Sterling Bancorp Announces Record Results for the Three and

MONTEBELLO, NY--(Marketwired - July 26, 2016) -

Key Performance Highlights for the Three Months ended June 30, 2016 vs. June 30, 2015

($ in thousands except per share amounts)	GAAP / As Reported								Non-GAAP / As Adjusted⁽¹⁾
	2015			2016			Change % / bps		2015			2016			Change % / bps
Total revenue⁽²⁾	$	77,431		$	120,822		56.0	%	$	78,296		$	119,510		52.6	%
Net (loss) income		(7,646	)		37,770		NM			21,361			35,414		65.8
Diluted EPS		(0.08	)		0.29		NM			0.23			0.27		17.4
Net interest margin⁽³⁾		3.49	%		3.50	%	1			3.57	%		3.60	%	3
Return on average tangible equity		(4.75	)		16.14		NM			13.27			15.14		187
Return on average tangible assets		(0.40	)		1.27		NM			1.13			1.19		6
Efficiency ratio		110.6			49.4		NM			52.6			47.2		(540	)

Total portfolio loans reached a record $8.6 billion at June 30, 2016.
Annualized loan growth of 15.0% (end of period balances, including acquired loans) and 29.5% (average balances) over the linked quarter.
Loans to deposits ratio of 87.8%; total deposits reached a record $9.8 billion at June 30, 2016 with over 90.0% core deposits⁽⁴⁾ and a total cost of deposits of 0.35%.
Annualized core deposit⁽⁴⁾ growth of 22.2% (end of period balances) and 27.1% (average balances) over the linked quarter.
Announced the pending acquisition of an ~$190 million portfolio of U.S. restaurant franchise financing loans.
Completed the consolidation of seven financial centers in the second quarter of 2016, 11 in total for the six months ended June 30, 2016; total financial centers were 42 as of June 30, 2016.
Announced divestiture of residential mortgage originations business; anticipated closing in Q3 2016.

Adjusted measures are defined in the non-GAAP tables beginning on page 15.
Total revenue as adjusted is equal to tax equivalent net interest income plus non-interest income excluding securities gains and losses.
Net interest margin as adjusted is equal to net interest margin plus the tax equivalent adjustment for tax exempt securities.
Core deposits include retail, commercial and municipal transaction, money market and savings accounts and exclude certificates of deposit and brokered deposits except for reciprocal Certificate of Deposit Account Registry balances.

Sterling Bancorp (NYSE: STL) (the "Company"), the parent company of Sterling National Bank (the "Bank"), today announced results for the three and six months ended June 30, 2016. Net income for the quarter was $37.8 million, or $0.29 per diluted share, compared to net income of $23.8 million, or $0.18 per diluted share, for the linked quarter ended March 31, 2016 and a net loss of $(7.6) million, or $(0.08) per diluted share, for the second quarter of 2015.

Net income for the six months ended June 30, 2016 was $61.5 million, or $0.47 per diluted share, compared to net income of $9.1 million, or $0.10 per diluted share for the first six months of 2015.

President's Comments

Jack Kopnisky, President and Chief Executive Officer, commented: "Our positive momentum in operating performance continued this quarter, highlighted by higher profitability and significant growth in loans and deposits. As of June 30, 2016, our total assets reached $13.1 billion, compared to $11.6 billion a year ago. We continue to execute our strategy of creating a high performing regional bank that focuses on serving commercial middle market clients and consumers.

"The positive impact of our strategic initiatives, which include continuing to reduce our network of financial centers and diversifying and expanding our commercial banking relationships and operations, is evident in our results. For the second quarter, our GAAP net income was $37.8 million, or $0.29 per diluted share. Our adjusted net income was $35.4 million and adjusted diluted earnings per share were $0.27, compared to $21.4 million and $0.23, respectively, for the same quarter a year ago. This represents growth of 65.8% and 17.4%, respectively, between the two periods. Our adjusted return on average tangible assets for the quarter was 1.19% and adjusted return on average tangible equity was 15.14%. This compares to 1.13% and 13.27%, respectively, for the same quarter a year ago.

"Consistent with our focus on leveraging our commercial lending platforms and expertise, during the quarter we announced the pending acquisition of an approximate $190 million portfolio of restaurant franchise financing loans from GE Capital. We anticipate the acquisition will close in this year's third quarter.

"We continuously evaluate the performance of our business lines to determine where we should allocate our capital and resources. In the first quarter of 2016, we announced we had entered into a definitive agreement to divest our trust operations. The divestiture process remains on-track and we anticipate closing the transaction by October 2016. During the second quarter, we also entered into a definitive agreement to divest our residential mortgage originations business, which we anticipate will close in this year's third quarter. We will reallocate capital and resources from these businesses to other businesses that are more in-line with our diversified commercial banking strategy and where we can achieve risk-adjusted returns that exceed our targets.

"We have a strong and diversified balance sheet, with ample funding to continue executing our strategy. We are well-positioned to continue delivering profitable and sustainable growth for our shareholders.

"Lastly, I am pleased to announce our Board of Directors has declared a dividend on our common stock of $0.07 per share payable on August 23, 2016 to our holders as of the record date of August 8, 2016."

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

GAAP net income of $37.8 million, or $0.29 per diluted share, for the second quarter of 2016, included a pre-tax net gain on sale of securities of $4.5 million and the amortization of non-compete agreements and acquired customer list intangibles of $968 thousand. Excluding the impact of these items, adjusted net income was $35.4 million, or $0.27 per diluted share.

Net income for the first quarter of 2016 was impacted by a loss on extinguishment of Federal Home Loan Bank ("FHLB") borrowings, merger-related expense and other restructuring charges incurred mainly in connection with the acquisition of NewStar Business Credit LLC ("NSBC"). The net loss incurred for the second quarter of 2015 was due mainly to merger-related expense and other restructuring charges incurred in connection with the acquisition of Hudson Valley Holding Corp ("Hudson Valley"). See the reconciliation of the Company's Non-GAAP Financial Measures beginning on page 15.

Non-GAAP financial measures include references to the terms "adjusted" or "excluding".

Net Interest Income and Margin

($ in thousands)	For the three months ended									Change % / bps
	6/30/2015			3/31/2016			6/30/2016			Y-o-Y		Linked Qtr
Interest income	$	71,947		$	106,006		$	114,309		58.9	%	7.8	%
Interest expense		8,373			12,496			13,929		66.4		11.5
Net interest income	$	63,574		$	93,510		$	100,380		57.9		7.3

Accretion on acquired loans	$	1,107		$	5,605		$	4,088		269.3	%	(27.1	)%
Yield on loans		4.60	%		4.62	%		4.68	%	0.08		0.06
Tax equivalent yield on securities		2.71			2.65			2.76		0.05		0.11
Tax equivalent yield on interest earning assets		4.03			4.00			4.09		0.06		0.09
Cost of total deposits		0.24			0.29			0.35		0.11		0.06
Cost of interest bearing deposits		0.33			0.44			0.52		0.19		0.08
Cost of borrowings		1.63			1.92			1.73		0.10		(0.19	)
Tax equivalent net interest margin		3.57			3.53			3.60		0.03		0.07

Average loans	$	5,205,806		$	7,745,467		$	8,313,529		59.7	%	7.3	%
Average securities		1,908,416			2,733,324			2,869,651		50.4		5.0
Average total earning assets		7,309,667			10,880,356			11,558,424		58.1		6.2
Average deposits		5,634,470			8,916,617			9,561,997		69.7		7.2

Second quarter 2016 compared with second quarter 2015

Net interest income was $100.4 million, an increase of $36.8 million compared to the second quarter of 2015. This was mainly the result of higher average loans and investment securities balances due to the merger with Hudson Valley and organic growth. Other key components of the changes in net interest income were the following:

The yield on loans was 4.68%, compared to 4.60% for the three months ended June 30, 2015.
Yield on loans included $4.1 million of accretion of the fair value discount associated with prior acquisitions compared to $1.1 million in the second quarter of 2015.
The tax equivalent yield on investment securities increased five basis points to 2.76%.
The cost of total deposits was 35 basis points and the cost of borrowings was 1.73% compared to 24 basis points and 1.63%, respectively, for the same period a year ago.
The tax equivalent yield on interest earning assets increased six basis points from the second quarter of 2015 to 4.09% for the second quarter of 2016.
Tax equivalent net interest margin was 3.60% compared to 3.57% for the same period a year ago.

Second quarter 2016 compared with linked quarter ended March 31, 2016

Net interest income increased $6.9 million compared to the linked quarter ended March 31, 2016. The increase was mainly due to the NSBC acquisition, which closed on March 31, 2016, and organic loan growth. This was partially offset by lower accretion of the fair value discount on acquired loans, which was $5.6 million in the first quarter of 2016 compared to $4.1 million in the second quarter of 2016, and higher average deposit and borrowings balances which resulted in an increase of $1.4 million in interest expense in the second quarter of 2016 over the first quarter of 2016. In March 2016, we redeemed $220.0 million of FHLB borrowings with a weighted average rate of 4.17% and issued $110.0 million of tier 2 qualifying subordinated notes at Sterling National Bank with a weighted average rate of 5.48%.

Other key components of the change in net interest income were the following:

The yield on loans was 4.68% for the quarter compared to 4.62% for the linked quarter.
The tax equivalent yield on investment securities increased 11 basis point to 2.76% in the quarter.
The cost of total deposits increased six basis points from 29 basis points in the linked quarter and the total cost of borrowings declined 19 basis points from 1.92% in the linked quarter to 1.73% for the second quarter of 2016.
The tax equivalent yield on interest earning assets increased nine basis points compared to 4.00% in the linked quarter.
Tax equivalent net interest margin was 3.60% compared to 3.53% in the linked quarter.

Non-interest Income

($ in thousands)	For the three months ended							Change %
	6/30/2015		3/31/2016			6/30/2016		Y-o-Y		Linked Qtr
Total non-interest income	$	13,857	$	15,430		$	20,442	47.5	%	32.5	%
Securities gains (losses)		697		(283	)		4,474	NM		NM
Adjusted non-interest income	$	13,160	$	15,713		$	15,968	21.3		1.6

Second quarter 2016 compared with second quarter 2015

Excluding net gain (loss) on sale of securities, adjusted non-interest income increased $2.8 million in the second quarter of 2016 to $16.0 million compared to $13.2 million in the same quarter last year. The change was mainly due to an increase in lines of credit commissions and loan fees and loan swap fee income of $1.9 million. The increase was also due to higher deposit fees and service charges of $446 thousand and trust fees of $599 thousand. Trust fees are included in investment management fees; we will not continue to generate trust fee income once the sale of our trust business is completed, which is anticipated to occur in the third quarter of 2016. These increases were partially offset by a decrease in mortgage banking income and accounts receivable/factoring commissions of $442 thousand.

Second quarter 2016 compared with linked quarter ended March 31, 2016

Excluding net gain (loss) on sale of securities, adjusted non-interest income increased $255 thousand from $15.7 million in the first quarter of 2016 to $16.0 million in the second quarter of 2016. This was mainly due to higher loan fees and commissions as a result of the NSBC acquisition, higher loan swap fee income and an increase in mortgage banking income which aggregated to income of $941 thousand. This was partially offset by a decrease of $338 thousand in accounts receivable/factoring commissions and a decrease of $405 thousand in deposit fees and service charges.

Non-interest Expense

($ in thousands)	For the three months ended									Change % / bps
	6/30/2015			3/31/2016			6/30/2016			Y-o-Y		Linked Qtr
Compensation and benefits	$	22,667		$	30,020		$	31,336		38.2	%	4.4	%
Occupancy and office operations		7,453			9,282			8,810		18.2		(5.1	)
Merger-related expenses		14,625			265			-		(100.0	)	(100.0	)
Loss on extinguishment of FHLB borrowings		-			8,716			-		-		(100.0	)
Charge for asset write-downs, banking systems conversions, retention and severance		28,055			2,485			-		(100.0	)	(100.0	)
Other expenses		12,859			18,163			19,494		51.6		7.3
Total non-interest expense	$	85,659		$	68,931		$	59,640		(30.4	)	(13.5	)
Full time equivalent employees at period end		1,196			1,078			1,065		(11.0	)	(1.2	)
Financial centers at period end		59			48			42		(28.8	)	(12.5	)
Efficiency ratio, as reported		110.6	%		63.3	%		49.4	%	61.2		13.9
Efficiency ratio, as adjusted		52.6			48.9			47.2		5.4		1.7

Second quarter 2016 compared with second quarter 2015

Non-interest expense decreased $26.0 million relative to the second quarter of 2015, from $85.7 million to $59.6 million for the second quarter of 2016. The change was the result of a decrease in merger-related expense and charge for asset write-downs, banking systems conversion, retention and severance, which were incurred in connection with the Hudson Valley merger, partially offset by increases in compensation and benefits expense of $8.7 million and occupancy and office operations expense of $1.4 million associated mainly with the Hudson Valley merger.

Second quarter 2016 compared with linked quarter ended March 31, 2016

Non-interest expense decreased $9.3 million from $68.9 million for the linked quarter to $59.6 million for the second quarter of 2016. This was mainly due to the loss on extinguishment of FHLB borrowings and merger-related expense and other charges incurred in the linked quarter. The increase in compensation and benefits from the linked quarter to the second quarter of 2016 was mainly due to the NSBC acquisition. The full integration of NSBC into our existing asset based lending operations will be completed by the fourth quarter of 2016. The decline in occupancy and office operations between the periods was due to the ongoing consolidation of our financial centers, which decreased by seven locations in the second quarter of 2016.

Taxes

Given the Company's emphasis on growing its public sector finance loans and municipal securities portfolio, total tax exempt earning assets increased to over $1 billion and represent 9.0% of earning assets at June 30, 2016, compared to 4.9% at December 31, 2015, when the Company initially estimated its effective tax rate for fiscal 2016. As a result, the Company has revised its estimated effective tax rate for 2016 to 33.3%, compared to a rate of 34.0% used in the first quarter of 2016, and recorded income taxes at an effective tax rate of 32.8% in the second quarter of 2016. The Company anticipates its tax rate will be 33.3% in the third and fourth quarters of 2016.

The Company's tax rate was 32.5% for the second quarter of 2015.

Key Balance Sheet Highlights at June 30, 2016

($ in thousands)	As of									Change % / bps
	6/30/2015			12/31/2015			6/30/2016			Y-o-Y		Six months
Total assets	$	11,566,382		$	11,955,952		$	13,065,248		13.0	%	9.3	%
Total loans		7,235,587			7,859,360			8,594,295		18.8		9.4
Commercial & industrial ("C&I") loans		2,884,440			3,131,028			3,639,169		26.2		16.2
Commercial real estate loans		3,330,687			3,715,779			3,990,527		19.8		7.4
Total commercial loans		6,215,127			6,846,807			7,629,696		22.8		11.4
Total deposits		8,836,161			8,473,360			9,785,556		10.7		15.5
Loans to deposits		81.9	%		92.8	%		87.8	%	5.9		(5.0	)
Core deposits	$	8,253,333		$	7,822,637		$	8,809,242		6.7		12.6
Core deposits to total deposits		93.4	%		92.3	%		90.0	%	(3.40	)	(2.30	)
Investment securities	$	2,666,610		$	2,643,823		$	2,980,059		11.8		12.7
Investment securities to total assets		23.1	%		22.1	%		22.8	%	(0.3	)	0.7

Highlights in balance sheet items in the second quarter of 2016 were the following:

C&I loans (which include traditional C&I, asset-based lending, payroll finance, warehouse lending, factoring and equipment finance) represented 42.4%, commercial real estate loans represented 44.0%, consumer and residential mortgage loans represented 11.2%, and acquisition, development and construction loans represented 2.4% of the total loan portfolio.
Commercial loan growth, which includes all C&I loans, commercial real estate and acquisition, development and construction loans, was $357.4 million for the quarter ended June 30, 2016.
Average commercial loans were $7.3 billion compared to $6.7 billion for the linked quarter.
Average total deposits were $9.6 billion compared to $8.9 billion for the linked quarter.
Borrowings were $1.3 billion compared to $1.5 billion at December 31, 2015. Average borrowings were $1.3 billion for both the linked quarter and second quarter 2016.

Credit Quality

($ in thousands)	For the three months ended									Change % / bps
	6/30/2015			3/31/2016			6/30/2016			Y-o-Y		Linked Qtr
Provision for loan losses	$	3,100		$	4,000		$	5,000		61.3	%	25.0	%
Net charge-offs		1,667			1,131			2,149		28.9		90.0
Allowance for loan losses		44,317			53,014			55,865		26.1		5.4
Non-performing loans		69,030			85,438			79,564		15.3		(6.9	)
Net charge-offs annualized		0.13	%		0.06	%		0.10	%	3.0		(4.0	)
Allowance for loan losses to total loans		0.61			0.64			0.65		4.0		1.0
Total valuation balances recorded against portfolio loans to adjusted gross portfolio loans⁽¹⁾		1.36			1.17			1.11		(25.0	)	(6.0	)
Allowance for loan losses to non-performing loans		64.2			62.0			70.2		6.0		8.2

Provision for loan losses was $5.0 million in the second quarter of 2016, an increase of $1.0 million from the linked quarter. This was mainly due to organic loan growth.

As a result of purchase accounting, a substantial portion of the loans acquired in prior merger transactions do not have an allocation in the allowance for loan losses as the performance of these loans remains satisfactory. The total valuation balances recorded against portfolio loans to adjusted gross portfolio loans¹ was 1.17% and 1.11% at March 31, 2016 and June 30, 2016, respectively.

Non-performing loans at June 30, 2016, which includes non-accrual loans and loans over 90 days past due still accruing interest decreased by $5.9 million to $79.6 million from the linked quarter. This was mainly due to the transfer to other real estate owned of residential mortgage loans and charge-offs.

⁽¹⁾ See a reconciliation of this non-GAAP financial measure on page 17.

Capital

($ in thousands, except share and per share data)	As of									Change % / bps
	6/30/2015			12/31/2015			6/30/2016			Y-o-Y		Six months
Total stockholders' equity	$	1,623,110		$	1,665,073		$	1,735,994		7.0	%	4.3	%
Goodwill and intangible assets		753,899			748,066			769,125		2.0		2.8
Tangible stockholders' equity	$	869,211		$	917,007		$	966,869		11.2		5.4
Common shares outstanding		129,709,834			130,006,926			130,620,463		0.7		0.5
Book value per share	$	12.51		$	12.81		$	13.29		6.2		3.7
Tangible book value per share		6.70			7.05			7.40		10.4		5.0
Tangible equity to tangible assets		8.04	%		8.18	%		7.89	%	(0.15	)	(0.29	)
Estimated Tier 1 leverage ratio - Company		12.92			9.03			8.37		(4.55	)	(0.66	)
Estimated Tier 1 leverage ratio - Bank		13.82			9.65			8.84		(4.98	)	(0.81	)

The $70.9 million increase in stockholders' equity at June 30, 2016 compared to December 31, 2015 was mainly the result of net income of $61.5 million and an increase in other comprehensive income of $23.1 million, which was primarily due to a change in the fair value of our available for sale securities portfolio, and stock option exercises and stock-based compensation, which totaled $4.5 million. These increases were partially offset by declared dividends of $18.2 million.

Total goodwill and other intangible assets were $769.1 million at June 30, 2016, an increase of $21.1 million compared to December 31, 2015, which was due to the NSBC acquisition and partially offset by amortization of $6.3 million.

For the quarter ended June 30, 2016, basic and diluted weighted average common shares outstanding increased to 130.1 million and 130.7 million, respectively, compared to 130.0 million basic shares and 130.5 million diluted shares, respectively, for the quarter ended March 31, 2016. Total common shares outstanding at June 30, 2016 were approximately 130.6 million.

Conference Call Information

Sterling Bancorp will host a teleconference and webcast on Wednesday, July 27, 2016 at 10:30 AM Eastern Time to discuss the Company's results. Interested parties are invited to listen to the webcast and view accompanying slides on the Company's website at www.sterlingbancorp.com. Analysts are invited to listen by dialing (888) 523-1225, Conference ID #6232464. A replay of the teleconference can be accessed through the Company's website.

About Sterling Bancorp

Sterling Bancorp, of which the principal subsidiary is Sterling National Bank, specializes in the delivery of service and solutions to business owners, their families and consumers within the communities we serve 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: our ability to successfully implement strategic initiatives, grow revenues faster than we grow expenses, and to integrate and fully realize cost savings and other benefits we estimate in connection with acquisitions; a deterioration in general economic conditions, either nationally, internationally, or in our market areas, including extended declines in the real estate market and constrained financial markets; inflation; the effects of, and changes in, trade; changes in asset quality and credit risk; introduction, withdrawal, success and timing of business initiatives; capital management activities; customer disintermediation; and the success of Sterling Bancorp in managing those risks. Other factors that could cause Sterling Bancorp's actual results to differ from those indicated in forward-looking statements are included in the "Risk Factors" section of Sterling Bancorp's filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the three and six months ended June 30, 2016. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the Quarterly Report on Form 10-Q to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.

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

				6/30/2015			12/31/2015			6/30/2016
Assets:
Cash and cash equivalents				$	362,856		$	229,513		$	258,326
Federal Funds Sold					3,571			-			-
Investment securities					2,666,610			2,643,823			2,980,059
Loans held for sale					73,523			34,110			57,249
Portfolio loans:
	Residential mortgage				725,803			713,036			673,208
	Commercial real estate				3,160,553			3,529,381			3,782,659
	Commercial and industrial				2,884,440			3,131,028			3,639,169
	Acquisition, development and construction				170,134			186,398			207,868
	Consumer				294,657			299,517			291,391
		Total portfolio loans, gross			7,235,587			7,859,360			8,594,295
	Allowance for loan losses				(44,317	)		(50,145	)		(55,865	)
		Total portfolio loans, net			7,191,270			7,809,215			8,538,430
FHLB and Federal Reserve Bank Stock, at cost					74,233			116,758			102,855
Accrued interest receivable					29,015			31,531			35,106
Premises and equipment, net					63,555			63,362			60,797
Goodwill					669,590			670,699			696,600
Other intangibles					84,309			77,367			72,525
Bank owned life insurance					196,629			196,288			196,665
Other real estate owned					9,575			14,614			16,590
Other assets					141,646			68,672			50,046
		Total assets		$	11,566,382		$	11,955,952		$	13,065,248
Liabilities:
Deposits				$	8,836,161		$	8,580,007		$	9,785,556
FHLB borrowings					777,047			1,409,885			1,074,492
Other borrowings					39,181			16,566			28,202
Senior notes					98,693			98,893			99,099
Subordinated notes					-			-			108,161
Mortgage escrow funds					12,142			13,778			14,283
Other liabilities					180,048			171,750			219,461
		Total liabilities			9,943,272			10,290,879			11,329,254
Stockholders' equity:
Common stock					1,367			1,367			1,367
Additional paid-in capital					1,507,837			1,506,612			1,503,027
Treasury stock					(78,972	)		(76,190	)		(69,355	)
Retained earnings					206,079			245,408			290,025
Accumulated other comprehensive (loss) income					(13,201	)		(12,124	)		10,930
		Total stockholders' equity			1,623,110			1,665,073			1,735,994
			Total liabilities and stockholders' equity	$	11,566,382		$	11,955,952		$	13,065,248

Shares of common stock outstanding at period end					129,709,834			130,006,926			130,620,463
Book value per share				$	12.51		$	12.81		$	13.29
Tangible book value per share					6.70			7.05			7.40

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

		For the Quarter Ended								For the Six Months Ended
		6/30/2015			3/31/2016			6/30/2016		6/30/2015		6/30/2016
Interest and dividend income:
	Loans and loan fees	$	59,744		$	89,034		$	96,658	$	115,015	$	185,692
	Securities taxable		8,423			12,016			10,662		16,054		22,678
	Securities non-taxable		2,900			3,879			5,871		5,768		9,750
	Other earning assets		880			1,077			1,118		1,782		2,195
	Total interest and dividend income		71,947			106,006			114,309		138,619		220,315
Interest expense:
	Deposits		3,359			6,409			8,328		6,452		14,737
	Borrowings		5,014			6,087			5,601		9,728		11,688
Total interest expense			8,373			12,496			13,929		16,180		26,425
Net interest income			63,574			93,510			100,380		122,439		193,890
Provision for loan losses			3,100			4,000			5,000		5,200		9,000
Net interest income after provision for loan losses			60,474			89,510			95,380		117,239		184,890
Non-interest income:
	Accounts receivable / factoring commissions and other fees		4,435			4,494			4,156		7,937		8,650
	Mortgage banking income		2,530			2,002			2,367		5,687		4,369
	Deposit fees and service charges		3,639			4,496			4,084		7,181		8,574
	Net gain (loss) on sale of securities		697			(283	)		4,474		2,231		4,191
	Bank owned life insurance		1,074			1,327			1,281		2,150		2,608
	Investment management fees		316			1,124			934		676		2,058
	Other		1,166			2,270			3,146		2,008		5,422
Total non-interest income			13,857			15,430			20,442		27,870		35,872
Non-interest expense:
	Compensation and benefits		22,667			30,020			31,336		45,833		61,356
	Stock-based compensation plans		1,128			1,540			1,747		2,236		3,287
	Occupancy and office operations		7,453			9,282			8,810		14,033		18,092
	Amortization of intangible assets		1,780			3,053			3,241		3,180		6,294
	FDIC insurance and regulatory assessments		1,384			2,258			2,300		2,812		4,558
	Other real estate owned, net		40			582			541		4		1,123
	Merger-related expenses		14,625			265			-		17,080		266
	Loss on extinguishment of FHLB borrowings		-			8,716			-		-		8,716
	Other		36,582			13,215			11,665		46,405		24,879
Total non-interest expense			85,659			68,931			59,640		131,583		128,571
(Loss) income before income tax expense			(11,328	)		36,009			56,182		13,526		92,191
Income tax (benefit) expense			(3,682	)		12,243			18,412		4,396		30,655
Net (loss) income		$	(7,646	)	$	23,766		$	37,770	$	9,130	$	61,536
Weighted average common shares:
	Basic		91,565,972			129,974,025			130,081,465		89,712,796		129,953,397
	Diluted		91,950,776			130,500,975			130,688,729		90,099,788		130,522,021
Earnings per common share:
	Basic (loss) earnings per share	$	(0.08	)	$	0.18		$	0.29	$	0.10	$	0.47
	Diluted (loss) earnings per share		(0.08	)		0.18			0.29		0.10		0.47
	Dividends declared per share		0.07			0.07			0.07		0.14		0.14

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				6/30/2015		9/30/2015		12/31/2015		3/31/2016		6/30/2016
Total assets				$	11,566,382	$	11,597,393	$	11,955,952	$	12,865,356	$	13,065,248
Tangible assets ⁽¹⁾					10,812,483		10,845,864		11,207,886		12,092,966		12,296,123
Securities available for sale					2,081,414		1,854,862		1,921,032		1,894,820		1,613,013
Securities held to maturity					585,196		673,130		722,791		952,922		1,367,046
Portfolio loans					7,235,587		7,525,632		7,859,360		8,286,163		8,594,295
Goodwill					669,590		670,699		670,699		696,600		696,600
Other intangibles					84,309		80,830		77,367		75,790		72,525
Deposits					8,836,161		8,805,411		8,580,007		9,328,622		9,785,547
Municipal deposits (included above)					1,212,624		1,352,846		1,140,206		1,285,263		1,184,231
Borrowings					914,921		948,048		1,525,344		1,675,508		1,309,954
Stockholders' equity					1,623,110		1,652,204		1,665,073		1,698,133		1,735,994
Tangible equity ⁽¹⁾					869,211		900,675		917,007		925,743		966,869
Quarterly Average Balances
Total assets					8,049,220		11,242,870		11,622,621		12,001,370		12,700,038
Tangible assets ⁽¹⁾					7,593,900		10,490,169		10,872,287		11,253,958		11,929,107
Loans, gross:
	Residential mortgage				539,569		780,373		777,561		755,564		729,685
	Commercial real estate				2,040,094		3,253,183		3,444,774		3,587,341		3,694,162
	Commercial and industrial:
		Commercial and industrial			966,411		1,295,034		1,378,642		1,381,107		1,456,402
		Asset based lending			297,846		303,387		304,113		304,779		636,383
		Payroll finance			170,905		175,240		199,856		192,428		187,887
		Warehouse lending			263,802		286,557		293,387		248,831		301,882
		Factored receivables			150,569		192,380		210,081		181,974		183,051
		Equipment financing			477,369		578,655		587,445		616,995		630,922
			Total commercial and industrial		2,326,902		2,831,253		2,973,524		2,926,114		3,396,527
	Acquisition, development and construction				97,197		173,898		181,550		179,420		197,489
	Consumer				202,044		292,852		281,242		297,028		295,666
Loans, total ⁽²⁾					5,205,806		7,331,559		7,658,651		7,745,467		8,313,529
Interest bearing cash and cash equivalents					114,128		211,723		168,199		296,668		272,426
Securities (taxable)					1,527,872		1,967,600		2,111,953		2,139,547		2,032,518
Securities (non-taxable)					380,544		446,875		429,633		593,777		837,133
Total earning assets					7,309,667		10,038,831		10,460,168		10,880,356		11,558,424
Deposits:
	Non-interest bearing demand				1,548,844		3,234,450		3,017,727		3,009,085		3,059,562
	Interest bearing demand				823,471		1,418,803		1,485,690		1,607,227		2,016,365
	Savings (including mortgage escrow funds)				802,956		950,709		962,766		814,485		809,123
	Money market				1,922,805		2,548,181		2,808,734		2,866,666		3,056,188
	Certificates of deposit				536,394		539,765		550,640		619,154		620,759
Total deposits and mortgage escrow					5,634,470		8,691,908		8,825,557		8,916,617		9,561,997
Borrowings					1,234,958		772,777		988,550		1,274,605		1,304,442
Stockholders' equity					1,100,897		1,639,458		1,661,282		1,686,274		1,711,902
Tangible equity ⁽¹⁾					645,577		886,757		910,948		938,862		940,971

⁽¹⁾ See a reconciliation of this Non-GAAP Financial Measure on page 15.
⁽²⁾ Includes loans held for sale, 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 Share Data	6/30/2015			9/30/2015			12/31/2015			3/31/2016			6/30/2016
Basic (loss) earnings per share	$	(0.08	)	$	0.19		$	0.25		$	0.18		$	0.29
Diluted (loss) earnings per share		(0.08	)		0.19			0.25			0.18			0.29
Adjusted diluted earnings per share, non-GAAP ⁽¹⁾		0.23			0.25			0.26			0.25			0.27
Dividends declared per share		0.07			0.07			0.07			0.07			0.07
Tangible book value per share		6.70			6.94			7.05			7.09			7.40
Shares of common stock o/s		129,709,834			129,769,569			130,006,926			130,548,989			130,620,463
Basic weighted average common shares o/s		91,565,972			129,733,911			129,812,551			129,974,025			130,081,465
Diluted weighted average common shares o/s		91,950,776			130,192,937			130,354,779			130,500,975			130,688,729
Performance Ratios (annualized)
Return on average assets		(0.38	)%		0.85	%		1.12	%		0.80	%		1.20	%
Return on average equity		(2.79	)%		5.85	%		7.83	%		5.67	%		8.87	%
Return on average tangible assets, as reported ⁽¹⁾		(0.40	)%		0.91	%		1.20	%		0.85	%		1.27	%
Return on average tangible equity, as reported ⁽¹⁾		(4.75	)%		10.82	%		14.28	%		10.18	%		16.14	%
Return on average tangible assets, as adjusted ⁽¹⁾		1.13	%		1.21	%		1.22	%		1.15	%		1.19	%
Return on average tangible equity, as adjusted ⁽¹⁾		13.27	%		14.33	%		14.60	%		13.78	%		15.14	%
Operating efficiency, as adjusted ⁽¹⁾		52.6	%		49.0	%		47.6	%		48.9	%		47.2	%
Analysis of Net Interest Income
Yield on loans		4.60	%		4.75	%		4.65	%		4.62	%		4.68	%
Yield on investment securities - tax equivalent ⁽²⁾		2.71	%		2.63	%		2.66	%		2.65	%		2.76	%
Yield on interest earning assets - tax equivalent ⁽²⁾		4.03	%		4.15	%		4.09	%		4.00	%		4.09	%
Cost of total deposits		0.24	%		0.24	%		0.26	%		0.29	%		0.35	%
Cost of borrowings		1.63	%		2.38	%		2.04	%		1.92	%		1.73	%
Cost of interest bearing liabilities		0.63	%		0.63	%		0.63	%		0.70	%		0.72	%
Net interest rate spread - tax equivalent basis ⁽²⁾		3.40	%		3.52	%		3.46	%		3.30	%		3.37	%
Net interest margin - GAAP basis		3.49	%		3.69	%		3.62	%		3.46	%		3.50	%
Net interest margin - tax equivalent basis ⁽²⁾		3.57	%		3.76	%		3.68	%		3.53	%		3.60	%
Capital
Tier 1 leverage ratio - Company ⁽³⁾		12.92	%		9.12	%		9.03	%		8.61	%		8.37	%
Tier 1 leverage ratio - Bank only ⁽³⁾		13.82	%		9.80	%		9.65	%		9.16	%		8.84	%
Tier 1 risk-based capital ratio - Bank only ⁽³⁾		11.98	%		11.79	%		11.45	%		10.89	%		10.52	%
Total risk-based capital ratio - Bank only ⁽³⁾		12.51	%		12.34	%		12.00	%		12.60	%		12.15	%
Tangible equity to tangible assets - Company ⁽¹⁾		8.04	%		8.30	%		8.18	%		7.66	%		7.86	%
Condensed Five Quarter Income Statement
Interest and dividend income	$	71,947		$	103,298		$	106,224		$	106,006		$	114,309
Interest expense		8,373			9,944			10,803			12,496			13,929
Net interest income		63,574			93,354			95,421			93,510			100,380
Provision for loan losses		3,100			5,000			5,500			4,000			5,000
Net interest income after provision for loan losses		60,474			88,354			89,921			89,510			95,380
Non-interest income		13,857			18,802			16,081			15,430			20,442
Non-interest expense		85,659			71,315			57,419			68,931			59,640
(Loss) income before income tax expense		(11,328	)		35,841			48,583			36,009			56,182
Income tax (benefit) expense		(3,682	)		11,648			15,792			12,243			18,412
Net (loss) income	$	(7,646	)	$	24,193		$	32,791		$	23,766		$	37,770

⁽¹⁾ See a reconciliation of Non-GAAP Financial Measures beginning on page 15.
⁽²⁾ Tax equivalent adjustment represents interest income earned on municipal securities divided by the applicable Federal tax rate of 35%.
⁽³⁾ Regulatory 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			6/30/2015			9/30/2015			12/31/2015			3/31/2016			6/30/2016
Balance, beginning of period			$	42,884		$	44,317		$	47,611		$	50,145		$	53,014
Provision for loan losses				3,100			5,000			5,500			4,000			5,000
Loan charge-offs:
	Commercial & industrial			(228	)		(224	)		(281	)		(489	)		(429	)
	Payroll finance			(59	)		(44	)		-			-			(28	)
	Warehouse lending			-			-			-			-			-
	Factored receivables			(146	)		(52	)		(21	)		(81	)		(792	)
	Equipment financing			(438	)		(1,369	)		(1,463	)		(457	)		(572	)
	Commercial real estate			(276	)		(223	)		(1,134	)		(4	)		(100	)
	Multi-family			-			-			-			-			(18	)
	Acquisition development & construction			-			-			-			-			-
	Residential mortgage			-			(546	)		(524	)		(224	)		(209	)
	Consumer			(821	)		(387	)		(810	)		(511	)		(532	)
		Total charge offs		(1,968	)		(2,845	)		(4,233	)		(1,766	)		(2,680	)
Recoveries of loans previously charged-off:
	Commercial & industrial			163			781			675			329			199
	Payroll finance			-			-			24			4			28
	Warehouse lending			-			-			-			-			-
	Factored receivables			9			18			14			24			17
	Equipment financing			96			148			409			108			102
	Commercial real estate			-			76			56			21			53
	Multi-family			-			-			9			2			-
	Acquisition development & construction			-			-			43			-			104
	Residential mortgage			9			81			-			28			1
	Consumer			24			35			37			119			27
		Total recoveries		301			1,139			1,267			635			531
Net loan charge-offs				(1,667	)		(1,706	)		(2,966	)		(1,131	)		(2,149	)
Balance, end of period			$	44,317		$	47,611		$	50,145		$	53,014		$	55,865
Asset Quality Data and Ratios
Non-performing loans ("NPLs") non-accrual			$	68,419		$	67,390		$	65,737		$	84,436		$	79,036
NPLs still accruing				611			282			674			1,002			528
		Total NPLs		69,030			67,672			66,411			85,438			79,564
	Other real estate owned			9,575			11,831			14,614			14,527			16,590
	Non-performing assets ("NPAs")		$	78,605		$	79,503		$	81,025		$	99,965		$	96,154
	Loans 30 to 89 days past due		$	40,957		$	30,881		$	67,996		$	19,168		$	18,803
	Net charge-offs as a % of average loans (annualized)			0.13	%		0.09	%		0.15	%		0.06	%		0.10	%
	NPLs as a % of total loans			0.95			0.90			0.84			1.03			0.93
	NPAs as a % of total assets			0.68			0.69			0.68			0.78			0.74
	Allowance for loan losses as a % of NPLs			64.2			70.4			75.5			62.0			70.2
	Allowance for loan losses as a % of total loans			0.61			0.63			0.64			0.64			0.65
	Total valuation balances recorded against portfolio loans to adjusted gross portfolio loans ⁽¹⁾			1.36			1.28			1.16			1.17			1.11
	Special mention loans		$	65,421		$	91,076		$	68,003		$	101,560		$	103,710
	Substandard loans			125,602			120,684			129,665			131,919			125,571
	Doubtful loans			392			152			713			556			330

⁽¹⁾ See a reconciliation of this non-GAAP measure on page 17.

Sterling Bancorp and Subsidiaries
QUARTERLY YIELD TABLE
(unaudited, in thousands, except share and per share data)

			For the Quarter Ended
			March 31, 2016								June 30, 2016
			Average balance			Interest			Yield/Rate		Average balance			Interest			Yield/Rate
			(Dollars in thousands)
Interest earning assets:
	Commercial loans		$	6,692,875		$	78,137		4.70	%	$	7,288,178		$	86,206		4.76	%
	Consumer loans			297,028			3,296		4.46	%		295,666			3,391		4.61	%
	Residential mortgage loans			755,564			7,601		4.02	%		729,685			7,061		3.87	%
Total net loans ⁽¹⁾				7,745,467			89,034		4.62	%		8,313,529			96,658		4.68	%
	Securities taxable			2,139,547			12,016		2.26	%		2,032,518			10,662		2.11	%
	Securities non-taxable			593,777			5,968		4.04	%		837,133			9,032		4.34	%
	Interest earning deposits			296,668			311		0.42	%		272,426			258		0.38	%
	FHLB and Federal Reserve Bank stock			104,897			766		2.94	%		102,818			860		3.36	%
		Total securities and other earning assets		3,134,889			19,061		2.45	%		3,244,895			20,812		2.58	%
	Total interest earning assets			10,880,356			108,095		4.00	%		11,558,424			117,470		4.09	%
Non-interest earning assets				1,121,014								1,141,614
Total assets			$	12,001,370							$	12,700,038
Interest bearing liabilities:
	Demand deposits		$	1,607,227		$	1,004		0.25	%	$	2,016,365		$	1,994		0.40	%
	Savings deposits ⁽²⁾			814,485			606		0.30	%		809,123			841		0.42	%
	Money market deposits			2,866,666			3,672		0.52	%		3,056,188			4,152		0.55	%
	Certificates of deposit			619,154			1,127		0.73	%		620,759			1,341		0.87	%
Total interest bearing deposits				5,907,532			6,409		0.44	%		6,502,435			8,328		0.52	%
	Senior notes			98,928			1,478		5.98	%		99,032			1,478		5.97	%
	Other borrowings			1,172,112			4,560		1.56	%		1,097,270			2,642		0.97	%
	Subordinated notes			3,565			49		5.50	%		108,140			1,481		5.48	%
		Total borrowings		1,274,605			6,087		1.92	%		1,304,442			5,601		1.73	%
	Total interest bearing liabilities			7,182,137			12,496		0.70	%		7,806,877			13,929		0.72	%
Non-interest bearing deposits				3,009,085								3,059,562
Other non-interest bearing liabilities				123,874								121,697
Total liabilities				10,315,096								10,988,136
	Stockholders' equity			1,686,274								1,711,902
Total liabilities and stockholders' equity			$	12,001,370							$	12,700,038
Net interest rate spread ⁽³⁾									3.30	%							3.37	%
Net interest earning assets ⁽⁴⁾			$	3,698,219							$	3,751,547
Net interest margin - tax equivalent							95,599		3.53	%					103,541		3.60	%
Less tax equivalent adjustment							(2,089	)							(3,161	)
Net interest income						$	93,510							$	100,380
Ratio of interest earning assets to interest bearing liabilities				151.5	%							148.1	%

⁽¹⁾ Average balances include the effect of net deferred loan origination fees and costs, allowance for loan losses 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
			June 30, 2015								June 30, 2016
			Average balance			Interest			Yield/Rate		Average balance			Interest			Yield/Rate
			(Dollars in thousands)
Interest earning assets:
	Commercial loans		$	4,464,193		$	51,805		4.65	%	$	7,288,178		$	86,206		4.76	%
	Consumer loans			202,044			1,975		3.92	%		295,666			3,391		4.61	%
	Residential mortgage loans			539,569			5,964		4.43	%		729,685			7,061		3.87	%
Total net loans ⁽¹⁾				5,205,806			59,744		4.60	%		8,313,529			96,658		4.68	%
	Securities taxable			1,527,872			8,423		2.21	%		2,032,518			10,662		2.11	%
	Securities non-taxable			380,544			4,462		4.70	%		837,133			9,032		4.34	%
	Interest earning deposits			114,128			48		0.17	%		272,426			258		0.38	%
	FHLB and Federal Reserve Bank stock			81,317			832		4.10	%		102,818			860		3.36	%
		Total securities and other earning assets		2,103,861			13,765		2.62	%		3,244,895			20,812		2.58	%
	Total interest earning assets			7,309,667			73,509		4.03	%		11,558,424			117,470		4.09	%
Non-interest earning assets				739,553								1,141,614
Total assets			$	8,049,220							$	12,700,038
Interest bearing liabilities:
	Demand deposits		$	823,471		$	207		0.10	%	$	2,016,365		$	1,994		0.40	%
	Savings deposits ⁽²⁾			802,956			482		0.24	%		809,123			841		0.42	%
	Money market deposits			1,922,805			1,931		0.40	%		3,056,188			4,152		0.55	%
	Certificates of deposit			536,394			739		0.55	%		620,759			1,341		0.87	%
Total interest bearing deposits				4,085,626			3,359		0.33	%		6,502,435			8,328		0.52	%
	Senior notes			98,629			1,473		5.99	%		99,032			1,478		5.97	%
	Other borrowings			1,136,329			3,541		1.25	%		1,097,270			2,642		0.97	%
	Subordinated notes			-			-		-	%		108,140			1,481		5.48	%
		Total borrowings		1,234,958			5,014		1.63	%		1,304,442			5,601		1.73	%
	Total interest bearing liabilities			5,320,584			8,373		0.63	%		7,806,877			13,929		0.72	%
Non-interest bearing deposits				1,548,844								3,059,562
Other non-interest bearing liabilities				78,895								121,697
Total liabilities				6,948,323								10,988,136
	Stockholders' equity			1,100,897								1,711,902
Total liabilities and stockholders' equity			$	8,049,220							$	12,700,038
Net interest rate spread ⁽³⁾									3.40	%							3.37	%
Net interest earning assets ⁽⁴⁾			$	1,989,083							$	3,751,547
Net interest margin - tax equivalent							65,136		3.57	%					103,541		3.60	%
Less tax equivalent adjustment							(1,562	)							(3,161	)
Net interest income						$	63,574							$	100,380
Ratio of interest earning assets to interest bearing liabilities				137.4	%							148.1	%

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 Financial Measures as management believes this information is useful to investors. See legend on page 17.

	As of and for the Quarter Ended
	6/30/2015			9/30/2015			12/31/2015			3/31/2016			6/30/2016

The following table shows the reconciliation of stockholders' equity to tangible equity and the tangible equity ratio⁽¹⁾:

Total assets	$	11,566,382		$	11,597,393		$	11,955,952		$	12,865,356		$	13,065,248
Goodwill and other intangibles		(753,899	)		(751,529	)		(748,066	)		(772,390	)		(769,125	)
Tangible assets		10,812,483			10,845,864			11,207,886			12,092,966			12,296,123
Stockholders' equity		1,623,110			1,652,204			1,665,073			1,698,133			1,735,994
Goodwill and other intangibles		(753,899	)		(751,529	)		(748,066	)		(772,390	)		(769,125	)
Tangible stockholders' equity		869,211			900,675			917,007			925,743			966,869
Common stock outstanding at period end		129,709,834			129,769,569			130,006,926			130,548,989			130,620,463
Stockholders' equity as a % of total assets		14.03	%		14.25	%		13.93	%		13.20	%		13.29	%
Book value per share	$	12.51		$	12.73		$	12.81		$	13.01		$	13.29
Tangible equity as a % of tangible assets		8.04	%		8.30	%		8.18	%		7.66	%		7.86	%
Tangible book value per share	$	6.70		$	6.94		$	7.05		$	7.09		$	7.40


The following table shows the reconciliation of reported return on average tangible equity and adjusted return on average tangible equity⁽²⁾:

Average stockholders' equity	$	1,100,897		$	1,639,458		$	1,661,282		$	1,686,274		$	1,711,902
Average goodwill and other intangibles		(455,320	)		(752,701	)		(750,334	)		(747,412	)		(770,931	)
Average tangible stockholders' equity		645,577			886,757			910,948			938,862			940,971
Net (loss) income		(7,646	)		24,193			32,791			23,766			37,770
Net (loss) income, if annualized		(30,668	)		95,983			130,095			95,586			151,910
Reported return on average tangible equity		(4.75	)%		10.82	%		14.28	%		10.18	%		16.14	%
Adjusted net income (see reconciliation on page 16)	$	21,361		$	32,035		$	33,525		$	32,159		$	35,414
Annualized adjusted net income		85,679			127,095			133,007			129,343			142,434
Adjusted return on average tangible equity		13.27	%		14.33	%		14.60	%		13.78	%		15.14	%


The following table shows the reconciliation of reported return on tangible assets and adjusted return on tangible assets^(3):

Average assets	$	8,049,220		$	11,242,870		$	11,622,621		$	12,001,370		$	12,700,038
Average goodwill and other intangibles		(455,320	)		(752,701	)		(750,334	)		(747,412	)		(770,931	)
Average tangible assets		7,593,900			10,490,169			10,872,287			11,253,958			11,929,107
Net (loss) income		(7,646	)		24,193			32,791			23,766			37,770
Net (loss) income, if annualized		(30,668	)		95,983			130,095			95,586			151,910
Reported return on average tangible assets		(0.40	)%		0.91	%		1.20	%		0.85	%		1.27	%
Adjusted net income (see reconciliation on page 16)	$	21,361		$	32,035		$	33,525		$	32,159		$	35,414
Annualized adjusted net income		85,679			127,095			133,007			129,343			142,434
Adjusted return on average tangible assets		1.13	%		1.21	%		1.22	%		1.15	%		1.19	%

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 measures as management believes this information is useful to investors. See legend on page 17.

	As of and for the Quarter Ended
	6/30/2015			9/30/2015			12/31/2015			3/31/2016			6/30/2016

The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio⁽⁴⁾:

Net interest income	$	63,574		$	93,354		$	95,421		$	93,510		$	100,379
Non-interest income		13,857			18,802			16,081			15,430			20,445
Total net revenue		77,431			112,156			111,502			108,940			120,824
Tax equivalent adjustment on securities interest income		1,562			1,707			1,692			2,091			3,161
Net (gain) loss on sale of securities		(697	)		(2,726	)		121			283			(4,474	)
Adjusted total revenue		78,296			111,137			113,315			111,314			119,511
Non-interest expense		85,659			71,315			57,419			68,931			59,639
Merger-related expense		(14,625	)		-			-			(265	)		-
Charge for asset write-downs, banking systems conversion, retention and severance		(28,055	)		-			-			(2,485	)		-
Charge on benefit plan settlement		-			(13,384	)		-			-			-
Loss on extinguishment of FHLB borrowings		-			-			-			(8,716	)		-
Amortization of intangible assets		(1,780	)		(3,431	)		(3,431	)		(3,053	)		(3,241	)
Adjusted non-interest expense		41,199			54,500			53,988			54,412			56,398
Reported operating efficiency ratio		110.6	%		63.6	%		51.5	%		63.3	%		49.4	%
Adjusted operating efficiency ratio		52.6	%		49.0	%		47.6	%		48.9	%		47.2	%

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

(Loss) income before income tax expense	$	(11,328	)	$	35,841		$	48,583		$	36,009		$	56,182
Income tax (benefit) expense		(3,682	)		11,648			15,792			12,243			18,412
Net (loss) income (GAAP)		(7,646	)		24,193			32,791			23,766			37,770

Adjustments:
Net (gain) loss on sale of securities		(697	)		(2,726	)		121			283			(4,474	)
Merger-related expense		14,625			-			-			265			-
Charge for asset write-downs, banking systems conversion, retention and severance		28,055			-			-			2,485			-
Charge on benefit plan settlement		-			13,384			-			-			-
Loss on extinguishment of FHLB borrowings		-			-			-			8,716			-
Amortization of non-compete agreements and acquired customer list intangible assets		991			961			961			968			969
Total adjustments		42,974			11,619			1,082			12,717			(3,505	)
Income tax (benefit) expense		(13,967	)		(3,777	)		(348	)		(4,324	)		1,149
Total adjustments net of taxes		29,007			7,842			734			8,393			(2,356	)
Adjusted net income (non-GAAP)	$	21,361		$	32,035		$	33,525		$	32,159		$	35,414

Weighted average diluted shares		91,950,776			130,192,937			130,354,779			130,500,975			130,688,729
Diluted EPS as reported (GAAP)	$	(0.08	)	$	0.19		$	0.25		$	0.18		$	0.29
Adjusted diluted EPS (non-GAAP)		0.23			0.25			0.26			0.25			0.27

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 measures as management believes this information is useful to investors. See legend below.

			As of and for the Quarter Ended
			6/30/2015			9/30/2015			12/31/2015			3/31/2016			6/30/2016

The following table shows a reconciliation of the allowance for loan losses and remaining purchase accounting adjustments to portfolio loans⁽⁶⁾:
Allowance for loan losses			$	44,317		$	47,611		$	50,145		$	53,014		$	55,865
Remaining purchase accounting adjustments:
	Acquired performing loans			36,889			31,364			24,766			27,340			23,802
	Purchased credit impaired loans			18,014			17,783			16,617			16,862			15,955
	Total remaining purchase accounting adjustments			54,903			49,147			41,383			44,202			39,757
		Total valuation balances recorded against portfolio loans	$	99,220		$	96,758		$	91,528		$	97,216		$	95,622

Total portfolio loans, gross			$	7,235,587		$	7,525,632		$	7,859,360		$	8,286,163		$	8,594,295
Remaining purchase accounting adjustments:
	Acquired performing loans			36,889			31,364			24,766			27,340			23,802
	Purchased credit impaired loans			18,014			17,783			16,617			16,862			15,955
Adjusted portfolio loans, gross			$	7,290,490		$	7,574,779		$	7,900,743		$	8,330,365		$	8,634,052
Allowance for loan losses to total portfolio loans, gross				0.61	%		0.63	%		0.64	%		0.64	%		0.65	%
Total valuation balances recorded against portfolio loans to adjusted gross portfolio loans				1.36	%		1.28	%		1.16	%		1.17	%		1.11	%

The non-GAAP measures presented above are used by management and the 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 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.

⁽¹⁾ Stockholders' equity as a percentage of total assets, book value per share, tangible equity as a percentage of total assets and tangible book value equity 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 equity and adjusted return on average tangible equity measures provide information to evaluate the use of our tangible equity.

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

⁽⁴⁾ The adjusted operating efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense by total net revenue. The adjusted operating efficiency ratio is a measure we use to assess our operating performance.

⁽⁵⁾ Adjusted net income and adjusted 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.

⁽⁶⁾ The reconciliation of the allowance for loan losses and remaining purchase accounting adjustments to portfolio loans provides information to evaluate the impact of purchase accounting adjustments and the allowance for loan losses on our portfolio loans. In purchase accounting, the prior allowance for loan losses is not carried over, and in place, we are required to estimate the fair value of the loan which includes an estimate of life of loan losses on the portfolio, which is included as a purchase discount within the acquired loan population.

Contact Information:

STERLING BANCORP CONTACT:
Luis Massiani, SEVP & Chief Financial Officer
845.369.8040

Sterling Bancorp
400 Rella Boulevard
Montebello, NY 10901-4243

T 845.369.8040
F 845.369.8255

www.sterlingbancorp.com

Sterling Bancorp Announces Record Results for the Three and Six Months Ended June 30, 2016. Strong Operating Momentum in the Second Quarter Continues, Highlighted by GAAP Diluted Earnings per Share of $0.29, Adjusted Diluted Earnings per Share(1) of $0.27