Exhibit



FOR IMMEDIATE RELEASE	STERLING BANCORP CONTACT:
January 22, 2020	Emlen Harmon, SVP - Director of Investor Relations
	212.309.7646
	http://www.sterlingbancorp.com

Sterling Bancorp announces strong operating results for the fourth quarter of 2019 with diluted earnings per share available to common stockholders of $0.52 (as reported) and $0.54 (as adjusted). Highlights include continued progress in balance sheet transition, reduction in funding costs and increasing profitability.

Key Performance Highlights for the Twelve Months ended December 31, 2019 vs. December 31, 2018



($ in thousands except per share amounts)	GAAP / As Reported								Non-GAAP / As Adjusted¹
	12/31/2018			12/31/2019			Change % / bps		12/31/2018			12/31/2019			Change % / bps
Total revenue²	$	1,070,600		$	1,049,788		(1.9	)%	$	1,085,819		$	1,051,395		(3.2	)%
Net income available to common	439,276			419,108			(4.6	)	449,645			426,891			(5.1	)
Diluted EPS available to common	1.95			2.03			4.1		2.00			2.07			3.5
Net interest margin³	3.51		%	3.43		%	(8	)	3.57		%	3.49		%	(8	)
Return on average tangible common equity	17.87			16.42			(145	)	18.29			16.73			(156	)
Return on average tangible assets	1.51			1.48			(3	)	1.55			1.51			(4	)
Tangible book value per common share¹	$	11.78		$	13.09		11.1	%	$	11.78		$	13.09		11.1	%


▪	Net income available to common stockholders of $419.1 million (as reported) and $426.9 million (as adjusted).


▪	Total commercial loans of $19.0 billion at December 31, 2019; growth of 17.2% over December 31, 2018.


▪	Operating efficiency ratio of 44.2% (as reported) and 40.1% (as adjusted)⁴.


▪	Repurchased 19,312,694 common shares in 2019 at a weighted average price of $19.83 per share.


▪	Tangible book value per common share¹ of $13.09; growth of 11.1% over December 31, 2018.

Key Performance Highlights for the Three Months ended December 31, 2019 vs. December 31, 2018



($ in thousands except per share amounts)	GAAP / As Reported								Non-GAAP / As Adjusted¹
	12/31/2018			12/31/2019			Change % / bps		12/31/2018			12/31/2019			Change % / bps
Total revenue²	$	265,346		$	260,638		(1.8	)%	$	274,247		$	264,457		(3.6	)%
Net income available to common	112,501			104,722			(6.9	)	116,458			108,855			(6.5	)
Diluted EPS available to common	0.51			0.52			2.0		0.52			0.54			3.8
Net interest margin³	3.48		%	3.37		%	(11	)	3.53		%	3.42		%	(11	)
Return on average tangible common equity	17.56			15.94			(162	)	18.17			16.57			(160	)
Return on average tangible assets	1.53			1.45			(8	)	1.58			1.51			(7	)


▪	Growth in commercial loans of $791.3 million over linked quarter; 17.2% annualized growth rate.


▪	Total deposits were $22.4 billion with a cost of 0.89%. Municipal deposit balances decreased by $246.6 million.


▪	Decrease in total interest expense of $4.7 million and decrease in total funding liabilities of 10 basis points relative to linked quarter.


▪	Excluding accretion income on acquired loans, net interest margin was 3.13%.


▪	Consolidated five financial centers in the fourth quarter of 2019; a total of 24 consolidated in 2019. Total of 82 financial centers open as of December 31, 2019.


▪	Issued $275.0 million of Tier 2 regulatory capital qualifying subordinated notes.


▪	Completed the previously announced acquisition of an $838.9 million equipment finance loan and lease portfolio.

1. Non-GAAP / as adjusted measures are defined in the non-GAAP tables beginning on page 18.

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 and gain on termination of a pension plan.

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. The tax equivalent adjustment assumes a 21% federal tax rate in all periods presented.

4. Operating efficiency ratio is a non-GAAP measure. See page 21 for an explanation of the operating efficiency ratio.

MONTEBELLO, N.Y. – January 22, 2020 – Sterling Bancorp (NYSE: STL) (the “Company”), the parent company of Sterling National Bank (the “Bank”), today announced results for the three and twelve months ended December 31, 2019. Net income available to common stockholders for the quarter ended December 31, 2019 was $104.7 million, or $0.52 per diluted share, compared to net income available to common stockholders of $120.5 million, or $0.59 per diluted share, for the linked quarter ended September 30, 2019, and net income available to common stockholders of $112.5 million, or $0.51 per diluted share, for the three months ended December 31, 2018.

Net income available to common stockholders for the year ended December 31, 2019 was $419.1 million, or $2.03 per diluted share, compared to net income available to common stockholders of $439.3 million, or $1.95 per diluted share, for the year ended December 31, 2018.

President’s Comments

Jack Kopnisky, President and Chief Executive Officer, commented: “We delivered strong operating performance in 2019, continuing to grow our commercial businesses, transitioning our balance sheet, managing our funding costs and driving operational efficiency. In the fourth quarter of 2019, our adjusted net income available to common stockholders was $108.9 million and our adjusted diluted earnings per share available to common stockholders (“adjusted EPS”) was $0.54. Our profitability metrics remained strong, including adjusted return on average tangible assets of 1.51% and adjusted return on average tangible common equity of 16.6%. We continue to deliver on our track record of growth and profitability. Over the past five years, our adjusted EPS has grown at a compound annual growth rate (“CAGR”) of 21.3%, and our tangible book value per common share has grown at a CAGR of 15.1%.

“Our commercial businesses have strong momentum. We grew spot commercial loan balances by $791.3 million in the fourth quarter of 2019 and $2.8 billion since December 31, 2018. In the same periods, run-off of residential mortgage loans was $160.1 million and $623.9 million, respectively. At December 31, 2019, our loan portfolio consisted of 88.6% in total commercial loans, in-line with our target of commercial loans representing at least 85.0% of our total loan portfolio. We continue to exercise discipline on new loan originations and have augmented our growth through opportunistic portfolio acquisitions, focusing on diversified commercial asset classes where we can achieve our target risk-adjusted returns.

“We continue to focus on generating deposit growth through full client relationships. Total deposits were $22.4 billion and the cost of total deposits was 0.89% in the fourth quarter of 2019, which represented a three basis points decline in cost compared to the third quarter of 2019. The improving market conditions and competitive dynamics in our deposit markets is evident in our ability to reduce the cost of interest bearing deposits by twelve basis points in the fourth quarter of 2019 relative to the linked quarter. We have also created a more optimal overall funding mix, reducing our total interest expense by $4.7 million relative to the linked quarter. We anticipate the current interest rate environment and pricing strategies we have implemented will allow us to further reduce our cost of total funding liabilities. In the fourth quarter of 2019, our cost of total funding liabilities was 1.06%, a decrease of 10 basis points relative to the linked quarter.

“The low interest rate environment and flat yield curve continued to pressure our interest earning asset and loan origination yields, as our tax equivalent yield excluding accretion income on acquired loans was 3.13% in the fourth quarter of 2019 compared to 3.15% for the linked quarter. Our net interest margin was impacted by higher average cash balances in the fourth quarter, which increased by $269.0 million relative to the linked quarter and were a result of funding needs for the acquisition of the equipment finance loan and lease portfolio. We estimate the higher cash balances negatively impacted our net interest margin by approximately four basis points. Although net interest margin decreased, our growth, asset mix and funding composition allowed us to grow net interest income by $4.9 million in the fourth quarter of 2019 relative to the linked quarter.

“We continue to maintain strong controls over operating expenses. During the fourth quarter of 2019, we consolidated five financial centers, bringing our total to 24 financial centers consolidated in 2019. Our financial center count was 82 at December 31, 2019, and we anticipate our total financial centers will decrease below 80 in 2020. In the fourth quarter of 2019, our annualized adjusted operating expenses were $418.7 million and our adjusted operating efficiency ratio was 39.9%.

“We constantly evaluate alternatives to increase our operational efficiency and effectiveness. To that end, we executed several corporate actions during the quarter. First, we completed the issuance of $275.0 million of subordinated notes that will be used in part to redeem the senior notes maturing in June 2020 that we assumed in the merger with Astoria Financial Corp. (the “Astoria Merger”). Second, we completed our previously announced equipment finance portfolio acquisition with total balances at acquisition of $838.9 million in November 2019. This portfolio was integrated into our equipment finance portfolio.

“Our tangible common equity ratio was 9.03% and our estimated Tier 1 Leverage ratio was 9.55% at December 31, 2019. Our tangible book value per common share was $13.09, which represented an increase of 11.1% from a year ago. Our ample capital position and strong internal capital generation will support our growth strategy and allow us to return capital to stockholders. In the fourth quarter of 2019, we repurchased 4,000,000 common shares.

“We have created a Company with significant operating flexibility and are confident that our business mix, growth strategy and strong capital position will allow us to continue generating superior returns and earnings per share growth. 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 February 18, 2020 to holders of record as of February 3, 2020.”

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

The Company’s GAAP net income available to common stockholders of $104.7 million, or $0.52 per diluted share, for the fourth quarter of 2019, included the following items:


▪	a pre-tax charge of $5.1 million for asset write-downs, systems integration, retention and severance related to the equipment finance loan portfolio acquisition;


▪	a pre-tax loss of $280 thousand related to the termination of the legacy Astoria defined benefit pension plan;


▪	a pre-tax loss of $76 thousand on the sale of available for sale securities; and


▪	the pre-tax amortization of non-compete agreements and acquired customer list intangible assets of $200 thousand.

Excluding the impact of these items, adjusted net income available to common stockholders was $108.9 million, or $0.54 per diluted share, for the three months ended December 31, 2019.

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 18.

Net Interest Income and Margin



($ in thousands)	For the three months ended									Change % / bps
	12/31/2018			9/30/2019			12/31/2019			Y-o-Y		Linked Qtr
Interest and dividend income	$	313,197		$	295,209		$	295,474		(5.7	%)	0.1	%
Interest expense	70,326			71,888			67,217			(4.4	)	(6.5	)
Net interest income	$	242,871		$	223,321		$	228,257		(6.0	)	2.2

Accretion income on acquired loans	$	27,016		$	17,973		$	19,497		(27.8	)%	8.5	%
Yield on loans	5.07		%	4.97		%	4.84		%	(23	)	(13	)
Tax equivalent yield on investment securities	2.92			2.85			2.89			(3	)	4
Tax equivalent yield on interest earning assets	4.54			4.50			4.41			(13	)	(9	)
Cost of total deposits	0.77			0.92			0.89			12		(3	)
Cost of interest bearing deposits	0.97			1.16			1.10			13		(6	)
Cost of borrowings	2.43			2.41			2.38			(5	)	(3	)
Cost of interest bearing liabilities	1.28			1.40			1.28			—		(12	)
Total cost of funding liabilities⁵	1.07			1.16			1.06			(1	)	(10	)
Tax equivalent net interest margin⁶	3.53			3.42			3.42			(11	)	—

Average commercial loans	$	15,741,665		$	17,596,552		$	18,473,473		17.4	%	5.0	%
Average loans, including loans held for sale	20,389,223			20,302,887			21,000,949			3.0		3.4
Average cash balances	291,460			304,820			573,861			96.9		88.3
Average investment securities	6,685,989			5,439,886			5,064,936			(24.2	)	(6.9	)
Average total interest earning assets	27,710,655			26,354,394			26,901,439			(2.9	)	2.1
Average deposits and mortgage escrow	21,352,428			20,749,885			22,289,097			4.4		7.4

⁵Include interest bearing liabilities and non-interest bearing deposits.

⁶ 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 21% federal tax rate in all periods presented.

Fourth quarter 2019 compared with fourth quarter 2018

Net interest income was $228.3 million for the quarter ended December 31, 2019, a decrease of $14.6 million compared to the fourth quarter of 2018. This was mainly due to a $809.2 million decline in average total interest earning assets and a decrease in accretion income on acquired loans of $7.5 million. Other key components of the changes in net interest income and net interest margin for the fourth quarter of 2019 compared to the fourth quarter of 2018 were the following:

▪

The yield on loans was 4.84% compared to 5.07% for the three months ended December 31, 2018. The decrease in yield on loans was mainly due to the decline in accretion income on acquired loans, which was $19.5 million in the fourth quarter of 2019 compared to $27.0 million in the fourth quarter of 2018. The decrease in yield on loans was also due to the decline in market interest rates during 2019.

▪

The tax equivalent yield on investment securities was 2.89% compared to 2.92% for the three months ended December 31, 2018. Average investment securities were $5.1 billion, or 18.8%, of average total interest earning assets for the fourth quarter of 2019 compared to $6.7 billion, or 24.1%, of average total interest earning assets for the fourth quarter of 2018. The decline in the average balance of investment securities was mainly due to our balance sheet transition strategy.

▪

In the fourth quarter of 2019, average cash balances were $573.9 million compared to $291.5 million in the fourth quarter of 2018. We maintained higher cash in the fourth quarter of 2019 in anticipation of closing the equipment finance loan portfolio acquisition. We estimate the increased level of cash on hand had an unfavorable impact on our tax equivalent net interest margin of approximately four basis points.


▪	The tax equivalent yield on interest earning assets decreased thirteen basis points to 4.41%.


▪	The cost of total deposits was 89 basis points for the fourth quarter of 2019 compared to 77 basis points for the same period a year ago. The increase was mainly due to interest rate market conditions and competitive dynamics in our deposit markets.


▪	The cost of borrowings was 2.38% for the fourth quarter of 2019 compared to 2.43% for the same period a year ago. The decline in cost of borrowings was mainly due to the maturity of higher cost Federal Home Loan Bank (“FHLB”) borrowings.


▪	The total cost of interest bearing liabilities was unchanged at 1.28%, which was mainly due to the factors discussed above.


▪	Average interest bearing deposits increased by $899.3 million and average borrowings decreased $1.8 billion compared to the fourth quarter of 2018.


▪	Total interest expense decreased by $3.1 million compared to the fourth quarter of 2018.

The tax equivalent net interest margin was 3.42% for the fourth quarter of 2019 compared to 3.53% for the fourth quarter of 2018. The decrease in tax equivalent net interest margin was mainly due to the increase in the cost of interest bearing liabilities and the decrease in accretion income on acquired loans. Excluding accretion income, tax equivalent net interest margin was 3.13% for the fourth quarter of 2019 compared to 3.15% for the fourth quarter of 2018.

Fourth quarter 2019 compared with linked quarter ended September 30, 2019

Net interest income increased $4.9 million for the quarter ended December 31, 2019 compared to the linked quarter. The increase in net interest income was mainly due to a decrease in interest expense on borrowings as a result of lower rates paid on borrowings and lower average balances. Other key components of the changes in net interest income and net interest margin for the fourth quarter of 2019 compared to the linked quarter were the following:

▪

The yield on loans was 4.84% compared to 4.97% for the linked quarter. The decrease in the yield on loans was mainly due to the decline in market interest rates between the periods. Accretion income on acquired loans increased $1.5 million to $19.5 million for the fourth quarter of 2019 compared to $18.0 million in the linked quarter, which was mainly due to the pay-off of one purchase credit impaired loan.


▪	The average balance of commercial loans increased by $876.9 million and the average balance of residential mortgage loans declined by $159.7 million, both compared to the linked quarter.


▪	The tax equivalent yield on investment securities was 2.89% compared to 2.85% for the linked quarter. The increase in yield was mainly due to earlier sales of lower yielding securities.


▪	The tax equivalent yield on interest earning assets was 4.41% compared to 4.50% in the linked quarter.


▪	The cost of total deposits decreased three basis points to 89 basis points, mainly due to improving market conditions in our deposit markets and our pricing strategies. The total cost of borrowings declined three basis points to 2.38% due to changes in market rates of interest and maturities of higher cost FHLB borrowings.


▪	Average interest bearing deposits increased by $1.4 billion and average borrowings decreased by $982.4 million relative to the linked quarter. The increase in average deposits was due to growth in commercial and consumer deposits of $297.3

million, on-line deposit growth of $314.5 million, growth in municipal deposits of $257.0 million, and growth in wholesale deposits of $534.0 million.


▪	Total interest expense decreased $4.7 million from the linked quarter.

The tax equivalent net interest margin was 3.42% in the current quarter and linked quarter. Excluding accretion income on acquired loans, tax equivalent net interest margin was 3.13% compared to 3.15% in the linked quarter. Based on a more normalized level of average cash balances and continued proactive management of funding costs, we anticipate we will be able to maintain a tax equivalent net interest margin excluding accretion income on acquired loans of 3.15% to 3.25% in 2020.

Non-interest Income



($ in thousands)	For the three months ended								Change %
	12/31/2018			9/30/2019		12/31/2019			Y-o-Y		Linked Qtr
Total non-interest income	$	22,475		$	51,830	$	32,381		44.1	%	(37.5	)%
Net (loss) gain on sale of securities	(4,886		)	6,882		(76		)	NM		NM
Gain (loss) on termination of pension plan	—			12,097		(280		)	NM		NM
Adjusted non-interest income	$	27,361		$	32,851	$	32,737		19.6		(0.3	)

Fourth quarter 2019 compared with fourth quarter 2018

Adjusted non-interest income increased $5.4 million in the fourth quarter of 2019 to $32.7 million, compared to $27.4 million in the same quarter last year. The change was mainly due to higher loan commissions and fees generated by our commercial banking teams and income from bank owned life insurance (“BOLI”).

In the fourth quarter of 2019, we realized a loss of $76 thousand on the sale of available for sale securities compared to a $4.9 million loss in the year earlier period. We are managing our securities balances relative to our longer-term target of 15% of earning assets over time.

We terminated the defined benefit pension plan assumed in the Astoria Merger during the third quarter of 2019 and recorded a gain of $12.1 million. In fourth quarter of 2019, we incurred professional and administrative fees which reduced income by $280 thousand.

Fourth quarter 2019 compared with linked quarter ended September 30, 2019

Adjusted non-interest income decreased approximately $114 thousand from $32.9 million in the linked quarter to $32.7 million in the fourth quarter of 2019. The decrease was due to a decline in BOLI income. BOLI income was $8.1 million in the third quarter of 2019 and $4.8 million in the fourth quarter of 2019. BOLI income in the third quarter of 2019 included the restructuring of the BOLI assets acquired in the Astoria Merger. Other commissions and loan fees increased by $2.4 million in the fourth quarter of 2019, substantially offsetting the decline in BOLI income. The increase in other commissions and loan fees was driven by loan sales and syndications in our public sector finance and equipment finance loan portfolios.

Non-interest Expense



($ in thousands)	For the three months ended									Change % / bps
	12/31/2018			9/30/2019			12/31/2019			Y-o-Y		Linked Qtr
Compensation and benefits	$	54,677		$	52,850		$	52,453		(4.1	)%	(0.8	)%
Stock-based compensation plans	3,679			4,565			5,180			40.8		13.5
Occupancy and office operations	16,579			15,836			15,886			(4.2	)	0.3
Information technology	8,761			8,545			9,313			6.3		9.0
Amortization of intangible assets	5,865			4,785			4,785			(18.4	)	—
FDIC insurance and regulatory assessments	3,608			3,194			3,134			(13.1	)	(1.9	)
Other real estate owned (“OREO”), net	15			79			(132		)	(980.0	)	(267.1	)
Charge for asset write-downs, systems integration, retention and severance	—			—			5,133			NM		NM
Other expenses	16,737			16,601			19,698			17.7		18.7
Total non-interest expense	$	109,921		$	106,455		$	115,450		5.0		8.4
Full time equivalent employees (“FTEs”) at period end	1,907			1,689			1,639			(14.1	)	(3.0	)
Financial centers at period end	106			87			82			(22.6	)	(5.7	)
Operating efficiency ratio, as reported	41.4		%	38.7		%	44.3		%	(290	)	(560	)
Operating efficiency ratio, as adjusted	38.0			39.1			39.9			(190	)	(80	)

Fourth quarter 2019 compared with fourth quarter 2018

Total non-interest expense increased $5.5 million relative to the fourth quarter of 2018. Key components of the change in non-interest expense between the periods were the following:


▪	Compensation and benefits decreased $2.2 million, mainly due to a decline in total FTEs between the periods. Total FTEs declined to 1,639 from 1,907, which was mainly due to our ongoing financial center consolidation strategy following the Astoria Merger. This was partially offset by the hiring of commercial bankers, business development officers and risk management personnel.


▪	Occupancy and office operations expense decreased $693 thousand, mainly due to the consolidation of financial centers and other back-office locations. We consolidated a total of 24 locations in 2019.


▪	Information technology expense increased $552 thousand, mainly due to incremental costs incurred for automation and information security.

▪

FDIC insurance and regulatory assessments decreased $474 thousand to $3.1 million in the fourth quarter of 2019, compared to $3.6 million in the fourth quarter of 2018. The decrease was a result of a reduction in FDIC deposit insurance assessments, which was mainly due to the termination of the quarterly Deposit Insurance Fund surcharge that was assessed to institutions with $10 billion or more in assets in 2018.


▪	OREO expense, net, declined $147 thousand to income of $132 thousand for the fourth quarter of 2019. In the fourth quarter of 2019, OREO expense, net, included gain on sale of $542 thousand, which was offset by $217 thousand of write-downs and $242 thousand of operating costs.


▪	Other expenses increased $3.0 million to $19.7 million, which was mainly due to higher marketing expense, higher professional fees and net costs related to retirement plans. The increase in marketing expense was due to deposit gathering strategies, client communications and our website redesign. The increase in professional fees was mainly due to loan collection matters.

Fourth quarter 2019 compared with linked quarter ended September 30, 2019

Total non-interest expense increased $9.0 million to $115.5 million in the fourth quarter of 2019. In the fourth quarter, we recorded a charge for asset write-downs, systems integration, retention and severance of $5.1 million related to the equipment finance loan portfolio acquisition. Excluding the charge, non-interest expense increased $3.9 million in the fourth quarter compared to the linked quarter ended September 30, 2019. Key components of the change in non-interest expense were the following:


▪	Compensation and benefits decreased $397 thousand to $52.5 million in the fourth quarter of 2019. The decrease was mainly due to a decrease in FTEs, from 1,689 at September 30, 2019 to 1,639 at December 31, 2019.


▪	The increase in information technology and other expenses, which was associated with higher marketing expense and higher net costs related to retirement plans, were due to the same factors as discussed above.

Taxes

We recorded income tax expense at an estimated effective tax rate of 21.0% for the three months ended December 31, 2019 and the year ended December 31, 2019. In the fourth quarter of 2019, we also recorded a reduction in income tax expense of $363 thousand due to vesting of stock-based compensation, which resulted in a tax expense at a rate of 20.7% for the quarter. For the three months ended September 30, 2019 and December 31, 2018, we recorded income tax expense at an estimated effective income tax rate of 21.0%.

Key Balance Sheet Highlights as of December 31, 2019



($ in thousands)	As of									Change % / bps
	12/31/2018			9/30/2019			12/31/2019			Y-o-Y		Linked Qtr
Total assets	$	31,383,307		$	30,077,665		$	30,586,497		(2.5	)%	1.7	%
Total portfolio loans, gross	19,218,530			20,830,163			21,440,212			11.6		2.9
Commercial & industrial (“C&I”) loans	6,533,386			7,792,569			8,232,719			26.0		5.6
Commercial real estate loans (including multi-family)	9,406,541			9,977,839			10,295,518			9.5		3.2
Acquisition, development and construction (“ADC”) loans	267,754			433,883			467,331			74.5		7.7
Total commercial loans	16,207,681			18,204,291			18,995,568			17.2		4.3
Residential mortgage loans	2,705,226			2,370,216			2,210,112			(18.3	)	(6.8	)
BOLI	653,995			609,720			613,848			(6.1	)	0.7
Core deposits⁷	19,998,967			20,296,395			20,548,459			2.7		1.2
Total deposits	21,214,148			21,579,324			22,418,658			5.7		3.9
Municipal deposits (included in core deposits)	1,751,670			2,234,630			1,988,047			13.5		(11.0	)
Investment securities	6,667,180			5,047,011			5,075,309			(23.9	)	0.6
Total borrowings	5,214,183			3,174,224			2,885,958			(44.7	)	(9.1	)
Loans to deposits	90.6		%	96.5		%	95.6		%	500		(90	)
Core deposits to total deposits	94.3			94.1			91.7			(260	)	(240	)
Investment securities to earning assets	25.2			19.1			18.8			(640	)	(30	)

⁷Core deposits include retail, commercial and municipal transaction, money market, savings accounts and certificates of deposit accounts, and reciprocal Certificate of Deposit Account Registry balances and exclude brokered and wholesale deposits.

Highlights in balance sheet items as of December 31, 2019 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 38.4% of total portfolio loans; commercial real estate loans (which include multi-family loans) represented 48.0% of total portfolio loans; consumer and residential mortgage loans combined represented 11.4% of total portfolio loans; and ADC loans represented 2.2% of total portfolio loans, respectively. At December 31, 2018, C&I loans represented 34.0%; commercial real estate loans (which include multi-family loans) represented 48.9%; consumer and residential mortgage loans combined represented 15.7%; and ADC loans represented 1.4% of total portfolio loans, respectively. We continued making progress towards our goal of a loan mix comprised of 45% for each of C&I and commercial real estate loans and 10% other loans.


▪	Total commercial loans, which include all C&I loans, commercial real estate (including multi-family) and ADC loans, increased by $791.3 million over the linked quarter and $2.8 billion since December 31, 2018. Growth in total commercial loans for 2019 included $1.2 billion of loans acquired in loan portfolio acquisitions and $1.6 billion of loans originated by our commercial banking teams.


▪	ADC loans increased $33.4 million over the linked quarter and $199.6 million since December 31, 2018. The increase was mainly related to construction loans associated with our investments in affordable housing tax credits.


▪	Residential mortgage loans held in our loan portfolio were $2.2 billion at December 31, 2019, a decline of $160.1 million from the linked quarter and a decline of $495.1 million from the same period a year ago. The decline was mainly due to repayments.


▪	The balance of BOLI increased by $4.1 million relative to the prior quarter and was $613.8 million at December 31, 2019. BOLI declined $40.1 million in 2019, mainly due to the partial redemption of $60.5 million of legacy Astoria BOLI assets related to the BOLI restructuring executed in the third quarter of 2019.


▪	Core deposits at December 31, 2019 were $20.5 billion and increased $252.1 million compared to September 30, 2019, and increased $549.5 million compared to December 31, 2018.


▪	Total deposits at December 31, 2019 increased $839.3 million compared to September 30, 2019, and total deposits increased $1.2 billion compared to December 31, 2018. We increased wholesale deposits in the fourth quarter of 2019 to fund a portion of the equipment finance loan portfolio acquisition.


▪	Municipal deposits at December 31, 2019 were $2.0 billion, a decrease of $246.6 million relative to September 30, 2019. This decrease was due to seasonal outflows. Historically, municipal deposits reach their annual peak at September 30.


▪	Investment securities decreased by $1.6 billion from December 31, 2018, and represented 18.8% of earning assets at December 31, 2019. We sold securities during the past twelve months to fund commercial loan growth including loan portfolio acquisitions. We also sold securities to reduce the proportion of lower yielding assets as a percentage of total assets.

▪

Total borrowings at December 31, 2019 were $2.9 billion, a decrease of $288.3 million relative to September 30, 2019 and $2.3 billion relative to December 31, 2018. The sale of securities and deposit inflows allowed us to reduce borrowings. Included in total borrowings is $270.9 million of subordinated notes issued by the Company in December 2019 (the notes have an aggregate principal amount of $275.0 million). A portion of the proceeds will be used to redeem the senior notes assumed in the Astoria Merger that mature in June 2020.

Credit Quality



($ in thousands)	For the three months ended									Change % / bps
	12/31/2018			9/30/2019			12/31/2019			Y-o-Y		Linked Qtr
Provision for loan losses	$	10,500		$	13,700		$	10,585		0.8	%	(22.7	)%
Net charge-offs	6,188			13,629			9,082			46.8		(33.4	)
Allowance for loan losses	95,677			104,735			106,238			11.0		1.4
Non-performing loans	168,822			190,966			179,161			6.1		(6.2	)
Loans 30 to 89 days past due	97,201			64,756			52,880			(45.6	)	(18.3	)
Annualized net charge-offs to average loans	0.12		%	0.27		%	0.17		%	5		(10	)
Special mention loans	113,180			136,972			159,976			41.3		16.8
Substandard loans	266,047			277,975			295,428			11.0		6.3
Allowance for loan losses to total loans	0.50			0.50			0.50			—		—
Allowance for loan losses to non-performing loans	56.7			54.8			59.3			260		450

Provision for loan losses was $10.6 million for the quarter ended December 31, 2019, which was $1.5 million greater than net charge-offs. Net charge-offs of $9.1 million included charge-offs related to the work-out of two asset-based lending relationships that were fully exited and resolved during the quarter. Other charge-off activity was mainly due to equipment finance loans. Allowance coverage ratios were 0.50% of total loans and 59.3% of non-performing loans at December 31, 2019. Note that due to our various acquisitions and mergers, a significant portion of our loan portfolio does not carry an allowance for loan losses, as the acquired loans were recorded at their estimated fair value on the acquisition date.

Non-performing loans decreased by $11.8 million to $179.2 million at December 31, 2019 compared to the linked quarter, and net charge-offs were 17 basis points of total loans on an annualized basis. Loans 30 to 89 days past due decreased $11.9 million from the linked quarter.

Special mention loans increased $23.0 million and substandard loans increased $17.5 million in the fourth quarter of 2019 compared to the linked quarter. The increase in special mention and substandard loans was mainly due to loans in our commercial real estate and asset-based lending which are performing and well secured by collateral.

Capital



($ in thousands, except share and per share data)	As of									Change % / bps
	12/31/2018			9/30/2019			12/31/2019			Y-o-Y		Linked Qtr
Total stockholders’ equity	$	4,428,853		$	4,520,967		$	4,530,113		2.3	%	0.2	%
Preferred stock	138,423			137,799			137,581			(0.6	)	(0.2	)
Goodwill and other intangible assets	1,742,578			1,772,963			1,793,846			2.9		1.2
Tangible common stockholders’ equity ⁸	$	2,547,852		$	2,610,205		$	2,598,686		2.0		(0.4	)
Common shares outstanding	216,227,852			202,392,884			198,455,324			(8.2	)	(1.9	)
Book value per common share	$	19.84		$	21.66		$	22.13		11.5		2.2
Tangible book value per common share⁸	11.78			12.90			13.09			11.2		1.5
Tangible common equity to tangible assets ⁸	8.60		%	9.22		%	9.03		%	43		(19	)
Estimated Tier 1 leverage ratio - Company	9.50			9.78			9.55			5		(23	)
Estimated Tier 1 leverage ratio - Bank	9.94			10.08			10.11			17		3

⁸See a reconciliation of non-GAAP financial measures beginning on page 18.

Total stockholders’ equity increased $9.1 million to $4.5 billion as of December 31, 2019 compared to September 30, 2019 and increased $101.3 million compared to December 31, 2018. For the fourth quarter of 2019, net income available to common stockholders of $104.7 million was offset by a decrease in accumulated other comprehensive income of $4.9 million, common dividends of $14.1 million, preferred dividends of $2.2 million and common stock repurchases of $81.9 million.

Total goodwill and other intangible assets were $1.8 billion at December 31, 2019, an increase of $20.9 million compared to September 30, 2019, which was due to the equipment finance loan and lease portfolio acquisition.

Basic and diluted weighted average common shares outstanding declined relative to the linked quarter by approximately 3.4 million shares and were 199.7 million shares and 200.3 million shares, respectively. Total common shares outstanding at December 31, 2019 were approximately 198.5 million. In the fourth quarter of 2019, we repurchased 4,000,000 shares of common stock at a weighted average price of $20.49 per share. Under our Board of Directors approved repurchase program, we have 1,572,535 shares remaining for repurchase at December 31, 2019.

Tangible book value per common share was $13.09 at December 31, 2019, which represented an increase of 11.2% over a year ago and an increase of 1.5% over September 30, 2019.

Conference Call Information

Sterling Bancorp will host a teleconference and webcast on Thursday, January 23, 2020 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 (866) 548-4713, Conference ID #6117623. 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: 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 Annual Report on Form 10-K for the twelve months ended December 31, 2019. 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 Annual Report on Form 10-K 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)



	12/31/2018			9/30/2019			12/31/2019
Assets:
Cash and cash equivalents	$	438,110		$	545,603		$	329,151
Investment securities	6,667,180			5,047,011			5,075,309
Loans held for sale	1,565,979			4,627			8,125
Portfolio loans:
Commercial and industrial (“C&I”)	6,533,386			7,792,569			8,232,719
Commercial real estate (including multi-family)	9,406,541			9,977,839			10,295,518
ADC	267,754			433,883			467,331
Residential mortgage	2,705,226			2,370,216			2,210,112
Consumer	305,623			255,656			234,532
Total portfolio loans, gross	19,218,530			20,830,163			21,440,212
Allowance for loan losses	(95,677		)	(104,735		)	(106,238		)
Total portfolio loans, net	19,122,853			20,725,428			21,333,974
FHLB and Federal Reserve Bank Stock, at cost	369,690			276,929			251,805
Accrued interest receivable	107,111			104,881			100,312
Premises and equipment, net	264,194			238,723			227,070
Goodwill	1,613,033			1,657,814			1,683,482
Other intangibles	129,545			115,149			110,364
BOLI	653,995			609,720			613,848
Other real estate owned	19,377			13,006			12,189
Other assets	432,240			738,774			840,868
Total assets	$	31,383,307		$	30,077,665		$	30,586,497
Liabilities:
Deposits	$	21,214,148		$	21,579,324		$	22,418,658
FHLB borrowings	4,838,772			2,800,907			2,245,653
Other borrowings	21,338			26,544			22,678
Senior notes	181,130			173,652			173,504
Subordinated notes - Company	—			—			270,941
Subordinated notes - Bank	172,943			173,121			173,182
Mortgage escrow funds	72,891			84,595			58,316
Other liabilities	453,232			718,555			693,452
Total liabilities	26,954,454			25,556,698			26,056,384
Stockholders’ equity:
Preferred stock	138,423			137,799			137,581
Common stock	2,299			2,299			2,299
Additional paid-in capital	3,776,461			3,762,046			3,766,716
Treasury stock	(213,935		)	(501,814		)	(583,408		)
Retained earnings	791,550			1,075,503			1,166,709
Accumulated other comprehensive (loss) income	(65,945		)	45,134			40,216
Total stockholders’ equity	4,428,853			4,520,967			4,530,113
Total liabilities and stockholders’ equity	$	31,383,307		$	30,077,665		$	30,586,497

Shares of common stock outstanding at period end	216,227,852			202,392,884			198,455,324
Book value per common share	$	19.84		$	21.66		$	22.13
Tangible book value per common share¹	11.78			12.90			13.09
¹ See reconciliation of non-GAAP financial measures beginning on page 18.

Sterling Bancorp and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

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



	For the Quarter Ended								For the Year ended
	12/31/2018			9/30/2019		12/31/2019			12/31/2018			12/31/2019
Interest and dividend income:
Loans and loan fees	$	260,417		$	254,414	$	256,377		$	1,006,496		$	1,029,369
Securities taxable	30,114			21,977		20,367			115,971			94,823
Securities non-taxable	15,104			13,491		13,031			61,062			55,802
Other earning assets	7,562			5,327		5,699			24,944			22,546
Total interest and dividend income	313,197			295,209		295,474			1,208,473			1,202,540
Interest expense:
Deposits	41,450			48,330		49,907			130,096			192,361
Borrowings	28,876			23,558		17,310			110,974			91,256
Total interest expense	70,326			71,888		67,217			241,070			283,617
Net interest income	242,871			223,321		228,257			967,403			918,923
Provision for loan losses	10,500			13,700		10,585			46,000			45,985
Net interest income after provision for loan losses	232,371			209,621		217,672			921,403			872,938
Non-interest income:
Deposit fees and service charges	6,511			6,582		6,506			26,830			26,398
Accounts receivable management / factoring commissions and other related fees	6,480			6,049		6,572			22,772			23,837
BOLI	4,060			8,066		4,770			15,651			20,670
Loan commissions and fees	4,066			6,285		8,698			16,181			24,129
Investment management fees	1,901			1,758		1,597			7,790			7,305
Net (loss) gain on sale of securities	(4,886		)	6,882		(76		)	(10,788		)	(6,905		)
Gain on sale of residential mortgage loans	—			—		—			—			8,313
Gain (loss) on termination of pension plan	—			12,097		(280		)	—			11,817
Gain on sale of fixed assets	—			—		—			11,800			—
Other	4,343			4,111		4,594			12,961			15,301
Total non-interest income	22,475			51,830		32,381			103,197			130,865
Non-interest expense:
Compensation and benefits	54,677			52,850		52,453			220,340			215,766
Stock-based compensation plans	3,679			4,565		5,180			12,984			19,473
Occupancy and office operations	16,579			15,836		15,886			68,536			64,363
Information technology	8,761			8,545		9,313			41,174			35,580
Amortization of intangible assets	5,865			4,785		4,785			23,646			19,181
FDIC insurance and regulatory assessments	3,608			3,194		3,134			20,493			12,660
Other real estate owned, net	15			79		(132		)	1,650			622
Impairment related to financial centers and real estate consolidation strategy	—			—		—			—			14,398
Charge for asset write-downs, systems integration, retention and severance	—			—		5,133			13,132			8,477
Other	16,737			16,601		19,698			56,415			73,317
Total non-interest expense	109,921			106,455		115,450			458,370			463,837
Income before income tax expense	144,925			154,996		134,603			566,230			539,966
Income tax expense	30,434			32,549		27,905			118,976			112,925
Net income	114,491			122,447		106,698			447,254			427,041
Preferred stock dividend	1,990			1,982		1,976			7,978			7,933
Net income available to common stockholders	$	112,501		$	120,465	$	104,722		$	439,276		$	419,108
Weighted average common shares:
Basic	222,319,682			203,090,365		199,719,747			224,299,488			205,679,874
Diluted	222,769,369			203,566,582		200,252,542			224,816,996			206,131,628
Earnings per common share:
Basic earnings per share	$	0.51		$	0.59	$	0.52		$	1.96		$	2.04
Diluted earnings per share	0.51			0.59		0.52			1.95			2.03
Dividends declared per share	0.07			0.07		0.07			0.28			0.28

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	12/31/2018		3/31/2019		6/30/2019		9/30/2019		12/31/2019
Total assets	$	31,383,307	$	29,956,607	$	30,237,545	$	30,077,665	$	30,586,497
Tangible assets ¹	29,640,729		28,174,074		28,459,797		28,304,702		28,792,651
Securities available for sale	3,870,563		3,847,799		3,843,112		3,061,419		3,095,648
Securities held to maturity	2,796,617		2,067,251		2,015,753		1,985,592		1,979,661
Loans held for sale²	1,565,979		248,972		27,221		4,627		8,125
Portfolio loans	19,218,530		19,908,473		20,370,306		20,830,163		21,440,212
Goodwill	1,613,033		1,657,814		1,657,814		1,657,814		1,683,482
Other intangibles	129,545		124,719		119,934		115,149		110,364
Deposits	21,214,148		21,225,639		20,948,464		21,579,324		22,418,658
Municipal deposits (included above)	1,751,670		2,027,563		1,699,824		2,234,630		1,988,047
Borrowings	5,214,183		3,633,480		4,133,986		3,174,224		2,885,958
Stockholders’ equity	4,428,853		4,419,223		4,459,158		4,520,967		4,530,113
Tangible common equity ¹	2,547,852		2,498,472		2,543,399		2,610,205		2,598,686
Quarterly Average Balances
Total assets	30,925,281		30,742,943		29,666,951		29,747,603		30,349,691
Tangible assets ¹	29,179,942		28,986,437		27,886,066		27,971,485		28,569,589
Loans, gross:
Commercial real estate (includes multi-family)	9,341,579		9,385,420		9,486,333		9,711,619		10,061,625
ADC	279,793		284,299		307,290		387,072		459,372
C&I:
Traditional C&I	2,150,644		2,418,027		2,446,676		2,435,644		2,399,901
Asset-based lending³	812,903		876,218		1,070,841		1,151,793		1,137,719
Payroll finance³	223,061		197,809		196,160		202,771		228,501
Warehouse lending³	690,277		710,776		990,843		1,180,132		1,307,645
Factored receivables³	267,986		250,426		246,382		248,150		258,892
Equipment financing³	1,147,269		1,245,051		1,285,095		1,191,944		1,430,715
Public sector finance³	828,153		869,829		967,218		1,087,427		1,189,103
Total C&I	6,120,293		6,568,136		7,203,215		7,497,861		7,952,476
Residential mortgage	4,336,083		3,878,991		2,635,903		2,444,101		2,284,419
Consumer	311,475		295,428		280,098		262,234		243,057
Loans, total⁴	20,389,223		20,412,274		19,912,839		20,302,887		21,000,949
Securities (taxable)	4,133,456		3,833,690		3,453,858		3,189,027		2,905,545
Securities (non-taxable)	2,552,533		2,501,004		2,429,411		2,250,859		2,159,391
Other interest earning assets	635,443		667,256		580,945		611,621		835,554
Total interest earning assets	27,710,655		27,414,224		26,377,053		26,354,394		26,901,439
Deposits:
Non-interest bearing demand	4,324,247		4,247,389		4,218,000		4,225,258		4,361,642
Interest bearing demand	4,082,526		4,334,266		4,399,296		4,096,744		4,359,767
Savings (including mortgage escrow funds)	2,535,098		2,460,247		2,448,132		2,375,882		2,614,523
Money market	7,880,331		7,776,501		7,538,890		7,341,822		7,681,491
Certificates of deposit	2,530,226		2,497,723		2,544,554		2,710,179		3,271,674
Total deposits and mortgage escrow	21,352,428		21,316,126		21,148,872		20,749,885		22,289,097
Borrowings	4,716,522		4,466,172		3,544,661		3,872,840		2,890,407
Stockholders’ equity	4,426,118		4,415,449		4,423,910		4,489,167		4,524,417
Tangible common stockholders’ equity ¹	2,542,256		2,520,595		2,504,883		2,575,199		2,606,617

¹ See a reconciliation of non-GAAP financial measures beginning on page 18.
²At December 31, 2018 and March 31, 2019, loans held for sale included $1.54 billion and $222 million of residential mortgage loans, respectively; the other balances of loans held for sale are commercial syndication loans.
³Asset-based lending, payroll finance, warehouse lending, factored receivables, equipment finance and public sector finance comprise our commercial finance loan portfolio.
⁴Includes 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	12/31/2018			3/31/2019			6/30/2019			9/30/2019			12/31/2019
Basic earnings per share	$	0.51		$	0.47		$	0.46		$	0.59		$	0.52
Diluted earnings per share	0.51			0.47			0.46			0.59			0.52
Adjusted diluted earnings per share, non-GAAP ¹	0.52			0.50			0.51			0.52			0.54
Dividends declared per common share	0.07			0.07			0.07			0.07			0.07
Book value per common share	19.84			20.43			21.06			21.66			22.13
Tangible book value per common share¹	11.78			11.92			12.40			12.90			13.09
Shares of common stock o/s	216,227,852			209,560,824			205,187,243			202,392,884			198,455,324
Basic weighted average common shares o/s	222,319,682			213,157,090			206,932,114			203,090,365			199,719,747
Diluted weighted average common shares o/s	222,769,369			213,505,842			207,376,239			203,566,582			200,252,542
Performance Ratios (annualized)
Return on average assets	1.44		%	1.31		%	1.28		%	1.61		%	1.37		%
Return on average equity	10.08			9.13			8.57			10.65			9.18
Return on average tangible assets	1.53			1.39			1.36			1.71			1.45
Return on average tangible common equity	17.56			16.00			15.13			18.56			15.94
Return on average tangible assets, adjusted ¹	1.58			1.48			1.51			1.50			1.51
Return on avg. tangible common equity, adjusted ¹	18.17			17.04			16.83			16.27			16.57
Operating efficiency ratio, as adjusted ¹	38.0			40.5			40.9			39.1			39.9
Analysis of Net Interest Income
Accretion income on acquired loans	$	27,016		$	25,580		$	23,745		$	17,973		$	19,497
Yield on loans	5.07		%	5.17		%	5.20		%	4.97		%	4.84		%
Yield on investment securities - tax equivalent ²	2.92			2.99			2.92			2.85			2.89
Yield on interest earning assets - tax equivalent ²	4.54			4.64			4.66			4.50			4.41
Cost of interest bearing deposits	0.97			1.09			1.14			1.16			1.10
Cost of total deposits	0.77			0.88			0.91			0.92			0.89
Cost of borrowings	2.43			2.53			2.54			2.41			2.38
Cost of interest bearing liabilities	1.28			1.39			1.38			1.40			1.28
Net interest rate spread - tax equivalent basis ²	3.26			3.25			3.28			3.10			3.13
Net interest margin - GAAP basis	3.48			3.48			3.53			3.36			3.37
Net interest margin - tax equivalent basis ²	3.53			3.54			3.58			3.42			3.42
Capital
Tier 1 leverage ratio - Company ³	9.50		%	9.21		%	9.57		%	9.78		%	9.55		%
Tier 1 leverage ratio - Bank only ³	9.94			9.58			9.98			10.08			10.11
Tier 1 risk-based capital ratio - Bank only ³	13.53			13.10			12.67			12.74			12.42
Total risk-based capital ratio - Bank only ³	14.78			14.39			13.94			13.99			13.63
Tangible common equity - Company¹	8.60			8.87			8.94			9.22			9.03
Condensed Five Quarter Income Statement
Interest and dividend income	$	313,197		$	309,400		$	302,457		$	295,209		$	295,474
Interest expense	70,326			73,894			70,618			71,888			67,217
Net interest income	242,871			235,506			231,839			223,321			228,257
Provision for loan losses	10,500			10,200			11,500			13,700			10,585
Net interest income after provision for loan losses	232,371			225,306			220,339			209,621			217,672
Non-interest income	22,475			19,597			27,058			51,830			32,381
Non-interest expense	109,921			114,992			126,940			106,455			115,450
Income before income tax expense	144,925			129,911			120,457			154,996			134,603
Income tax expense	30,434			28,474			23,997			32,549			27,905
Net income	$	114,491		$	101,437		$	96,460		$	122,447		$	106,698

¹ See a reconciliation of non-GAAP financial measures beginning on page 18.
² Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable Federal tax rate of 21%.
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	12/31/2018			3/31/2019			6/30/2019			9/30/2019			12/31/2019
Balance, beginning of period	$	91,365		$	95,677		$	98,960		$	104,664		$	104,735
Provision for loan losses	10,500			10,200			11,500			13,700			10,585
Loan charge-offs¹:
Traditional commercial & industrial	(452		)	(4,839		)	(754		)	(123		)	(470		)
Asset-based lending	(4,936		)	—			(3,551		)	(9,577		)	(5,856		)
Payroll finance	(21		)	—			(84		)	—			(168		)
Factored receivables	(23		)	(32		)	(27		)	(14		)	(68		)
Equipment financing	(1,060		)	(1,249		)	(1,335		)	(2,711		)	(1,739		)
Commercial real estate	(56		)	(17		)	(238		)	(53		)	(583		)
Multi-family	(140		)	—			—			—			—
Acquisition development & construction	—			—			—			(6		)	—
Residential mortgage	(694		)	(1,085		)	(689		)	(1,984		)	(334		)
Consumer	(335		)	(443		)	(467		)	(241		)	(401		)
Total charge offs	(7,717		)	(7,665		)	(7,145		)	(14,709		)	(9,619		)
Recoveries of loans previously charged-off¹:
Traditional commercial & industrial	404			139			445			136			232
Payroll finance	10			1			3			8			5
Factored receivables	7			121			4			3			9
Equipment financing	604			131			79			422			91
Commercial real estate	185			9			649			187			—
Multi-family	276			103			6			90			105
Residential mortgage	11			1			1			126			5
Consumer	32			243			162			108			90
Total recoveries	1,529			748			1,349			1,080			537
Net loan charge-offs	(6,188		)	(6,917		)	(5,796		)	(13,629		)	(9,082		)
Balance, end of period	$	95,677		$	98,960		$	104,664		$	104,735		$	106,238
Asset Quality Data and Ratios
Non-performing loans (“NPLs”) non-accrual	$	166,400		$	166,746		$	192,109		$	190,011		$	179,051
NPLs still accruing	2,422			3,669			538			955			110
Total NPLs	168,822			170,415			192,647			190,966			179,161
Other real estate owned	19,377			16,502			13,628			13,006			12,189
Non-performing assets (“NPAs”)	$	188,199		$	186,917		$	206,275		$	203,972		$	191,350
Loans 30 to 89 days past due	$	97,201		$	64,260		$	76,364		$	64,756		$	52,880
Net charge-offs as a % of average loans (annualized)	0.12		%	0.14		%	0.12		%	0.27		%	0.17		%
NPLs as a % of total loans	0.88			0.86			0.95			0.92			0.84
NPAs as a % of total assets	0.60			0.62			0.68			0.68			0.63
Allowance for loan losses as a % of NPLs	56.7			58.1			54.3			54.8			59.3
Allowance for loan losses as a % of total loans	0.50			0.50			0.51			0.50			0.50
Special mention loans	$	113,180		$	128,054		$	118,940		$	136,972		$	159,976
Substandard loans	266,047			288,694			311,418			277,975			295,428
Doubtful loans	59			—			—			—			—

¹There were no charge-offs or recoveries on warehouse lending or public sector finance loans during the periods presented. There were no asset-based lending or acquisition development and construction recoveries during the periods presented.

Sterling Bancorp and Subsidiaries

QUARTERLY YIELD TABLE

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



	For the Quarter Ended
	September 30, 2019								December 31, 2019
	Average balance			Interest			Yield/Rate		Average balance			Interest			Yield/Rate
	(Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans	$	7,497,861		$	95,638		5.06	%	$	7,952,476		$	97,221		4.85	%
Commercial real estate (includes multi-family)	9,711,619			118,315			4.83		10,061,625			122,435			4.83
ADC	387,072			5,615			5.76		459,372			5,924			5.12
Commercial loans	17,596,552			219,568			4.95		18,473,473			225,580			4.84
Consumer loans	262,234			3,799			5.75		243,057			3,290			5.37
Residential mortgage loans	2,444,101			31,047			5.08		2,284,419			27,507			4.82
Total gross loans ¹	20,302,887			254,414			4.97		21,000,949			256,377			4.84
Securities taxable	3,189,027			21,977			2.73		2,905,545			20,367			2.78
Securities non-taxable	2,250,859			17,077			3.03		2,159,391			16,494			3.06
Interest earning deposits	304,820			1,802			2.35		573,861			2,423			1.68
FHLB and Federal Reserve Bank Stock	306,801			3,525			4.56		261,693			3,276			4.97
Total securities and other earning assets	6,051,507			44,381			2.91		5,900,490			42,560			2.86
Total interest earning assets	26,354,394			298,795			4.50		26,901,439			298,937			4.41
Non-interest earning assets	3,393,209								3,448,252
Total assets	$	29,747,603							$	30,349,691
Interest bearing liabilities:
Demand and savings ² deposits	$	6,472,626		$	13,033		0.80	%	$	6,974,290		$	13,670		0.78	%
Money market deposits	7,341,822			22,426			1.21		7,681,491			20,867			1.08
Certificates of deposit	2,710,179			12,871			1.88		3,271,674			15,370			1.86
Total interest bearing deposits	16,524,627			48,330			1.16		17,927,455			49,907			1.10
Senior notes	173,750			1,369			3.15		173,601			1,369			3.15
Other borrowings	3,526,009			19,832			2.23		2,496,546			13,112			2.08
Subordinated debentures - Bank	173,081			2,357			5.45		173,142			2,358			5.45
Subordinated debentures - Company	—			—			—		47,118			471			4.00
Total borrowings	3,872,840			23,558			2.41		2,890,407			17,310			2.38
Total interest bearing liabilities	20,397,467			71,888			1.40		20,817,862			67,217			1.28
Non-interest bearing deposits	4,225,258								4,361,642
Other non-interest bearing liabilities	635,711								645,770
Total liabilities	25,258,436								25,825,274
Stockholders’ equity	4,489,167								4,524,417
Total liabilities and stockholders’ equity	$	29,747,603							$	30,349,691
Net interest rate spread ³							3.10	%							3.13	%
Net interest earning assets ⁴	$	5,956,927							$	6,083,577
Net interest margin - tax equivalent				226,907			3.42	%				231,720			3.42	%
Less tax equivalent adjustment				(3,586		)						(3,463		)
Net interest income				223,321								228,257
Accretion income on acquired loans				17,973								19,497
Tax equivalent net interest margin excluding accretion income on acquired loans				$	208,934		3.15	%				$	212,223		3.13	%
Ratio of interest earning assets to interest bearing liabilities	129.2		%						129.2		%

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
	December 31, 2018								December 31, 2019
	Average balance			Interest			Yield/Rate		Average balance			Interest			Yield/Rate
	(Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans	$	6,120,293		$	82,992		5.38	%	$	7,952,476		$	97,221		4.85	%
Commercial real estate (includes multi-family)	9,341,579			112,266			4.77		10,061,625			122,435			4.83
ADC	279,793			4,377			6.21		459,372			5,924			5.12
Commercial loans	15,741,665			199,635			5.03		18,473,473			225,580			4.84
Consumer loans	311,475			4,794			6.11		243,057			3,290			5.37
Residential mortgage loans	4,336,083			55,989			5.16		2,284,419			27,507			4.82
Total gross loans ¹	20,389,223			260,418			5.07		21,000,949			256,377			4.84
Securities taxable	4,133,456			30,114			2.89		2,905,545			20,367			2.78
Securities non-taxable	2,552,533			19,118			3.00		2,159,391			16,494			3.06
Interest earning deposits	291,460			1,063			1.45		573,861			2,423			1.68
FHLB and Federal Reserve Bank stock	343,983			6,499			7.50		261,693			3,276			4.97
Total securities and other earning assets	7,321,432			56,794			3.08		5,900,490			42,560			2.86
Total interest earning assets	27,710,655			317,212			4.54		26,901,439			298,937			4.41
Non-interest earning assets	3,214,626								3,448,252
Total assets	$	30,925,281							$	30,349,691
Interest bearing liabilities:
Demand and savings ² deposits	$	6,617,624		$	11,513		0.69	%	$	6,974,290		$	13,670		0.78	%
Money market deposits	7,880,331			21,204			1.07		7,681,491			20,867			1.08
Certificates of deposit	2,530,226			8,733			1.37		3,271,674			15,370			1.86
Total interest bearing deposits	17,028,181			41,450			0.97		17,927,455			49,907			1.10
Senior notes	183,499			1,600			3.49		173,601			1,369			3.15
Other borrowings	4,360,118			24,921			2.27		2,496,546			13,112			2.08
Subordinated debentures - Bank	172,905			2,355			5.45		173,142			2,358			5.45
Subordinated debentures - Company	—			—			—		47,118			471			4.00
Total borrowings	4,716,522			28,876			2.43		2,890,407			17,310			2.38
Total interest bearing liabilities	21,744,703			70,326			1.28		20,817,862			67,217			1.28
Non-interest bearing deposits	4,324,247								4,361,642
Other non-interest bearing liabilities	430,213								645,770
Total liabilities	26,499,163								25,825,274
Stockholders’ equity	4,426,118								4,524,417
Total liabilities and stockholders’ equity	$	30,925,281							$	30,349,691
Net interest rate spread ³							3.26	%							3.13	%
Net interest earning assets ⁴	$	5,965,952							$	6,083,577
Net interest margin - tax equivalent				246,886			3.53	%				231,720			3.42	%
Less tax equivalent adjustment				(4,015		)						(3,463		)
Net interest income				242,871								228,257
Accretion income on acquired loans				27,016								19,497
Tax equivalent net interest margin excluding accretion income on acquired loans				$	219,870		3.15	%				$	212,223		3.13	%
Ratio of interest earning assets to interest bearing liabilities	127.4		%						129.2		%

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 21.
	As of and for the Quarter Ended
	12/31/2018			3/31/2019			6/30/2019			9/30/2019			12/31/2019

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

Total assets	$	31,383,307		$	29,956,607		$	30,237,545		$	30,077,665		$	30,586,497
Goodwill and other intangibles	(1,742,578		)	(1,782,533		)	(1,777,748		)	(1,772,963		)	(1,793,846		)
Tangible assets	29,640,729			28,174,074			28,459,797			28,304,702			28,792,651
Stockholders’ equity	4,428,853			4,419,223			4,459,158			4,520,967			4,530,113
Preferred stock	(138,423		)	(138,218		)	(138,011		)	(137,799		)	(137,581		)
Goodwill and other intangibles	(1,742,578		)	(1,782,533		)	(1,777,748		)	(1,772,963		)	(1,793,846		)
Tangible common stockholders’ equity	2,547,852			2,498,472			2,543,399			2,610,205			2,598,686
Common stock outstanding at period end	216,227,852			209,560,824			205,187,243			202,392,884			198,455,324
Common stockholders’ equity as a % of total assets	13.67		%	14.29		%	14.29		%	14.57		%	14.36		%
Book value per common share	$	19.84		$	20.43		$	21.06		$	21.66		$	22.13
Tangible common equity as a % of tangible assets	8.60		%	8.87		%	8.94		%	9.22		%	9.03		%
Tangible book value per common share	$	11.78		$	11.92		$	12.40		$	12.90		$	13.09

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	$	4,426,118		$	4,415,449		$	4,423,910		$	4,489,167		$	4,524,417
Average preferred stock	(138,523		)	(138,348		)	(138,142		)	(137,850		)	(137,698		)
Average goodwill and other intangibles	(1,745,339		)	(1,756,506		)	(1,780,885		)	(1,776,118		)	(1,780,102		)
Average tangible common stockholders’ equity	2,542,256			2,520,595			2,504,883			2,575,199			2,606,617
Net income available to common	112,501			99,448			94,473			120,465			104,722
Net income, if annualized	446,335			403,317			378,930			477,932			415,473
Reported return on avg tangible common equity	17.56		%	16.00		%	15.13		%	18.56		%	15.94		%
Adjusted net income (see reconciliation on page 19)	$	116,458		$	105,902		$	105,124		$	105,629		$	108,855
Annualized adjusted net income	462,034			429,492			421,651			419,072			431,870
Adjusted return on average tangible common equity	18.17		%	17.04		%	16.83		%	16.27		%	16.57		%

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

Average assets	$	30,925,281		$	30,742,943		$	29,666,951		$	29,747,603		$	30,349,691
Average goodwill and other intangibles	(1,745,339		)	(1,756,506		)	(1,780,885		)	(1,776,118		)	(1,780,102		)
Average tangible assets	29,179,942			28,986,437			27,886,066			27,971,485			28,569,589
Net income available to common	112,501			99,448			94,473			120,465			104,722
Net income, if annualized	446,335			403,317			378,930			477,932			415,473
Reported return on average tangible assets	1.53		%	1.39		%	1.36		%	1.71		%	1.45		%
Adjusted net income (see reconciliation on page 19)	$	116,458		$	105,902		$	105,124		$	105,629		$	108,855
Annualized adjusted net income	462,034			429,492			421,651			419,072			431,870
Adjusted return on average tangible assets	1.58		%	1.48		%	1.51		%	1.50		%	1.51		%

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 21.
	As of and for the Quarter Ended
	12/31/2018			3/31/2019			6/30/2019			9/30/2019			12/31/2019
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio⁴:

Net interest income	$	242,871		$	235,506		$	231,839		$	223,321		$	228,257
Non-interest income	22,475			19,597			27,058			51,830			32,381
Total revenue	265,346			255,103			258,897			275,151			260,638
Tax equivalent adjustment on securities	4,015			3,949			3,834			3,586			3,463
Net loss (gain) on sale of securities	4,886			13,184			528			(6,882		)	76
(Gain) loss on termination of pension plan	—			—			—			(12,097		)	280
Net (gain) on sale of residential mtg loans	—			(8,313		)	—			—			—
Adjusted total revenue	274,247			263,923			263,259			259,758			264,457
Non-interest expense	109,921			114,992			126,940			106,455			115,450
Charge for asset write-downs, systems integration, retention and severance	—			(3,344		)	—			—			(5,133		)
Impairment related to financial centers and real estate consolidation strategy	—			—			(14,398		)	—			—
Gain on extinguishment of borrowings	172			46			—			—			—
Amortization of intangible assets	(5,865		)	(4,826		)	(4,785		)	(4,785		)	(4,785		)
Adjusted non-interest expense	104,228			106,868			107,757			101,670			105,532
Reported operating efficiency ratio	41.4		%	45.1		%	49.0		%	38.7		%	44.3		%
Adjusted operating efficiency ratio	38.0			40.5			40.9			39.1			39.9

The following table shows the reconciliation of reported net income (GAAP) and earnings per share to adjusted net income available to common stockholders (non-GAAP) and adjusted diluted earnings per share(non-GAAP)⁵:

Income before income tax expense	$	144,925		$	129,911		$	120,457		$	154,996		$	134,603
Income tax expense	30,434			28,474			23,997			32,549			27,905
Net income (GAAP)	114,491			101,437			96,460			122,447			106,698
Adjustments:
Net loss (gain) on sale of securities	4,886			13,184			528			(6,882		)	76
(Gain) loss on termination of pension plan	—			—			—			(12,097		)	280
Net (gain) on sale of residential mtg loans	—			(8,313		)	—			—			—
(Gain) on extinguishment of debt	(172		)	(46		)	—			—			—
Impairment related to financial centers and real estate consolidation strategy	—			—			14,398			—			—
Charge for asset write-downs, systems integration, retention and severance	—			3,344			—			—			5,133
Amortization of non-compete agreements and acquired customer list intangible assets	295			242			200			200			200
Total pre-tax adjustments	5,009			8,411			15,126			(18,779		)	5,689
Adjusted pre-tax income	149,934			138,322			135,583			136,217			140,292
Adjusted income tax expense	31,486			30,431			28,472			28,606			29,461
Adjusted net income (non-GAAP)	118,448			107,891			107,111			107,611			110,831
Preferred stock dividend	1,990			1,989			1,987			1,982			1,976
Adjusted net income available to common stockholders (non-GAAP)	$	116,458		$	105,902		$	105,124		$	105,629		$	108,855

Weighted average diluted shares	222,769,369			213,505,842			207,376,239			203,566,582			200,252,542
Reported diluted EPS (GAAP)	$	0.51		$	0.47		$	0.46		$	0.59		$	0.52
Adjusted diluted EPS (non-GAAP)	0.52			0.50			0.51			0.52			0.54

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 21.
	For the Year ended December 31,
	2018			2019
The following table shows the reconciliation of reported net income (GAAP) and earnings per share to adjusted net income available to common stockholders (non-GAAP) and adjusted diluted earnings per share (non-GAAP)⁵:
Income before income tax expense	$	566,230		$	539,966
Income tax expense	118,976			112,925
Net income (GAAP)	447,254			427,041

Adjustments:
Net loss on sale of securities	10,788			6,905
Net (gain) on termination of pension plan	—			(11,817		)
Net (gain) on sale of fixed assets	(11,800		)	—
Net (gain) on sale or residential mortgage loans	—			(8,313		)
Impairment related to financial centers and real estate consolidation strategy	—			14,398
Charge for asset write-downs, systems integration, retention and severance	13,132			8,477
(Gain) on extinguishment of borrowings	(172		)	(46		)
Amortization of non-compete agreements and acquired customer list intangible assets	1,177			840
Total pre-tax adjustments	13,125			10,444
Adjusted pre-tax income	579,355			550,410
Adjusted income tax expense	121,732			115,586
Adjusted net income (non-GAAP)	$	457,623		$	434,824
Preferred stock dividend	7,978			7,933
Adjusted net income available to common stockholders (non-GAAP)	$	449,645		$	426,891

Weighted average diluted shares	224,816,996			206,131,628
Diluted EPS as reported (GAAP)	$	1.95		$	2.03
Adjusted diluted EPS (non-GAAP)	2.00			2.07

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 below.
	For the Year ended December 31,
	2018			2019
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	$	4,344,096		$	4,463,605
Average preferred stock	(138,829		)	(138,007		)
Average goodwill and other intangibles	(1,746,687		)	(1,773,475		)
Average tangible common stockholders’ equity	2,458,580			2,552,123
Net income available to common stockholders	$	439,276		$	419,108
Reported return on average tangible common equity	17.87		%	16.42		%
Adjusted net income available to common stockholders (see reconciliation on page #SectionPage#)	$	449,645		$	426,891
Adjusted return on average tangible common equity	18.29		%	16.73		%
The following table shows the reconciliation of reported return on avg tangible assets and adjusted return on avg tangible assets³:
Average assets	$	30,746,916		$	30,138,390
Average goodwill and other intangibles	(1,746,687		)	(1,773,475		)
Average tangible assets	29,000,229			28,364,915
Net income available to common stockholders	439,276			419,108
Reported return on average tangible assets	1.51		%	1.48		%
Adjusted net income available to common stockholders (see reconciliation on page 20)	$	449,645		$	426,891
Adjusted return on average tangible assets	1.55		%	1.51		%
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio⁴:
Net interest income	$	967,403		$	918,923
Non-interest income	103,197			130,865
Total revenues	1,070,600			1,049,788
Tax equivalent adjustment on securities	16,231			14,832
Net loss on sale of securities	10,788			6,905
Net (gain) on termination of pension plan	—			(11,817		)
Net (gain) on sale of fixed assets	(11,800		)	—
(Gain) on sale of residential mortgage loans	—			(8,313		)
Adjusted total net revenue	1,085,819			1,051,395
Non-interest expense	458,370			463,837
Charge for asset write-downs, retention and severance	(13,132		)	(8,477		)
Impairment related to financial centers and real estate consolidation strategy	—			(14,398		)
Gain on extinguishment of borrowings	172			46
Amortization of intangible assets	(23,646		)	(19,181		)
Adjusted non-interest expense	$	421,764		$	421,827
Reported operating efficiency ratio	42.8		%	44.2		%
Adjusted operating efficiency ratio	38.8		%	40.1		%

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.

Sterling Bancorp and Subsidiaries

NON-GAAP FINANCIAL MEASURES

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

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 available to common stockholders 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.