Sterling Banks, Inc. Reports First Quarter 2010 Results of Operations

MOUNT LAUREL, N.J., May 17 /PRNewswire-FirstCall/ -- Sterling Banks, Inc. (Nasdaq: STBK), the bank holding company of Sterling Bank, a locally focused, community oriented, full service commercial bank which operates through ten retail branches located in New Jersey's Burlington and Camden Counties, reported a before and after tax first quarter loss of $1,046,000, or $0.18 per share, on a basic and diluted basis.  For the first quarter of 2009, the Company had a net loss of $449,000, or $.08 per share, on a basic and diluted basis.    

Total assets of the Company were $369 million and $393 million as of March 31, 2010 and 2009, respectively, a decrease of $24 million, or 6%.  Loans outstanding totaled $296 million as of March 31, 2010, a decrease of $7 million, or 2%, from total loans of $303 million as of March 31, 2009.  Deposits totaled $331 million as of March 31, 2010, a decrease of $12 million, or 3%, from total deposits of $343 million as of March 31, 2009.  These changes reflect the continued efforts by management to reduce the level of risk on the Company's balance sheet.

For the quarter ended March 31, 2010, the Company's net interest income after the provision for loan losses was $2,458,000, a decrease of $37,000 over the same period in 2009, primarily as a result of a provision for loan losses of $550,000 in 2010 (compared to no provision in 2009) which was partially offset by a 77 basis point increase in the net interest margin.  Noninterest income for the quarter ended March 31, 2010 amounted to $172,000, a decrease of $47,000, or 21%, primarily as a result of a decrease in prepayment penalties for early loan payoffs and a decrease in late charges on loans.  Noninterest expenses increased $249,000, or 7%, for the three months ended March 31, 2010 as compared to the same period in 2009, primarily from an increase in FDIC insurance and an increase in loan workout related legal expenses.

Previously, on March 18, 2010, the Company announced that the Board of Directors approved an Agreement and Plan of Merger providing for the Company to merge with and into a subsidiary of Roma Financial Corporation.  Under the terms of the merger agreement, which has been approved by the boards of directors of both companies, Roma Financial will acquire all of the outstanding shares of the Company for a total purchase price of approximately $14.7 million in cash, or $2.52 per share (subject to adjustment) for each share of common stock outstanding.  The completion of the merger is subject to several conditions, including the receipt of shareholder and regulatory approval.  The Company will hold a special meeting of shareholders on June 8, 2010 to vote on the Agreement and Plan of Merger.  It is expected that the merger will be consummated in the third quarter of 2010.

Robert H. King, President and CEO of Sterling Banks, Inc., commented regarding the pending combination with Roma Financial; "This consolidation will provide significant benefits to our customers, including the availability of enhanced service offerings and broader geographic retail branch availability".

Sterling Banks, Inc. Consolidated Financial Highlights (unaudited) As of, and for the three months ended, March 31, 2010 and 2009
	Three Months Ended
	03/31/2010		03/31/2009
INCOME STATEMENT
Interest income	$ 4,472,000		$ 4,711,000
Interest expense	1,464,000		2,216,000
Net interest income	3,008,000		2,495,000
Provision for loan losses	550,000		-
Net interest income after
provision for loan losses	2,458,000		2,495,000
Noninterest income	172,000		219,000
Noninterest expenses	3,676,000		3,427,000
Loss before taxes	(1,046,000)		(713,000)
Income tax benefit	-		(264,000)
Net loss	$(1,046,000)		$  (449,000)
PER SHARE DATA
Basic and Diluted losses per share	$(0.18)		$(0.08)
Average shares outstanding -
Basic and Diluted	5,843,362		5,843,362
BALANCE SHEET
Assets
Cash & due from banks	$  10,347,000		$  8,525,000
Federal funds sold	16,101,000		16,327,000
Total investment securities	36,052,000		49,683,000
Restricted stock	1,730,000		2,448,000
Total loans	296,086,000		302,661,000
Allowance for loan losses	(9,235,000)		(8,380,000)
Other assets	18,077,000		22,228,000
Total assets	$369,158,000		$393,492,000
Liabilities
Total deposits	$330,849,000		$342,906,000
Total borrowings	20,436,000		22,186,000
Other liabilities	1,794,000		1,434,000
Total liabilities	353,079,000		366,526,000
Shareholders' equity
Common stock	11,687,000		11,687,000
Additional paid-in capital	29,860,000		29,786,000
Accumulated deficit	(25,679,000)		(14,728,000)
Accumulated other comprehensive income	211,000		221,000
Total shareholders' equity	16,079,000		26,966,000
Total liabilities and shareholders' equity	$369,158,000		$393,492,000
PERFORMANCE RATIOS
Book value per share	$2.75		$4.61
Tangible book value per share	$2.43		$4.23
Return on average assets	(1.14)%		(0.47)%
Return on average equity	(25.26)%		(6.76)%
Net interest margin	3.63%		2.86%

Sterling Banks, Inc. is a bank holding company which commenced operations in March 2007, with assets of $369 million as of March 31, 2010, and is headquartered in Mount Laurel Township, Burlington County.  Sterling Bank is a community bank which commenced operations in December 1990 with the purpose of serving consumers and small to medium-sized businesses in its market area.  Sterling Bank's main office is located in Mount Laurel, New Jersey, and its nine other Community Banking Centers are located in Burlington and Camden Counties in New Jersey.  The Bank's deposits are insured to the applicable regulatory limits per depositor by the Federal Deposit Insurance Corporation.  Sterling Bank is a member of the Federal Reserve System.  The common stock of Sterling Banks, Inc. is traded on the NASDAQ Capital Market under the symbol "STBK".  For additional information about Sterling Bank and Sterling Banks, Inc. visit our website at http://www.sterlingnj.com.

This news release may contain certain forward-looking statements, such as statements of the Company's plans, objectives, expectations, estimates and intentions.  Forward-looking statements may be identified by the use of words such as "expects," "subject," "believe," "will," "intends," "will be" or "would."  These statements are subject to change based on various important factors (some of which are beyond the Company's control).  Readers should not place undue reliance on any forward-looking statements (which reflect management's analysis only as of the date of which they are given).  These factors include general economic conditions, the ability of the Company to close the transaction with Roma Financial, trends in interest rates, the ability of our borrowers to repay their loans, the ability of the Company to manage the risk in its loan and investment portfolios, the ability of the Company to reduce noninterest expenses and increase net interest income, results of possible collateral collections and subsequent sales, and results of regulatory examinations, among other factors.  Sterling Banks, Inc. cautions that the foregoing list of important factors is not exclusive.  Readers should carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2009, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.

SOURCE Sterling Banks, Inc.

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