Sterling Bancorp returns to profit for 3Q
Sterling Bancorp (STL) returned to a profit for the third quarter due to higher revenue, lower provisions for loan losses and the elimination of dividends and accretion on preferred shares. The bank, which lends money for residential mortgages as well as small- and medium-sized businesses, earned $4.4 million, or 14 cents a share, for the three months ended Sept. 30, up from a loss of $2.7 million, or 12 cents a share, a year earlier. The bank said total noninterest income fell to $11.5 million in the third quarter, down from $13.1 million in 2010. The company attributed the decline to higher accounts receivable management and fees offset by lower residential mortgage banking income, service charges and securities gains. Chairman and Chief Executive Louis Cappelli said the bank "maintained and strengthened our liquidity position, which we have temporarily deployed in a manner that will enable us to access these funds as needed to support anticipated future loan growth." "We have accomplished this through positions in short-term investment securities and interest-bearing bank deposits that have the near-term effect of reducing the net interest margin due to the lower yields on these types of investments. Our strategy is to redeploy these funds in loans, with a resulting improvement in yields," according to Cappelli. During the third quarter, Sterling's loan portfolio rose 13% to a record $1.5 billion. Meanwhile, total deposits increased 24% to $2 billion. The third-quarter loan loss provision fell to $3 million from $14 million a year earlier, suggesting the credit quality of its assets has improved. Write to Kerri Panchuk.