New York-based Sterling Bancorp reported net income of $2.3 million, or $0.09 per diluted share, for the second quarter ended June 30, 2010, its highest level since the first quarter of 2009. For the same period in 2009, Sterling reported income of $0.1 million, or $0.01 per diluted share.

The company attributed its increasing profitability to a series of recent initiatives, including the acquisition and launch of complementary products, a capital raise in March 2010 that provided additional resources for growth, a continued sharp focus on meeting the needs of customers in its marketplace, and a disciplined approach to expense control.

Non-interest income rose 5.2% to $11.4 million, primarily driven by growth in Sterling's accounts receivable management, factoring and import trade finance fees.

Total loans held in portfolio were $1.24 billion at June 30, 2010, rising from $1.16 billion a year earlier.

Excluding lease financing receivables, which had a planned reduction in volume, loans held in portfolio increased 14.9% from a year ago. Sterling extended a significant level of new credit facilities during the first six months of 2010, while maintaining its traditional disciplined credit standards.

The portfolio exceeded $1.2 billion at June 30, 2010. The level of non-accrual loans decreased by $1.9 million compared with the second quarter of 2009.

The company has continued to experience an improvement in credit quality. The provision for loan losses declined to the lowest level of the past six quarters, at $5.5 million for the 2010 second quarter. Net charge-offs were $5.0 million for the 2010 second quarter, compared to $5.6 million a year ago. The allowance for loan losses as a percent of non-accrual loans was 109.8% at June 30, 2010, an improvement in coverage from 88.0% at June 30, 2009.

The level of non-accrual loans was $18.7 million at June 30, 2010, compared to $20.6 million a year earlier. The ratio of non-accrual loans to total loans was 1.46% at June 30, 2010, versus 1.69% at June 30, 2009.

"Our ongoing efforts to use our increased capital resources to support profitable growth resulted in higher earnings for the second quarter of 2010," said Louis J. Cappelli, Sterling's chairman and CEO. "Net income rose to the highest level of the past four quarters. Total assets reached a record $2.28 billion and deposits also have increased substantially. We have continued to grow our lending activities in a prudent and disciplined manner, in accordance with our traditional credit standards."

"Sterling is working diligently to build upon this solid performance, while continuing to meet the needs of our customers and prospects," said Cappelli. "Looking ahead, we have abundant capital and liquidity to respond to the vast opportunities we see in our marketplace, but are still in the early stages of prudently deploying that capital.

As a result, our current asset mix reflects a relatively high level of short-term, lower-yielding investment securities. As we continue to respond to the needs of quality borrowers, we would expect to shift that asset mix to loans, thus achieving higher yields."

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