Exhibit

EX-99.1 2 stlexhibit991033118.htm EXHIBIT 99.1 Exhibit



FOR IMMEDIATE RELEASE	STERLING BANCORP CONTACT:
April 24, 2018	Luis Massiani, SEVP & Chief Financial Officer
	845.369.8040
	http://www.sterlingbancorp.com

Sterling Bancorp announces record results for the first quarter of 2018 with earnings per share available to common stockholders of $0.43 (as reported) and $0.45 (as adjusted), representing growth of 48.3% and 45.2% over the same quarter a year ago.

Key Performance Highlights for the Three Months ended March 31, 2018 vs. March 31, 2017



($ in thousands except per share amounts)	GAAP / As Reported								Non-GAAP / As Adjusted¹
	3/31/2017			3/31/2018			Change % / bps		3/31/2017			3/31/2018			Change % / bps
Total revenue²	$	121,626		$	253,077		108.1	%	$	125,751		$	262,568		108.8	%
Net income available to common	39,067			96,873			148.0		41,461			100,880			143.3
Diluted EPS available to common	0.29			0.43			48.3		0.31			0.45			45.2
Net interest margin³	3.42		%	3.54		%	12		3.55		%	3.60		%	5
Return on average tangible common equity	14.31			16.55			224		15.19			17.24			205
Return on average tangible assets	1.20			1.39			19		1.27			1.45			18
Operating efficiency ratio⁴	49.6			44.2			(540	)	43.7			40.3			(340	)


▪	Record net income available to common stockholders of $96.9 million (as reported) and $100.9 million (as adjusted).


▪	Reported diluted earnings per share available to common stockholders of $0.43; growth of 48.3% over prior year.


▪	Adjusted diluted earnings per share available to common stockholders of $0.45; growth of 45.2% over prior year.


▪	Total portfolio loans, gross were $19.9 billion and total deposits were $20.6 billion at March 31, 2018.


▪	Completed acquisition of Advantage Funding Management Co., Inc. in April 2018, including $457.0 million loan portfolio.


▪	Tangible book value per common share¹ of $10.68 at March 31, 2018; growth of 28.4% over the prior year.

Key Performance Highlights for the Three Months ended March 31, 2018 vs. December 31, 2017



($ in thousands except per share amounts)	GAAP / As Reported								Non-GAAP / As Adjusted¹
	12/31/2017			3/31/2018			Change % / bps		12/31/2017			3/31/2018			Change % / bps
Total revenue²	$	257,786		$	253,077		(1.8	)%	$	265,014		$	262,568		(0.9	)%
Net (loss) income available to common	(35,281		)	96,873			NM		87,171			100,880			15.7
Diluted EPS available to common	(0.16		)	0.43			NM		0.39			0.45			15.4
Net interest margin³	3.57		%	3.54		%	(3	)	3.67		%	3.60		%	(7	)
Return on average tangible common equity	(5.87		)	16.55			NM		14.49			17.24			275
Return on average tangible assets	(0.51		)	1.39			NM		1.25			1.45			20
Operating efficiency ratio⁴	97.3			44.2			(5,310	)	41.4			40.3			(110	)

^{NM - represents not meaningful given the Company reported a net loss in fourth quarter of 2017.}


▪	Growth in adjusted diluted earnings per share available to common stockholders of 15.4% over the linked quarter.


▪	Integration of Astoria Financial Corporation is on-track; adjusted operating efficiency ratio at record low of 40.3%.


▪	Growth in average commercial loan balances of $320.1 million over the linked quarter.


▪	Real estate consolidation strategy is underway; consolidated one financial center in the first quarter and announced sale of Lake Success headquarters; six financial centers anticipated to close in the second quarter of 2018.

1. Non-GAAP / as adjusted measures are defined in the non-GAAP tables beginning on page 17.

2. Total revenue is equal to net interest income plus non-interest income. Total revenue as adjusted is equal to tax equivalent net interest income plus non-interest income excluding securities gains and losses.

3. Net interest margin is equal to net interest income divided by average interest earning assets. Net interest margin as adjusted, or tax equivalent net interest margin, is equal to net interest income plus the tax equivalent adjustment for tax exempt securities divided by average interest earning assets.

4. See page 18 and 19 for an explanation of the operating efficiency ratio.

MONTEBELLO, N.Y. – April 24, 2018 – Sterling Bancorp (NYSE: STL) (the “Company”), the parent company of Sterling National Bank (the “Bank”), today announced results for the three months ended March 31, 2018. Net income available to common stockholders for the quarter ended March 31, 2018 was $96.9 million, or $0.43 per diluted share, compared to net loss available to common stockholders of $35.3 million, or $0.16 per diluted share, for the linked quarter ended December 31, 2017, and net income available to common stockholders of $39.1 million, or $0.29 per diluted share, for the three months ended March 31, 2017.

Results for the first quarter of 2018 were impacted by a loss on sale of securities of $5.4 million as the Company continued its earning asset repositioning strategy and generated liquidity for the acquisition of Advantage Funding Management Co., Inc. (“Advantage Funding”), which closed on April 2, 2018. Please refer to the section below “Reconciliation of GAAP Results to Adjusted Results (non-GAAP)” for additional information.

President’s Comments

Jack Kopnisky, President and Chief Executive Officer, commented: “We had strong performance in the first quarter of 2018 across all key metrics with record adjusted net income available to common stockholders of over $100.0 million and adjusted diluted earnings per share available to common stockholders of $0.45, which represents growth of 143.3% and 45.2%, respectively, over the first quarter of 2017. Our adjusted return on average tangible assets was 1.45% and our adjusted return on average tangible common equity was 17.24%. As of March 31, 2018, our total assets were $30.5 billion, gross portfolio loans were $19.9 billion and total deposits were $20.6 billion.

“The transition of our earning assets and balance sheet to a more optimal mix is well underway. The average balance of commercial loans increased by $320.1 million in the first quarter, while the average balance of residential mortgage loans decreased by $191.4 million. We will continue to replace lower yielding assets that we acquired in the merger with Astoria Financial Corporation (“Astoria”) with higher yielding, more diversified commercial loans that we originate through our teams or purchase in opportunistic situations, such as the acquisition of Advantage Funding. We anticipate this strategy will allow us to maintain and increase our tax equivalent net interest margin, which was 3.15% in the first quarter of 2018 excluding the impact of accretion income on acquired loans.

“We are ahead of plan on our acquisition of Astoria, and to date we have made significant progress on the integration of personnel, systems, facilities and all other areas of Astoria’s operations. Excluding the amortization of intangibles, operating expenses were $105.7 million in the first quarter, which represented a decrease of $3.9 million relative to the linked quarter and an annual run-rate of $428.7 million. Our adjusted operating efficiency ratio reached a record low of 40.3%. Comparing this quarter’s performance to the same quarter a year ago, our operating leverage ratio, which we define as growth in operating revenues divided by growth in operating expenses, was 2.7x. We still have much work to do to fully capture the benefits of our acquisition of Astoria, but we are confident in our ability to continue building a larger, more diversified and more profitable company.

“Our tangible common equity ratio was 8.38% and our estimated Tier 1 Leverage ratio was 9.39% at March 31, 2018; we have ample capital to support our strategy. Our tangible book value per common share was $10.68, which represented an increase of 28.4% over a year ago.

“We welcome all of our new colleagues that have joined upon the completion of the Advantage Funding acquisition. Advantage Funding is a leading provider of commercial vehicle and transportation financing services based in Lake Success, NY. Advantage Funding will be integrated into our equipment finance business, which when combined with our existing business, will have over $1.0 billion in loans and leases outstanding. We anticipate the acquisition should add approximately five basis points to tax equivalent net interest margin in 2018 and will accelerate the transition of our loan portfolio to a more diversified loan mix.

“We would like to thank our clients, colleagues and shareholders for your support and look forward to working with all of our partners as we continue to build a great company.

“Lastly, we have declared a dividend on our common stock of $0.07 per share payable on May 21, 2018 to holders of record as of May 7, 2018.”

Reconciliation of GAAP Results to Adjusted Results (non-GAAP)

The Company’s GAAP net income available to common stockholders of $96.9 million, or $0.43 per diluted share, for the first quarter of 2018, included the following items:


▪	a pre-tax net loss on sale of securities of $5.4 million; and


▪	the pre-tax amortization of non-compete agreements and acquired customer list intangible assets of $295 thousand.

Excluding the impact of these items, adjusted net income available to common stockholders was $100.9 million, or $0.45 per diluted share, for the three months ended March 31, 2018.

Non-GAAP financial measures include references to the terms “adjusted” or “excluding”. See the reconciliation of the Company’s non-GAAP financial measures beginning on page 17.

Net Interest Income and Margin



($ in thousands)	For the three months ended									Change % / bps
	3/31/2017			12/31/2017			3/31/2018			Y-o-Y		Linked Qtr
Interest and dividend income	$	126,000		$	276,495		$	281,346		123.3	%	1.8	%
Interest expense	17,210			42,471			46,976			173.0		10.6
Net interest income	$	108,790		$	234,024		$	234,370		115.4		0.1

Accretion income on acquired loans	$	3,482		$	33,726		$	30,340		771.3	%	(10.0	)%
Yield on loans	4.57		%	4.77		%	4.85		%	28		8
Tax equivalent yield on investment securities	2.97			3.03			2.85			(12	)	(18	)
Tax equivalent yield on interest earning assets	4.09			4.32			4.31			22		(1	)
Cost of total deposits	0.38			0.43			0.47			9		4
Cost of interest bearing deposits	0.55			0.54			0.59			4		5
Cost of borrowings	1.74			1.94			2.01			27		7
Tax equivalent net interest margin⁵	3.55			3.67			3.60			5		(7	)

Average loans, including loans held for sale	$	9,281,516		$	19,518,485		$	19,635,900		111.6	%	0.6	%
Average investment securities	3,273,658			5,926,824			6,602,175			101.7		11.4
Average total interest earning assets	12,889,578			26,043,748			26,833,922			108.2		3.0
Average deposits and mortgage escrow	10,186,615			20,483,857			20,688,147			103.1		1.0

⁵ Tax equivalent net interest margin is equal to net interest income plus the tax equivalent adjustment for tax exempt securities divided by average interest earning assets. The tax equivalent adjustment is assumed at a 35% federal tax rate in 2017 and 21% in 2018.

First quarter 2018 compared with first quarter 2017

Net interest income was $234.4 million, an increase of $125.6 million compared to the first quarter of 2017. This was mainly due to an increase in average loans outstanding between the periods as a result of the merger with Astoria (the “Astoria Merger”) and loans originated through our commercial banking teams. Other key components of the changes in net interest income and net interest margin were the following:


▪	The yield on loans was 4.85% compared to 4.57% for the three months ended March 31, 2017. The increase in yield on loans was mainly due to an increase in accretion income on acquired loans, which was $30.3 million in the first quarter of 2018 compared to $3.5 million in the first quarter of 2017.


▪	Average commercial loans were $14.3 billion compared to $8.3 billion in the first quarter of 2017, an increase of $6.0 billion or 72.3%.

▪

The tax equivalent yield on investment securities decreased 12 basis points to 2.85%. This was mainly due to the change in the federal income tax rate as the tax equivalent adjustment assumed a 35% federal tax rate in 2017 compared to a 21% federal tax rate in 2018, resulting from the Tax Cuts and Jobs Act of 2017. Average tax exempt securities balances grew to $2.6 billion for the quarter ended March 31, 2018, compared to $1.3 billion in the first quarter of 2017. Average investment securities were $6.6 billion, or 24.6%, of average earning assets for the first quarter of 2018 compared to $3.3 billion, or 25.4%, of average earning assets for the first quarter of 2017.


▪	The tax equivalent yield on interest earning assets increased 22 basis points between the periods to 4.31%, mainly due to higher accretion income on acquired loans, as described above.


▪	The cost of total deposits was 47 basis points and the cost of borrowings was 2.01%, compared to 38 basis points and 1.74%, respectively, for the same period a year ago.


▪	The total cost of interest bearing liabilities increased 10 basis points to 0.89% for the first quarter of 2018 compared to 0.79% for first quarter of 2017. This increase was mainly due to an increase in market interest rates, which increased the cost of wholesale, brokered and certificates of deposit between the periods.

The tax equivalent net interest margin was 3.60% for the first quarter of 2018 compared to 3.55% for the first quarter of 2017. The increase in tax equivalent net interest margin was mainly due to the increase in accretion income on acquired loans. Excluding accretion income, tax equivalent net interest margin was 3.15% for the first quarter of 2018 compared to 3.44% in the first quarter of 2017. The decline in tax equivalent net interest margin excluding accretion income is mainly due to multi-family and residential mortgage loans acquired in the Astoria Merger, which generally have lower yields than the Company’s other loan assets, and to the change in tax equivalent adjustment rate due to the decrease in the federal income tax rate.

First quarter 2018 compared with linked quarter ended December 31, 2017

Net interest income increased $346 thousand compared to the linked quarter ended December 31, 2017. The increase in net interest income was mainly due to higher average balances of commercial loans and investment securities outstanding, which was substantially offset by a $3.4 million decline in accretion income on acquired loans and two fewer days in first quarter of 2018. Key components of the changes in net interest income in the linked quarter were the following:


▪	The yield on loans was 4.85% compared to 4.77% for the linked quarter, an increase of eight basis points, which was mainly due to the increase in market rates of interest. Accretion income on acquired loans was $30.3 million in the first quarter of 2018 compared to $33.7 million in the linked quarter.


▪	The average balance of portfolio loans increased $117.4 million and the average balance of commercial loans increased $320.1 million compared to the linked quarter.


▪	The tax equivalent yield on investment securities decreased 18 basis points to 2.85% in the first quarter of 2018, which was due to the change in the federal income tax rate. The average balance of investment securities increased $675.4 million compared to the linked quarter.


▪	The tax equivalent yield on interest earning assets decreased one basis point in the first quarter of 2018 to 4.31% compared to 4.32% in the linked quarter. This was mainly due to $3.4 million of lower accretion income on acquired loans, and a $3.1 million decrease in the tax equivalent adjustment due to the change in the tax rates.


▪	The cost of total deposits increased four basis points to 47 basis points in the quarter. The total cost of borrowings increased to 2.01% compared to 1.94% in the linked quarter.


▪	Average interest bearing deposits increased by $276.4 million and average borrowings increased $476.3 million relative to the linked quarter. Total interest expense increased by $4.5 million over the linked quarter.

The tax equivalent net interest margin was 3.60% compared to 3.67% in the linked quarter. Excluding accretion income on acquired loans, tax equivalent net interest margin was 3.16% in the linked quarter compared to 3.15% in the first quarter of 2018. The decline in tax equivalent net interest margin excluding accretion income between the current quarter and the linked quarter was mainly due to the change in the federal income tax rate. The composition of the Company’s earning assets continued to shift in the first quarter of 2018, as the average balance of residential mortgage loans decreased by $191.4 million and represented 24.5% of total portfolio loans compared to 25.3% at December 31, 2017. We anticipate that over time we will continue to replace the run-off of residential mortgages and other loans acquired in the Astoria Merger with higher yielding commercial loans.

Non-interest Income



($ in thousands)	For the three months ended									Change %
	3/31/2017			12/31/2017			3/31/2018			Y-o-Y		Linked Qtr
Total non-interest income	$	12,836		$	23,762		$	18,707		45.7	%	(21.3	)%
Net (loss) on sale of securities	(23		)	(70		)	(5,421		)	NM		NM
Adjusted non-interest income	$	12,859		$	23,832		$	24,128		87.6		1.2

First quarter 2018 compared with first quarter 2017

Excluding net (loss) on sale of securities, adjusted non-interest income increased $11.3 million in the first quarter of 2018 to $24.1 million compared to $12.9 million in the same quarter last year. The change was mainly due to the Astoria Merger as deposit fees and service charges increased by $3.7 million; bank owned life insurance income increased by $2.2 million; investment management fees increased by $1.6 million; and safe deposit box rental income increased $602 thousand, which is included in other non-interest income. In addition, fee income generated on payroll finance loans increased $1.2 million (which represents the majority of the increase in accounts receivable management / factoring commissions and other related fees) and other loan fees including letters of credit and loan swaps increased $433 thousand over the year ago period.

First quarter 2018 compared with linked quarter ended December 31, 2017

Excluding net (loss) on sale of securities, adjusted non-interest income increased approximately $296 thousand from $23.8 million in the linked quarter to $24.1 million in the first quarter of 2018. Increases in accounts receivables commissions / factoring commissions and other related fees and other commissions and loan fees were substantially offset by decreases in deposit fees and service charges and wealth management fees.

Non-interest Expense



($ in thousands)	For the three months ended									Change % / bps
	3/31/2017			12/31/2017			3/31/2018			Y-o-Y		Linked Qtr
Compensation and benefits⁷	$	31,187		$	56,086		$	54,680		75.3	%	(2.5	)%
Stock-based compensation plans	1,736			2,508			2,854			64.4		13.8
Occupancy and office operations	8,134			18,100			17,460			114.7		(3.5	)
Information technology	2,469			11,984			11,718			374.6		(2.2	)
Amortization of intangible assets	2,229			6,426			6,052			171.5		(5.8	)
FDIC insurance and regulatory assessments	1,888			5,737			5,347			183.2		(6.8	)
Other real estate owned, net (“OREO”)	1,676			742			364			(78.3	)	(50.9	)
Merger-related expenses	3,127			30,230			—			NM		NM
Charge for asset write-downs, systems integration, retention and severance	—			104,506			—			NM		NM
Other expenses	7,904			14,427			13,274			67.9		(8.0	)
Total non-interest expense	$	60,350		$	250,746		$	111,749		85.2		(55.4	)
Full time equivalent employees (“FTEs”) at period end	978			2,076			2,016			106.1		(2.9	)
Financial centers at period end	42			128			127			202.4		(0.8	)
Operating efficiency ratio, as reported	49.6		%	97.3		%	44.2		%	540		5,310
Operating efficiency ratio, as adjusted⁶	43.7			41.4			40.3			340		110

⁶See a reconciliation of this non-GAAP financial measure beginning on page 17.

⁷ In the first quarter of 2018, the Company adopted a new retirement plan accounting standard. To conform to the current presentation, the Company reclassified $99 and $416 in the three months ended March 31, 2017 and December 31, 2017, respectively, from compensation and benefits expense to other non-interest expense. The adoption of this new standard did not impact the aggregate amount of total non-interest expense or net income.

First quarter 2018 compared with first quarter 2017

Total non-interest expense increased $51.4 million relative to the first quarter of 2017. Key components of the change in non-interest expense were the following:


▪	Compensation and benefits increased $23.5 million between the periods. Total FTEs increased to 2,016 from 978, which was mainly due to the Astoria Merger. In addition, we continued to execute our growth strategy and hired commercial bankers and risk management personnel.


▪	Occupancy and office operations increased $9.3 million mainly due to the financial centers and other locations acquired in the Astoria Merger.


▪	Information technology expense increased $9.2 million between the periods. The increase is mainly due to the Astoria Merger. We anticipate this expense will decrease upon completion of the full systems conversion.


▪	Amortization of intangible assets increased $3.8 million. The increase is mainly due to the amortization of the core deposit intangible asset that was recorded in the Astoria Merger.


▪	FDIC insurance and regulatory assessments increased $3.5 million to $5.3 million in the first quarter of 2018, compared to $1.9 million for the first quarter of 2017. This was mainly due to growth in our total assets.


▪	OREO expense declined $1.3 million to $364 thousand in the first quarter of 2018, compared to $1.7 million for the fourth quarter of 2017. This was mainly due to write-downs on the value of properties based on updated appraisals in the first quarter of 2017. In the first quarter of 2018, gain on sale of OREO was $472 thousand, which substantially offset OREO write-downs and maintenance expense.


▪	Other expenses increased $13.3 million mainly due to the Astoria Merger and included a $1.3 million increase in professional fees, $979 thousand increase in communications expense, $992 thousand increase in advertising and promotion expense and a $739 thousand increase in operational losses.

First quarter 2018 compared with linked quarter ended December 31, 2017

Total non-interest expense decreased $139.0 million from $250.7 million in the linked quarter to $111.7 million in the first quarter of 2018. Key components of the change in non-interest expense were the following:


▪	Compensation and benefits declined $1.4 million and was $54.7 million in the first quarter of 2018 compared to $56.1 million in the linked quarter. This was mainly due to the continued integration of Astoria’s operations, which has been partially offset by the hiring of additional relationship managers and risk management personnel.


▪	Occupancy and office operations declined $640 thousand mainly as we continue to execute our strategy of reducing our real estate footprint.


▪	OREO expense declined $378 thousand in the first quarter of 2018 compared to the linked quarter.


▪	There was no merger-related expense in the first quarter of 2018 compared to $30.2 million in the linked quarter.


▪	There were no charges for asset write-downs, systems integration, retention and severance in the first quarter of 2018 compared to $104.5 million in the linked quarter.


▪	Other expense decreased $1.2 million in the first quarter of 2018 and was $13.3 million compared to $14.4 million in the linked quarter.

Taxes

For the three months ended March 31, 2018, the Company earned pre-tax income of $128.3 million. We recorded income tax expense at an estimated effective tax rate of 23.25%. In addition, we recorded a tax benefit of $379 thousand as a discrete item related to stock-based compensation that vested in the first quarter of 2018. In the year ago period, we recorded income tax expense at 32.50% of pre-tax income, and recorded a tax benefit of $742 thousand as a discrete item related to stock-based compensation that vested in the first quarter of 2017. In the linked quarter, we incurred a pre-tax loss mainly due to charges incurred in connection with the Astoria Merger; however, we recorded income tax expense of $28.3 million which included a charge of $40.3 million to write-down our net deferred tax assets to their estimated value due to the enactment of the Tax Cuts and Jobs Act of 2017.

Key Balance Sheet Highlights as of March 31, 2018



($ in thousands)	As of									Change % / bps
	3/31/2017			12/31/2017			3/31/2018			Y-o-Y		Linked Qtr
Total assets	$	14,659,337		$	30,359,541		$	30,468,780		107.8	%	0.4	%
Total portfolio loans, gross	9,763,967			20,008,983			19,939,245			104.2		(0.3	)
Commercial & industrial (“C&I”) loans	4,181,818			5,306,821			5,341,548			27.7		0.7
Commercial real estate loans	4,376,645			8,998,419			9,099,606			107.9		1.1
Acquisition, development and construction loans	238,966			282,792			262,591			9.9		(7.1	)
Total commercial loans	8,797,429			14,588,032			14,703,745			67.1		0.8
Residential mortgage loans	695,398			5,054,732			4,883,452			602.3		(3.4	)
Total deposits	10,251,725			20,538,204			20,623,233			101.2		0.4
Core deposits ⁸	9,426,612			19,388,254			19,538,410			107.3		0.8
Investment securities	3,416,395			6,474,561			6,635,286			94.2		2.5
Total borrowings	2,328,576			4,991,210			4,927,594			111.6		(1.3	)
Loans to deposits	95.2		%	97.4		%	96.7		%	150		(70	)
Core deposits to total deposits	92.0			94.4			94.7			270		30
Investment securities to total assets	23.3			21.3			21.8			(150	)	50

⁸Given the Company’s greater proportion of certificates of deposit after completion of the Astoria Merger, the Company modified its definition of core deposits to also include certificates of deposit beginning in the first quarter of 2018. Core deposits include retail, commercial and municipal transaction, money market and savings accounts and certificates of deposit accounts and exclude brokered and wholesale deposits, except for reciprocal Certificate of Deposit Account Registry balances.

Highlights in balance sheet items as of March 31, 2018 were the following:

▪

C&I loans (which include traditional C&I, asset-based lending, payroll finance, warehouse lending, factored receivables, equipment financing and public sector finance loans) represented 26.8%, commercial real estate loans (which include multi-family loans) represented 45.6%, consumer and residential mortgage loans combined represented 26.3%, and acquisition, development and construction loans represented 1.3% of the total loan portfolio. Loan growth in the year-over-year period was mainly a result of the Astoria Merger and originations by our commercial banking teams. Linked quarter comparisons are discussed below.


▪	C&I loans grew $34.7 million in the first quarter of 2018 compared to the linked quarter. Excluding loans acquired in the Astoria Merger, C&I loans increased $1.1 billion in the past twelve months.


▪	Total commercial loans, which include all C&I loans, commercial real estate (including multi-family) and acquisition, development and construction loans, increased by $115.7 million in the linked quarter. Excluding loans acquired in the Astoria Merger, in the past twelve months commercial loans increased by $1.4 billion.


▪	Residential mortgage loans were $4.9 billion at March 31, 2018, compared to $5.1 billion at December 31, 2017. The decline was mainly due to repayments of loans acquired from Astoria.


▪	Aggregate exposure to taxi medallion relationships was $43.6 million, which represented 0.22% of total loans as of March 31, 2018, a decline of $2.4 million from $46.0 million as of December 31, 2017. The decline was mainly due to a charge-off of $2.1 million and repayments.


▪	Total deposits at March 31, 2018 increased $85.0 million compared to December 31, 2017, and increased $10.4 billion over March 31, 2017. We assumed $9.0 billion of deposits in the Astoria Merger. The remaining increase in deposits was mainly due to growth in commercial deposits and certificates of deposit.


▪	Core deposits at March 31, 2018 increased $150.2 million compared to December 31, 2017. Core deposits increased $10.1 billion over March 31, 2017.


▪	Municipal deposits at March 31, 2018 were $1.8 billion and increased by $190.4 million relative to the linked quarter. Municipal deposits typically experience seasonal inflows in the first quarter.


▪	Investment securities increased by $160.7 million relative to the linked quarter, and represented 21.8% of total assets at March 31, 2018.

Credit Quality



($ in thousands)	For the three months ended									Change % / bps
	3/31/2017			12/31/2017			3/31/2018			Y-o-Y		Linked Qtr
Provision for loan losses	$	4,500		$	12,000		$	13,000		188.9	%	8.3	%
Net charge-offs	1,183			6,221			8,815			645.1		41.7
Allowance for loan losses	66,939			77,907			82,092			22.6		5.4
Non-performing loans	72,924			187,213			182,046			149.6		(2.8	)
Annualized net charge-offs to average loans	0.05		%	0.13		%	0.18		%	13		5
Allowance for loan losses to total loans	0.69			0.39			0.41			(28	)	2
Allowance for loan losses to non-performing loans	91.8			41.6			45.1			(4,670	)	350

Provision for loan losses was $13.0 million for the first quarter of 2018 compared to $12.0 million in the linked quarter and $4.5 million in the same period a year ago. In the first quarter of 2018, provision for loan losses was $4.2 million in excess of net charge-offs of $8.8 million. Allowance coverage ratios were 0.41% of total loans and 45.1% of non-performing loans at March 31, 2018. Due to the Astoria Merger, a significant portion of the Company’s loan portfolio does not carry an allowance for loan losses, as the acquired loans are recorded at their estimated fair value on the acquisition date. Non-performing loans declined by $5.2 million to $182.0 million at March 31, 2018 compared to the linked quarter. The decline in non-performing loans was mainly due to net charge-offs and repayments, partially offset by loans that became non-performing during quarter.

Capital



($ in thousands, except share and per share data)	As of									Change % / bps
	3/31/2017			12/31/2017			3/31/2018			Y-o-Y		Three months
Total stockholders’ equity	$	1,888,613		$	4,240,178		$	4,273,755		126.3	%	0.8	%
Preferred stock	—			139,220			139,025			NM		NM
Goodwill and intangible assets	760,698			1,733,082			1,727,030			127.0		(0.3	)
Tangible common stockholders’ equity	$	1,127,915		$	2,367,876		$	2,407,700		113.5		1.7
Common shares outstanding	135,604,435			224,782,694			225,466,266			66.3		0.3
Book value per common share	$	13.93		$	18.24		$	18.34		31.7		0.5
Tangible book value per common share⁹	8.32			10.53			10.68			28.4		1.4
Tangible common equity to tangible assets ⁹	8.12		%	8.27		%	8.38		%	26		11
Estimated Tier 1 leverage ratio - Company	8.89			9.39			9.39			50		—
Estimated Tier 1 leverage ratio - Bank	8.99			10.10			10.01			102		(9	)

⁹See a reconciliation of non-GAAP as adjusted financial measures beginning on page 17.

The increase in total stockholders’ equity of $33.6 million to $4.3 billion as of March 31, 2018 compared to December 31, 2017 was mainly due to earnings. The increase from net income available to common stockholders of $96.9 million was partially offset by common dividends of $15.7 million, preferred dividends of $2.2 million and a decrease in the fair value of our available for sale investment securities of $52.9 million.

Total goodwill and other intangible assets were $1.7 billion at March 31, 2018, a decrease of $6.1 million compared to December 31, 2017, which was due to amortization of intangibles for the period.

For the quarter ended March 31, 2018, basic and diluted weighted average common shares outstanding increased to 224.7 million and 225.3 million, respectively, compared to 223.5 million and 224.1 million, respectively, for the quarter ended December 31, 2017. The increase in the diluted weighted average shares was mainly due to stock-based compensation granted in connection with our performance for 2017. Total common shares outstanding at March 31, 2018 were approximately 225.5 million.

Tangible book value per share was $10.68 at March 31, 2018, which represented an increase of 28.4% over a year ago and an increase of 1.4% over December 31, 2017.

Conference Call Information

Sterling Bancorp will host a teleconference and webcast on Wednesday, April 25, 2018 at 10:30 AM Eastern Time to discuss the Company’s results. Analysts, investors and interested parties are invited to listen to the webcast and view accompanying slides on the Company’s website at www.sterlingbancorp.com or by dialing (888) 394-8218, Conference ID #5834389. A replay of the teleconference can be accessed through the Company’s website.

About Sterling Bancorp

Sterling Bancorp, whose principal subsidiary is Sterling National Bank, specializes in the delivery of services and solutions to business owners, their families and consumers within the communities it serves through teams of dedicated and experienced relationship managers. Sterling National Bank offers a complete line of commercial, business, and consumer banking products and services. For more information, visit the Sterling Bancorp website at www.sterlingbancorp.com.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This release may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may concern Sterling Bancorp’s current expectations about its future results, plans, operations and prospects and involve certain risks, including the following: difficulties and delays in integrating Astoria’s business, Advantage Funding’s business, or fully realizing cost savings and other benefits; business disruption; a failure to grow revenues faster than we grow expenses, a deterioration in general economic conditions, either nationally, internationally, or in our market areas, including extended declines in the real estate market and constrained financial markets; inflation; the effects of, and changes in, trade; changes in asset quality and credit risk; introduction, withdrawal, success and timing of business initiatives; capital management activities; customer disintermediation; and the success of Sterling Bancorp in managing those risks. Other factors that could cause Sterling Bancorp’s actual results to differ from those indicated in forward-looking statements are included in the “Risk Factors” section of Sterling Bancorp’s filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2018. 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 Quarterly Report on Form 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)



	3/31/2017			12/31/2017			3/31/2018
Assets:
Cash and cash equivalents	$	253,703		$	479,906		$	364,331
Investment securities	3,416,395			6,474,561			6,635,286
Loans held for sale	2,559			5,246			44,440
Portfolio loans:
Commercial and industrial (“C&I”)	4,181,818			5,306,821			5,341,548
Commercial real estate (including multi-family)	4,376,645			8,998,419			9,099,606
Acquisition, development and construction	238,966			282,792			262,591
Residential mortgage	695,398			5,054,732			4,883,452
Consumer	271,140			366,219			352,048
Total portfolio loans, gross	9,763,967			20,008,983			19,939,245
Allowance for loan losses	(66,939		)	(77,907		)	(82,092		)
Total portfolio loans, net	9,697,028			19,931,076			19,857,153
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank Stock, at cost	148,030			284,112			354,832
Accrued interest receivable	48,974			94,098			102,129
Premises and equipment, net	57,567			321,722			318,267
Goodwill	696,600			1,579,891			1,579,891
Other intangibles	64,098			153,191			147,139
Bank owned life insurance	201,259			651,638			655,278
Other real estate owned	9,632			27,095			24,493
Other assets	63,492			357,005			385,541
Total assets	$	14,659,337		$	30,359,541		$	30,468,780
Liabilities:
Deposits	$	10,251,725		$	20,538,204		$	20,623,233
FHLB borrowings	2,035,000			4,510,123			4,449,829
Other borrowings	44,472			30,162			26,850
Senior notes	76,551			278,209			278,144
Subordinated notes	172,553			172,716			172,771
Mortgage escrow funds	13,153			122,641			161,724
Other liabilities	177,270			467,308			482,474
Total liabilities	12,770,724			26,119,363			26,195,025
Stockholders’ equity:
Preferred stock	—			139,220			139,025
Common stock	1,411			2,299			2,299
Additional paid-in capital	1,590,293			3,780,908			3,766,280
Treasury stock	(62,046		)	(58,039		)	(51,102		)
Retained earnings	382,676			401,956			496,297
Accumulated other comprehensive (loss)	(23,721		)	(26,166		)	(79,044		)
Total stockholders’ equity	1,888,613			4,240,178			4,273,755
Total liabilities and stockholders’ equity	$	14,659,337		$	30,359,541		$	30,468,780

Shares of common stock outstanding at period end	135,604,435			224,782,694			225,466,266
Book value per common share	$	13.93		$	18.24		$	18.34
Tangible book value per common share¹	8.32			10.53			10.68

¹ See reconciliation of non-GAAP financial measures beginning on page 17.

Sterling Bancorp and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share and per share data)



	For the Quarter Ended
	3/31/2017			12/31/2017			3/31/2018
Interest and dividend income:
Loans and loan fees	$	104,570		$	234,452		$	234,615
Securities taxable	12,282			24,743			27,061
Securities non-taxable	7,618			13,295			15,312
Other earning assets	1,530			4,005			4,358
Total interest and dividend income	126,000			276,495			281,346
Interest expense:
Deposits	9,508			22,305			24,206
Borrowings	7,702			20,166			22,770
Total interest expense	17,210			42,471			46,976
Net interest income	108,790			234,024			234,370
Provision for loan losses	4,500			12,000			13,000
Net interest income after provision for loan losses	104,290			222,024			221,370
Non-interest income:
Accounts receivable management / factoring commissions and other related fees	3,769			5,133			5,360
Deposit fees and service charges	3,335			7,236			7,003
Loan commissions and fees	2,987			2,995			3,406
Bank owned life insurance	1,370			3,474			3,614
Investment management fees	231			2,103			1,825
Net (loss) gain on sale of securities	(23		)	(70		)	(5,421		)
Other	1,167			2,891			2,920
Total non-interest income	12,836			23,762			18,707
Non-interest expense:
Compensation and benefits	31,187			56,086			54,680
Stock-based compensation plans	1,736			2,508			2,854
Occupancy and office operations	8,134			18,100			17,460
Information Technology	2,469			11,984			11,718
Amortization of intangible assets	2,229			6,426			6,052
FDIC insurance and regulatory assessments	1,888			5,737			5,347
Other real estate owned, net	1,676			742			364
Merger-related expenses	3,127			30,230			—
Charge for asset write-downs, systems integration, retention and severance	—			104,506			—
Other	7,904			14,427			13,274
Total non-interest expense	60,350			250,746			111,749
Income before income tax expense	56,776			(4,960		)	128,328
Income tax expense	17,709			28,319			29,456
Net income (loss)	39,067			(33,279		)	98,872
Preferred stock dividend	—			2,002			1,999
Net income (loss) available to common stockholders	$	39,067		$	(35,281	)	$	96,873
Weighted average common shares:
Basic	135,163,347			223,501,073			224,730,686
Diluted	135,811,721			224,055,991			225,264,147
Earnings per common share:
Basic earnings per share	$	0.29		$	(0.16	)	$	0.43
Diluted earnings per share	0.29			(0.16		)	0.43
Dividends declared per share	0.07			0.07			0.07

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	3/31/2017		6/30/2017		9/30/2017		12/31/2017		3/31/2018
Total assets	$	14,659,337	$	15,376,676	$	16,780,097	$	30,359,541	$	30,468,780
Tangible assets ¹	13,898,639		14,618,192		16,023,807		28,626,459		28,741,750
Securities available for sale	1,941,671		2,095,872		2,579,076		3,612,072		3,760,338
Securities held to maturity	1,474,724		1,456,304		1,936,574		2,862,489		2,874,948
Portfolio loans	9,763,967		10,232,317		10,493,535		20,008,983		19,939,245
Goodwill	696,600		696,600		696,600		1,579,891		1,579,891
Other intangibles	64,098		61,884		59,690		153,191		147,139
Deposits	10,251,725		10,502,710		11,043,438		20,538,204		20,623,233
Municipal deposits (included above)	1,391,221		1,297,244		1,751,012		1,585,076		1,775,472
Borrowings	2,328,576		2,661,838		3,453,783		4,991,210		4,927,594
Stockholders’ equity	1,888,613		1,931,383		1,971,480		4,240,178		4,273,755
Tangible common equity ¹	1,127,915		1,172,899		1,215,190		2,367,876		2,407,700
Quarterly Average Balances
Total assets	14,015,953		14,704,793		15,661,514		29,277,502		30,018,289
Tangible assets ¹	13,253,877		13,944,946		14,904,016		27,567,351		28,287,337
Loans, gross:
Commercial real estate (includes multi-family)	4,190,817		4,396,281		4,443,142		8,839,256		9,028,849
Acquisition, development and construction	237,451		251,404		229,242		246,141		267,638
Commercial and industrial:
Traditional commercial and industrial	1,410,354		1,497,005		1,631,436		1,911,450		1,933,323
Asset-based lending²	713,438		737,039		740,037		781,732		781,392
Payroll finance²	217,031		225,080		229,522		250,673		229,920
Warehouse lending²	379,978		430,312		607,994		564,593		495,133
Factored receivables²	184,859		181,499		191,749		224,966		217,865
Equipment financing²	595,751		660,404		687,254		677,271		689,493
Public sector finance²	370,253		441,456		476,525		480,800		653,344
Total commercial and industrial	3,871,664		4,172,795		4,564,517		4,891,485		5,000,470
Residential mortgage	700,934		697,441		686,820		5,168,622		4,977,191
Consumer	280,650		268,502		262,693		372,981		361,752
Loans, total³	9,281,516		9,786,423		10,186,414		19,518,485		19,635,900
Securities (taxable)	2,016,752		2,142,168		2,483,718		3,840,147		3,997,542
Securities (non-taxable)	1,256,906		1,292,367		1,432,358		2,086,677		2,604,633
Other interest earning assets	334,404		341,895		368,630		598,439		595,847
Total earning assets	12,889,578		13,562,853		14,471,120		26,043,748		26,833,922
Deposits:
Non-interest bearing demand	3,177,448		3,185,506		3,042,392		4,043,213		3,971,079
Interest bearing demand	1,950,332		1,973,498		2,298,645		3,862,461		3,941,749
Savings (including mortgage escrow funds)	797,386		816,092		825,620		2,871,885		2,917,624
Money market	3,681,962		3,725,257		3,889,780		7,324,196		7,393,335
Certificates of deposit	579,487		584,996		634,569		2,382,102		2,464,360
Total deposits and mortgage escrow	10,186,615		10,285,349		10,691,006		20,483,857		20,688,147
Borrowings	1,799,204		2,313,992		2,779,143		4,121,605		4,597,903
Stockholders’ equity	1,869,085		1,913,933		1,955,252		4,235,739		4,243,897
Tangible common equity ¹	1,107,009		1,154,086		1,197,754		2,386,245		2,373,794

¹ See a reconciliation of non-GAAP financial measure beginning on page 17.
²Asset-based lending, payroll finance, warehouse lending, factored receivables, equipment finance and public sector finance comprise our commercial finance loan portfolio.
³Includes loans held for sale, but excludes allowance for loan losses.

Sterling Bancorp and Subsidiaries

SELECTED FINANCIAL DATA AND PERFORMANCE RATIOS

(unaudited, in thousands, except share and per share data)



	As of and for the Quarter Ended
Per Common Share Data	3/31/2017			6/30/2017			9/30/2017			12/31/2017			3/31/2018
Basic earnings (loss) per share	$	0.29		$	0.31		$	0.33		$	(0.16	)	$	0.43
Diluted earnings (loss) per share	0.29			0.31			0.33			(0.16		)	0.43
Adjusted diluted earnings per share, non-GAAP ¹	0.31			0.33			0.35			0.39			0.45
Dividends declared per common share	0.07			0.07			0.07			0.07			0.07
Book value per share	13.93			14.24			14.52			18.24			18.34
Tangible book value per share¹	8.32			8.65			8.95			10.53			10.68
Shares of common stock o/s	135,604,435			135,658,226			135,807,544			224,782,694			225,466,266
Basic weighted average common shares o/s	135,163,347			135,317,866			135,346,791			223,501,073			224,730,686
Diluted weighted average common shares o/s	135,811,721			135,922,897			135,950,160			224,055,991			225,264,147
Performance Ratios (annualized)
Return on average assets	1.13		%	1.16		%	1.14		%	(0.48		)%	1.31		%
Return on average equity	8.48			8.89			9.10			(3.30		)	9.26
Return on average tangible assets	1.20			1.22			1.19			(0.51		)	1.39
Return on avg tangible common equity	14.31			14.74			14.86			(5.87		)	16.55
Return on average tangible assets, adjusted ¹	1.27			1.28			1.27			1.25			1.45
Return on avg tangible common equity, adjusted ¹	15.19			15.43			15.85			14.49			17.24
Operating efficiency ratio, as adjusted ¹	43.7			42.0			40.6			41.4			40.3
Analysis of Net Interest Income
Accretion income on acquired loans	$	3,482		$	2,888		$	3,397		$	33,726		$	30,340
Yield on loans	4.57		%	4.58		%	4.67		%	4.77		%	4.85		%
Yield on investment securities - tax equivalent ²	2.97			2.93			2.87			3.03			2.85
Yield on interest earning assets - tax equivalent ²	4.09			4.09			4.12			4.32			4.31
Cost of interest bearing deposits	0.55			0.62			0.69			0.54			0.59
Cost of total deposits	0.38			0.43			0.50			0.43			0.47
Cost of borrowings	1.74			1.75			1.75			1.94			2.01
Cost of interest bearing liabilities	0.79			0.89			0.97			0.82			0.89
Net interest rate spread - tax equivalent basis ²	3.30			3.20			3.15			3.50			3.42
Net interest margin - GAAP basis	3.42			3.35			3.29			3.57			3.54
Net interest margin - tax equivalent basis ²	3.55			3.47			3.42			3.67			3.60
Capital
Tier 1 leverage ratio - Company ³	8.89		%	8.72		%	8.42		%	9.39		%	9.39		%
Tier 1 leverage ratio - Bank only ³	8.99			8.89			8.49			10.10			10.01
Tier 1 risk-based capital ratio - Bank only ³	10.79			10.67			10.19			13.95			14.30
Total risk-based capital ratio - Bank only ³	12.95			12.76			12.16			15.21			15.59
Tangible equity to tangible assets - Company¹	8.12			8.02			7.58			8.27			8.38
Condensed Five Quarter Income Statement
Interest and dividend income	$	126,000		$	134,263		$	145,692		$	276,495		$	281,346
Interest expense	17,210			21,005			25,619			42,471			46,976
Net interest income	108,790			113,258			120,073			234,024			234,370
Provision for loan losses	4,500			4,500			5,000			12,000			13,000
Net interest income after provision for loan losses	104,290			108,758			115,073			222,024			221,370
Non-interest income	12,836			13,618			13,988			23,762			18,707
Non-interest expense	60,350			59,657			62,617			250,746			111,749
Income (loss) before income tax expense	56,776			62,719			66,444			(4,960		)	128,328
Income tax expense	17,709			20,319			21,592			28,319			29,456
Net income (loss)	$	39,067		$	42,400		$	44,852		$	(33,279	)	$	98,872

¹ See a reconciliation of non-GAAP financial measures beginning on page 17.
² Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable Federal tax rate of 35% in 2017 and 21% in 2018.
³Regulatory capital amounts and ratios are preliminary estimates pending filing of the Company’s and Bank’s regulatory reports.

Sterling Bancorp and Subsidiaries

ASSET QUALITY INFORMATION

(unaudited, in thousands, except share and per share data)



	As of and for the Quarter Ended
Allowance for Loan Losses Roll Forward	3/31/2017			6/30/2017			9/30/2017			12/31/2017			3/31/2018
Balance, beginning of period	$	63,622		$	66,939		$	70,151		$	72,128		$	77,907
Provision for loan losses	4,500			4,500			5,000			12,000			13,000
Loan charge-offs¹:
Traditional commercial & industrial	(687		)	(164		)	(68		)	(4,570		)	(3,572		)
Asset based lending	—			—			—			—			—
Payroll finance	—			—			(188		)	—			—
Factored receivables	(296		)	(12		)	(564		)	(110		)	(3		)
Equipment financing	(471		)	(610		)	(741		)	(1,343		)	(4,199		)
Commercial real estate	(83		)	(944		)	(1,345		)	(7		)	(1,353		)
Acquisition development & construction	—			(22		)	(5		)	—			—
Residential mortgage	(158		)	(120		)	(389		)	(193		)	(39		)
Consumer	(114		)	(417		)	(156		)	(408		)	(125		)
Total charge offs	(1,809		)	(2,289		)	(3,456		)	(6,631		)	(9,291		)
Recoveries of loans previously charged-off¹:
Traditional commercial & industrial	139			523			316			164			214
Asset-based lending	3			1			1			—			—
Payroll finance	—			—			1			5			22
Factored receivables	16			2			5			—			3
Equipment financing	140			146			45			56			72
Commercial real estate	2			98			17			46			16
Acquisition development & construction	136			133			—			—			—
Residential mortgage	149			10			—			2			15
Consumer	41			88			48			137			131
Total recoveries	626			1,001			433			410			476
Net loan charge-offs	(1,183		)	(1,288		)	(3,023		)	(6,221		)	(8,815		)
Balance, end of period	$	66,939		$	70,151		$	72,128		$	77,907		$	82,092
Asset Quality Data and Ratios
Non-performing loans (“NPLs”) non-accrual	$	72,136		$	70,416		$	69,060		$	186,357		$	181,745
NPLs still accruing	788			935			392			856			301
Total NPLs	72,924			71,351			69,452			187,213			182,046
Other real estate owned	9,632			10,198			11,697			27,095			24,493
Non-performing assets (“NPAs”)	$	82,556		$	81,549		$	81,149		$	214,308		$	206,539
Loans 30 to 89 days past due	$	15,611		$	15,070		$	21,491		$	53,533		$	59,818
Net charge-offs as a % of average loans (annualized)	0.05		%	0.05		%	0.12		%	0.13		%	0.18		%
NPLs as a % of total loans	0.75			0.70			0.66			0.94			0.91
NPAs as a % of total assets	0.56			0.53			0.48			0.71			0.68
Allowance for loan losses as a % of NPLs	91.8			98.3			103.9			41.6			45.1
Allowance for loan losses as a % of total loans	0.69			0.69			0.69			0.39			0.41
Special mention loans	$	110,832		$	102,996		$	117,984		$	136,558		$	101,904
Substandard loans	101,496			97,476			104,205			232,491			245,910
Doubtful loans	902			895			795			764			968

¹There were no charge-offs or recoveries on warehouse lending, public sector finance or multi-family loans during the periods presented.

Sterling Bancorp and Subsidiaries

QUARTERLY YIELD TABLE

(unaudited, in thousands, except share and per share data)



	For the Quarter Ended
	December 31, 2017								March 31, 2018
	Average balance			Interest			Yield/Rate		Average balance			Interest			Yield/Rate
	(Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans	$	4,891,485		$	60,452		4.90	%	$	5,000,470		$	60,873		4.94	%
Commercial real estate (includes multi-family)	8,839,256			102,789			4.61		9,028,849			103,281			4.64
Acquisition, development and construction	246,141			3,727			6.01		267,638			3,671			5.56
Commercial loans	13,976,882			166,968			4.74		14,296,957			167,825			4.76
Consumer loans	372,981			5,103			5.43		361,752			4,411			4.95
Residential mortgage loans	5,168,622			62,381			4.83		4,977,191			62,379			5.01
Total gross loans ¹	19,518,485			234,452			4.77		19,635,900			234,615			4.85
Securities taxable	3,840,147			24,743			2.56		3,997,542			27,061			2.75
Securities non-taxable	2,086,677			20,453			3.92		2,604,633			19,382			2.98
Interest earning deposits	361,825			873			0.96		305,270			828			1.10
FHLB and Federal Reserve Bank Stock	236,614			3,132			5.25		290,577			3,530			4.93
Total securities and other earning assets	6,525,263			49,201			2.99		7,198,022			50,801			2.86
Total interest earning assets	26,043,748			283,653			4.32		26,833,922			285,416			4.31
Non-interest earning assets	3,233,754								3,184,367
Total assets	$	29,277,502							$	30,018,289
Interest bearing liabilities:
Demand and savings ² deposits	$	6,734,346		$	5,904		0.35	%	$	6,859,373		$	7,173		0.42	%
Money market deposits	7,324,196			10,790			0.58		7,393,335			10,912			0.60
Certificates of deposit	2,382,102			5,611			0.93		2,464,360			6,121			1.01
Total interest bearing deposits	16,440,644			22,305			0.54		16,717,068			24,206			0.59
Senior notes	276,051			2,759			3.97		278,181			2,740			3.94
Other borrowings	3,672,874			15,055			1.63		4,146,987			17,678			1.73
Subordinated notes	172,680			2,352			5.45		172,735			2,352			5.45
Total borrowings	4,121,605			20,166			1.94		4,597,903			22,770			2.01
Total interest bearing liabilities	20,562,249			42,471			0.82		21,314,971			46,976			0.89
Non-interest bearing deposits	4,043,213								3,971,079
Other non-interest bearing liabilities	436,301								488,342
Total liabilities	25,041,763								25,774,392
Stockholders’ equity	4,235,739								4,243,897
Total liabilities and stockholders’ equity	$	29,277,502							$	30,018,289
Net interest rate spread ³							3.50	%							3.42	%
Net interest earning assets ⁴	$	5,481,499							$	5,518,951
Net interest margin - tax equivalent				241,182			3.67	%				238,440			3.60	%
Less tax equivalent adjustment				(7,158		)						(4,070		)
Net interest income				$	234,024							$	234,370
Ratio of interest earning assets to interest bearing liabilities	126.7		%						125.9		%

¹Average balances include loans held for sale and non-accrual loans. Interest includes prepayment fees and late charges.

² Includes club accounts and interest bearing mortgage escrow balances.

³ Net interest rate spread represents the difference between the tax equivalent yield on average interest earning assets and the cost of average interest bearing liabilities.

⁴ Net interest earning assets represents total interest earning assets less total interest bearing liabilities.

Sterling Bancorp and Subsidiaries

QUARTERLY YIELD TABLE

(unaudited, in thousands, except share and per share data)



	For the Quarter Ended
	March 31, 2017								March 31, 2018
	Average balance			Interest			Yield/Rate		Average balance			Interest			Yield/Rate
	(Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans	$	3,871,664		$	48,237		5.05	%	$	5,000,470		$	60,873		4.94	%
Commercial real estate (includes multi-family)	4,190,817			43,186			4.18		9,028,849			103,281			4.64
Acquisition, development and construction	237,451			3,125			5.34		267,638			3,671			5.56
Commercial loans	8,299,932			94,548			4.62		14,296,957			167,825			4.76
Consumer loans	280,650			3,132			4.53		361,752			4,411			4.95
Residential mortgage loans	700,934			6,890			3.93		4,977,191			62,379			5.01
Total gross loans ¹	9,281,516			104,570			4.57		19,635,900			234,615			4.85
Securities taxable	2,016,752			12,282			2.47		3,997,542			27,061			2.75
Securities non-taxable	1,256,906			11,720			3.73		2,604,633			19,382			2.98
Interest earning deposits	210,800			254			0.49		305,270			828			1.10
FHLB and Federal Reserve Bank stock	123,604			1,276			4.19		290,577			3,530			4.93
Total securities and other earning assets	3,608,062			25,532			2.87		7,198,022			50,801			2.86
Total interest earning assets	12,889,578			130,102			4.09		26,833,922			285,416			4.31
Non-interest earning assets	1,126,375								3,184,367
Total assets	$	14,015,953							$	30,018,289
Interest bearing liabilities:
Demand and savings ² deposits	$	2,747,718		$	3,186		0.47		$	6,859,373		$	7,173		0.42
Money market deposits	3,681,962			4,944			0.54		7,393,335			10,912			0.60
Certificates of deposit	579,487			1,378			0.96		2,464,360			6,121			1.01
Total interest bearing deposits	7,009,167			9,508			0.55		16,717,068			24,206			0.59
Senior notes	76,497			1,141			6.05		278,181			2,740			3.94
Other borrowings	1,550,183			4,212			1.10		4,146,987			17,678			1.73
Subordinated notes	172,524			2,349			5.45		172,735			2,352			5.45
Total borrowings	1,799,204			7,702			1.74		4,597,903			22,770			2.01
Total interest bearing liabilities	8,808,371			17,210			0.79		21,314,971			46,976			0.89
Non-interest bearing deposits	3,177,448								3,971,079
Other non-interest bearing liabilities	161,049								488,342
Total liabilities	12,146,868								25,774,392
Stockholders’ equity	1,869,085								4,243,897
Total liabilities and stockholders’ equity	$	14,015,953							$	30,018,289
Net interest rate spread ³							3.30	%							3.42	%
Net interest earning assets ⁴	$	4,081,207							$	5,518,951
Net interest margin - tax equivalent				112,892			3.55	%				238,440			3.60	%
Less tax equivalent adjustment				(4,102		)						(4,070		)
Net interest income				$	108,790							$	234,370
Ratio of interest earning assets to interest bearing liabilities	146.3		%						125.9		%

¹Average balances include loans held for sale and non-accrual loans. Interest includes prepayment fees and late charges.

² Includes club accounts and interest bearing mortgage escrow balances.

³ Net interest rate spread represents the difference between the tax equivalent yield on average interest earning assets and the cost of average interest bearing liabilities.

⁴ Net interest earning assets represents total interest earning assets less total interest bearing liabilities.

Sterling Bancorp and Subsidiaries

NON-GAAP FINANCIAL MEASURES

(unaudited, in thousands, except share and per share data)



The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 19.
	As of or for the Quarter Ended
	3/31/2017			6/30/2017			9/30/2017			12/31/2017			3/31/2018

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

Total assets	$	14,659,337		$	15,376,676		$	16,780,097		$	30,359,541		$	30,468,780
Goodwill and other intangibles	(760,698		)	(758,484		)	(756,290		)	(1,733,082		)	(1,727,030		)
Tangible assets	13,898,639			14,618,192			16,023,807			28,626,459			28,741,750
Stockholders’ equity	1,888,613			1,931,383			1,971,480			4,240,178			4,273,755
Preferred stock	—			—			—			(139,220		)	(139,025		)
Goodwill and other intangibles	(760,698		)	(758,484		)	(756,290		)	(1,733,082		)	(1,727,030		)
Tangible common stockholders’ equity	1,127,915			1,172,899			1,215,190			2,367,876			2,407,700
Common stock outstanding at period end	135,604,435			135,658,226			135,807,544			224,782,694			225,466,266
Common stockholders’ equity as a % of total assets	12.88		%	12.56		%	11.75		%	13.51		%	13.57		%
Book value per common share	$	13.93		$	14.24		$	14.52		$	18.24		$	18.34
Tangible common equity as a % of tangible assets	8.12		%	8.02		%	7.58		%	8.27		%	8.38		%
Tangible book value per common share	$	8.32		$	8.65		$	8.95		$	10.53		$	10.68

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

Average stockholders’ equity	$	1,869,085		$	1,913,933		$	1,955,252		$	4,235,739		$	4,243,897
Average preferred stock	—			—			—			(139,343		)	(139,151		)
Average goodwill and other intangibles	(762,076		)	(759,847		)	(757,498		)	(1,710,151		)	(1,730,952		)
Average tangible common stockholders’ equity	1,107,009			1,154,086			1,197,754			2,386,245			2,373,794
Net income (loss) available to common	39,067			42,400			44,852			(35,281		)	96,873
Net income (loss), if annualized	158,438			170,066			177,945			(139,974		)	392,874
Reported return on avg tangible common equity	14.31		%	14.74		%	14.86		%	(5.87		)%	16.55		%
Adjusted net income (see reconciliation on page 18)	$	41,461		$	44,393		$	47,865		$	87,171		$	100,880
Annualized adjusted net income	168,147			178,060			189,899			345,841			409,124
Adjusted return on average tangible common equity	15.19		%	15.43		%	15.85		%	14.49		%	17.24		%

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

Average assets	$	14,015,953		$	14,704,793		$	15,661,514		$	29,277,502		$	30,018,289
Average goodwill and other intangibles	(762,076		)	(759,847		)	(757,498		)	(1,710,151		)	(1,730,952		)
Average tangible assets	13,253,877			13,944,946			14,904,016			27,567,351			28,287,337
Net income (loss)	39,067			42,400			44,852			(35,281		)	96,873
Net income (loss), if annualized	158,438			170,066			177,945			(139,974		)	392,874
Reported return on average tangible assets	1.20		%	1.22		%	1.19		%	(0.51		)%	1.39		%
Adjusted net income (see reconciliation on page 18)	$	41,461		$	44,393		$	47,865		$	87,171		$	100,880
Annualized adjusted net income	168,147			178,060			189,899			345,841			409,124
Adjusted return on average tangible assets	1.27		%	1.28		%	1.27		%	1.25		%	1.45		%

Sterling Bancorp and Subsidiaries

NON-GAAP FINANCIAL MEASURES

(unaudited, in thousands, except share and per share data)



The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 19.
	As of and for the Quarter Ended
	3/31/2017			6/30/2017			9/30/2017			12/31/2017			3/31/2018
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio⁴:

Net interest income	$	108,790		$	113,258		$	120,073		$	234,024		$	234,370
Non-interest income	12,836			13,618			13,988			23,762			18,707
Total net revenue	121,626			126,876			134,061			257,786			253,077
Tax equivalent adjustment on securities	4,102			4,195			4,599			7,158			4,070
Net loss on sale of securities	23			230			21			70			5,421
Adjusted total net revenue	125,751			131,301			138,681			265,014			262,568
Non-interest expense	60,350			59,657			62,617			250,746			111,749
Merger-related expense	(3,127		)	(1,766		)	(4,109		)	(30,230		)	—
Charge for asset write-downs, systems integration, retention and severance	—			(603		)	—			(104,506		)	—
Amortization of intangible assets	(2,229		)	(2,187		)	(2,166		)	(6,426		)	(6,052		)
Adjusted non-interest expense	54,994			55,101			56,342			109,584			105,697
Reported operating efficiency ratio	49.6		%	47.0		%	46.7		%	97.3		%	44.2		%
Adjusted operating efficiency ratio	43.7			42.0			40.6			41.4			40.3

The following table shows the reconciliation of reported net income (GAAP) and adjusted net income available to common stockholders (non-GAAP) and adjusted diluted earnings per share⁵:

Income (loss) before income tax expense	$	56,776		$	62,719		$	66,444		$	(4,960	)	$	128,328
Income tax expense	17,709			20,319			21,592			28,319			29,456
Net income (loss) (GAAP)	39,067			42,400			44,852			(33,279		)	98,872
Adjustments:
Net loss on sale of securities	23			230			21			70			5,421
Merger-related expense	3,127			1,766			4,109			30,230			—
Charge for asset write-downs, systems integration, retention and severance	—			603			—			104,506			—
Amortization of non-compete agreements and acquired customer list intangible assets	396			354			333			333			295
Total pre-tax adjustments	3,546			2,953			4,463			135,139			5,716
Adjusted pre-tax income	60,322			65,672			70,907			130,179			134,044
Adjusted income tax expense	(18,861		)	(21,279		)	(23,042		)	(41,006		)	(31,165		)
Adjusted net income (non-GAAP)	41,461			44,393			47,865			89,173			102,879
Preferred stock dividend	—			—			—			2,002			1,999
Adjusted net income available to common stockholders (non-GAAP)	$	41,461		$	44,393		$	47,865		$	87,171		$	100,880

Weighted average diluted shares	135,811,721			135,922,897			135,950,160			224,055,991			225,264,147
Reported diluted EPS (GAAP)	$	0.29		$	0.31		$	0.33		$	(0.16	)	$	0.43
Adjusted diluted EPS (non-GAAP)	0.31			0.33			0.35			0.39			0.45

Sterling Bancorp and Subsidiaries

NON-GAAP FINANCIAL MEASURES

(unaudited, in thousands, except share and per share data)

The non-GAAP/as adjusted measures presented above are used by our management and the Company’s Board of Directors on a regular basis in addition to our GAAP results to facilitate the assessment of our financial performance and to assess our performance compared to our annual budget and strategic plans. These non-GAAP/adjusted financial measures complement our GAAP reporting and are presented above to provide investors, analysts, regulators and others information that we use to manage and evaluate our performance each period. This information supplements our GAAP reported results, and should not be viewed in isolation from, or as a substitute for, our GAAP results. When non-GAAP/adjusted measures are impacted by income tax expense, we present the pre-tax amount for the income and expense items that result in the non-GAAP adjustments and present the income tax expense impact at the effective tax rate in effect for the period presented.

¹ Stockholders’ equity as a percentage of total assets, book value per common share, tangible common equity as a percentage of tangible assets and tangible book common value per share provides information to help assess our capital position and financial strength. We believe tangible book measures improve comparability to other banking organizations that have not engaged in acquisitions that have resulted in the accumulation of goodwill and other intangible assets.

² Reported return on average tangible common equity and adjusted return on average tangible common equity measures provide information to evaluate the use of our tangible common equity.

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

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

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