SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                              --------------------

                                    FORM 10-Q

                              --------------------


(Mark One)

/X/       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
          EXCHANGE ACT OF 1934
               For the quarterly period ended September 30, 2002

                                       OR

/  /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934
             For the transition period from __________ to __________


                         Commission File Number 0-10489


                               CENTENNIAL BANCORP
             (Exact name of registrant as specified in its charter)


       OREGON                                                   93-0792841
(State of Incorporation)                                     (I.R.S. Employer
                                                          Identification Number)

                             Benjamin Franklin Plaza
                       One S.W. Columbia Street, Suite 900
                             Portland, Oregon 97258
                    (Address of principal executive offices)

                                 (503) 973-5556
              (Registrant's telephone number, including area code)


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X  No
                                              ---    ---

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of latest practicable date: 24,399,614 shares as of November
10, 2002.


                                      -1-
<PAGE>


                               CENTENNIAL BANCORP
                                    FORM 10-Q
                               SEPTEMBER 30, 2002


                                      INDEX

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                                             Page
------------------------------                                                                             ----

<S>                                                                                                          <C>
Condensed Consolidated Balance Sheets as of September 30, 2002
     and December 31, 2001                                                                                    3

Condensed Consolidated Statements of Income for the nine months and
     three months ended September 30, 2002 and 2001                                                           4

Condensed Consolidated Statements of Changes in Shareholders' Equity for the
     nine months ended September 30, 2002 and the year ended December 31, 2001                                5

Condensed Consolidated Statements of Cash Flows for the nine months
     ended September 30, 2002 and 2001                                                                        6

Notes to Condensed Consolidated Financial Statements                                                          7

Item 2.      Management's Discussion and Analysis of Financial Condition and Results of Operations:
                    Overview                                                                                 12
                    Material Changes in Financial Condition                                                  12
                    Material Changes in Results of Operations                                                13
                    Liquidity and Capital Resources                                                          14

Item 3.       Quantitative and Qualitative Disclosures about Market Risk                                     15

Item 4.       Controls and Procedures                                                                        15


PART II - OTHER INFORMATION

Item 6 - Exhibits and Reports on Form 8-K                                                                    16

Signatures                                                                                                   17
</TABLE>


                                      -2-
<PAGE>


                               CENTENNIAL BANCORP
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                            September 30,         December 31,
                                                                                2002                 2001
                                                                          ---------------       --------------
<S>                                                                       <C>                   <C>
ASSETS
Cash and cash equivalents:
    Cash and due from banks                                               $   62,752,014        $   36,350,215
    Federal funds sold                                                        36,555,000             3,910,000
                                                                          --------------        --------------
       Total cash and cash equivalents                                        99,307,014            40,260,215

Securities available-for-sale                                                 99,116,705            76,499,705
Mortgage loans held for sale                                                  12,606,386            12,393,968
Loans, net                                                                   617,072,349           643,321,169
Federal Home Loan Bank Stock                                                   1,793,700             6,244,100
Premises and equipment, net                                                   14,842,658            15,358,894
Intangible assets, net                                                         7,457,450             7,457,450
Other assets                                                                  15,232,434            13,079,531
                                                                          --------------        --------------
                                                                          $  867,428,696        $  814,615,032
                                                                          ==============        ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
    Deposits:
       Noninterest-bearing demand                                         $  156,712,946        $  164,974,596
       Interest-bearing demand                                               268,303,825           257,976,599
       Savings                                                                96,677,735            62,568,237
       Time certificates                                                     223,747,243           207,600,818
                                                                          --------------        --------------
          Total deposits                                                     745,441,749           693,120,250

    Borrowings                                                                17,226,389            17,051,067
    Accrued interest and other liabilities                                     4,662,854             5,271,190
                                                                          --------------        --------------
          Total liabilities                                                  767,330,992           715,442,507

Shareholders' equity:
    Common stock, 24,352,173 and 24,876,907 shares issued and
      outstanding at September 30, 2002 and December 31,
      2001, respectively                                                      22,570,352            27,213,622
    Retained earnings                                                         76,342,662            71,920,666
    Accumulated other comprehensive income                                     1,184,690                38,237
                                                                          --------------        --------------
          Total shareholders' equity                                         100,097,704            99,172,525
                                                                          --------------        --------------
                                                                          $  867,428,696        $  814,615,032
                                                                          ==============        ==============
</TABLE>


See accompanying notes.


                                      -3-
<PAGE>


                               CENTENNIAL BANCORP
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          Three months ended                  Nine months ended
                                                             September 30,                       September 30,
                                                   -------------------------------    -------------------------------
                                                        2002              2001             2002             2001
                                                   -------------     -------------    -------------    --------------
<S>                                                <C>               <C>              <C>              <C>
INTEREST INCOME
   Interest and fees on loans                      $  12,277,646     $  16,193,546    $  38,416,859    $   52,500,313
   Interest on investment securities                   1,052,226         1,143,340        3,225,393         3,092,746
   Other interest income                                 212,021           351,234          388,370           630,076
                                                   -------------     -------------    -------------    --------------
     Total interest income                            13,541,893        17,688,120       42,030,622        56,223,135
INTEREST EXPENSE
   Interest on deposits                                3,136,021         5,192,301        9,712,127        18,772,687
   Interest on borrowings                                154,367           125,188          456,935         1,111,466
                                                   -------------     -------------    -------------    --------------
     Total interest expense                            3,290,388         5,317,489       10,169,062        19,884,153
                                                   -------------     -------------    -------------    --------------
NET INTEREST INCOME                                   10,251,505        12,370,631       31,861,560        36,338,982
   Loan loss provision                                 1,275,660         1,050,000        5,025,660         2,975,000
                                                   -------------     -------------    -------------    --------------
     Net interest income after loan loss provision     8,975,845        11,320,631       26,835,900        33,363,982

NONINTEREST INCOME
   Service charges                                       606,417           452,980        1,876,449         1,372,639
   Other                                                 367,426           351,254        1,328,572         1,264,436
   Net gains on sales of loans                           417,454           313,234        1,084,526           955,253
   Net gains on sales of securities                          243           290,747          379,307           764,284
                                                   -------------     -------------    -------------    --------------
     Total noninterest income                          1,391,540         1,408,215        4,668,854         4,356,612
NONINTEREST EXPENSE
   Salaries and employee benefits                      3,650,109         4,073,850       11,422,903        12,582,687
   Premises and equipment                              1,061,860         1,120,246        3,213,047         3,174,629
   Legal and professional                                230,537           483,906          846,079         1,123,172
   Business development                                  154,644           133,372          629,986           541,091
   Data Processing                                       202,374           205,930          572,355           629,782
   Amortization of intangible assets                           -           172,107                -           516,321
   Other                                               1,172,309           861,563        2,878,997         2,494,289
                                                   -------------     -------------    -------------    --------------
     Total noninterest expense                         6,471,833         7,050,974       19,563,367        21,061,971
                                                   -------------     -------------    -------------    --------------
Income before income taxes                             3,895,552         5,677,872       11,941,387        16,658,623
Provision for income taxes                             1,484,205         2,216,382        4,568,726         6,373,014
                                                   -------------     -------------    -------------    --------------

NET INCOME                                         $   2,411,347     $   3,461,490    $   7,372,661    $   10,285,609
                                                   =============     =============    =============    ==============

Earnings per share of common stock:
   Basic                                           $        0.10     $        0.14    $        0.30    $         0.41
   Diluted                                         $        0.10     $        0.13    $        0.29    $         0.40

Weighted average shares outstanding:
   Basic                                              24,473,613        25,251,814       24,687,586        25,263,690
   Diluted                                            24,993,177        25,799,295       25,202,451        25,828,903
</TABLE>


See accompanying notes.


                                      -4-
<PAGE>

                               CENTENNIAL BANCORP
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                       Accumulated
                                                                                                          Other            Total
                                    Comprehensive       Number          Common          Retained      Comprehensive    Shareholders'
                                       Income          of Shares         Stock          Earnings      Income (Loss)      Equity
                                    -------------   -------------    -------------   -------------   -------------    -------------

<S>                                 <C>                <C>           <C>             <C>             <C>              <C>
Balances at December 31, 2000                          25,241,432    $  30,535,794   $  59,826,586   $     (179,385)  $  90,182,995

Comprehensive income:
    Net income                      $  14,206,351                                       14,206,351                       14,206,351
    Other comprehensive income:
       unrealized gains on
       investment securities, net
       of income taxes                    217,622                                                           217,622         217,622
                                    -------------
Comprehensive income                $  14,423,973
                                    =============

Stock options exercised                                   147,657          281,860                                          281,860
Tax benefit of stock options
     exercised                                                             102,783                                          102,783
Cash dividends declared
              ($.08 per share)                                                          (2,112,271)                      (2,112,271)
Repurchases of common stock                              (512,182)      (3,706,815)                                      (3,706,815)
                                                    -------------    -------------   -------------   --------------   -------------

Balances at December 31, 2001                          24,876,907       27,213,622      71,920,666           38,237      99,172,525

Comprehensive income:
    Net income                      $   7,372,661                                        7,372,661                        7,372,661
    Other comprehensive income:
         unrealized gains on
         investment securities, net
         of income taxes                1,146,453                                                         1,146,453       1,146,453
                                    -------------
Comprehensive income                $   8,519,114
                                    =============

Stock options exercised                                   129,519          557,340                                          557,340
Tax benefit of stock options
     exercised                                                             164,350                                          164,350
Cash dividends declared
     ($.12 per share)                                                                   (2,950,665)                      (2,950,665)
Repurchases of common stock                              (654,253)      (5,364,960)                                      (5,364,960)
                                                    -------------    -------------   -------------   --------------   -------------

Balances at September 30, 2002                         24,352,173    $  22,570,352   $  76,342,662   $    1,184,690   $ 100,097,704
                                                    =============    =============   =============   ==============   =============
</TABLE>


See accompanying notes.


                                      -5-
<PAGE>


                               CENTENNIAL BANCORP
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                    Nine Months Ended
                                                                                      September 30,
                                                                          ------------------------------------
                                                                                2002                 2001
                                                                          ---------------       --------------
<S>                                                                       <C>                   <C>
Cash flows from operating activities:
    Net income                                                            $    7,372,661        $   10,285,609
    Adjustments to reconcile net income to net cash
      provided by operating activities:
       Gains on sales of mortgage loans and
         investment securities, net                                           (1,463,833)           (1,719,537)
       Dividends on Federal Home Loan Bank stock                                (281,312)             (303,294)
       Loan loss provision                                                     5,025,660             2,975,000
       Deferred income taxes                                                  (1,244,727)             (620,947)
       Depreciation and amortization                                           1,818,651             1,608,632
       Proceeds from sales of mortgage loans
         held for sale, net                                                      872,108             4,584,843
       Changes in certain assets and liabilities:
         Accrued interest and other assets                                      (826,809)              687,796
         Accrued interest and other liabilities                                 (871,050)           (3,172,937)
                                                                          ---------------       ---------------
       Net cash provided by operating activities                              10,401,349            14,325,165

Cash flows from investing activities:
    Net decrease in loans                                                     21,223,160            41,791,807
    Redemptions of Federal Home Loan Bank stock                                4,731,500                     -
    Investment securities available-for-sale:
       Purchases                                                             (49,635,938)         (109,756,951)
       Maturities/calls/principal reductions                                  11,255,380            19,574,937
       Sales                                                                  16,819,838            78,118,979
    Purchases of premises and equipment                                         (749,739)           (1,266,304)
                                                                          --------------        --------------
       Net cash provided by investing activities                               3,644,201            28,462,468

Cash flows from financing activities:
    Net increase in deposits                                                  52,321,499            28,981,234
    Net increase (decrease) in borrowings                                        175,322           (49,349,512)
    Proceeds from issuance of common stock                                       557,340               215,388
    Payment of cash dividends                                                 (2,687,952)             (688,146)
    Repurchases of common stock                                               (5,364,960)           (2,103,596)
                                                                          --------------        --------------
       Net cash provided by (used in) financing activities                    45,001,249           (22,944,632)
                                                                          --------------        ---------------

Net increase in cash and cash equivalents                                     59,046,799            19,843,001

Cash and cash equivalents at beginning of period                              40,260,215            42,963,282
                                                                          --------------        --------------
Cash and cash equivalents at end of period                                $   99,307,014        $   62,806,283
                                                                          ==============        ==============
</TABLE>


See accompanying notes.


                                      -6-
<PAGE>


                               CENTENNIAL BANCORP
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)




1.       Basis of Presentation

         The interim condensed consolidated financial statements include the
         accounts of Centennial Bancorp, a bank holding company, and its wholly
         owned subsidiary, Centennial Bank ("Centennial") (collectively referred
         to as "Bancorp").

         All significant intercompany balances and transactions have been
         eliminated in consolidation.

         The interim condensed consolidated financial statements are prepared by
         Bancorp without audit and in conformity with accounting principles
         generally accepted in the United States for interim financial
         statements. Accordingly, certain financial information and footnotes
         have been condensed or omitted. In management's opinion, the condensed
         consolidated financial statements include all necessary adjustments
         (which are of a normal and recurring nature) for a fair presentation of
         the results for the interim periods presented.

         These interim condensed consolidated financial statements should be
         read in conjunction with the consolidated financial statements,
         including the notes thereto, included in Bancorp's 2001 Annual Report
         to Shareholders.

         Certain amounts for 2001 have been reclassified to conform to the 2002
         presentation.

2.       Securities Available-for-Sale

         Securities available-for-sale consisted of the following at September
         30, 2002 and December 31, 2001:

<TABLE>
<CAPTION>
                                                                        Gross           Gross           Estimated
                                                                     Unrealized      Unrealized           Fair
                                                 Amortized Cost         Gains          Losses             Value
                                                ---------------      -----------     -----------      ------------
           <S>                                  <C>                  <C>              <C>            <C>
           September 30, 2002:

           U.S. Government and
              Agency securities                 $     30,053,630     $   625,490      $       -      $  30,679,120
           Obligations of states and
              political subdivisions                  43,197,270         927,871         89,661         44,035,480
           Corporate bonds                             5,787,822          26,596         19,888          5,794,530
           Mortgage-backed securities                 18,164,093         443,482              -         18,607,575
                                                ----------------     -----------      ---------      -------------
           Total                                $     97,202,815     $ 2,023,439      $ 109,549      $  99,116,705
                                                ================     ===========      =========      =============



          December 31, 2001:

          U.S. Government and
             Agency securities                     $  14,750,756      $  297,849     $   13,889      $  15,034,716
          Obligations of states and
             political subdivisions                   23,241,046         144,848        246,858         23,139,036
          Corporate bonds                              5,086,140          95,116          6,066          5,175,190
          Mortgage-backed securities                  32,747,658          51,826        276,196         32,523,288
          Other                                          617,338          10,137              -            627,475
                                                   -------------      ----------     ----------      -------------
          Total                                    $  76,442,938      $  599,776     $  543,009      $  76,499,705
                                                   =============      ==========     ==========      =============
</TABLE>


                                      -7-
<PAGE>

                               CENTENNIAL BANCORP
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



3.       Loans and Allowance for Loan Losses

         Loans consisted of the following at September 30, 2002 and December 31,
         2001:

<TABLE>
<CAPTION>
                                                                               September 30,          December 31,
                                                                                   2002                   2001
                                                                              --------------         -------------

         <S>                                                                  <C>                    <C>
         Commercial                                                           $  237,606,877         $ 259,961,349
         Real estate - construction                                              169,986,741           212,576,779
         Real estate - mortgage                                                  203,310,889           163,524,775
         Installment                                                              10,314,471            11,187,783
         Lease financing                                                           4,665,668             4,833,024
         Other                                                                       563,923             1,743,580
                                                                              --------------         -------------
                                                                                 626,448,569           653,827,290
         Allowance for loan losses                                                (9,376,220)          (10,506,121)
                                                                              --------------         -------------
                                                                              $  617,072,349         $ 643,321,169
                                                                              ==============         ==============
</TABLE>

         Transactions in the allowance for loan losses were as follows for the
         nine months ended September 30, 2002 and 2001:

<TABLE>
<CAPTION>
                                                                                    2002                  2001
                                                                                ------------          ------------

         <S>                                                                    <C>                   <C>
         Balance at beginning of period                                         $ 10,506,121          $  9,150,348
         Provision charged to operations                                           5,025,660             2,975,000
         Recoveries                                                                   52,109                54,739
         Loans charged off                                                        (6,207,670)           (1,668,819)
                                                                                ------------          ------------
         Balance at end of period                                               $  9,376,220          $ 10,511,268
                                                                                ============          =============
</TABLE>

         At September 30, 2002 and December 31, 2001, Bancorp had approximately
         $26,182,000 and $23,716,000, respectively, in impaired loans. The
         specific valuation allowance related to these loans was approximately
         $3,317,000 and $3,744,000 at September 30, 2002 and December 31, 2001,
         respectively.

         It is Bancorp's policy to place loans on nonaccrual status when
         repayment of principal and interest is in doubt. Loans placed on
         nonaccrual status may or may not be contractually past due at the time
         of such determination, and may or may not be secured by collateral.
         Loans on nonaccrual status at September 30, 2002 and December 31, 2001
         were approximately $9,027,000 and $7,694,000, respectively.

         Loans past due 90 days or more on which Bancorp continued to accrue
         interest totaled approximately $81,000 at September 30, 2002 (none at
         December 31, 2001). Bancorp had no restructured loans at September 30,
         2002 or December 31, 2001.


                                      -8-
<PAGE>

                               CENTENNIAL BANCORP
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



4.       Borrowings

         Borrowings consisted of the following at September 30, 2002 and
         December 31, 2001:

<TABLE>
<CAPTION>
                                                                               September 30,          December 31,
                                                                                    2002                  2001
                                                                               --------------        --------------

         <S>                                                                   <C>                   <C>
         FHLB borrowings under promissory notes                                $  10,000,000         $  10,000,000
         Securities sold under agreement to repurchase                             7,226,389             7,051,067
                                                                               -------------         -------------
                                                                               $  17,226,389         $  17,051,067
                                                                               =============         ==============
</TABLE>

5.       Earnings per Share of Common Stock

         A reconciliation of the weighted average shares used to compute basic
         and diluted earnings per share of common stock is as follows for the
         three months and nine months ended September 30, 2002 and 2001:

<TABLE>
<CAPTION>
                                                                                 Three Months Ended September 30,
                                                                               ------------------------------------
                                                                                   2002                   2001
                                                                               -------------         --------------

         <S>                                                                      <C>                   <C>
         Weighted average shares outstanding - basic                              24,473,613            25,251,814
         Additional shares from stock options                                        519,564               547,481
                                                                               -------------         --------------
         Weighted average shares outstanding - diluted                            24,993,177            25,799,295
                                                                               =============         ==============

<CAPTION>
                                                                                  Nine Months Ended September 30,
                                                                               ------------------------------------
                                                                                   2002                   2001
                                                                               -------------         --------------

         <S>                                                                      <C>                   <C>
         Weighted average shares outstanding - basic                              24,687,586            25,263,690
         Additional shares from stock options                                        514,865               565,213
                                                                               -------------         --------------
         Weighted average shares outstanding - diluted                            25,202,451            25,828,903
                                                                               =============         ==============
</TABLE>

          The weighted average number of common shares outstanding used to
          calculate earnings per share of common stock and the number of shares
          outstanding in the accompanying condensed consolidated financial
          statements reflect the retroactive effect of stock splits and stock
          dividends.

6.        Commitments and Contingencies

          From time to time, Bancorp is involved in various claims and legal
          actions in the normal course of business. Bancorp maintains insurance
          coverage against potential claims in amounts that it believes to be
          adequate. Management believes that it is not presently a party to any
          litigation, the outcome of which would have a material adverse effect
          on Bancorp's business, financial condition, results of operations or
          cash flows.

7.       New Accounting Standards

         In June 2001, the Financial Accounting Standards Board ("FASB") issued
         Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill
         and Other Intangible Assets." SFAS No. 142 discontinues the practice of
         amortizing goodwill and requires that goodwill be continually evaluated
         for impairment and be written-down when appropriate. SFAS No. 142 also
         requires that other intangible assets that have been separately
         identified and accounted for continue to be amortized over a
         determinable useful life. SFAS No. 142 is effective for fiscal years
         beginning after December 15, 2001. Bancorp's adoption of SFAS No. 142
         did not have a material effect on its consolidated financial
         statements.


                                      -9-

<PAGE>

                               CENTENNIAL BANCORP
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
         Retirement Obligations." SFAS No. 143 addresses financial accounting
         and reporting obligations associated with the retirement of long-lived
         assets and the associated asset retirement costs. SFAS No. 143 is
         effective for fiscal years beginning after June 15, 2002. Bancorp does
         not expect that adoption of SFAS No. 143 will have a material effect on
         its consolidated financial statements.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
         Impairment or Disposal of Long-Lived Assets." SFAS No. 144 addresses
         financial accounting and reporting for the impairment or disposal of
         long-lived assets. This statement supersedes SFAS No. 121, "Accounting
         for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
         Disposed of" and provides guidance on the classification and accounting
         for such assets when held for sale or abandonment. SFAS No. 144 is
         effective for fiscal years beginning after December 15, 2001. Bancorp's
         adoption of SFAS No. 144 did not have a material effect on its
         consolidated financial statements.

         In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
         Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
         Technical Corrections." SFAS No. 145 updates, clarifies and simplifies
         existing accounting pronouncements related to gains and losses from the
         extinguishment of debt, and is effective immediately. Bancorp's
         adoption of SFAS No. 145 did not have a material effect on its
         consolidated financial statements.

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
         Associated with Exit or Disposal Activities." SFAS No. 146 addresses
         financial accounting and reporting for costs associated with exit or
         disposal activities and nullifies Emerging Issues Task Force Issue No.
         94-3, "Liability Recognition for Certain Employee Termination Benefits
         and Other Costs to Exit an Activity (including Certain Costs Incurred
         in a Restructuring)." SFAS No. 146 is effective for exit or disposal
         activities that are initiated after December 31, 2002. Bancorp does not
         expect that adoption of SFAS No. 146 will have a material effect on its
         consolidated financial statements.

         In October 2002, the FASB issued SFAS No. 147 "Acquisitions of Certain
         Financial Institutions, an amendment of FASB Statements No. 72 and 144
         and FASB Interpretation No. 9." SFAS No. 147 was issued by the FASB in
         part to address the differences in reporting of acquisitions of
         financial institutions as covered by SFAS No. 72, SFAS No. 141, and
         SFAS No. 142. Bancorp early adopted this standard upon its release,
         which resulted in the cessation of the recognition of amortization
         expense related to unidentified intangible assets, retroactive to
         January 1, 2002. The unidentified intangible asset recorded on
         Bancorp's balance sheet, which was related to a branch acquisition, was
         previously accounted for under SFAS No. 72, which required amortization
         of the unidentifiable intangible assets acquired as a result of the
         excess of fair value of liabilities assumed over fair value of tangible
         and identifiable intangible assets, even after the adoption of SFAS No.
         142. Management of Bancorp believes application of SFAS No. 147 will
         improve the comparability of Bancorp's financial reporting to other
         organizations because SFAS No. 142, rather than the industry-specific
         guidance in SFAS No. 72, will be used to account for most financial
         institution acquisitions. Had SFAS No. 147 not been adopted, Bancorp
         would have recognized $150,660 and $476,870 in amortization expense of
         unidentified intangible assets for the three and nine months ended
         September 30, 2002, respectively. Under the transitional provisions of
         SFAS No. 147, Bancorp has until December 31, 2002 to perform its
         impairment tests related to the $7.5 million of unidentified intangible
         assets included in the accompanying condensed consolidated balance
         sheets.

                                      -10-

<PAGE>

                               CENTENNIAL BANCORP
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



8.        Pending Acquisition by Umpqua Holdings Corporation

          On July 23, 2002 Bancorp announced it had signed a definitive
          agreement to be acquired by Umpqua Holdings Corporation ("Umpqua").
          The proposed transaction is structured as a tax-free reorganization
          (with the effect that no income will be recognized by Bancorp
          shareholders to the extent they exchange Bancorp stock for stock of
          Umpqua) and is to be accounted for as a purchase by Umpqua. The
          proposed transaction has received regulatory and shareholder approval
          and is expected to close on November 15, 2002.


                                      -11-
<PAGE>

Item 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS


This Quarterly Report contains certain forward-looking statements, which are
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Statements that expressly or implicitly predict future
results, performance or events are forward-looking. In addition, the words
"anticipate," "believe," "intend," "expect" and similar expressions identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
anticipated. Factors that could cause or contribute to such differences include,
but are not limited to, the following: (1) the proposed merger with Umpqua
Holdings Corporation will not close, or the closing will be later than
anticipated; (2) general economic conditions, either nationally or regionally,
that could result in increased loan losses; (3) the ability to attract new
deposits and loans; (4) interest rate fluctuations; (5) competitive factors and
pricing pressures; (6) potential delays or other problems in implementing
Bancorp's growth and expansion strategy; (7) changes in legal and regulatory
requirements; (8) changes in technology; and (9) other factors described in this
and other Bancorp reports and statements, including, but not limited to, Exhibit
99.1 to Bancorp's Form 10-K for the year ended December 31, 2001, which is
incorporated herein by reference. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. Bancorp does not intend to update its forward-looking statements.

Overview

         Centennial Bancorp, an Oregon corporation, was organized in 1981 as a
bank holding company and has one wholly owned subsidiary, Centennial Bank
("Centennial"). Effective May 31, 2001, Centennial Mortgage Co., a wholly owned
subsidiary of Centennial Bancorp at that date, was merged into Centennial.
Unless the context clearly suggests otherwise, references in this Quarterly
Report to "Bancorp" include Centennial Bancorp and Centennial. Bancorp primarily
serves the Portland, Oregon and Eugene, Oregon metropolitan markets.

         At September 30, 2002, Centennial operated 16 full-service and seven
limited-service branches, including nine full-service and seven limited-service
branches in the Portland area, four full-service branches in Eugene, and one
full-service branch each in Springfield, Salem and Cottage Grove, Oregon.

         At September 30, 2002, Centennial also operated seven commercial
banking centers located in full-service branches, including five in the Portland
area, one in Eugene and one in Salem. In addition, Centennial also operated four
mortgage offices, including two in the Portland area, and two in Eugene.

         On July 23, 2002, Bancorp announced the signing of a definitive
agreement to be acquired by Umpqua Holdings Corporation ("Umpqua") in a tax-free
reorganization (with the effect that no income will be recognized by Bancorp
shareholders to the extent they exchange Bancorp stock for Umpqua stock). In the
aggregate, it is expected that Bancorp shareholders will receive 66% Umpqua
stock and 34% cash for their Bancorp stock. The merger will be accounted for
under the purchase accounting method. Upon completion of the merger, all
Centennial offices will operate under the Umpqua Bank name. The proposed merger
has received regulatory and shareholder approval and is expected to close on
November 15, 2002.

Material Changes in Financial Condition

         At September 30, 2002, total assets of $867.4 million represented a
6.5% increase from the $814.6 million total at December 31, 2001. Material
changes in financial condition for the nine months ended September 30, 2002
included increased cash and cash equivalents and securities available-for-sale,
reduced loan totals, reduced Federal Home Loan Bank stock, increased deposits,
and continued earnings-driven equity growth.

         Cash and cash equivalents, including cash and due from banks and
federal funds sold, increased $59.0 million to $99.3 million at September 30,
2002 as compared to $40.3 million at December 31, 2001, substantially due to the
combination of decreasing loans and increasing deposits. In addition, cash and
due from banks can fluctuate significantly on a daily basis due to normal loan
and deposit activity, funds transfers and inter-bank clearing of cash


                                      -12-
<PAGE>

items. Federal funds sold represents excess funds, which are sold overnight to
other financial institutions, and their levels can also fluctuate significantly
on a daily basis.

         Securities available-for-sale increased $22.6 million, or 29.6%, to
$99.1 million at September 30, 2002 as compared to $76.5 million at December 31,
2001. The increase was substantially due to the investment of available funds
from the reduction in loans and the increase in deposits.

         Loans and loans held for sale of $629.7 million at September 30, 2002
decreased $26.0 million, or 4.0%, as compared to $655.7 million at December 31,
2001, primarily due to weaker business activity with the middle-market and small
business customers in the Pacific Northwest.

         Federal Home Loan Bank ("FHLB") stock of $1.8 million at September 30,
2002 decreased $4.5 million, or 71.2%, as compared to $6.2 million at December
31, 2001, due to a mandatory redemption of any excess investment by Bancorp in
the stock of FHLB, based upon a newly created FHLB capital plan.

         Total deposits increased $52.3 million, or 7.6%, to $745.4 million at
September 30, 2002 as compared to $693.1 million at December 31, 2001. The
increase, centered in time certificates and savings accounts, was somewhat
offset by a decrease in noninterest-bearing demand deposits. Time certificates
increased primarily due to increased marketing efforts, while savings deposit
totals increased primarily due to the balance fluctuations typical of certain
escrow accounts.

         Remaining asset and liability category changes during the nine-month
period were comparatively modest.

         September 30, 2002 shareholders' equity was $100.1 million, a $1.0
million increase over December 31, 2001. The net income and unrealized gains on
investment securities, which increased shareholders' equity during the first
nine months of 2002, were offset, in part, by dividends declared and stock
repurchases.

Material Changes in Results of Operations

         Total interest income decreased $14.2 million, or 25.2%, for the nine
months ended September 30, 2002 as compared to the nine months ended September
30, 2001, and decreased $4.1 million, or 23.4% for the quarter ended September
30, 2002 as compared to the same period in 2001. This decrease was mainly due to
reduced yields on interest-earning assets, which was compounded by slowing loan
activity.

         Total interest expense decreased $9.7 million (or 48.9%) for the nine
months and $2.0 million (or 38.1%) for the quarter ended September 30, 2002 as
compared to the same periods in 2001. This decrease was primarily due to reduced
rates paid on interest-bearing liabilities since September 30, 2001.

         The decrease in interest earned, partially offset by the decrease in
interest expense, resulted in a decrease of net interest income of $4.5 million,
or 12.3%, for the nine-month period ended September 30, 2002, over the
comparable period in 2001, and a decrease of $2.1 million, or 17.1%, during the
third quarter of 2002 as compared to the third quarter of 2001. Net interest
margin decreased from 6.26% for the nine-month period ended September 30, 2001
to 5.65% for the nine-month period ended September 30, 2002, reflecting the
re-pricing of renewed loans in a lower rate environment, and the shift in the
earning asset mix to lower yielding assets.

         During the nine- and three-month periods ended September 30, 2002,
Bancorp charged a $5.0 million and a $1.3 loan loss provision to operations,
respectively, as compared to $3.0 million and $1.0 million during the same
periods in 2001. The nine-month 2002 amount included an added provision of $1.8
million, as a result of the current Northwest economic recession and challenging
business environment, and the continued review of the loan portfolio. Based on
that continued review of the loan portfolio, and management's attention to
resolving, writing off and otherwise disposing of problem credits, $4.1 million
of non-performing loans were written off during the three-month period ended
September 30, 2002.

         At September 30, 2002, Bancorp's allowance for loan losses was $9.4
million, as compared to $10.5 million at December 31, 2001 and September 30,
2001. Management believes that the allowance is adequate for estimated


                                      -13-
<PAGE>

loan losses, based on management's evaluation of the overall quality and risk
characteristics of Bancorp's loan portfolio, which is dependent upon numerous
interrelated factors including present non-performing and delinquent loans,
borrowers' perceived abilities to repay, value of collateral, general and local
economic conditions and historical loan loss experience. Loans are actively
managed to minimize loss potential, and current expectations are that actual
charge-offs will not have a material adverse effect on Bancorp's financial
condition or results of operations. The allowance is based on estimates, and
actual losses may vary from those currently estimated.

         Noninterest income increased $312,000, or 7.2%, for the nine months
ended September 30, 2002 as compared to the same period in 2001. The increase
during the nine-month period was primarily driven by the increasing service
charge income produced by Bancorp's deposit base. Noninterest income decreased
$17,000, or 1.2%, for the three months ended September 30, 2002, as compared to
the same period in 2001, due primarily to a decrease in gains on sales of
securities, offset by an increase in service charge income and gains on sales of
loans.

         As a result of continuing emphasis on expense control, noninterest
expense for the nine-month period ended September 30, 2002 decreased by $1.5
million, or 7.1%, as compared to the same period in 2001, and decreased
$579,000, or 8.2%, during the third quarter of 2002 as compared to the third
quarter of 2001.

          During the nine months and three months ended September 30, 2002, the
provision for income taxes was $4.6 million and $1.5 million, respectively, a
decrease of $1.8 million and $732,000 compared to the provision during the
respective periods ended September 30, 2001. The decrease was commensurate with
Bancorp's decreased pre-tax income.

Liquidity and Capital Resources

         Centennial has adopted policies to maintain a relatively liquid
position to enable it to respond to changes in its needs and financial
environment. Currently, Centennial's main sources of liquidity are customer
deposits, borrowings, loan repayments, sales of loans, sales and repayments of
investment securities, and net cash provided by operating activities. Scheduled
loan repayments are a relatively stable source of funds, while deposit inflows
and unscheduled loan prepayments, which are influenced by general interest rate
levels, interest rates available on other investments, competition, economic
conditions and other factors, are not.

         Bancorp maintains, on an unsecured basis, federal funds lines with
correspondent banks as a back-up source of temporary liquidity. At September 30,
2002, Bancorp had federal funds lines totaling $50.0 million with no borrowings
outstanding. Bancorp also maintains a cash management advance line of credit
with the Federal Home Loan Bank of Seattle, which allows temporary borrowings
for liquidity. At September 30, 2002, Bancorp had a borrowing limit of $38.9
million with $10.0 million outstanding. In addition, Bancorp has a secured line
of credit at the Federal Reserve Bank discount window, which, as of September
30, 2002, was unused and had a borrowing limit of $19.8 million.

         Bancorp's Tier 1 capital ratio and total risk-based capital ratio under
the Federal Reserve Board's ("FRB") risk-based capital guidelines, and Bancorp's
capital-to-assets ratio under leverage ratio guidelines, were as follows.

<TABLE>
<CAPTION>
                                                                   September 30,               Minimum
                                                                       2002                  Guidelines
                                                                   -------------             ----------

          <S>                                                          <C>                      <C>
          Tier 1 capital ratio                                         12.11%                   4%
          Total risk-based capital ratio                               13.35%                   8%
          Capital-to-assets ratio                                      11.06%                   3%
</TABLE>


                                      -14-

<PAGE>

         In January 2002, Bancorp's Board of Directors authorized the repurchase
of up to an aggregate of 5% of Bancorp's then outstanding common stock over a
two-year period. The new repurchase program was adopted following the completion
of the 2000 repurchase program. During the first nine months of 2002, Bancorp
repurchased 654,253 shares at a cost of approximately $5.4 million. During all
of 2001, Bancorp repurchased 512,182 shares at a cost of approximately $3.7
million.

         On January 16, 2002, Bancorp declared a 21-for-20 (5%) stock split,
payable on February 22, 2002 to shareholders of record on February 1, 2002. On
March 13, 2002, Bancorp declared a cash dividend of $0.04 per share, payable on
May 1, 2002 to shareholders of record on April 15, 2002. Additionally, on June
19, 2002, Bancorp declared a cash dividend of $0.04 per share, payable on August
1, 2002 to shareholders of record on July 15, 2002, and on September 18, 2002,
Bancorp declared a cash dividend of $0.04 per share, payable on November 1, 2002
to shareholders of record on October 15, 2002.



ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Market risk is the risk of loss from adverse changes in market prices
and rates. Bancorp's primary market risk is the interest rate risk associated
with its investing, lending, deposit and borrowing activities. Other types of
market risk, such as foreign currency exchange rate risk and commodity price
risk, do not materially affect or are not part of Bancorp's normal business
activities. Management actively monitors and manages Bancorp's interest rate
risk with the overall objective of achieving satisfactory and consistent
profitability while maintaining interest rate sensitivity within formal policy
guidelines established by the Board of Directors.

         Bancorp did not experience a material change in market risk at
September 30, 2002, as Bancorp's portfolio remained primarily liability
sensitive to rate changes, which generally enhances earnings when interest rates
fall but erodes earnings when interest rates rise. This sensitivity is a change
from Bancorp's asset sensitivity at September 30, 2001 because, as a result of
the Federal Reserve's rapid and substantial easing of market rates during 2001
and 2002, a large amount of Centennial's variable-rate loans are at floor rates
above current market rates, causing them to react like fixed-rate loans within a
positive rate-change environment.



ITEM 4.       CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

      Bancorp's Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of Bancorp's disclosure controls and procedures (as
such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities
Exchange Act of 1934, as amended) as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"). Based on such
evaluation, Bancorp's Chief Executive Officer and Chief Financial Officer have
concluded that, as of the Evaluation Date, Bancorp's disclosure controls and
procedures are effective in alerting them on a timely basis to material
information relating to Bancorp required to be included in its reports filed or
submitted under the Securities Exchange Act of 1934, as amended.

Changes in Internal Controls

      Since the Evaluation Date, there have not been any significant changes in
Bancorp's internal controls or in other factors that could significantly affect
such controls.


                                      -15-
<PAGE>

                           PART II - OTHER INFORMATION



Item 6.       Exhibits and Reports on Form 8-K.

              (a)     Exhibits

                      10.26*   Amendment, dated September 23, 2002, between
                               Centennial Bank and Ted R. Winnowski, to the
                               Employment Agreement, dated July 29, 1997,
                               between Centennial Bank and Mr. Winnowski

                      99.1     Certification signed by Ted R. Winnowski pursuant
                               to 18 U.S.C. Section 1350 as adopted pursuant to
                               Section 906 of the Sarbanes-Oxley Act of 2002

                      99.2     Certification signed by Neal T. McLaughlin
                               pursuant to 18 U.S.C. Section 1350 as adopted
                               pursuant to Section 906 of the Sarbanes-Oxley Act
                               of 2002

                      99.3     Certification signed by Ted R. Winnowski pursuant
                               to 15 U.S.C. Section 7241 as adopted pursuant to
                               Section 302 of the Sarbanes-Oxley Act of 2002

                      99.4     Certification signed by Neal T. McLaughlin
                               pursuant to 15 U.S.C. Section 7241 as adopted
                               pursuant to Section 302 of the Sarbanes-Oxley Act
                               of 2002

                      *        Management contract or compensatory plan or
                               arrangement.

              (b)     Reports on Form 8-K

                      On July 23, 2002, Bancorp filed a Form 8-K, which
                      contained the press release announcing that Centennial
                      Bancorp and Umpqua Holdings Corporation had entered into
                      an Agreement and Plan of Reorganization, together with
                      their respective wholly owned banking subsidiaries,
                      Centennial Bank and Umpqua Bank, pursuant to which
                      Centennial Bancorp will merge with and into Umpqua
                      Holdings Corporation, with Umpqua Holdings Corporation
                      being the surviving corporation.

                      On November 8, 2002, Bancorp filed a Form 8-K, which
                      contained the press release announcing that Umpqua
                      Holdings Corporation and Bancorp received shareholder
                      approval of the Agreement and Plan of Reorganization
                      pursuant to which Centennial Bancorp will merge with and
                      into Umpqua Holdings Corporation, with Umpqua Holdings
                      Corporation being the surviving corporation


                                      -16-
<PAGE>


                                   SIGNATURES



Pursuant to the requirements 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.

                               CENTENNIAL BANCORP





Dated:  November 13, 2002       /s/ Ted R. Winnowski
                                ------------------------------------------------
                                Ted R. Winnowski
                                President & Chief Executive Officer





Dated:  November 13, 2002       /s/ Neal T. McLaughlin
                                ------------------------------------------------
                                Neal T. McLaughlin
                                Executive Vice President & Chief Financial
                                Officer; Chief Accounting Officer


                                      -17-