UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________ 
FORM 10-Q
______________________________ 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2016
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 001-35385
______________________________ 
STERLING BANCORP
(Exact Name of Registrant as Specified in its Charter)
______________________________ 
Delaware
 
80-0091851
(State or Other Jurisdiction of
 
(IRS Employer ID No.)
Incorporation or Organization)
 
 
 
 
 
400 Rella Boulevard, Montebello, New York
 
10901
(Address of Principal Executive Office)
 
(Zip Code)
(845) 369-8040
(Registrant’s Telephone Number including area code)
______________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer
 
x
  
Accelerated Filer
 
o
 
 
 
 
 
 
 
Non-Accelerated Filer
 
o
  
Smaller Reporting Company
 
o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  ¨    No  x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Classes of Common Stock
  
Shares Outstanding as of May 5, 2016
$0.01 per share
  
130,582,909



STERLING BANCORP AND SUBSIDIARIES
FORM 10-Q TABLE OF CONTENTS
QUARTERLY PERIOD ENDED MARCH 31, 2016
 
 
PART I. FINANCIAL INFORMATION
 
Item 1.
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
PART II. OTHER INFORMATION
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 


Table of Contents
STERLING BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited)
(Dollars in thousands, except share and per share data)



 
March 31,
 
December 31,

 
2016
 
2015
ASSETS:
 
 
 
Cash and due from banks
$
486,730

 
$
229,513

Securities:
 
 
 
Available for sale, at fair value
1,894,820

 
1,921,032

Held to maturity, at amortized cost (fair value of $973,826 and $734,079 at March 31, 2016 and December 31, 2015, respectively)
952,922

 
722,791

Total securities
2,847,742

 
2,643,823

Loans held for sale
27,237

 
34,110

Portfolio loans
8,286,163

 
7,859,360

Allowance for loan losses
(53,014
)
 
(50,145
)
Portfolio loans, net
8,233,149

 
7,809,215

Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock, at cost
118,330

 
116,758

Accrued interest receivable
33,392

 
31,531

Premises and equipment, net
62,432

 
63,362

Goodwill
696,600

 
670,699

Core deposit and other intangible assets
75,790

 
77,367

Bank owned life insurance
197,615

 
196,288

Other real estate owned
14,527

 
14,614

Other assets
71,812

 
68,672

Total assets
$
12,865,356

 
$
11,955,952

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
LIABILITIES:
 
 

Deposits
$
9,328,622

 
$
8,580,007

FHLB borrowings
1,444,817

 
1,409,885

Other borrowings (repurchase agreements)
23,571

 
16,566

Senior notes
98,996

 
98,893

Subordinated notes
108,124

 

Mortgage escrow funds
14,972

 
13,778

Other liabilities
148,121

 
171,750

Total liabilities
11,167,223

 
10,290,879

Commitments and Contingent liabilities (See Note 16. Commitments and Contingencies)

 

STOCKHOLDERS’ EQUITY:
 
 
 
Preferred stock (par value $0.01 per share; 10,000,000 shares authorized; none issued or outstanding)

 

Common stock (par value $0.01 per share; 190,000,000 shares authorized; 136,673,149 shares issued at March 31, 2016 and December 31, 2015; 130,548,989 and 130,006,926 shares outstanding at March 31, 2016 and December 31, 2015, respectively)
1,367

 
1,367

Additional paid-in capital
1,501,417

 
1,506,612

Treasury stock, at cost (6,124,160 shares at March 31, 2016 and 6,666,223 at December 31, 2015)
(70,142
)
 
(76,190
)
Retained earnings
261,332

 
245,408

Accumulated other comprehensive income (loss), net of tax expense (benefit) of $2,751 at March 31, 2016 and $(8,961) at December 31, 2015
4,159

 
(12,124
)
Total stockholders’ equity
1,698,133

 
1,665,073

Total liabilities and stockholders’ equity
$
12,865,356

 
$
11,955,952

See accompanying notes to consolidated financial statements.

3

Table of Contents
STERLING BANCORP AND SUBSIDIARIES
Consolidated Income Statements (unaudited)
(Dollars in thousands, except share and per share data)



 
Three months ended
 
March 31,
 
2016
 
2015
Interest and dividend income:
 
 
 
Loans and loan fees
$
89,034

 
$
55,271

Securities taxable
12,016

 
7,632

Securities non-taxable
3,879

 
2,867

Other earning assets
1,077

 
902

Total interest and dividend income
106,006

 
66,672

Interest expense:
 
 
 
Deposits
6,409

 
3,091

Borrowings
6,087

 
4,714

Total interest expense
12,496

 
7,805

Net interest income
93,510

 
58,867

Provision for loan losses
4,000

 
2,100

Net interest income after provision for loan losses
89,510

 
56,767

Non-interest income:
 
 
 
Accounts receivable management / factoring commissions and other fees
4,494

 
3,502

Mortgage banking income
2,002

 
3,157

Deposit fees and service charges
4,496

 
3,622

Net (loss) gain on sale of securities
(283
)
 
1,534

Bank owned life insurance
1,327

 
1,076

Investment management fees
1,124

 
360

Other
2,270

 
759

Total non-interest income
15,430

 
14,010

Non-interest expense:
 
 
 
Compensation and benefits
30,020

 
23,165

Stock-based compensation plans
1,540

 
1,109

Occupancy and office operations
9,282

 
6,580

Amortization of intangible assets
3,053

 
1,399

FDIC insurance and regulatory assessments
2,258

 
1,428

Other real estate owned expense (income), net
582

 
(37
)
Merger-related expense
265

 
2,455

Loss on extinguishment of FHLB borrowings
8,716

 

Other
13,215

 
9,822

Total non-interest expense
68,931

 
45,921

Income before income tax expense
36,009

 
24,856

Income tax expense
12,243

 
8,078

Net income
$
23,766

 
$
16,778

Weighted average common shares:
 
 
 
Basic
129,974,025

 
87,839,029

Diluted
130,500,975

 
88,252,768

Earnings per common share:
 
 
 
Basic
$
0.18

 
$
0.19

Diluted
0.18

 
0.19

See accompanying notes to consolidated financial statements.

4

Table of Contents
STERLING BANCORP AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (unaudited)
(Dollars in thousands)

 
Three months ended
 
March 31,
 
2016
 
2015
Net income
$
23,766

 
$
16,778

Other comprehensive income, before tax:
 
 
 
Change in unrealized holding gains on securities available for sale
26,352

 
10,378

Accretion of net unrealized loss on securities transferred to held to maturity
(74
)
 
539

Reclassification adjustment for net realized losses (gains) included in net income
283

 
(1,534
)
Change in the actuarial gain of defined benefit plan and post-retirement benefit plans
354

 
203

Total other comprehensive income, before tax
26,915

 
9,586

Deferred tax expense related to other comprehensive income
(10,632
)
 
(4,074
)
  Other comprehensive income, net of tax
16,283

 
5,512

Comprehensive income
$
40,049

 
$
22,290

See accompanying notes to consolidated financial statements.

5

Table of Contents
STERLING BANCORP AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
(Dollars in thousands, except per share data)


 
Number of
shares
 
Common
stock
 
Additional
paid-in
capital
 
Treasury
stock
 
Retained
earnings
 
Accumulated
other
comprehensive
(loss) income
 
Total
stockholders’
equity
Balance at January 1, 2015
83,927,572

 
$
912

 
$
858,489

 
$
(82,908
)
 
$
208,958

 
$
(10,251
)
 
$
975,200

Net income

 

 

 

 
16,778

 

 
16,778

Other comprehensive income

 

 

 

 

 
5,512

 
5,512

Stock option & other stock transactions, net
208,054

 

 
279

 
2,384

 
72

 

 
2,735

Restricted stock awards, net
85,905

 

 
6

 
994

 
132

 

 
1,132

Common equity issued, net of costs of issuance
6,900,000

 
69

 
84,990

 

 

 

 
85,059

Cash dividends declared ($0.07 per common share)

 

 

 

 
(5,873
)
 

 
(5,873
)
Balance at March 31, 2015
91,121,531

 
$
981

 
$
943,764

 
$
(79,530
)
 
$
220,067

 
$
(4,739
)
 
$
1,080,543

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2016
130,006,926

 
$
1,367

 
$
1,506,612

 
$
(76,190
)
 
$
245,408

 
$
(12,124
)
 
$
1,665,073

Net income

 

 

 

 
23,766

 

 
23,766

Other comprehensive income

 

 

 

 

 
16,283

 
16,283

Stock option & other stock transactions, net
74,797

 

 
202

 
807

 
(148
)
 

 
861

Restricted stock awards, net
467,266

 

 
(5,397
)
 
5,241

 
1,381

 

 
1,225

Cash dividends declared ($0.07 per common share)

 

 

 

 
(9,075
)
 

 
(9,075
)
Balance at March 31, 2016
130,548,989

 
$
1,367

 
$
1,501,417

 
$
(70,142
)
 
$
261,332

 
$
4,159

 
$
1,698,133

See accompanying notes to consolidated financial statements.

6

Table of Contents
STERLING BANCORP AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited)
(Dollars in thousands)


 
Three months ended
 
March 31,
 
2016
 
2015
Cash flows from operating activities:
 
 
 
Net income
$
23,766

 
$
16,778

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Provisions for loan losses
4,000

 
2,100

Loss (gain), net from write-downs and sales of other real estate owned
153

 
(487
)
Depreciation of premises and equipment
2,102

 
1,633

Asset write-downs, severance and retention compensation and other restructuring charges
2,485

 
312

Amortization of intangibles
3,053

 
1,399

Amortization of low income housing tax credit
48

 
50

Net loss (gain) on sale of securities
283

 
(1,534
)
Net gain on loans held for sale
(2,002
)
 
(3,157
)
Net amortization of premiums, net on securities
3,328

 
1,155

Net accretion of purchase discount and amortization of net deferred loan costs
(5,084
)
 
(790
)
Accretion of debt issuance costs and amortization of premium on borrowings, net
97

 
86

Restricted stock compensation expense
1,414

 
828

Stock option compensation expense
126

 
281

Originations of loans held for sale
(102,165
)
 
(137,538
)
Proceeds from sales of loans held for sale
111,040

 
111,155

Increase in cash surrender value of bank owned life insurance
(1,327
)
 
(1,076
)
Deferred income tax expense
6,214

 
2,516

Other adjustments (principally net changes in other assets and other liabilities)
(50,113
)
 
(8,926
)
Net cash (used in) operating activities
(2,582
)
 
(15,215
)
Cash flows from investing activities:
 
 
 
Purchases of securities:
 
 
 
Available for sale
(269,220
)
 
(237,602
)
Held to maturity
(242,428
)
 
(28,161
)
Proceeds from maturities, calls and other principal payments on securities:
 
 
 
Available for sale
44,908

 
41,017

Held to maturity
11,090

 
14,639

Proceeds from sales of securities available for sale
275,358

 
115,554

Loan originations, net
(121,428
)
 
(143,695
)
Proceeds from sale of loans held for investment
19,054

 
44,020

(Purchases) sales of FHLB and FRB stock, net
(1,572
)
 
6,573

Proceeds from sales of other real estate owned
376

 
997

Purchases of premises and equipment
(996
)
 
(334
)
Cash paid for acquisitions, net of cash received
(346,690
)
 
(24,670
)
Net cash (used in) investing activities
(631,548
)
 
(211,662
)

7

Table of Contents
STERLING BANCORP AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited)
(Dollars in thousands)


 
Three months ended
 
March 31,
 
2016
 
2015
Cash flows from financing activities:
 
 
 
Net increase in transaction, savings and money market deposits
689,379

 
310,430

Net increase in time deposits
59,236

 
33,191

Net increase (decrease) in short-term FHLB borrowings
205,000

 
(151,000
)
Advances of term FHLB borrowings
325,000

 
80,000

Repayments of term FHLB borrowings
(495,062
)
 
(75,059
)
Repayment of debt assumed in acquisition

 
(4,485
)
Net increase in other borrowings
7,005

 
15,399

Issuance of Bank subordinated notes
108,124

 

Net increase in mortgage escrow funds
1,194

 
1,638

Proceeds from stock option exercises
546

 
2,758

Equity capital raise, net of costs of issuance

 
85,059

Cash dividends paid
(9,075
)
 
(5,873
)
Net cash provided by financing activities
891,347

 
292,058

Net increase in cash and cash equivalents
257,217

 
65,181

Cash and cash equivalents at beginning of period
229,513

 
121,520

Cash and cash equivalents at end of period
$
486,730

 
$
186,701

Supplemental cash flow information:
 
 
 
  Interest payments
$
14,598

 
$
9,376

  Income tax payments
17,179

 
17,808

Real estate acquired in settlement of loans
442

 
2,874

Loans transferred from held for investment to held for sale
19,054

 
44,020

 
 
 
 
Acquisitions:
 
 
 
Non-cash assets acquired:
 
 
 
Total loans, net
320,447

 
22,307

Accrued interest receivable
1,443

 

Goodwill
25,698

 
11,931

Customer list
1,500

 
8,950

Premises and equipment, net
176

 
219

Other assets
2,265

 
56

Total non-cash assets acquired
351,529

 
43,463

Liabilities assumed:
 
 
 
Other liabilities
4,839

 
19,045

Total liabilities assumed
$
4,839

 
$
19,045

Net non-cash assets acquired
346,690

 
24,418

Cash and cash equivalents received in acquisitions
4,762

 
252

Total consideration paid
$
351,452

 
$
24,670

The Company completed the NSBC Acquisition on March 31, 2016 and completed the acquisition of Damian Services Corporation on February 27, 2015. These transactions are included in the acquisitions portion of the statement of cash flows for the three months ended March 31, 2016 and 2015, respectively. See Note 2. “Acquisitions” for additional information.
See accompanying notes to consolidated financial statements.

8

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 


(1) Basis of Financial Statement Presentation

(a) Nature of Operations
Sterling Bancorp (the “Company”) is a Delaware corporation, a bank holding company and a financial holding company headquartered in Montebello, New York, that owns all of the outstanding shares of common stock of Sterling National Bank (the “Bank”), its principal subsidiary. The Bank is a full-service regional bank specializing 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.

(b) Basis of Presentation
The consolidated financial statements in this Quarterly Report on Form 10-Q include the accounts of the Company and all other entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and financial reporting policies the Company follows conform, in all material respects, to accounting principles generally accepted in the United States (“GAAP”) and to general practices within the banking industry, which includes regulatory reporting instructions.

The consolidated financial statements in this Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm, but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations. All such adjustments were of a normal and recurring nature. The consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2015, included in our Annual Report on Form 10-K filed with the SEC on February 29, 2016 (the “2015 Form 10-K”). Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period. Certain items in prior financial statements have been reclassified to conform to the current presentation.

(c) Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, expense and contingencies at the date of the financial statements. Actual results could differ significantly from these estimates. The allowance for loan losses and the status of contingencies are particularly subject to change.

(d) Merger with Hudson Valley Holding Corp.
On June 30, 2015, Hudson Valley Holding Corp. (“HVHC”) merged with and into the Company (the “HVB Merger”). In connection with the merger, Hudson Valley Bank, the principal subsidiary of HVHC, also merged with and into the Bank.

(e) Merger with Sterling Bancorp
On October 31, 2013, Provident New York Bancorp (“Legacy Provident”) merged with legacy Sterling Bancorp (“Legacy Sterling”). In connection with the merger, the following corporate actions occurred:

Legacy Sterling merged with and into Legacy Provident.
Legacy Provident was the accounting acquirer and the surviving entity.
Legacy Provident changed its legal entity name to Sterling Bancorp.
Sterling National Bank merged into Provident Bank.
Provident Bank changed its legal entity name to Sterling National Bank.

We refer to the merger with Legacy Sterling as the “Provident Merger.”



9

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

(2) Acquisitions
NSBC Acquisition
On March 31, 2016, the Bank acquired 100% of the outstanding equity interests of NewStar Business Credit LLC, a Delaware limited liability company (“NSBC” and the “NSBC Acquisition”). NSBC is a provider of asset-based lending solutions to middle market commercial clients. NSBC’s loans were $320,447 on the acquisition date and consist of 100% floating-rate assets. The Bank paid a premium on the balance of gross loans receivable acquired of 5.90%, or $18,906. The Bank assumed $4,838 of liabilities, which consisted mainly of cash collateral on loans outstanding. The Bank recognized a customer list intangible asset of $1,500 that is being amortized over its 24 month estimated life and $25,698 of goodwill. The Bank recorded a $1,500 restructuring charge consisting mainly of retention and severance compensation, IT contract terminations and professional fees.

HVB Merger
On June 30, 2015, the Company completed the HVB Merger. Under the terms of the HVB Merger agreement, HVHC shareholders received 1.92 shares of the Company’s common stock for each share of HVHC common stock, which resulted in the issuance of 38,525,154 shares. Based on the Company’s closing stock price of $14.63 per share on June 29, 2015, the aggregate consideration paid to HVHC shareholders was $566,307, which, in accordance with the HVB Merger agreement, also included the in-the-money cash value of outstanding HVHC stock options, the fair value of outstanding HVHC restricted stock awards and cash in lieu of fractional shares. Consistent with the Company’s strategy, the primary reason for the HVB Merger was the expansion of the Company’s geographic footprint in the greater New York metropolitan region and beyond.

The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their fair values as of June 30, 2015, based on management’s best estimate and using the information available as of the HVB Merger date. The application of the acquisition method of accounting resulted in the recognition of goodwill of $269,757 and a core deposit intangible of $33,839.  As of June 30, 2015, HVHC had assets with a net book value of approximately $288,208, including loans with a net book value of approximately $1,816,767, and deposits with a net book value of approximately $3,160,746. The table below summarizes the amounts recognized as of the HVB Merger date for each major class of assets acquired and liabilities assumed, the estimated fair value adjustments and the amounts recorded in the Company’s financial statements at fair value at the HVB Merger date:
Consideration paid through Sterling Bancorp common stock issued to HVHC shareholders
$
566,307

 
HVHC net book value
 
Fair value adjustments
 
As recorded at acquisition
Cash and cash equivalents
$
878,988

 
$

 
$
878,988

Investment securities
713,625

 
217

 (a)
713,842

Loans
1,816,767

 
(24,248
)
 (b)
1,792,519

Federal Reserve Bank stock
5,830

 

 
5,830

Bank owned life insurance
44,231

 

 
44,231

Premises and equipment
11,918

 
4,925

 (c)
16,843

Accrued interest receivable
7,392

 

 
7,392

Core deposits and other intangibles

 
33,839

 (d)
33,839

Other real estate owned
222

 

 
222

Other assets
32,639

 
(7,931
)
 (e)
24,708

Deposits
(3,160,746
)
 

 
(3,160,746
)
Other borrowings
(25,366
)
 

 
(25,366
)
Other liabilities
(37,292
)
 
1,540

 (f)
(35,752
)
Total identifiable net assets
$
288,208

 
$
8,342

 
$
296,550

 
 
 
 
 
 
Goodwill recorded in the HVB Merger
 
 
 
 
$
269,757

Explanation of certain fair value related adjustments:

10

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

(a)
Represents the fair value adjustment on investment securities held to maturity.
(b)
Represents the elimination of HVHCs allowance for loan losses and an adjustment of the net book value of loans to estimated fair value, which includes an interest rate mark and credit mark adjustment.
(c)
Represents an adjustment to reflect the fair value of HVHC owned real estate as determined by independent appraisals, which will be amortized on a straight-line basis over the estimated useful lives of the individual assets.
(d)
Represents intangible assets recorded to reflect the fair value of core deposits. The core deposit asset was recorded as an identifiable intangible asset and will be amortized on an accelerated basis over the estimated average life of the deposit base.
(e)
Represents an adjustment in net deferred tax assets resulting from the fair value adjustments related to the acquired assets, liabilities assumed and identifiable intangibles recorded.
(f)
Represents the elimination of HVHC’s deferred rent liability.

The fair values for loans acquired from HVB were estimated using cash flow projections based on the remaining maturity and repricing terms. Cash flows were adjusted by estimating future credit losses and the rate of prepayments. Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans. For collateral dependent loans with deteriorated credit quality, fair value was estimated by analyzing the value of the underlying collateral, assuming the fair values of the loans were derived from the eventual sale of the collateral. These values were discounted using market derived rates of return, with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral. There was no carryover of HVHC’s allowance for loan losses associated with the loans that were acquired, as the loans were initially recorded at fair value on the date of the HVB Merger.

Acquired loan portfolio data in the HVB Merger is presented below:
 
Fair value of acquired loans at acquisition date
 
Gross contractual amounts receivable at acquisition date
 
Best estimate at acquisition date of contractual cash flows not expected to be collected
Acquired loans with evidence of deterioration since origination
$
96,973

 
$
122,104

 
$
19,024

Acquired loans with no evidence of deterioration since origination
1,695,546

 
1,974,740

 
37,520


The core deposit intangible asset recognized is being amortized over its estimated useful life of approximately 10 years utilizing the sum-of-the-years digits method. Other intangibles consist of below market rents, which are amortized over the remaining life of each lease using the straight-line method.

Goodwill is not amortized for book purposes; however, it is reviewed at least annually for impairment and is not deductible for tax purposes.
The fair value of land, buildings and equipment was estimated using appraisals. Buildings will be amortized over their estimated useful lives of approximately 30 years. Improvements and equipment will be amortized or depreciated over their estimated useful lives ranging from one to five years.
The fair value of retail demand and interest bearing deposit accounts was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. The fair value of time deposits was estimated by discounting the contractual future cash flows using market rates offered for time deposits of similar remaining maturities. Management concluded the carrying value was an appropriate estimate of fair value for these deposits.
Direct acquisition and other charges incurred in connection with the HVB Merger were expensed as incurred and totaled $0 and $645 for the three months ended March 31, 2016 and 2015, respectively. These expenses were mainly for severance compensation and were recorded in “Merger-related expenses” on the consolidated income statements.
FCC Acquisition
On May 7, 2015, the Bank acquired a factoring portfolio from FCC, LLC, a subsidiary of First Capital Holdings, Inc. (“FCC”), with an outstanding factoring receivables balance of approximately $44,500. The total consideration included a premium of $1,000 in addition to the outstanding receivables balance.

11

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 


Damian Acquisition
On February 27, 2015, the Bank acquired 100% of the outstanding common stock of Damian Services Corporation (“Damian”) for total consideration of $24,670 in cash. Damian is a payroll services provider located in Chicago, Illinois. In connection with the acquisition, the Bank acquired $22,307 of outstanding payroll finance loans and assumed $14,560 of liabilities. The Bank recognized a customer list intangible asset of $8,950 that is being amortized over its 16 year estimated life, and $11,930 of goodwill. The Bank also recognized a $1,500 restructuring charge consisting mainly of retention and severance compensation and asset write-downs related to the consolidation of Damian’s operations, and approximately $300 of legal fees.


(3) Securities

A summary of amortized cost and estimated fair value of securities as of March 31, 2016 and December 31, 2015 is presented below. The term “Residential MBS” refers to residential mortgage-backed securities and the term “CMO” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 17. “Fair Value Measurements”.    
 
March 31, 2016
 
Available for Sale
 
Held to Maturity
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
 
Amortized
cost
 
Gross
unrecognized
gains
 
Gross
unrecognized
losses
 
Fair
value
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
1,400,401

 
$
16,853

 
$
(303
)
 
$
1,416,951

 
$
247,094

 
$
5,599

 
$
(72
)
 
$
252,621

CMO/Other MBS
74,526

 
515

 
(369
)
 
74,672

 
47,687

 
496

 
(122
)
 
48,061

Total residential MBS
1,474,927

 
17,368

 
(672
)
 
1,491,623

 
294,781

 
6,095

 
(194
)
 
300,682

Other securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
83,575

 
138

 
(3
)
 
83,710

 
104,292

 
4,382

 
(9
)
 
108,665

Corporate
91,325

 
317

 
(4,463
)
 
87,179

 
25,192

 

 
(319
)
 
24,873

State and municipal
221,146

 
2,780

 
(409
)
 
223,517

 
522,657

 
11,675

 
(1,036
)
 
533,296

Other
8,781

 
10

 

 
8,791

 
6,000

 
310

 

 
6,310

Total other securities
404,827

 
3,245

 
(4,875
)
 
403,197

 
658,141

 
16,367

 
(1,364
)
 
673,144

Total securities
$
1,879,754

 
$
20,613

 
$
(5,547
)
 
$
1,894,820

 
$
952,922

 
$
22,462

 
$
(1,558
)
 
$
973,826



12

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

 
December 31, 2015
 
Available for Sale
 
Held to Maturity
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
 
Amortized
cost
 
Gross
unrecognized
gains
 
Gross
unrecognized
losses
 
Fair
value
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
1,222,912

 
$
2,039

 
$
(7,089
)
 
$
1,217,862

 
$
252,760

 
$
1,857

 
$
(1,214
)
 
$
253,403

CMO/Other MBS
79,430

 
76

 
(1,133
)
 
78,373

 
49,842

 
87

 
(619
)
 
49,310

Total residential MBS
1,302,342

 
2,115

 
(8,222
)
 
1,296,235

 
302,602

 
1,944

 
(1,833
)
 
302,713

Other securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Federal agencies
85,124

 
7

 
(864
)
 
84,267

 
104,135

 
2,458

 
(635
)
 
105,958

Corporate
321,630

 
522

 
(7,964
)
 
314,188

 
25,241

 
11

 
(200
)
 
25,052

State and municipal
187,399

 
2,187

 
(551
)
 
189,035

 
285,813

 
9,327

 
(134
)
 
295,006

Trust preferred
27,928

 
589

 

 
28,517

 

 

 

 

Other
8,781

 
9

 

 
8,790

 
5,000

 
350

 

 
5,350

Total other securities
630,862

 
3,314

 
(9,379
)
 
624,797

 
420,189

 
12,146

 
(969
)
 
431,366

Total securities
$
1,933,204

 
$
5,429

 
$
(17,601
)
 
$
1,921,032

 
$
722,791

 
$
14,090

 
$
(2,802
)
 
$
734,079


During the quarter ended March 31, 2016, the Company sold all of the trust preferred securities it held at December 31, 2015.

The amortized cost and estimated fair value of securities at March 31, 2016 are presented below by contractual maturity. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential MBS are shown separately since they are not due at a single maturity date.
 
March 31, 2016
 
Available for sale
 
Held to maturity
 
Amortized
cost
 
Fair
value
 
Amortized
cost
 
Fair
value
Remaining period to contractual maturity:
 
 
 
 
 
 
 
One year or less
$
17,162

 
$
17,194

 
$
13,059

 
$
13,160

One to five years
214,895

 
213,978

 
52,569

 
54,617

Five to ten years
113,074

 
112,148

 
219,829

 
227,552

Greater than ten years
59,696

 
59,877

 
372,684

 
377,815

Total securities with a stated maturity date
404,827

 
403,197

 
658,141

 
673,144

Residential MBS
1,474,927

 
1,491,623

 
294,781

 
300,682

Total securities
$
1,879,754

 
$
1,894,820

 
$
952,922

 
$
973,826

 
Sales of securities for the periods indicated below were as follows:
 
For the three months ended
 
March 31,
 
2016
 
2015
Available for sale:
 
 
 
Proceeds from sales
$
275,358

 
$
115,554

Gross realized gains
1,562

 
1,663

Gross realized losses
(1,845
)
 
(129
)
Income tax (benefit) expense on realized net gains
(96
)
 
499



13

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

At March 31, 2016 and December 31, 2015, there were no holdings of securities of any one issuer, other than the U.S. federal government and its agencies, in an amount greater than 10% of stockholders’ equity.
The following table summarizes securities available for sale with unrealized losses, segregated by the length of time in a continuous unrealized loss position for the periods presented below:
 
Continuous unrealized loss position
 
 
 
 
 
Less than 12 months
 
12 months or longer
 
Total
 
Fair
value
 
Unrealized losses
 
Fair
value
 
Unrealized losses
 
Fair
value
 
Unrealized losses
Available for sale
 
 
 
 
 
 
 
 
 
 
 
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
46,003

 
$
(280
)
 
$
3,716

 
$
(23
)
 
$
49,719

 
$
(303
)
CMO/Other MBS
27,077

 
(359
)
 
1,563

 
(10
)
 
28,640

 
(369
)
Total residential MBS
73,080

 
(639
)
 
5,279

 
(33
)
 
78,359

 
(672
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
206

 

 
2,998

 
(3
)
 
3,204

 
(3
)
Corporate
31,810

 
(1,880
)
 
31,304

 
(2,583
)
 
63,114

 
(4,463
)
State and municipal
5,857

 
(122
)
 
59,317

 
(287
)
 
65,174

 
(409
)
Total other securities
37,873

 
(2,002
)
 
93,619

 
(2,873
)
 
131,492

 
(4,875
)
Total
$
110,953

 
$
(2,641
)
 
$
98,898

 
$
(2,906
)
 
$
209,851

 
$
(5,547
)
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
18,983

 
$
(528
)
 
$
854,491

 
$
(6,561
)
 
$
873,474

 
$
(7,089
)
CMO/Other MBS
23,682

 
(717
)
 
41,946

 
(416
)
 
65,628

 
(1,133
)
Total residential MBS
42,665

 
(1,245
)
 
896,437

 
(6,977
)
 
939,102

 
(8,222
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
14,933

 
(260
)
 
57,886

 
(604
)
 
72,819

 
(864
)
Corporate
19,257

 
(715
)
 
236,048

 
(7,249
)
 
255,305

 
(7,964
)
State and municipal
3,439

 
(27
)
 
42,924

 
(524
)
 
46,363

 
(551
)
Total other securities
37,629

 
(1,002
)
 
336,858

 
(8,377
)
 
374,487

 
(9,379
)
Total
$
80,294

 
$
(2,247
)
 
$
1,233,295

 
$
(15,354
)
 
$
1,313,589

 
$
(17,601
)


14

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

The following table summarizes securities held to maturity with unrecognized losses, segregated by the length of time in a continuous unrecognized loss position for the periods presented below:
 
Continuous unrecognized loss position
 
 
 
 
 
Less than 12 months
 
12 months or longer
 
Total
 
Fair
value
 
Unrecognized losses
 
Fair
value
 
Unrecognized losses
 
Fair
value
 
Unrecognized losses
Held to maturity
 
 
 
 
 
 
 
 
 
 
 
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
   Agency-backed
$
6,568

 
$
(69
)
 
$
1,261

 
$
(3
)
 
$
7,829

 
$
(72
)
   CMO/Other MBS
7,984

 
(61
)
 
8,684

 
(61
)
 
16,668

 
(122
)
Total residential MBS
14,552

 
(130
)
 
9,945

 
(64
)
 
24,497

 
(194
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
9,991

 
(9
)
 

 

 
9,991

 
(9
)
Corporate

 

 
24,872

 
(319
)
 
24,872

 
(319
)
State and municipal
2,223

 
(24
)
 
158,959

 
(1,012
)
 
161,182

 
(1,036
)
Total other securities
12,214

 
(33
)
 
183,831

 
(1,331
)
 
196,045

 
(1,364
)
Total
$
26,766

 
$
(163
)
 
$
193,776

 
$
(1,395
)
 
$
220,542

 
$
(1,558
)
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$

 
$

 
$
132,585

 
$
(1,214
)
 
$
132,585

 
$
(1,214
)
CMO/Other MBS
5,960

 
(156
)
 
40,033

 
(463
)
 
45,993

 
(619
)
Total residential MBS
5,960

 
(156
)
 
172,618

 
(1,677
)
 
178,578

 
(1,833
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
14,642

 
(358
)
 
9,723

 
(277
)
 
24,365

 
(635
)
Corporate

 

 
20,039

 
(200
)
 
20,039

 
(200
)
State and municipal
2,562

 
(48
)
 
12,989

 
(86
)
 
15,551

 
(134
)
Total other securities
17,204

 
(406
)
 
42,751

 
(563
)
 
59,955

 
(969
)
Total
$
23,164

 
$
(562
)
 
$
215,369

 
$
(2,240
)
 
$
238,533

 
$
(2,802
)


At March 31, 2016, a total of 131 available for sale securities were in a continuous unrealized loss position for less than 12 months and 36 securities were in a continuous unrealized loss position for 12 months or longer. Declines in the fair value of held to maturity and available for sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The amount of the impairment related to other factors is recognized in other comprehensive income. In estimating other than temporary impairment (“OTTI”) losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost; (ii) the financial condition and near-term prospects of the issuer; and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in cost.

Management has the ability and intent to hold the securities classified as held to maturity in the table above until they mature, at which time the Company anticipates it will receive full value for the securities. Furthermore, as of March 31, 2016, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. As of March 31, 2016, management believes the impairments detailed in the table above are temporary.

15

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

Securities pledged for borrowings at FHLB and other institutions, and securities pledged for municipal deposits and other purposes were as follows for the periods presented below:
 
March 31,
 
December 31,

 
2016
 
2015
Available for sale securities pledged for borrowings, at fair value
$
95,317

 
$
101,994

Available for sale securities pledged for municipal deposits, at fair value
975,592

 
849,186

Available for sale securities pledged for customer back-to-back swaps, at fair value
4,323

 
1,839

Held to maturity securities pledged for borrowings, at amortized cost
2,500

 
206,337

Held to maturity securities pledged for municipal deposits, at amortized cost
369,334

 
327,589

Total securities pledged
$
1,447,066

 
$
1,486,945


(4) Portfolio Loans

The composition of the Company’s loan portfolio, excluding loans held for sale, was the following for the periods presented below:
 
March 31,
 
December 31,
 
2016
 
2015
Commercial:
 
 
 
Commercial and industrial:
 
 
 
       Traditional commercial & industrial (“C&I”)
$
2,003,839

 
$
1,681,704

Payroll finance
199,119

 
221,831

Warehouse lending
341,790

 
387,808

Factored receivables
215,015

 
208,382

Equipment financing
656,775

 
631,303

Total C&I
3,416,538

 
3,131,028

Commercial mortgage:
 
 
 
       Commercial real estate
2,790,145

 
2,733,351

Multi-family
886,069

 
796,030

       Acquisition, development & construction (“ADC”)
179,517

 
186,398

Total commercial mortgage
3,855,731

 
3,715,779

Total commercial
7,272,269

 
6,846,807

Residential mortgage
718,733

 
713,036

Consumer
295,161

 
299,517

Total portfolio loans
8,286,163

 
7,859,360

Allowance for loan losses
(53,014
)
 
(50,145
)
Total portfolio loans, net
$
8,233,149

 
$
7,809,215


Total portfolio loans include net deferred loan origination costs of $1,612 at March 31, 2016, and $2,029 at December 31, 2015.

At March 31, 2016 and December 31, 2015, the Company pledged loans totaling $2,205,834 and $2,050,982, respectively, to the FHLB as collateral for certain borrowing arrangements. See Note 8. “Borrowings”.


16

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

The following tables set forth the amounts and status of the Company’s loans, troubled debt restructurings (“TDRs”) and non-performing loans at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
Current
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
1,969,677

 
$
1,294

 
$
2,630

 
$
478

 
$
29,760

 
$
2,003,839

Payroll finance
198,805

 
39

 
59

 
159

 
57

 
199,119

Warehouse lending
341,790

 

 

 

 

 
341,790

Factored receivables
214,803

 

 

 

 
212

 
215,015

Equipment financing
651,995

 
1,276

 
926

 

 
2,578

 
656,775

Commercial real estate
2,767,800

 
1,130

 
3,074

 
332

 
17,809

 
2,790,145

Multi-family
882,028

 

 

 

 
4,041

 
886,069

ADC
175,501

 

 

 

 
4,016

 
179,517

Residential mortgage
694,104

 
6,092

 
684

 

 
17,853

 
718,733

Consumer
285,054

 
1,276

 
688

 
33

 
8,110

 
295,161

Total portfolio loans
$
8,181,557

 
$
11,107

 
$
8,061

 
$
1,002

 
$
84,436

 
$
8,286,163

Total TDRs included above
$
14,918

 
$
1,116

 
$

 
$

 
$
5,810

 
$
21,844

Non-performing loans:
 
 
 
 
 
 
 
 
 
 
 
Loans 90+ days past due and still accruing
 
 
 
 
 
 
 
 
 
 
$
1,002

Non-accrual loans
 
 
 
 
 
 
 
 
 
 
84,436

Total non-performing loans
 
 
 
 
 
 
 
 


 
$
85,438

 
December 31, 2015
 
Current
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
1,630,635

 
$
9,380

 
$
31,060

 
$
487

 
$
10,142

 
$
1,681,704

Payroll finance
221,394

 

 
349

 
88

 

 
221,831

Warehouse lending
387,808

 

 

 

 

 
387,808

Factored receivables
208,162

 

 

 

 
220

 
208,382

Equipment financing
627,056

 
1,088

 
1,515

 

 
1,644

 
631,303

Commercial real estate
2,702,671

 
7,417

 
2,521

 

 
20,742

 
2,733,351

Multi-family
791,828

 
2,485

 

 

 
1,717

 
796,030

ADC
182,615

 

 

 
83

 
3,700

 
186,398

Residential mortgage
686,445

 
6,014

 
897

 

 
19,680

 
713,036

Consumer
286,339

 
4,950

 
320

 
16

 
7,892

 
299,517

Total portfolio loans
$
7,724,953

 
$
31,334

 
$
36,662

 
$
674

 
$
65,737

 
$
7,859,360

Total TDRs included above
$
13,047

 
$
654

 
$

 
$

 
$
8,591

 
$
22,292

Non-performing loans:
 
 
 
 
 
 
 
 
 
 
 
Loans 90+ days past due and still accruing
 
 
 
 
 
 
 
 
 
 
$
674

Non-accrual loans
 
 
 
 
 
 
 
 
 
 
65,737

Total non-performing loans
 
 
 
 
 
 
 
 
 
 
$
66,411



17

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

The following table provides additional analysis of the Company’s non-accrual loans at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
December 31, 2015
 
Recorded investment Non-accrual loans
 
Recorded investment PCI non-accrual loans
 
Recorded investment total non-accrual loans
 
Unpaid principal balance non-accrual loans
 
Recorded investment Non-accrual loans
 
Recorded investment PCI non-accrual loans
 
Recorded investment total non-accrual loans
 
Unpaid principal balance non-accrual loans
C&I
$
24,629

 
$
5,131

 
$
29,760

 
$
30,107

 
$
4,314

 
$
5,828

 
$
10,142

 
$
10,503

Payroll finance
57

 

 
57

 
57

 

 

 

 

Factored receivables
212

 

 
212

 
212

 
220

 

 
220

 
220

Equipment financing
2,578

 

 
2,578

 
2,578

 
1,644

 

 
1,644

 
1,644

Commercial real estate
11,899

 
5,910

 
17,809

 
21,731

 
13,119

 
7,623

 
20,742

 
23,678

Multi-family
4,041

 

 
4,041

 
4,041

 
1,717

 

 
1,717

 
1,837

ADC
4,016

 

 
4,016

 
4,146

 
3,700

 

 
3,700

 
3,829

Residential mortgage
12,267

 
5,586

 
17,853

 
24,544

 
13,683

 
5,997

 
19,680

 
24,386

Consumer
7,285

 
825

 
8,110

 
9,516

 
7,315

 
577

 
7,892

 
9,404

 
$
66,984

 
$
17,452

 
$
84,436

 
$
96,932

 
$
45,712

 
$
20,025

 
$
65,737

 
$
75,501


There were no non-accrual warehouse lending loans at March 31, 2016 or December 31, 2015.

When the ultimate collectibility of the total principal of an impaired loan is in doubt and the loan is on non-accrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectibility of the total principal of an impaired loan is not in doubt and the loan is on non-accrual status, contractual interest is credited to interest income when received, under the cash basis method.

At March 31, 2016 and December 31, 2015, the recorded investment of residential mortgage loans that were formally in process of foreclosure was $9,887 and $9,638, respectively, which are included in non-accrual residential mortgage loans above.

The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at March 31, 2016:
 
Loans evaluated by segment
 
Allowance evaluated by segment
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Purchased credit impaired loans
 
Total
 loans
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Total allowance for loan losses
C&I
$
27,870

 
$
1,924,254

 
$
51,715

 
$
2,003,839

 
$

 
$
14,268

 
$
14,268

Payroll finance

 
199,119

 

 
199,119

 

 
1,546

 
1,546

Warehouse lending

 
341,790

 

 
341,790

 

 
520

 
520

Factored receivables

 
215,015

 

 
215,015

 

 
1,407

 
1,407

Equipment financing
2,192

 
654,583

 

 
656,775

 

 
5,393

 
5,393

Commercial real estate
13,815

 
2,728,143

 
48,187

 
2,790,145

 

 
15,770

 
15,770

Multi-family
883

 
880,716

 
4,470

 
886,069

 

 
2,996

 
2,996

ADC
8,595

 
166,204

 
4,718

 
179,517

 

 
2,157

 
2,157

Residential mortgage
515

 
711,229

 
6,989

 
718,733

 

 
4,850

 
4,850

Consumer
1,497

 
292,128

 
1,536

 
295,161

 

 
4,107

 
4,107

Total portfolio loans
$
55,367

 
$
8,113,181

 
$
117,615

 
$
8,286,163

 
$

 
$
53,014

 
$
53,014



18

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at December 31, 2015:
 
Loans evaluated by segment
 
Allowance evaluated by segment
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Purchased credit impaired loans
 
Total
 loans
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Total allowance for loan losses
C&I
$
3,138

 
$
1,661,163

 
$
17,403

 
$
1,681,704

 
$

 
$
13,262

 
$
13,262

Payroll finance

 
221,831

 

 
221,831

 

 
1,936

 
1,936

Warehouse lending

 
387,808

 

 
387,808

 

 
589

 
589

Factored receivables

 
208,382

 

 
208,382

 

 
1,457

 
1,457

Equipment financing
1,017

 
630,286

 

 
631,303

 

 
4,925

 
4,925

Commercial real estate
13,492

 
2,669,673

 
50,186

 
2,733,351

 

 
13,861

 
13,861

Multi-family
1,541

 
790,017

 
4,472

 
796,030

 

 
2,741

 
2,741

ADC
8,669

 
173,065

 
4,664

 
186,398

 

 
2,009

 
2,009

Residential mortgage
515

 
705,245

 
7,276

 
713,036

 

 
5,007

 
5,007

Consumer

 
298,225

 
1,292

 
299,517

 

 
4,358

 
4,358

Total loans
$
28,372

 
$
7,745,695

 
$
85,293

 
$
7,859,360

 
$

 
$
50,145

 
$
50,145


Management considers a loan to be impaired when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Evaluation of impairment is treated the same across all classes of loans on a loan-by-loan basis, except residential mortgage loans and home equity lines of credit with an outstanding balance of $500 or less, which are evaluated for impairment on a homogeneous pool basis. When management identifies a loan as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole remaining source of repayment of the loan is the operation or liquidation of the collateral. In these cases, management uses the current fair value of the collateral, less selling costs when foreclosure or liquidation is probable, instead of discounted cash flows. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is generally recognized through a charge-off to the allowance for loan losses. 

The Company acquired loans for which there was, at acquisition, both evidence of deterioration of credit quality since origination and probability, at acquisition, that all contractually required payments would not be collected (“PCI loans”). The carrying amount of such loans is presented in the tables above. At March 31, 2016, the net recorded amount of PCI loans was $117,615, which included $37,823 of C&I loans acquired in the NSBC Acquisition.

There was $565 and $272 included in the allowance for loan losses associated with PCI loans at March 31, 2016 and December 31, 2015, respectively.

The following table presents the changes in the balance of the accretable yield discount for PCI loans for the three months ended March 31, 2016 and 2015:
 
For the three months ended March 31,
 
2016
 
2015
Balance at beginning of period
$
11,211

 
$
724

Balances acquired in the NSBC Acquisition
2,200

 

Accretion of income
(1,155
)
 

Reclassification from non-accretable difference
266

 

Balance at end of period
$
12,522

 
$
724



19

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

Income is not recognized on PCI loans unless the Company can reasonably estimate the cash flows that are expected to be collected over the life of the loan. The balance of PCI loans that were treated under the cost recovery method were $17,452 and $20,025 at March 31, 2016 and December 31, 2015, respectively.

The following table presents loans individually evaluated for impairment, excluding purchased credit impaired loans, by segment of loans at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
December 31, 2015
 
Unpaid principal balance
 
Recorded investment
 
Unpaid principal balance
 
Recorded investment
Loans with no related allowance recorded:
 
 
 
 
 
 
C&I
$
28,050

 
$
27,870

 
$
3,145

 
$
3,138

Equipment financing
2,192

 
2,192

 
1,017

 
1,017

Commercial real estate
15,211

 
13,815

 
15,092

 
13,492

Multi-family
883

 
883

 
1,541

 
1,541

ADC
8,595

 
8,595

 
8,669

 
8,669

Residential mortgage
515

 
515

 
515

 
515

Consumer
1,497

 
1,497

 

 

Total
$
56,943

 
$
55,367

 
$
29,979

 
$
28,372


At March 31, 2016 and December 31, 2015 there were no payroll finance, warehouse lending or factored receivables loans that were individually evaluated for impairment.
 
The following tables present the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the three months ended March 31, 2016 and March 31, 2015:
 
March 31, 2016
 
March 31, 2015
 
QTD average
recorded
investment
 
Interest
income
recognized
 
Cash-basis
interest
income
recognized
 
QTD average
recorded
investment
 
Interest
income
recognized
 
Cash-basis
interest
income
recognized
Loans with no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
C&I
$
15,366

 
$
9

 
$

 
$
3,316

 
$

 
$

Equipment financing
1,288

 

 

 

 

 

Commercial real estate
13,118

 
39

 

 
13,275

 
67

 

Multi-family
884

 

 

 

 

 

ADC
8,632

 
56

 

 
11,597

 
57

 

Residential mortgage
515

 

 

 
515

 

 

Consumer
748

 

 

 

 

 

Total
$
39,803

 
$
104

 
$

 
$
28,703

 
$
124

 
$


There were no impaired loans with an allowance recorded at March 31, 2016 or December 31, 2015. At March 31, 2016 and 2015, there were no factored receivables, payroll finance, or warehouse lending loans that were impaired.
 
 
 
 
 
 
 
 
 
 
 
 

20

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

Troubled Debt Restructuring:
The following tables set forth the amounts and past due status of the Company’s TDRs at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
Current loans
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
580

 
$

 
$

 
$

 
$
1,116

 
$
1,696

Equipment financing
64

 

 

 

 

 
64

Commercial real estate
2,496

 
257

 

 

 

 
2,753

ADC
6,274

 

 

 

 
2,458

 
8,732

Residential mortgage
5,504

 
859

 

 

 
2,236

 
8,599

Total
$
14,918

 
$
1,116

 
$

 
$

 
$
5,810

 
$
21,844

 
December 31, 2015
 
Current loans
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
154

 
$

 
$

 
$

 
$
2,052

 
$
2,206

Equipment financing
338

 

 

 

 

 
338

Commercial real estate
2,787

 

 

 

 

 
2,787

ADC
5,107

 

 

 

 
3,700

 
8,807

Residential mortgage
4,661

 
654

 

 

 
2,839

 
8,154

Total
$
13,047

 
$
654

 
$

 
$

 
$
8,591

 
$
22,292


There were no payroll finance, warehouse lending, factored receivables, or multi-family or consumer loans that were TDRs for either period presented above. The Company did not have outstanding commitments to lend additional amounts to customers with loans classified as TDRs as of March 31, 2016 and December 31, 2015, respectively.

There was one loan modified as a TDR in the three months ended March 31, 2016. This TDR did not increase the allowance for loan losses and did not result in charge-offs for during the quarter ended March 31, 2016 or March 31, 2015.

The following table presents loans by segment modified as TDRs that occurred during the first three months of 2016 and 2015:
 
March 31, 2016
 
March 31, 2015
 
 
 
Recorded investment
 
 
 
Recorded investment
 
Number
Pre-
modification
 
Post-
modification
 
Number
Pre-
modification
 
Post-
modification
Residential mortgage
1

 
$
469

 
$
469

 
 

 

Total TDRs
1

 
$
469

 
$
469

 
 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 

There were no TDRs that were modified during the three months ended March 31, 2016 and 2015 that had subsequently defaulted (which is defined as missing three consecutive monthly payments or being over 90 days past due on a scheduled payment).

21

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

(5) Allowance for Loan Losses

Activity in the allowance for loan losses for the three months ended March 31, 2016 and 2015 is summarized below:
 
The three months ended March 31, 2016
 
Beginning
balance
 
Charge-offs
 
Recoveries
 
Net
charge-offs
 
Provision / (reversal of)
 
Ending balance
C&I
$
13,262

 
$
(489
)
 
$
329

 
$
(160
)
 
$
1,167

 
$
14,269

Payroll finance
1,936

 

 
4

 
4

 
(394
)
 
1,546

Warehouse lending
589

 

 

 

 
(69
)
 
520

Factored receivables
1,457

 
(81
)
 
24

 
(57
)
 
7

 
1,407

Equipment financing
4,925

 
(457
)
 
108

 
(349
)
 
817

 
5,393

Commercial real estate
13,861

 
(4
)
 
21

 
17

 
1,892

 
15,770

Multi-family
2,741

 

 
2

 
2

 
253

 
2,996

ADC
2,009

 

 

 

 
148

 
2,157

Residential mortgage
5,007

 
(224
)
 
28

 
(196
)
 
39

 
4,850

Consumer
4,358

 
(511
)
 
119

 
(392
)
 
140

 
4,106

Total allowance for loan losses
$
50,145

 
$
(1,766
)
 
$
635

 
$
(1,131
)
 
$
4,000

 
$
53,014

Annualized net charge-offs to average loans outstanding
 
 
 
 
 
 
 
0.06
%
 
 
The three months ended March 31, 2015
 
Beginning
balance
 
Charge-offs
 
Recoveries
 
Net
charge-offs
 
Provision / (reversal of)
 
Ending balance
C&I
$
11,027

 
$
(842
)
 
$
101

 
$
(741
)
 
$
400

 
$
10,686

Payroll finance
1,506

 
(303
)
 
11

 
(292
)
 
686

 
1,900

Warehouse lending
608

 

 

 

 
251

 
859

Factored receivables
1,205

 
(72
)
 
19

 
(53
)
 
20

 
1,172

Equipment financing
2,569

 
(153
)
 
172

 
19

 
103

 
2,691

Commercial real estate
10,121

 
(62
)
 
16

 
(46
)
 
1,018

 
11,093

Multi-family
2,111

 
(17
)
 

 
(17
)
 
196

 
2,290

ADC
2,987

 

 
9

 
9

 
(280
)
 
2,716

Residential mortgage
5,843

 
(181
)
 
2

 
(179
)
 
(537
)
 
5,127

Consumer
4,397

 
(342
)
 
52

 
(290
)
 
243

 
4,350

Total allowance for loan losses
$
42,374

 
$
(1,972
)
 
$
382

 
$
(1,590
)
 
$
2,100

 
$
42,884

Annualized net charge-offs to average loans outstanding
 
 
 
 
 
 
 
0.13
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

22

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

Total Valuation Balances Recorded Against Portfolio Loans
In purchase accounting, the prior allowance for loan losses is not carried over, and in place, we are required to estimate the fair value of loans acquired, which is included as a purchase discount within the acquired loan discount. The following analysis presents the allowance for loan losses to originated loans and remaining purchase accounting marks to acquired loan portfolios and a holistic view of valuation balances recorded against portfolio loans at March 31, 2016 and December 31, 2015.
 
March 31, 2016
Originated:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
1,370,429

 
$
12,396

 
$
30,141

 
$
527

 
$

 
$
1,413,493

Payroll finance
198,903

 
159

 
57

 

 

 
199,119

Factored receivables
213,471

 

 
1,544

 

 

 
215,015

Equipment financing
555,626

 
1,794

 
2,960

 

 

 
560,380

Warehouse lending
341,790

 

 

 

 

 
341,790

Commercial real estate
2,160,764

 
8,009

 
23,917

 

 

 
2,192,690

Multi-family
672,382

 
1,763

 
1,697

 

 

 
675,842

ADC
140,110

 
1,668

 
7,326

 

 

 
149,104

Residential mortgage
433,516

 
684

 
12,796

 

 

 
446,996

Consumer
193,933

 
610

 
8,289

 
29

 

 
202,861

Total originated loans
$
6,280,924

 
$
27,083

 
$
88,727

 
$
556

 
$

 
$
6,397,290

Allowance for loan losses
$
47,994

 
$
829

 
$
3,774

 
$
417

 
$

 
$
53,014

As a % of originated loans
0.76
%
 
3.06
%
 
4.25
%
 
75.00
%
 
%
 
0.83
%

 
March 31, 2016
Acquired loans:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
541,296

 
$
40,131

 
$
8,919

 
$

 
$

 
$
590,346

Equipment financing
96,395

 

 

 

 

 
96,395

Commercial real estate
550,133

 
22,950

 
24,372

 

 

 
597,455

Multi-family
201,332

 
5,895

 
3,000

 

 

 
210,227

ADC
24,116

 
5,500

 
797

 

 

 
30,413

Residential mortgage
265,632

 

 
6,105

 

 

 
271,737

Consumer
92,300

 

 

 

 

 
92,300

Total loans subject to purchase accounting marks
$
1,771,204

 
$
74,476

 
$
43,193

 
$

 
$

 
$
1,888,873

Remaining purchase accounting mark
$
40,085

 
$
2,380

 
$
1,937

 
$

 
$

 
$
44,402

As a % of acquired loans
2.26
%
 
3.20
%
 
4.48
%
 
%
 
%
 
2.35
%
 
 
 
 
 
 
 
 
 
 
 
 
Total portfolio loans
$
8,052,128

 
$
101,559

 
$
131,920

 
$
556

 
$

 
$
8,286,163

Total allowance for loan losses and remaining purchase accounting mark
$
88,079

 
$
3,209

 
$
5,711

 
$
417

 
$

 
$
97,416



23

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

 
December 31, 2015
Originated:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
1,356,685

 
$
11,041

 
$
29,621

 
$
445

 
$

 
$
1,397,792

Payroll finance
221,735

 

 
96

 

 

 
221,831

Factored receivables
206,814

 

 
1,568

 

 

 
208,382

Equipment financing
512,314

 
460

 
1,644

 

 

 
514,418

Warehouse lending
387,808

 

 

 

 

 
387,808

Commercial real estate
2,002,638

 
9,361

 
24,104

 

 

 
2,036,103

Multi-family
550,438

 

 
1,717

 

 

 
552,155

ADC
118,552

 
1,575

 
7,236

 

 

 
127,363

Residential mortgage
419,534

 
897

 
13,497

 

 

 
433,928

Consumer
195,684

 
407

 
7,167

 
268

 

 
203,526

Total originated loans
$
5,972,202

 
$
23,741

 
$
86,650

 
$
713

 
$

 
$
6,083,306

Allowance for loan losses
$
43,925

 
$
884

 
$
4,801

 
$
535

 
$

 
$
50,145

As a % of originated loans
0.74
%
 
3.72
%
 
5.54
%
 
75.04
%
 
%
 
0.82
%

 
December 31, 2015
Acquired loans:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
267,541

 
$
9,724

 
$
6,647

 
$

 
$

 
$
283,912

Equipment financing
116,885

 

 

 

 

 
116,885

Commercial real estate
645,951

 
23,111

 
28,186

 

 

 
697,248

Multi-family
237,948

 
5,927

 

 

 

 
243,875

ADC
52,775

 
5,500

 
760

 

 

 
59,035

Residential mortgage
272,336

 

 
6,772

 

 

 
279,108

Consumer
95,341

 

 
650

 

 

 
95,991

Total loans subject to purchase accounting marks
$
1,688,777

 
$
44,262

 
$
43,015

 
$

 
$

 
$
1,776,054

Remaining purchase accounting mark
$
37,351

 
$
1,649

 
$
2,383

 
$

 
$

 
$
41,383

As a % of acquired loans
2.21
%
 
3.73
%
 
5.54
%
 
%
 
%
 
2.33
%
 
 
 
 
 
 
 
 
 
 
 
 
Total portfolio loans
$
7,661,198

 
$
68,003

 
$
129,665

 
$
713

 
$

 
$
7,859,579

Total allowance for loan losses and remaining purchase accounting mark
$
81,276

 
$
2,533

 
$
7,184

 
$
535

 
$

 
$
91,528


Credit Quality Indicators
As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the weighted-average risk grade of commercial loans; (ii) the level of classified commercial loans; (iii) the delinquency status of residential mortgage and consumer loans (home equity lines of credit (“HELOC”) and other consumer loans); (iv) net charge-offs; (v) non-performing loans (see details above); and (vi) the general economic conditions in the greater New York metropolitan region. The Bank analyzes loans individually by classifying the loans by credit risk, except residential mortgage loans, HELOC and other consumer loans, which are evaluated on a homogeneous pool basis unless the loan balance is greater than $500. This analysis is performed at least quarterly on all criticized/classified loans. The Bank uses the following definitions of risk ratings:

1 and 2 - These grades include loans that are secured by cash, marketable securities or cash surrender value of life insurance policies.


24

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

3 - This grade includes loans to borrowers with strong earnings and cash flow and that have the ability to service debt. The borrower’s assets and liabilities are generally well matched and are above average quality. The borrower has ready access to multiple sources of funding, including alternatives such as term loans, private equity placements or trade credit.

4 - This grade includes loans to borrowers with above average cash flow, adequate earnings and debt service coverage ratios. The borrower generates discretionary cash flow, assets and liabilities are reasonably matched, and the borrower has access to other sources of debt funding or additional trade credit at market rates.

5 - This grade includes loans to borrowers with adequate earnings and cash flow and reasonable debt service coverage ratios. Overall leverage is acceptable and there is average reliance upon trade credit. Management has a reasonable amount of experience and depth, and owners are willing to invest available outside capital as necessary.

6 - This grade includes loans to borrowers where there is evidence of some strain, earnings are inconsistent and volatile, and the borrowers’ outlook is uncertain. Generally such borrowers have higher leverage than those with a better risk rating. These borrowers typically have limited access to alternative sources of bank debt and may be dependent upon debt funding for working capital support.

7 - Special Mention (OCC definition) - Other Assets Especially Mentioned (“OAEM”) are loans that have potential weaknesses which may, if not reversed or corrected, weaken the asset or inadequately protect the Bank’s credit position at some future date. Such assets constitute an undue and unwarranted credit risk but not to the point of justifying a classification of “Substandard.” The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances surrounding a specific asset.

8 - Substandard (OCC definition) - These loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some losses if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified as substandard.

9 - Doubtful (OCC definition) - These loans have all the weakness inherent in one classified as “Substandard” with the added characteristics that the weakness makes collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but, because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidating procedures, capital injection, perfecting liens or additional collateral and refinancing plans.

10 - Loss (OCC definition) - These loans are charged-off because they are determined to be uncollectible and unbankable assets. This classification does not indicate that the asset has no absolute recovery or salvage value, but rather it is not practical or desirable to defer writing-off this asset even though partial recovery may be affected in the future. Losses should be taken in the period in which they are determined to be uncollectible.


25

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

Loans that are risk-rated 1 through 6 as defined above are considered to be pass-rated loans. As of March 31, 2016 and December 31, 2015, the risk category of gross loans by segment was as follows:
 
March 31, 2016
 
December 31, 2015
 
Special
mention
 
Substandard
 
Doubtful
 
Special
mention
 
Substandard
 
Doubtful
C&I
$
52,527

 
$
39,060

 
$
527

 
$
20,765

 
$
36,268

 
$
445

Payroll finance
159

 
57

 

 

 
96

 

Factored receivables

 
1,544

 

 

 
1,568

 

Equipment financing
1,794

 
2,960

 

 
460

 
1,644

 

Commercial real estate
30,959

 
48,288

 

 
32,472

 
52,290

 

Multi-family
7,658

 
4,697

 

 
5,927

 
1,717

 

ADC
7,168

 
8,123

 

 
7,075

 
7,996

 

Residential mortgage
684

 
18,901

 

 
897

 
20,269

 

Consumer
610

 
8,289

 
29

 
407

 
7,817

 
268

Total
$
101,559

 
$
131,919

 
$
556

 
$
68,003

 
$
129,665

 
$
713


There were no criticized or classified warehouse lending loans for the periods presented. There were no loans rated “loss” at March 31, 2016 and December 31, 2015. The increase in loans rated special mention between the periods presented above was mainly due to the NSBC Acquisition.

(6) Goodwill and Other Intangible Assets

The balance of goodwill and other intangible assets for the periods presented were as follows:
 
March 31,
 
December 31,
 
2016
 
2015
Goodwill
$
696,600

 
$
670,699

Other intangible assets:
 
 
 
Core deposits
$
43,709

 
$
45,794

Customer lists
9,156

 
7,959

Non-compete agreements
2,260

 
2,925

Trade name
20,500

 
20,500

Fair value of below market leases
165

 
189

Total other intangible assets
$
75,790

 
$
77,367


The increase in goodwill at March 31, 2016 compared to December 31, 2015 was due to the NSBC Acquisition. See Note 2. “Acquisitions” for additional information.

The estimated aggregate future amortization expense for intangible assets remaining as of March 31, 2016 was as follows:

26

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

 
Amortization expense
Remainder of 2016
$
9,438

2017
8,838

2018
7,285

2019
6,074

2020
5,428

2021
5,022

Thereafter
13,205

Total
$
55,290


(7) Deposits

Deposit balances at March 31, 2016 and December 31, 2015 were summarized as follows: 
 
March 31,
 
December 31,
 
2016
 
2015
Non-interest bearing demand
$
3,027,471

 
$
2,936,981

Interest bearing demand
1,818,131

 
1,274,417

Savings
771,961

 
943,632

Money market
3,046,634

 
2,819,788

Certificates of deposit
664,425

 
605,189

Total deposits
$
9,328,622

 
$
8,580,007

Municipal deposits totaled $1,285,263 and $1,140,206 at March 31, 2016 and December 31, 2015, respectively. See Note 3. “Securities” for the amount of securities that were pledged as collateral for municipal deposits and other purposes.                     
Listed below are the Company’s brokered deposits:
 
March 31,
 
December 31,

 
2016
 
2015
Money market
$
219,305

 
$
258,007

Reciprocal CDARs 1
96,962

 
64,131

CDARs one way
89,702

 
106,627

Total brokered deposits
$
405,969

 
$
428,765

1 Certificate of deposit account registry service.

(8) Borrowings

The Company’s borrowings and weighted average interest rates are summarized as follows for the periods presented: 

27

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

 
March 31,
 
December 31,
 
2016
 
2015
 
Amount
 
Rate
 
Amount
 
Rate
By type of borrowing:
 
 
 
 
 
 
 
FHLB borrowings
$
1,444,817

 
0.87
%
 
$
1,409,885

 
1.32
%
Other borrowings (repurchase agreements)
23,571

 
0.57

 
16,566

 
0.55

Senior notes
98,996

 
5.98

 
98,893

 
5.98

Subordinated notes
108,124

 
5.47

 

 

Total borrowings
$
1,675,508

 
1.46
%
 
$
1,525,344

 
1.61
%
By remaining period to maturity:
 
 
 
 
 
 
 
Less than one year
$
1,061,219

 
0.67
%
 
$
999,222

 
0.69
%
One to two years
145,000

 
1.13

 
295,000

 
3.19

Two to three years
258,996

 
3.17

 
228,893

 
3.57

Three to four years
50,000

 
1.38

 

 

Four to five years
50,000

 
1.68

 

 

Greater than five years
110,293

 
5.46

 
2,229

 
4.92

Total borrowings
$
1,675,508

 
1.46
%
 
$
1,525,344

 
1.61
%

FHLB borrowings. As a member of the FHLB, the Bank may borrow up to a discounted percentage of the amount of eligible mortgages and securities that have been pledged as collateral under a blanket security agreement. As of March 31, 2016 and December 31, 2015, the Bank had total residential mortgage and commercial real estate loans pledged after discount of $2,205,834 and $2,050,982, respectively. In addition to the pledged mortgages, the Bank had also pledged securities to secure borrowings, which are disclosed in Note 3. “Securities.” As of March 31, 2016, the Bank had unused borrowing capacity at the FHLB of $963,416 and may increase its borrowing capacity by pledging securities not required to be pledged for other purposes with a collateral value of approximately $1,005,295.

FHLB borrowings included $200,000 at December 31, 2015 that were putable quarterly at the discretion of the FHLB. These borrowings had a weighted average remaining term to the contractual maturity dates of approximately 1.31 years at December 31, 2015 and a weighted average interest rate of 4.23%. The Company redeemed these borrowings on March 31, 2016, together with $20,000 of other borrowings with an interest rate of 3.57%. The Company incurred a loss on extinguishment of debt associated with these repayments of $8,716, which is included in non-interest expense in the consolidated income statements.

Other borrowings (repurchase agreements). The Bank enters into sales of securities under agreements to repurchase. These repurchase agreements facilitate the needs of our customers and a portion of our secured short-term funding needs. Securities sold under agreements to repurchase at March 31, 2016 and December 31, 2015 are secured short-term borrowings that mature in one to 45 days and are generally renewed on a continuous basis. Repurchase agreements are stated at the amount of cash received in connection with these transactions. The securities pledged under these repurchase agreements fluctuate in value due to market conditions. The Bank is obligated to promptly transfer additional securities if the market value of the securities falls below the repurchase agreement price. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents.

Senior Notes. On July 2, 2013, the Company issued $100,000 principal amount of 5.50% fixed rate senior notes (the “Senior Notes”) through a private placement at a discount of 1.75%. The cost of issuance was $303, and at March 31, 2016 and December 31, 2015 the unamortized debt issuance costs were $1,004 and $1,107, respectively, which will be accreted to interest expense over the life of the Senior Notes, resulting in an effective yield of 5.98%. Interest is due semi-annually in arrears on January 2 and July 2 until maturity on July 2, 2018.

Subordinated Notes. On March 29, 2016, the Bank issued $110,000 principal amount of 5.25% fixed-to-floating rate subordinated notes (the “Subordinated Notes”) through a private placement at a discount of 1.25%. The cost of issuance was $500, and at March 31, 2016 the unamortized debt issuance costs were $1,876, which will be accreted to interest expense over the life of the subordinated notes, resulting in an effective yield of 5.47%. Interest is due semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2016, until April 1, 2021. From and including April 1, 2021, the subordinated notes will bear interest at a floating rate per annum equal to three-month LIBOR plus 3.937%, payable quarterly on January 1, April 1, July 1 and October 1 of each year, beginning on July 1, 2021, through maturity on April 1, 2026 or earlier redemption. The subordinated notes are redeemable

28

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

by the Bank, in whole or in part, on April 1, 2021 and each interest payment date thereafter. The subordinated notes are redeemable in whole at any time upon certain specified events. The subordinated notes are unsecured, subordinated obligations of the Bank and are subordinated in right of payment to all of the Bank’s existing and future senior indebtedness, including claims of depositors and general creditors. The subordinated notes qualify as Tier 2 capital for regulatory purposes, see Note 15. “Stockholders’ Equity” for additional information.

Revolving line of credit. The Company has a $15,000 revolving line of credit facility (the “Credit Facility”) with a financial institution that matures on September 5, 2016. The balance was zero at March 31, 2016 and December 31, 2015. The use of proceeds are for general corporate purposes. The line and accrued interest is payable at maturity, and the Company is required to maintain a zero balance for at least 30 days during its term. Loans under the Credit Facility bear interest at one-month LIBOR plus 1.25%. Under the terms of the Credit Facility, the Company and the Bank must maintain certain ratios related to capital, non-performing assets to capital, reserves to non-performing loans and debt service coverage. The Company and the Bank were in compliance with all requirements of the Credit Facility at March 31, 2016.

(9) Derivatives

The Company has entered into certain interest rate swap contracts that are not designated as hedging instruments. These derivative contracts relate to transactions in which the Company enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, the Company agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the Company’s customers to effectively convert a variable rate loan to a fixed rate. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts for the most part offset each other and do not significantly impact the Company’s results of operations.

The Company pledged investment securities with a fair value of $4,323 as of March 31, 2016 as collateral for the swaps with another financial institution. The Company may need to post additional collateral to swap counterparties in the future in proportion to potential increases in unrealized loss positions.

The Company does not typically require its commercial customers to post cash or securities as collateral on its program of back-to-back swaps. However, certain language is written into the International Swaps and Derivatives Association agreement and loan documents where, in default situations, the Company is allowed to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability.

Summary information as of March 31, 2016 and December 31, 2015 regarding these derivatives is presented below:
 
Notional
amount
 
Average
maturity (in years)
 
Weighted
average
fixed rate 
 
Weighted
average
variable rate
 
Fair value
March 31, 2016
 
 
 
 
 
 
 
 
 
3rd party interest rate swap
$
116,032

 
5.64
 
3.96
%
 
1 m Libor + 2.19
 
$
4,323

Customer interest rate swap
(116,032
)
 
5.64
 
3.96

 
1 m Libor + 2.19
 
(4,323
)
December 31, 2015
 
 
 
 
 
 
 
 
 
3rd party interest rate swap
87,094

 
5.44
 
4.09

 
1 m Libor + 2.15
 
1,839

Customer interest rate swap
(87,094
)
 
5.44
 
4.09

 
1 m Libor + 2.15
 
(1,839
)

The Company enters into various commitments to sell real estate loans into the secondary market. Such commitments are considered to be derivative financial instruments; however, the fair value of these commitments is not material.

29

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

(10) Income Taxes

Actual income tax expense differs from the tax computed based on pre-tax income and the applicable statutory federal tax rate for the
following reasons:
 
For the three months ended
 
March 31,
 
2016
 
2015
Income before income tax expense
$
36,009

 
$
24,856

Tax at Federal statutory rate of 35%
12,603

 
8,700

State and local income taxes, net of Federal tax benefit
1,993

 
875

Tax-exempt interest, net of disallowed interest
(1,834
)
 
(984
)
Bank owned life insurance income
(445
)
 
(251
)
Non-deductible acquisition related costs

 
140

Low income housing tax credits
(54
)
 
(54
)
Other, net
(20
)
 
(348
)
Actual income tax expense
$
12,243

 
$
8,078

Effective income tax rate
34.0
%
 
32.5
%

Net deferred tax assets totaled $16,065 at March 31, 2016 and $31,079 at December 31, 2015. No valuation allowance was recorded against deferred tax assets at March 31, 2016 as management believes it is more likely than not that all of the deferred tax assets will be realized because they were supported by recoverable taxes paid in prior years. There were no unrecognized tax benefits during any of the reported periods. Interest and/or penalties related to income taxes are reported as a component of other non-interest expense. Such amounts were not material during the reported periods.

The Company is generally no longer subject to examination by Federal, state and local taxing authorities for fiscal years prior to September 30, 2012.
(11) Stock-Based Compensation

The Company has active stock-based compensation plans, as described below.

The Company’s stockholders approved the 2015 Omnibus Equity and Incentive Plan (the “2015 Plan”) on May 28, 2015. The 2015 Plan permits the grant of stock options, stock appreciation rights, restricted stock (both time-based and performance-based), restricted stock units, deferred stock and other stock-based awards. The total number of shares that may be awarded under the 2015 Plan is 2,800,000 shares plus the remaining shares available for grant under the 2014 Stock Incentive Plan (the “2014 Plan”). At March 31, 2016, there were 3,642,091 shares available for future grant under the 2015 Plan.

The Company’s stockholders approved the 2014 Plan. The approval of the 2015 Plan resulted in the termination of the 2014 Plan. Awards granted under the 2014 Plan that were outstanding as of May 28, 2015 will continue to be governed by the 2014 Plan document; however, no future grants will be made under the 2014 Plan.

Under the 2015 Plan, one share is deducted from the 2015 Plan for every share that is awarded and delivered under the 2015 Plan.

Restricted stock awards are granted with a fair value equal to the market price of the Company’s common stock at the date of grant. Stock option awards are granted with a strike price that is equal to the market price of the Company’s stock at the date of grant. The awards generally vest in equal installments annually on the anniversary date and have total vesting periods ranging from 1 to 5 years and stock options having 10 year contractual terms.

In addition to the 2015 Plan and the 2014 Plan, the Company previously granted awards under its 2011 Employment Inducement Stock Program, which included options to purchase 107,526 shares of common stock and restricted stock awards covering 29,550 shares of common stock, both of which vested in four equal installments through July 2015.


30

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

In connection with the Provident Merger, the Company granted 104,152 options at an exercise price of $14.25 per share pursuant to a Registration Statement on Form S-8 under which the Company assumed all outstanding fully vested Legacy Sterling stock options, which expire March 15, 2017. The Company also granted 95,991 shares under the Sterling Bancorp 2013 Employment Inducement Award Plan to certain executive officers of Legacy Sterling. In addition, the Company issued 255,973 shares of restricted stock from shares available under a prior plan to certain executives of Legacy Sterling. The weighted average grant date fair value under both of these plans was $11.72 per share and the restricted stock awards vest in equal annual installments on the anniversary date over a three-year period.

The following table summarizes the activity in the Company’s active stock-based compensation plans for the three months ended March 31, 2016:
 
 
 
Non-vested stock awards/stock units outstanding
 
Stock options outstanding
 
Shares available for grant
 
Number of shares
 
Weighted average grant date fair value
 
Number of shares
 
Weighted average exercise price
Balance at January 1, 2016
4,125,665

 
726,800

 
$
13.36

 
1,586,572

 
$
10.95

Granted
(483,574
)
 
483,574

 
14.21

 

 

Stock awards vested

 
(32,623
)
 

 

 

Exercised

 

 

 
(79,031
)
 
9.33

Forfeited
48,646

 
(4,650
)
 
13.00

 
(32,312
)
 
13.08

Canceled/expired
(48,646
)
 

 

 

 

Balance at March 31, 2016
3,642,091

 
1,173,101

 
$
14.08

 
1,475,229

 
$
10.99

Exercisable at March 31, 2016
 
 
 
 
 
 
1,099,791

 
$
10.35

 
The total intrinsic value of outstanding in-the-money stock options and outstanding in-the-money exercisable stock options was $7,289 and $6,137, respectively, at March 31, 2016.

The Company uses an option pricing model to estimate the grant date fair value of stock options granted. There were no stock options granted during the three months ended March 31, 2016. There were 15,000 stock options granted during the three months ended March 31, 2015. The weighted average estimated value per option granted was $2.08 for the three months ended March 31, 2015.

The fair value of options during the first quarter of 2015 granted was determined using the following weighted average assumptions as of the grant date:
 
For the three months
 
ended March 31,
 
2015
Risk-free interest rate
1.9
%
Expected stock price volatility
20.9

Dividend yield (1)
3.1

Expected term in years
5.76

(1) Represents the approximate annualized cash dividend rate paid with respect to a share of common stock at or near the grant date.


31

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

Stock-based compensation expense is recognized ratably over the requisite service period for all awards. Stock-based compensation expense associated with stock options and non-vested stock awards and the related income tax benefit is presented below:
 
For the three months
 
ended March 31,
 
2016
 
2015
Stock options
$
126

 
$
281

Non-vested stock awards/performance units
1,414

 
828

Total
$
1,540

 
$
1,109

Income tax benefit
524

 
377

Proceeds from stock option exercises
546

 
2,758


Unrecognized stock-based compensation expense as of March 31, 2016 was as follows:
 
March 31, 2016
Stock options
$
503

Non-vested stock awards/performance units
12,848

Total
$
13,351


The weighted average period over which unrecognized stock options expense is expected to be recognized is 1.34 years. The weighted average period over which unrecognized non-vested stock awards/performance units expense is expected to be recognized is 2.29 years.

(12) Pension and Other Post Retirement Plans

Net pension expense (benefit) and post-retirement expense (benefit) is comprised of the following for the periods presented below:
 
Pension plan
 
Other post retirement plans
 
For the three months ended
 
For the three months ended
 
March 31,
 
March 31,
 
2016
 
2015
 
2016
 
2015
Service cost
$

 
$

 
$

 
$
2

Interest cost

 
589

 
104

 
94

Expected return on plan assets

 
(729
)
 

 

Net amortization and deferral

 
91

 
12

 
40

Total pension expense (benefit) and other post-retirement expense
$

 
$
(49
)
 
$
116

 
$
136

 
 
 
 
Net pension expense (benefit) and post-retirement expense is included as a component of compensation and benefits in the consolidated income statements.

The Company incurred no pension plan expense in the three months ended March 31, 2016, as the Company terminated the Sterling National Bank / Sterling Bancorp Defined Benefit Pension Plan (the “Plan”) in October 2015. After settlement of all Plan obligations, a pension reversion asset of $11,642 and $11,442 (recorded in other assets in the consolidated balance sheets) at March 31, 2016 and December 31, 2015, respectively, will be held in custody by the Company’s 401(k) plan custodian and will be charged to earnings over the next five to seven years as it is distributed to employees under qualified compensation and benefit programs.

The Company’s other post retirement plans include a non-qualified Supplemental Executive Retirement Plan (“SERP”) that provides certain officers and executives with supplemental retirement benefits. The Company contributed $30 and $26 to fund SERP benefits during the three months ended March 31, 2016 and 2015, respectively. Total post retirement plan liabilities were $11,819 and $11,733 at March 31, 2016 and December 31, 2015, respectively, and are included in other liabilities in the consolidated balance sheets.

32

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

(13) Other Non-interest Expense

Other non-interest expense items for the three months ended March 31, 2016 and 2015, respectively, are presented in the following table. Components exceeding 1% of the aggregate of total net interest income and total non-interest income are presented separately.
 
For the three months ended
 
March 31,
 
2016
 
2015
Other non-interest expense:
 
 
 
   Professional fees
$
2,471

 
$
1,915

   Data and check processing
1,754

 
2,148

Insurance & surety bond premium
785

 
648

Charge for asset write-downs
2,485

 

   Other
5,720

 
5,111

Total other non-interest expense
$
13,215

 
$
9,822


(14) Earnings Per Common Share

The following is a summary of the calculation of earnings per share (“EPS”):
 
For the three months ended
 
March 31,
 
2016
 
2015
 Net income
$
23,766

 
$
16,778

Weighted average common shares outstanding for computation of basic EPS
129,974,025

 
87,839,029

Common-equivalent shares due to the dilutive effect of stock options and unvested performance share grants(1)
526,950

 
413,739

Weighted average common shares for computation of diluted EPS
130,500,975

 
88,252,768

Earnings per common share:
 
 
 
Basic
$
0.18

 
$
0.19

Diluted
0.18

 
0.19

Weighted average common shares that could be exercised that were anti-dilutive for the period(2)

 
112,891

(1) Represents incremental shares computed using the treasury stock method.
(2) Anti-dilutive shares are not included in determining diluted earnings per share; there were no anti-dilutive shares in the three months ended March 31, 2016.
(15) Stockholders’ Equity

(a) Regulatory Capital Requirements
Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines, and additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk-weighting, and other factors.

The Basel III Capital Rules became effective for the Company and the Bank on January 1, 2015 (subject to a phase-in period for certain provisions). Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1 capital (as defined in the regulations), Tier 1 capital (as defined in the regulations) and Total capital (as defined in the regulations) to risk-weighted assets (as defined, “RWA”), and of Tier 1 capital to adjusted quarterly average assets (as defined in the regulation) (the “Tier 1 leverage ratio”).


33

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

The Company’s and the Bank’s Common Equity Tier 1 capital consists of common stock and related paid-in capital, net of treasury stock, and retained earnings. In connection with the adoption of the Basel III Capital Rules, we elected to opt-out of the requirement to include most components of accumulated other comprehensive income in Common Equity Tier 1 capital. Common Equity Tier 1 capital for both the Company and the Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities and subject to transition provisions.

Tier 1 capital includes Common Equity Tier 1 capital and additional Tier 1 capital. Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital (as defined in the regulations) for both the Bank and the Company includes a permissible portion of the allowance for loan losses and $108,124 and $95,661 of the Subordinated Notes, respectively. During the final five years of the term of the Subordinated Notes the permissible portion eligible for inclusion in Tier 2 capital decreases by 20% annually. See Note 8. “Borrowings.”  

The Common Equity Tier 1, Tier 1 and Total capital ratios are calculated by dividing the respective capital amounts by RWA. RWA is calculated based on regulatory requirements and includes total assets, excluding goodwill and other intangible assets, allocated by risk weight category, and certain off-balance-sheet items, among other things.

The Tier 1 leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, which exclude goodwill and other intangible assets, among other things. When fully phased-in on January 1, 2019, the Basel III Capital Rules will require the Company and the Bank to maintain: (i) a minimum ratio of Common Equity Tier 1 capital to RWA of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% Common Equity Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum ratio of Common Equity Tier 1 capital to RWA of at least 7.0% upon full implementation); (ii) a minimum ratio of Tier 1 capital to RWA of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation); (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to RWA of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation); and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to adjusted quarterly average assets.

The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and is being phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019). The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company or the Bank.

The aforementioned capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of Common Equity Tier 1 capital to RWA above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall.

The following tables presents actual and required capital ratios as of March 31, 2016 and December 31, 2015 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of March 31, 2016 and December 31, 2015 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

34

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

 
Actual
 
Minimum capital required - Basel III phase-in schedule
 
Minimum capital required - Basel III fully phased-in
 
Required to be considered well capitalized
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
$
1,032,118

 
10.89
%
 
$
486,060

 
5.125
%
 
$
663,240

 
7.00
%
 
$
615,865

 
6.50
%
Sterling Bancorp
970,224

 
10.24

 
486,244

 
5.125

 
663,492

 
7.00

 
N/A

 
N/A

Tier 1 capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,032,118

 
10.89
%
 
628,183

 
6.625
%
 
805,362

 
8.50
%
 
757,988

 
8.00
%
Sterling Bancorp
970,224

 
10.24

 
628,421

 
6.625

 
805,668

 
8.50

 
N/A

 
N/A

Total capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,193,805

 
12.60
%
 
817,680

 
8.625
%
 
994,859

 
10.50
%
 
947,485

 
10.00
%
Sterling Bancorp
1,119,448

 
11.81

 
817,990

 
8.625

 
995,237

 
10.50

 
N/A

 
N/A

Tier 1 leverage ratio:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,032,118

 
9.16

 
450,703

 
4.000

 
450,703

 
4.00

 
563,379

 
5.00
%
Sterling Bancorp
970,224

 
8.60

 
451,378

 
4.000

 
451,378

 
4.00

 
N/A

 
N/A

 
Actual
 
Minimum capital required - Basel III phase-in schedule
 
Minimum capital required - Basel III fully phased-in
 
Required to be considered well capitalized
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
$
1,053,527

 
11.45
%
 
$
413,951

 
4.50
%
 
$
643,923

 
7.00
%
 
$
597,929

 
6.50
%
Sterling Bancorp
988,174

 
10.74

 
414,047

 
4.50

 
644,073

 
7.00

 
N/A

 
N/A

Tier 1 capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,053,527

 
11.45
%
 
551,934

 
6.00
%
 
781,907

 
8.50
%
 
735,912

 
8.00
%
Sterling Bancorp
988,174

 
10.74

 
552,063

 
6.00

 
782,089

 
8.50

 
N/A

 
N/A

Total capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,104,221

 
12.00
%
 
735,912

 
8.00
%
 
965,885

 
10.50
%
 
919,891

 
10.00
%
Sterling Bancorp
1,038,868

 
11.29

 
736,084

 
8.00

 
966,110

 
10.50

 
N/A

 
N/A

Tier 1 leverage ratio:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,053,527

 
9.65
%
 
436,678

 
4.00
%
 
436,678

 
4.00
%
 
545,848

 
5.00
%
Sterling Bancorp
988,174

 
9.03

 
437,629

 
4.00

 
437,629

 
4.00

 
N/A

 
N/A


The Bank and the Company are subject to the regulatory capital requirements administered by the Federal Reserve, and, for the Bank, the Office of the Comptroller of the Currency. Regulatory authorities can initiate certain mandatory actions if the Bank or the Company fail to meet the minimum capital requirements, which could have a direct material effect on our financial statements. As of March 31, 2016, management believes that the Bank and the Company meet all capital adequacy requirements to which they are subject.
 

35

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

(b) Dividend Restrictions
The Company is mainly dependent upon dividends from the Bank to provide funds for the payment of dividends to stockholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that fiscal year combined with the retained net profits for the preceding two fiscal years. Under the foregoing dividend restrictions and while maintaining its “well-capitalized” status, at March 31, 2016, the Bank had capacity to pay aggregate dividends of up to $66,516 to the Company without prior regulatory approval.

(c) Capital Raise
On February 11, 2015, the Company completed a public offering of 6.9 million shares of common stock at an offering price of $13.00 per share for gross proceeds of approximately $89,700, and net proceeds, after underwriting discounts, commissions and other costs of issuance, of $85,059.
 
(d) Stock Repurchase Plans
From time to time, the Company’s board of directors has authorized stock repurchase plans. The Company has 776,713 shares that are available to be purchased under a previously announced stock repurchase program. There were no shares repurchased under the repurchase program during the three months ended March 31, 2016 or March 31, 2015.

(e) Liquidation Rights
Upon completion of a second-step conversion in January 2004, the Bank established a special “liquidation account” in accordance with Office of the Comptroller of the Currency regulations. The account was established for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders (as defined in the plan of conversion) in an amount equal to the greater of (i) the Mutual Holding Company’s (as defined in the plan of conversion) ownership interest in the retained earnings of the Bank as of the date of its latest balance sheet contained in the prospectus; or (ii) the retained earnings of the Bank at the time that the Bank reorganized into the Mutual Holding Company in 1999. Each Eligible Account Holder and Supplemental Eligible Account Holder that continues to maintain his or her deposit account at the Bank would be entitled, in the event of a complete liquidation of the Bank, to a pro rata interest in the liquidation account prior to any payment to the stockholders of the Company. The liquidation account is reduced annually on September 30 to the extent that Eligible Account Holders and Supplemental Eligible Account Holders have reduced their qualifying deposits as of each anniversary date. At March 31, 2016, the liquidation account had a balance of $13,300. Subsequent increases in deposits do not restore such account holder’s interest in the liquidation account. The Bank may not pay cash dividends or make other capital distributions if the effect thereof would reduce its stockholders’ equity below the amount of the liquidation account.

(f) Impact of HVB Merger
On June 30, 2015, the Company completed the HVB Merger. In connection with the HVB Merger, the Company issued 38.5 million common shares to HVHC shareholders, which resulted in an increase of $563,613 in stockholders’ equity.

(16) Commitments and Contingencies

(a) Off-Balance-Sheet Financial Instruments
In the normal course of business, the Company enters into various transactions, which in accordance with GAAP are not included in its consolidated balance sheet. The Company enters into these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The Company minimizes its exposure to losses under these commitments by subjecting them to credit approval and monitoring procedures.

The Company enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes.  Substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. Standby letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third-party. In the event the customer does not perform in accordance with the terms of the agreement with the third-party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount of the commitment. If the commitment were funded, the Company would be entitled to seek recovery from the customer. Based on the Company’s credit risk exposure assessment of standby letter of credit arrangements, the arrangements contain security and debt covenants similar to those contained in loan agreements.


36

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

The contractual or notional amounts of these instruments, which reflect the extent of the Company’s involvement in particular classes of off-balance sheet financial instruments, are summarized as follows: 
 
March 31,
 
December 31,

 
2016
 
2015
Loan origination commitments
$
234,023

 
$
269,636

Unused lines of credit
749,028

 
660,915

Letters of credit
114,969

 
102,930


(b) Lease Commitments
The Company leases certain premises and equipment under operating leases with terms expiring through January 2034. Included in occupancy and office operations expense was net rent expense of $3,522 and $1,577 during the three months ended March 31, 2016 and 2015, respectively. Future minimum lease payments due under non-cancelable operating leases at March 31, 2016 were as follows:
Remainder of 2016
$
8,618

2017
10,724

2018
9,546

2019
7,310

2020
5,955

2021
5,521

2022 and thereafter
22,270

 
$
69,944


(c) Litigation
The Company and the Bank are involved in a number of judicial proceedings concerning matters arising from conducting their business activities. These include routine legal proceedings arising in the ordinary course of business. These proceedings also include actions brought against the Company and the Bank with respect to corporate matters and transactions in which the Company and the Bank are or were involved. In addition, the Company and the Bank may be requested to provide information or otherwise cooperate with government authorities in the conduct of investigations of other persons or industry groups.

There can be no assurance as to the ultimate outcome of a legal proceeding; however, the Company and the Bank have generally denied liability in all significant litigation pending against them and intend to defend vigorously each case, other than matters thata are determined appropriate to be settled. The Company and the Bank accrue a liability for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts accrued for those claims.


37

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

(17) Fair value measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risk, etc.) or inputs that are derived principally from, or corroborated by, market data by correlation or other means.

Level 3 Inputs – Unobservable inputs for determining the fair value of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

In general, fair value is based on quoted market prices, when available. If quoted market prices in active markets are not available, fair value is based on internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.  These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates; therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein. A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value is set forth below. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincide with the Company’s monthly and/or quarterly valuation process.

Investment Securities Available for Sale
The majority of the Company’s available for sale investment securities are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the securities’ terms and conditions, among other things.

The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company does not purchase investment securities that have a complicated structure. The Company’s entire portfolio consists of traditional investments, nearly all of which are mortgage pass-through securities, state and municipal general obligation or revenue bonds, U.S. agency bullet and callable securities and corporate bonds. Pricing for such instruments is fairly generic and is easily obtained. From time to time, the Company validates, on a sample basis, prices supplied by the independent pricing service by comparison to prices obtained from third-party sources or derived using internal models.

As of March 31, 2016, we do not believe any of our securities are OTTI; however, we review all of our securities on at least a quarterly basis to assess whether impairment, if any, is OTTI.
 
Derivatives
The fair values of derivatives are based on valuation models using current market terms (including interest rates and fees), the remaining terms of the agreements and the creditworthiness of the counterparty as of the measurement date (Level 2 inputs). The Company’s derivatives consist of interest rate swaps. See Note 9. “Derivatives” for additional information.


38

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

Commitments to Sell Real Estate Loans
The Company enters into various commitments to sell real estate loans in the secondary market. Such commitments are considered to be derivative financial instruments and if material, are carried at estimated fair value on the consolidated balance sheets. The estimated fair values of these commitments were generally calculated by reference to quoted prices in secondary markets for commitments to sell to certain government sponsored agencies. The fair values of these commitments generally result in a Level 2 classification and are not material.
 
A summary of assets and liabilities at March 31, 2016 measured at estimated fair value on a recurring basis is as follows:
 
March 31, 2016
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
Assets:
 
 
 
 
 
 
 
Investment securities available for sale:
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
Agency-backed
$
1,416,951

 
$

 
$
1,416,951

 
$

CMO(1)/Other MBS
74,672

 

 
74,672

 

Total residential MBS
1,491,623

 

 
1,491,623

 

Other securities:
 
 
 
 
 
 
 
Federal agencies
83,710

 

 
83,710

 

Corporate
87,179

 

 
87,179

 

State and municipal
223,517

 

 
223,517

 

Other
8,791

 

 
8,791

 

Total other securities
403,197

 

 
403,197

 

Total available for sale securities
1,894,820

 

 
1,894,820

 

Swaps
4,323

 

 
4,323

 

Total assets
$
1,899,143

 
$

 
$
1,899,143

 
$

Liabilities:
 
 
 
 
 
 
 
Swaps
$
4,323

 
$

 
$
4,323

 
$

Total liabilities
$
4,323

 
$

 
$
4,323

 
$


(1)  Collateralized Mortgage Obligations (“CMOs”) are debt securities that are collateralized by a specific pool of residential mortgage loans, in which the issuer of the CMOs can direct the payments of principal and interest received on the underlying collateral to achieve specific investor cash flow objectives.  The Bank generally acquires planned-amortization class securities and CMOs with a sequential pay structure in order to manage the duration and extension risk inherent in these securities.

39

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

A summary of assets and liabilities at December 31, 2015 measured at estimated fair value on a recurring basis is as follows:
 
 
December 31, 2015
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
Assets:
 
 
 
 
 
 
 
Investment securities available for sale:
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
Agency-backed
$
1,217,862

 
$

 
$
1,217,862

 
$

CMO/Other MBS
78,373

 

 
78,373

 

Total residential MBS
1,296,235

 

 
1,296,235

 

Federal agencies
84,267

 

 
84,267

 

Corporate bonds
314,188

 

 
314,188

 

State and municipal
189,035

 

 
189,035

 

Trust preferred
28,517

 

 
28,517

 

       Other
8,790

 

 
8,790

 

Total investment securities available for sale
624,797

 

 
624,797

 

Total available for sale securities
1,921,032

 

 
1,921,032

 

Swaps
1,839

 

 
1,839

 

Total assets
$
1,922,871

 
$

 
$
1,922,871

 
$

Liabilities:
 
 
 
 
 
 
 
Swaps
$
1,839

 
$

 
$
1,839

 
$

Total liabilities
$
1,839

 
$

 
$
1,839

 
$


The following categories of financial assets are not measured at fair value on a recurring basis, but are subject to fair value adjustments in certain circumstances.

Loans Held for Sale and Impaired Loans
Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value as determined by outstanding commitments from investors. Fair value of loans held for sale is determined using quoted prices for similar assets (Level 2 inputs).

When mortgage loans held for sale are sold with servicing rights retained, the carrying value of mortgage loans sold is reduced by the amount allocated to the value of the servicing rights, which is equal to its fair value. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

The Company may record adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of these loans. These adjustments also include certain impairment amounts for collateral dependent loans calculated in accordance with FASB ASC Topic 310 – Receivables when establishing the allowance for loan losses. Impairment amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated impairment amount applicable to that loan does not necessarily represent the fair value of the loan. Real estate collateral is valued using independent appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable by market participants. However, due to the substantial judgment applied and limited volume of activity as compared to other assets, fair value is based on Level 3 inputs. Estimates of fair value used for collateral supporting commercial loans generally are based on assumptions not observable in the market place and are also based on Level 3 inputs. Impaired loans are evaluated on at least a quarterly basis for additional impairment and their carrying values are adjusted as needed. Loans subject to non-recurring fair value measurements were $55,367 and $29,330 at March 31, 2016 and March 31, 2015, respectively. Changes in fair value recognized as a charge-off on loans held by the Company were $0 and $280 for the three months ended March 31, 2016 and 2015, respectively.


40

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

When valuing impaired loans that are collateral dependent, the Company charges-off the difference between the recorded investment in the loan and the appraised value, which is generally less than 12 months old. A discount for estimated costs to dispose of the asset is used when evaluating the impaired loans.

A summary of the two classes with impaired loans at March 31, 2016 measured at estimated fair value on a non-recurring basis is the following:
 
March 31, 2016
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
C&I
$
71

 
$

 
$

 
$
71

Commercial real estate
3,030

 

 

 
3,030

Total impaired loans measured at fair value
$
3,101

 
$

 
$

 
$
3,101


A summary of the class of impaired loans at December 31, 2015 measured at estimated fair value on a non-recurring basis is the following:
 
December 31, 2015
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
Commercial real estate
$
3,218

 
$

 
$

 
$
3,218

Total impaired loans measured at fair value
$
3,218

 
$

 
$

 
$
3,218

 
 Mortgage Servicing Rights
When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in net gain on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income.

The Company utilizes the amortization method to subsequently measure the carrying value of its servicing rights. In accordance with FASB ASC Topic 860 - Transfers and Servicing, the Company must record impairment charges on a non-recurring basis, when the carrying value exceeds the estimated fair value. To estimate the fair value of servicing rights, the Company utilizes a third-party valuation provider, which on a quarterly basis, considers the market prices for similar assets and the present value of expected future cash flows associated with the servicing rights. Assumptions utilized include estimates of the cost of servicing, loan default rates, an appropriate discount rate and prepayment speeds. The determination of fair value of servicing rights relies upon Level 3 inputs. The fair value of mortgage servicing rights at March 31, 2016 and December 31, 2015 were $1,115 and $1,204, respectively.

Assets Taken in Foreclosure of Defaulted Loans
Assets taken in foreclosure of defaulted loans are initially recorded at fair value less costs to sell when acquired, which establishes a new cost basis. These assets are subsequently accounted for at the lower of cost or fair value less costs to sell and are primarily comprised of commercial and residential real estate property and, upon initial recognition, are re-measured and reported at fair value through a charge-off to the allowance for loan losses based on the fair value of the foreclosed asset. The fair value is generally determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the market place. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between comparable sales and income data available. The fair value is derived using Level 3 inputs. Appraisals are reviewed by the Company’s credit department, external loan review consultant and verified by officers in the Company’s credit administration area. Assets taken in foreclosure of defaulted loans and facilities held for sale subject to non-recurring fair value measurement were $14,527 and $14,614 at March 31, 2016 and December 31, 2015, respectively. There were $165 and $0 of write-downs related to changes in fair value for those foreclosed assets held by the Company during the three months ended March 31, 2016 and March 31, 2015, respectively.


41

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

Significant Unobservable Inputs to Level 3 Measurements
The following table presents quantitative information about significant unobservable inputs used in the fair value measurements for Level 3 assets at March 31, 2016:
Non-recurring fair value measurements
 
Fair value
 
Valuation technique
 
Unobservable input / assumptions
 
Range (1) (weighted average)
Impaired loans:
 
 
 
 
 
 
 
 
C&I
 
$
71

 
Appraisal
 
Adjustments for comparable properties
 
10.0% -25.0% (14.4%)
Commercial real estate
 
$
3,030

 
Appraisal
 
Adjustments for comparable properties
 
22.0% (22.0%)
Assets taken in foreclosure:
 
 
 
 
 
 
 
 
Residential mortgage
 
2,355

 
Appraisal
 
Adjustments by management to reflect current conditions/selling costs
 
10.0% - 22.0% (21.6%)
Commercial real estate(2)
 
7,411

 
Appraisal
 
Adjustments by management to reflect current conditions/selling costs
 
10.0% - 22.0% (22.0%)
ADC
 
4,427

 
Appraisal
 
Adjustments by management to reflect current conditions/selling costs
 
10.0% - 22.0% (22.0%)
Mortgage servicing rights
 
1,115

 
Third-party
 
Discount rates
 
8.5% - 11.5% (9.8%)
 
 
 
 
Third-party
 
Prepayment speeds
 
100 - 418 (208)
(1) Represents range of discount factors applied to the appraisal to determine fair value. The amounts used for mortgage servicing rights are discounts applied by a third-party valuation provider, which the Company believes are appropriate.

(2) Excludes $334 of commercial properties that are former financial centers that were closed and are now held for sale. These assets were not taken in foreclosure and their fair value is determined by third-party appraisals and our internal assessment of the market for this type of real estate.

Fair Values of Financial Instruments
FASB Codification Topic 825 - Financial Instruments requires disclosure of fair value information for those financial instruments for which it is practicable to estimate fair value, whether or not such financial instruments are recognized in the consolidated financial statements for interim and annual periods. Fair value is the amount for which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation.

Quoted market prices are used to estimate fair values when those prices are available, although active markets do not exist for many types of financial instruments. Fair values for these instruments must be estimated by management using techniques such as discounted cash flow analysis and comparison to similar instruments. These estimates are highly subjective and require judgments regarding significant matters, such as the amount and timing of future cash flows and the selection of discount rates that appropriately reflect market and credit risks. Changes in these judgments often have a material effect on the fair value estimates. Since these estimates are made as of a specific point in time, they are susceptible to material near-term changes. Fair values disclosed in accordance with FASB Topic 825 do not reflect any premium or discount that could result from the sale of a large volume of a particular financial instrument, nor do they reflect possible tax ramifications or estimated transaction costs.


42

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of March 31, 2016:
 
March 31, 2016
 
Carrying
amount
 

Level 1 inputs
 

Level 2 inputs
 

Level 3 inputs
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
486,730

 
$
486,730

 
$

 
$

Securities available for sale
1,894,820

 

 
1,894,820

 

Securities held to maturity
952,922

 

 
973,826

 

Portfolio loans, net
8,233,149

 

 

 
8,290,596

Loans held for sale
27,237

 

 
27,237

 

Accrued interest receivable on securities
11,937

 

 
11,937

 

Accrued interest receivable on loans
21,455

 

 

 
21,455

FHLB stock and FRB stock
118,330

 

 

 

Swaps
4,323

 

 
4,323

 

Financial liabilities:
 
 
 
 
 
 
 
Non-maturity deposits
(8,664,197
)
 
(8,664,197
)
 

 

Certificates of deposit
(664,425
)
 

 
(664,670
)
 

FHLB borrowings
(1,444,817
)
 

 
(1,446,146
)
 

Other borrowings
(23,571
)
 

 
(23,571
)
 

Senior notes
(98,996
)
 

 
(104,134
)
 

Subordinated notes
(108,124
)
 

 
(109,693
)
 

Mortgage escrow funds
(14,972
)
 

 
(14,969
)
 

Accrued interest payable on deposits
(495
)
 

 
(495
)
 

Accrued interest payable on borrowings
(2,376
)
 

 
(2,376
)
 

Swaps
(4,323
)
 

 
(4,323
)
 


43

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of December 31, 2015:
 
December 31, 2015
 
Carrying
amount
 

Level 1 inputs
 

Level 2 inputs
 

Level 3 inputs
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
229,513

 
$
229,513

 
$

 
$

Securities available for sale
1,921,032

 

 
1,921,032

 

Securities held to maturity
722,791

 

 
734,079

 

Portfolio loans, net
7,809,215

 

 

 
7,876,064

Loans held for sale
34,110

 

 
34,110

 

Accrued interest receivable on securities
11,329

 

 
11,329

 

Accrued interest receivable on loans
20,202

 

 

 
20,202

FHLB stock and FRB stock
116,758

 

 

 

Swaps
1,839

 

 
1,839

 

Financial liabilities:

 

 

 

Non-maturity deposits
(7,974,817
)
 
(7,974,817
)
 

 

Certificates of deposit
(605,190
)
 

 
(603,634
)
 

FHLB borrowings
(1,409,885
)
 

 
(1,418,155
)
 

Other borrowings
(16,566
)
 

 
(16,430
)
 

Senior notes
(98,893
)
 

 
(105,088
)
 

Mortgage escrow funds
(13,778
)
 

 
(13,775
)
 

Accrued interest payable on deposits
(783
)
 

 
(783
)
 

Accrued interest payable on borrowings
(4,490
)
 

 
(4,490
)
 

Swaps
(1,839
)
 

 
(1,839
)
 


The following paragraphs summarize the principal methods and assumptions used by the Company to estimate the fair value of the Company’s financial instruments:
 
Loans
The estimated fair value approximates carrying value for variable-rate loans that reprice frequently and with no significant change in credit risk. The fair value of fixed-rate loans and variable-rate loans which reprice on an infrequent basis is estimated by discounting future cash flows using the current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality. An overall valuation adjustment is made for specific credit risks, as well as general portfolio credit risk.

FHLB Stock and FRB Stock
The redeemable carrying amount of these securities with limited marketability approximates their fair value.

Deposits and Mortgage Escrow Funds
In accordance with FASB Codification Topic 825 - Financial Instruments, deposits with no stated maturity (such as demand, money market and saving deposits) are assigned fair values equal to the carrying amounts payable on demand. Certificates of deposit and mortgage escrow funds are segregated by account type and original term, and fair values are estimated by discounting the contractual cash flows. The discount rate for each account grouping is equivalent to the current market rates for deposits of similar type and maturity.

These fair values do not include the value of core deposit relationships that comprise a significant portion of the Company’s deposits. We believe that the Company’s core deposit relationships provide a relatively stable, low-cost funding source that has a substantial value separate from the deposit balances.


44

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

FHLB Borrowings, Other borrowings, Senior notes and Subordinated notes
The estimated fair value approximates carrying value for short-term borrowings. The fair value of long-term fixed-rate borrowings is estimated using quoted market prices, if available, or by discounting future cash flows using current interest rates for similar financial instruments.

Other Financial Instruments
Other financial assets and liabilities listed in the table above have estimated fair values that approximate their respective carrying amounts because the instruments are payable on demand or have short-term maturities and present relatively low credit risk and interest rate risk.

The fair values of the Company’s off-balance sheet financial instruments described in the “Off-Balance Sheet Financial Instruments” section of Note 16. “Commitments and Contingencies” were estimated based on current market terms (including interest rates and fees), considering the remaining terms of the agreements and the creditworthiness of the counterparties. At March 31, 2016 and December 31, 2015, the estimated fair value of these instruments approximated the related carrying amounts, which were not material.

Accrued Interest Receivable/Payable
The carrying amounts of accrued interest approximate fair value and are classified in accordance with the related instrument.

(18) Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income (loss) (“AOCI”) were as follows as of the dates shown below:
 
March 31,
 
December 31,
 
2016
 
2015
Net unrealized holding gain (loss) on available for sale securities
$
15,066

 
$
(12,172
)
Related income tax (expense) benefit
(5,951
)
 
5,173

Available for sale securities AOCI, net of tax
9,115

 
(6,999
)
Net unrealized holding loss on securities transferred to held to maturity
(6,942
)
 
(7,226
)
Related income tax benefit
2,742

 
3,071

Securities transferred to held to maturity AOCI, net of tax
(4,200
)
 
(4,155
)
Net unrealized holding loss on retirement plans
(1,250
)
 
(1,687
)
Related income tax benefit
494

 
717

Retirement plans AOCI, net of tax
(756
)
 
(970
)
AOCI
$
4,159

 
$
(12,124
)


45

 STERLING BANCORP AND SUBSIDIARIES 
Notes to Consolidated Financial Statements (unaudited)
(Dollars in thousands, except share and per share data)
 

The following table presents the changes in each component of AOCI for the three months ended March 31, 2016 and 2015:
 
Net unrealized holding gain (loss) on available for sale securities
 
Net unrealized holding gain (loss) on securities transferred to held to maturity
 
Net unrealized holding (loss) gain on retirement plans
 
Total
The three months ended March 31, 2016
 
 
 
 
 
 
 
Balance beginning of the period
$
(6,999
)
 
$
(4,155
)
 
$
(970
)
 
$
(12,124
)
Other comprehensive gain before reclassification
16,285

 

 

 
16,285

Amounts reclassified from AOCI
(171
)
 
(45
)
 
214

 
(2
)
Total other comprehensive income
16,114

 
(45
)
 
214

 
16,283

Balance at end of period
$
9,115

 
$
(4,200
)
 
$
(756
)
 
$
4,159

The three months ended March 31, 2015
 
 
 
 
 
 
 
Balance beginning of the period
$
1,297

 
$
(4,967
)
 
$
(6,581
)
 
$
(10,251
)
Other comprehensive gain before reclassification
4,203

 

 

 
4,203

Amounts reclassified from AOCI
882

 
310

 
117

 
1,309

Total other comprehensive income
5,085

 
310

 
117

 
5,512

Balance at end of period
$
6,382

 
$
(4,657
)
 
$
(6,464
)
 
$
(4,739
)
Location in statement of operations where reclassification from AOCI is included
Net (loss) gain on sale of securities
 
Interest income on securities
 
Compensation and benefits expense
 
 
 
 
 
 
 
 
 
 
(19) Recently Issued Accounting Standards Not Yet Adopted

Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 was originally going to be effective for us on January 1, 2017; however, the FASB recently issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606) - Deferral of the Effective Date” which deferred the effective date of ASU 2014-09 by one year to January 1, 2018. We are currently evaluating the potential impact of ASU 2014-09 on our consolidated financial statements.

ASU 2015-02, “Consolidation (Topic 810) – Amendments to the Consolidation Analysis.” ASU 2015-02 implements changes to both the variable interest consolidation model and the voting interest consolidation model. ASU 2015-02 (i) eliminates certain criteria that must be met when determining whether or not fees paid to a decision maker or service provider represent a variable interest; (ii) amends the criteria for determining whether a limited partnership is a variable interest entity; and (iii)  eliminates the presumption that a general partner controls a limited partnership in the voting model. ASU 2015-02 became effective for us on January 1, 2016 and did not have a material impact on our consolidated financial statements.

ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. ASU 2015-03 became effective for the us on January 1, 2016, and did not have a material impact on our consolidated financial statements.

ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) – Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” ASU 2015-05 addresses accounting for fees paid by a customer in cloud computing arrangements such as (i) software as a service; (ii) platform as a service; (iii) infrastructure as a service; and (iv) other similar hosting

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Table of Contents

arrangements. ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 became effective for us on January 1, 2016 and did not have a material impact on our consolidated financial statements.

ASU 2015-15, “Interest – Imputation of Interest (Subtopic 835-30) – Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting." ASU 2015-15 adds SEC paragraphs pursuant to an SEC staff announcement that given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.

ASU 2015-16, “Business Combinations (Topic 805) – Simplifying the Accounting for Measurement-Period Adjustments.”  ASU 2015-16 requires that adjustments to provisional amounts that are identified during the measurement period of a business combination be recognized in the reporting period in which the adjustment amounts are determined. Furthermore, the income statement effects of such adjustments, if any, must be calculated as if the accounting had been completed at the acquisition date. The portion of the amount recorded in current-period earnings would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Under previous guidance, adjustments to provisional amounts identified during the measurement period are to be recognized retrospectively. ASU 2015-16 became effective for us on January 1, 2016 and did not have a material impact on our financial statements.

ASU 2016-02,“Leases (Topic 842).” ASU 2016-02 will, among other things, require lessees to recognize a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-2 will be effective for us on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We are currently evaluating the potential impact of ASU 2016-02 on our financial statements and our regulatory capital ratios.

ASU 2016-05, “Derivatives and Hedging (Topic 815) Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under ASC Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016-05 will be effective for us on January 1, 2017 and is not expected to have a significant impact on our financial statements.

ASU 2016-07, “Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” The amendments affect all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 simplifies the transition to the equity method of accounting by eliminating retroactive adjustment of the investment when an investment qualifies for use of the equity method, among other things. ASU 2016-07 will be effective for us on January 1, 2017 and is not expected to have a significant impact on our financial statements.

ASU 2016-08, ”Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” ASU 2016-08 was issued to clarify certain principal versus agent considerations within the implementation guidance of ASC Topic 606, “Revenue from Contracts with Customers.” The effective date and transition of ASU 2016-08 is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),”as discussed above. We are currently evaluating the potential impact of ASU 2016-08 on our financial statements.

ASU 2016-09, ”Compensation - Stock compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Under ASU 2016-09 all excess tax benefits and tax deficiencies related to share-based payment awards should be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Because excess tax benefits are no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing

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Table of Contents

earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified along with other income tax cash flows as an operating activity rather than a financing activity, as was previously the case. ASU 2016-09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU 2016-09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. ASU 2016-09 will be effective on January 1, 2017 and is not expected to have a significant impact on our financial statements.

ASU No. 2016-10,  ”Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.”ASU 2016-10 was issued to clarify ASC Topic 606, “Revenue from Contracts with Customers” related to (i) identifying performance obligations; and (ii) the licensing implementation guidance. The effective date and transition of ASU 2016-10 is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” as discussed above. We are currently evaluating the potential impact of ASU 2016-10 on our financial statements.


48

STERLING BANCORP AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Sterling Bancorp (for purposes of this Item 2, “we,” “our” and “us”) makes statements in this report, and we may from time to time make other statements, regarding our outlook or expectations for earnings, revenues, expenses and/or other financial, business or strategic matters regarding or affecting us that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “target,” “estimate,” “forecast,” “project,” by future conditional verbs such as “will,” “should,” “would,” “could” or “may,” or by variations of such words or by similar expressions. These statements are not historical facts, but instead represent our current expectations, plans or forecasts and are based on the beliefs and assumptions of management and the information available to management at the time that these disclosures were prepared.

Forward-looking statements are subject to numerous assumptions, risks (both known and unknown) and uncertainties, and other factors which change over time. Forward-looking statements speak only as of the date they are made. We do not assume any duty and do not undertake to update our forward-looking statements. Because forward-looking statements are subject to assumptions, risks, uncertainties, and other factors, actual results or future events could differ, possibly materially, from those that we anticipated in our forward-looking statements and future results could differ materially from our historical performance.

The factors described herein in Part II. Item 1A. Risk Factors and in our 2015 Form 10-K under Item 1A, Risk Factors, or otherwise described in our filings with the SEC, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations expressed in our forward-looking statements, including but not limited to:
our ability to successfully implement growth, to increase revenues faster than we grow expenses, other strategic initiatives and to integrate and fully realize cost savings and other benefits we estimate in connection with acquisitions;
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;
as a result of the HVB Merger, the Bank’s total assets exceed $10 billion, which makes the Bank subject to regulatory oversight by the Consumer Financial Protection Bureau and the Bank will also become subject to provisions of the Durbin Amendment as of June 30, 2016, which will impact the Bank’s debit card interchange fees;
our ability to make accurate assumptions and judgments about an appropriate level of allowance for loan losses and the collectability of our loan portfolio, including changes in the level and trend of loan delinquencies and write-offs that may lead to increased losses and non-performing assets in our loan portfolio, result in our allowance for loan losses not being adequate to cover actual losses, and require us to materially increase our reserves;
our ability to manage changes in market interest rates which could adversely affect our financial condition and results of operations;
our use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation;
the effects of and changes in laws and regulations (including laws and regulations concerning banking and taxes) with which we and the Bank must comply; and
our success at managing the risks involved in the foregoing and managing our business.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

The following commentary presents management’s discussion and analysis of financial condition and results of operations and is intended to assist the reader in understanding our financial condition and results of operations. The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the accompanying notes included in Part I, Item 1 of this report and with our audited consolidated financial statements and the accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2015 Form 10-K. Operating results discussed herein are not necessarily indicative of the results of any future period.

Tax-equivalent adjustments are the result of increasing income from tax-exempt securities by an amount equal to the federal taxes that would be paid if the income were fully taxable based on a 35.0% marginal effective income tax rate.

Dollar amounts in tables and the accompanying discussion that follows are stated in thousands, except for share and per share amounts and ratios.


49

STERLING BANCORP AND SUBSIDIARIES

Overview and Management Strategy
We, through our principal subsidiary, the Bank, specialize in the delivery of service and solutions to business owners, their families and consumers within the communities we serve through teams of dedicated and experienced relationship managers. The Bank offers a complete line of commercial, business and consumer banking products and services. Our financial condition and results of operations are discussed herein on a consolidated basis with the Bank and certain other subsidiaries. References to we, our or us include the Bank, depending on the context.

We focus our efforts on generating core deposit relationships, and originating high quality commercial, commercial mortgage, residential mortgage and consumer loans, mainly for our held-for-investment portfolio. We also utilize excess funding to purchase and hold investment securities. Our ability to gather low cost, core deposits allows us to compete for and originate loans at an interest rate spread over our cost of funding and generate attractive risk-adjusted returns. Our strategic objectives include generating sustainable growth in revenues and earnings by increasing new client acquisitions, expanding existing client relationships, improving asset quality and increasing operating efficiency. To achieve these goals, we are focusing on specific target markets, which include small and middle market commercial clients and consumer clients, expanding our delivery and distribution channels, creating a high productivity performance culture, controlling our operating costs and proactively managing enterprise risk. Our goal is to create a full service commercial bank that achieves top-tier performance on return on equity, return on assets and growth in earnings per share.

The Bank targets the following geographic markets: (i) the New York Metro Market, which includes Manhattan, the boroughs and Long Island; and (ii) the New York Suburban Market, which consists of Rockland, Orange, Sullivan, Ulster, Putnam, and Westchester counties in New York and Bergen County, New Jersey. Our specialty lending businesses, which include asset-based lending, factoring, payroll finance, equipment financing, residential mortgage warehouse lending, residential mortgage banking and public sector finance also generate loans and deposits in other markets across the United States. We believe the Bank operates in an attractive footprint that presents us with significant opportunities to execute our strategy.

As of March 31, 2016, we had 29 commercial relationship teams and 48 financial centers. During the three months ended March 31, 2016, we continued our financial center consolidation strategy and exited four locations. We intend to consolidate five additional locations in the second quarter of 2016 and re-allocate a portion of the capital and resource savings from these consolidations to continue recruiting and hiring new commercial banking teams and to execute our differentiated, single point of contact distribution strategy to our core target of small and middle market commercial and consumer clients. We anticipate we will continue to grow our number of commercial relationship teams by three to five teams annually and will continue to reduce our financial center locations through additional consolidations.

Recent Developments
On March 29, 2016, the Bank issued $110,000 principal amount of 5.25% fixed-to-floating rate subordinated notes through a private placement at a discount of 1.25%. The cost of issuance was $500, and at March 31, 2016 the unamortized discount was $1,876, which will be accreted to interest expense over the life of the subordinated notes, resulting in an effective yield of 5.47%. Interest is due semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2016, until April 1, 2021. From and including April 1, 2021, the subordinated notes will bear interest at a floating rate per annum equal to three-month LIBOR plus 3.937%, payable quarterly on January 1, April 1, July 1 and October 1 of each year, beginning on July 1, 2021, through maturity on April 1, 2026 or earlier redemption. The subordinated notes are redeemable by the Bank, in whole or in part, on April 1, 2021 and each interest payment date thereafter as well as in whole at any time upon certain specified events. The subordinated notes are unsecured, subordinated obligations of the Bank and are subordinated in right of payment to all of the Bank’s existing and future senior indebtedness, including claims of depositors and general creditors. The subordinated notes qualify as Tier 2 capital for regulatory purposes; see Note 15. “Stockholders’ Equity” for additional information.

On March 31, 2016, we completed the NSBC Acquisition. The NSBC Acquisition is consistent with our strategy of expanding our specialty commercial lending businesses and doubled the size of our asset-based lending portfolio to $629,796 in loans outstanding. The transaction meets all of our acquisition criteria; (i) it is expected to be accretive to earnings per share; (ii) has an estimated internal rate of return of greater than 20%; and (iii) a tangible book value earn-back period of less than 2.5 years. In addition, all of the loans are floating rate and yield over 5.00%. We will continue to evaluate potential acquisitions of specialty commercial lending businesses and loan portfolios that complement our existing businesses.

On March 31, 2016, we redeemed $220,000 of fixed rate FHLB borrowings with a weighted average rate of 4.17%. As a result of consistent growth in our short-term floating rate asset classes, which was further accelerated by the NSBC acquisition, we have substantially increased the asset sensitivity of our balance sheet. To manage our asset and liability position, we repaid these fixed rate advances and replaced them with deposits and short-term and overnight FHLB borrowings, which we believe will provde us with greater balance sheet flexibility in the current interest rate environment. We incurred a charge on extinguishment of debt associated with these repayments of $8,716, which is included in non-interest expense in the consolidated income statements.

50

STERLING BANCORP AND SUBSIDIARIES


Results for the first quarter of 2016 reflect the ongoing execution of our strategy and the positive impact the integration of the HVB Merger has had on our operating efficiency. During the quarter, our core operating efficiency ratio was 48.9%, which represented an improvement of 750 basis points relative to the quarter ended March 31, 2015. Core operating efficiency ratio is a Non-GAAP Financial Measure that is reconciled on page 70. We anticipate we will continue to identify and implement additional operating efficiencies in future periods including the potential consolidation of additional financial centers and other locations.

Critical Accounting Policies
Our accounting and reporting policies are prepared in accordance with GAAP and conform to general practices within the banking industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. While we base estimates on historical experience, current information and other factors deemed to be relevant, actual results could differ from those estimates. We consider accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management to make assumptions about matters that are highly uncertain; and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial statements. Accounting policies related to the allowance for loan losses, business combinations, goodwill, trade names and other intangible assets, deferred income taxes, and interest income are considered to be critical, as these policies involve considerable subjective judgment and estimation by management. For additional information regarding critical accounting policies, refer to Note 1. “Basis of Financial Presdntation and Summary of Significant Accounting Policies” in the notes to consolidated financial statements and the sections captioned “Critical Accounting Policies” and “Allowance for Loan Losses” in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2015 Form 10-K. There have been no significant changes in our application of critical accounting policies this quarter.

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STERLING BANCORP AND SUBSIDIARIES

Selected financial condition data, income statement data, per share data, performance ratios, capital ratios, and asset quality data and ratios for the comparable periods were as follows:
 
At or for the three months ended March 31,
Selected financial condition data
2016
 
2015
End of Period Balances:
 
 
 
Total assets
$
12,865,356

 
$
7,727,515

Tangible assets 1
12,092,966

 
7,274,817

Securities available for sale
1,894,820

 
1,214,404

Securities held to maturity
952,922

 
585,633

Portfolio loans
8,286,163

 
4,938,906

Goodwill
696,600

 
400,941

Other intangibles
75,790

 
51,757

Deposits
9,328,622

 
5,555,946

Municipal deposits (included above)
1,285,263

 
1,013,835

Borrowings
1,675,508

 
980,978

Stockholders’ equity
1,698,133

 
1,080,543

Tangible equity 1
925,743

 
627,845

Quarterly Average Balances:
 
 
 
Total assets
12,001,370

 
7,438,314

Tangible assets 1
11,253,958

 
6,999,344

Loans, gross:
 
 
 
Residential mortgage
755,564

 
531,421

Commercial real estate
3,587,341

 
1,908,582

Traditional commercial and industrial
1,381,107

 
898,839

Asset based lending
304,779

 
296,409

Payroll finance
192,428

 
158,493

Warehouse lending
248,831

 
157,038

Factored receivables
181,974

 
134,105

Equipment financing
616,995

 
423,510

Total commercial & industrial
2,926,114

 
2,068,394

ADC
179,517

 
95,567

Consumer
297,028

 
200,504

Loans, total 2
7,745,564

 
4,804,468

Interest bearing cash and cash equivalents
296,668

 
113,152

Securities (taxable)
2,139,547

 
1,379,861

Securities (non-taxable)
593,777

 
386,326

Total earning assets
10,880,356

 
6,736,422

Deposits:
 
 
 
   Non-interest bearing demand
3,009,085

 
1,503,692

   Interest bearing demand
1,607,227

 
775,714

   Savings (including mortgage escrow funds)
814,485

 
766,448

   Money market
2,866,666

 
1,851,839

   Certificates of deposit
619,154

 
452,594

Total deposits and mortgage escrow
8,916,617

 
5,350,287

Borrowings
1,274,605

 
955,677

Stockholders’ equity
1,686,274

 
1,031,809

Tangible equity 1
938,862

 
592,839

See legend on following page.

52

STERLING BANCORP AND SUBSIDIARIES

 
At or for the three months ended March 31,
Per Share Data:
2016
 
2015
Basic earnings per share
$
0.18

 
$
0.19

Diluted earnings per share
0.18

 
0.19

Core earnings per share 1
0.25

 
0.21

Dividends declared per share
0.07

 
0.07

Tangible book value per share 1
7.09

 
6.89

Shares of common stock outstanding
130,548,989

 
91,121,531

Basic weighted average common shares outstanding
129,974,025

 
87,839,029

Diluted weighted average common shares outstanding
130,500,975

 
88,252,768

Performance Ratios (annualized):
 
 
 
Return on average assets
0.80
%
 
0.91
%
Return on average equity
5.67

 
6.59

Return on average tangible assets 1
0.85

 
0.97

Return on average tangible equity 1
10.18

 
11.48

Core return on average tangible assets 1
1.15

 
1.07

Core return on average tangible equity 1
13.78

 
12.66

Core operating efficiency 1
48.88

 
56.38

Analysis of Net Interest Income:
 
 
 
Yield on loans
4.62
%
 
4.66
%
Yield on investment securities - tax equivalent 3
2.65

 
2.79

Yield on interest earning assets - tax equivalent 3
4.00

 
4.11

Cost of total deposits
0.29

 
0.23

Cost of borrowings
1.92

 
2.00

Cost of interest bearing liabilities
0.70

 
0.66

Net interest rate spread - tax equivalent basis 3
3.30

 
3.45

Net interest margin - GAAP basis
3.46

 
3.45

Net interest margin - tax equivalent basis 3
3.53

 
3.64

Capital Ratios:
 
 
 
Tier 1 leverage ratio - Company
8.61
%
 
9.55
%
Tier 1 leverage ratio - Bank only
9.16

 
10.53

Tier 1 risk-based capital ratio- Company
10.24

 
10.74

Tier 1 risk-based capital ratio - Bank only
10.89

 
12.92

Total risk-based capital ratio - Company
11.81

 
11.29

Total risk-based capital ratio - Bank only
12.60

 
13.68

Tangible equity to tangible assets - Company 1
7.66

 
8.63

_________________________
1 
See a reconciliation of non-GAAP financial measures beginning on page 69.
2 
Includes loans held for sale but excludes the allowance for loan losses.
3 Tax equivalent adjustment represents interest income earned on municipal securities divided by the applicable Federal tax rate
of 35%.



53

STERLING BANCORP AND SUBSIDIARIES

Financial Impact of Recent Acquisitions
The balances of HVHC were included in our balance sheet as of June 30, 2015, and the operating results of HVHC are included in our results of operations from that day forward. Therefore, comparisons of our financial performance are impacted by the HVB Merger as our results from operations for the three months ended March 31, 2016 reflect our combined operations, while our results for the three months ended March 31, 2015 exclude HVHC’s operating results.

The balances of NSBC were included in our balance sheet as of March 31, 2016, and the operating results of NSBC are included in our results of operations from that day forward.

Results of Operations
We reported net income of $23,766, or $0.18 per diluted common share, for the three months ended March 31, 2016, compared to net income of $16,778, or $0.19 per diluted common share, in the same period a year ago. In the three months ended March 31, 2016, we incurred an $8,716 pre-tax charge in connection with the extinguishment of $220,000 of fixed-rate FHLB borrowings; a pre-tax charge of $2,750 due to merger-related expenses and restructuring charges incurred in connection with the NSBC Acquisition and the continued consolidation of financial centers and other locations; a pre-tax net loss on sale of securities of $283; and amortization of non-compete agreements and acquired customer list intangibles of $968.

In the three months ended March 31, 2015, we incurred a pre-tax charge for HVB Merger-related expenses of $2,455; amortization of non-compete agreements and acquired customer list intangibles of $660; and recorded a pre-tax net gain on sale of securities of $1,534.

Details of the changes in the various components of net income are further discussed below.

Net Interest Income is the difference between interest income on earning assets, such as loans and securities, and interest expense on liabilities, such as deposits and borrowings, which are used to fund those assets. Net interest income is our largest source of revenue, representing 85.8% and 80.2% of total revenue in the three months ended March 31, 2016 and 2015, respectively. Net interest margin is the ratio of taxable equivalent net interest income to average earning assets for the period. The level of interest rates and the volume and mix of earning assets and interest bearing liabilities impact net interest income and net interest margin.
 
We are primarily funded by core deposits. As of March 31, 2016, we considered 91.5% of our total deposits as core deposits compared to 87.7%, in the same period a year ago. Non-interest bearing demand deposits were 32.5% of our total deposits at March 31, 2016, compared to 27.0% at March 31, 2015. This low cost funding base has had a positive impact on our net interest income and net interest margin and is expected to do so in a rising interest rate environment.

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

54

STERLING BANCORP AND SUBSIDIARIES


 
For the three months ended March 31,
 
2016
 
2015
 
Average
balance
 
Interest
 
Yield/Rate
 
Average
balance
 
Interest
 
Yield/Rate
Interest earning assets:
 
 
 
 
 
 
 
 
 
 
 
Commercial loans
$
6,692,875

 
$
78,137

 
4.70
%
 
$
4,074,841

 
$
47,755

 
4.75
%
Consumer loans
297,028

 
3,296

 
4.46
%
 
200,504

 
2,111

 
4.27
%
Residential mortgage loans
755,564

 
7,601

 
4.02
%
 
531,422

 
5,405

 
4.07
%
Total net loans 1
7,745,467

 
89,034

 
4.62
%
 
4,806,767

 
55,271

 
4.66
%
Securities taxable
2,139,547

 
12,016

 
2.26
%
 
1,379,861

 
7,632

 
2.24
%
Securities non-taxable
593,777

 
5,968

 
4.04
%
 
368,326

 
4,411

 
4.86
%
Interest earning deposits
296,668

 
311

 
0.42
%
 
113,152

 
40

 
0.14
%
FRB and FHLB stock
104,897

 
766

 
2.94
%
 
68,316

 
862

 
5.12
%
Total securities and other earning assets
3,134,889

 
19,061

 
2.45
%
 
1,929,655

 
12,945

 
2.72
%
Total interest earning assets
10,880,356

 
108,095

 
4.00
%
 
6,736,422

 
68,216

 
4.11
%
Non-interest earning assets
1,121,014

 
 
 
 
 
701,892

 
 
 
 
Total assets
$
12,001,370

 
 
 
 
 
$
7,438,314

 
 
 
 
Interest bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
$
1,607,227

 
$
1,004

 
0.25
%
 
$
775,714

 
$
140

 
0.07
%
Savings deposits 2
814,485

 
606

 
0.30
%
 
766,448

 
302

 
0.16
%
Money market deposits
2,866,666

 
3,672

 
0.52
%
 
1,851,839

 
2,019

 
0.44
%
Certificates of deposit
619,154

 
1,127

 
0.73
%
 
452,594

 
630

 
0.56
%
Total interest bearing deposits
5,907,532

 
6,409

 
0.44
%
 
3,846,595

 
3,091

 
0.33
%
Senior notes
98,928

 
1,478

 
5.98
%
 
98,532

 
1,472

 
5.98
%
Other borrowings
1,172,112

 
4,560

 
1.56
%
 
857,145

 
3,242

 
1.53
%
Subordinated notes
3,565

 
49

 
5.50
%
 

 

 
%
Total borrowings
1,274,605

 
6,087

 
1.92
%
 
955,677

 
4,714

 
2.00
%
Total interest bearing liabilities
7,182,137

 
12,496

 
0.70
%
 
4,802,272

 
7,805

 
0.66
%
Non-interest bearing deposits
3,009,085

 
 
 
 
 
1,503,692

 
 
 
 
Other non-interest bearing liabilities
123,874

 
 
 
 
 
100,541

 
 
 
 
Total liabilities
10,315,096

 
 
 
 
 
6,406,505

 
 
 
 
Stockholders’ equity
1,686,274

 
 
 
 
 
1,031,809

 
 
 
 
Total liabilities and stockholders’ equity
$
12,001,370

 
 
 
 
 
$
7,438,314

 
 
 
 
Net interest rate spread 3
 
 
 
 
3.30
%
 
 
 
 
 
3.45
%
Net interest earning assets 4
$
3,698,219

 
 
 
 
 
$
1,934,150

 
 
 
 
Net interest margin - tax equivalent
 
 
95,599

 
3.53
%
 
 
 
60,411

 
3.64
%
Less tax equivalent adjustment
 
 
(2,089
)
 
 
 
 
 
(1,544
)
 
 
Net interest income
 
 
$
93,510

 
 
 
 
 
$
58,867

 
 
Ratio of interest earning assets to interest bearing liabilities
151.5
%
 
 
 
 
 
140.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Includes the effect of net deferred loan origination fees and costs and non-accrual loans as well as prepayment fees and late charges.
2 Includes club accounts and interest bearing mortgage escrow balances.
3 Net interest rate spread represents the difference between the tax-equivalent yield on average interest earning assets and the cost of average interest bearing liabilities.
4 Net interest earning assets represents total interest earning assets less total interest bearing liabilities.


55

STERLING BANCORP AND SUBSIDIARIES

The following tables present the dollar amount of changes in interest income (on a fully tax-equivalent basis) and interest expense for the major categories of our interest earning assets and interest bearing liabilities for the periods indicated. Information is provided for each category of interest earning assets and interest bearing liabilities with respect to (i) changes attributable to changes in volume (i.e., changes in average balances multiplied by the prior period average rate); and (ii) changes attributable to rate (i.e., changes in average rate multiplied by prior period average balances). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate.
 
For the three months ended March 31,
 
2016 vs. 2015
 
Increase (Decrease)
due to
 
Total
increase
 
Volume
 
Rate
 
(decrease)
Interest earning assets:
 
 
 
 
 
Commercial loans
$
30,889

 
$
(508
)
 
$
30,381

Consumer loans
1,084

 
101

 
1,185

Residential mortgage loans
2,262

 
(66
)
 
2,196

Securities taxable
4,315

 
70

 
4,385

Securities non-taxable
2,399

 
(841
)
 
1,558

Interest earning deposits
121

 
150

 
271

FRB and FHLB stock
359

 
(455
)
 
(96
)
Total interest earning assets
41,429

 
(1,549
)
 
39,880

Interest bearing liabilities:
 
 
 
 
 
Demand deposits
255

 
609

 
864

Savings deposits 1
20

 
284

 
304

Money market deposits
1,241

 
412

 
1,653

Certificates of deposit
273

 
224

 
497

Senior notes
6

 

 
6

Other borrowings
1,251

 
67

 
1,318

Subordinated notes

 
49

 
49

Total interest bearing liabilities
3,046

 
1,645

 
4,691

Less tax equivalent adjustment
832

 
(288
)
 
544

Change in net interest income
$
37,551

 
$
(2,906
)
 
$
34,645

 
 
 
 
 
 
___________________
1 Includes club accounts and interest bearing mortgage escrow balances.

Tax-equivalent net interest income increased $35,188 to $95,599 for the three months ended March 31, 2016, compared to
$60,411 for the three months ended March 31, 2015. The increase was mainly due to an increase in average interest earning assets of $4,143,934, or 61.5%, for the three months ended March 31, 2016 relative to the comparable year period, which was due to the HVB Merger and organic growth. The tax-equivalent net interest margin decreased 11 basis point to 3.53% for the first quarter of 2016 from 3.64% in the first quarter of 2015. The decrease was mainly due to a decrease in the yield on interest earning assets, which was 4.00% in the three months ended March 31, 2016 compared to 4.11% in the three months ended March 31, 2015. The cost of interest bearing liabilities increased to 0.70% for the three months ended March 31, 2016 compared to 0.66% for the three months ended March 31, 2015.

The average balance of loans outstanding increased $2,938,700, or 61.1%, in the three months ended March 31, 2016 compared to the three months ended March 31, 2015. The increase was due to the HVB Merger and organic loan growth generated by our commercial banking teams. Loans accounted for 71.2% of average interest earning assets in the three months ended March 31, 2016, compared to 71.4% in the comparable year ago period. The average yield on loans was 4.62% in the first quarter of 2016 compared to 4.66% in the comparable period a year ago. Accretion income on loans from prior acquisitions was $5,613 and $926 in the three months ended March 31, 2016 and 2015, respectively.


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STERLING BANCORP AND SUBSIDIARIES

Tax-equivalent interest income on securities increased $5,941 to $17,984 in the three months ended March 31, 2016, compared to $12,043 in the three months ended March 31, 2015. This was mainly the result of an increase of $985,137 in the average balance of securities between the periods, which was mainly due to the HVB Merger. The tax-equivalent yield on securities was 2.65% in the first quarter of 2016 compared to 2.79% in the first quarter of 2015. The decrease in tax-equivalent yield on securities in 2016 was primarily due to the low interest rate environment, which has reduced the yield earned on newly purchased securities.

Average deposits increased $3,566,330 and were $8,916,617 in the three months ended March 31, 2016, compared to $5,350,287 for the three months ended March 31, 2015. Average interest bearing deposits increased $2,060,937 in the first quarter of 2016 compared to the first quarter of 2015. Average non-interest bearing deposits increased $1,505,393 and were $3,009,085 in the three months ended March 31, 2016, compared to $1,503,692 in the three months ended March 31, 2015. These increases were mainly due to the HVB Merger. The average cost of interest bearing deposits was 0.44% in the first quarter of 2016 compared to 0.33% in the first quarter of 2015. The average cost of total deposits was 0.29% in the first quarter of 2016 compared to 0.23% in the first quarter of 2015. The increase in the cost of deposits was mainly due to our increasing proportion of commercial deposits relative to consumer deposits, as commercial deposits usually have higher interest rates and interest expense and are more interest rate sensitive.

Average borrowings increased $318,928 to $1,274,605 in the three months ended March 31, 2016, compared to $955,677 in the same period a year ago. The increase in average borrowings was mainly due to the increase in average loan balances due to organic growth and the HVB Merger. The average cost of borrowings was 1.92% for the first quarter of 2016 compared to 2.00% in the first quarter of 2015. The decrease in the average cost of borrowings was mainly due to an increase in short-term FHLB borrowings as a percentage of total average borrowings during the period. On March 31, 2016 we redeemed $220,000 of fixed-rate FHLB borrowings with a weighted average cost of 4.17%. We redeemed these fixed rate borrowings in connection with the NSBC Acquisition, in which we acquired $320,447 of variable rate loans, which increased our asset sensitivity position. As a result of the FHLB redemption, we anticipate a decline in interest expense on FHLB borrowings of approximately $2,000 in the second quarter of 2016. This decrease will be partially offset by an increase in interest expense due to our $110,000 subordinated notes issued in March 2016.

Provision for Loan Losses. The provision for loan losses is determined as the amount to be added to the allowance for loan losses after net charge-offs have been deducted to bring the allowance to a level that is our best estimate of probable incurred credit losses inherent in the outstanding loan portfolio. In the three months ended March 31, 2016 and March 31, 2015, the provision for loan losses was $4,000 and $2,100, respectively. The provision for loan losses in 2016 and 2015 was mainly due to organic loan growth and to offset charge-offs. See the section captioned “Delinquent Loans, Troubled Debt Restructuring, Impaired Loans, Other Real Estate Owned and Classified Assets - Provision for Loan Losses” elsewhere in this discussion for further analysis of the provision for loan losses.

Non-interest income. The components of non-interest income were as follows for the periods presented below:
 
Three months ended
 
March 31,
 
2016
 
2015
Accounts receivable management / factoring commissions and other related fees
$
4,494

 
$
3,502

Mortgage banking income
2,002

 
3,157

Deposit fees and service charges
4,496

 
3,622

Net (loss) gain on sale of securities
(283
)
 
1,534

Bank owned life insurance
1,327

 
1,076

Investment management fees
1,124

 
360

Other
2,270

 
759

Total non-interest income
$
15,430

 
$
14,010


Non-interest income was $15,430 for the three months ended March 31, 2016, compared to $14,010 in the same period a year ago. Included in non-interest income is net (loss) gain on sale of securities, which was $(283) and $1,534 for the three months ended March 31, 2016 and 2015, respectively. Net (loss) gain on sale of securities is impacted significantly by changes in market interest rates and strategies we use to manage liquidity and interest rate risk. Excluding net (loss) gain on sale of securities, non-interest income was $15,713 for the first quarter of 2016 compared to $12,476 for the first quarter of 2015. The main drivers of growth

57

STERLING BANCORP AND SUBSIDIARIES

between the periods were an increase in accounts receivable management / factoring commissions and other related fees and other non-interest income, which are discussed below.

Our goal is to grow non-interest income excluding securities gains and losses to over 20% of net interest income plus non-interest income excluding securities gains and losses. This ratio was 14.4% for the first quarter of 2016 compared to 17.5% for the first quarter of 2015. We expect this ratio will decrease further once we complete the pending sale of our trust division, which is anticipated to close in the third quarter of 2016. We anticipate this decrease will be partially offset by an increase in other loan fees which is anticipated in connection with the NSBC Acquisition. We continue to evaluate potential acquisitions of specialty commercial lending and other businesses that are also fee income generators, and anticipate fee income from our public sector finance, health care asset-based lending, middle market loan syndication businesses and cash management will increase in 2016.

Accounts receivable management / factoring commissions and other related fees represents fees generated in our factoring and payroll finance businesses. In factoring, we receive a nonrefundable factoring fee, which is generally a percentage of the factored receivables or sales volume and is designed to compensate us for the bookkeeping and collection services provided and, if applicable, the credit review of the client’s customer and assumption of customer credit risk. In payroll finance, we provide outsourcing support services for clients in the temporary staffing industry. We generate fee income in exchange for providing full back-office, payroll, tax and accounting services to independently-owned temporary staffing companies. Total fee income in these businesses increased $992, or 28.3%, to $4,494 for the three months ended March 31, 2016, compared to $3,502 for the year ago period. The increase was due to organic growth and the acquisitions of Damian and FCC.

Mortgage banking income represents the residential mortgage banking and mortgage brokerage business conducted through loan production offices located principally in Brooklyn, Great Neck and New York City and through our financial centers. Mortgage banking income was $2,002 in the first quarter of 2016 compared to $3,157 in the first quarter of 2015. In the first calendar quarter of 2015, we sold $44,020 of residential mortgage loans that were previously held as portfolio loans with the objective of rebalancing our earning assets in anticipation of the HVB Merger. We recorded a gain on sale of approximately $390 that was included in mortgage banking income. Excluding this gain, mortgage banking income decreased $765, mainly due to lower mortgage refinancing activity in the first quarter of 2016 relative to the first quarter of 2015.

Deposit fees and service charges were $4,496 for the first quarter of 2016, which represented a $874 increase compared to $3,622 for the same period a year ago. The increase in deposit fees between the periods was mainly due to the HVB Merger. Deposits gathered by our commercial banking teams are generally higher balance deposits but generate lower levels of fees and service charges than retail deposits. As the proportion of deposits generated by our commercial teams increases as a percentage of total deposits, the percentage of deposit fees and services charges to total deposits is likely to decrease.

Net (loss) gain on sale of securities income represents gains earned on the sale of securities from our available for sale investment securities portfolio. In the first quarter of 2016, we sold a substantial portion of our corporate securities to reduce the overall risk-weighing of the securities portfolio. We realized a net (loss) gain on sale of securities of $(283) and $1,534 in the three months ended March 31, 2016 and 2015, respectively.

Bank owned life insurance (“BOLI”) income represents the change in the cash surrender value of life insurance policies owned by us. BOLI income was $1,327 for the first quarter of 2016 compared to $1,076 in the same period a year ago. The increase in BOLI income between the periods was mainly due to BOLI assets acquired in the HVB Merger.

Investment management fees principally represent fees from the sale of mutual funds and annuities, and since the HVB Merger also includes trust fees. These revenues were $1,124 in the first quarter of 2016 compared to $360 in the first quarter of 2015. We have recently re-branded our investment management products and have been transitioning the delivery of our investment management business through new distribution channels. Trust fee income was $853 in the first quarter of 2016; we will not continue to generate trust fee income once the sale of our trust division is completed, which is anticipated will occur in the third quarter of 2016.

Other non-interest income principally includes miscellaneous loan fees earned, letter of credit fees, swap fees and safe deposit rentals. Other non-interest income increased $1,511 to $2,270 for the first quarter of 2016 compared to $759 for the same period a year ago. The increase in the first quarter of 2016 compared to the year earlier period was mainly due to the HVB Merger and loan swap fees.

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STERLING BANCORP AND SUBSIDIARIES

Non-interest expense. The components of non-interest expense were as follows for the periods presented below:
 
Three months ended
 
March 31,
 
2016
 
2015
Compensation and employee benefits
$
30,020

 
$
23,165

Stock-based compensation plans
1,540

 
1,109

Occupancy and office operations
9,282

 
6,580

Amortization of intangible assets
3,053

 
1,399

FDIC insurance and regulatory assessments
2,258

 
1,428

OREO expense (gain)
582

 
(37
)
Merger-related expense
265

 
2,455

Loss on extinguishment of FHLB borrowings
8,716

 

Other
13,215

 
9,822

Total non-interest expense
$
68,931

 
$
45,921


Non-interest expense for the three months ended March 31, 2016 was $68,931, a $23,010 increase compared to $45,921 for the three months ended March 31, 2015. The increase between the periods was mainly due to increases in non-interest expense as a result of the HVB Merger. In addition we incurred a loss of $8,716 in connection with the prepayment of $220,000 of fixed-rate FHLB borrowings. Changes in the components of non-interest expense are discussed below.

Compensation and employee benefits expense was $30,020 for the three months ended March 31, 2016, compared to $23,165 for the three months ended March 31, 2015. At March 31, 2016, we had 1,078 full-time equivalent employees (“FTE”) at March 31, 2015, we had 840 FTE and at June 30, 2015, the date of the HVB Merger, there were 1,196 FTE. The year-over-year increase in FTE and compensation and employee benefits expense was a result of the HVB Merger, which increased FTE by 238. We anticipate further FTE reductions as we consolidate additional financial centers and complete the sale of our trust division in 2016.

Stock-based compensation plan expense was $1,540 in the first quarter of 2016 compared to $1,109 in the first quarter of 2015. The increase in stock-based compensation plan expense between the periods is due to a greater percentage of compensation paid to our executive management and senior personnel in stock awards so as to better align the interests of employees to those of our stockholders. Stock-based compensation was granted in the first quarter of 2016 for calendar year 2015 performance. For additional information related to our employee benefit plans and stock-based compensation, see Note 11. “Stock-Based Compensation” in the consolidated financial statements included elsewhere in this report.

Occupancy and office operations expense was $9,282 in the first quarter of 2016 compared to $6,580 in the first quarter of 2015. The increase between the periods was mainly due to the HVB Merger. At March 31, 2015 we had 32 financial center locations and at June 30, 2015 as a result of HVB Merger, our total financial centers increased to 59. At March 31, 2016, we have 48 financial center locations, and we anticipate an additional five financial center locations will be consolidated in 2016.

Amortization of intangible assets mainly includes amortization of core deposit intangible assets, customer lists and non-compete agreements. Amortization of intangible assets was $3,053 in the three months ended March 31, 2016 and consisted of $1,422 of HVB Merger core deposit intangible asset amortization, $1,084 of Provident Merger intangible amortization and amortization from other acquisitions of $547. The increase in amortization expense was due to the HVB Merger. The remaining Provident Merger non-compete agreements will expire in the fourth quarter of 2016. In connection with the NSBC Acquisition we recorded a customer list intangible which will begin amortizing in the second quarter of 2016 and will increase amortization expense by $187 per quarter. See Note 6. “Goodwill and Other Intangible Assets” in the consolidated financial statements included elsewhere in this report.

FDIC insurance and regulatory assessments expense (gain) was $2,258 for the first quarter of 2016 compared to $1,428 for the first quarter of 2015. The increase between the periods was mainly due to the increase in our total assets as a result of our organic growth and the HVB Merger. In accordance with provisions of the Dodd-Frank Act the Bank will be subject to greater FDIC premiums going forward as banks with total assets of $10 billion or more are responsible to fund the increase from 1.15% to 1.35% in the FDIC’s Deposit Insurance Fund.


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STERLING BANCORP AND SUBSIDIARIES

Other real estate owned (“OREO”) expense includes maintenance costs, taxes, insurance, write-downs (subsequent to any write-down at the time of foreclosure or transfer to OREO), and gains and losses from the disposition of OREO. OREO includes real estate assets that have been foreclosed and financial center locations that are held for sale. OREO expense was $582 for the three months ended March 31, 2016, compared to $(37) in the three months ended March 31, 2015. OREO activity in the first quarter of 2016 included $164 of write-downs in the value of OREO, based on receipt of updated appraisals, and payment of property taxes of $373. Property taxes are generally paid in the first and third quarter, which causes a seasonal increase in OREO expense relative to other quarters.

Merger-related expense was $265 for the three months ended March 31, 2016 compared to $2,455 for the three months ended March 31, 2015. The balance in 2016 represented professional fees associated with the NSBC Acquisition. In the first three months of 2015 we incurred merger-related expense of $1,790 in connection with the acquisition of Damian for legal fees, severance and retention, and fixed asset impairments. We also incurred approximately $660 of charges associated with the HVB Merger, which consisted mainly of professional fees and severance compensation.

Loss on extinguishment of FHLB borrowings expense for the three months ended March 31, 2016 was $8,716, compared to $0 for the three months ended March 31, 2015. We repaid $220,000 of fixed rate FHLB borrowings with a weighted average interest rate of 4.17%. These borrowings were replaced with deposits and short-term and overnight FHLB borrowings, which we believe provides us with greater balance sheet flexibility in the current interest rate environment.

Other non-interest expense for the three months ended March 31, 2016 was $13,215 compared to $9,822 for the three months ended March 31, 2015. The increase was mainly related to the HVB Merger. In addition, in the first quarter of 2016 we recorded a restructuring charge of $2,455 in connection with the NSBC Acquisition and the continued consolidation of financial centers and other locations. See Note 13. “Other Non-Interest Expense” in the consolidated financial statements for details on significant components.

Income Tax expense was $12,243 for the three months ended March 31, 2016 and was $8,078 for the three months ended March 31, 2015, which represented an effective income tax rate of 34.0% and 32.5%, respectively. Our effective tax rate differs from the 35% federal statutory rate mainly due to the effect of tax exempt interest from securities and BOLI income. See Note 10. “Income Taxes” in the consolidated financial statements included elsewhere in this report.


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STERLING BANCORP AND SUBSIDIARIES

Portfolio Loans

The following table sets forth the composition of our loan portfolio, excluding loans held for sale, by type of loan at the periods indicated.
 
March 31, 2016
 
December 31, 2015
 
Amount
 
%
 
Amount
 
%
Commercial:
 
 
 
 
 
 
 
Commercial & industrial (“C&I”):
 
 
 
 
 
 
 
Traditional commercial & industrial
$
2,003,839

 
24.2
%
 
$
1,681,704

 
21.4
%
Payroll finance
199,119

 
2.4

 
221,831

 
2.8

Warehouse lending
341,790

 
4.1

 
387,808

 
4.9

Factored receivables
215,015

 
2.6

 
208,382

 
2.7

Equipment financing
656,775

 
7.9

 
631,303

 
8.0

Total C&I
3,416,538

 
41.2

 
3,131,028

 
39.8

Commercial mortgage:
 
 
 
 
 
 
 
Commercial real estate
2,790,145

 
33.7

 
2,733,351

 
34.8

Multi-family
886,069

 
10.7

 
796,030

 
10.1

Acquisition, development & construction (“ADC”)
179,517

 
2.2

 
186,398

 
2.4

Total commercial mortgage
3,855,731

 
46.6

 
3,715,779

 
47.3

Total commercial
7,272,269

 
87.8

 
6,846,807

 
87.1

Residential mortgage
718,733

 
8.6

 
713,036

 
9.1

Consumer
295,161

 
3.6

 
299,517

 
3.8

Total portfolio loans
8,286,163

 
100.0
%
 
7,859,360

 
100.0
%
Allowance for loan losses
(53,014
)
 
 
 
(50,145
)
 
 
Total portfolio loans, net
$
8,233,149

 
 
 
$
7,809,215

 
 

Overview. Total portfolio loans, net, increased $423,934 to $8,233,149 at March 31, 2016, compared to $7,809,215 at December 31, 2015. At March 31, 2016, commercial loans comprised 41.2% of the loan portfolio compared to 39.8% at December 31, 2015. Commercial mortgage loans comprised 46.6% and 47.3% of the loan portfolio at March 31, 2016 and December 31, 2015, respectively.

Commercial loans increased $285,510, or 9.1%, in the first quarter of 2016 compared to December 31, 2015. This included $312,632 of asset-based loans acquired from NSBC. Partially offsetting the growth from the NSBC Acquisition were seasonal declines in payroll finance and warehouse lending, in which loans outstanding usually peak in the third and fourth quarters. The balance of payroll finance loans and warehouse lending decreased by $68,730 between December 31, 2015 and March 31, 2016. Included in C&I loans at March 31, 2016 were $629,796 of asset-based loans which combined with payroll finance, warehouse lending, factored receivables and Equipment financing comprise our specialty lending portfolio. This portfolio totaled $2,042,495 at March 31, 2016 compared to $1,759,538 at December 31, 2015.

Commercial mortgage loans increased $139,952, or 3.8%, in the three months ended March 31, 2016, compared to December 31, 2015. The main drivers of growth have been strong commercial real estate market conditions in the greater New York metropolitan area and higher origination volumes given our increased number of commercial banking teams.

ADC loans, which is a component of commercial mortgage loans, decreased $6,881 in the three months ended March 31, 2016. We originate ADC loans on an exception basis only to select clients within the Bank’s immediate footprint.

Residential mortgage loans increased $5,697 to $718,733 at March 31, 2016, compared to $713,036 at December 31, 2015. The majority of our residential mortgage loan originations are held for sale and sold in the secondary markets to various investors. We retain newly originated residential mortgage loans on an exception basis to select clients.


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STERLING BANCORP AND SUBSIDIARIES

Delinquent Loans, Troubled Debt Restructuring, Impaired Loans, Other Real Estate Owned and Classified Assets

Past Due, Non-Performing Loans, Non-Performing Assets (Risk Elements). The table below sets forth the amounts and categories of our non-performing assets (“NPAs”) at the dates indicated.
 
March 31,
 
December 31,
 
2016
 
2015
Non-accrual loans:
 
 
 
C&I
$
29,760

 
$
10,142

Payroll finance
57

 

Factored receivables
212

 
220

Equipment financing
2,578

 
1,644

Commercial real estate
17,809

 
20,742

Multi-family
4,041

 
1,717

ADC
4,016

 
3,700

Residential mortgage
17,853

 
19,680

Consumer
8,110

 
7,892

Accruing loans past due 90 days or more
1,002

 
674

Total non-performing loans
85,438

 
66,411

OREO
14,527

 
14,614

Total non-performing assets
$
99,965

 
$
81,025

TDRs accruing and not included above
$
16,034

 
$
13,701

Ratios:
 
 
 
Non-performing loans (“NPLs”) to total loans
1.03
%
 
0.84
%
NPAs to total assets
0.78

 
0.68


NPLs include non-accrual loans and accruing loans past due 90 days or more. NPAs include NPLs and OREO. At March 31, 2016, total NPLs increased $19,027 to $85,438 compared to $66,411 at December 31, 2015. This was due mainly to one taxi medallion relationship with a balance of $23,907, which was placed on non-accrual during the quarter. Non-accrual loans were $84,436 and loans 90 days past due and still accruing interest which were well secured and in the process of collection were $1,002. Non-accrual loans increased $18,699 from December 31, 2015. Loans past due 90 days or more and still accruing increased $328.
 
TDRs. We have formally modified loans to certain borrowers who experienced financial difficulty. If the terms of the modification include a concession, as defined by GAAP, the loan is considered a TDR, which is also considered an impaired loan. Nearly all of these loans are secured by real estate. Total TDRs were $21,844 at March 31, 2016, of which $5,810 were non-accrual, none were 90 days past due and $16,034 were performing according to their terms and accruing interest income. TDRs still accruing interest income are loans modified for borrowers that have experienced financial difficulties but are performing in accordance with the terms of their loan prior to the modification. Loan modification concessions may include actions such as extension of the maturity date or the lowering of interest rates and monthly payments. As of March 31, 2016, there were no commitments to lend additional funds to borrowers with loans that have been classified as TDRs.

OREO. Real estate acquired as a result of foreclosure or by deed in lieu of foreclosure is classified as OREO until such time as it is sold. In addition, financial centers that were closed or consolidated that are held for sale are also classified as OREO. When real estate is transferred to OREO, it is recorded at fair value less costs to sell. If the fair value less cost to sell is less than the loan balance, the difference is charged against the allowance for loan losses. If the fair value of a financial center that we hold for sale is less than its prior carrying value, we recognize a charge included in other operating expense to reduce the recorded value of the investment to fair value, less costs to sell. At March 31, 2016, we had 41 OREO properties with a recorded balance of $14,527. After transfer to OREO, we regularly update the fair value of the property. Subsequent declines in fair value are charged to current earnings and included in other non-interest expense as part of OREO expense.

Classification of Assets. Our policies, consistent with regulatory guidelines, provide for the classification of loans and other assets that are considered to be of lesser quality such as “substandard”, “doubtful”, or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified as “substandard” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Assets classified as “loss” are those considered uncollectible and of such little

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STERLING BANCORP AND SUBSIDIARIES

value that their continuance as assets is not warranted and are charged-off. Assets that do not expose us to risk sufficient to warrant classification in one of the aforementioned categories, but which possess potential weaknesses that deserve our close attention, are designated as “special mention”. As of March 31, 2016, we had $101,559 of loans designated as “special mention” compared to $68,003 at December 31, 2015. The increase was mainly due to $30,926 of loans from the NSBC Acquisition that are performing but were designated as special mention loans under our underwriting methodology during our due diligence process.

Our determination as to the classification of our assets and the amount of our loan loss allowance are subject to review by our regulators, which can order the establishment of an additional valuation allowance. Management regularly reviews our asset portfolio to determine whether any assets require classification in accordance with applicable regulations. On the basis of management’s review of our assets at March 31, 2016, classified assets consisted of loans of $132,475 and OREO of $14,527. Classified loans were $130,378 at December 31, 2015.

Taxi Medallion Loans
At March 31, 2016, we had $63,565, or 0.77%, of our total portfolio loans collateralized by taxi medallions. In the first quarter of 2016, we placed one of our four taxi medallion borrower relationships in the amount of $23,907 on non-accrual. This relationship is was previously classified substandard during the quarter ended December 31, 2015. We continue to closely monitor the collateral values, cash flows and performance of these loans and are working with our borrowers to reduce these outstanding balances.

Allowance for Loan Losses.
The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses that have been incurred within the existing portfolio of loans. The allowance, in the judgment of management, is necessary to reserve for estimated loan losses and risks inherent in the loan portfolio. Our allowance for loan loss methodology includes allowance allocations calculated in accordance with ASC Topic 310, “Receivables” and allowance allocations calculated in accordance with ASC Topic 450, “Contingencies.” Accordingly, the methodology is based on historical loss experience by type of credit and internal risk grade, specific homogeneous risk pools and specific loss allocations, with adjustments for current events and conditions. The Company’s process for determining the appropriate level of the allowance for loan losses is designed to account for credit deterioration as it occurs. The provision for loan losses reflects loan quality trends, including the levels of, and trends related to, non-accrual loans, past due loans, potential problem loans, classified and criticized loans and net charge-offs or recoveries and loan documentation exceptions, among other factors. See Note 5. “Allowance for Loan Losses” in the notes to consolidated financial statements included elsewhere in this report for further information regarding the allowance for loan losses.

The allowance for loan losses increased from $50,145 at December 31, 2015 to $53,014 at March 31, 2016, as the provision for loan losses exceeded net charge-offs by $2,869. The allowance for loan losses at March 31, 2016 represented 62.0% of non-performing loans and 0.64% of total portfolio loans. At December 31, 2015, the allowance for loan losses represented 75.5% of non-performing loans and 0.64% of total portfolio loans. Loans acquired in prior merger transactions were recorded with a fair value adjustment as of the acquisition date that included estimated lifetime credit losses and interest rate adjustments, among other factors (the “loan mark”). The remaining balance of the loan mark at March 31, 2016 was $44,202. A substantial portion of portfolio loans covered by the loan mark continue to carry no allowance for loan losses. The total valuation balances recorded against portfolio loans to adjusted gross portfolio loans was 1.17% at March 31, 2016 compared to 1.16% at December 31, 2015.

Allocation of Allowance for Loan Losses. The following table sets forth the allowance for loan losses allocated by loan category, the total loan balances by category (excluding loans held for sale), and the percent of loans in each category to total loans at the dates indicated. The allowance for loan losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.

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STERLING BANCORP AND SUBSIDIARIES

 
March 31, 2016
 
December 31, 2015
 
Allowance
for loan
losses
 
Loan
balance
 
% of total loans
 
Allowance
for loan
losses
 
Loan
balance
 
% of total loans
C&I
$
14,268

 
$
2,003,839

 
24.2
%
 
$
13,262

 
$
1,681,704

 
21.4
%
Payroll finance
1,546

 
199,119

 
2.4

 
1,936

 
221,831

 
2.8

Warehouse lending
520

 
341,790

 
4.1

 
589

 
387,808

 
4.9

Factored receivables
1,407

 
215,015

 
2.6

 
1,457

 
208,382

 
2.7

Equipment financing
5,393

 
656,775

 
7.9

 
4,925

 
631,303

 
8.0

Commercial real estate
15,770

 
2,790,145

 
33.7

 
13,861

 
2,733,351

 
34.8

Multi-family
2,996

 
886,069

 
10.7

 
2,741

 
796,030

 
10.1

ADC
2,157

 
179,517

 
2.2

 
2,009

 
186,398

 
2.4

Residential mortgage
4,850

 
718,733

 
8.7

 
5,007

 
713,036

 
9.1

Consumer
4,107

 
295,161

 
3.6

 
4,358

 
299,517

 
3.8

Total
$
53,014

 
$
8,286,163

 
100.0
%
 
$
50,145

 
$
7,859,360

 
100.0
%

Impaired Loans. A loan is impaired when it is probable we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loan values are based on one of three measures: (i) the present value of expected future cash flows discounted at the loan’s effective interest rate; (ii) the loan’s observable market price; or (iii) the fair value of the collateral if the loan is collateral dependent. If the measure of an impaired loan is less than its recorded investment, the Bank’s practice is to write-down the loan against the allowance for loan losses so the recorded investment matches the impaired value of the loan. Impaired loans generally include a portion of non-performing loans and accruing and performing TDR loans. At March 31, 2016, we had $55,367 in impaired loans compared to $28,372 at December 31, 2015. The increase between March 31, 2016 and December 31, 2015 was mainly due to the taxi medallion loan relationship discussed above.

PCI Loans. A PCI loan is an acquired loan that has demonstrated evidence of deterioration in credit quality subsequent to origination. As of March 31, 2016, the balance of PCI loans was $117,615 compared to $85,293 at December 31, 2015. The increase included PCI loans acquired in the NSBC Acquisition of $37,823, and was offset mainly by repayments of PCI loans from prior acquisitions. At March 31, 2016 and December 31, 2015, we held $17,452 and $20,025, respectively, of PCI loans, which are accounted for under the cost-recovery method and were included in our non-accrual loan totals above. The decline between the periods was mainly due to a charge-off against the non-accretable difference established on a commercial real estate loan. The remaining PCI loans of $100,163 and $65,268 at March 31, 2016 and December 31, 2015, respectively, are accounted for under applicable guidance which results in an accretable yield that represents the amount of expected cash flows that exceeds the initial investment in the loan. See the tables of loans evaluated for impairment by segment and changes in accretable yield for PCI loans in Note 4. “Portfolio Loans” in the notes to consolidated financial statements for additional information.

Provision for Loan Losses. We recorded $4,000 in loan loss provision for the three months ended March 31, 2016, compared to $2,100 for the three months ended March 31, 2015. Net charge-offs for the three months ended March 31, 2016 were $1,131, or 0.06% of average loans on an annualized basis, compared to net charge-offs of $1,590 or 0.13% of average loans on an annualized basis for the three months ended March 31, 2015. The increase in the provision for loan losses between the periods was mainly due to organic growth in the loan portfolio as well as loans from prior acquisitions that are now subject to our allowance for loan losses.

Changes in Financial Condition between March 31, 2016 and December 31, 2015
Total assets increased $909,404, or 7.6%, to $12,865,356 at March 31, 2016, compared to $11,955,952 at December 31, 2015. This increase was mainly due to the following:
Total portfolio loans increased by $426,803, or 5.4%, to $8,286,163 at March 31, 2016, compared to $7,859,360 at December 31, 2015. In addition to organic growth, portfolio loans increased by $320,447 as a result of the NSBC Acquisition. We also acquired and recorded $35,844 of additional assets in the NSBC Acquisition.
Total investment securities increased by $203,919, or 7.7%, to $2,847,742 at March 31, 2016, compared to $2,643,823 at December 31, 2015. We mainly acquired tax-exempt securities issued by New York State, New York City and other municipal entities in New York. Investment securities were 22.1% of total assets at March 31, 2016 and December 31, 2015.
Cash and cash equivalents increased by $257,217 to $486,730 at March 31, 2016, compared to $229,513 at December 31, 2015. The increase was mainly due to higher deposit inflows that occurred late in the first quarter of 2016.


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STERLING BANCORP AND SUBSIDIARIES

Total liabilities increased $876,344, or 8.5%, to $11,167,223 at March 31, 2016, compared to $10,290,879 at December 31, 2015. This increase was mainly due to the following:
Total deposits increased $748,615, or 8.7%, to $9,328,622 at March 31, 2016, compared to $8,580,007 at December 31, 2015. Our core retail, commercial and municipal transaction, money market and savings accounts were $8,535,389, which represented 91.5% of our total deposit balances. The increase in deposits was driven by our commercial relationships and teams as several of our recent commercial banking hires are more deposit-focused.
FHLB borrowings increased $34,932, to $1,444,817 at March 31, 2016, compared to $1,409,885 at December 31, 2015. The increase in borrowings was mainly related to the increase in assets between the periods.
We issued $108,124 in subordinated notes at the Bank on March 29, 2016, which are discussed in more detail in “Recent Developments” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and in Note 8. “Borrowings” to the consolidated financial statements included elsewhere in this report.
 
Supplemental Reporting of Non-GAAP Financial Measures
Results for the first quarter of 2016 were impacted by a $8,716 pre-tax charge in connection with the extinguishment of $220,000 of fixed-rate FHLB borrowings; a pre-tax charge of $2,750 due to merger-related expenses and restructuring charges incurred in connection with the NSBC Acquisition and the continued consolidation of our financial centers and other locations; a pre-tax net loss on sale of securities of $283; and amortization of non-compete agreements and acquired customer list intangibles of $968. Excluding the impact of these items, core net income was $32,159, or $0.25 per diluted share.

The non-GAAP financial measures presented below are used by management and the Board of Directors on a regular basis in addition to our GAAP results to facilitate the assessment of our financial performance and to assess our performance compared to our annual budget and strategic plans. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors, analysts, regulators and others information that we use to manage and evaluate our performance each period. This information supplements our GAAP reported results, and should not be viewed in isolation from, or as a substitute for, our GAAP results.
 
March 31,
 
2016
 
2015
The following table shows the reconciliation of stockholders’ equity to tangible equity and the tangible equity ratio 1:
Total assets
$
12,865,356

 
$
7,727,515

Goodwill and other intangibles
(772,390
)
 
(452,698
)
Tangible assets
12,092,966

 
7,274,817

Stockholders’ equity
1,698,133

 
1,080,543

Goodwill and other intangibles
(772,390
)
 
(452,698
)
Tangible stockholders’ equity
925,743

 
627,845

Common stock outstanding at period end
130,548,989

 
91,121,531

Tangible equity as a % of tangible assets
7.66
%
 
8.63
%
Tangible book value per share
$
7.09

 
$
6.89

______________
See legend on page 71.

65

STERLING BANCORP AND SUBSIDIARIES

 
For the three months ended March 31,
 
2016
 
2015
The following table shows the reconciliation of core net income and core earnings per share 2:
Income before income tax expense
$
36,009

 
$
24,856

Income tax expense
12,243

 
8,078

Net income
23,766

 
16,778

 
 
 
 
Net loss (gain) on sale of securities
283

 
(1,534
)
Merger-related expense
265

 
2,455

Charge for asset write-downs, banking systems conversion, retention and severance
2,485

 
971

Loss on extinguishment of FHLB borrowings
8,716

 

Amortization of non-compete agreements and acquired customer lists
968

 
660

Total charges
12,717

 
2,552

Income tax expense
(4,324
)
 
(829
)
Total non-core charges net of taxes
8,393

 
1,723

Core net income
$
32,159

 
$
18,501

 
 
 
 
Weighted average diluted shares
130,500,975

 
88,252,768

Diluted EPS as reported
$
0.18

 
$
0.19

Core diluted EPS (excluding total charges)
0.25

 
0.21

 
For the three months ended March 31,
 
2016
 
2015
The following table shows the reconciliation of the core operating efficiency ratio 3:
Net interest income
$
93,510

 
$
58,867

Non-interest income
15,430

 
14,010

Total net revenue
108,940

 
72,877

Tax-equivalent adjustment on securities interest income
2,091

 
1,544

Net loss (gain) on sale of securities
283

 
(1,534
)
Core total revenue
111,314

 
72,887

Non-interest expense
68,931

 
45,921

Merger-related expense
(265
)
 
(2,455
)
Charge for asset write-downs, banking systems conversion, retention and severance
(2,485
)
 
(971
)
Loss on extinguishment of FHLB borrowings
(8,716
)
 

Amortization of intangible assets
(3,053
)
 
(1,399
)
Core non-interest expense
54,412

 
41,096

Core operating efficiency ratio
48.9
%
 
56.4
%
 
For the three months ended March 31,
 
2016
 
2015
The following table shows the reconciliation of return on tangible assets and core return on tangible assets 4:
Average assets
$
12,001,370

 
$
7,438,314

Average goodwill and other intangibles
(747,412
)
 
(438,970
)
Average tangible assets
11,253,958

 
6,999,344

Net income
23,766

 
16,778

Net income, if annualized
95,586

 
68,044

Return on average tangible assets
0.85
%
 
0.97
%
Core net income
$
32,159

 
$
18,501

Annualized core net income
129,343

 
75,032

Core return on average tangible assets
1.15
%
 
1.07
%

66

STERLING BANCORP AND SUBSIDIARIES

 
For the three months ended March 31,
 
2016
 
2015
The following table shows the reconciliation of return on average tangible equity and core return on average tangible equity 5:
Average stockholders’ equity
$
1,686,274

 
$
1,031,809

Average goodwill and other intangibles
(747,412
)
 
(438,970
)
Average tangible stockholders’ equity
938,862

 
592,839

Net income (loss)
23,766

 
16,778

Net income (loss), if annualized
95,586

 
68,044

Return on average tangible equity
10.18
%
 
11.48
%
Core net income
$
32,159

 
$
18,501

Annualized core net income
129,343

 
75,032

Core return on average tangible equity
13.78
%
 
12.66
%

1 Tangible equity as a % of tangible assets provides information to help assess our capital position and financial strength. We believe tangible book measures improve comparability to other banking organizations that have not engaged in acquisitions that have resulted in the accumulation of goodwill and other intangible assets.

2 Core net income and core earnings per share present a summary of our earnings to exclude certain non-core revenues and non-core expenses to help in assessing our core profitability.

3 The core operating efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense by total net revenue.
It is a measure we use to assess our core operating performance.

4 Return on tangible assets and the core return on tangible assets measures provide information to help assess our profitability.

5 Return on average tangible equity and core return on average tangible equity measures provide information to evaluate the use of our tangible equity.

Liquidity and Capital Resources

Capital. Stockholders’ equity was $1,698,133 at March 31, 2016, an increase of $33,060 relative to December 31, 2015. The increase was mainly the result of net income of $23,766 and an increase in other comprehensive income of $16,283, which was primarily due to a change in the fair value of our available for sale securities portfolio, and stock option exercises and stock-based compensation, which totaled $853. These increases were partially offset by declared dividends of $9,076.

We paid dividends of $0.07 per common share in each quarter of 2015, in the first quarter of 2016, and the Board of Directors declared a dividend of $0.07 per common share on April 26, 2016 which is payable May 23, 2016 to our holders as of the record date of May 6, 2016.

On February 11, 2015, we completed a public offering of 6.9 million shares of common stock at an offering price of $13.00 per share for gross proceeds of $89,700 and net proceeds, after underwriting discounts, commissions and other costs of issuance of $84,990. The net proceeds from the offering were contributed as equity capital to the Bank. The use of proceeds was for general corporate purposes, which included the acquisition of commercial specialty lending businesses. We used a portion of the proceeds of the offering to fund the acquisitions of Damian and FCC.

Basel III Capital Rules. The Basel III Capital Rules became effective for us on January 1, 2015 (subject to a phase-in period for certain provisions.) The rules are discussed in Note 15. “Stockholders’ Equity - Regulatory Capital Requirements” in the consolidated financial statements included elsewhere in this report.

Liquidity. Liquidity measures the ability to meet current and future cash flow needs as they become due. The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits and to take advantage of interest rate market opportunities. The ability of a financial institution to meet its current financial obligations is a function of its balance sheet structure, its ability to liquidate assets and its access to alternative sources of funds. The objective of our liquidity management is to manage cash flow and liquidity reserves so that they are adequate to fund our operations and to meet obligations and other commitments on a timely basis and at a reasonable cost. We seek to achieve this objective and ensure that funding needs are met by

67

STERLING BANCORP AND SUBSIDIARIES

maintaining an appropriate level of liquid funds through asset/liability management, which includes managing the mix and time to maturity of financial assets and financial liabilities on our balance sheet. Our liquidity position is enhanced by our ability to raise additional funds as needed in the wholesale markets.

Asset liquidity is provided by liquid assets which are readily marketable or pledgeable or which will mature in the near future. Liquid assets include cash, interest-bearing deposits in banks, securities available for sale, cash flow from securities held to maturity and maturities of securities held to maturity.

Our ability to access liabilities in a timely fashion is provided by access to funding sources which include core deposits, federal funds purchased and repurchase agreements. The liquidity position is continuously monitored and adjustments are made to the balance between sources and uses of funds as deemed appropriate. Liquidity risk management is an important element in our asset/liability management process. We regularly model liquidity stress scenarios to assess potential liquidity outflows or funding problems resulting from economic activity, volatility in the financial markets, unexpected credit events or other significant occurrences. These scenarios are incorporated into our contingency funding plan, which provides the basis for the identification of our liquidity needs. As of March 31, 2016, management is not aware of any events that are reasonably likely to have a material adverse effect on our liquidity, capital resources or operations. In addition, management is not aware of any regulatory recommendations regarding liquidity, including the Basel III liquidity framework, which, if implemented, would have a material adverse effect on us.

At March 31, 2016, the Bank had $486,730 in cash and cash equivalents on hand and unused borrowing capacity at the FHLB of $963,416. In addition, the Bank may purchase additional federal funds from other institutions and enter into additional repurchase agreements. The Bank had $1,005,295 of securities available to pledge as collateral as of March 31, 2016.

We are a bank holding company and do not conduct operations. Our primary sources of liquidity are dividends received from the Bank and borrowings from outside sources. Banking regulations may limit the amount of dividends that may be paid by the Bank. At March 31, 2016, the Bank had capacity to pay up to $66,516 of dividends. At March 31, 2016, we had cash on hand of $21,231.

In September 2015, we renewed the Credit Facility. The use of proceeds are for general corporate purposes. The Credit Facility has not been used and requires us and the Bank to maintain certain ratios related to capital, non-performing assets to capital, reserves to non-performing loans and debt service coverage. We and the Bank were in compliance with all requirements at March 31, 2016.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Management believes that our most significant form of market risk is interest rate risk. The general objective of our interest rate risk management is to determine the appropriate level of risk given our business strategy, and then manage that risk in a manner that is consistent with our policy to limit the exposure of our net interest income to changes in market interest rates. The Bank’s Asset/Liability Management Committee (“ALCO”), which consists of certain members of senior management, evaluates the interest rate risk inherent in certain assets and liabilities, our operating environment, and capital and liquidity requirements, and modifies our lending, investing and deposit gathering strategies accordingly. A committee of our Board of Directors reviews ALCO’s activities and strategies, the effect of those strategies on our net interest margin, and the effect that changes in market interest rates would have on the economic value of our loan and securities portfolios, as well as the intrinsic value of our deposits and borrowings.

We actively evaluate interest rate risk in connection with our lending, investing, and deposit activities. We emphasize the origination of commercial real estate loans, C&I loans, residential fixed-rate mortgage loans that are repaid monthly and bi-weekly, and adjustable-rate residential and consumer loans. Depending on market interest rates and our capital and liquidity position, we may retain all of the fixed-rate, fixed-term residential mortgage loans that we originate or we may sell or securitize all, or a portion of such longer-term loans, generally on a servicing-released basis. We also invest in shorter term securities, which generally have lower yields compared to longer-term investments. Shortening the average maturity of our interest-earning assets by increasing our investments in shorter-term loans and securities may help us to better match the maturities and interest rates of our assets and liabilities, thereby reducing the exposure of our net interest income to changes in market interest rates. These strategies may adversely affect net interest income due to lower initial yields on these investments in comparison to longer-term, fixed-rate loans and investments.

Management monitors interest rate sensitivity primarily through the use of a model that simulates net interest income (“NII”) under varying interest rate assumptions. Management also evaluates this sensitivity using a model that estimates the change in our and the Bank’s economic value of equity (“EVE”) over a range of interest rate scenarios. EVE is the present value of expected cash flows from assets, liabilities and off-balance sheet contracts. The model assumes estimated loan prepayment rates, reinvestment rates and deposit decay rates that management believes is reasonable, based on historical experience during prior interest rate changes.


68

STERLING BANCORP AND SUBSIDIARIES

Estimated Changes in EVE and NII. The table below sets forth, as of March 31, 2016, the estimated changes in our (i) EVE that would result from the designated instantaneous changes in the forward rate curves; and (ii) NII that would result from the designated instantaneous changes in the U.S. Treasury yield curve. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied on as indicative of actual results.

Interest rates
 
Estimated
 
Estimated change in EVE
 
Estimated
 
Estimated change in NII
(basis points)
 
EVE
 
Amount
 
Percent
 
NII
 
Amount
 
Percent
 
 
(Dollars in thousands)
+300
 
$
1,500,709

 
$
(43,857
)
 
(2.8
)%
 
$
439,556

 
$
46,278

 
11.8
 %
+200
 
1,526,669

 
(17,897
)
 
(1.2
)
 
423,992

 
30,714

 
7.8

+100
 
1,548,983

 
4,417

 
0.3

 
409,150

 
15,872

 
4.0

0
 
1,544,566

 

 

 
393,278

 

 

-100
 
1,502,045

 
(42,521
)
 
(2.8
)
 
365,351

 
(27,927
)
 
(7.1
)

The table above indicates that at March 31, 2016, in the event of an immediate 200 basis point increase in interest rates, we would expect to experience a (1.2)% decrease in EVE and a 7.8% increase in NII. Due to the current level of interest rates, management is unable to reasonably model the impact of decreases in interest rates on EVE and NII beyond -100 basis points.

Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in EVE and NII require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The EVE and NII table presented above assumes that the composition of our interest-rate sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and, accordingly, the data does not reflect any actions management may undertake in response to changes in interest rates. The table also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or the re-pricing characteristics of specific assets and liabilities. Accordingly, although the EVE and NII table provides an indication of our sensitivity to interest rate changes at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes that market interest rates may have on our net interest income. Actual results will likely differ.

During the first quarter of 2016, the federal funds target rate remained in a range of 0.25 - 0.50%. U.S. Treasury yields in the two year maturities decreased 33 basis points from 1.06% to 0.73% over the three months ended December 31, 2015 while the yield on U.S. Treasury 10-year notes decreased 49 basis points from 2.27% to 1.78% over the same three month period. The greater decrease in rates on longer-term maturities relative to the decrease in rates on short-term maturities resulted in a flatter 2-10 year treasury yield curve at March 31, 2016 compared to December 31, 2015.  At its March 2016 meeting, the Federal Open Markets Committee (the “FOMC”) stated that the stance of monetary policy remains accommodative.  The FOMC further stated that it expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate and the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.  However, should economic conditions improve at a faster pace than anticipated, the FOMC could increase the federal funds target rate quicker. This could cause the shorter end of the yield curve to rise disproportionately relative to the longer end, thereby resulting in an even flatter yield curve which may result in greater margin compression.

Item 4. Controls and Procedures

The Company’s management, including the principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report.  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in our reports filed with the SEC under the Securities Exchange Act of 1934, as amended, is: (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.


69

STERLING BANCORP AND SUBSIDIARIES

Changes in Internal Controls 

There were no changes in the Company’s internal controls over financial reporting during the three months ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

70

Table of Contents




PART II
Item 1. Legal Proceedings
The “Litigation” section of Note 16. “Commitments and Contingencies” in the consolidated financial statements included in Part I, Item 1 is incorporated herein by reference.

Item 1A. Risk Factors
For information regarding factors that could affect our business, results of operations, financial condition and liquidity, see the risk factors discussed under Part I, Item 1A of our 2015 Form 10-K. There has been no material change in those risk factors.

The risks described in our 2015 Form 10-K are not the only risks that we encounter. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, results of operations, financial condition and/or liquidity.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable.
(b) Not applicable.
(c) Not applicable.

Item 3. Defaults Upon Senior Securities

Not Applicable.

Item 4. Mine Safety Disclosure

Not Applicable.

Item 5. Other Information

Not Applicable.

Item 6. Exhibits
Exhibit Number
 
Description
31.1
 
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
 
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
 
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
 
XBRL Instance Document
101.SCH
 
XBRL Taxonomy Extension schema Document
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB
 
XBRL Taxonomy Extension Calculation Linkbase Document
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document

The Company agrees to furnish to the SEC, upon request, any instrument with respect to long-term debt that the Company has not filed as an exhibit pursuant to the exemption provided by Item 601 (b)(4)(iii)(A) of Regulation S-K.

71

Table of Contents




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Sterling Bancorp
Date:
 
May 6, 2016
By:
/s/ Jack Kopnisky
 
 
 
 
Jack Kopnisky
 
 
 
 
President, Chief Executive Officer and Director
 
 
 
 
(Principal Executive Officer)
 
 
 
 
 
Date:
 
May 6, 2016
By:
/s/ Luis Massiani
 
 
 
 
Luis Massiani
 
 
 
 
Senior Executive Vice President and Chief Financial Officer
 
 
 
 
(Principal Financial Officer and Principal Accounting Officer)
 
 
 
 
 



72

Exhibit


Exhibit 31.1
Certification of Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jack Kopnisky, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of Sterling Bancorp;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: 
May 6, 2016
By:  
  /s/ Jack Kopnisky
 
 
 
Jack Kopnisky
 
 
 
President, Chief Executive Officer and Director
 
 
 
(Principal Executive Officer)




Exhibit


Exhibit 31.2
Certification of Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Luis Massiani, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of Sterling Bancorp;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: 
May 6, 2016
By:  
 
  /s/ Luis Massiani
 
 
 
 
Luis Massiani
 
 
 
 
Senior Executive Vice President
 
 
 
 
Chief Financial Officer
 
 
 
 
Principal Accounting Officer
 
 
 
 
(Principal Financial Officer)




Exhibit


Exhibit 32
Certification of Principal Executive Officer and Principal Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Jack Kopnisky, Chief Executive Officer and Luis Massiani, Chief Financial Officer of Sterling Bancorp (the “Company”) each certify in his capacity as an officer of the Company that he has reviewed the Quarterly Report on Form 10-Q for the three months ended March 31, 2016 and that to the best of his knowledge:

(1)
the report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date:    
 
May 6, 2016
 
 
 
By:    
 
  /s/ Jack Kopnisky
 
 
 
 
 
 
 
 
Jack Kopnisky
 
 
 
 
 
 
 
 
President, Chief Executive Officer and Director
 
 
 
 
 
 
 
 
(Principal Executive Officer)
 
Date:    
 
May 6, 2016
 
 
 
By:    
 
 /s/ Luis Massiani
 
 
 
 
 
 
 
 
Luis Massiani
 
 
 
 
 
 
 
 
Senior Executive Vice President
 
 
 
 
 
 
 
 
Chief Financial Officer
 
 
 
 
 
 
 
 
Principal Accounting Officer
 
 
 
 
 
 
 
 
(Principal Financial Officer)
A signed original of this written statement required by Section 906 has been provided to Sterling Bancorp and will be retained by Sterling Bancorp and furnished to the Securities and Exchange Commission or its staff upon request.




stl-20160331.xml
Attachment: XBRL INSTANCE DOCUMENT


stl-20160331.xsd
Attachment: XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT


stl-20160331_cal.xml
Attachment: XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT


stl-20160331_def.xml
Attachment: XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT


stl-20160331_lab.xml
Attachment: XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT


stl-20160331_pre.xml
Attachment: XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT


v3.4.0.3
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2016
May. 04, 2016
Document and Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q1  
Entity Registrant Name STERLING BANCORP  
Entity Central Index Key 0001070154  
Document Period End Date Mar. 31, 2016  
Entity Filer Category Large Accelerated Filer  
Entity Common Stock, Shares Outstanding   130,582,909

v3.4.0.3
Consolidated Balance Sheets (unaudited) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
ASSETS:    
Cash and due from banks $ 486,730 $ 229,513
Securities:    
Available for sale, at fair value 1,894,820 1,921,032
Held to maturity, at amortized cost (fair value of $973,826 and $734,079 at March 31, 2016 and December 31, 2015, respectively) 952,922 722,791
Total securities 2,847,742 2,643,823
Loans held for sale 27,237 34,110
Portfolio loans 8,286,163 7,859,360
Allowance for loan losses (53,014) (50,145)
Portfolio loans, net 8,233,149 7,809,215
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock, at cost 118,330 116,758
Accrued interest receivable 33,392 31,531
Premises and equipment, net 62,432 63,362
Goodwill 696,600 670,699
Core deposit and other intangible assets 75,790 77,367
Bank owned life insurance 197,615 196,288
Other real estate owned 14,527 14,614
Other assets 71,812 68,672
Total assets 12,865,356 11,955,952
LIABILITIES:    
Deposits 9,328,622 8,580,007
FHLB borrowings 1,444,817 1,409,885
Other borrowings (repurchase agreements) 23,571 16,566
Senior notes 98,996 98,893
Subordinated notes 108,124 0
Mortgage escrow funds 14,972 13,778
Other liabilities 148,121 171,750
Total liabilities 11,167,223 10,290,879
Commitments and Contingent liabilities 0 0
STOCKHOLDERS’ EQUITY:    
Preferred stock (par value $0.01 per share; 10,000,000 shares authorized; none issued or outstanding) 0 0
Common stock (par value $0.01 per share; 190,000,000 shares authorized; 136,673,149 shares issued at March 31, 2016 and December 31, 2015; 130,548,989 and 130,006,926 shares outstanding at March 31, 2016 and December 31, 2015, respectively) 1,367 1,367
Additional paid-in capital 1,501,417 1,506,612
Treasury stock, at cost (6,124,160 shares at March 31, 2016 and 6,666,223 at December 31, 2015) (70,142) (76,190)
Retained earnings 261,332 245,408
Accumulated other comprehensive income (loss), net of tax expense (benefit) of $2,751 at March 31, 2016 and $(8,961) at December 31, 2015 4,159 (12,124)
Total stockholders’ equity 1,698,133 1,665,073
Total liabilities and stockholders’ equity $ 12,865,356 $ 11,955,952

v3.4.0.3
Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]    
Securities held to maturity $ 973,826 $ 734,079
Preferred stock, par value (USD per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (USD per share) $ 0.01 $ 0.01
Common stock, shares authorized 190,000,000 190,000,000
Common stock, shares issued 136,673,149 136,673,149
Common stock, shares outstanding 130,548,989 130,006,926
Treasury stock, shares 6,124,160 6,666,223
Accumulated other comprehensive income, tax $ 2,751 $ (8,961)

v3.4.0.3
Consolidated Income Statements (unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Interest and dividend income:    
Loans and loan fees $ 89,034 $ 55,271
Securities taxable 12,016 7,632
Securities non-taxable 3,879 2,867
Other earning assets 1,077 902
Total interest and dividend income 106,006 66,672
Interest expense:    
Deposits 6,409 3,091
Borrowings 6,087 4,714
Total interest expense 12,496 7,805
Net interest income 93,510 58,867
Provisions for loan losses 4,000 2,100
Net interest income after provision for loan losses 89,510 56,767
Non-interest income:    
Accounts receivable management / factoring commissions and other fees 4,494 3,502
Mortgage banking income 2,002 3,157
Deposit fees and service charges 4,496 3,622
Net (loss) gain on sale of securities (283) 1,534
Bank owned life insurance 1,327 1,076
Investment management fees 1,124 360
Other 2,270 759
Total non-interest income 15,430 14,010
Non-interest expense:    
Compensation and benefits 30,020 23,165
Stock-based compensation plans 1,540 1,109
Occupancy and office operations 9,282 6,580
Amortization of intangible assets 3,053 1,399
FDIC insurance and regulatory assessments 2,258 1,428
Other real estate owned expense (income), net 582 (37)
Merger-related expense 265 2,455
Loss on extinguishment of FHLB borrowings 8,716 0
Other 13,215 9,822
Total non-interest expense 68,931 45,921
Income before income tax expense 36,009 24,856
Income tax expense 12,243 8,078
Net income $ 23,766 $ 16,778
Weighted average common shares:    
Basic (in shares) 129,974,025 87,839,029
Diluted (in shares) 130,500,975 88,252,768
Earnings per common share:    
Basic (USD per share) $ 0.18 $ 0.19
Diluted (USD per share) $ 0.18 $ 0.19

v3.4.0.3
Consolidated Statements of Comprehensive Income (unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Statement of Comprehensive Income [Abstract]    
Net income $ 23,766 $ 16,778
Other comprehensive income, before tax:    
Change in unrealized holding gains on securities available for sale 26,352 10,378
Accretion of net unrealized loss on securities transferred to held to maturity (74) 539
Reclassification adjustment for net realized losses (gains) included in net income 283 (1,534)
Change in the actuarial gain of defined benefit plan and post-retirement benefit plans 354 203
Total other comprehensive income, before tax 26,915 9,586
Deferred tax expense related to other comprehensive income (10,632) (4,074)
Other comprehensive income, net of tax 16,283 5,512
Comprehensive income $ 40,049 $ 22,290

v3.4.0.3
Consolidated Statement of Changes In Stockholders' Equity - USD ($)
$ in Thousands
Total
Common stock
Additional paid-in capital
Treasury stock
Retained earnings
Accumulated other comprehensive (loss) income
Balance at Dec. 31, 2014 $ 975,200 $ 912 $ 858,489 $ (82,908) $ 208,958 $ (10,251)
Balance, shares at Dec. 31, 2014   83,927,572        
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 16,778       16,778  
Other comprehensive income 5,512         5,512
Stock option & other stock transactions, net 2,735   279 2,384 72  
Stock option & other stock transactions, net, shares   208,054        
Restricted stock awards, net 1,132   6 994 132  
Restricted stock awards, net, shares   85,905        
Common equity issued, net of costs of issuance $ 85,059 $ 69 84,990      
Common equity issued, net of costs of issuance, shares 6,900,000          
Cash dividends declared $ (5,873)       (5,873)  
Balance at Mar. 31, 2015 1,080,543 $ 981 943,764 (79,530) 220,067 (4,739)
Balance, shares at Mar. 31, 2015   91,121,531        
Balance at Dec. 31, 2015 1,665,073 $ 1,367 1,506,612 (76,190) 245,408 (12,124)
Balance, shares at Dec. 31, 2015   130,006,926        
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 23,766       23,766  
Other comprehensive income 16,283         16,283
Stock option & other stock transactions, net 861   202 807 (148)  
Stock option & other stock transactions, net, shares   74,797        
Restricted stock awards, net 1,225   (5,397) 5,241 1,381  
Restricted stock awards, net, shares   467,266        
Cash dividends declared (9,075)       (9,075)  
Balance at Mar. 31, 2016 $ 1,698,133 $ 1,367 $ 1,501,417 $ (70,142) $ 261,332 $ 4,159
Balance, shares at Mar. 31, 2016   130,548,989        

v3.4.0.3
Consolidated Statement of Changes In Stockholders' Equity (Parenthetical) - $ / shares
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Statement of Stockholders' Equity [Abstract]    
Cash dividends paid (USD per share) $ 0.07 $ 0.07

v3.4.0.3
Consolidated Statements of Cash Flows (unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Cash flows from operating activities:    
Net income $ 23,766 $ 16,778
Adjustments to reconcile net income to net cash provided by operating activities:    
Provisions for loan losses 4,000 2,100
Loss (gain), net from write-downs and sales of other real estate owned 153 (487)
Depreciation of premises and equipment 2,102 1,633
Asset write-downs, severance and retention compensation and other restructuring charges 2,485 312
Amortization of intangibles 3,053 1,399
Amortization of low income housing tax credit 48 50
Net loss (gain) on sale of securities 283 (1,534)
Net gain on loans held for sale (2,002) (3,157)
Net amortization of premiums, net on securities 3,328 1,155
Net accretion of purchase discount and amortization of net deferred loan costs (5,084) (790)
Accretion of debt issuance costs and amortization of premium on borrowings, net 97 86
Restricted stock compensation expense 1,414 828
Stock option compensation expense 126 281
Originations of loans held for sale (102,165) (137,538)
Proceeds from sales of loans held for sale 111,040 111,155
Increase in cash surrender value of bank owned life insurance (1,327) (1,076)
Deferred income tax expense 6,214 2,516
Other adjustments (principally net changes in other assets and other liabilities) (50,113) (8,926)
Net cash (used in) operating activities (2,582) (15,215)
Cash flows from investing activities:    
Available for sale (269,220) (237,602)
Held to maturity (242,428) (28,161)
Proceeds from maturities, calls and other principal payments on securities:    
Available for sale 44,908 41,017
Held to maturity 11,090 14,639
Proceeds from sales of securities available for sale 275,358 115,554
Loan originations, net (121,428) (143,695)
Proceeds from sale of loans held for investment 19,054 44,020
(Purchases) sales of FHLB and FRB stock, net (1,572) 6,573
Proceeds from sales of other real estate owned 376 997
Purchases of premises and equipment (996) (334)
Cash paid for acquisitions, net of cash received (346,690) (24,670)
Net cash (used in) investing activities (631,548) (211,662)
Cash flows from financing activities:    
Net increase in transaction, savings and money market deposits 689,379 310,430
Net increase in time deposits 59,236 33,191
Net increase (decrease) in short-term FHLB borrowings 205,000 (151,000)
Advances of term FHLB borrowings 325,000 80,000
Repayments of term FHLB borrowings (495,062) (75,059)
Repayment of debt assumed in acquisition 0 (4,485)
Net increase in other borrowings 7,005 15,399
Issuance of Bank subordinated notes 108,124 0
Net increase in mortgage escrow funds 1,194 1,638
Proceeds from stock option exercises 546 2,758
Equity capital raise, net of costs of issuance 0 85,059
Cash dividends paid (9,075) (5,873)
Net cash provided by financing activities 891,347 292,058
Net increase in cash and cash equivalents 257,217 65,181
Cash and cash equivalents at beginning of period 229,513 121,520
Cash and cash equivalents at end of period 486,730 186,701
Supplemental cash flow information:    
Interest payments 14,598 9,376
Income tax payments 17,179 17,808
Real estate acquired in settlement of loans 442 2,874
Loans transferred from held for investment to held for sale 19,054 44,020
Non-cash assets acquired:    
Total loans, net 320,447 22,307
Accrued interest receivable 1,443 0
Goodwill 25,698 11,931
Customer list 1,500 8,950
Premises and equipment, net 176 219
Other assets 2,265 56
Total non-cash assets acquired 351,529 43,463
Other liabilities 4,839 19,045
Total liabilities assumed 4,839 19,045
Net non-cash assets acquired 346,690 24,418
Cash and cash equivalents received in acquisitions 4,762 252
Total consideration paid $ 351,452 $ 24,670

v3.4.0.3
Basis of Financial Statement Presentation
3 Months Ended
Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Financial Statement Presentation
Basis of Financial Statement Presentation

(a) Nature of Operations
Sterling Bancorp (the “Company”) is a Delaware corporation, a bank holding company and a financial holding company headquartered in Montebello, New York, that owns all of the outstanding shares of common stock of Sterling National Bank (the “Bank”), its principal subsidiary. The Bank is a full-service regional bank specializing 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.

(b) Basis of Presentation
The consolidated financial statements in this Quarterly Report on Form 10-Q include the accounts of the Company and all other entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and financial reporting policies the Company follows conform, in all material respects, to accounting principles generally accepted in the United States (“GAAP”) and to general practices within the banking industry, which includes regulatory reporting instructions.

The consolidated financial statements in this Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm, but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations. All such adjustments were of a normal and recurring nature. The consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2015, included in our Annual Report on Form 10-K filed with the SEC on February 29, 2016 (the “2015 Form 10-K”). Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period. Certain items in prior financial statements have been reclassified to conform to the current presentation.

(c) Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, expense and contingencies at the date of the financial statements. Actual results could differ significantly from these estimates. The allowance for loan losses and the status of contingencies are particularly subject to change.

(d) Merger with Hudson Valley Holding Corp.
On June 30, 2015, Hudson Valley Holding Corp. (“HVHC”) merged with and into the Company (the “HVB Merger”). In connection with the merger, Hudson Valley Bank, the principal subsidiary of HVHC, also merged with and into the Bank.

(e) Merger with Sterling Bancorp
On October 31, 2013, Provident New York Bancorp (“Legacy Provident”) merged with legacy Sterling Bancorp (“Legacy Sterling”). In connection with the merger, the following corporate actions occurred:

Legacy Sterling merged with and into Legacy Provident.
Legacy Provident was the accounting acquirer and the surviving entity.
Legacy Provident changed its legal entity name to Sterling Bancorp.
Sterling National Bank merged into Provident Bank.
Provident Bank changed its legal entity name to Sterling National Bank.

We refer to the merger with Legacy Sterling as the “Provident Merger.”

v3.4.0.3
Acquisitions
3 Months Ended
Mar. 31, 2016
Business Combinations [Abstract]  
Acquisitions
Acquisitions
NSBC Acquisition
On March 31, 2016, the Bank acquired 100% of the outstanding equity interests of NewStar Business Credit LLC, a Delaware limited liability company (“NSBC” and the “NSBC Acquisition”). NSBC is a provider of asset-based lending solutions to middle market commercial clients. NSBC’s loans were $320,447 on the acquisition date and consist of 100% floating-rate assets. The Bank paid a premium on the balance of gross loans receivable acquired of 5.90%, or $18,906. The Bank assumed $4,838 of liabilities, which consisted mainly of cash collateral on loans outstanding. The Bank recognized a customer list intangible asset of $1,500 that is being amortized over its 24 month estimated life and $25,698 of goodwill. The Bank recorded a $1,500 restructuring charge consisting mainly of retention and severance compensation, IT contract terminations and professional fees.

HVB Merger
On June 30, 2015, the Company completed the HVB Merger. Under the terms of the HVB Merger agreement, HVHC shareholders received 1.92 shares of the Company’s common stock for each share of HVHC common stock, which resulted in the issuance of 38,525,154 shares. Based on the Company’s closing stock price of $14.63 per share on June 29, 2015, the aggregate consideration paid to HVHC shareholders was $566,307, which, in accordance with the HVB Merger agreement, also included the in-the-money cash value of outstanding HVHC stock options, the fair value of outstanding HVHC restricted stock awards and cash in lieu of fractional shares. Consistent with the Company’s strategy, the primary reason for the HVB Merger was the expansion of the Company’s geographic footprint in the greater New York metropolitan region and beyond.

The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their fair values as of June 30, 2015, based on management’s best estimate and using the information available as of the HVB Merger date. The application of the acquisition method of accounting resulted in the recognition of goodwill of $269,757 and a core deposit intangible of $33,839.  As of June 30, 2015, HVHC had assets with a net book value of approximately $288,208, including loans with a net book value of approximately $1,816,767, and deposits with a net book value of approximately $3,160,746. The table below summarizes the amounts recognized as of the HVB Merger date for each major class of assets acquired and liabilities assumed, the estimated fair value adjustments and the amounts recorded in the Company’s financial statements at fair value at the HVB Merger date:
Consideration paid through Sterling Bancorp common stock issued to HVHC shareholders
$
566,307

 
HVHC net book value
 
Fair value adjustments
 
As recorded at acquisition
Cash and cash equivalents
$
878,988

 
$

 
$
878,988

Investment securities
713,625

 
217

 (a)
713,842

Loans
1,816,767

 
(24,248
)
 (b)
1,792,519

Federal Reserve Bank stock
5,830

 

 
5,830

Bank owned life insurance
44,231

 

 
44,231

Premises and equipment
11,918

 
4,925

 (c)
16,843

Accrued interest receivable
7,392

 

 
7,392

Core deposits and other intangibles

 
33,839

 (d)
33,839

Other real estate owned
222

 

 
222

Other assets
32,639

 
(7,931
)
 (e)
24,708

Deposits
(3,160,746
)
 

 
(3,160,746
)
Other borrowings
(25,366
)
 

 
(25,366
)
Other liabilities
(37,292
)
 
1,540

 (f)
(35,752
)
Total identifiable net assets
$
288,208

 
$
8,342

 
$
296,550

 
 
 
 
 
 
Goodwill recorded in the HVB Merger
 
 
 
 
$
269,757

Explanation of certain fair value related adjustments:
(a)
Represents the fair value adjustment on investment securities held to maturity.
(b)
Represents the elimination of HVHCs allowance for loan losses and an adjustment of the net book value of loans to estimated fair value, which includes an interest rate mark and credit mark adjustment.
(c)
Represents an adjustment to reflect the fair value of HVHC owned real estate as determined by independent appraisals, which will be amortized on a straight-line basis over the estimated useful lives of the individual assets.
(d)
Represents intangible assets recorded to reflect the fair value of core deposits. The core deposit asset was recorded as an identifiable intangible asset and will be amortized on an accelerated basis over the estimated average life of the deposit base.
(e)
Represents an adjustment in net deferred tax assets resulting from the fair value adjustments related to the acquired assets, liabilities assumed and identifiable intangibles recorded.
(f)
Represents the elimination of HVHC’s deferred rent liability.

The fair values for loans acquired from HVB were estimated using cash flow projections based on the remaining maturity and repricing terms. Cash flows were adjusted by estimating future credit losses and the rate of prepayments. Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans. For collateral dependent loans with deteriorated credit quality, fair value was estimated by analyzing the value of the underlying collateral, assuming the fair values of the loans were derived from the eventual sale of the collateral. These values were discounted using market derived rates of return, with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral. There was no carryover of HVHC’s allowance for loan losses associated with the loans that were acquired, as the loans were initially recorded at fair value on the date of the HVB Merger.

Acquired loan portfolio data in the HVB Merger is presented below:
 
Fair value of acquired loans at acquisition date
 
Gross contractual amounts receivable at acquisition date
 
Best estimate at acquisition date of contractual cash flows not expected to be collected
Acquired loans with evidence of deterioration since origination
$
96,973

 
$
122,104

 
$
19,024

Acquired loans with no evidence of deterioration since origination
1,695,546

 
1,974,740

 
37,520



The core deposit intangible asset recognized is being amortized over its estimated useful life of approximately 10 years utilizing the sum-of-the-years digits method. Other intangibles consist of below market rents, which are amortized over the remaining life of each lease using the straight-line method.

Goodwill is not amortized for book purposes; however, it is reviewed at least annually for impairment and is not deductible for tax purposes.
The fair value of land, buildings and equipment was estimated using appraisals. Buildings will be amortized over their estimated useful lives of approximately 30 years. Improvements and equipment will be amortized or depreciated over their estimated useful lives ranging from one to five years.
The fair value of retail demand and interest bearing deposit accounts was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. The fair value of time deposits was estimated by discounting the contractual future cash flows using market rates offered for time deposits of similar remaining maturities. Management concluded the carrying value was an appropriate estimate of fair value for these deposits.
Direct acquisition and other charges incurred in connection with the HVB Merger were expensed as incurred and totaled $0 and $645 for the three months ended March 31, 2016 and 2015, respectively. These expenses were mainly for severance compensation and were recorded in “Merger-related expenses” on the consolidated income statements.
FCC Acquisition
On May 7, 2015, the Bank acquired a factoring portfolio from FCC, LLC, a subsidiary of First Capital Holdings, Inc. (“FCC”), with an outstanding factoring receivables balance of approximately $44,500. The total consideration included a premium of $1,000 in addition to the outstanding receivables balance.

Damian Acquisition
On February 27, 2015, the Bank acquired 100% of the outstanding common stock of Damian Services Corporation (“Damian”) for total consideration of $24,670 in cash. Damian is a payroll services provider located in Chicago, Illinois. In connection with the acquisition, the Bank acquired $22,307 of outstanding payroll finance loans and assumed $14,560 of liabilities. The Bank recognized a customer list intangible asset of $8,950 that is being amortized over its 16 year estimated life, and $11,930 of goodwill. The Bank also recognized a $1,500 restructuring charge consisting mainly of retention and severance compensation and asset write-downs related to the consolidation of Damian’s operations, and approximately $300 of legal fees.

v3.4.0.3
Securities
3 Months Ended
Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Securities
Securities

A summary of amortized cost and estimated fair value of securities as of March 31, 2016 and December 31, 2015 is presented below. The term “Residential MBS” refers to residential mortgage-backed securities and the term “CMO” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 17. “Fair Value Measurements”.    
 
March 31, 2016
 
Available for Sale
 
Held to Maturity
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
 
Amortized
cost
 
Gross
unrecognized
gains
 
Gross
unrecognized
losses
 
Fair
value
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
1,400,401

 
$
16,853

 
$
(303
)
 
$
1,416,951

 
$
247,094

 
$
5,599

 
$
(72
)
 
$
252,621

CMO/Other MBS
74,526

 
515

 
(369
)
 
74,672

 
47,687

 
496

 
(122
)
 
48,061

Total residential MBS
1,474,927

 
17,368

 
(672
)
 
1,491,623

 
294,781

 
6,095

 
(194
)
 
300,682

Other securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
83,575

 
138

 
(3
)
 
83,710

 
104,292

 
4,382

 
(9
)
 
108,665

Corporate
91,325

 
317

 
(4,463
)
 
87,179

 
25,192

 

 
(319
)
 
24,873

State and municipal
221,146

 
2,780

 
(409
)
 
223,517

 
522,657

 
11,675

 
(1,036
)
 
533,296

Other
8,781

 
10

 

 
8,791

 
6,000

 
310

 

 
6,310

Total other securities
404,827

 
3,245

 
(4,875
)
 
403,197

 
658,141

 
16,367

 
(1,364
)
 
673,144

Total securities
$
1,879,754

 
$
20,613

 
$
(5,547
)
 
$
1,894,820

 
$
952,922

 
$
22,462

 
$
(1,558
)
 
$
973,826



 
December 31, 2015
 
Available for Sale
 
Held to Maturity
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
 
Amortized
cost
 
Gross
unrecognized
gains
 
Gross
unrecognized
losses
 
Fair
value
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
1,222,912

 
$
2,039

 
$
(7,089
)
 
$
1,217,862

 
$
252,760

 
$
1,857

 
$
(1,214
)
 
$
253,403

CMO/Other MBS
79,430

 
76

 
(1,133
)
 
78,373

 
49,842

 
87

 
(619
)
 
49,310

Total residential MBS
1,302,342

 
2,115

 
(8,222
)
 
1,296,235

 
302,602

 
1,944

 
(1,833
)
 
302,713

Other securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Federal agencies
85,124

 
7

 
(864
)
 
84,267

 
104,135

 
2,458

 
(635
)
 
105,958

Corporate
321,630

 
522

 
(7,964
)
 
314,188

 
25,241

 
11

 
(200
)
 
25,052

State and municipal
187,399

 
2,187

 
(551
)
 
189,035

 
285,813

 
9,327

 
(134
)
 
295,006

Trust preferred
27,928

 
589

 

 
28,517

 

 

 

 

Other
8,781

 
9

 

 
8,790

 
5,000

 
350

 

 
5,350

Total other securities
630,862

 
3,314

 
(9,379
)
 
624,797

 
420,189

 
12,146

 
(969
)
 
431,366

Total securities
$
1,933,204

 
$
5,429

 
$
(17,601
)
 
$
1,921,032

 
$
722,791

 
$
14,090

 
$
(2,802
)
 
$
734,079


During the quarter ended March 31, 2016, the Company sold all of the trust preferred securities it held at December 31, 2015.

The amortized cost and estimated fair value of securities at March 31, 2016 are presented below by contractual maturity. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential MBS are shown separately since they are not due at a single maturity date.
 
March 31, 2016
 
Available for sale
 
Held to maturity
 
Amortized
cost
 
Fair
value
 
Amortized
cost
 
Fair
value
Remaining period to contractual maturity:
 
 
 
 
 
 
 
One year or less
$
17,162

 
$
17,194

 
$
13,059

 
$
13,160

One to five years
214,895

 
213,978

 
52,569

 
54,617

Five to ten years
113,074

 
112,148

 
219,829

 
227,552

Greater than ten years
59,696

 
59,877

 
372,684

 
377,815

Total securities with a stated maturity date
404,827

 
403,197

 
658,141

 
673,144

Residential MBS
1,474,927

 
1,491,623

 
294,781

 
300,682

Total securities
$
1,879,754

 
$
1,894,820

 
$
952,922

 
$
973,826


 
Sales of securities for the periods indicated below were as follows:
 
For the three months ended
 
March 31,
 
2016
 
2015
Available for sale:
 
 
 
Proceeds from sales
$
275,358

 
$
115,554

Gross realized gains
1,562

 
1,663

Gross realized losses
(1,845
)
 
(129
)
Income tax (benefit) expense on realized net gains
(96
)
 
499



At March 31, 2016 and December 31, 2015, there were no holdings of securities of any one issuer, other than the U.S. federal government and its agencies, in an amount greater than 10% of stockholders’ equity.
The following table summarizes securities available for sale with unrealized losses, segregated by the length of time in a continuous unrealized loss position for the periods presented below:
 
Continuous unrealized loss position
 
 
 
 
 
Less than 12 months
 
12 months or longer
 
Total
 
Fair
value
 
Unrealized losses
 
Fair
value
 
Unrealized losses
 
Fair
value
 
Unrealized losses
Available for sale
 
 
 
 
 
 
 
 
 
 
 
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
46,003

 
$
(280
)
 
$
3,716

 
$
(23
)
 
$
49,719

 
$
(303
)
CMO/Other MBS
27,077

 
(359
)
 
1,563

 
(10
)
 
28,640

 
(369
)
Total residential MBS
73,080

 
(639
)
 
5,279

 
(33
)
 
78,359

 
(672
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
206

 

 
2,998

 
(3
)
 
3,204

 
(3
)
Corporate
31,810

 
(1,880
)
 
31,304

 
(2,583
)
 
63,114

 
(4,463
)
State and municipal
5,857

 
(122
)
 
59,317

 
(287
)
 
65,174

 
(409
)
Total other securities
37,873

 
(2,002
)
 
93,619

 
(2,873
)
 
131,492

 
(4,875
)
Total
$
110,953

 
$
(2,641
)
 
$
98,898

 
$
(2,906
)
 
$
209,851

 
$
(5,547
)
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
18,983

 
$
(528
)
 
$
854,491

 
$
(6,561
)
 
$
873,474

 
$
(7,089
)
CMO/Other MBS
23,682

 
(717
)
 
41,946

 
(416
)
 
65,628

 
(1,133
)
Total residential MBS
42,665

 
(1,245
)
 
896,437

 
(6,977
)
 
939,102

 
(8,222
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
14,933

 
(260
)
 
57,886

 
(604
)
 
72,819

 
(864
)
Corporate
19,257

 
(715
)
 
236,048

 
(7,249
)
 
255,305

 
(7,964
)
State and municipal
3,439

 
(27
)
 
42,924

 
(524
)
 
46,363

 
(551
)
Total other securities
37,629

 
(1,002
)
 
336,858

 
(8,377
)
 
374,487

 
(9,379
)
Total
$
80,294

 
$
(2,247
)
 
$
1,233,295

 
$
(15,354
)
 
$
1,313,589

 
$
(17,601
)


The following table summarizes securities held to maturity with unrecognized losses, segregated by the length of time in a continuous unrecognized loss position for the periods presented below:
 
Continuous unrecognized loss position
 
 
 
 
 
Less than 12 months
 
12 months or longer
 
Total
 
Fair
value
 
Unrecognized losses
 
Fair
value
 
Unrecognized losses
 
Fair
value
 
Unrecognized losses
Held to maturity
 
 
 
 
 
 
 
 
 
 
 
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
   Agency-backed
$
6,568

 
$
(69
)
 
$
1,261

 
$
(3
)
 
$
7,829

 
$
(72
)
   CMO/Other MBS
7,984

 
(61
)
 
8,684

 
(61
)
 
16,668

 
(122
)
Total residential MBS
14,552

 
(130
)
 
9,945

 
(64
)
 
24,497

 
(194
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
9,991

 
(9
)
 

 

 
9,991

 
(9
)
Corporate

 

 
24,872

 
(319
)
 
24,872

 
(319
)
State and municipal
2,223

 
(24
)
 
158,959

 
(1,012
)
 
161,182

 
(1,036
)
Total other securities
12,214

 
(33
)
 
183,831

 
(1,331
)
 
196,045

 
(1,364
)
Total
$
26,766

 
$
(163
)
 
$
193,776

 
$
(1,395
)
 
$
220,542

 
$
(1,558
)
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$

 
$

 
$
132,585

 
$
(1,214
)
 
$
132,585

 
$
(1,214
)
CMO/Other MBS
5,960

 
(156
)
 
40,033

 
(463
)
 
45,993

 
(619
)
Total residential MBS
5,960

 
(156
)
 
172,618

 
(1,677
)
 
178,578

 
(1,833
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
14,642

 
(358
)
 
9,723

 
(277
)
 
24,365

 
(635
)
Corporate

 

 
20,039

 
(200
)
 
20,039

 
(200
)
State and municipal
2,562

 
(48
)
 
12,989

 
(86
)
 
15,551

 
(134
)
Total other securities
17,204

 
(406
)
 
42,751

 
(563
)
 
59,955

 
(969
)
Total
$
23,164

 
$
(562
)
 
$
215,369

 
$
(2,240
)
 
$
238,533

 
$
(2,802
)



At March 31, 2016, a total of 131 available for sale securities were in a continuous unrealized loss position for less than 12 months and 36 securities were in a continuous unrealized loss position for 12 months or longer. Declines in the fair value of held to maturity and available for sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The amount of the impairment related to other factors is recognized in other comprehensive income. In estimating other than temporary impairment (“OTTI”) losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost; (ii) the financial condition and near-term prospects of the issuer; and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in cost.

Management has the ability and intent to hold the securities classified as held to maturity in the table above until they mature, at which time the Company anticipates it will receive full value for the securities. Furthermore, as of March 31, 2016, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. As of March 31, 2016, management believes the impairments detailed in the table above are temporary.
Securities pledged for borrowings at FHLB and other institutions, and securities pledged for municipal deposits and other purposes were as follows for the periods presented below:
 
March 31,
 
December 31,

 
2016
 
2015
Available for sale securities pledged for borrowings, at fair value
$
95,317

 
$
101,994

Available for sale securities pledged for municipal deposits, at fair value
975,592

 
849,186

Available for sale securities pledged for customer back-to-back swaps, at fair value
4,323

 
1,839

Held to maturity securities pledged for borrowings, at amortized cost
2,500

 
206,337

Held to maturity securities pledged for municipal deposits, at amortized cost
369,334

 
327,589

Total securities pledged
$
1,447,066

 
$
1,486,945


v3.4.0.3
Portfolio Loans
3 Months Ended
Mar. 31, 2016
Receivables [Abstract]  
Portfolio Loans
Portfolio Loans

The composition of the Company’s loan portfolio, excluding loans held for sale, was the following for the periods presented below:
 
March 31,
 
December 31,
 
2016
 
2015
Commercial:
 
 
 
Commercial and industrial:
 
 
 
       Traditional commercial & industrial (“C&I”)
$
2,003,839

 
$
1,681,704

Payroll finance
199,119

 
221,831

Warehouse lending
341,790

 
387,808

Factored receivables
215,015

 
208,382

Equipment financing
656,775

 
631,303

Total C&I
3,416,538

 
3,131,028

Commercial mortgage:
 
 
 
       Commercial real estate
2,790,145

 
2,733,351

Multi-family
886,069

 
796,030

       Acquisition, development & construction (“ADC”)
179,517

 
186,398

Total commercial mortgage
3,855,731

 
3,715,779

Total commercial
7,272,269

 
6,846,807

Residential mortgage
718,733

 
713,036

Consumer
295,161

 
299,517

Total portfolio loans
8,286,163

 
7,859,360

Allowance for loan losses
(53,014
)
 
(50,145
)
Total portfolio loans, net
$
8,233,149

 
$
7,809,215



Total portfolio loans include net deferred loan origination costs of $1,612 at March 31, 2016, and $2,029 at December 31, 2015.

At March 31, 2016 and December 31, 2015, the Company pledged loans totaling $2,205,834 and $2,050,982, respectively, to the FHLB as collateral for certain borrowing arrangements. See Note 8. “Borrowings”.

The following tables set forth the amounts and status of the Company’s loans, troubled debt restructurings (“TDRs”) and non-performing loans at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
Current
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
1,969,677

 
$
1,294

 
$
2,630

 
$
478

 
$
29,760

 
$
2,003,839

Payroll finance
198,805

 
39

 
59

 
159

 
57

 
199,119

Warehouse lending
341,790

 

 

 

 

 
341,790

Factored receivables
214,803

 

 

 

 
212

 
215,015

Equipment financing
651,995

 
1,276

 
926

 

 
2,578

 
656,775

Commercial real estate
2,767,800

 
1,130

 
3,074

 
332

 
17,809

 
2,790,145

Multi-family
882,028

 

 

 

 
4,041

 
886,069

ADC
175,501

 

 

 

 
4,016

 
179,517

Residential mortgage
694,104

 
6,092

 
684

 

 
17,853

 
718,733

Consumer
285,054

 
1,276

 
688

 
33

 
8,110

 
295,161

Total portfolio loans
$
8,181,557

 
$
11,107

 
$
8,061

 
$
1,002

 
$
84,436

 
$
8,286,163

Total TDRs included above
$
14,918

 
$
1,116

 
$

 
$

 
$
5,810

 
$
21,844

Non-performing loans:
 
 
 
 
 
 
 
 
 
 
 
Loans 90+ days past due and still accruing
 
 
 
 
 
 
 
 
 
 
$
1,002

Non-accrual loans
 
 
 
 
 
 
 
 
 
 
84,436

Total non-performing loans
 
 
 
 
 
 
 
 


 
$
85,438


 
December 31, 2015
 
Current
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
1,630,635

 
$
9,380

 
$
31,060

 
$
487

 
$
10,142

 
$
1,681,704

Payroll finance
221,394

 

 
349

 
88

 

 
221,831

Warehouse lending
387,808

 

 

 

 

 
387,808

Factored receivables
208,162

 

 

 

 
220

 
208,382

Equipment financing
627,056

 
1,088

 
1,515

 

 
1,644

 
631,303

Commercial real estate
2,702,671

 
7,417

 
2,521

 

 
20,742

 
2,733,351

Multi-family
791,828

 
2,485

 

 

 
1,717

 
796,030

ADC
182,615

 

 

 
83

 
3,700

 
186,398

Residential mortgage
686,445

 
6,014

 
897

 

 
19,680

 
713,036

Consumer
286,339

 
4,950

 
320

 
16

 
7,892

 
299,517

Total portfolio loans
$
7,724,953

 
$
31,334

 
$
36,662

 
$
674

 
$
65,737

 
$
7,859,360

Total TDRs included above
$
13,047

 
$
654

 
$

 
$

 
$
8,591

 
$
22,292

Non-performing loans:
 
 
 
 
 
 
 
 
 
 
 
Loans 90+ days past due and still accruing
 
 
 
 
 
 
 
 
 
 
$
674

Non-accrual loans
 
 
 
 
 
 
 
 
 
 
65,737

Total non-performing loans
 
 
 
 
 
 
 
 
 
 
$
66,411



The following table provides additional analysis of the Company’s non-accrual loans at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
December 31, 2015
 
Recorded investment Non-accrual loans
 
Recorded investment PCI non-accrual loans
 
Recorded investment total non-accrual loans
 
Unpaid principal balance non-accrual loans
 
Recorded investment Non-accrual loans
 
Recorded investment PCI non-accrual loans
 
Recorded investment total non-accrual loans
 
Unpaid principal balance non-accrual loans
C&I
$
24,629

 
$
5,131

 
$
29,760

 
$
30,107

 
$
4,314

 
$
5,828

 
$
10,142

 
$
10,503

Payroll finance
57

 

 
57

 
57

 

 

 

 

Factored receivables
212

 

 
212

 
212

 
220

 

 
220

 
220

Equipment financing
2,578

 

 
2,578

 
2,578

 
1,644

 

 
1,644

 
1,644

Commercial real estate
11,899

 
5,910

 
17,809

 
21,731

 
13,119

 
7,623

 
20,742

 
23,678

Multi-family
4,041

 

 
4,041

 
4,041

 
1,717

 

 
1,717

 
1,837

ADC
4,016

 

 
4,016

 
4,146

 
3,700

 

 
3,700

 
3,829

Residential mortgage
12,267

 
5,586

 
17,853

 
24,544

 
13,683

 
5,997

 
19,680

 
24,386

Consumer
7,285

 
825

 
8,110

 
9,516

 
7,315

 
577

 
7,892

 
9,404

 
$
66,984

 
$
17,452

 
$
84,436

 
$
96,932

 
$
45,712

 
$
20,025

 
$
65,737

 
$
75,501



There were no non-accrual warehouse lending loans at March 31, 2016 or December 31, 2015.

When the ultimate collectibility of the total principal of an impaired loan is in doubt and the loan is on non-accrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectibility of the total principal of an impaired loan is not in doubt and the loan is on non-accrual status, contractual interest is credited to interest income when received, under the cash basis method.

At March 31, 2016 and December 31, 2015, the recorded investment of residential mortgage loans that were formally in process of foreclosure was $9,887 and $9,638, respectively, which are included in non-accrual residential mortgage loans above.

The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at March 31, 2016:
 
Loans evaluated by segment
 
Allowance evaluated by segment
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Purchased credit impaired loans
 
Total
 loans
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Total allowance for loan losses
C&I
$
27,870

 
$
1,924,254

 
$
51,715

 
$
2,003,839

 
$

 
$
14,268

 
$
14,268

Payroll finance

 
199,119

 

 
199,119

 

 
1,546

 
1,546

Warehouse lending

 
341,790

 

 
341,790

 

 
520

 
520

Factored receivables

 
215,015

 

 
215,015

 

 
1,407

 
1,407

Equipment financing
2,192

 
654,583

 

 
656,775

 

 
5,393

 
5,393

Commercial real estate
13,815

 
2,728,143

 
48,187

 
2,790,145

 

 
15,770

 
15,770

Multi-family
883

 
880,716

 
4,470

 
886,069

 

 
2,996

 
2,996

ADC
8,595

 
166,204

 
4,718

 
179,517

 

 
2,157

 
2,157

Residential mortgage
515

 
711,229

 
6,989

 
718,733

 

 
4,850

 
4,850

Consumer
1,497

 
292,128

 
1,536

 
295,161

 

 
4,107

 
4,107

Total portfolio loans
$
55,367

 
$
8,113,181

 
$
117,615

 
$
8,286,163

 
$

 
$
53,014

 
$
53,014


The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at December 31, 2015:
 
Loans evaluated by segment
 
Allowance evaluated by segment
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Purchased credit impaired loans
 
Total
 loans
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Total allowance for loan losses
C&I
$
3,138

 
$
1,661,163

 
$
17,403

 
$
1,681,704

 
$

 
$
13,262

 
$
13,262

Payroll finance

 
221,831

 

 
221,831

 

 
1,936

 
1,936

Warehouse lending

 
387,808

 

 
387,808

 

 
589

 
589

Factored receivables

 
208,382

 

 
208,382

 

 
1,457

 
1,457

Equipment financing
1,017

 
630,286

 

 
631,303

 

 
4,925

 
4,925

Commercial real estate
13,492

 
2,669,673

 
50,186

 
2,733,351

 

 
13,861

 
13,861

Multi-family
1,541

 
790,017

 
4,472

 
796,030

 

 
2,741

 
2,741

ADC
8,669

 
173,065

 
4,664

 
186,398

 

 
2,009

 
2,009

Residential mortgage
515

 
705,245

 
7,276

 
713,036

 

 
5,007

 
5,007

Consumer

 
298,225

 
1,292

 
299,517

 

 
4,358

 
4,358

Total loans
$
28,372

 
$
7,745,695

 
$
85,293

 
$
7,859,360

 
$

 
$
50,145

 
$
50,145


Management considers a loan to be impaired when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Evaluation of impairment is treated the same across all classes of loans on a loan-by-loan basis, except residential mortgage loans and home equity lines of credit with an outstanding balance of $500 or less, which are evaluated for impairment on a homogeneous pool basis. When management identifies a loan as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole remaining source of repayment of the loan is the operation or liquidation of the collateral. In these cases, management uses the current fair value of the collateral, less selling costs when foreclosure or liquidation is probable, instead of discounted cash flows. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is generally recognized through a charge-off to the allowance for loan losses. 

The Company acquired loans for which there was, at acquisition, both evidence of deterioration of credit quality since origination and probability, at acquisition, that all contractually required payments would not be collected (“PCI loans”). The carrying amount of such loans is presented in the tables above. At March 31, 2016, the net recorded amount of PCI loans was $117,615, which included $37,823 of C&I loans acquired in the NSBC Acquisition.

There was $565 and $272 included in the allowance for loan losses associated with PCI loans at March 31, 2016 and December 31, 2015, respectively.

The following table presents the changes in the balance of the accretable yield discount for PCI loans for the three months ended March 31, 2016 and 2015:
 
For the three months ended March 31,
 
2016
 
2015
Balance at beginning of period
$
11,211

 
$
724

Balances acquired in the NSBC Acquisition
2,200

 

Accretion of income
(1,155
)
 

Reclassification from non-accretable difference
266

 

Balance at end of period
$
12,522

 
$
724



Income is not recognized on PCI loans unless the Company can reasonably estimate the cash flows that are expected to be collected over the life of the loan. The balance of PCI loans that were treated under the cost recovery method were $17,452 and $20,025 at March 31, 2016 and December 31, 2015, respectively.

The following table presents loans individually evaluated for impairment, excluding purchased credit impaired loans, by segment of loans at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
December 31, 2015
 
Unpaid principal balance
 
Recorded investment
 
Unpaid principal balance
 
Recorded investment
Loans with no related allowance recorded:
 
 
 
 
 
 
C&I
$
28,050

 
$
27,870

 
$
3,145

 
$
3,138

Equipment financing
2,192

 
2,192

 
1,017

 
1,017

Commercial real estate
15,211

 
13,815

 
15,092

 
13,492

Multi-family
883

 
883

 
1,541

 
1,541

ADC
8,595

 
8,595

 
8,669

 
8,669

Residential mortgage
515

 
515

 
515

 
515

Consumer
1,497

 
1,497

 

 

Total
$
56,943

 
$
55,367

 
$
29,979

 
$
28,372


At March 31, 2016 and December 31, 2015 there were no payroll finance, warehouse lending or factored receivables loans that were individually evaluated for impairment.
 
The following tables present the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the three months ended March 31, 2016 and March 31, 2015:
 
March 31, 2016
 
March 31, 2015
 
QTD average
recorded
investment
 
Interest
income
recognized
 
Cash-basis
interest
income
recognized
 
QTD average
recorded
investment
 
Interest
income
recognized
 
Cash-basis
interest
income
recognized
Loans with no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
C&I
$
15,366

 
$
9

 
$

 
$
3,316

 
$

 
$

Equipment financing
1,288

 

 

 

 

 

Commercial real estate
13,118

 
39

 

 
13,275

 
67

 

Multi-family
884

 

 

 

 

 

ADC
8,632

 
56

 

 
11,597

 
57

 

Residential mortgage
515

 

 

 
515

 

 

Consumer
748

 

 

 

 

 

Total
$
39,803

 
$
104

 
$

 
$
28,703

 
$
124

 
$



There were no impaired loans with an allowance recorded at March 31, 2016 or December 31, 2015. At March 31, 2016 and 2015, there were no factored receivables, payroll finance, or warehouse lending loans that were impaired.
 
 
 
 
 
 
 
 
 
 
 
 
Troubled Debt Restructuring:
The following tables set forth the amounts and past due status of the Company’s TDRs at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
Current loans
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
580

 
$

 
$

 
$

 
$
1,116

 
$
1,696

Equipment financing
64

 

 

 

 

 
64

Commercial real estate
2,496

 
257

 

 

 

 
2,753

ADC
6,274

 

 

 

 
2,458

 
8,732

Residential mortgage
5,504

 
859

 

 

 
2,236

 
8,599

Total
$
14,918

 
$
1,116

 
$

 
$

 
$
5,810

 
$
21,844


 
December 31, 2015
 
Current loans
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
154

 
$

 
$

 
$

 
$
2,052

 
$
2,206

Equipment financing
338

 

 

 

 

 
338

Commercial real estate
2,787

 

 

 

 

 
2,787

ADC
5,107

 

 

 

 
3,700

 
8,807

Residential mortgage
4,661

 
654

 

 

 
2,839

 
8,154

Total
$
13,047

 
$
654

 
$

 
$

 
$
8,591

 
$
22,292



There were no payroll finance, warehouse lending, factored receivables, or multi-family or consumer loans that were TDRs for either period presented above. The Company did not have outstanding commitments to lend additional amounts to customers with loans classified as TDRs as of March 31, 2016 and December 31, 2015, respectively.

There was one loan modified as a TDR in the three months ended March 31, 2016. This TDR did not increase the allowance for loan losses and did not result in charge-offs for during the quarter ended March 31, 2016 or March 31, 2015.

The following table presents loans by segment modified as TDRs that occurred during the first three months of 2016 and 2015:
 
March 31, 2016
 
March 31, 2015
 
 
 
Recorded investment
 
 
 
Recorded investment
 
Number
Pre-
modification
 
Post-
modification
 
Number
Pre-
modification
 
Post-
modification
Residential mortgage
1

 
$
469

 
$
469

 
 

 

Total TDRs
1

 
$
469

 
$
469

 
 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 


There were no TDRs that were modified during the three months ended March 31, 2016 and 2015 that had subsequently defaulted (which is defined as missing three consecutive monthly payments or being over 90 days past due on a scheduled payment).

v3.4.0.3
Allowance for Loan Losses
3 Months Ended
Mar. 31, 2016
Receivables [Abstract]  
Allowance for Loan Losses
Allowance for Loan Losses

Activity in the allowance for loan losses for the three months ended March 31, 2016 and 2015 is summarized below:
 
The three months ended March 31, 2016
 
Beginning
balance
 
Charge-offs
 
Recoveries
 
Net
charge-offs
 
Provision / (reversal of)
 
Ending balance
C&I
$
13,262

 
$
(489
)
 
$
329

 
$
(160
)
 
$
1,167

 
$
14,269

Payroll finance
1,936

 

 
4

 
4

 
(394
)
 
1,546

Warehouse lending
589

 

 

 

 
(69
)
 
520

Factored receivables
1,457

 
(81
)
 
24

 
(57
)
 
7

 
1,407

Equipment financing
4,925

 
(457
)
 
108

 
(349
)
 
817

 
5,393

Commercial real estate
13,861

 
(4
)
 
21

 
17

 
1,892

 
15,770

Multi-family
2,741

 

 
2

 
2

 
253

 
2,996

ADC
2,009

 

 

 

 
148

 
2,157

Residential mortgage
5,007

 
(224
)
 
28

 
(196
)
 
39

 
4,850

Consumer
4,358

 
(511
)
 
119

 
(392
)
 
140

 
4,106

Total allowance for loan losses
$
50,145

 
$
(1,766
)
 
$
635

 
$
(1,131
)
 
$
4,000

 
$
53,014

Annualized net charge-offs to average loans outstanding
 
 
 
 
 
 
 
0.06
%
 
 
The three months ended March 31, 2015
 
Beginning
balance
 
Charge-offs
 
Recoveries
 
Net
charge-offs
 
Provision / (reversal of)
 
Ending balance
C&I
$
11,027

 
$
(842
)
 
$
101

 
$
(741
)
 
$
400

 
$
10,686

Payroll finance
1,506

 
(303
)
 
11

 
(292
)
 
686

 
1,900

Warehouse lending
608

 

 

 

 
251

 
859

Factored receivables
1,205

 
(72
)
 
19

 
(53
)
 
20

 
1,172

Equipment financing
2,569

 
(153
)
 
172

 
19

 
103

 
2,691

Commercial real estate
10,121

 
(62
)
 
16

 
(46
)
 
1,018

 
11,093

Multi-family
2,111

 
(17
)
 

 
(17
)
 
196

 
2,290

ADC
2,987

 

 
9

 
9

 
(280
)
 
2,716

Residential mortgage
5,843

 
(181
)
 
2

 
(179
)
 
(537
)
 
5,127

Consumer
4,397

 
(342
)
 
52

 
(290
)
 
243

 
4,350

Total allowance for loan losses
$
42,374

 
$
(1,972
)
 
$
382

 
$
(1,590
)
 
$
2,100

 
$
42,884

Annualized net charge-offs to average loans outstanding
 
 
 
 
 
 
 
0.13
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Total Valuation Balances Recorded Against Portfolio Loans
In purchase accounting, the prior allowance for loan losses is not carried over, and in place, we are required to estimate the fair value of loans acquired, which is included as a purchase discount within the acquired loan discount. The following analysis presents the allowance for loan losses to originated loans and remaining purchase accounting marks to acquired loan portfolios and a holistic view of valuation balances recorded against portfolio loans at March 31, 2016 and December 31, 2015.
 
March 31, 2016
Originated:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
1,370,429

 
$
12,396

 
$
30,141

 
$
527

 
$

 
$
1,413,493

Payroll finance
198,903

 
159

 
57

 

 

 
199,119

Factored receivables
213,471

 

 
1,544

 

 

 
215,015

Equipment financing
555,626

 
1,794

 
2,960

 

 

 
560,380

Warehouse lending
341,790

 

 

 

 

 
341,790

Commercial real estate
2,160,764

 
8,009

 
23,917

 

 

 
2,192,690

Multi-family
672,382

 
1,763

 
1,697

 

 

 
675,842

ADC
140,110

 
1,668

 
7,326

 

 

 
149,104

Residential mortgage
433,516

 
684

 
12,796

 

 

 
446,996

Consumer
193,933

 
610

 
8,289

 
29

 

 
202,861

Total originated loans
$
6,280,924

 
$
27,083

 
$
88,727

 
$
556

 
$

 
$
6,397,290

Allowance for loan losses
$
47,994

 
$
829

 
$
3,774

 
$
417

 
$

 
$
53,014

As a % of originated loans
0.76
%
 
3.06
%
 
4.25
%
 
75.00
%
 
%
 
0.83
%

 
March 31, 2016
Acquired loans:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
541,296

 
$
40,131

 
$
8,919

 
$

 
$

 
$
590,346

Equipment financing
96,395

 

 

 

 

 
96,395

Commercial real estate
550,133

 
22,950

 
24,372

 

 

 
597,455

Multi-family
201,332

 
5,895

 
3,000

 

 

 
210,227

ADC
24,116

 
5,500

 
797

 

 

 
30,413

Residential mortgage
265,632

 

 
6,105

 

 

 
271,737

Consumer
92,300

 

 

 

 

 
92,300

Total loans subject to purchase accounting marks
$
1,771,204

 
$
74,476

 
$
43,193

 
$

 
$

 
$
1,888,873

Remaining purchase accounting mark
$
40,085

 
$
2,380

 
$
1,937

 
$

 
$

 
$
44,402

As a % of acquired loans
2.26
%
 
3.20
%
 
4.48
%
 
%
 
%
 
2.35
%
 
 
 
 
 
 
 
 
 
 
 
 
Total portfolio loans
$
8,052,128

 
$
101,559

 
$
131,920

 
$
556

 
$

 
$
8,286,163

Total allowance for loan losses and remaining purchase accounting mark
$
88,079

 
$
3,209

 
$
5,711

 
$
417

 
$

 
$
97,416


 
December 31, 2015
Originated:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
1,356,685

 
$
11,041

 
$
29,621

 
$
445

 
$

 
$
1,397,792

Payroll finance
221,735

 

 
96

 

 

 
221,831

Factored receivables
206,814

 

 
1,568

 

 

 
208,382

Equipment financing
512,314

 
460

 
1,644

 

 

 
514,418

Warehouse lending
387,808

 

 

 

 

 
387,808

Commercial real estate
2,002,638

 
9,361

 
24,104

 

 

 
2,036,103

Multi-family
550,438

 

 
1,717

 

 

 
552,155

ADC
118,552

 
1,575

 
7,236

 

 

 
127,363

Residential mortgage
419,534

 
897

 
13,497

 

 

 
433,928

Consumer
195,684

 
407

 
7,167

 
268

 

 
203,526

Total originated loans
$
5,972,202

 
$
23,741

 
$
86,650

 
$
713

 
$

 
$
6,083,306

Allowance for loan losses
$
43,925

 
$
884

 
$
4,801

 
$
535

 
$

 
$
50,145

As a % of originated loans
0.74
%
 
3.72
%
 
5.54
%
 
75.04
%
 
%
 
0.82
%

 
December 31, 2015
Acquired loans:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
267,541

 
$
9,724

 
$
6,647

 
$

 
$

 
$
283,912

Equipment financing
116,885

 

 

 

 

 
116,885

Commercial real estate
645,951

 
23,111

 
28,186

 

 

 
697,248

Multi-family
237,948

 
5,927

 

 

 

 
243,875

ADC
52,775

 
5,500

 
760

 

 

 
59,035

Residential mortgage
272,336

 

 
6,772

 

 

 
279,108

Consumer
95,341

 

 
650

 

 

 
95,991

Total loans subject to purchase accounting marks
$
1,688,777

 
$
44,262

 
$
43,015

 
$

 
$

 
$
1,776,054

Remaining purchase accounting mark
$
37,351

 
$
1,649

 
$
2,383

 
$

 
$

 
$
41,383

As a % of acquired loans
2.21
%
 
3.73
%
 
5.54
%
 
%
 
%
 
2.33
%
 
 
 
 
 
 
 
 
 
 
 
 
Total portfolio loans
$
7,661,198

 
$
68,003

 
$
129,665

 
$
713

 
$

 
$
7,859,579

Total allowance for loan losses and remaining purchase accounting mark
$
81,276

 
$
2,533

 
$
7,184

 
$
535

 
$

 
$
91,528


Credit Quality Indicators
As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the weighted-average risk grade of commercial loans; (ii) the level of classified commercial loans; (iii) the delinquency status of residential mortgage and consumer loans (home equity lines of credit (“HELOC”) and other consumer loans); (iv) net charge-offs; (v) non-performing loans (see details above); and (vi) the general economic conditions in the greater New York metropolitan region. The Bank analyzes loans individually by classifying the loans by credit risk, except residential mortgage loans, HELOC and other consumer loans, which are evaluated on a homogeneous pool basis unless the loan balance is greater than $500. This analysis is performed at least quarterly on all criticized/classified loans. The Bank uses the following definitions of risk ratings:

1 and 2 - These grades include loans that are secured by cash, marketable securities or cash surrender value of life insurance policies.

3 - This grade includes loans to borrowers with strong earnings and cash flow and that have the ability to service debt. The borrower’s assets and liabilities are generally well matched and are above average quality. The borrower has ready access to multiple sources of funding, including alternatives such as term loans, private equity placements or trade credit.

4 - This grade includes loans to borrowers with above average cash flow, adequate earnings and debt service coverage ratios. The borrower generates discretionary cash flow, assets and liabilities are reasonably matched, and the borrower has access to other sources of debt funding or additional trade credit at market rates.

5 - This grade includes loans to borrowers with adequate earnings and cash flow and reasonable debt service coverage ratios. Overall leverage is acceptable and there is average reliance upon trade credit. Management has a reasonable amount of experience and depth, and owners are willing to invest available outside capital as necessary.

6 - This grade includes loans to borrowers where there is evidence of some strain, earnings are inconsistent and volatile, and the borrowers’ outlook is uncertain. Generally such borrowers have higher leverage than those with a better risk rating. These borrowers typically have limited access to alternative sources of bank debt and may be dependent upon debt funding for working capital support.

7 - Special Mention (OCC definition) - Other Assets Especially Mentioned (“OAEM”) are loans that have potential weaknesses which may, if not reversed or corrected, weaken the asset or inadequately protect the Bank’s credit position at some future date. Such assets constitute an undue and unwarranted credit risk but not to the point of justifying a classification of “Substandard.” The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances surrounding a specific asset.

8 - Substandard (OCC definition) - These loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some losses if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified as substandard.

9 - Doubtful (OCC definition) - These loans have all the weakness inherent in one classified as “Substandard” with the added characteristics that the weakness makes collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but, because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidating procedures, capital injection, perfecting liens or additional collateral and refinancing plans.

10 - Loss (OCC definition) - These loans are charged-off because they are determined to be uncollectible and unbankable assets. This classification does not indicate that the asset has no absolute recovery or salvage value, but rather it is not practical or desirable to defer writing-off this asset even though partial recovery may be affected in the future. Losses should be taken in the period in which they are determined to be uncollectible.

Loans that are risk-rated 1 through 6 as defined above are considered to be pass-rated loans. As of March 31, 2016 and December 31, 2015, the risk category of gross loans by segment was as follows:
 
March 31, 2016
 
December 31, 2015
 
Special
mention
 
Substandard
 
Doubtful
 
Special
mention
 
Substandard
 
Doubtful
C&I
$
52,527

 
$
39,060

 
$
527

 
$
20,765

 
$
36,268

 
$
445

Payroll finance
159

 
57

 

 

 
96

 

Factored receivables

 
1,544

 

 

 
1,568

 

Equipment financing
1,794

 
2,960

 

 
460

 
1,644

 

Commercial real estate
30,959

 
48,288

 

 
32,472

 
52,290

 

Multi-family
7,658

 
4,697

 

 
5,927

 
1,717

 

ADC
7,168

 
8,123

 

 
7,075

 
7,996

 

Residential mortgage
684

 
18,901

 

 
897

 
20,269

 

Consumer
610

 
8,289

 
29

 
407

 
7,817

 
268

Total
$
101,559

 
$
131,919

 
$
556

 
$
68,003

 
$
129,665

 
$
713



There were no criticized or classified warehouse lending loans for the periods presented. There were no loans rated “loss” at March 31, 2016 and December 31, 2015. The increase in loans rated special mention between the periods presented above was mainly due to the NSBC Acquisition.

v3.4.0.3
Goodwill and Other Intangible Assets
3 Months Ended
Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets

The balance of goodwill and other intangible assets for the periods presented were as follows:
 
March 31,
 
December 31,
 
2016
 
2015
Goodwill
$
696,600

 
$
670,699

Other intangible assets:
 
 
 
Core deposits
$
43,709

 
$
45,794

Customer lists
9,156

 
7,959

Non-compete agreements
2,260

 
2,925

Trade name
20,500

 
20,500

Fair value of below market leases
165

 
189

Total other intangible assets
$
75,790

 
$
77,367



The increase in goodwill at March 31, 2016 compared to December 31, 2015 was due to the NSBC Acquisition. See Note 2. “Acquisitions” for additional information.

The estimated aggregate future amortization expense for intangible assets remaining as of March 31, 2016 was as follows:
 
Amortization expense
Remainder of 2016
$
9,438

2017
8,838

2018
7,285

2019
6,074

2020
5,428

2021
5,022

Thereafter
13,205

Total
$
55,290


v3.4.0.3
Deposits
3 Months Ended
Mar. 31, 2016
Deposits [Abstract]  
Deposits
Deposits

Deposit balances at March 31, 2016 and December 31, 2015 were summarized as follows: 
 
March 31,
 
December 31,
 
2016
 
2015
Non-interest bearing demand
$
3,027,471

 
$
2,936,981

Interest bearing demand
1,818,131

 
1,274,417

Savings
771,961

 
943,632

Money market
3,046,634

 
2,819,788

Certificates of deposit
664,425

 
605,189

Total deposits
$
9,328,622

 
$
8,580,007


Municipal deposits totaled $1,285,263 and $1,140,206 at March 31, 2016 and December 31, 2015, respectively. See Note 3. “Securities” for the amount of securities that were pledged as collateral for municipal deposits and other purposes.                     
Listed below are the Company’s brokered deposits:
 
March 31,
 
December 31,

 
2016
 
2015
Money market
$
219,305

 
$
258,007

Reciprocal CDARs 1
96,962

 
64,131

CDARs one way
89,702

 
106,627

Total brokered deposits
$
405,969

 
$
428,765

1 Certificate of deposit account registry service.

v3.4.0.3
Borrowings
3 Months Ended
Mar. 31, 2016
Debt Instruments [Abstract]  
Borrowings
Borrowings

The Company’s borrowings and weighted average interest rates are summarized as follows for the periods presented: 
 
March 31,
 
December 31,
 
2016
 
2015
 
Amount
 
Rate
 
Amount
 
Rate
By type of borrowing:
 
 
 
 
 
 
 
FHLB borrowings
$
1,444,817

 
0.87
%
 
$
1,409,885

 
1.32
%
Other borrowings (repurchase agreements)
23,571

 
0.57

 
16,566

 
0.55

Senior notes
98,996

 
5.98

 
98,893

 
5.98

Subordinated notes
108,124

 
5.47

 

 

Total borrowings
$
1,675,508

 
1.46
%
 
$
1,525,344

 
1.61
%
By remaining period to maturity:
 
 
 
 
 
 
 
Less than one year
$
1,061,219

 
0.67
%
 
$
999,222

 
0.69
%
One to two years
145,000

 
1.13

 
295,000

 
3.19

Two to three years
258,996

 
3.17

 
228,893

 
3.57

Three to four years
50,000

 
1.38

 

 

Four to five years
50,000

 
1.68

 

 

Greater than five years
110,293

 
5.46

 
2,229

 
4.92

Total borrowings
$
1,675,508

 
1.46
%
 
$
1,525,344

 
1.61
%


FHLB borrowings. As a member of the FHLB, the Bank may borrow up to a discounted percentage of the amount of eligible mortgages and securities that have been pledged as collateral under a blanket security agreement. As of March 31, 2016 and December 31, 2015, the Bank had total residential mortgage and commercial real estate loans pledged after discount of $2,205,834 and $2,050,982, respectively. In addition to the pledged mortgages, the Bank had also pledged securities to secure borrowings, which are disclosed in Note 3. “Securities.” As of March 31, 2016, the Bank had unused borrowing capacity at the FHLB of $963,416 and may increase its borrowing capacity by pledging securities not required to be pledged for other purposes with a collateral value of approximately $1,005,295.

FHLB borrowings included $200,000 at December 31, 2015 that were putable quarterly at the discretion of the FHLB. These borrowings had a weighted average remaining term to the contractual maturity dates of approximately 1.31 years at December 31, 2015 and a weighted average interest rate of 4.23%. The Company redeemed these borrowings on March 31, 2016, together with $20,000 of other borrowings with an interest rate of 3.57%. The Company incurred a loss on extinguishment of debt associated with these repayments of $8,716, which is included in non-interest expense in the consolidated income statements.

Other borrowings (repurchase agreements). The Bank enters into sales of securities under agreements to repurchase. These repurchase agreements facilitate the needs of our customers and a portion of our secured short-term funding needs. Securities sold under agreements to repurchase at March 31, 2016 and December 31, 2015 are secured short-term borrowings that mature in one to 45 days and are generally renewed on a continuous basis. Repurchase agreements are stated at the amount of cash received in connection with these transactions. The securities pledged under these repurchase agreements fluctuate in value due to market conditions. The Bank is obligated to promptly transfer additional securities if the market value of the securities falls below the repurchase agreement price. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents.

Senior Notes. On July 2, 2013, the Company issued $100,000 principal amount of 5.50% fixed rate senior notes (the “Senior Notes”) through a private placement at a discount of 1.75%. The cost of issuance was $303, and at March 31, 2016 and December 31, 2015 the unamortized debt issuance costs were $1,004 and $1,107, respectively, which will be accreted to interest expense over the life of the Senior Notes, resulting in an effective yield of 5.98%. Interest is due semi-annually in arrears on January 2 and July 2 until maturity on July 2, 2018.

Subordinated Notes. On March 29, 2016, the Bank issued $110,000 principal amount of 5.25% fixed-to-floating rate subordinated notes (the “Subordinated Notes”) through a private placement at a discount of 1.25%. The cost of issuance was $500, and at March 31, 2016 the unamortized debt issuance costs were $1,876, which will be accreted to interest expense over the life of the subordinated notes, resulting in an effective yield of 5.47%. Interest is due semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2016, until April 1, 2021. From and including April 1, 2021, the subordinated notes will bear interest at a floating rate per annum equal to three-month LIBOR plus 3.937%, payable quarterly on January 1, April 1, July 1 and October 1 of each year, beginning on July 1, 2021, through maturity on April 1, 2026 or earlier redemption. The subordinated notes are redeemable by the Bank, in whole or in part, on April 1, 2021 and each interest payment date thereafter. The subordinated notes are redeemable in whole at any time upon certain specified events. The subordinated notes are unsecured, subordinated obligations of the Bank and are subordinated in right of payment to all of the Bank’s existing and future senior indebtedness, including claims of depositors and general creditors. The subordinated notes qualify as Tier 2 capital for regulatory purposes, see Note 15. “Stockholders’ Equity” for additional information.

Revolving line of credit. The Company has a $15,000 revolving line of credit facility (the “Credit Facility”) with a financial institution that matures on September 5, 2016. The balance was zero at March 31, 2016 and December 31, 2015. The use of proceeds are for general corporate purposes. The line and accrued interest is payable at maturity, and the Company is required to maintain a zero balance for at least 30 days during its term. Loans under the Credit Facility bear interest at one-month LIBOR plus 1.25%. Under the terms of the Credit Facility, the Company and the Bank must maintain certain ratios related to capital, non-performing assets to capital, reserves to non-performing loans and debt service coverage. The Company and the Bank were in compliance with all requirements of the Credit Facility at March 31, 2016.

v3.4.0.3
Derivatives
3 Months Ended
Mar. 31, 2016
Derivative Instruments and Hedges, Assets [Abstract]  
Derivatives
Derivatives

The Company has entered into certain interest rate swap contracts that are not designated as hedging instruments. These derivative contracts relate to transactions in which the Company enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, the Company agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the Company’s customers to effectively convert a variable rate loan to a fixed rate. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts for the most part offset each other and do not significantly impact the Company’s results of operations.

The Company pledged investment securities with a fair value of $4,323 as of March 31, 2016 as collateral for the swaps with another financial institution. The Company may need to post additional collateral to swap counterparties in the future in proportion to potential increases in unrealized loss positions.

The Company does not typically require its commercial customers to post cash or securities as collateral on its program of back-to-back swaps. However, certain language is written into the International Swaps and Derivatives Association agreement and loan documents where, in default situations, the Company is allowed to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability.

Summary information as of March 31, 2016 and December 31, 2015 regarding these derivatives is presented below:
 
Notional
amount
 
Average
maturity (in years)
 
Weighted
average
fixed rate 
 
Weighted
average
variable rate
 
Fair value
March 31, 2016
 
 
 
 
 
 
 
 
 
3rd party interest rate swap
$
116,032

 
5.64
 
3.96
%
 
1 m Libor + 2.19
 
$
4,323

Customer interest rate swap
(116,032
)
 
5.64
 
3.96

 
1 m Libor + 2.19
 
(4,323
)
December 31, 2015
 
 
 
 
 
 
 
 
 
3rd party interest rate swap
87,094

 
5.44
 
4.09

 
1 m Libor + 2.15
 
1,839

Customer interest rate swap
(87,094
)
 
5.44
 
4.09

 
1 m Libor + 2.15
 
(1,839
)


The Company enters into various commitments to sell real estate loans into the secondary market. Such commitments are considered to be derivative financial instruments; however, the fair value of these commitments is not material.

v3.4.0.3
Income Taxes
3 Months Ended
Mar. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

Actual income tax expense differs from the tax computed based on pre-tax income and the applicable statutory federal tax rate for the
following reasons:
 
For the three months ended
 
March 31,
 
2016
 
2015
Income before income tax expense
$
36,009

 
$
24,856

Tax at Federal statutory rate of 35%
12,603

 
8,700

State and local income taxes, net of Federal tax benefit
1,993

 
875

Tax-exempt interest, net of disallowed interest
(1,834
)
 
(984
)
Bank owned life insurance income
(445
)
 
(251
)
Non-deductible acquisition related costs

 
140

Low income housing tax credits
(54
)
 
(54
)
Other, net
(20
)
 
(348
)
Actual income tax expense
$
12,243

 
$
8,078

Effective income tax rate
34.0
%
 
32.5
%


Net deferred tax assets totaled $16,065 at March 31, 2016 and $31,079 at December 31, 2015. No valuation allowance was recorded against deferred tax assets at March 31, 2016 as management believes it is more likely than not that all of the deferred tax assets will be realized because they were supported by recoverable taxes paid in prior years. There were no unrecognized tax benefits during any of the reported periods. Interest and/or penalties related to income taxes are reported as a component of other non-interest expense. Such amounts were not material during the reported periods.

The Company is generally no longer subject to examination by Federal, state and local taxing authorities for fiscal years prior to September 30, 2012.

v3.4.0.3
Stock-Based Compensation
3 Months Ended
Mar. 31, 2016
Compensation and Retirement Disclosure [Abstract]  
Stock-Based Compensation
Stock-Based Compensation

The Company has active stock-based compensation plans, as described below.

The Company’s stockholders approved the 2015 Omnibus Equity and Incentive Plan (the “2015 Plan”) on May 28, 2015. The 2015 Plan permits the grant of stock options, stock appreciation rights, restricted stock (both time-based and performance-based), restricted stock units, deferred stock and other stock-based awards. The total number of shares that may be awarded under the 2015 Plan is 2,800,000 shares plus the remaining shares available for grant under the 2014 Stock Incentive Plan (the “2014 Plan”). At March 31, 2016, there were 3,642,091 shares available for future grant under the 2015 Plan.

The Company’s stockholders approved the 2014 Plan. The approval of the 2015 Plan resulted in the termination of the 2014 Plan. Awards granted under the 2014 Plan that were outstanding as of May 28, 2015 will continue to be governed by the 2014 Plan document; however, no future grants will be made under the 2014 Plan.

Under the 2015 Plan, one share is deducted from the 2015 Plan for every share that is awarded and delivered under the 2015 Plan.

Restricted stock awards are granted with a fair value equal to the market price of the Company’s common stock at the date of grant. Stock option awards are granted with a strike price that is equal to the market price of the Company’s stock at the date of grant. The awards generally vest in equal installments annually on the anniversary date and have total vesting periods ranging from 1 to 5 years and stock options having 10 year contractual terms.

In addition to the 2015 Plan and the 2014 Plan, the Company previously granted awards under its 2011 Employment Inducement Stock Program, which included options to purchase 107,526 shares of common stock and restricted stock awards covering 29,550 shares of common stock, both of which vested in four equal installments through July 2015.

In connection with the Provident Merger, the Company granted 104,152 options at an exercise price of $14.25 per share pursuant to a Registration Statement on Form S-8 under which the Company assumed all outstanding fully vested Legacy Sterling stock options, which expire March 15, 2017. The Company also granted 95,991 shares under the Sterling Bancorp 2013 Employment Inducement Award Plan to certain executive officers of Legacy Sterling. In addition, the Company issued 255,973 shares of restricted stock from shares available under a prior plan to certain executives of Legacy Sterling. The weighted average grant date fair value under both of these plans was $11.72 per share and the restricted stock awards vest in equal annual installments on the anniversary date over a three-year period.

The following table summarizes the activity in the Company’s active stock-based compensation plans for the three months ended March 31, 2016:
 
 
 
Non-vested stock awards/stock units outstanding
 
Stock options outstanding
 
Shares available for grant
 
Number of shares
 
Weighted average grant date fair value
 
Number of shares
 
Weighted average exercise price
Balance at January 1, 2016
4,125,665

 
726,800

 
$
13.36

 
1,586,572

 
$
10.95

Granted
(483,574
)
 
483,574

 
14.21

 

 

Stock awards vested

 
(32,623
)
 

 

 

Exercised

 

 

 
(79,031
)
 
9.33

Forfeited
48,646

 
(4,650
)
 
13.00

 
(32,312
)
 
13.08

Canceled/expired
(48,646
)
 

 

 

 

Balance at March 31, 2016
3,642,091

 
1,173,101

 
$
14.08

 
1,475,229

 
$
10.99

Exercisable at March 31, 2016
 
 
 
 
 
 
1,099,791

 
$
10.35


The total intrinsic value of outstanding in-the-money stock options and outstanding in-the-money exercisable stock options was $7,289 and $6,137, respectively, at March 31, 2016.

The Company uses an option pricing model to estimate the grant date fair value of stock options granted. There were no stock options granted during the three months ended March 31, 2016. There were 15,000 stock options granted during the three months ended March 31, 2015. The weighted average estimated value per option granted was $2.08 for the three months ended March 31, 2015.

The fair value of options during the first quarter of 2015 granted was determined using the following weighted average assumptions as of the grant date:
 
For the three months
 
ended March 31,
 
2015
Risk-free interest rate
1.9
%
Expected stock price volatility
20.9

Dividend yield (1)
3.1

Expected term in years
5.76

(1) Represents the approximate annualized cash dividend rate paid with respect to a share of common stock at or near the grant date.

Stock-based compensation expense is recognized ratably over the requisite service period for all awards. Stock-based compensation expense associated with stock options and non-vested stock awards and the related income tax benefit is presented below:
 
For the three months
 
ended March 31,
 
2016
 
2015
Stock options
$
126

 
$
281

Non-vested stock awards/performance units
1,414

 
828

Total
$
1,540

 
$
1,109

Income tax benefit
524

 
377

Proceeds from stock option exercises
546

 
2,758



Unrecognized stock-based compensation expense as of March 31, 2016 was as follows:
 
March 31, 2016
Stock options
$
503

Non-vested stock awards/performance units
12,848

Total
$
13,351



The weighted average period over which unrecognized stock options expense is expected to be recognized is 1.34 years. The weighted average period over which unrecognized non-vested stock awards/performance units expense is expected to be recognized is 2.29 years.

v3.4.0.3
Pension and Other Post Retirement Plans
3 Months Ended
Mar. 31, 2016
Compensation and Retirement Disclosure [Abstract]  
Pension and Other Post Retirement Plans
Pension and Other Post Retirement Plans

Net pension expense (benefit) and post-retirement expense (benefit) is comprised of the following for the periods presented below:
 
Pension plan
 
Other post retirement plans
 
For the three months ended
 
For the three months ended
 
March 31,
 
March 31,
 
2016
 
2015
 
2016
 
2015
Service cost
$

 
$

 
$

 
$
2

Interest cost

 
589

 
104

 
94

Expected return on plan assets

 
(729
)
 

 

Net amortization and deferral

 
91

 
12

 
40

Total pension expense (benefit) and other post-retirement expense
$

 
$
(49
)
 
$
116

 
$
136


 
 
 
 

Net pension expense (benefit) and post-retirement expense is included as a component of compensation and benefits in the consolidated income statements.

The Company incurred no pension plan expense in the three months ended March 31, 2016, as the Company terminated the Sterling National Bank / Sterling Bancorp Defined Benefit Pension Plan (the “Plan”) in October 2015. After settlement of all Plan obligations, a pension reversion asset of $11,642 and $11,442 (recorded in other assets in the consolidated balance sheets) at March 31, 2016 and December 31, 2015, respectively, will be held in custody by the Company’s 401(k) plan custodian and will be charged to earnings over the next five to seven years as it is distributed to employees under qualified compensation and benefit programs.

The Company’s other post retirement plans include a non-qualified Supplemental Executive Retirement Plan (“SERP”) that provides certain officers and executives with supplemental retirement benefits. The Company contributed $30 and $26 to fund SERP benefits during the three months ended March 31, 2016 and 2015, respectively. Total post retirement plan liabilities were $11,819 and $11,733 at March 31, 2016 and December 31, 2015, respectively, and are included in other liabilities in the consolidated balance sheets.

v3.4.0.3
Other Non-Interest Expense
3 Months Ended
Mar. 31, 2016
Other Income and Expenses [Abstract]  
Other Non-interest Expense
Other Non-interest Expense

Other non-interest expense items for the three months ended March 31, 2016 and 2015, respectively, are presented in the following table. Components exceeding 1% of the aggregate of total net interest income and total non-interest income are presented separately.
 
For the three months ended
 
March 31,
 
2016
 
2015
Other non-interest expense:
 
 
 
   Professional fees
$
2,471

 
$
1,915

   Data and check processing
1,754

 
2,148

Insurance & surety bond premium
785

 
648

Charge for asset write-downs
2,485

 

   Other
5,720

 
5,111

Total other non-interest expense
$
13,215

 
$
9,822


v3.4.0.3
Earnings Per Common Share
3 Months Ended
Mar. 31, 2016
Earnings Per Share [Abstract]  
Earnings Per Common Share
Earnings Per Common Share

The following is a summary of the calculation of earnings per share (“EPS”):
 
For the three months ended
 
March 31,
 
2016
 
2015
 Net income
$
23,766

 
$
16,778

Weighted average common shares outstanding for computation of basic EPS
129,974,025

 
87,839,029

Common-equivalent shares due to the dilutive effect of stock options and unvested performance share grants(1)
526,950

 
413,739

Weighted average common shares for computation of diluted EPS
130,500,975

 
88,252,768

Earnings per common share:
 
 
 
Basic
$
0.18

 
$
0.19

Diluted
0.18

 
0.19

Weighted average common shares that could be exercised that were anti-dilutive for the period(2)

 
112,891


(1) Represents incremental shares computed using the treasury stock method.
(2) Anti-dilutive shares are not included in determining diluted earnings per share; there were no anti-dilutive shares in the three months ended March 31, 2016.

v3.4.0.3
Stockholders' Equity
3 Months Ended
Mar. 31, 2016
Stockholders' Equity Note [Abstract]  
Stockholders' Equity
Stockholders’ Equity

(a) Regulatory Capital Requirements
Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines, and additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk-weighting, and other factors.

The Basel III Capital Rules became effective for the Company and the Bank on January 1, 2015 (subject to a phase-in period for certain provisions). Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1 capital (as defined in the regulations), Tier 1 capital (as defined in the regulations) and Total capital (as defined in the regulations) to risk-weighted assets (as defined, “RWA”), and of Tier 1 capital to adjusted quarterly average assets (as defined in the regulation) (the “Tier 1 leverage ratio”).

The Company’s and the Bank’s Common Equity Tier 1 capital consists of common stock and related paid-in capital, net of treasury stock, and retained earnings. In connection with the adoption of the Basel III Capital Rules, we elected to opt-out of the requirement to include most components of accumulated other comprehensive income in Common Equity Tier 1 capital. Common Equity Tier 1 capital for both the Company and the Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities and subject to transition provisions.

Tier 1 capital includes Common Equity Tier 1 capital and additional Tier 1 capital. Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital (as defined in the regulations) for both the Bank and the Company includes a permissible portion of the allowance for loan losses and $108,124 and $95,661 of the Subordinated Notes, respectively. During the final five years of the term of the Subordinated Notes the permissible portion eligible for inclusion in Tier 2 capital decreases by 20% annually. See Note 8. “Borrowings.”  

The Common Equity Tier 1, Tier 1 and Total capital ratios are calculated by dividing the respective capital amounts by RWA. RWA is calculated based on regulatory requirements and includes total assets, excluding goodwill and other intangible assets, allocated by risk weight category, and certain off-balance-sheet items, among other things.

The Tier 1 leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, which exclude goodwill and other intangible assets, among other things. When fully phased-in on January 1, 2019, the Basel III Capital Rules will require the Company and the Bank to maintain: (i) a minimum ratio of Common Equity Tier 1 capital to RWA of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% Common Equity Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum ratio of Common Equity Tier 1 capital to RWA of at least 7.0% upon full implementation); (ii) a minimum ratio of Tier 1 capital to RWA of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation); (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to RWA of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation); and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to adjusted quarterly average assets.

The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and is being phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019). The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company or the Bank.

The aforementioned capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of Common Equity Tier 1 capital to RWA above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall.

The following tables presents actual and required capital ratios as of March 31, 2016 and December 31, 2015 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of March 31, 2016 and December 31, 2015 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
 
Actual
 
Minimum capital required - Basel III phase-in schedule
 
Minimum capital required - Basel III fully phased-in
 
Required to be considered well capitalized
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
$
1,032,118

 
10.89
%
 
$
486,060

 
5.125
%
 
$
663,240

 
7.00
%
 
$
615,865

 
6.50
%
Sterling Bancorp
970,224

 
10.24

 
486,244

 
5.125

 
663,492

 
7.00

 
N/A

 
N/A

Tier 1 capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,032,118

 
10.89
%
 
628,183

 
6.625
%
 
805,362

 
8.50
%
 
757,988

 
8.00
%
Sterling Bancorp
970,224

 
10.24

 
628,421

 
6.625

 
805,668

 
8.50

 
N/A

 
N/A

Total capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,193,805

 
12.60
%
 
817,680

 
8.625
%
 
994,859

 
10.50
%
 
947,485

 
10.00
%
Sterling Bancorp
1,119,448

 
11.81

 
817,990

 
8.625

 
995,237

 
10.50

 
N/A

 
N/A

Tier 1 leverage ratio:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,032,118

 
9.16

 
450,703

 
4.000

 
450,703

 
4.00

 
563,379

 
5.00
%
Sterling Bancorp
970,224

 
8.60

 
451,378

 
4.000

 
451,378

 
4.00

 
N/A

 
N/A

 
Actual
 
Minimum capital required - Basel III phase-in schedule
 
Minimum capital required - Basel III fully phased-in
 
Required to be considered well capitalized
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
$
1,053,527

 
11.45
%
 
$
413,951

 
4.50
%
 
$
643,923

 
7.00
%
 
$
597,929

 
6.50
%
Sterling Bancorp
988,174

 
10.74

 
414,047

 
4.50

 
644,073

 
7.00

 
N/A

 
N/A

Tier 1 capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,053,527

 
11.45
%
 
551,934

 
6.00
%
 
781,907

 
8.50
%
 
735,912

 
8.00
%
Sterling Bancorp
988,174

 
10.74

 
552,063

 
6.00

 
782,089

 
8.50

 
N/A

 
N/A

Total capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,104,221

 
12.00
%
 
735,912

 
8.00
%
 
965,885

 
10.50
%
 
919,891

 
10.00
%
Sterling Bancorp
1,038,868

 
11.29

 
736,084

 
8.00

 
966,110

 
10.50

 
N/A

 
N/A

Tier 1 leverage ratio:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,053,527

 
9.65
%
 
436,678

 
4.00
%
 
436,678

 
4.00
%
 
545,848

 
5.00
%
Sterling Bancorp
988,174

 
9.03

 
437,629

 
4.00

 
437,629

 
4.00

 
N/A

 
N/A



The Bank and the Company are subject to the regulatory capital requirements administered by the Federal Reserve, and, for the Bank, the Office of the Comptroller of the Currency. Regulatory authorities can initiate certain mandatory actions if the Bank or the Company fail to meet the minimum capital requirements, which could have a direct material effect on our financial statements. As of March 31, 2016, management believes that the Bank and the Company meet all capital adequacy requirements to which they are subject.
 
(b) Dividend Restrictions
The Company is mainly dependent upon dividends from the Bank to provide funds for the payment of dividends to stockholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that fiscal year combined with the retained net profits for the preceding two fiscal years. Under the foregoing dividend restrictions and while maintaining its “well-capitalized” status, at March 31, 2016, the Bank had capacity to pay aggregate dividends of up to $66,516 to the Company without prior regulatory approval.

(c) Capital Raise
On February 11, 2015, the Company completed a public offering of 6.9 million shares of common stock at an offering price of $13.00 per share for gross proceeds of approximately $89,700, and net proceeds, after underwriting discounts, commissions and other costs of issuance, of $85,059.
 
(d) Stock Repurchase Plans
From time to time, the Company’s board of directors has authorized stock repurchase plans. The Company has 776,713 shares that are available to be purchased under a previously announced stock repurchase program. There were no shares repurchased under the repurchase program during the three months ended March 31, 2016 or March 31, 2015.

(e) Liquidation Rights
Upon completion of a second-step conversion in January 2004, the Bank established a special “liquidation account” in accordance with Office of the Comptroller of the Currency regulations. The account was established for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders (as defined in the plan of conversion) in an amount equal to the greater of (i) the Mutual Holding Company’s (as defined in the plan of conversion) ownership interest in the retained earnings of the Bank as of the date of its latest balance sheet contained in the prospectus; or (ii) the retained earnings of the Bank at the time that the Bank reorganized into the Mutual Holding Company in 1999. Each Eligible Account Holder and Supplemental Eligible Account Holder that continues to maintain his or her deposit account at the Bank would be entitled, in the event of a complete liquidation of the Bank, to a pro rata interest in the liquidation account prior to any payment to the stockholders of the Company. The liquidation account is reduced annually on September 30 to the extent that Eligible Account Holders and Supplemental Eligible Account Holders have reduced their qualifying deposits as of each anniversary date. At March 31, 2016, the liquidation account had a balance of $13,300. Subsequent increases in deposits do not restore such account holder’s interest in the liquidation account. The Bank may not pay cash dividends or make other capital distributions if the effect thereof would reduce its stockholders’ equity below the amount of the liquidation account.

(f) Impact of HVB Merger
On June 30, 2015, the Company completed the HVB Merger. In connection with the HVB Merger, the Company issued 38.5 million common shares to HVHC shareholders, which resulted in an increase of $563,613 in stockholders’ equity.

v3.4.0.3
Commitment and Contingencies
3 Months Ended
Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies

(a) Off-Balance-Sheet Financial Instruments
In the normal course of business, the Company enters into various transactions, which in accordance with GAAP are not included in its consolidated balance sheet. The Company enters into these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The Company minimizes its exposure to losses under these commitments by subjecting them to credit approval and monitoring procedures.

The Company enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes.  Substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. Standby letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third-party. In the event the customer does not perform in accordance with the terms of the agreement with the third-party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount of the commitment. If the commitment were funded, the Company would be entitled to seek recovery from the customer. Based on the Company’s credit risk exposure assessment of standby letter of credit arrangements, the arrangements contain security and debt covenants similar to those contained in loan agreements.

The contractual or notional amounts of these instruments, which reflect the extent of the Company’s involvement in particular classes of off-balance sheet financial instruments, are summarized as follows: 
 
March 31,
 
December 31,

 
2016
 
2015
Loan origination commitments
$
234,023

 
$
269,636

Unused lines of credit
749,028

 
660,915

Letters of credit
114,969

 
102,930



(b) Lease Commitments
The Company leases certain premises and equipment under operating leases with terms expiring through January 2034. Included in occupancy and office operations expense was net rent expense of $3,522 and $1,577 during the three months ended March 31, 2016 and 2015, respectively. Future minimum lease payments due under non-cancelable operating leases at March 31, 2016 were as follows:
Remainder of 2016
$
8,618

2017
10,724

2018
9,546

2019
7,310

2020
5,955

2021
5,521

2022 and thereafter
22,270

 
$
69,944



(c) Litigation
The Company and the Bank are involved in a number of judicial proceedings concerning matters arising from conducting their business activities. These include routine legal proceedings arising in the ordinary course of business. These proceedings also include actions brought against the Company and the Bank with respect to corporate matters and transactions in which the Company and the Bank are or were involved. In addition, the Company and the Bank may be requested to provide information or otherwise cooperate with government authorities in the conduct of investigations of other persons or industry groups.

There can be no assurance as to the ultimate outcome of a legal proceeding; however, the Company and the Bank have generally denied liability in all significant litigation pending against them and intend to defend vigorously each case, other than matters thata are determined appropriate to be settled. The Company and the Bank accrue a liability for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts accrued for those claims.

v3.4.0.3
Fair Value Measurements
3 Months Ended
Mar. 31, 2016
Fair Value Disclosures [Abstract]  
Fair value measurements
Fair value measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risk, etc.) or inputs that are derived principally from, or corroborated by, market data by correlation or other means.

Level 3 Inputs – Unobservable inputs for determining the fair value of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

In general, fair value is based on quoted market prices, when available. If quoted market prices in active markets are not available, fair value is based on internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.  These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates; therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein. A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value is set forth below. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincide with the Company’s monthly and/or quarterly valuation process.

Investment Securities Available for Sale
The majority of the Company’s available for sale investment securities are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the securities’ terms and conditions, among other things.

The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company does not purchase investment securities that have a complicated structure. The Company’s entire portfolio consists of traditional investments, nearly all of which are mortgage pass-through securities, state and municipal general obligation or revenue bonds, U.S. agency bullet and callable securities and corporate bonds. Pricing for such instruments is fairly generic and is easily obtained. From time to time, the Company validates, on a sample basis, prices supplied by the independent pricing service by comparison to prices obtained from third-party sources or derived using internal models.

As of March 31, 2016, we do not believe any of our securities are OTTI; however, we review all of our securities on at least a quarterly basis to assess whether impairment, if any, is OTTI.
 
Derivatives
The fair values of derivatives are based on valuation models using current market terms (including interest rates and fees), the remaining terms of the agreements and the creditworthiness of the counterparty as of the measurement date (Level 2 inputs). The Company’s derivatives consist of interest rate swaps. See Note 9. “Derivatives” for additional information.

Commitments to Sell Real Estate Loans
The Company enters into various commitments to sell real estate loans in the secondary market. Such commitments are considered to be derivative financial instruments and if material, are carried at estimated fair value on the consolidated balance sheets. The estimated fair values of these commitments were generally calculated by reference to quoted prices in secondary markets for commitments to sell to certain government sponsored agencies. The fair values of these commitments generally result in a Level 2 classification and are not material.
 
A summary of assets and liabilities at March 31, 2016 measured at estimated fair value on a recurring basis is as follows:
 
March 31, 2016
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
Assets:
 
 
 
 
 
 
 
Investment securities available for sale:
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
Agency-backed
$
1,416,951

 
$

 
$
1,416,951

 
$

CMO(1)/Other MBS
74,672

 

 
74,672

 

Total residential MBS
1,491,623

 

 
1,491,623

 

Other securities:
 
 
 
 
 
 
 
Federal agencies
83,710

 

 
83,710

 

Corporate
87,179

 

 
87,179

 

State and municipal
223,517

 

 
223,517

 

Other
8,791

 

 
8,791

 

Total other securities
403,197

 

 
403,197

 

Total available for sale securities
1,894,820

 

 
1,894,820

 

Swaps
4,323

 

 
4,323

 

Total assets
$
1,899,143

 
$

 
$
1,899,143

 
$

Liabilities:
 
 
 
 
 
 
 
Swaps
$
4,323

 
$

 
$
4,323

 
$

Total liabilities
$
4,323

 
$

 
$
4,323

 
$


(1)  Collateralized Mortgage Obligations (“CMOs”) are debt securities that are collateralized by a specific pool of residential mortgage loans, in which the issuer of the CMOs can direct the payments of principal and interest received on the underlying collateral to achieve specific investor cash flow objectives.  The Bank generally acquires planned-amortization class securities and CMOs with a sequential pay structure in order to manage the duration and extension risk inherent in these securities.
A summary of assets and liabilities at December 31, 2015 measured at estimated fair value on a recurring basis is as follows:
 
 
December 31, 2015
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
Assets:
 
 
 
 
 
 
 
Investment securities available for sale:
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
Agency-backed
$
1,217,862

 
$

 
$
1,217,862

 
$

CMO/Other MBS
78,373

 

 
78,373

 

Total residential MBS
1,296,235

 

 
1,296,235

 

Federal agencies
84,267

 

 
84,267

 

Corporate bonds
314,188

 

 
314,188

 

State and municipal
189,035

 

 
189,035

 

Trust preferred
28,517

 

 
28,517

 

       Other
8,790

 

 
8,790

 

Total investment securities available for sale
624,797

 

 
624,797

 

Total available for sale securities
1,921,032

 

 
1,921,032

 

Swaps
1,839

 

 
1,839

 

Total assets
$
1,922,871

 
$

 
$
1,922,871

 
$

Liabilities:
 
 
 
 
 
 
 
Swaps
$
1,839

 
$

 
$
1,839

 
$

Total liabilities
$
1,839

 
$

 
$
1,839

 
$


The following categories of financial assets are not measured at fair value on a recurring basis, but are subject to fair value adjustments in certain circumstances.

Loans Held for Sale and Impaired Loans
Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value as determined by outstanding commitments from investors. Fair value of loans held for sale is determined using quoted prices for similar assets (Level 2 inputs).

When mortgage loans held for sale are sold with servicing rights retained, the carrying value of mortgage loans sold is reduced by the amount allocated to the value of the servicing rights, which is equal to its fair value. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

The Company may record adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of these loans. These adjustments also include certain impairment amounts for collateral dependent loans calculated in accordance with FASB ASC Topic 310 – Receivables when establishing the allowance for loan losses. Impairment amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated impairment amount applicable to that loan does not necessarily represent the fair value of the loan. Real estate collateral is valued using independent appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable by market participants. However, due to the substantial judgment applied and limited volume of activity as compared to other assets, fair value is based on Level 3 inputs. Estimates of fair value used for collateral supporting commercial loans generally are based on assumptions not observable in the market place and are also based on Level 3 inputs. Impaired loans are evaluated on at least a quarterly basis for additional impairment and their carrying values are adjusted as needed. Loans subject to non-recurring fair value measurements were $55,367 and $29,330 at March 31, 2016 and March 31, 2015, respectively. Changes in fair value recognized as a charge-off on loans held by the Company were $0 and $280 for the three months ended March 31, 2016 and 2015, respectively.

When valuing impaired loans that are collateral dependent, the Company charges-off the difference between the recorded investment in the loan and the appraised value, which is generally less than 12 months old. A discount for estimated costs to dispose of the asset is used when evaluating the impaired loans.

A summary of the two classes with impaired loans at March 31, 2016 measured at estimated fair value on a non-recurring basis is the following:
 
March 31, 2016
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
C&I
$
71

 
$

 
$

 
$
71

Commercial real estate
3,030

 

 

 
3,030

Total impaired loans measured at fair value
$
3,101

 
$

 
$

 
$
3,101


A summary of the class of impaired loans at December 31, 2015 measured at estimated fair value on a non-recurring basis is the following:
 
December 31, 2015
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
Commercial real estate
$
3,218

 
$

 
$

 
$
3,218

Total impaired loans measured at fair value
$
3,218

 
$

 
$

 
$
3,218

 
 Mortgage Servicing Rights
When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in net gain on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income.

The Company utilizes the amortization method to subsequently measure the carrying value of its servicing rights. In accordance with FASB ASC Topic 860 - Transfers and Servicing, the Company must record impairment charges on a non-recurring basis, when the carrying value exceeds the estimated fair value. To estimate the fair value of servicing rights, the Company utilizes a third-party valuation provider, which on a quarterly basis, considers the market prices for similar assets and the present value of expected future cash flows associated with the servicing rights. Assumptions utilized include estimates of the cost of servicing, loan default rates, an appropriate discount rate and prepayment speeds. The determination of fair value of servicing rights relies upon Level 3 inputs. The fair value of mortgage servicing rights at March 31, 2016 and December 31, 2015 were $1,115 and $1,204, respectively.

Assets Taken in Foreclosure of Defaulted Loans
Assets taken in foreclosure of defaulted loans are initially recorded at fair value less costs to sell when acquired, which establishes a new cost basis. These assets are subsequently accounted for at the lower of cost or fair value less costs to sell and are primarily comprised of commercial and residential real estate property and, upon initial recognition, are re-measured and reported at fair value through a charge-off to the allowance for loan losses based on the fair value of the foreclosed asset. The fair value is generally determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the market place. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between comparable sales and income data available. The fair value is derived using Level 3 inputs. Appraisals are reviewed by the Company’s credit department, external loan review consultant and verified by officers in the Company’s credit administration area. Assets taken in foreclosure of defaulted loans and facilities held for sale subject to non-recurring fair value measurement were $14,527 and $14,614 at March 31, 2016 and December 31, 2015, respectively. There were $165 and $0 of write-downs related to changes in fair value for those foreclosed assets held by the Company during the three months ended March 31, 2016 and March 31, 2015, respectively.

Significant Unobservable Inputs to Level 3 Measurements
The following table presents quantitative information about significant unobservable inputs used in the fair value measurements for Level 3 assets at March 31, 2016:
Non-recurring fair value measurements
 
Fair value
 
Valuation technique
 
Unobservable input / assumptions
 
Range (1) (weighted average)
Impaired loans:
 
 
 
 
 
 
 
 
C&I
 
$
71

 
Appraisal
 
Adjustments for comparable properties
 
10.0% -25.0% (14.4%)
Commercial real estate
 
$
3,030

 
Appraisal
 
Adjustments for comparable properties
 
22.0% (22.0%)
Assets taken in foreclosure:
 
 
 
 
 
 
 
 
Residential mortgage
 
2,355

 
Appraisal
 
Adjustments by management to reflect current conditions/selling costs
 
10.0% - 22.0% (21.6%)
Commercial real estate(2)
 
7,411

 
Appraisal
 
Adjustments by management to reflect current conditions/selling costs
 
10.0% - 22.0% (22.0%)
ADC
 
4,427

 
Appraisal
 
Adjustments by management to reflect current conditions/selling costs
 
10.0% - 22.0% (22.0%)
Mortgage servicing rights
 
1,115

 
Third-party
 
Discount rates
 
8.5% - 11.5% (9.8%)
 
 
 
 
Third-party
 
Prepayment speeds
 
100 - 418 (208)
(1) Represents range of discount factors applied to the appraisal to determine fair value. The amounts used for mortgage servicing rights are discounts applied by a third-party valuation provider, which the Company believes are appropriate.

(2) Excludes $334 of commercial properties that are former financial centers that were closed and are now held for sale. These assets were not taken in foreclosure and their fair value is determined by third-party appraisals and our internal assessment of the market for this type of real estate.

Fair Values of Financial Instruments
FASB Codification Topic 825 - Financial Instruments requires disclosure of fair value information for those financial instruments for which it is practicable to estimate fair value, whether or not such financial instruments are recognized in the consolidated financial statements for interim and annual periods. Fair value is the amount for which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation.

Quoted market prices are used to estimate fair values when those prices are available, although active markets do not exist for many types of financial instruments. Fair values for these instruments must be estimated by management using techniques such as discounted cash flow analysis and comparison to similar instruments. These estimates are highly subjective and require judgments regarding significant matters, such as the amount and timing of future cash flows and the selection of discount rates that appropriately reflect market and credit risks. Changes in these judgments often have a material effect on the fair value estimates. Since these estimates are made as of a specific point in time, they are susceptible to material near-term changes. Fair values disclosed in accordance with FASB Topic 825 do not reflect any premium or discount that could result from the sale of a large volume of a particular financial instrument, nor do they reflect possible tax ramifications or estimated transaction costs.

The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of March 31, 2016:
 
March 31, 2016
 
Carrying
amount
 

Level 1 inputs
 

Level 2 inputs
 

Level 3 inputs
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
486,730

 
$
486,730

 
$

 
$

Securities available for sale
1,894,820

 

 
1,894,820

 

Securities held to maturity
952,922

 

 
973,826

 

Portfolio loans, net
8,233,149

 

 

 
8,290,596

Loans held for sale
27,237

 

 
27,237

 

Accrued interest receivable on securities
11,937

 

 
11,937

 

Accrued interest receivable on loans
21,455

 

 

 
21,455

FHLB stock and FRB stock
118,330

 

 

 

Swaps
4,323

 

 
4,323

 

Financial liabilities:
 
 
 
 
 
 
 
Non-maturity deposits
(8,664,197
)
 
(8,664,197
)
 

 

Certificates of deposit
(664,425
)
 

 
(664,670
)
 

FHLB borrowings
(1,444,817
)
 

 
(1,446,146
)
 

Other borrowings
(23,571
)
 

 
(23,571
)
 

Senior notes
(98,996
)
 

 
(104,134
)
 

Subordinated notes
(108,124
)
 

 
(109,693
)
 

Mortgage escrow funds
(14,972
)
 

 
(14,969
)
 

Accrued interest payable on deposits
(495
)
 

 
(495
)
 

Accrued interest payable on borrowings
(2,376
)
 

 
(2,376
)
 

Swaps
(4,323
)
 

 
(4,323
)
 

The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of December 31, 2015:
 
December 31, 2015
 
Carrying
amount
 

Level 1 inputs
 

Level 2 inputs
 

Level 3 inputs
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
229,513

 
$
229,513

 
$

 
$

Securities available for sale
1,921,032

 

 
1,921,032

 

Securities held to maturity
722,791

 

 
734,079

 

Portfolio loans, net
7,809,215

 

 

 
7,876,064

Loans held for sale
34,110

 

 
34,110

 

Accrued interest receivable on securities
11,329

 

 
11,329

 

Accrued interest receivable on loans
20,202

 

 

 
20,202

FHLB stock and FRB stock
116,758

 

 

 

Swaps
1,839

 

 
1,839

 

Financial liabilities:

 

 

 

Non-maturity deposits
(7,974,817
)
 
(7,974,817
)
 

 

Certificates of deposit
(605,190
)
 

 
(603,634
)
 

FHLB borrowings
(1,409,885
)
 

 
(1,418,155
)
 

Other borrowings
(16,566
)
 

 
(16,430
)
 

Senior notes
(98,893
)
 

 
(105,088
)
 

Mortgage escrow funds
(13,778
)
 

 
(13,775
)
 

Accrued interest payable on deposits
(783
)
 

 
(783
)
 

Accrued interest payable on borrowings
(4,490
)
 

 
(4,490
)
 

Swaps
(1,839
)
 

 
(1,839
)
 



The following paragraphs summarize the principal methods and assumptions used by the Company to estimate the fair value of the Company’s financial instruments:
 
Loans
The estimated fair value approximates carrying value for variable-rate loans that reprice frequently and with no significant change in credit risk. The fair value of fixed-rate loans and variable-rate loans which reprice on an infrequent basis is estimated by discounting future cash flows using the current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality. An overall valuation adjustment is made for specific credit risks, as well as general portfolio credit risk.

FHLB Stock and FRB Stock
The redeemable carrying amount of these securities with limited marketability approximates their fair value.

Deposits and Mortgage Escrow Funds
In accordance with FASB Codification Topic 825 - Financial Instruments, deposits with no stated maturity (such as demand, money market and saving deposits) are assigned fair values equal to the carrying amounts payable on demand. Certificates of deposit and mortgage escrow funds are segregated by account type and original term, and fair values are estimated by discounting the contractual cash flows. The discount rate for each account grouping is equivalent to the current market rates for deposits of similar type and maturity.

These fair values do not include the value of core deposit relationships that comprise a significant portion of the Company’s deposits. We believe that the Company’s core deposit relationships provide a relatively stable, low-cost funding source that has a substantial value separate from the deposit balances.

FHLB Borrowings, Other borrowings, Senior notes and Subordinated notes
The estimated fair value approximates carrying value for short-term borrowings. The fair value of long-term fixed-rate borrowings is estimated using quoted market prices, if available, or by discounting future cash flows using current interest rates for similar financial instruments.

Other Financial Instruments
Other financial assets and liabilities listed in the table above have estimated fair values that approximate their respective carrying amounts because the instruments are payable on demand or have short-term maturities and present relatively low credit risk and interest rate risk.

The fair values of the Company’s off-balance sheet financial instruments described in the “Off-Balance Sheet Financial Instruments” section of Note 16. “Commitments and Contingencies” were estimated based on current market terms (including interest rates and fees), considering the remaining terms of the agreements and the creditworthiness of the counterparties. At March 31, 2016 and December 31, 2015, the estimated fair value of these instruments approximated the related carrying amounts, which were not material.

Accrued Interest Receivable/Payable
The carrying amounts of accrued interest approximate fair value and are classified in accordance with the related instrument.

v3.4.0.3
Accumulated Other Comprehensive Income (Loss)
3 Months Ended
Mar. 31, 2016
Equity [Abstract]  
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income (loss) (“AOCI”) were as follows as of the dates shown below:
 
March 31,
 
December 31,
 
2016
 
2015
Net unrealized holding gain (loss) on available for sale securities
$
15,066

 
$
(12,172
)
Related income tax (expense) benefit
(5,951
)
 
5,173

Available for sale securities AOCI, net of tax
9,115

 
(6,999
)
Net unrealized holding loss on securities transferred to held to maturity
(6,942
)
 
(7,226
)
Related income tax benefit
2,742

 
3,071

Securities transferred to held to maturity AOCI, net of tax
(4,200
)
 
(4,155
)
Net unrealized holding loss on retirement plans
(1,250
)
 
(1,687
)
Related income tax benefit
494

 
717

Retirement plans AOCI, net of tax
(756
)
 
(970
)
AOCI
$
4,159

 
$
(12,124
)

The following table presents the changes in each component of AOCI for the three months ended March 31, 2016 and 2015:
 
Net unrealized holding gain (loss) on available for sale securities
 
Net unrealized holding gain (loss) on securities transferred to held to maturity
 
Net unrealized holding (loss) gain on retirement plans
 
Total
The three months ended March 31, 2016
 
 
 
 
 
 
 
Balance beginning of the period
$
(6,999
)
 
$
(4,155
)
 
$
(970
)
 
$
(12,124
)
Other comprehensive gain before reclassification
16,285

 

 

 
16,285

Amounts reclassified from AOCI
(171
)
 
(45
)
 
214

 
(2
)
Total other comprehensive income
16,114

 
(45
)
 
214

 
16,283

Balance at end of period
$
9,115

 
$
(4,200
)
 
$
(756
)
 
$
4,159

The three months ended March 31, 2015
 
 
 
 
 
 
 
Balance beginning of the period
$
1,297

 
$
(4,967
)
 
$
(6,581
)
 
$
(10,251
)
Other comprehensive gain before reclassification
4,203

 

 

 
4,203

Amounts reclassified from AOCI
882

 
310

 
117

 
1,309

Total other comprehensive income
5,085

 
310

 
117

 
5,512

Balance at end of period
$
6,382

 
$
(4,657
)
 
$
(6,464
)
 
$
(4,739
)
Location in statement of operations where reclassification from AOCI is included
Net (loss) gain on sale of securities
 
Interest income on securities
 
Compensation and benefits expense
 
 
 
 
 
 
 
 
 
 

v3.4.0.3
Recent Accounting Standards, Not Yet Adopted
3 Months Ended
Mar. 31, 2016
Accounting Changes and Error Corrections [Abstract]  
Recently Issued Accounting Standards Not Yet Adopted
Recently Issued Accounting Standards Not Yet Adopted

Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 was originally going to be effective for us on January 1, 2017; however, the FASB recently issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606) - Deferral of the Effective Date” which deferred the effective date of ASU 2014-09 by one year to January 1, 2018. We are currently evaluating the potential impact of ASU 2014-09 on our consolidated financial statements.

ASU 2015-02, “Consolidation (Topic 810) – Amendments to the Consolidation Analysis.” ASU 2015-02 implements changes to both the variable interest consolidation model and the voting interest consolidation model. ASU 2015-02 (i) eliminates certain criteria that must be met when determining whether or not fees paid to a decision maker or service provider represent a variable interest; (ii) amends the criteria for determining whether a limited partnership is a variable interest entity; and (iii)  eliminates the presumption that a general partner controls a limited partnership in the voting model. ASU 2015-02 became effective for us on January 1, 2016 and did not have a material impact on our consolidated financial statements.

ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. ASU 2015-03 became effective for the us on January 1, 2016, and did not have a material impact on our consolidated financial statements.

ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) – Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” ASU 2015-05 addresses accounting for fees paid by a customer in cloud computing arrangements such as (i) software as a service; (ii) platform as a service; (iii) infrastructure as a service; and (iv) other similar hosting arrangements. ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 became effective for us on January 1, 2016 and did not have a material impact on our consolidated financial statements.

ASU 2015-15, “Interest – Imputation of Interest (Subtopic 835-30) – Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting." ASU 2015-15 adds SEC paragraphs pursuant to an SEC staff announcement that given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.

ASU 2015-16, “Business Combinations (Topic 805) – Simplifying the Accounting for Measurement-Period Adjustments.”  ASU 2015-16 requires that adjustments to provisional amounts that are identified during the measurement period of a business combination be recognized in the reporting period in which the adjustment amounts are determined. Furthermore, the income statement effects of such adjustments, if any, must be calculated as if the accounting had been completed at the acquisition date. The portion of the amount recorded in current-period earnings would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Under previous guidance, adjustments to provisional amounts identified during the measurement period are to be recognized retrospectively. ASU 2015-16 became effective for us on January 1, 2016 and did not have a material impact on our financial statements.

ASU 2016-02,“Leases (Topic 842).” ASU 2016-02 will, among other things, require lessees to recognize a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-2 will be effective for us on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We are currently evaluating the potential impact of ASU 2016-02 on our financial statements and our regulatory capital ratios.

ASU 2016-05, “Derivatives and Hedging (Topic 815) Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under ASC Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016-05 will be effective for us on January 1, 2017 and is not expected to have a significant impact on our financial statements.

ASU 2016-07, “Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” The amendments affect all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 simplifies the transition to the equity method of accounting by eliminating retroactive adjustment of the investment when an investment qualifies for use of the equity method, among other things. ASU 2016-07 will be effective for us on January 1, 2017 and is not expected to have a significant impact on our financial statements.

ASU 2016-08, ”Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” ASU 2016-08 was issued to clarify certain principal versus agent considerations within the implementation guidance of ASC Topic 606, “Revenue from Contracts with Customers.” The effective date and transition of ASU 2016-08 is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),”as discussed above. We are currently evaluating the potential impact of ASU 2016-08 on our financial statements.

ASU 2016-09, ”Compensation - Stock compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Under ASU 2016-09 all excess tax benefits and tax deficiencies related to share-based payment awards should be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Because excess tax benefits are no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified along with other income tax cash flows as an operating activity rather than a financing activity, as was previously the case. ASU 2016-09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU 2016-09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. ASU 2016-09 will be effective on January 1, 2017 and is not expected to have a significant impact on our financial statements.

ASU No. 2016-10,  ”Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.”ASU 2016-10 was issued to clarify ASC Topic 606, “Revenue from Contracts with Customers” related to (i) identifying performance obligations; and (ii) the licensing implementation guidance. The effective date and transition of ASU 2016-10 is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” as discussed above. We are currently evaluating the potential impact of ASU 2016-10 on our financial statements.

v3.4.0.3
Basis of Financial Statement Presentation (Policies)
3 Months Ended
Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation
The consolidated financial statements in this Quarterly Report on Form 10-Q include the accounts of the Company and all other entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and financial reporting policies the Company follows conform, in all material respects, to accounting principles generally accepted in the United States (“GAAP”) and to general practices within the banking industry, which includes regulatory reporting instructions.

The consolidated financial statements in this Quarterly Report on Form 10-Q have not been audited by an independent registered public accounting firm, but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations. All such adjustments were of a normal and recurring nature. The consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our consolidated financial statements, and notes thereto, for the year ended December 31, 2015, included in our Annual Report on Form 10-K filed with the SEC on February 29, 2016 (the “2015 Form 10-K”). Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period. Certain items in prior financial statements have been reclassified to conform to the current presentation.

Use of Estimates
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, expense and contingencies at the date of the financial statements. Actual results could differ significantly from these estimates. The allowance for loan losses and the status of contingencies are particularly subject to change.
Recently Issued Accounting Standards Not Yet Adopted
Recently Issued Accounting Standards Not Yet Adopted

Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 was originally going to be effective for us on January 1, 2017; however, the FASB recently issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606) - Deferral of the Effective Date” which deferred the effective date of ASU 2014-09 by one year to January 1, 2018. We are currently evaluating the potential impact of ASU 2014-09 on our consolidated financial statements.

ASU 2015-02, “Consolidation (Topic 810) – Amendments to the Consolidation Analysis.” ASU 2015-02 implements changes to both the variable interest consolidation model and the voting interest consolidation model. ASU 2015-02 (i) eliminates certain criteria that must be met when determining whether or not fees paid to a decision maker or service provider represent a variable interest; (ii) amends the criteria for determining whether a limited partnership is a variable interest entity; and (iii)  eliminates the presumption that a general partner controls a limited partnership in the voting model. ASU 2015-02 became effective for us on January 1, 2016 and did not have a material impact on our consolidated financial statements.

ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. ASU 2015-03 became effective for the us on January 1, 2016, and did not have a material impact on our consolidated financial statements.

ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) – Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” ASU 2015-05 addresses accounting for fees paid by a customer in cloud computing arrangements such as (i) software as a service; (ii) platform as a service; (iii) infrastructure as a service; and (iv) other similar hosting arrangements. ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 became effective for us on January 1, 2016 and did not have a material impact on our consolidated financial statements.

ASU 2015-15, “Interest – Imputation of Interest (Subtopic 835-30) – Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting." ASU 2015-15 adds SEC paragraphs pursuant to an SEC staff announcement that given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.

ASU 2015-16, “Business Combinations (Topic 805) – Simplifying the Accounting for Measurement-Period Adjustments.”  ASU 2015-16 requires that adjustments to provisional amounts that are identified during the measurement period of a business combination be recognized in the reporting period in which the adjustment amounts are determined. Furthermore, the income statement effects of such adjustments, if any, must be calculated as if the accounting had been completed at the acquisition date. The portion of the amount recorded in current-period earnings would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Under previous guidance, adjustments to provisional amounts identified during the measurement period are to be recognized retrospectively. ASU 2015-16 became effective for us on January 1, 2016 and did not have a material impact on our financial statements.

ASU 2016-02,“Leases (Topic 842).” ASU 2016-02 will, among other things, require lessees to recognize a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-2 will be effective for us on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We are currently evaluating the potential impact of ASU 2016-02 on our financial statements and our regulatory capital ratios.

ASU 2016-05, “Derivatives and Hedging (Topic 815) Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under ASC Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016-05 will be effective for us on January 1, 2017 and is not expected to have a significant impact on our financial statements.

ASU 2016-07, “Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” The amendments affect all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 simplifies the transition to the equity method of accounting by eliminating retroactive adjustment of the investment when an investment qualifies for use of the equity method, among other things. ASU 2016-07 will be effective for us on January 1, 2017 and is not expected to have a significant impact on our financial statements.

ASU 2016-08, ”Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” ASU 2016-08 was issued to clarify certain principal versus agent considerations within the implementation guidance of ASC Topic 606, “Revenue from Contracts with Customers.” The effective date and transition of ASU 2016-08 is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),”as discussed above. We are currently evaluating the potential impact of ASU 2016-08 on our financial statements.

ASU 2016-09, ”Compensation - Stock compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Under ASU 2016-09 all excess tax benefits and tax deficiencies related to share-based payment awards should be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Because excess tax benefits are no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified along with other income tax cash flows as an operating activity rather than a financing activity, as was previously the case. ASU 2016-09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU 2016-09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. ASU 2016-09 will be effective on January 1, 2017 and is not expected to have a significant impact on our financial statements.

ASU No. 2016-10,  ”Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.”ASU 2016-10 was issued to clarify ASC Topic 606, “Revenue from Contracts with Customers” related to (i) identifying performance obligations; and (ii) the licensing implementation guidance. The effective date and transition of ASU 2016-10 is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” as discussed above. We are currently evaluating the potential impact of ASU 2016-10 on our financial statements.

v3.4.0.3
Acquisitions (Tables)
3 Months Ended
Mar. 31, 2016
Business Combinations [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The table below summarizes the amounts recognized as of the HVB Merger date for each major class of assets acquired and liabilities assumed, the estimated fair value adjustments and the amounts recorded in the Company’s financial statements at fair value at the HVB Merger date:
Consideration paid through Sterling Bancorp common stock issued to HVHC shareholders
$
566,307

 
HVHC net book value
 
Fair value adjustments
 
As recorded at acquisition
Cash and cash equivalents
$
878,988

 
$

 
$
878,988

Investment securities
713,625

 
217

 (a)
713,842

Loans
1,816,767

 
(24,248
)
 (b)
1,792,519

Federal Reserve Bank stock
5,830

 

 
5,830

Bank owned life insurance
44,231

 

 
44,231

Premises and equipment
11,918

 
4,925

 (c)
16,843

Accrued interest receivable
7,392

 

 
7,392

Core deposits and other intangibles

 
33,839

 (d)
33,839

Other real estate owned
222

 

 
222

Other assets
32,639

 
(7,931
)
 (e)
24,708

Deposits
(3,160,746
)
 

 
(3,160,746
)
Other borrowings
(25,366
)
 

 
(25,366
)
Other liabilities
(37,292
)
 
1,540

 (f)
(35,752
)
Total identifiable net assets
$
288,208

 
$
8,342

 
$
296,550

 
 
 
 
 
 
Goodwill recorded in the HVB Merger
 
 
 
 
$
269,757

Explanation of certain fair value related adjustments:
(a)
Represents the fair value adjustment on investment securities held to maturity.
(b)
Represents the elimination of HVHCs allowance for loan losses and an adjustment of the net book value of loans to estimated fair value, which includes an interest rate mark and credit mark adjustment.
(c)
Represents an adjustment to reflect the fair value of HVHC owned real estate as determined by independent appraisals, which will be amortized on a straight-line basis over the estimated useful lives of the individual assets.
(d)
Represents intangible assets recorded to reflect the fair value of core deposits. The core deposit asset was recorded as an identifiable intangible asset and will be amortized on an accelerated basis over the estimated average life of the deposit base.
(e)
Represents an adjustment in net deferred tax assets resulting from the fair value adjustments related to the acquired assets, liabilities assumed and identifiable intangibles recorded.
(f)
Represents the elimination of HVHC’s deferred rent liability.
Acquired loan portfolio data in the HVB Merger is presented below:
 
Fair value of acquired loans at acquisition date
 
Gross contractual amounts receivable at acquisition date
 
Best estimate at acquisition date of contractual cash flows not expected to be collected
Acquired loans with evidence of deterioration since origination
$
96,973

 
$
122,104

 
$
19,024

Acquired loans with no evidence of deterioration since origination
1,695,546

 
1,974,740

 
37,520


v3.4.0.3
Securities (Tables)
3 Months Ended
Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Summary of securities available for sale
A summary of amortized cost and estimated fair value of securities as of March 31, 2016 and December 31, 2015 is presented below. The term “Residential MBS” refers to residential mortgage-backed securities and the term “CMO” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 17. “Fair Value Measurements”.    
 
March 31, 2016
 
Available for Sale
 
Held to Maturity
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
 
Amortized
cost
 
Gross
unrecognized
gains
 
Gross
unrecognized
losses
 
Fair
value
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
1,400,401

 
$
16,853

 
$
(303
)
 
$
1,416,951

 
$
247,094

 
$
5,599

 
$
(72
)
 
$
252,621

CMO/Other MBS
74,526

 
515

 
(369
)
 
74,672

 
47,687

 
496

 
(122
)
 
48,061

Total residential MBS
1,474,927

 
17,368

 
(672
)
 
1,491,623

 
294,781

 
6,095

 
(194
)
 
300,682

Other securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
83,575

 
138

 
(3
)
 
83,710

 
104,292

 
4,382

 
(9
)
 
108,665

Corporate
91,325

 
317

 
(4,463
)
 
87,179

 
25,192

 

 
(319
)
 
24,873

State and municipal
221,146

 
2,780

 
(409
)
 
223,517

 
522,657

 
11,675

 
(1,036
)
 
533,296

Other
8,781

 
10

 

 
8,791

 
6,000

 
310

 

 
6,310

Total other securities
404,827

 
3,245

 
(4,875
)
 
403,197

 
658,141

 
16,367

 
(1,364
)
 
673,144

Total securities
$
1,879,754

 
$
20,613

 
$
(5,547
)
 
$
1,894,820

 
$
952,922

 
$
22,462

 
$
(1,558
)
 
$
973,826



 
December 31, 2015
 
Available for Sale
 
Held to Maturity
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
 
Amortized
cost
 
Gross
unrecognized
gains
 
Gross
unrecognized
losses
 
Fair
value
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
1,222,912

 
$
2,039

 
$
(7,089
)
 
$
1,217,862

 
$
252,760

 
$
1,857

 
$
(1,214
)
 
$
253,403

CMO/Other MBS
79,430

 
76

 
(1,133
)
 
78,373

 
49,842

 
87

 
(619
)
 
49,310

Total residential MBS
1,302,342

 
2,115

 
(8,222
)
 
1,296,235

 
302,602

 
1,944

 
(1,833
)
 
302,713

Other securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Federal agencies
85,124

 
7

 
(864
)
 
84,267

 
104,135

 
2,458

 
(635
)
 
105,958

Corporate
321,630

 
522

 
(7,964
)
 
314,188

 
25,241

 
11

 
(200
)
 
25,052

State and municipal
187,399

 
2,187

 
(551
)
 
189,035

 
285,813

 
9,327

 
(134
)
 
295,006

Trust preferred
27,928

 
589

 

 
28,517

 

 

 

 

Other
8,781

 
9

 

 
8,790

 
5,000

 
350

 

 
5,350

Total other securities
630,862

 
3,314

 
(9,379
)
 
624,797

 
420,189

 
12,146

 
(969
)
 
431,366

Total securities
$
1,933,204

 
$
5,429

 
$
(17,601
)
 
$
1,921,032

 
$
722,791

 
$
14,090

 
$
(2,802
)
 
$
734,079


Summary of securities held-to-maturity
A summary of amortized cost and estimated fair value of securities as of March 31, 2016 and December 31, 2015 is presented below. The term “Residential MBS” refers to residential mortgage-backed securities and the term “CMO” refers to collateralized mortgage obligations. Both of these terms are further defined in Note 17. “Fair Value Measurements”.    
 
March 31, 2016
 
Available for Sale
 
Held to Maturity
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
 
Amortized
cost
 
Gross
unrecognized
gains
 
Gross
unrecognized
losses
 
Fair
value
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
1,400,401

 
$
16,853

 
$
(303
)
 
$
1,416,951

 
$
247,094

 
$
5,599

 
$
(72
)
 
$
252,621

CMO/Other MBS
74,526

 
515

 
(369
)
 
74,672

 
47,687

 
496

 
(122
)
 
48,061

Total residential MBS
1,474,927

 
17,368

 
(672
)
 
1,491,623

 
294,781

 
6,095

 
(194
)
 
300,682

Other securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
83,575

 
138

 
(3
)
 
83,710

 
104,292

 
4,382

 
(9
)
 
108,665

Corporate
91,325

 
317

 
(4,463
)
 
87,179

 
25,192

 

 
(319
)
 
24,873

State and municipal
221,146

 
2,780

 
(409
)
 
223,517

 
522,657

 
11,675

 
(1,036
)
 
533,296

Other
8,781

 
10

 

 
8,791

 
6,000

 
310

 

 
6,310

Total other securities
404,827

 
3,245

 
(4,875
)
 
403,197

 
658,141

 
16,367

 
(1,364
)
 
673,144

Total securities
$
1,879,754

 
$
20,613

 
$
(5,547
)
 
$
1,894,820

 
$
952,922

 
$
22,462

 
$
(1,558
)
 
$
973,826



 
December 31, 2015
 
Available for Sale
 
Held to Maturity
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair
value
 
Amortized
cost
 
Gross
unrecognized
gains
 
Gross
unrecognized
losses
 
Fair
value
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
1,222,912

 
$
2,039

 
$
(7,089
)
 
$
1,217,862

 
$
252,760

 
$
1,857

 
$
(1,214
)
 
$
253,403

CMO/Other MBS
79,430

 
76

 
(1,133
)
 
78,373

 
49,842

 
87

 
(619
)
 
49,310

Total residential MBS
1,302,342

 
2,115

 
(8,222
)
 
1,296,235

 
302,602

 
1,944

 
(1,833
)
 
302,713

Other securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Federal agencies
85,124

 
7

 
(864
)
 
84,267

 
104,135

 
2,458

 
(635
)
 
105,958

Corporate
321,630

 
522

 
(7,964
)
 
314,188

 
25,241

 
11

 
(200
)
 
25,052

State and municipal
187,399

 
2,187

 
(551
)
 
189,035

 
285,813

 
9,327

 
(134
)
 
295,006

Trust preferred
27,928

 
589

 

 
28,517

 

 

 

 

Other
8,781

 
9

 

 
8,790

 
5,000

 
350

 

 
5,350

Total other securities
630,862

 
3,314

 
(9,379
)
 
624,797

 
420,189

 
12,146

 
(969
)
 
431,366

Total securities
$
1,933,204

 
$
5,429

 
$
(17,601
)
 
$
1,921,032

 
$
722,791

 
$
14,090

 
$
(2,802
)
 
$
734,079


Summary of amortized cost and fair value of investment securities available for sale by remaining period to contractual maturity
 
March 31, 2016
 
Available for sale
 
Held to maturity
 
Amortized
cost
 
Fair
value
 
Amortized
cost
 
Fair
value
Remaining period to contractual maturity:
 
 
 
 
 
 
 
One year or less
$
17,162

 
$
17,194

 
$
13,059

 
$
13,160

One to five years
214,895

 
213,978

 
52,569

 
54,617

Five to ten years
113,074

 
112,148

 
219,829

 
227,552

Greater than ten years
59,696

 
59,877

 
372,684

 
377,815

Total securities with a stated maturity date
404,827

 
403,197

 
658,141

 
673,144

Residential MBS
1,474,927

 
1,491,623

 
294,781

 
300,682

Total securities
$
1,879,754

 
$
1,894,820

 
$
952,922

 
$
973,826

Sale of securities
Sales of securities for the periods indicated below were as follows:
 
For the three months ended
 
March 31,
 
2016
 
2015
Available for sale:
 
 
 
Proceeds from sales
$
275,358

 
$
115,554

Gross realized gains
1,562

 
1,663

Gross realized losses
(1,845
)
 
(129
)
Income tax (benefit) expense on realized net gains
(96
)
 
499

Securities available for sale with unrealized losses, by length of time in continuous unrealized loss position
The following table summarizes securities available for sale with unrealized losses, segregated by the length of time in a continuous unrealized loss position for the periods presented below:
 
Continuous unrealized loss position
 
 
 
 
 
Less than 12 months
 
12 months or longer
 
Total
 
Fair
value
 
Unrealized losses
 
Fair
value
 
Unrealized losses
 
Fair
value
 
Unrealized losses
Available for sale
 
 
 
 
 
 
 
 
 
 
 
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
46,003

 
$
(280
)
 
$
3,716

 
$
(23
)
 
$
49,719

 
$
(303
)
CMO/Other MBS
27,077

 
(359
)
 
1,563

 
(10
)
 
28,640

 
(369
)
Total residential MBS
73,080

 
(639
)
 
5,279

 
(33
)
 
78,359

 
(672
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
206

 

 
2,998

 
(3
)
 
3,204

 
(3
)
Corporate
31,810

 
(1,880
)
 
31,304

 
(2,583
)
 
63,114

 
(4,463
)
State and municipal
5,857

 
(122
)
 
59,317

 
(287
)
 
65,174

 
(409
)
Total other securities
37,873

 
(2,002
)
 
93,619

 
(2,873
)
 
131,492

 
(4,875
)
Total
$
110,953

 
$
(2,641
)
 
$
98,898

 
$
(2,906
)
 
$
209,851

 
$
(5,547
)
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$
18,983

 
$
(528
)
 
$
854,491

 
$
(6,561
)
 
$
873,474

 
$
(7,089
)
CMO/Other MBS
23,682

 
(717
)
 
41,946

 
(416
)
 
65,628

 
(1,133
)
Total residential MBS
42,665

 
(1,245
)
 
896,437

 
(6,977
)
 
939,102

 
(8,222
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
14,933

 
(260
)
 
57,886

 
(604
)
 
72,819

 
(864
)
Corporate
19,257

 
(715
)
 
236,048

 
(7,249
)
 
255,305

 
(7,964
)
State and municipal
3,439

 
(27
)
 
42,924

 
(524
)
 
46,363

 
(551
)
Total other securities
37,629

 
(1,002
)
 
336,858

 
(8,377
)
 
374,487

 
(9,379
)
Total
$
80,294

 
$
(2,247
)
 
$
1,233,295

 
$
(15,354
)
 
$
1,313,589

 
$
(17,601
)
Securities held to maturity with unrealized losses, by length of time in continuous unrealized loss position
The following table summarizes securities held to maturity with unrecognized losses, segregated by the length of time in a continuous unrecognized loss position for the periods presented below:
 
Continuous unrecognized loss position
 
 
 
 
 
Less than 12 months
 
12 months or longer
 
Total
 
Fair
value
 
Unrecognized losses
 
Fair
value
 
Unrecognized losses
 
Fair
value
 
Unrecognized losses
Held to maturity
 
 
 
 
 
 
 
 
 
 
 
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
   Agency-backed
$
6,568

 
$
(69
)
 
$
1,261

 
$
(3
)
 
$
7,829

 
$
(72
)
   CMO/Other MBS
7,984

 
(61
)
 
8,684

 
(61
)
 
16,668

 
(122
)
Total residential MBS
14,552

 
(130
)
 
9,945

 
(64
)
 
24,497

 
(194
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
9,991

 
(9
)
 

 

 
9,991

 
(9
)
Corporate

 

 
24,872

 
(319
)
 
24,872

 
(319
)
State and municipal
2,223

 
(24
)
 
158,959

 
(1,012
)
 
161,182

 
(1,036
)
Total other securities
12,214

 
(33
)
 
183,831

 
(1,331
)
 
196,045

 
(1,364
)
Total
$
26,766

 
$
(163
)
 
$
193,776

 
$
(1,395
)
 
$
220,542

 
$
(1,558
)
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
 
 
 
 
Agency-backed
$

 
$

 
$
132,585

 
$
(1,214
)
 
$
132,585

 
$
(1,214
)
CMO/Other MBS
5,960

 
(156
)
 
40,033

 
(463
)
 
45,993

 
(619
)
Total residential MBS
5,960

 
(156
)
 
172,618

 
(1,677
)
 
178,578

 
(1,833
)
Other securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
14,642

 
(358
)
 
9,723

 
(277
)
 
24,365

 
(635
)
Corporate

 

 
20,039

 
(200
)
 
20,039

 
(200
)
State and municipal
2,562

 
(48
)
 
12,989

 
(86
)
 
15,551

 
(134
)
Total other securities
17,204

 
(406
)
 
42,751

 
(563
)
 
59,955

 
(969
)
Total
$
23,164

 
$
(562
)
 
$
215,369

 
$
(2,240
)
 
$
238,533

 
$
(2,802
)



Securities pledged for borrowings at FHLB and other institutions, and securities pledged for municipal deposits and other purposes
Securities pledged for borrowings at FHLB and other institutions, and securities pledged for municipal deposits and other purposes were as follows for the periods presented below:
 
March 31,
 
December 31,

 
2016
 
2015
Available for sale securities pledged for borrowings, at fair value
$
95,317

 
$
101,994

Available for sale securities pledged for municipal deposits, at fair value
975,592

 
849,186

Available for sale securities pledged for customer back-to-back swaps, at fair value
4,323

 
1,839

Held to maturity securities pledged for borrowings, at amortized cost
2,500

 
206,337

Held to maturity securities pledged for municipal deposits, at amortized cost
369,334

 
327,589

Total securities pledged
$
1,447,066

 
$
1,486,945


v3.4.0.3
Portfolio Loans (Tables)
3 Months Ended
Mar. 31, 2016
Receivables [Abstract]  
Components of loan portfolio excluding loans held for sale
The composition of the Company’s loan portfolio, excluding loans held for sale, was the following for the periods presented below:
 
March 31,
 
December 31,
 
2016
 
2015
Commercial:
 
 
 
Commercial and industrial:
 
 
 
       Traditional commercial & industrial (“C&I”)
$
2,003,839

 
$
1,681,704

Payroll finance
199,119

 
221,831

Warehouse lending
341,790

 
387,808

Factored receivables
215,015

 
208,382

Equipment financing
656,775

 
631,303

Total C&I
3,416,538

 
3,131,028

Commercial mortgage:
 
 
 
       Commercial real estate
2,790,145

 
2,733,351

Multi-family
886,069

 
796,030

       Acquisition, development & construction (“ADC”)
179,517

 
186,398

Total commercial mortgage
3,855,731

 
3,715,779

Total commercial
7,272,269

 
6,846,807

Residential mortgage
718,733

 
713,036

Consumer
295,161

 
299,517

Total portfolio loans
8,286,163

 
7,859,360

Allowance for loan losses
(53,014
)
 
(50,145
)
Total portfolio loans, net
$
8,233,149

 
$
7,809,215

Schedule of amounts and status of loans and TDRs
The following tables set forth the amounts and status of the Company’s loans, troubled debt restructurings (“TDRs”) and non-performing loans at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
Current
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
1,969,677

 
$
1,294

 
$
2,630

 
$
478

 
$
29,760

 
$
2,003,839

Payroll finance
198,805

 
39

 
59

 
159

 
57

 
199,119

Warehouse lending
341,790

 

 

 

 

 
341,790

Factored receivables
214,803

 

 

 

 
212

 
215,015

Equipment financing
651,995

 
1,276

 
926

 

 
2,578

 
656,775

Commercial real estate
2,767,800

 
1,130

 
3,074

 
332

 
17,809

 
2,790,145

Multi-family
882,028

 

 

 

 
4,041

 
886,069

ADC
175,501

 

 

 

 
4,016

 
179,517

Residential mortgage
694,104

 
6,092

 
684

 

 
17,853

 
718,733

Consumer
285,054

 
1,276

 
688

 
33

 
8,110

 
295,161

Total portfolio loans
$
8,181,557

 
$
11,107

 
$
8,061

 
$
1,002

 
$
84,436

 
$
8,286,163

Total TDRs included above
$
14,918

 
$
1,116

 
$

 
$

 
$
5,810

 
$
21,844

Non-performing loans:
 
 
 
 
 
 
 
 
 
 
 
Loans 90+ days past due and still accruing
 
 
 
 
 
 
 
 
 
 
$
1,002

Non-accrual loans
 
 
 
 
 
 
 
 
 
 
84,436

Total non-performing loans
 
 
 
 
 
 
 
 


 
$
85,438


 
December 31, 2015
 
Current
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
1,630,635

 
$
9,380

 
$
31,060

 
$
487

 
$
10,142

 
$
1,681,704

Payroll finance
221,394

 

 
349

 
88

 

 
221,831

Warehouse lending
387,808

 

 

 

 

 
387,808

Factored receivables
208,162

 

 

 

 
220

 
208,382

Equipment financing
627,056

 
1,088

 
1,515

 

 
1,644

 
631,303

Commercial real estate
2,702,671

 
7,417

 
2,521

 

 
20,742

 
2,733,351

Multi-family
791,828

 
2,485

 

 

 
1,717

 
796,030

ADC
182,615

 

 

 
83

 
3,700

 
186,398

Residential mortgage
686,445

 
6,014

 
897

 

 
19,680

 
713,036

Consumer
286,339

 
4,950

 
320

 
16

 
7,892

 
299,517

Total portfolio loans
$
7,724,953

 
$
31,334

 
$
36,662

 
$
674

 
$
65,737

 
$
7,859,360

Total TDRs included above
$
13,047

 
$
654

 
$

 
$

 
$
8,591

 
$
22,292

Non-performing loans:
 
 
 
 
 
 
 
 
 
 
 
Loans 90+ days past due and still accruing
 
 
 
 
 
 
 
 
 
 
$
674

Non-accrual loans
 
 
 
 
 
 
 
 
 
 
65,737

Total non-performing loans
 
 
 
 
 
 
 
 
 
 
$
66,411

Schedule of additional analysis of non-accrual loans
The following table provides additional analysis of the Company’s non-accrual loans at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
December 31, 2015
 
Recorded investment Non-accrual loans
 
Recorded investment PCI non-accrual loans
 
Recorded investment total non-accrual loans
 
Unpaid principal balance non-accrual loans
 
Recorded investment Non-accrual loans
 
Recorded investment PCI non-accrual loans
 
Recorded investment total non-accrual loans
 
Unpaid principal balance non-accrual loans
C&I
$
24,629

 
$
5,131

 
$
29,760

 
$
30,107

 
$
4,314

 
$
5,828

 
$
10,142

 
$
10,503

Payroll finance
57

 

 
57

 
57

 

 

 

 

Factored receivables
212

 

 
212

 
212

 
220

 

 
220

 
220

Equipment financing
2,578

 

 
2,578

 
2,578

 
1,644

 

 
1,644

 
1,644

Commercial real estate
11,899

 
5,910

 
17,809

 
21,731

 
13,119

 
7,623

 
20,742

 
23,678

Multi-family
4,041

 

 
4,041

 
4,041

 
1,717

 

 
1,717

 
1,837

ADC
4,016

 

 
4,016

 
4,146

 
3,700

 

 
3,700

 
3,829

Residential mortgage
12,267

 
5,586

 
17,853

 
24,544

 
13,683

 
5,997

 
19,680

 
24,386

Consumer
7,285

 
825

 
8,110

 
9,516

 
7,315

 
577

 
7,892

 
9,404

 
$
66,984

 
$
17,452

 
$
84,436

 
$
96,932

 
$
45,712

 
$
20,025

 
$
65,737

 
$
75,501

Impaired financing receivables

The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at March 31, 2016:
 
Loans evaluated by segment
 
Allowance evaluated by segment
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Purchased credit impaired loans
 
Total
 loans
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Total allowance for loan losses
C&I
$
27,870

 
$
1,924,254

 
$
51,715

 
$
2,003,839

 
$

 
$
14,268

 
$
14,268

Payroll finance

 
199,119

 

 
199,119

 

 
1,546

 
1,546

Warehouse lending

 
341,790

 

 
341,790

 

 
520

 
520

Factored receivables

 
215,015

 

 
215,015

 

 
1,407

 
1,407

Equipment financing
2,192

 
654,583

 

 
656,775

 

 
5,393

 
5,393

Commercial real estate
13,815

 
2,728,143

 
48,187

 
2,790,145

 

 
15,770

 
15,770

Multi-family
883

 
880,716

 
4,470

 
886,069

 

 
2,996

 
2,996

ADC
8,595

 
166,204

 
4,718

 
179,517

 

 
2,157

 
2,157

Residential mortgage
515

 
711,229

 
6,989

 
718,733

 

 
4,850

 
4,850

Consumer
1,497

 
292,128

 
1,536

 
295,161

 

 
4,107

 
4,107

Total portfolio loans
$
55,367

 
$
8,113,181

 
$
117,615

 
$
8,286,163

 
$

 
$
53,014

 
$
53,014


The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at December 31, 2015:
 
Loans evaluated by segment
 
Allowance evaluated by segment
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Purchased credit impaired loans
 
Total
 loans
 
Individually
evaluated for
impairment
 
Collectively
evaluated for
impairment
 
Total allowance for loan losses
C&I
$
3,138

 
$
1,661,163

 
$
17,403

 
$
1,681,704

 
$

 
$
13,262

 
$
13,262

Payroll finance

 
221,831

 

 
221,831

 

 
1,936

 
1,936

Warehouse lending

 
387,808

 

 
387,808

 

 
589

 
589

Factored receivables

 
208,382

 

 
208,382

 

 
1,457

 
1,457

Equipment financing
1,017

 
630,286

 

 
631,303

 

 
4,925

 
4,925

Commercial real estate
13,492

 
2,669,673

 
50,186

 
2,733,351

 

 
13,861

 
13,861

Multi-family
1,541

 
790,017

 
4,472

 
796,030

 

 
2,741

 
2,741

ADC
8,669

 
173,065

 
4,664

 
186,398

 

 
2,009

 
2,009

Residential mortgage
515

 
705,245

 
7,276

 
713,036

 

 
5,007

 
5,007

Consumer

 
298,225

 
1,292

 
299,517

 

 
4,358

 
4,358

Total loans
$
28,372

 
$
7,745,695

 
$
85,293

 
$
7,859,360

 
$

 
$
50,145

 
$
50,145


The following table presents loans individually evaluated for impairment, excluding purchased credit impaired loans, by segment of loans at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
December 31, 2015
 
Unpaid principal balance
 
Recorded investment
 
Unpaid principal balance
 
Recorded investment
Loans with no related allowance recorded:
 
 
 
 
 
 
C&I
$
28,050

 
$
27,870

 
$
3,145

 
$
3,138

Equipment financing
2,192

 
2,192

 
1,017

 
1,017

Commercial real estate
15,211

 
13,815

 
15,092

 
13,492

Multi-family
883

 
883

 
1,541

 
1,541

ADC
8,595

 
8,595

 
8,669

 
8,669

Residential mortgage
515

 
515

 
515

 
515

Consumer
1,497

 
1,497

 

 

Total
$
56,943

 
$
55,367

 
$
29,979

 
$
28,372


At March 31, 2016 and December 31, 2015 there were no payroll finance, warehouse lending or factored receivables loans that were individually evaluated for impairment.
 
The following tables present the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the three months ended March 31, 2016 and March 31, 2015:
 
March 31, 2016
 
March 31, 2015
 
QTD average
recorded
investment
 
Interest
income
recognized
 
Cash-basis
interest
income
recognized
 
QTD average
recorded
investment
 
Interest
income
recognized
 
Cash-basis
interest
income
recognized
Loans with no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
C&I
$
15,366

 
$
9

 
$

 
$
3,316

 
$

 
$

Equipment financing
1,288

 

 

 

 

 

Commercial real estate
13,118

 
39

 

 
13,275

 
67

 

Multi-family
884

 

 

 

 

 

ADC
8,632

 
56

 

 
11,597

 
57

 

Residential mortgage
515

 

 

 
515

 

 

Consumer
748

 

 

 

 

 

Total
$
39,803

 
$
104

 
$

 
$
28,703

 
$
124

 
$

Schedule of changes in the balance of accretable yield discount for PCI loans
The following table presents the changes in the balance of the accretable yield discount for PCI loans for the three months ended March 31, 2016 and 2015:
 
For the three months ended March 31,
 
2016
 
2015
Balance at beginning of period
$
11,211

 
$
724

Balances acquired in the NSBC Acquisition
2,200

 

Accretion of income
(1,155
)
 

Reclassification from non-accretable difference
266

 

Balance at end of period
$
12,522

 
$
724

Troubled debt restructurings
The following table presents loans by segment modified as TDRs that occurred during the first three months of 2016 and 2015:
 
March 31, 2016
 
March 31, 2015
 
 
 
Recorded investment
 
 
 
Recorded investment
 
Number
Pre-
modification
 
Post-
modification
 
Number
Pre-
modification
 
Post-
modification
Residential mortgage
1

 
$
469

 
$
469

 
 

 

Total TDRs
1

 
$
469

 
$
469

 
 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
The following tables set forth the amounts and past due status of the Company’s TDRs at March 31, 2016 and December 31, 2015:
 
March 31, 2016
 
Current loans
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
580

 
$

 
$

 
$

 
$
1,116

 
$
1,696

Equipment financing
64

 

 

 

 

 
64

Commercial real estate
2,496

 
257

 

 

 

 
2,753

ADC
6,274

 

 

 

 
2,458

 
8,732

Residential mortgage
5,504

 
859

 

 

 
2,236

 
8,599

Total
$
14,918

 
$
1,116

 
$

 
$

 
$
5,810

 
$
21,844


 
December 31, 2015
 
Current loans
 
30-59
days
past due
 
60-89
days
past due
 
90+
days
past due
 
Non-
accrual
 
Total
C&I
$
154

 
$

 
$

 
$

 
$
2,052

 
$
2,206

Equipment financing
338

 

 

 

 

 
338

Commercial real estate
2,787

 

 

 

 

 
2,787

ADC
5,107

 

 

 

 
3,700

 
8,807

Residential mortgage
4,661

 
654

 

 

 
2,839

 
8,154

Total
$
13,047

 
$
654

 
$

 
$

 
$
8,591

 
$
22,292


v3.4.0.3
Allowance for Loan Losses (Tables)
3 Months Ended
Mar. 31, 2016
Receivables [Abstract]  
Allowance for loan losses activity
Activity in the allowance for loan losses for the three months ended March 31, 2016 and 2015 is summarized below:
 
The three months ended March 31, 2016
 
Beginning
balance
 
Charge-offs
 
Recoveries
 
Net
charge-offs
 
Provision / (reversal of)
 
Ending balance
C&I
$
13,262

 
$
(489
)
 
$
329

 
$
(160
)
 
$
1,167

 
$
14,269

Payroll finance
1,936

 

 
4

 
4

 
(394
)
 
1,546

Warehouse lending
589

 

 

 

 
(69
)
 
520

Factored receivables
1,457

 
(81
)
 
24

 
(57
)
 
7

 
1,407

Equipment financing
4,925

 
(457
)
 
108

 
(349
)
 
817

 
5,393

Commercial real estate
13,861

 
(4
)
 
21

 
17

 
1,892

 
15,770

Multi-family
2,741

 

 
2

 
2

 
253

 
2,996

ADC
2,009

 

 

 

 
148

 
2,157

Residential mortgage
5,007

 
(224
)
 
28

 
(196
)
 
39

 
4,850

Consumer
4,358

 
(511
)
 
119

 
(392
)
 
140

 
4,106

Total allowance for loan losses
$
50,145

 
$
(1,766
)
 
$
635

 
$
(1,131
)
 
$
4,000

 
$
53,014

Annualized net charge-offs to average loans outstanding
 
 
 
 
 
 
 
0.06
%
 
 
The three months ended March 31, 2015
 
Beginning
balance
 
Charge-offs
 
Recoveries
 
Net
charge-offs
 
Provision / (reversal of)
 
Ending balance
C&I
$
11,027

 
$
(842
)
 
$
101

 
$
(741
)
 
$
400

 
$
10,686

Payroll finance
1,506

 
(303
)
 
11

 
(292
)
 
686

 
1,900

Warehouse lending
608

 

 

 

 
251

 
859

Factored receivables
1,205

 
(72
)
 
19

 
(53
)
 
20

 
1,172

Equipment financing
2,569

 
(153
)
 
172

 
19

 
103

 
2,691

Commercial real estate
10,121

 
(62
)
 
16

 
(46
)
 
1,018

 
11,093

Multi-family
2,111

 
(17
)
 

 
(17
)
 
196

 
2,290

ADC
2,987

 

 
9

 
9

 
(280
)
 
2,716

Residential mortgage
5,843

 
(181
)
 
2

 
(179
)
 
(537
)
 
5,127

Consumer
4,397

 
(342
)
 
52

 
(290
)
 
243

 
4,350

Total allowance for loan losses
$
42,374

 
$
(1,972
)
 
$
382

 
$
(1,590
)
 
$
2,100

 
$
42,884

Annualized net charge-offs to average loans outstanding
 
 
 
 
 
 
 
0.13
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following analysis presents the allowance for loan losses to originated loans and remaining purchase accounting marks to acquired loan portfolios and a holistic view of valuation balances recorded against portfolio loans at March 31, 2016 and December 31, 2015.
 
March 31, 2016
Originated:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
1,370,429

 
$
12,396

 
$
30,141

 
$
527

 
$

 
$
1,413,493

Payroll finance
198,903

 
159

 
57

 

 

 
199,119

Factored receivables
213,471

 

 
1,544

 

 

 
215,015

Equipment financing
555,626

 
1,794

 
2,960

 

 

 
560,380

Warehouse lending
341,790

 

 

 

 

 
341,790

Commercial real estate
2,160,764

 
8,009

 
23,917

 

 

 
2,192,690

Multi-family
672,382

 
1,763

 
1,697

 

 

 
675,842

ADC
140,110

 
1,668

 
7,326

 

 

 
149,104

Residential mortgage
433,516

 
684

 
12,796

 

 

 
446,996

Consumer
193,933

 
610

 
8,289

 
29

 

 
202,861

Total originated loans
$
6,280,924

 
$
27,083

 
$
88,727

 
$
556

 
$

 
$
6,397,290

Allowance for loan losses
$
47,994

 
$
829

 
$
3,774

 
$
417

 
$

 
$
53,014

As a % of originated loans
0.76
%
 
3.06
%
 
4.25
%
 
75.00
%
 
%
 
0.83
%

 
March 31, 2016
Acquired loans:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
541,296

 
$
40,131

 
$
8,919

 
$

 
$

 
$
590,346

Equipment financing
96,395

 

 

 

 

 
96,395

Commercial real estate
550,133

 
22,950

 
24,372

 

 

 
597,455

Multi-family
201,332

 
5,895

 
3,000

 

 

 
210,227

ADC
24,116

 
5,500

 
797

 

 

 
30,413

Residential mortgage
265,632

 

 
6,105

 

 

 
271,737

Consumer
92,300

 

 

 

 

 
92,300

Total loans subject to purchase accounting marks
$
1,771,204

 
$
74,476

 
$
43,193

 
$

 
$

 
$
1,888,873

Remaining purchase accounting mark
$
40,085

 
$
2,380

 
$
1,937

 
$

 
$

 
$
44,402

As a % of acquired loans
2.26
%
 
3.20
%
 
4.48
%
 
%
 
%
 
2.35
%
 
 
 
 
 
 
 
 
 
 
 
 
Total portfolio loans
$
8,052,128

 
$
101,559

 
$
131,920

 
$
556

 
$

 
$
8,286,163

Total allowance for loan losses and remaining purchase accounting mark
$
88,079

 
$
3,209

 
$
5,711

 
$
417

 
$

 
$
97,416


 
December 31, 2015
Originated:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
1,356,685

 
$
11,041

 
$
29,621

 
$
445

 
$

 
$
1,397,792

Payroll finance
221,735

 

 
96

 

 

 
221,831

Factored receivables
206,814

 

 
1,568

 

 

 
208,382

Equipment financing
512,314

 
460

 
1,644

 

 

 
514,418

Warehouse lending
387,808

 

 

 

 

 
387,808

Commercial real estate
2,002,638

 
9,361

 
24,104

 

 

 
2,036,103

Multi-family
550,438

 

 
1,717

 

 

 
552,155

ADC
118,552

 
1,575

 
7,236

 

 

 
127,363

Residential mortgage
419,534

 
897

 
13,497

 

 

 
433,928

Consumer
195,684

 
407

 
7,167

 
268

 

 
203,526

Total originated loans
$
5,972,202

 
$
23,741

 
$
86,650

 
$
713

 
$

 
$
6,083,306

Allowance for loan losses
$
43,925

 
$
884

 
$
4,801

 
$
535

 
$

 
$
50,145

As a % of originated loans
0.74
%
 
3.72
%
 
5.54
%
 
75.04
%
 
%
 
0.82
%

 
December 31, 2015
Acquired loans:
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Loss
 
Total
C&I
$
267,541

 
$
9,724

 
$
6,647

 
$

 
$

 
$
283,912

Equipment financing
116,885

 

 

 

 

 
116,885

Commercial real estate
645,951

 
23,111

 
28,186

 

 

 
697,248

Multi-family
237,948

 
5,927

 

 

 

 
243,875

ADC
52,775

 
5,500

 
760

 

 

 
59,035

Residential mortgage
272,336

 

 
6,772

 

 

 
279,108

Consumer
95,341

 

 
650

 

 

 
95,991

Total loans subject to purchase accounting marks
$
1,688,777

 
$
44,262

 
$
43,015

 
$

 
$

 
$
1,776,054

Remaining purchase accounting mark
$
37,351

 
$
1,649

 
$
2,383

 
$

 
$

 
$
41,383

As a % of acquired loans
2.21
%
 
3.73
%
 
5.54
%
 
%
 
%
 
2.33
%
 
 
 
 
 
 
 
 
 
 
 
 
Total portfolio loans
$
7,661,198

 
$
68,003

 
$
129,665

 
$
713

 
$

 
$
7,859,579

Total allowance for loan losses and remaining purchase accounting mark
$
81,276

 
$
2,533

 
$
7,184

 
$
535

 
$

 
$
91,528


Financing receivable credit quality indicators
Loans that are risk-rated 1 through 6 as defined above are considered to be pass-rated loans. As of March 31, 2016 and December 31, 2015, the risk category of gross loans by segment was as follows:
 
March 31, 2016
 
December 31, 2015
 
Special
mention
 
Substandard
 
Doubtful
 
Special
mention
 
Substandard
 
Doubtful
C&I
$
52,527

 
$
39,060

 
$
527

 
$
20,765

 
$
36,268

 
$
445

Payroll finance
159

 
57

 

 

 
96

 

Factored receivables

 
1,544

 

 

 
1,568

 

Equipment financing
1,794

 
2,960

 

 
460

 
1,644

 

Commercial real estate
30,959

 
48,288

 

 
32,472

 
52,290

 

Multi-family
7,658

 
4,697

 

 
5,927

 
1,717

 

ADC
7,168

 
8,123

 

 
7,075

 
7,996

 

Residential mortgage
684

 
18,901

 

 
897

 
20,269

 

Consumer
610

 
8,289

 
29

 
407

 
7,817

 
268

Total
$
101,559

 
$
131,919

 
$
556

 
$
68,003

 
$
129,665

 
$
713


v3.4.0.3
Goodwill and Other Intangible Assets (Tables)
3 Months Ended
Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of goodwill and intangible assets
The balance of goodwill and other intangible assets for the periods presented were as follows:
 
March 31,
 
December 31,
 
2016
 
2015
Goodwill
$
696,600

 
$
670,699

Other intangible assets:
 
 
 
Core deposits
$
43,709

 
$
45,794

Customer lists
9,156

 
7,959

Non-compete agreements
2,260

 
2,925

Trade name
20,500

 
20,500

Fair value of below market leases
165

 
189

Total other intangible assets
$
75,790

 
$
77,367

Future amortization expense
The estimated aggregate future amortization expense for intangible assets remaining as of March 31, 2016 was as follows:
 
Amortization expense
Remainder of 2016
$
9,438

2017
8,838

2018
7,285

2019
6,074

2020
5,428

2021
5,022

Thereafter
13,205

Total
$
55,290


v3.4.0.3
Deposits (Tables)
3 Months Ended
Mar. 31, 2016
Deposits [Abstract]  
Summary of major classification of deposits
Deposit balances at March 31, 2016 and December 31, 2015 were summarized as follows: 
 
March 31,
 
December 31,
 
2016
 
2015
Non-interest bearing demand
$
3,027,471

 
$
2,936,981

Interest bearing demand
1,818,131

 
1,274,417

Savings
771,961

 
943,632

Money market
3,046,634

 
2,819,788

Certificates of deposit
664,425

 
605,189

Total deposits
$
9,328,622

 
$
8,580,007

List of Company's Brokered deposits
Listed below are the Company’s brokered deposits:
 
March 31,
 
December 31,

 
2016
 
2015
Money market
$
219,305

 
$
258,007

Reciprocal CDARs 1
96,962

 
64,131

CDARs one way
89,702

 
106,627

Total brokered deposits
$
405,969

 
$
428,765

1 Certificate of deposit account registry service

v3.4.0.3
Borrowings (Tables)
3 Months Ended
Mar. 31, 2016
Debt Instruments [Abstract]  
Schedule of debt
The Company’s borrowings and weighted average interest rates are summarized as follows for the periods presented: 
 
March 31,
 
December 31,
 
2016
 
2015
 
Amount
 
Rate
 
Amount
 
Rate
By type of borrowing:
 
 
 
 
 
 
 
FHLB borrowings
$
1,444,817

 
0.87
%
 
$
1,409,885

 
1.32
%
Other borrowings (repurchase agreements)
23,571

 
0.57

 
16,566

 
0.55

Senior notes
98,996

 
5.98

 
98,893

 
5.98

Subordinated notes
108,124

 
5.47

 

 

Total borrowings
$
1,675,508

 
1.46
%
 
$
1,525,344

 
1.61
%
By remaining period to maturity:
 
 
 
 
 
 
 
Less than one year
$
1,061,219

 
0.67
%
 
$
999,222

 
0.69
%
One to two years
145,000

 
1.13

 
295,000

 
3.19

Two to three years
258,996

 
3.17

 
228,893

 
3.57

Three to four years
50,000

 
1.38

 

 

Four to five years
50,000

 
1.68

 

 

Greater than five years
110,293

 
5.46

 
2,229

 
4.92

Total borrowings
$
1,675,508

 
1.46
%
 
$
1,525,344

 
1.61
%

v3.4.0.3
Derivatives (Tables)
3 Months Ended
Mar. 31, 2016
Derivative Instruments and Hedges, Assets [Abstract]  
Summary of derivatives
Summary information as of March 31, 2016 and December 31, 2015 regarding these derivatives is presented below:
 
Notional
amount
 
Average
maturity (in years)
 
Weighted
average
fixed rate 
 
Weighted
average
variable rate
 
Fair value
March 31, 2016
 
 
 
 
 
 
 
 
 
3rd party interest rate swap
$
116,032

 
5.64
 
3.96
%
 
1 m Libor + 2.19
 
$
4,323

Customer interest rate swap
(116,032
)
 
5.64
 
3.96

 
1 m Libor + 2.19
 
(4,323
)
December 31, 2015
 
 
 
 
 
 
 
 
 
3rd party interest rate swap
87,094

 
5.44
 
4.09

 
1 m Libor + 2.15
 
1,839

Customer interest rate swap
(87,094
)
 
5.44
 
4.09

 
1 m Libor + 2.15
 
(1,839
)

v3.4.0.3
Income Taxes (Tables)
3 Months Ended
Mar. 31, 2016
Income Tax Disclosure [Abstract]  
Schedule of Effective Income Tax Rate Reconciliation
Actual income tax expense differs from the tax computed based on pre-tax income and the applicable statutory federal tax rate for the
following reasons:
 
For the three months ended
 
March 31,
 
2016
 
2015
Income before income tax expense
$
36,009

 
$
24,856

Tax at Federal statutory rate of 35%
12,603

 
8,700

State and local income taxes, net of Federal tax benefit
1,993

 
875

Tax-exempt interest, net of disallowed interest
(1,834
)
 
(984
)
Bank owned life insurance income
(445
)
 
(251
)
Non-deductible acquisition related costs

 
140

Low income housing tax credits
(54
)
 
(54
)
Other, net
(20
)
 
(348
)
Actual income tax expense
$
12,243

 
$
8,078

Effective income tax rate
34.0
%
 
32.5
%

v3.4.0.3
Stock-Based Compensation (Tables)
3 Months Ended
Mar. 31, 2016
Compensation and Retirement Disclosure [Abstract]  
Summary of Company's stock option activity
The following table summarizes the activity in the Company’s active stock-based compensation plans for the three months ended March 31, 2016:
 
 
 
Non-vested stock awards/stock units outstanding
 
Stock options outstanding
 
Shares available for grant
 
Number of shares
 
Weighted average grant date fair value
 
Number of shares
 
Weighted average exercise price
Balance at January 1, 2016
4,125,665

 
726,800

 
$
13.36

 
1,586,572

 
$
10.95

Granted
(483,574
)
 
483,574

 
14.21

 

 

Stock awards vested

 
(32,623
)
 

 

 

Exercised

 

 

 
(79,031
)
 
9.33

Forfeited
48,646

 
(4,650
)
 
13.00

 
(32,312
)
 
13.08

Canceled/expired
(48,646
)
 

 

 

 

Balance at March 31, 2016
3,642,091

 
1,173,101

 
$
14.08

 
1,475,229

 
$
10.99

Exercisable at March 31, 2016
 
 
 
 
 
 
1,099,791

 
$
10.35

Schedule of valuation assumptions
The fair value of options during the first quarter of 2015 granted was determined using the following weighted average assumptions as of the grant date:
 
For the three months
 
ended March 31,
 
2015
Risk-free interest rate
1.9
%
Expected stock price volatility
20.9

Dividend yield (1)
3.1

Expected term in years
5.76

(1) Represents the approximate annualized cash dividend rate paid with respect to a share of common stock at or near the grant date.

Schedule of stock-based compensation expense associated with stock options and non-vested stock awards
Stock-based compensation expense associated with stock options and non-vested stock awards and the related income tax benefit is presented below:
 
For the three months
 
ended March 31,
 
2016
 
2015
Stock options
$
126

 
$
281

Non-vested stock awards/performance units
1,414

 
828

Total
$
1,540

 
$
1,109

Income tax benefit
524

 
377

Proceeds from stock option exercises
546

 
2,758

Unrecognized stock-based compensation expense
Unrecognized stock-based compensation expense as of March 31, 2016 was as follows:
 
March 31, 2016
Stock options
$
503

Non-vested stock awards/performance units
12,848

Total
$
13,351


v3.4.0.3
Pension and Other Post Retirement Plans (Tables)
3 Months Ended
Mar. 31, 2016
Compensation and Retirement Disclosure [Abstract]  
Schedule of net pension (benefit) expense and post-retirement expense
Net pension expense (benefit) and post-retirement expense (benefit) is comprised of the following for the periods presented below:
 
Pension plan
 
Other post retirement plans
 
For the three months ended
 
For the three months ended
 
March 31,
 
March 31,
 
2016
 
2015
 
2016
 
2015
Service cost
$

 
$

 
$

 
$
2

Interest cost

 
589

 
104

 
94

Expected return on plan assets

 
(729
)
 

 

Net amortization and deferral

 
91

 
12

 
40

Total pension expense (benefit) and other post-retirement expense
$

 
$
(49
)
 
$
116

 
$
136


 
 
 
 

v3.4.0.3
Other Non-interest Expense (Tables)
3 Months Ended
Mar. 31, 2016
Other Income and Expenses [Abstract]  
Schedule of Other Non-interest Expense
Other non-interest expense items for the three months ended March 31, 2016 and 2015, respectively, are presented in the following table. Components exceeding 1% of the aggregate of total net interest income and total non-interest income are presented separately.
 
For the three months ended
 
March 31,
 
2016
 
2015
Other non-interest expense:
 
 
 
   Professional fees
$
2,471

 
$
1,915

   Data and check processing
1,754

 
2,148

Insurance & surety bond premium
785

 
648

Charge for asset write-downs
2,485

 

   Other
5,720

 
5,111

Total other non-interest expense
$
13,215

 
$
9,822


v3.4.0.3
Earnings Per Common Share (Tables)
3 Months Ended
Mar. 31, 2016
Earnings Per Share [Abstract]  
Computation of basic and diluted earnings per share
The following is a summary of the calculation of earnings per share (“EPS”):
 
For the three months ended
 
March 31,
 
2016
 
2015
 Net income
$
23,766

 
$
16,778

Weighted average common shares outstanding for computation of basic EPS
129,974,025

 
87,839,029

Common-equivalent shares due to the dilutive effect of stock options and unvested performance share grants(1)
526,950

 
413,739

Weighted average common shares for computation of diluted EPS
130,500,975

 
88,252,768

Earnings per common share:
 
 
 
Basic
$
0.18

 
$
0.19

Diluted
0.18

 
0.19

Weighted average common shares that could be exercised that were anti-dilutive for the period(2)

 
112,891


(1) Represents incremental shares computed using the treasury stock method.
(2) Anti-dilutive shares are not included in determining diluted earnings per share; there were no anti-dilutive shares in the three months ended March 31, 2016.

v3.4.0.3
Stockholders' Equity (Tables)
3 Months Ended
Mar. 31, 2016
Stockholders' Equity Note [Abstract]  
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations
The following tables presents actual and required capital ratios as of March 31, 2016 and December 31, 2015 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of March 31, 2016 and December 31, 2015 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
 
Actual
 
Minimum capital required - Basel III phase-in schedule
 
Minimum capital required - Basel III fully phased-in
 
Required to be considered well capitalized
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
$
1,032,118

 
10.89
%
 
$
486,060

 
5.125
%
 
$
663,240

 
7.00
%
 
$
615,865

 
6.50
%
Sterling Bancorp
970,224

 
10.24

 
486,244

 
5.125

 
663,492

 
7.00

 
N/A

 
N/A

Tier 1 capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,032,118

 
10.89
%
 
628,183

 
6.625
%
 
805,362

 
8.50
%
 
757,988

 
8.00
%
Sterling Bancorp
970,224

 
10.24

 
628,421

 
6.625

 
805,668

 
8.50

 
N/A

 
N/A

Total capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,193,805

 
12.60
%
 
817,680

 
8.625
%
 
994,859

 
10.50
%
 
947,485

 
10.00
%
Sterling Bancorp
1,119,448

 
11.81

 
817,990

 
8.625

 
995,237

 
10.50

 
N/A

 
N/A

Tier 1 leverage ratio:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,032,118

 
9.16

 
450,703

 
4.000

 
450,703

 
4.00

 
563,379

 
5.00
%
Sterling Bancorp
970,224

 
8.60

 
451,378

 
4.000

 
451,378

 
4.00

 
N/A

 
N/A

 
Actual
 
Minimum capital required - Basel III phase-in schedule
 
Minimum capital required - Basel III fully phased-in
 
Required to be considered well capitalized
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
 
Capital amount
 
Ratio
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
$
1,053,527

 
11.45
%
 
$
413,951

 
4.50
%
 
$
643,923

 
7.00
%
 
$
597,929

 
6.50
%
Sterling Bancorp
988,174

 
10.74

 
414,047

 
4.50

 
644,073

 
7.00

 
N/A

 
N/A

Tier 1 capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,053,527

 
11.45
%
 
551,934

 
6.00
%
 
781,907

 
8.50
%
 
735,912

 
8.00
%
Sterling Bancorp
988,174

 
10.74

 
552,063

 
6.00

 
782,089

 
8.50

 
N/A

 
N/A

Total capital to RWA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,104,221

 
12.00
%
 
735,912

 
8.00
%
 
965,885

 
10.50
%
 
919,891

 
10.00
%
Sterling Bancorp
1,038,868

 
11.29

 
736,084

 
8.00

 
966,110

 
10.50

 
N/A

 
N/A

Tier 1 leverage ratio:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sterling National Bank
1,053,527

 
9.65
%
 
436,678

 
4.00
%
 
436,678

 
4.00
%
 
545,848

 
5.00
%
Sterling Bancorp
988,174

 
9.03

 
437,629

 
4.00

 
437,629

 
4.00

 
N/A

 
N/A




v3.4.0.3
Commitment and Contingencies (Tables)
3 Months Ended
Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
Schedule of off-balance-sheet financial instruments
The contractual or notional amounts of these instruments, which reflect the extent of the Company’s involvement in particular classes of off-balance sheet financial instruments, are summarized as follows: 
 
March 31,
 
December 31,

 
2016
 
2015
Loan origination commitments
$
234,023

 
$
269,636

Unused lines of credit
749,028

 
660,915

Letters of credit
114,969

 
102,930

Schedule of future minimum lease payments due
Future minimum lease payments due under non-cancelable operating leases at March 31, 2016 were as follows:
Remainder of 2016
$
8,618

2017
10,724

2018
9,546

2019
7,310

2020
5,955

2021
5,521

2022 and thereafter
22,270

 
$
69,944


v3.4.0.3
Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2016
Fair Value Disclosures [Abstract]  
Estimated fair value on a recurring basis
A summary of assets and liabilities at March 31, 2016 measured at estimated fair value on a recurring basis is as follows:
 
March 31, 2016
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
Assets:
 
 
 
 
 
 
 
Investment securities available for sale:
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
Agency-backed
$
1,416,951

 
$

 
$
1,416,951

 
$

CMO(1)/Other MBS
74,672

 

 
74,672

 

Total residential MBS
1,491,623

 

 
1,491,623

 

Other securities:
 
 
 
 
 
 
 
Federal agencies
83,710

 

 
83,710

 

Corporate
87,179

 

 
87,179

 

State and municipal
223,517

 

 
223,517

 

Other
8,791

 

 
8,791

 

Total other securities
403,197

 

 
403,197

 

Total available for sale securities
1,894,820

 

 
1,894,820

 

Swaps
4,323

 

 
4,323

 

Total assets
$
1,899,143

 
$

 
$
1,899,143

 
$

Liabilities:
 
 
 
 
 
 
 
Swaps
$
4,323

 
$

 
$
4,323

 
$

Total liabilities
$
4,323

 
$

 
$
4,323

 
$


(1)  Collateralized Mortgage Obligations (“CMOs”) are debt securities that are collateralized by a specific pool of residential mortgage loans, in which the issuer of the CMOs can direct the payments of principal and interest received on the underlying collateral to achieve specific investor cash flow objectives.  The Bank generally acquires planned-amortization class securities and CMOs with a sequential pay structure in order to manage the duration and extension risk inherent in these securities.
A summary of assets and liabilities at December 31, 2015 measured at estimated fair value on a recurring basis is as follows:
 
 
December 31, 2015
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
Assets:
 
 
 
 
 
 
 
Investment securities available for sale:
 
 
 
 
 
 
 
Residential MBS:
 
 
 
 
 
 
 
Agency-backed
$
1,217,862

 
$

 
$
1,217,862

 
$

CMO/Other MBS
78,373

 

 
78,373

 

Total residential MBS
1,296,235

 

 
1,296,235

 

Federal agencies
84,267

 

 
84,267

 

Corporate bonds
314,188

 

 
314,188

 

State and municipal
189,035

 

 
189,035

 

Trust preferred
28,517

 

 
28,517

 

       Other
8,790

 

 
8,790

 

Total investment securities available for sale
624,797

 

 
624,797

 

Total available for sale securities
1,921,032

 

 
1,921,032

 

Swaps
1,839

 

 
1,839

 

Total assets
$
1,922,871

 
$

 
$
1,922,871

 
$

Liabilities:
 
 
 
 
 
 
 
Swaps
$
1,839

 
$

 
$
1,839

 
$

Total liabilities
$
1,839

 
$

 
$
1,839

 
$


Impaired loans measured at estimated fair value on nonrecurring basis
A summary of the two classes with impaired loans at March 31, 2016 measured at estimated fair value on a non-recurring basis is the following:
 
March 31, 2016
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
C&I
$
71

 
$

 
$

 
$
71

Commercial real estate
3,030

 

 

 
3,030

Total impaired loans measured at fair value
$
3,101

 
$

 
$

 
$
3,101


A summary of the class of impaired loans at December 31, 2015 measured at estimated fair value on a non-recurring basis is the following:
 
December 31, 2015
 
Fair value
 
Level 1 inputs
 
Level 2 inputs
 
Level 3 inputs
Commercial real estate
$
3,218

 
$

 
$

 
$
3,218

Total impaired loans measured at fair value
$
3,218

 
$

 
$

 
$
3,218

Quantitative information of Level 3 assets
The following table presents quantitative information about significant unobservable inputs used in the fair value measurements for Level 3 assets at March 31, 2016:
Non-recurring fair value measurements
 
Fair value
 
Valuation technique
 
Unobservable input / assumptions
 
Range (1) (weighted average)
Impaired loans:
 
 
 
 
 
 
 
 
C&I
 
$
71

 
Appraisal
 
Adjustments for comparable properties
 
10.0% -25.0% (14.4%)
Commercial real estate
 
$
3,030

 
Appraisal
 
Adjustments for comparable properties
 
22.0% (22.0%)
Assets taken in foreclosure:
 
 
 
 
 
 
 
 
Residential mortgage
 
2,355

 
Appraisal
 
Adjustments by management to reflect current conditions/selling costs
 
10.0% - 22.0% (21.6%)
Commercial real estate(2)
 
7,411

 
Appraisal
 
Adjustments by management to reflect current conditions/selling costs
 
10.0% - 22.0% (22.0%)
ADC
 
4,427

 
Appraisal
 
Adjustments by management to reflect current conditions/selling costs
 
10.0% - 22.0% (22.0%)
Mortgage servicing rights
 
1,115

 
Third-party
 
Discount rates
 
8.5% - 11.5% (9.8%)
 
 
 
 
Third-party
 
Prepayment speeds
 
100 - 418 (208)
(1) Represents range of discount factors applied to the appraisal to determine fair value. The amounts used for mortgage servicing rights are discounts applied by a third-party valuation provider, which the Company believes are appropriate.

(2) Excludes $334 of commercial properties that are former financial centers that were closed and are now held for sale. These assets were not taken in foreclosure and their fair value is determined by third-party appraisals and our internal assessment of the market for this type of real estate.

Carrying amounts and estimated fair value of financial assets and liabilities
The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of March 31, 2016:
 
March 31, 2016
 
Carrying
amount
 

Level 1 inputs
 

Level 2 inputs
 

Level 3 inputs
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
486,730

 
$
486,730

 
$

 
$

Securities available for sale
1,894,820

 

 
1,894,820

 

Securities held to maturity
952,922

 

 
973,826

 

Portfolio loans, net
8,233,149

 

 

 
8,290,596

Loans held for sale
27,237

 

 
27,237

 

Accrued interest receivable on securities
11,937

 

 
11,937

 

Accrued interest receivable on loans
21,455

 

 

 
21,455

FHLB stock and FRB stock
118,330

 

 

 

Swaps
4,323

 

 
4,323

 

Financial liabilities:
 
 
 
 
 
 
 
Non-maturity deposits
(8,664,197
)
 
(8,664,197
)
 

 

Certificates of deposit
(664,425
)
 

 
(664,670
)
 

FHLB borrowings
(1,444,817
)
 

 
(1,446,146
)
 

Other borrowings
(23,571
)
 

 
(23,571
)
 

Senior notes
(98,996
)
 

 
(104,134
)
 

Subordinated notes
(108,124
)
 

 
(109,693
)
 

Mortgage escrow funds
(14,972
)
 

 
(14,969
)
 

Accrued interest payable on deposits
(495
)
 

 
(495
)
 

Accrued interest payable on borrowings
(2,376
)
 

 
(2,376
)
 

Swaps
(4,323
)
 

 
(4,323
)
 

The following is a summary of the carrying amounts and estimated fair value of financial assets and liabilities (none of which were held for trading purposes) as of December 31, 2015:
 
December 31, 2015
 
Carrying
amount
 

Level 1 inputs
 

Level 2 inputs
 

Level 3 inputs
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
229,513

 
$
229,513

 
$

 
$

Securities available for sale
1,921,032

 

 
1,921,032

 

Securities held to maturity
722,791

 

 
734,079

 

Portfolio loans, net
7,809,215

 

 

 
7,876,064

Loans held for sale
34,110

 

 
34,110

 

Accrued interest receivable on securities
11,329

 

 
11,329

 

Accrued interest receivable on loans
20,202

 

 

 
20,202

FHLB stock and FRB stock
116,758

 

 

 

Swaps
1,839

 

 
1,839

 

Financial liabilities:

 

 

 

Non-maturity deposits
(7,974,817
)
 
(7,974,817
)
 

 

Certificates of deposit
(605,190
)
 

 
(603,634
)
 

FHLB borrowings
(1,409,885
)
 

 
(1,418,155
)
 

Other borrowings
(16,566
)
 

 
(16,430
)
 

Senior notes
(98,893
)
 

 
(105,088
)
 

Mortgage escrow funds
(13,778
)
 

 
(13,775
)
 

Accrued interest payable on deposits
(783
)
 

 
(783
)
 

Accrued interest payable on borrowings
(4,490
)
 

 
(4,490
)
 

Swaps
(1,839
)
 

 
(1,839
)
 


v3.4.0.3
Accumulated Other Comprehensive Income (Loss) (Tables)
3 Months Ended
Mar. 31, 2016
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss)
Components of accumulated other comprehensive income (loss) (“AOCI”) were as follows as of the dates shown below:
 
March 31,
 
December 31,
 
2016
 
2015
Net unrealized holding gain (loss) on available for sale securities
$
15,066

 
$
(12,172
)
Related income tax (expense) benefit
(5,951
)
 
5,173

Available for sale securities AOCI, net of tax
9,115

 
(6,999
)
Net unrealized holding loss on securities transferred to held to maturity
(6,942
)
 
(7,226
)
Related income tax benefit
2,742

 
3,071

Securities transferred to held to maturity AOCI, net of tax
(4,200
)
 
(4,155
)
Net unrealized holding loss on retirement plans
(1,250
)
 
(1,687
)
Related income tax benefit
494

 
717

Retirement plans AOCI, net of tax
(756
)
 
(970
)
AOCI
$
4,159

 
$
(12,124
)

The following table presents the changes in each component of AOCI for the three months ended March 31, 2016 and 2015:
 
Net unrealized holding gain (loss) on available for sale securities
 
Net unrealized holding gain (loss) on securities transferred to held to maturity
 
Net unrealized holding (loss) gain on retirement plans
 
Total
The three months ended March 31, 2016
 
 
 
 
 
 
 
Balance beginning of the period
$
(6,999
)
 
$
(4,155
)
 
$
(970
)
 
$
(12,124
)
Other comprehensive gain before reclassification
16,285

 

 

 
16,285

Amounts reclassified from AOCI
(171
)
 
(45
)
 
214

 
(2
)
Total other comprehensive income
16,114

 
(45
)
 
214

 
16,283

Balance at end of period
$
9,115

 
$
(4,200
)
 
$
(756
)
 
$
4,159

The three months ended March 31, 2015
 
 
 
 
 
 
 
Balance beginning of the period
$
1,297

 
$
(4,967
)
 
$
(6,581
)
 
$
(10,251
)
Other comprehensive gain before reclassification
4,203

 

 

 
4,203

Amounts reclassified from AOCI
882

 
310

 
117

 
1,309

Total other comprehensive income
5,085

 
310

 
117

 
5,512

Balance at end of period
$
6,382

 
$
(4,657
)
 
$
(6,464
)
 
$
(4,739
)
Location in statement of operations where reclassification from AOCI is included
Net (loss) gain on sale of securities
 
Interest income on securities
 
Compensation and benefits expense
 
 
 
 
 
 
 
 
 
 

v3.4.0.3
Acquisitions (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Mar. 31, 2016
Jun. 30, 2015
Feb. 27, 2015
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Jun. 29, 2015
May. 07, 2015
Business Acquisition [Line Items]                
Goodwill $ 696,600     $ 696,600   $ 670,699    
Closing stock price (USD per share)             $ 14.63  
Consideration paid       351,452 $ 24,670      
Loans 8,233,149     8,233,149   7,809,215    
Deposits $ 9,328,622     9,328,622   $ 8,580,007    
Merger-related expense       $ 265 2,455      
FCC, LLC                
Business Acquisition [Line Items]                
Outstanding factoring receivables balance acquired               $ 44,500
Premium for factoring receivables acquired               $ 1,000
NSBC                
Business Acquisition [Line Items]                
Percentage of outstanding common stock acquired 100.00%     100.00%        
Loans receivable acquired $ 320,447     $ 320,447        
Premium paid for loans receivable acquired as a percent of gross loans acquired 5.90%     5.90%        
Premium paid for loans receivable acquired $ 18,906     $ 18,906        
Liabilities assumed 4,838     4,838        
Goodwill 25,698     25,698        
Restructuring charges $ 1,500              
NSBC | Customer lists                
Business Acquisition [Line Items]                
Estimated life 24 months              
Intangible asset acquired $ 1,500     1,500        
HVB Merger                
Business Acquisition [Line Items]                
Goodwill   $ 269,757            
Number of shares each shareholder received from merger   1.92            
Common stock issued as consideration   38,525,154            
Consideration paid   $ 566,307            
Intangible asset acquired   $ 33,839            
Merger-related expense       0 $ 645      
HVB Merger | Buildings                
Business Acquisition [Line Items]                
Useful life   30 years            
HVB Merger | Building Improvements and Equipment | Minimum                
Business Acquisition [Line Items]                
Useful life   1 year            
HVB Merger | Building Improvements and Equipment | Maximum                
Business Acquisition [Line Items]                
Useful life   5 years            
HVB Merger | Core deposits                
Business Acquisition [Line Items]                
Estimated life   10 years            
Damian                
Business Acquisition [Line Items]                
Percentage of outstanding common stock acquired     100.00%          
Liabilities assumed     $ 14,560          
Goodwill     11,930          
Restructuring charges       $ 1,500        
Merger-related expense     300          
Cash consideration     24,670          
Outstanding finance loans acquired     $ 22,307          
Damian | Customer lists                
Business Acquisition [Line Items]                
Estimated life     16 years          
Intangible asset acquired     $ 8,950          

v3.4.0.3
Acquisitions (Details 1) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Business Acquisition [Line Items]          
Cash and cash equivalents $ 486,730 $ 229,513   $ 186,701 $ 121,520
Investment securities 2,847,742 2,643,823      
Loans 8,233,149 7,809,215      
Bank owned life insurance 197,615 196,288      
Premises and equipment 62,432 63,362      
Accrued interest receivable 33,392 31,531      
Core deposits and other intangibles 75,790 77,367      
Other real estate owned 14,527 14,614      
Other assets 71,812 68,672      
Deposits (9,328,622) (8,580,007)      
Other liabilities (148,121) (171,750)      
Goodwill $ 696,600 $ 670,699      
Fair value adjustments          
Business Acquisition [Line Items]          
Cash and cash equivalents     $ 0    
Investment securities     217    
Loans     (24,248)    
Federal Reserve Bank stock     0    
Bank owned life insurance     0    
Premises and equipment     4,925    
Accrued interest receivable     0    
Core deposits and other intangibles     33,839    
Other real estate owned     0    
Other assets     (7,931)    
Deposits     0    
Other borrowings     0    
Other liabilities     1,540    
Total identifiable net assets     8,342    
Hudson Valley Holding Corp          
Business Acquisition [Line Items]          
Cash and cash equivalents     878,988    
Investment securities     713,625    
Loans     1,816,767    
Federal Reserve Bank stock     5,830    
Bank owned life insurance     44,231    
Premises and equipment     11,918    
Accrued interest receivable     7,392    
Core deposits and other intangibles     0    
Other real estate owned     222    
Other assets     32,639    
Deposits     (3,160,746)    
Other borrowings     (25,366)    
Other liabilities     (37,292)    
Total identifiable net assets     288,208    
Hudson Valley Holding Corp          
Business Acquisition [Line Items]          
Cash and cash equivalents     878,988    
Investment securities     713,842    
Loans     1,792,519    
Federal Reserve Bank stock     5,830    
Bank owned life insurance     44,231    
Premises and equipment     16,843    
Accrued interest receivable     7,392    
Core deposits and other intangibles     33,839    
Other real estate owned     222    
Other assets     24,708    
Deposits     (3,160,746)    
Other borrowings     (25,366)    
Other liabilities     (35,752)    
Total identifiable net assets     296,550    
Goodwill     269,757    
Fair value of acquired loans at acquisition date     1,695,546    
Gross contractual amounts receivable at acquisition date     1,974,740    
Best estimate at acquisition date of contractual cash flows not expected to be collected     37,520    
Hudson Valley Holding Corp | Purchased Credit Impaired Loans          
Business Acquisition [Line Items]          
Fair value of acquired loans at acquisition date     96,973    
Gross contractual amounts receivable at acquisition date     122,104    
Best estimate at acquisition date of contractual cash flows not expected to be collected     $ 19,024    

v3.4.0.3
Securities (Details) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Available for Sale    
Amortized cost $ 1,879,754 $ 1,933,204
Gross unrealized gains 20,613 5,429
Gross unrealized losses (5,547) (17,601)
Available for sale, at fair value 1,894,820 1,921,032
Held to Maturity    
Amortized cost 952,922 722,791
Gross unrealized gains 22,462 14,090
Gross unrealized losses (1,558) (2,802)
Fair value 973,826 734,079
Residential MBS:    
Available for Sale    
Amortized cost 1,474,927 1,302,342
Gross unrealized gains 17,368 2,115
Gross unrealized losses (672) (8,222)
Available for sale, at fair value 1,491,623 1,296,235
Held to Maturity    
Amortized cost 294,781 302,602
Gross unrealized gains 6,095 1,944
Gross unrealized losses (194) (1,833)
Fair value 300,682 302,713
Other securities:    
Available for Sale    
Amortized cost 404,827 630,862
Gross unrealized gains 3,245 3,314
Gross unrealized losses (4,875) (9,379)
Available for sale, at fair value 403,197 624,797
Held to Maturity    
Amortized cost 658,141 420,189
Gross unrealized gains 16,367 12,146
Gross unrealized losses (1,364) (969)
Fair value 673,144 431,366
Agency-backed | Residential MBS:    
Available for Sale    
Amortized cost 1,400,401 1,222,912
Gross unrealized gains 16,853 2,039
Gross unrealized losses (303) (7,089)
Available for sale, at fair value 1,416,951 1,217,862
Held to Maturity    
Amortized cost 247,094 252,760
Gross unrealized gains 5,599 1,857
Gross unrealized losses (72) (1,214)
Fair value 252,621 253,403
CMO/Other MBS | Residential MBS:    
Available for Sale    
Amortized cost 74,526 79,430
Gross unrealized gains 515 76
Gross unrealized losses (369) (1,133)
Available for sale, at fair value 74,672 78,373
Held to Maturity    
Amortized cost 47,687 49,842
Gross unrealized gains 496 87
Gross unrealized losses (122) (619)
Fair value 48,061 49,310
Federal agencies | Other securities:    
Available for Sale    
Amortized cost 83,575 85,124
Gross unrealized gains 138 7
Gross unrealized losses (3) (864)
Available for sale, at fair value 83,710 84,267
Held to Maturity    
Amortized cost 104,292 104,135
Gross unrealized gains 4,382 2,458
Gross unrealized losses (9) (635)
Fair value 108,665 105,958
Corporate | Other securities:    
Available for Sale    
Amortized cost 91,325 321,630
Gross unrealized gains 317 522
Gross unrealized losses (4,463) (7,964)
Available for sale, at fair value 87,179 314,188
Held to Maturity    
Amortized cost 25,192 25,241
Gross unrealized gains 0 11
Gross unrealized losses (319) (200)
Fair value 24,873 25,052
State and municipal | Other securities:    
Available for Sale    
Amortized cost 221,146 187,399
Gross unrealized gains 2,780 2,187
Gross unrealized losses (409) (551)
Available for sale, at fair value 223,517 189,035
Held to Maturity    
Amortized cost 522,657 285,813
Gross unrealized gains 11,675 9,327
Gross unrealized losses (1,036) (134)
Fair value 533,296 295,006
Trust preferred | Other securities:    
Available for Sale    
Amortized cost   27,928
Gross unrealized gains   589
Gross unrealized losses   0
Available for sale, at fair value   28,517
Held to Maturity    
Amortized cost   0
Gross unrealized gains   0
Gross unrealized losses   0
Fair value   0
Other | Other securities:    
Available for Sale    
Amortized cost 8,781 8,781
Gross unrealized gains 10 9
Gross unrealized losses 0 0
Available for sale, at fair value 8,791 8,790
Held to Maturity    
Amortized cost 6,000 5,000
Gross unrealized gains 310 350
Gross unrealized losses 0 0
Fair value $ 6,310 $ 5,350

v3.4.0.3
Securities (Details 1) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Available for Sale    
Amortized cost, One year or less $ 17,162  
Amortized cost, One to five years 214,895  
Amortized cost, Five to ten years 113,074  
Amortized cost, Greater than ten years 59,696  
Amortized cost, Total securities with a stated maturity date 404,827  
Amortized cost, Available for sale securities 1,879,754 $ 1,933,204
Fair value, One year or less 17,194  
Fair value, One to five years 213,978  
Fair value, Five to ten years 112,148  
Fair value, Greater than ten years 59,877  
Fair value, Total securities with a stated maturity date 403,197  
Fair value, Available for sale securities 1,894,820 1,921,032
Held to Maturity    
Amortized cost, One year or less 13,059  
Amortized cost, One to five years 52,569  
Amortized cost, Five to ten years 219,829  
Amortized cost, Greater than ten years 372,684  
Amortized cost, Total securities with a stated maturity date 658,141  
Amortized cost, Held to maturity securities 952,922 722,791
Fair value, One year or less 13,160  
Fair value, One to five years 54,617  
Fair value, Five to ten years 227,552  
Fair value, Greater than ten years 377,815  
Fair value, Total securities with a stated maturity date 673,144  
Fair value 973,826 734,079
Residential MBS:    
Available for Sale    
Amortized cost, Available for sale securities 1,474,927 1,302,342
Fair value, Available for sale securities 1,491,623 1,296,235
Held to Maturity    
Amortized cost, Held to maturity securities 294,781 302,602
Fair value $ 300,682 $ 302,713

v3.4.0.3
Securities (Details 2) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Investments, Debt and Equity Securities [Abstract]    
Proceeds from sales $ 275,358 $ 115,554
Gross realized gains 1,562 1,663
Gross realized losses (1,845) (129)
Income tax (benefit) expense on realized net gains $ (96) $ 499

v3.4.0.3
Securities (Details 3) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]    
Fair value, Less than 12 months $ 110,953 $ 80,294
Unrealized losses, Less than 12 months (2,641) (2,247)
Fair value, 12 months or longer 98,898 1,233,295
Unrealized losses, 12 months or longer (2,906) (15,354)
Fair value, Total 209,851 1,313,589
Unrealized losses, Total (5,547) (17,601)
Residential MBS:    
Schedule of Available-for-sale Securities [Line Items]    
Fair value, Less than 12 months 73,080 42,665
Unrealized losses, Less than 12 months (639) (1,245)
Fair value, 12 months or longer 5,279 896,437
Unrealized losses, 12 months or longer (33) (6,977)
Fair value, Total 78,359 939,102
Unrealized losses, Total (672) (8,222)
Other securities:    
Schedule of Available-for-sale Securities [Line Items]    
Fair value, Less than 12 months 37,873 37,629
Unrealized losses, Less than 12 months (2,002) (1,002)
Fair value, 12 months or longer 93,619 336,858
Unrealized losses, 12 months or longer (2,873) (8,377)
Fair value, Total 131,492 374,487
Unrealized losses, Total (4,875) (9,379)
Agency-backed | Residential MBS:    
Schedule of Available-for-sale Securities [Line Items]    
Fair value, Less than 12 months 46,003 18,983
Unrealized losses, Less than 12 months (280) (528)
Fair value, 12 months or longer 3,716 854,491
Unrealized losses, 12 months or longer (23) (6,561)
Fair value, Total 49,719 873,474
Unrealized losses, Total (303) (7,089)
CMO/Other MBS | Residential MBS:    
Schedule of Available-for-sale Securities [Line Items]    
Fair value, Less than 12 months 27,077 23,682
Unrealized losses, Less than 12 months (359) (717)
Fair value, 12 months or longer 1,563 41,946
Unrealized losses, 12 months or longer (10) (416)
Fair value, Total 28,640 65,628
Unrealized losses, Total (369) (1,133)
Federal agencies | Other securities:    
Schedule of Available-for-sale Securities [Line Items]    
Fair value, Less than 12 months 206 14,933
Unrealized losses, Less than 12 months 0 (260)
Fair value, 12 months or longer 2,998 57,886
Unrealized losses, 12 months or longer (3) (604)
Fair value, Total 3,204 72,819
Unrealized losses, Total (3) (864)
Corporate | Other securities:    
Schedule of Available-for-sale Securities [Line Items]    
Fair value, Less than 12 months 31,810 19,257
Unrealized losses, Less than 12 months (1,880) (715)
Fair value, 12 months or longer 31,304 236,048
Unrealized losses, 12 months or longer (2,583) (7,249)
Fair value, Total 63,114 255,305
Unrealized losses, Total (4,463) (7,964)
State and municipal | Other securities:    
Schedule of Available-for-sale Securities [Line Items]    
Fair value, Less than 12 months 5,857 3,439
Unrealized losses, Less than 12 months (122) (27)
Fair value, 12 months or longer 59,317 42,924
Unrealized losses, 12 months or longer (287) (524)
Fair value, Total 65,174 46,363
Unrealized losses, Total $ (409) $ (551)

v3.4.0.3
Securities (Details 4) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]    
Fair value, Less than 12 months $ 26,766 $ 23,164
Unrealized losses, Less than 12 months (163) (562)
Fair value, 12 months or longer 193,776 215,369
Unrealized losses, 12 months or longer (1,395) (2,240)
Fair value, Total 220,542 238,533
Unrealized losses, Total (1,558) (2,802)
Residential MBS:    
Schedule of Held-to-maturity Securities [Line Items]    
Fair value, Less than 12 months 14,552 5,960
Unrealized losses, Less than 12 months (130) (156)
Fair value, 12 months or longer 9,945 172,618
Unrealized losses, 12 months or longer (64) (1,677)
Fair value, Total 24,497 178,578
Unrealized losses, Total (194) (1,833)
Residential MBS: | Agency-backed    
Schedule of Held-to-maturity Securities [Line Items]    
Fair value, Less than 12 months 6,568 0
Unrealized losses, Less than 12 months (69) 0
Fair value, 12 months or longer 1,261 132,585
Unrealized losses, 12 months or longer (3) (1,214)
Fair value, Total 7,829 132,585
Unrealized losses, Total (72) (1,214)
Residential MBS: | CMO/Other MBS    
Schedule of Held-to-maturity Securities [Line Items]    
Fair value, Less than 12 months 7,984 5,960
Unrealized losses, Less than 12 months (61) (156)
Fair value, 12 months or longer 8,684 40,033
Unrealized losses, 12 months or longer (61) (463)
Fair value, Total 16,668 45,993
Unrealized losses, Total (122) (619)
Other securities:    
Schedule of Held-to-maturity Securities [Line Items]    
Fair value, Less than 12 months 12,214 17,204
Unrealized losses, Less than 12 months (33) (406)
Fair value, 12 months or longer 183,831 42,751
Unrealized losses, 12 months or longer (1,331) (563)
Fair value, Total 196,045 59,955
Unrealized losses, Total (1,364) (969)
Other securities: | Federal agencies    
Schedule of Held-to-maturity Securities [Line Items]    
Fair value, Less than 12 months 9,991 14,642
Unrealized losses, Less than 12 months (9) (358)
Fair value, 12 months or longer 0 9,723
Unrealized losses, 12 months or longer 0 (277)
Fair value, Total 9,991 24,365
Unrealized losses, Total (9) (635)
Other securities: | Corporate    
Schedule of Held-to-maturity Securities [Line Items]    
Fair value, Less than 12 months 0 0
Unrealized losses, Less than 12 months 0 0
Fair value, 12 months or longer 24,872 20,039
Unrealized losses, 12 months or longer (319) (200)
Fair value, Total 24,872 20,039
Unrealized losses, Total (319) (200)
Other securities: | State and municipal    
Schedule of Held-to-maturity Securities [Line Items]    
Fair value, Less than 12 months 2,223 2,562
Unrealized losses, Less than 12 months (24) (48)
Fair value, 12 months or longer 158,959 12,989
Unrealized losses, 12 months or longer (1,012) (86)
Fair value, Total 161,182 15,551
Unrealized losses, Total $ (1,036) $ (134)

v3.4.0.3
Securities (Details 5) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Financial Instruments Owned and Pledged as Collateral [Line Items]    
Total securities pledged $ 1,447,066 $ 1,486,945
Federal Home Loan Bank Borrowings    
Financial Instruments Owned and Pledged as Collateral [Line Items]    
Available-for-sale securities pledged as collateral 95,317 101,994
Held-to-maturity securities pledged as collateral 2,500 206,337
Municipal Deposits    
Financial Instruments Owned and Pledged as Collateral [Line Items]    
Available-for-sale securities pledged as collateral 975,592 849,186
Held-to-maturity securities pledged as collateral 369,334 327,589
Interest Rate Swap    
Financial Instruments Owned and Pledged as Collateral [Line Items]    
Available-for-sale securities pledged as collateral $ 4,323 $ 1,839

v3.4.0.3
Securities (Details Textual)
3 Months Ended
Mar. 31, 2016
security
Investments, Debt and Equity Securities [Abstract]  
Number of securities which were in continuous unrealized loss position for less than 12 months 131
Number of securities which were in continuous unrealized loss position for 12 months or more 36

v3.4.0.3
Portfolio Loans (Details) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Mar. 31, 2015
Dec. 31, 2014
Components of loan portfolio, excluding loans held for sale        
Traditional commercial & industrial (“C&I”) $ 2,003,839 $ 1,681,704    
Payroll finance 199,119 221,831    
Warehouse lending 341,790 387,808    
Factored receivables 215,015 208,382    
Equipment financing 656,775 631,303    
Total C&I 3,416,538 3,131,028    
Commercial real estate 2,790,145 2,733,351    
Multi-family 886,069 796,030    
Acquisition, development & construction (“ADC”) 179,517 186,398    
Total commercial mortgage 3,855,731 3,715,779    
Total commercial 7,272,269 6,846,807    
Residential mortgage 718,733 713,036    
Consumer 295,161 299,517    
Portfolio loans 8,286,163 7,859,360    
Allowance for loan losses (53,014) (50,145) $ (42,884) $ (42,374)
Portfolio loans, net $ 8,233,149 $ 7,809,215    

v3.4.0.3
Portfolio Loans (Details 1) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Non-Performing loans:    
Current loans $ 8,181,557,000 $ 7,724,953,000
Non accrual loans 84,436,000 65,737,000
Portfolio loans 8,286,163,000 7,859,360,000
Current loans 14,918,000 13,047,000
30-59 days past due 1,116,000 654,000
60-89 days past due 0 0
90 plus days past due 0 0
Non-Accrual 5,810,000 8,591,000
Total 21,844,000 22,292,000
Nonperforming loans    
Non-Performing loans:    
Non accrual loans 84,436,000 65,737,000
Non-performing loans:    
Loans 90 days past due and still accruing 1,002,000 674,000
Total non-performing loans 85,438,000 66,411,000
C&I    
Non-Performing loans:    
Current loans 1,969,677,000 1,630,635,000
Non accrual loans 29,760,000 10,142,000
Portfolio loans 2,003,839,000 1,681,704,000
Current loans 580,000 154,000
30-59 days past due 0 0
60-89 days past due 0 0
90 plus days past due 0 0
Non-Accrual 1,116,000 2,052,000
Total 1,696,000 2,206,000
Payroll finance    
Non-Performing loans:    
Current loans 198,805,000 221,394,000
Non accrual loans 57,000 0
Portfolio loans 199,119,000 221,831,000
Warehouse lending    
Non-Performing loans:    
Current loans 341,790,000 387,808,000
Non accrual loans 0 0
Portfolio loans 341,790,000 387,808,000
Factored receivables    
Non-Performing loans:    
Current loans 214,803,000 208,162,000
Non accrual loans 212,000 220,000
Portfolio loans 215,015,000 208,382,000
Equipment financing    
Non-Performing loans:    
Current loans 651,995,000 627,056,000
Non accrual loans 2,578,000 1,644,000
Portfolio loans 656,775,000 631,303,000
Current loans 64,000 338,000
30-59 days past due 0 0
60-89 days past due 0 0
90 plus days past due 0 0
Non-Accrual 0 0
Total 64,000 338,000
Commercial real estate    
Non-Performing loans:    
Current loans 2,767,800,000 2,702,671,000
Non accrual loans 17,809,000 20,742,000
Portfolio loans 2,790,145,000 2,733,351,000
Current loans 2,496,000 2,787,000
30-59 days past due 257,000 0
60-89 days past due 0 0
90 plus days past due 0 0
Non-Accrual 0 0
Total 2,753,000 2,787,000
Multi-family    
Non-Performing loans:    
Current loans 882,028,000 791,828,000
Non accrual loans 4,041,000 1,717,000
Portfolio loans 886,069,000 796,030,000
ADC    
Non-Performing loans:    
Current loans 175,501,000 182,615,000
Non accrual loans 4,016,000 3,700,000
Portfolio loans 179,517,000 186,398,000
Current loans 6,274,000 5,107,000
30-59 days past due 0 0
60-89 days past due 0 0
90 plus days past due 0 0
Non-Accrual 2,458,000 3,700,000
Total 8,732,000 8,807,000
Residential mortgage    
Non-Performing loans:    
Current loans 694,104,000 686,445,000
Non accrual loans 17,853,000 19,680,000
Portfolio loans 718,733,000 713,036,000
Current loans 5,504,000 4,661,000
30-59 days past due 859,000 654,000
60-89 days past due 0 0
90 plus days past due 0 0
Non-Accrual 2,236,000 2,839,000
Total 8,599,000 8,154,000
Consumer    
Non-Performing loans:    
Current loans 285,054,000 286,339,000
Non accrual loans 8,110,000 7,892,000
Portfolio loans 295,161,000 299,517,000
30 to 59 Days Past Due    
Non-Performing loans:    
Past due loans 11,107,000 31,334,000
30 to 59 Days Past Due | C&I    
Non-Performing loans:    
Past due loans 1,294,000 9,380,000
30 to 59 Days Past Due | Payroll finance    
Non-Performing loans:    
Past due loans 39,000 0
30 to 59 Days Past Due | Warehouse lending    
Non-Performing loans:    
Past due loans 0 0
30 to 59 Days Past Due | Factored receivables    
Non-Performing loans:    
Past due loans 0 0
30 to 59 Days Past Due | Equipment financing    
Non-Performing loans:    
Past due loans 1,276,000 1,088,000
30 to 59 Days Past Due | Commercial real estate    
Non-Performing loans:    
Past due loans 1,130,000 7,417,000
30 to 59 Days Past Due | Multi-family    
Non-Performing loans:    
Past due loans 0 2,485,000
30 to 59 Days Past Due | ADC    
Non-Performing loans:    
Past due loans 0 0
30 to 59 Days Past Due | Residential mortgage    
Non-Performing loans:    
Past due loans 6,092,000 6,014,000
30 to 59 Days Past Due | Consumer    
Non-Performing loans:    
Past due loans 1,276,000 4,950,000
60 to 89 Days Past Due    
Non-Performing loans:    
Past due loans 8,061,000 36,662,000
60 to 89 Days Past Due | C&I    
Non-Performing loans:    
Past due loans 2,630,000 31,060,000
60 to 89 Days Past Due | Payroll finance    
Non-Performing loans:    
Past due loans 59,000 349,000
60 to 89 Days Past Due | Warehouse lending    
Non-Performing loans:    
Past due loans 0 0
60 to 89 Days Past Due | Factored receivables    
Non-Performing loans:    
Past due loans 0 0
60 to 89 Days Past Due | Equipment financing    
Non-Performing loans:    
Past due loans 926,000 1,515,000
60 to 89 Days Past Due | Commercial real estate    
Non-Performing loans:    
Past due loans 3,074,000 2,521,000
60 to 89 Days Past Due | Multi-family    
Non-Performing loans:    
Past due loans 0 0
60 to 89 Days Past Due | ADC    
Non-Performing loans:    
Past due loans 0 0
60 to 89 Days Past Due | Residential mortgage    
Non-Performing loans:    
Past due loans 684,000 897,000
60 to 89 Days Past Due | Consumer    
Non-Performing loans:    
Past due loans 688,000 320,000
90 or More Days Past Due    
Non-Performing loans:    
Past due loans 1,002,000 674,000
90 or More Days Past Due | C&I    
Non-Performing loans:    
Past due loans 478,000 487,000
90 or More Days Past Due | Payroll finance    
Non-Performing loans:    
Past due loans 159,000 88,000
90 or More Days Past Due | Warehouse lending    
Non-Performing loans:    
Past due loans 0 0
90 or More Days Past Due | Factored receivables    
Non-Performing loans:    
Past due loans 0 0
90 or More Days Past Due | Equipment financing    
Non-Performing loans:    
Past due loans 0 0
90 or More Days Past Due | Commercial real estate    
Non-Performing loans:    
Past due loans 332,000 0
90 or More Days Past Due | Multi-family    
Non-Performing loans:    
Past due loans 0 0
90 or More Days Past Due | ADC    
Non-Performing loans:    
Past due loans 0 83,000
90 or More Days Past Due | Residential mortgage    
Non-Performing loans:    
Past due loans 0 0
90 or More Days Past Due | Consumer    
Non-Performing loans:    
Past due loans $ 33,000 $ 16,000

v3.4.0.3
Portfolio Loans (Details 2) - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans $ 84,436,000 $ 65,737,000
Non-accrual loans, unpaid principal balance 96,932,000 75,501,000
C&I    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 29,760,000 10,142,000
Non-accrual loans, unpaid principal balance 30,107,000 10,503,000
Payroll finance    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 57,000 0
Non-accrual loans, unpaid principal balance 57,000 0
Factored receivables    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 212,000 220,000
Non-accrual loans, unpaid principal balance 212,000 220,000
Equipment financing    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 2,578,000 1,644,000
Non-accrual loans, unpaid principal balance 2,578,000 1,644,000
Commercial real estate    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 17,809,000 20,742,000
Non-accrual loans, unpaid principal balance 21,731,000 23,678,000
Multi-family    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 4,041,000 1,717,000
Non-accrual loans, unpaid principal balance 4,041,000 1,837,000
ADC    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 4,016,000 3,700,000
Non-accrual loans, unpaid principal balance 4,146,000 3,829,000
Residential mortgage    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 17,853,000 19,680,000
Non-accrual loans, unpaid principal balance 24,544,000 24,386,000
Loans formally in process of foreclosure 9,887,000 9,638,000
Consumer    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 8,110,000 7,892,000
Non-accrual loans, unpaid principal balance 9,516,000 9,404,000
Warehouse lending    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 0 0
Receivables without deteriorated credit quality    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 66,984,000 45,712,000
Receivables without deteriorated credit quality | C&I    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 24,629,000 4,314,000
Receivables without deteriorated credit quality | Payroll finance    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 57,000 0
Receivables without deteriorated credit quality | Factored receivables    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 212,000 220,000
Receivables without deteriorated credit quality | Equipment financing    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 2,578,000 1,644,000
Receivables without deteriorated credit quality | Commercial real estate    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 11,899,000 13,119,000
Receivables without deteriorated credit quality | Multi-family    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 4,041,000 1,717,000
Receivables without deteriorated credit quality | ADC    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 4,016,000 3,700,000
Receivables without deteriorated credit quality | Residential mortgage    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 12,267,000 13,683,000
Receivables without deteriorated credit quality | Consumer    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 7,285,000 7,315,000
Receivables acquired with deteriorated credit quality    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 17,452,000 20,025,000
Receivables acquired with deteriorated credit quality | C&I    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 5,131,000 5,828,000
Receivables acquired with deteriorated credit quality | Payroll finance    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 0 0
Receivables acquired with deteriorated credit quality | Factored receivables    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 0 0
Receivables acquired with deteriorated credit quality | Equipment financing    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 0 0
Receivables acquired with deteriorated credit quality | Commercial real estate    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 5,910,000 7,623,000
Receivables acquired with deteriorated credit quality | Multi-family    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 0 0
Receivables acquired with deteriorated credit quality | ADC    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 0 0
Receivables acquired with deteriorated credit quality | Residential mortgage    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans 5,586,000 5,997,000
Receivables acquired with deteriorated credit quality | Consumer    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Non accrual loans $ 825,000 $ 577,000

v3.4.0.3
Portfolio Loans (Details 3) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment $ 55,367 $ 28,372
Loans evaluated by segment, Collectively evaluated for impairment 8,113,181 7,745,695
Portfolio loans 8,286,163 7,859,360
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 53,014 50,145
Total allowance for loan losses 53,014 50,145
C&I    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment 27,870 3,138
Loans evaluated by segment, Collectively evaluated for impairment 1,924,254 1,661,163
Portfolio loans 2,003,839 1,681,704
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 14,268 13,262
Total allowance for loan losses 14,268 13,262
Payroll finance    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment 0 0
Loans evaluated by segment, Collectively evaluated for impairment 199,119 221,831
Portfolio loans 199,119 221,831
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 1,546 1,936
Total allowance for loan losses 1,546 1,936
Warehouse lending    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment 0 0
Loans evaluated by segment, Collectively evaluated for impairment 341,790 387,808
Portfolio loans 341,790 387,808
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 520 589
Total allowance for loan losses 520 589
Factored receivables    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment 0 0
Loans evaluated by segment, Collectively evaluated for impairment 215,015 208,382
Portfolio loans 215,015 208,382
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 1,407 1,457
Total allowance for loan losses 1,407 1,457
Equipment financing    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment 2,192 1,017
Loans evaluated by segment, Collectively evaluated for impairment 654,583 630,286
Portfolio loans 656,775 631,303
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 5,393 4,925
Total allowance for loan losses 5,393 4,925
Commercial real estate    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment 13,815 13,492
Loans evaluated by segment, Collectively evaluated for impairment 2,728,143 2,669,673
Portfolio loans 2,790,145 2,733,351
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 15,770 13,861
Total allowance for loan losses 15,770 13,861
Multi-family    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment 883 1,541
Loans evaluated by segment, Collectively evaluated for impairment 880,716 790,017
Portfolio loans 886,069 796,030
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 2,996 2,741
Total allowance for loan losses 2,996 2,741
ADC    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment 8,595 8,669
Loans evaluated by segment, Collectively evaluated for impairment 166,204 173,065
Portfolio loans 179,517 186,398
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 2,157 2,009
Total allowance for loan losses 2,157 2,009
Residential mortgage    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment 515 515
Loans evaluated by segment, Collectively evaluated for impairment 711,229 705,245
Portfolio loans 718,733 713,036
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 4,850 5,007
Total allowance for loan losses 4,850 5,007
Consumer    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Individually evaluated for impairment 1,497 0
Loans evaluated by segment, Collectively evaluated for impairment 292,128 298,225
Portfolio loans 295,161 299,517
Allowance evaluated by segment, Individually evaluated for impairment 0 0
Allowance evaluated by segment, Collectively evaluated for impairment 4,107 4,358
Total allowance for loan losses 4,107 4,358
Purchased Credit Impaired Loans    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans 117,615 85,293
Purchased Credit Impaired Loans | C&I    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans 51,715 17,403
Purchased Credit Impaired Loans | Payroll finance    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans 0 0
Purchased Credit Impaired Loans | Warehouse lending    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans 0 0
Purchased Credit Impaired Loans | Factored receivables    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans 0 0
Purchased Credit Impaired Loans | Equipment financing    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans 0 0
Purchased Credit Impaired Loans | Commercial real estate    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans 48,187 50,186
Purchased Credit Impaired Loans | Multi-family    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans 4,470 4,472
Purchased Credit Impaired Loans | ADC    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans 4,718 4,664
Purchased Credit Impaired Loans | Residential mortgage    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans 6,989 7,276
Purchased Credit Impaired Loans | Consumer    
Loans evaluated for impairment by segment    
Loans evaluated by segment, Purchased credit impaired loans $ 1,536 $ 1,292

v3.4.0.3
Portfolio Loans (Details 4) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]    
Balance at beginning of period $ 11,211 $ 724
Balances acquired in the NSBC Acquisition 2,200 0
Accretion of income (1,155) 0
Reclassification from non-accretable difference 266 0
Balance at end of period $ 12,522 $ 724

v3.4.0.3
Portfolio Loans (Details 5) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
With no related allowance recorded:    
Unpaid principal balance with no related allowance recorded $ 56,943 $ 29,979
Recorded investment with no related allowance recorded 55,367 28,372
C&I    
With no related allowance recorded:    
Unpaid principal balance with no related allowance recorded 28,050 3,145
Recorded investment with no related allowance recorded 27,870 3,138
Equipment financing    
With no related allowance recorded:    
Unpaid principal balance with no related allowance recorded 2,192 1,017
Recorded investment with no related allowance recorded 2,192 1,017
Commercial real estate    
With no related allowance recorded:    
Unpaid principal balance with no related allowance recorded 15,211 15,092
Recorded investment with no related allowance recorded 13,815 13,492
Multi-family    
With no related allowance recorded:    
Unpaid principal balance with no related allowance recorded 883 1,541
Recorded investment with no related allowance recorded 883 1,541
ADC    
With no related allowance recorded:    
Unpaid principal balance with no related allowance recorded 8,595 8,669
Recorded investment with no related allowance recorded 8,595 8,669
Residential mortgage    
With no related allowance recorded:    
Unpaid principal balance with no related allowance recorded 515 515
Recorded investment with no related allowance recorded 515 515
Consumer    
With no related allowance recorded:    
Unpaid principal balance with no related allowance recorded 1,497 0
Recorded investment with no related allowance recorded $ 1,497 $ 0

v3.4.0.3
Portfolio Loans (Details 6) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Financing Receivable, Impaired [Line Items]    
Average recorded investment with no related allowance $ 39,803 $ 28,703
Interest income recognized with no related allowance 104 124
Cash-basis interest income recognized with no related allowance 0 0
C&I    
Financing Receivable, Impaired [Line Items]    
Average recorded investment with no related allowance 15,366 3,316
Interest income recognized with no related allowance 9 0
Cash-basis interest income recognized with no related allowance 0 0
Equipment financing    
Financing Receivable, Impaired [Line Items]    
Average recorded investment with no related allowance 1,288 0
Interest income recognized with no related allowance 0 0
Cash-basis interest income recognized with no related allowance 0 0
Commercial real estate    
Financing Receivable, Impaired [Line Items]    
Average recorded investment with no related allowance 13,118 13,275
Interest income recognized with no related allowance 39 67
Cash-basis interest income recognized with no related allowance 0 0
Multi-family    
Financing Receivable, Impaired [Line Items]    
Average recorded investment with no related allowance 884 0
Interest income recognized with no related allowance 0 0
Cash-basis interest income recognized with no related allowance 0 0
ADC    
Financing Receivable, Impaired [Line Items]    
Average recorded investment with no related allowance 8,632 11,597
Interest income recognized with no related allowance 56 57
Cash-basis interest income recognized with no related allowance 0 0
Residential mortgage    
Financing Receivable, Impaired [Line Items]    
Average recorded investment with no related allowance 515 515
Interest income recognized with no related allowance 0 0
Cash-basis interest income recognized with no related allowance 0 0
Consumer    
Financing Receivable, Impaired [Line Items]    
Average recorded investment with no related allowance 748 0
Interest income recognized with no related allowance 0 0
Cash-basis interest income recognized with no related allowance $ 0 $ 0

v3.4.0.3
Portfolio Loans (Details 7) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Financing Receivable, Modifications [Line Items]    
Current loans $ 14,918 $ 13,047
30-59 days past due 1,116 654
60-89 days past due 0 0
90 plus days past due 0 0
Non- accrual 5,810 8,591
Total 21,844 22,292
C&I    
Financing Receivable, Modifications [Line Items]    
Current loans 580 154
30-59 days past due 0 0
60-89 days past due 0 0
90 plus days past due 0 0
Non- accrual 1,116 2,052
Total 1,696 2,206
Equipment financing    
Financing Receivable, Modifications [Line Items]    
Current loans 64 338
30-59 days past due 0 0
60-89 days past due 0 0
90 plus days past due 0 0
Non- accrual 0 0
Total 64 338
Commercial real estate    
Financing Receivable, Modifications [Line Items]    
Current loans 2,496 2,787
30-59 days past due 257 0
60-89 days past due 0 0
90 plus days past due 0 0
Non- accrual 0 0
Total 2,753 2,787
ADC    
Financing Receivable, Modifications [Line Items]    
Current loans 6,274 5,107
30-59 days past due 0 0
60-89 days past due 0 0
90 plus days past due 0 0
Non- accrual 2,458 3,700
Total 8,732 8,807
Residential mortgage    
Financing Receivable, Modifications [Line Items]    
Current loans 5,504 4,661
30-59 days past due 859 654
60-89 days past due 0 0
90 plus days past due 0 0
Non- accrual 2,236 2,839
Total $ 8,599 $ 8,154

v3.4.0.3
Portfolio Loans (Details 8)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2016
USD ($)
loan
Mar. 31, 2015
USD ($)
loan
Sep. 30, 2014
USD ($)
loan
Financing Receivable, Modifications [Line Items]      
Number | loan 1 0  
Recorded investment, Pre-modification $ 469 $ 0  
Recorded investment, Post-modification $ 469 $ 0  
Residential mortgage      
Financing Receivable, Modifications [Line Items]      
Number | loan   1 0
Recorded investment, Pre-modification   $ 469 $ 0
Recorded investment, Post-modification   $ 469 $ 0

v3.4.0.3
Portfolio Loans (Details Textual)
3 Months Ended
Mar. 31, 2016
USD ($)
loan
Mar. 31, 2015
USD ($)
loan
Dec. 31, 2015
USD ($)
Dec. 31, 2014
USD ($)
Financing Receivable, Allowance for Credit Losses [Line Items]        
Net deferred loan origination costs $ 1,612,000   $ 2,029,000  
Bank pledged mortgages 2,205,834,000   2,050,982,000  
Maximum outstanding balance of loan to be evaluated for impairment on a homogeneous pool basis 500,000      
Loans included in allowance for loan losses 53,014,000 $ 42,884,000 50,145,000 $ 42,374,000
Impaired loans with an allowance recorded $ 0   0  
Loans modified by TDR | loan 1 0    
TDRs modified and subsequently defaulted | loan 0 0    
Purchased Credit Impaired Loans        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Loans evaluated by segment, Purchased credit impaired loans $ 117,615,000   85,293,000  
Loans included in allowance for loan losses 565,000   272,000  
Balance of PCI loans treated under cost recovery method 17,452,000   20,025,000  
C&I        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Loans included in allowance for loan losses 14,269,000 $ 10,686,000 13,262,000 11,027,000
C&I | Purchased Credit Impaired Loans        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Loans evaluated by segment, Purchased credit impaired loans 51,715,000   17,403,000  
C&I | Purchased Credit Impaired Loans | NSBC        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Loans evaluated by segment, Purchased credit impaired loans 37,823,000      
Warehouse lending        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Loans included in allowance for loan losses 520,000 $ 859,000 589,000 $ 608,000
Warehouse lending | Purchased Credit Impaired Loans        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Loans evaluated by segment, Purchased credit impaired loans $ 0   $ 0  

v3.4.0.3
Allowance for Loan Losses - Allowance Rollforward (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses $ 50,145 $ 42,374
Charge-offs (1,766) (1,972)
Recoveries 635 382
Net Charge-offs (1,131) (1,590)
Provision 4,000 2,100
Ending Allowance for Loan Losses $ 53,014 $ 42,884
Annualized net charge-offs to average loans outstanding 0.06% 0.13%
C&I    
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses $ 13,262 $ 11,027
Charge-offs (489) (842)
Recoveries 329 101
Net Charge-offs (160) (741)
Provision 1,167 400
Ending Allowance for Loan Losses 14,269 10,686
Payroll finance    
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses 1,936 1,506
Charge-offs 0 (303)
Recoveries 4 11
Net Charge-offs 4 (292)
Provision (394) 686
Ending Allowance for Loan Losses 1,546 1,900
Warehouse lending    
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses 589 608
Charge-offs 0 0
Recoveries 0 0
Net Charge-offs 0 0
Provision (69) 251
Ending Allowance for Loan Losses 520 859
Factored receivables    
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses 1,457 1,205
Charge-offs (81) (72)
Recoveries 24 19
Net Charge-offs (57) (53)
Provision 7 20
Ending Allowance for Loan Losses 1,407 1,172
Equipment financing    
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses 4,925 2,569
Charge-offs (457) (153)
Recoveries 108 172
Net Charge-offs (349) 19
Provision 817 103
Ending Allowance for Loan Losses 5,393 2,691
Commercial real estate    
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses 13,861 10,121
Charge-offs (4) (62)
Recoveries 21 16
Net Charge-offs 17 (46)
Provision 1,892 1,018
Ending Allowance for Loan Losses 15,770 11,093
Multi-family    
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses 2,741 2,111
Charge-offs 0 (17)
Recoveries 2 0
Net Charge-offs 2 (17)
Provision 253 196
Ending Allowance for Loan Losses 2,996 2,290
ADC    
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses 2,009 2,987
Charge-offs 0 0
Recoveries 0 9
Net Charge-offs 0 9
Provision 148 (280)
Ending Allowance for Loan Losses 2,157 2,716
Residential mortgage    
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses 5,007 5,843
Charge-offs (224) (181)
Recoveries 28 2
Net Charge-offs (196) (179)
Provision 39 (537)
Ending Allowance for Loan Losses 4,850 5,127
Consumer    
Summary of activity in allowance for loan losses and recorded investments in loans by portfolio segment based on impairment method    
Beginning Allowance for loan losses 4,358 4,397
Charge-offs (511) (342)
Recoveries 119 52
Net Charge-offs (392) (290)
Provision 140 243
Ending Allowance for Loan Losses $ 4,106 $ 4,350

v3.4.0.3
Allowance for Loan Losses - Valuation Allowances Recorded Against Portfolio Loans (Details) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Mar. 31, 2015
Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses $ 53,014 $ 50,145 $ 42,884 $ 42,374
Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 6,397,290 6,083,306    
Allowance for loan losses $ 53,014 $ 50,145    
As a percent of loans 0.83% 0.82%    
Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks $ 1,888,873 $ 1,776,054    
Remaining purchase accounting mark $ 44,402 $ 41,383    
As a percent of acquired loans 2.35% 2.33%    
Total loans $ 8,286,163 $ 7,859,579    
Allowance for loan losses 97,416 91,528    
C&I        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses 14,269 13,262 10,686 11,027
C&I | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 1,413,493 1,397,792    
C&I | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 590,346 283,912    
Payroll finance        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses 1,546 1,936 1,900 1,506
Payroll finance | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 199,119 221,831    
Factored receivables        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses 1,407 1,457 1,172 1,205
Factored receivables | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 215,015 208,382    
Equipment financing        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses 5,393 4,925 2,691 2,569
Equipment financing | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 560,380 514,418    
Equipment financing | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 96,395 116,885    
Commercial real estate        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses 15,770 13,861 11,093 10,121
Warehouse lending        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses 520 589 859 608
Warehouse lending | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 341,790 387,808    
Commercial Real Estate | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 2,192,690 2,036,103    
Commercial Real Estate | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 597,455 697,248    
Multi-family        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses 2,996 2,741 2,290 2,111
Multi-family | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 675,842 552,155    
Multi-family | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 210,227 243,875    
ADC        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses 2,157 2,009 2,716 2,987
ADC | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 149,104 127,363    
ADC | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 30,413 59,035    
Residential mortgage | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 446,996 433,928    
Residential mortgage | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 271,737 279,108    
Consumer        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses 4,106 4,358 4,350 4,397
Consumer | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 202,861 203,526    
Consumer | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 92,300 95,991    
Residential mortgage        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Allowance for loan losses 4,850 5,007 $ 5,127 $ 5,843
Pass | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 6,280,924 5,972,202    
Allowance for loan losses $ 47,994 $ 43,925    
As a percent of loans 0.76% 0.74%    
Pass | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks $ 1,771,204 $ 1,688,777    
Remaining purchase accounting mark $ 40,085 $ 37,351    
As a percent of acquired loans 2.26% 2.21%    
Total loans $ 8,052,128 $ 7,661,198    
Allowance for loan losses 88,079 81,276    
Pass | C&I | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 1,370,429 1,356,685    
Pass | C&I | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 541,296 267,541    
Pass | Payroll finance | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 198,903 221,735    
Pass | Factored receivables | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 213,471 206,814    
Pass | Equipment financing | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 555,626 512,314    
Pass | Equipment financing | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 96,395 116,885    
Pass | Warehouse lending | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 341,790 387,808    
Pass | Commercial Real Estate | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 2,160,764 2,002,638    
Pass | Commercial Real Estate | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 550,133 645,951    
Pass | Multi-family | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 672,382 550,438    
Pass | Multi-family | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 201,332 237,948    
Pass | ADC | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 140,110 118,552    
Pass | ADC | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 24,116 52,775    
Pass | Residential mortgage | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 433,516 419,534    
Pass | Residential mortgage | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 265,632 272,336    
Pass | Consumer | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 193,933 195,684    
Pass | Consumer | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 92,300 95,341    
Special mention        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 101,559 68,003    
Special mention | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 27,083 23,741    
Allowance for loan losses $ 829 $ 884    
As a percent of loans 3.06% 3.72%    
Special mention | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks $ 74,476 $ 44,262    
Remaining purchase accounting mark $ 2,380 $ 1,649    
As a percent of acquired loans 3.20% 3.73%    
Total loans $ 101,559 $ 68,003    
Allowance for loan losses 3,209 2,533    
Special mention | C&I        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 52,527 20,765    
Special mention | C&I | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 12,396 11,041    
Special mention | C&I | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 40,131 9,724    
Special mention | Payroll finance        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 159 0    
Special mention | Payroll finance | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 159 0    
Special mention | Factored receivables        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Special mention | Factored receivables | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Special mention | Equipment financing        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 1,794 460    
Special mention | Equipment financing | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 1,794 460    
Special mention | Equipment financing | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Special mention | Commercial real estate        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 30,959 32,472    
Special mention | Warehouse lending | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Special mention | Commercial Real Estate | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 8,009 9,361    
Special mention | Commercial Real Estate | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 22,950 23,111    
Special mention | Multi-family        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 7,658 5,927    
Special mention | Multi-family | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 1,763 0    
Special mention | Multi-family | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 5,895 5,927    
Special mention | ADC        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 7,168 7,075    
Special mention | ADC | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 1,668 1,575    
Special mention | ADC | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 5,500 5,500    
Special mention | Residential mortgage | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 684 897    
Special mention | Residential mortgage | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Special mention | Consumer | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 610 407    
Special mention | Consumer | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Special mention | Residential mortgage        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 684 897    
Special mention | Consumer        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 610 407    
Substandard        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 131,919 129,665    
Substandard | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 88,727 86,650    
Allowance for loan losses $ 3,774 $ 4,801    
As a percent of loans 4.25% 5.54%    
Substandard | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks $ 43,193 $ 43,015    
Remaining purchase accounting mark $ 1,937 $ 2,383    
As a percent of acquired loans 4.48% 5.54%    
Total loans $ 131,920 $ 129,665    
Allowance for loan losses 5,711 7,184    
Substandard | C&I        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 39,060 36,268    
Substandard | C&I | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 30,141 29,621    
Substandard | C&I | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 8,919 6,647    
Substandard | Payroll finance        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 57 96    
Substandard | Payroll finance | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 57 96    
Substandard | Factored receivables        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 1,544 1,568    
Substandard | Factored receivables | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 1,544 1,568    
Substandard | Equipment financing        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 2,960 1,644    
Substandard | Equipment financing | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 2,960 1,644    
Substandard | Equipment financing | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Substandard | Commercial real estate        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 48,288 52,290    
Substandard | Warehouse lending | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Substandard | Commercial Real Estate | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 23,917 24,104    
Substandard | Commercial Real Estate | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 24,372 28,186    
Substandard | Multi-family        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 4,697 1,717    
Substandard | Multi-family | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 1,697 1,717    
Substandard | Multi-family | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 3,000 0    
Substandard | ADC        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 8,123 7,996    
Substandard | ADC | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 7,326 7,236    
Substandard | ADC | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 797 760    
Substandard | Residential mortgage | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 12,796 13,497    
Substandard | Residential mortgage | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 6,105 6,772    
Substandard | Consumer | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 8,289 7,167    
Substandard | Consumer | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 650    
Substandard | Residential mortgage        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 18,901 20,269    
Substandard | Consumer        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 8,289 7,817    
Doubtful        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 556 713    
Doubtful | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 556 713    
Allowance for loan losses $ 417 $ 535    
As a percent of loans 75.00% 75.04%    
Doubtful | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks $ 0 $ 0    
Remaining purchase accounting mark $ 0 $ 0    
As a percent of acquired loans 0.00% 0.00%    
Total loans $ 556 $ 713    
Allowance for loan losses 417 535    
Doubtful | C&I        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 527 445    
Doubtful | C&I | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 527 445    
Doubtful | C&I | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Doubtful | Payroll finance        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Payroll finance | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Factored receivables        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Factored receivables | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Equipment financing        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Equipment financing | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Equipment financing | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Doubtful | Commercial real estate        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Warehouse lending | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Commercial Real Estate | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Commercial Real Estate | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Doubtful | Multi-family        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Multi-family | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Multi-family | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Doubtful | ADC        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | ADC | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | ADC | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Doubtful | Residential mortgage | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Residential mortgage | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Doubtful | Consumer | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 29 268    
Doubtful | Consumer | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Doubtful | Residential mortgage        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Doubtful | Consumer        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 29 268    
Loss | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Allowance for loan losses $ 0 $ 0    
As a percent of loans 0.00% 0.00%    
Loss | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks $ 0 $ 0    
Remaining purchase accounting mark $ 0 $ 0    
As a percent of acquired loans 0.00% 0.00%    
Total loans $ 0 $ 0    
Allowance for loan losses 0 0    
Loss | C&I | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Loss | C&I | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Loss | Payroll finance | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Loss | Factored receivables | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Loss | Equipment financing | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Loss | Equipment financing | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Loss | Warehouse lending | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Loss | Commercial Real Estate | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Loss | Commercial Real Estate | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Loss | Multi-family | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Loss | Multi-family | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Loss | ADC | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Loss | ADC | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Loss | Residential mortgage | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Loss | Residential mortgage | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks 0 0    
Loss | Consumer | Originated        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans 0 0    
Loss | Consumer | Acquired        
Financing Receivable, Allowance for Credit Losses [Line Items]        
Total loans subject to purchase accounting marks $ 0 $ 0    

v3.4.0.3
Allowance for Loan Losses - Additional Information (Details) - USD ($)
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Receivables [Abstract]    
Maximum loan balance for credit risk to be evaluated on a homogeneous basis $ 500,000  
Loss    
Financing Receivable, Allowance for Credit Losses [Line Items]    
Gross loans by segment $ 0 $ 0

v3.4.0.3
Goodwill and Other Intangible Assets (Details) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]    
Goodwill $ 696,600 $ 670,699
Finite-Lived Intangible Assets [Line Items]    
Core deposits and other intangibles 75,790 77,367
Core deposits    
Finite-Lived Intangible Assets [Line Items]    
Core deposits and other intangibles 43,709 45,794
Customer lists    
Finite-Lived Intangible Assets [Line Items]    
Core deposits and other intangibles 9,156 7,959
Non-compete agreements    
Finite-Lived Intangible Assets [Line Items]    
Core deposits and other intangibles 2,260 2,925
Trade name    
Finite-Lived Intangible Assets [Line Items]    
Core deposits and other intangibles 20,500 20,500
Fair value of below market leases    
Finite-Lived Intangible Assets [Line Items]    
Core deposits and other intangibles $ 165 $ 189

v3.4.0.3
Goodwill and Other Intangible Assets (Details 1)
$ in Thousands
Mar. 31, 2016
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Remainder of 2016 $ 9,438
2017 8,838
2018 7,285
2019 6,074
2020 5,428
2021 5,022
Thereafter 13,205
Total $ 55,290

v3.4.0.3
Deposits (Details) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Deposits [Abstract]    
Non-interest bearing demand $ 3,027,471 $ 2,936,981
Interest bearing demand 1,818,131 1,274,417
Savings 771,961 943,632
Money market 3,046,634 2,819,788
Certificates of deposit 664,425 605,189
Total deposits $ 9,328,622 $ 8,580,007

v3.4.0.3
Deposits (Details 1) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
List of Company's Brokered deposits    
Brokered deposits $ 405,969 $ 428,765
Money market    
List of Company's Brokered deposits    
Brokered deposits 219,305 258,007
Reciprocal CDAR's    
List of Company's Brokered deposits    
Brokered deposits 96,962 64,131
CDARs one way    
List of Company's Brokered deposits    
Brokered deposits $ 89,702 $ 106,627

v3.4.0.3
Deposits (Details Textual) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Deposits [Abstract]    
Municipal deposits $ 1,285,263 $ 1,140,206

v3.4.0.3
Borrowings (Details) - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Jul. 02, 2013
By period to maturity:      
Less than one year, Amount $ 1,061,219,000 $ 999,222,000  
Less than one year, Rate 0.67% 0.69%  
One to two years, Amount $ 145,000,000 $ 295,000,000  
One to two years, Rate 1.13% 3.19%  
Two to three years, Amount $ 258,996,000 $ 228,893,000  
Two to three years, Rate 3.17% 3.57%  
Three to four years, Amount $ 50,000,000 $ 0  
Three to four years, Rate 1.38% 0.00%  
Four to five years, Amount $ 50,000,000 $ 0  
Four to five years, Rate 1.68% 0.00%  
Greater than five years, Amount $ 110,293,000 $ 2,229,000  
Greater than five years, Rate 5.46% 4.92%  
Total borrowings, Amount $ 1,675,508,000 $ 1,525,344,000  
Total borrowings, Rate 1.46% 1.61%  
FHLB Borrowings      
By period to maturity:      
Total borrowings, Amount $ 1,444,817,000 $ 1,409,885,000  
Total borrowings, Rate 0.87% 1.32%  
Repurchase Agreements      
By period to maturity:      
Total borrowings, Amount $ 23,571,000 $ 16,566,000  
Total borrowings, Rate 0.57% 0.55%  
Senior Notes      
By period to maturity:      
Total borrowings, Amount $ 98,996,000 $ 98,893,000 $ 100,000,000
Total borrowings, Rate 5.98% 5.98%  
Subordinated notes      
By period to maturity:      
Total borrowings, Amount $ 108,124,000 $ 0  
Total borrowings, Rate 5.47% 0.00%  

v3.4.0.3
Borrowings (Details Textual) - USD ($)
3 Months Ended 12 Months Ended
Mar. 29, 2016
Jul. 02, 2013
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Debt Instrument [Line Items]          
Bank pledged mortgages     $ 2,205,834,000   $ 2,050,982,000
Increased borrowing capacity by pledging securities     1,005,295,000    
Federal home loan bank borrowings     $ 200,000,000    
Long term debt weighted average remaining term         1 year 3 months 21 days
Weighted average interest rates     4.23%    
Charge on extinguishment of debt     $ (8,716,000) $ 0  
Long-term debt     $ 1,675,508,000   $ 1,525,344,000
Private placement discount rate   1.75%      
Interest expense cost over the life of Senior note     5.98%    
Minimum          
Debt Instrument [Line Items]          
Repurchase agreements maturity     1 day   1 day
Maximum          
Debt Instrument [Line Items]          
Repurchase agreements maturity     45 days   45 days
FHLB Borrowings          
Debt Instrument [Line Items]          
Unused borrowing capacity     $ 963,416,000    
Long-term debt     1,444,817,000   $ 1,409,885,000
Other Borrowings          
Debt Instrument [Line Items]          
Repayment of debt     $ 20,000,000    
Interest rate     3.57%    
Senior Notes          
Debt Instrument [Line Items]          
Long-term debt   $ 100,000,000 $ 98,996,000   98,893,000
Fixed interest rate (percent)   5.50%      
Cost of issuance   $ 303,000      
Unamortized discount     1,004,000   1,107,000
Subordinated notes          
Debt Instrument [Line Items]          
Interest rate 5.25%        
Long-term debt     108,124,000   0
Private placement discount rate 1.25%        
Cost of issuance $ 500,000        
Unamortized discount     1,876,000    
Principal amount $ 110,000,000        
Effective yield 5.47%        
Subordinated notes | Three-month LIBOR          
Debt Instrument [Line Items]          
Basis spread on one-month LIBOR 3.937%        
Line of Credit | Revolving Credit Facility          
Debt Instrument [Line Items]          
Revolving line of credit amount     15,000,000    
Revolving line of credit balance     0   $ 0
Required balance     $ 0    
Duration of minimum outstanding balance     30 days    
Line of Credit | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility          
Debt Instrument [Line Items]          
Basis spread on one-month LIBOR     1.25%    

v3.4.0.3
Derivatives (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
3rd party interest rate swap    
Summary of derivatives    
Notional amount $ 116,032 $ 87,094
Average maturity (in years) 5 years 7 months 20 days 5 years 5 months 8 days
Weighted average fixed rate 3.96% 4.09%
Fair value $ 4,323 $ 1,839
3rd party interest rate swap | One Month Libor    
Summary of derivatives    
Basis spread 2.19% 2.15%
Customer interest rate swap    
Summary of derivatives    
Notional amount $ 116,032 $ 87,094
Average maturity (in years) 5 years 7 months 20 days 5 years 5 months 8 days
Weighted average fixed rate 3.96% 4.09%
Fair value $ (4,323) $ (1,839)
Customer interest rate swap | One Month Libor    
Summary of derivatives    
Basis spread 2.19% 2.15%

v3.4.0.3
Derivatives (Details Textual)
$ in Thousands
Mar. 31, 2016
USD ($)
Derivative Instruments and Hedges, Assets [Abstract]  
Fair value of investment securities pledged as collateral $ 4,323

v3.4.0.3
Income Taxes (Details) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Efftective tax rate reconciliation:      
Income before income tax expense $ 36,009,000 $ 24,856,000  
Federal statutory rate 35.00% 35.00%  
Tax at Federal statutory rate of 35% $ 12,603,000 $ 8,700,000  
State and local income taxes, net of Federal tax benefit 1,993,000 875,000  
Tax-exempt interest, net of disallowed interest (1,834,000) (984,000)  
Bank owned life insurance income (445,000) (251,000)  
Non-deductible acquisition related costs 0 140,000  
Low income housing tax credits (54,000) (54,000)  
Other, net (20,000) (348,000)  
Actual income tax expense $ 12,243,000 $ 8,078,000  
Effective income tax rate 34.00% 32.50%  
Components of deferred tax assets and liabilities:      
Net deferred tax asset $ 16,065,000   $ 31,079,000
Valuation allowance $ 0    

v3.4.0.3
Stock-Based Compensation - Stock-based Compensation Activity (Details) - $ / shares
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
May. 28, 2015
Shares available for grant (in shares)      
Beginning balance 4,125,665    
Granted (483,574)    
Stock awards vested 0    
Forfeited 48,646    
Canceled/expired (48,646)    
Ending balance 3,642,091    
Stock options outstanding - Number of shares      
Beginning balance 1,586,572    
Granted 0 15,000  
Exercised (79,031)    
Forfeited (32,312)    
Canceled/expired 0    
Ending balance 1,475,229    
Exercisable at March 31, 2016 1,099,791    
Stock options outstanding - Weighted average exercise price (USD per share)      
Beginning balance $ 10.95    
Granted 0.00    
Exercised 9.33    
Forfeited 13.08    
Canceled/expired 0.00    
Ending balance 10.99    
Exercisable at March 31, 2016 $ 10.35    
Non-vested stock awards/performance units      
Non-vested stock awards/stock units outstanding - Number of shares      
Beginning balance 726,800    
Granted 483,574    
Stock awards vested (32,623)    
Forfeited (4,650)    
Ending balance 1,173,101    
Non-vested stock awards/stock units outstanding - Weighted average grant date fair value (USD per share)      
Beginning balance $ 13.36    
Granted 14.21    
Stock awards vested 0.00    
Forfeited 13.00    
Ending balance $ 14.08    
2015 Plan      
Shares available for grant (in shares)      
2015 Plan     2,800,000

v3.4.0.3
Stock-Based Compensation - Assumptions (Details) - Stock options - 2011 Employment Inducement Stock Program
3 Months Ended
Mar. 31, 2015
Fair value of options granted determined using weighted-average assumptions as grant date  
Risk-free interest rate 1.90%
Expected stock price volatility 20.90%
Dividend yield 3.10%
Expected term in years 5 years 9 months 3 days

v3.4.0.3
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]    
Stock-based compensation expense $ 1,540 $ 1,109
Stock-based compensation expense, income tax benefit 524 377
Proceeds from stock option exercises 546 2,758
Unrecognized stock-based compensation, stock options 503  
Unrecognized stock-based compensation, non-vested stock awards/performance units 12,848  
Total unrecognized stock-based compensation expense 13,351  
Stock options    
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]    
Stock-based compensation expense 126 281
Non-vested stock awards/performance units    
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]    
Stock-based compensation expense $ 1,414 $ 828

v3.4.0.3
Stock-Based Compensation (Details Textual)
$ / shares in Units, $ in Thousands
1 Months Ended 3 Months Ended
Feb. 28, 2010
vesting_installment
Mar. 31, 2016
USD ($)
$ / shares
shares
Mar. 31, 2015
$ / shares
shares
Dec. 31, 2015
shares
May. 28, 2015
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares remaining that are authorized and available for future grant   3,642,091   4,125,665  
Grant of share options (in shares)   0 15,000    
Exercise price (USD per share) | $ / shares   $ 0.00      
Intrinsic value of options outstanding | $   $ 7,289      
Intrinsic value of options exercisable | $   $ 6,137      
Maximum | Sterling Bancorp (Legacy)          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period for awards   3 years      
Fully Vested legacy Sterling options | Sterling Bancorp (Legacy)          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Grant of share options (in shares)   104,152      
Stock options          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Term of contract   10 years      
Weighted-average period total unrecognized compensation cost related to non-vested shares granted   1 year 4 months 1 day      
Stock options | Stock Compensation Grants associated with legacy Sterling Merger          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Exercise price (USD per share) | $ / shares   $ 14.25      
Stock options | Minimum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period for awards   1 year      
Stock options | Maximum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period for awards   5 years      
Restricted Stock Units (RSUs) | Stock Compensation Grants associated with legacy Sterling Merger          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Weighted average grant date fair value (USD per share) | $ / shares   $ 11.72      
Non-vested stock awards/performance units          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Grants in period, other than options (in shares)   483,574      
Weighted average grant date fair value (USD per share) | $ / shares   $ 14.21      
Weighted-average period total unrecognized compensation cost related to non-vested shares granted   2 years 3 months 15 days      
2015 Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Number of shares authorized         2,800,000
Number of shares granted for each share received   1      
2011 Employment Inducement Stock Program          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Grant of share options (in shares)   107,526      
Weighted average fair value of options granted (USD per share) | $ / shares     $ 2.08    
Sterling Bancorp 2013 Employment Inducement Award Plan | Sterling Bancorp (Legacy)          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Grant of share options (in shares)   95,991      
Restricted Stock          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Grant of share options (in shares)   29,550      
2011 Employee Inducement Stock Program | Restricted Stock          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Number of installments | vesting_installment 4        
2011 Employee Inducement Stock Program | Common Stock [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Number of installments | vesting_installment 4        
Prior Plan | Restricted Stock Units (RSUs) | Sterling Bancorp (Legacy)          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Grants in period, other than options (in shares)   255,973      

v3.4.0.3
Pension and Other Post Retirement Plans - Net Pension and Post-retirement Expense (Details) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Pension Plans    
Defined Benefit Plan Disclosure [Line Items]    
Service cost $ 0 $ 0
Interest cost 0 589,000
Expected return on plan assets 0 (729,000)
Net amortization and deferral 0 91,000
Total pension expense (benefit) and other post-retirement expense 0 (49,000)
Other Post retirement Benefit Plans    
Defined Benefit Plan Disclosure [Line Items]    
Service cost 0 2,000
Interest cost 104,000 94,000
Expected return on plan assets 0 0
Net amortization and deferral 12,000 40,000
Total pension expense (benefit) and other post-retirement expense $ 116,000 $ 136,000

v3.4.0.3
Pension and Other Post Retirement Plans (Details Textual) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Pension Plans      
Defined Benefit Plan Disclosure [Line Items]      
Pension plan expense $ 0 $ (49,000)  
Pension Plans | Minimum      
Defined Benefit Plan Disclosure [Line Items]      
Remaining reversion asset, recognition period 5 years    
Pension Plans | Maximum      
Defined Benefit Plan Disclosure [Line Items]      
Remaining reversion asset, recognition period 7 years    
Pension Plans | Other Assets      
Defined Benefit Plan Disclosure [Line Items]      
Remaining reversion asset $ 11,642,000   $ 11,442,000
Other Post retirement Benefit Plans      
Defined Benefit Plan Disclosure [Line Items]      
Pension plan expense 116,000 136,000  
Employer contributions to fund SERP 30,000 $ 26,000  
Other Post retirement Benefit Plans | Other Liabilities      
Defined Benefit Plan Disclosure [Line Items]      
Total post retirement plan liabilities $ 11,819,000   $ 11,733,000

v3.4.0.3
Other Non-interest Expense (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Other Income and Expenses [Abstract]    
Professional fees $ 2,471 $ 1,915
Data and check processing 1,754 2,148
Insurance & surety bond premium 785 648
Charge for asset write-downs 2,485 0
Other 5,720 5,111
Total other non-interest expense $ 13,215 $ 9,822

v3.4.0.3
Earnings Per Common Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Computation of basic and diluted earnings per share:    
Net income $ 23,766 $ 16,778
Weighted average common shares outstanding for computation of basic EPS 129,974,025 87,839,029
Common-equivalent shares due to the dilutive effect of stock options and unvested performance share grants 526,950 413,739
Weighted average common shares for computation of diluted EPS 130,500,975 88,252,768
Basic (loss) earnings per common share (USD per share) $ 0.18 $ 0.19
Diluted (loss) earnings per common share (USD per share) $ 0.18 $ 0.19
Weighted average common shares that could be exercised that were anti-dilutive for the period 0 112,891

v3.4.0.3
Stockholders' Equity - Compliance with Regulatory Capital Requirements (Schedule) (Details) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Sterling National Bank    
Common equity tier 1 to RWA:    
Tier 1 common equity $ 1,032,118 $ 1,053,527
Tier 1 common equity ratio 10.89% 11.45%
Tier 1 common equity required for minimum capital adequacy, phase-in schedule $ 486,060 $ 413,951
Tier 1 common equity required for minimum capital adequacy ratio, phase-in schedule 5.125% 4.50%
Tier 1 common equity required for minimum capital adequacy, fully phased-in $ 663,240 $ 643,923
Tier 1 common equity required for minimum capital adequacy ratio, phase-in schedule 7.00% 7.00%
Tier 1 common equity required to be well capitalized $ 615,865 $ 597,929
Tier 1 common equity required to be well capitalized ratio 6.50% 6.50%
Tier 1 capital to RWA:    
Tier 1 risk-based capital $ 1,032,118 $ 1,053,527
Tier 1 risk-based capital ratio 10.89% 11.45%
Tier 1 risk-based capital required for minimum capital adequacy, phase-in schedule $ 628,183 $ 551,934
Tier 1 risk-based capital required for minimum capital adequacy ratio, phase-in schedule 6.625% 6.00%
Tier 1 risk-based capital required for minimum capital adequacy, fully phased-in $ 805,362 $ 781,907
Tier 1 risk-based capital required for minimum capital adequacy, fully phased-in 8.50% 8.50%
Tier 1 risk-based capital required to be well capitalized $ 757,988 $ 735,912
Tier 1 risk-based capital required to be well capitalized ratio 8.00% 8.00%
Total capital to RWA:    
Total risk-based capital $ 1,193,805 $ 1,104,221
Total risk-based capital ratio 12.60% 12.00%
Total risk-based capital required for minimum capital adequacy, phase-in schedule $ 817,680 $ 735,912
Total risk-based capital required for minimum capital adequacy ratio, phase-in schedule 8.625% 8.00%
Total risk-based capital required for minimum capital adequacy, fully phased-in $ 994,859 $ 965,885
Total risk-based capital required for minimum capital adequacy ratio, fully phased-in 10.50% 10.50%
Total risk-based capital required to be well capitalized $ 947,485 $ 919,891
Total risk-based capital required to be well capitalized ratio 10.00% 10.00%
Tier 1 leverage ratio:    
Tier 1 (core) capital $ 1,032,118 $ 1,053,527
Tier 1 (core) capital ratio 9.16% 9.65%
Tier 1 (core) capital required for minimum capital adequacy, phase-in schedule $ 450,703 $ 436,678
Tier 1 (core) capital required for minimum capital adequacy ratio, phase-in schedule 4.00% 4.00%
Tier 1 (core) capital required for minimum capital adequacy, fully phased- in $ 450,703 $ 436,678
Tier 1 (core) capital required for minimum capital adequacy ratio, fully phased-in 4.00% 4.00%
Tier 1 (core) capital required to be well capitalized $ 563,379 $ 545,848
Tier 1 (core) capital required to be well capitalized ratio 5.00% 5.00%
Sterling Bancorp    
Common equity tier 1 to RWA:    
Tier 1 common equity $ 970,224 $ 988,174
Tier 1 common equity ratio 10.24% 10.74%
Tier 1 common equity required for minimum capital adequacy, phase-in schedule $ 486,244 $ 414,047
Tier 1 common equity required for minimum capital adequacy ratio, phase-in schedule 5.125% 4.50%
Tier 1 common equity required for minimum capital adequacy, fully phased-in $ 663,492 $ 644,073
Tier 1 common equity required for minimum capital adequacy ratio, phase-in schedule 7.00% 7.00%
Tier 1 capital to RWA:    
Tier 1 risk-based capital $ 970,224 $ 988,174
Tier 1 risk-based capital ratio 10.24% 10.74%
Tier 1 risk-based capital required for minimum capital adequacy, phase-in schedule $ 628,421 $ 552,063
Tier 1 risk-based capital required for minimum capital adequacy ratio, phase-in schedule 6.625% 6.00%
Tier 1 risk-based capital required for minimum capital adequacy, fully phased-in $ 805,668 $ 782,089
Tier 1 risk-based capital required for minimum capital adequacy, fully phased-in 8.50% 8.50%
Total capital to RWA:    
Total risk-based capital $ 1,119,448 $ 1,038,868
Total risk-based capital ratio 11.81% 11.29%
Total risk-based capital required for minimum capital adequacy, phase-in schedule $ 817,990 $ 736,084
Total risk-based capital required for minimum capital adequacy ratio, phase-in schedule 8.625% 8.00%
Total risk-based capital required for minimum capital adequacy, fully phased-in $ 995,237 $ 966,110
Total risk-based capital required for minimum capital adequacy ratio, fully phased-in 10.50% 10.50%
Tier 1 leverage ratio:    
Tier 1 (core) capital $ 970,224 $ 988,174
Tier 1 (core) capital ratio 8.60% 9.03%
Tier 1 (core) capital required for minimum capital adequacy, phase-in schedule $ 451,378 $ 437,629
Tier 1 (core) capital required for minimum capital adequacy ratio, phase-in schedule 4.00% 4.00%
Tier 1 (core) capital required for minimum capital adequacy, fully phased- in $ 451,378 $ 437,629
Tier 1 (core) capital required for minimum capital adequacy ratio, fully phased-in 4.00% 4.00%

v3.4.0.3
Stockholders' Equity (Narrative) (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Jun. 30, 2015
Feb. 11, 2015
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Class of Stock [Line Items]          
Aggregate dividend capacity without prior regulatory approval     $ 66,516    
Capital raise, shares   6,900,000   6,900,000  
Capital raise, price per share (USD per share)   $ 13.00      
Total proceeds from public offering   $ 89,700 $ 0 $ 85,059  
Net proceeds from public offering   $ 85,059      
Shares available for repurchase program     7,767.13    
HVB Merger          
Class of Stock [Line Items]          
Common stock issued in HVB Merger, shares 38,525,154        
Increase in stockholders' equity $ 563,613        
Sterling Bancorp          
Class of Stock [Line Items]          
Shares repurchased under repurchase program     0 0  
Sterling National Bank          
Class of Stock [Line Items]          
Tier 1 (core) capital required for minimum capital adequacy, fully phased- in     $ 450,703   $ 436,678
Liquidation account     13,300    
Subordinated notes          
Class of Stock [Line Items]          
Tier 2 capital     95,661    
Subordinated notes | Sterling National Bank          
Class of Stock [Line Items]          
Tier 1 (core) capital required for minimum capital adequacy, fully phased- in     $ 108,124    

v3.4.0.3
Commitment and Contingencies (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]      
Rent expense $ 3,522 $ 1,577  
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]      
Remainder of 2016 8,618    
2017 10,724    
2018 9,546    
2019 7,310    
2020 5,955    
2021 5,521    
2022 and thereafter 22,270    
Total future minimum payments 69,944    
Loan origination commitments      
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]      
Lending-related instruments 234,023   $ 269,636
Unused lines of credit      
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]      
Lending-related instruments 749,028   660,915
Letters of credit      
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]      
Lending-related instruments $ 114,969   $ 102,930

v3.4.0.3
Fair Value Measurements (Details 1) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Other securities:    
Securities available for sale $ 1,894,820 $ 1,921,032
Quoted Prices in Active markets for Identical Assets Level 1    
Other securities:    
Securities available for sale 0 0
Swaps 0 0
Swaps 0 0
Significant Other Observable Inputs Level 2    
Other securities:    
Securities available for sale 1,894,820 1,921,032
Swaps 4,323 1,839
Swaps 4,323 1,839
Significant Unobservable Inputs Level 3    
Other securities:    
Securities available for sale 0 0
Swaps 0 0
Swaps 0 0
Fair Value, Measurements, Recurring    
Residential MBS:    
Mortgage-backed securities-residential 1,491,623 1,296,235
Other securities:    
Total investment securities available for sale 403,197 624,797
Securities available for sale 1,894,820 1,921,032
Swaps 4,323 1,839
Total assets 1,899,143 1,922,871
Swaps 4,323 1,839
Total liabilities 4,323 1,839
Fair Value, Measurements, Recurring | Agency-backed    
Residential MBS:    
Mortgage-backed securities-residential 1,416,951 1,217,862
Fair Value, Measurements, Recurring | CMO/Other MBS    
Residential MBS:    
Mortgage-backed securities-residential 74,672 78,373
Fair Value, Measurements, Recurring | Federal agencies    
Other securities:    
Total investment securities available for sale 83,710 84,267
Fair Value, Measurements, Recurring | Corporate bonds    
Other securities:    
Total investment securities available for sale 87,179 314,188
Fair Value, Measurements, Recurring | State and municipal    
Other securities:    
Total investment securities available for sale 223,517 189,035
Fair Value, Measurements, Recurring | Trust preferred    
Other securities:    
Total investment securities available for sale   28,517
Fair Value, Measurements, Recurring | Other    
Other securities:    
Total investment securities available for sale 8,791 8,790
Fair Value, Measurements, Recurring | Quoted Prices in Active markets for Identical Assets Level 1    
Residential MBS:    
Mortgage-backed securities-residential 0 0
Other securities:    
Total investment securities available for sale 0 0
Securities available for sale 0 0
Swaps 0 0
Total assets 0 0
Swaps 0 0
Total liabilities 0 0
Fair Value, Measurements, Recurring | Quoted Prices in Active markets for Identical Assets Level 1 | Agency-backed    
Residential MBS:    
Mortgage-backed securities-residential 0 0
Fair Value, Measurements, Recurring | Quoted Prices in Active markets for Identical Assets Level 1 | CMO/Other MBS    
Residential MBS:    
Mortgage-backed securities-residential 0 0
Fair Value, Measurements, Recurring | Quoted Prices in Active markets for Identical Assets Level 1 | Federal agencies    
Other securities:    
Total investment securities available for sale 0 0
Fair Value, Measurements, Recurring | Quoted Prices in Active markets for Identical Assets Level 1 | Corporate bonds    
Other securities:    
Total investment securities available for sale 0 0
Fair Value, Measurements, Recurring | Quoted Prices in Active markets for Identical Assets Level 1 | State and municipal    
Other securities:    
Total investment securities available for sale 0 0
Fair Value, Measurements, Recurring | Quoted Prices in Active markets for Identical Assets Level 1 | Trust preferred    
Other securities:    
Total investment securities available for sale   0
Fair Value, Measurements, Recurring | Quoted Prices in Active markets for Identical Assets Level 1 | Other    
Other securities:    
Total investment securities available for sale 0 0
Fair Value, Measurements, Recurring | Significant Other Observable Inputs Level 2    
Residential MBS:    
Mortgage-backed securities-residential 1,491,623 1,296,235
Other securities:    
Total investment securities available for sale 403,197 624,797
Securities available for sale 1,894,820 1,921,032
Swaps 4,323 1,839
Total assets 1,899,143 1,922,871
Swaps 4,323 1,839
Total liabilities 4,323 1,839
Fair Value, Measurements, Recurring | Significant Other Observable Inputs Level 2 | Agency-backed    
Residential MBS:    
Mortgage-backed securities-residential 1,416,951 1,217,862
Fair Value, Measurements, Recurring | Significant Other Observable Inputs Level 2 | CMO/Other MBS    
Residential MBS:    
Mortgage-backed securities-residential 74,672 78,373
Fair Value, Measurements, Recurring | Significant Other Observable Inputs Level 2 | Federal agencies    
Other securities:    
Total investment securities available for sale 83,710 84,267
Fair Value, Measurements, Recurring | Significant Other Observable Inputs Level 2 | Corporate bonds    
Other securities:    
Total investment securities available for sale 87,179 314,188
Fair Value, Measurements, Recurring | Significant Other Observable Inputs Level 2 | State and municipal    
Other securities:    
Total investment securities available for sale 223,517 189,035
Fair Value, Measurements, Recurring | Significant Other Observable Inputs Level 2 | Trust preferred    
Other securities:    
Total investment securities available for sale   28,517
Fair Value, Measurements, Recurring | Significant Other Observable Inputs Level 2 | Other    
Other securities:    
Total investment securities available for sale 8,791 8,790
Fair Value, Measurements, Recurring | Significant Unobservable Inputs Level 3    
Residential MBS:    
Mortgage-backed securities-residential 0 0
Other securities:    
Total investment securities available for sale 0 0
Securities available for sale 0 0
Swaps 0 0
Total assets 0 0
Swaps 0 0
Total liabilities 0 0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs Level 3 | Agency-backed    
Residential MBS:    
Mortgage-backed securities-residential 0 0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs Level 3 | CMO/Other MBS    
Residential MBS:    
Mortgage-backed securities-residential 0 0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs Level 3 | Federal agencies    
Other securities:    
Total investment securities available for sale 0 0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs Level 3 | Corporate bonds    
Other securities:    
Total investment securities available for sale 0 0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs Level 3 | State and municipal    
Other securities:    
Total investment securities available for sale 0 0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs Level 3 | Trust preferred    
Other securities:    
Total investment securities available for sale   0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs Level 3 | Other    
Other securities:    
Total investment securities available for sale $ 0 $ 0

v3.4.0.3
Fair Value Measurements (Details 2) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Quoted Prices in Active markets for Identical Assets Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net $ 0 $ 0
Significant Other Observable Inputs Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 0 0
Significant Unobservable Inputs Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 8,290,596 7,876,064
Fair Value, Measurements, Nonrecurring | Impaired    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 3,101 3,218
Fair Value, Measurements, Nonrecurring | Impaired | C&I    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 71  
Fair Value, Measurements, Nonrecurring | Impaired | Commercial Real Estate    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 3,030 3,218
Fair Value, Measurements, Nonrecurring | Impaired | Quoted Prices in Active markets for Identical Assets Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 0 0
Fair Value, Measurements, Nonrecurring | Impaired | Quoted Prices in Active markets for Identical Assets Level 1 | C&I    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 0  
Fair Value, Measurements, Nonrecurring | Impaired | Quoted Prices in Active markets for Identical Assets Level 1 | Commercial Real Estate    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 0 0
Fair Value, Measurements, Nonrecurring | Impaired | Significant Other Observable Inputs Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 0 0
Fair Value, Measurements, Nonrecurring | Impaired | Significant Other Observable Inputs Level 2 | C&I    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 0  
Fair Value, Measurements, Nonrecurring | Impaired | Significant Other Observable Inputs Level 2 | Commercial Real Estate    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 0 0
Fair Value, Measurements, Nonrecurring | Impaired | Significant Unobservable Inputs Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 3,101 3,218
Fair Value, Measurements, Nonrecurring | Impaired | Significant Unobservable Inputs Level 3 | C&I    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net 71  
Fair Value, Measurements, Nonrecurring | Impaired | Significant Unobservable Inputs Level 3 | Commercial Real Estate    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Portfolio loans, net $ 3,030 $ 3,218

v3.4.0.3
Fair Value Measurements (Details 3)
$ in Thousands
3 Months Ended
Mar. 31, 2016
USD ($)
speed
Dec. 31, 2015
USD ($)
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Mortgage servicing rights $ 1,115 $ 1,204
Significant Unobservable Inputs Level 3    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Portfolio loans, net 8,290,596 7,876,064
Fair Value, Measurements, Nonrecurring | Impaired    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Portfolio loans, net 3,101 3,218
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Mortgage Servicing Rights    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Mortgage servicing rights $ 1,115  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Minimum    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Prepayment speed | speed 100  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Minimum | Mortgage Servicing Rights    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Discount rates 8.50%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Maximum    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Prepayment speed | speed 418  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Maximum | Mortgage Servicing Rights    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Discount rates 11.50%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Weighted Average    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Prepayment speed | speed 208  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Weighted Average | Mortgage Servicing Rights    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Discount rates 9.80%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Impaired    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Portfolio loans, net $ 3,101 $ 3,218
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Commercial Real Estate    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Portfolio loans, net 334  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Impaired | C&I    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Portfolio loans, net 71  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Impaired | Commercial Real Estate    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Portfolio loans, net $ 3,030  
Comparability adjustments 22.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Impaired | Minimum | C&I    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 10.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Impaired | Maximum | C&I    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 25.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Impaired | Weighted Average | C&I    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 14.40%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Impaired | Weighted Average | Commercial Real Estate    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Comparability adjustments 22.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Commercial Real Estate    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Portfolio loans, net $ 7,411  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | ADC    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Portfolio loans, net 4,427  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Residential mortgage    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Portfolio loans, net $ 2,355  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Minimum | Commercial Real Estate    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 10.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Minimum | ADC    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 10.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Minimum | Residential mortgage    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 10.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Maximum | Commercial Real Estate    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 22.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Maximum | ADC    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 22.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Maximum | Residential mortgage    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 22.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Weighted Average | Commercial Real Estate    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 22.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Weighted Average | ADC    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 22.00%  
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | Market Approach Valuation Technique | Taken in Foreclosure | Weighted Average | Residential mortgage    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Management adjustments 21.60%  

v3.4.0.3
Fair value Measurements (Details 4) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available for sale $ 1,894,820 $ 1,921,032
Securities held to maturity 973,826 734,079
FHLB borrowings (200,000)  
Senior notes (98,996) (98,893)
Subordinated notes (108,124) 0
Carrying Amount    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents 486,730 229,513
Securities available for sale 1,894,820 1,921,032
Securities held to maturity 952,922 722,791
Portfolio loans, net 8,233,149 7,809,215
Loans held for sale 27,237 34,110
Accrued interest receivable on securities 11,937 11,329
Accrued interest receivable on loans 21,455 20,202
FHLB stock and FRB stock 118,330 116,758
Swaps 4,323 1,839
Non-maturity deposits (8,664,197) (7,974,817)
Certificates of deposit (664,425) (605,190)
FHLB borrowings (1,444,817) (1,409,885)
Other borrowings (23,571) (16,566)
Senior notes (98,996) (98,893)
Subordinated notes (108,124)  
Mortgage escrow funds (14,972) (13,778)
Accrued interest payable on deposits (495) (783)
Accrued interest payable on borrowings (2,376) (4,490)
Swaps (4,323) (1,839)
Fair Value, Inputs, Level 1    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents 486,730 229,513
Securities available for sale 0 0
Securities held to maturity 0 0
Portfolio loans, net 0 0
Loans held for sale 0 0
Accrued interest receivable on securities 0 0
Accrued interest receivable on loans 0 0
FHLB stock and FRB stock 0 0
Swaps 0 0
Non-maturity deposits (8,664,197) (7,974,817)
Certificates of deposit 0 0
FHLB borrowings 0 0
Other borrowings 0 0
Senior notes 0 0
Subordinated notes 0  
Mortgage escrow funds 0 0
Accrued interest payable on deposits 0 0
Accrued interest payable on borrowings 0 0
Swaps 0 0
Significant Other Observable Inputs Level 2    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents 0 0
Securities available for sale 1,894,820 1,921,032
Securities held to maturity 973,826 734,079
Portfolio loans, net 0 0
Loans held for sale 27,237 34,110
Accrued interest receivable on securities 11,937 11,329
Accrued interest receivable on loans 0 0
FHLB stock and FRB stock 0 0
Swaps 4,323 1,839
Non-maturity deposits 0 0
Certificates of deposit (664,670) (603,634)
FHLB borrowings (1,446,146) (1,418,155)
Other borrowings (23,571) (16,430)
Senior notes (104,134) (105,088)
Subordinated notes (109,693)  
Mortgage escrow funds (14,969) (13,775)
Accrued interest payable on deposits (495) (783)
Accrued interest payable on borrowings (2,376) (4,490)
Swaps (4,323) (1,839)
Significant Unobservable Inputs Level 3    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents 0 0
Securities available for sale 0 0
Securities held to maturity 0 0
Portfolio loans, net 8,290,596 7,876,064
Loans held for sale 0 0
Accrued interest receivable on securities 0 0
Accrued interest receivable on loans 21,455 20,202
FHLB stock and FRB stock 0 0
Swaps 0 0
Non-maturity deposits 0 0
Certificates of deposit 0 0
FHLB borrowings 0 0
Other borrowings 0 0
Senior notes 0 0
Subordinated notes 0  
Mortgage escrow funds 0 0
Accrued interest payable on deposits 0 0
Accrued interest payable on borrowings 0 0
Swaps $ 0 $ 0

v3.4.0.3
Fair value measurements (Details Textual) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Changes in fair value recognized on provisions on loans held by the Company $ 0 $ 280,000  
Mortgage servicing rights 1,115,000   $ 1,204,000
Assets taken in foreclosure, defaulted loans and facilities held for sale 14,527,000   $ 14,614,000
Changes in fair value recognized through income for foreclosed assets held by the Company 165,000 0  
Fair Value, Measurements, Recurring      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Portfolio loans, net $ 55,367,000 $ 29,330,000  

v3.4.0.3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Mar. 31, 2015
Dec. 31, 2014
Equity [Abstract]        
Net unrealized holding gain (loss) on available for sale securities $ 15,066 $ (12,172)    
Related income tax (expense) benefit (5,951) 5,173    
Available for sale securities AOCI, net of tax 9,115 (6,999)    
Net unrealized holding loss on securities transferred to held to maturity (6,942) (7,226)    
Related income tax benefit 2,742 3,071    
Securities transferred to held to maturity AOCI, net of tax (4,200) (4,155)    
Net unrealized holding loss on retirement plans (1,250) (1,687)    
Related income tax benefit 494 717    
Retirement plans AOCI, net of tax (756) (970)    
AOCI $ 4,159 $ (12,124) $ (4,739) $ (10,251)

v3.4.0.3
Accumulated Other Comprehensive Income (Loss) (Details 2) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Balance beginning of the period $ (12,124) $ (10,251)
Other comprehensive gain before reclassification 16,285 4,203
Amounts reclassified from AOCI (2) 1,309
Other comprehensive income, net of tax 16,283 5,512
Balance at end of period 4,159 (4,739)
Net unrealized holding gain (loss) on available for sale securities    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Balance beginning of the period (6,999) 1,297
Other comprehensive gain before reclassification 16,285 4,203
Amounts reclassified from AOCI (171) 882
Other comprehensive income, net of tax 16,114 5,085
Balance at end of period 9,115 6,382
Net unrealized holding gain (loss) on securities transferred to held to maturity    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Balance beginning of the period (4,155) (4,967)
Other comprehensive gain before reclassification 0 0
Amounts reclassified from AOCI (45) 310
Other comprehensive income, net of tax (45) 310
Balance at end of period (4,200) (4,657)
Net unrealized holding gain (loss) on retirement plans    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Balance beginning of the period (970) (6,581)
Other comprehensive gain before reclassification 0 0
Amounts reclassified from AOCI 214 117
Other comprehensive income, net of tax 214 117
Balance at end of period $ (756) $ (6,464)

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