EX-99.1 2 stlexhibit99109302021.htm EX-99.1 Document

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FOR IMMEDIATE RELEASESTERLING BANCORP CONTACT:
October 20, 2021Emlen Harmon, Senior Managing Director - Investor Relations
212.309.7646
http://www.sterlingbancorp.com
Sterling Bancorp announces results for the third quarter and first nine months of 2021. Diluted earnings per share available to common stockholders in the third quarter of 2021 of $0.49 (as reported) and $0.52 (as adjusted).
Key Performance Highlights
▪GAAP net income available to common stockholders was $93.7 million.
▪Adjusted net income was $99.6 million compared to $100.4 million in the linked quarter.
▪Reported net interest margin excluding accretion income1 was 3.25% compared to 3.30% in the linked quarter.
▪Cost of funding liabilities decreased by one bp to 19 bps; earning asset yields decreased by nine bps to 3.52%.
▪Adjusted PPNR, excluding accretion income,1, 2 was $120.7 million; a decrease of $3.9 million, or 3.1%, compared to the linked quarter.
▪Total deposits were $23.9 billion, an increase of $789.3 million, or 3.4%, compared to the linked quarter.
▪Total core deposits were $23.4 billion, an increase of 3.5% compared to the linked quarter.
▪Total commercial loans were $19.7 billion, an increase of $558.7 million, or 2.9%, compared to the linked quarter.
▪Adjusted non-interest expense1 was $111.3 million; adjusted operating efficiency ratio3 was 45.4%.
▪NPLs increased by $32.1 million to $205.5 million; ACL / portfolio loans of 1.46% and ACL / NPLs of 150.8%.
▪TCE / TA1 was 10.25% and tangible book value per common share1 was $15.03, an increase of 10.8% from a year ago.
▪Received stockholder and Office of the Comptroller of the Currency approval for merger with Webster Financial Corporation.
▪Declared third quarter dividend per common share of $0.07.

Results for the Three Months ended September 30, 2021 vs. September 30, 2020
($ in thousands except per share amounts)GAAP / As Reported
Non-GAAP / As Adjusted1
September 30, 2020September 30, 2021Change % / bpsSeptember 30, 2020September 30, 2021Change % / bps
Total assets$30,617,722 $30,028,425 (1.9)%$30,617,722 $30,028,425 (1.9)%
Total portfolio loans, gross22,281,940 21,276,549 (4.5)22,281,940 21,276,549 (4.5)
Total deposits24,255,333 23,936,023 (1.3)24,255,333 23,936,023 (1.3)
PPNR1, 2
126,687 121,416 (4.2)123,286 120,734 (2.1)
Net income available to common82,438 93,715 13.7 87,682 99,589 13.6 
Diluted EPS available to common0.43 0.49 14.0 0.45 0.52 15.6 
Net interest margin3.19 %3.30 %11 3.24 %3.35 %11 
Tangible book value per common share1
$13.57 $15.03 10.8 $13.57 $15.03 10.8 
Results for the Three Months ended September 30, 2021 vs. June 30, 2021
($ in thousands except per share amounts)GAAP / As Reported
Non-GAAP / As Adjusted1
June 30, 2021September 30, 2021Change % / bpsJune 30, 2021September 30, 2021Change % / bps
PPNR1, 2
$128,112 $121,416 (5.2)$124,647 $120,734 (3.1)
Net income available to common96,380 93,715 (2.8)100,444 99,589 (0.9)
Diluted EPS available to common0.50 0.49 (2.0)0.52 0.52 — 
Net interest margin3.38 %3.30 %(8)3.42 %3.35 %(7)
Operating efficiency ratio3
48.5 50.7 220 44.1 45.4 130 
Allowance for credit losses (“ACL”) - loans$314,873 $309,915 (1.6)$314,873 $309,915 (1.6)
ACL to portfolio loans1.52 %1.46 %(6)1.52 %1.46 %(6)
ACL to NPLs181.7 150.8 (31)181.7 150.8 (31)
Tangible book value per common share1
$14.62 $15.03 2.8 $14.62 $15.03 2.8 

1. Non-GAAP / as adjusted measures are defined in the non-GAAP tables beginning on page 19.
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 24 for an explanation of the operating efficiency ratio.
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PEARL RIVER, N.Y. – October 20, 2021 – Sterling Bancorp (NYSE: STL) (the “Company”), the parent company of Sterling National Bank (the “Bank”), today announced results for the three and nine months ended September 30, 2021. Net income available to common stockholders for the three months ended September 30, 2021 was $93.7 million, or $0.49 per diluted share, compared to net income available to common stockholders of $96.4 million, or $0.50 per diluted share, for the linked quarter ended June 30, 2021, and net income available to common stockholders of $82.4 million, or $0.43 per diluted share, for the three months ended September 30, 2020.

Net income available to common stockholders for the nine months ended September 30, 2021 was $287.3 million, or $1.49 per diluted share, compared to net income available to common stockholders of $143.4 million, or $0.74 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 third quarter of 2021. We are finding opportunities in a competitive lending environment, and delivered robust growth in commercial loans and core deposits in the third quarter. Our credit outlook also continues to show steady improvement.

“Adjusted net income available to common stockholders was $99.6 million, or $0.52 per diluted share. Adjusted earnings per diluted share were in line with the linked quarter and represented an increase of 15.6% over the 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 12.4% and tangible book value per common share has grown at a CAGR of 14.5%. Our key profitability metrics remained strong, with adjusted return on average tangible assets of 1.44% and adjusted return on average tangible common equity of 13.8%.

“Our net interest income was $213.8 million in the third quarter, a decline of $4.7 million over the linked quarter, which largely reflects lower prepayment fees from multi-family loans and lower accretion income. Our net interest margin excluding accretion income was 3.25%, a decline of five basis points from the linked quarter, a result of lower prepayment income and continued downward pressure on earning asset yields. Commercial loan growth accelerated through the third quarter, which should provide a strong tailwind to forward interest income. At September 30, 2021, our total commercial loans were $19.7 billion, an increase of $558.7 million, or 2.9% over the linked quarter, with the greatest contributions from traditional C&I loans and public sector finance portfolios. Our total core deposits were $23.4 billion, which represented an increase of $789.4 million over the linked quarter.

“In our fee-based businesses, client activity and transaction volumes continued to build from pandemic lows. In the third quarter, adjusted non-interest income was $30.9 million, an increase of $677 thousand versus the linked quarter. Relative to the linked quarter, we saw growth in fee income in our syndications, payroll finance and factoring, and derivatives businesses.

“In the third quarter, our adjusted non-interest expenses increased $1.6 million to $111.3 million, and our adjusted operating efficiency ratio was 45.4%. The expense increase reflects continued investment in our digital products and back office automation, as well as in our organic asset generation capabilities. We also saw an increase in regulatory assessments in line with balance sheet growth in the quarter.

“As of September 30, 2021, our allowance for credit losses - portfolio loans was $309.9 million, or 1.46% of total loans and 150.8% of non-performing loans, a decrease in absolute terms from the $314.9 million allowance we reported at the end of the second quarter. We recorded no provision for credit losses in the quarter, consistent with low levels of net charge-offs, continued improvement in the macro economic environment as well as in our asset quality metrics, all of which contributed to a lower modeled quantitative reserve requirement. We maintain prudent loan loss reserves as we continue to navigate the credit cycle and in the context of ongoing uncertainty related to the trajectory and timing of the economic recovery.

“We continue to build on our already strong capital position. At September 30, 2021, our tangible book value per common share was $15.03, an increase of 10.8% over a year ago. Our tangible common equity to tangible assets ratio was 10.25% and our Tier 1 leverage ratio was 11.35%. We declared our regular dividend of $0.07 on our common stock, payable on November 15, 2021 to holders of record as of November 1, 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. We received approval from our stockholders and our primary bank regulator. We continue to be confident in the merits of our proposed combination, and are prepared to execute the merger upon receipt of remaining regulatory approvals and subject to other customary closing conditions.”

Reconciliation of GAAP Results to Adjusted Results (non-GAAP)
The Company’s GAAP net income available to common stockholders of $93.7 million, or $0.49 per diluted share, for the third
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quarter of 2021, included the following items:
▪merger-related expense of $4.6 million, which included transaction advisory fees, diligence, and integration efforts to date;
▪a pre-tax gain of $1.7 million on the sale of investment securities;
▪a pre-tax charge of $2.0 million related to a reserve established in connection with pending litigation;
▪a pre-tax charge of $324 thousand on the loss on sale of a substantial portion of our remaining mortgage servicing asset;
▪a pre-tax charge of $118 thousand related to our real estate consolidation strategy; 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 for the third quarter of 2021 was $99.6 million, or $0.52 per diluted share. For the three months ended September 30, 2021, our effective income tax rate was 21.2%. Based on our results year to date, we increased our estimated effective tax rate for 2021 by 50 basis points to 20.0%. This resulted in a 21.2% effective income tax rate for the third quarter. Our effective tax rate for purposes of reporting adjusted earnings was 19.5% and 12.5% for the three months ended June 30, 2021 and September 30, 2020, respectively.
Non-GAAP financial measures include the terms “adjusted” or “excluding”. See the reconciliation of the Company’s non-GAAP financial measures beginning on page 19.
Net Interest Income and Margin
($ in thousands)For the three months endedChange % / bps
September 30, 2020June 30, 2021September 30, 2021Y-o-YLinked Qtr
Interest and dividend income$244,658 $230,310 $225,089 (8.0)%(2.3)%
Interest expense26,834 11,783 11,252 (58.1)(4.5)
Net interest income$217,824 $218,527 $213,837 (1.8)(2.1)
Accretion income on acquired loans$9,172 $7,812 $6,197 (32.4)%(20.7)%
Yield on loans3.82 %3.88 %3.79 %(3)(9)
Tax equivalent yield on investment securities4
3.09 2.84 2.77 (32)(7)
Tax equivalent yield on interest earning assets4
3.63 3.61 3.52 (11)(9)
Cost of total deposits0.31 0.11 0.11 (20)— 
Cost of interest bearing deposits0.40 0.15 0.14 (26)(1)
Cost of borrowings1.95 3.87 3.87 192 — 
Cost of interest bearing liabilities0.53 0.26 0.25 (28)(1)
Total cost of funding liabilities5
0.42 0.20 0.19 (23)(1)
Tax equivalent net interest margin6
3.24 3.42 3.35 11 (7)
Average loans, including loans held for sale
$22,159,535 $20,843,661 $20,629,138 (6.9)%(1.0)%
Average commercial loans
20,090,445 19,245,641 19,093,778 (5.0)(0.8)
Average investment securities
4,392,864 4,322,126 4,320,243 (1.7)— 
Average cash balances
424,249 651,271 604,396 42.5 (7.2)
Average total interest earning assets
27,163,337 25,968,935 25,705,007 (5.4)(1.0)
Average deposits and mortgage escrow
23,665,916 23,516,675 23,151,444 (2.2)(1.6)
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.

Third quarter 2021 compared with third quarter 2020
Net interest income was $213.8 million for the quarter ended September 30, 2021, a decrease of $4.0 million compared to the third quarter of 2020. This was mainly due to a decline in accretion income and a decline in average interest earning assets between the periods. The impact of these two factors was substantially offset by a decline in interest expense. Other key

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components of changes in net interest income were the following:
▪The average balance of commercial loans declined $996.7 million, was mainly due to a $445.4 million decline in mortgage warehouse, a decline in multi-family loans of $352.1 million and run off totaling $277.2 million from our equipment finance portfolio.
▪The tax equivalent yield on interest earning assets decreased 11 basis points to 3.52%, as legacy assets repriced and securities and other short-term assets comprised a greater portion of our earning assets.
▪Loan yields declined from 3.82% in the third quarter of 2020 to 3.79% in the third quarter of 2021 as a result of continued downward pressure on yields, resulting from the competitive lending environment created by fiscal stimulus and other measures taken in response to the economic slowdown.
▪Accretion income on acquired loans was $6.2 million in the third quarter of 2021, compared to $9.2 million in the third quarter of 2020, a decline of $3.0 million.
▪Average investment securities were $4.3 billion, or 16.8%, of average total interest earning assets for the third quarter of 2021 compared to $4.4 billion, or 16.2%, of average total interest earning assets for the third quarter of 2020. The tax equivalent yield on investment securities was 2.77% for the third quarter of 2021 compared to 3.09% for the same period last year. The decline in yield on investments was mainly a result of an increase in US Treasury securities held in our portfolio.
▪Recent growth in deposits drove increases in average cash balances to $604.4 million compared to $424.2 million in the third quarter of 2020.
▪Total interest expense was $11.3 million, a decline of $15.6 million compared to the third quarter of 2020. This was mainly due to lower interest expense paid on deposits and short-term borrowings and the impact of repayment of higher cost borrowings.
▪The cost of total deposits was 11 basis points for the third quarter of 2021 compared to 31 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 third quarter of 2021 compared to 1.95% for the same period a year ago. The increase was mainly due to the change in composition of our borrowings, with average borrowings of $522.3 million in the current quarter being comprised of $30.1 million in short-term borrowings and $492.3 million in higher coupon longer term borrowings, while for the prior year quarter average borrowings of $1.7 billion were comprised of predominately shorter term borrowings.
▪The total cost of interest bearing liabilities was 25 basis points for the third quarter of 2021 compared to 53 basis points 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 of $23.2 billion decreased $514.5 million during the third quarter of 2021 compared to the same period a year ago. This was mainly due to a $1.2 billion decrease in certificate accounts, which were allowed to mature without renewal.
Third quarter 2021 compared with second quarter 2021
Net interest income decreased $4.7 million for the quarter ended September 30, 2021 compared to the linked quarter, mainly due to the impact of lower prepayment fees on multi-family loans and lower accretion income. Other key components of the changes in net interest income were the following:
▪The average balance of commercial loans decreased $151.9 million, which included a $209.4 million decline in CRE loans, including multi-family and a $98.3 million decline in mortgage warehouse loans.
▪The tax equivalent net interest margin was 3.35% compared to 3.42% in the linked quarter. Excluding accretion income on acquired loans, tax equivalent net interest margin was 3.25% compared to 3.30%, which was mainly due to a $3.0 million decline in prepayment fees from multi-family loans.
▪The yield on loans was 3.79% compared to 3.88% for the linked quarter. The decrease was mainly due to lower prepayment fees from multi-family loans, as well as run off of fixed rate loans, and a decline in accretion income on acquired loans.
▪The tax equivalent yield on interest earning assets was 3.52% compared to 3.61% in the linked quarter, primarily as a result of the factors discussed above.
▪The tax equivalent yield on investment securities was 2.77% compared to 2.84% for the linked quarter. The decline in yield was mainly due to the deployment of excess cash into US Treasury securities.
▪The total cost of borrowings remained at 3.87%, reflecting nominal short-term borrowings and ongoing interest expense in respect of outstanding subordinated notes.
▪Average deposits and mortgage escrow decreased by $365.2 million and average borrowings decreased by $4.9 million

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relative to the linked quarter.
Non-interest Income
($ in thousands)For the three months endedChange %
September 30, 2020June 30, 2021September 30, 2021Y-o-YLinked Qtr
Deposit fees and service charges$5,960 $7,096 $7,007 17.6 %(1.3)%
Accounts receivable management / factoring commissions and other related fees5,393 5,491 5,937 10.1 %8.1 %
Bank owned life insurance (“BOLI”)5,363 4,981 5,009 (6.6)%0.6 %
Loan commissions and fees7,290 8,762 8,620 18.2 %(1.6)%
Investment management fees1,735 2,018 1,819 4.8 %(9.9)%
Net gain on sale of securities642 — 1,656 157.9 %NM
Net (loss) gain on security calls— (80)85 NMNM
Other1,842 1,946 2,414 31.1 %24.0 %
 Total non-interest income28,225 30,214 32,547 15.3 %7.7 %
Net gain on sale of securities642 — 1,656 157.9 %NM
 Adjusted non-interest income $27,583 $30,214 $30,891 12.0 %2.2 %

Third quarter 2021 compared with third quarter 2020
Adjusted non-interest income increased $3.3 million in the third quarter of 2021, compared to the same quarter last year. The increase was mainly due to increased transactional volumes in deposit accounts, in our payroll finance and factoring businesses, in loan syndications and fees from our investment management businesses. The increase in other revenue was mainly from our derivatives business. In the third quarter of 2020, we realized a gain of $642 thousand on the sale of $24.9 million available for sale securities compared to a gain of $1.7 million in the third quarter of 2021. The gain was from sale of two corporate securities and four US Treasury securities.
Third quarter 2021 compared with second quarter 2021
Adjusted non-interest income increased approximately $677 thousand relative to the linked quarter to $30.9 million primarily as a result of an increase in payroll finance and factoring fees, and an increase in other revenue, which includes fees from our syndications and derivatives business. Most other categories were broadly flat versus the linked quarter.

In the third quarter of 2021, we realized a gain of $1.7 million on sale of available for securities.


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Non-interest Expense
($ in thousands)For the three months endedChange % / bps
September 30, 2020June 30, 2021September 30, 2021Y-o-YLinked Qtr
Compensation and benefits$55,960 $56,953 $57,178 2.2 %0.4 %
Stock-based compensation plans5,869 6,781 6,648 13.3 (2.0)
Occupancy and office operations14,722 13,875 13,967 (5.1)0.7 
Information technology
8,422 9,741 10,214 21.3 4.9 
Professional fees6,343 7,561 7,251 14.3 (4.1)
Amortization of intangible assets
4,200 3,776 3,776 (10.1)— 
FDIC insurance and regulatory assessments
3,332 2,344 2,844 (14.6)21.3 
Other real estate owned (“OREO”), net
151 (72)1 NMNM
Merger-related expenses— 2,481 4,581 NM84.6 
Impairment related to financial centers and real estate consolidation strategy— 475 118 NM(75.2)
Loss on extinguishment of borrowings
6,241 1,243 — (100.0)(100.0)
Other expenses
14,122 15,471 18,390 30.2 18.9 
Total non-interest expense
$119,362 $120,629 $124,968 4.7 3.6 
Full time equivalent employees (“FTEs”) at period end
1,466 1,491 1,460 (0.4)(2.1)
Financial centers at period end78 72 72 (7.7)— 
Operating efficiency ratio, as reported7
48.5 %48.5 %50.7 %220 220 
Operating efficiency ratio, as adjusted7
43.1 44.1 45.4 230 130 
7. See a reconciliation of non-GAAP financial measures beginning on page 19.
Third quarter 2021 compared with third quarter 2020
Total non-interest expense increased $5.6 million relative to the third quarter of 2020. Key components of the change in non-interest expense between the periods include the following:
▪Compensation and benefits increased $1.2 million mainly due to an increase in medical costs incurred and an increase in the bonus accrual compared to the prior year period.
▪Occupancy and office operations expense decreased $755 thousand, mainly due to continued consolidation of financial centers and other back-office locations.
▪Information technology expense increased $1.8 million mainly due to the amortization of investments related to various back-office automation and digital banking initiatives.
▪Professional fees increased $908 thousand 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 $4.6 million were incurred in connection with our pending merger with Webster, and included transaction advisory fees, and fees incurred related to diligence and integration efforts to date.
▪Other expenses in 2021 increased $4.3 million mainly due to an accrual for legal settlements of $2.0 million, loss on the sale of the majority of our mortgage servicing assets of $324 thousand, an increase in loan processing expense of $510 thousand, an increase in franchise taxes of $368 thousand and an increase in recruiting fees of $300 thousand.
Third quarter 2021 compared with second quarter 2021
Total non-interest expense increased $4.3 million to $125.0 million versus the linked quarter. The significant factors contributing to the increase were mentioned above and included merger-related expenses and an accrual for legal settlements. Other key components of the change in non-interest expense include the following:
▪Compensation and benefits increased $225 thousand to $57.2 million in the third quarter of 2021. The increase was mainly due to an increase in our incentive compensation accrual.
▪FDIC insurance and regulatory assessments increased in line with increases in assets and other factors that impact the FDIC assessment.
▪Loss on extinguishment of borrowings in the second quarter of 2021 was related to the repayment of the 5.25% fixed-to-floating rate subordinated notes issued by the Bank on March 29, 2016.

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▪Other expenses increased by $2.9 million versus the linked quarter, mainly due to the reasons discussed above.
Taxes
We recorded income tax expense of $25.7 million in the third quarter of 2021, compared to income tax expense of $24.5 million in the linked quarter and $12.3 million in the prior year quarter. For the three months ended September 30, 2021, we recorded income tax expense at an estimated effective income tax rate of 21.2% compared to 20.0% for the three months ended June 30, 2021. Based on performance year to date, we increased our estimated effective income tax rate prior to discrete items to 20.0% from 19.5%.

Key Balance Sheet Highlights as of September 30, 2021
($ in thousands)As of Change % / bps
September 30, 2020June 30, 2021September 30, 2021Y-o-YLinked Qtr
Total assets$30,617,722 $29,143,918 $30,028,425 (1.9)%3.0 %
Total portfolio loans, gross22,281,940 20,724,097 21,276,549 (4.5)2.7 
Commercial & industrial (“C&I”) loans
9,331,717 8,335,044 8,794,329 (5.8)5.5 
Commercial real estate loans (including multi-family)
10,377,282 10,143,157 10,238,337 (1.3)0.9 
Acquisition, development and construction (“ADC”) loans
633,166 690,224 694,443 9.7 0.6 
Total commercial loans 20,342,165 19,168,425 19,727,109 (3.0)2.9 
Residential mortgage loans1,739,563 1,389,294 1,395,248 (19.8)0.4 
Loan portfolio composition:
Commercial & industrial (“C&I”) loans
41.8 %40.2 %41.3 %(50)110 
Commercial real estate loans (including multi-family)
46.6 49.0 48.1 150 (90)
Acquisition, development and construction (“ADC”) loans
2.9 3.3 3.3 40 — 
Residential and consumer8.7 7.5 7.3 (140)(20)
BOLI$625,236 $635,411 $640,294 2.4 0.8 
Core deposits9
22,563,276 22,603,302 23,392,701 3.7 3.5 
Total deposits24,255,333 23,146,711 23,936,023 (1.3)3.4 
Municipal deposits (included in core deposits)2,397,072 1,844,719 2,443,905 2.0 32.5 
Investment securities, net4,201,350 4,366,470 4,283,969 2.0 (1.9)
Investment securities, net to earning assets
15.6 %17.2 %16.5 %90 (70)
Total borrowings$993,535 $518,021 $523,406 (47.3)1.0 
Loans to deposits91.9 %89.5 %88.9 %(300)(60)
Core deposits9 to total deposits
93.0 97.7 97.7 470 — 
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 September 30, 2021 included the following:
▪C&I loans and commercial real estate loans represented 89.4% of our loan portfolio as of September 30, 2021 compared to 88.4% a year ago. C&I loans include traditional C&I, asset-based lending, payroll finance, warehouse lending, factored receivables, equipment financing and public sector finance loans.
▪In the third quarter of 2021, we sold $23.7 million of commercial real estate loans that were rated substandard. Related to this sale, we recorded charge-offs of $1.2 million against the allowance for credit losses - loans to reduce the carrying value of those loans to fair value.
▪Commercial loans increased $558.7 million in the third quarter versus the linked quarter, which was mainly due to growth of $424.5 million in traditional C&I loans and $102.7 million in public sector finance loans.
▪Residential mortgage loans were $1.4 billion as of September 30, 2021, an increase of $6.0 million from the linked quarter, which was due to purchases in the secondary market. Residential mortgage loans declined $344.3 million from the same period a year ago. The decline was mainly due to repayments.

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▪Core deposits as of September 30, 2021 were $23.4 billion, an increase of $789.4 million compared to June 30, 2021, and an increase of $829.4 million compared to September 30, 2020. A significant driver of the increase versus the linked quarter was related to seasonal inflows of municipal deposits. The growth in core deposits on an annual basis was 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 $92.1 million as higher costing balances matured and were not renewed. Compared to September 30, 2020, certificate of deposit accounts declined $700.0 million.
▪Municipal deposits as of September 30, 2021 were $2.4 billion, an increase of $599.2 million relative to June 30, 2021. Municipal deposits generally reach their peak at the end of the third quarter due to seasonal tax collections by local municipalities.
▪Investment securities, net, decreased by $82.5 million from June 30, 2021 and increased $82.6 million from September 30, 2020, representing 16.5% of earning assets as of September 30, 2021. In the third quarter of 2021, the decrease in investment securities was mainly due to the sale of selected US Treasury and corporate securities in response to the changes in interest rates and other factors.
▪Total borrowings as of September 30, 2021 were $523.4 million, a decrease of $5.4 million relative to June 30, 2021, and a decrease of $470.1 million relative to September 30, 2020. As compared to 2020, the decline was mainly a result of the repayment of FHLB borrowings and the subordinated notes - Bank earlier this year.

Credit Quality
($ in thousands)For the three months endedChange % / bps
September 30, 2020June 30, 2021September 30, 2021Y-o-YLinked Qtr
Provision for credit losses - loans$31,000 $6,000 $— (100.0)%(100.0)%
Net charge-offs70,546 14,313 4,958 (93.0)(65.4)
ACL - loans325,943 314,873 309,915 (4.9)(1.6)
Loans 30 to 89 days past due, accruing68,979 39,476 68,719 (0.4)74.1 
Non-performing loans
180,851 173,319 205,453 13.6 18.5 
Annualized net charge-offs to average loans
1.27 %0.28 %0.10 %(117)(18)
Special mention loans$204,267 $388,535 $351,692 72.2 (9.5)
Substandard loans375,427 611,805 621,901 65.7 1.7 
Total criticized and classified loans579,694 1,004,940 977,946 68.7 (2.7)
ACL - loans to total loans
1.46 %1.52 %1.46 %— (6)
ACL - loans to non-performing loans
180.2 181.7 150.8 (2,940)(3,090)
For the three months ended September 30, 2021, we recorded no provision for credit losses on portfolio loans. 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 $5.0 million in the third quarter of 2021, which included $1.2 million of charge-offs related to the sale of $23.7 million of CRE loans that were rated substandard.
Non-performing loans increased by $32.1 million to $205.5 million at September 30, 2021 compared to the linked quarter. The increase was mainly due to a single, secured credit that is in the process of workout. Loans 30 to 89 days past due were $68.7 million, an increase of $29.2 million from the linked quarter. The increase was mainly due to one equipment finance loan to a US Government agency, which we anticipate will be current by the fourth quarter.
Total criticized and classified loans were $977.9 million representing a decrease of $27.0 million relative to the linked quarter.
Special mention loans decreased by $36.8 million from the linked quarter. This was mainly due to loans that were upgraded to pass grade or repayments on the loans.
Substandard loans increased $10.1 million versus the linked quarter. In the third quarter we sold substandard loans loans with an unpaid principal balance of $23.7 million. We incurred charge-offs of $1.2 million in connection with this sale.
As of September 30, 2021, loan payment deferrals were $76.9 million, or 0.4% of the total portfolio loans.
For additional information on our credit quality metrics including delinquency, criticized and classified, see page 17, “Asset Quality Information by Portfolio”.

8

Capital
($ in thousands, except share and per share data)
As ofChange % / bps
September 30, 2020June 30, 2021September 30, 2021Y-o-YLinked Qtr
Total stockholders’ equity$4,557,785 $4,722,856 $4,797,629 5.3 %1.6 %
Preferred stock
136,917 136,224 135,986 (0.7)(0.2)
Goodwill and other intangible assets
1,781,246 1,769,494 1,765,718 (0.9)(0.2)
Tangible common stockholders’ equity 10
$2,639,622 $2,817,138 $2,895,925 9.7 2.8 
Common shares outstanding194,458,841 192,715,433 192,681,503 (0.9)— 
Book value per common share$22.73 $23.80 $24.19 6.4 1.6 
Tangible book value per common share 10
13.57 14.62 15.03 10.8 2.8 
Tangible common equity as a % of tangible assets 10
9.15 %10.29 %10.25 %110 (4)
Est. Tier 1 leverage ratio - Company9.93 10.91 11.35 142 44 
Est. Tier 1 leverage ratio - Company fully implemented9.59 10.55 10.99 140 44 
Est. Tier 1 leverage ratio - Bank
10.48 12.10 12.60 212 50 
Est. Tier 1 leverage ratio - Bank fully implemented10.13 11.74 12.25 212 51 
 10 See a reconciliation of non-GAAP financial measures beginning on page 19.
Total stockholders’ equity increased $74.8 million to $4.8 billion versus the linked quarter as a result of net income of $95.7 million, stock-based compensation of $6.6 million, partially offset by common dividends of $13.4 million, other comprehensive loss of $11.8 million, preferred dividends of $2.2 million and other stock activity net of stock option exercises of $192 thousand.

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

Tangible book value per common share was $15.03 at September 30, 2021, which represented an increase of 10.8% compared to a year ago.

Conference Call Information
Sterling Bancorp will host a teleconference and webcast on Thursday, October 21, 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 (866) 548-4713 Conference ID 3170260. 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 nine months ended September 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.



10

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

September 30, 2020December 31, 2020September 30, 2021
Assets:
Cash and cash equivalents$437,558 $305,002 $929,320 
Investment securities, net4,201,350 4,039,456 4,283,969 
Loans held for sale36,826 11,749 — 
Portfolio loans:
Commercial and industrial (“C&I”)9,331,717 9,160,268 8,794,329 
Commercial real estate (including multi-family)10,377,282 10,238,650 10,238,337 
Acquisition, development and construction (“ADC”) loans633,166 642,943 694,443 
Residential mortgage1,739,563 1,616,641 1,395,248 
Consumer200,212 189,907 154,192 
Total portfolio loans, gross22,281,940 21,848,409 21,276,549 
ACL - loans(325,943)(326,100)(309,915)
Total portfolio loans, net21,955,997 21,522,309 20,966,634 
FHLB and Federal Reserve Bank Stock, at cost
167,293 166,190 151,004 
Accrued interest receivable102,379 97,505 99,450 
Premises and equipment, net217,481 202,555 202,519 
Goodwill1,683,482 1,683,482 1,683,482 
Other intangibles97,764 93,564 82,236 
BOLI625,236 629,576 640,294 
Other real estate owned6,919 5,347 816 
Other assets1,085,437 1,063,403 988,701 
Total assets$30,617,722 $29,820,138 $30,028,425 
Liabilities:
Deposits$24,255,333 $23,119,522 $23,936,023 
FHLB borrowings397,000 382,000 — 
Federal Funds Purchased— 277,000 — 
Paycheck Protection Program Lending Facility117,497 — — 
Other borrowings35,223 27,101 31,023 
Subordinated notes - Company270,445 491,910 492,383 
Subordinated notes - Bank173,370 143,703 — 
Mortgage escrow funds84,031 59,686 79,221 
Other liabilities727,038 728,702 692,146 
Total liabilities26,059,937 25,229,624 25,230,796 
Stockholders’ equity:
Preferred stock136,917 136,689 135,986 
Common stock2,299 2,299 2,299 
Additional paid-in capital3,761,216 3,761,993 3,760,279 
Treasury stock(660,312)(686,911)(697,433)
Retained earnings1,229,799 1,291,628 1,539,354 
Accumulated other comprehensive income87,866 84,816 57,144 
Total stockholders’ equity4,557,785 4,590,514 4,797,629 
Total liabilities and stockholders’ equity$30,617,722 $29,820,138 $30,028,425 
Shares of common stock outstanding at period end194,458,841 192,923,371 192,681,503 
Book value per common share$22.73 $23.09 $24.19 
Tangible book value per common share1
13.57 13.87 15.03 
1 See reconciliation of non-GAAP financial measures beginning on page 19.

11
.
Sterling Bancorp and Subsidiaries                                    
CONSOLIDATED INCOME STATEMENTS
(unaudited, in thousands, except share and per share data)
 For the Quarter EndedFor the Nine Months Ended
September 30, 2020June 30, 2021September 30, 2021September 30, 2020September 30, 2021
Interest and dividend income:
Loans and loan fees$213,009 $201,685 $197,157 $668,352 $604,697 
Securities taxable18,623 15,749 15,433 58,107 46,534 
Securities non-taxable12,257 11,718 11,607 38,085 35,063 
Other earning assets769 1,158 892 6,867 2,952 
Total interest and dividend income244,658 230,310 225,089 771,411 689,246 
Interest expense:
Deposits18,251 6,698 6,161 92,142 21,727 
Borrowings8,583 5,085 5,091 36,374 17,241 
Total interest expense26,834 11,783 11,252 128,516 38,968 
Net interest income217,824 218,527 213,837 642,895 650,278 
Provision for credit losses - loans31,000 6,000 — 224,183 16,000 
Provision for credit losses - held to maturity securities(1,000)(750)— 703 (750)
Net interest income after provision for credit losses187,824 213,277 213,837 418,009 635,028 
Non-interest income:
Deposit fees and service charges5,960 7,096 7,007 17,928 20,666 
Accounts receivable management / factoring commissions and other related fees5,393 5,491 5,937 15,349 16,854 
BOLI5,363 4,981 5,009 15,331 14,945 
Loan commissions and fees7,290 8,762 8,620 26,317 27,859 
Investment management fees1,735 2,018 1,819 4,960 5,689 
Net gain on sale of securities642 — 1,656 9,539 2,361 
Net (loss) gain on security calls— (80)85 4,880 19 
Other1,842 1,946 2,414 7,337 6,724 
Total non-interest income28,225 30,214 32,547 101,641 95,117 
Non-interest expense:
Compensation and benefits55,960 56,953 57,178 165,504 172,218 
Stock-based compensation plans5,869 6,781 6,648 17,788 20,046 
Occupancy and office operations14,722 13,875 13,967 44,616 42,357 
Information technology8,422 9,741 10,214 23,752 29,201 
Professional fees6,343 7,561 7,251 17,550 21,889 
Amortization of intangible assets4,200 3,776 3,776 12,600 11,328 
FDIC insurance and regulatory assessments3,332 2,344 2,844 10,176 8,418 
Other real estate owned, net 151 (72)1 1,436 (139)
Merger-related expenses— 2,481 4,581 — 7,062 
Impairment related to financial centers and real estate consolidation strategy— 475 118 — 1,226 
Loss on extinguishment of borrowings6,241 1,243 — 16,713 1,243 
Other14,122 15,471 18,390 48,821 48,913 
Total non-interest expense119,362 120,629 124,968 358,956 363,762 
Income before income tax expense96,687 122,862 121,416 160,694 366,383 
Income tax expense12,280 24,523 25,745 11,348 73,223 
Net income84,407 98,339 95,671 149,346 293,160 
Preferred stock dividend1,969 1,959 1,956 5,917 5,878 
Net income available to common stockholders$82,438 $96,380 $93,715 $143,429 $287,282 
Weighted average common shares:
Basic193,494,929 191,436,885 191,508,071 194,436,137 191,606,643 
Diluted193,715,943 192,292,989 192,340,487 194,677,020 192,417,008 
Earnings per common share:
Basic earnings per share$0.43 $0.50 $0.49 $0.74 $1.50 
Diluted earnings per share0.43 0.50 0.49 0.74 1.49 
Dividends declared per share0.07 0.07 0.07 0.21 0.21 

12

Sterling Bancorp and Subsidiaries                                    
SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)    
As of and for the Quarter Ended
End of PeriodSeptember 30, 2020December 31, 2020March 31, 2021June 30, 2021September 30, 2021
Total assets$30,617,722 $29,820,138 $29,914,282 $29,143,918 $30,028,425 
Tangible assets 1
28,836,476 28,043,092 28,141,012 27,374,424 28,262,707 
Securities available for sale2,419,458 2,298,618 2,524,671 2,671,000 2,614,822 
Securities held to maturity, net1,781,892 1,740,838 1,716,786 1,695,470 1,669,147 
Loans held for sale2
36,826 11,749 36,237 19,088 — 
Portfolio loans22,281,940 21,848,409 21,151,973 20,724,097 21,276,549 
Goodwill1,683,482 1,683,482 1,683,482 1,683,482 1,683,482 
Other intangibles97,764 93,564 89,788 86,012 82,236 
Deposits24,255,333 23,119,522 23,841,718 23,146,711 23,936,023 
Municipal deposits (included above)2,397,072 1,648,945 2,047,349 1,844,719 2,443,905 
Borrowings993,535 1,321,714 667,499 518,021 523,406 
Stockholders’ equity4,557,785 4,590,514 4,620,164 4,722,856 4,797,629 
Tangible common equity 1
2,639,622 2,676,779 2,710,436 2,817,138 2,895,925 
Quarterly Average Balances
Total assets30,652,856 30,024,165 29,582,605 29,390,977 29,147,332 
Tangible assets 1
28,868,840 28,244,364 27,806,859 27,619,006 27,379,123 
Loans, gross:
  Commercial real estate (includes multi-family)10,320,930 10,191,707 10,283,292 10,331,355 10,121,953 
ADC636,061 685,368 624,259 645,094 711,020 
C&I:
Traditional C&I (includes PPP loans)3,339,872 3,155,851 2,917,721 2,918,285 3,041,352 
Asset-based lending3
864,075 876,377 751,861 713,428 686,904 
Payroll finance3
143,579 162,762 146,839 151,333 158,335 
Warehouse lending3
1,550,425 1,637,507 1,546,947 1,203,374 1,105,046 
Factored receivables3
163,388 214,021 224,845 215,590 216,964 
Equipment financing3
1,590,855 1,535,582 1,474,993 1,412,812 1,313,667 
Public sector finance3
1,481,260 1,532,899 1,583,066 1,654,370 1,738,537 
      Total C&I9,133,454 9,114,999 8,646,272 8,269,192 8,260,805 
  Residential mortgage1,862,390 1,691,567 1,558,266 1,427,055 1,374,398 
  Consumer206,700 195,870 182,461 170,965 160,962 
Loans, total4
22,159,535 21,879,511 21,294,550 20,843,661 20,629,138 
Securities (taxable)2,363,059 2,191,333 2,103,768 2,378,213 2,393,325 
Securities (non-taxable)2,029,805 1,964,451 1,951,210 1,943,913 1,926,918 
Other interest earning assets610,938 487,696 800,204 803,148 755,626 
Total interest earning assets27,163,337 26,522,991 26,149,732 25,968,935 25,705,007 
Deposits:
  Non-interest bearing demand5,385,939 5,530,334 5,521,538 5,747,679 6,001,982 
  Interest bearing demand4,688,343 4,870,544 4,981,415 4,964,386 4,686,129 
  Savings (including mortgage escrow funds)2,727,475 2,712,041 2,717,622 2,777,651 2,721,327 
  Money market8,304,834 8,577,920 8,382,533 8,508,735 8,369,994 
  Certificates of deposit2,559,325 2,158,348 1,943,820 1,518,224 1,372,012 
Total deposits and mortgage escrow23,665,916 23,849,187 23,546,928 23,516,675 23,151,444 
Borrowings1,747,941 852,057 721,642 527,272 522,332 
Stockholders’ equity4,530,334 4,591,770 4,616,660 4,670,718 4,768,712 
Tangible common stockholders’ equity 1
2,609,179 2,675,055 2,704,227 2,762,292 2,864,282 
1 See a reconciliation of non-GAAP financial measures beginning on page 19.
2 Loans held for sale mainly includes commercial syndication loans.
3 Asset-based lending, payroll finance, warehouse lending, factored receivables, equipment financing and public sector finance comprise our commercial finance loan portfolio.
4 Includes loans held for sale, but excludes allowance for credit losses.

13

Sterling Bancorp and Subsidiaries                                    
SELECTED FINANCIAL DATA AND PERFORMANCE RATIOS
(unaudited, in thousands, except share and per share data)
As of and for the Quarter Ended
Per Common Share DataSeptember 30, 2020December 31, 2020March 31, 2021June 30, 2021September 30, 2021
Basic earnings per share$0.43 $0.39 $0.51 $0.50 $0.49 
Diluted earnings per share0.43 0.38 0.50 0.50 0.49 
Adjusted diluted earnings per share, non-GAAP 1
0.45 0.49 0.51 0.52 0.52 
Dividends declared per common share0.07 0.07 0.07 0.07 0.07 
Book value per common share22.73 23.09 23.28 23.80 24.19 
Tangible book value per common share1
13.57 13.87 14.08 14.62 15.03 
Shares of common stock o/s194,458,841 192,923,371 192,567,901 192,715,433 192,681,503 
Basic weighted average common shares o/s
193,494,929 193,036,678 191,890,512 191,436,885 191,508,071 
Diluted weighted average common shares o/s
193,715,943 193,530,930 192,621,907 192,292,989 192,340,487 
Performance Ratios (annualized)
Return on average assets1.07 %0.99 %1.33 %1.32 %1.28 %
Return on average equity7.24 6.45 8.54 8.28 7.80 
Return on average tangible assets1.14 1.05 1.42 1.40 1.36 
Return on average tangible common equity12.57 11.07 14.58 13.99 12.98 
Return on average tangible assets, adjusted 1
1.21 1.33 1.42 1.46 1.44 
Return on avg. tangible common equity, adjusted 1
13.37 14.03 14.64 14.58 13.79 
Operating efficiency ratio, as adjusted 1
43.1 43.0 44.3 44.1 45.4 
Analysis of Net Interest Income
Accretion income on acquired loans$9,172 $8,560 $8,272 $7,812 $6,197 
Yield on loans3.82 %3.90 %3.92 %3.88 %3.79 %
Yield on investment securities - tax equivalent 2
3.09 2.94 3.02 2.84 2.77 
Yield on interest earning assets - tax equivalent 2
3.63 3.69 3.68 3.61 3.52 
Cost of interest bearing deposits0.40 0.29 0.20 0.15 0.14 
Cost of total deposits0.31 0.22 0.15 0.11 0.11 
Cost of borrowings1.95 3.35 3.97 3.87 3.87 
Cost of interest bearing liabilities0.53 0.43 0.34 0.26 0.25 
Net interest rate spread - tax equivalent basis 2
3.10 3.26 3.34 3.35 3.27 
Net interest margin - GAAP basis3.19 3.33 3.38 3.38 3.30 
Net interest margin - tax equivalent basis 2
3.24 3.38 3.43 3.42 3.35 
Capital
Tier 1 leverage ratio - Company 3
9.93 %10.14 %10.50 %10.91 %11.35 %
Tier 1 leverage ratio - Bank only 3
10.48 11.33 11.76 12.10 12.60 
Tier 1 risk-based capital ratio - Bank only 3
12.39 13.38 14.04 14.44 14.52 
Total risk-based capital ratio - Bank only 3
13.86 14.73 15.42 15.22 15.26 
Tangible common equity - Company 1
9.15 9.55 9.63 10.29 10.25 
Condensed Five Quarter Income Statement
Interest and dividend income$244,658 $242,610 $233,847 $230,310 $225,089 
Interest expense26,834 20,584 15,933 11,783 11,252 
Net interest income 217,824 222,026 217,914 218,527 213,837 
Provision for credit losses30,000 27,500 10,000 5,250 — 
Net interest income after provision for credit losses187,824 194,526 207,914 213,277 213,837 
Non-interest income28,225 33,921 32,356 30,214 32,547 
Non-interest expense119,362 133,473 118,165 120,629 124,968 
Income before income tax expense96,687 94,974 122,105 122,862 121,416 
Income tax expense 12,280 18,551 22,955 24,523 25,745 
Net income $84,407 $76,423 $99,150 $98,339 $95,671 
1 See a reconciliation of non-GAAP financial measures beginning on page 19.
2 Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable federal tax rate of 21%.
3 Regulatory capital amounts and ratios are preliminary estimates pending filing of the Company’s and Bank’s regulatory reports.
14

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

As of and for the Quarter Ended
Allowance for Credit Losses Roll ForwardSeptember 30, 2020December 31, 2020March 31, 2021June 30, 2021September 30, 2021
Balance, beginning of period$365,489 $325,943 $326,100 $323,186 $314,873 
Provision for credit losses - loans31,000 27,500 10,000 6,000 — 
Loan charge-offs1:
Traditional C&I(1,089)(17,757)(1,027)(1,148)(1,044)
Asset-based lending(1,297)— — — (7)
Payroll finance— (730)— (86)(8)
Factored receivables(6,893)(2,099)(4)(761)— 
Equipment financing(42,128)(3,445)(2,408)(3,004)(968)
Commercial real estate(3,650)(3,266)(2,933)(7,375)(1,036)
Multi-family— (430)(3,230)(4,982)(418)
ADC— (307)(5,000)— (2,500)
Residential mortgage(17,353)(23)(267)(237)(13)
Consumer(97)(62)(391)(231)(110)
Total charge-offs(72,507)(28,119)(15,260)(17,824)(6,104)
Recoveries of loans previously charged-off1:
Traditional C&I677 194 468 588 169 
Asset-based lending— — — 1,998 — 
Payroll finance262 38 2 4 3 
Factored receivables185 122 406 52 108 
Equipment financing816 217 854 719 525 
Commercial real estate— 174 487 97 265 
Multi-family— — — 15 — 
Acquisition development & construction— — — — — 
Residential mortgage— 1 37 — 1 
Consumer21 30 92 38 75 
Total recoveries1,961 776 2,346 3,511 1,146 
Net loan charge-offs(70,546)(27,343)(12,914)(14,313)(4,958)
Balance, end of period$325,943 $326,100 $323,186 $314,873 $309,915 
Asset Quality Data and Ratios
Non-performing loans (“NPLs”) non-accrual$180,795 $166,889 $168,555 $173,319 $202,082 
NPLs still accruing56 170 2 — 3,371 
Total NPLs180,851 167,059 168,557 173,319 205,453 
Other real estate owned6,919 5,346 5,227 816 816 
Non-performing assets (“NPAs”)$187,770 $172,405 $173,784 $174,135 $206,269 
Loans 30 to 89 days past due
$68,979 $72,912 $42,165 $39,476 $68,719 
Net charge-offs as a % of average loans (annualized)1.27 %0.50 %0.25 %0.28 %0.10 %
NPLs as a % of total loans0.81 0.76 0.80 0.84 0.97 
NPAs as a % of total assets0.61 0.58 0.58 0.60 0.69 
ACL as a % of NPLs180.2 195.2 191.7 181.7 150.8 
ACL as a % of total loans1.46 1.49 1.53 1.52 1.46 
Special mention loans$204,267 $461,458 $494,452 $388,535 $351,692 
Substandard loans375,427 528,760 590,109 611,805 621,901 
Doubtful loans— 304 295 4,600 4,353 
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.




15

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 September 30, 2021CECL ACL
Total loansCrit/Class30-89 Days DelinquentNPLsNCOsACL $% of Portfolio
Traditional C&I$3,342,356 $146,650 $1,127 $44,818 $(875)$61,483 1.84 %
Asset Based Lending 673,679 37,543 — 3,790 (7)10,051 1.49 
Payroll Finance166,999 — — — (5)1,691 1.01 
Mortgage Warehouse 1,301,639 — — — — 1,150 0.09 
Factored Receivables 228,834 — — — 108 3,145 1.37 
Equipment Finance1,254,846 55,164 41,046 21,478 (443)25,474 2.03 
Public Sector Finance 1,825,976 — — — — 5,534 0.30 
Commercial Real Estate 5,941,508 479,002 11,016 87,014 (771)147,604 2.48 
Multi-family4,296,829 171,820 10,072 327 (418)29,379 0.68 
ADC694,443 61,768 — 22,500 (2,500)10,380 1.49 
Total commercial loans19,727,109 951,947 63,261 179,927 (4,911)295,891 1.50 
Residential1,395,248 17,358 4,015 16,976 (12)10,874 0.78 
Consumer154,192 8,641 1,443 8,550 (35)3,150 2.04 
Total portfolio loans$21,276,549 $977,946 $68,719 $205,453 $(4,958)$309,915 1.46 

At or for the three months ended June 30, 2021CECL ACL
Total loansCrit/Class30-89 Days DelinquentNPLsNCOsACL $% 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 Finance158,424 652 — 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 Finance1,381,308 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-family4,281,615 153,181 12,853 327 (4,967)32,054 0.75 
ADC690,224 27,023 — 25,000 — 11,371 1.65 
Total commercial loans19,168,425 977,875 32,182 146,633 (13,883)296,816 1.55 
Residential1,389,294 17,416 6,138 17,132 (237)14,032 1.01 
Consumer166,378 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 



16

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

 For the Quarter Ended
 June 30, 2021September 30, 2021
 Average
balance		InterestYield/RateAverage
balance		InterestYield/Rate
 (Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans$8,269,192 $76,983 3.73 %$8,260,805 $76,340 3.67 %
  Commercial real estate (includes multi-family)10,331,355 103,225 4.01 10,121,953 100,038 3.92 
ADC645,094 6,650 4.13 711,020 7,798 4.35 
Commercial loans19,245,641 186,858 3.89 19,093,778 184,176 3.83 
Consumer loans170,965 1,712 4.02 160,962 1,752 4.32 
Residential mortgage loans1,427,055 13,115 3.68 1,374,398 11,229 3.27 
Total gross loans 1
20,843,661 201,685 3.88 20,629,138 197,157 3.79 
Securities taxable2,378,213 15,749 2.66 2,393,325 15,433 2.56 
Securities non-taxable1,943,913 14,833 3.05 1,926,918 14,692 3.05 
Interest earning deposits651,271 164 0.10 604,396 216 0.14 
FHLB and Federal Reserve Bank Stock151,877 994 2.63 151,230 676 1.77 
Total securities and other earning assets5,125,274 31,740 2.48 5,075,869 31,017 2.42 
Total interest earning assets25,968,935 233,425 3.61 25,705,007 228,174 3.52 
Non-interest earning assets3,422,042 3,442,325 
Total assets$29,390,977 $29,147,332 
Interest bearing liabilities:
Demand and savings 2 deposits
$7,742,037 $2,145 0.11 %$7,407,456 $1,794 0.10 %
Money market deposits8,508,735 3,140 0.15 8,369,994 3,222 0.15 
Certificates of deposit1,518,224 1,413 0.37 1,372,012 1,145 0.33 
Total interest bearing deposits17,768,996 6,698 0.15 17,149,462 6,161 0.14 
Other borrowings35,156 9 0.10 30,057 7 0.09 
Subordinated notes - Company492,116 5,076 4.13 492,275 5,084 4.13 
Total borrowings527,272 5,085 3.87 522,332 5,091 3.87 
Total interest bearing liabilities18,296,268 11,783 0.26 17,671,794 11,252 0.25 
Non-interest bearing deposits5,747,679 6,001,982 
Other non-interest bearing liabilities676,312 704,844 
Total liabilities24,720,259 24,378,620 
Stockholders’ equity4,670,718 4,768,712 
Total liabilities and stockholders’ equity$29,390,977 $29,147,332 
Net interest rate spread 3
3.35 %3.27 %
Net interest earning assets 4
$7,672,667 $8,033,213 
Net interest margin - tax equivalent221,642 3.42 %216,922 3.35 %
Less tax equivalent adjustment(3,115)(3,085)
Net interest income218,527 213,837 
Accretion income on acquired loans7,812 6,197 
Tax equivalent net interest margin excluding accretion income on acquired loans
$213,830 3.30 %$210,725 3.25 %
Ratio of interest earning assets to interest bearing liabilities
141.9 %145.5 %
1 Average balances include loans held for sale and non-accrual loans. Interest includes prepayment fees and late charges.
2 Includes club accounts and interest bearing mortgage escrow balances.
3 Net interest rate spread represents the difference between the tax equivalent yield on average interest earning assets and the cost of average interest bearing liabilities.
4 Net interest earning assets represents total interest earning assets less total interest bearing liabilities.
17

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

 For the Quarter Ended
 September 30, 2020September 30, 2021
 Average
balance		InterestYield/RateAverage
balance		InterestYield/Rate
 (Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans$9,133,454 $83,415 3.63 %$8,260,805 $76,340 3.67 %
  Commercial real estate (includes multi-family)10,320,930 104,463 4.03 10,121,953 100,038 3.92 
ADC636,061 6,117 3.83 711,020 7,798 4.35 
Commercial loans20,090,445 193,995 3.84 19,093,778 184,176 3.83 
Consumer loans206,700 2,025 3.90 160,962 1,752 4.32 
Residential mortgage loans1,862,390 16,989 3.65 1,374,398 11,229 3.27 
Total gross loans 1
22,159,535 213,009 3.82 20,629,138 197,157 3.79 
Securities taxable2,363,059 18,623 3.14 2,393,325 15,433 2.56 
Securities non-taxable2,029,805 15,515 3.06 1,926,918 14,692 3.05 
Interest earning deposits424,249 154 0.14 604,396 216 0.14 
FHLB and Federal Reserve Bank stock186,689 615 1.31 151,230 676 1.77 
Total securities and other earning assets5,003,802 34,907 2.78 5,075,869 31,017 2.42 
Total interest earning assets27,163,337 247,916 3.63 25,705,007 228,174 3.52 
Non-interest earning assets3,489,519 3,442,325 
Total assets$30,652,856 $29,147,332 
Interest bearing liabilities:
Demand and savings 2 deposits
$7,415,818 $4,116 0.22 %$7,407,456 $1,794 0.10 %
Money market deposits8,304,834 8,078 0.39 8,369,994 3,222 0.15 
Certificates of deposit2,559,325 6,057 0.94 1,372,012 1,145 0.33 
Total interest bearing deposits18,279,977 18,251 0.40 17,149,462 6,161 0.14 
Other borrowings1,303,849 3,378 1.03 30,057 7 0.09 
Subordinated notes - Bank173,328 2,360 5.45 — — — 
Subordinated notes - Company270,764 2,845 4.20 492,275 5,084 4.13 
Total borrowings1,747,941 8,583 1.95 522,332 5,091 3.87 
Total interest bearing liabilities20,027,918 26,834 0.53 17,671,794 11,252 0.25 
Non-interest bearing deposits5,385,939 6,001,982 
Other non-interest bearing liabilities708,665 704,844 
Total liabilities26,122,522 24,378,620 
Stockholders’ equity4,530,334 4,768,712 
Total liabilities and stockholders’ equity$30,652,856 $29,147,332 
Net interest rate spread 3
3.10 %3.27 %
Net interest earning assets 4
$7,135,419 $8,033,213 
Net interest margin - tax equivalent221,082 3.24 %216,922 3.35 %
Less tax equivalent adjustment(3,258)(3,085)
Net interest income217,824 213,837 
Accretion income on acquired loans9,172 6,197 
Tax equivalent net interest margin excluding accretion income on acquired loans
$211,910 3.10 %$210,725 3.25 %
Ratio of interest earning assets to interest bearing liabilities
135.6 %145.5 %
1 Average balances include loans held for sale and non-accrual loans. Interest includes prepayment fees and late charges.
2 Includes club accounts and interest bearing mortgage escrow balances.
3 Net interest rate spread represents the difference between the tax equivalent yield on average interest earning assets and the cost of average interest bearing liabilities.
4 Net interest earning assets represents total interest earning assets less total interest bearing liabilities.
18

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


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 24.
As of and for the Quarter Ended
September 30, 2020December 31, 2020March 31, 2021June 30, 2021September 30, 2021
The following table shows the reconciliation of pretax pre-provision net revenue to adjusted pretax pre-provision net revenue1:
Net interest income$217,824 $222,026 $217,914 $218,527 $213,837 
Non-interest income28,225 33,921 32,356 30,214 32,547 
Total net revenue246,049 255,947 250,270 248,741 246,384 
Non-interest expense119,362 133,473 118,165 120,629 124,968 
PPNR126,687 122,474 132,105 128,112 121,416 
Adjustments:
Accretion income(9,172)(8,560)(8,272)(7,812)(6,197)
Net (gain) loss on sale of securities(642)111 (719)— (1,656)
Litigation accrual— — — — 2,000 
Loss on sale of mortgage servicing rights— — — — 324 
Loss on extinguishment of debt6,241 2,749 — 1,243 — 
Impairment related to financial centers and real estate consolidation strategy— 13,311 633 475 118 
Merger related expense— — — 2,481 4,581 
Amortization of non-compete agreements and acquired customer list intangible assets172 172 148 148 148 
Adjusted PPNR$123,286 $130,257 $123,895 $124,647 $120,734 


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 24.
As of and for the Quarter Ended
September 30, 2020December 31, 2020March 31, 2021June 30, 2021September 30, 2021
The following table shows the reconciliation of stockholders’ equity to tangible common equity and the tangible common equity ratio2:
Total assets$30,617,722 $29,820,138 $29,914,282 $29,143,918 $30,028,425 
Goodwill and other intangibles(1,781,246)(1,777,046)(1,773,270)(1,769,494)(1,765,718)
Tangible assets28,836,476 28,043,092 28,141,012 27,374,424 28,262,707 
Stockholders’ equity4,557,785 4,590,514 4,620,164 4,722,856 4,797,629 
Preferred stock(136,917)(136,689)(136,458)(136,224)(135,986)
Goodwill and other intangibles(1,781,246)(1,777,046)(1,773,270)(1,769,494)(1,765,718)
Tangible common stockholders’ equity2,639,622 2,676,779 2,710,436 2,817,138 2,895,925 
Common stock outstanding at period end194,458,841 192,923,371 192,567,901 192,715,433 192,681,503 
Common stockholders’ equity as a % of total assets
14.44 %14.94 %14.99 %15.74 %15.52 %
Book value per common share$22.73 $23.09 $23.28 $23.80 $24.19 
Tangible common equity as a % of tangible assets
9.15 %9.55 %9.63 %10.29 %10.25 %
Tangible book value per common share$13.57 $13.87 $14.08 $14.62 $15.03 
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$4,530,334 $4,591,770 $4,616,660 $4,670,718 $4,768,712 
Average preferred stock
(137,139)(136,914)(136,687)(136,455)(136,221)
Average goodwill and other intangibles
(1,784,016)(1,779,801)(1,775,746)(1,771,971)(1,768,209)
Average tangible common stockholders’ equity
2,609,179 2,675,055 2,704,227 2,762,292 2,864,282 
Net income available to common82,438 74,457 97,187 96,380 93,715 
Net income, if annualized327,960 296,209 394,147 386,579 371,804 
Reported return on avg tangible common equity
12.57 %11.07 %14.58 %13.99 %12.98 %
Adjusted net income (see reconciliation on page 21)
$87,682$94,323$97,603$100,444$99,589
Annualized adjusted net income 348,822 375,242 395,834 402,880 395,109 
Adjusted return on average tangible common equity
13.37 %14.03 %14.64 %14.58 %13.79 %
The following table shows the reconciliation of reported return on average tangible assets and adjusted return on average tangible assets4:
Average assets$30,652,856 $30,024,165 $29,582,605 $29,390,977 $29,147,332 
Average goodwill and other intangibles(1,784,016)(1,779,801)(1,775,746)(1,771,971)(1,768,209)
Average tangible assets28,868,840 28,244,364 27,806,859 27,619,006 27,379,123 
Net income available to common82,438 74,457 97,187 96,380 93,715 
Net income, if annualized327,960 296,209 394,147 386,579 371,804 
Reported return on average tangible assets1.14 %1.05 %1.42 %1.40 %1.36 %
Adjusted net income (see reconciliation on page 21)
$87,682 $94,323 $97,603 $100,444 $99,589 
Annualized adjusted net income 348,822 375,242 395,834 402,880 395,109 
Adjusted return on average tangible assets1.21 %1.33 %1.42 %1.46 %1.44 %

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 24.
As of and for the Quarter Ended
September 30, 2020December 31, 2020March 31, 2021June 30, 2021September 30, 2021
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio5:
Net interest income$217,824 $222,026 $217,914 $218,527 $213,837 
Non-interest income28,225 33,921 32,356 30,214 32,547 
Total revenue246,049 255,947 250,270 248,741 246,384 
Tax equivalent adjustment on securities
3,258 3,146 3,120 3,115 3,085 
Net (gain) loss on sale of securities(642)111 (719)— (1,656)
Depreciation of operating leases(3,130)(3,130)(3,124)(2,917)(2,846)
Adjusted total revenue245,535 256,074 249,547 248,939 244,967 
Non-interest expense119,362 133,473 118,165 120,629 124,968 
Merger related expense— — — (2,481)(4,581)
Loss on sale of mortgage servicing rights— — — — (324)
Accrual for legal settlements— — — — (2,000)
Impairment related to financial centers and real estate consolidation strategy
— (13,311)(633)(475)(118)
Loss on extinguishment of borrowings(6,241)(2,749)— (1,243)— 
Depreciation of operating leases(3,130)(3,130)(3,124)(2,917)(2,846)
Amortization of intangible assets(4,200)(4,200)(3,776)(3,776)(3,776)
Adjusted non-interest expense105,791 110,083 110,632 109,737 111,323 
Reported operating efficiency ratio48.5 %52.1 %47.2 %48.5 %50.7 %
Adjusted operating efficiency ratio43.1 43.0 44.3 44.1 45.4 
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$96,687 $94,974 $122,105 $122,862 $121,416 
Income tax expense12,280 18,551 22,955 24,523 25,745 
Net income (GAAP)84,407 76,423 99,150 98,339 95,671 
Adjustments:
Net (gain) loss on sale of securities(642)111 (719)— (1,656)
Loss on extinguishment of debt6,241 2,749 — 1,243 — 
Accrual for legal settlements— — — — 2,000 
Loss on sale of mortgage servicing rights— — — — 324 
Impairment related to financial centers and real estate consolidation strategy.— 13,311 633 475 118 
Merger related expenses— — — 2,481 4,581 
Amortization of non-compete agreements and acquired customer list intangible assets
172 172 148 148 148 
Total pre-tax adjustments5,771 16,343 62 4,347 5,515 
Adjusted pre-tax income 102,458 111,317 122,167 127,209 126,931 
Adjusted income tax expense12,807 15,028 22,601 24,806 25,386 
Adjusted net income (non-GAAP)89,651 96,289 99,566 102,403 101,545 
Preferred stock dividend
1,969 1,966 1,963 1,959 1,956 
Adjusted net income available to common stockholders (non-GAAP)$87,682 $94,323 $97,603 $100,444 $99,589 
Weighted average diluted shares
193,715,943 193,530,930 192,621,907 192,292,989 192,340,487 
Reported diluted EPS (GAAP)$0.43 $0.38 $0.50 $0.50 $0.49 
Adjusted diluted EPS (non-GAAP)
0.45 0.49 0.51 0.52 0.52 

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 24.
For the Nine Months Ended September 30,
20202021
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$160,694 $366,383 
Income tax expense 11,348 73,223 
Net income (GAAP)149,346 293,160 
Adjustments:
Net (gain) on sale of securities(9,539)(2,361)
Loss on extinguishment of borrowings16,713 1,243 
Accrual for legal settlements— 2,000 
Loss on sale of mortgage servicing rights— 324 
Impairment related to financial centers and real estate consolidation strategy— 1,226 
Merger-related expense— 7,062 
Amortization of non-compete agreements and acquired customer list intangible assets515 443 
Total pre-tax adjustments7,689 9,937 
Adjusted pre-tax income168,383 376,320 
Adjusted income tax expense21,048 75,264 
Adjusted net income (non-GAAP)$147,335 $301,056 
Preferred stock dividend5,917 5,878 
Adjusted net income available to common stockholders (non-GAAP)$141,418 $295,178 
Weighted average diluted shares194,677,020 192,417,008 
Diluted EPS as reported (GAAP)$0.74 $1.49 
Adjusted diluted EPS (non-GAAP)0.73 1.53 

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 24.
For the Nine Months Ended September 30,
20202021
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$4,500,534 $4,685,920 
Average preferred stock(137,359)(136,453)
Average goodwill and other intangibles(1,788,190)(1,771,948)
Average tangible common stockholders’ equity2,574,985 2,777,519 
Net income available to common stockholders$143,429 $287,282 
Net income available to common stockholders, if annualized191,588 384,095 
Reported return on average tangible common equity7.44 %13.83 %
Adjusted net income available to common stockholders (see reconciliation on page 22)
$141,418 $295,178 
Adjusted net income available to common stockholders, if annualized188,902 394,652 
Adjusted return on average tangible common equity7.34 %14.21 %
The following table shows the reconciliation of reported return on avg tangible assets and adjusted return on avg tangible assets4:
Average assets$30,623,508 $29,372,043 
Average goodwill and other intangibles(1,788,190)(1,771,948)
Average tangible assets28,835,318 27,600,095 
Net income available to common stockholders143,429 287,282 
Net income available to common stockholders, if annualized191,588 384,095 
Reported return on average tangible assets0.66 %1.39 %
Adjusted net income available to common stockholders (see reconciliation on page 22)
$141,418 $295,178 
Adjusted net income available to common stockholders, if annualized188,902 394,652 
Adjusted return on average tangible assets0.66 %1.43 %
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio5:
Net interest income$642,895 $650,278 
Non-interest income101,641 95,117 
Total revenues744,536 745,395 
Tax equivalent adjustment on securities10,124 9,321 
Net (gain) on sale of securities (9,539)(2,361)
Depreciation of operating leases(9,758)(8,888)
Adjusted total net revenue735,363 743,467 
Non-interest expense358,956 363,762 
Merger-related expense— (7,062)
Accrual for legal settlements— (2,000)
Loss on sale of mortgage servicing rights— (324)
Impairment related to financial centers and real estate consolidation strategy— (1,226)
Loss on extinguishment of borrowings(16,713)(1,243)
Depreciation of operating leases(9,758)(8,888)
Amortization of intangible assets(12,600)(11,328)
Adjusted non-interest expense$319,885 $331,691 
Reported operating efficiency ratio48.2 %48.8 %
Adjusted operating efficiency ratio43.5 %44.6 %

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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.

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