Sterling Bancorp Reports 15% Increase in EPS and Strong Asset Quality for 2007 Fourth Quarter

NEW YORK, Jan. 28 /PRNewswire-FirstCall/ -- Sterling Bancorp , a financial holding company and the parent company of Sterling National Bank, today reported its financial results for the fourth quarter and full year ended December 31, 2007.

Highlights: * Net income rose to $4.2 million or $0.23 per diluted share for the 2007 fourth quarter, from $3.9 million or $0.20 per diluted share for the same period of 2006, an increase of 15% in EPS. * Full year net income rose to $14.6 million or $0.79 per diluted share, from $10.8 million or $0.56 per diluted share for 2006. The year-ago results reflected, in part, the impact of the disposal of a business unit and a recapture of excess tax reserves. * Net interest income increased 2.7% to $19.2 million for the 2007 fourth quarter on a tax-equivalent basis. * Total deposits reached a year-end record, and averaged $1,500.4 million for 2007, up 7.9% from the prior year. * Loans held in portfolio, net of unearned discounts, averaged a record $1,069.5 million for the year ended December 31, 2007, up 6.7% from the prior year. * Asset quality, as reflected by a 0.40% ratio of nonperforming assets to total assets at December 31, 2007, was stronger than the peer group average. Page 1 of 16

"We are pleased with Sterling's increased earnings performance in the 2007 fourth quarter, particularly in view of the challenging economic conditions faced by many in our industry. Our strong performance reflects sequential growth in EPS from continuing operations throughout 2007: from $0.19 in the first quarter, to $0.20 in the second quarter; $0.21 in the third quarter; and $0.23 in the fourth quarter. Other key accomplishments for the year included higher operating earnings from our diverse mix of revenue sources, growth in loans and deposits, and sustained asset quality. At a time when prevailing economic forces have adversely impacted many financial institutions, it is gratifying to be able to deliver positive results for our shareholders," said Louis J. Cappelli, Chairman and Chief Executive Officer.

Mr. Cappelli added, "To mitigate our risk exposure, we have continually taken a disciplined approach to lending and deposit pricing, and focused on asset classes where we have deep expertise." He noted that the Company has minimal exposure to the sub-prime mortgage business, does not participate in collateralized debt obligations (CDOs) and other exotic structured instruments, and has limited portfolio exposure to consumer debt, home equity lending products, credit card receivables, auto loans or other asset classes that have been sources of higher risk in the current market environment. Sterling's mortgage unit has been focusing on FHA-insured loans and other high quality products, and has relied upon its product diversity and rigorous approach to credit, risk and expense management to minimize its exposure to the current mortgage industry downturn. Also, over 90% of the investment portfolio is comprised of obligations of U.S. government corporations and government sponsored enterprises.

"The source of Sterling's loan and deposit growth during 2007 was our longstanding emphasis on providing quality, personalized service to businesses and individuals in our marketplace. On January 22, 2008, the Federal Reserve lowered the Federal Funds rate by 75 basis points in response to global concerns about possible weakening economic conditions -- a move significant in its magnitude and unexpected timing. While it is too early to determine whether this will result in a sustained improvement in the financial markets, we continue to believe that the current environment will provide opportunities for a strong and service-oriented institution such as Sterling. We believe that we are well positioned to grow and serve our customers, as other lenders rein in their growth to preserve capital, and market forces temper irrational competition. We also continue to expect that our approach to managing risk and serving our market will drive our success going forward, and we believe that we have the strong capital position and liquidity to deliver on our commitments to customers and shareholders," Mr. Cappelli concluded.

Growth in Loans and Deposits

Loans held in portfolio, net of unearned discounts, averaged a record $1,069.5 million for the year ended December 31, 2007, an increase of 6.7% from the prior year. The growth in the loan portfolio was broad-based across many of the Company's lending businesses.

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Total deposits averaged $1,500.4 million for the year ended December 31, 2007, rising 7.9% from the prior year. Demand deposits at December 31, 2007 totaled $535.4 million, or 35% of total deposits, and again represented one of the highest ratios of demand to total deposits in the industry.

Fourth Quarter 2007 Financial Results

Net income for the 2007 fourth quarter was $4.2 million or $0.23 per diluted share, growing EPS 15% compared with $3.9 million or $0.20 per diluted share for the same period of 2006. The increased profitability primarily reflected higher interest income and the effect of discontinued operations on the year-ago period, which more than offset increases in interest expenses and a higher provision for taxes.

Net interest income for the fourth quarter of 2007, on a tax-equivalent basis, was $19.2 million, up from $18.7 million in the same period of 2006. The increase primarily reflected higher loan balances, higher investment securities balances at higher yields, and lower rates on interest-bearing deposits and borrowed funds. This increase was partially offset by a lower yield on loans, along with higher interest-bearing deposit and borrowed funds balances.

The net interest margin, on a tax-equivalent basis, was 4.32% for the 2007 fourth quarter versus 4.41% for the 2006 period. The net interest margin decrease reflected the impact of the lower interest rate environment in the 2007 period, as reductions of interest rates by the Federal Reserve during the period and more competitive pricing practices in the Company's markets have caused the yield on loans to decrease more rapidly than the cost of deposits.

Noninterest income for the fourth quarter of 2007 was $9.6 million, virtually unchanged from the year-ago period.

Noninterest expenses for the fourth quarter of 2007 were $20.5 million, compared to $20.6 million for the fourth quarter of 2006. Reflecting the Company's cost-control discipline, reductions in various categories of noninterest expenses more than offset higher salaries and employee benefit costs related to investments in the Sterling franchise.

The provision for income taxes at normalized tax rates was $2.6 million for the fourth quarter of 2007, compared to $2.2 million for the same period of 2006.

Full Year 2007 Financial Results

Net income for the year ended December 31, 2007 was $14.6 million or $0.79 per diluted share, compared with $10.8 million or $0.56 per diluted share for the full year 2006, an increase of 41.1% in EPS. The year-ago results reflected a $9.6 million loss, net of tax, on the sale in September 2006 of a business unit. Also included in the 2006 results was a reversal of tax reserves totaling $4.4 million.

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Net interest income for 2007, on a tax-equivalent basis, was $74.4 million, compared to $75.3 million for 2006. Net interest income benefited from higher average loan balances, a higher yield on investment securities and lower borrowings, which were more than offset by a reduction in the investment securities portfolio, lower yield on loans and higher balances and rates paid on interest-bearing deposits.

Net interest margin for 2007, on a tax-equivalent basis, was 4.49%, compared with 4.64% for 2006. The net interest margin was impacted by the higher rate environment during most of 2007 and by the interest-earning asset and funding mix. Additionally, the more competitive pricing practices in the Company's markets caused the cost of interest-bearing deposits to increase more rapidly than the yield on interest-earning assets.

Noninterest income for 2007 was $35.7 million, a 6.1% increase compared to $33.7 million for the prior year. This increase was primarily due to revenues generated by Sterling Resource Funding Corp., which was acquired in April 2006, and net gains on securities sales in 2007, compared to net losses on securities sales in the prior year period.

Noninterest expenses for 2007 were $79.8 million, compared to $77.4 million for 2006. The increase was primarily due to higher salaries and occupancy costs related to investments in the Sterling franchise, including two new branches and the acquisition of Sterling Resource Funding Corp. These increases were partially offset by expense reductions from a refocusing of the Company's mortgage banking activities. The 2006 period benefited from a recapture of $1.1 million of previously expensed professional fees.

The provision for income taxes at normalized tax rates for 2007 was $8.9 million, compared with $9.8 million for the prior year, primarily reflecting a lower level of pretax income. The normalized provision for 2006 excludes an aggregate $4.4 million reversal of reserves for state and local income taxes, net of federal tax effect. The reversal reflected management's review of required reserves with outside professionals in light of the resolution of certain past tax issues, and the closure of certain years for local tax purposes.

Asset Quality

The provision for loan losses was $1.4 million for the 2007 fourth quarter, compared to $1.3 million for the prior year period. For the full year 2007, the provision for loan losses was $5.9 million, compared to $4.5 million for 2006.

The allowance for loan losses as of December 31, 2007, was $15.1 million, or 1.27% of loans held in portfolio, compared to $16.3 million, or 1.46% of loans held in portfolio, a year earlier. As of December 31, 2007, nonperforming assets were $8.1 million, representing 0.40% of total assets from continuing operations, compared with $8.1 million or 0.43% of total assets from continuing operations a year ago.

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The adequacy of the provision and the resulting allowance for loan losses is determined based on management's continuing evaluation of the loan portfolio, including an assessment of current and expected future economic conditions, the changing mix of loans in the portfolio, and numerous other factors.

Capital Management and Dividends

As of December 31, 2007, the Company exceeded the requirements for a well-capitalized institution for regulatory purposes. Its Tier 1 risk- weighted capital ratio was 9.76% and its Tier 1 leverage ratio was 6.88% at that date.

Sterling paid a cash dividend of $0.19 per common share on December 31, 2007, to shareholders of record as of December 15, 2007. This extended the Company's record of dividend payments to 248 consecutive quarters, or 62 years.

The Company repurchased 862,000 shares of common stock during 2007. The Board of Directors and management concluded that it was prudent to maintain strong capital resources in response to the adverse conditions in the financial markets, and thus made no repurchases during the 2007 fourth quarter.

Conference Call

Sterling Bancorp will host a teleconference call for the financial community on January 29, 2008 at 10:00 a.m. Eastern Standard Time to discuss the 2007 financial results. The public is invited to listen to this conference call by dialing 800-762-4832 at least 10 minutes prior to the call.

A replay of the conference call will be available beginning at approximately 1:00 p.m. Eastern Standard Time on January 29, 2008 until 11:59 p.m. Eastern Standard Time on February 12, 2008. To access the replay by telephone, interested parties may dial 800-475-6701 and enter the access code 908182.

About Sterling Bancorp

Sterling Bancorp is a financial holding company with assets of more than $2.0 billion, offering a broad array of banking and financial services products. Its principal banking subsidiary is Sterling National Bank, founded in 1929. Sterling provides a wide range of products and services, including business and consumer loans, commercial and residential mortgage lending and brokerage, asset-based financing, factoring and accounts receivable management, trade financing, equipment leasing, corporate and consumer deposit services, trust and estate administration, and investment management services. The Company has operations in New York, New Jersey and North Carolina and conducts business throughout the U.S.

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Certain statements in this press release, including but not limited to, statements as to future liquidity, future interest rate risk and operating expenses, statements concerning future results of operations or financial position, and plans and objectives for future operations, statements concerning the Company's belief that the current environment in the financial markets will provide opportunities for the Company and that it is well positioned to grow and serve its customers, the Company's expectation that its approach to managing risk and serving its market will drive its success going forward, and the Company's belief that it has the strong capital position and liquidity to deliver on its commitments to customers and shareholders, and other statements regarding matters that are not historical facts, are "forward-looking statements" as defined in the Securities Exchange Act of 1934. These statements are not historical facts but instead are subject to numerous assumptions, risks and uncertainties, and represent only the Company's belief regarding future events, many of which, by their nature, are inherently uncertain and outside its control. Any forward-looking statements the Company may make speak only as of the date on which such statements are made. The Company's actual results and financial position may differ materially from the anticipated results and financial condition indicated in or implied by these forward-looking statements. For a discussion of some of the risks and important factors that could affect the Company's future results and financial condition, see "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Forward-Looking Statements and Factors that Could Affect Future Results" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

- tables to follow- Page 6 of 16 STERLING BANCORP Consolidated Financial Highlights (Unaudited) (dollars and shares in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 OPERATING HIGHLIGHTS (1) Interest income $31,177 $30,249 $121,452 $116,586 Interest expense 12,094 11,701 47,560 42,021 Provision for loan losses 1,400 1,250 5,853 4,503 Noninterest income 9,631 9,617 35,724 33,658 Noninterest expenses 20,475 20,572 79,809 77,355 Income from continuing operations, before income taxes 6,839 6,343 23,954 26,365 Provision for income taxes at normal effective rates 2,649 2,234 8,901 9,814 Income from continuing operations after normalized taxes 4,190 4,109 15,053 16,551 Reversal of tax reserves 0 0 341 4,447 Income from continuing operations 4,190 4,109 15,394 20,998 Loss from discontinued operations, net of income taxes 0 (223) (795) (10,238) Net income 4,190 3,886 14,599 10,760 Net income per average common share: Basic 0.24 0.20 0.80 0.57 Diluted 0.23 0.20 0.79 0.56 Income from continuing operations, after normalized taxes, per average common share: Basic 0.24 0.23 0.83 0.88 Diluted 0.23 0.23 0.81 0.86 Income from continuing operations per average common share: Basic 0.24 0.22 0.85 1.12 Diluted 0.23 0.21 0.83 1.09 Cash dividends declared 0.19 0.19 0.76 0.76 Common shares outstanding: Period end 17,819 18,605 17,819 18,605 Average Basic 17,808 18,685 18,210 18,735 Average Diluted 18,131 19,193 18,532 19,265 Return on average assets, after normalized taxes (2) 0.84% 0.86% 0.80% 0.89% Return on average assets (3) 0.84% 0.86% 0.81% 1.13% Return on average tangible equity, after normalized taxes (4) 17.17% 14.13% 14.87% 13.74% Return on average tangible equity (5) 17.17% 14.13% 15.20% 17.43% Return on average stated equity, after normalized taxes (6) 13.89% 11.80% 12.13% 11.56% Return on average stated equity (7) 13.89% 11.80% 12.40% 14.67% Net interest spread, tax-equivalent basis 3.43% 3.39% 3.50% 3.69% Net interest margin, tax-equivalent basis 4.32% 4.41% 4.49% 4.64% (1) Unless otherwise indicated, all amounts and ratios are presented based on continuing operations. (2) Calculated by dividing income from continuing operations, after normalized taxes, by average assets from continuing operations. (3) Calculated by dividing income from continuing operations by average assets from continuing operations. (4) Average tangible equity represents average shareholders' equity less average goodwill. Calculated by dividing income from continuing operations, after normalized taxes, by average tangible equity. (5) Average tangible equity represents average shareholders' equity less average goodwill. Calculated by dividing income from continuing operations by average tangible equity. (6) Average stated equity is equal to average shareholders' equity. Calculated by dividing income from continuing operations, after normalized taxes, by average stated equity. (7) Average stated equity is equal to average shareholders' equity. Calculated by dividing income from continuing operations by average stated equity. Page 7 of 16 STERLING BANCORP Consolidated Financial Highlights (Unaudited) (dollars in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 BALANCE SHEET HIGHLIGHTS Period End Balances (1) Investment securities $625,241 $569,324 $625,241 $569,324 Loans held for sale 23,756 33,320 23,756 33,320 Loans held in portfolio, net of unearned discount 1,187,124 1,112,602 1,187,124 1,112,602 Total earning assets 1,837,101 1,736,507 1,837,101 1,736,507 Allowance for loan losses 15,085 16,288 15,085 16,288 Total assets from continuing operations 2,012,649 1,884,294 2,012,649 1,884,294 Total assets 2,012,649 1,885,957 2,012,649 1,885,957 Demand deposits 535,351 546,443 535,351 546,443 Savings, NOW and money market deposits 467,446 447,601 467,446 447,601 Time deposits 524,189 527,986 524,189 527,986 Customer repurchase agreements 60,054 52,803 60,054 52,803 Other short-term borrowings 145,364 30,974 145,364 30,974 Long-term borrowings 65,774 45,774 65,774 45,774 Shareholders' equity (2) 121,070 132,263 121,070 132,263 Average Balances (1) Investment securities $635,689 $592,262 $586,463 $647,602 Loans held for sale 32,751 38,340 43,919 40,992 Loans held in portfolio, net of unearned discount 1,128,293 1,078,947 1,069,453 1,002,688 Total earning assets 1,801,205 1,721,618 1,726,087 1,697,947 Total assets from continuing operations 1,968,779 1,896,043 1,892,751 1,859,330 Total assets 1,968,779 1,901,126 1,892,751 1,944,776 Demand deposits 444,233 448,147 444,672 439,064 Savings, NOW and money market deposits 513,249 447,387 498,827 434,167 Time deposits 548,180 536,175 556,869 517,166 Customer repurchase agreements 83,325 94,305 80,649 86,418 Other short-term borrowings 102,287 81,971 50,924 168,786 Long-term borrowings 57,513 45,774 44,130 59,938 Shareholders' equity (2) 119,718 138,201 124,140 143,178 ASSET QUALITY HIGHLIGHTS (1) Period End Net charge-offs $1,178 $1,487 $5,784 $4,774 Nonperforming loans 6,383 5,861 6,383 5,861 Other real estate owned 1,670 2,243 1,670 2,243 Nonperforming assets 8,053 8,104 8,053 8,104 Nonperforming loans/loans(3) 0.53% 0.51% 0.53% 0.51% Nonperforming assets/assets 0.40% 0.43% 0.40% 0.43% Allowance for loan losses/loans (4) 1.27% 1.46% 1.27% 1.46% Allowance for loan losses/ nonperforming loans 236.33% 277.90% 236.33% 277.90% Capital Ratios (2) Tier 1 risk based 9.76% 11.44% 9.76% 11.44% Total risk based 10.87% 12.69% 10.87% 12.69% Leverage 6.88% 7.79% 6.88% 7.79% Book value per common share (2) $6.79 $7.11 $6.79 $7.11 (1) Unless otherwise indicated, all amounts and ratios are presented based on continuing operations. (2) Includes the effects of discontinued operations. (3) The term "loans" includes loans held for sale and loans held in portfolio. (4) The term "loans" includes loans held in portfolio only. Page 8 of 16 STERLING BANCORP Consolidated Balance Sheets (Unaudited) (in thousands, except number of shares) December 31, 2007 2006 ASSETS Cash and due from banks $66,413 $50,058 Interest-bearing deposits with other banks 980 1,261 Federal Funds Sold 0 20,000 Investment securities Available for sale (at estimated market value) 263,380 148,421 Held to maturity (at amortized cost) 361,861 420,903 Total investment securities 625,241 569,324 Loans held for sale 23,756 33,320 Loans held in portfolio, net of unearned discounts 1,187,124 1,112,602 Less allowance for loan losses 15,085 16,288 Loans, net 1,172,039 1,096,314 Customers' liability under acceptances 201 98 Goodwill 22,901 22,862 Premises and equipment, net 11,179 11,324 Other real estate 1,670 2,243 Accrued interest receivable 7,081 5,845 Bank owned life insurance 29,041 27,949 Other assets 52,147 43,696 Total assets from continuing operations 2,012,649 1,884,294 Assets - discontinued operations 0 1,663 $2,012,649 $1,885,957 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Demand $535,351 $546,443 Savings, NOW and money market 467,446 447,601 Time 524,189 527,986 Total deposits 1,526,986 1,522,030 Securities sold under agreements to repurchase - customers 60,054 52,803 Securities sold under agreements to repurchase - dealers 10,200 0 Federal funds purchased 65,000 0 Commercial paper 20,879 27,562 Short-term borrowings - FHLB 45,000 0 Short-term borrowings - other 4,285 3,412 Long-term borrowings - FHLB 40,000 20,000 Long-term borrowings - subordinated debentures 25,774 25,774 Acceptances outstanding 201 98 Accrued expenses and other liabilities 93,200 101,679 Liabilities - discontinued operations 0 336 Total liabilities 1,891,579 1,753,694 Shareholders' equity 121,070 132,263 $2,012,649 $1,885,957 MEMORANDA Available for sale securities - amortized cost $265,935 $152,195 Held to maturity securities - estimated market value 359,725 411,651 Shares outstanding Common issued 21,278,531 21,177,084 Common in treasury 3,459,302 2,572,368 Page 9 of 16 STERLING BANCORP Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 INTEREST INCOME Loans $23,259 $23,313 $92,255 $86,882 Investment securities - available for sale 3,480 1,828 9,139 7,909 Investment securities - held to maturity 4,406 4,970 18,705 21,496 Federal funds sold 6 108 1,236 196 Deposits with other banks 26 30 117 103 Total interest income 31,177 30,249 121,452 116,586 INTEREST EXPENSE Savings, NOW and money market deposits 3,115 2,722 13,083 8,584 Time deposits 6,093 6,081 25,680 20,427 Securities sold u/a/r - customers 811 1,065 3,392 3,501 Securities sold u/a/r - dealers 309 297 309 3,739 Federal funds purchased 323 78 430 769 Commercial paper 277 467 1,350 2,020 Short-term borrowings - FHLB 283 235 336 1,796 Short-term borrowings - other 18 7 66 30 Long-term borrowings - FHLB 341 225 820 1,569 Long-term subordinated debentures 524 524 2,094 2,094 Total interest expense 12,094 11,701 47,560 44,529 Interest expense allocated to discontinued operations 0 0 0 (2,508) Total interest expense- continuing operations 12,094 11,701 47,560 42,021 Net interest income 19,083 18,548 73,892 74,565 Provision for loan losses 1,400 1,250 5,853 4,503 Net interest income after provision for loan losses 17,683 17,298 68,039 70,062 NONINTEREST INCOME Accounts receivable management/ factoring commissions and other fees 3,999 4,059 15,536 13,282 Service charges on deposit accounts 1,274 1,367 5,588 5,404 Other customer related service charges and fees 780 1,049 3,044 3,661 Mortgage banking income 2,630 2,581 8,893 9,696 Trust fees 153 154 551 591 Bank owned life insurance income 274 272 1,092 985 Securities gains/(losses) 191 2 188 (443) Other income 330 133 832 482 Total noninterest income 9,631 9,617 35,724 33,658 NONINTEREST EXPENSES Salaries 10,738 10,127 36,797 35,700 Employee benefits 1,667 1,358 9,506 9,424 Total personnel expense 12,405 11,485 46,303 45,124 Occupancy and equipment expenses, net 2,401 2,567 10,354 9,899 Advertising and marketing 923 1,075 3,897 3,855 Professional fees 1,832 2,318 6,666 6,454 Communications 486 491 1,941 1,823 Other expenses 2,428 2,636 10,648 10,200 Total noninterest expenses 20,475 20,572 79,809 77,355 Income from continuing operations before income taxes 6,839 6,343 23,954 26,365 Provision for income taxes at normal effective rates 2,649 2,234 8,901 9,814 Income from continuing operations after normalized taxes 4,190 4,109 15,053 16,551 Reversal of tax reserves 0 0 341 4,447 Income from continuing operations 4,190 4,109 15,394 20,998 Discontinued operations: Income/(Loss), net of taxes 0 (192) (795) (603) Loss on sale, net of taxes 0 (31) 0 (9,635) Net income $4,190 $3,886 $14,599 $10,760 Page 10 of 16 STERLING BANCORP Consolidated Statements of Income (Unaudited) (dollars in thousands, except per share data) (continued) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 Average number of common shares outstanding Basic 17,807,998 18,685,233 18,209,740 18,734,610 Diluted 18,131,146 19,192,559 18,531,546 19,265,093 Income from continuing operations, per average common share Basic $0.24 $0.22 $0.85 $1.12 Diluted 0.23 0.21 0.83 1.09 Income from continuing operations, after normalized taxes, per average common share Basic 0.24 0.23 0.83 0.88 Diluted 0.23 0.23 0.81 0.86 Net income per average common share Basic 0.24 0.20 0.80 0.57 Diluted 0.23 0.20 0.79 0.56 Dividends per common share 0.19 0.19 0.76 0.76 Page 11 of 16 STERLING BANCORP Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) (in thousands) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 Net income $4,190 $3,886 $14,599 $10,760 Other comprehensive income/(loss), net of tax: Unrealized holding gains/(losses) arising during the period 369 284 623 (56) Reclassification adjustment for gains/(losses) included in net income 106 (1) 106 243 Amortization of: Prior service cost 12 0 55 0 Net actuarial losses 235 0 843 0 Pension liability adjustment (596) (5,459) (596) (5,467) Comprehensive income/(loss) $4,316 $(1,290) $15,630 $5,480 STERLING BANCORP Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (in thousands) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 Balance, at beginning of period $119,935 $140,425 $132,263 $146,998 Net income for period 4,190 3,886 14,599 10,760 Common shares issued under stock incentive plan and related tax benefits 202 22 1,010 1,757 Purchase of common shares for treasury 0 (2,021) (13,622) (5,831) Cash dividends-Common shares (3,383) (3,540) (13,755) (14,216) Surrender of shares issued under incentive compensation plan 0 0 (456) (614) Amortization of unearned compensation 0 0 0 22 Change in net unrealized holding gains/(losses) on available for sale securities 369 284 623 (56) Reclassification adjustment for gains/(losses) included in net income 106 (1) 106 243 Initial application of FAS 158 0 (1,333) 0 (1,333) Amortization of: Prior service cost 12 0 55 0 Net actuarial losses 235 0 843 0 Pension liability adjustment (596) (5,459) (596) (5,467) Balance, at end of period $121,070 $132,263 $121,070 $132,263 Page 12 of 16 STERLING BANCORP Average Balance Sheets [1] (Unaudited) (dollars in thousands) Three Months Ended December 31, 2007 December 31, 2006 AVERAGE AVERAGE AVERAGE AVERAGE BALANCE INTEREST RATE BALANCE INTEREST RATE Assets Interest-bearing deposits with other banks $3,929 $26 2.62% $3,319 $30 3.58% Investment securities - available for sale 243,313 3,298 5.42 133,622 1,610 4.82 Investment securities - held to maturity 372,972 4,406 4.73 436,056 4,970 4.56 Investment securities - tax exempt [2] 19,404 299 6.13 22,584 359 6.31 Total investment securities 635,689 8,003 5.03 592,262 6,939 4.68 Federal funds sold 543 6 4.40 8,750 108 4.83 Loans, net of unearned discount[3] 1,161,044 23,259 8.34 1,117,287 23,313 8.75 Total Interest- Earning Assets [2] 1,801,205 31,294 7.11% 1,721,618 30,390 7.25% Cash and due from banks 62,573 76,505 Allowance for loan losses (15,604) (17,193) Goodwill 22,901 22,843 Other 97,704 92,270 Assets - discontinued operations 0 5,083 Total Assets $1,968,779 $1,901,126 Liabilities and Shareholders' Equity Interest-bearing deposits Domestic Savings $17,761 23 0.51% $20,363 25 0.49% NOW 241,178 1,414 2.33 220,863 1,265 2.27 Money market 254,310 1,678 2.62 206,161 1,432 2.76 Time 547,605 6,092 4.41 534,389 6,076 4.51 Foreign Time 575 1 1.09 1,786 5 1.02 Total Interest- Bearing Deposits 1,061,429 9,208 3.44 983,562 8,803 3.55 Borrowings Securities sold u/a/r - customers 83,325 811 3.86 94,305 1,065 4.48 Securities sold u/a/r - dealers 25,670 309 4.78 21,897 297 5.39 Federal funds purchased 28,152 323 4.49 5,761 78 5.26 Commercial paper 22,758 277 4.82 36,568 467 5.06 Short-term borrowings - FHLB 23,913 283 4.69 17,174 235 5.44 Short-term borrowings - other 1,794 18 4.13 571 7 5.06 Long-term borrowings - FHLB 31,739 341 4.31 20,000 225 4.49 Long-term borrowings - sub debt 25,774 524 8.38 25,774 524 8.38 Total Borrowings 243,125 2,886 4.73 222,050 2,898 5.20 Interest-bearing liabilities allocated to discontinued operations 0 0 0.00 0 0 0.00 Total Interest- Bearing Liabilities 1,304,554 12,094 3.68% 1,205,612 11,701 3.86% Noninterest-bearing demand deposits 444,233 448,147 Other liabilities 100,274 107,626 Liabilities - discontinued operations 0 1,540 Total Liabilities 1,849,061 1,762,925 Shareholders' equity 119,718 138,201 Total Liabilities and Shareholders' Equity $1,968,779 $1,901,126 Net interest income/spread [2] 19,200 3.43% 18,689 3.39% Net yield on interest- earning assets 4.32% 4.41% Less: Tax-equivalent adjustment 117 141 Net interest income $19,083 $18,548 [1] The average balances of assets, liabilities and shareholders' equity are computed on the basis of daily averages. Average rates are presented on a tax-equivalent basis. Certain reclassifications have been made to prior period amounts to conform to current presentation. [2] Interest and/or average rates are presented on a tax-equivalent basis. [3] Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding and income has been included to the extent earned. Page 13 of 16 STERLING BANCORP Average Balance Sheets[1] (Unaudited) (dollars in thousands) Twelve Months Ended December 31, 2007 December 31, 2006 AVERAGE AVERAGE AVERAGE AVERAGE BALANCE INTEREST RATE BALANCE INTEREST RATE Assets Interest-bearing deposits with other banks $3,033 $117 3.86% $2,624 $103 4.48% Investment securities - available for sale 165,289 8,379 5.07 146,820 6,840 4.66 Investment securities - held to maturity 401,212 18,705 4.66 473,608 21,496 4.54 Investment securities - tax exempt[2] 19,962 1,250 6.26 27,174 1,760 6.47 Total investment securities 586,463 28,334 4.83 647,602 30,096 4.65 Federal funds sold 23,219 1,236 5.32 4,041 196 4.84 Loans, net of unearned discount [3] 1,113,372 92,255 8.83 1,043,680 86,882 8.97 Total Interest- Earning Assets [2] 1,726,087 121,942 7.36% 1,697,947 117,277 7.23% Cash and due from banks 66,384 64,598 Allowance for loan losses (16,233) (16,741) Goodwill 22,885 22,714 Other 93,628 90,812 Assets - discontinued operations 0 85,446 Total Assets $1,892,751 $1,944,776 Liabilities and Shareholders' Equity Interest-bearing deposits Domestic Savings $19,618 101 0.51% $23,050 101 0.44% NOW 237,731 5,903 2.48 197,587 3,787 1.92 Money market 241,478 7,079 2.93 213,530 4,696 2.20 Time 556,295 25,674 4.62 514,452 20,399 3.97 Foreign Time 574 6 1.09 2,714 28 1.03 Total Interest- Bearing Deposits 1,055,696 38,763 3.67 951,333 29,011 3.05 Borrowings Securities sold u/a/r - customers 80,649 3,392 4.21 86,418 3,501 4.05 Securities sold u/a/r - dealers 6,470 309 4.78 74,057 3,739 5.05 Federal funds purchased 9,281 430 4.63 15,133 769 5.08 Commercial paper 26,731 1,350 5.05 44,539 2,020 4.53 Short-term borrowings - FHLB 7,082 336 4.74 34,444 1,796 5.21 Short-term borrowings - other 1,360 66 4.87 613 30 4.96 Long-term borrowings - FHLB 18,356 820 4.47 34,164 1,569 4.59 Long-term borrowings - sub debt 25,774 2,094 8.38 25,774 2,094 8.38 Total Borrowings 175,703 8,797 5.03 315,142 15,518 4.94 Interest-bearing liabilities allocated to discontinued operations 0 0 0.00 (78,054) (2,508) 3.17 Total Interest- Bearing Liabilities 1,231,399 47,560 3.86% 1,188,421 42,021 3.54% Noninterest-bearing demand deposits 444,672 439,064 Other liabilities 92,540 95,302 Liabilities - discontinued operations 0 78,811 Total Liabilities 1,768,611 1,801,598 Shareholders' equity 124,140 143,178 Total Liabilities and Shareholders' Equity $1,892,751 $1,944,776 Net interest income/spread [2] 74,382 3.50% 75,256 3.69% Net yield on interest-earning assets 4.49% 4.64% Less: Tax-equivalent adjustment 490 691 Net interest income $73,892 $74,565 [1] The average balances of assets, liabilities and shareholders' equity are computed on the basis of daily averages. Average rates are presented on a tax-equivalent basis. Certain reclassifications have been made to prior period amounts to conform to current presentation. [2] Interest and/or average rates are presented on a tax-equivalent basis. [3] Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding and income has been included to the extent earned. Page 14 of 16 STERLING BANCORP Rate/Volume Analysis [1] (Unaudited) (in thousands) Increase/(Decrease) Three Months Ended December 31, 2007 Volume Rate Net [2] INTEREST INCOME Interest-bearing deposits with other banks $5 $(9) $(4) Investment securities - available for sale 1,466 222 1,688 Investment securities - held to maturity (746) 182 (564) Investment securities - tax exempt (50) (10) (60) Total investment securities 670 394 1,064 Federal funds sold (94) (8) (102) Loans, net of unearned discounts [3] 1,027 (1,081) (54) TOTAL INTEREST INCOME $1,608 $(704) $904 INTEREST EXPENSE Interest-bearing deposits Domestic Savings $(3) $1 $(2) NOW 116 33 149 Money market 322 (76) 246 Time 151 (135) 16 Foreign Time (4) 0 (4) Total interest-bearing deposits 582 (177) 405 Borrowings Securities sold under agreements to repurchase - customers (116) (138) (254) Securities sold under agreements to repurchase - dealers 48 (36) 12 Federal funds purchased 257 (12) 245 Commercial paper (169) (21) (190) Short-term borrowings - FHLB 83 (35) 48 Short-term borrowings - other 12 (1) 11 Long-term borrowings - FHLB 126 (10) 116 Long-term borrowings - subordinated debentures 0 0 0 Total borrowings 241 (253) (12) Less: interest-bearing liabilities allocated to discontinued operations 0 0 0 TOTAL INTEREST EXPENSE $823 $(430) $393 NET INTEREST INCOME $785 $(274) $511 [1] This table is presented on a tax-equivalent basis. [2] Changes in interest income and interest expense due to a combination of both volume and rate have been allocated to the change due to volume and the change due to rate in proportion to the relationship of change due solely to each. [3] Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding, and income has been included to the extent earned. Page 15 of 16 STERLING BANCORP Rate/Volume Analysis [1] (Unaudited) (in thousands) Increase/(Decrease) Twelve Months Ended December 31, 2007 Volume Rate Net [2] INTEREST INCOME Interest-bearing deposits with other banks $24 $(10) $14 Investment securities - available for sale 906 633 1,539 Investment securities - held to maturity (3,348) 557 (2,791) Investment securities - tax exempt (456) (54) (510) Total investment securities (2,898) 1,136 (1,762) Federal funds sold 1,019 21 1,040 Loans, net of unearned discounts [3] 6,724 (1,351) 5,373 TOTAL INTEREST INCOME $4,869 $(204) $4,665 INTEREST EXPENSE Interest-bearing deposits Domestic Savings $(15) $15 $0 NOW 869 1,247 2,116 Money market 674 1,709 2,383 Time 1,751 3,524 5,275 Foreign Time (24) 2 (22) Total interest-bearing deposits 3,255 6,497 9,752 Borrowings Securities sold under agreements to repurchase - customers (242) 133 (109) Securities sold under agreements to repurchase - dealers (3,240) (190) (3,430) Federal funds purchased (276) (63) (339) Commercial paper (881) 211 (670) Short-term borrowings - FHLB (1,311) (149) (1,460) Short-term borrowings - other 37 (1) 36 Long-term borrowings - FHLB (709) (40) (749) Long-term borrowings - subordinated debentures 0 0 0 Total borrowings (6,622) (99) (6,721) Less: interest-bearing liabilities allocated to discontinued operations 2,508 0 2,508 TOTAL INTEREST EXPENSE $(859) $6,398 $5,539 NET INTEREST INCOME $5,728 $(6,602) $(874) [1] This table is presented on a tax-equivalent basis. [2] Changes in interest income and interest expense due to a combination of both volume and rate have been allocated to the change due to volume and the change due to rate in proportion to the relationship of change due solely to each. [3] Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding, and income has been included to the extent earned. Page 16 of 16