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Sterling Bancorp Announces Results for the Second Fiscal Quarter and Six Months Ended March 31, 2014

Strong Quarter Performance Highlighted by Core Diluted Earnings per Share of $0.16, GAAP Diluted Earnings per Share of $0.12, and Annualized Commercial Loan Growth of 17.7%

MONTEBELLO, NY -- (Marketwired) -- 04/30/14 -- Sterling Bancorp (NYSE: STL)

Key Highlights for the Second Fiscal Quarter 2014

  • First full fiscal quarter as the combined Sterling Bancorp (merger of legacy Provident New York Bancorp and legacy Sterling Bancorp).
  • Total revenue excluding securities gains was $66.4 million.
  • Tax equivalent net interest margin was 3.76%, compared to 3.58% in the linked quarter and 3.41% in the second quarter of fiscal 2013.
  • Total non-interest income was $12.4 million, which represented 18.6% of total revenue.
  • Core operating efficiency ratio was 62.0%.
  • Annualized commercial loan growth of 17.7% over prior quarter.
  • Annualized deposit growth (including municipal deposits) of 23.7% over prior quarter.
  • Core return on average tangible assets was 0.85%, compared to 0.66% in the linked quarter and 0.77% in the second quarter of fiscal 2013.
  • Core return on average tangible equity was 10.8%, compared to 8.6% in the linked quarter and 8.7% in the second quarter of fiscal 2013.

Sterling Bancorp (NYSE: STL), the parent company of Sterling National Bank, today announced results for the quarter and six months ended March 31, 2014. Net income for the quarter was $10.3 million, or $0.12 per diluted share, compared to net income of $6.5 million, or $0.15 per diluted share for the same quarter last year and net loss of $(14.0) million, or $(0.20) per diluted share, which included a number of merger-related expenses and other charges, for the linked quarter ended December 31, 2013. For the six months ended March 31, 2014, net loss was $(3.7) million, or $(0.05) per diluted share, compared to net income of $13.5 million, or $0.31 per diluted share for the six months ended March 31, 2013.

Results for the quarter and six months ended March 31, 2014 were impacted by pre-tax merger-related expenses associated with the legacy Sterling Bancorp merger transaction and pre-tax charges for asset write-downs and the settlement of benefit plan obligations. In total, merger-related expenses and other charges were $4.0 million in the second fiscal quarter of 2014 and $39.0 million in the six months ended March 31, 2014. Excluding the impact of these items, net income for the second fiscal quarter of 2014 was $13.2 million, or $0.16 per diluted share and net income for the six months ended March 31, 2014 was $22.7 million, or $0.29 per diluted share.

See the reconciliation of the Company's non-GAAP financial measures included in this press release beginning on page 10. Non-GAAP financial measures include references to the terms "core" or "excluding".

President's Comments
Jack Kopnisky, President and CEO, commented: "During the quarter we continued to successfully execute our strategy of building a high performance regional bank that delivers superior service to our small and middle market commercial clients and consumers. We have made significant progress in the integration of legacy Sterling Bancorp, as evidenced by our strong results in the quarter which included higher profitability, double-digit loan growth and a significant improvement in operating efficiency.

"Core earnings for the quarter were $13.2 million and core earnings per diluted share were $0.16. Our profitability ratios continued to improve; for the quarter, our core return on average tangible assets was 0.85% and core return on average tangible equity was 10.8%. This compares to 0.77% and 8.7%, respectively for the same quarter a year ago.

"We experienced strong loan growth across multiple asset classes. As of March 31, 2014, total loans including loans held for sale were $4.3 billion, which represented annualized growth of 11.4% over the prior quarter end. Focusing on our commercial portfolio, which includes commercial and industrial loans, commercial real estate loans and specialty lending businesses, commercial loan balances grew by $145.4 million to $3.4 billion, which represented annualized growth of 17.7% over the prior quarter end.

"Our funding and liquidity position remains strong and the increase in our deposit balances also highlights the success of the merger integration. As of March 31, 2014, our retail and commercial transaction, money market and savings accounts were $3.7 billion, which represented annual growth of 7.2% over balances at December 31, 2013. We have re-started our recruiting efforts and hired 11 new relationship bankers during the second quarter. We anticipate that our existing and new commercial relationship teams will continue to drive significant loan and deposit growth.

"We continue to focus on diversifying and improving our revenue mix. Non-interest income was $12.4 million for the quarter, which represented approximately 18.6% of total revenue. We continue to see significant opportunities to grow our specialty lending businesses, which we anticipate will allow us to grow fee income and increase the proportion of fee income to total revenue to approximately 20% - 25% over time.

"We have also begun to realize the anticipated cost savings from the merger. For the quarter, our core operating efficiency ratio was 62.0%, which compares to 65.4% in the linked quarter and 67.4% in the same quarter a year ago. We anticipate we will continue to improve operating efficiency as we realize the benefits of becoming a larger, more diversified company.

"Net charge-offs against the allowance for loan losses for the quarter ended March 31, 2014 were $3.4 million, compared to $1.3 million in the prior quarter. A significant portion of these charge-offs were associated with three acquisition, development and construction relationships, a portfolio we are in the process of liquidating. The allowance for loan losses to total loans, excluding loans acquired in the Gotham and legacy Sterling Bancorp transactions that were recorded at fair value at their acquisition dates and continue to carry no allowance, was 1.12%.

"Today we also announced plans to redeem all of the issued and outstanding 8.375% Cumulative Trust Preferred Securities of Sterling Bancorp Trust I on June 1, 2014, which will generate significant interest expense savings.

"Our capital position remains strong. At March 31, 2014, our tangible equity to tangible assets ratio was 7.69% and our Tier 1 leverage ratio at Sterling National Bank was 9.83%. We have ample capital and liquidity to support our growth and execute our strategy. Lastly, I am pleased to announce our Board of Directors has declared a dividend on our common stock of $0.07 per share payable on May 22, 2014 to our holders on the record date of May 12, 2014."

Net Interest Income and Margin
Second quarter fiscal 2014 compared to the second quarter fiscal 2013
Net interest income was $54.0 million, up $26.2 million compared to the second quarter of fiscal 2013. This was mainly the result of higher average loans and investment securities balances and an increase in net interest margin due to the merger transaction with legacy Sterling Bancorp. The tax-equivalent yield on investments increased 45 basis points and yield on loans increased 12 basis points. Yield on loans included $2.6 million in accretion of the fair value discount associated with the loans acquired from Gotham and legacy Sterling Bancorp. The cost of total deposits was 19 basis points and the cost of borrowings was 3.01%. The net interest margin on a tax-equivalent basis was 3.76% compared to 3.41% for the same period a year ago.

Second quarter fiscal 2014 compared with linked quarter ended December 31, 2013
Net interest income increased $8.2 million compared to the linked quarter ended December 31, 2013. The increase in net interest income for the second quarter was due to higher average loans and investment securities balances and an increase in net interest margin due to the legacy Sterling Bancorp merger transaction. Average earning assets for the quarter were $6.0 billion, the yield on loans increased to 5.05% and tax-equivalent yield on interest earning assets was 4.25%. Tax-equivalent net interest margin increased to 3.76% from 3.58% in the linked quarter.

Non-interest Income
Second quarter fiscal 2014 compared with second quarter fiscal 2013
Excluding net gains and losses on sale of securities, non-interest income increased $7.7 million to $12.4 million during the second quarter of fiscal 2014. The increase was mainly due to an increase in fees associated with service charges on deposits, fees generated in the factoring and payroll finance businesses and gain on sale income in mortgage banking. The Company realized a net gain on sale of securities of $60 thousand for the second quarter of fiscal 2014 compared to net gain on sale of securities of $2.2 million in the year ago quarter.

Second quarter fiscal 2014 compared with linked quarter ended December 31, 2013
Excluding net gains and losses on sale of securities, non-interest income increased $2.6 million to $12.4 million during the second fiscal quarter of 2014. The increase was mainly due to the factors discussed above. The Company realized a net loss on sale of securities of $645 thousand in the linked quarter ended December 31, 2013.

Non-interest Expense
Second quarter fiscal 2014 compared with second quarter fiscal 2013
Non-interest expense increased $23.4 million relative to the second quarter of fiscal 2013 to $46.7 million, principally the result of increased compensation and benefits expense, occupancy and office operations expense, and other expenses due to the legacy Sterling Bancorp merger transaction. Other expenses for the quarter included merger-related expenses of $388 thousand, a charge related to the core banking systems conversion of $423 thousand, severance compensation of $255 thousand, a charge on the settlement of the legacy Provident employee stock ownership plan and a portion of the legacy Sterling Bancorp defined benefit pension plan obligations of $1.5 million, and the amortization of non-compete agreements of approximately $1.5 million. The charge related to the core systems conversion mainly represented consulting fees and personnel training costs incurred in connection with the integration of the legacy Provident Bank and legacy Sterling National Bank technology systems. The merger-related charges incurred in the second fiscal quarter of 2014 represented final expenses related to client communications, branding, relocation of personnel and professional fees.

Second quarter fiscal 2014 compared with the linked quarter ended December 31, 2013
Non-interest expense decreased $26.3 million compared to the linked quarter. The Company incurred merger-related expenses of $9.1 million and a charge for asset write-downs, retention and severance compensation of $22.2 million in the quarter ended December 31, 2013. The decrease in these expenses between the two periods was partially offset by higher expenses given legacy Sterling Bancorp's operations were fully incorporated in the Company's results in the second fiscal quarter of 2014.

Income Taxes
In the second quarter of fiscal 2014 the Company recorded income taxes at a rate of 30.8% compared to an effective tax benefit rate of 33.2% in the linked quarter and 25.2% for the same period in fiscal 2013. Income tax expense for the period was principally impacted by higher pre-tax income, a lower proportion of interest earned on municipal securities and income on bank owned life insurance, and an investment in low income housing tax credits. We have reviewed the changes to the New York State tax laws enacted March 31, 2014 and determined the impact to our financial statements will be immaterial.

Key Balance Sheet Highlights Year-to-Date at March 31, 2014

  • Total assets were $6.9 billion.
  • Total loans including loans held for sale were $4.3 billion.
  • Commercial and industrial loans represented 43.1%, commercial real estate loans represented 38.0%, consumer and residential mortgage loans represented 16.8%, and acquisition, development and construction loans represented 2.1% of the total loan portfolio.
  • Commercial loan growth, which includes commercial and industrial loans, commercial real estate loans and specialty lending businesses was $145.4 million for the quarter ended March 31, 2014, and represented annualized growth of 17.7% over the prior quarter.
  • Securities, excluding FHLB and FRB Stock, were $1.8 billion and represented 25.4% of total assets.
  • Total deposits were $5.2 billion.
  • Transaction, money market and savings deposits (including municipal deposits) were $4.7 billion and represented 89.8% of total deposits.
  • The allowance for loan losses was $32.0 million and represented 1.12% of total loans excluding the impact of loans acquired in the Gotham transaction and the legacy Sterling Bancorp merger transactions that were recorded at fair value at the acquisition date and continue to carry no allowance for loan losses.
  • Tangible book value per share was $5.97.

Credit Quality
Non-performing loans increased $16.8 million to $55.2 million at March 31, 2014 compared to $38.4 million at December 31, 2013. This increase was mainly due to three acquisition, development and construction relationships that were reclassified as non-performing loans during the quarter. Net charge-offs for the second quarter that were charged to the allowance for loan losses were $3.4 million compared to $1.3 million in the linked quarter. The allowance for loan losses at March 31, 2014 was $32.0 million, which represented 58.0% of non-performing loans and 0.75% of our total loan portfolio. The increase in the balance of the allowance for loan losses was mainly related to the higher balance of loans outstanding at March 31, 2014. The allowance for loan losses to total loans, excluding loans acquired in the Gotham and legacy Sterling Bancorp merger transactions that were recorded at fair value at the acquisition dates and continue to carry no allowance, was 1.12% at March 31, 2014. Please refer to the Company's reconciliation of this non-GAAP measure on page 10.

Capital
The Company's stockholders' equity was $936.5 million at March 31, 2014, an increase of $453.6 million relative to September 30, 2013. The increase in stockholders' equity was mainly the result of the legacy Sterling Bancorp merger transaction, which increased capital by $457.8 million. Other contributors to the change in capital included an increase in other comprehensive income of $1.0 million and items related to stock-based compensation of $4.3 million. These increases were partially offset by the net loss of ($3.7 million) and dividends of $5.9 million declared during the first six months of fiscal 2014.

Tangible book value per share decreased from $7.08 at September 30, 2013 to $5.97 at March 31, 2014. Total goodwill and other intangible assets were $437.7 million at March 31, 2014, an increase of $268.7 million over September 30, 2013. For the quarter ended March 31, 2014, basic and diluted weighted average common shares outstanding increased to 83.5 million and 83.8 million, compared to 43.7 million basic shares and 43.9 million diluted shares, respectively, for the quarter ended September 30, 2013. The increase in basic and diluted shares is mainly the result of the issuance of 39.1 million shares of common stock in October 2013 in connection with the legacy Sterling Bancorp merger transaction. Total shares outstanding at March 31, 2014 were approximately 83.5 million.

Consolidated tangible equity to tangible assets was 7.69% at March 31, 2014 and Sterling National Bank remained well capitalized with a Tier 1 leverage ratio of 9.83%.

Sterling Bancorp will host a teleconference and webcast on Thursday, May 1, 2014 at 10:30 AM EDT to discuss the Company's results. Interested parties are invited to listen to the webcast and view accompanying slides on the Company's website www.sterlingbancorp.com. Analysts are invited to listen by dialing (855) 877-0343, Conference ID #27833566. A replay of the teleconference can be accessed through the Company's website.

About Sterling Bancorp
Headquartered in Montebello, N.Y., Sterling Bancorp is the holding company for Sterling National Bank, a growing full service commercial bank with $6.9 billion in assets that specializes in the delivery of service and solutions to business owners, their families, and consumers in communities within the greater New York City metropolitan region 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 web site 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: difficulties and delays in integrating the combined businesses of Provident New York Bancorp and legacy Sterling Bancorp or fully realizing cost savings and other benefits; inflation; the effects of, and changes in, trade; changes in asset quality and credit risk; introduction, withdrawal, success and timing of business initiatives; capital management activities; customer disintermediation; and the success of Sterling Bancorp in managing those risks. Other factors that could cause Sterling Bancorp's actual results to differ from those indicated in forward-looking statements are included in the "Risk Factors" section of Sterling Bancorp's filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2014. 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 10-Q to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.


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

                                          3/31/2014   9/30/2013   3/31/2013
                                         ----------- ----------- -----------
Assets:
Cash and due from banks                  $  164,645  $  113,090  $   73,396
Investment securities                     1,760,575   1,208,392   1,129,213
Loans held for sale                          21,348       1,011       1,040
Loans:
  Residential mortgage                      512,875     400,009     365,485
  Commercial real estate                  1,614,002   1,277,037   1,149,463
  Commercial and industrial               1,827,374     439,787     370,246
  Acquisition, development and
   construction                              90,905     102,494     118,115
  Consumer                                  199,198     193,571     201,246
                                         ----------  ----------  ----------
    Total loans, gross                    4,244,354   2,412,898   2,204,555
  Allowance for loan losses                 (32,015)    (28,877)    (27,544)
                                         ----------  ----------  ----------
    Total loans, net                      4,212,339   2,384,021   2,177,011
Federal Home Loan Bank ("FHLB") and
 Federal Reserve Bank Stock, at cost         53,346      24,312      20,251
Accrued interest receivable                  18,154      11,698      11,819
Premises and equipment, net                  49,041      36,520      37,617
Goodwill                                    387,286     163,117     163,117
Other intangibles                            50,441       5,891       6,538
Bank owned life insurance                   117,572      60,914      59,916
Other real estate owned                       9,275       6,022       5,486
Other assets                                 80,397      34,184      25,036
                                         ----------  ----------  ----------
    Total assets                         $6,924,419  $4,049,172  $3,710,440
                                         ==========  ==========  ==========
Liabilities:
Deposits                                 $5,211,724  $2,962,294  $2,799,658
FHLB borrowings                             489,801     442,602     347,450
Other borrowings                             19,991      20,351      20,526
Senior notes                                 98,215      98,033           -
Subordinated debentures                      26,509           -           -
Mortgage escrow funds                         8,711      12,646      17,582
Other liabilities                           133,002      30,380      30,513
                                         ----------  ----------  ----------
    Total liabilities                     5,987,953   3,566,306   3,215,729
Stockholders' equity                        936,466     482,866     494,711
                                         ----------  ----------  ----------
    Total liabilities and stockholders'
     equity                              $6,924,419  $4,049,172  $3,710,440
                                         ==========  ==========  ==========

Shares of common stock outstanding at
 period end                              83,544,307  44,351,046  44,353,276
Book value per share                     $    11.21  $    10.89  $    11.15
Tangible book value per share                  5.97        7.08        7.33


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

                                                        For the Six Months
                          For the Quarter Ended                Ended
                    --------------------------------- ----------------------
                     3/31/2014  12/31/2013  3/31/2013  3/31/2014   3/31/2013
                    ---------- ----------- ---------- ----------- ----------
Interest and
 dividend income:
  Loans and loan
   fees             $   50,312 $   43,288  $   26,378 $   93,600  $   53,449
  Securities
   taxable               7,573      6,903       4,288     14,475       8,572
  Securities non-
   taxable               2,674      2,161       1,490      4,835       2,947
  Other earning
   assets                  766        359         264      1,125         597
                    ---------- ----------  ---------- ----------  ----------
  Total interest
   income               61,325     52,711      32,420    114,035      65,565
Interest expense:
  Deposits               2,394      1,834       1,624      4,135       3,721
  Borrowings             4,903      5,001       2,977      9,997       6,102
                    ---------- ----------  ---------- ----------  ----------
Total interest
 expense                 7,297      6,835       4,601     14,132       9,823
                    ---------- ----------  ---------- ----------  ----------
Net interest income     54,028     45,876      27,819     99,903      55,742
Provision for loan
 losses                  4,800      3,000       2,600      7,800       5,550
                    ---------- ----------  ---------- ----------  ----------
Net interest income
 after provision
 for loan losses        49,228     42,876      25,219     92,103      50,192
Non-interest
 income:
  Accounts
   receivable /
   factoring
   commissions and
   other fees            3,500      2,226           -      5,720           -
  Mortgage banking
   income                2,383      1,616         507      3,999       1,253
  Deposit fees and
   service charges       3,904      3,942       2,736      7,846       5,514
  Net gain (loss)
   on sale of
   securities               60       (645)      2,229       (585)      3,645
  Investment
   management fees         542        540         422      1,083       1,127
  Bank owned life
   insurance               729        740         491      1,469       1,000
  Other                  1,297        729         467      2,032       1,972
                    ---------- ----------  ---------- ----------  ----------
Total non-interest
 income                 12,415      9,148       6,852     21,564      14,511
Non-interest
 expense:
  Compensation and
   benefits             25,263     23,554      11,805     48,819      24,104
  Stock-based
   compensation
   plans                   927        991         679      1,918       1,179
  Occupancy and
   office
   operations            7,254      6,333       3,954     13,587       7,764
  Merger-related
   expenses                388      9,068         542      9,456         542
  Advertising and
   promotion               422        309         535        731         779
  Professional fees      1,500      1,818         912      3,319       2,127
  Data and check
   processing              663        595         823      1,258       1,472
  Amortization of
   intangible
   assets                2,511      1,875         388      4,386         649
  FDIC insurance
   and regulatory
   assessments           1,567      1,164         753      2,731       1,471
  Other real estate
   owned expense            61        368         915        429       1,200
  Other                  6,167     26,899       2,033     33,065       4,598
                    ---------- ----------  ---------- ----------  ----------
Total non-interest
 expense                46,723     72,974      23,339    119,699      45,885
                    ---------- ----------  ---------- ----------  ----------
Income (loss)
 before income tax
 expense                14,920    (20,950)      8,732     (6,032)     18,818
Income tax expense
 (benefit)               4,588     (6,948)      2,203     (2,361)      5,269
                    ---------- ----------  ---------- ----------  ----------
Net income (loss)   $   10,332 $  (14,002) $    6,529 $   (3,671) $   13,549
                    ========== ==========  ========== ==========  ==========
  Basic earnings
   per share        $     0.12 $    (0.20) $     0.15 $    (0.05) $     0.31
  Diluted earnings
   per share              0.12      (0.20)       0.15      (0.05)       0.31
  Dividends
   declared per
   share                  0.07          -        0.06       0.07        0.12
Weighted average
 common shares:
  Basic             83,497,765 70,493,305  43,743,640 76,924,082  43,704,163
  Diluted           83,794,107 70,493,305  43,848,486 76,924,082  43,790,915



Sterling Bancorp and Subsidiaries
                           SELECTED FINANCIAL DATA
         (unaudited, in thousands, except share and per share data)

                                 As of and for the Quarter Ended
                     -------------------------------------------------------
End of Period         3/31/2014  12/31/2013  9/30/2013  6/30/2013  3/31/2013
                     ---------- ----------- ---------- ---------- ----------
Total assets         $6,924,419 $6,667,437  $4,049,172 $3,824,429 $3,710,440
Securities available
 for sale             1,233,310  1,153,313     954,393    889,747    945,678
Securities held to
 maturity               527,265    508,337     253,999    175,977    183,535
Loans, gross (1)      4,244,354  4,127,141   2,412,898  2,336,534  2,204,555
Goodwill                387,286    387,517     163,117    163,117    163,117
Other intangibles        50,441     53,020       5,891      6,201      6,538
Deposits              5,211,724  4,920,564   2,962,294  2,739,214  2,799,658
Municipal deposits
 (included above)       926,618    673,656     757,066    465,566    537,070
Borrowings              634,516    696,270     560,986    552,805    367,976
Stockholders' equity    936,466    925,109     482,866    480,165    494,711
Tangible equity         498,739    484,572     313,858    310,847    325,056

Average Balances
Total assets         $6,747,546 $6,013,816  $3,907,960 $3,745,356 $3,804,660
Loans, gross:
  Residential
   mortgage             520,887    491,231     379,640    366,823    360,840
  Commercial real
   estate             1,580,454  1,466,986   1,247,055  1,175,094  1,138,333
  Commercial and
   industrial         1,625,720  1,268,492     443,349    398,622    368,896
  Acquisition,
   development and
   construction          93,531     98,691     104,856    114,286    122,937
  Consumer              199,834    200,637     194,718    199,861    203,492
Loans, total (1)      4,020,426  3,526,037   2,369,618  2,254,686  2,194,498
Securities (taxable)  1,386,538  1,330,646     963,949    909,312    967,889
Securities (non-
 taxable)               324,470    250,520     157,480    184,325    181,803
Total earning assets  5,985,054  5,207,436   3,529,321  3,378,655  3,403,209
Deposits:
  Non-interest
   bearing demand     1,640,125  1,361,622     669,067    625,684    641,194
  Interest bearing
   demand               761,409    619,746     426,602    461,390    508,129
  Savings (including
   mortgage escrow
   funds)               613,131    622,530     601,272    581,106    575,380
  Money market        1,461,774  1,182,858     715,351    777,857    877,101
  Certificates of
   deposit              582,580    565,462     335,616    338,017    355,917
Total deposits and
 mortgage escrow      5,059,019  4,352,218   2,747,908  2,784,054  2,957,721
Borrowings              660,486    709,125     653,147    440,579    345,717
Equity                  934,304    780,241     478,491    494,049    492,725
Tangible equity         494,697    432,703     309,327    324,540    322,683

Condensed Tax
 Equivalent Income
 Statement
Interest and
 dividend income     $   61,325 $   52,711  $   33,903 $   32,593 $   32,420
Tax equivalent
 adjustment*              1,440      1,164         666        808        802
Interest expense          7,297      6,835       5,795      4,276      4,601
                     ---------- ----------  ---------- ---------- ----------
Net interest income
 (tax equivalent)        55,468     47,040      28,774     29,125     28,621
Provision for loan
 losses                   4,800      3,000       2,700      3,900      2,600
                     ---------- ----------  ---------- ---------- ----------
Net interest income
 after provision for
 loan losses             50,668     44,040      26,074     25,225     26,021
Non-interest income      12,415      9,148       6,600      6,581      6,852
Non-interest expense     46,723     72,974      23,367     21,789     23,339
                     ---------- ----------  ---------- ---------- ----------
Income (loss) before
 income tax expense      16,360    (19,786)      9,307     10,017      9,534
Income tax expense
 (benefit) (tax
 equivalent)*             6,028     (5,784)      3,978      3,641      3,005
                     ---------- ----------  ---------- ---------- ----------
Net income (loss)    $   10,332 $  (14,002) $    5,329 $    6,376 $    6,529
                     ========== ==========  ========== ========== ==========

(1) Does not reflect allowance for loan losses of $32,015, $30,612, $28,877,
 $28,374 and $27,544.
*Tax exempt income assumed at a statutory 35% federal tax rate.



Sterling Bancorp and Subsidiaries
                          SELECTED FINANCIAL RATIOS
         (unaudited, in thousands, except share and per share data)

                                    For the Quarter Ended
                ------------------------------------------------------------
Per Share Data   3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013
                ----------- ------------ ----------- ----------- -----------
Basic earnings
 per share      $     0.12  $    (0.20)  $     0.12  $     0.15  $     0.15
Diluted
 earnings per
 share                0.12       (0.20)        0.12        0.15        0.15
Dividends
 declared per
 share                0.07           -         0.12        0.06        0.06
Tangible book
 value per
 share                5.97        5.77         7.08        7.01        7.33
Shares of
 common stock
 outstanding    83,544,307  83,955,647   44,351,046  44,353,276  44,353,276
Basic weighted
 average common
 shares
 outstanding    83,497,765  70,493,305   43,742,903  43,801,867  43,743,640
Diluted
 weighted
 average common
 shares
 outstanding    83,794,107  70,493,305   43,859,834  43,906,158  43,848,486

Performance
 Ratios
 (annualized)
Return on
 average assets       0.62%      (0.92)%       0.54%       0.68%       0.70%
Return on
 average equity       4.48%      (7.12)%       4.42%       5.18%       5.37%
Return on
 average
 tangible
 equity(1)            8.47%     (12.84)%       6.83%       7.88%       8.21%
Core operating
 efficiency(1)        62.0%       65.4%        64.7%       59.1%       67.4%

Analysis of Net
 Interest
 Income
Yield on loans        5.05%       4.88%        4.70%       4.80%       4.93%
Yield on
 investment
 securities -
 tax
 equivalent(2)        2.77%       2.57%        2.35%       2.38%       2.32%
Yield on
 earning assets
 - tax
 equivalent(2)        4.25%       4.10%        3.89%       3.97%       3.96%
Cost of
 deposits             0.19%       0.17%        0.15%       0.17%       0.22%
Cost of
 borrowings           3.01%       2.80%        2.88%       2.84%       3.49%
Cost of
 interest
 bearing
 liabilities          0.73%       0.73%        0.84%       0.66%       0.70%
Net interest
 rate spread -
 tax equivalent
 basis(2)             3.52%       3.37%        3.05%       3.31%       3.26%
Net interest
 margin - tax
 equivalent
 basis(2)             3.76%       3.58%        3.23%       3.46%       3.41%

Capital
Tier 1 leverage
 ratio - Bank
 only                 9.83%      10.58%        9.33%       8.49%       8.62%
Tier 1 risk-
 based capital
 - Bank only    $  622,878  $  593,462   $  363,274  $  311,507  $  304,696
Total risk-
 based capital
 - Bank only       655,288     624,469      392,376     340,077     332,447
Tangible equity
 as a % of
 tangible
 assets -
 consolidated(1)
                      7.69%       7.78%        8.09%       8.50%       9.18%

Asset Quality
Non-performing
 loans (NPLs)
 non-accrual    $   54,877  $   35,597   $   22,807  $   27,244  $   27,019
Non-performing
 loans (NPLs)
 still accruing        280       2,845        4,099       4,216       4,257
Other real
 estate owned        9,275      11,751        6,022       4,376       5,486
Non-performing
 assets (NPAs)      64,432      50,193       32,928      35,836      36,762
Net charge-offs      3,397       1,265        2,197       3,070       3,170
Net charge-offs
 as a % of
 average loans
 (annualized)         0.34%       0.14%        0.37%       0.54%       0.58%
NPLs as a % of
 total loans          1.30%       0.93%        1.12%       1.35%       1.42%
NPAs as a % of
 total assets         0.93%       0.75%        0.81%       0.94%       0.99%
Allowance for
 loan losses as
 a % of NPLs          58.0%       79.6%       107.3%       90.2%       88.1%
Allowance for
 loan losses as
 a % of total
 loans                0.75%       0.74%        1.20%       1.21%       1.25%
Allowance for
 loan losses as
 a % of total
 loans,
 excluding
 Gotham and
 legacy
 Sterling
 loans(1)             1.12%       1.24%        1.27%       1.30%       1.36%
Special mention
 loans          $   39,964  $   38,834   $   13,530  $   24,327  $   41,778
Substandard /
 doubtful loans     82,673      77,337       61,095      62,165      70,688
----------------------------------------------------------------------------

(1) See reconciliation of non-GAAP measure on following page.
(2) Tax equivalent adjustment represents interest income earned on municipal
 securities divided by the applicable Federal tax rate of 35% for all
 periods presented.



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

                               As of and for the Quarter Ended
                ------------------------------------------------------------
                 3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013
                ----------- ------------ ----------- ----------- -----------
The Company provides supplemental reporting of non-GAAP measures as
 management believes this information is useful to investors.

The following table shows the reconciliation of stockholders' equity to
 tangible equity and the tangible equity ratio:
Total assets    $6,924,419  $6,667,437   $4,049,172  $3,824,429  $3,710,440
Goodwill and
 other
 intangibles      (437,727)   (440,537)    (169,008)   (169,318)   (169,655)
                ----------  ----------   ----------  ----------  ----------
Tangible assets  6,486,692   6,226,900    3,880,164   3,655,111   3,540,785
                ----------  ----------   ----------  ----------  ----------
Stockholders'
 equity            936,466     925,109      482,866     480,165     494,711
Goodwill and
 other
 intangibles      (437,727)   (440,537)    (169,008)   (169,318)   (169,655)
                ----------  ----------   ----------  ----------  ----------
Tangible
 stockholders'
 equity            498,739     484,572      313,858     310,847     325,056
                ----------  ----------   ----------  ----------  ----------
Shares of
 common stock
 outstanding at
 period end     83,544,307  83,955,647   44,351,046  44,353,276  44,353,276
Tangible equity
 as a % of
 tangible
 assets               7.69%       7.78%        8.09%       8.50%       9.18%
Tangible book
 value per
 share          $     5.97  $     5.77   $     7.08  $     7.01  $     7.33
The Company believes that tangible equity is useful as a tool to help assess
 a company's capital position.

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

Average
 stockholders'
 equity         $  934,304  $  780,241   $  478,491  $  494,049  $  492,725
Average
 goodwill and
 other
 intangibles      (439,613)   (347,538)    (169,164)   (169,509)   (170,042)
                ----------  ----------   ----------  ----------  ----------
Average
 tangible
 stockholders'
 equity            494,691     432,703      309,327     324,540     322,683
                ----------  ----------   ----------  ----------  ----------
Net income
 (loss)             10,332     (14,002)       5,329       6,376       6,529
Net income
 (loss), if
 annualized         41,902     (55,551)      21,142      25,574      26,479
Return on
 average
 tangible
 equity               8.47%     (12.84)%       6.83%       7.88%       8.21%
Core net income
 (see
 reconciliation
 on page 11)    $   13,203  $    9,374   $    6,117  $    7,426  $    6,934
Annualized core
 net income         53,546      37,190       24,269      29,786      28,121
Core return on
 average
 tangible
 equity              10.82%       8.59%        7.85%       9.18%       8.71%
The Company believes that the return on average tangible stockholders'
 equity is useful as a tool to help assess a company's use of tangible
 equity.

The following table shows the reconciliation of the allowance for loan
losses to total loans and to total loans excluding Gotham and legacy
Sterling Bancorp loans:

Total loans     $4,244,354  $4,127,141   $2,412,898  $2,336,534  $2,204,555
Gotham loans      (101,273)   (117,046)    (133,493)   (152,825)   (176,383)
Legacy Sterling
 loans          (1,277,335) (1,539,962)           -           -           -
                ----------  ----------   ----------  ----------  ----------
Total loans,
 excluding
 Gotham and
 legacy
 Sterling loans  2,865,746   2,470,133    2,279,405   2,183,709   2,028,172
Allowance for
 loan losses        32,015      30,612       28,877      28,374      27,544
Allowance for
 loan losses to
 total loans          0.75%       0.74%        1.20%       1.21%       1.25%
Allowance for
 loan losses to
 total loans,
 excluding
 Gotham and
 legacy
 Sterling loans       1.12%       1.24%        1.27%       1.30%       1.36%
----------------------------------------------------------------------------

As required by GAAP, the Company recorded at fair value the loans acquired
 in the Gotham and legacy Sterling Bancorp transactions. These loans carry
 no allowance for loan losses for the periods reflected above.



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

                               As of and for the Quarter Ended
                 -----------------------------------------------------------
                  3/31/2014   12/31/2013  9/30/2013   6/30/2013   3/31/2013
                 ----------- ----------- ----------- ----------- -----------
The following table shows the reconciliation of the core operating
 efficiency ratio:
Net interest
 income          $   54,028  $   45,876  $   28,108  $   28,317  $   27,819
Non-interest
 income              12,415       9,148       6,600       6,581       6,852
                 ----------  ----------  ----------  ----------  ----------
Total net
 revenues            66,443      55,024      34,708      34,898      34,671
Tax equivalent
 adjustment on
 securities
 interest income      1,440       1,164         666         808         802
Net (gain) loss
 on sale of
 securities             (60)        645      (1,801)     (1,945)     (2,229)
Other than
 temporary loss
 on securities            -           -           -           -           7
Other (other
 gains and fair
 value loss on
 interest rate
 caps)                    -         (93)         81           -           -
                 ----------  ----------  ----------  ----------  ----------
Core total
 revenues            67,823      56,740      33,654      33,761      33,251
                 ----------  ----------  ----------  ----------  ----------
Non-interest
 expense             46,723      72,974      23,367      21,789      23,339
Merger-related
 expenses              (388)     (9,068)       (714)     (1,516)       (542)
Charge for asset
 write-downs,
 retention and
 severance
 compensation          (255)    (22,167)       (564)          -           -
Charge on
 pension plan
 settlement          (1,486)     (2,743)          -           -           -
Amortization of
 intangible
 assets              (2,511)     (1,875)       (310)       (337)       (388)
                 ----------  ----------  ----------  ----------  ----------
Core non-
 interest
 expense             42,083      37,121      21,779      19,936      22,409
                 ----------  ----------  ----------  ----------  ----------
Core efficiency
 ratio                 62.0%       65.4%       64.7%       59.1%       67.4%
The Company believes the core operating efficiency ratio is a useful tool to
 help assess a company's core operating performance.

The following table shows the reconciliation of net income (loss) and
earnings (loss) per share excluding merger-related expenses, a charge for
asset write-downs, core conversion, retention and severance compensation, a
charge on settlement of benefit pension plans and the amortization of non-
compete agreements:
Income (loss)
 before income
 tax expense     $   14,920  $  (20,950) $    8,641  $    9,209  $    8,732
Income tax
 expense
 (benefit)            4,588      (6,948)      3,312       2,833       2,203
                 ----------  ----------  ----------  ----------  ----------
Net income
 (loss)              10,332     (14,002)      5,329       6,376       6,529

Merger-related
 expenses               388       9,068         714       1,516         542
Charge for asset
 write-downs,
 core
 conversion,
 retention and
 severance
 compensation           678      22,167         564           -           -
Charge on
 benefit plans
 settlement           1,486       2,743           -           -           -
Amortization of
 non-compete
 agreements           1,497         998           -           -           -
                 ----------  ----------  ----------  ----------  ----------
Total charges         4,049      34,976       1,278       1,516         542
Income tax
 (benefit)           (1,178)    (11,600)       (490)       (466)       (137)
                 ----------  ----------  ----------  ----------  ----------
Total charges
 net of tax
 benefit              2,871      23,376         788       1,050         405
                 ----------  ----------  ----------  ----------  ----------
Net income
 excluding total
 charges         $   13,203  $    9,374  $    6,117  $    7,426  $    6,934
                 ==========  ==========  ==========  ==========  ==========

Weighted average
 diluted
 shares(1)       83,794,107  70,707,292  43,859,834  43,906,158  43,848,486
Diluted EPS as
 reported        $     0.12  $    (0.20) $     0.12  $     0.15  $     0.15
Diluted EPS
 excluding total
 charges               0.16        0.13        0.14        0.17        0.16
----------------------------------------------------------------------------
The Company believes the presentation of its net income excluding total
 charges provides a useful tool to help assess a company's profitability.
(1) For the first fiscal quarter of 2014 represents diluted share
 calculation to compute diluted EPS assuming net income.



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

                               As of and for the Quarter Ended
                ------------------------------------------------------------
                 3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013

The following table shows the reconciliation of return on tangible assets
 and core return on tangible assets:
Average assets  $6,747,546  $6,013,816   $3,907,960  $3,745,356  $3,804,660
Average
 goodwill and
 other
 intangibles      (439,613)   (347,538)    (169,164)   (169,509)   (170,042)
                ----------  ----------   ----------  ----------  ----------
Average
 tangible
 assets          6,307,933   5,666,278    3,738,796   3,575,847   3,634,618
Net income
 (loss)             10,332     (14,002)       5,329       6,376       6,529
Net income
 (loss), if
 annualized         41,902     (55,551)      21,142      25,574      26,479
                ----------  ----------   ----------  ----------  ----------
Return on
 average
 tangible
 assets               0.66%      (0.98)%       0.57%       0.72%       0.73%
Core net income
 (see
 reconciliation
 on page 11)    $   13,203  $    9,374   $    6,117  $    7,426  $    6,934
Annualized core
 net income         53,546      37,190       24,269      29,786      28,121
                ----------  ----------   ----------  ----------  ----------
Core return on
 average
 tangible
 assets               0.85%       0.66%        0.65%       0.83%       0.77%
The company believes that the core return on average tangible assets is a
 useful tool to help assess a company's profitability.

The following table shows the reconciliation of net (loss) income and core
net income for the six months ended March 31:
                                                        For the six months
                                                              ended
                                                     -----------------------
                                                      3/31/2014   3/31/2013
                                                     ----------- -----------
(Loss) income
 before income
 tax expense                                         $   (6,032) $   18,818
Income tax
 (benefit)
 expense                                                 (2,361)      5,269
                                                     ----------  ----------
Net (loss)
 income                                                  (3,671)     13,549

Merger-related
 expenses                                                 9,456         542
Charge for
 asset write-
 downs, core
 conversion,
 retention and
 severance                                               22,845           -
Charge on
 pension plans
 settlement                                               4,229           -
Amortization of
 non-compete
 agreements                                               2,495           -
                                                     ----------  ----------
Total charges                                            39,025         542
Income tax
 (benefit)                                              (12,683)       (152)
                                                     ----------  ----------
Total charges
 net of tax
 benefit                                                 26,342         390
                                                     ----------  ----------
Net income
 excluding
 total charges                                       $   22,671  $   13,939
                                                     ==========  ==========

Weighted
 average
 diluted shares                                      76,924,082  43,790,915
Diluted EPS as
 reported                                            $    (0.05) $     0.31
Diluted EPS
 excluding
 total charges                                             0.29        0.32
----------------------------------------------------------------------------
The Company believes the presentation of its net income excluding total
 charges provides a useful tool to help assess a company's profitability.


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


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

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