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                                                                      EXHIBIT 10



                                                                       EXHIBIT B


                             STOCK OPTION AGREEMENT

        This Stock Option Agreement ("Agreement"), dated as of February 4, 1998,
is between INTERWEST BANCORP, INC. ("InterWest") and PIONEER BANCORP, INC.
("Pioneer").


                                    RECITALS

        Pioneer and InterWest have executed an Agreement and Plan of Merger
("Plan"), of even date with this Agreement, under which Pioneer will be merged
into InterWest and Pioneer National Bank, the wholly owned subsidiary of
Pioneer, will become a wholly owned subsidiary of InterWest upon completion of
the merger ("Merger") contemplated in the Plan.

        By negotiating and executing the Plan and by taking actions necessary or
appropriate to effect the transactions contemplated by the Plan, InterWest has
incurred and will incur substantial direct and indirect costs (including,
without limitation, the costs of management and employee time) and will forgo
the pursuit of certain alternative investments and transactions.


                                    AGREEMENT

        THEREFORE, in consideration of the promises set forth in this Agreement
and in the Plan, the parties agree as follows:

1.      Grant of Option. Subject to the terms and conditions set forth in this
        Agreement, Pioneer irrevocably grants an option ("Option") to InterWest
        to purchase an aggregate of 85,637 authorized but unissued shares of
        Pioneer's capital stock ("Common Stock") (which if issued, and assuming
        exercise of outstanding options to acquire the Common Stock, would
        represent approximately 19.9% of total stock issued and outstanding), at
        a per share price of $39.35 ("Option Price").

2.      Exercise of Option. Subject to the provisions of this Section 2 and of
        Section 13(a) of this Agreement, this Option may be exercised by
        InterWest or any transferee as set forth in Section 5 of this Agreement,
        in whole or in part, at any time, or from time to time in any of the
        following circumstances:

        (a)   Pioneer or its board of directors enters into an agreement or
              recommends to Pioneer shareholders an agreement (other than the
              Plan) under which any entity, person or group (collectively
              "Person"), within the meaning of Section 13(d)(3) of the
              Securities Exchange Act of 1934, as amended ("Exchange Act"),
              would: (1) merge or consolidate with, acquire 51% or more of the
              assets or liabilities of, or enter into any similar transaction
              with Pioneer, or (2) purchase or otherwise acquire (including by
              merger, reorganization, consolidation, share exchange or any
              similar transaction) securities representing 10% or more of
              Pioneer's voting shares;




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        (b)   any Person (other than InterWest or any of its subsidiaries and
              other than any Person owning as of the date of this Agreement 10%
              or more of Pioneer's voting shares) acquires the beneficial
              ownership or the right to acquire beneficial ownership of
              securities which, when aggregated with other such securities owned
              by such Person, represents 10% or more of the voting shares of
              Pioneer (the term "beneficial ownership" for purposes of this
              Agreement has the meaning set forth in Section 13(d) of the
              Exchange Act, and the regulations promulgated under the Exchange
              Act); notwithstanding the foregoing, the Option will not be
              exercisable in the circumstances described above in this
              subsection 2(b) if a Person acquires the beneficial ownership of
              securities which, when aggregated with other such securities owned
              by such Person, represents 10% or more, but less than 25%, of
              Pioneer's voting shares and the transaction does not result in,
              and is not presumed to constitute, "control" as defined under
              Section 7(j) of the Federal Deposit Insurance Act or 12 CFR Part
              225 or as determined by the Board of Governors of the Federal
              Reserve;

        (c)   failure of the board of directors of Pioneer to recommend, or
              withdrawal by the board of directors of a prior recommendation of,
              the Merger to the shareholders; or

        (d)   failure of the shareholders to approve the Merger by the required
              affirmative vote at a meeting of the shareholders, after any
              Person (other than InterWest or a subsidiary of InterWest)
              announces publicly or communicates, in writing, to Pioneer a
              proposal to (1) acquire Pioneer (by merger, reorganization,
              consolidation, the purchase of 51% or more of its assets or
              liabilities, or any other similar transaction), (2) purchase or
              otherwise acquire securities representing 25% or more of the
              voting shares of Pioneer or (3) change the composition of the
              board of directors of Pioneer.

        It is understood and agreed that the Option will become exercisable on
        the occurrence of any of the above-described circumstances even though
        the circumstance occurred as a result, in part or in whole, of the board
        of Pioneer complying with its fiduciary duties.

        Notwithstanding the foregoing, the Option may not be exercised if either
        (1) any applicable and required governmental approvals have not been
        obtained with respect to such exercise or if such exercise would violate
        any applicable regulatory restrictions, or (2) at the time of exercise,
        InterWest is failing in any material respect to perform or observe its
        material covenants or conditions under the Plan, unless the reason for
        such failure is that Pioneer is failing to perform or observe its
        covenants or conditions under the Plan.

3.      Notice, Time and Place of Exercise. Each time that InterWest or any
        transferee wishes to exercise any portion of the Option, InterWest or
        such transferee will give written notice of its intention to exercise
        the Option specifying the number of shares as to which the Option is
        being exercised ("Option Shares") and the place and date for the closing
        of the




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        exercise (which date may not be later than ten business days from the
        date such notice is mailed). If any law, regulation or other restriction
        will not permit such exercise to be consummated during this ten-day
        period, the date for the closing of such exercise will be within five
        days following the cessation of the restriction on consummation.

4.      Payment and Delivery of Certificate(s). At any closing for an exercise
        of the Option or any portion thereof, (a) InterWest and Pioneer will
        each deliver to the other certificates as to the accuracy, as of the
        closing date, of their respective representations and warranties under
        this Agreement, (b) InterWest or the transferees will pay the aggregate
        purchase price for the shares of Common Stock to be purchased by
        delivery of a certified or bank cashier's check in immediately available
        funds payable to the order of Pioneer, and (c) Pioneer will deliver to
        InterWest or the transferees a certificate or certificates representing
        the shares so purchased.

5.      Transferability of the Option and Option Shares. Before the Option, or a
        portion of the Option, becomes exercisable in accordance with the
        provisions of Section 2 of this Agreement, neither the Option nor any
        portion of the Option will be transferable. If any of the events or
        circumstances set forth in Sections 2(a) through (d) above occur,
        InterWest may freely transfer, subject to applicable federal and state
        securities laws, the Option or any portion of the Option, or any of the
        Option Shares.

        For purposes of this Agreement, a reorganization or consolidation of
        InterWest (whether or not InterWest is the surviving entity) or an
        acquisition of InterWest will not be deemed a transfer.

6.      Representations, Warranties and Covenants of Pioneer. Pioneer represents
        and warrants to InterWest as follows:

        (a)     Due Authorization. This Agreement has been duly authorized by
                all necessary corporate action on the part of Pioneer, has been
                duly executed by a duly authorized officer of Pioneer and
                constitutes a valid and binding obligation of Pioneer. No
                shareholder approval by Pioneer shareholders is required by
                applicable law or otherwise before the exercise of the Option in
                whole or in part.

        (b)     Option Shares. Pioneer has taken all necessary corporate and
                other action to authorize and reserve and to permit it to issue
                and, at all times from the date of this Agreement to such time
                as the obligation to deliver shares under this Agreement
                terminates, will have reserved for issuance, at the closing(s)
                upon exercise of the Option, or any portion of the Option, the
                Option Shares (subject to adjustment, as provided in Section 8
                below), all of which, upon issuance under this Agreement, will
                be duly and validly issued, fully paid and nonassessable, and
                will be delivered free and clear of all claims, liens,
                encumbrances and security interests, including any preemptive
                right of any of the shareholders of Pioneer.




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        (c)     No Conflicts. Neither the execution and delivery of this
                Agreement nor the consummation of the transactions contemplated
                by it will violate or result in any violation of or be in
                conflict with or constitute a default under any term of the
                articles of incorporation or bylaws of Pioneer or any agreement,
                instrument, judgment, decree, law, rule or order applicable to
                Pioneer or any subsidiary of Pioneer or to which Pioneer or any
                such subsidiary is a party.

        (d)     Notification of Record Date. At any time from and after the date
                of this Agreement until the Option is no longer exercisable,
                Pioneer will give InterWest or any transferee 30 days prior
                written notice before setting the record date for determining
                the holders of record of the Common Stock entitled to vote on
                any matter, to receive any dividend or distribution or to
                participate in any rights offering or other matters, or to
                receive any other benefit or right, with respect to the Common
                Stock.

7.      Representations, Warranties and Covenants of InterWest. InterWest
        represents and warrants to Pioneer as follows:

        (a)     Due Authorization. This Agreement has been duly authorized by
                all necessary corporate action on the part of InterWest, has
                been duly executed by a duly authorized officer of InterWest and
                constitutes a valid and binding obligation of InterWest.

        (b)     Transfers of Common Stock. No shares of Common Stock acquired
                upon exercise of the Option will be transferred except in a
                transaction registered or exempt from registration under any
                applicable securities laws.

        (c)     No Conflicts. Neither the execution and delivery of this
                Agreement nor the consummation of the transactions contemplated
                by it will violate or result in any violation of or be in
                conflict with or constitute a default under any term of the
                articles of incorporation or bylaws of InterWest or any
                agreement, instrument, judgment, decree, law, rule or order
                applicable to InterWest or any subsidiary of InterWest or to
                which InterWest or any such subsidiary is a party.

8.      Adjustment Upon Changes in Capitalization. In the event of any change in
        the Common Stock by reason of stock dividends, split-ups, mergers,
        reorganizations, recapitalizations, combinations, exchanges of shares or
        the like, the number and kind of shares or securities subject to the
        Option and the purchase price per share of Common Stock will be
        appropriately adjusted. If, before the Option terminates or is
        exercised, Pioneer is acquired by another party, consolidates with or
        merges into another corporation or liquidates, InterWest or any
        transferee will thereafter receive, upon exercise of the Option, the
        securities or properties to which a holder of the number of shares of
        Common Stock then deliverable upon the exercise thereof would have been
        entitled upon such acquisition, consolidation, merger, reorganization or




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        liquidation, and Pioneer will take all steps in connection with such
        acquisition, consolidation, merger, reorganization or liquidation as may
        be necessary to assure that the provisions of this agreement will
        thereafter be applicable, as nearly as reasonably may be practicable, in
        relation to any securities or property thereafter deliverable upon
        exercise of the Option.

9.      Nonassignability. This Agreement binds and inures to the benefit of the
        parties and their successors. This Agreement is not assignable by either
        party, but InterWest may transfer the Option, the Option Shares or any
        portion of the Option or Option Shares in accordance with Section 5. A
        merger, reorganization or consolidation of InterWest (whether or not
        InterWest is the surviving entity) or an acquisition of InterWest will
        not be deemed an assignment or transfer.

10.     Regulatory Restrictions. Pioneer will use its best efforts to obtain or
        to cooperate with InterWest or any transferee in obtaining all necessary
        regulatory consents, approvals, waivers or other action (whether
        regulatory, corporate or other) to permit the acquisition of any or all
        Option Shares by InterWest or any transferee.

11.     Remedies. Pioneer agrees that if for any reason InterWest or any
        transferee will have exercised its rights under this Agreement and
        Pioneer will have failed to issue the Option Shares to be issued upon
        such exercise or to perform its other obligations under this Agreement,
        unless such action would violate any applicable law or regulation by
        which Pioneer is bound, then InterWest or any transferee will be
        entitled to specific performance and injunctive and other equitable
        relief. InterWest agrees that if it fails to perform any of its
        obligations under this Agreement, then Pioneer will be entitled to
        specific performance and injunctive and other equitable relief. This
        provision is without prejudice to any other rights that Pioneer or
        InterWest or any transferee may have against the other party for any
        failure to perform its obligations under this Agreement.

12.     No Rights as Shareholder. This Option, before it is exercised, will not
        entitle its holder to any rights as a shareholder of Pioneer at law or
        in equity. Specifically, this Option, before it is exercised, will not
        entitle the holder to vote on any matter presented to the shareholders
        of Pioneer or, except as provided in this Agreement, to any notice of
        any meetings of shareholders or any other proceedings of Pioneer.

13.     Miscellaneous.

        (a)     Termination. This Agreement and the Option, to the extent not
                previously exercised, will terminate upon the earliest of (1)
                June 30, 1999; (2) the mutual agreement of the parties to this
                Agreement; (3) 31 days after the date on which any application
                for regulatory approval for the Merger has been denied, but if
                before the expiration of the 31-day period, Pioneer or InterWest
                is engaged in litigation or an appeal procedure relating to an
                attempt to obtain approval of the Merger, this Agreement will
                not terminate until the earlier of (i) June 30, 1999, or (ii) 31
                days after the completion of the litigation and appeal
                procedure; (4) the 30th day following the termination of the
                Plan for any reason other than a material noncompliance or
                default by InterWest with respect to its obligations under it;
                or




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                (5) the date of termination of the Plan if the termination is
                due to a material noncompliance or default by InterWest with
                respect to its obligations under it; but if the Option has been
                exercised, in whole or in part, before the termination of this
                Agreement, then the exercise will close under Section 4 of this
                Agreement, even though that closing date is after the
                termination of this Agreement; and if the Option is sold before
                the termination of this Agreement, the Option may be exercised
                by the transferee at any time within 31 days after the date of
                termination even though such exercise or the closing of such
                exercise occurs after the termination of this Agreement.

        (b)     Amendments. This Agreement may not be modified, amended, altered
                or supplemented, except upon the execution and delivery of a
                written agreement executed by the parties.

        (c)     Severability of Terms. Any provision of this Agreement that is
                invalid, illegal or unenforceable is ineffective only to the
                extent of the invalidity, illegality or unenforceability without
                affecting in any way the remaining provisions or rendering any
                other provisions of this Agreement invalid, illegal or
                unenforceable. Without limiting the generality of the foregoing,
                if the right of InterWest or any transferee to exercise the
                Option in full for the total number of shares of Common Stock or
                other securities or property issuable upon the exercise of the
                Option is limited by applicable law, or otherwise, InterWest or
                any transferee may, nevertheless, exercise the Option to the
                fullest extent permissible.

        (d)     Notices. All notices, requests, claims, demands and other
                communications under this Agreement must be in writing and must
                be given (and will be deemed to have been duly received if so
                given) by delivery, by cable, telecopies or telex, or by
                registered or certified mail, postage prepaid, return receipt
                requested, to the respective parties at the addresses below, or
                to such other address as either party may furnish to the other
                in writing. Change of address notices will be effective upon
                receipt.

               If to Pioneer to:

                             Pioneer Bancorp, Inc.
                             The Tower
                             P.O. Box 2949
                             Yakima, WA 98907
                             Attn: Paul L. Campbell, President and Chief
                                   Executive Officer




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                      With a copy to:

                             Bernard L. Russell, Esq.
                             Foster Pepper & Shefelman, PLLC
                             1111 Third Avenue, Suite 3400
                             Seattle, Washington 98101

                             and

                             Morris G. Shore
                             Velikanje, Moore & Shore, P.S.
                             405 East Lincoln Avenue
                             Yakima, Washington 98901

                      If to InterWest, to:

                             InterWest Bancorp, Inc.
                             1259 West Pioneer Way
                             Oak Harbor, Washington 98277
                             Attn:  Stephen Walden, President and Chief
                                    Executive Officer

                      With a copy to:

                             Stephen M. Klein, Esq.
                             Graham & Dunn, P.C.
                             1420 Fifth Avenue, 33rd Floor
                             Seattle, WA  98101-2390

        (a)     Governing Law and Venue. The parties intend this Agreement and
                the Option, in all respects, including all matters of
                construction, validity and performance, to be governed by the
                laws of the State of Washington, without giving effect to
                conflicts of law principles. Any actions brought by either party
                against the other arising under this Agreement must be filed in
                King County, Washington, and each party consents to personal
                jurisdiction in King County.

        (b)     Counterparts. This Agreement may be executed in several
                counterparts, each of which is an original, and all of which
                together constitute one and the same agreement.

        (c)     Effects of Headings. The section headings in this Agreement are
                for convenience only and do not affect the meaning of its
                provisions.




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        Dated February 4, 1998:



                                         INTERWEST BANCORP, INC.


                                         By:        /s/
                                             -----------------------------------
                                               Stephen M. Walden
                                         Its:  President


                                         PIONEER BANCORP, INC.


                                         By:        /s/
                                             -----------------------------------
                                               Paul L. Campbell
                                         Its:  President

















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