Chronicle Journal: Finance

Sterling Bancorp Announces an Increase in Stock Repurchase Program and Agreement to Sell Residential Mortgage Loans

MONTEBELLO, N.Y., Dec. 20, 2018 (GLOBE NEWSWIRE) -- Sterling Bancorp (NYSE:  STL) (the “Company”), the parent company of Sterling National Bank (the “Bank”), today announced the following corporate actions related to the Company’s stock repurchase program (the “Repurchase Program”) and sale of residential mortgage loans.

Increase in Repurchase Program Authorization
On December 10, 2018, the Board of Directors increased the amount of shares authorized to be repurchased under the existing Repurchase Program to 20,000,000 shares of common stock, representing approximately 8.9% of the common shares issued by the Company excluding treasury stock. The Board previously approved the current Repurchase Program on February 27, 2018, which had authorized the repurchase of up to 10,000,000 shares of common stock.

As of December 18, 2018, the Company had repurchased a total of 7,314,771 shares in the fourth quarter of 2018 under the Repurchase Program.

Stock repurchases under the Repurchase Program will be made from time to time, on the open market or in privately negotiated transactions, at the discretion of Company management and in accordance with the limitations set forth in Rule 10b-18 of the Securities and Exchange Commission and other applicable legal requirements. The timing of these repurchases will depend on market conditions and other requirements. The Repurchase Program does not obligate the Company to repurchase any dollar amount or number of shares, and the program may be extended, modified, suspended, or discontinued at any time.

Sale of Residential Mortgage Loans
On December 17, 2018, the Bank entered into an agreement with a third-party under which the Bank has committed to sell fixed rate residential mortgage loans. As of November 30, 2018, the loans to be sold had an aggregate unpaid principal balance of $1.6 billion and a weighted average interest rate of 3.61%. The Bank expects the sale to be neutral to earnings and will use net proceeds to pay-off approximately $1.6 billion of wholesale borrowings with a weighted average interest rate of 2.75%. In connection with the loan sale, the Company estimates accretion income on acquired loans will be in a range of $60 million to $65 million in 2019. The Company anticipates the loan sale and reduction in borrowings will result in an increase of 12 to 15 basis points in net interest margin for 2019 excluding accretion income on acquired loans. The transaction is expected to close in February 2019.

Jack Kopnisky, President and Chief Executive Officer, commented, “These actions are consistent with the continued execution of our strategy, and will significantly strengthen our liquidity position, accelerate the ongoing transition of our balance sheet, and improve our profitability ratios. We will continue allocating our substantial capital and funding to investments where we can achieve the best risk-adjusted returns, which we anticipate will include organic growth in loans and deposits, loan portfolio acquisitions and share repurchases. We are well positioned to deliver sustainable growth in earnings per share in 2019 and beyond.” 

About Sterling Bancorp
Sterling Bancorp, whose principal subsidiary is Sterling National Bank, specializes 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. Sterling National Bank offers a complete line of commercial, business, and consumer banking products and services. For more information, visit the Sterling Bancorp website at

This release may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “target,” “estimate,” “forecast,” “project,” “continue,” “positions,” “prospects,” by future conditional verbs such as “will,” “would,” “should,” “could,” or “may,” or by variations of such words or by similar expressions.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. In addition to factors previously disclosed in reports filed with the Securities and Exchange Commission, the following factors, among others, could cause our actual results to differ materially from those contemplated by such forward-looking statements: difficulties and delays in integrating Astoria Financial Corporation’s and Advantage Funding Management Co., Inc.’s business or fully realizing cost savings and other benefits; business disruption; a failure to grow revenues faster than we grow expenses; a deterioration in general economic conditions, either nationally, internationally, or in our market areas, including extended declines in the real estate market and constrained financial markets; inflation; the effects of, and changes in, trade; changes in asset quality and credit risk; introduction, withdrawal, success and timing of business initiatives; capital management activities; customer disintermediation; and our success in managing those risks. Other factors that could cause our actual results to differ from those indicated in forward-looking statements are included in the “Risk Factors” section of our filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

Luis Massiani, SEVP & Chief Financial Officer 

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