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|CONTACT: | Ralph K. Holliday, President/Chief Executive Officer or James A. Salisbury, Executive Vice President/Treasurer and Chief FinancialOfficer, both of WesterFed Financial Corporation (WSTR) | 
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|         | (406) 721-5254                                                                                                                                                                            | 

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|                                                                                                                                                                                    | December 31, 2000 | December 31, 1999
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | -----------------
|**ASSETS**                                                                                                                                                                          |                   |                  
|Cash and due from banks                                                                                                                                                             | $17,400           | $20,233          
|Interest-bearing due from banks                                                                                                                                                     | 2,545             | 5,910            
|Cash and cash equivalents                                                                                                                                                           | 19,945            | 26,143           
|Interest-bearing deposits                                                                                                                                                           | 100               | 100              
|Investment securities available-for-sale                                                                                                                                            | 140,945           | 187,488          
|Investment securities, at amortized cost (estimated fair value      of $71,204 at December 31, 2000 and $87,121 at December 31, 1999)                                               | 69,665            | 86,877           
|Stock in Federal Home Loan Bank of Seattle, at cost                                                                                                                                 | 13,062            | 15,154           
|Loans available-for-sale                                                                                                                                                            | 3,041             | 4,470            
|Loans receivable, net                                                                                                                                                               | 623,931           | 616,281          
|Interest receivable                                                                                                                                                                 | 6,629             | 7,492            
|Premises and equipment, net                                                                                                                                                         | 25,110            | 27,477           
|Core deposit intangible                                                                                                                                                             | 2,821             | 3,401            
|Goodwill                                                                                                                                                                            | 14,097            | 14,763           
|Cash surrender value of life insurance policies                                                                                                                                     | 8,562             | 8,164            
|Other assets                                                                                                                                                                        | 2,069             | 3,075            
|Total assets                                                                                                                                                                        | $929,977          | $1,000,885       
|                                                                                                                                                                                    |                   |                  
|**LIABILITIES AND STOCKHOLDERS' EQUITY**                                                                                                                                            |                   |                  
|Liabilities:                                                                                                                                                                        |                   |                  
|Deposits                                                                                                                                                                            | $606,100          | $658,404         
|Repurchase agreements                                                                                                                                                               | 9,032             | 7,731            
|Borrowed funds                                                                                                                                                                      | 198,571           | 227,078          
|Advances from borrowers for taxes and insurance                                                                                                                                     | 2,863             | 3,296            
|Income taxes - current and deferred                                                                                                                                                 | 1,696             | 597              
|Accrued interest payable                                                                                                                                                            | 8,293             | 6,476            
|Accrued expenses and other liabilities                                                                                                                                              | 8,720             | 7,778            
|Total liabilities                                                                                                                                                                   | 835,275           | 911,360          
|Stockholders' Equity:                                                                                                                                                               |                   |                  
|Preferred stock, $.01 par value, 5,000,000 shares authorized;            none outstanding                                                                                           | --                | --               
|Common stock, $.01 par value, 10,000,000 shares authorized;            4,116,373 shares outstanding at December 31,
2000, and            4,351,404 outstanding at December 31, 1999 | 57                | 56               
|Paid-in capital                                                                                                                                                                     | 71,115            | 70,040           
|Common stock acquired by ESOP/RRP                                                                                                                                                   | (1,825)           | (2,090)          
|Treasury stock, at cost                                                                                                                                                             | (33,537)          | (28,974)         
|Accumulated other comprehensive income (loss)                                                                                                                                       | 170               | (2,930)          
|Retained earnings                                                                                                                                                                   | 58,722            | 53,423           
|Total stockholders' equity                                                                                                                                                          | 94,702            | 89,525           
|Total liabilities and stockholders' equity                                                                                                                                          | $929,977          | $1,000,885       
|                                                                                                                                                                                    |                   |                  
|Book value per common share outstanding                                                                                                                                             | $23.01            | $20.57           
|Tangible book value per common share outstanding                                                                                                                                    | $18.90            | $16.40           

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|                                                         | Three Months EndedDecember 31, | Twelve Months EndedDecember 31,
|-------------------------------------------------------- | ------------------------------ | -------------------------------
|                                                         | 2000                           | 1999                           
|Interest income:                                         |                                |                                
|Loans receivable                                         | $13,446                        | $13,030                        
|Investment securities                                    | 3,934                          | 4,665                          
|Interest-bearing deposits                                | 51                             | 76                             
|Other                                                    | 113                            | 90                             
|Total interest income                                    | 17,544                         | 17,861                         
|Interest expense:                                        |                                |                                
|NOW and money market demand                              | 1,053                          | 1,012                          
|Savings                                                  | 473                            | 552                            
|Certificates of deposit                                  | 5,146                          | 4,764                          
|                                                         | 6,672                          | 6,328                          
|Borrowed funds and repurchase agreements                 | 3,346                          | 3,406                          
|Total interest expense                                   | 10,018                         | 9,734                          
|Net interest income                                      | 7,526                          | 8,127                          
|Provision for loan losses                                | 450                            | 435                            
|Net interest income after provision for loan losses      | 7,076                          | 7,692                          
|Non-interest income:                                     |                                |                                
|Loan origination income                                  | 375                            | 446                            
|Service fees                                             | 1,263                          | 1,251                          
|Net gain on sale of loans available-for-sale             | 122                            | 120                            
|Net gain (loss) on sale of securities available-for-sale | 2                              | 9                              
|Net gain on sale of branches                             | --                             | --                             
|Other                                                    | 79                             | 22                             
|Total non-interest income                                | 1,841                          | 1,848                          
|Non-interest expenses:                                   |                                |                                
|Compensation and employee benefits                       | 2,899                          | 3,018                          
|Net occupancy expense of premises                        | 406                            | 381                            
|Equipment and furnishings                                | 405                            | 484                            
|Data processing                                          | 392                            | 412                            
|Deposit insurance premium                                | 31                             | 86                             
|Intangibles amortization                                 | 306                            | 337                            
|Marketing and advertising                                | 165                            | 295                            
|Other                                                    | 1,310                          | 1,365                          
|Total non-interest expense                               | 5,914                          | 6,378                          
|Income before income taxes                               | 3,003                          | 3,162                          
|Income taxes                                             | 1,165                          | 1,195                          
|Net income                                               | $1,838                         | $1,967                         
|Net income per common share:                             |                                |                                
|Basic                                                    | $0.46                          | $0.47                          
|Diluted                                                  | $0.44                          | $0.45                          
|Dividends per share                                      | $0.25                          | $0.16                          
|Dividend payout ratio - basic                            | 54.35%                         | 34.04%                         
|Average common and common equivalent shares outstanding: |                                |                                
|Basic                                                    | 3,957,972                      | 4,227,313                      
|Diluted                                                  | 4,160,088                      | 4,400,922                      

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|                                                                                            | Three Months Ended
December 31, | Twelve Months Ended
December 31,
|------------------------------------------------------------------------------------------- | ------------------------------- | --------------------------------
|                                                                                            | 2000                            | 1999                            
|Performance Ratios:                                                                         |                                 |                                 
|Return on assets (ratio of net income to average total assets) (1)                          | 0.79%                           | 0.78%                           
|Return on equity (ratio of net income to average equity) (1)                                | 7.82                            | 8.70                            
|                                                                                            |                                 |                                 
|Interest rate spread information:                                                           |                                 |                                 
|Average during period                                                                       | 3.15                            | 3.32                            
|End of period                                                                               | 3.08                            | 3.10                            
|Net interest margin (1) (4)                                                                 | 3.46                            | 3.50                            
|Ratio of non-interest expense to average total assets (1)                                   | 2.54                            | 2.54                            
|Efficiency ratio (2)                                                                        | 63.14                           | 63.94                           
|Efficiency ratio without intangibles (3)                                                    | 59.87                           | 60.57                           
|                                                                                            |                                 |                                 
|Asset Quality Ratios:                                                                       |                                 |                                 
|Non-performing assets to total assets, at end of period                                     | 0.46                            | 0.31                            
|Total allowance for loan losses to total non-performing assets (5)                          | 152.04                          | 165.36                          
|                                                                                            |                                 |                                 
|Capital Ratios:                                                                             |                                 |                                 
|Stockholders' equity to total assets, at end of period                                      | 10.18                           | 8.94                            
|Tangible stockholders' equity to tangible assets, at end of period                          | 8.52                            | 7.26                            
|Ratio of average interest-earning assets to            average interest-bearing liabilities | 106.93                          | 104.16                          

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|                                                                         | Three Months Ended            | Twelve Months Ended   
|------------------------------------------------------------------------ | ----------------------------- | ----------------------
|                                                                         | DECEMBER 31, 2000             | DECEMBER 31, 1999     
|                                                                         | AverageOutstandingBalance (1) | InterestEarned/Paid   
|                                                                         | (Dollars in Thousands)        | (Dollars in Thousands)
|**INTEREST EARNING ASSETS:**                                             |                               |                       
|Loans receivable (2) (3)                                                 | $630,275                      | $13,446               
|Investment securities                                                    | 226,998                       | 3,934                 
|Other interest-earning assets (4)                                        | 3,231                         | 51                    
|Cash surrender value of life insurance                                   | 8,530                         | 113                   
|Total Interest-Earning Assets                                            | $869,034                      | $17,544               
|**INTEREST-BEARING LIABILITIES:**                                        |                              
|Certificates of deposits                                                 | $334,380                      | $5,146                
|Savings accounts                                                         | 72,509                        | 473                   
|Demand and NOW accounts                                                  | 116,729                       | 191                   
|Money market accounts                                                    | 79,459                        | 862                   
|Total deposits                                                           | 603,077                       | 6,672                 
|FHLB advances and other borrowed money                                   | 209,603                       | 3,346                 
|Total Interest-Bearing Liabilities                                       | $812,680                      | $10,018               
|Net interest income                                                      |                               | $7,526                
|Net interest rate spread                                                 |                               |                       
|Net interest earning assets                                              | $56,354                       |                       
|Net interest margin (5)                                                  |                               |                       
|Average interest-earning assets  to average interest-bearing liabilities |                               | 106.93%               

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|                                           | December 31, 2000 | December 31, 1999
|------------------------------------------ | ----------------- | -----------------
|                                           | (In Thousands)   
|Non-accruing loans:                        |                   |                  
|Real Estate:                               |                   |                  
|One-to-four family                         | $1,742            | $549             
|Multi-family                               | -                 | -                
|Nonresidential property (except land)      | 125               | 348              
|Land                                       | 322               | -                
|Construction                               | -                 | 324              
|Agriculture (non-real estate)              | 1,086             | 1,113            
|Commercial (non-real estate)               | 37                | 51               
|Consumer                                   | 709               | 508              
|Total                                      | 4,021             | 2,893            
|                                           |                   |                  
|Accruing loans delinquent 90 days or more: |                   |                  
|Real Estate:                               |                   |                  
|One-to-four family                         | -                 | 40               
|Multi-family                               | -                 | -                
|Nonresidential property (except land)      | -                 | -                
|Construction                               | -                 | -                
|Agriculture (non-real estate)              | -                 | -                
|Commercial (non-real estate)               | -                 | -                
|Consumer                                   | -                 | 20               
|Total                                      | -                 | 60               
|                                           |                   |                  
|Foreclosed assets:                         |                   |                  
|Real Estate:                               |                   |                  
|One-to-four family                         | 197               | 94               
|Multi-family                               | -                 | -                
|Commercial                                 | -                 | -                
|Land                                       | -                 | 26               
|Construction                               | -                 | -                
|Consumer                                   | 94                | 48               
|Total                                      | 291               | 168              
|Total non-performing assets                | $4,312            | $3,121           

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|                                                                                                        | For the Three MonthPeriod EndedDecember 31, | For the Twelve MonthPeriod EndedDecember 31,
|------------------------------------------------------------------------------------------------------- | ------------------------------------------- | --------------------------------------------
|                                                                                                        | 2000                                        | 1999                                        
|                                                                                                        | (In Thousands)                              | (In Thousands)                              
|Balance at beginning of period                                                                          | $6,225                                      | $5,300                                      
|Charge-Offs:                                                                                            |                                             |                                             
|Real Estate:                                                                                            |                                             |                                             
|One- to four-family                                                                                     | --                                          | (23)                                        
|Commercial                                                                                              | --                                          | --                                          
|Other:                                                                                                  |                                             |                                             
|Commercial                                                                                              | (3)                                         | (116)                                       
|Consumer                                                                                                | (149)                                       | (587)                                       
|Total charge-offs                                                                                       | (152)                                       | (726)                                       
|                                                                                                        |                                             |                                             
|Recoveries:                                                                                             |                                             |                                             
|Real Estate:                                                                                            |                                             |                                             
|One- to four-family                                                                                     | --                                          | --                                          
|Commercial                                                                                              | --                                          | --                                          
|Other:                                                                                                  |                                             |                                             
|Commercial                                                                                              | 5                                           | 2                                           
|Consumer                                                                                                | 28                                          | 150                                         
|Total recoveries                                                                                        | 33                                          | 152                                         
|Net charge-offs                                                                                         | (119)                                       | (574)                                       
|Provisions charged to operations                                                                        | 450                                         | 435                                         
|Balance at end of period                                                                                | $6,556                                      | $5,161                                      
|Ratio of net charge-offs during the period      to average loans outstanding during      the period     | 0.02%                                       | 0.09%                                       
|Ratio of net charge-offs during the period      to average non-performing assets during      the period | 1.84%                                       | 6.21%                                       
|Ratio of allowance for loan losses to      net loans before allowance                                   | 1.03%                                       | 0.82%