Junior Subordinated Debentures

9 Months Ended

Sep. 30, 2012

Junior Subordinated Debenture Owed to Unconsolidated Subsidiary Trust [Abstract]

Junior Subordinated Debentures

Junior Subordinated Debentures:

Sterling has raised regulatory capital through the formation of trust subsidiaries and has assumed similar obligations through mergers with other financial institutions. The trusts are business trusts in which Sterling owns all of the common equity. The proceeds from the sale of the securities were used to purchase junior subordinated debentures issued by Sterling. Sterling’s obligations under the junior subordinated debentures and related documents, taken together, constitute a full and unconditional guarantee by Sterling of the trusts’ obligations. The junior subordinated debentures are treated as debt of Sterling. The junior subordinated debentures mature 30 years after issuance, and are redeemable, subject to certain conditions. As of September 30, 2012, all of Sterling's junior subordinated debentures were redeemable at par, at their applicable quarterly or semiannual interest payment dates. During the third quarter of 2009, Sterling elected to defer regularly scheduled interest payments on its junior subordinated debentures. In June 2012, Sterling elected to resume regularly scheduled interest payments and as a result, the deferred accrued interest in the amount of $19.6 million was paid in full.

Details of the junior subordinated debentures are as follows:

				September 30, 2012
Subsidiary Issuer	Issue Date	Maturity Date	Next Interest Payment Date	Rate		Amount
	(in thousands)
Sterling Capital Trust IX	July 2007	Oct 2037	Jan 2013	1.86%		$	46,392
Sterling Capital Trust VIII	Sept 2006	Dec 2036	Dec 2012	2.02		51,547
Sterling Capital Trust VII	June 2006	June 2036	Dec 2012	1.91		56,702
Lynnwood Financial Statutory Trust II	June 2005	June 2035	Dec 2012	2.19		10,310
Sterling Capital Trust VI	June 2003	Sept 2033	Dec 2012	3.59		10,310
Sterling Capital Statutory Trust V	May 2003	June 2033	Dec 2012	3.62		20,619
Sterling Capital Trust IV	May 2003	May 2033	Nov 2012	3.58		10,310
Sterling Capital Trust III	April 2003	April 2033	Jan 2013	3.69		14,433
Lynnwood Financial Statutory Trust I	Mar 2003	Mar 2033	Dec 2012	3.52		9,440
Klamath First Capital Trust I	July 2001	July 2031	Jan 2013	4.48		15,230
				2.55%	*	$	245,293
* Weighted average rate.