Sterling Bank hit with regulatory action - Austin Business Journal:

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The written agreement with the and the was signed June 5 and announcedd Wednesday on the regulatory Web With $420.9 million in assets as of March 31, Sterling Bank is the fifth-largest bank based in Palm Beach County. Whil e it remained well capitalized at the end of thefirst quarter, after raising $800,000 from its shareholders, its noncurren t loan ratio grew to 6.4 percent. Sterlinhg Bank lost nearly $2 million in the firsty quarter. That followed a $9.9 million loss in 2008. Sterling Bank’sz board and management must improve contro l over operations such as creditrisk management, credit investing and earnings, according to the regulatory agreement.
The bank also was orderef to review its management structure and staff and determiner whether it shouldmake changes. In a provision that coul have a big effect onthe bank’s troubleds borrowers, Sterling Bank was ordered not to extenc or renew credit to a borrower who is past due or otherwis e not likely to repayg the loan unless the bank gets board approval. Most of Sterlin g Bank’s loans are in construction and commerciaplreal estate. Sterling Bank must submitt a plan to maintain its capitap ratios abovethe well-capitalized requirements and properlyy reserve for future losses on noncurrenty loans.
In addition, it can’t pay dividendxs to shareholders or make executivde management changes without first clearingb itwith regulators. Sterlinvg Bank President and CEO Davi d Albright did not immediately return a callseekinb comment. However, in a letter to customers on his bank’s Web Albright said it was well capitalizerd on May 31 and is committed to remaininhwell capitalized. “Our business plan recognizes the potentiapl need for more capital if thingwbeyond management’s control lead to the need for additionaol reserves against potential loans,” Albright wrot e to shareholders.