Sterling Savings completes merger with Golf Savings

Sister banks Sterling Savings and Golf Savings are merging, parent company Sterling Financial Corp. announced Aug. 4.

Sterling Financial, a Spokane-based holding company that has been rocked by failing loans to residential and commercial developers over the past two years, said the merger was effective Aug. 2 and that Golf branches would be switched to the Sterling name starting in September.

Sterling is the largest commercial bank headquartered in Washington state, while Golf is one of the largest mortgage lenders in the state. Both banks have a presence in Idaho.

The holding company reported net losses of $336.7 million for 2008 and $855.5 million for 2009. State and federal regulators have been watching the company and announced an agreement Oct. 15 that required Sterling Savings to raise $300 million to boost capital levels.

In recent months, private equity firms Warburg Pincus Private Equity and Thomas H. Lee Partners have agreed to invest a total of $278 million in exchange for ownership interests totaling 40 percent of the company.

Cara Coon, Sterling spokeswoman, said the merger was not related to the recapitalization, but she said she could not comment further because the company is in capital-raising mode.

She said Sterling had no immediate plans to close any offices.

Sterling Savings has bank branches in Boise, Cascade, Coeur d’Alene, Grangeville, Hayden, Kooskia, Lewiston, McCall, Meridian, Moscow, New Meadows, Plummer, Riggins and Troy.

Golf Savings has mortgage lending branches in Meridian and Coeur d’Alene. The bank was founded in 1981 as Lynwood Mortgage Corp. and became a full-service bank in 2000, changing its name to Golf. It merged with Sterling Financial in 2006.

Sterling’s board of directors gave initial backing to the merger in May and received regulatory approval in June.