Sterling Bancorp 8-K Sterling Bancorp Net Income Rises In 2008 Third Quarter

Exhibit 99.1

John Tietjen	Edward Nebb
Chief Financial Officer	Investor Relations
Sterling Bancorp	Comm-Counsellors, LLC
john.tietjen@sterlingbancorp.com	enebb@optonline.net
212.757.8035	203.972.8350

STERLING BANCORP NET INCOME RISES IN 2008 THIRD QUARTER

Solid Quarter Marked by Growth in Portfolio Loans, Well-Managed Credit Quality
and Strong Capital and Liquidity

New York, NY, October 30, 2008 — Sterling Bancorp (NYSE: STL), the parent company of New York City-based Sterling National Bank, today reported that net income increased to $3.8 million for the third quarter of 2008, from $3.1 million for the same quarter of 2007. Earnings per share on a diluted basis rose to $0.21 for the 2008 third quarter, compared with $0.17 in the year-ago period.

Net income for the first nine months of 2008 was $12.0 million, up from $10.4 million a year ago. Diluted EPS was $0.66 for 2008 year-to-date, an increase from $0.56 per diluted share for the first nine months of 2007.

Third Quarter Highlights:

• Core earnings were $0.25 per shareexcluding an after-tax charge of $0.04 per share recognized for other than temporary impairment of a corporate debt security.

• Exceeding “well-capitalized” requirements, the total risk-based capital ratio was 10.62% at quarter-end.

• Asset quality remained sound,with a 0.56% ratio of nonperforming loans to total loans at September 30, 2008, compared with 0.51% a year ago and 0.58% at June 30, 2008.

• Net interest margin rose to 4.46%on a tax-equivalent basis, increasing 5 basis points from 4.41% a year ago.

• Loans held in portfolio grew 8.7%to an average of $1,175.5 million for the 2008 third quarter, and reached an all-time high at September 30, 2008.

• Demand deposits were 33.3%of total deposits at September 30, 2008 and averaged $453.1 million for the recent quarter.

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“We are proud of our strong performance for the 2008 third quarter and year-to-date, particularly in view of the chaotic conditions in the financial markets. In this environment, we have continued to deliver solid year-over-year increases in profitability in 2008, with earnings increasing significantly for the third quarter. Our progress has been driven by robust growth in our loan portfolio, sound asset-liability management strategies and a continued commitment to asset quality,” stated Louis J. Cappelli, Sterling’s Chairman and Chief Executive Officer.

“In this harsh economic climate, the most successful and stable financial institutions are those with strong capital, ample liquidity and well-managed asset quality — and we believe Sterling is well-positioned on all three counts,” Mr. Cappelli continued. “Our capital remains in excess of the ‘well-capitalized’ regulatory requirement. Our strong base of core demand deposits, which represents approximately one-third of total deposits, is a cost-effective source of liquidity. Our traditional, prudent approach to loan underwriting has resulted in sound asset quality, as reflected in a ratio of non-accrual loans to total loans that is below our peer group average.”

“We believe the current environment continues to offer opportunities for a strong, well-positioned financial institution such as Sterling. Our 8.7% growth in average portfolio loans for the third quarter is evidence that we have benefitted from our ability to serve the financing needs of existing and new customers in our market. With a ratio of loans held in portfolio to deposits of 83.9% at September 30, 2008, we believe we have additional growth capacity. Recently, we have been adding experienced business development executives to further capitalize on the opportunities we see to expand our banking relationships.”

Third Quarter 2008 Financial Results

Net income was $3.8 million or $0.21 per diluted share for the 2008 third quarter, up from $3.1 million or $0.17 per diluted share for the same 2007 period. In the 2008 third quarter, Sterling recognized a pre-tax charge of $1.2 million or $0.04 per diluted share (after tax) on a corporate debt security deemed to be other than temporarily impaired (OTTI), which was reflected in noninterest income. Excluding the charge, net income was $4.5 million or $0.25 per diluted share for the 2008 third quarter. The debt security was sold in the fourth quarter.

Net interest income rose 13.7% to $21.8 million on a tax-equivalent basis for the third quarter of 2008. Higher average loan and investment securities balances, as well as sharply lower funding costs due to Sterling’s decision to employ cost-effective wholesale funding in lieu of higher-priced certificates of deposit, contributed to the increase in net interest income. Reflecting the above factors, the net interest margin rose to 4.46% on a tax-equivalent basis for the 2008 third quarter versus 4.41% for the same period last year.

Noninterest income was $8.4 million for the third quarter of 2008, excluding the pre-tax OTTI charge of $1.2 million noted above. Excluding the OTTI charge, noninterest income increased $653,000 or 8.4% from a year ago, driven primarily by increased fees from Sterling’s accounts receivable management products and by higher mortgage banking income.

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Noninterest expenses for the 2008 third quarter were $21.7 million, compared to $19.4 million a year ago. The increase was primarily the result of higher personnel expenses due to normal salary increases and investments in the growth of the Sterling franchise, as well as increased professional fees related to revenue enhancement projects and the settlement of certain litigation.

Nine Months 2008 Financial Results

Net income was $12.0 million or $0.66 per diluted share for the first nine months of 2008, up from $10.4 million or $0.56 per diluted share for the same 2007 period. Excluding pre-tax OTTI charges of $1.7 million for the first nine months of 2008, net income was $13.0 million or $0.71 per diluted share.

Net interest income was $63.4 million on a tax-equivalent basis for the first nine months of 2008, up $8.2 million from the same period of 2007. The increase primarily reflected higher average balances of loans and investment securities and lower funding costs, while yields on loans declined due to the prevailing rate environment in 2008. The net interest margin was 4.53% for the first nine months of 2008 compared with 4.44% for the same period last year.

Noninterest income was $26.2 million for the first nine months of 2008, excluding pre-tax OTTI charges of $1.7 million. Excluding the OTTI charges, noninterest income increased $306,000 or 1.2% versus the same period of 2007.

Noninterest expenses for 2008 year-to-date were $63.0 million, compared to $59.1 million for the same period of 2007. The increase was primarily the result of higher personnel costs due to normal salary increases and investments in the growth of the Sterling franchise, increased occupancy costs due to higher rents, and increased professional fees as noted above.

The provision for income taxes was $6.5 million for the first nine months of 2008, compared to $5.9 million in the year-ago period, primarily due to the higher level of pre-tax income in the 2008 period.

Earning Assets and Deposits

Loans held in portfolio, net of unearned discounts, averaged $1,175.5 million for the 2008 third quarter, up 8.7% from a year ago. The increase reflected robust demand for a wide range of Sterling’s lending products and services from both existing and new customers.

Investment securities averaged $769.3 million for the third quarter of 2008, up from $575.3 million a year ago, primarily due to the implementation of asset/liability management strategies designed to capitalize on current market conditions. Approximately 93% of Sterling’s investment portfolio is comprised of debt obligations of U.S. government corporations and government sponsored enterprises, with another 3% in obligations of states and political subdivisions.

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Demand deposits averaged $453.1 million for the 2008 third quarter, compared with $455.1 million a year earlier. Demand deposits represented 33.3% of total deposits at September 30, 2008, one of the highest ratios of demand to total deposits in the industry. The Company has no brokered certificates of deposit.

Asset Quality Highlights

The ratio of nonperforming assets to total assets was 0.42% at September 30, 2008, compared to 0.41% a year earlier. Nonperforming loans represented 0.56% of total loans at September 30, 2008, compared to 0.51% a year ago. The allowance for loan losses as a percentage of total loans held in portfolio improved to 1.30% at September 30, 2008, from 1.28% a year ago.

The provision for loan losses decreased to $2.0 million for the third quarter of 2008 from $2.1 million for the same period of 2007.

“Our loan portfolio reflects limited exposure to construction lending, subprime and Alt-A mortgage loans, consumer debt, home equity lending products, credit card receivables, auto loans or other asset classes that have recently generated losses for some institutions,” noted Mr. Cappelli.

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

Capital and Dividends

Sterling’s capital ratios exceeded the requirements for a well-capitalized institution for regulatory purposes. Its Tier 1 risk-based capital ratio was 9.50%, total risk-based capital was 10.62% and the Tier 1 leverage ratio was 6.42% at September 30, 2008.

The Company noted that the U.S. Treasury Department recently outlined a plan under which it will make capital available to certain eligible institutions in exchange for nonvoting senior preferred stock and warrants to purchase common stock. While Sterling Bancorp exceeds regulatory standards for “well-capitalized” institutions, the Company is evaluating whether to participate in this program.

The FDIC has expanded its deposit insurance program to cover 100% of noninterest-bearing transaction accounts without additional cost until November 13, 2008. After that date the expanded coverage will become a voluntary fee-based program set to expire on December 31, 2009. Additionally, the FDIC has instituted a program to guarantee all newly issued senior unsecured debt of participating organizations, within a certain limit, issued on or before June 30, 2009. Sterling is assessing whether to participate in either or both of these programs.

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Sterling paid a cash dividend of $0.19 per common share on September 30, 2008, to shareholders of record as of September 15, 2008. The Company has been distributing cash dividends for 251 consecutive quarters over more than 62 years.

Conference Call

Sterling Bancorp will host a teleconference call for the financial community on October 30, 2008 at 10:30 a.m. Eastern Time to discuss the 2008 third quarter financial results. To access the conference call live, interested parties may dial 877-407-8033 at least 10 minutes prior to the call.

A replay of the conference call will be available beginning at approximately 1:00 p.m. Eastern Time on October 30, 2008 until 11:59 p.m. Eastern Time on November 14, 2008. To access the replay by telephone, interested parties may dial 877-660-6853; enter the Account Code 286 and Conference ID 301819.

About Sterling Bancorp

Sterling Bancorp (NYSE: STL) is a New York-based banking and financial services company that serves the needs of businesses, professionals and individuals. With assets exceeding $2.1 billion, Sterling offers a broad array of products and services, combined with a unique high-touch approach to customer service. The Company’s principal banking subsidiary, Sterling National Bank, with offices in New York City and Queens, Nassau and Westchester counties, was founded in 1929.

Known for its focus on business customers, Sterling offers such services as working capital lines, asset-based financing, factoring and accounts receivable management, payroll funding and processing, equipment leasing and financing, commercial and residential mortgages, international trade financing, cash management, a wide array of deposit products, trust and estate administration, and investment management services.

Certain statements in this press release, including but not limited to, statements as to future liquidity, future interest rate risk and operating expenses, statements concerning future results of operations, financial position or dividends, and plans and objectives for future operations, statements concerning the Company’s belief that Sterling is well-positioned in the current harsh economic climate, that the current environment continues to offer opportunities for Sterling, and that the Company has additional growth capacity and sees opportunities to expand its banking relationships, and other statements regarding matters that are not historical facts, are “forward-looking statements” as defined in the Securities Exchange Act of 1934. These statements are not historical facts but instead are subject to numerous assumptions, risks and uncertainties, and represent only the Company’s belief regarding future events, many of which, by their nature, are inherently uncertain and outside its control. Any forward-looking statements the Company may make speak only as of the date on which such statements are made. The Company’s actual results and financial position may differ materially from the anticipated results and financial condition indicated in or implied by these forward-looking statements. For a discussion of some of the risks and important factors that could affect the Company’s future results and financial condition, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Forward-Looking Statements and Factors that Could Affect Future Results” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
OPERATING HIGHLIGHTS (1)
Interest income	$	29,980		$	31,237		$	89,462		$	90,272
Interest expense		8,280			12,142			26,455			35,466
Provision for loan losses		1,950			2,125			6,100			4,453
Noninterest income		7,243			7,767			24,487			25,865
Noninterest expenses		21,677			19,371			62,973			59,103
Income from continuing operations, before income taxes		5,316			5,366			18,421			17,115
Provision for income taxes		1,531			1,525			6,464			5,911
Income from continuing operations		3,785			3,841			11,957			11,204
Loss from discontinued operations, net of income taxes		0			(774	)		0			(795	)
Net income		3,785			3,067			11,957			10,409
Net income per average common share:
Basic		0.21			0.17			0.67			0.57
Diluted		0.21			0.17			0.66			0.56
Income from continuing operations per average common share:
Basic		0.21			0.21			0.67			0.61
Diluted		0.21			0.21			0.66			0.60
Cash dividends declared		0.19			0.19			0.57			0.57
Common shares outstanding:
Period end		18,043			17,803			18,043			17,803
Average Basic		18,016			17,910			17,973			18,330
Average Diluted		18,227			18,222			18,219			18,750
Return on average assets (2)		0.71	%		0.80	%		0.77	%		0.80	%
Return on average tangible equity (3)		16.24	%		15.95	%		16.64	%		14.58	%
Return on average stated equity (4)		13.03	%		12.87	%		13.44	%		11.92	%
Net interest spread, tax-equivalent basis		3.93	%		3.41	%		3.95	%		3.41	%
Net interest margin, tax-equivalent basis		4.46	%		4.41	%		4.53	%		4.44	%

(1)	Unless otherwise indicated, all amounts and ratios are presented based on continuing operations.
(2)	Calculated by dividing income from continuing operations by average assets from continuing operations.
(3)	Average tangible equity represents average shareholders’ equity less average goodwill. Calculated by dividing income from continuing operations by average tangible equity.
(4)	Average stated equity is equal to average shareholders’ equity. Calculated by dividing income from continuing operations by average stated equity.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
BALANCE SHEET HIGHLIGHTS (1)
Period End Balances
Investment securities	$	734,410		$	608,928		$	734,410		$	608,928
Loans held for sale		15,987			32,896			15,987			32,896
Loans held in portfolio, net of unearned discount		1,211,125			1,178,198			1,211,125			1,178,198
Total earning assets		1,965,296			1,823,036			1,965,296			1,823,036
Allowance for loan losses		15,733			15,039			15,733			15,039
Total assets		2,117,089			1,980,739			2,117,089			1,980,739
Demand deposits		480,243			490,195			480,243			490,195
Savings, NOW and money market deposits		599,737			542,466			599,737			542,466
Time deposits		363,353			534,176			363,353			534,176
Customer repurchase agreements		55,022			62,564			55,022			62,564
Other short-term borrowings		224,490			98,074			224,490			98,074
Long-term borrowings		175,774			35,774			175,774			35,774
Shareholders’ equity (2)		118,344			119,935			118,344			119,935
Average Balances
Investment securities	$	769,255		$	575,309		$	757,040		$	569,873
Loans held for sale		18,226			51,405			24,247			47,682
Loans held in portfolio, net of unearned discount		1,175,540			1,081,629			1,126,365			1,049,625
Total earning assets		1,967,354			1,728,057			1,911,197			1,700,773
Total assets		2,129,316			1,902,564			2,077,704			1,867,138
Demand deposits		453,098			455,093			446,256			444,828
Savings, NOW and money market deposits		576,677			542,930			504,508			493,967
Time deposits		399,994			550,407			486,285			559,798
Customer repurchase agreements		89,900			68,396			87,192			79,747
Other short-term borrowings		210,808			40,141			175,302			33,615
Long-term borrowings		181,644			35,774			159,351			39,620
Shareholders’ equity (2)		115,602			118,427			118,863			125,631
ASSET QUALITY HIGHLIGHTS (1)
Period End
Net charge-offs	$	1,361		$	2,125		$	4,470		$	4,606
Nonperforming loans		6,850			6,216			6,850			6,216
Other real estate owned		1,991			1,826			1,991			1,826
Nonperforming assets		8,841			8,042			8,841			8,042
Nonperforming loans/loans (3)		0.56	%		0.51	%		0.56	%		0.51	%
Nonperforming assets/assets		0.42	%		0.41	%		0.42	%		0.41	%
Allowance for loan losses/loans (4)		1.30	%		1.28	%		1.30	%		1.28	%
Allowance for loan losses/ nonperforming loans		229.68	%		241.94	%		229.68	%		241.94	%
Capital Ratios (2)
Tier 1 risk based		9.50	%		9.66	%		9.50	%		9.66	%
Total risk based		10.62	%		10.77	%		10.62	%		10.77	%
Leverage		6.42	%		7.07	%		6.42	%		7.07	%
Book value per common share (2)	$	6.56		$	6.74		$	6.56		$	6.74

(1)	Unless otherwise indicated, all amounts and ratios are presented based on continuing operations.
(2)	Includes the effects of discontinued operations.
(3)	The term “loans” includes loans held for sale and loans held in portfolio.
(4)	The term “loans” includes loans held in portfolio only.

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

	September 30,
	2008		2007
ASSETS
Cash and due from banks	$	32,251	$	49,547
Interest-bearing deposits with other banks		3,774		3,014
Investment securities
Available for sale (at estimated market value)		421,835		215,427
Held to maturity (at amortized cost)		312,575		393,501
Total investment securities		734,410		608,928
Loans held for sale		15,987		32,896
Loans held in portfolio, net of unearned discounts		1,211,125		1,178,198
Less allowance for loan losses		15,733		15,039
Loans held in portfolio, net		1,195,392		1,163,159
Customers’ liability under acceptances		886		129
Goodwill		22,901		22,901
Premises and equipment, net		10,659		11,435
Other real estate		1,991		1,826
Accrued interest receivable		8,371		6,975
Bank owned life insurance		29,893		28,767
Other assets		60,574		51,162
	$	2,117,089	$	1,980,739
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Demand	$	480,243	$	490,195
Savings, NOW and money market		599,737		542,466
Time		363,353		534,176
Total deposits		1,443,333		1,566,837
Securities sold under agreements to repurchase — customers		55,022		62,564
Securities sold under agreements to repurchase — dealers		19,515		0
Federal funds purchased		55,000		44,200
Commercial paper		12,944		28,571
Short-term borrowings — FHLB		120,000		25,000
Short-term borrowings — other		17,031		303
Long-term borrowings — FHLB		150,000		10,000
Long-term borrowings — subordinated debentures		25,774		25,774
Acceptances outstanding		886		129
Accrued expenses and other liabilities		99,240		97,426
Total liabilities		1,998,745		1,860,804
Shareholders’ equity		118,344		119,935
	$	2,117,089	$	1,980,739
MEMORANDA
Available for sale securities — amortized cost	$	433,694	$	218,733
Held to maturity securities — estimated market value		311,888		386,893
Shares outstanding
Common issued		21,962,295		21,262,170
Common in treasury		3,919,524		3,459,302

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
INTEREST INCOME
Loans	$	20,387		$	24,142		$	61,208		$	68,993
Investment securities — available for sale		5,780			2,113			16,162			5,659
Investment securities — held to maturity		3,795			4,731			12,054			14,299
Federal funds sold		7			227			8			1,230
Deposits with other banks		11			24			30			91
Total interest income		29,980			31,237			89,462			90,272
INTEREST EXPENSE
Savings, NOW and money market deposits		2,011			3,829			4,710			9,968
Time deposits		3,062			6,458			12,434			19,587
Securities sold u/a/r — customers		419			701			1,507			2,581
Securities sold u/a/r — dealers		382			0			1,115			0
Federal funds purchased		197			71			776			107
Commercial paper		100			368			412			1,073
Short-term borrowings — FHLB		469			53			995			53
Short-term borrowings — other		10			21			30			48
Long-term borrowings — FHLB		1,107			118			2,906			479
Long-term subordinated debentures		523			523			1,570			1,570
Total interest expense		8,280			12,142			26,455			35,466
Net interest income		21,700			19,095			63,007			54,806
Provision for loan losses		1,950			2,125			6,100			4,453
Net interest income after provision for loan losses		19,750			16,970			56,907			50,353
NONINTEREST INCOME
Accounts receivable management/ factoring commissions and other fees		4,348			4,048			11,712			11,537
Service charges on deposit accounts		1,346			1,408			4,029			4,314
Other customer related service charges and fees		682			831			2,094			2,264
Mortgage banking income		1,469			887			6,670			6,263
Trust fees		136			132			395			398
Bank owned life insurance income		289			279			852			818
Loss on sale of OREO		(58	)		(51	)		(361	)		(231	)
Securities losses		(1,177	)		(1	)		(1,684	)		(3	)
Other income		208			234			780			505
Total noninterest income		7,243			7,767			24,487			25,865
NONINTEREST EXPENSES
Salaries		9,617			8,829			28,456			26,749
Employee benefits		2,411			2,396			7,499			7,149
Total personnel expense		12,028			11,225			35,955			33,898
Occupancy and equipment expenses, net		2,919			2,606			8,702			7,953
Advertising and marketing		740			888			2,728			2,974
Professional fees		2,644			1,543			5,882			4,834
Communications		450			485			1,311			1,455
Other expenses		2,896			2,624			8,395			7,989
Total noninterest expenses		21,677			19,371			62,973			59,103
Income from continuing operations before income taxes		5,316			5,366			18,421			17,115
Provision for income taxes		1,531			1,525			6,464			5,911
Income from continuing operations		3,785			3,841			11,957			11,204
Discontinued operations:
Loss, net of income taxes		0			(774	)		0			(795	)
Net income	$	3,785		$	3,067		$	11,957		$	10,409

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

(continued)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
Average number of common shares outstanding
Basic		18,015,871		17,910,268		17,972,517		18,329,750
Diluted		18,226,811		18,221,555		18,219,375		18,749,866
Income from continuing operations, per average common share
Basic	$	0.21	$	0.21	$	0.67	$	0.61
Diluted		0.21		0.21		0.66		0.60
Net income per average common share
Basic		0.21		0.17		0.67		0.57
Diluted		0.21		0.17		0.66		0.56
Dividends per common share		0.19		0.19		0.57		0.57

NOTE: Certain reclassifications have been made to prior periods’ financial data to conform to current financial statement presentations.

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

	Three Months Ended September 30,					Nine Months Ended September 30,
	2008			2007		2008			2007
Net income	$	3,785		$	3,067	$	11,957		$	10,409
Other comprehensive income, net of tax:
Unrealized holding (losses)/gains on securities, arising during the period		(2,727	)		1,150		(6,531	)		254
Reclassification adjustment for securities losses included in net income		645			0		923			0
Amortization of:
Prior service cost		9			16		27			43
Net actuarial losses		229			243		689			608
Comprehensive income	$	1,941		$	4,476	$	7,065		$	11,314

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Balance, at beginning of period	$	119,725		$	121,913		$	121,070		$	132,263
Net income for period		3,785			3,067			11,957			10,409
Common shares issued under stock incentive plan and related tax benefits		1,672			31			7,971			808
Cash dividends-Common shares		(3,425	)		(3,378	)		(10,249	)		(10,372	)
Surrender of shares issued under incentive compensation plan		(1,569	)		0			(6,787	)		(456	)
Purchase of common shares for treasury		0			(3,107	)		0			(13,622	)
Change in net unrealized holding losses on available for sale securities		(2,727	)		1,150			(6,531	)		254
Reclassification adjustment for securities losses included in net income		645			0			923			0
Adjustment to retained earnings upon adoption of EITF Issue 06-4 effective January 1, 2008		0			0			(726	)		0
Amortization of:
Prior service cost		9			16			27			43
Net actuarial losses		229			243			689			608
Balance, at end of period	$	118,344		$	119,935		$	118,344		$	119,935

Page 11 of 15

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

	Three Months Ended
	September 30, 2008								September 30, 2007
	AVERAGE					AVERAGE			AVERAGE					AVERAGE
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
Assets
Interest-bearing deposits with other banks	$	2,920		$	11		1.51	%	$	2,486		$	24		3.80	%
Investment securities — available for sale		422,919			5,564		5.26			154,518			1,932		5.00
Investment securities — held to maturity		323,145			3,795		4.70			401,664			4,731		4.71
Investment securities — tax exempt [2]		23,191			353		6.09			19,127			298		6.18
Total investment securities		769,255			9,712		5.05			575,309			6,961		4.84
Federal funds sold		1,413			7		1.81			17,228			227		5.17
Loans, net of unearned discount [3]		1,193,766			20,387		6.99			1,133,034			24,142		8.68
Total Interest-Earning Assets [2]		1,967,354			30,117		6.19	%		1,728,057			31,354		7.31	%
Cash and due from banks		50,264								72,253
Allowance for loan losses		(16,367	)							(16,146	)
Goodwill		22,901								22,901
Other		105,164								94,296
Assets — discontinued operations		0								1,203
Total Assets	$	2,129,316							$	1,902,564
Liabilities and Shareholders’ Equity
Interest-bearing deposits
Domestic
Savings	$	17,527			14		0.33	%	$	18,705			26		0.55	%
NOW		251,271			633		1.00			241,789			1,519		2.49
Money market		307,879			1,364		1.76			282,436			2,284		3.21
Time		399,417			3,060		3.05			549,832			6,456		4.66
Foreign
Time		577			2		1.09			575			2		1.09
Total Interest-Bearing Deposits		976,671			5,073		2.07			1,093,337			10,287		3.73
Borrowings
Securities sold u/a/r — customers		89,900			419		1.85			68,396			701		4.07
Securities sold u/a/r — dealers		62,977			382		2.41			0			0		0.00
Federal funds purchased		37,717			197		2.04			6,006			71		4.66
Commercial paper		18,331			100		2.15			28,397			368		5.14
Short-term borrowings — FHLB		90,295			469		2.07			4,185			53		5.03
Short-term borrowings — other		1,488			10		3.99			1,553			21		5.10
Long-term borrowings — FHLB		155,870			1,107		2.84			10,000			118		4.70
Long-term borrowings — sub debt		25,774			523		8.37			25,774			523		8.37
Total Borrowings		482,352			3,207		2.65			144,311			1,855		5.14
Total Interest-Bearing Liabilities		1,459,023			8,280		2.26	%		1,237,648			12,142		3.90	%
Noninterest-bearing demand deposits		453,098								455,093
Other liabilities		101,593								91,267
Liabilities — discontinued operations		0								129
Total Liabilities		2,013,714								1,784,137
Shareholders’ equity		115,602								118,427
Total Liabilities and Shareholders’ Equity	$	2,129,316							$	1,902,564
Net interest income/spread [2]					21,837		3.93	%					19,212		3.41	%
Net yield on interest-earning assets							4.46	%							4.41	%
Less: Tax-equivalent adjustment					137								117
Net interest income				$	21,700							$	19,095

[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 of 15

STERLING BANCORP
Average Balance Sheets [1]

(Unaudited)
(dollars in thousands)

	Nine Months Ended
					September 30, 2008					September 30, 2007
	AVERAGE					AVERAGE			AVERAGE					AVERAGE
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
Assets
Interest-bearing deposits with other banks	$	2,952		$	30		1.34	%	$	2,732		$	91		4.46	%
Investment securities — available for sale		395,220			15,560		5.25			138,994			5,080		4.87
Investment securities — held to maturity		340,313			12,054		4.72			410,729			14,299		4.64
Investment securities — tax exempt [2]		21,507			987		6.12			20,150			951		6.31
Total investment securities		757,040			28,601		5.04			569,873			20,330		4.76
Federal funds sold		593			8		1.81			30,861			1,230		5.26
Loans, net of unearned discount [3]		1,150,612			61,208		7.46			1,097,307			68,993		8.83
Total Interest-Earning Assets [2]		1,911,197			89,847		6.45	%		1,700,773			90,644		7.34	%
Cash and due from banks		55,133								67,770
Allowance for loan losses		(15,963	)							(16,445	)
Goodwill		22,901								22,879
Other		104,436								90,950
Assets — discontinued operations		0								1,211
Total Assets	$	2,077,704							$	1,867,138
Liabilities and Shareholders’ Equity
Interest-bearing deposits
Domestic
Savings	$	18,633			48		0.34	%	$	20,244			78		0.51	%
NOW		248,112			2,001		1.08			236,569			4,489		2.54
Money market		237,763			2,661		1.50			237,154			5,401		3.05
Time		485,709			12,429		3.42			559,224			19,582		4.68
Foreign
Time		576			5		1.09			574			5		1.09
Total Interest-Bearing Deposits		990,793			17,144		2.31			1,053,765			29,555		3.75
Borrowings
Securities sold u/a/r — customers		87,192			1,507		2.31			79,747			2,581		4.33
Securities sold u/a/r — dealers		55,205			1,115		2.70			0			0		0.00
Federal funds purchased		41,976			776		2.43			2,922			107		4.84
Commercial paper		19,672			412		2.79			28,070			1,073		5.11
Short-term borrowings — FHLB		56,763			995		2.34			1,410			53		5.03
Short-term borrowings — other		1,686			30		4.08			1,213			48		5.24
Long-term borrowings — FHLB		133,577			2,906		2.90			13,846			479		4.61
Long-term borrowings — sub debt		25,774			1,570		8.37			25,774			1,570		8.38
Total Borrowings		421,845			9,311		2.95			152,982			5,911		5.19
Total Interest-Bearing Liabilities		1,412,638			26,455		2.50	%		1,206,747			35,466		3.93	%
Noninterest-bearing demand deposits		446,256								444,828
Other liabilities		99,947								89,694
Liabilities — discontinued operations		0								238
Total Liabilities		1,958,841								1,741,507
Shareholders’ equity		118,863								125,631
Total Liabilities and Shareholders’ Equity	$	2,077,704							$	1,867,138
Net interest income/spread [2]					63,392		3.95	%					55,178		3.41	%
Net yield on interest-earning assets							4.53	%							4.44	%
Less: Tax-equivalent adjustment					385								372
Net interest income				$	63,007							$	54,806

[1]	The average balances of assets, liabilities and shareholders’ equity are computed on the basis of daily averages. Average rates are presented on a tax-equivalent basis. Certain reclassifications have been made to prior period amounts to conform to current presentation.
[2]	Interest and/or average rates are presented on a tax-equivalent basis.
[3]	Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding and income has been included to the extent earned.

Page 13 of 15

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

	Increase/(Decrease)
	Three Months Ended
	September 30, 2008
	Volume			Rate			Net [2]
INTEREST INCOME
Interest-bearing deposits with other banks	$	3		$	(16	)	$	(13	)
Investment securities — available for sale		3,527			105			3,632
Investment securities — held to maturity		(926	)		(10	)		(936	)
Investment securities — tax exempt		59			(4	)		55
Total investment securities		2,660			91			2,751
Federal funds sold		(129	)		(91	)		(220	)
Loans, net of unearned discounts [3]		1.273			(5.028	)		(3.755	)
TOTAL INTEREST INCOME	$	3,807		$	(5,044	)	$	(1,237	)
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	(2	)	$	(10	)	$	(12	)
NOW		58			(944	)		(886	)
Money market		190			(1,110	)		(920	)
Time		(1,501	)		(1,895	)		(3,396	)
Foreign
Time		0			0			0
Total interest-bearing deposits		(1,255	)		(3,959	)		(5,214	)
Borrowings
Securities sold under agreements to repurchase — customers		177			(459	)		(282	)
Securities sold under agreements to repurchase — dealers		382			0			382
Federal funds purchased		186			(60	)		126
Commercial paper		(101	)		(167	)		(268	)
Short-term borrowings — FHLB		465			(49	)		416
Short-term borrowings — other		(2	)		(9	)		(11	)
Long-term borrowings — FHLB		1,054			(65	)		989
Long-term borrowings — subordinated debentures		0			0			0
Total borrowings		2,161			(809	)		1,352
TOTAL INTEREST EXPENSE	$	906		$	(4,768	)	$	(3,862	)
NET INTEREST INCOME	$	2,901		$	(276	)	$	2,625

[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 14 of 15

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

	Increase/(Decrease)
	Nine Months Ended
	September 30, 2008
	Volume			Rate			Net [2]
INTEREST INCOME
Interest-bearing deposits with other banks	$	7		$	(68	)	$	(61	)
Investment securities — available for sale		10,056			424			10,480
Investment securities — held to maturity		(2,484	)		239			(2,245	)
Investment securities — tax exempt		40			(4	)		36
Total investment securities		7,612			659			8,271
Federal funds sold		(730	)		(492	)		(1,222	)
Loans, net of unearned discounts [3]		3.714			(11.499	)		(7.785	)
TOTAL INTEREST INCOME	$	10,603		$	(11,400	)	$	(797	)
INTEREST EXPENSE
Interest-bearing deposits
Domestic
Savings	$	(6	)	$	(24	)	$	(30	)
NOW		225			(2,713	)		(2,488	)
Money market		34			(2,774	)		(2,740	)
Time		(2,295	)		(4,858	)		(7,153	)
Foreign
Time		0			0			0
Total interest-bearing deposits		(2,042	)		(10,369	)		(12,411	)
Borrowings
Securities sold under agreements to repurchase — customers		231			(1,305	)		(1,074	)
Securities sold under agreements to repurchase — dealers		1,115			0			1,115
Federal funds purchased		747			(78	)		669
Commercial paper		(260	)		(401	)		(661	)
Short-term borrowings — FHLB		985			(43	)		942
Short-term borrowings — other		3			(21	)		(18	)
Long-term borrowings — FHLB		2,668			(241	)		2,427
Long-term borrowings — subordinated debentures		3			(3	)		0
Total borrowings		5,492			(2,092	)		3,400
TOTAL INTEREST EXPENSE	$	3,450		$	(12,461	)	$	(9,011	)
NET INTEREST INCOME	$	7,153		$	1,061		$	8,214

[1]	This table is presented on a tax-equivalent basis.
[2]	Changes in interest income and interest expense due to a combination of both volume and rate have been allocated to the change due to volume and the change due to rate in proportion to the relationship of change due solely to each.
[3]	Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts outstanding, and income has been included to the extent earned.

Page 15 of 15