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  • Umpqua Holdings to buy Sterling Financial

    The purchase will give Umpqua 394 branches
  • Umpqua Holdings Corp. announced Wednesday that it is acquiring Spokane-based Sterling Financial Corp. in a $2 billion deal. The new company will operate under the Umpqua Bank name and brand, the companies said.
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  • Umpqua Holdings Corp. announced Wednesday that it is acquiring Spokane-based Sterling Financial Corp. in a $2 billion deal. The new company will operate under the Umpqua Bank name and brand, the companies said.
    The acquisition will result in the West Coast's largest community bank, with approximately $22 billion in assets, $15 billion in loans and $16 billion in deposits. It will have about 5,000 employees and 394 branches across five states — Oregon, Washington, Idaho, California and Nevada.
    Umpqua and Sterling also have agreed to establish and fund a $10 million community foundation.
    Umpqua Holdings Corp. will continue to be led by Ray Davis as president and chief executive officer. Sterling president and CEO Greg Seibly will join Umpqua Bank as co-president, with Umpqua Bank co-president Cort O'Haver serving in the same capacity.
    In mid-2012, the most recent market-share figures available from the FDIC showed Umpqua Bank led Jackson County with 16.05 percent of deposits, while Sterling Bank was No. 8 at 5.16 percent.
    Umpqua became part of the local scene in late 2000 when Valley of the Rogue Bank merged with the newly renamed Umpqua Bank, based in Roseburg. Today, it operates 11 offices in Jackson County. Umpqua Holdings is now based in Portland.
    Sterling moved into the Rogue Valley in 2003 when it acquired Klamath First Federal for $36 million.
    Today it has six offices in Jackson County.
    "This is part of the general progression of the industry," said Mike Towery, the Medford branch manager for iMortgage, and former Washington Mutual lender. "All things being equal, there is something to be said for a bank becoming larger, stronger and having deeper pockets.
    "Banks are shoring up their financials and trying to stay strong through the mild recovery, hoping to remain competitive going forward."
    With bank branches in close proximity, there will be duplication of services and some job elimination, he predicted.
    "When there are people doing the same thing at both companies, they may only need one of them going forward," Towery said. "You have to find efficiencies when you are combining the two organizations. If you have two people handling human resources, payroll and accounts payable, it never seems sustainable post-merger."
    As for customers, Towery said the change shouldn't be significant.
    "I went through that when Washington Federal acquired South Valley," he said. "Both banks are well-respected in the community. Aside from account numbers changing, it was relatively seamless."
    According to a press release from Umpqua Holdings, Sterling shareholders will receive 1.671 shares of Umpqua common stock and $2.18 cash for each share of Sterling common stock.
    Based on the closing price of $16.96 for Umpqua shares on Wednesday, the total value of each Sterling share is $30.52.
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