##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934(No Fee Required)   Commission file number
    000-32915
      EvergreenBancorp,
    Inc.
 (Exact name of Registrant as
    specified in its Charter)
  Washington

91-2097262(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification Number)301 Eastlake Avenue East,
    Seattle, Washington(Address of Principal
    Executive Offices)

98109(ZIP Code)   Registrants telephone number, including area code:
 (206) 628-4250
  Securities registered pursuant to Section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Act:
    Common Stock, no par value per share
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
   o þ
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Items 10-14).




---



##### 



EVERGREENBANCORP,
    INC.FORM 10-K
    ANNUAL REPORT
    TABLE OF CONTENTS
   
  PagePART IItem 1.


Business


3Item 1A.


Risk
    Factors


10Item 1B.


Unresolved Staff
    Comments


12Item 2.


Properties


12Item 3.


Legal
    Proceedings


12Item 4.


Submission of
    Matters to a Vote of Security Holders


12PART IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters,
    and Issuer Purchases of Equity Securities


12Item 6.


Selected
    Consolidated Financial Data


14Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


14Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


34Item 8.


Financial
    Statements and Supplementary Data


35Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


66Item 9A.


Controls and
    Procedures


66PART IIIItem 10.


Directors,
    Executive Officers and Corporate Governance


66Item 11.


Executive
    Compensation


66Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Shareholder Matters


66Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


66Item 14.


Principal
    Accounting Fees and Services


67PART IVItem 15.


Exhibits and
    Financial Statement Schedules


67SIGNATURES


69EXHIBIT 10.1EXHIBIT 10.12EXHIBIT 21EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   2




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##### Table of Contents



PART I  Forward-Looking
    Information Statement
    Item 1.
    Business  EvergreenBancorp,
    Inc.
  share-for-share
     3




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##### Table of Contents



10-K
  EvergreenBank
    Market
  25-mile
  24-hour
  Competition
       4




---



##### Table of Contents



Employees
    EvergreenBancorp
    Capital Trust I
      EvergreenBancorp
    Statutory Trust II
      SUPERVISION
    AND REGULATION
  General
    Federal
    Bank Holding Company Regulation
  General.
 5




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##### Table of Contents



Holding Company Bank Ownership.
  Holding Company Control of Nonbanks.
  Transactions with Affiliates.
  Tying Arrangements.
  Support of Subsidiary Banks.
  State Law Restrictions.
  Federal
    and State Regulation of EvergreenBank
  General.
  Community Reinvestment.
  Insider Credit Transactions.
 6




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##### Table of Contents



Regulation of Management.
  Safety and Soundness Standards.
  Interstate
    Banking and Branching
    loan-to-deposit
  out-of-state out-of-state out-of-state out-of-state out-of-state
  Deposit
    Insurance
     7




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##### Table of Contents



Dividends
    Capital
    Adequacy
  Regulatory Capital Guidelines.
  Tier 1 and Tier 2 Capital.
  Risk-Based Capital Ratios.
  Leverage Ratio.
  Prompt Corrective Action.
  Corporate
    Governance and Accounting Legislation
  Sarbanes-Oxley Act of 2002.
   8




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##### Table of Contents



Anti-Terrorism
    Legislation
  USA PATRIOT Act of 2001.
  Financial
    Services Modernization
  Gramm-Leach-Bliley Act of 1999. day-to-day
      Effects
    of Government Monetary Policy
   9




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##### Table of Contents



Item 1A.
    Risk
    Factors     Fluctuating
    interest rates can adversely affect our
    profitability
     Our
    allowance for loan losses may not be adequate to cover actual
    loan losses, which could adversely affect our
    earnings
     Our
    loan portfolio contains a high percentage of commercial and
    commercial real estate loans in relation to our total loans and
    total assets
   10




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##### Table of Contents



 An
    economic downturn in the market area we serve may cause us to
    have lower earnings and could increase our credit risk
    associated with our loan portfolio
     Competition
    in our market area may limit our future success
     There
    is not significant trading activity of our shares, which could
    result in price volatility
     We
    would be adversely affected if we lost the services of key
    personnel
       There
    are restrictions on changes in control of the Company that could
    decrease our shareholders chance to realize a premium on
    their shares
  and/or
 11




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##### Table of Contents



Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties        Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder
    Matters, and Issuer Purchases of Equity Securities    four-for-three
  2006


2005Cash








CashDividend


High


Low


Dividend


High


LowFirst Quarter


0.06



14.15



13.29



0.056



13.09



12.11Second Quarter


0.06



16.25



13.99



0.056



14.07



11.80Third Quarter


0.06



17.00



14.95



0.056



14.68



13.07Fourth Quarter


0.07



15.88



14.50



0.060



16.93



13.49    12




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##### Table of Contents



(800) 962-4284.
    Equity
    Compensation Plan Information
    (c)(a)


(b)


Number of Shares RemainingNumber of Shares to be


Weighted-Average


Available for Future IssuanceIssued upon Exercise of


Exercise Price of


Under Equity CompensationOutstanding Options,


Outstanding Options,


Plans (Excluding SharesPlan Category

Warrants and Rights


Warrants and Rights


Reflected in Column (a))Equity compensation plans approved
    by shareholders(1)


207,434


$
10.37



47,243Equity compensation plans not
    approved by shareholders


N/A



N/A



N/ATotal


207,434


$
10.37



47,243     (1)
    
    Amounts have been adjusted to reflect all applicable stock
    splits and dividends paid on the Companys common stock. 13




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##### Table of Contents



Item 6.
    Selected
    Consolidated Financial Data  2006


2005


2004


2003


2002(In thousands, except per share and ratio data)INCOME STATEMENT DATANet interest income

$
12,535


$
10,263


$
9,102


$
8,200


$
8,337Provision for loan losses


810



423



321



233



330Noninterest income


1,828



1,693



1,709



1,755



1,537Noninterest expense


10,950



10,150



8,602



8,196



7,521Net income


1,819



966



1,282



1,036



1,343PER SHARE DATA(1)Earnings per common share

$
0.89


$
0.48


$
0.64


$
0.52


$
0.68Diluted earnings per common share


0.88



0.47



0.63



0.52



0.68Dividends declared per common share


0.250



0.228



0.192



0.185



0.086BALANCE SHEET DATATotal loans

$
292,449


$
189,188


$
159,656


$
138,468


$
121,509Allowance for loan losses


2,784



2,056



1,887



1,636



1,690Real estate owned














2,659



Total assets


343,520



249,192



209,630



194,556



169,926Total deposits


256,435



199,890



173,801



152,683



132,174Total long-term debt


59,022



28,849



16,067



20,381



16,783Stockholders equity


23,819



17,736



17,485



16,583



15,960SELECTED FINANCIAL RATIOSReturn on average assets


0.64
%


0.45
%


0.66
%


0.60
%


0.82
%Return on average equity


9.55



5.51



7.58



6.42



8.84Dividend payout ratio


27.60



47.31



29.80



35.33



12.51Average equity to average assets


6.67



8.16



8.71



9.29



9.31Net interest margin (tax
    equivalent)(2)


4.67



5.14



5.02



5.02



5.48Allowance for loan losses to total
    loans at the end of year


0.95



1.09



1.18



1.18



1.39Nonperforming loans to total loans
    at the end of year(3)


0.17



0.61



0.14



0.46



0.66Net loans charged off to average
    total loans


0.03



0.16



0.05



0.24



0.11     (1)
    
    All per share amounts have been adjusted to reflect all
    applicable stock splits and dividends paid on the Companys
    common stock.(2)
    
    Net interest margin (tax-equivalent) is a non-GAAP disclosure.
    Please see page 21 for further discussion.(3)
    
    Nonperforming loans include nonaccrual loans, and other loans
    90 days or more past due.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  General
   14




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##### Table of Contents



Forward-Looking
    Statements
      Critical
    Accounting Policies
  Form 10-K.
  Allowance for Loan Losses.
 15




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##### Table of Contents



non-classified
        Temporary Decline in Fair Value of
    Securities. other-than-temporary other-than-temporary, other-than-temporary
  Overview
         16




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##### Table of Contents



equity-to-assets
  Results
    of Operations 2006 Compared to 2005
    year-over-year.
      Results
    of Operations 2005 Compared to 2004
       17




---



##### Table of Contents



Net
    Interest Income
    2006
    Compared to 2005
        2005
    Compared to 2004
       18




---



##### Table of Contents



Analysis
    of Average Balances, Net Interest Income, and Net Interest
    Margin
  Years Ended December 31,2006 Over 20052006


2005


Change inAverage





Yield/


Average





Yield/


Income Due toBalance


Interest


Rate


Balance


Interest


Rate


Volume


Rate(In thousands)ASSETSLoans:Commercial and financial

$
77,446


$
7,341



9.48
%

$
56,551


$
4,688



8.29
%

$
1,911


$
742Real estate


140,465



10,340



7.36



89,433



6,303



7.05



3,745



292Consumer and other


16,620



1,683



10.13



14,238



1,398



9.82



240



45Total loans


234,531



19,364



8.26



160,222



12,389



7.73



5,896



1,079Federal funds sold


1,140



58



5.09



5,350



164



3.06



(175
)


69Interest-bearing deposits in
    financial institutions


1,782



72



4.04



849



15



1.77



26



30Investment securities


32,504



1,375



4.23



34,816



1,227



3.52



(86
)


234Total earning assets


269,957



20,869



7.73



201,237



13,795



6.86



5,661



1,413Cash and due from banks


6,805











8,756Premises and equipment


2,948











2,942Other real estate owned














Accrued interest and other assets


8,301











3,901Allowance for loan losses


(2,408
)










(1,937
)Total assets

$
285,603










$
214,899LIABILITIESInterest-bearing deposits:Demand deposits


12,427



172



1.38



12,529



21



0.17







151Savings deposits


60,392



1,433



2.37



55,299



777



1.40



77



579Time deposits


90,471



4,101



4.53



58,342



1,723



2.95



1,206



1,172Total interest-bearing deposits


163,290



5,706



3.49



126,170



2,521



2.00



1,283



1,902Federal funds purchased


1,368



75



5.48



323



15



4.65



57



3Federal Home Loan Bank
    advances


39,288



1,979



5.04



12,351



568



4.60



1352



59Junior subordinated debt


6,188



491



7.93



5,000



345



6.90



90



56Total interest-bearing liabilities


210,134



8,251



3.93



143,844



3,449



2.40



2,782



2,020Noninterest-bearing deposits


55,000











51,576Accrued interest and other
    liabilities


1,423











1,937Total liabilities


266,557











197,357Stockholders equity


19,046











17,542Total liabilities and
    stockholders equity

$
285,603










$
214,899Interest revenue as a percentage
    of average earning assets










7.73
%










6.86
%Interest expense as a percentage
    of average earning assets










3.06
%










1.71
%Net interest income on a taxable-
    equivalent basis and net interest margin





$
12,618



4.67
%





$
10,346



5.14
%  19




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##### Table of Contents



Analysis
    of Average Balances, Net Interest Income, and Net Interest
    Margin
  Years Ended December 31,2005


2004


2005 Over 2004Average





Yield/


Average





Yield/


Change in Income Due toBalance


Interest


Rate


Balance


Interest


Rate


Volume


Rate(In thousands)ASSETSLoans:Commercial and financial

$
56,551


$
4,688



8.29
%

$
62,706


$
4,504



7.18
%

$
(469
)

$
653Real estate


89,433



6,303



7.05



66,352



4,456



6.72



1,617



230Consumer and other


14,238



1,398



9.82



13,170



1,295



9.83



105



(2
)Total loans


160,222



12,389



7.72



142,228



10,255



7.21



1,253



881Federal funds sold


5,350



164



3.06



3,564



44



1.24



30



90Interest-bearing deposits in
    financial institutions


849



15



1.77



962



6



0.62



(1
)


10Investment securities


34,816



1,227



3.52



35,575



1,118



3.14



(26
)


135Total earning assets


201,237



13,795



6.86



182,329



11,423



6.26



1,256



1,116Cash and due from banks


8,756











7,500Premises and equipment


2,942











3,402Other real estate owned














330Accrued interest and other assets


3,901











2,220Allowance for loan losses


(1,937
)










(1,677
)Total assets

$
214,899










$
194,104LIABILITIESInterest-bearing deposits:Demand deposits


12,529



21



0.17



11,133



12



0.11



2



7Savings deposits


55,299



777



1.40



49,384



469



0.95



62



246Time deposits


58,342



1,723



2.95



48,953



972



1.99



212



539Total interest-bearing deposits


126,170



2,521



2.00



109,470



1,453



1.33



276



792Federal funds purchased


323



15



4.65



1,715



14



0.83



(19
)


20Federal Home Loan Bank advances


12,351



568



4.60



12,663



541



4.27



(14
)


41Junior subordinated debt


5,000



345



6.90



5,000



253



5.06







92Total interest-bearing liabilities


143,844



3,449



2.40



128,848



2,261



1.75



243



945Noninterest-bearing deposits


51,576











46,323Accrued interest and other
    liabilities


1,937











2,024Total liabilities


197,357










$
177,195Stockholders equity


17,542











16,909Total liabilities and
    stockholders equity

$
214,899










$
194,104Interest revenue as a percentage of
    average earning assets










6.86
%










6.26
%Interest expense as a percentage of
    average earning assets










1.71
%










1.24
%Net interest income on a taxable-
    equivalent basis and net interest margin





$
10,346



5.14
%





$
9,162



5.02
%  20




---



##### Table of Contents



December 31,2006


2005


2004(In thousands)Net Interest MarginInterest income (GAAP)

$
20,786


$
13,712


$
11,363Taxable-equivalent adjustment:Loans


12



18



12Investments


71



65



48Interest income  FTE


20,869



13,795



11,423Interest expense (GAAP)


8,251



3,449



2,261Net interest income  FTE

$
12,618


$
10,346


$
9,162Net interest income 
    (GAAP)

$
12,535


$
10,263


$
9,102Average interest earning assets

$
269,957


$
201,237


$
182,329Net interest margin (GAAP)


4.64
%


5.10
%


4.99
%Net interest margin  FTE


4.67
%


5.14
%


5.02
%   Provision
    and Allowance for Loan Losses
         21




---



##### Table of Contents



Noninterest
    Income
        Noninterest
    Expense
     22




---



##### Table of Contents



Income
    tax Expense
      Review of
    Financial Condition
    Analysis
    of Securities
    2006


2005


2004Carrying


Carrying


CarryingValue


Value


Value(In thousands)U.S. agencies

$
4,478


$
7,394


$
8,004State and political subdivisions


4,142



4,454



3,555USM Ultra Short Mortgage Fund


14,793



14,823



14,832Mortgage-backed securities and
    collateralized mortgage obligations


4,567



5,461



7,367Federal Home Loan Bank stock


1,551



1,418



1,412Total

$
29,531


$
33,550


$
35,170        23




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##### Table of Contents



After 1 Year


After 5 Years





Total andBut Within


But Within


After


WeightedWithin 1 Year/


5 Years/


10 Years/


10 Years/


AverageYield


Yield


Yield


Yield


Yield(In thousands, carrying value)U.S. agencies

$
1,983


$
2,495


$



$



$
4,4783.05
%


4.90
%










4.08
%State and political subdivisions


796



2,555



791







4,1423.51
%


4.39
%


5.31
%






4.40
%USM Ultra Short Mortgage Fund*


14,793















14,7934.96
%














4.96
%Mortgage-backed securities and
    collateralized mortgage obligations










231



4,336



4,567







5.67
%


4.30
%


4.37
%Federal Home Loan Bank stock*


1,551















1,551Total

$
19,123


$
5,050


$
1,022


$
4,336


$
29,531     *
    
    Securities without a stated maturity.  Temporary Decline in the Fair Value of Securities
  Loans
      Types
    of Loans
  2006


2005


2004


2003


2002(In thousands)Commercial

$
85,067


$
61,921


$
55,563


$
53,770


$
47,603Real estate:Commercial


118,070



76,902



67,165



48,963



42,497Construction


34,813



6,953



11,538



10,911



5,574Residential 1-4 family*


36,875



28,195



11,508



11,971



10,821Consumer and other


17,624



15,217



13,882



12,853



15,014Total

$
292,449


$
189,188


$
159,656


$
138,468


$
121,509     *
    
    Residential 1-4 family includes $5,753,000 and $13,882,000 of
    loans purchased from a mortgage broker in 2006 and 2005,
    respectively.  Origination of Loans
 24




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##### Table of Contents



Commercial Loans
  Commercial Real Estate Loans
  loan-to-value one-to-four 25-year
  one-to-four loan-to-value
  loan-to-value
  Construction Loans loan-to-value loan-to-value loan-to-construction 12-18 month
 25




---



##### Table of Contents



One-to-Four
    Family Residential Real Estate Loans one-to-four one-to-four
  loan-to-value one-to-four loan-to-value due-on-sale
    Consumer Loans
  Collections
  Nonaccrual Loans
    Within


1-5


After1 Year


Years


5 Years


Total(In thousands)Commercial

$
58,669


$
20,409


$
5,989


$
85,067Real estate:Commercial


39,190



57,268



21,612



118,070Construction


33,107



1,706







34,813Residential 1-4 family


10,523



10,245



16,107



36,875Consumer and other


12,473



4,294



857



17,624Total

$
153,962


$
93,922


$
44,565


$
292,449     1-5


AfterYears


5 Years(In thousands)Fixed rates

$
32,020


$
39,841Variable rates


34,123



74,419Total

$
66,143


$
114,260  26




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##### Table of Contents



Allocation
    of the Allowance for Loan Losses
    % of





% of% of Loans





Loans





Loans





% of Loans





% of Loansin Each





in Each





in Each





in Each





in Each2006


Category


2005


Category


2004


Category


2003


Category


2002


CategoryAllocated


to Total


Allocated


to Total


Allocated


to Total


Allocated


to Total


Allocated


to TotalAmount


Loans


Amount


Loans


Amount


Loans


Amount


Loans


Amount


Loans(In thousands)Commercial

$
919



29


$
987



33


$
1,000



35


$
885



39


$
1,024



39Real estate:Commercial


1,120



40



651



40



568



42



436



35



423



35Construction


440



12



72



4



117



7



110



8



59



5Residential 1-4 family


36



13



106



15



11



7



9



9



28



9Consumer and other


269



6



240



8



191



9



196



9



156



12Total

$
2,784



100


$
2,056



100


$
1,887



100


$
1,636



100


$
1,690



100% of loan portfolio


0.95
%






1.09
%






1.18
%






1.18
%






1.39
%     Analysis
    of the Allowance for Loan Losses
    2006


2005


2004


2003


2002(In thousands)Beginning balance

$
2,056


$
1,887


$
1,636


$
1,690


$
1,498Charge-offs:Commercial


88



252



24



81



108Real estate:Commercial






1











20Construction


















Residential 1-4 family














184



Consumer and other


30



41



146



67



63Total charge-offs


118



294



170



332



191Recoveries:Commercial


28



26



87



17



22Real estate:Commercial














20



Construction


















1Residential 1-4 family














8



Consumer and other


8



14



13







30Total recoveries


36



40



100



45



53Net
    charge-offs/(recoveries)


82



254



70



287



138Provision


810



423



321



233



330Ending balance

$
2,784


$
2,056


$
1,887


$
1,636


$
1,690Ratio of net charge-offs to
    average loans outstanding


0.03
%


0.16
%


0.05
%


0.24
%


0.11
%  27




---



##### Table of Contents



Nonperforming
    Loans and Assets
    2006


2005


2004


2003


2002(In thousands)Nonaccruing loans:Commercial

$
44


$
37


$
182


$
112


$
309Real Estate


343



661











462Consumer


79



37



31







1Total(1)


466



735



213



112



772Accruing loans delinquent
    90 days or more:Commercial






401



5



464



15Real Estate


















Consumer


31



13







67



12Total


31



414



5



531



27Total non-performing loans


497



1,149



218



643



799Other real estate owned














2,659



Total non-performing assets

$
497


$
1,149


$
218


$
3,302


$
799Total non-performing loans as a
    percentage of loans


0.17
%


0.61
%


0.14
%


0.46
%


0.66
%Total non-performing assets as a
    percentage of assets


0.14
%


0.46
%


0.10
%


1.70
%


0.47
%     (1)
    
    If interest on these nonaccruing loans had been recognized, such
    income would have been $50,000, $29,000, $9,000, $9,000, and
    $68,000 for 2006, 2005, 2004, 2003, and 2002.         28




---



##### Table of Contents



Deposits
    2006


2005


2004Amount


Rate


Amount


Rate


Amount


Rate(In thousands)DEPOSITSNoninterest bearing demand

$
55,000



0.00
%

$
51,576



0.00
%

$
46,323



0.00
%Interest bearing demand


12,427



1.38



12,529



0.17



11,133



0.11Savings deposits


60,392



2.37



55,299



1.40



49,384



0.95Time deposits:Certificate of deposit, under
    $100,000


24,996



4.48



23,861



2.79



22,369



2.08Certificate of deposit, over
    $100,000


45,957



4.32



17,970



2.74



13,184



2.14Public Funds


19,518



5.09



16,511



3.41



13,400



1.66Total time deposits


90,471



4.53
%


58,342



2.95
%


48,953



1.98
%Total

$
218,290






$
177,746






$
155,793     Amount(In thousands)3 months or less

$
33,443Over 3 months through
    6 months


14,521Over 6 months through
    12 months


24,046Over 12 months


19,706Total

$
91,716   Borrowings
    Federal Funds Purchased

December 31, 2006


December 31, 2005


December 31, 2004(In thousands)Balance at end of year

$



$



$
Weighted average interest rate at
    end of year










Maximum amount outstanding


2,370



3,020



3,212Average amount outstanding(1)


1,368



323



1,715Weighted average interest rate
    during the year


5.48
%


4.65
%


0.83
%     (1)
    
    Based on average amount outstanding at month end during each
    year.  29




---



##### Table of Contents



FHLB Advances

December 31, 2006


December 31, 2005


December 31, 2004(In thousands)Balance at end of year

$
46,805


$
23,849


$
11,067Weighted average interest rate at
    end of year


5.21
%


4.73
%


4.50
%Maximum amount outstanding


49,644



23,849



17,537Average amount outstanding(1)


39,288



12,351



12,663Weighted average interest rate
    during the year


5.04
%


4.60
%


4.27
%     (1)
    
    Based on average amount outstanding for the month during each
    year.  Junior
    Subordinated Debt (Trust Preferred Securities)
         30




---



##### Table of Contents



Contractual
    Obligations and Commitments
          Within








After1 Year


1-3 Years


3-5 Years


5 Years


Total(In thousands)Federal Home Loan Bank advances

$
22,620


$
10,185


$
5,000


$
9,000


$
46,805Junior subordinated debt














12,217



12,217Time deposits


95,390



20,117



4,462



529



120,498Operating leases


635



1,145



905



865



3,550Purchase obligations*


143















143Total

$
118,788


$
31,447


$
10,367


$
22,611


$
183,213     *
    
    Purchase obligations include approximately $75,000 to remodel
    new office space and $68,000 for core processor outsourcing.    Asset/Liability
    Management
     31




---



##### Table of Contents



Liquidity
    available-for-sale
            Interest
    Rate Risk
       32




---



##### Table of Contents



Net Interest Income Analysis
  December 31, 2006Dollar


PercentImmediate Rate Change

Change


Change+

200bp

$
2,283



21.18
%+

100bp


1,157



10.74+

50bp


579



5.37−

50bp


(642
)


(5.95
)−

100bp


(1,283
)


(11.90
)−

200bp


(2,606
)


(24.18
)   December 31, 2005Dollar


PercentImmediate Rate Change

Change


Change+

200bp

$
252



2.31
%+

100bp


94



0.86+

50bp


47



0.43−

50bp


(122
)


(1.11
)−

100bp


(243
)


(2.22
)−

200bp


(750
)


(6.87
)         Capital
    Resources
  available-for-sale,
   33




---



##### Table of Contents



Item 7A.  Quantitative
    and Qualitative Disclosures About Market Risk   34




---



##### Table of Contents



Item 8.  Financial
    Statements and Supplementary Data    PageReport of
    Independent Registered Public Accounting Firm


36Consolidated
    Balance Sheets


37Consolidated
    Statements of Income


38Consolidated
    Statements of Stockholders Equity


39Consolidated
    Statements of Comprehensive Income


40Consolidated
    Statements of Cash Flows


41Notes to
    Consolidated Financial Statements


42  35




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  
          
     36




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2006


2005(In thousands, except share and per share data)AssetsCash and due from banks

$
9,160


$
12,379Federal funds sold


1,983



2,112Interest-bearing deposits in
    financial institutions


760



2,811Total cash and cash equivalents


11,903



17,302Securities
    available-for-sale


29,531



33,550Loans


292,449



189,188Allowance for loan losses


(2,784
)


(2,056
)Net loans


289,665



187,132Premises and equipment


3,078



3,179Cash surrender value of bank owned
    life insurance


5,316



5,090Accrued interest and other assets


4,027



2,939Total assets

$
343,520


$
249,192LiabilitiesDepositsNoninterest-bearing

$
55,373


$
64,635Interest-bearing


201,062



135,255Total deposits


256,435



199,890Federal Home Loan Bank
    advances


46,805



23,849Junior subordinated debt


12,217



5,000Accrued expenses and other
    liabilities


4,244



2,717Total liabilities


319,701



231,456Commitments and
    ContingenciesStockholders
    equityPreferred stock; no par value;
    100,000 shares authorized; none issued






Common stock and surplus; no par
    value; 15,000,000 shares authorized; 2,353,262 shares
    issued at 2006; 2,000,467 shares issued at 2005


21,129



16,005Retained earnings


3,453



2,187Accumulated other comprehensive
    loss


(763
)


(456
)Total stockholders equity


23,819



17,736Total liabilities and
    stockholders equity

$
343,520


$
249,192    37




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  CONSOLIDATED
    STATEMENTS OF INCOME
  Years Ended December 31,2006


2005


2004(In thousands, except per share data)Interest incomeLoans, including fees

$
19,352


$
12,371


$
10,243Taxable securities


1,167



1,036



976Tax exempt securities


137



126



94Federal funds sold and other


130



179



50Total interest income


20,786



13,712



11,363Interest expenseDeposits


5,706



2,521



1,453Federal funds purchased


75



15



14Federal Home Loan Bank
    advances


1,979



568



541Junior subordinated debt


491



345



253Total interest expense


8,251



3,449



2,261Net interest income


12,535



10,263



9,102Provision for loan losses


810



423



321Net interest income after
    provision for loan losses


11,725



9,840



8,781Noninterest incomeService charges on deposit accounts


1,165



1,177



1,305Merchant credit card processing


157



151



145Gain on sales of securities
    available-for-sale










15Other commissions and fees


141



128



136Net earnings on bank owned life
    insurance


226



90



Other noninterest income


139



147



108Total noninterest income


1,828



1,693



1,709Noninterest expenseSalaries and employee benefits


5,416



4,728



4,082Occupancy and equipment


1,811



1,697



1,391Data processing


832



744



727Professional fees


318



391



241Marketing


485



473



393Other outside service fees


428



383



253State revenue and sales tax expense


358



306



257Loss on other real estate owned










132Loss on disposal of equipment


28







Other noninterest expense


1,274



1,428



1,126Total noninterest expense


10,950



10,150



8,602Income before income
    taxes


2,603



1,383



1,888Income tax expense


784



417



606Net income

$
1,819


$
966


$
1,282Basic earnings per share

$
0.89


$
0.48


$
0.64Diluted earnings per share

$
0.88


$
0.47


$
0.63    38




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY
 Years Ended December 31, 2006, 2005, and 2004
  Common





AccumulatedCommon


Stock





Other


TotalStock


and


Retained


Comprehensive


StockholdersShares


Surplus


Earnings


Income (Loss)


Equity(In thousands, except per share data)Balance at January 1,
    2004


1,190,366


$
15,854


$
778


$
(49
)

$
16,583Comprehensive incomeNet income










1,282







1,282Change in net unrealized gain
    (loss) on securities available for sale, net of reclassification
    and tax effects














(71
)


(71
)Total comprehensive income


















1,211Cash dividends ($.192 per
    share)










(382
)






(382
)Stock split
    (five-for-four)


298,645















Repurchase of fractional shares


(296
)


(7
)










(7
)Exercise of stock options


5,606



69











69Tax benefit from stock related
    compensation






11











11Balance at December 31,
    2004


1,494,321



15,927



1,678



(120
)


17,485Comprehensive incomeNet income










966







966Change in net unrealized gain
    (loss) on securities available for sale, net of reclassification
    and tax effects














(336
)


(336
)Total comprehensive income


















630Cash dividends ($.228 per
    share)










(457
)






(457
)Stock split
    (four-for-three)


500,165















Repurchase of fractional shares


(471
)


(7
)










(7
)Exercise of stock options


6,452



71











71Tax benefit from stock related
    compensation






14











14Balance at December 31,
    2005


2,000,467



16,005



2,187



(456
)


17,736Adjustment to apply
    SAB No. 108, net of tax










(51
)






(51
)Comprehensive incomeNet income










1,819







1,819Change in net unrealized gain
    (loss) on securities available for sale, net of reclassification
    and tax effects














50



50Total comprehensive income


















1,869Adjustment to initially apply
    SFAS No. 158, net of tax (Note 13)














(357
)


(357
)Cash dividends ($.25 per
    share)










(502
)






(502
)Equity offering subscriptions


310,547



4,547











4,547Exercise of stock options


42,248



381











381Tax benefit from stock related
    compensation






73











73Stock options earned






123











123Balance at December 31,
    2006


2,353,262


$
21,129


$
3,453


$
(763
)

$
23,819    39




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME
  Years Ended December 31,2006


2005


2004(In thousands)Net income

$
1,819


$
966


$
1,282Other comprehensive income:Change in unrealized gain (loss)
    on securities available for sale


75



(509
)


(91
)Reclassification adjustment for
    gains included in net income










(15
)Net unrealized gains (losses)


75



(509
)


(106
)Tax effect


(25
)


173



35Total other comprehensive income
    (loss)


50



(336
)


(71
)Total comprehensive income

$
1,869


$
630


$
1,211    40




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Years Ended December 31,2006


2005


2004(In thousands)Cash flows from operating
    activitiesNet income

$
1,819


$
966


$
1,282Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation


854



801



663Provision for loan losses


810



423



321Gain from sales of securities










(15
)Write-down of other real estate
    owned










132Loss on disposal of equipment


28







Amortization of premiums and
    discounts on securities


41



64



79Federal Home Loan Bank stock
    dividends






(6
)


(40
)Dividends reinvested






(190
)


(349
)Net earnings on bank owned life
    insurance


(226
)


(90
)


Stock option compensation expense


123







Other changes, net


79



(342
)


694Net cash provided by operating
    activities


3,528



1,626



2,767Cash flows from investing
    activitiesProceeds from sales, maturities
    and principal payments on securities available for sale


4,186



2,368



6,390Purchases of securities available
    for sale


(133
)


(1,125
)


(1,523
)Purchases of loans


(5,753
)


(13,882
)


Net loan originations


(97,590
)


(15,904
)


(21,258
)Purchase of bank owned life
    insurance






(5,000
)


Proceeds from sale of other real
    estate owned










2,527Purchases of premises and equipment


(781
)


(1,404
)


(770
)Net cash used in investing
    activities


(100,071
)


(34,947
)


(14,634
)Cash flows from financing
    activitiesNet increase in deposits


56,545



26,089



21,118Net decrease in federal funds
    purchased










(3,097
)Proceeds from Federal Home
    Loan Bank advances


36,900



16,900



Repayments of Federal Home
    Loan Bank advances


(13,944
)


(4,118
)


(4,314
)Proceeds from the issuance of
    trust preferred securities, net


7,217







Proceeds from equity offering, net
    of offering costs


4,547







Repurchase of common stock






(7
)


(7
)Proceeds from exercise of stock
    options


381



71



69Dividends paid


(502
)


(457
)


(382
)Net cash provided by financing
    activities


91,144



38,478



13,387Net increase (decrease) in cash
    and cash equivalents


(5,399
)


5,157



1,520Cash and cash equivalents at
    beginning of year


17,302



12,145



10,625Cash and cash equivalents at
    end of year

$
11,903


$
17,302


$
12,145Supplemental disclosures of
    cash flow informationInterest paid

$
7,678


$
3,292


$
2,203Income taxes paid


1,110



810



326    41




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
  Note 1:
    Summary
    of Significant Accounting Policies  Organization.
    Operating Segments.
  Holding Company Information.
  Principles of Consolidation and Use of
    Estimates.
    Cash and Cash Equivalents.
  Securities. available-for-sale
    other-than-temporary
 42




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Loans.
      Allowance for Loan Losses.
  non-classified
    Premises and Equipment.
  Bank Owned Life Insurance.
  Foreclosed Assets.
  Federal Home Loan Bank (FHLB)
    stock.
 43




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Income Taxes.
  Comprehensive Income.
  Postretirement Health Care Benefits. Employers
    Accounting for Defined Benefit Pension and Other Postretirement
    Plans  an amendment of FASB Statements No. 87,
    88, 106, and 132(R)
  Before Application of





After Application ofSFAS No. 158


Adjustments


SFAS No. 158(In thousands)Liability for pension benefits

$
1,678


$
541


$
2,219Deferred federal income tax asset


2,039



184



2,223Total liabilities


319,160



541



319,701Accumulated other comprehensive
    income


(406
)


(357
)


(763
)Total stockholders equity

$
24,176


$
(357
)

$
23,819       Fair Values of Financial Instruments.
  Loan Commitments and Related Financial
    Instruments.
  Loss Contingencies.
  Stock-Based Compensation. Share-based Payment
 44




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Accounting for Stock-Based
    Compensation
  2005


2004(In thousands, except per share data)Net income as reported

$
966


$
1,282Deduct: Stock-based compensation
    expense determined under fair value based method


64



52Pro forma net income

$
902


$
1,230Basic earnings per share as
    reported

$
0.48


$
0.64Pro forma basic earnings per share


0.45



0.62Diluted earnings per share as
    reported


0.47



0.63Pro forma diluted earnings per
    share


0.44



0.61   Earnings Per Share.
  Dividend Restriction.
  Reclassifications.
  Adoption
    of new accounting standards:
  Stock-based
    Compensation
  Employers Accounting for
    Defined Benefit Pension and Other Postretirement
    Plans  an amendment of FASB Statements No. 87,
    88, 106, and 132(R).
  Considering the
    Effects of Prior Year Misstatements when Quantifying
    Misstatements in Current Year Financial Statements
 45




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Effect
    of Newly Issued But Not Yet Effective Accounting
    Standards:
  Accounting for Certain Hybrid Financial Instruments-an
    amendment to FASB Statements No. 133 and 140
  Accounting for Servicing of Financial Assets-an amendment of
    FASB Statement No. 140 available-for-sale
  Fair Value Measurements
 46




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
  No. 06-4,
  No. 06-5, Bulletin No. 85-4
  Note 2:
    Restrictions
    on Cash and Due from Banks   47




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 3:
    Securities  available-for-sale
  Gross


GrossFair


Unrealized


UnrealizedValue


Gains


LossesDecember 31, 2006U.S. agencies

$
4,478


$
1


$
(27
)States and political subdivisions


4,142



1



(45
)Mortgage-backed securities and
    collateralized mortgage obligations


4,567



1



(134
)USM Ultra Short Mortgage Fund


14,793







(413
)Federal Home Loan Bank stock


1,551







Total securities
    available-for-sale

$
29,531


$
3


$
(619
)December 31, 2005U.S. agencies

$
7,394


$



$
(116
)States and political subdivisions


4,454



2



(52
)Mortgage-backed securities and
    collateralized mortgage obligations


5,461



2



(144
)USM Ultra Short Mortgage Fund


14,823







(383
)Federal Home Loan Bank stock


1,418







Total securities
    available-for-sale

$
33,550


$
4


$
(695
)   available-for-sale
  Fair ValueDue in one year or less

$
2,779Due after one year through five
    years


5,050Due after five years through ten
    years


791Total


8,620USM Ultra Short Mortgage Fund


14,793Mortgage-backed securities and
    collateralized mortgage obligations


4,567Federal Home Loan Bank stock


1,551Total

$
29,531   available-for-sale
  2006


2005


2004Proceeds

$



$



$
2,525Gross gains










25Gross losses










(10
)    48




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Less than


12 Months12 Months


or More


TotalFair


Unrealized


Fair


Unrealized


Fair


UnrealizedDescription of Securities

Value


Loss


Value


Loss


Value


LossUS agencies

$



$



$
3,477


$
(27
)

$
3,477


$
(27
)State and political subdivisions


135



(1
)


3,663



(44
)


3,798



(45
)Mortgage-backed securities


315



(1
)


4,021



(133
)


4,336



(134
)USM Ultra Short Mortgage Fund










14,793



(413
)


14,793



(413
)Total temporarily impaired

$
450


$
(2
)

$
25,954


$
(617
)

$
26,404


$
(619
)         Less than


12 Months12 Months


or More


TotalFair


Unrealized


Fair


Unrealized


Fair


UnrealizedDescription of Securities

Value


Loss


Value


Loss


Value


LossUS agencies

$
496


$
(4
)

$
6,898


$
(112
)

$
7,394


$
(116
)State and political subdivisions


3,278



(41
)


694



(11
)


3,972



(52
)Mortgage-backed securities


436



(3
)


4,755



(141
)


5,191



(144
)USM Ultra Short Mortgage Fund


188



(2
)


14,635



(381
)


14,823



(383
)Total temporarily impaired

$
4,398


$
(50
)

$
26,982


$
(645
)

$
31,380


$
(695
)  49




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 4:
    Loans      2006


2005Commercial

$
85,067


$
61,921Real estate mortgage


154,945



105,097Real estate construction


34,813



6,953Consumer


17,328



14,939Other including overdrafts


296



278Total

$
292,449


$
189,188     Fixed


VariableRate


Rate


TotalDue in one year or less

$
15,293


$
138,203


$
153,496Due after one year through five
    years


32,020



61,902



93,922Due after five years


39,870



4,695



44,565Total

$
87,183


$
204,800


$
291,983Loans on which the accrual of
    interest has been discontinued










466Total









$
292,449      50




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##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Beginning balance

$
72Repayments


(104
)Additions


207Removal of loans*


(36
)Ending balance

$
139     *
    
    Loans removed during 2006 were loans to directors and officers
    no longer employed with the Company.  Note 5:
    Allowance
    for Loan Losses    2006


2005


2004Balance at January 1

$
2,056


$
1,887


$
1,636Recoveries credited to the
    allowance


36



40



100Provision for loan losses


810



423



321Loans charged off


(118
)


(294
)


(170
)Balance at December 31

$
2,784


$
2,056


$
1,887     2006


2005Impaired loans for which no
    allowance for loan losses was
    allocated

$



$
516Impaired loans with an allocation
    of the allowance for loan 
    losses


123



219Total

$
123


$
735Amount of the allowance for loan
    losses allocated

$
51


$
37   2006


2005Average of impaired loans during
    the year

$
70


$
648Interest income recognized during
    impairment






93Cash-basis interest income
    recognized






93     2006


2005Loans past due 90 days or
    more and still accruing

$
31


$
414Loans accounted for on a
    nonaccrual basis


466



735If interest on these nonaccrual
    loans had been recognized, such income would have been


50



29    51




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##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 6:
    Premises
    and Equipment    2006


2005Equipment and furniture

$
4,850


$
4,623Leasehold improvements


3,447



2,959Accumulated depreciation and
    amortization


(5,219
)


(4,403
)Total

$
3,078


$
3,179     Note 7:
    Deposits      2007

$
95,3902008


16,6182009


3,4992010


2,7622011


1,7002012


529Total

$
120,498  52




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 8:
    Borrowings
    and Junior Subordinated Debt    December 31,2006


2005Weighted





WeightedAverage Rate


Amount


Average Rate


AmountAdvances from the FHLB due2006



%

$




4.74
%

$
5,5802007


5.38



22,620



4.64



5,0842008


4.82



7,185



4.10



2,1852009


4.77



3,000



4.77



3,0002010


4.91



2,000



4.91



2,0002011


5.14



3,000



4.96



2,0002012


5.18



3,000



4.98



2,0002013


5.25



2,000



4.92



1,0002014


5.36



2,500



4.95



1,0002015


5.67



1,500







Total


5.21
%

$
46,805



4.73
%

$
23,849          53




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##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Note 9:
    Stockholders
    Equity  , five-for-four five-for-four
  four-for-three four-for-three
    Note 10:
    Income
    Taxes    2006


2005


2004Currently payable

$
1,471


$
595


$
816Deferred


(687
)


(178
)


(210
)Total

$
784


$
417


$
606  54




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##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2005


2004Federal income tax at statutory
    rates

$
877


$
470


$
642Decrease in taxes resulting from
    tax-exempt interest income


(31
)


(39
)


(30
)Bank owned life insurance


(77
)


(31
)


Nondeductible expenses and other


15



17



(6
)Total

$
784


$
417


$
606     2006


2005Deferred tax assetProvision for loan losses

$
840


$
607Postretirement health care benefits


570



556Unamortized loan fees, net of loan
    costs


443



265Accrued vacation pay


121



108Unrealized losses on securities
    available-for-sale
    net


209



235SFAS 158 adjustment for
    postretirement health care benefits


184



Other


118



2,485



1,771Deferred tax liabilityFederal Home Loan Bank stock
    dividends

$
(262
)

$
(262
)Depreciation






(121
)Other






(10
)(262
)


(393
)Net deferred income tax asset

$
2,223


$
1,378   Note 11:
    Stock
    Option Plan     55




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##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2006


2005


2004Risk-free interest rate


4.94
%


3.94
%


3.65
%Expected option life


7.5 years



7.5 years



7.5 yearsExpected stock price volatility


24
%


22
%


13
%Dividend yield


1.7
%


1.7
%


1.8
%     Weighted-


Weighted AverageAverage


Remaining


AggregateShares


Exercise Price


Contractual Term


Intrinsic ValueOutstanding at the beginning
    of the year


228,250


$
9.32Granted


38,500



14.31Exercised


(42,248
)


9.00Forfeited


(17,068
)


8.66Outstanding at the end of
    the year


207,434


$
10.37



5.94 years


$
960,419Exercisable at the end of
    the year


115,419


$
8.14



4.86 years


$
791,774     2006


2005


2004(In thousands, except fair value of options granted)Intrinsic value of options
    exercised

$
243


$
41


$
32Cash received from option exercises


381



71



69Tax benefit realized from option
    exercises


82



14



11Weighted average fair value of
    options granted


4.49



3.68



1.94      56




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##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 12:
    Earnings
    Per Share of Common Stock      2006


2005


2004Income (numerator):Net Income

$
1,819


$
966


$
1,282Shares (denominator):Weighted average number of common
    stock shares outstanding  basic


2,043,375



1,997,429



1,988,979Dilutive effect of outstanding
    employee and
    director stock options


27,190



45,276



34,502Weighted average number of common
    stock shares outstanding and assumed conversions 
    diluted


2,070,565



2,042,705



2,023,481Basic earnings per share of common
    stock

$
0.89


$
0.48


$
0.64Diluted earnings per share of
    common stock

$
0.88


$
0.47


$
0.63     Note 13:
    Retirement
    Benefits     57




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##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006


2005


2004Service cost

$
163


$
126


$
90Interest cost


114



95



87Amortization of transition
    obligation










41Amortization of prior service cost


(5
)


(5
)


Recognized actuarial (gain) loss


31



20



Net periodic benefit cost

$
303


$
236


$
218       2006


2005


2004Benefit obligation at beginning of
    year

$
1,928


$
1,605


$
1,337Service cost


163



125



90Interest cost


114



95



87Plan participants
    contributions


3



3



Amendments






(396
)


Actuarial loss


55



533



128Benefits paid


(44
)


(37
)


(37
)Benefit obligation at end of year

$
2,219


$
1,928


$
1,605     2006


2005


2004Fair value of plan assets at
    beginning of year

$



$



$
Employer contribution


40



37



37Plan participants
    contributions


4







Benefits paid


(44
)


(37
)


(37
)Fair value of plan assets at end
    of year

$



$



$
     2006


2005


2004Funded status

$
(2,219
)

$
(1,928
)

$
(1,605
)Unrecognized transition obligation










326Unrecognized prior service cost






(66
)


Unrecognized actuarial (gain ) loss






577



60Accrued benefit cost

$
(2,219
)

$
(1,417
)

$
(1,219
)  58




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Prepaid benefit cost

$
1,417Accrued benefit cost


Intangible assets


Accumulated other comprehensive
    income


Net amount recognized

$
1,417     Net loss (gain)

$
602Prior service cost (credit)


(61
)$
541             1-Percentage-


1-Percentage-Point


PointIncrease


DecreaseEffect on total of service and
    interest cost components

$
69


$
(53
)Effect on benefit obligation

$
464


$
(365
)     2007

$
442008


492009


552010


622011


692012


772013-2017


609  59




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 14:
    Leases  month-to-month
    2007

$
6352008


5912009


5542010


4812011


424Thereafter


865Total

$
3,550   Note 15:
    Agreements
    with Related Parties            Note 16:
    Commitments
    and Contingencies   60




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         2006


2005Fixed


Variable


Fixed


VariableLines of credit

$
9,523


$
71,785


$
6,696


$
40,250Commitments to extend credit


2,750



133







5,340Standby letters of credit and
    similar arrangements






339







145     Note 17:
    Fair
    Values of Financial Instruments    2006


2005Book


Fair


Book


FairValue


Value


Value


ValueFinancial assetsCash and cash equivalents

$
11,903


$
11,903


$
17,302


$
17,302Securities
    available-for-sale


29,531



29,531



33,550



33,550Net loans


289,665



290,101



187,132



185,596Accrued interest receivable


1,454



1,454



931



931Financial liabilitiesDeposits

$
256,435


$
256,520


$
199,890


$
199,820Advances from Federal Home
    Loan Bank


46,805



46,894



23,849



23,702Junior subordinated debt


12,217



12,217



5,000



5,000Accrued interest payable


920



920



347



347      61




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 18:
    Regulatory
    Capital Requirements       62




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Minimum to beWell CapitalizedMinimum for


Under the PromptCapital Adequacy


Corrective ActionActual


Purposes


ProvisionsAmount


Ratio


Amount


Ratio


Amount


RatioDecember 31,
    2006Total capital (to risk-weighted
    assets)
    Consolidated

$
39,310



13.20
%

$
23,819



8.00
%


N/A



N/ABank


38,504



12.94



23,795



8.00


$
29,744



10.00
%Tier 1 capital (to
    risk-weighted assets)
    Consolidated


32,412



10.89



11,910



4.00



N/A



N/ABank


35,720



12.01



11,898



4.00



17,847



6.00Tier 1 capital (to average
    assets)(1)
    Consolidated


32,412



9.92



13,074



4.00



N/A



N/ABank


35,720



11.15



12,817



4.00



16,022



5.00December 31,
    2005Total capital (to risk-weighted
    assets)
    Consolidated

$
24,997



12.55
%

$
15,939



8.00
%


N/A



N/ABank


24,626



12.39



15,898



8.00


$
19,873



10.00
%Tier 1 capital (to
    risk-weighted assets)
    Consolidated


22,941



11.51



7,953



4.00



N/A



N/ABank


22,570



11.36



7,949



4.00



11,924



6.00Tier 1 capital (to average
    assets)(1)
    Consolidated


22,941



10.25



8,952



4.00



N/A



N/ABank


22,570



10.10



8,935



4.00



11,169



5.00     (1)
    
    Also referred to as the leverage ratio  Note 19:
    Condensed
    Financial Statements of Bancorp   63




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006


2005AssetsDue from EvergreenBank

$
663


$
285Investment in EvergreenBank


35,267



22,365Other assets


548



413Total assets

$
36,478


$
23,063Liabilities and
    Stockholders EquityStockholders equity

$
23,819


$
17,736Junior subordinated debt


12,217



5,000Other liabilities


442



327Total liabilities and
    stockholders equity

$
36,478


$
23,063     2006


2005


2004Dividend income from EvergreenBank

$
845


$
870


$
495Interest expense


491



345



253Other expense


577



453



370Income (loss) before income taxes
    and equity in
    undistributed income of EvergreenBank


(223
)


72



(128
)Income tax benefit


366



243



208Equity in undistributed income of
    EvergreenBank


1,676



651



1,202Net income

$
1,819


$
966


$
1,282  64




---



##### Table of Contents



EVERGREENBANCORP,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2005


2004Cash flows from operating
    activitiesNet income

$
1,819


$
966


$
1,282Adjustments to reconcile net
    income to net cash provided by operating activitiesEquity in undistributed income of
    EvergreenBank


(1,676
)


(651
)


(1,202
)Stock option compensation expense


123







Other changes, net


233



(75
)


146Net cash provided by operating
    activities


499



240



226Cash flows from investing
    activitiesCapital contributed to
    EvergreenBank


(11,547
)






Investment in EvergreenBancorp
    Capital Trust II


(217
)






Cash flows used in investing
    activities


(11,764
)






Cash flows from financing
    activitiesPayment of dividends


(502
)


(457
)


(382
)Repurchase of fractional shares






(7
)


(7
)Proceeds from issuance of
    subordinated debt


7,217







Proceeds from equity offering, net
    of offering costs


4,547







Proceeds from the issuance of
    common stock


381



71



69Net cash provided by (used in)
    financing activities


11,643



(393
)


(320
)Net increase (decrease) in cash


378



(153
)


(94
)Cash on deposit with EvergreenBank
    at beginning of year


285



438



532Cash on deposit with EvergreenBank
    at end of year

$
663


$
285


$
438   Note 20:
    Selected
    Quarterly Data (Unaudited)  Quarter EndedMarch 31


June 30


September 30


December 31(In thousands, except per share data)2006Interest income

$
4,253


$
4,834


$
5,540


$
6,159Net interest income


2,801



2,981



3,258



3,495Net income


318



391



517



593Basic earnings per share


0.16



0.20



0.26



0.28Diluted earnings per share


0.16



0.19



0.25



0.272005Interest income

$
3,179


$
3,287


$
3,513


$
3,733Net interest income


2,461



2,498



2,608



2,696Net income


299



214



201



252Basic earnings per share


0.15



0.10



0.10



0.13Diluted earnings per share


0.15



0.10



0.10



0.12  65




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Rule 13a-15(e)
   PART III  Item 10.
    Directors,
    Executive Officers of the Registrant, and Corporate
    Governance    Item 401(h)(2)-(3) Regulation S-K.
  Form 10-K
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Shareholder Matters    Item 13.
    Certain
    Relationships and Related Transactions   66




---



##### Table of Contents



Item 14.
    Principal
    Accounting Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements
    Financial Statement Schedules
    Exhibits
  Exhibit No.

Description3
.1

Restated Articles of Incorporation
    of Registrant dated July 25, 2001 (incorporated by
    reference to Registrants
    Form 10-K
    for the year ended December 31, 2001)3
.2

Bylaws of Registrant dated
    February 14, 2001 (incorporated by reference to
    Registrants
    Form 10-K
    for the year ended December 31, 2001)10
.1

Second Amended and Restated 2000
    Stock Option and Equity Compensation Plan dated April 20,
    200610
.2

Incentive Stock Option Letter
    Agreement (incorporated by reference to Registrants
    Form S-8
    Filed August 20, 2001; Reg.
    No. 333-67956)10
.3

Nonqualified Stock Option Letter
    Agreement (incorporated by reference to Registrants
    Form S-8
    Filed August 20, 2001; Reg.
    No. 333-67956)10
.4

Directors Nonqualified Stock
    Option Letter Agreement (incorporated by reference to
    Registrants
    Form S-8
    Filed August 20, 2001; Reg.
    No. 333-67956)10
.5

PEMCO Deferred Compensation Plan
    dated as of December 17, 1998 and adopted by Registrant
    effective June 20, 2001 (incorporated by reference to
    Registrants
    Form 10-K
    for the year ended December 31, 2001)10
.6

PEMCO Directors Deferred
    Compensation Plan dated as of December 17, 1998 and adopted
    by Registrant effective June 20, 2001 (incorporated by
    reference to Registrants
    Form 10-K
    for the year ended December 31, 2001)10
.7

Form of Change of Control
    Severance Agreement effective May 24, 2005 between the Bank
    and Gerald O. Hatler (incorporated by reference to
    Registrants
    Form 8-K
    filed May 27, 2005)10
.8

Form of Change of Control
    Severance Agreement effective February 2, 2006 between the
    Bank and each of Michelle P. Worden and Valerie K. Blake
    (incorporated by reference to Registrants
    Form 8-K
    filed February 8, 2006)10
.9

Form of Change of Control
    Severance Agreement effective September 21, 2006 between
    the Bank and Gordon D. Browning (incorporated by reference to
    the Registrants
    Form 8-K
    filed September 27, 2006)10
.10

Form of Change of Control
    Severance Agreement effective October 24, 2006 between the
    Bank and Michael H. Tibbits (incorporated by reference to the
    Registrants
    Form 8-K
    filed October 26, 2006)10
.11

Transition Agreement between
    EvergreenBank and William G. Filer dated June 8, 2006
    (incorporated by reference to
    Exhibit 10-1
    of the Registrants Current Report on
    Form 8-K
    filed June 12, 2006)10
.12

Form of Restricted Stock Award
    Agreement14


Code of Ethics for Senior
    Financial Officers (incorporated by reference to
    Registrants
    Form 10-K
    for the year ended December 31, 2003) 67




---



##### Table of Contents



Exhibit No.

Description21


Subsidiaries of the Registrant23
.1

Independent Auditors
    Consent  Crowe Chizek and Company LLC31
.1

Certification of Chief Executive
    Officer of Registrant required by
    Rule 13a-14(a)/15d-14(a),
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200231
.2

Certification of Chief Financial
    Officer of Registrant required by
    Rule 13a-14(a)/15d-14(a),
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200232
.1

Certification of Chief Executive
    Officer of Registrant required by 18 U.S.C. Section 1350,
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200232
.2

Certification of the Chief
    Financial Officer of Registrant required by 18 U.S.C.
    Section 1350, adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002  68




---



##### Table of Contents



SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the
    Securities Exchange Act of 1934, the registrant has duly caused
    this report to be signed on its behalf by the undersigned,
    thereunto duly authorized on this 15th day of March, 2006.



EVERGREENBANCORP, INC. By:
    /s/  GERALD
    O. HATLER   President and Chief Executive Officer
    Signature

Title/s/  GERALD
    O. HATLERGerald
    O. Hatler

President, Chief Executive Officer
    and Director
    (Principal Executive Officer)/s/  GORDON
    D. BROWNINGGordon
    D. Browning

Executive Vice President and Chief
    Financial Officer
    (Principal Accounting Officer)/s/  RICHARD
    W. BALDWINRichard
    W. Baldwin

Director/s/  CRAIG
    O. DAWSONCraig
    O. Dawson

Director/s/  C.
    DON FILERC.
    Don Filer

Director/s/  CAROLE
    J. GRISHAMCarole
    J. Grisham

Director/s/  ROBERT
    J. GROSSMANRobert
    J. Grossman

Director/s/  STAN
    W. MCNAUGHTONStan
    W. McNaughton

Director/s/  RUSSEL
    E. OLSONRussel
    E. Olson

Director/s/  JOSEPH
    M. PHILLIPSJoseph
    M. Phillips

Director  69