The dust has barely settled in Clark County from Spokane-based Sterling Bank’s drawn-out acquisition of the former First Independent Bank, a longtime pillar of Clark County’s business community, and now it’s flying again with Umpqua’s planned acquisition of Sterling.
The two banks announced Wednesday that they’ve reached an agreement for Umpqua’s acquisition of Sterling for approximately $2 billion. The deal is expected to take six to eight months to complete. The combined bank will have $22 billion in assets and 394 branches in five states.
In Clark County, Sterling currently has 11 branches and Umpqua has five. Three of those branches are in Vancouver’s downtown. Sterling customers should see no changes before the deal is completed early next year, said Eve Callahan, Umpqua’s Portland-based senior vice president of corporate communications. Decisions about possible branch closures and staffing levels also won’t be made until then, she said.
Umpqua’s big move is part of an ongoing consolidation in the banking industry that is leaving just a few big national banks and a shrinking number of regional and community banks. In Clark County, more than two-thirds of bank deposits were in just five banks as of the Federal Deposit Insurance Corp.’s most recent report, from June 2012. Sterling Bank is the county’s second-largest, with about 15 percent of deposits. Riverview, based in Vancouver, is in fifth place with 11 percent of deposits. Others in the top five, in order of size, are JP Morgan Chase, Bank of America, and Wells Fargo.
Umpqua held 7.8 percent of Clark County deposits in the 2012 report. The combination of Sterling and Umpqua deposits, if customers stick with the merged bank, would push Umpqua into the top position in Clark County.
The transaction will create what Umpqua calls the West Coast’s largest community bank, serving Washington, Oregon, Idaho, California, and Nevada. Umpqua says it will maintain its community orientation and deliver on its well-honed pitch as “the world’s greatest bank” even as it grows into an institution with 5,000 branch employees, who are called associates.
As part of the deal, Umpqua and Sterling agreed to establish and fund a $10 million community foundation to help support community-based programs. Callahan said the bank’s charitable donations flow through several channels, with some donations made at the branch level.
“We really take that seriously,” Callahan said of the bank’s charitable donations.
On the management side of the deal, Umpqua’s Ray Davis will remain as president and CEO of the combined bank. Greg Seibly, Sterling’s president and CEO, will
become a co-president. Cort O’Haver, currently an Umpqua co-president, will retain that title. The combined board of directors will have nine members, including chair Peggy Fowler from Umpqua and four from Sterling.
The two banks are roughly the same size going into the deal. Umpqua reports $11.4 billion in assets to Sterling’s $9.9 billion. Umpqua holds $7.4 billion in loans to Sterling’s $7.3 billion. Umpqua has $9 billion in deposits; Sterling’s stand at $6.6 billion.