Sterling in Washington Reports Higher Profit on Acquisitions

Sterling Financial (STSA) in Spokane, Wash., posted higher quarterly profit that was aided by recent acquisitions.

The $10.3 billion-asset company's fourth-quarter earnings rose 6% from a year earlier, to $22.2 million. Earnings per share of 33 cents were on target with the average estimate of analysts polled by Bloomberg.

Sterling agreed in September to sell itself to Umpqua Holdings (UMPQ) in Portland, Ore. The deal is expected to close in the second quarter.

Sterling's net interest income rose 11% from a year earlier, to $84.4 million. Its loan portfolio grew by 20%, aided in part by recent acquisitions of Borrego Springs Bank, Commerce National Bank and the Puget Sound operations of Boston Private Bank & Trust during 2013. The net interest margin widened by 9 basis points from a year earlier, to 3.58%.

Noninterest income fell 7% from a year earlier, to $29.1 million. A steep decline in mortgage banking revenue was partially offset by increased income from fees and service charges related to the company's acquisitions.

Noninterest expenses climbed fell by 6% from a year earlier, to $84.4 million, largely because of lower costs from other real estate owned and employee compensation and benefits. The company's fourth-quarter noninterest expense also included $3.6 million in merger costs.