SANTA ROSA — Near the anniversary of its acquisition of Novato's Circle Bancorp, Umpqua Holdings Corporation appears poised to grow yet again in the North Bay through the acquisition on Sonoma Bank's Washington-based parent company.
Umpqua Holdings, parent company of Portland, Ore.-based Umpqua Bank, announced Wednesday that it had entered into a definitive agreement to purchase Spokane-based Sterling Financial Corporation in a transaction valued at approximately $2 billion.
The merger, expected for completion in the first half of 2014, will create a combined institution with around $22 billion in assets and 394 branches across Oregon, Washington, Idaho, California and Nevada.
Umpqua Bank currently has 20 branches plus a dedicated commercial banking office in the broader North Bay. The acquisition will add 13 Sonoma Bank -- soon to be Argent Bank -- branches. Those include 11 in the North Bay, one in Concord and one in Walnut Creek.
Sterling’s branches, which operate under the name Sterling Bank outside of California, will operate under the Umpqua name and brand upon completion of the merger. The combined company will have around $15 billion in loans, $16 billion in deposits and 5,000 employees.
Sterling reported $9.9 billion in assets in its most recent financial filing, while Umpqua reported $11.5 billion.
Ray Davis will continue in his role as president and chief executive officer of Umpqua. Greg Seibly, president and CEO of Sterling, will join Umpqua as co-president. Cort O’Haver, currently co-president of Umpqua, will also continue in that role.
The boards of directors of both companies approved the merger unanimously, according to the announcement. The combined company will have a 13-member board, including nine seats for Umpqua and four for Sterling.
Sterling’s largest shareholders, Thomas H. Lee Partners and Warburg Pincus Private Equity, have agreed to support the transaction, according to Umpqua. Each holds nearly 21 percent of Sterling’s stock, after investing millions into the bank’s recapitalization effort that ended in 2010.
Financial regulators had required Sterling to raise more than $700 million in an order from October 2009, an effort that would boost the bank’s capital reserves amid a wave of loan losses. The bank holding company succeeded with the aid of around 30 accredited investors, including about $171 million from each of the two firms.