Sterling Financial reports 3Q earnings
Sterling Financial today announced its operating results for the quarter ended September 30, 2012. For the quarter, Sterling recorded net income of $30.6 million, or $0.49 per diluted common share, compared to $320.9 million, or $5.13 per diluted common share, for the quarter ended June 30, 2012, and $11.3 million, or $0.18 per diluted common share, for the quarter ended September 30, 2011. As previously reported, net income for the prior quarter included an income tax benefit of $288.8 million associated with the release of a deferred tax asset valuation allowance.
Gross loans were $6.14 billion, a 9 percent increase over September 30, 2011. Portfolio loan originations were $457.1 million, a 31 percent increase over the third quarter of 2011.
Deposit costs were reduced by 33 basis points compared to the third quarter of 2011. Income from mortgage banking operations was $28.5 million, up 74 percent over the third quarter of 2011. Nonperforming assets to total assets was 2.73 percent, down from 4.74 percent at September 30, 2011. Net charge-offs to average loans (annualized) was 0.37 percent, down from 1.99 percent for the third quarter of 2011. Tangible book value was $19.44 per common share, compared to $13.66 per common share at September 30, 2011. Tier 1 leverage ratio was 12.7 percent, compared to 11.1 percent at September 30, 2011.
The solid financial performance for the third quarter reflects Sterling's progress on our fundamental operating objectives, said Greg Seibly, Sterling's president and chief executive officer. We are growing loans and improving the mix and cost of deposits and asset quality metrics. Our management team remains focused on implementing initiatives to reduce our infrastructure costs.
Total loan balances were $6.14 billion at September 30, 2012, compared to $6.08 billion at the end of the prior quarter, and $5.62 billion at September 30, 2011. During the third quarter of 2012, Sterling originated $457.1 million of new portfolio loans (which exclude residential loans held for sale), compared to $458.6 million for the prior quarter and $348.4 million for third quarter of 2011.