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Sterling Financial Corporation of Spokane, Wash., Announces 2009 Operating Results

Posted by Dana in February 2nd 2010

Sterling Financial Corporation (NASDAQ:STSA), the bank holding company of Sterling Savings Bank and Golf Savings Bank, announced results for the quarter and the year ended Dec. 31, 2009

The net loss attributable to Sterling’s common shareholders during the fourth quarter was $333.1 million, or $6.41 per common share, compared with a net loss in last year’s fourth quarter of $356.3 million, or $6.87 per common share. This quarter’s loss includes a charge of $340.3 million that Sterling set aside as an allowance for credit losses. It also includes an accrual of $4.4 million in cumulative preferred dividends associated with the U.S. Treasury’s Capital Purchase Program.

For the year ended Dec. 31, 2009, the net loss attributable to Sterling’s common shareholders was $855.5 million, or $16.48 per common share, compared with a net loss of $336.7 million, or $6.51 per common share, for the year ended Dec. 31, 2008. The 2009 net loss includes a provision for credit losses of $681.4 million, as well as non-cash charges of $227.6 million for the impairment of goodwill and $269.0 million for the allowance established against the deferred tax asset. It also includes $17.4 million in accrued cumulative preferred dividends associated with the U.S. Treasury’s Capital Purchase Program.

Key Financial Measures

* Allowance for credit losses was 4.62% of loans, compared with 3.48% at Sept. 30, 2009 and 2.55% at Dec. 31, 2008, reflecting the continuing efforts to recognize and address non-performing loans.
* Total transaction account balances grew 10% from Sept. 30, 2009, while the number of total transaction accounts increased 3% on an annualized basis.
* Liquidity, as measured by the net loans-to-deposits ratio, improved 11 percentage points during 2009 to 94%.
* Deposit funding costs were lowered 21 basis points from the third quarter and 94 basis points year over year.
* Non-interest income increased 28% to $28.1 million over the comparable quarter last year.
* Income from mortgage banking operations in the fourth quarter rose 59% to $10.8 million from the same quarter last year.
* Total risk-based capital ratio was 7.9% at Dec. 31, 2009.