Venture Financial scraps IPO plans

Venture Financial has pulled its plans to go public, the latest move by the Washington banking company struggling through the financial crisis and housing market downturn.

The parent company of DuPont-based Venture Bank cited ???adverse market conditions??? in its recent decision to pull its $46 million initial public offering (IPO), a day before it expects to release sharply reduced earnings for the third quarter.

Jim Arneson, president of Venture, said the IPO filing, made in July 2007, had expired and the bank has made no move to renew it. Because of the tumultuous market, Arneson said Venture has no immediate plans to attempt another IPO.

Content Continues Below

???It???s a pretty familiar story,??? he said.

Venture, with 18 branches across the Puget Sound region, has been hit hard by the housing market downturn and its investments in beleaguered mortgage giants Fannie Mae and Freddie Mac.

The company recently said it would delay filing its third quarter earnings report as it tries to figure out how deteriorating market conditions and declining income have affected its intangible value ??? including its brand name and reputation, among other factors.

In a Securities and Exchange Commission filing, Venture said it anticipates reporting ???significantly lower revenues??? and ???a large loss in the quarter,??? as a result of its ownership of Fannie Mae and Freddie Mac stock.

Venture owned preferred shares of the mortgage giants worth a book value of about $42.3 million. By the beginning of September, the value of those securities had declined to about $3.9 million. As a result, the bank expects an impairment charge of $38.4 million in the third quarter. Arneson said he expects the bank to announce its third-quarter earnings on Wednesday.