Q3 2018 Summary

• Net income of $15.7 million, up 30% from Q3 2017, and down 1.5% from Q2 2018
• Fully diluted EPS of $0.30, up 11% from Q3 2017, and equivalent to Q2 2018
• Third quarter ROAA of 1.98% and ROATCE of 20.11%, and YTD 2018 ROAA of 2.06% and ROATCE of 21.20%
• Revenue, net of interest expense, was $35.0 million, up 11% from Q3 2017, and down 3% from Q2 2018
• Total loan originations of $419.2 million, down 15% from Q3 2017, and down 3% from Q2 2018
• Total gross loans, including loans held for investment and loans held for sale, of $2.93 billion, a 21% increase from Q3 2017, and a 10% annualized increase from Q2 2018
• Total deposits of $2.41 billion, a 15% increase from Q3 2017, and a 12% annualized increase from Q2 2018
• Net interest margin of 3.95%, compared to 4.15% in Q3 2017 and 3.96% in Q2 2018

SOUTHFIELD, Mich.--(BUSINESS WIRE)--Oct. 29, 2018-- Sterling Bancorp, Inc. (NASDAQ: SBT) (the “Company”), the holding company of Sterling Bank and Trust, F.S.B. (the “Bank”), today reported unaudited financial results for its third quarter ended September 30, 2018.

For the third quarter 2018, net income totaled $15.7 million, or $0.30 per diluted share, based on 53.0 million weighted average diluted shares outstanding. This compares to second quarter 2018 net income of $16.0 million, or $0.30 per diluted share, based on 53.0 million weighted average diluted shares outstanding. For the third quarter of 2017, net income totaled $12.1 million, or $0.27 per diluted share, based on 45.3 million weighted average diluted shares outstanding.

“Our strong business development platform and highly efficient operations produced another quarter of solid year-over-year earnings growth and a superior level of profitability,” said Gary Judd, Chairman and CEO. “We are pleased with the stability in our net interest margin, as the increase in our yield on earning assets is largely offsetting the increase in deposit costs. While the San Francisco housing market is slowing down a bit, we are generating a larger contribution to loan production from our offices in Los Angeles, New York and Seattle. We believe that our success in building our presence in these newer markets will enable us to continue to drive growth in loans, deposits and earnings in the future.”

Financial Highlights (Unaudited)
		At or for the Three Months Ended
(dollars in thousands, except per share data)		September 30, 2018				June 30, 2018				September 30, 2017
Net income		$	15,741			$	15,982			$	12,092
Income per share, diluted		$	0.30			$	0.30			$	0.27
Net interest income (1)		$	30,798			$	29,857			$	26,144
Net interest margin (1)			3.95	%			3.96	%			4.15	%
Non-interest income (1)		$	4,233			$	6,297			$	5,504
Non-interest expense		$	12,531			$	12,621			$	10,335
Loans, net of allowance for loan losses		$	2,796,150			$	2,816,156			$	2,366,193
Total deposits		$	2,412,071			$	2,340,605			$	2,099,462
Nonperforming loans		$	356			$	641			$	897
Allowance for loan losses to total loans			0.74	%			0.72	%			0.72	%
Allowance for loan losses to nonperforming loans			5,833	%			3,167	%			1,916	%
Provision for loan losses		$	423			$	1,120			$	900
Net recoveries		$	(42	)		$	(48	)		$	(43	)
Return on average assets			1.98	%			2.08	%			1.87	%
Return on average shareholders' equity			20.07	%			21.31	%			26.80	%
Efficiency ratio			35.77	%			34.91	%			32.66	%

(1) In the second quarter of 2018, the Company corrected the classification of commitment fees, net of direct loan origination costs, earned on construction loans and other lines of credit to interest income which were previously reported within non-interest income. As a result, the three months ended September 30, 2017 has been adjusted from the amounts previously reported to correct the classification error. The amount of the adjustment was a decrease to non-interest income and an increase to interest income of $648 and an increase to net interest margin of 11 basis points for the three months ended September 30, 2017. There was no change to the reported net income or income per share, basic and diluted, as previously reported as a result of this immaterial correction.

Operating Results for the Third Quarter 2018

Revenue

Revenue, net of interest expense, was $35.0 million for the third quarter of 2018, a decrease of 3% from the second quarter of 2018. The decrease was attributable to a $2.1 million decrease in non-interest income, partially offset by a $0.9 million increase in net interest income.

Relative to the third quarter of 2017, revenue, net of interest expense, increased 11% from $31.6 million. The increase from the third quarter of 2017 was attributable to a $4.7 million increase in net interest income, partially offset by a $1.3 million decrease in non-interest income.

Net Interest Income

Net interest income for the third quarter of 2018 was $30.8 million, an increase of 3% from $29.9 million for the second quarter of 2018. The increase in net interest income from the second quarter was primarily attributable to a $103.3 million increase in average interest earning assets.

Relative to the third quarter of 2017, net interest income increased 18% from $26.1 million. The increase in net interest income from the third quarter of 2017 was primarily driven by a $595.5 million increase in average interest earning assets.

Net Interest Margin

Net interest margin for the third quarter of 2018 was 3.95%, down 1 basis point from the net interest margin of 3.96% for the second quarter of 2018. Net interest margin was impacted by a 15 basis point increase in the average cost of interest-bearing liabilities, partially offset by a 13 basis point increase in the average yield on interest earning assets.

Relative to the third quarter of 2017, the net interest margin decreased from 4.15%, primarily due to a 44basis point increase in the average cost of interest-bearing liabilities, partially offset by a 16 basis point increase in the average yield on interest earning assets.

Non-interest Income

Non-interest income for the third quarter of 2018 was $4.2 million, a decrease from $6.3 million for the second quarter of 2018. The decrease was the result of a $2.1 million decrease in the gain on sale of loans due to the amount of residential mortgages sold in the secondary market as compared to the prior period.

Non-interest income decreased $1.3 million from $5.5 million in the third quarter of 2017, primarily as a result of a $1.4 million decrease in the gain on sale of loans due to the amount of residential mortgages sold in the secondary market as compared to the prior year period.

Non-interest Expense

Non-interest expense for the third quarter of 2018 was $12.5 million, a decrease from $12.6 million for the second quarter of 2018. The decrease was primarily attributable to salary expense and FDIC insurance assessments, partially offset by higher occupancy and equipment, professional fees and advertising and marketing costs.

Relative to the third quarter of 2017, non-interest expense increased 21% from $10.3 million. The increase was primarily due to an increase in personnel expenses and occupancy and equipment costs required to support new offices and the growth in the Company’s operations.

The Company’s operating efficiency ratio remained strong at 35.8% in the third quarter of 2018, compared with 34.9% in the second quarter of 2018 and 32.7% in the third quarter of 2017.

Income Taxes

The effective tax rate for both the three months ended September 30, 2018 and June 30, 2018 was 29%, compared with 41% for the three months ended September 30, 2017. The decrease in the effective tax rate in the third quarter of 2018 as compared to third quarter of 2017 was attributable to the reduction in the federal corporate tax rate that was effective January 1, 2018.

Loan Portfolio

Total gross loans, which includes those held for investment and held for sale, were $2.93 billion at September 30, 2018, compared with $2.86 billion at June 30, 2018. Contributing to the increase was a $92.2 million increase in residential mortgage loans held for sale and a $7.8 million increase in commercial real estate and construction loans, partially offset by a $25.9 million decrease in residential mortgage loans held for investment.

During the third quarter of 2018, the Company originated $419.1 million in loans, which included $353.5 million in residential mortgage loans, $21.9 million in commercial real estate loans, $38.3 million in construction loans and $5.4 million in commercial and industrial loans.

Deposits

Total deposits were $2.41 billion at September 30, 2018, compared with $2.34 billion at June 30, 2018. The increase was attributable to a $75.9 million increase in time deposits, a $5.6 million increase in non-interest bearing demand deposits and an $18.6 million increase in money market, savings and NOW deposits, partially offset by a $28.9 million decrease in brokered deposits.

Credit Quality

Nonperforming assets totaled $6.0 million, or 0.19% of total assets, at September 30, 2018, compared with $3.6 million, or 0.12% of total assets, at June, 2018. The increase was primarily due to the addition of a $2.8 million construction loan to troubled debt restructurings.

Recoveries for the third quarter of 2018 were $42,000 and there were no charge offs during the quarter.

The Company recorded a provision for loan losses of $0.4 million for the third quarter of 2018, compared to $1.1 million for the second quarter of 2018.

The allowance for loan losses was 0.74% of total loans and 5,833% of nonperforming loans at September 30, 2018, compared with 0.72% and 3,167%, respectively, at June 30, 2018.

Capital

At September 30, 2018, the Bank exceeded all regulatory capital requirements under Basel III and was considered to be a ‘‘well-capitalized’’ financial institution, as summarized in the following tables:

							Well Capitalized				Company Actual at September 30, 2018
					Total adjusted capital to risk-weighted assets			N/A				21.00	%
					Tier 1 (core) capital to risk-weighted assets			N/A				16.55	%
					Tier 1 (core) capital to adjusted tangible assets			N/A				10.04	%
					Common Tier 1 (CET 1)			N/A				16.55	%
							Well Capitalized				Sterling Bank Actual at September 30, 2018
					Total adjusted capital to risk-weighted assets			10.00	%			15.99	%
					Tier 1 (core) capital to risk-weighted assets			8.00	%			14.91	%
					Tier 1 (core) capital to adjusted tangible assets			5.00	%			9.04	%
					Common Tier 1 (CET 1)			6.50	%			14.91	%

Conference Call and Webcast

Management will host a conference call today at 5:00 p.m. Eastern Time to discuss the Company's financial results. The conference call number for U.S. participants is (877) 270-2148 and the conference call number for participants outside the U.S. is (412) 902-6510. Additionally, interested parties can listen to a live webcast of the call in the "Investor Relations" section of the Company's website at www.sterlingbank.com. An archived version of the webcast will be available in the same location shortly after the live call has ended.

A replay of the conference call may be accessed through November 12, 2018 by dialing (877) 344-7529, using conference ID number 10124704.

About Sterling Bancorp, Inc.

Sterling Bancorp, Inc. is a unitary thrift holding company. Its wholly owned subsidiary, Sterling Bank and Trust, F.S.B., has primary branch operations in San Francisco and Los Angeles, California, New York City and the greater Seattle market. Sterling offers a broad range of loan products to the residential and commercial markets, as well as retail and business banking services. Sterling also has an operations center and a branch in Southfield, Michigan. In March 2018, Sterling was named as the top performing community bank in the United States with total assets between $1 billion and $10 billion in 2017 by SNL/S&P Global Market Intelligence. For additional information, please visit the Company’s website at www.sterlingbank.com.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures include “Average Tangible Common Equity,” and “Return on Average Tangible Common Equity,” each of which are common metrics in the banking industry. Our management uses these non-GAAP financial measures to assess the Company’s capital strength and business performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore this presentation may not be comparable to other similarly titled measures as presented by other companies. For further information see “Return on Average Tangible Common Equity Reconciliations (non-GAAP)” in the Financial Data section that follows.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements," within the meaning of the federal securities laws, including but not limited to statements about the Company’s expected loan production, operating expenses and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including changes in the financial markets; changes in business plans as circumstances warrant; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe" or "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Sterling Bancorp, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(dollars in thousands)		September 30, 2018				June 30, 2018				% change			December 31, 2017				% change			September 30, 2017				% change
Assets
Cash and due from banks		$	48,879			$	36,820			33	%		$	40,147			22	%		$	36,191			35	%
Investment securities			142,749				142,648			0	%			126,848			13	%			109,944			30	%
Mortgage loans held for sale			113,805				21,641			426	%			112,866			1	%			34,312			232	%
Loans, net of allowance for loan losses of $20,765, $20,300, $18,457 and $17,189			2,796,150				2,816,156			(1	)%			2,594,357			8	%			2,366,193			18	%
Accrued interest receivable			13,087				12,396			6	%			11,493			14	%			10,115			29	%
Mortgage servicing rights, net			9,411				9,295			1	%			6,496			45	%			6,455			46	%
Leasehold improvements and equipment, net			9,040				8,413			7	%			7,043			28	%			6,737			34	%
Federal Home Loan Bank stock, at cost			22,950				22,950			0	%			22,950			0	%			22,950			0	%
Cash surrender value of bank-owned life insurance			31,146				30,991			1	%			30,680			2	%			30,518			2	%
Deferred tax asset, net			7,002				5,905			19	%			6,847			2	%			9,639			(27	)%
Other assets			2,744				4,124			(33	)%			2,231			23	%			2,866			(4	)%
Total assets		$	3,196,963			$	3,111,339			3	%		$	2,961,958			8	%		$	2,635,920			21	%
Liabilities
Noninterest-bearing deposits		$	79,432			$	73,791			8	%		$	73,682			8	%		$	70,572			13	%
Interest-bearing deposits			2,332,639				2,266,814			3	%			2,171,428			7	%			2,028,890			15	%
Total deposits			2,412,071				2,340,605			3	%			2,245,110			7	%			2,099,462			15	%
Federal Home Loan Bank borrowings			335,000				350,000			(4	)%			338,000			(1	)%			234,283			43	%
Subordinated notes, net			64,993				64,958			0	%			64,889			0	%			64,841			0	%
Accrued expenses and other liabilities			65,456				51,666			27	%			40,661			61	%			52,862			24	%
Total liabilities			2,877,520				2,807,229			3	%			2,688,660			7	%			2,451,448			17	%
Shareholders’ Equity
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding			-				-			-				-			-				-			-
Common stock, voting, no par value, authorized 500,000,000 shares at September 30, 2018, June 30, 2018 and December 31, 2017, and 490,000,000 at September 30, 2017; issued and outstanding 53,012,283 shares at September 30, 2018, 53,002,963 shares at June 30, 2018, 52,963,308 shares at December 31, 2017, and 40,199,000 shares at September 30, 2017			111,238				111,238			0	%			111,238			(0	)%			22,863			387	%
Common stock, non-voting, no par value, authorized 10,000,000 shares, issued and outstanding 5,072,000 shares at September 30, 2017			-				-			-				-			-				2,885			N/M
Additional paid-in capital			12,604				12,501			1	%			12,416			2	%			12,416			2	%
Retained earnings			195,649				180,438			8	%			149,816			31	%			146,339			34	%
Accumulated other comprehensive loss			(48	)			(67	)		N/M				(172	)		N/M				(31	)		N/M
Total shareholders’ equity			319,443				304,110			5	%			273,298			17	%			184,472			73	%
Total liabilities and shareholders’ equity		$	3,196,963			$	3,111,339			3	%		$	2,961,958			8	%		$	2,635,920			21	%
N/M- not meaningful

Sterling Bancorp, Inc.
Condensed Consolidated Statements of Income (Unaudited)
		Three Months Ended															Nine Months Ended
(dollars in thousands, except per share amounts)		September 30, 2018			June 30, 2018			% change			September 30, 2017			% change			September 30, 2018			September 30, 2017			% change
Interest income:
Interest and fees on loans (1)		$	40,772		$	38,580		6	%		$	32,373		26	%		$	115,752		$	88,116		31	%
Interest and dividends on investment securities			958			842		14	%			502		91	%			2,619			1,302		101	%
Other interest			166			119		39	%			55		202	%			399			103		287	%
Total interest income (1)			41,896			39,541		6	%			32,930		27	%			118,770			89,521		33	%
Interest expense:
Interest on deposits			8,628			7,179		20	%			4,375		97	%			22,396			11,686		92	%
Interest on Federal Home Loan Bank borrowings			1,297			1,334		(3	)%			1,344		(3	)%			3,464			3,044		14	%
Interest on subordinated notes and other			1,173			1,171		0	%			1,067		10	%			3,516			2,883		22	%
Total interest expense			11,098			9,684		15	%			6,786		64	%			29,376			17,613		67	%
Net interest income (1)			30,798			29,857		3	%			26,144		18	%			89,394			71,908		24	%
Provision for loan losses			423			1,120		(62	)%			900		(53	)%			2,184			2,100		4	%
Net interest income after provision for loan losses (1)			30,375			28,737		6	%			25,244		20	%			87,210			69,808		25	%
Non-interest income:
Service charges and fees (1)			100			92		9	%			65		54	%			266			202		32	%
Investment management and advisory fees			445			500		(11	)%			595		(25	)%			1,568			1,736		(10	)%
Net gain on sale of loans			3,005			5,096		(41	)%			4,377		(31	)%			12,107			8,813		37	%
Other income			683			609		12	%			467		46	%			2,082			1,509		38	%
Total non-interest income (1)			4,233			6,297		(33	)%			5,504		(23	)%			16,023			12,260		31	%
Non-interest expense:
Salaries and employee benefits			6,973			7,229		(4	)%			6,211		12	%			20,851			16,898		23	%
Occupancy and equipment			1,760			1,610		9	%			1,549		14	%			4,916			4,354		13	%
Professional fees			898			824		9	%			344		161	%			2,344			1,008		133	%
Advertising and marketing			470			351		34	%			233		102	%			1,170			655		79	%
FDIC assessments			186			474		(61	)%			335		(44	)%			1,203			841		43	%
Data processing			311			295		5	%			281		11	%			894			767		17	%
Other			1,933			1,838		5	%			1,382		40	%			5,277			4,295		23	%
Total non-interest expense			12,531			12,621		(1	)%			10,335		21	%			36,655			28,818		27	%
Income before income taxes			22,077			22,413		(1	)%			20,413		8	%			66,578			53,250		25	%
Income tax expense			6,336			6,431		(1	)%			8,321		(24	)%			19,106			21,804		(12	)%
Net income		$	15,741		$	15,982		(2	)%		$	12,092		30	%		$	47,472		$	31,446		51	%
Income per share, basic and diluted		$	0.30		$	0.30					$	0.27					$	0.90		$	0.69
Weighted average common shares outstanding:
Basic			52,963,308			52,963,308						45,271,000						52,963,308			45,271,000
Diluted			52,966,593			52,965,365						45,271,000						52,965,089			45,271,000

(1) In the second quarter of 2018, the Company corrected the classification of commitment fees, net of direct loan origination costs, earned on construction loans and other lines of credit to commercial customers in its condensed consolidated statements of income to the financial statement caption, interest and fees on loans, which were previously reported in service charges and fees. As a result, the three and nine months ended September 30, 2017 have been adjusted from the amounts previously reported to correct the classification error. The amount of the adjustment was a decrease to service charges and fees, and increase to interest and fees on loans of $648 and $1,510 for the three and nine months ended September 30, 2017, respectively. There was no change to the reported net income or income per share, basic and diluted, as previously reported as a result of this immaterial correction.

Sterling Bancorp, Inc.
Select Financial Data (Unaudited)
		As of and for the Three Months Ended									As of and for the Nine Months Ended
		September 30,			June 30,			September 30,			September 30,			September 30,
Performance Ratios:		2018			2018			2017			2018			2017
Return on average assets		1.98	%		2.08	%		1.87	%		2.06	%		1.78	%
Return on average shareholders' equity		20.07	%		21.31	%		26.80	%		21.14	%		24.11	%
Return on average tangible common equity		20.11	%		21.36	%		26.96	%		21.20	%		24.28	%
Yield on earning assets (1)		5.38	%		5.25	%		5.22	%		5.26	%		5.19	%
Cost of average interest-bearing liabilities		1.62	%		1.47	%		1.18	%		1.49	%		1.13	%
Net interest spread (1)		3.76	%		3.78	%		4.04	%		3.77	%		4.06	%
Net interest margin (1)		3.95	%		3.96	%		4.15	%		3.96	%		4.17	%
Efficiency ratio (2)		35.77	%		34.91	%		32.66	%		34.77	%		34.24	%

(1) Refer to footnote to Condensed Consolidated Statements of Income table.
(2) Efficiency Ratio is computed as the ratio of non-interest expense divided by the sum of net interest income and non-interest income.

Sterling Bancorp, Inc.
Yield Analysis and Net Interest Income (Unaudited)
		Three Months Ended
		September 30, 2018									June 30, 2018									September 30, 2017
(dollars in thousands)		Average Balance			Interest			Average Yield/ Rate			Average Balance			Interest			Average Yield/ Rate			Average Balance			Interest			Average Yield/ Rate
Interest earning assets
Loans (1,3)		$	2,923,584		$	40,772		5.58	%		$	2,829,819		$	38,580		5.45	%		$	2,387,709		$	32,373		5.42	%
Securities, includes restricted stock			165,636			958		2.31	%			159,243			842		2.12	%			116,400			502		1.73	%
Other interest earning assets			27,604			166		2.41	%			24,496			119		1.94	%			17,224			55		1.28	%
Total interest earning assets (3)		$	3,116,824		$	41,896		5.38	%		$	3,013,558		$	39,541		5.25	%		$	2,521,333		$	32,930		5.22	%
Interest-bearing liabilities
Money Market, Savings, NOW		$	1,539,304		$	5,181		1.34	%		$	1,515,912		$	4,468		1.18	%		$	1,382,084		$	3,109		0.89	%
Time deposits			796,197			3,447		1.72	%			715,863			2,711		1.52	%			433,345			1,266		1.16	%
Total interest-bearing deposits			2,335,501			8,628		1.47	%			2,231,775			7,179		1.29	%			1,815,429			4,375		0.96	%
FHLB borrowings			324,795			1,297		1.56	%			351,846			1,334		1.50	%			412,796			1,344		1.27	%
Subordinated debt			64,970			1,173		7.22	%			64,935			1,171		7.21	%			57,462			1,067		7.43	%
Total borrowings			389,765			2,470		2.48	%			416,781			2,505		2.38	%			470,258			2,411		2.01	%
Total interest-bearing liabilities		$	2,725,266			11,098		1.62	%		$	2,648,556			9,684		1.47	%		$	2,285,687			6,786		1.18	%
Net interest income and spread (2,3)					$	30,798		3.76	%					$	29,857		3.78	%					$	26,144		4.04	%
Net interest margin (2,3)								3.95	%								3.96	%								4.15	%
		Nine Months Ended
		September 30, 2018									September 30, 2017
(dollars in thousands)		Average Balance			Interest			Average Yield/ Rate			Average Balance			Interest			Average Yield/ Rate
Interest earning assets
Loans (1,3)		$	2,829,749		$	115,752		5.45	%		$	2,179,552		$	88,116		5.39	%
Securities, includes restricted stock			155,586			2,619		2.24	%			107,437			1,302		1.62	%
Other interest earning assets			25,599			399		2.08	%			12,852			103		1.07	%
Total interest earning assets (3)		$	3,010,934		$	118,770		5.26	%		$	2,299,841		$	89,521		5.19	%
Interest-bearing liabilities
Money Market, Savings, NOW		$	1,526,935		$	13,783		1.21	%		$	1,296,311		$	8,331		0.86	%
Time deposits			739,626			8,613		1.56	%			413,446			3,355		1.08	%
Total interest-bearing deposits			2,266,561			22,396		1.32	%			1,709,757			11,686		0.91	%
FHLB borrowings			312,140			3,464		1.46	%			318,407			3,044		1.28	%
Subordinated debt			64,935			3,516		7.22	%			52,095			2,883		7.38	%
Total borrowings			377,075			6,980		2.44	%			370,502			5,927		2.13	%
Total interest-bearing liabilities		$	2,643,636			29,376		1.49	%		$	2,080,259			17,613		1.13	%
Net interest income and spread (2,3)					$	89,394		3.77	%					$	71,908		4.06	%
Net interest margin (2,3)								3.96	%								4.17	%

(1) Nonaccrual loans are included in the respective average loan balances. Income, if any, on such loans is recognized on a cash basis.

(2) Interest income does not include taxable equivalent adjustments.

(3) Refer to footnote to Condensed Consolidated Statements of Income table.

Sterling Bancorp, Inc.
Loan Composition (Unaudited)
(dollars in thousands)		September 30, 2018				June 30, 2018				% change			December 31, 2017				% change			September 30, 2017				% change
Construction		$	177,734			$	172,262			3	%		$	192,319			(8	)%		$	181,932			(2	)%
Residential real estate, mortgage			2,341,989				2,367,876			(1	)%			2,132,641			10	%			1,911,392			23	%
Commercial real estate, mortgage			252,782				250,465			1	%			247,076			2	%			242,799			4	%
Commercial and industrial loans, lines of credit			44,375				45,821			(3	)%			40,749			9	%			47,193			(6	)%
Other consumer loans			35				32			9	%			29			21	%			66			(47	)%
Total loans held for investment			2,816,915				2,836,456			(1	)%			2,612,814			8	%			2,383,382			18	%
Less: allowance for loan losses			(20,765	)			(20,300	)		2	%			(18,457	)		13	%			(17,189	)		21	%
Loans, net		$	2,796,150			$	2,816,156			(1	)%		$	2,594,357			8	%		$	2,366,193			18	%
Mortgage loans held for sale		$	113,805			$	21,641			426	%		$	112,866			1	%		$	34,312			232	%
Total gross loans		$	2,930,720			$	2,858,097			3	%		$	2,725,680			8	%		$	2,417,694			21	%

							Sterling Bancorp, Inc.
							Allowance for Loan Losses (Unaudited)
									Three Months Ended
							(dollars in thousands)		September 30, 2018			June 30, 2018				December 31, 2017				September 30, 2017
							Balance at beginning of period		$	20,300		$	19,132			$	17,189			$	16,246
							Provision for loan losses			423			1,120				600				900
							Charge offs			-			(4	)			(19	)			-
							Recoveries			42			52				687				43
							Balance at end of period		$	20,765		$	20,300			$	18,457			$	17,189

Sterling Bancorp, Inc.
Deposit Composition (Unaudited)
(dollars in thousands)		September 30, 2018			June 30, 2018			% change			December 31, 2017			% change			September 30, 2017			% change
Noninterest bearing demand deposits		$	79,432		$	73,791		8	%		$	73,682		8	%		$	70,572		13	%
Money Market, Savings and NOW			1,537,202			1,518,635		1	%			1,507,956		2	%			1,398,917		10	%
Time deposits			795,437			748,179		6	%			663,472		20	%			629,973		26	%
Total deposits		$	2,412,071		$	2,340,605		3	%		$	2,245,110		7	%		$	2,099,462		15	%

Sterling Bancorp, Inc.
Capital and Credit Quality Ratios (Unaudited)
		As of and for the Three Months Ended
(dollars in thousands)		September 30, 2018				June 30, 2018					December 31, 2017				September 30, 2017
Capital Ratios
Regulatory and Other Capital Ratios— Consolidated:
Tier 1 (core) capital to risk-weighted assets			16.55	%			16.21	%				15.53	%			11.49	%
Tier 1 (core) capital to adjusted tangible assets			10.04	%			9.88	%				9.83	%			7.12	%
Common Tier 1 (CET 1)			16.55	%			16.21	%				15.53	%			11.49	%
Total adjusted capital to risk-weighted assets			21.00	%			20.77	%				20.28	%			16.62	%
Regulatory and Other Capital Ratios—Bank:
Tier 1 (core) capital to risk-weighted assets			14.91	%			14.52	%				13.71	%			14.19	%
Tier 1 (core) capital to adjusted tangible assets			9.04	%			8.84	%				8.68	%			8.79	%
Common Tier 1 (CET 1)			14.91	%			14.52	%				13.71	%			14.19	%
Total adjusted capital to risk-weighted assets			15.99	%			15.60	%				14.76	%			15.27	%
Credit Quality Data
Nonperforming loans (1)		$	356			$	641				$	783			$	897
Nonperforming loans to total loans			0.01	%			0.02	%				0.03	%			0.04	%
Nonperforming assets (2)		$	6,035			$	3,583				$	3,777			$	3,912
Nonperforming assets to total assets			0.19	%			0.12	%				0.13	%			0.15	%
Allowance for loan losses to total loans			0.74	%			0.72	%				0.71	%			0.72	%
Allowance for loan losses to nonperforming loans			5,833	%			3,167	%				2,357	%			1,916	%
Net charge offs to average loans			(0.00	)%			(0.00	)%				(0.03	)%			(0.00	)%

(1) Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing interest.

(2) Nonperforming assets include nonperforming loans and loans modified under troubled debt restructurings and other repossessed assets.

Return on Average Tangible Common Equity Reconciliations (non-GAAP)

Average tangible common equity and return on average tangible common equity are non-GAAP disclosures. Sterling’s management uses these non-GAAP financial measures to assess the Company’s capital strength and business performance. Average tangible common equity excludes the effect of intangible assets. This non-GAAP financial measure should not be considered a substitute for those comparable measures that are similarly titled that are determined in accordance with U.S. GAAP that may be used by other companies. The following is a reconciliation of average tangible common equity to the average shareholders’ equity, its most comparable GAAP measure, as well as a calculation of return on average tangible common equity as of September 30, 2018 and 2017, and June 30, 2018.

Sterling Bancorp, Inc.
GAAP to Non-GAAP Reconciliations
		As of and for the Three Months Ended												As of and for the Nine Months Ended
(dollars in thousands)		September 30, 2018				June 30, 2018				September 30, 2017				September 30, 2018				September 30, 2018
Net Income		$	15,741			$	15,982			$	12,092			$	47,472			$	31,446
Average shareholders' equity			313,697				299,988				180,475				299,370				173,893
Adjustment
Customer-related intangible			(638	)			(750	)			(1,068	)			(749	)			(1,181	)
Average tangible common equity		$	313,059			$	299,238			$	179,407			$	298,621			$	172,712
Return on average tangible common equity*			20.11	%			21.36	%			26.96	%			21.20	%			24.28	%
*Annualized

View source version on businesswire.com: https://www.businesswire.com/news/home/20181029005724/en/

Source: Sterling Bancorp, Inc.

Financial Profiles, Inc.
Allyson Pooley
310-622-8230
Larry Clark
310-622-8223
SBT@finprofiles.com