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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>As filed with the Securities and Exchange Commission on July&nbsp;24, 2006.</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><B>Registration No.&nbsp;333-</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM S-8</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 0pt"><B>REGISTRATION STATEMENT<BR>
UNDER THE SECURITIES ACT OF 1933</B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>STERLING FINANCIAL CORPORATION</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">WASHINGTON<BR>
(State or other jurisdiction of<BR>
incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">91-1572822<BR>
(I.R.S. Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>111 North Wall Street<BR>
Spokane, Washington 99201</B><BR>
(Address of Principal Executive Offices) (Zip Code)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Lynnwood Financial Group Qualified and Nonqualified Stock Option Plan</B><BR>
(Full title of the plan)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Andrew J. Schultheis, Secretary<BR>
Sterling Financial Corporation<BR>
111 North Wall Street<BR>
Spokane, Washington 99201<BR>
(509)&nbsp;227-5389</B><BR>
(Name, address and telephone number, including area code, of agent for service)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Copies to:</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Andrew J. Schultheis, Esq.<BR>
Richard A. Repp, Esq.<BR>
Witherspoon, Kelley, Davenport<BR>
&#038; Toole, P.S.<BR>
West 422 Riverside Avenue, Suite&nbsp;1100<BR>
Spokane, Washington 99201<BR>
(509)&nbsp;624-5265</B></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>CALCULATION OF REGISTRATION FEE</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="left">Title of each class of</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Amount to be</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Proposed maximum</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Proposed maximum</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Amount of</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="left">securities to be registered</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">registered (1)</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">offering price per share (2)</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">aggregate offering price (2)</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">registration fee (2)</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

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    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
                    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Common Stock, par value
$1.00 per share</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 2px solid #000000">77,528</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 2px solid #000000">$8.19</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 2px solid #000000">$634,954.32</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 2px solid #000000">$67.95</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

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</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 3pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Consists of common shares (the &#147;Common Stock&#148;) of Sterling Financial Corporation, a
Washington corporation (&#147;Sterling&#148; or &#147;Registrant&#148;) to be issued upon exercise of currently
outstanding stock options (the &#147;Options&#148;) granted under the Lynnwood Financial Group Qualified
and Nonqualified Stock Option Plan (the &#147;Lynnwood Plan&#148;). The Lynnwood Plan was assumed by
Sterling pursuant to the Agreement and Plan of Merger (the &#147;Merger Agreement&#148;) dated as of
February&nbsp;12, 2006 by and between Sterling and Lynnwood Financial Group, Inc., a Washington
corporation (&#147;Lynnwood&#148;). Pursuant to Rule 416(a) of the Securities Act of 1933, as amended
(the &#147;Securities Act&#148;), this registration statement also covers any additional securities that
may be offered or issued as a result of a stock split, stock dividend or similar adjustment to
the outstanding Common Stock.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Estimated pursuant to Rule 457(c) and (h)&nbsp;based upon the estimated weighted average exercise
price per share.</TD>
</TR>

</TABLE>



<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>







<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
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	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">PART I</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">PART II</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">Item&nbsp;3. Incorporation of Documents by Reference</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003">Item&nbsp;4. Description of Securities</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004">Item&nbsp;5. Interests of Named Experts and Counsel</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005">Item&nbsp;6. Indemnification of Directors and Officers</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">Item&nbsp;7. Exemption From Registration Claimed</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007">Item&nbsp;8. Exhibits</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#008">Item&nbsp;9. Undertakings</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">EXHIBIT INDEX</A></TD></TR>
<TR><TD colspan="9"><A HREF="v22279orexv5w1.txt">EXHIBIT 5.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="v22279orexv23w1.txt">EXHIBIT 23.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="v22279orexv99w1.txt">EXHIBIT 99.1</A></TD></TR>
</TABLE>
</CENTER>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>






<!-- link1 "PART I" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART I</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The documents containing the information specified in Part&nbsp;I of this Form S-8 will be sent or
given to participants in the Lynnwood Plan, as specified by Rule&nbsp;428(b)(1) promulgated by the
Securities and Exchange Commission (the &#147;Commission&#148;) under the Securities Act of 1933, as amended
(the &#147;Securities Act&#148;). In accordance with Rule&nbsp;428 and the requirements of Part&nbsp;I of Form S-8,
such document(s) are not being filed with the Commission, either as part of this registration
statement or as prospectuses or prospectus supplements pursuant to Rule&nbsp;424 under the Securities
Act, but constitute (along with the documents incorporated by reference into the Registration
Statement pursuant to Item&nbsp;3 of Part&nbsp;II hereof) a prospectus that meets the requirements of Section
10(a) of the Securities Act.
</DIV>


<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<!-- link1 "PART II" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>

</DIV>
<!-- link2 "Item&nbsp;3. Incorporation of Documents by Reference" -->
<DIV align="left"><A NAME="002"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Item&nbsp;3. Incorporation of Documents by Reference.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents filed with the Commission are incorporated herein by reference:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Sterling&#146;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All other reports filed by Sterling pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year covered by the Annual
Report on Form 10-K referred to in Item 3(a) above.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The description of Sterling&#146;s common stock contained in its registration
statement on Form S-3 (Registration No.&nbsp;333-130512) filed on December&nbsp;20, 2005,
including any amendment or report filed for the purpose of updating such description.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, we are not incorporating any document or information deemed to
have been furnished and not filed in accordance with SEC rules.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents filed by Sterling pursuant to Section&nbsp;13(a), 13(c), 14 and 15(d) of the Exchange
Act after the date hereof, and prior to the filing of a post-effective amendment which indicates
that the securities offered hereby have been sold or which deregisters the securities covered
hereby then remaining unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective dates on which such
documents are filed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any statement contained in this Registration Statement, or in a document incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement contained herein, or in any
other subsequently filed document which also is or is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this Registration
Statement.
</DIV>
<!-- link2 "Item&nbsp;4. Description of Securities" -->
<DIV align="left"><A NAME="003"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Item&nbsp;4. Description of Securities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not Applicable
</DIV>
<!-- link2 "Item&nbsp;5. Interests of Named Experts and Counsel" -->
<DIV align="left"><A NAME="004"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Item&nbsp;5. Interests of Named Experts and Counsel.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not Applicable
</DIV>
<!-- link2 "Item&nbsp;6. Indemnification of Directors and Officers" -->
<DIV align="left"><A NAME="005"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Item&nbsp;6. Indemnification of Directors and Officers.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;23B.08.570 of the Washington Business Corporation Act authorizes a court to
award, or a corporation&#146;s board of directors to grant indemnity to directors, officers, employees
and other agents of the corporation (&#147;Agents&#148;) in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors has resolved to indemnify the officers and directors of the registrant
to the full extent permitted by Section&nbsp;23B.08.570 of the Washington Business Corporation Act, and
Article&nbsp;XI of our Amended and Restated Articles of Incorporation and Article&nbsp;X of our Amended and
Restated Bylaws authorize the registrant to provide for indemnification of officers and directors
to the same extent. This indemnification limits the personal monetary liability of directors in
performing their duties on behalf of the registrant, to the extent permitted by the Washington
Business Corporation Act, and permits the registrant to indemnify its directors and officers
against certain liabilities and expenses, to the extent permitted by the Washington Business
Corporation Act. In addition, the registrant maintains a directors and officers liability insurance
policy that insures its directors and officers against certain liabilities, including certain
liabilities under the Securities Act of 1933.
</DIV>

<P align="center" style="font-size: 10pt">II-1
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link2 "Item&nbsp;7. Exemption From Registration Claimed" -->
<DIV align="left"><A NAME="006"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Item&nbsp;7. Exemption From Registration Claimed.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not Applicable
</DIV>
<!-- link2 "Item&nbsp;8. Exhibits" -->
<DIV align="left"><A NAME="007"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Item&nbsp;8. Exhibits.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following exhibits are filed with or incorporated by reference into this Registration
Statement on Form S-8:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Articles of Incorporation of Sterling. Filed as Exhibit&nbsp;4.1 to
Sterling&#146;s registration statement on Form&nbsp;S-3 filed on December&nbsp;20, 2005 and
incorporated by reference herein.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Articles of Amendment of Restated Articles of Incorporation of Sterling. Filed
as Exhibit&nbsp;4.2 to Sterling&#146;s registration statement on Form&nbsp;S-3 filed on December&nbsp;20,
2005 and incorporated by reference herein.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws of Sterling. Filed as Exhibit&nbsp;3.3 to Sterling&#146;s
registration statement on Form&nbsp;S-4 filed on December&nbsp;9, 2002 and incorporated by
reference herein.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Witherspoon, Kelley, Davenport &#038; Toole, P.S.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of BDO Seidman, LLP.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Witherspoon, Kelley, Davenport &#038; Toole, P.S. (included in Exhibit
5.1 to this Registration Statement).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of attorney (set forth on the signature pages to the Registration
Statement).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lynnwood Financial Group Qualified and Nonqualified Stock Option Plan.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">II-2
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link2 "Item&nbsp;9. Undertakings" -->
<DIV align="left"><A NAME="008"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Item&nbsp;9. Undertakings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;To file, during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;To include any prospectus required by Section&nbsp;10(a)(3) of the Securities Act;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;To reflect in the prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20&nbsp;percent change in the maximum aggregate
offering price set forth in the &#147;Calculation of Registration Fee&#148; table in the effective
Registration Statement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;To include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to such information in
the Registration Statement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the Registration
Statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by Sterling pursuant to Section&nbsp;13 or 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;That, for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;That, for purposes of determining any liability under the Securities Act, each filing of
Sterling&#146;s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan&#146;s annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide offering thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Insofar as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of Sterling pursuant to the foregoing
provisions, or otherwise, Sterling has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by
Sterling of expenses incurred or paid by a director, officer or controlling person of Sterling in
the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, Sterling will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final adjudication of such issue.
</DIV>

<P align="center" style="font-size: 10pt">II-3
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="009"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, as amended, Sterling certifies
that it has reasonable grounds to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Spokane, State of Washington, on July&nbsp;24, 2006.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
    <TD colspan="2" valign="top" align="left">STERLING FINANCIAL CORPORATION</TD>

    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ DANIEL G. BYRNE</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DANIEL G. BYRNE, Executive Vice President,</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Assistant Secretary, and Principal Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>POWER OF ATTORNEY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby grants a
power of attorney to Harold B. Gilkey and Daniel G. Byrne and each of them, with full power of
substitution and resubstitution, for him and his name, place and stead, in any and all capacities
(including his capacity as a director or officer of Sterling Financial Corporation) to sign for
such person, and in such person&#146;s name and capacity indicated below, any and all amendments to the
Registration Statement of Sterling Financial Corporation and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or each of them or any substitute therefor may do or cause to be
done by virtue hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Harold B. Gilkey
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Harold B. Gilkey
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the Board and
Chief Executive Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;24, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ William W. Zuppe
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
William W. Zuppe
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President, Chief Operating
Officer and Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;24, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Daniel G. Byrne
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Daniel G. Byrne
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President,
Assistant Secretary, and
Principal Financial Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;24, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ William R. Basom
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
William R. Basom
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, Treasurer
and Principal Accounting
Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;24, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Rodney W. Barnett
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Rodney W. Barnett
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;24, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Donald N. Bauhofer
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Donald N. Bauhofer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;24, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ William L. Eisenhart
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
William L. Eisenhart
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;24, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ James P. Fugate
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
James P. Fugate
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;24, 2006</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">II-4
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Robert D. Larrabee
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Robert D. Larrabee
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;24, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Donald J. Lukes
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Donald J. Lukes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;24, 2006</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">II-5
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "EXHIBIT INDEX" -->
<DIV align="left"><A NAME="010"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Articles of Incorporation of Sterling. Filed as Exhibit&nbsp;4.1 to
Sterling&#146;s registration statement on Form&nbsp;S-3 filed on December&nbsp;19, 2005 and
incorporated by reference herein.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Articles of Amendment of Restated Articles of Incorporation of Sterling. Filed
as Exhibit&nbsp;4.2 to Sterling&#146;s registration statement on Form&nbsp;S-3 filed on December&nbsp;19,
2005 and incorporated by reference herein.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws of Sterling. Filed as Exhibit&nbsp;3.3 to Sterling&#146;s
registration statement on Form&nbsp;S-4 filed on December&nbsp;9, 2002 and incorporated by
reference herein.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Witherspoon, Kelley, Davenport &#038; Toole, P.S.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of BDO Seidman, LLP.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Witherspoon, Kelley, Davenport &#038; Toole, P.S. (included in Exhibit
5.1 to this Registration Statement).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of attorney (set forth on the signature pages to the Registration
Statement).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lynnwood Financial Group Qualified and Nonqualified Stock Option Plan.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">
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sv8
Table of Contents
As filed with the Securities and Exchange Commission on July 24, 2006.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
STERLING FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
WASHINGTON
(State or other jurisdiction of
incorporation or organization)
91-1572822
(I.R.S. Employer
Identification No.)
111 North Wall Street
Spokane, Washington 99201
(Address of Principal Executive Offices) (Zip Code)
Lynnwood Financial Group Qualified and Nonqualified Stock Option Plan
(Full title of the plan)
Andrew J. Schultheis, Secretary
Sterling Financial Corporation
111 North Wall Street
Spokane, Washington 99201
(509) 227-5389
(Name, address and telephone number, including area code, of agent for service)
Copies to:
Andrew J. Schultheis, Esq.
Richard A. Repp, Esq.
Witherspoon, Kelley, Davenport
& Toole, P.S.
West 422 Riverside Avenue, Suite 1100
Spokane, Washington 99201
(509) 624-5265
CALCULATION OF REGISTRATION FEE
Title of each class of
Amount to be
Proposed maximum
Proposed maximum
Amount of
securities to be registered
registered (1)
offering price per share (2)
aggregate offering price (2)
registration fee (2)
Common Stock, par value
$1.00 per share
77,528
$8.19
$634,954.32
$67.95
(1)
Consists of common shares (the "Common Stock") of Sterling Financial Corporation, a
Washington corporation ("Sterling" or "Registrant") to be issued upon exercise of currently
outstanding stock options (the "Options") granted under the Lynnwood Financial Group Qualified
and Nonqualified Stock Option Plan (the "Lynnwood Plan"). The Lynnwood Plan was assumed by
Sterling pursuant to the Agreement and Plan of Merger (the "Merger Agreement") dated as of
February 12, 2006 by and between Sterling and Lynnwood Financial Group, Inc., a Washington
corporation ("Lynnwood"). Pursuant to Rule 416(a) of the Securities Act of 1933, as amended
(the "Securities Act"), this registration statement also covers any additional securities that
may be offered or issued as a result of a stock split, stock dividend or similar adjustment to
the outstanding Common Stock.
(2)
Estimated pursuant to Rule 457(c) and (h) based upon the estimated weighted average exercise
price per share.
TABLE OF CONTENTS
PART I
PART II
Item 3. Incorporation of Documents by Reference
Item 4. Description of Securities
Item 5. Interests of Named Experts and Counsel
Item 6. Indemnification of Directors and Officers
Item 7. Exemption From Registration Claimed
Item 8. Exhibits
Item 9. Undertakings
SIGNATURES
EXHIBIT INDEX
EXHIBIT 5.1
EXHIBIT 23.1
EXHIBIT 99.1
Table of Contents
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I of this Form S-8 will be sent or
given to participants in the Lynnwood Plan, as specified by Rule 428(b)(1) promulgated by the
Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended
(the "Securities Act"). In accordance with Rule 428 and the requirements of Part I of Form S-8,
such document(s) are not being filed with the Commission, either as part of this registration
statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities
Act, but constitute (along with the documents incorporated by reference into the Registration
Statement pursuant to Item 3 of Part II hereof) a prospectus that meets the requirements of Section
10(a) of the Securities Act.
2
Table of Contents
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission are incorporated herein by reference:
(a)
Sterling's Annual Report on Form 10-K for the year ended December 31, 2005.
(b)
All other reports filed by Sterling pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year covered by the Annual
Report on Form 10-K referred to in Item 3(a) above.
(c)
The description of Sterling's common stock contained in its registration
statement on Form S-3 (Registration No. 333-130512) filed on December 20, 2005,
including any amendment or report filed for the purpose of updating such description.
Notwithstanding the foregoing, we are not incorporating any document or information deemed to
have been furnished and not filed in accordance with SEC rules.
All documents filed by Sterling pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange
Act after the date hereof, and prior to the filing of a post-effective amendment which indicates
that the securities offered hereby have been sold or which deregisters the securities covered
hereby then remaining unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective dates on which such
documents are filed.
Any statement contained in this Registration Statement, or in a document incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement contained herein, or in any
other subsequently filed document which also is or is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
Not Applicable
Item 5. Interests of Named Experts and Counsel.
Not Applicable
Item 6. Indemnification of Directors and Officers.
Section 23B.08.570 of the Washington Business Corporation Act authorizes a court to
award, or a corporation's board of directors to grant indemnity to directors, officers, employees
and other agents of the corporation ("Agents") in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended.
Our Board of Directors has resolved to indemnify the officers and directors of the registrant
to the full extent permitted by Section 23B.08.570 of the Washington Business Corporation Act, and
Article XI of our Amended and Restated Articles of Incorporation and Article X of our Amended and
Restated Bylaws authorize the registrant to provide for indemnification of officers and directors
to the same extent. This indemnification limits the personal monetary liability of directors in
performing their duties on behalf of the registrant, to the extent permitted by the Washington
Business Corporation Act, and permits the registrant to indemnify its directors and officers
against certain liabilities and expenses, to the extent permitted by the Washington Business
Corporation Act. In addition, the registrant maintains a directors and officers liability insurance
policy that insures its directors and officers against certain liabilities, including certain
liabilities under the Securities Act of 1933.
II-1
Table of Contents
Item 7. Exemption From Registration Claimed.
Not Applicable
Item 8. Exhibits.
The following exhibits are filed with or incorporated by reference into this Registration
Statement on Form S-8:
Exhibit
Number
Description
4.1
Restated Articles of Incorporation of Sterling. Filed as Exhibit 4.1 to
Sterling's registration statement on Form S-3 filed on December 20, 2005 and
incorporated by reference herein.
4.2
Articles of Amendment of Restated Articles of Incorporation of Sterling. Filed
as Exhibit 4.2 to Sterling's registration statement on Form S-3 filed on December 20,
2005 and incorporated by reference herein.
4.3
Amended and Restated Bylaws of Sterling. Filed as Exhibit 3.3 to Sterling's
registration statement on Form S-4 filed on December 9, 2002 and incorporated by
reference herein.
5.1
Opinion of Witherspoon, Kelley, Davenport & Toole, P.S.
23.1
Consent of BDO Seidman, LLP.
23.2
Consent of Witherspoon, Kelley, Davenport & Toole, P.S. (included in Exhibit
5.1 to this Registration Statement).
24.1
Power of attorney (set forth on the signature pages to the Registration
Statement).
99.1
Lynnwood Financial Group Qualified and Nonqualified Stock Option Plan.
II-2
Table of Contents
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to such information in
the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the Registration
Statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by Sterling pursuant to Section 13 or 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement.
2. That, for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
4. That, for purposes of determining any liability under the Securities Act, each filing of
Sterling's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide offering thereof.
5. Insofar as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of Sterling pursuant to the foregoing
provisions, or otherwise, Sterling has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by
Sterling of expenses incurred or paid by a director, officer or controlling person of Sterling in
the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, Sterling will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final adjudication of such issue.
II-3
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Sterling certifies
that it has reasonable grounds to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Spokane, State of Washington, on July 24, 2006.
STERLING FINANCIAL CORPORATION
By
/s/ DANIEL G. BYRNE
DANIEL G. BYRNE, Executive Vice President,
Assistant Secretary, and Principal Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby grants a
power of attorney to Harold B. Gilkey and Daniel G. Byrne and each of them, with full power of
substitution and resubstitution, for him and his name, place and stead, in any and all capacities
(including his capacity as a director or officer of Sterling Financial Corporation) to sign for
such person, and in such person's name and capacity indicated below, any and all amendments to the
Registration Statement of Sterling Financial Corporation and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or each of them or any substitute therefor may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Harold B. Gilkey
Harold B. Gilkey
Chairman of the Board and
Chief Executive Officer
July 24, 2006
/s/ William W. Zuppe
William W. Zuppe
President, Chief Operating
Officer and Director
July 24, 2006
/s/ Daniel G. Byrne
Daniel G. Byrne
Executive Vice President,
Assistant Secretary, and
Principal Financial Officer
July 24, 2006
/s/ William R. Basom
William R. Basom
Vice President, Treasurer
and Principal Accounting
Officer
July 24, 2006
/s/ Rodney W. Barnett
Rodney W. Barnett
Director
July 24, 2006
/s/ Donald N. Bauhofer
Donald N. Bauhofer
Director
July 24, 2006
/s/ William L. Eisenhart
William L. Eisenhart
Director
July 24, 2006
/s/ James P. Fugate
James P. Fugate
Director
July 24, 2006
II-4
Table of Contents
Signature
Title
Date
/s/ Robert D. Larrabee
Robert D. Larrabee
Director
July 24, 2006
/s/ Donald J. Lukes
Donald J. Lukes
Director
July 24, 2006
II-5
Table of Contents
EXHIBIT INDEX
Exhibit
Number
Description
4.1
Restated Articles of Incorporation of Sterling. Filed as Exhibit 4.1 to
Sterling's registration statement on Form S-3 filed on December 19, 2005 and
incorporated by reference herein.
4.2
Articles of Amendment of Restated Articles of Incorporation of Sterling. Filed
as Exhibit 4.2 to Sterling's registration statement on Form S-3 filed on December 19,
2005 and incorporated by reference herein.
4.3
Amended and Restated Bylaws of Sterling. Filed as Exhibit 3.3 to Sterling's
registration statement on Form S-4 filed on December 9, 2002 and incorporated by
reference herein.
5.1
Opinion of Witherspoon, Kelley, Davenport & Toole, P.S.
23.1
Consent of BDO Seidman, LLP.
23.2
Consent of Witherspoon, Kelley, Davenport & Toole, P.S. (included in Exhibit
5.1 to this Registration Statement).
24.1
Power of attorney (set forth on the signature pages to the Registration
Statement).
99.1
Lynnwood Financial Group Qualified and Nonqualified Stock Option Plan.