PRESS RELEASE
April 22, 2004

Contact
Cathy Reines, Chief Financial Officer
(360) 459 -1100

Venture Financial Group Reports Record 1st Quarter Earnings

 FIRST QUARTER HIGHLIGHTS

Quarterly income and earnings per share increase 7% and 8%, respectively

Credit quality continues to improve

Non interest expense reduced $1 million or 18%

Olympia, Wash. - April 22, 2004 - Venture Financial Group, Inc. (“Venture” or “the Company”), parent company of Venture Bank (www.venture-bank.com), today announced first quarter net income of $1.9 million, an increase of 7% compared to $1.8 million for the first quarter 2003. The $1.9 million represents the highest first quarter earnings in Company history. Diluted earnings per share were $.42 for the quarter ended March 31, 2004 up 8% from $.39 for the same quarter in 2003.

For the quarter ended March 31, 2004, assets totaled $512 million, an increase of 10% over the $465 million in total assets at March 31, 2003. Total loans increased $12 million or 3.4% to $371 million from $359 million at March 31, 2003. Securities available for sale increased $48 million or 148.3% to $80 million from $32 million. Savings and interest bearing demand deposits for the quarter ended March 31, 2004 increased $25 million or 15.5% from the same period in 2003. This increase was offset by a $22 million or 16.1% decrease in time deposits.

“Our team continues to do a great job of capitalizing on the Venture Bank brand, growing the franchise, and creating greater value for our shareholders,” said Ken F. Parsons Sr., Venture Financial Group Chairman and CEO.

Operating Results
Quarter Ended March 31, 2004

Net Interest Income
Net interest income for the first quarter of 2004 decreased 8.4% to $6.0 million, from $6.6 million for the quarter ended March 31, 2003. This decrease is due to discontinued income from the small loan program in the state of Alabama. Net interest income excluding the Alabama small loan income in 2003 would have been $5.6 million. The reduction in small loan income was partially offset by an increase in investment income of $556,000 or 158.4% and a decrease in deposit interest expense of $258,000 or 20.5% for the quarter ended March 31, 2004 compared to the same period in 2003.

Non-interest Income
Non interest income decreased by $800,000 or 30% to a total of $1.8 million for the quarter ended March 2004 compared to $2.6 million for the same quarter in 2003. This decrease is due largely to a decrease for the quarter ended March 31, 2004 of $520,000 or 60.6% in origination fees on mortgage loans sold. In addition, the quarter ended March 31, 2003 includes one time gains on the sale of two OREO properties totaling $219,000.

Non-interest Expense
Total non interest expense decreased by $1 million or 17.6% for the three months ended March 31, 2004 compared to the three months ended March 31, 2003. This cost savings is due to a decrease in salary and benefit expense of $356,000 related to reduced mortgage commissions and a reduction in the number of employees. In addition, the Company incurred marketing and branding costs during the quarter ended March 31, 2003 approximating $400,000 not incurred during the first quarter 2004. Finally, the Company has refocused its energies on cost control in 2004 and accordingly other expenses are continuing to be reduced.

“Going into 2004, we anticipated a reduction in mortgage loan originations as well as reduced income generated from our small loan program. We knew we would have to increase our loan volumes and reduce our expenses. I am extremely proud that we were able to accomplish these goals leading to increased income and diluted earnings per share for our shareholders,” said Jon M. Jones, Venture Bank President.

Non-performing Assets 
Nonperforming assets (which includes nonperforming loans and other nonperforming assets) as a percentage of total assets was .68%, .82% and 3.13% as of March 31, 2004, December 31, 2003 and March 31, 2003 respectively. Nonperforming loans as a percentage of total loans was .53%, .60% and 2.21% as of March 31, 2004, December 31, 2003 and March 31, 2003 respectively.

“The credit quality of the loan portfolio continues to improve. Our credit administration team has worked diligently as evidenced by the ratios. We are excited that credit issues acquired during the Harbor Bank acquisition are behind us and we can concentrate on growing the loan portfolio,” said Mr. Jones.

Venture Financial Group, through its wholly owned subsidiary Venture Bank, has 20 offices in four western Washington counties and offers a full spectrum of financial services including commercial, construction, residential and consumer lending, deposit products and other banking services. Further information about the Bank may be found on the Internet at  www.venture-bank.com.

Condensed Statements of Condition
Condensed Statements of Operations

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