<PAGE>   1
                                    Form 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


                               
For Quarter Ended              September 30, 1995 
                 ---------------------------------------------------------------

                                    
Commission file number              1-5273-1
                      ----------------------------------------------------------

                                Sterling Bancorp
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           New York                                             13-2565216
--------------------------------------------------------------------------------
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                            Identification No.)


540 Madison Avenue, New York, N.Y.                              10022-3299
--------------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip Code)


                                  212-826-8000
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


                                       N/A
--------------------------------------------------------------------------------
             (Former name, former address and former fiscal year, if
              changed since last report.)


        Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes   x  .  No     .
    -----     -----

        As of September 30, 1995 there were outstanding 6,346,511 shares of
common stock, $1.00 par value, the registrant's only class of common shares
outstanding.


<PAGE>   2




                                STERLING BANCORP

<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION                                                  Page
<S>                                                                           <C>
        Item 1. Financial Statements

                Consolidated Financial Statements                              3
                Notes to Consolidated Financial Statements                     7

        Item 2. Management's Discussion and Analysis of Financial
                      Condition and Results of Operations
                Business                                                       8
                Financial Condition                                            8
                Asset/Liability Management                                    10
                Securities                                                    12
                Credit Risk                                                   12
                Results of Operations                                         13
                Average Balance Sheets                                        17
                Rate/Volume Analysis                                          19
                Interest Rate Sensitivity                                     21
                Risk-Based Capital Components and Ratios                      22


PART II OTHER INFORMATION

        Item 6.  Exhibits and Reports on Form 8-K                             23


SIGNATURES                                                                    23

EXHIBIT INDEX                                                                 24

        Exhibit 11 Computation of Per Share Earnings                          25
        Exhibit 27 Financial Data Schedule                                    26
</TABLE>


                                       2
<PAGE>   3



                        STERLING BANCORP AND SUBSIDIARIES

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                             September 30,          December 31,
ASSETS                                                                                           1995                   1994
                                                                                             ------------           ------------
<S>                                                                                          <C>                    <C>
Cash and due from banks                                                                      $ 35,846,308           $ 39,224,764
Interest-bearing deposits with other banks                                                      3,000,000              2,970,000
Federal funds sold                                                                              5,000,000              8,000,000
Securities
   Available for sale                                                                          67,180,190             67,335,889
   Held to maturity (market value
     $227,385,063 and $227,248,000, respectively)                                             231,319,017            244,445,988
                                                                                             ------------           ------------
            Total securities                                                                  298,499,207            311,781,877
                                                                                             ------------           ------------

Loans, net of unearned discounts                                                              364,712,709            312,769,179
Less allowance for possible loan losses                                                         5,233,478              4,135,810
                                                                                             ------------           ------------
            Loans, net                                                                        359,479,231            308,633,369
                                                                                             ------------           ------------
Customers' liability under acceptances                                                          2,367,265                624,083
Excess cost over equity in net assets of the
   banking subsidiary                                                                          21,158,440             21,158,440
Premises and equipment, net                                                                     3,068,279              3,423,320
Other assets                                                                                   11,483,392             10,819,866
                                                                                             ------------           ------------
                                                                                             $739,902,122           $706,635,719
                                                                                             ============           ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
   Noninterest-bearing deposits                                                              $166,122,261           $174,897,143
   Interest-bearing deposits                                                                  325,031,636            342,405,372
                                                                                             ------------           ------------
            Total deposits                                                                    491,153,897            517,302,515
Securities sold under repurchase agreements                                                    51,574,877             44,050,836
Commercial paper                                                                               25,296,400             14,672,800
Other short-term borrowings                                                                    27,724,686              7,104,224
Acceptances outstanding                                                                         2,367,265                624,083
Other liabilities                                                                              40,200,059             20,137,453
                                                                                             ------------           ------------
                                                                                              638,317,184            603,891,911
                                                                                             ------------           ------------

Long-term convertible subordinated debentures                                                  21,346,000             26,446,000
Other long-term debt                                                                           22,250,000             22,500,000
                                                                                             ------------           ------------
            Total long-term debt                                                               43,596,000             48,946,000
                                                                                             ------------           ------------
            Total liabilities                                                                 681,913,184            652,837,911
                                                                                             ------------           ------------

Commitments and contingent liabilities

Convertible preferred stock, Series D
   - market value guarantee feature                                                               875,000                875,000
Less unearned compensation - unallocated shares                                                   796,506                796,506

Shareholders' equity
   Preferred shares, $5 par value. Authorized 644,389 shares
     Series B                                                                                      25,760                 25,760
     Series D                                                                                   1,625,000              1,625,000
   Common shares, $1 par value. Authorized 20,000,000 shares;
      issued 6,496,854 and 6,496,605 shares, respectively                                       6,496,854              6,496,605
   Capital surplus                                                                             28,091,878             28,089,137
   Retained earnings                                                                           24,494,809             21,592,244
   Net unrealized appreciation (depreciation) on securities
      available for sale, net of tax                                                              144,606             (1,140,969)
                                                                                             ------------           ------------
                                                                                               60,878,907             56,687,777
   Less
      Common shares in treasury at cost, 150,343 shares                                         1,489,239              1,489,239
      Unearned compensation                                                                     1,479,224              1,479,224
                                                                                             ------------           ------------
            Total shareholders' equity                                                         57,910,444             53,719,314
                                                                                             ------------           ------------
                                                                                             $739,902,122           $706,635,719
                                                                                             ============           ============
</TABLE>

  See Notes to Consolidated Financial Statements.

                                        3
<PAGE>   4



                        STERLING BANCORP AND SUBSIDIARIES
                        Consolidated Statements of Income

<TABLE>
<CAPTION>
                                                            Three Months Ended                         Nine Months Ended
                                                                September 30,                             September 30,
                                                          1995                 1994               1995                    1994
                                                      -----------          -----------         -----------            -----------
<S>                                                   <C>                  <C>                 <C>                    <C>        
INTEREST INCOME
   Interest and fees on loans                         $ 8,409,633          $ 6,172,108         $23,827,997            $16,695,053
   Interest and dividends on securities
     Available for sale                                 1,135,015            1,217,665           3,532,680              3,341,414
      Held to maturity                                  3,864,344            3,859,253          11,641,135             10,869,823
   Interest on Federal funds sold                          97,708              102,405             300,857                194,540
   Interest on deposits with other banks                   46,404               32,541             137,321                 85,842
                                                      -----------          -----------         -----------            -----------
            Total interest income                      13,553,104           11,383,972          39,439,990             31,186,672
                                                      -----------          -----------         -----------            -----------

INTEREST EXPENSE
   Interest on deposits                                 2,841,289            2,355,381           8,574,275              5,828,689
   Interest on Federal funds purchased
      and securities sold under
       repurchase agreements                              744,376              609,629           2,129,506              1,477,872
   Interest on commercial paper                           353,753              137,416             855,532                364,472
   Interest on other short-term borrowings                 84,243              109,115             224,577                482,364
   Interest on long-term debt                             792,209              862,352           2,572,027              2,402,593
                                                      -----------          -----------         -----------            -----------
            Total interest expense                      4,815,870            4,073,893          14,355,917             10,555,990
                                                      -----------          -----------         -----------            -----------
Net interest income                                     8,737,234            7,310,079          25,084,073             20,630,682
Provision for possible loan losses                        574,000              310,000           1,234,000                700,000
                                                      -----------          -----------         -----------            -----------
Net interest income after provision
 for possible loan losses                               8,163,234            7,000,079          23,850,073             19,930,682
                                                      -----------          -----------         -----------            -----------

NONINTEREST INCOME
   Service charges on deposit accounts                    436,582              407,784           1,301,052              1,032,079
   Factoring and letters of credit
     commissions                                          780,875              448,776           1,922,398              1,359,606
   Trust fees                                             211,395              174,474             497,830                435,089
   Gain on sale of loans                                   19,539               --                  19,539                 --
   Gain on sale of securities                              --                   --                   4,801                 42,361
   Other                                                  201,498              146,742             596,569                392,447
                                                      -----------          -----------         -----------            -----------
            Total noninterest income                    1,649,889            1,177,776           4,342,189              3,261,582
                                                      -----------          -----------         -----------            -----------

NONINTEREST EXPENSES
   Salaries and employee benefits                       3,310,873            2,984,513          10,269,350              8,940,408
   Occupancy                                              835,877              637,262           2,277,829              1,877,918
   Equipment                                              551,833              302,913           1,254,213                979,419
   Legal and other professional fees                      550,743              190,271           1,420,188                645,066
   Federal deposit insurance premium                      (32,418)             247,728             515,049                734,184
   Marketing                                              293,000              165,133             808,464                466,687
   Other                                                1,170,426              827,416           3,157,584              2,675,656
                                                      -----------          -----------         -----------            -----------
            Total noninterest expenses                  6,680,334            5,355,236          19,702,677             16,319,338
                                                      -----------          -----------         -----------            -----------
Income before income taxes                              3,132,789            2,822,619           8,489,585              6,872,926
Provision for income taxes                              1,640,420            1,847,858           4,443,578              4,025,294
                                                      -----------          -----------         -----------            -----------


Net income                                            $ 1,492,369          $   974,761         $ 4,046,007            $ 2,847,632
                                                      ===========          ===========         ===========            ===========


Average number of common shares outstanding             6,390,444            6,363,345           6,378,428              6,360,886
                                                      ===========          ===========         ===========            ===========
Per average common share
   Net income                                               $0.23                $0.16               $0.63                  $0.45
                                                            =====                =====               =====                  =====
Average number of common shares outstanding
   assuming full dilution                               8,563,855            8,979,701           8,555,024              8,980,574
                                                      ===========          ===========         ===========            ===========
Per average common share assuming
  full dilution

   Net income                                               $0.21                $0.14               $0.57                  $0.40
                                                            =====                =====               =====                  =====


Dividends paid per common share                             $0.06                $0.05               $0.18                  $0.15
                                                            =====                =====               =====                  =====
</TABLE>


See Notes to Consolidated Financial Statements.


                                        4
<PAGE>   5


                        STERLING BANCORP AND SUBSIDIARIES
            Consolidated Statement of Changes in Shareholders' Equity

<TABLE>
<CAPTION>
                                                                     Nine Months Ended
                                                             September 30,       September 30,
                                                                 1995                1994
                                                             ------------        ------------
<S>                                                          <C>                 <C>
 Shareholders' equity at beginning of period                 $ 53,719,314        $ 52,856,675
                                                             ------------        ------------

 Net income                                                     4,046,007           2,847,632
 Dividends declared
    Common stock- $.18 and $.15 per share,respectively         (1,142,347)           (951,932)
    Preferred stock - at prescribed rates                          (1,095)                (64)
 Change in market value guarantee feature
    Convertible preferred stock,Series D                             --                (7,659)
 Conversion of subordinated debentures
    into common stock                                               2,990                --
 Change in valuation account for securities
    available for sale, net of tax                              1,285,575          (1,301,108)
                                                             ------------        ------------
 Net change in shareholders' equity                             4,191,130             586,869
                                                             ------------        ------------
 Shareholders' equity at end of period                       $ 57,910,444        $ 53,443,544
                                                             ============        ============
</TABLE>



See Notes to Consolidated Financial Statements.


                                        5
<PAGE>   6




                        STERLING BANCORP AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                             Nine Months Ended
                                                                                September 30,
                                                                          1995                1994
                                                                      ------------        ------------
<S>                                                                   <C>                 <C> 
OPERATING ACTIVITIES
  Net income                                                          $  4,046,007        $  2,847,632
  Adjustments to reconcile net income to net cash
      provided by operating activities:
        Provision for possible loan losses                               1,234,000             700,000
        Depreciation and amortization of premises and equipment            867,397             371,997
        Deferred income tax benefit                                       (171,720)           (369,638)
        Gain on sale of loans                                              (19,539)               --
        Gain on sale of securities                                          (4,801)            (42,361)
        Amortization of premiums on securities                           1,096,498           2,365,159
        Accretion of discounts on securities                               (95,315)           (115,206)
        Increase in accrued interest receivable                           (409,837)           (590,432)
        Increase in other liabilities                                   20,062,606           8,985,893
        Other, net                                                      (1,173,104)           (361,543)
                                                                      ------------        ------------

              Net cash provided by operating activities                 25,432,192          13,791,501
                                                                      ------------        ------------

INVESTING ACTIVITIES

   Purchase of premises and equipment                                     (512,356)         (1,124,465)
   Net increase in interest-bearing deposits
    with other banks                                                       (30,000)               --
   Net decrease (increase) in Federal funds sold                         3,000,000          (5,000,000)
   Net (increase)decrease in loans                                     (52,060,323)          5,352,192
   Proceeds from prepayments, redemptions or
      maturities of securities - held to maturity                       22,738,157          46,763,976
   Purchases of securities - held to maturity                          (10,241,813)        (98,225,709)
   Proceeds from sale of securities-available for sale                   8,977,432           9,955,694
   Proceeds from prepayments, redemptions or maturities
      of securities - available for sale                                 4,108,204          43,781,215
   Purchases of securities - available for sale                        (10,918,982)        (40,522,187)
                                                                      ------------        ------------
              Net cash used by investing activities                    (34,939,681)        (39,019,284)
                                                                      ------------        ------------

FINANCING ACTIVITIES
   Net decrease in noninterest-bearing deposits                         (8,774,882)        (20,546,710)
   Net (decrease)increase in interest-bearing deposits                 (17,373,736)         18,842,717
   Net increase in securities sold under
      repurchase agreements                                              7,524,041          27,124,163
   Net increase in commercial paper
      and other short-term borrowings                                   31,244,062           4,068,930
   Cash dividends paid                                                  (1,143,442)           (951,996)
   Maturities and prepayments on debentures                             (5,347,010)         (7,366,000)
   Issuance of long-term debt                                                 --             7,020,000
                                                                      ------------        ------------
              Net cash provided by financing activities                  6,129,033          28,191,104
                                                                      ------------        ------------
Net (decrease)increase in cash and due from banks                       (3,378,456)          2,963,321
Cash and due from banks - beginning of period                           39,224,764          35,975,787
                                                                      ------------        ------------
Cash and due from banks - end of period                               $ 35,846,308        $ 38,939,108
                                                                      ============        ============

Supplemental disclosure of cash flow information:
   Interest paid                                                      $ 12,713,016        $  9,679,021
   Income taxes paid                                                     4,863,462           3,395,097

Supplemental schedule of non-cash financing activities:
   Conversion of debentures                                           $      2,990        $       --
</TABLE>

See Notes to Consolidated Financial Statements.


                                        6
<PAGE>   7




                        STERLING BANCORP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

1.       The consolidated financial statements include the accounts of Sterling
         Bancorp ("the parent company") and its subsidiaries, principally
         Sterling National Bank & Trust Company of New York ("the bank"), after
         elimination of material intercompany transactions. The term "the
         Company" refers to Sterling Bancorp and its subsidiaries. The
         consolidated financial statements as of and for the interim periods
         ended September 30, 1995 and 1994 are unaudited; however, in the
         opinion of management, all adjustments, consisting of normal recurring
         accruals, necessary for a fair presentation of such periods have been
         made. Certain reclassifications have been made to the 1994 financial
         statements to conform to current presentation. The interim financial
         statements should be read in conjunction with the Company's annual
         report on Form 10-K for the year ended December 31, 1994.

2.       For purposes of reporting cash flows, cash and cash equivalents include
         cash and due from banks.

3.       The Company's outstanding Preferred Shares comprise 1,288 Series B
         shares (of 4,389 authorized) and 250,000 Series D Shares (of 300,000
         authorized). Each Series B share is entitled to cumulative dividends at
         the rate of $0.10 per year, to one vote per share and upon liquidation
         or redemption to an amount equal to accrued and unpaid dividends to the
         date of redemption or liquidation plus an amount which is $20 in the
         case of involuntary liquidation and $28 otherwise; each Series D share
         (all of such shares are owned by the Company's Employee Stock Ownership
         Trust) is entitled to dividends at the rate of $0.6125 per year, is
         convertible into one Common Share, and is entitled to a liquidation
         preference of $10 (together with accrued dividends). All preferred
         shares are entitled to one vote per share (voting with the Common
         Shares except as otherwise required by law).

4.       On January 1, 1995, the Company adopted Statement of Financial
         Accounting Standards ("SFAS") No. 114 "Accounting by Creditors for
         Impairment of a Loan," as amended by SFAS No. 118 "Accounting by
         Creditors for Impairment of a Loan - Income Recognition and
         Disclosures."

         SFAS No. 114 required all creditors to account for impaired loans
         (except for those loans that are accounted for at fair value or at the
         lower of cost or fair value) at the present value of the expected
         future cash flows, discounted at the loan's effective interest rate, or
         at the fair value of the loan's collateral if the loan is collateral
         dependent. SFAS No. 114 also provides that in-substance foreclosed
         loans should not be included in Real Estate Owned for financial
         reporting purposes, but, rather, in the loan portfolio.

         SFAS No. 114 was amended by SFAS No. 118, "Accounting by Creditors for
         Impairment of a Loan - Income Recognition and Disclosure." SFAS No. 118
         allows for existing income recognition practices to continue.

         As of September 30, 1995, these statements did not have a material
         effect on the Company's financial condition or results of operations.


                                        7
<PAGE>   8
                        STERLING BANCORP AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


BUSINESS

Sterling Bancorp (the parent company) is a bank holding company, as defined by
the Bank Holding Company Act of 1956, as amended, with subsidiaries providing a
full range of financial services, including business and consumer loans, asset
based financing, factoring, trade financing, mortgage lending, leasing, and
trust and estate services. The parent company owns virtually 100% of Sterling
National Bank & Trust Company of New York (the bank), its principal subsidiary,
all of the outstanding shares of Standard Factors Corporation/Sterling Factors,
Universal Finance Corporation, Sterling Banking Corporation and Sterling
Industrial Loan Association (finance subsidiaries). As used throughout this
report, "the Company" refers to Sterling Bancorp and its subsidiaries.

Beginning in the third quarter of 1995, the Company, through a wholly owned
subsidiary, began a program of originating mortgage loans with the intention of
reselling those loans, including the servicing rights, without recourse. To date
approximately $658,000 of such loans have been originated and sold. The gain on
that sale amounted to $19,500 and is separately reported on the income
statement. As at September 30, 1995 the Company had approximately $520,000 of
loans available for resale. These loans are carried at the lower of cost or
market and are included in loans, net of unearned discount.

There is intense competition in all areas in which the Company conducts its
business, including deposits, loans, domestic and international financing and
trust services. In addition to competing with other banks, the Company also
competes in certain areas of its business with other financial institutions. At
September 30, 1995, the bank's year to date average earning assets (of which
loans were 45% and securities were 53%) represented approximately 94% of the
Company's year to date average earning assets. See pages 17 and 18 for the
composition of the Company's average balance sheets for the three and nine
months ended September 30, 1995 and September 30, 1994.

FINANCIAL CONDITION

Liquidity is the ability to meet cash needs arising from changes in various
categories of assets and liabilities. Liquidity is constantly monitored and
managed at both the parent company and the bank levels. Liquid assets consist of
cash and due from banks, interest-bearing deposits in banks and Federal funds
sold and securities available for sale. Primary funding sources include core
deposits, capital market funds and other money market sources. Core deposits
include domestic noninterest-bearing and interest-bearing retail deposits, which
historically have been relatively stable. The parent company and the bank have
significant unused borrowing capacity. Contingency plans exist and could be
implemented on a timely basis to minimize the impact of any dramatic change in
market conditions.

While the parent company generates income from its own operations, it also
depends for its cash requirements on funds maintained or generated by its
subsidiaries, principally the bank. Such sources have been adequate to meet the
parent company's cash requirements throughout its history. At September 30,
1995, the parent company had on hand approximately $11,633,000 in cash.


                                        8
<PAGE>   9


                        STERLING BANCORP AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Various legal restrictions limit the extent to which the bank can supply funds
to the parent company and its nonbank subsidiaries. All national banks are
limited in the payment of dividends without the approval of the Comptroller of
the Currency (the Comptroller) to an amount not to exceed the net profits (as
defined) for that year to date combined with its retained net profits for the
preceding two calendar years. During 1994 and 1993, with the Comptroller's
approval, the bank paid dividends aggregating $3,639,038 and $2,599,314; the
bank's net income for 1994 and 1993 was $4,222,664 and $3,463,950. To date in
1995, the bank has declared and paid dividends of $3,172,982. In addition, from
time to time dividends are paid to the parent company by the finance
subsidiaries from their retained earnings without regulatory restrictions.

At September 30, 1995, the parent company's outstanding long-term debt,
consisting principally of convertible subordinated debentures (originally issued
pursuant to rights offerings to shareholders of the Company), aggregated
$23,659,000. To the extent convertible subordinated debentures are converted to
common stock of the parent company (as has been the case with $11,000,000
principal amount since 1982), the subordinated debt related thereto is retired
and becomes part of shareholders' equity. The parent company's long-term
indebtedness is also met through funds generated from profits and new financing.
Since becoming a public company in 1946, the parent company and its predecessors
have been able to obtain the financing required and have paid at maturity all
outstanding long-term indebtedness. The parent company expects to continue to
meet its obligations in accordance with their terms.

At September 30, 1995, the parent company's short-term debt, consisting
principally of commercial paper, was approximately $25,484,000. The parent
company had cash, interest-bearing deposits with banks and other current assets
aggregating $47,251,000 and back-up credit lines with banks of $15,000,000. The
parent company and its predecessor have issued and repaid at maturity
approximately $12 billion of commercial paper since 1955. Since 1979, the parent
company has had no need to use available back-up lines of credit.

The Company and the bank are subject to risk-based capital regulations. The
purpose of these regulations is to measure capital against risk-weighted assets,
including off-balance sheet items. These regulations define the elements of
total capital into Tier 1 and Tier 2 components and establish minimum ratios of
4% for Tier 1 capital and 8% for Total Capital. Supplementing these regulations,
is a leverage requirement. This requirement establishes a minimum leverage
ratio, (at least 3%) which is calculated by dividing Tier 1 capital by adjusted
quarterly average assets (after deducting goodwill). At September 30, 1995, the
risk-based capital ratios and the leverage ratio for the Company and the bank
exceeded the most stringent requirements contemplated by these guidelines.
Information regarding the Company's and the bank's risk-based capital, at
September 30, 1995 and December 31, 1994, is presented on page 22.

While the past performance is no guarantee of the future, management believes
that the Company's funding sources (including dividends from all its
subsidiaries) and the bank's funding sources will be adequate to meet their
liquidity and capital requirements in the future.


                                        9
<PAGE>   10


                        STERLING BANCORP AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


ASSET LIABILITY MANAGEMENT

The Company's primary earnings source is its net interest income; therefore the
Company devotes significant time and has invested in resources to assist in the
management of interest rate risk and asset quality. The Company's net interest
income is affected by changes in market interest rates, and by the level and
composition of interest earning assets and interest bearing liabilities. The
Company's objectives in its asset/liability management are to utilize its
capital effectively, to provide adequate liquidity and to enhance net interest
income, without taking undue risks or subjecting the Company unduly to interest
rate fluctuations.

The Company takes a coordinated approach to the management of its liquidity,
capital and interest rate risk. This risk management process is governed by
policies and limits established by senior management which are reviewed and
approved by the Asset/Liability Committee of the Board of Directors ("ALCO").
ALCO, which is comprised of members of senior management and the Board, meets to
review among other things, economic conditions, interest rates, yield curve,
cash flow projections, expected customer actions, liquidity levels, capital
ratios and repricing characteristics of assets, liabilities and off-balance
sheet financial instruments.

The Company's balance sheet structure is primarily short-term in nature with
most assets and liabilities repricing or maturing in less than five years. The
Company monitors the interest rate sensitivity of its on-and off-balance sheet
positions by examining its near-term sensitivity and its longer term gap (as
defined below) position. The Company utilizes several tools in its management of
interest rate risk, primarily utilizing a sophisticated income simulations model
and complementing this with a traditional gap analysis.

The income simulation model measures the Company's net interest income
sensitivity or volatility to interest rate changes utilizing statistical
techniques that allow the Company to consider various factors which impact net
interest income. These factors include actual maturities, estimated cash flows,
repricing characteristics, deposits growth/retention and, most importantly, the
relative sensitivity of the Company's assets and liabilities to changes in
market interest rates. This relative sensitivity is important to consider as the
Company's core deposit base is not subject to the same degree of interest rate
sensitivity as its assets. The core deposits costs are internally managed and
tend to exhibit less sensitivity to changes in interest rates than the Company's
adjustable rate assets whose yields are based on external indices and change in
concert with market interest rates.

The Company's interest rate sensitivity is determined by identifying the
probable impact of changes in market interest rates on the yields on the
Company's assets and the rates which would be paid on it's liabilities. This
modeling technique involves a degree of estimation based on certain assumptions
that management believes to be reasonable. Utilizing this process, management
can project the impact of changes in interest rates on net interest margin. The
Company has established certain limits for the potential volatility of its net
interest margin assuming certain levels of changes in market interest rates with
the objective of maintaining a stable net interest margin under various probable
rate scenarios. The Company can also utilize this technique to stress test its
portfolio to determine the impact of various interest rate scenarios on the
Company's net interest income.


                                       10
<PAGE>   11

                        STERLING BANCORP AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


The traditional gap analysis is prepared based on the maturity and repricing
characteristics of interest earning assets and interest-bearing liabilities for
selected time bands. The mismatch between repricings or maturities within a time
band is commonly referred to as the "gap" for that period. A positive gap (asset
sensitive) where interest-rate sensitive assets exceed interest-rate sensitive
liabilities generally will result in an institution's net interest margin
increasing in a rising rate environment and decreasing in a falling rate
environment. A negative gap (liability sensitive) will generally have the
opposite results on an institution's net interest margin. However, the
traditional gap analysis does not assess the relative sensitivity of assets and
liabilities to changes in interest rates. The Company utilizes the gap analysis
to complement its income simulations modeling, primarily focusing on the longer
term structure of the balance sheet.

As part of its interest rate risk strategy, the Company uses off-balance sheet
financial instruments (derivatives) to hedge the interest rate sensitivity of
assets with the corresponding amortization reflected in the yield of the related
on-balance sheet assets being hedged. The Company has written policy guidelines,
which have been approved by the Board of Directors and the Asset/Liability
Committee, governing the use of off-balance sheet financial instruments,
including approved counterparties, risk limits and appropriate internal control
procedures. The credit risk of derivatives arises principally from the potential
for a counterparty to fail to meet its obligation to settle a contract on a
timely basis. At September 30, 1995, all counterparties have investment grade
credit ratings from the major rating agencies. Each counterparty is specifically
approved for applicable credit exposure.

At September 30, 1995, the Company's off-balance sheet financial instruments
consisted two interest rate floor contracts having a notional amount totaling
$75 million; one contract with a notional amount of $50 million has a final
maturity of February 27, 2000 and the other contract with a notional amount of
$25 million has a final maturity of March 17, 1998. These financial instruments
are being used as part of the Company's interest rate risk management and not
for trading purposes.

Interest rate floor contracts require the counterparty to pay the Company at
specified future dates the amount, if any, by which the specified interest rate
(3 month LIBOR) falls below the fixed floor rates, applied to the notional
amounts. The Company utilizes these financial instruments to adjust its interest
rate risk position without exposing itself to principal risk and funding
requirements. The interest rate floor contracts require the Company to pay a fee
for the right to receive a fixed interest payment.

The Company purchased interest rate floor contracts to reduce the impact of
falling rates on its floating rate commercial loans. The Company paid up front
premiums of $715,000 for the interest rate floor contracts that it entered into
in 1995. These premiums are amortized monthly against interest income from the
designated assets. At September 30, 1995, the unamortized premiums on these
contracts totaled $623,100 and are included in other assets. At September 30,
1995, $4,300 was receivable under these contracts.


                                       11
<PAGE>   12


                        STERLING BANCORP AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

SECURITIES

The Company's securities portfolios are comprised of principally U.S. Government
and U.S. Government corporation and agency mortgage backed securities along with
other debt and equity securities. At September 30, 1995, the Company's portfolio
of securities totalled $298,499,000 of which U.S. Government and U.S. Government
corporation and agency guaranteed mortgage backed securities having an average
life of approximately 3 1/2 years amounted to $290,032,000. The Company has the
intent and ability to hold to maturity securities classified "held to maturity".
These securities are carried at cost, adjusted for amortization of premiums and
accretion of discounts. The gross unrealized gains and losses on "held to
maturity" securities were $815,000 and $4,749,000, respectively. Securities
classified as "available for sale" may be sold in the future, prior to maturity.
These securities are carried at market value. Net aggregate unrealized gains or
losses on these securities are included in a valuation allowance account and are
shown net of taxes, as a component of shareholders' equity. "Available for sale"
securities included gross unrealized gains of $661,000 and gross unrealized
losses of $394,000. Given the relatively short - term nature of the portfolio
and its generally high credit quality, management expects to realize all of its
investment upon the maturity of such instruments, and thus believes that any
market value impairment is temporary in nature.


CREDIT RISK

A key management objective is to maintain the quality of the loan portfolio.
This objective is achieved by maintaining high underwriting standards coupled
with regular evaluation of the creditworthiness of and the designation of
lending limits for each borrower. The portfolio strategies seek to avoid
concentrations by industry or loan size in order to minimize credit exposure and
to originate loans in markets with which it is familiar. The composition of the
Company's and the bank's loan portfolio at September 30, 1995 were as follows:

<TABLE>
<CAPTION>
                                             Company          Bank
                                             --------       --------
                                                 (in thousands)
<S>                                          <C>            <C>
Domestic
  Commercial and industrial                  $308,595       $262,882
  Real estate - mortgage                       45,790         45,269
  Real estate - construction                    1,361          1,361
  Installment - individuals                    14,979         14,979
Foreign
  Government and official institutions            789            789
                                             --------       --------
  Loans, gross                                371,514        325,280
  Less unearned discounts                       6,801          6,501
                                             --------       --------
Loans, net of unearned discounts             $364,713       $318,779
                                             ========       ========
</TABLE>


The Company's commercial and industrial loan portfolio represents approximately
83% of gross loans. Loans in this category are typically made to small and
medium sized businesses and range between $250,000 and $10 million. The primary
source of repayment is from the borrower's operating profits and cash flows.
Based on underwriting standards, loans may be secured in whole or in part by
collateral such as liquid assets, accounts receivable, equipment, inventory or
real property. The Company's real estate loan portfolio, which represents
approximately 13% of gross loans, is secured by mortgages on real property
located principally in the City of New York and the State of Virginia. The
collateral securing any loan may vary in value based on the success of the
business and economic conditions.


                                       12
<PAGE>   13




                        STERLING BANCORP AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Intrinsic to the lending process is the possibility of loss. In times of
economic slowdown, the risk inherent in the Company's portfolio of loans is
increased. While management endeavors to minimize this risk, it recognizes that
loan losses will occur and that the amount of these losses will fluctuate
depending on the risk characteristics of the loan portfolio which in turn
depends on current and expected economic conditions, the financial condition of
borrowers and the credit management process.

The allowance for possible loan losses is maintained through the provision for
possible loan losses, which is a charge to operating earnings. The adequacy of
the provision and the resulting allowance for possible loan losses is determined
by management's continuing review of the loan portfolio, including
identification and review of individual problem situations that may affect the
borrower's ability to repay, review of overall portfolio quality through an
analysis of current charge-offs, delinquency and nonperforming loan data,
estimates of the value of any underlying collateral, review of regulatory
examinations, an assessment of current and expected economic conditions and
changes in the size and character of the loan portfolio. The allowance reflects
management's evaluation of both loans presenting identified loss potential and
of the risk inherent in various components of the portfolio. Thus an increase in
the size of the portfolio or in any of its components could necessitate an
increase in the allowance even though there may not be a decline in credit
quality or an increase in potential problem loans. A significant change in any
of the evaluation factors described above could result in future additions to
the allowance. At September 30, 1995, the ratio of the allowance to loans, net
of unearned discounts, was 1.4%. At September 30, 1995, the Company's allowance,
was $5,233,000 and its non-accrual loans amounted to $503,000. Based on the
foregoing, as well as management's judgement as to the current risks inherent in
the loan portfolio, the Company's allowance for possible loan losses was deemed
adequate to absorb all reasonably anticipated losses on specifically known and
other possible credit risks associated with the portfolio as of September 30,
1995. Potential problem loans, which are loans that are currently performing
under present loan repayment terms but where known information about possible
credit problems of borrowers cause management to have serious doubts as to the
ability of the borrowers to continue to comply with the present repayment terms,
aggregated $515,000 at September 30, 1995.


RESULTS OF OPERATIONS

Net interest income, which represents the difference between interest earned on
interest earning assets and interest incurred on interest bearing liabilities,
is the Company's primary source of earnings. Net interest income can be affected
by changes in market interest rates as well as the level and composition of
interest earning assets and interest bearing liabilities. An analysis of the
Company's interest rate sensitivity is presented on page 21. The increases
(decreases) for the components of interest income and interest expense,
expressed in terms of fluctuation in average volume and rate are shown on pages
19 and 20. Information as to the components of interest income and interest
expense and average rates is provided in the Average Balance Sheets shown on
pages 17 and 18.


                                       13
<PAGE>   14


                        STERLING BANCORP AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1994

Net interest income for the third quarter of 1995 increased $1,427,000 to
$8,737,000 from $7,310,000 for the comparable period in 1994. Total interest
income aggregated $13,553,000 up $2,169,000 for the three months ended September
30, 1995 as compared to $11,384,000 for the same period of 1994. The yield on
interest earning assets was 8.62% for the third quarter of 1995 compared with
7.63% for the comparable period in 1994. The increase in interest income was
principally due to an increase in income earned on the Company's loan portfolio
as a result of asset growth and higher market interest rates.

Interest earned on the loan portfolio amounted to $8,410,000 up $2,238,000 when
compared to the like period a year ago. Average loan balances amounted to $318
million up $65 million from an average loan volume of $253 million the prior
year three month period. The increase in the average loan volume, primarily in
the Company's commercial and industrial loan portfolio, accounted for $1,609,000
or 72% of the increase in interest earned on loans, with the balance
attributable to higher rates.

Interest expense increased $742,000 to $4,816,000 for the three months ended
September 30, 1995 from $4,074,000 for the comparable period in 1994. The cost
of funds increased to 4.24% for the third quarter of 1995 up from 3.51% for the
1994 third quarter. The increase in interest expense was substantially due to
the higher rate environment.

Interest expense on savings and time deposits increased by $485,000 during the
third quarter of 1995 to $2,841,000 from $2,356,000 for the comparable 1994
period primarily due to an increase in the cost of funds. The average rate paid
on interest-bearing deposits rose to 3.52% in the 1995 third quarter compared to
2.86% in the comparable year ago period. Average balances for interest-bearing
deposits in the third quarter of 1995 remained relatively stable when compared
to the like period a year ago.

Interest expense associated with borrowed funds was $257,000 higher when
comparing the three months ended September 30, 1995 to the same period in 1994.
The impact of the higher interest rate environment increased interest expense
associated with borrowed funds by $369,000. This increase was partially offset
by a reduction in the cost of funds of $112,000 as a result of lower average
borrowings.

Reference is made to "CREDIT RISK" above for information as to management's
continuing evaluation of the loan portfolio and the allowance for possible loan
losses appropriate thereto. Based on such evaluation, and principally as the
result of the growth in the portfolio, $574,000 was provided for possible loan
losses for the three months ended September 30, 1995.

Noninterest income increased $472,000 for the three months ended September 30,
1995 when compared with the same period in 1994 as a result of increased fees
from factoring services and higher income from other fee based services.


                                       14
<PAGE>   15



                        STERLING BANCORP AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Noninterest expenses increased $1,325,000 for the three months ended September
30, 1995 versus the same period last year reflecting higher salary and employee
benefit costs as well as higher general business costs and professional fees
associated with increased business development efforts. Offsetting these
increases was a decrease in Federal deposit insurance premiums as a result of a
reduction in premiums charged.

As a result of a higher level of pretax profitability offset by lower additional
provisions for unresolved state tax issues, the provision for income taxes
declined by $207,000 in the third quarter 1995 when compared to the year ago
period.

As a result of the above factors, net income increased $518,000 for the three
months ended September 30, 1995 when compared with the same period in 1994.


COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1994

Net interest income for the nine months ended September 30, 1995 increased
$4,453,000 to $25,084,000 from $20,631,000 for the comparable period in 1994.
Total interest income aggregated $39,440,000 up $8,253,000 for the nine months
ended September 30, 1995 as compared to $31,187,000 for the same period of 1994.
The yield on interest earning assets was 8.65% for the first nine months of 1995
compared with 7.19% for the comparable period in 1994. The increase in interest
income was principally due to an increase in income earned on the Company's loan
portfolio as a result of asset growth and higher market interest rates.

Interest earned on the loan portfolio for the year to date 1995 amounted to
$23,828,000 up $7,133,000 when compared to the like period a year ago. Average
loan balances amounted to $300 million up $52 million from an average loan
volume of $248 million for the prior year nine month period. The increase in the
average loan volume, primarily in the Company's commercial and industrial loan
portfolio accounted for $3,780,000 or 53% of the increase in interest earned on
loans, with the balance attributable to higher rates.

Interest expense increased $3,800,000 to $14,356,000 for the first nine months
of 1995 from $10,556,000 for the comparable period in 1994. The cost of funds
increased to 4.26% for the first nine months of 1995 up from 3.19% for the same
period in 1994. The predominant portion of the increase in interest expense was
due to the higher rate environment.

Interest expense on savings and time deposits increased by $2,745,000 during the
year to date 1995 to $8,574,000 from $5,829,000 for the comparable 1994 period
primarily due to an increase in the cost of funds. The cost of interest-bearing
deposits rose to 3.52% in the 1995 year to date period compared to 2.59% in the
comparable year ago period. In addition, the average balances for other time
deposits increased $30 million to $150 million in the first nine months of 1995
compared with the 1994 first nine months primarily due to higher balances for
certificate of deposit customers.


                                       15
<PAGE>   16




                        STERLING BANCORP AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Interest expense associated with borrowed funds was $5,782,000 up $1,055,000 for
the nine months ended September 30, 1995 when compared to the same period in
1994. The impact of the higher interest rate environment increased interest
expense associated with borrowed funds by $1,697,000. This increase was
partially offset by a reduction in the cost of funds of $642,000 as a result of
lower average borrowings.

Reference is made to "CREDIT RISK" above for information as to management's
continuing evaluation of the loan portfolio and the allowance for possible loan
losses appropriate thereto. Based on such evaluation, and principally as the
result of the growth in the portfolio, $1,234,000 was provided for possible loan
losses for the nine months ended September 30, 1995.

Noninterest income increased $1,081,000 for the nine months ended September 30,
1995 when compared with the same period in 1994 as a result of increased fees
from factoring services and higher income from other fee based services.

Noninterest expenses increased $3,383,000 for the nine months ended September
30, 1995 versus the same period last year reflecting higher salary and employee
benefit costs as well as higher general business costs and professional fees
associated with expanded business development efforts. A reduction of Federal
deposit insurance premium rates offset increases in noninterest expenses.

The provision for income taxes increased $418,000 for the first nine months of
1995 when compared with the same period last year principally based on the level
of pretax profitability.

As a result of the above factors, net income increased $1,198,000 for the nine
months ended September 30, 1995 when compared with the same period in 1994.


                                       16
<PAGE>   17

                        STERLING BANCORP AND SUBSIDIARIES
                           Average Balance Sheets (1)
                        Three Months Ended September 30,

<TABLE>
<CAPTION>
                                                        1995                                        1994
                                            --------------------------------------      -------------------------------------
                                            Average                       Average       Average                       Average
ASSETS                                      Balance        Interest         Rate        Balance        Interest         Rate
                                            --------       --------       --------      --------       --------        ------
<S>                                         <C>            <C>             <C>          <C>            <C>             <C>
Interest-bearing deposits
   with other banks                         $  2,997       $     46          6.14%      $  2,970       $     33          4.41%
Securities
   Available for sale (2)                     66 625          1 135          6.78         82,819          1,218          5.86
   Held to maturity                          235,952          3,864          6.55        246,321          3,859          6.21
Federal funds sold                             6,522             98          5.86          8,913            102          4.54
Loans, net of unearned
   discounts (3)                             317,896          8,410         10.69        253,489          6,172          9.75
                                            --------       --------                     --------       --------
         TOTAL EARNING ASSETS                629,992         13,553          8.62        594,512         11,384          7.63
                                                           --------        ------                      --------        ------

Cash and due from banks                       35,066                                      38,536
Allowance for possible
   loan losses                                (4,913)                                     (3,934)
Goodwill                                      21,158                                      21,158
Other assets                                  14,746                                      15,192
                                            --------                                    --------

         TOTAL ASSETS                       $696,049                                    $665,464
                                            ========                                    ========

LIABILITIES AND SHAREHOLDERS'
 EQUITY
Interest-bearing deposits
   Savings                                  $171,294            965          2.23       $173,293            779          1.78
   Other time                                148,867          1,876          5.00        145,686          1,577          4.15
                                            --------       --------                     --------       --------
      Total interest-bearing
           deposits                          320,161          2,841          3.52        318,979          2,356          2.86
                                            --------       --------                     --------       --------

Borrowings
   Securities sold under
      agreements to repurchase                53,328            744          5.54         59,338            610          4.08
   Commercial paper                           25,536            354          5.50         14,516            137          3.74
   Other short-term debt                       6,769             85          4.94         10,601            109          4.08
   Long-term debt                             44,799            792          7.02         52,072            862          6.57
                                            --------       --------                     --------       --------
         Total borrowings                    130,432          1,975          6.01        136,527          1,718          4.99
                                            --------       --------                     --------       --------
         TOTAL INTEREST-BEARING
           LIABILITIES                       450,593          4,816          4.24        455,506          4,074          3.51
                                                           --------          ----                      --------          ----

Noninterest-bearing deposits                 153,361                                     139,123
Other liabilities                             34,926                                      17,188
                                            --------                                    --------
       Total liabilities                     638,880                                     611,817

Shareholders' equity                          57,169                                      53,647
                                            --------                                    --------
         TOTAL LIABILITIES AND
           SHAREHOLDERS' EQUITY             $696,049                                    $665,464
                                            ========                                    ========

Net interest income/spread                                 $  8,737          4.38%                     $  7,310         4.12%
                                                           ========          ====                      ========        =====

Net yield on earning assets
   (margin)                                                                  5.54%                                      4.87%
                                                                             ====                                      =====
</TABLE>


(1)      The average balances of assets, liabilities and shareholders' equity
         are computed on the basis of daily averages for the bank and monthly
         averages for the parent company and its finance subsidiaries. Dollars
         are presented in thousands.

(2)      Based on amortized or historical cost with the FASB 115 market value
         adjustment included in other assets.

(3)      Non-accrual loans are included in the average balance which reduces the
         average yields.


                                       17
<PAGE>   18



                        STERLING BANCORP AND SUBSIDIARIES
                           Average Balance Sheets (1)
                         Nine Months Ended September 30,

<TABLE>
<CAPTION>
                                                             1995                                        1994
                                            --------------------------------------      --------------------------------------
                                            Average                       Average       Average                       Average
ASSETS                                      Balance        Interest         Rate        Balance        Interest         Rate
                                            --------       --------       --------      --------       --------       --------
<S>                                         <C>            <C>             <C>          <C>            <C>             <C>        
Interest-bearing deposits
   with other banks                         $  2,986       $    137          6.01%      $  2,961       $    86           3.88%
Securities
   Available for sale (2)                     70,252          3,533          6.74         83,783         3,341           5.32
   Held to maturity                          237,554         11,641          6.54        238,909        10,870           6.70
Federal funds sold                             6,846            301          6.02          6,209           195           4.18
Loans, net of unearned
   discounts (3)                             299,629         23,828         10.94        247,798        16,695           9.24
                                            --------       --------                     --------       -------
         TOTAL EARNING ASSETS                617,267         39,440          8.65        579,660        31,187           7.19
                                                           --------        ------                      -------           ----
 
Cash and due from banks                       37,257                                      40,459
Allowance for possible
   loan losses                                (4,539)                                     (3,701)
Goodwill                                      21,158                                      21,158
Other assets                                  13,597                                      14,161
                                            --------                                    --------

         TOTAL ASSETS                       $684,740                                    $651,737
                                            ========                                    ========

LIABILITIES AND SHAREHOLDERS'
 EQUITY
Interest-bearing deposits
   Savings                                  $175,692          3,035          2.31       $179,768         2,453           1.82
   Other time                                150,422          5,539          4.92        120,282         3,376           3.74
                                            --------       --------                     --------       -------
      Total interest-bearing
           deposits                          326,114          8,574          3.52        300,050         5,829           2.59
                                            --------       --------                     --------       -------

Borrowings
   Securities sold under
      agreements to repurchase                50,799          2,129          5.60         57,905         1,478           3.41
   Commercial paper                           20,840            856          5.49         14,540           364           3.35
   Other short-term debt                       6,121            225          4.91         17,335           482           3.72
   Long-term debt                             47,178          2,572          7.29         52,194         2,403           6.16
                                            --------       --------                     --------       ------- 
         Total borrowings                    124,938          5,782          6.19        141,974         4,727           4.45
                                            --------       --------                     --------       -------
         TOTAL INTEREST-BEARING
           LIABILITIES                       451,052         14,356          4.26        442,024        10,556           3.19
                                                           --------          ----                      -------           ----

Noninterest-bearing deposits                 150,181                                     142,413
Other liabilities                             27,768                                      14,071
                                            --------                                    --------
       Total liabilities                     629,001                                     598,508

Shareholders' equity                          55,739                                      53,229
                                            --------                                    --------
         TOTAL LIABILITIES AND
           SHAREHOLDERS' EQUITY             $684,740                                    $651,737
                                            ========                                    ========

Net interest income/spread                                 $ 25,084          4.39%                     $20,631           4.00%
                                                           ========          ====                      =======           ====

Net yield on earning assets
   (margin)                                                                  5.49%                                       4.79%
                                                                             ====                                        ====
</TABLE>


(1)      The average balances of assets, liabilities and shareholders' equity
         are computed on the basis of daily averages for the bank and monthly
         averages for the parent company and its finance subsidiaries. Dollars
         are presented in thousands.

(2)      Based on amortized or historical cost with the FASB 115 market value
         adjustment included in other assets.

(3)      Non-accrual loans are included in the average balance which reduces the
         average yields.


                                       18
<PAGE>   19

                        STERLING BANCORP AND SUBSIDIARIES
                              Rate/Volume Analysis
                        Three Months Ended September 30,
                                  (000 omitted)

<TABLE>
<CAPTION>
                                                                 Increase/(Decrease)
                                                                 Three Months Ended
                                                               September 30, 1995 and 1994
                                                         -------------------------------------
                                                         Volume          Rate          Total(1)
                                                         -------        -------        -------
<S>                                                      <C>            <C>            <C> 
INTEREST INCOME
Interest-bearing deposits with other banks               $ --           $    13        $    13
                                                         -------        -------        -------

Securities
   Available for sale (2)                                   (256)           173            (83)
   Held to maturity                                         (185)           190              5
                                                         -------        -------        -------
      Total                                                 (441)           363            (78)
                                                         -------        -------        -------

Federal funds sold                                           (31)            27             (4)
                                                         -------        -------        -------

Loans, net of unearned discounts (3)                       1,609            629          2,238
                                                         -------        -------        -------
   TOTAL INTEREST INCOME                                 $ 1,137        $ 1,032        $ 2,169
                                                         =======        =======        =======

INTEREST EXPENSE
Interest-bearing deposits
   Savings                                               $   (11)       $   197        $   186
   Other time                                                 (1)           300            299
                                                         -------        -------        -------
         Total                                               (12)           497            485
                                                         -------        -------        -------

Borrowings
   Securities sold under agreements to repurchase            (73)           207            134
   Commercial paper                                          128             89            217
   Other short-term debt                                     (43)            19            (24)
   Long-term debt                                           (124)            54            (70)
                                                         -------        -------        -------
      Total                                                 (112)           369            257
                                                         -------        -------        -------

TOTAL INTEREST EXPENSE                                   $  (124)       $   866        $   742
                                                         =======        =======        =======

NET INTEREST INCOME                                      $ 1,261        $   166        $ 1,427
                                                         =======        =======        =======
</TABLE>


(1)      The rate/volume variance is allocated equally between changes in volume
         and rate.

(2)      Includes Federal Reserve Bank and other stock investments.

(3)      Nonaccrual loans have been included in the amounts outstanding and
         income has been included to the extent accrued.


                                       19
<PAGE>   20

                        STERLING BANCORP AND SUBSIDIARIES
                              Rate/Volume Analysis
                         Nine Months Ended September 30,
                                  (000 omitted)

<TABLE>
<CAPTION>
                                                                                                 Increase/(Decrease)
                                                                                                  Nine Months Ended
                                                                                             September 30, 1995 and 1994
                                                                                        -------------------------------------
                                                                                         Volume          Rate         Total[1]
                                                                                        -------        -------        -------
<S>                                                                                     <C>            <C>            <C> 
INTEREST INCOME
Interest-bearing deposits with other banks                                              $     2        $    49        $    51
                                                                                        -------        -------        -------

Securities
   Available for sale [2]                                                                  (609)           801            192
   Held to maturity                                                                         495            276            771
                                                                                        -------        -------        -------
      Total                                                                                (114)         1,077            963
                                                                                        -------        -------        -------

Federal funds sold                                                                           20             86            106
                                                                                        -------        -------        -------

Loans, net of unearned discounts [3]                                                      3,780          3,353          7,133
                                                                                        -------        -------        -------
   TOTAL INTEREST INCOME                                                                $ 3,688        $ 4,565        $ 8,253
                                                                                        =======        =======        =======

INTEREST EXPENSE
Interest-bearing deposits
   Savings                                                                              $   (66)       $   648        $   582
   Other time                                                                               939          1,224          2,163
                                                                                        -------        -------        -------
         Total                                                                              873          1,872          2,745
                                                                                        -------        -------        -------

Borrowings
   Securities sold under agreements to repurchase                                          (239)           890            651
   Commercial paper                                                                         209            283            492
   Other short-term debt                                                                   (361)           104           (257)
   Long-term debt                                                                          (251)           420            169
                                                                                        -------        -------        -------
      Total                                                                                (642)         1,697          1,055
                                                                                        -------        -------        -------

TOTAL INTEREST EXPENSE                                                                  $   231        $ 3,569        $ 3,800
                                                                                        =======        =======        =======

NET INTEREST INCOME                                                                     $ 3,457        $   996        $ 4,453
                                                                                        =======        =======        =======
</TABLE>


(1)      The rate/volume variance is allocated equally between changes in volume
         and rate.

(2)      Includes Federal Reserve Bank and other stock investments.

(3)      Nonaccrual loans have been included in the amounts outstanding and
         income has been included to the extent accrued.


                                       20
<PAGE>   21

                        STERLING BANCORP AND SUBSIDIARIES
                            Interest Rate Sensitivity


To mitigate the vulnerability of earnings to changes in interest rates, the
Company manages the repricing characteristics of assets and liabilities in an
attempt to control net interest rate sensitivity. Management attempts to confine
significant rate sensitivity gaps predominantly to repricing intervals of a year
or less so that adjustments can be made quickly. Assets and liabilities with
predetermined repricing dates are placed in a time of the earliest repricing
period. Based on the interest rate sensitivity analysis shown below, the
Company's net interest income would increase during periods of rising interest
rates and decrease during periods of falling interest rates. Amounts are
presented in thousands.

<TABLE>
<CAPTION>
                                                                 Repricing Date
                                      -----------------------------------------------------------------------------------------
                                                      More than                                          Non
                                      3 months        3 months        1 year to         Over            Rate
                                       or less        to 1 year        5 years         5 years        Sensitive         Total
                                      ---------       ---------       ---------       ---------       ---------       ---------
<S>                                   <C>             <C>             <C>             <C>             <C>             <C>          
ASSETS
   Interest-bearing deposits
       with other banks               $     200       $  2,800        $  --           $  --           $  --           $   3,000
   Securities                            11,540         18,847           63,385         199,760           4,967         298,499
   Federal funds sold                     5,000         --               --              --              --               5,000
   Loans, net of unearned
    discounts                           297,442          4,210           44,029          25,832          (6,800)        364,713
   Noninterest-earnings assets
    and allowance for possible
    loan losses                          --             --               --              --              68,690          68,690
                                      ---------       --------        ---------       ---------       ---------       ---------

      Total Assets                      314,182         25,857          107,414         225,592          66,857         739,902
                                      ---------       --------        ---------       ---------       ---------       ---------

LIABILITIES AND SHAREHOLDERS'
EQUITY
  Interest-bearing deposits             148,633         59,036          117,363          --              --             325,032
  Securities sold under
     repurchase agreements               41,880          9,695           --              --              --              51,575
  Commercial paper                       24,522            774           --              --              --              25,296
  Other short-term borrowings            27,725          --              --              --              --              27,725
  Long-term debt                         21,346          --              21,200           1,050          --              43,596
  Noninterest-bearing
    liabilities and share-
     holders' equity                     --              --              --              --             266,678         266,678
                                       --------       --------        ---------       ---------       ---------       ---------

       Total Liabilities and
          Shareholders' Equity        $ 264,106       $ 69,505        $ 138,563       $   1,050       $ 266,678       $ 739,902
                                      =========       ========        =========       =========       =========       =========

Net Interest Rate
      Sensitivity Gap                 $  50,076       $(43,648)       $ (31,149)      $ 224,542       $(199,821)      $  --
                                      =========       ========        =========       =========       =========       =========

Cumulative Gap at
      September 30, 1995              $  50,076       $  6,428        $ (24,721)      $ 199,821       $  --           $  --
                                      =========       ========        =========       =========       =========       =========

Cumulative Gap at
      September 30, 1994              $   3,178       $(15,525)       $ 123,233       $ 152,236       $  --           $  --
                                      =========       ========        =========       =========       =========       =========

Cumulative Gap at
      December 31, 1994               $  38,812       $ 10,115        $ (87,710)      $ 179,179       $  --           $  --
                                      =========       ========        =========       =========       =========       =========
</TABLE>


                                       21
<PAGE>   22

                        STERLING BANCORP AND SUBSIDIARIES
                    Risk-Based Capital Components and Ratios

<TABLE>
<CAPTION>
                                                                           The Company                         The Bank
                                                                    ------------------------          --------------------------
                                                                     9/30/95        12/31/94           9/30/95          12/31/94
                                                                    --------        --------          --------          --------
                                                                                             ($ in thousands)
<S>                                                                 <C>             <C>               <C>               <C>
COMPONENTS
   Shareholders' equity                                             $ 57,910        $ 53,719          $ 47,668          $ 45,700
   Add/(Subtract):
      Minority interest                                                    8               8            --                --
      Goodwill                                                       (21,158)        (21,158)           --                --
      Net unrealized (appreciation)depreciation
         on securities available for sale,
          net of tax  (1)                                               (145)          1,141              (143)            1,142
                                                                    --------        --------          --------          --------

      Tier 1 Capital                                                  36,615          33,710            47,525            46,842
                                                                    --------        --------          --------          --------

   Allowance for possible loan losses
      (limited to 1.25% of total risk-
        weighted assets)                                               5,021           4,136             3,960             3,435
   Subordinated debt (limited to 50%
      of Tier 1 Capital)                                              15,616          16,690            --                --
                                                                    --------        --------          --------          --------

      Tier 2 Capital                                                  20,637          20,826             3,960             3,435
                                                                    --------        --------          --------          --------

      Total Risk-based Capital                                      $ 57,252        $ 54,536          $ 51,485          $ 50,277
                                                                    ========        ========          ========          ========


RATIOS
   Tier 1 Capital                                                       9.12%           8.73%            12.90%            13.09%
                                                                    ========        ========          ========          ========
   Total Capital                                                       14.25%          14.12%            13.97%            14.05%
                                                                    ========        ========          ========          ========
   Leverage                                                             5.43%           5.12%             7.50%             7.42%
                                                                    ========        ========          ========          ========

Memoranda
   Tier 1 Capital minimum requirement                               $ 16,066        $ 15,450          $ 14,742          $ 14,318
                                                                    ========        ========          ========          ========
   Total Capital minimum requirement                                $ 32,132        $ 30,900          $ 29,484          $ 28,636
                                                                    ========        ========          ========          ========
   Risk-weighted assets, net of goodwill                            $401,656        $386,241          $368,550          $357,946
                                                                    ========        ========          ========          ========
   Quarterly average assets, net of goodwill                        $674,891        $658,976          $633,633          $630,932
                                                                    ========        ========          ========          ========
</TABLE>


(1)      As directed by regulatory agencies this amount must be excluded from
         the computation of Tier 1 capital.


                                       22
<PAGE>   23



                        STERLING BANCORP AND SUBSIDIARIES

Item 6.       Exhibits and Reports on Form 8-K

              (a)    The following exhibits are filed as part of this report:

                         (11) Statement Re: Computation of Per Share Earnings
                         (27) Financial Data Schedule

              (b)    No reports on Form 8-K have been filed during the quarter.



                                   SIGNATURES



              Pursuant to the requirements of the Securities Exchange Act of
              1934, the registrant has duly caused this report to be signed on
              its behalf by the undersigned thereunto duly authorized.

                                           STERLING BANCORP
                                           ...................................
                                               (Registrant)



Date      11/14/95                 /s/     Louis J. Cappelli
    --------------------                   -----------------------------------
                                           Louis J. Cappelli
                                           Chairman and
                                           Chief Executive Officer


Date      11/14/95                 /s/     John W. Tietjen
    --------------------                   -----------------------------------
                                           John W. Tietjen
                                           Senior Vice President, Treasurer
                                           and Chief Financial Officer


                                       23
<PAGE>   24


                        STERLING BANCORP AND SUBSIDIARIES


                                  Exhibit Index

<TABLE>
<CAPTION>
                                                                  Incorporated                                Sequential
   Exhibit                                                          Herein By                  Filed             Page
    Number                           Description                  Reference To                Herewith            No.
   -------                           -----------                  ------------                --------        ----------
<S>                                  <C>                          <C>                         <C>             <C> 
    11                               Computation of                                              X                 25
                                     Per Share Earnings



    27                               Financial Data                                              X                 26
                                     Schedule
</TABLE>




                                       24