UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------------
FORM 11-K
(Mark One)
ANNUAL REPORT
[X] PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended December 31, 2002
or
TRANSITION REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
----------------------------------
Commission File Number 1-5273-1
STERLING BANCORP/STERLING NATIONAL BANK
401(K) PLAN
(Full title of the plan)
Sterling Bancorp
650 Fifth Avenue
New York, NY 10019
(Name of issuer of the Securities held pursuant to the plan
and address of its principal executive office)
TABLE OF CONTENTS
Independent Auditors Report
Statements of Assets Available for Plan Benefits
Statement of Changes in Assets Available for Plan Benefits
Notes to Financial Statements
Supplemental Schedules
Signatures
Index to Exhibits
Consent of KPMG LLP
Sterling Bancorp/Sterling National Bank 401(K) Plan
Table of Contents
Independent Auditors Report
Financial Statements:
Statements of Assets Available for Plan Benefits as of December 31, 2002
and December 31, 2001
Statement of Changes in Assets Available for Plan Benefits for the year
ended December 31, 2002
Notes to Financial Statements
Supplemental Schedules
[KPMG LOGO]
INDEPENDENT AUDITORS' REPORT
Administrative Committee of
Sterling Bancorp/Sterling National Bank 401(K) Plan:
We have audited the accompanying statements of assets available for plan
benefits of Sterling Bancorp/Sterling National Bank 401(K) Plan (the Plan) as of
December 31, 2002 and 2001, and the related statement of changes in assets
available for plan benefits for the year ended December 31, 2002. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for plan benefits of the Plan as of
December 31, 2002 and 2001, and the changes in assets available for plan
benefits for the year ended December 31, 2002 in conformity with accounting
principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule H, line 4i -
schedule of assets (held at end of year) at December 31, 2002 and schedule H,
line 4j - schedule of reportable transactions - for the year ended December 31,
2002 are presented for the purpose of additional analysis and are not a required
part of the basic financial statements, but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 (ERISA).
These supplemental schedules are the responsibility of the Plan's management.
The supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ KPMG LLP
New York, New York
June 23, 2003
STERLING BANCORP/STERLING NATIONAL BANK
401(K) PLAN
Statements of Assets Available for Plan Benefits
December 31, 2002 and 2001
2002 2001
---- ----
Investments at fair value:
Guaranteed Interest Account $ 565,716 $ 452,000
Pooled separate accounts 3,794,850 3,680,309
Sterling Bancorp common stock 6,053,573 8,759,504
Participant loans 131,992 158,195
----------- ----------
Total investments 10,546,131 13,050,008
----------- ----------
Cash 43,884 58,849
----------- ----------
Assets available for plan benefits $10,590,015 $13,108,857
=========== ===========
See accompanying notes to financial statements.
2
STERLING BANCORP/STERLING NATIONAL BANK
401(K) PLAN
Statement of Changes in Assets Available for Plan Benefits
Year ended December 31, 2002
Additions to assets attributed to:
Investment income:
Interest $ 35,435
Dividends 165,256
Net appreciation in fair value of investments 366,319
-----------
Total investment income 567,010
Participants' contributions 1,008,031
-----------
Total additions 1,575,041
Deductions from assets attributed to:
Benefits paid to participants 4,093,883
-----------
Net decrease (2,518,842)
Assets available for plan benefits:
Beginning of year 13,108,857
-----------
End of year $10,590,015
===========
See accompanying notes to financial statements.
3
STERLING BANCORP/STERLING NATIONAL BANK
401(K) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(1) DESCRIPTION OF THE PLAN
The assets of the Sterling Bancorp/Sterling National Bank 401(K) Plan
(the Plan) are primarily financial instruments and are subject to risk
from individual investment objectives, stock markets, interest rates,
economic conditions, and world affairs. The following brief description
of the Plan is presented for information purposes only and is not
intended as a summary plan description for participants. Participants
should refer to the Plan document for more complete information.
(a) GENERAL
The Plan is a defined contribution plan covering all employees
of Sterling Bancorp and subsidiaries (the Company or Plan
Sponsor), excluding Sterling National Mortgage Company, to
help supplement participants' retirement income. The Plan was
established effective January 1, 1990, amended and restated
effective January 1, 1994. Under the terms of the amendment,
participants and their account balances of the Profit-Sharing
Plan for Employees of Sterling National Bank and the
Profit-Sharing Plan for Employees of Sterling Bancorp were
transferred and merged into the Plan. In 2001, the Plan was
amended and restated effective January 1, 2001 reflecting
certain changes on service credit and compensation provisions.
In 2002, the Plan was further amended effective January 1,
2002 to reflect certain changes under the Economic Growth and
Tax Relief Reconciliation Act (EGTRRA). The Plan is subject to
the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
The Plan is administered by a committee appointed by the board
of directors of Sterling Bancorp, and such committee acts as
the Plan's administrator. Sterling Bancorp is a bank holding
company and its common shares are listed on the New York Stock
Exchange. Sterling National Bank (the Bank) is a wholly owned
subsidiary of Sterling Bancorp.
(b) PARTICIPATION AND CONTRIBUTIONS
Regular salaried employees are eligible to participate in the
Plan if employed for at least six months and have attained age
20-1/2 years. Participants may elect to contribute to the
lesser of 20% of compensation or the maximum allowable under
the income tax regulations which was $11,000 and $10,500 for
plan years 2002 and 2001, respectively. Employees who have
attained the age of 50 years may contribute up to $12,000 in
2002. The Company may contribute 25% of the first 6% of base
compensation that a participant contributes if the participant
is employed on the last day of the plan year. Additional
Company contributions may be contributed at the option of the
Company's board of directors. No contributions were made by
the Company during 2002 and 2001.
Participants may elect to increase and decrease their
contributions once every calendar quarter by giving at least
ten days' prior written notice to the Committee. Participants
may discontinue their contributions at any time.
(c) VESTING
Participants are fully vested in their own contributions and
earnings thereon.
4 (Continued)
STERLING BANCORP/STERLING NATIONAL BANK
401(K) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
The Company's contributions are vested based on the following
schedule:
PERCENT
YEARS OF VESTING SERVICE VESTED
----------------------- -------
Less than 2 years 0%
2 years 20
3 years 40
4 years 60
5 years 80
6 or more years 100
(d) INVESTMENT ELECTIONS
A participant may elect to direct his or her contributions to
each or any of the funds in whole percentages. A participant
may change the investment allocation or make transfers between
funds.
(e) DISTRIBUTIONS AND WITHDRAWALS
A participant may withdraw his or her accumulated share on
retirement date, or make withdrawals based on hardship, death,
disability, loans, and termination of employment, as defined
in the Plan agreement.
When participation in the Plan terminates for any reason other
than death, the participant's accumulated share, as defined in
the Plan agreement, shall be distributed to such participant.
When participation in the Plan is terminated by reason of
death, the participant's entire accumulated share, as defined
in the Plan agreement, shall be distributable to his or her
designated beneficiary or executor. Distributions may be
elected to be made in a lump sum at the next valuation date,
in a lump sum at some other valuation date not later than 60
days after the close of the plan year in which employment
terminates, or in annual installments over a period not to
exceed the life expectancy of the last survivor of the
participant and his beneficiary.
(f) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contributions and all allocations of (a) the Company's
contributions, and (b) Plan earnings or account balances, as
defined.
(g) FORFEITED ACCOUNTS
Forfeited balances of terminated participants' nonvested
accounts are used to reduce future company contributions. The
amount of forfeitures for the years ended December 31, 2002
and 2001 were $577 and $629, respectively.
5 (Continued)
STERLING BANCORP/STERLING NATIONAL BANK
401(K) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(h) TRUST FUNDS MANAGED BY STERLING NATIONAL BANK
Under the terms of a trust agreement effective January 1, 1993
between the Bank and the Plan, the Bank's Trust Department
(the Trustee) manages, on behalf of the Plan, the Sterling
Common Stock Account which invests in Sterling Bancorp Common
Stock. The Trustee has been granted discretionary authority
concerning purchases and sales of investments in this account.
(i) INVESTMENT FUNDS MANAGED BY PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
Principal Mutual Life Insurance Company (the Custodian or
Principal) manages the Plan's assets on behalf of the Plan,
pursuant to the terms of an annuity contract effective January
1, 1996 between the Trustee and the Custodian.
The Custodian has been granted discretionary authority
concerning purchases and sales of investments in the pooled
separate accounts and guaranteed investment contract.
(j) PARTICIPANT LOANS
Under the Plan, a participant may borrow up to the lesser of
50% of his or her vested account balance or $50,000, subject
to a minimum amount of $1,000. Interest is charged to
participants at rates that provide a return commensurate with
the prevailing rate of interest that would be charged by
independent lenders for similar loans. The period of repayment
of any loan shall not exceed five years unless the loan is to
be used in conjunction with the purchase of the principal
residence of the participant. A participant may have more than
one loan outstanding at a time.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) GENERAL ACCOUNTING POLICIES
The accompanying financial statements have been prepared on
the accrual basis of accounting in conformity with accounting
principles generally accepted in the United States of America.
(b) USE OF ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
of America requires that management make estimates and
assumptions relating to the reporting of assets available for
plan benefits and changes in the assets available for plan
benefits and the disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
(c) INVESTMENT VALUATION AND INCOME RECOGNITION
Statement of Financial Accounting Standards No. 107, (SFAS No.
107), Disclosure about Fair Value of Financial Statements,
defines fair value of a financial instrument as the amount at
which the instrument could be exchanged in a current
transaction between willing parties.
Investments are valued at fair value based upon the net asset
value per fund which, in turn, is based upon the market
quotations of the underlying investments. Money market
accounts are valued at cost, which approximates fair value.
Stocks traded on security exchanges are valued at closing
6 (Continued)
STERLING BANCORP/STERLING NATIONAL BANK
401(K) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
market prices; when no trades are reported by the security
exchanges, they are valued at the most recent bid quotation.
Participant loans are valued at cost, which approximates fair
value.
The net unrealized appreciation or depreciation for the period
is reported together with the realized gains and losses in the
statement of changes in assets available for plan benefits.
Investment income of each investment fund is allocated to
participant accounts at the end of each quarter based upon the
ratio of each participant's account to the total of the
investment fund balance.
Realized investment gains and losses are calculated using the
weighted average historical cost basis of the investments.
Interest income is recognized when earned. Purchases and sales
of investments are recognized on a trade-date basis. Dividend
income is recognized on the ex-dividend date.
(d) PAYMENTS OF BENEFITS
Benefits are recorded when paid.
(e) RISKS AND UNCERTAINTIES
The Plan offers a number of investment options including the
Company common stock and a variety of pooled investment funds.
The investment funds consist of U.S. equities, international
equities, and fixed income securities. Investment securities,
in general, are exposed to various risks, such as interest
rate, credit, and overall market volatility risk. Due to the
level of risk associated with certain investment securities,
it is reasonable to expect that changes in the values of
investment securities will occur in the near term and that
such changes could materially affect participant account
balances and the statement of assets available for plan
benefits.
The Plan's exposure to a concentration of credit risk is
limited by the diversification of investments across all
participant-directed fund elections. Additionally, the
investments within each participant-directed fund election are
further diversified into varied financial instruments, with
the exception of the Company common stock, which principally
invests in the securities of a single issuer.
(3) Investments
The following table presents the fair value of investments that represent
5% or more of the Plan's net assets at December 31, 2002 and 2001:
2002 2001
---------- ----------
At fair value:
Principal Guaranteed Interest Account $ 565,716 $ --
Sterling Bancorp Common Stock 6,053,573 8,759,504
Principal Stock Large Cap Index Account 629,588 797,376
Principal Money Market Account 754,056 --
7 (Continued)
STERLING BANCORP/STERLING NATIONAL BANK
401(K) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
The net appreciation (depreciation) of the Plan's investments (including gains
and losses on investments bought and sold, as well as held) for the year ended
December 31, 2002, is as follows:
Sterling Bancorp Common Stock $ 800,280
Pooled Separate Accounts (433,961)
---------
$ 366,319
=========
(4) PLAN EXPENSES
During 2002 and 2001, all plan expenses were paid by the Bank.
(5) PLAN TERMINATION
Although the Company has not expressed any intent to do so, it has the
right under the Plan to discontinue and terminate the Plan at any time
subject to the provisions of ERISA. In the event of Plan termination,
the participant account balances shall become 100% vested.
(6) INCOME TAX STATUS
The Plan obtained a favorable determination letter dated November 22,
2002, from the Internal Revenue Service, which stated that the Plan, as
then designed, was in compliance with the applicable requirements of
the Internal Revenue Code (IRC). The plan administrator believes that
the Plan is currently designed and being operated in compliance with
the applicable requirements of the IRC. Therefore, no provision for
income taxes has been included in the Plan's financial statements.
(7) RELATED PARTY
Certain Plan investments are shares of pooled separate accounts managed
by Principal. Principal is the recordkeeper and custodian of the Plan
and, therefore, these transactions qualify as party-in-interest
transactions
8
SCHEDULE I
STERLING BANCORP/STERLING NATIONAL BANK
401(K) PLAN
Schedule H, Line 4i -- Schedule of Assets (Held at End of Year)
December 31, 2002
DESCRIPTION OF
IDENTITY OF ISSUER, INVESTMENT/UNITS CURRENT
BORROWER, OR SIMILAR PARTY OR SHARES VALUE
---------------------------------------------------- ---------------------- -----------
Pooled separate and Guaranteed Interest
Accounts managed by Principal Mutual
Life Insurance Company*:
Pooled separate accounts, at fair value:
Guaranteed Interest Account Interest rates range
from 1.99% to 6.39% $ 565,716
Money Market Account 17,365 units 754,056
Bond & Mortgage Account 385 units 250,993
Government Securities Account 22,824 units 420,666
Bond Emphasis Balanced Account 4,896 units 84,840
Large Capital Stock Index Account 19,808 units 629,588
Large Company Blend Account 22,748 units 317,984
Medium Company Value Account 2,727 units 94,868
Real Estate Account 430 units 164,704
Stock Emphasis Balanced Account 6,083 units 104,996
Fidelity Advisor Small Capital Account 2,179 units 31,546
Invesco Small Company Growth Account 1,813 units 45,987
Janus Adviser Aggressive Growth Account 4,588 units 51,500
Janus Advisor Capital Appreciation Account 3,724 units 67,360
Medium Company Blend Account 4,228 units 154,862
Small Company Blend Account 5,194 units 192,936
Putnam Voyager Account 5,624 units 101,924
International Small Company Account 990 units 20,476
International Stock Account 8,124 units 199,646
Principal Financial Group, Inc. Stock Account 4,556 units 73,761
American Century Value Securities Account 395 units 6,461
Large Capital Value Account 438 units 3,995
American Century Small Capital Value
Securities Account 961 units 15,738
Fidelity Advisor Medium Capital Account 282 units 5,963
Sterling Bancorp Common Stock* 229,999 units 6,053,573
24 participant Loans* Interest rates range
from 6.25% to 11.50% 131,992
-----------
$10,546,131
===========
* Party in interest.
See accompanying independent auditors' report.
9
SCHEDULE II
STERLING BANCORP/STERLING NATIONAL BANK
401(K) PLAN
Schedule H, Line 4j -- Schedule of Reportable Transactions
Year ended December 31, 2002
DISPOSED ACQUIRED
-------------------------------- -----------------
SECURITY DESCRIPTION SALES PROCEEDS GAIN(LOSS) PURCHASE COST
-------------------- ----- -------- ---------- -------- ----
Sterling Bancorp Common Stock 8 $3,413,285 1,358,453 7 $795,792
See accompanying independent auditors' report.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
administrative committee of the Sterling Bancorp/Sterling National Bank 401(k)
Plan has duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
STERLING BANCORP/STERLING
NATIONAL BANK 401(K) PLAN
Date: June 30, 2003 By: /s/ MARY MOLLICA-SENIOR
-----------------------
Mary Mollica-Senior
(a member of the Plan's
Administrative Committee)
EXHIBIT INDEX
Sequential
Exhibit Filed Page
Number Description Herewith No.
------ ----------- -------- --
23 Consent of Independent Auditors x
99.1 Certification Pursuant to x
Section 906 of Sarbanes-
Oxley Act of 2002