SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------------------------
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from
Commission file number
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
Sterling Savings Bank Employee Savings and Investment Plan
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
REQUIRED INFORMATION
The following financial statements shall be furnished for the plan:
1. An audited statement of financial condiiton as of the end of the
latest two fiscal years of the plan (or such lesser period as the
plan has been in existence).
2. An audited statement of income and changes in plan equity for
each of the latest three fiscal years of the plan (or such lesser
period as the plan as been in existence).
3. The statements required by Items 1 and 2 shall be prepared in
accordance with the applicable provisions of Article 6A of
Regulation S-X (17 CFR 210.6A-01-.6A-05).
4. In lieu of the requirements of Items 1-3 above, plans subject to
ERISA may file plan financial statements and schedules prepared
in accordance with the financial reporting requirements of ERISA.
To the extent required by ERISA, the plan financial statements
shall be examined by an independent accountant, except that the
"limited scope exemption" contained in Section 103(a)(3)(C) of
ERISA shall not be available.
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
----------------------------------------
(Name of Plan)
--------------------------- ----------------------------------------
(Date) (Signature)
<PAGE>
STERLING Savings Association
Employee Savings and Investment Plan
INFORMATION TO BE INCLUDED IN THE REPORT:
1. Not applicable, see Item 4.
2. Not applicable, see Item 4.
3. Not applicable, see Item 4.
4. Financial statements and schedules prepared in accordance with the
financial reporting requirements of ERISA.
Report of Independent Accountants
Financial Statements:
Statements of Net Assets Available for Benefits as of
December 31, 1998 and 1997
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1998
Notes to Financial Statements
Supplemental Schedules:
Line 27a - Schedule of Assets Held for Investment Purposes
Line 27d - Schedule of Reportable Transactions
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrative Committee
of the Sterling Savings Bank
Employee Savings and Investment Plan
In our opinion, the accompanying statements of net assets available
for benefits and the related statement of changes in net assets
available for benefits present fairly, in all material respects, the
net assets available for benefits of the Sterling Savings Bank
Employee Savings and Investment Plan ("the Plan") as of December 31,
1998 and 1997, and the changes in net assets available for benefits
for the year ended December 31, 1998, as listed under Item 4 of Form
11-K, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by the Plan's management, and evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were made for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental schedules as
listed under Item 4 of Form 11-K are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974,
as amended. The supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
/s/PricewaterhouseCoopers LLP
April 23, 1999
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1998 and 1997
1998 1997
---------- ----------
ASSETS:
Investments, at fair value:
Mutual funds $4,545,667 $3,944,386
Common stock of Sterling Financial
Corporation 2,725,236 2,972,116
Certificates of deposit 430,917 466,710
Cash and cash equivalents 76,475 54,208
Receivables:
Employer contribution 4,810 1,378
---------- ----------
Net assets available for benefits $7,783,105 $7,438,798
========== ==========
The accompanying notes are an integral part of the financial
statements.
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the year ended December 31, 1998
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Interest $ 27,694
Dividends 312,843
Net depreciation in fair value of investments (459,940)
Contributions:
Participants 1,305,441
Employer 363,632
----------
Total additions 1,549,670
DEDUCTIONS TO NET ASSETS ATTRIBUTED TO:
Distributions and benefits paid to participants 1,205,363
----------
Net increase in net assets available for benefits 344,307
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 7,438,798
----------
End of year $7,783,105
==========
The accompanying notes are an integral part of the financial
statements.
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
for the Year Ended December 31, 1998
1. DESCRIPTION OF PLAN:
The following description of the Sterling Savings Bank
("Sterling" or "the Employer") Employee Savings and Investment
Plan ("the Plan") provides only general information.
Participants should refer to the plan document for a more
complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan, which became effective
on July 1, 1985. Employees with one year of service may enroll
on the first day of any calendar quarter. The Plan is subject
to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"), as amended.
CONTRIBUTIONS
Participants may contribute from 1% to 15% of their
compensation up to a statutory maximum amount of $10,000 in
1998, tax deferred, through payroll deductions to the Plan.
Contributions may be suspended at any time upon thirty days'
written notice by the participant. However, contributions may
only be reinstated, and changes in the amount contributed are
only allowed on the first day of any calendar quarter.
Participants contributing to the Plan are entitled to an
Employer matching contribution should Sterling elect to make
one. Sterling's matching contribution is 35% of the employee's
contribution up to 8% of compensation. Additional amounts may
be contributed at the option of Sterling as a profit sharing
contribution. All Employer contributions, whether matching or
profit sharing, are made out of Sterling's current or
accumulated net profits and are invested in the Stock Fund.
Amounts contributed by both Sterling and the Participant shall
not exceed 25% of compensation paid to the participants during
the fiscal year or the maximum amount allowable as a tax
deduction by Sterling.
In April 1998, Sterling amended the Plan to allow for the
acceptance of employee contributions of amounts previously
contributed to another qualified plan, even prior to the date
the employee satisfies the Plan's eligibility requirements.
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
1. DESCRIPTION OF PLAN, CONTINUED:
INVESTMENT OPTIONS
Participant contributions are invested in separate funds as
designated by the individual participants. Participants may
elect to reallocate the amounts invested in each fund on the
first day of any calendar quarter during the year. The
separate investment funds are described below.
FIXED FUND
The objective of this fund is to maximize short-term income
while minimizing risk. The fund invests in Sterling
certificates of deposit, money market funds and cash. The
certificates of deposit and the cash are federally insured up
to $100,000 per participant. The interest rates on the
certificates of deposit are set each year on July 1.
BALANCED FUND
The object of this fund is to maximize long-term return
through a combination of market appreciation and income. The
fund invests in the American Balanced Fund, a mutual fund
which invests in stocks and bonds.
ALLOCATION FUND
The objective of this fund is to maximize long-term return
through a combination of market appreciation and income. The
fund invests in the Stagecoach Index Allocation Fund
(formerly known as the Overland Express Asset Allocation
Fund), a mutual fund which invests in stocks, bonds and money
market investments.
GROWTH AND INCOME FUND
The objective of this fund is to maximize long-term return
primarily through market appreciation. The fund invests in
The Putnam Fund for Growth and Income, a mutual fund which
invests primarily in common stocks of domestic corporations.
GROWTH FUND
The objective of this fund is to maximize long-term return
through market appreciation. The fund invests in the AIM
Value Fund, a mutual fund which invests in stocks,
convertible securities, bonds and other equity investments.
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
1. DESCRIPTION OF PLAN, CONTINUED:
INVESTMENT OPTIONS, CONTINUED
AGGRESSIVE GROWTH FUND
The objective of this fund is to maximize long-term return
through market appreciation. The fund invests in the John
Hancock Special Equities Fund which invests in emerging-
growth companies.
STOCK FUND
The objective of this fund is to achieve total return from
capital appreciation and dividend income through investment
in Sterling Financial Corporation (Sterling's parent company)
common stock.
PARTICIPANT ACCOUNTS
Separate accounts are maintained for each participant. Each
participant's account is credited with the participant's
contribution and an allocation of Sterling's contribution and
Plan earnings. Allocations of Sterling's contribution and Plan
earnings are based on participant account balances, as defined
in the Plan document. The participant's benefit is limited to
the benefit that has accumulated in the participant's account.
VESTING
A participant is 100% vested in all contributions, both
participant and Employer, at all times.
PAYMENT OF BENEFITS
Distributions are made upon termination, death, disability or
retirement. Participants or their beneficiaries will receive
payment of benefits as follows: (a) balances of $5,000 or less
will be distributed in a lump sum, or (b) balances greater than
$5,000 in various optional forms of distribution.
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the
acrual basis of accounting in accordance with generally
accepted accounting principles.
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
INVESTMENTS
The Plan's investments are stated at fair value. Certificates
of deposit are valued at cost which approximates fair value.
Mutual funds are valued at quoted market prices which represent
the value of shares held by the Plan at year end. Sterling
Financial Corporation common stock is valued at its quoted
market price.
The Plan presents in the statement of changes in net assets
available for benefits the net appreciation or depreciation in
the fair value of its investments which consists of the
realized gains or losses and the net unrealized appreciation or
depreciation on those investments.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
CASH AND CASH EQUIVALENTS
Cash equivalents are highly liquid instruments, primarily money
market funds, with a remaining maturity of three months or less
at the date of purchase.
ADMINISTRATIVE EXPENSES
Expenses for administration of the Plan are paid by Sterling.
BENEFIT PAYMENTS
Benefits are recorded when paid.
ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make significant estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of changes in net assets
during the reporting period. Actual results could differ from
those estimates.
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in
combinations of stocks, bonds, fixed income securities, mutual
funds and other investment securities. Investment securities
are exposed to various risks, such as interest rate, market and
credit. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to
changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the near term
would materially affect participants' account balances and the
amounts reported in the statements of net assets available for
benefits and the statement of changes in net assets available
for benefits.
3. INVESTMENTS:
The following table presents the fair value of investments,
including those that represent 5% or more of the Plan's net
assets.
Shares Fair
or Units Value
-------- -------
December 31, 1998:
Certificate of deposit - Sterling
Savings Bank, 5.60%, due July 1,
1999 $ 430,917
Mutual funds:
American Balanced Fund 8,871 139,800
Stagecoach Index Allocation Fund 31,108 588,560
The Putnam Fund for Growth and
Income 101,372 2,077,111
AIM Value Fund 29,131 1,170,762
John Hancock Special Equities
Fund 23,628 569,434
Common stock of Sterling Financial
Corporation 160,308 2,725,236
Cash and cash equivalents 76,475
----------
$7,778,295
==========
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
3. INVESTMENTS, CONTINUED:
Shares Fair
or Units Value
-------- -------
December 31, 1997:
Certificate of deposit - Sterling
Savings Bank, 6.00%, due July 1,
1998 $ 466,710
Mutual funds:
American Balanced Fund 8,949 140,317
Stagecoach Index Allocation Fund 23,517 364,748
The Putnam Fund for Growth and
Income 106,128 2,073,749
AIM Value Fund 25,231 817,986
John Hancock Special Equities
Fund 21,126 547,586
Common stock of Sterling Financial
Corporation 136,649 2,972,116
Cash and cash equivalents 54,208
----------
$7,437,420
==========
During the year ended December 31, 1998, the Plan's investments
(including realized and unrealized gains (losses)) appreciated
(depreciated) as follows:
Mutual funds:
American Balanced Fund $ 834
Stagecoach Index Allocation Fund 90,881
The Putnam Fund for Growth and Income 90,111
AIM Value Fund 214,720
John Hancock Special Equities Fund (34,875)
Common stock of Sterling Financial Corporation (821,611)
----------
$ (459,940)
==========
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
4. NET ASSETS AND CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY
FUND:
At December 31, 1998, the net assets available for benefits
by fund are as follows:
<TABLE>
<CAPTION>
Fixed Balanced Allocation Growth and Growth
Fund Fund Fund Income Fund Fund
---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Mutual funds $ 139,800 $ 588,560 $ 2,077,111 $1,170,762
Common stock of Sterling
Financial Corporation
Certificates of deposit $ 430,917
Cash and cash equivalents
---------- ---------- ---------- ----------- ----------
Receivables:
Employer contribution
Pending transfers 12 2,355 5,438 9,920 9,879
---------- ---------- ---------- ----------- ----------
Net assets available for benefits
at December 31, 1998 $ 430,929 $ 142,155 $ 593,998 $ 2,087,031 $1,180,641
========== ========== ========== =========== ==========
</TABLE>
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
4. NET ASSETS AND CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY
FUND, CONTINUED:
<TABLE>
<CAPTION>
Aggressive Cash and
Growth Cash
Fund Stock Fund Equivalents Total
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Investments, at fair value:
Mutual funds $ 569,434 $ 4,545,667
Common stock of Sterling
Financial Corporation $2,725,236 2,725,236
Certificates of deposit 430,917
Cash and cash equivalents $ 76,475 76,475
---------- ---------- ---------- -----------
569,434 2,725,236 76,475 7,778,295
Receivables:
Employer contribution 4,810 4,810
Pending transfers 6,069 47,612 (81,285) --
---------- ---------- ---------- -----------
Net assets available for benefits
at December 31, 1998 $ 575,503 $2,772,848 $ -- $ 7,783,105
========== ========== ========== ===========
</TABLE>
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
4. NET ASSETS AND CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY
FUND, CONTINUED:
At December 31, 1997, the net assets available for benefits by
fund are as follows:
<TABLE>
<CAPTION>
Fixed Balanced Allocation Growth and Growth
Fund Fund Fund Income Fund Fund
---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Mutual funds $ 140,317 $ 364,748 $ 2,073,749 $ 817,986
Common stock of Sterling
Financial Corporation
Certificates of deposit $ 466,710
Cash and cash equivalents
---------- ---------- ---------- ----------- ----------
466,710 140,317 364,748 2,073,749 817,986
Receivables:
Employer contribution
Pending transfers 19 1,234 3,719 12,381 6,556
---------- ---------- ---------- ----------- ----------
Net assets available for benefits
at December 31, 1997 $ 466,729 $ 141,551 $ 368,467 $ 2,086,130 $ 824,542
========== ========== ========== =========== ==========
</TABLE>
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
4. NET ASSETS AND CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY
FUND, CONTINUED:
<TABLE>
<CAPTION>
Aggressive Cash and
Growth Cash
Fund Stock Fund Equivalents Total
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Investments, at fair value:
Mutual funds $ 547,586 $ 3,944,386
Common stock of Sterling
Financial Corporation $2,972,116 2,972,116
Certificates of deposit 466,710
Cash and cash equivalents $ 54,208 54,208
---------- ---------- ---------- -----------
547,586 2,972,116 54,208 7,437,420
Receivables:
Employer contribution 1,378 1,378
Pending transfers 5,341 24,958 (54,208) --
---------- ---------- ---------- -----------
Net assets available for benefits
at December 31, 1997 $ 552,927 $2,998,452 $ -- $ 7,438,798
========== ========== ========== ===========
</TABLE>
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
4. NET ASSETS AND CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY
FUND, CONTINUED:
The changes in net assets available for benefits by fund for the
year ended December 31, 1998 are as follows:
<TABLE>
<CAPTION>
Fixed Balanced Allocation Growth and Growth
Fund Fund Fund Income Fund Fund
---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest $ 25,613 $ 45 $ 121 $ 565 $ 260
Dividends 11 14,072 21,029 195,597 73,495
Net appreciation (depreciation)
in fair value of investments 834 90,881 90,111 214,720
Contributions:
Participants 34,446 50,129 122,870 301,081 235,707
Employer
---------- ---------- ---------- ----------- ----------
Total additions (deductions) 60,070 65,080 234,901 587,354 524,182
Transfers (60,385) (38,871) 31,649 (203,767) (12,456)
Deductions to net assets attributed to:
Distributions and benefits paid to
participants 35,485 25,605 41,019 382,686 155,627
---------- ---------- ---------- ----------- ----------
Increase (decrease) in net assets
available for benefits (35,800) 604 225,531 901 356,099
Net assets available for benefits:
Beginning of year 466,729 141,551 368,467 2,086,130 824,542
---------- ---------- ---------- ----------- ----------
End of year $ 430,929 $ 142,155 $ 593,998 $ 2,087,031 $1,180,641
========== ========== ========== =========== ==========
</TABLE>
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
4. NET ASSETS AND CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY
FUND, CONTINUED:
<TABLE>
<CAPTION>
Aggressive
Growth
Fund Stock Fund Total
---------- ---------- -----------
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest $ 159 $ 931 $ 27,694
Dividends 8,391 248 312,843
Net appreciation (depreciation)
in fair value of investments (34,875) (821,611) (459,940)
Contributions:
Participants 154,176 407,032 1,305,441
Employer 363,632 363,632
---------- ---------- ----------
Total additions (deductions) 127,851 (49,768) 1,549,670
Transfers (43,347) 327,177 --
Deductions to net assets attributed to:
Distributions and benefits paid to
participants 61,928 503,013 1,205,363
---------- ---------- ----------
Increase (decrease) in net assets
available for benefits 22,576 (225,604) 344,307
Net assets available for benefits:
Beginning of year 552,927 2,998,452 7,438,798
---------- ---------- ----------
End of year $ 575,503 $2,772,848 $7,783,105
========== ========== ==========
</TABLE>
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
for the Year Ended December 31, 1998
5. PLAN TERMINATION:
Although it has not expressed an intent to do so, Sterling has
the right to discontinue its contributions to the Plan at any
time and to terminate the Plan subject to the provisions of
ERISA.
6. TAX STATUS:
The Internal Revenue Service has determined and informed Sterling
by a letter dated October 20, 1995 that the Plan was designed in
accordance with applicable sections of the Internal Revenue Code
(the "Code"), as amended. The Plan has been amended since
receiving the determination letter. However, the Plan
administrator believes that the Plan is designed and is being
operated in compliance with the applicable requirements of the
Code.
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
at December 31, 1998
<TABLE>
<CAPTION>
Description of Investment, Including
Identity of Issuer, Borrower, Maturity Date, Rate of Interest, Current
Lessor or Similar Party Collateral, Par or Maturity Value Cost Value
------------------------------ ------------------------------------ ---------- ----------
<S> <C> <C> <C>
Sterling Savings Bank Certificate of deposit, due
July 1, 1999, interest at 5.60% $ 430,917 $ 430,917
Sterling Financial Corporation Common stock, 160,308 shares 2,254,748 2,725,236
AIM Value Fund Mutual fund, 29,131 shares 909,840 1,170,762
John Hancock Special Equities
Fund Mutual fund, 23,628 shares 564,980 569,434
Stagecoach Index Allocation
Fund Mutual fund, 31,108 shares 485,921 588,560
The Putnam Fund for Growth
and Income Mutual fund, 101,372 shares 1,845,615 2,077,111
American Balanced Fund Mutual fund, 8,871 shares 145,009 139,800
Merrill Lynch Cash Management
Account Short-term money market fund 1,093 1,093
Cash Cash 75,382 75,382
---------- ----------
$6,713,505 $7,778,295
========== ==========
</TABLE>
<PAGE>
Sterling Savings Bank
Employee Savings and Investment Plan
Line 27d - Schedule of Reportable Transactions
for the year ended December 31, 1998
<TABLE>
<CAPTION>
(f)Expenses
(b)Description of Asset Incurred
(a)Identify of (Include interest rate and (c)Purchase (d)Selling (e)Lease with (g)Cost
Party Involved maturity in case of a loan) Price Price Rental Transaction of Asset
--------------- --------------------------------- ----------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Merrill Lynch
Cash Manage- Short-term money market fund $2,054,337 $2,054,337
ment Number of transactions 59
Merrill Lynch
Cash Manage- Short-term money market fund $2,057,079 2,057,079
ment Number of transactions 41
Sterling
Financial Common stock 1,082,421 1,082,421
Corporation Number of transactions 42
Sterling
Financial Common stock 507,699 363,693
Corporation Number of transactions 9
The Putnam Fund
for Growth and Mutual fund 504,988 504,988
Income Number of transactions 35
The Putnam Fund
for Growth and Mutual fund 591,737 523,381
Income Number of transactions 14
AIM Value Fund Mutual fund 333,520 333,520
Number of transactions 38
AIM Value Fund Mutual Fund 195,465 159,780
Number of transactions 11
</TABLE>
<PAGE>
STERLING SAVINGS BANK
EMPLOYEE SAVINGS AND INVESTMENT PLAN
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS, CONTINUED
for the year ended December 31, 1998
<TABLE>
<CAPTION>
(h)Current
Value of
(b)Description of Asset Asset on (i)Net
(a)Identify of (Include interest rate and Transaction Gain or
Party Involved maturity in case of a loan) Date (Loss)
--------------- --------------------------------- ----------- -----------
<S> <C> <C> <C>
Merrill Lynch
Cash Manage- Short-term money market fund $2,054,337
ment Number of transactions
Merrill Lynch
Cash Manage- Short-term money market fund 2,057,079
ment Number of transactions
Sterling
Financial Common stock 1,082,421
Corporation Number of transactions
Sterling
Financial Common stock 507,699 $ 144,006
Corporation Number of transactions
The Putnam Fund
for Growth and Mutual fund 504,988
Income Number of transactions
The Putnam Fund
for Growth and Mutual fund 591,737 68,356
Income Number of transactions
AIM Value Fund Mutual fund 333,520
Number of transactions
AIM Value Fund Mutual Fund 35,685
Number of transactions
</TABLE>
<PAGE>
