C&I portfolio expands 18% at Sterling Bancorp

Third-quarter profit soared at Sterling Bancorp in Montebello, N.Y., thanks to strong growth in its commercial and industrial loan portfolio.

The $31 billion-asset company said Tuesday that it earned $44.9 million, up almost 20% from a year earlier. Its adjusted earnings per share of 35 cents were in line with the median of analysts' estimate compiled by FactSet Research Systems.

Total revenue rose almost 10% to $134.1 million.

Net interest income was $120.1 million, up more than 16%, while the net interest margin fell 12 basis points to 3.29%. This decrease was mainly attributed to a shift in the composition of the company’s earning assets as it purchased investment securities to reposition its investment portfolio for its purchase of Astoria Financial.

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Sterling said in March that it would pay $2.2 billion for Astoria in Lake Success, N.Y. The deal was completed in early October and should allow the bank to “further accelerate our strategy of building a high-performing regional bank with diversified asset, funding and revenue mix,” Jack Kopnisky, president and CEO of Sterling, said in a press release.

Gross total portfolio loans surged more than 14% to $10.5 billion as the commercial and industrial portfolio — which includes traditional C&I loans, asset-based lending, payroll finance, warehouse lending and other lines — jumped 18% to $4.8 billion. The provision for loan losses fell 9%, to $5 million.

Noninterest income fell about 10% to $14 million, partly from a decrease in mortgage banking fee income after the sale of the company’s residential mortgage origination business in the third quarter of last year.

Noninterest expenses totaled $62.6 million, up less than 1%, as occupancy and office operations costs increased 7% to $8.6 million. Merger-related expenses totaled $4.1 million for the third quarter.

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