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

 SPOKANE, Wash., April 20 /PRNewswire/ -- Sterling Financial Corp. (NASDAQ-NMS: STSA) today announced record third-quarter net income of $1,702,000, or 47 cents per share, for the period ended March 31, 1993. This represents a 54-percent increase in net income over the same quarter a year ago when net income was $1,103,000, or 31 cents per share. Earnings for the nine months ended March 31, 1993, are $5,171,000, or $1.44 per share, compared to $3,059,000, or $1.57 per share, for the same period a year ago.
 "We are very pleased with our third-quarter results," said Harold B. Gilkey, chairman and chief executive officer. "These strong earnings are reflective of increased net interest margin, continued strong residential lending activity, and growth of the balance sheet due to additional capital raising."
 Net interest income of $6.58 million in the third quarter ended March 31, 1993, reflects an increase of 39 percent compared to $4.72 million for the prior year's comparable period due to both an increase in the volume of interest earning assets and net interest margin. Net interest margin has improved from 3.30 percent at March 31, 1992, to 3.56 percent for the quarter ended March 31, 1993. 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 for the third quarter ended March 31, 1993, was $93.8 million, compared to $172.5 million for the quarter ended March 31, 1992. Residential loan production for the nine months ended March 31, 1993, was $436.7 million compared to $424.6 million for the same period a year ago.
 During the quarter, Sterling continued to expand its capital resources as shareholders' equity increased to $43.4 million, or 4.9 percent of assets. Sterling Financial increased its capital resources through the issuance of $17,250,000 of 8.75-percent Subordinated Notes due in 2000. Initially, $12.9 million of the net proceeds were downstreamed to Sterling Financial's wholly owned subsidiary Sterling Savings to further improve Sterling Savings' capital ratios. Sterling Savings is using this additional capital to support the growth of its business, including funding loans and investments and expanding its branch network. At March 31, 1993, Sterling Savings exceeded all of its current and fully phased-in capital requirements.
 Total assets increased to $881.1 million at March 31, 1993, following the successful capital-raising activities. This compares to $632.6 million at March 31, 1992.
 Total deposits increased to $547.7 million at March 31, 1993, compared to $483.1 milllion at March 31, 1992.
 Sterling continues to make progress in reducing levels of non-performing assets and of delinquent loans. At March 31, 1993, non-performing assets were $10.6 million, a decrease of 23 percent, compared to $13.8 million at March 31, 1992. Delinquent loans as a percentage of total loans receivable declined to 0.98 percent at March 31, 1993, from 1.45 percent at March 31, 1992.
 "Our commitment remains to single-family residential lending in the markets we serve. In addition, we are pleased with our expansion of services including 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; dollar amounts in thousands except per share)
 For the three months ended
 March 31, 1993 March 31, 1992
 OPERATING DATA:
 Interest income $14,398 $13,025
 Interest expense (7,819) (8,301)
 Net interest income 6,579 4,724
 Provision for loan losses (375) (250)
 Net Interest income after provision
 for loan losses 6,204 4,474
 Other income 2,036 3,246
 Operating expenses (5,625) (4,535)
 Income before income taxes and
 other items 2,715 3,185
 Income tax provision (1,013) (1,260)
 Income before extraordinary item and
 cumulative effect of change in
 accounting principle 1,702 1,925
 Extraordinary item: Early
 extinguishment of Federal Home
 Loan Bank advances, net of
 income taxes 0 (822)
 Cumulative effect of change in
 accounting principle 0 0
 Net income $1,702 $1,103
 Net income applicable to
 common shares $1,702 $1,103
 EARNINGS PER COMMON SHARE:
 Earnings per common share before
 extraordinary item and
 cumulative effect of change in
 accounting principle $0.47 $0.54
 Extraordinary item, net of
 income taxes 0.00 (0.23)
 Cumulative effect of change in
 accounting principle 0.00 0.00
 Earnings per common share $0.47 $0.31
 Weighted average shares
 outstanding 3,591,743 3,591,743
 Ratios (Annualized):
 Book value per common share at end
 of period --- ---
 Tangible book value per common share
 at end of period --- ---
 Return on average assets (pct) 0.88 0.71
 Return on average common stockholders'
 equity (pct) 16.22 12.20
 Net interest margin (pct) 3.56 3.30
 Average financial assets to financial
 liabilities (pct) 103.30 100.40
 Nonperforming assets to total assets
 at end of period (pct) --- ---
 Stockholders' equity to assets at end
 of period (pct) --- ---
 For the nine months ended
 March 31, 1993 March 31, 1992
 OPERATING DATA:
 Interest income $40,390 $39,470
 Interest expense (22,535) (27,944)
 Net interest income 17,855 11,526
 Provision for loan losses (1,080) (1,050)
 Net Interest income after provision
 for loan losses 16,775 10,476
 Other income 7,407 8,787
 Operating expenses (15,339) (13,464)
 Income before income taxes and
 other items 8,643 5,799
 Income tax provision (3,247) (2,293)
 Income before extraordinary item and
 cumulative effect of change in
 accounting principle 5,596 3,506
 Extraordinary item: Early
 extinguishment of Federal Home
 Loan Bank advances, net of
 income taxes (425) (822)
 Cumulative effect of change in
 accounting principle 0 375
 Net income $5,171 $3,059
 Net income applicable to common shares $5,171 $2,966
 EARNINGS PER COMMON SHARE:
 Earnings per common share before
 extraordinary item and
 cumulative effect of change in
 accounting principle $1.56 $1.81
 Extraordinary item, net of
 income taxes (0.12) (0.44)
 Cumulative effect of change in
 accounting principle 0.00 0.20
 Earnings per common share $1.44 $1.57
 Weighted average shares outstanding 3,591,743 1,888,443
 Ratios (Annualized):
 Book value per common share at end
 of period $12.08 $10.17
 Tangible book value per common share
 at end of period $ 9.58 $ 7.06
 Return on average assets (pct) 0.97 0.67
 Return on average common stockholders'
 equity (pct) 16.89 17.73
 Net interest margin (pct) 3.55 2.72
 Average financial assets to financial
 liabilities (pct) 103.10 97.90
 Nonperforming assets to total assets
 at end of period (pct) 1.21 2.18
 Stockholders' equity to assets at end
 of period (pct) 4.93 5.78
 Selected financial information at:
 March 31, Dec. 31, March 31,
 1993 1992 1992
 Total assets $881,089 $682,606 $632,649
 Loans receivable 535,410 525,872 422,903
 Mortgage-backed securities 239,716 55,154 51,798
 Investments 32,486 27,755 18,897
 Deposits 547,699 540,937 483,128
 FHLB advances 184,777 88,529 102,801
 Stockholders' equity $ 43,394 $ 41,692 $ 36,538
 Number of full-time
 equivalent employees 358 352 311
 Price Range of Common Stock
 Sterling Financial Corp. has outstanding one class of common stock. On March 31, 1993, there were outstanding 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.
 Common Stock Price
 Fiscal 1993 High Low
 Third Quarter 15 10-3/4
 Second Quarter 11 9-3/4
 First Quarter 11-1/2 9-3/8
 NOTE: The three- and nine-month periods ended March 31, 1992, have been restated to reflect the adoption of SFAS 109, "Accounting for Income Taxes," effective July 1, 1991.
 -0- 4/20/93
 /CONTACT: Heidi B. Stanley of Sterling Financial, 509-458-2711/
 (STSA)


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

LM-GT -- SE021 -- 8315 04/20/93 17:06 EDT
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