Sterling Financial Corp., which is backed by Warbug Pincus and Thomas H. Lee Partners, said Monday that it would buy First Independent Bank to boost its presence in Portland and Vancouver in the U.S. Pacific Northwest, Reuters reported. Under the terms of agreement, Sterling Savings Bank would initially pay a premium of $8 million to the net value of the acquired assets and assumed liabilities of the 100-year-old bank, Reuters wrote.
(Reuters) – Sterling Financial Corp said its unit has agreed to buy First Independent Bank to boost its presence in Portland and Vancouver in the U.S. Pacific Northwest.
Under the terms of agreement, Sterling Savings Bank would initially pay a premium of $8 million to the net value of the acquired assets and assumed liabilities of the 100-year-old bank.
Sterling will also pay a premium of up to $17 million over 18 months after the deal closes, on the basis of credit performance of the acquired loans.
First Independent will retain about $49 million of existing loans and $34 million of other assets identified by Sterling, which will take over all of the community banker’s deposits.
This acquisition will add to Sterling’s existing franchise about $691 million in principally core deposits and $455 million of assets under management.
“We expect these product enhancements will not only be a source of additional non-interest revenue, but also provide significant benefits with both customer acquisition and retention,” Sterling Chief Executive Greg Seibly said.
The transaction is expected to be completed in early 2012 and add to Sterling’s full-year earnings per share.
Last year Sterling Bank undertook a massive recapitalization, which included capital infusions of $171 million each from Warbug Pincus and Thomas H. Lee Partners .
Private equity firms often invest in weak banks, boost their capital levels and then use the banks as a base to consolidate other lenders in the region.
Shares of Sterling Financial were trading at $15.15 in the morning trade on Nasdaq on Monday.