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, 1999
                               ------------------

                                       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)
                                   (Zip Code)

                                 (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 / /

<PAGE>


     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of latest practicable date:

17,853,097 shares as of October 29, 1999.






                                       -2-


<PAGE>


                               CENTENNIAL BANCORP

                                    FORM 10-Q

                               SEPTEMBER 30, 1999

                                      INDEX
                                      -----

                                                         Page
PART I - FINANCIAL INFORMATION                        Reference
------------------------------                        ---------

Condensed Consolidated Balance Sheets as of
September 30, 1999 and December 31, 1998.                 4

Condensed Consolidated Statements of Income for
     the nine months and the quarter ended
     September 30, 1999 and 1998                          5

Condensed Consolidated Statements of Changes in
     Shareholders' Equity for the nine months
     ended September 30, 1999 and 1998                    6

Condensed Consolidated Statements of Cash Flows
     for the nine months ended September 30, 1999
     and 1998                                             7

Notes to Condensed Consolidated Financial Statements      8 - 12

Management's Discussion and Analysis of Financial
     Condition and Results of Operations:
          Overview                                        13 - 14
          Material Changes in Financial Condition         14 - 15
          Material Changes in Results of Operations       15 - 16
          Market Risk                                     16
          Liquidity and Capital Resources                 16 - 17
          Effects of the Year 2000                        17 - 19

PART II - OTHER INFORMATION
---------------------------

Item 6 - Exhibits and Reports on Form 8-K.                20

Signatures                                                21


                                       -3-


<PAGE>


                                              CENTENNIAL BANCORP
                                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                                 (Unaudited)
<TABLE>
<CAPTION>
                                                                   September 30,             December 31,
                                                                       1999                     1998
                                                                   -------------            -------------
<S>                                                                <C>                      <C>
ASSETS
------
Cash and cash equivalents:
     Cash and due from banks                                        $ 34,372,618            $ 40,838,367
     Federal funds sold                                                1,825,000               1,003,000
                                                                    ------------            ------------
               Total cash and cash equivalents                        36,197,618              41,841,367
Securities available-for-sale                                         60,733,350              76,793,378
Mortgage loans held for sale                                           6,095,711              11,039,045
Loans, net                                                           536,677,822             416,524,430
Federal Home Loan Bank stock                                           5,370,700               5,083,700
Premises and equipment, net                                           14,666,310              12,613,321
Other assets                                                          20,918,396               8,154,849
                                                                    ------------            ------------
                                                                    $680,659,907            $572,050,090
                                                                    ============            ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities:
     Deposits:
          Demand                                                    $118,494,372            $102,714,344
          Interest-bearing demand                                    249,203,070             204,032,594
          Savings                                                     30,773,186              18,483,765
          Time                                                       171,770,055             158,635,593
                                                                    ------------            ------------
               Total deposits                                        570,240,683             483,866,296
     Short-term borrowings                                            34,469,007              20,600,071
     Accrued interest and other liabilities                            4,288,434               3,866,582
                                                                    ------------            ------------
               Total liabilities                                     608,998,124             508,332,949
Shareholders' equity:
     Preferred stock                                                          --                      --
     Common stock, 17,853,097 shares issued and outstanding
          (16,869,363 at December 31, 1998)                           30,223,499              29,690,949
     Retained earnings                                                42,623,984              33,517,242
     Accumulated other comprehensive income/(loss)                    (1,185,700)                508,950
                                                                    ------------            ------------
               Total shareholders' equity                             71,661,783              63,717,141
                                                                    ------------            ------------
                                                                    $680,659,907            $572,050,090
                                                                    ============            ============
</TABLE>
See accompanying notes.


                                                    -4-


<PAGE>


                                             CENTENNIAL BANCORP
                                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                 (Unaudited)
<TABLE>
<CAPTION>
                                                     Three Months Ended                 Nine Months Ended
                                                       September 30,                      September 30,
                                                ---------------------------       --------------------------
                                                   1999             1998                1999           1998
                                                ----------      -----------       -----------     ----------
<S>                                            <C>             <C>                <C>            <C>
INTEREST INCOME
     Interest and fees on loans                $14,248,120     $11,494,731        $38,762,569    $32,476,557
     Interest on investment securities             950,018       1,092,436          3,083,741      3,533,572
     Other interest income                          75,588         446,038            260,756        593,954
                                               -----------      ----------        -----------    -----------
          Total interest income                 15,273,726      13,033,205         42,107,066     36,604,083
INTEREST EXPENSE
     Interest on deposits                        4,333,635       4,104,959         11,984,219     11,111,447
     Interest on short-term borrowings             336,294         120,350            755,420        301,096
     Interest on long-term debt                         --          32,771                 --        272,897
                                                ----------      ----------        -----------    -----------
          Total interest expense                 4,669,929       4,258,080         12,739,639     11,685,440
                                                ----------      ----------        -----------    -----------
NET INTEREST INCOME                             10,603,797       8,775,125         29,367,427     24,918,643
     Loan loss provision                           600,000         600,000          1,700,000      1,200,000
                                                ----------      ----------        -----------    -----------
          Net interest income after
            loan loss provision                 10,003,797       8,175,125         27,667,427     23,718,643
NONINTEREST INCOME
     Service charges                               373,018         310,149          1,058,228        878,247
     Other                                         197,213         155,032            568,117        474,948
     Net gains on sales of loans                   128,157         389,720            781,940      1,120,611
     Net gains on sales of investment securities        --         192,569            298,625        599,885
                                                ----------      ----------        -----------    -----------
          Total noninterest income                 698,388       1,047,470          2,706,910      3,073,691
NONINTEREST EXPENSE
     Salaries and employee benefits              3,462,172       3,172,377         10,082,870      9,557,532
     Premises and equipment                        895,413         669,206          2,421,966      1,950,741
     Legal and professional                        154,588         229,355            464,926        639,493
     Advertising                                   227,016         165,223            586,130        501,753
     Printing and stationery                       135,658          94,567            398,928        320,397
     Amortization of goodwill                      174,847          21,447            314,405         64,341
     Other                                         671,203         340,398          1,785,130      1,281,466
                                               -----------      ----------        -----------    -----------
          Total noninterest expense              5,720,897       4,692,573         16,054,355     14,315,723
                                               -----------      ----------        -----------    -----------

Income before income taxes                       4,981,288       4,530,022         14,319,982     12,476,611
Provision for income taxes                       1,879,330       1,497,100          5,213,240      4,079,700
                                               -----------      ----------        -----------    -----------

NET INCOME                                     $ 3,101,958     $ 3,032,922        $ 9,106,742    $ 8,396,911
                                               ===========      ==========        ===========    ===========

Earnings per common share:
     Basic                                      $      .17      $      .17        $       .51     $      .48
     Diluted                                    $      .17      $      .16        $       .49     $      .45

Weighted average common shares outstanding:
     Basic                                      17,844,469      17,663,341        17,810,766      17,647,681
     Diluted                                    18,475,706      18,439,855        18,452,371      18,487,256

</TABLE>
See accompanying notes.


                                                    -5-


<PAGE>


<TABLE>
<CAPTION>
                                                            CENTENNIAL BANCORP
                                   CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                                              (Unaudited)

                                                                                                        Accumulated
                                                                                                           Other         Total
                                                  Comprehensive    Number of   Common        Retained   Comprehensive  Shareholders'
                                                     Income         Shares      Stock        Earnings   Income/(Loss)     Equity
                                                     ------         ------      ------       --------   -------------     ------
<S>                                               <C>            <C>          <C>           <C>         <C>            <C>
Balance at December 31, 1997                                     14,515,676   $29,031,352   $22,082,696     $696,110    $51,810,158

Comprehensive Income:
     Net Income                                    $8,396,911                                 8,396,911                   8,396,911
     Other comprehensive income, net of tax:
          Unrealized gain/(loss) on available-
          for-sale securities                         554,619                                                554,619        586,420
          Reclassification adjustment for net
          gains on sales of securities included
          in net income                              (371,929)                                              (371,929)      (403,730)
                                                   ----------
Comprehensive Income                               $8,579,601
                                                   ==========

Stock split (5%)                                                    727,386                                                      --

Stock options exercised                                              73,807       197,020                                   197,020
                                                                 ----------   -----------   -----------     --------    -----------
Balance at September 30, 1998                                    15,316,869   $29,228,372   $30,479,607     $878,800    $60,586,779
                                                                 ==========   ===========   ===========     ========    ===========

Balance at December 31, 1998                                     16,869,363   $29,690,949   $33,517,242     $508,950    $63,717,141

Comprehensive Income:
     Net Income                                    $9,106,742                                 9,106,742                   9,106,742
     Other comprehensive income, net of tax:
          Unrealized gain/(loss) on available-
          for-sale securities                      (1,509,502)                                            (1,509,502)    (1,509,502)
          Reclassification adjustment for net
          gains on sales of securities included
          in net income                              (185,148)                                              (185,148)      (185,148)
                                                   ----------
Comprehensive Income                               $7,412,092
                                                   ==========

Stock split (5%)                                                    843,468                                                      --

Stock options exercised                                             140,266       355,931                                   355,931

Tax benefit of stock options exercised                                            176,619                                   176,619
                                                                 ----------   -----------   -----------  ------------   -----------
Balance at September 30, 1999                                    17,853,097   $30,223,499   $42,623,984  ($1,185,700)   $71,661,783
                                                                 ==========   ===========   ===========  ============   ===========
</TABLE>

                                                                  -6-


<PAGE>



                                            CENTENNIAL BANCORP
                               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 (Unaudited)
<TABLE>
<CAPTION>
                                                                                      Nine Months Ended
                                                                                        September 30,
                                                                                  --------------------------
                                                                                       1999          1998
                                                                                  ------------  ------------
<S>                                                                               <C>           <C>
Net cash provided by operating activities                                         $ 4,976,666   $ 2,685,604
                                                                                   -----------    ----------
Cash flows from investing activities:
     Net increase in loans                                                       (121,891,128)  (72,297,925)
     Investment security purchases                                                (11,196,470)  (31,984,219)
     Proceeds from investment securities:
          Maturities                                                                1,761,521    20,300,918
          Sales                                                                    23,073,906    11,754,232
     Purchases of premises and equipment                                           (3,144,117)   (3,164,386)
                                                                                  -----------    ----------
          Net cash used in investing activities                                  (111,396,288)  (75,391,380)

Cash flows from financing activities:
     Net increase in deposits                                                      86,374,387    62,829,575
     Net increase in short-term borrowings                                         13,868,936     8,457,663
     Payment of long-term debt                                                             --   (10,000,000)
     Proceeds from issuance of common stock                                           532,550       197,020
                                                                                  -----------   -----------
          Net cash provided by financing activities                               100,775,873    61,484,258
                                                                                  -----------   -----------
Net decrease in cash and cash equivalents                                          (5,643,749)  (11,221,518)
Cash and cash equivalents at beginning of period                                   41,841,367    50,069,239
                                                                                  -----------   -----------
Cash and cash equivalents at end of period                                        $36,197,618   $38,847,721
                                                                                  ===========   ===========
</TABLE>
See accompanying notes.


                                                    -7-


<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 ("Bancorp"), and its
     wholly owned subsidiaries, Centennial Bank ("Bank") and Centennial Mortgage
     Co. ("Mortgage Co."). The Bank is an Oregon state-chartered bank which
     provides commercial banking services. Mortgage Co. originates residential
     mortgage loans for resale in the secondary market as well as loans for
     acquisition, development and construction of residential and commercial
     properties.

     The interim condensed consolidated financial statements are unaudited, but
     include all adjustments, consisting only of normal accruals, which Bancorp
     considers necessary for a fair presentation of the results of operations
     for such interim periods.

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

     The interim condensed consolidated financial statements should be read in
     conjunction with the consolidated financial statements, including the notes
     thereto, included in Bancorp's 1998 Annual Report to Shareholders.

     Certain amounts for 1998 have been reclassified to conform to the 1999
     presentation.


                                       -8-


<PAGE>


2.   Securities Available-for-Sale
     -----------------------------
     Securities available-for-sale consisted of the following at September 30,
     1999 and December 31, 1998:

                                              Gross        Gross       Estimated
                                Amortized   Unrealized   Unrealized      Fair
                                  Cost        Gains        Losses        Value
                                  ----        -----        ------        -----
     September 30, 1999:

     U.S. Treasuries        $ 1,400,304    $ 10,541            --    $ 1,410,845
     U.S. Government
        agencies             27,988,761       1,260    $1,154,080     26,835,941
     Obligations of
        states and
        political
        subdivisions         28,504,873     139,661       840,451     27,804,083
     Corporate bonds          2,302,726       1,010        46,280      2,257,456
     Mortgage-backed
        securities            2,448,855          --        23,830      2,425,025
                            -----------    --------     ---------    -----------
        Total               $62,645,519    $152,472    $2,064,641    $60,733,350
                            ===========    ========     =========    ===========

     December 31, 1998:

     U.S. Treasuries        $ 1,398,726  $   36,190      $     --    $ 1,434,916
     U.S. Government
        agencies             39,479,940     116,050       333,250     39,262,740
     Obligations of
        states and
        political
        subdivisions         28,571,672   1,006,580            --     29,578,252
     Corporate bonds          2,304,968      13,059         6,749      2,311,278
     Mortgage-backed
        securities            4,217,462       1,330        12,600      4,206,192
                            -----------  ----------      --------    -----------
        Total               $75,972,768  $1,173,209      $352,599    $76,793,378
                            ===========  ==========      ========    ===========


                                       -9-


<PAGE>


3.   Loans and Allowance for Loan Losses
     -----------------------------------

     The composition of the loan portfolio was as follows:

                                     September 30,   December 31,
                                          1999          1998
                                     ------------   ------------
     Real estate -- mortgage         $124,068,103   $ 94,692,594
     Real estate -- construction      191,649,211    151,163,783
     Commercial                       211,815,980    163,954,595
     Installment                        7,473,405      7,073,011
     Lease financing                    4,130,701      1,896,609
     Other                              4,516,523      3,137,402
                                     ------------   ------------
                                      543,653,923    421,917,994
     Allowance for loan losses         (5,847,234)    (4,450,614)
     Less deferred loan fees           (1,128,867)      (942,950)
                                     ------------   ------------
                                     $536,677,822   $416,524,430
                                     ============   ============

     Loans held for sale of $6,095,711 and $11,039,045 at September 30, 1999 and
     December 31, 1998, respectively, represent real estate mortgage loans.
     These loans are recorded at cost which approximates market.

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

                                         1999           1998
                                     -----------     -----------
     Balance at beginning of period  $4,450,614      $3,348,914
     Provision charged to operations  1,700,000       1,200,000
     Recoveries                          47,365          32,237
     Loans charged off                 (350,745)       (426,914)
                                     ----------      ----------
     Balance at end of period        $5,847,234      $4,154,237
                                     ==========      ==========

     At September 30, 1999, Bancorp had 14 loans requiring a specific valuation
     allowance in accordance with SFAS No. 114, as amended by SFAS No. 118 (11
     loans at December 31, 1998). The specific valuation allowance was $824,000
     on loans with remaining principal outstanding of $10,813,000 at September
     30, 1999 ($563,000 and $5,218,000, respectively, at December 31, 1998).
     Each loan with a current outstanding principal balance of less than
     $100,000 is grouped into one homogenous pool when considering the valuation
     allowance.


                                      -10-


<PAGE>


     At September 30, 1999 and December 31, 1998, the specific valuation
     allowance for these smaller loans was insignificant. The increase in the
     specific valuation allowance at September 30, 1999 was primarily
     attributable to two borrowers for which the specific valuation allowance
     was $236,000 on loans with remaining principal outstanding of $6,829,000.
     The amounts owed by one of these borrowers, which had a specific allowance
     of $125,000 and principal outstanding of $2,500,000 as of September 30,
     1999, was paid in full subsequent to quarter end.

     It is Bancorp's policy to place loans on nonaccrual status whenever
     collection in full 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, 1999 and December 31, 1998 were
     approximately $998,000 and $3,841,000, respectively.

     Loans past due 90 days or more on which Bancorp continued to accrue
     interest were approximately $2,278,000 at September 30, 1999, and
     approximately $1,043,000 at December 31, 1998. There were no loans on which
     the interest rate or payment schedule were modified from their original
     terms to accommodate a borrower's weakened financial position at September
     30, 1999 or December 31, 1998.


4.   Short-Term Borrowings
     ---------------------
     Short-term borrowings consisted of the following:

                                September 30, 1999   December 31, 1998
                                ------------------   -----------------
     Securities sold under
       agreement to repurchase       $12,519,007        $16,100,071
     Federal funds purchased          21,950,000          4,500,000
                                    ------------        -----------
                                     $34,469,007        $20,600,071
                                     ===========        ===========


                                      -11-


<PAGE>


5.  Earnings per Share of Common Stock
     ----------------------------------

     A reconciliation of the weighted average shares used to compute basic and
diluted earnings per share is as follows:

                                Three Months Ended September 30
                                -------------------------------
                                          1999          1998
                                       ----------    ----------
Weighted average shares
       outstanding - basic             17,844,469    17,663,341
     Additional shares from
       stock options                      631,237       776,514
                                       ----------    ----------
     Weighted average shares
       outstanding - diluted           18,475,706    18,439,855
                                       ==========    ==========

                                 Nine Months Ended September 30
                                 ------------------------------
                                          1999          1998
                                       ----------    ----------
Weighted average shares
       outstanding - basic             17,810,766    17,647,681
     Additional shares from
       stock options                      641,605       839,575
                                       ----------    ----------
     Weighted average shares
       outstanding - diluted           18,452,371    18,487,256
                                       ==========    ==========

     The weighted average number of common shares outstanding reflects the
     retroactive effect of stock splits and stock dividends.


                                      -12-


<PAGE>


                      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 WHICH 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: (1) POTENTIAL DELAYS OR OTHER PROBLEMS IN IMPLEMENTING
BANCORP'S GROWTH AND EXPANSION STRATEGY; (2) THE ABILITY TO ATTRACT NEW DEPOSITS
AND LOANS; (3) INTEREST RATE FLUCTUATIONS; (4) COMPETITIVE FACTORS AND PRICING
PRESSURES; (5) GENERAL ECONOMIC CONDITIONS, EITHER NATIONALLY OR REGIONALLY; (6)
CHANGES IN LEGAL AND REGULATORY REQUIREMENTS; (7) CHANGES IN TECHNOLOGY; AND (8)
YEAR 2000 PROBLEMS, AS WELL AS 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, 1998, 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 two wholly owned subsidiaries: Centennial Bank and
Centennial Mortgage Co. Bancorp primarily serves the Eugene, Oregon and
Portland, Oregon markets.

     At September 30, 1999, Centennial Bank operated 13 full-service and five
limited-service branches, including two new full-service Oregon branches opened
during July in downtown Portland and downtown Salem. The Bank opened another new
full-service branch in Clackamas, Oregon on November 1. At quarter end, the Bank
had a total of three commercial lending offices with locations in Eugene,
southwest Portland and the new downtown


                                      -13-


<PAGE>

Portland office which opened in July. Bancorp plans to open another
Portland-area commercial lending office at the new Clackamas, Oregon location.

     At September 30, 1999, Centennial Mortgage had three Portland and two
Eugene offices.

     Centennial Bancorp reported net income of $9.1 million, or $.51 per share
(basic), for the nine months ended September 30, 1999. This represented an 8.5%
increase in net income and a 6.3% increase in earnings per share (basic), as
compared to $8.4 million, or $.48 per share, for the nine months ended September
30, 1998. Net income of $3.1 million, or $.17 per share, for the quarter ended
September 30, 1999 represented a 2.3% increase in net income and stable earnings
per share (basic), as compared to $3.0 million, or $.17 per share, for the
quarter ended September 30, 1998. The increased earnings during the nine months
and the quarter ended September 30, 1999 primarily reflect the expansion of
Bancorp's interest-earning assets and increased net interest income. At
September 30, 1999, Bancorp recognized a 20.6% increase in total assets and an
18.9% increase in interest-earning assets as compared to September 30, 1998.

MATERIAL CHANGES IN FINANCIAL CONDITION
---------------------------------------

     Material changes in financial condition for the nine months ended September
30, 1999 included strong loan growth, a significant increase in other assets,
and the funding support provided by increased deposits, short-term borrowings,
sales of investment securities, and net income.

     At September 30, 1999, total assets were $680.7 million, representing an
increase of 19.0%, or $108.7 million, over total assets of $572 million at
December 31, 1998. Loans and loans held for sale increased $115.2 million as
compared to December 31, 1998, mainly due to increases in commercial, real
estate mortgage and construction loan totals.

     During the nine-month period, Bancorp's investment portfolio totals
decreased $16.1 million as available-for-sale securities were sold to help
support loan growth.

     At September 30, 1999, other assets totaled $20.9 million, a $12.7 million
increase when compared to December 31, 1998. The increase primarily resulted
from $9.0 million of goodwill associated with the acquisition of the Bank's
Hazel Dell Office, which is being amortized over 15 years.


                                      -14-


<PAGE>

     Total deposits increased $86.4 million, or 17.9%, to $570.2 million at
September 30, 1999 as compared to December 31, 1998. The increase was
concentrated in interest-bearing demand deposits.

     At September 30, 1999, short-term borrowings totaled $34.5 million, a $13.9
million increase when compared with totals at December 31, 1998. The increase
helped to fund Bancorp's asset growth.

     All other changes in asset and liability categories during the nine-month
period were comparatively modest.

     September 30, 1999 shareholders' equity was $71.7 million, a $7.9 million,
or 12.5%, increase over December 31, 1998. The increase was produced by net
income and stock option exercises and was partially offset by unrealized losses
on available-for-sale securities caused by increases in market interest rates.

MATERIAL CHANGES IN RESULTS OF OPERATIONS
-----------------------------------------

     Primarily due to continuing loan growth, total interest income increased
$5.5 million (or 15.0%) for the nine months and $2.2 million (or 17.2%) for the
quarter ended September 30, 1999 as compared to the same periods in 1998.

     Total interest expense increased $1.1 million (or 9.0%) for the nine months
and $412,000 (or 9.7%) for the quarter ended September 30, 1999 as compared to
the same 1998 periods. These increases were mainly due to the growth of
interest-bearing deposits.

     The increases in interest earned, partially offset by the increases in
interest paid, allowed Bancorp's net interest income to increase by $4.4 million
(or 17.9%) for the nine-month period, and $1.8 million (or 20.8%) for the third
quarter of 1999, over the comparable periods in 1998.

     For the nine- and three-month periods ended September 30, 1999, Bancorp
charged loan loss provisions of $1.7 million and $600,000, respectively, as
compared to $1.2 million and $600,000 for the same periods in 1998. The increase
in loss provision was primarily due to increasing loan totals.

     At September 30, 1999, Bancorp's allowance for loan losses was $5.8
million, as compared to $4.5 million and $4.2 million at December 31, 1998 and
September 30, 1998, respectively. Management believes that the allowance is
adequate for potential loan losses, based on management's assessment of various
factors, including present delinquent and non-performing loans, past


                                      -15-


<PAGE>

history of industry loan loss experience, and present and anticipated economic
trends impacting the areas and customers served by Bancorp. The allowance is
based on estimates, and actual losses may vary from those currently estimated.

     Noninterest income decreased $366,000 (or 11.9%) for the nine months and
$349,000 (or 33.3%) for the quarter ended September 30, 1999 as compared to the
same 1998 periods. The decreases reflected lower gains on sales of loans and
securities, primarily the result of rising interest rates, and were partially
offset by the increased service charge and fee income associated with Bancorp's
growing volume of deposit accounts and customer transactions.

     Noninterest expense increased $1.7 million (or 12.1%) for the nine months
and $1.0 million (or 21.9%) for the quarter ended September 30, 1999 as compared
to the same 1998 periods. These increases, primarily in salaries and employee
benefits, premises and equipment expense and goodwill amortization, were mainly
the result of Bancorp's continuing growth and expansion.

     The provision for income taxes increased for the nine months and the
quarter ended September 30, 1999, commensurate with Bancorp's increased pre-tax
income.

MARKET RISK
-----------

     Market risk is the risk of loss from adverse changes in market prices and
rates. Bancorp's market risk arises principally from interest rate risk in its
lending, deposit and borrowing activities. Management actively monitors and
manages its interest rate risk exposure. Although Bancorp manages other risks,
as in credit quality and liquidity risk, in the normal course of business,
management considers interest rate risk to be a significant market risk which
could have the largest material effect on Bancorp's financial condition and
results of operations. Other types of market risks, such as foreign currency
exchange rate risk and commodity price risk, do not arise in the normal course
of Bancorp's business activities.

     Bancorp did not experience a material change in market risk at September
30, 1999 as compared to December 31, 1998.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     Bancorp's principal subsidiary, Centennial Bank, has adopted policies to
maintain a relatively liquid position to enable it to


                                      -16-


<PAGE>

respond to changes in the Bank's needs and financial environment.
Generally, the Bank's major sources of liquidity are customer deposits, sales
and maturities of investment securities, the use of federal funds markets and
other short-term borrowings, 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.

     Along with federal funds lines, the Bank maintains a cash management
advance line of credit with the Federal Home Loan Bank, Seattle, Washington,
which allows temporary borrowings for liquidity. At September 30, 1999, the cash
management advance line was unused.

     At September 30, 1999, Bancorp's Tier 1 and total risk-based capital ratios
under the Federal Reserve Board's ("FRB") risk-based capital guidelines were
approximately 9.3% and 10.1%, respectively. The FRB's minimum risk-based capital
ratio guidelines for Tier 1 and total capital are 4% and 8%, respectively.

     At September 30, 1999, Bancorp's capital-to-assets ratio under leverage
ratio guidelines was approximately 9.7%. The FRB's current minimum leverage
capital ratio guideline is 4%.

EFFECTS OF THE YEAR 2000
------------------------

     The Year 2000 may pose unique challenges to all businesses due to the
inability of some computers and computer software programs to accurately
recognize, for years after 1999, dates which are often expressed as a two digit
number. This inability to recognize date information accurately could
potentially affect computer operations and calculations, or could cause computer
systems to not operate at all.

     The federal banking regulators have issued several statements providing
guidance to financial institutions on the steps the regulators expect financial
institutions to take to become Year 2000 compliant. Bancorp's Year 2000 programs
are designed to comply with this guidance. Each of the federal banking
regulators is also examining the financial institutions under its jurisdiction
to assess each institution's compliance with the outstanding guidance. If an
institution's progress in addressing the Year 2000 problem is deemed by its
primary federal regulator to be less than satisfactory, the institution will be
required to enter into a memorandum of understanding with the regulator which


                                      -17-


<PAGE>

will, among other things, require the institution to promptly develop and submit
an acceptable plan for becoming Year 2000 compliant and to provide periodic
reports describing the institution's progress in implementing the plan. Failure
to satisfactorily address the Year 2000 problem may also expose a financial
institution to other forms of enforcement action that its primary federal
regulator deems appropriate to address the deficiencies in the institution's
Year 2000 remediation program.

     Bancorp is heavily reliant on computers for accounting for customer records
and transactions, as well as operating performance. Recognizing the risks of the
Year 2000 problem, management organized a task force in early 1997 to identify
and address the issues related to the Year 2000. Also, in order to elevate
public awareness of the potential for Year 2000 problems, management organized
and sponsored community seminars and conducted periodic speaking engagements in
both the Eugene- and Portland-area markets. Bancorp also included Year 2000
updates in customer statements.

     To date, Bancorp's Year 2000 task force has identified the internal
computer hardware and software utilized by Bancorp, as well as mechanical
systems which may be dependent upon computer components, and contacted vendors
seeking their certification of Year 2000 compliance (Bancorp does not utilize
any proprietary computer hardware or software). The task force has retained
computer consultants to assist with testing of computer hardware and software.
The testing process was completed on schedule according to regulatory
guidelines. Results to date indicate systems are compliant. Additional testing
may continue through year end 1999 to ensure systems compliance to the maximum
extent possible.

     Management of Bancorp has also required that lending personnel determine
loan customer awareness and intent to timely achieve Year 2000 compliance.
Bancorp's credit risk associated with borrowers may increase to the extent
borrowers fail to adequately address their Year 2000 issues. As a result, there
may be increases in problem loans and credit losses in future years. In
addition, because of the possible effects on Bancorp's cash needs and liquidity,
management has interviewed selected significant deposit customers to determine
their Year 2000 compliance efforts and anticipated potential cash requirements
due to the Year 2000 problem.

     Bancorp's inquiry of each of its material vendors, borrowers and depositors
has not disclosed that any such person has failed to adequately address the Year
2000 issue. Notwithstanding Bancorp's efforts, there can be no assurance that
these or other third parties significant to Bancorp's operations will adequately
address such issue.


                                      -18-


<PAGE>

During 1998, management budgeted $100,000 and spent $74,000 for Year 2000
compliance costs. The 1999 budget for such costs is $200,000 (reduced from
$300,000). For the nine months ended September 30, 1999, expenditures totaled
approximately $56,000. Management believes the amount budgeted will exceed
expenditures for 1999. Bancorp has recognized no Year 2000 equipment impairment
writedowns to date and does not anticipate that any will be incurred.

     Management believes that its efforts to achieve Year 2000 compliance and
the impact of the Year 2000 problem will not have a material effect on
operations. Although Bancorp believes the actions taken at this time are
suitable and appropriate to address the Year 2000 issue, there can be no
assurance that such measures will be sufficient or that Year 2000 issues will
not have an adverse impact, at least temporarily, on operations. Specific
factors which could affect Bancorp's ability to address Year 2000 issues include
the ability to locate and correct all relevant systems, the ability of
consultants to complete their testing on schedule, the compliance of third-party
vendors and service providers upon whom Bancorp relies, and similar
uncertainties.

     Management believes that a reasonably likely worst case scenario as to the
effect on Bancorp of the Year 2000 compliance issue is that one or more
significant third parties fail to become Year 2000 compliant and disrupt the
Company's operations. It is not possible to quantify the potential impact of any
such disruption at this time.

     Bancorp has prepared contingency plans to minimize disruption to its
operations due to Year 2000 issues. Included are plans to insulate critical
business operations and develop alternatives to mitigate potential effects of
critical third parties whose own failure to properly address Year 2000 issues
may adversely impact Bancorp operations. Alternative strategies and contingency
plans for liquidity and cash are also included as part of such plans. The
contingency plans for critical business operations were completed during the
second quarter as anticipated. Review and validation of these plans will
continue through the remainder of 1999. There can be no assurance that any such
plans will fully mitigate any failures or problems.

     The forward-looking statements contained herein with regard to the timing
and overall cost estimates of Bancorp's efforts to address the Year 2000 problem
are based upon Bancorp's experience thus far in this effort. Should Bancorp
encounter unforeseen difficulties either in the continuing review of its
computerized systems, their ultimate remediation, or the response of parties
with which it does business or from which it obtains services, the actual
results could vary significantly from the estimates contained in these
forward-looking statements.


                                      -19-


<PAGE>


                           PART II - OTHER INFORMATION

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

(a)  Exhibits

     27    Financial Data Schedule


(b)  Reports on Form 8-K

     None



                                      -20-


<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 10, 1999         /s/ Richard C. Williams
                              -----------------------------------
                              Richard C. Williams
                              President & Chief Executive Officer




Dated:  November 10, 1999         /s/ Michael J. Nysingh
                              -----------------------------------
                              Michael J. Nysingh
                              Chief Financial Officer


                                      -21-