Class-action lawsuits in Washington and Oregon against Spokane-based Sterling Financial Corp. were dropped voluntarily Oct. 16, the company says.
Separately, Sterling plans to acquire a minority-owned bank in Southern California.
The lawsuits claimed Sterling Bank, for which Sterling Financial is the parent company, improperly listed debit-card transactions from highest to lowest dollar amount, instead of chronologically, leading to a greater number of overdraft fees. Further investigation into debit-card transactions and overdraft-fee practices led to the plaintiffs dismissing the claims, says Pat Rusnak, chief financial officer for Sterling.
Rusnak says the Washington lawsuit was originally filed March 22, and the Oregon lawsuit was filed May 25.
The lawsuits would have represented Sterling Bank checking account customers in Washington, Oregon, California, Idaho, and Montana.
Also, Sterling has entered into an agreement to acquire for $6.5 million American Heritage Holdings LLC, the La Mesa, Calif.-based holding company for Borrego Springs Bank. Pending regulatory approval, the transaction is expected to be completed in the first quarter of 2013, Rusnak says. As of Sept. 30, American Heritage had $141 million in assets.
"It took several months to negotiate, which is par for the course," Rusnak says.
David DePillo, vice chairman and chief lending officer for Sterling, says in a press release that the acquisition will aid Sterling in its efforts to increase its commercial lending capabilities. Borrego Springs Bank has been a leading originator of U.S. Small Business Administration-backed loans in past years. DePillo says the acquisition will offer Borrego Springs Bank branches the chance to provide expanded product offerings through Sterling.
Borrego Springs Bank has been a minority-owned financial institution, geared toward meeting the needs of Native American tribes and their members.
The company currently has three branches and seven loan offices, Rusnak says.
Sterling currently has 186 branches in the Pacific Northwest and also operates as Sonoma Bank, in California.
The company reported $9.6 billion in assets at the end of the second quarter. Sterling is expected to release third-quarter earnings later this week.