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Sterling Said to Seek Buyers for Washington State Lender

Aug. 31 (Bloomberg) -- Sterling Financial Corp., the Washington state lender backed by Warburg Pincus LLC and Thomas H. Lee Partners LP, is seeking takeover bids from other banks, said two people with direct knowledge of the matter.

At least two potential buyers held talks with Sterling in recent weeks, said the people, who asked not to be identified because the discussions were confidential.

Sterling has a market value of about $1.5 billion, which would rank among the biggest of the more than 100 bank takeover deals announced this year, according to data compiled by Bloomberg. Suitors for U.S. lenders have been discouraged by new costs imposed under the 2010 Dodd-Frank Act, and by the fate of M&T Bank Corp.’s year-old bid for Hudson City Bancorp, which was delayed by added scrutiny from regulators.

Warburg Pincus and Thomas H. Lee Partners each held more than 20 percent of the Spokane-based bank’s common stock as of Jan. 31, according to the company. Sterling Chief Financial Officer Patrick J. Rusnak declined to comment.

U.S. bank takeovers announced this year total $7.93 billion, according to data compiled by Bloomberg. The largest was PacWest Bancorp’s $2.2 billion offer last month for CapitalSource Inc. The Hudson City takeover, which is still pending, originally was valued at about $3.7 billion when announced on Aug. 27, 2012.

Sterling sold stakes in 2010 to New York-based Warburg and Boston’s Thomas H. Lee as three straight annual losses eroded capital. It also took $303 million from the U.S. bank bailout fund, which was repaid a year ago through a public stock offering.

The firm was profitable for the past two fiscal years and the shares have advanced about 16 percent in 2013 to $24.20.

Assets stood at $9.9 billion as of midyear with deposits of $6.6 billion from 175 branches in Washington, Oregon, Idaho and California. It’s run by Greg Seibly, the president and chief executive officer, who joined in late 2009.

To contact the reporter on this story: Matthew Monks in New York at

To contact the editor responsible for this story: Jeffrey McCracken at

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