892449--3/31/2008--VENTURE_FINANCIAL_GROUP

related topics

{loan, real, estate}

{acquisition, growth, future}

{system, service, information}

{condition, economic, financial}

{competitive, industry, competition}

{loss, insurance, financial}

{product, market, service}

{personnel, key, retain}

{control, financial, internal}

{regulation, change, law}

{cost, operation, labor}

We have a significant concentration in real estate loans and a downturn in the Puget Sound economy or real estate market could significantly hurt our business and our prospects for growth Construction lending involves special risks not associated with other types of lending. Our ability to grow depends upon our ability to increase our deposits and fund our lending activities. Our ability to successfully transition executive management is critical to our future prospects. We may grow through acquisitions, which strategy introduces risks of successfully integrating and managing acquisitions. We may not be able to control costs or generate revenue as we open new financial centers. Rapid growth could strain our resources, systems and controls, which could adversely affect business and operations. Our business and financial condition may be adversely affected by competition. Our allowance for credit losses may not be adequate to cover actual loan losses. If we need additional capital in the future to continue our growth, we may not be able to obtain it on terms that are favorable or be able to obtain it at all. An interruption in or breach in security of our systems may result in a loss of business. If our internal controls over financial reporting do not comply with the requirements of the Sarbanes-Oxley Act, our business could be adversely affected. RISKS RELATED TO THE BANKING INDUSTRY Changes in interest rates may affect our profitability. We are subject to extensive government regulation and supervision, and regulatory changes may adversely affect us. Recent supervisory guidance on commercial real estate concentrations could restrict our activities and impose financial requirements or limitations on the conduct of our business. Real estate properties securing our loans are subject to a variety of environmental laws that can diminish the value of our collateral or a borrower s ability to repay a loan. We are exposed to risk of environmental liabilities with respect to properties to which we take title. The financial services industry frequently adopts new technology-driven products and services that we may be unable to effectively implement or compete with. We face a variety of threats from technology-based frauds and scams.

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892449--3/31/2008--VENTURE_FINANCIAL_GROUP_INC