The U.S. Treasury has approved agreements that will inject almost $280 million in private equity investment into Sterling Financial Corp.

Warburg Pincus Private Equity X, L.P. and Thomas H. Lee Partners L.P. will each invest $139 million in Sterling, which has undertaken a $720 million recapitalization effort to meet regulator requirements.

The Treasury Department committed $303 million in Sterling under the Troubled Asset Relief Program, but has agreed to mark that investment down to $75.8 million, plus warrants to purchase stock in the future, to assist in the recapitalization. 

Sterling is the Spokane-based holding company for Sterling Savings Bank and Golf Savings Bank.

A Wall Street private equity firm has agreed to invest $139 million in Sterling Financial Corp. as the Spokane bank holding company continues its recapitalization effort.

Warburg Pincus Private Equity X, L.P. would own 20.5 percent of Sterling if the company successfully completes its $720 million plan to raise enough capital to satisfy regulator requirements.

Warburg Pincus would own Sterling common and preferred stock.

Thomas H. Lee Partners, which had earlier announced a $170 million investment in Sterling, would roll that amount back to the equivalent of the Warburg Pincus investment.

Both investments, and participation by the U.S. Treasury, are subject to completion of the recapitalization plan, regulatory approvals, stabilization of Sterling assets and capital levels, and other conditions.