Sterling expanding its footprint in California

A number of recent moves in California for Sterling Financial Corp. (NASDAQ: STSA), parent of Sonoma Bank, point to a period of rapid evolution and growth for the Spokane-based lender's presence throughout the state and the North Bay.

[caption id="attachment_75983" align="alignleft" width="180"] Jamie Williams[/caption]

Most recently, those developments have included a change in leadership structure for the $9.26 billion lender's subsidiaries in California. Jamie Williams will serve in a newly created role as Northern California market president, guiding broader operations for the same market he served as the former commercial leading head for Sonoma Bank. A second market president, Gilbert Dalmau, will oversee Southern California.

Until recently, Sterling's California operations were largely focused in the northern part of the state. Yet with the completed acquisition of La Mesa-based Borrego Springs Bank in March and the planned acquisition of Orange County's Commerce National Bank later this year, the bank is making significant investments in growing its operations elsewhere in California.

Sterling paid $6.5 million to acquire American Heritage Holdings, parent company of Borrego Springs. While the bank was relatively small, with less than 20 employees and $161 million in assets, it played an outsized role as one of the most active lenders in the western United States for programs backed by the U.S. Small Business Administration.

The acquisition has helped to boost the bank's SBA lending in Northern California, with more loans completed in the first half of the 2013 fiscal year than in the prior 12 months, according to an announcement and data from the SBA. Those loans are generally smaller, complementing the larger loans that are typically processed through the bank's SBA hub in Santa Rosa.

Borrego Springs is planned to ultimately operate under the Sterling name, with its SBA-specific systems integrated more closely into the existing information systems for the company, according to a Sterling spokeswoman.

With the $42.9 million acquisition of Commerce National Bank expected by the end of September, Sterling will also add $242.7 million in assets and a business lending-focused operation in Southern California.

New offices are also planned in Northern California, with a new commercial banking center expected to open in the Sacramento area on Oct. 1, Mr. Williams said.

"Strategically, the bank is opening commercial banking centers in robust markets where we can assemble teams of the best commercial bankers well-known and respected in their markets," he said.

In the North Bay and Contra Costa County, Sonoma Bank focuses on lending to professionals, distributors, light manufacturing, business owners and real estate-related entities, Mr. Williams said. It also offers retail banking, something that is currently not a focus in Southern California.

The recent push in California for Sterling is part of an announced effort to grow through strategic acquisition across various markets. The bank acquired the $800 million First Independent Bank in March of last year, increasing its presence in Washington and Oregon, and completed an acquisition of the Seattle area operations of a Boston, Mass.-based commercial bank last December.

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