891106--3/15/2006--STERLING_FINANCIAL_CORP

related topics

{loan, real, estate}

{personnel, key, retain}

{system, service, information}

{acquisition, growth, future}

{condition, economic, financial}

{loss, insurance, financial}

{regulation, change, law}

{competitive, industry, competition}

{control, financial, internal}

Sterling s loan originations are highly concentrated in certain types of loans. Sterling s earnings are significantly affected by the fiscal and monetary policies of the federal government and the governments of the states in which it operates. Changes in market interest rates could adversely affect Sterling s earnings. Sterling s cost of funds may increase as a result of general economic conditions, interest rates or competitive pressures. Competition may adversely affect Sterling s ability to attract and retain customers at current levels. Sterling may not be able to successfully implement its internal growth strategy. There are risks associated with potential acquisitions. Sterling may not be able to replace key members of management or attract and retain qualified relationship managers in the future. Defaults may negatively impact Sterling s business. The allowance for loan losses may be inadequate. Sterling is expanding its lending activities in riskier areas. Sterling operations could be interrupted if its third-party service providers experience difficulty, terminate their services or fail to comply with banking regulations. Sterling s internal control systems could fail to detect certain events. The network and computer systems on which Sterling depends could fail or experience a security breach. Sterling could be held responsible for environmental liabilities of properties acquired through foreclosure. Sterling s banking business is highly regulated.

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891106--3/15/2006--STERLING_FINANCIAL_CORP_/WA/