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Sterling Bancorp upsizing share buyback plan, selling mortgage loans

The board of Sterling Bancorp increased the number of common shares the company is authorized to buy back under the current repurchase program to 20 million from 10 million.

As of Dec. 18, the Montebello, N.Y.-based company had repurchased a total of 7,314,771 shares in the fourth quarter under the buyback program.

Separately, the company's unit, Sterling National Bank, agreed to sell fixed-rate residential mortgage loans to a third party in a transaction set to close in February 2019. As of Nov. 30, the said loans had a total unpaid principal balance of $1.6 billion and a weighted average interest rate of 3.61%. The sale is expected to be neutral to earnings.

The bank intends to use the proceeds to settle around $1.6 billion of wholesale borrowings with a weighted average interest rate of 2.75%.

The company estimates accretion income on acquired loans to range between $60 million and $65 million in 2019. It expects the loan sale and reduction in borrowings to result in an increase of 12 to 15 basis points in net interest margin for 2019, excluding accretion income on acquired loans.