Published March 2006

Sterling grows
its county presence

By Kimberly Hilden
SCBJ Assistant Editor

With its recent conversion to a commercial bank and plans to further expand its branch network in Western Washington, Sterling Savings Bank is an organization on the move.

“I think we have a great story to tell. We are the third-largest bank headquartered in Washington state. We’re a growth company,” said Heidi Stanley, vice chair and chief operating officer of the Spokane-based bank.

To fuel that growth, the 22-year-old financial institution in July converted from a state-chartered savings and loan association to a state-chartered commercial bank after receiving regulatory approval from the Washington state Department of Financial Institutions and the Federal Reserve Board.

The change was years in the making and evolved out of the organization’s need to better serve its customers even as it faced statutory lending limits as a thrift, Stanley said.

“As we grew and started to do more and more business lending and more traditional banking activity, it became very apparent to us that we were reaching a threshold,” she said.

The 1998 acquisition of 33 KeyBank branches in Idaho, Oregon and Washington, including an office in Stanwood, accelerated Sterling’s internal transition from a savings and loan to a commercial bank. The transition was one of mind set, Stanley said.

“In the 1953 thrift scenario that I often talk about, you just sat there and waited for the customer to come walk through the door ... so you have some employees with that type of a mind set when you acquire a thrift,” she said.

By acquiring 33 branches that had been operating as commercial bank branches, Sterling received employees that had been operating in a very competitive, service-oriented market and had been offering products geared to that market.

“In my mind (that) was a turning point in our company becoming a commercial bank,” Stanley said.

With the purchase, Sterling’s branch network jumped to 73. In the years since, the bank has almost doubled in size, with 140 branches in Washington, Idaho, Oregon and Montana. About half of the bank’s growth has come through acquisition, with the remainder a product of organic growth, she said.

“The vast majority of our business is on the I-5 corridor from north Seattle to the California border,” Stanley said of the bank, which reported assets of $7.6 billion at the end of 2005.

Sterling’s I-5 corridor network expanded in November with the opening of its newest Snohomish County branch, at 19230 Alderwood Parkway, Suite 110, in Lynnwood.

The branch celebrated its grand opening in January and held an open house in mid-February. A full-service location, the office staff includes Manager Jason Francis, a private banker, a consumer lender and customer service representatives, Stanley said.

“We’re looking forward to being in this location; we have actually looked for a long time for real estate in this location,” she said.

Sterling will further grow its Puget Sound network this year, with plans in the works to open branches in Redmond, Issaquah, Mercer Island and Kirkland, Stanley said.

Also, Sterling Savings’ parent company, Sterling Financial Corp., in February announced that it had signed a definitive agreement for the merger of Lynnwood Financial Group Inc., parent company of Golf Savings Bank and Golf Escrow, with the deal expected to close in the third quarter of this year.

Under the transaction, which is valued at $65.3 million, Golf Savings Bank and Golf Escrow will continue to operate as wholly-owned subsidiaries of Sterling.

“We are very pleased to welcome the employees, customers and investors of Lynnwood into the Sterling family,” said Harold Gilkey, chairman and chief executive of Sterling. “The merger is consistent with our growth plans as we continue to strengthen our leadership role in community banking in the Pacific Northwest.”

As it continues to expand, the financial institution will rely on its motto, “hometown helpful,” to compete and gain market share, Stanley said.

“It is who we are; it’s our culture,” she said of the relationship banking that is at the core of Sterling’s operation. “Hometown: You will be (greeted) by name as you come into the branch. Helpful: We will serve you where you want to be served — at a branch, (or) online.”

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