Regulators lift order placed on Sterling Savings Bank
State and federal regulators have lifted the cease-and-desist order placed on Sterling Savings Bank nearly one year ago.
Sterling Financial Corp., the bank holding company, said Monday the move reflects Sterling Savings’ strengthened balance sheet and capital position; its progress to reduce the proportion of loans and other assets classified as nonperforming; and measures to realign its credit practices.
Sterling last month said it had arranged $730 million in new investment to bring the Spokane bank back into compliance with capital requirements 10 months after huge losses on construction and real estate loans brought it to the brink of failing.
“This regulatory recognition of our progress marks another important milestone in Sterling Savings Bank’s recovery efforts,” Greg Seibly, president and CEO of Sterling Financial Corp., said.
The Washington Department of Financial Institutions and Federal Deposit Insurance Corp. imposed a cease-and-desist order on the bank that forced out senior management and required $300 million in new capital to be raised by mid-December. Further markdowns on Sterling loans deepened the hole to be filled by new investment.
A $12.7 billion institution in June 2008, Sterling now has assets of $9.74 billion.