STERLING BANCORP - FORM 8-K - EX-99.1

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8-K - STERLING BANCORP	i00188_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 2011 FIRST QUARTER RESULTS

— Net Income Available to Common Shareholders Rises 71% in First Quarter —

— Successful March 2011 Common Share Offering Raises $38.6 Million —

— Growth Continues: Loans, Deposits and Assets Increase —


	Highlights

	•	Growing profitability – Net income available to common shareholders was $3.3 million for the 2011 first quarter, rising 71% from the same period last year, reflecting the Company’s strong loan volume, higher noninterest income due to growth in fee-generating products, and lower credit costs.

	•	Higher noninterest income – Noninterest income increased to $11.4 million for the 2011 first quarter from $11.1 million in the year-ago period, primarily due to growth in accounts receivable management, factoring, trade finance and mortgage banking. Reflecting the significance of fee-generating products to the Company’s business model, noninterest income was 33.5% of total revenue in the recent quarter.

	•	Rising loan volume – Total loans in portfolio increased 7.8% from a year ago to $1.3 billion at March 31, 2011.

	•	Increasing deposits – Total deposits were $1.7 billion at March 31, 2011, rising 7.1% from the prior year. Noninterest-bearing demand deposits were $561.5 million, representing over 32% of total deposits, one of the highest ratios in the banking industry.

	•	Asset growth – Total assets approached $2.4 billion at March 31, 2011, an increase of 9.0% from a year ago.

	•	Successful capital raise – Sterling completed a public equity offering on March 9, 2011 of 4.025 million common shares at a price to the public of $9.60 per share, raising gross proceeds of $38.6 million. The offering further increased the Company’s strong capital ratios, resulting in a tangible common equity ratio of 8.30% at March 31, 2011.

	•	Improved credit quality – The provision for loan losses decreased to $3.0 million for the 2011 first quarter, from $6.0 million a year ago. Nonaccrual loans decreased to $7.0 million at March 31, 2011, from $17.2 million a year ago. The ratio of nonaccrual loans to total loans improved to 0.53% at March 31, 2011, versus 1.42% a year ago.

Page 1 of 13

New York, N.Y., April 26, 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 $3.3 million for the first quarter ended March 31, 2011, an increase of 71.2% over the $1.9 million reported for the same period in 2010. Net income available to common shareholders per diluted share rose 20%, to $0.12 for the 2011 first quarter from $0.10 a year earlier, a significant increase, given the more than 42% rise in the average number of shares outstanding over this period due to the Company’s March 2010 and March 2011 common share offerings.

Sterling’s strong performance in the 2011 first quarter reflected growth in loans, investment securities and deposits; higher noninterest income primarily from accounts receivable management, factoring, trade finance and mortgage banking products; and a lower provision for loan losses resulting from an improvement in credit quality.

Management Perspective

“Sterling’s results for the first quarter of 2011 continued the strong performance that we delivered in the 2010 fourth quarter and set the stage for profitable growth this year,” stated Louis J. Cappelli, Sterling’s Chairman and Chief Executive Officer. “Our net income rose sharply compared to the year-ago period and we produced solid increases in assets, loans and deposits. This primarily reflected the demand for Sterling’s financial products and services, as well as our efforts to build a balanced and diversified income platform, including a growing contribution from fee-generating products, coupled with further improvement in our asset quality and related credit costs.”

“We significantly strengthened Sterling’s balance sheet during the 2011 first quarter with a common share offering that raised gross proceeds of $38.6 million. Our resulting strong capital ratios give us ample ‘dry powder’ that we can deploy to take advantage of growth opportunities. We are gratified by the receptivity of investors to our business model and growth strategies, as reflected in the fact that we successfully completed two public equity offerings in the past twelve months.”

“Our primary focus on meeting the financial needs of the New York metropolitan area and beyond should continue to drive our performance during this year and in the future. The diversity and economic resiliency of this market are generating solid demand for our products and services. With Sterling’s strong capital foundation, unique business banking franchise, and reputation for exceptional customer service, we see many opportunities to deliver continued profitable growth and to enhance shareholder value,” Mr. Cappelli concluded.

Page 2 of 13

First Quarter 2011 Financial Results

Net income available to common shareholders for the first quarter of 2011 was $3.3 million, or $0.12 per diluted share, up from $1.9 million, or $0.10 per diluted share, for the first quarter of 2010. 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 2011 first quarter reflected the impact of an additional 8.1 million average common shares outstanding, due to Sterling’s March 2010 and March 2011 common share offerings.

Net interest income, on a tax-equivalent basis, was $20.3 million for the 2011 first quarter, compared to $20.4 million for the year-ago period. This reflected the benefit of higher average loan and investment securities balances and reduced funding costs, offset by the impact of lower yields on loans and securities, and higher interest-bearing deposit balances.

“The fact that our business model emphasizes products that generate fee income, as well as interest income, has resulted in a broader and more diversified revenue stream. If the fee income associated with our accounts receivable management, factoring and trade finance products were reflected in the net interest margin, it would add approximately 100 basis points to the margin,” Mr. Cappelli noted.

The net interest margin on the loan portfolio was 4.90% for the 2011 first quarter, compared to 5.03% a year earlier, largely due to the effect on interest income of a change in the loan portfolio mix. The net interest margin on the investment portfolio decreased to 2.55% for the 2011 first quarter from 3.57% a year earlier. This primarily reflected the temporary deployment of proceeds from the common share offerings in short-term, lower yielding investment securities, in a strategy intended to enhance future liquidity to fund loan growth and respond to possible changes in interest rates. Overall, the net interest margin was 3.84% for the 2011 first quarter, on a tax-equivalent basis, compared to 4.37% for the first quarter of 2010.

The provision for loan losses decreased to $3.0 million for the 2011 first quarter, compared to $6.0 million a year earlier. This reflects an improvement in asset quality, as evidenced by the reduction of nonaccrual loans to $7.0 million at March 31, 2011, from $17.2 million a year earlier.

Noninterest income, excluding securities gains, rose $1.1 million or 11.6% comparing the first quarter of 2011 and 2010, primarily reflecting growth in fees from accounts receivable management, factoring, trade finance and mortgage banking products. Total noninterest income rose to $11.4 million for the 2011 first quarter from $11.1 million a year earlier, reflecting lower security gains in the 2011 period.

Noninterest expenses were $22.5 million for the 2011 first quarter, compared to $21.3 million a year ago. The increase was primarily due to additional compensation expenses related to the expansion of business development activities, and higher occupancy costs.

Page 3 of 13

Loans and Deposits

Total loans held in portfolio were $1.29 billion at March 31, 2011, rising from $1.20 billion a year earlier. The Company continues to have a robust loan pipeline and believes its strong liquidity provides capacity for further loan growth. The ratio of portfolio loans to deposits was approximately 74.6% at March 31, 2011.

Noninterest-bearing demand deposits totaled $561.5 million at March 31, 2011, a 10.2% increase from a year ago, and represented 32.5% of total deposits, one of the highest ratios of demand to total deposits in the industry. Total deposits were $1.73 billion at March 31, 2011, up from $1.61 billion a year earlier.

Asset Quality

Sterling continued to experience an improvement in credit quality during the 2011 first quarter. The provision for loan losses declined to $3.0 million for the 2011 first quarter, compared to $6.0 million a year earlier. Net charge-offs declined by $2.7 million for the 2011 first quarter, from $5.9 million for the year-ago period. Nonperforming assets were 0.30% of total assets at March 31, 2011, compared to 0.83% a year ago. The allowance for loan losses as a percentage of nonaccrual loans was 257.1% at March 31, 2011, compared to 115.8% at March 31, 2010.

Capital

Sterling’s capital base has continued to exceed all regulatory requirements for well-capitalized institutions. At March 31, 2011, Sterling’s Tier 1 risk-based capital ratio was 15.50% (compared to a requirement of 6.00%), total risk-based capital was 16.53% (requirement of 10.00%), and the Tier 1 leverage ratio was 11.90% (requirement of 5.00%).

The tangible common equity ratio rose to 8.30% at March 31, 2011 from 7.58% a year ago. Book value per common share increased to $7.10 at March 31, 2011, from $7.00 a year earlier.

Conference Call

Sterling Bancorp will host a teleconference call for the financial community on April 26, 2011, at 10:00 a.m. Eastern Time to discuss the first quarter 2011 financial results. To access the conference call live, interested parties may dial 800-288-8968 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 April 26, 2011, until 11:59 p.m. Eastern Time on May 10, 2011. To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 201537.

Page 4 of 13

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 New York 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 the ability to benefit from increased capital that it can deploy to take advantage of growth opportunities, the demand for the Company’s products and services, 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. 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, 2010.

# # #

Page 5 of 13

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


	Three Months Ended March 31,

	2011			2010

BALANCE SHEET HIGHLIGHTS
Period End Balances
Investment securities	$	872,445		$	762,694
Loans held for sale		24,102			20,885
Loans held in portfolio, net of unearned discounts		1,288,649			1,195,042
Federal Reserve Bank and Federal Home Loan Bank stock, at cost		8,674			8,032
Total earning assets		2,201,802			2,033,310
Allowance for loan losses		18,040			19,963
Total assets		2,392,545			2,194,314

Demand deposits		561,524			509,453
Savings, NOW and money market deposits		549,392			562,688
Time deposits		617,169			541,901
Customer repurchase agreements		21,107			21,060
Other short-term borrowings		84,916			19,137
Advances FHLB/Long-term borrowings		154,589			145,774
Shareholders’ equity		260,290			228,164

Average Balances
Investment securities	$	823,713		$	696,197
Loans held for sale		26,043			26,845
Loans held in portfolio, net of unearned discounts		1,228,301			1,132,255
Federal Reserve Bank and Federal Home Loan Bank stock		9,142			8,467
Total earning assets		2,139,788			1,907,129
Total assets		2,324,008			2,070,448

Demand deposits		538,136			468,676
Savings, NOW and money market deposits		567,926			592,583
Time deposits		613,586			452,645
Customer repurchase agreements		41,269			50,525
Other short-term borrowings		28,079			44,837
Advances FHLB/Long-term borrowings		164,989			155,455
Shareholders’ equity		231,413			171,249

ASSET QUALITY HIGHLIGHTS
Period End
Net charge-offs	$	3,198		$	5,870
Nonaccrual loans		7,016			17,239
Other real estate owned		132			874
Nonperforming assets		7,148			18,113
Nonaccrual loans/loans (1)		0.53	%		1.42	%
Nonperforming assets/assets		0.30	%		0.83	%
Allowance for loan losses/loans (2)		1.40	%		1.67	%
Allowance for loan losses/nonaccrual loans		257.13	%		115.80	%

CAPITAL RATIOS
Period End
Tier 1 risk-based		15.50	%		15.73	%
Total risk-based		16.53	%		16.98	%
Leverage		11.90	%		11.74	%
Tangible common equity		8.30	%		7.58	%

Book value per common share	$	7.10		$	7.00

(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 6 of 13

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


	March 31,

	2011		2010

ASSETS
Cash and due from banks	$	35,981	$	28,847
Interest-bearing deposits with other banks		7,932		46,657

Investment securities
Available for sale (at estimated fair value)		414,164		425,339
Held to maturity (at amortized cost)		458,281		337,355

Total investment securities		872,445		762,694


Loans held for sale		24,102		20,885

Loans held in portfolio, net of unearned discounts		1,288,649		1,195,042
Less allowance for loan losses		18,040		19,963

Loans held in portfolio, net		1,270,609		1,175,079

Federal Reserve Bank and Federal Home Loan Bank stock, at cost		8,674		8,032

Customers’ liability under acceptances		228		928
Goodwill		22,901		22,901
Premises and equipment, net		18,000		11,556
Other real estate		132		874
Accrued interest receivable		9,296		7,576
Cash surrender value of life insurance policies		51,998		49,537
Other assets		70,247		58,748

	$	2,392,545	$	2,194,314


LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Demand	$	561,524	$	509,453
Savings, NOW and money market		549,392		562,688
Time		617,169		541,901

Total deposits		1,728,085		1,614,042

Securities sold under agreements to repurchase - customers		21,107		21,060
Securities sold under agreements to repurchase - dealers		5,000		0
Federal funds purchased		60,000		0
Commercial paper		15,391		15,847
Short-term borrowings - FRB		0		0
Short-term borrowings - other		4,525		3,290
Advances - FHLB		128,815		120,000
Long-term borrowings - subordinated debentures		25,774		25,774
Acceptances outstanding		228		928
Accrued interest payable		1,145		1,556
Due to factored clients		70,117		88,471
Accrued expenses and other liabilities		72,068		75,182

Total liabilities		2,132,255		1,966,150

Shareholders’ equity		260,290		228,164

	$	2,392,545	$	2,194,314

MEMORANDA
Available for sale securities - amortized cost	$	415,310	$	424,118
Held to maturity securities - estimated fair value		462,298		345,649
Shares outstanding
Common issued		35,225,110		31,138,545
Common in treasury		4,297,782		4,297,782

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

Page 7 of 13

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


	Three Months Ended March 31,

	2011		2010

INTEREST INCOME
Loans	$	16,876	$	16,511
Investment securities - available for sale		2,423		2,953
Investment securities - held to maturity		3,397		4,412
FRB and FHLB stock		23		121
Deposits with other banks		35		19

Total interest income		22,754		24,016


INTEREST EXPENSE
Savings, NOW and money market deposits		700		965
Time deposits		1,360		1,675
Securities sold u/a/r - customers		48		61
Securities sold u/a/r - dealers		16		0
Federal funds purchased		2		4
Commercial paper		12		13
Short-term borrowings - FHLB		0		0
Short-term borrowings - FRB		0		9
Short-term borrowings - other		0		0
Advances - FHLB		664		871
Long-term subordinated debentures		523		523

Total interest expense		3,325		4,121


Net interest income		19,429		19,895
Provision for loan losses		3,000		6,000


Net interest income after provision for loan losses		16,429		13,895


NONINTEREST INCOME
Accounts receivable management/ factoring commissions and other fees		5,368		5,127
Service charges on deposit accounts		1,371		1,473
Trade finance income		588		492
Other customer related service charges and fees		180		174
Mortgage banking income		2,175		1,677
Trust fees		53		84
Income from life insurance policies		275		264
Securities gains		729		1,502
Loss on sale of OREO		0		13
Other income		703		296

Total noninterest income		11,442		11,102


NONINTEREST EXPENSES
Salaries		10,610		9,658
Employee benefits		3,650		3,504

Total personnel expense		14,260		13,162
Occupancy and equipment expenses, net		3,273		2,540
Advertising and marketing		425		1,006
Professional fees		818		1,353
Communications		410		348
Deposit insurance		933		754
Other expenses		2,334		2,173

Total noninterest expenses		22,453		21,336


Income before income taxes		5,418		3,661
Provision for income taxes		1,475		1,098

Net income		3,943		2,563
Dividends on preferred shares and accretion		644		636


Net income available to common shareholders	$	3,299	$	1,927

Page 8 of 13

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

(continued)


	Three Months Ended March 31,

	2011		2010

Average number of common shares outstanding
Basic		27,351,584		19,208,189
Diluted		27,351,584		19,212,768

Net income available to common shareholders per average common share
Basic	$	0.12	$	0.10
Diluted		0.12		0.10

Dividends per common share		0.09		0.09

Page 9 of 13

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


	Three Months Ended March 31,

	2011			2010

Net income	$	3,943		$	2,563

Other comprehensive income, net of tax:
Unrealized holding gains on securities arising during the period		379			1,214

Reclassification adjustment for securities gains included in net income		(398	)		(820	)
Pension liability adjustment		0			0
Amortization of:
Prior service cost		9			9
Net actuarial losses		389			413


Comprehensive income	$	4,322		$	3,379

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


	Three Months Ended March 31,

	2011			2010

Balance, at beginning of period	$	222,742		$	161,950
Net income for period		3,943			2,563
Common shares issued		36,454			64,865
Common shares issued under stock incentive plan and related tax benefits		0			1,477
Stock option and restricted stock compensation expense		73			36
Cash dividends-Common shares		(2,776	)		(1,630	)
Cash dividends-Preferred shares		(525	)		(525	)
Surrender of shares issued under incentive compensation plan		0			(1,388	)
Change in net unrealized holding gains on securities		379			1,214
Reclassification adjustment for securities gains included in net income		(398	)		(820	)
Pension liability adjustment		0			0
Amortization of:
Prior service cost		9			9
Net actuarial losses		389			413


Balance, at end of period	$	260,290		$	228,164

Page 10 of 13

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

Three Months Ended

March 31, 2011

March 31, 2010

AVERAGE
BALANCE

INTEREST

AVERAGE
RATE

AVERAGE
BALANCE

INTEREST

AVERAGE
RATE

Assets

Interest-bearing deposits with other banks

52,589

0.27

43,365

0.17

Investment Securities

Available for sale - taxable

350,728

2,057

2.35

292,343

2,734

3.74

Held to maturity - taxable

316,118

2,187

2.77

312,199

3,716

4.76

Tax-exempt [2]

156,867

2,425

6.18

91,655

1,408

6.15

Total investment securities

823,713

6,669

3.24

696,197

7,858

4.52

FRB and FHLB stock [2]

9,142

1.02

8,467

122

5.74

Loans, net of unearned discount [3]

1,254,344

16,876

5.59

1,159,100

16,511

5.98

Total Interest-Earning Assets [2]

2,139,788

23,603

4.50

1,907,129

24,510

5.28

Cash and due from banks

36,937

35,588

Allowance for loan losses

(19,817

)

(22,158

)

Goodwill

22,901

Other

144,199

126,988

Total Assets

2,324,008

2,070,448

Liabilities and Shareholders’ Equity

Interest-bearing deposits

Domestic

Savings

19,964

0.05

18,454

0.07

NOW

205,789

0.14

249,671

225

0.37

Money market

342,173

627

0.74

324,458

737

0.92

Time

613,586

1,360

0.90

452,065

1,673

1.50

Foreign

Time

0.00

580

1.09

Total Interest-Bearing Deposits

1,181,512

2,060

0.71

1,045,228

2,640

1.02

Borrowings

Securities sold u/a/r - customers

41,269

0.47

50,525

0.49

Securities sold u/a/r - dealers

5,000

1.29

0.00

Federal funds purchased

4,833

0.15

11,200

0.14

Commercial paper

15,656

0.30

16,404

0.31

Short-term borrowings - FRB

0.00

15,000

0.25

Short-term borrowings - other

2,590

0.00

2,233

0.00

Advances - FHLB

139,215

664

1.93

129,681

871

2.72

Long-term borrowings - sub debt

25,774

523

8.38

25,774

523

8.38

Total Borrowings

234,337

1,265

2.18

250,817

1,481

2.39

Total Interest-Bearing Liabilities

1,415,849

3,325

0.95

1,296,045

4,121

1.29

Noninterest-bearing demand deposits

538,136

—

468,676

—

Total including noninterest-bearing demand deposits

1,953,985

3,325

0.69

1,764,721

4,121

0.95

Other liabilities

138,610

134,478

Total Liabilities

2,092,595

1,899,199

Shareholders’ equity

231,413

171,249

Total Liabilities and Shareholders’ Equity

2,324,008

2,070,448

Net interest income/spread [2]

20,278

3.55

20,389

3.99

Net yield on interest-earning assets [2]

3.84

4.37

Less: Tax-equivalent adjustment

849

494

Net interest income

19,429

19,895


[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 11 of 13

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


	Increase/(Decrease) Three Months Ended March 31, 2011 to March 31, 2010

	Volume			Rate			Net [2]

INTEREST INCOME
Interest-bearing deposits with other banks	$	4		$	12		$	16


Investment Securities
Available for sale - taxable		464			(1,141	)		(677	)
Held to maturity - taxable		45			(1,574	)		(1,529	)
Tax-exempt		1,010			7			1,017

Total investment securities		1,519			(2,708	)		(1,189	)


FRB and FHLB stock		9			(108	)		(99	)

Loans, net of unearned discounts [3]		1,446			(1,081	)		365

TOTAL INTEREST INCOME	$	2,978		$	(3,885	)	$	(907	)


INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	0		$	(1	)	$	(1	)
NOW		(34	)		(120	)		(154	)
Money market		39			(149	)		(110	)
Time		483			(796	)		(313	)
Foreign
Time		(2	)		0			(2	)

Total interest-bearing deposits		486			(1,066	)		(580	)


Borrowings
Securities sold under agreements to repurchase - customers		(11	)		(2	)		(13	)
Securities sold under agreements to repurchase - dealers		16			0			16
Federal funds purchased		(2	)		0			(2	)
Commercial paper		(1	)		0			(1	)
Short-term borrowings - FRB		(9	)		0			(9	)
Short-term borrowings - other		0			0			0
Advances - FHLB		60			(267	)		(207	)
Long-term borrowings - subordinated debentures		0			0			0

Total borrowings		53			(269	)		(216	)



TOTAL INTEREST EXPENSE	$	539		$	(1,335	)	$	(796	)


NET INTEREST INCOME	$	2,439		$	(2,550	)	$	(111	)


[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 12 of 13

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.


	March 31,

	2011			2010

Tangible common equity

Total shareholders’ equity	$	260,290		$	228,164
Less:
Preferred equity		40,721			40,224
Goodwill and other intangible assets		22,901			23,451

Total tangible common equity	$	196,668		$	164,489


Tangible assets

Total assets	$	2,392,545		$	2,194,314
Less: Goodwill and other intangible assets		22,901			23,451

Total tangible assets	$	2,369,644		$	2,170,863



Tangible common equity ratio		8.30	%		7.58	%

Page 13 of 13

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