Sterling Bancshares posts 3Q loss on loan charges

Sterling Bancshares post 3rd-quarter loss on higher provisions for loan losses

• On 4:59 pm EDT, Thursday October 22, 2009

HOUSTON (AP) -- Texas bank holding company Sterling Bancshares Inc. on Thursday posted a third-quarter loss, reversing a year-ago profit, as the weak economy forced the company to set aside more money to cover loan losses.

The quarterly loss totaled $6 million, or 7 cents per share, compared with profit of $7 million, or 10 cents per share, in the same quarter a year ago.

Net interest income, or revenue from interest accounts like loans and deposits, fell 3 percent to $48 million from a year ago. Noninterest income, or revenue from mortgage loan service fees and other fees and charges, fell 7 percent to $9 million.

CEO J. Downey Bridgwater said in a statement that the results were disappointing.

"The current economic environment led to an increased provision for loan losses and elevated charge-offs," he said in a statement.

As of Sept. 30, the company's allowance for credit losses was $58 million, or 1.7 percent of total loans, up from $54 million, or 1.5 percent of loans a year ago.

Nonperforming assets fell to $119 million, or 2.4 percent of total assets, from $123 million, or 2.5 percent of the total, primarily due to charge-offs of $24 million.

Shares closed down 19 cents, or 2.9 percent, at $6.33, and fell 3.5 percent to $6.11 in aftermarket trading.