Sterling Bancorp 8-K Sterling Bancorp Reports FY 2005 Financial Results

Exhibit 99.1

John Tietjen	Rich Tauberman
Chief Financial Officer	Investor Relations/Media Relations
Sterling Bancorp	MWW Group
john.tietjen@sterlingbancorp.com	rtauberman@mww.com
212.757.8035	201.507.9500

Sterling Bancorp Reports FY 2005 Financial Results

Company Reports All-Time Records in Gross Revenue, Assets and
Average Loans and Deposits

New York, NY, January 31, 2006 – 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, 2005.

2005 Highlights:

• Gross revenue (interest and noninterest income) rose 11.4% year-over-year to a record $147.6 million

• Net interest income on a tax equivalent basis increased to a record $84.6 million

• Net interest margin was 4.94%, among the highest in the Company’s peer group

• Average loans and non-interest bearing deposits reached all-time highs increasing 12.5% to $1.1 billion and 8.9% to $452.6 million, respectively, year over year

• Assets at the end of 2005 grew 9.9% from the prior year-end to reach an all-time high of $2.1 billion

• A 5% stock dividend increased the effective annual cash payout to shareholders

“Sterling’s balanced business model contributed to the delivery of solid revenue growth in 2005, highlighted by strong increases in loans and deposits, despite the rising interest rate environment and flattening yield curve that presented challenges for the entire banking industry,” said Louis J. Cappelli, Chairman and Chief Executive Officer. “In 2005, we made important investments to enhance the value of the Sterling franchise, including opening a branch in lower Manhattan to directly serve that revitalized community and further expanding our presence in the region with the opening of a New Jersey office. In addition, the focus of the entire Sterling team on superior customer service and a product portfolio that addresses the needs of the small and mid-sized businesses the Company serves also contributed to our success.”

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Full Year and Fourth Quarter 2005 Financial Results

Net Income
For the year ended December 31, 2005, net income was $24.0 million compared to $24.6 million in 2004. Diluted earnings per share for 2005 were $1.22, compared to $1.23 in 2004 (adjusted to reflect the 5% stock dividend effected in December 2005).

In the fourth quarter of 2005, net income was $5.9 million, compared to $6.3 million in the corresponding period of 2004. Diluted earnings per share for the fourth quarter were $0.31 compared to $0.32 in the corresponding period of 2004 (adjusted to reflect the 5% stock dividend effected in December 2005).

“Sterling recorded impressive revenue growth last year, even as results were influenced by heightened pricing pressure that crossed deposit product lines and loan portfolios combined with overall increases in operating expenses to support growth and the impact of the flattened yield curve on investment activities,” added Chairman Cappelli. “The mortgage banking business remained strong throughout 2005 with volumes increasing by 6%, despite a difficult marketplace. While volumes were also up in the fourth quarter, our income, like other mortgage bankers, was negatively affected by secondary market yield compression in a segment of loan sales.”

Net Interest Income
For the year ended December 31, 2005, net interest income, on a tax equivalent basis, increased 7.1% to $84.6 million from $79.0 million in 2004. Net interest income benefited from growth in average loans and the higher interest rate environment in 2005, which was partially offset by the impact of the flattening yield curve and growth of interest-bearing deposits at higher costs.

Net interest margin, on a tax equivalent basis, for the year ended December 31, 2005 was 4.94%, compared to 5.02% for 2004.

Net interest income for the fourth quarter of 2005, on a tax equivalent basis, increased to $21.2 million from $20.6 million in the fourth quarter of 2004.

Loans
Average total loans for the year ended December 31, 2005 grew 12.5% to $1.1 billion with significant segments of Sterling’s loan portfolio showing an increase.

For the fourth quarter of 2005, average total loans increased 8.0% year-over-year to $1.1 billion.

Demand Deposits
For the full year 2005, average demand deposits reached an all-time high, increasing 8.9% to $452.6 million.

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Average demand deposits for the fourth quarter of 2005 increased 9.3% to $466.3 million from $426.8 million in the corresponding period of 2004.

Cost of Funds
The average rate paid on interest-bearing funds for the year ended December 31, 2005 increased to 2.35% from 1.73% in 2004, reflecting the rising interest rate environment of 2005. For 2005, total interest expense was $29.1 million compared to $19.6 million in 2004, due to higher rates paid for funding and increases in average interest-bearing deposits, principally time deposits.

In the fourth quarter of 2005, the total interest expense increased to $8.8 million compared to $5.5 million in the corresponding period of 2004. The average rate paid on interest-bearing funds increased to 2.73% for the fourth quarter of 2005, compared to 1.86% for the corresponding period of 2004.

Average interest-bearing deposits for the fourth quarter of 2005 grew $95.6 million to $973.0 million. Average interest-bearing deposits for the year ended December 31, 2005 grew 12.7% to $936.7 million. The improvement resulted largely from the Company’s branching initiatives and other business development activities.

Noninterest Income and Noninterest Expenses
For the year ended December 31, 2005, noninterest income was $34.6 million compared to $34.7 million in 2004. Noninterest income for the fourth quarter of 2005 was $7.9 million compared to $8.8 million in the corresponding period in 2004. The results for the full year and the fourth quarter were impacted by yield compression in the secondary mortgage market for loans in the fourth quarter, which reduced income. Also, growth in fees collected for deposit services was offset by decreases in factoring income and other service charges and fees and lower income from sales of available for sale securities.

Noninterest expenses for the year ended December 31, 2005 were $71.2 million, compared to $65.6 million in 2004. The increase was due to investments in the Sterling franchise with higher expenses primarily related to salaries, employee benefits, equipment, occupancy, compliance, professional fees and advertising and marketing costs.

Noninterest expenses for the fourth quarter of 2005 were $18.0 million, compared to $17.0 million in the corresponding quarter of 2004. The increase was due to higher employee benefits, occupancy and advertising and marketing costs.

Provision for Income Taxes
The provision for income taxes decreased to $2.5 million for the quarter ended December 31, 2005 from $3.2 million for the fourth quarter of 2004. For the full year 2005, the provision for income taxes was $13.6 million, compared to $12.8 million for 2004. The lower provision for taxes in the quarter ended December 31, 2005 was due in part to the lower income before income taxes for that quarter. In addition, based on management’s in-depth review of required tax reserves, including consultation with various outside

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professionals, these reserves were reduced through the provision for the fourth quarter of 2005 by approximately $1.1 million.

Asset Quality
As of December 31, 2005, nonperforming assets were $5.1 million, representing 0.25% of total assets.

The provision for loan losses for the year ended December 31, 2005 was $9.7 million compared to $10.0 million for the year ended December 31, 2004. The allowance for loan losses as a percentage of loans held in portfolio was 1.46% as of December 31, 2005.

The provision for loan losses in the fourth quarter of 2005 was $2.5 million compared to $2.7 million in the fourth quarter of 2004.

Dividends
Sterling’s Board of Directors approved a 5% stock dividend on November 17, 2005, which was effected in December 2005. The Board’s action increased the effective annual cash payout by approximately $0.04. Dividend growth is a hallmark of Sterling’s commitment to shareholders and an important part of the Company’s capital management program.

On November 17, 2005, 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 paid cash dividends for 60 consecutive years, illustrating Sterling’s dedication to distributing profits to its shareholders.

Common Share Repurchases
In the year 2005, the Company purchased a total of 535,700 shares of common stock under its repurchase program, representing approximately 3% of the shares outstanding. Approximately 18.8 million shares of common stock were outstanding as of December 31, 2005.

Conference Call
Sterling Bancorp will host a teleconference call for the financial community this morning at 10:00 a.m. Eastern Standard Time to discuss the full year and fourth quarter 2005 financial results. To access the conference call live, interested parties may dial (866) 835-8903 at least 10 minutes prior to the call.

A replay of the conference call will be available at 1:00 pm EST this afternoon until 11:59 p.m. EST on February 7, 2006. To access the replay by telephone, interested parties may dial (888) 266-2081 and enter the passcode 849160.

About Sterling Bancorp
Sterling Bancorp (NYSE: STL) is a financial holding company with assets of $2.1 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

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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, New Jersey, 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” 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 “Cautionary Statement Regarding Forward-Looking Statements” in Part I of the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2004.

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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,
	2005			2004			2005			2004
OPERATING HIGHLIGHTS
Interest income	$	29,800		$	25,900		$	113,044		$	97,799
Interest expense		8,785			5,475			29,109			19,583
Provision for loan losses		2,502			2,730			9,664			9,965
Noninterest income		7,890			8,772			34,553			34,718
Noninterest expenses		17,978			16,979			71,210			65,613
Net income		5,930			6,282			24,027			24,604
Earnings per common share:
Basic		0.31			0.33			1.25			1.29
Diluted		0.31			0.32			1.22			1.23
Cash dividends declared		0.19			0.18			0.73			0.63
Common shares outstanding:
Period end		18,835			19,143			18,835			19,143
Average Basic		19,055			19,121			19,164			19,147
Average Diluted		19,622			20,023			19,763			20,035
Return on average assets		1.18	%		1.36	%		1.24	%		1.38	%
Return on average tangible equity (1)		18.48	%		20.31	%		18.67	%		20.27	%
Return on average stated equity (2)		15.85	%		17.33	%		16.04	%		17.26	%
Net interest spread, tax-equivalent basis		3.94	%		4.38	%		4.29	%		4.53	%
Net interest margin, tax-equivalent basis		4.68	%		4.90	%		4.94	%		5.02	%
ASSET QUALITY HIGHLIGHTS
Period End
Net charge-offs	$	2,219		$	2,003		$	9,475		$	8,095
Nonperforming loans		4,204			3,115			4,204			3,115
Other real estate owned		860			767			860			767
Nonperforming assets		5,064			3,882			5,064			3,882
Nonperforming loans/loans (3)		0.36	%		0.29	%		0.36	%		0.29	%
Nonperforming assets/assets		0.25	%		0.21	%		0.25	%		0.21	%
Allowance for loan losses/loans (4)		1.46	%		1.60	%		1.46	%		1.60	%
Allowance for loan losses/ nonperforming loans		392.89	%		524.21	%		392.89	%		524.21	%

(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,
	2005			2004			2005			2004
BALANCE SHEET HIGHLIGHTS
Period End Balances
Security investments	$	715,299		$	680,220		$	715,299		$	680,220
Loans held for sale		40,977			37,059			40,977			37,059
Loans held in portfolio, net of unearned discount		1,128,799			1,022,287			1,128,799			1,022,287
Total earning assets		1,886,287			1,740,895			1,886,287			1,740,895
Allowance for loan losses		16,517			16,329			16,517			16,329
Total assets		2,056,042			1,871,112			2,056,042			1,871,112
Noninterest-bearing deposits		510,884			511,307			510,884			511,307
Interest-bearing deposits		937,442			832,544			937,442			832,544
Customer repurchase agreements		61,067			55,934			61,067			55,934
Shareholders’ equity		147,587			148,704			147,587			148,704
Average Balances
Security investments	$	708,133		$	663,659		$	713,629		$	689,569
Loans held for sale		56,340			59,906			53,948			46,395
Loans held in portfolio, net of unearned discount		1,059,413			973,198			1,000,235			891,107
Total earning assets		1,829,650			1,699,902			1,781,838			1,641,134
Allowance for loan losses		17,007			16,538			17,250			15,906
Total assets		1,988,160			1,840,950			1,931,101			1,777,720
Noninterest-bearing deposits		466,293			426,843			452,632			415,664
Interest-bearing deposits		973,029			877,453			936,665			830,950
Customer repurchase agreements		81,878			93,295			85,365			84,559
Shareholders’ equity		148,448			144,188			149,836			142,536
Capital Ratios
Tier 1 risk based		12.03	%		13.10	%		12.03	%		13.10	%
Total risk based		13.28	%		14.35	%		13.28	%		14.35	%
Leverage		7.96	%		8.49	%		7.96	%		8.49	%
Book value per common share	$	7.84		$	7.77		$	7.84		$	7.77

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

	December 31,
	2005		2004
ASSETS
Cash and due from banks	$	69,149	$	48,842
Interest-bearing deposits with other banks		1,212		1,329
Federal Funds Sold		0		0
Investment securities
Available for sale (at estimated market value)		201,259		233,762
Held to maturity (at cost)		514,040		446,458
Total investment securities		715,299		680,220
Loans held for sale		40,977		37,059
Loans held in portfolio, net of unearned discounts		1,128,799		1,022,287
Less allowance for loan losses		16,517		16,329
Loans, net		1,112,282		1,005,958
Customers’ liability under acceptances		590		629
Goodwill		21,158		21,158
Premises and equipment, net		10,904		10,675
Other real estate		860		767
Accrued interest receivable		6,116		5,605
Bank owned life insurance		26,964		26,553
Other assets		50,531		32,317
	$	2,056,042	$	1,871,112
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Noninterest-bearing	$	510,884	$	511,307
Interest-bearing		937,442		832,544
Total deposits		1,448,326		1,343,851
Federal funds purchased		55,000		32,500
Securities sold under agreements to repurchase — customers		61,067		55,934
Securities sold under agreements to repurchase — dealers		88,729		33,882
Commercial paper		38,191		25,991
Other short-term borrowings		38,851		2,517
Acceptances outstanding		590		629
Accrued expenses and other liabilities		91,927		91,330
Long-term debt		85,774		135,774
Total liabilities		1,908,455		1,722,408
Shareholders’ equity		147,587		148,704
	$	2,056,042	$	1,871,112
MEMORANDA
Available for sale securities — amortized cost	$	205,418	$	233,539
Held to maturity securities — estimated market value		504,514		448,173
Shares outstanding
Common issued		21,066,916		20,785,515
Common in treasury		2,231,442		1,642,996

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

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2005		2004		2005		2004
INTEREST INCOME
Loans	$	21,867	$	18,387	$	80,943	$	65,779
Investment securities — available for sale		2,268		2,681		9,546		13,038
Investment securities — held to maturity		5,612		4,821		22,181		18,829
Federal funds sold		26		3		309		132
Deposits with other banks		27		8		65		21
Total interest income		29,800		25,900		113,044		97,799
INTEREST EXPENSE
Deposits		5,644		3,311		18,135		11,173
Securities sold under agreements to repurchase		1,212		411		3,701		1,418
Federal funds purchased		259		74		647		146
Commercial paper		353		116		973		364
Other short-term borrowings		104		3		228		243
Long-term debt		1,213		1,560		5,425		6,239
Total interest expense		8,785		5,475		29,109		19,583
Net interest income		21,015		20,425		83,935		78,216
Provision for loan losses		2,502		2,730		9,664		9,965
Net interest income after provision for loan losses		18,513		17,695		74,271		68,251
NONINTEREST INCOME
Factoring income		1,389		1,731		6,004		6,841
Mortgage banking income		3,398		3,909		16,433		15,301
Service charges on deposit accounts		1,444		1,241		5,386		4,722
Trade finance income		529		569		2,088		2,268
Trust fees		170		189		643		697
Other service charges and fees		360		493		1,366		1,843
Bank owned life insurance income		254		251		1,402		1,226
Securities gains		140		285		337		1,256
Other income		206		103		894		563
Total noninterest income		7,890		8,771		34,553		34,717
NONINTEREST EXPENSES
Salaries		7,262		7,253		32,082		30,103
Employee benefits		3,311		2,313		9,889		9,033
Total personnel expense		10,573		9,566		41,971		39,136
Occupancy expenses, net		1,355		1,137		5,481		4,916
Equipment expenses		772		893		3,234		3,063
Advertising and marketing		833		358		3,900		3,351
Professional fees		2,205		2,628		5,908		5,568
Data processing fees		292		264		1,186		1,124
Stationery and printing		195		199		851		802
Communications		348		369		1,609		1,531
Other expenses		1,405		1,565		7,070		6,122
Total noninterest expenses		17,978		16,979		71,210		65,613
Income before income taxes		8,425		9,487		37,614		37,355
Provision for income taxes		2,495		3,205		13,587		12,751
Net income	$	5,930	$	6,282	$	24,027	$	24,604
Average number of common shares outstanding
Basic		19,055,354		19,120,747		19,164,498		19,146,561
Diluted		19,621,935		20,023,177		19,763,352		20,035,494
Earnings per average common share
Basic	$	0.31	$	0.33	$	1.25	$	1.29
Diluted		0.31		0.32		1.22		1.23
Dividends per common share		0.19		0.18		0.73		0.63

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

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2005			2004			2005			2004
Net income	$	5,930		$	6,282		$	24,027		$	24,604
Other comprehensive income, net of tax:
Unrealized holding (losses)/gains arising during the period		(502	)		(68	)		(2,110	)		(1,275	)
Less:
Reclassification adjustment for gains included in net income		(75	)		(155	)		(182	)		(680	)
Change in unrealized (losses)/gains on supplemental pension		(24	)		174			(535	)		389
Minimum pension liability adjustment		(482	)		777			(482	)		777
Comprehensive income	$	4,847		$	7,010		$	20,718		$	23,815

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

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2005			2004			2005			2004
Balance, at beginning of period	$	153,451		$	145,065		$	148,704		$	143,262
Net income for period		5,930			6,282			24,027			24,604
Common shares issued under stock incentive plan and related tax benefits		251			664			4,297			2,517
Purchase of common shares for treasury		(7,184	)		0			(10,507	)		(8,310	)
Capital stock split-cash in lieu		(25	)		(26	)		(25	)		(26	)
Cash dividends-Common shares		(3,591	)		(3,448	)		(14,035	)		(12,106	)
Surrender of shares issued under incentive compensation plan		(228	)		(643	)		(1,834	)		(1,052	)
Amortization of unearned compensation		66			82			269			604
Change in net unrealized holding (losses)/gains on available for sale securities		(502	)		(68	)		(2,110	)		(1,275	)
Reclassification adjustment for gains included in net income		(75	)		(155	)		(182	)		(680	)
Change in unrealized (losses)/gains on supplemental pension		(24	)		174			(535	)		389
Minimum pension liability adjustment		(482	)		777			(482	)		777
Balance, at end of period	$	147,587		$	148,704		$	147,587		$	148,704

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

	Three Months Ended
	December 31, 2005								December 31, 2004
	AVERAGE					AVERAGE			AVERAGE					AVERAGE
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
Assets
Interest-bearing deposits with other banks	$	3,155		$	27		2.68	%	$	2,378		$	8		1.36	%
Investment securities — available for sale		177,889			1,983		4.46			220,121			2,365		4.30
Investment securities — held to maturity		502,159			5,612		4.47			414,674			4,821		4.65
Investment securities — tax exempt [2]		28,085			467		6.59			28,864			515		7.10
Total investment securities		708,133			8,062		4.55			663,659			7,701		4.64
Federal funds sold		2,609			26		3.82			761			3		1.79
Loans, net of unearned discount [3]		1,115,753			21,867		8.13			1,033,104			18,387		7.38
Total Interest-Earning Assets [2]		1,829,650			29,982		6.67	%		1,699,902			26,099		6.24	%
Cash and due from banks		70,806								62,676
Allowance for loan losses		(17,007	)							(16,538	)
Goodwill		21,158								21,158
Other		83,553								73,752
Total Assets	$	1,988,160							$	1,840,950
Liabilities and Shareholders’ Equity
Interest-bearing deposits
Domestic
Savings	$	26,866			28		0.41	%	$	29,273			26		0.36	%
NOW		202,782			836		1.64			133,674			159		0.47
Money market		221,050			704		1.26			222,485			372		0.66
Time		519,311			4,068		3.11			489,018			2,746		2.23
Foreign
Time		3,020			8		1.09			3,003			8		1.09
Total Interest-Bearing Deposits		973,029			5,644		2.30			877,453			3,311		1.50
Borrowings
Securities sold under agreements to repurchase — customers		81,878			605		2.93			93,295			318		1.36
Securities sold under agreements to repurchase — dealers		58,020			607		4.15			16,446			93		2.26
Federal funds purchased		24,674			259		4.17			14,017			74		2.09
Commercial paper		42,017			353		3.34			34,047			116		1.36
Other short-term debt		9,346			104		4.40			791			3		1.99
Long-term debt		90,013			1,213		5.39			135,774			1,560		4.62
Total Borrowings		305,948			3,141		4.09			294,370			2,164		2.95
Total Interest-Bearing Liabilities		1,278,977			8,785		2.73	%		1,171,823			5,475		1.86	%
Noninterest-bearing demand deposits		466,293								426,843
Other liabilities		94,442								98,096
Total Liabilities		1,839,712								1,696,762
Shareholders’ equity		148,448								144,188
Total Liabilities and Shareholders’ Equity	$	1,988,160							$	1,840,950
Net interest income/spread [2]					21,197		3.94	%					20,624		4.38	%
Net yield on interest-earning assets							4.68	%							4.90	%
Less: Tax-equivalent adjustment					182								199
Net interest income				$	21,015							$	20,425

[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, 2005								December 31, 2004
	AVERAGE					AVERAGE			AVERAGE					AVERAGE
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
Assets
Interest-bearing deposits with other banks	$	3,040		$	65		1.96	%	$	3,120		$	21		0.70	%
Investment securities — available for sale		192,354			8,438		4.39			266,823			11,729		4.36
Investment securities — held to maturity		495,187			22,181		4.48			392,869			18,829		4.79
Investment securities — tax exempt [2]		26,088			1,816		6.96			29,877			2,135		7.14
Total investment securities		713,629			32,435		4.55			689,569			32,693		4.73
Federal funds sold		10,986			309		2.81			10,943			132		1.21
Loans, net of unearned discount [3]		1,054,183			80,943		8.21			937,502			65,779		7.56
Total Interest-Earning Assets [2]		1,781,838			113,752		6.64	%		1,641,134			98,625		6.26	%
Cash and due from banks		64,141								60,281
Allowance for loan losses		(17,250	)							(15,906	)
Goodwill		21,158								21,158
Other		81,214								71,053
Total Assets	$	1,931,101							$	1,777,720
Liabilities and Shareholders’ Equity
Interest-bearing deposits
Domestic
Savings	$	28,150			113		0.40	%	$	31,203			120		0.38	%
NOW		160,944			1,576		0.98			134,096			622		0.46
Money market		227,520			2,456		1.08			213,331			1,280		0.60
Time		517,038			13,957		2.70			449,319			9,118		2.03
Foreign Time		3,013			33		1.09			3,001			33		1.09
Total Interest-Bearing Deposits		936,665			18,135		1.94			830,950			11,173		1.34
Borrowings
Securities sold under agreements to repurchase — customers		85,365			1,907		2.23			84,559			1,020		1.21
Securities sold under agreements to repurchase — dealers		52,199			1,794		3.44			29,601			398		1.35
Federal funds purchased		17,992			647		3.60			9,946			146		1.47
Commercial paper		37,302			973		2.61			30,069			364		1.21
Other short-term debt		6,021			228		3.78			12,629			243		1.93
Long-term debt		106,514			5,425		5.09			135,774			6,239		4.62
Total Borrowings		305,393			10,974		3.59			302,578			8,410		2.79
Total Interest-Bearing Liabilities		1,242,058			29,109		2.35	%		1,133,528			19,583		1.73	%
Noninterest-bearing demand deposits		452,632								415,664
Other liabilities		86,575								85,992
Total Liabilities		1,781,265								1,635,184
Shareholders’ equity		149,836								142,536
Total Liabilities and Shareholders’ Equity	$	1,931,101							$	1,777,720
Net interest income/spread [2]					84,643		4.29	%					79,042		4.53	%
Net yield on interest-earning assets							4.94	%							5.02	%
Less: Tax-equivalent adjustment					708								826
Net interest income				$	83,935							$	78,216

[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, 2005
	Volume			Rate			Net [2]
INTEREST INCOME
Interest-bearing deposits with other banks	$	5		$	14		$	19
Investment securities — available for sale		(469	)		87			(382	)
Investment securities — held to maturity		986			(195	)		791
Investment securities — tax exempt		(13	)		(35	)		(48	)
Total investment securities		504			(143	)		361
Federal funds sold		15			8			23
Loans, net of unearned discounts [3]		1,533			1,947			3,480
TOTAL INTEREST INCOME	$	2,057		$	1,826		$	3,883
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	(2	)	$	4		$	2
NOW		117			560			677
Money market		(2	)		334			332
Time		179			1,143			1,322
Foreign
Time		0			0			0
Total interest-bearing deposits		292			2,041			2,333
Borrowings
Securities sold under agreements to repurchase — customers		(43	)		330			287
Securities sold under agreements to repurchase — dealers		387			127			514
Federal funds purchased		80			105			185
Commercial paper		32			205			237
Other short-term debt		90			11			101
Long-term debt		(585	)		238			(347	)
Total borrowings		(39	)		1,016			977
TOTAL INTEREST EXPENSE	$	253		$	3,057		$	3,310
NET INTEREST INCOME	$	1,804		$	(1,231	)	$	573

[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, 2005
	Volume			Rate			Net [2]
INTEREST INCOME
Interest-bearing deposits with other banks	$	(1	)	$	45		$	44
Investment securities — available for sale		(3,369	)		78			(3,291	)
Investment securities — held to maturity		4,625			(1,273	)		3,352
Investment securities — tax exempt		(268	)		(51	)		(319	)
Total investment securities		988			(1,246	)		(258	)
Federal funds sold		1			176			177
Loans, net of unearned discounts [3]		8,897			6,267			15,164
TOTAL INTEREST INCOME	$	9,885		$	5,242		$	15,127
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	(13	)	$	6		$	(7	)
NOW		143			811			954
Money market		88			1,088			1,176
Time		1,502			3,337			4,839
Foreign
Time		0			0			0
Total interest-bearing deposits		1,720			5,242			6,962
Borrowings
Securities sold under agreements to repurchase — customers		7			880			887
Securities sold under agreements to repurchase — dealers		460			936			1,396
Federal funds purchased		179			322			501
Commercial paper		105			504			609
Other short-term debt		(172	)		157			(15	)
Long-term debt		(1,426	)		612			(814	)
Total borrowings		(847	)		3,411			2,564
TOTAL INTEREST EXPENSE	$	873		$	8,653		$	9,526
NET INTEREST INCOME	$	9,012		$	(3,411	)	$	5,601

[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