Sterling Bank & Trust

Sterling Bank & Trust

Sterling Bank & Trust was founded in 1984 in Southfield, Michigan, under the leadership of Thomas Lopp, who remains Chairman and CEO. The bank expanded from its Michigan base into a multi-state operation with additional loan production offices in New York and Greenville, South Carolina. For much of its history, the bank operated as a closely held financial institution focused on deposit gathering and residential lending, gaining a significant footprint among Asian-American communities in California and New York. The firm's primary investment posture centered on originating and holding adjustable-rate residential mortgages, a strategy that placed it among the top 50 US mortgage originators by volume at its peak. Sterling's lending spanned single-family homes, condominiums, and cooperative apartments, with notable concentration in San Francisco, Los Angeles, and New York City. The bank funded its loan book through a deposit base that included a substantial number of certificate of deposit accounts, which came under regulatory scrutiny regarding anti-money-laundering controls (per US Department of Justice, 2023). Beyond its direct lending, Sterling's operations encompassed retail banking services, commercial real estate loans, and wealth management offerings through its trust division. Sterling Bank & Trust employed hundreds across its branch network and lending operations, though a specific professional headcount is not publicly reported. In September 2023, the bank entered into a deferred prosecution agreement and agreed to pay $27.2 million in penalties to resolve a criminal investigation into its residential mortgage lending and anti-money-laundering compliance practices (per US Department of Justice, 2023). The settlement required an independent compliance monitor and significant operational restructuring. The bank also faced a consent order from the Office of the Comptroller of the Currency mandating that its board approve a written program to address Bank Secrecy Act deficiencies. The structural distinction of Sterling Bank & Trust lies in its dual identity as both a regulated depository institution and a de facto residential mortgage fund. Unlike a traditional family office or private equity firm that raises discretionary capital, Sterling sourced funding from federally insured retail deposits and deployed it into concentrated geographic and product exposures. This model embedded interest-rate and credit risk within a regulated banking charter, making its post-settlement future contingent on the extent to which it can rebuild a compliant deposit franchise capable of supporting any scaled investment appetite.