Press Release

Sterling Bancorp announces results for the third quarter of 2019 with diluted earnings per share available to common stockholders of $0.59 (as reported) and $0.52 (as adjusted). Highlights include continued progress in balance sheet transition, improving efficiency, and strong expense management and profitability.

Company Release - 10/23/2019 4:10 PM ET

Key Performance Highlights for the Three Months ended September 30, 2019 vs. September 30, 2018

($ in thousands except per share amounts)GAAP / As Reported Non-GAAP / As Adjusted1
 9/30/2018 9/30/2019 Change
% / bps
 9/30/2018 9/30/2019 Change
% / bps
Total revenue2$268,094  $275,151  2.6% $272,202  $259,758  (4.6)%
Net income available to common117,657  120,465  2.4  114,273  105,629  (7.6)
Diluted EPS available to common0.52  0.59  13.5  0.51  0.52  2.0 
Net interest margin33.48% 3.36% (12) 3.54% 3.42% (12)
Return on average tangible common equity18.63  18.56  (7) 18.09  16.27  (182)
Return on average tangible assets1.59  1.71  12  1.55  1.50  (5)
Tangible book value per common share111.33  12.90  13.9  11.33  12.90  13.9 
  • Net income available to common stockholders of $120.5 million (as reported) and $105.6 million (as adjusted).
  • Total commercial loans of $18.2 billion at September 30, 2019; growth of 15.3% over September 30, 2018.
  • Operating efficiency ratio of 38.7% (as reported) and 39.1% (as adjusted)4.
  • Repurchased 2,808,046 common shares in the third quarter of 2019.
  • Tangible book value per common share1 of $12.90; growth of 13.9% over September 30, 2018.

Key Performance Highlights for the Three Months ended September 30, 2019 vs. June 30, 2019

($ in thousands except per share amounts)GAAP / As Reported Non-GAAP / As Adjusted1
 6/30/2019 9/30/2019 Change
% / bps
 6/30/2019 9/30/2019 Change
% / bps
Total revenue2$258,897  $275,151  6.3% $263,259  $259,758  (1.3)%
Net income available to common94,473  120,465  27.5  105,124  105,629  0.5 
Diluted EPS available to common0.46  0.59  28.3  0.51  0.52  2.2 
Net interest margin33.53% 3.36% (17) 3.58% 3.42% (16)
Return on average tangible common equity15.13  18.56  343  16.83  16.27  (56)
Return on average tangible assets1.36  1.71  35  1.51  1.50  (1)
Tangible book value per common share112.40  12.90  4.0  12.40  12.90  4.0 
  • Growth in commercial loans of $636.4 million over linked quarter; 14.4% annualized growth rate.
  • Total deposits were $21.6 billion with a cost of 0.92%. Municipal deposit balances increased by $534.8 million.
  • Excluding accretion income on acquired loans, net interest margin was 3.15%.
  • Consolidated 10 financial centers and one back-office location in the third quarter of 2019.
  • Completed the restructuring of $394.8 million of bank owned life insurance (“BOLI”).
  • Completed the termination of the Astoria defined benefit pension plan and recorded a $12.1 million gain.
  • Announced agreement to acquire an $843.0 million commercial loan portfolio. Anticipated close in Q4 2019.

1. Non-GAAP / as adjusted measures are defined in the non-GAAP tables beginning on page 18.
2. Total revenue is equal to net interest income plus non-interest income. Total revenue as adjusted is equal to tax equivalent net interest income plus non-interest income excluding securities gains and losses and gain on termination of pension plan.
3. Net interest margin is equal to net interest income divided by average interest earning assets. Net interest margin as adjusted, or tax equivalent net interest margin, is equal to net interest income plus the tax equivalent adjustment for tax exempt securities divided by average interest earning assets. The tax equivalent adjustment assumes a 21% federal tax rate in all periods presented.
4. Operating efficiency ratio is a non-GAAP measure. See page 21 for an explanation of the operating efficiency ratio.

1

MONTEBELLO, N.Y., Oct. 23, 2019 (GLOBE NEWSWIRE) -- Sterling Bancorp (NYSE: STL) (the “Company”), the parent company of Sterling National Bank (the “Bank”), today announced results for the three and nine months ended September 30, 2019. Net income available to common stockholders for the quarter ended September 30, 2019 was $120.5 million, or $0.59 per diluted share, compared to net income available to common stockholders of $94.5 million, or $0.46 per diluted share, for the linked quarter ended June 30, 2019, and net income available to common stockholders of $117.7 million, or $0.52 per diluted share, for the three months ended September 30, 2018.

Net income available to common stockholders for the nine months ended September 30, 2019 was $314.4 million, or $1.51 per diluted share, compared to net income available to common stockholders of $326.8 million, or $1.45 per diluted share, for the nine months ended September 30, 2018.

President’s Comments
Jack Kopnisky, President and Chief Executive Officer, commented: “We continued executing our strategy in the third quarter, focusing on growing our commercial businesses, transitioning our balance sheet to a more optimal mix and driving operational efficiency. In the third quarter of 2019, our adjusted net income available to common stockholders was $105.6 million and our adjusted diluted earnings per share available to common stockholders (“adjusted EPS”) was $0.52. Our profitability metrics remained strong, including adjusted return on average tangible assets of 1.50% and adjusted return on average tangible common equity of 16.3%. We have also continued delivering on our track record of growth and profitability. Over the past five years, our adjusted EPS has grown at a compound annual growth rate (“CAGR”) of 18.8%; and our tangible book value per common share has grown at a CAGR of 15.4%.

“Our commercial businesses have continued to demonstrate strong performance. We organically grew spot commercial loan balances by $636.4 million in the third quarter of 2019 and $1.5 billion since December 31, 2018. In the same periods, run-off of residential mortgage loans was $165.5 million and $463.8 million, respectively. At September 30, 2019, our loan portfolio consisted of 87.4% in total commercial loans, in-line with our longer-term target of commercial loans representing at least 85.0% of our total portfolio. We continue to exercise discipline on new loan originations and portfolio acquisitions, focusing on diversified commercial asset classes where we can achieve our target risk-adjusted returns.

“We continue to focus on generating deposit growth through full client relationships. Total deposits were $21.6 billion and the cost of total deposits was 0.92% in the third quarter of 2019. We are seeing improving market conditions and competitive dynamics in our deposit markets, demonstrated by the increase of one basis point in total cost of deposits relative to the linked quarter. We anticipate that the current interest rate environment will allow us to reduce our cost of total funding liabilities; as of September 30, 2019, our spot cost of total funding liabilities was 1.10%, compared to an average of 1.16% for the third quarter. We will focus on further reducing costs of deposits and borrowings going forward.

“The changing interest rate environment resulted in pressure on our interest earning asset and loan origination yields, as our tax equivalent yield excluding accretion income on acquired loans was 3.15% in the third quarter of 2019 compared to 3.22% for the linked quarter. We anticipate that our loan portfolio transition, decreasing balances of Federal Home Loan Bank (“FHLB”) borrowings, and improving deposit market competitive dynamics will allow us to support our current level of tax equivalent net interest margin excluding accretion income. However, a prolonged flat interest rate environment would impact our net interest margin and the profitability of our loan originations and balance sheet growth.

“We continue to maintain strong controls over operating expenses. During the third quarter of 2019, we consolidated 10 financial centers, bringing our total to 19 financial centers closed year to date. Our financial center count was 87 at September 30, 2019, and we anticipate our total financial centers will be below 80 in 2020. In the third quarter of 2019, our annualized adjusted operating expenses were $403.4 million and our adjusted operating efficiency ratio was 39.1%.

“We are constantly evaluating opportunities to make our business and operations more profitable. To that end, we executed several corporate actions during the quarter. First, we completed the restructuring of the BOLI program we acquired in the merger with Astoria Financial Corp. (the “Astoria Merger”). The restructuring consisted mainly of diversifying the investment asset classes available under the program and a reduction in fees and other charges. Our total BOLI income was $8.1 million in the quarter, and we anticipate BOLI income will be in a range of $5.0 million to $6.0 million per quarter going forward. Second, we completed the termination of the Astoria defined benefit pension plan, and recorded a net pre-tax gain of $12.1 million. Lastly, we announced we have entered into a definitive agreement to acquire $843 million of middle market commercial equipment finance loans and leases, which will augment our loan originations and accelerate our balance sheet and loan portfolio repositioning. The transaction is expected to close in the fourth quarter of 2019.

 “Our tangible common equity ratio was 9.22% and our estimated Tier 1 Leverage ratio was 9.77% at September 30, 2019. Our tangible book value per common share was $12.90, which represented an increase of 13.9% from a year ago. Our ample capital position and strong internal capital generation will support our growth strategy and allow us to return capital to stockholders. In the third quarter of 2019, we repurchased 2,808,046 common shares. We anticipate we will repurchase between 4.0 to 5.0 million shares in the fourth quarter of 2019, subject to market conditions.

2

“We have created a Company with significant operating flexibility and are confident that our business mix, growth strategy and strong capital position will allow us to continue generating superior returns and earnings per share growth. We would like to thank our clients, colleagues and shareholders for your support and look forward to working with all of our partners as we continue to build a great company.

“Lastly, we have declared a dividend on our common stock of $0.07 per share payable on November 18, 2019 to holders of record as of November 4, 2019.”

Reconciliation of GAAP Results to Adjusted Results (non-GAAP)
The Company’s GAAP net income available to common stockholders of $120.5 million, or $0.59 per diluted share, for the third quarter of 2019, included the following items:

  • a pre-tax gain of $12.1 million on the termination of the legacy Astoria defined benefit pension plan;
  • a pre-tax gain of $6.9 million on the sale of available for sale securities; and
  • the pre-tax amortization of non-compete agreements and acquired customer list intangible assets of $200 thousand.

Excluding the impact of these items, adjusted net income available to common stockholders was $105.6 million, or $0.52 per diluted share, for the three months ended September 30, 2019.

Non-GAAP financial measures include references to the terms “adjusted” or “excluding”. See the reconciliation of the Company’s non-GAAP financial measures beginning on page 18.

Net Interest Income and Margin

($ in thousands)For the three months ended Change % / bps
 9/30/2018 6/30/2019 9/30/2019 Y-o-Y Linked Qtr
Interest and dividend income$309,025  $302,457  $295,209  (4.5%) (2.4)%
Interest expense65,076  70,618  71,888  10.5  1.8 
Net interest income$243,949  $231,839  $223,321  (8.5) (3.7)
                  
Accretion income on acquired loans$26,574  $23,745  $17,973  (32.4)% (24.3)%
Yield on loans5.01% 5.20% 4.97% (4) (23)
Tax equivalent yield on investment securities2.87  2.92  2.85  (2) (7)
Tax equivalent yield on interest earning assets4.47  4.66  4.50  3  (16)
Cost of total deposits0.68  0.91  0.92  24  1 
Cost of interest bearing deposits0.84  1.14  1.16  32  2 
Cost of borrowings2.29  2.54  2.41  12  (13)
Cost of interest bearing liabilities1.17  1.38  1.40  23  2 
Tax equivalent net interest margin53.54  3.58  3.42  (12) (16)
          
Average commercial loans$15,525,011  $16,996,838  $17,596,552  13.3% 3.5%
Average loans, including loans held for sale20,386,994  19,912,839  20,302,887  (0.4) 2.0 
Average investment securities6,774,712  5,883,269  5,439,886  (19.7) (7.5)
Average total interest earning assets27,799,933  26,377,053  26,354,394  (5.2) (0.1)
Average deposits and mortgage escrow21,115,354  21,148,872  20,749,885  (1.7) (1.9)

5 Tax equivalent net interest margin is equal to net interest income plus the tax equivalent adjustment for tax exempt securities divided by average interest earning assets. The tax equivalent adjustment is assumed at a 21% federal tax rate in all periods presented.

3

Third quarter 2019 compared with third quarter 2018
Net interest income was $223.3 million for the quarter ended September 30, 2019, a decrease of $20.6 million compared to the third quarter of 2018. This was mainly due to a $1.4 billion decline in average total interest earning assets and an increase in the cost of interest bearing liabilities. Other key components of the changes in net interest income and net interest margin for the third quarter of 2019 compared to the third quarter of 2018 were the following:

  • The yield on loans was 4.97% compared to 5.01% for the three months ended September 30, 2018. The decrease in yield on loans was mainly due to the decline in accretion income on acquired loans, which was $18.0 million in the third quarter of 2019 compared to $26.6 million in the third quarter of 2018.
  • The tax equivalent yield on investment securities was 2.85% compared to 2.87% for the three months ended September 30, 2018. Average investment securities were $5.4 billion, or 20.6%, of average total interest earning assets for the third quarter of 2019 compared to $6.8 billion, or 24.4%, of average total interest earning assets for the third quarter of 2018. The decline in the average balance of investment securities was mainly due to our balance sheet transition strategy.
  • The tax equivalent yield on interest earning assets increased three basis points between the periods to 4.50%.
  • The cost of total deposits was 92 basis points and the cost of borrowings was 2.41%, compared to 68 basis points and 2.29%, respectively, for the same period a year ago. The increase was mainly due to increases in market rates of interest.
  • The total cost of interest bearing liabilities increased 23 basis points to 1.40% for the third quarter of 2019 compared to 1.17% for the third quarter of 2018, which was mainly due to the increase in market interest rates.
  • Average interest bearing deposits decreased by $415.8 million and average borrowings decreased $1.2 billion compared to the third quarter of 2018. The declines were related to a decrease in average earning assets and lower deposit balances on certain higher balance, higher cost commercial and municipal accounts.
  • Total interest expense increased by $6.8 million compared to the third quarter of 2018.

The tax equivalent net interest margin was 3.42% for the third quarter of 2019 compared to 3.54% for the third quarter of 2018. The decrease in tax equivalent net interest margin was mainly due to the increase in the cost of interest bearing liabilities and the decrease in accretion income on acquired loans. Excluding accretion income, tax equivalent net interest margin was 3.15% for the third quarter of 2019 compared to 3.16% in the third quarter of 2018.

Third quarter 2019 compared with linked quarter ended June 30, 2019
Net interest income declined $8.5 million for the quarter ended September 30, 2019 compared to the linked quarter. The decrease in net interest income was mainly due to lower accretion income on acquired loans, which declined $5.8 million to $18.0 million for the third quarter of 2019 compared to $23.7 million in the linked quarter. Other key components of the changes in net interest income and net interest margin for the third quarter of 2019 compared to the linked quarter were the following:

  • The yield on loans was 4.97% compared to 5.20% for the linked quarter. The decrease in the yield on loans was mainly due to a decrease in accretion income on acquired loans and a decline in market interest rates. Our balance sheet transition continued as the average balance of commercial loans increased by $599.7 million and the average balance of residential mortgage loans declined by $191.8 million. The growth in commercial loans was due to organic growth generated by our commercial banking teams.
  • The tax equivalent yield on investment securities was 2.85% compared to 2.92% for the linked quarter. The decrease in yield was mainly due to accelerated amortization of securities premiums related to repayments of mortgage-backed securities and the sale of a portion of our higher yielding corporate securities.
  • The tax equivalent yield on interest earning assets was 4.50% compared to 4.66% in the linked quarter.
  • The cost of total deposits increased one basis point to 92 basis points, mainly due to a change in our deposit mix as the proportion of certificate accounts increased. The total cost of borrowings declined 13 basis points to 2.41% due to changes in market rates of interest.
  • Average interest bearing deposits decreased by $406.2 million and average borrowings increased by $328.2 million relative to the linked quarter. The decline in deposits was due to the same factors as discussed above. The increase in borrowings offset the decline in average deposits. Total interest expense increased $1.3 million from the linked quarter.

The tax equivalent net interest margin was 3.42% compared to 3.58% in the linked quarter. Excluding accretion income on acquired loans, tax equivalent net interest margin was 3.15% compared to 3.22% in the linked quarter. We anticipate we will be able to support our net interest margin through further reductions in total securities and are targeting a level of 15.0% of average earning assets over time, and reductions in the cost of interest bearing liabilities.

4

Non-interest Income

($ in thousands)For the three months ended Change %
 9/30/2018 6/30/2019 9/30/2019 Y-o-Y Linked Qtr
Total non-interest income$24,145  $27,058  $51,830  114.7% 91.6%
Net (loss) gain on sale of securities(56) (528) 6,882  NM  NM 
Gain on termination of pension plan    12,097  NM  NM 
Adjusted non-interest income$24,201  $27,586  $32,851  35.7  19.1 

Third quarter 2019 compared with third quarter 2018
Excluding net (loss) gain on sale of securities and gain on termination of pension plan, adjusted non-interest income increased $8.7 million in the third quarter of 2019 to $32.9 million, compared to $24.2 million in the same quarter last year. The change was mainly due to higher BOLI income and loan commissions and fees generated by our commercial banking teams.

In the third quarter of 2019, we realized a gain of $6.9 million on the sale of available for sale securities compared to a $56 thousand loss in the year earlier period. We anticipate we will continue to reduce our securities portfolio and are targeting a level of 15% securities to average earning assets over time.

We terminated the defined benefit pension plan assumed in the Astoria Merger during the third quarter of 2019. The termination of the plan resulted in a gain of $12.1 million.

Third quarter 2019 compared with linked quarter ended June 30, 2019
Excluding net (loss) gain on sale of securities and gain on termination of pension plan, adjusted non-interest income increased approximately $5.3 million from $27.6 million in the linked quarter to $32.9 million in the third quarter of 2019. The increase was due to the same factors discussed above. BOLI income was $4.2 million in the second quarter of 2019 and $8.1 million in the third quarter of 2019. The increase in the third quarter of 2019 was due to the restructuring of the BOLI assets acquired in the Astoria Merger.

Non-interest Expense

($ in thousands)For the three months ended Change % / bps
 9/30/2018 6/30/2019 9/30/2019 Y-o-Y Linked Qtr
Compensation and benefits$54,823  $54,473  $52,850  (3.6)% (3.0)%
Stock-based compensation plans3,115  4,605  4,565  46.5  (0.9)
Occupancy and office operations16,558  16,106  15,836  (4.4) (1.7)
Information technology10,699  9,047  8,545  (20.1) (5.5)
Amortization of intangible assets5,865  4,785  4,785  (18.4)  
FDIC insurance and regulatory assessments6,043  2,994  3,194  (47.1) 6.7 
Other real estate owned (“OREO”), net1,497  458  79  (94.7) (82.8)
Impairment related to financial centers and real estate consolidation strategy  14,398    NM  NM 
Other expenses13,173  20,074  16,601  26.0  (17.3)
Total non-interest expense$111,773  $126,940  $106,455  (4.8) (16.1)
Full time equivalent employees (“FTEs”) at period end1,959  1,820  1,689  (13.8) (7.2)
Financial centers at period end113  97  87  (23.0) (10.3)
Operating efficiency ratio, as reported41.7% 49.0% 38.7% 300  1,030 
Operating efficiency ratio, as adjusted38.9  40.9  39.1  (20) 180 

Third quarter 2019 compared with third quarter 2018
Total non-interest expense decreased $5.3 million, relative to the third quarter of 2018. Key components of the change in non-interest expense between the periods were the following:

  • Compensation and benefits decreased $2.0 million, mainly due to a decline in total FTEs between the periods. Total FTEs declined to 1,689 from 1,959, which was mainly due to the completion of the integration and ongoing financial center consolidation strategy following the Astoria Merger. This was partially offset by the hiring of commercial bankers, business development officers and risk management personnel.
  • Occupancy and office operations expense decreased $722 thousand, mainly due to the consolidation of financial centers and other back-office locations. We have consolidated 28 locations over the past twelve months.
  • Information technology expense decreased $2.2 million, mainly due to the completion of the conversion of Astoria’s legacy deposit systems in the third quarter of 2018.
  • FDIC insurance and regulatory assessments decreased $2.8 million to $3.2 million in the third quarter of 2019, compared to $6.0 million in the third quarter of 2018. The decrease was a result of a reduction in FDIC deposit insurance assessments, which was mainly due to the termination of the quarterly Deposit Insurance Fund surcharge that was assessed to institutions with $10 billion or more in assets in 2018.
  • OREO expense, net, declined $1.4 million to $79 thousand for the third quarter of 2019. In the third quarter of 2019, OREO expense, net, included gain on sale of $268 thousand, which was offset by $192 thousand of write-downs and $187 thousand of operating costs.
  • Other expenses increased $3.4 million to $16.6 million, which was mainly due to higher professional fees and higher advertising and promotion expense. The increase in professional fees was mainly due to loan collection matters and higher consulting fees associated with various back-office automation projects. Increase in advertising and promotion expense was mainly due to targeted deposit gathering efforts.

5

Third quarter 2019 compared with linked quarter ended June 30, 2019
Total non-interest expense declined $20.5 million to $106.5 million in the third quarter of 2019. In the second quarter we recorded an impairment charge in connection with our financial center and back-office consolidation strategy of $14.4 million. Excluding the impairment charge, non-interest expense declined $6.1 million in the third quarter compared to the linked quarter ended June 30, 2019. Key components of the change in non-interest expense were the following:

  • Compensation and benefits decreased $1.6 million to $52.9 million in the third quarter of 2019. The decrease was mainly due to a decrease in FTEs, from 1,820 at June 30, 2019 to 1,689 at September 30, 2019.
  • Other expenses decreased $3.5 million, which was mainly due to a legal settlement expense and operating losses that were incurred in the second quarter of 2019 that did not recur in the third quarter.

Taxes
We recorded income tax expense equal to 21.0% of pre-tax income for the three months ended September 30, 2019, and the nine months ended September 30, 2019. For the three months ended June 30, 2019 and September 30, 2018, we recorded income tax expense at an estimated effective income tax rate of 21.0% and 18.5%, respectively.

6

Key Balance Sheet Highlights as of September 30, 2019

($ in thousands)As of Change % / bps
 9/30/2018 6/30/2019 9/30/2019 Y-o-Y Linked Qtr
Total assets$31,261,265  $30,237,545  $30,077,665  (3.8)% (0.5)%
Total portfolio loans, gross20,533,214  20,370,306  20,830,163  1.4  2.3 
Commercial & industrial (“C&I”) loans6,244,030  7,514,834  7,792,569  24.8  3.7 
Commercial real estate loans (including multi-family)9,284,657  9,714,037  9,977,839  7.5  2.7 
Acquisition, development and construction loans265,676  338,973  433,883  63.3  28.0 
Total commercial loans15,794,363  17,567,844  18,204,291  15.3  3.6 
Residential mortgage loans4,421,520  2,535,667  2,370,216  (46.4) (6.5)
BOLI660,279  598,880  609,720  (7.7) 1.8 
Total deposits21,456,057  20,948,464  21,579,324  0.6  3.0 
Core deposits620,448,343  19,893,875  20,296,395  (0.7) 2.0 
Municipal deposits (included in core deposits)2,019,893  1,699,824  2,234,630  10.6  31.5 
Investment securities6,685,972  5,858,865  5,047,011  (24.5) (13.9)
Total borrowings4,825,855  4,133,986  3,174,224  (34.2) (23.2)
Loans to deposits95.7% 97.2% 96.5% 80  (70)
Core deposits to total deposits95.3  95.0  94.1  (120) (90)
Investment securities to total assets21.4  19.4  16.8  (460) (260)

6 Core deposits include retail, commercial and municipal transaction, money market, savings accounts and certificates of deposits accounts, and reciprocal Certificate of Deposit Account Registry balances and exclude brokered and wholesale deposits.

Highlights in balance sheet items as of September 30, 2019 were the following:

  • C&I loans (which include traditional C&I, asset-based lending, payroll finance, warehouse lending, factored receivables, equipment financing and public sector finance loans) represented 37.4%; commercial real estate loans (which include multi-family loans) represented 47.9%; consumer and residential mortgage loans combined represented 12.6%; and acquisition, development and construction loans represented 2.1% of total portfolio loans, respectively. At September 30, 2018, C&I loans represented 30.4%; commercial real estate loans (which include multi-family loans) represented 45.2%; consumer and residential mortgage loans combined represented 23.1%; and acquisition, development and construction loans represented 1.3% of total portfolio loans, respectively. We continue to make significant progress towards our goal of a loan mix comprised of 45% for each of C&I and commercial real estate loans and 10% other loans.
  • ADC loans increased $94.9 million over the linked quarter and $168.2 million since September 30, 2018. The increase was mainly related to construction loans associated with our investments in affordable housing tax credits.
  • Total commercial loans, which include all C&I loans, commercial real estate (including multi-family) and acquisition, development and construction loans, increased by $636.4 million over the linked quarter and $2.4 billion since September 30, 2018.
  • Residential mortgage loans held in our loan portfolio were $2.4 billion at September 30, 2019, a decline of $165.5 million from the linked quarter and a decline of $2.1 billion from the same period a year ago. We sold $1.3 billion of residential mortgage loans in the first quarter of 2019 and sold $94.6 million of residential mortgage loans in the second quarter of 2019.
  • The balance of BOLI increased by $10.8 million relative to the prior quarter and was $609.7 million at September 30, 2019. The increase was due to the restructuring of the Astoria BOLI assets and recurring BOLI income.
  • Total deposits at September 30, 2019 increased $630.9 million compared to June 30, 2019, and total deposits increased $123.3 million compared to September 30, 2018.
  • Core deposits at September 30, 2019 were $20.3 billion and increased $402.5 million compared to June 30, 2019, and decreased $151.9 million compared to September 30, 2018.
  • Municipal deposits at September 30, 2019 were $2.2 billion, and increased $534.8 million relative to June 30, 2019. This increase was due to seasonal inflows. Historically, municipal deposits reach their annual peak at September 30. The balance at September 30, 2019 increased $214.7 million compared to a year ago, mainly due to new client relationships.
  • Investment securities decreased by $1.6 billion from September 30, 2018, and represented 16.8% of total assets at September 30, 2019. We have sold securities during the past twelve months to fund commercial loan growth including various loan portfolio acquisitions. We have sold securities to reduce the proportion of lower yielding assets as a percentage of total assets.
  • Total borrowings at September 30, 2019 were $3.2 billion, and declined $959.8 million relative to June 30, 2019. The sale of securities and deposit inflows allowed us to reduce borrowings.

7

Credit Quality

($ in thousands)For the three months ended Change % / bps
 9/30/2018 6/30/2019 9/30/2019 Y-o-Y Linked Qtr
Provision for loan losses$9,500  $11,500  $13,700  44.2% 19.1%
Net charge-offs4,161  5,796  13,629  227.5  135.1 
Allowance for loan losses91,365  104,664  104,735  14.6  0.1 
Non-performing loans185,222  192,647  190,966  3.1  (0.9)
Loans 30 to 89 days past due50,084  76,364  64,756  29.3  (15.2)
Annualized net charge-offs to average loans0.08% 0.12% 0.27% 19  15 
Special mention loans88,472  118,940  136,972  54.8  15.2 
Substandard loans280,358  311,418  277,975  (0.8) (10.7)
Allowance for loan losses to total loans0.44  0.51  0.50  6  (1)
Allowance for loan losses to non-performing loans49.3  54.3  54.8  550  50 

Provision for loan losses was $13.7 million for the quarter ended September 30, 2019, which approximated net charge-offs. Charge-offs of $9.6 million were related to the work-out of three ABL relationships that were classified in the second quarter of 2019. Two of those relationships were resolved in the quarter, and we are continuing to manage the work-out of the third relationship, which we anticipate will be finalized in the fourth quarter of 2019. Other charge-off activity was mainly due to equipment finance and residential mortgage loans. Allowance coverage ratios were 0.50% of total loans and 54.8% of non-performing loans at September 30, 2019. Note that due to our various acquisitions and mergers, a significant portion of our loan portfolio does not carry an allowance for loan losses, as the acquired loans were recorded at their estimated fair value on the acquisition date.

Non-performing loans decreased by $1.7 million to $191.0 million at September 30, 2019 compared to the linked quarter, and net charge-offs were 27 basis points of total loans on an annualized basis. Loans 30 to 89 days past due decreased $11.6 million from the linked quarter.

Special mention loans increased $18.0 million and substandard loans decreased $33.4 million in the third quarter of 2019 compared to the linked quarter. The increase in special mention loans was mainly due to loans in the ADC, traditional C&I, CRE and ABL categories and was partially offset by several upgrades of multi-family loans. The decline in substandard loans was mainly due to net charge-offs and a multi-family loan that was upgraded to pass.

8

Capital

($ in thousands, except share and per share data)As of Change % / bps
 9/30/2018 6/30/2019 9/30/2019 Y-o-Y Linked Qtr
Total stockholders’ equity$4,438,303  $4,459,158  $4,520,967  1.9% 1.4%
Preferred stock138,627  138,011  137,799  (0.6) (0.2)
Goodwill and other intangible assets1,745,181  1,777,748  1,772,963  1.6  (0.3)
Tangible common stockholders’ equity 7$2,554,495  $2,543,399  $2,610,205  2.2  2.6 
Common shares outstanding225,446,089  205,187,243  202,392,884  (10.2) (1.4)
Book value per common share$19.07  $21.06  $21.66  13.6  2.8 
Tangible book value per common share 711.33  12.40  12.90  13.8  4.0 
Tangible common equity to tangible assets 78.65% 8.94% 9.22% 57  28 
Estimated Tier 1 leverage ratio - Company9.68  9.57  9.77  9  20 
Estimated Tier 1 leverage ratio - Bank10.10  9.98  10.08  (2) 10 

See a reconciliation of non-GAAP financial measures beginning on page 18.

Total stockholders’ equity increased $61.8 million to $4.5 billion as of September 30, 2019 compared to June 30, 2019 and increased $82.7 million compared to September 30, 2018. For the third quarter of 2019, net income available to common stockholders of $120.5 million and an increase in accumulated other comprehensive income of $4.8 million was offset by common dividends of $14.3 million, preferred dividends of $2.2 million and common stock repurchases of $53.7 million.

Total goodwill and other intangible assets were $1.8 billion at September 30, 2019, a decrease of $4.8 million compared to June 30, 2019, which was due to amortization.

Basic and diluted weighted average common shares outstanding declined relative to the linked quarter by approximately 3.8 million shares and were 203.1 million shares and 203.6 million shares, respectively. Total common shares outstanding at September 30, 2019 were approximately 202.4 million. In the third quarter of 2019, we repurchased 2,808,046 shares of common stock at a weighted average price of $19.14 per share. Under our Board of Directors approved repurchase program, we have 5,572,535 shares remaining for repurchase at September 30, 2019, and we anticipate completing the repurchase program by the end of the first quarter of 2020.

Tangible book value per common share was $12.90 at September 30, 2019, which represented an increase of 13.8% over a year ago and an increase of 4.0% over June 30, 2019.

Conference Call Information
Sterling Bancorp will host a teleconference and webcast on Thursday, October 24, 2019 at 10:30 AM Eastern Time to discuss the Company’s results. Analysts, investors and interested parties are invited to listen to the webcast and view accompanying slides on the Company’s website at www.sterlingbancorp.com or by dialing (800) 239-9838, Conference ID #9897520. A replay of the teleconference can be accessed through the Company’s website.

About Sterling Bancorp
Sterling Bancorp, whose principal subsidiary is Sterling National Bank, specializes in the delivery of services and solutions to business owners, their families and consumers within the communities it serves 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.

9

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: business disruption; a failure to grow revenues faster than we grow expenses; a deterioration in general economic conditions, either nationally, internationally, or in our market areas, including extended declines in the real estate market and constrained financial markets; 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 Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2019. 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 Quarterly Report on Form 10-Q 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.

10

            
Sterling Bancorp and Subsidiaries 
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION 
(unaudited, in thousands, except share and per share data)
            
 9/30/2018
 12/31/2018
 9/30/2019
Assets:           
Cash and cash equivalents$533,984  $438,110  $545,603 
Investment securities6,685,972  6,667,180  5,047,011 
Loans held for sale31,042  1,565,979  4,627 
Portfolio loans:     
Commercial and industrial (“C&I”)6,244,030  6,533,386  7,792,569 
Commercial real estate (including multi-family)9,284,657  9,406,541  9,977,839 
Acquisition, development and construction265,676  267,754  433,883 
Residential mortgage4,421,520  2,705,226  2,370,216 
Consumer317,331  305,623  255,656 
Total portfolio loans, gross20,533,214  19,218,530  20,830,163 
Allowance for loan losses(91,365) (95,677) (104,735)
Total portfolio loans, net20,441,849  19,122,853  20,725,428 
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank Stock, at cost351,455  369,690  276,929 
Accrued interest receivable109,377  107,111  104,881 
Premises and equipment, net289,794  264,194  238,723 
Goodwill1,609,772  1,613,033  1,657,814 
Other intangibles135,409  129,545  115,149 
Bank owned life insurance (“BOLI”)660,279  653,995  609,720 
Other real estate owned22,735  19,377  13,006 
Other assets389,597  432,240  738,774 
Total assets$31,261,265  $31,383,307  $30,077,665 
Liabilities:     
Deposits$21,456,057  $21,214,148  $21,579,324 
FHLB borrowings4,429,110  4,838,772  2,800,907 
Other borrowings22,888  21,338  26,544 
Senior notes200,972  181,130  173,652 
Subordinated notes172,885  172,943  173,121 
Mortgage escrow funds96,952  72,891  84,595 
Other liabilities444,098  453,232  718,555 
Total liabilities26,822,962  26,954,454  25,556,698 
Stockholders’ equity:     
Preferred stock138,627  138,423  137,799 
Common stock2,299  2,299  2,299 
Additional paid-in capital3,773,164  3,776,461  3,762,046 
Treasury stock(51,973) (213,935) (501,814)
Retained earnings694,861  791,550  1,075,503 
Accumulated other comprehensive (loss) income(118,675) (65,945) 45,134 
Total stockholders’ equity4,438,303  4,428,853  4,520,967 
Total liabilities and stockholders’ equity$31,261,265  $31,383,307  $30,077,665 
      
Shares of common stock outstanding at period end225,446,089  216,227,852  202,392,884 
Book value per common share$19.07  $19.84  $21.66 
Tangible book value per common share111.33  11.78  12.90 

1 See reconciliation of non-GAAP financial measures beginning on page 18.

11

                    
Sterling Bancorp and Subsidiaries 
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data) 
                    
  For the Quarter Ended For the Nine months ended 
  9/30/2018   6/30/2019   9/30/2019   9/30/2018   9/30/2019 
Interest and dividend income:                   
Loans and loan fees$257,211  $258,283  $254,414  $746,079  $772,992 
Securities taxable29,765  24,632  21,977  85,856  74,456 
Securities non-taxable15,244  14,423  13,491  45,959  42,771 
Other earning assets6,805  5,119  5,327  17,382  16,847 
Total interest and dividend income309,025  302,457  295,209  895,276  907,066 
Interest expense:         
Deposits35,974  48,129  48,330  88,645  142,454 
Borrowings29,102  22,489  23,558  82,098  73,946 
Total interest expense65,076  70,618  71,888  170,743  216,400 
Net interest income243,949  231,839  223,321  724,533  690,666 
Provision for loan losses9,500  11,500  13,700  35,500  35,400 
Net interest income after provision for loan losses234,449  220,339  209,621  689,033  655,266 
Non-interest income:         
Deposit fees and service charges6,333  7,098  6,582  20,319  19,891 
Accounts receivable management / factoring commissions and other related fees5,595  5,794  6,049  16,292  17,265 
BOLI3,733  4,192  8,066  11,591  15,900 
Loan commissions and fees4,142  5,308  6,285  12,114  15,431 
Investment management fees1,943  2,050  1,758  5,889  5,708 
Net (loss) gain on sale of securities(56) (528) 6,882  (5,902) (6,830)
Gain on sale of residential mortgage loans        8,313 
Gain on termination of pension plan    12,097    12,097 
Gain on sale of fixed assets      11,800   
Other2,455  3,144  4,111  8,617  10,710 
Total non-interest income24,145  27,058  51,830  80,720  98,485 
Non-interest expense:         
Compensation and benefits54,823  54,473  52,850  165,662  163,313 
Stock-based compensation plans3,115  4,605  4,565  9,304  14,293 
Occupancy and office operations16,558  16,106  15,836  51,956  48,477 
Information technology10,699  9,047  8,545  32,412  26,267 
Amortization of intangible assets5,865  4,785  4,785  17,782  14,396 
FDIC insurance and regulatory assessments6,043  2,994  3,194  16,885  9,526 
Other real estate owned, net1,497  458  79  1,635  754 
Impairment related to financial centers and real estate consolidation strategy  14,398      14,398 
Charge for asset write-downs, systems integration, retention and severance      13,132  3,344 
Other13,173  20,074  16,601  39,680  53,619 
Total non-interest expense111,773  126,940  106,455  348,448  348,387 
Income before income tax expense146,821  120,457  154,996  421,305  405,364 
Income tax expense27,171  23,997  32,549  88,542  85,020 
Net income119,650  96,460  122,447  332,763  320,344 
Preferred stock dividend1,993  1,987  1,982  5,988  5,958 
Net income available to common stockholders$117,657  $94,473  $120,465  $326,775  $314,386 
Weighted average common shares:         
Basic225,088,511  206,932,114  203,090,365  224,969,121  207,685,051 
Diluted225,622,895  207,376,239  203,566,582  225,504,463  208,108,575 
Earnings per common share:         
Basic earnings per share$0.52  $0.46  $0.59  $1.45  $1.51 
Diluted earnings per share0.52  0.46  0.59  1.45  1.51 
Dividends declared per share0.07  0.07  0.07  0.21  0.21 

12

                    
Sterling Bancorp and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)
                    
 As of and for the Quarter Ended 
 9/30/2018   12/31/2018   3/31/2019   6/30/2019   9/30/2019
End of Period $ 31,261,265  $31,383,307  $29,956,607  $30,237,545  $30,077,665 
Tangible assets 129,516,084   29,640,729   28,174,074   28,459,797   28,304,702 
Securities available for sale3,843,244   3,870,563   3,847,799   3,843,112   3,061,419 
Securities held to maturity2,842,728   2,796,617   2,067,251   2,015,753   1,985,592 
Loans held for sale231,042   1,565,979   248,972   27,221   4,627 
Portfolio loans20,533,214   19,218,530   19,908,473   20,370,306   20,830,163 
Goodwill1,609,772   1,613,033   1,657,814   1,657,814   1,657,814 
Other intangibles135,409   129,545   124,719   119,934   115,149 
Deposits21,456,057   21,214,148   21,225,639   20,948,464   21,579,324 
Municipal deposits (included above)2,019,893   1,751,670   2,027,563   1,699,824   2,234,630 
Borrowings4,825,855   5,214,183   3,633,480   4,133,986   3,174,224 
Stockholders’ equity4,438,303   4,428,853   4,419,223   4,459,158   4,520,967 
Tangible common equity 12,554,495   2,547,852   2,498,472   2,543,399   2,610,205 
Quarterly Average Balances         
Total assets31,036,026   30,925,281   30,742,943   29,666,951   29,747,603 
Tangible assets 129,283,093   29,179,942   28,986,437   27,886,065   27,971,485 
Loans, gross:         
Commercial real estate (includes multi-family)9,170,117   9,341,579   9,385,420   9,486,333   9,711,619 
Acquisition, development and construction252,710   279,793   284,299   307,290   387,072 
C&I:         
Traditional C&I2,037,195   2,150,644   2,418,027   2,446,676   2,435,644 
Asset-based lending3820,060   812,903   876,218   1,070,841   1,151,793 
Payroll finance3223,636   223,061   197,809   196,160   202,771 
Warehouse lending3857,280   690,277   710,776   990,843   1,180,132 
Factored receivables3220,808   267,986   250,426   246,382   248,150 
Equipment financing31,158,945   1,147,269   1,245,051   1,285,095   1,191,944 
Public sector finance3784,260   828,153   869,829   967,218   1,087,427 
Total C&I6,102,184   6,120,293   6,568,136   7,203,215   7,497,861 
Residential mortgage4,531,922   4,336,083   3,878,991   2,635,903   2,444,101 
Consumer330,061   311,475   295,428   280,098   262,234 
Loans, total420,386,994   20,389,223   20,412,274   19,912,839   20,302,887 
Securities (taxable)4,193,910   4,133,456   3,833,690   3,453,858   3,189,027 
Securities (non-taxable)2,580,802   2,552,533   2,501,004   2,429,411   2,250,859 
Other interest earning assets638,227   635,443   667,256   580,945   611,621 
Total interest earning assets27,799,933   27,710,655   27,414,224   26,377,053   26,354,394 
Deposits:         
Non-interest bearing demand4,174,908   4,324,247   4,247,389   4,218,000   4,225,258 
Interest bearing demand4,286,278   4,082,526   4,334,266   4,399,296   4,096,744 
Savings (including mortgage escrow funds)2,678,662   2,535,098   2,460,247   2,448,132   2,375,882 
Money market7,404,208   7,880,331   7,776,501   7,538,890   7,341,822 
Certificates of deposit2,571,298   2,530,226   2,497,723   2,544,554   2,710,179 
Total deposits and mortgage escrow21,115,354   21,352,428   21,316,126   21,148,872   20,749,885 
Borrowings5,052,752   4,716,522   4,466,172   3,544,661   3,872,840 
Stockholders’ equity4,397,823   4,426,118   4,415,449   4,423,910   4,489,167 
Tangible common stockholders’ equity 12,506,198   2,542,256   2,520,595   2,504,883   2,575,199 
          

1 See a reconciliation of non-GAAP financial measures beginning on page 18.
At December 31, 2018 and March 31, 2019, loans held for sale included $1.54 billion and $222 million of residential mortgage loans, respectively; the other balances of loans held for sale are commercial syndication loans.
3 Asset-based lending, payroll finance, warehouse lending, factored receivables, equipment finance and public sector finance comprise our commercial finance loan portfolio.
4 Includes loans held for sale, but excludes allowance for loan losses.

13

                  
Sterling Bancorp and Subsidiaries 
SELECTED FINANCIAL DATA AND PERFORMANCE RATIOS
(unaudited, in thousands, except share and per share data)
                  
 As of and for the Quarter Ended 
Per Common Share Data 9/30/2018 12/31/2018  3/31/2019  6/30/2019  9/30/2019
Basic earnings per share $0.52  $
0.51  $0.47  $0.46  $0.59 
Diluted earnings per share0.52  0.51   0.47   0.46   0.59 
Adjusted diluted earnings per share, non-GAAP 10.51  0.52   0.50   0.51   0.52 
Dividends declared per common share0.07  0.07   0.07   0.07   0.07 
Book value per common share19.07  19.84   20.43   21.06   21.66 
Tangible book value per common share111.33  11.78   11.92   12.40   12.90 
Shares of common stock o/s225,446,089  216,227,852   209,560,824   205,187,243   202,392,884 
Basic weighted average common shares o/s225,088,511  222,319,682   213,157,090   206,932,114   203,090,365 
Diluted weighted average common shares o/s225,622,895  222,769,369   213,505,842   207,376,239   203,566,582 
Performance Ratios (annualized)         
Return on average assets1.50% 1.44%  1.31%  1.28%  1.61%
Return on average equity10.61  10.08   9.13   8.57   10.65 
Return on average tangible assets1.59  1.53   1.39   1.36   1.71 
Return on average tangible common equity18.63  17.56   16.00   15.13   18.56 
Return on average tangible assets, adjusted 11.55  1.58   1.48   1.51   1.50 
Return on avg. tangible common equity, adjusted 118.09  18.17   17.04   16.83   16.27 
Operating efficiency ratio, as adjusted 138.9  38.0   40.5   40.9   39.1 
Analysis of Net Interest Income         
Accretion income on acquired loans$26,574  $27,016   $25,580   $23,745   $17,973 
Yield on loans5.01% 5.07%  5.17%  5.20%  4.97%
Yield on investment securities - tax equivalent 22.87  2.92   2.99   2.92   2.85 
Yield on interest earning assets - tax equivalent 24.47  4.54   4.64   4.66   4.50 
Cost of interest bearing deposits0.84  0.97   1.09   1.14   1.16 
Cost of total deposits0.68  0.77   0.88   0.91   0.92 
Cost of borrowings2.29  2.43   2.53   2.54   2.41 
Cost of interest bearing liabilities1.17  1.28   1.39   1.38   1.40 
Net interest rate spread - tax equivalent basis 23.30  3.26   3.25   3.28   3.10 
Net interest margin - GAAP basis3.48  3.48   3.48   3.53   3.36 
Net interest margin - tax equivalent basis 23.54  3.53   3.54   3.58   3.42 
Capital         
Tier 1 leverage ratio - Company 39.68% 9.50%  9.21%  9.57%  9.77%
Tier 1 leverage ratio - Bank only 310.10  9.94   9.58   9.98   10.08 
Tier 1 risk-based capital ratio - Bank only 314.23  13.55   13.13   12.67   12.63 
Total risk-based capital ratio - Bank only 315.50  14.06   14.41   13.94   13.88 
Tangible common equity - Company 18.65  8.60   8.87   8.94   9.22 
Condensed Five Quarter Income Statement         
Interest and dividend income$309,025  $313,197   $309,400   $302,457   $295,209 
Interest expense65,076  70,326   73,894   70,618   71,888 
Net interest income243,949  242,871   235,506   231,839   223,321 
Provision for loan losses9,500  10,500   10,200   11,500   13,700 
Net interest income after provision for loan losses234,449  232,371   225,306   220,339   209,621 
Non-interest income24,145  22,475   19,597   27,058   51,830 
Non-interest expense111,773  109,921   114,992   126,940   106,455 
Income before income tax expense146,821  144,925   129,911   120,457   154,996 
Income tax expense27,171  30,434   28,474   23,997   32,549 
Net income$119,650  $114,491   $101,437   $96,460   $122,447 
          

1 See a reconciliation of non-GAAP financial measures beginning on page 18.
2 Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable Federal tax rate of 21%.
3 Regulatory capital amounts and ratios are preliminary estimates pending filing of the Company’s and Bank’s regulatory reports.

14

                   
Sterling Bancorp and Subsidiaries
ASSET QUALITY INFORMATION
(unaudited, in thousands, except share and per share data)
                   
 As of and for the Quarter Ended
Allowance for Loan Losses Roll Forward 9/30/2018  12/31/2018  3/31/2019  6/30/2019  9/30/2019
Balance, beginning of period $86,026  $91,365  $95,677  $98,960  $104,664 
Provision for loan losses9,500   10,500   10,200   11,500   13,700 
Loan charge-offs1:             
Traditional commercial & industrial(3,415)  (452)  (4,839)  (754)  (123)
Asset-based lending   (4,936)     (3,551)  (9,577)
Payroll finance(2)  (21)     (84)   
Factored receivables(18)  (23)  (32)  (27)  (14)
Equipment financing(829)  (1,060)  (1,249)  (1,335)  (2,711)
Commercial real estate(359)  (56)  (17)  (238)  (53)
Multi-family(168)  (140)         
Acquisition development & construction            (6)
Residential mortgage(114)  (694)  (1,085)  (689)  (1,984)
Consumer(458)  (335)  (443)  (467)  (241)
Total charge offs(5,363)  (7,717)  (7,665)  (7,145)  (14,709)
Recoveries of loans previously charged-off1:             
Traditional commercial & industrial235   404   139   445   136 
Payroll finance5   10   1   3   8 
Factored receivables2   7   121   4   3 
Equipment financing85   604   131   79   422 
Commercial real estate612   185   9   649   187 
Multi-family4   276   103   6   90 
Residential mortgage5   11   1   1   126 
Consumer254   32   243   162   108 
Total recoveries1,202   1,529   748   1,349   1,080 
Net loan charge-offs(4,161)  (6,188)  (6,917)  (5,796)  (13,629)
Balance, end of period$91,365   $95,677   $98,960   $104,664   $104,735 
Asset Quality Data and Ratios             
Non-performing loans (“NPLs”) non-accrual$177,876   $166,400   $166,746   $192,109   $190,011 
NPLs still accruing7,346   2,422   3,669   538   955 
Total NPLs185,222   168,822   170,415   192,647   190,966 
Other real estate owned22,735   19,377   16,502   13,628   13,006 
Non-performing assets (“NPAs”)$207,957   $188,199   $186,917   $206,275   $203,972 
Loans 30 to 89 days past due$50,084   $97,201   $64,260   $76,364   $64,756 
Net charge-offs as a % of average loans (annualized)0.08%  0.12%  0.14%  0.12%  0.27%
NPLs as a % of total loans0.90   0.88   0.86   0.95   0.92 
NPAs as a % of total assets0.67   0.60   0.62   0.68   0.68 
Allowance for loan losses as a % of NPLs49.3   56.7   58.1   54.3   54.8 
Allowance for loan losses as a % of total loans0.44   0.50   0.50   0.51   0.50 
Special mention loans$88,472   $113,180   $128,054   $118,940   $136,972 
Substandard loans280,358   266,047   288,694   311,418   277,975 
Doubtful loans2,219   59          
              

1 There were no charge-offs or recoveries on warehouse lending or public sector finance loans during the periods presented. There were no asset-based lending or acquisition development and construction recoveries during the periods presented.

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