Sterling Financial

Spokane-based Sterling Financial Corporation said today it has reached agreements to raise $730 million in new capital from institutional, private equity and other investors. Expected to close within the next week, the transactions could result in Sterling issuing 4.2 billion shares of stock.

Sterling Financial Corp. reported a second-quarter loss Tuesday of $58.2 million, including a $70.8 million allowance for credit losses. A year ago, the Spokane bank reported a net loss of $33.9 million after a $79.7 million allowance for credit losses.

Sterling Financial Corp. on Monday announced the appointment of a former Wells Fargo & Co. executive as chairman of the board. The appointment of Leslie “Les” Biller must be approved by Sterling regulators and is subject to completion of its $720 million recapitalization effort.

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The U.S. Treasury will accept a steep markdown of its investment in Sterling Financial Corp. as part of a recapitalization plan, the Spokane company announced Thursday. The markdown was a condition imposed by Thomas H. Lee Partners, which has committed $134.7 million to Sterling’s recapitalization.

Thomas H. Lee Partners, a Boston private equity firm, will invest $134.7 million in struggling Sterling Financial Corp. as part of the Spokane bank-holding company’s ongoing effort to raise enough money to meet requirements imposed by federal regulators. As part of the recapitalization effort, Sterling also announced it will execute a separate stock exchange deal with the U.S. Treasury to convert about $303 million in preferred shares held by the Treasury to common stock worth about $76 million.

Sterling Financial Corp. on Tuesday announced tentative agreements with the U.S. Treasury and a potential investor that will determine whether the bank holding company remains an independent Spokane business and one of the largest financial institutions based in the Northwest. In a complicated financial restructuring plan months in the making, the Treasury would accept a steep markdown on the $303 million that it invested in Sterling only 15 months ago.