Sterling workers’ fine service kept bank afloat, COO says
Sterling Financial Corp. survived because employees did not let its capital woes break their focus on customer relationships, Chief Operating Officer Ezra Eckhardt said Thursday.
Meanwhile, he said, officers worked to convince investors that Sterling could prosper if they kicked $720 million into a recapitalization plan that would satisfy regulators anxious about its dwindling reserves.
The recapitalization was completed in August.
Eckhardt said that with only about $100 million needed to complete the plan, a group of South Korean investors turned up.
Chief Executive Officer Greg Seibly, who traveled to Seoul for a meeting, was able to make the connection in part because he taught English in a Korean high school after graduating from college.
Also, the U.S. Treasury swapped its $303 million in preferred Sterling stock for common stock at an 80 percent discount, a conversion Eckhardt said is unique for banks that participated in the federal Capital Purchase Program.
The Treasury Department now owns about 8 percent of Sterling, he said.
Eckhardt said Sterling will rely on basic banking to expand a franchise that encompasses 178 branches in five states, and about 2,500 employees who won the J.D. Power and Associates Award for customer service in the Northwest while the recapitalization effort was under way.
Sterling, like many other banks, got overextended during the years leading up to the financial crash of 2008, he said. It will not again let itself be over-reliant on one type of loan, as it was with its construction portfolio.
The bank is carrying only $500 million in those loans on its books, down from $3.5 billion, said Eckhardt, who could not discuss earnings ahead of their release next week.
He said the stress caused by its capital crisis revealed the character of Sterling and its employees.
“We had a chance, and we made that chance happen,” he said.