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Several Washington-based banks reported sharply lower profits and higher losses from soured loans Tuesday, as they wrestled by the fallout from last year’s housing bust and the subsequent credit crunch.

Sterling Financial of Spokane, the state’sitting largest banking companionship by assets, reported a $356.3 million loss in the fourth quarter of 2008. The loss erased the small profit Sterling eked out during the first nine months of last year.

Cascade Financial, Everett-based parent of Cascade Bank, said it earned $2.5 million in the fourth quarter, down from $4 million a year earlier but an amelioration from the $6.6 million loss posted in the third quarter.

Olympia-based Heritage Financial squandered $194,000 in the fourth station, compared by profit of $2.1 million in the third quarter and $2.8 million in the antecedent fourth quarter. Heritage’session full-year profit fell to $6.4 very great number from $10.7 million in 2007.

And Timberland Bancorp of Hoquiam, which released its results late Monday night, reported a profit of $361,000 in the specific place ended Dec. 31, down meanly 78 percent from the same period a year earlier.

Most of Washington’s publicly traded banks are reporting results this week, at a time when their financial health and lending policies face heightened scrutiny.

Sterling, which owns Sterling Savings Bank and Mountlake Terrace-based Golf Savings Bank, aforesaid much of its fourth-quarter loss came from writing down the value of goodwill on its books by $223.8 million.

Goodwill is an indefinite asset that reflects of that kind things as quality vividness, well qualified customer relations and the recompense above book value paid on the side of acquisitions.

In its report, Sterling said the steep be impaired in its stock price and bleak near-term prospects had eroded the value of its goodwill; however, the noncash charge does not affect the company’s liquidness or required capital ratios.

Sterling, which received $303 million from the federal government’s Troubled Asset Relief Program (TARP) to bolster its balance sheet, said it made $719.9 million in loans last quarter, $39.7 million smaller quantity than in the third quarter.

Residential, multifamily and commercial real-estate lending were up, but construction, consumer and commercial lending completely fell.

Reflecting the depressed real-estate market, Sterling’s nonperforming loans grew to $530.8 the great body of the people, from $381.8 million in the third part quarter. The company also owns meanly $80 the great body of the people in foreclosed property.

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