For employees of Sterling Bank, Friday marked a bittersweet finale, the official last day before being folded into Portland-based Umpqua Bank.
After a dramatic economic turnaround following a dark two years of near-collapse in 2008-10, Sterling rebounded to become the second-largest bank based in Washington.
Starting today, Sterling’s staff and branches will operate as Umpqua Bank, the largest community bank in the Western United States. The merger produced a bank with nearly 5,000 employees and nearly 400 branches across Idaho, Washington, Oregon and California.
Umpqua chief executive Ray Davis visited Spokane this week to help prepare for the transition.
The easy part, Davis said, is the changing of branch signs to the bright-yellow evergreen tree that’s Umpqua’s logo. Also easy will be the gradual redesign of Sterling’s area branch locations, moving toward Umpqua’s open-space floor plans and inviting interiors.
The hard part, Davis explained, will be the gradual morphing of two well-established banks, with the necessary reductions in jobs and some branches.
Combined, the bank now has $22 billion in assets.
The merger will allow for an estimated net savings of $87 million in operating costs, shared across both banks, Davis said.
Davis and Greg Seibly, the Sterling CEO who will now be in charge of Umpqua’s consumer banking, both said the process to identify cuts is ongoing.
“Some jobs we know will be cut – we don’t need two auditors for instance,” Davis said. But the other reductions will be done based on “finding the best of the best” branches and best people to retain, he added.
He said he’s made direct contact with all Umpqua and Sterling employees. His message: “I won’t tell you until we really know what we’re doing. Until then, we won’t speculate.”
He has determined already that Sterling’s data processing and data backup operations will remain and likely grow. That’s due to Umpqua determining the Sterling network is superior to the one Umpqua has used, Davis said.
Other managerial and back-office positions inside Sterling will remain in Spokane, he said.
Since Umpqua doesn’t have branches in this region, none of Sterling’s Eastern Washington or North Idaho branches is likely to close, said Seibly. Forty-two of the Sterling or Umpqua branches, mostly in Seattle, Portland and southern Oregon, are within 2 miles of each other – making about half of those branches the likely first choices for reductions.
Even then, the final decision will be which location is best for customers, based on deposits and other factors, Davis said. Other branches could later be added to the cut list, based on projections for maximum growth, he added.
The cuts in staff will be based on Umpqua’s already established skills assessment process. Last year, just before the Sept. 11 merger announcement, Sterling had 2,541 full-time-equivalent employees. Umpqua had 2,311.
“We sit and interview all our employees as part of a skills assessment,” Davis said. That began right after the announcement, but the process is long and deliberate, he said.
Seibly added that federal regulators made a careful and deliberate reduction process a required condition before approving the sale of Sterling.
“We know this is causing angst,” Davis said. “Our job is to try to take that angst away as quickly as we can.”
He noted that Umpqua’s ongoing practice has been to set up career centers to help employees and family members with job retraining or career changes.
Davis said that in 2004, after Umpqua acquired Humboldt Bancorp in Eureka, Calif., the company’s career center helped more than 100 laid-off workers find new jobs. Some took jobs in other banks, some went to new companies. Two retired “and only two of those people were unable to find work,” he said.
Spokane’s career center is one of four set up since the Sterling merger; the others are in Seattle, Portland and Roseburg, Ore.
Davis said he doubts the transition from Sterling to Umpqua will disrupt the lives of Eastern Washington and North Idaho customers.
If it does, he’s got a basic solution.
Every former Sterling branch will soon have a new hotline phone installed in the lobby of the “stores” – the Umpqua term for bank branches. Davis makes sure every “store” includes that phone – a direct line to his CEO’s office in Portland.
“And you better believe it, I want people to call, and I will answer,” he said.
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