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Sterling Bancorp Announces Results for the Three Months Ended March 31, 2016

Strong Operating Momentum in the First Quarter Continues, Highlighted by Core Diluted Earnings per Share(1) of $0.25, GAAP Diluted Earnings per Share of $0.18 and Strong Growth as Loan and Deposit Volumes Reached Record Levels; Key Highlights for the Three Months Ended March 31, 2016


MONTEBELLO, NY--(Marketwired - April 26, 2016) -

  • Total revenue2 was $109.2 million.
  • Core net income1 was $32.2 million compared to $18.5 million for the first quarter of 2015, an increase of 73.8%.
  • Core diluted earnings per share1 were $0.25, which represented growth of 19.0% over the first quarter of 2015.
  • Tax equivalent net interest margin was 3.53% compared to 3.64% in the first quarter of 2015.
  • Total non-interest income excluding securities losses was $15.7 million, which represented 14.4% of total revenue2 and growth of 25.9% over the first quarter of 2015.
  • Core operating efficiency ratio1 was 48.9% compared to 56.4% in the first quarter of 2015.
  • Annualized commercial loan3 growth of 25.0% (end of period balances including acquired loans) and 5.6% (average balances) over the linked quarter.
  • Annualized core deposit4 growth of 36.6% (end of period balances) over the linked quarter.
  • Loans to deposits ratio of 88.8%; total deposits were $9.3 billion with over 91.5% core deposits4 and a total cost of deposits of 0.29%.
  • Core return on average tangible assetswas 1.15% compared to 1.07% in the first quarter of 2015.
  • Core return on average tangible equity1 was 13.78% compared to 12.66% in the first quarter of 2015.
  • Completed a $110.0 million subordinated notes offering at Sterling National Bank, adding to Tier 2 capital.
  • Completed the acquisition of NewStar Business Credit, LLC ("NSBC") doubling the size of our asset-based loan portfolio to $629.8 million.
  • Announced the pending sale of our trust division to Midland States Bank, expected to be complete in Q3 2016.
  • Repayment of $220.0 million of Federal Home Loan Bank ("FHLB") advances with a weighted average rate of 4.17%.
  1. Core measures are defined in the non-GAAP tables beginning on page 12.
  2. Total revenue is equal to net interest income plus non-interest income excluding securities gains and losses.
  3. Commercial loans include commercial real estate, commercial and industrial and acquisition, development and construction loans.
  4. Core deposits include retail, commercial and municipal transaction, money market and savings accounts and exclude certificates of deposit and brokered deposits except for reciprocal Certificate of Deposit Account Registry balances.

Sterling Bancorp (NYSE: STL) , the parent company of Sterling National Bank (the "Company"), today announced results for the three months ended March 31, 2016. Net income for the quarter was $23.8 million, or $0.18 per diluted share, compared to net income of $32.8 million, or $0.25 per diluted share, for the linked quarter ended December 31, 2015 and net income of $16.8 million, or $0.19 per diluted share, for the first quarter of 2015.

Net income for the first quarter of 2016 was negatively impacted by a loss on extinguishment of FHLB borrowings, merger related expenses and other restructuring charges, which are detailed in our Non-GAAP Financial Measures beginning on page 12.

President's Comments
Jack Kopnisky, President and Chief Executive Officer, commented: "Our positive momentum in operating performance continued this quarter, highlighted by strong profitability and significant growth in loans and deposits. As of March 31, 2016, our total assets reached $12.9 billion, compared to $7.7 billion a year ago. We are well-positioned for future growth and continue to execute our strategy of creating a high performing regional bank that focuses on serving commercial middle market clients and consumers.

"Core net income for the quarter was $32.2 million and core diluted earnings per share were $0.25, compared to $18.5 million and $0.21, respectively, for the same quarter a year ago. This represents growth of 73.8% and 19.0%, respectively, between the two periods. Our core return on average tangible assets was 1.15% and core return on average tangible equity was 13.78%. This compares to 1.07% and 12.66%, respectively, for the same quarter a year ago.

"On March 31, 2016, we completed the acquisition of NSBC, doubling the size of our asset-based lending business. The transaction exceeds all of our acquisition criteria; it is expected to be accretive to earnings per share, has an estimated internal rate of return greater than 20% and a tangible book value earn-back period of less than 2.5 years. Furthermore, the acquired loans are all floating-rate loans and have an attractive yield greater than 5%.

"We are focused on creating positive operating leverage and becoming a more efficient company. In the first quarter, we consolidated four financial centers bringing our total to 48 locations as of March 31, 2016. We expect to consolidate five additional financial centers in the second quarter of 2016. Additionally, we announced the sale of our trust division, which we expect to complete in the third quarter of 2016. We will continue to evaluate opportunities to create a more efficient, commercial client-focused bank. For the quarter, our core operating efficiency ratio was 48.9%, which compares to 56.4% in the same quarter last year.

"We continue to experience strong organic and acquired loan growth across multiple asset classes. As of March 31, 2016, total portfolio loans were $8.3 billion, which represented annualized growth of 21.8% over year end. Including the acquisition of NSBC, our commercial loan balances grew $425.5 million during the quarter, which represented annualized growth of 25.0% over the linked quarter end.

"As of March 31, 2016, our total deposits were $9.3 billion. Our core deposits were $8.5 billion, which represented 91.5% of our total deposit balances. Our total cost of deposits was 0.29% for the three months ended March 31, 2016. Our strong commercial deposit growth will allow us to continue reducing expenses and capital investments associated with our financial centers and enhance our ability to grow profitability.

"We continue to focus on diversifying and improving our revenue mix. Non-interest income excluding securities gains/losses was $15.7 million for the quarter, which represented 14.4% of total revenue and growth of 25.9% over the same quarter a year ago. We expect to continue growing our diversified commercial lending businesses, which are strong fee income generators, and we will continue to actively evaluate opportunistic acquisitions.

"Net charge-offs against the allowance for loan losses for the three months ended March 31, 2016 were $1.1 million, or 0.06% on an annualized basis, compared to $3.0 million, or 0.15% on an annualized basis, in the three months ended December 31, 2015. The allowance for loan losses to total loans was 0.64% at March 31, 2016 and December 31, 2015. As a result of purchase accounting, a substantial portion of the loans acquired in prior merger transactions do not have an allocation in the allowance for loan losses as the performance of these loans remains satisfactory. The total valuation balances recorded against portfolio loans to adjusted gross portfolio loans was 1.16% and 1.17% at December 31, 2015 and March 31, 2016, respectively. In the first quarter, non-performing loans increased by $19.0 million to $85.4 million mainly due to one taxi medallion relationship with a balance of $23.9 million that was placed on non-accrual during the quarter. As a result, the ratio of allowance for loan losses to non-performing loans declined to 62.0% at March 31, 2016 compared to 75.5% at December 31, 2015.

"We also enhanced our capital position during the quarter. On March 29, 2016, we completed the issuance of $110.0 million of subordinated notes by Sterling National Bank. The offering provides us with additional liquidity and regulatory capital to support

growth and will qualify as Tier 2 capital. At March 31, 2016, our tangible equity to tangible assets ratio was 7.66% and our estimated Tier 1 leverage ratio was 8.61%. At Sterling National Bank, our estimated Tier 1 leverage ratio was 9.16%.

"Lastly, I am pleased to announce our Board of Directors has declared a dividend on our common stock of $0.07 per share payable on May 23, 2016 to our holders as of the record date of May 6, 2016."

Reconciliation of Core to GAAP Results
GAAP net income of $23.8 million, or $0.18 per diluted share, for the first quarter of 2016, included: (i) a pre-tax net loss on sale of securities of $283 thousand; (ii) a loss on the early extinguishment of FHLB borrowings of $8.7 million; (iii) a pre-tax charge of $2.8 million due to merger-related expenses and restructuring charges incurred in connection with the acquisition of NSBC and the continued consolidation of financial centers and other locations; and (iv) amortization of non-compete agreements and acquired customer list intangibles of $968 thousand. Excluding the impact of these items, core net income was $32.2 million, or $0.25 per diluted share.

See the reconciliation of the Company's Non-GAAP Financial Measures beginning on page 12. Non-GAAP financial measures include references to the terms "core" or "excluding".

Net Interest Income and Margin
First quarter 2016 compared with first quarter 2015
Net interest income was $93.5 million, an increase of $34.6 million compared to the first quarter of 2015. This was mainly the result of higher average loans and investment securities balances due to the merger with Hudson Valley Holding Corp. (the "HVB Merger") and organic growth. For the first quarter of 2016, the yield on loans was 4.62% and declined 4 basis points compared to the first quarter of 2015. Yield on loans included $5.6 million of accretion of the fair value discount associated with prior acquisitions compared to $926 thousand in the first quarter of 2015. The tax-equivalent yield on investment securities decreased 14 basis points to 2.65%. The cost of total deposits was 29 basis points and the cost of borrowings was 1.92% compared to 23 basis points and 2.00%, respectively, for the same period a year ago. The tax-equivalent yield on interest earning assets declined 11 basis points from the first quarter of 2015 to 4.00% for the first quarter of 2016. The net interest margin on a tax-equivalent basis was 3.53% compared to 3.64% for the same period a year ago.

First quarter 2016 compared with linked quarter ended December 31, 2015
Net interest income declined $1.9 million compared to the linked quarter ended December 31, 2015. The decrease in net interest income was mainly due to lower accretion of the fair value discount, which was $7.1 million in the fourth quarter of 2015 compared to $5.6 million in the first quarter of 2016, and higher average borrowings balances which resulted in an increase of $1.0 million in interest expense in the first quarter of 2016. The yield on loans was 4.62% for the quarter compared to 4.65% for the linked quarter. The tax-equivalent yield on investment securities decreased one basis point to 2.65% in the quarter. The cost of total deposits increased 3 basis points from 26 basis points in the linked quarter and the total cost of borrowings declined 12 basis points from 2.04% in the linked quarter. The tax-equivalent yield on interest earning assets was 4.00% compared to 4.09% in the linked quarter. Tax-equivalent net interest margin was 3.53% compared to 3.68% in the linked quarter. Average interest-bearing cash balances increased by $128.5 million in the quarter, which resulted in an approximate five basis point decrease in net interest margin.

Non-interest Income
First quarter 2016 compared with first quarter 2015
Excluding net gain (loss) on sale of securities, non-interest income increased $3.2 million in the first quarter of 2016 to $15.7 million compared to $12.5 million in the same quarter last year. The increase was mainly due to increases in factoring commissions and other fees, an increase in other loan fees and commissions, and an increase in deposit fees and service charges. Partially offsetting these increases was a decline of $1.2 million in mortgage banking income. The Company realized a net loss on sale of securities of $283 thousand in the first quarter of 2016 compared to a net gain on sale of securities of $1.5 million in the same quarter last year.

First quarter 2016 compared with linked quarter ended December 31, 2015
Excluding net gain (loss) on sale of securities, non-interest income declined $489 thousand from $16.2 million during the fourth quarter of 2015. This was mainly the result of decreases in mortgage banking income of $760 thousand and bank owned life insurance of $465 thousand. The Company realized a net loss on sale of securities of $121 thousand in the linked quarter ended December 31, 2015.

Non-interest Expense
First quarter 2016 compared with first quarter 2015
Non-interest expense increased $23.0 million relative to the first quarter of 2015 to $68.9 million. The increase was due to increases in compensation and benefits expense of $6.9 million, occupancy and office operations expense of $2.7 million and amortization of intangible assets of $1.7 million which were all mainly due to the HVB Merger. In addition, in the first quarter of 2016, we recorded a pre-tax charge of $2.8 million due to merger-related expenses and other restructuring charges incurred in connection with the acquisition of NSBC and the consolidation of financial centers and other locations, and a pre-tax charge of $8.7 million related to a loss on extinguishment of $220.0 million of FHLB borrowings.

First quarter 2016 compared with linked quarter ended December 31, 2015
Non-interest expense increased $11.5 million compared to $57.4 million for the linked quarter, mainly due to the merger-related expenses and other restructuring charges and the loss on extinguishment of FHLB borrowings discussed above. Excluding the impact of these items, core non-interest expense increased $424 thousand between the first quarter of 2016 and the linked quarter.

Taxes
In the first quarter of 2016, the Company recorded income taxes at an estimated effective tax rate of 34.0%, compared to an effective tax rate of 32.5% in the linked quarter and the same quarter last year.

Key Balance Sheet Highlights at March 31, 2016

  • Total assets were $12.9 billion.
  • Total loans, including loans held for sale, were $8.3 billion.
  • Commercial and industrial ("C&I") loans (which includes traditional C&I, asset-based lending, payroll finance, factoring and warehouse lending) represented 41.2%, commercial real estate loans represented 44.4%, consumer and residential mortgage loans represented 12.2%, and acquisition, development and construction loans represented 2.2% of the total loan portfolio.
  • Commercial loan growth, which includes all C&I loans, commercial real estate and acquisition development and construction loans, was $425.5 million for the quarter ended March 31, 2016. Organic loan growth, which excludes the NSBC acquisition, was $102.9 million, and represented annualized growth of 6.0% over the prior quarter. Average commercial loans were $6.7 billion for the first quarter of 2016 compared to $6.6 billion for the linked quarter.
  • The allowance for loan losses was $53.0 million and represented 0.64% of total loans. Loans acquired in prior merger transactions were recorded at fair value at the acquisition date and at March 31, 2016; the remaining purchase accounting adjustments on acquired loan were $44.2 million. The ratio of total valuation balances recorded against portfolio loans to adjusted gross portfolio loans was 1.17%. See a reconciliation of this non-GAAP measure on page 14.
  • Investment securities, excluding FHLB and FRB stock, were $2.8 billion and represented 22.1% of total assets.
  • Core deposits were $8.5 billion and represented 91.5% of total deposits.
  • Total deposits were $9.3 billion compared to $8.6 billion at December 31, 2015. Average deposits were $8.9 billion compared to $8.8 billion for the linked quarter.
  • Borrowings were $1.7 billion compared to $1.5 billion at December 31, 2015. Average borrowings were $1.3 billion compared to $988.6 million for the linked quarter.
  • Tangible book value per share was $7.09.

Credit Quality
Non-performing loans, which includes non-accrual loans and loans over 90 days past due still accruing interest, increased $19.0 million to $85.4 million, or 1.03% of total loans at March 31, 2016 compared to $66.4 million, or 0.84% of total loans at December 31, 2015. The increase was mainly the result of one taxi medallion relationship with a balance of $23.9 million that was placed on non-accrual. Net charge-offs for the first quarter of 2016 that were charged to the allowance for loan losses were $1.1 million, compared to $3.0 million in the linked quarter. The allowance for loan losses at March 31, 2016 was $53.0 million, which represented 62.0% of non-performing loans and 0.64% of our total portfolio loans compared to $50.1 million, 75.5% and 0.64%, respectively, as of December 31, 2015.

Capital
The Company's stockholders' equity was $1.7 billion at March 31, 2016, an increase of $33.1 million relative to December 31, 2015. The increase in stockholders' equity was mainly the result of net income of $23.8 million and an increase in other comprehensive income of $16.3 million, 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 thousand. These increases were partially offset by declared dividends of $9.1 million.

Tangible book value per share was $7.09 at March 31, 2016 compared to $7.05 at December 31, 2015. Total goodwill and other intangible assets were $772.4 million at March 31, 2016, an increase of $24.3 million compared to December 31, 2015, due to the NSBC acquisition. For the quarter ended March 31, 2016, basic and diluted weighted average common shares outstanding increased to 130.0 million and 130.5 million, respectively, compared to 129.8 million basic shares and 130.4 million diluted shares, respectively, for the quarter ended December 31, 2015. Total shares outstanding at March 31, 2016 were approximately 130.5 million.

Consolidated tangible equity to tangible assets was 7.66% at March 31, 2016 and the Company's estimated Tier 1 leverage ratio was 8.61%. Sterling National Bank remained well capitalized at March 31, 2016 with an estimated Tier 1 leverage ratio of 9.16%.

Sterling Bancorp will host a teleconference and webcast on Wednesday, April 27, 2016 at 10:30 AM eastern time to discuss the Company's results. Interested parties are invited to listen to the webcast and view accompanying slides on the Company's website at www.sterlingbancorp.com. Analysts are invited to listen by dialing (888) 437-9445, Conference ID #6055694. A replay of the teleconference can be accessed through the Company's website.

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

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This release may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward- looking statements may concern Sterling Bancorp's current expectations about its future results, plans, operations and prospects and involve certain risks, including the following: our ability to successfully implement growth, grow 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; inflation; the effects of, and changes in, trade; changes in asset quality and credit risk; introduction, withdrawal, success and timing of business initiatives; capital management activities; customer disintermediation; and the success of Sterling Bancorp in managing those risks. Other factors that could cause Sterling Bancorp's actual results to differ from those indicated in forward-looking statements are included in the "Risk Factors" section of Sterling Bancorp's filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2016. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the Quarterly Report on Form 10-Q to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.

                                                                                                
                                                                                                
                    Sterling Bancorp and Subsidiaries                                           
                    CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION                    
                    (unaudited, in thousands, except share and per share data)                  
                                                                                                
                                                          3/31/2015    12/31/2015   3/31/2016   
                                                         ------------ ------------ ------------ 
                    Assets:                                                                     
                    Cash and cash equivalents            $    186,701 $    229,513 $    486,730 
                    Investment securities                   1,800,037    2,643,823    2,847,742 
                    Loans held for sale                        53,737       34,110       27,237 
                    Portfolio loans:                                                            
                      Residential mortgage                    494,106      713,036      718,733 
                      Commercial real estate                1,916,937    3,529,381    3,676,214 
                      Commercial and industrial             2,232,442    3,131,028    3,416,538 
                      Acquisition, development and                                              
                       construction                            95,567      186,398      179,517 
                      Consumer                                199,854      299,517      295,161 
                                                         ------------ ------------ ------------ 
                        Total portfolio loans, gross        4,938,906    7,859,360    8,286,163 
                      Allowance for loan losses               (42,884)     (50,145)     (53,014)
                                                         ------------ ------------ ------------ 
                        Total portfolio loans, net          4,896,022    7,809,215    8,233,149 
                    Federal Home Loan Bank and Federal                                          
                     Reserve Bank Stock, at cost               68,864      116,758      118,330 
                    Accrued interest receivable                21,367       31,531       33,392 
                    Premises and equipment, net                45,076       63,362       62,432 
                    Goodwill                                  400,941      670,699      696,600 
                    Other intangibles                          51,757       77,367       75,790 
                    Bank owned life insurance                 151,323      196,288      197,615 
                    Other real estate owned                     8,231       14,614       14,527 
                    Other assets                               43,459       68,672       71,812 
                                                         ------------ ------------ ------------ 
                        Total assets                     $  7,727,515 $ 11,955,952 $ 12,865,356 
                                                         ============ ============ ============ 
                    Liabilities:                                                                
                    Deposits                             $  5,555,946 $  8,580,007 $  9,328,622 
                    FHLB borrowings                           857,138    1,409,885    1,444,817 
                    Other borrowings                           25,245       16,566       23,571 
                    Senior notes                               98,595       98,893       98,996 
                    Subordinated notes                              -            -      108,124 
                    Mortgage escrow funds                       5,805       13,778       14,972 
                    Other liabilities                         104,243      171,750      148,121 
                                                         ------------ ------------ ------------ 
                        Total liabilities                   6,646,972   10,290,879   11,167,223 
                    Stockholders' equity:                                                       
                    Common stock                                  981        1,367        1,367 
                    Additional paid-in capital                943,764    1,506,612    1,501,417 
                    Treasury stock                            (79,530)     (76,190)     (70,142)
                    Retained earnings                         220,067      245,408      261,332 
                    Accumulated other comprehensive                                             
                     (loss) income                             (4,739)     (12,124)       4,159 
                                                         ------------ ------------ ------------ 
                        Total stockholders' equity          1,080,543    1,665,073    1,698,133 
                                                         ------------ ------------ ------------ 
                          Total liabilities and                                                 
                           stockholders' equity          $  7,727,515 $ 11,955,952 $ 12,865,356 
                                                         ============ ============ ============ 
                                                                                                
                    Shares of common stock outstanding at                                       
                     period end                            91,121,531  130,006,926  130,548,989 
                    Book value per share                 $      11.86 $      12.81 $      13.01 
                    Tangible book value per share                6.89         7.05         7.09 
                    
                                                                                                
                                                                                                
                                                                                                
                    Sterling Bancorp and Subsidiaries                                           
                    CONSOLIDATED CONDENSED INCOME STATEMENTS                                    
                    (unaudited, in thousands, except share and per share data)                  
                                                                                                
                                                                For the Quarter Ended           
                                                       ---------------------------------------- 
                                                        3/31/2015     12/31/2015    3/31/2016   
                                                       ------------  ------------  ------------ 
                    Interest and dividend income:                                               
                      Loans and loan fees              $     55,271  $     89,707  $     89,034 
                      Securities taxable                      7,632        12,201        12,016 
                      Securities non-taxable                  2,867         3,139         3,879 
                      Other earning assets                      902         1,177         1,077 
                                                       ------------  ------------  ------------ 
                      Total interest and dividend                                               
                       income                                66,672       106,224       106,006 
                    Interest expense:                                                           
                      Deposits                                3,091         5,728         6,409 
                      Borrowings                              4,714         5,075         6,087 
                                                       ------------  ------------  ------------ 
                    Total interest expense                    7,805        10,803        12,496 
                                                       ------------  ------------  ------------ 
                    Net interest income                      58,867        95,421        93,510 
                    Provision for loan losses                 2,100         5,500         4,000 
                                                       ------------  ------------  ------------ 
                    Net interest income after                                                   
                     provision for loan losses               56,767        89,921        89,510 
                    Non-interest income:                                                        
                      Accounts receivable / factoring                                           
                       commissions and other fees             3,502         4,389         4,494 
                      Mortgage banking income                 3,157         2,762         2,002 
                      Deposit fees and service charges        3,622         4,241         4,496 
                      Net gain (loss) on sale of                                                
                       securities                             1,534          (121)         (283)
                      Bank owned life insurance               1,076         1,792         1,327 
                      Investment management fees                360           877         1,124 
                      Other                                     759         2,141         2,270 
                                                       ------------  ------------  ------------ 
                    Total non-interest income                14,010        16,081        15,430 
                    Non-interest expense:                                                       
                      Compensation and benefits              23,165        29,868        30,020 
                      Stock-based compensation plans          1,109         1,281         1,540 
                      Occupancy and office operations         6,580         9,306         9,282 
                      Amortization of intangible                                                
                       assets                                 1,399         3,431         3,053 
                      FDIC insurance and regulatory                                             
                       assessments                            1,428         2,287         2,258 
                      Other real estate owned, net                                              
                       (income) expense                         (37)           87           582 
                      Merger-related expenses                 2,455             -           265 
                      Loss on extinguishment of FHLB                                            
                       borrowings                                 -             -         8,716 
                      Other                                   9,822        11,159        13,215 
                                                       ------------  ------------  ------------ 
                    Total non-interest expense               45,921        57,419        68,931 
                                                       ------------  ------------  ------------ 
                    Income before income tax expense         24,856        48,583        36,009 
                    Income tax expense                        8,078        15,792        12,243 
                                                       ------------  ------------  ------------ 
                    Net income                         $     16,778  $     32,791  $     23,766 
                                                       ============  ============  ============ 
                    Weighted average common shares:                                             
                      Basic                              87,839,029   129,812,551   129,974,025 
                      Diluted                            88,252,768   130,354,779   130,500,975 
                    Earnings per common share:                                                  
                      Basic earnings per share         $       0.19  $       0.25  $       0.18 
                      Diluted earnings per share               0.19          0.25          0.18 
                      Dividends declared per share             0.07          0.07          0.07 
                    
                                                                                                
                                                                                                
                                                                                                
                    Sterling Bancorp and Subsidiaries                                           
                    SELECTED FINANCIAL DATA                                                     
                    (unaudited, in thousands, except share and per share data)                  
                                                   As of and for the Quarter Ended              
                                     ----------- ----------------------------------- -----------
                    End of Period     3/31/2015   6/30/2015   9/30/2015  12/31/2015   3/31/2016 
                                     ----------- ----------- ----------- ----------- -----------
                    Total assets     $ 7,727,515 $11,566,382 $11,597,393 $11,955,952 $12,865,356
                    Tangible assets                                                             
                     (1)               7,274,817  10,812,483  10,845,864  11,207,886  12,092,966
                    Securities                                                                  
                     available for                                                              
                     sale              1,214,404   2,081,414   1,854,862   1,921,032   1,894,820
                    Securities held                                                             
                     to maturity         585,633     585,196     673,130     722,791     952,922
                    Portfolio loans    4,938,906   7,235,587   7,525,632   7,859,360   8,286,163
                    Goodwill             400,941     669,590     670,699     670,699     696,600
                    Other                                                                       
                     intangibles          51,757      84,309      80,830      77,367      75,790
                    Deposits           5,555,946   8,836,161   8,805,411   8,580,007   9,328,622
                    Municipal                                                                   
                     deposits                                                                   
                     (included                                                                  
                     above)            1,013,835   1,212,624   1,352,846   1,140,206   1,285,263
                    Borrowings           980,978     914,921     948,048   1,525,344   1,675,508
                    Stockholders'                                                               
                     equity            1,080,543   1,623,110   1,652,204   1,665,073   1,698,133
                    Tangible equity                                                             
                     (1)                 627,845     869,211     900,675     917,007     925,743
                    Quarterly                                                                   
                     Average                                                                    
                     Balances                                                                   
                    Total assets       7,438,314   8,049,220  11,242,870  11,622,621  12,001,370
                    Tangible assets                                                             
                     (1)               6,999,344   7,593,900  10,490,169  10,872,287  11,253,958
                    Loans, gross:                                                               
                     Residential                                                                
                      mortgage           531,421     539,569     780,373     777,561     755,564
                     Commercial real                                                            
                      estate           1,908,582   2,040,094   3,253,183   3,444,774   3,587,341
                     Commercial and                                                             
                      industrial:                                                               
                      Commercial and                                                            
                       industrial        898,839     966,411   1,295,034   1,378,642   1,381,107
                      Asset based                                                               
                       lending           296,409     297,846     303,387     304,113     304,779
                      Payroll                                                                   
                       finance           158,493     170,905     175,240     199,856     192,428
                      Warehouse                                                                 
                       lending           157,038     263,802     286,557     293,387     248,831
                      Factored                                                                  
                       receivables       134,105     150,569     192,380     210,081     181,974
                      Equipment                                                                 
                       financing         423,510     477,369     578,655     587,445     616,995
                                     ----------- ----------- ----------- ----------- -----------
                       Total                                                                    
                        commercial                                                              
                        and                                                                     
                        industrial     2,068,394   2,326,902   2,831,253   2,973,524   2,926,114
                     Acquisition,                                                               
                      development                                                               
                      and                                                                       
                      construction        97,865      97,197     173,898     181,550     179,420
                     Consumer            200,504     202,044     292,852     281,242     297,028
                    Loans, total (2)   4,806,766   5,205,806   7,331,559   7,658,651   7,745,467
                    Interest bearing                                                            
                     cash and cash                                                              
                     equivalents         113,152     114,128     211,723     168,199     296,668
                    Securities                                                                  
                     (taxable)         1,379,861   1,527,872   1,967,600   2,111,953   2,139,547
                    Securities (non-                                                            
                     taxable)            386,326     380,544     446,875     429,633     593,777
                    Total earning                                                               
                     assets            6,736,422   7,309,667  10,038,831  10,460,168  10,880,356
                    Deposits:                                                                   
                     Non-interest                                                               
                      bearing demand   1,503,692   1,548,844   3,234,450   3,017,727   3,009,085
                     Interest                                                                   
                      bearing demand     775,714     823,471   1,418,803   1,485,690   1,607,227
                     Savings                                                                    
                      (including                                                                
                      mortgage                                                                  
                      escrow funds)      766,448     802,956     950,709     962,766     814,485
                     Money market      1,851,839   1,922,805   2,548,181   2,808,734   2,866,666
                     Certificates of                                                            
                      deposit            452,594     536,394     539,765     550,640     619,154
                    Total deposits                                                              
                     and mortgage                                                               
                     escrow            5,350,287   5,634,470   8,691,908   8,825,557   8,916,617
                    Borrowings           955,677   1,234,958     772,777     988,550   1,274,605
                    Stockholders'                                                               
                     equity            1,031,809   1,100,897   1,639,458   1,661,282   1,686,274
                    Tangible                                                                    
                     equity(1)           592,839     645,577     886,757     910,948     938,862
                    ----------------------------------------------------------------------------
                    

1 See a reconciliation of this Non-GAAP Financial Measure on page 12.
2 Includes loans held for sale, excludes allowance for loan losses.

                                                                                                
                                                                                                
                                                                                                
                    Sterling Bancorp and Subsidiaries                                           
                    SELECTED FINANCIAL DATA AND PERFORMANCE RATIOS                              
                    (unaudited, in thousands, except share and per share data)                  
                                                                                                
                                               As of and for the Quarter Ended                  
                              ------------ --------------------------------------- ------------ 
                    Per Share                                                                   
                     Data      3/31/2015    6/30/2015     9/30/2015    12/31/2015   3/31/2016   
                              ------------ ------------  ------------ ------------ ------------ 
                    Basic                                                                       
                     earnings                                                                   
                     (loss)                                                                     
                     per share$       0.19 $      (0.08) $       0.19 $       0.25 $       0.18 
                    Diluted                                                                     
                     earnings                                                                   
                     (loss)                                                                     
                     per share        0.19        (0.08)         0.19         0.25         0.18 
                    Core                                                                        
                     earnings                                                                   
                     per share                                                                  
                     (1)              0.21         0.23          0.25         0.26         0.25 
                    Dividends                                                                   
                     declared                                                                   
                     per share        0.07         0.07          0.07         0.07         0.07 
                    Tangible                                                                    
                     book                                                                       
                     value per                                                                  
                     share            6.89         6.70          6.94         7.05         7.09 
                    Shares of                                                                   
                     common                                                                     
                     stock o/s  91,121,531  129,709,834   129,769,569  130,006,926  130,548,989 
                    Basic                                                                       
                     weighted                                                                   
                     average                                                                    
                     common                                                                     
                     shares                                                                     
                     o/s        87,839,029   91,565,972   129,733,911  129,812,551  129,974,025 
                    Diluted                                                                     
                     weighted                                                                   
                     average                                                                    
                     common                                                                     
                     shares                                                                     
                     o/s        88,252,768   91,950,776   130,192,937  130,354,779  130,500,975 
                    Performance                                                                  
                     Ratios                                                                   
                     (annualized)                                                                  
                    Return on                                                                   
                     average                                                                    
                     assets           0.91%       (0.38)%        0.85%        1.12%        0.80%
                    Return on                                                                   
                     average                                                                    
                     equity           6.59%       (2.79)%        5.85%        7.83%        5.67%
                    Return on                                                                   
                     average                                                                    
                     tangible                                                                   
                     assets                                                                     
                     (1)              0.97%       (0.40)%        0.91%        1.20%        0.85%
                    Return on                                                                   
                     average                                                                    
                     tangible                                                                   
                     equity                                                                     
                     (1)             11.48%       (4.75)%       10.82%       14.28%       10.18%
                    Core                                                                        
                     return on                                                                  
                     average                                                                    
                     tangible                                                                   
                     assets                                                                     
                     (1)              1.07%        1.13%         1.21%        1.22%        1.15%
                    Core                                                                        
                     return on                                                                  
                     average                                                                    
                     tangible                                                                   
                     equity                                                                     
                     (1)             12.66%       13.27%        14.33%       14.60%       13.78%
                    Core                                                                        
                     operating                                                                  
                     efficiency                                                                  
                     (1)              56.4%        52.6%         49.0%        47.6%        48.9%
                    Analysis                                                                    
                     of Net                                                                     
                     Interest                                                                   
                     Income                                                                     
                    Yield on                                                                    
                     loans            4.66%        4.60%         4.75%        4.65%        4.62%
                    Yield on                                                                    
                     investment                                                                  
                     securities                                                                  
                     - tax                                                                    
                     equivalent                                                                  
                     (2)              2.79%        2.71%         2.63%        2.66%        2.65%
                    Yield on                                                                    
                     interest                                                                   
                     earning                                                                    
                     assets -                                                                   
                     tax                                                                        
                     equivalent                                                                  
                     (2)              4.11%        4.03%         4.15%        4.09%        4.00%
                    Cost of                                                                     
                     total                                                                      
                     deposits         0.23%        0.24%         0.24%        0.26%        0.29%
                    Cost of                                                                     
                     borrowings       2.00%        1.63%         2.38%        2.04%        1.92%
                    Cost of                                                                     
                     interest                                                                   
                     bearing                                                                    
                     liabilities      0.66%        0.63%         0.63%        0.63%        0.70%
                    Net                                                                         
                     interest                                                                   
                     rate                                                                       
                     spread -                                                                   
                     tax                                                                        
                     equivalent                                                                  
                     basis                                                                    
                     (2)              3.45%        3.40%         3.52%        3.46%        3.30%
                    Net                                                                         
                     interest                                                                   
                     margin -                                                                   
                     GAAP                                                                       
                     basis            3.45%        3.49%         3.69%        3.62%        3.46%
                    Net                                                                         
                     interest                                                                   
                     margin -                                                                   
                     tax                                                                        
                     equivalent                                                                  
                     basis                                                                    
                     (2)              3.64%        3.57%         3.76%        3.68%        3.53%
                    Capital                                                                     
                    Tier 1                                                                      
                     leverage                                                                   
                     ratio -                                                                    
                     Company                                                                    
                     (3)              9.55%       12.92%         9.12%        9.03%        8.61%
                    Tier 1                                                                      
                     leverage                                                                   
                     ratio -                                                                    
                     Bank only                                                                  
                     (3)             10.53%       13.81%         9.80%        9.65%        9.16%
                    Tier 1                                                                      
                     risk-                                                                      
                     based                                                                      
                     capital -                                                                  
                     Bank only                                                                  
                     (3)      $    739,580 $  1,015,470  $  1,032,930 $  1,053,527 $  1,032,118 
                    Total                                                                       
                     risk-                                                                      
                     based                                                                      
                     capital -                                                                  
                     Bank only                                                                  
                     (3)           782,859    1,060,332     1,081,090    1,104,221    1,193,801 
                    Tangible                                                                    
                     equity to                                                                  
                     tangible                                                                   
                     assets -                                                                   
                     Company                                                                    
                     (1)              8.63%        8.04%         8.30%        8.18%        7.66%
                    Condensed                                                                   
                     Five                                                                       
                     Quarter                                                                    
                     Income                                                                     
                     Statement                                                                  
                    Interest                                                                    
                     and                                                                        
                     dividend                                                                   
                     income   $     66,672 $     71,947  $    103,298 $    106,224 $    106,006 
                    Interest                                                                    
                     expense         7,805        8,373         9,944       10,803       12,496 
                              ------------ ------------  ------------ ------------ ------------ 
                    Net                                                                         
                     interest                                                                   
                     income         58,867       63,574        93,354       95,421       93,510 
                    Provision                                                                   
                     for loan                                                                   
                     losses          2,100        3,100         5,000        5,500        4,000 
                              ------------ ------------  ------------ ------------ ------------ 
                    Net                                                                         
                     interest                                                                   
                     income                                                                     
                     after                                                                      
                     provision                                                                  
                     for loan                                                                   
                     losses         56,767       60,474        88,354       89,921       89,510 
                    Non-                                                                        
                     interest                                                                   
                     income         14,010       13,857        18,802       16,081       15,430 
                    Non-                                                                        
                     interest                                                                   
                     expense        45,921       85,659        71,315       57,419       68,931 
                              ------------ ------------  ------------ ------------ ------------ 
                    Income                                                                      
                     (loss)                                                                     
                     before                                                                     
                     income                                                                     
                     tax                                                                        
                     expense        24,856      (11,328)       35,841       48,583       36,009 
                    Income tax                                                                  
                     expense                                                                    
                     (benefit)       8,078       (3,682)       11,648       15,792       12,243 
                              ------------ ------------  ------------ ------------ ------------ 
                    Net income                                                                  
                     (loss)   $     16,778 $     (7,646) $     24,193 $     32,791 $     23,766 
                              ============ ============  ============ ============ ============ 
                    

1 See a reconciliation of Non-GAAP Financial Measures beginning on page 12.
2 Tax equivalent adjustment represents interest income earned on municipal securities divided by the applicable Federal tax rate of 35%.
3 Regulatory capital amounts and ratios are preliminary estimates pending filing of the Company's and Bank's regulatory reports.

                                                                                                
                                                                                                
                                                                                                
                    Sterling Bancorp and Subsidiaries                                           
                    ASSET QUALITY INFORMATION                                                   
                    (unaudited, in thousands, except share and per share data)                  
                                                                                                
                                                          As of and for the Quarter             
                                                                   Ended                        
                                             --------- ------------------------------ --------- 
                    Allowance for Loan                                                          
                     Losses Roll Forward     3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 
                                             --------- --------- --------- ---------- --------- 
                    Balance, beginning of                                                       
                     period                  $  42,374 $  42,884 $  44,317 $   47,611 $  50,145 
                    Provision for loan                                                          
                     losses                      2,100     3,100     5,000      5,500     4,000 
                    Loan charge-offs:                                                           
                      Commercial &                                                              
                       industrial                 (842)     (228)     (224)      (281)     (489)
                      Payroll finance             (303)      (59)      (44)         -         - 
                      Warehouse lending              -         -         -          -         - 
                      Factored receivables         (72)     (146)      (52)       (21)      (81)
                      Equipment financing         (153)     (438)   (1,369)    (1,463)     (457)
                      Commercial real estate       (62)     (276)     (223)    (1,134)       (4)
                      Multi-family                 (17)        -         -          -         - 
                      ADC                            -         -         -          -         - 
                      Residential mortgage        (181)        -      (546)      (524)     (224)
                      Consumer                    (342)     (821)     (387)      (810)     (511)
                                             --------- --------- --------- ---------- --------- 
                        Total charge offs       (1,972)   (1,968)   (2,845)    (4,233)   (1,766)
                    Recoveries of loans                                                         
                     previously charged-off:                                                    
                      Commercial &                                                              
                       industrial                  101       163       781        675       329 
                      Payroll finance               11         -         -         24         4 
                      Warehouse lending              -         -         -          -         - 
                      Factored receivables          19         9        18         14        24 
                      Equipment financing          172        96       148        409       108 
                      Commercial real estate        16         -        76         56        21 
                      Multi-family                   -         -         -          9         2 
                      ADC                            9         -         -         43         - 
                      Residential mortgage           2         9        81          -        28 
                      Consumer                      52        24        35         37       119 
                                             --------- --------- --------- ---------- --------- 
                        Total recoveries           382       301     1,139      1,267       635 
                    Net loan charge-offs        (1,590)   (1,667)   (1,706)    (2,966)   (1,131)
                                             --------- --------- --------- ---------- --------- 
                    Balance, end of period   $  42,884 $  44,317 $  47,611 $   50,145 $  53,014 
                                             --------- --------- --------- ---------- --------- 
                    Asset Quality Data and                                                      
                     Ratios                                                                     
                    Non-performing loans                                                        
                     (NPLs) non-accrual      $  45,476 $  68,419 $  67,390 $   65,737 $  84,436 
                    NPLs still accruing            972       611       282        674     1,002 
                                             --------- --------- --------- ---------- --------- 
                        Total NPLs              46,448    69,030    67,672     66,411    85,438 
                      Other real estate                                                         
                       owned                     8,231     9,575    11,831     14,614    14,527 
                                             --------- --------- --------- ---------- --------- 
                      Non-performing assets                                                     
                       (NPAs)                $  54,679 $  78,605 $  79,503 $   81,025 $  99,965 
                                             --------- --------- --------- ---------- --------- 
                      Loans 30 to 89 days                                                       
                       past due              $  35,267 $  40,957 $  30,881 $   67,996 $  19,168 
                      Net charge-offs as a %                                                    
                       of average loans                                                         
                      (annualized)                0.13%     0.13%     0.09%      0.15%     0.06%
                      NPLs as a % of total                                                      
                       loans                      0.94%     0.95%     0.90%      0.84%     1.03%
                      NPAs as a % of total                                                      
                       assets                     0.71%     0.68%     0.69%      0.68%     0.78%
                      Allowance for loan                                                        
                       losses as a % of NPLs      92.3%     64.2%     70.4%      75.5%     62.0%
                      Allowance for loan                                                        
                       losses as a % of                                                         
                       total loans                0.87%     0.61%     0.63%      0.64%     0.64%
                      Total valuation                                                           
                       balances recorded                                                        
                       against portfolio                                                        
                       loans to adjusted                                                        
                       gross portfolio loans                                                    
                       (1)                        0.97%     1.36%     1.28%      1.16%     1.17%
                      Special mention loans  $  26,057 $  65,421 $  91,076 $   68,003 $ 101,560 
                      Substandard loans         74,095   125,602   120,684    129,665   131,919 
                      Doubtful loans               157       392       152        713       556 
                      (1) See a reconciliation of this non-GAAP measure on page 14.             
                    
                                                                                                
                                                                                                
                                                                                                
                    Sterling Bancorp and Subsidiaries                                           
                    QUARTERLY YIELD TABLE                                                       
                    (unaudited, in thousands, except share and per share data)                  
                                                                                                
                                                      For the Quarter Ended                     
                                       -------------------------------------------------------- 
                                        December 31, 2015              March 31, 2016           
                                       ---------------------------  --------------------------- 
                                         Average            Yield/    Average            Yield/ 
                                         balance   Interest  Rate     balance   Interest  Rate  
                                       ----------- -------- ------  ----------- -------- ------ 
                                                        (Dollars in thousands)                  
                    Interest earning                                                            
                     assets:                                                                    
                      Commercial loans $ 6,599,848 $ 79,009   4.75% $ 6,692,875 $ 78,137   4.70%
                      Consumer loans       281,242    3,158   4.45%     297,028    3,296   4.46%
                      Residential                                                               
                       mortgage loans      777,561    7,540   3.88%     755,564    7,601   4.02%
                                       ----------- --------         ----------- --------        
                    Total net loans                                                             
                     (1)                 7,658,651   89,707   4.65%   7,745,467   89,034   4.62%
                      Securities                                                                
                       taxable           2,111,953   12,201   2.29%   2,139,547   12,016   2.26%
                      Securities non-                                                           
                       taxable             429,633    4,831   4.46%     593,777    5,968   4.04%
                      Interest earning                                                          
                       deposits            168,199       77   0.18%     296,668      311   0.42%
                      FRB and FHLB                                                              
                       stock                91,732    1,100   4.76%     104,897      766   2.94%
                                       ----------- --------         ----------- --------        
                        Total                                                                   
                         securities                                                             
                         and other                                                              
                         earning                                                                
                         assets          2,801,517   18,209   2.58%   3,134,889   19,061   2.45%
                                       ----------- --------         ----------- --------        
                      Total interest                                                            
                       earning assets   10,460,168  107,916   4.09%  10,880,356  108,095   4.00%
                    Non-interest                                                                
                     earning assets      1,162,453                    1,121,014                 
                                       -----------                  -----------                 
                    Total assets       $11,622,621                  $12,001,370                 
                                       ===========                  ===========                 
                    Interest bearing                                                            
                     liabilities:                                                               
                      Demand deposits  $ 1,485,690 $    890   0.24% $ 1,607,227 $  1,004   0.25%
                      Savings deposits                                                          
                       (2)                 962,766      617   0.25%     814,485      606   0.30%
                      Money market                                                              
                       deposits          2,808,734    3,283   0.46%   2,866,666    3,672   0.52%
                      Certificates of                                                           
                       deposit             550,640      938   0.68%     619,154    1,127   0.73%
                                       ----------- --------         ----------- --------        
                    Total interest                                                              
                     bearing deposits    5,807,830    5,728   0.39%   5,907,532    6,409   0.44%
                      Senior notes          98,827    1,476   5.97%      98,928    1,478   5.98%
                      Other borrowings     889,723    3,599   1.60%   1,172,112    4,560   1.56%
                      Subordinated                                                              
                       notes                     -        -      -%       3,565       49   5.50%
                                       ----------- --------         ----------- --------        
                        Total                                                                   
                         borrowings        988,550    5,075   2.04%   1,274,605    6,087   1.92%
                                       ----------- --------         ----------- --------        
                      Total interest                                                            
                       bearing                                                                  
                       liabilities       6,796,380   10,803   0.63%   7,182,137   12,496   0.70%
                    Non-interest                                                                
                     bearing deposits    3,017,727                    3,009,085                 
                    Other non-interest                                                          
                     bearing                                                                    
                     liabilities           147,232                      123,874                 
                                       -----------                  -----------                 
                    Total liabilities    9,961,339                   10,315,096                 
                      Stockholders'                                                             
                       equity            1,661,282                    1,686,274                 
                                       -----------                  -----------                 
                    Total liabilities                                                           
                     and stockholders'                                                          
                     equity            $11,622,621                  $12,001,370                 
                                       ===========                  ===========                 
                    Net interest rate                                                           
                     spread (3)                               3.46%                        3.30%
                    Net interest                                                                
                     earning assets                                                             
                     (4)               $ 3,663,788                  $ 3,698,219                 
                                       ===========                  ===========                 
                    Net interest                                                                
                     margin - tax                                                               
                     equivalent                      97,113   3.68%               95,599   3.53%
                    Less tax                                                                    
                     equivalent                                                                 
                     adjustment                      (1,692)                      (2,089)       
                                                   --------                     --------        
                    Net interest                                                                
                     income                        $ 95,421                     $ 93,510        
                                                   ========                     ========        
                    Ratio of interest                                                           
                     earning assets to                                                          
                     interest bearing                                                           
                     liabilities             153.9%                       151.5%                
                    ----------------------------------------------------------------------------
                    

1 Average balances include the effect of net deferred loan origination fees and costs, allowance for loan losses and non-accrual loans. Interest includes prepayment fees and late charges. 
2 Includes 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.

                                                                                                
                                                                                                
                                                                                                
                    Sterling Bancorp and Subsidiaries                                           
                    NON-GAAP FINANCIAL MEASURES                                                 
                    (unaudited, in thousands, except share and per share data)                  
                                                                                                
                    
                                                 As of and for the Quarter Ended                
                                 ---------------------------------------------------------------
                                  3/31/2015    6/30/2015    9/30/2015   12/31/2015    3/31/2016 
                                 -----------  -----------  -----------  -----------  -----------
                    

The Company provides supplemental reporting of Non-GAAP Financial Measures as management believes this information is useful to investors. See legend on page 14.

The following table shows the reconciliation of stockholders' equity to tangible equity and the tangible equity ratio 1:

                    Total                                                                       
                     assets $ 7,727,515 $  11,566,382 $  11,597,393 $  11,955,952 $  12,865,356 
                    Goodwill 
                     and                                                                        
                     other                                                                      
                     intang-                                                                      
                     ibles     (452,698)     (753,899)     (751,529)     (748,066)     (772,390)
                           ------------   -----------   -----------   -----------   ----------- 
                    Tangible                                                                      
                     assets   7,274,817    10,812,483    10,845,864    11,207,886    12,092,966 
                           ------------   -----------   -----------   -----------   ----------- 
                    Stock-                                                                      
                     holders'                                                                         
                     equity   1,080,543     1,623,110     1,652,204     1,665,073     1,698,133 
                    Goodwill                                                                      
                     and                                                                        
                     other                                                                      
                     intang-
                     ibles     (452,698)     (753,899)     (751,529)     (748,066)     (772,390)
                           ------------   -----------   -----------   -----------   ----------- 
                    Tangible                                                                      
                     stock                                                                      
                     holders'                                                                        
                     equity     627,845       869,211       900,675       917,007       925,743 
                                                                                                
                    Common                                                                      
                     stock                                                                      
                     outstanding                                                                      
                     at                                                                       
                     period                                                                      
                     end     91,121,531   129,709,834   129,769,569   130,006,926   130,548,989 
                    Tangible                                                                      
                     equity                                                                      
                     as                                                                       
                     a %                                                                        
                     of                                                                         
                     tangible                                                                        
                     assets        8.63%         8.04%         8.30%         8.18%         7.66%
                    Tangible                                                                         
                     book                                                                       
                     value                                                                      
                     per                                                                        
                     share $       6.89 $        6.70 $        6.94 $        7.05 $        7.09 
                                                                                                
                                                                                                
                                                                                                
                    

The following table shows the reconciliation of return on average tangible equity and core return on average tangible equity 2:

                    Average                                                                     
                     stockholders'                                                              
                     equity             $1,031,809 $1,100,897  $1,639,458 $1,661,282 $1,686,274 
                    Average goodwill                                                            
                     and other                                                                  
                     intangibles          (438,970)  (455,320)   (752,701)  (750,334)  (747,412)
                                        ---------- ----------  ---------- ---------- ---------- 
                    Average tangible                                                            
                     stockholders'                                                              
                     equity                592,839    645,577     886,757    910,948    938,862 
                    Net income (loss)       16,778     (7,646)     24,193     32,791     23,766 
                    Net income (loss),                                                          
                     if annualized          68,044    (30,668)     95,983    130,095     95,586 
                    Return on average                                                           
                     tangible equity         11.48%     (4.75)%     10.82%     14.28%     10.18%
                      Core net income                                                           
                       (see                                                                     
                       reconciliation                                                           
                       on page 13)      $   18,501 $   21,361  $   32,035 $   33,525 $   32,159 
                    Annualized core net                                                         
                     income                 75,032     85,679     127,095    133,007    129,343 
                    Core return on                                                              
                     average tangible                                                           
                     equity                  12.66%     13.27%      14.33%     14.60%     13.78%
                                                                                                
                                                                                                
                                                                                                
                    

The following table shows the reconciliation of return on tangible assets and core return on tangible assets3:

                    Average assets   $7,438,314 $8,049,220  $11,242,870 $11,622,621 $12,001,370 
                    Average goodwill                                                            
                     and other                                                                  
                     intangibles       (438,970)  (455,320)    (752,701)   (750,334)   (747,412)
                                     ---------- ----------  ----------- ----------- ----------- 
                    Average tangible                                                            
                     assets           6,999,344  7,593,900   10,490,169  10,872,287  11,253,958 
                    Net income                                                                  
                     (loss)              16,778     (7,646)      24,193      32,791      23,766 
                    Net income                                                                  
                     (loss), if                                                                 
                     annualized          68,044    (30,668)      95,983     130,095      95,586 
                    Return on                                                                   
                     average                                                                    
                     tangible assets       0.97%     (0.40)%       0.91%       1.20%       0.85%
                    Core net income                                                             
                     (see                                                                       
                     reconciliation                                                             
                     on page                                                                    
                    13)              $   18,501 $   21,361  $    32,035 $    33,525 $    32,159 
                    Annualized core                                                             
                     net income          75,032     85,679      127,095     133,007     129,343 
                    Core return on                                                              
                     average                                                                    
                     tangible assets       1.07%      1.13%        1.21%       1.22%       1.15%
                    
                                                                                                
                                                                                                
                                                                                                
                    Sterling Bancorp and Subsidiaries                                           
                    NON-GAAP FINANCIAL MEASURES                                                 
                    (unaudited, in thousands, except share and per share data)                  
                    
                                                                                                
                                                                                                
                                                    As of and for the Quarter Ended             
                                          ------------------------------------------------------
                                          3/31/2015  6/30/2015  9/30/2015  12/31/2015 3/31/2016 
                                          ---------- ---------- ---------- ---------- ----------
                    

The Company provides supplemental reporting of non-GAAP measures as management believes this information is useful to investors. See legend on page 14.

The following table shows the reconciliation of the core operating efficiency ratio 4:

                    Net interest income       $  58,867 $  63,574 $  93,354 $  95,421 $  93,510 
                    Non-interest income          14,010    13,857    18,802    16,081    15,430 
                                              --------- --------- --------- --------- --------- 
                    Total net revenue            72,877    77,431   112,156   111,502   108,940 
                    Tax equivalent adjustment                                                   
                     on securities interest                                                     
                     income                       1,544     1,562     1,707     1,692     2,091 
                    Net (gain) loss on sale                                                     
                     of securities               (1,534)     (697)   (2,726)      121       283 
                                              --------- --------- --------- --------- --------- 
                    Core total revenue           72,887    78,296   111,137   113,315   111,314 
                                              --------- --------- --------- --------- --------- 
                    Non-interest expense         45,921    85,659    71,315    57,419    68,931 
                    Merger-related expense       (2,455)  (14,625)        -         -      (265)
                    Charge for asset write-                                                     
                     downs, banking systems                                                     
                     conversion, retention                                                      
                     and severance                 (971)  (28,055)        -         -    (2,485)
                    Charge on benefit plan                                                      
                     settlement                       -         -   (13,384)        -         - 
                    Loss on extinguishment of                                                   
                     FHLB borrowings                  -         -         -         -    (8,716)
                    Amortization of                                                             
                     intangible assets           (1,399)   (1,780)   (3,431)   (3,431)   (3,053)
                                              --------- --------- --------- --------- --------- 
                    Core non-interest expense    41,096    41,199    54,500    53,988    54,412 
                    Core operating efficiency                                                   
                     ratio                         56.4%     52.6%     49.0%     47.6%     48.9%
                                                                                                
                                                                                                
                                                                                                
                    

/EINPresswire.com/ -- The following table shows the reconciliation of core net income and core earnings per share5:

                                                                                                
                    Income                                                                      
                     (loss)                                                                     
                     before                                                                     
                     income tax                                                                 
                     expense     $    24,856 $   (11,328)$     35,841 $     48,583 $     36,009 
                    Income tax                                                                  
                     expense                                                                    
                     (benefit)         8,078      (3,682)      11,648       15,792       12,243 
                                 ----------- ----------- ------------ ------------ ------------ 
                    Net income                                                                  
                     (loss)           16,778      (7,646)      24,193       32,791       23,766 
                                                                                                
                    Net (gain)                                                                  
                     loss on                                                                    
                     sale of                                                                    
                     securities       (1,534)       (697)      (2,726)         121          283 
                    Merger-                                                                     
                     related                                                                    
                     expense           2,455      14,625            -            -          265 
                    Charge for                                                                  
                     asset                                                                      
                     write-                                                                     
                     downs,                                                                     
                     banking                                                                    
                     systems                                                                    
                     conversion,                                                                
                     retention                                                                  
                     and                                                                        
                     severance           971      28,055            -            -        2,485 
                    Charge on                                                                   
                     benefit                                                                    
                     plan                                                                       
                     settlement            -           -       13,384            -            - 
                    Loss on                                                                     
                     extinguishm                                                                
                     ent of FHLB                                                                
                     borrowings            -           -            -            -        8,716 
                    Amortization                                                                
                     of non-                                                                    
                     compete                                                                    
                     agreements                                                                 
                     and                                                                        
                     acquired                                                                   
                     customer                                                                   
                     list                                                                       
                     intangible                                                                 
                     assets              660         991          961          961          968 
                                 ----------- ----------- ------------ ------------ ------------ 
                    Total                                                                       
                     charges           2,552      42,974       11,619        1,082       12,717 
                    Income tax                                                                  
                     (benefit)          (829)    (13,967)      (3,777)        (348)      (4,324)
                                 ----------- ----------- ------------ ------------ ------------ 
                    Total non-                                                                  
                     core                                                                       
                     charges net                                                                
                     of taxes          1,723      29,007        7,842          734        8,393 
                                 ----------- ----------- ------------ ------------ ------------ 
                    Core net                                                                    
                     income      $    18,501 $    21,361 $     32,035 $     33,525 $     32,159 
                                 =========== =========== ============ ============ ============ 
                    Weighted                                                                    
                     average                                                                    
                     diluted                                                                    
                     shares       88,252,768  91,950,776  130,192,937  130,354,779  130,500,975 
                    Diluted EPS                                                                 
                     as reported $      0.19 $     (0.08)$       0.19 $       0.25 $       0.18 
                    Core diluted                                                                
                     EPS                                                                        
                     (excluding                                                                 
                     total                                                                      
                     charges)           0.21        0.23         0.25         0.26         0.25 
                                                                                                
                                                                                                
                                                                                                
                    

Sterling Bancorp and Subsidiaries        
NON-GAAP FINANCIAL MEASURES        
(unaudited, in thousands, except share and per share data)        

                                                                                                
                                                   As of and for the Quarter Ended              
                                     -----------------------------------------------------------
                                      3/31/2015   6/30/2015   9/30/2015  12/31/2015   3/31/2016 
                                     ----------- ----------- ----------- ----------- -----------
                    

The Company provides supplemental reporting of non-GAAP measures as management believes this information is useful to investors. See legend below.

The following table shows a reconciliation of the allowance for loan losses and remaining purchase accounting adjustments to portfolio loans 6:

                    Allowance for loan                                                          
                     losses              $   42,884 $   44,317 $   47,611 $   50,145 $   53,014 
                    Remaining purchase                                                          
                     accounting                                                                 
                     adjustments:                                                               
                      Acquired                                                                  
                       performing loans       4,388     36,889     31,364     24,766     27,340 
                      Purchased credit                                                          
                       impaired loans           724     18,014     17,783     16,617     16,862 
                                         ---------- ---------- ---------- ---------- ---------- 
                        Total remaining                                                         
                         purchase                                                               
                         accounting                                                             
                         adjustments          5,112     54,903     49,147     41,383     44,202 
                                         ---------- ---------- ---------- ---------- ---------- 
                    Total valuation                                                             
                     balances recorded                                                          
                     against portfolio                                                          
                     loans               $   47,996 $   99,220 $   96,758 $   91,528 $   97,216 
                                         ========== ========== ========== ========== ========== 
                                                                                                
                    Total portfolio                                                             
                     loans, gross        $4,938,906 $7,235,587 $7,525,632 $7,859,360 $8,286,163 
                    Remaining purchase                                                          
                     accounting                                                                 
                     adjustments:                                                               
                      Acquired                                                                  
                       performing loans       4,388     36,889     31,364     24,766     27,340 
                                         ---------- ---------- ---------- ---------- ---------- 
                      Purchased credit                                                          
                       impaired loans           724     18,014     17,783     16,617     16,862 
                                         ========== ========== ========== ========== ========== 
                    Adjusted portfolio                                                          
                     loans, gross        $4,944,018 $7,290,490 $7,574,779 $7,900,743 $8,330,365 
                    Allowance for loan                                                          
                     losses to total                                                            
                     portfolio loans,                                                           
                     gross                     0.87%      0.61%      0.63%      0.64%      0.64%
                    Total valuation                                                             
                     balances recorded                                                          
                     against portfolio                                                          
                     loans to adjusted                                                          
                     gross portfolio                                                            
                     loans                     0.97%      1.36%      1.28%      1.16%      1.17%
                    

The non-GAAP measures presented above 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 above 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.

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

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

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

5 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.

6 The reconciliation of the allowance for loan losses and remaining purchase accounting adjustments to portfolio loans provides information to evaluate the impact of purchase accounting adjustments and the allowance for loan losses on our 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 the loan which includes an estimate of life of loan losses on the portfolio, which is included as a purchase discount within the acquired loan population.

Sterling Bancorp
400 Rella Boulevard
Montebello, NY 10901-4243
T 845.369.8040
F 845.369.8255
http://www.sterlingbancorp.com

STERLING BANCORP CONTACT:
Luis Massiani
SEVP & Chief Financial Officer
845.369.8040


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