Sterling Posts Drop In Earnings Spokane-Based Thrift Blames Lack Of Extraordinary Gains

Wed., July 31, 1996

Bert Caldwell Staff Writer

Sterling Financial Corp. Tuesday reported slightly lower earnings for its fiscal year, which ended June 30.

Net income at the Spokane-based parent of Sterling Savings Association was $6.8 million, or 90 cents per share, vs. $9.3 million, or $1.27 per share, for the prior year.

For the fourth quarter, income sagged to $1.7 million, or 23 cents per share, vs. $1.8 million, or 24 cents per share, for the same period a year ago.

Officials attributed the bulk of the falloff to the absence of extraordinary gains from the sale of mortgage-servicing rights. There were no such gains in the past year, compared with a total of $5.6 million, or 47 cents per share, recorded in the prior year.

Chairman Harold Gilkey also said a volatile mortgage market softened home lending activity, a trend officials tried to offset with a greater emphasis on consumer, business and construction lending.

“Helped by an increase in retail deposits and lower short-term interest rates, our interest margins and core earnings have improved during the year,” Gilkey said.

While deposits grew, assets fell by $60 million to $1.48 billion. Return on average assets was .46 percent.

Sterling operates 41 branches in Washington and Oregon.

Also Tuesday, Source Capital Corp. registered its 22nd consecutive quarter of profitability.

The Spokane commercial lender reported net income of $123,500, or 9 cents per share, during the period that ended June 30 compared with $121,400, or 8 cents per share, for the same period a year ago.

Per-share results reflect a one-for-five reverse split that was effective May 31.

Earnings assets were flat at about $17.6 million, but net interest margin - the difference between the cost of deposits and loan rates - swelled to 12.6 percent from 9.8 percent a year ago.

, DataTimes

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Sterling Posts Drop In Earnings Spokane-Based Thrift Blames Lack Of Extraordinary Gains

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