8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 31, 2007

STERLING FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Washington	0-20800	91-1572822
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

111 North Wall Street, Spokane, Washington 99201
(Address of principal executive offices) (Zip Code)

(509) 458-3711
(Registrant’s telephone number, including area code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN THE REPORT

Item 7.01. Regulation FD Disclosure.

     Sterling Financial Corporation (“Sterling”) today announced that it now intends to close its proposed merger with North Valley Bancorp in the fourth quarter of 2007, pending regulatory approval, which is not expected to be completed as of the originally anticipated closing date in the third quarter of 2007.

     Sterling is filing a slide presentation that it intends to present to investors at meetings to be held commencing on September 6, 2007. The slides are included as Exhibit 99.1 to this report.

     The information in this report (including Exhibit 99.1) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

     (c) The following exhibit is being furnished herewith:

Exhibit No.	Exhibit Description
99.1	Sterling Financial Corporation slide presentation.

S I G N A T U R E

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	STERLING FINANCIAL CORPORATION
		(Registrant)
August 31, 2007	By:	/s/ Daniel G. Byrne
Date		Daniel G. Byrne
		Executive Vice President, Assistant Secretary, and Principal Financial Officer

EX-99.1

Exhibit 99.1

Sterling and Subsidiaries Portfolio Report 6/30/07

Sterling Savings Bank Portfolio Asset Mix 3/31/07 6/30/07 $11,152MM $11,189MM 8% 8% 19% 18% 73% 74% Loans Receivable Investments Other

Sterling financial Corporation Loan Originations June 30, 2007 (dollars in millions) $4,971 $5,000 517 $3,882 $4,000 444 $2,918 2,335 $2,984 $3,000 299 $2,274 388 1,802 $2,113 285 1,026 1,270 $2,000 253 708 1,154 1,026 899 819 598 $1,000 591 134 186 285 276 612 831 800 504 400 461 150 $0 2003 2004 2005 2006 Jun-06 Jun-07 6 months 6 months Residential Income Property Commercial Construction Consumer

Sterling Savings Bank Loan Portfolio Growth Outstanding Balances +21% $8,000 +41% +9% $7,000 +46% Millions $6,000 +20% $5,000 +13% $4,000 $3,000 $2,000 $1,000 $0 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Jun-07 Residential Construction Income Property Consumer Commercial Loans

Total Sterling Financial Corporation Loan Portfolio Mix 100% Commercial Loans 31% 31% 29% 30% 31% 30% 30% 31% 40% 32% 80% Single Family 7% 9% Residential 10% 10% 9% 7% 8% 19% Mortgages & 60% 14% Retail 15% 15% 15% 13% 13% Consumer % 15% 16 20% Loans 14% 15% Income 19% 19% Property 40% 17% 15% 19% Permanent 21% 23% Loans 20% 21% 20% 33% 32% 30% 30% 20% Construction 24% 26% Loans 21% 20% 19% 15% 0%

Sterling Savings Bank Average Loan Size by Category As of June 30, 2007 $1,200,000 $1,052M $1,000,000 $800,000 $600,000 $454M $400,000 $309M $180M $200,000 $19M $0 Income Commercial Residential Construction Consumer Property Number of Loans* 2,398 8,306 3,320 3,596 55,647 *Includes Sonoma Bank loans

Sterling Savings Bank Portfolio Risk Rating Diversification June 30, 2007 Based on Total Commitments 80.00% 75.5% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 15.0% 10.00% 5.0% 2.8% 0.2% 0.2% 1.3% 0.0% 0.0% 0.00% 1 2 3 4 5 6 7 8 9 Solid Columns = 6/30/07; Striped columns = 3/31/07

Sterling Savings Bank Total Portfolio 30 and 60+ Day Delinquency Trend 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% .41% 0.40% 0.20% 0.00% .33% 30 Day 60+ Day Jun — 01 Sep — 01 Mar — 02 03 04 05 06 Dec

FDIC Peer Group Comparison Non-Current Loans To Loans (2006 4th Quarter Data VS 2007 1st Quarter Data) 0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% 4th Qtr 2006 1st Qtr 2007* San Francisco Region Commercial Banks Averages Sterling Savings Bank Golf Savings Bank North Valley Bank *1st Quarter 2007 includes Sonoma Bank acquisition.

Percent of Classified Assets in Total Portfolio- 7 yr. Trend 2.10% 1.90% June 2007 1.70% Sterling         .85% 1.50% 1.30% 1.10% 0.90% 0.70% 0.50% 0.30% 0.10% Sterling Savings Bank Linear (Sterling Savings Bank) MAR — 00 JUN — 00 SEP — 00 DEC — 00 02 03 04 05 06 07

Sterling Savings Bank Non-Accrual Trend 2000-2007 1.20% Empire Bank Acquired 2nd Qtr 2007 2/28/03 1.00% .39% 0.80% Klamath 1st Source Capital Acquired 1/2/04 Acquired 9/28/01 Sonoma Bank Acquired 2/28/07 0.60% Golf Acquired 7/5/06 First Bank Northwest Acquired 0.40% 11/30/06 0.20% 0.00% Dec — 00 Mar — 01 Jun — 01 Sep — 01 Dec — 01 02 03 04 05 06 07

Sterling Savings Bank Portfolio Loss Trend 5-Qtr & 12-Qtr Averages 0.25% 0.20% 0.15% 0.10% .10% June 2007 0.05% .04% 0.00% 5-Qtr Average 12-Qtr Average MAR — 00 JUN — 00 SEP — 00 DEC — 00 01 02 03 04 05 06 07

Action Mortgage Construction Portfolio Geographic Distribution 6/30/07 $2,411MM Puget 3% Sound 2% 8% Portland Boise 8% 42% Other 10% California Bend 27% Spokane

Action Mortgage Construction Loan Commitments & Concentrations 2001 — 2007 $2,600 6% $2,400 8% 15% $2,200 $2,000 5% Millions 23% 8% $1,800 24% 9% $1,600 9% $1,400 8% $1,200 20% 23% $1,000 22% $800 $600 30% $400 29% 33% 32% 30% $200 34% 50% 48% 48% 41% $0 2001 2002 2003 2004 2005 2006 1st Qtr 2nd Qtr 2007 2007 Spec A&D Presold Custom Lot Multi-Fam Collateral Pool Townhome Condo

Action Mortgage Construction Percent of Commitments Outstanding by Quarter 70% June 2007, 62% 60% 50% Qtr 1 Qtr 2 Qtr 3 Qtr 4 2007 2006 2005 1998 1997

Action Mortgage Construction Loan to value Percentages by Dollar as of June 30, 2007 $2,522MM 10% 15% 21% 54% <65 66-75% 76-80% 81% $370MM $532MM $1,380MM $240MM

P o r t l a nd /V a 100 n 0 200 300 400 c o u v er Pu Action Dec g Average et ‘06 So u nd S po k a Number n e of Mar B Mortgage oi se ‘07 Days Be nd on C a li fo r n the i June a ‘07 O t he r Books Construction

Residential Average Sales Price 2006-2007 $450,000 $400,000 $350,000 $300,000 335K 351K 334K $ $ $250,000 $ $200,000 247K $ $150,000 209K $ $100,000 Boise Portland Puget Spokane Bend Metro Sound 3rd Qtr 2006 4th Qtr 2006 1st Qtr 2007 2nd Qtr 2007 Source: RMLS-Portland Metro, NW Multiple-Puget Sound, Intermountain Multiple Listing-Boise, MLS-Spokane, Central Oregon MLS-Bend

Residential Active Listings 2006-2007 50,000 45.2K 45,000 40,000 35,000 30,000 25,000 18.1K 20,000 15,000 7.6K 10,000 2.9K 5,000 0 Boise Portland Puget Sound Spokane 3rd Qtr 2006 4th Qtr 2006 1st Qtr 2007 2nd Qtr 2007 Source: RMLS-Portland Metro, NW Multiple-Puget Sound, Intermountain Multiple Listing-Boise, MLS-Spokane

Number of Homes Sold YTD 2Q 2006-2Q 2007 60,000 50,000 43.5K 40,000 30,000 18.2K 20,000 10,000 5.7K 3.4K 0 Boise Portland Puget Sound Spokane 2nd Qtr 2006 2nd Qtr 2007 Source: RMLS-Portland Metro, NW Multiple-Puget Sound, Intermountain Multiple Listing-Boise, MLS-Spokane

Sterling Savings Bank Commercial Real Estate Loan to Value as of June 30, 2007 $2,103MM 2.7% 0.9% 2.5% 0.0% 3.4% 14.3% 17.4% 12.0% 24.2% 22.6% No data available >85% 81-84% 70-80% 60-69% 50-59% <50% SSB FBNW KF Sonoma $300MM $72MM $508MM $475MM $252MM $367MM

Sterling Savings Bank Consumer Real Estate Loan to Value as of June 30, 2007 $624MM 5.7% 0.5% 0.5% 4.6% 11.1% 10.9% 9.1% 57.6% >85% $3MM 81-84% $3MM 70-80% $69MM 60-69%$68MM 50-59% $57MM <50% $359MM Other $28MM Secured by Blind DOT $34MM

Sterling Savings Bank Indirect Dealer Banking FICO Scores As of March 31, 2007 1% 4% 8% 12% 52% 23% No Score <629 630-669 670-699 700-739 740+

INTERVEST- Mortgage Investment Company Geographic Concentrations 6/30/07 $2,071MM 3% 3% 1% 1% 6% 1% 8% 32% 19% 26% Washington California Oregon Arizona Idaho Nevada Montana Alaska Colorado Utah

INTERVEST- Mortgage Investment Company construction Loan To Value as of June 30, 2007 $1,548mM 3.0% 13.4% 10.8% 16.9% 35.8% 20.1% >80% 76-79% 71-75% 66-70% 60-65% <59% $46MM $167MM $555MM $311MM $262MM $208MM Source: INTERVEST’S All Loans-Contact-Property-Data List Report

INTERVEST- Mortgage Investment Company Permanent Loan To Value as of June 30, 2007 $523,056M 5.1% 23.8% 0.0% 36.8% 17.8% 16.4% >80% 76-79% 71-75% 66-70% 60-65% <59% $-0-MM $27MM $193MM $86MM $93MM $125MM