July 24, 2009 in Business

Sterling reports $29.5M net loss

Results include payment of dividends to Treasury

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Sterling Financial Corp. Thursday reported a second-quarter net loss of $29.5 million as loan losses, expenses related to managing non-performing real estate and increased Federal Deposit Insurance Corp. premiums more than offset gains from fees and income from mortgage operations.

The Spokane-based bank also paid $4.3 million in dividends to the U.S. Treasury, which advanced Sterling $303 million in December.

Excepting that dividend, the loss equated to 65 cents per common share, compared with income of $11.7 million, or 23 cents per share, for the second quarter of 2008.

For the first six months of 2009, the net loss before the Treasury dividend was $50 million, compared with net income of $14.5 million for the first half of 2008.

The per-share loss was $1.13, compared with a 28-cent gain in 2008.

Assets as of June 30 were $12.4 billion, down from $12.7 billion a year ago, reflecting in part a decrease in net loans receivable to $8.44 billion from $9.2 billion. Deposits increased to $8.3 billion from $7.9 billion year-over-year.

Although Sterling has reduced problem residential construction loans, Chairman Harold Gilkey said working through the entire portfolio will take several more quarters.

Write-downs of problem assets stood at $278.1 million as of the end of June, up fivefold from the $53.1 million of a year ago.

Despite those steps, Gilkey noted Sterling Financial’s risk-weighted capital ratio stood at 13 percent, above the regulatory minimum of 10 percent.

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