The namesake and primary donor of a new University of Montana education center hit a bit of a professional rough patch late this year.
Harold Gilkey, 70, stepped down from his position as chairman of Spokane's Sterling Savings Bank in October, shortly after the bank received a cease-and-desist order from the Federal Deposit Insurance Corporation (FDIC). The order cited a number of unsafe or unsound banking practices, including a large number of poor-quality loans and inadequate capital.
Gilkey, also a co-founder of Sterling Savings Bank, resigned alongside CEO Heidi Stanley and surrendered just under half of his total stock interests in the company. As part of the FDIC's order, Sterling Savings Bank was required to raise $300 million in new capital by Dec. 15. The bank failed to meet the deadline, and NASDAQ issued a warning last week it would delist the company's common stock if trade values didn't rise above $1 by June 7, 2010.
Net losses at Sterling Savings Bank—which has branches in Missoula and Hamilton—totaled $463.7 million in the first three quarters of 2009.
Gilkey could not be reached for comment.
Meanwhile, UM expects to begin construction of the Gilkey Center for Leadership, Entrepreneurship and Executive Education this spring. The 16,000-square-foot addition to the university's business school facilities, named for Harold Gilkey and his wife, Priscilla, will include a 94-seat executive auditorium, two classrooms and an executive networking club. Gilkey donated $1.5 million to the $5.1 million project.
The Gilkeys appeared as guest speakers for the building's groundbreaking ceremony in October 2008. Both graduated from UM in 1962 and were recognized in 2004 with the creation of the Harold and Priscilla Gilkey Executive Lecture series.
Gilkey's resignation and the troubles plaguing Sterling Savings Bank as a result of the recession have had no impact on UM's interest in completing the project.
"We'll plan to begin construction in late spring of 2010," says UM Executive Vice President Jim Foley. "Harold's resignation will have no effect upon the naming or the construction. We know of nothing that merits a different decision."