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) July 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)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
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Sterling Financial Corporation announces second quarter earnings for
the period ended June 30, 1999.
See attached information release.
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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)
July 28, 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 July 22, 1999 9 a.m. PST Contact: Heidi B. Stanley
358-6160
STERLING FINANCIAL CORPORATION
OF SPOKANE, WASHINGTON, ANNOUNCES
1999 SECOND QUARTER EARNINGS
Spokane, Washington July 22, 1999--Sterling Financial Corporation
(NASDAQ:STSA) today announced net income of $3.2 million, or $0.40 per
diluted share, for the three months ended June 30, 1999. This
compares with a net loss of $873,000, or ($0.11) per diluted share,
for the prior year's comparable period. Net income for the six months
ended June 30, 1999 was $6.1 million, which compares with a net income
of $2.0 million for the six months ended June 30, 1998. The June 1998
quarter was impacted by acquisition costs and other charges. The
increase in net income is primarily due to increases in net interest
and other income, coupled with the non-recurrence of branch conversion
costs.
Net interest income of $18.8 million for the three months ended
June 30, 1999 reflected a 38.3% increase, compared with $13.6 million
for the same period in the prior year. For the six months ended
June 30, 1999, net interest income was $36.5 million, compared with
$26.0 million for the same period in 1998. The increases in net
interest income for the current three-month and six-month periods
primarily were due to: (1) an increase in the volume of average
interest-earning assets, which increased to $2.22 billion for the
quarter ended June 30, 1999, compared with $1.89 billion for the
comparable period a year ago; and (2) a lower cost of funding, which
is primarily a result of the June 1998 KeyBank branch acquisition.
Harold B. Gilkey, Chairman and CEO, stated, "We have made substantial
progress in becoming more bank-like. Business and consumer loans now
represent 38.0% of total loans and checking accounts represent 18.2%
of deposits." He added that Sterling's net interest margin increased
to 3.39% during the most recent quarter, the highest level in recent
years.
Total assets increased approximately 17.1% to $2.51 billion at
June 30, 1999, compared with $2.14 billion at June 30, 1998. Net
loans receivable increased 32.2% to $1.71 billion at June 30, 1999,
compared with $1.29 billion at June 30, 1998. Total deposits
increased 2.7% to $1.61 billion at June 30, 1999, compared with $1.57
billion at June 30, 1998.
Mr. Gilkey also indicated that total loan production increased 39.3%
for the first six months of 1999 to $655.0 million, compared with
$470.3 million for the same period last year. Increases during the
period primarily were in community bank-like loans, which include
business banking, construction, consumer and commercial real estate.
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During the three months ended June 30, 1999, total loan production was
$314.3 million, compared with $262.6 million for the same period in
1998.
Other income was $3.1 million for the three months ended June 30,
1999, compared with $2.0 million for the three months ended June 30,
1998. For the six months ended June 30, 1999 and 1998, other income
was $6.6 million and $5.0 million, respectively. The increases in
both periods primarily were due to the fees and service charges from
an increased level of checking accounts. Operating expenses were
$15.7 million for the three months ended June 30, 1999, compared with
$14.2 million for the three months ended June 30, 1998. Operating
expenses were $31.6 million and $24.3 million for the six months ended
June 30, 1999 and 1998, respectively. The increases in operating
expenses during both periods primarily were due to increased personnel
costs associated with new branches and with increased community bank
lending staff.
Sterling's return on average common equity was 10.69% for the three
months ended June 30, 1999, compared with (3.06%) for the same period
in 1998. Return on average common equity for the six months ended
June 30, 1999 was 10.13%, compared with 3.48% for the same period in
1998. Return on average assets was 0.54% for the three months ended
June 30, 1999, compared with (0.17%) for the three months ended
June 30, 1998. Return on average assets was 0.51% for the six months
ended June 30, 1999, compared with 0.20% for the six months ended
June 30, 1998. The increases in these ratios were due to the
aforementioned increases in net income.
Delinquent loans as a percentage of total loans receivable were 0.55%
at June 30, 1999, compared with 0.51% at June 30, 1998. Nonperforming
assets were 0.53% of total assets at June 30, 1999, compared with
0.51% at June 30, 1998. Sterling's loan loss reserves were at 0.87%
of net loans at June 30, 1999, a decrease from 1.11% at June 30, 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. Sterling Savings Bank, based in Spokane,
Washington, has branches throughout Washington, Idaho, northwestern
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 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.
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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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