Hurt by higher funding costs, Sterling Bancorp in New York said its second-quarter net income fell 20% from a year earlier, to $4.9 million.
Earnings per share dropped 16%, to 26 cents, the $2 billion-asset Sterling said Friday.
Its loan portfolio grew 13.4%, to $1.14 billion, and net interest income edged up 0.5%, to $21.3 million, but having to pay higher rates on deposits partially offset its loan growth and the higher yield it is receiving on loans.
The average rate paid on interest-bearing funds rose to 3.41%, from 2.18% a year earlier. Total interest expenses rose 63%, to $10.9 million.
The net interest margin fell 13 basis points from a year earlier but rose 13 basis points from the first quarter, to 4.71%.
Louis J. Cappelli, Sterling's chairman and chief executive officer, attributed the margin increase, its first since the first quarter of last year, to organic growth across most business sectors and the recent integration of PL Services LP, now Sterling Resource Funding Corp. Sterling's shares rose 5.8%.
