter compared to 5.04% for the linked quarter. The decline was due to a decrease in the accretion of the fair value discount associated with loans acquired from Gotham and legacy Sterling Bancorp of $1.3 million and a decrease in prepayment fees on commercial loans of $418 thousand. The tax-equivalent yield on interest earning assets was 4.24% compared to 4.30% in the linked quarter. Tax-equivalent net interest margin was 3.77% compared to 3.84% in the linked quarter.
Non-interest Income
Fourth quarter fiscal 2014 compared with fourth quarter fiscal 2013
Excluding net gains on sale of securities, non-interest income increased $7.5 million to $12.3 million during for the fourth quarter of fiscal 2014 compared to the last year quarter. The increase was mainly due to an increase in fees associated with service charges on deposits, fees generated in the factoring and payroll finance businesses and gain on sale income in mortgage banking. The Company realized a net gain on sale of securities of $33 thousand for the fourth quarter of fiscal 2014 compared to a net gain on sale of securities of $1.8 million in the comparable last year quarter.
Fourth quarter fiscal 2014 compared with linked quarter ended June 30, 2014
Excluding net gains on sale of securities, non-interest income decreased $26 thousand to $12.3 million during the fourth fiscal quarter of 2014. The decline was mainly due to a decrease in wealth management fees, service charges on deposits and other loan fees which totaled $440 thousand. These declines were partially offset by an increase of $233 thousand in mortgage banking income and an increase of $201 thousand in factoring and payroll finance fees. The Company realized a net gain on sale of securities of $1.2 million in the linked quarter ended June 30, 2014.
Non-interest Expense
Fourth quarter fiscal 2014 compared with fourth quarter fiscal 2013
Non-interest expense increased $20.4 million relative to the fourth quarter of fiscal 2013 to $43.8 million, principally the result of increased compensation and benefits expense, occupancy and office operations expense, and other expenses due to the legacy Sterling Bancorp merger transaction. Other expenses for the 2014 fourth fiscal quarter included the costs of the banking systems conversion of $888 thousand, a charge to exit certain financial center locations of $215 thousand, and the amortization of non-compete agreements of approximately $1.5 million. The costs associated with the banking systems conversion mainly consisted of consulting fees and personnel training costs incurred in connection with the integration of the legacy Provident Bank and legacy Sterling National Bank technology systems.
Fourth quarter fiscal 2014 compared with linked quarter ended June 30, 2014
Non-interest expense decreased $1.1 million compared to the linked quarter, mainly due to a decrease of $1.3 million in compensation and benefits expense and a decrease of $1.2 million in other expenses; this was partially offset by an increase in OREO expense of $1.1 million, as the linked quarter included the gain on sale of a closed financial center location. Other expenses in the linked quarter included a charge to exit certain financial center locations of $571 thousand and a charge related to the core banking systems conversion of $1.8 million. Included in the charge related to the banking systems conversion was a $1.2 million early termination fee paid to our current service provider. Other expense also included a gain on the redemption of subordinated debentures of $712 thousand in the linked quarter.
3
Income Taxes
In the fourth quarter of fiscal 2014, the Company recorded income taxes at a rate of 28.3% compared to an effective tax rate of 28.7% in the linked quarter and 38.3% for the comparable quarter in fiscal 2013. The tax rate for the fourth quarter of 2013 was impacted by a portion of merger-related costs that were non-deductible.
Key Balance Sheet Highlights at September 30, 2014
▪ | Total assets were $7.3 billion. |
▪ | Total loans, including loans held for sale, were $4.8 billion. |
▪ | Commercial and industrial loans represented 43.6%, commercial real estate loans represented 38.2%, consumer and residential mortgage loans represented 16.3%, and acquisition, development and construction loans represented 1.9% of the total loan portfolio. |
▪ | Commercial loan growth, which includes commercial and industrial loans, commercial real estate loans and specialty lending businesses was $166.5 million for the quarter ended September 30, 2014, and represented annualized growth of 17.9% over the prior quarter. |
▪ | Securities, excluding FHLB and FRB stock, were $1.7 billion and represented 23.0% of total assets. |
▪ | Total deposits were $5.3 billion. |
▪ | Transaction, money market and savings deposits (including municipal deposits) were $4.8 billion and represented 90.2% of total deposits. |
▪ | The allowance for loan losses was $40.6 million and represented 0.85% of total loans. Loans acquired in prior merger transactions were recorded at fair value at the acquisition date; a significant portion of these loans continue to carry no allowance for loan losses. |
▪ | Tangible book value per share was $6.30. |
Credit Quality
Non-performing loans decreased $5.8 million to $51.0 million, or 1.07% of total loans at September 30, 2014 compared to $56.8 million, or 1.25% of total loans at June 30, 2014. Net charge-offs for the 2014 fourth fiscal quarter that were charged to the allowance for loan losses were $1.1 million compared to $1.6 million in the linked quarter. The allowance for loan losses at September 30, 2014 was $40.6 million, which represented 79.7% of non-performing loans and 0.85% of our total loan portfolio compared to $36.4 million, 64.0% and 0.80%, respectively, as of June 30, 2014. The increase in the balance of the allowance for loan losses was mainly related to the higher balance of loans outstanding at September 30, 2014.
Capital
The Company’s stockholders’ equity was $961.1 million at September 30, 2014, an increase of $478.3 million relative to September 30, 2013. The increase in stockholders’ equity was mainly the result of the legacy Sterling Bancorp merger transaction, which increased capital by $457.8 million. Other contributors to the change in capital included fiscal year net income of $27.7 million, an decrease in other comprehensive income of $3.9 million and items related to stock-based compensation of $5.6 million. These increases were partially offset by dividends of $17.7 million declared in fiscal 2014.
Tangible book value per share decreased from $7.08 at September 30, 2013 to $6.30 at September 30, 2014. Total goodwill and other intangible assets were $434.2 million at September 30, 2014, an increase of $265.2 million over September 30, 2013. For the quarter ended September 30, 2014, basic and diluted weighted average common shares outstanding increased to 83.6 million and 83.9 million, respectively, compared to 43.7 million basic shares and 43.9 million diluted shares, respectively, for the quarter ended September 30, 2013. The increase in weighted average basic and diluted shares is mainly the result of the issuance of 39.1 million shares of common stock on October 31, 2013 in connection with the legacy Sterling Bancorp merger transaction. Total shares outstanding at September 30, 2014 were approximately 83.6 million.
Consolidated tangible equity to tangible assets was 7.63% at September 30, 2014 and the Company’s Tier 1 leverage ratio was 8.12%. Sterling National Bank remained well capitalized at September 30, 2014 with an a Tier 1 leverage ratio of 9.34%.
Sterling Bancorp will host a teleconference and webcast on Tuesday, October 28, 2014 at 10:30 AM EDT to discuss the Company’s results. Interested parties are invited to listen to the webcast and view accompanying slides on the Company’s website at www.sterlingbancorp.com. Analysts are invited to listen by dialing (855) 877-0343, Conference ID #12430370. A replay of the teleconference can be accessed through the Company’s website.
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About Sterling Bancorp
Sterling Bancorp, of which the principal subsidiary is Sterling National Bank, specializes in the delivery of service and solutions to business owners, their families and consumers within the communities we serve through teams of dedicated and experienced relationship managers. Sterling National Bank offers a complete line of commercial, business, and consumer banking products and services. For more information, visit the Sterling Bancorp website at www.sterlingbancorp.com.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This release may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may concern Sterling Bancorp’s current expectations about its future results, plans, operations and prospects and involve certain risks, including the following: fully realizing cost savings and other benefits; inflation; the effects of, and changes in, trade; changes in asset quality and credit risk; introduction, withdrawal, success and timing of business initiatives; capital management activities; customer disintermediation; and the success of Sterling Bancorp in managing those risks. Other factors that could cause Sterling Bancorp’s actual results to differ from those indicated in forward-looking statements are included in the “Risk Factors” section of Sterling Bancorp’s filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2014. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the Form 10-K to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.
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Sterling Bancorp and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION (unaudited, in thousands, except share and per share data)
9/30/2014 | 9/30/2013 | 6/30/2014 | ||||||||||
Assets: | ||||||||||||
Cash and due from banks | $ | 177,619 | $ | 113,090 | $ | 216,509 | ||||||
Investment securities | 1,689,888 | 1,208,392 | 1,730,980 | |||||||||
Loans held for sale | 17,846 | 1,011 | 20,217 | |||||||||
Loans: | ||||||||||||
Residential mortgage | 570,431 | 400,009 | 528,176 | |||||||||
Commercial real estate | 1,817,576 | 1,277,037 | 1,721,522 | |||||||||
Commercial and industrial | 2,076,474 | 439,787 | 2,006,008 | |||||||||
Acquisition, development and construction | 92,149 | 102,494 | 102,090 | |||||||||
Consumer | 203,808 | 193,571 | 200,828 | |||||||||
Total loans, gross | 4,760,438 | 2,412,898 | 4,558,624 | |||||||||
Allowance for loan losses | (40,612 | ) | (28,877 | ) | (36,350 | ) | ||||||
Total loans, net | 4,719,826 | 2,384,021 | 4,522,274 | |||||||||
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank Stock, at cost | 66,085 | 24,312 | 74,078 | |||||||||
Accrued interest receivable | 19,667 | 11,698 | 16,569 | |||||||||
Premises and equipment, net | 43,286 | 36,520 | 48,286 | |||||||||
Goodwill | 388,926 | 163,117 | 387,325 | |||||||||
Other intangibles | 45,278 | 5,891 | 47,860 | |||||||||
Bank owned life insurance | 119,486 | 60,914 | 118,689 | |||||||||
Other real estate owned | 7,580 | 6,022 | 5,017 | |||||||||
Other assets | 41,900 | 34,184 | 62,925 | |||||||||
Total assets | $ | 7,337,387 | $ | 4,049,172 | $ | 7,250,729 | ||||||
Liabilities: | ||||||||||||
Deposits | $ | 5,298,654 | $ | 2,962,294 | $ | 5,102,457 | ||||||
FHLB borrowings | 795,028 | 462,953 | 939,868 | |||||||||
Other borrowings | 45,639 | — | 23,601 | |||||||||
Senior notes | 98,402 | 98,033 | 98,308 | |||||||||
Mortgage escrow funds | 4,494 | 12,646 | 3,980 | |||||||||
Other liabilities | 134,032 | 30,380 | 129,082 | |||||||||
Total liabilities | 6,376,249 | 3,566,306 | 6,297,296 | |||||||||
Stockholders’ equity | 961,138 | 482,866 | 953,433 | |||||||||
Total liabilities and stockholders’ equity | $ | 7,337,387 | $ | 4,049,172 | $ | 7,250,729 | ||||||
Shares of common stock outstanding at period end | 83,628,267 | 44,351,046 | 83,600,529 | |||||||||
Book value per share | $ | 11.49 | $ | 10.89 | $ | 11.40 | ||||||
Tangible book value per share | 6.30 | 7.08 | 6.20 | |||||||||
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Sterling Bancorp and Subsidiaries CONSOLIDATED CONDENSED INCOME STATEMENTS
(unaudited, in thousands, except share and per share data)
For the Quarter Ended | For the Fiscal Year Ended | |||||||||||||||||||
9/30/2014 | 6/30/2014 | 9/30/2013 | 9/30/2014 | 9/30/2013 | ||||||||||||||||
Interest and dividend income: | ||||||||||||||||||||
Loans and loan fees | $ | 55,793 | $ | 54,189 | $ | 27,723 | $ | 202,982 | $ | 107,810 | ||||||||||
Securities taxable | 7,587 | 8,005 | 4,748 | 30,067 | 17,509 | |||||||||||||||
Securities non-taxable | 2,866 | 2,751 | 1,235 | 10,453 | 5,682 | |||||||||||||||
Other earning assets | 863 | 816 | 197 | 3,404 | 1,060 | |||||||||||||||
Total interest income | 67,109 | 65,761 | 33,903 | 246,906 | 132,061 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 2,421 | 2,319 | 1,051 | 8,964 | 5,923 | |||||||||||||||
Borrowings | 5,055 | 4,991 | 4,744 | 19,954 | 13,971 | |||||||||||||||
Total interest expense | 7,476 | 7,310 | 5,795 | 28,918 | 19,894 | |||||||||||||||
Net interest income | 59,633 | 58,451 | 28,108 | 217,988 | 112,167 | |||||||||||||||
Provision for loan losses | 5,350 | 5,950 | 2,700 | 19,100 | 12,150 | |||||||||||||||
Net interest income after provision for loan losses | 54,283 | 52,501 | 25,408 | 198,888 | 100,017 | |||||||||||||||
Non-interest income: | ||||||||||||||||||||
Accounts receivable / factoring commissions and other fees | 3,814 | 3,613 | — | 13,146 | — | |||||||||||||||
Mortgage banking income | 2,160 | 1,927 | 297 | 8,086 | 1,979 | |||||||||||||||
Deposit fees and service charges | 3,850 | 3,897 | 2,835 | 15,595 | 10,964 | |||||||||||||||
Net gain on sale of securities | 33 | 1,193 | 1,801 | 641 | 7,391 | |||||||||||||||
Bank owned life insurance | 791 | 820 | 502 | 3,080 | 1,998 | |||||||||||||||
Investment management fees | 446 | 681 | 673 | 2,209 | 2,413 | |||||||||||||||
Other | 1,192 | 1,340 | 492 | 4,613 | 2,947 | |||||||||||||||
Total non-interest income | 12,286 | 13,471 | 6,600 | 47,370 | 27,692 | |||||||||||||||
Non-interest expense: | ||||||||||||||||||||
Compensation and benefits | 22,110 | 23,381 | 12,409 | 94,310 | 47,833 | |||||||||||||||
Stock-based compensation plans | 1,006 | 780 | 513 | 3,703 | 2,239 | |||||||||||||||
Occupancy and office operations | 7,148 | 6,992 | 3,766 | 27,726 | 14,953 | |||||||||||||||
Amortization of intangible assets | 2,511 | 2,511 | 310 | 9,408 | 1,296 | |||||||||||||||
FDIC insurance and regulatory assessments | 1,619 | 1,795 | 664 | 6,146 | 3,010 | |||||||||||||||
Other real estate owned, net (income) expense | 214 | (881 | ) | 390 | (237 | ) | 1,562 | |||||||||||||
Merger-related expenses | — | — | 714 | 9,455 | 2,772 | |||||||||||||||
Other | 9,172 | 10,326 | 4,601 | 57,917 | 17,376 | |||||||||||||||
Total non-interest expense | 43,780 | 44,904 | 23,367 | 208,428 | 91,041 | |||||||||||||||
Income before income tax expense | 22,789 | 21,068 | 8,641 | 37,830 | 36,668 | |||||||||||||||
Income tax expense | 6,452 | 6,057 | 3,312 | 10,152 | 11,414 | |||||||||||||||
Net income | $ | 16,337 | $ | 15,011 | $ | 5,329 | $ | 27,678 | $ | 25,254 | ||||||||||
Weighted average common shares: | ||||||||||||||||||||
Basic | 83,610,943 | 83,580,050 | 43,742,903 | 80,268,970 | 43,734,425 | |||||||||||||||
Diluted | 83,883,461 | 83,806,135 | 43,859,834 | 80,534,043 | 43,783,053 | |||||||||||||||
Earnings per common share: | ||||||||||||||||||||
Basic earnings per share | $ | 0.20 | $ | 0.18 | $ | 0.12 | $ | 0.34 | $ | 0.58 | ||||||||||
Diluted earnings per share | 0.19 | 0.18 | 0.12 | 0.34 | 0.58 | |||||||||||||||
Dividends declared per share | 0.07 | 0.07 | 0.12 | 0.21 | 0.30 | |||||||||||||||
7
Sterling Bancorp and Subsidiaries SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)
As of and for the Quarter Ended | |||||||||||||||||||
End of Period | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||||||||||
Total assets | $ | 7,337,387 | $ | 7,250,729 | $ | 6,924,419 | $ | 6,667,437 | $ | 4,049,172 | |||||||||
Securities available for sale | 1,110,813 | 1,160,510 | 1,233,310 | 1,153,313 | 954,393 | ||||||||||||||
Securities held to maturity | 579,075 | 570,470 | 527,265 | 508,337 | 253,999 | ||||||||||||||
Loans, gross 1 | 4,760,438 | 4,558,624 | 4,244,354 | 4,127,141 | 2,412,898 | ||||||||||||||
Goodwill | 388,926 | 387,325 | 387,286 | 387,517 | 163,117 | ||||||||||||||
Other intangibles | 45,278 | 47,860 | 50,441 | 53,020 | 5,891 | ||||||||||||||
Deposits | 5,298,654 | 5,102,457 | 5,211,724 | 4,920,564 | 2,962,294 | ||||||||||||||
Municipal deposits (included above) | 992,761 | 824,522 | 926,618 | 673,656 | 757,066 | ||||||||||||||
Borrowings | 939,069 | 1,061,777 | 634,516 | 696,270 | 560,986 | ||||||||||||||
Stockholders’ equity | 961,138 | 953,433 | 936,466 | 925,109 | 482,866 | ||||||||||||||
Tangible equity | 526,934 | 518,248 | 498,739 | 484,572 | 313,858 | ||||||||||||||
Average Balances | |||||||||||||||||||
Total assets | $ | 7,217,649 | $ | 7,048,328 | $ | 6,747,546 | $ | 6,013,816 | $ | 3,907,960 | |||||||||
Loans, gross: | |||||||||||||||||||
Residential mortgage | 548,146 | 536,038 | 520,887 | 491,231 | 379,640 | ||||||||||||||
Commercial real estate | 1,736,441 | 1,680,242 | 1,580,454 | 1,466,986 | 1,247,055 | ||||||||||||||
Commercial and industrial | 1,966,359 | 1,805,048 | 1,625,720 | 1,268,492 | 443,349 | ||||||||||||||
Acquisition, development and construction | 97,863 | 94,804 | 93,531 | 98,691 | 104,856 | ||||||||||||||
Consumer | 202,940 | 199,626 | 199,834 | 200,637 | 194,718 | ||||||||||||||
Loans, total 1 | 4,551,749 | 4,315,758 | 4,020,426 | 3,526,037 | 2,369,618 | ||||||||||||||
Securities (taxable) | 1,349,126 | 1,444,507 | 1,386,538 | 1,330,646 | 963,949 | ||||||||||||||
Securities (non-taxable) | 361,766 | 339,417 | 324,470 | 250,520 | 157,480 | ||||||||||||||
Total earning assets | 6,430,467 | 6,265,883 | 5,985,054 | 5,207,436 | 3,529,321 | ||||||||||||||
Deposits: | |||||||||||||||||||
Non-interest bearing demand | 1,636,583 | 1,681,169 | 1,640,125 | 1,361,622 | 669,067 | ||||||||||||||
Interest bearing demand | 732,699 | 712,051 | 761,409 | 619,746 | 426,602 | ||||||||||||||
Savings (including mortgage escrow funds) | 647,103 | 606,518 | 613,131 | 622,530 | 601,272 | ||||||||||||||
Money market | 1,566,669 | 1,625,335 | 1,461,774 | 1,182,858 | 715,351 | ||||||||||||||
Certificates of deposit | 520,899 | 549,201 | 582,580 | 565,462 | 335,616 | ||||||||||||||
Total deposits and mortgage escrow | 5,103,953 | 5,174,274 | 5,059,019 | 4,352,218 | 2,747,908 | ||||||||||||||
Borrowings | 1,064,137 | 820,607 | 660,486 | 709,125 | 653,147 | ||||||||||||||
Equity | 956,166 | 944,476 | 934,304 | 780,241 | 478,491 | ||||||||||||||
Tangible equity | 522,025 | 507,671 | 494,697 | 432,703 | 309,327 | ||||||||||||||
Condensed Tax Equivalent Income Statement | |||||||||||||||||||
Interest and dividend income | $ | 67,109 | $ | 65,761 | $ | 61,325 | $ | 52,711 | $ | 33,903 | |||||||||
Tax equivalent adjustment* | 1,543 | 1,481 | 1,440 | 1,164 | 666 | ||||||||||||||
Interest expense | 7,476 | 7,310 | 7,297 | 6,835 | 5,795 | ||||||||||||||
Net interest income (tax equivalent) | 61,176 | 59,932 | 55,468 | 47,040 | 28,774 | ||||||||||||||
Provision for loan losses | 5,350 | 5,950 | 4,800 | 3,000 | 2,700 | ||||||||||||||
Net interest income after provision for loan losses | 55,826 | 53,982 | 50,668 | 44,040 | 26,074 | ||||||||||||||
Non-interest income | 12,286 | 13,471 | 12,415 | 9,148 | 6,600 | ||||||||||||||
Non-interest expense | 43,780 | 44,904 | 46,723 | 72,974 | 23,367 | ||||||||||||||
Income (loss) before income tax expense | 24,332 | 22,549 | 16,360 | (19,786 | ) | 9,307 | |||||||||||||
Income tax expense (benefit) (tax equivalent)* | 7,995 | 7,538 | 6,028 | (5,784 | ) | 3,978 | |||||||||||||
Net income (loss) | $ | 16,337 | $ | 15,011 | $ | 10,332 | $ | (14,002 | ) | $ | 5,329 | ||||||||
1 Does not reflect allowance for loan losses of $40,612, $36,350, $32,015, $30,612 and $28,877. | |||||||||||||||||||
*Tax exempt income assumed at a statutory 35% federal tax rate. | |||||||||||||||||||
8
Sterling Bancorp and Subsidiaries SELECTED FINANCIAL RATIOS
(unaudited, in thousands, except share and per share data)
For the Quarter Ended | |||||||||||||||||||
Per Share Data | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||||||||||
Basic earnings per share | $ | 0.20 | $ | 0.18 | $ | 0.12 | $ | (0.20 | ) | $ | 0.12 | ||||||||
Diluted earnings per share | 0.19 | 0.18 | 0.12 | (0.20 | ) | 0.12 | |||||||||||||
Dividends declared per share | 0.07 | 0.07 | 0.07 | — | 0.12 | ||||||||||||||
Tangible book value per share | 6.30 | 6.20 | 5.97 | 5.77 | 7.08 | ||||||||||||||
Shares of common stock outstanding | 83,628,267 | 83,600,529 | 83,544,307 | 83,955,647 | 44,351,046 | ||||||||||||||
Basic weighted average common shares outstanding | 83,610,943 | 83,580,050 | 83,497,765 | 70,493,305 | 43,742,903 | ||||||||||||||
Diluted weighted average common shares outstanding | 83,883,461 | 83,806,135 | 83,794,107 | 70,493,305 | 43,859,834 | ||||||||||||||
Performance Ratios (annualized) | |||||||||||||||||||
Return on average assets | 0.90 | % | 0.85 | % | 0.62 | % | (0.92 | )% | 0.54 | % | |||||||||
Return on average equity | 6.78 | % | 6.37 | % | 4.48 | % | (7.12 | )% | 4.42 | % | |||||||||
Return on average tangible equity 1 | 12.42 | % | 11.86 | % | 8.47 | % | (12.84 | )% | 6.83 | % | |||||||||
Core operating efficiency 1 | 54.7 | % | 57.8 | % | 61.4 | % | 65.4 | % | 64.7 | % | |||||||||
Analysis of Net Interest Income | |||||||||||||||||||
Yield on loans | 4.83 | % | 5.04 | % | 5.05 | % | 4.88 | % | 4.70 | % | |||||||||
Yield on investment securities - tax equivalent2 | 2.78 | % | 2.75 | % | 2.77 | % | 2.57 | % | 2.35 | % | |||||||||
Yield on earning assets - tax equivalent2 | 4.24 | % | 4.30 | % | 4.25 | % | 4.10 | % | 3.89 | % | |||||||||
Cost of deposits | 0.19 | % | 0.18 | % | 0.19 | % | 0.17 | % | 0.15 | % | |||||||||
Cost of borrowings | 1.88 | % | 2.44 | % | 3.01 | % | 2.80 | % | 2.88 | % | |||||||||
Cost of interest bearing liabilities | 0.65 | % | 0.68 | % | 0.73 | % | 0.73 | % | 0.84 | % | |||||||||
Net interest rate spread - tax equivalent basis2 | 3.59 | % | 3.62 | % | 3.52 | % | 3.37 | % | 3.05 | % | |||||||||
Net interest margin - tax equivalent basis2 | 3.77 | % | 3.84 | % | 3.76 | % | 3.58 | % | 3.23 | % | |||||||||
Capital | |||||||||||||||||||
Tier 1 leverage ratio - Bank only | 9.34 | % | 9.42 | % | 9.83 | % | 10.58 | % | 9.33 | % | |||||||||
Tier 1 risk-based capital - Bank only | $ | 636,327 | $ | 624,599 | $ | 622,878 | $ | 593,462 | $ | 363,274 | |||||||||
Total risk-based capital - Bank only | 676,939 | 661,344 | 655,288 | 624,469 | 392,376 | ||||||||||||||
Tangible equity as a % of tangible assets - consolidated 1 | 7.63 | % | 7.60 | % | 7.69 | % | 7.78 | % | 8.09 | % | |||||||||
Asset Quality | |||||||||||||||||||
Non-performing loans (NPLs) non-accrual | $ | 49,562 | $ | 53,153 | $ | 54,877 | $ | 35,597 | $ | 22,807 | |||||||||
Non-performing loans (NPLs) still accruing | 1,401 | 3,645 | 5,394 | 2,845 | 4,099 | ||||||||||||||
Other real estate owned | 7,580 | 5,017 | 9,275 | 11,751 | 6,022 | ||||||||||||||
Non-performing assets (NPAs) | 58,543 | 61,815 | 69,546 | 50,193 | 32,928 | ||||||||||||||
Net charge-offs | 1,088 | 1,615 | 3,397 | 1,265 | 2,197 | ||||||||||||||
Net charge-offs as a % of average loans (annualized) | 0.09 | % | 0.15 | % | 0.34 | % | 0.14 | % | 0.37 | % | |||||||||
NPLs as a % of total loans | 1.07 | % | 1.25 | % | 1.42 | % | 0.93 | % | 1.12 | % | |||||||||
NPAs as a % of total assets | 0.80 | % | 0.85 | % | 1.00 | % | 0.75 | % | 0.81 | % | |||||||||
Allowance for loan losses as a % of NPLs | 79.7 | % | 64.0 | % | 53.10 | % | 79.6 | % | 107.3 | % | |||||||||
Allowance for loan losses as a % of total loans | 0.85 | % | 0.80 | % | 0.75 | % | 0.74 | % | 1.20 | % | |||||||||
Special mention loans | $ | 39,553 | $ | 41,829 | $ | 39,964 | $ | 38,834 | $ | 13,530 | |||||||||
Substandard / doubtful loans | 73,093 | 79,110 | 82,673 | 77,337 | 61,095 | ||||||||||||||
1 See reconciliation of non-GAAP measure on following page. | |||||||||||||||||||
2 Tax equivalent adjustment represents interest income earned on municipal securities divided by the applicable Federal tax rate of 35% for all periods presented. | |||||||||||||||||||
9
Sterling Bancorp and Subsidiaries NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands, except share and per share data)
As of and for the Quarter Ended | |||||||||||||||||||
9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | |||||||||||||||
The Company provides supplemental reporting of non-GAAP measures as management believes this information is useful to investors. | |||||||||||||||||||
The following table shows the reconciliation of stockholders’ equity to tangible equity and the tangible equity ratio: | |||||||||||||||||||
Total assets | $ | 7,337,387 | $ | 7,250,729 | $ | 6,924,419 | $ | 6,667,437 | $ | 4,049,172 | |||||||||
Goodwill and other intangibles | (434,204 | ) | (435,185 | ) | (437,727 | ) | (440,537 | ) | (169,008 | ) | |||||||||
Tangible assets | 6,903,183 | 6,815,544 | 6,486,692 | 6,226,900 | 3,880,164 | ||||||||||||||
Stockholders’ equity | 961,138 | 953,433 | 936,466 | 925,109 | 482,866 | ||||||||||||||
Goodwill and other intangibles | (434,204 | ) | (435,185 | ) | (437,727 | ) | (440,537 | ) | (169,008 | ) | |||||||||
Tangible stockholders’ equity | 526,934 | 518,248 | 498,739 | 484,572 | 313,858 | ||||||||||||||
Common stock outstanding at period end | 83,628,267 | 83,600,529 | 83,544,307 | 83,955,647 | 44,351,046 | ||||||||||||||
Tangible equity as a % of tangible assets | 7.63 | % | 7.60 | % | 7.69 | % | 7.78 | % | 8.09 | % | |||||||||
Tangible book value per share | $ | 6.30 | $ | 6.20 | $ | 5.97 | $ | 5.77 | $ | 7.08 | |||||||||
The Company believes that tangible equity is useful as a tool to help assess a company’s capital position. | |||||||||||||||||||
The following table shows the reconciliation of return on average tangible equity and core return on average tangible equity: | |||||||||||||||||||
Average stockholders’ equity | $ | 956,166 | $ | 944,476 | $ | 934,304 | $ | 780,241 | $ | 478,491 | |||||||||
Average goodwill and other intangibles | (434,141 | ) | (436,805 | ) | (439,613 | ) | (347,538 | ) | (169,164 | ) | |||||||||
Average tangible stockholders’ equity | 522,025 | 507,671 | 494,691 | 432,703 | 309,327 | ||||||||||||||
Net income (loss) | 16,337 | 15,011 | 10,332 | (14,002 | ) | 5,329 | |||||||||||||
Net income (loss), if annualized | 64,815 | 60,209 | 41,902 | (55,551 | ) | 21,142 | |||||||||||||
Return on average tangible equity | 12.42 | % | 11.86 | % | 8.47 | % | (12.84 | )% | 6.83 | % | |||||||||
Core net income (see reconciliation on page 11) | $ | 18,166 | $ | 15,715 | $ | 13,094 | $ | 9,805 | $ | 5,006 | |||||||||
Annualized core net income | 72,072 | 63,033 | 53,103 | 38,900 | 19,861 | ||||||||||||||
Core return on average tangible equity | 13.81 | % | 12.42 | % | 10.73 | % | 8.99 | % | 6.42 | % | |||||||||
The Company believes that the return on average tangible stockholders’ equity is useful as a tool to help assess a company’s use of tangible equity. | |||||||||||||||||||
The following table shows the reconciliation of return on tangible assets and core return on tangible assets: | |||||||||||||||||||
Average assets | $ | 7,217,649 | $ | 7,048,328 | $ | 6,747,546 | $ | 6,013,816 | $ | 3,907,960 | |||||||||
Average goodwill and other intangibles | (434,141 | ) | (436,805 | ) | (439,613 | ) | (347,538 | ) | (169,164 | ) | |||||||||
Average tangible assets | 6,783,508 | 6,611,523 | 6,307,933 | 5,666,278 | 3,738,796 | ||||||||||||||
Net income (loss) | 16,337 | 15,011 | 10,332 | (14,002 | ) | 5,329 | |||||||||||||
Net income (loss), if annualized | 64,815 | 60,209 | 41,902 | (55,551 | ) | 21,142 | |||||||||||||
Return on average tangible assets | 0.96 | % | 0.91 | % | 0.66 | % | (0.98 | )% | 0.57 | % | |||||||||
Core net income (see reconciliation on page 11) | $ | 18,166 | $ | 15,715 | $ | 13,094 | $ | 9,805 | $ | 5,006 | |||||||||
Annualized core net income | 72,072 | 63,033 | 53,103 | 38,900 | 19,861 | ||||||||||||||
Core return on average tangible assets | 1.06 | % | 0.95 | % | 0.84 | % | 0.69 | % | 0.53 | % | |||||||||
The company believes that the core return on average tangible assets is a useful tool to help assess the Company’s profitability | |||||||||||||||||||
10
Sterling Bancorp and Subsidiaries NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands, except share and per share data)
As of and for the Quarter Ended | ||||||||||||||||||||
9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||||||||||||
The following table shows the reconciliation of the core operating efficiency ratio: | ||||||||||||||||||||
Net interest income | $ | 59,633 | $ | 58,451 | $ | 54,028 | $ | 45,876 | $ | 28,108 | ||||||||||
Non-interest income | 12,286 | 13,471 | 12,415 | 9,148 | 6,600 | |||||||||||||||
Total net revenue | 71,919 | 71,922 | 66,443 | 55,024 | 34,708 | |||||||||||||||
Tax equivalent adjustment on securities interest income | 1,543 | 1,481 | 1,440 | 1,164 | 666 | |||||||||||||||
Net (gain) loss on sale of securities | (33 | ) | (1,193 | ) | (60 | ) | 645 | (1,801 | ) | |||||||||||
Other (other gains and fair value loss on interest rate caps) | — | — | — | (93 | ) | 81 | ||||||||||||||
Core total revenue | 73,429 | 72,210 | 67,823 | 56,740 | 33,654 | |||||||||||||||
Non-interest expense | 43,780 | 44,904 | 46,723 | 72,974 | 23,367 | |||||||||||||||
Merger-related expense | — | — | (388 | ) | (9,068 | ) | (714 | ) | ||||||||||||
Charge for asset write-downs, banking systems conversion, retention and severance | (1,103 | ) | (2,321 | ) | (678 | ) | (22,167 | ) | (564 | ) | ||||||||||
Gain on sale of financial center and redemption of Trust Preferred Securities | — | 1,637 | — | — | — | |||||||||||||||
Charge on benefit plan settlement | — | — | (1,486 | ) | (2,743 | ) | — | |||||||||||||
Amortization of intangible assets | (2,511 | ) | (2,511 | ) | (2,511 | ) | (1,875 | ) | (310 | ) | ||||||||||
Core non-interest expense | 40,166 | 41,709 | 41,660 | 37,121 | 21,779 | |||||||||||||||
Core operating efficiency ratio | 54.7 | % | 57.8 | % | 61.4 | % | 65.4 | % | 64.7 | % | ||||||||||
The Company believes the core operating efficiency ratio is a useful tool to help assess the Company’s core operating performance. | ||||||||||||||||||||
The following table shows the reconciliation of core net income and core earnings per share: | ||||||||||||||||||||
Income (loss) before income tax expense | $ | 22,789 | $ | 21,068 | $ | 14,920 | $ | (20,950 | ) | $ | 8,641 | |||||||||
Income tax expense (benefit) | 6,452 | 6,057 | 4,588 | (6,948 | ) | 3,312 | ||||||||||||||
Net income (loss) | 16,337 | 15,011 | 10,332 | (14,002 | ) | 5,329 | ||||||||||||||
Net (gain) loss on sale of securities | (33 | ) | (1,193 | ) | (60 | ) | 645 | (1,801 | ) | |||||||||||
Merger-related expense | — | — | 388 | 9,068 | 714 | |||||||||||||||
Gain on sale of financial center and redemption of Trust Preferred Securities | — | (1,637 | ) | — | — | — | ||||||||||||||
Charge for asset write-downs, banking systems conversion, retention and severance | 1,103 | 2,321 | 678 | 22,167 | 564 | |||||||||||||||
Charge on benefit plan settlement | — | — | 1,486 | 2,743 | — | |||||||||||||||
Amortization of non-compete agreements | 1,497 | 1,497 | 1,497 | 998 | — | |||||||||||||||
Total charges (gains) | 2,567 | 988 | 3,989 | 35,621 | (523 | ) | ||||||||||||||
Income tax (benefit) | (738 | ) | (284 | ) | (1,227 | ) | (11,814 | ) | 200 | |||||||||||
Total non-core charges (gains) net of taxes | 1,829 | 704 | 2,762 | 23,807 | (323 | ) | ||||||||||||||
Core net income | $ | 18,166 | $ | 15,715 | $ | 13,094 | $ | 9,805 | $ | 5,006 | ||||||||||
Weighted average diluted shares1 | 83,883,461 | 83,806,135 | 83,794,107 | 70,707,292 | 43,859,834 | |||||||||||||||
Diluted EPS as reported | $ | 0.19 | $ | 0.18 | $ | 0.12 | $ | (0.20 | ) | $ | 0.12 | |||||||||
Core diluted EPS (excluding total charges) | 0.22 | 0.19 | 0.16 | 0.14 | 0.11 | |||||||||||||||
The Company believes the presentation of its net income excluding total charges provides a useful tool to help assess the Company’s profitability. | ||||||||||||||||||||
1 For the first fiscal quarter of 2014 represents diluted share calculation to compute diluted EPS assuming net income. | ||||||||||||||||||||
11
Sterling Bancorp and Subsidiaries NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands, except share and per share data)
For the fiscal year ended | |||||||||||||
9/30/2014 | 9/30/2013 | ||||||||||||
The following table shows the reconciliation of return on average tangible equity and core return on average tangible equity: | |||||||||||||
Average stockholders’ equity | $ | 906,134 | $ | 489,412 | |||||||||
Average goodwill and other intangibles | (414,326 | ) | (170,364 | ) | |||||||||
Average tangible stockholders’ equity | 491,808 | 319,048 | |||||||||||
Net income (loss) | 27,678 | 25,254 | |||||||||||
Return on average tangible equity | 5.63 | % | 7.92 | % | |||||||||
Core net income (see reconciliation on page 13) | $ | 57,842 | $ | 22,500 | |||||||||
Core return on average tangible equity | 11.76 | % | 7.05 | % | |||||||||
The Company believes that the return on average tangible stockholders’ equity is useful as a tool to help assess a company’s use of tangible equity. | |||||||||||||
The following table shows the reconciliation of return on tangible assets and core return on tangible assets: | |||||||||||||
Average assets | $ | 6,757,094 | $ | 3,815,609 | |||||||||
Average goodwill and other intangibles | (414,326 | ) | (170,364 | ) | |||||||||
Average tangible assets | 6,342,768 | 3,645,245 | |||||||||||
Net income (loss) | 27,678 | 25,254 | |||||||||||
Return on average tangible assets | 0.44 | % | 0.69 | % | |||||||||
Core net income (see reconciliation on page 13) | $ | 57,842 | $ | 22,500 | |||||||||
Core return on average tangible assets | 0.91 | % | 0.62 | % | |||||||||
The company believes that the core return on average tangible assets is a useful tool to help assess the Company’s profitability. | |||||||||||||
12
Sterling Bancorp and Subsidiaries NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands, except share and per share data)
For the fiscal year ended | |||||||||||||
9/30/2014 | 9/30/2013 | ||||||||||||
The following table shows the reconciliation of the core operating efficiency ratio: | |||||||||||||
Net interest income | $ | 217,988 | $ | 112,167 | |||||||||
Non-interest income | 47,370 | 27,692 | |||||||||||
Total net revenue | 265,358 | 139,859 | |||||||||||
Tax equivalent adjustment on securities interest income | 5,628 | 3,060 | |||||||||||
Net (gain) on sale of securities | (641 | ) | (7,359 | ) | |||||||||
Other (other gains and fair value loss on interest rate caps) | (93 | ) | 77 | ||||||||||
Core total revenue | 270,252 | 135,637 | |||||||||||
Non-interest expense | 208,428 | 91,041 | |||||||||||
Merger-related expense | (9,455 | ) | (2,772 | ) | |||||||||
Charge for asset write-downs, banking systems conversion, retention and severance | (26,590 | ) | (564 | ) | |||||||||
Gain on sale of financial center and redemption of Trust Preferred Securities | 1,637 | — | |||||||||||
Charge on benefit plan settlement | (4,095 | ) | — | ||||||||||
Amortization of intangible assets | (9,408 | ) | (1,296 | ) | |||||||||
Core non-interest expense | 160,517 | 86,409 | |||||||||||
Core operating efficiency ratio | 59.4 | % | 63.7 | % | |||||||||
The Company believes the presentation of its net income excluding total charges provides a useful tool to help assess the Company’s profitability. | |||||||||||||
The following table shows the reconciliation of core net income and core earnings per share: | |||||||||||||
Income before income tax expense | $ | 37,830 | $ | 36,668 | |||||||||
Income tax expense | 10,152 | 11,414 | |||||||||||
Net income | 27,678 | 25,254 | |||||||||||
Net (gain) on sale of securities | (641 | ) | (7,359 | ) | |||||||||
Merger-related expense | 9,455 | 2,772 | |||||||||||
Gain on sale of financial center and redemption of Trust Preferred Securities | (1,637 | ) | — | ||||||||||
Charge for asset write-downs, banking systems conversion, retention and severance | 26,591 | 588 | |||||||||||
Charge on benefit plan settlement | 4,095 | — | |||||||||||
Amortization of non-compete agreements | 5,489 | — | |||||||||||
Total charges (gains) | 43,352 | (3,999 | ) | ||||||||||
Income tax (benefit) | (13,188 | ) | 1,245 | ||||||||||
Total non-core charges (gains) net of taxes | 30,164 | (2,754 | ) | ||||||||||
Core net income | $ | 57,842 | $ | 22,500 | |||||||||
Weighted average diluted shares | 80,534,043 | 43,783,053 | |||||||||||
Diluted EPS as reported | $ | 0.34 | $ | 0.58 | |||||||||
Core diluted EPS (excluding total charges) | 0.72 | 0.51 | |||||||||||
13