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Q and A: Sterling’s next steps

Fri., Oct. 16, 2009

Q. What do regulators want Sterling Financial to do?

A. The biggest requirement calls for the bank holding company to raise $300 million within 60 days.

Q. How can it do that?

A. Through private investment or by being acquired by another bank.

Q. What happens if it doesn’t raise the money?

A. Although unlikely, regulators could take over.

Q. Didn’t Sterling take federal bailout money?

A. Yes, Sterling borrowed $303 million through the Troubled Asset Relief Program.

Q. Does it have to pay that money back, too?

A. Yes.

Q. How did Sterling get into trouble?

A. Like many banks, Sterling loaned against real estate that’s now worth less than the principal.

Sources: Staff research, Sterling Financial Corp., Yahoo Finance

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