SANTA ROSA -- Sterling Financial Corp. (NASDAQ: STSA), parent company of Santa Rosa-based Sonoma Bank, reported net income for the second quarter increased 22.5 percent from the first three months of 2013.
The company had net income of 27.8 million for the three-month period ended June 30, equivalent to 44 cents per diluted share. Net income for the same quarter one year ago was $320.9 million, driven largely by a one-time deferred tax asset.
Net interest income was $80.4 million for the quarter, up 4.55 percent from $76.9 million for the prior quarter.
The company saw organic year-to-year loan growth of 14 percent across its subsidiaries, which include Sonoma Bank and Borrego Springs Bank in California and Sterling Bank across the rest of its operating area in the western United States. Prior to its allowance for loan losses, Sterling had over $7 billion in loans as of June 30.
Sterling's net interest margin -- measuring the spread between interest income and interest expenses -- increased from 3.56 percent to 3.7 percent over the course of the year. Costs for deposits was 37 basis points at the end of the quarter, down from 58 percent during the same period last year.
The return on assets for the quarter was 1.17 percent, up 17 basis points from the prior quarter. Return on shareholder equity was 9 percent, compared to 7.5 percent as of March 31.
Credit quality has improved over the course of the year, with nonperforming assets representing 1.7 percent of total assets compared to 3.35 percent in 2012. The company had $9.9 billion in assets as of June 30.
Sterling also announced that it has completed a previously announced acquisition of the Puget Sound operations for Boston Private Bank & Trust, which added $278.5 million in performing loans and $168.2 million in deposits.