Sterling Financial Corporation and American Heritage Holdings Announce Agreement for Sterling to Acquire American Heritage

  Sterling Financial Corporation and American Heritage Holdings Announce
  Agreement for Sterling to Acquire American Heritage Holdings

 Significantly expands and enhances Sterling’s government guaranteed lending
                          and servicing capabilities

Business Wire

SPOKANE, Wash. -- October 22, 2012

Sterling Financial Corporation (NASDAQ:STSA) (the “Company”) and American
Heritage Holdings (“AHH”) today announced that the Company and its principal
operating subsidiary, Sterling Savings Bank (“Sterling”), have entered into a
definitive agreement to acquire AHH, the holding company for Borrego Springs
Bank, N.A, for cash consideration of $6.5 million. The transaction, which has
been approved by the boards of directors of Sterling and AHH, will provide a
significant enhancement to Sterling’s government guaranteed lending and
servicing capabilities. The shareholders of AHH have agreed to vote in favor
of the transaction, which is subject to regulatory approval and other
customary conditions of closing and is expected to be completed during the
first quarter of 2013.

“Borrego Springs Bank has for many years been a leading SBA originator and for
fiscal year 2011 was among the top 20 in the nation,” said David DePillo, Vice
Chairman and Chief Lending Officer of Sterling. “They have a solid and
scalable SBA origination and servicing platform that we expect will have a
meaningful positive impact as we continue to ramp up commercial lending
efforts with an eye on improving our loan portfolio mix and earnings. The
expected synergies from the transaction include greatly reduced new loan
delivery time and servicing costs for Sterling and expanded product and
service offerings for the Borrego Springs Bank lenders.”

As of September 30, 2012, AHH had assets of approximately $142 million, loans
of $97 million, deposits of $121 million and shareholders’ equity of $13.4
million. For fiscal year 2011, AHH originated 741 SBA 7a loans with an
aggregate funded amount of $161 million. The Company expects the transaction
will be accretive to earnings per share during the first year following
completion with an immaterial impact on its tangible book value per share.

Bingham McCutchen LLP served as the legal advisor to the Company and Tisdale &
Nicholson LLP served in the same capacity for AHH. Sandler O’Neill & Partners
LP served as the financial advisor to AHH.

Forward-Looking Statements

Certain statements in this press release, including, without limitation,
statements as to the impact of the purchase and assumption transaction,
statements as to the Company’s or Sterling’s management beliefs, expectations
or opinions, and all other statements in this press release, other than
historical facts, are“forward-looking statements” and are intended to be
covered by the safe harbor provided by the Private Securities Litigation
Reform Act of 1995. When used in this release, the words “expects,”
“anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and
similar expressions are generally intended to identify forward-looking
statements. Actual results may differ materially from the results discussed in
these forward-looking statements because such statements are inherently
subject to significant assumptions, risks and uncertainties, many of which are
difficult to predict and are generally beyond the Company's control. These
risks anduncertaintiesinclude, but are not limited to, the ability of
Sterlingand AHH to complete the proposed acquisition transaction on the terms
summarized above or other acceptable terms, or at all, due to a number of
factors, including the receipt of required regulatory approvals or the
satisfaction of other customary closing conditions. Other factors that could
cause actual conditions, events or results to differ significantly from those
described in the forward-looking statements may be found under the headings
“Risk Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in the Company's Annual Report on Form
10-K, as updated periodically in the Company's periodic filings with the
Securities and Exchange Commission, which are available online at www.sec.gov.
The Company disclaims any intent or obligation to publicly update or revise
any forward-looking statements, regardless of whether new information becomes
available, future developments occur or otherwise.

About Sterling Financial

Sterling Financial Corporation of Spokane, Wash., is the bank holding company
for Sterling Savings Bank, a state chartered and federally insured commercial
bank that operates under the trade names of Sterling Bank and Sonoma Bank (in
California). Sterling offers banking products and services, mortgage lending,
and investment products to individuals, small businesses, commercial
organizations and corporations. As of June 30, 2012, the Company had assets of
$9.6 billion and operated 186 depository branches throughout Washington,
Oregon, Idaho, Montana and California. Visit the Company’s website at
www.sterlingfinancialcorporation.com.

About American Heritage Holdings

American Heritage Holdings (“AHH”) of La Mesa, California, is the holding
company for Borrego Springs Bank, N.A, a nationally chartered and federally
insured commercial bank that specializes in SBA and other government
guaranteed lending through its three branches and seven loan production
offices. As of September 30, 2012, AHH had assets of $141 million. Visit their
website at www.borregospringsbank.com.

Contact:

Sterling Financial Corporation
Media contact
Cara Coon, 509-626-534
cara.coon@bankwithsterling.com
or
Investor contact
Patrick Rusnak, 509-227-0961
patrick.rusnak@bankwithsterling.com
or
American Heritage Holdings
William Ruhlman, President & CEO, 619-668-5159
bruhlman@b-s-b.net
 
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