Sterling banks are 'pleased' with offer

SPOKANE — Officials with Sterling Savings said they are pleased with an offer from the U.S. Treasury to help the company rebuild.

They are converting Treasury-held Sterling shares into common stock.

Sterling has branches in Moses Lake, Othello and Coulee City, as well as throughout the Northwest.

Cara Coon, vice president/communications manager with Sterling Financial Corp., parent company of Sterling Savings, said the news coming from the U.S. Treasury is a “positive step.”

“Granted, there are stipulations with that, with converting the shares to common stock,” Coon explained.

The agreement between the corporation and the U.S. Treasury is conditional, meaning Sterling Financial Corp. must raise $650 million, said David Brukardt, executive vice president/chief financial officer, Sterling Financial Corporation.

“Since last fall, we have been focused on our need to raise capital, this is the next step in that,” Brukardt said.

Sterling asked its trust preferred shareholders to convert stock and is in the process of reviewing proposals from private equity firms, he said.

“We’re making progress on all three of the fronts,” Brukardt said.

He described Sterling Savings as a business bank and said most of the difficulty for banks in general is with real estate loans.

“Each of these loans was made in good faith, at a time when markets were different,” Brukardt said. “We’re no longer focused on that part of the business.”

The challenges banks are facing are related to non-performing loans, either in commercial real estate or residential real estate, he said.

The issue is related to economy around the Northwest and the country.

He attributed the problem to the downturn in the economy.

“The important thing is, is the announcement marks the next step in our process to rebuild and recapitalize the bank over time,” Brukardt commented. “We were pleased to have the U.S. Treasury support our request to them.”

Coon said the company expects the process to go into the first quarter, understanding that the quarter end is coming up.

“It’s not something we can rush, she said. “We’re working diligently to get this completed.”

She pointed out that Sterling Savings is an FDIC-insured bank, meaning customers’ deposits are insured for $250,000 per qualifying account.

According to the FDIC’s Web site, “no customer has ever lost a single penny of insured deposits” in the FDIC’s 75 years of existence.

Sterling Financial Corp. has banks throughout Washington, Oregon, Idaho, Montana and California.

There is a total of 25 employees in Sterling Savings Bank’s locations in Moses Lake, Othello and Coulee City.