FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION

                             Washington, DC 20549



                QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF

                      THE SECURITIES EXCHANGE ACT OF 1934

                   For the Quarter ended September 30, 1998 
                        Commission File Number 0-10275


                            EVERGREEN BANCORP, INC.
                            -----------------------
            (Exact name of registrant as specified in its charter)


               DELAWARE                                     36-3114735     
               --------                                     ---------- 
     (State or other jurisdiction of                      (IRS Employer
      incorporation or organization)                  Identification No.)


                 237 GLEN STREET, GLENS FALLS, NEW YORK 12801
                 --------------------------------------------
                   (Address of principal executive offices)


     Registrant's telephone number, including area code:    (518) 792-1151
                                                            --------------

     Indicate  by  check  mark whether the Registrant (1)  has  filed  all 
     reports  required to be filed by Section 13 or 15 (d) of the  Securi-
     ties Exchange Act of 1934 during the preceding 12 months (or for such 
     shorter  period  that  the  Registrant  was  required  to  file  such 
     reports), and (2) has been subject to such filing requirements for 
     the past 90 days.   Yes   X     No      
                             -----      -----                  
       
     Indicate the number of shares outstanding of each Issuer's classes of 
     common stock, as of the latest practicable date:


     Class of Common Stock                   Number of Shares Outstanding 
                                                as of October 31, 1998    
      -------------------                       ---------------------- 
      $3.33 1/3 Par Value                              8,732,659   



                   
                   
                   
                   
                   
                  
              
                   EVERGREEN BANCORP, INC. AND SUBSIDIARIES

                                     INDEX

                                                                  Page No.
                                                                  --------    

     PART I         FINANCIAL INFORMATION
     ------  

     Item 1    Financial Statements (Unaudited):

               Consolidated Statements of Income for the Three
               Months Ended September 30, 1998, and 1997              1 

               Consolidated Statements of Income for the Nine
               Months Ended September 30, 1998, and 1997              2 

               Consolidated Statements of Financial Condition
               as of September 30, 1998, and December 31, 1997       3-4

               Consolidated Statements of Cash Flows for the
               Nine Months Ended September 30, 1998 and 1997         5-6

               Notes to Consolidated Interim                         
               Financial Statements                                  7-9 

               Independent Auditors' Review Report                    10

     Item 2    Management's Discussion and Analysis                 11-23

     Item 3    Not Applicable

     PART II        OTHER INFORMATION
     -------
      
     Item 1    Legal Proceedings - None

     Item 2    Changes in Securities - None

     Item 3    Defaults Upon Senior Securities - None

     Item 4    Submission of Matters to a Vote of Security Holders - None
                    
     Item 5    Other Information - None

     Item 6    Exhibits and Reports on Form 8-K                         

                                                               
                                                   

                                         

              


                                         
                                   

  
                            EVERGREEN BANCORP, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                            (Dollars in Thousands)
                            (Except Per Share Data)
                                                           Three Months
                                                        Ended September 30,
                                                          1998      1997  
                                                            (Unaudited)
     Interest Income:                                       
       Interest and Fees on Loans                        $14,615   $14,790
       Interest on Investment Securities                   5,098     4,479
       Interest on Federal Funds Sold & Bank Deposits        199       235
                                                         -------   -------
     Total Interest Income                                19,912    19,504
                                                         -------   -------
     Interest Expense:                                           
       Interest on Deposits:                                     
         Regular Savings, Interest Checking and Money
           Market Deposit Accounts                         2,490     2,390
         Other Time                                        6,400     5,823
       Interest on Short-Term Borrowings                     136        79
       Interest on Long-Term Debt                            411       420
                                                         -------   -------
          Total Interest Expense                           9,437     8,712
                                                         -------   -------
     Net Interest Income                                  10,475    10,792
     Provision for Loan Losses                               495       450
                                                         -------   -------
     Net Interest Income After Provision for                     
        Loan Losses                                        9,980    10,342
                                                         -------   ------- 
     Other Income:                                               
       Trust Department Income                               657       663
       Service Charges on Deposit Accounts                   767       768
       Net Gain on Security Transactions                     191         - 
       Other                                                 477       355
                                                         -------   -------
          Total Other Income                               2,092     1,786
                                                         -------   -------
     Other Expense:                                              
       Salaries and Employee Benefits                      4,106     4,206
       Net Occupancy and Equipment Expense                 1,056     1,084
       Other                                               2,494     2,528
                                                         -------   -------
          Total Other Expense                              7,656     7,818
                                                         -------   -------
     Income Before Taxes                                   4,416     4,310 
     Applicable Income Taxes                               1,369     1,425
                                                         -------   -------
     Net Income                                          $ 3,047   $ 2,885
                                                         =======   =======
     Earnings Per Common Share:
     Average Shares Outstanding - Basic                    8,787     8,956
     Basic Income Per Share                              $   .35    $  .32
     Diluted Income per Share                            $   .34    $  .32 

     See accompanying notes to consolidated interim financial statements.

                                        1
                                          
                            EVERGREEN BANCORP, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                            (Dollars in Thousands)
                            (Except Per Share Data) 
                                                             Nine Months
                                                          Ended September 30,
                                                            1998      1997  
                                                              (Unaudited)
     Interest Income:                                       
       Interest and Fees on Loans                          $44,079  $43,872
       Interest on Investment Securities                    15,036   11,915
       Interest on Federal Funds Sold & Bank Deposits          588    1,078
                                                            ------   ------
          Total Interest Income                             59,703   56,865
                                                            ------   ------
     Interest Expense:
       Interest on Deposits:
         Regular Savings, Interest Checking and Money
           Market Deposit Accounts                           7,261    7,230
         Other Time                                         19,119   16,556
       Interest on Short-Term Borrowings                       378      192
       Interest on Long-Term Debt                            1,230    1,232
                                                            ------   ------
          Total Interest Expense                            27,988   25,210
                                                            ------   ------
     Net Interest Income                                    31,715   31,655
     Provision for Loan Losses                               1,485    1,260
                                                            ------   ------
     Net Interest Income After Provision for
       Loan Losses                                          30,230   30,395
                                                            ------   ------
     Other Income:
       Trust Department Income                               2,141    1,960  
       Service Charges on Deposit Accounts                   2,276    2,104 
       Net Gain/(Loss) on Security Transactions                236        9  
       Other                                                 1,326    1,076 
                                                            ------   ------
          Total Other Income                                 5,979    5,149
                                                            ------   ------
     Other Expenses:
       Salaries and Employee Benefits                       12,367   12,268
       Net Occupancy and Equipment Expense                   3,164    3,214
       Other                                                 7,608    7,753
                                                           -------  -------
          Total Other Expenses                              23,139   23,235
                                                           -------  -------
     Income Before Taxes                                    13,070   12,309 
     Applicable Income Taxes                                 4,105    4,070
                                                           -------  -------
     Net Income                                            $ 8,965  $ 8,239
                                                           =======  =======
     Earnings Per Common Share:
     Average Shares Outstanding - Basic                     8,809     9,016
     Basic Income Per Share                              $   1.02   $   .91
     Diluted Income Per Share                            $   1.00   $   .90 
                                                                
     See accompanying notes to consolidated interim financial statements.

                                        2
                                                    
                            EVERGREEN BANCORP, INC.
                CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                            (Dollars in Thousands)

                                                        9/30/98   12/31/97
                                                      (Unaudited) 
     Assets:

     Cash and Cash Equivalents:
     Cash and Due From Banks                         $   27,031  $   26,596
     Federal Funds Sold                                  17,600           -
                                                     ----------  ----------
             Total Cash and Cash Equivalents             44,631      26,596
                                                     ----------  ----------
     Securities:
     Securities Available For Sale (Amortized           
       cost of $337,048 and $246,567 at 9/30/98
       and 12/31/97, respectively)                      339,637     248,245
     Securities Held to Maturity (fair value
       of $14,229 and $35,586 at 9/30/98
       and 12/31/97, respectively)                       13,308      34,655
                                                     ----------  ----------
          Total Securities                              352,945     282,900
                                                     ----------  ----------
     Loans:
       Commercial                                       208,303     233,296
       Mortgage                                         331,466     310,839  
       Installment                                      142,442     136,480
       Other                                                122         263
                                                     ----------  ----------
          Total Loans                                   682,333     680,878
     Less:
       Allowance for Loan Losses                        (12,313)    (12,831)
       Unearned Income on Loans                          (1,244)     (1,839)
                                                     ----------  ---------- 
          Loans, net                                    668,776     666,208
                                                     ----------  ----------

     Bank Premises and Equipment, net                    16,315      16,308
     Other Real Estate Owned                              2,147       1,067
     Other Assets                                        18,150      17,082
                                                     ----------  ----------
          Total Assets                               $1,102,964  $1,010,161
                                                     ==========  ==========

                                                            (Continued)
                                                            











                                        3
                                        
                            EVERGREEN BANCORP, INC.
                CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                  (Continued)
                            (Dollars in Thousands)

                                                        9/30/98    12/31/97
                                                      (Unaudited)
     Liabilities:

     Deposits:                                        
       Demand                                        $  103,317  $  102,345
       Regular Savings, Interest Checking and Money
          Market Deposit Accounts                       377,493     339,470
       Certificates of Deposit over $100,000            141,532     110,189
       Other Time                                       331,981     301,672
                                                     ----------  ----------
          Total Deposits                                954,323     853,676
                                                     ----------  ----------
     Federal Funds Purchased and Other Short
       Term Borrowings                                   12,402      27,208
     Accrued Taxes and Other Liabilities                 20,635      15,311
     Long-Term Debt                                      25,324      25,710
                                                     ----------  ----------
          Total Liabilities                           1,012,684     921,905
                                                     ----------  ----------

     Stockholders' Equity     
     Common Stock $3.33 1/3 Par Value:  Authorized-
     20,000,000 Shares; Issued 9,633,966 at September 
     30, 1998 and December 31, 1997                      32,113      32,113 
     Surplus                                              7,619       6,787
     Undivided Profits                                   64,046      59,225
     Accumulated Other Comprehensive Income               1,303       1,007 
     Treasury Stock (923,019 shares at September 30,    
     1998 and 727,256 shares at December 31, 1997)      (14,338)    (10,236)
     Common Stock Subscribed by ESOP                       (463)       (640)
                                                     ----------  ---------- 
          Total Stockholders' Equity                     90,280      88,256
                                                     ----------  ----------
          Total Liabilities and Stockholders' Equity $1,102,964  $1,010,161
                                                     ==========  ==========

     See accompanying notes to consolidated interim financial statements.















                                        4
                                        
                            EVERGREEN BANCORP, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Dollars in Thousands)
 
     The Nine Months Ended September 30,                    1998     1997
                                                             (Unaudited)
                                                          -----------------
     Cash Flows from Operating Activities:                         
     Net Income. . . . . . . . . . . . . . . . . . . .  $   8,965  $  8,239 
     Adjustments to Reconcile Net Income to 
     Net Cash Provided by Operating Activities:
       Net Change in Unearned Loan Fees. . . . . . . .         49       108
       Net Change in Other Assets and Other Liabilities     3,895     4,065
       Gains on Sale of Securities and Loans . . . . .       (343)       (9)
       Increase in Deferred Tax Benefit. . . . . . . .       (254)     (766)
       Loss/(Gain) on Sale/Write-Down of
         Other Real Estate . . . . . . . . . . . . . .        121        (7)
       Loss on Disposition of Assets . . . . . . . . .         10        12
       Depreciation. . . . . . . . . . . . . . . . . .      1,408     1,329
       Provision for Loan Losses . . . . . . . . . . .      1,485     1,260
       Amortization of Premiums & Accretion of 
               Discounts on Securities, Net. . . . . .      1,285       409  
                                                           ------    ------  
     
          Net Cash Provided By Operating Activities. .     16,621    14,640 
                                                           ------    ------ 
     Cash Flows From Investing Activities:
     Proceeds From: 
       Sales of Securities Available for Sale. . . . .     22,818       532
       Maturities of Securities Available for Sale . .     96,390    40,074
       Maturities of Securities Held to Maturity . . .     21,329     2,598 
     Purchases of Securities Available for Sale. . . .   (210,720)  (95,800)
     Purchases of Securities Held to Maturity. . . . .          -   (21,903)
     Proceeds From Sales of Loans. . . . . . . . . . .     16,269     1,107
     Net Increase in Loans . . . . . . . . . . . . . .    (21,454)  (12,317)  
     Change in Check Overdraft Receivables . . . . . .       (626)     (207)
     Proceeds From Sales of Other Real Estate. . . . .        615       508
     Capital Expenditures. . . . . . . . . . . . . . .     (1,425)   (2,507)
                                                           ------    ------
          Net Cash Used By
            Investing Activities . . . . . . . . . . .    (76,804)  (87,915)
                                                           ------    ------
     Cash Flows From Financing Activities:
     Net Increase in Deposits. . . . . . . . . . . . .    100,647    54,053 
     Net Increase/(Decrease) in Short-Term Borrowings.    (14,806)    3,114 
     Payments on Long Term Debt. . . . . . . . . . . .       (209)     (292)
     Payments From Sale of Treasury Stock. . . . . . .        741       697

                                                              (Continued)

                                                                 







                                        5





                            EVERGREEN BANCORP, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Continued)                  
                            (Dollars in Thousands)
 
     The Nine Months Ended September 30,                      1998     1997
                                                               (Unaudited) 
                                                            -----------------

     Payments for Purchase of Treasury Stock . . . .        (4,184)  (4,525)
     Dividends Paid. . . . . . . . . . . . . . . . .        (3,971)  (3,528)
                                                            ------   ------
          Net Cash Provided By 
            Financing Activities . . . . . . . . . .        78,218   49,519 
                                                            ------   ------
     Net Increase/(Decrease) in Cash 
        and Cash Equivalents . . . . . . . . . . . .        18,035  (23,756)
     Cash and Cash Equivalents at Beginning of Year.        26,596   56,130
                                                           -------  -------
     Cash and Cash Equivalents at End of Quarter . .      $ 44,631 $ 32,374
                                                           =======  =======
     Supplemental Disclosure of Cash Flows:
     Interest Paid . . . . . . . . . . . . . . . . .      $ 27,399 $ 24,802
     Taxes Paid. . . . . . . . . . . . . . . . . . .         1,165      683

     Supplemental Schedule of Non-Cash  Investing  and  Financing  Activities:
     Certain properties which were foreclosed upon were transferred from loans 
     to other real estate  in the amount of  $1,816,000 and  $1,397,000 during
     the nine months ended September 30, 1998 and 1997, respectively.

     The Company  borrowed $1,600,000, which was used to  subscribe for common 
     stock of the Company in 1990.  Payments were made on the ESOP loan in the 
     amount of  $177,000 and $168,000  during the nine months ended  September 
     30, 1998 and 1997 respectively.

     As a result of the adoption of Statement of Financial Accounting Standard 
     No. 115,  securities available for sale  are recorded at fair value.  The 
     unrealized gain on these securities was $2,589,000 at September 30, 1998.
     The  adjustment to  stockholders'  equity  for the  unrealized  gain  was 
     $1,553,000, net of deferred income tax expense of $1,036,000.

     At September 30, 1997  securities  available  for sale  had an unrealized 
     gain of $1,397,000. The adjustment to stockholders' equity net of deferred 
     income tax expense of $559,000, was $838,000.







     See accompanying notes to consolidated interim financial statements.     


                                        6
                                        
                            EVERGREEN BANCORP, INC.
              NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                  (Unaudited)


     1. Financial Statement Presentation
                                        
     The accompanying  consolidated  financial statements consist of Evergreen
     Bancorp, Inc. ("the Company")  and the financial statements of its wholly
     owned subsidiary, Evergreen Bank, N.A. The unaudited consolidated interim
     financial  statements have been  prepared  according to the  rules of the
     Securities  and  Exchange Commission.  In the opinion of the Company, the
     accompanying unaudited  consolidated interim financial statements contain
     all adjustments  necessary to present fairly the financial position as of
     September 30,  1998, the  results of  operations  for the  three and nine
     months  ended  September 30,  1998 and  1997 and cash flows  for the nine
     months ended September 30, 1998 and 1997. All adjustments are of a normal
     recurring nature.  Certain information and footnote  disclosures normally
     included  in financial  statements prepared in accordance  with generally
     accepted accounting principles have been condensed or omitted pursuant to
     rules and regulations applicable to interim financial statements.

     The accompanying interim consolidated financial statements should be read
     in  conjunction with  the Evergreen Bancorp, Inc.  consolidated  year-end
     financial  statements, including notes thereto, which are included in the
     Evergreen Bancorp, Inc. 1997 Annual Report and Form 10-K. 

     2. Proposed Merger

     On  July  31,  1998, the  Company  announced  that  it  entered  into  an
     Affiliation  Agreement  and  Plan  of  Reorganization  (the  "Affiliation
     Agreement") with  Banknorth Group, Inc.,  Burlington, Vermont (Banknorth)
     for the merger of the Company with and into  Banknorth. Banknorth will be
     the surviving corporation,  and the Company's  principal bank subsidiary,
     Evergreen  Bank,  N.A., would be  operated  as a  separate subsidiary  of
     Banknorth. In consideration  of  the  merger, each  outstanding  share of
     common stock of the Company will be exchanged for 0.9 shares of Banknorth
     common stock. Consummation of the merger is subject to  satisfaction of a
     number of  conditions,  including,  among other things,  stockholder  and
     regulatory approval. It is currently anticipated that the merger would be
     consummated at the end 1998, although no assurances can be given  at this
     time.

     The Company  announced  the  termination  and  rescission  of  its  stock
     repurchase program in connection with the  Affiliation Agreement. Through
     July 31, 1998, the Company  had purchased  231,000 shares  of its  Common
     Stock under the most recent program, leaving  251,000 shares remaining to
     be purchased at the time the repurchase program was terminated.

     Directors of the Company have entered into  Stockholder Letter Agreements
     with Banknorth stipulating that each direcor will vote those shares which
     he or she has sole voting power in favor of the merger.

     In connection with  the Affilition Agreement, the Company  and  Banknorth
     have  entered into  a Stock Option  Agreement  dated July 31,  1998, (the



                                       7

              NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                 (Unaudited)
                                 (Continued)

     "Stock Option Agreement") pursuant  to which  Banknorth has the right  to
     purchase  up to  1,888,923 shares of  Company common stock, not to exceed
     19.9% of the outstanding  shares, at a price  equal to  $27.75 per share,
     exercisable under certain conditions.

     Banknorth  has  filed  with  the  Securities  and  Exchange  Commission a
     Schedule 13D, Commission File  No. 0-18173, on August 10, 1998, including
     as  exhibits thereto  the Affiliation Agreement, the Stock Option  Agree-
     ment, the Agreement and Plan of Merger, dated July 31, 1998, and the form
     of the  Stockholder  Letter  Agreements  entered  into  by  the Company's
     Directors.

     3. Payment of Dividends
     
     The  Company is a legal  entity  separate and distinct from its  bank and 
     other subsidiaries. The principal source of cash flow  of the Registrant, 
     including  cash flow to pay  dividends to its  stockholders, is dividends 
     from  Evergreen Bank. The  subsidiary  bank is  required to meet  various 
     legal  requirements  prior to the  payment of dividends  to the  Company. 
     Without the  payment of dividends  from Evergreen Bank  the Company would 
     not be able to pay dividends to its stockholders.

     4. Comprehensive Income

     On  January 1, 1998, the Company adopted the  provisions of  Statement of
     Financial Accounting Standards No. 130, "Reporting Comprehensive Income".
     This statement establishes standards for reporting and display of compre-
     hensive income  and  its  components. Comprehensive  income  includes the
     reported net income of a  company  adjusted for  items that are currently
     accounted  for as  direct entries to equity  such as  the  mark to market
     adjustment on securities available  for sale,  foreign currency items and
     minimum  pension  liability  adjustments. At the  Company,  comprehensive
     income  represents  net income  plus  other  comprehensive  income, which
     consists of  the  net change  in unrealized gains or losses on securities
     available for sale  for the period  and changes  to the  minimum  pension
     liability adjustments. Accumulated  other comprehensive income represents
     the net unrealized gains  or losses on  securities available for sale and
     the net  minimum pension  liability  adjustments as of the  balance sheet
     dates.

     Comprehensive income  for the  nine months ended  September 30, 1998  and
     September 30, 1997 was $9,261,000 and $9,053,000, respectively.

     5. Preferred Stock Purchase Rights Plan

     On April 17, 1998, the Board of Directors  of the  Company adopted a Pre-
     ferred Stock Purchase Rights Plan (the "Plan"). The Plan provides for the
     distribution of  one preferred stock purchase right  for each outstanding
     share of  common stock  of the Company. Each right  entitles  the holder,
     following  the occurrence of certain events, to purchase a unit, consist-
     ing of  one-hundredth  of a  share of  Series A Junior Participating Pre-
     ferred Stock, at  a price  of $65  per unit, subject  to  adjustment. The
     rights will not be  exercisable  or transferable  apart from  the  common
                                      
                                      8
                                      
	      NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                 (Unaudited)
                                 (Continued)

     stock  except under  certain circumstances in which  a person or group of
     affiliated persons acquires, or commences  a tender offer  to aquire, 10%
     or more  of  the Company's common stock. Rights held by such  an aquiring
     person or persons may thereafter become void. Under certain circumstances
     a right  may become a right  to purchase  common stock  or assets  of the
     Company  or an  acquiring corporation  at a  substantial  discount. Under
     certain  circumstances, the Company  may redeem  the rights  at $.001 per
     right. The rights  will expire  in May 2008  unless  earlier redeemed  or
     exchanged by the Company.

     On  July 31, 1998, the  Company  adopted  an amendment  to the  Plan that
     excludes Banknorth  and its affiliates  from the  definition of "Aquiring
     Person" for purposes of triggering the exercisability of the Rights.

     6. Earnings Per Share

     The following table shows the reconciliation of basic to diluted earnings
     per share:

		  Computation of Net Income Per Common Share
		(Dollars in Thousands, except Per Share Amounts)

                                              Three Months Ended September 30,

                                                    1998            1997
     Basic Earnings Per Share
     Average Shares Outstanding                   8,787,000       8,956,000
     Net Income                                    $  3,047        $  2,885
     Basic Earnings Per Share                      $    .35        $    .32

     Diluted Earnings Per Share        
     Average Shares Outstanding                   8,787,000       8,956,000
     Dilutive Effect of Stock Options               177,000         135,000
     Average Potential Shares                     8,964,000       9,091,000
     Net Income                                    $  3,047        $  2,885
     Diluted Earnings Per Share                    $    .34        $    .32

                                               Nine Months Ended September 30,

                                                    1998            1997
     Basic Earnings Per Share
     Average Shares Outstanding                   8,809,000       9,016,000
     Net Income                                    $  8,965        $  8,239
     Basic Earnings Per Share                      $   1.02        $    .91

     Diluted Earnings Per Share           
     Average Shares Outstanding                   8,809,000       9,016,000
     Dilutive Effect of Stock Options               174,000         118,000
     Average Potential Shares                     8,983,000       9,134,000
     Net Income                                    $  8,965        $  8,239
     Diluted Earnings Per Share                    $   1.00        $    .90



                                       9                                     
                                       
                         Independent Auditors' Review Report

     The Board of Directors and Stockholders
     Evergreen Bancorp, Inc.:

     We have  reviewed the  consolidated statement  of financial condition  of
     Evergreen Bancorp, Inc. and subsidiaries as of September 30, 1998 and the
     related  consolidated statements of income for  the three-month and nine-
     month periods  ended  September 30, 1998  and 1997, and the  consolidated
     statements of cash flows  for the nine-month periods  ended September 30,
     1998 and 1997. These consolidated  financial statements are the responsi-
     bility of the Company's management.

     We  conducted our review in accordance with standards established  by the
     American Institute of Certified Public Accountants.  A review  of interim
     financial information consists principally of applying analytical proced-
     ures to financial  data and making  inquiries of persons  responsible for
     financial and accounting matters.  It is substantially less in scope than
     an  audit  conducted  in  accordance  with  generally  accepted  auditing
     standards, the objective of which is the expression of an opinion regard-
     ing the financial statements  taken as  a  whole.  Accordingly, we do not
     express such an opinion.

     Based  on our review, we are not aware of any material modifications that
     should be made to the consolidated financial statements referred to above
     for  them to be in  conformity  with  generally accepted accounting prin-
     ciples.

     We have  previously audited, in accordance with generally accepted audit-
     ing standards,  the  consolidated  statement of  financial  condition  of
     Evergreen Bancorp, Inc. and subsidiaries as of December 31, 1997, and the
     related  consolidated  statements of  income,  changes  in  stockholders'
     equity, and cash flows  for the  year then ended  (not presented herein);
     and  in our report  dated January 23, 1998,  we expressed  an unqualified
     opinion  on those  consolidated financial statements. In our opinion, the
     information  set  forth  in the  accompanying  consolidated  statement of
     financial condition as of December 31,  1997, is fairly presented, in all
     material respects, in relation to the consolidated statement of financial
     condition from which it has been derived.


     /s/ KPMG PEAT MARWICK LLP
     Albany, New York
     November 10, 1998

                            












                                        10
                                        
                            EVERGREEN BANCORP, INC.                        
                     MANAGEMENT'S DISCUSSION AND ANALYSIS
                          OF FINANCIAL CONDITION AND 
                             RESULTS OF OPERATIONS

     FINANCIAL REVIEW
     ----------------
     The principal  source of earnings  for the Company is its  single banking
     subsidiary,  Evergreen Bank, N.A.  All  discussion  herein refers  to the
     banking  activities of the Company's banking subsidiary  unless otherwise
     noted.

     When used in this  quarterly  Report on Form 10-Q,  the words or  phrases
     "will likely result,"  "are expected to," "will  continue," "is  anticip-
     ated,"  "estimate,"  "project"  or similar  expressions  are  intended to
     identify  "forward-looking statements" within the  meaning of the Private
     Securities Litigation Reform Act of 1995. Such statements  are subject to 
     certain risks and uncertainties including, changes in economic conditions 
     in the Company's market area, changes in policies by regulatory agencies,
     fluctuations in interest rates, demand for loans  in the Company's market
     area and competition, disruptions of the operations of the Company or any
     governmental or private entity as  a result  of the  "Year 2000 Problem",
     that  could cause  actual results  to differ  materially from  historical
     earnings  and those  presently  anticipated  or  projected.  The  Company
     cautions readers not to place undue  reliance on any such forward-looking
     statements,  which  speak only  as of  the date made. The factors  listed
     above  could affect  the Company's financial performance  and could cause
     the Company's actual results for future periods to differ materially from
     any  opinions or  statements expressed  with respect to future periods in
     any current statements.

     The Company  does not undertake, and specifically disclaims,  any obliga-
     tion to publicly release the result of any revisions which may be made to 
     any forward-looking  statements to  reflect events or circumstances after  
     the date of  such events  or to reflect  the occurrence of anticipated or 
     unanticipated events. 
    
     PROPOSED MERGER
     ---------------

     On July 31, 1998, the Company  jointly announced  that it entered into an
     Affiliation Agreement and Plan of Reorganization (the "Affiliation Agree-
     ment") with  Banknorth Group, Inc.,  Burlington, Vermont  (Banknorth) for
     the merger  of the  Company with  and into  Banknorth. See Note 2  to the
     Notes to Consolidated Interim Financial Statements.

     Through  September 30,  the  Company  has  paid  merger related  expenses
     totaling  approximately  $219,000, and  expects to incur substantial add-
     itional  expenses  upon consumation  of the  merger.  These expenses  are
     currently accounted  for  as prepaid  assets  in anticipation  of expense
     recognition  upon the  completion  of the  merger.  Should the merger  be
     terminated  for  any  reason  these  expenses,  along with any additional
     expenses incurred  to the  point  of  termination, would  immediately  be
     charged to income.

                                     

                                        
                                        11
                                         
                            EVERGREEN BANCORP, INC.                        
                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (Continued)

     SUMMARY OF RESULTS OF OPERATIONS
     --------------------------------
     Net income for the three months ended  September 30, 1998, was $3,047,000
     as compared to  $2,885,000  in 1997's  third quarter. For the  nine month
     period ended September 30, 1998,  net income was  $8,965,000  compared to
     $8,239,000  in  1997. Basic  income  per  share  for  the  quarter  ended
     September 30, 1998, was $.35, compared to $.32 for the September 30, 1997
     quarter. For the  three and  nine month periods, the primary  reasons for
     the increases in net income  were increased non-interest income and lower
     non-interest expenses.
     
     In 1998, the annualized return on average assets  for the nine months was
     1.14%, compared to 1.14% for the first nine months last year. The annual-
     ized return on average stockholders' equity, for the first nine months of
     1998  was  13.7%,  compared to  12.8%  for the  same period  in 1997. The
     increase in the return  on average stockholders' equity is due  primarily
     to the increased level of net income.

     NET INTEREST INCOME
     -------------------
     Net interest income  for the  three months  ended  September 30, 1998 was
     $10,475,000,  compared to $10,792,000  for the same period of 1997.  This
     represents a  decrease of $317,000 or 2.9%. The first nine months of 1998
     reflects net  interest income  of  $31,715,000, an  increase  of 0.2%  as
     compared  to  $31,655,000  for the  same period  last year. On a  taxable
     equivalent basis,  net interest income was  $10,616,000  for the  quarter
     ended September 30, 1998 as compared to $10,935,000 for the quarter ended
     September 30, 1997. This represents a  decrease of $319,000 or  2.9%. For
     the  first nine  months  of 1998  taxable  equivalent net interest income
     increased 0.3% to $32,148,000 from the level reported for the nine months
     ended September 30, 1997.

     The decrease in net interest income in 1998's third quarter is attributed
     to a lower net interest margin. The decline in the margin was caused by a
     flat yield curve, which  has the  effect of  keeping short  term  deposit
     rates high  relative to longer term  loan rates, and  a shift in  earning
     asset  concentrations  from  higher yielding  commercial loans  to  lower
     yielding mortgage loans and investment securities.

     ALLOWANCE FOR LOAN LOSSES
     -------------------------
     The Company's  allowance for loan losses  at September 30, 1998,  has de-
     creased $518,000 to  $12,313,000  from the December 31, 1997 balance. The
     decrease was caused  primarily by  a substantial chargeoff related to one
     commercial  borrowing  relationship  which approximated  $1,100,000. As a
     percent of total loans, net of unearned income, the allowance was approx-
     imately 1.8% at  September 30, 1998. The  allowance represents  230.4% of 
     total non-performing loans at quarter end. The provision  for loan losses
     for the  quarter  ended  September 30,  1998  was  $495,000  compared  to
     $450,000 for the same period in 1997. For the nine months ended September
     30, 1998 the provision totaled $1,485,000, compared to $1,260,000  a year
     earlier. The increased provision, from year earlier levels,  reflects the

                                        12 
                                         
                            EVERGREEN BANCORP, INC.                        
                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (Continued)

     incremental loan growth incurred over the last year.

     The allowance  for loan losses  represents amounts  available  for future
     credit  losses  and  reflects  management's  ongoing  detailed  review of
     certain  individual  credits, as  well as  analysis  of the  historic net 
     charge off experience of the loan portfolio, an evaluation of current and 
     anticipated  economic conditions, peer group statistics and  other perti-
     nent factors.  

     Loans (or portions thereof)  deemed uncollectible are charged against the 
     allowance  while recoveries of  amounts previously  charged off are added 
     to the  allowance.  Provisions  for loan losses  charged to earnings  are 
     added  to the allowance.  Amounts are charged off once the probability of 
     loss has been determined, with consideration given to factors such as the  
     customer's financial condition, underlying collateral and guarantees, and 
     general and industry economic conditions.

     The following  table presents  information concerning nonperforming loans 
     and other real estate.
                                              9/30/98       12/31/97
                                              -------       --------
                                              (Dollars In Thousands)

               Non-Accrual                   $  4,365       $  4,838
               Past Due 90 Days                   979            951
                                             --------       --------
                 Total Non-Performing
                    Loans                    $  5,344       $  5,789
                                             ========       ========
                 Other Real Estate           $  2,147       $  1,067
                                                     
     The majority of the Company's non-performing loans consist  of commercial  
     and commercial real estate loans.  There is no  distinct concentration as 
     to type of borrower within these classifications.

     OTHER INCOME AND EXPENSE
     ------------------------
     Other income  for the three month  period  ended  September 30, 1998, was
     $2,092,000, $306,000 more than the $1,786,000 recorded in the same period
     last year. Gains  on sales of  securities and  residential mortgage loans
     contributed to the overall increase of 17.1%

     Other income  for the  nine month  period  ended  September 30, 1998, was
     $5,979,000, $830,000 more than the $5,149,000 recorded in the same period
     last year. Increases in  all other income categories  contributed  to the
     overall increase of 16.1%

     Other expense  for the  quarter ended  September 30, 1998 was $7,656,000, 
     compared to  $7,818,000  for the  same quarter  last year, a decrease  of 
     $162,000 or 2.1%.  Salaries  and  employee benefits expense,  the largest 
     component of  other operating expense,  decreased  $100,000 to $4,106,000
     for the three months ended September 30, 1998, from $4,206,000 during the

                                        13
                                         
                            EVERGREEN BANCORP, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (Continued)
                                     
     same period  of 1997. The  principal cause  of the  decrease in  employee
     benefits expense was attrition  related to the  pending merger. Occupancy
     and equipment expense and other expenses declined modestly.

     Other expense for the  nine month  period  ended  September 30, 1998, was
     $23,139,000, a  small  decrease  from  $23,235,000  recorded  in the same
     period  last year. Both occupency and  other expenses declined offsetting
     the minor increase in salaries and employee benefits.
                                     
     INCOME TAX EXPENSE
     ------------------
     Income tax expense  for the  three months ended  September 30,  1998, was 
     $1,369,000 as compared to $1,425,000 for the three months ended September 
     30, 1997.  For  the  nine  months  ended  September 30, 1998, income  tax
     expense was $4,105,000 compared to  $4,070,000 in 1997. The effective tax
     rate  for the  periods ended  September 30, 1998 and 1997  were 31.4% and 
     33.1%, respectively. The decrease in the  effective tax rate is attribut-
     able to  Company  tax  strategies  and  the  continuing  re-evaluation of
     reserves related to federal deferred tax assets.

     BALANCE SHEET COMPOSITION
     -------------------------
     Since December 31, 1997 the Company has continued to grow its asset base.
     Total assets  increased  $92,803,000 to  $1,102,964,000  at September 30,
     1998 from $1,010,161,000 at December 31, 1997. The increase in assets has
     been concentrated  in the  investment portfolio. Funding for the increase
     in  assets  has been  spread among the  various interest bearing  deposit
     categories.

     CAPITAL AND LIQUIDITY
     ---------------------
     At September 30, 1998, stockholders' equity was  $90,280,000, as compared 
     to $88,256,000 at  December 31, 1997,  an increase of $2,024,000 or 2.3%. 
     The  increase in  stockholders' equity  is a result  of the  retention of 
     earnings of  $4,994,000, treasury stock sales of $741,000, a reduction of 
     the  ESOP  balance of  $177,000, and a change in the valuation of  accum-
     ulated  other  comprehensive  income  of $296,000. These were  offset  by
     treasury share purchases of $4,184,000.

     The following table sets forth the Company's risk based capital ratios as  
     of September 30, 1998 and the regulatory  guidelines for well capitalized 
     institutions.
                                     Evergreen           Well Capitalized
          Risk-Based               Bancorp, Inc.             Regulatory
            Ratios                 Sept. 30, 1998            Guidelines 
          ----------               --------------        ----------------  

          Leverage Ratio                8.1 %                  5.0 %

          Tier 1                       13.5 %                  6.0 %

          Total Capital                14.8 %                 10.0 %

                                        14
                                         
                            EVERGREEN BANCORP, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (Continued)

     Average federal funds sold  and  interest bearing deposits  for the  nine
     month period ended  September 30, 1998  were $14,158,000, as  compared to
     $26,338,000  for  the  nine months ended  September 30,  1997.  Net  cash
     provided  by  operating  activities  was $16,621,000 for the  nine months
     ended September 30, 1998 as compared to net cash provided  of $14,640,000
     for the nine months ended September 30, 1997. Largely due to increases in
     securities balances net cash used by investing activities was $76,804,000
     for the nine months ended September 30, 1998 as compared to net cash used
     of  $87,915,000  for  the  same  period  last year. Net cash  provided by
     financing activities was $78,218,000 for the nine months of 1998 as comp-
     ared to  cash provided  of $49,519,000  for the  nine months of 1997. The
     increase  in  cash provided  by  financing  activities  resulted  from  a
     $100,647,000  net increase  in cash inflows  from  deposit accounts.  The
     level of cash and cash equivalents was  $44,631,000 at September 30, 1998
     as compared to $32,374,000 at September 30, 1997.

     Evergreen Bank, N.A. is the principal source of funds to the Company and, 
     if it cannot pay dividends to the Company, the  Company will be unable to 
     pay dividends to its shareholders.

     YEAR 2000 READINESS
     -------------------
     In 1997, the Company's senior management began a comprehensive project to
     identify its readiness,  and that of  vendors and  banking customers, for
     continued computer processing  after January 1, 2000. Evergreen's Project
     Team has been comprised of personnel throughout  the banking organization
     to assure compliance within  each area  of the organization.  Evergreen's
     principal  banking  regulator,  the  Office  of the  Comptroller  of  the
     Currency, has established a process for its supervised financial institu-
     tions to deal with  issues surrounding  the Year 2000 problem,  which the
     Company  has  followed. Those phases  are: Awareness, Assessment, Renova-
     tion, Validation and Implementation.

     Through the quarter ended September 30, 1998, the Company  has identified
     all mission critical systems to assure continued processing of all activ-
     ities within the  organization.  Each of these systems  has either passed
     Year 2000 testing, or will be tested before March 31, 1999. All equipment
     with embedded chips  has been  identified, listed and  has been Year 2000
     tested.  These include items  from elevators to time clocks, to fax mach-
     ines, to timers. Electronic interfaces have been identified and tested to
     the extent possible at this juncture.

     Through September 30, 1998, the Company  had substantially  completed the
     awareness, assessment and renovation phases recommended by  the Office of
     the Comptroller of the Currency.  Validation and Implementation  has been
     completed  or will be  completed by  December 31, 1998 for  many  of  the
     Company's  mission critical  systems, with the  notable exception of  the
     Company's  core processing  systems  managed  by a  third party provider,
     Alltel Information Systems, Inc. ("Alltel"). In connection with the plan-
     ned merger with  Banknorth, the Company withheld the validation and final
     implementation  of a Year 2000  compliant system with Alltel  because, if
     the merger  is consummated  on schedule, Evergreen  would convert  to the
                                        
                                        15

                            EVERGREEN BANCORP, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (Continued)

     Alltel systems utilized by Banknorth, ones that are or are expected to be
     Year 2000 compliant, by January 15, 1999.

     Evergreen has substantially completed  all phases for its non-information
     technology systems, and believes that its readiness is complete.

     As to contingency plans  for its mission critical information  technology
     systems, Evergreen has  entered into  written agreements  with Alltel and
     other of its' third party providers to complete  the Implementation phase
     of  conversion by  March 31, 1999,  if for any reason  the merger  is not
     consummated. The Company  has  reviewed  its' contingency  plans with the
     Office of the Comptroller of the Currency.

     The risk to the Company is the failure, malfunction or shut-down of soft-
     ware or equipment  on the  first business day  in the Year 2000.  As with
     other financial institutions, the Company is highly dependent on informa-
     tion technology  for the  conduct  of its' general banking business. Some
     computer software, hardware, equipment with embedded processes; including
     core processing systems may be unable to process transactions due to date
     limits within their software.  In addition, the Company is subject to the
     risk that  its commercial  loan  customers  may sustain  interruptions in
     their operations due to Year 2000 problems, and ultimately  be unable  to
     repay their indebtedness to Evergreen as scheduled.

     Certain of the  risk factors  associated with Year 2000 are not under the
     control  of the Company. The readiness of key suppliers, vendors, service
     providers,  the Federal Reserve  infrastructure, customer  and  liquidity
     funding  sources, and its'  credit  customers  all  have risk  factors of
     various degrees.

     Those  borrowers and depositors  with  material  relationships  have been
     identified, and although there is no  single customer  that would  have a
     material impact  on  the Company's  operating results or financial condi-
     tion, an exceptional accumulation of customers  with unexpected Year 2000
     problems could have  a material  adverse impact  on the Company. For this
     reason, the Company has contacted all substantial borrowing customers and
     established loan review procedures  to assure  that these businesses will
     be  Year 2000  compliant  or that  any potential  interruption  to  their
     business  would not  significantly affect  their ability  to repay  their
     indebtedness on schedule. Through third quarter ended September 30, 1998,
     the company's  internal  commercial loan review  has indicated that there
     are  no significant  customers  without a  Year 2000 plan  that is in the
     process of being implemented.

     The identification  of all mission  critical  systems  and their  testing
     review and upgrades, if necessary, coupled with extensive surveys of its'
     commercial loan  customers, reduce  the risk to  the Company's  Year 2000
     problem. Further, the Company believes that its' substantial  capital and
     liquidity positions will enable it to sustain  some impact from Year 2000
     if  significant problems  are incurred  by the  Company's commercial loan
     customers.


                                        16

                            EVERGREEN BANCORP, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (Continued)

     The Company has expended funds in fiscal year 1998 and would expect to do
     so again in fiscal year 1999 to repair, upgrade or replace its' software,
     hardware or other embedded processors deemed not ready for Year 2000. The
     expenditures  through  September 30,  1998, the  most  recently completed
     fiscal  period, totals  approximately  $600,000.  If the Company does not
     consummate the  merger  with Banknorth for any reason, additional expend-
     itures  in fiscal 1999  would total approximately $400,000,  primarily to
     complete the conversion of its core processing system with Alltel.  These
     amounts  have been  and will be  included  in the  operating and  capital
     budgets of the Company.

     The Company  has established  business resumption plans  for each of its'
     mission critical  systems.  These plans  provide assurance  of continued
                                        
     operation of any one system or systems should they fail in the Year 2000.
     The business resumption plans, or workarounds, for systems  that fail on
     the first business day or thereafter in the Year 2000 will provide cont-
     inued support for mission critical systems.

     RATE VOLUME ANALYSIS
     --------------------  
     For the purposes of the following analysis, Securities Available for Sale 
     are  stated  at  average  amortized  cost  and  Stockholders'  Equity  is 
     unadjusted for the effects of SFAS No. 115.

     Non-accrual  loans are included in the following analysis and the average 
     balance of these loans is deemed immaterial.

     Portions  of income earned  on certain  Commercial Loans, U.S. Government 
     Obligations  and  Obligations  of State  and  Political  Subdivisions are 
     exempt from Federal and/or State taxation.  Appropriate  adjustments have  
     been made to reflect the equivalent  amount of taxable income  that would 
     have been necessary to generate an equal amount of after tax income.  The 
     taxable  equivalent adjustment  is based on a marginal Federal income tax 
     rate of 35.0%  in 1998 and 1997  along with a  marginal State  income tax 
     rate of 9.0% for 1998 and 1997.

     The following table sets forth the dollar amounts of interest  income (on  
     a taxable  equivalent  basis) and interest  expense  and  changes therein  
     resulting from  changes in  volume and  changes in  rate.  The change  in 
     interest due to both rate and volume has been allocated to change  due to 
     volume  and change  due to rate  based on the  percentage relationship of 
     such variances to each other.









                                         
                                        17
                                         
                             EVERGREEN BANCORP, INC.                        
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)
                              (Dollars in Thousands)

     Analysis of Variance in Net Interest Income Due to Volume and Rates

                            
                                        For the three months ended           
                                 September 30, 1998  vs. September 30, 1997
                                        
                                     Increase / (Decrease)      Total
                                       Due to Change in        Increase/
                                       Volume       Rate      (Decrease)
                                     ---------------------    ----------
     Interest Earned:
     Loans 
       Taxable                       $   351      $  (532)     $  (181)    
       Tax-Exempt                         48          (42)           6  
     Investment Securities    
       Taxable                         1,047         (400)         647 
       Tax-Exempt                        (31)           1          (30) 
     Federal Funds Sold &                                                     
     Interest-Bearing Deposits           (37)           1          (36)
                                      ------       ------       ------ 
     Changes in Total Interest 
     Income                            1,378         (972)         406  
                                      ------       ------       ------ 
     Less Interest Expense Incurred:
     Regular Savings, Interest 
       Checking and MMDAs                190          (90)         100     
     Time Deposits                       556           21          577  
     Short-Term Borrowings                64           (7)          57    
     Long Term Debt                       (7)          (2)          (9) 

     Changes in Total Interest        ------       ------       ------
     Expense                             803          (78)         725  
                                      ------       ------       ------ 
     Changes in Net Interest 
     Income                          $   575      $  (894)     $  (319)
                                      ======       ======       ======
                                       
                            


                                 
                                










                                        18
                                         
                             EVERGREEN BANCORP, INC.                        
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)
                              (Dollars in Thousands)

     Analysis of Variance in Net Interest Income Due to Volume and Rates


                                        For the nine months ended           
                                 September 30, 1998  vs. September 30, 1997
                                   
                                    Increase / (Decrease)       Total
                                      Due to Change in         Increase/
                                      Volume      Rate        (Decrease)
                                   ----------------------     ----------
     Interest Earned:
     Loans and Leases
          Taxable                    $ 1,204     $(1,084)      $   120     
          Tax-Exempt                     169         (43)          126  
     Investment Securities    
          Taxable                      3,730        (607)        3,123  
          Tax-Exempt                      30         (26)            4 
     Federal Funds Sold &                                                    
     Interest-Bearing Deposits          (506)         16          (490)     
                                      ------      ------        ------
     Changes in Total Interest 
     Income                            4,627      (1,744)        2,883  
                                      ------      ------        ------        
     Less Interest Expense Incurred:
     Regular Savings, Interest 
       Checking and MMDAs                326        (295)           31       
     Time Deposits                     2,318         245         2,563  
     Short-Term Borrowings               198         (12)          186    
     Long Term Debt                      (22)         20            (2) 
                                      ------      ------        ------
     Changes in Total Interest 
     Expense                           2,820         (42)        2,778  
                                      ------      ------        ------
     Changes in Net Interest 
     Income                          $ 1,807     $(1,702)      $   105 
                                      ======      ======        ======
















                                        19
                                         
                            EVERGREEN BANCORP, INC. 
                MANAGEMENT'S DISCUSSION AND ANALYSIS - Continued
        Average Balances For The Three Months Ended September 30, 1998
                            (Dollars in Thousands)

                                                  Interest      Average     
                                    Average        Income/       Yield/   
                                    Balance        Expense        Rate  
     Assets:                        -------        -------      -------
     Loans 
       Taxable                   $  664,839        $14,421        8.61%     
       Tax Exempt                    15,605            272        6.92%
     Securities                                         
       Taxable                      315,100          4,965        6.25%     
       Tax Exempt                     9,283            196        8.38%
     Federal Funds Sold &                                                 
       Interest Bearing Deposits     14,170            199        5.57%     
                                  ---------        -------   
     Total Earning Assets         1,018,997         20,053        7.81%
                                                   -------        -----
     Allowance for Loan                      
       Losses                       (12,542)                         
     Cash and Due from Banks         25,299                
     Other Non-Earning Assets        36,867                     
                                  ---------
          Total Assets           $1,068,621                     
                                  =========  
     Liabilities and
     Stockholders' Equity:
     Regular Savings, Interest
       Checking and MMDAs        $  371,579          2,490        2.66%
     Time Deposits                  449,124          6,400        5.65%     
     Short-Term Borrowings           11,924            136        4.53%
     Long Term Debt                  25,348            411        6.43%     
                                  ---------        -------    
     Total Interest                                           
       Bearing Liabilities          857,975          9,437        4.36%
                                                   -------        -----
     Demand Deposits                103,791                     
     Other Liabilities               19,591                
     Stockholders' Equity            87,264                     
     Total Liabilities and        ---------
       Stockholders' Equity      $1,068,621                
                                  =========
     Net Interest Income (Tax                
       Equivalent Basis)                            10,616             
     Tax Equivalent Adjustment                        (141)            
                                                   -------
     Net Interest Income                           $10,475             
                                                   =======        
     Net Interest Rate Spread                                     3.45%
                                                                  =====
     Net Interest Margin                                          4.13%
                                                                  =====




                                        20
                                         
                            EVERGREEN BANCORP, INC. 
                MANAGEMENT'S DISCUSSION AND ANALYSIS - Continued
         Average Balances For The Three Months Ended September 30, 1997
                            (Dollars in Thousands)

                                                  Interest     Average     
                                    Average       Income/       Yield/   
                                    Balance       Expense        Rate  
     Assets:                        -------       --------      -------
     Loans 
       Taxable                   $  649,007        $14,602        8.93%     
       Tax Exempt                    13,025            266        8.10%
     Securities                                         
       Taxable                      250,189          4,318        6.85%     
       Tax Exempt                    10,747            226        8.34%
     Federal Funds Sold &                                                 
       Interest Bearing Deposits     16,790            235        5.55%     
                                   --------        -------   
     Total Earning Assets           939,758         19,647        8.29%
                                                   -------        -----
     Allowance for Loan                      
       Losses                       (12,801)                         
     Cash and Due from Banks         23,958                
     Other Non-Earning Assets        35,488                     
                                   --------
          Total Assets           $  986,403                     
                                   ========  
     Liabilities and
     Stockholders' Equity:
     Regular Savings, Interest
       Checking and MMDAs        $  343,508          2,390        2.76%
     Time Deposits                  410,132          5,823        5.63%     
     Short-Term Borrowings            6,369             79        4.92%
     Long Term Debt                  25,800            420        6.46%     
                                   --------        -------    
     Total Interest                                           
       Bearing Liabilities          785,809          8,712        4.40%
                                                   -------        -----
     Demand Deposits                 98,595                     
     Other Liabilities               15,800                
     Stockholders' Equity            86,199                     
     Total Liabilities and         --------
       Stockholders' Equity      $  986,403                
                                   ========
     Net Interest Income (Tax                
       Equivalent Basis)                            10,935             
     Tax Equivalent Adjustment                        (143)            
                                                   -------
     Net Interest Income                           $10,792             
                                                   =======        
     Net Interest Rate Spread                                     3.89%
                                                                  =====
     Net Interest Margin                                          4.62%
                                                                  =====




                                        21
                                         
                            EVERGREEN BANCORP, INC. 
                MANAGEMENT'S DISCUSSION AND ANALYSIS - Continued
         Average Balances For The Nine Months Ended September 30, 1998
                            (Dollars in Thousands)

                                                 Interest     Average     
                                    Average      Income/       Yield/   
                                    Balance      Expense        Rate  
     Assets:                        -------      -------      -------
     Loans 
       Taxable                   $  663,105      $43,479        8.77%     
       Tax Exempt                    15,503          846        7.30%
     Securities 
       Taxable                      301,053       14,623        6.49%     
       Tax Exempt                     9,630          600        8.33%
     Federal Funds Sold &     
       Interest Bearing Deposits     14,158          588        5.55%     
                                  ---------      -------   
     Total Earning Assets         1,003,449       60,136        8.01%
                                                 -------        -----
     Allowance for Loan                      
       Losses                       (12,956)                         
     Cash and Due from Banks         23,586                
     Other Non-Earning Assets        35,926                     
                                  ---------
          Total Assets           $1,050,005                     
                                  =========  
     Liabilities and
     Stockholders' Equity:
     Regular Savings, Interest
       Checking and MMDAs        $  361,538        7,261        2.69%
     Time Deposits                  450,104       19,119        5.68%     
     Short-Term Borrowings           10,706          378        4.72%
     Long Term Debt                  25,419        1,230        6.47%     
                                  ---------      -------    
     Total Interest
       Bearing Liabilities          847,767       27,988        4.41%
                                                 -------        -----
     Demand Deposits                 97,382                     
     Other Liabilities               18,283                
     Stockholders' Equity            86,573
     Total Liabilities and        ---------
       Stockholders' Equity      $1,050,005                
                                  =========
     Net Interest Income (Tax                
       Equivalent Basis)                          32,148             
     Tax Equivalent Adjustment                      (433)            
                                                 -------
     Net Interest Income                         $31,715             
                                                 =======        
     Net Interest Rate Spread                                   3.60%     
                                                                =====
     Net Interest Margin                                        4.28%
                                                                =====




                                        22
                                        
                            EVERGREEN BANCORP, INC. 
                MANAGEMENT'S DISCUSSION AND ANALYSIS - Continued
         Average Balances For The Nine Months Ended September 30, 1997
                            (Dollars in Thousands)

                                                 Interest     Average     
                                    Average      Income/       Yield/   
                                    Balance      Expense        Rate  
     Assets:                        -------      -------      -------
     Loans 
       Taxable                   $  644,960      $43,359        8.99%     
       Tax Exempt                    12,433          720        7.74%
     Securities 
       Taxable                      224,796       11,500        6.84%     
       Tax Exempt                     9,160          596        8.70%
     Federal Funds Sold &     
       Interest Bearing Deposits     26,338        1,078        5.47%     
                                   --------      -------   
     Total Earning Assets           917,687       57,253        8.34%
                                                 -------        -----
     Allowance for Loan                      
       Losses                       (12,732)                         
     Cash and Due from Banks         25,869                
     Other Non-Earning Assets        34,075                     
                                   --------
          Total Assets           $  964,899                     
                                   ========  
     Liabilities and
     Stockholders' Equity:
     Regular Savings, Interest
       Checking and MMDAs        $  345,611        7,230        2.80%
     Time Deposits                  395,461       16,556        5.60%     
     Short-Term Borrowings            5,105          192        5.03%
     Long Term Debt                  25,883        1,232        6.36%     
                                   --------      -------    
     Total Interest
       Bearing Liabilities          772,060       25,210        4.37%
                                                 -------        -----
     Demand Deposits                 92,841                     
     Other Liabilities               14,209                
     Stockholders' Equity            85,789
     Total Liabilities and         --------
       Stockholders' Equity      $  964,899                
                                   ========
     Net Interest Income (Tax                
       Equivalent Basis)                          32,043             
     Tax Equivalent Adjustment                      (388)            
                                                 -------
     Net Interest Income                         $31,655             
                                                 =======        
     Net Interest Rate Spread                                   3.97%     
                                                                =====
     Net Interest Margin                                        4.67%
                                                                =====




                                        23



     Part II. Other Information

     Item 6. Exhibits and Reports on Form 8-K

         (a) Exhibits
                                     
            (27) Financial Data Schedule

         (b) Reports on 8-K

             Current Report  on Form 8-K  filed August 10, 1998  (reporting
             Item 5, Other Events, announcement of an Agreement of Merger).











































                                        
                                        24



             

                                  Signatures
                                  ----------

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



                                   EVERGREEN BANCORP, INC.

     


      November 13, 1998                   /s/ George W. Dougan                 
      -----------------                   --------------------
           Date                             George W. Dougan     
                                   President & Chief Executive Officer
                                     (Principal Executive Officer)



      November 13, 1998                  /s/ George L. Fredette                
      -----------------                  ----------------------
           Date                            George L. Fredette     
                                    Executive Vice President, Treasurer
                                        (Chief Financial Officer)






















                       



                                        
                                        25