Sterling Bancshares Posts Declining Earnings

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On April 23, 2009, Sterling Bancshares(SBIB Quote) reported a 52.4% decline in its Q1 FY09 earnings, hurt by higher provisions for credit losses and non-interest expenses. Net income available to common shareholders plunged to $5.52 million, or $0.08 per share, from $11.61 million, or $0.16 per share, in the prior-year quarter. The quarterly earnings missed the consensus estimate of $0.10 per share.

Total interest income dropped 11.5% to $62.46 million from $70.57 million a year ago, due to a decrease in interest income from loans, including fees. Interest income from loans, including fees, fell 15.9% to $53.00 million. Total interest-earnings assets increased 10.5% to $4.60 billion, while yield on earnings assets dipped 131 basis points to 5.55%. Total interest expense decreased 38.2% to $13.95 million, as the average rate paid on interest-bearing liabilities lowered 127 basis points to 1.74%. As a result, net interest income before provisions for loan losses inched up 1.1% to $48.51 million from $48.00 million. Tax equivalent net interest margin deteriorated to 4.32% from 4.67% a year ago. Finally, non-interest income decreased marginally to $10.80 million from $10.72 million, as higher customer service fees was offset by lower wealth management fees. Moreover, consolidated efficiency ratio worsened to 66.12% from 62.34% in the year-ago quarter. ...