NEW YORK — Sterling Financial Corp., a regional bank in Washington state, said Monday it plans to buy FirstBank NW Corp., a savings and loan company operating in Washington, Idaho and Oregon, for $169.6 million in stock and cash.

Shares of FirstBank NW rose $3.84, or 17 percent, to $25.87 in morning trading on the Nasdaq. Sterling shares fell 93 cents, or 3 percent, to $30.26.

Sterling said the combined business will have total assets of about $9.2 billion, deposits of about $6.1 billion, and roughly $6.3 billion in loans.

Under terms of the acquisition, each FirstBank share will be converted into the right to receive 0.789 shares of Sterling common stock and $2.55 in cash.

Based upon Sterling's closing price on Friday of $31.19 per share, the offer amounts to $27.16 per share of FirstBank stock. The offer represents a premium of 23 percent over the closing price.

The boards of directors on both sides have approved the deal, which is expected to close in this year's fourth quarter.

Sterling expects the acquisition to bolster 2007 earnings per share. It also said it plans to close an undisclosed number of branches in some locations.

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