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SPOKANE, Wash. and REDDING, Calif., Aug. 1 /PRNewswire-FirstCall/ --Sterling Financial Corporation ("Sterling") (Nasdaq: STSA) and North ValleyBancorp ("North Valley") (Nasdaq: NOVB) today announced that at a specialmeeting of shareholders held on July 31, 2007, the shareholders of NorthValley approved the principal terms of an Agreement and Plan of Merger,dated April 10, 2007, by and between Sterling and North Valley, includingthe proposed merger of North Valley with and into Sterling. Consummation ofthe transactions contemplated by the Agreement and Plan of Merger remainssubject to the satisfaction of certain additional closing conditions,including the receipt of all necessary regulatory approvals. Applicationsfor such approvals have been submitted and are currently pending. Atpresent, Sterling and North Valley expect the closing to occur during thethird quarter, ending September 30, 2007. North Valley common stock willcease trading on the NASDAQ Global Market on the merger closing date. ABOUT STERLING Sterling Financial Corporation of Spokane, Washington, is a bankholding company, of which the principal operating subsidiaries are SterlingSavings Bank and Golf Savings Bank. Sterling Savings Bank is a WashingtonState-chartered, federally insured commercial bank, which opened in April1983 as a stock savings and loan association. Sterling Savings Bank, basedin Spokane, Washington, has financial service centers throughoutWashington, California, Oregon, Idaho and Montana. Through Sterling SavingsBank's wholly owned subsidiaries, Action Mortgage Company andINTERVEST-Mortgage Investment Company, it operates loan production officesthroughout the western region. Sterling Savings Bank's subsidiary HarborFinancial Services provides non-bank investments, including mutual funds,variable annuities and tax-deferred annuities and other investment productsthrough regional representatives throughout Sterling Savings Bank's branchnetwork. Golf Savings Bank is a Washington State-chartered and FDIC insuredsavings bank. Golf Savings Bank's primary focus is the origination ofsingle-family residential mortgage loans. ABOUT NORTH VALLEY Founded in 1972, North Valley is a bank holding company headquarteredin Redding, California. Its subsidiary, North Valley Bank ("NVB"), operates26 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 BankingCenters. North Valley, through NVB, offers a wide range of consumer andbusiness banking deposit products and services including Internet bankingand cash management services. In addition to these depository services, NVBengages in a full complement of lending activities including consumer,commercial and real estate loans. Additionally, NVB has SBA PreferredLender status and provides investment services to its customers. ADDITIONAL INFORMATION ABOUT THE PENDING MERGER AND WHERE TO FIND IT Sterling filed a registration statement on Form S-4 with the Securitiesand Exchange Commission (the "SEC") which became effective on June 22,2007, and on June 29, 2007, North Valley mailed a proxystatement/prospectus to its shareholders containing information about theproposed merger of North Valley with and into Sterling. Investors andsecurity holders of Sterling and North Valley are urged to read the proxystatement/prospectus and other relevant materials filed with the SECbecause they contain important information about Sterling, North Valley andthe proposed merger. In addition to the registration statement filed bySterling and the proxy statement/prospectus mailed to the North Valleyshareholders, Sterling and North Valley file annual, quarterly and currentreports, proxy statements and other information with the SEC. Investors andsecurity holders may obtain a free copy of the documents filed with the SECat its website at http://www.sec.gov. These documents may also be obtainedfree of charge from Sterling by requesting them in writing at SterlingFinancial Corporation, 111 North Wall Street, Spokane, WA 99201, or bytelephone at (509) 227-5389. In addition, investors and security holdersmay access copies of the documents filed with the SEC by Sterling on itswebsite at http://www.sterlingfinancialcorporation-spokane.com. Thedocuments filed by North Valley may also be obtained by requesting them inwriting at North Valley Bancorp, 300 Park Marina Circle, Redding,California 96001, or by telephone at (530) 226-2900. In addition, investorsand security holders may access copies of the documents filed with the SECby North Valley on its website at http://www.novb.com. FORWARD-LOOKING STATEMENTS This report contains forward-looking statements, which are nothistorical facts and pertain to future operating results of Sterling andNorth Valley. These forward-looking statements are within the meaning ofthe Private Securities Litigation Reform Act of 1995 and may include, butare not limited to, statements about plans, objectives, expectations andintentions and other statements contained in this report that are nothistorical facts. When used in this report, the words "expects,""anticipates," "intends," "plans," "believes," "seeks," "estimates" andsimilar expressions are generally intended to identify forward-lookingstatements. These forward-looking statements are inherently subject tosignificant business, economic and competitive uncertainties andcontingencies, many of which are beyond the control of Sterling or NorthValley. In addition, these forward-looking statements are subject toassumptions with respect to future business strategies and decisions thatare subject to change. Actual results may differ materially from theresults discussed in these forward-looking statements because of numerouspossible risks and uncertainties. These include but are not limited to: thepossibility of adverse economic developments that may, among other things,increase default and delinquency risks in loan portfolios; shifts ininterest rates that may result in lower interest rate margins; shifts inthe demand for loan and other products; lower-than-expected revenue or costsavings in connection with acquisitions; changes in accounting policies;changes in the monetary and fiscal policies of the federal government; andchanges in laws, regulations and the competitive environment. Sterling Contacts: Sterling Financial Corporation Harold B. Gilkey Chairman and Chief Executive Officer 509-354-8186 Daniel G. Byrne EVP and Chief Financial Officer 509-458-3711 Media Contact: Jennifer Lutz Public Relations Administrator 509-368-2032 North Valley Contacts: North Valley Bancorp Michael J. Cushman President and Chief Executive Officer 530-226-2900 Kevin R. Watson EVP and Chief Financial Officer 530-226-2900
