Net Income of $10.3 Million or $0.14 per share HOUSTON, July 22
HOUSTON, July 22 /PRNewswire-FirstCall/ -- Sterling Bancshares, Inc.
(Nasdaq: SBIB) today reported net income of $10.3 million, or $0.14 per
diluted share for the second quarter ended June 30, 2008, compared to the
$13.1 million or $0.18 per diluted share earned for the second quarter of
2007.
Net income for the six months ended June 30, 2008 was $21.9 million, or
$0.30 per diluted share compared with $25.0 million or $0.34 per diluted share
for the same period in 2007.
"We recorded encouraging core operating results in the second quarter
despite operating in an increasingly challenging nationwide banking
environment," commented J. Downey Bridgwater, Sterling's Chairman, President
and Chief Executive Officer. "The combination of growth in loans and deposits,
a stable net interest margin, noninterest income growth and a reduction in our
efficiency ratio on both a linked quarter and a year over year basis
demonstrates the strength and position of our franchise. Unfortunately, our
results were negatively impacted at the end of the quarter by one large credit
relationship, which accounted for $3.7 million in additional provision for the
quarter and $20 million in additional nonperforming loans. This credit is an
extremely unusual situation for us and is not representative of any systemic
issues within the overall loan portfolio."
During the second quarter of 2008, we recorded a total provision for
credit losses of $8.2 million, an increase of $4.0 million over the prior
quarter. This increase in provision was primarily related to one commercial
credit relationship totaling $20 million, which has also driven the increase
in our nonperforming loans. The Company has committed to fund additional
proceeds of $9.2 million to this borrower in July increasing the Company's
overall exposure to $29.2 million in the third quarter. The Company estimates
approximately $600 thousand of provision will be recorded in the third quarter
of 2008 related to this increased exposure. The borrower is an energy related
business and the relationship is part of a shared national credit totaling
approximately $2.4 billion that includes 39 of the largest and most
sophisticated financial institutions in our industry. The borrower has
indicated that it may file for Chapter 11 bankruptcy protection. As a result,
we have recorded approximately $3.7 million of additional provision in the
second quarter and we will reevaluate the provision after a full review of the
relationship by the lead bank and their consultants. It is our belief that the
company has significant, valuable energy and fixed assets, which should help
to mitigate any significant future losses. Our energy portfolio represents
approximately ten percent of our overall loan portfolio. Our remaining energy
loans are currently performing as agreed and we do not anticipate any further
issues in the portfolio. The energy sector continues to be very healthy and
this single problem relationship is not indicative of any issues within this
sector or our energy portfolio.
The allowance for credit losses at June 30, 2008 was $42.6 million and
represented 1.16% of total period-end loans. The Company provided $8.2
million for credit losses in the second quarter of 2008 compared with $4.2
million for the first quarter of 2008. Net charge-offs for the second quarter
of 2008 were $2.2 million or 0.24% of average total loans, compared to $2.9
million or 0.34% of average total loans, for the first quarter of 2008. Net
charge-offs for the six month period ended June 30, 2008 were $5.1 million or
0.29% of average total loans, up from $1.4 million or 0.09% for the same
period in 2007.
Period-end total loans held for investment increased $84.5 million or
2.4% on a linked-quarter basis to $3.5 billion at June 30, 2008 and up $292
million or 9.0% since June 30, 2007. Average loans held for investment were
$3.5 billion for the second quarter of 2008, up $133 million or 3.9% on a
linked-quarter basis and up $302 million or 9.3% from the second quarter of
2007.
Period-end total deposits increased $49.4 million to $3.7 billion at June
30, 2008, up 1.4% on a linked-quarter basis and down $36.5 million or 1.0%
compared to June 30, 2007. Average total deposits for the second quarter of
2008 were down $39.4 million or 1.1% on a linked-quarter basis and down $52.3
million or 1.4% from the second quarter of 2007.
Tax-equivalent net interest income for the second quarter of 2008 was
$50.6 million, up $2.3 million or 4.7% linked-quarter and up $3.5 million over
the second quarter of 2007. Tax-equivalent net interest margin was 4.66% for
the second quarter of 2008, which was consistent with the first quarter of
2008. This increase in net interest income was due in part, to a decrease in
interest expense on interest-bearing deposits resulting from a decline in
market interest rates and the strategic decision to utilize lower cost
borrowings.
Noninterest income increased $3.4 million in the second quarter of 2008 as
compared to the second quarter of 2007 and $6.1 million for the six months
ended June 30, 2008 compared to the same period in 2007. Customer service
fees increased $717 thousand for the second quarter of 2008 compared to the
second quarter of 2007 and $1.1 million for the six months ended June 30, 2008
compared to the same period in 2007 due primarily to an increase in account
analysis fees. Wealth management fees increased $1.7 million for the second
quarter of 2008 compared to the second quarter of 2007 and $3.4 million for
the six months ended June 30, 2008 compared to the same period in 2007 due to
the addition of MBM Advisors in June 2007.
Noninterest expense for the second quarter of 2008 was $37.7 million, up
$320 thousand on a linked-quarter basis. The Company acquired ten banking
centers in February 2008 resulting in additional noninterest expense of
approximately $375 thousand linked-quarter. Noninterest expense increased
$3.4 million for the second quarter of 2008 as compared with the second
quarter of 2007 and $6.9 million for the six month period ended June 30, 2008
compared to the same period in 2007. Since the second quarter of 2007, the
Company has completed three acquisitions, which resulted in additional
noninterest expense of $2.5 million for the second quarter of 2008 compared to
the same quarter in 2007, and $5.1 million for the six month period ended June
30, 2008 compared to the same period in 2007. The Company's efficiency ratio
was 61.31% for the second quarter of 2008 compared to 62.34% for the first
quarter of 2008 and 61.76% for the second quarter of 2007.
As of June 30, 2008, Sterling had total assets of $4.9 billion, total
loans of $3.7 billion and total deposits of $3.7 billion. Shareholders'
equity of $495 million at June 30, 2008 was 10.1% of total assets. Book value
per common share at period-end was $6.76.
Conference Call
Management of Sterling will host a conference call for investors and
analysts that will be broadcast live via telephone and over the Internet on
Tuesday, July 22, 2008 at 11:00 a.m. Eastern Time. To participate, visit the
Investor Relations section of the Company's web site at
http://www.banksterling.com or call (612) 332-0718. An audio archive of the
call will also be available on the web site beginning Wednesday, July 23,
2008.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve risks and uncertainties and are based on beliefs and
assumptions of management at the time that this release was prepared. The
Company does not assume any obligation to update the forward-looking
statements. There are several factors, many beyond the Company's control,
that could cause results to differ significantly from expectations including:
adverse changes in the loan portfolio and the resulting credit risk-related
losses and expenses; potential inadequacy of the allowance for credit losses;
the ability to maintain or improve origination volumes; competitive influences
on product pricing; and the ability to integrate acquisitions and realize
expected cost savings and revenue enhancements. Additional factors can be
found in the Company's 2007 Annual Report on Form 10-K filed with the
Securities and Exchange Commission and available at the Securities and
Exchange Commission's web site (http://www.sec.gov).
About Sterling Bancshares
Sterling Bancshares, Inc. is a Houston-based bank holding company with
total assets of $4.9 billion, which operates 59 banking centers in the greater
metropolitan areas of Houston, San Antonio, Dallas and Fort Worth, Texas. The
Company's common stock is traded through the NASDAQ Global Select Market under
the symbol "SBIB". For more information on Sterling Bancshares, please visit
the Company's web site at http://www.banksterling.com.
For More Information Contact:
J. Downey Bridgwater, Chairman, President
& Chief Executive Officer, (713) 507-2670
Zach L. Wasson, Executive Vice President &
Chief Financial Officer, (713) 507-1297
-Tables to follow-
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands, except for per share data)
Page 4
Quarter Ended Year-to-date
Jun. 30, Mar. 31, Jun. 30,
2008 2008 2007 20082007
Profitability
Net Income $10,307 $11,609 $13,098 $21,916 $25,021
Earnings per common share (1)
Basic $0.14$0.16$0.18$0.30$0.35
Diluted$0.14$0.16$0.18$0.30$0.34
Return on average common
equity (2) 8.26%9.43% 11.66%8.84% 11.63%
Return on average assets (2) 0.86%1.01%1.21%0.93%1.19%
Net interest margin (3) 4.66%4.67%4.81%4.67%4.86%
Efficiency Ratio (4):
Consolidated61.31% 62.34% 61.76% 61.81% 62.16%
Sterling Bank 59.49% 60.18% 59.31% 59.83% 59.88%
Liquidity and Capital Ratios
Average loans to average
deposits 102.02% 96.75% 91.08% 99.37% 92.09%
Period-end stockholders'
equity to total assets 10.07% 10.46% 10.08% 10.07% 10.08%
Average stockholders' equity
to average assets 10.38% 10.75% 10.38% 10.56% 10.27%
Period-end tangible capital
to total tangible assets6.49%6.76%6.20%6.49%6.20%
Tier 1 capital to
risk-weighted assets9.14%8.72%8.89%9.14%8.89%
Total capital to
risk-weighted assets 11.70% 10.72% 10.91% 11.70% 10.91%
Tier 1 leverage ratio (Tier 1
capital to average assets) 8.20%8.46%8.41%8.20%8.41%
Other Data
Shares used in computing
earnings per common share
Basic shares 73,137 73,152 73,295 73,144 72,196
Diluted shares73,419 73,405 73,783 73,412 72,702
End of period common shares
outstanding73,160 73,115 73,057 73,160 73,057
Book value per common share
at period-end
Total $6.76$6.79$6.09$6.76$6.09
Tangible $4.19$4.21$3.59$4.19$3.59
Cash dividends paid per
common share $0.055 $0.055 $0.0525 $0.110 $0.105
Common stock dividend payout
ratio 39.06% 34.69% 29.35% 36.74% 30.26%
Full-time equivalent
employees 1,1261,1031,0481,1261,048
Number of banking centers 59 59 49 59 49
STERLING BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands)
Page 5
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
2008 2008 2007 2007 2007
ASSETS
Cash and cash
equivalents $142,964 $135,624 $133,670 $110,876 $161,482
Trading assets - - - -398
Available-for-sale
securities, at fair
value568,329531,572476,690464,789433,325
Held-to-maturity
securities, at
amortized cost 175,635176,902180,086176,847177,075
Loans held for sale 112,614 90,274 78,447 54,699 71,380
Loans held for
investment 3,542,994 3,458,476 3,339,837 3,319,652 3,251,164
Total loans 3,655,608 3,548,750 3,418,284 3,374,351 3,322,544
Allowance for
loan losses (41,651) (35,681) (34,446) (34,225) (33,450)
Loans, net3,613,957 3,513,069 3,383,838 3,340,126 3,289,094
Premises and
equipment, net40,311 40,027 27,905 26,624 26,408
Real estate acquired
by foreclosure 4,293 4,042 3,683 2,713 3,064
Goodwill 173,104172,686168,815166,130165,711
Core deposits and
other intangibles,
net 15,031 15,617 15,971 16,562 17,172
Accrued interest
receivable 18,712 18,558 19,701 20,520 19,811
Other assets 157,118137,364125,550114,990119,254
TOTAL ASSETS $4,909,454 $4,745,461 $4,535,909 $4,440,177 $4,412,794
LIABILITIES AND
SHAREHOLDERS'
EQUITY
LIABILITIES:
Deposits:
Noninterest-
bearing demand $1,135,296 $1,100,919 $1,092,210 $1,082,037 $1,144,049
Interest-bearing
demand 1,409,220 1,464,937 1,403,227 1,340,746 1,332,469
Certificates and
other time 1,149,819 1,079,061 1,178,274 1,238,980 1,254,338
Total deposits 3,694,335 3,644,917 3,673,711 3,661,763 3,730,856
Other borrowed funds 521,395425,929197,147136,555 57,840
Subordinated debt 73,816 49,142 48,694 46,986 45,408
Junior subordinated
debt 82,734 82,734 82,734 82,734 82,734
Accrued interest
payable and other
liabilities 42,640 46,369 53,364 49,104 50,977
Total
liabilities 4,414,920 4,249,091 4,055,650 3,977,142 3,967,815
COMMITMENTS AND
CONTINGENCIES - - - - -
SHAREHOLDERS' EQUITY
Common stock 75,028 74,983 74,926 74,794 74,724
Capital surplus 112,402111,267110,367108,964108,238
Retained earnings 323,765317,485309,903300,375289,629
Treasury stock(21,399) (21,399) (20,493) (20,493) (19,413)
Accumulated other
comprehensive
income/(loss),
net of tax 4,738 14,034 5,556 (605)(8,199)
Total
shareholders'
equity 494,534496,370480,259463,035444,979
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY$4,909,454 $4,745,461 $4,535,909 $4,440,177 $4,412,794
STERLING BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(dollars in thousands, except for per share data)
Page 6
Quarter Ended
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
2008 2008 2007 2007 2007
Interest income:
Loans, including fees $60,082 $63,052 $66,229 $67,033 $65,489
Securities:
Taxable7,4086,5496,5226,1115,755
Non-taxable 908 908 897 867 853
Trading assets 22 21 87 814
Federal funds sold 27 39 117 58 274
Deposits in financial
institutions53297
Total interest income 68,452 70,572 73,854 74,159 72,382
Interest expense:
Demand and savings deposits 3,8895,6157,5358,0387,605
Certificates and other
time deposits 8,662 11,977 14,610 14,809 13,922
Other borrowed funds 3,4092,3521,7081,3691,257
Subordinated debt 8641,0321,1621,1751,162
Junior subordinated debt 1,3841,6001,6771,6731,658
Total interest expense18,208 22,576 26,692 27,064 25,604
Net interest income 50,244 47,996 47,162 47,095 46,778
Provision for credit losses8,1674,1501,600 8501,000
Net interest income after
provision for credit losses 42,077 43,846 45,562 46,245 45,778
Noninterest income:
Customer service fees4,1483,8763,7953,6293,431
Wealth management fees 2,3632,3382,1922,186 672
Other noninterest income 4,3594,5014,1484,8183,415
Total noninterest income 10,870 10,715 10,135 10,6337,518
Noninterest expense:
Salaries and employee
benefits 20,865 20,759 20,949 20,634 19,768
Occupancy5,3605,2654,6924,7064,606
Technology 2,3052,3302,4392,2602,095
Professional fees1,2151,0091,0681,0681,078
Postage, delivery and
supplies 9631,073 954 903 943
Marketing 724 413 441 432 581
Core deposits and other
intangibles amortization 586 585 590 610 517
Acquisition costs- 562-- 166
Other5,6905,3925,0014,4314,588
Total noninterest expense 37,708 37,388 36,134 35,044 34,342
Income before income taxes15,239 17,173 19,563 21,834 18,954
Provision for income taxes 4,9325,5646,2017,2555,856
Net Income $10,307 $11,609 $13,362 $14,579 $13,098
Earnings per share (1):
Basic $0.14$0.16$0.18$0.20$0.18
Diluted$0.14$0.16$0.18$0.20$0.18
Year-to-date
2008 2007
Interest income:
Loans, including fees $123,134 $126,839
Securities:
Taxable13,957 11,216
Non-taxable 1,816 1,730
Trading assets 43 5
Federal funds sold 66422
Deposits in financial institutions8 24
Total interest income 139,024140,236
Interest expense:
Demand and savings deposits 9,504 13,644
Certificates and other time deposits 20,639 26,272
Other borrowed funds 5,761 3,752
Subordinated debt 1,896 2,312
Junior subordinated debt 2,984 2,889
Total interest expense 40,784 48,869
Net interest income98,240 91,367
Provision for credit losses12,317 1,370
Net interest income after provision
for credit losses 85,923 89,997
Noninterest income:
Customer service fees 8,024 6,903
Wealth management fees4,701 1,284
Other noninterest income 8,860 7,265
Total noninterest income 21,585 15,452
Noninterest expense:
Salaries and employee benefits 41,624 39,456
Occupancy10,625 8,968
Technology4,635 4,144
Professional fees 2,224 2,023
Postage, delivery and supplies2,036 1,754
Marketing 1,137936
Core deposits and other
intangibles amortization 1,171937
Acquisition costs 562920
Other11,082 9,038
Total noninterest expense 75,096 68,176
Income before income taxes 32,412 37,273
Provision for income taxes 10,496 12,252
Net Income$21,916$25,021
Earnings per share (1):
Basic $0.30 $0.35
Diluted $0.30 $0.34
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 7
Quarter Ended
Jun. 30,
2008
Average Balance Interest Yield/Rate
Interest-Earning Assets:
Loans held for sale $94,801 $1,540 6.53%
Loans held for investment:
Taxable 3,538,656 58,510 6.65%
Non-taxable (3) 2,321 46 7.89%
Securities:
Taxable622,7947,408 4.78%
Non-taxable (3) 96,8141,285 5.34%
Trading assets 4,395 22 1.98%
Federal funds sold 5,593 27 1.99%
Deposits in financial institutions 1,0105 1.94%
Total interest-earning assets4,366,384 68,843 6.34%
Noninterest-earning assets 471,081
Total Assets $4,837,465
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,417,453 $3,889 1.10%
Certificates and other time 1,056,0228,662 3.30%
Other borrowed funds 595,0813,409 2.30%
Subordinated debt 49,511 864 7.02%
Junior subordinated debt 82,7341,384 6.73%
Total interest-bearing liabilities 3,200,801 18,208 2.29%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,134,548
Shareholders' equity 502,116
Total Liabilities and Shareholders'
Equity $4,837,465
Tax Equivalent Net Interest Income
and Margin (3)50,635 4.66%
Tax Equivalent adjustment:
Loans14
Securities 377
Total tax equivalent adjustment 391
Net Interest Income $50,244
Quarter Ended
Mar. 31,
2008
Average Balance Interest Yield/Rate
Interest-Earning Assets:
Loans held for sale $78,331 $1,384 7.11%
Loans held for investment:
Taxable 3,404,998 61,626 7.28%
Non-taxable (3) 2,974 61 8.27%
Securities:
Taxable567,3436,549 4.64%
Non-taxable (3) 97,4111,251 5.17%
Trading assets 4,395 21 1.91%
Federal funds sold 4,990 39 3.13%
Deposits in financial institutions 4373 3.01%
Total interest-earning assets4,160,879 70,934 6.86%
Noninterest-earning assets 442,538
Total Assets $4,603,417
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,430,887 $5,615 1.58%
Certificates and other time 1,125,983 11,977 4.28%
Other borrowed funds 323,6222,352 2.92%
Subordinated debt 49,2721,032 8.42%
Junior subordinated debt 82,7341,600 7.78%
Total interest-bearing liabilities 3,012,498 22,576 3.01%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,095,966
Shareholders' equity 494,953
Total Liabilities and Shareholders'
Equity $4,603,417
Tax Equivalent Net Interest Income
and Margin (3)48,358 4.67%
Tax Equivalent adjustment:
Loans19
Securities 343
Total tax equivalent adjustment 362
Net Interest Income $47,996
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 8
Year-to-date
2008
Average Balance Interest Yield/Rate
Interest-Earning Assets:
Loans held for sale $86,566 $2,925 6.79%
Loans held for investment:
Taxable 3,471,827 120,136 6.96%
Non-taxable (3) 2,648 106 8.10%
Securities:
Taxable595,068 13,957 4.72%
Non-taxable (3) 97,1132,536 5.25%
Trading assets 4,395 43 1.94%
Federal funds sold 5,291 66 2.53%
Deposits in financial institutions 7238 2.26%
Total interest-earning assets4,263,631 139,777 6.59%
Noninterest-earning assets 456,810
Total Assets $4,720,441
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,424,169 $9,504 1.34%
Certificates and other time 1,091,002 20,639 3.80%
Other borrowed funds 459,3515,761 2.52%
Subordinated debt 49,3921,896 7.72%
Junior subordinated debt 82,7342,984 7.25%
Total interest-bearing liabilities 3,106,648 40,784 2.64%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,115,258
Shareholders' equity 498,535
Total Liabilities and Shareholders'
Equity $4,720,441
Tax Equivalent Net Interest Income
and Margin (3)98,993 4.67%
Tax equivalent adjustment:
Loans33
Securities 720
Total tax equivalent adjustment 753
Net Interest Income $98,240
Year-to-date
2007
Average Balance Interest Yield/Rate
Interest-Earning Assets:
Loans held for sale $54,238 $2,107 7.83%
Loans held for investment:
Taxable 3,147,148 124,632 7.99%
Non-taxable (3) 3,614 141 7.87%
Securities:
Taxable503,444 11,216 4.49%
Non-taxable (3) 92,0202,334 5.11%
Trading assets 1455 7.16%
Federal funds sold18,471 422 4.61%
Deposits in financial institutions 1,036 24 4.61%
Total interest-earning assets3,820,116 140,881 7.44%
Noninterest-earning assets 404,179
Total Assets $4,224,295
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,273,383 $13,644 2.16%
Certificates and other time 1,136,877 26,272 4.66%
Other borrowed funds 142,0413,752 5.33%
Subordinated debt 46,1792,312 10.10%
Junior subordinated debt 70,7722,889 8.23%
Total interest-bearing liabilities 2,669,252 48,869 3.69%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,121,131
Shareholders' equity 433,912
Total Liabilities and Shareholders'
Equity $4,224,295
Tax Equivalent Net Interest Income
and Margin (3)92,012 4.86%
Tax equivalent adjustment:
Loans41
Securities 604
Total tax equivalent adjustment 645
Net Interest Income $91,367
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 9
Quarter Ended
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
2008 2008 2007 2007 2007
Condensed Average
Balance Sheet
Loans held for sale$94,801$78,331$66,897$73,295$54,986
Loans held for
investment 3,540,977 3,407,972 3,341,014 3,254,513 3,238,611
Total loans3,635,778 3,486,303 3,407,911 3,327,808 3,293,597
Available-for-sale
securities, at fair
value 543,696486,131472,239446,721440,994
Held-to-maturity
securities, at
amortized cost175,912178,623178,309177,185163,471
Trading assets 4,395 4,395 8,686 8,470216
Other earning assets 6,603 5,427 10,748 5,605 25,623
Total earning
assets4,366,384 4,160,879 4,077,893 3,965,789 3,923,901
Goodwill 172,690169,198166,177165,879160,141
Core deposits and
other intangibles,
net15,322 15,767 16,271 16,874 13,787
All other noninterest-
earning assets283,069257,573226,367249,716244,628
Total assets $4,837,465 $4,603,417 $4,486,708 $4,398,258 $4,342,457
Noninterest-bearing
demand deposits$1,090,439 $1,046,412 $1,086,217 $1,093,485 $1,108,895
Interest-bearing
deposits:
Interest-bearing
demand deposits 1,417,453 1,430,887 1,348,767 1,320,136 1,318,839
Jumbo certificates
of deposit 642,066707,543789,006758,509732,260
Regular certificates
of deposit 302,790327,624339,085343,288330,084
Brokered
certificates
of deposit 111,166 90,816118,027142,127126,136
Total deposits 3,563,914 3,603,282 3,681,102 3,657,545 3,616,214
Other borrowed funds 595,081323,622148,982104,579 96,024
Subordinated debt 49,511 49,272 47,637 46,078 46,232
Junior subordinated
debt 82,734 82,734 82,734 82,734 82,734
Accrued interest
payable and other
liabilities44,109 49,554 51,048 50,962 50,515
Total liabilities 4,335,349 4,108,464 4,011,503 3,941,898 3,891,719
Total shareholders'
equity502,116494,953475,205456,360450,738
Total liabilities
and shareholders'
equity $4,837,465 $4,603,417 $4,486,708 $4,398,258 $4,342,457
Jun. 30,Mar. 31, Dec. 31, Sep. 30, Jun. 30,
2008 2008 2007 2007 2007
Period-end Loans:
Loans held for sale $112,614$90,274$78,447$54,699$71,380
Loans held for
investment:
Commercial and
industrial1,008,410980,884934,176940,821913,796
Real Estate:
Commercial 1,473,843 1,432,905 1,389,225 1,382,313 1,371,036
Construction and
development 728,217731,833714,600697,099671,429
Residential
mortgage 258,600237,715226,085219,914215,313
Consumer/other73,924 75,139 75,751 79,505 79,590
Loans held for
investment 3,542,994 3,458,476 3,339,837 3,319,652 3,251,164
Total period-end
loans $3,655,608 $3,548,750 $3,418,284 $3,374,351 $3,322,544
Period-End Deposits:
Noninterest-bearing
demand $1,135,296 $1,100,919 $1,092,210 $1,082,037 $1,144,049
Interest-bearing
demand 1,409,220 1,464,937 1,403,227 1,340,746 1,332,469
Certificates and
other time deposits:
Jumbo 674,891682,264756,980773,770766,416
Regular318,762304,776332,206345,205342,579
Brokered 156,166 92,021 89,088120,005145,343
Total period-end
deposits$3,694,335 $3,644,917 $3,673,711 $3,661,763 $3,730,856
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 10
Quarter Ended
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
2008 2008 2007 20072007
Allowance For Credit Losses
Allowance for loan losses at
beginning of period $35,681 $34,446 $34,225 $33,450 $33,487
Charge-offs:
Commercial, financial and
industrial 2,2101,721 876 5401,316
Real estate, mortgage and
construction 2521,481 728 52 166
Consumer351 303 547 478 279
Total charge-offs 2,8133,5052,1511,0701,761
Recoveries:
Commercial, financial and
industrial 477 352 270 612 541
Real estate, mortgage and
construction23 6183 34
Consumer116 177 494 380 149
Total Recoveries 616 590 772 995 724
Net charge-offs 2,1972,9151,379 751,037
Allowance for credit losses
associated with acquired
institutions -----
Provision for loan losses 8,1674,1501,600 8501,000
Allowance for loan losses at
end of period$41,651 $35,681 $34,446 $34,225 $33,450
Reserve for unfunded loan
commitments at beginning of
period 927 927 927 927 927
Provision for losses on
unfunded loan commitments -----
Reserve for unfunded loan
commitments at end of period 927 927 927 927 927
Total allowance for credit
losses $42,578 $36,608 $35,373 $35,152 $34,377
Nonperforming Assets
Nonperforming loans:
Nonaccrual $48,921 $21,199 $19,445 $10,919 $10,862
Restructured - 764 769 772 772
Real estate acquired by
foreclosure4,2934,0423,6832,7133,064
Other repossessed assets 118 112 152 67 113
Total nonperforming assets$53,332 $26,117 $24,049 $14,471 $14,811
Accruing loans past due 90
days or more $2,224 $944 $1,304 $1,477 $1,533
Ratios
Period-end allowance for
credit losses to period-end
loans 1.16%1.03%1.03%1.04%1.03%
Period-end allowance for loan
losses to period-end loans 1.14%1.01%1.01%1.01%1.01%
Period-end allowance for loan
losses to nonperforming
loans 85.14% 162.46% 170.41% 292.74% 287.52%
Nonperforming loans to
period-end loans 1.34%0.62%0.59%0.35%0.35%
Nonperforming assets to
period-end assets 1.09%0.55%0.53%0.33%0.34%
Net charge-offs to average
loans (2) 0.24%0.34%0.16% - 0.13%
Year-to-date
20082007
Allowance For Credit Losses
Allowance for loan losses at beginning of period$34,446 $32,027
Charge-offs:
Commercial, financial and industrial3,9311,851
Real estate, mortgage and construction 1,733 286
Consumer 654 604
Total charge-offs 6,3182,741
Recoveries:
Commercial, financial and industrial 829 947
Real estate, mortgage and construction 84 36
Consumer 293 315
Total Recoveries 1,2061,298
Net charge-offs 5,1121,443
Allowance for credit losses associated
with acquired institutions -1,496
Provision for loan losses12,3171,370
Allowance for loan losses at end of period $41,651 $33,450
Reserve for unfunded loan commitments at
beginning of period927 927
Provision for losses on unfunded loan commitments --
Reserve for unfunded loan commitments
at end of period 927 927
Total allowance for credit losses $42,578 $34,377
Nonperforming Assets
Nonperforming loans:
Nonaccrual$48,921 $10,862
Restructured- 772
Real estate acquired by foreclosure 4,2933,064
Other repossessed assets118 113
Total nonperforming assets $53,332 $14,811
Accruing loans past due 90 days or more $2,224 $1,533
Ratios
Period-end allowance for credit
losses to period-end loans 1.16%1.03%
Period-end allowance for loan losses
to period-end loans 1.14%1.01%
Period-end allowance for loan losses
to nonperforming loans 85.14% 287.52%
Nonperforming loans to period-end loans 1.34%0.35%
Nonperforming assets to period-end assets 1.09%0.34%
Net charge-offs to average loans (2) 0.29%0.09%
STERLING BANCSHARES, INC.
FOOTNOTES TO EARNINGS RELEASE
Page 11
(1) Earnings per share in each quarter is computed individually using the
weighted-average number of shares outstanding during that quarter
while earnings per share for the full period is computed using the
weighted-average number of shares outstanding during the year. Thus,
the sum for all quarters does not necessarily equal the full period
earnings per share.
(2) Interim periods annualized.
(3) Taxable-equivalent basis assuming a 35% tax rate.
(4) The efficiency ratio is calculated by dividing noninterest expense
less acquisition costs by tax equivalent basis net interest income
plus noninterest income less net gain (loss) on sales of investment
securities. Prior period amounts have been restated to reflect the
current methodology.
SOURCE Sterling Bancshares, Inc.
