Hudson Valley Holding in Yonkers, N.Y., swung to a profit as it prepares to sell itself to Sterling Bancorp in Montebello, N.Y.

The $3.1 billion-asset company earned $638,000 in the fourth quarter, compared to an $8.5 million loss a year earlier. Earnings of 3 a share missed the average estimate of analysts polled by Bloomberg by 13 cents.

Hudson Valley agreed in November to sell to the $7.3 billion-asset Sterling in a $539 million deal that is expected to close in the second quarter.

Shortly after the Sterling announcement, Hudson Valley agreed to sell its investment advisory unit, A.R. Schmeidler, to Pine Street Asset Management in New York. That transaction closed last month.

Lower expenses drove the fourth-quarter results. Noninterest expenses fell 36%, to $25.1 million, after the company recorded an $18.7 million goodwill impairment charge a year earlier.

Net interest income surged 21%, to $24.9 million. Hudson Valley's loan book increased by 18%, to $1.9 billion, on higher commercial-and-industrial lending. The net interest margin widened by 39 basis points, to 3.34%.

Fee-based income tumbled 18%, to $2.1 million, as the company recorded a $2 million loss on the sale of A.R. Schmeidler.

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