Sterling Financial Corp., the parent company of Sonoma Bank, announced agreements Friday to raise a total of $730 million from investors in its latest effort to stay afloat.
Sterling lost $855.5 million in 2009 as it continued to incur massive losses from its residential and commercial construction loans.
The Spokane, Wash., company purchased Sonoma Bank, formerly known as Sonoma National Bank, in 2007 for $345 million in cash and stock.
Since then, Sterling stock has dropped from $32 a share to close at 64 cents Friday on the Nasdaq exchange.
Thomas H. Lee Partners and Warburg Pincus Private Equity X amended earlier agreements in order to increase their investments in Sterling. The two firms are now expected to purchase 68.4 million shares of common stock and 1.7 million shares of Series B preferred stock, for an aggregate purchase price of approximately $171 million each, according to Friday's announcement.
Sterling also agreed to privately sell 155.3 million shares of common stock and 3.9 million shares of Series D preferred stock in exchange for about $388 million in cash to about 30 investors.
The deal likely will close next Thursday, according to a company release. But it relies on several conditions, including that none of the investors pulls out.
— Nathan Halverson