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Sterling Financial CEO: Our firm remains focused

Sterling Financial Corp. employees have responded to the company’s crisis by focusing on the work ahead of them, Chief Executive Officer and President J. Roger Moyer Jr. said.

Sterling Financial Corp. employees have responded to the company’s crisis by focusing on the work ahead of them, Chief Executive Officer and President J. Roger Moyer Jr. said.

“It’s serious, but it’s also focused,” Moyer said.

He praised the Lancaster County-based firm’s 1,100 employees for putting the interests of customers and shareholders well ahead of their own.

In a brief telephone interview June 14, Moyer said the embattled company is holding up well and still growing its business. He would neither state a timeline for determining Sterling’s future nor discuss specifics of the alleged fraud at its EFI subsidiary.

Moyer acknowledged that Sterling faced a substantial risk of losing customers after its May 24 announcement that massive fraud at the logging-finance subsidiary could result in a charge to earnings as high as $165 million.

In fact, Sterling’s deposits and customer base have grown since then, Moyer said.

“I think that says it all, in a nutshell,” he said. “We’ve invested years in building relationships with our customers.”

EFI’s problems sharply reduced capital levels at Sterling’s biggest bank subsidiary, but that has not constrained the company’s lending ability, Moyer said. The capital loss reduced Sterling’s ability to make only the largest loans, which are in the $25 million range, he said. Loans of that size would usually be shared with other banks, anyway, he added.

Moyer said the most important thing executives could do for employees was to communicate. The company has set up an e-mail account for anonymous questions and is posting answers on its internal Web site, he said. Executives also are making an effort to be visible and not duck any questions, he said.

The plunge in Sterling’s stock following the EFI announcement also affected employees.

They had at least 1.4 million Sterling shares valued at about $33.5 million invested in 401(k)s, according to the company’s latest annual report. That was before the trouble at EFI halved Sterling’s per-share value.

Asked how 401(k) losses affected individual employees, Moyer would say only that the company was equally concerned about all shareholders, small and large. He added that many employees had faith in Sterling’s ability to restore shareholder value.

Moyer has been with Sterling since 1978 and once called the EFI acquisition the best business decision of his life. He acknowledged that recent weeks have been difficult for him personally.

“All those emotions that every human being goes through — we all go through that,” he said. One thing that worked for him, Moyer said, was focusing on the task of hand.

“There wasn’t much time — there was almost no time — to think about me,” he said.

Supportive letters from Sterling customers have encouraged him, he said, adding that you could get rewards out of situations that seem unlikely to hold any.

There is much work ahead, but Sterling has the right people and the right resources to get it done, he said.

“I’m upbeat,” Moyer said. “I’m sitting here in a good mood.”

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