Sterling Bancorp 8-K Sterling Bancorp Reports Strong FY 2004 Financial Results

Exhibit 99.1

650 FIFTH AVENUE
NEWYORK, NY 10019-6108

John Tietjen
Chief Financial Officer
Sterling Bancorp
john.tietjen@sterlingbancorp.com
212.757.8035 Thomas Walsh
Investor Relations/Media Relations
MWW Group
twalsh@mww.com
201.964.2464

FOR IMMEDIATE RELEASE

Sterling Bancorp Reports Strong FY 2004 Financial Results

Full Year 2004 Net Income Increases 11% in 9^thConsecutive Year of Record Results

New York, NY, February 4, 2005 – Sterling Bancorp (NYSE: STL), a financial holding company and the parent company of Sterling National Bank, today reported its financial results for the fiscal year and fourth quarter ended December 31, 2004.

2004 Highlights:

•   9^th consecutive year of record results

•   Net income increased 11% for the full year

•   Loans and demand deposits on average reached all-time highs for the full year

•   Diluted earnings per share for 2004 increased to $1.41

•   Total assets at year-end reached an all-time high of $1.9 billion

•   Return on average tangible equity grew to 22.7% for the fourth quarter of 2004

•   Six-for-five stock split increased the cash dividend paid to shareholders by 20% while increasing the liquidity of the stock

“We are pleased to report Sterling’s 9^th consecutive year of record financial results, with net income growth and both demand deposits and loans reaching all-time average highs,” said Louis J. Cappelli, Chairman and Chief Executive Officer. “This is a testament to the strength of our unique business model.”

“Sterling’s results for the year emphasize our ability to successfully manage our balance sheet and adapt to changing economic and interest rate environments,” stated Chairman Cappelli. “One example was in our residential mortgage business plan for 2004. To offset industry trends and market conditions which produced lower volumes of residential mortgage loans sold to investors, Sterling focused on higher margin residential real estate loans which produced higher profits.”

“In the past year, we celebrated the 75^th anniversary of Sterling National Bank,” continued Chairman Cappelli. “Throughout our history, Sterling’s strategies have

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centered on offering a diverse range of financial products, providing ‘high touch’ customer service, and increasing shareholder value. This was a challenging year for the industry. By maintaining our focus on our core business, we posted strong growth and consistent financial results. As a result of our strong balance sheet and solid financial performance, the Board of Directors authorized a six-for-five stock split in the fourth quarter of 2004. The stock split increased the cash paid to our shareholders by 20% while increasing the liquidity of the stock and trading volume in the market.”

Chairman Cappelli concluded, “During 2004, we continued to make significant investments in our franchise as our industry consolidated. This included expanding our presence in the New York region with the openings of new offices in Long Island City and Yonkers. We believe that the revitalized financial district of lower Manhattan presents a good opportunity for Sterling. We enthusiastically anticipate opening an office at 42 Broadway in late February to enhance our presence in this growing market. With a large number of small and middle-market businesses, as well as attorney, CPA and investment firms operating in the area, we believe the new location will offer new and existing clients convenient access to Sterling’s broad range of products, personalized customer service and high tech banking.”

Full Year and Fourth Quarter 2004 Financial Results

Net Income

For the year ended December 31, 2004, net income increased by 11.3% to $26.9 million from $24.2 million in 2003. Diluted earnings per share for 2004 were $1.41, compared to $1.27 in 2003 (adjusted to reflect the six-for-five stock split effected in December 2004).

The increase in net income for the 2004 year reflected continued growth in both net interest income and noninterest income, which more than offset increases in noninterest expenses and provision for loan losses.

In the fourth quarter of 2004, net income was $7.0 million, up from $6.4 million in the corresponding period of 2003. Diluted earnings per share for the fourth quarter rose to $0.37 from $0.33 in the corresponding period of 2003 (adjusted to reflect the six-for-five stock split effected in December 2004).

Net Interest Income

For the year ended December 31, 2004, net interest income, on a tax equivalent basis, increased to $79.0 million from $75.0 million in 2003.

Net interest margin, on a tax equivalent basis, for the year ended December 31, 2004 was 5.02%, compared to 5.33% for 2003. This variance was primarily the result of changes in the mix of earning assets.

Net interest income for the fourth quarter of 2004, on a tax equivalent basis, increased to $20.6 million from $19.3 million in the fourth quarter of 2003.

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Loans

Average total loans for the year ended December 31, 2004 grew 9.3% to $937.5 million with all significant segments of Sterling’s loan portfolio showing an increase in average outstandings for the year.

For the fourth quarter of 2004, average total loans increased 15.3% year-over-year to $1.0 billion.

Demand Deposits

For the full year of 2004, average demand deposits reached an all-time high, increasing 12.2% to $415.7 million.

Average demand deposits for the fourth quarter of 2004 were $426.8 million, increasing from $399.5 million in the corresponding period of 2003.

Cost of Funds

The average rate paid on interest-bearing funds for the year ended December 31, 2004 decreased to 1.73% from 1.76% in 2003, showing management’s continuing effort to contain costs in the rising interest rate environment of 2004. For 2004, total interest expense was $19.6 million compared to $17.6 million in 2003, principally due to increases in average interest-bearing deposits.

In the fourth quarter of 2004, the total interest expense increased to $5.5 million compared to $4.4 million in the corresponding period of 2003. The average rate paid on interest-bearing funds increased 21 basis points to 1.86% for the fourth quarter of 2004, compared to 1.65% for the corresponding period of 2003.

Average interest-bearing deposits for the fourth quarter of 2004 grew $155.5 million to $877.5 million from $722.0 million for the corresponding period of 2003. Average interest-bearing deposits for the year ended December 31, 2004 grew $147.2 million to $831.0 million. The improvement was largely a result of increased business development activities, including growth in Sterling’s two new branches in Long Island City, Queens and Yonkers, New York.

Noninterest Income and Noninterest Expenses

For the year ended December 31, 2004, noninterest income increased 7.2% to $34.9 million from $32.6 million in 2003. This improvement was the result of higher revenues primarily from mortgage and factoring activities, bank owned life insurance, and gains on sales of available for sale securities.

Noninterest income for the fourth quarter of 2004 was $8.8 million compared to $8.3 million in the corresponding period in 2003. This increase was primarily the result of increased income 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.

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Noninterest expenses for the year ended December 31, 2004 were $62.9 million, compared to $58.9 million in 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, equipment, professional fees and advertising and marketing costs.

Noninterest expenses for the fourth quarter of 2004 were $15.8 million, compared to $14.7 million in the corresponding quarter of 2003. The increase was due to higher salaries and employee benefits, professional fees and equipment expenses.

Asset Quality

As of December 31, 2004, nonperforming assets were $3.9 million, representing 0.21% of total assets.

The provision for loan losses for the year ended December 31, 2004 was $10.0 million compared to $8.7 million for the year ended December 31, 2003. The allowance for loan losses as a percentage of loans held in portfolio was 1.60% as of December 31, 2004.

The provision for loan losses in the fourth quarter of 2004 was $2.7 million compared to $2.6 million in the fourth quarter of 2003.

Stock Split and Dividend

Sterling’s Board of Directors approved a six-for-five stock split on November 18, 2004, which was effected in December 2004 through a 20% stock dividend in which Sterling’s shareholders received one additional common share for each five common shares held. During 2004, Sterling increased the cash paid to shareholders by over 20% compared to 2003. Additionally, the cash paid to shareholders has almost tripled since 1999. Outstanding shares of common stock as of December 31, 2004 were 18.2 million.

On November 18, 2004, Sterling’s Board of Directors also approved a fourth quarter cash dividend of $0.19 per common share, which equates to a $0.76 annual dividend for common shareholders. Sterling has distributed cash dividends for 59 consecutive years, illustrating Sterling’s dedication to returning profits to its shareholders.

Conference Call

Sterling Bancorp will host a teleconference call for the financial community this morning at 10:00 a.m. Eastern Time to discuss the full year and fourth quarter 2004 financial results. To access the conference call live, interested parties may dial 888-243-0813 at least 10 minutes prior to the call and reference passcode 644119.

A replay of the conference call will be available at 1:00 pm EST this afternoon until 11:59 p.m. EST on February 11, 2005. To access the replay by telephone, interested parties may dial 888-266-2081 and enter the passcode 644119.

About Sterling Bancorp

Sterling Bancorp (NYSE: STL) is a financial holding company with assets of $1.9 billion, offering a broad array of banking and financial services products. Its principal

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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
(Unaudited)
(dollars and shares in thousands, except per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2004			2003			2004			2003
OPERATING HIGHLIGHTS
Interest income	$	25,900		$	23,501		$	97,799		$	91,582
Interest expense		5,475			4,410			19,583			17,591
Provision for loan losses		2,730			2,604			9,965			8,740
Noninterest income		8,772			8,251			34,896			32,556
Noninterest expenses		15,811			14,676			62,884			58,910
Net income		7,030			6,383			26,948			24,204
Earnings per common share:
Basic		0.39			0.35			1.48			1.34
Diluted		0.37			0.33			1.41			1.27
Cash dividends declared		0.19			0.16			0.67			0.57
Common shares outstanding:
Period end		18,238			17,969			18,238			17,969
Average Basic		18,216			17,967			18,242			17,915
Average Diluted		19,106			19,107			19,135			18,918
Return on average assets		1.52	%		1.50	%		1.52	%		1.52	%
Return on average tangible equity (1)		22.73	%		21.48	%		22.20	%		21.42	%
Return on average stated equity (2)		19.40	%		18.21	%		18.91	%		18.04	%
Net interest spread, tax equivalent basis		4.38	%		4.55	%		4.53	%		4.82	%
Net interest margin, tax equivalent basis		4.90	%		5.02	%		5.02	%		5.33	%
ASSET QUALITY HIGHLIGHTS
Period End
Net charge-offs	$	2,003		$	2,495		$	8,095		$	7,673
Nonperforming loans		3,115			3,343			3,115			3,343
Other real estate owned		767			830			767			830
Nonperforming assets		3,882			4,173			3,882			4,173
Nonperforming loans/loans (3)		0.29	%		0.36	%		0.29	%		0.36	%
Nonperforming assets/assets		0.21	%		0.24	%		0.21	%		0.24	%
Allowance for loan losses/loans (4)		1.60	%		1.61	%		1.60	%		1.61	%
Allowance for loan losses/ nonperforming loans		524.21	%		432.52	%		524.21	%		432.52	%

(1) Average tangible equity represents average shareholders’ equity less average Goodwill.

(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
(Unaudited)
(dollars in thousands, except per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2004			2003			2004			2003
BALANCE SHEET HIGHLIGHTS
Period End Balances
Security investments	$	680,220		$	683,118		$	680,220		$	683,118
Loans held for sale		37,059			40,557			37,059			40,557
Loans held in portfolio, net of unearned discount		1,022,287			900,556			1,022,287			900,556
Total earning assets		1,740,895			1,625,887			1,740,895			1,625,887
Allowance for loan losses		16,329			14,459			16,329			14,459
Total assets		1,870,289			1,758,746			1,870,289			1,758,746
Noninterest-bearing deposits		511,307			474,092			511,307			474,092
Interest-bearing deposits		832,544			737,649			832,544			737,649
Customer repurchase agreements		55,934			42,491			55,934			42,491
Shareholders’ equity		153,583			143,185			153,583			143,185
Average Balances
Security investments	$	663,659		$	651,219		$	689,569		$	593,005
Loans held for sale		59,906			53,543			46,395			71,779
Loans held in portfolio, net of unearned discount		973,198			842,444			891,107			785,575
Total earning assets		1,699,902			1,557,948			1,641,134			1,459,591
Allowance for loan losses		16,538			15,139			15,906			14,720
Total assets		1,840,950			1,689,685			1,777,720			1,587,623
Noninterest-bearing deposits		426,843			399,524			415,664			370,554
Interest-bearing deposits		877,453			721,988			830,950			683,748
Customer repurchase agreements		93,295			79,336			84,559			71,648
Shareholders’ equity		144,188			139,053			142,536			134,150
Capital Ratios
Tier 1 risk based		13.55	%		13.63	%		13.55	%		13.63	%
Total risk based		14.80	%		14.88	%		14.80	%		14.88	%
Leverage		8.78	%		8.87	%		8.78	%		8.87	%
Book value per common share	$	8.42		$	7.84		$	8.42		$	7.84

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

	December 31,
	2004		2003
ASSETS
Cash and due from banks	$	48,842	$	63,948
Interest-bearing deposits with other banks		1,329		1,656
Investment securities
Available for sale (at estimated market value)		233,763		312,728
Held to maturity (at cost)		446,457		370,390
Total investment securities		680,220		683,118
Loans held for sale		37,059		40,557
Loans held in portfolio, net of unearned discounts		1,022,287		900,556
Less allowance for loan losses		16,329		14,459
Loans, net		1,005,958		886,097
Customers’ liability under acceptances		629		954
Goodwill		21,158		21,158
Premises and equipment, net		10,079		9,226
Other real estate		767		830
Accrued interest receivable		5,605		5,070
Bank owned life insurance		26,553		21,872
Other assets		32,090		24,260
	$	1,870,289	$	1,758,746
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Noninterest-bearing	$	511,307	$	474,092
Interest-bearing		832,544		737,649
Total deposits		1,343,851		1,211,741
Securities sold under agreements to repurchase - customers		55,934		42,491
Securities sold under agreements to repurchase - dealers		33,882		51,328
Federal Funds Purchased		32,500		10,000
Commercial paper		25,991		28,799
Other short-term borrowings		2,517		56,871
Acceptances outstanding		629		954
Accrued expenses and other liabilities		85,628		77,603
Long-term debt		135,774		135,774
Total liabilities		1,716,706		1,615,561
Shareholders’ equity		153,583		143,185
	$	1,870,289	$	1,758,746
MEMORANDA
Available for sale securities - amortized cost	$	233,539	$	308,890
Held to maturity securities - estimated market value		448,173		374,978
Shares outstanding
Preferred - Series D		0		224,432
Common issued		19,880,521		19,275,964
Common in treasury		1,642,996		1,306,587

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

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2004		2003		2004		2003
INTEREST INCOME
Loans	$	18,387	$	15,604	$	65,779	$	61,622
Investment securities - available for sale		2,681		3,435		13,038		10,602
Investment securities - held to maturity		4,821		4,439		18,829		19,269
Federal funds sold		3		19		132		64
Deposits with other banks		8		4		21		25
Total interest income		25,900		23,501		97,799		91,582
INTEREST EXPENSE
Deposits		3,311		2,207		11,173		8,887
Securities sold under agreements to repurchase		411		420		1,418		1,443
Federal funds purchased		74		9		146		65
Commercial paper		116		72		364		264
Other short-term borrowings		3		129		243		545
Long-term debt		1,560		1,573		6,239		6,387
Total interest expense		5,475		4,410		19,583		17,591
Net interest income		20,425		19,091		78,216		73,991
Provision for loan losses		2,730		2,604		9,965		8,740
Net interest income after provision for loan losses		17,695		16,487		68,251		65,251
NONINTEREST INCOME
Factoring income		1,731		1,553		6,841		5,947
Mortgage banking income		3,909		3,698		15,301		14,606
Service charges on deposit accounts		1,241		1,211		4,722		4,906
Trade finance income		569		544		2,268		2,337
Trust fees		189		178		697		647
Other service charges and fees		494		444		1,844		1,923
Bank owned life insurance income		251		252		1,226		1,042
Securities gains		285		253		1,256		551
Other income		103		118		741		597
Total noninterest income		8,772		8,251		34,896		32,556
NONINTEREST EXPENSES
Salaries and employee benefits		9,227		9,136		37,368		35,053
Occupancy expenses, net		959		1,157		4,606		4,788
Equipment expenses		893		808		3,063		2,854
Advertising and marketing		358		645		3,351		3,160
Professional fees		1,978		658		4,918		3,122
Data processing fees		264		232		1,124		1,012
Stationery and printing		199		228		802		904
Communications		368		351		1,530		1,581
Other expenses		1,565		1,461		6,122		6,436
Total noninterest expenses		15,811		14,676		62,884		58,910
Income before income taxes		10,656		10,062		40,263		38,897
Provision for income taxes		3,626		3,679		13,315		14,693
Net income	$	7,030	$	6,383	$	26,948	$	24,204
Average number of common shares outstanding
Basic		18,215,753		17,967,419		18,241,567		17,914,855
Diluted		19,105,781		19,107,089		19,135,345		18,918,219
Earnings per average common share
Basic	$	0.39	$	0.35	$	1.48	$	1.34
Diluted		0.37		0.33		1.41		1.27
Dividends per common share		0.19		0.16		0.67		0.57

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STERLING BANCORP
Statements of Comprehensive Income
(Unaudited)
(in thousands)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2004			2003			2004			2003
Net income	$	7,030		$	6,383		$	26,948		$	24,204
Other comprehensive income, net of tax:
Unrealized holding (losses)/gains arising during the period		(69	)		(796	)		(1,276	)		(1,227	)
Less:
Reclassification adjustment for gains included in net income		(155	)		(137	)		(680	)		(298	)
Change in unrealized gains/(losses) on supplemental pension		137			0			389			0
Minimum pension liability adjustment		640			(782	)		276			(782	)
Comprehensive income	$	7,583		$	4,668		$	25,657		$	21,897

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

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2004			2003			2004			2003
Balance, at beginning of period	$	145,746		$	140,945		$	143,185		$	129,780
Net income for period		7,030			6,383			26,948			24,204
Common shares issued under stock incentive plan and related tax benefits		3,646			0			4,830			1,547
Purchase of common shares for treasury		0			0			(8,310	)		(256	)
Capital stock split-cash in lieu		(26	)		0			(26	)		(32	)
Cash dividends
Common shares		(3,447	)		(2,819	)		(12,106	)		(10,111	)
Preferred shares		0			(31	)		0			(125	)
Surrender of shares issued under incentive compensation plan		0			0			(251	)		(494	)
Amortization of unearned compensation		81			422			604			979
Change in net unrealized holding (losses)/gains on available for sale securities		(69	)		(796	)		(1,276	)		(1,227	)
Reclassification adjustment for (gains) included in net income		(155	)		(137	)		(680	)		(298	)
Change in unrealized gains/(losses) on supplemental pension		137			0			389			0
Minimum pension liability adjustment		640			(782	)		276			(782	)
Balance, at end of period	$	153,583		$	143,185		$	153,583		$	143,185

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

						Three Months Ended
	December 31, 2004								December 31, 2003
	AVERAGE					AVERAGE			AVERAGE					AVERAGE
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
Assets
Interest-bearing deposits with other banks	$	2,378		$	8		1.36	%	$	2,861		$	4		0.62	%
Investment securities - available for sale		220,121			2,365		4.30			267,760			3,096		4.60
Investment securities - held to maturity		414,674			4,821		4.65			352,450			4,439		5.06
Investment securities - tax exempt [2]		28,864			515		7.10			31,009			576		7.37
Federal funds sold		761			3		1.79			7,881			19		0.96
Loans, net of unearned discount [3]		1,033,104			18,387		7.38			895,987			15,604		7.23
Total Interest-Earning Assets [2]		1,699,902			26,099		6.24	%		1,557,948			23,738		6.20	%
Cash and due from banks		62,676								61,269
Allowance for loan losses		(16,538	)							(15,139	)
Goodwill		21,158								21,158
Other		73,752								64,449
Total Assets	$	1,840,950							$	1,689,685
Liabilities and Shareholders’ Equity
Interest-bearing deposits
Domestic
Savings	$	29,273			26		0.36	%	$	29,007			25		0.34	%
NOW		133,674			159		0.47			122,173			148		0.48
Money market		222,485			372		0.66			180,002			227		0.50
Time		489,018			2,745		2.23			387,806			1,800		1.84
Foreign
Time		3,003			8		1.09			3,000			8		1.06
Total Deposits		877,453			3,310		1.50			721,988			2,208		1.21
Borrowings
Securities sold under agreements to repurchase - customers		93,295			319		1.36			79,336			238		1.19
Securities sold under agreements to repurchase - dealers		16,446			93		2.26			63,236			182		1.14
Federal funds purchased		14,017			74		2.09			3,413			9		1.04
Commercial paper		34,047			116		1.36			26,965			73		1.07
Other short-term debt		791			4		1.99			34,506			128		1.48
Long-term debt		135,774			1,560		4.62			137,187			1,572		4.58
Total Borrowings		294,370			2,166		2.95			344,643			2,202		2.55
Total Interest-Bearing Liabilities		1,171,823			5,476		1.86	%		1,066,631			4,410		1.65	%
Noninterest-bearing demand deposits		426,843								399,524
Other liabilities		98,096								84,477
Total Liabilities		1,696,762								1,550,632
Shareholders’ equity		144,188								139,053
Total Liabilities and Shareholders’ Equity	$	1,840,950							$	1,689,685
Net interest income/spread [2]					20,623		4.38	%					19,328		4.55	%
Net yield on interest-earning assets							4.90	%							5.02	%
Less: Tax equivalent adjustment					199								237
Net interest income				$	20,424							$	19,091

[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 11

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

						Twelve Months Ended
	December 31, 2004								December 31, 2003
	AVERAGE					AVERAGE			AVERAGE					AVERAGE
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
Assets
Interest-bearing deposits with other banks	$	3,120		$	21		0.70	%	$	3,473		$	25		0.73	%
Investment securities - available for sale		266,823			11,729		4.36			188,876			9,206		4.86
Investment securities - held to maturity		392,869			18,829		4.79			372,213			19,269		5.18
Investment securities - tax exempt [2]		29,877			2,135		7.14			31,916			2,370		7.43
Federal funds sold		10,943			132		1.21			5,759			64		1.12
Loans, net of unearned discount [3]		937,502			65,779		7.56			857,354			61,622		7.68
Total Interest-Earning Assets [2]		1,641,134			98,625		6.26	%		1,459,591			92,556		6.58	%
Cash and due from banks		60,281								58,350
Allowance for loan losses		(15,906	)							(14,720	)
Goodwill		21,158								21,158
Other		71,053								63,244
Total Assets	$	1,777,720							$	1,587,623
Liabilities and Shareholders’ Equity
Interest-bearing deposits
Domestic
Savings	$	31,203			120		0.38	%	$	27,554			98		0.35	%
NOW		134,096			622		0.46			119,730			586		0.49
Money market		213,331			1,280		0.60			165,666			792		0.48
Time		449,319			9,118		2.03			367,798			7,370		2.00
Foreign Time		3,001			33		1.09			3,000			41		1.38
Total Deposits		830,950			11,173		1.34			683,748			8,887		1.30
Borrowings
Securities sold under agreements to repurchase - customers		84,559			1,020		1.21			71,648			877		1.22
Securities sold under agreements to repurchase - dealers		29,601			398		1.35			46,219			566		1.22
Federal funds purchased		9,946			146		1.47			5,463			65		1.20
Commercial paper		30,069			364		1.21			23,819			264		1.11
Other short-term debt		12,629			243		1.93			31,853			545		1.71
Long-term debt		135,774			6,239		4.62			139,870			6,387		4.57
Total Borrowings		302,578			8,410		2.79			318,872			8,704		2.73
Total Interest-Bearing Liabilities		1,133,528			19,583		1.73	%		1,002,620			17,591		1.76	%
Noninterest-bearing demand deposits		415,664								370,554
Other liabilities		85,992								80,299
Total Liabilities		1,635,184								1,453,473
Shareholders’ equity		142,536								134,150
Total Liabilities and Shareholders’ Equity	$	1,777,720							$	1,587,623
Net interest income/spread [2]					79,042		4.53	%					74,965		4.82	%
Net yield on interest-earning assets							5.02	%							5.33	%
Less: Tax equivalent adjustment					826								974
Net interest income				$	78,216							$	73,991

[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 12

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

	Increase/(Decrease)
	Three Months Ended
	December 31, 2004
	Volume			Rate			Net [2]
INTEREST INCOME
Interest-bearing deposits with other banks	$	(1	)	$	5		$	4
Investment securities - available for sale		(535	)		(196	)		(731	)
Investment securities - held to maturity		761			(379	)		382
Investment securities - tax exempt		(40	)		(21	)		(61	)
Total investment securities		186			(596	)		(410	)
Federal funds sold		(25	)		9			(16	)
Loans, net of unearned discounts [3]		2,451			332			2,783
TOTAL INTEREST INCOME	$	2,611		$	(250	)	$	2,361
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	0		$	1		$	1
NOW		14			(3	)		11
Money market		62			83			145
Time		521			424			945
Foreign
Time		0			0			0
Total interest-bearing deposits		597			505			1,102
Borrowings
Securities sold under agreements to repurchase - customers		45			36			81
Securities sold under agreements to repurchase - dealers		(191	)		102			(89	)
Federal funds purchased		49			16			65
Commercial paper		21			22			43
Other short-term debt		(157	)		33			(124	)
Long-term debt		(21	)		9			(12	)
Total borrowings		(254	)		218			(36	)
TOTAL INTEREST EXPENSE	$	343		$	723		$	1,066
NET INTEREST INCOME	$	2,268		$	(973	)	$	1,295

[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]
(Unaudited)
(in thousands)

	Increase/(Decrease)
	Twelve Months Ended
	December 31, 2004
	Volume			Rate			Net [2]
INTEREST INCOME
Interest-bearing deposits with other banks	$	(3	)	$	(1	)	$	(4	)
Investment securities - available for sale		3,540			(1,017	)		2,523
Investment securities - held to maturity		1,078			(1,518	)		(440	)
Investment securities - tax exempt		(150	)		(85	)		(235	)
Total investment securities		4,468			(2,620	)		1,848
Federal funds sold		63			5			68
Loans, net of unearned discounts [3]		5,350			(1,193	)		4,157
TOTAL INTEREST INCOME	$	9,878		$	(3,809	)	$	6,069
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	14		$	8		$	22
NOW		72			(36	)		36
Money market		262			226			488
Time		1,638			110			1,748
Foreign
Time		0			(8	)		(8	)
Total interest-bearing deposits		1,986			300			2,286
Borrowings
Securities sold under agreements to repurchase - customers		150			(7	)		143
Securities sold under agreements to repurchase - dealers		(222	)		54			(168	)
Federal funds purchased		63			18			81
Commercial paper		75			25			100
Other short-term debt		(364	)		62			(302	)
Long-term debt		(206	)		58			(148	)
Total borrowings		(504	)		210			(294	)
TOTAL INTEREST EXPENSE	$	1,482		$	510		$	1,992
NET INTEREST INCOME	$	8,396		$	(4,319	)	$	4,077

[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