Sterling Financial Corp. of Spokane, Wash., has laid off 6% of its full-time employees as it works to reach an ambitious efficiency ratio goal by 2013.
The $9.2 billion-asset company said in a regulatory filing on Friday that it will record roughly $3 million in severance related expenses in the first quarter but will save $12 million in 2012 from the staff reductions.
About 160 employees were given pink slips in the last two weeks as the bank's staff was shrunk to roughly 2,400 employees, Sterling spokeswoman Cara Coon said Tuesday. Coon said that the bank had to reduce staff as its assets have declined from $12.8 billion three years ago to just over $9 billion currently.
The layoffs were first reported by North Bay Business Journal in Northern California.
"Given the challenging interest rate environment and the uncertain economic outlook, Sterling must position itself for continued success, including lowering its operating expenses," Greg Seibly, Sterling's president and chief executive, said in the filing. "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 is also looking to improve efficiency and decrease costs through reductions in Federal Deposit Insurance Corp. insurance, ongoing vendor assessments and a review of its branches and facilities, the filing said.
Sterling is working to reduce its efficiency ratio to less than 60% by 2013. At Dec. 31, its operating efficiency ratio was 77%.
Sterling is in the process of buying the $792 million-asset First Independent Bank in Vancouver, Wash., the unit of First Independent Investment Group. About 8% of First Independent's employees will lose their jobs or retire when that deal is closed on Feb. 29.