UIButton with rounded corners using setBackgroundImage square

So, I am creating a button. I want it to have rounded corners without creating rounded .png files. I can set the background image in order. I can go around corners normally. However, when I set the background image, the rounded corners go away.

I did this once before, but can't get it to work again. How can I do that?

UIButton *button1 = [UIButton buttonWithType:UIButtonTypeCustom];
[button1 addTarget:self action:@selector(goSpecials)
  forControlEvents:UIControlEventTouchUpInside];
[button1 setTitle:@"Specials" forState:UIControlStateNormal];
button1.titleLabel.font = [UIFont fontWithName:@"Arial-BoldMT" size:(15.0)];
[button1 setTitleColor:[self colorWithHexString:buttonColor] forState:UIControlStateNormal];
button1.backgroundColor = [UIColor colorWithPatternImage: [UIImage imageNamed: @"button.png"]]; 
 //[button1 setBackgroundImage:[UIImage imageNamed:@"button.png"] forState:UIControlStateNormal];
button1.frame = CGRectMake(20.0, 232.0, 135.0, 32.0);
button1.layer.borderColor = [UIColor blackColor].CGColor;
button1.layer.borderWidth = 0.5f;
button1.layer.cornerRadius = 8.0f;
[self.view addSubview:button1];

button.png: