Washington State Department of Financial Institutions

News Release

Tuesday, September 28, 2010

Contact

Lyn Peters, Director of Communications
PH (360) 349-8501 lyn.peters@dfi.wa.gov

Brad Williamson, DFI Director, DFI Division of Banks
PH (360) 902-8704 banks@dfi.wa.gov

FOR IMMEDIATE RELEASE:


Washington Department Of Financial Institutions, FDIC Lift Cease & Desist Order Against Sterling Savings Bank Of Spokane

OLYMPIA – The Washington State Department of Financial Institutions (DFI) and the Federal Deposit Insurance Corporation (FDIC) terminated the cease and desist order (PDF)* against Sterling Savings Bank put in place October 09, 2009, acknowledging Sterling’s successful efforts to recapitalize and meet specific operational requirements.

Since the cease and desist order was put in place, Golf Savings Bank was merged into Sterling Savings Bank with regulatory approval in June 2010, agreements were secured to raise $730 million in new capital and Sterling received approval for Robert H. Hartheimer - a former FDIC division director, regulatory consultant and investment banker - to join the board of directors.

“We are pleased to see Sterling succeed in its efforts to meet the recapitalization requirements cited in the cease and desist order, as well as the required actions providing more safe and sound operations,” DFI Director of Banks Brad Williamson said. “It’s unfortunate to see Washington’s financial institutions struggling in this difficult economy. It is also, in part, what makes Sterling’s recapitalization and operational improvements so encouraging.”

Greg Seibly, president and CEO of Sterling Financial Corporation, said in a release Monday night “Going forward, Sterling anticipates maintaining a Tier 1 capital ratio above 8 percent, which surpasses the current ‘well-capitalized’ standard for banks and the proposed Basel III global banking standards.”

“Sterling’s success is proof that a cease and desist order is not a death-knell for Washington’s banks, but rather a call to action,” DFI Director Scott Jarvis noted. “When a financial institution’s leaders take aggressive, well-planned, corrective action, success can be found at the end in safe and sound business practices – and in strong community and employee support.”


About Division of Banks
www.dfi.wa.gov/banks ▪ 360.902.8704 ▪ 877.RINGDFI (746.4334) x 28704
The Washington State Department of Financial Institutions Division of Banks regulates 78 Washington State-chartered commercial banks, stock savings banks, mutual savings banks, foreign banks, savings and loan associations and independent trust companies. We charter new banks, business development corporations, trust companies, foreign banks and savings & loan associations. Also, we authorize new branches and branch closures; and approve mergers & acquisitions. Learn more about the Division of Banks.

About DFI
www.dfi.wa.gov ▪ 360.902-8700 ▪ 877.746-4334
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information: http://www.twitter.com/FinEd4All, www.twitter.com/DFIConsumers, www.finlit.blogspot.com, www.youtube.com/user/WADFI, www.homeownership.wa.gov.

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