Sterling Financial reports quarterly loss

Sterling Financial Corp. on Thursday reported a $20.4 million loss for the first quarter as substantial credit write-offs continued to take a toll.

For holders of Sterling common shares, the loss widened to $24.8 million, or 48 cents per share, reflecting $4.3 million in dividends paid to the Treasury Department. The Spokane bank received $303 million from the Treasury late last year to strengthen its balance sheet.

In the first quarter of 2008, Sterling earned $2.9 million, or 6 cents per share. Those results included credit losses of $37.1 million, compared with the $65.9 million – mostly construction loans – set aside in the 2009 quarter.

Despite the loan loss provisions, Sterling’s risk-based capital ratio of 13 percent exceeded the 10 percent regulatory requirement.

Chairman Harold Gilkey said revenues for the quarter climbed 6 percent to $120.5 million, driven in large part by a 115 percent increase in mortgage banking activity fueled by refinancings.

Total assets, at $12.82 billion, rose slightly over year-end and first-quarter 2008 levels. Deposits of $8.49 billion were 8 percent ahead of last year’s quarter.

Loans were off compared with year-ago levels – $8.68 billion compared with $8.81 billion – as Sterling reduced construction lending.

Total non-performing assets stood at $653 million at the end of the quarter, more than triple the $204 million at the end of the 2008 quarter.