Docoh
Loading...

STL Sterling Bancorp.

Filed: 19 Apr 21, 6:50am


earningsreleasea011a.jpg
FOR IMMEDIATE RELEASESTERLING BANCORP CONTACT:
April 19, 2021Emlen Harmon, Managing Director - Investor Relations
212.309.7646
http://www.sterlingbancorp.com
Sterling Bancorp announces results for the first quarter of 2021 with diluted earnings per share available to common stockholders of $0.50 (as reported) and $0.51 (as adjusted).
Key Performance Highlights
GAAP EPS increased $0.12 and adjusted EPS increased $0.02 over the linked quarter.
Net interest margin excluding accretion income1 of 3.30%, an increase of five basis points (“bps”) over the linked quarter.
Cost of funding liabilities decreased by six bps to 27 bps; earning asset yields decreased by one bp to 3.68%.
Adjusted PPNR excluding accretion income1, 2 of $123.9 million; declined $6.4 million, or 4.9%, over the linked quarter.
Total deposits were $23.8 billion, an increase of 5.7% over a year ago.
Total core deposits were $22.2 billion, an increase of 3.4% over a year ago.
Total commercial loans were $19.5 billion, an increase of 0.4% over a year ago.
Average commercial loans were $19.6 billion, a 3.9% increase over the first quarter of 2020.
Adjusted non-interest expense1 was $110.6 million, adjusted operating efficiency ratio3 was 44.3%.
NPLs increased by $1.5 million to $168.6 million; ACL / portfolio loans of 1.53% and ACL / NPLs of 191.7%.
TCE / TA1 was 9.63% and tangible book value per common share1 was $14.08, an increase of 9.7% over a year ago.
Declared second quarter dividend per common share of $0.07.
Repurchased 1.2 million shares in the first quarter at a cost of $27.3 million and an average of $22.12 per share.
Completed previously announced redemption of subordinated debt - Bank on April 1, 2021.
Announced Banking as a Service partnerships with Google Plex, Bright Fi and Rho Technologies.
Results for the Three Months ended March 31, 2021 vs. March 31, 2020
($ in thousands except per share amounts)GAAP / As Reported
Non-GAAP / As Adjusted1
March 31, 2020March 31, 2021Change % / bpsMarch 31, 2020March 31, 2021Change % / bps
Total assets$30,335,036 $29,914,282 (1.4)%$30,335,036 $29,914,282 (1.4)%
Total portfolio loans, gross21,709,957 21,151,973 (2.6)21,709,957 21,151,973 (2.6)
Total deposits22,558,280 23,841,718 5.7 22,558,280 23,841,718 5.7 
PPNR1, 2
144,385 132,105 (8.5)126,203 123,895 (1.8)
Net income available to common12,171 97,187 698.5 (3,124)97,603 NM
Diluted EPS available to common0.06 0.50 733.3 (0.02)0.51 NM
Net interest margin3.16 %3.38 %22 3.21 %3.43 %22 
Tangible book value per common share1
$12.83 $14.08 9.7 $12.83 $14.08 9.7 
Results for the Three Months ended March 31, 2021 vs. December 31, 2020
($ in thousands except per share amounts)GAAP / As Reported
Non-GAAP / As Adjusted1
December 31, 2020March 31, 2021Change % / bpsDecember 31, 2020March 31, 2021Change % / bps
PPNR1, 2
$122,474 $132,105 7.9 $130,257 $123,895 (4.9)
Net income available to common74,457 97,187 30.5 94,323 97,603 3.5 
Diluted EPS available to common0.38 0.50 31.6 0.49 0.51 4.1 
Net interest margin3.33 %3.38 %3.38 %3.43 %
Operating efficiency ratio3
52.1 47.2 (490)43.0 44.3 130 
Allowance for credit losses (“ACL”) - loans$326,100 $323,186 (0.9)$326,100 $323,186 (0.9)
ACL to portfolio loans1.49 %1.53 %1.49 %1.53 %
ACL to NPLs195.2 191.7 (4)195.2 191.7 (4)
Tangible book value per common share1
$13.87 $14.08 1.5 $13.87 $14.08 1.5 


1. Non-GAAP / as adjusted measures are defined in the non-GAAP tables beginning on page 20.
2. PPNR represents pretax pre-provision net revenue. PPNR and PPNR excluding accretion income are non-GAAP measures and are measured as net interest income plus non-interest income less operating expenses before tax.
3. Operating efficiency ratio is a non-GAAP measure. See page 23 for an explanation of the operating efficiency ratio.

120


PEARL RIVER, N.Y. – April 19, 2021 – 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, 2021. Net income available to common stockholders for the three months ended March 31, 2021 was $97.2 million, or $0.50 per diluted share, compared to net income available to common stockholders of $74.5 million, or $0.38 per diluted share, for the linked quarter ended December 31, 2020, and net income available to common stockholders of $12.2 million, or $0.06 per diluted share, for the three months ended March 31, 2020.

Chief Executive Officer’s Comments
Jack Kopnisky, President and Chief Executive Officer, commented: “We are pleased with our results for the first quarter of 2021. While the economic environment remains challenging, the dedication of our colleagues, resilience of our business model and high quality of our client relationships is evident in our operating results. We continue to prioritize supporting our clients, colleagues and communities, and delivered strong profitability and substantial growth in tangible capital and tangible book value per common share.

“We opened 2021 with a strong first quarter. Our adjusted net income available to common stockholders was $97.6 million, or $0.51 per diluted share, which was an increase of two cents per share over the linked quarter. We saw improvements across many of our key profitability metrics, delivering adjusted return on average tangible assets of 1.42% and adjusted return on average tangible common equity of 14.6%. Adjusted PPNR excluding accretion income was $123.9 million, a decrease of 4.9% relative to the linked quarter, largely as a result of two fewer calendar days in the first quarter. Although loan origination activity continued to rebound in the first quarter of 2021, prepayment activity in certain portfolios has remained elevated, which impacted our earning assets balances. At March 31, 2021, our tangible book value per common share was $14.08, an increase of 9.7% over a year ago.

“We benefit from diversified asset origination capabilities allowing us to allocate capital to those business segments that deliver the most attractive risk-adjusted returns. We have a solid pipeline and anticipate stronger loan growth in the second quarter of 2021, driven by our C&I, CRE, and public sector businesses. Total commercial loans grew to $19.5 billion, an increase of 0.4% over the same period a year ago. At March 31, 2021, our total core deposits were $22.2 billion, which represented growth of $733.5 million, or 3.4%, over the linked quarter. Crucially, we continue to effectively manage our interest rate margin by substantially reducing our funding costs and protecting our earning asset yields. Our net interest income was $217.9 million in the first quarter and our tax equivalent net interest margin excluding accretion income was 3.30%, an increase of 5 basis points over the linked quarter.

“In our fee-based businesses, client activity and transaction volumes, while still below pre-pandemic levels, are beginning to recover. In the first quarter, total non-interest income was $32.4 million, a decline of $1.6 million versus the linked quarter, which included a gain of $3.7 million on the sale of commercial loans originated pursuant to the Paycheck Protection Program (“PPP”). Relative to the linked quarter, we saw growth in fee income in our loan syndications and cash management businesses and an increase in revenue from our customer derivatives businesses.

“In the first quarter, our adjusted non-interest expenses were $110.6 million and our adjusted operating efficiency ratio was 44.3%. We continue to invest in our technology infrastructure and digital capabilities, including in our digital banking offering Brio Direct, and in our Banking as a Service business. In the last 30 days, we announced a collaboration with Google to offer digital checking and savings accounts through the Google Plex platform, and entered into alliances with Rho Technologies and Bright Fi to offer a variety of banking services. We are also investing in our core business, to drive organic growth in key, high growth potential commercial verticals that offer attractive risk-adjusted returns, including by adding resources to our syndication, innovation finance, treasury management and small business teams. We are investing for the future, and are confident that these investments will drive scalable and sustainable growth in our business and earnings.

“Asset quality performance was in line with our expectations. As of March 31, 2021, the majority of our clients on loan payment deferrals had resumed making payments; with total loans on deferral decreasing $77.9 million to $130.5 million, or 0.6% of total portfolio loans. Total net charge-offs in the first quarter were $12.9 million, which included charges associated with the sale of $70.0 million of commercial loans, most of which were rated criticized or classified. As of March 31, 2021, our allowance for credit losses - portfolio loans was $323.2 million, or 1.53% of total loans and 191.7% of non-performing loans, reflecting an improving macro economic outlook but also our conservative approach to reserve releases as we continue to navigate through the credit cycle.

“We have a strong capital position. Our tangible common equity to tangible assets ratio increased eight basis points in the first quarter to 9.63% and our Tier 1 leverage ratio was 10.50%. We declared our regular dividend of $0.07 on our common stock, payable on May 14, 2021 to holders of record as of April 30, 2021. We restarted our stock repurchase program in the fourth quarter of 2020, repurchased 1.2 million shares in the first quarter of 2021 and have repurchased nearly 3.2 million shares since resuming our stock repurchase program. The program had 13.5 million shares available for repurchase as of March 31, 2021.

“Finally, I would like to thank our clients, shareholders, and colleagues, all of whom have exhibited extraordinary resilience to come through an exceptionally challenging period. I remain confident that the strength and diversification of our business model, our continued investments in technology and the dedication and commitment of our colleagues, positions us to drive
2


continued and sustainable growth.”

Reconciliation of GAAP Results to Adjusted Results (non-GAAP)
The Company’s GAAP net income available to common stockholders of $97.2 million, or $0.50 per diluted share, for the first quarter of 2021, included the following items:
a pre-tax gain of $719 thousand on the sale of investment securities;
a pre-tax charge of $633 thousand related to the sale of two financial centers and the exit of two back office locations; and
the pre-tax amortization of non-compete agreements and acquired customer list intangible assets of $148 thousand.
Excluding the impact of these items, adjusted net income available to common stockholders was $97.6 million, or $0.51 per diluted share. For the three months ended March 31, 2021, our effective income tax rate was 18.8%, which was comprised of an estimated effective tax rate for 2021 of 18.5% and the impact discrete items related to executive compensation and the vesting of stock-based compensation awards. Our effective tax rate for purposes of reporting for adjusted earnings was 13.5% and 12.5% for the three months ended December 31, 2020 and March 31, 2020, respectively.
Non-GAAP financial measures include the terms “adjusted” or excluding”. See the reconciliation of the Company’s non-GAAP financial measures beginning on page 20.
Net Interest Income and Margin
($ in thousands)For the three months endedChange % / bps
March 31, 2020December 31, 2020March 31, 2021Y-o-YLinked Qtr
Interest and dividend income$273,527 $242,610 $233,847 (14.5)%(3.6)%
Interest expense61,755 20,584 15,933 (74.2)(22.6)
Net interest income$211,772 $222,026 $217,914 2.9 (1.9)
Accretion income on acquired loans$10,686 $8,560 $8,272 (22.6)%(3.4)%
Yield on loans4.47 %3.90 %3.92 %(55)
Tax equivalent yield on investment securities4
2.96 2.94 3.02 
Tax equivalent yield on interest earning assets4
4.13 3.69 3.68 (45)(1)
Cost of total deposits0.81 0.22 0.15 (66)(7)
Cost of interest bearing deposits1.00 0.29 0.20 (80)(9)
Cost of borrowings2.49 3.35 3.97 148 62 
Cost of interest bearing liabilities1.19 0.43 0.34 (85)(9)
Total cost of funding liabilities5
0.98 0.33 0.27 (71)(6)
Tax equivalent net interest margin6
3.21 3.38 3.43 22 
Average loans, including loans held for sale$21,206,177 $21,879,511 $21,294,550 0.4 %(2.7)%
Average commercial loans18,820,094 19,992,074 19,553,823 3.9 (2.2)
Average investment securities5,046,573 4,155,784 4,054,978 (19.6)(2.4)
Average cash balances489,691 331,587 648,178 32.4 95.5 
Average total interest earning assets26,980,261 26,522,991 26,149,732 (3.1)(1.4)
Average deposits and mortgage escrow22,692,568 23,849,187 23,546,928 3.8 (1.3)

4. Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable federal tax rate of 21%.
5. Includes 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.

First quarter 2021 compared with first quarter 2020
Net interest income was $217.9 million for the quarter ended March 31, 2021, an increase of $6.1 million compared to the first quarter of 2020. This was mainly due to a decline in interest expense in line with decreases in market rates of interest and the

3


repayment of higher cost FHLB borrowings. Other key components of changes in net interest income were the following:
The tax equivalent yield on interest earning assets decreased 45 basis points to 3.68%, in line with period over period decreases in market rates of interest.
The decline in market interest rates drove a decrease in our yield on loans, from 4.47% in the first quarter of 2020 to 3.92% in the first quarter of 2021.
Accretion income on acquired loans was $8.3 million in the first quarter of 2021, compared to $10.7 million in the first quarter of 2020.
Average investment securities were $4.1 billion, or 15.5%, of average total interest earning assets for the first quarter of 2021 compared to $5.0 billion, or 18.7%, of average total interest earning assets for the first quarter of 2020. The tax equivalent yield on investment securities was 3.02% compared to 2.96% for the three months ended March 31, 2020, mainly as a result of an increase in corporate securities held in the portfolio.
In the first quarter of 2021, strong growth in deposits drove increases in average cash balances to $648.2 million compared to $489.7 million in the first quarter of 2020.
Total interest expense was $15.9 million, a decline of $45.8 million compared to the first quarter of 2020. This was mainly due to lower interest expense paid on deposits and short-term borrowings and the impact of repayment of senior notes that matured in the second quarter of 2020.
The cost of total deposits was 15 basis points for the first quarter of 2021 compared to 81 basis points for the same period a year ago, in line with repricing of deposits in response to the low interest rate environment.
The cost of borrowings was 3.97% for the first quarter of 2021 compared to 2.49% for the same period a year ago. The increase was mainly due to the change in composition of our borrowings, with average borrowings of $721.6 million in the current quarter being comprised of $86.0 million in short-term borrowings and $635.6 million in higher coupon longer term borrowings, while for the prior year quarter average borrowings of $2.6 billion were comprised of predominately shorter term borrowings.
The total cost of interest bearing liabilities was 0.34% for the first quarter of 2021 compared to 1.19% for the same period a year ago. The decline was due to both changes in market rates of interest and changes in funding mix.
Average deposits and mortgage escrow increased $854.4 million during the first quarter of 2021 compared to the same period a year ago, due to growth generated by our commercial banking teams and financial centers.

First quarter 2021 compared with linked quarter ended December 31, 2020
Net interest income decreased $4.1 million for the quarter ended March 31, 2021 compared to the linked quarter, mainly due to the impact of the two fewer days of interest income recorded in the first quarter, as well as the impact of continued prepayment activity in certain portfolios. Other key components of the changes in net interest income were the following:
The average balance of commercial loans decreased $438.3 million, and the average balance of residential mortgage loans declined $133.3 million.
The tax equivalent net interest margin was 3.43% compared to 3.38% in the linked quarter. Excluding accretion income on acquired loans, tax equivalent net interest margin increased five basis points to 3.30%.
The yield on loans was 3.92% compared to 3.90% for the linked quarter. The increase was mainly due to prepayment fees on multi-family and other loans. Accretion income on acquired loans decreased $288 thousand to $8.3 million for the first quarter of 2021.
The remaining balance of PPP loans in the portfolio was $110.1 million at the end of the quarter, and all loans are in process of being forgiven. We recognized $367 thousand in PPP loan fees as interest income in the first quarter of 2021, compared to $846 thousand in the linked quarter. The decline was due to lower levels of repayments.
The tax equivalent yield on interest earning assets was 3.68% compared to 3.69% in the linked quarter, primarily as a result of an increase in the amount of cash held as a proportion of total earnings assets.
The tax equivalent yield on investment securities was 3.02% compared to 2.94% for the linked quarter. The increase in yield was mainly due to an increase in corporate securities.
The cost of total deposits decreased seven basis points to 15 basis points, mainly due to deposit repricing in response to the low interest rate environment.
Total interest expense decreased $4.7 million as a result of continued repricing of deposits and the impact of repayment of higher cost FHLB borrowings.
The total cost of borrowings increased 62 basis points to 3.97%, mainly due to the change in mix of borrowings with shorter term borrowings representing a smaller percentage of total borrowings.

4


Average deposits and mortgage escrow decreased by $302.3 million and average borrowings decreased by $130.4 million relative to the linked quarter.

Non-interest Income
($ in thousands)For the three months endedChange %
March 31, 2020December 31, 2020March 31, 2021Y-o-YLinked Qtr
Deposit fees and service charges$6,622 $5,975 $6,563 (0.9)%9.8 %
Accounts receivable management / factoring commissions and other related fees5,538 6,498 5,426 (2.0)%(16.5)%
Bank owned life insurance (“BOLI”)5,018 4,961 4,955 (1.3)%(0.1)%
Loan commissions and fees11,024 13,220 10,477 (5.0)%(20.7)%
Investment management fees1,847 1,700 1,852 0.3 %8.9 %
Net gain (loss) on sale of securities8,412 (111)719 (91.5)%NM
Net gain on security calls4,880 — — NMNM
Other3,985 1,678 2,364 (40.7)%40.9 %
  Total non-interest income47,326 33,921 32,356 (31.6)%(4.6)%
Net gain (loss) on sale of securities8,412 (111)719 (91.5)%NM
  Adjusted non-interest income$38,914 $34,032 $31,637 (18.7)%(7.0)%

First quarter 2021 compared with first quarter 2020
Adjusted non-interest income decreased $7.3 million in the first quarter of 2021 to $31.6 million, compared to $38.9 million in the same quarter last year. The decrease was mainly due to net gains realized on security calls in the first quarter of 2020 that did not recur, as well as from the impact of lower transactional volume in our derivatives business. In the first quarter of 2020, we realized a gain of $8.4 million on the sale of available for sale securities, which we sold to fund commercial loan growth.
Loan commissions and fees in the first quarter of 2020 included a $2.8 million gain on sale of small business equipment finance loans, which did not recur in 2021. In the first quarter of 2021, loan commissions and fees included $1.8 million in fees in connection with second round PPP loans originated by a third party in respect of which we earned a referral fee. A total of 1,118 loans closed with a principal amount of $160.9 million.
First quarter 2021 compared with linked quarter ended December 31, 2020
Adjusted non-interest income decreased approximately $2.4 million relative to the linked quarter to $31.6 million primarily as a result of a gain on sale of PPP loans of $3.7 million in the linked quarter. Treasury management fees, swap fees and net mortgage loan servicing fees increased versus the linked quarter.

In the first quarter of 2021, we realized a gain of $719 thousand on sale of securities, compared to a loss of $111 thousand in the fourth quarter of 2020.


5


Non-interest Expense
($ in thousands)For the three months endedChange % / bps
March 31, 2020December 31, 2020March 31, 2021Y-o-YLinked Qtr
Compensation and benefits$54,876 $56,563 $58,087 5.9 %2.7 %
Stock-based compensation plans6,006 5,222 6,617 10.2 26.7 
Occupancy and office operations15,199 14,742 14,515 (4.5)(1.5)
Information technology8,018 9,559 9,246 15.3 (3.3)
Amortization of intangible assets4,200 4,200 3,776 (10.1)(10.1)
FDIC insurance and regulatory assessments3,206 2,865 3,230 0.7 12.7 
Other real estate owned (“OREO”), net52 283 (68)NMNM
Impairment related to financial centers and real estate consolidation strategy— 13,311 633 NMNM
Loss on extinguishment of borrowings744 2,749 — NMNM
Other expenses22,412 23,979 22,129 (1.3)(7.7)
Total non-interest expense$114,713 $133,473 $118,165 3.0 (11.5)
Full time equivalent employees (“FTEs”) at period end1,619 1,460 1,457 (10.0)(0.2)
Operating efficiency ratio, as reported7
44.3 %52.1 %47.2 %290 (490)
Operating efficiency ratio, as adjusted7
42.4 43.0 44.3 190 130 
7 See a reconciliation of non-GAAP financial measures beginning on page 20.

First quarter 2021 compared with first quarter 2020
Total non-interest expense increased $3.5 million relative to the first quarter of 2020. Key components of the change in non-interest expense between the periods include the following:
Compensation and benefits increased $3.2 million mainly due to a higher bonus compensation accrual and an increase in medical costs incurred in the first quarter.
Occupancy and office operations expense decreased $684 thousand, mainly due to the consolidation of financial centers and other back-office locations. In the first quarter of 2021, we sold two financial centers, and exited two leases for financial center and back office location.
Information technology expense increased $1.2 million mainly due to the amortization of investments related to various back-office automation and digital banking initiatives.
Impairment related to financial centers and our real estate consolidation strategy represents loss on sale of financial center and other locations and early termination payments on leased locations.
First quarter 2021 compared with linked quarter ended December 31, 2020
Total non-interest expense decreased $15.3 million to $118.2 million. Key components of the change in non-interest expense include the following:
Compensation and benefits increased $1.5 million to $58.1 million in the first quarter of 2021. The increase was mainly due to payroll taxes and employer contributions to benefit plans, which are usually higher in the first quarter of the year compared to other quarters.
Loss on extinguishment of borrowings in the linked quarter was incurred in connection with the repayment of $250.0 million of FHLB advances and $30.0 million of subordinated notes - Bank.
Other expenses decreased by $1.9 million versus the linked quarter, mainly due to lower charitable contributions and other donations and lower write-downs associated with repossessed assets related to foreclosed equipment finance loans.
Taxes
We recorded income tax expense of $23.0 million in the first quarter of 2021, compared to income tax expense of $18.6 million in the linked quarter and income tax benefit of $8.0 million in the prior year quarter. For the three months ended March 31, 2021, we recorded income tax expense at an estimated effective income tax rate of 18.8% compared to 19.5% for the three months ended December 31, 2020.


6


Key Balance Sheet Highlights as of March 31, 2021
($ in thousands)As ofChange % / bps
March 31, 2020December 31, 2020March 31, 2021Y-o-YLinked Qtr
Total assets$30,335,036 $29,820,138 $29,914,282 (1.4)%0.3 %
Total portfolio loans, gross21,709,957 21,848,409 21,151,973 (2.6)(3.2)
Commercial & industrial (“C&I”) loans8,483,474 9,160,268 8,451,615 (0.4)(7.7)
Commercial real estate loans (including multi-family)10,399,566 10,238,650 10,421,131 0.2 1.8 
Acquisition, development and construction (“ADC”) loans524,714 642,943 618,295 17.8 (3.8)
Total commercial loans19,407,754 20,041,861 19,491,041 0.4 (2.7)
Residential mortgage loans2,077,534 1,616,641 1,486,597 (28.4)(8.0)
Loan portfolio composition:
Commercial & industrial (“C&I”) loans39.1 %41.9 %40.0 %90 (190)
Commercial real estate loans (including multi-family)47.9 46.9 49.3 140 240 
Acquisition, development and construction (“ADC”) loans2.4 2.9 2.9 50 — 
Residential and consumer10.6 8.3 7.8 (280)(50)
BOLI$616,648 $629,576 $630,430 2.2 0.1 
Core deposits9
20,704,023 21,482,525 22,216,035 7.3 3.4 
Total deposits22,558,280 23,119,522 23,841,718 5.7 3.1 
Municipal deposits (included in core deposits)2,091,259 1,648,945 2,047,349 (2.1)24.2 
Investment securities, net4,614,513 4,039,456 4,241,457 (8.1)5.0 
Investment securities, net to earning assets17.2 %15.4 %16.5 %(70)110 
Total borrowings$2,598,698 $1,321,714 $667,499 (74.3)(49.5)
Loans to deposits96.2 %94.5 %88.7 %(750)(580)
Core deposits9 to total deposits
91.8 92.9 93.2 140 30 
9 Core 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 related to balance sheet items as of March 31, 2021 were the following:
C&I loans and commercial real estate loans represented 89.3% of our loan portfolio at March 31, 2021 compared to 87.0% a year ago. C&I loans includes traditional C&I, PPP, asset-based lending, payroll finance, warehouse lending, factored receivables, equipment financing and public sector finance loans.
A slowdown in mortgage refinance activity drove a $558.7 million decline in our mortgage warehouse lending balance at the end of the first quarter and was the primary driver of the decline in total portfolio, total commercial loans and total portfolio balance.
In the first quarter of 2021, we sold $70.0 million of commercial real estate loan which were mostly rated substandard or special mention. We recorded charge-offs of $5.9 million against the allowance for credit losses - loans to reduce the carrying value of loans to fair value prior to completing the transaction.
In the fourth quarter of 2020, we sold $464.2 million of PPP loans, which included the majority of such loans for which the forgiveness process had not yet been started.
Residential mortgage loans were $1.5 billion at March 31, 2021, a decline of $130.0 million from the linked quarter and a decline of $590.9 million from the same period a year ago. The decline was mainly due to repayments, and as compared to the same period a year ago also reflected our 2020 sale of non-performing residential mortgage loans with a net book value of $53.2 million.
Core deposits at March 31, 2021 were $22.2 billion an increase of $733.5 million compared to December 31, 2020, and an increase of $1.5 billion compared to March 31, 2020. The increase in the first quarter included increases primarily in interest bearing and non-interest bearing transaction accounts, money market accounts and municipal deposits. Certificate of deposit accounts declined $273.8 million as higher costing balances matured and were not renewed. Compared to

7


March 31, 2020, certificate of deposit accounts declined $920.3 million. The growth in core and total deposits is a result both of our successful deposit gathering strategies as well as the increase in liquidity in the banking system overall, from government stimulus and other measures implemented in response to the economic downturn brought about by the pandemic.
Municipal deposits at March 31, 2021 were $2.0 billion, an increase of $398.4 million relative to December 31, 2020. Municipal deposits generally increase in the first quarter of the year from tax collections by local municipalities.
Investment securities, net increased by $202.0 million from December 31, 2020 and decreased $373.1 million from March 31, 2020, representing 16.5% of earning assets at March 31, 2021. In the first quarter of 2021 the increase in investment securities included the purchase of US Treasury and corporate securities in response to the significant levels of excess liquidity generated by deposit inflows and the contraction in our loan portfolio.
Total borrowings at March 31, 2021 were $667.5 million, a decrease of $654.2 million relative to December 31, 2020 and a decrease of $1.9 billion relative to March 31, 2020, in both cases largely as a result of the repayments of higher costing FHLB borrowings.
On April 1, 2021, we redeemed the remaining balance of subordinated notes - Bank with a principal balance of $145.0 million at March 31, 2021 and coupon interest rate of 5.25%.

Credit Quality
($ in thousands)For the three months endedChange % / bps
March 31, 2020December 31, 2020March 31, 2021Y-o-YLinked Qtr
Provision for credit losses - loans$136,577 $27,500 $10,000 (92.7)%(63.6)%
Net charge-offs6,955 27,343 12,914 85.7 (52.8)
Allowance for credit losses (“ACL”) - loans326,444 326,100 323,186 (1.0)(0.9)
Loans 30 to 89 days past due, accruing69,769 72,912 42,165 (39.6)(42.2)
Non-performing loans253,750 167,059 168,557 (33.6)0.9 
Annualized net charge-offs to average loans0.13 %0.50 %0.25 %12 (25)
Special mention loans$132,356 $461,458 $494,452 273.6 7.1 
Substandard loans402,393 528,760 590,109 46.6 11.6 
ACL - loans to total loans1.50 %1.49 %1.53 %
ACL - loans to non-performing loans128.6 195.2 191.7 6,310 (350)
For the three months ended March 31, 2021, provision for credit losses on portfolio loans was $10.0 million. The provision for credit losses is based on our reasonable and supportable forecasts of expected future losses inherent in our portfolio.
Net charge-offs were $12.9 million in the first quarter of 2021 and consisted of $5.9 million in charge-offs related to the sale of $70.0 million of CRE loans, most of which were rated special mention or substandard, a charge-off of $5.0 million on a large non-performing construction loan and $2.0 million of other net charge-offs.
Non-performing loans increased by $1.5 million to $168.6 million at March 31, 2021 compared to the linked quarter. Loans 30 to 89 days past due were $42.2 million, a decrease of $30.7 million from the linked quarter.
Special mention loans increased $33.0 million compared to the linked quarter. Substandard loans, which include non-performing loans, increased $61.3 million relative to the linked quarter. The increase was mainly due to CRE and multi-family loans, the majority of which are related to borrowers that previously requested payment forbearance under the CARES Act. The increases in special mention and substandard loans in the first quarter of 2021 are after recording the impact of the sale of a portfolio of CRE loans that contained a total of $60.1 million in loans rated special mention or substandard. As of March 31, 2021, loan payment deferrals were $130.5 million, or 0.6% of the total portfolio loans.
For additional information on our credit quality metrics including delinquency, criticized and classified see page 17, “Asset Quality Information by Portfolio”.

8


Capital
($ in thousands, except share and per share data)As ofChange % / bps
March 31, 2020December 31, 2020March 31, 2021Y-o-YLinked Qtr
Total stockholders’ equity$4,422,424 $4,590,514 $4,620,164 4.5 %0.6 %
Preferred stock137,363 136,689 136,458 (0.7)(0.2)
Goodwill and other intangible assets1,789,646 1,777,046 1,773,270 (0.9)(0.2)
Tangible common stockholders’ equity 10
$2,495,415 $2,676,779 $2,710,436 8.6 1.3 
Common shares outstanding194,460,656 192,923,371 192,567,901 (1.0)(0.2)
Book value per common share$22.04 $23.09 $23.28 5.6 0.8 
Tangible book value per common share 10
12.83 13.87 14.08 9.7 1.5 
Tangible common equity as a % of tangible assets 10
8.74 %9.55 %9.63 %89 
Est. Tier 1 leverage ratio - Company9.41 10.14 10.50 109 36 
Est. Tier 1 leverage ratio - Company fully implemented9.06 9.80 10.15 N/A35 
Est. Tier 1 leverage ratio - Bank9.99 11.33 11.76 177 43 
Est. Tier 1 leverage ratio - Bank fully implemented9.65 11.01 11.42 N/A41 
 10 See a reconciliation of non-GAAP financial measures beginning on page 20.
Total stockholders’ equity increased $29.7 million to $4.6 billion versus the linked quarter as a result of net income of $99.2 million, stock-based compensation and stock option exercises of $7.4 million, partially offset by common stock repurchases of $27.3 million, common shares acquired from stock compensation plan activity of $6.6 million, common dividends of $13.5 million, preferred dividends of $2.2 million, and other comprehensive loss of $27.2 million.

We elected the five-year transition provision to delay for two years the full impact on regulatory capital of our adoption of the Current Expected Credit Loss (“CECL”) accounting standard, followed by a three year transition period. The March 31, 2021 fully implemented ratio data reflects the full impact of CECL and excludes the benefits of phase-ins.

Tangible book value per common share was $14.08 at March 31, 2021, which represented an increase of 9.7% compared to a year ago.

Subsequent Event
As announced and further described in a separate press release issued by Sterling Bancorp today, Sterling Bancorp and Webster Financial Corporation, have entered into a merger agreement under which the companies will combine in an all stock merger of equals transaction.

Conference Call Information
In light of the announcement earlier today of entry into a merger agreement with Webster Financial Corporation (“Webster”), there will be a joint conference call to discuss the transaction and first quarter earnings at 8:30 A.M. Eastern Time today. To listen to the live call, please dial 877-407-8289 (US) or 201-689-8341 (International). A webcast can be accessed via Webster’s Investor Relations website at www.wbst.com. Sterling has cancelled its originally scheduled earnings conference call on April 22, 2021.

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.



9


CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This release may contain certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements about the Company and the the proposed transaction, between Webster and the Company. Such statements are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.

While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: changes in general economic, political, or industry conditions; the magnitude and duration of the COVID-19 pandemic and its impact on the global economy and financial market conditions and our business, results of operations, and financial condition; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; movements in interest rates; reform of LIBOR; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III regulatory capital reforms, as well as those involving the OCC, Federal Reserve, FDIC, and CFPB; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement between Webster and the Company; the outcome of any legal proceedings that may be instituted against Webster or the Company; delays in completing the transaction; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction); the failure to obtain stockholder approvals or to satisfy any of the other conditions to the transaction on a timely basis or at all; the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Webster and the Company do business; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the ability to complete the transaction and integration of Webster and the Company successfully; and other factors that may affect the future results of Webster and the Company. Additional factors that could cause results to differ materially from those described above can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, which is on file with the SEC and available on the Company's investor relations website, https://sterlingbank.gcs-web.com/investor-relations, under the heading "Financials" and in other documents the Company files with the SEC.

All forward-looking statements speak only as of the date they are made and are based on information available at that time. The Company assumes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

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, 2021. 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.

IMPORTANT ADDITIONAL INFORMATION
In connection with the proposed transaction, Webster will file with the SEC a Registration Statement on Form S-4 that will include a Joint Proxy Statement of Webster and the Company and a Prospectus of Webster , as well as other relevant documents concerning the proposed transaction. The proposed transaction involving Webster and the Company will be submitted to the Company's stockholders and Webster's stockholders for their consideration. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration

10


or qualification under the securities laws of any such jurisdiction. INVESTORS AND STOCKHOLDERS OF WEBSTER AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain a free copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about Webster and the Company, without charge, at the SEC's website (http://www.sec.gov). Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to Kristen Manginelli, Director of Investor Relations, Webster Financial Corporation, 145 Bank Street, Waterbury, Connecticut 06702, (203) 578-2202 or to Emlen Harmon, Managing Director, Investor Relations, Sterling Bancorp, Two Blue Hill Plaza, Second Floor, Pearl River, New York 10965, (845) 369-8040.

PARTICIPANTS IN THE SOLICITATION
Webster, the Company, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Webster and the Company in connection with the proposed transaction under the rules of the SEC. Information regarding Webster’s directors and executive officers is available in its definitive proxy statement relating to its 2021 Annual Meeting of Stockholders, which was filed with the SEC on March 19, 2021, and other documents filed by Webster with the SEC. Information regarding Sterling’s directors and executive officers is available in its definitive proxy statement relating to its 2021 Annual Meeting of Stockholders, which was filed with the SEC on April 14, 2021, and other documents filed by Sterling with the SEC. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials filed with the SEC. Free copies of this document may be obtained as described in the preceding paragraph.


11


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

March 31, 2020December 31, 2020March 31, 2021
Assets:
Cash and cash equivalents$348,636 $305,002 $935,633 
Investment securities, net4,614,513 4,039,456 4,241,457 
Loans held for sale8,124 11,749 36,237 
Portfolio loans:
Commercial and industrial (“C&I”)8,483,474 9,160,268 8,451,614 
Commercial real estate (including multi-family)10,399,566 10,238,650 10,421,132 
Acquisition, development and construction (“ADC”) loans524,714 642,943 618,295 
Residential mortgage2,077,534 1,616,641 1,486,597 
Consumer224,669 189,907 174,335 
Total portfolio loans, gross21,709,957 21,848,409 21,151,973 
Allowance for credit losses(326,444)(326,100)(323,186)
Total portfolio loans, net21,383,513 21,522,309 20,828,787 
FHLB and Federal Reserve Bank Stock, at cost240,722 166,190 153,968 
Accrued interest receivable102,101 97,505 103,323 
Premises and equipment, net228,526 202,555 199,782 
Goodwill1,683,482 1,683,482 1,683,482 
Other intangibles106,164 93,564 89,788 
BOLI616,648 629,576 630,430 
Other real estate owned11,815 5,347 5,227 
Other assets990,792 1,063,403 1,006,168 
Total assets$30,335,036 $29,820,138 $29,914,282 
Liabilities:
Deposits$22,558,280 $23,119,522 $23,841,718 
FHLB borrowings1,955,451 382,000 — 
Federal Funds Purchased— 277,000 — 
Other borrowings27,562 27,101 31,679 
Senior notes171,422 — — 
Subordinated notes - Company271,019 491,910 492,063 
Subordinated notes - Bank173,244 143,703 143,757 
Mortgage escrow funds96,491 59,686 82,245 
Other liabilities659,143 728,702 702,656 
Total liabilities25,912,612 25,229,624 25,294,118 
Stockholders’ equity:
Preferred stock137,363 136,689 136,458 
Common stock2,299 2,299 2,299 
Additional paid-in capital3,749,508 3,761,993 3,745,890 
Treasury stock(660,069)(686,911)(699,415)
Retained earnings1,125,702 1,291,628 1,377,341 
Accumulated other comprehensive income67,621 84,816 57,591 
Total stockholders’ equity4,422,424 4,590,514 4,620,164 
Total liabilities and stockholders’ equity$30,335,036 $29,820,138 $29,914,282 
Shares of common stock outstanding at period end194,460,656 192,923,371 192,567,901 
Book value per common share$22.04 $23.09 $23.28 
Tangible book value per common share1
12.83 13.87 14.08 
1 See reconciliation of non-GAAP financial measures beginning on page 20.

12

.
Sterling Bancorp and Subsidiaries                                    
CONSOLIDATED INCOME STATEMENTS
(unaudited, in thousands, except share and per share data)
 For the Quarter Ended
March 31, 2020December 31, 2020March 31, 2021
Interest and dividend income:
Loans and loan fees$235,439 $214,522 $205,855 
Securities taxable20,629 15,679 15,352 
Securities non-taxable12,997 11,839 11,738 
Other earning assets4,462 570 902 
Total interest and dividend income273,527 242,610 233,847 
Interest expense:
Deposits45,781 13,417 8,868 
Borrowings15,974 7,167 7,065 
Total interest expense61,755 20,584 15,933 
Net interest income211,772 222,026 217,914 
Provision for credit losses - loans136,577 27,500 10,000 
Provision for credit losses - held to maturity securities1,703 — — 
Net interest income after provision for credit losses73,492 194,526 207,914 
Non-interest income:
Deposit fees and service charges6,622 5,975 6,563 
Accounts receivable management / factoring commissions and other related fees5,538 6,498 5,426 
BOLI5,018 4,961 4,955 
Loan commissions and fees11,024 13,220 10,477 
Investment management fees1,847 1,700 1,852 
Net gain (loss) on sale of securities8,412 (111)719 
Net gain on security calls4,880 — — 
Other3,985 1,678 2,364 
Total non-interest income47,326 33,921 32,356 
Non-interest expense:
Compensation and benefits54,876 56,563 58,087 
Stock-based compensation plans6,006 5,222 6,617 
Occupancy and office operations15,199 14,742 14,515 
Information technology8,018 9,559 9,246 
Amortization of intangible assets4,200 4,200 3,776 
FDIC insurance and regulatory assessments3,206 2,865 3,230 
Other real estate owned, net52 283 (68)
Impairment related to financial centers and real estate consolidation strategy— 13,311 633 
Loss on extinguishment of borrowings744 2,749 — 
Other22,412 23,979 22,129 
Total non-interest expense114,713 133,473 118,165 
Income before income tax expense6,105 94,974 122,105 
Income tax (benefit) expense(8,042)18,551 22,955 
Net income14,147 76,423 99,150 
Preferred stock dividend1,976 1,966 1,963 
Net income available to common stockholders$12,171 $74,457 $97,187 
Weighted average common shares:
Basic196,344,061 193,036,678 191,890,512 
Diluted196,709,038 193,530,930 192,621,907 
Earnings per common share:
Basic earnings per share$0.06 $0.39 $0.51 
Diluted earnings per share0.06 0.38 0.50 
Dividends declared per share0.07 0.07 0.07 

13


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 PeriodMarch 31, 2020June 30, 2020September 30, 2020December 31, 2020March 31, 2021
Total assets$30,335,036 $30,839,893 $30,617,722 $29,820,138 $29,914,282 
Tangible assets 1
28,545,390 29,054,447 28,836,476 28,043,092 28,141,012 
Securities available for sale2,660,835 2,620,624 2,419,458 2,298,618 2,524,671 
Securities held to maturity, net1,956,177 1,924,955 1,781,892 1,740,838 1,716,786 
Loans held for sale2
8,124 44,437 36,826 11,749 36,237 
Portfolio loans21,709,957 22,295,267 22,281,940 21,848,409 21,151,973 
Goodwill1,683,482 1,683,482 1,683,482 1,683,482 1,683,482 
Other intangibles106,164 101,964 97,764 93,564 89,788 
Deposits22,558,280 23,600,621 24,255,333 23,119,522 23,841,718 
Municipal deposits (included above)2,091,259 1,724,049 2,397,072 1,648,945 2,047,349 
Borrowings2,598,698 2,582,609 993,535 1,321,714 667,499 
Stockholders’ equity4,422,424 4,484,187 4,557,785 4,590,514 4,620,164 
Tangible common equity 1
2,495,415 2,561,599 2,639,622 2,676,779 2,710,436 
Quarterly Average Balances
Total assets30,484,433 30,732,914 30,652,856 30,024,165 29,582,605 
Tangible assets 1
28,692,033 28,944,714 28,868,840 28,244,364 27,806,859 
Loans, gross:
   Commercial real estate (includes multi-family)10,288,977 10,404,643 10,320,930 10,191,707 10,283,292 
ADC497,009 519,517 636,061 685,368 624,259 
C&I:
   Traditional C&I (includes PPP loans)2,470,570 3,130,248 3,339,872 3,155,851 2,917,721 
   Asset-based lending3
1,107,542 981,518 864,075 876,377 751,861 
   Payroll finance3
217,952 173,175 143,579 162,762 146,839 
   Warehouse lending3
1,089,576 1,353,885 1,550,425 1,637,507 1,546,947 
   Factored receivables3
229,126 188,660 163,388 214,021 224,845 
   Equipment financing3
1,703,016 1,677,273 1,590,855 1,535,582 1,474,993 
Public sector finance3
1,216,326 1,286,265 1,481,260 1,532,899 1,583,066 
          Total C&I8,034,108 8,791,024 9,133,454 9,114,999 8,646,272 
   Residential mortgage2,152,440 2,006,400 1,862,390 1,691,567 1,558,266 
   Consumer233,643 219,052 206,700 195,870 182,461 
Loans, total4
21,206,177 21,940,636 22,159,535 21,879,511 21,294,550 
Securities (taxable)2,883,367 2,507,384 2,363,059 2,191,333 2,103,768 
Securities (non-taxable)2,163,206 2,122,672 2,029,805 1,964,451 1,951,210 
Other interest earning assets727,511 669,422 610,938 487,696 800,204 
Total interest earning assets26,980,261 27,240,114 27,163,337 26,522,991 26,149,732 
Deposits:
   Non-interest bearing demand4,346,518 5,004,907 5,385,939 5,530,334 5,521,538 
   Interest bearing demand4,616,658 4,766,298 4,688,343 4,870,544 4,981,415 
   Savings (including mortgage escrow funds)2,800,021 2,890,402 2,727,475 2,712,041 2,717,622 
   Money market7,691,381 8,035,750 8,304,834 8,577,920 8,382,533 
   Certificates of deposit3,237,990 2,766,580 2,559,325 2,158,348 1,943,820 
Total deposits and mortgage escrow22,692,568 23,463,937 23,665,916 23,849,187 23,546,928 
Borrowings2,580,922 2,101,016 1,747,941 852,057 721,642 
Stockholders’ equity4,506,537 4,464,403 4,530,334 4,591,770 4,616,660 
Tangible common stockholders’ equity 1
2,576,558 2,538,842 2,609,179 2,675,055 2,704,227 
1 See a reconciliation of non-GAAP financial measures beginning on page 20.
2 Loans held for sale mainly includes commercial syndication loans.
3 Asset-based lending, payroll finance, warehouse lending, factored receivables, equipment finance and public sector finance comprise our commercial finance loan portfolio.
4 Includes loans held for sale, but excludes allowance for credit losses.

14


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 DataMarch 31, 2020June 30, 2020September 30, 2020December 31, 2020March 31, 2021
Basic earnings per share$0.06 $0.25 $0.43 $0.39 $0.51 
Diluted earnings per share0.06 0.25 0.43 0.38 0.50 
Adjusted diluted (loss) earnings per share, non-GAAP 1
(0.02)0.29 0.45 0.49 0.51 
Dividends declared per common share0.07 0.07 0.07 0.07 0.07 
Book value per common share22.04 22.35 22.73 23.09 23.28 
Tangible book value per common share1
12.83 13.17 13.57 13.87 14.08 
Shares of common stock o/s194,460,656 194,458,805 194,458,841 192,923,371 192,567,901 
Basic weighted average common shares o/s196,344,061 193,479,757 193,494,929 193,036,678 191,890,512 
Diluted weighted average common shares o/s196,709,038 193,604,431 193,715,943 193,530,930 192,621,907 
Performance Ratios (annualized)
Return on average assets0.16 %0.64 %1.07 %0.99 %1.33 %
Return on average equity1.09 4.40 7.24 6.45 8.54 
Return on average tangible assets0.17 0.68 1.14 1.05 1.42 
Return on average tangible common equity1.90 7.73 12.57 11.07 14.58 
Return on average tangible assets, adjusted 1
(0.04)0.79 1.21 1.33 1.42 
Return on avg. tangible common equity, adjusted 1
(0.49)9.02 13.37 14.03 14.64 
Operating efficiency ratio, as adjusted 1
42.4 45.1 43.1 43.0 44.3 
Analysis of Net Interest Income
Accretion income on acquired loans$10,686 $10,086 $9,172 $8,560 $8,272 
Yield on loans4.47 %4.03 %3.82 %3.90 %3.92 %
Yield on investment securities - tax equivalent 2
2.96 3.05 3.09 2.94 3.02 
Yield on interest earning assets - tax equivalent 2
4.13 3.79 3.63 3.69 3.68 
Cost of interest bearing deposits1.00 0.61 0.40 0.29 0.20 
Cost of total deposits0.81 0.48 0.31 0.22 0.15 
Cost of borrowings2.49 2.26 1.95 3.35 3.97 
Cost of interest bearing liabilities1.19 0.78 0.53 0.43 0.34 
Net interest rate spread - tax equivalent basis 2
2.94 3.01 3.10 3.26 3.34 
Net interest margin - GAAP basis3.16 3.15 3.19 3.33 3.38 
Net interest margin - tax equivalent basis 2
3.21 3.20 3.24 3.38 3.43 
Capital
Tier 1 leverage ratio - Company 3
9.41 %9.51 %9.93 %10.14 %10.50 %
Tier 1 leverage ratio - Bank only 3
9.99 10.09 10.48 11.33 11.76 
Tier 1 risk-based capital ratio - Bank only 3
12.19 12.24 12.39 13.38 14.02 
Total risk-based capital ratio - Bank only 3
13.80 13.85 13.86 14.73 15.40 
Tangible common equity - Company 1
8.74 8.82 9.15 9.55 9.63 
Condensed Five Quarter Income Statement
Interest and dividend income$273,527 $253,226 $244,658 $242,610 $233,847 
Interest expense61,755 39,927 26,834 20,584 15,933 
Net interest income211,772 213,299 217,824 222,026 217,914 
Provision for credit losses138,280 56,606 30,000 27,500 10,000 
Net interest income after provision for credit losses73,492 156,693 187,824 194,526 207,914 
Non-interest income47,326 26,090 28,225 33,921 32,356 
Non-interest expense114,713 124,881 119,362 133,473 118,165 
Income before income tax (benefit) expense6,105 57,902 96,687 94,974 122,105 
Income tax (benefit) expense(8,042)7,110 12,280 18,551 22,955 
Net income$14,147 $50,792 $84,407 $76,423 $99,150 
1 See a reconciliation of non-GAAP financial measures beginning on page 20.
2 Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable federal tax rate of 21%.
3 Regulatory capital amounts and ratios are preliminary estimates pending filing of the Companys and Banks regulatory reports.
15


Sterling Bancorp and Subsidiaries                                        
ASSET QUALITY INFORMATION BY PORTFOLIO
(unaudited, in thousands, except share and per share data)

As of and for the Quarter Ended
Allowance for Credit Losses Roll ForwardMarch 31, 2020June 30, 2020September 30, 2020December 31, 2020March 31, 2021
Balance, beginning of period$106,238 $326,444 $365,489 $325,943 $326,100 
Implementation of CECL accounting standard:
Gross up from purchase credit impaired loans22,496 — — — — 
Transition amount charged to equity68,088 — — — — 
Provision for credit losses - loans136,577 56,606 31,000 27,500 10,000 
Loan charge-offs1:
Traditional C&I(298)(3,988)(1,089)(17,757)(1,027)
Asset-based lending(985)(1,500)(1,297)— — 
Payroll finance— (560)— (730)— 
Factored receivables(7)(3,731)(6,893)(2,099)(4)
Equipment financing(4,793)(7,863)(42,128)(3,445)(2,408)
Commercial real estate(1,275)(11)(3,650)(3,266)(2,933)
Multi-family— (154)— (430)(3,230)
ADC(3)(1)— (307)(5,000)
Residential mortgage(1,072)(702)(17,353)(23)(267)
Consumer(1,405)(172)(97)(62)(391)
Total charge-offs(9,838)(18,682)(72,507)(28,119)(15,260)
Recoveries of loans previously charged-off1:
Traditional C&I475 116 677 194 468 
Payroll finance262 38 
Factored receivables185 122 406 
Equipment financing1,105 387 816 217 854 
Commercial real estate60 584 — 174 487 
Multi-family— — — — 
Acquisition development & construction105 — — — — 
Residential mortgage— — — 37 
Consumer1,125 31 21 30 92 
Total recoveries2,883 1,121 1,961 776 2,346 
Net loan charge-offs(6,955)(17,561)(70,546)(27,343)(12,914)
Balance, end of period$326,444 $365,489 $325,943 $326,100 $323,186 
Asset Quality Data and Ratios
Non-performing loans (“NPLs”) non-accrual$252,205 $260,333 $180,795 $166,889 $168,555 
NPLs still accruing1,545 272 56 170 
Total NPLs253,750 260,605 180,851 167,059 168,557 
Other real estate owned11,815 8,665 6,919 5,346 5,227 
Non-performing assets (“NPAs”)$265,565 $269,270 $187,770 $172,405 $173,784 
Loans 30 to 89 days past due$69,769 $66,268 $68,979 $72,912 $42,165 
Net charge-offs as a % of average loans (annualized)0.13 %0.32 %1.27 %0.50 %0.25 %
NPLs as a % of total loans1.17 1.17 0.81 0.76 0.80 
NPAs as a % of total assets0.88 0.87 0.61 0.58 0.58 
Allowance for credit losses as a % of NPLs128.6 140.2 180.2 195.2 191.7 
Allowance for credit losses as a % of total loans1.50 1.64 1.46 1.49 1.53 
Special mention loans$132,356 $141,805 $204,267 $461,458 $494,452 
Substandard loans402,393 415,917 375,427 528,760 590,109 
Doubtful loans— — — 304 295 
1 There were no charge-offs or recoveries on warehouse lending or public sector finance loans during the periods presented. There were no asset-based lending recoveries during the periods presented.



16


Sterling Bancorp and Subsidiaries                                        
ASSET QUALITY INFORMATION BY PORTFOLIO
(unaudited, in thousands, except share and per share data)


At or for the quarter ended March 31, 2021CECL ACL
Total loansCrit/Class30-89 Days DelinquentNPLsNCOsACL $% of Portfolio
Traditional C&I$2,886,337 $133,449 $3,009 $50,351 $(559)$46,393 1.61 %
Asset Based Lending693,015 106,351 — 10,149 — 11,165 1.61 
Payroll Finance153,987 3,489 — 2,313 1,519 0.99 
Mortgage Warehouse1,394,945 — — — — 1,232 0.09 
Factored Receivables229,629 — — — 402 3,237 1.41 
Equipment Finance1,475,716 53,850 2,514 28,870 (1,554)28,025 1.90 
Public Sector Finance1,617,986 — — — — 4,632 0.29 
Commercial Real Estate6,029,281 588,163 14,039 24,269 (2,446)159,422 2.64 
Multi-family4,391,850 145,730 14,029 778 (3,230)33,376 0.76 
ADC618,295 26,613 — 25,000 (5,000)13,803 2.23 
Total commercial loans19,491,041 1,057,645 33,591 141,730 (12,385)302,804 1.55 
Residential1,486,597 17,368 7,347 17,081 (230)15,970 1.07 
Consumer174,335 9,843 1,229 9,746 (299)4,412 2.53 
Total portfolio loans$21,151,973 $1,084,856 $42,167 $168,557 $(12,914)$323,186 1.53 

At or for the quarter ended December 31, 2020CECL ACL
Total loansCrit/Class30-89 Days DelinquentNPLsNCOsACL $% of Portfolio
Traditional C&I$2,920,205 $109,258 $1,168 $19,317 $(17,563)$42,670 1.46 %
Asset Based Lending803,004 123,266 — 5,255 — 12,762 1.59 
Payroll Finance159,237 2,300 — 2,300 (692)1,957 1.23 
Mortgage Warehouse1,953,677 — — — — 1,724 0.09 
Factored Receivables220,217 5,523 — — (1,977)2,904 1.32 
Equipment Finance1,531,109 52,755 34,016 30,636 (3,228)31,794 2.08 
Public Sector Finance1,572,819 — — — — 4,516 0.29 
Commercial Real Estate5,831,990 530,199 17,229 46,127 (3,092)155,313 2.66 
Multi-family4,406,660 106,018 11,546 4,485 (430)33,320 0.76 
ADC642,943 31,407 — 30,000 (307)17,927 2.79 
Total commercial loans20,041,861 960,726 63,959 138,120 (27,289)304,887 1.52 
Residential1,616,641 19,410 7,911 18,661 (22)16,529 1.02 
Consumer189,907 10,386 1,042 10,278 (32)4,684 2.47 
Total portfolio loans$21,848,409 $990,522 $72,912 $167,059 $(27,343)$326,100 1.49 



17


Sterling Bancorp and Subsidiaries
Non-GAAP Financial Measures
(unaudited, in thousands, except share and per share data)
 For the Quarter Ended
 December 31, 2020March 31, 2021
 Average
balance
InterestYield/RateAverage
balance
InterestYield/Rate
 (Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans$9,114,999 $83,429 3.64 %$8,646,272 $78,006 3.66 %
   Commercial real estate (includes multi-family)10,191,707 105,193 4.11 10,283,292 103,625 4.09 
ADC685,368 6,500 3.77 624,259 5,856 3.80 
Commercial loans19,992,074 195,122 3.88 19,553,823 187,487 3.89 
Consumer loans195,870 2,028 4.12 182,461 2,081 4.63 
Residential mortgage loans1,691,567 17,372 4.11 1,558,266 16,287 4.18 
Total gross loans 1
21,879,511 214,522 3.90 21,294,550 205,855 3.92 
Securities taxable2,191,333 15,679 2.85 2,103,768 15,352 2.96 
Securities non-taxable1,964,451 14,985 3.05 1,951,210 14,858 3.05 
Interest earning deposits331,587 105 0.13 648,178 149 0.09 
FHLB and Federal Reserve Bank Stock156,109 465 1.18 152,026 753 2.01 
Total securities and other earning assets4,643,480 31,234 2.68 4,855,182 31,112 2.60 
Total interest earning assets26,522,991 245,756 3.69 26,149,732 236,967 3.68 
Non-interest earning assets3,501,174 3,432,873 
Total assets$30,024,165 $29,582,605 
Interest bearing liabilities:
Demand and savings 2 deposits
$7,582,585 $3,230 0.17 %$7,699,037 $2,513 0.13 %
Money market deposits8,577,920 6,065 0.28 8,382,533 3,813 0.18 
Certificates of deposit2,158,348 4,122 0.76 1,943,820 2,542 0.53 
Total interest bearing deposits18,318,853 13,417 0.29 18,025,390 8,868 0.20 
Other borrowings261,787 518 0.79 85,957 36 0.17 
Subordinated debentures - Bank168,222 2,293 5.45 143,722 1,957 5.45 
Subordinated debentures - Company422,048 4,356 4.13 491,963 5,072 4.12 
Total borrowings852,057 7,167 3.35 721,642 7,065 3.97 
Total interest bearing liabilities19,170,910 20,584 0.43 18,747,032 15,933 0.34 
Non-interest bearing deposits5,530,334 5,521,538 
Other non-interest bearing liabilities731,151 697,375 
Total liabilities25,432,395 24,965,945 
Stockholders’ equity4,591,770 4,616,660 
Total liabilities and stockholders’ equity$30,024,165 $29,582,605 
Net interest rate spread 3
3.26 %3.34 %
Net interest earning assets 4
$7,352,081 $7,402,700 
Net interest margin - tax equivalent225,172 3.38 %221,034 3.43 %
Less tax equivalent adjustment(3,146)(3,120)
Net interest income222,026 217,914 
Accretion income on acquired loans8,560 8,272 
Tax equivalent net interest margin excluding accretion income on acquired loans$216,612 3.25 %$212,762 3.30 %
Ratio of interest earning assets to interest bearing liabilities138.4 %139.5 %
1 Average 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.
18


Sterling Bancorp and Subsidiaries
Non-GAAP Financial Measures
(unaudited, in thousands, except share and per share data)
 For the Quarter Ended
 March 31, 2020March 31, 2021
 Average
balance
InterestYield/RateAverage
balance
InterestYield/Rate
 (Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans$8,034,108 $89,150 4.46 %$8,646,272 $78,006 3.66 %
   Commercial real estate (includes multi-family)10,288,977 110,742 4.33 10,283,292 103,625 4.09 
ADC497,009 6,320 5.11 624,259 5,856 3.80 
Commercial loans18,820,094 206,212 4.41 19,553,823 187,487 3.89 
Consumer loans233,643 2,939 5.06 182,461 2,081 4.63 
Residential mortgage loans2,152,440 26,288 4.89 1,558,266 16,287 4.18 
Total gross loans 1
21,206,177 235,439 4.47 21,294,550 205,855 3.92 
Securities taxable2,883,367 20,629 2.88 2,103,768 15,352 2.96 
Securities non-taxable2,163,206 16,451 3.04 1,951,210 14,858 3.05 
Interest earning deposits489,691 1,832 1.50 648,178 149 0.09 
FHLB and Federal Reserve Bank stock237,820 2,630 4.45 152,026 753 2.01 
Total securities and other earning assets5,774,084 41,542 2.89 4,855,182 31,112 2.60 
Total interest earning assets26,980,261 276,981 4.13 26,149,732 236,967 3.68 
Non-interest earning assets3,504,172 3,432,873 
Total assets$30,484,433 $29,582,605 
Interest bearing liabilities:
Demand and savings 2 deposits
$7,416,679 $13,064 0.71 %$7,699,037 $2,513 0.13 %
Money market deposits7,691,381 18,396 0.96 8,382,533 3,813 0.18 
Certificates of deposit3,237,990 14,321 1.78 1,943,820 2,542 0.53 
Total interest bearing deposits18,346,050 45,781 1.00 18,025,390 8,868 0.20 
Senior notes173,323 1,434 3.31 — — — 
Other borrowings1,963,428 9,353 1.92 85,957 36 0.17 
Subordinated debentures - Bank173,203 2,360 5.45 143,722 1,957 5.45 
Subordinated debentures - Company270,968 2,827 4.17 491,963 5,072 4.12 
Total borrowings2,580,922 15,974 2.49 721,642 7,065 3.97 
Total interest bearing liabilities20,926,972 61,755 1.19 18,747,032 15,933 0.34 
Non-interest bearing deposits4,346,518 5,521,538 
Other non-interest bearing liabilities704,406 697,375 
Total liabilities25,977,896 24,965,945 
Stockholders’ equity4,506,537 4,616,660 
Total liabilities and stockholders’ equity$30,484,433 $29,582,605 
Net interest rate spread 3
2.94 %3.34 %
Net interest earning assets 4
$6,053,289 $7,402,700 
Net interest margin - tax equivalent215,226 3.21 %221,034 3.43 %
Less tax equivalent adjustment(3,454)(3,120)
Net interest income211,772 217,914 
Accretion income on acquired loans10,686 8,272 
Tax equivalent net interest margin excluding accretion income on acquired loans$204,540 3.05 %$212,762 3.30 %
Ratio of interest earning assets to interest bearing liabilities128.9 %139.5 %
1 Average 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.
19


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 22.
As of and for the Quarter Ended
March 31, 2020June 30, 2020September 30, 2020December 31, 2020March 31, 2021
The following table shows the reconciliation of pretax pre-provision net revenue to adjusted pretax pre-provision net revenue1:
Net interest income$211,772 $213,299 $217,824 $222,026 $217,914 
Non-interest income47,326 26,090 28,225 33,921 32,356 
Total net revenue259,098 239,389 246,049 255,947 250,270 
Non-interest expense114,713 124,881 119,362 133,473 118,165 
PPNR144,385 114,508 126,687 122,474 132,105 
Adjustments:
Accretion income(10,686)(10,086)(9,172)(8,560)(8,272)
Net (gain) loss on sale of securities(8,412)(485)(642)111 (719)
Loss on extinguishment of debt744 9,723 6,241 2,749 — 
Impairment related to financial centers and real estate consolidation strategy— — — 13,311 633 
Amortization of non-compete agreements and acquired customer list intangible assets172 172 172 172 148 
Adjusted PPNR$126,203 $113,832 $123,286 $130,257 $123,895 


20

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 22.
As of and for the Quarter Ended
March 31, 2020June 30, 2020September 30, 2020December 31, 2020March 31, 2021
The following table shows the reconciliation of stockholders’ equity to tangible common equity and the tangible common equity ratio2:
Total assets$30,335,036 $30,839,893 $30,617,722 $29,820,138 $29,914,282 
Goodwill and other intangibles(1,789,646)(1,785,446)(1,781,246)(1,777,046)(1,773,270)
Tangible assets28,545,390 29,054,447 28,836,476 28,043,092 28,141,012 
Stockholders’ equity4,422,424 4,484,187 4,557,785 4,590,514 4,620,164 
Preferred stock(137,363)(137,142)(136,917)(136,689)(136,458)
Goodwill and other intangibles(1,789,646)(1,785,446)(1,781,246)(1,777,046)(1,773,270)
Tangible common stockholders’ equity2,495,415 2,561,599 2,639,622 2,676,779 2,710,436 
Common stock outstanding at period end194,460,656 194,458,805 194,458,841 192,923,371 192,567,901 
Common stockholders’ equity as a % of total assets14.13 %14.10 %14.44 %14.94 %14.99 %
Book value per common share$22.04 $22.35 $22.73 $23.09 $23.28 
Tangible common equity as a % of tangible assets8.74 %8.82 %9.15 %9.55 %9.63 %
Tangible book value per common share$12.83 $13.17 $13.57 $13.87 $14.08 
The following table shows the reconciliation of reported return on average tangible common equity and adjusted return on average tangible common equity3:
Average stockholders’ equity$4,506,537 $4,464,403 $4,530,334 $4,591,770 $4,616,660 
Average preferred stock(137,579)(137,361)(137,139)(136,914)(136,687)
Average goodwill and other intangibles(1,792,400)(1,788,200)(1,784,016)(1,779,801)(1,775,746)
Average tangible common stockholders’ equity2,576,558 2,538,842 2,609,179 2,675,055 2,704,227 
Net income available to common12,171 48,820 82,438 74,457 97,187 
Net income, if annualized48,951 196,353 327,960 296,209 394,147 
Reported return on avg tangible common equity1.90 %7.73 %12.57 %11.07 %14.58 %
Adjusted net (loss) income (see reconciliation on page 22)
$(3,124)$56,926$87,682$94,323$97,603
Annualized adjusted net (loss) income(12,565)228,955 348,822 375,242 395,834 
Adjusted return on average tangible common equity(0.49)%9.02 %13.37 %14.03 %14.64 %
The following table shows the reconciliation of reported return on average tangible assets and adjusted return on average tangible assets4:
Average assets$30,484,433 $30,732,914 $30,652,856 $30,024,165 $29,582,605 
Average goodwill and other intangibles(1,792,400)(1,788,200)(1,784,016)(1,779,801)(1,775,746)
Average tangible assets28,692,033 28,944,714 28,868,840 28,244,364 27,806,859 
Net income available to common12,171 48,820 82,438 74,457 97,187 
Net income, if annualized48,951 196,353 327,960 296,209 394,147 
Reported return on average tangible assets0.17 %0.68 %1.14 %1.05 %1.42 %
Adjusted net (loss) income (see reconciliation on page 22)
$(3,124)$56,926 $87,682 $94,323 $97,603 
Annualized adjusted net (loss) income(12,565)228,955 348,822 375,242 395,834 
Adjusted return on average tangible assets(0.04)%0.79 %1.21 %1.33 %1.42 %

21

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 22.
As of and for the Quarter Ended
March 31, 2020June 30, 2020September 30, 2020December 31, 2020March 31, 2021
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio5:
Net interest income$211,772 $213,299 $217,824 $222,026 $217,914 
Non-interest income47,326 26,090 28,225 33,921 32,356 
Total revenue259,098 239,389 246,049 255,947 250,270 
Tax equivalent adjustment on securities3,454 3,411 3,258 3,146 3,120 
Net (gain) loss on sale of securities(8,412)(485)(642)111 (719)
Depreciation of operating leases(3,492)(3,136)(3,130)(3,130)(3,124)
Adjusted total revenue250,648 239,179 245,535 256,074 249,547 
Non-interest expense114,713 124,881 119,362 133,473 118,165 
Impairment related to financial centers and real estate consolidation strategy— — — (13,311)(633)
Loss on extinguishment of borrowings(744)(9,723)(6,241)(2,749)— 
Depreciation of operating leases(3,492)(3,136)(3,130)(3,130)(3,124)
Amortization of intangible assets(4,200)(4,200)(4,200)(4,200)(3,776)
Adjusted non-interest expense106,277 107,822 105,791 110,083 110,632 
Reported operating efficiency ratio44.3 %52.2 %48.5 %52.1 %47.2 %
Adjusted operating efficiency ratio42.4 45.1 43.1 43.0 44.3 
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)6:
Income before income tax expense$6,105 $57,902 $96,687 $94,974 $122,105 
Income tax (benefit) expense(8,042)7,110 12,280 18,551 22,955 
Net income (GAAP)14,147 50,792 84,407 76,423 99,150 
Adjustments:
Net (gain) loss on sale of securities(8,412)(485)(642)111 (719)
Loss on extinguishment of debt744 9,723 6,241 2,749 — 
Impairment related to financial centers and real estate consolidation strategy.— — — 13,311 633 
Amortization of non-compete agreements and acquired customer list intangible assets172 172 172 172 148 
Total pre-tax adjustments(7,496)9,410 5,771 16,343 62 
Adjusted pre-tax (loss) income(1,391)67,312 102,458 111,317 122,167 
Adjusted income tax (benefit) expense(243)8,414 12,807 15,028 22,601 
Adjusted net (loss) income (non-GAAP)(1,148)58,898 89,651 96,289 99,566 
Preferred stock dividend1,976 1,972 1,969 1,966 1,963 
Adjusted net (loss) income available to common stockholders (non-GAAP)$(3,124)$56,926 $87,682 $94,323 $97,603 
Weighted average diluted shares196,709,038 193,604,431 193,715,943 193,530,930 192,621,907 
Reported diluted EPS (GAAP)$0.06 $0.25 $0.43 $0.38 $0.50 
Adjusted diluted EPS (non-GAAP)(0.02)0.29 0.45 0.49 0.51 


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.

22

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

    
1 PPNR is a non-GAAP financial measure calculated by summing our GAAP net interest income plus GAAP non-interest income minus our GAAP non-interest expense and eliminating provision for credit losses and income taxes. We believe the use of PPNR provides useful information to readers of our financial statements because it enables an assessment of our ability to generate earnings to cover credit losses through a credit cycle. Adjusted PPNR includes the adjustments we make for adjusted earnings and excludes accretion income. We believe adjusted PPNR supplements our PPNR calculation. We use this calculation to assess our performance in the current operating environment.

2 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.

3 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.

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

5 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.

6 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.

23