EXHIBIT 99.1
               Contacts: Kermit K. Houser               Marshall J. Alexander
                         President and CEO              Executive VP and CFO
                         (541) 882-3444 X7133           (541) 882-3444 X7120

                                               News Release
================================================================================
     KLAMATH FIRST BANCORP, INC. ANNOUNCES THE SUCCESSFUL COMPLETION OF THE
                             SALE OF SEVEN BRANCHES
                          TO THE BANK OF EASTERN OREGON

KLAMATH FALLS, OREGON - December 15, 2003 - Klamath First Bancorp, Inc. (Nasdaq:
KFBI) announced  today that as of the close of business on Friday,  December 12,
2003,  its  wholly-owned  subsidiary  Klamath  First  Federal  Savings  and Loan
Association  successfully  completed  the  sale of  seven  branches  located  in
northeastern  Oregon  to the Bank of  Eastern  Oregon.  The seven  branches  are
located in the towns of Burns, Condon,  Fossil,  Heppner, John Day, Prairie City
and Moro. The sale included deposit accounts of approximately $65 million, which
will nearly double the size of the Bank of Eastern  Oregon's six  branches,  and
its $78 million in total  assets.  The fixed  assets and branch  locations  were
included in the sale.

Kermit K.  Houser,  President  and Chief  Executive  Officer  of  Klamath  First
Bancorp,  commented,  "The  successful  completion of the sale just prior to the
proposed merger with Sterling Financial Corporation (Nasdaq:  STSA) was critical
to improve the  operating  efficiency  for Sterling and it was important to both
customers and employees at these branches to experience only one  organizational
change rather than two over a short period of time."

As previously announced, Klamath First Bancorp is party to an Agreement and Plan
of Merger dated July 14, 2003 pursuant to which Klamath First Bancorp will merge
with  and  into  Sterling  Financial   Corporation.   The  merger  is  currently
anticipated to be completed in early January 2004.  Sterling was apprised of and
concurred in the sale of Klamath First Federal's seven branches.

About Klamath First Bancorp, Inc.

Klamath  First  Bancorp,  Inc. is the holding  company for Klamath First Federal
Savings and Loan  Association,  which operates 52 offices  throughout Oregon and
two in-store branches in South Central Washington.  Klamath First Federal serves
the state of Oregon  through  these offices by offering a full range of products
and services for both the consumer and business customer,  including commercial,
consumer and real estate loans,  various checking and savings products,  24-hour
telephone  banking,  and  online  banking  with  bill pay  through  its web site
www.KlamathFirst.com. Customers have access to brokerage and investment services
through Klamath First Bancorp's  subsidiary,  Klamath First Financial  Services.
Additionally,  customers  may visit new  in-store  branches six days a week with
extended banking hours.


FORWARD-LOOKING STATEMENTS


This press release contains forward-looking statements within the meaning of the
Private  Securities   Litigation  Reform  Act  of  1995.  These  forward-looking
statements  include,  but are not limited to,  statements about (i) the proposed
merger between Sterling Financial  Corporation and Klamath First Bancorp,  Inc.;
(ii) Klamath First Bancorp's plans, objectives,  expectations and intentions and
other statements  contained in this  presentation that are not historical facts;
and (iii) other statements identified by words such as "expects," "anticipates,"
"intends,"  "plans,"  "believes,"  "seeks,"  "estimates,"  or words  of  similar
meaning  generally  intended  to  identify  forward-looking  statements.   These
forward-looking  statements are based upon the current beliefs and  expectations
of the management of Klamath and are inherently subject to significant business,
economic and  competitive  uncertainties  and  contingencies,  many of which are
beyond our control. 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  anticipated
results  discussed  in these  forward-looking  statements  because  of  numerous
possible uncertainties.

The  following  factors,  among  others,  could cause  actual  results to differ
materially from the anticipated  results or other expectations  expressed in the
forward-looking  statements (1) governmental  approvals of the merger may not be
obtained,  or adverse  regulatory  conditions may be imposed in connection  with
governmental  approvals of the merger;  (2) the  shareholders  of Klamath  First
Bancorp or  Sterling  may fail to approve  the  merger;  (3) changes in interest
rates;  (4) changes in tax laws; (5) changes in general  economic  conditions or
(6) changes in the  securities  markets.  Additional  factors,  that could cause
actual results to differ materially from those expressed in the  forward-looking
statements are discussed in Sterling's and Klamath First Bancorp's reports (such
as Annual  Reports on Form  10-K,  Quarterly  Reports  on Form 10-Q and  Current
Reports on Form 8-K) filed with the Securities and Exchange  Commission ("SEC"),
which are  available on the SEC's  Internet site  (http://www.sec.gov).  Klamath
First Bancorp.  disclaims any obligation to publicly  announce  future events or
developments that may affect the forward-looking statements herein.



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Note:  Transmitted on BusinessWire at  1:30 pm PDT, December 15, 2003.