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» Sterling Bancorp Q2 2010 Earnings Call Transcript
We will have introductory remarks today from Mr. John Millman, President of Sterling Bancorp; and Mr. John Tietjen, Chief Financial Officer. After their remarks, we’ll open up the call for your questions.And with that, I’d like to turn the call over to Mr. Millman. John Millman Thank you, Ed, and good morning, everyone. Welcome to our conference call for the second quarter ended June 30 th, 2011. Strong business growth and solid asset quality were the two main themes for Sterling in the 2011 second quarter. Our performance clearly shows that we are gaining share in a resilient dynamic market leading to expanded business with existing clients and a significant number of new customer relationships. These market share gains are reflected in double-digit growth in loans, deposits and total assets. At the same time, we are experiencing strong asset quality metrics. Net charge-offs were $2.5 million for the second quarter, half the level of the year ago period. Our allowance for loan losses covered non-accruals by 323% as of June 30 th, 2011. Now let me review some of the specific highlights of the 2011 second quarter. Net income was $3.9 million, an increase of 32% from the year ago quarter. This represents a continuation of the strong, positive momentum we demonstrated in the first quarter of this year. As you know, we fully redeemed the TARP preferred shares and warrants in the second quarter. This action was reflected in net income available to common shareholders, as we incurred accelerated accretion of $1.2 million or about $0.04 per share. Including the accelerated accretion, net income available to common shareholders was $2.5 million for the 2011 second quarter, an increase of 8% from the prior year . It is important to note that we had a sharply higher average share count this quarter with shares outstanding up $4.7 million or 18% due to our successful March 2011 common share offering. Including our previous common share offering in 2010, we have raised over $100 million in additional equity in the past 15 months and significantly to our already strong capital foundation. With the effect of the higher share count being partially offset by earnings growth, earnings per diluted share were basically stable with the year ago period, $0.08 for the second quarter 2011 versus $0.09 for 2010.
We experienced strong asset growth across our business and set new record highs for loans, deposits and total assets. Total loans in portfolio were up over 10% to $1.4 billion. Total deposits rose 22% to $2 billion and total assets were up 13% to approximately $2.6 billion. Again, these were all historic highs for our company.The growth in our business shows that we are continuing to gain market share as we expand our existing client relationships and add new customers who have been underserved by competitors. Asset quality also has continued to be quite strong. Net charge-offs were $2.5 million for the second quarter, half the level of $5 million a year ago. Non-accrual loans were $5.7 million at June 30 th, 2011 down from $18.7 million a year earlier. The ratio of non-accrual loans to total loans improved to 0.41% from 1.46% a year earlier. Non-performing assets were 0.30% of total assets of June 30 th, 2011, down from 0.85% a year ago. The allowance for loan losses as a percentage of non-accrual loans was 323% at June 30 th, 2011 compared to 110% last year. There are a number of key factors that give us confidence in Sterling’s ability to continue delivering strong growth and solid financial performance for the balance of the year. Sterling is uniquely positioned as a business bank in an attractive market place that is centered in New York, the New York Metro area and beyond, which is home to hundreds of thousands of small to mid size businesses. While a number of lending institutions seem to have rediscovered the middle market, we continue to differentiate ourselves by providing unique custom-tailored solutions. Our C&I lending sweet spot as the client whose credit needs are between $3 million and $10 million. Due to our broad range of products, including our strength and asset-based finance, we can offer custom-tailored financial solutions to clients, while also broadening and diversifying our income sources. Read the rest of this transcript for free on seekingalpha.com