##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington D.C. 20549
 FORM 10-Q
 [X]
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2005
 [ ]
    
    Transition Report Under Section 13 or 15(d) of the Exchange Act
 For the transition period from ______to ______
  EVERGREENBANCORP, INC.
  WASHINGTON
    
    91-2097262(State or Other Jurisdiction of
Incorporation or Organization)
    
    (I.R.S. Employer
Identification Number)
 301 Eastlake Avenue East
Seattle, Washington 98109
 (206) 628-4250




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PART I
FINANCIAL INFORMATIONItem 1.Unaudited Consolidated Financial Statements.
    3Unaudited Consolidated Balance Sheets  June 30, 2005 and December 31, 2004.
    3Unaudited Consolidated Statements of Income  For the three months and six months ended June 30, 2005 and 2004.
    4Unaudited Consolidated Statements of Stockholders Equity  For the six months ended June 30, 2005 and 2004.
        5Unaudited Consolidated Statements of Comprehensive Income  For the three months and six months ended June 30, 2005
6Unaudited Consolidated Statements of Cash Flows  For the six months ended June 30, 2005 and 2004.
7Notes to Unaudited Consolidated Financial Information.
8Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations.
13Item 3.Quantitative and Qualitative Disclosure About Market Risk.
19Item 4.Controls and Procedures.
20PART II
OTHER INFORMATION
21Item 1.Legal Proceedings.
21Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.
21Item 3.Defaults Upon Senior Securities.
21Item 4.Submission of Matters to a Vote of Security Holders.
21Item 5.Other Information.
21Item 6.Exhibits.
22EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
   
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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
 
 June 30,
    
    
    December 31,2005
    
    
    2004AssetsCash and due from banks
    
    $
    7,403
    
    
    $
    9,407Federal funds sold
    
    
    13,583
    
    
    
    2,736Interest-bearing deposits in financial institutions
    
    
    1,337
    
    
    
    2Total cash and cash equivalents
    
    
    22,323
    
    
    
    12,145Securities available for sale
    
    
    35,462
    
    
    
    35,170Loans
    
    
    154,169
    
    
    
    159,656Allowance for loan losses
    
    
    (1,898
    )
    
    
    (1,887
    )Net loans
    
    
    152,271
    
    
    
    157,769Premises and equipment
    
    
    3,028
    
    
    
    2,576Accrued interest and other assets
    
    
    2,923
    
    
    
    1,970Total assets
    
    $
    216,007
    
    
    $
    209,630LiabilitiesDepositsNoninterest-bearing
    
    $
    53,901
    
    
    $
    54,193Interest-bearing
    
    
    127,847
    
    
    
    119,608Total deposits
    
    
    181,748
    
    
    
    173,801Federal Home Loan Bank advances
    
    
    9,181
    
    
    
    11,067Accrued expenses and other liabilities
    
    
    2,445
    
    
    
    2,277Junior subordinated debt
    
    
    5,000
    
    
    
    5,000Total liabilities
    
    $
    198,374
    
    
    $
    192,145Stockholders equityPreferred stock: no par value; 100,000 shares authorized; none issued
    
    
    
    
    
    
    Common stock and surplus: No par value; 15,000,000 shares
authorized; 1,497,907 shares issued at June 30, 2005; 1,494,321
shares at
December 31, 2004
    
    
    15,973
    
    
    
    15,927Retained earnings
    
    
    1,967
    
    
    
    1,678Accumulated other comprehensive loss
    
    
    (307
    )
    
    
    (120
    )Total stockholders equity
    
    
    17,633
    
    
    
    17,485Total liabilities and stockholders equity
    
    $
    216,007
    
    
    $
    209,630
 See accompanying notes to unaudited consolidated financial statements.
 -3-




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##### Table of Contents



Three months ended June 30,
    
    
    Six months ended June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Interest incomeLoans, including fees
    
    $
    2,926
    
    
    $
    2,427
    
    
    $
    5,804
    
    
    $
    4,863Taxable securities
    
    
    257
    
    
    
    237
    
    
    
    507
    
    
    
    500Tax exempt securities
    
    
    29
    
    
    
    22
    
    
    
    55
    
    
    
    44Federal funds sold and other
    
    
    75
    
    
    
    16
    
    
    
    100
    
    
    
    20Total interest income
    
    
    3,287
    
    
    
    2,702
    
    
    
    6,466
    
    
    
    5,427Interest expenseDeposits
    
    
    591
    
    
    
    339
    
    
    
    1,110
    
    
    
    662Federal funds purchased
    
    
    
    
    
    
    3
    
    
    
    4
    
    
    
    6Federal Home Loan Bank advances
    
    
    115
    
    
    
    134
    
    
    
    234
    
    
    
    281Junior subordinated debt
    
    
    83
    
    
    
    68
    
    
    
    159
    
    
    
    127Total interest expense
    
    
    789
    
    
    
    544
    
    
    
    1,507
    
    
    
    1,076Net interest income
    
    
    2,498
    
    
    
    2,158
    
    
    
    4,959
    
    
    
    4,351Provision for loan losses
    
    
    66
    
    
    
    80
    
    
    
    147
    
    
    
    140Net interest income after provision for loan losses
    
    
    2,432
    
    
    
    2,078
    
    
    
    4,812
    
    
    
    4,211Noninterest incomeService charges on deposit accounts
    
    
    284
    
    
    
    231
    
    
    
    532
    
    
    
    460Merchant credit card processing
    
    
    39
    
    
    
    36
    
    
    
    78
    
    
    
    81Gain on sales of securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15Other commissions and fees
    
    
    37
    
    
    
    37
    
    
    
    63
    
    
    
    76Other noninterest income
    
    
    82
    
    
    
    118
    
    
    
    198
    
    
    
    240Total noninterest income
    
    
    442
    
    
    
    422
    
    
    
    871
    
    
    
    872Noninterest expenseSalaries and employee benefits
    
    
    1,204
    
    
    
    1,036
    
    
    
    2,338
    
    
    
    2,088Occupancy and equipment
    
    
    421
    
    
    
    338
    
    
    
    810
    
    
    
    670Data processing
    
    
    196
    
    
    
    180
    
    
    
    385
    
    
    
    358Marketing
    
    
    108
    
    
    
    119
    
    
    
    203
    
    
    
    177Loss on other real estate owned
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    132Other noninterest expense
    
    
    609
    
    
    
    406
    
    
    
    1,165
    
    
    
    812Total noninterest expense
    
    
    2,538
    
    
    
    2,079
    
    
    
    4,901
    
    
    
    4,237Income before income taxes
    
    
    336
    
    
    
    421
    
    
    
    782
    
    
    
    846Income tax expense
    
    
    122
    
    
    
    141
    
    
    
    269
    
    
    
    280Net income
    
    $
    214
    
    
    $
    280
    
    
    $
    513
    
    
    $
    566Basic earnings per share
    
    $
    0.14
    
    
    $
    0.19
    
    
    $
    0.34
    
    
    $
    0.38Diluted earnings per share
    
    $
    0.14
    
    
    $
    0.18
    
    
    $
    0.34
    
    
    $
    0.37
 See accompanying notes to unaudited consolidated financial statements.
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##### Table of Contents



AccumulatedCommon
    
    
    
    
    
    
    otherCommon
    
    
    stock
    
    
    
    
    
    
    comprehen-
    
    
    Total stock-stock
    
    
    and
    
    
    Retained
    
    
    sive
    
    
    holdersshares
    
    
    surplus
    
    
    earnings
    
    
    come
    
    
    equityBalance at January 1, 2004
    
    
    1,190,366
    
    
    $
    15,854
    
    
    $
    778
    
    
    $
    (49
    )
    
    $
    16,583Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    566
    
    
    
    
    
    
    
    566Change in net unrealized gain
(loss) on securities available
for sale, net of deferred
income tax benefit of $143
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (278
    )
    
    
    (278
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    288Cash dividends ($.128 per share)
    
    
    
    
    
    
    
    
    
    
    (191
    )
    
    
    
    
    
    
    (191
    )Exercise of stock options and
related tax benefit
    
    
    2,514
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    35Balance at June 30, 2004
    
    
    1,192,880
    
    
    $
    15,889
    
    
    $
    1,153
    
    
    $
    (327
    )
    
    $
    16,715
 AccumulatedCommon
    
    
    
    
    
    
    otherCommon
    
    
    stock
    
    
    
    
    
    
    comprehen-
    
    
    Total stock-stock
    
    
    and
    
    
    Retained
    
    
    sive
    
    
    holdersshares
    
    
    surplus
    
    
    earnings
    
    
    income (loss)
    
    
    equityBalance at January 1, 2005
    
    
    1,494,321
    
    
    $
    15,927
    
    
    $
    1,678
    
    
    $
    (120
    )
    
    $
    17,485Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    513
    
    
    
    
    
    
    
    513Change in net unrealized gain
(loss) on securities available
for sale, net of deferred
income tax benefit of $96
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (187
    )
    
    
    (187
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    326Cash dividends ($.15 per share)
    
    
    
    
    
    
    
    
    
    
    (224
    )
    
    
    
    
    
    
    (224
    )Exercise of stock options and
related tax benefit
    
    
    3,586
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    46Balance at June 30, 2005
    
    
    1,497,907
    
    
    $
    15,973
    
    
    $
    1,967
    
    
    $
    (307
    )
    
    $
    17,633
 See accompanying notes to unaudited consolidated financial statements.
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##### Table of Contents



Three months ended June 30,
    
    
    Six months ended June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income
    
    $
    214
    
    
    $
    280
    
    
    $
    513
    
    
    $
    566Other comprehensive income (loss):Change in unrealized gain (loss) on
securities
available for sale
    
    
    12
    
    
    
    (621
    )
    
    
    (283
    )
    
    
    (406
    )Reclassification adjustment for gains
included
in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15
    )Net unrealized gains (losses)
    
    
    12
    
    
    
    (621
    )
    
    
    (283
    )
    
    
    (421
    )Tax effect
    
    
    (4
    )
    
    
    211
    
    
    
    96
    
    
    
    143Total other comprehensive income (loss)
    
    
    8
    
    
    
    (410
    )
    
    $
    (187
    )
    
    $
    (278
    )Total comprehensive income (loss)
    
    $
    222
    
    
    $
    (130
    )
    
    $
    326
    
    
    $
    288
 See accompanying notes to unaudited consolidated financial statements.
 -6-




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##### Table of Contents



June 30,
    
    
    June 30,2005
    
    
    2004Cash flows from operating activitiesNet income
    
    $
    513
    
    
    $
    566Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation
    
    
    366
    
    
    
    321Provision for loan losses
    
    
    147
    
    
    
    140Gain from sales of securities
    
    
    
    
    
    
    (15
    )Write-down of other real estate owned
    
    
    
    
    
    
    132Amortization of premiums and discounts on securities
    
    
    30
    
    
    
    39Federal Home Loan Bank stock dividends
    
    
    (6
    )
    
    
    (27
    )Dividends reinvested
    
    
    (190
    )
    
    
    (176
    )Other changes, net
    
    
    (681
    )
    
    
    47Net cash provided by operating activities
    
    
    179
    
    
    
    1,027Cash flows from investing activitiesProceeds from sales, maturities and principal
payments on securities available for sale
    
    
    715
    
    
    
    4,026Net (increase) decrease in loans
    
    
    5,351
    
    
    
    72Purchases of securities available for sale
    
    
    (1,124
    )
    
    
    1,190Proceeds from sale of other real estate owned
    
    
    
    
    
    
    2,539Purchases of premises and equipment
    
    
    (818
    )
    
    
    (190
    )Net cash provided by (used in) investing activities
    
    
    4,124
    
    
    
    7,637Cash flows from financing activitiesNet increase in deposits
    
    
    7,947
    
    
    
    5,757Net decrease in federal funds purchased
    
    
    
    
    
    
    (1,524
    )Repayments Federal Home Loan Bank advances
    
    
    (1,886
    )
    
    
    (3,882
    )Proceeds from exercise of stock options
    
    
    38
    
    
    
    29Dividends paid
    
    
    (224
    )
    
    
    (191
    )Net cash provided by financing activities
    
    
    5,875
    
    
    
    189Net increase in cash and cash equivalents
    
    
    10,178
    
    
    
    8,853Cash and cash equivalents at beginning of year
    
    
    12,145
    
    
    
    10,625Cash and cash equivalents at end of period
    
    $
    22,323
    
    
    $
    19,478
 See accompanying notes to unaudited consolidated financial statements.
 -7-




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EVERGREENBANCORP, INC.
NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 Note 1: Summary of Significant Accounting Policies
 Organization.
  Operating Segments
 Principles of consolidation.
 Critical accounting policies and use of estimates.
 Newly issued accounting pronouncements.
 Stock-Based Compensation.
 -8-




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##### Table of Contents



Accounting for Stock-Based Compensation.
 Three months ended June 30,(in thousands, except per share data)
    
    2005
    
    
    2004Net income as reported
    
    $
    214
    
    
    $
    280Deduct: Stock-based compensation expense determined under fair
value based method
    
    
    14
    
    
    
    12Pro forma net income
    
    
    200
    
    
    $
    268Basic earnings per share as reported
    
    $
    0.14
    
    
    $
    0.19Pro forma basic earnings per share
    
    
    0.13
    
    
    
    0.18Diluted earnings per share as reported
    
    
    0.14
    
    
    
    0.18Pro forma diluted earnings per share
    
    
    0.13
    
    
    
    0.18
 Six months ended June 30,(in thousands, except per share data)
    
    2005
    
    
    2004Net income as reported
    
    $
    513
    
    
    $
    566Deduct: Stock-based compensation expense determined under fair
value based method
    
    
    28
    
    
    
    24Pro forma net income
    
    $
    485
    
    
    $
    542Basic earnings per share as reported
    
    $
    0.34
    
    
    $
    0.38Pro forma basic earnings per share
    
    
    0.32
    
    
    
    0.36Diluted earnings per share as reported
    
    
    0.34
    
    
    
    0.37Pro forma diluted earnings per share
    
    
    0.31
    
    
    
    0.36
  Three months endedJune 30, 2005Risk-free interest rate
    
    
    3.87
    %Expected option life
    
    7.5 yearsExpected stock price volatility
    
    
    22
    %Dividend yield
    
    
    1.6
    %
 Six months endedJune 30, 2005Risk-free interest rate
    
    
    3.86
    %Expected option life
    
    7.5 yearsExpected stock price volatility
    
    
    21
    %Dividend yield
    
    
    1.6
    %
 -9-




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Note 2: Stock split
  Note 3: Stock options
  Note 4: Securities available for sale
   Less than 12 Months
    
    
    12 Months or More
    
    
    
    
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription of Securities
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossU.S. agencies
    
    $
    5,456
    
    
    $
    (57
    )
    
    $
    2,472
    
    
    $
    (29
    )
    
    $
    7,928
    
    
    $
    (86
    )State and political subdivisions
    
    
    3,537
    
    
    
    (29
    )
    
    
    149
    
    
    
    (2
    )
    
    
    3,686
    
    
    
    (31
    )Mortgage-backed securities
    
    
    
    
    
    
    
    
    
    
    5,661
    
    
    
    (72
    )
    
    
    5,661
    
    
    
    (72
    )AMF Adjustable Rate Mortgage Fund
    
    
    375
    
    
    
    (44
    )
    
    
    14,540
    
    
    
    (247
    )
    
    
    14,915
    
    
    
    (291
    )Total temporarily impaired
    
    $
    9,368
    
    
    $
    (130
    )
    
    $
    22,822
    
    
    $
    (350
    )
    
    $
    32,190
    
    
    $
    (480
    )
   -10-




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Less than 12 Months
    
    
    12 Months or More
    
    
    
    
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription of Securities
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossU.S. agencies
    
    $
    3,495
    
    
    $
    (25
    )
    
    $
    988
    
    
    $
    (12
    )
    
    $
    4,483
    
    
    $
    (37
    )State and political subdivisions
    
    
    891
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    891
    
    
    
    (4
    )Mortgage-backed securities
    
    
    6,210
    
    
    
    (36
    )
    
    
    31
    
    
    
    
    
    
    
    6,240
    
    
    
    (36
    )AMF Adjustable Rate Mortgage Fund
    
    
    283
    
    
    
    (1
    )
    
    
    14,549
    
    
    
    (184
    )
    
    
    14,832
    
    
    
    (185
    )Total temporarily impaired
    
    $
    10,879
    
    
    $
    (66
    )
    
    $
    15,568
    
    
    $
    (196
    )
    
    $
    26,446
    
    
    $
    (262
    )
  Note 5: Earnings per share
   Three months ended June 30,2005
    
    
    2004(in thousands, except share and per share data):Income (numerator):Net income
    
    $
    214
    
    
    $
    280Income (denominator):Weighted
average number of common stock shares outstanding  basic
    
    
    1,497,554
    
    
    
    1,490,813Dilutive effect of outstanding employee and director stock options
    
    
    33,411
    
    
    
    24,171Weighted average number of common stock shares outstanding and
assumed conversion  diluted
    
    
    1,530,965
    
    
    
    1,514,984Basic earnings per share
    
    $
    0.14
    
    
    $
    0.19Diluted earnings per share
    
    $
    0.14
    
    
    $
    0.18
 -11-




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Six months ended June 30,2005
    
    
    2004(in thousands, except share and per share data):Income (numerator):Net income
    
    $
    513
    
    
    $
    566Income (denominator):Weighted
average number of common stock shares outstanding  basic
    
    
    1,497,556
    
    
    
    1,490,443Dilutive effect of outstanding employee and director stock options
    
    
    32,624
    
    
    
    24,569Weighted average number of common stock shares outstanding and
assumed conversion  diluted
    
    
    1,530,180
    
    
    
    1,515,012Basic earnings per share of common stock
    
    $
    0.34
    
    
    $
    0.38Diluted earnings per share of common stock
    
    $
    0.34
    
    
    $
    0.37
 Note 6: Retirement Benefits
   Components of net periodic benefit cost
 Three months ended
    
    
    Six monthsJune 30,
    
    
    ended June 30,(in thousands)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Service cost
    
    $
    22
    
    
    $
    23
    
    
    $
    44
    
    
    $
    46Interest cost
    
    
    23
    
    
    
    22
    
    
    
    46
    
    
    
    44Amortization of transition obligation
    
    
    10
    
    
    
    10
    
    
    
    20
    
    
    
    20Recognized actuarial (gain) loss
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Net periodic benefit cost
    
    $
    55
    
    
    $
    55
    
    
    $
    110
    
    
    $
    110
 -12-




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    RESULTS OF OPERATIONS
 Net Income
 Three months and six months ended June 30, 2005 and 2004
     -13-




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##### Table of Contents



Net Interest Income and Net Interest Margin
        Noninterest Income/Expense
   Income tax expense
  -14-




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Provision and Allowance for Loan Losses
     FINANCIAL CONDITION
 Loans
    Types of Loans
 June 30,
    
    
    December 31,(in thousands)
    
    2005
    
    
    2004Commercial
    
    $
    49,815
    
    
    $
    55,563Real estate:Commercial
    
    
    74,233
    
    
    
    67,165Construction
    
    
    7,339
    
    
    
    11,538Residential 1-4 family
    
    
    8,508
    
    
    
    11,508Consumer and other
    
    
    14,274
    
    
    
    13,882Total
    
    $
    154,169
    
    
    $
    159,656
 -15-




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Allocation of the Allowance for Loan Losses
  June 30,
    
    
    % of loans in
    
    
    December 31,
    
    
    % of loans in2005
    
    
    each category
    
    
    2004
    
    
    each category(in thousands)
    
    Amount
    
    
    to Total Loans
    
    
    Amount
    
    
    to Total LoansCommercial
    
    $
    962
    
    
    
    32
    %
    
    $
    1,000
    
    
    
    35
    %Real estate:Commercial
    
    
    653
    
    
    
    48
    
    
    
    568
    
    
    
    42Construction
    
    
    74
    
    
    
    5
    
    
    
    117
    
    
    
    7Residential 1-4 family
    
    
    14
    
    
    
    6
    
    
    
    11
    
    
    
    7Consumer and other
    
    
    195
    
    
    
    9
    
    
    
    191
    
    
    
    9Total
    
    $
    1,898
    
    
    
    100
    %
    
    $
    1,887
    
    
    
    100
    %% of Loan portfolio
    
    
    1.23
    %
    
    
    
    
    
    
    1.18
    %
  Analysis of Allowance for Loan Losses
  Six monthsended
    
    
    Six monthsended(in thousands)
    
    June 30, 2005
    
    
    June 30, 2004Beginning Balance
    
    $
    1,887
    
    
    $
    1,636ChargeoffsCommercial
    
    
    138
    
    
    
    Real estate:Commercial
    
    
    1
    
    
    
    Construction
    
    
    
    
    
    
    Residential 1-4 family
    
    
    
    
    
    
    Consumer and other
    
    
    11
    
    
    
    58Total charge-offs
    
    $
    150
    
    
    $
    58RecoveriesCommercial
    
    $
    5
    
    
    $
    6Real estate:Commercial
    
    
    
    
    
    
    Construction
    
    
    
    
    
    
    Residential 1-4 family
    
    
    
    
    
    
    Consumer and other
    
    
    9
    
    
    
    8Total Recoveries
    
    $
    14
    
    
    $
    14Net chargeoffs/(recoveries)
    
    $
    136
    
    
    $
    44Provision
    
    
    147
    
    
    
    140Ending balance
    
    $
    1,898
    
    
    $
    1,732
 -16-




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Investments
  Deposits
  Borrowings
  Stockholders Equity and Capital Resources
    -17-




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Minimum to BeWell CapitalizedMinimum for
    
    
    Under the PromptCapital Adequacy
    
    
    Corrective ActionActual
    
    
    Purposes
    
    
    ProvisionsAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioJune 30, 2005Total capital (to risk-weighted
assets)Consolidated
    
    $
    24,662
    
    
    
    14.12
    %
    
    $
    13,972
    
    
    
    8.00
    %
    
    $
    17,465
    
    
    
    10.00
    %Bank
    
    
    24,286
    
    
    
    13.92
    
    
    
    13,962
    
    
    
    8.00
    
    
    
    17,452
    
    
    
    10.00Tier 1 capital (to risk-weighted
assets)Consolidated
    
    
    22,764
    
    
    
    13.03
    
    
    
    6,986
    
    
    
    4.00
    
    
    
    10,479
    
    
    
    6.00Bank
    
    
    22,388
    
    
    
    12.83
    
    
    
    6,981
    
    
    
    4.00
    
    
    
    10,471
    
    
    
    6.00Tier 1 capital (to average assets)Consolidated
    
    
    22,764
    
    
    
    10.86
    
    
    
    8,387
    
    
    
    4.00
    
    
    
    10,483
    
    
    
    5.00Bank
    
    
    22,388
    
    
    
    10.68
    
    
    
    8,387
    
    
    
    4.00
    
    
    
    10,483
    
    
    
    5.00December 31, 2004Total capital (to risk-weighted
assets)Consolidated
    
    $
    24,305
    
    
    
    14.03
    %
    
    $
    13,826
    
    
    
    8.00
    %
    
    $
    17,282
    
    
    
    10.00
    %Bank
    
    
    23,651
    
    
    
    13.71
    
    
    
    13,805
    
    
    
    8.00
    
    
    
    17,256
    
    
    
    10.00Tier 1 capital (to risk-weighted
assets)Consolidated
    
    
    22,419
    
    
    
    12.94
    
    
    
    6,913
    
    
    
    4.00
    
    
    
    10,369
    
    
    
    6.00Bank
    
    
    21,764
    
    
    
    12.61
    
    
    
    6,902
    
    
    
    4.00
    
    
    
    10,354
    
    
    
    6.00Tier 1 capital (to average assets)Consolidated
    
    
    22,419
    
    
    
    11.07
    
    
    
    8,083
    
    
    
    4.00
    
    
    
    10,104
    
    
    
    5.00Bank
    
    
    21,764
    
    
    
    10.77
    
    
    
    8,083
    
    
    
    4.00
    
    
    
    10,104
    
    
    
    5.00
 Contractual Obligations and Commitments
    -18-




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##### Table of Contents



Within
    
    
    
    
    
    
    
    
    
    
    After(in thousands)
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 Years
    
    
    TotalFederal Home Loan
Bank advances
    
    $
    4,880
    
    
    $
    2,449
    
    
    $
    1,852
    
    
    $
    0
    
    
    $
    9,181Junior subordinated debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    5,000Time Deposits
    
    
    48,457
    
    
    
    9,263
    
    
    
    1,273
    
    
    
    
    
    
    
    58,993Operating leases
    
    
    759
    
    
    
    1,073
    
    
    
    709
    
    
    
    1,298
    
    
    
    3,839Total
    
    $
    54,096
    
    
    $
    12,785
    
    
    $
    3,834
    
    
    $
    6,298
    
    
    $
    77,012
  Liquidity
    
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Net interest income analysis as of June 30, 2005:
  ANNUALIZED DOLLAR CHANGEIMMEDIATE RATE CHANGE
    
    IN NET INTEREST INCOME
    
    
    PERCENT CHANGE+200bp
    
    
    793
    
    
    
    7.65+100bp
    
    
    397
    
    
    
    3.83+ 50bp
    
    
    199
    
    
    
    1.92- 50bp
    
    
    (187
    )
    
    
    (1.81
    )-100bp
    
    
    (374
    )
    
    
    (3.61
    )-200bp
    
    
    (1,043
    )
    
    
    (10.07
    )
 -19-




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
   Forward-Looking Information Statement
  -20-




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   Proposal No. 1:
 Director
    
    For
    
    
    Against
    
    
    WithheldRichard W. Baldwin
    
    
    1,140,874
    
    
    
    0
    
    
    
    6,794C. Don Filer
    
    
    1,139,701
    
    
    
    0
    
    
    
    7,967
 Proposal No. 2:
 For
    
    Against
    
    Abstain1,137,795
    
    
    1,714
    
    
    
    8,159
 
 ITEM 5. OTHER INFORMATION
  -21-




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##### Table of Contents



ITEM 6. EXHIBITS
 (a) Exhibits
 Exhibit 31.1  Certification of Chief Executive Officer Pursuant to Rule 13a-15(e)/15d-15(e)Exhibit 31.2  Certification of Chief Financial Officer Pursuant to Rule 13a-15(e)/15d-15(e)Exhibit 32.1  Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Exhibit 32.2  Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    EVERGREENBANCORP, INC./s/ William G. Filer IIWilliam G. Filer IISenior Vice President and Chief Financial Officer
(Authorized Officer and Principal Financial Officer) -22-