U.S. Treasury bailout aided bank’s turnaround
Sterling Financial Corp. earned a $39.1 million profit in 2011, continuing its turnaround from near-collapse during the height of the nation’s financial crisis.
According to financial reports released Wednesday, Sterling’s loss the previous year – 2010 – was $756.1 million. Most of that was due to accounting maneuvers and loan write-offs.
For the fourth quarter, Sterling – the parent company of Sterling Savings Bank – said it earned $14.8 million, or 24 cents per share, compared with a loss of $642.7 million, or $12.79 per share, in the same quarter the previous year.
The well-documented rescue of Sterling required a $180 million U.S. Treasury bailout. The return for that federal intervention: hundreds of jobs saved in the heart of Spokane and the preservation of one of the Northwest’s largest lenders.
Sterling last year nearly tripled the number of new loans made and trimmed costs.
“Our fourth quarter and full year 2011 financial results reflect the continued focused execution on our basic banking strategy,” said Sterling Financial’s Chief Executive Officer Greg Seibly. “Despite headwinds to a broad economic recovery and a difficult interest rate environment, Sterling is well-positioned to continue to achieve performance improvement in 2012. We expect this will be driven principally by additional growth in quality loan originations.”
Before its financial troubles much of Sterling’s outstanding stock was held by individuals and mutual funds. Those investors lost most of their investment as Sterling issued millions of new shares and then engineered a reversed stock split that diluted the value of the stock.
Today two large private equity funds own more than 41 percent of the recapitalized bank. Together with other such institutional investors and a handful of mutual funds, Sterling is more than 85 percent owned by large investors.
Sterling has assets of $9.19 billion and operates 175 branches throughout Washington, Oregon, Idaho, Montana and California.