##### 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 September 30, 2002
|--- | -------------------------------------------------------------------------------------------------------------------------------------------



|[   ] | Transition Report Under Section 13 or 15(d) of the Exchange Act 
For the transition period from _______________ to _______________
|----- | ----------------------------------------------------------------------------------------------------------------------------------

Commission File No. 000-32915

EVERGREENBANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)

|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|WASHINGTON                                                     |  | 91-2097262                             
|                                                               |  |                                        
|(State or Other Jurisdiction of
Incorporation or Organization) |  | (I.R.S. Employer
Identification Number)

301 Eastlake Avenue East
Seattle, Washington 98109-5407
(Address of Principal Executive Offices) (Zip Code)

(206) 628-4250
(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 Exchange Act 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 the latest practicable date:

Common Stock, no par value, outstanding as of September 30, 2002: 1,075,461 shares
No Preferred stock were issued or outstanding.





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TABLE OF CONTENTS



|                               |                                                                                               |                                                     |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | --------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements.                                                                
|                               |                                                                                               | Consolidated statements of condition               
|                               |                                                                                               | Consolidated statements of income                  
|                               |                                                                                               | Consolidated Statements of Stockholders Equity    
|                               |                                                                                               | Consolidated statements of cash flows              
|                               |                                                                                               | NOTES TO CONSOLIDATED INTERIM FINANCIAL INFORMATION
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                               | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II  OTHER INFORMATION   
|                               | ITEM 1. LEGAL PROCEEDINGS.                                                                   
|                               | ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.                                           
|                               | ITEM 3. DEFAULTS UPON SENIOR SECURITIES.                                                     
|                               | ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.                                   
|                               | ITEM 5. OTHER INFORMATION.                                                                   
|                               | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.                                                    
|                               |                                                                                               | (a) Exhibits                                       
|                               |                                                                                               | (b) Reports on Form 8-K                            
|SIGNATURES                    
|EXHIBIT 11                    
|EXHIBIT 99.1                  
|EXHIBIT 99.2                  



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##### Table of Contents



|                                                                                                         |                                                                                                               |                                                                                        |  | 
|-------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- |  | 
|                                                                                                         |                                                                                                               | PART I                                                                                
|                                                                                                         |                                                                                                               | FINANCIAL INFORMATION                                                                 
|                                                                                                        
|Item 1. Consolidated Financial Statements.                                                              
|                                                                                                        
|The following consolidated financial statements are presented for the registrant,
EvergreenBancorp, Inc.
|                                                                                                        
|1.                                                                                                       | Balance Sheets - September 30, 2002 and December 31, 2001.                                                   
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|2.                                                                                                       | Statements of Income - For the three-month and nine-month periods ended September 30, 2002 and 2001.         
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|3.                                                                                                       | Statements of Changes in Shareholders' Equity - For the nine-month periods ended September 30, 2002 and 2001.
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|4.                                                                                                       | Statements of Cash Flows - For the nine-month periods ended September 30, 2002 and 2001.                     
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|5.                                                                                                       | Notes to Consolidated Interim Financial Information.                                                         
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Item 2.                                                                                                  |                                                                                                               | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Item 3.                                                                                                  |                                                                                                               | Quantitative and Qualitative Disclosures About Market Risk.                           
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Item 4.                                                                                                  |                                                                                                               | Controls and Procedures                                                               
|                                                                                                        
|                                                                                                         |                                                                                                               | PART II                                                                               
|                                                                                                         |                                                                                                               | OTHER INFORMATION                                                                     
|                                                                                                        
|Item 1.                                                                                                  |                                                                                                               | Legal Proceedings.                                                                    
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Item 2.                                                                                                  |                                                                                                               | Changes in Securities and Use of  Proceeds.                                           
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Item 3.                                                                                                  |                                                                                                               | Defaults Upon Senior Securities.                                                      
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Item 4.                                                                                                  |                                                                                                               | Submission of Matters to a Vote of Security Holders.                                  
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Item 5.                                                                                                  |                                                                                                               | Other Information.                                                                    
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Item 6.                                                                                                  |                                                                                                               | Exhibits and Reports on Form 8-K.                                                     
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                         |                                                                                                               | (a)  Exhibits                                                                         
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                         |                                                                                                               | (b)  Reports on Form 8-K                                                              

1



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##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1. Financial Statements.

EvergreenBancorp, Inc.




Consolidated statements of condition
September 30, 2002 and December 31, 2001
(in thousands)
(Unaudited)

|                                                                                                                         |                                                      |                                 |         |               |         |              |         |         |         | 
|------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------- | ------------------------------- | ------- | ------------- | ------- | ------------ | ------- | ------- | ------- | 
|                                                                                                                         |                                                      |                                 |         | September 30, |         | December 31,
|                                                                                                                         |                                                      |                                 |         | 2002          |         | 2001        
|                                                                                                                         |                                                      |                                 |         |               |         |             
|ASSETS                                                                                                                   |                                                      |                                 |         |               |         |              |         |        
|Cash and cash equivalents:                                                                                               |                                                      |                                 |         |               |         |              |         |        
|                                                                                                                         | Cash and due from banks                              |                                 | $       | 9,485         |         |              | $       | 9,319   |        
|                                                                                                                         | Interest- bearing deposits in financial institutions |                                 |         | 801           |         |              |         | 1,547   |        
|Federal funds sold                                                                                                       |                                                      |                                 | 13,755  |               |         |              | 6,300   |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|                                                                                                                         |                                                      | Total Cash and cash equivalents |         |               | 24,041  |              |         |         | 17,166  | 
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|Investment securities:                                                                                                   |                                                      |                                 |         |               |         |              |         |        
|                                                                                                                         | Available for sale                                   |                                 |         | 22,357        |         |              |         | 15,214  |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|                                                                                                                         |                                                      | Total investment securities     |         |               | 22,357  |              |         |         | 15,214  | 
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|Loans                                                                                                                    |                                                      |                                 | 122,784 |               |         |              | 122,219 |        
|                                                                                                                         | Less allowance for loan losses                       |                                 |         | (1,679        | )       |              |         | (1,498  | )      
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|                                                                                                                         | Net loans                                            |                                 |         | 121,105       |         |              |         | 120,721 |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|Premises and equipment                                                                                                   |                                                      |                                 | 2,126   |               |         |              | 1,925   |        
|Accrued income and other assets                                                                                          |                                                      |                                 | 1,717   |               |         |              | 1,339   |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|TOTAL ASSETS                                                                                                             |                                                      | $                               | 171,346 |               |         | $            | 156,365 |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|LIABILITIES                                                                                                              |                                                      |                                 |         |               |         |              |         |        
|Deposits:                                                                                                                |                                                      |                                 |         |               |         |              |         |        
|                                                                                                                         | Noninterest bearing                                  |                                 | $       | 36,067        |         |              | $       | 38,233  |        
|                                                                                                                         | Interest bearing                                     |                                 |         | 96,651        |         |              |         | 92,111  |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|                                                                                                                         |                                                      | Total Deposits                  |         |               | 132,718 |              |         |         | 130,344 | 
|                                                                                                                        
|Federal funds purchased and securities sold under
agreements to repurchase                                               |                                                      |                                 | 3,958   |               |         |              | 5,597   |        
|Advances from Federal Home Loan Bank                                                                                     |                                                      |                                 | 12,427  |               |         |              | 4,005   |        
|Guaranteed preferred beneficial interests in subordinated debt                                                           |                                                      |                                 | 5,000   |               |         |              |         |        
|Accrued expenses and other liabilities                                                                                   |                                                      |                                 | 1,658   |               |         |              | 1,681   |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|TOTAL LIABILITIES                                                                                                        |                                                      | $                               | 155,761 |               |         | $            | 141,627 |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|STOCKHOLDERS EQUITY                                                                                                     |                                                      |                                 |         |               |         |              |         |        
|Preferred stock: No par value; 100,000 shares authorized;
issued and outstanding  none                                  |                                                      |                                 | 0       |               |         |              | 0       |        
|Common stock and surplus: No par value;
15,000,000 shares authorized;1,075,461 and 934,817 shares issued
and outstanding |                                                      |                                 | 11,490  |               |         |              | 11,485  |        
|Retained earnings                                                                                                        |                                                      |                                 | 4,016   |               |         |              | 3,198   |        
|Accumulated other comprehensive income(loss)                                                                             |                                                      |                                 | 79      |               |         |              | 55      |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|TOTAL
STOCKHOLDERS EQUITY                                                                                               |                                                      |                                 | 15,585  |               |         |              | 14,738  |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                               |                                                      | $                               | 171,346 |               |         | $            | 156,365 |        
|                                                                                                                         |                                                      |                                 |         |               |         |              |         |        

See accompanying notes to consolidated financial statements

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EvergreenBancorp, Inc.

Consolidated statements of income

Three-month and nine-month periods ended September 30, 2002 and 2001
(in thousands, except per share data)
(unaudited)

|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |     |  |       | 
|------------------------------------------------------------------------------------------- | ------------------ | - | --------------------------------------------------- | --- | -------------------------------- | ----- | ------------------------------- | --- | ---- | ----- | --------- | --- |  | ----- | --------- | --- |  | ----- | 
|                                                                                            |                    |   |                                                     |     | Three months ended September 30, |       | Nine months ended September 30,
|                                                                                            |                    |   |                                                     |     |                                  |       |                                
|                                                                                            |                    |   |                                                     |     | 2002                             |       | 2001                            |     | 2002 |       | 2001     
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |          
|INTEREST AND DIVIDEND INCOME                                                                |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|Loans, including fees                                                                       |                    | $ | 2,506                                               |     |                                  | $     | 2,688                           |     |      | $     | 7,543     |     |  | $     | 8,160     |    
|Federal funds sold and other                                                                |                    |   | 58                                                  |     |                                  |       | 145                             |     |      |       | 167       |     |  |       | 411       |    
|Investment securities:                                                                      |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|                                                                                            | Held to maturity   |   |                                                     | 0   |                                  |       |                                 | 0   |      |       |           | 0   |  |       |           | 66  | 
|                                                                                            | Available for sale |   |                                                     | 239 |                                  |       |                                 | 111 |      |       |           | 533 |  |       |           | 329 | 
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|                                                                                            |                    |   | TOTAL INTEREST AND DIVIDEND INCOME                  |     |                                  | 2,803 |                                 |     |      | 2,944 |           |     |  | 8,243 |           |     |  | 8,966 | 
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|INTEREST EXPENSE                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     | 
|Deposits                                                                                    |                    |   | 492                                                 |     |                                  |       | 888                             |     |      |       | 1,623     |     |  |       | 2,893     |    
|Federal funds purchased and securities
sold under agreements to repurchase                  |                    |   | 13                                                  |     |                                  |       | 45                              |     |      |       | 46        |     |  |       | 213       |    
|Advances from Federal Home Loan Bank                                                        |                    |   | 134                                                 |     |                                  |       | 60                              |     |      |       | 273       |     |  |       | 147       |    
|Interest expense on guaranteed preferred beneficial interests
in subordinated debt          |                    |   | 68                                                  |     |                                  |       | 0                               |     |      |       | 98        |     |  |       | 0         |    
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|                                                                                            |                    |   | TOTAL INTEREST EXPENSE                              |     |                                  | 707   |                                 |     |      | 993   |           |     |  | 2,040 |           |     |  | 3,253 | 
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|                                                                                            |                    |   | NET INTEREST INCOME                                 |     |                                  | 2,096 |                                 |     |      | 1,951 |           |     |  | 6,203 |           |     |  | 5,713 | 
|Provision for loan losses                                                                   |                    |   | 102                                                 |     |                                  |       | 124                             |     |      |       | 290       |     |  |       | 432       |    
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|                                                                                            |                    |   | NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |     |                                  | 1,994 |                                 |     |      | 1,827 |           |     |  | 5,913 |           |     |  | 5,281 | 
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|NONINTEREST INCOME                                                                          |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|Service charges on deposit accounts                                                         |                    |   | 193                                                 |     |                                  |       | 167                             |     |      |       | 529       |     |  |       | 544       |    
|Merchant credit card processing                                                             |                    |   | 245                                                 |     |                                  |       | 353                             |     |      |       | 762       |     |  |       | 964       |    
|Gain on sales of loans and available-for-sale securities                                    |                    |   | 10                                                  |     |                                  |       | 76                              |     |      |       | 10        |     |  |       | 118       |    
|Other noninterest income                                                                    |                    |   | 148                                                 |     |                                  |       | 157                             |     |      |       | 460       |     |  |       | 619       |    
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|                                                                                            |                    |   | TOTAL NONINTEREST INCOME                            |     |                                  | 596   |                                 |     |      | 753   |           |     |  | 1,761 |           |     |  | 2,245 | 
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|NONINTEREST EXPENSE                                                                         |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|Salaries and employee benefits                                                              |                    |   | 977                                                 |     |                                  |       | 997                             |     |      |       | 2,890     |     |  |       | 2,891     |    
|Merchant credit card processing                                                             |                    |   | 209                                                 |     |                                  |       | 307                             |     |      |       | 650       |     |  |       | 820       |    
|Occupancy and equipment                                                                     |                    |   | 301                                                 |     |                                  |       | 299                             |     |      |       | 892       |     |  |       | 784       |    
|Other noninterest expense                                                                   |                    |   | 576                                                 |     |                                  |       | 570                             |     |      |       | 1,768     |     |  |       | 1,663     |    
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|                                                                                            |                    |   | TOTAL NONINTEREST EXPENSE                           |     |                                  | 2,063 |                                 |     |      | 2,173 |           |     |  | 6,200 |           |     |  | 6,158 | 
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|INCOME BEFORE INCOME TAX EXPENSE                                                            |                    |   | 527                                                 |     |                                  |       | 407                             |     |      |       | 1,474     |     |  |       | 1,368     |    
|INCOME TAX EXPENSE                                                                          |                    |   | 177                                                 |     |                                  |       | 128                             |     |      |       | 488       |     |  |       | 429       |    
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|NET INCOME                                                                                  |                    | $ | 350                                                 |     |                                  | $     | 279                             |     |      | $     | 986       |     |  | $     | 939       |    
|                                                                                            |                    |   |                                                     |     |                                  |       |                                 |     |      |       |           |     |  |       |           |    
|Basic earnings per share of common stock*                                                   |                    | $ | 0.32                                                |     |                                  | $     | 0.26                            |     |      | $     | 0.92      |     |  | $     | 0.84      |    
|Weighted average number of common stock shares outstanding-basic*                           |                    |   | 1,075,461                                           |     |                                  |       | 1,074,237                       |     |      |       | 1,075,198 |     |  |       | 1,117,974 |    
|Diluted earnings per share of common stock*                                                 |                    | $ | 0.30                                                |     |                                  | $     | 0.24                            |     |      | $     | 0.86      |     |  | $     | 0.80      |    
|Weighted average number of common stock shares outstanding
and assumed conversions-diluted* |                    |   | 1,154,609                                           |     |                                  |       | 1,145,566                       |     |      |       | 1,147,292 |     |  |       | 1,175,585 |    



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|* |  | Retroactively adjusted for the shares issued pursuant to the 2001 three-for-two stock split and 2002 15% stock dividend
|- |  | -----------------------------------------------------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

3



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##### Table of Contents






EvergreenBancorp, Inc

Consolidated Statements of Stockholders Equity
For the nine-month periods ended September 30, 2002 and 2001
(in thousands, except shares and per share data)
(unaudited)

|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |       |    |       |   | 
|------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------- | --------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- |  | ------------ | ------ | ------------ |  | ------------ | ------ | ------- |  | -------- | ------ | -------- |  | ------------- | ----- | ------------- |  | ---- | ---- | - | --- | ----------- | ------ | ----- | -- | ----- | - | 
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     | Accumulated |        |       |    |      
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     | Other       |        | Total
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  | Common Stock |        | Common stock |  | Common stock |        |         |  |          |        | Retained |  | Comprehensive |       | Stockholders'
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  | Shares       |        | and surplus  |  | Par Value    |        | Surplus |  | Earnings |        | Income   |  | Equity       
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |              
|Balance at January 1, 2001                                                                                                                              |                                         |                                                                                                     | 663,462                                                                                         |                                                                                                      |  |              |        |              |  | $            | 6,634  |         |  | $        | 5,838  |          |  | $             | 2,124 |               |  |      | ($19 | ) |     | $           | 14,577 |      
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      
|Comprehensive income:                                                                                                                                   |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      
|                                                                                                                                                        | Net income                              |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       | 939           |  |      |      |   |     |             |        | 939   |   
|                                                                                                                                                        | Other comprehensive income,
net of tax: |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |       |   
|                                                                                                                                                        |                                         | Change in unrealized gain(loss) on
securities available for sale, net of
deferred income tax of $62 |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   | 122 |             |        |       |    |      
|                                                                                                                                                        |                                         | Reclassification adjustments included
in net income, net of deferred income tax benefit of $(40)    |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   | (76 | )           |        |       | 46 |      
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      
|                                                                                                                                                        | Total comprehensive income              |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             | $      | 985   |   
|Cumulative effect of reclassifying certain
securities from held to maturity to available
for sale as of June 1, 2001, net of deferred income tax of $16 |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      | 31   |   |     |             | 31     |      
|Change in par value of common stock from
$10 to $1                                                                                                      |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              | (5,971 | )       |  |          | 5,971  |          |  |               |       |               |  |      |      |   |     |             |        |      
|Cash dividends paid ($0.145 per share)*                                                                                                                 |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               | (166  | )             |  |      |      |   |     |             | (166   | )    
|Repurchase of common stock                                                                                                                              |                                         |                                                                                                     | (40,700                                                                                         | )                                                                                                    |  |              |        |              |  |              | (40    | )       |  |          | (957   | )        |  |               |       |               |  |      |      |   |     |             | (997   | )    
|Three-for-two stock split                                                                                                                               |                                         |                                                                                                     | 311,355                                                                                         |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      
|Balance at September 30, 2001                                                                                                                           |                                         |                                                                                                     | 934,117                                                                                         |                                                                                                      |  |              | 0      |              |  |              | 623    |         |  |          | 10,852 |          |  | $             | 2,897 |               |  | $    | 58   |   |     | $           | 14,430 |      
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      
|                                                                                                                                                       
|Balance at January 1, 2002                                                                                                                              |                                         |                                                                                                     | 934,817                                                                                         |                                                                                                      |  | $            | 11,485 |              |  | $            | 0      |         |  | $        | 0      |          |  | $             | 3,198 |               |  | $    | 55   |   |     | $           | 14,738 |      
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      
|Comprehensive income:                                                                                                                                   |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      
|                                                                                                                                                        |                                         |                                                                                                     | Net income                                                                                      |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  | 986  |      |   |     |             |        |       |    | 986   |  
|                                                                                                                                                        |                                         |                                                                                                     | Other comprehensive income,
net of tax:                                                         |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |       |    |       |  
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 | Change in unrealized gain (loss) on
securities available for sale, net of
deferred income tax of $15 |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             | 31     |       |    |       |   | 
|                                                                                                                                                        |                                         |                                                                                                     | Reclassification adjustments included in net
income, net of deferred income tax
benefit of $(3) |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     | (7          | )      |       |    | 24    |  
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      
|                                                                                                                                                        |                                         |                                                                                                     | Total comprehensive income                                                                      |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |       |    | 1,010 |  
|                                                                                                                                                        |                                         |                                                                                                     | Exercise of stock options                                                                       |                                                                                                      |  | 600          |        |              |  | 9            |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |       |    | 9     |  
|                                                                                                                                                        |                                         |                                                                                                     | Cash dividend paid ($0.157 per share)                                                           |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  | (168 | )    |   |     |             |        |       |    | (168  | )
|                                                                                                                                                        |                                         |                                                                                                     | Stock dividend (15 percent)                                                                     |                                                                                                      |  | 140,044      |        |              |  | (4           | )      |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |       |    | (4    | )
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      
|Balance at September 30, 2002                                                                                                                           |                                         |                                                                                                     | 1,075,461                                                                                       |                                                                                                      |  |              | 11,490 |              |  |              | 0      |         |  |          | 0      |          |  |               | 4,016 |               |  |      | 79   |   |     |             | 15,585 |      
|                                                                                                                                                        |                                         |                                                                                                     |                                                                                                 |                                                                                                      |  |              |        |              |  |              |        |         |  |          |        |          |  |               |       |               |  |      |      |   |     |             |        |      



---

|* |  | Retroactively adjusted for the shares issued pursuant to
the 2001 three-for-two split and 2002 15% stock dividend.
|- |  | ------------------------------------------------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

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##### Table of Contents






EvergreenBancorp, Inc.

Consolidated statements of cash flows
Nine-month periods ended September 30, 2002 and 2001
(in thousands)
(unaudited)

|                                                                                                      |                                                                              |   |                                 |        |      |   |         |        |  
|----------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | - | ------------------------------- | ------ | ---- | - | ------- | ------ | -
|                                                                                                      |                                                                              |   | Nine Months ended September 30,
|                                                                                                      |                                                                              |   |                                
|                                                                                                      |                                                                              |   | 2002                            |        | 2001
|                                                                                                      |                                                                              |   |                                 |        |     
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                 |                                                                              |   |                                 |        |      |   |         |       
|Net Income                                                                                            |                                                                              | $ | 986                             |        |      | $ | 939     |       
|Adjustments to reconcile net income to net cash provided (used) by operating
activities:              |                                                                              |   |                                 |        |      |   |         |       
|                                                                                                      | Depreciation and amortization                                                |   |                                 | 359    |      |   |         | 262    |  
|                                                                                                      | Provision for loan losses                                                    |   |                                 | 290    |      |   |         | 432    |  
|                                                                                                      | Net amortization of premium (accretion of discount)
on investment securities |   |                                 | 32     |      |   |         | 17     |  
|                                                                                                      | (Gain)/loss from sale of available-for-sale securities                       |   |                                 | (10    | )    |   |         | (118   | )
|                                                                                                      | Loss on disposal of premises and equipment                                   |   |                                 | 44     |      |   |         |        |  
|                                                                                                      | Federal Home Loan Bank stock dividend                                        |   |                                 | (55    | )    |   |         | (59    | )
|                                                                                                      | Other changes, net                                                           |   |                                 | (412   | )    |   |         | (103   | )
|                                                                                                      |                                                                              |   |                                 |        |      |   |         |       
|                                                                                                      | Net
Cash provided(used) by operating activities                              |   |                                 | 1,234  |      |   |         | 1,370  |  
|                                                                                                      |                                                                              |   |                                 |        |      |   |         |       
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                                 |                                                                              |   |                                 |        |      |   |         |       
|Proceeds from maturities of held-to-maturity securities                                               |                                                                              |   | 0                               |        |      |   | 30      |       
|Proceeds from sales and maturities of available-for-sale securities                                   |                                                                              |   | 6,419                           |        |      |   | 12,079  |       
|Purchases of available-for-sale securities                                                            |                                                                              |   | (13,495                         | )      |      |   | (12,046 | )     
|Net (increase) decrease in loans                                                                      |                                                                              |   | (674                            | )      |      |   | (4,983  | )     
|Purchases of premises and equipment                                                                   |                                                                              |   | (603                            | )      |      |   | (1,150  | )     
|                                                                                                      |                                                                              |   |                                 |        |      |   |         |       
|                                                                                                      | Net Cash provided (used) by investing activities                             |   |                                 | (8,353 | )    |   |         | (6,070 | )
|                                                                                                      |                                                                              |   |                                 |        |      |   |         |       
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                 |                                                                              |   |                                 |        |      |   |         |       
|Net increase (decrease) in noninterest bearing deposits                                               |                                                                              |   | (2,166                          | )      |      |   | (8,780  | )     
|Net increase (decrease) in interest bearing deposits                                                  |                                                                              |   | 4,540                           |        |      |   | 7,987   |       
|Net increase (decrease) in federal funds purchased and securities
sold under agreements to repurchase |                                                                              |   | (1,639                          | )      |      |   | (318    | )     
|Advances from Federal Home Loan Bank                                                                  |                                                                              |   | 8,700                           |        |      |   | 2,005   |       
|Repayment of advances from Federal Home Loan Bank                                                     |                                                                              |   | (278                            | )      |      |   |         |       
|Proceeds from issuance of guaranteed preferred beneficial
interests in subordinated debt              |                                                                              |   | 5,000                           |        |      |   |         |       
|Repurchase of common stock from dissenting shareholders                                               |                                                                              |   |                                 |        |      |   | (997    | )     
|Exercise of stock options                                                                             |                                                                              |   | 9                               |        |      |   |         |       
|Dividends paid                                                                                        |                                                                              |   | (168                            | )      |      |   | (166    | )     
|Cash
paid in lieu of fractional shares                                                                |                                                                              |   | (4                              | )      |      |   |         |       
|                                                                                                      |                                                                              |   |                                 |        |      |   |         |       
|                                                                                                      | Net cash provided (used) by financing activities                             |   |                                 | 13,994 |      |   |         | (269   | )
|                                                                                                      |                                                                              |   |                                 |        |      |   |         |       
|Net increase (decrease) in cash and cash equivalents                                                  |                                                                              |   | 6,875                           |        |      |   | (4,969  | )     
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                      |                                                                              |   | 17,166                          |        |      |   | 22,415  |       
|                                                                                                      |                                                                              |   |                                 |        |      |   |         |       
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                            |                                                                              | $ | 24,041                          |        |      | $ | 17,446  |       
|                                                                                                      |                                                                              |   |                                 |        |      |   |         |       
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                                     |                                                                              |   |                                 |        |      |   |         |       
|Interest Paid                                                                                         |                                                                              | $ | 2,168                           |        |      | $ | $3,152  |       
|Income Taxes Paid                                                                                     |                                                                              |   | 515                             |        |      | $ | 592     |       
|Total change in unrealized gains (losses)
on available-for-sale securities                            |                                                                              |   | 46                              |        |      |   | 184     |       

See accompanying notes to consolidated financial statements.

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##### Table of Contents






NOTES TO CONSOLIDATED INTERIM FINANCIAL INFORMATION

EVERGREENBANCORP, INC.
Quarterly period ended September 30, 2002
(UNAUDITED)

---

Basis of presentation:The accompanying unaudited condensed consolidated
financial statements include the accounts of EvergreenBancorp, Inc.
(Bancorp) and its wholly owned subsidiaries (collectively referred to
as the Company). As of September 30, 2002, Bancorps subsidiaries were
EvergreenBank (the Bank) and EvergreenBancorp Capital Trust I (the
Trust). The financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America
for interim financial information. Accordingly, they do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the three and nine month periods ended September
30, 2002 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2002. For additional
information, refer to the financial statements and footnotes for the year
ended December 31, 2001, filed by Bancorp with the United States
Securities and Exchange Commission.

Organization:Bancorp was formed February 9, 2001 and is a Washington
corporation chartered as a bank holding company. Bancorp owns all of the
issued and outstanding shares of the Bank and all of the common
securities issued by the Trust.

The Bank is a Washington state chartered financial institution that
engages in general commercial and consumer banking operations. The Bank
offers a broad spectrum of personal and business banking services,
including commercial, consumer and real estate lending. The Banks
offices are centered in the Puget Sound region in the Seattle, Lynnwood
and Bellevue communities. Deposits in the Bank are insured by the Federal
Deposit Insurance Corporation.

The Trust is a Delaware business trust organized pursuant to a
Declaration of Trust dated as of May 22, 2002. An Amended and Restated
Declaration of Trust was executed May 23, 2002.

Holding company formation:The Bank became a wholly owned subsidiary
of Bancorp on June 20, 2001 in accordance with the Plan and Agreement of
Reorganization and Merger dated February 14, 2001 (the Plan), and
provided that each share of the Banks common stock be exchanged for an
equal number of shares of the common stock of Bancorp. The Plan also
provided that the reorganization be treated similarly to a pooling of
interest for accounting and financial reporting purposes. Accordingly,
the capital accounts of the Bank as of June 20, 2001 were carried
forward, without change, as the capital accounts of Bancorp.

Accounting:The accounting and reporting policies of the Company conform
to accounting principles generally accepted in the United States of
America. The following is a description of the more significant of these
policies.

6



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##### Table of Contents



NOTES TO CONSOLIDATED INTERIM FINANCIAL INFORMATION  CONTINUED

EVERGREENBANCORP, INC.

Quarterly period ended September 30, 2002
(UNAUDITED)

Principles of consolidation and use of estimates:The accompanying
condensed consolidated financial statements include the combined accounts
of Bancorp, the Bank, and the Trust for all periods reported. All
significant intercompany balances and transactions have been eliminated.

The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of
America and with the general practices in the banking industry. The
preparation of financial statements in conformity with these principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, including contingent amounts,
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates. Material estimates particularly susceptible
to possible changes in the near term relate to the determination of the
allowance for losses on loans, the carrying values of securities, and
deferred tax assets. An estimate of possible changes or range of
possible changes cannot be made relative to these items.

Reclassifications:Certain items in prior periods financial statements
have been reclassified to conform with the current periods presentation.
These reclassifications did not change previously reported stockholders
equity or net income.

Investments:Investments include $12,502,000 in mortgage backed
securities at September 30, 2002. This investment by the Bank in
mortgage backed securities qualifies as collateral for advances from
Federal Home Loan Bank.

Guaranteed preferred beneficial interests in
subordinated debt (trust preferred securities):On May
23, 2002, Bancorp purchased 155 Floating Rate Common Securities
(liquidation amount $1,000 per common security) (the Common Security)
issued by the Trust. Also, on May 23, 2002, the Trust issued 5,000
Floating Rate Capital Securities (liquidation amount $1,000 per capital
security) (the Capital Securities). The capital securities were sold
in a private placement pursuant to exemption from registration under of
the Securities Act of 1933. The proceeds of the issuance of the common
and capital securities, net of issuing expenses, were used by the Trust
to purchase $5,155,000 in principal amount of Floating Rate Junior
Subordinated Deferrable Interest Debentures (the Debentures) issued by
Bancorp. Bancorp invested $4,800,000 of the proceeds in the Bank.
Distributions on the common and capital securities issued by the Trust
are payable quarterly at a variable interest rate, reset quarterly, equal
to the three-month London interbank offered rate plus 3.5 percent. The
Company recognizes the distributions payable on the capital securities
and the debentures as interest expense for financial reporting purposes.
The debentures mature in 2032 and are redeemable at Bancorps option
beginning in 2007. Issuing expenses are being amortized over the thirty
year period. The capital securities are guaranteed on a subordinated
basis by Bancorp with respect to distributions and amounts payable upon
liquidation, redemption, or repayment. The capital securities qualify as
Tier I capital for regulatory purposes.

7



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##### Table of Contents



NOTES TO CONSOLIDATED INTERIM FINANCIAL INFORMATION  CONTINUED

EVERGREENBANCORP, INC.

Quarterly period ended September 30, 2002
(UNAUDITED)

Parent company only financial information:The following table illustrates the
condensed balance sheet at September 30, 2002 and December 31, 2001, and the
related condensed statements of income for each of the three-month and
nine-month periods ended September 30, 2002 and 2001, and the condensed
statements of cash flows for the nine-month periods ended September 30, 2002
and 2001 for EvergreenBancorp, Inc., without including the accounts of its
subsidiaries, the Bank and the Trust.

Condensed balance sheets (in thousands):

|                                           |                                                                |                                          |        |               |        |              |        |        |        | 
|------------------------------------------ | -------------------------------------------------------------- | ---------------------------------------- | ------ | ------------- | ------ | ------------ | ------ | ------ | ------ | 
|                                           |                                                                |                                          |        | SEPTEMBER 30, |        | DECEMBER 31,
|                                           |                                                                |                                          |        | 2002          |        | 2001        
|                                           |                                                                |                                          |        |               |        |             
|Assets:                                    |                                                                |                                          |        |               |        |              |        |       
|                                           | Due from EvergreenBank                                         |                                          | $      | 133           |        |              | $      | 83     |       
|                                           | Dividend receivable from EvergreenBank                         |                                          |        | 120           |        |              |        |        |       
|                                           | Investment in EvergreenBank                                    |                                          |        | 20,091        |        |              |        | 14,655 |       
|                                           | Investment in EvergreenBancorp Capital Trust I                 |                                          |        | 155           |        |              |        |        |       
|                                           | Accrued interest and other assets                              |                                          |        | 241           |        |              |        |        |       
|                                           |                                                                |                                          |        |               |        |              |        |       
|Total assets                               |                                                                | $                                        | 20,740 |               |        | $            | 14,738 |       
|                                           |                                                                |                                          |        |               |        |              |        |       
|Liabilities and stockholders equity:      |                                                                |                                          |        |               |        |              |        |       
|                                           | Guaranteed preferred beneficial interests in subordinated debt |                                          | $      | 5,155         |        |              |        |        |       
|                                           | Stockholders equity:                                          |                                          |        |               |        |              |        |        |       
|                                           |                                                                | Preferred stock
Common stock and surplus |        |               | 11,490 |              |        | $      | 11,485 | 
|                                           |                                                                | Retained earnings                        |        |               | 4,016  |              |        |        | 3,198  | 
|                                           |                                                                | Accumulated other comprehensive income   |        |               | 79     |              |        |        | 55     | 
|                                           |                                                                |                                          |        |               |        |              |        |       
|Total liabilities and stockholders equity |                                                                | $                                        | 20,740 |               |        | $            | 14,738 |       
|                                           |                                                                |                                          |        |               |        |              |        |       

Condensed statements of income(in thousands):

|                                                             |                                                                                    |   |                     |     |                     |   |      |    |      |   |     |      |   |   |     |    | 
|------------------------------------------------------------ | ---------------------------------------------------------------------------------- | - | ------------------- | --- | ------------------- | - | ---- | -- | ---- | - | --- | ---- | - | - | --- | -- | 
|                                                             |                                                                                    |   | THREE MONTHS        |     | NINE MONTHS        
|                                                             |                                                                                    |   | ENDED SEPTEMBER 30, |     | ENDED
SEPTEMBER 30,
|                                                             |                                                                                    |   |                     |     |                    
|                                                             |                                                                                    |   | 2002                |     | 2001                |   | 2002 |    | 2001
|                                                             |                                                                                    |   |                     |     |                     |   |      |    |     
|Income:                                                      |                                                                                    |   |                     |     |                     |   |      |    |      |   |     |      |   |   |     |   
|                                                             | Dividend from EvergreenBank                                                        |   | $                   | 120 |                     |   | $    | 75 |      |   | $   | 443  |   |   | $   | 75 | 
|                                                             | Interest income from investment in EvergreenBancorp
Capital Trust I                |   |                     | 3   |                     |   |      |    |      |   |     | 3    |   |   |     |    | 
|Expenses:                                                    |                                                                                    |   |                     |     |                     |   |      |    |      |   |     |      |   |   |     |   
|                                                             | Interest expense on guaranteed preferred beneficial interests
in subordinated debt |   |                     | (71 | )                   |   |      |    |      |   |     | (101 | ) |   |     |    | 
|                                                             | Other noninterest expenses                                                         |   |                     | (3  | )                   |   |      |    |      |   |     | (5   | ) |   |     |    | 
|                                                             |                                                                                    |   |                     |     |                     |   |      |    |      |   |     |      |   |   |     |   
|Income before equity in undistributed income of subsidiaries |                                                                                    |   | 49                  |     |                     |   | 75   |    |      |   | 340 |      |   |   | 75  |   
|Equity in undistributed income of subsidiaries               |                                                                                    |   | 272                 |     |                     |   | 248  |    |      |   | 612 |      |   |   | 248 |   
|                                                             |                                                                                    |   |                     |     |                     |   |      |    |      |   |     |      |   |   |     |   
|Income before income tax benefit                             |                                                                                    |   | 321                 |     |                     |   | 323  |    |      |   | 952 |      |   |   | 323 |   
|Income tax benefit                                           |                                                                                    |   | 29                  |     |                     |   |      |    |      |   | 34  |      |   |   |     |   
|                                                             |                                                                                    |   |                     |     |                     |   |      |    |      |   |     |      |   |   |     |   
|Net income                                                   |                                                                                    | $ | 350                 |     |                     | $ | 323  |    |      | $ | 986 |      |   | $ | 323 |   
|                                                             |                                                                                    |   |                     |     |                     |   |      |    |      |   |     |      |   |   |     |    | 

8



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##### Table of Contents



NOTES TO CONSOLIDATED INTERIM FINANCIAL INFORMATION  CONTINUED

EVERGREENBANCORP, INC.

Quarterly period ended September 30, 2002
(UNAUDITED)

Condensed statements of cash flows(in thousands):

|                                                          |                                                                                          |                                                |        |                   |      |      |    |     |      |  
|--------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ---------------------------------------------- | ------ | ----------------- | ---- | ---- | -- | --- | ---- | -
|                                                          |                                                                                          |                                                |        | NINE MONTHS ENDED
|                                                          |                                                                                          |                                                |        | SEPTEMBER 30,    
|                                                          |                                                                                          |                                                |        |                  
|                                                          |                                                                                          |                                                |        | 2002              |      | 2001
|                                                          |                                                                                          |                                                |        |                   |      |     
|Cash flows from operating activities:                     |                                                                                          |                                                |        |                   |      |      |    |    
|                                                          | Net income                                                                               |                                                | $      | 986               |      |      | $  | 323 |     
|                                                          | Adjustments to reconcile net income to net cash
provided by operating activities:        |                                                |        |                   |      |      |    |     |     
|                                                          |                                                                                          | Equity in undistributed income of subsidiaries |        |                   | (612 | )    |    |     | (248 | )
|                                                          |                                                                                          | Dividend receivable from EvergreenBank         |        |                   | (120 | )    |    |     |      |  
|                                                          |                                                                                          | Increase in accrued interest and other assets  |        |                   | (241 | )    |    |     |      |  
|                                                          |                                                                                          |                                                |        |                   |      |      |    |    
|Net cash provided by operating activities                 |                                                                                          |                                                | 13     |                   |      |      | 75 |    
|                                                          |                                                                                          |                                                |        |                   |      |      |    |    
|Cash flows from investing activities:                     |                                                                                          |                                                |        |                   |      |      |    |    
|                                                          | Investment in EvergreenBank                                                              |                                                |        | (4,800            | )    |      |    |     |     
|                                                          | Investment in EvergreenBancorp Capital Trust I                                           |                                                |        | (155              | )    |      |    |     |     
|                                                          |                                                                                          |                                                |        |                   |      |      |    |    
|Net cash provided (used) by investing activities          |                                                                                          |                                                | (4,955 | )                 |      |      |    |    
|                                                          |                                                                                          |                                                |        |                   |      |      |    |    
|Cash flows from financing activities:                     |                                                                                          |                                                |        |                   |      |      |    |    
|                                                          | Proceeds from issuance of guaranteed preferred
beneficial interests in subordinated debt |                                                |        | 5,155             |      |      |    |     |     
|                                                          | Exercise of stock option                                                                 |                                                |        | 9                 |      |      |    |     |     
|                                                          | Dividends paid                                                                           |                                                |        | (168              | )    |      |    |     |     
|                                                          | Cash paid in lieu of fractional share                                                    |                                                |        | (4                | )    |      |    |     |     
|                                                          |                                                                                          |                                                |        |                   |      |      |    |    
|Net cash provided (used) by financing activities          |                                                                                          |                                                | 4,992  |                   |      |      |    |    
|                                                          |                                                                                          |                                                |        |                   |      |      |    |    
|Net increase in cash                                      |                                                                                          |                                                | 50     |                   |      |      |    |    
|                                                         
|Cash on deposit with EvergreenBank at beginning of period |                                                                                          |                                                | 83     |                   |      |      | 0  |    
|                                                          |                                                                                          |                                                |        |                   |      |      |    |    
|Cash on deposit with EvergreenBank at end of period       |                                                                                          | $                                              | 133    |                   |      | $    | 75 |    
|                                                          |                                                                                          |                                                |        |                   |      |      |    |    

9



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|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

EvergreenBancorp, Inc. (Bancorp) is a Washington chartered bank holding
company formed in 2001 and headquartered in Seattle, Washington. Bancorp has
as its primary business activity ownership of EvergreenBank (the Bank) and a
financing entity, EvergreenBancorp Capital Trust I (Trust). The Banks
principal business is personal and business banking. Services offered include
commercial, real estate and consumer lending; savings, checking and certificate
of deposit accounts; financial planning and investment services, and merchant
credit card processing services. The Bank conducts business from three
locations: the main office northeast of downtown Seattle, the Lynnwood office
north of Seattle, and a new branch which opened in July 2001 in the city of
Bellevue.

The following discussion contains a review of the consolidated operating
results and financial condition of Bancorp and its wholly-owned subsidiaries
(collectively referred to as the Company) for the third quarter of 2002.
This discussion should be read in conjunction with the unaudited consolidated
financial statements and accompanying notes contained elsewhere in this report.
When warranted, comparisons are made to the same period in 2001 and to the
previous year ended December 31, 2001. For additional information, refer to the
consolidated financial statements and footnotes of EvergreenBancorp, Inc. for
the year ended December 31, 2001.

RESULTS OF OPERATIONS

Net Income

Three months ended September 30, 2002 and
2001

For the third quarter of 2002, the Company reported net income of $350,000
compared to $279,000 for the third quarter of 2001, an increase of 25.5
percent. The increase in third quarter earnings was primarily due to
growth in net interest income. Earnings for the third quarter last
year included nonrecurring items which included additional expenses
associated with opening the Bellevue office in July 2001,
largely offset by recorded gains on sales of investments. Basic earnings per common share were $0.32 for the third quarter of
2002 compared to $0.26 for the third quarter of 2001. On a fully diluted basis
earnings per share were $0.30 for the third quarter of 2002 compared to $0.24
for the third quarter of 2001.

Return on average common equity and return on average assets for the third
quarter of 2002 was 9.04 percent and 0.81 percent respectively, compared to
7.22 percent and 0.73 percent for the third quarter of 2001.

Nine months ended September 2002 and 2001

For the nine months of 2002 net income was $986,000, compared with $939,000 for
the first nine months of 2001, an increase of 5.01 percent. Basic earnings per
common share were $0.92 for the first nine months of 2002 and $0.84 for the
same period of 2001.

10



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On a fully diluted basis
earnings per share were $0.86 for the first nine months of 2002 and $0.80 for
the same period of 2001. The results from the first quarter of 2001 included
two nonrecurring items which impacted the results: additional revenue of
$143,000 resulting from the repurchase of the Banks share in an ATM electronic
services provider, offset by expenses of $50,000 associated with the formation
of EvergreenBancorp, Inc. The results from the third quarter of 2001 included
nonrecurring items which included $76,000 of gains on sales of investments
occurring through completion of the Banks balance sheet restructure as well as
additional expenses associated with opening the new Bellevue office in July
2001.

Return on average assets was 0.81 percent for the first nine months of 2002 and
0.84 percent for the same period of 2001. Return on average common equity was
8.72 percent for the first nine months of 2002 and 8.53 percent for the same
period of 2001.

Net Interest Income and Net interest Margin

The Companys principal source of earnings is net interest income, which is the
difference between interest income on loans and investments and interest
expense on deposits and borrowed funds.

Net interest income was $2,096,000 for the third quarter of 2002, compared to
$1,951,000 for the same quarter a year ago, an increase of 7.43 percent. The
increase in third quarter net interest income was primarily due to growth in
loans and investments funded by growth in deposits and borrowings.

Net interest income was $6,203,000 for the first nine months of 2002, compared
with $5,713,000 for the first nine months of 2001, an increase of 8.58 percent.

The net interest margin, the ratio of taxable-equivalent net interest income to average earning
assets, was 5.35% for the third quarter of 2002 compared to 5.36% for the same quarter one year ago.
The weighted average yield on interest earning assets was 7.15% for the third quarter of 2002, a decrease
of 0.94%, compared to 8.09% in 2001. The interest expense as a percentage of average earning assets was
1.80% for the third quarter of 2002, a decrease of 0.93% compared to 2.73% in 2001.

For the first nine months of 2002, the net interest margin, was 5.46% compared to 5.48% for the
same period one year ago. The weighted average yield on interest earning assets was 7.25% for the nine months
of 2002, a decrease of 1.32%, compared to 8.57% in 2001. The interest expense as a percentage of average
earning assets was 1.79% for the nine months of 2002, a decrease of 1.30% compared to 3.09% in 2001.

Interest income for the three months ended
September 30, 2002 was $2,803,000
compared to $2,944,000 for the three months ended September 30, 2001, a
decrease of $141,000 or 4.79 percent. This decrease was largely the result of
falling interest rates offset by growth in loan volume. Average loans
outstanding for the three months ended September 30, 2002 were $4,943,000
higher than for the three

11



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##### Table of Contents



months ended September 30, 2001. Interest income for
the
nine months ended September 30, 2002 was $8,243,000 compared with $8,966,000
for the nine months ended September 30, 2001, a decrease of 8.06 percent.

Interest expense for the three months ended
September 30, 2002 was $707,000
compared to $993,000 for the three months ended September 30, 2001, a decrease
of $286,000 or 28.80 percent. Interest expense for the nine months ended
September 30, 2002 was $2,040,000 compared with $3,253,000 for the same period
a year ago, a decrease of $1,213,000 or 37.29 percent. The decrease for both
the third quarter and the year to date has been due primarily to falling
interest rates and a higher percentage mix of lower cost deposits.

Noninterest Income/Expense

Noninterest income in the third quarter of 2002 was
$596,000 compared to
$753,000 in the same quarter of 2001, a reduction of $157,000 or 20.85 percent.
Noninterest income for the nine months ended September 30, 2002
was $1,761,000
compared with $2,245,000 for the same period of 2001, a decrease of
$484,000 or
21.60 percent. The decrease was primarily due to lower revenue from merchant
processing fees, and less recorded gains on sales of available-for-sale
securities. Nonrecurring items from the first quarter of 2001 included
additional revenue of $143,000 resulting from the repurchase of the Banks
share in a company that provides ATM electronic services.

Noninterest expense was $2,063,000 in the third quarter of 2002, compared to
$2,173,000 in the same quarter of 2001, a reduction of $110,000 or 5.06
percent. Contributing to the decline in noninterest expense was lower salaries
and benefits as the Company reduced staffing levels to 53 full time equivalent
employees in the third quarter of 2002 from 60 full time equivalent employees
one year ago. Lower merchant processing expense resulting from reduced credit
card processing activity also affected 2002 results. Noninterest expense for
the third quarter of 2001 included certain nonrecurring costs associated with
opening the Bellevue office in July 2001. Noninterest expense was $6,200,000
for the nine months of 2002, compared with $6,158,000 for the same period of
2001, an increase of $42,000 or 0.68 percent. The year to date comparisons
were affected by the same items described above.

Allowance for Loan Losses

The allowance for loan losses is maintained at a level considered adequate by
management to absorb estimated losses over the life of the portfolio.

Management periodically evaluates the adequacy of the allowance based upon a
number of factors, including the volume and composition of the loan portfolio,
potential impairment of individual loans and concentrations of credit,
estimated value of underlying collateral, past loss experience, current
economic conditions, loan commitments outstanding and other factors.

12



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The following table sets forth the changes in the Companys allowance for loan
losses at the dates indicated.

|                                     |  |                                 |           |      |  |   |           |  
|------------------------------------ |  | ------------------------------- | --------- | ---- |  | - | --------- | -
|                                     |  | Three months ended September 30
|                                     |  |                                
|                                     |  | 2002                            |           | 2001
|                                     |  |                                 |           |     
|Balance at beginning of period       |  | $                               | 1,698,000 |      |  | $ | 1,487,000 |  
|Provision for possible credit losses |  |                                 | 102,000   |      |  |   | 124,000   |  
|Charge-offs                          |  |                                 | (127,000  | )    |  |   | (155,000  | )
|Recoveries                           |  |                                 | 6,000     |      |  |   | 8,000     |  
|Net Recoveries (Charge-offs)         |  |                                 | (121,000  | )    |  |   | (147,000  | )
|                                     |  |                                 |           |      |  |   |           |  
|Balance at end of period             |  | $                               | 1,679,000 |      |  | $ | 1,464,000 |  
|                                     |  |                                 |           |      |  |   |           |  

|                                     |  |                                |           |      |  |   |           |  
|------------------------------------ |  | ------------------------------ | --------- | ---- |  | - | --------- | -
|                                     |  | Nine months ended September 30
|                                     |  |                               
|                                     |  | 2002                           |           | 2001
|                                     |  |                                |           |     
|Balance at beginning of period       |  | $                              | 1,498,000 |      |  | $ | 1,323,000 |  
|Provision for possible credit losses |  |                                | 290,000   |      |  |   | 432,000   |  
|Charge-offs                          |  |                                | (150,000  | )    |  |   | (301,000  | )
|Recoveries                           |  |                                | 41,000    |      |  |   | 10,000    |  
|Net Recoveries (Charge-offs)         |  |                                | (109,000  | )    |  |   | (291,000  | )
|                                     |  |                                |           |      |  |   |           |  
|Balance at end of period             |  | $                              | 1,679,000 |      |  | $ | 1,464,000 |  
|                                     |  |                                |           |      |  |   |           |  

At September 30, 2002, the allowance for loan losses stood at $1,679,000
compared to $1,498,000 at December 31, 2001, and $1,464,000 at September 30,
2001. The ratio of the allowance to total loans outstanding was 1.37 percent,
1.23 percent and 1.24 percent respectively at September 30, 2002, December 31,
2001, and September 30, 2001.

Along with other financial institutions, management shares a concern for the
outlook of the economy during the remainder of 2002. A slowdown in economic
activity beginning in 2001 severely impacted several major industries as well
as the economy as a whole. Despite indications of emerging strength, it is not
certain that this strength is sustainable. These events could still adversely
affect cash flows for both commercial and individual borrowers, as a result of
which, the Company could experience increases in problem assets, delinquencies
and losses on loans.

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##### Table of Contents



Non-performing Assets and Foreclosed Real Estate

Non-performing assets totaled $1,177,000 at September 30, 2002. This
represented 0.96 percent of total loans and foreclosed real estate compared to
$1,155,000 or 0.95 percent at December 31, 2001, and $1,168,000 or 0.99 percent
at September 30, 2001. The larger proportion of non-accrual loans
reflects two delinquent loans totaling $550,000 classified as
non-accrual.

|                                        |  |               |       |                   |  |      |       |               |  |  |       | 
|--------------------------------------- |  | ------------- | ----- | ----------------- |  | ---- | ----- | ------------- |  |  | ----- | 
|Analysis of Non-Performing              |  | September 30, |       |                   |  |      |       | September 30,
|Assets (in thousands)                   |  | 2002          |       | December 31, 2001 |  | 2001
|                                        |  |               |       |                   |  |     
|Accruing Loans past due 90
days or more |  |               | 166   |                   |  |      | 602   |               |  |  | 964   | 
|Non-accrual loans                       |  |               | 1,011 |                   |  |      | 553   |               |  |  | 204   | 
|Foreclosed real estate                  |  |               | 0     |                   |  |      | 0     |               |  |  | 0     | 
|                                        |  |               |       |                   |  |      |       |               |  |  |       | 
|Total                                   |  |               | 1,177 |                   |  |      | 1,155 |               |  |  | 1,168 | 

Income Taxes

Accrued income taxes applicable to income for the three-month period ended
September 30, 2002 were $177,000 compared to $128,000 for the same period in
2001. Pretax income for the three months ended September 30, 2002 totaling
$527,000 was up $119,000 from $408,000 for the three months ended September 30,
2001. The effective tax rates for these periods were
33.59 percent and 31.45
percent respectively.

FINANCIAL CONDITION

Loans and Investments

At September 30, 2002, loans totaled $122,784,000, an increase of $565,000 or
0.46 percent over December 31, 2001 and an increase of $5,029,000 or 4.27
percent over the level reported at September 30, 2001. At September 30, 2002,
the Bank had $92,739,000 in loans secured by real estate. The collectibility of
a substantial portion of the loan portfolio is susceptible to changes in
economic and market conditions in the region. The Bank generally requires
collateral on all real estate exposures and typically maintains loan-to-value
ratios of no greater than 80 percent.

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Types of Loans

The major classifications of loans net of unearned income in the Banks
portfolio at
September 30, 2002 and December 31, 2001 were:

|                   |                        |   |                |        |      |   |         |        | 
|------------------ | ---------------------- | - | -------------- | ------ | ---- | - | ------- | ------ | 
|                   |                        |   | 2002           |        | 2001
|                   |                        |   |                |        |     
|                   |                        |   | (in thousands)
|Commercial         |                        | $ | 50,763         |        |      | $ | 53,791  |       
|Real Estate:       |                        |   |                |        |      |   |         |       
|                   | Commercial             |   |                | 39,872 |      |   |         | 28,349 | 
|                   | Construction           |   |                | 5,659  |      |   |         | 7,002  | 
|                   | Residential 1-4 family |   |                | 11,094 |      |   |         | 13,942 | 
|Consumer and other |                        |   | 15,396         |        |      |   | 19,135  |       
|                   |                        |   |                |        |      |   |         |       
|Total              |                        | $ | 122,784        |        |      | $ | 122,219 |       
|                   |                        |   |                |        |      |   |         |       

At September 30, 2002, investments totaled $22,357,000, an increase of
$7,143,000 or 46.95 percent over $15,214,000 at December 31, 2001 and an
increase of $7,097,000 or 46.50 percent over $15,260,000 at September 30, 2001.
The investment increase was mostly due to the purchase of mortgage backed
securities. In the third quarter of 2002, the Company added $5,086,000 of
mortgage-backed securities to the investment portfolio to improve portfolio
earnings and bolster liquidity.

Deposits

At September 30, 2002, total deposits were
$132,718,000, compared to
$130,344,000 at December 31, 2001 and $124,631,000 at September 30, 2001. This
represents a 1.82 percent increase from December 31, 2001
and a 6.49 percent
increase from September 30, 2001. Non-interest bearing deposits totaled
$36,067,000 at September 30, 2002 compared to $38,233,000 at December 31, 2001
and $29,145,000 at September 30, 2001. Interest bearing deposits totaled
$96,651,000, an increase of $1,165,000 or 1.2 percent from September 30, 2001
and an increase of $4,540,000 or 4.93 percent from the level reported at
December 31, 2001.

Borrowings

At September 30, 2002, Federal Home Loan Bank borrowings were $12,427,000,
compared to $4,005,000 at December 31, 2001 and $4,005,000 at September 30,
2001. This represents a 210.29 percent increase from December 31, 2001 and
September 30, 2001. The increase in borrowings provided the primary source of
funding for the additional purchases of mortgage backed securities. In the
third quarter of 2002, the Company increased Federal Home Loan Bank borrowings
by $1,850,000 and invested most of the proceeds in investment securities.

15



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##### Table of Contents



During the second quarter of 2002, the Trust issued 30 year Floating Rate
Capital Securities to a third party investor for an aggregate of $5 million in
a private placement exempt from registration under the Securities Act of 1933.
The proceeds of this issuance were utilized by the Trust to purchase debentures
in Bancorp having terms similar to the capital securities. Distributions on the capital securities and interest on the debentures are
payable quarterly at a variable interest rate equal to the three month London
Interbank offered rate plus 3.5%. Issue costs with respect to this transaction
totaled approximately $200,000 and are being amortized over a 30 year period.
The full amount of the capital securities is anticipated to constitute Tier 1
capital for regulatory capital purposes. Bancorp invested most of the proceeds
from this transaction in the Bank to support additional growth in loans and
investments. Additional information can be found in the Notes to Consolidated
Interim Financial Information in Part I, Item 1.

Stockholders Equity and Capital Resources

Stockholders equity totaled $15,585,000 at September 30, 2002, an increase of
$847,000 or 5.75 percent over December 31, 2001 and an increase of $1,155,000
or 8.00 percent over September 30, 2001. The increase in capital over last
year is principally due to retained earnings substantially offset by cash
dividends and by the repurchase of common stock held by shareholders dissenting
to the holding company formation in June 2001.

Cash dividends paid year-to-date at September 30, 2002 totaled $168,000 (15.7
cents per share) and for the year ended December 31, 2001 and the nine months
ended September 30, 2001 totaled $166,000 (14.5 cents per share). Book value
per share was $14.49 at September 30, 2002 compared to $13.71 at December 31,
2001 and $13.43 at September 30, 2001. Book value per share is calculated by
dividing total equity by total shares outstanding, giving retroactive effect to
the July 2001 three-for-two stock split and the July 2002 15% stock dividend.

The following table displays the capital ratios at September 30, 2002 and
December 31, 2001 for EvergreenBancorp and Bank. The capital ratios for
September 30, 2002 reflect the additional $5 million regulatory Tier 1
capital resulting from the issuance of the capital securities described in the
Borrowings section above. As the table illustrates, the capital ratios exceed
those required to be considered well-capitalized.

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##### Table of Contents



|                                         |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  |               |        |  |  |  |       |  
|---------------------------------------- |  | ------ | ------ | ----- |  | ------ | ----- | -------- |  | ----------- | ------ | ----- |  | ---------- | ---- | ---------- |  | ------------- | ------ |  |  |  | ----- | -
|                                         |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  | Minimum to Be |        |  |  | 
|                                         |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  | Well          |        |  |  | 
|                                         |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  | Capitalized   |        |  |  | 
|                                         |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  | Under the     |        |  |  | 
|                                         |  |        |        |       |  |        |       |          |  | Minimum     |        |       |  |            |      | Prompt     |  |               |        | 
|                                         |  |        |        |       |  |        |       |          |  | for Capital |        |       |  |            |      | Corrective |  |               |        | 
|                                         |  |        |        |       |  |        |       |          |  | Adequacy    |        |       |  |            |      | Action     |  |               |        | 
|                                         |  | Actual |        |       |  |        |       | Purposes |  |             |        |       |  | Provisions |      |            |  |              
|                                         |  | Amount |        | Ratio |  | Amount |       | Ratio    |  | Amount      |        | Ratio
|                                         |  |        |        |       |  |        |       |          |  |             |        |      
|September 30, 2002                       |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  |               |        |  |  |  |       |  
|Total Capital
(to risk-weighted
assets)  |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  |               |        |  |  |  |       |  
|EvergreenBancorp                         |  | $      | 22,162 |       |  |        | 16.73 | %        |  | $           | 10,597 |       |  |            | 8.00 | %          |  | $             | 13,246 |  |  |  | 10.00 | %
|EvergreenBank                            |  |        | 21,666 |       |  |        | 16.38 | %        |  |             | 10,581 |       |  |            | 8.00 | %          |  |               | 13,227 |  |  |  | 10.00 | %
|Tier 1 Capital
(to risk-weighted
assets) |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  |               |        |  |  |  |       |  
|EvergreenBancorp                         |  |        | 20,506 |       |  |        | 15.48 | %        |  |             | 5,299  |       |  |            | 4.00 | %          |  |               | 7,948  |  |  |  | 6.00  | %
|EvergreenBank                            |  |        | 20,012 |       |  |        | 15.13 | %        |  |             | 5,291  |       |  |            | 4.00 | %          |  |               | 7,936  |  |  |  | 6.00  | %
|Tier 1 Capital
(to average assets)       |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  |               |        |  |  |  |       |  
|EvergreenBancorp                         |  |        | 20,506 |       |  |        | 12.74 | %        |  |             | 6,440  |       |  |            | 4.00 | %          |  |               | 8,050  |  |  |  | 5.00  | %
|EvergreenBank                            |  |        | 20,012 |       |  |        | 12.55 | %        |  |             | 6,377  |       |  |            | 4.00 | %          |  |               | 7,971  |  |  |  | 5.00  | %
|December 31, 2001                        |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  |               |        |  |  |  |       |  
|Total Capital
(to risk-weighted
assets)  |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  |               |        |  |  |  |       |  
|EvergreenBancorp                         |  |        | 16,181 |       |  |        | 12.78 | %        |  |             | 10,132 |       |  |            | 8.00 | %          |  |               | 12,665 |  |  |  | 10.00 | %
|EvergreenBank                            |  |        | 16,099 |       |  |        | 12.71 | %        |  |             | 10,131 |       |  |            | 8.00 | %          |  |               | 12,663 |  |  |  | 10.00 | %
|Tier 1 Capital
(to risk-weighted
assets) |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  |               |        |  |  |  |       |  
|EvergreenBancorp                         |  |        | 14,683 |       |  |        | 11.59 | %        |  |             | 5,066  |       |  |            | 4.00 | %          |  |               | 7,599  |  |  |  | 6.00  | %
|EvergreenBank                            |  |        | 14,601 |       |  |        | 11.53 | %        |  |             | 5,065  |       |  |            | 4.00 | %          |  |               | 7,598  |  |  |  | 6.00  | %
|Tier 1 Capital
(to average assets)       |  |        |        |       |  |        |       |          |  |             |        |       |  |            |      |            |  |               |        |  |  |  |       |  
|EvergreenBancorp                         |  |        | 14,683 |       |  |        | 9.57  | %        |  |             | 6,135  |       |  |            | 4.00 | %          |  |               | 7,669  |  |  |  | 5.00  | %
|EvergreenBank                            |  |        | 14,601 |       |  |        | 9.68  | %        |  |             | 6,032  |       |  |            | 4.00 | %          |  |               | 7,540  |  |  |  | 5.00  | %

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##### Table of Contents



Liquidity

Liquidity is defined as the ability to provide sufficient cash to fund
operations and meet obligations and commitments on a timely basis. Through
asset and liquidity management, the Company controls its liquidity position to
ensure that sufficient funds are available to meet the needs of depositors,
borrowers, and creditors.

In addition to cash and cash equivalents, asset liquidity is provided by the
available-for-sale securities portfolio. More than 38 percent of the investment
balances within this portfolio mature within one year. Liquidity is further
enhanced by deposit growth, federal funds purchased and securities sold under
agreements to repurchase, borrowings, and planned cash flows, maturities and
sales of investments and loans.

The consolidated statement of cash flows contained in this report provides
information on the sources and uses of cash for the respective year-to-date
periods ending September 30, 2002 and 2001. See Bancorps Form 10-K for the
year ended December 31, 2001 for additional information.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes in information about market risk from that
provided in the Companys Form 10-K for the year ended December 31, 2001.




ITEM 4. CONTROLS AND PROCEDURES



| | (a) |  | Evaluation of Disclosure Controls and Procedures: Based
upon an evaluation within the 90 days prior to the filing date of
this report, Bancorps Chief Executive Officer and Chief Financial
Officer concluded that Bancorps disclosure controls and procedures
(as defined in section 13(a)  14(c) of the Securities Exchange Act
of 1934) are effective.  
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Changes in Internal Controls: In the quarter ended
September 30, 2002, there have been no significant changes in Bancorps internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
the evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

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Forward-Looking Information Statement

Statements in this report regarding future events or performance are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (PSLRA) and are made pursuant to the safe
harbors of the PSLRA. Actual results could be quite different from those
expressed or implied by the forward-looking statements. Any statements that
expressly or implicitly predict future results, performance, or events should
be
considered forward-looking. Factors that could cause results to differ from
forward-looking statements include, among others, risks discussed in the rest
of this report as well as the following specific items: general economic
conditions, including levels of employment, whether national, regional, or
local, that could affect the demand for loans or lead to increased loan losses;
competitive factors, including increased competition with community, regional,
and national financial institutions that may lead to pricing pressures on rates
the Companys bank subsidiary charges on loans and pays on deposits, loss of
customers of greatest value to the Company, or other losses; increasing or
decreasing interest rate environments that could lead to decreased net interest
margin; changing business conditions in the banking industry; changes in the
regulatory environment or new legislation; and changes in technology or
required investments in technology. Readers are cautioned not to place undue
reliance on forward-looking statements, which reflect managements analysis
only as of the date of the statement. The Company does not intend to publicly
revise or update forward-looking statements to reflect events or circumstances
that arise after the date of this report.




PART II  OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS.

There are no material pending legal proceedings to which Bancorp or any
subsidiary is a party other than ordinary routine litigation incidental to
their respective businesses.




ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

None




ITEM 3. DEFAULTS UPON SENIOR SECURITIES.




None

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.

None




ITEM 5. OTHER INFORMATION.

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On January 17, 2002, the board of directors of the Company declared a
dividend of $.18 per share to shareholders of record at the close of business
on January 31, 2002 and payable February 8, 2002.

On June 20, 2002, the board of directors of the Company declared a 15%
stock dividend to shareholders of record as of July 8, 2002 and payable July
15, 2002.

During the second
quarter of 2002, EvergreenBank hired Susan L. Gates as its
executive vice president and chief credit officer. She is responsible for
EvergreenBanks commercial lending program, including new business development
and credit policy.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.






| | (a) |  | Exhibits                                                        
| | --- |  | ----------------------------------------------------------------
|
| |     |  | Exhibit 11  Computation of basic and diluted earnings per share
|
| |     |  | Exhibit 99.1  Certification of Chief Executive Officer         
|
| |     |  | Exhibit 99.2  Certification of Chief Financial Officer         






| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------
|
| |     |  | None               

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SIGNATURES

Under the requirements of the Securities Exchange Act of 1934, the Company has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Dated: November 13, 2002.

EVERGREENBANCORP, INC.

/s/ William G. Filer II

William G. Filer II
Senior Vice President and Chief Financial Officer
(Authorized Officer and Principal Financial Officer)

I, Gerald O. Hatler certify that:

1. I have reviewed this quarterly report on Form 10-Q of EvergreenBancorp,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

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5. The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6. The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Dated: November 13, 2002

/s/ Gerald O. Hatler

Gerald O. Hatler
President & Chief Executive Officer

I, William G. Filer II, certify that:

1. I have reviewed this quarterly report on Form 10-Q of EvergreenBancorp,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

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a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6. The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Dated: November 13, 2002

/s/ William G. Filer II

William G. Filer II
Senior Vice President & Chief Financial Officer

23