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.
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.