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STERLING SAVINGS REPORTS EARNINGS

 STERLING SAVINGS REPORTS EARNINGS
 SPOKANE, Wash., July 28 /PRNewswire/ -- Sterling Savings Association


(NASDAQ: STSA) announced net income of $4,743,000, or $2.01 primary earnings per share, for the fiscal year ended June 30, 1992. Net income for the year prior was $1,721,000, or $2.89 primary earnings per share. This represents a 176-percent increase in net income. The decrease in per-share earnings resulted from an increase in the average number of outstanding shares following the successful public offering of common stock during the second quarter. Earnings for the year ended June 30, 1992, include: earnings from operations of $5,190,000, or $2.20 per share (primary); a one-time gain, for a change in accounting for income taxes pursuant to FASB Statement 109 of $375,000, or 16 cents per share, recorded in the first quarter; and an extraordinary charge for the prepayment of borrowings of $822,000, or 35 cents per share, recorded in the third quarter.
 Fourth-quarter earnings for fiscal 1992 were $1,683,000, or 47-cent primary earnings per share, compared to $701,000, or $1.24 primary earnings per share for the fourth quarter of fiscal 1991. During the fourth quarter, net interest income increased to $5,220,000 -- a 64-percent increase over the prior year's comparable quarter. Net interest income for the year ended June 30, 1992, was $16,748,000, which reflects an increase of 31 percent compared to the prior year. Net interest income was enhanced by restructuring the mortgage-backed securities portfolio and the decline in prevailing interest rates.
 "The positive results of fiscal 1992, despite a year of extraordinary challenges, reflect Sterling's sound management, solid commitment to customers and the ability of our fine staff," said Harold B. Gilkey, chairman and chief executive officer. "These strong earnings reflect continued strong residential lending activity and the stock offering which increased the association's net interest income."
 The association's total residential loan production increased 53 percent from $378 million for the year ended June 30, 1991, to $580 million for the year just completed.
 Total assets increased to $640 million at June 30, 1992, compared to $608 million at June 30, 1991. Total deposits were $506 million at June 30, 1992, compared to $488 million at June 30, 1991. Stockholders' equity at June 30, 1992, increased to $38.2 million, or 5.97 percent of total assets, compared to $12.6 million, or 2.07 percent of total assets, at June 30, 1991. Sterling's book value per share at June 30, 1992, was $10.64.
 Sterling continues to make progress in reducing the levels of non- performing assets and delinquencies. At June 30, 1992, non-performing assets were $13.9 million, compared to $19.1 million at June 30, 1991. Loan delinquency at June 30, 1992, was 1.45 percent, compared to 2.04 percent at June 30, 1991.
 "Our commitment remains to single-family residential lending in the markets we serve. Since completing our restructuring of the balance sheet, we have begun gearing up to expand our business banking and multifamily residential lending activities. Sterling remains in compliance with all fully phased-in capital requirements," Gilkey stated.
 Sterling Savings Association is a Washington--state-chartered, federally insured stock savings association which opened in April 1983. The association, based in Spokane, has 27 branches throughout the state of Washington and, through its wholly owned subsidiary Action Mortgage Co., operates loan production offices in Washington, Oregon and Idaho.
 STERLING SAVINGS ASSOCIATION
 FINANCIAL HIGHLIGHTS
 (Unaudited, dollars in thousands except per-share amounts)
 Three Months Twelve Months
 Ended June 30: 1992 1991 1992 1991
 OPERATING DATA:
 Interest income $13,371 $14,019 $52,821 $60,683
 Interest expense (8,151) (10,835) (36,073) (47,888)
 Net interest income 5,220 3,184 16,748 12,795
 Provision for loan losses (600) (50) (1,650) (150)
 Net interest income after
 provision for loan losses 4,620 3,134 15,098 12,645
 Other income 2,948 2,268 11,733 7,367
 Operating expenses (4,784) (4,461) (18,246) (17,701)
 Income from operations 2,784 941 8,585 2,311
 Income tax provision (1,101) (240) (3,395) (590)
 Net income from operations 1,683 701 5,190 1,721
 Extraordinary item: Early
 extinguishment of
 borrowings -- -- (822) --
 Cumulative effect of change
 in accounting principle -- -- 375 --
 Net income $ 1,683 $ 701 $ 4,743 $ 1,721
 Net income applicable to
 common shares $ 1,683 $ 645 $ 4,650 $ 1,496
 PRIMARY EARNINGS PER
 COMMON SHARE:
 Earnings per common share
 from operations $ 0.47 $ 1.24 $ 2.20 $ 2.89
 Extraordinary item 0.00 0.00 (0.35) 0.00
 Cumulative effect of change
 in accounting principle 0.00 0.00 0.16 0.00
 Earnings per common
 share - primary 0.47 1.24 2.01 2.89
 FULLY DILUTED EARNINGS
 PER COMMON SHARE:
 Earnings per common share
 from operations $ 0.47 $ 1.24 $ 2.19 $ 2.89
 Extraordinary item 0.00 0.00 (0.35) 0.00
 Cumulative effect of change
 in accounting principle 0.00 0.00 0.16 0.00
 Earnings per common
 share - fully diluted $ 0.47 $ 1.24 $ 2.00 $ 2.89
 WEIGHTED AVERAGE SHARES
 OUTSTANDING:
 Primary 3,591,743 518,603 2,311,941 518,453
 Fully diluted 3,608,148 518,819 2,327,997 518,453
 SELECTED FINANCIAL INFORMATION AT JUNE 30: 1992 1991
 Total assets $640,097 $608,320
 Loans receivable 463,233 401,693
 Mortgage-backed securities 97,060 139,119
 Investments 19,096 15,270
 Deposits 505,730 488,464
 FHLB advances 86,233 78,971
 Stockholders' equity $ 38,223 $ 12,621
 Number of full-time equivalent employees 322 287
 At or For The
 Three Months Twelve Months
 Ended June 30: 1992 1991 1992 1991
 Ratios (annualized):
 Book value per common share
 at end of period -- -- $10.64 $19.99
 Tangible book value per common
 share at end of period -- -- $ 7.68 $(8.10)
 Return on average assets
 (percents) 1.06 0.45 0.77 0.26
 Return on average common
 stockholders' equity
 (percents) 18.06 25.26 17.83 15.49
 Net interest margin
 (percents) 3.51 2.09 2.92 2.13
 Average financial assets to
 financial liabilities
 (percents) 101.33 95.71 98.91 95.41
 Nonperforming assets to
 total assets at end of
 period (percents) -- -- 2.17 3.15
 Stockholders' equity to
 assets at end of period
 (percents) -- -- 5.97 2.07
 -0- 7/28/92
 /CONTACT: Heidi B. Stanley of Sterling Savings Association, 509-458-2711/
 (STSA) CO: Sterling Savings Association ST: Washington IN: FIN SU: ERN


SC-LM -- SE002 -- 4249 07/28/92 16:32 EDT
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