exv99w2

Exhibit 99.2

Sterling Financial Corporation
CONSOLIDATED BALANCE SHEETS


	Sept 30,			June 30,			Sept 30,
(in thousands, except per share amounts, unaudited)	2007			2007			2006
ASSETS:
Cash and cash equivalents	$	168,356		$	192,401		$	144,975
Investments and mortgage-backed securities (“MBS”) available for sale		1,788,911			1,697,424			1,864,923
Investments held to maturity		115,518			108,430			83,681
Loans receivable, net		8,747,430			8,507,423			6,245,470
Loans held for sale		54,460			84,613			119,406
Real estate owned, net		3,427			4,012			4,369
Office properties and equipment, net		94,939			96,361			79,150
Bank owned life insurance (“BOLI”)		149,136			147,354			112,383
Goodwill, net		453,294			456,315			144,861
Other intangible assets, net		32,852			34,078			16,634
Prepaid expenses and other assets, net		138,592			135,236			101,823

Total assets	$	11,746,915		$	11,463,647		$	8,917,675


LIABILITIES:
Deposits	$	7,766,392		$	7,620,362		$	5,953,767
Advances from Federal Home Loan Bank		1,462,132			1,594,844			1,373,513
Repurchase agreements and fed funds		941,143			744,903			623,612
Other borrowings		273,467			250,074			237,222
Accrued expenses and other liabilities		145,063			131,293			120,840

Total liabilities		10,588,197			10,341,476			8,308,954


SHAREHOLDERS’ EQUITY:
Common stock		51,422			51,330			37,024
Additional paid-in capital		891,518			889,890			441,547
Accumulated comprehensive loss:
Unrealized loss on investments and MBS ⁽¹⁾		(32,067	)		(44,974	)		(35,249	)
Retained earnings		247,845			225,925			165,399

Total shareholders’ equity		1,158,718			1,122,171			608,721

Total liabilities and shareholders’ equity	$	11,746,915		$	11,463,647		$	8,917,675


Book value per share	$	22.53		$	21.86		$	16.44
Tangible book value per share ⁽²⁾	$	13.08		$	12.31		$	12.08
Shares outstanding at end of period		51,422,336			51,329,826			37,024,265
Shareholders’ equity to total assets		9.86	%		9.79	%		6.83	%
Tangible shareholders’ equity to tangible assets ⁽³⁾		5.97	%		5.76	%		5.11	%


(1)		Net of deferred income taxes.

(2)		Amount represents shareholders’ equity less net goodwill and other intangible assets divided by total shares outstanding.

(3)		Amount represents shareholders’ equity less net goodwill and other intangible assets divided by assets less net goodwill and other intangible assets.

Sterling Financial Corporation
CONSOLIDATED STATEMENTS OF INCOME


	Three Months Ended									Nine Months Ended
	Sept 30,			June 30,			Sept 30,			Sept 30,			Sept 30,
(in thousands, except per share amounts, unaudited)	2007			2007			2006			2007			2006
INTEREST INCOME:
Loans	$	179,132		$	172,825		$	125,554		$	504,720		$	321,021
Mortgage-backed securities		18,882			19,356			21,626			58,706			67,444
Investments and cash		1,904			1,880			1,028			5,455			2,642

Total interest income		199,918			194,061			148,208			568,881			391,107


INTEREST EXPENSE:
Deposits		71,489			70,666			51,653			205,875			127,372
Borrowings		34,765			34,355			26,522			99,686			73,697

Total interest expense		106,254			105,021			78,175			305,561			201,069


Net interest income		93,664			89,040			70,033			263,320			190,038
Provision for losses on loans		(3,888	)		(3,975	)		(4,698	)		(12,088	)		(13,998	)

Net interest income after provision		89,776			85,065			65,335			251,232			176,040


NONINTEREST INCOME:
Fees and service charges		14,966			13,694			11,526			40,852			31,220
Mortgage banking operations		7,314			9,807			5,572			25,979			10,568
Loan servicing fees		366			410			473			1,459			1,224
Real estate owned operations		223			(93	)		(138	)		85			247
BOLI		1,553			1,717			1,225			4,817			3,611
Other		(215	)		(757	)		(207	)		(759	)		(372	)

Total noninterest income		24,207			24,778			18,451			72,433			46,498


NONINTEREST EXPENSES:
Employee compensation and benefits		41,114			39,162			31,479			118,348			82,278
Occupancy and equipment		10,767			11,681			8,755			32,915			23,046
Amortization of core deposit intangibles		1,225			1,226			586			3,492			1,697
Other		20,998			17,822			14,482			54,909			39,510

Total noninterest expenses		74,104			69,891			55,302			209,664			146,531


Income before income taxes		39,879			39,952			28,484			114,001			76,007
Income tax provision		(13,349	)		(12,971	)		(9,145	)		(37,569	)		(24,321	)

Net Income	$	26,530		$	26,981		$	19,339		$	76,432		$	51,686


Earnings per share — basic	$	0.52		$	0.53		$	0.52		$	1.55		$	1.45
Earnings per share — diluted	$	0.51		$	0.52		$	0.52		$	1.54		$	1.44

Core earnings ⁽¹⁾	$	26,695		$	27,699		$	19,587		$	78,076		$	51,934
Core earnings per share — basic ⁽¹⁾	$	0.52		$	0.54		$	0.53		$	1.59		$	1.46
Core earnings per share — diluted ⁽¹⁾	$	0.52		$	0.54		$	0.53		$	1.57		$	1.44

Weighted average shares outstanding — basic		51,279,114			51,189,438			36,891,986			49,257,951			35,645,887
Weighted average shares outstanding — diluted		51,660,186			51,699,098			37,273,560			49,768,308			35,992,764


(1)		See Exhibit A.


Sterling Financial Corporation
OTHER SELECTED FINANCIAL DATA


	Three Months Ended									Nine Months Ended
	Sept 30,			June 30,			Sept 30,			Sept 30,			Sept 30,
(in thousands, unaudited)	2007			2007			2006			2007			2006
LOAN ORIGINATIONS:
Residential real estate	$	369,216		$	454,921		$	328,436		$	1,168,755		$	477,657
Multifamily real estate		13,240			4,650			2,750			17,890			4,215
Commercial real estate		67,131			1,200			35,738			79,541			106,241
Construction		579,287			735,552			588,466			1,849,659			1,614,581
Consumer — direct		90,440			113,321			79,063			267,329			261,571
Consumer — indirect		63,001			57,013			56,660			184,926			127,347
Commercial banking		198,317			339,077			312,240			796,596			924,350

Total loan origination volume	$	1,380,632		$	1,705,734		$	1,403,353		$	4,364,696		$	3,515,962


PERFORMANCE RATIOS:
Return on average assets		0.91	%		0.94	%		0.89	%		0.93	%		0.85	%
Return on average assets, core ⁽¹⁾		0.91	%		0.97	%		0.90	%		0.95	%		0.85	%
Return on average shareholders’ equity		9.3	%		9.6	%		13.4	%		9.7	%		12.9	%
Return on average shareholders’ equity, core ⁽¹⁾		9.3	%		9.9	%		13.5	%		9.9	%		13.0	%
Return on average tangible equity ⁽²⁾		16.2	%		16.9	%		18.1	%		16.6	%		17.3	%
Operating efficiency		62.9	%		61.4	%		62.5	%		62.4	%		61.9	%
Operating efficiency, core ⁽¹⁾		62.7	%		60.4	%		62.1	%		61.6	%		61.7	%
Non interest expense to average assets (annualized)		2.54	%		2.45	%		2.54	%		2.54	%		2.41	%
Average assets	$	11,596,478		$	11,463,375		$	8,642,452		$	11,039,992		$	8,130,378
Average shareholders’ equity	$	1,135,886		$	1,127,110		$	573,785		$	1,055,522		$	535,922

Average tangible equity ⁽²⁾	$	647,919		$	638,591		$	423,939		$	614,237		$	399,412

REGULATORY CAPITAL RATIOS:
Sterling Financial Corporation:
Tier 1 leverage (to average assets)		9.1	%		8.3	%		8.1	%		9.1	%		8.1	%
Tier 1 (to risk-weighted assets)		10.2	%		9.7	%		9.9	%		10.2	%		9.9	%
Total (to risk-weighted assets)		11.3	%		10.8	%		10.9	%		11.3	%		10.9	%
Sterling Savings Bank:
Tier 1 leverage (to average assets)		8.6	%		8.5	%		8.1	%		8.6	%		8.1	%
Tier 1 (to risk-weighted assets)		9.8	%		9.8	%		9.7	%		9.8	%		9.7	%
Total (to risk-weighted assets)		11.0	%		10.9	%		10.7	%		11.0	%		10.7	%

OTHER:
Sales of financial products	$	106,384		$	28,798		$	36,183		$	176,878		$	110,979
FTE employees at end of period (whole numbers)		2,566			2,612			2,100			2,566			2,100


(1)		See Exhibit A.

(2)		Average tangible equity is average shareholders’ equity less average net goodwill and other intangible assets.

Sterling Financial Corporation
OTHER SELECTED FINANCIAL DATA


	Sept 30,			June 30,			Sept 30,
(in thousands, unaudited)	2007			2007			2006
LOANS BY COLLATERAL TYPE:
Residential real estate	$	673,058		$	652,967		$	488,130
Multifamily real estate		377,204			377,929			284,989
Commercial real estate		1,217,458			1,214,762			832,839
Construction		2,877,253			2,731,024			1,985,414
Consumer — direct		777,764			765,217			696,775
Consumer — indirect		358,854			337,491			229,740
Commercial banking		2,586,233			2,545,752			1,807,669
Deferred loan fees, net		(18,352	)		(18,085	)		(13,581	)
Allowance for losses on loans		(102,042	)		(99,634	)		(66,505	)

Net loans receivable	$	8,747,430		$	8,507,423		$	6,245,470


ALLOWANCE FOR LOSSES ON LOANS AND UNFUNDED COMMITMENTS:
Allowance — loans, beginning of quarter	$	99,634		$	93,837		$	58,971
Acquired		0			2,494			4,552
Provision		3,638			3,975			4,698
Charge offs, net of recoveries		(1,230	)		(671	)		(592	)
Transfers		0			(1	)		(1,124	)

Allowance — loans, end of quarter		102,042			99,634			66,505

Allowance — unfunded commitments, beginning of quarter		6,047			6,046			3,834
Acquired		0			0			0
Provision		257			0			0

Transfers		0			1			1,124

Allowance — unfunded commitments, end of quarter		6,304			6,047			4,958
Total credit allowance	$	108,346		$	105,681		$	71,463


Net charge-offs to average net loans (annualized)		0.06	%		0.03	%		0.04	%
Net charge-offs to average net loans (ytd)		0.03	%		0.02	%		0.05	%
Loan loss allowance to total loans		1.15	%		1.16	%		1.05	%
Total credit allowance to total loans		1.22	%		1.23	%		1.13	%
Loan loss allowance to nonperforming loans (excluding loans classified as loss)		195.3	%		411.9	%		472.2	%
Total allowance to nonperforming loans		207.9	%		437.7	%		507.9	%
Nonperforming loans to net loans		0.62	%		0.31	%		0.24	%

NONPERFORMING ASSETS:
Past 90 days due	$	0		$	803		$	10,945
Nonaccrual loans		54,268			25,618			3,044
Restructured loans		0			0			793

Total nonperforming loans		54,268			26,421			14,782
REO		3,427			4,012			4,369

Total nonperforming assets (NPA)	$	57,695		$	30,433		$	19,151

NPA to total assets		0.49	%		0.27	%		0.21	%
Loan delinquency ratio (60 days and over)		0.53	%		0.33	%		0.25	%
Classified assets	$	215,582		$	95,041		$	45,979
Classified assets/total assets		1.84	%		0.83	%		0.52	%

DEPOSITS DETAIL:
Interest-bearing transaction accounts	$	465,835		$	490,695		$	407,383
Noninterest-bearing transaction accounts		913,932			918,393			724,454
Savings and money market demand accounts		2,136,253			2,132,732			1,612,207
Time deposits		4,250,372			4,078,542			3,209,723

Total deposits	$	7,766,392		$	7,620,362		$	5,953,767


Number of transaction accounts (whole numbers):
Interest-bearing transaction accounts		47,865			48,558			41,812
Noninterest-bearing transaction accounts		147,768			144,878			118,309

Total transaction accounts		195,633			193,436			160,121

Sterling Financial Corporation
AVERAGE BALANCE, YIELDS AND RATES PAID


	Three Months Ended
	September 30, 2007							June 30, 2007							September 30, 2006
	Average				Average			Average				Average			Average				Average
(in thousands, unaudited)	Balance		Amount		Rate			Balance		Amount		Rate			Balance		Amount		Rate
ASSETS:
Loans:
Mortgage	$	5,133,534	$	105,455		8.15	%	$	4,959,970	$	99,925		8.08	%	$	3,555,542	$	73,659		8.22	%
Commercial and consumer		3,708,768		73,811		7.90	%		3,692,248		73,028		7.93	%		2,665,550		51,986		7.74	%

Total loans		8,842,302		179,266		8.04	%		8,652,218		172,953		8.02	%		6,221,092		125,645		8.01	%
MBS		1,584,178		18,882		4.73	%		1,634,759		19,356		4.75	%		1,825,084		21,626		4.70	%
Investments and cash		271,197		2,613		3.82	%		267,455		2,485		3.73	%		340,954		1,482		1.72	%

Total interest-earning assets		10,697,677		200,761		7.45	%		10,554,432		194,794		7.40	%		8,387,130		148,753		7.04	%

Noninterest-earning assets		898,801							908,943							255,322

Total average assets	$	11,596,478						$	11,463,375						$	8,642,452


LIABILITIES and EQUITY:
Deposits:
Transaction	$	1,396,067		577		0.16	%	$	1,379,952		780		0.23	%	$	1,108,313		438		0.16	%
Savings		2,140,219		18,968		3.52	%		2,088,620		18,247		3.50	%		1,557,175		13,085		3.33	%
Time deposits		4,088,063		51,944		5.04	%		4,061,162		51,639		5.10	%		3,215,319		38,130		4.70	%

Total deposits		7,624,349		71,489		3.72	%		7,529,734		70,666		3.76	%		5,880,807		51,653		3.48	%
Borrowings		2,640,580		34,765		5.22	%		2,623,002		34,355		5.25	%		2,111,071		26,522		4.98	%

Total interest-bearing liabilities		10,264,929		106,254		4.11	%		10,152,736		105,021		4.15	%		7,991,878		78,175		3.88	%

Noninterest-bearing liabilities		195,663							183,529							76,789

Total average liabilities		10,460,592							10,336,265							8,068,667
Total average shareholders’ equity		1,135,886							1,127,110							573,785

Total average liabilities and equity	$	11,596,478						$	11,463,375						$	8,642,452


Tax equivalent net interest income and spread			$	94,507		3.34	%			$	89,773		3.25	%			$	70,578		3.16	%


Tax equivalent net interest margin						3.50	%						3.41	%						3.34	%

Sterling Financial Corporation
EXHIBIT A- RECONCILIATION SCHEDULE


	Three Months Ended									Nine Months Ended
	Sept 30,			June 30,			Sept 30,			Sept 30,			Sept 30,
(in thousands, unaudited)	2007			2007			2006			2007			2006
CORE EARNINGS: ⁽¹⁾
Net income as reported	$	26,530		$	26,981		$	19,339		$	76,432		$	51,686
Add back: merger and acquisition costs, net of tax		165			260			120			1,186			120
Add back: other nonrecurring costs, net of tax		0			458			128			458			128

Core earnings	$	26,695		$	27,699		$	19,587		$	78,076		$	51,934


CORE EARNINGS PER SHARE - BASIC: ⁽¹⁾
Earnings per share — basic, as reported	$	0.52		$	0.53		$	0.52		$	1.55		$	1.45
Add back: merger and acquisition costs, net of tax		0.00			0.00			0.00			0.03			0.00
Add back: other nonrecurring costs, net of tax		0.00			0.01			0.01			0.01			0.01

Core earnings per share — basic	$	0.52		$	0.54		$	0.53		$	1.59		$	1.46


CORE EARNINGS PER SHARE - DILUTED: ⁽¹⁾
Earnings per share — diluted, as reported	$	0.51		$	0.52		$	0.52		$	1.54		$	1.44
Add back: merger and acquisition costs, net of tax		0.01			0.01			0.00			0.02			0.00
Add back: other nonrecurring costs, net of tax		0.00			0.01			0.01			0.01			0.00

Core earnings per share — diluted	$	0.52		$	0.54		$	0.53		$	1.57		$	1.44


RETURN ON AVERAGE ASSETS, CORE: ⁽¹⁾
Return on average assets, as reported		0.91	%		0.94	%		0.89	%		0.93	%		0.85	%
Add back: merger and acquisition costs, net of tax		0.00	%		0.01	%		0.00	%		0.01	%		0.00	%
Add back: other nonrecurring costs, net of tax		0.00	%		0.02	%		0.01	%		0.01	%		0.00	%

Return on average assets, core		0.91	%		0.97	%		0.90	%		0.95	%		0.85	%


RETURN ON AVERAGE SHAREHOLDERS’ EQUITY, CORE: ⁽¹⁾
Return on average shareholders’ equity, as reported		9.3	%		9.6	%		13.4	%		9.7	%		12.9	%
Add back: merger and acquisition costs, net of tax		0.0	%		0.1	%		0.0	%		0.2	%		0.0	%
Add back: other nonrecurring costs, net of tax		0.0	%		0.2	%		0.1	%		0.0	%		0.1	%

Return on average shareholders’ equity, core		9.3	%		9.9	%		13.5	%		9.9	%		13.0	%


OPERATING EFFICIENCY RATIO, CORE: ⁽¹⁾
Operating efficiency ratio, as reported		62.9	%		61.4	%		62.5	%		62.4	%		61.9	%
Subtract: merger and acquisition costs		(0.2	%)		(0.4	%)		(0.2	%)		(0.6	%)		(0.1	%)
Subtract: other nonrecurring costs		0.0	%		(0.6	%)		(0.2	%)		(0.2	%)		(0.1	%)

Operating efficiency ratio, core		62.7	%		60.4	%		62.1	%		61.6	%		61.7	%


(1)		Core earnings per share excludes net securities gains (losses), merger and acquisition costs, and other nonrecurring costs, net of related income taxes. Core earnings is a non-GAAP financial measure. Management believes that this presentation of non-GAAP information regarding core earnings provides useful information to investors regarding the registrant’s financial condition and results of operations as core earnings are widely used for comparison purposes in the financial services industry.