Sterling Bancorp 8-K Sterling Bancorp Reports Record Net Income For Third Quarter 2004 Strong Growth in Loans and Deposits Boosts Income 10.2% Year-Over-Year

Exhibit 99.1

	NEWS
[STERLING BANCORP LOGO]	IMMEDIATE RELEASE
	650 FIFTH AVENUE
	NEW YORK, NY 10019-6108

John Tietjen	Thomas Walsh
Chief Financial Officer	Investor Relations/Media Relations
Sterling Bancorp	MWW Group
john.tietjen@sterlingbancorp.com	twalsh@mww.com
212.757.8035	201-507-9500

FOR IMMEDIATE RELEASE

Sterling Bancorp Reports Record Net Income For Third Quarter 2004
Strong Growth in Loans and Deposits Boosts Income 10.2% Year-Over-Year

New York, NY, October 21, 2004 — Sterling Bancorp (NYSE: STL), a financial holding company and the parent company of Sterling National Bank, today reported its financial results for the third quarter and nine months ended September 30, 2004.

Third Quarter 2004 Highlights:

     • Net income increased to a record $6.7 million or 10.2% compared to the third quarter of 2003

     • Diluted earnings per share rose to $0.43 or 10.2% from the third quarter of 2003

     • Average demand deposits up 13% to $425 million

     • Average earning assets up 14% to $1.7 billion

     • Return on average tangible equity grew to 22.5% for the third quarter of 2004

“Sterling’s balanced business model produced solid financial results in the third quarter as we experienced particularly strong growth across our loan portfolio, a trend that accelerated during the quarter, as well as in total deposits,” said Louis J. Cappelli, Chairman and Chief Executive Officer. “We were pleased by the expanded margins in the third quarter and Sterling’s balance sheet has a composition that performs well in the current increasing short-term interest rate environment.”

“During 2004, we have made significant investments in our franchise as our industry consolidates, including expanding our presence in the New York region with the opening of new offices in Long Island City and Yonkers,” continued Chairman Cappelli. “Our focus on serving individuals, small and mid-sized businesses with high tech banking and personalized customer service is recognized in these communities.”

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Chairman Cappelli concluded, “We believe that our broad customer base, diversified loan portfolio and extensive deposit and loan offerings, position us to capitalize on growth opportunities throughout the markets and industries which we serve. We believe that there is a great opportunity for Sterling in the revitalized financial district of lower Manhattan. We have applied for a branch license and will be establishing a presence at 42 Broadway in early 2005 to take advantage of this growing market.”

Third Quarter and First Nine Months 2004 Financial Results

Net Income

Net income for the third quarter of 2004 was $6.7 million, a 10.2% increase from $6.1 million in the third quarter of 2003. Diluted earnings per share rose to $0.43 from $0.39 in the third quarter of last year.

For the nine months ended September 30, 2004, net income grew 11.8% to $19.9 million from $17.8 million in the first nine months of 2003. Diluted earnings per share increased to $1.25 from $1.13 in the corresponding period of 2003.

The year-over-year increase in net income was a result of continued growth in net interest income and noninterest income, which more than offset increases in the provision for loan losses and noninterest expenses.

Net Interest Income

In the third quarter of 2004, net interest income, on a tax equivalent basis, increased to $20.0 million from $18.3 million in the third quarter of 2003.

For the nine months ended September 30, 2004, net interest income, on a tax equivalent basis, rose to $58.4 million from $55.6 million in the first nine months of 2003.

On December 31, 2003, the Company adopted Financial Accounting Standards Board Interpretation No. 46R (“FIN 46R”) “Consolidation of Variable Interest Entities,” which clarified certain provisions of a previous interpretation. Under the provisions of FIN 46R, Sterling deconsolidated the issuer trust and now accounts for its investment in the trust as an asset, its junior subordinated debentures as long-term debt and the interest paid on those debentures as interest expense. As a result of the adoption of FIN 46R, Sterling’s prior period presentations have been restated to conform to the current presentation.

Net interest margin, on a tax-equivalent basis, for the third quarter of 2004 was 4.84%, compared to 5.02% for the third quarter of 2003 (adjusted to reflect the adoption of FIN 46R).

For the nine-month period ended September 30, 2004, net interest margin, on a tax-equivalent basis, was 4.92%, compared to 5.36% for the corresponding period of 2003 (adjusted to reflect the adoption of FIN 46R).

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The net interest margin for both the third quarter and nine month periods of 2004 was lessened primarily by the effect of the mix of earning assets (including principal prepayments in the investment portfolio), partially offset by the impact of higher rate environment in the 2004 periods and increases in average investment securities and loans outstanding.

Loans

     Average loans held in portfolio for the third quarter of 2004 grew 14.5% year-over-year to $914.6 million.

     For the nine-month period ended September 30, 2004, average loans held in portfolio rose to $863.5 million from $766.4 million in the corresponding 2003 period.

Demand Deposits

Demand deposits, on average, for the third quarter of 2004, increased to $425.0 million from $377.6 million in the similar period of 2003.

Demand deposits, on average, grew by 14.2% to $411.9 million in the nine-month period ended September 30, 2004.

Demand deposits were 32.6% of total deposits as of September 30, 2004.

Cost of Funds

The average rate paid on interest-bearing funds was 1.77% for the third quarter of 2004, compared to 1.71% for the third quarter of 2003 (adjusted to reflect the adoption of FIN 46R), reflecting management’s ongoing discipline in controlling funding costs in the higher rate environment of 2004. In the third quarter of 2004, total interest expense was $5.1 million compared to $4.3 million in the third quarter of 2003, principally due to increases in average interest-bearing deposits and higher rates paid for deposits and borrowings.

For the nine-month period ended September 30, 2004, the average rate paid on interest-bearing funds was 1.68%, compared to 1.80% for the similar period of 2003 (adjusted to reflect the adoption of FIN 46R). For the nine months ended September 30, 2004, total interest expense was $14.1 million compared to $13.2 million in the corresponding period of 2003.

Average interest-bearing deposits for the third quarter of 2004 grew to $853.3 million from $681.6 million for the corresponding period of 2003. Average interest-bearing deposits for the nine months ended September 30, 2004 grew $144.2 million to $815.3 million. The increases in both periods were largely a result of business development and growth in Sterling’s two new branches in Long Island City, Queens and Yonkers, New York.

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Noninterest Income and Noninterest Expenses

For the third quarter of 2004, noninterest income was $9.2 million, compared to $8.7 million in the third quarter of 2003. This increase was the result of increased income primarily from factoring activities, bank owned life insurance and gains on sales of available for sale securities, partially offset by lower fees for various other services.

Noninterest income for the nine-month period ended September 30, 2004 increased to $26.1 million from $24.3 million in the corresponding period of last year. This improvement was the result of higher revenue primarily from mortgage and factoring activities, bank owned life insurance, and gains on sales of available for sale securities.

Noninterest expenses for the quarter ended September 30, 2004 were $16.3 million, compared to $14.8 million in the corresponding period of 2003. The increase was due to investments in the Sterling franchise, including the new branches in Long Island City and Yonkers, with higher expenses primarily related to salaries and employee benefits, occupancy and professional fees.

For the nine-month period ended September 30, 2004, noninterest expenses were $47.1 million, compared to $44.2 million in the corresponding period of 2003. The increase was primarily due to higher expenses related to salaries and employee benefits, advertising and marketing, professional fees, partially offset by a first quarter reduction in employee benefit costs.

Provision for Income Taxes

For the nine-month period ended September 30, 2004, the provision for income taxes was $9.7 million, compared to $11.0 million for the corresponding period of 2003. During the second quarter 2004, certain open tax issues for the years 1999 through 2001 were resolved with state tax representatives. As a result, management conducted a review with outside professionals and reduced the provision for income taxes for the second quarter by approximately $1.5 million.

Asset Quality

As of September 30, 2004, nonperforming assets were $4.0 million, representing 0.22% of total assets.

The provision for loan losses for the third quarter of 2004 was $2.3 million compared to $2.2 million in the third quarter of 2003.

For the nine months ended September 30, 2004, the provision for loan losses was $7.2 million compared to $6.1 million in the corresponding period of 2003.

The allowance for loan losses was $15.6 million, or 1.61% of loans held in portfolio, as of September 30, 2004.

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Dividend

On September 30, 2004, Sterling paid a cash dividend of $0.19 per common share to shareholders of record as of September 15, 2004. The Company has been distributing quarterly cash dividends for more than 58 years.

Conference Call

Sterling Bancorp will host a teleconference call for the financial community on, October 21, 2004 at 10:00 a.m. Eastern Daylight Time to discuss the third quarter 2004 financial results. The public is invited to listen to this conference call by dialing 866-814-8483 at least 10 minutes prior to the call and entering passcode 575313.

A replay of the conference call will be available at 1:00 pm Eastern Daylight Time on October 21, 2004 until 11:59 p.m. Eastern Daylight Time on October 28, 2004. The public is invited to listen to this conference call by dialing 888-266-2081 and entering passcode 575313.

About Sterling Bancorp

Sterling Bancorp (NYSE: STL) is a financial holding company with assets of $1.8 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, trade financing, equipment leasing, corporate and consumer deposit services, trust and estate administration, and investment management services. The Company has operations in New York, Virginia and North Carolina and conducts business throughout the U.S.

This press release may contain statements, including but not limited to, statements concerning future results of operations or financial position, borrowing capacity and future liquidity, future investment results, future credit exposure, future loan losses and plans and objectives for future operations, and other statements regarding matters that are not historical facts, that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 of its control. Any forward-looking statements the Company may make speak only as of the date on which such statements are made. It is possible that the Company’s actual results and financial position may differ, possibly 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, see “Business — Cautionary Statement Regarding Forward-looking Statements” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

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STERLING BANCORP
Consolidated Financial Highlights
(dollars and shares in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
OPERATING HIGHLIGHTS
Interest income	$	24,812		$	22,352		$	71,899		$	68,081
Interest expense		5,050			4,285			14,108			13,181
Provision for loan losses		2,338			2,172			7,235			6,136
Noninterest income		9,175			8,735			26,124			24,305
Noninterest expenses		16,315			14,821			47,073			44,234
Net income		6,738			6,115			19,918			17,821
Earnings per common share:
Basic		0.44			0.41			1.31			1.19
Diluted		0.43			0.39			1.25			1.13
Cash dividends declared		0.19			0.19			0.57			0.49
Common shares outstanding:
Period end		15,177			14,935			15,177			14,935
Average Basic		15,176			14,909			15,217			14,868
Average Diluted		15,867			15,787			15,966			15,732
Return on average assets		1.50	%		1.53	%		1.51	%		1.53	%
Return on average tangible equity (1)		22.52	%		21.11	%		22.02	%		21.24	%
Return on average stated equity (2)		19.12	%		17.83	%		18.74	%		17.87	%
Net interest spread, tax equivalent basis		4.34	%		4.51	%		4.45	%		4.84	%
Net interest margin, tax equivalent basis		4.84	%		5.02	%		4.92	%		5.36	%
ASSET QUALITY HIGHLIGHTS
Period End
Net charge-offs	$	1,764		$	1,920		$	6,092		$	5,249
Nonperforming loans		2,993			2,617			2,993			2,617
Other real estate owned		1,019			1,024			1,019			1,024
Nonperforming assets		4,012			3,641			4,012			3,641
Nonperforming loans/loans (3)		0.30	%		0.27	%		0.30	%		0.27	%
Nonperforming assets/assets		0.22	%		0.22	%		0.22	%		0.22	%
Allowance for loan losses/loans (4)		1.61	%		1.65	%		1.61	%		1.65	%
Allowance for loan losses/ nonperforming loans		521.28	%		551.62	%		521.28	%		551.62	%

(1)	Average tangible equity represents average shareholders’ equity less average excess cost over equity in net assets of the bank.
(2)	Average stated equity is equal to average shareholders’ equity.
(3)	The term “loans” includes loans held for sale and loans held in portfolio.
(4)	The term “loans” includes loans held in portfolio only.

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STERLING BANCORP
Consolidated Financial Highlights
(dollars in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
BALANCE SHEET HIGHLIGHTS
Period End Balances
Security investments	$	670,120		$	583,427		$	670,120		$	583,427
Loans held for sale		38,810			79,348			38,810			79,348
Loans held in portfolio, net of unearned discount		968,073			876,779			968,073			876,779
Total earning assets		1,679,673			1,542,001			1,679,673			1,542,001
Allowance for loan losses		15,602			14,436			15,602			14,436
Total assets		1,809,879			1,656,868			1,809,879			1,656,868
Noninterest-bearing deposits		424,534			399,975			424,534			399,975
Interest-bearing deposits		874,835			695,331			874,835			695,331
Customer repurchase agreements		103,596			79,564			103,596			79,564
Shareholders’ equity		145,746			140,945			145,746			140,945
Average Balances
Security investments	$	682,669		$	558,579		$	698,269		$	573,390
Loans held for sale		37,378			96,195			41,858			77,924
Loans held in portfolio, net of unearned discount		914,563			798,841			863,544			766,411
Total earning assets		1,658,029			1,459,924			1,621,183			1,426,448
Allowance for loan losses		16,158			15,004			15,694			14,579
Total assets		1,786,555			1,589,563			1,756,494			1,554,048
Noninterest-bearing deposits		424,974			377,624			411,916			360,793
Interest-bearing deposits		853,279			681,609			815,336			671,150
Customer repurchase agreements		90,654			77,980			81,625			69,057
Shareholders’ equity		140,174			136,077			141,981			133,312
Capital Ratios
Tier 1 risk based		13.13	%		13.67	%		13.13	%		13.67	%
Total risk based		14.38	%		14.92	%		14.38	%		14.92	%
Leverage		8.63	%		9.19	%		8.63	%		9.19	%
Book value per common share	$	9.60		$	9.30		$	9.60		$	9.30

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STERLING BANCORP
Balance Sheets
(in thousands, except number of shares)

	September 30,
	2004		2003
ASSETS
Cash and due from banks	$	53,264	$	46,207
Interest-bearing deposits with other banks		2,670		2,447
Investment securities
Available for sale (at estimated market value)		282,437		274,602
Held to maturity (at cost)		387,683		308,825
Total investment securities		670,120		583,427
Loans held for sale		38,810		79,348
Loans held in portfolio, net of unearned discounts		968,073		876,779
Less allowance for loan losses		15,602		14,436
Loans, net		952,471		862,343
Customers’ liability under acceptances		903		2,992
Excess cost over equity in net assets of the banking subsidiary		21,158		21,158
Premises and equipment, net		9,987		9,111
Other real estate		1,019		1,024
Accrued interest receivable		5,140		5,583
Bank owned life insurance		22,303		21,621
Other assets		32,034		21,607
	$	1,809,879	$	1,656,868
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Noninterest-bearing	$	424,534	$	399,975
Interest-bearing		874,835		695,331
Total deposits		1,299,369		1,095,306
Securities sold under agreements to repurchase — customers		103,596		79,564
Securities sold under agreements to repurchase — dealers		0		64,063
Commercial paper		34,954		22,759
Other short-term borrowings		1,108		33,142
Acceptances outstanding		903		2,992
Accrued expenses and other liabilities		88,429		77,323
Long-term debt		135,774		140,774
Total liabilities		1,664,133		1,515,923
Shareholders’ equity		145,746		140,945
	$	1,809,879	$	1,656,868
MEMORANDA
Available for sale securities — amortized cost	$	281,801	$	269,038
Held to maturity securities — estimated market value		390,462		314,532
Shares outstanding
Preferred — Series D		0		226,026
Common issued		16,795,983		16,241,509
Common in treasury		1,618,903		1,306,587

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STERLING BANCORP
Statements of Income
(dollars in thousands, except per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2004		2003		2004		2003
INTEREST INCOME
Loans	$	16,898	$	15,877	$	47,392	$	46,018
Investment securities — available for sale		3,211		2,260		10,357		7,167
Investment securities — held to maturity		4,625		4,201		14,008		14,830
Federal funds sold		72		5		129		45
Deposits with other banks		6		9		13		21
Total interest income		24,812		22,352		71,899		68,081
INTEREST EXPENSE
Deposits		3,015		2,169		7,862		6,680
Securities sold under agreements to repurchase		326		340		1,007		1,023
Federal funds purchased		9		20		72		56
Commercial paper		107		66		248		192
Other short-term borrowings		34		85		240		416
Long-term debt		1,559		1,605		4,679		4,814
Total interest expense		5,050		4,285		14,108		13,181
Net interest income		19,762		18,067		57,791		54,900
Provision for loan losses		2,338		2,172		7,235		6,136
Net interest income after provision for loan losses		17,424		15,895		50,556		48,764
NONINTEREST INCOME
Factoring income		1,916		1,631		5,110		4,394
Mortgage banking income		3,846		3,974		11,392		10,908
Service charges on deposit accounts		1,259		1,193		3,481		3,695
Trade finance income		688		631		1,699		1,793
Trust fees		160		139		508		469
Other service charges and fees		395		512		1,350		1,479
Bank owned life insurance income		498		252		975		790
Securities gains		286		102		971		298
Other income		127		301		638		479
Total noninterest income		9,175		8,735		26,124		24,305
NONINTEREST EXPENSES
Salaries and employee benefits		10,054		8,871		28,141		25,917
Occupancy expenses, net		1,336		1,101		3,647		3,631
Equipment expenses		756		680		2,170		2,046
Advertising and marketing		975		865		2,993		2,515
Professional fees		952		838		2,940		2,464
Data processing fees		272		255		860		780
Stationery and printing		142		231		603		676
Communications		364		381		1,162		1,230
Other expenses		1,464		1,599		4,557		4,975
Total noninterest expenses		16,315		14,821		47,073		44,234
Income before income taxes		10,284		9,809		29,607		28,835
Provision for income taxes		3,546		3,694		9,689		11,014
Net income	$	6,738	$	6,115	$	19,918	$	17,821
Average number of common shares outstanding
Basic		15,175,955		14,908,734		15,217,170		14,867,562
Diluted		15,866,897		15,786,843		15,966,179		15,731,877
Earnings per average common share
Basic	$	0.44	$	0.41	$	1.31	$	1.19
Diluted		0.43		0.39		1.25		1.13
Dividends per common share		0.19		0.19		0.57		0.49

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STERLING BANCORP
Statements of Comprehensive Income
(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
Net income	$	6,738		$	6,115		$	19,918		$	17,821
Other comprehensive income, net of tax:
Unrealized holding (losses)/gains arising during the period		2,347			(20	)		(1,207	)		(431	)
Less:
Reclassification adjustment for gains included in net income		(155	)		(55	)		(525	)		(161	)
Change in unrealized gains/(losses) on supplemental pension		252			0			252			0
Minimum pension liability adjustment		0			0			(364	)		0
Comprehensive income	$	9,182		$	6,040		$	18,074		$	17,229

STERLING BANCORP
Statements of Changes in Shareholders’ Equity
(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
Balance, at beginning of period	$	139,252		$	136,900		$	143,185		$	129,780
Net income for period		6,738			6,115			19,918			17,821
Options exercised		28			700			1,184			1,547
Purchase of common shares for treasury		0			0			(8,310	)		(256	)
Capital stock split-cash in lieu		0			(32	)		0			(32	)
Cash dividends
Common shares		(2,867	)		(2,818	)		(8,658	)		(7,292	)
Preferred shares		0			(31	)		0			(94	)
Surrender of shares issued under incentive compensation plan		0			0			(251	)		(494	)
Amortization of unearned compensation		151			186			522			557
Change in net unrealized holding (losses)/gains on available for sale securities		2,347			(20	)		(1,207	)		(431	)
Reclassification adjustment for (gains) included in net income		(155	)		(55	)		(525	)		(161	)
Change in unrealized gains/(losses) on supplemental pension		252			0			252			0
Minimum pension liability adjustment		0			0			(364	)		0
Balance, at end of period	$	145,746		$	140,945		$	145,746		$	140,945

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STERLING BANCORP
Average Balance Sheets [1]
(dollars in thousands)

	Three Months Ended
	September 30, 2004								September 30, 2003
	AVERAGE					AVERAGE			AVERAGE					AVERAGE
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
Assets
Interest-bearing deposits with other banks	$	3,799		$	6		0.62	%	$	4,244		$	9		0.98	%
Investment securities — available for sale		266,551			2,886		4.33			171,712			1,917		4.58
Investment securities — held to maturity		386,851			4,625		4.78			355,463			4,201		4.73
Investment securities — tax exempt [2]		29,267			528		7.18			31,404			583		7.37
Federal funds sold		19,620			73		1.45			2,065			5		1.00
Loans, net of unearned discount [3]		951,941			16,898		7.31			895,036			15,877		7.18
Total Interest-Earning Assets		1,658,029			25,016		6.11	%		1,459,924			22,592		6.22	%
Cash and due from banks		53,476								60,229
Allowance for loan losses		(16,158	)							(15,004	)
Excess cost over equity in net assets of the bank		21,158								21,158
Other		70,050								63,256
Total Assets	$	1,786,555							$	1,589,563
Liabilities and Shareholders’ Equity
Interest-bearing deposits
Domestic
Savings	$	29,991			28		0.37	%	$	27,561			24		0.34	%
NOW		133,357			162		0.48			125,470			141		0.45
Money market		217,612			348		0.64			169,220			189		0.44
Time		469,319			2,469		2.09			356,358			1,803		2.01
Foreign
Time		3,000			8		1.10			3,000			11		1.30
Total Deposits		853,279			3,015		1.41			681,609			2,168		1.26
Borrowings
Securities sold under agreements to repurchase — customers		90,654			272		1.19			77,980			235		1.20
Securities sold under agreements to repurchase — dealers		14,910			54		1.43			35,266			104		1.17
Federal funds purchased		2,500			9		1.44			7,228			21		1.14
Commercial paper		34,394			107		1.23			24,285			66		1.07
Other short-term debt		6,293			34		2.15			31,114			85		1.09
Long-term debt		135,774			1,559		4.59			140,774			1,605		4.56
Total Borrowings		284,525			2,035		2.86			316,647			2,116		2.67
Total Interest-Bearing Liabilities		1,137,804			5,050		1.77	%		998,256			4,284		1.71	%
Noninterest-bearing demand deposits		424,974								377,624
Other liabilities		83,603								77,606
Total Liabilities		1,646,381								1,453,486
Shareholders’ equity		140,174								136,077
Total Liabilities and Shareholders’ Equity	$	1,786,555							$	1,589,563
Net interest income/spread					19,966		4.34	%					18,308		4.51	%
Net yield on interest-earning assets							4.84	%							5.02	%
Less: Tax equivalent adjustment					202								240
Net interest income				$	19,764							$	18,068

[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 2003 amounts to conform to current presentation.
[2]	Interest on tax-exempt securities is 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 11

STERLING BANCORP
Average Balance Sheets [1]
(dollars in thousands)

	Nine Months Ended
	September 30, 2004								September 30, 2003
	AVERAGE					AVERAGE			AVERAGE					AVERAGE
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
Assets
Interest-bearing deposits with other banks	$	3,151		$	13		0.55	%	$	3,679		$	21		0.76	%
Investment securities — available for sale		282,504			9,364		4.37			162,294			6,110		5.02
Investment securities — held to maturity		385,548			14,008		4.84			378,874			14,830		5.22
Investment securities — tax exempt [2]		30,217			1,619		7.16			32,222			1,794		7.44
Federal funds sold		14,361			129		1.18			5,044			45		1.18
Loans, net of unearned discount [3]		905,402			47,392		7.38			844,335			46,018		7.68
Total Interest-Earning Assets		1,621,183			72,525		6.13	%		1,426,448			68,818		6.64	%
Cash and due from banks		59,477								57,391
Allowance for loan losses		(15,694	)							(14,579	)
Excess cost over equity in net assets of the bank		21,158								21,158
Other		70,370								63,630
Total Assets	$	1,756,494							$	1,554,048
Liabilities and Shareholders’ Equity
Interest-bearing deposits
Domestic
Savings	$	31,851			93		0.39	%	$	27,065			72		0.36	%
NOW		134,237			463		0.46			118,907			438		0.49
Money market		210,257			909		0.58			160,835			565		0.47
Time		435,991			6,373		1.95			361,343			5,571		2.06
Foreign
Time		3,000			24		1.09			3,000			33		1.48
Total Deposits		815,336			7,862		1.29			671,150			6,679		1.33
Borrowings Securities sold under agreements to repurchase — customers		81,625			702		1.15			69,057			639		1.24
Securities sold under agreements to repurchase — dealers		34,018			305		1.20			40,198			384		1.28
Federal funds purchased		8,580			72		1.11			6,154			56		1.21
Commercial paper		28,733			248		1.15			22,758			192		1.13
Other short-term debt		16,603			240		1.93			30,959			416		1.80
Long-term debt		135,774			4,679		4.59			140,774			4,815		4.56
Total Borrowings		305,333			6,246		2.73			309,900			6,502		2.80
Total Interest-Bearing Liabilities		1,120,669			14,108		1.68	%		981,050			13,181		1.80	%
Noninterest-bearing demand deposits		411,916								360,793
Other liabilities		81,928								78,893
Total Liabilities		1,614,513								1,420,736
Shareholders’ equity		141,981								133,312
Total Liabilities and Shareholders’ Equity	$	1,756,494							$	1,554,048
Net interest income/spread					58,417		4.45	%					55,637		4.84	%
Net yield on interest-earning assets							4.92	%							5.36	%
Less: Tax equivalent adjustment					626								737
Net interest income				$	57,791							$	54,900

[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 2003 amounts to conform to current presentation.
[2]	Interest on tax-exempt securities is 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 12

STERLING BANCORP AND SUBSIDIARIES
Rate/Volume Analysis [1]
(in thousands)

	Increase/(Decrease)
	Three Months Ended
	September 30, 2004
	Volume			Rate			Net [2]
INTEREST INCOME
Interest-bearing deposits with other banks	$	(1	)	$	(2	)	$	(3	)
Investment securities — available for sale		1,079			(110	)		969
Investment securities — held to maturity		378			46			424
Investment securities — tax exempt		(40	)		(15	)		(55	)
Total investment securities		1,417			(79	)		1,338
Federal funds sold		65			3			68
Loans, net of unearned discounts [3]		795			226			1,021
TOTAL INTEREST INCOME	$	2,276		$	148		$	2,424
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	2		$	2		$	4
NOW		10			11			21
Money market		62			97			159
Time		592			74			666
Foreign
Time		0			(3	)		(3	)
Total interest-bearing deposits		666			181			847
Borrowings
Securities sold under agreements to repurchase — customers		39			(2	)		37
Securities sold under agreements to repurchase — dealers		(69	)		19			(50	)
Federal funds purchased		(16	)		4			(12	)
Commercial paper		30			11			41
Other short-term debt		(98	)		47			(51	)
Long-term debt		(57	)		11			(46	)
Total borrowings		(171	)		90			(81	)
TOTAL INTEREST EXPENSE	$	495		$	271		$	766
NET INTEREST INCOME	$	1,781		$	(123	)	$	1,658

[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 13

STERLING BANCORP AND SUBSIDIARIES
Rate/Volume Analysis [1]
(in thousands)

	Increase/(Decrease)
	Nine Months Ended
	September 30, 2004
	Volume			Rate			Net [2]
INTEREST INCOME
Interest-bearing deposits with other banks	$	(3	)	$	(5	)	$	(8	)
Investment securities — available for sale		4,121			(867	)		3,254
Investment securities — held to maturity		303			(1,125	)		(822	)
Investment securities — tax exempt		(111	)		(64	)		(175	)
Total investment securities		4,313			(2,056	)		2,257
Federal funds sold		84			0			84
Loans, net of unearned discounts [3]		3,416			(2,042	)		1,374
TOTAL INTEREST INCOME	$	7,810		$	(4,103	)	$	3,707
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	14		$	7		$	21
NOW		54			(29	)		25
Money market		196			148			344
Time		1,115			(313	)		802
Foreign
Time		0			(9	)		(9	)
Total interest-bearing deposits		1,379			(196	)		1,183
Borrowings
Securities sold under agreements to repurchase — customers		113			(50	)		63
Securities sold under agreements to repurchase — dealers		(56	)		(23	)		(79	)
Federal funds purchased		21			(5	)		16
Commercial paper		53			3			56
Other short-term debt		(204	)		28			(176	)
Long-term debt		(166	)		30			(136	)
Total borrowings		(239	)		(17	)		(256	)
TOTAL INTEREST EXPENSE	$	1,140		$	(213	)	$	927
NET INTEREST INCOME	$	6,670		$	(3,890	)	$	2,780

[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. The effect of the extra day in 2004 has been included in the change in volume.
[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