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

Company Release - 1/22/2020 4:10 PM ET

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


($ in thousands except per share amounts)GAAP / As Reported
 Non-GAAP / As Adjusted1
 12/31/2018 12/31/2019 Change
% / bps
 12/31/2018 12/31/2019 Change
% / bps
Total revenue2$1,070,600  $1,049,788  (1.9)% $1,085,819  $1,051,395  (3.2)%
Net income available to common 439,276   419,108  (4.6)  449,645   426,891  (5.1)
Diluted EPS available to common 1.95   2.03  4.1   2.00   2.07  3.5 
Net interest margin3 3.51%  3.43% (8)  3.57%  3.49% (8)
Return on average tangible common equity 17.87   16.42  (145)  18.29   16.73  (156)
Return on average tangible assets 1.51   1.48  (3)  1.55   1.51  (4)
Tangible book value per common share1$11.78  $13.09  11.1% $11.78  $13.09  11.1%
  • Net income available to common stockholders of $419.1 million (as reported) and $426.9 million (as adjusted).
  • Total commercial loans of $19.0 billion at December 31, 2019; growth of 17.2% over December 31, 2018.
  • Operating efficiency ratio of 44.2% (as reported) and 40.1% (as adjusted)4.
  • Repurchased 19,312,694 common shares in 2019 at a weighted average price of $19.83 per share.
  • Tangible book value per common share1 of $13.09; growth of 11.1% over December 31, 2018.

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

($ in thousands except per share amounts)GAAP / As Reported
 Non-GAAP / As Adjusted1
 12/31/2018
 
12/31/2019
 Change
% / bps
 12/31/2018
 12/31/2019 Change
% / bps
Total revenue2$265,346  $260,638  (1.8)% $274,247  $264,457  (3.6)%
Net income available to common 112,501   104,722  (6.9)  116,458   108,855  (6.5)
Diluted EPS available to common 0.51   0.52  2.0   0.52   0.54  3.8 
Net interest margin3 3.48%  3.37% (11)  3.53%  3.42% (11)
Return on average tangible common equity 17.56   15.94  (162)  18.17   16.57  (160)
Return on average tangible assets 1.53   1.45  (8)  1.58   1.51  (7)
  • Growth in commercial loans of $791.3 million over linked quarter; 17.2% annualized growth rate.
  • Total deposits were $22.4 billion with a cost of 0.89%.  Municipal deposit balances decreased by $246.6 million.
  • Decrease in total interest expense of $4.7 million and decrease in total funding liabilities of 10 basis points relative to linked quarter.
  • Excluding accretion income on acquired loans, net interest margin was 3.13%.
  • Consolidated five financial centers in the fourth quarter of 2019; a total of 24 consolidated in 2019. Total of 82 financial centers open as of December 31, 2019.
  • Issued $275.0 million of Tier 2 regulatory capital qualifying subordinated notes.
  • Completed the previously announced acquisition of an $838.9 million equipment finance loan and lease portfolio.
1. Non-GAAP / as adjusted measures are defined in the non-GAAP tables beginning on page 18.
2. Total revenue is equal to net interest income plus non-interest income. Total revenue as adjusted is equal to tax equivalent net interest income  plus non-interest income excluding securities gains and losses and gain on termination of a pension plan.
3. Net interest margin is equal to net interest income divided by average interest earning assets. Net interest margin as adjusted, or tax equivalent net interest margin, is equal to net interest income plus the tax equivalent adjustment for tax exempt securities divided by average interest earning assets. The tax equivalent adjustment assumes a 21% federal tax rate in all periods presented.
4. Operating efficiency ratio is a non-GAAP measure. See page 21 for an explanation of the operating efficiency ratio.

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

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

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

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

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

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

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

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

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

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“We have created a Company with significant operating flexibility and are confident that our business mix, growth strategy and strong capital position will allow us to continue generating superior returns and earnings per share growth. We would like to thank our clients, colleagues and shareholders for your support and look forward to working with all of our partners as we continue to build a great company.

“Lastly, we have declared a dividend on our common stock of $0.07 per share payable on February 18, 2020 to holders of record as of February 3, 2020.”

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

  • a pre-tax charge of $5.1 million for asset write-downs, systems integration, retention and severance related to the equipment finance loan portfolio acquisition;
  • a pre-tax loss of $280 thousand related to the termination of the legacy Astoria defined benefit pension plan;
  • a pre-tax loss of $76 thousand on the sale of available for sale securities; and
  • the pre-tax amortization of non-compete agreements and acquired customer list intangible assets of $200 thousand.

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

Non-GAAP financial measures include references to the terms “adjusted” or “excluding”. See the reconciliation of the Company’s non-GAAP financial measures beginning on page 18.

Net Interest Income and Margin

($ in thousands)For the three months ended Change % / bps
 12/31/2018 9/30/2019 12/31/2019 Y-o-Y Linked Qtr
Interest and dividend income$313,197  $295,209  $295,474  (5.7%) 0.1%
Interest expense70,326  71,888  67,217  (4.4) (6.5)
Net interest income$242,871  $223,321  $228,257  (6.0) 2.2 
          
Accretion income on acquired loans$27,016  $17,973  $19,497  (27.8)% 8.5%
Yield on loans5.07% 4.97% 4.84% (23) (13)
Tax equivalent yield on investment securities2.92  2.85  2.89  (3) 4 
Tax equivalent yield on interest earning assets4.54  4.50  4.41  (13) (9)
Cost of total deposits0.77  0.92  0.89  12  (3)
Cost of interest bearing deposits0.97  1.16  1.10  13  (6)
Cost of borrowings2.43  2.41  2.38  (5) (3)
Cost of interest bearing liabilities1.28  1.40  1.28    (12)
Total cost of funding liabilities51.07  1.16  1.06  (1) (10)
Tax equivalent net interest margin63.53  3.42  3.42  (11)  
          
Average commercial loans$15,741,665  $17,596,552  $18,473,473  17.4% 5.0%
Average loans, including loans held for sale20,389,223  20,302,887  21,000,949  3.0  3.4 
Average cash balances291,460  304,820  573,861  96.9  88.3 
Average investment securities6,685,989  5,439,886  5,064,936  (24.2) (6.9)
Average total interest earning assets27,710,655  26,354,394  26,901,439  (2.9) 2.1 
Average deposits and mortgage escrow21,352,428  20,749,885  22,289,097  4.4  7.4 

Include 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.

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

  • The yield on loans was 4.84% compared to 5.07% for the three months ended December 31, 2018. The decrease in yield on loans was mainly due to the decline in accretion income on acquired loans, which was $19.5 million in the fourth quarter of 2019 compared to $27.0 million in the fourth quarter of 2018. The decrease in yield on loans was also due to the decline in market interest rates during 2019.
  • The tax equivalent yield on investment securities was 2.89% compared to 2.92% for the three months ended December 31, 2018. Average investment securities were $5.1 billion, or 18.8%, of average total interest earning assets for the fourth quarter of 2019 compared to $6.7 billion, or 24.1%, of average total interest earning assets for the fourth quarter of 2018. The decline in the average balance of investment securities was mainly due to our balance sheet transition strategy.
  • In the fourth quarter of 2019, average cash balances were $573.9 million compared to $291.5 million in the fourth quarter of 2018. We maintained higher cash in the fourth quarter of 2019 in anticipation of closing the equipment finance loan portfolio acquisition. We estimate the increased level of cash on hand had an unfavorable impact on our tax equivalent net interest margin of approximately four basis points.
  • The tax equivalent yield on interest earning assets decreased thirteen basis points to 4.41%.
  • The cost of total deposits was 89 basis points for the fourth quarter of 2019 compared to 77 basis points for the same period a year ago. The increase was mainly due to interest rate market conditions and competitive dynamics in our deposit markets.
  • The cost of borrowings was 2.38% for the fourth quarter of 2019 compared to 2.43% for the same period a year ago. The decline in cost of borrowings was mainly due to the maturity of higher cost Federal Home Loan Bank (“FHLB”) borrowings.
  • The total cost of interest bearing liabilities was unchanged at 1.28%, which was mainly due to the factors discussed above.
  • Average interest bearing deposits increased by $899.3 million and average borrowings decreased $1.8 billion compared to the fourth quarter of 2018.
  • Total interest expense decreased by $3.1 million compared to the fourth quarter of 2018.

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

Fourth quarter 2019 compared with linked quarter ended September 30, 2019
Net interest income increased $4.9 million for the quarter ended December 31, 2019 compared to the linked quarter. The increase in net interest income was mainly due to a decrease in interest expense on borrowings as a result of lower rates paid on borrowings and lower average balances. Other key components of the changes in net interest income and net interest margin for the fourth quarter of 2019 compared to the linked quarter were the following:

  • The yield on loans was 4.84% compared to 4.97% for the linked quarter. The decrease in the yield on loans was mainly due to the decline in market interest rates between the periods. Accretion income on acquired loans increased $1.5 million to $19.5 million for the fourth quarter of 2019 compared to $18.0 million in the linked quarter, which was mainly due to the pay-off of one purchase credit impaired loan.
  • The average balance of commercial loans increased by $876.9 million and the average balance of residential mortgage loans declined by $159.7 million, both compared to the linked quarter.
  • The tax equivalent yield on investment securities was 2.89% compared to 2.85% for the linked quarter. The increase in yield was mainly due to earlier sales of lower yielding securities.
  • The tax equivalent yield on interest earning assets was 4.41% compared to 4.50% in the linked quarter.
  • The cost of total deposits decreased three basis points to 89 basis points, mainly due to improving market conditions in our deposit markets and our pricing strategies. The total cost of borrowings declined three basis points to 2.38% due to changes in market rates of interest and maturities of higher cost FHLB borrowings.
  • Average interest bearing deposits increased by $1.4 billion and average borrowings decreased by $982.4 million relative to the linked quarter. The increase in average deposits was due to growth in commercial and consumer deposits of $297.3 million, on-line deposit growth of $314.5 million, growth in municipal deposits of $257.0 million, and growth in wholesale deposits of $534.0 million.

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

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

Non-interest Income

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

Fourth quarter 2019 compared with fourth quarter 2018
Adjusted non-interest income increased $5.4 million in the fourth quarter of 2019 to $32.7 million, compared to $27.4 million in the same quarter last year. The change was mainly due to higher loan commissions and fees generated by our commercial banking teams and income from bank owned life insurance (“BOLI”).

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

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

Fourth quarter 2019 compared with linked quarter ended September 30, 2019
Adjusted non-interest income decreased approximately $114 thousand from $32.9 million in the linked quarter to $32.7 million in the fourth quarter of 2019. The decrease was due to a decline in BOLI income. BOLI income was $8.1 million in the third quarter of 2019 and $4.8 million in the fourth quarter of 2019. BOLI income in the third quarter of 2019 included the restructuring of the BOLI assets acquired in the Astoria Merger. Other commissions and loan fees increased by $2.4 million in the fourth quarter of 2019, substantially offsetting the decline in BOLI income. The increase in other commissions and loan fees was driven by loan sales and syndications in our public sector finance and equipment finance loan portfolios.

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Non-interest Expense

($ in thousands)For the three months ended Change % / bps
 12/31/2018 9/30/2019 12/31/2019 Y-o-Y Linked Qtr
Compensation and benefits$54,677  $52,850  $52,453  (4.1)% (0.8)%
Stock-based compensation plans3,679  4,565  5,180  40.8  13.5 
Occupancy and office operations16,579  15,836  15,886  (4.2) 0.3 
Information technology8,761  8,545  9,313  6.3  9.0 
Amortization of intangible assets5,865  4,785  4,785  (18.4)  
FDIC insurance and regulatory assessments3,608  3,194  3,134  (13.1) (1.9)
Other real estate owned (“OREO”), net15  79  (132) (980.0) (267.1)
Charge for asset write-downs, systems integration, retention and severance    5,133  NM  NM 
Other expenses16,737  16,601  19,698  17.7  18.7 
Total non-interest expense$109,921  $106,455  $115,450  5.0  8.4 
Full time equivalent employees (“FTEs”) at period end1,907  1,689  1,639  (14.1) (3.0)
Financial centers at period end106  87  82  (22.6) (5.7)
Operating efficiency ratio, as reported41.4% 38.7% 44.3% (290) (560)
Operating efficiency ratio, as adjusted38.0  39.1  39.9  (190) (80)

Fourth quarter 2019 compared with fourth quarter 2018
Total non-interest expense increased $5.5 million relative to the fourth quarter of 2018. Key components of the change in non-interest expense between the periods were the following:

  • Compensation and benefits decreased $2.2 million, mainly due to a decline in total FTEs between the periods. Total FTEs declined to 1,639 from 1,907, which was mainly due to our ongoing financial center consolidation strategy following the Astoria Merger. This was partially offset by the hiring of commercial bankers, business development officers and risk management personnel.
  • Occupancy and office operations expense decreased $693 thousand, mainly due to the consolidation of financial centers and other back-office locations. We consolidated a total of 24 locations in 2019.
  • Information technology expense increased $552 thousand, mainly due to incremental costs incurred for automation and information security.
  • FDIC insurance and regulatory assessments decreased $474 thousand to $3.1 million in the fourth quarter of 2019, compared to $3.6 million in the fourth quarter of 2018. The decrease was a result of a reduction in FDIC deposit insurance assessments, which was mainly due to the termination of the quarterly Deposit Insurance Fund surcharge that was assessed to institutions with $10 billion or more in assets in 2018.
  • OREO expense, net, declined $147 thousand to income of $132 thousand for the fourth quarter of 2019. In the fourth quarter of 2019, OREO expense, net, included gain on sale of $542 thousand, which was offset by $217 thousand of write-downs and $242 thousand of operating costs.
  • Other expenses increased $3.0 million to $19.7 million, which was mainly due to higher marketing expense, higher professional fees and net costs related to retirement plans. The increase in marketing expense was due to deposit gathering strategies, client communications and our website redesign. The increase in professional fees was mainly due to loan collection matters.

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

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

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

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

Key Balance Sheet Highlights as of December 31, 2019

($ in thousands)As of Change % / bps
 12/31/2018 9/30/2019 12/31/2019 Y-o-Y Linked Qtr
Total assets$31,383,307  $30,077,665  $30,586,497  (2.5)% 1.7%
Total portfolio loans, gross19,218,530  20,830,163  21,440,212  11.6  2.9 
Commercial & industrial (“C&I”) loans6,533,386  7,792,569  8,232,719  26.0  5.6 
Commercial real estate loans (including multi-family)9,406,541  9,977,839  10,295,518  9.5  3.2 
Acquisition, development and construction (“ADC”) loans267,754  433,883  467,331  74.5  7.7 
Total commercial loans16,207,681  18,204,291  18,995,568  17.2  4.3 
Residential mortgage loans2,705,226  2,370,216  2,210,112  (18.3) (6.8)
BOLI653,995  609,720  613,848  (6.1) 0.7 
Core deposits719,998,967  20,296,395  20,548,459  2.7  1.2 
Total deposits21,214,148  21,579,324  22,418,658  5.7  3.9 
Municipal deposits (included in core deposits)1,751,670  2,234,630  1,988,047  13.5  (11.0)
Investment securities6,667,180  5,047,011  5,075,309  (23.9) 0.6 
Total borrowings5,214,183  3,174,224  2,885,958  (44.7) (9.1)
Loans to deposits90.6% 96.5% 95.6% 500  (90)
Core deposits to total deposits94.3  94.1  91.7  (260) (240)
Investment securities to earning assets25.2  19.1  18.8  (640) (30)

7 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 in balance sheet items as of December 31, 2019 were the following:

  • C&I loans (which include traditional C&I, asset-based lending, payroll finance, warehouse lending, factored receivables, equipment financing and public sector finance loans) represented 38.4% of total portfolio loans; commercial real estate loans (which include multi-family loans) represented 48.0% of total portfolio loans; consumer and residential mortgage loans combined represented 11.4% of total portfolio loans; and ADC loans represented 2.2% of total portfolio loans, respectively. At December 31, 2018, C&I loans represented 34.0%; commercial real estate loans (which include multi-family loans) represented 48.9%; consumer and residential mortgage loans combined represented 15.7%; and ADC loans represented 1.4% of total portfolio loans, respectively. We continued making progress towards our goal of a loan mix comprised of 45% for each of C&I and commercial real estate loans and 10% other loans.
  • Total commercial loans, which include all C&I loans, commercial real estate (including multi-family) and ADC loans, increased by $791.3 million over the linked quarter and $2.8 billion since December 31, 2018. Growth in total commercial loans for 2019 included $1.2 billion of loans acquired in loan portfolio acquisitions and $1.6 billion of loans originated by our commercial banking teams.
  • ADC loans increased $33.4 million over the linked quarter and $199.6 million since December 31, 2018. The increase was mainly related to construction loans associated with our investments in affordable housing tax credits.
  • Residential mortgage loans held in our loan portfolio were $2.2 billion at December 31, 2019, a decline of $160.1 million from the linked quarter and a decline of $495.1 million from the same period a year ago. The decline was mainly due to repayments.

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  • The balance of BOLI increased by $4.1 million relative to the prior quarter and was $613.8 million at December 31, 2019. BOLI declined $40.1 million in 2019, mainly due to the partial redemption of $60.5 million of legacy Astoria BOLI assets related to the BOLI restructuring executed in the third quarter of 2019.
  • Core deposits at December 31, 2019 were $20.5 billion and increased $252.1 million compared to September 30, 2019, and increased $549.5 million compared to December 31, 2018.
  • Total deposits at December 31, 2019 increased $839.3 million compared to September 30, 2019, and total deposits increased $1.2 billion compared to December 31, 2018. We increased wholesale deposits in the fourth quarter of 2019 to fund a portion of the equipment finance loan portfolio acquisition.
  • Municipal deposits at December 31, 2019 were $2.0 billion, a decrease of $246.6 million relative to September 30, 2019. This decrease was due to seasonal outflows. Historically, municipal deposits reach their annual peak at September 30.
  • Investment securities decreased by $1.6 billion from December 31, 2018, and represented 18.8% of earning assets at December 31, 2019. We sold securities during the past twelve months to fund commercial loan growth including loan portfolio acquisitions. We also sold securities to reduce the proportion of lower yielding assets as a percentage of total assets.
  • Total borrowings at December 31, 2019 were $2.9 billion, a decrease of $288.3 million relative to September 30, 2019 and $2.3 billion relative to December 31, 2018. The sale of securities and deposit inflows allowed us to reduce borrowings. Included in total borrowings is $270.9 million of subordinated notes issued by the Company in December 2019 (the notes have an aggregate principal amount of $275.0 million). A portion of the proceeds will be used to redeem the senior notes assumed in the Astoria Merger that mature in June 2020.

Credit Quality

($ in thousands)For the three months ended Change % / bps
 12/31/2018 9/30/2019 12/31/2019 Y-o-Y Linked Qtr
Provision for loan losses$10,500  $13,700  $10,585  0.8% (22.7)%
Net charge-offs6,188  13,629  9,082  46.8  (33.4)
Allowance for loan losses95,677  104,735  106,238  11.0  1.4 
Non-performing loans168,822  190,966  179,161  6.1  (6.2)
Loans 30 to 89 days past due97,201  64,756  52,880  (45.6) (18.3)
Annualized net charge-offs to average loans0.12% 0.27% 0.17% 5  (10)
Special mention loans113,180  136,972  159,976  41.3  16.8 
Substandard loans266,047  277,975  295,428  11.0  6.3 
Allowance for loan losses to total loans0.50  0.50  0.50     
Allowance for loan losses to non-performing loans56.7  54.8  59.3  260  450 

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

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

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

8

Capital

($ in thousands, except share and per share data)As of Change % / bps
 12/31/2018 9/30/2019 12/31/2019 Y-o-Y Linked Qtr
Total stockholders’ equity$4,428,853  $4,520,967  $4,530,113  2.3% 0.2%
Preferred stock138,423  137,799  137,581  (0.6) (0.2)
Goodwill and other intangible assets1,742,578  1,772,963  1,793,846  2.9  1.2 
Tangible common stockholders’ equity 8$2,547,852  $2,610,205  $2,598,686  2.0  (0.4)
Common shares outstanding216,227,852  202,392,884  198,455,324  (8.2) (1.9)
Book value per common share$19.84  $21.66  $22.13  11.5  2.2 
Tangible book value per common share 811.78  12.90  13.09  11.2  1.5 
Tangible common equity to tangible assets 88.60% 9.22% 9.03% 43  (19)
Estimated Tier 1 leverage ratio - Company9.50  9.78  9.55  5  (23)
Estimated Tier 1 leverage ratio - Bank9.94  10.08  10.11  17  3 
          
 8 See a reconciliation of non-GAAP financial measures beginning on page 18.

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

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

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

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

Conference Call Information
Sterling Bancorp will host a teleconference and webcast on Thursday, January 23, 2020 at 10:30 AM Eastern Time to discuss the Company’s results. Analysts, investors and interested parties are invited to listen to the webcast and view accompanying slides on the Company’s website at www.sterlingbancorp.com or by dialing (866) 548-4713, Conference ID #6117623. A replay of the teleconference can be accessed through the Company’s website.

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

9

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

Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2019. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the Annual Report on Form 10-K to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.

10

Sterling Bancorp and Subsidiaries 
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(unaudited, in thousands, except share and per share data)
            
Assets:12/31/2018 9/30/2019 12/31/2019
Cash and cash equivalents$438,110  $545,603  $329,151 
Investment securities6,667,180  5,047,011  5,075,309 
Loans held for sale1,565,979  4,627  8,125 
Portfolio loans:     
Commercial and industrial (“C&I”)6,533,386  7,792,569  8,232,719 
Commercial real estate (including multi-family)9,406,541  9,977,839  10,295,518 
ADC267,754  433,883  467,331 
Residential mortgage2,705,226  2,370,216  2,210,112 
Consumer305,623  255,656  234,532 
Total portfolio loans, gross19,218,530  20,830,163  21,440,212 
Allowance for loan losses(95,677) (104,735) (106,238)
Total portfolio loans, net19,122,853  20,725,428  21,333,974 
FHLB and Federal Reserve Bank Stock, at cost369,690  276,929  251,805 
Accrued interest receivable107,111  104,881  100,312 
Premises and equipment, net264,194  238,723  227,070 
Goodwill1,613,033  1,657,814  1,683,482 
Other intangibles129,545  115,149  110,364 
BOLI653,995  609,720  613,848 
Other real estate owned19,377  13,006  12,189 
Other assets432,240  738,774  840,868 
Total assets$31,383,307  $30,077,665  $30,586,497 
Liabilities:     
Deposits$21,214,148  $21,579,324  $22,418,658 
FHLB borrowings4,838,772  2,800,907  2,245,653 
Other borrowings21,338  26,544  22,678 
Senior notes181,130  173,652  173,504 
Subordinated notes - Company    270,941 
Subordinated notes - Bank172,943  173,121  173,182 
Mortgage escrow funds72,891  84,595  58,316 
Other liabilities453,232  718,555  693,452 
Total liabilities26,954,454  25,556,698  26,056,384 
Stockholders’ equity:     
Preferred stock138,423  137,799  137,581 
Common stock2,299  2,299  2,299 
Additional paid-in capital3,776,461  3,762,046  3,766,716 
Treasury stock(213,935) (501,814) (583,408)
Retained earnings791,550  1,075,503  1,166,709 
Accumulated other comprehensive (loss) income(65,945) 45,134  40,216 
Total stockholders’ equity4,428,853  4,520,967  4,530,113 
Total liabilities and stockholders’ equity$31,383,307  $30,077,665  $30,586,497 
      
Shares of common stock outstanding at period end216,227,852  202,392,884  198,455,324 
Book value per common share$19.84  $21.66  $22.13 
Tangible book value per common share111.78  12.90  13.09 
1 See reconciliation of non-GAAP financial measures beginning on page 18.

11

Sterling Bancorp and Subsidiaries 
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
  For the Quarter Ended For the Year ended
 12/31/2018 9/30/2019 12/31/2019 12/31/2018 12/31/2019
Interest and dividend income:                   
Loans and loan fees$260,417  $254,414  $256,377  $1,006,496  $1,029,369 
Securities taxable30,114  21,977  20,367  115,971  94,823 
Securities non-taxable15,104  13,491  13,031  61,062  55,802 
Other earning assets7,562  5,327  5,699  24,944  22,546 
Total interest and dividend income313,197  295,209  295,474  1,208,473  1,202,540 
Interest expense:         
Deposits41,450  48,330  49,907  130,096  192,361 
Borrowings28,876  23,558  17,310  110,974  91,256 
Total interest expense70,326  71,888  67,217  241,070  283,617 
Net interest income242,871  223,321  228,257  967,403  918,923 
Provision for loan losses10,500  13,700  10,585  46,000  45,985 
Net interest income after provision for loan losses232,371  209,621  217,672  921,403  872,938 
Non-interest income:         
Deposit fees and service charges6,511  6,582  6,506  26,830  26,398 
Accounts receivable management / factoring commissions and other related fees6,480  6,049  6,572  22,772  23,837 
BOLI4,060  8,066  4,770  15,651  20,670 
Loan commissions and fees4,066  6,285  8,698  16,181  24,129 
Investment management fees1,901  1,758  1,597  7,790  7,305 
Net (loss) gain on sale of securities(4,886) 6,882  (76) (10,788) (6,905)
Gain on sale of residential mortgage loans        8,313 
Gain (loss) on termination of pension plan  12,097  (280)   11,817 
Gain on sale of fixed assets      11,800   
Other4,343  4,111  4,594  12,961  15,301 
Total non-interest income22,475  51,830  32,381  103,197  130,865 
Non-interest expense:         
Compensation and benefits54,677  52,850  52,453  220,340  215,766 
Stock-based compensation plans3,679  4,565  5,180  12,984  19,473 
Occupancy and office operations16,579  15,836  15,886  68,536  64,363 
Information technology8,761  8,545  9,313  41,174  35,580 
Amortization of intangible assets5,865  4,785  4,785  23,646  19,181 
FDIC insurance and regulatory assessments3,608  3,194  3,134  20,493  12,660 
Other real estate owned, net15  79  (132) 1,650  622 
Impairment related to financial centers and real estate consolidation strategy        14,398 
Charge for asset write-downs, systems integration, retention and severance    5,133  13,132  8,477 
Other16,737  16,601  19,698  56,415  73,317 
Total non-interest expense109,921  106,455  115,450  458,370  463,837 
Income before income tax expense144,925  154,996  134,603  566,230  539,966 
Income tax expense30,434  32,549  27,905  118,976  112,925 
Net income114,491  122,447  106,698  447,254  427,041 
Preferred stock dividend1,990  1,982  1,976  7,978  7,933 
Net income available to common stockholders$112,501  $120,465  $104,722  $439,276  $419,108 
Weighted average common shares:         
Basic222,319,682  203,090,365  199,719,747  224,299,488  205,679,874 
Diluted222,769,369  203,566,582  200,252,542  224,816,996  206,131,628 
Earnings per common share:         
Basic earnings per share$0.51  $0.59  $0.52  $1.96  $2.04 
Diluted earnings per share0.51  0.59  0.52  1.95  2.03 
Dividends declared per share0.07  0.07  0.07  0.28  0.28 

12

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 Period12/31/2018 3/31/2019 6/30/2019 9/30/2019 12/31/2019
Total assets$31,383,307 $29,956,607 $30,237,545 $30,077,665 $30,586,497
Tangible assets 129,640,729  28,174,074  28,459,797  28,304,702  28,792,651
Securities available for sale3,870,563  3,847,799  3,843,112  3,061,419  3,095,648
Securities held to maturity2,796,617  2,067,251  2,015,753  1,985,592  1,979,661
Loans held for sale21,565,979  248,972  27,221  4,627  8,125
Portfolio loans19,218,530  19,908,473  20,370,306  20,830,163  21,440,212
Goodwill1,613,033  1,657,814  1,657,814  1,657,814  1,683,482
Other intangibles129,545  124,719  119,934  115,149  110,364
Deposits21,214,148  21,225,639  20,948,464  21,579,324  22,418,658
Municipal deposits (included above)1,751,670  2,027,563  1,699,824  2,234,630  1,988,047
Borrowings5,214,183  3,633,480  4,133,986  3,174,224  2,885,958
Stockholders’ equity4,428,853  4,419,223  4,459,158  4,520,967  4,530,113
Tangible common equity 12,547,852  2,498,472  2,543,399  2,610,205  2,598,686
Quarterly Average Balances         
Total assets30,925,281  30,742,943  29,666,951  29,747,603  30,349,691
Tangible assets 129,179,942  28,986,437  27,886,066  27,971,485  28,569,589
Loans, gross:         
Commercial real estate (includes multi-family)9,341,579  9,385,420  9,486,333  9,711,619  10,061,625
ADC279,793  284,299  307,290  387,072  459,372
C&I:         
Traditional C&I2,150,644  2,418,027  2,446,676  2,435,644  2,399,901
Asset-based lending3812,903  876,218  1,070,841  1,151,793  1,137,719
Payroll finance3223,061  197,809  196,160  202,771  228,501
Warehouse lending3690,277  710,776  990,843  1,180,132  1,307,645
Factored receivables3267,986  250,426  246,382  248,150  258,892
Equipment financing31,147,269  1,245,051  1,285,095  1,191,944  1,430,715
Public sector finance3828,153  869,829  967,218  1,087,427  1,189,103
Total C&I6,120,293  6,568,136  7,203,215  7,497,861  7,952,476
Residential mortgage4,336,083  3,878,991  2,635,903  2,444,101  2,284,419
Consumer311,475  295,428  280,098  262,234  243,057
Loans, total420,389,223  20,412,274  19,912,839  20,302,887  21,000,949
Securities (taxable)4,133,456  3,833,690  3,453,858  3,189,027  2,905,545
Securities (non-taxable)2,552,533  2,501,004  2,429,411  2,250,859  2,159,391
Other interest earning assets635,443  667,256  580,945  611,621  835,554
Total interest earning assets27,710,655  27,414,224  26,377,053  26,354,394  26,901,439
Deposits:         
Non-interest bearing demand4,324,247  4,247,389  4,218,000  4,225,258  4,361,642
Interest bearing demand4,082,526  4,334,266  4,399,296  4,096,744  4,359,767
Savings (including mortgage escrow funds)2,535,098  2,460,247  2,448,132  2,375,882  2,614,523
Money market7,880,331  7,776,501  7,538,890  7,341,822  7,681,491
Certificates of deposit2,530,226  2,497,723  2,544,554  2,710,179  3,271,674
Total deposits and mortgage escrow21,352,428  21,316,126  21,148,872  20,749,885  22,289,097
Borrowings4,716,522  4,466,172  3,544,661  3,872,840  2,890,407
Stockholders’ equity4,426,118  4,415,449  4,423,910  4,489,167  4,524,417
Tangible common stockholders’ equity 12,542,256  2,520,595  2,504,883  2,575,199  2,606,617
              
1 See a reconciliation of non-GAAP financial measures beginning on page 18.
At December 31, 2018 and March 31, 2019, loans held for sale included $1.54 billion and $222 million of residential mortgage loans, respectively; the other balances of loans held for sale are commercial syndication loans.
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 loan losses.

13

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 Data12/31/2018
 3/31/2019
 6/30/2019
 9/30/2019
 12/31/2019
Basic earnings per share$0.51  $0.47  $0.46  $0.59  $0.52 
Diluted earnings per share0.51  0.47  0.46  0.59  0.52 
Adjusted diluted earnings per share, non-GAAP 10.52  0.50  0.51  0.52  0.54 
Dividends declared per common share0.07  0.07  0.07  0.07  0.07 
Book value per common share19.84  20.43  21.06  21.66  22.13 
Tangible book value per common share111.78  11.92  12.40  12.90  13.09 
Shares of common stock o/s216,227,852  209,560,824  205,187,243  202,392,884  198,455,324 
Basic weighted average common shares o/s222,319,682  213,157,090  206,932,114  203,090,365  199,719,747 
Diluted weighted average common shares o/s222,769,369  213,505,842  207,376,239  203,566,582  200,252,542 
Performance Ratios (annualized)         
Return on average assets1.44% 1.31% 1.28% 1.61% 1.37%
Return on average equity10.08  9.13  8.57  10.65  9.18 
Return on average tangible assets1.53  1.39  1.36  1.71  1.45 
Return on average tangible common equity17.56  16.00  15.13  18.56  15.94 
Return on average tangible assets, adjusted 11.58  1.48  1.51  1.50  1.51 
Return on avg. tangible common equity, adjusted 118.17  17.04  16.83  16.27  16.57 
Operating efficiency ratio, as adjusted 138.0  40.5  40.9  39.1  39.9 
Analysis of Net Interest Income         
Accretion income on acquired loans$27,016  $25,580  $23,745  $17,973  $19,497 
Yield on loans5.07% 5.17% 5.20% 4.97% 4.84%
Yield on investment securities - tax equivalent 22.92  2.99  2.92  2.85  2.89 
Yield on interest earning assets - tax equivalent 24.54  4.64  4.66  4.50  4.41 
Cost of interest bearing deposits0.97  1.09  1.14  1.16  1.10 
Cost of total deposits0.77  0.88  0.91  0.92  0.89 
Cost of borrowings2.43  2.53  2.54  2.41  2.38 
Cost of interest bearing liabilities1.28  1.39  1.38  1.40  1.28 
Net interest rate spread - tax equivalent basis 23.26  3.25  3.28  3.10  3.13 
Net interest margin - GAAP basis3.48  3.48  3.53  3.36  3.37 
Net interest margin - tax equivalent basis 23.53  3.54  3.58  3.42  3.42 
Capital         
Tier 1 leverage ratio - Company 39.50% 9.21% 9.57% 9.78% 9.55%
Tier 1 leverage ratio - Bank only 39.94  9.58  9.98  10.08  10.11 
Tier 1 risk-based capital ratio - Bank only 313.53  13.10  12.67  12.74  12.42 
Total risk-based capital ratio - Bank only 314.78  14.39  13.94  13.99  13.63 
Tangible common equity - Company 18.60  8.87  8.94  9.22  9.03 
Condensed Five Quarter Income Statement         
Interest and dividend income$313,197  $309,400  $302,457  $295,209  $295,474 
Interest expense70,326  73,894  70,618  71,888  67,217 
Net interest income242,871  235,506  231,839  223,321  228,257 
Provision for loan losses10,500  10,200  11,500  13,700  10,585 
Net interest income after provision for loan losses232,371  225,306  220,339  209,621  217,672 
Non-interest income22,475  19,597  27,058  51,830  32,381 
Non-interest expense109,921  114,992  126,940  106,455  115,450 
Income before income tax expense144,925  129,911  120,457  154,996  134,603 
Income tax expense30,434  28,474  23,997  32,549  27,905 
Net income$114,491  $101,437  $96,460  $122,447  $106,698 
          
1 See a reconciliation of non-GAAP financial measures beginning on page 18.
2 Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable Federal tax rate of 21%.
3 Regulatory capital amounts and ratios are preliminary estimates pending filing of the Company’s and Bank’s regulatory reports.

14

               
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 Forward12/31/2018
 3/31/2019
 6/30/2019
 9/30/2019
 12/31/2019
Balance, beginning of period $91,365  $95,677  $98,960  $104,664  $104,735 
Provision for loan losses10,500  10,200  11,500  13,700  10,585 
Loan charge-offs1:         
Traditional commercial & industrial(452) (4,839) (754) (123) (470)
Asset-based lending(4,936)   (3,551) (9,577) (5,856)
Payroll finance(21)   (84)   (168)
Factored receivables(23) (32) (27) (14) (68)
Equipment financing(1,060) (1,249) (1,335) (2,711) (1,739)
Commercial real estate(56) (17) (238) (53) (583)
Multi-family(140)        
Acquisition development & construction      (6)  
Residential mortgage(694) (1,085) (689) (1,984) (334)
Consumer(335) (443) (467) (241) (401)
Total charge offs(7,717) (7,665) (7,145) (14,709) (9,619)
Recoveries of loans previously charged-off1:         
Traditional commercial & industrial404  139  445  136  232 
Payroll finance10  1  3  8  5 
Factored receivables7  121  4  3  9 
Equipment financing604  131  79  422  91 
Commercial real estate185  9  649  187   
Multi-family276  103  6  90  105 
Residential mortgage11  1  1  126  5 
Consumer32  243  162  108  90 
Total recoveries1,529  748  1,349  1,080  537 
Net loan charge-offs(6,188) (6,917) (5,796) (13,629) (9,082)
Balance, end of period$95,677  $98,960  $104,664  $104,735  $106,238 
Asset Quality Data and Ratios         
Non-performing loans (“NPLs”) non-accrual$166,400  $166,746  $192,109  $190,011  $179,051 
NPLs still accruing2,422  3,669  538  955  110 
Total NPLs168,822  170,415  192,647  190,966  179,161 
Other real estate owned19,377  16,502  13,628  13,006  12,189 
Non-performing assets (“NPAs”)$188,199  $186,917  $206,275  $203,972  $191,350 
Loans 30 to 89 days past due$97,201  $64,260  $76,364  $64,756  $52,880 
Net charge-offs as a % of average loans (annualized)0.12% 0.14% 0.12% 0.27% 0.17%
NPLs as a % of total loans0.88  0.86  0.95  0.92  0.84 
NPAs as a % of total assets0.60  0.62  0.68  0.68  0.63 
Allowance for loan losses as a % of NPLs56.7  58.1  54.3  54.8  59.3 
Allowance for loan losses as a % of total loans0.50  0.50  0.51  0.50  0.50 
Special mention loans$113,180  $128,054  $118,940  $136,972  $159,976 
Substandard loans266,047  288,694  311,418  277,975  295,428 
Doubtful loans59         
          
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 or acquisition development and construction recoveries during the periods presented.

15

Sterling Bancorp and Subsidiaries
QUARTERLY YIELD TABLE
(unaudited, in thousands, except share and per share data)
 For the Quarter Ended
 September 30, 2019
 December 31, 2019
 Average
balance

 Interest
 Yield/
Rate

 Average
balance

 
Interest
 Yield/
Rate

  
 (Dollars in thousands)
Interest earning assets: 
Traditional C&I and commercial finance loans$7,497,861  $95,638  5.06% $7,952,476  $97,221  4.85%
Commercial real estate (includes multi-family)9,711,619  118,315  4.83  10,061,625  122,435  4.83 
ADC387,072  5,615  5.76  459,372  5,924  5.12 
Commercial loans17,596,552  219,568  4.95  18,473,473  225,580  4.84 
Consumer loans262,234  3,799  5.75  243,057  3,290  5.37 
Residential mortgage loans2,444,101  31,047  5.08  2,284,419  27,507  4.82 
Total gross loans 120,302,887  254,414  4.97  21,000,949  256,377  4.84 
Securities taxable3,189,027  21,977  2.73  2,905,545  20,367  2.78 
Securities non-taxable2,250,859  17,077  3.03  2,159,391  16,494  3.06 
Interest earning deposits304,820  1,802  2.35  573,861  2,423  1.68 
FHLB and Federal Reserve Bank Stock306,801  3,525  4.56  261,693  3,276  4.97 
Total securities and other earning assets6,051,507  44,381  2.91  5,900,490  42,560  2.86 
Total interest earning assets26,354,394  298,795  4.50  26,901,439  298,937  4.41 
Non-interest earning assets3,393,209      3,448,252     
Total assets$29,747,603      $30,349,691     
Interest bearing liabilities:           
Demand and savings 2 deposits$6,472,626  $13,033  0.80% $6,974,290  $13,670  0.78%
Money market deposits7,341,822  22,426  1.21  7,681,491  20,867  1.08 
Certificates of deposit2,710,179  12,871  1.88  3,271,674  15,370  1.86 
Total interest bearing deposits16,524,627  48,330  1.16  17,927,455  49,907  1.10 
Senior notes173,750  1,369  3.15  173,601  1,369  3.15 
Other borrowings3,526,009  19,832  2.23  2,496,546  13,112  2.08 
Subordinated debentures - Bank173,081  2,357  5.45  173,142  2,358  5.45 
Subordinated debentures - Company      47,118  471  4.00 
Total borrowings3,872,840  23,558  2.41  2,890,407  17,310  2.38 
Total interest bearing liabilities20,397,467  71,888  1.40  20,817,862  67,217  1.28 
Non-interest bearing deposits4,225,258      4,361,642     
Other non-interest bearing liabilities635,711      645,770     
Total liabilities25,258,436      25,825,274     
Stockholders’ equity4,489,167      4,524,417