December 8, 2009 in Business

Sterling Savings to miss deadline

Bank was to add capital by Dec. 15
By The Spokesman-Review
 

Seibly
(Full-size photo)

Sterling Financial Corp. Chief Executive Officer Greg Seibly said it will probably be the first quarter of 2010 before subsidiary Sterling Savings Bank raises $300 million in new capital.

Federal and state regulators had given Sterling until Dec. 15 to secure investment sufficient to bring its capital level up to 10 percent, or $1 in equity for every $10 in assets like loans.

The demand was among several included in a cease-and-desist order issued in October by the Federal Deposit Insurance Corp. and the Washington Department of Financial Institutions.

Seibly noted Sterling is not the only bank in need of more money.

“Sterling is working closely with its regulators, who have demonstrated flexibility with other banks that were showing meaningful progress in their capital-raising efforts,” he said in a statement.

Executive Vice President Dave Brukardt said the FDIC and the Department of Financial Institutions were aware that Sterling planned to issue the Thursday statement with Seibly’s comments.

The agencies are monitoring Sterling’s progress, he added.

Sterling, like several Washington banks, has reported severe losses on loans to contractors who are unable to sell completed homes or empty lots.


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