SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A

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

         For the Fiscal Year Ended March 31, 2001

                               OR

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

                         Commission File Number: 0-22435


                               FIRSTBANK NW CORP.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                    Washington                               84-1389562
---------------------------------------------           ---------------------
(State or other jurisdiction of incorporation             (I.R.S. Employer
or organization)                                              I.D. Number)

920 Main Street, Lewiston, Idaho                                83501
-------------------------------------------------               -----
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code:         (208) 746-9610
                                                        ---------------------
Securities registered pursuant to
Section 12(b) of the Act:                                          None
                                                                ---------

Securities registered pursuant to                       Common Stock, par value
Section 12(g) of the Act:                                   $.01 per share
                                                        ------------------------
                                                            (Title of Class)

         Check whether the Registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 [ ]

         Check if there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B contained herein, and no disclosure will be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendments to this Form 10-KSB. [X]

         The Registrant's revenues for the year ended March 31, 2001 were $23.3
million.

         The aggregate market value of voting stock held by nonaffiliates of the
Registrant was $16,316,468 based on the last reported sale price of the common
stock of the Registrant on the Nasdaq National Market on August 8, 2001. For
purposes of this disclosure, shares of common stock held by persons who hold
more than 5% of the outstanding common stock and by officers and directors of
the Registrant have been excluded in that such persons may be deemed to be
affiliates of the Registrant.

         As of August 8, 2001, there were 1,505,792 shares outstanding of the
Registrant's common stock.

         Transitional Small Business Disclosure format (check one):
         Yes  [ ]     NO [X]

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

<PAGE>

                                     PART II

Item 7.  Financial Statements
-----------------------------

                       FirstBank NW Corp. and Subsidiaries

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Certified Public Accountants...........................F-2
Consolidated Statements of Financial Condition........................F-3 to F-4
Consolidated Statements of Income............................................F-5
Consolidated Statements of Comprehensive Income..............................F-6
Consolidated Statements of Changes in Stockholders' Equity...................F-7
Consolidated Statements of Cash Flows.................................F-8 to F-9
Summary of Accounting Policies......................................F-10 to F-15
Notes to Consolidated Financial Statements .........................F-16 to F-33




<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors and Stockholders
FirstBank NW Corp. and Subsidiaries

We have audited the accompanying consolidated statements of financial condition
of FirstBank NW Corp. and Subsidiaries as of March 31, 2001 and 2000, and the
related consolidated statements of income, comprehensive income, changes in
stockholders' equity and cash flows for the years then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
FirstBank NW Corp. and Subsidiaries as of March 31, 2001 and 2000 and the
consolidated results of their operations and their cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.



April 20, 2001


                                       F-2

<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


                                     ASSETS
<TABLE>
<CAPTION>

                                                                                 March 31,       March 31,
                                                                                   2001            2000
                                                                              -------------  -------------
<S>                                                                               <C>            <C>
Cash and cash equivalents (Note 15):
     Non-interest bearing cash deposits....................................   $   8,013,411  $   8,276,507
     Interest bearing deposits .............................................      1,166,117      2,972,839
     Federal funds sold ....................................................      3,625,320      1,246,594
                                                                              -------------  -------------

         Total cash and cash equivalents ...................................     12,804,848     12,495,940

Investment securities (Notes 1 and 15):
     Available-for-sale ....................................................     12,568,249     11,334,647
Mortgage-backed securities (Notes 2 and 15):
     Held-to-maturity ......................................................      2,335,433      2,483,979
     Available-for-sale ....................................................     17,703,893     18,741,250
Loans receivable, net (Notes 3, 9, 14 and 15) ..............................    219,150,826    187,664,159
Accrued interest receivable (Note 4) .......................................      2,301,830      1,866,404
Stock in FHLB, at cost (Notes 14 and 15) ...................................      5,031,875      3,965,175
Premises and equipment, net (Note 5) .......................................      5,988,987      6,212,726
Income taxes receivable ....................................................        124,512        148,636
Cash surrender value of life insurance policies (Notes 10 and 15) ..........      1,744,457      1,663,671
Other assets ...............................................................      1,307,373      1,321,036
                                                                              -------------  -------------

Total Assets...............................................................   $ 281,062,283  $ 247,897,623
                                                                              =============  =============
</TABLE>


               See accompanying summary of accounting policies and
                   notes to consolidated financial statements.

                                       F-3
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                                 March 31,         March 31,
                                                                                   2001              2000
                                                                               -------------    -------------
<S>                                                                            <C>              <C>
Liabilities:
     Deposits (Notes 6 and 15).............................................    $ 157,797,123    $ 144,906,948
     Advances from borrowers for taxes and insurance .......................       1,400,630        1,369,888
     Advances from FHLB and other borrowers (Notes 14 and 15) ..............      90,917,023       74,578,106
     Deferred income taxes (Note 7) ........................................         772,000           37,000
     Accrued expenses and other liabilities (Note 10) ......................       2,199,164        1,139,218
                                                                               -------------    -------------

         Total liabilities .................................................     253,085,940      222,031,160
                                                                               -------------    -------------

Commitments and contingencies (Notes 3, 10, 11, 14, 16 and 17)

Stockholders' equity (Notes 8, 11, 12 and 16):
   Preferred stock, $.01 par value, 500,000 shares authorized, no shares
    issued or outstanding ..................................................               -                -
   Common stock, $.01 par value, 5,000,000 shares authorized, 1,983,750
    shares issued, 1,441,515 and 1,495,159 shares outstanding
                                                                                      19,838           19,838
   Additional paid-in capital ..............................................      18,809,135       18,782,732
   Unearned ESOP shares (Note 11) ..........................................      (1,053,130)      (1,219,800)
   Deferred compensation (Note 12) .........................................        (629,381)        (865,742)
   Retained earnings, substantially restricted (Notes 8 and 16) ............      16,376,831       15,044,540
   Accumulated other comprehensive income (loss) ...........................         600,332         (548,073)
   Treasury stock, at cost, 436,797 and 367,673 shares .....................      (6,147,282)      (5,347,032)
                                                                               -------------    -------------

         Total stockholders' equity ........................................      27,976,343       25,866,463
                                                                               -------------    -------------

Total Liabilities and Stockholders' Equity .................................   $ 281,062,283    $ 247,897,623
                                                                               =============    =============
</TABLE>


               See accompanying summary of accounting policies and
                   notes to consolidated financial statements.

                                       F-4

<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>


                                                                           Year Ended March 31,
                                                                     --------------------------------
                                                                         2001                2000
                                                                     ------------        ------------
<S>                                                                     <C>                 <C>
Interest income:
     Loans receivable ...................................            $ 18,025,403        $ 14,948,348
     Mortgage-backed securities .........................               1,439,289             981,047
     Investment securities ..............................                 613,730             461,088
     Other interest earning assets ......................                 678,322             588,027
                                                                     ------------        ------------
         Total interest income ..........................              20,756,744          16,978,510
                                                                     ------------        ------------
Interest expense:
     Deposits (Note 6) ..................................               6,008,923           5,381,182
     Advances from FHLB and other borrowings ............               5,607,930           3,055,373
                                                                     ------------        ------------
         Total interest expense .........................              11,616,853           8,436,555
                                                                     ------------        ------------
Net interest income .....................................               9,139,891           8,541,955
Provision for loan losses (Note 3) ......................                (303,172)           (286,812)
                                                                     ------------        ------------
Net interest income after provision for loan losses .....               8,836,719           8,255,143
                                                                     ------------        ------------
Non-interest income:
     Gain on sale of loans ..............................                 843,274           1,051,206
     Service fees and charges ...........................               1,620,986           1,271,027
     Commissions and other ..............................                 130,094             104,238
                                                                     ------------        ------------
         Total non-interest income ......................               2,594,354           2,426,471
                                                                     ------------        ------------
Non-interest expenses:
     Compensation and related benefits (Notes 10 and 11)                5,077,370           4,674,333
     Occupancy ..........................................               1,237,018           1,132,288
     Supplies and postage ...............................                 327,721             373,046
     Data processing ....................................                 335,453             333,194
     Professional fees ..................................                 265,843             272,147
     Advertising ........................................                 248,326             212,782
     Deposit insurance premiums .........................                  30,000              65,356
     Other ..............................................               1,161,624           1,095,385
                                                                     ------------        ------------
         Total non-interest expense .....................               8,683,355           8,158,531
                                                                     ------------        ------------
Income before income tax expense ........................               2,747,718           2,523,083
Income tax expense (Note 7) .............................                 866,104             818,166
                                                                     ------------        ------------
Net income ..............................................            $  1,881,614        $  1,704,917
                                                                     ============        ============

     Basic earnings per share ...........................            $       1.34        $       1.11
                                                                     ============        ============
     Diluted earnings per share (Note 13) ...............            $       1.30        $       1.06
                                                                     ============        ============

     Weighted average common shares outstanding - basic .               1,404,935           1,535,137
                                                                     ============        ============
     Weighted average common shares outstanding - diluted               1,447,966           1,606,586
                                                                     ============        ============

</TABLE>

               See accompanying summary of accounting policies and
                   notes to consolidated financial statements.


                                       F-5
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

<TABLE>
<CAPTION>

                                                                                Year Ended March 31,
                                                                          -------------------------------
                                                                              2001                2000
                                                                          -----------         -----------
<S>                                                                       <C>                 <C>
Net income ..........................................................     $ 1,881,614         $ 1,704,917

Other comprehensive income (loss):
   Change in unrealized gain (loss) on securities available-for-sale,
     net of tax expense (benefit) of $742,906 and $(320,074) ........       1,148,405            (500,629)
                                                                          -----------         -----------

Comprehensive income ................................................     $ 3,030,019         $ 1,204,288
                                                                          ===========         ===========
</TABLE>

              See accompanying summary of accounting policies and
                   notes to consolidated financial statements.

                                       F-6
<PAGE>
<TABLE>
<CAPTION>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


                                             Common Stock             Additional       Unearned
                                       ------------------------         Paid-In            ESOP        Deferred
                                          Shares         Amount         Capital          Shares    Compensation
                                       ---------    -----------    ------------    ------------    ------------
<S>                                    <C>          <C>            <C>             <C>             <C>
Balance, April 1, 1999 ..........      1,983,750    $    19,838    $ 18,720,476    $ (1,384,070)   $ (1,108,162)
Purchase of treasury stock ......              -              -               -               -               -
Amortization of deferred
   compensation (Note 12) .......              -              -               -               -         242,420
Dividends paid ..................              -              -               -               -               -
Change in unrealized gain (loss)
    on securities available- ....              -              -               -               -               -
    for-sale, net of tax
ESOP shares released (Note 11) ..              -              -          62,256         164,270               -
Net income ......................              -              -               -               -               -
                                       ---------    -----------    ------------    ------------    ------------
Balance, March 31, 2000 .........      1,983,750         19,838      18,782,732      (1,219,800)       (865,742)
Purchase of treasury stock ......              -              -               -               -               -
Amortization of deferred
   compensation (Note 12) .......              -              -               -               -         236,361
Dividends paid ..................              -              -               -               -               -
Change in unrealized gain (loss)
   on securities available- .....              -              -               -               -               -
   for-sale, net of tax
ESOP shares released (Note 11) ..              -              -          26,403         166,670               -
Net income ......................              -              -               -               -               -
                                       ---------    -----------    ------------    ------------    ------------
Balance, March 31, 2001 .........      1,983,750    $    19,838    $ 18,809,135    $ (1,053,130)   $   (629,381)
                                      ==========    ===========    ============    ============    ============


                                        Retained    Accumulated
                                       Earnings,          Other                           Total
                                   Substantially  Comprehensive        Treasury   Stockholders'
                                      Restricted           Loss           Stock          Equity
                                    ------------    -----------    ------------  --------------
Balance, April 1, 1999 ..........   $ 13,907,562    $   (47,444)   $ (2,333,706) $   27,774,494
Purchase of treasury stock ......              -              -      (3,013,326)     (3,013,326)
Amortization of deferred
   compensation (Note 12) .......              -              -               -         242,420
Dividends paid ..................       (567,939)             -               -        (567,939)
Change in unrealized gain (loss)
    on securities available- ....              -       (500,629)              -        (500,629)
    for-sale, net of tax
ESOP shares released (Note 11) ..              -              -               -         226,526
Net income ......................      1,704,917              -               -       1,704,917
                                    ------------    -----------    ------------  --------------
Balance, March 31, 2000 .........     15,044,540       (548,073)     (5,347,032)     25,866,463
Purchase of treasury stock ......              -              -        (800,250)       (800,250)
Amortization of deferred
   compensation (Note 12) .......              -              -               -         236,361
Dividends paid ..................       (549,323)             -               -        (549,323)
Change in unrealized gain (loss)
   on securities available- .....              -      1,148,405               -       1,148,405
   for-sale, net of tax
ESOP shares released (Note 11) ..              -              -               -         193,073
Net income ......................      1,881,614              -               -       1,881,614
                                    ------------    -----------    ------------  --------------
Balance, March 31, 2001 .........   $ 16,376,831    $   600,332    $ (6,147,282)   $ 27,976,343
                                    ============    ===========    ============    ============
</TABLE>

               See accompanying summary of accounting policies and
                   notes to consolidated financial statements.

                                       F-7
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>


                                                                                 Year Ended March 31,
                                                                           ------------------------------
                                                                                 2001            2000
                                                                           -------------    -------------
<S>                                                                        <C>              <C>
Cash flows from operating activities:
   Net income ..........................................................   $   1,881,614    $   1,704,917
   Adjustments to reconcile net income to net cash provided by operating
    activities:
     Depreciation and amortization .....................................         704,015          830,239
     Provision for loan losses .........................................         303,172          286,812
     Gain on sale of loans .............................................        (843,274)      (1,051,206)
     Other losses, net .................................................         (16,602)          11,979
     Deferred income taxes .............................................          (7,906)         (16,074)
     FHLB stock dividends ..............................................        (292,300)        (224,000)
     Deferred compensation expense .....................................         311,876          284,289
     ESOP compensation expense .........................................         193,073          226,526
   Changes in assets and liabilities:
     Accrued interest receivable and other assets ......................        (348,687)        (401,333)
     Income taxes receivable (payable) .................................          24,124         (123,205)
     Accrued expenses and other liabilities ............................         984,431         (719,086)
                                                                           -------------    -------------

Net cash provided by operating activities ..............................       2,893,536          809,858
                                                                           -------------    -------------

Cash flows from investing activities:
   Purchases of mortgage-backed securities available-for-sale ..........               -      (11,746,521)
   Proceeds from maturities of mortgage-backed securities
     held-to-maturity ..................................................         142,720          260,320
   Proceeds from maturities of mortgage-backed securities
     available-for-sale ................................................       2,021,620        2,644,340
   Purchases of investment securities available-for-sale ...............        (335,000)      (5,415,243)
   Proceeds from maturities of investment securities
     held-to-maturity ..................................................               -          700,000
   Decrease in loans receivable from loans sold ........................      82,782,777       82,529,126
   Other net change in loans receivable ................................    (114,049,524)    (103,811,524)
   Purchases of FHLB stock .............................................        (774,400)      (1,239,200)
   Purchases of premises and equipment .................................        (466,127)      (1,476,297)
   Net increase in cash surrender value of life insurance policies .....         (80,786)         (77,461)
   Proceeds from disposition of assets .................................         263,831          242,360
                                                                           -------------    -------------

Net cash used in investing activities ..................................     (30,494,889)     (37,390,100)
                                                                           -------------    -------------
</TABLE>

               See accompanying summary of accounting policies and
                   notes to consolidated financial statements.

                                       F-8
<PAGE>
<TABLE>
<CAPTION>


                                                                                     Year Ended March 31,
                                                                               ------------------------------
                                                                                     2001             2000
                                                                               -------------    -------------
<S>                                                                               <C>              <C>
Cash flows from financing activities:
   Net increase in deposits ................................................      12,890,175       11,628,812
   Net increase (decrease) in advances from borrowers for taxes and
    insurance ..............................................................          30,742          (58,027)
   Advances from FHLB and other borrowers ..................................     975,908,596      870,335,252
   Repayments on advances from FHLB and other borrowers ....................    (959,569,679)    (837,784,252)
   Purchase of treasury stock ..............................................        (800,250)      (3,013,326)
   Cash dividends paid on common stock .....................................        (549,323)        (567,939)
                                                                               -------------    -------------

Net cash provided by financing activities ..................................      27,910,261       40,540,520
                                                                               -------------    -------------

Net increase in cash and cash equivalents ..................................         308,908        3,960,278

Cash and cash equivalents, beginning of year ...............................      12,495,940        8,535,662
                                                                               -------------    -------------

Cash and cash equivalents, end of year .....................................   $  12,804,848    $  12,495,940
                                                                               =============    =============

Supplemental disclosures of cash flow information: Cash paid during the year
   for:
     Interest ..............................................................   $  11,422,564    $   8,443,443
     Income taxes ..........................................................   $     849,143    $     957,122

   Non-cash investing and financing activities:
     Unrealized gain (loss) on securities available-for-sale, net of tax ...   $   1,148,405    $    (500,629)
     Loans receivable charged to the allowance for loan losses .............   $     149,393    $      43,310
     Transfer from loans receivable to real estate acquired through
       foreclosure .........................................................   $     320,182    $           -

</TABLE>

                                      F-9
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                         SUMMARY OF ACCOUNTING POLICIES


Organization and Principles of Consolidation

FirstBank NW Corp. (the Holding Company), is a Washington Corporation, organized
on March 12 , 1997 to acquire all of the capital stock of FirstBank Northwest
(the Bank) and to complete an initial public offering of Holding Company common
stock. The Holding Company is the parent company of the Bank and of Tri Star
Financial Corporation (Tri Star), which are collectively referred to as the
Company and constitute these consolidating financial statements. The Bank is a
Washington Chartered savings bank. All significant intercompany transactions and
balances are eliminated in consolidation.

Nature of Business and Concentration of Credit Risk

The Holding Company's principal business consists of the operations of the Bank
and Tri Star which operate in one business segment. The Bank's operations
consist of attracting deposits from the general public through a variety of
deposit products and investing these, together with funds from on-going
operations, in the origination of residential mortgage and commercial loans and,
to a lesser extent, construction, agricultural, consumer and other loans. The
Bank primarily grants residential loans to customers in Central and North Idaho
and Southeast Washington.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported assets and liabilities and disclosures on contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.

Material estimates that are susceptible to significant change in the near-term
relate to the determination of the allowance for loan losses. Management
believes that the allowance for loan losses is adequate. While management uses
current information to recognize losses on loans, future additions to the
allowances may be necessary based on changes in economic conditions. In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowance for loan losses. Such agencies
may require the Bank to recognize additions to the allowance based on their
judgments about information available to them at the time of the examination.

Statements of Cash Flows

For purposes of the statements of cash flows, the Company considers all cash on
hand and in banks, federal funds sold and highly liquid marketable debt
instruments with original maturities when purchased of three months or less to
be cash and cash equivalents.

                                      F-10
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                         SUMMARY OF ACCOUNTING POLICIES


Premises and Equipment

Premises and equipment, which consist of buildings, building improvements,
furniture, fixtures and office equipment are stated at cost less accumulated
depreciation. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. The estimated useful lives used to compute
depreciation range from thirty to forty years for buildings, thirty years for
building improvements, and five to ten years for furniture, fixtures and
equipment.

Income Taxes

The Company accounts for income taxes according to the provisions of Statement
of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes,"
which requires the use of the liability method of accounting for deferred income
taxes. Under SFAS No. 109, deferred income taxes are provided for temporary
differences between the financial reporting and tax basis of assets and
liabilities using the enacted tax rate expected to apply to the taxable income
of the period in which the deferred tax liability or asset is expected to be
settled or realized. Tax credits are accounted for as a reduction of income
taxes in the year in which the credit originates.

Investment and Mortgage-Backed Securities

The Company accounts for securities according to the provisions of SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." SFAS No. 115
addresses the accounting and reporting for investments in equity securities that
have readily determinable fair values and for all investments in debt
securities. Investments in securities are to be classified as either
held-to-maturity, available-for-sale or trading.

Held-to-Maturity - Investments in debt securities classified as held-to-maturity
are stated at cost, adjusted for amortization of premiums and accretion of
discounts using the effective interest method. The Company has the ability and
the intention to hold these investment and mortgage backed securities to
maturity and, accordingly, they are not adjusted for temporary declines in their
fair value.

Available-for-Sale - Investments in debt and equity securities classified as
available-for-sale are stated at fair value. Unrealized gains and losses are
recognized (net of tax effect) as a separate component of stockholders' equity.

Trading - Investments in debt and equity securities classified as trading are
stated at fair value. Realized and unrealized gains and losses for trading
securities are included in income.

Realized gains and losses on the sale of securities are determined using the
specific identification method.

                                      F-11
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                         SUMMARY OF ACCOUNTING POLICIES

Loans Receivable

Loans receivable are stated at unpaid principal balances, less the allowance for
loan losses, and less the net deferred loan origination fees and discounts.
Deferred loan origination fees and discounts are amortized over the contractual
life using the level-yield method.

The allowance for loan losses is established based on management's evaluation of
probable losses in its loan portfolio. An allowance for loss on specific
impaired loans for which collectibility may not be reasonably assured is
established based upon, among other factors, the estimated fair market values of
the underlying collateral and estimated holding and selling costs.

The Company accounts for loan impairment according to the provisions of SFAS No.
114, "Accounting by Creditors for Impairment of a Loan," and SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures," which amends SFAS No. 114. These statements define the recognition
criteria for loan impairment and the measurement methods for certain impaired
loans and loans for which terms have been modified in troubled-debt
restructurings (a restructured loan). Specifically, a loan is considered
impaired when it is probable a creditor will be unable to collect all amounts
due, including both principal and interest, according to the contractual terms
of the loan agreement. When measuring impairment, the expected future cash flows
of an impaired loan are required to be discounted at the loan's effective
interest rate. Alternatively, impairment can be measured by reference to an
observable market price, if one exists, or the fair value of the collateral for
a collateral-dependent loan. Regardless of the historical measurement method
used, SFAS No. 114 requires a creditor to measure impairment based on the fair
value of the collateral when the creditor determines foreclosure is probable.
Additionally, impairment of a restructured loan is measured by discounting the
total expected future cash flows at the loan's effective rate of interest as
stated in the original loan agreement.

The Company applies the recognition criteria of SFAS No. 114 to impaired
multi-family residential, commercial real estate, agriculture and restructured
loans. Smaller balance, homogeneous loans, including one-to-four family
residential loans and consumer loans, are collectively evaluated for impairment.
SFAS No. 118 amends SFAS No. 114 to allow a creditor to use existing methods for
recognizing interest income on impaired loans. The Company has elected to
continue to use its existing nonaccrual methods for recognizing interest on
impaired loans. Interest accruals on loans which are more than ninety days
delinquent are suspended. Suspended interest ultimately collected is credited to
interest income in the period of recovery.

Any unamortized discounts, premiums or fees on loans repaid or sold are
recognized as income in the year of repayment or sale.

Real Estate Owned

Real estate acquired in settlement of loans is initially recorded at fair value
less cost to sell at the date of foreclosure. Costs relating to development and
improvement of property are capitalized to the extent that carrying value does
not exceed estimated fair market value, less estimated cost to sell, whereas
costs relating to holding the property are charged to expense.

Valuations are periodically performed by the Company, and losses are recognized
by a charge to income if the carrying value of a property exceeds its estimated
fair value less cost to sell.

                                      F-12
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                         SUMMARY OF ACCOUNTING POLICIES

Stock in Federal Home Loan Bank

Federal law requires a member institution of the Federal Home Loan Bank (FHLB)
System to hold common stock of its district FHLB according to predetermined
formulas. No readily determinable market exists for such stock and it has no
quoted market value. Accordingly, the Company reports its investment in FHLB
stock at cost.

Employee Stock Ownership Plan

The Company sponsors an Employee Stock Ownership Plan (the ESOP). The ESOP is
accounted for in accordance with the American Institute of Certified Public
Accountants Statement of Position 93-6, "Employer's Accounting for Employee
Stock Ownership Plans." Accordingly, the shares held by the ESOP are reported as
unearned shares issued to the ESOP in the statements of financial condition. As
shares are released from collateral, compensation expense is recorded equal to
the then current market price of the shares, and the shares become outstanding
for earnings per share calculations.

Stock and cash dividends on allocated shares are recorded as a reduction of
retained earnings and paid or distributed directly to participants' accounts.
Stock and cash dividends on unallocated shares are recorded as a reduction of
debt and accrued interest.

Mortgage Servicing Rights

The Company accounts for mortgage servicing rights according to the provisions
of SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities," which amended SFAS No. 122, "Accounting for
Mortgage Servicing Rights" and SFAS No. 65, "Accounting for Certain Mortgage
Banking Activities." SFAS No. 125 requires a mortgage banking enterprise to
recognize as a separate asset, the rights to service mortgage loans regardless
of whether the servicing rights are acquired through either purchase or
origination. Additionally, the standard requires impairment analysis of mortgage
servicing rights regardless of whether purchased or originated.

The Company's mortgage servicing rights represent the unamortized cost of
originated contractual rights to service mortgages for others in exchange for a
servicing fee. Mortgage servicing rights are amortized over the period of
estimated net servicing income and are periodically adjusted for actual and
anticipated prepayments of the underlying mortgage loans.

Stock Based Compensation

SFAS No. 123, "Accounting for Stock-Based Compensation," encourages, but does
not require, companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company has chosen to account for
stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations and to furnish the pro forma disclosures
required under SFAS No. 123. Accordingly, compensation cost for stock options is
measured as the excess, if any, of the quoted market price of the Company's
stock at the date of the grant over the amount an employee must pay to acquire
the stock.

                                      F-13
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                         SUMMARY OF ACCOUNTING POLICIES

Earnings Per Share

The Company reports earnings per shares ("EPS") in accordance with SFAS No. 128,
"Earnings per Share." SFAS No. 128 establishes standards for computing and
presenting ("EPS"). Basic EPS is computed by dividing net income by the weighted
average number of common shares outstanding for the period. SFAS No. 128 also
requires presentation of EPS assuming dilution ("diluted EPS"). Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock.
ESOP shares which are unallocated and not yet committed to be released are
excluded from the weighted average shares outstanding calculation. See Note 13.

Comprehensive Income

Effective January 1, 1998, the Company adopted SFAS No. 130 "Reporting
Comprehensive Income." SFAS No. 130 established disclosure standards for
reporting comprehensive income in a full set of general-purpose financial
statements. Comprehensive income is the total of reported net income and all
other revenues, expenses, gains and losses that under generally accepted
accounting principles bypass reported net income.

Reclassifications

Certain amounts in the notes to the 2000 consolidated financial statements have
been reclassified to conform to the notes in the 2001 consolidated financial
statements. These reclassifications did not effect the basic financial
statements.

New Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS No. 133"), Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 133 requires companies
to recognize all derivative contracts as either assets or liabilities in the
balance sheet and to measure them at fair value. In June 2000, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 138 ("SFAS No. 138"), Accounting for Certain Derivative Instruments and
Certain Hedging Activities. If certain conditions are met, a derivative may be
specifically designated as a hedge, the objective of which is to match the
timing of gain or loss recognition on the hedging derivative with the
recognition of (i) the changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk or (ii) the earnings effect
of the hedged forecasted transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized as income in the period of
change. SFAS No. 133 and 138 are effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. The Company adopted SFAS No. 133 and No.
138 as of the beginning of the fiscal year 2002. It is the opinion of management
that the adoption of SFAS No. 133 and No. 138 did not have any initial material
impact on its consolidated financial statements.


In September 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 140 ("SFAS No. 140"), Accounting for
Transfers and Servicing of Financial Assets and Liabilities. SFAS No. 140
revises certain criteria promulgated in previous accounting literature (SFAS No.
125) for accounting for securitizations and other transfers of financial assets
and collateral, and requires additional disclosures concerning these activities.
The accounting requirements of SFAS No. 140

                                      F-14
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                         SUMMARY OF ACCOUNTING POLICIES

for securitizations and other transfers of financial assets are effective for
securitizations and transfers occurring on or after April 1, 2001. The
applicable disclosures are required to be adopted for the Company's year end
March 31, 2001, and accordingly, have been incorporated in these Notes to
Consolidated Financial Statements. The Company is currently evaluating the
effects of adopting the remaining provisions of SFAS No. 140 on its current
accounting policies for loan securitizations and other transfers of financial
assets. The Company believes that the impact, if any, of adopting SFAS No. 140
will be insignificant to its financial position and net income.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements ("SAB
101"). SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in the financial
statements. The Company has reviewed its existing revenue recognition practices
related to various products and services and has determined these practices are
in compliance with the recognition rules prescribed in SAB 101 and the recent
interpretive guidance issued by the SEC.


                                      F-15
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>


1.  Investment Securities

The amortized cost and estimated market values of investment securities
available-for-sale are summarized as follows:

                               AVAILABLE-FOR-SALE

                                                                 Gross             Gross          Estimated
                                               Amortized    Unrealized        Unrealized             Market
March 31, 2001                                      Cost         Gains            Losses              Value
--------------                             -------------    ----------       -----------      -------------
<S>                                        <C>              <C>              <C>              <C>
State municipal bonds .................    $  12,213,821    $  375,093       $   (20,665)     $  12,568,249
                                           =============    ==========       ===========      =============

March 31, 2000

State municipal bonds..................    $  11,888,831    $    4,448       $  (558,632)     $  11,334,647
                                           =============    ==========       ===========      =============
</TABLE>


The amortized cost and estimated market values of investment securities at March
31, 2001, by contractual maturity, are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
                               AVAILABLE-FOR-SALE

                                                                                         Estimated
                                                                        Amortized           Market
                                                                             Cost            Value
                                                                  ---------------   --------------
<S>                                                               <C>               <C>
                Due between five and ten years..................  $     1,162,549   $    1,172,179
                Due after ten years.............................       11,051,272       11,396,070
                                                                  ---------------   --------------

                                                                  $    12,213,821   $   12,568,249
                                                                  ===============   ==============
</TABLE>



2.       Mortgage-Backed Securities

The amortized cost and estimated market values of mortgage-backed and related
securities held-to-maturity and available-for-sale are summarized as follows:
<TABLE>
<CAPTION>

                                HELD-TO-MATURITY

                                                         Gross          Gross       Estimated
                                         Amortized  Unrealized     Unrealized          Market
March 31, 2001                                Cost       Gains         Losses           Value
--------------                        ------------    --------    -----------    ------------
<S>                                   <C>             <C>         <C>            <C>
FNMA Certificates .................   $    622,930    $  2,504    $   (26,244)   $    599,190
Collateralized Mortgage Obligations         34,109         197           (126)         34,180
GNMA Certificates .................         60,896         607            (97)         61,406
FHLMC Certificates ................        168,064           -         (3,720)        164,344
State revenue bonds ...............      1,449,434       1,705              -       1,451,139
                                      ------------    --------    -----------    ------------

                                      $  2,335,433    $  5,013    $   (30,187)   $  2,310,259
                                      ============    ========    ===========    ============
</TABLE>

                                      F-16
<PAGE>
<TABLE>
<CAPTION>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                              Gross         Gross      Estimated
                                                             Amortized   Unrealized    Unrealized         Market
March 31, 2000                                                    Cost        Gains        Losses          Value
--------------                                             -----------    ---------  ------------    -----------
<S>                                                        <C>            <C>        <C>             <C>
FNMA Certificates .....................................    $   697,646    $   2,421  $    (49,828)   $   650,239
Collateralized Mortgage Obligations ...................         46,818          216          (226)        46,808
GNMA Certificates .....................................         69,027          140          (127)        69,040
FHLMC Certificates ....................................        205,180            -        (6,741)       198,439
State revenue bonds ...................................      1,465,308            -             -      1,465,308
                                                           -----------    ---------  ------------    -----------
                                                           $ 2,483,979    $   2,777  $    (56,922)   $ 2,429,834
                                                           ===========    =========  ============    ===========



                               AVAILABLE-FOR-SALE

                                                                              Gross         Gross      Estimated
                                                              Amortized  Unrealized    Unrealized         Market
March 31, 2001                                                    Cost        Gains        Losses          Value
-----------                                                -----------   ----------  ------------    -----------
Collateralized Mortgage Obligations ...................    $   665,732    $  12,592  $          -    $   678,324
FHLMC Certificates ....................................      5,468,549      227,775       (17,963)     5,678,361
FNMA Certificates .....................................      6,533,144      215,873        (4,425)     6,744,592
GNMA Certificates .....................................      4,402,207      200,409             -      4,602,616
                                                           -----------    ---------  ------------    -----------

                                                           $17,069,632    $ 656,649  $    (22,388)   $17,703,893
                                                           ===========    =========  ============    ===========

March 31, 2000
--------------
Collateralized Mortgage Obligations ...................    $   899,933    $  11,167  $          -    $   911,100
FHLMC Certificates ....................................      6,052,227        6,741      (110,001)     5,948,967
FNMA Certificates .....................................      7,649,810       18,142      (202,146)     7,465,806
GNMA Certificates .....................................      4,495,721       16,038       (96,382)     4,415,377
                                                           -----------    ---------  ------------    -----------
                                                           $19,097,691    $  52,088  $   (408,529)   $18,741,250
                                                           ===========    =========  ============    ===========
</TABLE>


The amortized cost and estimated market value of mortgage backed securities at
March 31, 2001, by contractual maturity, are shown below. Expected maturities
will differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
                                         HELD-TO-MATURITY           AVAILABLE-FOR-SALE
                                     ------------------------  ---------------------------
                                                    Estimated                    Estimated
                                      Amortized        Market     Amortized         Market
                                           Cost         Value          Cost          Value
                                    -----------   -----------  ------------   ------------
<S>                                 <C>           <C>          <C>           <C>
Due between five and ten years      $    19,219   $    23,554  $          -  $           -
Due after ten years ..........        2,316,214     2,286,705    17,069,632     17,703,893
                                    -----------   -----------  ------------   ------------

                                    $ 2,335,433   $ 2,310,259  $ 17,069,632   $ 17,703,893
                                    ===========   ===========  ============   ============
</TABLE>

                                      F-17
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Collateralized mortgage obligations at March 31, 2001 and 2000 were
collateralized by mortgage-backed securities issued by the Federal National
Mortgage Association, the Federal Home Loan Mortgage Corporation or the
Government National Mortgage Association.

3.  Loans Receivable

Loans receivable at March 31 consists of the following:
<TABLE>
<CAPTION>

                                                                          2001             2000
                                                                      ------------     ------------
<S>                                                                   <C>              <C>
               Real estate loans:
                  Residential .....................................   $ 74,892,160     $ 71,795,469
                  Commercial ......................................     37,968,941       24,988,009
                  Agricultural ....................................     15,383,011       16,003,366
                  Construction ....................................      8,028,182        7,818,515

               Other loans:
                  Commercial (non-real estate) ....................     41,788,884       32,800,384
                  Other consumer ..................................      8,255,142        7,533,147
                  Home equity .....................................     27,322,297       24,626,319
                  Agricultural operating ..........................     10,938,342        7,467,235
                                                                      ------------     ------------

               Total loans receivable ............................     224,576,959      193,032,444

               Less:
                  Loans in process ................................      3,248,216        3,349,059
                  Unearned loan fees and discounts.................        419,654          414,742
                  Allowance for loan losses .......................      1,758,263        1,604,484
                                                                      ------------     ------------

                  Loans receivable, net ...........................   $219,150,826     $187,664,159
                                                                      ============     ============
</TABLE>

Total loans receivable consist of approximately $99,270,000 and $86,284,000 in
one-to-four family residential real estate loans at March 31, 2001 and 2000,
respectively. Loans held for sale carried at lower of aggregate cost or market
value were $2,466,000 and $2,345,000 at March 31, 2001 and 2000, respectively.

The following summarizes the changes in the allowance for loan losses at
March 31:

<TABLE>
<CAPTION>

                                                                            2001            2000
                                                                      -------------    -------------
<S>                                                                   <C>              <C>
               Allowance for loan losses, beginning of year........   $   1,604,484    $   1,360,982
               Provision for loan losses...........................         303,172          286,812
               Charge-offs.........................................        (149,393)         (43,310)
                                                                      -------------    -------------

               Allowance for loan losses, end of year..............   $   1,758,263    $   1,604,484
                                                                      =============    =============

</TABLE>

                                      F-18
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2001 and 2000, loans on a nonaccrual status totaled
approximately $1,443,000 and $583,000, respectively. The effect of not
recognizing interest income on nonaccrual loans in accordance with the original
terms totaled approximately $59,000 during 2001 and $25,000 during 2000.

The following information at March 31 relates to the Bank's impaired loans which
includes troubled debt restructurings that meet the definition of impaired
loans:
<TABLE>
<CAPTION>

                                                                            2001            2000
                                                                       ------------   ------------
<S>                                                                    <C>            <C>
               Impaired loans with a specific allowance............... $     26,222   $     17,161

               Impaired loans with no specific allowance..............    2,440,446        658,807
                                                                       ------------   ------------
               Total impaired loans .................................. $  2,466,668   $    675,968
                                                                       ============   ============

               Total allowance related to impaired loans.............. $    189,397   $     47,542

               Average aggregate balance of impaired loans for the
                    year.............................................. $  2,115,858   $    533,101

               Interest income recognized on impaired loans........... $     11,087   $     15,411
</TABLE>

Outstanding commitments of the Bank to originate loans as of March 31, 2001 were
as follows:
<TABLE>
<CAPTION>

                                                              Fixed         Variable
                                                               Rate             Rate           Total
                                                     --------------    -------------   -------------
               <S>                                   <C>               <C>             <C>
               First mortgage loans................  $   18,018,705    $     385,580   $  18,404,285
               Other loans  .......................       1,550,837        5,123,945       6,674,782
                                                     --------------    -------------   -------------
               Outstanding loan commitments........  $   19,569,542    $   5,509,525   $  25,079,067
                                                     ==============    =============   =============
</TABLE>

Interest rates on fixed rate loan commitments range from 6.08% to 11.00% and are
committed through June 13, 2001. Fees received in connection with these
outstanding loan commitments are deferred and will be recognized in income over
the life of the related loan after funding of the loan. In addition, the Bank
had commitments to fund outstanding credit lines of approximately $28,661,795
and commitments to fund credit card lines of approximately $2,975,000 at March
31, 2001. Commitments to extend credit may involve elements of interest rate
risk in excess of the amount recognized in the balance sheets. Interest rate
risk on commitments to extend credit results from the possibility that interest
rates may have moved unfavorably from the position of the Bank since the time
the commitment was made.


                                      F-19
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The Bank remains contingently liable for approximately $431,468 of loans sold
with recourse as of March 31, 2001. Loans serviced for others (including
contract collections) are not included in the consolidated statements of
financial condition. The unpaid principal balances of these loans at March 31
are as follows:
<TABLE>
<CAPTION>

                                                                          2001             2000
                                                                     -------------    -------------
<S>                                                                  <C>              <C>
               Loan portfolios serviced for:
                   FNMA ..........................................   $  26,987,840    $  31,509,826
                   FHLMC .........................................     105,147,907      109,886,904
                   Others ........................................       6,047,358        4,670,927
                                                                     -------------    -------------
                                                                     $ 138,183,105    $ 146,067,657
                                                                     =============    =============
</TABLE>

4.  Accrued Interest Receivable

Accrued interest receivable at March 31 consists of the following:
<TABLE>
<CAPTION>
                                                                           2001            2000
                                                                     -------------    -------------
<S>                                                                  <C>              <C>
               Investment securities .............................   $     149,031    $     156,894
               Mortgage-backed securities ........................         141,859          158,764
               Loans receivable ..................................       2,010,940        1,550,746
                                                                     -------------    -------------
               Accrued interest receivable .......................   $   2,301,830    $   1,866,404
                                                                     =============    =============
</TABLE>

5.  Premises and Equipment

Premises and equipment at March 31 consists of the following:
<TABLE>
<CAPTION>
                                                                           2001            2000
                                                                     -------------    -------------
<S>                                                                  <C>              <C>
               Land, buildings and building improvements .........   $   5,632,627    $   5,355,137
               Furniture, fixtures and equipment .................       4,820,341        4,625,870
               Construction in progress ..........................          82,552          103,053
                                                                     -------------    -------------
                                                                        10,535,520       10,084,060
               Accumulated depreciation ..........................      (4,546,533)      (3,871,334)
                                                                     -------------    -------------
               Premises and equipment, net .......................   $   5,988,987    $   6,212,726
                                                                     =============    =============

</TABLE>

                                      F-20
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6.  Deposits

Deposits and the related weighted average interest rates at March 31 consist of
the following:
<TABLE>
<CAPTION>

                                                                        2001                 2000
                                                                   --------------      --------------
<S>                                                                <C>                 <C>
               Deposit accounts:
                   NOW accounts (0.34% and 0.73%)...............   $   40,501,830      $   33,985,876
                   Passbook accounts (1.99% and 2.00%)..........       12,348,892          14,244,726
                   Money market accounts
                     (3.69% and 4.51%)..........................       15,033,027          17,500,981
                                                                   --------------      --------------
                                                                       67,883,749          65,731,583
                                                                   --------------      --------------

               Certificates of deposit:
                   0.00% to 1.99%...............................           12,635                   -
                   2.00% to 2.99%...............................           77,264             563,924
                   3.00% to 3.99%...............................        7,375,176              88,460
                   4.00% to 4.99%...............................        5,295,080          19,649,828
                   5.00% to 5.99%...............................       38,581,121          48,655,294
                   6.00% to 6.99%...............................       37,873,874           9,847,363
                   7.00% to 7.99%...............................          662,753             336,676
                   8.00% to 8.99%...............................           35,471              33,820
                                                                   --------------      --------------
                                                                       89,913,374          79,175,365
                                                                   --------------      --------------
                                                                   $  157,797,123      $  144,906,948
                                                                   ==============      ==============
</TABLE>

The scheduled maturities of certificates of deposit at March 31, 2001 are as
follows:
<TABLE>
<CAPTION>

                   Year ending March 31,                                                       Amount
                                                                                        -------------
                      <S>                                                               <C>
                      2002..........................................................    $  67,091,238
                      2003..........................................................       17,978,287
                      2004..........................................................        2,669,789
                      2005..........................................................        1,442,804
                      2006..........................................................          509,567
                      Thereafter....................................................          221,689
                                                                                        -------------
                      Total.........................................................    $  89,913,374
                                                                                        =============
</TABLE>

Interest expense on deposits consists of the following:
<TABLE>
<CAPTION>
                                                                             Year ended March 31,
                                                                      -------------------------------
                                                                           2001               2000
                                                                      -------------     -------------
                  <S>                                                 <C>             <C>
                  NOW and money market.............................   $    918,133      $     911,514
                  Passbook savings.................................        268,269            346,824
                  Certificates of deposit..........................      4,822,521          4,122,844
                                                                      ------------      -------------

                  Interest expense.................................   $  6,008,923      $   5,381,182
                                                                      ============      =============
</TABLE>

                                      F-21
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Certificates of deposit of $100,000 or more totaled approximately $20,874,000
and $14,862,000 at March 31, 2001 and 2000, respectively. Deposit balances in
excess of $100,000, approximately $21,461,000 and $16,357,000 at March 31, 2001
and 2000, respectively, are not insured by the Federal Deposit Insurance
Corporation (FDIC).

<TABLE>
<CAPTION>

7.  Income Taxes

The components of income tax expense are summarized as follows:

                                                                           Year ended March 31,
                                                                     -------------------------------
                                                                         2001                2000
                                                                     ------------       ------------
<S>                                                                  <C>                <C>
                   Current........................................   $    874,010       $    834,240
                   Deferred.......................................         (7,906)           (16,074)
                                                                     ------------       ------------
                   Income tax expense.............................   $    866,104       $    818,166
                                                                     ============       ============
</TABLE>

Deferred tax liabilities and assets at March 31 consist of the following:
<TABLE>
<CAPTION>

                                                                          2001              2000
                                                                     ------------       -----------
<S>                                                                  <C>                <C>
               Deferred tax liabilities:
                   FHLB stock dividends...........................   $   (610,000)      $  (496,000)
                   Loan loss reserves.............................       (121,000)         (161,000)
                   Mortgage servicing rights......................       (338,000)         (361,000)
                   Depreciation...................................       (292,000)         (240,000)
                   Deferred compensation, restricted stock........       (253,000)         (190,000)
                   Unrealized gain on securities..................       (386,000)                -
                   Other..........................................        (31,000)          (21,000)
                                                                     ------------       -----------

               Total deferred tax liabilities.....................     (2,031,000)       (1,469,000)
                                                                     ------------       -----------

               Deferred tax assets:
                   Unearned loan fees.............................         27,000            33,000
                   Allowance for loan losses......................        820,000           700,000
                   Deferred compensation..........................        384,000           263,000
                   Unrealized loss on securities..................              -           353,000
                   Other..........................................         28,000            83,000
                                                                     ------------       -----------

               Total deferred tax assets..........................      1,259,000         1,432,000
                                                                     ------------       -----------

               Net deferred income tax liability..................   $   (772,000)      $   (37,000)
                                                                     ============       ===========
</TABLE>

                                      F-22
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the statutory federal income tax rate to the effective
income tax rate follows:
                                        2001                 2000
                                   -------------------  -----------------
                                    Amount    Percent    Amount   Percent
                                   -------    -------   -------   -------
Income tax expense at statutory
  rates .......................   $ 934,224    34.0%  $ 857,848    34.0%
Increase (decrease) resulting
  from:
   Permanent differences ......    (328,482)  (12.0)   (209,688)   (8.3)
   State income taxes, net of
    federal benefit ...........     140,133     5.1      99,571     3.9
   Other ......................     120,229     4.4      70,435     2.8
                                  ---------    ----   ---------    ----
                                  $ 866,104    31.5%  $ 818,166    32.4%
                                  =========    ====   =========    ====

8.  Equity

The Holding Company is not subject to capital adequacy requirements by its
primary regulator, the Office of Thrift Supervision. The Bank, however, is
subject to various regulatory capital requirements administered by the
Washington Department of Financial Institutions (the Department) and the FDIC,
(collectively referred to as the regulators). Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional
discretionary actions by the regulators that, if undertaken, could have a direct
material effect on the Bank's financial statements. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the Bank
must meet specific capital guidelines that involve quantitative measures of the
Bank's assets, liabilities and certain off-balance-sheet items as calculated
under regulatory accounting practices. The Bank's capital amounts and
classifications are also subject to qualitative judgments by the regulators
about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the table
below) of total and Tier 1 capital (as defined in the regulations) to
risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average
assets (as defined). Management believes, as of March 31, 2001, that the Bank
meets all capital adequacy requirements to which it is subject.

As of March 31, 2001, the most recent notification from the FDIC categorized the
Bank as well capitalized under the regulatory framework for prompt corrective
action. To be categorized as well capitalized, the Bank must maintain minimum
total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in
the table below. There are no conditions or events since the most recent
notification that management believes have changed the Bank's category.

                                      F-23
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Bank's actual capital amounts and ratios are presented in the table below
(dollars in thousands):

<TABLE>
<CAPTION>

                                                                                              To Be Well
                                                                                          Capitalized Under
                                                                       For Capital        Prompt Corrective
                                                       Actual       Adequacy Purposes      Action Provisions
                                                 ----------------   -----------------     ------------------
                                                  Amount    Ratio     Amount    Ratio       Amount    Ratio
                                                 --------  ------    -------   ------     ---------   ------
<S>                                             <C>          <C>    <C>           <C>     <C>          <C>
  As of March 31, 2001
    Tier 1 Capital (to average assets) .....    $  26,182    9.4%   $  11,147     4.0%    $  13,933    5.0%

    Tier 1 Capital (to risk-weighted assets)    $  26,182   13.8%   $   7,567     4.0%    $  11,351    6.0%

    Total Capital (to risk-weighted assets)     $  27,940   14.8%   $  15,134     8.0%    $  18,918   10.0%

  As of March 31, 2000
    Tier 1 Capital (to average assets) .....    $  23,617   10.0%   $   9,486     4.0%    $  11,858    5.0%

    Tier 1 Capital (to risk-weighted assets)    $  23,617   13.4%   $   7,055     4.0%    $  10,583    6.0%

    Total Capital (to risk-weighted assets)     $  25,221   13.1%   $  14,110     8.0%    $  17,638   10.0%

</TABLE>

The Bank may not declare or pay a cash dividend if such declaration and payment
would violate regulatory requirements. Unlike the Bank, the Holding Company is
not subject to these regulatory restrictions on the payment of dividends to its
stockholders. However, the source of its future corporate dividends may depend
upon dividends from the Bank.

9.  Related Party Transactions

Prior to the Financial Institutions Reform, Recovery and Enforcement Act of 1989
(FIRREA), the Bank's policy allowed all full-time permanent employees with one
complete year of service, key officers and directors to receive a first mortgage
loan on their primary residence at rates which may be below market. At such time
that they cease to be employed by the Bank and are not eligible for retirement
(age 55 or older), the loan terms will change to the market interest rate on the
date the loan closed.

Subsequent to FIRREA, preferential terms on officer and director loans were
discontinued. The following schedule summarizes the activity in loans to
directors and officers at March 31:

<TABLE>
<CAPTION>

                                                                       2001              2000
                                                                   ------------     ------------
<S>                                                                <C>               <C>
               Balance, beginning of year.......................   $    687,420     $    648,491
                   Additions....................................        637,998           52,835
                   Repayments and sales proceeds................        (48,288)         (13,906)
                                                                   ------------     ------------

               Balance, end of year.............................   $  1,277,130     $    687,420
                                                                   ============     ============

</TABLE>

                                      F-24
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Employee Benefit Plans

During 1995, the Bank established a profit sharing plan pursuant to Section
401(k) of the Internal Revenue Code (Code), whereby participants may contribute
a percentage of compensation, but not in excess of the maximum allowed under the
Code. The plan was amended during 1998, whereby matching contributions by the
Bank were eliminated; however, additional contributions may be made at the
discretion of the Board of Directors. Approximately $15,145 and $0 were
contributed to the plan for the years ended March 31, 2001 and 2000,
respectively.

The Company has entered into a salary continuation agreement with certain
employees. This program was funded by purchasing single premium life insurance
contracts. The program provides for aggregate continued annual compensation for
all participants totaling $143,500 for life with a guarantee period ranging from
fifteen to twenty years. Participants vest ratably each plan year until
retirement, termination, death or disability. The Company is recording the
salary obligation over the estimated remaining service lives of the
participants. Expenses related to this program were $75,515 and $40,759 for the
years ended March 31, 2001 and 2000, respectively. At March 31, 2001, an
obligation of $359,414 and cash value of life insurance of $1,744,457 were
recorded. At March 31, 2000, an obligation of $283,899 and cash value of life
insurance of $1,663,671 were recorded. Net earnings of the life insurance
contracts were $80,786 and $77,642 for the years ended March 31, 2001 and 2000,
respectively.

The Company entered into three year employment agreements with certain officers
which may be extended by the Board for an additional year at each anniversary
date. The agreements provide for severance payments and other benefits in the
event of termination without cause and termination of employment in connection
with any change in control of the Company of up to 2.99 times the officer's
average annual compensation during the preceding five years. The employment
agreements provide for termination by the Company for cause at any time.

11. Employee Stock Ownership Plan

The Bank established for eligible employees an ESOP and related trust in
connection with the stock conversion consummated on July 1, 1997. Eligible
employees of the Bank as of June 30, 1997 and eligible employees of the Company
and the Bank employed after such date who have been credited with at least 1,000
hours during a 12-month period and are age 21 will become participants. The ESOP
borrowed $1,587,000 from the Holding Company in order to purchase 158,700 shares
of common stock of the Holding Company. The loan will be repaid principally from
the Bank's contributions to the ESOP over a period of twenty-five years, as
amended during fiscal 1999, and the collateral for the loan will be the
unreleased, restricted common stock purchased by the ESOP. Contributions to the
ESOP will be discretionary; however, the Bank intends to make annual
contributions to the ESOP in an aggregate amount at least equal to the principal
and interest requirements of the debt. The stated interest rate for the loan is
8.5%.

                                      F-25

<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The cost of shares acquired by the ESOP is considered unearned compensation and,
as such, is recorded as a reduction of the Company's stockholders' equity.
Shares purchased by the ESOP are held in a suspense account for allocation among
participants as the loan is repaid. Contributions to the ESOP and shares
released from the suspense account are allocated among the participants on the
basis of compensation in the year of allocation. Participants generally become
100% vested in their ESOP account after five years of credited service or if
their service was terminated due to death, retirement, permanent disability or a
change in control. Prior to the completion of four years of credited service, a
participant who terminates employment for reasons other than death, retirement,
disability, or change in control of the Company will not receive any benefit.
Forfeitures will be reallocated among remaining participating employees, in the
same proportion as contributions. Benefits are payable upon death, retirement,
disability or separation from service. The contributions to the ESOP are not
fixed, so benefits payable under the ESOP cannot be estimated.

Compensation expense is recorded equal to the fair value of shares held by the
ESOP which are deemed committed to be released. ESOP compensation expense was
approximately $193,000 and $227,000 for the years ended March 31, 2001 and 2000,
respectively. As of March 31, 2001, the Company has allocated or committed to be
released to the ESOP 53,262 earned shares and has 105,438 unearned, restricted
shares remaining to be released. The market value of unearned, restricted shares
held by the ESOP trust was approximately $1,403,696 at March 31, 2001.

12  Stock Award Plans

Stock Option Plan

On July 22, 1998, the shareholders of the Company voted to approve the 1998
Stock Option Plan (the SOP) for employees, officers and directors of the
Company. The SOP is administered by the Board of Directors. Under the SOP, a
maximum of 198,375 shares were approved to be granted. Generally, the SOP
provides that the terms under which options may be granted are to be determined
by a Committee subject to certain requirements as follows: (1) the exercise
price will not be less than 100% of the market price per share of the common
stock of the Company at the time stock option is granted, and (2) the option
purchase price will be paid in full on the date of purchase. The SOP provides
that options may be transferred only by will or by laws of descent and
distribution and may be exercised during the optionee's lifetime only by the
optionee or by the optionee's guardian or legal representative.

During fiscal 1999, options to purchase 171,350 shares of common stock were
granted. During the years ended March 31, 2001 and 2000, 3,050 and 12,150
options were canceled. At March 31, 2001 and 2000, options to purchase 156,150
and 159,200 shares remained outstanding. The exercise price of the options,
based on the fair market value of the Company's common stock on the grant date,
is $15.81. The remaining life of these options at March 31, 2001 is 7.6 years.
On March 31, 2001, 63,300 options were vested and exercisable.

                                      F-26
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SFAS No. 123 requires the Company to provide pro forma information regarding net
income and income per share as if compensation cost for the Company's stock
option plan had been determined in accordance with the fair value based method
prescribed by SFAS No. 123. The Company estimates the fair value of each stock
option at the grant date by using the Black-Scholes option-pricing model with
the following weighted-average assumptions used: dividend yield of eight
percent; expected volatility of 15 percent; risk-free interest rate of five
percent; and expected lives of seven years. The weighted average fair value at
the date of grant for options granted to employees in 1999 was $1.22 per option.
Under the accounting provisions of SFAS No. 123, the Company's net income and
income per share for the years ended March 31, 2001 and 2000 would have been
adjusted to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                                           Year Ended March 31,
                                                                     -------------------------------
                                                                          2001             2000
                                                                     -------------     -------------
<S>                                                                  <C>               <C>
               Net income:
                  As reported....................................    $   1,881,614     $   1,704,917
                  Pro forma......................................    $   1,847,870     $   1,671,173

               Basic earnings per share:
                  As reported....................................    $        1.34     $        1.11
                  Pro forma......................................    $        1.31     $        1.09

               Diluted earnings per share:
                  As reported....................................    $        1.30     $        1.06
                  Pro forma......................................    $        1.27     $        1.04

13. Earnings per share

Information used to calculate earnings per share was as follows:

                                                                             Year Ended March 31,
                                                                     -------------------------------
                                                                           2001              2000
                                                                     -------------     -------------
               Net income........................................    $   1,881,614     $   1,704,917
                                                                     =============     =============

               Basic weighted average number of common shares
                  outstanding....................................        1,404,935         1,535,137
               Dilutive effect of potential common shares........           43,031            71,449
                                                                     -------------     -------------
               Diluted weighted average number of common
                  shares outstanding.............................        1,447,966         1,606,586
                                                                     =============     =============

               Net income per common share
                  Basic..........................................    $        1.34     $        1.11
                  Diluted........................................    $        1.30     $        1.06

</TABLE>

                                      F-27
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


During the year ended March 31, 2001 and 2000, stock options to purchase
approximately 156,000 and 159,000 shares at an exercise price of $15.81 per
share were outstanding, but not included in the computation of diluted earnings
per share because the exercise price of the options was greater than the average
market price of the common stock through-out the year.

Restricted Stock

During fiscal 1999, the shareholders of the Company approved the Management
Recognition and Development Plan (MRDP). Under the MRDP, the Company is
authorized to grant up to 79,350 shares of restricted stock to employees,
officers and directors of the Company. During fiscal 1999, 79,350 shares of
restricted stock were awarded from treasury stock. The fair market value was
$15.81 per share. These awards vest ratably over a five-year period. Deferred
compensation resulting from these awards is amortized as a charge to expense
over the five year period; expense for the years ended March 31, 2001 and 2000
was $236,361 and $242,420, respectively. The balance of deferred compensation is
shown as a reduction of stockholders' equity.

14. Advances from FHLB and other Borrowings

Advances from FHLB had weighted average interest rates at March 31, 2001 and
2000 of 5.57% and 6.05%, respectively. Maturity dates of advances at March 31
were as follows:

<TABLE>
<CAPTION>
                                                                       2001               2000
                                                                ---------------    --------------
<S>                                                             <C>                <C>
                Advances from FHLB due:
                    Less than 1 year                            $    48,372,055    $   63,964,083
                    1 to 2 years................................      2,500,000         8,743,055
                    2 to 3 years................................      6,521,000           500,000
                    3 to 4 years................................      5,269,000                 -
                    4 to 5 years................................      9,660,000                 -
                    More than 5 years...........................     18,594,968         1,370,968
                                                                ---------------    --------------
                                                                $    90,917,023    $   74,578,106
                                                                ===============    ==============
</TABLE>

Pursuant to collateral requirements of the FHLB, advances are secured by stock
in FHLB and qualifying first mortgage loans. During 2001 the Company from time
to time made certain short-term borrowings from other governmental lending
entities. All such borrowings had been repaid as of year end.

                                      F-28
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


15. Fair Values of Financial Instruments

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments," requires
disclosure of fair value information about financial instruments, whether or not
recognized on the balance sheet, for which it is practicable to estimate that
value. SFAS No. 107 excludes certain financial instruments and all nonfinancial
instruments from its disclosure requirements. Accordingly, the aggregate fair
value estimates presented do not reflect the underlying fair value of the
Company. Although management is not aware of any factors that would materially
affect the estimated fair value amounts presented, such amounts have not been
comprehensively revalued for purposes of these financial statements since that
date and, therefore, estimates of fair value subsequent to that date may differ
significantly from the amounts presented as follows.

<TABLE>
<CAPTION>

                                                         March 31, 2001               March 31, 2000
                                                 ---------------------------   ---------------------------
                                                     Carrying      Estimated       Carrying      Estimated
                                                       Amount     Fair Value         Amount     Fair Value
                                                 ------------   ------------   ------------   ------------
<S>                                              <C>            <C>            <C>            <C>
          Financial assets:
            Cash and cash equivalents .......    $ 12,804,848   $ 12,804,848   $ 12,495,940   $ 12,495,940
            Investment securities:
             Available-for-sale .............      12,568,249     12,568,249     11,334,647     11,334,647
            Mortgage-backed securities:
             Held-to-maturity ...............       2,335,433      2,310,259      2,483,979      2,429,834
             Available-for-sale .............      17,703,893     17,703,893     18,741,250     18,741,250
            Loans receivable ................     219,150,826    219,691,909    187,664,159    188,127,505
            Stock in FHLB ...................       5,031,875      5,031,875      3,965,175      3,965,175
            Cash surrender value of life
             insurance policies .............       1,744,457      1,744,457      1,663,671      1,663,671

          Financial liabilities:
            Deposits ........................     157,797,133    158,096,939    144,906,948    145,182,271
            Advances from FHLB ..............      90,917,023     92,005,884     74,578,106     74,354,453

</TABLE>

The following methods and assumptions were used to estimate the fair value of
financial instruments:

Cash and cash equivalents - The carrying amount of these items is a reasonable
estimate of their fair value.

Investment securities and mortgage-backed securities available-for-sale and
mortgage-backed securities held-to-maturity - The fair value of investment
securities is based on quoted market prices or dealer estimates. Estimated fair
value for mortgage-backed securities issued by quasi-governmental agencies is
based on quoted market prices. The fair value of all other mortgage-backed
securities is based on dealer estimates.


                                      F-29
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Loans receivable - For certain homogeneous categories of loans, such as fixed
and variable residential mortgages, fair value is estimated using quoted market
prices for securities backed by similar loans, adjusted for differences in loan
characteristics. The fair value of other loan types is estimated by discounting
the future cash flows and estimated prepayments using the current rates at which
similar loans would be made to borrowers with similar credit ratings and for the
same remaining term. Some loan types were valued at carrying value because of
their floating rate or expected maturity characteristics.

Cash surrender value of life insurance policies - The carrying amount of these
policies approximate their fair value.

Stock in FHLB - The fair value is based upon the redemption value of the stock
which equates to its carrying value.

Deposits - The fair value of demand deposits, savings accounts, and money market
accounts is the amount payable on demand at the reporting date. The fair value
of fixed-maturity certificates of deposit is estimated by discounting the
estimated future cash flows using the rates currently offered for deposits with
similar remaining maturities.

Advances from FHLB - The fair value of FHLB advances and other borrowings is
estimated by discounting the estimated future cash flows using rates currently
available to the Bank for debt with similar remaining maturities.

Off-balance sheet instruments - The fair value of a loan commitment is
determined based on the fees currently charged to enter into similar agreements,
taking into account the remaining length of the commitment period and the
present creditworthiness of the counterparties. Neither the fees earned during
the year on these instruments nor their value at year-end are significant to the
Company's consolidated financial position.

16. Liquidation Account

At the time of the Conversion, the Bank established a liquidation account in an
amount equal to its equity as reflected in the latest statement of financial
condition used in the final conversion prospectus. The liquidation account will
be maintained for the benefit of eligible account holders and supplemental
eligible account holders who continue to maintain their accounts at the Bank
after the Conversion. The liquidation account will be reduced annually to the
extent that eligible account holders and supplemental eligible account holders
have reduced their qualifying deposits as of each anniversary date. Subsequent
increases will not restore an eligible account holder's or supplemental eligible
account holder's interest in the liquidation account. In the event of a complete
liquidation of the Bank, each eligible account holder will be entitled to
receive a distribution from the liquidation account in an amount proportionate
to the current adjusted qualifying balances for accounts then held.

                                      F-30
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


17.  Commitments and Contingencies

Periodically, there have been various claims and lawsuits involving 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 incident to the Bank's business. The
Company and the Bank are not a party to any pending legal proceedings that it
believes would have a material adverse effect on the financial condition or
operations of the Company.

The Company also maintains additional credit facilities with Wells Fargo Bank,
available funds totaling $7.0 million and the Federal Reserve Bank of San
Francisco with available funds totaling $16.0 million. There were no outstanding
advances under these facilities at March 31, 2001.

The Company rents branch and office space under various operating leases. Total
rent expense recognized during each of the years ended March 31, 2001 and 2000
was $117,104 and $103,946. Future minimum rental payments under the operating
lease agreements are:

                  Year ending March 31,                   Amount
                                                      -----------
                         2002........................ $   114,003
                         2003........................      76,500
                         2004........................      66,300
                         2005........................      30,000
                         2006........................      30,000
                   Thereafter........................     120,000
                                                      -----------
                   Total ............................     436,803
                                                      ===========


The Company subleases portions of its branch facilities under non-cancelable
operating lease agreements. Total sublease income recognized during the years
ended March 31, 2001 and 2000 was $89,721 and $86,411. Future minimum rental
payments due to the Company under subleases are as follows:

                  Year ending March 31,                  Amount
                                                      -----------
                         2002........................ $    87,936
                         2003........................      98,928
                         2004........................      98,928
                         2005........................      98,928
                         2006........................      98,928
                   Thereafter........................      65,952
                                                      -----------
                   Total ............................ $   549,600
                                                      ===========

                                      F-31
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18.  Parent Company Financial Information

                               FirstBank NW Corp.
                        Statements of Financial Condition

                                                               March 31,
                                                      --------------------------
                                                          2001          2000
                                                      -----------   ------------
         Assets

         Cash and cash equivalents ................   $    54,389   $   352,245
         Loan to the Bank .........................             -       500,000
         Loan receivable from ESOP ................     1,020,679     1,182,952
         Investment in subsidiaries ...............    26,181,842    23,069,245
         Certificates of deposit ..................       712,429       817,649
         Other assets .............................        48,118         3,129
                                                      -----------   -----------

         Total assets .............................   $28,017,457   $25,925,220
                                                      ===========   ===========

         Liabilities and Stockholders' Equity

         Liabilities ..............................   $    41,114   $    58,757
         Stockholders' equity (Notes 8 and 16) ....    27,976,343    25,866,463
                                                      -----------   -----------

         Total liabilities and stockholders' equity   $28,017,457   $25,925,220
                                                      ===========   ===========

                                      F-32
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               FirstBank NW Corp.
                              Statements of Income
<TABLE>
<CAPTION>

                                                                    Year ended March 31,
                                                                -------------------------
                                                                    2001          2000
                                                                -----------    ----------
<S>                                                             <C>            <C>
         Interest income:
           Certificates and time deposits ................      $    34,312    $   32,081
           Loans receivable ..............................           11,344       111,435
           ESOP loan .....................................           96,095       110,518
           Cash and cash equivalents .....................            4,106         6,034

         Other income:
           Equity in undistributed income of subsidiaries,
             net of taxes ................................        1,955,996     1,699,962
                                                                -----------    ----------

                                                                  2,101,853     1,960,030
         Other expense:
           Compensation, payroll taxes and fringe benefits          106,644        78,830
           Other expense .................................          161,713       173,078
                                                                -----------    ----------

         Income before income tax expense (benefit) ......        1,833,496     1,708,122

         Income tax expense (benefit) ....................          (48,118)        3,205
                                                                -----------    ----------

         Net income ......................................      $ 1,881,614    $1,704,917
                                                                ===========    ==========

</TABLE>

                                      F-33
<PAGE>

                       FIRSTBANK NW CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               FirstBank NW Corp.
                            Statements of Cash Flows
                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>

                                                          Year ended March 31,
                                                       --------------------------
                                                          2001            2000
                                                       -----------    -----------
<S>                                                    <C>            <C>
Cash flows from operating activities:
   Net income ......................................   $ 1,881,614    $ 1,704,917
   Adjustments to reconcile net income to
     net cash provided by operating activities:
      Equity in undistributed earnings of
        subsidiaries, net of taxes .................    (1,955,996)    (1,699,962)
      (Increase) decrease in other assets ..........       (83,751)       188,966
      Increase (decrease) in liabilities ...........       (17,644)          (523)
                                                       -----------    -----------

Net cash (used in) provided by operating activities       (175,777)       193,398
                                                       -----------    -----------

Cash flows from investing activities:
   Purchases of certificates of deposit ............             -       (817,649)
   Maturities of certificates of deposit ...........       105,220        786,054
   Dividends received from subsidiaries ............       460,000        460,000
   Principal repayments on loan to the Bank ........       500,000      2,900,000
   Principal repayments on ESOP loan ...............       162,273        164,545
                                                       -----------    -----------

Net cash provided by investing activities ..........     1,227,493      3,492,950
                                                       -----------    -----------

Cash flows from financing activities:
   Purchase of treasury stock ......................      (800,250)    (3,013,326)
   Dividends paid ..................................      (549,322)      (567,939)
                                                       -----------    -----------

Net cash used in financing activities ..............    (1,349,572)    (3,581,265)
                                                       -----------    -----------

Net increase (decrease) in cash and cash equivalents      (297,856)       105,083

Cash and cash equivalents, beginning of year .......       352,245        247,162
                                                       -----------    -----------

Cash and cash equivalents, end of year .............   $    54,389    $   352,245
                                                       ===========    ===========

Supplemental disclosure of cash flow information:
  Cash paid during the year for:
    Interest........................................   $         -    $         -
    Income taxes....................................   $         -    $    17,860

  Non-cash investing and financing activities:
   ESOP shares committed to be released.............   $    26,403    $    62,256
</TABLE>

                                      F-34
<PAGE>

                                   SIGNATURES

          Pursuant to the requirements of section 13 or 15(d) 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.

                                              FIRSTBANK CORP.


Date:  August 8, 2001                         By:  /s/ LARRY K. MOXLEY
                                                   -----------------------------
                                                   Larry K. Moxley
                                                   Chief Financial Officer and
                                                   Director (Principal Financial
                                                   Officer)