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October 15, 2009 in Business
Sterling revamps executive lineup
Co-founder, bank’s chairwoman are out
Sterling Financial Corp. on Wednesday announced the appointment of a new executive team and the departures of longtime Chairman Harold Gilkey and Heidi Stanley, chairwoman of the subsidiary Sterling Savings Bank.
The board of directors named Director William Eisenhart as acting, nonexecutive chairman. J. Gregory Seibly was named acting president and chief executive officer, and Ezra Eckhardt was named acting chief operating officer.
In a statement by Eisenhart released late Wednesday afternoon, the bank said the changes took effect immediately.
Sterling, with $12.4 billion in assets, is the largest bank based in Washington. It has struggled with steep losses, particularly on real estate loans. In August, the company announced it would defer interest payments on notes and preferred stock, triggering a sell-off of its common shares that dropped the price 20 percent, to $2.42. The shares closed Wednesday at $1.66.
“The board is committed to taking the actions necessary to respond to the challenges that face Sterling,” Eisenhart said Wednesday. “The board is bringing in a new generation of management to lead the efforts to strengthen Sterling’s capital and liquidity positions.”
Gilkey, 70, co-founded Sterling in 1983 and had been its chairman since. He was also corporate CEO and president, director of Sterling Bank and CEO of Golf Savings Bank, another Sterling holding.
Stanley, 53, joined the bank in 1985. She became its CEO in 2008 and chairwoman earlier this year.
Eisenhart credited both for building a franchise that expanded from one branch in Spokane to 175 in Washington, Idaho, Montana, Oregon and California.
“Harold did what many banking executives strive to do but few accomplish,” he said. “Heidi played a central role in the growth of Sterling,” in the process building its corps of experienced bankers.
Seibly, 46, also takes over as acting CEO of the bank and Golf Savings Bank.
Eckhardt, 39, will be Sterling Bank’s acting president.
Donn Costa, 47, becomes acting president of Golf.
The appointments will become permanent when approved by the bank’s regulators, the statement said.
Caldwell: West Point trained local bankers to survive 
zelda on October 15 at 9:43 a.m.
This doesn’t even begin to tell the story, folks. Sterling got a cease-and-desist order from regulators and its stock is down 23% in current trading.
According to the Seattle Times —
The departures came as the company disclosed an agreement with the Federal Deposit Insurance Corp. and the state Department of Financial Institutions that requires Sterling to improve its lending procedures, increase board oversight, and raise $300 million by December 15.
The agencies found Sterling “had engaged in unsafe or unsound banking practices and violations of law and/or regulations,” the order says.
It cites Sterling for “operating with inadequate board of directors oversight; operating with inadequate capital in relation to the kind and quality of assets held by the Bank; operating with a large volume of poor quality loans; and operating in such a manner as to produce operating losses.”
It also requires the bank to take steps to “have and retain qualified management,” subject to approval by the FDIC.
spokanada on October 15 at 10:28 a.m.
good thing they got a government bailout. The left hand gives them money and the right hand gives thema cease and desist.
Pat O'Leary on October 15 at 5:52 p.m.
“inadequate board of directors oversight”…sounds just like it was heading the same direction as WAMU….and may yet get there.