SANTA ROSA — Sterling Financial Corp., the Spokane, Wash.-based parent company of Sonoma Bank and Sterling Savings Bank, has cut 6 percent of staff across all levels of its 175-branch organization, according to a company spokeswoman.
The decision followed a 29 percent reduction in bank assets to $9.19 billion at the end of 2011, from a high of $12.82 billion in the first quarter of 2009, spokeswoman Cara Coon said. Sterling Financial had 2,496 full-time-equivalent employees at the end of 2011, and Sonoma Bank was reported to have 182 employees in November of that year.
“Given the challenging interest rate environment and the uncertain economic outlook, Sterling must position itself for continued success, including lowering its operating expenses,” said Greg Seibly, chief financial officer of Sterling Financial. “Sterling has fewer assets today than it did just a few years ago and, although this has been a difficult decision, the bank needs to appropriately reflect that reality.”
The company offered severance pay to employees affected by the reduction, though details were not disclosed.
Sterling acquired Northern Empire Bancshares, the former parent company of what was once Sonoma National Bank, in 2007. The move expanded the company’s presence to Northern California, and the bank has since continued operations locally as Sonoma Bank.
The bank was required, under order from the Federal Deposit Insurance Corp. and the Washington Department of Financial institutions, to strengthen its capital position following a cease and desist order in 2009. That order was lifted in Sept. 2010after a $730 million recapitalization effort.
In November 2011, Sterling announced a merger with First Independent Investment Group, the operator of the 14-branch First Independent Bank in Washington and Oregon.
The bank reported four quarters of earnings growth in 2011, with net income available to common shareholders of $39.1 million for the year. Non-performing assets decreased 55 percent for the same period. Net losses for the calendar year 2010 available to common shareholders were $756.1 million, a value related to non-cash accounting adjustments connected to the capital raise and the conversion of Sterling’s preferred stock to common stock, according to the report.
This story has been corrected to reflect the proper timeline in historic earnings.