Northern Empire Bancshares Announces Earnings for Third Quarter 2004

Northern Empire Bancshares Announces Earnings for Third Quarter
2004 


SANTA ROSA, Calif., Oct. 18  /PRNewswire-FirstCall/ -- Northern Empire
Bancshares (OTC:NREB) (BULLETIN BOARD: NREB) , the financial holding company of
Sonoma National Bank ("Bank"), reported consolidated income of $3,611,000 for
the third quarter of 2004 compared to $3,020,000 for the third quarter of last
year, an increase of 19.6%.  Return on average assets equaled 1.5% and the
return on average equity equaled 17.8% for the third quarter.  Net income for
the first nine months of 2004 totaling $10,841,000 grew 32.0% when compared to
the first nine months of 2003 net income of $8,211,000.

Increased earnings resulted from growth in earning assets, mainly loans. Loans
grew 30.0% to $879,251,000 at September 30, 2004 compared to $676,237,000 at
September 30, 2003.  The allowance for loan losses was increased to $8,194,000
through provision of $475,000 during the third quarter of 2004 in recognition
of the loan growth.  Non-performing loans for the third quarter of 2004 were
.059% of total loans.

Operating expenses of $4,356,000 increased 20.6% from $3,612,000 when compared
to the third quarter of 2003.  The majority of the increase in expenses for the
third quarter can be attributed to growth of the Bank. Staffing levels, while
stable during the third quarter of 2004, reflect the staff recruited since
September of last year for growth in loan processing, deposits and operations. 
Expenses relating to the new Loan Department and expansion of the Operations
Center are now reflected in the Bank's occupancy expenses.  These facilities
will provide additional space for future expansion.  The Bank opened its 8th
branch in San Rafael, the first branch outside of Sonoma County, on July 28,
2004.  In September 2004, the Comptroller of the Currency approved a Walnut
Creek branch application scheduled to open in the first quarter of 2005.

The Bank hired an independent consulting firm to test the internal controls and
procedures which are required by new SEC regulations.  The Bank's efficiency
ratio equaled 39.8% for the third quarter for 2004, compared to 41.4% for the
same period in 2003.

Total assets at September 30, 2004 grew 32.3% to $1,028,104,000 from
$776,999,000 at September 30, 2003.  The majority of asset growth was funded
through increased deposits which grew 23.1% to $777,875,000 at September 30,
2004 from $631,777,000 at September 30, 2003.  Asset growth was also funded by
advances from the San Francisco Federal Home Loan Bank.  FHLB advances
increased to $161,921,000 at September 30, 2004 compared to $79,219,000 on
September 30, 2003.  The Bank is well capitalized with total capital to
risk-weighted assets equaling 11.3% on September 30, 2004.

Except for historical information contained herein, the statements contained in
this press release are forward-looking statements within the meaning of the
"safe harbor" provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 
These forward-looking statements are subject to risks and uncertainties. 
Actual results may differ materially from those set forth in or implied by
forward-looking statements.  These risks are described from time to time in
Northern Empire Bancshares' Securities and Exchange Commission filings,
including its annual reports on Form 10-K and quarterly reports on Form 10-Q. 
Northern Empire Bancshares disclaims any intent or obligation to update these
forward-looking statements.

  Financial Information as of September 30, 2004 (unaudited)

  Assets:           $1,028,104,000    Deposits:              $777,875,000


Equity:           $82,656,000       Book Value: $8.36

  Return on Equity: 17.8%             Return on Assets:       1.5%
  Efficiency Ratio: 39.8%             Non-Performing Loans:   0.06%


  Financial Information as of September 30, 2003 (unaudited)

  Assets:           $776,999,000      Deposits:              $631,777,000


Equity:           $62,053,000       Book Value: $6.71

  Return on Equity: 19.6%             Return on Assets:       1.6%
  Efficiency Ratio: 41.4%             Non-Performing Loans:   0.09%


                Visit the NREB Website at: http://www.snbank.com/

DATASOURCE: Northern Empire Bancshares



CONTACT:  Dave Bonaccorso of Hoefer & Arnett, [phone], or Fred

Ptucha of BrooksStreet Securities, [phone]; or Stephen Eddy of First

Security Van Kasper, [phone], or Douglas Brinker of SmithBarney,

[phone], all for Northern Empire Bancshares



Web site:  http://www.snbank.com/ 

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