March 13, 2012 in City

Feds lift restrictions on Sterling Financial

By The Spokesman-Review
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Federal banking regulators have lifted restrictions against Sterling Financial Corp., the Spokane-based holding company of Sterling Bank.

The restrictions were imposed in October 2009 when the company’s financial health was shaken and its leaders were ousted.

Regulators engaged in enhanced oversight of both the holding company and its banking enterprise.

Sterling spokeswoman Cara Coon said the recent decision by the Federal Deposit Insurance Corp. to lift restrictions means Sterling has a clean slate.

“It’s the last regulatory oversight for the company,” she said. “We’ve completed this whole cycle of where we were in October 2009 to where we are now. It’s really a fresh start for us.”

The FDIC’s oversight from 2009 required Sterling to raise $300 million in capital and clean out many of its problem loans.

A year later, in late 2010, Sterling raised $730 million, easing the concerns of regulators who worried about the bank’s shrinking reserves.

With the termination of the oversight agreement, Sterling Financial no longer is required to obtain approval before paying dividends or taking dividends from its banking subsidiary.

The company also may incur debt or redeem stock, according to financial reports filed Friday.

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