Sterling Financial Corp. on Tuesday reported second-quarter earnings off substantially from 2007 but an improvement on first-quarter numbers.
In a report issued after markets closed, the Spokane-based bank said it earned $11.7 million, or 23 cents per share, for the three months ended June 30, compared with $27 million, or 52 cents per share, for the 2007 period. During the 2008 first quarter, earnings had slumped to $2.9 million, just 6 cents per share.
Single-family residential loans continue to be a drag on other facets of the Spokane-based bank’s business, Chairman Harold Gilkey said, but the provision for loan losses was reduced to $31 million from $37.1 million for the first quarter. The provision in 2007 was $4 million.
Total classified assets as of June 30 were $497.5 million.
Gilkey said he expects the pressure on the bank’s residential construction portfolio – about 20 percent of its total loans – to begin easing into the fourth quarter this year. Commercial construction loans have performed well, he said, as has the 70 percent of the portfolio not tied to real estate.
Total loans receivable rose to $9.22 billion. Loan originations slipped to $1.06 billion compared with $1.08 billion for the first quarter, but were up 10 percent if construction loan activity is excluded. In the second quarter of 2007, Sterling originated $1.71 billion in loans
The bank had $12.7 billion in total assets at the end of the quarter. Tangible book value was $13.41 per share. Capital ratios exceeded regulatory requirements.
The bank also announced it would maintain its 10-cent quarterly dividend, payable Oct. 10 to shareholders as of Sept. 30. That represented a yield of 7.84 percent based on Monday’s closing price of $5.10 per share, but the stock rose 78 cents to $5.88 before markets closed Tuesday, and another 69 cents to $6.57 after hours.