Sterling Financial Corporation
Sterling Financial Corporation was a Spokane-based bank holding company that operated Sterling Bank across four western U.S. states before being acquired by Umpqua Holdings Corporation in 2014.
Last updated August 24, 2026
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Overview
Sterling Financial Corporation was a regional American bank holding company headquartered in Spokane, Washington. Its principal banking operation was Sterling Bank, formerly known as Sterling Savings Bank. The company developed through branch acquisitions, bank acquisitions, recapitalization, and expansion across the Pacific Northwest and parts of California. The business began operations in 1983 and built a branch-based banking franchise serving Washington, Oregon, Idaho, and California. One of its earlier expansion steps came in 1998, when it acquired 33 branches from KeyCorp. In early 2004, Sterling completed the acquisition of Klamath First Bancorp of Klamath Falls, Oregon, extending its presence in southern Oregon. A proposed 2007 acquisition of North Valley Bancorp, valued at approximately $196 million in cash and stock, was abandoned after the transaction failed to receive regulatory approval. Sterling was significantly affected by the 2008 financial crisis. The United States Department of the Treasury invested $303 million in the company through the Troubled Asset Relief Program. Sterling later repaid the Treasury's TARP investment. The company also faced regulatory pressure: in October 2009 it received a cease-and-desist order from regulators and began changes to its executive leadership. In 2010, Sterling raised approximately $730 million in capital in an effort to strengthen its balance sheet and avoid regulatory closure. Thomas H. Lee Partners and Warburg Pincus each acquired a 22.6 percent stake, while more than 30 additional investors participated in the recapitalization. Following its restructuring, Sterling resumed expansion. In 2011 it acquired Vancouver, Washington-based First Independent Bank. In 2012, it renamed its bank from Sterling Savings Bank to Sterling Bank and reduced its workforce by approximately 6 percent. The company continued adding assets and market coverage in 2013 through the acquisition of American Heritage Holdings, the purchase of the Seattle-area operations of Boston Private Bank & Trust Company, and the acquisition of Commerce National Bank of Newport Beach, California. It also sold six branches to Banner Bank in February 2014. Sterling's final corporate transition came through its combination with Umpqua Holdings Corporation. Umpqua announced the acquisition in September 2013, and completed the transaction on April 18, 2014, in a cash-and-stock deal valued at approximately $2 billion. At the time of the transaction, Sterling's banking network comprised 173 branches in Washington, Oregon, California, and Idaho. The acquisition ended Sterling Financial Corporation as an independent company and integrated its operations into Umpqua's broader regional banking platform.
History
Sterling Financial Corporation was a regional bank holding company based in Spokane, Washington. It commenced operations in 1983 and developed a western U.S. banking franchise through a combination of organic branch growth and acquisitions. Its principal bank operated under the Sterling Savings Bank name for much of the company's history before becoming Sterling Bank in 2012. A major early expansion occurred in 1998, when Sterling acquired 33 branches from KeyCorp. The transaction increased its physical presence and established a broader platform for serving customers in the Pacific Northwest. In early 2004, Sterling completed its acquisition of Klamath First Bancorp of Klamath Falls, Oregon, extending the company's reach in Oregon and adding another banking franchise to its organization. Sterling agreed in 2007 to acquire North Valley Bancorp for approximately $196 million in cash and stock. The proposed combination did not receive the required regulatory approval and was cancelled. The failed transaction illustrated the regulatory constraints that could affect consolidation among regional banks. The 2008 financial crisis placed Sterling under substantial pressure. The U.S. Treasury invested approximately $303 million in the company through TARP. Sterling ultimately repaid the Treasury's TARP investment. In October 2009, regulators issued a cease-and-desist order, and the company began executive changes. In 2010, Sterling raised approximately $730 million in capital to address its financial condition and avoid being shut down by regulators. Thomas H. Lee Partners and Warburg Pincus each obtained a 22.6 percent stake, with more than 30 other investors also participating. The recapitalized company pursued renewed expansion. In 2011, it acquired First Independent Bank, based in Vancouver, Washington. In 2012, the banking subsidiary changed its name from Sterling Savings Bank to Sterling Bank, while Sterling reduced its workforce by approximately 6 percent. In March 2013, it acquired American Heritage Holdings for approximately $6.5 million. In May of the same year, it purchased the Seattle-area operations of Boston Private Bank & Trust Company. In October 2013, Sterling acquired Commerce National Bank of Newport Beach, California, for approximately $42.9 million. Sterling also adjusted its branch footprint before the final merger, selling six branches to Banner Bank in February 2014. Umpqua Holdings Corporation had announced its agreement to acquire Sterling in September 2013. The transaction closed on April 18, 2014, in a cash-and-stock deal valued at approximately $2 billion. Sterling operated 173 branches across Washington, Oregon, California, and Idaho at the time of the combination. Completion of the acquisition ended Sterling Financial Corporation as an independent bank holding company.
- 2014
Acquisition by Umpqua
[1]Umpqua Holdings Corporation completed its approximately $2 billion acquisition of Sterling Financial.
- 2013
Expansion through multiple acquisitions
[1]Sterling acquired American Heritage Holdings, Boston Private's Seattle-area operations, and Commerce National Bank.
- 2012
Bank rebranding
[1]Sterling Savings Bank was renamed Sterling Bank.
- 2010
Recapitalization
[1]Sterling raised approximately $730 million in capital, with major investments from Thomas H. Lee Partners and Warburg Pincus.
- 2009
Cease-and-desist order
[1]Regulators issued a cease-and-desist order and Sterling began executive changes.
- 2008
TARP investment
[1]The U.S. Treasury invested approximately $303 million in Sterling through TARP.
- 2007
North Valley Bancorp deal cancelled
[1]The proposed acquisition failed to obtain regulatory approval and was cancelled.
- 2004
Klamath First Bancorp acquisition
[1]Sterling finalized its acquisition of Klamath First Bancorp in Oregon.
- 1998
KeyCorp branch acquisition
[1]Sterling acquired 33 branches from KeyCorp.
- 1983
Operations commence
[1]Sterling Financial Corporation began operations as a U.S. banking organization.
Products and positioning
A regional, branch-based banking group focused on retail, commercial, small-business, deposit, and lending services in the western United States.
Regional banking · 2012
Sterling Bank
Sterling Bank was the principal banking operation of Sterling Financial Corporation and the successor name to Sterling Savings Bank. It provided branch-based banking services across Washington, Oregon, California, and Idaho, including deposit accounts, consumer banking, commercial banking, and lending services. The bank's network reached 173 branches before Sterling was acquired by Umpqua Holdings Corporation in 2014.
Savings and retail banking
Sterling Savings Bank
Sterling Savings Bank was the former operating name of Sterling's principal bank. Under this identity, the institution built its branch network and delivered retail, deposit, mortgage, commercial, and small-business banking services. The bank was renamed Sterling Bank in 2012 as part of the company's effort to present a unified banking brand.
Brand decisions
2013
Agree to be acquired by UmpquaM&ABackground
After recapitalization and renewed regional expansion, Sterling entered into a combination agreement with Umpqua Holdings Corporation.
Action taken
Umpqua announced its agreement to acquire Sterling Financial in a cash-and-stock transaction.
Aftermath
The transaction closed on April 18, 2014, ending Sterling's existence as an independent company.
Transaction value. $2 billion (Acquisition completed April 18, 2014)
2012
Rename the banking subsidiaryStrategyBackground
Sterling sought to present its operating bank under a shorter and more unified identity.
Action taken
Sterling Savings Bank was renamed Sterling Bank, and the company reduced its workforce by approximately 6 percent.
Aftermath
The Sterling Bank identity remained in use until the company's acquisition by Umpqua Holdings Corporation.
2010
Recapitalize the companyStrategyBackground
Sterling faced regulatory pressure following the financial crisis, including a 2009 cease-and-desist order.
Action taken
The company raised approximately $730 million in capital. Thomas H. Lee Partners and Warburg Pincus each acquired a 22.6 percent stake, alongside more than 30 other investors.
Aftermath
The recapitalization supported Sterling's continued operation and subsequent acquisitions.
Capital raised. $730 million (2010)
2007
Cancel the North Valley Bancorp acquisitionM&ABackground
Sterling had agreed to acquire North Valley Bancorp for approximately $196 million in cash and stock, but the transaction did not obtain regulatory approval.
Action taken
Sterling and North Valley abandoned the proposed merger.
Aftermath
Sterling did not complete the planned expansion through North Valley Bancorp and later pursued other acquisitions.
Announced transaction value. $196 million (2007 announced consideration)
Recent events
- 2014
Sterling sells six branches to Banner Bank[1]
M&A
Before its corporate acquisition, Sterling sold six branches to Banner Bank.
- 2014
Umpqua completes acquisition of Sterling Financial[1]
M&A
Umpqua Holdings Corporation completed its acquisition of Sterling Financial in a cash-and-stock transaction valued at approximately $2 billion.
- 2013
Sterling acquires American Heritage Holdings[1]
M&A
Sterling acquired American Heritage Holdings for approximately $6.5 million.
- 2013
Sterling acquires Seattle-area operations of Boston Private[1]
M&A
The company acquired the Seattle-area operations of Boston Private Bank & Trust Company.
- 2013
Umpqua announces acquisition of Sterling Financial[1]
M&A
Umpqua Holdings Corporation announced an agreement to acquire Sterling Financial Corporation.
- 2013
Sterling acquires Commerce National Bank[1]
M&A
Sterling acquired Commerce National Bank of Newport Beach, California, for approximately $42.9 million.
- 2012
Sterling Savings Bank changes its name to Sterling Bank[1]
Other
The company's banking subsidiary adopted the Sterling Bank name, while the company also reduced its workforce by approximately 6 percent.
- 2011
Sterling acquires First Independent Bank[1]
M&A
Sterling expanded in the Pacific Northwest by acquiring Vancouver-based First Independent Bank.
- 2010
Sterling raises capital to strengthen the company[1]
Other
Sterling raised approximately $730 million in capital. Thomas H. Lee Partners and Warburg Pincus each acquired a 22.6 percent stake, alongside more than 30 other investors.
- 2009
Regulators issue cease-and-desist order[1]
Regulation · Leadership change
Sterling received a regulatory cease-and-desist order and initiated changes to its executive leadership.
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