PRESS RELEASE
October 23, 2003

Contact
Cathy Reines, Chief Financial Officer
(360) 459 -1100
(360) 459 - 0137 (fax)

Venture Financial Group Reports Record Earnings

 THIRD QUARTER HIGHLIGHTS

Quarterly income and earnings per share increase 100% and 97% respectively

Quarterly non interest income up 153%

Non-performing assets as a percentage of total assets decline significantly from second quarter

LACEY, Wash. - October 23, 2003 - Venture Financial Group, Inc. (“Venture” or “the Company”), parent company of Venture Bank (www.venture-bank.com) today announced record third quarter net income of $3.30 million, an increase of 100% compared to $1.65 million for the third quarter 2002. Diluted earnings per share were $.72 for the quarter ended September 30, 2003 up 97% from $.37 for the same quarter in 2002. Net income for the third quarter was up 69% compared to second quarter 2003 earnings of $1.95 million.

Net income for the nine months ended September 30, 2003 was $7.03 million, an increase of $2.39 million or 52% compared to $4.64 million for the same period in 2002. On a diluted earnings per share basis, net income was $1.53 per share for the nine months ended September 30, 2003 compared with $1.04 for the same period in 2002, an increase of 47%.

Net income for 2003 includes a $2.1 million “Gain on Sale of Asset” recorded in July of 2003. Excluding this gain, net income and diluted earnings per share for the third quarter would have been $1.90 million and $.42 respectively, an increase of 13% over the same period in 2002. Net income and diluted earnings per share for the nine months would have been $5.64 million and $1.22 respectively. The Gain resulted from the sale of a piece of property which was acquired subsequent to a foreclosure action related to a problem loan which has been identified and reserved for in 1999.

Ken F. Parsons Sr., CEO and Chairman, stated, “We are obviously pleased with our results which we think are direct reflection of the extraordinary efforts of our team. Our performance, even excluding the gain, continues on a record pace for the year.”

For the quarter ended September 30, 2003, assets totaled $507 million, an increase of 29% over the $394 million in total assets at September 30, 2002. Total loans, which includes loans held for sale, increased 16% to $362 million from $312 million at September 30, 2002, while deposits increased 20% to $385 million from $322 million. Securities available for sale increased $61 million.

The balance sheet growth is primarily due to Venture’s acquisition of Harbor Bank in Gig Harbor in October 2002 and additional securities purchase in the third quarter of 2003.

“Strong income in our Mortgage and Construction departments, along with additional revenue attributed to our Harbor Bank acquisition have added significantly to our financial results,” said Jon M. Jones, President, Venture Bank.

Operating Results
Quarter Ended September 30, 2003

Net Interest Income
Net interest income for the third quarter of 2003 increased 6% to $6.0 million, from $5.7 million for the quarter ended September 30, 2002. This increase in interest income was generated by the loans acquired with the purchase of Harbor Bank in the fourth quarter 2002.

Net interest income for the nine months ended September 30, 2003 increased 17% to $19.2 million from $16.4 million for the same period last year.

Non-interest Income
Non-interest income increased $3.1 million or 153% in the third quarter of 2003 compared to the third quarter 2002, and $4.5 million or 79% for the first nine months of 2003 compared with the same period in 2002. Increase during the third quarter and first nine months of 2003 can be primarily attributed to the $2.1 million “Gain on Sale of Asset” recorded in July of 2003.

Non-interest Expense
Total non-interest expense increased $1 million or 21% for the third quarter of 2003 and $3.2 million or 23% for the first nine months of 2003 compared with the same period in 2002. The increase in non-interest expense can be primarily attributed to the acquisition of Harbor Bank. The Company also in the first nine months incurred additional marketing and rollout costs related to the branding efforts that have occurred in 2003.

Non-performing Assets 
Non-performing assets (which includes non-performing loans and other non-performing assets) as a percentage of total assets was .99%, 2.81% and 2.01% as of September 30, 2003, June 30, 2003 and September 30, 2002 respectively. The decrease from June 30, 2003 is primarily attributed to the sale of two significant properties in the OREO portfolio.

“I am very pleased with the performance of our credit administration team. The team has been tenacious in working through portfolio issues and the results have been impressive,” said Mr. Jones.

Venture Bank, with 20 offices in four western Washington counties, offers a full spectrum of financial services including commercial, construction, residential and consumer lending, investment services, 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

Note Regarding Forward-Looking Information
This news release may contain statements that are not historical in nature and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PLSRA”).  Forward-looking statements are subject to the risks and uncertainties that may cause actual future results to differ materially.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release.  The Company does not undertake any obligation to publicly release any revisions to forward-looking statements contained in this release, with respect to events or circumstances after the date of this release, or to reflect the occurrence of unanticipated events. Such risks and uncertainties with respect to the Company include those related to the economic environment, particularly in the region in which the Company operates, competitive products and pricing, fiscal and monetary policies of the federal government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management and asset/liability management, the financial and securities markets, and the availability of and costs associated with sources of liquidity.

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