OLYMPIA – The Washington State Department of Financial Institutions (DFI) and the Federal Deposit Insurance Corporation (FDIC) terminated the cease and desist order 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.”