A customer exits Sterling Bank Monday in La Grande. Sterling has two locations in La Grande, one at 1215 Adams Ave. and another at 3106 Island Ave. (CHRIS BAXTER/The Observer)
Combined banks will operate under Umpqua name
Umpqua Holdings, the Portland-based parent of Umpqua Bank, is acquiring Sterling Financial Corporation in a $2 billion deal that would create the largest community bank on the West Coast.
Once the deal is complete, the newly combined banks will operate under the name of Umpqua Bank.
Sterling Bank has two locations in La Grande, one at 1215 Adams Ave. and another at 3106 Island Ave. Sterling has one location in Baker City at 1990 Washington Ave.
A spokesperson for Sterling said it’s unclear what will happen at branches in Eastern Oregon, Eastern Washington and Idaho. Those locations will essentially be an expansion for Umpqua, but business will continue as normal for Sterling Bank locations. Announcements will be made prior to any changes at these locations.
Ray Davis will continue as CEO of Umpqua Holdings. Sterling CEO Greg Seibly will join Umpqua Bank as co-president, with Umpqua Bank co-president Cort O’Haver serving in the same capacity.
The merger will create a financial firm with about $22 billion in assets — roughly double Umpqua’s current assets; $15 billion in loans, compared with Umpqua’s $7.2 billion at the end of the second quarter, and $16 billion in deposits, compared with Umpqua’s $9 billion at the end of the second quarter.
It will employ 5,000 people and have 394 branches in five states — Oregon, Washington, California, Idaho and Nevada.
Sterling, based in Spokane and the parent company of Sterling Bank, was hit hard by the recession. In 2010, it completed a $730 million recapitalization under pressure from regulators, raising the additional money from a combination of institutional, private equity and other investors, Sterling said at the time, adding that it was more than the amount regulators were requiring it to raise.
“Sterling has emerged from its 2010 recapitalization a stronger, more profitable bank,” Seibly said in a prepared statement Wednesday evening, adding that it has shown improved profitability for 10 quarters in a row.
Under the terms of the agreement, Sterling shareholders will receive 1.671 shares of Umpqua common stock and $2.18 cash for each share of Sterling common stock. The total value of the Sterling merger consideration, based on the closing price of Umpqua shares on Sept. 11 of $16.96, is $30.52.
The deal was announced Sept. 11.