North Valley Bancorp Shareholders Approve Merger With Sterling Financial Corporation Of Spokane, Washington

    SPOKANE, Wash. and REDDING, Calif., Aug. 1 /PRNewswire-FirstCall/ --
 Sterling Financial Corporation ("Sterling") (Nasdaq:   STSA) and North Valley
 Bancorp ("North Valley") (Nasdaq:   NOVB) today announced that at a special
 meeting of shareholders held on July 31, 2007, the shareholders of North
 Valley approved the principal terms of an Agreement and Plan of Merger,
 dated April 10, 2007, by and between Sterling and North Valley, including
 the proposed merger of North Valley with and into Sterling. Consummation of
 the transactions contemplated by the Agreement and Plan of Merger remains
 subject to the satisfaction of certain additional closing conditions,
 including the receipt of all necessary regulatory approvals. Applications
 for such approvals have been submitted and are currently pending. At
 present, Sterling and North Valley expect the closing to occur during the
 third quarter, ending September 30, 2007. North Valley common stock will
 cease trading on the NASDAQ Global Market on the merger closing date.
     Sterling Financial Corporation of Spokane, Washington, is a bank
 holding company, of which the principal operating subsidiaries are Sterling
 Savings Bank and Golf Savings Bank. Sterling Savings Bank is a Washington
 State-chartered, federally insured commercial bank, which opened in April
 1983 as a stock savings and loan association. Sterling Savings Bank, based
 in Spokane, Washington, has financial service centers throughout
 Washington, California, Oregon, Idaho and Montana. Through Sterling Savings
 Bank's wholly owned subsidiaries, Action Mortgage Company and
 INTERVEST-Mortgage Investment Company, it operates loan production offices
 throughout the western region. Sterling Savings Bank's subsidiary Harbor
 Financial Services provides non-bank investments, including mutual funds,
 variable annuities and tax-deferred annuities and other investment products
 through regional representatives throughout Sterling Savings Bank's branch
 network. Golf Savings Bank is a Washington State-chartered and FDIC insured
 savings bank. Golf Savings Bank's primary focus is the origination of
 single-family residential mortgage loans.
     Founded in 1972, North Valley is a bank holding company headquartered
 in Redding, California. Its subsidiary, North Valley Bank ("NVB"), operates
 26 commercial banking offices in Shasta, Humboldt, Del Norte, Mendocino,
 Yolo, Solano, Sonoma, Placer and Trinity counties in northern California,
 including two in-store supermarket branches and seven Business Banking
 Centers. North Valley, through NVB, offers a wide range of consumer and
 business banking deposit products and services including Internet banking
 and cash management services. In addition to these depository services, NVB
 engages in a full complement of lending activities including consumer,
 commercial and real estate loans. Additionally, NVB has SBA Preferred
 Lender status and provides investment services to its customers.
     Sterling filed a registration statement on Form S-4 with the Securities
 and Exchange Commission (the "SEC") which became effective on June 22,
 2007, and on June 29, 2007, North Valley mailed a proxy
 statement/prospectus to its shareholders containing information about the
 proposed merger of North Valley with and into Sterling. Investors and
 security holders of Sterling and North Valley are urged to read the proxy
 statement/prospectus and other relevant materials filed with the SEC
 because they contain important information about Sterling, North Valley and
 the proposed merger. In addition to the registration statement filed by
 Sterling and the proxy statement/prospectus mailed to the North Valley
 shareholders, Sterling and North Valley file annual, quarterly and current
 reports, proxy statements and other information with the SEC. Investors and
 security holders may obtain a free copy of the documents filed with the SEC
 at its website at These documents may also be obtained
 free of charge from Sterling by requesting them in writing at Sterling
 Financial Corporation, 111 North Wall Street, Spokane, WA 99201, or by
 telephone at (509) 227-5389. In addition, investors and security holders
 may access copies of the documents filed with the SEC by Sterling on its
 website at The
 documents filed by North Valley may also be obtained by requesting them in
 writing at North Valley Bancorp, 300 Park Marina Circle, Redding,
 California 96001, or by telephone at (530) 226-2900. In addition, investors
 and security holders may access copies of the documents filed with the SEC
 by North Valley on its website at
     This report contains forward-looking statements, which are not
 historical facts and pertain to future operating results of Sterling and
 North Valley. These forward-looking statements are within the meaning of
 the Private Securities Litigation Reform Act of 1995 and may include, but
 are not limited to, statements about plans, objectives, expectations and
 intentions and other statements contained in this report that are not
 historical facts. When used in this report, the words "expects,"
 "anticipates," "intends," "plans," "believes," "seeks," "estimates" and
 similar expressions are generally intended to identify forward-looking
 statements. These forward-looking statements are inherently subject to
 significant business, economic and competitive uncertainties and
 contingencies, many of which are beyond the control of Sterling or North
 Valley. In addition, these forward-looking statements are subject to
 assumptions with respect to future business strategies and decisions that
 are subject to change. Actual results may differ materially from the
 results discussed in these forward-looking statements because of numerous
 possible risks and uncertainties. These include but are not limited to: the
 possibility of adverse economic developments that may, among other things,
 increase default and delinquency risks in loan portfolios; shifts in
 interest rates that may result in lower interest rate margins; shifts in
 the demand for loan and other products; lower-than-expected revenue or cost
 savings in connection with acquisitions; changes in accounting policies;
 changes in the monetary and fiscal policies of the federal government; and
 changes in laws, regulations and the competitive environment.
     Sterling Contacts: Sterling Financial Corporation
     Harold B. Gilkey
     Chairman and Chief Executive Officer
     Daniel G. Byrne
     EVP and Chief Financial Officer
     Media Contact: Jennifer Lutz
     Public Relations Administrator
     North Valley Contacts: North Valley Bancorp
     Michael J. Cushman
     President and Chief Executive Officer
     Kevin R. Watson
     EVP and Chief Financial Officer

SOURCE Sterling Financial Corporation

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