Sterling Bancorp Net Income Exceeds $5.3 Million in 2012 Third Quarter, Increasing 22% Year-Over-Year

Advancing Trends in ROA, ROE and Asset Quality

Record Levels of Loans and Deposits

Nov 02, 2012, 07:15 ET from Sterling Bancorp

NEW YORK, Nov. 2, 2012 /PRNewswire/ -- 

Strong Financial Performance

  • Net income available to common shareholders exceeded $5.3 million, more than 22% higher than a year ago.
  • Diluted earnings per common share were $0.17, up from $0.14.
  • Net interest margin increased 12 basis points to 4.02%.
  • Return on average tangible equity advanced to 10.32%.

Robust Loan and Deposit Growth

  • Loans, net of unearned discount approach $1.7 billion, rising 13%.
  • Total deposits up 9% to over $2.2 billion; demand deposits represent 37% of total deposits.

Solid Credit Metrics

  • Net charge-offs decreased to $0.9 million or 0.05% of loans.
  • Ratio of nonperforming assets to total assets decreased to 0.26%.
  • Allowance for loan losses as a percentage of loans held in portfolio was 1.36%.

Comparisons above are at or for the quarters ended September 30, 2012 vs. September 30, 2011.

Sterling Bancorp (NYSE: STL) today reported net income available to common shareholders of $5.3 million for the 2012 third quarter, an increase of 22% from $4.4 million in the 2011 third quarter. Diluted earnings per common share were $0.17 for the 2012 third quarter, up from $0.14 in the year-ago period.

For the first nine months of 2012, net income available to common shareholders rose 45% to $14.8 million, up from $10.2 million in the same period of 2011. Diluted earnings per common share were $0.48 for the first nine months of 2012, up from $0.35 in the year-ago period. Results for the 2011 nine months included dividends on preferred shares and accretion of $2.1 million related to TARP preferred shares and warrants to purchase common shares, which were redeemed in April 2011.

Selected Quarterly Financial Highlights

 

         Quarter Ended         

9/30/12

9/30/11

EARNINGS HIGHLIGHTS

Net income available to common shareholders (in millions)

$5.3

$4.4

Diluted earnings per common share

$0.17

$0.14

Return on average assets

0.82%

0.67%

Return on average tangible equity

10.32%

8.82%

BALANCE SHEET HIGHLIGHTS (in millions)

Total investment securities

$699.8

$800.2

Loans, net of unearned discount

$1,677.0

$1,486.0

Demand deposits

$831.3

$594.3

Total deposits

$2,225.4

$2,047.8

Total assets

$2,699.7

$2,657.0

ASSET QUALITY HIGHLIGHTS

Nonaccrual loans/loans

0.32%

0.38%

Nonperforming assets/assets

0.26%

0.28%

Allowance for loan losses/nonaccrual loans

407.47%

347.38%

Profitable Growth Drives Strong Performance Trends

"Sterling's financial performance has gained greater strength and momentum with each quarter of 2012," said Louis J. Cappelli, Sterling's Chairman and Chief Executive Officer.  "We have focused on growing our core banking operations, specializing in the needs of small and mid-sized businesses, while also enhancing profitability and managing expenses and asset quality. This has produced favorable trends in many areas, including record loans and deposits, continued double-digit earnings growth and higher returns on average assets and average tangible equity."

"Our growth and higher profits are being driven by a number of positive factors," Mr. Cappelli continued. "It is our belief that we are well positioned to benefit from the healthy demand for financial services in the New York City-metropolitan market and beyond, due to our emphasis on the needs of business customers, our tradition of exceptional service and our portfolio of financial solutions.  We have pursued a strategy to redeploy assets from our sizeable liquid investment portfolio into loans, which led to a 5% increase in net interest income and a 12-basis point improvement in the net interest margin compared with last year's third quarter.  The Company also has multiple channels of deposit growth, including dedicated business units that have successfully focused on core deposit sources, as well as deposit balances associated with our lending relationships. We have maintained disciplined management of operating expenses, while our sound asset quality metrics have strengthened even further."

"At a time when the prevailing low interest rate environment has pressured earnings at some banking institutions, Sterling has benefitted from strategies that have led to a growing net interest margin and strong level of noninterest income," Mr. Cappelli noted.  "Our net interest margin is in the top third among banks of our asset size, reflecting our ability to redeploy assets from the investment portfolio into loans, a disciplined approach to deposit pricing, and growth in noninterest-bearing demand deposits.  We also have built a diversified revenue base, with a relatively high level of noninterest income that provided over 28% of total revenues this quarter.  Overall, our efforts to generate a mix of net interest income and noninterest income have produced a balanced revenue base and contributed to our growing profitability."                       

"The Company continues to demonstrate forward momentum on a sequential basis, with a 5% increase in loans, 9% higher deposits and a 64-basis point rise in return on average tangible equity from the second to the third quarter this year.  We believe Sterling's performance during the remainder of 2012 and beyond should continue to benefit from several strong drivers of growth and profitability. Going forward, we expect to maintain our trend of rising loan volume, along with a balanced revenue mix, a focus on managing expenses, and stringent asset quality standards," Mr. Cappelli concluded.

Net Interest Income

Net interest income was $23.8 million for the 2012 third quarter, up 5% from $22.6 million for the 2011 third quarter.  This primarily reflected the Company's execution of its strategy to shift the asset mix toward higher loan balances and lower investment securities balances, with a resulting increase in yields, while also taking a disciplined approach to reducing funding costs.  Net interest margin increased to 4.02% for the 2012 third quarter, up 12 basis points compared to the year-ago period.  For the first nine months of 2012, net interest income increased more than 8% to $69.1 million, from $63.9 million for the 2011 period. 

Noninterest Income

Total noninterest income was $10.5 million for the 2012 third quarter, compared to $10.7 million in the 2011 third quarter.  This primarily reflected lower accounts receivable management and other related fees and reduced securities gains, which were partly offset by higher mortgage banking income.  For the first nine months of 2012, total noninterest income was $31.6 million, versus $32.1 million in the year-ago period. Noninterest income was a key contributor to Sterling's financial performance, representing between 28-29% of total revenue in both the third quarter and first nine months of 2012.

Noninterest Expenses         

Noninterest expenses were $24.5 million for the 2012 third quarter, an increase of only 3% compared with the 2011 third quarter.  For the first nine months of 2012, noninterest expenses were $71.5 million, an increase of less than 3% from the same period of 2011.

Record Loans and Deposits

Loans, net of unearned discount set a record, approaching $1.7 billion at September 30, 2012, an increase of approximately 13% from a year earlier.  The ratio of loans to deposits was more than 75% at September 30, 2012.

Total deposits were a record $2.2 billion at September 30, 2012, increasing nearly 9% from a year earlier. Noninterest-bearing demand deposits represented over 37% of total deposits, among the highest ratios of demand to total deposits in the industry. 

Asset Quality

Sterling continued to exhibit strong credit quality metrics during the 2012 third quarter.  Net charge-offs were $0.9 million for the 2012 third quarter, compared to $2.0 million a year ago. The allowance for loan losses as a percentage of nonaccrual loans was 407% at September 30, 2012, versus 347% a year earlier. Nonperforming assets were $7.0 million or 0.26% of total assets at September 30, 2012, compared to $7.6 million or 0.28% a year ago.  The allowance for loan losses as a percentage of portfolio loans was 1.36% at September 30, 2012, compared to 1.34% a year earlier.  The provision for loan losses decreased to $2.0 million from $3.0 million for the same quarter of 2011. 

Capital

The Company's capital base has continued to exceed all regulatory requirements for well-capitalized institutions.  At September 30, 2012, Sterling's Tier 1 risk-based capital ratio was 11.69% (compared to a requirement of 6.00%), total risk-based capital was 12.82% (requirement of 10.00%), and the Tier 1 leverage ratio was 9.38% (requirement of 5.00%).  The tangible common equity ratio was 7.84% at September 30, 2012.

Conference Call

Sterling Bancorp will host a teleconference call for the financial community on Friday, November 2, 2012, at 10:00 a.m. Eastern Time to discuss these financial results.  To access the conference call live, interested parties may dial 866-233-3843 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 November 2, 2012, until 11:59 p.m. Eastern Time on November 16, 2012.  To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 267654.

About Sterling Bancorp

Sterling Bancorp (NYSE: STL) is a New York City-based financial corporation with assets of $2.7 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 provides clients with a full range of depository and cash management services and 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 our ability to continue growing our core banking operations, to specialize in the needs of small and mid-sized businesses, to enhance profitability and to manage expenses and asset quality, our position to benefit from the demand for financial services in the New York City-metropolitan market and beyond, our ability to redeploy assets from investment portfolio to loans and to produce improvements in our net interest margin from such strategy, our ability to utilize channels of deposit growth and our ability to maintain our revenue generation capacity and disciplined management of operating expenses, whether our performance during the remainder of 2012 and beyond will continue to be strong and whether our trend of rising loan volume, along with a balanced revenue mix, a focus on managing expenses and stringent asset quality standards will persist, 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, 2011.

STERLING BANCORP

Consolidated Financial Highlights

(Unaudited)

(dollars in thousands, except per share data)

Three Months Ended September 30, 

Nine Months Ended September 30, 

2012

2011

2012

2011

BALANCE SHEET HIGHLIGHTS 

Period End Balances

   Investment securities

$699,801

$800,233

$699,801

$800,233

   Loans held for sale

51,551

22,874

51,551

22,874

   Loans held in portfolio, 

      net of unearned discount

1,625,415

1,463,171

1,625,415

1,463,171

   Interest bearing deposits with other banks

149,592

186,632

149,592

186,632

   Total earning assets

2,533,837

2,481,412

2,533,837

2,481,412

   Allowance for loan losses

22,154

19,547

22,154

19,547

   Total assets

2,699,725

2,656,975

2,699,725

2,656,975

   Demand deposits

831,281

594,250

831,281

594,250

   Savings, NOW and money market deposits

667,517

607,049

667,517

607,049

   Time deposits

726,556

846,496

726,556

846,496

   Customer repurchase agreements

37,314

43,503

37,314

43,503

   Advances FHLB/Long-term borrowings

127,408

148,869

127,408

148,869

   Shareholders' equity 

233,436

218,685

233,436

218,685

Average Balances

   Investment securities

735,101

887,971

767,828

884,415

   Loans held for sale

44,690

28,344

37,711

25,881

   Loans held in portfolio, 

      net of unearned discount

1,588,251

1,425,685

1,492,667

1,319,054

   Interest bearing deposits with other banks

56,700

66,961

56,586

53,070

   Total earning assets

2,432,475

2,417,675

2,362,995

2,291,282

   Total assets

2,603,326

2,596,845

2,532,531

2,464,512

   Demand deposits

755,447

582,042

760,503

558,059

   Savings, NOW and money market deposits

657,421

618,840

642,219

590,722

   Time deposits

692,399

798,705

630,789

708,919

   Customer repurchase agreements

36,307

40,340

39,399

42,096

   Advances FHLB/Long-term borrowings

133,081

153,556

143,064

157,590

   Shareholders' equity  

229,312

219,470

225,524

226,873

ASSET QUALITY HIGHLIGHTS 

Period End

   Net charge-offs

$866

$1,968

$5,447

$7,666

   Nonaccrual loans

5,437

5,627

5,437

5,627

   Other real estate owned

1,595

1,929

1,595

1,929

   Nonperforming assets

7,032

7,556

7,032

7,556

   Nonaccrual loans/loans (1)

0.32%

0.38%

0.32%

0.38%

   Nonperforming assets/assets

0.26%

0.28%

0.26%

0.28%

   Allowance for loan losses/loans (2)

1.36%

1.34%

1.36%

1.34%

   Allowance for loan losses/nonaccrual loans

407.47%

347.38%

407.47%

347.38%

CAPITAL RATIOS

Period End

   Tier 1 risk based

11.69%

12.13%

11.69%

12.13%

   Total risk based

12.82%

13.16%

12.82%

13.16%

   Leverage

9.38%

9.08%

9.38%

9.08%

   Equity/ assets

8.65%

8.23%

8.65%

8.23%

   Tangible common equity

7.84%

7.43%

7.84%

7.43%

   Book value per common share

$7.54

$7.07

$7.54

$7.07

Return on average equity

9.27%

7.90%

8.78%

7.22%

Return on average tangible equity

10.32%

8.82%

9.78%

8.04%

(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 15

STERLING BANCORP

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands, except number of shares)

September 30, 

2012

2011

ASSETS

Cash and due from banks

$

33,872

$

32,418

Interest-bearing deposits with other banks

149,592

186,632

Investment securities

    Available for sale (at estimated fair value)

310,022

346,508

    Held to maturity (at amortized cost)

389,779

453,725

            Total investment securities

699,801

800,233

Loans held for sale

51,551

22,874

Loans held in portfolio, net of unearned discounts

1,625,415

1,463,171

Less allowance for loan losses

22,154

19,547

            Loans held in portfolio, net

1,603,261

1,443,624

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

7,478

8,502

Customers' liability under acceptances

33

122

Goodwill

22,901

22,901

Premises and equipment, net

23,154

24,163

Other real estate

1,595

1,929

Accrued interest receivable

8,474

8,779

Cash surrender value of  life insurance policies

54,144

53,000

Other assets

43,869

51,798

$

2,699,725

$

2,656,975

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits

    Demand

$

831,281

$

594,250

    Savings, NOW and money market

667,517

607,049

    Time

726,556

846,496

            Total deposits

2,225,354

2,047,795

Securities sold under agreements to repurchase - customers

37,314

43,503

Securities sold under agreements to repurchase - dealers

-

5,000

Short-term borrowings - other

12,545

17,726

Advances - FHLB

101,634

123,095

Long-term borrowings - subordinated debentures

25,774

25,774

Acceptances outstanding

33

122

Accrued interest payable

701

1,081

Due to factored clients

-

94,141

Accrued expenses and other liabilities

62,934

80,053

            Total liabilities

2,466,289

2,438,290

Shareholders' equity

233,436

218,685

$

2,699,725

$

2,656,975

MEMORANDA

    Available for sale securities - amortized cost

$

304,687

$

349,996

    Held to maturity securities - estimated fair value

408,472

468,614

    Shares outstanding

        Common issued

35,263,768

35,225,110

        Common in treasury

4,307,972

4,300,278

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

Page 7 of 15

 

STERLING BANCORP

Consolidated Statements of Income

(Unaudited)

(dollars in thousands, except per share data)

Three Months Ended September 30, 

Nine Months Ended September 30, 

2012

2011

2012

2011

INTEREST INCOME

Loans

$

21,494

$

19,721

$

61,224

$

55,006

Investment securities - available for sale

2,206

2,742

7,226

8,120

Investment securities - held to maturity

2,710

3,351

8,584

10,230

FRB and FHLB stock

67

75

282

241

Deposits with other banks

33

35

97

92

            Total interest income

26,510

25,924

77,413

73,689

INTEREST EXPENSE

Savings, NOW and money market deposits

629

752

1,931

2,152

Time deposits

1,053

1,470

3,128

4,212

Securities sold u/a/r - customers

33

45

107

145

Securities sold u/a/r - dealers

-

16

31

49

Short-term borrowings - other

23

18

51

50

Advances - FHLB

457

483

1,494

1,647

Long-term subordinated debentures

523

523

1,570

1,570

            Total interest expense

2,718

3,307

8,312

9,825

Net interest income

23,792

22,617

69,101

63,864

Provision for loan losses

2,000

3,000

7,750

9,000

Net interest income after provision for loan losses

21,792

19,617

61,351

54,864

NONINTEREST INCOME

Accounts receivable management/

    factoring commissions and other fees

5,251

5,974

15,184

16,811

Service charges on deposit accounts

1,444

1,445

4,472

4,248

Trade finance income

495

607

1,462

1,735

Other customer related service charges and fees

210

287

715

708

Mortgage banking income

2,569

1,493

7,298

5,268

Income from life insurance policies

247

288

1,039

860

Securities gains

282

605

1,490

2,234

Loss on sale of OREO

(9)

(5)

(75)

-

Other income

25

20

51

259

            Total noninterest income

10,514

10,714

31,636

32,123

NONINTEREST EXPENSES

Salaries

11,401

11,037

33,756

32,708

Employee benefits

3,627

3,396

11,078

10,450

    Total personnel expense

15,028

14,433

44,834

43,158

Occupancy and equipment expenses, net

3,429

3,069

10,045

9,857

Advertising and marketing

774

781

2,192

2,079

Professional fees

1,083

1,741

3,494

3,448

Communications

576

430

1,508

1,314

Deposit insurance

544

374

1,668

2,204

Other expenses

3,050

2,942

7,774

7,609

            Total noninterest expenses

24,484

23,770

71,515

69,669

Income before income taxes

7,822

6,561

21,472

17,318

Provision for income taxes 

2,481

2,191

6,656

5,060

Net income

5,341

4,370

14,816

12,258

Dividends on preferred shares and accretion

-

-

-

2,074

Net income available to 

    common shareholders

$

5,341

$

4,370

$

14,816

$

10,184

Page 8 of 15

 

STERLING BANCORP

Consolidated Statements of Income

(Unaudited)

(dollars in thousands, except per share data)

(continued)

Three Months Ended September 30, 

Nine Months Ended September 30, 

2012

2011

2012

2011

Average number of common shares outstanding

        Basic

30,844,341

30,789,539

30,818,531

29,375,816

        Diluted

30,844,341

30,789,539

30,818,531

29,375,816

Net income available to common 

    shareholders per average      common share

        Basic

$

0.17

$

0.14

$

0.48

$

0.35

        Diluted

0.17

0.14

0.48

0.35

Dividends per common share

0.09

0.09

0.27

0.27

Page 9 of 15

 

STERLING BANCORP

Consolidated Statements of Comprehensive Income 

(Unaudited)      

(dollars in thousands)

Three Months Ended September 30, 

Nine Months Ended September 30, 

2012

2011

2012

2011

Net income

$

5,341

$

4,370

$

14,816

$

12,258

Other comprehensive income, net of tax:

    Unrealized holding gains  

      (losses) on securities

       arising during the period

2,392

(2,465)

4,739

(873)

    Reclassification adjustment 

     for securities gains included

      in net income

(156)

(330)

(827)

(1,220)

    Amortization of:

        Prior service cost

4

9

16

26

        Net actuarial losses

627

487

1,644

1,266

Comprehensive income

$

8,208

$

2,071

$

20,388

$

11,457

STERLING BANCORP

Consolidated Statements of Changes in Shareholders' Equity

(Unaudited)

(dollars in thousands)

Three Months Ended September 30, 

Nine Months Ended September 30, 

2012

2011

2012

2011

Balance, at beginning of period

$

227,551

$

219,256

$

220,821

$

222,742

Net income for period

5,341

4,370

14,816

12,258

Common shares issued

-

-

-

36,454

Issuance of common shares for acquisitions

375

-

375

-

Stock option and restricted stock 

   compensation expense

86

141

275

287

Preferred shares redeemed in connection with

    the TARP Capital Purchase Program

-

-

-

(42,000)

Repurchase of warrant

-

-

-

(945)

Cash dividends - common shares

(2,784)

(2,783)

(8,348)

(8,341)

Cash dividends - preferred shares

-

-

-

(945)

Surrender of shares issued under

    incentive compensation plan

-

-

(75)

(24)

Unrealized holding gains (losses) on

    securities arising during the period

2,392

(2,465)

4,739

(873)

Reclassification adjustment for securities

    gains included in net income

(156)

(330)

(827)

(1,220)

Amortization of:

    Prior service cost

4

9

16

26

    Net actuarial losses

627

487

1,644

1,266

Balance, at end of period

$

233,436

$

218,685

$

233,436

$

218,685

Page 10 of 15

 STERLING BANCORP

 Average Balance Sheets [1]

 (Unaudited)

 (dollars in thousands)

Three Months Ended

September 30, 2012

September 30, 2011

AVERAGE

AVERAGE

AVERAGE

AVERAGE

BALANCE

INTEREST

RATE

BALANCE

INTEREST

RATE

Assets

  Interest-bearing deposits with other banks

$

56,700

$

33

0.23

%

$

66,961

$

35

0.21

%

  Investment Securities

    Available for sale - taxable

338,556

2,037

2.40

391,920

2,509

2.56

    Held to maturity - taxable

243,021

1,319

2.17

337,634

1,978

2.34

    Tax-exempt [2]

153,524

2,400

6.25

158,417

2,471

6.24

      Total investment securities

735,101

5,756

3.13

887,971

6,958

3.13

  FRB and FHLB stock  [2]

7,733

67

3.48

8,714

75

3.44

  Loans, net of unearned discount  [3]

1,632,941

21,494

5.26

1,454,029

19,721

5.54

Total Interest-Earning Assets [2]

2,432,475

27,350

4.47

%

2,417,675

26,789

4.47

%

  Cash and due from banks

37,218

38,558

  Allowance for loan losses

(22,796)

(19,798)

  Goodwill

22,901

22,901

  Other

133,528

137,509

Total Assets

$

2,603,326

$

2,596,845

Liabilities and Shareholders' Equity

  Interest-bearing deposits

    Domestic

      Savings

$

22,554

1

0.01

%

$

17,497

2

0.05

%

      NOW

217,675

55

0.10

223,566

117

0.21

      Money market

417,192

573

0.55

377,777

633

0.67

      Time

692,399

1,053

0.61

798,705

1,470

0.73

Total Interest-Bearing Deposits

1,349,820

1,682

0.50

1,417,545

2,222

0.62

  Borrowings

    Securities sold u/a/r - customers

36,307

33

0.37

40,340

45

0.44

    Securities sold u/a/r - dealers

-

-

-

5,002

16

1.30

    Federal funds purchased

22,500

13

0.23

13,912

5

0.13

    Commercial paper

13,252

10

0.29

14,521

11

0.29

    Short-term borrowings - other

-

-

-

4,195

2

0.10

    Advances - FHLB

107,307

457

1.69

127,782

483

1.50

    Long-term borrowings - sub debt

25,774

523

8.38

25,774

523

8.38

Total Borrowings

205,140

1,036

2.02

231,526

1,085

1.87

Total Interest-Bearing Liabilities

1,554,960

2,718

0.70

%

1,649,071

3,307

0.80

%

Noninterest-bearing demand deposits

755,447

582,042

  Total including noninterest-bearing

   demand deposits

2,310,407

2,718

0.48

%

2,231,113

3,307

0.59

%

Other liabilities

63,607

146,262

Total Liabilities

2,374,014

2,377,375

Shareholders' equity

229,312

219,470

Total Liabilities and Shareholders' Equity

$

2,603,326

$

2,596,845

Net interest income/spread [2]

24,632

3.77

%

23,482

3.67

%

Net yield on interest-earning assets [2]

4.02

%

3.90

%

Less: Tax-equivalent adjustment

840

865

Net interest income

$

23,792

$

22,617

[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 15

 

 STERLING BANCORP

 Average Balance Sheets [1]

 (Unaudited)

 (dollars in thousands)

Nine Months Ended

September 30, 2012

September 30, 2011

AVERAGE

AVERAGE

AVERAGE

AVERAGE

BALANCE

INTEREST

RATE

BALANCE

INTEREST

RATE

Assets

  Interest-bearing deposits with other banks

$

56,586

$

97

0.23

%

$

53,070

$

92

0.23

%

  Investment Securities

    Available for sale - taxable

354,492

6,673

2.51

393,561

7,255

2.46

    Held to maturity - taxable

257,642

4,393

2.27

333,710

6,335

2.53

    Tax-exempt [2]

155,694

7,298

6.25

157,144

7,323

6.21

      Total investment securities

767,828

18,364

3.19

884,415

20,913

3.15

  FRB and FHLB stock  [2]

8,203

284

4.61

8,862

243

3.66

  Loans, net of unearned discount  [3]

1,530,378

61,224

5.52

1,344,935

55,006

5.72

Total Interest-Earning Assets [2]

2,362,995

79,969

4.61

%

2,291,282

76,254

4.55

%

  Cash and due from banks

37,157

37,998

  Allowance for loan losses

(22,022)

(19,648)

  Goodwill

22,901

22,901

  Other

131,500

131,979

Total Assets

$

2,532,531

$

2,464,512

Liabilities and Shareholders' Equity

  Interest-bearing deposits

    Domestic

      Savings

$

20,784

3

0.02

%

$

18,450

7

0.05

%

      NOW

217,280

198

0.12

212,857

289

0.18

      Money market

404,155

1,730

0.57

359,415

1,856

0.69

      Time

630,789

3,128

0.66

708,919

4,212