STERLING BANCORP - FORM 8-K - EX-99.1

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8-K - STERLING BANCORP	i00037_sterling-8k.htm




John Tietjen	Edward Nebb
Chief Financial Officer	Investor Relations
Sterling Bancorp	Comm-Counsellors, LLC
john.tietjen@sterlingbancorp.com	enebb@optonline.net
212.757.8035	203.972.8350

STERLING BANCORP REPORTS 2010 FOURTH QUARTER
AND FULL YEAR RESULTS

-- Net Income Available to Common Shareholders Rises 76% in Fourth Quarter --

-- Positive Credit Trends Reflected in Lower Nonaccrual Loans; Nonperforming
Assets Decline Sharply to 0.3% of Total Assets --

-- Business Growth Continues; Loan Portfolio Up 10%;
Noninterest Income Rises 12% in Fourth Quarter --


	Highlights

	•	Growing profitability – Net income available to common shareholders was $3.5 million for the 2010 fourth quarter, representing Sterling’s highest quarterly profit in the past two years. Key contributors to the rise in profitability were increased loan volume, higher noninterest income due to growth in fee-generating products, and lower credit costs.

	•	Improved credit quality – Nonaccrual loans were $6.6 million at December 31, 2010, down from $18.0 million a year earlier, nearly returning to pre-recession levels. The allowance for loan losses as a percent of nonaccrual loans rose to 274.5% at December 31, 2010, from 110.5% a year earlier.

	•	Higher noninterest income – Noninterest income rose 12.0% to $12.1 million for the 2010 fourth quarter, primarily driven by growth in accounts receivable management, factoring and trade finance fees.

	•	Solid loan volume – Total loans in portfolio were up 9.9% from a year ago. The loan portfolio exceeded $1.3 billion at December 31, 2010. Total assets at the end of 2010 were a record $2.4 billion.

	•	Increasing deposits – Total deposits were $1.7 billion at December 31, 2010, rising 10.6% from the prior year. Noninterest-bearing demand deposits were $570.3 million, representing nearly 33% of total deposits, one of the highest ratios in the banking industry.

	•	Strong capital – The tangible common equity ratio rose to 6.81% from 4.59% a year earlier, and all capital ratios continued to exceed the regulatory “well-capitalized” requirements. Shareholders’ equity reached $222.7 million at December 31, 2010.

Page 1 of 16

New York, N.Y., January 27, 2011 – Sterling Bancorp (NYSE: STL), a financial holding company headquartered in New York City and the parent company of Sterling National Bank, today reported net income available to common shareholders of $3.5 million for the fourth quarter ended December 31, 2010, an increase of 76.0% over the $2.0 million reported for the same period of 2009. Net income available to common shareholders rose to $0.13 per diluted share for the 2010 fourth quarter, from $0.11 per diluted share a year earlier, as the average number of shares outstanding in the 2010 fourth quarter increased 48% from the prior year due to the Company’s March 2010 stock offering.

Sterling’s strong performance in the 2010 fourth quarter reflected growth in loans and deposits; higher noninterest income primarily from its growing accounts receivable management, factoring and trade finance products; and a lower provision for loan losses resulting from an improvement in credit quality.

Management Perspective

“The fourth quarter of 2010 represented Sterling’s most profitable period in the past eight quarters. Our solid performance, coming on the heels of one of the worst economic cycles in recent history, reflects the fundamental strength of our business model, our focus on pursuing growth opportunities, and our commitment to superior customer service,” stated Louis J. Cappelli, Sterling’s Chairman and Chief Executive Officer.

“During the past two years, we charted a course to navigate an uncertain economy and to position Sterling for strong performance as conditions improved. We focused on expanding our market share by offering ‘high touch’ service and providing credit to quality borrowers when many competing institutions were constrained from serving the marketplace. We took action to reinforce our asset quality through a planned reduction of our lease financing portfolio. We strengthened our balance sheet, highlighted by an over-subscribed public stock offering in March 2010 that raised gross proceeds of $69 million, providing the capital to support growth. And, we pursued growth opportunities, both in existing products and newer areas such as mortgage warehouse lending, that have diversified our sources of profitability, particularly noninterest income.”

“As a result of our actions during a challenging period, Sterling has emerged stronger and better positioned to expand our franchise and continue to take market share. This is evident in our 2010 fourth quarter performance and should be reflected in our future growth and profitability.”

Fourth Quarter 2010 Financial Results

Net income available to common shareholders for the fourth quarter of 2010 was $3.5 million, or $0.13 per diluted share, up from $2.0 million, or $0.11 per diluted share, for the fourth quarter of 2009. This increase reflected higher noninterest income, lower interest expenses and a significantly lower provision for loan losses, partly offset by lower interest income and higher noninterest expenses. Earnings per share in the 2010 period reflected the impact of an increase in the average number of common shares outstanding due to Sterling’s March 2010 stock offering.

Page 2 of 16

Net interest income, on a tax-equivalent basis, was $21.1 million for the 2010 fourth quarter, compared to $22.4 million for the 2009 period. This reflected the impact of lower yields on loans and securities, and higher interest-bearing deposit balances, partially offset by higher average loan and investment securities balances and reduced funding costs. Net interest margin was 3.98% for the 2010 fourth quarter, on a tax-equivalent basis, compared to 4.49% for the fourth quarter of 2009. The margin trend reflects a shift in the loan portfolio mix, as the planned reduction in lease financing receivables was offset by growth in loan categories with lower yields, which the Company calculates led to a reduction of 20 basis points in net interest margin. In addition, as part of its asset-liability management strategy, the Company has deployed excess funds in short-term, lower yielding assets. While this strategy is accretive to earnings, the gross yield unfavorably impacts the margin.

The provision for loan losses decreased to $3.0 million for the 2010 fourth quarter, compared to $8.0 million a year earlier. This reflects an improvement in asset quality, as evidenced by the reduction of nonaccrual loans to $6.6 million at December 31, 2010, from $18.0 million a year earlier.

Noninterest income rose 12.0% to $12.1 million for the 2010 fourth quarter from $10.8 million a year earlier. This increase primarily reflected higher accounts receivable management, factoring and trade finance fees.

“We have continued to refine our business model to increase the focus on Sterling’s core strengths in commercial lending products. These products have traditionally performed well for us in terms of asset quality and are also sources of noninterest income. By continuing to build these products, we believe we are adding quality earning assets to the portfolio, protecting our future profitability by focusing on classes with proven credit quality, and diversifying our revenue stream through fee-generating activities that supplement net interest income,” Mr. Cappelli noted.

Noninterest expenses were $24.3 million for the 2010 fourth quarter, compared to $21.2 million a year ago, primarily reflecting higher compensation, occupancy and marketing expenses related to the growth of the business and increased business development activities, as well as higher professional fees and deposit insurance premiums. As a result of a settlement of litigation, professional fees in the 2009 fourth quarter reflected a recovery of legal costs. The increase in deposit insurance premiums was caused primarily by the growth of insured deposits in 2010.

Full-Year 2010 Financial Results

Net income available to common shareholders for 2010 was $4.4 million, or $0.18 per diluted share. This compared to $6.6 million, or $0.37 per diluted share, for 2009. Earnings per share in the 2010 period reflected the impact of the increase in the average number of common shares outstanding due to Sterling’s stock offering completed on March 19, 2010.

Page 3 of 16

Net interest income, on a tax-equivalent basis, was $84.2 million for 2010, compared to $87.6 million for 2009. This decrease primarily reflected the impact of lower interest rates on the yield on earning assets, partially offset by the effect of changes in average balances. Net interest margin was 4.25% for 2010, on a tax-equivalent basis, compared to 4.63% for 2009, reflecting the previously noted planned shift in the loan portfolio from lease financing receivables to lower yielding loan categories, and the deployment of excess funds in short-term, lower yielding investment securities.

The provision for loan losses was $28.5 million for 2010, compared to $27.9 million a year earlier based on management’s evaluation of the loan portfolio. In light of economic conditions, during the 2010 third quarter the Company decided to implement an accelerated resolution of certain categories of nonaccrual loans, primarily in the lease financing portfolio, which was reflected in the loan loss provision and net charge-offs during 2010.

Noninterest income rose to $47.6 million for 2010, compared to $44.2 million a year ago. This increase was primarily due to Sterling’s expansion of its accounts receivable management, factoring and trade finance products. This was partially offset by lower mortgage banking income and lower securities gains.

Noninterest expenses were $91.6 million for 2010, compared to $88.5 million in 2009, primarily reflecting higher compensation and occupancy expenses related to the growth of the business and increased business development activities.

Loans and Deposits

Total loans held in portfolio were $1.31 billion at December 31, 2010, rising from $1.20 billion a year earlier. Sterling extended a significant volume of new credit facilities during 2010, while maintaining its traditional disciplined credit standards.

Noninterest-bearing demand deposits totaled $570.3 million at December 31, 2010, a 4.4% increase from a year ago, and represented 32.6% of total deposits, one of the highest ratios of demand to total deposits in the industry. Total deposits were $1.75 billion at December 31, 2010, up from $1.58 billion a year earlier.

Asset Quality

Sterling experienced an overall improvement in credit quality during 2010. Net charge-offs declined to $2.9 million for the 2010 fourth quarter, compared to $7.0 million for the 2009 fourth quarter. The ratio of nonaccrual loans to total loans was 0.49% at December 31, 2010, compared to 1.46% a year earlier. Non-performing assets fell to 0.29% of total assets at December 31, 2010, from 0.89% a year ago. The allowance for loan losses as a percentage of nonaccrual loans was 274.5% at December 31, 2010, compared to 110.5% at December 31, 2009.

Page 4 of 16

Capital

Sterling’s capital base has consistently exceeded all regulatory requirements for well-capitalized institutions. At December 31, 2010, Sterling’s Tier 1 risk-based capital ratio was 13.61% (compared to a requirement of 6.00%), total risk-based capital was 14.68% (requirement of 10.00%), and the Tier 1 leverage ratio was 10.15% (requirement of 5.00%).

The tangible common equity ratio rose to 6.81% at December 31, 2010 from 4.59% at December 31, 2009. Book value per common share increased to $6.79 at December 31, 2010 from $6.73 at December 31, 2009.

Conference Call

Sterling Bancorp will host a teleconference call for the financial community on January 27, 2011, at 10:00 a.m. Eastern Time to discuss the fourth quarter and full year 2010 financial results. To access the conference call live, interested parties may dial 800-288-8975 at least 10 minutes prior to the call.

A replay of the conference call will be available beginning at approximately 1:00 p.m. Eastern Time on January 27, 2011, until 11:59 p.m. Eastern Time on February 10, 2011. To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 189902.

About Sterling Bancorp

Sterling Bancorp (NYSE: STL) is a New York City-based financial corporation with assets exceeding $2 billion. Since 1929, Sterling National Bank, the company’s principal banking subsidiary, has successfully served the needs of businesses, professionals and individuals in the NY metropolitan area and beyond. Sterling is well-known for its high-touch, hands-on approach to customer service and a special focus on serving the business community.

Sterling offers clients a full range of depository and cash management services plus a broad portfolio of financing solutions – including working capital lines, accounts receivable and inventory financing, factoring, trade financing, payroll funding and processing, equipment financing, commercial and residential mortgages and mortgage warehouse lines of credit.

Certain statements in this press release, including but not limited to, statements as to future events, future liquidity, future interest rate risk and operating expenses, statements concerning future results of operations, financial position or dividends, and plans and objectives for future operations, future capital, future liquidity and future growth, statements concerning the economic environment, asset quality and future levels of nonaccrual loans, charge-offs and provisions for loan losses, and the Company’s position for future growth and ability to benefit from an economic recovery, and other statements contained herein regarding matters that are not historical facts, are “forward-looking statements” as defined in the Securities Exchange Act of 1934. These statements are not historical facts but instead are subject to numerous assumptions, risks and uncertainties, and represent only the Company’s belief regarding future events, many of which, by their nature, are inherently uncertain and outside its control. Any forward-looking statements the Company may make speak only as of the date on which such statements are made.

Page 5 of 16

The Company’s actual results and financial position may differ materially from the anticipated results and financial condition indicated in or implied by these forward-looking statements, and the Company makes no commitment to update or revise forward-looking statements to reflect new information or subsequent events or changes in expectations. For a discussion of some of the risks and important factors that could affect the Company’s future results and financial condition, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements and Factors that Could Affect Future Results” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009.

# # #

Page 6 of 16

STERLING BANCORP
Consolidated Financial Highlights
(Unaudited)
(dollars in thousands, except per share data)

Three Months Ended December 31,

Twelve Months Ended December 31,

2010

2009

2010

2009

BALANCE SHEET HIGHLIGHTS

Period End Balances

Investment securities

789,315

737,065

789,315

737,065

Loans held for sale

32,049

33,889

32,049

33,889

Loans held in portfolio, net of unearned discount

1,314,234

1,195,415

1,314,234

1,195,415

Federal Reserve Bank and Federal Home Loan Bank stock, at cost

9,365

8,482

9,365

8,482

Total earning assets

2,185,466

2,011,809

2,185,466

2,011,809

Allowance for loan losses

18,238

19,872

18,238

19,872

Total assets

2,360,457

2,165,609

2,360,457

2,165,609

Demand deposits

570,290

546,337

570,290

546,337

Savings, NOW and money market deposits

562,207

592,015

562,207

592,015

Time deposits

615,267

442,315

615,267

442,315

Customer repurchase agreements

23,016

21,048

23,016

21,048

Other short-term borrowings

37,878

110,806

37,878

110,806

Advances FHLB/Long-term borrowings

169,947

155,774

169,947

155,774

Shareholders’ equity

222,742

161,950

222,742

161,950

Average Balances

Investment securities

755,570

741,238

768,184

719,485

Loans held for sale

45,255

34,327

35,354

41,225

Loans held in portfolio, net of unearned discount

1,307,456

1,191,329

1,227,049

1,154,041

Federal Reserve Bank and Federal Home Loan Bank stock

9,370

8,854

8,617

9,487

Total earning assets

2,163,607

2,033,448

2,071,164

1,961,042

Total assets

2,351,834

2,192,524

2,244,569

2,114,221

Demand deposits

542,946

492,305

489,184

441,087

Savings, NOW and money market deposits

560,816

583,454

564,061

562,780

Time deposits

608,530

462,183

559,203

375,742

Customer repurchase agreements

43,603

63,200

47,674

72,892

Other short-term borrowings

34,051

109,465

64,533

198,183

Advances FHLB/Long-term borrowings

170,065

164,035

158,351

174,981

Shareholders’ equity

224,724

159,461

213,153

158,225

ASSET QUALITY HIGHLIGHTS

Period End

Net charge-offs

2,915

7,048

29,597

23,334

Nonaccrual loans

6,644

17,977

6,644

17,977

Other real estate owned

182

1,385

182

1,385

Nonperforming assets

6,826

19,362

6,826

19,362

Nonaccrual loans/loans (1)

0.49

1.46

0.49

1.46

Nonperforming assets/assets

0.29

0.89

0.29

0.89

Allowance for loan losses/loans (2)

1.39

1.66

1.39

1.66

Allowance for loan losses/nonaccrual loans

274.50

110.54

274.50

110.54

CAPITAL RATIOS

Period End

Tier 1 risk based

13.61

11.50

13.61

11.50

Total risk based

14.68

12.75

14.68

12.75

Leverage

10.15

8.06

10.15

8.06

Tangible common equity

6.81

4.59

6.81

4.59

Book value per common share

6.79

6.73

6.79

6.73


(1)	The term “loans” includes loans held for sale and loans held in portfolio.

(2)	The term “loans” includes loans held in portfolio only.

Page 7 of 16

STERLING BANCORP
Consolidated Balance Sheets
(Unaudited)
(dollars in thousands, except number of shares)


	December 31,

	2010		2009

ASSETS
Cash and due from banks	$	26,824	$	24,911
Interest-bearing deposits with other banks		40,503		36,958

Investment securities
Available for sale (at estimated fair value)		390,080		346,526
Held to maturity (at amortized cost)		399,235		390,539

Total investment securities		789,315		737,065


Loans held for sale		32,049		33,889

Loans held in portfolio, net of unearned discounts		1,314,234		1,195,415
Less allowance for loan losses		18,238		19,872

Loans held in portfolio, net		1,295,996		1,175,543

Federal Reserve Bank and Federal Home Loan Bank stock, at cost		9,365		8,482

Customers’ liability under acceptances		0		27
Goodwill		22,901		22,901
Premises and equipment, net		15,909		9,658
Other real estate		182		1,385
Accrued interest receivable		8,280		9,001
Cash surrender value of life insurance policies		51,512		49,009
Other assets		67,621		56,780

	$	2,360,457	$	2,165,609


LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Demand	$	570,290	$	546,337
Savings, NOW and money market		562,207		592,015
Time		615,267		442,315

Total deposits		1,747,764		1,580,667

Securities sold under agreements to repurchase - customers		23,016		21,048
Securities sold under agreements to repurchase - dealers		5,000		0
Federal funds purchased		15,000		41,000
Commercial paper		14,388		17,297
Short-term borrowings - FRB		0		50,000
Short-term borrowings - other		3,490		2,509
Advances - FHLB		144,173		130,000
Long-term borrowings - subordinated debentures		25,774		25,774
Acceptances outstanding		0		27
Accrued interest payable		1,314		1,291
Due to factored clients		91,543		82,401
Accrued expenses and other liabilities		66,253		51,645

Total liabilities		2,137,715		2,003,659

Shareholders’ equity		222,742		161,950

	$	2,360,457	$	2,165,609

MEMORANDA
Available for sale securities - amortized cost	$	390,175	$	345,719
Held to maturity securities - estimated fair value		400,453		396,150
Shares outstanding
Common issued		31,138,545		22,226,425
Common in treasury		4,297,782		4,119,934

NOTE: Certain reclassifications have been made to prior period’s financial data to conform to current financial statement presentations.

Page 8 of 16

STERLING BANCORP
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share data)

Three Months Ended December 31,

Twelve Months Ended December 31,

2010

2009

2010

2009

INTEREST INCOME

Loans

18,197

17,948

70,104

71,788

Investment securities - available for sale

2,436

3,690

11,751

17,441

Investment securities - held to maturity

3,193

4,608

14,815

16,093

FRB and FHLB stock

149

126

445

513

Deposits with other banks

Total interest income

23,997

26,411

97,190

105,920

INTEREST EXPENSE

Savings, NOW and money market deposits

752

950

3,288

3,890

Time deposits

1,443

1,851

6,300

7,999

Securities sold u/a/r - customers

229

353

Securities sold u/a/r - dealers

Federal funds purchased

Commercial paper

Short-term borrowings - FHLB

Short-term borrowings - FRB

398

Short-term borrowings - other

Advances - FHLB

891

978

3,482

4,432

Long-term subordinated debentures

524

2,094

Total interest expense

3,698

4,436

15,583

19,295

Net interest income

20,299

21,975

81,607

86,625

Provision for loan losses

3,000

7,950

28,500

27,900

Net interest income after provision for loan losses

17,299

14,025

53,107

58,725

NONINTEREST INCOME

Accounts receivable management/factoring commissions and other fees

6,045

5,222

23,572

18,320

Service charges on deposit accounts

1,623

1,647

6,250

5,943

Trade finance income

614

480

2,264

1,891

Other customer related service charges and fees

201

204

777

929

Mortgage banking income

2,533

2,324

8,164

9,476

Trust fees

329

450

Income from life insurance policies

288

270

1,138

1,098

Securities gains

509

401

3,928

5,561

Loss on sale of OREO

(81

)

(71

)

(64

)

(32

)

Other income

298

252

1,275

514

Total noninterest income

12,112

10,813

47,633

44,150

NONINTEREST EXPENSES

Salaries

10,777

9,941

41,586

39,875

Employee benefits

2,683

3,142

12,220

12,293

Total personnel expense

13,460

13,083

53,806

52,168

Occupancy and equipment expenses, net

3,329

2,897

12,296

11,278

Advertising and marketing

881

571

3,381

3,167

Professional fees

1,551

277

5,464

5,147

Communications

389

370

1,691

1,665

Deposit insurance

1,252

1,094

3,809

4,153

Other expenses

3,466

2,881

11,109

10,967

Total noninterest expenses

24,328

21,173

91,556

88,545

Income before income taxes

5,083

3,665

9,184

14,330

Provision for income taxes

928

1,028

2,158

4,908

Net income

4,155

2,637

7,026

9,422

Dividends on preferred shares and accretion

655

648

2,589

2,773

Net income available to common shareholders

3,500

1,989

4,437

6,649

Page 9 of 16

STERLING BANCORP
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share data)

(continued)

Three Months Ended December 31,

Twelve Months Ended December 31,

2010

2009

2010

2009

Average number of common shares outstanding

Basic

26,840,763

18,106,491

24,492,279

18,104,619

Diluted

26,840,763

18,157,339

24,495,044

18,126,333

Net income available to common shareholders per average common share

Basic

0.13

0.11

0.18

0.37

Diluted

0.13

0.11

0.18

0.37

Dividends per common share

0.09

0.36

0.56

Page 10 of 16

STERLING BANCORP
Consolidated Statements of Comprehensive Income
(Unaudited)
(dollars in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2010

2009

2010

2009

Net income

4,155

2,637

7,026

9,422

Other comprehensive income, net of tax:

Unrealized holding (losses) gains on securities arising during the period

(980

)

(1,313

)

2,101

3,039

Reclassification adjustment for securities gains included in net income

(279

)

(219

)

(2,145

)

(3,037

)

Pension liability adjustment

(1,940

)

1,935

(1,940

)

1,935

Amortization of:

Prior service cost

Net actuarial losses

269

483

1,460

1,887

Comprehensive income

1,234

3,532

6,538

13,282

STERLING BANCORP
Consolidated Statements of Changes in Shareholders’ Equity
(Unaudited)
(dollars in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2010

2009

2010

2009

Balance, at beginning of period

224,378

160,538

161,950

160,480

Net income for period

4,155

2,637

7,026

9,422

Common shares issued

64,881

Common shares issued under stock incentive plan and related tax benefits

1,477

209

Stock option and restricted stock compensation expense

257

132

Cash dividends-Common shares

(2,415

)

(1,628

)

(8,873

)

(10,131

)

Cash dividends-Preferred shares

(525

)

(525

)

(2,100

)

(1,878

)

Surrender of shares issued under incentive compensation plan

(1,388

)

(144

)

Change in net unrealized holding (losses) gains on securities

(980

)

(1,313

)

2,101

3,039

Reclassification adjustment for securities gains included in net income

(279

)

(219

)

(2,145

)

(3,037

)

Pension liability adjustment

(1,940

)

1,935

(1,940

)

1,935

Amortization of:

Prior service cost

Net actuarial losses

269

483

1,460

1,887

Balance, at end of period

222,742

161,950

222,742

161,950

Page 11 of 16

STERLING BANCORP
Average Balance Sheets [1]
(Unaudited)
(dollars in thousands)

Three Months Ended

December 31, 2010

December 31, 2009

AVERAGE
BALANCE

INTEREST

AVERAGE
RATE

AVERAGE
BALANCE

INTEREST

AVERAGE
RATE

Assets

Interest-bearing deposits with other banks

45,956

0.19

57,700

0.26

Investment Securities

Available for sale - taxable

362,864

2,193

2.42

320,955

3,471

4.33

Held to maturity - taxable

249,919

2,006

3.21

346,114

4,096

4.73

Tax-exempt [2]

142,787

2,202

6.17

74,169

1,124

6.06

Total investment securities

755,570

6,401

3.39

741,238

8,691

4.69

FRB and FHLB stock [2]

9,370

149

6.36

8,854

127

5.73

Loans, net of unearned discount [3]

1,352,711

18,197

5.64

1,225,656

17,948

6.13

Total Interest-Earning Assets [2]

2,163,607

24,769

4.69

2,033,448

26,805

5.40

Cash and due from banks

40,970

34,187

Allowance for loan losses

(19,693

)

(21,179

)

Goodwill

22,901

Other

144,049

123,167

Total Assets

2,351,834

2,192,524

Liabilities and Shareholders’ Equity

Interest-bearing deposits

Domestic

Savings

19,541

0.05

17,736

0.07

NOW

200,846

0.15

240,447

220

0.36

Money market

340,429

675

0.79

325,271

727

0.89

Time

608,530

1,443

0.94

461,604

1,849

1.59

Foreign

Time

0.00

579

1.09

Total Interest-Bearing Deposits

1,169,346

2,195

0.74

1,045,637

2,801

1.06

Borrowings

Securities sold u/a/r - customers

43,603

0.49

63,200

0.45

Securities sold u/a/r - dealers

5,000

1.30

0.00

Federal funds purchased

12,038

0.22

24,141

0.13

Commercial paper

15,056

0.30

15,952

0.31

Short-term borrowings - FRB

0.00

67,120

0.25

Short-term borrowings - other

1,957

0.00

2,252

0.00

Advances - FHLB

144,291

891

2.45

138,261

978

2.81

Long-term borrowings - sub debt

25,774

524

8.38

25,774

524

8.38

Total Borrowings

247,719

1,503

2.42

336,700

1,635

1.94

Total Interest-Bearing Liabilities

1,417,065

3,698

1.04

1,382,337

4,436

1.28

Noninterest-bearing demand deposits

542,946

492,305

Other liabilities

167,099

158,421

Total Liabilities

2,127,110

2,033,063

Shareholders’ equity

224,724

159,461

Total Liabilities and Shareholders’ Equity

2,351,834

2,192,524

Net interest income/spread [2]

21,071

3.65

22,369

4.12

Net yield on interest-earning assets [2]

3.98

4.49

Less: Tax-equivalent adjustment

772

394

Net interest income

20,299

21,975


[1]	The average balances of assets, liabilities and shareholders’ equity are computed on the basis of daily averages. Average rates are presented on a tax-equivalent basis. Certain reclassifications have been made to prior period amounts to conform to current presentation.

[2]	Interest and/or average rates are presented on a tax-equivalent basis.

[3]	Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding and income has been included to the extent earned.

Page 12 of 16


STERLING BANCORP
Average Balance Sheets [1]
(Unaudited)
(dollars in thousands)

Twelve Months Ended

December 31, 2010

December 31, 2009

AVERAGE
BALANCE

INTEREST

AVERAGE
RATE

AVERAGE
BALANCE

INTEREST

AVERAGE
RATE

Assets

Interest-bearing deposits with other banks

31,960

0.23

36,804

0.23

Investment Securities

Available for sale - taxable

394,635

10,863

2.75

350,069

16,575

4.73

Held to maturity - taxable

252,915

10,879

4.30

320,655

15,070

4.70

Tax-exempt [2]

120,634

7,422

6.15

48,761

2,907

5.96

Total investment securities

768,184

29,164

3.80

719,485

34,552

4.80

FRB and FHLB stock [2]

8,617

448

5.20

9,487

516

5.45

Loans, net of unearned discount [3]

1,262,403

70,104

5.98

1,195,266

71,788

6.38

Total Interest-Earning Assets [2]

2,071,164

99,791

5.04

1,961,042

106,941

5.65

Cash and due from banks

36,810

31,118

Allowance for loan losses

(21,668

)

(19,107

)

Goodwill

22,901

Other

135,362

118,267

Total Assets

2,244,569

2,114,221

Liabilities and Shareholders’ Equity

Interest-bearing deposits

Domestic

Savings

18,631

0.06

18,012

0.10

NOW

209,197

472

0.23

211,121

620

0.29

Money market

336,233

2,805

0.83

333,647

3,252

0.97

Time

558,886

6,297

1.13

375,164

7,993

2.13

Foreign

Time

317

1.09

578

1.09

Total Interest-Bearing Deposits

1,123,264

9,588

0.85

938,522

11,889

1.27

Borrowings

Securities sold u/a/r - customers

47,674

229

0.48

72,892

353

0.48

Securities sold u/a/r - dealers

5,618

0.79

0.00

Federal funds purchased

33,192

0.22

25,075

0.21

Commercial paper

14,718

0.30

13,107

0.51

Short-term borrowings - FHLB

0.00

3,411

0.31

Short-term borrowings - FRB

3,699

0.25

154,726

398

0.26

Short-term borrowings - other

7,306

0.25

1,864

0.00

Advances - FHLB

132,577

3,482

2.63

149,207

4,432

2.97

Long-term borrowings - sub debt

25,774

2,094

8.38

25,774

2,094

8.38

Total Borrowings

270,558

5,995

2.22

446,056

7,406

1.66

Total Interest-Bearing Liabilities

1,393,822

15,583

1.12

1,384,578

19,295

1.39

Noninterest-bearing demand deposits

489,184

441,087

Other liabilities

148,410

130,331

Total Liabilities

2,031,416

1,955,996

Shareholders’ equity

213,153

158,225

Total Liabilities and Shareholders’ Equity

2,244,569

2,114,221

Net interest income/spread [2]

84,208

3.92

87,646

4.26

Net yield on interest-earning assets [2]

4.25

4.63

Less: Tax-equivalent adjustment

2,601

1,021

Net interest income

81,607

86,625


[1]	The average balances of assets, liabilities and shareholders’ equity are computed on the basis of daily averages. Average rates are presented on a tax-equivalent basis. Certain reclassifications have been made to prior period amounts to conform to current presentation.

[2]	Interest and/or average rates are presented on a tax-equivalent basis.

[3]	Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding and income has been included to the extent earned.

Page 13 of 16

STERLING BANCORP
Rate/Volume Analysis [1]
(Unaudited)
(dollars in thousands)


	Increase/(Decrease) Three Months Ended December 31, 2010

	Volume			Rate			Net [2]

INTEREST INCOME
Interest-bearing deposits with other banks	$	(8	)	$	(9	)	$	(17	)


Investment Securities
Available for sale - taxable		414			(1,692	)		(1,278	)
Held to maturity - taxable		(969	)		(1,121	)		(2,090	)
Tax-exempt		1,057			21			1,078

Total investment securities		502			(2,792	)		(2,290	)


FRB and FHLB stock		7			15			22

Loans, net of unearned discounts [3]		1,850			(1,601	)		249

TOTAL INTEREST INCOME	$	2,351		$	(4,387	)	$	(2,036	)



INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	0		$	0		$	0
NOW		(32	)		(114	)		(146	)
Money market		33			(85	)		(52	)
Time		484			(890	)		(406	)
Foreign
Time		(2	)		0			(2	)

Total interest-bearing deposits		483			(1,089	)		(606	)


Borrowings
Securities sold under agreements to repurchase - customers		(23	)		6			(17	)
Securities sold under agreements to repurchase - dealers		16			0			16
Federal funds purchased		(5	)		4			(1	)
Commercial paper		(1	)		0			(1	)
Short-term borrowings - FRB		(42	)		0			(42	)
Short-term borrowings - other		0			0			0
Advances - FHLB		42			(129	)		(87	)
Long-term borrowings - subordinated debentures		0			0			0

Total borrowings		(13	)		(119	)		(132	)



TOTAL INTEREST EXPENSE	$	470		$	(1,208	)	$	(738	)


NET INTEREST INCOME	$	1,881		$	(3,179	)	$	(1,298	)


[1]	This table is presented on a tax-equivalent basis.

[2]	Changes in interest income and interest expense due to a combination of both volume and rate have been allocated to the change due to volume and the change due to rate in proportion to the relationship of change due solely to each. The change in interest expense for foreign time deposits, securities sold under agreements to repurchase-dealers and short-term borrowings-FRB has been allocated entirely to the volume variance.

[3]	Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding, and income has been included to the extent earned.

Page 14 of 16


	STERLING BANCORP
	Rate/Volume Analysis [1]
	(Unaudited)
	(dollars in thousands)


	Increase/(Decrease) Twelve Months Ended December 31, 2010

	Volume			Rate			Net [2]

INTEREST INCOME
Interest-bearing deposits with other banks	$	(10	)	$	0		$	(10	)


Investment Securities
Available for sale - taxable		1,901			(7,613	)		(5,712	)
Held to maturity - taxable		(2,987	)		(1,204	)		(4,191	)
Tax-exempt		4,419			96			4,515

Total investment securities		3,333			(8,721	)		(5,388	)


FRB and FHLB stock		(45	)		(23	)		(68	)

Loans, net of unearned discounts [3]		3,723			(5,407	)		(1,684	)

TOTAL INTEREST INCOME	$	7,001		$	(14,151	)	$	(7,150	)


INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	1		$	(8	)	$	(7	)
NOW		(7	)		(141	)		(148	)
Money market		25			(472	)		(447	)
Time		2,965			(4,661	)		(1,696	)
Foreign
Time		(3	)		0			(3	)

Total interest-bearing deposits		2,981			(5,282	)		(2,301	)


Borrowings
Securities sold under agreements to repurchase - customers		(124	)		0			(124	)
Securities sold under agreements to repurchase - dealers		44			0			44
Federal funds purchased		20			3			23
Commercial paper		8			(30	)		(22	)
Short-term borrowings - FHLB		(11	)		0			(11	)
Short-term borrowings - FRB		(375	)		(14	)		(389	)
Short-term borrowings - other		0			18			18
Advances - FHLB		(469	)		(481	)		(950	)
Long-term borrowings - subordinated debentures		0			0			0

Total borrowings		(907	)		(504	)		(1,411	)



TOTAL INTEREST EXPENSE	$	2,074		$	(5,786	)	$	(3,712	)


NET INTEREST INCOME	$	4,927		$	(8,365	)	$	(3,438	)


[1]	This table is presented on a tax-equivalent basis.

[2]	Changes in interest income and interest expense due to a combination of both volume and rate have been allocated to the change due to volume and the change due to rate in proportion to the relationship of change due solely to each. The change in interest expense for securities sold under agreements to repurchase-dealers, and short-term borrowings-FHLB has been allocated entirely to the volume variance.

[3]	Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding, and income has been included to the extent earned.

Page 15 of 16

STERLING BANCORP
Reconciliation of Tangible Common Equity and Tangible Assets

(Unaudited)
(dollars in thousands)

This press release contains certain supplemental financial information, described in the following tables, which has been determined by methods other than U. S. generally accepted accounting principles (“GAAP”). Management believes that these non-GAAP financial measures provide useful supplemental information to both management and investors in evaluating Sterling’s capital position. Tangible common equity represents shareholders’ equity less preferred equity, goodwill and other intangibles. Tangible assets are equal to total assets less goodwill and other intangibles. Tangible common equity ratio is calculated by dividing tangible common equity by tangible assets. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and Sterling strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Non-GAAP financial measures are not standardized, and, therefore, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures that may have the same or similar names.


	December 31,

	2010			2009

Tangible common equity

Total shareholders’ equity	$	222,742		$	161,950
Less:
Preferred equity		40,602			40,113
Goodwill and other intangible assets		23,039			23,589

Total tangible common equity	$	159,101		$	98,248


Tangible assets

Total assets	$	2,360,457		$	2,165,609
Less: Goodwill and other intangible assets		23,039			23,589

Total tangible assets	$	2,337,418		$	2,142,020


Tangible common equity ratio		6.81	%		4.59	%

Page 16 of 16

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