July 28, 2010 in Business

Sterling reports loss

But bank’s CEO says this quarter better than last, sees positive signs
By The Spokesman-Review

Sterling Financial Corp. reported a second-quarter loss Tuesday of $58.2 million, including a $70.8 million allowance for credit losses.

A year ago, the Spokane bank reported a net loss of $33.9 million after a $79.7 million allowance for credit losses.

Per share, the 2010 quarter loss was $1.12, compared with 65 cents for the 2009 quarter.

But Chief Executive Officer Greg Seibly said the second-quarter numbers were an improvement compared with the first quarter, and there were other positive indicators for Sterling, which has been trying since last fall to raise additional capital.

Nonperforming loans declined 8 percent compared with the first quarter, to $884.1 million, and loan origination increased 25 percent. Balances on construction loans hard hit in the recession, many from the Puget Sound and Portland areas, have tumbled 56 percent in the last year.

Sterling sold $76.4 million in nonperforming loans during the quarter, registering a $1.2 million loss in the process.

Retail deposits climbed but the total fell, to $7.2 billion, as Sterling continued to reduce its dependence on transient brokered deposits. The number of accounts increased.

Total assets, at $9.7 billion, have fallen 21 percent since June 30, 2009.

Sterling stock traded down one cent to close at 67 cents but, following the post-market earnings release, the shares shed another six cents to finish at 61 cents.

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