Sterling Bancorp (STL), which remains one of our top-picks among U.S. regional banks, has recently reported its financial results for the first quarter. Although the headline EPS was slightly lower than the consensus had expected, the miss was driven by non-core charges and one-off items. Core operating trends remain solid, and management has improved guidance on several metrics. Sterling has plenty of catalysts and, importantly, the stock is still reasonably valued. Following the Astoria merger, STL enjoys a low-cost deposit base, which is an important competitive advantage in a rising interest rate environment. The bank's NIM is set to improve even further as STL continues to gradually shift its loan mix from low-yielding Astoria's loans towards higher-margin commercial credit. In addition, although the group has already done a good job of improving Astoria's operating efficiency, there is still scope for cost cuts.

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