SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

         For the Fiscal Year Ended March 31, 2003

                                       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.
--------------------------------------------------------------------------------
           (Name of small business issuer 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 Section 12(g) of the Act:   Common Stock, par
                                                            value $.01 per share
                                                            --------------------
                                                              (Title of Class)

         Check whether the issuer (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 issuer'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 issuer's revenues for the fiscal year ended March 31, 2003 were
$25.0 million.

         The aggregate market value of voting stock held by nonaffiliates of the
issuer was $20,388,737 based on the last reported sale price of the common stock
of the issuer on the Nasdaq National Market on June 4, 2003. 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 issuer have
been excluded in that such persons may be deemed to be affiliates of the issuer.

         As of June 4, 2003, there were 1,294,881 shares outstanding of the
issuer's common stock.

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

                       DOCUMENTS INCORPORATED BY REFERENCE

1.   Portions of the issuer's annual report and definitive proxy statement for
     its 2003 annual meeting of stockholders are incorporated by reference into
     Part II and III of this Form 10-KSB.
<PAGE>

                                     PART I

Item 1.  Description of Business
--------------------------------

General

         FirstBank NW Corp. (formerly known as FirstBank Corp.) ("Company"), a
Washington corporation, was organized in Delaware in March of 1997 for the
purpose of becoming the holding company for FirstBank Northwest (formerly known
as First Federal Bank of Idaho, a Federal Savings Bank) ("Bank") upon the Bank's
conversion from a federally chartered mutual to a federally chartered stock
savings bank ("Conversion"). The Company completed the Conversion and initial
public offering on July 1, 1997 through the sale of 1,983,750 shares of common
stock at $10.00 per share. On January 30, 1998, the Bank converted to a
Washington chartered savings bank.

         The Bank, founded in 1920, is a Washington-chartered state savings bank
located in Lewiston, Idaho. The Bank, which was formed as an Idaho mutual
savings and loan association, converted to a federal mutual savings and loan
association in 1935 and adopted the federal mutual savings bank charter in 1990.
In July 1997, the Bank relocated its main office to Clarkston, Washington and on
January 30, 1998 converted to a Washington-chartered savings bank. The Bank is
currently regulated by the State of Washington, its primary regulator, and the
Federal Deposit Insurance Corporation ("FDIC"), the insurer of its deposits. The
Bank's deposits are insured by the FDIC's Savings Association Insurance Fund
("SAIF") and have been federally insured since 1933. The Bank has been a member
of the Federal Home Loan Bank ("FHLB") System since 1933.

         The Bank is a community-oriented financial institution, operating in
one business segment, that engages primarily in the business of attracting
deposits from the general public and using those funds to originate residential
mortgage loans, commercial, and agricultural real estate loans within the Bank's
market area. The Bank also is active in originating construction, and consumer
and other non-real estate loans. The Bank has adopted a mortgage banking
strategy pursuant to which it generally sells a majority of the residential
mortgage loans it originates.

         On February 24, 2003, the Company executed an Agreement and Plan of
Reorganization proposing the acquisition of Oregon Trail Financial Corp., Baker
City, Oregon ("Oregon Trail"), the unitary savings and loan holding company for
Pioneer Bank, a Federal Savings Bank ("Pioneer"). Pursuant to the terms of the
Agreement, shareholders of Oregon Trail will be entitled to receive for each
share of Oregon Trail common stock either $22.00 in cash or 1.028 shares of the
Company's common stock (subject to election and allocation procedures as
provided for in the Agreement, which are intended to ensure that in the
aggregate, 46% of the Oregon Trail shares will be exchanged for the Company's
common stock). In the merger, the Company is expected to issue 1.48 million
shares of common stock and approximately $36.5 million in cash, for a
transaction value at announcement of approximately $74.0 million. The Agreement
provides for the merger of Oregon Trail into the Company and the subsequent
merger of Pioneer into the Bank. Following the completion of the acquisition,
the Company will be the surviving holding company with 100% ownership of the
Bank and the Bank will be the surviving thrift subsidiary. The merger is subject
to regulatory approval.

                                        2
<PAGE>

Market Area

         FirstBank's general market area includes Northern Idaho and Eastern
Washington, as well as Ada County in Southwest Idaho. Administratively
headquartered in Lewiston, Idaho, the Bank operates eight full-service offices
in Lewiston, Lewiston Orchards, Moscow, Grangeville, Coeur d'Alene, and Post
Falls, Idaho, and in Clarkston and Liberty Lake, Washington. The Bank also
operates four real estate loan production offices in Lewiston, Moscow, Coeur
d'Alene and Boise, Idaho, and commercial and agricultural production centers in
Lewiston, Coeur d'Alene and Moscow, Idaho, and Spokane, Washington. Most of the
Bank's depositors reside in the communities surrounding the Bank's offices. The
vast majority of the Bank's loans are made to borrowers residing in the counties
in which the Bank's offices are located and in the surrounding counties.

         In general, the market areas served by the Bank are dependent on
agriculture, manufacturing, tourism and the forest products industry, and the
local economies reflect the health or weakness of those industries. Agricultural
activity in the Bank's market area is mainly dry land farming, the primary crop
being wheat. Other major crops are barley, peas, lentils, beans and grass seed.
Livestock production is also a major part of the region's economy. Coeur d'Alene
is the largest city in Northern Idaho. Lewiston, Idaho serves as the regional
center for state government. The economy of Lewiston, in Nez Perce County, is
connected to that of Clarkston, Washington, which is separated from Lewiston by
the Snake River. The Lewis-Clark Valley has a population of approximately
58,000. Forest products and agriculture are the dominant industries in the
Lewiston-Clarkston area. Medical services, light manufacturing and tourism have
helped maintain the economy in recent years. Moscow, Idaho, in Latah County, has
a population of approximately 21,000 and the county itself has a population of
approximately 35,000. Agriculture and higher education are the primary
industries in Moscow. The University of Idaho is located in Moscow and is the
city's largest employer. In addition, Washington State University is located
eight miles west of Moscow in Pullman, Washington. Grangeville, Idaho, in Idaho
County, has an economy based primarily on agriculture, the forest products
industry and the U.S. Forest Service. Declines in the forest products industry
have resulted in a decline in the population of Idaho County over the last
decade. Tourism has become increasingly important to the Grangeville economy in
recent years. Coeur d'Alene, Idaho, in Kootenai County, has a population of
approximately 35,000 and the county itself has approximately 112,000 residents.
Healthcare, manufacturing, construction, tourism, and forest products are the
major industries of this region. Coeur d'Alene has experienced significant
growth in the past ten years, primarily because of the healthcare, retail trade,
manufacturing, and tourism industries. Real estate activity has been high with a
large amount of new home construction due to the increasing population. Liberty
Lake, Washington is located in the rapidly growing I-90 corridor between Coeur
d'Alene, Idaho and Spokane, Washington. In August 2002, the Bank expanded into
Spokane, opening a commercial loan center close to the city center. The Bank's
growth prospects throughout that region are believed by management to be
outstanding as more businesses and technology firms locate there. In March 2002,
the Bank expanded into the rapidly growing Boise, Idaho market by opening the
Boise Residential Loan Center. The Boise MSA (Metropolitan Statistical Area),
which includes Ada and Canyon counties has a population in excess of 400,000,
the most densely populated area in the state of Idaho. Boise is the capital of
Idaho, the home of Boise State University, and headquarters for a large number
of national and international corporations. The Bank's growth opportunity in the
Boise market is believed by management to be outstanding.

                                        3
<PAGE>

Selected Financial Data

         The following tables set forth certain information concerning the
consolidated financial position and results of operations of the Company at the
dates and for the fiscal years indicated.

<TABLE>
<CAPTION>
                                                               At  March 31,
                                                      ------------------------------

FINANCIAL CONDITION DATA:                               2003       2002       2001
                                                      --------   --------   --------
                                                              (In Thousands)

<S>                                                   <C>        <C>        <C>
Total assets                                          $332,398   $307,840   $281,062
Loans receivable, net                                  251,805    234,396    216,685
Loans held for sale                                      5,214      3,740      2,466
Cash and cash equivalents                               24,741     24,012     12,805
Investment securities available-for-sale                16,813     12,524     12,568
Mortgage-backed securities held-to-maturity              1,969      2,140      2,335
Mortgage-backed securities available-for-sale            7,649      9,293     17,704
Deposits and securities sold under agreements to
  repurchase                                           214,340    196,123    157,797
Advances from FHLB                                      81,816     79,722     90,917
Stockholders' equity                                    30,064     27,813     27,976
</TABLE>



<TABLE>
<CAPTION>
                                                           Year Ended March 31,
                                                      ------------------------------

                                                        2003       2002       2001
                                                      --------   --------   --------
SELECTED OPERATING DATA:                           (In Thousands, except per share data)

<S>                                                   <C>        <C>        <C>
Interest income                                       $ 20,575   $ 20,248   $ 20,757
Interest expense                                         8,710      9,992     11,617
                                                      --------   --------   --------
Net interest income                                     11,865     10,256      9,140
Provision for loan losses                                1,033      1,064        303
                                                      --------   --------   --------
Net interest income after provision for loan losses     10,832      9,192      8,837
Non-interest income                                      4,692      4,015      2,594
Non-interest expenses                                   11,699      9,766      8,683
                                                      --------   --------   --------
Income before income tax expense                         3,825      3,441      2,748
Income tax expense                                       1,053      1,065        866
                                                      --------   --------   --------
Net income                                            $  2,772   $  2,376   $  1,882
                                                      ========   ========   ========

Per share data:
  Basic earnings per share                            $   2.15   $   1.76   $   1.34
  Diluted earnings per share                          $   2.07   $   1.70   $   1.30
                                                      ========   ========   ========

Dividends per share                                   $   0.54   $   0.44   $   0.38
                                                      ========   ========   ========
</TABLE>

                                        4
<PAGE>

<TABLE>
<CAPTION>
                                                                       At or For the
                                                                    Year Ended March 31,
                                                                 --------------------------

                                                                  2003      2002      2001
                                                                 ------    ------    ------
<S>                                                              <C>       <C>       <C>
KEY FINANCIAL RATIOS:
Performance Ratios:
Return on average assets (1)                                       0.87%     0.82%     0.71%
Return on average equity (2)                                       9.49      8.47      7.07
Average equity to average assets (3)                               9.16      9.73     10.00
Total equity to total assets at end of year                        9.04      9.03      9.95
Interest rate spread (4)                                           3.73      3.44      3.21
Net interest margin (5)                                            4.16      3.96      3.83
Average interest-earning assets to average interest-bearing
  liabilities                                                    114.96    114.05    113.10
Non-interest expense as a percent of average assets                3.67      3.39      3.27
Efficiency ratio (6)                                              68.04     66.57     71.82
Dividend payout ratio                                             25.37     25.60     29.19

Equity Ratios:
Tier I capital to average assets                                   8.40      8.79      9.18
Tier I capital to risk-weighted assets                            11.84     12.28     13.52
Total capital to risk-weighted assets                             13.09     13.47     14.45

Asset Quality Ratios:
Nonaccrual and 90 days or more past due loans as a percent
  of loans receivable, net                                         0.50      0.25      0.66
Nonperforming assets as a  percent of total assets                 0.55      0.36      0.53
Allowance for loan losses as a percent of total loans
  receivable                                                       1.25      1.06      0.79
Allowance for loan losses as a percent of nonperforming
  loans                                                          272.90    433.67    121.83
Net charge-offs to average outstanding loans                       0.07      0.12      0.07
Allowance for loan losses as a percent of net charge-offs         18.76      9.90     11.80
</TABLE>

(1)  Net income divided by average assets.
(2)  Net income divided by average equity.
(3)  Average equity divided by average assets.
(4)  Difference between weighted average yield on interest-earning assets and
     weighted average rate on interest-bearing liabilities.
(5)  Net interest income as a percentage of average interest-earning assets.
(6)  Represents the ratio of non-interest expenses divided by the sum of net
     interest income and non-interest income.

Lending Activities

         General. The principal lending activity of the Bank is the origination
of conventional mortgage loans for the purpose of purchasing or refinancing
owner-occupied, one- to four-family residential property. With the establishment
of the Commercial Loan Department in fiscal 1998, commercial real estate and
commercial non-real estate lending have become a significant portion of the
lending activities. The Bank is also active in originating construction and
agricultural real estate loans. The Bank to a lesser extent also originates home
equity and agricultural operating loans. The Bank's net loans receivable totaled
$251.8 million at March 31, 2003, representing 75.8% of consolidated total
assets.

                                        5
<PAGE>

         Loan Portfolio Analysis. The following table sets forth the composition
of the Bank's loan portfolio by type of loan for the years indicated. The Bank
had no concentration of loans exceeding 10.0% of total gross loans other than as
disclosed below.

<TABLE>
<CAPTION>
                                                             At March 31,
                                   -----------------------------------------------------------------
                                          2003                   2002                   2001
                                          ----                   ----                   ----
                                    Amount     Percent     Amount     Percent     Amount     Percent
                                   --------   --------    --------   --------    --------   --------
                                                         (Dollars in Thousands)

<S>                                <C>          <C>       <C>          <C>       <C>          <C>
Real estate loans:
Residential                        $ 50,781      18.60%   $ 62,680      25.91%   $ 72,426      32.61%
Agricultural                         15,921       5.83      16,264       6.72      15,383       6.93
Commercial                           68,125      24.95      52,496      21.70      37,969      17.09
Construction                         46,836      17.16       9,870       4.08       8,028       3.61
                                   --------   --------    --------   --------    --------   --------
Total real estate loans             181,663      66.54     141,310      58.41     133,809      60.24
                                   --------   --------    --------   --------    --------   --------

Consumer and other loans:
Commercial                           50,603      18.53      55,568      22.97      41,789      18.82
Home equity                          19,924       7.30      24,832      10.26      27,323      12.30
Other consumer                        7,843       2.87       7,924       3.28       8,255       3.72
Agricultural operating               13,000       4.76      12,289       5.08      10,938       4.92
                                   --------   --------    --------   --------    --------   --------
Total consumer and other loans       91,370      33.46     100,613      41.59      88,305      39.76
                                   --------   --------    --------   --------    --------   --------

Total loans receivable              273,033     100.00%    241,923     100.00%    222,111     100.00%
                                              ========               ========               ========

Less:
Loans in process                     16,677                  4,272                  3,248
Unearned loan fees and discounts      1,137                    692                    420
Allowance for loan losses             3,414                  2,563                  1,758
                                   --------               --------               --------
Loans receivable, net              $251,805               $234,396               $216,685
                                   ========               ========               ========

Loans held for sale                $  5,214               $  3,740               $  2,466
                                   ========               ========               ========

Average amount of loans:
Residential real estate            $     74               $     75               $     73
Agricultural real estate           $    114               $    137               $    121
Commercial real estate             $    349               $    338               $    317
Construction real estate           $    153               $    143               $    100
Consumer and other loans           $     38               $     40               $     34
</TABLE>


         Residential Real Estate Lending (Mortgage Banking). The Bank is active
in the origination of mortgage loans to enable borrowers to purchase or
refinance residential real estate. At March 31, 2003, $50.8 million, or 18.6%,
of the Bank's total gross loan portfolio consisted of loans secured by
residential real estate. The Bank presently originates both adjustable-rate
mortgage ("ARM") loans and fixed-rate mortgage loans with maturities of up to 30
years. Substantially all of the Bank's residential mortgage loans are secured by
property located in the Bank's primary market area. Very few of the properties
securing the Bank's residential mortgage loans are second homes or vacation
properties. The Bank's conventional mortgage loans are generally underwritten
and documented in accordance with the guidelines established by the Federal Home
Loan Mortgage Corporation ("Freddie Mac") and Federal National Mortgage
Association ("Fannie Mae").

         The Bank generally sells a majority of the residential mortgage loans
it originates. A majority of the loans sold by the Bank are sold to private
investors. The remainder of loans sold are purchased by Fannie Mae or Freddie
Mac. The Bank sells loans to Freddie Mac and Fannie Mae on a servicing-retained
basis, while loans sold to private investors are sold servicing-released.
Generally, loans are sold without recourse, although on occasion, the Bank has
sold loans with recourse. As of March 31, 2003, the Bank remains contingently
liable for approximately $149,000 of loans sold with recourse. The Bank's
decision to hold or sell loans is based on its asset/liability management
policies and goals and the market conditions for mortgages. See "Loan
Originations, Sales and Purchases."

                                        6
<PAGE>

         The Bank offers ARM loans at rates and terms competitive with market
conditions. The Bank currently offers ARM products that adjust annually after an
initial fixed period of one, three, five, or seven years based on the applicable
FHLB index. ARM loans held in the Bank's portfolio do not permit negative
amortization of principal and carry no prepayment restrictions. The periodic
interest rate cap (the maximum amount by which the interest rate may be
increased or decreased in a given period) on the Bank's ARM loans is generally
2% per adjustment period and the lifetime interest rate cap is generally 6% over
the initial interest rate of the loan. The terms and conditions of the ARM loans
offered by the Bank, including the index for interest rates, may vary from time
to time. Borrower demand for ARM loans versus fixed-rate mortgage loans is a
function of the level of interest rates, the expectations of changes in the
level of interest rates and the difference between the initial interest rates
and fees charged for each type of loan. The relative amount of fixed-rate
mortgage loans and ARM loans that can be originated at any time is largely
determined by the demand for each in a competitive environment.

         A significant portion of the Bank's ARM loans are not readily saleable
in the secondary market because they are not originated in accordance with the
purchase requirements of Freddie Mac or Fannie Mae. The Bank requires that
non-conforming loans demonstrate appropriate compensating factors that offset
their lack of conformity. Although such loans satisfy the Bank's underwriting
requirements, they are "non-conforming" because they do not satisfy property
limits, credit requirements, repayment capacities or various other requirements
imposed by Freddie Mac and Fannie Mae. Accordingly, the Bank's non-conforming
loans can be sold only to private investors on a negotiated basis. At March 31,
2003, the Bank's residential loan portfolio included $9.9 million of
non-conforming ARM loans. Generally, the Bank's non-conforming ARM loans bear a
higher rate of interest than similar conforming ARM loans. The Bank has found
that its origination of non-conforming loans has not resulted in increased
amounts of nonperforming loans.

         The Bank also originates residential mortgage loans that are insured by
the Federal Housing Administration, or guaranteed by the Veterans Administration
or the United States Department of Agriculture Rural Development. These loans
are sold to private investors or to the Idaho Housing and Finance Agency. A
significant portion of the Bank's residential mortgage loan originations in
recent years has consisted of government insured and guaranteed loans. Most of
these loans have been originated in the Coeur d'Alene area, where there is a
significant amount of entry-level housing available. The Bank generally sells
the government insured loans that it originates to private investors on a
servicing-released basis.

         The retention of ARM loans in the Bank's loan portfolio helps reduce
the Bank's exposure to changes in interest rates. There are, however,
unquantifiable credit risks resulting from the potential of increased costs due
to increased rates to be paid by the customer. It is possible that during
periods of rising interest rates the risk of default on ARM loans may increase
as a result of repricing and the increased payments required by the borrower.
Furthermore, because the ARM loans originated by the Bank generally provide, as
a marketing incentive, for "teaser rates" (i.e., initial rates of interest below
the rates that would apply were the adjusted index plus the applicable margin
initially used for pricing), these loans are subject to increased risks of
default or delinquency. The Bank attempts to reduce the potential for
delinquencies and defaults on ARM loans by qualifying the borrower based on the
borrower's ability to repay the ARM loan assuming a rate of 200 basis points
above the initial interest rate or the fully indexed rate, whichever is higher.
Another consideration is that although ARM loans allow the Bank to increase the
sensitivity of its asset base to changes in interest rates, the extent of this
interest sensitivity is limited by the periodic and lifetime interest rate
adjustment limits. Because of these considerations, the Bank has no assurance
that yields on ARM loans will be sufficient to offset increases in the Bank's
cost of funds.

         While one- to four-family residential real estate loans are generally
originated with 15 to 30 year terms, such loans typically remain outstanding for
substantially shorter periods. This is because borrowers often prepay their
loans in full upon sale of the property pledged as security or upon refinancing
the original loan. In addition, substantially all mortgage loans in the Bank's
loan portfolio contain due-on-sale clauses providing that the Bank may declare
the unpaid amount due and payable upon the sale of the property securing the
loan. Typically, the Bank enforces these due-on-sale clauses to the extent
permitted by law and as business judgment dictates. Thus, average loan maturity
is a function of, among other factors, the level of purchase and sale activity
in the real estate market, prevailing interest rates and the interest rates
payable on outstanding loans.

         The Bank generally obtains title insurance insuring the status of its
lien on all loans where real estate is the primary source of security. The Bank
also requires that fire and casualty insurance (and, if appropriate, flood
insurance) be maintained in an amount at least equal to the outstanding loan
balance.

                                        7
<PAGE>

         The Bank's lending policies generally limit the maximum loan-to-value
ratio on mortgage loans secured by owner-occupied properties to 95% of the
lesser of the appraised value or the purchase price, with the condition that
private mortgage insurance is generally required on loans with loan-to-value
ratios greater than 80%. Higher loan-to value ratios are available on certain
government insured programs.

         Construction Lending. The Bank invests a portion of its loan portfolio
in residential construction loans. This activity has been prompted by favorable
economic conditions primarily in Coeur d'Alene and Boise, Idaho, lower long-term
interest rates and an increased demand for housing units as a result of the
population growth in Idaho. At March 31, 2003, construction loans totaled $46.8
million, or 17.2% of total loans. At that date, the average amount of the Bank's
construction loans was approximately $153,000. The largest construction loan in
the Bank's portfolio at March 31, 2003 was $1.5 million. During the year ended
March 31, 2003, construction loans constituted 23.0% of total loan originations.
During fiscal year 2003, the Bank entered the Boise area and increased the
construction loan activity. Originations of construction loans from the Boise
loan production office was $52.1 million and originations of construction loans
from the Coeur d'Alene office was $20.4 million during the fiscal year ended
March 31, 2003.

         The Bank originates construction loans to professional home builders
and to individuals building their primary residence. In addition, the Bank
occasionally makes loans to builders for the acquisition of building lots.
Construction loans made by the Bank to professional home builders include both
those with a sales contract or permanent financing in place for the finished
homes and those for which purchasers for the finished homes may be identified
either during or following the construction period (speculative loans). At March
31, 2003, speculative loans totaled $17.5 million, or 37.3% of the total
construction loan portfolio. Construction loans to individuals are generally
converted to permanent mortgage loans upon completion of the construction
period. At March 31, 2003, custom construction loans to individuals totaled $3.4
million or 7.2% of the total construction loan portfolio.

         At March 31, 2003 and 2002, the composition of the Company's
construction loan portfolio was as follows:

                                                    At March 31,
                                     ------------------------------------------
                                            2003                   2002
                                            ----                   ----
                                      Amount     Percent     Amount     Percent
                                     --------   --------    --------   --------
                                               (Dollars in Thousands)

         Speculative construction    $ 17,471      37.30%   $  3,554      36.01%
         Presold construction          17,105      36.52       1,329      13.46
         Custom construction            3,354       7.16       2,446      24.78
         Permanent construction         7,677      16.39       2,416      24.48
         Land construction                963       2.06          --         --
         Participation construction       266       0.57         125       1.27
                                     --------   --------    --------   --------

         Total                       $ 46,836     100.00%   $  9,870     100.00%
                                     ========   ========    ========   ========


         Construction lending provides the Bank with the opportunity to achieve
higher interest rates and fees with shorter terms to maturity than does its
single-family permanent mortgage lending. Construction lending, however, is
generally considered to involve a higher degree of risk than single-family
permanent mortgage lending because of the inherent difficulty in estimating both
a property's value at completion of the project and the estimated cost of the
project. The nature of these loans is such that they are generally more
difficult to evaluate and monitor. If the estimate of construction cost proves
to be inaccurate, the Bank may be required to advance funds beyond the amount
originally committed to permit completion of the project. If the estimate of
value upon completion proves to be inaccurate, the Bank may be confronted with a
project whose value is insufficient to assure full repayment. Projects may also
be jeopardized by disagreements between borrowers and builders and by the
failure of builders to pay subcontractors. Loans to builders to construct homes
for which no purchaser has been identified (i.e., speculative loans) carry more
risk because the payoff for the loan is dependent on the builder's ability to
sell the property prior to the time that the construction loan is due. The Bank
has sought to address these risks by adhering to strict underwriting policies,
disbursement procedures, and monitoring practices. In addition, changes in the
local economy and real estate market could adversely affect the Bank's
construction loan portfolio. Accordingly, the Bank closely monitors sales and
listings in its real estate markets and will limit the amount of speculative
loans if it perceives unfavorable market conditions.

                                        8
<PAGE>

         Loans to builders for the construction of one- to four-family
residences are generally made for a term of 12 months. The Bank's loan policy
permits a maximum loan-to-value ratio of 75%. The Bank maintains a list of major
builders and establishes an aggregate credit limit for each major builder based
on the builder's financial strength, experience and reputation and monitors each
builder's borrowings on a monthly basis. Each major builder is required to
provide the Bank with annual financial statements and other credit information.
At March 31, 2003, the Bank had approved eight major builders, the largest
borrowing capacity of which was approximately $3.5 million. At March 31, 2003,
the Bank's major builders had total loans of $2.6 million outstanding. The Boise
loan production office had approved two major builders, one of which has the
largest borrowing capacity of approximately $3.5 million and an outstanding loan
balance of $2.6 million. For all other builders, the Bank reviews the financial
strength and credit of the builder on a loan by loan basis.

         The construction loan documents require that construction loan proceeds
be disbursed in increments as construction progresses. Disbursements are based
on periodic on-site inspections by either Bank personnel or independent fee
inspectors. At inception, the Bank also requires the builder (other than
approved major builders) to deposit funds to the loans-in-process account
covering the difference between the actual cost of construction and the loan
amount. Alternatively, the Bank may require that the borrower pay for the first
portion of construction costs before the loan proceeds are used. Major builders
are permitted to utilize the loan proceeds from the initiation of construction
and to carry the short-fall between construction costs and the loan amount,
based on their financial strength, until the property is sold.

         Agricultural Lending. Agricultural lending has been an important part
of the Bank's lending strategy since the mid-1980s. The Chief Executive Officer
has 28 years of experience, the Chief Operating Officer has 22 years of
experience, and the Vice President of Agricultural Lending has 25 years of
experience in agricultural lending. The existing staff's experience maintains
the Bank as one of the most experienced agricultural lenders in the area.

         Agricultural Real Estate Lending. The Bank presently originates both
adjustable-rate and fixed-rate loans secured by farmland located in the Bank's
market area, primarily around Lewiston. The Bank offers adjustable-rate loans
that adjust annually after an initial fixed period of one, three or five years.
Such loans generally provide for up to a 25-year term. The Bank also offers
fixed-rate loans with a ten-year term and a ten-year amortization schedule. At
March 31, 2003, agricultural real estate loans totaled $15.9 million, or 5.8% of
the Bank's total loan portfolio.

         Agricultural real estate loans generally are underwritten to Federal
Agricultural Mortgage Corporation ("Farmer Mac") standards so as to qualify for
sale in the secondary market, although the Bank currently retains most of these
loans for its portfolio. In originating an agricultural real estate loan, the
Bank considers the debt service coverage of the borrower's cash flow, the amount
of working capital available to the borrower, the financial history of the
borrower and the appraised value of the underlying property as well as the
Bank's experience with and knowledge of the borrower. An environmental
assessment is also performed. The maximum loan-to-value for agricultural real
estate loans is 75%. At March 31, 2003, the largest agricultural real estate
loan was $931,000, which was performing according to its terms, and the Bank's
average agricultural real estate loan was approximately $114,000.

         Agricultural real estate lending provides the Bank the opportunity to
earn yields higher than those generally available on standard conforming
residential real estate lending. However, agricultural real estate lending
involves a greater degree of risk than residential real estate loans. Payments
on agricultural real estate loans are dependent on the successful operation or
management of the farm property securing the loan. The success of the farm may
be affected by many factors outside the control of the farm borrower, including
adverse weather conditions that limit crop yields (such as hail, drought and
floods), declines in market prices for agricultural products and the impact of
government regulations (including changes in price supports, subsidies and
environmental regulations). In addition, many farms are dependent on a limited
number of key individuals whose injury or death may significantly affect the
successful operation of the farm. Farming in the Bank's market area is generally
dry-land farming, with wheat being the primary crop. Accordingly, adverse
circumstances affecting the area's wheat crop could have an adverse effect on
the Bank's agricultural loan portfolio.

         The Bank is approved to originate agricultural real estate loans
qualifying for purchase by the Farmer Mac II program, which requires Farm
Service Agency guarantees up to a maximum of 90% of the principal and interest.
Once the guaranteed loan has been funded, the Bank generally sells the
guaranteed portion of the loan to Farmer Mac II, while retaining the servicing
rights on the entire loan.

                                        9
<PAGE>

         Agricultural Operating Lending. At March 31, 2003, agricultural
operating loans totaled $13.0 million, or 4.8% of total loans. Agricultural
operating loans or lines of credit generally are made for a term of one to three
years and may be secured or unsecured. Such loans may be secured by a first or
second mortgage, or liens on property, vehicles, accounts receivable, crop held
or growing crop. Personal guarantees are frequently required for loans made to
corporations and their business entities. Payments on agricultural operating
loans depend on the successful operation of the farm, which may be adversely
affected by weather conditions that limit crop yields, fluctuations in market
prices for agricultural products, and changes in government regulations and
subsidies. Underwriting requires substantial cash working capital and annual
production income sufficient to meet payment obligations on an annual basis.

         The risk of crop damage by weather conditions can be reduced by the
farmer with multi-peril crop insurance which can guarantee set yields to provide
certainty of repayment. Unless the circumstances of the borrower merit
otherwise, the Bank generally does not require its borrowers to obtain
multi-peril crop or hail insurance. Farmers may mitigate the effect of price
declines through the use of futures contracts, options or forward contracts. The
Bank does not monitor or require the use of these instruments by its borrowers.

         Commercial Real Estate Lending. Commercial real estate lending has
become a significant part of the Bank's lending strategy. At March 31, 2003, the
Bank's commercial real estate loan portfolio totaled $68.1 million, or 25.0% of
total loans. During the year ended March 31, 2003, originations of commercial
real estate loans totaled $37.0 million and constituted 11.1% of total loan
originations. In connection with the expansion of the Bank's community banking
activities, the Bank intends to continue commercial real estate lending, subject
to market conditions.

         The Bank's commercial real estate loans include loans secured primarily
by owner-occupied buildings, storage facilities, manufactured home parks, small
office buildings, retail shops, multi-family residential properties and other
small commercial properties. The portfolio also contains a very limited amount
of specialty realty (i.e., restaurants, motels, etc.). Commercial real estate
loans in the Bank's portfolio primarily consists of loans originated by the
Bank. At March 31, 2003, the Bank's commercial real estate loan average size was
$349,000 and the largest loan was $4.3 million. Appraisals on properties that
secure commercial real estate loans are performed by an independent appraiser
engaged by the Bank before the loan is made. An environmental assessment is also
performed. Underwriting of commercial real estate loans includes a thorough
analysis of the cash flows generated by the real estate or the borrower's
business to support the debt service and the financial resources, experience,
and income level of the borrowers. Security debt coverage ratios, total debt
coverage ratios, and working capital assessments are key underwriting criteria.
Operating statements on most commercial loans are prepared and submitted to the
Bank on an annual basis.

         Commercial Business Lending. Commercial business lending is important
to the Bank's lending strategy. The Bank's real estate relationships have
resulted in commercial lending opportunities with these customers. This reflects
the Bank's objective to provide its commercial and small business customers with
a complete lending and banking relationship. At March 31, 2003, nonresidential
commercial business loans totaled $50.6 million, or 18.5% of the total loan
portfolio. The Bank presently originates both adjustable-rate and fixed-rate
loans secured by equipment, accounts receivable and inventory. Loans secured by
accounts receivable and inventory are generally operating lines of credit
renewed annually while equipment secured loans are term loans of up to five
years. To more accurately reflect the overall interest rate environment, the
Bank has changed the index used for adjustable rate loans from the one year
Treasury constant maturity to the applicable FHLB index.

         Commercial business lending provides the Bank with an opportunity to
receive interest at rates higher than those generally available from residential
mortgage loans. However, the collateral for these loans is usually more
difficult to evaluate and monitor and, therefore, these loans involve a higher
degree of risk than commercial real estate or one- to four-family residential
mortgage loans. Because loan payments are dependent on cash flow and
profitability of the business, and require successful operation and management
of the business entity, repayment of such loans may be affected by adverse
conditions in the commercial real estate market or the economy. Accordingly,
management strength, performance history within the business sector and other
financial resources are included in underwriting criteria for commercial
business loans. In addition, personal guarantees are typically required to
assure those strengths are backing the credit relationship.

                                       10
<PAGE>

         Of the commercial loan production in fiscal year 2003, operating loans
represent 60.9%, equipment loans 16.7%, working capital loans 10.2%, letters of
credit 7.0%, and small business and participation loans 5.2%. The Bank
participates in small business and industry guarantee programs that are designed
to assist businesses that cannot qualify for conventional financing.

         Consumer and Other Lending. The Bank originates a variety of consumer
and other non-mortgage loans. Such loans generally have shorter terms to
maturity and higher interest rates than mortgage loans. At March 31, 2003, the
Bank's consumer and other non-mortgage loans totaled approximately $27.8
million, or 10.2% of the Bank's total loans. The Bank's consumer loans consist
primarily of secured and unsecured consumer loans, automobile loans, boat loans,
recreation vehicle loans, home improvement and equity loans and deposit account
loans. The growth of the consumer loan portfolio in recent years has consisted
primarily of an increase in home equity loans, which the Bank has more
aggressively marketed.

         At March 31, 2003, home equity loans totaled $19.9 million. The Bank
offers both home equity second mortgage loans and lines of credit. The Bank's
home equity loans are secured by first or second mortgages on residential real
estate located in the Bank's primary market area. Home equity second mortgage
loans are generally offered with terms of five or ten years with fixed interest
rates and ten year term loans with adjustable interest rates. Home equity lines
of credit generally have adjustable interest rates based on the prime rate. Home
equity loans are generally underwritten at 80% loan to value including the first
mortgage with exceptions granted for demonstrated exceptional financial
strength.

         Consumer and non-mortgage loans entail greater risk than do residential
mortgage loans, particularly in the case of loans that are unsecured or secured
by rapidly depreciating assets such as automobiles and farm equipment. In such
cases, any repossessed collateral for a defaulted consumer loan may not provide
an adequate source of repayment of the outstanding loan balance as a result of
the greater likelihood of damage, loss or depreciation. The remaining deficiency
often does not warrant further substantial collection efforts against the
borrower beyond obtaining a deficiency judgment. In addition, consumer loan
collections are dependent on the borrower's continuing financial stability, and
thus are more likely to be adversely affected by job loss, divorce, illness or
personal bankruptcy. The application of various federal and state laws,
including federal and state bankruptcy and insolvency laws, may limit the amount
that can be recovered on such loans.

         Loans Held for Sale. Loans held for sale totaled $5.2 million at March
31, 2003 and $3.7 million at March 31, 2002. Loans originated and intended for
sale in secondary markets are carried at the lower of cost or estimated market
value in the aggregate. Loan fees (net of certain direct loan origination costs)
on loans held for sale are deferred until the related loans are sold or repaid.
Gains or losses on loan sales are recognized at the time of sale and determined
on a loan by loan basis. The Bank usually sells loans a short time after
originating the loan. The change in loan balances for loans held for sale at a
specific time fluctuates with the volume of real estate residential loan
originations.

         Maturity of Loan Portfolio. The following table sets forth certain
information at March 31, 2003 regarding the dollar amount of principal
repayments for loans becoming due during the years indicated, excluding loans
held for sale. All loans are included in the year in which the final contractual
payment is due. Demand loans, loans having no stated schedule of repayments and
no stated maturity, and overdrafts are reported as due within one year. The
table does not include any estimate of prepayments which significantly shortens
the average life of all loans and may cause the Bank's actual repayment
experience to differ from that shown below.

<TABLE>
<CAPTION>
                                               One       After 5 Years  After 10 Years
                               Within      Year Through     Through        Through         Beyond
                              One Year       5 Years        10 Years       15 Years       15 Years         Total
                             ----------     ----------     ----------     ----------     ----------     ----------
                                                                (In Thousands)
<S>                          <C>            <C>            <C>            <C>            <C>            <C>
Real estate loans:
  Residential                $      147     $    1,533     $    4,392     $    8,641     $   36,068     $   50,781
  Construction                   46,836             --             --             --             --         46,836
  Commercial                      4,615         10,409          7,686          8,049         37,366         68,125
Agricultural                      8,521          4,819          2,214          1,891         11,476         28,921
Commercial non-real estate       27,724         18,716          3,720            159            284         50,603
Consumer and other loans          2,187          5,587         13,487          5,196          1,310         27,767
                             ----------     ----------     ----------     ----------     ----------     ----------
Total loans receivable       $   90,030     $   41,064     $   31,499     $   23,936     $   86,504     $  273,033
                             ==========     ==========     ==========     ==========     ==========     ==========
</TABLE>

                                       11
<PAGE>

         The following table sets forth the dollar amount of all loans due after
March 31, 2003 that have fixed interest rates and have floating or adjustable
interest rates, excluding loans held for sale.

                                                    Fixed          Floating or
                                                    Rates       Adjustable Rates
                                                  ----------    ----------------
Real estate loans:                                        (In Thousands)
  Residential                                     $   34,596       $   16,185
  Construction                                        18,527           28,309
  Commercial                                           2,125           66,000
Agricultural                                           1,270           27,651
Commercial non-real estate                            10,091           40,512
Consumer and other loans                              19,310            8,457
                                                  ----------       ----------
Total loans receivable                            $   85,919       $  187,114
                                                  ==========       ==========

         Scheduled contractual principal repayments of loans do not reflect the
actual life of such assets. The average life of a loan is substantially less
than its contractual terms because of prepayments. In addition, due-on-sale
clauses on loans generally give the Bank the right to declare loans immediately
due and payable in the event, among other things, that the borrower sells the
real property subject to the mortgage and the loan is not repaid. The average
life of mortgage loans tends to increase, however, when current mortgage loan
market rates are substantially higher than rates on existing mortgage loans and,
conversely, decrease when rates on existing mortgage loans are substantially
higher than current mortgage loan market rates.

         Loan Solicitation and Processing. Loan applicants come primarily
through referrals from existing customers, realtors and homebuilders, and
walk-ins. The Bank also uses radio and newspaper advertising to create awareness
of its loan products. In addition to originating loans through its branch
offices, the Bank operates four mortgage loan centers, located in Coeur d'Alene,
Lewiston, Moscow, and Boise, Idaho, to supplement residential real estate loan
originations. The Bank does not utilize any loan correspondents, mortgage
brokers or other forms of wholesale loan origination. Upon receipt of a loan
application from a prospective borrower, a credit report and other data are
obtained to verify specific information relating to the loan applicant's
employment, income and credit standing. An appraisal of the real estate offered
as collateral generally is undertaken by a certified, independent fee appraiser.

         Residential real estate loans up to $322,700 that qualify for sale in
the secondary market may be approved by the Bank's underwriters. All other
portfolio real estate loans must be approved by two members of the management
loan committee. Delegated loan approval authority to residential lending centers
is authorized within prescribed limits for approved major builder loans. All
other construction loans must be approved by two members of the management loan
committee. Consumer loans up to $50,000 and home equity loans up to $150,000 may
be approved by designated underwriters provided that the total loan relationship
is $200,000 or less. All other consumer and home equity loans must be approved
by two members of the management loan committee.

         Loan Originations, Sales and Purchases. While the Bank originates both
adjustable-rate and fixed-rate loans, its ability to generate each type of loan
is dependent upon relative customer demand for loans in its market. For the year
ended March 31, 2003, the Bank originated $334.7 million of loans. Residential
real estate loan originations totaled $129.7 million for the year ended March
31, 2003, which constituted 38.7% of total loan originations.

         In the early 1990s, the Bank adopted a mortgage banking strategy
pursuant to which it seeks to generate income from the sale of loans (which may
be sold either servicing-retained or servicing-released) and from servicing fees
from loans sold on a servicing-retained basis. Generally, the level of loan sale
activity and, therefore, its contribution to the Bank's profitability depends on
maintaining a sufficient volume of loan originations. Changes in the level of
interest rates and the local economy affect the amount of loans originated by
the Bank and, thus, the amount of loan sales as well as origination and loan
fees earned. Gains on sales of loans totaled $2.4 million and $1.8 million
during the years ended March 31, 2003 and 2002, respectively. The Bank sells
loans on a loan-by-loan basis. Generally, a loan is committed to be sold and a
price for the loan is fixed at the time the interest rate on the loan is fixed,
which may be at the time the Bank issues a loan commitment or at the time the
loan closes. This eliminates the risk to the Bank that a rise in market interest
rates will reduce the value of a mortgage before it can be sold. When a loan is
committed to be sold before it is closed, the Bank is subject to the risk that
the loan fails to close or that the closing of the loan is delayed beyond the
specified delivery date. In that event, the Bank may be required to compensate
the purchaser for failure to deliver the loan. Generally, loans are sold without
recourse, although in the past the Bank has sold loans with recourse.

                                       12
<PAGE>

         In the past, the Bank has purchased loans and loan participations in
its primary market during periods of reduced loan demand. Through a consortium
of local financial institutions, the Bank occasionally purchases participation
interests in loans. Such loans include those secured by local low-income housing
projects, single family pre-sold and speculative housing, and commercial loans.
The Bank intends to supplement its origination of agricultural and commercial
real estate loans and agricultural operating and nonresidential commercial loans
by purchasing participations in such loans originated by other community banks
in Idaho and Eastern Washington. All such purchases will be made in conformance
with the Bank's underwriting standards. The Bank anticipates that it will
purchase only a small portion of any individual loan and that the originating
institution will retain a majority of the loan.

         The Bank has experienced an increase in the refinancing of loans during
fiscal year 2002 and throughout fiscal year 2003 due to the lower interest rates
available on loans.

         The following table shows total loans originated, purchased, sold and
repaid during the years indicated.

<TABLE>
<CAPTION>
                                                                    Year Ended March 31,
                                                           --------------------------------------
                                                              2003          2002          2001
                                                           ----------    ----------    ----------
                                                                       (In Thousands)
<S>                                                        <C>           <C>           <C>
Total loans receivable and loans held for sale at
beginning of year                                          $  245,663    $  224,577    $  193,032
                                                           ----------    ----------    ----------

Loans originated:
Real estate loans:
  Residential                                                 129,681        95,501        58,139
  Construction                                                 77,125        17,284        12,036
  Agricultural                                                  2,530         5,348         3,006
  Commercial                                                   37,026        25,895        16,914
Commercial non-real estate                                     56,599        58,932        42,019
Consumer and other loans                                       31,758        31,569        36,292
                                                           ----------    ----------    ----------
Total loans originated                                        334,719       234,529       168,406
                                                           ----------    ----------    ----------

Credit card advances                                            3,336         2,871         2,193
                                                           ----------    ----------    ----------
Loans originated, not funded                                  (59,596)      (57,218)      (56,813)
                                                           ----------    ----------    ----------

Loans purchased and loan participations:
  Real estate loans:
  Residential                                                      37           107            10
  Construction                                                    482           581           703
  Agricultural                                                  5,950         4,450         2,212
  Commercial                                                    2,900           690            --
Commercial non-real estate                                         --            --            --
Consumer and other loans                                           --            --         1,900
                                                           ----------    ----------    ----------
Total loans purchased                                           9,369         5,828         4,825
                                                           ----------    ----------    ----------

Loans sold:
Servicing retained                                            (26,696)      (31,303)       (7,529)
Servicing released                                           (122,115)      (61,641)      (41,842)
                                                           ----------    ----------    ----------
Total loans sold                                             (148,811)      (92,944)      (49,371)
                                                           ----------    ----------    ----------

Loan principal repayments                                     (78,263)      (56,786)      (30,803)
                                                           ----------    ----------    ----------

Refinanced loans                                              (28,170)      (15,194)       (6,892)
                                                           ----------    ----------    ----------
Change in total loans receivable                               32,584        21,086        31,545
                                                           ----------    ----------    ----------
Total loans receivable and loans held for sale at end of
  year                                                     $  278,247    $  245,663    $  224,577
                                                           ==========    ==========    ==========
</TABLE>

                                       13
<PAGE>

         Loan Commitments. The Bank issues commitments to originate loans
conditioned upon the occurrence of certain events. Such commitments are made on
specified terms and conditions and are honored for up to 90 days from the date
of loan approval. The Bank had outstanding loan commitments of approximately
$59.0 million at March 31, 2003. In addition, the Bank had commitments to fund
outstanding credit lines of approximately $46.4 million and commitments to fund
credit card lines of approximately $4.7 million at March 31, 2003.

         Loan Origination and Other Fees. The Bank, in some instances, receives
loan origination fees. Loan fees are a fixed dollar amount or a percentage of
the principal amount of the mortgage loan that is charged to the borrower for
funding the loan. The amount of fees charged by the Bank generally is 1% of the
loan amount. Current accounting standards require fees received (net of certain
loan origination costs) for originating loans to be deferred and amortized into
interest income over the contractual life of the loan. Net deferred fees or
costs associated with loans that are prepaid are recognized as income at the
time of prepayment. The Bank had $1.1 million of unearned loan fees and
discounts at March 31, 2003 and $692,000 of unearned loan fees and discounts at
March 31, 2002.

         Loan Servicing. The Bank sells residential real estate loans to Freddie
Mac and Fannie Mae on a servicing-retained basis and receives fees in return for
performing the traditional services of collecting individual payments and
managing the loans. In the past, the Bank has sold agricultural real estate
loans to private investors on a servicing-retained basis. At March 31, 2003, the
Bank was servicing $115.5 million of loans for others. Loan servicing includes
processing payments, accounting for loan funds and collecting and paying real
estate taxes, hazard insurance and other loan-related items, such as private
mortgage insurance. When the Bank receives the gross mortgage payment from
individual borrowers, it remits to the investor in the mortgage a predetermined
net amount based on the yield on that mortgage. The difference between the
coupon on the underlying mortgage and the predetermined net amount paid to the
investor is the gross loan servicing fee. In addition, the Bank retains certain
amounts in escrow for the benefit of the investor for which the Bank incurs no
interest expense but is able to invest. At March 31, 2003, the Bank held $1.1
million in escrow for its portfolio of loans serviced.

         Mortgage Servicing Rights. At March 31, 2003, mortgage servicing rights
were $826,000, which is net of an allowance for impairment on mortgage servicing
rights of $306,000. At March 31, 2002 mortgage servicing rights were $1.0
million, with no allowance for impairment on mortgage servicing. The cost of
mortgage servicing rights is amortized in proportion to, and over the period of,
estimated net servicing revenues. Impairment of mortgage servicing rights is
assessed based on the fair value of those rights. Fair values are estimated
using prices for similar assets with similar characteristics, when available, or
based upon discounted cash flows using market-based assumptions. For purposes of
measuring impairment, the rights are stratified by predominant characteristics,
such as interest rates and terms. The amount of impairment recognized is the
amount by which the capitalized mortgage servicing rights for a stratum exceeds
their fair value. The following table is an analysis of the changes in mortgage
servicing rights for the period noted:

                                       For the year ending   For the year ending
                                          March 31, 2003        March 31, 2002
                                          --------------        --------------
     Beginning Balance                    $    1,016,953        $      866,489
       Additions                                 278,745               283,457
       Amortization                             (163,594)             (132,993)
       Impairment recognized                    (306,290)                   --
                                          --------------        --------------
     Ending Balance                       $      825,814        $    1,016,953
                                          ==============        ==============


Delinquencies and Classified Assets

         Delinquent Loans. When a mortgage loan borrower fails to make a
required payment when due, the Bank institutes collection procedures. If the
loan is within the first three months of the term, the borrower is contacted by
telephone approximately ten days after the payment is due in order to permit the
borrower to make the payment before the imposition of a late fee. The first
notice is mailed to the borrower when the payment is 16 days past due. Attempts
to contact the borrower by telephone generally begin when a payment becomes 25
days past due. If the loan has not been brought current by the 60th day of
delinquency, the Bank attempts to interview the borrower in person and to
physically inspect the property securing the loan.

                                       14
<PAGE>

         In most cases, delinquencies are cured promptly; however, if by the
91st day of delinquency, or sooner if the borrower is chronically delinquent and
all reasonable means of obtaining payment on time have been exhausted,
foreclosure, according to the terms of the security instrument and applicable
law, is initiated. Interest income on loans delinquent over 90 days is reduced
by the full amount of accrued and uncollected interest.

         The following table sets forth information with respect to the Bank's
nonperforming assets and restructured loans within the meaning of generally
accepted accounting principles ("GAAP") at the years indicated. It is the policy
of the Bank to cease accruing interest on loans more than 90 days past due.

<TABLE>
<CAPTION>
                                                                At March 31,
                                                         --------------------------
                                                          2003      2002      2001
                                                         ------    ------    ------
                                                           (Dollars in Thousands)
<S>                                                      <C>       <C>       <C>
         Loans accounted for on a nonaccrual basis:
         Real estate loans:
           Residential                                   $  429    $  177    $  308
           Construction                                      --        --       316
           Agricultural                                      10        86        57
           Commercial                                       175        --        --
         Commercial non-real estate                         499        89       226
         Consumer and other loans                           138       239       254
                                                         ------    ------    ------
         Total                                            1,251       591     1,161
                                                         ------    ------    ------

         Accruing loans which are contractually
          past due 90 days or more:
         Real estate loans:
           Residential                                       --        --       125
           Construction                                      --        --        --
           Agricultural                                      --        --        --
           Commercial                                        --        --        --
         Commercial non-real estate                          --        --       157
         Consumer and other loans                            --        --        --
                                                         ------    ------    ------
         Total                                               --        --       282
                                                         ------    ------    ------

         Total of nonaccrual and 90 days past
          due loans                                       1,251       591     1,443
         Real estate owned                                  120       424        33
                                                         ------    ------    ------
         Total nonperforming loans                        1,371     1,015     1,476

           Restructured loans                            $  442    $  107    $   --
                                                         ------    ------    ------

         Total nonperforming assets                      $1,813    $1,122    $1,476
                                                         ======    ======    ======

         Nonaccrual and 90 days or more past due
           loans as a percent of loans receivable, net     0.50%     0.25%     0.66%
         Nonaccrual and 90 days or more past
           due loans as a percent of total assets          0.38%     0.19%     0.51%
         Nonperforming assets as a percent of
           total assets                                    0.55%     0.36%     0.53%
         Total nonperforming assets to total loans         0.66%     0.46%     0.66%
</TABLE>


         Interest income that would have been recorded for the year ended March
31, 2003 had nonaccruing loans been current in accordance with their original
terms amounted to approximately $61,000. The amount of interest included in
interest income on such loans for the year ended March 31, 2003 amounted to
approximately $56,000.

                                       15
<PAGE>

         Real Estate Owned. Real estate acquired by the Bank as a result of
foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned
("REO") until it is sold. When property is acquired, it is recorded at the lower
of its cost, which is the unpaid principal balance of the related loan plus
foreclosure costs, or 90 day liquidation value. Subsequent to foreclosure, REO
is carried at the lower of the foreclosed amount or fair value, less estimated
selling costs. At March 31, 2003, the Bank had $120,000 of residential real
estate REO.

         Asset Classification. The State of Washington has adopted various
regulations regarding problem assets of savings institutions. The regulations
require that each insured institution review and classify its assets on a
regular basis. In addition, in connection with examinations of insured
institutions, State of Washington examiners have authority to identify problem
assets and, if appropriate, require them to be classified. There are three
classifications for problem assets: substandard, doubtful and loss. Substandard
assets have one or more defined weaknesses and are characterized by the distinct
possibility that the insured institution will sustain some loss if the
deficiencies are not corrected. Doubtful assets have the weaknesses of
substandard assets with the additional characteristic that the weaknesses make
collection or liquidation in full on the basis of currently existing facts,
conditions and values questionable, and there is a high possibility of loss. An
asset classified as loss is considered uncollectible and of such little value
that continuance as an asset of the institution is not warranted. If an asset or
portion thereof is classified as loss, the insured institution establishes
specific allowances for loan losses for the full amount of the portion of the
asset classified as loss. All or a portion of general loan loss allowances
established to cover possible losses related to assets classified substandard or
doubtful may be included in determining an institution's regulatory capital,
while specific valuation allowances for loan losses generally do not qualify as
regulatory capital. Assets that do not currently expose the insured institution
to sufficient risk to warrant classification in one of the aforementioned
categories but possess weaknesses are classified as special mention and
monitored by the Bank.

         At March 31, 2003, classified assets of the Bank totaled $2.1 million.
Assets classified as loss totaled $27,000 and consisted of installment loans of
$24,000, a mortgage loan of $2,000, and overdrawn negotiable order of withdrawal
("NOW") accounts totaling $1,000. Assets classified as substandard totaled $2.1
million, which consisted of $685,000 of commercial business loans, $175,000 of
commercial real estate loans, $206,000 of consumer loans, $886,000 of
residential loans, and $120,000 in REO. Of the substandard assets, 75.8%
resulted from loss of income or unemployment through the downturn in economy,
including some bankruptcies, and 24.2% resulted from unpredicted management
decisions by the borrower. The decline in the logging, timber, and farming
industries remains a threat to the Bank's quality of assets. The aggregate
amounts of the Bank's classified assets at the dates indicated were as follows:

                                                  At March 31,
                                            ------------------------

                                             2003     2002     2001
                                            ------   ------   ------
                                                 (In Thousands)
                  Loss                      $   27   $   76   $   26
                  Doubtful                      24       --       --
                  Substandard                2,072    1,405    2,417
                                            ------   ------   ------
                  Total classified assets   $2,123   $1,481   $2,443
                                            ======   ======   ======


         Allowance for Loan Losses. The Bank has established a systematic
methodology for the determination of provisions for loan losses. The methodology
is set forth in a formal policy and takes into consideration the need for an
overall general valuation allowance as well as specific allowances that are tied
to individual loans.

         In originating loans, the Bank recognizes that losses will be
experienced and that the risk of loss will vary with, among other things, the
type of loan being made, the creditworthiness of the borrower over the term of
the loan, general economic conditions and, in the case of a secured loan, the
quality of the security for the loan. The Bank increases its allowance for loan
losses by charging provisions for loan losses against income.

                                       16
<PAGE>

         The general allowance is maintained to cover losses inherent in the
portfolio of performing loans. Management's periodic evaluation of the adequacy
of the allowance is based on management's evaluation of probable losses in the
loan portfolio. The evaluation of the adequacy of specific and general valuation
allowances is an ongoing process. This process includes information derived from
many factors including historical loss trends, trends in classified assets,
trends in delinquency and nonaccrual loans, trends in portfolio volume,
diversification as to type of loan, size of individual credit exposure, current
and anticipated economic conditions, loan policies, collection policies and
effectiveness, quality of credit personnel, effectiveness of policies,
procedures and practices, and recent loss experience of peer banking
institutions. Specific valuation allowances are established to absorb losses on
loans for which full collectibility may not be reasonably assured, based upon,
among other factors, the estimated fair market value of the underlying
collateral and estimated holding and selling costs. Generally, a provision for
losses is charged against income on a quarterly basis to maintain the
allowances.

         At March 31, 2003, the Bank had an allowance for loan losses of $3.4
million. The allowance for loan losses is maintained at an amount management
considers adequate to absorb losses inherent in the portfolio. Although
management believes that it uses the best information available to make such
determinations, future adjustments to the allowance for loan losses may be
necessary and results of operations could be significantly and adversely
affected if circumstances differ substantially from the assumptions used in
making the determinations.

         While the Bank believes it has established its existing allowance for
loan losses in accordance with GAAP, there can be no assurance that regulators,
in reviewing the Bank's loan portfolio, will not request the Bank to increase
significantly its allowance for loan losses. In addition, because future events
affecting borrowers and collateral cannot be predicted with certainty, there can
be no assurance that the existing allowance for loan losses is adequate or that
substantial increases will not be necessary should the quality of any loans
deteriorate as a result of the factors discussed above. Any material increase in
the allowance for loan losses would adversely affect the Bank's financial
condition and results of operations.

         The following table sets forth an analysis of the Bank's allowance for
loan losses for the years indicated. Where specific loan loss reserves have been
established, any differences between the loss allowances and the amount of loss
realized has been charged or credited to current income.

<TABLE>
<CAPTION>
                                                                       Year Ended March 31,
                                                                    --------------------------

                                                                     2003      2002      2001
                                                                    ------    ------    ------
                                                                      (Dollars in Thousands)
<S>                                                                 <C>       <C>       <C>
                  Allowance at beginning of year                    $2,563    $1,758    $1,604

                  Provision for loan losses(1)                       1,033     1,064       303

                  Recoveries                                            22         7         6

                  Charge-offs:
                  Real estate loans:
                    Residential                                         --        41        44
                    Construction                                        --        12        --
                  Commercial non-real estate                            18        16        --
                  Consumer and other loans                             186       197       111
                                                                    ------    ------    ------
                  Total charge-offs                                    204       266       155
                                                                    ------    ------    ------
                  Net charge-offs                                      182       259       149
                                                                    ------    ------    ------
                  Balance at end of year                            $3,414    $2,563    $1,758
                                                                    ======    ======    ======

                  Allowance for loan losses as a percent of total
                    loans receivable                                  1.25%     1.06%     0.79%
                  Net charge-offs to average outstanding loans        0.07%     0.12%     0.07%
</TABLE>

(1)  See "Item 6. Management's Discussion and Analysis of Financial Condition
     and Results of Operation -- Comparison of Operating Results for the Years
     Ended March 31, 2002 and 2003 -- Provisions for Loan Losses" for a
     discussion of the factors contributing to changes in the Bank's provision
     for loan losses between the years.

                                       17
<PAGE>

         The following table sets forth the breakdown of the allowance for loan
losses by loan category for the years indicated. The allocation of the allowance
to each category is not necessarily indicative of future losses and does not
restrict the use of the allowance to absorb losses in any other category.


<TABLE>
<CAPTION>
                                                               At March 31,
                                  ----------------------------------------------------------------------
                                          2003                     2002                     2001
                                  --------------------     --------------------     --------------------
                                                         (Dollars in Thousands)

                                            % of Loans               % of Loans               % of Loans
                                           in Category              in Category              in Category
                                             to Total                 to Total                 to Total
                                  Amount       Loans       Amount       Loans       Amount       Loans
                                  ------      ------       ------      ------       ------      ------
<S>                               <C>         <C>          <C>         <C>          <C>         <C>
Residential                       $  243       18.60%      $  268       25.91%      $  234       32.61%
Construction                         660       17.16          133        4.08          140        3.61
Agricultural                         425       10.59          365       11.80          318       11.85
Commercial                         1,973       43.48        1,571       44.67          882       35.91
Consumer and other loans             113       10.17          226       13.54          184       16.02
                                  ------      ------       ------      ------       ------      ------
Total allowance for loan losses   $3,414      100.00%      $2,563      100.00%      $1,758      100.00%
                                  ======      ======       ======      ======       ======      ======
</TABLE>


Investment Activities

         The Bank is permitted under federal law to invest in various types of
liquid assets, including U.S. Treasury obligations, securities of various
federal agencies and of state and municipal governments, deposits at the
FHLB-Seattle, certificates of deposit of federally insured institutions, certain
bankers' acceptances and federal funds. Subject to various restrictions, the
Bank may also invest a portion of its assets in commercial paper and corporate
debt securities. Savings institutions like the Bank are also required to
maintain an investment in FHLB stock.

         Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," requires
that investments be categorized as "held-to-maturity," "trading securities" or
"available-for-sale," based on management's intent as to the ultimate
disposition of each security. SFAS No. 115 allows debt securities to be
classified as "held-to-maturity" and reported in financial statements at
amortized cost only if the reporting entity has the positive intent and ability
to hold those securities to maturity. Securities that might be sold in response
to changes in market interest rates, changes in the security's prepayment risk,
increases in loan demand, or other similar factors cannot be classified as
"held-to-maturity." Debt and equity securities held for current resale are
classified as "trading securities." Such securities are reported at fair value,
and unrealized gains and losses on such securities would be included in
earnings. Debt and equity securities not classified as either "held-to-maturity"
or "trading securities" are classified as "available-for-sale." Such securities
are reported at fair value, and unrealized gains and losses on such securities
are excluded from earnings and reported as a net amount in a separate component
of equity. The unrealized gains and losses are also reported as a separate
component of the Statement of Other Comprehensive Income.

         The Chief Executive Officer and the Chief Financial Officer determine
appropriate investments in accordance with the Board of Directors' approved
investment policies and procedures. The Bank's investment policies generally
limit investments to FHLB obligations, certificates of deposit, U.S. Government
and agency securities, municipal bonds rated AAA, mortgage-backed securities and
certain types of mutual funds. The Bank does not purchase high-risk mortgage
derivative products. Investments are made based on certain considerations, which
include the interest rate, yield, settlement date and maturity of the
investment, the Bank's liquidity position, and anticipated cash needs and
sources (which in turn include outstanding commitments, upcoming maturities,
estimated deposits and anticipated loan amortization and repayments). The effect
that the proposed investment would have on the Bank's credit and interest rate
risk, and risk-based capital is also given consideration during the evaluation.

                                       18
<PAGE>

         Investment securities are purchased primarily for managing liquidity.
Generally, the Bank purchases mortgage-backed securities during times of reduced
loan demand. The Bank's investments are primarily long term, insured Bank
Qualified State of Idaho Municipal Bonds. Most of the mortgage-backed securities
are longer-term Freddie Mac and Fannie Mae back securities.

         The following table sets forth the composition of the Bank's investment
and mortgage-backed securities portfolios for the years indicated.

<TABLE>
<CAPTION>
                                                       At March 31,
                             ----------------------------------------------------------------

                                    2003                   2002                   2001
                             ------------------     ------------------     ------------------

                            Carrying   Percent of  Carrying   Percent of  Carrying   Percent of
                              Value    Portfolio     Value    Portfolio     Value    Portfolio
                             -------    -------     -------    -------     -------    -------
                                                  (Dollars in Thousands)
<S>                          <C>         <C>        <C>         <C>        <C>         <C>
Available-for-sale:
Investment securities        $16,813      63.61%    $12,524      52.28%    $12,568      38.54%
Mortgage-backed securities     7,649      28.94       9,293      38.79      17,704      54.30
                             -------    -------     -------    -------     -------    -------
Total available-for-sale      24,462      92.55      21,817      91.07      30,272      92.84
                             -------    -------     -------    -------     -------    -------

Held-to-maturity:
Mortgage-backed securities     1,969       7.45       2,140       8.93       2,335       7.16
                             -------    -------     -------    -------     -------    -------
Total held-to-maturity         1,969       7.45       2,140       8.93       2,335       7.16
                             -------    -------     -------    -------     -------    -------

Total                        $26,431     100.00%    $23,957     100.00%    $32,607     100.00%
                             =======    =======     =======    =======     =======    =======
</TABLE>


         The table below sets forth certain information regarding the carrying
value, average tax effected weighted yields and maturities of the Bank's
investment and mortgage-backed securities at March 31, 2003.

<TABLE>
<CAPTION>
                                                    Over                Over
                            Less Than              One to              Five to              Over Ten
                             One Year            Five Years           Ten Years              Years
                        -----------------    -----------------    -----------------    -----------------

                         Amount    Yield      Amount    Yield      Amount    Yield      Amount    Yield
                        -------   -------    -------   -------    -------   -------    -------   -------
                                                     (Dollars in Thousands)
<S>                     <C>          <C>     <C>          <C>     <C>          <C>     <C>          <C>
Investment Securities   $ 2,520      4.81%   $   964      2.70%   $   726      7.61%   $12,603      7.76%

Mortgage-backed
  Securities                 --        --         --        --         10      5.47      9,608      7.15
                        -------   -------    -------   -------    -------   -------    -------   -------
Total                   $ 2,520      4.81%   $   964      2.70%   $   736      7.58%   $22,211      7.50%
                        =======   =======    =======   =======    =======   =======    =======   =======
</TABLE>


         Other Investment Activities. The Bank purchases bank owned life
insurance policies (`BOLI") to offset future employee benefit costs. The
purchase of BOLI policies, and its increase in cash surrender value, is
classified as "bank owned and cash surrender value of life insurance policies"
in the Company's consolidated statements of financial condition. The income
related to the BOLI of $414,000, which is generated by the increase in the cash
surrender value of the policy, is classified in "other interest earning assets"
in the Company's consolidated statements of income.

                                       19
<PAGE>

Deposit Activities and Other Sources of Funds

         General. Deposits and loan repayments are the major sources of the
Bank's funds for lending and other investment purposes. Scheduled loan
repayments are a relatively stable source of funds, while deposit inflows and
outflows and loan prepayments are influenced significantly by general interest
rates and money market conditions. Borrowings through the FHLB-Seattle are used
to compensate for reductions in the availability of funds from other sources.
The Company also maintains an additional credit facility with Wells Fargo Bank.

         Deposit Accounts. Savings deposits are the primary source of funds for
the Bank's lending and investment activities and for its general business
purposes. Substantially all of the Bank's depositors are residents of Idaho and
Washington. Deposits are attracted from within the Bank's market area through
the offering of a broad selection of deposit instruments, including NOW
accounts, money market deposit accounts, regular savings accounts, certificates
of deposit and retirement savings plans. The Bank also offers "TT&L" (treasury,
taxes and loans) accounts for local businesses. Deposit account terms vary,
according to the minimum balance required, the time periods the funds must
remain on deposit and the interest rate, among other factors. In determining the
terms of its deposit accounts, the Bank considers current market interest rates,
profitability to the Bank, matching deposit and loan products and its customer
preferences and concerns. The Bank reviews its deposit mix and pricing weekly.
Currently, the Bank accepts brokered deposits with maturities between ninety
days and ten years. At March 31, 2003, the Bank had $23.0 million in brokered
deposits, which was 6.9% of total assets. At March 31, 2003, certificates of
deposit that are scheduled to mature in less than one year totaled $46.4
million. See "Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operation."

                                       20
<PAGE>

         The following table sets forth information concerning the Bank's
deposits at March 31, 2003.


<TABLE>
<CAPTION>
            Weighted
             Average                                                                Percentage
            Interest               Checking and                Minimum               of Total
              Rate               Savings Deposits               Amount    Balance    Deposits
            --------             ----------------              --------   --------   --------

                                  (In Thousands, except minimum amount)
<S>                    <C>                                     <C>        <C>          <C>
              0.15%    NOW                                     $     --   $ 62,480      29.15%
              1.30     Money Market Deposit                          --     24,238      11.31
              0.30     Passbook                                      --     15,535       7.25
                                                                          --------   --------
                                            Total Checking & Passbook      102,253      47.71
                                                                          --------   --------

                       Certificates of Deposit
                       -----------------------

              1.27     7 days to 179 days                         2,500     11,715       5.47
              1.49     6 months to less than 1 year               2,500     10,097       4.71
              2.25     1 year to less than 2 years                2,500      6,765       3.16
              3.21     2 years to less than 3 years               2,500      8,340       3.89
              4.06     2 years to 5 years - Add on                  500      7,897       3.68
              3.93     3 years to less than 4 years               2,500      2,846       1.33
              4.71     4 years to less than 5 years               2,500      1,791       0.84
              4.69     5 years to less than 10 years              2,500      7,786       3.63
              1.69     IRA Variable                                 500        762       0.36
              4.29     Brokered                                 100,000     23,049      10.75
              2.57     2 year Step Rate                           5,000      3,992       1.86
              1.58     3 year Step Rate                           5,000      8,465       3.95
              2.28     4 year Step Rate                           5,000      2,429       1.13
              4.44     Special, 2 years to less than 3 years     10,000     10,618       4.95
              5.17     Special, 4 years to less than 5 years      5,000      5,535       2.58
                                                                          --------   --------

                                        Total Certificates of Deposit      112,087      52.29
                                                                          --------   --------

                                                       Total Deposits     $214,340     100.00%
                                                                          ========   ========
</TABLE>


         The following table indicates the amount of the Bank's jumbo
certificates of deposit by time remaining until maturity as of March 31, 2003.
Jumbo certificates of deposit are certificates in amounts of more than $100,000.


                       Maturity Period                                Amount
                       ---------------                               --------
                                                                  (In Thousands)

                       Three months or less                          $  5,522
                       Over three through six months                    7,120
                       Over six through 12 months                         748
                       Over 12 months                                  33,846
                                                                     --------

                       Total jumbo certificates of deposit           $ 47,236
                                                                     ========


                                       21
<PAGE>

         Deposit Flow. The following table sets forth the balances (inclusive of
interest credited) and changes in dollar amounts of deposits in the various
types of accounts offered by the Bank between the years indicated.

<TABLE>
<CAPTION>
                                                                       At March 31,
                                -----------------------------------------------------------------------------------------
                                              2003                               2002                         2001
                                -------------------------------    -------------------------------    -------------------
                                            Percent                            Percent                            Percent
                                               of      Increase                   of      Increase                   of
                                 Amount      Total    (Decrease)    Amount      Total    (Decrease)    Amount      Total
                                --------   --------    --------    --------   --------    --------    --------   --------
                                                                 (Dollars in Thousands)

<S>                             <C>          <C>       <C>         <C>          <C>       <C>         <C>          <C>
NOW accounts                    $ 62,480      29.15%   $ 13,034    $ 49,446      25.21%   $  8,944    $ 40,502      25.67%
Passbook accounts                 15,535       7.25       1,615      13,920       7.10       1,571      12,349       7.83
Money market deposit
  Accounts                        24,238      11.31       3,169      21,069      10.74       6,036      15,033       9.53
Fixed-rate certificates
  which mature:
    Within 1 year                 24,574      11.46     (12,741)     37,315      19.03     (29,776)     67,091      42.52
    After 1 year, but within
     2 years                      11,757       5.49      (6,357)     18,114       9.24         136      17,978      11.39
    After 2 years, but within
     5 years                      65,498      30.56      22,032      43,466      22.16      38,844       4,622       2.93
    Certificates maturing
     Thereafter                   10,258       4.78      (2,535)     12,793       6.52      12,571         222       0.13
                                --------   --------    --------    --------   --------    --------    --------   --------
Total                           $214,340     100.00%   $ 18,217    $196,123     100.00%   $ 38,326    $157,797     100.00%
                                ========   ========    ========    ========   ========    ========    ========   ========
</TABLE>



         Time Deposits by Rates. The following table sets forth the time
deposits in the Bank categorized by rates at the dates indicated.

                                                   At March 31,
                                       ------------------------------------
                                          2003         2002         2001
                                       ----------   ----------   ----------
                                                  (In Thousands)

     0.0 - 2.99%                       $   51,940   $   38,770   $       90
     3.0 - 3.99%                           11,937        3,274        7,375
     4.0 - 4.99%                           32,126       32,634        5,295
     5.0 - 5.99%                           14,523       26,240       38,581
     6.0 - 6.99%                            1,219       10,193       37,874
     7.0 - 7.99%                              336          532          663
     8.0 - 8.99%                                6           45           35
     9% and over                               --           --           --
                                       ----------   ----------   ----------
     Total                             $  112,087   $  111,688   $   89,913
                                       ==========   ==========   ==========


                                       22
<PAGE>

         The following table sets forth the amount and maturities of time
deposits at March 31, 2003.


<TABLE>
<CAPTION>
                                                     Amount Due
                                                     ----------
                                                                                             Percent
                              After        After        After                                of Total
               Less Than     1 to 2       2 to 3       3 to 4        After                 Certificate
               One Year       Years        Years        Years       4 Years       Total      Accounts
              ----------   ----------   ----------   ----------   ----------   ----------   ----------
                                               (Dollars in Thousands)

<S>           <C>          <C>          <C>          <C>          <C>          <C>               <C>
0.0 - 2.99%   $   30,244   $    9,904   $    8,858   $    2,495   $      439   $   51,940        46.34%
3.0 - 3.99%          920        2,983        1,643          151        6,240       11,937        10.65
4.0 -4.99%        10,846        5,047        3,008        6,935        6,290       32,126        28.66
5.0 - 5.99%        3,665        1,382          858        8,577           41       14,523        12.96
6.0 - 6.99%          390          452          298           --           79        1,219         1.09
7.0 - 7.99%          320           16           --           --           --          336         0.30
8.0 - 8.99%            6           --           --           --           --            6         0.00
9% and over           --           --           --           --           --           --           --
              ----------   ----------   ----------   ----------   ----------   ----------   ----------
Total         $   46,391   $   19,784   $   14,665   $   18,158   $   13,089   $  112,087       100.00%
              ==========   ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>



         Deposit Activity. The following table sets forth the deposit activities
of the Bank for the years indicated.

                                                    Year Ended March 31,
                                            ------------------------------------
                                               2003         2002         2001
                                            ----------   ----------   ----------
                                                       (In Thousands)

Beginning balance                           $  196,123   $  157,797   $  144,907
                                            ----------   ----------   ----------

Net increase
  before interest credited                      13,574       32,640        6,821
Interest credited                                4,643        5,686        6,069
                                            ----------   ----------   ----------
Net increase
  in savings deposits                           18,217       38,326       12,890
                                            ----------   ----------   ----------

Ending balance                              $  214,340   $  196,123   $  157,797
                                            ==========   ==========   ==========


                                       23
<PAGE>

         Borrowings. The Bank utilizes advances from the FHLB-Seattle to
supplement its supply of lendable funds and to meet deposit withdrawal
requirements. The FHLB-Seattle functions as a central reserve bank, providing
credit for savings associations and certain other member financial institutions.
As a member of the FHLB-Seattle, the Bank is required to own capital stock in
the FHLB-Seattle and is authorized to apply for advances on the security of such
stock and certain of its mortgage loans and other assets (principally securities
that are obligations of, or guaranteed by, the U.S. Government) provided certain
creditworthiness standards have been met. Advances are made pursuant to several
different credit programs. Each credit program has its own interest rate and
range of maturities. Depending on the program, limitations on the amount of
advances are based on the financial condition of the member institution and the
adequacy of collateral pledged to secure the credit. The Bank is currently
authorized to borrow from the FHLB up to an amount equal to 42% of total assets,
providing that the Bank holds sufficient collateral.

         The following tables set forth certain information regarding borrowings
by the Bank for the years indicated:

                                                         At or For the
                                                     Year Ended March 31,
                                               --------------------------------
                                                 2003        2002        2001
                                               --------    --------    --------
                                                    (Dollars in Thousands)
Maximum amount of FHLB advances outstanding
  at any month end during the year             $ 83,586    $ 93,837    $ 96,580
Approximate average FHLB advances
  outstanding during the year                    82,271      83,395      86,089
Balance of FHLB advances outstanding
  at end of year                                 81,816      79,722      90,917
Weighted average rate paid on
  FHLB advances at end of year                     4.93%       4.91%       5.57%
Approximate weighted average rate paid on
  FHLB advances during the year                    4.94%       5.19%       6.31%


<TABLE>
<CAPTION>
                                                     One Year to     Five Years to
                                   Less than One    Less than Five   Less than Ten     Greater Than
                                        Year            Years            Years          Ten Years
                                   -------------    -------------    -------------    -------------

<S>                                <C>              <C>              <C>              <C>
Maturities of advances from FHLB   $  13,551,600    $  44,881,104    $  22,162,557    $   1,220,967
Range of interest rates             1.33% - 6.62%    4.40% - 5.90%    3.33% - 6.21%        6.66%
Weighted average interest rate          4.70%            5.29%            4.27%            6.66%
Percentage of total advances           16.56%           54.86%           27.09%            1.49%
</TABLE>


         At March 31, 2003, there were $30.8 million of advances from Federal
Home Loan Bank that were callable, of which $10.0 million of five to less than
ten year advances were callable within one year, $0.8 million of five to less
than ten year advances were callable within one year and $20.0 million of five
to less than ten year advances were callable within one to less than five years.
As of March 31, 2002, there were $10.0 million of advances from Federal Home
Loan Bank that were callable, which were five to less than ten year advances
that were callable within one to less than five years.

         The Bank also maintains additional credit with Wells Fargo Bank,
available funds totaling $10.0 million. There were no outstanding advances under
this facility at March 31, 2003.

Competition

         The Bank operates in a competitive market for the attraction of savings
deposits (its primary source of lendable funds) and in the origination of loans.
Its most direct competition for savings deposits has historically come from
commercial banks, credit unions and other thrifts operating in its market area.
The Bank's competitors include large regional and superregional banks. These
institutions are significantly larger than the Bank and therefore have greater
financial and marketing resources than the Bank's. Particularly in times of high
interest rates, the Bank has faced additional significant competition for

                                       24
<PAGE>

investors' funds from short-term money market securities and other corporate and
government securities. The Bank's competition for loans comes from commercial
banks and other thrifts operating in its market as well as from mortgage bankers
and brokers, consumer finance companies, and, with respect to agricultural
loans, government sponsored lending programs. Such competition for deposits and
the origination of loans may limit the Bank's growth and profitability in the
future.

Subsidiary Activities

         The Bank has one subsidiary, Tri-Star Financial Corporation, which
sells life insurance and tax deferred annuities on an agency basis. At March 31,
2003, the Bank's equity investment in its subsidiary was $52,000.

Personnel

         As of March 31, 2003, the Bank had 135 full-time and 13 part-time
employees. The number of average full-time equivalent employees increased 12.3%
from March 31, 2002 to March 31, 2003. The average number of full-time
equivalent employees at March 31, 2003 was 137. The average number of full time
equivalent employees at March 31, 2002 was 122. The Bank used temporary services
to hire between one and four employees during the year ended March 31, 2003. At
March 31, 2003 there was one temporary hire. The employees are not represented
by a collective bargaining unit and the Bank believes its relationship with its
employees to be good.


                                   REGULATION

FirstBank Northwest

         General. As a state-chartered, federally insured depository
institution, the Bank is subject to extensive regulation. Lending activities and
other investments must comply with various statutory and regulatory
requirements, including prescribed minimum capital standards. The Bank is
regularly examined by the FDIC and the Washington Department of Financial
Institutions, Division of Banks ("Division") and files periodic reports
concerning the Bank's activities and financial condition with its regulators.
The Bank's relationship with depositors and borrowers also is regulated to a
great extent by both federal law and the laws of the State of Washington,
especially in such matters as the ownership of savings accounts and the form and
content of mortgage documents.

         Federal and state banking laws and regulations govern all areas of the
operation of the Bank, including reserves, loans, mortgages, capital, issuance
of securities, payment of dividends and establishment of branches. Federal and
state bank regulatory agencies also have the general authority to limit the
dividends paid by insured banks and bank holding companies if such payments
should be deemed to constitute an unsafe and unsound practice. The primary
federal regulators of the Company and the Bank have authority to impose
penalties, initiate civil and administrative actions and take other steps
intended to prevent banks from engaging in unsafe or unsound practices.

         State Regulation and Supervision. As a state-chartered savings bank,
the Bank is subject to applicable provisions of Washington law and the
regulations of the Division adopted thereunder. Washington law and regulations
govern the Bank's ability to take deposits and pay interest thereon, to make
loans on or invest in residential and other real estate, to make consumer loans,
to invest in securities, to offer various banking services to its customers, and
to establish branch offices. Under state law, savings banks in Washington also
generally have all of the powers that federal mutual savings banks have under
federal laws and regulations. The Bank is subject to periodic examination and
reporting requirements by and of the Division.

         Deposit Insurance. The FDIC is an independent federal agency that
insures the deposits, up to prescribed statutory limits, of depository
institutions. The FDIC currently maintains two separate insurance funds: the
Bank Insurance Fund ("BIF") and the SAIF. The Bank's deposit accounts are
insured by the SAIF to the maximum extent permitted by law. As insurer of the
Bank's deposits, the FDIC has examination, supervisory and enforcement authority
over the Bank.

                                       25
<PAGE>

         The FDIC has established a risk-based system for setting deposit
insurance assessments. Under the risk-based assessment system, an institution's
insurance assessment varies according to the level of capital the institution
holds on the balance of insured deposits during the preceding two quarters, and
the degree to which it is the subject of supervisory concern. In addition,
regardless of the potential risk to the insurance fund, federal law requires the
ratio of reserves to insured deposits at $1.25 per $100. Both funds currently
meet this reserve ratio. Since 1997, the assessment rate for both SAIF and BIF
deposits ranged from zero to 0.27% of covered deposits. As a well capitalized
bank, the Bank is qualified for the lowest rate on its deposits for 2003.

         In addition to deposit insurance assessments, the FDIC is authorized to
collect assessments against insured deposits to be paid to the Financing
Corporation ("FICO") to service FICO debt incurred in the 1980s to help fund the
thrift industry cleanup. The FICO assessment rate is adjusted quarterly.

         Prior to 2000, the FICO assessment rate for BIF-insured deposits was
one-fifth the rate applicable to deposits insured by the SAIF. Beginning in
2000, SAIF- and BIF-insured deposits were assessed at the same rate by FICO. As
a result, BIF FICO assessments will be higher than in previous periods while
SAIF FICO assessments will be lower. For the first quarter of 2003, the
annualized rate was $1.68 per $100 of insured deposits.

         The FDIC may terminate the deposit insurance of any insured depository
institution if it determines after a hearing that the institution has engaged or
is engaging in unsafe or unsound practices, is in an unsafe or unsound condition
to continue operations, or has violated any applicable law, regulation, order or
any condition imposed by an agreement with the FDIC. It also may suspend deposit
insurance temporarily during the hearing process for the permanent termination
of insurance, if the institution has no tangible capital. If insurance of
accounts is terminated, the accounts at the institution at the time of
termination, less subsequent withdrawals, shall continue to be insured for a
period of six months to two years, as determined by the FDIC. Management is
aware of no existing circumstances that could result in termination of the
deposit insurance of the Bank.

         Prompt Corrective Action. The FDIC is required to take certain
supervisory actions against undercapitalized savings institutions, the severity
of which depends upon the institution's degree of undercapitalization.
Generally, an institution that has a ratio of total capital to risk-weighted
assets of less than 8%, a ratio of Tier I (core) capital to risk-weighted assets
of less than 4%, or a ratio of core capital to total assets of less than 4% (3%
or less for institutions with the highest examination rating) is considered to
be undercapitalized. An institution that has a total risk-based capital ratio
less than 6%, a Tier I capital ratio of less than 3% or a leverage ratio that is
less than 3% is considered to be significantly undercapitalized and an
institution that has a tangible capital to assets ratio equal to or less than 2%
is deemed to be critically undercapitalized. Subject to a narrow exception, the
FDIC is required to appoint a receiver or conservator for a savings institution
that is critically undercapitalized. FDIC regulations also require that a
capital restoration plan be filed with the FDIC within 45 days of the date a
savings institution receives notice that it is undercapitalized, significantly
undercapitalized or critically undercapitalized. Compliance with the plan must
be guaranteed by any parent holding company in an amount of up to the lesser of
5% of the institution's assets or the amount which would bring the institution
into compliance with all capital standards. In addition, numerous mandatory
supervisory actions become immediately applicable to an undercapitalized
institution, including, but not limited to, increased monitoring by regulators
and restrictions on growth, capital distributions and expansion. The FDIC also
could take any one of a number of discretionary supervisory actions, including
the issuance of a capital directive and the replacement of senior executive
officers and directors.

         At March 31, 2003, the Bank was categorized as "well capitalized" under
the prompt corrective action regulations of the FDIC.

         Standards for Safety and Soundness. The federal banking regulatory
agencies have prescribed, by regulation, standards for all insured depository
institutions relating to: (i) internal controls, information systems and
internal audit systems; (ii) loan documentation; (iii) credit underwriting; (iv)
interest rate risk exposure; (v) asset growth; (vi) asset quality; (vii)
earnings; and (viii) compensation, fees and benefits ("Guidelines"). The
Guidelines set forth the safety and soundness standards that the federal banking
agencies use to identify and address problems at insured depository institutions
before capital becomes impaired. If the FDIC determines that the Bank fails to
meet any standard prescribed by the Guidelines, the agency may require the Bank
to submit to the agency an acceptable plan to achieve compliance with the
standard. FDIC regulations establish deadlines for the submission and review of
such safety and soundness compliance plans.

                                       26
<PAGE>

         Capital Requirements. FDIC regulations recognize two types or tiers of
capital: core ("Tier 1") capital and supplementary ("Tier 2") capital. Tier 1
capital generally includes common stockholders' equity and noncumulative
perpetual preferred stock, less most intangible assets. Tier 2 capital, which is
limited to 100 percent of Tier 1 capital, includes such items as qualifying
general loan loss reserves, cumulative perpetual preferred stock, mandatory
convertible debt, term subordinated debt and limited life preferred stock;
however, the amount of term subordinated debt and intermediate term preferred
stock (original maturity of at least five years but less than 20 years) that may
be included in Tier 2 capital is limited to 50 percent of Tier 1 capital.

         The FDIC currently measures an institution's capital using a leverage
limit together with certain risk-based ratios. The FDIC's minimum leverage
capital requirement specifies a minimum ratio of Tier 1 capital to average total
assets. Most banks are required to maintain a minimum leverage ratio of at least
4% to 5% of total assets. The FDIC retains the right to require a particular
institution to maintain a higher capital level based on an institution's
particular risk profile. The Bank calculated its leverage ratio to be 8.4% as of
March 31, 2003.

         FDIC regulations also establish a measure of capital adequacy based on
ratios of qualifying capital to risk-weighted assets. Assets are placed in one
of four categories and given a percentage weight -- 0%, 20%, 50% or 100% --
based on the relative risk of that category. In addition, certain
off-balance-sheet items are converted to balance-sheet credit equivalent
amounts, and each amount is then assigned to one of the four categories. Under
the guidelines, the ratio of total capital (Tier 1 capital plus Tier 2 capital)
to risk-weighted assets must be at least 8%, and the ratio of Tier 1 capital to
risk-weighted assets must be at least 4%. The Bank has calculated its total
risk-based ratio to be 13.1%, as of March 31, 2003, and its Tier 1 risk-based
capital ratio to be 11.8%. In evaluating the adequacy of a bank's capital, the
FDIC may also consider other factors that may affect the bank's financial
condition. Such factors may include interest rate risk exposure, liquidity,
funding and market risks, the quality and level of earnings, concentration of
credit risk, risks arising from nontraditional activities, loan and investment
quality, the effectiveness of loan and investment policies, and management's
ability to monitor and control financial operating risks.

         Federal statutes establish a supervisory framework based on five
capital categories: well capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized and critically undercapitalized. An institution's
category depends upon where its capital levels are in relation to relevant
capital measure, which include a risk-based capital measure, a leverage ratio
capital measure, and certain other factors. The federal banking agencies have
adopted regulations that implement this statutory framework. Under these
regulations, an institution is treated as well capitalized if its ratio of total
capital to risk-weighted assets is 10% or more, its ratio of core capital to
risk-weighted assets is 6% or more, its ratio of core capital to adjusted total
assets is 5% or more, and it is not subject to any federal supervisory order or
directive to meet a specific capital level. In order to be adequately
capitalized, an institution must have a total risk-based capital ratio of not
less than 8%, a Tier 1 risk-based capital ratio of not less than 4%, and a
leverage ratio of not less than 4%. Any institution which is neither well
capitalized nor adequately capitalized will be considered undercapitalized.

         Undercapitalized institutions are subject to certain prompt corrective
action requirements, regulatory controls and restrictions which become more
extensive as an institution becomes more severely undercapitalized. Failure by
the Bank to comply with applicable capital requirements would, if unremedied,
result in restrictions on its activities and lead to enforcement actions
including, but not limited to, the issuance of a capital directive to ensure the
maintenance of required capital levels. Banking regulators will take prompt
corrective action with respect to depository institutions that do not meet
minimum capital requirements. Additionally, approval of any regulatory
application filed for their review may be dependent on compliance with capital
requirements.

         FDIC capital requirements are designated as the minimum acceptable
standards for banks whose overall financial condition is fundamentally sound,
which are well-managed and have no material or significant financial weaknesses.
The FDIC capital regulations state that, where the FDIC determines that the
financial history or condition, including off-balance sheet risk, managerial
resources and/or the future earnings prospects of a bank are not adequate and/or
a bank has a significant volume of assets classified substandard, doubtful or
loss or otherwise criticized, the FDIC may determine that the minimum adequate
amount of capital for that bank is greater than the minimum standards
established in the regulation.

                                       27
<PAGE>

         The Division requires that net worth equal at least 5% of total assets.
Intangible assets must be deducted from net worth and assets when computing
compliance with this requirement. At March 31, 2003, the Bank had a Tier 1
capital to average assets ratio of 8.4%, a Tier 1 capital to risk-weighted
assets ratio of 11.8%, and a Total capital to risk-weighted assets ratio of
13.1%.

         The Bank's management believes that, under the current regulations, the
Bank will continue to meet its minimum capital requirements in the foreseeable
future. However, events beyond the control of the Bank, such as a downturn in
the economy in areas where the Bank has most of its loans, could adversely
affect future earnings and, consequently, the ability of the Bank to meet its
capital requirements.

         Activities and Investments of Insured State-Chartered Banks. Federal
law generally limits the activities and equity investments of FDIC insured,
state-chartered banks to those that are permissible for national banks. Under
regulations dealing with equity investments, an insured state bank generally may
not directly or indirectly acquire or retain any equity investment of a type, or
in an amount, that is not permissible for a national bank. An insured state bank
is not prohibited from, among other things, (i) acquiring or retaining a
majority interest in a subsidiary, (ii) investing as a limited partner in a
partnership the sole purpose of which is direct or indirect investment in the
acquisition, rehabilitation or new construction of a qualified housing project,
provided that such limited partnership investments may not exceed 2% of the
Bank's total assets, (iii) acquiring up to 10% of the voting stock of a company
that solely provides or reinsures directors', trustees' and officers' liability
insurance coverage or bankers' blanket bond group insurance coverage for insured
depository institutions, and (iv) acquiring or retaining the voting shares of a
depository institution if certain requirements are met.

         Federal law provides that an insured state-chartered bank may not,
directly, or indirectly through a subsidiary, engage as "principal" in any
activity that is not permissible for a national bank unless the FDIC has
determined that such activities would pose no risk to the insurance fund of
which it is a member and the bank is in compliance with applicable regulatory
capital requirements. Any insured state-chartered bank directly or indirectly
engaged in any activity that is not permitted for a national bank must cease the
impermissible activity.

         Federal Home Loan Bank System. The FHLB - Seattle serves as a reserve
or central bank for the member institutions within its assigned region. It is
funded primarily from proceeds derived from the sale of consolidated obligations
of the FHLB. It makes loans (i.e., advances) to members in accordance with
policies and procedures established by the Federal Housing Finance Board and the
Board of Directors of the FHLB - Seattle. As a member, the Bank is required to
purchase and hold stock in the FHLB - Seattle in an amount equal to the greater
of 1% of its aggregate unpaid home loan balances at the beginning of the year or
an amount equal to 5% of FHLB advances outstanding. As of March 31, 2003, the
Bank held stock in the FHLB of Seattle in the amount of $5.7 million and had
advances totaling $81.8 million, which mature in 2003 through 2027 at interest
rates ranging from 1.33% to 6.66%. See "Business -- Deposit Activities and Other
Sources of Funds -- Borrowings."

         Federal Reserve System. The Federal Reserve Board requires under
Regulation D that all depository institutions, including savings banks, maintain
reserves on transaction accounts or non-personal time deposits. These reserves
may be in the form of cash or non-interest-bearing deposits with the regional
Federal Reserve Bank. Negotiable order of withdrawal accounts and other types of
accounts that permit payments or transfers to third parties fall within the
definition of transaction accounts and are subject to Regulation D reserve
requirements, as are any non-personal time deposits at a savings bank. Under
Regulation D, a bank must maintain reserves against net transaction accounts in
the amount of 3% on amounts of $42.1 million or less, plus 10% on amounts in
excess of $42.1 million. In addition, a bank may designate and exempt $6.0
million of certain reservable liabilities from these reserve requirements. These
amounts and percentages are subject to adjustment by the Federal Reserve. The
reserve requirement on non-personal time deposits with original maturities of
less than 1.5 years is 0%. As of March 31, 2003, the Bank's deposit with the
Federal Reserve Bank and vault cash exceeded its reserve requirements.

         Affiliate Transactions. Various legal limitations restrict the Bank
from lending or otherwise supplying funds to the Company, generally limiting a
single transaction with the Company to 10% of the Bank's capital and surplus and
limiting all such transactions to 20% of the Bank's capital and surplus. These
transactions, including extensions of credit, sales of securities or assets and
provision of services, also must be on terms and conditions consistent with safe
and sound banking practices, including credit standards, that are substantially
the same or at least as favorable to the Bank as those prevailing at the time
for transactions with unaffiliated companies.

                                       28
<PAGE>

         Federally insured banks are subject, with certain exceptions, to
certain restrictions on extensions of credit to their parent holding companies
or other affiliates, on investments in the stock or other securities of
affiliates and on the taking of such stock or securities as collateral from any
borrower. In addition, such banks are prohibited from engaging in certain tie-in
arrangements in connection with any extension of credit or the providing of any
property or service.

         Community Reinvestment Act. Banks are also subject to the provisions of
the Community Reinvestment Act of 1977, which requires the appropriate federal
bank regulatory agency, in connection with its regular examination of a bank, to
assess the bank's record in meeting the credit needs of the community serviced
by the bank, including low and moderate income neighborhoods. The regulatory
agency's assessment of the bank's record is made available to the public.
Further, this assessment is required of any bank which has applied, among other
things, to establish a new branch office that will accept deposits, relocate an
existing office or merge or consolidate with, or acquire the assets or assume
the liabilities of, a federally regulated financial institution.

         Dividends. Dividends from the Bank constitute the major source of funds
for dividends which may be paid by the Company. The amount of dividends payable
by the Bank to the Company depend upon the Bank's earnings and capital position,
and is limited by federal and state laws, regulations and policies. According to
Washington law, the Bank may not declare or pay a cash dividend on its capital
stock if it would cause its net worth to be reduced below (i) the amount
required for liquidation accounts or (ii) the net worth requirements, if any,
imposed by the Director of the Division. Dividends on the Bank's capital stock
may not be paid in an aggregate amount greater than the aggregate retained
earnings of the Bank, without the approval of the Director of the Division.

         The amount of dividends actually paid during any one period will be
strongly affected by the Bank's management policy of maintaining a strong
capital position. Federal law further provides that no insured depository
institution may make any capital distribution (which would include a cash
dividend) if, after making the distribution, the institution would be
"undercapitalized," as defined in the prompt corrective action regulations.
Moreover, the federal bank regulatory agencies also have the general authority
to limit the dividends paid by insured banks if such payments should be deemed
to constitute an unsafe and unsound practice.

Savings and Loan Holding Company Regulations

         Holding Company Acquisitions. The Home Owners Loan Act ("HOLA") and
Office of Thrift Supervision ("OTS") regulations issued thereunder, generally
prohibit a savings and loan holding company, without prior OTS approval, from
acquiring more than 5% of the voting stock of any other savings association or
savings and loan holding company or controlling the assets thereof. They also
prohibit, among other things, any director or officer of a savings and loan
holding company, or any individual who owns or controls more than 25% of the
voting shares of such holding company, from acquiring control of any savings
association which is not a subsidiary of such savings and loan holding company,
unless the acquisition is approved by the OTS.

         Holding Company Activities. As a unitary savings and loan holding
company, the Company generally is not subject to activity restrictions under the
HOLA. If the Company acquires control of a savings association as a separate
subsidiary other than in a supervisory acquisition, it would become a multiple
savings and loan holding company. There generally are more restrictions on the
activities of a multiple savings and loan holding company than on those of a
unitary savings and loan holding company. The HOLA provides that, among other
things, no multiple savings and loan holding company or subsidiary thereof which
is not an insured association shall commence or continue for more than two years
after becoming a multiple savings and loan association holding company or
subsidiary thereof, any business activity other than: (i) furnishing or
performing management services for a subsidiary insured institution, (ii)
conducting an insurance agency or escrow business, (iii) holding, managing, or
liquidating assets owned by or acquired from a subsidiary insured institution,
(iv) holding or managing properties used or occupied by a subsidiary insured
institution, (v) acting as trustee under deeds of trust, (vi) those activities
previously directly authorized by regulation as of March 5, 1987 to be engaged
in by multiple holding companies or (vii) those activities authorized by the
Federal Reserve Board as permissible for bank holding companies, unless the OTS
by regulation, prohibits or limits such activities for savings and loan holding
companies. Those activities described in (vii) above also must be approved by
the OTS prior to being engaged in by a multiple savings and loan holding
company.

                                       29
<PAGE>

         Qualified Thrift Lender Test. The HOLA provides that any savings and
loan holding company that fails the qualified thrift lender ("QTL") test must,
within one year after the date on which the Bank ceases to be a QTL, register as
and be deemed a bank holding company subject to all applicable laws and
regulations. Currently, the QTL test requires that either an institution qualify
as a domestic building and loan association under the Internal Revenue Code or
that 65% of an institution's "portfolio assets" (as defined) consist of certain
housing and consumer-related assets on a monthly average basis in nine out of
every 12 months. Assets that qualify without limit for inclusion as part of the
65% requirement are: loans made to purchase, refinance, construct, improve or
repair domestic residential housing and manufactured housing; home equity loans;
mortgage-backed securities (where the mortgages are secured by domestic
residential housing or manufactured housing); FHLB stock; direct or indirect
obligations of the FDIC; and loans for educational purposes, loans to small
businesses and loans made through credit cards. In addition, the following
assets, among others, may be included in meeting the test subject to an overall
limit of 20% of the savings institution's portfolio assets: 50% of residential
mortgage loans originated and sold within 90 days of origination; 100% of
consumer loans; and stock issued by Freddie Mac or Fannie Mae. Portfolio assets
consist of total assets minus the sum of (i) goodwill and other intangible
assets, (ii) property used by the savings institution to conduct its business,
and (iii) liquid assets up to 20% of the institution's total assets. At March
31, 2003, the Bank was in compliance with the QTL test.

         Gramm-Leach-Bliley Financial Services Modernization Act. On November
12, 1999, the Gramm-Leach-Bliley Financial Services Modernization Act of 1999
was signed into law. The purpose of this legislation was to modernize the
financial services industry by establishing a comprehensive framework to permit
affiliations among commercial banks, insurance companies, securities firms and
other financial service providers. Generally, the Act:

     o   repealed the historical restrictions and eliminated many federal and
         state law barriers to affiliations among banks, securities firms,
         insurance companies and other financial service providers;
     o   provided a uniform framework for the functional regulation of the
         activities of banks, savings institutions and their holding companies;
     o   broadened the activities that may be conducted by national banks,
         banking subsidiaries of bank holding companies and their financial
         subsidiaries;
     o   provided an enhanced framework for protecting the privacy of consumer
         information;
     o   adopted a number of provisions related to the capitalization,
         membership, corporate governance and other measures designed to
         modernize the FHLB system;
     o   modified the laws governing the implementation of the CRA; and
     o   addressed a variety of other legal and regulatory issues affecting
         day-to-day operations and long-term activities of financial
         institutions.

         The USA Patriot Act. In response to the events of September 11th,
President George W. Bush signed into the law the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, or the USA Patriot Act, on October 26, 2001. The USA
Patriot Act gives the federal government new powers to address terrorist threats
through enhanced domestic security measures, expanded surveillance powers,
increased information sharing, and broadened anti-money laundering requirements.
By way of amendments to the Bank Secrecy Act, Title III of the USA Patriot Act
takes measures intended to encourage information sharing among bank regulatory
agencies and law enforcement bodies. Further, certain provisions of Title III
impose affirmative obligations on a broad range of financial institutions,
including banks, thrifts, brokers, dealers, credit unions, money transfer agents
and parties registered under the Commodity Exchange Act.

         Among other requirements, Title III of the USA Patriot Act imposes the
following requirements with respect to financial institutions:

     o   Pursuant to Section 352, all financial institutions must establish
         anti-money laundering programs that include, at minimum: (i) internal
         policies, procedures, and controls; (ii) specific designation of an
         anti-money laundering compliance officer; (iii) ongoing employee
         training programs; and (iv) an independent audit function to test the
         anti-money laundering program.
     o   Section 326 of the Act authorizes the Secretary of the Department of
         Treasury, in conjunction with other bank regulators, to issue
         regulations by October 26, 2003 that provide for minimum standards with
         respect to customer identification at the time new accounts are opened.

                                       30
<PAGE>

     o   Section 312 of the Act requires financial institutions that establish,
         maintain, administer, or manage private banking accounts or
         correspondent accounts in the United States for non-United States
         persons or their representatives (including foreign individuals
         visiting the United States) to establish appropriate, specific, and,
         where necessary, enhanced due diligence policies, procedures, and
         controls designed to detect and report money laundering.
     o   Effective December 25, 2001, financial institutions are prohibited from
         establishing, maintaining, administering or managing correspondent
         accounts for foreign shell banks (foreign banks that do not have a
         physical presence in any country), and will be subject to certain
         recordkeeping obligations with respect to correspondent accounts of
         foreign banks.
     o   Bank regulators are directed to consider a holding company's
         effectiveness in combating money laundering when ruling on Federal
         Reserve Act and Bank Merger Act applications.

During the first quarter of 2003, the Federal Crimes Enforcement Network
(FinCEN), a bureau of the Department of Treasury, issued proposed and interim
regulations to implement the provisions of Sections 312 and 352 of the USA
Patriot Act. The impact of the USA Patriot Act and its implementing regulations
is not expected to have a material impact on the financial condition and results
of operations of the Company and the Bank.

         Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act of 2002
("Sarbanes-Oxley Act") was signed into law by President Bush on July 30, 2002 in
responses to public concerns regarding corporate accountability in connection
with the recent accounting scandals at Enron and WoldCom. The stated goals of
the Sarbanes-Oxley Act are to increase corporate responsibility, to provide for
enhanced penalties for accounting and auditing improprieties at publicly traded
companies and to protect investors by improving the accuracy and reliability of
corporate disclosures pursuant to the securities laws.

         The Sarbanes-Oxley Act is the most far-reaching U.S. securities
legislation enacted in some time. The Sarbanes-Oxley Act generally applies to
all companies, both U.S. and non-U.S., that file or are required to file
periodic reports with the Securities and Exchange Commission ("SEC"), under the
Securities Exchange Act of 1934 ("Exchange Act").

         The Sarbanes-Oxley Act includes very specific additional disclosure
requirements and new corporate governance rules, requires the SEC and securities
exchanges to adopt extensive additional disclosure, corporate governance and
other related rules and mandates further studies of certain issues by the SEC
and Comptroller General. The Sarbanes-Oxley Act represents significant federal
involvement in matters traditionally left to state regulatory systems, such as
the regulation of the accounting profession, and to state corporate law, such as
the relationship between a board of directors and management and between a board
of directors and its committees.

         The Sarbanes-Oxley Act addresses, among other matters:

     o   audit committees;
     o   certification of financial statements by the chief executive officer
         and the chief financial officer;
     o   the forfeiture of bonuses or other incentive-based compensation and
         profits from the sale of an issuer's securities by directors and senior
         officers in the twelve month period following initial publication off
         any financial statements that later require restatement;
     o   a prohibition on insider trading during pension plan black out periods;
     o   disclosure of off-balance sheet transactions;
     o   a prohibition on personal loans to directors and  officers;
     o   expedited filing requirements for Form 4s;
     o   disclosure of a code of ethics and filing a Form 8-K for a change or
         waiver of such code;
     o   "real time" filing of periodic reports;
     o   the formation of public accounting oversight board;
     o   auditor independence; and
     o   various increased criminal penalties for violations of securities laws.

         The Sarbanes-Oxley Act contains provision which effective upon
enactment on July 30, 2002 and provisions which will become effective from
within 30 days to one year from enactment. The SEC has been delegated the task
of enacting rules to implement various provision with respect to, among other
matters, disclosure in periodic filing pursuant to the Exchange Act.

                                       31
<PAGE>

         Recent Washington Legislation. Washington State recently enacted a new
law regarding financial institution parity. Primarily, the law affords
Washington chartered commercial banks the same powers as Washington chartered
savings banks. In order for a bank to exercise these powers, it must provide 30
days notice to the Director of Financial Institutions and the Director must
authorize the requested activity. In addition, the law provides that Washington
chartered commercial banks may exercise any of the powers that the Federal
Reserve has determined to be closely related to the business of banking and the
powers of national banks, subject to the approval of the Director in certain
situations. The law also provides that Washington chartered savings banks may
exercise any of the powers of Washington chartered commercial banks, national
banks and federally chartered savings banks, subject to the approval of the
Director in certain situations. Finally, the law provides additional flexibility
for Washington chartered commercial and savings banks with respect to interest
rates on loans and other extension of credit. Specifically, they may charge the
maximum interest rate allowable for loans and other extension of credit by
federally chartered financial institutions to Washington residents.

Item 2.  Description of Property
--------------------------------

         The Bank operates eight full-service facilities in Lewiston, Lewiston
Orchards, Moscow, Grangeville, Coeur d'Alene, and Post Falls, Idaho, and
Clarkston and Liberty Lake, Washington and two loan production offices in Boise,
Idaho and Spokane, Washington. The Company owns the Lewiston, Lewiston Orchards,
Moscow, Grangeville, and Coeur d'Alene facilities, leases the Clarkston building
on a month-to-month tenancy which began July 1, 1997, and leases the in-store
location of the Post Falls branch on a five year term which began March 1, 1999
with Tidyman's LLC. In November 1999, the Bank opened the newly constructed
Liberty Lake branch, which is located on leased land. The lease is a ten-year
lease. The Bank operates five loan production offices. The loan production
offices in Coeur d'Alene and Moscow, Idaho are located in the same facility as
its full-service office. The loan production office in Lewiston, Idaho is a
leased building adjacent to the Lewiston facilities. The loan production office
in Boise is an office space leased for three years, ten and one-half months
commencing on April 15, 2003. The loan production office in Spokane is an office
space leased for 62 months commencing on August 1, 2002. A portion of the Coeur
d'Alene facility is leased to an unaffiliated brokerage firm for a period of ten
years expiring in 2006. At March 31, 2003, the net book value of the properties
(including land and buildings) and the Bank's fixtures, furniture and equipment
was $7.2 million. The Company believes that its existing facilities are adequate
for the current level of operations.

Item 3.  Legal Proceedings
--------------------------

         Periodically, there have been various claims and lawsuits involving the
Bank, mainly as a defendant, 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 the Company believes would have a material
adverse effect on its financial condition or operations.

Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

         No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended March 31, 2003.

                                       32
<PAGE>

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters
-----------------------------------------------------------------

         The common stock of the Company is traded on the Nasdaq National Market
under the symbol "FBNW". The table below reflects the high, low, and closing
market prices of its common stock based on the end of the day closing price,
cash dividends paid per share, and book value for the last two fiscal years. The
common stock began trading on July 2, 1997. At March 31, 2003 there were
approximately 600 holders of common stock of the Company, including 260 record
holders of common stock in "street" name.


                         High        Low       Close   Dividends  Book Value*
                       --------   --------   --------   --------   --------
     2003              $ 18.409   $ 13.030   $ 23.690   $   0.54   $  23.24
     ----
     First Quarter       19.090     17.850                  0.12      21.55
     Second Quarter      19.450     17.800                  0.12      22.36
     Third Quarter       20.980     18.950                  0.15      22.73
     Fourth Quarter      23.940     20.450                  0.15      23.24

     2002              $ 18.409   $ 13.030   $ 18.150   $   0.44   $  20.72
     ----
     First Quarter       16.000     13.030                  0.10      19.62
     Second Quarter      17.900     15.410                  0.10      20.23
     Third Quarter       17.950     16.250                  0.12      20.36
     Fourth Quarter      18.409     16.500                  0.12      20.72

     2001              $ 14.875   $  9.875   $ 13.313   $   0.38   $  19.39
     ----
     2000              $ 20.375   $  8.500   $ 10.500   $   0.36   $  17.30
     ----
     1999              $ 24.000   $ 12.690   $ 14.000   $   0.34   $  16.29
     ----


*Book value is computed using actual shares outstanding, excluding unallocated
ESOP shares and including undisbursed MRDP shares.

         The payment of dividends on the common stock is subject to the
requirements of applicable law and the determination by the Board of Directors
of the Company that the net income, capital and financial condition of the
Company, industry trends and general economic conditions justify the payment of
dividends. The rate of such dividends and the continued payment thereof will
depend upon various factors at the intended time of declaration and payment,
including the Bank's profitability and liquidity, alternative investment
opportunities, and regulatory restrictions on dividend payments and on capital
levels applicable to the Bank. Accordingly, there can be no present assurance
that any dividends will be paid. Periodically, the Board of Directors, if
market, economic and regulatory conditions permit, may combine or substitute
periodic special dividends with or for regular dividends. In addition, since the
Company has no significant source of income other than dividends from the Bank
and earnings from investment of the net proceeds of the Conversion retained by
the Company, the payment of dividends by the Company depends in part upon the
amount of the net proceeds from the Conversion retained by the Company and the
Company's earnings thereon and the receipt of dividends from the Bank, which are
subject to various tax and regulatory restrictions on the payment of dividends.
Dividend payments by the Company are subject to regulatory restriction under
Federal Reserve policy as well as to limitation under applicable provisions of
Washington law.

                                       33
<PAGE>

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
         of Operations
         -------------

         The information required by this Item is included as Exhibit 13 of this
report under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations and Consolidated Financial Statements" in
the 2003 Annual Report.

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

         The information required by this Item is included as Exhibit 13 of this
report under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations and Consolidated Financial Statements" in
the 2003 Annual Report.

Item 8.  Changes in and Disagreements with Accountants on Accounting and
------------------------------------------------------------------------
         Financial Disclosure
         --------------------

         None.



                                    PART III


Item 9.  Directors, Executive Officers, Promoters and Control Persons;
----------------------------------------------------------------------
         Compliance with Section 16(a) of the Exchange Act
         -------------------------------------------------

         The information concerning the Company's directors required by this
Item is incorporated by reference from the information set forth under the
caption "Proposal 1 - Election of Directors" in the Company's definitive Proxy
Statement concerning the Annual Meeting of Stockholders (the "2003 Proxy
Statement").

         The information concerning compliance with Section 16(a) of the
Securities Exchange Act of 1934, as amended, required by this Item is
incorporated by reference to the information set forth under the caption
"Section 16(a) Beneficial Ownership Reporting Compliance" in the 2003 Proxy
Statement.

<TABLE>
<CAPTION>
                                Executive Officers of the Company and Bank

                     Age at
                    March 31,             Position
Name                  2003                 Company                                 Bank
----                  ----                 -------                                 ----

<S>                    <C>       <C>                           <C>
Clyde E. Conklin       51        President, Chief Executive    Chief Executive Officer and Director
                                 Officer, and Director

Larry K. Moxley        52        Executive Vice President,     Chief Financial Officer,
                                 Chief Financial Officer,      Secretary/Treasurer and Director
                                 Corporate Secretary, and
                                 Director

Terence A. Otte        46        --                            Senior Vice President, Chief Operating
                                                               Officer

Donn L. Durgan         49        --                            Senior Vice President, Chief Lending Officer

Richard R. Acuff       42        --                            Senior Vice President, Management
                                                               Information Systems Manager
</TABLE>

Biographical Information

         Clyde E. Conklin, who joined the Bank in 1987, has served as the Chief
Executive Officer of the Bank since February 1996 and as President and Chief
Executive Officer of the Company since its formation in 1997. From September
1994 to February 1996, Mr. Conklin served as Senior Vice President - Lending. In
1993, Mr. Conklin became Vice President - Lending. Prior to that time, Mr.
Conklin served as the Agricultural Lending Manager.

                                       34
<PAGE>

         Larry K. Moxley, who joined the Bank in 1973, currently serves as Chief
Financial Officer of the Bank, a position he has held since February 1996. Mr.
Moxley has served as Executive Vice President, Chief Financial Officer and
Secretary/Treasurer of the Company since its formation in 1997. Mr. Moxley
served as Senior Vice President - Finance from 1993 to February 1996 and as Vice
President - Finance from 1984 to 1993.

         Terence A. Otte joined the Bank in June 1989 as an Agricultural Loan
Officer, and currently serves as Senior Vice President, Chief Operating Officer.
From 1991 to 1994, he served as manager of the Bank's Moscow, Idaho branch. In
1994 he became Vice President-Lending and Agricultural Lending Manager and in
1996 became Senior Vice President, Agricultural and Consumer Lending and
Compliance Officer.

         Donn L. Durgan, who joined the Bank in February 1996, currently serves
as Senior Vice President, Chief Lending Officer. Prior to that time, Mr. Durgan
was employed by First Security Bank, now known as Wells Fargo Bank, for 11 years
in various positions in commercial and residential real estate lending.

         Richard R. Acuff, who joined the Bank in February 1983, currently
serves as Senior Vice President of Management Information Systems. From 1983 to
1992, he served as staff accountant, assistant controller, and asset and
liability manager. From 1992 to 2001, he served as Manager, Assistant Vice
President, and Vice President of Management Information Systems.

Item 10. Executive Compensation
-------------------------------

         The information required by this Item is incorporated by reference to
the information under the captions "Directors' Compensation" and "Executive
Compensation" in the 2003 Proxy Statement.

Item 11. Security Ownership of Certain Beneficial Owners and Management and
---------------------------------------------------------------------------
         Related Stockholder Matters
         ---------------------------

         The information required by this Item is incorporated by reference to
the information under the caption "Security Ownership of Certain Beneficial
Owners and Management" in the 2003 Proxy Statement.

         Equity compensation Plan Information. The following table sets forth
certain information with respect to securities to be issued under the Company's
equity compensation plans as or March 31, 2003.

<TABLE>
<CAPTION>
                                       (a)                (b)                  (c)
                                    Number of          Weighted-       Number of securities
                                securities to be        average      remaining available for
                                   issued upon      exercise price    future issuance under
                                   exercise of      of outstanding     equity compensation
                                   outstanding         options,          plans (excluding
                                options, warrants    warrants and    securities reflected in
        Plan category              and rights           rights             column (a))
-----------------------------   -----------------   --------------   -----------------------
<S>                                 <C>                 <C>                  <C>
Equity compensation plans
approved by security holders:
   Management Recognition and
      Development Plan              $  79,350           $ 15.81                   0
   1998 Stock Option Plan             114,000           $ 15.81              51,375

Equity compensation plans not
approved by security holders:             N/A               N/A                 N/A
                                    ---------           -------              ------

Total                               $ 226,350           $ 15.81              51,375
                                    =========           =======              ======
</TABLE>

Item 12. Certain Relationships and Related Transactions
-------------------------------------------------------

         The information required by this Item is incorporated by reference to
the information under the caption "Transactions with Management" in the 2003
Proxy Statement.

                                       35
<PAGE>

Item 13. Controls and Procedures
--------------------------------

   (a)   Evaluation of Disclosure Controls and Procedures: An evaluation of the
         Company's disclosure controls and procedures (as defined in Section
         13(a)-14(c) of the Securities Exchange Act of 1934 (the "Act")) was
         carried out under the supervision and with the participation of the
         Company's Chief Executive Officer, Chief Financial Officer and several
         other members of the Company's senior management within the 90-day
         period preceding the filing date of this annual report. The Company's
         Chief Executive Officer and Chief Financial Officer concluded that the
         Company's disclosure controls and procedures as currently in effect are
         effective in ensuring that the information required to be disclosed by
         the Company in the reports it files or submits under the Act is (i)
         accumulated and communicated to the Company's management (including the
         Chief Executive Officer and Chief Financial Officer) in a timely
         manner, and (ii) recorded, processed, summarized and reported within
         the time periods specified in the SEC's rules and forms.

   (b)   Changes in Internal Controls: In the year ended March 31, 2003, the
         Company did not make any significant changes in, nor take any
         corrective actions regarding, its internal controls or other factors
         that could significantly affect these controls.

Item 14. Exhibits and Reports on Form 8-K
-----------------------------------------

         (a)      Exhibits

                  3.1      Articles of Incorporation of the Registrant*
                  3.2 (a)  Bylaws of the Registrant*
                  3.2 (b)  Bylaws Amendment adopted by the Board of Directors on
                           May 23, 2002.**
                  10.1     Employment Agreement between FirstBank Northwest,
                           FirstBank Corp. and Clyde E. Conklin***
                  10.2     Employment Agreement between FirstBank Northwest,
                           FirstBank Corp. and Larry K. Moxley***
                  10.3     Salary Continuation Agreement between First Federal
                           Bank of Idaho, F.S.B. and Clyde E. Conklin***
                  10.4     Salary Continuation Agreement between First Federal
                           Bank of Idaho, F.S.B. and Larry K. Moxley***
                  10.5     Management Recognition and Development Plan****
                  10.6     1998 Stock Option Plan****
                  13       2003 Annual Report
                  21       Subsidiaries of the Registrant
                  23.1     Consent of Independent Accountants
                  23.2     Consent of Independent Accountants
                  99.1     Certification of Chief Executive Officer of FirstBank
                           NW Corp. Pursuant to Section 906 of the
                           Sarbanes-Oxley Act of 2002
                  99.2     Certification of Chief Financial Officer of FirstBank
                           NW Corp. Pursuant to Section 906 of the
                           Sarbanes-Oxley Act of 2002
---------------
*        Incorporated by reference to the exhibits to the Registrant's Annual
         Report on Form 10-KSB for the year ended March 31, 2000.
**       Incorporated by reference to the exhibits to the Registrant's Annual
         Report on Form 10-KSB for the year ended March 31, 2002.
***      Incorporated by reference to the Registrant's Registration Statement on
         Form SB-2 (File No. 333-23395).
****     Incorporated by reference to the exhibits to the Registrant's
         Registration Statement on Form S-8 filed on September 28, 1998.

         (b)      Reports on Form 8-K

                  Item 5. Other Events: The Company filed a current report on
                          Form 8-K on February 25, 2003 announcing a merger
                          agreement with Oregon Trail Financial Corporation.

                  Item 7. Financial Statements, Pro Forma Financial Information
                          and Exhibits: The Company filed a current report on
                          Form 8-K on April 22, 2003 announcing its fiscal year
                          2003 press release.

                                       36
<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: June 5, 2003                     By: /s/ CLYDE E. CONKLIN
                                           --------------------------------
                                           Clyde E. Conklin
                                           President and Chief Executive Officer
                                           (Duly Authorized Representative)

         Pursuant to the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

SIGNATURES                                     TITLE                    DATE
----------                                     -----                    ----


/s/ CLYDE E. CONKLIN              President, Chief                  June 5, 2003
-----------------------------     Executive Officer and
Clyde E. Conklin                  Director (Principal
                                  Executive Officer)


/s/ LARRY K. MOXLEY               Executive Vice President,         June 5, 2003
-----------------------------     Chief Financial Officer,
Larry K. Moxley                   and Director (Principal
                                  Financial Officer)


/s/ CYNTHIA M. MOORE              Controller                        June 5, 2003
-----------------------------     (Principal Accounting Officer)
Cynthia M. Moore


/s/ WILLIAM J. LARSON             Director                          June 5, 2003
-----------------------------
William J. Larson


/s/ STEVE R. COX                  Director                          June 5, 2003
-----------------------------
Steve R. Cox


/s/ ROBERT S. COLEMAN, SR.        Director                          June 5, 2003
-----------------------------
Robert S. Coleman, Sr.


/s/ JAMES N. MARKER               Director                          June 5, 2003
-----------------------------
James N. Marker


/s/ W. DEAN JURGENS               Director                          June 5, 2003
-----------------------------
W. Dean Jurgens

                                       37
<PAGE>

                             Certification Required
      By Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934


I, Clyde E. Conklin, certify that:

1.       I have reviewed this annual report on Form 10-KSB of FirstBank NW
         Corp.;

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

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

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

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

         b.       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

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

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

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

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

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



/s/ CLYDE E. CONKLIN
-----------------------
Chief Executive Officer


Dated: June 5, 2003

                                       38
<PAGE>

                             Certification Required
      By Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934


I, Larry K. Moxley, certify that:

1.       I have reviewed this annual report on Form 10-KSB of FirstBank NW
         Corp.;

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

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

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

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

         b.       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

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

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

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

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

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



/s/ LARRY K. MOXLEY
-----------------------
Chief Financial Officer


Dated: June 5, 2003

                                       39