Thursday, February 02, 2023
24.0°F

Movers & Shakers April 27, 2010

| April 28, 2010 9:00 PM

Sterling plans for recovery

Sterling Financial Corp. (NASDAQ:STSA), the bank holding company of Sterling Savings Bank and Golf Savings Bank, on Tuesday announced a recapitalization and recovery plan which includes an equity investment by Boston-based private equity firm Thomas H. Lee Partners, L.P. and an exchange transaction with the U.S. Treasury. Sterling also announced results for the first quarter ended March 31, 2010.

THL and Sterling entered into a binding letter agreement under which THL would invest about $134.7 million in Sterling.

Under the terms of the agreement, THL would purchase shares of common stock and shares of a newly-created Series B convertible participating voting preferred stock at a price of up to 20 cents per share of common stock and $75 per share of Series B stock. The common stock and the Series B stock would represent a pro forma ownership interest of 16.6 percent on an as-converted basis. THL would also receive a warrant with a seven-year term to purchase 168,383,759 shares of common stock exercisable at a price of up to 22 cents per share, representing a total investment of 19.9 percent. Following the investment and subject to required regulatory approvals, THL Managing Director Scott Jaeckel would join the Sterling board of directors.

The THL letter of intent includes entry into definitive documentation with the U.S. Treasury to exchange the 303,000 shares of Series A Fixed Rate Cumulative Perpetual Preferred Stock that it acquired for $303 million under the Treasury Capital Purchase Program for 303,000 new shares of Series C Fixed Rate Cumulative Mandatorily Convertible Preferred Stock with a liquidation preference of $303 million. Immediately prior to the closing of the THL investment, this new preferred stock would convert at a discounted exchange value of approximately $75.8 million into 378,750,000 shares of common stock at a conversion price of $0.20 per share. In addition, Treasury's outstanding warrant for 6,437,677 shares of common stock is expected to be amended to provide for an exercise price of 20 cents per share for a 10-year term following the THL investment.

THL's investment and the U.S. Treasury transaction would be conditioned upon each other and on other closing conditions, including Sterling raising a total of at least $720 million (inclusive of the THL investment), which will enable it to meet all of its regulatory capital requirements.

Sterling reported a net first-quarter loss of $88.8 million, or $1.71 per common share, including a provision for credit losses of $88.6 million. Sterling's first quarter 2010 results showed improvement over the fourth quarter 2009 results, which had a net loss attributable to common shareholders of $333.1 million, or $6.41 per common share, including a provision for credit losses of $340.3 million. Results for the comparable first quarter ended March 31, 2009, were a net loss attributable to common shareholders of $24.8 million, or $0.48 per common share, including a provision for credit losses of $65.9 million.

Ellenbecker selected optometric president

Dr. Wayne Ellenbecker of Ellenbecker Eye Clinic in Coeur d'Alene is serving as the president of the Idaho Optometric Physicians association for the year of 2010.

He has been a member of this board for six years prior to his appointment to president. As part of his duties, he will attend state and national meetings to discuss issues pertaining to the profession. The Idaho Optometric Physicians is an affiliate of the American Optometric Association and is the professional association representing Idaho state optometric physicians.

If you have a new, relocated or expanded business, or announcement of events, promotions or awards, The Press wants to let our readers know. The service is free and items run Tuesday through Saturday. To get the word on the street on your movers and shakers, call city editor Bill Buley at 664-8176 Ext. 2016 or e-mail bbuley@cdapress.com.

Recent Headlines