EXHIBIT 10.4

# EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the
Agreement), between The Bank of the Pacific, a Washington business corporation
(The Bank) and Denise Portmann (Officer) is dated as of June 15,
2005 and will be effective July 1, 2005.

# RECITALS

| | A. | The Bank of the Pacific is a Washington banking corporation. The Bank is engaged
               in the business of commercial banking in Grays Harbor County, Pacific County,
               Skagit County, Whatcom County, and Wahkiakum County, Washington. The Bank also
               engages business in Oregon Counties.
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| | B. | The Officer represents that she has considerable experience, expertise and
               training related to banking and services offered by The Bank. The Bank desires
               and intends to employ the Officer pursuant to the terms and conditions set forth
               in this Agreement.
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| | C. | Both The Bank and the Officer have read and understand the terms and provisions
               set forth in this Agreement, and have been afforded a reasonable opportunity to
               review this Agreement and to consult with an attorney.
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# AGREEMENT

The parties agree as follows:

| | 1. | Employment. The Bank will employ the Officer for the Term,
               except as specifically stated herein, and the Officer accepts employment with
               The Bank on the terms and conditions set forth in this Agreement. The
               Officers title will be Senior Vice President and Chief Financial
               Officer.
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| | 2. | Effective Date and Term.
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| | (a) | Effective Date. This Agreement is effective as of the 1st day
               of July, 2005
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| | (b) | Term. The initial term of this Agreement is two years (24 months),
               beginning on the Effective Date stated in paragraph 2(a), and shall
               automatically renew for an additional term of one year on each anniversary date
               of the Agreement, so as to create a two year term on each anniversary date,
               unless notice of termination or nonrenewal is provided by either party pursuant
               to paragraph 5(a).
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| | 3. | Duties. The Officer will serve as the Senior Vice President
               and Chief Financial Officer for the Bank and faithfully and diligently perform
               the duties assigned to the Officer by the Chief Executive Officer
               (CEO). The Officer will report directly to the CEO of The Bank. The
               Officer will use her best efforts to perform her duties and will devote all her
               working time and attention to these duties.
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| | 4. | Compensation.
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| | (a) | Salary. Initially, the Officer will receive an annualized salary of
          $85,000.00 per year, to be paid at regular intervals by The Bank in accordance
          with its regular payroll schedules. The Officers salary will be subject to
          annual review and adjustment as set forth in section 4(f).
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| | (b) | Incentive Compensation. Officer will be eligible to participate in an
               incentive plan relative to The Banks approved plan. A disinterested
               majority of The Banks Board of Directors will determine the amount of the
               bonus pool, if any, based on the profitability, safety, and soundness of The
               Bank. The Officers bonus, if any, will reflect the Officers
               performance in her area of responsibility and her contribution to the overall
               performance of The Bank during the year, as determined in the sole discretion of
               The Banks Board of Directors. No incentive compensation bonus shall be
               paid for any calendar year or portion thereof, in which this Agreement is
               terminated or not renewed, or in which notice of nonrenewal or termination is
               given, regardless of reasons for termination or nonrenewal, and regardless of
               which party terminates or declines to renew this Agreement. The Officer will
               also be entitled to participate in stock bonus or option plans generally
               available to senior Officers of The Bank.
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| | (c) | Standard Benefits. The Bank will provide to the Officer the standard
               Officer benefits provided in accordance with The Banks benefit plans and
               policies, including but not limited to health insurance, disability insurance,
               life insurance and four (4) weeks of paid vacation per year accrued in
               accordance with The Banks benefit plans and policies. The Officer also
               will be entitled to participate in retirement plans, including 401(k) plans.
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| | (d) | Automobile. The Bank will provide the Officer with an automobile
               allowance of $250 per month, unless a bank owned vehicle is assigned to the
               Officer in lieu of an automobile allowance.
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| | (e) | Expenses. The Bank will reimburse the Officer for all reasonable expenses
               that the Officer may incur in the performance of her duties including monthly
               country club dues. The Officer will request reimbursement and provide
               documentation of such expenses within a reasonable time, but no later than 90
               days after the expense has been incurred.
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| | (f) | Annual Review and Adjustment. The Officers compensation as set
               forth in this Section 4(a), will be subject to annual review and adjustment by a
               disinterested majority of The Banks Board of Directors or Compensation
               Committee. In no case, however, will the Officers salary, vacation and
               expense reimbursement be less than the amounts set forth in this section 4.
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| | 5. | Termination.
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| | (a) | Notice of Termination or Nonrenewal. Either party may unilaterally
               terminate or decline to renew this Agreement for any reason by providing the
               other party with written notice of the termination or nonrenewal no less than
               ninety (90) days prior to the termination date or the final date of the then
               current Term of this Agreement.
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| | (b) | Termination or Nonrenewal by The Bank: In the event that the Bank
               provides the Officer with a notice of termination without cause or nonrenewal
               under paragraph 5(a), The Bank will pay to the Officer her salary from the date
               of the notice for the balance of the then current Term or for twelve (12) months
               from the date of the notice, whichever is greater, and in its discretion will
               advise the Officer of those duties and responsibilities, if any, it wants him to
               perform during this time. All forfeiture provisions regarding restricted stock
               awards and all vesting requirements regarding stock options shall lapse or be
               deemed fully completed.
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| | (c) | Termination or Nonrenewal by the Officer: In the event the Officer seeks
               to terminate or refuses to renew this Agreement without providing at least (90)
               days written notice prior to the termination date of final date of the
               then current term, the Officer will pay to The Bank liquidated damages as
               follows: (A) in the event the Officer provides notice of termination or
               nonrenewal 29 days or less prior to the termination date of the Agreement, the
               Officer shall pay The Bank $25,000 in liquidated damages; (B) in the event the
               Officer provides notice of termination or nonrenewal at least 30 days but not
               more than 59 days prior to the termination date of the Agreement, the Officer
               shall pay The Bank $20,000 in liquidated damages; (C) in the event the Officer
               provides notice of termination or nonrenewal at least 60 days but not more than
               89 days prior to termination of this Agreement, the Officer shall pay to The
               Bank $15,000 in liquidated damages.
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| | (d) | Termination by The Bank for Cause. Notwithstanding paragraph 4(a), The
               Bank may immediately terminate this Agreement with no advance notice if
               termination is for cause. For purposes of this Agreement, cause
               means dishonesty; fraud; commission of a felony or of a crime involving moral
               turpitude; deliberate violation of statutes, regulations, or orders pertaining
               to financial institutions or reckless disregard of such statutes, regulations,
               or orders; destruction or theft of Bank property or assets of customers of The
               Bank; physical attack of a fellow employee or a customer; intoxication at work;
               use of narcotics or alcohol to an extent that materially impairs Officers
               performance of her duties; willful malfeasance or gross negligence in the
               performance of Officers duties; violation of law in the course of
               employment that has a material adverse impact on The Bank, its Officers, or its
               customers; Officers refusal to perform Officers duties;
               Officers refusal to follow reasonable instructions or directions;
               misconduct materially injurious to The Bank; significant neglect of duty; or any
               material breach of Officers duties or obligations to The Bank that results
               in material harm to The Bank. If termination occurs under this paragraph, the
               Officer will be entitled to receive only the salary earned through the date this
               Agreement is terminated and shall not be entitled to any payment pursuant to
               paragraph 4(a), and except as otherwise provided by law, participation in
               benefit plans ceases upon termination of this Agreement.
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| | (e) | Death or Disability. Notwithstanding paragraph 4(a), this Agreement will
               terminate immediately upon the Officers death. Notwithstanding paragraph
               4(a), if the Officer is unable to perform her duties and obligations under this
               Agreement for a period of 90 days as a result of a disability that substantially
               limits one or more of her major life activities, this Agreement will terminate
               immediately upon expiration of such 900 day period unless Officer is thereafter
               able to perform the essential functions of the position referenced in paragraph
               2(c) with or without a reasonable accommodation. If termination occurs under
               this paragraph, the Officer or her estate will be entitled to receive only the
               salary earned through the date this Agreement is terminated and shall not be
               entitled to any payment pursuant to paragraph 4(a), and except as otherwise
               provided by law, participation in benefit plans ceases upon termination of this
               Agreement, except that as of such termination date, all vesting requirements
               regarding then currently pending stock options shall be deemed fully completed.
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| | (f) | Termination Related to a Change in Control. This paragraph will apply to
               any termination related to a Change in Control, as set forth herein.
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| | i. | Change in Control means a change in the ownership or effective
               control or in the ownership of a substantial portion of the
               assets of The Bank, within the meaning of Section 280G of the Internal
               Revenue Code. An initial public offering by The Bank will not, however, be
               deemed to be a Change in Control under this Agreement.
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| | ii. | Termination by The Bank. Notwithstanding the provisions of paragraph
               5(a), if The Bank or its successors in interest by merger, or their transferees
               in the event of a purchase and assumption transaction, and for reasons other
               than the provisions in paragraphs 5(d) and 5(e) terminates this Agreement within
               twenty-four (24) months following a Change in Control, The Bank will pay the
               Officer eighteen (18) times the base compensation received by the Officer during
               the most recent calendar month ending on or prior to the effective date of
               termination, less statutory payroll deductions. Payment under this paragraph
               shall be made in accordance with The Banks ordinary payroll policies and
               procedures, unless the parties mutually agree to a different payment schedule.
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| | iii. | Officer Assignment Related to Change in Control. If the assignment to the
               Officer by The Bank or its successors in interest by merger, or their
               transferees in the event of a purchase and assumption transaction, is other than
               the position of Senior Vice President and Chief Financial Officer, without the
               Officers expressed written consent, then the provisions of paragraph
               5(f)(ii) shall apply.
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| | iv. | Limitations on Payments Related to Change in Control. The following apply
               notwithstanding any other provision of this Agreement:
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| | 1) | The payment described in Section 5(f)(ii) shall be less than the amount that
               would cause it to be a parachute payment within the meaning of
               Section 280G (b)(2)(A) of the Internal Revenue Code; and
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| | 2) | The Officers right to receive the payment described in Section 5(f)(ii)
               terminates (a) immediately if before the Change in Control transaction closes,
               the Officer terminates her employment without good reason or the Company
               terminates the Officers employment for cause, or (b) two years after
               Change in Control occurs
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| | 6. | Confidentiality. The Officer will not, after signing this
               Agreement, including during and after its Term, disclose to any other person or
               entity any confidential information concerning The Bank or its business
               operations or customers, or use for her own purposes or permit or assist in the
               use of such confidential information by third parties unless The Bank consents
               to the use or disclosures of their respective information, or disclosure is
               required by law or court order. The provisions of this paragraph survive the
               termination of the Officers employment by The Bank.
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| | 7. | Noncompetition. During the Term and for twenty-four (24)
               months after the Officers employment with The Bank ends, the Officer will
               not become involved with a Competing Business or serve, directly or indirectly,
               a Competing Business in any matter. Competing Business means any
               company that competes with or will compete with The Bank in Grays Harbor,
               Pacific, Wahkiakum, Whatcom, and Skagit Counties, or any other Washington or
               Oregon county in which The Bank maintains a banking office(s) at the time of the
               termination of this Agreement. Competing Business includes, without
               limitation, any existing or newly formed financial institution or trust company.
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| | 8. | Enforcement. The Bank and the Officer agree that, in light
               of all of the facts and circumstances of the relationship between The Bank and
               the Officer, the agreements referred to in paragraphs 5(a), 6 and 7 are fair and
               reasonably necessary for the protection of The Banks confidential
               information, goodwill and other protectible interests. The parties acknowledge
               and agree that the time and expense involved in proving in any forum the actual
               damage or loss suffered by The Bank if there is a breach of paragraphs 5(a), 6
               or 7 make this case appropriate for liquidated damages. Accordingly, The Bank
               and the Officer agree that the following schedule of liquidated damages is
               reasonable and fair, and shall be the amount of damages which the Officer shall
               pay to The Bank for each, separate breach of paragraphs 5(a), 6 or 7 by the
               Officer:
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| | a. | for a breach of paragraph 5(a), the sum of $15,000;
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| | b. | for a breach of paragraph 6, the sum of $50,000;
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| | c. | for a breach of paragraph 7, the sum of $100,000.
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| | For
purposes of paragraph 7, a separate breach shall be deemed to have occurred
with each Competing Business with which the Officer becomes involved or serves in
violation of paragraph 7.
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| | Neither
the breach of paragraphs 5(a), 6 or 7, nor the payment of liquidated damages by the
Officer, shall affect the continuing validity or enforceability of this Agreement, or The
Banks right to seek and obtain injunctive relief. If a court of competent
jurisdiction should decline to enforce any of these covenants and agreements, the Officer
and the Bank hereby stipulate that the Court shall reform these provisions to restrict the
Officers use of confidential information and the Officers ability to compete
with The Bank to the maximum extent, in time, scope of activities, and geography, as the
court finds enforceable.
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| | 9. | Adequate Consideration. The Officer specifically
               acknowledges the receipt of adequate consideration for the covenants contained
               in paragraph 5(a), 6, and 7, and that The Bank is entitled to require him to
               comply with these paragraphs. These paragraphs will survive termination of this
               agreement. The Officer represents that if her employment is terminated, whether
               voluntarily or involuntarily, the Officer has experience and capabilities
               sufficient to enable the Officer to obtain employment in areas which do not
               violate this Agreement and that The Banks enforcement of a remedy by way
               of injunction will not prevent the Officer from earning a livelihood.
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| | 10. | Miscellaneous Provisions. This Agreement constitutes the
               entire understanding between the parties concerning its subject matter. This
               Agreement will bind and inure to the benefit of The Banks and the
               Officers heirs, legal representatives, successors and assigns. This
               Agreement may be modified only through a written instrument signed by both
               parties. This Agreement will be governed and construed in accordance with
               Washington law, except that certain matters may be governed by federal law.
               Venue for enforcement of any terms of this Agreement shall be in Grays Harbor
               County, Washington Superior Court.
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# Signed as of June
_______, 2005:

|                                       |                    
|-------------------------------------- | -------------------
|THE BANK OF THE PACIFIC                | OFFICER            
|/s/Dennis A. Long                      | /s/ Denise Portmann
|Dennis A. Long Chief Executive Officer | Denise Portmann