Sterling Trust Co. to close its doors

A deal before the Missouri Division of Finance would transfer Sterling Trust’s fiduciary capacities and its $14 million book of business to Trust Company of the Ozarks.

“They came to us about going in a different direction, and we were certainly interested in assisting them, as well as welcoming their customers,” said Dwight Rahmeyer, CEO and senior trust counsel for Trust Company of the Ozarks. “We took over the management of their fiduciary, their trust accounts, as well as their investment management accounts.”

Sterling Trust debuted March 3, 2003, with $2.2 million in capital provided equally by 11 investors. Ten of the investors – Jerry Jared, Connie J. Johnson, Brian Kim, Kristy A. McCall, Tom McLoud, Don Myears, Karl Plumpe, Robert E. Roundtree, Janice M. Stockham and Fred Wolter – remain on Sterling’s board of directors. The eleventh, Kenneth E. Meyer, is no longer an investor.

Calls to board members were not returned by press time.

Sterling’s approximately 80 clients, Rahmeyer said, should expect a seamless transition. “Now they’ll be working with portfolio managers and trust administrative offices from Trust Company of the Ozarks,” he said.

The average account size at Sterling Trust was $200,000, according to SBJ’s 2005 Book of Lists.

Trust Company of the Ozarks reported $318 million in assets under management in southwest Missouri, and 620 local accounts with an average size of $500,000 for SBJ’s 2005 Book of Lists.

David Wieland, an attorney representing Sterling, would not share reasons for Sterling’s demise, but said that the company’s accounts will be turned over to Trust Company of the Ozarks by June 2.

Both boards approved the transfer, and a joint application was filed with the Missouri Division of Finance. Notice was published in the May 5 issue of Daily Events, and the transfer of clients may take place 30 days later, Rahmeyer said.

Missouri Division of Finance Director Eric McClure confirmed the plans. “Most of what we do is not public, but I can tell you we did issue an order approving the transfer of fiduciary obligations from Sterling Trust Company to Trust Company of the Ozarks,” he said.

Clients that don’t want their accounts to be transferred to Trust Company of the Ozarks have the option of taking their business elsewhere.

Wieland said that as a trust company, Sterling was obligated to not drop the clients. “We’ve sent notices to all our customers saying if you want to go somewhere else, let us know,” he said, adding that the notices were mailed March 26.

Both Wieland and Rahmeyer declined to share financial arrangements for the transaction. “There was consideration for the conveyance,” Wieland said.

Troy E. Kennedy, chief marketing officer and shareholder with Springfield Trust Co., welcomed Sterling in 2003, saying there was room for competition.

“It’s sad to see any company not succeed,” Kennedy said, adding that trust companies face strong competition in the area from brokerage firms, insurance companies, other independent trust companies, trust departments in banks, registered investment advisors and mutual funds.

“Basically, it’s the same piece of pie; it’s just sliced up thinner,” Kennedy added.

As the company liquidates, clients and investors might be concerned about their portion of the pie.

“None of our depositors have anything to worry about,” Wieland said.

Unlike banks, he said, trust companies keep depositors’ money separate from the investors’ money. “Banks, of course, make loans and they use their capital to make loans. We never do that. No matter whether the trust company sustains losses or not has absolutely no effect on depositors’ money. The investors will get their original investment back, less whatever losses or plus whatever gains may have occurred in the meantime.”

Wieland would not disclose how much money investors would receive after liquidation.

Sterling Trust’s staff comprised Rick Imhoff, president and CEO; Sandra Davis, senior vice president of operations; and Denise Bench, assistant vice president of administration. Bench, the only employee remaining in the office, would not comment on the situation.

Wieland was not sure of the date Imhoff left the company or where he might be employed. Davis now works for BKD.