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Sterling Bancshares Reports Third Quarter 2006 Earnings; Net Income of $11.7 Million or $0.26 Per Share
25 October 2006 Sterling Bancshares, Inc. (Nasdaq: SBIB) today reported net income of $11.7 million or $0.26 per diluted share for the third quarter ended September 30, 2006, a 35% increase when compared to the $8.7 million, or $0.19 per diluted share earned for the third quarter of 2005. Net income for the third quarter of 2006 included after-tax acquisition costs of $415 thousand or $0.01 per diluted share and a reduction in income tax expense of $473 thousand, or $0.01 per diluted share as a result of the expiration of previously recorded tax contingencies. Net income for the third quarter of 2005 included after-tax acquisition costs of $540 thousand or $0.01 per diluted share.
Net income for the nine months ended September 30, 2006 was $33.0 million, or $0.72 per diluted share compared with $25.0 million or $0.55 per diluted share for the same period in 2005.
The Company completed its acquisition of Kerrville, Texas-based BOTH, Inc., and its subsidiary, Bank of the Hills, on September 29, 2006. BOTH operates five banking offices in the San Antonio/Kerrville area, and had assets of approximately $328 million, loans of $151 million, and deposits of $298 million at the date of acquisition. The results of operations for this acquisition will be included in the Company's financial results for the fourth quarter of 2006. The acquisition of BOTH had little impact on average balances in the third quarter of 2006.
"Our third quarter results reflect continued improvements in asset quality. These improvements have resulted in a reduction in net charge-offs for each of the last four quarters," commented J. Downey Bridgwater, Sterling's Chairman, President and Chief Executive Officer. "Additionally, during the third quarter we completed the acquisition of Bank of the Hills, further expanding our presence in the San Antonio/Kerrville area enabling us to add to our core deposit base."
Period-end loans held for investment increased $174 million during the third quarter to $3.0 billion at September 30, 2006, up 6.1% on a linked- quarter basis and up $341 million or 12.7% compared to September 30, 2005. Average loans held for investment were $2.9 billion for the third quarter of 2006, up $44.7 million or 6.3% linked-quarter annualized and up $281 million or 10.9% from the third quarter of 2005.
The company experienced favorable improvements in asset quality during the third quarter of 2006. Net charge-offs for the third quarter of 2006 improved to $746 thousand or 0.10% annualized of average total loans compared with $1.2 million or 0.16% annualized for the second quarter of 2006 and $6.1 million or 0.93% annualized for the third quarter of 2005. The decrease in net charge- offs contributed to a decrease in the provision for credit losses of $942 thousand in the third quarter of 2006 compared to the second quarter of 2006 and $3.7 million compared to the third quarter of 2005. At September 30, 2006, nonperforming assets were $16.8 million or 0.54% of total loans and foreclosed properties compared to $25.1 million or 0.93% at September 30, 2005. The allowance for loan losses at September 30, 2006 was $34.1 million and represented 1.10% of total period-end loans, compared with $31.9 million or 1.11% at June 30, 2006 and $31.2 million or 1.16% at September 30, 2005.
Period-end total deposits increased $334 million or 11.2% during the third quarter to $3.3 billion at September 30, 2006 and up $550 million or 19.8% compared to September 30, 2005. Average total deposits for the third quarter of 2006 were up $47.3 million or 6.4% linked-quarter annualized and up $390 million or 15.0% from the third quarter of 2005. Average noninterest-bearing deposits increased $70.0 million or 7.5% compared to the third quarter of 2005, and average interest-bearing demand deposits increased $123 million or 12.9% for the same time period.
Net interest income for the third quarter of 2006 was $42.9 million, up $92 thousand linked-quarter. During the third quarter of 2006, net interest margin decreased 11 basis points to 4.87%. The decrease in net interest margin is attributed to higher rates paid on borrowings and deposits which offset the increase in interest income earned as a result of the growth in loan volume.
Noninterest income was $7.5 million in the third quarter of 2006, up $410 thousand or 5.8% as compared with the third quarter of 2005. This increase was primarily attributable to increases in customer service and other lending fees.
Noninterest expense for the third quarter of 2006 was $32.6 million, down $626 thousand compared to the second quarter of 2006. Noninterest expense for the third quarter of 2006 included acquisition costs of $638 thousand. In the second quarter of 2006, the Company prepaid $29.6 million of junior subordinated debt having a 9.20% interest rate. Remaining unamortized debt issuance costs associated with this debt totaling $1.3 million were written off and are included in other noninterest expense for the second quarter of 2006. Noninterest expense for the third quarter of 2006 increased $4.9 million as compared with the third quarter of 2005. Salaries and employee benefits increased $4.0 million in the third quarter of 2006 as compared with the same period in 2005. The increase in salaries and employee benefits was primarily attributable to the addition of 33 full-time equivalent employees over the past twelve months related to additional banking offices and the continued investment in lending staff and key officers as part of the Company's growth strategy.
At September 30, 2006, Sterling had total assets of $4.3 billion, total loans of $3.1 billion and total deposits of $3.3 billion. Shareholders' equity of $399.8 million at September 30, 2006 was 9.38% of total assets. Book value per common share at period-end was $8.44.
Conference Call
Management will host a conference call for investors and analysts that will be broadcast live via telephone and over the Internet on Tuesday, October 24, 2006 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 (847) 619-6368. An audio archive of the call will also be available on the web site beginning Wednesday, October 25, 2006.
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 2005 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 $4.3 billion, which operates 45 banking centers in the greater metro areas of Houston, San Antonio, and Dallas, Texas. These cities are the 4th, 7th and 9th largest in the United States, respectively, based on population. The Company's common stock is traded through the NASDAQ Global Select Market under the symbol "SBIB".
-Tables to follow-
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands, except for per share data)
Quarter Ended Year-to-date
Sep. 30, Jun. 30, Sep. 30,
2006 2006 2005 2006 2005
Profitability
Net Income $11,729 $11,269 $8,686 $33,030 $24,960
Earnings per common share (1)
Basic $0.26 $0.25 $0.19 $0.73 $0.55
Diluted $0.26 $0.25 $0.19 $0.72 $0.55
Return on average common
equity (2) 13.11% 13.10% 10.41% 12.74% 10.28%
Return on average assets (2) 1.21% 1.19% 0.96% 1.17% 0.95%
Net interest margin 4.87% 4.98% 4.57% 4.91% 4.57%
Efficiency Ratio:
Consolidated 64.61% 64.04% 61.48% 64.73% 63.29%
Sterling Bank 61.28% 59.24% 56.61% 61.06% 59.33%
Liquidity and Capital Ratios
Average loans to average
deposits 97.04% 96.05% 99.70% 96.35% 98.05%
Period-end stockholders'
equity to total assets 9.38% 9.08% 8.83% 9.38% 8.83%
Average stockholders' equity
to average assets 9.27% 9.11% 9.19% 9.16% 9.26%
Period-end tangible capital to
total tangible assets 6.30% 6.91% 6.62% 6.30% 6.62%
Tier 1 capital to risk-
weighted assets 8.65% 9.19% 9.93% 8.65% 9.93%
Total capital to risk-weighted
assets 10.83% 11.41% 12.34% 10.83% 12.34%
Tier 1 leverage ratio (Tier 1
capital to average assets) 8.69% 8.65% 9.21% 8.69% 9.21%
Other Data
Shares used in computing
earnings per common share
Basic shares 45,428 45,421 45,362 45,396 45,255
Diluted shares 45,945 45,868 45,860 45,861 45,713
End of period common shares
outstanding 47,393 45,411 45,392 47,393 45,392
Book value per common share at
period-end
Total $8.44 $7.58 $7.25 $8.44 $7.25
Tangible $5.48 $5.63 $5.31 $5.48 $5.31
Cash dividends paid per common
share $0.07 $0.07 $0.06 $0.21 $0.18
Common stock dividend payout
ratio 27.08% 28.20% 31.33% 28.83% 32.62%
Full-time equivalent employees 1,068 1,015 984 1,068 984
Number of banking centers 45 40 41 45 41
STERLING BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands)
Sep. 30, Jun. 30,
2006 2006
ASSETS
Cash and cash equivalents $146,442 $106,531
Interest-bearing deposits in
financial institutions 21,666 99
Trading assets --- ---
Available-for-sale securities, at
fair value 527,806 455,122
Held-to-maturity securities, at
amortized cost 167,243 120,153
Loans held for sale 72,789 24,215
Loans held for investment 3,030,344 2,856,661
Total loans 3,103,133 2,880,876
Allowance for loan losses (34,146) (31,882)
Loans, net 3,068,987 2,848,994
Premises and equipment, net 42,115 37,169
Real estate acquired by foreclosure 1,764 1,171
Goodwill 129,131 85,026
Core deposit intangibles, net 10,728 3,162
Accrued interest receivable 18,576 15,002
Other assets 129,666 117,491
TOTAL ASSETS $4,264,124 $3,789,920
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $1,045,416 $1,033,743
Interest-bearing demand 1,207,722 1,032,465
Certificates and other time
deposits 1,065,372 918,167
Total deposits 3,318,510 2,984,375
Short-term borrowings 372,250 330,700
Subordinated debt 46,018 44,358
Junior subordinated debt 56,959 52,836
Accrued interest payable and other
liabilities 70,611 33,637
Total liabilities 3,864,348 3,445,906
COMMITMENTS AND CONTINGENCIES --- ---
SHAREHOLDERS' EQUITY
Common stock 47,893 45,786
Capital surplus 103,768 63,567
Retained earnings 262,678 254,125
Treasury stock (8,540) (6,111)
Accumulated other comprehensive loss,
net of tax (6,023) (13,353)
Total shareholders' equity 399,776 344,014
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $4,264,124 $3,789,920
Mar. 31, Dec. 31, Sep. 30,
2006 2005 2005
ASSETS
Cash and cash equivalents $123,013 $147,154 $136,391
Interest-bearing deposits in financial
institutions 99 99 199
Trading assets 16,615 28,515 21,019
Available-for-sale securities, at fair
value 488,372 495,945 520,381
Held-to-maturity securities, at
amortized cost 124,346 123,053 114,819
Loans held for sale 6,924 8,354 10,779
Loans held for investment 2,751,804 2,691,008 2,689,745
Total loans 2,758,728 2,699,362 2,700,524
Allowance for loan losses (31,116) (31,230) (31,227)
Loans, net 2,727,612 2,668,132 2,669,297
Premises and equipment, net 40,108 41,407 38,863
Real estate acquired by foreclosure 2,726 460 635
Goodwill 85,026 85,026 84,490
Core deposit intangibles, net 3,357 3,551 3,756
Accrued interest receivable 15,052 15,358 14,443
Other assets 119,252 118,159 125,731
TOTAL ASSETS $3,745,578 $3,726,859 $3,730,024
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $1,031,989 $1,045,937 $1,031,366
Interest-bearing demand 1,083,486 1,017,832 974,629
Certificates and other time
deposits 844,505 774,374 763,014
Total deposits 2,959,980 2,838,143 2,769,009
Short-term borrowings 280,875 392,850 473,050
Subordinated debt 45,110 46,238 46,635
Junior subordinated debt 82,475 82,475 82,475
Accrued interest payable and other
liabilities 36,857 32,681 29,675
Total liabilities 3,405,297 3,392,387 3,400,844
COMMITMENTS AND CONTINGENCIES --- --- ---
SHAREHOLDERS' EQUITY
Common stock 45,695 45,458 45,392
Capital surplus 62,163 58,757 57,905
Retained earnings 246,036 239,171 230,631
Treasury stock (3,975) (1,984) ---
Accumulated other comprehensive loss,
net of tax (9,638) (6,930) (4,748)
Total shareholders' equity 340,281 334,472 329,180
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $3,745,578 $3,726,859 $3,730,024
STERLING BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(dollars in thousands, except for per share data)
Quarter Ended
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2006 2006 2006 2005 2005
Interest income:
Loans, including fees $58,158 $55,265 $50,776 $50,052 $45,545
Securities:
Taxable 5,902 6,011 6,149 6,032 6,404
Non-taxable 549 564 587 598 604
Trading assets 73 270 300 425 259
Federal funds sold 55 43 42 75 59
Deposits in financial
institutions 34 32 58 54 24
Total interest income 64,771 62,185 57,912 57,236 52,895
Interest expense:
Demand and savings
deposits 4,971 3,883 3,077 2,753 2,145
Certificates and other
time deposits 9,898 8,542 7,134 6,535 5,572
Short-term borrowings 4,690 4,413 4,162 4,245 4,498
Subordinated debt 1,155 1,125 1,055 1,020 950
Junior subordinated debt 1,152 1,409 1,792 1,775 1,746
Total interest expense 21,866 19,372 17,220 16,328 14,911
Net interest income 42,905 42,813 40,692 40,908 37,984
Provision for credit losses 895 1,837 1,326 3,245 4,565
Net interest income after
provision for credit losses 42,010 40,976 39,366 37,663 33,419
Noninterest income:
Customer service fees 3,313 3,061 2,577 2,895 2,840
Net gain (loss) on trading
assets --- (167) (135) 15 34
Net gain on the sale of
securities --- --- --- --- 6
Net gain on sale of loans 292 205 305 155 626
Other 3,899 5,920 3,743 3,494 3,588
Total noninterest
income 7,504 9,019 6,490 6,559 7,094
Noninterest expense:
Salaries and employee
benefits 18,843 18,822 18,675 15,763 14,794
Occupancy expense 4,018 4,061 3,843 4,164 3,841
Technology 1,695 1,615 1,474 1,520 1,409
Professional fees 1,408 1,473 1,425 1,731 1,870
Postage, delivery and
supplies 801 903 790 901 809
Marketing 675 709 384 502 542
Core deposit intangibles
amortization 195 194 195 205 102
Acquisition costs 638 --- --- --- 831
Other 4,294 5,416 4,172 3,758 3,514
Total noninterest
expense 32,567 33,193 30,958 28,544 27,712
Income before income taxes 16,947 16,802 14,898 15,678 12,801
Provision for income taxes 5,218 5,533 4,866 4,416 4,115
Net Income $11,729 $11,269 $10,032 $11,262 $8,686
Earnings per share (1):
Basic $0.26 $0.25 $0.22 $0.25 $0.19
Diluted $0.26 $0.25 $0.22 $0.25 $0.19
Year-to-date
2006 2005
Interest income:
Loans, including fees $164,199 $125,469
Securities:
Taxable 18,062 18,904
Non-taxable 1,700 1,844
Trading assets 643 893
Federal funds sold 140 218
Deposits in financial institutions 124 39
Total interest income 184,868 147,367
Interest expense:
Demand and savings deposits 11,931 5,772
Certificates and other time
deposits 25,574 13,613
Short-term borrowings 13,265 10,857
Subordinated debt 3,335 2,645
Junior subordinated debt 4,353 5,158
Total interest expense 58,458 38,045
Net interest income 126,410 109,322
Provision for credit losses 4,058 11,126
Net interest income after provision
for credit losses 122,352 98,196
Noninterest income:
Customer service fees 8,951 8,720
Net gain (loss) on trading assets (302) 132
Net gain on the sale of securities --- 60
Net gain on sale of loans 802 1,300
Other 13,562 10,188
Total noninterest income 23,013 20,400
Noninterest expense:
Salaries and employee benefits 56,340 45,466
Occupancy expense 11,922 11,392
Technology 4,784 4,004
Professional fees 4,306 4,796
Postage, delivery and supplies 2,494 2,337
Marketing 1,768 1,804
Core deposit intangibles
amortization 584 316
Acquisition costs 638 831
Other 13,882 11,156
Total noninterest expense 96,718 82,102
Income before income taxes 48,647 36,494
Provision for income taxes 15,617 11,534
Net Income $33,030 $24,960
Earnings per share (1):
Basic $0.73 $0.55
Diluted $0.72 $0.55
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Quarter Ended
Sep. 30,
2006
Average
Balance Interest Yield/Rate
Interest-Earning Assets:
Loan held for sale $39,729 $799 7.98%
Loans held for investment:
Taxable 2,860,125 57,323 7.95%
Non-taxable 2,299 36 6.20%
Securities:
Taxable 524,572 5,902 4.46%
Non-taxable 57,965 549 3.76%
Trading assets 6,642 73 4.35%
Federal funds sold 4,487 55 4.83%
Deposits in financial institutions 2,965 34 4.51%
Total interest-earnings assets 3,498,784 64,771 7.34%
Noninterest-earning assets 331,270
Total Assets $3,830,054
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,071,169 4,971 1.84%
Certificates and other time 920,615 9,898 4.27%
Short-term borrowings 350,233 4,690 5.31%
Subordinated debt 44,999 1,155 10.18%
Junior subordinated debt 52,925 1,152 8.64%
Total interest-bearing
liabilities 2,439,941 21,866 3.56%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,035,191
Shareholders' equity 354,922
Total Liabilities and Shareholders'
Equity $3,830,054
Net Interest Income & Margin $42,905 4.87%
Quarter Ended
Jun. 30,
2006
Average
Balance Interest Yield/Rate
Interest-Earning Assets:
Loan held for sale $9,434 $191 8.10%
Loans held for investment:
Taxable 2,815,355 55,036 7.84%
Non-taxable 2,388 38 6.33%
Securities:
Taxable 538,584 6,011 4.48%
Non-taxable 58,533 564 3.87%
Trading assets 17,969 270 6.02%
Federal funds sold 3,590 43 4.87%
Deposits in financial institutions 2,678 32 4.88%
Total interest-earnings assets 3,448,531 62,185 7.23%
Noninterest-earning assets 337,615
Total Assets $3,786,146
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,059,200 $3,883 1.47%
Certificates and other time 871,336 8,542 3.93%
Short-term borrowings 354,102 4,413 5.00%
Subordinated debt 44,784 1,125 10.08%
Junior subordinated debt 64,887 1,409 8.71%
Total interest-bearing
liabilities 2,394,309 19,372 3.25%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,046,960
Shareholders' equity 344,877
Total Liabilities and Shareholders'
Equity $3,786,146
Net Interest Income & Margin $42,813 4.98%
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Year-to-date
2006
Average
Balance Interest Yield/Rate
Interest-Earning Assets:
Loan held for sale $19,019 $1,149 8.07%
Loans held for investment:
Taxable 2,801,457 162,937 7.78%
Non-taxable 2,402 113 6.30%
Securities:
Taxable 540,033 18,062 4.47%
Non-taxable 59,071 1,700 3.85%
Trading assets 14,416 643 5.96%
Federal funds sold 4,041 140 4.63%
Deposits in financial institutions 3,649 124 4.54%
Total interest-earnings assets 3,444,088 184,868 7.18%
Noninterest-earning assets 339,013
Total Assets $3,783,101
Interest-Bearing Liabilities:
Deposits:
Demand and savings $1,059,854 11,931 1.51%
Certificates and other time 866,890 25,574 3.94%
Short-term borrowings 360,462 13,265 4.92%
Subordinated debt 45,264 3,335 9.85%
Junior subordinated debt 66,654 4,353 8.73%
Total interest-bearing
liabilities 2,399,124 58,458 3.26%
Noninterest-bearing sources:
Noninterest-bearing liabilities 1,037,264
Shareholders' equity 346,713
Total Liabilities and Shareholders'
Equity $3,783,101
Net Interest Income & Margin $126,410 4.91%
Year-to-date
2005
Average
Balance Interest Yield/Rate
Interest-Earning Assets:
Loan held for sale $10,138 $559 7.37%
Loans held for investment:
Taxable 2,479,256 124,769 6.73%
Non-taxable 2,579 141 7.29%
Securities:
Taxable 607,830 18,904 4.16%
Non-taxable 63,317 1,844 3.89%
Trading assets 26,905 893 4.44%
Federal funds sold 10,048 218 2.90%
Deposits in financial institutions 1,568 39 3.35%
Total interest-earnings assets 3,201,641 147,367 6.15%
Noninterest-earning assets 304,012
Total Assets $3,505,653
Interest-Bearing Liabilities:
Deposits:
Demand and savings $972,343 5,772 0.79%
Certificates and other time 665,778 13,613 2.73%
Short-term borrowings 482,003 10,857 3.01%
Subordinated debt 47,154 2,645 7.50%
Junior subordinated debt 82,475 5,158 8.36%
Total interest-bearing
liabilities 2,249,753 38,045 2.26%
Noninterest-bearing sources:
Noninterest-bearing liabilities 931,435
Shareholders' equity 324,465
Total Liabilities and Shareholders'
Equity $3,505,653
Net Interest Income & Margin $109,322 4.57%
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Quarter Ended
Sep. 30, Jun. 30,
2006 2006
Condensed Average Balance Sheet
Loans held for sale $39,729 $9,434
Loans held for investment 2,862,424 2,817,743
Total loans 2,902,153 2,827,177
Available-for-sale securities, at
fair value 454,972 474,554
Held-to-maturity securities, at
amortized cost 127,565 122,563
Trading assets 6,642 17,969
Other earning assets 7,452 6,268
Total earning assets 3,498,784 3,448,531
Goodwill 85,978 85,026
Core deposit intangibles, net 3,224 3,250
All other non-interest earning assets 242,068 249,339
Total assets $3,830,054 $3,786,146
Noninterest-bearing demand $998,857 $1,012,805
Interest-bearing deposits:
Interest-bearing demand 1,071,169 1,059,200
Jumbo certificates of deposits 561,207 534,952
Regular certificates of deposit 239,866 223,698
Brokered certificates of deposit 119,542 112,686
Total deposits 2,990,641 2,943,341
Short-term borrowings 350,233 354,102
Subordinated debt 44,999 44,784
Junior subordinated debt 52,925 64,887
Accrued interest payable and other
liabilities 36,334 34,155
Total liabilities 3,475,132 3,441,269
Total shareholders' equity 354,922 344,877
Total liabilities and
shareholders' equity $3,830,054 $3,786,146
Sep. 30, Jun. 30,
2006 2006
Period-end Loans:
Loans held for sale $72,789 $24,215
Loans held for investment:
Commercial and industrial 798,928 808,751
Real Estate:
Commercial 1,326,732 1,284,059
Construction and development 601,429 520,129
Residential mortgage 220,285 171,647
Consumer/other 82,970 72,075
Loans held for investment 3,030,344 2,856,661
Total period-end loans $3,103,133 $2,880,876
Period-End Deposits:
Noninterest-bearing demand $1,045,416 $1,033,743
Interest-bearing demand 1,207,722 1,032,465
Certificates and other time deposits:
Jumbo 633,745 564,365
Regular 312,834 231,329
Brokered 118,793 122,473
Total period-end deposits $3,318,510 $2,984,375
Quarter Ended
Mar. 31, Dec. 31, Sep. 30,
2006 2005 2005
Condensed Average Balance Sheet
Loans held for sale $7,541 $10,106 $10,788
Loans held for investment 2,729,952 2,698,033 2,581,817
Total loans 2,737,493 2,708,139 2,592,605
Available-for-sale securities, at fair
value 492,641 504,508 552,219
Held-to-maturity securities, at
amortized cost 125,408 115,739 118,521
Trading assets 18,770 31,700 24,027
Other earning assets 9,371 13,363 9,681
Total earning assets 3,383,683 3,373,449 3,297,053
Goodwill 85,026 84,506 62,737
Core deposit intangibles, net 3,455 3,662 1,590
All other non-interest earning assets 259,862 256,734 242,262
Total assets $3,732,026 $3,718,351 $3,603,642
Noninterest-bearing demand $997,237 $1,033,805 $928,828
Interest-bearing deposits:
Interest-bearing demand 1,048,948 995,652 948,507
Jumbo certificates of deposits 490,434 470,255 459,549
Regular certificates of deposit 215,951 221,109 217,086
Brokered certificates of deposit 101,092 81,319 46,478
Total deposits 2,853,662 2,802,140 2,600,448
Short-term borrowings 377,349 421,600 514,155
Subordinated debt 46,021 46,137 47,417
Junior subordinated debt 82,475 82,475 82,475
Accrued interest payable and other
liabilities 32,339 30,994 28,012
Total liabilities 3,391,846 3,383,346 3,272,507
Total shareholders' equity 340,180 335,005 331,135
Total liabilities and
shareholders' equity $3,732,026 $3,718,351 $3,603,642
Mar. 31, Dec. 31, Sep. 30,
2006 2005 2005
Period-end Loans:
Loans held for sale $6,924 $8,354 $10,779
Loans held for investment:
Commercial and industrial 781,073 764,141 776,597
Real Estate:
Commercial 1,266,234 1,224,129 1,191,592
Construction and development 455,097 438,569 447,422
Residential mortgage 178,493 190,771 195,862
Consumer/other 70,907 73,398 78,272
Loans held for investment 2,751,804 2,691,008 2,689,745
Total period-end loans $2,758,728 $2,699,362 $2,700,524
Period-End Deposits:
Noninterest-bearing demand $1,031,989 $1,045,937 $1,031,366
Interest-bearing demand 1,083,486 1,017,832 974,629
Certificates and other time deposits:
Jumbo 522,262 467,672 476,307
Regular 219,605 216,585 223,765
Brokered 102,638 90,117 62,942
Total period-end deposits $2,959,980 $2,838,143 $2,769,009
STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Quarter Ended
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2006 2006 2006 2005 2005
Allowance For Credit Losses
Allowance for loan losses at
beginning of period $31,882 $31,116 $31,230 $31,227 $32,209
Charge-offs:
Commercial, financial
and industrial 458 1,393 1,028 2,998 6,192
Real estate, mortgage
and construction 798 439 1,005 29 163
Consumer 413 253 113 364 333
Total charge-offs 1,669 2,085 2,146 3,391 6,688
Recoveries:
Commercial, financial
and industrial 777 782 385 319 420
Real estate, mortgage
and construction 3 2 3 4 97
Consumer 143 145 120 38 78
Total Recoveries 923 929 508 361 595
Net charge-offs 746 1,156 1,638 3,030 6,093
Allowance for credit losses
associated with acquired
institutions 2,152 --- --- --- 761
Provision for loan losses 858 1,922 1,524 3,033 4,350
Allowance for loan losses at
end of period $34,146 $31,882 $31,116 $31,230 $31,227
Reserve for unfunded loan
commitments at beginning of
period 890 975 1,173 961 746
Provision for losses on
commitments 37 (85) (198) 212 215
Reserve for unfunded loan
commitments at end of period 927 890 975 1,173 961
Total allowance for credit
losses $35,073 $32,772 $32,091 $32,403 $32,188
Nonperforming Assets
Nonperforming loans:
Nonaccrual $14,750 $12,395 $19,220 $21,841 $24,113
Restructured --- --- --- --- 49
Real estate acquired by
foreclosure 1,764 1,171 2,726 460 635
Other repossessed assets 291 412 418 137 331
Total nonperforming assets $16,805 $13,978 $22,364 $22,438 $25,128
Potential problem loans $38,761 $43,846 $47,517 $58,011 $62,356
Accruing loans past due 90
days or more $308 $543 $3,254 $162 $403
Ratios
Period-end allowance for
credit losses to period-end
loans 1.13% 1.14% 1.16% 1.20% 1.19%
Period-end allowance for loan
losses to period-end loans 1.10% 1.11% 1.13% 1.16% 1.16%
Period-end allowance for loan
losses to nonperforming
loans 231.50% 257.21% 161.90% 142.99% 129.24%
Nonperforming assets to
period-end loans and
foreclosed assets 0.54% 0.48% 0.81% 0.83% 0.93%
Nonperforming loans to
period-end loans 0.48% 0.43% 0.70% 0.81% 0.89%
Nonperforming assets to
period-end assets 0.39% 0.37% 0.60% 0.60% 0.67%
Net charge-offs to average
loans (2) 0.10% 0.16% 0.24% 0.44% 0.93%
Year-to-date
2006 2005
Allowance For Credit Losses
Allowance for loan losses at
beginning of period $31,230 $29,406
Charge-offs:
Commercial, financial and
industrial 2,879 9,412
Real estate, mortgage and
construction 2,242 1,739
Consumer 779 1,171
Total charge-offs 5,900 12,322
Recoveries:
Commercial, financial and
industrial 1,944 1,454
Real estate, mortgage and
construction 8 707
Consumer 408 230
Total Recoveries 2,360 2,391
Net charge-offs 3,540 9,931
Allowance for credit losses
associated with acquired
institutions 2,152 761
Provision for loan losses 4,304 10,991
Allowance for loan losses at end of
period $34,146 $31,227
Reserve for unfunded loan commitments
at beginning of period 1,173 826
Provision for losses on commitments (246) 135
Reserve for unfunded loan commitments
at end of period 927 961
Total allowance for credit losses $35,073 $32,188
Nonperforming Assets
Nonperforming loans:
Nonaccrual $14,750 $24,113
Restructured --- 49
Real estate acquired by foreclosure 1,764 635
Other repossessed assets 291 331
Total nonperforming assets $16,805 $25,128
Potential problem loans $38,761 $62,356
Accruing loans past due 90 days or
more $308 $403
Ratios
Period-end allowance for credit
losses to period-end loans 1.13% 1.19%
Period-end allowance for loan losses
to period-end loans 1.10% 1.16%
Period-end allowance for loan losses
to nonperforming loans 231.50% 129.24%
Nonperforming assets to period-end
loans and foreclosed assets 0.54% 0.93%
Nonperforming loans to period-end
loans 0.48% 0.89%
Nonperforming assets to period-end
assets 0.39% 0.67%
Net charge-offs to average loans (2) 0.17% 0.53%
(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 the quarters does not necessarily equal the
full period earnings per share.
(2) Interim periods annualized.
For More Information Contact:
J. Downey Bridgwater, Chairman, President &
Chief Executive Officer, (713) 507-2670
Stephen C. Raffaele, Executive Vice President
& Chief Financial Officer, (713) 507-7408
Source: prnewswire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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