Investors to sustain Sterling Savings Bank

MOSES LAKE — Sterling Financial Corporation expects to receive $730 million from a variety of institutional, private equity and other accredited investors to rebuild the company, Sterling announced Friday.

MOSES LAKE - Sterling Financial Corporation expects to receive $730 million from a variety of institutional, private equity and other accredited investors to rebuild the company, Sterling announced Friday.

The agreement with Thomas H. Lee Partners, L.P. and Warburg Pincus Private Equity should close on Thursday.

Both companies changed their agreements to raise their investments in Sterling.

It's believed they will each buy 68.366 million shares of common stock and 1.709 million shares of Series B preferred stock for an aggregate price of about $171 million each, according to Sterling.

Sterling Financial Corporation is the bank holding company for Sterling Savings Bank, which has FDIC-insured banking locations throughout the Northwest.

There are branches in Moses Lake, Othello and Coulee City.

In March, the U.S Treasury said it would help Sterling rebuild by converting Treasury-held Sterling shares into common stock.

But first, Sterling was required to raise $650 million in capital. The money is needed because the bank was impacted by non-performing loans in commercial real estate and residential real estate.

Cara Coon, vice president/communications manager with Sterling Financial Corp., told the Columbia Basin Herald that Sterling is in the process of consolidating its board of directors.

The consolidation will happen over time, she added.

After the transaction, Les Biller, former vice chairman and chief operation of Wells Fargo & Company will be named Sterling's board chairman.

Also, Warburg Pincus, managing director David A. Coulter and Thomas H. Lee Partners managing director Scott Jaeckel are added to the board.

The board changes must be approved by regulators.

Sterling previously announced it expected to raise $720 million and the new figure of $730 million is "at the high end," Coon said.

"This commitment of $730 million in new capital represents a major milestone in our recovery plan, and one that will substantially strengthen our capital rations and provide a solid base for rebuilding long-term franchise value," stated Sterling president and chief executive officer Greg Seibly.

"The focused energies of many at Sterling have helped us to preserve and grow our core banking franchise in support of our customers and communities across the Pacific Northwest. Today's announcement reflects the investment community's recognition of this value," he added."

Coulter, of Warburg Pincus, stated the company is "delighted to partner with Sterling in this new and exciting chapter of its development."

Bille stated the "investments reflect a clear vote of confidence in the strength of the Sterling franchise and the great progress Sterling has made in rebuilding and strengthening its balance sheet."