STL - Sterling Bancorp announces strong operating results for the fourth quarter of 2019 with diluted earnings per share available to common stockholders of $0.52 (as reported) and $0.54 (as adjusted). Highlights include continued progress in balance sheet tran

January, 22 2020 04:10 PM Sterling Bancorp

Key Performance Highlights for the Twelve Months ended December 31, 2019 vs. December 31, 2018

($ in thousands except per share amounts)
GAAP / As Reported

Non-GAAP / As Adjusted¹

12/31/2018

12/31/2019

Change % / bps

12/31/2018

12/31/2019

Change % / bps
Total revenue²
$
1,070,600


$
1,049,788


(1.9
)%

$
1,085,819


$
1,051,395


(3.2
)%
Net income available to common

439,276



419,108


(4.6
)


449,645



426,891


(5.1
)
Diluted EPS available to common

1.95



2.03


4.1



2.00



2.07


3.5

Net interest margin³

3.51
%


3.43
%

(8
)


3.57
%


3.49
%

(8
)
Return on average tangible common equity

17.87



16.42


(145
)


18.29



16.73


(156
)
Return on average tangible assets

1.51



1.48


(3
)


1.55



1.51


(4
)
Tangible book value per common share¹
$
11.78


$
13.09


11.1
%

$
11.78


$
13.09


11.1
%

Net income available to common stockholders of $419.1 million (as reported) and $426.9 million (as adjusted).
Total commercial loans of $19.0 billion at December 31, 2019; growth of 17.2% over December 31, 2018.
Operating efficiency ratio of 44.2% (as reported) and 40.1% (as adjusted)⁴.
Repurchased 19,312,694 common shares in 2019 at a weighted average price of $19.83 per share.
Tangible book value per common share¹ of $13.09; growth of 11.1% over December 31, 2018.

Key Performance Highlights for the Three Months ended December 31, 2019 vs. December 31, 2018

($ in thousands except per share amounts)
GAAP / As Reported

Non-GAAP / As Adjusted¹

12/31/2018

12/31/2019

Change % / bps

12/31/2018

12/31/2019

Change % / bps
Total revenue²
$
265,346


$
260,638


(1.8
)%

$
274,247


$
264,457


(3.6
)%
Net income available to common

112,501



104,722


(6.9
)


116,458



108,855


(6.5
)
Diluted EPS available to common

0.51



0.52


2.0



0.52



0.54


3.8

Net interest margin³

3.48
%


3.37
%

(11
)


3.53
%


3.42
%

(11
)
Return on average tangible common equity

17.56



15.94


(162
)


18.17



16.57


(160
)
Return on average tangible assets

1.53



1.45


(8
)


1.58



1.51


(7
)

Growth in commercial loans of $791.3 million over linked quarter; 17.2% annualized growth rate.
Total deposits were $22.4 billion with a cost of 0.89%. Municipal deposit balances decreased by $246.6 million.
Decrease in total interest expense of $4.7 million and decrease in total funding liabilities of 10 basis points relative to linked quarter.
Excluding accretion income on acquired loans, net interest margin was 3.13%.
Consolidated five financial centers in the fourth quarter of 2019; a total of 24 consolidated in 2019. Total of 82 financial centers open as of December 31, 2019.
Issued $275.0 million of Tier 2 regulatory capital qualifying subordinated notes.
Completed the previously announced acquisition of an $838.9 million equipment finance loan and lease portfolio.

1.

Non-GAAP / as adjusted measures are defined in the non-GAAP tables beginning on page 18.
2.

Total revenue is equal to net interest income plus non-interest income. Total revenue as adjusted is equal to tax equivalent net interest income plus non-interest income excluding securities gains and losses and gain on termination of a pension plan.
3.

Net interest margin is equal to net interest income divided by average interest earning assets. Net interest margin as adjusted, or tax equivalent net interest margin, is equal to net interest income plus the tax equivalent adjustment for tax exempt securities divided by average interest earning assets. The tax equivalent adjustment assumes a 21% federal tax rate in all periods presented.
4.

Operating efficiency ratio is a non-GAAP measure. See page 21 for an explanation of the operating efficiency ratio.

MONTEBELLO, N.Y., Jan. 22, 2020 (GLOBE NEWSWIRE) -- Sterling Bancorp (NYSE: STL) (the “Company”), the parent company of Sterling National Bank (the “Bank”), today announced results for the three and twelve months ended December 31, 2019. Net income available to common stockholders for the quarter ended December 31, 2019 was $104.7 million, or $0.52 per diluted share, compared to net income available to common stockholders of $120.5 million, or $0.59 per diluted share, for the linked quarter ended September 30, 2019, and net income available to common stockholders of $112.5 million, or $0.51 per diluted share, for the three months ended December 31, 2018.

Net income available to common stockholders for the year ended December 31, 2019 was $419.1 million, or $2.03 per diluted share, compared to net income available to common stockholders of $439.3 million, or $1.95 per diluted share, for the year ended December 31, 2018.

President’s Comments
Jack Kopnisky, President and Chief Executive Officer, commented: “We delivered strong operating performance in 2019, continuing to grow our commercial businesses, transitioning our balance sheet, managing our funding costs and driving operational efficiency. In the fourth quarter of 2019, our adjusted net income available to common stockholders was $108.9 million and our adjusted diluted earnings per share available to common stockholders (“adjusted EPS”) was $0.54. Our profitability metrics remained strong, including adjusted return on average tangible assets of 1.51% and adjusted return on average tangible common equity of 16.6%. We continue to deliver on our track record of growth and profitability. Over the past five years, our adjusted EPS has grown at a compound annual growth rate (“CAGR”) of 21.3%, and our tangible book value per common share has grown at a CAGR of 15.1%.

“Our commercial businesses have strong momentum. We grew spot commercial loan balances by $791.3 million in the fourth quarter of 2019 and $2.8 billion since December 31, 2018. In the same periods, run-off of residential mortgage loans was $160.1 million and $623.9 million, respectively. At December 31, 2019, our loan portfolio consisted of 88.6% in total commercial loans, in-line with our target of commercial loans representing at least 85.0% of our total loan portfolio. We continue to exercise discipline on new loan originations and have augmented our growth through opportunistic portfolio acquisitions, focusing on diversified commercial asset classes where we can achieve our target risk-adjusted returns.

“We continue to focus on generating deposit growth through full client relationships. Total deposits were $22.4 billion and the cost of total deposits was 0.89% in the fourth quarter of 2019, which represented a three basis points decline in cost compared to the third quarter of 2019. The improving market conditions and competitive dynamics in our deposit markets is evident in our ability to reduce the cost of interest bearing deposits by twelve basis points in the fourth quarter of 2019 relative to the linked quarter. We have also created a more optimal overall funding mix, reducing our total interest expense by $4.7 million relative to the linked quarter. We anticipate the current interest rate environment and pricing strategies we have implemented will allow us to further reduce our cost of total funding liabilities. In the fourth quarter of 2019, our cost of total funding liabilities was 1.06%, a decrease of 10 basis points relative to the linked quarter.

“The low interest rate environment and flat yield curve continued to pressure our interest earning asset and loan origination yields, as our tax equivalent yield excluding accretion income on acquired loans was 3.13% in the fourth quarter of 2019 compared to 3.15% for the linked quarter. Our net interest margin was impacted by higher average cash balances in the fourth quarter, which increased by $269.0 million relative to the linked quarter and were a result of funding needs for the acquisition of the equipment finance loan and lease portfolio. We estimate the higher cash balances negatively impacted our net interest margin by approximately four basis points. Although net interest margin decreased, our growth, asset mix and funding composition allowed us to grow net interest income by $4.9 million in the fourth quarter of 2019 relative to the linked quarter.

“We continue to maintain strong controls over operating expenses. During the fourth quarter of 2019, we consolidated five financial centers, bringing our total to 24 financial centers consolidated in 2019. Our financial center count was 82 at December 31, 2019, and we anticipate our total financial centers will decrease below 80 in 2020. In the fourth quarter of 2019, our annualized adjusted operating expenses were $418.7 million and our adjusted operating efficiency ratio was 39.9%.

“We constantly evaluate alternatives to increase our operational efficiency and effectiveness. To that end, we executed several corporate actions during the quarter. First, we completed the issuance of $275.0 million of subordinated notes that will be used in part to redeem the senior notes maturing in June 2020 that we assumed in the merger with Astoria Financial Corp. (the “Astoria Merger”). Second, we completed our previously announced equipment finance portfolio acquisition with total balances at acquisition of $838.9 million in November 2019. This portfolio was integrated into our equipment finance portfolio.

“Our tangible common equity ratio was 9.03% and our estimated Tier 1 Leverage ratio was 9.55% at December 31, 2019. Our tangible book value per common share was $13.09, which represented an increase of 11.1% from a year ago. Our ample capital position and strong internal capital generation will support our growth strategy and allow us to return capital to stockholders. In the fourth quarter of 2019, we repurchased 4,000,000 common shares.

“We have created a Company with significant operating flexibility and are confident that our business mix, growth strategy and strong capital position will allow us to continue generating superior returns and earnings per share growth. We would like to thank our clients, colleagues and shareholders for your support and look forward to working with all of our partners as we continue to build a great company.

“Lastly, we have declared a dividend on our common stock of $0.07 per share payable on February 18, 2020 to holders of record as of February 3, 2020.”

Reconciliation of GAAP Results to Adjusted Results (non-GAAP)
The Company’s GAAP net income available to common stockholders of $104.7 million, or $0.52 per diluted share, for the fourth quarter of 2019, included the following items:

a pre-tax charge of $5.1 million for asset write-downs, systems integration, retention and severance related to the equipment finance loan portfolio acquisition;
a pre-tax loss of $280 thousand related to the termination of the legacy Astoria defined benefit pension plan;
a pre-tax loss of $76 thousand on the sale of available for sale securities; and
the pre-tax amortization of non-compete agreements and acquired customer list intangible assets of $200 thousand.

Excluding the impact of these items, adjusted net income available to common stockholders was $108.9 million, or $0.54 per diluted share, for the three months ended December 31, 2019.

Non-GAAP financial measures include references to the terms “adjusted” or “excluding”. See the reconciliation of the Company’s non-GAAP financial measures beginning on page 18.

Net Interest Income and Margin

($ in thousands)
For the three months ended

Change % / bps

12/31/2018

9/30/2019

12/31/2019

Y-o-Y

Linked Qtr
Interest and dividend income
$
313,197


$
295,209


$
295,474


(5.7
%)

0.1
%
Interest expense
70,326


71,888


67,217


(4.4
)

(6.5
)
Net interest income
$
242,871


$
223,321


$
228,257


(6.0
)

2.2











Accretion income on acquired loans
$
27,016


$
17,973


$
19,497


(27.8
)%

8.5
%
Yield on loans
5.07
%

4.97
%

4.84
%

(23
)

(13
)
Tax equivalent yield on investment securities
2.92


2.85


2.89


(3
)

4

Tax equivalent yield on interest earning assets
4.54


4.50


4.41


(13
)

(9
)
Cost of total deposits
0.77


0.92


0.89


12


(3
)
Cost of interest bearing deposits
0.97


1.16


1.10


13


(6
)
Cost of borrowings
2.43


2.41


2.38


(5
)

(3
)
Cost of interest bearing liabilities
1.28


1.40


1.28


—


(12
)
Total cost of funding liabilities⁵
1.07


1.16


1.06


(1
)

(10
)
Tax equivalent net interest margin⁶
3.53


3.42


3.42


(11
)

—











Average commercial loans
$
15,741,665


$
17,596,552


$
18,473,473


17.4
%

5.0
%
Average loans, including loans held for sale
20,389,223


20,302,887


21,000,949


3.0


3.4

Average cash balances
291,460


304,820


573,861


96.9


88.3

Average investment securities
6,685,989


5,439,886


5,064,936


(24.2
)

(6.9
)
Average total interest earning assets
27,710,655


26,354,394


26,901,439


(2.9
)

2.1

Average deposits and mortgage escrow
21,352,428


20,749,885


22,289,097


4.4


7.4

⁵Include interest bearing liabilities and non-interest bearing deposits.
⁶ Tax equivalent net interest margin is equal to net interest income plus the tax equivalent adjustment for tax exempt securities divided by average interest earning assets. The tax equivalent adjustment is assumed at a 21% federal tax rate in all periods presented.

Fourth quarter 2019 compared with fourth quarter 2018
Net interest income was $228.3 million for the quarter ended December 31, 2019, a decrease of $14.6 million compared to the fourth quarter of 2018. This was mainly due to a $809.2 million decline in average total interest earning assets and a decrease in accretion income on acquired loans of $7.5 million. Other key components of the changes in net interest income and net interest margin for the fourth quarter of 2019 compared to the fourth quarter of 2018 were the following:

The yield on loans was 4.84% compared to 5.07% for the three months ended December 31, 2018. The decrease in yield on loans was mainly due to the decline in accretion income on acquired loans, which was $19.5 million in the fourth quarter of 2019 compared to $27.0 million in the fourth quarter of 2018. The decrease in yield on loans was also due to the decline in market interest rates during 2019.
The tax equivalent yield on investment securities was 2.89% compared to 2.92% for the three months ended December 31, 2018. Average investment securities were $5.1 billion, or 18.8%, of average total interest earning assets for the fourth quarter of 2019 compared to $6.7 billion, or 24.1%, of average total interest earning assets for the fourth quarter of 2018. The decline in the average balance of investment securities was mainly due to our balance sheet transition strategy.
In the fourth quarter of 2019, average cash balances were $573.9 million compared to $291.5 million in the fourth quarter of 2018. We maintained higher cash in the fourth quarter of 2019 in anticipation of closing the equipment finance loan portfolio acquisition. We estimate the increased level of cash on hand had an unfavorable impact on our tax equivalent net interest margin of approximately four basis points.
The tax equivalent yield on interest earning assets decreased thirteen basis points to 4.41%.
The cost of total deposits was 89 basis points for the fourth quarter of 2019 compared to 77 basis points for the same period a year ago. The increase was mainly due to interest rate market conditions and competitive dynamics in our deposit markets.
The cost of borrowings was 2.38% for the fourth quarter of 2019 compared to 2.43% for the same period a year ago. The decline in cost of borrowings was mainly due to the maturity of higher cost Federal Home Loan Bank (“FHLB”) borrowings.
The total cost of interest bearing liabilities was unchanged at 1.28%, which was mainly due to the factors discussed above.
Average interest bearing deposits increased by $899.3 million and average borrowings decreased $1.8 billion compared to the fourth quarter of 2018.
Total interest expense decreased by $3.1 million compared to the fourth quarter of 2018.

The tax equivalent net interest margin was 3.42% for the fourth quarter of 2019 compared to 3.53% for the fourth quarter of 2018. The decrease in tax equivalent net interest margin was mainly due to the increase in the cost of interest bearing liabilities and the decrease in accretion income on acquired loans. Excluding accretion income, tax equivalent net interest margin was 3.13% for the fourth quarter of 2019 compared to 3.15% for the fourth quarter of 2018.

Fourth quarter 2019 compared with linked quarter ended September 30, 2019
Net interest income increased $4.9 million for the quarter ended December 31, 2019 compared to the linked quarter. The increase in net interest income was mainly due to a decrease in interest expense on borrowings as a result of lower rates paid on borrowings and lower average balances. Other key components of the changes in net interest income and net interest margin for the fourth quarter of 2019 compared to the linked quarter were the following:

The yield on loans was 4.84% compared to 4.97% for the linked quarter. The decrease in the yield on loans was mainly due to the decline in market interest rates between the periods. Accretion income on acquired loans increased $1.5 million to $19.5 million for the fourth quarter of 2019 compared to $18.0 million in the linked quarter, which was mainly due to the pay-off of one purchase credit impaired loan.
The average balance of commercial loans increased by $876.9 million and the average balance of residential mortgage loans declined by $159.7 million, both compared to the linked quarter.
The tax equivalent yield on investment securities was 2.89% compared to 2.85% for the linked quarter. The increase in yield was mainly due to earlier sales of lower yielding securities.
The tax equivalent yield on interest earning assets was 4.41% compared to 4.50% in the linked quarter.
The cost of total deposits decreased three basis points to 89 basis points, mainly due to improving market conditions in our deposit markets and our pricing strategies. The total cost of borrowings declined three basis points to 2.38% due to changes in market rates of interest and maturities of higher cost FHLB borrowings.
Average interest bearing deposits increased by $1.4 billion and average borrowings decreased by $982.4 million relative to the linked quarter. The increase in average deposits was due to growth in commercial and consumer deposits of $297.3 million, on-line deposit growth of $314.5 million, growth in municipal deposits of $257.0 million, and growth in wholesale deposits of $534.0 million.

Total interest expense decreased $4.7 million from the linked quarter.

The tax equivalent net interest margin was 3.42% in the current quarter and linked quarter. Excluding accretion income on acquired loans, tax equivalent net interest margin was 3.13% compared to 3.15% in the linked quarter. Based on a more normalized level of average cash balances and continued proactive management of funding costs, we anticipate we will be able to maintain a tax equivalent net interest margin excluding accretion income on acquired loans of 3.15% to 3.25% in 2020.

Non-interest Income

($ in thousands)
For the three months ended

Change %

12/31/2018

9/30/2019

12/31/2019

Y-o-Y

Linked Qtr
Total non-interest income
$
22,475


$
51,830

$
32,381


44.1
%

(37.5
)%
Net (loss) gain on sale of securities

(4,886
)


6,882


(76
)

NM


NM

Gain (loss) on termination of pension plan

—



12,097


(280
)

NM


NM

Adjusted non-interest income
$
27,361


$
32,851

$
32,737


19.6


(0.3
)

Fourth quarter 2019 compared with fourth quarter 2018
Adjusted non-interest income increased $5.4 million in the fourth quarter of 2019 to $32.7 million, compared to $27.4 million in the same quarter last year. The change was mainly due to higher loan commissions and fees generated by our commercial banking teams and income from bank owned life insurance (“BOLI”).

In the fourth quarter of 2019, we realized a loss of $76 thousand on the sale of available for sale securities compared to a $4.9 million loss in the year earlier period. We are managing our securities balances relative to our longer-term target of 15% of earning assets over time.

We terminated the defined benefit pension plan assumed in the Astoria Merger during the third quarter of 2019 and recorded a gain of $12.1 million. In fourth quarter of 2019, we incurred professional and administrative fees which reduced income by $280 thousand.

Fourth quarter 2019 compared with linked quarter ended September 30, 2019
Adjusted non-interest income decreased approximately $114 thousand from $32.9 million in the linked quarter to $32.7 million in the fourth quarter of 2019. The decrease was due to a decline in BOLI income. BOLI income was $8.1 million in the third quarter of 2019 and $4.8 million in the fourth quarter of 2019. BOLI income in the third quarter of 2019 included the restructuring of the BOLI assets acquired in the Astoria Merger. Other commissions and loan fees increased by $2.4 million in the fourth quarter of 2019, substantially offsetting the decline in BOLI income. The increase in other commissions and loan fees was driven by loan sales and syndications in our public sector finance and equipment finance loan portfolios.

Non-interest Expense

($ in thousands)
For the three months ended

Change % / bps

12/31/2018

9/30/2019

12/31/2019

Y-o-Y

Linked Qtr
Compensation and benefits
$
54,677


$
52,850


$
52,453


(4.1
)%

(0.8
)%
Stock-based compensation plans
3,679


4,565


5,180


40.8


13.5

Occupancy and office operations
16,579


15,836


15,886


(4.2
)

0.3

Information technology
8,761


8,545


9,313


6.3


9.0

Amortization of intangible assets
5,865


4,785


4,785


(18.4
)

—

FDIC insurance and regulatory assessments
3,608


3,194


3,134


(13.1
)

(1.9
)
Other real estate owned (“OREO”), net
15


79


(132
)

(980.0
)

(267.1
)
Charge for asset write-downs, systems integration, retention and severance
—


—


5,133


NM


NM

Other expenses
16,737


16,601


19,698


17.7


18.7

Total non-interest expense
$
109,921


$
106,455


$
115,450


5.0


8.4

Full time equivalent employees (“FTEs”) at period end
1,907


1,689


1,639


(14.1
)

(3.0
)
Financial centers at period end
106


87


82


(22.6
)

(5.7
)
Operating efficiency ratio, as reported
41.4
%

38.7
%

44.3
%

(290
)

(560
)
Operating efficiency ratio, as adjusted
38.0


39.1


39.9


(190
)

(80
)

Fourth quarter 2019 compared with fourth quarter 2018
Total non-interest expense increased $5.5 million relative to the fourth quarter of 2018. Key components of the change in non-interest expense between the periods were the following:

Compensation and benefits decreased $2.2 million, mainly due to a decline in total FTEs between the periods. Total FTEs declined to 1,639 from 1,907, which was mainly due to our ongoing financial center consolidation strategy following the Astoria Merger. This was partially offset by the hiring of commercial bankers, business development officers and risk management personnel.
Occupancy and office operations expense decreased $693 thousand, mainly due to the consolidation of financial centers and other back-office locations. We consolidated a total of 24 locations in 2019.
Information technology expense increased $552 thousand, mainly due to incremental costs incurred for automation and information security.
FDIC insurance and regulatory assessments decreased $474 thousand to $3.1 million in the fourth quarter of 2019, compared to $3.6 million in the fourth quarter of 2018. The decrease was a result of a reduction in FDIC deposit insurance assessments, which was mainly due to the termination of the quarterly Deposit Insurance Fund surcharge that was assessed to institutions with $10 billion or more in assets in 2018.
OREO expense, net, declined $147 thousand to income of $132 thousand for the fourth quarter of 2019. In the fourth quarter of 2019, OREO expense, net, included gain on sale of $542 thousand, which was offset by $217 thousand of write-downs and $242 thousand of operating costs.
Other expenses increased $3.0 million to $19.7 million, which was mainly due to higher marketing expense, higher professional fees and net costs related to retirement plans. The increase in marketing expense was due to deposit gathering strategies, client communications and our website redesign. The increase in professional fees was mainly due to loan collection matters.

Fourth quarter 2019 compared with linked quarter ended September 30, 2019
Total non-interest expense increased $9.0 million to $115.5 million in the fourth quarter of 2019. In the fourth quarter, we recorded a charge for asset write-downs, systems integration, retention and severance of $5.1 million related to the equipment finance loan portfolio acquisition. Excluding the charge, non-interest expense increased $3.9 million in the fourth quarter compared to the linked quarter ended September 30, 2019. Key components of the change in non-interest expense were the following:

Compensation and benefits decreased $397 thousand to $52.5 million in the fourth quarter of 2019. The decrease was mainly due to a decrease in FTEs, from 1,689 at September 30, 2019 to 1,639 at December 31, 2019.

The increase in information technology and other expenses, which was associated with higher marketing expense and higher net costs related to retirement plans, were due to the same factors as discussed above.

Taxes
We recorded income tax expense at an estimated effective tax rate of 21.0% for the three months ended December 31, 2019 and the year ended December 31, 2019. In the fourth quarter of 2019, we also recorded a reduction in income tax expense of $363 thousand due to vesting of stock-based compensation, which resulted in a tax expense at a rate of 20.7% for the quarter. For the three months ended September 30, 2019 and December 31, 2018, we recorded income tax expense at an estimated effective income tax rate of 21.0%.

Key Balance Sheet Highlights as of December 31, 2019

($ in thousands)
As of

Change % / bps

12/31/2018

9/30/2019

12/31/2019

Y-o-Y

Linked Qtr
Total assets
$
31,383,307


$
30,077,665


$
30,586,497


(2.5
)%

1.7
%
Total portfolio loans, gross
19,218,530


20,830,163


21,440,212


11.6


2.9

Commercial & industrial (“C&I”) loans
6,533,386


7,792,569


8,232,719


26.0


5.6

Commercial real estate loans (including multi-family)
9,406,541


9,977,839


10,295,518


9.5


3.2

Acquisition, development and construction (“ADC”) loans
267,754


433,883


467,331


74.5


7.7

Total commercial loans
16,207,681


18,204,291


18,995,568


17.2


4.3

Residential mortgage loans
2,705,226


2,370,216


2,210,112


(18.3
)

(6.8
)
BOLI
653,995


609,720


613,848


(6.1
)

0.7

Core deposits⁷
19,998,967


20,296,395


20,548,459


2.7


1.2

Total deposits
21,214,148


21,579,324


22,418,658


5.7


3.9

Municipal deposits (included in core deposits)
1,751,670


2,234,630


1,988,047


13.5


(11.0
)
Investment securities
6,667,180


5,047,011


5,075,309


(23.9
)

0.6

Total borrowings
5,214,183


3,174,224


2,885,958


(44.7
)

(9.1
)
Loans to deposits
90.6
%

96.5
%

95.6
%

500


(90
)
Core deposits to total deposits
94.3


94.1


91.7


(260
)

(240
)
Investment securities to earning assets
25.2


19.1


18.8


(640
)

(30
)

⁷Core deposits include retail, commercial and municipal transaction, money market, savings accounts and certificates of deposit accounts, and reciprocal Certificate of Deposit Account Registry balances and exclude brokered and wholesale deposits.

Highlights in balance sheet items as of December 31, 2019 were the following:

C&I loans (which include traditional C&I, asset-based lending, payroll finance, warehouse lending, factored receivables, equipment financing and public sector finance loans) represented 38.4% of total portfolio loans; commercial real estate loans (which include multi-family loans) represented 48.0% of total portfolio loans; consumer and residential mortgage loans combined represented 11.4% of total portfolio loans; and ADC loans represented 2.2% of total portfolio loans, respectively. At December 31, 2018, C&I loans represented 34.0%; commercial real estate loans (which include multi-family loans) represented 48.9%; consumer and residential mortgage loans combined represented 15.7%; and ADC loans represented 1.4% of total portfolio loans, respectively. We continued making progress towards our goal of a loan mix comprised of 45% for each of C&I and commercial real estate loans and 10% other loans.
Total commercial loans, which include all C&I loans, commercial real estate (including multi-family) and ADC loans, increased by $791.3 million over the linked quarter and $2.8 billion since December 31, 2018. Growth in total commercial loans for 2019 included $1.2 billion of loans acquired in loan portfolio acquisitions and $1.6 billion of loans originated by our commercial banking teams.
ADC loans increased $33.4 million over the linked quarter and $199.6 million since December 31, 2018. The increase was mainly related to construction loans associated with our investments in affordable housing tax credits.
Residential mortgage loans held in our loan portfolio were $2.2 billion at December 31, 2019, a decline of $160.1 million from the linked quarter and a decline of $495.1 million from the same period a year ago. The decline was mainly due to repayments.

The balance of BOLI increased by $4.1 million relative to the prior quarter and was $613.8 million at December 31, 2019. BOLI declined $40.1 million in 2019, mainly due to the partial redemption of $60.5 million of legacy Astoria BOLI assets related to the BOLI restructuring executed in the third quarter of 2019.
Core deposits at December 31, 2019 were $20.5 billion and increased $252.1 million compared to September 30, 2019, and increased $549.5 million compared to December 31, 2018.
Total deposits at December 31, 2019 increased $839.3 million compared to September 30, 2019, and total deposits increased $1.2 billion compared to December 31, 2018. We increased wholesale deposits in the fourth quarter of 2019 to fund a portion of the equipment finance loan portfolio acquisition.
Municipal deposits at December 31, 2019 were $2.0 billion, a decrease of $246.6 million relative to September 30, 2019. This decrease was due to seasonal outflows. Historically, municipal deposits reach their annual peak at September 30.
Investment securities decreased by $1.6 billion from December 31, 2018, and represented 18.8% of earning assets at December 31, 2019. We sold securities during the past twelve months to fund commercial loan growth including loan portfolio acquisitions. We also sold securities to reduce the proportion of lower yielding assets as a percentage of total assets.
Total borrowings at December 31, 2019 were $2.9 billion, a decrease of $288.3 million relative to September 30, 2019 and $2.3 billion relative to December 31, 2018. The sale of securities and deposit inflows allowed us to reduce borrowings. Included in total borrowings is $270.9 million of subordinated notes issued by the Company in December 2019 (the notes have an aggregate principal amount of $275.0 million). A portion of the proceeds will be used to redeem the senior notes assumed in the Astoria Merger that mature in June 2020.

Credit Quality

($ in thousands)
For the three months ended

Change % / bps

12/31/2018

9/30/2019

12/31/2019

Y-o-Y

Linked Qtr
Provision for loan losses
$
10,500


$
13,700


$
10,585


0.8
%

(22.7
)%
Net charge-offs
6,188


13,629


9,082


46.8


(33.4
)
Allowance for loan losses
95,677


104,735


106,238


11.0


1.4

Non-performing loans
168,822


190,966


179,161


6.1


(6.2
)
Loans 30 to 89 days past due
97,201


64,756


52,880


(45.6
)

(18.3
)
Annualized net charge-offs to average loans
0.12
%

0.27
%

0.17
%

5


(10
)
Special mention loans
113,180


136,972


159,976


41.3


16.8

Substandard loans
266,047


277,975


295,428


11.0


6.3

Allowance for loan losses to total loans
0.50


0.50


0.50


—


—

Allowance for loan losses to non-performing loans
56.7


54.8


59.3


260


450

Provision for loan losses was $10.6 million for the quarter ended December 31, 2019, which was $1.5 million greater than net charge-offs. Net charge-offs of $9.1 million included charge-offs related to the work-out of two asset-based lending relationships that were fully exited and resolved during the quarter. Other charge-off activity was mainly due to equipment finance loans. Allowance coverage ratios were 0.50% of total loans and 59.3% of non-performing loans at December 31, 2019. Note that due to our various acquisitions and mergers, a significant portion of our loan portfolio does not carry an allowance for loan losses, as the acquired loans were recorded at their estimated fair value on the acquisition date.

Non-performing loans decreased by $11.8 million to $179.2 million at December 31, 2019 compared to the linked quarter, and net charge-offs were 17 basis points of total loans on an annualized basis. Loans 30 to 89 days past due decreased $11.9 million from the linked quarter.

Special mention loans increased $23.0 million and substandard loans increased $17.5 million in the fourth quarter of 2019 compared to the linked quarter. The increase in special mention and substandard loans was mainly due to loans in our commercial real estate and asset-based lending which are performing and well secured by collateral.

Capital

($ in thousands, except share and per share data)
As of

Change % / bps

12/31/2018

9/30/2019

12/31/2019

Y-o-Y

Linked Qtr
Total stockholders’ equity
$
4,428,853


$
4,520,967


$
4,530,113


2.3
%

0.2
%
Preferred stock
138,423


137,799


137,581


(0.6
)

(0.2
)
Goodwill and other intangible assets
1,742,578


1,772,963


1,793,846


2.9


1.2

Tangible common stockholders’ equity ⁸
$
2,547,852


$
2,610,205


$
2,598,686


2.0


(0.4
)
Common shares outstanding
216,227,852


202,392,884


198,455,324


(8.2
)

(1.9
)
Book value per common share
$
19.84


$
21.66


$
22.13


11.5


2.2

Tangible book value per common share⁸
11.78


12.90


13.09


11.2


1.5

Tangible common equity to tangible assets ⁸
8.60
%

9.22
%

9.03
%

43


(19
)
Estimated Tier 1 leverage ratio - Company
9.50


9.78


9.55


5


(23
)
Estimated Tier 1 leverage ratio - Bank
9.94


10.08


10.11


17


3











⁸See a reconciliation of non-GAAP financial measures beginning on page 18.

Total stockholders’ equity increased $9.1 million to $4.5 billion as of December 31, 2019 compared to September 30, 2019 and increased $101.3 million compared to December 31, 2018. For the fourth quarter of 2019, net income available to common stockholders of $104.7 million was offset by a decrease in accumulated other comprehensive income of $4.9 million, common dividends of $14.1 million, preferred dividends of $2.2 million and common stock repurchases of $81.9 million.

Total goodwill and other intangible assets were $1.8 billion at December 31, 2019, an increase of $20.9 million compared to September 30, 2019, which was due to the equipment finance loan and lease portfolio acquisition.

Basic and diluted weighted average common shares outstanding declined relative to the linked quarter by approximately 3.4 million shares and were 199.7 million shares and 200.3 million shares, respectively. Total common shares outstanding at December 31, 2019 were approximately 198.5 million. In the fourth quarter of 2019, we repurchased 4,000,000 shares of common stock at a weighted average price of $20.49 per share. Under our Board of Directors approved repurchase program, we have 1,572,535 shares remaining for repurchase at December 31, 2019.

Tangible book value per common share was $13.09 at December 31, 2019, which represented an increase of 11.2% over a year ago and an increase of 1.5% over September 30, 2019.

Conference Call Information
Sterling Bancorp will host a teleconference and webcast on Thursday, January 23, 2020 at 10:30 AM Eastern Time to discuss the Company’s results. Analysts, investors and interested parties are invited to listen to the webcast and view accompanying slides on the Company’s website at www.sterlingbancorp.com or by dialing (866) 548-4713, Conference ID #6117623. A replay of the teleconference can be accessed through the Company’s website.

About Sterling Bancorp
Sterling Bancorp, whose principal subsidiary is Sterling National Bank, specializes in the delivery of services and solutions to business owners, their families and consumers within the communities it serves through teams of dedicated and experienced relationship managers. Sterling National Bank offers a complete line of commercial, business, and consumer banking products and services. For more information, visit the Sterling Bancorp website at 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: business disruption; a failure to grow revenues faster than we grow expenses; a deterioration in general economic conditions, either nationally, internationally, or in our market areas, including extended declines in the real estate market and constrained financial markets; inflation; the effects of, and changes in, trade; changes in asset quality and credit risk; introduction, withdrawal, success and timing of business initiatives; capital management activities; customer disintermediation; and 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 Annual Report on Form 10-K for the twelve months ended December 31, 2019. 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 Annual Report on Form 10-K 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)












Assets:
12/31/2018

9/30/2019

12/31/2019
Cash and cash equivalents
$
438,110


$
545,603


$
329,151

Investment securities
6,667,180


5,047,011


5,075,309

Loans held for sale
1,565,979


4,627


8,125

Portfolio loans:





Commercial and industrial (“C&I”)
6,533,386


7,792,569


8,232,719

Commercial real estate (including multi-family)
9,406,541


9,977,839


10,295,518

ADC
267,754


433,883


467,331

Residential mortgage
2,705,226


2,370,216


2,210,112

Consumer
305,623


255,656


234,532

Total portfolio loans, gross
19,218,530


20,830,163


21,440,212

Allowance for loan losses
(95,677
)

(104,735
)

(106,238
)
Total portfolio loans, net
19,122,853


20,725,428


21,333,974

FHLB and Federal Reserve Bank Stock, at cost
369,690


276,929


251,805

Accrued interest receivable
107,111


104,881


100,312

Premises and equipment, net
264,194


238,723


227,070

Goodwill
1,613,033


1,657,814


1,683,482

Other intangibles
129,545


115,149


110,364

BOLI
653,995


609,720


613,848

Other real estate owned
19,377


13,006


12,189

Other assets
432,240


738,774


840,868

Total assets
$
31,383,307


$
30,077,665


$
30,586,497

Liabilities:





Deposits
$
21,214,148


$
21,579,324


$
22,418,658

FHLB borrowings
4,838,772


2,800,907


2,245,653

Other borrowings
21,338


26,544


22,678

Senior notes
181,130


173,652


173,504

Subordinated notes - Company
—


—


270,941

Subordinated notes - Bank
172,943


173,121


173,182

Mortgage escrow funds
72,891


84,595


58,316

Other liabilities
453,232


718,555


693,452

Total liabilities
26,954,454


25,556,698


26,056,384

Stockholders’ equity:





Preferred stock
138,423


137,799


137,581

Common stock
2,299


2,299


2,299

Additional paid-in capital
3,776,461


3,762,046


3,766,716

Treasury stock
(213,935
)

(501,814
)

(583,408
)
Retained earnings
791,550


1,075,503


1,166,709

Accumulated other comprehensive (loss) income
(65,945
)

45,134


40,216

Total stockholders’ equity
4,428,853


4,520,967


4,530,113

Total liabilities and stockholders’ equity
$
31,383,307


$
30,077,665


$
30,586,497







Shares of common stock outstanding at period end
216,227,852


202,392,884


198,455,324

Book value per common share
$
19.84


$
21.66


$
22.13

Tangible book value per common share¹
11.78


12.90


13.09

¹ See reconciliation of non-GAAP financial measures beginning on page 18.

Sterling Bancorp and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share and per share data)

For the Quarter Ended

For the Year ended

12/31/2018

9/30/2019

12/31/2019

12/31/2018

12/31/2019
Interest and dividend income:



















Loans and loan fees
$
260,417


$
254,414


$
256,377


$
1,006,496


$
1,029,369

Securities taxable
30,114


21,977


20,367


115,971


94,823

Securities non-taxable
15,104


13,491


13,031


61,062


55,802

Other earning assets
7,562


5,327


5,699


24,944


22,546

Total interest and dividend income
313,197


295,209


295,474


1,208,473


1,202,540

Interest expense:









Deposits
41,450


48,330


49,907


130,096


192,361

Borrowings
28,876


23,558


17,310


110,974


91,256

Total interest expense
70,326


71,888


67,217


241,070


283,617

Net interest income
242,871


223,321


228,257


967,403


918,923

Provision for loan losses
10,500


13,700


10,585


46,000


45,985

Net interest income after provision for loan losses
232,371


209,621


217,672


921,403


872,938

Non-interest income:









Deposit fees and service charges
6,511


6,582


6,506


26,830


26,398

Accounts receivable management / factoring commissions and other related fees
6,480


6,049


6,572


22,772


23,837

BOLI
4,060


8,066


4,770


15,651


20,670

Loan commissions and fees
4,066


6,285


8,698


16,181


24,129

Investment management fees
1,901


1,758


1,597


7,790


7,305

Net (loss) gain on sale of securities
(4,886
)

6,882


(76
)

(10,788
)

(6,905
)
Gain on sale of residential mortgage loans
—


—


—


—


8,313

Gain (loss) on termination of pension plan
—


12,097


(280
)

—


11,817

Gain on sale of fixed assets
—


—


—


11,800


—

Other
4,343


4,111


4,594


12,961


15,301

Total non-interest income
22,475


51,830


32,381


103,197


130,865

Non-interest expense:









Compensation and benefits
54,677


52,850


52,453


220,340


215,766

Stock-based compensation plans
3,679


4,565


5,180


12,984


19,473

Occupancy and office operations
16,579


15,836


15,886


68,536


64,363

Information technology
8,761


8,545


9,313


41,174


35,580

Amortization of intangible assets
5,865


4,785


4,785


23,646


19,181

FDIC insurance and regulatory assessments
3,608


3,194


3,134


20,493


12,660

Other real estate owned, net
15


79


(132
)

1,650


622

Impairment related to financial centers and real estate consolidation strategy
—


—


—


—


14,398

Charge for asset write-downs, systems integration, retention and severance
—


—


5,133


13,132


8,477

Other
16,737


16,601


19,698


56,415


73,317

Total non-interest expense
109,921


106,455


115,450


458,370


463,837

Income before income tax expense
144,925


154,996


134,603


566,230


539,966

Income tax expense
30,434


32,549


27,905


118,976


112,925

Net income
114,491


122,447


106,698


447,254


427,041

Preferred stock dividend
1,990


1,982


1,976


7,978


7,933

Net income available to common stockholders
$
112,501


$
120,465


$
104,722


$
439,276


$
419,108

Weighted average common shares:









Basic
222,319,682


203,090,365


199,719,747


224,299,488


205,679,874

Diluted
222,769,369


203,566,582


200,252,542


224,816,996


206,131,628

Earnings per common share:









Basic earnings per share
$
0.51


$
0.59


$
0.52


$
1.96


$
2.04

Diluted earnings per share
0.51


0.59


0.52


1.95


2.03

Dividends declared per share
0.07


0.07


0.07


0.28


0.28

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
12/31/2018

3/31/2019

6/30/2019

9/30/2019

12/31/2019
Total assets
$
31,383,307

$
29,956,607

$
30,237,545

$
30,077,665

$
30,586,497
Tangible assets ¹
29,640,729


28,174,074


28,459,797


28,304,702


28,792,651
Securities available for sale
3,870,563


3,847,799


3,843,112


3,061,419


3,095,648
Securities held to maturity
2,796,617


2,067,251


2,015,753


1,985,592


1,979,661
Loans held for sale²
1,565,979


248,972


27,221


4,627


8,125
Portfolio loans
19,218,530


19,908,473


20,370,306


20,830,163


21,440,212
Goodwill
1,613,033


1,657,814


1,657,814


1,657,814


1,683,482
Other intangibles
129,545


124,719


119,934


115,149


110,364
Deposits
21,214,148


21,225,639


20,948,464


21,579,324


22,418,658
Municipal deposits (included above)
1,751,670


2,027,563


1,699,824


2,234,630


1,988,047
Borrowings
5,214,183


3,633,480


4,133,986


3,174,224


2,885,958
Stockholders’ equity
4,428,853


4,419,223


4,459,158


4,520,967


4,530,113
Tangible common equity ¹
2,547,852


2,498,472


2,543,399


2,610,205


2,598,686
Quarterly Average Balances









Total assets
30,925,281


30,742,943


29,666,951


29,747,603


30,349,691
Tangible assets ¹
29,179,942


28,986,437


27,886,066


27,971,485


28,569,589
Loans, gross:









Commercial real estate (includes multi-family)
9,341,579


9,385,420


9,486,333


9,711,619


10,061,625
ADC
279,793


284,299


307,290


387,072


459,372
C&I:









Traditional C&I
2,150,644


2,418,027


2,446,676


2,435,644


2,399,901
Asset-based lending³
812,903


876,218


1,070,841


1,151,793


1,137,719
Payroll finance³
223,061


197,809


196,160


202,771


228,501
Warehouse lending³
690,277


710,776


990,843


1,180,132


1,307,645
Factored receivables³
267,986


250,426


246,382


248,150


258,892
Equipment financing³
1,147,269


1,245,051


1,285,095


1,191,944


1,430,715
Public sector finance³
828,153


869,829


967,218


1,087,427


1,189,103
Total C&I
6,120,293


6,568,136


7,203,215


7,497,861


7,952,476
Residential mortgage
4,336,083


3,878,991


2,635,903


2,444,101


2,284,419
Consumer
311,475


295,428


280,098


262,234


243,057
Loans, total⁴
20,389,223


20,412,274


19,912,839


20,302,887


21,000,949
Securities (taxable)
4,133,456


3,833,690


3,453,858


3,189,027


2,905,545
Securities (non-taxable)
2,552,533


2,501,004


2,429,411


2,250,859


2,159,391
Other interest earning assets
635,443


667,256


580,945


611,621


835,554
Total interest earning assets
27,710,655


27,414,224


26,377,053


26,354,394


26,901,439
Deposits:









Non-interest bearing demand
4,324,247


4,247,389


4,218,000


4,225,258


4,361,642
Interest bearing demand
4,082,526


4,334,266


4,399,296


4,096,744


4,359,767
Savings (including mortgage escrow funds)
2,535,098


2,460,247


2,448,132


2,375,882


2,614,523
Money market
7,880,331


7,776,501


7,538,890


7,341,822


7,681,491
Certificates of deposit
2,530,226


2,497,723


2,544,554


2,710,179


3,271,674
Total deposits and mortgage escrow
21,352,428


21,316,126


21,148,872


20,749,885


22,289,097
Borrowings
4,716,522


4,466,172


3,544,661


3,872,840


2,890,407
Stockholders’ equity
4,426,118


4,415,449


4,423,910


4,489,167


4,524,417
Tangible common stockholders’ equity ¹
2,542,256


2,520,595


2,504,883


2,575,199


2,606,617














¹ See a reconciliation of non-GAAP financial measures beginning on page 18.
²At December 31, 2018 and March 31, 2019, loans held for sale included $1.54 billion and $222 million of residential mortgage loans, respectively; the other balances of loans held for sale are commercial syndication loans.
³Asset-based lending, payroll finance, warehouse lending, factored receivables, equipment finance and public sector finance comprise our commercial finance loan portfolio.
⁴Includes loans held for sale, but 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 Common Share Data
12/31/2018

3/31/2019

6/30/2019

9/30/2019

12/31/2019
Basic earnings per share
$
0.51


$
0.47


$
0.46


$
0.59


$
0.52

Diluted earnings per share
0.51


0.47


0.46


0.59


0.52

Adjusted diluted earnings per share, non-GAAP ¹
0.52


0.50


0.51


0.52


0.54

Dividends declared per common share
0.07


0.07


0.07


0.07


0.07

Book value per common share
19.84


20.43


21.06


21.66


22.13

Tangible book value per common share¹
11.78


11.92


12.40


12.90


13.09

Shares of common stock o/s
216,227,852


209,560,824


205,187,243


202,392,884


198,455,324

Basic weighted average common shares o/s
222,319,682


213,157,090


206,932,114


203,090,365


199,719,747

Diluted weighted average common shares o/s
222,769,369


213,505,842


207,376,239


203,566,582


200,252,542

Performance Ratios (annualized)









Return on average assets
1.44
%

1.31
%

1.28
%

1.61
%

1.37
%
Return on average equity
10.08


9.13


8.57


10.65


9.18

Return on average tangible assets
1.53


1.39


1.36


1.71


1.45

Return on average tangible common equity
17.56


16.00


15.13


18.56


15.94

Return on average tangible assets, adjusted ¹
1.58


1.48


1.51


1.50


1.51

Return on avg. tangible common equity, adjusted ¹
18.17


17.04


16.83


16.27


16.57

Operating efficiency ratio, as adjusted ¹
38.0


40.5


40.9


39.1


39.9

Analysis of Net Interest Income









Accretion income on acquired loans
$
27,016


$
25,580


$
23,745


$
17,973


$
19,497

Yield on loans
5.07
%

5.17
%

5.20
%

4.97
%

4.84
%
Yield on investment securities - tax equivalent ²
2.92


2.99


2.92


2.85


2.89

Yield on interest earning assets - tax equivalent ²
4.54


4.64


4.66


4.50


4.41

Cost of interest bearing deposits
0.97


1.09


1.14


1.16


1.10

Cost of total deposits
0.77


0.88


0.91


0.92


0.89

Cost of borrowings
2.43


2.53


2.54


2.41


2.38

Cost of interest bearing liabilities
1.28


1.39


1.38


1.40


1.28

Net interest rate spread - tax equivalent basis ²
3.26


3.25


3.28


3.10


3.13

Net interest margin - GAAP basis
3.48


3.48


3.53


3.36


3.37

Net interest margin - tax equivalent basis ²
3.53


3.54


3.58


3.42


3.42

Capital









Tier 1 leverage ratio - Company ³
9.50
%

9.21
%

9.57
%

9.78
%

9.55
%
Tier 1 leverage ratio - Bank only ³
9.94


9.58


9.98


10.08


10.11

Tier 1 risk-based capital ratio - Bank only ³
13.53


13.10


12.67


12.74


12.42

Total risk-based capital ratio - Bank only ³
14.78


14.39


13.94


13.99


13.63

Tangible common equity - Company¹
8.60


8.87


8.94


9.22


9.03

Condensed Five Quarter Income Statement









Interest and dividend income
$
313,197


$
309,400


$
302,457


$
295,209


$
295,474

Interest expense
70,326


73,894


70,618


71,888


67,217

Net interest income
242,871


235,506


231,839


223,321


228,257

Provision for loan losses
10,500


10,200


11,500


13,700


10,585

Net interest income after provision for loan losses
232,371


225,306


220,339


209,621


217,672

Non-interest income
22,475


19,597


27,058


51,830


32,381

Non-interest expense
109,921


114,992


126,940


106,455


115,450

Income before income tax expense
144,925


129,911


120,457


154,996


134,603

Income tax expense
30,434


28,474


23,997


32,549


27,905

Net income
$
114,491


$
101,437


$
96,460


$
122,447


$
106,698











¹ See a reconciliation of non-GAAP financial measures beginning on page 18.
² Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable Federal tax rate of 21%.
³Regulatory 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
12/31/2018

3/31/2019

6/30/2019

9/30/2019

12/31/2019
Balance, beginning of period
$
91,365


$
95,677


$
98,960


$
104,664


$
104,735

Provision for loan losses
10,500


10,200


11,500


13,700


10,585

Loan charge-offs¹:









Traditional commercial & industrial
(452
)

(4,839
)

(754
)

(123
)

(470
)
Asset-based lending
(4,936
)

—


(3,551
)

(9,577
)

(5,856
)
Payroll finance
(21
)

—


(84
)

—


(168
)
Factored receivables
(23
)

(32
)

(27
)

(14
)

(68
)
Equipment financing
(1,060
)

(1,249
)

(1,335
)

(2,711
)

(1,739
)
Commercial real estate
(56
)

(17
)

(238
)

(53
)

(583
)
Multi-family
(140
)

—


—


—


—

Acquisition development & construction
—


—


—


(6
)

—

Residential mortgage
(694
)

(1,085
)

(689
)

(1,984
)

(334
)
Consumer
(335
)

(443
)

(467
)

(241
)

(401
)
Total charge offs
(7,717
)

(7,665
)

(7,145
)

(14,709
)

(9,619
)
Recoveries of loans previously charged-off¹:









Traditional commercial & industrial
404


139


445


136


232

Payroll finance
10


1


3


8


5

Factored receivables
7


121


4


3


9

Equipment financing
604


131


79


422


91

Commercial real estate
185


9


649


187


—

Multi-family
276


103


6


90


105

Residential mortgage
11


1


1


126


5

Consumer
32


243


162


108


90

Total recoveries
1,529


748


1,349


1,080


537

Net loan charge-offs
(6,188
)

(6,917
)

(5,796
)

(13,629
)

(9,082
)
Balance, end of period
$
95,677


$
98,960


$
104,664


$
104,735


$
106,238

Asset Quality Data and Ratios









Non-performing loans (“NPLs”) non-accrual
$
166,400


$
166,746


$
192,109


$
190,011


$
179,051

NPLs still accruing
2,422


3,669


538


955


110

Total NPLs
168,822


170,415


192,647


190,966


179,161

Other real estate owned
19,377


16,502


13,628


13,006


12,189

Non-performing assets (“NPAs”)
$
188,199


$
186,917


$
206,275


$
203,972


$
191,350

Loans 30 to 89 days past due
$
97,201


$
64,260


$
76,364


$
64,756


$
52,880

Net charge-offs as a % of average loans (annualized)
0.12
%

0.14
%

0.12
%

0.27
%

0.17
%
NPLs as a % of total loans
0.88


0.86


0.95


0.92


0.84

NPAs as a % of total assets
0.60


0.62


0.68


0.68


0.63

Allowance for loan losses as a % of NPLs
56.7


58.1


54.3


54.8


59.3

Allowance for loan losses as a % of total loans
0.50


0.50


0.51


0.50


0.50

Special mention loans
$
113,180


$
128,054


$
118,940


$
136,972


$
159,976

Substandard loans
266,047


288,694


311,418


277,975


295,428

Doubtful loans
59


—


—


—


—











¹There were no charge-offs or recoveries on warehouse lending or public sector finance loans during the periods presented. There were no asset-based lending or acquisition development and construction recoveries during the periods presented.

Sterling Bancorp and Subsidiaries QUARTERLY YIELD TABLE (unaudited, in thousands, except share and per share data)

For the Quarter Ended

September 30, 2019

December 31, 2019

Average balance

Interest

Yield/ Rate

Average balance

Interest

Yield/ Rate



(Dollars in thousands)
Interest earning assets:

Traditional C&I and commercial finance loans
$
7,497,861


$
95,638


5.06
%

$
7,952,476


$
97,221


4.85
%
Commercial real estate (includes multi-family)
9,711,619


118,315


4.83


10,061,625


122,435


4.83

ADC
387,072


5,615


5.76


459,372


5,924


5.12

Commercial loans
17,596,552


219,568


4.95


18,473,473


225,580


4.84

Consumer loans
262,234


3,799


5.75


243,057


3,290


5.37

Residential mortgage loans
2,444,101


31,047


5.08


2,284,419


27,507


4.82

Total gross loans ¹
20,302,887


254,414


4.97


21,000,949


256,377


4.84

Securities taxable
3,189,027


21,977


2.73


2,905,545


20,367


2.78

Securities non-taxable
2,250,859


17,077


3.03


2,159,391


16,494


3.06

Interest earning deposits
304,820


1,802


2.35


573,861


2,423


1.68

FHLB and Federal Reserve Bank Stock
306,801


3,525


4.56


261,693


3,276


4.97

Total securities and other earning assets
6,051,507


44,381


2.91


5,900,490


42,560


2.86

Total interest earning assets
26,354,394


298,795


4.50


26,901,439


298,937


4.41

Non-interest earning assets
3,393,209






3,448,252





Total assets
$
29,747,603






$
30,349,691





Interest bearing liabilities:











Demand and savings ² deposits
$
6,472,626


$
13,033


0.80
%

$
6,974,290


$
13,670


0.78
%
Money market deposits
7,341,822


22,426


1.21


7,681,491


20,867


1.08

Certificates of deposit
2,710,179


12,871


1.88


3,271,674


15,370


1.86

Total interest bearing deposits
16,524,627


48,330


1.16


17,927,455


49,907


1.10

Senior notes
173,750


1,369


3.15


173,601


1,369


3.15

Other borrowings
3,526,009


19,832


2.23


2,496,546


13,112


2.08

Subordinated debentures - Bank
173,081


2,357


5.45


173,142


2,358


5.45

Subordinated debentures - Company
—


—


—


47,118


471


4.00

Total borrowings
3,872,840


23,558


2.41


2,890,407


17,310


2.38

Total interest bearing liabilities
20,397,467


71,888


1.40


20,817,862


67,217


1.28

Non-interest bearing deposits
4,225,258






4,361,642





Other non-interest bearing liabilities
635,711






645,770





Total liabilities
25,258,436






25,825,274





Stockholders’ equity
4,489,167






4,524,417





Total liabilities and stockholders’ equity
$
29,747,603






$
30,349,691





Net interest rate spread ³




3.10
%





3.13
%
Net interest earning assets ⁴
$
5,956,927






$
6,083,577





Net interest margin - tax equivalent


226,907


3.42
%



231,720


3.42
%
Less tax equivalent adjustment


(3,586
)





(3,463
)


Net interest income


223,321






228,257



Accretion income on acquired loans


17,973






19,497



Tax equivalent net interest margin excluding accretion income on acquired loans


$
208,934


3.15
%



$
212,223


3.13
%
Ratio of interest earning assets to interest bearing liabilities
129.2
%





129.2
%





¹Average balances include loans held for sale and non-accrual loans. Interest includes prepayment fees and late charges.
² Includes club accounts and interest bearing mortgage escrow balances.
³ Net interest rate spread represents the difference between the tax equivalent yield on average interest earning assets and the cost of average interest bearing liabilities.
⁴ Net interest earning assets represents total interest earning assets less total interest bearing liabilities.

Sterling Bancorp and Subsidiaries QUARTERLY YIELD TABLE (unaudited, in thousands, except share and per share data)

For the Quarter Ended

December 31, 2018

December 31, 2019

Average balance

Interest

Yield/ Rate

Average balance

Interest

Yield/ Rate



(Dollars in thousands)
Interest earning assets:





















Traditional C&I and commercial finance loans
$
6,120,293


$
82,992


5.38
%

$
7,952,476


$
97,221


4.85
%
Commercial real estate (includes multi-family)
9,341,579


112,266


4.77


10,061,625


122,435


4.83

ADC
279,793


4,377


6.21


459,372


5,924


5.12

Commercial loans
15,741,665


199,635


5.03


18,473,473


225,580


4.84

Consumer loans
311,475


4,794


6.11


243,057


3,290


5.37

Residential mortgage loans
4,336,083


55,989


5.16


2,284,419


27,507


4.82

Total gross loans ¹
20,389,223


260,418


5.07


21,000,949


256,377


4.84

Securities taxable
4,133,456


30,114


2.89


2,905,545


20,367


2.78

Securities non-taxable
2,552,533


19,118


3.00


2,159,391


16,494


3.06

Interest earning deposits
291,460


1,063


1.45


573,861


2,423


1.68

FHLB and Federal Reserve Bank stock
343,983


6,499


7.50


261,693


3,276


4.97

Total securities and other earning assets
7,321,432


56,794


3.08


5,900,490


42,560


2.86

Total interest earning assets
27,710,655


317,212


4.54


26,901,439


298,937


4.41

Non-interest earning assets
3,214,626






3,448,252





Total assets
$
30,925,281






$
30,349,691





Interest bearing liabilities:











Demand and savings ² deposits
$
6,617,624


$
11,513


0.69
%

$
6,974,290


$
13,670


0.78
%
Money market deposits
7,880,331


21,204


1.07


7,681,491


20,867


1.08

Certificates of deposit
2,530,226


8,733


1.37


3,271,674


15,370


1.86

Total interest bearing deposits
17,028,181


41,450


0.97


17,927,455


49,907


1.10

Senior notes
183,499


1,600


3.49


173,601


1,369


3.15

Other borrowings
4,360,118


24,921


2.27


2,496,546


13,112


2.08

Subordinated debentures - Bank
172,905


2,355


5.45


173,142


2,358


5.45

Subordinated debentures - Company
—


—


—


47,118


471


4.00

Total borrowings
4,716,522


28,876


2.43


2,890,407


17,310


2.38

Total interest bearing liabilities
21,744,703


70,326


1.28


20,817,862


67,217


1.28

Non-interest bearing deposits
4,324,247






4,361,642





Other non-interest bearing liabilities
430,213






645,770





Total liabilities
26,499,163






25,825,274





Stockholders’ equity
4,426,118






4,524,417





Total liabilities and stockholders’ equity
$
30,925,281






$
30,349,691





Net interest rate spread ³




3.26
%





3.13
%
Net interest earning assets ⁴
$
5,965,952






$
6,083,577





Net interest margin - tax equivalent


246,886


3.53
%



231,720


3.42
%
Less tax equivalent adjustment


(4,015
)





(3,463
)


Net interest income


242,871






228,257



Accretion income on acquired loans


27,016






19,497



Tax equivalent net interest margin excluding accretion income on acquired loans


$
219,870


3.15
%



$
212,223


3.13
%
Ratio of interest earning assets to interest bearing liabilities
127.4
%





129.2
%


















¹Average balances include loans held for sale and non-accrual loans. Interest includes prepayment fees and late charges.
² Includes club accounts and interest bearing mortgage escrow balances.
³ Net interest rate spread represents the difference between the tax equivalent yield on average interest earning assets and the cost of average interest bearing liabilities.
⁴ Net interest earning assets represents total interest earning assets less total interest bearing liabilities.

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




















The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 21.


As of and for the Quarter Ended

12/31/2018

3/31/2019

6/30/2019

9/30/2019

12/31/2019
The following table shows the reconciliation of stockholders’ equity to tangible common equity and the tangible common equity ratio¹:




















Total assets
$
31,383,307


$
29,956,607


$
30,237,545


$
30,077,665


$
30,586,497

Goodwill and other intangibles
(1,742,578
)

(1,782,533
)

(1,777,748
)

(1,772,963
)

(1,793,846
)
Tangible assets
29,640,729


28,174,074


28,459,797


28,304,702


28,792,651

Stockholders’ equity
4,428,853


4,419,223


4,459,158


4,520,967


4,530,113

Preferred stock
(138,423
)

(138,218
)

(138,011
)

(137,799
)

(137,581
)
Goodwill and other intangibles
(1,742,578
)

(1,782,533
)

(1,777,748
)

(1,772,963
)

(1,793,846
)
Tangible common stockholders’ equity
2,547,852


2,498,472


2,543,399


2,610,205


2,598,686

Common stock outstanding at period end
216,227,852


209,560,824


205,187,243


202,392,884


198,455,324

Common stockholders’ equity as a % of total assets
13.67
%

14.29
%

14.29
%

14.57
%

14.36
%
Book value per common share
$
19.84


$
20.43


$
21.06


$
21.66


$
22.13

Tangible common equity as a % of tangible assets
8.60
%

8.87
%

8.94
%

9.22
%

9.03
%
Tangible book value per common share
$
11.78


$
11.92


$
12.40


$
12.90


$
13.09


The following table shows the reconciliation of reported return on average tangible common equity and adjusted return on average tangible common equity²:










Average stockholders’ equity
$
4,426,118


$
4,415,449


$
4,423,910


$
4,489,167


$
4,524,417

Average preferred stock
(138,523
)

(138,348
)

(138,142
)

(137,850
)

(137,698
)
Average goodwill and other intangibles
(1,745,339
)

(1,756,506
)

(1,780,885
)

(1,776,118
)

(1,780,102
)
Average tangible common stockholders’ equity
2,542,256


2,520,595


2,504,883


2,575,199


2,606,617

Net income available to common
112,501


99,448


94,473


120,465


104,722

Net income, if annualized
446,335


403,317


378,930


477,932


415,473

Reported return on avg tangible common equity
17.56
%

16.00
%

15.13
%

18.56
%

15.94
%
Adjusted net income (see reconciliation on page 19)
$
116,458


$
105,902


$
105,124


$
105,629


$
108,855

Annualized adjusted net income
462,034


429,492


421,651


419,072


431,870

Adjusted return on average tangible common equity
18.17
%

17.04
%

16.83
%

16.27
%

16.57
%










The following table shows the reconciliation of reported return on average tangible assets and adjusted return on average tangible assets³:










Average assets
$
30,925,281


$
30,742,943


$
29,666,951


$
29,747,603


$
30,349,691

Average goodwill and other intangibles
(1,745,339
)

(1,756,506
)

(1,780,885
)

(1,776,118
)

(1,780,102
)
Average tangible assets
29,179,942


28,986,437


27,886,066


27,971,485


28,569,589

Net income available to common
112,501


99,448


94,473


120,465


104,722

Net income, if annualized
446,335


403,317


378,930


477,932


415,473

Reported return on average tangible assets
1.53
%

1.39
%

1.36
%

1.71
%

1.45
%
Adjusted net income (see reconciliation on page 19)
$
116,458


$
105,902


$
105,124


$
105,629


$
108,855

Annualized adjusted net income
462,034


429,492


421,651


419,072


431,870

Adjusted return on average tangible assets
1.58
%

1.48
%

1.51
%

1.50
%

1.51
%

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



















The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 21.


?
As of and for the Quarter Ended

12/31/2018

3/31/2019

6/30/2019

9/30/2019

12/31/2019
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio⁴:




















Net interest income
$
242,871


$
235,506


$
231,839


$
223,321


$
228,257

Non-interest income
22,475


19,597


27,058


51,830


32,381

Total revenue
265,346


255,103


258,897


275,151


260,638

Tax equivalent adjustment on securities
4,015


3,949


3,834


3,586


3,463

Net loss (gain) on sale of securities
4,886


13,184


528


(6,882
)

76

(Gain) loss on termination of pension plan
—


—


—


(12,097
)

280

Net (gain) on sale of residential mtg loans
—


(8,313
)

—


—


—

Adjusted total revenue
274,247


263,923


263,259


259,758


264,457

Non-interest expense
109,921


114,992


126,940


106,455


115,450

Charge for asset write-downs, systems integration, retention and severance
—


(3,344
)

—


—


(5,133
)
Impairment related to financial centers and real estate consolidation strategy
—


—


(14,398
)

—


—

Gain on extinguishment of borrowings
172


46


—


—


—

Amortization of intangible assets
(5,865
)

(4,826
)

(4,785
)

(4,785
)

(4,785
)
Adjusted non-interest expense
104,228


106,868


107,757


101,670


105,532

Reported operating efficiency ratio
41.4
%

45.1
%

49.0
%

38.7
%

44.3
%
Adjusted operating efficiency ratio
38.0


40.5


40.9


39.1


39.9











The following table shows the reconciliation of reported net income (GAAP) and earnings per share to adjusted net income available to common stockholders (non-GAAP) and adjusted diluted earnings per share(non-GAAP)⁵:










Income before income tax expense
$
144,925


$
129,911


$
120,457


$
154,996


$
134,603

Income tax expense
30,434


28,474


23,997


32,549


27,905

Net income (GAAP)
114,491


101,437


96,460


122,447


106,698

Adjustments:









Net loss (gain) on sale of securities
4,886


13,184


528


(6,882
)

76

(Gain) loss on termination of pension plan
—


—


—


(12,097
)

280

Net (gain) on sale of residential mtg loans
—


(8,313
)

—


—


—

(Gain) on extinguishment of debt
(172
)

(46
)

—


—


—

Impairment related to financial centers and real estate consolidation strategy
—


—


14,398


—


—

Charge for asset write-downs, systems integration, retention and severance
—


3,344


—


—


5,133

Amortization of non-compete agreements and acquired customer list intangible assets
295


242


200


200


200

Total pre-tax adjustments
5,009


8,411


15,126


(18,779
)

5,689

Adjusted pre-tax income
149,934


138,322


135,583


136,217


140,292

Adjusted income tax expense
31,486


30,431


28,472


28,606


29,461

Adjusted net income (non-GAAP)
118,448


107,891


107,111


107,611


110,831

Preferred stock dividend
1,990


1,989


1,987


1,982


1,976

Adjusted net income available to common stockholders (non-GAAP)
$
116,458


$
105,902


$
105,124


$
105,629


$
108,855











Weighted average diluted shares
222,769,369


213,505,842


207,376,239


203,566,582


200,252,542

Reported diluted EPS (GAAP)
$
0.51


$
0.47


$
0.46


$
0.59


$
0.52

Adjusted diluted EPS (non-GAAP)
0.52


0.50


0.51


0.52


0.54


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

The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 21.











For the Year ended December 31,


2018

2019
The following table shows the reconciliation of reported net income (GAAP) and earnings per share to adjusted net income available to common stockholders (non-GAAP) and adjusted diluted earnings per share (non-GAAP)⁵:









Income before income tax expense

$
566,230


$
539,966

Income tax expense

118,976


112,925

Net income (GAAP)

447,254


427,041






Adjustments:




Net loss on sale of securities

10,788


6,905

Net (gain) on termination of pension plan

—


(11,817
)
Net (gain) on sale of fixed assets

(11,800
)

—

Net (gain) on sale or residential mortgage loans

—


(8,313
)
Impairment related to financial centers and real estate consolidation strategy

—


14,398

Charge for asset write-downs, systems integration, retention and severance

13,132


8,477

(Gain) on extinguishment of borrowings

(172
)

(46
)
Amortization of non-compete agreements and acquired customer list intangible assets

1,177


840

Total pre-tax adjustments

13,125


10,444

Adjusted pre-tax income

579,355


550,410

Adjusted income tax expense

121,732


115,586

Adjusted net income (non-GAAP)

$
457,623


$
434,824

Preferred stock dividend

7,978


7,933

Adjusted net income available to common stockholders (non-GAAP)

$
449,645


$
426,891






Weighted average diluted shares

224,816,996


206,131,628

Diluted EPS as reported (GAAP)

$
1.95


$
2.03

Adjusted diluted EPS (non-GAAP)

2.00


2.07

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









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







For the Year ended December 31,


2018

2109
The following table shows the reconciliation of reported return on average tangible common equity and adjusted return on average tangible common equity²:









Average stockholders’ equity

$
4,344,096


$
4,463,605

Average preferred stock

(138,829
)

(138,007
)
Average goodwill and other intangibles

(1,746,687
)

(1,773,475
)
Average tangible common stockholders’ equity

2,458,580


2,552,123

Net income available to common stockholders

$
439,276


$
419,108

Reported return on average tangible common equity

17.87
%

16.42
%
Adjusted net income available to common stockholders (see reconciliation on page 20)

$
449,645


$
426,891

Adjusted return on average tangible common equity

18.29
%

16.73
%
The following table shows the reconciliation of reported return on avg tangible assets and adjusted return on avg tangible assets³:
Average assets

$
30,746,916


$
30,138,390

Average goodwill and other intangibles

(1,746,687
)

(1,773,475
)
Average tangible assets

29,000,229


28,364,915

Net income available to common stockholders

439,276


419,108

Reported return on average tangible assets

1.51
%

1.48
%
Adjusted net income available to common stockholders (see reconciliation on page 20)

$
449,645


$
426,891

Adjusted return on average tangible assets

1.55
%

1.51
%
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio⁴:
Net interest income

$
967,403


$
918,923

Non-interest income

103,197


130,865

Total revenues

1,070,600


1,049,788

Tax equivalent adjustment on securities

16,231


14,832

Net loss on sale of securities

10,788


6,905

Net (gain) on termination of pension plan

—


(11,817
)
Net (gain) on sale of fixed assets

(11,800
)

—

(Gain) on sale of residential mortgage loans

—


(8,313
)
Adjusted total net revenue

1,085,819


1,051,395

Non-interest expense

458,370


463,837

Charge for asset write-downs, retention and severance

(13,132
)

(8,477
)
Impairment related to financial centers and real estate consolidation strategy

—


(14,398
)
Gain on extinguishment of borrowings

172


46

Amortization of intangible assets

(23,646
)

(19,181
)
Adjusted non-interest expense

$
421,764


$
421,827

Reported operating efficiency ratio

42.8
%

44.2
%
Adjusted operating efficiency ratio

38.8
%

40.1
%

The non-GAAP/as adjusted measures presented above are used by our management and the Company’s 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/adjusted 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.

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

When non-GAAP/adjusted measures are impacted by income tax expense, we present the pre-tax amount for the income and expense items that result in the non-GAAP adjustments and present the income tax expense impact at the effective tax rate in effect for the period presented.

¹ Stockholders’ equity as a percentage of total assets, book value per common share, tangible common equity as a percentage of tangible assets and tangible book common value per share 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 Reported return on average tangible common equity and adjusted return on average tangible common equity measures provide information to evaluate the use of our tangible common equity.

³ Reported return on average tangible assets and adjusted return on average tangible assets measures provide information to help assess our profitability.

⁴ The reported operating efficiency ratio is a non-GAAP measure calculated by dividing our GAAP non-interest expense by the sum of our GAAP net interest income plus GAAP non-interest income. The adjusted operating efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense adjusted for intangible asset amortization and certain expenses generally associated with discrete merger transactions and non-recurring strategic plans by the sum of net interest income plus non-interest income plus the tax equivalent adjustment on securities income and elimination of the impact of gain or loss on sale of securities. The adjusted operating efficiency ratio is a measure we use to assess our operating performance.

⁵ Adjusted net income available to common stockholders and adjusted diluted earnings per share present a summary of our earnings, which includes adjustments to exclude certain revenues and expenses (generally associated with discrete merger transactions and non-recurring strategic plans) to help in assessing our profitability.

STERLING BANCORP CONTACT:
Emlen Harmon, SVP - Director of Investor Relations
212.309.7646
http://www.sterlingbancorp.com

Company Name:	Sterling Bancorp
Stock Symbol:	STL
Market:	NYSE
Website:	sterlingbancorp.com

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