US SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.   20549


                                   FORM 10-Q


[X]           QUARTERLY REPORT PURSUANT  TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March, 31, 2000

                                       OR

[ ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                        THE SECURITIES EXCHANGE ACT OF 1934
                 FOR TRANSITION PERIOD FROM_______TO_________

                          Commission file number 0-25286

                           CASCADE FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

                 Delaware                           91-1661954
   (State or other jurisdiction of                (IRS Employer
    incorporation or organization)              Identification No.)

             2828 Colby Avenue
            Everett, Washington                        98201
   (Address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code: (425) 339-5500

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

       Class                         Outstanding as of March 31, 2000
       -----                         --------------------------------
 Common Stock ($.01 par value)                    5,526,662

<PAGE>




                       CASCADE FINANCIAL CORPORATION

                                 FORM 10-Q
                   for the Quarter Ended March 31, 2000

                                  INDEX


PART I   Financial Information:

   Item 1   Financial Statements:

     --Condensed Consolidated Balance Sheets. . . . . . . . . . .3

     --Condensed Consolidated Statements of Operations. . . . . .4

     --Condensed Consolidated Statements of Cash Flows. . . . . .5

     --Notes to Consolidated Financial Statements . . . . . . . .8

   Item 2   Management's Discussion and Analysis of Financial
     Condition and Results of Operations. . . . . . . . . . . . .9

PART II   Other Information.  . . . . . . . . . . . . . . . . . 16

<PAGE>




                      PART I -- FINANCIAL INFORMATION
                      -------------------------------
               CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                          (dollars in thousands)
                               (unaudited)

                                                          March 31,  June 30,
                                                          ---------  --------
ASSETS                                                      2000       1999
-------                                                     ----       ----
                                                        (unaudited)
Cash on hand and in banks                               $  12,060      9,804
Interest-earning deposits in other institutions               225        350
Securities available for sale                              72,654     72,719
Loans available for sale                                    8,963     22,428
Mortgage-backed securities held to maturity (market value
   of $7,436 and $1,699)                                    8,095      1,738
Loans, net                                                525,184    433,308
Premises and equipment, at cost, net                        9,274      9,433
Accrued interest receivable and other assets                9,190      7,306
                                                        --------------------
   TOTAL ASSETS                                         $ 645,645    557,086
                                                        ====================

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Deposits $                                                428,391    361,786
Federal Home Loan Bank advances                           155,372    141,996
Securities sold under agreements to repurchase              6,917      5,951
Trust Preferred Securities                                 10,310         --
Advance payments by borrowers for taxes and insurance       1,470      1,947
Accrued expenses and other liabilities                      5,954     10,743
Deferred income tax                                           538        424
                                                        --------------------
   TOTAL LIABILITIES                                      608,952    522,847

Preferred stock, $.01 par value, 500,000 shares authorized;
   no shares issued or outstanding
Common stock, $.01 par value,
  8,000,000 shares authorized;
  5,526,662 and  5,430,155 shares issued and outstanding       55         55
Additional paid-in capital                                  5,034      4,790
Retained earnings, substantially restricted                33,983     31,150
Cumulative comprehensive income, net                       (2,379)    (1,756)
                                                        --------------------
   TOTAL STOCKHOLDERS' EQUITY                              36,693     34,239
                                                        --------------------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $ 645,645    557,086
                                                        ====================

               See notes to consolidated financial statements

                                    3

<PAGE>



               CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             (dollars in thousands, except per share amounts)
                                (unaudited)

                                      Three Months Ended    Nine Months Ended
                                      ------------------    -----------------
                                           March 31,             March 31,
                                           ---------             ---------
                                         2000     1999        2000     1999
                                         ----     ----        ----     ----
Interest income:
   Loans                             $ 11,000      8,723     31,631     25,735
   Mortgage-backed securities held-
     to-maturity                          138         29        176        120
   Securities available for sale          423        650      1,251      1,538
   FHLB stock dividends                   149        111        460        325
      Interest-earning deposits           676         99      1,938        227
                                     -----------------------------------------
      Total interest income            12,386      9,612     35,456     27,945
Interest expense:
   Deposits                             5,517      4,122     14,814     12,179
   Borrowings                           2,202      1,276      6,619      3,858
                                     -----------------------------------------
      Total interest expense            7,719      5,398     21,433     16,037
Net interest income                     4,667      4,214     14,023     11,908
   Provision for loan losses              210        127        560        427
                                     -----------------------------------------
Net interest income after provision
  for loan losses                       4,457      4,087     13,463     11,481
Other income:
   Gain on sale of loans                   87        212        324        671
   Gain on sale of servicing rights                  583         35        583
   Service charges                        464        304      1,103        805
   Gain on sale of securities
     available-for-sale                                                     17
   Net gain on sale of real estate owned               2                    41
   Other                                   45         47        150        157
                                     -----------------------------------------
      Total other income                  596      1,148      1,612      2,274
Other expenses:
   Salaries and employee benefits       2,076      1,720      5,907      4,536
   Occupancy                              683        625      2,109      1,551
   Advertising                            152        114        390        332

   Data processing                         61         36        210        312

   Other                                  803        716      2,168      2,058
                                     -----------------------------------------
      Total other expenses              3,775      3,211     10,784      8,789
                                     -----------------------------------------
      Income before income taxes        1,278      2,024      4,291      4,966

   Federal income taxes                   433        691      1,456      1,691
                                     -----------------------------------------
      Net income                     $    845      1,333      2,835      3,275
                                     =========================================
Earnings per share:
    Basic                              $ 0.15       0.25       0.52       0.61
    Diluted                              0.14       0.23       0.48       0.55

Weighted average number of shares
  outstanding:
    Basic                           5,505,334  5,414,603  5,482,125  5,387,792

    Diluted                         5,918,994  5,920,200  5,942,004  5,905,624


                See notes to consolidated financial statements

                                    4

<PAGE>




              CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
            CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                       (dollars in thousands)
                            (unaudited)

                                      Three Months Ended    Nine Months Ended
                                      ------------------    -----------------
                                           March 31,             March 31,
                                           ---------             ---------
                                         2000     1999        2000     1999
                                         ----     ----        ----     ----
Net Income                             $  845   $ 1,333     $ 2,835   $ 3,275
Increase (decrease) in unrealized
    Gains (losses) on securities
    available for sale, net of tax
    of $(24) and $(15) for the
    three months ended March 31,
    and $(321) and  $(17) for the
    nine months ended March 31.           (47)      (31)       (623)      (34)
                                       --------------------------------------
Comprehensive Income                   $  798     1,302      $2,212    $3,241
                                       ======================================

                                     5

<PAGE>



                     CASCADE FINANCIAL CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (dollars in thousands)
                              (unaudited)

                                                  Nine Months Ended March 31,
                                                  --------------------------
                                                      2000            1999
                                                      ----            ----
Cash flows from operating activities:
 Net income                                       $    2,835          3,275
                                                  -------------------------
  Adjustments to reconcile net income to net
   cash provided by (used in) operating
   activities:
     Depreciation and amortization of premises
       and equipment                                   1,040            639
     Provision for losses on:
       Loans                                             630            427
       Mortgage servicing rights                         (33)           187
     Net increase in mortgage servicing rights             6            969
     Deferred loan fees, net of amortization             324           (105)
     Net change in loans available for sale           13,465        (12,226)
     Net loss on sales of:
       Securities available for sale                      --            (17)
       Premises and equipment                             --             (1)
       Real estate owned                                  --            (41)
       Mortgage servicing rights                          --           (583)
     Federal Home Loan Bank stock dividend received     (460)          (325)
     Deferred Federal Income Taxes                       435             --

     Net change in accrued interest receivable and
       other assets over accrued expenses and other
       liabilities                                    (5,529)            63
                                                  -------------------------
     Net cash provided by operating activities        12,713         (7,738)

Cash flows from investing activities:
  Loans originated, net of principal repayments      (93,896)       (30,100)
  Purchases of mortgage-backed securities
   held-to-maturity                                   (6,820)          (291)
  Principal repayments on securities held-to maturity    462          3,137
  Principal repayments on securities
   available-for-sale                                  3,604          5,276
  Purchases of securities available for sale          (4,022)       (56,003)
  Proceeds from sales of securities available
   for sale                                               --          6,016
  Proceeds from sales of real estate owned                --            478
  Purchases of premises and equipment                   (881)        (1,294)
  Additions to real estate owned                         (54)            --
                                                  -------------------------
    Net cash (used in) investing
     activities                                     (101,607)       (72,781)

Subtotal, carried forward                            (88,894)       (80,519)
                                                  -------------------------
                See notes to consolidated financial statements

                                      6

<PAGE>



                    CASCADE FINANCIAL CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   (dollars in thousands, unaudited)


                                                  Nine Months Ended March 31,
                                                  --------------------------
                                                      2000            1999
                                                      ----            ----

Subtotal, brought forward                        $ (88,894)        (80,519)
                                                 --------------------------
Cash flows from financing activities:
  Proceeds from issuance of common stock               245             289
  Net increase in deposits                          66,605          46,360
  Net increase in Federal Home Loan Bank advances   13,376          40,470
  Net increase (decrease) in securities sold
     under agreements to repurchase                    966          (6,977)
  Proceeds from Trust Preferred Offering            10,310
  Net increase (decrease) in advance payments
     by borrowers for taxes and insurance             (477)          1,472
                                                 --------------------------
  Net cash provided by financing
   activities                                       91,025          81,614
                                                 --------------------------
  Net increase in cash and cash equivalents          2,131           1,095
Cash and cash equivalents at beginning of period    10,153          11,967
                                                 --------------------------
Cash and cash equivalents at end of period       $  14,265          13,062
                                                 ==========================
Supplemental disclosures of cash flow information
  cash paid during the period for:
   Interest                                      $  21,038          15,997
   Federal income taxes                              1,150           1,788
                                                 --------------------------
Supplemental schedule of non-cash investing
 activities:
   Mortgage loans securitized into mortgage backed
     securities and held-for-trading and sold        8,814          18,092
   Mortgage loans securitized into mortgage backed
     securities and held-for-investment                 --              --
   Net mortgage loans transferred to real estate
     owned                                           1,067             363
   Funds due on sales of mortgage servicing rights      --           1,320

            See notes to consolidated financial statements.

                                  7

<PAGE>



             CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            March 31, 2000
                              (unaudited)

1.   Presentation of Financial Information

     The accompanying financial information is unaudited and has been prepared
from the books and records of Cascade Financial Corporation, (the
"Corporation").  The Corporation's sole subsidiary is Cascade Bank, ("Cascade"
or the "Bank").  In the opinion of management, the financial information
reflects all adjustments (consisting of normal recurring accruals) necessary
for a fair presentation of the financial condition, results of operations, and
cash flows in conformity with generally accepted accounting principles.

     Certain information and footnote disclosures included in the
Corporation's financial statements for the year ended June 30, 1999, have been
condensed or omitted from this report.  Accordingly, these statements should
be read with the financial statements and notes thereto included in the
Corporation's 1999 Annual Report, incorporated by reference, on Form 10-K.

2.   Commitments and Contingencies

     In the normal course of business there are various commitments to fund
mortgage loans. Management does not anticipate any material loss as a result
of these commitments.

     Periodically, there have been various claims and lawsuits against the
Corporation or the Bank, such as claims to enforce liens, condemnation
proceedings on properties in which the Bank holds security interests, claims
involving the making and servicing of real property loans and other issues
incidental to the Corporation's and the Bank's business.  In the opinion of
management, no significant loss is expected from any such pending lawsuits.

3.   Financial Statement Reclassification

     Certain amounts in the financial statements for fiscal 1999 have been
reclassified to conform with the financial statement classification for fiscal
2000.

4.   New Accounting Pronouncements

     SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", was issued in June 1998 and establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities.  SFAS No. 133 is effective for all quarters of fiscal
years beginning after June 15, 2000.  Management is reviewing this statement
and does not expect that application of this statement will have a material
effect on the results of operations or the financial position of the
Corporation.



                                  8

<PAGE>



      In March 2000, the SEC issued Staff Accounting Bulletin No. 101A (SAB
101A).  SAB 101 provides guidance on revenue recognition and the SEC staff's
views on the application of accounting principles to selected revenue
recognition issues.  The Corporation will adopt the provisions of SAB 101 in
the second quarter of 2000 and anticipates that such adoptions will not have a
material impact on the Corporation's consolidated financial statements.

      In March 2000, the Financial Accounting Standards Board issued
Interpretation No. 44, "Accounting for Certain Transactions involving Stock
Compensation."  Interpretation No. 44 clarifies the application of Accounting
Principles Board Opinion No. 25 ("APB 25") and is effective July 1, 2000.
Interpretation No. 44 clarifies the definition of "employee" for purposes of
applying APB 25, the criteria for determining whether a plan qualifies as a
noncompensatory plan, the accounting consequence of various modifications to
the terms of a previously fixed stock option or award, and the accounting for
an exchange of stock compensation awards in a business combination.  The
Corporation does not expect the adoption of Interpretation No. 44 to have a
material impact on its consolidated financial statements.

Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations

      This section contains forward-looking statements that have been prepared
on the basis on the Corporation's best judgments and currently available
information.  These forward-looking statements are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are beyond the control of the Corporation.  In
addition, these forward-looking statements are subject to assumptions with
respect to future business strategies and decisions that are subject to
changes.  Accordingly, there can be no assurance that many of these strategies
will be implemented, or if implemented, achieve the amounts described or
within the time periods currently estimated.

                                     9

<PAGE>




Selected Financial Data

     The following table sets forth certain selected financial data concerning
the Corporation for the periods indicated (dollars in thousands):

                                        At or for the          At or for the
                                      three months ended     Nine months ended
                                           March 31,              March 31,
                                        --------------         --------------
                                         2000     1999          2000     1999
                                        -----    -----         -----    -----
Return on average assets                 0.54%    1.05          0.62     0.91
Return on average stockholders' equity   9.33    15.56         10.68    13.20
Average stockholders' equity to assets   5.83     6.94          6.05     7.29
General and administrative expenses
  to average assets                      2.40     2.55          2.37     2.45
Efficiency ratio                        73.32    61.33         71.54    63.96
Net interest spread                      2.79     3.21          2.95     3.14
Net interest margin                      3.05     3.52          3.19     3.48
Average interest-bearing assets to
 average interest-bearing liabilities  105.03   106.76        104.97   107.21

                    CHANGES IN FINANCIAL CONDITION

     Total assets increased to $645.6 million at March 31, 2000, compared with
$557.1 million at June 30, 1999.  Loans, net (held to maturity) increased
21.2% or $ 91.9 million to $525.1 million and securities held to maturity
increased to $8.1 million from $1.7 million for the same periods.  Funding
this growth was a $66.6 million or 18.4% increase in deposits, a decrease in
loans available for sale, net of $13.5 million, a $13.4 million increase in
Federal Home Loan Bank Advances, and a $10.3 million issue of Trust Preferred
Securities.

Asset Quality

     Non-performing assets totaled $1.7 million and $1.2 million at March 31,
2000 and June 30, 1999, respectively.  Assets classified as substandard
totaled $4.8 million at March 31, 2000, and $2.1 million at June 30, 1999.
The increases in non-performing assets resulted from several foreclosures. The
increases to substandard assets related primarily to a one million dollar
increase in real estate owned through foreclosure and $1.5 million in business
loans that were slightly delinquent due to cash flow problems. The following
table provides summary information concerning asset quality, (dollars in
thousands).

                                                       At March 31,
                                                      2000     1999
                                                     ------   ------
Non-performing loans to total assets                   0.11%    0.19%
Non-performing loans to total loans outstanding        0.13     0.23
Non-performing assets to total assets                  0.26     0.20
Allowance for loan losses to non-performing loans    670.66   444.69
Allowance for loan losses to total loans outstanding   0.91     1.00

                                     10

<PAGE>



                       RESULTS OF OPERATIONS

    Comparison of the Three and Nine months Ended March 31, 2000 and 1999

General

     Net income for the three months ended March 31, 2000, was $845 thousand
compared with $1.3 million in 1999.  Diluted net income per share was $0.14
for the quarter ended March 31, 2000 and $0.23 per share for the quarter ended
March 31, 1999.  The principal reason for the decrease in the recent three
months was a decrease in gains on the sale of residential mortgage loans and
servicing rights of $708,000.  Net income for the nine months ended March 31,
2000, was $2.8 million compared with $3.3 million in 1999. Diluted net income
per share was $0.48 and $0.55 for the nine months ended March 31, 2000 and
1999. The principal reasons for the decrease in the nine months income were
increases in non-interest expense related to the opening of three new branches
and a decrease in mortgage banking revenue.

Net Interest Income

     Net interest income increased 10.7% or $453,000 to $4.7 million for the
three months ended March 31, 2000 compared to the $4.2 million for the three
months ended March 31, 1999.  Net interest income increased 17.7% or $2.1
million to $14.0 million for the nine months ended March 31, 2000 compared
with the $11.9 million for the nine months ended March 31, 1999. The principal
reason for the increase in net interest income was an increase in average
interest earning assets of 30.4% or  $138.8 million to $595.6 for the quarter
ended March  31, 2000 and 25.8% or $117.6 million for the nine months ended
March 31, 2000 as compared to the same periods in 1999.  Average total loans
(including loans held for sale)  increased 24.8% or $102.6 million and average
securities increased  79.4% or $34.2 million during the most recent quarter as
compared with the same quarter in 1999.  Average total loans increased 22.4%
or $90.6 million and average securities increased 87.4% or $36.0 million
during the nine months ended March 31, 2000 compared to the nine months ended
March 31, 2000.

                                       three months ended  nine months ended
                                            March 31,           March 31,
                                        2000      1999       2000      1999
                                       ------    ------     ------    ------
Average interest earning assets      $610,098   478,730    586,094   456,404
Average interest bearing liabilities  580,865   448,416    558,324   425,692
Yield on interest earning assets         8.14%     8.09%      8.05%     8.16%
Cost of interest bearing liabilities     5.35%     4.88%      5.10%     5.02%
  Net interest spread                    2.79%     3.21%      2.95%     3.14%
  Net interest margin                    3.12%     3.52%      3.28%     3.48%

     The net interest margin decreased 40 basis points to 3.12% for the most
recent quarter and 20 basis points to 3.28% for the nine month ended March 31,
2000. This decrease was principally the result of an increase in the cost of
interest bearing liabilities of 47 basis points in the recent three month
period and an increase of eight basis points in the nine month period.
Additionally,the yield on interest earning assets were up five basis points
for the three month period, but down eleven basis points for the nine month
period.  The decreased margin has resulted from continuing competition in the
local market for both loans and deposits, and generally higher market interest
rates.

     Cascade is focusing on adding commercial businesses, nonconforming
one-to-four family loans, multi-family loans, home equity lines of credit, and
one-to-four family construction loans to its portfolio.  Nonconforming loans
generally include loans where the borrower has a debt level or other financial
consideration that makes the loan unsaleable to government agencies such as
FHLMC and FNMA.

                                  11

<PAGE>



Management believes these products provide the best returns for Cascade and
can be underwritten conservatively to ensure low delinquency, absent
unforeseen changes in local or national economic conditions.  Additionally,
these loan types are typically variable rate loans and are not effected as
much by refinance activity as conforming fixed rate loans.  This should help
to lower Cascade's overall origination and servicing costs in the future.
Commercial business, income property, and construction loans outstanding
increased by $76.5 million since June 30, 1999.  These loans represented 58.1%
of total outstanding loans at March 31, 2000, compared to 52.2% at June 30,
1999, and 48.5% at March 31, 1999.

Provision for Loan Losses

     Cascade's provision for loan losses was $210,000 for the three months
ended March 31, 2000, as compared with $127,000 for the 1999 period.
Provisions were $560,000 and $427,000 for the respective nine months.  At
March 31, 2000, and June 30, 1999, the Bank's loan loss allowance totaled $4.7
million and $4.3 million, respectively, and the loan loss allowance as a
percent of total loans outstanding was 0.91% and 0.93%, respectively.
Nonperforming loans, (loans on nonaccrual and ninety days past due) decreased
to $726,000 at March 31, 2000, as compared to $1.2 million at June 30, 1999.
Substandard loans were $4.8 million and  $2.1 million at March 31, 2000 and
June 30, 1999, respectively.

     The provision for loan losses reflects management's quarterly evaluation
of the adequacy of the allowance for losses on loans.  In determining
adequacy, management considers changes in the size and composition of the loan
portfolio, actual loan loss experience, current and anticipated economic
conditions and other factors.  Management intends to grow the commercial,
nonconforming, construction and income property portfolios.  These loans
typically have a higher credit risk that will require additions to the reserve
in future periods.  Management monitors these loans at an increased level to
maintain credit quality and adequate reserve levels.

Non-Interest Income

     Non-interest income decreased $552,000 or 48.1% to $596,000 for the three
months ended March 31, 2000 as compared to the three months ended March 31,
1999.  For the nine months ended March 31, 2000, non-interest income decreased
$662,000 or 29.2% to $1.6 million as compared with the nine months ended March
31, 1999.  These decreases were principally the result of decreased gains on
sale of loans of $125,000 and $347,000 for the three and nine month periods,
respectively and a $583,000 gain from the sale of mortgage servicing rights in
March of 1999.  With increasing interest rates, residential mortgage
origination and sale activity, especially refinancings have significantly
decreased.  These decreases were offset by increases in service charges of
$160,000 and $304,000 for the same periods.  Service charge income has
increased due to higher levels of consumer transaction deposits and additional
fee income from automated teller machine fees.

Non-interest Expense

     Non-interest expense increased 17.6% to $3.7 million for the three months
ended March 31, 2000 compared with $3.2 million for the three months ended
March 31, 1999.  This increase is due primarily to increases in salaries and
benefits of $356,000 and occupancy of $58,000. For the nine month period ended
March 31, 2000 non-interest expense totaled $10.8 million, a 23.0% or $2.0
million increase from the March 31, 1999 period.  For the nine month period,
salaries and benefits increased $1.4 million, and occupancy increased
$558,000.  The opening of three new branches, maintenance of our
mortgage-banking operation, and additional support staff for our increased
product and service offerings were responsible for the increased expenses
described above for both the three and nine month periods.

Segment Results

     The following is a summary of selected operating segment information for
the three and nine months ended March 31, 2000 and 1999.  The Corporation
manages its operations and prepares

                                     12

<PAGE>



management reports with a primary focus on its various business units.  The
accounting policies of the individual units are the same as those of the
Corporation.  The Corporation allocates centrally provided services to the
business units based upon estimated usage of those services.  All amounts are
in thousands.




<TABLE>

                                                   For the three months ended March 31, 2000
                             Business  Residential  Construction  Property  Consumer  Treasury  Total
                            --------------------------------------------------------------------------
<S>                             <C>      <C>            <C>        <C>        <C>       <C>     <C>
Condensed Income Statement
Net Interest after
 provision for loan losses       $976    1,235          469         1,144      304      329     4,457
Other Income                       13      169            0             1      301      112       596
Direct Expense                    231      717           91             1      612       66     1,718
Allocated Overhead                244      678          141           540      192      262     2,057
                            --------------------------------------------------------------------------
Income before Income Tax          514        9          237           604     (199)     113     1,278
Federal Income Taxes              175        2           81           203      (67)      39       433
                            --------------------------------------------------------------------------
Net Income                        339        7          156           401     (132)      74       845
                            --------------------------------------------------------------------------

</TABLE>

<TABLE>
                                                  For the three months ended March 31, 1999
                             Business  Residential  Construction  Property  Consumer  Treasury  Total
                            --------------------------------------------------------------------------
<S>                             <C>      <C>            <C>        <C>        <C>       <C>     <C>
Condensed Income Statement
  Net Interest after
  provision for loan losses     $673     1,668          294          939       371      142     4,087
Other Income                     -35       721            0           -9       167      304     1,148
Direct expense                   168       273           70           56       688       83     1,338
Allocated Overhead               151       805          184          337       167      229     1,873
                            --------------------------------------------------------------------------
Income before Income Tax         319     1,311           40          537      -317      134     2,024
Federal Income Taxes             110       459           13          180      -108       37       691
                            --------------------------------------------------------------------------
Net Income                       209       852           27          357      (209)      97     1,333
                            --------------------------------------------------------------------------

</TABLE>

<TABLE>
                                                  For the nine months ended March 31, 2000
                                                                                      Admin-
                                                                   Income            istration
                             Business  Residential  Construction  Property  Consumer  Treasury  Total
                            --------------------------------------------------------------------------
<S>                             <C>      <C>            <C>        <C>        <C>       <C>     <C>

Condensed Income Statement
  Net Interest after
  provision for loan losses     $2,860   3,618          1,393       3,567     1,237      788     13,463
Other Income                        31     498              0           5       736      342      1,612
Direct Expense                     679   2,177            134          76     1,620      195      4,881
Allocated Overhead                 704   1,975            412       1,558       539      715      5,903
                            ----------------------------------------------------------------------------
Income before Income Tax         1,508     (36)           847       1,938      -186      220      4,291
Federal Income Taxes               513     (13)           288         655       -63       76      1,456
                            ----------------------------------------------------------------------------
Net Income                         995     (23)           559       1,283      (123)     144      2,835
                            ----------------------------------------------------------------------------

</TABLE>
                                                      13
<PAGE>



<TABLE>
                                                    For the nine months ended March 31, 1999
                                                                                      Admin-
                                                                   Income            istration
                             Business  Residential  Construction  Property  Consumer  Treasury  Total
                            --------------------------------------------------------------------------
<S>                             <C>      <C>            <C>        <C>        <C>       <C>     <C>
Condensed Income Statement
  Net Interest after
  provision for loan losses     $2,054   4,033           1,006      2,530     1,344      514    11,481
Other Income                        22   1,339               0          0       529      384     2,274
Direct expense                     606   1,613              76         89     1,321      133     3,838
Allocated Overhead                 403   2,144             490        898       444      572     4,951
                            ----------------------------------------------------------------------------
Income before Income Tax         1,067   1,615             440      1,543       108      193     4,966
Federal Income Taxes               364     563             149        522        37       56     1,691
                            ----------------------------------------------------------------------------
Net Income                         703   1,052             291      1,021        71      137     3,275
                            ----------------------------------------------------------------------------

</TABLE>




Liquidity and Sources of Funds

     Cascade maintains liquidity balances in FHLB deposits and short-term
securities at levels in accordance with regulatory guidelines.  The Bank held
average liquid assets of $23.8 million in March 2000, which were in excess of
the required liquidity level of $18.6 million.

     Loan commitments outstanding at March 31, 2000 were $12.9 million and
will be funded through sales of loans, existing liquidity balances,
FHLB-Seattle advances, and other borrowings.  Outstanding commitments to sell
loans totaled $4.2 million at March 31, 2000.

     At March 31, 2000, the Bank had an unused line of credit from the
FHLB-Seattle of approximately $71 million. The Bank's credit line with the
FHLB-Seattle is 35% of total assets or up to approximately $226 million.  The
Bank also had $6.9 million of reverse repurchase agreements outstanding.

Capital Resources

     On March 1, 2000 Cascade Financial issued ten million par value Trust
Preferred Securities.  These securities are considered core capital for the
purposes of regulatory capital requirements.

     Cascade Bank is in full compliance with all capital requirements
established by the Office of Thrift Supervision ("OTS") at March 31, 2000.
Cascade's regulatory capital requirements and related excess capital amounts
as of March 31, 2000 are presented in the following table:

   Core capital                     Amount      Percentage
   ------------                     ------      ----------
   Tier 1 (Core) capital          $ 48,132         7.46%
   Less:  Minimum requirement       25,803         4.00
                                  --------        -----
   Excess                         $ 22,329         3.46%
                                  ========        =====

   Tier 1 Risked-Based  capital     Amount      Percentage
   ----------------------------     ------      ----------
   Tier 1  capital                $ 48,132        11.00
   Less:  Minimum requirement       17,504         4.00
                                  --------        -----
   Excess                         $ 30,628         7.00%
                                  ========        =====

   Risk-based capital               Amount      Percentage
   ------------------               ------      ----------
   Risk-based capital             $ 52,541        12.01%
   Less: Minimum requirement(1)     35,009         8.00
                                  --------        -----
   Excess                         $ 17,532         4.01%
                                  ========        =====
   (1)  Based on risk-weighted assets.

                                     14

<PAGE>




    The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") was signed into law on December 19, 1991.  Among other things, the
FDICIA provides the OTS, effective December 19, 1992, with broad powers to
take "prompt corrective action" to resolve problems of insured depository
institutions.  The actions the OTS can take depend upon whether the
institution in question is "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized."  The OTS has advised the Corporation that at March 31,
2000, Cascade Bank is a "well capitalized" institution.

     The OTS issued a final rule on December 1, 1998, that provides
comprehensive guidance to management and examiners covering among other
things, interest rate risk, investment securities, and the use of financial
derivatives.  The guidance provides guidelines for examiners to use in
evaluating the effectiveness of a financial institution's risk management
practices and identifies a set of "sound practices" management should consider
to improve their own risk management practices.  The rule describes the
qualitative and quantitative guidelines examiners will use to rate an
institution's exposure to interest rate risk.     Management does not believe
the rule will materially adversely the current business strategy.

      On November 2, 1999, the Federal Deposit Insurance Corporation (FDIC)
published a notice indicating it is recommending higher capital requirements
for insured banks and savings associations engaged in subprime lending.   In
the release, the FDIC does not define subprime loans as all loans underwritten
using nonconventional credit standards. Loans with a community development
purpose are not considered subprime loans. Affordable housing loans, for
example, often are underwritten using nonconventional underwriting standards,
but are done in a safe and sound manner. Subprime loans  are in contrast often
made without regard to the underlying credit risk of the borrower, but are
made based on the underlying collateral only.  At this time it is impossible
to assess the impact of this proposal in its current form.

     Item 3   Quantitative and Qualitative Disclosures about Market Risk

                      ASSET/LIABILITY MANAGEMENT

     Cascade, like other financial institutions, is subject to fluctuations in
interest rates because its interest-bearing liabilities reprice on different
terms than its interest-earning assets.  During periods of interest rate
declines this position has a generally favorable impact on net interest
income, while increases in interest rates have a generally adverse impact on
net interest income.

     Cascade uses a simulation model to measure its interest rate risk and the
effects on net interest income resulting from changes in market interest
rates.  Based on this model (which includes a number of significant
assumptions and estimates), a 200-basis point increase in general interest
rates would reduce Cascade's annual net interest income by approximately two
percent at December 31, 1999.  Cascade manages interest rate risk by retaining
in its portfolio permanent and construction adjustable rate loans with
repricing periods that generally do not exceed seven years.  Principally all
new fifteen and thirty year fixed rate loans are sold.  Cascade extends the
maturity of its liabilities by offering deposit products to long-term, less
rate sensitive customers, and by periodically obtaining longer term Federal
Home Loan Bank-Seattle ("FHLB") advances.  Cascade has also used interest rate
swap and interest rate cap and floor agreements for interest rate risk
management purposes.

     Cascade uses mandatory and optional forward commitments from investment
banking firms to mitigate the interest rate risk from its mortgage banking
operation.

                                    15

<PAGE>




                    PART II-OTHER INFORMATION

Item 1.  Legal Proceedings.
---------------------------
     The Corporation and the Bank have certain litigation and negotiations in
progress resulting from activities arising from normal operations.  In the
opinion of management, none of these matters is likely to have a materially
adverse effect on the Corporation's financial position.

Item 2.  Changes in Securities.
-------------------------------
     Not applicable

Item 3.  Defaults upon Senior Securities.
-----------------------------------------
     Not applicable

Item 4.  Submission of Matters to a Vote of Security Holders.
-------------------------------------------------------------
     Not applicable

Item 5.  Other information.
---------------------------
     Not applicable

Item 6.  Exhibits and Reports on Form 8-K.
------------------------------------------
     Not applicable


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

                                  CASCADE FINANCIAL CORPORATION


        May 15, 2000              /s/  Lars H. Johnson
                                  ------------------------------------
                                  By: Lars H. Johnson,
                                      Executive Vice President
                                      (Chief Financial Officer)

                                16

<PAGE>




                                 Exhibit 27
                           Financial Data Schedule

This schedule contains financial information extracted from the consolidated
financial statements of Cascade Financial Corporation for the nine months
ended March 31, 2000 and is qualified in its entirety by reference to such
financial statements.

                 Financial Data
              As of or for the year
Item Number   ended March 31, 2000   Item Description
               ($ in thousands)
9-03 (1)           12,060            Cash and due from Banks
9-03 (2)              225            Interest-bearing deposits
9-03 (3)              ___            Federal funds sold - purchased securities
                                        for resale
9-03 (4)              ___            Trading account assets
9-03 (6)           56,450            Investment and mortgage backed securities
                                        held for sale
9-03 (6)           24,299            Investment and mortgage backed securities
                                        held to maturity - carrying value
9-03 (6)            7,436            Investment and mortgage backed securities
                                        held to maturity - market value
9-03 (7)          525,184            Loans, net
9-03 (7)(2)         4,869            Allowance for losses
9-03 (11)         645,645            Total assets
9-03 (12)         428,391            Deposits
9-03 (13)          72,382            Short-term borrowings
9-03 (15)           7,962            Other liabilities
9-03 (16)         100,217            Long-term debt
9-03 (19)             ___            Preferred stock - mandatory redemption
9-03 (20)             ___            Preferred stock - no mandatory redemption
9-03 (21)              55            Common stock
9-03 (22)          36,638            Other stockholders' equity
9-03 (23)         645,645            Total liabilities and stockholders'
                                        equity
9-04 (1)           11,000            Interest and fees on loans
9-04 (2)              710            Interest and dividends on investments
9-04 (4)               99            Other interest income
9-04 (5)           12,386            Total interest income
9-04 (6)            5,517            Interest on deposits
9-04 (9)            7,719            Total interest expense
9-04 (10)           4,667            Net interest income
9-04 (11)             210            Provision for loan losses
9-04 (13)(h)          ___            Investment securities gains/(losses)
9-04 (14)           3,775            Other expenses
9-04 (15)           1,278            Income/loss before income tax
9-04 (17)           1,278            Income/loss before extraordinary items
9-04 (18)             ___            Extraordinary items, less tax
9-04 (19)             ___            Cumulative change in accounting
                                        principles
9-04 (20)             845            Net income or loss
9-04 (21)            0.31            Earnings per share - primary
9-04 (21)            0.28            Earnings per share - fully diluted
I.B. 5               8.05            Net yield - interest earning assets -
                                        actual
III.C.1. (a)          726            Loans on non-accrual
III.C.1. (b)           39            Accruing loans past due 90 days or more
III.C.2. (c)          ___            Troubled debt restructuring
III.C.2             2,100            Potential problem loans
IV.A.1              4,254            Allowance for loan loss - beginning of
                                        period
IV.A.2                 71              Total chargeoffs
IV.A.3                126              Total recoveries
IV.A.4              4,869              Allowance for loan loss - end of period
IV.B.1              4,869              Loan loss allowance allocated to
                                          domestic loans
IV.B.2                ___              Loan loss allowance allocated to
                                          foreign loans
IV.B.3                ___              Loan loss allowance - unallocated


                                17

<PAGE>