U.S. markets closed

Sterling Bancorp announces results for the first quarter of 2020. Higher provision for credit losses resulted in diluted income per share available to common stockholders of $0.06 (as reported) and a loss of $0.02 (as adjusted).

Key Performance Highlights for the Three Months ended March 31, 2020 vs. March 31, 2019

($ in thousands except per share amounts) GAAP / As Reported   Non-GAAP / As Adjusted1
  3/31/2019   3/31/2020   Change   3/31/2019   3/31/2020   Change
Total assets $ 29,956,607     $ 30,335,036     1.3 %   $ 29,956,607     $ 30,335,036     1.3 %
Total portfolio loans, gross 19,908,473     21,709,957     9.0     19,908,473     21,709,957     9.0  
Total deposits 21,225,639     22,558,280     6.3     21,225,639     22,558,280     6.3  
Pretax pre-provision net revenue2 140,111     144,385     3.1     122,942     126,203     2.7  
Net income (loss) available to common 99,448     12,171     (87.8 )   105,902     (3,124 )   (102.9 )
Diluted EPS available to common 0.47     0.06     (87.2 )   0.50     (0.02 )   (103.4 )
Net interest margin3 3.48 %   3.16 %   (32 )   3.54 %   3.21 %   (33 )
Operating efficiency ratio 45.1 %   44.3 %   (80 )   40.5 %   42.4 %   190  
Allowance for credit losses (“ACL”) - loans $ 98,960     $ 326,444     229.9 %   $ 98,960     $ 326,444     229.9 %
ACL to portfolio loans 0.50 %   1.50 %   100     0.50 %   1.50 %   100  
Tangible book value per common share1 $ 11.92     $ 12.83     7.7     $ 11.92     $ 12.83     7.7  
  • Proactively working with clients to provide support and relief in response to the COVID-19 pandemic.
    • Modified $1.1 billion in loans (5.1% of total portfolio) for consumer and commercial clients through April 22, 2020.
    • Provided $400 thousand in commitments to our Charitable Foundation to support local charities.
    • Received over 2,000 applications for total funding of $650 million under the SBA Payroll Protection Program (“PPP”).
  • Modified our operations to promote social distancing and stay-at-home orders through reduced financial center hours and remote working for the majority of our colleagues.
  • Pretax pre-provision net revenue was $144.4 million, an increase of 3.1% relative to the same period a year ago.
  • Total commercial loans were $19.4 billion, an increase of 13.7% over a year ago.
  • Total deposits were $22.6 billion at a weighted average cost of 81 basis points. Spot cost of total deposits at quarter end was 64 basis points.
  • Cost of total funding liabilities was 0.98%. Spot cost of total funding liabilities at quarter end was 0.81%.
  • Net interest margin declined 32 basis points in the first quarter of 2020 compared to a year ago; accretion income on acquired loans was $10.7 million, a decrease of $14.9 million or 21 basis points on our net interest margin.
  • ACL - loans increased to 1.50% of portfolio loans at March 31, 2020.
  • Provision for credit losses - loans was $136.6 million and $129.6 million greater than net-charge offs for the quarter.
  • Net charge-offs on loans were $7.0 million, or 13 basis points annualized.
  • Capital levels remain strong with tangible common equity to tangible assets of 8.74% and Tier 1 leverage ratio of 9.41%.
  • Common shares outstanding at March 31, 2020 of 194.5 million, a decrease of 4.0 million in the first quarter of 2020.
  • Declared dividend per common share of $0.07.
1. Non-GAAP / as adjusted measures are defined in the non-GAAP tables beginning on page 18.
2. Pretax pre-provision net revenue represents our net interest income plus non-interest income less operating expenses before tax. With the adoption of the current expected credit loss standard (“CECL”) and the impact of the novel coronavirus (“COVID-19”), we are providing this information so readers may make comparison of our results to prior periods.
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 20 for an explanation of the operating efficiency ratio.

1

MONTEBELLO, N.Y., April 27, 2020 (GLOBE NEWSWIRE) -- Sterling Bancorp (STL) (the “Company”), the parent company of Sterling National Bank (the “Bank”), today announced results for the three months ended March 31, 2020. Net income available to common stockholders for the quarter ended March 31, 2020 was $12.2 million, or $0.06 per diluted share, compared to net income available to common stockholders of $104.7 million, or $0.52 per diluted share, for the linked quarter ended December 31, 2019, and net income available to common stockholders of $99.4 million, or $0.47 per diluted share, for the three months ended March 31, 2019.

President’s Comments
Jack Kopnisky, President and Chief Executive Officer, commented: “The COVID-19 pandemic has created significant challenges for our industry and caused substantial disruption to the global economy and the communities we serve. We began 2020 continuing to focus on executing our strategy of building a high performing regional bank that delivers superior service and value to middle market commercial and consumer clients. We are confident that our sound financial condition and response to this rapidly changing environment will allow us to emerge and continue our trajectory of growth and profitability.

“Our highest priority has been to implement our contingency plans to ensure the health and safety of our colleagues and clients, while continuing to provide our clients access to our full suite of banking services and products. Although we reduced our financial center operating hours, over 85% of our financial centers have remained open. We modified workplace access to promote social distancing and stay-at-home mandates, with over 1,000 of our employees working remotely. We are supporting our colleagues through special bonus compensation, increasing wages for in-office employees, increasing paid time-off and re-opening health insurance enrollment options.

“We are also providing relief to our clients and our communities. In the first quarter of 2020, we provided $400 thousand to the Sterling National Bank Charitable Foundation for grants and donations to various local charities. We are participating in the PPP, having received over 2,000 loan applications for $650 million in total funding requests. Through our relationship-based, single point of contact operating model, we have remained in close contact with our clients, providing working capital relief under various payment deferral programs on $1.1 billion of loan balances.

“On an adjusted basis, we incurred a net loss available to common stockholders of $3.1 million and an adjusted loss per share of two cents for the quarter. We adopted the CECL accounting standard on January 1, 2020, and our provision for credit losses was $138.3 million, which included the impact of the economic deterioration related to the COVID-19 pandemic in our forecast assumptions. As of March 31, 2020, our allowance for credit losses stood at 1.50% of total loans.

“We generated solid growth in our businesses, with total deposits of $22.6 billion and core deposit growth of $155.6 million over the linked quarter. Our loans to deposits ratio was 96.2% at quarter end. Our cost of total deposits declined eight basis points relative to the prior quarter. We anticipate the current interest rate environment and our pricing strategies will meaningfully reduce the cost of our funding liabilities, as our spot cost at quarter end was 0.81% relative to an average cost of 0.98% during the quarter.  Our commercial loan portfolio grew $412.2 million over the fourth quarter of 2019, or 8.7% on an annualized basis. Most of this growth was related to new client relationships in our commercial and industrial and commercial real estate portfolios.

“Our pretax pre-provision net revenue was $144.4 million, an increase of 3.1% over a year ago. Our net interest margin and net interest income were pressured by the significant decrease in interest rates. Our tax equivalent net interest margin excluding accretion income on acquired loans was 3.05%, and our reported tax equivalent net interest margin was 3.21%. Our net interest income was $211.8 million, which was down from $228.3 million in the linked quarter, due to a decrease in accretion income on acquired loans of $8.8 million and a decrease in yields on our floating rate loans. We anticipate that the lagged repricing of our deposits and other funding liabilities should generate stability in net interest margin.

“Our adjusted non-interest expenses were $106.3 million, an increase of $745 thousand over the linked quarter which was mainly due to seasonal fluctuations in compensation and benefits and an increase in professional fees associated with strategic initiatives and a legal settlement.  Our reported efficiency ratio was 44.3% and our adjusted operating efficiency ratio was 42.4%. Given the current operating environment and impact of the COVID-19 pandemic in the greater New York metropolitan area, we anticipate our operating expenses may increase temporarily in the second quarter of 2020.

“We have a strong capital position, as our tangible common equity to tangible assets ratio remained at 8.74% and our Tier 1 leverage ratio was 9.41%. The company repurchased 4,900,759 shares in the quarter; however, we have decided to temporarily suspend our share repurchase activity until the long-term impact of the pandemic becomes more clear. We declared our regular dividend of $0.07 on our common stock, payable on May 22, 2020 to holders of record as of May 8, 2020.

“Finally, I would like to thank our clients, shareholders, and colleagues, and in particular recognize our colleagues that operate and maintain our financial centers, call centers, and other essential operations, all of whom have exhibited extraordinary resilience through these events. The dedication and hard work of our colleagues will position us well to emerge from this as a better company.”

2

Reconciliation of GAAP Results to Adjusted Results (non-GAAP)
The Company’s GAAP net income available to common stockholders of $12.2 million, or $0.06 per diluted share, for the first quarter of 2020, included the following items:

  • a pre-tax gain of $8.4 million on the sale of available for sale securities;
  • a net pre-tax loss of $744 thousand related to early redemption of Federal Home Loan Bank (“FHLB”) borrowings and repurchase of senior notes assumed in the merger (the “Astoria Merger”) with Astoria Financial Corporation (“Astoria”);
  • the pre-tax amortization of non-compete agreements and acquired customer list intangible assets of $172 thousand; and
  • a net operating loss (“NOL”) income tax carryback benefit of $9.8 million.

Excluding the impact of these items, adjusted net loss available to common stockholders was $3.1 million, or $0.02 per diluted share, for the three months ended March 31, 2020. For purposes of calculating our adjusted results, we use our estimated annual effective income tax rate for 2020 of 17.5%.

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
  3/31/2019   12/31/2019   3/31/2020   Y-o-Y   Linked Qtr
Interest and dividend income $ 309,400      $ 295,474      $ 273,527      (11.6  %)   (7.4 )%
Interest expense 73,894      67,217      61,755      (16.4 )   (8.1 )
Net interest income $ 235,506      $ 228,257      $ 211,772      (10.1 )   (7.2 )
                   
Accretion income on acquired loans $ 25,580      $ 19,497      $ 10,686      (58.2 )%   (45.2 )%
Yield on loans 5.17  %   4.84  %   4.47  %   (70 )   (37 )
Tax equivalent yield on investment securities5 2.99      2.89      2.96      (3 )    
Tax equivalent yield on interest earning assets5 4.64      4.41      4.13      (51 )   (28 )
Cost of total deposits 0.88      0.89      0.81      (7 )   (8 )
Cost of interest bearing deposits 1.09      1.10      1.00      (9 )   (10 )
Cost of borrowings 2.53      2.38      2.49      (4 )   11   
Cost of interest bearing liabilities 1.39      1.28      1.19      (20 )   (9 )
Total cost of funding liabilities6 1.16      1.06      0.98      (18 )   (8 )
Tax equivalent net interest margin7 3.54      3.42      3.21      (33 )   (21 )
                   
Average commercial loans $ 16,237,855      $ 18,473,473      $ 18,820,094      15.9  %   1.9  %
Average loans, including loans held for sale 20,412,274      21,000,949      21,206,177      3.9      1.0   
Average cash balances 331,954      573,861      489,691      47.5      (14.7 )
Average investment securities 6,334,694      5,064,936      5,046,573      (20.3 )   (0.4 )
Average total interest earning assets 27,414,224      26,901,439      26,980,261      (1.6 )   0.3   
Average deposits and mortgage escrow 21,316,126      22,289,097      22,692,568      6.5      1.8   


5. Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable federal tax rate of 21%.
6. Includes interest bearing liabilities and non-interest bearing deposits.
7. 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

First quarter 2020 compared with first quarter 2019
Net interest income was $211.8 million for the quarter ended March 31, 2020, a decrease of $23.7 million compared to the first quarter of 2019. This was mainly due to a decrease in the yield on interest earning assets as yields on floating rate loans have declined with market rates of interest, and accretion income on acquired loans decreased by $14.9 million. Other key components of changes were the following:

  • The yield on loans was 4.47% compared to 5.17% for the three months ended March 31, 2019. The decrease in yield on loans was mainly due to the decline in accretion income on acquired loans, which was $10.7 million in the first quarter of 2020, compared to $25.6 million in the first quarter of 2019. The decrease in yield on loans was also due to the decline in market interest rates.
  • The tax equivalent yield on investment securities was 2.96% compared to 2.99% for the three months ended March 31, 2019. Average investment securities were $5.0 billion, or 18.7%, of average total interest earning assets for the first quarter of 2020 compared to $6.3 billion, or 23.1%, of average total interest earning assets for the first quarter of 2019. The decline  was mainly due to the balance sheet transition strategy we executed in 2019.
  • In the first quarter of 2020, average cash balances were $489.7 million compared to $332.0 million in the first quarter of 2019. We maintained higher cash balances in the first quarter of 2020 mainly due to higher than expected municipal deposit inflows.
  • The tax equivalent yield on interest earning assets decreased 51 basis points to 4.13%.
  • The cost of total deposits was 81 basis points for the first quarter of 2020 compared to 88 basis points for the same period a year ago.
  • The cost of borrowings was 2.49% for the first quarter of 2020 compared to 2.53% for the same period a year ago. The decrease was mainly due to the maturity and repayment of higher cost FHLB borrowings.
  • The total cost of interest bearing liabilities was 1.19% for the first quarter of 2020 compared to 1.39% for the same period a year ago.
  • Average interest bearing deposits increased by $1.3 billion due to growth from our commercial banking teams and on-line channels, and as a result average borrowings decreased $1.9 billion compared to the first quarter of 2019.
  • Total interest expense decreased by $12.1 million compared to the first quarter of 2019, due to the change in liability mix and decrease in market rates of interest.

The tax equivalent net interest margin was 3.21% for the first quarter of 2020 compared to 3.54% for the first quarter of 2019. The decrease was mainly due to the decrease in accretion income on acquired loans and changes in market rates of interest. Excluding accretion income, tax equivalent net interest margin was 3.05% for the first quarter of 2020 compared to 3.16% for the first quarter of 2019.

First quarter 2020 compared with linked quarter ended December 31, 2019
Net interest income decreased $16.5 million for the quarter ended March 31, 2020 compared to the linked quarter. The decrease was mainly due to a decrease in accretion income on acquired loans. Other key components of the changes were the following:

  • The yield on loans was 4.47% compared to 4.84% for the linked quarter. The decrease in the yield on loans was mainly due to the decline in market interest rates and the repricing of our floating rate loans. Accretion income on acquired loans decreased $8.8 million to $10.7 million for the first quarter of 2020 compared to $19.5 million in the linked quarter.
  • The average balance of commercial loans increased by $346.6 million and the average balance of residential mortgage loans declined by $132.0 million.
  • The tax equivalent yield on investment securities was 2.96% compared to 2.89% for the linked quarter. The increase in yield was mainly due to sales of lower yielding securities in the linked quarter.
  • The tax equivalent yield on interest earning assets was 4.13% compared to 4.41% in the linked quarter.
  • The cost of total deposits decreased eight basis points to 81 basis points, mainly due to improving conditions in our deposit markets and our deposit pricing strategies.
  • The total cost of borrowings increased 11 basis points to 2.49%, mainly due to the issuance of our subordinated notes in December 2019. We expect a portion of the proceeds will be used to redeem the senior notes we assumed in the Astoria Merger that mature in June 2020, which is expected to reduce our total borrowings cost.
  • Average interest bearing deposits increased by $418.6 million and average borrowings decreased by $309.5 million relative to the linked quarter. The increase in average deposits was due to growth in on-line deposits of $170.4 million, growth in municipal deposits of $168.0 million, growth of wholesale deposits of $86.3 million and growth of $28.1 million in commercial and consumer deposits.

4

  • Total interest expense decreased $5.5 million from the linked quarter due to the change in funding mix and decrease in market rates of interest.

The tax equivalent net interest margin was 3.21% in the quarter, compared to 3.42% in the linked quarter. Excluding accretion income on acquired loans, tax equivalent net interest margin was 3.05% compared to 3.13% in the linked quarter.

Non-interest Income

($ in thousands) For the three months ended   Change %
  3/31/2019   12/31/2019   3/31/2020   Y-o-Y   Linked Qtr
Total non-interest income $ 19,597     $ 32,381     $ 47,326   141.5 %   46.2 %
Net (loss) gain on sale of securities (13,184 )   (76 )   8,412   NM     NM  
Loss on termination of pension plan     (280 )     NM     NM  
Net gain on sale of residential mortgage loans 8,313           NM     NM  
Adjusted non-interest income $ 24,468     $ 32,737     $ 38,914   59.0     18.9  

First quarter 2020 compared with first quarter 2019
Adjusted non-interest income increased $14.4 million in the first quarter of 2020 to $38.9 million, compared to $24.5 million in the same quarter last year. The change was mainly due to an increase in loan commissions and fees and net gain from securities called prior to maturity. The increase in loan commissions and fees was mainly due to income received on operating leases that were acquired in the Santander equipment portfolio transaction in the fourth quarter of 2019, and gain on sale of small business equipment finance loans.  In the first quarter of 2020, securities totaling $139.8 million were called, generating a gain of $4.9 million compared to our carrying value.

In the first quarter of 2020, we realized a gain of $8.4 million on the sale of available for sale securities compared to a $13.2 million loss in the year earlier period. In the first quarter of 2019, we sold securities as part of our strategy of repositioning our balance sheet and interest earning assets to a more optimal mix. In the first quarter of 2020, we sold available for sale securities to fund commercial loan growth. We will continue to manage our securities balances to our longer-term target of 15% of earning assets over time.

In the first quarter of 2019, we sold $1.3 billion of residential mortgage loans and realized a gain of $8.3 million.

First quarter 2020 compared with linked quarter ended December 31, 2019
Adjusted non-interest income increased approximately $6.2 million from $32.7 million in the linked quarter to $38.9 million in the first quarter of 2020. The increase was due to the net gain from securities called prior to maturity and an increase in loan commissions and fees. Loan commissions and loan fees increased by $2.3 million in the first quarter of 2020, due to the same factors discussed above.

In the fourth quarter of 2019, we incurred professional and administrative fees associated with the termination of the Astoria defined benefit pension plan which reduced income by $280 thousand.

5

Non-interest Expense

($ in thousands) For the three months ended   Change % / bps
  3/31/2019   12/31/2019   3/31/2020   Y-o-Y   Linked Qtr
Compensation and benefits $ 55,990     $ 52,453     $ 54,876     (2.0 )%   4.6 %
Stock-based compensation plans 5,123     5,180     6,006     17.2     15.9  
Occupancy and office operations 16,535     15,886     15,199     (8.1 )   (4.3 )
Information technology 8,675     9,313     8,018     (7.6 )   (13.9 )
Amortization of intangible assets 4,826     4,785     4,200     (13.0 )   (12.2 )
FDIC insurance and regulatory assessments 3,338     3,134     3,206     (4.0 )   2.3  
Other real estate owned (“OREO”), net 217     (132 )   52     (76.0 )   (139.4 )
Charge for asset write-downs, systems integration, retention and severance 3,344     5,133         NM     NM  
Other expenses 16,944     19,698     23,156     36.7     17.6  
Total non-interest expense $ 114,992     $ 115,450     $ 114,713     (0.2 )   (0.6 )
Full time equivalent employees (“FTEs”) at period end 1,855     1,639     1,639     (11.6 )    
Financial centers at period end 99     82     79     (20.2 )   (3.7 )
Operating efficiency ratio, as reported8 45.1 %   44.3 %   44.3 %   (80 )    
Operating efficiency ratio, as adjusted8 40.5     39.9     42.4     190     250  
                             
See a reconciliation of non-GAAP financial measures beginning on page 18.

First quarter 2020 compared with first quarter 2019
Total non-interest expense decreased $0.3 million relative to the first quarter of 2019. Key components of the change in non-interest expense between the periods were the following:

  • Compensation and benefits decreased $1.1 million, mainly due to a decline in total FTEs between the periods. Total FTEs declined to 1,639 from 1,855, which was mainly due to our ongoing financial center consolidation strategy following the Astoria Merger. This was partially offset by the hiring of commercial bankers, business development officers, information technology, and risk management personnel.
  • Occupancy and office operations expense decreased $1.3 million, mainly due to the consolidation of financial centers and other back-office locations. We consolidated 20 financial centers in the past twelve months.
  • Information technology expense declined $657 thousand, mainly due to a decrease in data processing expenses.
  • In the first quarter of 2019, we incurred a charge for asset write-downs, systems integration, retention and severance of $3.3 million in connection with our acquisition of equipment finance and asset-based lending portfolios from Woodforest National Bank. This expense did not recur in the first quarter of 2020.
  • Other expenses increased $6.2 million to $23.2 million, which was mainly due to depreciation expense of $3.5 million recorded on operating leases acquired in the fourth quarter of 2019. The balance of the increase was mainly due to higher marketing expense associated with our deposit gathering strategies and higher professional fees associated with loan collection matters.

First quarter 2020 compared with linked quarter ended December 31, 2019
Total non-interest expense decreased $0.7 million to $114.7 million in the first quarter of 2020. In the fourth quarter of 2019, we recorded a charge for asset write-downs, systems integration, retention and severance of $5.1 million related to the equipment finance loan portfolio acquisition from Santander. Excluding the charge, non-interest expense increased $4.4 million in the first quarter compared to the linked quarter. Key components of the change in non-interest expense were the following:

  • Compensation and benefits increased $2.4 million to $54.9 million in the first quarter of 2020. The increase was mainly due to payroll taxes and benefit plan contributions, which are usually higher in the first quarter of the year compared to other quarters.
  • The increase in other expenses was associated with higher net costs related to retirement plans assumed in prior mergers and depreciation expense recorded on operating leases.

6

We anticipate that our operating expense may be impacted temporarily in the second quarter of 2020 due to COVID-19, which may result in higher compensation and benefits and costs associated with maintaining and operating our financial center locations.

Taxes
We recorded an income tax benefit of $8.0 million in the first quarter of 2020. The components of income tax benefit included income tax expense at our estimated effective tax rate for 2020 of 17.5% and discrete items as follows:

  • Income tax expense of $1.1 million; 
  • Based on provisions under the CARES Act, we recorded an NOL carryback that resulted in a net income tax benefit of $9.8 million.
  • We recorded income tax expense of $723 thousand due to vesting of stock-based compensation.

For the three months ended December 31, 2019 and March 31, 2019, we recorded income tax expense at an estimated effective income tax rate of 20.7% and 21.9%, respectively. 

Key Balance Sheet Highlights as of March 31, 2020

($ in thousands) As of   Change % / bps
  3/31/2019   12/31/2019   3/31/2020   Y-o-Y   Linked Qtr
Total assets $ 29,956,607     $ 30,586,497     $ 30,335,036     1.3 %   (0.8 )%
Total portfolio loans, gross 19,908,473     21,440,212     21,709,957     9.0     1.3  
Commercial & industrial (“C&I”) loans 7,265,187     8,232,719     8,483,474     16.8     3.0  
Commercial real estate loans (including multi-family) 9,516,013     10,295,518     10,399,566     9.3     1.0  
Acquisition, development and construction (“ADC”) loans 290,875     467,331     524,714     80.4     12.3  
Total commercial loans 17,072,075     18,995,568     19,407,754     13.7     2.2  
Residential mortgage loans 2,549,284     2,210,112     2,077,534     (18.5 )   (6.0 )
BOLI 657,504     613,848     616,648     (6.2 )   0.5  
Core deposits9 20,160,733     20,548,459     20,704,023     2.7     0.8  
Total deposits 21,225,639     22,418,658     22,558,280     6.3     0.6  
Municipal deposits (included in core deposits) 2,027,563     1,988,047     2,091,259     3.1     5.2  
Investment securities, net 5,915,050     5,075,309     4,617,012     (21.9 )   (9.0 )
Total borrowings 3,633,480     2,885,958     2,598,698     (28.5 )   (10.0 )
Loans to deposits 93.8 %   95.6 %   96.2 %   240     60  
Core deposits to total deposits 95.0     91.7     91.8     (320 )   10  
Investment securities to earning assets 22.5     18.8     17.2     (530 )   (160 )
                             
Core deposits include retail, commercial and municipal transaction, money market, savings accounts and certificates of deposit accounts, and reciprocal Certificate of Deposit Account Registry balances and exclude brokered and wholesale deposits.

Highlights in balance sheet items as of March 31, 2020 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 39.1% of total portfolio loans; commercial real estate loans (which include multi-family loans) represented 47.9% of total portfolio loans; consumer and residential mortgage loans combined represented 10.6% of total portfolio loans; and ADC loans represented 2.4% of total portfolio loans, respectively. At March 31, 2019, C&I loans represented 36.5%; commercial real estate loans represented 47.8%; consumer and residential mortgage loans combined represented 14.2%; and ADC loans represented 1.5% of total portfolio loans, respectively. We continued making 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.
  • Total commercial loans, which include all C&I loans, commercial real estate and ADC loans, increased by $412.2 million over the linked quarter and $2.3 billion since March 31, 2019. Traditional C&I loans increased $390.8 million in the linked quarter, which included draw downs on revolving lines of credit. Equipment finance loans declined $133.0 million in the first quarter of 2020, mainly due to a loan sale of $95.2 million of small business loans. The growth at March 31, 2020 compared to March 31, 2019 was mainly from loans originated by our commercial banking teams, and included the equipment finance portfolio acquired from Santander.

7

  • ADC loans increased $57.4 million over the linked quarter and $233.8 million since March 31, 2019. The increases were mainly related to construction loans associated with our investments in affordable housing tax credits.
  • Residential mortgage loans held in our loan portfolio were $2.1 billion at March 31, 2020, a decline of $132.6 million from the linked quarter and a decline of $471.8 million from the same period a year ago. The declines were mainly due to  repayments.
  • The balance of BOLI increased by $2.8 million relative to the prior quarter and was $616.6 million at March 31, 2020. BOLI declined $40.9 million in 2019, mainly due to the partial redemption of $60.5 million of legacy Astoria BOLI assets related to the BOLI restructuring executed in the third quarter of 2019.
  • Core deposits at March 31, 2020 were $20.7 billion and increased $155.6 million compared to December 31, 2019, and increased $543.3 million compared to March 31, 2019. The growth was mainly due to successful commercial and digital deposit gathering efforts and seasonal municipal deposits.
  • Total deposits at March 31, 2020 increased $139.6 million compared to December 31, 2019, and total deposits increased $1.3 billion compared to March 31, 2019.
  • Municipal deposits at March 31, 2020 were $2.1 billion, an increase of $103.2 million relative to December 31, 2019. The increase was associated with tax collections by local municipalities.
  • Investment securities decreased by $458.3 million from December 31, 2019 and $1.3 billion from March 31, 2019, and represented 17.2% of earning assets at March 31, 2020. In 2019, we sold securities to fund commercial loan growth including loan portfolio acquisitions. We also sold securities to reduce the proportion of lower yielding assets as a percentage of total assets. In the first quarter of 2020, we sold $400.2 million of lower yielding available for sale securities and realized a gain of $8.4 million. In addition, $139.8 million of securities were called prior to maturity and resulted in a gain of $4.9 million.
  • Total borrowings at March 31, 2020 were $2.6 billion, a decrease of $287.3 million relative to December 31, 2019 and $1.0 billion relative to March 31, 2019. The sale of securities and deposit inflows allowed us to reduce borrowings.

Credit Quality

($ in thousands) For the three months ended   Change % / bps
  3/31/2019   12/31/2019   3/31/2020   Y-o-Y   Linked Qtr
Provision for credit losses $ 10,200     $ 10,585     $ 138,280     1,255.7 %   1,206.4 %
Net charge-offs 6,917     9,082     6,955     0.5     (23.4 )
Allowance for credit losses (“ACL”) - loans 98,960     106,238     326,444     229.9     207.3  
Loans 30 to 89 days past due accruing 64,260     52,880     69,769     8.6     31.9  
Non-performing loans 170,415     179,161     253,750     48.9     41.6  
Annualized net charge-offs to average loans 0.14 %   0.17 %   0.13 %   (1 )   (4 )
Special mention loans 128,054     159,976     132,356     3.4     (17.3 )
Substandard loans 288,694     295,428     402,393     39.4     36.2  
ACL - loans to total loans 0.50     0.50     1.50     100     100  
ACL - loans to non-performing loans 58.1     59.3     128.6     7,050     6,930  

Our ACL balance includes the provision for credit losses and transition adjustment recorded related to the adoption of CECL. Provision for credit losses was $138.3 million, which included $1.7 million for held to maturity securities. Provision for credit losses on portfolio loans was $136.6 million, which was $129.6 million greater than net charge-offs for the period. The provision for credit losses was based on our reasonable and supportable forecasts of future macroeconomic scenarios used in the estimation of expected credit losses, which was significantly impacted by the occurrence of COVID-19.

Net charge-offs of $7.0 million mainly included charge-offs on smaller balance equipment finance loans and the work-out of two asset-based lending relationships and one commercial real estate relationship. Net charge-offs were 13 basis points of total loans on an annualized basis.

ACL - loans increased to $326.4 million, or 1.50% of total portfolio loans and 128.6% of non-performing loans, at March 31, 2020.

Non-performing loans increased by $74.6 million to $253.8 million at March 31, 2020 compared to the linked quarter. The increase was mainly due to relationships in asset-based lending, CRE, ADC and small business equipment finance loans. Loans 30 to 89 days past due increased by $16.9 million.

8

In connection with implementing the CECL accounting standard, we established an ACL on held to maturity (“HTM”) securities of $796 thousand which was increased to $2.5 million at March 31, 2020, which is applied to our corporate, state and municipal securities. Upon implementing the CECL accounting standard we also increased our ACL for loan commitments to $6.7 million.  

Capital

($ in thousands, except share and per share data) As of   Change % / bps
  3/31/2019   12/31/2019   3/31/2020   Y-o-Y   Linked Qtr
Total stockholders’ equity $ 4,419,223     $ 4,530,113     $ 4,422,424     0.1 %   (2.4 )%
Preferred stock 138,218     137,581     137,363     (0.6 )   (0.2 )
Goodwill and other intangible assets 1,782,533     1,793,846     1,789,646     0.4     (0.2 )
Tangible common stockholders’ equity 10 $ 2,498,472     $ 2,598,686     $ 2,495,415     (0.1 )   (4.0 )
Common shares outstanding 209,560,824     198,455,324     194,460,656     (7.2 )   (2.0 )
Book value per common share $ 20.43     $ 22.13     $ 22.04     7.9     (0.4 )
Tangible book value per common share 10 11.92     13.09     12.83     7.7     (2.0 )
Tangible common equity to tangible assets 10 8.87 %   9.03 %   8.74 %   (13 )   (29 )
Estimated Tier 1 leverage ratio - Company 9.21     9.55     9.41     20     (14 )
Est. Tier 1 leverage ratio - Company fully implemented         9.06     N/A     N/A  
Estimated Tier 1 leverage ratio - Bank 9.58     10.11     9.99     41     (12 )
Est. Tier 1 leverage ratio - Bank fully implemented         9.65     N/A     N/A  
                   
10 See a reconciliation of non-GAAP financial measures beginning on page 18.

Total stockholders’ equity decreased $107.7 million to $4.4 billion as of March 31, 2020 compared to December 31, 2019. For the first quarter of 2020, net income available to common stockholders of $12.2 million was offset by a decrease in accumulated other comprehensive income of $27.4 million, common dividends of $13.8 million, preferred dividends of $2.2 million, common stock repurchases of $81.0 million and the day one effect of the adoption of the CECL accounting standard of $54.3 million. 

We elected the five-year transition provision effective March 31, 2020 to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period. The March 31, 2020 fully implemented ratio data reflects the full impact of CECL and excludes the benefits of phase-ins. 

Total goodwill and other intangible assets were $1.8 billion at March 31, 2020, a decrease of $4.2 million compared to December 31, 2019, which was due to amortization.

Basic and diluted weighted average common shares outstanding declined relative to the linked quarter by approximately 3.4 million shares and were 196.3 million shares and 196.7 million shares, respectively. Total common shares outstanding at March 31, 2020 were approximately 194.5 million. In the first quarter of 2020, we repurchased 4,900,759 shares of common stock at a weighted average price of $16.53 per share. We also granted 1,181,673 shares under our stock-based compensation plans in the quarter.

Tangible book value per common share was $12.83 at March 31, 2020, which represented an increase of 7.7% compared to  a year ago.

Conference Call Information
Sterling Bancorp will host a teleconference and webcast on Tuesday, April 28, 2020 at 8:00 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 #1395665. A replay of the teleconference can be accessed through the Company’s website.

9

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.

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,revenues, expenses, tax rates, capital and liquidity levels and ratios, asset levels, asset quality, financial position,  plans, operations and prospects. Forward-looking statements involve certain risks, , including the effects of the novel coronavirus disease (COVID-19), which include, but are not limited to, the federal, state and local government actions and reactions to COVID-19, the health of our staff and that of our clients, the continuity of our, our clients’ and our third party providers’ operations, the increased likelihood of cyber and payment fraud risk, the continued ability of our borrowers to repay their loans throughout and following the pandemic, the potential decline in collateral values resulting from COVID-19 and its effects, and the resulting impact upon our financial position, results of operations, cash flows and our outlook, including the effects of the novel coronavirus disease (COVID-19), which include, but are not limited to, the  federal, state and local government actions and reactions to COVID-19,  the health of our staff and that of our clients, the continuity of our clients’ and our third party providers’ operations, the increased likelihood of cyber and payment fraud risk, the continued ability of our borrowers to repay their loans throughout and following the pandemic, the potential decline in collateral values resulting from COVID-19 and its effects, and the resulting impact upon our financial position, results of operations, cash flows and our outlook as well as 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 months ended March 31, 2020. 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)

           
  3/31/2019   12/31/2019   3/31/2020
Assets:          
Cash and cash equivalents $ 314,255     $ 329,151     $ 348,636  
Investment securities, net 5,915,050     5,075,309     4,614,513  
Loans held for sale 248,972     8,125     8,124  
Portfolio loans:          
Commercial and industrial (“C&I”) 7,265,187     8,232,719     8,483,474  
Commercial real estate (including multi-family) 9,516,013     10,295,518     10,399,566  
ADC 290,875     467,331     524,714  
Residential mortgage 2,549,284     2,210,112     2,077,534  
Consumer 287,114     234,532     224,669  
Total portfolio loans, gross 19,908,473     21,440,212     21,709,957  
Allowance for credit losses (98,960 )   (106,238 )   (326,444 )
Total portfolio loans, net 19,809,513     21,333,974     21,383,513  
FHLB and Federal Reserve Bank Stock, at cost 298,455     251,805     240,722  
Accrued interest receivable 115,764     100,312     102,101  
Premises and equipment, net 262,744     227,070     228,526  
Goodwill 1,657,814     1,683,482     1,683,482  
Other intangibles 124,719     110,364     106,164  
BOLI 657,504     613,848     616,648  
Other real estate owned 16,502     12,189     11,815  
Other assets 535,315     840,868     990,792  
Total assets $ 29,956,607     $ 30,586,497     $ 30,335,036  
Liabilities:          
Deposits $ 21,225,639     $ 22,418,658     $ 22,558,280  
FHLB borrowings 3,259,507     2,245,653     1,955,451  
Other borrowings 27,020     22,678     27,562  
Senior notes 173,952     173,504     171,422  
Subordinated notes - Company     270,941     271,019  
Subordinated notes - Bank 173,001     173,182     173,244  
Mortgage escrow funds 102,036     58,316     96,491  
Other liabilities 576,229     693,452     659,143  
Total liabilities 25,537,384     26,056,384     25,912,612  
Stockholders’ equity:          
Preferred stock 138,218     137,581     137,363  
Common stock 2,299     2,299     2,299  
Additional paid-in capital 3,751,835     3,766,716     3,749,508  
Treasury stock (355,357 )   (583,408 )   (660,069 )
Retained earnings 888,838     1,166,709     1,125,702  
Accumulated other comprehensive (loss) income (6,610 )   40,216     67,621  
Total stockholders’ equity 4,419,223     4,530,113     4,422,424  
Total liabilities and stockholders’ equity $ 29,956,607     $ 30,586,497     $ 30,335,036  
           
Shares of common stock outstanding at period end 209,560,824     198,455,324     194,460,656  
Book value per common share $ 20.43     $ 22.13     $ 22.04  
Tangible book value per common share1 11.92     13.09     12.83  
1 See reconciliation of non-GAAP financial measures beginning on page 19.
 


11

Sterling Bancorp and Subsidiaries                                                                                                                                  
CONSOLIDATED INCOME STATEMENTS
(unaudited, in thousands, except share and per share data)

   
   For the Quarter Ended
  3/31/2019   12/31/2019   3/31/2020
Interest and dividend income:          
Loans and loan fees $ 260,295     $ 256,377     $ 235,439  
Securities taxable 27,847     20,367     20,629  
Securities non-taxable 14,857     13,031     12,997  
Other earning assets 6,401     5,699     4,462  
Total interest and dividend income 309,400     295,474     273,527  
Interest expense:          
Deposits 45,995     49,907     45,781  
Borrowings 27,899     17,310     15,974  
Total interest expense 73,894     67,217     61,755  
Net interest income 235,506     228,257     211,772  
Provision for credit losses 10,200     10,585     138,280  
Net interest income after provision for credit losses 225,306     217,672     73,492  
Non-interest income:          
Deposit fees and service charges 6,212     6,506     6,622  
Accounts receivable management / factoring commissions and other related fees 5,423     6,572     5,538  
BOLI 3,641     4,770     5,018  
Loan commissions and fees 3,838     8,698     11,024  
Investment management fees 1,900     1,597     1,847  
Net (loss) gain on sale of securities (13,184 )   (76 )   8,412  
Net gain on security calls         4,880  
Gain on sale of residential mortgage loans 8,313          
Loss on termination of pension plan     (280 )    
Other 3,454     4,594     3,985  
Total non-interest income 19,597     32,381     47,326  
Non-interest expense:          
Compensation and benefits 55,990     52,453     54,876  
Stock-based compensation plans 5,123     5,180     6,006  
Occupancy and office operations 16,535     15,886     15,199  
Information technology 8,675     9,313     8,018  
Amortization of intangible assets 4,826     4,785     4,200  
FDIC insurance and regulatory assessments 3,338     3,134     3,206  
Other real estate owned, net 217     (132 )   52  
Charge for asset write-downs, systems integration, retention and severance 3,344     5,133      
Other 16,944     19,698     23,156  
Total non-interest expense 114,992     115,450     114,713  
Income before income tax expense (benefit) 129,911     134,603     6,105  
Income tax expense (benefit) 28,474     27,905     (8,042 )
Net income 101,437     106,698     14,147  
Preferred stock dividend 1,989     1,976     1,976  
Net income available to common stockholders $ 99,448     $ 104,722     $ 12,171  
Weighted average common shares:          
Basic 213,157,090     199,719,747     196,344,061  
Diluted 213,505,842     200,252,542     196,709,038  
Earnings per common share:          
Basic earnings per share $ 0.47     $ 0.52     $ 0.06  
Diluted earnings per share 0.47     0.52     0.06  
Dividends declared per share 0.07     0.07     0.07  


12

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 3/31/2019   6/30/2019   9/30/2019   12/31/2019   3/31/2020
Total assets $ 29,956,607     $ 30,237,545     $ 30,077,665     $ 30,586,497     $ 30,335,036  
Tangible assets 1 28,174,074     28,459,797     28,304,702     28,792,651     28,545,390  
Securities available for sale 3,847,799     3,843,112     3,061,419     3,095,648     2,660,835  
Securities held to maturity, net 2,067,251     2,015,753     1,985,592     1,979,661     1,956,177  
Loans held for sale2 248,972     27,221     4,627     8,125     8,124  
Portfolio loans 19,908,473     20,370,306     20,830,163     21,440,212     21,709,957  
Goodwill 1,657,814     1,657,814     1,657,814     1,683,482     1,683,482  
Other intangibles 124,719     119,934     115,149     110,364     106,164  
Deposits 21,225,639     20,948,464     21,579,324     22,418,658     22,558,280  
Municipal deposits (included above) 2,027,563     1,699,824     2,234,630     1,988,047     2,091,259  
Borrowings 3,633,480     4,133,986     3,174,224     2,885,958     2,598,698  
Stockholders’ equity 4,419,223     4,459,158     4,520,967     4,530,113     4,422,424  
Tangible common equity 1 2,498,472     2,543,399     2,610,205     2,598,686     2,495,415  
Quarterly Average Balances                  
Total assets 30,742,943     29,666,951     29,747,603     30,349,691     30,484,433  
Tangible assets 1 28,986,437     27,886,066     27,971,485     28,569,589     28,692,033  
Loans, gross:                  
Commercial real estate (includes multi-family) 9,385,420     9,486,333     9,711,619     10,061,625     10,288,977  
ADC 284,299     307,290     387,072     459,372     497,009  
C&I:                  
Traditional C&I 2,418,027     2,446,676     2,435,644     2,399,901     2,470,570  
Asset-based lending3 876,218     1,070,841     1,151,793     1,137,719     1,107,542  
Payroll finance3 197,809     196,160     202,771     228,501     217,952  
Warehouse lending3 710,776     990,843     1,180,132     1,307,645     1,089,576  
Factored receivables3 250,426     246,382     248,150     258,892     229,126  
Equipment financing3 1,245,051     1,285,095     1,191,944     1,430,715     1,703,016  
Public sector finance3 869,829     967,218     1,087,427     1,189,103     1,216,326  
Total C&I 6,568,136     7,203,215     7,497,861     7,952,476     8,034,108  
Residential mortgage 3,878,991     2,635,903     2,444,101     2,284,419     2,152,440  
Consumer 295,428     280,098     262,234     243,057     233,643  
Loans, total4 20,412,274     19,912,839     20,302,887     21,000,949     21,206,177  
Securities (taxable) 3,833,690     3,453,858     3,189,027     2,905,545     2,883,367  
Securities (non-taxable) 2,501,004     2,429,411     2,250,859     2,159,391     2,163,206  
Other interest earning assets 667,256     580,945     611,621     835,554     727,511  
Total interest earning assets 27,414,224     26,377,053     26,354,394     26,901,439     26,980,261  
Deposits:                  
Non-interest bearing demand 4,247,389     4,218,000     4,225,258     4,361,642     4,346,518  
Interest bearing demand 4,334,266     4,399,296     4,096,744     4,359,767     4,616,658  
Savings (including mortgage escrow funds) 2,460,247     2,448,132     2,375,882     2,614,523     2,800,021  
Money market 7,776,501     7,538,890     7,341,822     7,681,491     7,691,381  
Certificates of deposit 2,497,723     2,544,554     2,710,179     3,271,674     3,237,990  
Total deposits and mortgage escrow 21,316,126     21,148,872     20,749,885     22,289,097     22,692,568  
Borrowings 4,466,172     3,544,661     3,872,840     2,890,407     2,580,922  
Stockholders’ equity 4,415,449     4,423,910     4,489,167     4,524,417     4,506,537  
Tangible common stockholders’ equity 1 2,520,595     2,504,883     2,575,199     2,606,617     2,576,558  
                   
1 See a reconciliation of non-GAAP financial measures beginning on page 19.
2 At March 31, 2019, loans held for sale included $222 million of residential mortgage loans. 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 credit 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 3/31/2019   6/30/2019   9/30/2019   12/31/2019   3/31/2020
Basic earnings per share $ 0.47     $ 0.46     $ 0.59     $ 0.52     $ 0.06  
Diluted earnings per share 0.47     0.46     0.59     0.52     0.06  
Adjusted diluted earnings per share, non-GAAP 1 0.50     0.51     0.52     0.54     (0.02 )
Dividends declared per common share 0.07     0.07     0.07     0.07     0.07  
Book value per common share 20.43     21.06     21.66     22.13     22.04  
Tangible book value per common share1 11.92     12.40     12.90     13.09     12.83  
Shares of common stock o/s 209,560,824     205,187,243     202,392,884     198,455,324     194,460,656  
Basic weighted average common shares o/s 213,157,090     206,932,114     203,090,365     199,719,747     196,344,061  
Diluted weighted average common shares o/s 213,505,842     207,376,239     203,566,582     200,252,542     196,709,038  
Performance Ratios (annualized)                  
Return on average assets 1.31 %   1.28 %   1.61 %   1.37 %   0.16 %
Return on average equity 9.13     8.57     10.65     9.18     1.09  
Return on average tangible assets 1.39     1.36     1.71     1.45     0.17  
Return on average tangible common equity 16.00     15.13     18.56     15.94     1.90  
Return on average tangible assets, adjusted 1 1.48     1.51     1.50     1.51     (0.04 )
Return on avg. tangible common equity, adjusted 1 17.04     16.83     16.27     16.57     (0.49 )
Operating efficiency ratio, as adjusted 1 40.5     40.9     39.1     39.9     42.4  
Analysis of Net Interest Income                  
Accretion income on acquired loans $ 25,580     $ 23,745     $ 17,973     $ 19,497     $ 10,686  
Yield on loans 5.17 %   5.20 %   4.97 %   4.84 %   4.47 %
Yield on investment securities - tax equivalent 2 2.99     2.92     2.85     2.89     2.96  
Yield on interest earning assets - tax equivalent 2 4.64     4.66     4.50     4.41     4.13  
Cost of interest bearing deposits 1.09     1.14     1.16     1.10     1.00  
Cost of total deposits 0.88     0.91     0.92     0.89     0.81  
Cost of borrowings 2.53     2.54     2.41     2.38     2.49  
Cost of interest bearing liabilities 1.39     1.38     1.40     1.28     1.19  
Net interest rate spread - tax equivalent basis 2 3.25     3.28     3.10     3.13     2.94  
Net interest margin - GAAP basis 3.48     3.53     3.36     3.37     3.16  
Net interest margin - tax equivalent basis 2 3.54     3.58     3.42     3.42     3.21  
Capital                  
Tier 1 leverage ratio - Company 3 9.21 %   9.57 %   9.78 %   9.55 %   9.41 %
Tier 1 leverage ratio - Bank only 3 9.58     9.98     10.08     10.11     9.99  
Tier 1 risk-based capital ratio - Bank only 3 13.10     12.67     12.74     12.32     12.27  
Total risk-based capital ratio - Bank only 3 14.39     13.94     13.99     13.63     13.89  
Tangible common equity - Company 1 8.87     8.94     9.22     9.03     8.74  
Condensed Five Quarter Income Statement                  
Interest and dividend income $ 309,400     $ 302,457     $ 295,209     $ 295,474     $ 273,527  
Interest expense 73,894     70,618     71,888     67,217     61,755  
Net interest income 235,506     231,839     223,321     228,257     211,772  
Provision for credit losses 10,200     11,500     13,700     10,585     138,280  
Net interest income after provision for credit losses 225,306     220,339     209,621     217,672     73,492  
Non-interest income 19,597     27,058     51,830     32,381     47,326  
Non-interest expense 114,992     126,940     106,455     115,450     114,713  
Income before income tax expense 129,911     120,457     154,996     134,603     6,105  
Income tax expense (benefit)