EXHIBIT 10.2
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                              CONSULTING AGREEMENT

            This Consulting Agreement (the "Agreement"), dated (8/30/02), is
made between Columbia Bank, a state chartered banking institution (the "Bank"),
and J. James Gallagher (the "Consultant").

                                    RECITALS
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            WHEREAS, the Bank desires to engage the Consultant as an independent
contractor to provide services described hereinafter; and

            WHEREAS, the Consultant's experience and knowledge of the affairs of
the Bank and the banking industry are extensive and particularly valuable in
connection with the services sought to be obtained by the Bank from the
Consultant.

            NOW, THEREFORE, in consideration of the mutual promises of the
parties and other good and valuable consideration, the parties hereby agree as
follows:


                                    AGREEMENT
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            1. ENGAGEMENT. The Bank hereby engages the Consultant to (a)
represent and promote the goodwill of the Bank and its affiliates in the
Washington communities served by the Bank and its affiliates, (b) maintain
communication with management by meeting twice annually with the President and
Chairman of the Board of the Bank at their invitation, (c) provide consultation
on banking matters as an experienced bank executive, and (d) comply with all
written policies of the Bank applicable to his activities as a Consultant or
otherwise. The Consultant shall not participate in establishing or administering
Bank policy. There shall be no "on premises" requirement for Consultant.

            2. TERM. The term of this Agreement shall commence on July 1, 2002
and shall terminate on August 1, 2004, unless otherwise agreed in writing
between the Bank and the Consultant.

            3. COMPENSATION. In consideration, Consultant shall be paid at an
annual rate of Two Hundred Thirty Five Thousand Dollars ($235,000), in
proportionate monthly installments. Consultant shall be responsible for all
state, federal, and local taxes, including estimated taxes, and employment
reporting for Consultant and any agents, employees, associates or subcontractors
of Executive. Consultant agrees to indemnify and hold harmless Bank to the
fullest extent permitted by law against and from any and all liability for such
taxes, reporting or other similar costs or expenses arising from or related to
the services provided by Consultant during the term of this agreement and any
agents, employees, associates or subcontractors of Consultant pursuant to
providing consulting services under this Agreement.

            4. RELATIONSHIP OF THE PARTIES. The Bank and the Consultant
acknowledge and agree that it is their mutual intent that the relationship of
the Consultant to the Bank under this Agreement is that of an independent
contractor only. The parties expressly acknowledge and

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agree that the Consultant is not to be considered an agent or employee of the
Bank for any purpose whatsoever, and that the Bank is interested only in the
results sought to be obtained from the services to be provided by the Consultant
pursuant to this Agreement. The parties further acknowledge and agree that the
manner and means of performing the services under this Agreement are subject to
the sole control and discretion of the Consultant. The services of the
Consultant under this Agreement shall be considered "employment" for purposes of
the ESCA, the Award Agreement, and the Life Insurance Agreement, as those terms
are defined in the Separation and Release Agreement between Bank and Consultant.

            The Bank will provide to the Consultant such information as it deems
appropriate and sufficient to assure that the Consultant will be reasonably
informed to the extent necessary to carry out his duties hereunder; provided,
however, that without the express consent of the Bank's Board of Directors, the
Consultant shall not be entitled to confidential information regarding the Bank
and its affiliates and their business, financial condition and operations as is
customarily and in the ordinary course of business provided to directors of the
Bank. The Consultant shall not, by reason of the provisions of this agreement,
be entitled to attend meetings of the Board of Directors or committees of the
Bank or its affiliates, except by invitation in each instance approved by the
full Board of Directors of the Bank or its affiliate, as the case may be.

            5. ASSIGNMENT TO J. JAMES GALLAGHER & COMPANY. Consultant may elect,
at his discretion, to perform his consulting duties described in this Agreement
in the name of, and have the corresponding payments required to be made by Bank
made to, J. James Gallagher & Company, a company wholly owned and controlled by
Consultant so long as (a) the services are in fact provided by Consultant, (b)
this Consulting Agreement terminates on the death of Consultant, and (c) J.
James Gallagher & Company agrees to comply with the confidentiality and
proprietary rights provisions of this Agreement.

            6. PROPRIETARY RIGHTS. The Consultant agrees that all documentation,
manuals, materials, creative works, inventions, know-how, and information
created at the request of the Bank, in whole or in part, by the Consultant
and/or the Consultant's agents, employees, associates, or subcontractors in
connection with the services rendered pursuant to this Agreement, whether or not
copyrightable or otherwise protectable (the "Work Product"), shall be deemed
"work made for hire." The Consultant shall cause all such agents, employees,
associates, or subcontractors assisting in creating the Work Product to execute
a similar acknowledgment that the Work Product is a "work made for hire." The
Consultant and all of such agents, employees, associates, or subcontractors
assisting in creating the Work Product shall execute all such assignments,
oaths, declarations, and other documents as may be prepared by the Bank to
effectuate the foregoing agreement.

            The Consultant further agrees to make prompt and full disclosure of
such Work Product to the Bank and, at the Bank's expense, shall assist in every
lawful way in (i) obtaining for the Bank intellectual property protection
including any copyrights, trademarks, patents or other similar protections for
any or all of such Work Product as the Bank may request, (ii) perfecting in the
Bank all right, title, and interest in and to such Work Product, (iii)
protecting or enforcing the Bank's rights in and to the Work Product, and (iv)
prosecuting and defending the Bank's rights in and to the Work Product in any
legal, administrative, arbitration or other proceedings including any appeals
related thereto and any other controversies relating to the Work Product.

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The Consultant shall do all other things necessary to effectuate the foregoing,
including but not limited to executing and delivering any and all documents
including assignments, oaths, and disclaimers as the Bank may request in
furtherance of the foregoing.

            7. CONFIDENTIALITY. The Consultant and any agents, employees,
associates or subcontractors of the Consultant shall maintain in strict
confidence (a) the consulting work and services provided hereunder, (b) any Work
Product related hereto, and (c) any business or technical information of the
Bank acquired by the Consultant as a result of the consulting work and services
provided pursuant to this Agreement, and neither the Consultant nor any such
agents, employees, associates or subcontractors shall, without the Bank's prior
written consent, directly or indirectly use, publish, or disclose to others any
of the foregoing and all other data, designs, results, or opinions resulting
from the consulting work and services provided pursuant to this Agreement. The
foregoing obligations of confidentiality shall survive the expiration of this
Agreement.

            8. RECORDS. All records, sketches, drawings, prints, computations,
charts, reports, and other documentation made in the course of the consulting
work performed hereunder, or in anticipation of the consulting work to be
performed in regard to this Agreement, shall at all times be and remain the sole
property of the Bank. The Consultant shall turn over to the Bank all copies of
such documentation on request by the Bank.

            9. MISCELLANEOUS PROVISIONS.

            9.1 OPPORTUNITY TO CONSULT WITH INDEPENDENT ADVISORS. The Consultant
acknowledges that the Consultant has been afforded the opportunity to consult
with independent advisors of his or her choosing including, without limitation,
accountants or tax advisors and counsel regarding the terms and conditions of
this Agreement including, without limitation, the effects of any federal or
state taxes, and any other taxes, costs, expenses or liabilities whatsoever
related to this Agreement, which the Consultant acknowledges and agrees shall be
the sole responsibility of the Consultant notwithstanding any other term or
provision of this Agreement. The Consultant further acknowledges and agrees that
the Consultant has read, understands and consents to all of the terms and
conditions of this Agreement, and that the Consultant enters into this Agreement
with a full understanding of its terms and conditions.

            9.2 ARBITRATION OF DISPUTES. All claims, disputes and other matters
in question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Bank in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
in Tacoma, Washington. In the event JAMS is unable or unwilling to conduct the
arbitration provided for under the terms of this Paragraph, or has discontinued
its business, the parties agree that a representative member, selected by the
mutual agreement of the parties, of the American Arbitration Bank ("AAA"), in
Tacoma, Washington shall conduct the binding arbitration referred to in this
Paragraph. Notice of the demand for arbitration shall be filed in writing with
the other party to this Agreement and with JAMS (or AAA, if necessary). In no
event shall the demand for arbitration be made after the date when institution
of legal or equitable proceedings based on such claim, dispute or other matter
in question would be barred by the applicable statute of

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limitations. The arbitration shall be subject to such rules of procedure used or
established by JAMS, or if there are none, the rules of procedure used or
established by AAA. Any award rendered by JAMS or AAA shall be final and binding
upon the parties, and as applicable, their respective heirs, beneficiaries,
legal representatives, agents, successors and assigns, and may be entered in any
court having jurisdiction thereof. The obligation of the parties to arbitrate
pursuant to this clause shall be specifically enforceable in accordance with,
and shall be conducted consistently with, the provisions of Chapter 7.04 of the
Revised Code of Washington. Any arbitration hereunder shall be conducted in
Tacoma, Washington, unless otherwise agreed to by the parties.

            9.3 ATTORNEYS' FEES. In the event of any arbitration or litigation
concerning any controversy, claim or dispute between the parties hereto, arising
out of or relating to this Agreement or the breach hereof, or the interpretation
hereof, the prevailing party shall be entitled to recover from the
non-prevailing party reasonable expenses, attorneys' fees and costs incurred in
connection therewith or in the enforcement or collection of any judgment or
award rendered therein. The "prevailing party" means the party determined by the
arbitrator(s) or court, as the case may be, to have most nearly prevailed, even
if such party did not prevail in all matters, not necessarily the one in whose
favor a judgment is rendered.

            9.4 NOTICE. Any notice required or permitted of either the
Consultant or the Bank under this Agreement shall be deemed to have been duly
given, if by personal delivery, upon the date received by the party or its
authorized representative; if by facsimile, upon transmission to a telephone
number previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

                If to the Bank:            Columbia Bank
                                           P.O. Box 2156 - MS 3100
                                           Tacoma, WA  98401-2156
                                           Attn:  Executive Secretary

                If to the Consultant:      J. James Gallagher
                                           /address of record/

            9.5 ASSIGNMENT. The parties acknowledge and agree that the services
to be provided by the Consultant hereunder are of a unique and special nature
and that no assignment or transfer of the Consultant's rights or obligations
shall be permitted without the express written consent of the Bank which the
Bank may withhold in its discretion. The Bank's consent to one assignment shall
not constitute a consent to any subsequent assignment. Any attempted assignment
or transfer without the consent of the Bank shall be void and unenforceable and
shall, at the election of the Bank, terminate this Agreement and release the
Bank from any liability hereunder.

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            9.6 BINDING EFFECT/MERGER OR REORGANIZATION. This Agreement shall be
binding upon and inure to the benefit of the Consultant and the Bank and, as
applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns. Accordingly, the Bank shall not merge or
consolidate into or with another corporation, or reorganize or sell
substantially all of its assets to another corporation, firm or person, unless
and until such succeeding or continuing corporation, firm or person agrees to
assume and discharge the obligations of the Bank under this Agreement. Upon the
occurrence of such event, the term "Bank" as used in this Agreement shall be
deemed to refer to such surviving or successor firm, person, entity or
corporation.

            9.7 NON-WAIVER. The failure of either party to enforce at any time
or for any period of time any one or more of the terms or conditions of this
Agreement shall not be a waiver of such term(s) or condition(s) or of that
party's right thereafter to enforce each and every term and condition of this
Agreement.

            9.8 PARTIAL INVALIDITY. If any term, provision, covenant, or
condition of this Agreement is determined by an arbitrator or a court, as the
case may be, to be invalid, void, or unenforceable, such determination shall not
render any other term, provision, covenant or condition invalid, void or
unenforceable, and the Agreement shall remain in full force and effect
notwithstanding such partial invalidity.

            9.9 ENTIRE AGREEMENT. This Agreement, contains all of the covenants
and agreements, and supersedes any and all other agreements, either oral or in
writing, between the parties with respect to the subject matter of this
Agreement. Each party to this Agreement acknowledges that no other
representations, inducements, promises, or agreements, oral or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
set forth herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding on either party.

            9.10 MODIFICATIONS. Any modification of this Agreement shall be
effective only if it is in writing and signed by each party or such party's
authorized representative.

            9.11 PARAGRAPH HEADINGS. The paragraph headings used in this
Agreement are included solely for the convenience of the parties and shall not
affect or be used in connection with the interpretation of this Agreement.

            9.12 NO STRICT CONSTRUCTION. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
person.

            9.13 GOVERNING LAW. The laws of the State of Washington, or, where
applicable, the laws, rules and regulations of the United States, shall govern
the validity, interpretation, construction and effect of this Agreement.

            9.14 FURTHER ACTION. The parties hereto shall execute and deliver
all documents, provide all information and take or forbear from all such action
as may be necessary or appropriate to achieve the purposes of this Agreement.

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            IN WITNESS WHEREOF, the Bank and the Consultant have signed this
Agreement at Tacoma Washington, as of the date first above written.


BANK:                                           CONSULTANT:

Columbia Bank

By: /s/ Melanie J. Dressel                      /s/ J.James Gallagher
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    Melanie J. Dressel, President & CEO             J. James Gallagher






























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