exv99w2

Exhibit 99.2

Sterling Financial Corporation
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts, unaudited)


	June 30,			Mar 31,			June 30,
	2008			2008			2007
ASSETS:
Cash and cash equivalents	$	181,841		$	181,333		$	192,401
Investments and mortgage-backed securities (“MBS”) available for sale		2,023,306			2,143,950			1,596,441
Investments held to maturity		180,185			172,874			108,430
Loans receivable, net		9,219,919			9,119,942			8,507,423
Loans held for sale (at fair value: $79,634 as of June 30, 2008; $67,048 as of March 31, 2008)		82,413			110,481			84,613
Real estate owned, net		22,998			13,027			4,012
Office properties and equipment, net		90,750			92,218			96,361
Bank owned life insurance (“BOLI”)		154,714			152,794			147,354
Goodwill, net		451,323			451,249			456,315
Other intangible assets, net		29,175			30,401			34,078
Prepaid expenses and other assets, net		263,086			222,884			236,219

Total assets	$	12,699,710		$	12,691,153		$	11,463,647


LIABILITIES:
Deposits	$	7,987,831		$	7,840,784		$	7,620,362
Advances from Federal Home Loan Bank		1,881,973			1,915,789			1,594,844
Repurchase agreements and fed funds		1,245,569			1,333,505			744,903
Other borrowings		248,274			248,273			250,074
Accrued expenses and other liabilities		157,879			161,416			131,293

Total liabilities		11,521,526			11,499,767			10,341,476


SHAREHOLDERS’ EQUITY:
Common stock		52,009			51,863			51,330
Additional paid-in capital		896,469			894,679			889,890
Accumulated comprehensive loss:
Unrealized loss on investments and MBS ⁽¹⁾		(32,215	)		(10,591	)		(44,974	)
Retained earnings		261,921			255,435			225,925

Total shareholders’ equity		1,178,184			1,191,386			1,122,171

Total liabilities and shareholders’ equity	$	12,699,710		$	12,691,153		$	11,463,647


Book value per share	$	22.65		$	22.97		$	21.86
Tangible book value per share ⁽²⁾	$	13.41		$	13.68		$	12.31
Shares outstanding at end of period		52,008,761			51,863,067			51,329,826
Shareholders’ equity to total assets		9.28	%		9.39	%		9.79	%
Tangible shareholders’ equity to tangible assets ⁽³⁾		5.71	%		5.81	%		5.76	%


(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
(in thousands, except per share amounts, unaudited)


	Three Months Ended									Six Months Ended
	June 30,			Mar 31,			June 30,			June 30,			June 30,
	2008			2008			2007			2008			2007
INTEREST INCOME:
Loans	$	152,271		$	162,120		$	172,825		$	314,391		$	325,588
Mortgage-backed securities		25,586			24,499			19,356			50,085			39,824
Investments and cash		2,785			2,364			1,880			5,149			3,551

Total interest income		180,642			188,983			194,061			369,625			368,963


INTEREST EXPENSE:
Deposits		57,438			62,870			70,666			120,308			134,386
Borrowings		29,085			34,026			34,355			63,111			64,921

Total interest expense		86,523			96,896			105,021			183,419			199,307


Net interest income		94,119			92,087			89,040			186,206			169,656
Provision for credit losses		(30,987	)		(37,143	)		(3,975	)		(68,130	)		(8,200	)

Net interest income after provision		63,132			54,944			85,065			118,076			161,456


NONINTEREST INCOME:
Fees and service charges		16,012			14,151			13,694			30,163			25,886
Mortgage banking operations		8,227			6,198			9,807			14,425			18,665
Loan servicing fees		697			(148	)		410			549			1,093
Real estate owned operations		(238	)		(106	)		(93	)		(344	)		(138	)
BOLI		1,747			1,466			1,717			3,213			3,264
Other		(947	)		(399	)		(757	)		(1,346	)		(544	)

Total noninterest income		25,498			21,162			24,778			46,660			48,226


NONINTEREST EXPENSES:
Employee compensation and benefits		41,133			40,890			39,162			82,023			77,234
Occupancy and equipment		10,693			11,532			11,681			22,225			22,148
Amortization of core deposit intangibles		1,226			1,226			1,226			2,452			2,267
Other		19,395			18,459			17,822			37,854			33,911

Total noninterest expenses		72,447			72,107			69,891			144,554			135,560


Income before income taxes		16,183			3,999			39,952			20,182			74,122
Income tax provision		(4,508	)		(1,123	)		(12,971	)		(5,631	)		(24,220	)

Net Income	$	11,675		$	2,876		$	26,981		$	14,551		$	49,902


Earnings per share — basic	$	0.23		$	0.06		$	0.53		$	0.28		$	1.03
Earnings per share — diluted	$	0.23		$	0.06		$	0.52		$	0.28		$	1.02

Core earnings ⁽¹⁾	$	11,806		$	2,582		$	27,699		$	14,388		$	51,381
Core earnings per share — basic ⁽¹⁾	$	0.23		$	0.05		$	0.54		$	0.28		$	1.07
Core earnings per share — diluted ⁽¹⁾	$	0.23		$	0.05		$	0.54		$	0.28		$	1.05

Weighted average shares outstanding — basic		51,687,600			51,526,332			51,189,438			51,606,966			48,230,619
Weighted average shares outstanding — diluted		51,883,549			51,786,038			51,699,098			51,837,108			48,776,780


(1)		See Exhibit A.

Sterling Financial Corporation
OTHER SELECTED FINANCIAL DATA
(in thousands, unaudited)


	Three Months Ended									Six Months Ended
	June 30,			Mar 31,			June 30,			June 30,			June 30,
	2008			2008			2007			2008			2007
LOAN ORIGINATIONS:
Residential real estate	$	376,122		$	411,116		$	454,921		$	787,238		$	799,539
Multifamily real estate		70,516			41,386			4,650			111,902			4,650
Commercial real estate		118,400			64,517			1,200			182,917			12,410
Construction		158,164			264,281			735,552			422,445			1,270,372
Consumer — direct		124,032			81,603			113,321			205,635			176,889
Consumer — indirect		43,742			71,681			57,013			115,423			121,925
Commercial banking		169,836			148,685			339,077			318,521			598,279

Total loan origination volume	$	1,060,812		$	1,083,269		$	1,705,734		$	2,144,081		$	2,984,064


PERFORMANCE RATIOS:
Return on average assets		0.37	%		0.09	%		0.94	%		0.23	%		0.93	%
Return on average assets, core ⁽¹⁾		0.37	%		0.08	%		0.97	%		0.23	%		0.96	%
Return on average shareholders’ equity		3.9	%		1.0	%		9.6	%		2.4	%		9.9	%
Return on average shareholders’ equity, core ⁽¹⁾		4.0	%		0.9	%		9.9	%		2.4	%		10.2	%
Return on average tangible equity ⁽²⁾		6.5	%		1.6	%		16.9	%		4.1	%		16.9	%
Operating efficiency		60.6	%		63.7	%		61.4	%		62.1	%		62.2	%
Operating efficiency, core ⁽¹⁾		60.4	%		63.9	%		60.4	%		62.1	%		61.2	%
Non interest expense to average assets (annualized)		2.29	%		2.33	%		2.45	%		2.31	%		2.54	%
Average assets	$	12,712,109		$	12,444,665		$	11,463,375		$	12,562,278		$	10,782,522
Average shareholders’ equity	$	1,199,990		$	1,192,461		$	1,127,110		$	1,196,225		$	1,014,673
Average tangible equity ⁽²⁾	$	718,864		$	709,139		$	638,591		$	714,001		$	596,729

REGULATORY CAPITAL RATIOS:
Sterling Financial Corporation:
Tier 1 leverage (to average assets)		8.3	%		8.1	%		8.3	%		8.3	%		8.3	%
Tier 1 (to risk-weighted assets)		9.6	%		9.7	%		9.7	%		9.6	%		9.7	%
Total (to risk-weighted assets)		10.9	%		11.0	%		10.8	%		10.9	%		10.8	%
Sterling Savings Bank:
Tier 1 leverage (to average assets)		8.0	%		8.1	%		8.5	%		8.0	%		8.5	%
Tier 1 (to risk-weighted assets)		9.5	%		9.6	%		9.8	%		9.5	%		9.8	%
Total (to risk-weighted assets)		10.8	%		10.9	%		10.9	%		10.8	%		10.9	%

OTHER:
Sales of financial products	$	49,701		$	49,725		$	28,798		$	99,426		$	70,494
FTE employees at end of period (whole numbers)		2,545			2,557			2,612			2,545			2,612


(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
(in thousands, unaudited)


	June 30,			Mar 31,			June 30,
	2008			2008			2007
LOANS BY COLLATERAL TYPE:
Residential real estate	$	798,408		$	761,887		$	676,761
Multifamily real estate		445,298			407,673			234,349
Commercial real estate		1,321,895			1,247,472			1,374,218
Construction		2,911,847			3,012,754			2,657,972
Consumer — direct		842,713			800,048			765,217
Consumer — indirect		398,219			402,520			337,491
Commercial banking		2,677,479			2,647,969			2,579,134
Deferred loan fees, net		(13,572	)		(15,372	)		(18,085	)
Allowance for losses on loans		(162,368	)		(145,009	)		(99,634	)

Net loans receivable	$	9,219,919		$	9,119,942		$	8,507,423


ALLOWANCE FOR CREDIT LOSSES:
Allowance — loans, beginning of quarter	$	145,009		$	111,026		$	93,837
Acquired		0			0			2,494
Provision		30,987			37,143			3,975
Charge offs, net of recoveries		(13,605	)		(3,222	)		(671	)
Transfers		(23	)		62			(1	)

Allowance — loans, end of quarter		162,368			145,009			99,634

Allowance — unfunded commitments, beginning of quarter		6,265			6,306			6,046
Provision		32			21			0
Transfers		24			(62	)		1

Allowance — unfunded commitments, end of quarter		6,321			6,265			6,047

Total credit allowance	$	168,689		$	151,274		$	105,681


Net charge-offs to average net loans (annualized)		0.58	%		0.14	%		0.03	%
Net charge-offs to average net loans (ytd)		0.18	%		0.03	%		0.02	%
Loan loss allowance to total loans		1.73	%		1.57	%		1.16	%
Total credit allowance to total loans		1.80	%		1.63	%		1.23	%
Loan loss allowance to nonperforming loans		57.9	%		69.0	%		339.3	%
Total allowance to nonperforming loans		60.2	%		72.0	%		359.9	%
Net nonperforming loans to loans		2.56	%		2.06	%		0.31	%
Nonperforming loans to loans		2.99	%		2.27	%		0.34	%

NONPERFORMING ASSETS:
Past 90 days due	$	0		$	0		$	803
Nonaccrual loans		280,260			209,850			28,565
Restructured loans		149			207			0

Total nonperforming loans		280,409			210,057			29,368
REO		22,998			13,027			4,012

Total nonperforming assets (NPA)		303,407			223,084			33,380
Specific reserve on nonperforming loans		(40,597	)		(19,084	)		(2,947	)

Net nonperforming assets	$	262,810		$	204,000		$	30,433

Net NPA to total assets		2.07	%		1.61	%		0.27	%
NPA to total assets		2.39	%		1.76	%		0.29	%
Loan delinquency ratio (60 days and over)		3.07	%		2.38	%		0.33	%
Classified assets	$	497,461		$	402,793		$	95,041
Classified assets/total assets		3.92	%		3.17	%		0.83	%

DEPOSITS DETAIL:
Interest-bearing transaction accounts	$	444,888		$	462,768		$	490,695
Noninterest-bearing transaction accounts		896,671			887,129			918,393
Savings and money market demand accounts		2,178,826			2,226,090			2,132,732
Time deposits		4,467,446			4,264,797			4,078,542

Total deposits	$	7,987,831		$	7,840,784		$	7,620,362


Number of transaction accounts (whole numbers):
Interest-bearing transaction accounts		46,511			47,140			48,558
Noninterest-bearing transaction accounts		152,138			150,210			144,878

Total transaction accounts		198,649			197,350			193,436

Sterling Financial Corporation
AVERAGE BALANCE, YIELDS AND RATES PAID
(in thousands, unaudited)


	Three Months Ended
	June 30, 2008							March 31, 2008							June 30, 2007
	Average				Average			Average				Average			Average				Average
	Balance		Amount		Rate			Balance		Amount		Rate			Balance		Amount		Rate
ASSETS:
Loans:
Mortgage	$	5,560,327	$	89,495		6.47	%	$	5,436,297	$	95,381		7.06	%	$	4,959,970	$	99,925		8.08	%
Commercial and consumer		3,870,181		62,910		6.54	%		3,833,230		66,881		7.02	%		3,692,248		73,028		7.93	%

Total loans		9,430,508		152,405		6.50	%		9,269,527		162,262		7.04	%		8,652,218		172,953		8.02	%
MBS		2,064,073		25,586		4.99	%		1,976,815		24,499		4.98	%		1,634,759		19,356		4.75	%
Investments and cash		362,678		3,700		4.10	%		306,443		3,193		4.19	%		267,455		2,485		3.73	%

Total interest-earning assets		11,857,259		181,691		6.16	%		11,552,785		189,954		6.61	%		10,554,432		194,794		7.40	%

Noninterest-earning assets		854,850							891,880							908,943

Total average assets	$	12,712,109						$	12,444,665						$	11,463,375


LIABILITIES and EQUITY:
Deposits:
Transaction	$	1,308,412		342		0.11	%	$	1,304,317		419		0.13	%	$	1,379,952		780		0.23	%
Savings		2,227,429		11,216		2.03	%		2,236,228		13,780		2.48	%		2,088,620		18,247		3.50	%
Time deposits		4,447,706		45,880		4.15	%		4,169,033		48,672		4.70	%		4,061,162		51,639		5.10	%

Total deposits		7,983,547		57,438		2.89	%		7,709,578		62,871		3.28	%		7,529,734		70,666		3.76	%
Borrowings		3,373,550		29,085		3.47	%		3,357,477		34,026		4.08	%		2,623,002		34,355		5.25	%

Total interest-bearing liabilities		11,357,097		86,523		3.06	%		11,067,055		96,897		3.52	%		10,152,736		105,021		4.15	%

Noninterest-bearing liabilities		155,022							185,149							183,529

Total average liabilities		11,512,119							11,252,204							10,336,265
Total average shareholders’ equity		1,199,990							1,192,461							1,127,110

Total average liabilities and equity	$	12,712,109						$	12,444,665						$	11,463,375


Tax equivalent net interest income and spread			$	95,168		3.10	%			$	93,057		3.09	%			$	89,773		3.25	%


Tax equivalent net interest margin						3.23	%						3.24	%						3.41	%

Sterling Financial Corporation
EXHIBIT A- RECONCILIATION SCHEDULE
(in thousands, unaudited)


	Three Months Ended									Six Months Ended
	June 30,			Mar 31,			June 30,			June 30,			June 30,
	2008			2008			2007			2008			2007
CORE EARNINGS: ⁽¹⁾
Net income as reported	$	11,675		$	2,876		$	26,981		$	14,551		$	49,902
Add back: merger and acquisition costs, net of tax		131			0			260			131			1,021
Add back: other nonrecurring items, net of tax		0			(294	)		458			(294	)		458

Core earnings	$	11,806		$	2,582		$	27,699		$	14,388		$	51,381


CORE EARNINGS PER SHARE — BASIC: ⁽¹⁾
Earnings per share — basic, as reported	$	0.23		$	0.06		$	0.53		$	0.28		$	1.03
Add back: merger and acquisition costs, net of tax		0.00			0.00			0.00			0.00			0.02
Add back: other nonrecurring items, net of tax		0.00			(0.01	)		0.01			0.00			0.01

Core earnings per share — basic	$	0.23		$	0.05		$	0.54		$	0.28		$	1.07


CORE EARNINGS PER SHARE — DILUTED: ⁽¹⁾
Earnings per share — diluted, as reported	$	0.23		$	0.06		$	0.52		$	0.28		$	1.02
Add back: merger and acquisition costs, net of tax		0.00			0.00			0.01			0.00			0.02
Add back: other nonrecurring items, net of tax		0.00			(0.01	)		0.01			0.00			0.01

Core earnings per share — diluted	$	0.23		$	0.05		$	0.54		$	0.28		$	1.05


RETURN ON AVERAGE ASSETS, CORE: ⁽¹⁾
Return on average assets, as reported		0.37	%		0.09	%		0.94	%		0.23	%		0.93	%
Add back: merger and acquisition costs, net of tax		0.00	%		0.00	%		0.01	%		0.00	%		0.02	%
Add back: other nonrecurring items, net of tax		0.00	%		(0.01	%)		0.02	%		0.00	%		0.01	%

Return on average assets, core		0.37	%		0.08	%		0.97	%		0.23	%		0.96	%


RETURN ON AVERAGE SHAREHOLDERS’ EQUITY, CORE:⁽¹⁾
Return on average shareholders’ equity, as reported		3.9	%		1.0	%		9.6	%		2.4	%		9.9	%
Add back: merger and acquisition costs, net of tax		0.1	%		0.0	%		0.1	%		0.0	%		0.3	%
Add back: other nonrecurring items, net of tax		0.0	%		(0.1	%)		0.2	%		0.0	%		0.0	%

Return on average shareholders’ equity, core		4.0	%		0.9	%		9.9	%		2.4	%		10.2	%


OPERATING EFFICIENCY RATIO, CORE: ⁽¹⁾
Operating efficiency ratio, as reported		60.6	%		63.7	%		61.4	%		62.1	%		62.2	%
Subtract: merger and acquisition costs		(0.2	%)		0.0	%		(0.4	%)		0.0	%		(0.7	%)
Subtract: other nonrecurring items		0.0	%		0.2	%		(0.6	%)		0.0	%		(0.3	%)

Operating efficiency ratio, core		60.4	%		63.9	%		60.4	%		62.1	%		61.2	%


(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.