Davis Polk advised Sterling Financial Corporation in connection with its SEC-registered secondary offering of 5,738,637 shares of its common stock by the U.S. Department of the Treasury (Treasury) for proceeds of approximately $115 million. Treasury’s initial preferred stock investment in Sterling, made as part of the Troubled Asset Relief Program’s (TARP) Capital Purchase Program (CPP), was exchanged for common stock on August 26, 2010, as part of a larger recapitalization of the company.

FBR Capital Markets & Co. and Sandler O’Neill + Partners, L.P. were the joint book-running managers for the offering.

Sterling Financial Corporation operates as the bank holding company for Sterling Savings Bank. Headquartered in Spokane, Washington, Sterling Savings Bank offers commercial banking products and services, mortgage lending, construction financing and investment products to individuals, small businesses, commercial organizations and corporations through depository branches in Washington, Oregon, Idaho, Montana and California.

The Davis Polk corporate team included partner Sarah K. Solum and associates Christopher J. Kodama and Jacqueline M. Pace. The tax team included partner Kathleen L. Ferrell and law clerk Catherine Paskoff Chang. Partner Margaret E. Tahyar advised on bank regulatory matters. Members of the Davis Polk team are based in the Menlo Park and New York offices.



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