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STERLING FINANCIAL CORP. OF SPOKANE, WASH., ANNOUNCES RECORD SECOND-QUARTER EARNINGS

 SPOKANE, Wash., Jan. 19 /PRNewswire/ -- Sterling Financial Corp. (NASDAQ-NMS: STSA) today announced record second-quarter net income of $1,668,000, or 46 cents per share, for the period ended Dec. 31, 1992. This represents a 55-percent increase over the same quarter a year ago when net income was $1,078,000, or 68 cents per share. Earnings for the six months ended Dec. 31, 1992, are $3,469,000, or 96 cents per share, compared to $1,863,000, or $1.77 per share, for the same period a year ago.
 The reduction in earnings per share is attributable to a substantial increase in the average number of outstanding shares following the public offering of common stock during the second quarter of last fiscal year.
 "We are very pleased with our record second-quarter results. Our strong performance reflects continued strong residential lending activity and significant improvement in net interest income," said Harold B. Gilkey, chairman and chief executive officer.
 Net interest income of $6.1 million in the second quarter ended Dec. 31, 1992, reflects an increase of 67 percent, compared to $3.7 million for the prior year's comparable period. Net interest margin has improved significantly from 2.60 percent at Dec. 31, 1991, to 3.81 percent at Dec. 31, 1992. This is due primarily to a decline in Sterling's cost of deposits and borrowings and to an increase in the volume of earning assets.
 Residential loan production increased 50 percent to $209.9 million for the second quarter ended Dec. 31, 1992, compared to $140.1 million for the quarter ended Dec. 31, 1991.
 Total assets increased 11 percent to $682.6 million at Dec. 31, 1992, compared to $612.5 million at Dec. 31, 1991. Total deposits were $540.9 million at Dec. 31, 1992, a 13-percent increase compared to $478.6 million at Dec. 31, 1991.
 Sterling continues to make progress in reducing the levels of non- performing assets and of delinquent loans. At Dec. 31, 1992, non- performing assets were $11.5 million, a decrease of 17 percent, compared to $13.8 million at Dec. 31, 1991. Delinquent loans as a percentage of total loans receivable declined to 0.73 percent at Dec. 31, 1992, from 1.48 percent at Dec. 31, 1991.
 During the quarter, Sterling continued to expand its capital resources as total capital increased to $41.7 million, or 6.1 percent of assets. At Dec. 31, 1992, Sterling exceeded all of its current and fully phased-in capital requirements.
 "Our commitment remains to single-family residential lending in the markets we serve. In addition, we are pleased with our expansion of services, specifically business banking and consumer lending," Gilkey stated.
 Sterling Financial Corp. of Spokane is a savings and loan holding company which owns Sterling Savings Association. Sterling Savings Association is a Washington State-chartered, federally insured stock savings association which opened in April 1983. Sterling Savings 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 FINANCIAL CORP.
 FINANCIAL HIGHLIGHTS
 (Unaudited, dollars in thousands, except per-share amounts)
 Three Months Six Months
 Ended Dec. 31: 1992 1991 1992 1991
 OPERATING DATA:
 Interest income $13,103 $13,052 $25,992 $26,446
 Interest expense (7,007) (9,399) (14,716) (19,643)
 Net interest income 6,096 3,653 11,276 6,803
 Provision for loan losses (255) (150) (705) (800)
 Net interest income after
 provision for loan losses 5,841 3,503 10,571 6,003
 Other income 1,870 3,053 5,372 5,540
 Operating expenses (4,745) (4,712) (9,815) (8,928)
 Income before income taxes
 and other items 2,966 1,844 6,128 2,615
 Income tax provision (1,061) (729) (2,234) (1,034)
 Income before extraordinary
 item and cumulative effect
 of change in accounting
 principle 1,905 1,115 3,894 1,581
 Extraordinary item: Early
 extinguishment of Federal
 Home Loan Bank advances,
 net of income taxes (237) 0 (425) 0
 Cumulative effect of change
 in accounting principle 0 0 0 375
 Net income $ 1,668 $ 1,115 $ 3,469 $ 1,956
 Net income applicable to
 common shares $ 1,668 $ 1,078 $ 3,469 $ 1,863
 EARNINGS PER COMMON SHARE:
 Earnings per common share
 before extraordinary
 item and cumulative
 effect of change in
 accounting principle $ 0.53 $ 0.68 $ 1.08 $ 1.41
 Extraordinary item,
 net of income taxes (0.07) 0.00 (0.12) 0.00
 Cumulative effect of
 change in accounting
 principle 0.00 0.00 0.00 0.36
 Earnings per common share $ 0.46 $ 0.68 $ 0.96 $ 1.77
 Weighted average shares
 outstanding 3,627,738 1,581,100 3,627,738 1,053,868
 RATIOS (ANNUALIZED):
 Book value per common
 share at end of period -- -- $ 11.61 $ 9.87
 Tangible book value per
 common share at end of
 period -- -- $ 8.95 $ 6.58
 Return on average assets
 (percents) 0.98 0.74 1.04 0.65
 Return on average common
 stockholders' equity
 (percents) 16.20 21.85 17.24 24.21
 Net interest margin
 (percents) 3.81 2.60 3.59 2.42
 Average financial assets
 to financial liabilities
 (percents) 102.40 97.90 102.10 97.00
 Nonperforming assets to
 total assets at end
 of period (percents) -- -- 1.69 2.26
 Stockholders' equity to
 assets at end of
 period (percents) -- -- 6.11 5.79
 SELECTED FINANCIAL INFORMATION AT: Dec. 31, Sept. 30, Dec. 31,
 1992 1992 1991
 Total assets $682,606 $662,927 $612,474
 Loans receivable 525,872 469,249 374,645
 Mortgage-backed securities 55,154 48,810 61,593
 Investments 27,755 19,256 19,731
 Deposits 540,937 508,511 478,577
 FHLB advances 88,529 98,782 90,168
 Stockholders' equity $ 41,692 $ 40,024 $ 35,442
 Number of full-time equivalent
 employees 352 345 308
 PRICE RANGE OF COMMON STOCK COMMON STOCK PRICE
 The Association has outstanding FISCAL 1993 HIGH LOW
 one class of common stock. On Second quarter 11 9-3/4
 Dec. 31, 1992, there were outstanding First quarter 11-1/2 9-3/8
 3,591,743 shares. The stock is
 currently traded in the over-the-
 counter market and is quoted on the
 NASDAQ-NMS system under the symbol
 STSA.
 The table sets forth the high and
 low bid prices per share for the
 common stock for the periods indicated.
 NOTE: The three- and six-month periods ended Dec. 31, 1991, have been restated to reflect the adoption of SFAS 109, "Accounting for Income Taxes," effective July 1, 1991.
 -0- 1/19/93
 /CONTACT: Heidi B. Stanley of Sterling Savings, 509-458-2711/
 (STSA)


CO: Sterling Financial Corp.; Sterling Savings Association ST: Washington IN: FIN SU: ERN

SW-LM -- SE007 -- 6557 01/19/93 16:46 EST
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Date:Jan 19, 1993
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