) -- John Millman, the president and CEO of

Sterling National Bank

, says he expects "continued double digit growth in both loans and deposits during 2012."

Sterling National Bank is the main subsidiary of

Sterling Bancorp

(STL) - Get Report

of New York.

Sterling National Bank president and CEO John Millman

Sterling Bancorp on Monday reported first-quarter net income available to common shareholders of $4.6 million, or 15 cents a share, compared to $5.3 million, or 17 cents a share in the fourth quarter, and $3.3 million, or 12 cents a share, during the first quarter of 2011. Earnings declined sequentially because the company made a $2 million provision for income taxes during the first quarter, after reporting an $864,000 tax benefit in the fourth quarter.

The company's total portfolio loans grew 13% year-over-year, to $1.45 billion, with "a robust pipeline" of loans-in-process as of March 31, and with a loans-to-deposits ratio at a low 73.1%.

Total deposits increased 15% year-over-year to $2.0 billion as of March 31, with coveted noninterest-bearing demand deposits increasing 45% year-over-year, to $815.5 million.

Sterling's net interest margin -- the difference between a bank's average yield on loans and investments and its average cost for deposits and wholesale borrowings -- was 4.07% during the first quarter, improving from 3.77% in the fourth quarter, and 3.84% a year earlier, as a result of the company's "successful strategy of redeploying assets from the investment portfolio into loans," according to Sterling Bancorp CEO Louis Cappelli.

According to HighlineFI, Sterling Bancorp's first-quarter return on average assets was 0.74%, and the first-quarter return on average equity was 8.25%.

In an interview with


on Friday, Millman said "we feel really good about 2012," expressing confidence in Sterling's unfolding growth story, as well as in a continued economic recovery in the bank's New York market footprint.


How is Sterling National Bank achieving the loan growth?

John Milman:

We're in a dynamite banking market -- the best in the world. Everyone wants to be in New York City. You have the greatest concentration of small and midsized companies here. We have had a very consistent strategy through good times and bad, focusing on privately owned entrepreneurial businesses. The money center banks can't focus on this kind of smaller company, because it takes so many five-million borrowers to move the needle for a trillion dollar institution.

The market is resurging. We never turned down to the extent that the rest of the country did. Sterling National Bank has an enormous opportunity to expand market share. Also, our existing clients are beginning to draw on their credit lines more.


Have you hired additional lenders?


Yes, we have hired six or seven business development people over the past year. We have a core platform and operations capacity that can support substantially more volume than we presently have, which helps us to control expenses.


Sterling traditionally focuses on building loan and deposit relationships with small businesses and service providers. Is there any change in the bank's lending focus?


Absolutely not. This has been our ongoing focus since 1929.


Do you expect the growth to continue at this clip?


We expect continued double digit growth in both loans and deposits.


Who's hiring in the city?


My sense is that the financial service firms, the commercial banks, are now beginning to hire business development people and we are seeing more interest in our employees from other institutions. I think this is a sign of revitalization in the market place.

Sterling Bancorp's shares closed at $9.45 Thursday, returning 10% year-to-date, following a 14% decline during 2011.

Based on a quarterly payout of nine cents, the shares have a dividend yield of 3.81%.

Sterling's shares trade 1.3 times their reported March 31 book value of $7.29, and for 13 times the consensus 2013 EPS estimate of 74 cents, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is 64 cents.

Interested in more on Sterling Bancorp? See TheStreet Ratings' report card for this stock.


Written by Philip van Doorn in Jupiter, Fla.

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Philip van Doorn


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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.