<PAGE> 1
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
September 30, 1994
For Quarter Ended..............................................................
1-5273-1
Commission file number.........................................................
Sterling Bancorp
...............................................................................
(Exact name of registrant as specified in its charter)
New York 13-2565216
................................................................................
(State or other jurisdiction of Employer (I.R.S.
incorporation or organization) Identification No.)
540 Madison Avenue, New York, N.Y. 10022-3299
................................................................................
(Address of principal executive offices) (Zip Code)
212-826-8000
................................................................................
(Registrant's telephone number, including area code)
N/A
................................................................................
(Former name, former address and former fiscal year, if
changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
--- ---
As of September 30, 1994 there were outstanding 6,346,212 shares of
common stock, $1.00 par value, the registrant's only class of common shares
outstanding.
<PAGE> 2
STERLING BANCORP
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION Page
----
<S> <C>
Item 1. Financial Statements
Consolidated Financial Statements 3
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Business Financial Condition 8
Credit Risk 10
Results of Operations 11
Average Balance Sheets 14
Rate/Volume Analysis 16
Interest Rate Sensitivity 18
Risk-Based Capital Components and Ratios 19
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 20
SIGNATURES 20
EXHIBIT INDEX 21
Exhibit 11 Computation of Per Share Earnings 22
Exhibit 27 Financial Data Schedule 23
</TABLE>
2
<PAGE> 3
STERLING BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1994 1993
------------ ------------
<S> <C> <C>
Cash and due from banks $ 38,939,108 $ 35,975,787
Interest-bearing deposits with other banks 2,970,000 2,970,000
Federal funds sold 5,000,000 --
Securities
Available for sale 74,696,411 91,125,104
Held to maturity (market value
$232,964,943 and $196,784,084, respectively) 245,751,133 195,690,687
------------ ------------
Total securities 320,447,544 286,815,791
------------ ------------
Loans, net of unearned discounts 293,164,012 298,750,821
Less allowance for possible loan losses 3,879,330 3,413,947
------------ ------------
Loans, net 289,284,682 295,336,874
------------ ------------
Customers' liability under acceptances 632,492 201,669
Excess cost over equity in net assets of the
banking subsidiary 21,158,440 21,158,440
Premises and equipment, net 3,346,358 2,593,890
Other assets 10,414,961 7,986,790
------------ ------------
$692,193,585 $653,039,241
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing deposits $153,542,261 $174,088,971
Interest-bearing deposits 317,739,672 298,896,955
------------ ------------
Total deposits 471,281,933 472,985,926
Securities sold under repurchase agreements 64,349,163 37,225,000
Commercial paper 13,930,500 14,320,400
Other short-term borrowings 18,072,794 13,613,964
Acceptances outstanding 632,492 201,669
Other liabilities 18,406,523 9,420,630
------------ ------------
586,673,405 547,767,589
------------ ------------
Long-term convertible subordinated debentures 26,546,000 26,892,000
Other long-term debt 25,500,000 25,500,000
------------ ------------
Total long-term debt 52,046,000 52,392,000
------------ ------------
Total liabilities 638,719,405 600,159,589
------------ ------------
Commitments and contingent liabilities
Convertible preferred stock, Series D
- market value guarantee feature 750,000 562,500
Less unearned compensation - unallocated shares 719,364 539,523
Shareholders' equity
Preferred shares, $5 par value. Authorized 644,389 shares
Series B 25,760 25,760
Series D 1,750,000 1,937,500
Common shares, $1 par value. Authorized 20,000,000 shares;
issued 6,496,605 shares 6,496,605 6,496,605
Capital surplus 28,089,487 28,089,487
Retained earnings 20,816,219 18,920,583
Net unrealized (depreciation) appreciation on securities
available for sale, net of tax effect (566,422) 734,686
------------ ------------
56,611,649 56,204,621
Less:
Common shares in treasury at cost, 150,393 shares 1,489,589 1,489,589
Unearned compensation 1,678,516 1,858,357
------------ ------------
53,443,544 52,856,675
------------ ------------
$692,193,585 $653,039,241
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE> 4
STERLING BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 6,206,179 $ 4,725,689 $16,785,875 $12,867,620
Interest and dividends on securities
Available for sale 1,217,665 -- 3,341,414 --
Held to maturity 3,859,253 3,355,464 10,869,823 10,949,665
Interest on Federal funds sold 102,405 16,081 194,540 131,833
Interest on deposits with other banks 32,541 22,903 85,842 74,733
----------- ----------- ----------- -----------
Total interest income 11,418,043 8,120,137 31,277,494 24,023,851
----------- ----------- ----------- -----------
INTEREST EXPENSE
Interest on deposits 2,355,381 1,646,714 5,828,689 5,072,177
Interest on Federal funds purchased
and securities sold under
repurchase agreements 609,629 226,967 1,477,872 551,782
Interest on commercial paper 137,416 107,550 364,472 311,283
Interest on other short-term borrowings 109,115 32,021 482,364 96,803
Interest on long-term debt 862,352 491,064 2,402,593 1,467,302
----------- ----------- ----------- -----------
Total interest expense 4,073,893 2,504,316 10,555,990 7,499,347
----------- ----------- ----------- -----------
Net interest income 7,344,150 5,615,821 20,721,504 16,524,504
Provision for possible loan losses 310,000 185,000 700,000 505,000
----------- ----------- ----------- -----------
Net interest income after provision
for possible loan losses 7,034,150 5,430,821 20,021,504 16,019,504
----------- ----------- ----------- -----------
NONINTEREST INCOME
Service charges on deposit accounts 407,784 309,293 1,032,079 825,437
Factoring and letters of credit
commissions 414,705 343,302 1,268,784 961,929
Trust fees 174,474 225,127 435,089 641,621
Gain on sale of securities -- -- 42,361 --
Other 146,742 168,399 392,447 438,509
----------- ----------- ----------- -----------
Total noninterest income 1,143,705 1,046,121 3,170,760 2,867,496
----------- ----------- ----------- -----------
NONINTEREST EXPENSES
Salaries and employee benefits 3,188,859 2,751,655 8,940,408 8,017,543
Occupancy 637,262 672,734 1,877,918 1,916,530
Equipment 302,913 276,804 979,419 812,569
Legal and other professional fees 61,788 229,507 645,066 634,680
Federal deposit insurance premium 247,728 227,223 734,184 683,351
Marketing 165,133 145,000 466,687 380,588
Other 751,553 717,112 2,675,656 2,094,814
----------- ----------- ----------- -----------
Total noninterest expenses 5,355,236 5,020,035 16,319,338 14,540,075
----------- ----------- ----------- -----------
Income before income taxes 2,822,619 1,456,907 6,872,926 4,346,925
Provision for income taxes 1,847,858 651,161 4,025,294 1,997,457
----------- ----------- ----------- -----------
Net income $ 974,761 $ 805,746 $ 2,847,632 $ 2,349,468
=========== =========== =========== ===========
Average number of common shares outstanding 6,363,345 6,346,890 6,360,886 6,346,329
=========== =========== =========== ===========
Per average common share
Net income $0.16 $0.13 $0.45 $0.37
===== ===== ===== =====
Average number of common shares outstanding
assuming full dilution 8,979,701 8,829,730 8,980,574 8,770,833
=========== =========== =========== ===========
Per average common share assuming
full dilution
Net income $0.13 $0.12 $0.40 $0.35
===== ===== ===== =====
Dividends paid per common share $0.05 $0.05 $0.15 $0.15
===== ===== ===== =====
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE> 5
STERLING BANCORP AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders' Equity
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1994 1993
------------ ------------
<S> <C> <C>
Shareholders' equity at beginning of period $ 52,856,675 $ 50,150,005
------------ ------------
Net income 2,847,632 2,349,468
Dividends declared:
Common stock - $.15 per share (951,932) (951,932)
Preferred stock at prescribed rates (64) (89,390)
Conversion of subordinated debentures
into common stock -- 6,815
Issuance of Series D preferred shares -- 2,500,000
Unearned compensation - Series D shares -- (2,500,000)
Change in market value guarantee feature
Convertible preferred stock, Series D (7,659) --
Unearned compensation - unallocated shares -- --
Change in valuation account for securities
available for sale, net of tax effect ( 1,301,108) --
------------ ------------
Net change in shareholders' equity 586,869 1,314,961
------------ ------------
Shareholders' equity at end of period $ 53,443,544 $ 51,464,966
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE> 6
STERLING BANCORP AND SUBSIDIARIES
Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1994 1993
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 2,847,632 $ 2,349,468
Adjustments to reconcile net income to net cash
from operating activities:
Provision for possible loan losses 700,000 505,000
Allowance of acquired portfolio -- 209,628
Depreciation and amortization of premises and equipment 371,997 329,645
Deferred income tax (benefit) provision (369,638) 166,321
Gain on sale of securities (42,361) --
Amortization of premiums on securities 2,365,159 2,959,798
Accretion of discounts on securities (115,206) (32,160)
(Increase) in accrued interest receivable (590,432) (945,207)
Increase in other liabilities 8,985,893 141,406
Other, net (361,543) (374,003)
------------ ------------
Net cash provided by operating activities 13,791,501 5,309,896
------------ ------------
INVESTING ACTIVITIES
Purchase of premises and equipment (1,124,465) (348,936)
Net decrease in interest-bearing deposits
with other banks -- 660,000
Net (increase) in Federal funds sold (5,000,000) (20,000,000)
Net decrease in loans 5,352,192 64,201,939
Proceeds from sale of securities 9,955,694 --
Proceeds from prepayments, redemptions or maturities
of securities 90,545,191 104,452,544
Purchase of securities (138,747,896) (155,290,025)
------------ ------------
Net cash used by investing activities (39,019,284) (6,324,478)
------------ ------------
FINANCING ACTIVITIES
Net decrease in noninterest-bearing deposits (20,546,710) (26,099,499)
Net increase (decrease) in interest-bearing deposits 18,842,717 (19,453,855)
Net increase in securities sold under
repurchase agreements 27,124,163 36,211,574
Net increase in other short-term borrowings 4,068,930 15,661,675
Cash dividends paid on common and preferred shares (951,996) (1,041,322)
Issuance of Series D preferred shares -- 2,500,000
Maturities and prepayments on debentures (7,366,000) (7,852,185)
Issuance of long-term debt 7,020,000 2,500,000
Funding provided for purchase of Series D
preferred shares -- (2,500,000)
------------- ------------
Net cash provided (used) by financing activities 28,191,104 (73,612)
------------ ------------
Net increase (decrease) in cash and due from banks 2,963,321 (1,088,194)
Cash and due from banks - beginning of period 35,975,787 37,168,675
------------ ------------
Cash and due from banks - end of period $ 38,939,108 $ 36,080,481
============ ============
Supplemental disclosure of cash flow information:
Interest paid $ 9,679,021 $ 8,501,095
Income taxes paid 3,395,097 977,200
Supplemental schedule of non-cash financing activities:
Change in valuation account for securities available for sale,
net of tax effect $ (1,301,108) $ --
Conversion of debentures -- 3,815
</TABLE>
See Notes to Consolidated Financial Statements.
6
<PAGE> 7
STERLING BANCORP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. The consolidated financial statements include the accounts of
Sterling Bancorp ("the Parent Company") and its subsidiaries,
principally Sterling National Bank & Trust Company of New York
("the bank"), after elimination of material intercompany
transactions. The term "the Company" refers to Sterling Bancorp
and its subsidiaries. The consolidated financial statements as of
and for the interim periods ended September 30, 1994 and 1993 are
unaudited; however, in the opinion of management, all adjustments,
consisting of normal recurring accruals, necessary for a fair
presentation of such periods have been made. The interim financial
statements should be read in conjunction with the Company's annual
report on Form 10-K for the year ended December 31, 1993.
2. For purposes of reporting cash flows, cash and cash equivalents
include cash and due from banks.
3. During the first quarter of 1993, the Company established an
Employee Stock Ownership Plan ("ESOP"), which replaces the
profit-sharing plans. This plan covers substantially all
employees with one or more years of service of at least 1,000
hours who are at least 21 years of age. A trust established under
the ESOP borrowed $2,500,000 from Sterling National Bank and
purchased 250,000 shares of the parent company's new issue of ESOP
Preferred Stock, Series D, which are convertible into 250,000
common shares and have voting rights equivalent to the common
shares. Shares purchased by the ESOP are held in a suspense
account for allocation among the participants as the loan is paid.
Under the terms of the ESOP, participants may vote both allocated
and unallocated shares.
The ESOP is to be funded by cash contributions made by the
Company. Contributions to the ESOP and shares released from the
suspense account are allocated among the participants on the basis
of salary in the year of allocation.
4. The Company's outstanding Preferred Shares comprise 1,288 Series
B shares (of 4,389 authorized) and 250,000 Series D Shares (of
300,000 authorized). Each Series B share is entitled to cumulative
dividends at the rate of $0.10 per year, to one vote per share
and upon liquidation or redemption to an amount equal to accrued
and unpaid dividends to the date of redemption or liquidation plus
an amount which is $20 in the case of involuntary liquidation and
$28 otherwise; each Series D share (all of such shares are owned
by the Company's Employee Stock Ownership Trust) is entitled to
dividends at the rate of $0.6125 per year, is convertible into
one Common Share, and is entitled to a liquidation preference of
$10 (together with accrued dividends). All preferred shares are
entitled to one vote per share (voting with the Common Shares
except as otherwise required by law).
7
<PAGE> 8
STERLING BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
BUSINESS
Sterling Bancorp (the parent company) is a bank holding company, as defined by
the Bank Holding Company Act of 1956, as amended, with subsidiaries engaged
principally in commercial banking as well as accounts receivable financing,
factoring and other financial services. The parent company owns virtually 100%
of Sterling National Bank & Trust Company of New York (the bank), its principal
subsidiary, all of the outstanding shares of Standard Factors Corporation,
Universal Finance Corporation, Sterling Banking Corporation and virtually 100%
of Security Industrial Loan Association (finance subsidiaries). As used
throughout this report, "the Company" refers to Sterling Bancorp and its
subsidiaries.
There is intense competition in all areas in which the Company conducts its
business, including deposits, loans, domestic and international financing and
trust services. In addition to competing with other banks, the Company also
competes in certain areas of its business with many other financial
institutions. At September 30, 1994, the bank's year to date average earning
assets (of which loans were 40% and securities were 58%) represented
approximately 96% of the Company's year to date average earning assets. See
pages 14 and 15 for the composition of the Company's average balance sheets for
the three and nine months ended September 30, 1994 and September 30, 1993.
FINANCIAL CONDITION
Liquidity is the ability to meet cash needs arising from changes in various
categories of assets and liabilities. Liquidity is constantly monitored and
managed at both the parent company and the bank levels. Liquid assets consist
of cash and due from banks, interest-bearing deposits in banks and Federal
funds sold and securities available for sale. Primary funding sources include
core deposits, capital market funds and other money market sources. Core
deposits include domestic noninterest-bearing and interest- bearing retail
deposits, which historically have been relatively stable. The parent company
and the bank have significant unused borrowing capacity. Contingency plans
exist and could be implemented on a timely basis to minimize the impact of any
dramatic change in market conditions.
While the parent company generates income from its own operations, it also
depends for its cash requirements on funds maintained or generated by its
subsidiaries, principally the bank. Such sources have been adequate to meet
the parent company's cash requirements throughout its history. At September
30, 1994, the parent company had on hand approximately $14,390,136 in cash.
Various legal restrictions limit the extent to which the bank can supply funds
to the parent company and its non-bank subsidiaries. All national banks are
limited in the payment of dividends without the approval of the Comptroller of
the Currency (the Comptroller) to an amount not to exceed the net profits (as
defined) for that year to date combined with its retained net profits for the
preceding two calendar years. The bank with the Comptroller's approval paid
dividends aggregating $37,330,419 in 1992 (significantly exceeding net profits)
as well as dividends aggregating $2,599,314 during 1993 and $2,724,797 to date
in 1994. The bank's net income was $3,463,950 for 1993 and $3,277,805 for the
nine months ended September 30, 1994. In addition, from time to time dividends
are paid to the parent company by other subsidiaries from their retained
earnings without regulatory restrictions.
8
<PAGE> 9
STERLING BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The parent company's long-term indebtedness is also met through funds generated
from profits and new financing. Since becoming a public company in 1946, the
parent company and its predecessors have been able to obtain the financing
required and have paid at maturity all outstanding long-term indebtedness. The
parent company expects to continue to meet its obligations in accordance with
their terms. At September 30, 1994, the parent company's outstanding long-term
debt, consisting principally of convertible subordinated debentures (primarily
originally issued pursuant to rights offerings to shareholders of the Company),
aggregated $29,046,000. To the extent convertible subordinated debentures are
converted to common stock of the parent company (as has been the case with
$11,000,000 principal amount since 1982), the subordinated debt related thereto
is retired and becomes part of shareholders' equity. On June 9, 1994 the
parent company offered to exchange its Third Series Debentures due July 1, 1996
for Fifth Series Debentures due July 1, 2001. Both Series of debentures bear
a floating interest rate equal to one half of one percent ( 1/2%) above the
daily average reference rate of interest of a designated major New York City
bank, payable semi-annually, and are convertible into the parent company's
common stock as follows - Third Series, at $12.00 and Fifth Series, at 8.75.
Following the expiration of the exchange offer on July 29, 1994, $7,020,000
principal amount of Third Series Debentures were exchanged for Fifth Series
Debentures.
At September 30, 1994, the parent company's short-term debt, consisting solely
of commercial paper, was approximately $13,930,000. The parent company had
cash, interest-bearing deposits with banks and other current assets
aggregating $31,031,000 and back-up credit lines with banks of $15,000,000.
The parent company and its predecessor have issued and repaid at maturity
approximately $12 billion of commercial paper since 1955. Since 1979, the
parent company has had no need to use available back-up lines of credit.
The bank's asset-liability management program is designed to achieve acceptable
yields while managing interest rate risk, maturity distribution and credit
risk. At September 30, 1994, the bank maintained a portfolio of securities
totalling $320,402,000 of which U.S. Government and U.S. Government
corporation and agency guaranteed mortgage backed securities having an average
life of approximately 3 1/2 years amounted to $306,980,000. As of December 31,
1993, the bank adopted Statement of Financial Accounting Standards ("SFAS") No.
115 "Accounting for Certain Investments in Debt and Equity Securities". As a
result of the adoption of SFAS No. 115, the bank reclassified securities as
either "held to maturity" or "available for sale". The bank has the intent and
ability to hold to maturity securities classified "held to maturity". These
securities are carried at cost, adjusted for amortization of premiums and
accretion of discounts. At September 30, 1994, the gross unrealized gains and
losses on "held to maturity" securities were $75,000 and $12,860,000,
respectively. Securities classified as "available for sale" may be sold in the
future, prior to maturity. These securities are carried at market value. Net
aggregate unrealized gains or losses on these securities are included in a
valuation allowance account and are shown net of taxes, as a component of
shareholder's equity. "Available for sale" securities included gross
unrealized gains of $26,000 and gross unrealized losses of $1,072,000 at
September 30, 1994. During the nine months ended September 30, 1994 securities
in the "available for sale" portfolio with a carrying value of $9,913,000
were sold at a net gain of $42,361.
9
<PAGE> 10
STERLING BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company and the bank are subject to risk-based capital regulations. The
purpose of these regulations is to measure capital against risk-weighted
assets, including off-balance sheet items. These regulations define the
elements of total capital into Tier 1 and Tier 2 components and establish
minimum ratios of 4% for Tier 1 capital and 8% for Total Capital.
Supplementing these regulations, is a leverage requirement. This requirement
establishes a minimum leverage ratio, (at least 3%) which is calculated by
dividing Tier 1 capital by adjusted average assets (after deducting goodwill).
At September 30, 1994, the risk-based capital ratios and the leverage ratio for
the Company and the bank significantly exceeded the required ratios.
Information regarding the Company's and the bank's risk-based capital, at
September 30, 1994 and December 31, 1993, is presented on page 19.
While the past performance is no guarantee of the future, management believes
that the Company's funding sources (including dividends from all its
subsidiaries) and the bank's funding sources will be adequate to meet their
liquidity and capital requirements in the future.
CREDIT RISK
A key management objective is to maintain the quality of the loan portfolio.
This objective is achieved by maintaining high underwriting standards coupled
with regular evaluation of the creditworthiness of and the designation of a
lending limit for each borrower. The portfolio strategies seek to avoid
concentrations by industry or loan size in order to minimize credit exposure
and to originate loans in markets with which it is familiar. The composition
of the Company's and the bank's loan portfolio at September 30, 1994 were as
follows:
<TABLE>
<CAPTION>
Company Bank
------------ ------------
(in thousands)
<S> <C> <C>
Domestic
Commercial and industrial $ 248,075 $ 225,218
Real estate - mortgage 39,122 39,122
Real estate - construction 1,429 1,429
Installment - individuals 8,751 8,751
Foreign
Government and official institutions 789 789
---------- ----------
Loans, gross 298,166 275,309
Less unearned discounts 5,002 4,751
---------- ----------
Loans, net of unearned discounts $ 293,164 $ 270,558
========== ==========
</TABLE>
The Company's commercial and industrial loan, which represents approximately
83% of gross loans, are substantially dependent on the borrower's ability to
repay the loan out of profits and cash flows of the borrower's business and the
assets underlying the borrower's business, such as accounts receivable,
equipment, inventory and real property, which in many cases are pledged as
collateral. The Company's real estate mortgage loan portfolio, which
represents approximately 13% of gross loans, is secured by mortgages on real
property located principally in the city of New York and the state of Virginia.
The collateral securing any loan may vary in value based on the success of the
business and economic conditions.
10
<PAGE> 11
STERLING BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Intrinsic to the lending process is the possibility of loss. In times of
economic slowdown, the risk inherent in the Company's portfolio of loans is
increased. While management endeavors to minimize this risk, it recognizes
that loan losses will occur and that the amount of these losses will fluctuate
depending on the risk characteristics of the loan portfolio which in turn
depends on current and expected economic conditions, the financial condition of
borrowers and the credit management process.
The allowance for possible loan losses is maintained through the provision for
possible loan losses, which is a charge to operating earnings. The adequacy of
the provision and the resulting allowance for possible loan losses is
determined by management's continuing review of the loan portfolio, including
identification and review of individual problem situations that may affect the
borrower's ability to repay, review of overall portfolio quality through an
analysis of current charge-offs, delinquency and nonperforming loan data,
estimates of the value of any underlying collateral, review of regulatory
examinations, an assessment of current and expected economic conditions and
changes in the size and character of the loan portfolio. Thus, the allowance
level reflects identified loss potential and inherent risk in the portfolio. A
significant change in any of the evaluation factors described above could
result in future additions in the allowance. At September 30, 1994, the ratio
of the allowance to loans, net of unearned discounts, was 1.32%. At September
30, 1994, the Company's allowance, was $3,879,000 and its non-accrual loans
amounted to $858,000. Based on the foregoing, as well as management's
judgement as to the current risks inherent in the loan portfolio, the Company's
allowance for possible loan losses was deemed adequate to absorb all reasonably
anticipated losses on specifically known and other possible credit risks
associated with the portfolio as of September 30, 1994.
RESULTS OF OPERATIONS
The Company's earnings are primarily dependent on net interest income which can
be affected by changes in interest rates. An analysis of the Company's
interest rate sensitivity is presented on page 18. Net interest income varies
with the mix of interest- earning assets and interest-bearing liabilities and
their respective yields earned and rates paid. The increases (decreases) for
the components of interest income and interest expense, expressed in terms of
fluctuation in average volume and rate are shown on page 16 and 17.
Information as to the components of interest income and interest expense and
average rates is provided in the Average Balance Sheets shown on page 14 and
15.
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1994 AND SEPTEMBER 30, 1993
The increase of $3,298,000 in total interest income for the third quarter of
1994 when compared with the same period in 1993 was principally due to higher
average funds employed. An increase in average securities outstandings,
resulted in an increase in income from securities of $1,721,000. Higher
average outstandings employed at higher rates resulted in an increase of
$1,481,000 in interest and fees on loans.
11
<PAGE> 12
STERLING BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Total interest expense for the three months ended September 30, 1994 increased
$1,570,000 when compared with the same period in 1993 principally due to higher
average balances. Higher outstandings and rates paid resulted in an increase
of $709,000 in interest expense on savings and time deposits. Interest expense
associated with borrowings was increased $861,000 principally due to higher
outstandings.
Based on management's continuing evaluation of the collectibility of the loan
portfolio, $310,000 was provided for possible loan losses for the three months
ended September 30, 1994.
Noninterest income increased $98,000 for the third quarter of 1994 when
compared with the same period in 1993 as the result of higher service charges
on deposit accounts and higher volume for letters of credit and factoring
services partially offset by lower fee income for trust services.
Noninterest expenses increased $335,000 for the three months ended September
30, 1994 versus the same period last year. Salaries and employee benefits
expense increased $437,000 principally due to higher costs for pension and
other benefit plans.
Due to the higher level of pre-tax profitability and additional provisions for
unresolved state tax issues, the provision for income taxes increased
$1,197,000 for the third quarter 1994 when compared with the same period last
year.
As a result of the above factors, net income increased $169,000 for the three
months ended September 30, 1994 when compared with the same period in 1993.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1994 AND SEPTEMBER 30, 1993
The increase of $7,253,000 in total interest income for the nine months ended
September 30, 1994 compared with the same period in 1993 was due to higher
average funds employed at slightly higher yields. An increase in average
securities outstandings at higher yields, resulted in an increase in income
from securities of $3,261,000. Higher average outstandings employed at higher
rates resulted in an increase of $3,919,000 in interest and fees on loans.
Total interest expense for the nine months ended September 30, 1994 increased
$3,057,000 when compared with the same period in 1993 principally due to higher
average balances. Interest expense associated with borrowings was increased
$2,300,000 principally due to higher outstandings.
Based on management's continuing evaluation of the collectibility of the loan
portfolio, $700,000 was provided for possible loan losses for the nine months
ended September 30, 1994.
Noninterest income increased $303,000 for the first nine months of 1994 when
compared with the same period in 1993 as the result of higher service charges
on deposit accounts and higher volume for letters of credit and factoring
services partially offset by lower fee income for trust services.
12
<PAGE> 13
STERLING BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Noninterest expenses increased $1,779,000 for the nine months ended September
30, 1994 versus the same period last year. Salaries and employee benefits
expense increased $923,000 principally due to higher costs for pension and
other benefit plans. Equipment expense increased $167,000 as a result of
higher costs for equipment rentals and maintenance contracts coupled with
upgrading non- capitalized computer equipment and peripherals. Marketing
expenses increased $86,000 reflecting higher costs associated with the
Company's business development efforts. The increase of $580,000 in other
expenses was attributable to expenses related to the parent company's debt
exchange ($172,000) and higher general business costs.
Due to the higher level of pre-tax profitability and additional provisions for
unresolved state tax issues, the provision for income taxes increased
$2,028,000 for the first nine months of 1994 when compared with the same period
last year.
As a result of the above factors, net income increased $498,000 for the nine
months ended September 30, 1994 when compared with the same period in 1993.
13
<PAGE> 14
STERLING BANCORP AND SUBSIDIARIES
Average Balance Sheets [1]
Three Months Ended September 30,
<TABLE>
<CAPTION>
1994 1993
----------------------------------- -----------------------------------
Average Average Average Average
ASSETS Balance Interest Rate Balance Interest Rate
-------- -------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Interest-bearing deposits
with other banks $ 2,970 $ 33 4.41% $ 2,989 $ 23 3.04%
Securities
Available for sale [2] 82,819 1,218 5.86 -- -- --
Held to maturity 246,321 3,859 6.21 244,412 3,356 5.45
Federal funds sold 8,913 102 4.54 1,978 16 3.23
Loans, net of unearned
discounts [3] 253,489 6,206 9.75 246,136 4,725 6.93
-------- -------- -------- --------
TOTAL EARNING ASSETS 594,512 11,418 7.63 495,515 8,120 6.51
-------- ------ -------- ------
Cash and due from banks 38,536 32,911
Allowance for possible
loan losses (3,934) (3,198)
Goodwill 21,158 21,158
Other assets 15,192 10,789
-------- --------
TOTAL ASSETS $665,464 $557,175
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing deposits
Savings $173,293 779 1.78 $203,383 1,037 2.02
Other time 145,686 1,577 4.15 87,204 610 2.77
-------- -------- -------- --------
Total interest-bearing
deposits 318,979 2,356 2.86 290,587 1,647 2.25
-------- -------- -------- --------
Borrowings
Federal Funds purchased
and securities sold under
agreements to repurchase 59,338 610 4.08 31,742 227 2.84
Commercial paper 14,516 137 3.74 16,386 107 2.61
Other short-term debt 10,601 109 4.08 4,434 32 2.86
Long-term debt 52,072 862 6.57 32,316 491 6.03
-------- -------- -------- --------
Total borrowings 136,527 1,718 4.99 84,878 857 4.01
-------- -------- -------- --------
TOTAL INTEREST-BEARING
LIABILITIES 455,506 4,074 3.51 375,465 2,504 2.65
-------- ----- -------- -----
Noninterest-bearing deposits 139,123 122,738
Other liabilities 17,188 7,545
-------- --------
Total liabilities 611,817 505,748
Shareholders' equity 53,647 51,427
-------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $665,464 $557,175
======== ========
Net interest income/spread $ 7,344 4.12% $ 5,616 3.86%
========= ==== ======== =====
Net yield on earning assets
(margin) 4.87% 4.50%
==== =====
</TABLE>
[1] The average balances of assets, liabilities and shareholders' equity are
computed on the basis of daily averages for the bank and monthly
averages for the parent company and its finance subsidiaries. Dollars
are presented in thousands.
[2] Based on amortized or historical cost with the FASB 115 market value
adjustment included in other assets.
[3] Non-accrual loans are included in the average balance which reduces the
average yields.
14
<PAGE> 15
STERLING BANCORP AND SUBSIDIARIES
Average Balance Sheets [1]
Nine Months Ended September 30,
<TABLE>
<CAPTION>
1994 1993
----------------------------------- -----------------------------------
Average Average Average Average
ASSETS Balance Interest Rate Balance Interest Rate
-------- -------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Interest-bearing deposits
with other banks $ 2,961 $ 86 3.88% $ 3,169 $ 75 3.15%
Securities
Available for sale [2] 83,783 3,341 5.32 -- -- --
Held to maturity 238,909 10,870 6.70 244,361 10,950 5.99
Federal funds sold 6,209 195 4.18 5,762 132 3.06
Loans, net of unearned
discounts [3] 247,798 16,786 9.24 227,988 12,867 6.98
-------- -------- -------- --------
TOTAL EARNING ASSETS 579,660 31,278 7.19 481,280 24,024 6.40
-------- ------ -------- ------
Cash and due from banks 40,459 33,199
Allowance for possible
loan losses (3,701) (3,117)
Goodwill 21,158 21,158
Other assets 14,161 10,892
-------- --------
TOTAL ASSETS $651,737 $543,412
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing deposits
Savings $179,768 2,453 1.82 $199,678 3,378 2.26
Other time 120,282 3,376 3.74 86,096 1,694 2.62
-------- -------- -------- --------
Total interest-bearing
deposits 300,050 5,829 2.59 285,774 5,072 2.37
-------- -------- -------- --------
Borrowings
Federal funds purchased
and securities sold under
agreements to repurchase 57,905 1,478 3.41 25,566 552 2.89
Commercial paper 14,540 364 3.35 14,863 311 2.80
Other short-term debt 17,335 482 3.72 4,592 97 2.82
Long-term debt 52,194 2,403 6.16 30,967 1,467 6.33
--------- -------- -------- --------
Total borrowings 141,974 4,727 4.45 75,988 2,427 4.27
-------- -------- -------- --------
TOTAL INTEREST-BEARING
LIABILITIES 442,024 10,556 3.19 361,762 7,499 2.77
-------- ----- -------- -----
Noninterest-bearing deposits 142,413 123,012
Other liabilities 14,071 7,807
-------- --------
Total liabilities 598,508 492,581
Shareholders' equity 53,229 50,831
-------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $651,737 $543,412
======== ========
Net interest income/spread $ 20,722 4.00% $ 16,525 3.63%
======== ==== ======== =====
Net yield on earning assets
(margin) 4.79% 4.32%
==== =====
</TABLE>
[1] The average balances of assets, liabilities and shareholders' equity are
computed on the basis of daily averages for the bank and monthly
averages for the parent company and its finance subsidiaries. Dollars
are presented in thousands.
[2] Based on amortized or historical cost with the FASB 115 market value
adjustment included in other assets.
[3] Non-accrual loans are included in the average balance which reduces the
average yields.
15
<PAGE> 16
STERLING BANCORP AND SUBSIDIARIES
Rate/Volume Analysis
Three Months Ended September 30,
(000 omitted)
<TABLE>
<CAPTION>
Increase/(Decrease)
Three Months Ended
September 30, 1994 and 1993
---------------------------------
Volume Rate Total[1]
-------- ------- --------
<S> <C> <C> <C>
INTEREST INCOME
Interest-bearing deposits with other banks $ -- $ 10 $ 10
-------- ------- -------
Securities
Available for sale 609 609 1,218
Held to maturity [2] 31 472 503
------- ------- -------
Total 640 1,081 1,721
------- ------- -------
Federal funds sold 68 18 86
------- ------- -------
Loans, net of unearned discounts [3] (70) 1,551 1,481
------- ------- -------
TOTAL INTEREST INCOME $ 638 $ 2,660 $ 3,298
======= ======= =======
INTEREST EXPENSE
Interest-bearing deposits
Savings $ (145) $ (113) $ (258)
Other time 537 430 967
------- ------- -------
Total 392 317 709
------- ------- -------
Borrowings
Securities sold under agreements to repurchase 241 142 383
Commercial paper (15) 45 30
Other short-term debt 54 23 77
Long-term debt 314 57 371
------- ------- -------
Total 594 267 861
------- ------- -------
TOTAL INTEREST EXPENSE $ 986 $ 584 $ 1,570
======= ======= =======
NET INTEREST INCOME $ (348) $ 2,076 $ 1,728
======= ======= =======
</TABLE>
[1] The rate/volume variance is allocated equally between changes in volume
and rate.
[2] Includes Federal Reserve Bank and other stock investments.
[3] Non-accrual loans have been included in the amounts outstanding and
income has been included to the extent accrued.
16
<PAGE> 17
STERLING BANCORP AND SUBSIDIARIES
Rate/Volume Analysis
Nine Months Ended September 30,
(000 omitted)
<TABLE>
<CAPTION>
Increase/(Decrease)
Nine Months Ended
September 30, 1994 and 1993
------------------------------------
Volume Rate Total[1]
------- ------- --------
<S> <C> <C> <C>
INTEREST INCOME
Interest-bearing deposits with other banks $ (6) $ 17 $ 11
------- ------- -------
Securities
Available for sale 1,671 1,670 3,341
Held to maturity [2] (811) 731 (80)
------- ------- -------
Total 860 2,401 3,261
------- ------- -------
Federal funds sold 12 50 62
------- ------- -------
Loans, net of unearned discounts [3] 550 3,369 3,919
------- ------- -------
TOTAL INTEREST INCOME $ 1,416 $ 5,837 $ 7,253
======= ======= =======
INTEREST EXPENSE
Interest-bearing deposits
Savings $ (305) $ (620) $ (925)
Other time 820 862 1,682
------- ------- -------
Total 515 242 757
------- ------- -------
Borrowings
Securities sold under agreements to repurchase 762 164 926
Commercial paper (7) 60 53
Other short-term debt 311 74 385
Long-term debt 991 (55) 936
------- ------- -------
Total 2,057 243 2,300
------- ------- -------
TOTAL INTEREST EXPENSE $ 2,572 $ 485 $ 3,057
======= ======= =======
NET INTEREST INCOME $(1,155) $ 5,352 $ 4,196
======= ======= =======
</TABLE>
[1] The rate/volume variance is allocated equally between changes in volume
and rate.
[2] Includes Federal Reserve Bank and other stock investments.
[3] Non-accrual loans have been included in the amounts outstanding and
income has been included to the extent accrued.
17
<PAGE> 18
STERLING BANCORP AND SUBSIDIARIES
Interest Rate Sensitivity
To mitigate the vulnerability of earnings to changes in interest rates, the
Company manages the repricing characteristics of assets and liabilities in an
attempt to control net interest rate sensitivity. Management attempts to
confine significant rate sensitivity gaps predominantly to repricing intervals
of a year or less so that adjustments can be made quickly. Assets and
liabilities with predetermined repricing dates are placed in a time of the
earliest repricing period. Based on the interest rate sensitivity analysis
shown below, the Company's net interest income would decrease during periods of
rising interest rates and increase during periods of falling interest rates.
Amounts are presented in thousands.
<TABLE>
<CAPTION>
Repricing Date
--------------------------------------------------------------------------------------
More than Non
3 months 3 months 1 year to Over Rate
or less to 1 year 5 years 5 years Sensitive Total
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-bearing deposits
with other banks $ 1,200 $ 1,770 $ -- $ -- $ -- $ 2,970
Securities 6,000 1,030 48,186 257,274 7,958 320,448
Federal funds sold 5,000 -- -- -- -- 5,000
Loans, net of unearned
discounts 257,430 1,322 19,568 19,595 (4,751) 293,164
Noninterest-earnings assets
and allowance for possible
loan losses: -- -- -- -- 70,612 70,612
--------- ---------- ---------- ---------- --------- ---------
Total Assets 269,630 4,122 67,754 276,869 73,819 692,194
--------- --------- --------- --------- --------- ---------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing deposits 149,553 16,825 151,362 -- -- 317,740
Securities sold under
repurchase agreements 58,349 6,000 -- -- -- 64,349
Commercial paper 13,931 -- -- -- -- 13,931
Other short-term borrowings 18,073 -- -- -- -- 18,073
Long-term debt 26,546 -- 24,100 1,400 -- 52,046
Noninterest-bearing
liabilities and share-
holders' equity -- -- -- -- 226,055 226,055
--------- ---------- ---------- ---------- --------- ---------
Total Liabilities and
Shareholders' Equity $ 266,452 $ 22,825 $ 175,462 $ 1,400 $ 226,055 $ 692,194
========= ========= ========= ========= ========= =========
Net Interest Rate
Sensitivity Gap $ 3,178 $ (18,703) $(107,708) $ 275,469 $(152,236) $ --
========= ========= ========= ========= ========= ==========
Cumulative Gap at
September 30, 1994 $ 3,178 $ (15,525) $(123,233) $ 152,236 $ -- $ --
========= ========= ========= ========= ========== ==========
Cumulative Gap at
September 30, 1993 $ (40,124) $ (41,264) $ (58,594) $ 131,570 $ -- $ --
========= ========= ========= ========= ========== ==========
Cumulative Gap at
December 31, 1993 $ 29,476 $ 9,319 $ (59,671) $ 170,526 $ -- $ --
========= ========= ========= ========= ========== ==========
</TABLE>
18
<PAGE> 19
STERLING BANCORP AND SUBSIDIARIES
Risk-Based Capital Components and Ratios
<TABLE>
<CAPTION>
The Company The Bank
------------------------- -----------------------
09/30/94 12/31/93 09/30/94 12/31/93
-------- -------- -------- --------
($ in thousands)
<S> <C> <C> <C> <C>
COMPONENTS
Stockholders' equity $ 53,444 $ 52,857 $ 46,245 $ 46,993
Minority interest 8 8 -- --
Net unrealized depreciation (appreciation)
on securities available for sale,
net of tax effect (1) 566 (735) 567 (734)
Less Goodwill (21,158) (21,158) -- --
-------- -------- --------- ---------
Tier 1 Capital 32,860 30,972 46,812 46,259
-------- -------- -------- --------
Allowance for possible loan losses
(limited to 1.25% of total risk-weighted
assets) 3,879 3,414 3,396 3,042
Subordinated debt (limited to 50%
of Tier 1 Capital) 16,430 15,486 -- --
-------- -------- --------- ---------
Tier 2 Capital 20,309 18,900 3,396 3,042
-------- -------- -------- --------
Total Risk-based Capital $ 53,169 $ 49,872 $ 50,208 $ 49,301
======== ======== ======== ========
RATIOS
Tier 1 Capital 8.93% 9.37% 13.56% 14.95%
======== ======== ======== ========
Total Capital 14.45% 15.08% 14.55% 15.94%
======== ======== ======== ========
Leverage 4.90% 4.90% 7.23% 7.57%
======== ======== ======== ========
Memoranda
Tier 1 Capital minimum requirement $ 14,720 $ 13,226 $ 13,807 $ 12,374
======== ======== ======== ========
Total Capital minimum requirement $ 29,439 $ 26,451 $ 27,613 $ 24,747
======== ======== ======== ========
Risk-weighted assets, net of goodwill $367,990 $330,641 $345,166 $309,343
======== ======== ======== ========
Total assets, net of goodwill $671,036 $631,881 $647,891 $611,149
======== ======== ======== ========
</TABLE>
(1) As directed by regulatory agencies this amount must be excluded from the
computation of Tier 1 capital.
19
<PAGE> 20
STERLING BANCORP AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
(11) Statement Re: Computation of Per Share Earnings
(27) Financial Data Schedule
(b) No reports on Form 8-K have been filed during the quarter.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
STERLING BANCORP
.............................
(Registrant)
Date 11/14/94 /s/ Louis J. Cappelli
------------------------- -----------------------------
Louis J. Cappelli
Chairman and
Chief Executive Officer
Date 11/14/94 /s/ John W. Tietjen
------------------------- -----------------------------
John W. Tietjen
Senior Vice President, Treasurer and
Chief Financial Officer
20
<PAGE> 21
STERLING BANCORP AND SUBSIDIARIES
Exhibit Index
<TABLE>
<CAPTION>
Incorporated Sequential
Exhibit Herein By Filed Page
Number Description Reference To Herewith No.
------- ----------- ------------ -------- --
<S> <C> <C> <C> <C>
11 Computation of
Per Share Earnings X 22
27 Financial Data
Schedule X 23
</TABLE>
21
<PAGE> 1
Exhibit (11)
STERLING BANCORP AND SUBSIDIARIES
Statement Re: Computation of Per Share Earnings
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------------------------------------
1994 1993 1994 1993
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Income for primary earnings per share:
Net income A $ 974,761 $ 805,746 $2,847,632 $2,349,468
========== ========== ========== ==========
Income for fully diluted earnings
per share:
Net income $ 974,761 $ 805,746 $2,847,632 $2,349,468
Add expenses, net of tax effect
on assumed conversion of
Convertible Subordinated
Debentures:
Interest 279,277 241,812 757,446 717,551
Amortization of bond discount
and expense 7,407 3,421 14,149 14,598
---------- ---------- ---------- ----------
Income for fully diluted shares B $1,261,445 $1,050,979 $3,619,227 $3,081,617
========== ========== ========== ==========
Common shares for primary earnings
per share:
Average shares issued 6,496,605 6,496,605 6,496,605 6,496,496
Added assumed conversion at the beginning
of the period or issuance date if later:
Stock options -- 678 778 226
ESOP shares allocated 17,133 -- 13,896 --
Less: Average Treasury shares 150,393 150,393 150,393 150,393
---------- ---------- ---------- ----------
Average common shares for compu-
tation of primary earnings
per share (See Note below) C 6,363,345 6,346,890 6,360,886 6,346,329
========== ========== ========== ==========
Common shares for fully diluted
earnings per share:
Average common shares 6,363,345 6,346,890 6,360,886 6,346,329
Add assumed conversion at the beginning
of the period of issuance date if later:
Convertible Subordinated Debentures 2,380,913 2,226,093 2,380,913 2,226,093
Series B preferred shares 2,576 2,576 2,576 2,576
ESOP shares unallocated 232,867 250,000 236,104 194,444
Stock options -- 4,171 95 1,390
----------- ---------- ---------- ----------
Average common shares for computation
of fully diluted earnings per
share (See Note below)
D 8,979,701 8,829,730 8,980,574 8,770,833
========== ========== ========== ==========
Per average common share:
Net income (A / C) $0.16 $0.13 $0.45 $0.37
===== ===== ===== =====
Net income assuming full dilution (B / D) $0.14 $0.12 $0.40 $0.35
===== ===== ===== =====
</TABLE>
Note: Based on shares at end of each month.
22
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
STERLING BANCORP AND SUBISIDIARIES
Article 9 of Regulation S-X
Financial Data Schedule
September 30, 1994
($ in 000's, except per share)
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 38,939
<INT-BEARING-DEPOSITS> 2,970
<FED-FUNDS-SOLD> 5,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 74,696
<INVESTMENTS-CARRYING> 245,751
<INVESTMENTS-MARKET> 232,965
<LOANS> 293,164
<ALLOWANCE> 3,879
<TOTAL-ASSETS> 692,194
<DEPOSITS> 471,282
<SHORT-TERM> 96,352
<LIABILITIES-OTHER> 19,039
<LONG-TERM> 52,046
<COMMON> 6,497
0
1,776
<OTHER-SE> 45,171
<TOTAL-LIABILITIES-AND-EQUITY> 692,194
<INTEREST-LOAN> 16,786
<INTEREST-INVEST> 14,211
<INTEREST-OTHER> 280
<INTEREST-TOTAL> 31,277
<INTEREST-DEPOSIT> 5,829
<INTEREST-EXPENSE> 10,556
<INTEREST-INCOME-NET> 20,721
<LOAN-LOSSES> 700
<SECURITIES-GAINS> 42
<EXPENSE-OTHER> 16,319
<INCOME-PRETAX> 6,873
<INCOME-PRE-EXTRAORDINARY> 2,848
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,848
<EPS-PRIMARY> 0.45
<EPS-DILUTED> 0.40
<YIELD-ACTUAL> 4.79
<LOANS-NON> 852
<LOANS-PAST> 631
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,414
<CHARGE-OFFS> 411
<RECOVERIES> 176
<ALLOWANCE-CLOSE> 3,879
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 3,879
</TABLE>
