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| 8-K - FORM 8-K - STERLING FINANCIAL CORP /WA/ | d8k.htm |
 Annual Meeting
of Shareholders
April 21, 2011
Ticker: STSA
Spokane, Washington
www.sterlingfinancialcorporation-spokane.com
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Exhibit 99.1 |
 SLIDE 2
Safe Harbor
In
the
course
of
our
presentation,
we
may
discuss
matters
that
are
deemed
to
be
forward-looking
statements,
which
are
intended
to
be
covered
by
the
safe
harbor
for
“forward-looking
statements”
provided
by
the
Private
Securities
Litigation
Reform
Act
of
1995
(the
“Reform
Act”)
(1)
.
Forward-looking
statements,
including
those
relating
to
our
position
and
strategy
as
a
result
of
our
recapitalization
transactions
discussed
herein,
involve
substantial
risks
and
uncertainties,
many
of
which
are
difficult
to
predict
and
are
generally
beyond
our
control
and
actual
results
may
differ
from
management’s
view
and
our
projected
financial
results.
We
assume
no
obligation
to
update
any
forward-looking
statements
(including
any
projections)
to
reflect
any
changes
or
events
occurring
after
the
date
hereof.
Additional
information
about
risks
of
the
company
achieving
results
suggested
by
any
forward-
looking
statements
may
be
found
in
the
company’s
10-K,
10-Q
and
other
SEC
filings,
including
under
the
headings
“Risk
Factors”
and
“Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations.”
(1) The Reform Act defines the term "forward-looking statements"
to include: statements of management plans and objectives, statements
regarding the future economic performance, and projections of revenues and other financial data,
among others. The Reform Act precludes liability for oral or written
forward-looking statements if the statement is identified as such
and accompanied by "meaningful cautionary statements identifying important factors that could cause
actual results to differ materially from those made in the
forward-looking statements." |
 Based in Spokane, Wash.,
Sterling is one of the largest
commercial banks
headquartered in the Pacific
Northwest
(1)
More than 25,000 commercial
accounts and nearly 200,000
retail deposit accounts
$6.7 billion of deposits with an
average cost of 1.01%
(3)
Source: SNL Financial, Company filings
Note: Financial data as of March 31, 2011.
(1)
Pacific Northwest defined as Idaho, Oregon, and Washington.
(2)
Deposit market share data as of 6/30/2010.
(3)
For the quarter ended March 31, 2011
Franchise at a Glance
SLIDE 3 |
 STSA: Promises
Delivered 2010/2011 Successful $730 million recapitalization (August
2010) Anchors Warburg Pincus and Thomas H. Lee Partners, plus
approximately 30 additional investors
U.S. Treasury preferred ($303 million) converted to common stock
C&D lifted in September; replaced with MOU
Execution of strategic plan well under way
Cost-effective funding/low-cost deposit initiatives
Improvements in asset quality; reductions in NPLs
Relationship-based, commercial bank focus
Cost control and synergies, including Golf merger into Sterling
Positioned for profitable growth with initial results in
Q1 2011
SLIDE 4 |
 STSA: Promises
Delivered 2010/2011 Fortified management and board leadership driving
future success Les Biller, chairman; anchor investors hold board
seats 11-member board with new directors adding banking/financial
experience
New CCO, Dave DePillo; New CFO, Pat Rusnak
SLIDE 5 |
 Performance
Highlights - 2010
Quality deposit metrics continued to drive down cost
of funds
Improving mix
Deposit costs decreased 14 bps in Q4 and 73 bps during 2010
Improvements in asset quality
Experienced a reduced Q4 2010 provision for credit losses of $30
million, compared to $340 million in Q4 2009
NPAs at year end were down 17% from prior year end
Construction loan exposure reduced by $990 million, or 65%,
during 2010
Core franchise strength focused on delivering profitability
(1)
Excludes a one-time, non-cash charge for the conversion of preferred stock
to common stock. The Q4 2010 net loss attributable to common shareholders was $642.7
million, or $12.79 per common diluted share. Full-year financial results are
reported in the Annual Report to Shareholders on Form 10-K as filed with the SEC.
SLIDE 6 |
 Formula for
Success Cost-
Effective
Funding
Improved
Asset
Quality
High
Quality,
Relationship
Based Asset
Generation
Expense
Control
Profitable
Growth
Focus on Customers
Delivering value proposition to customers
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Fair pricing
•
Competitive products and services
Resolving credit challenges
Increased emphasis on sales and business development
Intelligent market segmentation
Expense control and organizational efficiency
Simplified, “Back to Basics”
banking drives growth
Strategic expansion in key markets and lines of business
Managing through emerging regulatory changes
SLIDE 7 |
 Improving quarterly results
Reported Q1 net income of $5.4 million
Compares to loss of $88.8 million for Q1 2010
Reduced credit provisioning
Provision for Q1 credit losses totaled $10.0 million
Compares to $88.6 million provision for Q1 2010
Declining levels of non-performing loans (NPAs)
NPAs of $628.8 million, reflecting a 41% decline compared to
$1.06 billion of NPAs at March 31, 2010
Focus on liquidating OREO, note sales, short sales and other workouts
Net interest margin of 3.22%, up 37 bps from Q1 2010
Average cost of deposits declined by 44 bps from Q1 2010
SLIDE 8
2011 Q1 Selected Operating Highlights |
 Improving Trend
in Classified and Non-Performing Assets SLIDE 9
|
 Improving Trends
Summary (Q1 2011 vs. Q1 2010) Improved asset quality and reduced credit
provisioning
Classified assets
50%
Non-performing assets
41%
Non-interest expense
8%
Provision for loan losses
89%
Increased margins and capital
Net interest margin
13%
Non-interest income
19%
Shareholder equity
216%
SLIDE 10 |
 Fortified balance sheet
Strong capital position –
exceeds regulatory
level required for “well-capitalized”
status
Reduced construction loans and NPLs
Improved mix of core deposits
Executing on our strategic plan
Core deposit growth will drive
NIM and earnings
Continued reductions in high-risk assets
Working to strengthen profitability in 2011
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Growth in business and consumer lending
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Controlled operating expenses
Building one of America’s great
community banks
SLIDE 11
Stability and Platform for Growth |
 Annual Meeting
of Shareholders
April 21, 2011
Ticker: STSA
Spokane, Washington
www.sterlingfinancialcorporation-spokane.com
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