The Federal Reserve Bord of Governors today released the text of an agreement signed with Spokane-based Sterling Financial Corp. demanding that the company make certain adjustments to its management and capital plans.
The Fed, Sterling’s principle regulator, said among other things that the company has agreed to several orders. Among them:
• The company will submit a plan to strengthen risk management, including considerations of such matters as the effectiveness of its board of directors and the adequacy of risk assesments.
• The company shall not pay dividends unless given permission.
• Sterling and its subsidiaries shall not incur, increase or guarantee any debt without permission.
• Sterling shall prepare a plan to maintain sufficient capital. The plan will include consideration of such matters as the adequacy of capital, allowance for losses and the source and timing of additional funds necessary to fulfill future requirements.
• The company shall submit a detailed plan that identifies sources of additional funding and plans for a possible “adverse scenario.”
The company had no immediate comment on the agreement.
Sterling announced earlier this month that it had been notified by the NASDAQ stock exchange that company stock could be delisted from trading if certain minimum standards were not reached during the New Year. Trading as STSA, Sterling shares rose 1 cent Thursday to close at 62 cents. The stock is down nearly 93 percent over the year, according to Bloomberg figures.