As filed with the Securities and Exchange Commission on 
                               December 22, 1998.
                                              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                                        91-1572822    
     -------------------------------                   -------------------
     (State or other jurisdiction of                   (I.R.S. Employer  
     incorporation or organization)                    Identification No.)

                              111 North Wall Street
                           Spokane, Washington  99201
                                 (509) 458-2711
               --------------------------------------------------
               (Address, including zip code, and telephone number,
                 including area code, of registrant's principal 
                               executive offices)

          Sterling Financial Corporation 1998 Long-Term Incentive Plan

              First Federal Savings and Loan Association of Montana
                      1992 Stock Option and Incentive Plan

                              (Full title of plans)

                                   Copies to:

     NED M. BARNES, SECRETARY                DONALD J. LUKES, ESQ.
     Sterling Financial Corporation          Witherspoon, Kelley,
     111 North Wall Street                     Davenport & Toole, P.S.
     Spokane, Washington  99201              West 422 Riverside Avenue, 
     (509) 458-2884                          Suite 1100
                                             Spokane, Washington 99201
                                             (509) 624-5265

                 ----------------------------------------------
                 (Name, address and telephone number, including
                        area code, of agent for service)
     <PAGE>
                         Calculation of Registration Fee
<TABLE>
<CAPTION>
      Title of                      Proposed          Proposed
      Securities    Amount          Maximum           Maximum            Amount of
      to be         to be           Offering Price    Aggregate          Registration
      Registered    Registered(1)   Per Share (2)     Offering Price(2)  Fee
      ----------    -------------   --------------    -----------------  ------------
      <S>           <C>             <C>               <C>                <C>
      Common Stock,    549,505         $16.125           $8,860,768        $2,463.29
      1.00 par 
      value per 
      share
</TABLE>                                               
      (1)   49,505 shares are being registered for issuance under the First 
            Federal Savings and Loan Association of Montana 1992 Stock Option 
            and Incentive Plan, which Plan was assumed by the Registrant in
            connection with its acquisition of Big Sky Bancorp, Inc.  
            500,000 shares are being registered for issuance under
            the Sterling Financial Corporation 1998 Long-Term Incentive 
            Plan.  (The foregoing plans are collectively referred to herein 
            as the "Plans.")

      (2)   Estimated Pursuant to Rule 457(c) and (h) solely for the purpose 
            of calculating the amount of the registration fee based upon the
            average of the high and low trading prices of the common stock, 
            $1.00 par value per share (the "Common Stock") of Sterling 
            Financial Corporation, (the "Registrant"), as reported on the
            Nasdaq National Market on December 18, 1998.
<PAGE>
                                     PART I
                                     ------


     ITEM 1.  Plan Information

          Information required by Part I to be contained in the prospectus
          is omitted from this Registration Statement in accordance with
          Rule 428 under the Securities Act of 1933 and the Note to Part I
          of Form S-8.

     ITEM 2.  

          See response to Item 1 above.
     <PAGE>
                                     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:

          (1)  The Registrant's Annual Report on Form 10-K for the year
               ended December 31, 1997.

          (2)  The Registrant's Quarterly Reports on Form 10-Q for the
               quarters ended March 31, 1998, June 30, 1998 and September
               30, 1998.

          (3)  The Registrant's Current Reports on Form 8-K on February 2,
               April 23, June 15, June 30 and November 16, 1998.

          (4)  The description of the Common Stock of the Registrant as set
               forth in a registration statement under the Exchange Act,
               including any amendment or report filed for the purpose of
               updating such description.

          All documents filed by the Registrant pursuant to Section 13(a)
          or 15(d) of the Securities Exchange Act of 1934, as amended  (the
          "Exchange Act"), after the date hereof and prior to the filing of
          a post-effective amendment which indicates that all securities
          offered hereby have been sold or which deregisters all securities
          covered hereby then remaining unsold, shall also be deemed to be
          incorporated by reference herein 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
     <PAGE>
     ITEM 6.  Indemnification of Directors and Officers.

          The Washington Business Corporation Act permits and the Restated
          Articles of Incorporation and Bylaws of the Registrant provide
          that to the fullest extent allowed by applicable laws existing
          from time to time, any person may, and directors and officers
          shall, be indemnified or reimbursed by the Registrant for
          reasonable expenses (including attorneys' fees) actually incurred
          in connection with any threatened, pending or completed action,
          suit or proceeding, whether civil, criminal, administrative or
          investigative to which he or she shall be made a party or
          threatened to be made a party by reason of his or her being or
          having been a director, officer, employee or agent of the
          Registrant or of any firm, corporation, employee benefit plan or
          other organization which he or she served in any such capacity at
          the request of the Registrant; provided, however, that no person
          shall be so indemnified or reimbursed (1) in relation to any
          matter in such action, suit or proceeding as to which he or she
          shall finally be adjudged to have been guilty or liable for gross
          negligence, willful misconduct or criminal acts in the
          performance of his or her duties to the Registrant; or (2) in
          relation to any matter in such action, suit or proceeding which
          has been made the subject of a compromise settlement except with
          the approval of (a) a court of competent jurisdiction, (b) the
          holders of record of a majority of the outstanding shares of the
          Registrant or (c) the Board of Directors, acting by vote of a
          majority of directors not parties to the same or substantially
          the same action, suit or proceeding, whether or not such majority
          constitutes a quorum. The foregoing right of indemnification or
          reimbursement is not exclusive of other rights to which such
          person, his or her heirs, executors or administrators may be
          entitled as a matter of law.  Persons indemnified are deemed to
          include the heirs, legal representatives, executors and
          administrators of such persons.
      
          Expenses (including attorneys' fees) incurred in defending a
          civil or criminal action, suit or proceeding shall be paid by the
          Registrant in advance of the final disposition of such action,
          suit or proceeding. The director, officer, employee or agent must
          repay such amount, however, if it shall ultimately be determined
          that he or she is not entitled to be indemnified by the
          Registrant.
      
          The Registrant's Restated Articles of Incorporation also provide
          that a director of the Registrant shall not be personally liable
          to the Registrant or its shareholders for monetary damages for
          conduct as a director, except for liability of the director for
          (i) acts or omissions that involve intentional misconduct or a
          knowing violation of law by the director, (ii) conduct which
          violates RCW 23B.08.310 of the Washington Business Corporation
          Act pertaining to unpermitted distributions to shareholders or
          loans to directors or (iii) any transaction from which the
          director will personally receive a benefit in money, property or
          services to which the director is not legally entitled. If the
     <PAGE>
          Washington Business Corporation Act is amended to further
          eliminate or limit the personal liability of directors, then the
          liability of a director of the Registrant shall be eliminated or
          limited to the fullest extent permitted by the Washington
          Business Corporation Act, as so amended. Any repeal or
          modification of the foregoing paragraph by the shareholders of
          the Registrant shall not adversely affect any right or protection
          of a director of the Registrant existing at the time of such
          repeal or modification.

     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
          -------

          4.1   Reference is made to Registrant's Restated Articles of
                Incorporation and Articles of Amendment of Restated
                Articles of Incorporation filed as Exhibits 3.1 and 3.2,
                respectively, to Registrant's Form S-4 dated November 7,
                1994 and incorporated by reference herein.

          4.2   Reference is made to Registrant's Amended and Restated
                Bylaws filed as Exhibit 3.3 to Registrant's Form 10-Q dated
                March 31, 1997 and incorporated by reference herein.

          4.3   The Registrant has outstanding certain long-term debt. 
                None of such debt exceeds ten percent of Registrant's total
                assets; therefore, copies of the constituent instruments
                defining the rights of the holders of such debt are not
                included as exhibits.  Copies of instruments with respect
                to such long-term debt will be furnished to the Commission
                upon request.

          4.4   Copy of Sterling Financial Corporation 1998 Long-Term
                Incentive Plan, filed as Exhibit A to Registrant's Proxy
                Statement in connection with the Annual Meeting of
                Shareholders held on April 28, 1998 and incorporated by
                reference herein.

          4.5   First Federal Savings and Loan Association of Montana 1992
                Stock Option and Incentive Plan, incorporated by reference
                from the Registration Statement on Form 10 filed by the
                Association with the Office of Thrift Supervision on May
                15, 1992.

          5.1   Opinion of Witherspoon, Kelley, Davenport & Toole, P.S.
     <PAGE>
          23.1  Consent of PricewaterhouseCoopers LLP

          23.2  Consent of Witherspoon, Kelley, Davenport & Toole, P.S.
                (included in Exhibit 5 to this Registration Statement).

          24    Power of attorney (set forth on the signature pages to the
                Registration Statement).


     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 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, and (iii) to
               include any material information with respect to the plan of
               distribution not previously disclosed in the Registration
               Statement or any material change in such information in the
               Registration Statement; provided, however, that clauses (i)
               and (ii) do not apply if the information required to be
               included in a post-effective amendment by those clauses is
               contained in periodic reports filed by the Registrant
               pursuant to Section 13 or Section 15(d) of the Exchange Act
               that are incorporated by reference in the Registration
               Statement.

          2.   That, for the purposes 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 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 the purposes of determining any liability under
               the Securities Act, each filing of the Registrant's annual
               report pursuant to Section 13(a) or 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 that offering of such securities at that time
               shall be deemed to be the initial bona fide offering
               thereof.
     <PAGE>
          5.   Insofar as indemnification for liabilities arising under the
               Securities Act of 1933 may be permitted to directors,
               officers and controlling persons of the registrant pursuant
               to the foregoing provisions or otherwise, the Registrant has
               been advised that in the opinion of the Commission such
               indemnification is against public policy as expressed in the
               Securities Act and is, therefore, unenforceable.  In the
               event that a claim for indemnification against liabilities
               (other than the payment by the Registrant 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, the Registrant will,
               unless in the opinion of its counsel the matter has been
               settled by controlling precedent, submit to a court of
               appropriate jurisdiction the questions whether such
               indemnification by it is against public policy expressed in
               the Securities Act and will be governed by the final
               adjudication of such issue.
     <PAGE>
     Pursuant to the requirements of the Securities Act of 1933, the
     company 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 this 21st day of December, 1998.

                                        STERLING FINANCIAL CORPORATION


                                        By   /s/ WILLIAM W. ZUPPE
                                        -----------------------------
                                        WILLIAM W. ZUPPE, President, 
                                        Chief Operating Officer and
                                        Director


                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
     appears below hereby grants a power of attorney to Daniel G. Byrne and
     Donald J. Lukes 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 below by the following persons
     in the capacities indicated on December 21, 1998.

     SIGNATURE                          TITLE
     --------------------------------   -----------------------------------

     /s/ HAROLD B. GILKEY               Chairman of the Board and Chief
     --------------------------------     Executive Officer
     Harold B. Gilkey

     /s/ WILLIAM W. ZUPPE               President, Chief Operating Officer
     --------------------------------     and Director
     William W. Zuppe

     /s/ DANIEL G. BYRNE                Chief Financial Officer and
     --------------------------------     Principal Accounting Officer
     Daniel G. Byrne
     <PAGE>
     /s/ NED M. BARNES                  Secretary and Director
     --------------------------------
     Ned M. Barnes  

     /s/ RODNEY W. BARNETT              Director
     --------------------------------
     Rodney W. Barnett

     /s/ JAMES P. FUGATE                Director
     --------------------------------
     James P. Fugate

     /s/ ROBERT D. LARRABEE             Director
     --------------------------------
     Robert D. Larrabee

     s/s ROBERT E. MEYERS               Director
     --------------------------------
     Robert E. Meyers

     /s/ DAVID O. WALLACE               Director
     --------------------------------
     David O. Wallace

<PAGE>
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As filed with the Securities and Exchange Commission on 
                               December 22, 1998.
                                              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                                        91-1572822    
     -------------------------------                   -------------------
     (State or other jurisdiction of                   (I.R.S. Employer  
     incorporation or organization)                    Identification No.)

                              111 North Wall Street
                           Spokane, Washington  99201
                                 (509) 458-2711
               --------------------------------------------------
               (Address, including zip code, and telephone number,
                 including area code, of registrant's principal 
                               executive offices)

          Sterling Financial Corporation 1998 Long-Term Incentive Plan

              First Federal Savings and Loan Association of Montana
                      1992 Stock Option and Incentive Plan

                              (Full title of plans)

                                   Copies to:

     NED M. BARNES, SECRETARY                DONALD J. LUKES, ESQ.
     Sterling Financial Corporation          Witherspoon, Kelley,
     111 North Wall Street                     Davenport & Toole, P.S.
     Spokane, Washington  99201              West 422 Riverside Avenue, 
     (509) 458-2884                          Suite 1100
                                             Spokane, Washington 99201
                                             (509) 624-5265

                 ----------------------------------------------
                 (Name, address and telephone number, including
                        area code, of agent for service)
Calculation of Registration Fee
Title of                      Proposed          Proposed
      Securities    Amount          Maximum           Maximum            Amount of
      to be         to be           Offering Price    Aggregate          Registration
      Registered    Registered(1)   Per Share (2)     Offering Price(2)  Fee
      ----------    -------------   --------------    -----------------  ------------
Common Stock,    549,505         $16.125           $8,860,768        $2,463.29
      1.00 par 
      value per 
      share
(1)   49,505 shares are being registered for issuance under the First 
            Federal Savings and Loan Association of Montana 1992 Stock Option 
            and Incentive Plan, which Plan was assumed by the Registrant in
            connection with its acquisition of Big Sky Bancorp, Inc.  
            500,000 shares are being registered for issuance under
            the Sterling Financial Corporation 1998 Long-Term Incentive 
            Plan.  (The foregoing plans are collectively referred to herein 
            as the "Plans.")

      (2)   Estimated Pursuant to Rule 457(c) and (h) solely for the purpose 
            of calculating the amount of the registration fee based upon the
            average of the high and low trading prices of the common stock, 
            $1.00 par value per share (the "Common Stock") of Sterling 
            Financial Corporation, (the "Registrant"), as reported on the
            Nasdaq National Market on December 18, 1998.
PART I
                                     ------

     ITEM 1.  Plan Information

          Information required by Part I to be contained in the prospectus
          is omitted from this Registration Statement in accordance with
          Rule 428 under the Securities Act of 1933 and the Note to Part I
          of Form S-8.

     ITEM 2.  

          See response to Item 1 above.
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:

          (1)  The Registrant's Annual Report on Form 10-K for the year
               ended December 31, 1997.

          (2)  The Registrant's Quarterly Reports on Form 10-Q for the
               quarters ended March 31, 1998, June 30, 1998 and September
               30, 1998.

          (3)  The Registrant's Current Reports on Form 8-K on February 2,
               April 23, June 15, June 30 and November 16, 1998.

          (4)  The description of the Common Stock of the Registrant as set
               forth in a registration statement under the Exchange Act,
               including any amendment or report filed for the purpose of
               updating such description.

          All documents filed by the Registrant pursuant to Section 13(a)
          or 15(d) of the Securities Exchange Act of 1934, as amended  (the
          "Exchange Act"), after the date hereof and prior to the filing of
          a post-effective amendment which indicates that all securities
          offered hereby have been sold or which deregisters all securities
          covered hereby then remaining unsold, shall also be deemed to be
          incorporated by reference herein 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.

          The Washington Business Corporation Act permits and the Restated
          Articles of Incorporation and Bylaws of the Registrant provide
          that to the fullest extent allowed by applicable laws existing
          from time to time, any person may, and directors and officers
          shall, be indemnified or reimbursed by the Registrant for
          reasonable expenses (including attorneys' fees) actually incurred
          in connection with any threatened, pending or completed action,
          suit or proceeding, whether civil, criminal, administrative or
          investigative to which he or she shall be made a party or
          threatened to be made a party by reason of his or her being or
          having been a director, officer, employee or agent of the
          Registrant or of any firm, corporation, employee benefit plan or
          other organization which he or she served in any such capacity at
          the request of the Registrant; provided, however, that no person
          shall be so indemnified or reimbursed (1) in relation to any
          matter in such action, suit or proceeding as to which he or she
          shall finally be adjudged to have been guilty or liable for gross
          negligence, willful misconduct or criminal acts in the
          performance of his or her duties to the Registrant; or (2) in
          relation to any matter in such action, suit or proceeding which
          has been made the subject of a compromise settlement except with
          the approval of (a) a court of competent jurisdiction, (b) the
          holders of record of a majority of the outstanding shares of the
          Registrant or (c) the Board of Directors, acting by vote of a
          majority of directors not parties to the same or substantially
          the same action, suit or proceeding, whether or not such majority
          constitutes a quorum. The foregoing right of indemnification or
          reimbursement is not exclusive of other rights to which such
          person, his or her heirs, executors or administrators may be
          entitled as a matter of law.  Persons indemnified are deemed to
          include the heirs, legal representatives, executors and
          administrators of such persons.
      
          Expenses (including attorneys' fees) incurred in defending a
          civil or criminal action, suit or proceeding shall be paid by the
          Registrant in advance of the final disposition of such action,
          suit or proceeding. The director, officer, employee or agent must
          repay such amount, however, if it shall ultimately be determined
          that he or she is not entitled to be indemnified by the
          Registrant.
      
          The Registrant's Restated Articles of Incorporation also provide
          that a director of the Registrant shall not be personally liable
          to the Registrant or its shareholders for monetary damages for
          conduct as a director, except for liability of the director for
          (i) acts or omissions that involve intentional misconduct or a
          knowing violation of law by the director, (ii) conduct which
          violates RCW 23B.08.310 of the Washington Business Corporation
          Act pertaining to unpermitted distributions to shareholders or
          loans to directors or (iii) any transaction from which the
          director will personally receive a benefit in money, property or
          services to which the director is not legally entitled. If the
Washington Business Corporation Act is amended to further
          eliminate or limit the personal liability of directors, then the
          liability of a director of the Registrant shall be eliminated or
          limited to the fullest extent permitted by the Washington
          Business Corporation Act, as so amended. Any repeal or
          modification of the foregoing paragraph by the shareholders of
          the Registrant shall not adversely affect any right or protection
          of a director of the Registrant existing at the time of such
          repeal or modification.

     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
          -------

          4.1   Reference is made to Registrant's Restated Articles of
                Incorporation and Articles of Amendment of Restated
                Articles of Incorporation filed as Exhibits 3.1 and 3.2,
                respectively, to Registrant's Form S-4 dated November 7,
                1994 and incorporated by reference herein.

          4.2   Reference is made to Registrant's Amended and Restated
                Bylaws filed as Exhibit 3.3 to Registrant's Form 10-Q dated
                March 31, 1997 and incorporated by reference herein.

          4.3   The Registrant has outstanding certain long-term debt. 
                None of such debt exceeds ten percent of Registrant's total
                assets; therefore, copies of the constituent instruments
                defining the rights of the holders of such debt are not
                included as exhibits.  Copies of instruments with respect
                to such long-term debt will be furnished to the Commission
                upon request.

          4.4   Copy of Sterling Financial Corporation 1998 Long-Term
                Incentive Plan, filed as Exhibit A to Registrant's Proxy
                Statement in connection with the Annual Meeting of
                Shareholders held on April 28, 1998 and incorporated by
                reference herein.

          4.5   First Federal Savings and Loan Association of Montana 1992
                Stock Option and Incentive Plan, incorporated by reference
                from the Registration Statement on Form 10 filed by the
                Association with the Office of Thrift Supervision on May
                15, 1992.

          5.1   Opinion of Witherspoon, Kelley, Davenport & Toole, P.S.
23.1  Consent of PricewaterhouseCoopers LLP

          23.2  Consent of Witherspoon, Kelley, Davenport & Toole, P.S.
                (included in Exhibit 5 to this Registration Statement).

          24    Power of attorney (set forth on the signature pages to the
                Registration Statement).

     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 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, and (iii) to
               include any material information with respect to the plan of
               distribution not previously disclosed in the Registration
               Statement or any material change in such information in the
               Registration Statement; provided, however, that clauses (i)
               and (ii) do not apply if the information required to be
               included in a post-effective amendment by those clauses is
               contained in periodic reports filed by the Registrant
               pursuant to Section 13 or Section 15(d) of the Exchange Act
               that are incorporated by reference in the Registration
               Statement.

          2.   That, for the purposes 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 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 the purposes of determining any liability under
               the Securities Act, each filing of the Registrant's annual
               report pursuant to Section 13(a) or 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 that 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 of 1933 may be permitted to directors,
               officers and controlling persons of the registrant pursuant
               to the foregoing provisions or otherwise, the Registrant has
               been advised that in the opinion of the Commission such
               indemnification is against public policy as expressed in the
               Securities Act and is, therefore, unenforceable.  In the
               event that a claim for indemnification against liabilities
               (other than the payment by the Registrant 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, the Registrant will,
               unless in the opinion of its counsel the matter has been
               settled by controlling precedent, submit to a court of
               appropriate jurisdiction the questions whether such
               indemnification by it is against public policy expressed in
               the Securities Act and will be governed by the final
               adjudication of such issue.
Pursuant to the requirements of the Securities Act of 1933, the
     company 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 this 21st day of December, 1998.

                                        STERLING FINANCIAL CORPORATION

                                        By   /s/ WILLIAM W. ZUPPE
                                        -----------------------------
                                        WILLIAM W. ZUPPE, President, 
                                        Chief Operating Officer and
                                        Director

                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
     appears below hereby grants a power of attorney to Daniel G. Byrne and
     Donald J. Lukes 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 below by the following persons
     in the capacities indicated on December 21, 1998.

     SIGNATURE                          TITLE
     --------------------------------   -----------------------------------

     /s/ HAROLD B. GILKEY               Chairman of the Board and Chief
     --------------------------------     Executive Officer
     Harold B. Gilkey

     /s/ WILLIAM W. ZUPPE               President, Chief Operating Officer
     --------------------------------     and Director
     William W. Zuppe

     /s/ DANIEL G. BYRNE                Chief Financial Officer and
     --------------------------------     Principal Accounting Officer
     Daniel G. Byrne
/s/ NED M. BARNES                  Secretary and Director
     --------------------------------
     Ned M. Barnes  

     /s/ RODNEY W. BARNETT              Director
     --------------------------------
     Rodney W. Barnett

     /s/ JAMES P. FUGATE                Director
     --------------------------------
     James P. Fugate

     /s/ ROBERT D. LARRABEE             Director
     --------------------------------
     Robert D. Larrabee

     s/s ROBERT E. MEYERS               Director
     --------------------------------
     Robert E. Meyers

     /s/ DAVID O. WALLACE               Director
     --------------------------------
     David O. Wallace