Sterling Financial and Umpqua Holdings officials are counting down the days when the two financial institutions merge into one.

The deal will likely be finalized by the end of the month, pending approval by shareholders and regulators. Worth $2 billion, it is the largest transaction this century for both institutions.

The name will change - Umpqua Bank - and bank branches will now be called "stores," but the faces and services will remain the same, said Greg Seibly, president and CEO of Sterling.

The two banks announced the proposed merger last fall; it will result in the West Coast's largest community bank with 394 locations in five states - Oregon, Washington, Idaho, California and Nevada - 5,000 employees, $22 billion in assets, $15 billion in loans and $16 billion in deposits.

Officials say the merger will result in a bank that offers all the amenities of a large financial service business but will maintain the personal service and commitment of a community bank.

"The intent of both banks is to keep the customer front and center," said Cara Coons, communications and public affairs director for Sterling. "Our cultures both align to that now. What we're working on now is how to do that going forward, now that we're doubled in size."

Officials also plan to establish a $10 million community foundation, based on similar activities as Umpqua Holdings, to support children, education and culture in the towns they serve.

"There are a lot of conversations going on," Seibly said. "In a lot of our communities, poverty, homelessness, low education, low matriculation rates - they're all linked. It's a big funding opportunity for the company. We're looking at, 'How do we make a difference in those areas that have well-identified needs?' There is no shortage of need."

For example, Umpqua Holdings has a Learn to Earn program in which it engages students to learn about their money, how it works - and how it can work for them.

A shaky past

Five years ago, things didn't look so rosy, Seibly admitted.

"Sterling has always been a community bank," he said, "and our area of emphasis was that we were a substantial lender to homebuilders. As the economy got difficult, homebuilders began to struggle."

In 2009, regulators gave Sterling Financial Corp. until Dec. 15 to raise $300 million in new capital after it received a cease and desist order from the Washington Department of Financial Institutions and the Federal Deposit Insurance Corporation.

The bank had invested in real estate opportunities that went bankrupt; it then agreed to develop new plans to maintain adequate capital, reduce commercial real estate loans and cut off loans to troubled borrowers - all within 60 days.

The bank also agreed to review loan-loss allowances and submit a plan to reduce reliance on brokered deposits, and was given 120 days to develop a three-year strategic plan to improve profitability and lower risk.

"We did it; that's why we're still here," Seibly said. "The capital allowed us to deal with the credit quality issues we had, and post-recapitalization, where we were going to take the company from mid-2010 and beyond."

Company board

Profits are up, he added, and officials say they look forward to working with Umpqua to create "one of the strongest, most innovative community banks in the country."

Ray Davis will stay on as president and CEO of Umpqua Holdings Corporation while Seibly and Umpqua Bank co-president Cort O'Haver will join as co-presidents.

Upon completion, the combined company's board will have 13 directors, comprised of nine representatives from Umpqua and four from Sterling.

Going forward

Sterling and Umpqua both come from community-oriented backgrounds, Seibly said.

"These are two companies that have deeply similar philosophies," he said. "On both sides, our four big constituents are our customers, our associates, making a difference in the community and, because we're a public company, our shareholders."

Additionally, he said, both firms are "incredibly philanthropic," contributing millions of dollars in grants and sponsorships into their communities and offering up to 40 hours of paid time off to its employees to volunteer.

"Sterling and Umpqua both put its money where its mouth is, in terms of supporting those needs," Seibly said.

Third, the business itself will have a larger footprint throughout the west.

"Our intent is that, even though we're sizeable, we want to keep it small," he said. "There's this perception that just because you're big doesn't mean you can be a community bank. It's in the spirit of both companies. We'll keep it feeling small, keep decisions local; very little from the customer perspective will change.

"Our goal is to continue to surprise and delight our customer," he added. "We're here to make a difference and provide solutions for people's lives. Our commitment will be just as deep and rich as it always has been."