• Sector: Financial Services
  • Geography: Americas
  • Stage: Distressed Recapitalization
  • Investment Year: 2009 (Webster), 2010 (Sterling, National Penn)
  • Exit Year: 2013 (Webster), 2014 (Sterling), 2015 (National Penn)

Webster, Sterling, National Penn

During and in the aftermath of the global financial crisis of 2008, Warburg Pincus reviewed and conducted detailed diligence on a significant number of bank recapitalization opportunities. Ultimately, Warburg Pincus invested in three U.S. banks—Webster Financial Corporation (Webster), Sterling Financial Corporation (Sterling), and National Penn Bancshares (National Penn). Warburg Pincus employed strict criteria in selecting these investments. Each bank had strong market share and brand recognition in its markets served, boundable balance sheet risk, top-tier management teams with a strong risk culture, and attractive acquisition or merger opportunities.

In 2009, Warburg Pincus invested in Webster. Warburg Pincus worked extensively with the management team to de-risk the bank’s loan portfolio, stabilize the bank’s funding, and retool and grow the retail banking and asset management divisions. Warburg Pincus exited its investment in 2013.

In 2010, Warburg Pincus led the full recapitalization of Sterling. Over the course of the investment, Warburg Pincus worked closely with management to de-risk the loan portfolio, reposition the deposit base, build a multifamily lending unit, and consummate several M&A transactions. In 2014, Sterling completed a merger with Portland-based Umpqua Bank, creating the largest community bank on the West Coast. Warburg Pincus exited its investment in 2014.

In 2010, Warburg Pincus invested in National Penn. In 2014, National Penn completed the acquisition of TF Financial, an in-footprint, Pennsylvania-based bank with $850 million in assets. Warburg Pincus exited its investment in 2015.

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The investments described in the case studies are provided for illustrative purposes only and are not, and do not purport to be, representative of all investments, or all types of investments, previously made by Warburg Pincus, or indicative of the performance of all prior Warburg Pincus investments. The case studies have been selected on the basis of objective criteria that Warburg Pincus believes are representative of the firm’s experience partnering with portfolio company management teams, and of the sectors, stages, strategies and/or geographies in which the firm invests. The information provided in the case studies are not necessarily an indication of future results, and may not be relied up for any purpose. Warburg Pincus’ current or future portfolio companies may differ materially in size, type, performance and other characteristics from the investments presented in the case studies. Further, references in this case study should not be construed as a recommendation or offer to buy or sell any particular security or to make any particular investment.