EXHIBIT 12.1

STERLING FINANCIAL CORPORATION

COMPUTATION OF RETURN ON AVERAGE COMMON SHAREHOLDERS EQUITY

For the Year Ended December 31, 2008



|           |  |                      |  |                |  |                     
|---------- |  | -------------------- |  | -------------- |  | --------------------
|Date       |  | Shareholders Equity |  | Number of Days |  | YTD Weighted Average
|01/01/2008 |  | 1,183,276,071        |  | 1              |  | 1,183,276,071       
|01/09/2008 |  | 1,183,276,269        |  | 8              |  | 9,466,210,151       
|01/10/2008 |  | 1,183,341,017        |  | 1              |  | 1,183,341,017       
|01/11/2008 |  | 1,183,486,064        |  | 4              |  | 4,733,944,255       
|01/15/2008 |  | 1,191,248,285        |  | 1              |  | 1,191,248,285       
|01/16/2008 |  | 1,191,248,947        |  | 9              |  | 10,721,240,523      
|01/25/2008 |  | 1,191,341,237        |  | 6              |  | 7,148,047,422       
|01/31/2008 |  | 1,191,481,918        |  | 1              |  | 1,191,481,918       
|02/01/2008 |  | 1,192,309,442        |  | 1              |  | 1,192,309,442       
|02/02/2008 |  | 1,192,327,163        |  | 4              |  | 4,769,308,650       
|02/06/2008 |  | 1,192,329,285        |  | 2              |  | 2,384,658,570       
|02/08/2008 |  | 1,192,462,037        |  | 3              |  | 3,577,386,111       
|02/11/2008 |  | 1,192,495,457        |  | 2              |  | 2,384,990,914       
|02/13/2008 |  | 1,192,495,898        |  | 2              |  | 2,384,991,796       
|02/15/2008 |  | 1,199,652,249        |  | 5              |  | 5,998,261,244       
|02/20/2008 |  | 1,199,652,283        |  | 2              |  | 2,399,304,566       
|02/22/2008 |  | 1,199,811,195        |  | 5              |  | 5,999,055,974       
|02/27/2008 |  | 1,199,814,063        |  | 2              |  | 2,399,628,126       
|02/29/2008 |  | 1,200,043,843        |  | 1              |  | 1,200,043,843       
|03/01/2008 |  | 1,200,043,843        |  | 4              |  | 4,800,175,371       
|03/05/2008 |  | 1,200,044,343        |  | 2              |  | 2,400,088,686       
|03/07/2008 |  | 1,200,128,662        |  | 5              |  | 6,000,643,311       
|03/12/2008 |  | 1,200,129,449        |  | 1              |  | 1,200,129,449       
|03/13/2008 |  | 1,200,169,201        |  | 1              |  | 1,200,169,201       
|03/14/2008 |  | 1,200,202,998        |  | 1              |  | 1,200,202,998       
|03/15/2008 |  | 1,188,221,765        |  | 4              |  | 4,752,887,058       
|03/19/2008 |  | 1,188,222,647        |  | 2              |  | 2,376,445,293       
|03/21/2008 |  | 1,188,311,048        |  | 10             |  | 11,883,110,482      
|03/31/2008 |  | 1,191,385,738        |  | 1              |  | 1,191,385,738       
|04/01/2008 |  | 1,191,385,738        |  | 1              |  | 1,191,385,738       
|04/02/2008 |  | 1,191,387,249        |  | 2              |  | 2,382,774,498       
|04/04/2008 |  | 1,191,473,185        |  | 5              |  | 5,957,365,924       
|04/09/2008 |  | 1,191,478,930        |  | 2              |  | 2,382,957,861       
|04/11/2008 |  | 1,191,507,034        |  | 4              |  | 4,766,028,136       
|04/15/2008 |  | 1,201,269,148        |  | 3              |  | 3,603,807,443       
|04/18/2008 |  | 1,201,363,385        |  | 7              |  | 8,409,543,698       
|04/25/2008 |  | 1,201,377,355        |  | 4              |  | 4,805,509,419       
|04/29/2008 |  | 1,201,393,247        |  | 1              |  | 1,201,393,247       
|04/30/2008 |  | 1,196,435,693        |  | 1              |  | 1,196,435,693       
|05/01/2008 |  | 1,196,435,693        |  | 1              |  | 1,196,435,693       
|05/02/2008 |  | 1,196,519,999        |  | 5              |  | 5,982,599,995       
|05/07/2008 |  | 1,196,782,451        |  | 5              |  | 5,983,912,256       
|05/12/2008 |  | 1,196,856,431        |  | 2              |  | 2,393,712,862       
|05/14/2008 |  | 1,196,881,692        |  | 1              |  | 1,196,881,692       
|05/15/2008 |  | 1,205,524,353        |  | 1              |  | 1,205,524,353       
|05/16/2008 |  | 1,205,617,607        |  | 5              |  | 6,028,088,033       
|05/21/2008 |  | 1,205,618,711        |  | 9              |  | 10,850,568,398      
|05/30/2008 |  | 1,205,934,506        |  | 2              |  | 2,411,869,013       
|06/01/2008 |  | 1,205,934,506        |  | 3              |  | 3,617,803,519       
|06/04/2008 |  | 1,205,935,005        |  | 7              |  | 8,441,545,034       
|06/11/2008 |  | 1,205,936,513        |  | 2              |  | 2,411,873,027       
|06/13/2008 |  | 1,206,041,669        |  | 2              |  | 2,412,083,339       
|06/15/2008 |  | 1,199,366,960        |  | 3              |  | 3,598,100,881       
|06/18/2008 |  | 1,199,367,508        |  | 9              |  | 10,794,307,576      
|06/27/2008 |  | 1,199,456,524        |  | 3              |  | 3,598,369,573       
|06/30/2008 |  | 1,178,184,114        |  | 1              |  | 1,178,184,114       



---

EXHIBIT 12.1, Continued



|                                                  |  |                      |               |                |  |                      |                 | 
|------------------------------------------------- |  | -------------------- | ------------- | -------------- |  | -------------------- | --------------- | 
|Date                                              |  | Shareholders Equity |               | Number of Days |  | YTD Weighted Average |                
|07/01/2008                                        |  | 1,178,184,114        |               | 1              |  |                      | 1,178,184,114   | 
|07/02/2008                                        |  | 1,178,184,262        |               | 7              |  |                      | 8,247,289,836   | 
|07/09/2008                                        |  | 1,178,184,630        |               | 2              |  |                      | 2,356,369,261   | 
|07/11/2008                                        |  | 1,178,292,858        |               | 4              |  |                      | 4,713,171,433   | 
|07/15/2008                                        |  | 1,181,576,337        |               | 1              |  |                      | 1,181,576,337   | 
|07/16/2008                                        |  | 1,181,579,464        |               | 7              |  |                      | 8,271,056,250   | 
|07/23/2008                                        |  | 1,181,595,557        |               | 2              |  |                      | 2,363,191,115   | 
|07/25/2008                                        |  | 1,181,684,195        |               | 5              |  |                      | 5,908,420,975   | 
|07/30/2008                                        |  | 1,181,696,379        |               | 1              |  |                      | 1,181,696,379   | 
|07/31/2008                                        |  | 1,176,718,155        |               | 1              |  |                      | 1,176,718,155   | 
|08/01/2008                                        |  | 1,176,718,155        |               | 5              |  |                      | 5,883,590,774   | 
|08/06/2008                                        |  | 1,176,724,278        |               | 2              |  |                      | 2,353,448,555   | 
|08/08/2008                                        |  | 1,176,808,539        |               | 5              |  |                      | 5,884,042,694   | 
|08/13/2008                                        |  | 1,176,809,332        |               | 2              |  |                      | 2,353,618,664   | 
|08/15/2008                                        |  | 1,180,498,088        |               | 5              |  |                      | 5,902,490,438   | 
|08/20/2008                                        |  | 1,180,500,183        |               | 7              |  |                      | 8,263,501,280   | 
|08/27/2008                                        |  | 1,180,500,211        |               | 1              |  |                      | 1,180,500,211   | 
|08/28/2008                                        |  | 1,180,694,737        |               | 1              |  |                      | 1,180,694,737   | 
|08/29/2008                                        |  | 1,180,714,822        |               | 3              |  |                      | 3,542,144,466   | 
|09/01/2008                                        |  | 1,180,714,822        |               | 2              |  |                      | 2,361,429,644   | 
|09/03/2008                                        |  | 1,180,715,028        |               | 5              |  |                      | 5,903,575,142   | 
|09/08/2008                                        |  | 1,180,774,217        |               | 2              |  |                      | 2,361,548,434   | 
|09/10/2008                                        |  | 1,180,781,287        |               | 5              |  |                      | 5,903,906,437   | 
|09/15/2008                                        |  | 1,178,854,649        |               | 2              |  |                      | 2,357,709,299   | 
|09/17/2008                                        |  | 1,178,854,992        |               | 12             |  |                      | 14,146,259,906  | 
|09/29/2008                                        |  | 1,180,426,750        |               | 2              |  |                      | 2,360,853,500   | 
|10/01/2008                                        |  | 1,180,426,860        |               | 7              |  |                      | 8,262,988,018   | 
|10/08/2008                                        |  | 1,180,428,085        |               | 2              |  |                      | 2,360,856,170   | 
|10/10/2008                                        |  | 1,180,459,544        |               | 5              |  |                      | 5,902,297,722   | 
|10/15/2008                                        |  | 1,168,149,577        |               | 7              |  |                      | 8,177,047,042   | 
|10/22/2008                                        |  | 1,168,149,682        |               | 2              |  |                      | 2,336,299,363   | 
|10/24/2008                                        |  | 1,168,149,682        |               | 5              |  |                      | 5,840,748,408   | 
|10/29/2008                                        |  | 1,168,150,392        |               | 2              |  |                      | 2,336,300,784   | 
|10/31/2008                                        |  | 1,168,293,704        |               | 1              |  |                      | 1,168,293,704   | 
|11/01/2008                                        |  | 1,168,293,704        |               | 4              |  |                      | 4,673,174,815   | 
|11/05/2008                                        |  | 1,168,293,805        |               | 7              |  |                      | 8,178,056,637   | 
|11/12/2008                                        |  | 1,168,294,171        |               | 3              |  |                      | 3,504,882,514   | 
|11/15/2008                                        |  | 1,158,653,370        |               | 4              |  |                      | 4,634,613,481   | 
|11/19/2008                                        |  | 1,158,653,470        |               | 6              |  |                      | 6,951,920,821   | 
|11/25/2008                                        |  | 1,158,874,230        |               | 1              |  |                      | 1,158,874,230   | 
|11/26/2008                                        |  | 1,158,874,551        |               | 4              |  |                      | 4,635,498,206   | 
|11/30/2008                                        |  | 1,158,927,539        |               | 1              |  |                      | 1,158,927,539   | 
|12/01/2008                                        |  | 1,158,927,539        |               | 4              |  |                      | 4,635,710,156   | 
|12/05/2009                                        |  | 1,170,118,539        |               | 5              |  |                      | 5,850,592,695   | 
|12/10/2008                                        |  | 1,170,118,802        |               | 5              |  |                      | 5,850,594,009   | 
|12/15/2008                                        |  | 836,986,417          |               | 2              |  |                      | 1,673,972,834   | 
|12/17/2008                                        |  | 836,986,680          |               | 14             |  |                      | 11,717,813,515  | 
|12/31/2008                                        |  | 849,070,922          |               | 1              |  |                      | 849,070,922     | 
|preferred                                         |  | 291,964,000          |               |                |  |                      |                 | 
|                                                  |  |                      |               |                |  |                      |                 | 
|total equity                                      |  | 1,141,034,922        |               |                |  |                      |                 | 
|                                                  |  |                      |               |                |  |                      |                 | 
|Cumulative total                                  |  |                      |               | 366            |  |                      | 428,088,549,101 | 
|                                                  |  |                      |               |                |  |                      |                 | 
|Divide by number of days                          |  |                      |               |                |  |                      | 366             | 
|                                                  |  |                      |               |                |  |                      |                 | 
|Average common shareholders equity               |  |                      | 1,169,640,845 |               
|                                                  |  |                      |               |                |  |                      |                 | 
|Net income available to common shares outstanding |  | $                    | (336,742,000  | )             
|Return on average common shareholders equity     |  |                      | -28.8%        |