1279410--2/27/2006--PLACER_SIERRA

related topics

{loan, real, estate}

{personnel, key, retain}

{acquisition, growth, future}

{loss, insurance, financial}

{operation, natural, condition}

{competitive, industry, competition}

{system, service, information}

{stock, price, share}

{control, financial, internal}

{provision, law, control}

{condition, economic, financial}

{tax, income, asset}

{cost, operation, labor}

Changes in economic conditions could materially hurt our business. Our growth and expansion may strain our ability to manage our operations and our financial resources. We face risks associated with acquisitions relating to difficulties in integrating combined operations, potential disruption of operations and related negative impact on earnings, and incurrence of substantial expenses. We are dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects. Our balance sheet is asset sensitive. Our business is subject to interest rate risk and variations in interest rates may negatively affect our financial performance. The types of loans in our portfolio have a higher degree of risk and a downturn in our real estate markets could hurt our business. If we cannot attract deposits, our growth may be inhibited. Our allowance for loan and lease losses may not be adequate to cover actual losses. We rely on communications, information, operating and financial control systems technology from third-party service providers, and we may suffer an interruption in those systems that may result in lost business and we may not be able to obtain substitute providers on terms that are as favorable if our relationships with our existing service providers are interrupted. We face strong competition from financial service companies and other companies that offer banking services which could hurt our business. Our future ability to pay dividends is subject to restrictions. As a result, capital appreciation, if any, of our common stock may be your sole source of gains in the future. If we fail to maintain effective systems of internal and disclosure control, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our securities. Anti-takeover provisions and federal law may limit the ability of another party to acquire us, which could cause our stock price to decline. Placer Sierra Bancshares and the bank are subject to extensive government regulation. These regulations may hamper our ability to increase assets and earnings, and could result in a decrease in the value of your shares. We are exposed to risk of environmental liabilities with respect to properties to which we take title.

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1279410--2/27/2006--PLACER_SIERRA_BANCSHARES