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STERLING SAVINGS ASSOCIATION ANNOUNCES SECOND-QUARTER EARNINGS

 STERLING SAVINGS ASSOCIATION ANNOUNCES SECOND-QUARTER EARNINGS
 SPOKANE, Wash., Jan. 28 /PRNewswire/ -- Sterling Savings Association (NASDAQ: STSA) today announced record second quarter net income of $1,244,000, or 77 cents per share, for the period ended Dec. 31, 1991. Net income for the same quarter a year ago was $221,000, or 32 cents per share.
 Year-to-date earnings for the period from June 30 to Dec. 31, 1991, are $1,718,000, or $1.55 per share, compared to $337,000, or 43 cents per share, for the same period a year ago.
 "By every measure, Sterling has improved; and we anticipate continued improvement," said Harold B. Gilkey, Sterling's chairman and chief executive officer. "These record earnings are reflective of strong residential lending activity, the continued decline of interest rates and the addition of approximately $21 million in capital."
 The association's total residential loan production increased 52 percent from $166.5 million for the six months ended Dec. 31, 1990, to $253.6 million for the six months just completed. "The increase from our mortgage banking operations was fueled by an excellent housing market throughout markets served by Sterling and our lending subsidiary Action Mortgage Co. and by unprecedented low interest rates," Gilkey stated.
 Net interest income of $3.6 million in the second quarter ended Dec. 31, 1991, reflects an increase of 9 percent compared to the same period a year ago. Net interest income during the six months ended Dec. 31, 1991 and 1990, was $6.7 million and $6.5 million, respectively.
 Sterling recognized a gain on sale of securities of $1.4 million due primarily to a restructuring of the portfolio to mitigate the effects of refinancing activity due to the declining interest rate environment.
 Total assets declined to $612 million at Dec. 31, 1991, compared to $681 million at Dec. 31, 1990. Total deposits were $478 million at Dec. 31, 1991, compared to $485 million at Dec. 31, 1990.
 "Since acquiring three insolvent thrift institutions in the late '80s, Sterling has made marked progress in reducing the levels of these acquired non-performing assets and of delinquencies," Gilkey stated. At Dec. 31, 1991, non-performing assets were $13.8 million, compared to $20 million at Dec. 31, 1990. Loan delinquency at Dec. 31, 1991, was 1.48 percent compared to 2.26 percent at Dec. 31, 1990, significantly below the average for our region. "These downward trends are contrary to what the industry is experiencing," Gilkey stated.
 Sterling's recently completed stock offering raised approximately $21 million, bringing the association into fully phased-in capital compliance. Gilkey concluded by saying, "The future looks bright -- our capital position is strong, allowing Sterling to resume normal operating activities; we are fortunate to operate in the Pacific Northwest market where the economy is relatively healthy, employment levels are good, and real estate values are stable; and we are achieving our goal of providing quality financial services and increasing shareholder value."
 STERLING SAVINGS ASSOCIATION
 FINANCIAL HIGHLIGHTS
 (Unaudited, dollars in thousands except per-share amounts)
 Three Months Six Months
 Ended Dec. 31: 1991 1990 1991 1990
 Operating Data:
 Interest income $12,996 $16,262 $26,334 $31,927
 Interest expense (9,398) (12,975) (19,643) (25,466)
 Net interest income 3,598 3,287 6,691 6,461
 Provision for loan losses (150) (50) (800) (50)
 Net interest income after
 provision for loan losses 3,448 3,237 5,891 6,411
 Other income 3,053 1,581 5,540 3,029
 Operating expenses 454
 Income tax provision (487) (76) (671) (117)
 Net income $ 1,244 $ 221 $ 1,718 $ 337
 Net income applicable
 to common shares $1,207 $ 164 $1,624 $ 224
 Earnings per common share:
 Primary $ 0.77 $ 0.32 $ 1.55 $ 0.43
 Fully diluted 0.76 0.32 1.54 0.43
 Weighted average common
 shares outstanding
 (primary) 1,575,436 518,387 1,047,127 518,387
 Weighted average common
 shares outstanding
 (fully diluted) 1,584,582 518,387 1,056,274 518,387
 STERLING SAVINGS ASSOCIATION
 SELECTED FINANCIAL INFORMATION
 Dec. 31, Sept. 30, Dec. 31,
 1991 1991 1990
 Total assets $611,735 $591,095 $681,022
 Loans receivable 404,027 383,180 412,632
 Mortgage-backed securities 132,236 140,280 143,321
 Investments 19,731 13,682 26,969
 Deposits 478,416 491,288 485,487
 FHLB advances 90,213 78,192 107,723
 Stockholders' equity $ 35,204 $ 13,095 $ 11,631
 Number of full-time
 equivalent employees 298 292 271
 Three Months Six Months
 Ended Dec. 31: 1991 1990 1991 1990
 Ratios (annualized):
 Book value per common
 share at end of period -- -- $ 9.80 $ 18.09
 Tangible book value per common
 share at end of period -- -- $ 6.11 $(12.76)
 Return on average
 assets (percents) 0.82 0.13 0.57 0.10
 Return on average
 common stockholders'
 equity (percents) 24.83 6.94 21.50 4.76
 Net interest margin (percents) 2.56 2.06 2.39 2.06
 Average financial
 assets to financial
 liabilities (percents) 97.90 95.46 96.98 95.27
 Nonperforming assets to total
 assets at end of period (percents) -- -- 2.26 2.94
 Stockholders' equity to assets at
 end of period (percents) -- -- 5.75 1.71
 PRICE RANGE OF COMMON STOCK
 Common Stock: The association has outstanding one class of common stock. On Dec. 31, 1991, there were outstanding 3,591,749 shares. The common stock was listed on the Spokane Stock Exchange until that exchange closed in May 1991. The stock is currently traded in the over-the-counter market and is quoted on the NASDAQ/NMS system under the symbol STSA. Prior to Nov. 21, 1991, the common stock was quoted in the "Pink Sheet" over-the-counter market.
 The table sets forth the high and low bid prices per share for the common stock for the period indicated.
 COMMON STOCK PRICE
 QUARTER HIGH LOW
 Fiscal 1992 -- --
 Second quarter 9-1/4 5
 NOTE: The three- and six-month periods ended Dec. 31, 1990, has been restated to reflect the utilization of net operating loss carryfowards.
 -0- 1/28/92
 /CONTACT: Heidi B. Stanley of Sterling Savings, 509-458-2711/
 (STSA) CO: Sterling Savings Association ST: Washington IN: FIN SU: ERN


LM-JH -- SE008 -- 4414 01/28/92 16:47 EST
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