Sterling Bancorp announces results for the second quarter and first half of 2021. Diluted earnings per share available to common stockholders in the second quarter of 2021 of $0.50 (as reported) and $0.52 (as adjusted).

Rhea-AI Summary

Sterling Bancorp reported a net income of $96.4 million for Q2 2021, down slightly from $97.2 million in Q1 2021. Adjusted net income rose to $100.5 million or $0.52 per diluted share, surpassing last year’s $48.8 million. Net interest income was $218.5 million, maintaining a net interest margin of 3.30%. Total deposits stood at $23.1 billion, with core deposits increasing by 3.2%. However, commercial loans decreased by 4.8%. The company declared a dividend of $0.07 per share and has a merger with Webster Financial planned by Q4 2021.

Positive

• Adjusted net income increased 3.0% from Q1 2021.
• Tangible book value rose by 11.0% year-over-year to $14.62.
• Core deposits increased by 3.2% year-over-year to $22.6 billion.
• Adjusted return on average tangible common equity at 14.6%.

Negative

• Net income decreased 0.8% from Q1 2021.
• Total commercial loans declined by 4.8% year-over-year.

Key Performance Highlights

• GAAP net income available to common stockholders was $96.4 million.
• Adjusted net income increased to $100.5 million from $97.6 million in the linked quarter.
• Reported net interest margin excluding accretion income¹ of 3.30% was flat compared to the linked quarter.
• Cost of funding liabilities decreased by seven bps to 20 bps; earning asset yields decreased by seven bps to 3.61%.
• Adjusted PPNR, excluding accretion income,^{1, 2} was $124.7 million; increased $832 thousand, or 0.7%, over the linked quarter and $10.9 million, or 9.6%, from a year ago.
• Total deposits were $23.1 billion, a decrease of 1.9% from a year ago.
• Total core deposits were $22.6 billion, an increase of 3.2% over a year ago.
• Total commercial loans were $19.2 billion, a decrease of 4.8% from a year ago.
• Average commercial loans were $19.2 billion, a 1.6% decrease over the first quarter of 2021.
• Adjusted non-interest expense¹ was $109.7 million, adjusted operating efficiency ratio³ was 44.1%.
• NPLs increased by $4.8 million to $173.3 million; ACL / portfolio loans of 1.52% and ACL / NPLs of 181.7%.
• TCE / TA¹ was 10.29% and tangible book value per common share¹ was $14.62, an increase of 11.0% over a year ago.
• On April 1, 2021, repaid $145.0 million of bank issued subordinated notes with coupon interest rate of 5.25%.
• Declared third quarter dividend per common share of $0.07; suspended common share repurchases.

Results for the Three Months ended June 30, 2021 vs. June 30, 2020

($ in thousands except per share amounts)	GAAP / As Reported												Non-GAAP / As Adjusted1
	June 30, 2020				June 30, 2021				Change % / bps				June 30, 2020				June 30, 2021				Change % / bps
Total assets	$	30,839,893			$	29,143,918			(5.5	)	%		$	30,839,893			$	29,143,918			(5.5	)	%
Total portfolio loans, gross	22,295,267				20,724,097				(7.0	)			22,295,267				20,724,097				(7.0	)
Total deposits	23,600,621				23,146,711				(1.9	)			23,600,621				23,146,711				(1.9	)
PPNR1, 2	114,508				128,112				11.9				113,832				124,727				9.6
Net income available to common	48,820				96,380				97.4				56,926				100,509				76.6
Diluted EPS available to common	0.25				0.50				100.0				0.29				0.52				79.3
Net interest margin	3.15		%		3.38		%		23				3.20		%		3.42		%		22
Tangible book value per common share1	$	13.17			$	14.62			11.0				$	13.17			$	14.62			11.0

Results for the Three Months ended June 30, 2021 vs. March 31, 2021

($ in thousands except per share amounts)	GAAP / As Reported												Non-GAAP / As Adjusted1
	March 31, 2021				June 30, 2021				Change % / bps				March 31, 2021				June 30, 2021				Change % / bps
PPNR1, 2	$	132,105			$	128,112			(3.0	)			$	123,895			$	124,727			0.7
Net income available to common	97,187				96,380				(0.8	)			97,603				100,509				3.0
Diluted EPS available to common	0.50				0.50				—				0.51				0.52				2.0
Net interest margin	3.38		%		3.38		%		—				3.43		%		3.42		%		(1	)
Operating efficiency ratio3	47.2				48.5				130				44.3				44.1				(20	)
Allowance for credit losses (“ACL”) - loans	$	323,186			$	314,873			(2.6	)			$	323,186			$	314,873			(2.6	)
ACL to portfolio loans	1.53		%		1.52		%		(1	)			1.53		%		1.52		%		(1	)
ACL to NPLs	191.7				181.7				(10	)			191.7				181.7				(10	)
Tangible book value per common share1	$	14.08			$	14.62			3.8				$	14.08			$	14.62			3.8

1. Non-GAAP / as adjusted measures are defined in the non-GAAP tables beginning on page 20.

2. PPNR represents pretax pre-provision net revenue. PPNR and PPNR excluding accretion income are non-GAAP measures and are measured as net interest income plus non-interest income less operating expenses before tax.

3. Operating efficiency ratio is a non-GAAP measure. See page 25. for an explanation of the operating efficiency ratio.

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PEARL RIVER, N.Y., July 21, 2021 (GLOBE NEWSWIRE) -- 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, 2021. Net income available to common stockholders for the three months ended June 30, 2021 was $96.4 million, or $0.50 per diluted share, compared to net income available to common stockholders of $97.2 million, or $0.50 per diluted share, for the linked quarter ended March 31, 2021, and net income available to common stockholders of $48.8 million, or $0.25 per diluted share, for the three months ended June 30, 2020.

Net income available to common stockholders for the six months ended June 30, 2021 was $193.6 million, or $1.01 per diluted share, compared to net income available to common stockholders of $61.0 million, or $0.31 per diluted share, for the same period in 2020.

Chief Executive Officer’s Comments
Jack Kopnisky, President and Chief Executive Officer, commented: “We are pleased to report strong results for the second quarter of 2021. We maintained a stable net interest margin, our provision for credit losses continued to decline, and we accelerated our investments in key commercial businesses.

“Adjusted net income available to common stockholders was $100.5 million, or $0.52 per diluted share. Both increased relative to the linked quarter and prior year. Over the past five years our adjusted net income available per diluted common share has grown at a compound annual growth rate (“CAGR”) of 14.0% and tangible book value per common share has grown at a CAGR of 14.6%. Our key profitability metrics remained strong, with adjusted return on average tangible assets of 1.46% and adjusted return on average tangible common equity of 14.6%. Adjusted PPNR excluding accretion income was $124.7 million, an increase of approximately 1% over the linked quarter, and an increase of 9.6% increase over the prior year period.

“We continued to effectively manage our net interest rate margin by substantially reducing our funding costs and protecting our earning asset yields. Our net interest income was $218.5 million in the second quarter and our tax equivalent net interest margin excluding accretion income was 3.30%, flat versus the linked quarter and up 25 basis points from the second quarter of 2020. Average earning assets were down $180.8 million with average commercial loans decreasing by $308.2 million in the second quarter, which was mainly due to a $343.6 million decline in mortgage warehouse loans and runoff of Paycheck Protection Program (“PPP”) loans. We saw growth in targeted asset categories of traditional C&I, public sector and ADC/community development. At June 30, 2021, our total core deposits were $22.6 billion, which represented an increase of $387.3 million, over the linked quarter.

“In our fee-based businesses, client activity and transaction volumes continued to build from pandemic lows. In the second quarter, adjusted non-interest income was $30.3 million, a decline of $1.3 million versus the linked quarter, which included $1.8 million in fees related to the origination of second round PPP loans in the linked quarter. Relative to the linked quarter, we saw growth in fee income in our loan syndications business, an increase in deposit fees from higher transaction volumes, and an increase in investment management fees.

“In the second quarter, our adjusted non-interest expenses were $109.7 million and our adjusted operating efficiency ratio was 44.1%. We continue to invest in our technology infrastructure and digital capabilities, including in our digital banking offering Brio Direct, and in our Banking as a Service business. We are also investing in those commercial verticals that offer attractive risk-adjusted returns by adding resources to our syndication, innovation finance, treasury management and small business teams. We are investing for the future, and are confident that these investments will drive scalable and sustainable growth in our business and earnings.

“As of June 30, 2021, our allowance for credit losses - portfolio loans was $314.9 million, or 1.52% of total loans and 181.7% of non-performing loans, a modest decrease in absolute terms from the $323.2 million in allowance we reported at the end of the first quarter. While our credit models reflect and incorporate an improving macro-economic forecast, we continue to carefully monitor portfolio performance and certain key economic indicators specific to the recovery of key business sectors in the New York metropolitan region, and are taking a measured approach to managing credit as we continue to navigate through the economic cycle.

“We have a strong capital position. At June 30, 2021, our tangible book value per common share was $14.62, an increase of 11.0% over a year ago. Our tangible common equity to tangible assets ratio increased sixty six basis points in the second quarter to 10.29% and our Tier 1 leverage ratio was 10.91%. We declared our regular dividend of $0.07 on our common stock, payable on August 16, 2021 to holders of record as of August 2, 2021.

“Since the announcement of our definitive merger agreement with Webster Financial Corporation on April 19, 2021, we have been actively engaged with our partners at Webster to design a comprehensive integration plan that prioritizes our commitment to value creation, providing best-in-class service to our customers and continued adherence to the highest standards of risk governance. In May, the necessary applications were filed with federal regulators, and in July, we filed our joint merger proxy statement, with our shareholder vote scheduled for August. We are excited about the tremendous opportunities created by uniting our respective organizations. We continue to target a transaction close date in the fourth quarter of 2021, subject to

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regulatory and shareholder approval.”  

Reconciliation of GAAP Results to Adjusted Results (non-GAAP)
The Company’s GAAP net income available to common stockholders of $96.4 million, or $0.50 per diluted share, for the second quarter of 2021, included the following items:

• merger-related expense of $2.5 million, which included professional fees related to a fairness opinion, diligence, and integration efforts to date;
• loss on extinguishment of debt of $1.2 million related to repayment of subordinated notes - Bank on April 1, 2021;
• a pre-tax loss of $80 thousand on the sale of investment securities;
• a pre-tax charge of $475 thousand related to the exit of two back office locations; and
• the pre-tax amortization of non-compete agreements and acquired customer list intangible assets of $148 thousand.

Excluding the impact of these items, adjusted net income available to common stockholders was $100.5 million, or $0.52 per diluted share for the second quarter of 2021. For the three months ended June 30, 2021, our effective income tax rate was 20.0%. Based on our results year to date, we increased our estimated effective tax rate for 2021 by one percentage point to 19.5%. The 20.0% effective income tax rate for the second quarter was necessary to get our year to date estimated effective tax rate for 2021 to 19.5%. Our effective tax rate for purposes of reporting adjusted earnings was 18.5% and 17.5% for the three months ended March 31, 2021 and June 30, 2020, respectively.

Non-GAAP financial measures include the terms “adjusted” or “excluding”. See the reconciliation of the Company’s non-GAAP financial measures beginning on page 20.

Net Interest Income and Margin

($ in thousands)	For the three months ended												Change % / bps
	June 30, 2020				March 31, 2021				June 30, 2021				Y-o-Y				Linked Qtr
Interest and dividend income	$	253,226			$	233,847			$	230,310			(9.0	)	%		(1.5	)	%
Interest expense	39,927				15,933				11,783				(70.5	)			(26.0	)
Net interest income	$	213,299			$	217,914			$	218,527			2.5				0.3
Accretion income on acquired loans	$	10,086			$	8,272			$	7,812			(22.5	)	%		(5.6	)	%
Yield on loans	4.03		%		3.92		%		3.88		%		(15	)			(4	)
Tax equivalent yield on investment securities4	3.05				3.02				2.84				(21	)			(18	)
Tax equivalent yield on interest earning assets4	3.79				3.68				3.61				(18	)			(7	)
Cost of total deposits	0.48				0.15				0.11				(37	)			(4	)
Cost of interest bearing deposits	0.61				0.20				0.15				(46	)			(5	)
Cost of borrowings	2.26				3.97				3.87				161				(10	)
Cost of interest bearing liabilities	0.78				0.34				0.26				(52	)			(8	)
Total cost of funding liabilities5	0.63				0.27				0.20				(43	)			(7	)
Tax equivalent net interest margin6	3.20				3.43				3.42				22				(1	)
Average loans, including loans held for sale	$	21,940,636			$	21,294,550			$	20,843,661			(5.0	)	%		(2.1	)	%
Average commercial loans	19,715,184				19,553,823				19,245,641				(2.4	)			(1.6	)
Average investment securities	4,630,056				4,054,978				4,322,126				(6.7	)			6.6
Average cash balances	455,626				648,178				651,271				42.9				0.5
Average total interest earning assets	27,240,114				26,149,732				25,968,935				(4.7	)			(0.7	)
Average deposits and mortgage escrow	23,463,937				23,546,928				23,516,675				0.2				(0.1	)

^4. Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable federal tax rate of 21%.
^5. Includes interest bearing liabilities and non-interest bearing deposits.
^6. Tax equivalent net interest margin is equal to net interest income plus the tax equivalent adjustment for tax exempt securities divided by average interest earning assets. The tax equivalent adjustment is assumed at a 21% federal tax rate in all periods presented.

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Second quarter 2021 compared with second quarter 2020
Net interest income was $218.5 million for the quarter ended June 30, 2021, an increase of $5.2 million compared to the second quarter of 2020. This was mainly due to a decline in interest expense in line with decreases in interest rates and the repayment of higher cost FHLB and subordinated notes - Bank borrowings. Other key components of changes in net interest income were the following:

• The tax equivalent yield on interest earning assets decreased 18 basis points to 3.61%, in line with period over period decreases in interest rates.
• The decline in market interest rates drove a decrease in our yield on loans, from 4.03% in the second quarter of 2020 to 3.88% in the second quarter of 2021.
• Accretion income on acquired loans was $7.8 million in the second quarter of 2021, compared to $10.1 million in the second quarter of 2020.
• Average investment securities were $4.3 billion, or 16.6%, of average total interest earning assets for the second quarter of 2021 compared to $4.6 billion, or 17.0%, of average total interest earning assets for the second quarter of 2020. The tax equivalent yield on investment securities was 2.84% for the second quarter of 2021 compared to 3.05% for the same period last year. The decline was mainly a result of an increase in US Treasury securities held in our portfolio.
• Strong growth in deposits drove increases in average cash balances to $651.3 million compared to $455.6 million in the second quarter of 2020.
• Total interest expense was $11.8 million, a decline of $28.1 million compared to the second quarter of 2020. This was mainly due to lower interest expense paid on deposits and short-term borrowings and the impact of repayment of borrowings.  
• The cost of total deposits was 11 basis points for the second quarter of 2021 compared to 48 basis points for the same period a year ago, as we aggressively repriced deposits in response to the low interest rate environment.
• The cost of borrowings was 3.87% for the second quarter of 2021 compared to 2.26% for the same period a year ago. The increase was mainly due to the change in composition of our borrowings, with average borrowings of $527.3 million in the current quarter being comprised of $35.2 million in short-term borrowings and $492.1 million in higher coupon longer term borrowings, while for the prior year quarter average borrowings of $2.1 billion were comprised of predominately shorter term borrowings.
• The total cost of interest bearing liabilities was 0.26% for the second quarter of 2021 compared to 0.78% for the same period a year ago. The decline was due to both changes in market rates of interest and changes in funding mix.
• Average deposits and mortgage escrow increased $52.7 million during the second quarter of 2021 compared to the same period a year ago.

Second quarter 2021 compared with first quarter 2021

Net interest income increased $613 thousand for the quarter ended June 30, 2021 compared to the linked quarter, mainly due to the impact of lower interest expense. Other key components of the changes in net interest income were the following:

• The average balance of commercial loans decreased $308.2 million, which included a $343.6 million decline in mortgage warehouse loans. The average balance of residential mortgage loans declined $131.2 million.
• The tax equivalent net interest margin was 3.42% compared to 3.43% in the linked quarter. Excluding accretion income on acquired loans, tax equivalent net interest margin was unchanged at 3.30%.
• The yield on loans was 3.88% compared to 3.92% for the linked quarter. The decrease was mainly due to run off of fixed rate loans and decline in accretion income on acquired loans.
• The remaining balance related to PPP loans in the portfolio was $7.8 million at the end of the quarter, and all loans are in process of being forgiven. We recognized $684 thousand in PPP loan fees as interest income in the second quarter of 2021, compared to $367 thousand in the linked quarter.
• The tax equivalent yield on interest earning assets was 3.61% compared to 3.68% in the linked quarter, primarily as a result of the factors discussed above.
• The tax equivalent yield on investment securities was 2.84% compared to 3.02% for the linked quarter. The decline in yield was mainly due to the deployment of excess cash into US Treasury securities.
• The cost of total deposits decreased four basis points to 11 basis points, mainly due to maturities of higher rate certificate accounts and deposit repricing strategies in response to the low interest rate environment.
• Total interest expense decreased $4.2 million as a result of the factors discussed above and the impact of repayment of higher cost borrowings.
• The total cost of borrowings decreased 10 basis points to 3.87%, mainly due to the redemption of subordinated notes -
  

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  Bank.

• Average deposits and mortgage escrow decreased by $30.3 million and average borrowings decreased by $194.4 million relative to the linked quarter.

Non-interest Income

($ in thousands)	For the three months ended													Change %
	June 30, 2020				March 31, 2021				June 30, 2021					Y-o-Y				Linked Qtr
Deposit fees and service charges	$	5,345			$	6,563			$	7,096				32.8		%		8.1		%
Accounts receivable management / factoring     commissions and other related fees	4,419				5,426				5,491					24.3		%		1.2		%
Bank owned life insurance (“BOLI”)	4,950				4,955				4,981					0.6		%		0.5		%
Loan commissions and fees	8,003				10,477				8,762					9.5		%		(16.4	)	%
Investment management fees	1,379				1,852				2,018					46.3		%		9.0		%
Net gain (loss) on sale of securities	485				719				(80		)			(116.5	)	%		NM
Other	1,509				2,364				1,946					29.0		%		(17.7	)	%
Total non-interest income	26,090				32,356				30,214					15.8		%		(6.6	)	%
Net gain (loss) on sale of securities	485				719				(80		)			(116.5	)	%		NM
Adjusted non-interest income	$	25,605			$	31,637			$	30,294				18.3		%		(4.2	)	%

Second quarter 2021 compared with second quarter 2020
Adjusted non-interest income increased $4.7 million in the second quarter of 2021, compared to $25.6 million in the same quarter last year. The increase was mainly due to increased transactional volumes in deposits, from payroll finance and factoring, loan syndications and investment management businesses. In the second quarter of 2020, we realized a gain of $485 thousand on the sale of $52.5 million available for sale securities, which we sold to fund commercial loan growth compared to a loss of $80 thousand in the second quarter of 2021.

Second quarter 2021 compared with first quarter 2021
Adjusted non-interest income decreased approximately $1.3 million relative to the linked quarter to $30.3 million primarily as a result of referral fees earned in the first quarter on second round PPP loans of $1.8 million. Most other categories benefited from increased customer activity and transaction volumes. Other income declined $418 thousand, which was mainly due to lower fees from our derivatives business.

In the second quarter of 2021, we realized a loss of $80 thousand on sale of $17.1 million of available for securities, compared to a gain of $719 thousand in the first quarter of 2021.

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Non-interest Expense

($ in thousands)	For the three months ended														Change % / bps
	June 30, 2020				March 31, 2021					June 30, 2021					Y-o-Y				Linked Qtr
Compensation and benefits	$	54,668			$	58,087				$	56,953				4.2		%		(2.0	)	%
Stock-based compensation plans	5,913				6,617					6,781					14.7				2.5
Occupancy and office operations	14,695				14,515					13,875					(5.6	)			(4.4	)
Information technology	7,312				9,246					9,741					33.2				5.4
Professional fees	5,458				7,077					7,561					38.5				6.8
Amortization of intangible assets	4,200				3,776					3,776					(10.1	)			—
FDIC insurance and regulatory assessments	3,638				3,230					2,344					(35.6	)			(27.4	)
Other real estate owned (“OREO”), net	1,233				(68		)			(72		)			NM				NM
Merger-related expenses	—				—					2,481					NM				NM
Impairment related to financial centers and real estate   consolidation strategy	—				633					475					NM				(25.0	)
Loss on extinguishment of borrowings	9,723				—					1,243					(87.2	)			NM
Other expenses	18,041				15,052					15,471					(14.2	)			2.8
Total non-interest expense	$	124,881			$	118,165				$	120,629				(3.4	)			2.1
Full time equivalent employees (“FTEs”) at period end	1,617				1,457					1,491					(7.8	)			2.3
Financial centers at period end	78				75						73				(6.4	)			(2.7	)
Operating efficiency ratio, as reported7	52.2		%		47.2			%		48.5			%		(370	)			130
Operating efficiency ratio, as adjusted7	45.1				44.3					44.1					(100	)			(20	)
7. See a reconciliation of non-GAAP financial measures beginning on page 20.

Second quarter 2021 compared with second quarter 2020
Total non-interest expense decreased $4.3 million relative to the second quarter of 2020. Key components of the change in non-interest expense between the periods include the following:

• Compensation and benefits increased $2.3 million mainly due to an increase in medical costs incurred and also due to an increase in the bonus accrual compared to the year earlier period.
• Occupancy and office operations expense decreased $820 thousand, mainly due to the consolidation of financial centers and other back-office locations.
• Information technology expense increased $2.4 million mainly due to the amortization of investments related to various back-office automation and digital banking initiatives.
• Professional fees increased $2.1 million mainly due to consulting fees incurred in connection with our digital bank offering and launch of our Banking as a Service products.
• Merger-related expenses of $2.5 million were incurred in connection with our pending merger with Webster, and included fees for a fairness opinion, diligence and integration efforts to date.
• Loss on extinguishment of borrowings in the second quarter of 2021 was related to the repayment of the subordinated notes - Bank. The loss in 2020 was related to the repayment of $500.0 million of FHLB borrowings.
• Other expense in 2021 decreased $2.6 million mainly due to incremental costs incurred in the year ago period associated with the pandemic, which included charitable contributions, occupancy and compensation expenses.

Second quarter 2021 compared with first quarter 2021
Total non-interest expense increased $2.5 million to $120.6 million versus the linked quarter. The significant factors contributing to the increase, were mentioned above and included merger-related expenses and loss on extinguishment of borrowings. Other key components of the change in non-interest expense include the following:

• Compensation and benefits decreased $1.1 million to $57.0 million in the second quarter of 2021. The decrease was mainly due to lower payroll taxes and employer contributions to benefit plans, which are usually higher in the first quarter of the year compared to other quarters.
• FDIC and regulatory assessments declined based on improvements in the factors that impact our FDIC insurance assessment.

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• Other expenses increased by $419 thousand versus the linked quarter, mainly due to an increase in loan processing expenses associated with updated appraisals and credit reports and an increase in investor relations costs associated with our annual report and annual meeting.

Taxes

We recorded income tax expense of $24.5 million in the second quarter of 2021, compared to income tax expense of $23.0 million in the linked quarter and $7.1 million in the prior year quarter. For the three months ended June 30, 2021, we recorded income tax expense at an estimated effective income tax rate of 20.0% compared to 18.8% for the three months ended March 31, 2021. Based on performance year to date, we increased our estimated effective income tax rate prior to discrete items to 19.5% from 18.5%.

Key Balance Sheet Highlights as of June 30, 2021

($ in thousands)	As of												Change % / bps
	June 30, 2020				March 31, 2021				June 30, 2021				Y-o-Y				Linked Qtr
Total assets	$	30,839,893			$	29,914,282			$	29,143,918			(5.5	)	%		(2.6	)	%
Total portfolio loans, gross	22,295,267				21,151,973				20,724,097				(7.0	)			(2.0	)
Commercial & industrial (“C&I”) loans	9,166,744				8,451,614				8,335,044				(9.1	)			(1.4	)
Commercial real estate loans (including multi-family)	10,402,897				10,421,132				10,143,157				(2.5	)			(2.7	)
Acquisition, development and construction (“ADC”) loans	572,558				618,295				690,224				20.6				11.6
Total commercial loans	20,142,199				19,491,041				19,168,425				(4.8	)			(1.7	)
Residential mortgage loans	1,938,212				1,486,597				1,389,294				(28.3	)			(6.5	)
Loan portfolio composition:
Commercial & industrial (“C&I”) loans	41.1		%		40.0		%		40.2		%		(90	)			20
Commercial real estate loans (including multi-family)	46.6				49.3				49.0				240				(30	)
Acquisition, development and construction (“ADC”) loans	2.6				2.9				3.3				70				40
Residential and consumer	9.7				7.8				7.5				(220	)			(30	)
BOLI	$	620,908			$	630,430			$	635,411			2.3				0.8
Core deposits9	21,904,429				22,216,035				22,603,302				3.2				1.7
Total deposits	23,600,621				23,841,718				23,146,711				(1.9	)			(2.9	)
Municipal deposits (included in core deposits)	1,724,049				2,047,349				1,844,719				7.0				(9.9	)
Investment securities, net	4,545,579				4,241,457				4,366,470				(3.9	)			2.9
Investment securities, net to earning assets	16.7		%		16.5		%		17.2		%		50				70
Total borrowings	$	2,014,259			$	667,499			$	518,021			(74.3	)			(22.4	)
Loans to deposits	94.5		%		88.7		%		89.5		%		(500	)			80
Core deposits9 to total deposits	92.8				93.2				97.7				490				450

⁹ Core deposits include retail, commercial and municipal transaction, money market, savings accounts and certificates of deposit accounts, and reciprocal Certificate of Deposit Account Registry balances and exclude brokered and wholesale deposits.

Highlights related to balance sheet items as of June 30, 2021 were the following:

• C&I loans and commercial real estate loans represented 89.2% of our loan portfolio at June 30, 2021 compared to 87.7% a year ago. C&I loans includes traditional C&I, PPP, asset-based lending, payroll finance, warehouse lending, factored receivables, equipment financing and public sector finance loans.
• In the second quarter of 2021, we sold $122.5 million of commercial real estate loans which were mostly rated substandard or special mention. We recorded charge-offs of $11.7 million against the allowance for credit losses - loans to reduce the carrying value of loans to fair value.
• Commercial loans declined $322.6 million in the second quarter, which was mainly due to a $165.4 million decline in mortgage warehouse loans, a $167.7 million decline in CRE and a $110.2 million multi-family loans, which together were also the primary driver of the decline in total portfolio loans.

7

• Residential mortgage loans were $1.4 billion at June 30, 2021, a decline of $97.3 million from the linked quarter, and a decline of $548.9 million from the same period a year ago. The decline was mainly due to repayments, and as compared to the same period a year ago, also reflected our sale in the third quarter of 2020 of non-performing residential mortgage loans with a net book value of $53.2 million.
• Core deposits at June 30, 2021 were $22.6 billion, an increase of $387.3 million compared to March 31, 2021, and an increase of $698.9 million compared to June 30, 2020. A significant driver of the increase versus the linked quarter is related to our determination that certain deposits, totaling $520.9 million, that were previously classified as brokered can be reported as non-brokered, core deposits under the “primary purpose exception” of the relevant regulatory guidance. The growth in core deposits on an annual basis is a result both of our successful deposit gathering strategies as well as the increase in liquidity in the banking system overall, from government stimulus and other measures implemented in response to the economic downturn.
• Certificate of deposit accounts declined $163.5 million as higher costing balances matured and were not renewed. Compared to June 30, 2020, certificate of deposit accounts declined $859.0 million.    
• Municipal deposits at June 30, 2021 were $1.8 billion, a decrease of $202.6 million relative to March 31, 2021. Municipal deposits generally decline in the second quarter of the year as tax receipts are used by local municipalities.
• Investment securities, net increased by $125.0 million from March 31, 2021 and decreased $179.1 million from June 30, 2020, representing 17.2% of earning assets at June 30, 2021. In the second quarter of 2021, the increase in investment securities included the purchase of US Treasury and corporate securities in response to the significant levels of excess liquidity generated by deposit inflows and the contraction in our loan portfolio.
• Total borrowings at June 30, 2021 were $518.0 million, a decrease of $149.5 million relative to March 31, 2021, and a decrease of $1.5 billion relative to June 30, 2020. As compared to 2020, the decline was mainly a result of the repayments of higher costing FHLB borrowings.
• On April 1, 2021, we redeemed the remaining balance of subordinated notes - Bank with a principal balance of $145.0 million at March 31, 2021 and coupon interest rate of 5.25%.

Credit Quality

($ in thousands)	For the three months ended												Change % / bps
	June 30, 2020				March 31, 2021				June 30, 2021				Y-o-Y				Linked Qtr
Provision for credit losses - loans	$	56,606			$	10,000			$	6,000			(89.4	)	%		(40.0	)	%
Net charge-offs	17,561				12,914				14,313				(18.5	)			10.8
ACL - loans	365,489				323,186				314,873				(13.8	)			(2.6	)
Loans 30 to 89 days past due, accruing	66,268				42,165				39,476				(40.4	)			(6.4	)
Non-performing loans	260,605				168,557				173,319				(33.5	)			2.8
Annualized net charge-offs to average loans	0.32		%		0.25		%		0.28		%		(4	)			3
Special mention loans	$	141,805			$	494,452			$	388,535			174.0				(21.4	)
Substandard loans	415,917				590,109				611,805				47.1				3.7
Total criticized and classified loans	557,722				1,084,856				1,004,940				80.2				(7.4	)
ACL - loans to total loans	1.64		%		1.53		%		1.52		%		(12	)			(1	)
ACL - loans to non-performing loans	140.2				191.7				181.7				4,150				(1,000	)

For the three months ended June 30, 2021, provision for credit losses on portfolio loans was $6.0 million. The provision for credit losses is based on our reasonable and supportable forecasts of expected future losses inherent in our portfolio.

Net charge-offs were $14.3 million in the second quarter of 2021, and consisted of $11.7 million in charge-offs related to the sale of $122.5 million of CRE and multi-family loans, most of which were rated special mention or substandard, and $2.6 million of other net charge-offs.

Non-performing loans increased by $4.8 million to $173.3 million at June 30, 2021 compared to the linked quarter. Loans 30 to 89 days past due were $39.5 million, a decrease of $2.7 million from the linked quarter.

Special mention loans decreased by $105.9 million versus the linked quarter, with five relationships accounting for $90.2 million of exposure upgraded to pass grade in the quarter, two relationships for $57.9 million that were downgraded to substandard and two loans for $7.8 million sold as part of our second quarter note sale. These decreases in the balance of

8

special mention loans were partially offset by two new downgrades into special mention accounting for $39.3 million and one upgrade to special mention from substandard accounting for $14.7 million.

Substandard loans increased $21.7 million versus the linked quarter. This included eight multifamily loans that previously requested forbearance under the CARES Act, where, at the conclusion of the forbearance period we determined that it was appropriate to downgrade the loans to a substandard rating, and one C&I loan downgraded to substandard for $24.5 million, partially offset by the impact of our second quarter note sale, which included $79.3 million of substandard rated loans.

Total criticized and classified loans were $1.0 billion a decrease of $79.9 million relative to the linked quarter.

As of June 30, 2021, loan payment deferrals were $109.8 million, or 0.5% of the total portfolio loans.

For additional information on our credit quality metrics including delinquency, criticized and classified, see page 17, “Asset Quality Information by Portfolio”.

Capital

($ in thousands, except share and per share data)	As of												Change % / bps
	June 30, 2020				March 31, 2021				June 30, 2021				Y-o-Y				Linked Qtr
Total stockholders’ equity	$	4,484,187			$	4,620,164			$	4,722,856			5.3		%		2.2		%
Preferred stock	137,142				136,458				136,224				(0.7	)			(0.2	)
Goodwill and other intangible assets	1,785,446				1,773,270				1,769,494				(0.9	)			(0.2	)
Tangible common stockholders’ equity 10	$	2,561,599			$	2,710,436			$	2,817,138			10.0				3.9
Common shares outstanding	194,458,805				192,567,901				192,715,433				(0.9	)			0.1
Book value per common share	$	22.35			$	23.28			$	23.80			6.5				2.2
Tangible book value per common share 10	13.17				14.08				14.62				11.0				3.8
Tangible common equity as a % of tangible assets 10	8.82		%		9.63		%		10.29		%		147				66
Est. Tier 1 leverage ratio - Company	9.51				10.50				10.91				140				41
Est. Tier 1 leverage ratio - Company fully implemented	9.14				10.15				10.55				141				40
Est. Tier 1 leverage ratio - Bank	10.09				11.76				12.10				201				34
Est. Tier 1 leverage ratio - Bank fully implemented	9.69				11.42				11.74				205				32
10 See a reconciliation of non-GAAP financial measures beginning on page 20.

Total stockholders’ equity increased $102.7 million to $4.7 billion versus the linked quarter as a result of net income of $98.3 million, stock-based compensation of $6.8 million, stock option exercises and other stock activity of $1.9 million and other comprehensive income of $11.3 million, partially offset by common dividends of $13.4 million, and preferred dividends of $2.2 million.

We elected the five-year transition provision to delay for two years the full impact on regulatory capital of our adoption of the Current Expected Credit Loss (“CECL”) accounting standard, followed by a three-year transition period. The June 30, 2021 fully implemented ratio data reflects the full impact of CECL and excludes the benefits of phase-ins.

Tangible book value per common share was $14.62 at June 30, 2021, which represented an increase of 11.0% compared to a year ago.

Conference Call Information
Sterling Bancorp will host a teleconference and webcast on Thursday, July 22, 2021 at 8:00 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 (800) 263-0877 Conference ID 3008771. 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 certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements about the Company and the benefits of the proposed transaction, between Webster and the Company, the plans, objectives, expectations and intentions of Webster and the Company, the expected timing of completion of the transaction, and other statements that are not historical fact. Such statements are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.

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

All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Webster nor the Company assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2021. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the Quarterly Report on Form 10-Q to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.

IMPORTANT ADDITIONAL INFORMATION
In connection with the proposed transaction, Webster filed with the SEC a Registration Statement on Form S-4 that included a

10

Joint Proxy Statement of Webster and the Company and a Prospectus of Webster , as well as other relevant documents concerning the proposed transaction. Webster and the Company commenced mailing the Joint Proxy Statement/Prospectus to stockholders on or about July 8, 2021. The proposed transaction involving Webster and the Company will be submitted to the Company's stockholders and Webster's stockholders for their consideration. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS AND STOCKHOLDERS OF WEBSTER AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders may obtain a free copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about Webster and the Company, without charge, at the SEC's website (http://www.sec.gov). Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to Kristen Manginelli, Director of Investor Relations, Webster Financial Corporation, 145 Bank Street, Waterbury, Connecticut 06702, (203) 578-2202 or to Emlen Harmon, Senior Managing Director, Investor Relations, Sterling Bancorp, Two Blue Hill Plaza, Second Floor, Pearl River, New York 10965, (845) 369-8040.

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

11

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

	June 30, 2020					December 31, 2020					June 30, 2021
Assets:
Cash and cash equivalents	$	324,729				$	305,002				$	487,409
Investment securities, net	4,545,579					4,039,456					4,366,470
Loans held for sale	44,437					11,749					19,088
Portfolio loans:
Commercial and industrial (“C&I”)	9,166,744					9,160,268					8,335,044
Commercial real estate (including multi-family)	10,402,897					10,238,650					10,143,157
Acquisition, development and construction (“ADC”) loans	572,558					642,943					690,224
Residential mortgage	1,938,212					1,616,641					1,389,294
Consumer	214,856					189,907					166,378
Total portfolio loans, gross	22,295,267					21,848,409					20,724,097
ACL - loans	(365,489		)			(326,100		)			(314,873		)
Total portfolio loans, net	21,929,778					21,522,309					20,409,224
FHLB and Federal Reserve Bank Stock, at cost	193,666					166,190					151,443
Accrued interest receivable	101,296					97,505					96,728
Premises and equipment, net	226,728					202,555					204,632
Goodwill	1,683,482					1,683,482					1,683,482
Other intangibles	101,964					93,564					86,012
BOLI	620,908					629,576					635,411
Other real estate owned	8,665					5,347					816
Other assets	1,058,661					1,063,403					1,003,203
Total assets	$	30,839,893				$	29,820,138				$	29,143,918
Liabilities:
Deposits	$	23,600,621				$	23,119,522				$	23,146,711
FHLB borrowings	975,058					382,000					—
Federal Funds Purchased	—					277,000					—
Paycheck Protection Program Lending Facility	568,350					—					—
Other borrowings	26,448					27,101					25,802
Subordinated notes - Company	271,096					491,910					492,219
Subordinated notes - Bank	173,307					143,703					—
Mortgage escrow funds	69,686					59,686					66,521
Other liabilities	671,140					728,702					689,809
Total liabilities	26,355,706					25,229,624					24,421,062
Stockholders’ equity:
Preferred stock	137,142					136,689					136,224
Common stock	2,299					2,299					2,299
Additional paid-in capital	3,755,474					3,761,993					3,753,068
Treasury stock	(660,223		)			(686,911		)			(696,711		)
Retained earnings	1,160,885					1,291,628					1,459,077
Accumulated other comprehensive income	88,610					84,816					68,899
Total stockholders’ equity	4,484,187					4,590,514					4,722,856
Total liabilities and stockholders’ equity	$	30,839,893				$	29,820,138				$	29,143,918
Shares of common stock outstanding at period end	194,458,805					192,923,371					192,715,433
Book value per common share	$	22.35				$	23.09				$	23.80
Tangible book value per common share1	13.17					13.87					14.62
1 See reconciliation of non-GAAP financial measures beginning on page 20.

12

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

	For the Quarter Ended												For the Six Months Ended
	30-Jun-20				31-Mar-21				30-Jun-21				30-Jun-20				30-Jun-21
Interest and dividend income:
Loans and loan fees	$	219,904			$	205,855			$	201,685			$	455,343			$	407,540
Securities taxable	18,855				15,352				15,749				39,484				31,101
Securities non-taxable	12,831				11,738				11,718				25,828				23,456
Other earning assets	1,636				902				1,158				6,098				2,060
Total interest and dividend income	253,226				233,847				230,310				526,753				464,157
Interest expense:
Deposits	28,110				8,868				6,698				73,891				15,566
Borrowings	11,817				7,065				5,085				27,791				12,150
Total interest expense	39,927				15,933				11,783				101,682				27,716
Net interest income	213,299				217,914				218,527				425,071				436,441
Provision for credit losses - loans	56,606				10,000				6,000				193,183				16,000
Provision for credit losses - held to maturity securities	—				—				(750		)		1,703				(750		)
Net interest income after provision for credit losses	156,693				207,914				213,277				230,185				421,191
Non-interest income:
Deposit fees and service charges	5,345				6,563				7,096				11,968				13,659
Accounts receivable management / factoring commissions and other related fees	4,419				5,426				5,491				9,956				10,917
BOLI	4,950				4,955				4,981				9,967				9,936
Loan commissions and fees	8,003				10,477				8,762				19,028				19,239
Investment management fees	1,379				1,852				2,018				3,225				3,870
Net gain (loss) on sale of securities	485				719				(80		)		8,896				639
Net gain on security calls	—				—				—				4,880				—
Other	1,509				2,364				1,946				5,496				4,310
Total non-interest income	26,090				32,356				30,214				73,416				62,570
Non-interest expense:
Compensation and benefits	54,668				58,087				56,953				109,544				115,040
Stock-based compensation plans	5,913				6,617				6,781				11,919				13,398
Occupancy and office operations	14,695				14,515				13,875				29,894				28,390
Information technology	7,312				9,246				9,741				15,330				18,987
Professional fees	5,458				7,077				7,561				11,207				14,638
Amortization of intangible assets	4,200				3,776				3,776				8,400				7,552
FDIC insurance and regulatory assessments	3,638				3,230				2,344				6,844				5,574
Other real estate owned, net	1,233				(68		)		(72		)		1,285				(140		)
Merger-related expenses	—				—				2,481				—				2,481
Impairment related to financial centers and real estate consolidation strategy	—				633				475				—				1,108
Loss on extinguishment of borrowings	9,723				—				1,243				10,476				1,243
Other	18,041				15,052				15,471				34,695				30,523
Total non-interest expense	124,881				118,165				120,629				239,594				238,794
Income before income tax expense	57,902				122,105				122,862				64,007				244,967
Income tax expense (benefit)	7,110				22,955				24,523				(932		)		47,478
Net income	50,792				99,150				98,339				64,939				197,489
Preferred stock dividend	1,972				1,963				1,959				3,948				3,922
Net income available to common stockholders	$	48,820			$	97,187			$	96,380			$	60,991			$	193,567
Weighted average common shares:
Basic	193,479,757				191,890,512				191,436,885				194,909,498				191,655,897
Diluted	193,604,431				192,621,907				192,292,989				195,168,557				192,456,817
Earnings per common share:
Basic earnings per share	$	0.25			$	0.51			$	0.50			$	0.31			$	1.01
Diluted earnings per share	0.25				0.50				0.50				0.31				1.01
Dividends declared per share	0.07				0.07				0.07				0.14				0.14

13

Sterling Bancorp and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)

	As of and for the Quarter Ended
End of Period	June 30, 2020				September 30, 2020				December 31, 2020				March 31, 2021				June 30, 2021
Total assets	$	30,839,893			$	30,617,722			$	29,820,138			$	29,914,282			$	29,143,918
Tangible assets 1	29,054,447				28,836,476				28,043,092				28,141,012				27,374,424
Securities available for sale	2,620,624				2,419,458				2,298,618				2,524,671				2,671,000
Securities held to maturity, net	1,924,955				1,781,892				1,740,838				1,716,786				1,695,470
Loans held for sale2	44,437				36,826				11,749				36,237				19,088
Portfolio loans	22,295,267				22,281,940				21,848,409				21,151,973				20,724,097
Goodwill	1,683,482				1,683,482				1,683,482				1,683,482				1,683,482
Other intangibles	101,964				97,764				93,564				89,788				86,012
Deposits	23,600,621				24,255,333				23,119,522				23,841,718				23,146,711
Municipal deposits (included above)	1,724,049				2,397,072				1,648,945				2,047,349				1,844,719
Borrowings	2,014,259				993,535				1,321,714				667,499				518,021
Stockholders’ equity	4,484,187				4,557,785				4,590,514				4,620,164				4,722,856
Tangible common equity 1	2,561,599				2,639,622				2,676,779				2,710,436				2,817,138
Quarterly Average Balances
Total assets	30,732,914				30,652,856				30,024,165				29,582,605				29,390,977
Tangible assets 1	28,944,714				28,868,840				28,244,364				27,806,859				27,619,006
Loans, gross:
Commercial real estate (includes multi-family)	10,404,643				10,320,930				10,191,707				10,283,292				10,331,355
ADC	519,517				636,061				685,368				624,259				645,094
C&I:
Traditional C&I (includes PPP loans)	3,130,248				3,339,872				3,155,851				2,917,721				2,918,285
Asset-based lending3	981,518				864,075				876,377				751,861				713,428
Payroll finance3	173,175				143,579				162,762				146,839				151,333
Warehouse lending3	1,353,885				1,550,425				1,637,507				1,546,947				1,203,374
Factored receivables3	188,660				163,388				214,021				224,845				215,590
Equipment financing3	1,677,273				1,590,855				1,535,582				1,474,993				1,412,812
Public sector finance3	1,286,265				1,481,260				1,532,899				1,583,066				1,654,370
Total C&I	8,791,024				9,133,454				9,114,999				8,646,272				8,269,192
Residential mortgage	2,006,400				1,862,390				1,691,567				1,558,266				1,427,055
Consumer	219,052				206,700				195,870				182,461				170,965
Loans, total4	21,940,636				22,159,535				21,879,511				21,294,550				20,843,661
Securities (taxable)	2,507,384				2,363,059				2,191,333				2,103,768				2,378,213
Securities (non-taxable)	2,122,672				2,029,805				1,964,451				1,951,210				1,943,913
Other interest earning assets	669,422				610,938				487,696				800,204				803,148
Total interest earning assets	27,240,114				27,163,337				26,522,991				26,149,732				25,968,935
Deposits:
Non-interest bearing demand	5,004,907				5,385,939				5,530,334				5,521,538				5,747,679
Interest bearing demand	4,766,298				4,688,343				4,870,544				4,981,415				4,964,386
Savings (including mortgage escrow funds)	2,890,402				2,727,475				2,712,041				2,717,622				2,777,651
Money market	8,035,750				8,304,834				8,577,920				8,382,533				8,508,735
Certificates of deposit	2,766,580				2,559,325				2,158,348				1,943,820				1,518,224
Total deposits and mortgage escrow	23,463,937				23,665,916				23,849,187				23,546,928				23,516,675
Borrowings	2,101,016				1,747,941				852,057				721,642				527,272
Stockholders’ equity	4,464,403				4,530,334				4,591,770				4,616,660				4,670,718
Tangible common stockholders’ equity 1	2,538,842				2,609,179				2,675,055				2,704,227				2,762,292
1 See a reconciliation of non-GAAP financial measures beginning on page 20.
2 Loans held for sale mainly includes commercial syndication loans.
3 Asset-based lending, payroll finance, warehouse lending, factored receivables, equipment finance and public sector finance comprise our commercial finance loan portfolio.
4 Includes loans held for sale, but excludes allowance for credit losses.

14

Sterling Bancorp and Subsidiaries
SELECTED FINANCIAL DATA AND PERFORMANCE RATIOS
(unaudited, in thousands, except share and per share data)

	As of and for the Quarter Ended
Per Common Share Data	June 30, 2020				September 30, 2020				December 31, 2020				March 31, 2021				June 30, 2021
Basic earnings per share	$	0.25			$	0.43			$	0.39			$	0.51			$	0.50
Diluted earnings per share	0.25				0.43				0.38				0.50				0.50
Adjusted diluted earnings per share, non-GAAP 1	0.29				0.45				0.49				0.51				0.52
Dividends declared per common share	0.07				0.07				0.07				0.07				0.07
Book value per common share	22.35				22.73				23.09				23.28				23.80
Tangible book value per common share1	13.17				13.57				13.87				14.08				14.62
Shares of common stock o/s	194,458,805				194,458,841				192,923,371				192,567,901				192,715,433
Basic weighted average common shares o/s	193,479,757				193,494,929				193,036,678				191,890,512				191,436,885
Diluted weighted average common shares o/s	193,604,431				193,715,943				193,530,930				192,621,907				192,292,989
Performance Ratios (annualized)
Return on average assets	0.64		%		1.07		%		0.99		%		1.33		%		1.32		%
Return on average equity	4.40				7.24				6.45				8.54				8.28
Return on average tangible assets	0.68				1.14				1.05				1.42				1.40
Return on average tangible common equity	7.73				12.57				11.07				14.58				13.99
Return on average tangible assets, adjusted 1	0.79				1.21				1.33				1.42				1.46
Return on avg. tangible common equity, adjusted 1	9.02				13.37				14.03				14.64				14.59
Operating efficiency ratio, as adjusted 1	45.1				43.1				43.0				44.3				44.1
Analysis of Net Interest Income
Accretion income on acquired loans	$	10,086			$	9,172			$	8,560			$	8,272			$	7,812
Yield on loans	4.03		%		3.82		%		3.90		%		3.92		%		3.88		%
Yield on investment securities - tax equivalent 2	3.05				3.09				2.94				3.02				2.84
Yield on interest earning assets - tax equivalent 2	3.79				3.63				3.69				3.68				3.61
Cost of interest bearing deposits	0.61				0.40				0.29				0.20				0.15
Cost of total deposits	0.48				0.31				0.22				0.15				0.11
Cost of borrowings	2.26				1.95				3.35				3.97				3.87
Cost of interest bearing liabilities	0.78				0.53				0.43				0.34				0.26
Net interest rate spread - tax equivalent basis 2	3.01				3.10				3.26				3.34				3.35
Net interest margin - GAAP basis	3.15				3.19				3.33				3.38				3.38
Net interest margin - tax equivalent basis 2	3.20				3.24				3.38				3.43				3.42
Capital
Tier 1 leverage ratio - Company 3	9.51		%		9.93		%		10.14		%		10.50		%		10.91		%
Tier 1 leverage ratio - Bank only 3	10.09				10.48				11.33				11.76				12.10
Tier 1 risk-based capital ratio - Bank only 3	12.24				12.39				13.38				14.04				14.44
Total risk-based capital ratio - Bank only 3	13.85				13.86				14.73				15.42				15.22
Tangible common equity - Company 1	8.82				9.15				9.55				9.63				10.29
Condensed Five Quarter Income Statement
Interest and dividend income	$	253,226			$	244,658			$	242,610			$	233,847			$	230,310
Interest expense	39,927				26,834				20,584				15,933				11,783
Net interest income	213,299				217,824				222,026				217,914				218,527
Provision for credit losses	56,606				30,000				27,500				10,000				5,250
Net interest income after provision for credit losses	156,693				187,824				194,526				207,914				213,277
Non-interest income	26,090				28,225				33,921				32,356				30,214
Non-interest expense	124,881				119,362				133,473				118,165				120,629
Income before income tax expense	57,902				96,687				94,974				122,105				122,862
Income tax expense	7,110				12,280				18,551				22,955				24,523
Net income	$	50,792			$	84,407			$	76,423			$	99,150			$	98,339
1 See a reconciliation of non-GAAP financial measures beginning on page 20.
2 Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable federal tax rate of 21%.
3 Regulatory capital amounts and ratios are preliminary estimates pending filing of the Company’s and Bank’s regulatory reports.

15

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

	As of and for the Quarter Ended
Allowance for Credit Losses Roll Forward	June 30, 2020					September 30, 2020					December 31, 2020					March 31, 2021					June 30, 2021
Balance, beginning of period	$	326,444				$	365,489				$	325,943				$	326,100				$	323,186
Provision for credit losses - loans	56,606					31,000					27,500					10,000					6,000
Loan charge-offs1:
Traditional C&I	(3,988		)			(1,089		)			(17,757		)			(1,027		)			(1,148		)
Asset-based lending	(1,500		)			(1,297		)			—					—					—
Payroll finance	(560		)			—					(730		)			—					(86		)
Factored receivables	(3,731		)			(6,893		)			(2,099		)			(4		)			(761		)
Equipment financing	(7,863		)			(42,128		)			(3,445		)			(2,408		)			(3,004		)
Commercial real estate	(11		)			(3,650		)			(3,266		)			(2,933		)			(7,375		)
Multi-family	(154		)			—					(430		)			(3,230		)			(4,982		)
ADC	(1		)			—					(307		)			(5,000		)			—
Residential mortgage	(702		)			(17,353		)			(23		)			(267		)			(237		)
Consumer	(172		)			(97		)			(62		)			(391		)			(231		)
Total charge-offs	(18,682		)			(72,507		)			(28,119		)			(15,260		)			(17,824		)
Recoveries of loans previously charged-off1:
Traditional C&I	116					677					194					468					588
Asset-based lending	—					—					—					—					1,998
Payroll finance	1					262					38					2					4
Factored receivables	1					185					122					406					52
Equipment financing	387					816					217					854					719
Commercial real estate	584					—					174					487					97
Multi-family	1					—					—					—					15
Acquisition development & construction	—					—					—					—					—
Residential mortgage	—					—					1					37					—
Consumer	31					21					30					92					38
Total recoveries	1,121					1,961					776					2,346					3,511
Net loan charge-offs	(17,561		)			(70,546		)			(27,343		)			(12,914		)			(14,313		)
Balance, end of period	$	365,489				$	325,943				$	326,100				$	323,186				$	314,873
Asset Quality Data and Ratios
Non-performing loans (“NPLs”) non-accrual	$	260,333				$	180,795				$	166,889				$	168,555				$	173,319
NPLs still accruing	272					56					170					2					—
Total NPLs	260,605					180,851					167,059					168,557					173,319
Other real estate owned	8,665					6,919					5,346					5,227					816
Non-performing assets (“NPAs”)	$	269,270				$	187,770				$	172,405				$	173,784				$	174,135
Loans 30 to 89 days past due	$	66,268				$	68,979				$	72,912				$	42,165				$	39,476
Net charge-offs as a % of average loans (annualized)	0.32			%		1.27			%		0.50			%		0.25			%		0.28			%
NPLs as a % of total loans	1.17					0.81					0.76					0.80					0.84
NPAs as a % of total assets	0.87					0.61					0.58					0.58					0.60
ACL as a % of NPLs	140.2					180.2					195.2					191.7					181.7
ACL as a % of total loans	1.64					1.46					1.49					1.53					1.52
Special mention loans	$	141,805				$	204,267				$	461,458				$	494,452				$	388,535
Substandard loans	415,917					375,427					528,760					590,109					611,805
Doubtful loans	—					—					304					295					4,600
1 There were no charge-offs or recoveries on warehouse lending or public sector finance loans during the periods presented. There were no asset-based lending recoveries during the periods presented.

16

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

	At or for the three months ended June 30, 2021																					CECL ACL
	Total loans				Crit/Class				30-89 Days Delinquent				NPLs				NCOs					ACL $				% of Portfolio
Traditional C&I	$	2,917,848			$	164,745			$	6,095			$	41,593			$	(560	)			$	47,494			1.63	%
Asset Based Lending	707,207				72,682				—				7,535				1,998					10,474				1.48
Payroll Finance	158,424				652				—				652				(82		)			1,567				0.99
Mortgage Warehouse	1,229,588				—				—				—				—					1,087				0.09
Factored Receivables	217,399				—				—				—				(709		)			3,025				1.39
Equipment Finance	1,381,308				66,790				890				23,452				(2,285		)			27,987				2.03
Public Sector Finance	1,723,270				—				—				—				—					6,168				0.36
Commercial Real Estate	5,861,542				492,802				12,344				48,074				(7,278		)			155,589				2.65
Multi-family	4,281,615				153,181				12,853				327				(4,967		)			32,054				0.75
ADC	690,224				27,023				—				25,000				—					11,371				1.65
Total commercial loans	19,168,425				977,875				32,182				146,633				(13,883		)			296,816				1.55
Residential	1,389,294				17,416				6,138				17,132				(237		)			14,032				1.01
Consumer	166,378				9,649				1,156				9,554				(193		)			4,025				2.42
Total portfolio loans	$	20,724,097			$	1,004,940			$	39,476			$	173,319			$	(14,313	)			$	314,873			1.52

	At or for the three months ended March 31, 2021																					CECL ACL
	Total loans				Crit/Class				30-89 Days Delinquent				NPLs				NCOs					ACL $				% of Portfolio
Traditional C&I	$	2,886,336			$	133,449			$	3,009			$	50,351			$	(559	)			$	46,393			1.61	%
Asset Based Lending	693,015				106,351				—				10,149				—					11,165				1.61
Payroll Finance	153,987				3,489				—				2,313				2					1,519				0.99
Mortgage Warehouse	1,394,945				—				—				—				—					1,232				0.09
Factored Receivables	229,629				—				—				—				402					3,237				1.41
Equipment Finance	1,475,716				53,850				2,514				28,870				(1,554		)			28,025				1.90
Public Sector Finance	1,617,986				—				—				—				—					4,632				0.29
Commercial Real Estate	6,029,282				588,163				14,039				24,269				(2,446		)			159,422				2.64
Multi-family	4,391,850				145,730				14,029				778				(3,230		)			33,376				0.76
ADC	618,295				26,613				—				25,000				(5,000		)			13,803				2.23
Total commercial loans	19,491,041				1,057,645				33,591				141,730				(12,385		)			302,804				1.55
Residential	1,486,597				17,368				7,347				17,081				(230		)			15,970				1.07
Consumer	174,335				9,843				1,229				9,746				(299		)			4,412				2.53
Total portfolio loans	$	21,151,973			$	1,084,856			$	42,167			$	168,557			$	(12,914	)			$	323,186			1.53

17

Sterling Bancorp and Subsidiaries
Non-GAAP Financial Measures
(unaudited, in thousands, except share and per share data)

	For the Quarter Ended
	March 31, 2021												June 30, 2021
	Average balance				Interest					Yield/Rate			Average balance				Interest					Yield/Rate
	(Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans	$	8,646,272			$	78,006				3.66	%		$	8,269,192			$	76,983				3.73	%
Commercial real estate (includes multi-family)	10,283,292				103,625					4.09			10,331,355				103,225					4.01
ADC	624,259				5,856					3.80			645,094				6,650					4.13
Commercial loans	19,553,823				187,487					3.89			19,245,641				186,858					3.89
Consumer loans	182,461				2,081					4.63			170,965				1,712					4.02
Residential mortgage loans	1,558,266				16,287					4.18			1,427,055				13,115					3.68
Total gross loans 1	21,294,550				205,855					3.92			20,843,661				201,685					3.88
Securities taxable	2,103,768				15,352					2.96			2,378,213				15,749					2.66
Securities non-taxable	1,951,210				14,858					3.05			1,943,913				14,833					3.05
Interest earning deposits	648,178				149					0.09			651,271				164					0.10
FHLB and Federal Reserve Bank Stock	152,026				753					2.01			151,877				994					2.63
Total securities and other earning assets	4,855,182				31,112					2.60			5,125,274				31,740					2.48
Total interest earning assets	26,149,732				236,967					3.68			25,968,935				233,425					3.61
Non-interest earning assets	3,432,873												3,422,042
Total assets	$	29,582,605											$	29,390,977
Interest bearing liabilities:
Demand and savings 2 deposits	$	7,699,037			$	2,513				0.13	%		$	7,742,037			$	2,145				0.11	%
Money market deposits	8,382,533				3,813					0.18			8,508,735				3,140					0.15
Certificates of deposit	1,943,820				2,542					0.53			1,518,224				1,413					0.37
Total interest bearing deposits	18,025,390				8,868					0.20			17,768,996				6,698					0.15
Other borrowings	85,957				36					0.17			35,156				9					0.10
Subordinated debentures - Bank	143,722				1,957					5.45			—				—					—
Subordinated debentures - Company	491,963				5,072					4.12			492,116				5,076					4.13
Total borrowings	721,642				7,065					3.97			527,272				5,085					3.87
Total interest bearing liabilities	18,747,032				15,933					0.34			18,296,268				11,783					0.26
Non-interest bearing deposits	5,521,538												5,747,679
Other non-interest bearing liabilities	697,375												676,312
Total liabilities	24,965,945												24,720,259
Stockholders’ equity	4,616,660												4,670,718
Total liabilities and stockholders’ equity	$	29,582,605											$	29,390,977
Net interest rate spread 3										3.34	%											3.35	%
Net interest earning assets 4	$	7,402,700											$	7,672,667
Net interest margin - tax equivalent					221,034					3.43	%						221,642					3.42	%
Less tax equivalent adjustment					(3,120		)										(3,115		)
Net interest income					217,914												218,527
Accretion income on acquired loans					8,272												7,812
Tax equivalent net interest margin excluding accretion income on acquired loans					$	212,762				3.30	%						$	213,830				3.30	%
Ratio of interest earning assets to interest bearing liabilities	139.5		%										141.9		%

¹ Average balances include loans held for sale and non-accrual loans. Interest includes prepayment fees and late charges.
² Includes club accounts and interest bearing mortgage escrow balances.
³ Net interest rate spread represents the difference between the tax equivalent yield on average interest earning assets and the cost of average interest bearing liabilities.
⁴ Net interest earning assets represents total interest earning assets less total interest bearing liabilities.

18

Sterling Bancorp and Subsidiaries
Non-GAAP Financial Measures
(unaudited, in thousands, except share and per share data)

	For the Quarter Ended
	June 30, 2020												June 30, 2021
	Average balance				Interest					Yield/Rate			Average balance				Interest					Yield/Rate
	(Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans	$	8,791,024			$	84,192				3.85	%		$	8,269,192			$	76,983				3.73	%
Commercial real estate (includes multi-family)	10,404,643				106,408					4.11			10,331,355				103,225					4.01
ADC	519,517				5,762					4.46			645,094				6,650					4.13
Commercial loans	19,715,184				196,362					4.01			19,245,641				186,858					3.89
Consumer loans	219,052				2,233					4.10			170,965				1,712					4.02
Residential mortgage loans	2,006,400				21,309					4.25			1,427,055				13,115					3.68
Total gross loans 1	21,940,636				219,904					4.03			20,843,661				201,685					3.88
Securities taxable	2,507,384				18,855					3.02			2,378,213				15,749					2.66
Securities non-taxable	2,122,672				16,242					3.06			1,943,913				14,833					3.05
Interest earning deposits	455,626				146					0.13			651,271				164					0.10
FHLB and Federal Reserve Bank stock	213,796				1,490					2.80			151,877				994					2.63
Total securities and other earning assets	5,299,478				36,733					2.79			5,125,274				31,740					2.48
Total interest earning assets	27,240,114				256,637					3.79			25,968,935				233,425					3.61
Non-interest earning assets	3,492,800												3,422,042
Total assets	$	30,732,914											$	29,390,977
Interest bearing liabilities:
Demand and savings 2 deposits	$	7,656,700			$	7,224				0.38	%		$	7,742,037			$	2,145				0.11	%
Money market deposits	8,035,750				11,711					0.59			8,508,735				3,140					0.15
Certificates of deposit	2,766,580				9,175					1.33			1,518,224				1,413					0.37
Total interest bearing deposits	18,459,030				28,110					0.61			17,768,996				6,698					0.15
Senior notes	127,862				944					2.95			—				—					—
Other borrowings	1,528,844				5,684					1.50			35,156				9					0.10
Subordinated debentures - Bank	173,265				2,361					5.45			—				—					—
Subordinated debentures - Company	271,045				2,828					4.17			492,116				5,076					4.13
Total borrowings	2,101,016				11,817					2.26			527,272				5,085					3.87
Total interest bearing liabilities	20,560,046				39,927					0.78			18,296,268				11,783					0.26
Non-interest bearing deposits	5,004,907												5,747,679
Other non-interest bearing liabilities	703,558												676,312
Total liabilities	26,268,511												24,720,259
Stockholders’ equity	4,464,403												4,670,718
Total liabilities and stockholders’ equity	$	30,732,914											$	29,390,977
Net interest rate spread 3										3.01	%											3.35	%
Net interest earning assets 4	$	6,680,068											$	7,672,667
Net interest margin - tax equivalent					216,710					3.20	%						221,642					3.42	%
Less tax equivalent adjustment					(3,411		)										(3,115		)
Net interest income					213,299												218,527
Accretion income on acquired loans					10,086												7,812
Tax equivalent net interest margin excluding accretion income on acquired loans					$	206,624				3.05	%						$	213,830				3.30	%
Ratio of interest earning assets to interest bearing liabilities	132.5		%										141.9		%

¹ Average balances include loans held for sale and non-accrual loans. Interest includes prepayment fees and late charges.
² Includes club accounts and interest bearing mortgage escrow balances.
³ Net interest rate spread represents the difference between the tax equivalent yield on average interest earning assets and the cost of average interest bearing liabilities.
⁴ Net interest earning assets represents total interest earning assets less total interest bearing liabilities.

19

Sterling Bancorp and Subsidiaries
Non-GAAP Financial Measures
(unaudited, in thousands, except share and per share data)

The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 25.
	As of and for the Quarter Ended
	June 30, 2020					September 30, 2020					December 31, 2020					March 31, 2021					June 30, 2021
The following table shows the reconciliation of pretax pre-provision net revenue to adjusted pretax pre-provision net revenue1:
Net interest income	$	213,299				$	217,824				$	222,026				$	217,914				$	218,527
Non-interest income	26,090					28,225					33,921					32,356					30,214
Total net revenue	239,389					246,049					255,947					250,270					248,741
Non-interest expense	124,881					119,362					133,473					118,165					120,629
PPNR	114,508					126,687					122,474					132,105					128,112
Adjustments:
Accretion income	(10,086		)			(9,172		)			(8,560		)			(8,272		)			(7,812		)
Net (gain) loss on sale of securities	(485		)			(642		)			111					(719		)			80
Loss on extinguishment of debt	9,723					6,241					2,749					—					1,243
Impairment related to financial centers and real estate consolidation strategy	—					—					13,311					633					475
Merger related expense	—					—					—					—					2,481
Amortization of non-compete agreements and acquired customer list intangible   assets	172					172					172					148					148
Adjusted PPNR	$	113,832				$	123,286				$	130,257				$	123,895				$	124,727

20

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

The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 25.
	As of and for the Quarter Ended
	June 30, 2020					September 30, 2020					December 31, 2020					March 31, 2021					June 30, 2021
The following table shows the reconciliation of stockholders’ equity to tangible common equity and the tangible common equity ratio2:
Total assets	$	30,839,893				$	30,617,722				$	29,820,138				$	29,914,282				$	29,143,918
Goodwill and other intangibles	(1,785,446		)			(1,781,246		)			(1,777,046		)			(1,773,270		)			(1,769,494		)
Tangible assets	29,054,447					28,836,476					28,043,092					28,141,012					27,374,424
Stockholders’ equity	4,484,187					4,557,785					4,590,514					4,620,164					4,722,856
Preferred stock	(137,142		)			(136,917		)			(136,689		)			(136,458		)			(136,224		)
Goodwill and other intangibles	(1,785,446		)			(1,781,246		)			(1,777,046		)			(1,773,270		)			(1,769,494		)
Tangible common stockholders’ equity	2,561,599					2,639,622					2,676,779					2,710,436					2,817,138
Common stock outstanding at period end	194,458,805					194,458,841					192,923,371					192,567,901					192,715,433
Common stockholders’ equity as a % of total assets	14.10			%		14.44			%		14.94			%		14.99			%		15.74			%
Book value per common share	$	22.35				$	22.73				$	23.09				$	23.28				$	23.80
Tangible common equity as a % of tangible assets	8.82			%		9.15			%		9.55			%		9.63			%		10.29			%
Tangible book value per common share	$	13.17				$	13.57				$	13.87				$	14.08				$	14.62
The following table shows the reconciliation of reported return on average tangible common equity and adjusted return on average tangible common equity3:
Average stockholders’ equity	$	4,464,403				$	4,530,334				$	4,591,770				$	4,616,660				$	4,670,718
Average preferred stock	(137,361		)			(137,139		)			(136,914		)			(136,687		)			(136,455		)
Average goodwill and other intangibles	(1,788,200		)			(1,784,016		)			(1,779,801		)			(1,775,746		)			(1,771,971		)
Average tangible common stockholders’ equity	2,538,842					2,609,179					2,675,055					2,704,227					2,762,292
Net income available to common	48,820					82,438					74,457					97,187					96,380
Net income, if annualized	196,353					327,960					296,209					394,147					386,579
Reported return on avg tangible common equity	7.73			%		12.57			%		11.07			%		14.58			%		13.99			%
Adjusted net income (see reconciliation on page 22)	$	56,926				$	87,682				$	94,323				$	97,603				$	100,509
Annualized adjusted net income	228,955					348,822					375,242					395,834					403,140
Adjusted return on average tangible common equity	9.02			%		13.37			%		14.03			%		14.64			%		14.59			%
The following table shows the reconciliation of reported return on average tangible assets and adjusted return on average tangible assets4:
Average assets	$	30,732,914				$	30,652,856				$	30,024,165				$	29,582,605				$	29,390,977
Average goodwill and other intangibles	(1,788,200		)			(1,784,016		)			(1,779,801		)			(1,775,746		)			(1,771,971		)
Average tangible assets	28,944,714					28,868,840					28,244,364					27,806,859					27,619,006
Net income available to common	48,820					82,438					74,457					97,187					96,380
Net income, if annualized	196,353					327,960					296,209					394,147					386,579
Reported return on average tangible assets	0.68			%		1.14			%		1.05			%		1.42			%		1.40			%
Adjusted net income (see reconciliation on page 22)	$	56,926				$	87,682				$	94,323				$	97,603				$	100,509
Annualized adjusted net income	228,955					348,822					375,242					395,834					403,140
Adjusted return on average tangible assets	0.79			%		1.21			%		1.33			%		1.42			%		1.46			%

21

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

The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 25.
	As of and for the Quarter Ended
	June 30, 2020					September 30, 2020					December 31, 2020					March 31, 2021					June 30, 2021
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio5:
Net interest income	$	213,299				$	217,824				$	222,026				$	217,914				$	218,527
Non-interest income	26,090					28,225					33,921					32,356					30,214
Total revenue	239,389					246,049					255,947					250,270					248,741
Tax equivalent adjustment on securities	3,411					3,258					3,146					3,120					3,115
Net (gain) loss on sale of securities	(485		)			(642		)			111					(719		)			80
Depreciation of operating leases	(3,136		)			(3,130		)			(3,130		)			(3,124		)			(2,917		)
Adjusted total revenue	239,179					245,535					256,074					249,547					249,019
Non-interest expense	124,881					119,362					133,473					118,165					120,629
Merger related expense	—					—					—					—					(2,481		)
Impairment related to financial centers and real estate consolidation strategy	—					—					(13,311		)			(633		)			(475		)
Loss on extinguishment of borrowings	(9,723		)			(6,241		)			(2,749		)			—					(1,243		)
Depreciation of operating leases	(3,136		)			(3,130		)			(3,130		)			(3,124		)			(2,917		)
Amortization of intangible assets	(4,200		)			(4,200		)			(4,200		)			(3,776		)			(3,776		)
Adjusted non-interest expense	107,822					105,791					110,083					110,632					109,737
Reported operating efficiency ratio	52.2			%		48.5			%		52.1			%		47.2			%		48.5			%
Adjusted operating efficiency ratio	45.1					43.1					43.0					44.3					44.1
The following table shows the reconciliation of reported net income (GAAP) and earnings per share to adjusted net income available to common stockholders (non-GAAP) and adjusted diluted earnings per share(non-GAAP)6:
Income before income tax expense	$	57,902				$	96,687				$	94,974				$	122,105				$	122,862
Income tax expense	7,110					12,280					18,551					22,955					24,523
Net income (GAAP)	50,792					84,407					76,423					99,150					98,339
Adjustments:
Net (gain) loss on sale of securities	(485		)			(642		)			111					(719		)			80
Loss on extinguishment of debt	9,723					6,241					2,749					—					1,243
Impairment related to financial centers and real estate consolidation strategy.	—					—					13,311					633					475
Merger related expenses	—					—					—					—					2,481
Amortization of non-compete agreements and acquired customer list intangible assets	172					172					172					148					148
Total pre-tax adjustments	9,410					5,771					16,343					62					4,427
Adjusted pre-tax income	67,312					102,458					111,317					122,167					127,289
Adjusted income tax expense	8,414					12,807					15,028					22,601					24,821
Adjusted net income (non-GAAP)	58,898					89,651					96,289					99,566					102,468
Preferred stock dividend	1,972					1,969					1,966					1,963					1,959
Adjusted net income available to common stockholders (non-GAAP)	$	56,926				$	87,682				$	94,323				$	97,603				$	100,509
Weighted average diluted shares	193,604,431					193,715,943					193,530,930					192,621,907					192,292,989
Reported diluted EPS (GAAP)	$	0.25				$	0.43				$	0.38				$	0.50				$	0.50
Adjusted diluted EPS (non-GAAP)	0.29					0.45					0.49					0.51					0.52

22

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

The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 25.
	For the Six Months Ended June 30,
	2020					2021
The following table shows the reconciliation of reported net income (GAAP) and earnings per share to adjusted net income available to common stockholders (non-GAAP) and adjusted diluted earnings per share (non-GAAP)6:
Income before income tax expense	$	64,007				$	244,967
Income tax (benefit) expense	(932		)			47,478
Net income (GAAP)	64,939					197,489
Adjustments:
Net (gain) on sale of securities	(8,896		)			(639		)
Loss on extinguishment of borrowings	10,467					1,243
Impairment related to financial centers and real estate consolidation strategy	—					1,108
Merger-related expense	—					2,481
Amortization of non-compete agreements and acquired customer list intangible assets	343					296
Total pre-tax adjustments	1,914					4,489
Adjusted pre-tax income	65,921					249,456
Adjusted income tax expense	8,240					48,644
Adjusted net income (non-GAAP)	$	57,681				$	200,812
Preferred stock dividend	3,948					3,922
Adjusted net income available to common stockholders (non-GAAP)	$	53,733				$	196,890
Weighted average diluted shares	195,168,557					192,456,817
Diluted EPS as reported (GAAP)	$	0.31				$	1.01
Adjusted diluted EPS (non-GAAP)	0.28					1.02

23

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

The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 25.
	For the Six Months Ended June 30,
	2020					2021
The following table shows the reconciliation of reported return on average tangible common equity and adjusted return on average tangible common equity3:
Average stockholders’ equity	$	4,485,470				$	4,643,838
Average preferred stock	(137,470		)			(136,570		)
Average goodwill and other intangibles	(1,790,300		)			(1,773,848		)
Average tangible common stockholders’ equity	2,557,700					2,733,420
Net income available to common stockholders	$	60,991				$	193,567
Net income available to common stockholders, if annualized	122,317					390,342
Reported return on average tangible common equity	4.78			%		14.28			%
Adjusted net income available to common stockholders (see reconciliation on page 23)	$	53,733				$	196,890
Adjusted net income available to common stockholders, if annualized	107,761					397,043
Adjusted return on average tangible common equity	4.21			%		14.53			%
The following table shows the reconciliation of reported return on avg tangible assets and adjusted return on avg tangible assets4:
Average assets	$	30,608,673				$	29,486,261
Average goodwill and other intangibles	(1,790,300		)			(1,773,848		)
Average tangible assets	28,818,373					27,712,413
Net income available to common stockholders	60,991					193,567
Net income available to common stockholders, if annualized	122,317					390,342
Reported return on average tangible assets	0.42			%		1.41			%
Adjusted net income available to common stockholders (see reconciliation on page 23)	$	53,733				$	196,890
Adjusted net income available to common stockholders, if annualized	107,761					397,043
Adjusted return on average tangible assets	0.38			%		1.43			%
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio5:
Net interest income	$	425,071				$	436,441
Non-interest income	73,416					62,570
Total revenues	498,487					499,011
Tax equivalent adjustment on securities	6,865					6,235
Net (gain) on sale of securities	(8,896		)			(639		)
Depreciation of operating leases	(6,628		)			(6,042		)
Adjusted total net revenue	489,828					498,565
Non-interest expense	239,594					238,794
Merger-related expense	—					(2,481		)
Impairment related to financial centers and real estate consolidation strategy	—					(1,108		)
Loss on extinguishment of borrowings	(10,467		)			(1,243		)
Depreciation of operating leases	(6,628		)			(6,042		)
Amortization of intangible assets	(8,400		)			(7,552		)
Adjusted non-interest expense	$	214,099				$	220,368
Reported operating efficiency ratio	48.1			%		47.9			%
Adjusted operating efficiency ratio	43.7			%		44.2			%

24

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

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

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

² Stockholders’ equity as a percentage of total assets, book value per common share, tangible common equity as a percentage of tangible assets and tangible book common value per share provides information to help assess our capital position and financial strength. We believe tangible book measures improve comparability to other banking organizations that have not engaged in acquisitions that have resulted in the accumulation of goodwill and other intangible assets.

³ Reported return on average tangible common equity and adjusted return on average tangible common equity measures provide information to evaluate the use of our tangible common equity.

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

⁵ The reported operating efficiency ratio is a non-GAAP measure calculated by dividing our GAAP non-interest expense by the sum of our GAAP net interest income plus GAAP non-interest income. The adjusted operating efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense adjusted for intangible asset amortization and certain expenses generally associated with discrete merger transactions and non-recurring strategic plans by the sum of net interest income plus non-interest income plus the tax equivalent adjustment on securities income and elimination of the impact of gain or loss on sale of securities. The adjusted operating efficiency ratio is a measure we use to assess our operating performance.

⁶ Adjusted net income available to common stockholders and adjusted diluted earnings per share present a summary of our earnings, which includes adjustments to exclude certain revenues and expenses (generally associated with discrete merger transactions and non-recurring strategic plans) to help in assessing our profitability.

 25

STERLING BANCORP CONTACT:

Emlen Harmon,  Senior Managing Director - Investor Relations

212.309.7646

http://www.sterlingbancorp.com

FAQ

What were Sterling Bancorp's Q2 2021 earnings results?

Sterling Bancorp reported a net income of $96.4 million and adjusted net income of $100.5 million for Q2 2021.

How did commercial loans perform in Q2 2021 for STL?

Commercial loans decreased by 4.8% year-over-year in Q2 2021.

What is the dividend per share declared by Sterling Bancorp for Q3 2021?

The declared dividend per common share is $0.07.

What is the future outlook for Sterling Bancorp with the Webster Financial merger?

The merger with Webster Financial is targeted to close in Q4 2021, pending regulatory and shareholder approvals.