Sterling Bancorp's third-quarter report provided shareholders of the New York company with some good news beyond a 30% increase in net income.

A blue card stapled to the quarterly report entitles them to a $250 discount on closing costs for a residential mortgage.

The Shareholder's Mortgage Advantage discount has no expiration date and may be transferred to a family member or friend.

It is "an excellent way to alert our shareholders about our programs, give them this benefit, and also to pass it on-all in the spirit of us doing more mortgage business," said Louis J. Cappelli, chairman.

Sterling has about 4,000 shareholders, he said.

"We felt that this would be a product that our shareholders would be interested in, because many are owners of real estate," Mr. Cappelli said.

The offer is an efficient way to reach shareholders and publicize the company's services, because the only cost is producing the card and stapling it to quarterly reports, he said.

Sterling has made similar offers in the past, offering bank accounts, auto loans, leasing, and credit cards, Mr. Cappelli said. The company can offer home mortgages now because it bought a home mortgage company 18 months ago, he said.

George Yacik, vice president at SMR Research, said the offer "is just something to piggyback on something they are already spending money on."

And William Adcock, chairman of Synergistic Research Corp., said it is "completely logical that your shareholder group is a target market." A program like Sterling's "will build some loyalty with your shareholders," he said, "in that they have been given the opportunity for a savings."

Tom LaMalsa, a partner at WholeSale Access, said Sterling's program is apparently unique. Offering closing-cost discounts to the public is common, he said, but he knows of no other program offering them directly to shareholders.Closing cost discounts are normally provided through coupons in real estate sections of magazines and daily newspapers, Mr. LaMalsa noted.

"The mortgage business is becoming more and more like the auto business," he said. "There is always a sale going on."

Sterling's residential mortgage business is based in Great Neck, on Long Island, and lends close to $350 million a year, Mr. Cappelli said.

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