EX-99.1 2 stlexhibit99112312021.htm EX-99.1

FOR IMMEDIATE RELEASE			STERLING BANCORP CONTACT:
January 19, 2022			Emlen Harmon, Senior Managing Director - Investor Relations
			212.309.7646
			http://www.sterlingbancorp.com

Sterling Bancorp announces results for the fourth quarter and full year of 2021. Reporting record diluted earnings per share available to common stockholders in the fourth quarter of 2021 of $0.57 (as reported) and $0.64 (as adjusted).

Key Performance Highlights

▪GAAP net income available to common stockholders was $109.6 million.

▪Adjusted net income was $121.9 million, an all-time high, and an increase of 22.4% over the linked quarter.

▪Adjusted PPNR, excluding accretion income,1, 2 was $130.8 million; an increase of $10.1 million, or 8.4%, versus the linked quarter. For the full year, adjusted PPNR was $499.6 million in 2021 compared to $493.6 million in 2020.

▪Reported tax equivalent net interest margin excluding accretion income1 was 3.23% compared to 3.25% in the linked quarter.

▪Cost of funding liabilities was unchanged from the linked quarter at 19 bps; earning asset yields decreased by three bps to 3.49%.

▪Total core deposits were $22.8 billion, down 2.5% verses the linked quarter as a result of seasonal municipal outflows, and up 6.2% from a year ago.

▪Total commercial loans were $19.9 billion, an increase of $127.1 million, or 0.6%, compared to the linked quarter. In the fourth quarter of 2021 our commercial teams originated $1.4 billion of loans, the highest level in our history.

▪Released $20.0 million from ACL for portfolio loans given decreases in NPLs and criticized and classified loans.

▪NPLs decreased by $48.6 million to $156.9 million; ACL / portfolio loans of 1.30% and ACL / NPLs of 177.4%.

▪TCE / TA1 was 10.69% and tangible book value per common share1 was $15.50, an increase of 11.8% from a year ago.

▪Anticipated closing date of merger with Webster Financial Corporation (“Webster”) is February 1, 2022.

▪Declared fourth quarter dividend per common share of $0.07.

Results for the Three Months ended December 31, 2021 vs. December 31, 2020

($ in thousands except per share amounts)			GAAP / As Reported																		Non-GAAP / As Adjusted1
			December 31, 2020						December 31, 2021						Change % / bps						December 31, 2020						December 31, 2021						Change % / bps
Total assets			$	29,820,138					$	29,659,471					(0.5)		%				$	29,820,138					$	29,659,471					(0.5)		%
Total portfolio loans, gross			21,848,409						21,356,956						(2.2)						21,848,409						21,356,956						(2.2)
Total deposits			23,119,522						22,814,875						(1.3)						23,119,522						22,814,875						(1.3)
PPNR1, 2			122,474						126,183						3.0						130,257						130,821						0.4
Net income available to common			74,457						109,625						47.2						94,323						121,912						29.2
Diluted EPS available to common			0.38						0.57						50.0						0.49						0.64						30.6
Net interest margin			3.33		%				3.27		%				(6)						3.38		%				3.32		%				(6)
Tangible book value per common share1			$	13.87					$	15.50					11.8						$	13.87					$	15.50					11.8

Results for the Three Months ended December 31, 2021 vs. September 30, 2021

($ in thousands except per share amounts)			GAAP / As Reported																		Non-GAAP / As Adjusted1
			September 30, 2021						December 31, 2021						Change % / bps						September 30, 2021						December 31, 2021						Change % / bps
PPNR1, 2			$	121,416					$	126,183					3.9		%				$	120,734					$	130,821					8.4		%
Net income available to common			93,715						109,625						17.0						99,589						121,912						22.4
Diluted EPS available to common			0.49						0.57						16.3						0.52						0.64						23.1
Net interest margin			3.30		%				3.27		%				(3)						3.35		%				3.32		%				(3)
Operating efficiency ratio3			50.7						51.1						40						45.4						44.6						(80)
Allowance for credit losses (“ACL”) - loans			$	309,915					$	278,232					(10.2)						$	309,915					$	278,232					(10.2)
ACL to portfolio loans			1.46		%				1.30		%				(16)						1.46		%				1.30		%				(16)
ACL to NPLs			150.8						177.4						27						150.8						177.4						27
Tangible book value per common share1			$	15.03					$	15.50					3.1						$	15.03					$	15.50					3.1

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.

1

---

PEARL RIVER, N.Y. – January 19, 2022 – Sterling Bancorp (NYSE: STL) (the “Company”), the parent company of Sterling National Bank (the “Bank”), today announced results for the three and twelve months ended December 31, 2021. Net income available to common stockholders for the three months ended December 31, 2021 was $109.6 million, or $0.57 per diluted share, compared to net income available to common stockholders of $93.7 million, or $0.49 per diluted share, for the linked quarter ended September 30, 2021, and net income available to common stockholders of $74.5 million, or $0.38 per diluted share, for the three months ended December 31, 2020.

Net income available to common stockholders for the year ended December 31, 2021 was $396.9 million, or $2.07 per diluted share, compared to net income available to common stockholders of $217.9 million, or $1.12 per diluted share, for the year ended December 31, 2020.

Chief Executive Officer’s Comments

Jack Kopnisky, President and Chief Executive Officer, commented: “We are pleased with our results for the fourth quarter of 2021, which delivered record levels of adjusted net income, EPS and adjusted EPS, and tangible book value per share. Our strong performance included continued improvement in our credit outlook, an increase in our net interest income of $3.5 million, growth in key commercial portfolios, driven by record commercial originations of $1.4 billion, while maintaining a stable net interest margin, and continued optimization of our funding base in anticipation of our merger with Webster, which we expect to close by February 1, 2022.

“Adjusted PPNR was $130.8 million in the fourth quarter compared to $120.7 million in the third quarter, and was $499.6 million for the full year 2021, compared to $493.6 million in 2020. In addition to the $3.5 million increase in net interest income, fee income grew by $8.4 million in the period, which included $5.3 million in gains from our venture equity investments. Adjusted operating expenses increased $4.0 million, mainly due to higher compensation accruals, stock-based compensation expense and an increase in information technology expense. These increases were partially offset by a decline of $3.6 million in other expenses.

“Our net interest income was $217.4 million in the fourth quarter, compared to $213.8 million in the linked quarter, in line with the 2.5% quarter over quarter increase in earning assets. Our net interest margin excluding accretion income was 3.23%, a decline of two basis points from the linked quarter, a result of continued downward pressure on securities yields and an increase in average balances of short-term assets. At December 31, 2021, our total commercial loans were $19.9 billion, an increase of $127.1 million, or 0.6% over the linked quarter, driven mainly by traditional C&I loans and public sector finance portfolios. We experienced a decline in mortgage warehouse loans in line with the rising rate environment and lower mortgage refinancing activity. Excluding mortgage warehouse loans, commercial loans were up 2.0% quarter over quarter. Our total core deposits were $22.8 billion, which represented a decrease of $583.5 million compared to the linked quarter. The decline in core deposits was mainly due to seasonal municipal deposit outflows. In the fourth quarter, we further reduced our reliance on brokered and wholesale deposits, which declined $537.6 million and were less than $6.0 million at year end.

“In our fee-based businesses, client activity and transaction volumes continued to build from pandemic lows. In the fourth quarter, adjusted non-interest income was $40.9 million, an increase of $10.0 million from 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 fourth quarter, our adjusted non-interest expenses increased $4.0 million to $115.3 million, and our adjusted operating efficiency ratio was 44.6%. The expense increase reflects an increase in incentive compensation, and continued investments in our digital platforms and back-office automation, as well as in our organic asset generation capabilities.

“As of December 31, 2021, our allowance for credit losses - portfolio loans was $278.2 million, or 1.30% of total portfolio loans and 177.4% of non-performing loans, a decrease from the $309.9 million allowance we reported at the end of the third quarter. We released $20.0 million from our allowance for credit losses - loans in the quarter, based on the decline in non-performing loans and criticized and classified loans and the continued improvement in the macro economic environment.

“We continue to build on our already strong capital position. At December 31, 2021, our tangible book value per common share was $15.50, an increase of 11.8% over a year ago. Our tangible common equity to tangible assets ratio was 10.69% and our Tier 1 leverage ratio was 11.42%. We declared our regular dividend of $0.07 on our common stock, payable on February 18, 2022 to holders of record as of January 24, 2022.

“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 Federal Reserve approval for the merger on December 17, 2021 and anticipate merging with and into Webster Financial Corporation by February 1, 2022. We continue to be confident in the merits of our proposed combination, and we believe this merger will be beneficial to our clients, stockholders and colleagues.

2

---

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

The Company’s GAAP net income available to common stockholders of $109.6 million, or $0.57 per diluted share, for the fourth quarter of 2021, included the following items:

▪merger-related expense of $7.7 million, which included additional compensation expense related to personnel retention and integration efforts and professional fees related to merger integration planning and diligence;

▪a pre-tax charge of $2.6 million 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 fourth quarter of 2021 was $121.9 million, or $0.64 per diluted share. In the fourth quarter of 2021, we increased our estimated effective tax rate for full year 2021 by 1.1% to 21.1%, which resulted in an effective income tax rate of 23.9% for the fourth quarter.

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 ended																		Change % / bps
			December 31, 2020						September 30, 2021						December 31, 2021						Y-o-Y						Linked Qtr
Interest and dividend income			$	242,610					$	225,089					$	228,672					(5.7)		%				1.6		%
Interest expense			20,584						11,252						11,318						(45.0)						0.6
Net interest income			$	222,026					$	213,837					$	217,354					(2.1)						1.6
Accretion income on acquired loans			$	8,560					$	6,197					$	5,769					(32.6)		%				(6.9)		%
Yield on loans			3.90		%				3.79		%				3.80		%				(10)						1
Tax equivalent yield on investment securities4			2.94						2.77						2.74						(20)						(3)
Tax equivalent yield on interest earning assets4			3.69						3.52						3.49						(20)						(3)
Cost of total deposits			0.22						0.11						0.10						(12)						(1)
Cost of interest bearing deposits			0.29						0.14						0.14						(15)						—
Cost of borrowings			3.35						3.87						3.69						34						(18)
Cost of interest bearing liabilities			0.43						0.25						0.25						(18)						—
Total cost of funding liabilities5			0.33						0.19						0.19						(14)						—
Tax equivalent net interest margin6			3.38						3.35						3.32						(6)						(3)
Average loans, including loans held for sale			$	21,879,511					$	20,629,138					$	20,912,552					(4.4)		%				1.4		%
Average commercial loans			19,992,074						19,093,778						19,372,639						(3.1)						1.5
Average investment securities			4,155,784						4,320,243						4,363,146						5.0						1.0
Average cash balances			331,587						604,396						911,674						174.9						50.8
Average total interest earning assets			26,522,991						25,705,007						26,338,797						(0.7)						2.5
Average deposits and mortgage escrow			23,849,187						23,151,444						23,581,300						(1.1)						1.9

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.

Fourth quarter 2021 compared with fourth quarter 2020

Net interest income was $217.4 million for the quarter ended December 31, 2021, a decrease of $4.7 million compared to the fourth 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 components of changes in net interest income were the following:

▪The average balance of commercial loans declined $619.4 million, mainly due to a $773.7 million decline in mortgage warehouse, runoff from our equipment finance portfolio totaling $339.8 million and a $164.7 million decline in asset-based

3

---

lending loans. In addition, during the year we sold commercial loans totaling $328.6 million.

▪The tax equivalent yield on interest earning assets decreased 20 basis points to 3.49%, as legacy assets repriced and securities and other short-term assets comprised a greater portion of our earning assets.

▪Loan yields declined from 3.90% in the fourth of 2020 to 3.80% in the fourth 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 and were also impacted by lower accretion income.

▪Accretion income on acquired loans was $5.8 million in the fourth quarter of 2021, compared to $8.6 million in the fourth quarter of 2020, a decline of $2.8 million.

▪Average investment securities were $4.4 billion, or 16.6%, of average total interest earning assets for the fourth quarter of 2021 compared to $4.2 billion, or 15.7%, of average total interest earning assets for the fourth quarter of 2020. The tax equivalent yield on investment securities was 2.74% for the fourth quarter of 2021 compared to 2.94% 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, as well as from runoff in the portfolio being backfilled at lower yields.

▪Total interest expense was $11.3 million, a decline of $9.3 million compared to the fourth quarter of 2020. This was mainly due to lower interest expense paid on deposits and short-term borrowings and repayment of higher cost borrowings.

▪The cost of total deposits was 10 basis points for the fourth quarter of 2021 compared to 22 basis points for the same period a year ago, a result of repricing strategies in response to the low interest rate environment.

▪The cost of borrowings was 3.69% for the fourth quarter of 2021 compared to 3.35% for the same period a year ago. The increase was mainly due to the change in composition of our borrowings, with average borrowings of $549.4 million in the current quarter being comprised of $57.0 million in short-term borrowings and $492.4 million in higher coupon longer term borrowings, while for the prior year quarter short-term borrowings represented a larger portion of the overall composition of total borrowings.

▪The total cost of interest bearing liabilities was 25 basis points for the fourth quarter of 2021 compared to 43 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 $23.6 billion decreased $267.9 million during the fourth quarter of 2021 compared to the same period a year ago. This was mainly due to a $881.5 million decrease in certificate accounts, which were allowed to mature without renewal.

Fourth quarter 2021 compared with third quarter 2021

Net interest income increased $3.5 million for the quarter ended December 31, 2021 compared to the linked quarter, mainly due to the impact of higher prepayment fees on certain commercial real estate and multi-family loans. Other key components of the changes in net interest income were the following:

▪The average balance of commercial loans increased $278.9 million, mainly due to an increase of $352.7 million in traditional C&I and an increase of $170.5 million in public sector finance loans. These increases were partially offset by payoffs from mortgage warehouse and equipment finance loans.

▪The tax equivalent net interest margin was 3.32% compared to 3.35% in the linked quarter. Excluding accretion income on acquired loans, tax equivalent net interest margin was 3.23% compared to 3.25%, which was mainly due to elevated cash levels in the fourth quarter.

▪The yield on loans was 3.80% compared to 3.79% for the linked quarter. The increase was mainly due to higher prepayment fees from commercial real estate and multi-family loans.

▪The tax equivalent yield on interest earning assets was 3.49% compared to 3.52% in the linked quarter, the decline was primarily as a result of the factors discussed above.

▪The tax equivalent yield on investment securities was 2.74% compared to 2.77% 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 was at 3.69% compared to 3.87% for the linked quarter. The decline was due to an increase in short-term lower cost borrowings in the fourth quarter relative to the third quarter.

▪Average deposits and mortgage escrow increased by $429.9 million and average borrowings increased by $27.1 million relative to the linked quarter.

4

---

Non-interest Income

($ in thousands)			For the three months ended																		Change %
			December 31, 2020						September 30, 2021						December 31, 2021						Y-o-Y						Linked Qtr
Deposit fees and service charges			$	5,975					$	7,007					$	8,753					46.5		%				24.9		%
Accounts receivable management / factoring commissions and other related fees			6,498						5,937						6,556						0.9		%				10.4		%
Bank owned life insurance (“BOLI”)			4,961						5,009						5,033						1.5		%				0.5		%
Loan commissions and fees			13,220						8,620						9,282						(29.8)		%				7.7		%
Investment management fees			1,700						1,819						1,770						4.1		%				(2.7)		%
Net (loss) gain on sale of securities			(111)						1,656						—						(100.0)		%				NM
Net gain on security calls			—						85						587						NM						NM
Other			1,678						2,414						8,937						432.6		%				270.2		%
Total non-interest income			33,921						32,547						40,918						20.6		%				25.7		%
Net (loss) gain on sale of securities			(111)						1,656						—						(100.0)		%				NM
Adjusted non-interest income			$	34,032					$	30,891					$	40,918					20.2		%				32.5		%

Fourth quarter 2021 compared with fourth quarter 2020

Adjusted non-interest income increased $6.9 million in the fourth quarter of 2021, compared to the same quarter last year. The increase was mainly due to an increase in other income of $6.4 million which included gains on equity investments and revenues related to credit and debit card transaction activity. Deposit fees and service charges increased between the periods as client transaction volumes continued to recover. In the fourth quarter of 2020, we realized a gain on the sale of Paycheck Protection Program loans of $3.7 million, which was the main cause of the decline in loan commissions and fees between the periods. In the fourth quarter of 2020, we realized a loss of $111 thousand on the sale of available for sale securities compared to $0 in the fourth quarter of 2021.

Fourth quarter 2021 compared with third quarter 2021

Adjusted non-interest income increased approximately $10.0 million relative to the linked quarter to $40.9 million, primarily as a result of the factors discussed above. In addition, accounts receivable management and factoring commissions are generally highest in the fourth quarter and our syndications business and transaction fees also increased due to increased transactional activity versus the linked quarter.

In the fourth quarter of 2021, we realized a gain of $0 on sale of available for securities compared to $1.7 million in the linked quarter.

5

---

Non-interest Expense

($ in thousands)			For the three months ended																		Change % / bps
			December 31, 2020						September 30, 2021						December 31, 2021						Y-o-Y						Linked Qtr
Compensation and benefits			$	56,563					$	57,178					$	59,641					5.4		%				4.3		%
Stock-based compensation plans			5,222						6,648						8,861						69.7						33.3
Occupancy and office operations			14,742						13,967						13,980						(5.2)						0.1
Information technology			9,559						10,214						11,516						20.5						12.7
Professional fees			7,343						7,251						6,687						(8.9)						(7.8)
Amortization of intangible assets			4,200						3,776						3,776						(10.1)						—
FDIC insurance and regulatory assessments			2,865						2,844						2,579						(10.0)						(9.3)
Other real estate owned (“OREO”), net			283						1						(7)						NM						NM
Merger-related expenses			—						4,581						7,688						NM						67.8
Impairment related to financial centers and real estate consolidation strategy			13,311						118						2,571						NM						2,078.8
Loss on extinguishment of borrowings			2,749						—						—						(100.0)						NM
Other expenses			16,636						18,390						14,797						(11.1)						(19.5)
Total non-interest expense			$	133,473					$	124,968					$	132,089					(1.0)						5.7
Full time equivalent employees (“FTEs”) at period end			1,460						1,460						1,439						(1.4)						(1.4)
Financial centers at period end			76						72						72						(5.3)						—
Operating efficiency ratio, as reported7			52.1		%				50.7		%				51.1		%				(100)						40
Operating efficiency ratio, as adjusted7			43.0						45.4						44.6						160						(80)
7. See a reconciliation of non-GAAP financial measures beginning on page 19.

Fourth quarter 2021 compared with fourth quarter 2020

Total non-interest expense decreased $1.4 million relative to the fourth quarter of 2020. Key components of the change in non-interest expense between the periods include the following:

▪Compensation and benefits increased $3.1 million mainly due to an increase in the incentive compensation accrual compared to the prior year period, in line with improved performance.

▪Stock-based compensation plans expense increased mainly due to the accelerated vesting in the fourth quarter of 2021 of performance awards granted in 2019. In line with performance measurement criteria under the plan, the awards vested above target, resulting in $2.5 million in incremental expense recorded in the period.

▪Occupancy and office operations expense decreased $762 thousand, mainly due to continued consolidation of financial centers and other back-office locations.

▪Information technology expense increased $2.0 million mainly due to the amortization of investments related to various back-office automation and digital banking initiatives.

▪Professional fees decreased $656 thousand mainly due to a decline in consulting fees incurred in connection with certain infrastructure related projects.

▪Merger-related expenses of $7.7 million were incurred in connection with our pending merger with Webster, and included compensation costs, including fees for integration efforts and personnel retention awards and professional fees incurred.

▪In the fourth quarter of 2020, impairment related to financial centers and real estate consolidation represents loss on sale of financial centers and other locations and early termination payments on leased locations. In the fourth quarter of 2021, impairments were related mainly to the write-off of fixed assets for back office locations.

▪Other expenses in the fourth quarter of 2021decreased $1.8 million mainly due to lower residential mortgage loan servicing fees, as we sold the majority of our mortgage servicing asset earlier in the year, and a decline in depreciation expense on operating leases.

▪Loss on extinguishment of borrowings in the fourth quarter of 2020 was incurred in connection with the repayment of $250.0 million of FHLB advances and $30.0 million of subordinated notes - Bank.

6

---

Fourth quarter 2021 compared with third quarter 2021

Total non-interest expense increased $7.1 million to $132.1 million versus the linked quarter and included merger-related expenses and an impairment charge to write-off fixed assets that are no longer in use. Other key components of the change in non-interest expense include the following:

▪Compensation and benefits increased $2.5 million to $59.6 million in the fourth quarter of 2021. The increase was mainly due to an increase in our incentive compensation accrual.

▪Stock-based compensation expenses increased $2.2 million, which was mainly related to the vesting of 2019 performance awards.

▪Other expenses declined $3.6 million versus the linked quarter. In the third quarter of 2021, we recorded an accrual for legal settlements of $2.0 million, which did not recur in the fourth quarter. The balance of the decline was mainly due to the reasons discussed above.

Taxes

We recorded income tax expense of $35.0 million in the fourth quarter of 2021, compared to income tax expense of $25.7 million in the linked quarter, and $18.6 million in the prior year quarter. For the three months ended December 31, 2021, we recorded income tax expense at an estimated effective income tax rate of 23.9% compared to 21.2% for the three months ended September 30, 2021. Our estimated effective income tax rate for 2021 was to 21.1% an increase from 20.0% that we used at September 30, 2021.

Key Balance Sheet Highlights as of December 31, 2021

($ in thousands)			As of																		Change % / bps
			December 31, 2020						September 30, 2021						December 31, 2021						Y-o-Y						Linked Qtr
Total assets			$	29,820,138					$	30,028,425					$	29,659,471					(0.5)		%				(1.2)		%
Total portfolio loans, gross			21,848,409						21,276,549						21,356,956						(2.2)						0.4
Commercial & industrial (“C&I”) loans			9,160,268						8,794,329						8,836,087						(3.5)						0.5
Commercial real estate loans (including multi-family)			10,238,650						10,238,337						10,313,499						0.7						0.7
Acquisition, development and construction (“ADC”) loans			642,943						694,443						704,670						9.6						1.5
Total commercial loans			20,041,861						19,727,109						19,854,256						(0.9)						0.6
Residential mortgage loans			1,616,641						1,395,248						1,357,622						(16.0)						(2.7)
Loan portfolio composition:
Commercial & industrial (“C&I”) loans			41.9		%				41.3		%				41.4		%				(50)						10
Commercial real estate loans (including multi-family)			46.9						48.1						48.3						140						20
Acquisition, development and construction (“ADC”) loans			2.9						3.3						3.3						40						—
Residential and consumer			8.3						7.3						7.1						(120)						(20)
BOLI			$	629,576					$	640,294					$	644,007					2.3						0.6
Core deposits9			21,482,525						23,392,701						22,809,171						6.2						(2.5)
Total deposits			23,119,522						23,936,023						22,814,875						(1.3)						(4.7)
Municipal deposits (included in core deposits)			1,648,945						2,443,905						1,931,738						17.1						(21.0)
Investment securities, net			4,039,456						4,283,969						4,434,604						9.8						3.5
Investment securities, net to earning assets			15.4		%				16.5		%				17.0		%				160						50
Total borrowings			$	1,321,714					$	523,406					$	1,212,553					(8.3)						131.7
Loans to deposits			94.5		%				88.9		%				93.6		%				(90)						470
Core deposits9 to total deposits			92.9						97.7						100.0						710						230

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 December 31, 2021 included the following:

▪C&I loans and commercial real estate loans represented 89.7% of our loan portfolio as of December 31, 2021 compared to 88.8% a year ago. C&I loans include traditional C&I, asset-based lending, payroll finance, warehouse lending, factored

7

---

receivables, equipment financing and public sector finance loans.

▪In the fourth quarter of 2021, we sold $76.5 million of commercial real estate loans that were rated special mention and substandard. Related to the sale, we recorded a charge-off of $7.3 million against the allowance for credit losses - loans to reduce the carrying value of those loans to fair value.

▪Commercial loans increased $127.1 million in the fourth quarter versus the linked quarter, which was mainly due to growth of $218.1 million in traditional C&I loans and $164.3 million in public sector finance loans.

▪Residential mortgage loans were $1.4 billion as of December 31, 2021, a decrease of $37.6 million from the linked quarter, which was due to repayments and the sale of approximately $29.0 million of loans many of which were modified during the pandemic. We recorded a charge-off of $3.4 million against the allowance for credit losses - loans to reduce the carrying value of those loans to fair value. Residential mortgage loans declined $259.0 million from the same period a year ago. The decline was mainly due to repayments.

▪Total deposits as of December 31, 2021 were $22.8 billion, a decrease of $1.1 billion, compared to September 30, 2021 and a decline of $304.6 million compared to December 31, 2020. A significant driver of the decrease versus the linked quarter was the non-renewal of $537.6 million of wholesale and brokered deposits. In addition, seasonal outflows of municipal deposits were $512.2 million. In the year over year period, the non-renewal of wholesale and brokered deposits was $1.6 billion.

▪Core deposits as of December 31, 2021 were $22.8 billion, a decrease of $583.5 million compared to September 30, 2021, and an increase of $1.3 billion compared to December 31, 2020. In the fourth quarter, the decline in core deposits was due to outflows of municipal deposits. The growth in core deposits on an annual basis was a result both of our successful deposit gathering strategies, including approximately $300 million in incremental banking as a service and digital deposits, 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 $84.7 million as higher costing balances matured and were not renewed. Compared to December 31, 2020, certificate of deposit accounts declined $614.1 million.

▪Municipal deposits as of December 31, 2021 were $1.9 billion, a decrease of $512.2 million relative to September 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, increased by $150.6 million from September 30, 2021 and increased $395.1 million from December 31, 2020, representing 17.0% of earning assets as of December 31, 2021. In the fourth quarter of 2021, the increase in investment securities was mainly due to purchases of US Treasury, MBS and corporate securities in order to deploy excess cash balances held at the Federal Reserve Bank.

▪Total borrowings as of December 31, 2021 were $1.2 billion, an increase of $689.1 million relative to September 30, 2021, and a decrease of $109.2 million relative to December 31, 2020. As compared to 2020, the decline was mainly a result of the repayment of FHLB borrowings and the subordinated notes - Bank earlier in 2021. The increase in the linked quarter was mainly due to loan growth and deposit outflows.

Credit Quality

($ in thousands)			For the three months ended																		Change % / bps
			December 31, 2020						September 30, 2021						December 31, 2021						Y-o-Y						Linked Qtr
Provision for credit losses - loans			$	27,500					$	—					$	(20,000)					(172.7)		%				NM
Net charge-offs			27,343						4,958						11,683						(57.3)						135.6
ACL - loans			326,100						309,915						278,232						(14.7)						(10.2)
Loans 30 to 89 days past due, accruing			72,912						68,719						46,402						(36.4)						(32.5)
Non-performing loans			167,059						205,453						156,878						(6.1)						(23.6)
Annualized net charge-offs to average loans			0.50		%				0.10		%				0.22		%				(28)						12
Special mention loans			$	461,458					$	351,692					$	343,200					(25.6)						(2.4)
Substandard loans			528,760						621,901						524,316						(0.8)						(15.7)
Total criticized and classified loans			990,522						977,946						871,722						(12.0)						(10.9)
ACL - loans to total loans			1.49		%				1.46		%				1.30		%				(19)						(16)
ACL - loans to non-performing loans			195.2						150.8						177.4						(1,780)						2,660

8

---

For the three months ended December 31, 2021, we recorded a release of provision for credit losses - loans of $20.0 million. The release was based on improvements in non-performing loans, special mention loans and substandard loans as well as in macro-economic factors and outlook which, together, resulted in a lower modeled loss reserve requirement. The provision for credit losses - loans is based on our reasonable and supportable forecasts of expected future losses inherent in our portfolio.

Net charge-offs were $11.7 million in the fourth quarter of 2021, which included $7.3 million of charge-offs related to the sale of $76.5 million of commercial loans that were rated substandard and special mention.

Non-performing loans decreased by $48.6 million to $156.9 million at December 31, 2021 compared to the linked quarter. The decrease was mainly due to the sale of non-performing loans. Loans 30 to 89 days past due were $46.4 million, a decrease of $22.3 million from the linked quarter. The decrease was mainly due to loans that became current during the fourth quarter.

Total criticized and classified loans were $871.7 million representing a decrease of $106.2 million relative to the linked quarter.

Special mention loans decreased by $8.5 million from the linked quarter. This was mainly due to loans that were upgraded to pass grade or repayments.

Substandard loans decreased $97.6 million versus the linked quarter. In the fourth quarter, we sold substandard loans with an unpaid principal balance of $54.5 million. The balance of the decrease was largely due to repayments.

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
			December 31, 2020						September 30, 2021						December 31, 2021						Y-o-Y						Linked Qtr
Total stockholders’ equity			$	4,590,514					$	4,797,629					$	4,880,149					6.3		%				1.7		%
Preferred stock			136,689						135,986						135,745						(0.7)						(0.2)
Goodwill and other intangible assets			1,777,046						1,765,718						1,761,942						(0.8)						(0.2)
Tangible common stockholders’ equity 10			$	2,676,779					$	2,895,925					$	2,982,462					11.4						3.0
Common shares outstanding			192,923,371						192,681,503						192,435,253						(0.3)						(0.1)
Book value per common share			$	23.09					$	24.19					$	24.65					6.8						1.9
Tangible book value per common share 10			13.87						15.03						15.50						11.8						3.1
Tangible common equity as a % of tangible assets 10			9.55		%				10.25		%				10.69		%				114						44
Est. Tier 1 leverage ratio - Company			10.14						11.35						11.42						128						7
Est. Tier 1 leverage ratio - Company fully implemented			9.80						10.99						11.10						130						11
Est. Tier 1 leverage ratio - Bank			11.33						12.60						12.75						142						15
Est. Tier 1 leverage ratio - Bank fully implemented			11.01						12.25						12.44						143						19
10 See a reconciliation of non-GAAP financial measures beginning on page 19.

Total stockholders’ equity increased $82.5 million to $4.9 billion versus the linked quarter, as a result of net income of $111.6 million, stock-based compensation of $8.9 million, partially offset by common dividends of $13.9 million, other comprehensive loss of $16.1 million, preferred dividends of $2.2 million and other stock activity net of stock option exercises of $5.7 million.

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 December 31, 2021 fully implemented data reflects the full impact of CECL and excludes the benefits of phase-ins.

Tangible book value per common share was $15.50 at December 31, 2021, which represented an increase of 11.8% compared to a year ago.

Conference Call Information

Sterling Bancorp will not host a teleconference or webcast due to the anticipated merger closing with Webster on February 1, 2022.

9

---

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.

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 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 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. 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 after the date of this release 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)    

			December 31, 2020						September 30, 2021												December 31, 2021
Assets:
Cash and cash equivalents			$	305,002					$	929,320											$	308,013
Investment securities, net			4,039,456						4,283,969												4,434,604
Loans held for sale			11,749						—												6,924
Portfolio loans:
Commercial and industrial (“C&I”)			9,160,268						8,794,329												8,836,087
Commercial real estate (including multi-family)			10,238,650						10,238,337												10,313,499
Acquisition, development and construction (“ADC”) loans			642,943						694,443												704,670
Residential mortgage			1,616,641						1,395,248												1,357,622
Consumer			189,907						154,192												145,078
Total portfolio loans, gross			21,848,409						21,276,549												21,356,956
ACL - loans			(326,100)						(309,915)												(278,232)
Total portfolio loans, net			21,522,309						20,966,634												21,078,724
FHLB and Federal Reserve Bank Stock, at cost			166,190						151,004												175,008
Accrued interest receivable			97,505						99,450												95,152
Premises and equipment, net			202,555						202,519												197,216
Goodwill			1,683,482						1,683,482												1,683,482
Other intangibles			93,564						82,236												78,460
BOLI			629,576						640,294												644,007
Other real estate owned			5,347						816												197
Other assets			1,063,403						988,701												957,684
Total assets			$	29,820,138					$	30,028,425											$	29,659,471
Liabilities:
Deposits			$	23,119,522					$	23,936,023											$	22,814,875
FHLB borrowings			382,000						—												542,000
Federal Funds Purchased			277,000						—												150,000
Other borrowings			27,101						31,023												28,008
Subordinated notes - Company			491,910						492,383												492,545
Subordinated notes - Bank			143,703						—												—
Mortgage escrow funds			59,686						79,221												58,438
Other liabilities			728,702						692,146												693,456
Total liabilities			25,229,624						25,230,796												24,779,322
Stockholders’ equity:
Preferred stock			136,689						135,986												135,745
Common stock			2,299						2,299												2,299
Additional paid-in capital			3,761,993						3,760,279												3,767,532
Treasury stock			(686,911)						(697,433)												(704,452)
Retained earnings			1,291,628						1,539,354												1,638,011
Accumulated other comprehensive income			84,816						57,144												41,014
Total stockholders’ equity			4,590,514						4,797,629												4,880,149
Total liabilities and stockholders’ equity			$	29,820,138					$	30,028,425											$	29,659,471
Shares of common stock outstanding at period end			192,923,371						192,681,503												192,435,253
Book value per common share			$	23.09					$	24.19											$	24.65
Tangible book value per common share1			13.87						15.03												15.50
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 Ended																		For the Year Ended
			December 31, 2020						September 30, 2021						December 31, 2021						December 31, 2020						December 31, 2021
Interest and dividend income:
Loans and loan fees			$	214,522					$	197,157					$	200,463					$	882,874					$	805,160
Securities taxable			15,679						15,433						15,547						73,786						62,081
Securities non-taxable			11,839						11,607						11,535						49,924						46,598
Other earning assets			570						892						1,127						7,437						4,079
Total interest and dividend income			242,610						225,089						228,672						1,014,021						917,918
Interest expense:
Deposits			13,417						6,161						6,207						105,559						27,934
Borrowings			7,167						5,091						5,111						43,541						22,352
Total interest expense			20,584						11,252						11,318						149,100						50,286
Net interest income			222,026						213,837						217,354						864,921						867,632
Provision for credit losses - loans			27,500						—						(20,000)						251,683						(4,000)
Provision for credit losses - held to maturity securities			—						—						(399)						703						(1,149)
Net interest income after provision for credit losses			194,526						213,837						237,753						612,535						872,781
Non-interest income:
Deposit fees and service charges			5,975						7,007						8,753						23,903						29,419
Accounts receivable management / factoring commissions and other related fees			6,498						5,937						6,556						21,847						23,410
BOLI			4,961						5,009						5,033						20,292						19,978
Loan commissions and fees			13,220						8,620						9,282						39,537						37,141
Investment management fees			1,700						1,819						1,770						6,660						7,459
Net (loss) gain on sale of securities			(111)						1,656						—						9,428						2,361
Net gain on security calls			—						85						587						4,880						606
Other			1,678						2,414						8,937						9,015						15,661
Total non-interest income			33,921						32,547						40,918						135,562						136,035
Non-interest expense:
Compensation and benefits			56,563						57,178						59,641						222,067						231,859
Stock-based compensation plans			5,222						6,648						8,861						23,010						28,907
Occupancy and office operations			14,742						13,967						13,980						59,358						56,337
Information technology			9,559						10,214						11,516						33,311						40,717
Professional fees			7,343						7,251						6,687						24,893						28,576
Amortization of intangible assets			4,200						3,776						3,776						16,800						15,104
FDIC insurance and regulatory assessments			2,865						2,844						2,579						13,041						10,997
Other real estate owned, net			283						1						(7)						1,719						(146)
Merger-related expenses			—						4,581						7,688						—						14,750
Impairment related to financial centers and real estate consolidation strategy			13,311						118						2,571						13,311						3,797
Loss on extinguishment of borrowings			2,749						—						—						19,462						1,243
Other			16,636						18,390						14,797						65,457						63,710
Total non-interest expense			133,473						124,968						132,089						492,429						495,851
Income before income tax expense			94,974						121,416						146,582						255,668						512,965
Income tax expense			18,551						25,745						35,005						29,899						108,228
Net income			76,423						95,671						111,577						225,769						404,737
Preferred stock dividend			1,966						1,956						1,952						7,883						7,830
Net income available to common stockholders			$	74,457					$	93,715					$	109,625					$	217,886					$	396,907
Weighted average common shares:
Basic			193,036,678						191,508,071						191,548,887						194,084,358						191,591,952
Diluted			193,530,930						192,340,487						191,942,078						194,393,343						191,955,440
Earnings per common share:
Basic earnings per share			$	0.39					$	0.49					$	0.57					$	1.12					$	2.07
Diluted earnings per share			0.38						0.49						0.57						1.12						2.07
Dividends declared per share			0.07						0.07						0.07						0.28						0.28

12

---

Sterling Bancorp and Subsidiaries                                    

SELECTED FINANCIAL DATA

(unaudited, in thousands, except share and per share data)    

			As of and for the Quarter Ended
End of Period			December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021
Total assets			$	29,820,138					$	29,914,282					$	29,143,918					$	30,028,425					$	29,659,471
Tangible assets 1			28,043,092						28,141,012						27,374,424						28,262,707						27,897,529
Securities available for sale			2,298,618						2,524,671						2,671,000						2,614,822						2,795,718
Securities held to maturity, net			1,740,838						1,716,786						1,695,470						1,669,147						1,638,886
Loans held for sale2			11,749						36,237						19,088						—						6,924
Portfolio loans			21,848,409						21,151,973						20,724,097						21,276,549						21,356,956
Goodwill			1,683,482						1,683,482						1,683,482						1,683,482						1,683,482
Other intangibles			93,564						89,788						86,012						82,236						78,460
Deposits			23,119,522						23,841,718						23,146,711						23,936,023						22,814,875
Municipal deposits (included above)			1,648,945						2,047,349						1,844,719						2,443,905						1,931,738
Borrowings			1,321,714						667,499						518,021						523,406						1,212,553
Stockholders’ equity			4,590,514						4,620,164						4,722,856						4,797,629						4,880,149
Tangible common equity 1			2,676,779						2,710,436						2,817,138						2,895,925						2,982,462
Quarterly Average Balances
Total assets			30,024,165						29,582,605						29,390,977						29,147,332						29,728,436
Tangible assets 1			28,244,364						27,806,859						27,619,006						27,379,123						27,964,017
Loans, gross:
Commercial real estate (includes multi-family)			10,191,707						10,283,292						10,331,355						10,121,953						10,178,840
ADC			685,368						624,259						645,094						711,020						718,423
C&I:
Traditional C&I (includes PPP loans)			3,155,851						2,917,721						2,918,285						3,041,352						3,394,023
Asset-based lending3			876,377						751,861						713,428						686,904						711,706
Payroll finance3			162,762						146,839						151,333						158,335						168,574
Warehouse lending3			1,637,507						1,546,947						1,203,374						1,105,046						863,782
Factored receivables3			214,021						224,845						215,590						216,964						232,454
Equipment financing3			1,535,582						1,474,993						1,412,812						1,313,667						1,195,787
Public sector finance3			1,532,899						1,583,066						1,654,370						1,738,537						1,909,050
Total C&I			9,114,999						8,646,272						8,269,192						8,260,805						8,475,376
Residential mortgage			1,691,567						1,558,266						1,427,055						1,374,398						1,388,937
Consumer			195,870						182,461						170,965						160,962						150,976
Loans, total4			21,879,511						21,294,550						20,843,661						20,629,138						20,912,552
Securities (taxable)			2,191,333						2,103,768						2,378,213						2,393,325						2,449,849
Securities (non-taxable)			1,964,451						1,951,210						1,943,913						1,926,918						1,913,297
Other interest earning assets			487,696						800,204						803,148						755,626						1,063,099
Total interest earning assets			26,522,991						26,149,732						25,968,935						25,705,007						26,338,797
Deposits:
Non-interest bearing demand			5,530,334						5,521,538						5,747,679						6,001,982						6,380,827
Interest bearing demand			4,870,544						4,981,415						4,964,386						4,686,129						4,845,523
Savings (including mortgage escrow funds)			2,712,041						2,717,622						2,777,651						2,721,327						2,716,053
Money market			8,577,920						8,382,533						8,508,735						8,369,994						8,362,021
Certificates of deposit			2,158,348						1,943,820						1,518,224						1,372,012						1,276,876
Total deposits and mortgage escrow			23,849,187						23,546,928						23,516,675						23,151,444						23,581,300
Borrowings			852,057						721,642						527,272						522,332						549,408
Stockholders’ equity			4,591,770						4,616,660						4,670,718						4,768,712						4,835,709
Tangible common stockholders’ equity 1			2,675,055						2,704,227						2,762,292						2,864,282						2,935,307
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 Data			December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021
Basic earnings per share			$	0.39					$	0.51					$	0.50					$	0.49					$	0.57
Diluted earnings per share			0.38						0.50						0.50						0.49						0.57
Adjusted diluted earnings per share, non-GAAP 1			0.49						0.51						0.52						0.52						0.64
Dividends declared per common share			0.07						0.07						0.07						0.07						0.07
Book value per common share			23.09						23.28						23.80						24.19						24.65
Tangible book value per common share1			13.87						14.08						14.62						15.03						15.50
Shares of common stock o/s			192,923,371						192,567,901						192,715,433						192,681,503						192,435,253
Basic weighted average common shares o/s			193,036,678						191,890,512						191,436,885						191,508,071						191,548,887
Diluted weighted average common shares o/s			193,530,930						192,621,907						192,292,989						192,340,487						191,942,078
Performance Ratios (annualized)
Return on average assets			0.99		%				1.33		%				1.32		%				1.28		%				1.46		%
Return on average equity			6.45						8.54						8.28						7.80						8.99
Return on average tangible assets			1.05						1.42						1.40						1.36						1.56
Return on average tangible common equity			11.07						14.58						13.99						12.98						14.82
Return on average tangible assets, adjusted 1			1.33						1.42						1.46						1.44						1.73
Return on avg. tangible common equity, adjusted 1			14.03						14.64						14.58						13.79						16.48
Operating efficiency ratio, as adjusted 1			43.0						44.3						44.1						45.4						44.6
Analysis of Net Interest Income
Accretion income on acquired loans			$	8,560					$	8,272					$	7,812					$	6,197					$	5,769
Yield on loans			3.90		%				3.92		%				3.88		%				3.79		%				3.80		%
Yield on investment securities - tax equivalent 2			2.94						3.02						2.84						2.77						2.74
Yield on interest earning assets - tax equivalent 2			3.69						3.68						3.61						3.52						3.49
Cost of interest bearing deposits			0.29						0.20						0.15						0.14						0.14
Cost of total deposits			0.22						0.15						0.11						0.11						0.10
Cost of borrowings			3.35						3.97						3.87						3.87						3.69
Cost of interest bearing liabilities			0.43						0.34						0.26						0.25						0.25
Net interest rate spread - tax equivalent basis 2			3.26						3.34						3.35						3.27						3.24
Net interest margin - GAAP basis			3.33						3.38						3.38						3.30						3.27
Net interest margin - tax equivalent basis 2			3.38						3.43						3.42						3.35						3.32
Capital
Tier 1 leverage ratio - Company 3			10.14		%				10.50		%				10.91		%				11.35		%				11.42		%
Tier 1 leverage ratio - Bank only 3			11.33						11.76						12.10						12.60						12.75
Tier 1 risk-based capital ratio - Bank only 3			13.38						14.04						14.44						14.52						15.00
Total risk-based capital ratio - Bank only 3			14.73						15.42						15.22						15.26						15.65
Tangible common equity - Company 1			9.55						9.63						10.29						10.25						10.69
Condensed Five Quarter Income Statement
Interest and dividend income			$	242,610					$	233,847					$	230,310					$	225,089					$	228,672
Interest expense			20,584						15,933						11,783						11,252						11,318
Net interest income			222,026						217,914						218,527						213,837						217,354
Provision for credit losses			27,500						10,000						5,250						—						(20,399)
Net interest income after provision for credit losses			194,526						207,914						213,277						213,837						237,753
Non-interest income			33,921						32,356						30,214						32,547						40,918
Non-interest expense			133,473						118,165						120,629						124,968						132,089
Income before income tax expense			94,974						122,105						122,862						121,416						146,582
Income tax expense			18,551						22,955						24,523						25,745						35,005
Net income			$	76,423					$	99,150					$	98,339					$	95,671					$	111,577
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 Forward			December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021
Balance, beginning of period			$	325,943					$	326,100					$	323,186					$	314,873					$	309,915
Provision for credit losses - loans			27,500						10,000						6,000						—						(20,000)
Loan charge-offs1:
Traditional C&I			(17,757)						(1,027)						(1,148)						(1,044)						(884)
Asset-based lending			—						—						—						(7)						(162)
Payroll finance			(730)						—						(86)						(8)						—
Factored receivables			(2,099)						(4)						(761)						—						(6)
Equipment financing			(3,445)						(2,408)						(3,004)						(968)						(873)
Commercial real estate			(3,266)						(2,933)						(7,375)						(1,036)						(7,563)
Multi-family			(430)						(3,230)						(4,982)						(418)						(1,861)
ADC			(307)						(5,000)						—						(2,500)						—
Residential mortgage			(23)						(267)						(237)						(13)						(3,352)
Consumer			(62)						(391)						(231)						(110)						(40)
Total charge-offs			(28,119)						(15,260)						(17,824)						(6,104)						(14,741)
Recoveries of loans previously charged-off1:
Traditional C&I			194						468						588						169						289
Asset-based lending			—						—						1,998						—						—
Payroll finance			38						2						4						3						3
Factored receivables			122						406						52						108						75
Equipment financing			217						854						719						525						1,713
Commercial real estate			174						487						97						265						571
Multi-family			—						—						15						—						332
Acquisition development & construction			—						—						—						—						—
Residential mortgage			1						37						—						1						—
Consumer			30						92						38						75						75
Total recoveries			776						2,346						3,511						1,146						3,058
Net loan charge-offs			(27,343)						(12,914)						(14,313)						(4,958)						(11,683)
Balance, end of period			$	326,100					$	323,186					$	314,873					$	309,915					$	278,232
Asset Quality Data and Ratios
Non-performing loans (“NPLs”) non-accrual			$	166,889					$	168,555					$	173,319					$	202,082					$	156,878
NPLs still accruing			170						2						—						3,371						—
Total NPLs			167,059						168,557						173,319						205,453						156,878
Other real estate owned			5,347						5,227						816						816						197
Non-performing assets (“NPAs”)			$	172,406					$	173,784					$	174,135					$	206,269					$	157,075
Loans 30 to 89 days past due			$	72,912					$	42,165					$	39,476					$	68,719					$	46,402
Net charge-offs as a % of average loans (annualized)			0.50		%				0.25		%				0.28		%				0.10		%				0.22		%
NPLs as a % of total loans			0.76						0.80						0.84						0.97						0.73
NPAs as a % of total assets			0.58						0.58						0.60						0.69						0.53
ACL as a % of NPLs			195.2						191.7						181.7						150.8						177.4
ACL as a % of total loans			1.49						1.53						1.52						1.46						1.30
Special mention loans			$	461,458					$	494,452					$	388,535					$	351,692					$	343,200
Substandard loans			528,760						590,109						611,805						621,901						524,316
Doubtful loans			304						295						4,600						4,353						4,206
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 December 31, 2021																														CECL ACL
			Total loans						Crit/Class						30-89 Days Delinquent						NPLs						NCOs						ACL $						% of Portfolio
Traditional C&I			$	3,560,460					$	110,260					$	3,494					$	37,320					$	(595)					$	62,701					1.76		%
Asset Based Lending			689,636						31,171						—						3,788						(162)						10,594						1.54
Payroll Finance			181,852						535						—						—						3						1,898						1.04
Mortgage Warehouse			1,052,378						—						—						—						—						929						0.09
Factored Receivables			222,246						—						—						—						69						3,071						1.38
Equipment Finance			1,139,283						64,756						21,375						19,666						840						23,658						2.08
Public Sector Finance			1,990,232						13,710						—						—						—						6,594						0.33
Commercial Real Estate			6,025,735						460,070						—						54,577						(6,992)						120,085						1.99
Multi-family			4,287,764						129,560						13,958						327						(1,529)						22,717						0.53
ADC			704,670						42,580						—						22,500						—						10,314						1.46
Total commercial loans			19,854,256						852,642						38,827						138,178						(8,366)						262,561						1.32
Residential			1,357,622						8,802						5,023						8,507						(3,352)						12,218						0.90
Consumer			145,078						10,278						2,552						10,193						35						3,453						2.38
Total portfolio loans			$	21,356,956					$	871,722					$	46,402					$	156,878					$	(11,683)					$	278,232					1.30

			At or for the three months ended September 30, 2021																														CECL ACL
			Total loans						Crit/Class						30-89 Days Delinquent						NPLs						NCOs						ACL $						% 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 Finance			166,999						—						—						—						(5)						1,691						1.01
Mortgage Warehouse			1,301,639						—						—						—						—						1,150						0.09
Factored Receivables			228,834						—						—						—						108						3,145						1.37
Equipment Finance			1,254,846						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-family			4,296,829						171,820						10,072						327						(418)						29,379						0.68
ADC			694,443						61,768						—						22,500						(2,500)						10,380						1.49
Total commercial loans			19,727,109						951,947						63,261						179,927						(4,911)						295,891						1.50
Residential			1,395,248						17,358						4,015						16,976						(12)						10,874						0.78
Consumer			154,192						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

16

---

Sterling Bancorp and Subsidiaries

Non-GAAP Financial Measures

(unaudited, in thousands, except share and per share data)

			For the Quarter Ended
			September 30, 2021																		December 31, 2021
			Average balance						Interest						Yield/Rate						Average balance						Interest						Yield/Rate
			(Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans			$	8,260,805					$	76,340					3.67		%				$	8,475,376					$	77,090					3.61		%
Commercial real estate (includes multi-family)			10,121,953						100,038						3.92						10,178,840						101,940						3.97
ADC			711,020						7,798						4.35						718,423						7,850						4.34
Commercial loans			19,093,778						184,176						3.83						19,372,639						186,880						3.83
Consumer loans			160,962						1,752						4.32						150,976						1,427						3.75
Residential mortgage loans			1,374,398						11,229						3.27						1,388,937						12,156						3.50
Total gross loans 1			20,629,138						197,157						3.79						20,912,552						200,463						3.80
Securities taxable			2,393,325						15,433						2.56						2,449,849						15,547						2.52
Securities non-taxable			1,926,918						14,692						3.05						1,913,297						14,601						3.05
Interest earning deposits			604,396						216						0.14						911,674						355						0.15
FHLB and Federal Reserve Bank Stock			151,230						676						1.77						151,425						772						2.02
Total securities and other earning assets			5,075,869						31,017						2.42						5,426,245						31,275						2.29
Total interest earning assets			25,705,007						228,174						3.52						26,338,797						231,738						3.49
Non-interest earning assets			3,442,325																		3,389,639
Total assets			$	29,147,332																	$	29,728,436
Interest bearing liabilities:
Demand and savings 2 deposits			$	7,407,456					$	1,794					0.10		%				$	7,561,576					$	1,830					0.10		%
Money market deposits			8,369,994						3,222						0.15						8,362,021						3,341						0.16
Certificates of deposit			1,372,012						1,145						0.33						1,276,876						1,036						0.32
Total interest bearing deposits			17,149,462						6,161						0.14						17,200,473						6,207						0.14
Other borrowings			30,057						7						0.09						56,969						29						0.20
Subordinated notes - Company			492,275						5,084						4.13						492,439						5,082						4.13
Total borrowings			522,332						5,091						3.87						549,408						5,111						3.69
Total interest bearing liabilities			17,671,794						11,252						0.25						17,749,881						11,318						0.25
Non-interest bearing deposits			6,001,982																		6,380,827
Other non-interest bearing liabilities			704,844																		762,019
Total liabilities			24,378,620																		24,892,727
Stockholders’ equity			4,768,712																		4,835,709
Total liabilities and stockholders’ equity			$	29,147,332																	$	29,728,436
Net interest rate spread 3															3.27		%																3.24		%
Net interest earning assets 4			$	8,033,213																	$	8,588,916
Net interest margin - tax equivalent									216,922						3.35		%										220,420						3.32		%
Less tax equivalent adjustment									(3,085)																		(3,066)
Net interest income									213,837																		217,354
Accretion income on acquired loans									6,197																		5,769
Tax equivalent net interest margin excluding accretion income on acquired loans									$	210,725					3.25		%										$	214,651					3.23		%
Ratio of interest earning assets to interest bearing liabilities			145.5		%																148.4		%

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
			December 31, 2020																		December 31, 2021
			Average balance						Interest						Yield/Rate						Average balance						Interest						Yield/Rate
			(Dollars in thousands)
Interest earning assets:
Traditional C&I and commercial finance loans			$	9,114,999					$	83,429					3.64		%				$	8,475,376					$	77,090					3.61		%
Commercial real estate (includes multi-family)			10,191,707						105,193						4.11						10,178,840						101,940						3.97
ADC			685,368						6,500						3.77						718,423						7,850						4.34
Commercial loans			19,992,074						195,122						3.88						19,372,639						186,880						3.83
Consumer loans			195,870						2,028						4.12						150,976						1,427						3.75
Residential mortgage loans			1,691,567						17,372						4.11						1,388,937						12,156						3.50
Total gross loans 1			21,879,511						214,522						3.90						20,912,552						200,463						3.80
Securities taxable			2,191,333						15,679						2.85						2,449,849						15,547						2.52
Securities non-taxable			1,964,451						14,985						3.05						1,913,297						14,601						3.05
Interest earning deposits			331,587						105						0.13						911,674						355						0.15
FHLB and Federal Reserve Bank stock			156,109						465						1.18						151,425						772						2.02
Total securities and other earning assets			4,643,480						31,234						2.68						5,426,245						31,275						2.29
Total interest earning assets			26,522,991						245,756						3.69						26,338,797						231,738						3.49
Non-interest earning assets			3,501,174																		3,389,639
Total assets			$	30,024,165																	$	29,728,436
Interest bearing liabilities:
Demand and savings 2 deposits			$	7,582,585					$	3,230					0.17		%				$	7,561,576					$	1,830					0.10		%
Money market deposits			8,577,920						6,065						0.28						8,362,021						3,341						0.16
Certificates of deposit			2,158,348						4,122						0.76						1,276,876						1,036						0.32
Total interest bearing deposits			18,318,853						13,417						0.29						17,200,473						6,207						0.14
Other borrowings			261,787						518						0.79						56,969						29						0.20
Subordinated notes - Bank			168,222						2,293						5.45						—						—						—
Subordinated notes - Company			422,048						4,356						4.13						492,439						5,082						4.13
Total borrowings			852,057						7,167						3.35						549,408						5,111						3.69
Total interest bearing liabilities			19,170,910						20,584						0.43						17,749,881						11,318						0.25
Non-interest bearing deposits			5,530,334																		6,380,827
Other non-interest bearing liabilities			731,151																		762,019
Total liabilities			25,432,395																		24,892,727
Stockholders’ equity			4,591,770																		4,835,709
Total liabilities and stockholders’ equity			$	30,024,165																	$	29,728,436
Net interest rate spread 3															3.26		%																3.24		%
Net interest earning assets 4			$	7,352,081																	$	8,588,916
Net interest margin - tax equivalent									225,172						3.38		%										220,420						3.32		%
Less tax equivalent adjustment									(3,146)																		(3,066)
Net interest income									222,026																		217,354
Accretion income on acquired loans									8,560																		5,769
Tax equivalent net interest margin excluding accretion income on acquired loans									$	216,612					3.25		%										$	214,651					3.23		%
Ratio of interest earning assets to interest bearing liabilities			138.4		%																148.4		%

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
			December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021
The following table shows the reconciliation of pretax pre-provision net revenue to adjusted pretax pre-provision net revenue1:
Net interest income			$	222,026					$	217,914					$	218,527					$	213,837					$	217,354
Non-interest income			33,921						32,356						30,214						32,547						40,918
Total net revenue			255,947						250,270						248,741						246,384						258,272
Non-interest expense			133,473						118,165						120,629						124,968						132,089
PPNR			122,474						132,105						128,112						121,416						126,183
Adjustments:
Accretion income			(8,560)						(8,272)						(7,812)						(6,197)						(5,769)
Net loss (gain) on sale of securities			111						(719)						—						(1,656)						—
Litigation accrual			—						—						—						2,000						—
Loss on sale of mortgage servicing rights			—						—						—						324						—
Loss on extinguishment of debt			2,749						—						1,243						—						—
Impairment related to financial centers and real estate consolidation strategy			13,311						633						475						118						2,571
Merger related expense			—						—						2,481						4,581						7,688
Amortization of non-compete agreements and acquired customer list intangible assets			172						148						148						148						148
Adjusted PPNR			$	130,257					$	123,895					$	124,647					$	120,734					$	130,821

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
			December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021
The following table shows the reconciliation of stockholders’ equity to tangible common equity and the tangible common equity ratio2:
Total assets			$	29,820,138					$	29,914,282					$	29,143,918					$	30,028,425					$	29,659,471
Goodwill and other intangibles			(1,777,046)						(1,773,270)						(1,769,494)						(1,765,718)						(1,761,942)
Tangible assets			28,043,092						28,141,012						27,374,424						28,262,707						27,897,529
Stockholders’ equity			4,590,514						4,620,164						4,722,856						4,797,629						4,880,149
Preferred stock			(136,689)						(136,458)						(136,224)						(135,986)						(135,745)
Goodwill and other intangibles			(1,777,046)						(1,773,270)						(1,769,494)						(1,765,718)						(1,761,942)
Tangible common stockholders’ equity			2,676,779						2,710,436						2,817,138						2,895,925						2,982,462
Common stock outstanding at period end			192,923,371						192,567,901						192,715,433						192,681,503						192,435,253
Common stockholders’ equity as a % of total assets			14.94		%				14.99		%				15.74		%				15.52		%				16.00		%
Book value per common share			$	23.09					$	23.28					$	23.80					$	24.19					$	24.65
Tangible common equity as a % of tangible assets			9.55		%				9.63		%				10.29		%				10.25		%				10.69		%
Tangible book value per common share			$	13.87					$	14.08					$	14.62					$	15.03					$	15.50
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			$	4,591,770					$	4,616,660					$	4,670,718					$	4,768,712					$	4,835,709
Average preferred stock			(136,914)						(136,687)						(136,455)						(136,221)						(135,983)
Average goodwill and other intangibles			(1,779,801)						(1,775,746)						(1,771,971)						(1,768,209)						(1,764,419)
Average tangible common stockholders’ equity			2,675,055						2,704,227						2,762,292						2,864,282						2,935,307
Net income available to common			74,457						97,187						96,380						93,715						109,625
Net income, if annualized			296,209						394,147						386,579						371,804						434,925
Reported return on avg tangible common equity			11.07		%				14.58		%				13.99		%				12.98		%				14.82		%
Adjusted net income (see reconciliation on page 21)			$	94,323					$	97,603					$	100,444					$	99,589					$	121,912
Annualized adjusted net income			375,242						395,834						402,880						395,109						483,673
Adjusted return on average tangible common equity			14.03		%				14.64		%				14.58		%				13.79		%				16.48		%
The following table shows the reconciliation of reported return on average tangible assets and adjusted return on average tangible assets4:
Average assets			$	30,024,165					$	29,582,605					$	29,390,977					$	29,147,332					$	29,728,436
Average goodwill and other intangibles			(1,779,801)						(1,775,746)						(1,771,971)						(1,768,209)						(1,764,419)
Average tangible assets			28,244,364						27,806,859						27,619,006						27,379,123						27,964,017
Net income available to common			74,457						97,187						96,380						93,715						109,625
Net income, if annualized			296,209						394,147						386,579						371,804						434,925
Reported return on average tangible assets			1.05		%				1.42		%				1.40		%				1.36		%				1.56		%
Adjusted net income (see reconciliation on page 21)			$	94,323					$	97,603					$	100,444					$	99,589					$	121,912
Annualized adjusted net income			375,242						395,834						402,880						395,109						483,673
Adjusted return on average tangible assets			1.33		%				1.42		%				1.46		%				1.44		%				1.73		%

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
			December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio5:
Net interest income			$	222,026					$	217,914					$	218,527					$	213,837					$	217,354
Non-interest income			33,921						32,356						30,214						32,547						40,918
Total revenue			255,947						250,270						248,741						246,384						258,272
Tax equivalent adjustment on securities			3,146						3,120						3,115						3,085						3,066
Net loss (gain) on sale of securities			111						(719)						—						(1,656)						—
Depreciation of operating leases			(3,130)						(3,124)						(2,917)						(2,846)						(2,771)
Adjusted total revenue			256,074						249,547						248,939						244,967						258,567
Non-interest expense			133,473						118,165						120,629						124,968						132,089
Merger related expense			—						—						(2,481)						(4,581)						(7,688)
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)						(2,571)
Loss on extinguishment of borrowings			(2,749)						—						(1,243)						—						—
Depreciation of operating leases			(3,130)						(3,124)						(2,917)						(2,846)						(2,771)
Amortization of intangible assets			(4,200)						(3,776)						(3,776)						(3,776)						(3,776)
Adjusted non-interest expense			110,083						110,632						109,737						111,323						115,283
Reported operating efficiency ratio			52.1		%				47.2		%				48.5		%				50.7		%				51.1		%
Adjusted operating efficiency ratio			43.0						44.3						44.1						45.4						44.6
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			$	94,974					$	122,105					$	122,862					$	121,416					$	146,582
Income tax expense			18,551						22,955						24,523						25,745						35,005
Net income (GAAP)			76,423						99,150						98,339						95,671						111,577
Adjustments:
Net loss (gain) on sale of securities			111						(719)						—						(1,656)						—
Loss on extinguishment of debt			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						2,571
Merger related expenses			—						—						2,481						4,581						7,688
Amortization of non-compete agreements and acquired customer list intangible assets			172						148						148						148						148
Total pre-tax adjustments			16,343						62						4,347						5,515						10,407
Adjusted pre-tax income			111,317						122,167						127,209						126,931						156,989
Adjusted income tax expense			15,028						22,601						24,806						25,386						33,125
Adjusted net income (non-GAAP)			96,289						99,566						102,403						101,545						123,864
Preferred stock dividend			1,966						1,963						1,959						1,956						1,952
Adjusted net income available to common stockholders (non-GAAP)			$	94,323					$	97,603					$	100,444					$	99,589					$	121,912
Weighted average diluted shares			193,530,930						192,621,907						192,292,989						192,340,487						191,942,078
Reported diluted EPS (GAAP)			$	0.38					$	0.50					$	0.50					$	0.49					$	0.57
Adjusted diluted EPS (non-GAAP)			0.49						0.51						0.52						0.52						0.64

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 Year Ended December 31,
			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			$	255,668					$	512,965
Income tax expense			29,899						108,228
Net income (GAAP)			225,769						404,737
Adjustments:
Net (gain) on sale of securities			(9,428)						(2,361)
Loss on extinguishment of borrowings			19,462						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						3,797
Merger-related expense			—						14,750
Amortization of non-compete agreements and acquired customer list intangible assets			686						592
Total pre-tax adjustments			24,031						20,345
Adjusted pre-tax income			279,699						533,310
Adjusted income tax expense			37,759						106,662
Adjusted net income (non-GAAP)			$	241,940					$	426,648
Preferred stock dividend			7,883						7,830
Adjusted net income available to common stockholders (non-GAAP)			$	234,057					$	418,818
Weighted average diluted shares			194,393,343						191,955,440
Diluted EPS as reported (GAAP)			$	1.12					$	2.07
Adjusted diluted EPS (non-GAAP)			1.20						2.18

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 Year Ended December 31,
			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			$	4,523,468					$	4,723,675
Average preferred stock			(137,247)						(136,334)
Average goodwill and other intangibles			(1,786,081)						(1,770,050)
Average tangible common stockholders’ equity			2,600,140						2,817,291
Net income available to common stockholders			$	217,886					$	396,907
Reported return on average tangible common equity			8.38		%				14.09		%
Adjusted net income available to common stockholders (see reconciliation on page 22)			$	234,057					$	418,818
Adjusted return on average tangible common equity			9.00		%				14.87		%
The following table shows the reconciliation of reported return on avg tangible assets and adjusted return on avg tangible assets4:
Average assets			$	30,472,854					$	29,461,874
Average goodwill and other intangibles			(1,786,081)						(1,770,050)
Average tangible assets			28,686,773						27,691,824
Net income available to common stockholders			217,886						396,907
Reported return on average tangible assets			0.76		%				1.43		%
Adjusted net income available to common stockholders (see reconciliation on page 22)			$	234,057					$	418,818
Adjusted return on average tangible assets			0.82		%				1.51		%
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio5:
Net interest income			$	864,921					$	867,632
Non-interest income			135,562						136,035
Total revenues			1,000,483						1,003,667
Tax equivalent adjustment on securities			13,271						12,387
Net (gain) on sale of securities			(9,428)						(2,361)
Depreciation of operating leases			(12,888)						(11,660)
Adjusted total net revenue			991,438						1,002,033
Non-interest expense			492,429						495,851
Merger-related expense			—						(14,750)
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)						(3,797)
Loss on extinguishment of borrowings			(19,462)						(1,243)
Depreciation of operating leases			(12,888)						(11,660)
Amortization of intangible assets			(16,800)						(15,104)
Adjusted non-interest expense			$	429,968					$	446,973
Reported operating efficiency ratio			49.2		%				49.4		%
Adjusted operating efficiency ratio			43.4		%				44.6		%

23

---

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.

24