Umpqua Holdings Corporation and Sterling Financial Corporation Complete Merger

  Umpqua Holdings Corporation and Sterling Financial Corporation Complete
  Merger

                Form U.S. West Coast’s Largest Community Bank

Business Wire

PORTLAND, Ore. -- April 18, 2014

Umpqua Holdings Corporation (NASDAQ:UMPQ) and Sterling Financial Corporation
announced the completion of their merger today, creating the West Coast’s
largest community bank.

The combined company will operate as Umpqua Holdings Corporation and conduct
banking operations under the Umpqua Bank name and brand. Umpqua now has
approximately $22 billion in assets, $15 billion in loans and $16 billion in
deposits, with 5,000 associates and 394 stores across five states – Oregon,
Washington, Idaho, California and Nevada.

Ray Davis will continue to lead Umpqua Holdings Corporation as president and
CEO. Cort O’Haver will serve as Umpqua Bank’s president of commercial banking,
with former Sterling president and CEO Greg Seibly serving as president of
consumer banking. Umpqua will continue to deliver the high-touch level of
service that customers expect, with an expanded branch and ATM network and a
broad range of products and expertise in retail, small business, private and
commercial banking; asset and wealth management; and securities brokerage.

“Today, we took a significant step forward in achieving Umpqua’s goal of
building a community bank at any size, one that offers the products and
expertise of a large bank, the engagement of a community bank, and the
innovative customer experience of a leading retailer,” said Ray Davis,
president and CEO of Umpqua Bank. “Together, Sterling and Umpqua look forward
to serving our customers, communities and shareholders with expanded resources
and geographic reach.”

Transaction Details

Under the terms of the agreement, Sterling shareholders will receive 1.671
shares of Umpqua common stock and $2.18 cash for each share of Sterling common
stock. The total value of the Sterling merger consideration, based on the
closing price of Umpqua shares on April 17, 2014 of $18.58, is $33.23 per
share.

The transaction is intended to qualify as a tax-free reorganization for U.S.
federal income tax purposes and Sterling shareholders are not expected to
recognize any taxable gain or loss in connection with the share exchange to
the extent of the stock consideration received. Giving effect to the
transaction, existing shareholders of Umpqua are expected to own approximately
51% of the outstanding shares of the combined company at closing, and Sterling
shareholders are expected to own approximately 49%.

J.P. Morgan Securities LLC served as financial advisor and Wachtell, Lipton,
Rosen & Katz served as legal counsel to Umpqua.

Customer Information

Customers will benefit from an expanded branch and ATM network as well as
products and expertise in retail, small business, private and corporate
banking; asset and wealth management; and securities brokerage.

Beginning immediately, customers of both Umpqua and Sterling can use any of
the company’s ATMs to make cash withdrawals without incurring fees. Sterling
customers can also continue to bank as usual by phone, ATM and online. In
addition, customers of both banks will be able to conduct most basic
transactions at any Umpqua or Sterling location.

Signs will begin changing to the Umpqua brand on April 19, a process that is
expected to be completed in early June.

Umpqua in the Community

As part of the merger agreement, Umpqua has established the Umpqua Bank
Charitable Foundation to advance the company’s commitment to the communities
it serves. The Foundation, which will be funded with a $10 million investment,
will expand the company’s philanthropic efforts. All Umpqua associates will
continue to receive paid time off to volunteer and contribute to their
communities through Umpqua’s Connect Volunteer Network®, which provides every
associate with up to 40 hours each year to volunteer.

About Umpqua Holdings Corporation

Umpqua Holdings Corporation (NASDAQ: UMPQ) is the parent company of Umpqua
Bank, an Oregon-based community bank recognized for its entrepreneurial
approach, innovative use of technology, and distinctive banking solutions.
Umpqua Bank has locations across Idaho, Washington, Oregon, California and
Northern Nevada. Umpqua Holdings also owns a retail brokerage subsidiary,
Umpqua Investments, Inc., which has locations in Umpqua Bank stores and in
dedicated offices in Oregon. Umpqua Private Bank serves high net worth
individualsand non-profits,providing trust and investment services. Umpqua
Holdings Corporation is headquartered in Portland, Oregon. For more
information, visit www.umpquaholdingscorp.com.

Cautionary Statement Regarding Forward-Looking Statements

This document contains certain “forward-looking statements” within the meaning
of the safe harbor provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be identified by
the use of words such as “anticipate”, “may”, “can”, “believe”, “expect”,
“project”, “intend”, “likely”, “plan”, “seek”, “should”, “would”, “estimate”
and similar expressions and any other statements that predict or indicate
future events or trends or that are not statements of historical facts. These
forward-looking statements are subject to numerous risks and uncertainties.
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 Umpqua’s control. These risks and
uncertainties include, but are not limited to, the following: Umpqua’s ability
to achieve the synergies and earnings accretion contemplated by the merger;
Umpqua’s ability to promptly and effectively integrate the businesses of
Sterling and Umpqua; changes in laws or regulations or interpretations
thereof, including tax laws and regulations; and changes in general economic
conditions. Umpqua undertakes no obligation (and expressly disclaims any such
obligation) to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise. For
additional information concerning factors that could cause actual conditions,
events or results to materially differ from those described in the
forward-looking statements, please refer to the factors set forth under the
headings "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in Umpqua’s most recent Form 10-K and
10-Q reports and to Umpqua’s most recent Form 8-K reports, which are available
online at www.sec.gov or at Umpqua’s web address, above. No assurances can be
given that any of the events anticipated by the forward-looking statements
will transpire or occur, or if any of them do so, what impact they will have
on the results of operations or financial condition of Umpqua.

Contact:

Umpqua Holdings Corporation
Ray Davis, 503-727-4101
President & CEO
raydavis@umpquabank.com
Ron Farnsworth, 503-727-4108
EVP/Chief Financial Officer
ronfarnsworth@umpquabank.com
 
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