Sterling Financial (STSA) in Spokane, Wash., is selling all of its Montana branches as it aims to become more efficient and improve its overall profits.
The $9.5 billion-asset company announced Monday that Eagle Bancorp Montana (EBMT) in Helena is buying its seven Montana branches for $7.3 million, or a 3.88% premium on the deposits.
Eagle is the parent company of the $332 million-asset American Federal Savings Bank. The deal, which includes $187 million of deposits and $44 million of performing loans, would more than double the size of Eagle's branch network in its home state, to 13 branches. More notably, six of the seven branches are in markets where Eagle currently has no branches.
As part of the deal, Eagle would also gain Sterling's Montana wealth management operation, which is based in Bozeman.
For Sterling, the planned sale is consistent with its effort to lower its overall efficiency ratio to below 60% by 2013. The company laid off about 160 workers earlier this year and it has said that it was conduction ongoing reviews of its branch network and lines of business to determine their overall profitability.
Following the sale, Sterling would still have roughly 185 branches in Washington, Idaho, Oregon and California. The deal is expected to close in the fourth quarter.