x | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 80-0091851 | |
(State or Other Jurisdiction of | (IRS Employer ID No.) | |
Incorporation or Organization) | ||
400 Rella Boulevard, Montebello, New York | 10901 | |
(Address of Principal Executive Office) | (Zip Code) |
Classes of Common Stock | Shares outstanding as of November 1, 2018 | |
$0.01 per share | 224,427,793 |
PART I. FINANCIAL INFORMATION - UNAUDITED | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. OTHER INFORMATION | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
ASSETS: | |||||||
Cash and due from banks | $ | 533,984 | $ | 479,906 | |||
Securities: | |||||||
Available for sale, at fair value | 3,843,244 | 3,612,072 | |||||
Held to maturity, at amortized cost (fair value of $2,746,080 and $2,863,909 at September 30, 2018 and December 31, 2017, respectively) | 2,842,728 | 2,862,489 | |||||
Total securities | 6,685,972 | 6,474,561 | |||||
Loans held for sale | 31,042 | 5,246 | |||||
Portfolio loans | 20,533,214 | 20,008,983 | |||||
Allowance for loan losses | (91,365 | ) | (77,907 | ) | |||
Portfolio loans, net | 20,441,849 | 19,931,076 | |||||
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock, at cost | 351,455 | 284,112 | |||||
Accrued interest receivable | 109,377 | 94,098 | |||||
Premises and equipment, net | 289,794 | 321,722 | |||||
Goodwill | 1,609,772 | 1,579,891 | |||||
Other intangible assets, net | 135,409 | 153,191 | |||||
Bank owned life insurance | 660,279 | 651,638 | |||||
Other real estate owned | 22,735 | 27,095 | |||||
Other assets | 389,597 | 357,005 | |||||
Total assets | $ | 31,261,265 | $ | 30,359,541 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
LIABILITIES: | |||||||
Deposits | $ | 21,456,057 | $ | 20,538,204 | |||
FHLB borrowings | 4,429,110 | 4,510,123 | |||||
Repurchase agreements | 22,888 | 30,162 | |||||
Senior Notes | 200,972 | 278,209 | |||||
Subordinated Notes | 172,885 | 172,716 | |||||
Mortgage escrow funds | 96,952 | 122,641 | |||||
Other liabilities | 444,098 | 467,308 | |||||
Total liabilities | 26,822,962 | 26,119,363 | |||||
Commitments and Contingent liabilities (See Note 16. “Commitments and Contingencies”) | |||||||
STOCKHOLDERS’ EQUITY: | |||||||
Preferred stock (par value $0.01 per share; 10,000,000 shares authorized; 135,000 shares issued and outstanding at September 30, 2018 and December 31, 2017) | 138,627 | 139,220 | |||||
Common stock (par value $0.01 per share; 310,000,000 shares authorized at September 30, 2018 and December 31, 2017; 229,872,925 shares issued at September 30, 2018 and December 31, 2017; 225,446,089 and 224,782,694 shares outstanding at September 30, 2018 and December 31, 2017, respectively) | 2,299 | 2,299 | |||||
Additional paid-in capital | 3,773,164 | 3,780,908 | |||||
Treasury stock, at cost (4,426,836 shares at September 30, 2018 and 5,090,231 at December 31, 2017) | (51,973 | ) | (58,039 | ) | |||
Retained earnings | 694,861 | 401,956 | |||||
Accumulated other comprehensive loss, net of tax benefit of $(45,332) at September 30, 2018 and $(17,083) at December 31, 2017 | (118,675 | ) | (26,166 | ) | |||
Total stockholders’ equity | 4,438,303 | 4,240,178 | |||||
Total liabilities and stockholders’ equity | $ | 31,261,265 | $ | 30,359,541 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Interest and dividend income: | |||||||||||||||
Loans and loan fees | $ | 257,211 | $ | 119,898 | $ | 746,079 | $ | 336,308 | |||||||
Securities taxable | 29,765 | 15,141 | 85,856 | 40,536 | |||||||||||
Securities non-taxable | 15,244 | 8,542 | 45,959 | 23,951 | |||||||||||
Other earning assets | 6,805 | 2,111 | 17,382 | 5,160 | |||||||||||
Total interest and dividend income | 309,025 | 145,692 | 895,276 | 405,955 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 35,974 | 13,392 | 88,645 | 33,805 | |||||||||||
Borrowings | 29,102 | 12,227 | 82,098 | 30,029 | |||||||||||
Total interest expense | 65,076 | 25,619 | 170,743 | 63,834 | |||||||||||
Net interest income | 243,949 | 120,073 | 724,533 | 342,121 | |||||||||||
Provision for loan losses | 9,500 | 5,000 | 35,500 | 14,000 | |||||||||||
Net interest income after provision for loan losses | 234,449 | 115,073 | 689,033 | 328,121 | |||||||||||
Non-interest income: | |||||||||||||||
Deposit fees and service charges | 6,333 | 3,309 | 20,319 | 9,893 | |||||||||||
Accounts receivable management / factoring commissions and other fees | 5,595 | 4,764 | 16,292 | 12,670 | |||||||||||
Bank owned life insurance | 3,733 | 1,320 | 11,591 | 4,342 | |||||||||||
Loan commissions and fees | 4,142 | 2,819 | 12,114 | 8,643 | |||||||||||
Investment management fees | 1,943 | 271 | 5,889 | 825 | |||||||||||
Net loss on sale of securities | (56 | ) | (21 | ) | (5,902 | ) | (274 | ) | |||||||
Gain on sale of fixed assets | — | 1 | 11,800 | 1 | |||||||||||
Other | 2,455 | 1,525 | 8,617 | 4,342 | |||||||||||
Total non-interest income | 24,145 | 13,988 | 80,720 | 40,442 | |||||||||||
Non-interest expense: | |||||||||||||||
Compensation and benefits | 54,823 | 31,727 | 165,662 | 93,893 | |||||||||||
Stock-based compensation plans | 3,115 | 1,969 | 9,304 | 5,602 | |||||||||||
Occupancy and office operations | 16,558 | 8,583 | 51,956 | 25,550 | |||||||||||
Information technology | 10,699 | 2,512 | 32,412 | 7,402 | |||||||||||
Amortization of intangible assets | 5,865 | 2,166 | 17,782 | 6,582 | |||||||||||
FDIC insurance and regulatory assessments | 6,043 | 2,310 | 16,885 | 6,232 | |||||||||||
Other real estate owned expense, net | 1,497 | 894 | 1,635 | 2,682 | |||||||||||
Merger-related expense | — | 4,109 | — | 9,002 | |||||||||||
Charge for asset write-downs, retention and severance | — | — | 13,132 | 603 | |||||||||||
Other | 13,173 | 8,347 | 39,680 | 25,076 | |||||||||||
Total non-interest expense | 111,773 | 62,617 | 348,448 | 182,624 | |||||||||||
Income before income tax expense | 146,821 | 66,444 | 421,305 | 185,939 | |||||||||||
Income tax expense | 27,171 | 21,592 | 88,542 | 59,620 | |||||||||||
Net income | $ | 119,650 | $ | 44,852 | $ | 332,763 | $ | 126,319 | |||||||
Preferred stock dividend | 1,993 | — | 5,988 | — | |||||||||||
Net income available to common stockholders | $ | 117,657 | $ | 44,852 | $ | 326,775 | $ | 126,319 | |||||||
Weighted average common shares: | |||||||||||||||
Basic | 225,088,511 | 135,346,791 | 224,969,121 | 135,276,634 | |||||||||||
Diluted | 225,622,895 | 135,950,160 | 225,504,463 | 135,895,513 | |||||||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.52 | $ | 0.33 | $ | 1.45 | $ | 0.93 | |||||||
Diluted | 0.52 | 0.33 | 1.45 | 0.93 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 119,650 | $ | 44,852 | $ | 332,763 | $ | 126,319 | |||||||
Other comprehensive (loss) income, before tax: | |||||||||||||||
Change in unrealized holding (losses) gains on securities available for sale | (27,083 | ) | 4,209 | (128,496 | ) | 20,374 | |||||||||
Reclassification adjustment for net realized losses included in net income | 56 | 21 | 5,902 | 274 | |||||||||||
Accretion of net unrealized loss on securities transferred to held to maturity | 225 | 238 | 686 | 726 | |||||||||||
Change in the actuarial loss of defined benefit plan and post-retirement benefit plans | 415 | 10 | 1,150 | 74 | |||||||||||
Total other comprehensive (loss) income, before tax | (26,387 | ) | 4,478 | (120,758 | ) | 21,448 | |||||||||
Deferred tax benefit (expense) related to other comprehensive (loss) income | 7,293 | (1,769 | ) | 33,378 | (8,472 | ) | |||||||||
Other comprehensive (loss) income, net of tax | (19,094 | ) | 2,709 | (87,380 | ) | 12,976 | |||||||||
Comprehensive income | $ | 100,556 | $ | 47,561 | $ | 245,383 | $ | 139,295 |
Number of common shares | Preferred stock | Common stock | Additional paid-in capital | Treasury stock | Retained earnings | Accumulated other comprehensive (loss) income | Total stockholders’ equity | |||||||||||||||||||||||
Balance at January 1, 2017 | 135,257,570 | $ | — | $ | 1,411 | $ | 1,597,287 | $ | (66,188 | ) | $ | 349,308 | $ | (26,635 | ) | $ | 1,855,183 | |||||||||||||
Net income | — | — | — | — | — | 39,067 | — | 39,067 | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | 2,914 | 2,914 | ||||||||||||||||||||||
Stock option & other stock transactions, net | 40,253 | — | — | 49 | 553 | (109 | ) | — | 493 | |||||||||||||||||||||
Restricted stock awards, net | 306,612 | — | — | (7,043 | ) | 3,589 | 3,846 | — | 392 | |||||||||||||||||||||
Cash dividends declared ($0.07 per common share) | — | — | — | — | — | (9,436 | ) | — | (9,436 | ) | ||||||||||||||||||||
Balance at March 31, 2017 | 135,604,435 | — | 1,411 | 1,590,293 | (62,046 | ) | 382,676 | (23,721 | ) | 1,888,613 | ||||||||||||||||||||
Net income | — | — | — | — | — | 42,400 | — | 42,400 | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | $ | — | 7,353 | 7,353 | |||||||||||||||||||||
Stock option & other stock transactions, net | 71,395 | — | — | 49 | 980 | $ | (298 | ) | — | 731 | ||||||||||||||||||||
Restricted stock awards, net | (17,604 | ) | — | — | 1,957 | (510 | ) | $ | 293 | — | 1,740 | |||||||||||||||||||
Cash dividends declared ($0.07 per common share) | — | — | — | — | — | (9,454 | ) | — | (9,454 | ) | ||||||||||||||||||||
Balance at June 30, 2017 | 135,658,226 | — | 1,411 | 1,592,299 | (61,576 | ) | 415,617 | (16,368 | ) | 1,931,383 | ||||||||||||||||||||
Net income | — | — | — | — | — | 44,852 | — | 44,852 | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | 2,709 | 2,709 | ||||||||||||||||||||||
Stock option & other stock transactions, net | 6,950 | — | — | 48 | 94 | (29 | ) | — | 113 | |||||||||||||||||||||
Restricted stock awards, net | 142,368 | — | — | (1,595 | ) | 1,808 | 1,667 | — | 1,880 | |||||||||||||||||||||
Cash dividends declared ($0.07 per common share) | — | — | — | — | — | (9,457 | ) | — | (9,457 | ) | ||||||||||||||||||||
Balance at September 30, 2017 | 135,807,544 | $ | — | $ | 1,411 | $ | 1,590,752 | $ | (59,674 | ) | $ | 452,650 | $ | (13,659 | ) | $ | 1,971,480 |
Number of common shares | Preferred stock | Common stock | Additional paid-in capital | Treasury stock | Retained earnings | Accumulated other comprehensive (loss) income | Total stockholders’ equity | |||||||||||||||||||||||
Balance at January 1, 2018 | 224,782,694 | $ | 139,220 | $ | 2,299 | $ | 3,780,908 | $ | (58,039 | ) | $ | 401,956 | $ | (26,166 | ) | $ | 4,240,178 | |||||||||||||
Net income | — | — | — | — | — | 98,872 | — | 98,872 | ||||||||||||||||||||||
Other comprehensive (loss) | — | — | — | — | — | — | (47,749 | ) | (47,749 | ) | ||||||||||||||||||||
Stock option & other stock transactions, net | 28,794 | — | — | 2 | 375 | (46 | ) | — | 331 | |||||||||||||||||||||
Restricted stock awards, net | 654,778 | — | — | (14,630 | ) | 6,562 | 8,078 | — | 10 | |||||||||||||||||||||
Cash dividends declared ($0.07 per common share) | — | — | — | — | — | (15,693 | ) | — | (15,693 | ) | ||||||||||||||||||||
Cash dividends declared ($16.25 per preferred share) | — | (195 | ) | — | — | — | (1,999 | ) | — | (2,194 | ) | |||||||||||||||||||
Reclassification of the stranded income tax effects from the enactment of the Tax Cuts and Jobs Act from accumulated other comprehensive (loss) | — | — | — | — | — | 5,129 | (5,129 | ) | — | |||||||||||||||||||||
Balance at March 31, 2018 | 225,466,266 | 139,025 | 2,299 | 3,766,280 | (51,102 | ) | 496,297 | (79,044 | ) | 4,273,755 | ||||||||||||||||||||
Net income | — | — | — | — | — | 114,241 | — | 114,241 | ||||||||||||||||||||||
Other comprehensive (loss) | — | — | — | — | — | — | (20,537 | ) | (20,537 | ) | ||||||||||||||||||||
Stock option & other stock transactions, net | 7,500 | — | — | 2 | 91 | (18 | ) | — | 75 | |||||||||||||||||||||
Restricted stock awards, net | (3,512 | ) | — | — | 3,223 | (258 | ) | 168 | — | 3,133 | ||||||||||||||||||||
Cash dividends declared ($0.07 per common share) | — | — | — | — | — | (15,739 | ) | — | (15,739 | ) | ||||||||||||||||||||
Cash dividends declared ($16.25 per preferred share) | — | (197 | ) | — | — | — | (1,996 | ) | — | (2,193 | ) | |||||||||||||||||||
Balance at June 30, 2018 | 225,470,254 | 138,828 | 2,299 | 3,769,505 | (51,269 | ) | 592,953 | (99,581 | ) | 4,352,735 | ||||||||||||||||||||
Net income | — | — | — | — | — | 119,650 | — | 119,650 | ||||||||||||||||||||||
Other comprehensive (loss) | — | — | — | — | — | — | (19,094 | ) | (19,094 | ) | ||||||||||||||||||||
Stock option & other stock transactions, net | 13,500 | — | — | 2 | 164 | (10 | ) | — | 156 | |||||||||||||||||||||
Restricted stock awards, net | (37,665 | ) | — | — | 3,657 | (868 | ) | — | — | 2,789 | ||||||||||||||||||||
Cash dividends declared ($0.07 per common share) | — | — | — | — | — | (15,739 | ) | — | (15,739 | ) | ||||||||||||||||||||
Cash dividends declared ($16.25 per preferred share) | — | (201 | ) | — | — | — | (1,993 | ) | — | (2,194 | ) | |||||||||||||||||||
Balance at September 30, 2018 | 225,446,089 | $ | 138,627 | $ | 2,299 | $ | 3,773,164 | $ | (51,973 | ) | $ | 694,861 | $ | (118,675 | ) | $ | 4,438,303 |
Nine months ended | |||||||
September 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 332,763 | $ | 126,319 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provisions for loan losses | 35,500 | 14,000 | |||||
Net (gain) loss from write-downs and sales of other real estate owned | (796 | ) | 1,647 | ||||
Depreciation of premises and equipment | 15,214 | 6,639 | |||||
Asset write-downs, retention and severance compensation and other restructuring charges | 13,132 | 603 | |||||
Amortization of intangible assets | 17,782 | 6,582 | |||||
Amortization of low income housing tax credits | 3,732 | 414 | |||||
Net loss on sale of securities | 5,902 | 274 | |||||
Net gain on loans held for sale | (25 | ) | (952 | ) | |||
Net gain on sale of premises and equipment | (11,800 | ) | (1 | ) | |||
Net amortization of premiums on securities | 29,759 | 16,635 | |||||
Amortization of premium on certificates of deposit | (4,850 | ) | — | ||||
Net accretion of purchase discount and amortization of net deferred loan costs | (85,129 | ) | (10,515 | ) | |||
Net accretion of debt issuance costs and amortization of premium on borrowings | (1,081 | ) | 410 | ||||
Restricted stock compensation expense | 9,299 | 5,456 | |||||
Stock option compensation expense | 5 | 146 | |||||
Originations of loans held for sale | (52,919 | ) | (5,159 | ) | |||
Proceeds from sales of loans held for sale | 27,148 | 48,000 | |||||
Increase in cash surrender value of bank owned life insurance | (11,591 | ) | (4,442 | ) | |||
Deferred income tax expense (benefit) | 45,589 | (1,933 | ) | ||||
Other adjustments (principally net changes in other assets and other liabilities) | (79,631 | ) | (16,760 | ) | |||
Net cash provided by operating activities | 288,003 | 187,363 | |||||
Cash flows from investing activities: | |||||||
Purchases of securities: | |||||||
Available for sale | (753,638 | ) | (1,017,426 | ) | |||
Held to maturity | (140,976 | ) | (619,649 | ) | |||
Proceeds from maturities, calls and other principal payments on securities: | |||||||
Available for sale | 271,558 | 164,598 | |||||
Held to maturity | 135,327 | 64,158 | |||||
Proceeds from sales of securities available for sale | 117,810 | 15,247 | |||||
Proceeds from sales of securities held to maturity | 254 | — | |||||
Portfolio loan originations, net | 10,619 | (900,269 | ) | ||||
Portfolio loans purchased | (37,668 | ) | (94,912 | ) | |||
Proceeds from sale of loans held for investment | — | 28,990 | |||||
Purchases of FHLB and FRB stock, net | (67,343 | ) | (56,178 | ) | |||
Proceeds from sales of other real estate owned | 16,786 | 5,182 | |||||
Purchases of premises and equipment | (16,369 | ) | (5,699 | ) | |||
Proceeds from bank owned life insurance | 2,950 | 50 | |||||
Proceeds from sale of premises and equipment | 35,261 | — | |||||
Purchases of low income housing tax credits | (3,655 | ) | (8,260 | ) | |||
Cash paid for acquisition, net | (484,385 | ) | — | ||||
Net cash (used in) investing activities | (913,469 | ) | (2,424,168 | ) |
Nine months ended | |||||||
September 30, | |||||||
2018 | 2017 | ||||||
Cash flows from financing activities: | |||||||
Net increase in transaction, savings and money market deposits | $ | 786,541 | $ | 992,573 | |||
Net increase (decrease) in certificates of deposit | 136,162 | (17,394 | ) | ||||
Net (decrease) increase in short-term FHLB borrowings | (555,000 | ) | 200,000 | ||||
Advances of term FHLB borrowings | 2,975,000 | 1,975,000 | |||||
Repayments of term FHLB borrowings | (2,500,000 | ) | (950,000 | ) | |||
Repayment of Senior Notes | (77,000 | ) | — | ||||
Net (decrease) increase in other borrowings | (7,274 | ) | 171,761 | ||||
Net (decrease) increase in mortgage escrow funds | (25,689 | ) | 5,576 | ||||
Proceeds from stock option exercises | 556 | 1,193 | |||||
Cash dividends paid - common stock | (47,171 | ) | (28,347 | ) | |||
Cash dividends paid - preferred stock | (6,581 | ) | — | ||||
Net cash provided by financing activities | 679,544 | 2,350,362 | |||||
Net decrease in cash and cash equivalents | 54,078 | 113,557 | |||||
Cash and cash equivalents at beginning of period | 479,906 | 293,646 | |||||
Cash and cash equivalents at end of period | $ | 533,984 | $ | 407,203 | |||
Supplemental cash flow information: | |||||||
Interest payments | $ | 165,306 | $ | 57,357 | |||
Income tax payments | 23,445 | 67,625 | |||||
Real estate acquired in settlement of loans | 11,630 | 4,907 | |||||
Loans transferred from held for investment to held for sale | — | 28,990 | |||||
Acquisitions: | |||||||
Non-cash assets acquired: | |||||||
Total loans, net | $ | 442,884 | $ | — | |||
Goodwill | 36,094 | — | |||||
Premises and equipment, net | 379 | — | |||||
Other assets | 7,071 | — | |||||
Total non-cash assets acquired | 486,428 | — | |||||
Liabilities assumed: | |||||||
Other liabilities | 4,884 | — | |||||
Total liabilities assumed | 4,884 | — | |||||
Net non-cash assets acquired | 481,544 | — | |||||
Cash and cash equivalents received in acquisitions | 20,508 | — | |||||
Total consideration paid | $ | 502,052 | $ | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
September 30, 2018 | |||||||||||||||||||||||||||||||
Available for Sale | Held to Maturity | ||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrecognized gains | Gross unrecognized losses | Fair value | ||||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||||||||||
Agency-backed | $ | 2,303,793 | $ | 2 | $ | (96,604 | ) | $ | 2,207,191 | $ | 326,950 | $ | 33 | $ | (13,656 | ) | $ | 313,327 | |||||||||||||
CMOs/Other MBS | 603,692 | 2 | (27,642 | ) | 576,052 | 29,015 | — | (1,328 | ) | 27,687 | |||||||||||||||||||||
Total residential MBS | 2,907,485 | 4 | (124,246 | ) | 2,783,243 | 355,965 | 33 | (14,984 | ) | 341,014 | |||||||||||||||||||||
Other securities: | |||||||||||||||||||||||||||||||
Federal agencies | 338,764 | — | (21,031 | ) | 317,733 | 58,960 | — | (440 | ) | 58,520 | |||||||||||||||||||||
Corporate | 512,221 | 408 | (9,303 | ) | 503,326 | 68,563 | 391 | (1,045 | ) | 67,909 | |||||||||||||||||||||
State and municipal | 244,267 | 135 | (5,460 | ) | 238,942 | 2,340,990 | 1,350 | (81,727 | ) | 2,260,613 | |||||||||||||||||||||
Other | — | — | — | — | 18,250 | 29 | (255 | ) | 18,024 | ||||||||||||||||||||||
Total other securities | 1,095,252 | 543 | (35,794 | ) | 1,060,001 | 2,486,763 | 1,770 | (83,467 | ) | 2,405,066 | |||||||||||||||||||||
Total securities | $ | 4,002,737 | $ | 547 | $ | (160,040 | ) | $ | 3,843,244 | $ | 2,842,728 | $ | 1,803 | $ | (98,451 | ) | $ | 2,746,080 |
December 31, 2017 | |||||||||||||||||||||||||||||||
Available for Sale | Held to Maturity | ||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrecognized gains | Gross unrecognized losses | Fair value | ||||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||||||||||
Agency-backed | $ | 2,171,044 | $ | 1,570 | $ | (21,965 | ) | $ | 2,150,649 | $ | 355,013 | $ | 978 | $ | (2,504 | ) | $ | 353,487 | |||||||||||||
CMOs/Other MBS | 656,514 | 31 | (7,142 | ) | 649,403 | 33,496 | 26 | (760 | ) | 32,762 | |||||||||||||||||||||
Total residential MBS | 2,827,558 | 1,601 | (29,107 | ) | 2,800,052 | 388,509 | 1,004 | (3,264 | ) | 386,249 | |||||||||||||||||||||
Other securities: | |||||||||||||||||||||||||||||||
Federal agencies | 409,322 | — | (9,326 | ) | 399,996 | 58,640 | 949 | — | 59,589 | ||||||||||||||||||||||
Corporate | 147,781 | 1,421 | (976 | ) | 148,226 | 56,663 | 1,255 | (103 | ) | 57,815 | |||||||||||||||||||||
State and municipal | 264,310 | 1,380 | (1,892 | ) | 263,798 | 2,342,927 | 12,396 | (10,900 | ) | 2,344,423 | |||||||||||||||||||||
Other | — | — | — | — | 15,750 | 83 | — | 15,833 | |||||||||||||||||||||||
Total other securities | 821,413 | 2,801 | (12,194 | ) | 812,020 | 2,473,980 | 14,683 | (11,003 | ) | 2,477,660 | |||||||||||||||||||||
Total securities | $ | 3,648,971 | $ | 4,402 | $ | (41,301 | ) | $ | 3,612,072 | $ | 2,862,489 | $ | 15,687 | $ | (14,267 | ) | $ | 2,863,909 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
September 30, 2018 | |||||||||||||||
Available for sale | Held to maturity | ||||||||||||||
Amortized cost | Fair value | Amortized cost | Fair value | ||||||||||||
Remaining period to contractual maturity: | |||||||||||||||
One year or less | $ | 22,244 | $ | 22,260 | $ | 92,954 | $ | 92,982 | |||||||
One to five years | 207,237 | 204,204 | 115,470 | 114,545 | |||||||||||
Five to ten years | 759,223 | 732,965 | 476,895 | 467,936 | |||||||||||
Greater than ten years | 106,548 | 100,572 | 1,801,444 | 1,729,603 | |||||||||||
Total securities with a stated maturity date | 1,095,252 | 1,060,001 | 2,486,763 | 2,405,066 | |||||||||||
Residential MBS | 2,907,485 | 2,783,243 | 355,965 | 341,014 | |||||||||||
Total securities | $ | 4,002,737 | $ | 3,843,244 | $ | 2,842,728 | $ | 2,746,080 |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Available for sale: | |||||||||||||||
Proceeds from sales | $ | — | $ | 5,015 | $ | 117,810 | $ | 15,247 | |||||||
Gross realized gains (1) | — | 1 | 82 | 7 | |||||||||||
Gross realized losses (1) | (3 | ) | (22 | ) | (5,910 | ) | (281 | ) | |||||||
Income tax benefit on realized net losses | (1 | ) | (7 | ) | (1,224 | ) | (89 | ) | |||||||
Held to maturity: (2) | |||||||||||||||
Proceeds from sale | $ | — | $ | — | $ | 254 | $ | — | |||||||
Gross realized loss (1) | (53 | ) | — | (74 | ) | — | |||||||||
Income tax expense on realized loss | (11 | ) | — | (15 | ) | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Continuous unrealized loss position | |||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||
Available for sale | |||||||||||||||||||||||
September 30, 2018 | |||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||
Agency-backed | $ | 1,110,789 | $ | (38,095 | ) | $ | 1,095,722 | $ | (58,509 | ) | $ | 2,206,511 | $ | (96,604 | ) | ||||||||
CMOs/Other MBS | 543,311 | (26,005 | ) | 32,546 | (1,637 | ) | 575,857 | (27,642 | ) | ||||||||||||||
Total residential MBS | 1,654,100 | (64,100 | ) | 1,128,268 | (60,146 | ) | 2,782,368 | (124,246 | ) | ||||||||||||||
Other securities: | |||||||||||||||||||||||
Federal agencies | 204,358 | (11,154 | ) | 113,375 | (9,877 | ) | 317,733 | (21,031 | ) | ||||||||||||||
Corporate | 355,696 | (6,520 | ) | 55,695 | (2,783 | ) | 411,391 | (9,303 | ) | ||||||||||||||
State and municipal | 144,619 | (2,703 | ) | 77,621 | (2,757 | ) | 222,240 | (5,460 | ) | ||||||||||||||
Total other securities | 704,673 | (20,377 | ) | 246,691 | (15,417 | ) | 951,364 | (35,794 | ) | ||||||||||||||
Total securities | $ | 2,358,773 | $ | (84,477 | ) | $ | 1,374,959 | $ | (75,563 | ) | $ | 3,733,732 | $ | (160,040 | ) | ||||||||
December 31, 2017 | |||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||
Agency-backed | $ | 1,349,217 | $ | (10,550 | ) | $ | 486,948 | $ | (11,415 | ) | $ | 1,836,165 | $ | (21,965 | ) | ||||||||
CMOs/Other MBS | 605,200 | (6,064 | ) | 36,107 | (1,078 | ) | 641,307 | (7,142 | ) | ||||||||||||||
Total residential MBS | 1,954,417 | (16,614 | ) | 523,055 | (12,493 | ) | 2,477,472 | (29,107 | ) | ||||||||||||||
Other securities: | |||||||||||||||||||||||
Federal agencies | 243,476 | (1,955 | ) | 156,520 | (7,371 | ) | 399,996 | (9,326 | ) | ||||||||||||||
Corporate | 65,056 | (397 | ) | 15,268 | (579 | ) | 80,324 | (976 | ) | ||||||||||||||
State and municipal | 97,307 | (757 | ) | 56,324 | (1,135 | ) | 153,631 | (1,892 | ) | ||||||||||||||
Total other securities | 405,839 | (3,109 | ) | 228,112 | (9,085 | ) | 633,951 | (12,194 | ) | ||||||||||||||
Total securities | $ | 2,360,256 | $ | (19,723 | ) | $ | 751,167 | $ | (21,578 | ) | $ | 3,111,423 | $ | (41,301 | ) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Continuous unrecognized loss position | |||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
Fair value | Unrecognized losses | Fair value | Unrecognized losses | Fair value | Unrecognized losses | ||||||||||||||||||
Held to maturity | |||||||||||||||||||||||
September 30, 2018 | |||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||
Agency-backed | $ | 200,871 | $ | (7,022 | ) | $ | 110,986 | $ | (6,634 | ) | $ | 311,857 | $ | (13,656 | ) | ||||||||
CMOs/Other MBS | 3,333 | (69 | ) | 24,354 | (1,259 | ) | 27,687 | (1,328 | ) | ||||||||||||||
Total residential MBS | 204,204 | (7,091 | ) | 135,340 | (7,893 | ) | 339,544 | (14,984 | ) | ||||||||||||||
Other securities: | |||||||||||||||||||||||
Federal agencies | 58,520 | (440 | ) | — | — | 58,520 | (440 | ) | |||||||||||||||
Corporate | 47,519 | (1,045 | ) | — | — | 47,519 | (1,045 | ) | |||||||||||||||
State and municipal | 1,482,745 | (51,225 | ) | 637,296 | (30,502 | ) | 2,120,041 | (81,727 | ) | ||||||||||||||
Other | 10,745 | (255 | ) | — | — | 10,745 | (255 | ) | |||||||||||||||
Total other securities | 1,599,529 | (52,965 | ) | 637,296 | (30,502 | ) | 2,236,825 | (83,467 | ) | ||||||||||||||
Total securities | $ | 1,803,733 | $ | (60,056 | ) | $ | 772,636 | $ | (38,395 | ) | $ | 2,576,369 | $ | (98,451 | ) | ||||||||
December 31, 2017 | |||||||||||||||||||||||
Residential MBS: | |||||||||||||||||||||||
Agency-backed | $ | 136,679 | $ | (572 | ) | $ | 74,303 | $ | (1,932 | ) | $ | 210,982 | $ | (2,504 | ) | ||||||||
CMOs/Other MBS | 10,314 | (129 | ) | 20,160 | (631 | ) | 30,474 | (760 | ) | ||||||||||||||
Total residential MBS | 146,993 | (701 | ) | 94,463 | (2,563 | ) | 241,456 | (3,264 | ) | ||||||||||||||
Other securities: | |||||||||||||||||||||||
Corporate | 16,560 | (103 | ) | — | — | 16,560 | (103 | ) | |||||||||||||||
State and municipal | 860,536 | (5,310 | ) | 393,200 | (5,590 | ) | 1,253,736 | (10,900 | ) | ||||||||||||||
Total other securities | 877,096 | (5,413 | ) | 393,200 | (5,590 | ) | 1,270,296 | (11,003 | ) | ||||||||||||||
Total securities | $ | 1,024,089 | $ | (6,114 | ) | $ | 487,663 | $ | (8,153 | ) | $ | 1,511,752 | $ | (14,267 | ) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
Available for sale securities pledged for borrowings, at fair value | $ | 19,743 | $ | 10,225 | |||
Available for sale securities pledged for municipal deposits, at fair value | 651,439 | 323,341 | |||||
Held to maturity securities pledged for borrowings, at amortized cost | 39,443 | 35,047 | |||||
Held to maturity securities pledged for municipal deposits, at amortized cost | 1,686,889 | 1,182,674 | |||||
Total securities pledged | $ | 2,397,514 | $ | 1,551,287 |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
Commercial: | |||||||
Commercial and industrial (“C&I”): | |||||||
Traditional C&I | $ | 2,037,556 | $ | 1,979,448 | |||
Asset-based lending | 868,047 | 797,570 | |||||
Payroll finance | 235,734 | 268,609 | |||||
Warehouse lending | 864,063 | 723,335 | |||||
Factored receivables | 270,002 | 220,551 | |||||
Equipment financing | 1,161,435 | 679,541 | |||||
Public sector finance | 807,193 | 637,767 | |||||
Total C&I | 6,244,030 | 5,306,821 | |||||
Commercial mortgage: | |||||||
Commercial real estate | 4,457,485 | 4,138,864 | |||||
Multi-family | 4,827,172 | 4,859,555 | |||||
Acquisition, development & construction (“ADC”) | 265,676 | 282,792 | |||||
Total commercial mortgage | 9,550,333 | 9,281,211 | |||||
Total commercial | 15,794,363 | 14,588,032 | |||||
Residential mortgage | 4,421,520 | 5,054,732 | |||||
Consumer | 317,331 | 366,219 | |||||
Total portfolio loans | 20,533,214 | 20,008,983 | |||||
Allowance for loan losses | (91,365 | ) | (77,907 | ) | |||
Total portfolio loans, net | $ | 20,441,849 | $ | 19,931,076 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
September 30, 2018 | |||||||||||||||||||||||
Current | 30-59 days past due | 60-89 days past due | 90+ days past due | Non- accrual | Total | ||||||||||||||||||
Traditional C&I | $ | 1,987,436 | $ | 5,634 | $ | 479 | $ | 2,546 | $ | 41,461 | $ | 2,037,556 | |||||||||||
Asset-based lending | 860,329 | — | — | — | 7,718 | 868,047 | |||||||||||||||||
Payroll finance | 234,749 | — | 756 | — | 229 | 235,734 | |||||||||||||||||
Warehouse lending | 864,063 | — | — | — | — | 864,063 | |||||||||||||||||
Factored receivables | 270,002 | — | — | — | — | 270,002 | |||||||||||||||||
Equipment financing | 1,135,922 | 11,835 | 3,714 | — | 9,964 | 1,161,435 | |||||||||||||||||
Public sector finance | 807,193 | — | — | — | — | 807,193 | |||||||||||||||||
Commercial real estate | 4,422,756 | 329 | 2,856 | 4,400 | 27,144 | 4,457,485 | |||||||||||||||||
Multi-family | 4,822,883 | 19 | 569 | — | 3,701 | 4,827,172 | |||||||||||||||||
ADC | 265,676 | — | — | — | — | 265,676 | |||||||||||||||||
Residential mortgage | 4,330,083 | 12,217 | 6,116 | 266 | 72,838 | 4,421,520 | |||||||||||||||||
Consumer | 296,816 | 4,213 | 1,347 | 134 | 14,821 | 317,331 | |||||||||||||||||
Total portfolio loans | $ | 20,297,908 | $ | 34,247 | $ | 15,837 | $ | 7,346 | $ | 177,876 | $ | 20,533,214 | |||||||||||
Total TDRs included above | $ | 39,393 | $ | 57 | $ | 367 | $ | 418 | $ | 37,112 | $ | 77,347 | |||||||||||
Non-performing loans: | |||||||||||||||||||||||
Loans 90+ days past due and still accruing | $ | 7,346 | |||||||||||||||||||||
Non-accrual loans | 177,876 | ||||||||||||||||||||||
Total non-performing loans | $ | 185,222 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
December 31, 2017 | |||||||||||||||||||||||
Current | 30-59 days past due | 60-89 days past due | 90+ days past due | Non- accrual | Total | ||||||||||||||||||
Traditional C&I | $ | 1,940,387 | $ | 1,232 | $ | 187 | $ | — | $ | 37,642 | $ | 1,979,448 | |||||||||||
Asset-based lending | 797,570 | — | — | — | — | 797,570 | |||||||||||||||||
Payroll finance | 268,609 | — | — | — | — | 268,609 | |||||||||||||||||
Warehouse lending | 723,335 | — | — | — | — | 723,335 | |||||||||||||||||
Factored receivables | 220,551 | — | — | — | — | 220,551 | |||||||||||||||||
Equipment financing | 667,083 | 1,143 | 3,216 | — | 8,099 | 679,541 | |||||||||||||||||
Public sector finance | 637,767 | — | — | — | — | 637,767 | |||||||||||||||||
Commercial real estate | 4,104,173 | 8,403 | 4,131 | 437 | 21,720 | 4,138,864 | |||||||||||||||||
Multi-family | 4,853,677 | 595 | 834 | — | 4,449 | 4,859,555 | |||||||||||||||||
ADC | 278,587 | — | — | — | 4,205 | 282,792 | |||||||||||||||||
Residential mortgage | 4,925,996 | 22,416 | 6,038 | 324 | 99,958 | 5,054,732 | |||||||||||||||||
Consumer | 350,502 | 4,364 | 974 | 95 | 10,284 | 366,219 | |||||||||||||||||
Total portfolio loans | $ | 19,768,237 | $ | 38,153 | $ | 15,380 | $ | 856 | $ | 186,357 | $ | 20,008,983 | |||||||||||
Total TDRs included above | $ | 13,175 | $ | 389 | $ | — | $ | — | $ | 29,325 | $ | 42,889 | |||||||||||
Non-performing loans: | |||||||||||||||||||||||
Loans 90+ days past due and still accruing | $ | 856 | |||||||||||||||||||||
Non-accrual loans | 186,357 | ||||||||||||||||||||||
Total non-performing loans | $ | 187,213 |
September 30, 2018 | December 31, 2017 | ||||||||||||||
Recorded investment total non-accrual loans | Unpaid principal balance non-accrual loans | Recorded investment total non-accrual loans | Unpaid principal balance non-accrual loans | ||||||||||||
Traditional C&I | $ | 41,461 | $ | 49,199 | $ | 37,642 | $ | 37,853 | |||||||
Asset-based lending | 7,718 | 7,718 | — | — | |||||||||||
Payroll finance | 229 | 229 | — | — | |||||||||||
Equipment financing | 9,964 | 13,203 | 8,099 | 8,099 | |||||||||||
Commercial real estate | 27,144 | 32,214 | 21,720 | 25,739 | |||||||||||
Multi-family | 3,701 | 3,959 | 4,449 | 4,705 | |||||||||||
ADC | — | — | 4,205 | 4,205 | |||||||||||
Residential mortgage | 72,838 | 84,315 | 99,958 | 113,002 | |||||||||||
Consumer | 14,821 | 16,966 | 10,284 | 12,096 | |||||||||||
Total | $ | 177,876 | $ | 207,803 | $ | 186,357 | $ | 205,699 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Loans evaluated by segment | Allowance evaluated by segment | ||||||||||||||||||||||||||
Individually evaluated for impairment | Collectively evaluated for impairment | PCI loans(1) | Total loans | Individually evaluated for impairment | Collectively evaluated for impairment | Total allowance for loan losses | |||||||||||||||||||||
Traditional C&I | $ | 40,909 | $ | 1,987,707 | $ | 8,940 | $ | 2,037,556 | $ | — | $ | 14,716 | $ | 14,716 | |||||||||||||
Asset-based lending | 18,573 | 849,474 | — | 868,047 | — | 6,828 | 6,828 | ||||||||||||||||||||
Payroll finance | — | 235,734 | — | 235,734 | — | 2,183 | 2,183 | ||||||||||||||||||||
Warehouse lending | — | 864,063 | — | 864,063 | — | 2,685 | 2,685 | ||||||||||||||||||||
Factored receivables | — | 270,002 | — | 270,002 | — | 1,508 | 1,508 | ||||||||||||||||||||
Equipment financing | 2,394 | 1,159,041 | — | 1,161,435 | — | 11,153 | 11,153 | ||||||||||||||||||||
Public sector finance | — | 807,193 | — | 807,193 | — | 1,444 | 1,444 | ||||||||||||||||||||
Commercial real estate | 37,739 | 4,390,799 | 28,947 | 4,457,485 | — | 31,468 | 31,468 | ||||||||||||||||||||
Multi-family | 1,688 | 4,814,697 | 10,787 | 4,827,172 | — | 7,682 | 7,682 | ||||||||||||||||||||
ADC | — | 265,676 | — | 265,676 | — | 1,876 | 1,876 | ||||||||||||||||||||
Residential mortgage | 2,332 | 4,322,621 | 96,567 | 4,421,520 | — | 6,800 | 6,800 | ||||||||||||||||||||
Consumer | 8,050 | 300,518 | 8,763 | 317,331 | — | 3,022 | 3,022 | ||||||||||||||||||||
Total portfolio loans | $ | 111,685 | $ | 20,267,525 | $ | 154,004 | $ | 20,533,214 | $ | — | $ | 91,365 | $ | 91,365 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Loans evaluated by segment | Allowance evaluated by segment | ||||||||||||||||||||||||||
Individually evaluated for impairment | Collectively evaluated for impairment | PCI loans | Total loans | Individually evaluated for impairment | Collectively evaluated for impairment | Total allowance for loan losses | |||||||||||||||||||||
Traditional C&I | $ | 35,921 | $ | 1,933,155 | $ | 10,372 | $ | 1,979,448 | $ | — | $ | 19,072 | $ | 19,072 | |||||||||||||
Asset-based lending | — | 797,570 | — | 797,570 | — | 6,625 | 6,625 | ||||||||||||||||||||
Payroll finance | — | 268,609 | — | 268,609 | — | 1,565 | 1,565 | ||||||||||||||||||||
Warehouse lending | — | 723,335 | — | 723,335 | — | 3,705 | 3,705 | ||||||||||||||||||||
Factored receivables | — | 220,551 | — | 220,551 | — | 1,395 | 1,395 | ||||||||||||||||||||
Equipment financing | 5,341 | 674,200 | — | 679,541 | — | 4,862 | 4,862 | ||||||||||||||||||||
Public sector finance | — | 637,767 | — | 637,767 | — | 1,797 | 1,797 | ||||||||||||||||||||
Commercial real estate | 9,663 | 4,090,143 | 39,058 | 4,138,864 | — | 24,945 | 24,945 | ||||||||||||||||||||
Multi-family | 1,597 | 4,842,898 | 15,060 | 4,859,555 | — | 3,261 | 3,261 | ||||||||||||||||||||
ADC | 5,208 | 277,322 | 262 | 282,792 | — | 1,680 | 1,680 | ||||||||||||||||||||
Residential mortgage | — | 4,903,218 | 151,514 | 5,054,732 | — | 5,819 | 5,819 | ||||||||||||||||||||
Consumer | 3,132 | 352,741 | 10,346 | 366,219 | — | 3,181 | 3,181 | ||||||||||||||||||||
Total portfolio loans | $ | 60,862 | $ | 19,721,509 | $ | 226,612 | $ | 20,008,983 | $ | — | $ | 77,907 | $ | 77,907 |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Balance at beginning of period | $ | 21,711 | $ | 10,877 | $ | 45,582 | $ | 11,117 | |||||||
Accretion of income | (4,027 | ) | (2,412 | ) | (10,578 | ) | (4,612 | ) | |||||||
Reclassification (to) from non-accretable difference | 1,056 | 1,412 | (1,192 | ) | 3,372 | ||||||||||
Other, adjustments | — | — | (15,072 | ) | — | ||||||||||
Balance at end of period | $ | 18,740 | $ | 9,877 | $ | 18,740 | $ | 9,877 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
September 30, 2018 | December 31, 2017 | ||||||||||||||
Unpaid principal balance | Recorded investment | Unpaid principal balance | Recorded investment | ||||||||||||
Loans with no related allowance recorded: | |||||||||||||||
Traditional C&I | $ | 54,756 | $ | 40,909 | $ | 36,408 | $ | 35,921 | |||||||
Asset-based lending | 18,573 | 18,573 | — | — | |||||||||||
Equipment financing | 2,394 | 2,394 | 5,341 | 5,341 | |||||||||||
Commercial real estate | 45,150 | 37,739 | 10,128 | 9,663 | |||||||||||
Multi-family | 2,352 | 1,688 | 1,597 | 1,597 | |||||||||||
ADC | — | — | 5,474 | 5,208 | |||||||||||
Residential mortgage | 2,552 | 2,332 | — | — | |||||||||||
Consumer | 8,050 | 8,050 | 3,132 | 3,132 | |||||||||||
Total | $ | 133,827 | $ | 111,685 | $ | 62,080 | $ | 60,862 |
For the three months ended | |||||||||||||||||||||||
September 30, 2018 | September 30, 2017 | ||||||||||||||||||||||
QTD average recorded investment | Interest income recognized | Cash-basis interest income recognized | QTD average recorded investment | Interest income recognized | Cash-basis interest income recognized | ||||||||||||||||||
Loans with no related allowance recorded: | |||||||||||||||||||||||
Traditional C&I | $ | 36,731 | $ | 116 | $ | — | $ | 24,653 | $ | 8 | $ | — | |||||||||||
Asset-based lending | 14,639 | 123 | — | — | — | — | |||||||||||||||||
Equipment financing | 798 | — | — | 5,469 | — | — | |||||||||||||||||
Commercial real estate | 27,149 | 294 | — | 13,258 | 95 | — | |||||||||||||||||
Multi-family | 1,768 | 17 | — | — | — | — | |||||||||||||||||
ADC | — | — | — | 5,611 | 48 | — | |||||||||||||||||
Residential mortgage | 1,849 | — | — | 1,060 | — | — | |||||||||||||||||
Consumer | 4,762 | — | — | 2,356 | — | — | |||||||||||||||||
Total | $ | 87,696 | $ | 550 | $ | — | $ | 52,407 | $ | 151 | $ | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
For the nine months ended | |||||||||||||||||||||||
September 30, 2018 | September 30, 2017 | ||||||||||||||||||||||
YTD average recorded investment | Interest income recognized | Cash-basis interest income recognized | YTD average recorded investment | Interest income recognized | Cash-basis interest income recognized | ||||||||||||||||||
Loans with no related allowance recorded: | |||||||||||||||||||||||
Traditional C&I | $ | 35,935 | $ | 149 | $ | — | $ | 24,747 | $ | 22 | $ | — | |||||||||||
Asset-based lending | 10,980 | 347 | — | — | — | — | |||||||||||||||||
Equipment financing | 598 | — | — | 3,429 | — | — | |||||||||||||||||
Commercial real estate | 22,704 | 360 | — | 10,410 | 271 | — | |||||||||||||||||
Multi-family | 1,726 | 48 | — | — | — | — | |||||||||||||||||
ADC | — | — | — | 5,562 | 154 | — | |||||||||||||||||
Residential mortgage | 1,387 | — | — | 787 | — | — | |||||||||||||||||
Consumer | 4,355 | — | — | 1,927 | — | — | |||||||||||||||||
Total | $ | 77,685 | $ | 904 | $ | — | $ | 46,862 | $ | 447 | $ | — |
September 30, 2018 | |||||||||||||||||||||||
Current loans | 30-59 days past due | 60-89 days past due | 90+ days past due | Non- accrual | Total | ||||||||||||||||||
Traditional C&I | $ | 449 | $ | — | $ | — | $ | 418 | $ | 25,351 | $ | 26,218 | |||||||||||
Asset-based lending | 10,855 | — | — | — | — | 10,855 | |||||||||||||||||
Equipment financing | 3,340 | — | — | — | 1,181 | 4,521 | |||||||||||||||||
Commercial real estate | 16,091 | — | — | — | 2,935 | 19,026 | |||||||||||||||||
ADC | 434 | — | — | — | — | 434 | |||||||||||||||||
Residential mortgage | 5,685 | — | 367 | — | 2,473 | 8,525 | |||||||||||||||||
Consumer | 2,539 | 57 | — | — | 5,172 | 7,768 | |||||||||||||||||
Total | $ | 39,393 | $ | 57 | $ | 367 | $ | 418 | $ | 37,112 | $ | 77,347 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
December 31, 2017 | |||||||||||||||||||||||
Current loans | 30-59 days past due | 60-89 days past due | 90+ days past due | Non- accrual | Total | ||||||||||||||||||
Traditional C&I | $ | 565 | $ | — | $ | — | $ | — | $ | 21,083 | $ | 21,648 | |||||||||||
Equipment financing | 898 | — | — | — | 826 | 1,724 | |||||||||||||||||
Commercial real estate | 2,921 | — | — | — | 115 | 3,036 | |||||||||||||||||
ADC | 1,495 | — | — | — | 4,205 | 5,700 | |||||||||||||||||
Residential mortgage | 5,154 | 336 | — | — | 2,810 | 8,300 | |||||||||||||||||
Consumer | 2,142 | 53 | — | — | 286 | 2,481 | |||||||||||||||||
Total | $ | 13,175 | $ | 389 | $ | — | $ | — | $ | 29,325 | $ | 42,889 |
September 30, 2018 | September 30, 2017 | |||||||||||||||||||
Recorded investment | Recorded investment | |||||||||||||||||||
Number | Pre- modification | Post- modification | Number | Pre- modification | Post- modification | |||||||||||||||
Traditional C&I | 2 | $ | 11,606 | $ | 10,477 | 1 | $ | 23,188 | $ | 23,188 | ||||||||||
Asset-based lending | 1 | 12,766 | 12,766 | — | — | — | ||||||||||||||
Equipment financing | 4 | 3,307 | 3,307 | 2 | 3,088 | 3,088 | ||||||||||||||
Commercial real estate | 1 | 12,187 | 12,187 | 2 | 1,724 | 1,724 | ||||||||||||||
ADC | — | — | — | 1 | 797 | 797 | ||||||||||||||
Residential mortgage | 11 | 1,684 | 1,367 | 2 | 552 | 551 | ||||||||||||||
Consumer | 1 | 4,944 | 4,944 | — | — | — | ||||||||||||||
Total TDRs | 20 | $ | 46,494 | $ | 45,048 | 8 | $ | 29,349 | $ | 29,348 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
For the three months ended September 30, 2018 | |||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision / (reversal of) | Ending balance | ||||||||||||||||||
Traditional C&I | $ | 18,075 | $ | (3,415 | ) | $ | 235 | $ | (3,180 | ) | $ | (179 | ) | $ | 14,716 | ||||||||
Asset-based lending | 5,837 | — | — | — | 991 | 6,828 | |||||||||||||||||
Payroll finance | 1,658 | (2 | ) | 5 | 3 | 522 | 2,183 | ||||||||||||||||
Warehouse lending | 2,787 | — | — | — | (102 | ) | 2,685 | ||||||||||||||||
Factored receivables | 1,321 | (18 | ) | 2 | (16 | ) | 203 | 1,508 | |||||||||||||||
Equipment financing | 8,841 | (829 | ) | 85 | (744 | ) | 3,056 | 11,153 | |||||||||||||||
Public sector finance | 1,354 | — | — | — | 90 | 1,444 | |||||||||||||||||
Commercial real estate | 26,870 | (359 | ) | 612 | 253 | 4,345 | 31,468 | ||||||||||||||||
Multi-family | 7,389 | (168 | ) | 4 | (164 | ) | 457 | 7,682 | |||||||||||||||
ADC | 2,172 | — | — | — | (296 | ) | 1,876 | ||||||||||||||||
Residential mortgage | 5,917 | (114 | ) | 5 | (109 | ) | 992 | 6,800 | |||||||||||||||
Consumer | 3,805 | (458 | ) | 254 | (204 | ) | (579 | ) | 3,022 | ||||||||||||||
Total allowance for loan losses | $ | 86,026 | $ | (5,363 | ) | $ | 1,202 | $ | (4,161 | ) | $ | 9,500 | $ | 91,365 | |||||||||
Annualized net charge-offs to average loans outstanding: | 0.08 | % |
For the three months ended September 30, 2017 | |||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision / (reversal of) | Ending balance | ||||||||||||||||||
Traditional C&I | $ | 15,506 | $ | (68 | ) | $ | 316 | $ | 248 | $ | 1,446 | $ | 17,200 | ||||||||||
Asset-based lending | 2,582 | — | 1 | 1 | 2,192 | 4,775 | |||||||||||||||||
Payroll finance | 1,287 | (188 | ) | 1 | (187 | ) | 1,091 | 2,191 | |||||||||||||||
Warehouse lending | 2,435 | — | — | — | 1,299 | 3,734 | |||||||||||||||||
Factored receivables | 1,151 | (564 | ) | 5 | (559 | ) | 679 | 1,271 | |||||||||||||||
Equipment financing | 5,735 | (741 | ) | 45 | (696 | ) | (577 | ) | 4,462 | ||||||||||||||
Public sector finance | 1,887 | — | — | — | (535 | ) | 1,352 | ||||||||||||||||
Commercial real estate | 25,181 | (1,345 | ) | 17 | (1,328 | ) | (648 | ) | 23,205 | ||||||||||||||
Multi-family | 5,028 | — | — | — | (974 | ) | 4,054 | ||||||||||||||||
ADC | 920 | (5 | ) | — | (5 | ) | 399 | 1,314 | |||||||||||||||
Residential mortgage | 5,124 | (389 | ) | — | (389 | ) | 319 | 5,054 | |||||||||||||||
Consumer | 3,315 | (156 | ) | 48 | (108 | ) | 309 | 3,516 | |||||||||||||||
Total allowance for loan losses | $ | 70,151 | $ | (3,456 | ) | $ | 433 | $ | (3,023 | ) | $ | 5,000 | $ | 72,128 | |||||||||
Annualized net charge-offs to average loans outstanding: | 0.12 | % |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
For the nine months ended September 30, 2018 | |||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision/ (reversal of) | Ending balance | ||||||||||||||||||
Traditional C&I | $ | 19,072 | $ | (8,818 | ) | $ | 674 | $ | (8,144 | ) | $ | 3,788 | $ | 14,716 | |||||||||
Asset-based lending | 6,625 | — | 9 | 9 | 194 | 6,828 | |||||||||||||||||
Payroll finance | 1,565 | (316 | ) | 34 | (282 | ) | 900 | 2,183 | |||||||||||||||
Warehouse lending | 3,705 | — | — | — | (1,020 | ) | 2,685 | ||||||||||||||||
Factored receivables | 1,395 | (181 | ) | 7 | (174 | ) | 287 | 1,508 | |||||||||||||||
Equipment financing | 4,862 | (7,505 | ) | 347 | (7,158 | ) | 13,449 | 11,153 | |||||||||||||||
Public sector finance | 1,797 | — | — | — | (353 | ) | 1,444 | ||||||||||||||||
Commercial real estate | 24,945 | (4,878 | ) | 702 | (4,176 | ) | 10,699 | 31,468 | |||||||||||||||
Multi-family | 3,261 | (168 | ) | 7 | (161 | ) | 4,582 | 7,682 | |||||||||||||||
ADC | 1,680 | (721 | ) | — | (721 | ) | 917 | 1,876 | |||||||||||||||
Residential mortgage | 5,819 | (697 | ) | 54 | (643 | ) | 1,624 | 6,800 | |||||||||||||||
Consumer | 3,181 | (1,074 | ) | 482 | (592 | ) | 433 | 3,022 | |||||||||||||||
Total allowance for loan losses | $ | 77,907 | $ | (24,358 | ) | $ | 2,316 | $ | (22,042 | ) | $ | 35,500 | $ | 91,365 | |||||||||
Annualized net charge-offs to average loans outstanding: | 0.15 | % |
For the nine months ended September 30, 2017 | |||||||||||||||||||||||
Beginning balance | Charge-offs | Recoveries | Net charge-offs | Provision/ (reversal of) | Ending balance | ||||||||||||||||||
Traditional C&I | $ | 12,864 | $ | (919 | ) | $ | 978 | $ | 59 | $ | 4,277 | $ | 17,200 | ||||||||||
Asset-based lending | 3,316 | — | 5 | 5 | 1,454 | 4,775 | |||||||||||||||||
Payroll finance | 951 | (188 | ) | 1 | (187 | ) | 1,427 | 2,191 | |||||||||||||||
Warehouse lending | 1,563 | — | — | — | 2,171 | 3,734 | |||||||||||||||||
Factored receivables | 1,669 | (871 | ) | 23 | (848 | ) | 450 | 1,271 | |||||||||||||||
Equipment financing | 5,039 | (1,822 | ) | 331 | (1,491 | ) | 914 | 4,462 | |||||||||||||||
Public sector finance | 1,062 | — | — | — | 290 | 1,352 | |||||||||||||||||
Commercial real estate | 20,466 | (2,372 | ) | 117 | (2,255 | ) | 4,994 | 23,205 | |||||||||||||||
Multi-family | 4,991 | — | — | — | (937 | ) | 4,054 | ||||||||||||||||
ADC | 1,931 | (27 | ) | 269 | 242 | (859 | ) | 1,314 | |||||||||||||||
Residential mortgage | 5,864 | (668 | ) | 159 | (509 | ) | (301 | ) | 5,054 | ||||||||||||||
Consumer | 3,906 | (687 | ) | 177 | (510 | ) | 120 | 3,516 | |||||||||||||||
Total allowance for loan losses | $ | 63,622 | $ | (7,554 | ) | $ | 2,060 | $ | (5,494 | ) | $ | 14,000 | $ | 72,128 | |||||||||
Annualized net charge-offs to average loans outstanding: | 0.08 | % |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
September 30, 2018 | December 31, 2017 | ||||||||||||||||||||||
Special mention | Substandard | Doubtful | Special mention | Substandard | Doubtful | ||||||||||||||||||
Traditional C&I | $ | 11,662 | $ | 42,974 | $ | 2,213 | $ | 7,453 | $ | 53,915 | $ | 746 | |||||||||||
Asset-based lending | 56 | 42,913 | — | 30,958 | 3,835 | — | |||||||||||||||||
Payroll finance | 13,708 | 15,511 | — | 15,542 | 352 | — | |||||||||||||||||
Factored receivables | 778 | — | — | 187 | — | — | |||||||||||||||||
Equipment financing | 10,593 | 16,266 | — | 4,093 | 9,299 | — | |||||||||||||||||
Commercial real estate | 18,822 | 52,870 | — | 40,438 | 34,529 | — | |||||||||||||||||
Multi-family | 21,201 | 18,489 | — | 26,602 | 14,266 | — | |||||||||||||||||
ADC | 4,096 | 434 | — | 4,204 | 4,639 | — | |||||||||||||||||
Residential mortgage | 6,116 | 75,803 | — | 6,038 | 101,149 | — | |||||||||||||||||
Consumer | 1,440 | 15,098 | 6 | 1,043 | 10,507 | 18 | |||||||||||||||||
Total | $ | 88,472 | $ | 280,358 | $ | 2,219 | $ | 136,558 | $ | 232,491 | $ | 764 |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
Goodwill | $ | 1,609,772 | $ | 1,579,891 | |||
Other intangible assets: | |||||||
Core deposits | $ | 109,833 | $ | 126,545 | |||
Customer lists | 4,972 | 5,854 | |||||
Non-compete agreements | 104 | 292 | |||||
Trade name | 20,500 | 20,500 | |||||
Total | $ | 135,409 | $ | 153,191 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Amortization expense | |||
Remainder of 2018 | $ | 5,863 | |
2019 | 19,181 | ||
2020 | 16,800 | ||
2021 | 15,104 | ||
2022 | 13,703 | ||
2023 | 12,322 | ||
Thereafter | 31,936 | ||
Total | $ | 114,909 |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
Non-interest bearing demand | $ | 4,651,369 | $ | 4,080,742 | |||
Interest bearing demand | 4,302,725 | 3,882,064 | |||||
Savings | 2,470,949 | 2,758,642 | |||||
Money market | 7,460,064 | 7,377,118 | |||||
Certificates of deposit | 2,570,950 | 2,439,638 | |||||
Total deposits | $ | 21,456,057 | $ | 20,538,204 |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
Interest bearing demand | $ | 17,471 | $ | 23,820 | |||
Money market | 779,285 | 773,804 | |||||
Money market - reciprocal deposits (1) | — | 102,259 | |||||
CDARs(2) and ICS(3) one way | 150,181 | 204,331 | |||||
Total brokered deposits | $ | 946,937 | $ | 1,104,214 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
September 30, | December 31, | ||||||||||||
2018 | 2017 | ||||||||||||
Amount | Rate | Amount | Rate | ||||||||||
By type of borrowing: | |||||||||||||
FHLB borrowings | $ | 4,429,110 | 2.21 | % | $ | 4,510,123 | 1.69 | % | |||||
Repurchase agreements | 22,888 | 1.19 | 30,162 | 0.64 | |||||||||
5.50% Senior Notes | — | — | 76,805 | 5.98 | |||||||||
3.50% Senior Notes | 200,972 | 3.19 | 201,404 | 3.19 | |||||||||
Subordinated Notes | 172,885 | 5.45 | 172,716 | 5.45 | |||||||||
Total borrowings | $ | 4,825,855 | 2.37 | % | $ | 4,991,210 | 1.96 | % | |||||
By remaining period to maturity: | |||||||||||||
Less than one year | $ | 2,707,935 | 2.24 | % | $ | 2,989,093 | 1.69 | % | |||||
One to two years | 1,392,912 | 2.15 | 775,714 | 1.79 | |||||||||
Two to three years | 552,123 | 2.58 | 802,650 | 2.34 | |||||||||
Three to four years | — | — | 251,037 | 2.04 | |||||||||
Greater than five years | 172,885 | 5.45 | 172,716 | 5.45 | |||||||||
Total borrowings | $ | 4,825,855 | 2.37 | % | $ | 4,991,210 | 1.96 | % |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Notional amount | Average maturity (in years) | Weighted average fixed rate | Weighted average variable rate | Fair value | ||||||||||
September 30, 2018 | ||||||||||||||
Included in other assets: | ||||||||||||||
Third-party interest rate swap | $ | 670,460 | $ | 3,347 | ||||||||||
Customer interest rate swap | 213,651 | 290 | ||||||||||||
Total | $ | 884,111 | 5.48 | 4.50 | % | 1 m Libor + 2.24% | $ | 3,637 | ||||||
Included in other liabilities: | ||||||||||||||
Third-party interest rate swap | $ | (213,651 | ) | $ | (1,369 | ) | ||||||||
Customer interest rate swap | (670,460 | ) | (17,399 | ) | ||||||||||
Total | $ | (884,111 | ) | 5.48 | 4.50 | % | 1 m Libor + 2.24% | $ | (18,768 | ) | ||||
December 31, 2017 | ||||||||||||||
Included in other assets: | ||||||||||||||
Third-party interest rate swap | $ | 314,754 | $ | 1,155 | ||||||||||
Customer interest rate swap | 306,529 | 3,302 | ||||||||||||
Total | $ | 621,283 | 5.79 | 4.28 | % | 1 m Libor + 1.94% | $ | 4,457 | ||||||
Included in other liabilities: | ||||||||||||||
Third-party interest rate swap | $ | (306,529 | ) | $ | (4,718 | ) | ||||||||
Customer interest rate swap | (314,754 | ) | (3,262 | ) | ||||||||||
Total | $ | (621,283 | ) | 5.79 | 4.28 | % | 1 m Libor + 1.94% | $ | (7,980 | ) |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Income before income tax expense | $ | 146,821 | $ | 66,444 | $ | 421,305 | $ | 185,939 | |||||||
Tax at Federal statutory rate of 21% for 2018 and 35% for 2017 | 30,833 | 23,253 | 88,474 | 65,076 | |||||||||||
State and local income taxes, net of Federal tax benefit | 7,330 | 2,531 | 21,284 | 7,302 | |||||||||||
Tax exempt interest, net of disallowed interest | (4,970 | ) | (5,213 | ) | (14,435 | ) | (12,487 | ) | |||||||
Bank owned life insurance income | (861 | ) | (462 | ) | (2,406 | ) | (1,484 | ) | |||||||
Non-deductible acquisition related costs | — | 237 | — | 1,193 | |||||||||||
Investments in qualified affordable housing projects | (401 | ) | (139 | ) | (2,903 | ) | (416 | ) | |||||||
Stock-based compensation benefit | — | (1 | ) | (441 | ) | (807 | ) | ||||||||
FDIC insurance premium limitation | 466 | — | 1,483 | — | |||||||||||
Other, net | (5,226 | ) | 1,386 | (2,514 | ) | 1,243 | |||||||||
Actual income tax expense | $ | 27,171 | $ | 21,592 | $ | 88,542 | $ | 59,620 | |||||||
Effective income tax rate | 18.5 | % | 32.5 | % | 21.0 | % | 32.1 | % |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Non-vested stock awards/stock units outstanding | Stock options outstanding | |||||||||||||||
Shares available for grant | Number of shares | Weighted average grant date fair value | Number of shares | Weighted average exercise price | ||||||||||||
Balance at January 1, 2018 | 3,101,327 | 1,238,760 | $ | 20.00 | 757,867 | $ | 11.15 | |||||||||
Granted | (772,271 | ) | 772,271 | 23.54 | — | — | ||||||||||
Stock awards vested | — | (341,501 | ) | 17.35 | — | — | ||||||||||
Exercised | — | — | — | (49,794 | ) | 11.19 | ||||||||||
Forfeited | 55,356 | (50,056 | ) | 22.32 | (5,300 | ) | 13.18 | |||||||||
Canceled/expired | (5,300 | ) | — | — | — | 13.18 | ||||||||||
Balance at September 30, 2018 | 2,379,112 | 1,619,474 | $ | 22.08 | 702,773 | $ | 11.13 | |||||||||
Exercisable at September 30, 2018 | 701,106 | $ | 11.12 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Stock options | $ | 2 | $ | 48 | $ | 5 | $ | 146 | |||||||
Non-vested stock awards/performance units | 3,113 | 1,921 | 9,299 | 5,456 | |||||||||||
Total | $ | 3,115 | $ | 1,969 | $ | 9,304 | $ | 5,602 | |||||||
Income tax benefit | 654 | 640 | 1,954 | 1,821 | |||||||||||
Proceeds from stock option exercises | 154 | 65 | 556 | 1,193 |
September 30, 2018 | |||
Stock options | $ | — | |
Non-vested stock awards/performance units | 21,289 | ||
Total | $ | 21,289 |
For the three months ended | |||||||||||||||
September 30, 2018 | September 30, 2017 | ||||||||||||||
Pension Benefits | Other Post Retirement Benefits | Pension Benefits | Other Post Retirement Benefits | ||||||||||||
Service cost | $ | — | $ | 20 | $ | — | $ | — | |||||||
Interest cost | 2,121 | 254 | — | 101 | |||||||||||
Expected return on plan assets | (3,353 | ) | — | — | — | ||||||||||
Net amortization and deferral | — | — | — | 8 | |||||||||||
Net periodic pension and other post-retirement (benefit) expense | $ | (1,232 | ) | $ | 274 | $ | — | $ | 109 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
For the nine months ended | |||||||||||||||
September 30, 2018 | September 30, 2017 | ||||||||||||||
Pension Benefits | Other Post Retirement Benefits | Pension Benefits | Other Post Retirement Benefits | ||||||||||||
Service cost | $ | — | $ | 62 | $ | — | $ | — | |||||||
Interest cost | 6,364 | 780 | — | 302 | |||||||||||
Expected return on plan assets | (10,058 | ) | — | — | — | ||||||||||
Net amortization and deferral | — | — | — | 26 | |||||||||||
Net periodic pension and other post-retirement (benefit) expense | $ | (3,694 | ) | $ | 842 | $ | — | $ | 328 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Other non-interest expense: | |||||||||||||||
Professional fees | $ | 2,866 | $ | 2,234 | $ | 9,269 | $ | 6,917 | |||||||
Advertising and promotion | 1,147 | 649 | 3,962 | 2,034 | |||||||||||
Telephone | 1,238 | 589 | 4,500 | 1,705 | |||||||||||
Operational losses | 791 | 130 | 2,945 | 642 | |||||||||||
Stationery & office supplies | 507 | 170 | 1,790 | 641 | |||||||||||
Insurance & surety bond premium | 1,299 | 841 | 2,680 | 2,065 | |||||||||||
Other | 5,325 | 3,734 | 14,534 | 11,072 | |||||||||||
Total other non-interest expense | $ | 13,173 | $ | 8,347 | $ | 39,680 | $ | 25,076 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income available to common stockholders | $ | 117,657 | $ | 44,852 | $ | 326,775 | $ | 126,319 | |||||||
Weighted average common shares outstanding for computation of basic EPS | 225,088,511 | 135,346,791 | 224,969,121 | 135,276,634 | |||||||||||
Common-equivalent shares due to the dilutive effect of stock options and unvested performance share grants(1) | 534,384 | 603,369 | 535,342 | 618,879 | |||||||||||
Weighted average common shares for computation of diluted EPS | 225,622,895 | 135,950,160 | 225,504,463 | 135,895,513 | |||||||||||
EPS: | |||||||||||||||
Basic | $ | 0.52 | $ | 0.33 | $ | 1.45 | $ | 0.93 | |||||||
Diluted | 0.52 | 0.33 | 1.45 | 0.93 | |||||||||||
Weighted average common shares that could be exercised that were anti-dilutive for the period(2) | — | — | — | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Actual | Minimum capital required - Basel III phase-in schedule | Minimum capital required - Basel III fully phased-in | Required to be considered well- capitalized | ||||||||||||||||||||||||
Capital amount | Ratio | Capital amount | Ratio | Capital amount | Ratio | Capital amount | Ratio | ||||||||||||||||||||
September 30, 2018 | |||||||||||||||||||||||||||
Common equity tier 1 to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | $ | 2,970,656 | 14.23 | % | $ | 1,330,866 | 6.375 | % | $ | 1,461,343 | 7.00 | % | $ | 1,356,961 | 6.50 | % | |||||||||||
Sterling Bancorp | 2,710,568 | 12.97 | 1,332,021 | 6.375 | 1,462,611 | 7.00 | N/A | N/A | |||||||||||||||||||
Tier 1 capital to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | 2,970,656 | 14.23 | % | 1,644,011 | 7.875 | % | 1,774,488 | 8.50 | % | 1,670,106 | 8.00 | % | |||||||||||||||
Sterling Bancorp | 2,849,195 | 13.64 | 1,645,438 | 7.875 | 1,776,028 | 8.50 | N/A | N/A | |||||||||||||||||||
Total capital to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | 3,235,560 | 15.50 | % | 2,061,538 | 9.875 | % | 2,192,015 | 10.50 | % | 2,087,633 | 10.00 | % | |||||||||||||||
Sterling Bancorp | 3,080,643 | 14.74 | 2,063,327 | 9.875 | 2,193,917 | 10.50 | N/A | N/A | |||||||||||||||||||
Tier 1 leverage ratio: | |||||||||||||||||||||||||||
Sterling National Bank | 2,970,656 | 10.10 | % | 1,176,278 | 4.00 | % | 1,176,278 | 4.00 | % | 1,470,347 | 5.00 | % | |||||||||||||||
Sterling Bancorp | 2,849,195 | 9.68 | 1,177,205 | 4.00 | 1,177,205 | 4.00 | N/A | N/A |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Actual | Minimum capital required - Basel III phase-in schedule | Minimum capital required - Basel III fully phased-in | Required to be considered well- capitalized | ||||||||||||||||||||||||
Capital amount | Ratio | Capital amount | Ratio | Capital amount | Ratio | Capital amount | Ratio | ||||||||||||||||||||
December 31, 2017 | |||||||||||||||||||||||||||
Common equity tier 1 to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | $ | 2,770,381 | 13.95 | % | $ | 1,142,247 | 5.75 | % | $ | 1,390,561 | 7.00 | % | $ | 1,291,236 | 6.50 | % | |||||||||||
Sterling Bancorp | 2,458,449 | 12.37 | 1,143,045 | 5.75 | 1,391,534 | 7.00 | N/A | N/A | |||||||||||||||||||
Tier 1 capital to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | 2,770,381 | 13.95 | % | 1,440,224 | 7.25 | % | 1,688,539 | 8.50 | % | 1,589,213 | 8.00 | % | |||||||||||||||
Sterling Bancorp | 2,597,669 | 13.07 | 1,441,231 | 7.25 | 1,689,719 | 8.50 | N/A | N/A | |||||||||||||||||||
Total capital to RWA: | |||||||||||||||||||||||||||
Sterling National Bank | 3,021,658 | 15.21 | % | 1,837,527 | 9.25 | % | 2,085,842 | 10.50 | % | 1,986,516 | 10.00 | % | |||||||||||||||
Sterling Bancorp | 2,818,404 | 14.18 | 1,838,812 | 9.25 | 2,087,300 | 10.50 | N/A | N/A | |||||||||||||||||||
Tier 1 leverage ratio: | |||||||||||||||||||||||||||
Sterling National Bank | 2,770,381 | 10.10 | % | 1,097,449 | 4.00 | % | 1,097,449 | 4.00 | % | 1,371,811 | 5.00 | % | |||||||||||||||
Sterling Bancorp | 2,597,669 | 9.39 | 1,106,977 | 4.00 | 1,106,977 | 4.00 | N/A | N/A |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
Loan origination commitments | $ | 372,047 | $ | 510,135 | |||
Unused lines of credit | 1,359,953 | 1,195,656 | |||||
Letters of credit | 289,877 | 166,824 |
Remainder of 2018 | $ | 4,863 | |
2019 | 17,817 | ||
2020 | 16,577 | ||
2021 | 13,878 | ||
2022 | 10,007 | ||
2023 | 8,163 | ||
2024 and thereafter | 22,158 | ||
$ | 93,463 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
September 30, 2018 | |||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Assets: | |||||||||||||||
Investment securities available for sale: | |||||||||||||||
Residential MBS(1): | |||||||||||||||
Agency-backed | $ | 2,207,191 | $ | — | $ | 2,207,191 | $ | — | |||||||
CMOs(2)/Other MBS | 576,052 | — | 576,052 | — | |||||||||||
Total residential MBS | 2,783,243 | — | 2,783,243 | — | |||||||||||
Other securities: | |||||||||||||||
Federal agencies | 317,733 | — | 317,733 | — | |||||||||||
Corporate | 503,326 | — | 503,326 | — | |||||||||||
State and municipal | 238,942 | — | 238,942 | — | |||||||||||
Total other securities | 1,060,001 | — | 1,060,001 | — | |||||||||||
Total available for sale securities | 3,843,244 | — | 3,843,244 | — | |||||||||||
Swaps | 3,637 | — | 3,637 | — | |||||||||||
Total assets | $ | 3,846,881 | $ | — | $ | 3,846,881 | $ | — | |||||||
Liabilities: | |||||||||||||||
Swaps | $ | (18,768 | ) | $ | — | $ | (18,768 | ) | $ | — | |||||
Total liabilities | $ | (18,768 | ) | $ | — | $ | (18,768 | ) | $ | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
December 31, 2017 | |||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Assets: | |||||||||||||||
Investment securities available for sale: | |||||||||||||||
Residential MBS: | |||||||||||||||
Agency-backed | $ | 2,150,649 | $ | — | $ | 2,150,649 | $ | — | |||||||
CMOs/Other MBS | 649,403 | — | 649,403 | — | |||||||||||
Total residential MBS | 2,800,052 | — | 2,800,052 | — | |||||||||||
Federal agencies | 399,996 | — | 399,996 | — | |||||||||||
Corporate bonds | 148,226 | — | 148,226 | — | |||||||||||
State and municipal | 263,798 | — | 263,798 | — | |||||||||||
Total other securities | 812,020 | — | 812,020 | — | |||||||||||
Total available for sale securities | 3,612,072 | — | 3,612,072 | — | |||||||||||
Swaps | 4,457 | — | 4,457 | — | |||||||||||
Total assets | $ | 3,616,529 | $ | — | $ | 3,616,529 | $ | — | |||||||
Liabilities: | |||||||||||||||
Swaps | $ | 7,980 | $ | — | $ | 7,980 | $ | — | |||||||
Total liabilities | $ | 7,980 | $ | — | $ | 7,980 | $ | — |
September 30, 2018 | |||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Traditional C&I | $ | 30,895 | $ | — | $ | — | $ | 30,895 | |||||||
Commercial real estate | 11,160 | — | — | 11,160 | |||||||||||
Multi-family | 1,236 | — | — | 1,236 | |||||||||||
Residential mortgage | 769 | — | — | 769 | |||||||||||
Total impaired loans measured at fair value | $ | 44,060 | $ | — | $ | — | $ | 44,060 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
December 31, 2017 | |||||||||||||||
Fair value | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Traditional C&I | $ | 114 | $ | — | $ | — | $ | 114 | |||||||
Commercial real estate | 782 | — | — | 782 | |||||||||||
Total impaired loans measured at fair value | $ | 896 | $ | — | $ | — | $ | 896 |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
September 30, 2018 | |||||||||||||||
Carrying amount | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents | $ | 533,984 | $ | 533,984 | $ | — | $ | — | |||||||
Securities available for sale | 3,843,244 | — | 3,843,244 | — | |||||||||||
Securities held to maturity | 2,842,728 | — | 2,746,081 | — | |||||||||||
Loans held for sale | 31,042 | — | 31,042 | — | |||||||||||
Portfolio loans, net | 20,441,849 | — | — | 20,317,154 | |||||||||||
Accrued interest receivable on securities | 43,934 | — | 43,934 | — | |||||||||||
Accrued interest receivable on loans | 65,443 | — | — | 65,443 | |||||||||||
FHLB stock and FRB stock | 351,455 | — | — | — | |||||||||||
Swaps | 3,637 | — | 3,637 | — | |||||||||||
Financial liabilities: | |||||||||||||||
Non-maturity deposits | (18,885,107 | ) | (18,885,107 | ) | — | — | |||||||||
Certificates of deposit | (2,570,950 | ) | — | (2,532,989 | ) | — | |||||||||
FHLB borrowings | (4,429,110 | ) | — | (4,403,358 | ) | — | |||||||||
Other borrowings | (22,888 | ) | — | (22,886 | ) | — | |||||||||
Senior Notes | (200,972 | ) | — | (199,370 | ) | — | |||||||||
Subordinated Notes | (172,885 | ) | — | (172,061 | ) | — | |||||||||
Mortgage escrow funds | (96,952 | ) | — | (87,766 | ) | — | |||||||||
Accrued interest payable on deposits | (1,905 | ) | — | (1,905 | ) | — | |||||||||
Accrued interest payable on borrowings | (14,284 | ) | — | (14,284 | ) | — | |||||||||
Swaps | (18,768 | ) | — | (18,768 | ) | — |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
December 31, 2017 | |||||||||||||||
Carrying amount | Level 1 inputs | Level 2 inputs | Level 3 inputs | ||||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents | $ | 479,906 | $ | 479,906 | $ | — | $ | — | |||||||
Securities available for sale | 3,612,072 | — | 3,612,072 | — | |||||||||||
Securities held to maturity | 2,862,489 | — | 2,863,909 | — | |||||||||||
Loans held for sale | 5,246 | — | 5,246 | — | |||||||||||
Portfolio loans, net | 19,931,076 | — | — | 19,903,231 | |||||||||||
Accrued interest receivable on securities | 34,652 | — | 34,652 | — | |||||||||||
Accrued interest receivable on loans | 59,446 | — | — | 59,446 | |||||||||||
FHLB stock and FRB stock | 284,112 | — | — | — | |||||||||||
Swaps | 4,457 | — | 4,457 | — | |||||||||||
Financial liabilities: | |||||||||||||||
Non-maturity deposits | (18,098,566 | ) | (18,098,566 | ) | — | — | |||||||||
Certificates of deposit | (2,439,638 | ) | — | (2,412,495 | ) | — | |||||||||
FHLB borrowings | (4,510,123 | ) | — | (4,496,184 | ) | — | |||||||||
Other borrowings | (30,162 | ) | — | (30,160 | ) | — | |||||||||
Senior Notes | (278,209 | ) | — | (278,968 | ) | — | |||||||||
Subordinated Notes | (172,716 | ) | — | (179,619 | ) | — | |||||||||
Mortgage escrow funds | (122,641 | ) | — | (117,050 | ) | — | |||||||||
Accrued interest payable on deposits | (1,103 | ) | — | (1,103 | ) | — | |||||||||
Accrued interest payable on borrowings | (9,649 | ) | — | (9,649 | ) | — | |||||||||
Swaps | (7,980 | ) | — | (7,980 | ) | — |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
Net unrealized holding loss on available for sale securities | $ | (159,493 | ) | $ | (36,899 | ) | |
Related income tax benefit | 44,084 | 14,575 | |||||
Available for sale securities, net of tax | (115,409 | ) | (22,324 | ) | |||
Net unrealized holding loss on securities transferred to held to maturity | (3,741 | ) | (4,426 | ) | |||
Related income tax benefit | 1,034 | 1,748 | |||||
Securities transferred to held to maturity, net of tax | (2,707 | ) | (2,678 | ) | |||
Net unrealized holding loss on retirement plans | (773 | ) | (1,924 | ) | |||
Related income tax benefit | 214 | 760 | |||||
Retirement plans, net of tax | (559 | ) | (1,164 | ) | |||
Accumulated other comprehensive loss | $ | (118,675 | ) | $ | (26,166 | ) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Net unrealized holding (loss) gain on available for sale securities | Net unrealized holding (loss) gain on securities transferred to held to maturity | Net unrealized holding (loss) gain on retirement plans | Total | ||||||||||||
For the three months ended September 30, 2018 | |||||||||||||||
Balance beginning of the period | $ | (95,852 | ) | $ | (2,870 | ) | $ | (859 | ) | $ | (99,581 | ) | |||
Other comprehensive loss before reclassification | (19,613 | ) | — | — | (19,613 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | 56 | 163 | 300 | 519 | |||||||||||
Total other comprehensive (loss) income | (19,557 | ) | 163 | 300 | (19,094 | ) | |||||||||
Balance at end of period | $ | (115,409 | ) | $ | (2,707 | ) | $ | (559 | ) | $ | (118,675 | ) | |||
For the three months ended September 30, 2017 | |||||||||||||||
Balance beginning of the period | $ | (12,704 | ) | $ | (2,969 | ) | $ | (695 | ) | $ | (16,368 | ) | |||
Other comprehensive gain before reclassification | 2,538 | — | — | 2,538 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | 21 | 144 | 6 | 171 | |||||||||||
Total other comprehensive income | 2,559 | 144 | 6 | 2,709 | |||||||||||
Balance at end of period | $ | (10,145 | ) | $ | (2,825 | ) | $ | (689 | ) | $ | (13,659 | ) | |||
Location in consolidated income statements where reclassification from accumulated other comprehensive loss is included | Net loss on sale of securities | Interest income on securities | Other non-interest expense |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
Net unrealized holding (loss) gain on available for sale securities | Net unrealized holding (loss)gain on securities transferred to held to maturity | Net unrealized holding (loss) gain on retirement plans | Total | ||||||||||||
For the nine months ended September 30, 2018 | |||||||||||||||
Balance beginning of the period | $ | (22,324 | ) | $ | (2,678 | ) | $ | (1,164 | ) | $ | (26,166 | ) | |||
Reclassification of the stranded income tax effects from the enactment of the Tax Cuts and Jobs Act of 2017 from accumulated other comprehensive loss | (4,376 | ) | (525 | ) | (228 | ) | (5,129 | ) | |||||||
Other comprehensive loss before reclassification | (94,611 | ) | — | — | (94,611 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | 5,902 | 496 | 833 | 7,231 | |||||||||||
Total other comprehensive (loss) income | (93,085 | ) | (29 | ) | 605 | (92,509 | ) | ||||||||
Balance at end of period | $ | (115,409 | ) | $ | (2,707 | ) | $ | (559 | ) | $ | (118,675 | ) | |||
For the nine months ended September 30, 2017 | |||||||||||||||
Balance beginning of the period | $ | (22,637 | ) | $ | (3,264 | ) | $ | (734 | ) | $ | (26,635 | ) | |||
Other comprehensive gain before reclassification | 12,218 | — | — | 12,218 | |||||||||||
Amounts reclassified from AOCI | 274 | 439 | 45 | 758 | |||||||||||
Total other comprehensive income | 12,492 | 439 | 45 | 12,976 | |||||||||||
Balance at end of period | $ | (10,145 | ) | $ | (2,825 | ) | $ | (689 | ) | $ | (13,659 | ) | |||
Location in consolidated income statements where reclassification from AOCI is included | Net loss on sale of securities | Interest income on securities | Other non-interest expense |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
STERLING BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (Dollars in thousands, except share and per share data) |
• | difficulties and delays in integrating our and Astoria’s businesses or fully realizing cost savings and other benefits, and business disruption following the Astoria Merger; |
• | difficulties and delays in integrating Advantage Funding into our business and business disruption following the Advantage Funding Acquisition; |
• | our ability to successfully implement growth and strategic initiatives, to increase revenues faster than we grow expenses, and to integrate and fully realize cost savings and other benefits we estimate in connection with acquisitions and limit business disruption arising therefrom; |
• | a deterioration in general economic conditions, either nationally, internationally, or in our market areas, including extended declines in real estate markets and constrained financial markets; |
• | oversight of the Bank by the Consumer Financial Protection Bureau; |
• | adverse publicity, regulatory actions or litigation with respect to us or other well-known financial services companies and the financial services industry in general and a failure to satisfy regulatory standards; |
• | our ability to make accurate assumptions and judgments about an appropriate level of allowance for loan losses and the collectability of our loan portfolio, including changes in the level and trend of loan delinquencies and write-offs that may lead to increased losses and non-performing assets in our loan portfolio, result in our allowance for loan losses not being adequate to cover actual losses, and/or require us to materially increase our reserves; |
• | our ability to manage changes in market interest rates, which could adversely affect our financial condition and results of operations; |
• | our use of estimates in determining the fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; |
• | our ability to capitalize on our substantial investments in our information technology and operational infrastructure and systems; |
• | the effects of, and changes in, laws and regulations (including laws and regulations concerning banking and taxes) with which we and the Bank must comply; |
• | changes in other economic, competitive, governmental, regulatory and technological factors affecting our markets, operations, pricing, products, services and fees; and |
• | our success at managing the risks involved in the foregoing and managing our business. |
• | Target specific “high value” client segments and geographic markets in which we have competitive advantages. |
• | Deploy a single point of contact, relationship-based distribution strategy through our commercial banking teams and financial centers. |
• | Continuously expand and refine our delivery and distribution channels by rationalizing our investments in businesses that do not meet our risk-adjusted return targets and re-allocating our capital and resources to hiring commercial banking teams and growing other businesses that are in-line with our commercial banking strategy. |
• | Maximize efficiency through a technology enabled, low-cost operating platform and by controlling operating costs. |
• | Create a high productivity culture through differentiated compensation programs based on a pay-for-performance philosophy. |
• | Maintain strong risk management systems and proactively manage enterprise risk. |
At or for the three months ended September 30, | At or for the nine months ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
End of period balances: | |||||||||||||||
Total securities | $ | 6,685,972 | $ | 4,515,650 | $ | 6,685,972 | $ | 4,515,650 | |||||||
Portfolio loans | 20,533,214 | 10,493,535 | 20,533,214 | 10,493,535 | |||||||||||
Total assets | 31,261,265 | 16,780,097 | 31,261,265 | 16,780,097 | |||||||||||
Non-interest bearing deposits | 4,651,369 | 3,134,359 | 4,651,369 | 3,134,359 | |||||||||||
Interest bearing deposits | 16,804,688 | 7,909,079 | 16,804,688 | 7,909,079 | |||||||||||
Total deposits | 21,456,057 | 11,043,438 | 21,456,057 | 11,043,438 | |||||||||||
Borrowings | 4,825,855 | 3,453,783 | 4,825,855 | 3,453,783 | |||||||||||
Stockholders’ equity | 4,438,303 | 1,971,480 | 4,438,303 | 1,971,480 | |||||||||||
Tangible common stockholders’ equity1 | 2,554,495 | 1,215,190 | 2,554,495 | 1,215,190 | |||||||||||
Average balances: | |||||||||||||||
Total securities | $ | 6,774,712 | $ | 3,916,076 | $ | 6,710,104 | $ | 3,543,776 | |||||||
Total loans2 | 20,386,994 | 10,186,414 | 20,123,704 | 9,754,768 | |||||||||||
Total assets | 31,036,026 | 15,661,514 | 30,686,808 | 14,802,911 | |||||||||||
Non-interest bearing deposits | 4,174,908 | 3,042,392 | 4,036,303 | 3,134,621 | |||||||||||
Interest bearing deposits | 16,940,446 | 7,648,614 | 16,822,651 | 7,254,884 | |||||||||||
Total deposits and mortgage escrow | 21,115,354 | 10,691,006 | 20,858,954 | 10,389,505 | |||||||||||
Borrowings | 5,052,752 | 2,779,143 | 5,029,411 | 2,301,036 | |||||||||||
Stockholders’ equity | 4,397,823 | 1,955,252 | 4,316,455 | 1,913,072 | |||||||||||
Tangible common stockholders’ equity1 | 2,506,198 | 1,197,754 | 2,430,260 | 1,153,282 | |||||||||||
Selected operating data: | |||||||||||||||
Total interest and dividend income | $ | 309,025 | $ | 145,692 | $ | 895,276 | $ | 405,955 | |||||||
Total interest expense | 65,076 | 25,619 | 170,743 | 63,834 | |||||||||||
Net interest income | 243,949 | 120,073 | 724,533 | 342,121 | |||||||||||
Provision for loan losses | 9,500 | 5,000 | 35,500 | 14,000 | |||||||||||
Net interest income after provision for loan losses | 234,449 | 115,073 | 689,033 | 328,121 | |||||||||||
Total non-interest income | 24,145 | 13,988 | 80,720 | 40,442 | |||||||||||
Total non-interest expense | 111,773 | 62,617 | 348,448 | 182,624 | |||||||||||
Income before income tax expense | 146,821 | 66,444 | 421,305 | 185,939 | |||||||||||
Income tax expense | 27,171 | 21,592 | 88,542 | 59,620 | |||||||||||
Net income | $ | 119,650 | $ | 44,852 | $ | 332,763 | $ | 126,319 | |||||||
Per share data: | |||||||||||||||
Reported basic EPS (GAAP) | $ | 0.52 | $ | 0.33 | $ | 1.45 | $ | 0.93 | |||||||
Reported diluted EPS (GAAP) | 0.52 | 0.33 | 1.45 | 0.93 | |||||||||||
Adjusted diluted EPS1 (non-GAAP) | 0.51 | 0.35 | 1.48 | 0.98 | |||||||||||
Dividends declared per common share | 0.07 | 0.07 | 0.21 | 0.21 | |||||||||||
Book value per share | 19.07 | 14.52 | 19.07 | 14.52 | |||||||||||
Tangible book value per common share1 | 11.33 | 8.95 | 11.33 | 8.95 |
At or for the three months ended September 30, | At or for the nine months ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Common shares outstanding: | |||||||||||||||
Shares outstanding at period end | 225,446,089 | 135,807,544 | 225,446,089 | 135,807,544 | |||||||||||
Weighted average shares basic | 225,088,511 | 135,346,791 | 224,969,121 | 135,276,634 | |||||||||||
Weighted average shares diluted | 225,622,895 | 135,950,160 | 225,504,463 | 135,895,513 | |||||||||||
Other data: | |||||||||||||||
Full time equivalent employees at period end | 1,959 | 992 | 1,959 | 992 | |||||||||||
Financial centers at period end | 113 | 40 | 113 | 40 | |||||||||||
Performance ratios: | |||||||||||||||
Return on average assets | 1.50 | % | 1.14 | % | 1.42 | % | 1.14 | % | |||||||
Return on average equity | 10.61 | 9.10 | 10.12 | 8.83 | |||||||||||
Reported return on average tangible assets1 | 1.59 | 1.19 | 1.51 | 1.20 | |||||||||||
Adjusted return on average tangible assets1 | 1.55 | 1.27 | 1.54 | 1.27 | |||||||||||
Reported return on average TCE1 | 18.63 | 14.86 | 17.98 | 14.64 | |||||||||||
Adjusted return on average TCE1 | 18.09 | 15.85 | 18.33 | 15.50 | |||||||||||
Reported operating efficiency1 | 41.7 | 46.7 | 43.3 | 47.7 | |||||||||||
Adjusted operating efficiency1 | 38.9 | 40.6 | 39.1 | 42.1 | |||||||||||
Net interest margin-GAAP | 3.48 | 3.29 | 3.53 | 3.35 | |||||||||||
Net interest margin-tax equivalent3 | 3.54 | 3.42 | 3.59 | 3.48 | |||||||||||
Capital ratios (Company): | |||||||||||||||
Tier 1 leverage ratio | 9.68 | % | 8.42 | % | 9.68 | % | 8.42 | % | |||||||
Common equity Tier 1 capital ratio | 12.97 | 8.42 | 12.97 | 8.42 | |||||||||||
Tier 1 risk-based capital ratio | 13.64 | 10.27 | 13.64 | 10.27 | |||||||||||
Total risk-based capital ratio | 14.74 | 12.15 | 14.74 | 12.15 | |||||||||||
Tangible equity to tangible assets | 9.12 | 7.58 | 9.12 | 7.58 | |||||||||||
Tangible common equity to tangible assets1 | 8.65 | 7.58 | 8.65 | 7.58 | |||||||||||
Regulatory capital ratios (Bank): | |||||||||||||||
Tier 1 leverage ratio | 10.10 | % | 8.54 | % | 10.10 | % | 8.54 | % | |||||||
Tier 1 risk-based capital ratio and common equity Tier 1 capital ratio | 14.23 | 10.41 | 14.23 | 10.41 | |||||||||||
Total risk-based capital ratio | 15.50 | 12.41 | 15.50 | 12.41 | |||||||||||
Asset quality data and ratios: | |||||||||||||||
Allowance for loan losses | $ | 91,365 | $ | 72,128 | $ | 91,365 | $ | 72,128 | |||||||
Non-performing loans (“NPLs”) | 185,222 | 69,452 | 185,222 | 69,452 | |||||||||||
Non-performing assets (“NPAs”) | 207,957 | 81,149 | 207,957 | 81,149 | |||||||||||
Net charge-offs | 4,161 | 3,023 | 22,042 | 5,494 | |||||||||||
NPAs to total assets | 0.67 | % | 0.48 | % | 0.67 | % | 0.48 | % | |||||||
NPLs to total loans4 | 0.90 | 0.66 | 0.90 | 0.66 | |||||||||||
Allowance for loan losses to non-performing loans | 49.33 | 103.85 | 49.33 | 103.85 | |||||||||||
Allowance for loan losses to total loans4 | 0.44 | 0.69 | 0.44 | 0.69 | |||||||||||
Annualized net charge-offs to average loans | 0.08 | 0.12 | 0.15 | 0.08 | |||||||||||
________________ | |||||||||||||||
1 See a reconciliation of as reported financial measures to as adjusted (non-GAAP) financial measures beginning on page 71 below under the caption “Supplemental Reporting of Non-GAAP Financial Measures.” TCE is tangible common stockholders’ equity. 2 Includes loans held for sale but excludes the allowance for loan losses. 3 Tax equivalent basis represents interest income earned on municipal securities divided by the applicable Federal tax rate of 21% for 2018 and 35% for 2017. 4 Total loans excludes loans held for sale. |
• | the closing of the Astoria Merger on October 2, 2017; |
• | loans and deposits originated by our commercial banking teams and financial centers; and |
• | the closing of the Advantage Funding Acquisition on April 2, 2018. |
For the three months ended September 30, | |||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||
Average balance | Interest | Yield/Rate | Average balance | Interest | Yield/Rate | ||||||||||||||||
Interest earning assets: | |||||||||||||||||||||
Traditional C&I and commercial finance loans | $ | 6,102,184 | $ | 81,296 | 5.29 | % | $ | 4,564,517 | $ | 58,395 | 5.08 | % | |||||||||
Commercial real estate (includes multi-family) | 9,170,117 | 107,292 | 4.64 | 4,443,142 | 47,336 | 4.23 | |||||||||||||||
ADC | 252,710 | 4,115 | 6.46 | 229,242 | 4,197 | 7.26 | |||||||||||||||
Commercial loans | 15,525,011 | 192,703 | 4.92 | 9,236,901 | 109,928 | 4.72 | |||||||||||||||
Consumer loans | 330,061 | 4,651 | 5.59 | 262,693 | 2,891 | 4.37 | |||||||||||||||
Residential mortgage loans | 4,531,922 | 59,857 | 5.28 | 686,820 | 7,079 | 4.12 | |||||||||||||||
Total net loans1 | 20,386,994 | 257,211 | 5.01 | 10,186,414 | 119,898 | 4.67 | |||||||||||||||
Securities taxable | 4,193,910 | 29,765 | 2.82 | 2,483,718 | 15,141 | 2.42 | |||||||||||||||
Securities tax exempt | 2,580,802 | 19,296 | 2.99 | 1,432,358 | 13,141 | 3.67 | |||||||||||||||
Interest earning deposits | 278,450 | 1,038 | 1.48 | 202,650 | 462 | 0.90 | |||||||||||||||
FRB and FHLB stock | 359,777 | 5,767 | 6.36 | 165,980 | 1,649 | 3.94 | |||||||||||||||
Total securities and other earning assets | 7,412,939 | 55,866 | 2.99 | 4,284,706 | 30,393 | 2.81 | |||||||||||||||
Total interest earning assets | 27,799,933 | 313,077 | 4.47 | 14,471,120 | 150,291 | 4.12 | |||||||||||||||
Non-interest earning assets | 3,236,093 | 1,190,394 | |||||||||||||||||||
Total assets | $ | 31,036,026 | $ | 15,661,514 | |||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||
Interest bearing demand deposits | $ | 4,286,278 | $ | 9,717 | 0.90 | % | $ | 2,298,645 | $ | 3,701 | 0.64 | % | |||||||||
Savings deposits2 | 2,678,662 | 1,651 | 0.24 | 825,620 | 925 | 0.44 | |||||||||||||||
Money market deposits | 7,404,208 | 16,547 | 0.89 | 3,889,780 | 6,897 | 0.70 | |||||||||||||||
Certificates of deposit | 2,571,298 | 8,059 | 1.24 | 634,569 | 1,869 | 1.17 | |||||||||||||||
Total interest bearing deposits | 16,940,446 | 35,974 | 0.84 | 7,648,614 | 13,392 | 0.69 | |||||||||||||||
Senior Notes | 201,894 | 1,619 | 3.21 | 76,664 | 1,143 | 5.96 | |||||||||||||||
Other borrowings | 4,678,011 | 25,129 | 2.13 | 2,529,854 | 8,733 | 1.37 | |||||||||||||||
Subordinated Notes | 172,847 | 2,354 | 5.45 | 172,625 | 2,351 | 5.45 | |||||||||||||||
Total borrowings | 5,052,752 | 29,102 | 2.29 | 2,779,143 | 12,227 | 1.75 | |||||||||||||||
Total interest bearing liabilities | 21,993,198 | 65,076 | 1.17 | 10,427,757 | 25,619 | 0.97 | |||||||||||||||
Non-interest bearing deposits | 4,174,908 | 3,042,392 | |||||||||||||||||||
Other non-interest bearing liabilities | 470,097 | 236,113 | |||||||||||||||||||
Total liabilities | 26,638,203 | 13,706,262 | |||||||||||||||||||
Stockholders’ equity | 4,397,823 | 1,955,252 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 31,036,026 | $ | 15,661,514 | |||||||||||||||||
Net interest rate spread3 | 3.30 | % | 3.15 | % | |||||||||||||||||
Net interest earning assets4 | $ | 5,806,735 | $ | 4,043,363 | |||||||||||||||||
Net interest margin - tax equivalent | 248,001 | 3.54 | % | 124,672 | 3.42 | % | |||||||||||||||
Less tax equivalent adjustment | (4,052 | ) | (4,599 | ) | |||||||||||||||||
Net interest income | $ | 243,949 | $ | 120,073 | |||||||||||||||||
Ratio of interest earning assets to interest bearing liabilities | 126.4 | % | 138.8 | % |
For the nine months ended September 30, | |||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||
Average balance | Interest | Yield/Rate | Average balance | Interest | Yield/Rate | ||||||||||||||||
Interest earning assets: | |||||||||||||||||||||
Traditional C&I and commercial finance loans | $ | 5,653,784 | $ | 220,175 | 5.21 | % | $ | 4,205,530 | 159,213 | 5.06 | % | ||||||||||
Commercial real estate (includes multi-family) | 9,113,324 | 318,583 | 4.67 | 4,344,338 | 136,451 | 4.20 | |||||||||||||||
ADC | 255,894 | 11,216 | 5.86 | 239,336 | 10,639 | 5.94 | |||||||||||||||
Commercial loans | 15,023,002 | 549,974 | 4.89 | 8,789,204 | 306,303 | 4.66 | |||||||||||||||
Consumer loans | 345,216 | 14,174 | 5.49 | 270,550 | 9,095 | 4.49 | |||||||||||||||
Residential mortgage loans | 4,755,486 | 181,931 | 5.10 | 695,014 | 20,911 | 4.01 | |||||||||||||||
Total net loans1 | 20,123,704 | 746,079 | 4.96 | 9,754,768 | 336,309 | 4.61 | |||||||||||||||
Securities taxable | 4,108,186 | 85,856 | 2.79 | 2,215,923 | 40,535 | 2.45 | |||||||||||||||
Securities tax exempt | 2,601,918 | 58,176 | 2.98 | 1,327,853 | 36,846 | 3.70 | |||||||||||||||
Interest earning deposits | 292,096 | 2,649 | 1.21 | 202,073 | 1,018 | 0.67 | |||||||||||||||
FRB and FHLB stock | 341,380 | 14,733 | 5.77 | 145,647 | 4,142 | 3.80 | |||||||||||||||
Total securities and other earning assets | 7,343,580 | 161,414 | 2.94 | 3,891,496 | 82,541 | 2.84 | |||||||||||||||
Total interest earning assets | 27,467,284 | 907,493 | 4.42 | 13,646,264 | 418,850 | 4.10 | |||||||||||||||
Non-interest earning assets | 3,219,524 | 1,156,647 | |||||||||||||||||||
Total assets | $ | 30,686,808 | $ | 14,802,911 | |||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||
Interest bearing demand deposits | $ | 4,085,595 | $ | 22,269 | 0.73 | % | $ | 2,075,434 | $ | 8,946 | 0.58 | % | |||||||||
Savings deposits2 | 2,836,805 | 4,674 | 0.22 | 813,136 | 2,741 | 0.45 | |||||||||||||||
Money market deposits | 7,378,522 | 40,327 | 0.73 | 3,766,428 | 17,350 | 0.62 | |||||||||||||||
Certificates of deposit | 2,521,729 | 21,375 | 1.13 | 599,886 | 4,767 | 1.06 | |||||||||||||||
Total interest bearing deposits | 16,822,651 | 88,645 | 0.70 | 7,254,884 | 33,804 | 0.62 | |||||||||||||||
Senior Notes | 252,455 | 7,147 | 3.79 | 76,581 | 3,427 | 5.98 | |||||||||||||||
Other borrowings | 4,604,165 | 67,891 | 1.97 | 2,051,881 | 19,552 | 1.27 | |||||||||||||||
Subordinated Notes | 172,791 | 7,060 | 5.45 | 172,574 | 7,050 | 5.45 | |||||||||||||||
Total borrowings | 5,029,411 | 82,098 | 2.18 | 2,301,036 | 30,029 | 1.74 | |||||||||||||||
Total interest bearing liabilities | 21,852,062 | 170,743 | 1.04 | 9,555,920 | 63,833 | 0.89 | |||||||||||||||
Non-interest bearing deposits | 4,036,303 | 3,134,621 | |||||||||||||||||||
Other non-interest bearing liabilities | 481,988 | 199,298 | |||||||||||||||||||
Total liabilities | 26,370,353 | 12,889,839 | |||||||||||||||||||
Stockholders’ equity | 4,316,455 | 1,913,072 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 30,686,808 | $ | 14,802,911 | |||||||||||||||||
Net interest rate spread3 | 3.38 | % | 3.21 | % | |||||||||||||||||
Net interest earning assets4 | $ | 5,615,222 | $ | 4,090,344 | |||||||||||||||||
Net interest margin - tax equivalent | 736,750 | 3.59 | % | 355,017 | 3.48 | % | |||||||||||||||
Less tax equivalent adjustment | (12,217 | ) | (12,896 | ) | |||||||||||||||||
Net interest income | $ | 724,533 | $ | 342,121 | |||||||||||||||||
Ratio of interest earning assets to interest bearing liabilities | 125.7 | % | 142.8 | % |
For the three months ended September 30, | |||||||||||
2018 vs 2017 | |||||||||||
Increase / (Decrease) due to | Total increase / | ||||||||||
Volume | Rate | (decrease) | |||||||||
Interest earning assets: | |||||||||||
Traditional C&I and commercial finance loans | $ | 20,398 | $ | 2,503 | $ | 22,901 | |||||
Commercial real estate (includes multi-family) | 54,949 | 5,007 | 59,956 | ||||||||
ADC | 405 | (487 | ) | (82 | ) | ||||||
Commercial loans | 75,752 | 7,023 | 82,775 | ||||||||
Consumer loans | 843 | 917 | 1,760 | ||||||||
Residential mortgage loans | 50,250 | 2,527 | 52,777 | ||||||||
Total loans | 126,845 | 10,467 | 137,312 | ||||||||
Securities taxable | 11,794 | 2,831 | 14,625 | ||||||||
Securities tax exempt | 8,988 | (2,833 | ) | 6,155 | |||||||
Interest earning deposits | 212 | 364 | 576 | ||||||||
FRB and FHLB stock | 2,699 | 1,419 | 4,118 | ||||||||
Total interest earning assets | 150,538 | 12,248 | 162,786 | ||||||||
Interest bearing liabilities: | |||||||||||
Interest bearing demand deposits | 4,093 | 1,923 | 6,016 | ||||||||
Savings deposits1 | 1,297 | (570 | ) | 727 | |||||||
Money market deposits | 7,421 | 2,230 | 9,651 | ||||||||
Certificates of deposit | 6,071 | 119 | 6,190 | ||||||||
Total interest bearing deposits | 18,882 | 3,702 | 22,584 | ||||||||
Senior Notes | 1,199 | (723 | ) | 476 | |||||||
Other borrowings | 9,978 | 6,417 | 16,395 | ||||||||
Subordinated Notes | 3 | — | 3 | ||||||||
Total borrowings | 11,180 | 5,694 | 16,874 | ||||||||
Total interest bearing liabilities | 30,062 | 9,396 | 39,458 | ||||||||
Change in tax equivalent net interest income | 120,476 | 2,852 | 123,328 | ||||||||
Less tax equivalent adjustment | 3,088 | (4,905 | ) | (1,817 | ) | ||||||
Change in net interest income | $ | 117,388 | $ | 7,757 | $ | 125,145 |
For the nine months ended September 30, | |||||||||||
2018 vs 2017 | |||||||||||
Increase / (Decrease) due to | Total increase / | ||||||||||
Volume | Rate | (decrease) | |||||||||
Interest earning assets: | |||||||||||
Traditional C&I and commercial finance loans | $ | 56,131 | $ | 4,832 | $ | 60,963 | |||||
Commercial real estate (includes multi-family) | 165,283 | 16,849 | 182,132 | ||||||||
ADC | 723 | (146 | ) | 577 | |||||||
Commercial loans | 222,137 | 21,535 | 243,672 | ||||||||
Consumer loans | 2,810 | 2,269 | 5,079 | ||||||||
Residential mortgage loans | 153,861 | 7,159 | 161,020 | ||||||||
Total loans | 378,808 | 30,963 | 409,771 | ||||||||
Securities taxable | 38,986 | 6,336 | 45,322 | ||||||||
Securities tax exempt | 29,623 | (8,294 | ) | 21,329 | |||||||
Interest earning deposits | 581 | 1,050 | 1,631 | ||||||||
FRB and FHLB stock | 7,642 | 2,948 | 10,590 | ||||||||
Total interest earning assets | 455,640 | 33,003 | 488,643 | ||||||||
Interest bearing liabilities: | |||||||||||
Interest bearing demand deposits | 10,516 | 2,807 | 13,323 | ||||||||
Savings deposits1 | 3,925 | (1,992 | ) | 1,933 | |||||||
Money market deposits | 19,390 | 3,587 | 22,977 | ||||||||
Certificates of deposit | 16,273 | 335 | 16,608 | ||||||||
Total interest bearing deposits | 50,104 | 4,737 | 54,841 | ||||||||
Senior Notes | 5,384 | (1,664 | ) | 3,720 | |||||||
Other borrowings | 33,685 | 14,654 | 48,339 | ||||||||
Subordinated Notes | 10 | — | 10 | ||||||||
Total borrowings | 39,079 | 12,990 | 52,069 | ||||||||
Total interest bearing liabilities | 89,183 | 17,727 | 106,910 | ||||||||
Change in tax equivalent net interest income | 366,457 | 15,276 | 381,733 | ||||||||
Less tax equivalent adjustment | 8,216 | (8,895 | ) | (679 | ) | ||||||
Change in net interest income | $ | 358,241 | $ | 24,171 | $ | 382,412 |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Deposit fees and service charges | $ | 6,333 | $ | 3,309 | $ | 20,319 | $ | 9,893 | |||||||
Accounts receivable management / factoring commissions and other related fees | 5,595 | 4,764 | 16,292 | 12,670 | |||||||||||
Bank owned life insurance | 3,733 | 1,320 | 11,591 | 4,342 | |||||||||||
Loan commissions and fees | 4,142 | 2,819 | 12,114 | 8,643 | |||||||||||
Investment management fees | 1,943 | 271 | 5,889 | 825 | |||||||||||
Net (loss) on sale of securities | (56 | ) | (21 | ) | (5,902 | ) | (274 | ) | |||||||
Gain on sale of fixed assets | — | 1 | 11,800 | 1 | |||||||||||
Other | 2,455 | 1,525 | 8,617 | 4,342 | |||||||||||
Total non-interest income | $ | 24,145 | $ | 13,988 | $ | 80,720 | $ | 40,442 |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Compensation and benefits | $ | 54,823 | $ | 31,727 | $ | 165,662 | $ | 93,893 | |||||||
Stock-based compensation plans | 3,115 | 1,969 | 9,304 | 5,602 | |||||||||||
Occupancy and office operations | 16,558 | 8,583 | 51,956 | 25,550 | |||||||||||
Information technology | 10,699 | 2,512 | 32,412 | 7,402 | |||||||||||
Amortization of intangible assets | 5,865 | 2,166 | 17,782 | 6,582 | |||||||||||
FDIC insurance and regulatory assessments | 6,043 | 2,310 | 16,885 | 6,232 | |||||||||||
Other real estate owned expense, net | 1,497 | 894 | 1,635 | 2,682 | |||||||||||
Merger-related expense | — | 4,109 | — | 9,002 | |||||||||||
Charge for asset write-downs, retention and severance | — | — | 13,132 | 603 | |||||||||||
Other non-interest expense | 13,173 | 8,347 | 39,680 | 25,076 | |||||||||||
Total non-interest expense | $ | 111,773 | $ | 62,617 | $ | 348,448 | $ | 182,624 |
For the three months ended | For the nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Gain) on sale, net | $ | (65 | ) | $ | (8 | ) | $ | (1,348 | ) | $ | (93 | ) | |||
Direct property write-downs | 190 | 444 | 552 | 1,737 | |||||||||||
Rental income | (35 | ) | (10 | ) | (114 | ) | (35 | ) | |||||||
Property tax | 617 | 437 | 851 | 763 | |||||||||||
Other expenses | 790 | 31 | 1,694 | 310 | |||||||||||
OREO expense, net | $ | 1,497 | $ | 894 | $ | 1,635 | $ | 2,682 |
September 30, 2018 | December 31, 2017 | ||||||||||||
Amount | % | Amount | % | ||||||||||
Commercial: | |||||||||||||
C&I: | |||||||||||||
Traditional C&I | $ | 2,037,556 | 9.9 | % | $ | 1,979,448 | 9.9 | % | |||||
Asset-based lending | 868,047 | 4.2 | 797,570 | 4.0 | |||||||||
Payroll finance | 235,734 | 1.1 | 268,609 | 1.3 | |||||||||
Warehouse lending | 864,063 | 4.2 | 723,335 | 3.6 | |||||||||
Factored receivables | 270,002 | 1.3 | 220,551 | 1.1 | |||||||||
Equipment financing | 1,161,435 | 5.7 | 679,541 | 3.4 | |||||||||
Public sector finance | 807,193 | 3.9 | 637,767 | 3.2 | |||||||||
Total C&I | 6,244,030 | 30.4 | 5,306,821 | 26.5 | |||||||||
Commercial mortgage: | |||||||||||||
Commercial real estate | 4,457,485 | 21.7 | 4,138,864 | 20.7 | |||||||||
Multi-family | 4,827,172 | 23.5 | 4,859,555 | 24.3 | |||||||||
ADC | 265,676 | 1.3 | 282,792 | 1.4 | |||||||||
Total commercial mortgage | 9,550,333 | 46.5 | 9,281,211 | 46.4 | |||||||||
Total commercial | 15,794,363 | 76.9 | 14,588,032 | 72.9 | |||||||||
Residential mortgage | 4,421,520 | 21.5 | 5,054,732 | 25.3 | |||||||||
Consumer | 317,331 | 1.5 | 366,219 | 1.8 | |||||||||
Total portfolio loans | 20,533,214 | 100.0 | % | 20,008,983 | 100.0 | % | |||||||
Allowance for loan losses | (91,365 | ) | (77,907 | ) | |||||||||
Total portfolio loans, net | $ | 20,441,849 | $ | 19,931,076 |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
Non-accrual loans: | |||||||
Traditional C&I | $ | 41,461 | $ | 37,642 | |||
Asset-based lending | 7,718 | — | |||||
Payroll finance | 229 | — | |||||
Equipment financing | 9,964 | 8,099 | |||||
Commercial real estate | 27,144 | 21,720 | |||||
Multi-family | 3,701 | 4,449 | |||||
ADC | — | 4,205 | |||||
Residential mortgage | 72,838 | 99,958 | |||||
Consumer | 14,821 | 10,284 | |||||
Total non-accrual loans | 177,876 | 186,357 | |||||
Accruing loans past due 90 days or more | 7,346 | 856 | |||||
Total NPLs | 185,222 | 187,213 | |||||
OREO | 22,735 | 27,095 | |||||
Total NPAs | $ | 207,957 | $ | 214,308 | |||
TDRs accruing and not included above | $ | 39,817 | $ | 13,564 | |||
Ratios: | |||||||
NPLs to total loans | 0.90 | % | 0.94 | % | |||
NPAs to total assets | 0.67 | 0.71 |
September 30, 2018 | December 31, 2017 | ||||||||||||||||||||
Allowance for loan losses | Loan balance | % of total loans | Allowance for loan losses | Loan balance | % of total loans | ||||||||||||||||
Traditional C&I | $ | 14,716 | $ | 2,037,556 | 9.9 | % | $ | 19,072 | $ | 1,979,448 | 9.9 | % | |||||||||
Asset-based lending | 6,828 | 868,047 | 4.2 | 6,625 | 797,570 | 4.0 | |||||||||||||||
Payroll finance | 2,183 | 235,734 | 1.1 | 1,565 | 268,609 | 1.3 | |||||||||||||||
Warehouse lending | 2,685 | 864,063 | 4.2 | 3,705 | 723,335 | 3.6 | |||||||||||||||
Factored receivables | 1,508 | 270,002 | 1.3 | 1,395 | 220,551 | 1.1 | |||||||||||||||
Equipment financing | 11,153 | 1,161,435 | 5.7 | 4,862 | 679,541 | 3.4 | |||||||||||||||
Public sector finance | 1,444 | 807,193 | 3.9 | 1,797 | 637,767 | 3.2 | |||||||||||||||
Commercial real estate | 31,468 | 4,457,485 | 21.7 | 24,945 | 4,138,864 | 20.7 | |||||||||||||||
Multi-family | 7,682 | 4,827,172 | 23.5 | 3,261 | 4,859,555 | 24.3 | |||||||||||||||
ADC | 1,876 | 265,676 | 1.3 | 1,680 | 282,792 | 1.4 | |||||||||||||||
Residential mortgage | 6,800 | 4,421,520 | 21.5 | 5,819 | 5,054,732 | 25.3 | |||||||||||||||
Consumer | 3,022 | 317,331 | 1.5 | 3,181 | 366,219 | 1.8 | |||||||||||||||
Total | $ | 91,365 | $ | 20,533,214 | 100.0 | % | $ | 77,907 | $ | 20,008,983 | 100.0 | % |
• | Total portfolio loans increased by $524,231, or 2.6%, to $20,533,214 at September 30, 2018, compared to $20,008,983 at December 31, 2017. The increase was due to the Advantage Funding acquisition and organic loan growth, substantially offset by repayments of residential mortgage loans. |
• | Commercial loans increased by $1,206,331, or 8.3%, to $15,794,363 at September 30, 2018, compared to $14,588,032 at December 31, 2017. The increase was due to the Advantage Funding Acquisition and organic loan growth. |
• | Residential mortgage loans declined by $633,212 to $4,421,520 at September 30, 2018 compared to $5,054,732 at December 31, 2017. The decline was mainly due to repayments. |
• | Total investment securities increased by $211,411, or 3.3%, to $6,685,972 at September 30, 2018, compared to $6,474,561 at December 31, 2017. The increase was mainly due to the purchase of corporate securities and tax exempt securities issued by New York State, New York City, other municipal entities in New York, and by other states. Investment securities were 21.4% of total assets at September 30, 2018, compared to 21.3% at December 31, 2017. |
• | Cash and cash equivalents increased by $54,078 to $533,984 at September 30, 2018, compared to $479,906 at December 31, 2017. |
• | Other changes in assets included the following: |
◦ | an increase in Federal Reserve Bank of New York (“FRBNY”) common stock holdings, which we acquired in the first quarter of 2018 as a result of the Astoria Merger. FRBNY common stock increased $73,726 at September 30, 2018 compared to December 31, 2017. |
◦ | an increase of $25,796 in loans held for sale, which mainly represents originations from our loan syndications team. |
• | Total deposits increased $917,853, or 4.5%, to $21,456,057 at September 30, 2018, compared to $20,538,204 at December 31, 2017. Our core retail, commercial and municipal transaction, money market, savings accounts and certificates of deposit accounts were $20,448,343, at September 30, 2018, which represented 95.3% of our total deposit balances. The increase in deposits was mainly driven by our commercial banking teams, as several of our recent commercial banking hires are focused on growing deposits, as well as growth in municipal deposits. Municipal deposits, excluding municipal certificates of deposits, increased $434,817 to $2,019,893 at September 30, 2018, compared to $1,585,076 at December 31, 2017. |
• | FHLB borrowings decreased $81,013, to $4,429,110 at September 30, 2018, compared to $4,510,123 at December 31, 2017. The decrease in FHLB borrowings was mainly the result of growth in core deposits. |
September 30, | |||||||
2018 | 2017 | ||||||
The following table shows the reconciliation of stockholders’ equity to tangible common equity and the tangible common equity ratio 1: | |||||||
Total assets | $ | 31,261,265 | $ | 16,780,097 | |||
Goodwill and other intangibles | (1,745,181 | ) | (756,290 | ) | |||
Tangible assets | 29,516,084 | 16,023,807 | |||||
Stockholders’ equity | 4,438,303 | 1,971,480 | |||||
Preferred stock | (138,627 | ) | — | ||||
Goodwill and other intangibles | (1,745,181 | ) | (756,290 | ) | |||
Tangible common stockholders’ equity | 2,554,495 | 1,215,190 | |||||
Common stock outstanding at period end | 225,446,089 | 135,807,544 | |||||
Common stockholders’ equity as a % of total assets | 13.75 | % | 11.75 | % | |||
Book value per common share | $ | 19.07 | $ | 14.52 | |||
Tangible common equity as a % of tangible assets | 8.65 | % | 7.58 | % | |||
Tangible book value per common share | $ | 11.33 | $ | 8.95 | |||
_______________ | |||||||
See legend beginning on page 73. |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
The following table shows the reconciliation of reported net income and reported EPS (GAAP) to adjusted net income available to common stockholders (non-GAAP) and adjusted diluted EPS (non-GAAP)2: | |||||||||||||||
Income before income tax expense | $ | 146,821 | $ | 66,444 | $ | 421,305 | $ | 185,939 | |||||||
Income tax expense | 27,171 | 21,592 | 88,542 | 59,620 | |||||||||||
Net income (GAAP) | 119,650 | 44,852 | 332,763 | 126,319 | |||||||||||
Adjustments: | |||||||||||||||
Net loss on sale of securities | 56 | 21 | 5,902 | 274 | |||||||||||
Net (gain) on sale of fixed assets | — | — | (11,800 | ) | (1 | ) | |||||||||
Merger-related expense | — | 4,109 | — | 9,002 | |||||||||||
Charge for asset write-downs, retention and severance | — | — | 13,132 | 603 | |||||||||||
Amortization of non-compete agreements and acquired customer lists | 295 | 333 | 883 | 1,080 | |||||||||||
Total pre-tax adjustments | 351 | 4,463 | 8,117 | 10,958 | |||||||||||
Adjusted pre-tax income | 147,172 | 70,907 | 429,422 | 196,897 | |||||||||||
Adjusted income tax expense | (30,906 | ) | (23,042 | ) | (90,179 | ) | (63,181 | ) | |||||||
Adjusted net income (non-GAAP) | 116,266 | 47,865 | 339,243 | 133,716 | |||||||||||
Preferred stock dividend | 1,993 | — | 5,988 | — | |||||||||||
Adjusted net income available to common stockholders (non-GAAP) | $ | 114,273 | $ | 47,865 | $ | 333,255 | $ | 133,716 | |||||||
Weighted average diluted shares | 225,622,895 | 135,950,160 | 225,504,463 | 135,895,513 | |||||||||||
Diluted EPS as reported (GAAP) | $ | 0.52 | $ | 0.33 | $ | 1.45 | $ | 0.93 | |||||||
Adjusted diluted EPS (non-GAAP) | 0.51 | 0.35 | 1.48 | 0.98 | |||||||||||
_______________ | |||||||||||||||
See legend beginning on page 73. |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio 3: | |||||||||||||||
Net interest income | $ | 243,949 | $ | 120,073 | $ | 724,533 | $ | 342,121 | |||||||
Non-interest income | 24,145 | 13,988 | 80,720 | 40,442 | |||||||||||
Total net revenue | 268,094 | 134,061 | 805,253 | 382,563 | |||||||||||
Tax equivalent adjustment on securities | 4,052 | 4,599 | 12,217 | 12,896 | |||||||||||
Net (gain) on sale of fixed assets | — | — | (11,800 | ) | (1 | ) | |||||||||
Net loss on sale of securities | 56 | 21 | 5,902 | 274 | |||||||||||
Adjusted total revenue (non-GAAP) | 272,202 | 138,681 | 811,572 | 395,732 | |||||||||||
Non-interest expense | 111,773 | 62,617 | 348,448 | 182,624 | |||||||||||
Merger-related expense | — | (4,109 | ) | — | (9,002 | ) | |||||||||
Charge for asset write-downs, retention and severance | — | — | (13,132 | ) | (603 | ) | |||||||||
Amortization of intangible assets | (5,865 | ) | (2,166 | ) | (17,782 | ) | (6,582 | ) | |||||||
Adjusted non-interest expense (non-GAAP) | $ | 105,908 | $ | 56,342 | $ | 317,534 | $ | 166,437 | |||||||
Reported operating efficiency ratio | 41.7 | % | 46.7 | % | 43.3 | % | 47.7 | % | |||||||
Adjusted operating efficiency ratio (non-GAAP) | 38.9 | 40.6 | 39.1 | 42.1 | |||||||||||
_______________ | |||||||||||||||
See legend beginning on page 73. |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
The following table shows the reconciliation of reported return on average tangible assets and adjusted return on average tangible assets 4: | |||||||||||||||
Average assets | $ | 31,036,026 | $ | 15,661,514 | $ | 30,686,808 | $ | 14,802,911 | |||||||
Average goodwill and other intangibles | (1,752,933 | ) | (757,498 | ) | (1,747,141 | ) | (759,790 | ) | |||||||
Average tangible assets | 29,283,093 | 14,904,016 | 28,939,667 | 14,043,120 | |||||||||||
Net income available to common stockholders | 117,657 | 44,852 | 326,775 | 126,319 | |||||||||||
Net income, if annualized | 466,791 | 177,945 | 436,897 | 168,888 | |||||||||||
Reported return on average tangible assets | 1.59 | % | 1.19 | % | 1.51 | % | 1.20 | % | |||||||
Adjusted net income (non-GAAP) | $ | 114,273 | $ | 47,865 | $ | 333,255 | $ | 133,716 | |||||||
Annualized adjusted net income | 453,366 | 189,899 | 445,561 | 178,778 | |||||||||||
Adjusted return on average tangible assets (non-GAAP) | 1.55 | % | 1.27 | % | 1.54 | % | 1.27 | % | |||||||
_______________ | |||||||||||||||
See legend beginning on page 73. |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
The following table shows the reconciliation of reported return on average tangible common stockholders’ equity and adjusted return on average tangible common stockholders’ equity 5: | |||||||||||||||
Average stockholders’ equity | $ | 4,397,823 | $ | 1,955,252 | $ | 4,316,455 | $ | 1,913,072 | |||||||
Average preferred stock | (138,692 | ) | — | (139,054 | ) | — | |||||||||
Average goodwill and other intangibles | (1,752,933 | ) | (757,498 | ) | (1,747,141 | ) | (759,790 | ) | |||||||
Average tangible common stockholders’ equity | 2,506,198 | 1,197,754 | 2,430,260 | 1,153,282 | |||||||||||
Net income available to common stockholders | 117,657 | 44,852 | 326,775 | 126,319 | |||||||||||
Net income, if annualized | 466,791 | 177,945 | 436,897 | 168,888 | |||||||||||
Reported return on average tangible common stockholders’ equity | 18.63 | % | 14.86 | % | 17.98 | % | 14.64 | % | |||||||
Adjusted net income (non-GAAP) | $ | 114,273 | $ | 47,865 | $ | 333,255 | $ | 133,716 | |||||||
Annualized adjusted net income | 453,366 | 189,899 | 445,561 | 178,778 | |||||||||||
Adjusted return on average tangible common stockholders’ equity (non-GAAP) | 18.09 | % | 15.85 | % | 18.33 | % | 15.50 | % | |||||||
_______________________ | |||||||||||||||
See legend beginning below. |
Interest rates | Estimated | Estimated change in EVE | Estimated | Estimated change in NII | ||||||||||||||||||
(basis points) | EVE | Amount | Percent | NII | Amount | Percent | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
+300 | $ | 4,162,254 | $ | (782,358 | ) | (15.8 | )% | $ | 1,010,294 | $ | 32,729 | 3.3 | % | |||||||||
+200 | 4,481,181 | (463,431 | ) | (9.4 | ) | 1,004,688 | 27,123 | 2.8 | ||||||||||||||
+100 | 4,769,337 | (175,275 | ) | (3.5 | ) | 994,150 | 16,585 | 1.7 | ||||||||||||||
0 | 4,944,612 | — | — | 977,565 | — | — | ||||||||||||||||
-100 | 4,964,471 | 19,859 | 0.4 | 948,055 | (29,510 | ) | (3.0 | ) | ||||||||||||||
-200 | 4,777,086 | (167,526 | ) | (3.4 | ) | 897,297 | (80,268 | ) | (8.2 | ) |
Exhibit Number | Description | |
3.1 | ||
3.2 | ||
3.3 | ||
4.1 | ||
4.2 | ||
4.3 | ||
4.4 | ||
4.5 | ||
4.6 | ||
4.7 | ||
4.8 | ||
4.9 | ||
31.1 | ||
31.2 | ||
32.0 | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
Date: | November 2, 2018 | By: | /s/ Jack Kopnisky | |
Jack Kopnisky | ||||
President, Chief Executive Officer and Director | ||||
(Principal Executive Officer) | ||||
Date: | November 2, 2018 | By: | /s/ Luis Massiani | |
Luis Massiani | ||||
Senior Executive Vice President and Chief Financial Officer | ||||
(Principal Financial Officer and Principal Accounting Officer) | ||||
(a) | “Affiliate” shall have the meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on the date of filing of this Certificate of Incorporation. |
(b) | “Beneficial ownership” shall be determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934 (or any successor rule or statutory provision), or, if said Rule 13d-3 shall be rescinded and there shall be no successor rule or statutory provision thereto, pursuant to said Rule 13d-3 as in effect on the date of filing of this Certificate of Incorporation; provided, however, that a person shall, in any event, also be deemed the “beneficial owner” of any Common Stock: |
(1) | which such person or any of its Affiliates beneficially owns, directly or indirectly; or |
(2) | which such person or any of its Affiliates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding (but shall not be deemed to be the beneficial owner of any voting shares solely by reason of an agreement, contract, or other arrangement with this Corporation to effect any transaction which is described in any one or more clauses of Section A of Article EIGHTH) or upon the exercise of conversion rights, exchange rights, warrants, or options or otherwise, or (ii) sole or shared voting or investment power with respect thereto pursuant to any agreement, arrangement, understanding, relationship or otherwise (but shall not be deemed to be the beneficial owner of any voting shares solely by reason of a revocable proxy granted for a particular meeting of stockholders, pursuant to a public solicitation of proxies for such meeting, with respect to shares of which neither such person nor any such Affiliate is otherwise deemed the beneficial owner); or |
(3) | which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its Affiliates acts as a partnership, limited partnership, syndicate or other group pursuant to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock of this Corporation; |
(c) | A “person” shall mean any individual, firm, corporation, or other entity. |
(a) | The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by the holders of Common Stock in such Business Combination shall at least be equal to the higher of the following: |
(1) | (if applicable) the Highest Per Share Price (as hereinafter defined), including any brokerage commissions, transfer taxes and soliciting dealers’ fees, paid by the Interested Stockholder or any of its Affiliates for any shares of Common Stock acquired by it (i) within the two-year period immediately prior to the first public announcement of the proposal of the Business Combination (the “Announcement Date”), or (ii) in the transaction in which it became an Interested Stockholder, whichever is higher. |
(2) | the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (such latter date is referred to in this Article EIGHTH as the “Determination Date”), whichever is higher. |
(b) | The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of shares of any class of outstanding Voting Stock other than Common Stock shall be at least equal to the highest of the following (it being intended that the requirements of this subparagraph (b) shall be required to be met with respect to every such class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock): |
(1) | (if applicable) the Highest Per Share Price (as hereinafter defined), including any brokerage commissions, transfer taxes and soliciting dealers’ fees, paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it (i) within the two-year period immediately prior to the Announcement Date, or (ii) in the transaction in which it became an Interested Stockholder, whichever is higher; |
(2) | (if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation; and |
(3) | the Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher. |
(c) | The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Stockholder has paid for shares of such class of Voting Stock. If the Interested Stockholder has previously paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration to be received per share by holders of shares of such class of Voting Stock shall be either cash or the form used to acquire the largest number of shares of such class of Voting Stock previously acquired by the Interested Stockholder. The price determined in accordance with subparagraph B.2 of this Article EIGHTH shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event. |
(d) | After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (1) except as approved by a majority of the Disinterested Directors, there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on any outstanding stock having preference over the Common Stock as to dividends or liquidation; (2) there shall have been (i) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Disinterested Directors, and (ii) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure to so increase such annual rate is approved by a majority of the Disinterested Directors; and (3) neither such Interested Stockholder or any of its Affiliates shall have become the beneficial owner of any additional shares of Voting Stock except as part of the transaction which results in such Interested Stockholder becoming an Interested Stockholder. |
(e) | After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise. |
(f) | A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to stockholders of the Corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions). |
Name | Mailing Address | |
Edward A. Quint | 5335 Wisconsin Avenue, N.W. | |
Suite 400 | ||
Washington, D.C. 20015 |
By: | /s/ Jack L. Kopnisky | ||
Jack Kopnisky | |||
Its: | President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Sterling Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 2, 2018 | By: | /s/ Jack Kopnisky |
Jack Kopnisky | |||
President, Chief Executive Officer and Director | |||
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Sterling Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 2, 2018 | By: | /s/ Luis Massiani | |
Luis Massiani | ||||
Senior Executive Vice President | ||||
Chief Financial Officer | ||||
Principal Accounting Officer | ||||
(Principal Financial Officer) |
(1) | the report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | November 2, 2018 | By: | /s/ Jack Kopnisky | |||||
Jack Kopnisky | ||||||||
President, Chief Executive Officer and Director | ||||||||
(Principal Executive Officer) |
Date: | November 2, 2018 | By: | /s/ Luis Massiani | |||||
Luis Massiani | ||||||||
Senior Executive Vice President | ||||||||
Chief Financial Officer | ||||||||
Principal Accounting Officer | ||||||||
(Principal Financial Officer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Nov. 01, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | STERLING BANCORP | |
Entity Central Index Key | 0001070154 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Smaller Reporting Company | false | |
Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 224,427,793 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Securities held to maturity, fair value | $ 2,746,080 | $ 2,863,909 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 135,000 | 135,000 |
Preferred stock, shares outstanding (in shares) | 135,000 | 135,000 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 310,000,000 | 310,000,000 |
Common stock, shares issued (in shares) | 229,872,925 | 229,872,925 |
Common stock, shares outstanding (in shares) | 225,446,089 | 224,782,694 |
Treasury stock, shares (in shares) | 4,426,836 | 5,090,231 |
Accumulated other comprehensive loss, tax benefit | $ 45,332 | $ 17,083 |
Consolidated Income Statements (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Interest and dividend income: | ||||
Loans and loan fees | $ 257,211 | $ 119,898 | $ 746,079 | $ 336,308 |
Securities taxable | 29,765 | 15,141 | 85,856 | 40,536 |
Securities non-taxable | 15,244 | 8,542 | 45,959 | 23,951 |
Other earning assets | 6,805 | 2,111 | 17,382 | 5,160 |
Total interest and dividend income | 309,025 | 145,692 | 895,276 | 405,955 |
Interest expense: | ||||
Deposits | 35,974 | 13,392 | 88,645 | 33,805 |
Borrowings | 29,102 | 12,227 | 82,098 | 30,029 |
Total interest expense | 65,076 | 25,619 | 170,743 | 63,834 |
Net interest income | 243,949 | 120,073 | 724,533 | 342,121 |
Provisions for loan losses | 9,500 | 5,000 | 35,500 | 14,000 |
Net interest income after provision for loan losses | 234,449 | 115,073 | 689,033 | 328,121 |
Non-interest income: | ||||
Deposit fees and service charges | 6,333 | 3,309 | 20,319 | 9,893 |
Accounts receivable management / factoring commissions and other fees | 5,595 | 4,764 | 16,292 | 12,670 |
Bank owned life insurance | 3,733 | 1,320 | 11,591 | 4,342 |
Loan commissions and fees | 4,142 | 2,819 | 12,114 | 8,643 |
Investment management fees | 1,943 | 271 | 5,889 | 825 |
Net loss on sale of securities | (56) | (21) | (5,902) | (274) |
Gain on sale of fixed assets | 0 | 1 | 11,800 | 1 |
Other | 2,455 | 1,525 | 8,617 | 4,342 |
Total non-interest income | 24,145 | 13,988 | 80,720 | 40,442 |
Non-interest expense: | ||||
Compensation and benefits | 54,823 | 31,727 | 165,662 | 93,893 |
Stock-based compensation plans | 3,115 | 1,969 | 9,304 | 5,602 |
Occupancy and office operations | 16,558 | 8,583 | 51,956 | 25,550 |
Information technology | 10,699 | 2,512 | 32,412 | 7,402 |
Amortization of intangible assets | 5,865 | 2,166 | 17,782 | 6,582 |
FDIC insurance and regulatory assessments | 6,043 | 2,310 | 16,885 | 6,232 |
Other real estate owned expense, net | 1,497 | 894 | 1,635 | 2,682 |
Merger-related expense | 0 | 4,109 | 0 | 9,002 |
Charge for asset write-downs, retention and severance | 0 | 0 | 13,132 | 603 |
Other | 13,173 | 8,347 | 39,680 | 25,076 |
Total non-interest expense | 111,773 | 62,617 | 348,448 | 182,624 |
Income before income tax expense | 146,821 | 66,444 | 421,305 | 185,939 |
Income tax expense | 27,171 | 21,592 | 88,542 | 59,620 |
Net income | 119,650 | 44,852 | 332,763 | 126,319 |
Preferred stock dividend | 1,993 | 0 | 5,988 | 0 |
Net income available to common stockholders | $ 117,657 | $ 44,852 | $ 326,775 | $ 126,319 |
Weighted average common shares: | ||||
Basic (in shares) | 225,088,511 | 135,346,791 | 224,969,121 | 135,276,634 |
Diluted (in shares) | 225,622,895 | 135,950,160 | 225,504,463 | 135,895,513 |
Earnings per common share: | ||||
Basic (USD per share) | $ 0.52 | $ 0.33 | $ 1.45 | $ 0.93 |
Diluted (USD per share) | $ 0.52 | $ 0.33 | $ 1.45 | $ 0.93 |
Consolidated Statement of Changes In Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | |||||
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Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
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Statement of Stockholders' Equity [Abstract] | ||||||
Cash dividends paid, common (usd per share) | $ 0.07 | $ 0.07 | $ 0.07 | $ 0.07 | $ 0.07 | $ 0.07 |
Cash dividends paid, preferred (usd per share) | $ 16.25 | $ 16.25 | $ 16.25 |
Basis of Financial Statement Presentation |
9 Months Ended |
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Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation (a) Nature of Operations Sterling Bancorp (the “Company”) is a Delaware corporation, a bank holding company and a financial holding company headquartered in Montebello, New York that owns all of the outstanding shares of common stock of Sterling National Bank (the “Bank”), its principal subsidiary. The Bank is a full-service regional bank specializing in the delivery of services and solutions to business owners, their families and consumers within the communities it serves through teams of dedicated and experienced relationship managers. (b) Basis of Presentation The consolidated financial statements in this Quarterly Report on Form 10-Q include the accounts of the Company and all other entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and financial reporting policies the Company follows conform, in all material respects, to accounting principles generally accepted in the United States (“GAAP”) and to general practices within the banking industry, which include regulatory reporting instructions. The consolidated financial statements in this Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm, but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations. All such adjustments were of a normal and recurring nature. The consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (the “SEC”). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2017, included in our Annual Report on Form 10-K, as filed with the SEC on March 1, 2018 (the “2017 Form 10-K”). Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period. Certain items in prior financial statements have been reclassified to conform to the current presentation. These reclassifications had no impact on previously reported net income. (c) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, expense and contingencies at the date of the financial statements. Actual results could differ significantly from these estimates, particularly the allowance for loan losses and the status of contingencies, and are subject to change. (d) Adoption of New Accounting Standards The Company adopted the following new accounting standards effective January 1, 2018: Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (the “New Revenue Standard”), (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revises when it is appropriate to recognize a gain (loss) from the transfer of non-financial assets, such as other real estate owned (“OREO”). The Company adopted the New Revenue Standard using the modified retrospective method applied to all contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under the New Revenue Standard, while prior period amounts continue to be reported in accordance with legacy GAAP. The adoption of the New Revenue Standard did not result in a significant change to the accounting for any in-scope revenue streams. As such, no cumulative effect adjustment was recorded. The majority of the Company’s revenues come from interest income and other sources, including loans and securities, that are outside the scope of the New Revenue Standard. The Company’s services that fall within the scope of the New Revenue Standard are primarily included within non-interest income in the consolidated income statements and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of the New Revenue Standard include deposit fees and services charges, accounts receivable management / factoring commissions and other fees, investment management fees and the sale of OREO, which is included within OREO, net expense. See Note 13. “Non-Interest Income and Other Non-Interest Expense” for further discussion on the Company’s accounting policies for revenue sources within the scope of the New Revenue Standard. Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition of Financial Assets and Financial Liabilities (the “New Fair Value Standard”), makes targeted amendments to the guidance for recognition, measurement, presentation and disclosure of financial instruments. The New Fair Value Standard requires equity investments to be measured at fair value with changes in fair value recognized in net income; however, the Company owned no assets subject to this portion of the New Fair Value Standard. The New Fair Value Standard also emphasizes the existing requirement to use exit prices to measure fair value for disclosure purposes and clarifies that entities should not make use of a practicability exception in determining the fair value of loans. As a result of the adoption of the New Fair Value Standard, the Company modified its calculation used to estimate the fair value of portfolio loans. See Note 17. “Fair Value Measurements” for further discussion of the Company’s methodology. The New Fair Value Standard had no impact to the consolidated balance sheets or income statements. ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (the “New Retirement Standard”), requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. The other components of net benefit cost, including interest cost, expected return on plan assets, amortization of prior service cost/credit and actuarial gain/loss, and settlement and curtailment effects, are presented as a component of other non-interest expense. The adoption of this standard resulted in the reclassification of $328 from compensation and benefits to other non-interest expense for the nine months ended September 30, 2017. ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (the “AOCI Standard”), allows a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for the stranded tax effects caused by the revaluation of estimated deferred taxes resulting from the enactment of the Tax Cuts and Jobs Act of 2017. As a result of the adoption of the AOCI Standard the Company reduced AOCI and increased retained earnings by $5,129 in the nine months ended September 30, 2018 related to unrealized losses on securities available for sale, securities transferred to held to maturity and a net actuarial loss on defined benefit retirement plans. As a result of the adoption of the AOCI standard, the Company will release such income tax effects only when the entire portfolio to which the underlying items are liquidated, sold or extinguished. The adoption of the AOCI Standard did not impact total stockholders’ equity or the consolidated income statements for any period. |
Acquisitions |
9 Months Ended |
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Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Advantage Funding Management Co., Inc. (“Advantage Funding”) On April 2, 2018, the Bank acquired 100% of the outstanding common stock of Advantage Funding (the “Advantage Funding Acquisition”). The total consideration in the transaction was $502,052 and was paid in cash on the closing date. Advantage Funding is a provider of commercial vehicle and transportation financing services based in Lake Success, NY. Advantage Funding had total outstanding loans and leases of $457,638 on the acquisition date consisting mainly of fixed rate assets. The fair value of these loans was $442,844. The Bank paid a premium on the gross loans and leases receivable of 4.5% or $20,300. In the nine months ended September 30, 2018, we recorded a $4,396 restructuring charge consisting mainly of professional fees, retention and severance compensation, systems integration expense and facilities consolidation. This charge is included in charge for asset write-downs, retention and severance on the consolidated income statement. The Advantage Funding Acquisition is consistent with our strategy of growing commercial loans and increasing the proportion of commercial loans in our loan portfolio. The operations of the business will be fully integrated into our equipment finance business line. Astoria Merger On October 2, 2017, Astoria Financial Corporation (“Astoria”) merged with and into the Company (the “Astoria Merger”). Under the terms of the Astoria Merger agreement, Astoria shareholders received 0.875 shares of the Company’s common stock for each share of Astoria common stock, which resulted in the issuance of 88,829,776 shares of the Company’s common stock. Based on the Company’s closing stock price per share of $24.65 on September 29, 2017, the aggregate consideration was $2,189,687, which included cash in lieu of fractional shares. Consistent with the Company’s strategy, the primary reason for the Astoria Merger was the expansion of the Company’s geographic footprint in the Greater New York metropolitan region, including Long Island. The assets acquired and liabilities assumed were accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their fair values as of October 2, 2017 based on management’s best estimate using the information available as of the Astoria Merger date. The Astoria Merger resulted in the recognition of loans of $9,209,398, deposits of $9,044,061 and goodwill of $883,291. Accounting guidance identifies the measurement period for the Astoria Merger as the period that is required to identify and measure the fair value of the identifiable assets acquired and the liabilities assumed. The measurement period ends when the Company has all of the information that the Company arranged to obtain and that is known to be obtainable. The measurement period ended October 2, 2018. During the third quarter of 2018 the Company completed the final tax returns related to Astoria’s business and operations through October 1, 2017. After completion of these tax returns, the Company reduced income tax balances and goodwill by $6,214, which finalized all purchase accounting adjustments for the Astoria Merger. |
Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities A summary of amortized cost and estimated fair value of securities as of September 30, 2018 and December 31, 2017 is presented below. The term “MBS” refers to mortgage-backed securities and the term “CMOs” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 17. “Fair Value Measurements”.
The amortized cost and estimated fair value of securities at September 30, 2018 are presented below by contractual maturity. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential MBS are shown separately since they are not due at a single maturity date.
Sales of securities for the periods indicated below were as follows:
(1) Gross realized gains and losses includes securities called prior to maturity. (2) In the nine months ended September 30, 2018, the Company sold a security that was held to maturity due to a decline in the credit rating and other evidence of deterioration of the issuer’s creditworthiness. At September 30, 2018 and December 31, 2017, there were no holdings of securities of any one issuer in an amount greater than 10% of stockholders’ equity, other than the U.S. federal government and its agencies. The following table summarizes securities available for sale with unrealized losses, segregated by the length of time in a continuous unrealized loss position for the periods presented below:
The following table summarizes securities held to maturity with unrecognized losses, segregated by the length of time in a continuous unrecognized loss position for the periods presented below:
At September 30, 2018, a total of 372 available for sale securities were in a continuous unrealized loss position for less than 12 months and 237 available for sale securities were in a continuous unrealized loss position for 12 months or longer. At September 30, 2018, a total of 575 held to maturity securities were in a continuous unrealized loss position for less than 12 months and 206 held to maturity securities were in a continuous unrealized loss position for 12 months or longer. Declines in the fair value of held to maturity and available for sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The amount of the impairment related to other factors is recognized in other comprehensive income. In estimating other than temporary impairment (“OTTI”) losses, management considers, among other things: (i) the length of time and the extent to which the fair value has been less than cost; (ii) the financial condition and near-term prospects of the issuer; and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in cost. Management has the ability and intent to hold the securities classified as held to maturity in the table above until they mature, at which time the Company anticipates it will receive full value for the securities. Furthermore, as of September 30, 2018, management did not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons related to credit quality. As of September 30, 2018, management believes the impairments detailed in the table above are temporary. Securities pledged for borrowings at the FHLB and other institutions, and securities pledged for municipal deposits and other purposes, were as follows for the periods presented below:
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Portfolio Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio Loans | Portfolio Loans The composition of the Company’s loan portfolio, excluding loans held for sale, was the following for the periods presented below:
Total portfolio loans include net deferred loan origination fees of $5,892 and $4,813 at September 30, 2018 and December 31, 2017, respectively. At September 30, 2018 and December 31, 2017, the Company pledged residential mortgage and commercial real estate loans of $8,548,416 and $9,123,601, respectively, to the FHLB as collateral for certain borrowing arrangements. See Note 8. “Borrowings”. The following tables set forth the amounts and status of the Company’s loans, troubled debt restructurings (“TDRs”) and non-performing loans at September 30, 2018 and December 31, 2017:
The following table provides additional analysis of the Company’s non-accrual loans at September 30, 2018 and December 31, 2017:
There were no non-accrual ADC, warehouse lending, factored receivables or public sector finance loans at September 30, 2018. There were no non-accrual asset-based lending, payroll finance, warehouse lending, factored receivables or public sector finance loans at December 31, 2017. When the ultimate collectibility of the total principal of an impaired loan is in doubt and the loan is on non-accrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectibility of the total principal of an impaired loan is not in doubt and the loan is on non-accrual status, contractual interest is credited to interest income when received, under the cash basis method. At September 30, 2018 and December 31, 2017, the recorded investment of residential mortgage loans that were in the process of foreclosure was $52,087 and $76,712, respectively, which is included in non-accrual residential mortgage loans above. The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at September 30, 2018:
(1) The Company acquired loans for which there was, at acquisition, both evidence of deterioration of credit quality since origination and the probability, at acquisition, that all contractually required payments would not be collected. These loans are classified as purchased credit impaired loans (“PCI loans”). The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at December 31, 2017:
Management considers a loan to be impaired when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Evaluation of impairment is generally treated the same across all classes of loans on a loan-by-loan basis. Generally loans of $750 or less are evaluated for impairment on a homogeneous pool basis. When management identifies a loan as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole remaining source of repayment of the loan is the operation or liquidation of the collateral. In these cases, management uses the current fair value of the collateral, less selling costs when foreclosure or liquidation is probable, instead of discounted cash flows. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is generally recognized through a charge-off to the allowance for loan losses. The following table presents the changes in the balance of the accretable yield discount for PCI loans for the three and nine months ended September 30, 2018 and 2017:
Income is not recognized on PCI loans unless the Company can reasonably estimate the cash flows that are expected to be collected over the life of the loan. The balance of PCI loans that were treated under the cost recovery method was $5,363 and $7,992 at September 30, 2018 and December 31, 2017, respectively. The following table presents loans individually evaluated for impairment, excluding PCI loans, by segment of loans at September 30, 2018 and December 31, 2017:
At September 30, 2018 and December 31, 2017, there were no payroll finance, warehouse lending, factored receivables or public sector finance loans that were individually evaluated for impairment. The Company’s policy generally requires a charge-off of the difference between the present value of the cash flows or the net collateral value of the collateral securing the loan and the Company’s recorded investment. As a result, there were no impaired loans with an allowance recorded at September 30, 2018 or December 31, 2017. The following table presents the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the three months ended September 30, 2018 and September 30, 2017:
For the three months ended September 30, 2018 and 2017, there were no payroll finance, warehouse lending, factored receivables or public sector finance loans that were impaired, and there was no cash-basis interest income recognized. The following table presents the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the nine months ended September 30, 2018 and 2017:
For the nine months ended September 30, 2018 and 2017, there were no payroll finance, warehouse lending, factored receivables or public sector finance loans that were impaired, and there was no cash-basis interest income recognized. Troubled Debt Restructuring (“TDRs”) The following tables set forth the amounts and past due status of the Company’s TDRs at September 30, 2018 and December 31, 2017:
There were no payroll finance, warehouse lending, factored receivables, public sector finance or multi-family loans that were TDRs for either period presented above and there were no asset-based lending loans that were TDRs at December 31, 2017. The Company did not have any outstanding commitments to lend additional amounts to customers with loans classified as TDRs as of September 30, 2018 or December 31, 2017. There were 20 loans modified as a TDR in the nine months ended September 30, 2018. The following table presents loans by segment modified as TDRs that occurred during the first nine months of 2018 and 2017:
There were no payroll finance, warehouse lending, factored receivables, public sector finance, or multi-family loans modified as TDRs during the first nine months of 2018 or 2017. During the nine months ended September 30, 2018 or 2017, except for certain TDRs that are included in non-accrual loans, there were no TDRs that experienced a payment default within the twelve months following the modification. A payment default is defined as missing three consecutive monthly payments or being over 90 days past due on a scheduled payment. The asset-based lending loan that was designated as a TDR in 2018 is a borrowing base facility in which the advance rate is determined by the estimated value of loans to third parties used to finance the acquisition of taxi medallions, which are collateral for the facility. This loan has never been delinquent and has continued to perform according to its modified terms at the time of restructuring. TDRs during the periods presented above did not significantly impact the determination of the allowance for loan losses. |
Allowance for Loan Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses | Allowance for Loan Losses Activity in the allowance for loan losses for the three months ended September 30, 2018 and 2017 is summarized below:
Activity in the allowance for loan losses for the nine months ended September 30, 2018 and 2017 is summarized below:
Credit Quality Indicators As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators, including trends related to (i) the weighted-average risk grade of commercial loans; (ii) the level of classified commercial loans; (iii) the delinquency status of residential mortgage and consumer loans, including home equity lines of credit (“HELOC”) and other consumer loans; (iv) net charge-offs; (v) non-performing loans (see details above); and (vi) the general economic conditions in the greater New York metropolitan region. The Company analyzes loans individually by classifying the loans by credit risk, except residential mortgage loans, HELOC and other consumer loans, which are evaluated on a homogeneous pool basis unless the loan balance is greater than $750. This analysis is performed at least quarterly on all graded 7-Special Mention and lower loans. The Company uses the following definitions of risk ratings: 1 and 2 - These grades include loans that are secured by cash, marketable securities or cash surrender value of life insurance policies. 3 - This grade includes loans to borrowers with strong earnings and cash flow that have the ability to service debt. The borrower’s assets and liabilities are generally well-matched and are above average quality. The borrower has ready access to multiple sources of funding, including alternatives such as term loans, private equity placements or trade credit. 4 - This grade includes loans to borrowers with above average cash flow, adequate earnings and debt service coverage ratios. The borrower generates discretionary cash flow, assets and liabilities are reasonably matched, and the borrower has access to other sources of debt funding or additional trade credit at market rates. 5 - This grade includes loans to borrowers with adequate earnings and cash flow and reasonable debt service coverage ratios. Overall leverage is acceptable and there is average reliance upon trade credit. Management has a reasonable amount of experience and depth, and owners are willing to invest available outside capital, as necessary. 6 - This grade includes loans to borrowers where there is evidence of some strain, earnings are inconsistent and volatile, and the borrowers’ outlook is uncertain. Generally, such borrowers have higher leverage than those with a better risk rating. These borrowers typically have limited access to alternative sources of bank debt and may be dependent upon debt funding for working capital support. 7 - Special Mention (OCC definition) - Other Assets Especially Mentioned are loans that have potential weaknesses which may, if not reversed or corrected, weaken the asset or inadequately protect the Bank’s credit position at some future date. Such assets constitute an undue and unwarranted credit risk but not to the point of justifying a classification of “Substandard.” The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances surrounding a specific asset. 8 - Substandard (OCC definition) - These loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some losses if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified as substandard. 9 - Doubtful (OCC definition) - These loans have all the weakness inherent in one classified as “Substandard” with the added characteristics that the weakness makes collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but, because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger, acquisition, liquidating procedures, capital injection, perfecting liens or additional collateral and refinancing plans. 10 - Loss (OCC definition) - These loans are charged-off because they are determined to be uncollectible and unbankable assets. This classification does not indicate that the asset has no absolute recovery or salvage value, but rather it is not practical or desirable to defer writing-off this asset even though partial recovery may be effected in the future. Losses should be taken in the period in which they are determined to be uncollectible. Loans that are risk-rated 1 through 6, as defined above, are considered to be pass-rated loans. As of September 30, 2018 and December 31, 2017, the risk category of gross loans by segment was as follows:
There were no criticized or classified warehouse lending or public sector finance loans for the periods presented. There were no loans rated “loss” at September 30, 2018 or December 31, 2017. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The balance of goodwill and other intangible assets for the periods presented were as follows:
The increase in goodwill at September 30, 2018 compared to December 31, 2017 was due to the Advantage Funding Acquisition. See Note 2. “Acquisitions” for additional information. The decrease in other intangible assets at September 30, 2018 compared to December 31, 2017 was due to amortization of intangibles. The estimated aggregate future amortization expense for intangible assets remaining as of September 30, 2018 was as follows:
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Deposits |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Deposits Deposit balances at September 30, 2018 and December 31, 2017 were as follows:
Total municipal deposits were $2,019,893 and $1,585,076 at September 30, 2018 and December 31, 2017, respectively. See Note 3. “Securities” for the aggregate amount of securities that were pledged as collateral for municipal deposits and other purposes. Brokered deposits at September 30, 2018 and December 31, 2017 were as follows:
1 Section 29 of the Federal Deposit Insurance Act was amended to except a capped amount of reciprocal deposits from treatment as brokered deposits for certain insured depository institutions, including the Bank. As a result, the Bank no longer reports its reciprocal deposits as brokered deposits. 2 CDARs are deposits generated through the certificate of deposit account registry service. 3 ICS are deposits generated through the insured cash sweep program. |
Borrowings |
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Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings The Company’s borrowings and weighted average interest rates were as follows for the periods presented:
FHLB borrowings. As a member of the FHLB, the Bank may borrow up to a discounted percentage of the amount of eligible mortgages and securities that have been pledged as collateral under a blanket security agreement. As of September 30, 2018 and December 31, 2017, the Bank had total residential mortgage and commercial real estate loans pledged after discount of $8,548,416 and $9,123,601, respectively. In addition to the pledged mortgages, the Bank had also pledged securities to secure borrowings, which are disclosed in Note 3. “Securities.” As of September 30, 2018, the Bank had unused borrowing capacity at the FHLB of $6,235,781 and may increase its borrowing capacity by pledging securities not required to be pledged for other purposes with a collateral value of approximately $3,578,859. Repurchase agreements. The Bank enters into sales of securities under agreements to repurchase. These repurchase agreements facilitate the needs of our customers and a portion of our secured short-term funding needs. Securities sold under agreements to repurchase at September 30, 2018 and December 31, 2017 are secured short-term borrowings that mature in one to 45 days and are generally renewed on a continuous basis. Repurchase agreements are stated at the amount of cash received in connection with these transactions. The securities pledged under these repurchase agreements fluctuate in value due to market conditions. The Bank is obligated to promptly transfer additional securities if the market value of the securities falls below the repurchase agreement price. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. 5.50% Senior Notes. On July 2, 2013, the Company issued $100,000 principal amount of 5.50% fixed rate notes, which matured on July 2, 2018. At such date, the Company utilized cash on hand to repay the outstanding principal balance and interest of such notes. 3.50% Senior Notes. On October 2, 2017, in connection with the Astoria Merger, the Company assumed $200,000 principal amount of 3.50% fixed rate senior notes that mature on June 8, 2020 (the “3.50% Senior Notes”). The 3.50% Senior Notes were issued by Astoria on June 8, 2017 through a public offering. The Company recorded the 3.50% Senior Notes at an estimated fair value of 100.76% on the acquisition date, which was based on the quoted market value. The fair value adjustment, with a remaining balance of $972 at September 30, 2018, is being amortized over the remaining maturity using a level-yield methodology, which results in an effective cost of 3.19%. Subordinated Notes. On March 29, 2016, the Bank issued $110,000 principal amount of 5.25% fixed-to-floating rate subordinated notes (the “Subordinated Notes”) through a private placement at a discount of 1.25%. The cost of issuance was $500. On September 2, 2016, the Bank reopened the Subordinated Notes offering and issued an additional $65,000 principal amount of Subordinated Notes. The Subordinated Notes issued September 2, 2016 are fully fungible with, rank equally in right of payment with, and form a single series with the Subordinated Notes issued in March 2016. The Subordinated Notes issued in September 2016 were issued to the purchasers at a premium of 0.50% and an underwriters discount of 1.25%. The cost of issuance was $275. At September 30, 2018, the net unamortized discount of all Subordinated Notes was $2,115, which will be accreted to interest expense over the life of the Subordinated Notes, resulting in an effective yield of 5.45%. Interest is due semi-annually in arrears on April 1 and October 1 of each year, until April 1, 2021. From and including April 1, 2021, the Subordinated Notes will bear interest at a floating rate per annum equal to three-month LIBOR plus 3.937%, payable quarterly on January 1, April 1, July 1 and October 1 of each year, beginning on July 1, 2021, through maturity on April 1, 2026 or earlier redemption. The Subordinated Notes are also redeemable by the Bank, in whole or in part, on April 1, 2021 and each interest payment date thereafter. The Subordinated Notes are redeemable in whole at any time upon the occurrence of certain specified events. The Subordinated Notes are unsecured, subordinated obligations of the Bank and are subordinated in right of payment to all of the Bank’s existing and future senior indebtedness, including claims of depositors and general creditors. The Subordinated Notes qualify as Tier 2 capital for regulatory purposes. See Note 15. “Stockholders’ Equity” for additional information. Revolving line of credit. Effective September 2, 2018, the Company renewed its $35,000 revolving line of credit facility (the “Credit Facility”). The Credit Facility, which is with another financial institution, matures on September 2, 2019. The balance was zero at September 30, 2018 and December 31, 2017. The use of proceeds are for general corporate purposes. The Credit Facility and accrued interest is payable at maturity, and the Company is required to maintain a zero balance for at least 30 days during its term. Loans under the Credit Facility bear interest at one-month LIBOR plus 1.25%. Under the terms of the Credit Facility, the Company and the Bank must maintain certain ratios related to capital, non-performing assets to capital, reserves to non-performing loans and debt service coverage. The Company and the Bank were in compliance with all requirements of the Credit Facility at September 30, 2018. |
Derivatives |
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Derivative Instruments and Hedges, Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives The Company has entered into certain interest rate swap contracts that are not designated as hedging instruments. These derivative contracts relate to transactions in which the Company enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, the Company agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the Company’s customers to effectively convert a variable rate loan to a fixed rate loan. Because the Company acts as an intermediary for its customers, changes in the fair value of the underlying derivative contracts largely offset each other and do not materially impact results of operations. The Company has entered into interest rate swap contracts that are both over-the-counter, or OTC, and those that are exchanged on futures markets such as the Chicago Mercantile Exchange (“CME”). At September 30, 2018 and December 31, 2017, the OTC derivatives are included in the financial statements at the gross fair value amount of the asset (included in other assets) and liability (included in other liabilities), which represents the change in the fair value of the contract since inception. Effective for the quarter ended March 31, 2017, the CME amended its rulebook to legally characterize variation margin payments (a payment made based on changes in the fair value of the interest rate swap contracts) as a settlement, referred to as settled-to-market (“STM”). As a result of this change, at September 30, 2018 and December 31, 2017, the Company paid cash as STM in the amount of $15,131 and $3,523, respectively, for the net fair value of its CME interest rate swap contracts with another financial institution. The variation margin payment changes daily, positively or negatively, based on a change in the fair value of the underlying interest rate swap contracts. The Company does not typically require its commercial customers to post cash or securities as collateral on its program of back-to-back swaps. However, certain language is written into the International Swaps and Derivatives Association agreement and loan documents where, in default situations, the Company is allowed to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. Summary information as of September 30, 2018 and December 31, 2017 regarding these derivatives is presented below:
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Income Taxes |
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Income Taxes | Income Taxes Actual income tax expense differs from the tax computed based on pre-tax income and the applicable statutory Federal tax rate for the following reasons:
Net deferred tax assets totaled $85,431 at September 30, 2018 and $97,333 at December 31, 2017. No valuation allowance was recorded against deferred tax assets as of those dates, based upon management’s consideration of historical and anticipated future pre-tax income, and the reversal periods for the items resulting in deferred tax assets and liabilities. There were no unrecognized tax benefits during any of the reported periods. Interest and/or penalties related to income taxes are reported as a component of other non-interest expense. Such amounts were not material during the reported periods. The Company is generally no longer subject to examination by Federal, state and local taxing authorities for fiscal years prior to September 30, 2014. The Tax Cuts and Jobs Act of 2017 reduced the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result, the Company was required to remeasure, through income tax expense, the Company’s deferred tax assets and liabilities using the enacted tax rate at which the deferred items are expected to be recovered or settled. The remeasurement of the Company’s net deferred tax assets resulted in additional provisional income tax expense of $40,285 recorded in 2017. During the third quarter of 2018 the Company completed its evaluation of certain aspects of the new tax law, as well as the final tax returns related to Astoria’s business and operations through October 1, 2017. After completion of these tax returns, the Company reduced income tax balances and goodwill in the amount of $6,214, which finalized all purchase accounting adjustments for the Astoria Merger. |
Stock-Based Compensation |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company has active stock-based compensation plans, as described below. The Company’s stockholders approved the 2015 Omnibus Equity and Incentive Plan (the “2015 Plan”) on May 28, 2015. The 2015 Plan permits the grant of stock options, stock appreciation rights, restricted stock (both time-based and performance-based), restricted stock units, deferred stock and other stock-based awards. The total number of shares that may be awarded under the 2015 Plan is 2,800,000 shares plus the remaining shares available for grant under the stockholder approved 2014 Stock Incentive Plan as of the date of adoption of the 2015 Plan. At September 30, 2018, there were, in aggregate, 2,379,112 shares available for future grant under the 2015 Plan. Restricted stock awards are granted with a fair value equal to the market price of the Company’s common stock at the date of grant. Stock option awards are granted with a strike price that is equal to the market price of the Company’s common stock at the date of grant. The restricted stock awards generally vest in equal installments annually on the anniversary date of grant and have total vesting periods ranging from one to five years, while stock options have 10-year contractual terms. The following table summarizes the activity in the Company’s active stock-based compensation plans for the nine months ended September 30, 2018:
The total intrinsic value of outstanding in-the-money stock options and outstanding in-the-money exercisable stock options was $7,640 and $7,629, respectively, at September 30, 2018. The Company uses an option pricing model to estimate the grant date fair value of stock options granted. There were no stock options granted during the nine months ended September 30, 2018 or September 30, 2017. Stock-based compensation expense is recognized ratably over the requisite service period for all awards. Stock-based compensation expense associated with stock options and non-vested stock awards and the related income tax benefit are presented below:
Unrecognized stock-based compensation expense as of September 30, 2018 was as follows:
The weighted average period over which unrecognized non-vested stock awards/performance units expense is expected to be recognized is 1.67 years. |
Pension and Other Post-Retirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Post-Retirement Benefits | Pension and Other Post-Retirement Benefits Total pension and other post-retirement benefits expense is comprised of the following for the periods presented below:
Total net periodic pension and other post-retirement (benefit) expense is included as a component of other non-interest expense. The Company’s pension benefit plans include all of the assets and liabilities of the Astoria Bank Pension Plan, the Astoria Excess and Supplemental Benefit Plans, the Astoria Directors’ Retirement Plan, the Greater New York Savings Bank Directors’ Retirement Plan and the Long Island Bancorp Directors’ Retirement Plan, which were assumed in the Astoria Merger. The Company’s other post retirement benefit plans include the assumed Astoria Bank Retiree Health Care Plan and the Astoria Bank BOLI plan, along with other non-qualified Supplemental Executive Retirement Plans (“SERPs”) that provide certain directors, officers and executives with supplemental retirement benefits. The Company contributed $41,825 and $13 to fund pension and other post retirement benefits during the three months ended September 30, 2018 and 2017, respectively, and contributed $42,500 and $109 to fund pension and other post retirement benefits during the nine months ended September 30, 2018 and 2017, respectively. Included in the contribution made during the three and nine months ended September 30, 2018 was a payment of $41,510 towards the Astoria Bank Pension Plan unfunded accumulated benefit obligation. Total pension and other post-retirement benefits plans liabilities were $43,867 and $89,965 at September 30, 2018 and December 31, 2017, respectively, and are included in other liabilities in the consolidated balance sheets. |
Non-Interest Income and Other Non-Interest Expense |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Interest Income and Other Non-Interest Expense | Non-Interest Income and Other Non-Interest Expense (a) Non-Interest Income - Revenue from Contracts with Customers The Company’s significant sources of non-interest income are presented on the face of the consolidated income statements, which include all income in the scope of the New Revenue Standard. A description of the Company’s revenue streams accounted for under the New Revenue Standard follows: Deposit fees and service charges. The Company earns fees from its deposit customers mainly for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which includes services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance. Accounts receivable management / factoring commissions and other fees. The Company earns these fees / commissions from its payroll finance and factoring businesses, as described below. Payroll finance. The Company provides financing and back office support services, which includes preparation of payroll, payroll tax payments, billings and collections, for clients in the temporary staffing industry. Upon completion of the back office support services, and as payroll remittances are made on behalf of the client to fund their employee payroll, which typically occurs weekly, the Company recognizes a portion of the total revenue generated as non-interest income. The Company collects invoices directly from the borrower’s customers, and retains the amounts billed for the temporary staffing services provided, and remits the remaining funds to the borrower net of amounts advanced, payroll taxes withheld, the Company’s fees, and subject to a reserve to offset potential uncollectible balances. Factored Receivables. The Company provides accounts receivable management services. The purchase of a client’s accounts receivable is traditionally known as “factoring” and results in payment by the client of a factoring fee. The factoring fee included in non-interest income represents compensation to the Company for the bookkeeping and collection services provided. The factoring fee, which is non-refundable, is recognized at the time the receivable is assigned to the Company. Other revenue associated with factored receivables includes wire fees, technology fees, field examination fees and UCC fees. All such fees are recognized as income upon receipt, which is when the Company’s obligations are provided to the Company’s customers. Investment management fees. The Company earns investment management fees from its contracts with customers to manage assets for investment, and / or to transact on their accounts. Advisory fees are primarily earned over time as the Company provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of assets under management at month end. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed, i.e., the trade date. Gains / Losses on sales of OREO. The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform its obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company may adjust the transaction price and related gain (loss) on sale if a significant financing component is present. Contract Balances. A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s non-interest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as investment management fees based on period-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of September 30, 2018 and December 31, 2017, the Company did not have any significant contract balances. (b) Other Non-Interest Expense Other non-interest expense items for the three and nine months ended September 30, 2018 and 2017, respectively, are presented in the following table:
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Earnings Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings Per Common Share The following is a summary of the calculation of earnings per common share (“EPS”):
(1) Represents incremental shares computed using the treasury stock method. (2) Anti-dilutive shares are not included in determining diluted EPS. There were no anti-dilutive shares in the three and nine months ended September 30, 2018 or September 30, 2017. |
Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity (a) Regulatory Capital Requirements Banks and bank holding companies are subject to various regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines, and additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk-weighting, and other factors. The Basel III Capital Rules became effective for the Company and the Bank on January 1, 2015 (subject to a phase-in period for certain provisions). Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1 capital (as defined in the regulations), Tier 1 capital (as defined in the regulations) and Total capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations, “RWA”), and of Tier 1 capital to adjusted quarterly average total assets (as defined in the regulations, the “Tier 1 leverage ratio”). The Company’s and the Bank’s Common Equity Tier 1 capital consists of common stock and related paid-in capital, net of treasury stock, and retained earnings. In connection with the adoption of the Basel III Capital Rules, we elected to opt-out of the requirement to include most components of accumulated other comprehensive income in Common Equity Tier 1 capital. Common Equity Tier 1 capital for both the Company and the Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities and subject to transition provisions. Tier 1 capital includes Common Equity Tier 1 capital and additional Tier 1 capital. Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital (as defined in the regulations) for both the Bank and the Company includes a permissible portion of the allowance for loan losses and $172,885 and $139,429 of the Subordinated Notes, respectively. During the final five years of the term of the Subordinated Notes, the permissible portion eligible for inclusion in Tier 2 capital decreases by 20% annually. The Common Equity Tier 1, Tier 1 and Total capital ratios are calculated by dividing the respective capital amounts by RWA. RWA is calculated based on regulatory requirements and includes total assets, excluding goodwill and other intangible assets, allocated by risk weight category, and certain off-balance-sheet items, among other items. The Tier 1 leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, which excludes goodwill and other intangible assets, among other items. When fully phased-in on January 1, 2019, the Basel III Capital Rules will require the Company and the Bank to maintain: (i) a minimum ratio of Common Equity Tier 1 capital to RWA of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% Common Equity Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum ratio of Common Equity Tier 1 capital to RWA of at least 7.0% upon full implementation); (ii) a minimum ratio of Tier 1 capital to RWA of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation); (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to RWA of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation); and (iv) a minimum Tier 1 leverage ratio of 4.0%. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and effective January 1, 2018, increased to the 1.875% level and will be phased-in over a four-year period (increasing by 0.625% on each subsequent January 1, until it reaches 2.5% on January 1, 2019). The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company or the Bank. The aforementioned capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of Common Equity Tier 1 capital to RWA above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The following tables present actual and required capital ratios as of September 30, 2018 and December 31, 2017 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of September 30, 2018 and December 31, 2017 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered well-capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
The Bank and the Company are subject to the regulatory capital requirements administered by the FRB, and, for the Bank, the Office of the Comptroller of the Currency. Regulatory authorities can initiate certain mandatory actions if the Bank or the Company fails to meet the minimum capital requirements, which could have a direct material effect on our financial statements. As of September 30, 2018, and December 31, 2017, the most recent regulatory notifications categorized the Company and the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the classification. (b) Dividend Restrictions The Company is mainly dependent on dividends from the Bank to provide funds for the payment of dividends to stockholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that fiscal year combined with the retained net profits for the preceding two fiscal years. Under the foregoing dividend restrictions and while maintaining its “well-capitalized” status, at September 30, 2018, the Bank had capacity to pay aggregate dividends of up to $324,008 to the Company without prior regulatory approval. (c) Stock Repurchase Plans From time to time, the Company’s Board of Directors has authorized stock repurchase plans. The Company may purchase up to 10,000,000 common shares, which represents 4.4% of our shares outstanding at September 30, 2018. Repurchases may be made at management’s discretion through open market purchases and block trades in accordance with SEC and regulatory requirements. Any common shares purchased will be held as Treasury stock and made available for general corporate purposes. There were no shares repurchased under the repurchase program during the nine months ended September 30, 2018 or September 30, 2017. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies (a) Off-Balance Sheet Financial Instruments In the normal course of business, the Company enters into various transactions, which, in accordance with GAAP, are not included in its consolidated balance sheets. The Company enters into these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The Company minimizes its exposure to losses under these commitments by subjecting them to credit approval and monitoring procedures. The Company enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. Standby letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third-party. In the event the customer does not perform in accordance with the terms of the agreement with the third-party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount of the commitment. If the commitment were funded, the Company would be entitled to seek recovery from the customer. Based on the Company’s credit risk exposure assessment of its standby letter of credit arrangements, the arrangements contain security and debt covenants similar to those contained in loan agreements. The contractual or notional amounts of these instruments, which reflect the extent of the Company’s involvement in particular classes of off-balance sheet financial instruments, are summarized as follows:
(b) Lease Commitments The Company leases certain premises and equipment under operating leases with terms expiring through January 2034. Included in occupancy and office operations expense was net rent expense of $4,572 and $1,874 during the three months ended September 30, 2018 and 2017, respectively. Net rent expense was $13,972 and $6,263 for the nine months ended September 30, 2018 and 2017, respectively. Future minimum lease payments due under non-cancelable operating leases at September 30, 2018 were as follows:
(c) Litigation The Company and the Bank are involved in a number of judicial proceedings concerning matters arising from their business activities. These include routine legal proceedings arising in the ordinary course of business. These proceedings also include actions brought against the Company and the Bank with respect to corporate matters and transactions in which the Company and the Bank are or were involved. There can be no assurance as to the ultimate outcome of a legal proceeding; however, the Company and the Bank have generally denied liability in all significant litigation pending against them and intend to defend vigorously each case, other than matters that are determined appropriate to be settled. The Company and the Bank accrue a liability for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts accrued for those claims. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risk, etc.) or inputs that are derived principally from, or corroborated by, market data by correlation or other means. Level 3 Inputs – Unobservable inputs for determining the fair value of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. In general, fair value is based on quoted market prices, when available. If quoted market prices in active markets are not available, fair value is based on internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other items, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates; therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein. A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value is set forth below. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which usually coincide with the Company’s monthly and/or quarterly valuation process. Investment Securities Available for Sale The majority of the Company’s available for sale investment securities are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the securities’ terms and conditions, among other things. The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company does not purchase investment securities that have a complicated structure. The Company’s entire portfolio consists of traditional investments, nearly all of which are mortgage pass-through securities, state and municipal general obligation or revenue bonds, U.S. agency bullet and callable securities and corporate bonds. Pricing for such instruments is fairly generic and is easily obtained. From time to time, the Company validates, on a sample basis, prices supplied by the independent pricing service by comparison to prices obtained from third-party sources or derived using internal models. As of September 30, 2018, management does not believe any of our securities are OTTI; however, management reviews all of the Company’s securities on at least a quarterly basis to assess whether impairment, if any, is OTTI. Derivatives The fair values of derivatives are based on valuation models using current market terms (including interest rates and fees), the remaining terms of the agreements, and the creditworthiness of the counterparty as of the measurement date (Level 2 inputs). The Company’s derivatives consist of interest rate swaps. See Note 9. “Derivatives” for additional information. A summary of such investment securities available for sale and derivatives at September 30, 2018 and December 31, 2017, respectively, measured at estimated fair value on a recurring basis, is as follows:
(1) Residential MBS are debt securities whose cash flows come from residential mortgage and consumer loans, such as mortgages and HELOCs. A residential MBS is comprised of a pool of mortgage loans created by financial institutions, including governmental agencies. The cash flows from each mortgage loan included in the pool are structured through a special purpose entity into various classes and tranches, which then issue securities backed by those cash flows to investors. (2) CMOs are debt securities that are collateralized by a specific pool of residential mortgage loans, in which the issuer of the CMOs can direct the payments of principal and interest received on the underlying collateral to achieve specific investor cash flow objectives. The Bank generally acquires planned-amortization class securities and CMOs with a sequential pay structure in order to manage the duration and extension risk inherent in these securities.
The following categories of financial assets are not measured at fair value on a recurring basis, but are subject to fair value adjustments in certain circumstances. Impaired Loans Loans that meet certain criteria are evaluated individually for impairment. Generally, loans less than $750 are evaluated for impairment on a pooled basis. Impairment amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated impairment amount applicable to that loan does not necessarily represent the fair value of the loan. Real estate collateral is valued using independent appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable by market participants. However, due to the substantial judgment applied and limited volume of activity as compared to other assets, fair value of the underlying collateral is based on Level 3 inputs. Estimates of fair value used for collateral supporting commercial loans generally are based on assumptions not observable in the market place and are also based on Level 3 inputs. Impaired loans are remeasured at least quarterly and their carrying values are adjusted as needed. Impaired loans subject to non-recurring fair value measurements were $111,685 and $60,862 at September 30, 2018 and December 31, 2017, respectively. Changes in fair value recognized as a charge-off on loans held by the Company were $10,477 and $542 for the nine months ended September 30, 2018 and 2017, respectively. When an impaired loan is collateral dependent, the Company charges-off the difference between the recorded investment in the loan and the appraised value less cost to sell. A discount for estimated costs to dispose of the asset and overall marketability is used when estimating the amount of impairment. A summary of the classes with impaired loans at September 30, 2018 and December 31, 2017, respectively, is set forth below:
Mortgage Servicing Rights Mortgage servicing rights are carried at the lower of cost or estimated fair value. The fair value of mortgage servicing rights is estimated using a discounted cash flow model that is prepared by an independent third-party valuation provider and is performed on a quarterly basis. The significant assumptions, which are assumptions we believe other market participants would use, include the following: market discount rates, prepayment speeds, servicing revenue, the cost of servicing and loan default rates. The market discount rates and prepayment speeds are considered by management to be two of the most significant inputs into the determination of the estimated fair value. Due to the significant judgment involved, the determination of estimated fair value of mortgage servicing rights relies upon Level 3 inputs. At September 30, 2018, the assumption for constant prepayment rates (“CPR”) ranged from 8.68 to 19.23, with a weighted average CPR of 9.28, and the assumption for market discount rate ranged from 9.06% to 20.00%, with a weighted average market discount rate of 9.54%. At December 31, 2017, the CPR assumption ranged from 9.79 to 16.76, with a weighted average CPR of 10.30, and the assumption for market discount rate ranged from 9.50% to 20.00%, with a weighted average market discount rate of 9.90%. The fair value of mortgage servicing rights at September 30, 2018 and December 31, 2017 was $11,564 and $10,363, respectively. Other Real Estate Owned OREO is initially recorded at fair value less costs to sell when acquired, which establishes a new cost basis. When an asset is acquired, the excess of the recorded investment in the loan over the fair value less cost to sell is charged to the allowance for loan losses. These assets are subsequently accounted for at the lower of cost or fair value less cost to sell and are primarily comprised of commercial and residential real estate property. If the fair value declines, a write-down is recorded in other real estate owned expense, net on the consolidated income statements. Fair value is generally determined using appraisals or other indications of value based on comparable sales of similar properties or assumptions generally observable in the marketplace. Adjustments are routinely made in the appraisal process by independent appraisers for differences between comparable sales and income data available (in the case of income producing properties). The fair value is derived using Level 3 inputs. Appraisals are reviewed by the Company’s credit department and an external loan review consultant and verified by officers in the Company’s credit administration area. At September 30, 2018 and December 31, 2017, appraisals were discounted by 22.0%, which considers estimated costs to sell and overall marketability of the properties. OREO subject to non-recurring fair value measurement was $22,735 and $27,095 at September 30, 2018 and December 31, 2017, respectively. There were $553 and $1,737 of write-downs related to changes in fair value for OREO held by the Company during the nine months ended September 30, 2018 and September 30, 2017, respectively. Fair Value of Financial Instruments Fair values for financial instruments must be estimated by management using techniques such as discounted cash flow analysis and comparison to similar instruments. These estimates are highly subjective and require judgments regarding significant matters, such as the amount and timing of future cash flows and the selection of discount rates that appropriately reflect market and credit risks. Changes in these judgments often have a material effect on the fair value estimates. Since these estimates are made as of a specific point in time, they are susceptible to material near-term changes. Fair values disclosed in accordance with ASC Topic 825 do not reflect any premium or discount that could result from the sale of a large volume of a particular financial instrument, nor do they reflect possible tax ramifications or estimated transaction costs. The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of September 30, 2018:
Effective January 1, 2018, with the adoption of the New Fair Value Standard, the fair value of portfolio loans, net is determined using an exit price methodology. The exit price methodology continues to be based on a discounted cash flow analysis, in which projected cash flows are based on contractual cash flows adjusted for prepayments for certain loan types (e.g. residential mortgage loans and multi-family loans) and the use of a discount rate based on expected relative risk of the cash flows. The discount rate selected considers loan type, maturity date, a liquidity premium, cost to service, and cost of capital, which is a Level 3 fair value estimate. In 2017, the fair value estimate of portfolio loans, net was determined using an entrance price methodology based only on the discounted methodology outlined above. The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of December 31, 2017:
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Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss were as follows as of the dates shown below:
The following table presents the changes in each component of accumulated other comprehensive loss for the three months ended September 30, 2018 and 2017:
The following table presents the changes in each component of accumulated other comprehensive loss for the nine months ended September 30, 2018 and 2017:
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Recently Issued Accounting Standards Not Yet Adopted |
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Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted ASU 2016-02,“Leases (Topic 842).” ASU 2016-02 amends existing lease accounting guidance, including the requirement to recognize most lease arrangements on the balance sheet. The adoption of this standard will result in the Company recognizing a right-of-use asset representing its rights to use the underlying asset for the lease term with an offsetting lease liability. ASU 2016-02 is effective for the company on January 1, 2019. ASU 2016-02 requires a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, ASU 2018-11 “Leases (Topic 842) Targeted Improvements” which, among other things, provides an additional transition method that would allow entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is implementing a third-party vendor solution to assist in the application of the new lease standard. The Company has aggregated a list of all leases, and if the standard would have been effective at September 30, 2018, it would not have had an impact on any borrowings or financial covenants that are relevant to the Company. Management estimates the increase in assets from the recognition of a right-of-use asset will be approximately $90 million to $110 million and that the impact to the Bank’s and the Company’s regulatory capital ratios would be a decrease of approximately five to seven basis points, which would be due to an increase in total assets and risk-weighted assets, given our lease arrangements for financial centers and other locations. The Company currently intends to apply certain practical expedients provided under ASU 2016-02 in which we will not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, and initial direct costs for any existing leases. We also do not expect to apply the recognition requirements of ASU 2016-02 to any short-term leases. ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 amends current guidance on the impairment of financial instruments. ASU 2016-13 adds an impairment model known as the current expected credit loss (“CECL”) model that is based on expected losses rather than incurred losses. For the Company, the CECL model will apply mainly to held-to-maturity investment securities, loans and loan commitments. ASU 2016-13 will be effective for the Company for fiscal years beginning after December 15, 2019, and the Company is permitted to early adopt the new guidance for fiscal years beginning after December 15, 2018. ASU 2016-13 will significantly change the accounting for credit impairments. The new guidance will require the Company to modify current processes and systems for establishing the allowance for loan losses and OTTI to ensure they comply with the requirements of the new standard. The Company engaged a nationally recognized accounting firm to assist management in performing an implementation readiness assessment. The Company has made significant progress since 2017 as disclosed in the 2017 Form 10-K. In 2018, we are focusing on several areas including mitigation of gaps in data, and we anticipate being in a position to test our CECL models and methodology by the end of the fourth quarter of 2018. The Company is unable to estimate the impact of adopting ASU 2016-13 at this time; however, it currently anticipates the allowance for loan losses in the aggregate will be greater under the CECL model compared to the current incurred loss model and that the composition of the loan and securities portfolio, as well as the status of the economic environment, will be significant factors that impact the balance at date of adoption. ASU 2017-08, “Premium Amortization on Purchased Callable Debt Securities.” ASU 2017-08 shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. Today, entities generally amortize the premium over the contractual life of the security. The new guidance does not change the accounting for purchased callable debt securities held at a discount as discounts continue to be amortized to maturity. ASU No. 2017-08 is effective for the Company on January 1, 2019. The guidance includes a modified retrospective transition approach under which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company currently anticipates that impact of adoption will not be significant to its financial statements. ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 make certain targeted improvements to simplify the application of the hedge accounting guidance in GAAP. The amendments in this update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This update also includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. Prior to the issuance of this updated, GAAP contained specific requirements for initial and ongoing quantitative hedge effectiveness testing and strict requirements for specialized effective testing methods that allowed an entity to forgo quantitative hedge effectiveness assessments for qualifying relationships. ASU 2017-12 is effective for the Company on January 1, 2019, and the Company anticipates using the modified retrospective method. The Company is in the process of reviewing its state and municipal and MBS investment securities portfolios to determine if it will reclassify securities from the held to maturity portfolio to the available for sale portfolio. The Company has not yet identified a population of specific securities to be reclassified and does not anticipate that the reclassification will have a material impact on its capital position. ASU 2018-13, “Fair Value Measurement (Topic 820) - Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-13 will be effective for the Company on January 1, 2020, with early adoption permitted, and is not expected to have a significant impact on our financial statements. ASU 2018-14, “Compensation - Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20).” ASU 2018-14 amends and modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The amendments in this update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-14 will be effective for us on January 1, 2021, with early adoption permitted, and is not expected to have a significant impact on our financial statements. ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 clarifies certain aspects of ASU 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which was issued in April 2015. Specifically, ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 does not affect the accounting for the service element of a hosting arrangement that is a service contract. ASU 2018-15 will be effective for us on January 1, 2020, with early adoption permitted, and is not expected to have a significant impact on our financial statements. |
Basis of Financial Statement Presentation (Policies) |
9 Months Ended |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements in this Quarterly Report on Form 10-Q include the accounts of the Company and all other entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and financial reporting policies the Company follows conform, in all material respects, to accounting principles generally accepted in the United States (“GAAP”) and to general practices within the banking industry, which include regulatory reporting instructions. The consolidated financial statements in this Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm, but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations. All such adjustments were of a normal and recurring nature. The consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (the “SEC”). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2017, included in our Annual Report on Form 10-K, as filed with the SEC on March 1, 2018 (the “2017 Form 10-K”). Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period. Certain items in prior financial statements have been reclassified to conform to the current presentation. These reclassifications had no impact on previously reported net income. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, expense and contingencies at the date of the financial statements. Actual results could differ significantly from these estimates, particularly the allowance for loan losses and the status of contingencies, and are subject to change. |
Recently Issued Accounting Standards, Adopted and Not Yet Adopted | Adoption of New Accounting Standards The Company adopted the following new accounting standards effective January 1, 2018: Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (the “New Revenue Standard”), (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revises when it is appropriate to recognize a gain (loss) from the transfer of non-financial assets, such as other real estate owned (“OREO”). The Company adopted the New Revenue Standard using the modified retrospective method applied to all contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under the New Revenue Standard, while prior period amounts continue to be reported in accordance with legacy GAAP. The adoption of the New Revenue Standard did not result in a significant change to the accounting for any in-scope revenue streams. As such, no cumulative effect adjustment was recorded. The majority of the Company’s revenues come from interest income and other sources, including loans and securities, that are outside the scope of the New Revenue Standard. The Company’s services that fall within the scope of the New Revenue Standard are primarily included within non-interest income in the consolidated income statements and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of the New Revenue Standard include deposit fees and services charges, accounts receivable management / factoring commissions and other fees, investment management fees and the sale of OREO, which is included within OREO, net expense. See Note 13. “Non-Interest Income and Other Non-Interest Expense” for further discussion on the Company’s accounting policies for revenue sources within the scope of the New Revenue Standard. Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition of Financial Assets and Financial Liabilities (the “New Fair Value Standard”), makes targeted amendments to the guidance for recognition, measurement, presentation and disclosure of financial instruments. The New Fair Value Standard requires equity investments to be measured at fair value with changes in fair value recognized in net income; however, the Company owned no assets subject to this portion of the New Fair Value Standard. The New Fair Value Standard also emphasizes the existing requirement to use exit prices to measure fair value for disclosure purposes and clarifies that entities should not make use of a practicability exception in determining the fair value of loans. As a result of the adoption of the New Fair Value Standard, the Company modified its calculation used to estimate the fair value of portfolio loans. See Note 17. “Fair Value Measurements” for further discussion of the Company’s methodology. The New Fair Value Standard had no impact to the consolidated balance sheets or income statements. ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (the “New Retirement Standard”), requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. The other components of net benefit cost, including interest cost, expected return on plan assets, amortization of prior service cost/credit and actuarial gain/loss, and settlement and curtailment effects, are presented as a component of other non-interest expense. The adoption of this standard resulted in the reclassification of $328 from compensation and benefits to other non-interest expense for the nine months ended September 30, 2017. ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (the “AOCI Standard”), allows a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for the stranded tax effects caused by the revaluation of estimated deferred taxes resulting from the enactment of the Tax Cuts and Jobs Act of 2017. As a result of the adoption of the AOCI Standard the Company reduced AOCI and increased retained earnings by $5,129 in the nine months ended September 30, 2018 related to unrealized losses on securities available for sale, securities transferred to held to maturity and a net actuarial loss on defined benefit retirement plans. As a result of the adoption of the AOCI standard, the Company will release such income tax effects only when the entire portfolio to which the underlying items are liquidated, sold or extinguished. The adoption of the AOCI Standard did not impact total stockholders’ equity or the consolidated income statements for any period. Recently Issued Accounting Standards Not Yet Adopted ASU 2016-02,“Leases (Topic 842).” ASU 2016-02 amends existing lease accounting guidance, including the requirement to recognize most lease arrangements on the balance sheet. The adoption of this standard will result in the Company recognizing a right-of-use asset representing its rights to use the underlying asset for the lease term with an offsetting lease liability. ASU 2016-02 is effective for the company on January 1, 2019. ASU 2016-02 requires a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, ASU 2018-11 “Leases (Topic 842) Targeted Improvements” which, among other things, provides an additional transition method that would allow entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is implementing a third-party vendor solution to assist in the application of the new lease standard. The Company has aggregated a list of all leases, and if the standard would have been effective at September 30, 2018, it would not have had an impact on any borrowings or financial covenants that are relevant to the Company. Management estimates the increase in assets from the recognition of a right-of-use asset will be approximately $90 million to $110 million and that the impact to the Bank’s and the Company’s regulatory capital ratios would be a decrease of approximately five to seven basis points, which would be due to an increase in total assets and risk-weighted assets, given our lease arrangements for financial centers and other locations. The Company currently intends to apply certain practical expedients provided under ASU 2016-02 in which we will not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, and initial direct costs for any existing leases. We also do not expect to apply the recognition requirements of ASU 2016-02 to any short-term leases. ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 amends current guidance on the impairment of financial instruments. ASU 2016-13 adds an impairment model known as the current expected credit loss (“CECL”) model that is based on expected losses rather than incurred losses. For the Company, the CECL model will apply mainly to held-to-maturity investment securities, loans and loan commitments. ASU 2016-13 will be effective for the Company for fiscal years beginning after December 15, 2019, and the Company is permitted to early adopt the new guidance for fiscal years beginning after December 15, 2018. ASU 2016-13 will significantly change the accounting for credit impairments. The new guidance will require the Company to modify current processes and systems for establishing the allowance for loan losses and OTTI to ensure they comply with the requirements of the new standard. The Company engaged a nationally recognized accounting firm to assist management in performing an implementation readiness assessment. The Company has made significant progress since 2017 as disclosed in the 2017 Form 10-K. In 2018, we are focusing on several areas including mitigation of gaps in data, and we anticipate being in a position to test our CECL models and methodology by the end of the fourth quarter of 2018. The Company is unable to estimate the impact of adopting ASU 2016-13 at this time; however, it currently anticipates the allowance for loan losses in the aggregate will be greater under the CECL model compared to the current incurred loss model and that the composition of the loan and securities portfolio, as well as the status of the economic environment, will be significant factors that impact the balance at date of adoption. ASU 2017-08, “Premium Amortization on Purchased Callable Debt Securities.” ASU 2017-08 shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. Today, entities generally amortize the premium over the contractual life of the security. The new guidance does not change the accounting for purchased callable debt securities held at a discount as discounts continue to be amortized to maturity. ASU No. 2017-08 is effective for the Company on January 1, 2019. The guidance includes a modified retrospective transition approach under which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company currently anticipates that impact of adoption will not be significant to its financial statements. ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 make certain targeted improvements to simplify the application of the hedge accounting guidance in GAAP. The amendments in this update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This update also includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. Prior to the issuance of this updated, GAAP contained specific requirements for initial and ongoing quantitative hedge effectiveness testing and strict requirements for specialized effective testing methods that allowed an entity to forgo quantitative hedge effectiveness assessments for qualifying relationships. ASU 2017-12 is effective for the Company on January 1, 2019, and the Company anticipates using the modified retrospective method. The Company is in the process of reviewing its state and municipal and MBS investment securities portfolios to determine if it will reclassify securities from the held to maturity portfolio to the available for sale portfolio. The Company has not yet identified a population of specific securities to be reclassified and does not anticipate that the reclassification will have a material impact on its capital position. ASU 2018-13, “Fair Value Measurement (Topic 820) - Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-13 will be effective for the Company on January 1, 2020, with early adoption permitted, and is not expected to have a significant impact on our financial statements. ASU 2018-14, “Compensation - Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20).” ASU 2018-14 amends and modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The amendments in this update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-14 will be effective for us on January 1, 2021, with early adoption permitted, and is not expected to have a significant impact on our financial statements. ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 clarifies certain aspects of ASU 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which was issued in April 2015. Specifically, ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 does not affect the accounting for the service element of a hosting arrangement that is a service contract. ASU 2018-15 will be effective for us on January 1, 2020, with early adoption permitted, and is not expected to have a significant impact on our financial statements. |
Fair Value Measurement, Policy | Mortgage Servicing Rights Mortgage servicing rights are carried at the lower of cost or estimated fair value. The fair value of mortgage servicing rights is estimated using a discounted cash flow model that is prepared by an independent third-party valuation provider and is performed on a quarterly basis. The significant assumptions, which are assumptions we believe other market participants would use, include the following: market discount rates, prepayment speeds, servicing revenue, the cost of servicing and loan default rates. The market discount rates and prepayment speeds are considered by management to be two of the most significant inputs into the determination of the estimated fair value. Due to the significant judgment involved, the determination of estimated fair value of mortgage servicing rights relies upon Level 3 inputs. The following categories of financial assets are not measured at fair value on a recurring basis, but are subject to fair value adjustments in certain circumstances. Impaired Loans Loans that meet certain criteria are evaluated individually for impairment. Generally, loans less than $750 are evaluated for impairment on a pooled basis. Impairment amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated impairment amount applicable to that loan does not necessarily represent the fair value of the loan. Real estate collateral is valued using independent appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable by market participants. However, due to the substantial judgment applied and limited volume of activity as compared to other assets, fair value of the underlying collateral is based on Level 3 inputs. Estimates of fair value used for collateral supporting commercial loans generally are based on assumptions not observable in the market place and are also based on Level 3 inputs. Impaired loans are remeasured at least quarterly and their carrying values are adjusted as needed Derivatives The fair values of derivatives are based on valuation models using current market terms (including interest rates and fees), the remaining terms of the agreements, and the creditworthiness of the counterparty as of the measurement date (Level 2 inputs). The Company’s derivatives consist of interest rate swaps. See Note 9. “Derivatives” for additional information. Fair Value of Financial Instruments Fair values for financial instruments must be estimated by management using techniques such as discounted cash flow analysis and comparison to similar instruments. These estimates are highly subjective and require judgments regarding significant matters, such as the amount and timing of future cash flows and the selection of discount rates that appropriately reflect market and credit risks. Changes in these judgments often have a material effect on the fair value estimates. Since these estimates are made as of a specific point in time, they are susceptible to material near-term changes. Fair values disclosed in accordance with ASC Topic 825 do not reflect any premium or discount that could result from the sale of a large volume of a particular financial instrument, nor do they reflect possible tax ramifications or estimated transaction costs. Other Real Estate Owned OREO is initially recorded at fair value less costs to sell when acquired, which establishes a new cost basis. When an asset is acquired, the excess of the recorded investment in the loan over the fair value less cost to sell is charged to the allowance for loan losses. These assets are subsequently accounted for at the lower of cost or fair value less cost to sell and are primarily comprised of commercial and residential real estate property. If the fair value declines, a write-down is recorded in other real estate owned expense, net on the consolidated income statements. Fair value is generally determined using appraisals or other indications of value based on comparable sales of similar properties or assumptions generally observable in the marketplace. Adjustments are routinely made in the appraisal process by independent appraisers for differences between comparable sales and income data available (in the case of income producing properties). The fair value is derived using Level 3 inputs. Appraisals are reviewed by the Company’s credit department and an external loan review consultant and verified by officers in the Company’s credit administration area Fair Value of Financial Instruments Fair values for financial instruments must be estimated by management using techniques such as discounted cash flow analysis and comparison to similar instruments. These estimates are highly subjective and require judgments regarding significant matters, such as the amount and timing of future cash flows and the selection of discount rates that appropriately reflect market and credit risks. Changes in these judgments often have a material effect on the fair value estimates. Since these estimates are made as of a specific point in time, they are susceptible to material near-term changes. Fair values disclosed in accordance with ASC Topic 825 do not reflect any premium or discount that could result from the sale of a large volume of a particular financial instrument, nor do they reflect possible tax ramifications or estimated transaction costs. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risk, etc.) or inputs that are derived principally from, or corroborated by, market data by correlation or other means. Level 3 Inputs – Unobservable inputs for determining the fair value of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. In general, fair value is based on quoted market prices, when available. If quoted market prices in active markets are not available, fair value is based on internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other items, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates; therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein. A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value is set forth below. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which usually coincide with the Company’s monthly and/or quarterly valuation process. Investment Securities Available for Sale The majority of the Company’s available for sale investment securities are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the securities’ terms and conditions, among other things. The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company does not purchase investment securities that have a complicated structure. The Company’s entire portfolio consists of traditional investments, nearly all of which are mortgage pass-through securities, state and municipal general obligation or revenue bonds, U.S. agency bullet and callable securities and corporate bonds. Pricing for such instruments is fairly generic and is easily obtained. From time to time, the Company validates, on a sample basis, prices supplied by the independent pricing service by comparison to prices obtained from third-party sources or derived using internal models. When an impaired loan is collateral dependent, the Company charges-off the difference between the recorded investment in the loan and the appraised value less cost to sell. A discount for estimated costs to dispose of the asset and overall marketability is used when estimating the amount of impairment. |
Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of securities available for sale | A summary of amortized cost and estimated fair value of securities as of September 30, 2018 and December 31, 2017 is presented below. The term “MBS” refers to mortgage-backed securities and the term “CMOs” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 17. “Fair Value Measurements”.
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Summary of securities held-to-maturity | The following table summarizes securities held to maturity with unrecognized losses, segregated by the length of time in a continuous unrecognized loss position for the periods presented below:
A summary of amortized cost and estimated fair value of securities as of September 30, 2018 and December 31, 2017 is presented below. The term “MBS” refers to mortgage-backed securities and the term “CMOs” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 17. “Fair Value Measurements”.
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Summary of amortized cost and fair value of investment securities available for sale by remaining period to contractual maturity | The amortized cost and estimated fair value of securities at September 30, 2018 are presented below by contractual maturity. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential MBS are shown separately since they are not due at a single maturity date.
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Sale of securities | Sales of securities for the periods indicated below were as follows:
(1) Gross realized gains and losses includes securities called prior to maturity. (2) In the nine months ended September 30, 2018, the Company sold a security that was held to maturity due to a decline in the credit rating and other evidence of deterioration of the issuer’s creditworthiness. |
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Securities available for sale with unrealized losses, by length of time in continuous unrealized loss position | The following table summarizes securities available for sale with unrealized losses, segregated by the length of time in a continuous unrealized loss position for the periods presented below:
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Securities pledged for borrowings at FHLB and other institutions, and securities pledged for municipal deposits and other purposes | Securities pledged for borrowings at the FHLB and other institutions, and securities pledged for municipal deposits and other purposes, were as follows for the periods presented below:
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Portfolio Loans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of loan portfolio excluding loans held for sale | The composition of the Company’s loan portfolio, excluding loans held for sale, was the following for the periods presented below:
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Schedule of amounts and status of loans and TDRs | The following tables set forth the amounts and status of the Company’s loans, troubled debt restructurings (“TDRs”) and non-performing loans at September 30, 2018 and December 31, 2017:
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Schedule of additional analysis of non-accrual loans | The following table provides additional analysis of the Company’s non-accrual loans at September 30, 2018 and December 31, 2017:
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Impaired financing receivables | The following table presents loans individually evaluated for impairment, excluding PCI loans, by segment of loans at September 30, 2018 and December 31, 2017:
The following table presents the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the three months ended September 30, 2018 and September 30, 2017:
For the three months ended September 30, 2018 and 2017, there were no payroll finance, warehouse lending, factored receivables or public sector finance loans that were impaired, and there was no cash-basis interest income recognized. The following table presents the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the nine months ended September 30, 2018 and 2017:
The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at September 30, 2018:
(1) The Company acquired loans for which there was, at acquisition, both evidence of deterioration of credit quality since origination and the probability, at acquisition, that all contractually required payments would not be collected. These loans are classified as purchased credit impaired loans (“PCI loans”). The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at December 31, 2017:
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Schedule of changes in the balance of accretable yield discount for PCI loans | The following table presents the changes in the balance of the accretable yield discount for PCI loans for the three and nine months ended September 30, 2018 and 2017:
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Troubled debt restructurings | The following table presents loans by segment modified as TDRs that occurred during the first nine months of 2018 and 2017:
The following tables set forth the amounts and past due status of the Company’s TDRs at September 30, 2018 and December 31, 2017:
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Allowance for Loan Losses (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses activity | Activity in the allowance for loan losses for the three months ended September 30, 2018 and 2017 is summarized below:
Activity in the allowance for loan losses for the nine months ended September 30, 2018 and 2017 is summarized below:
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Financing receivable credit quality indicators | As of September 30, 2018 and December 31, 2017, the risk category of gross loans by segment was as follows:
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Goodwill and Other Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill and intangible assets | The balance of goodwill and other intangible assets for the periods presented were as follows:
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Future amortization expense | The estimated aggregate future amortization expense for intangible assets remaining as of September 30, 2018 was as follows:
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Deposits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of major classification of deposits | Deposit balances at September 30, 2018 and December 31, 2017 were as follows:
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List of Company's Brokered deposits | Brokered deposits at September 30, 2018 and December 31, 2017 were as follows:
1 Section 29 of the Federal Deposit Insurance Act was amended to except a capped amount of reciprocal deposits from treatment as brokered deposits for certain insured depository institutions, including the Bank. As a result, the Bank no longer reports its reciprocal deposits as brokered deposits. 2 CDARs are deposits generated through the certificate of deposit account registry service. 3 ICS are deposits generated through the insured cash sweep program. |
Borrowings (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | The Company’s borrowings and weighted average interest rates were as follows for the periods presented:
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Derivatives (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedges, Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of derivatives | Summary information as of September 30, 2018 and December 31, 2017 regarding these derivatives is presented below:
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Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | Actual income tax expense differs from the tax computed based on pre-tax income and the applicable statutory Federal tax rate for the following reasons:
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's stock option activity | The following table summarizes the activity in the Company’s active stock-based compensation plans for the nine months ended September 30, 2018:
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Schedule of stock-based compensation expense associated with stock options and non-vested stock awards | Stock-based compensation expense associated with stock options and non-vested stock awards and the related income tax benefit are presented below:
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Unrecognized stock-based compensation expense | Unrecognized stock-based compensation expense as of September 30, 2018 was as follows:
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Pension and Other Post-Retirement Benefits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net pension (benefit) expense and post-retirement expense | Total pension and other post-retirement benefits expense is comprised of the following for the periods presented below:
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Non-Interest Income and Other Non-Interest Expense (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Non-interest Expense | Other non-interest expense items for the three and nine months ended September 30, 2018 and 2017, respectively, are presented in the following table:
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Earnings Per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted earnings per share | The following is a summary of the calculation of earnings per common share (“EPS”):
(1) Represents incremental shares computed using the treasury stock method. (2) Anti-dilutive shares are not included in determining diluted EPS. There were no anti-dilutive shares in the three and nine months ended September 30, 2018 or September 30, 2017. |
Stockholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The following tables present actual and required capital ratios as of September 30, 2018 and December 31, 2017 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of September 30, 2018 and December 31, 2017 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered well-capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
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Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of off-balance-sheet financial instruments | The contractual or notional amounts of these instruments, which reflect the extent of the Company’s involvement in particular classes of off-balance sheet financial instruments, are summarized as follows:
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Schedule of future minimum lease payments due | Future minimum lease payments due under non-cancelable operating leases at September 30, 2018 were as follows:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair value on a recurring basis | A summary of such investment securities available for sale and derivatives at September 30, 2018 and December 31, 2017, respectively, measured at estimated fair value on a recurring basis, is as follows:
(1) Residential MBS are debt securities whose cash flows come from residential mortgage and consumer loans, such as mortgages and HELOCs. A residential MBS is comprised of a pool of mortgage loans created by financial institutions, including governmental agencies. The cash flows from each mortgage loan included in the pool are structured through a special purpose entity into various classes and tranches, which then issue securities backed by those cash flows to investors. (2) CMOs are debt securities that are collateralized by a specific pool of residential mortgage loans, in which the issuer of the CMOs can direct the payments of principal and interest received on the underlying collateral to achieve specific investor cash flow objectives. The Bank generally acquires planned-amortization class securities and CMOs with a sequential pay structure in order to manage the duration and extension risk inherent in these securities.
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Impaired loans measured at estimated fair value on nonrecurring basis | A summary of the classes with impaired loans at September 30, 2018 and December 31, 2017, respectively, is set forth below:
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Carrying amounts and estimated fair value of financial assets and liabilities | The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of September 30, 2018:
The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of December 31, 2017:
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Accumulated Other Comprehensive Loss (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Components of accumulated other comprehensive loss were as follows as of the dates shown below:
The following table presents the changes in each component of accumulated other comprehensive loss for the three months ended September 30, 2018 and 2017:
The following table presents the changes in each component of accumulated other comprehensive loss for the nine months ended September 30, 2018 and 2017:
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Securities - Sale of Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Available for Sale | ||||
Proceeds from sales | $ 0 | $ 5,015 | $ 117,810 | $ 15,247 |
Gross realized gains | 0 | 1 | 82 | 7 |
Gross realized losses | (3) | (22) | (5,910) | (281) |
Income tax benefit on realized net losses | (1) | (7) | (1,224) | (89) |
Held to Maturity | ||||
Proceeds from sales of securities held to maturity | 0 | 0 | 254 | 0 |
Gross realized loss | (53) | 0 | (74) | 0 |
Income tax expense on realized loss | $ (11) | $ 0 | $ (15) | $ 0 |
Securities - Securities Pledged for Borrowings (Details) - Collateral Pledged - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Total securities pledged | $ 2,397,514 | $ 1,551,287 |
Federal Home Loan Bank Borrowings | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale, pledged as collateral | 19,743 | 10,225 |
Held-to-maturity securities pledged as collateral | 39,443 | 35,047 |
Municipal Deposits | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale, pledged as collateral | 651,439 | 323,341 |
Held-to-maturity securities pledged as collateral | $ 1,686,889 | $ 1,182,674 |
Portfolio Loans - Accretable Yield Discount for PCI Loans (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||||
Balance at beginning of period | $ 21,711 | $ 10,877 | $ 45,582 | $ 11,117 |
Accretion of income | (4,027) | (2,412) | (10,578) | (4,612) |
Reclassification (to) from non-accretable difference | 1,056 | 1,412 | (1,192) | 3,372 |
Other, adjustments | 0 | 0 | (15,072) | 0 |
Balance at end of period | $ 18,740 | $ 9,877 | $ 18,740 | $ 9,877 |
Allowance for Loan Losses - Narrative (Details) - USD ($) |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Maximum loan balance for credit risk to be evaluated on a homogeneous basis | $ 750,000 | |
Loss | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Gross loans by segment | $ 0 | $ 0 |
Goodwill and Other Intangible Assets - Balance of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 1,609,772 | $ 1,579,891 |
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 135,409 | 153,191 |
Core deposits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 109,833 | 126,545 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 4,972 | 5,854 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 104 | 292 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | $ 20,500 | $ 20,500 |
Goodwill and Other Intangible Assets - Future Amortization Expense (Details) $ in Thousands |
Sep. 30, 2018
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2018 | $ 5,863 |
2019 | 19,181 |
2020 | 16,800 |
2021 | 15,104 |
2022 | 13,703 |
2023 | 12,322 |
Thereafter | 31,936 |
Total | $ 114,909 |
Deposits - Balances (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Deposits [Abstract] | ||
Non-interest bearing demand | $ 4,651,369 | $ 4,080,742 |
Interest bearing demand | 4,302,725 | 3,882,064 |
Savings | 2,470,949 | 2,758,642 |
Money market | 7,460,064 | 7,377,118 |
Certificates of deposit | 2,570,950 | 2,439,638 |
Total deposits | $ 21,456,057 | $ 20,538,204 |
Deposits - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Deposits [Abstract] | ||
Municipal deposits | $ 2,019,893 | $ 1,585,076 |
Deposits - Brokered Deposits (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
List of Company's Brokered deposits | ||
Brokered deposits | $ 946,937 | $ 1,104,214 |
Interest bearing demand | ||
List of Company's Brokered deposits | ||
Brokered deposits | 17,471 | 23,820 |
Money market | ||
List of Company's Brokered deposits | ||
Brokered deposits | 779,285 | 773,804 |
Money market - reciprocal deposits | ||
List of Company's Brokered deposits | ||
Brokered deposits | 0 | 102,259 |
CDARS and ICS one way | ||
List of Company's Brokered deposits | ||
Brokered deposits | $ 150,181 | $ 204,331 |
Derivatives - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivative Instruments and Hedges, Assets [Abstract] | ||
Cash Paid as STM | $ 15,131 | $ 3,523 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Efftective tax rate reconciliation: | |||||
Income before income tax expense | $ 146,821,000 | $ 66,444,000 | $ 421,305,000 | $ 185,939,000 | |
Tax at Federal statutory rate of 21% for 2018 and 35% for 2017 | 30,833,000 | 23,253,000 | 88,474,000 | 65,076,000 | |
State and local income taxes, net of Federal tax benefit | 7,330,000 | 2,531,000 | 21,284,000 | 7,302,000 | |
Tax exempt interest, net of disallowed interest | (4,970,000) | (5,213,000) | (14,435,000) | (12,487,000) | |
Bank owned life insurance income | (861,000) | (462,000) | (2,406,000) | (1,484,000) | |
Non-deductible acquisition related costs | 0 | 237,000 | 0 | 1,193,000 | |
Investments in qualified affordable housing projects | (401,000) | (139,000) | (2,903,000) | (416,000) | |
Stock-based compensation benefit | 0 | (1,000) | (441,000) | (807,000) | |
FDIC insurance premium limitation | 466,000 | 0 | 1,483,000 | 0 | |
Other, net | (5,226,000) | 1,386,000 | (2,514,000) | 1,243,000 | |
Actual income tax expense | $ 27,171,000 | $ 21,592,000 | $ 88,542,000 | $ 59,620,000 | |
Effective income tax rate | 18.50% | 32.50% | 21.00% | 32.10% | |
Federal statutory rate | 21.00% | 35.00% | |||
Net deferred tax asset | $ 85,431,000 | $ 85,431,000 | $ 97,333,000 | ||
Valuation allowance | 0 | 0 | 0 | ||
Unrecognized tax benefits | 0 | 0 | 0 | ||
Change in enacted tax rate, amount | $ 40,285,000 | ||||
Astoria Financial Corporation | |||||
Efftective tax rate reconciliation: | |||||
Purchase accounting adjustment, income tax | 6,214,000 | 6,214,000 | |||
Purchase accounting adjustment, goodwill | $ 6,214,000 | $ 6,214,000 |
Pension and Other Post-Retirement Benefits - Net Pension and Post-retirement Expense (Details) - UNITED STATES - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 2,121 | 0 | 6,364 | 0 |
Expected return on plan assets | (3,353) | 0 | (10,058) | 0 |
Net amortization and deferral | 0 | 0 | 0 | 0 |
Net periodic pension and other post-retirement (benefit) expense | (1,232) | 0 | (3,694) | 0 |
Other Post Retirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 20 | 0 | 62 | 0 |
Interest cost | 254 | 101 | 780 | 302 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Net amortization and deferral | 0 | 8 | 0 | 26 |
Net periodic pension and other post-retirement (benefit) expense | $ 274 | $ 109 | $ 842 | $ 328 |
Pension and Other Post-Retirement Benefits - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contributions to fund pension and other post retirement benefits | $ 41,825 | $ 13 | $ 42,500 | $ 109 | |
Other liabilities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Total pension and other post-retirement benefit plans liabilities | 43,867 | 43,867 | $ 89,965 | ||
Astoria Bank Pension Plan | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contributions to fund pension and other post retirement benefits | $ 41,510 | $ 41,510 |
Non-Interest Income and Other Non-Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Other Income and Expenses [Abstract] | ||||
Professional fees | $ 2,866 | $ 2,234 | $ 9,269 | $ 6,917 |
Advertising and promotion | 1,147 | 649 | 3,962 | 2,034 |
Telephone | 1,238 | 589 | 4,500 | 1,705 |
Operational losses | 791 | 130 | 2,945 | 642 |
Stationery & office supplies | 507 | 170 | 1,790 | 641 |
Insurance & surety bond premium | 1,299 | 841 | 2,680 | 2,065 |
Other | 5,325 | 3,734 | 14,534 | 11,072 |
Total other non-interest expense | $ 13,173 | $ 8,347 | $ 39,680 | $ 25,076 |
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Earnings Per Share [Abstract] | ||||
Net income available to common stockholders | $ 117,657 | $ 44,852 | $ 326,775 | $ 126,319 |
Weighted average common shares outstanding for computation of basic EPS (in shares) | 225,088,511 | 135,346,791 | 224,969,121 | 135,276,634 |
Common-equivalent shares due to the dilutive effect of stock options and unvested performance share grants (in shares) | 534,384 | 603,369 | 535,342 | 618,879 |
Weighted average common shares for computation of diluted EPS (in shares) | 225,622,895 | 135,950,160 | 225,504,463 | 135,895,513 |
EPS: | ||||
Basic (USD per share) | $ 0.52 | $ 0.33 | $ 1.45 | $ 0.93 |
Diluted (USD per share) | $ 0.52 | $ 0.33 | $ 1.45 | $ 0.93 |
Weighted average common shares that could be exercised that were anti-dilutive for the period (in shares) | 0 | 0 | 0 | 0 |
Stockholders' Equity - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Class of Stock [Line Items] | ||
Aggregate dividend capacity without prior regulatory approval | $ 324,008 | |
Shares available for repurchase program (in shares) | 10,000,000 | |
Stock repurchase program, percentage of stock outstanding authorized for repurchase | 4.40% | |
Sterling Bancorp | ||
Class of Stock [Line Items] | ||
Tier 2 capital | $ 139,429 | |
Shares repurchased under repurchase program (in shares) | 0 | 0 |
Sterling National Bank | ||
Class of Stock [Line Items] | ||
Tier 2 capital | $ 172,885 |
Recently Issued Accounting Standards Not Yet Adopted - (Details) - Accounting Standards Update 2016-02 - Pro Forma $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase in assets, for right-of uses assets, if new accounting standard was implemented | $ 90 |
Effect on regulatory capital ratios, if new accounting standard was implemented | 0.05% |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase in assets, for right-of uses assets, if new accounting standard was implemented | $ 110 |
Effect on regulatory capital ratios, if new accounting standard was implemented | 0.07% |
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