MOUNT LAUREL, N.J., Nov. 25 /PRNewswire-FirstCall/ -- Sterling
Banks, Inc. (NASDAQ:STBK), the bank holding company of Sterling
Bank, a locally focused, community oriented, full service
commercial bank which operates through ten retail branches that are
located in New Jersey's Burlington and Camden Counties, reported a
third quarter loss before income taxes of $1,654,000, and an after
tax loss of $4,510,000, or $0.77 per share, on a basic and diluted
basis. For the quarter ending September 30, 2009, the Company
reported a net loss of $4,510,000, compared to net income of
$79,000 for the third quarter of 2008. On a basic and diluted per
share basis, the net loss for the third quarter of 2009 was $0.77
per share compared to net income for the third quarter of 2008 of
$0.01 per share. For the nine months ended September 30, 2009 and
2008, the net loss was $5,905,000 and $405,000, respectively. On a
basic and diluted per share basis, the net loss for the nine months
ended September 30, 2009 and 2008 was $1.01 and $0.07 per share,
respectively. During the quarter ending September 30, 2009,
management determined that there was a need for a valuation
allowance of $3.5 million on the Company's deferred tax assets.
Based on forecasts of the Company's future profitability and
relevant accounting rules, management concluded full recognition of
these tax assets was in doubt. Total assets of the Company were
$388 million as of September 30, 2009 and 2008, respectively. Loans
outstanding totaled $297 million as of September 30, 2009, a
decrease of $5 million, or 2%, from total loans of $302 million as
of September 30, 2008. Deposits totaled $343 million as of
September 30, 2009, an increase of $22 million, or 7%, from total
deposits of $321 million as of September 30, 2008. These results
reflect the continued efforts by management to reduce the general
level of risk on the balance sheet. For the quarter ended September
30, 2009, the Company's net interest income after the provision for
loan losses decreased by $1,451,000, or 45%, compared to the same
period in 2008, primarily as a result of an increase in provision
for loan losses of $970,000 and a decline of $481,000 in the net
interest income in 2009. The decrease in net interest income
includes a decline of $626,000, or 76 basis points, in the net
interest margin including approximately $152,000 in lost revenue on
nonaccrual loans and partially offset by an increase in interest
income on increased interest earning assets outstanding of
$145,000. Noninterest income for the quarter ended September 30,
2009 amounted to $177,000, a decrease of $106,000, or 37%,
primarily as a result of decreased prepayment penalties for early
loan payoffs of $61,000, a decrease in late charges of $16,000, and
a decrease in miscellaneous fees of $10,000. Noninterest expenses
increased $236,000, or 7%, for the three months ended September 30,
2009 as compared to the same period in 2008, primarily from an
increase in deposit insurance. For the nine months ended September
30, 2009, the Company's net interest income after the provision for
loan losses decreased by $2,612,000, or 28%, compared to the same
period in 2008, primarily as a result of an increase in provision
for loan losses of $960,000 and a decrease in the net interest
income of $1,652,000. The decrease in net interest income includes
a decline of $1,837,000, or 70 basis points, in the net interest
margin including approximately $428,000 in lost revenue on
nonaccrual loans and partially offset by an increase in interest
income on increased interest earning assets outstanding of
$185,000. Noninterest income for the nine months ended September
30, 2009 amounted to $582,000, a decrease of $213,000, or 27%,
compared to the same period in 2008, primarily as a result of a
decrease in gains on sales of available-for-sale securities of
$90,000, a decrease in miscellaneous fee income of $41,000
pertaining to a one time sale of branch rights to one of our former
Farnsworth locations ($30,000) in 2008, a decrease in prepayment
penalties on early loan payoffs of $27,000, a decrease in mortgage
origination income of $13,000, and a decrease in late charges of
$11,000. Noninterest expenses increased $436,000, or 4%, for the
nine months ended September 30, 2009 as compared to the same period
in 2008, primarily from an increase in deposit insurance of
$566,000, including a one time special assessment of $183,000, an
increase in loan workout expenses of $431,000, a partial write down
of $82,000 on the Company's former Gaither Road branch, an increase
in partial write downs and/or net losses on sales of OREO of
$77,000, and a decrease in personnel expenses of $737,000. Robert
H. King, President and CEO of Sterling Banks, Inc., commented
concerning the status and progress of Sterling Bank: "Unfavorable
economic conditions persist as a recessionary environment of
prolonged proportions continues to evolve. Overall loan portfolio
components are faring well with the exception of residential
construction exposure. This isolated loan portfolio segment is
challenged, however, individual loans are paying off on a regular
basis, the rate of emerging problem loans has slowed dramatically,
and work-out efforts are attaining reasonable successes, although
slowed by an overloaded legal system resulting in foreclosure
docket backlogs." Sterling Banks, Inc. Consolidated Financial
Highlights (unaudited) As of, and for the nine months ended,
September 30, 2009 and 2008 Three Months Nine Months Ended Ended
09/30/2009 09/30/2008 09/30/2009 09/30/2008 ---------- ----------
---------- ---------- INCOME STATEMENT Interest income $4,764,000
$5,464,000 $14,266,000 $17,093,000 Interest expense 1,902,000
2,121,000 6,242,000 7,417,000 Net interest income 2,862,000
3,343,000 8,024,000 9,676,000 Provision for loan losses 1,075,000
105,000 1,465,000 505,000 Net interest income after provision for
loan losses 1,787,000 3,238,000 6,559,000 9,171,000 Noninterest
income 177,000 283,000 582,000 795,000 Noninterest expenses
3,618,000 3,382,000 11,023,000 10,588,000 Income (loss) before
taxes (1,654,000) 139,000 (3,882,000) (622,000) Income tax expense
(benefit) 2,856,000 60,000 2,023,000 (217,000) Net income (loss)
$(4,510,000) $79,000 $(5,905,000) $(405,000) PER SHARE DATA Basic
and Diluted income (losses) per share $(0.77) $0.01 $(1.01) $(0.07)
Average shares outstanding - Basic 5,843,362 5,843,362 5,843,362
5,843,362 Diluted 5,843,362 5,849,335 5,843,362 5,843,362 BALANCE
SHEET Assets Cash & due from banks $9,071,000 $10,516,000
Federal funds sold 19,498,000 5,333,000 Total investment securities
47,142,000 39,189,000 Restricted stock 2,014,000 2,448,000 Total
loans 296,914,000 302,008,000 Allowance for loan losses (6,682,000)
(3,015,000) Other assets 19,943,000 31,388,000 Total assets
$387,900,000 $387,867,000 Liabilities Total deposits $343,203,000
$321,483,000 Total borrowings 21,436,000 22,186,000 Other
liabilities 1,606,000 1,335,000 Total liabilities 366,245,000
345,004,000 Shareholders' equity Common stock 11,687,000 11,687,000
Additional paid-in capital 29,823,000 29,748,000 Retained earnings
(Accumulated deficit) (20,184,000) 1,544,000 Accumulated other
comprehensive income (losses) 329,000 (116,000) Total shareholders'
equity 21,655,000 42,863,000 Total liabilities and shareholders'
equity $387,900,000 $387,867,000 PERFORMANCE RATIOS Book value per
share $3.71 $7.34 Tangible book value per share $3.35 $4.82 Return
on average assets (4.58)% 0.08% (2.01)% (0.14)% Return on average
equity (69.71)% 0.74% (29.95)% (1.26)% Net interest margin 3.24%
4.00% 3.04% 3.74% As previously disclosed, following a recent
regulatory examination of Sterling Bank (the "Bank"), the Federal
Reserve Bank of Philadelphia (the "FRB") orally indicated that the
Bank's allowance for loan and leases losses ("ALLL") at and for the
quarter ended June 30, 2009 should be increased from amounts
previously reported as of June 30, 2009. The FRB has not given any
definitive written findings, but the oral indication was that the
ALLL should be increased by $4.5 to $6.0 million. Based on the
FRB's recommendation, the Company is evaluating the ALLL reflected
in the Company's financial statements for the period ended June 30,
2009. As a result of the discussions with the Company's auditors
related to the evaluation of the ALLL and the discussions with the
FRB, the Company's auditors were not able to complete a review of
the Company's September 30, 2009 financial statements. Sterling
Banks, Inc. is a bank holding company which commenced operations in
March 2007, with assets of $388 million as of September 30, 2009,
and is headquartered in Mount Laurel Township, Burlington County.
Sterling Bank is a community bank which commenced operations in
December 1990 with the purpose of serving consumers and small to
medium-sized businesses in its market area. Sterling Bank's main
office is located in Mount Laurel, New Jersey, and its nine other
Community Banking Centers are located in Burlington and Camden
Counties in New Jersey. The Bank's deposits are insured to the
applicable regulatory limits per depositor by the Federal Deposit
Insurance Corporation. Sterling Bank is a member of the Federal
Reserve System. The common stock of Sterling Banks, Inc. is traded
on the NASDAQ Capital Market under the symbol "STBK". For
additional information about Sterling Bank and Sterling Banks, Inc.
visit our website at http://www.sterlingnj.com/. This news release
may contain certain forward-looking statements, such as statements
of the Company's plans, objectives, expectations, estimates and
intentions. Forward-looking statements may be identified by the use
of words such as "expects," "subject," "believe," "will,"
"intends," "will be" or "would." These statements are subject to
change based on various important factors (some of which are beyond
the Company's control). Readers should not place undue reliance on
any forward-looking statements (which reflect management's analysis
only as of the date of which they are given). These factors include
general economic conditions, trends in interest rates, the ability
of our borrowers to repay their loans, the ability of the Company
to manage the risk in its loan and investment portfolios, the
ability of the Company to reduce noninterest expenses and increase
net interest income, results of possible collateral collections and
subsequent sales, and results of regulatory examinations, among
other factors. Sterling Banks, Inc. cautions that the foregoing
list of important factors is not exclusive. Readers should
carefully review the risk factors described in other documents the
Company files from time to time with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K for
the year ended December 31, 2008, Quarterly Reports on Form 10-Q,
and Current Reports on Form 8-K. DATASOURCE: Sterling Banks, Inc.
CONTACT: Robert H. King, President, +1-856-273-5900, ; R. Scott
Horner, Executive Vice President, +1-856-273-5900, Web Site:
http://www.sterlingnj.com/
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