Sterling in Washington to Pay $43M for Commerce National

Sterling Financial (STSA) in Spokane, Wash., has agreed to buy Commerce National Bank in Newport Beach, Calif.

Sterling will pay $42.9 million in cash for the $243 million-asset Commerce National; the cost includes redemption of the seller's outstanding stock options and warrants. At $15.10 a share, the price represents a 32% premium to Commerce National's share price after the close of trading Wednesday. The companies expect to complete the merger in the third quarter.

Commerce National has $146.3 million in loans and $211.4 million in deposits at a single branch in Newport Beach. The $9.3 billion-asset Sterling has 60 branches in California branded as Sonoma Bank and Borrego Springs Bank, according to the Federal Deposit Insurance Corp.

Commerce National "is a solid, business-focused bank that we expect will provide substantial synergies with our current operations in the Orange County market," David DePillo, Sterling's chief lending officer, said in a Thursday press release. "In addition to a high quality, relationship-based loan portfolio, CNB also brings us a scalable equipment leasing business that fills a void in our current commercial product set."

This is Sterling's second acquisition in California in the past year. It agreed to pay $6.5 million for Borrego Springs Bank in La Mesa last October.