Sterling Financial, the parent company of Sterling Savings, said the Federal Reserve Bank of San Francisco has lifted restrictions imposed on the company in 2009 when its financial health was in question.
Sterling Financial, the parent company of Sterling Savings, said Friday that the Federal Reserve Bank of San Francisco has lifted restrictions imposed on the company in 2009 when its financial health was in question.
The regulatory order was the last one covering the company, said Sterling spokeswoman Cara Coon.
In 2009, the San Francisco Fed placed restrictions on the parent company paying dividends or incurring debt, and the Federal Deposit Insurance Corp. and the state Department of Financial Institutions issued a regulatory order requiring the bank to raise $300 million in new capital, shrink its portfolio of problem loans and improve operations. The top executives of the bank and holding company stepped down at the same time.
Regulators were concerned about the bank’s finances because bad loans were eroding its capital base.
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In late 2010, however, Sterling raised $730 million from a private equity group, resolving its capital problems.
The FDIC and state banking regulators loosened their restrictions soon after the capital was raised, but didn’t lift their regulatory order completely until January. The San Francisco Fed’s restrictions were eliminated March 5, Sterling said.