EXHIBIT 99.1

RISK FACTORS

      The following summarizes certain risks that management believes are
specific to our business. This should not be viewed as including all risks.

WE ARE PURSUING AN AGGRESSIVE GROWTH STRATEGY THAT MAY INCLUDE MERGERS AND
ACQUISITIONS, WHICH COULD PLACE HEAVY DEMANDS ON OUR MANAGEMENT RESOURCES.

      Umpqua is a dynamic organization that is among the fastest-growing
community financial services organizations in the United States. Since 2000, we
have completed the acquisition and integration of five other financial
institutions. Although all of these acquisitions were integrated in a successful
manner, there is no assurance that future acquisitions will be integrated in a
manner as successful as those previously completed. We have announced our intent
to open new stores in Oregon, Washington and California, and to continue our
growth strategy. If we pursue our growth strategy too aggressively, or if
factors beyond management's control divert attention away from our integration
plans, we might not be able to realize some or all of the anticipated benefits.
Moreover, we are dependent on the efforts of key personnel to achieve the
synergies associated with our acquisitions. The loss of one or more of our key
persons could have a material adverse effect upon our ability to achieve the
anticipated benefits.

THE REMODELING OF OUR STORES MAY NOT BE COMPLETED SMOOTHLY OR WITHIN BUDGET,
WHICH COULD RESULT IN REDUCED EARNINGS.

      The Bank has, over the past several years, been transformed from a
traditional community bank into a community-oriented financial services
retailer. In pursuing this strategy, we have remodeled many bank branches to
resemble retail stores that include distinct physical areas or boutiques such as
a "serious about service center," an "investment opportunity center" and a
"computer cafe." Remodeling involves significant expense, disrupts banking
activities during the remodeling period, and presents a new look and feel to the
banking services and products being offered. There are risks that remodeling
costs will exceed forecasted budgets and that there may be delays in completing
the remodels, which could cause confusion and disruption in the business of
those stores.

INVOLVEMENT IN NON-BANK BUSINESS INVOLVES UNIQUE RISKS

      Strand's retail brokerage operations present special risks not borne by
community banks. For example, the brokerage industry is subject to fluctuations
in the stock market that may have a significant adverse impact on transaction
fees, customer activity and investment portfolio gains and losses. Likewise,
additional or modified regulations may adversely affect Strand's operations. A
significant decline in fees and commissions or trading losses suffered in the
investment portfolio could adversely affect Strand's income and potentially
require the contribution of additional capital to support its operations. Strand
is subject to claim arbitration risk arising from customers who claim their
investments were not suitable or that their portfolios were too actively traded.
These risks increase when the market, as a whole, declines. The risks associated
with retail brokerage may not be supported by the income generated by those
operations.

THE MAJORITY OF OUR ASSETS ARE LOANS, WHICH IF NOT PAID WOULD RESULT IN LOSSES
TO THE BANK IN EXCESS OF LOSS ALLOWANCES.

      The Bank, like other lenders, is subject to credit risk, which is the risk
of losing principal or interest due to borrowers' failure to repay loans in
accordance with their terms. Although we have established underwriting and
documentation criteria and most loans are secured by collateral, a downturn in
the economy or the real estate market in our market areas or a rapid increase in
interest rates could have a negative effect on collateral values and borrowers'
ability to repay. To the extent loans are not paid timely by borrowers, the
loans are placed on non-accrual, thereby reducing interest income. To the extent
loan charge-offs exceed expectations, additional amounts may be charged to the
provision for loan losses, which reduces income. Although management believes
that the allowance for loan losses and reserve for unfunded commitments at the
end of the reported period are adequate, no assurance can be given that an
additional provision for loan losses or unfunded commitments will not be
required.

A RAPID CHANGE IN INTEREST RATES COULD MAKE IT DIFFICULT TO MAINTAIN OUR CURRENT
INTEREST INCOME SPREAD AND COULD RESULT IN REDUCED EARNINGS.

      Our earnings are largely derived from net interest income, which is
interest income and fees earned on loans and investments, less interest paid on
deposits and other borrowings. Interest rates are highly sensitive to many
factors that are beyond the control of our management, including general
economic conditions and the policies of various governmental and regulatory
authorities. As interest rates change, net interest income is affected. With
fixed rate assets (such as fixed rate loans) and liabilities (such as
certificates of deposit), the effect on net interest income depends on the
maturity of the asset or liability. Although we strive to manage interest rate
risk through asset/liability management policies, from time to time maturities
are not balanced. Any rapid increase in interest rates in the future could
result in interest expense increasing faster than interest income because of
fixed rate loans and longer-term



investments. Further, substantially higher interest rates generally reduce loan
demand and may result in slower loan growth than previously experienced. An
unanticipated rapid decrease or increase in interest rates could have an adverse
effect on the spreads between the interest rates earned on assets and the rates
of interest paid on liabilities, and therefore on the level of net interest
income.

THE VOLATILITY OF OUR MORTGAGE BANKING BUSINESS CAN ADVERSELY AFFECT EARNINGS.

      Changes in interest rates greatly affect the mortgage banking business.
One of the principal risks in this area is prepayment of mortgages and their
effect on the value of mortgage servicing rights ("MSR"). We can mitigate this
risk by purchasing financial instruments, such as fixed rate investment
securities and interest rate contracts, which tend to increase in value when
long-term interest rates decline. The success of this strategy, however, depends
on management's judgments regarding the amount, type and mix of MSR risk
management instruments that we believe are appropriate to manage the changes in
the fair value of our MSR asset. If these decisions and strategies are not
successful, our net income could be adversely affected.

OUR BANKING AND BROKERAGE OPERATIONS ARE SUBJECT TO EXTENSIVE GOVERNMENT
REGULATIONS THAT ARE EXPECTED TO BECOME MORE BURDENSOME, INCREASING OUR COSTS
AND/OR MAKING US LESS COMPETITIVE.

      We and our subsidiaries are subject to extensive regulation under federal
and state laws. These laws and regulations are primarily intended to protect
customers, depositors and the deposit insurance fund, rather than shareholders.
The Bank is an Oregon state-chartered commercial bank whose primary regulator is
the Oregon Division of Finance and Corporate Securities. The Bank is also
subject to the supervision by and the regulations of the Washington Department
of Financial Institutions, the California Department of Financial Institutions
and the Federal Deposit Insurance Corporation ("FDIC"), which insures bank
deposits. Strand is subject to extensive regulation by the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
Umpqua is subject to regulation and supervision by the Board of Governors of the
Federal Reserve System, the SEC and NASDAQ. Federal and state regulations may
place banks at a competitive disadvantage compared to less regulated competitors
such as finance companies, credit unions, mortgage banking companies and leasing
companies. Although we have been able to compete effectively in our market area
in the past, there can be no assurance that we will be able to continue to do
so. Further, future changes in federal and state banking and brokerage
regulations could adversely affect our operating results and ability to continue
to compete effectively.

THE FINANCIAL SERVICES INDUSTRY IS HIGHLY COMPETITIVE.

      We face significant competition in attracting and retaining deposits and
making loans as well as in providing other financial services throughout our
market area. We face pricing competition for loans and deposits. We also face
competition with respect to customer convenience, product lines, accessibility
of service and service capabilities. Our most direct competition comes from
other banks, brokerages, mortgage companies and savings institutions. We also
face competition from credit unions, government-sponsored enterprises, mutual
fund companies, insurance companies and other non-bank businesses.