SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8 - K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 22, 1999
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STERLING FINANCIAL CORPORATION
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(Exact name of registrant as specified in its charter)
Washington 0-20800 91-1572822
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(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification
Incorporation) Number)
111 North Wall Street, Spokane, Washington 99201
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (509) 458-3711
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
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Sterling Financial Corporation announces first quarter earnings for
the period ended March 31, 1999.
See attached information release.
STERLING FINANCIAL CORPORATION
FORM 8 - K
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
STERLING FINANCIAL CORPORATION
(Registrant)
April 26, 1999 /s/ Daniel G. Byrne
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Date Daniel G. Byrne
Sr. Vice President, Finance and
Assistant Secretary
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For Release April 22, 1999 9:00 a.m. PST Contact: Heidi B. Stanley
(509) 358-6160
STERLING FINANCIAL CORPORATION
OF SPOKANE, WASHINGTON, ANNOUNCES
1999 FIRST QUARTER EARNINGS
Spokane, Washington April 22, 1999--Sterling Financial Corporation
(NASDAQ:STSA) today announced net income of $2.84 million, or $0.35
per diluted share, for the three months ended March 31, 1999. This
compares with net income of $2.83 million, or $0.34 per diluted share,
for the prior year's comparable period.
Net interest income of $17.7 million for the three months ended
March 31, 1999 reflected a 43.0% increase, compared with $12.4 million
for the same period in the prior year. The increase in net interest
income for the current three-month period was due primarily to an
increase in the volume of average interest-earning assets, which
increased to $2.15 billion for the quarter ended March 31, 1999,
compared to $1.79 billion for the comparable period a year ago. The
improvement reflects a volume increase in loans and a lower cost of
funding, which is primarily a result of the June 1998 KeyBank branch
acquisition.
Sterling completed its merger with Big Sky Bancorp, Inc. ("Big Sky")
in November 1998. This transaction was accounted for as a pooling of
interests; and accordingly, all historical amounts have been restated
to include the results of Big Sky.
Harold B. Gilkey, Chairman and CEO, stated, "We have made substantial
progress in increasing our loan production which was approximately
$340.7 million during the first quarter of 1999, an increase of 64.0%
over the same period a year ago." He added that Sterling's net
interest margin increased to 3.35% during the most recent quarter, the
highest level in recent years.
Total assets increased approximately 20.7% to $2.35 billion at
March 31, 1999, compared with $1.95 billion at March 31, 1998. Total
deposits increased 45.6% to $1.56 billion at March 31, 1999, compared
with $1.07 billion at March 31, 1998. Operating expenses were $15.9
million for the three months ended March 31, 1999, compared with $10.2
million for the three months ended March 31, 1998. The increase
during the quarter was due primarily to increased personnel costs
associated with the new KeyBank branches and with increased community
bank lending staff.
As Mr. Gilkey indicated, total loan production for the three months
ended March 31, 1999 was $340.7 million, which compared favorably to
the last quarter total of $313.5 million. Increases during the
quarter were noted primarily in community bank loans, which include
business banking, construction, commercial real estate, and consumer.
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Sterling Financial Corporation
Page 2
April 22, 1999
During the quarter, Sterling implemented a change in the way it
reports deposit balances to the Federal Reserve. Additionally,
Sterling is in the process of converting to an in-house processing
system for customer checks. Both of these items are expected to
improve float management in the future.
Sterling's return on average common equity was 9.55% for the three
months ended March 31, 1999, compared with 10.24% for the same period
in 1998. Return on average assets was 0.49% for the three months
ended March 31, 1999, compared with 0.60% for the same period in 1998.
Delinquent loans as a percentage of total loans receivable were 0.44%
at March 31, 1999, compared with 0.53% at March 31, 1998.
Nonperforming assets were 0.47% of total assets at March 31, 1999,
compared to 0.70% at March 31, 1998. Sterling's loan loss reserves
were at 0.89% of net loans at March 31, 1999, an increase from 0.87%
at March 31, 1998.
Sterling Financial Corporation of Spokane, Washington, is a savings
and loan holding company which owns Sterling Savings Bank. Sterling
Savings Bank is a Washington State-chartered, federally insured stock
savings association which opened in April 1983. Sterling Savings
Bank, based in Spokane, Washington, has branches throughout
Washington, Idaho, Oregon and western Montana. Through Sterling's
wholly owned subsidiaries Action Mortgage Company and INTERVEST-
Mortgage Investment Company, it operates loan production offices in
Washington, Oregon, Idaho and western Montana. Sterling's subsidiary
Harbor Financial Services provides non-bank investments, including
mutual funds, variable annuities, and tax-deferred annuities, through
regional representatives throughout Sterling Savings' branch network.
ANY TREND OR FORWARD-LOOKING INFORMATION INCLUDED IN THIS PRESS
RELEASE IS SUBJECT TO NUMEROUS POSSIBLE RISKS AND UNCERTAINTIES.
THESE INCLUDE, BUT ARE NOT LIMITED TO: THE POSSIBILITY OF ADVERSE
ECONOMIC DEVELOPMENTS WHICH MAY, AMONG OTHER THINGS, INCREASE DEFAULT
AND DELINQUENCY RISKS IN STERLING'S LOAN PORTFOLIOS; SHIFTS IN
INTEREST RATES WHICH MAY RESULT IN LOWER INTEREST RATE MARGINS;
CHANGES IN ACCOUNTING POLICIES; CHANGES IN THE MONETARY AND FISCAL
POLICIES OF THE FEDERAL GOVERNMENT; CHANGES IN THE REGULATORY AND
COMPETITIVE ENVIRONMENT, AND OTHER RISKS. STERLING'S FUTURE RESULTS
MAY DIFFER MATERIALLY FROM HISTORICAL RESULTS AS WELL AS FROM ANY
TREND OR FORWARD-LOOKING INFORMATION INCLUDED IN THIS RELEASE.
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