Sterling Financial Corp. in Spokane, Wash., has agreed to buy the guts of First Independent Bank of Vancouver, Wash.
Under the deal announced Monday, the Sterling Savings Bank unit would take over certain assets and liabilities (including all deposits) and the banking operations of First Independent, a $796.5 million-asset subsidiary of First Independent Investment Group.
First Independent's holding company would retain approximately $49 million of loans and $34 million of other assets.
A number of factors will determine the final price tag.
The $9.2 billion-asset Sterling would pay an initial premium of $8 million plus the net value of the acquired assets and liabilities at closing. Sterling has agreed to pay an additional premium of as much as $17 million over the 18 months following the closing based on the performance of the acquired loans and any reductions in core deposits and wealth management income.
Sterling would get 14 branches in Clark and Skamania counties in Washington and two offices in Portland, Ore. Its take would include
$691 million of deposits and $455 million of assets under management from First Independent's wealth and trust businesses.
The deal is expected to close early next year.
"First Independent's low-cost core deposit funding base, along with its high quality loan portfolio and top-notch community banking and wealth management teams, is attractive to us as we advance within key markets," Greg Seibly, the president and chief executive of Sterling, said in a news release. "The transaction is financially compelling and moves Sterling to the next stage of the growth strategy."
The once troubled Sterling raised $730 million last year with investments from private equity firms and a common stock sale through a private placement.
"We made the difficult decision to sell First Independent because we believe it is the best way to ensure Southwest Washington has a community-focused bank," Jeanne Firstenburg, president and chief operating officer of First Independent, said in a press release. Firstenburg added that additional outside capital was essential to creating a competitive franchise.
Barclays Capital advised Sterling on the transaction, and Sandler advised First Independent.