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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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Form 10-QSB



(Mark One)



| ̈ | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended
.
|- | ------------------------------------------------------------------------------------------------------------------



|x | Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from 7/1/03 to 9/30/03.
|- | ------------------------------------------------------------------------------------------------------------------------------------



Commission file number 0-24151



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NORTHWEST BANCORPORATION, INC.

(Exact name of small business issuer as
specified in its charter)



|Washington                                                     |  | 91-1574174                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer identification No.)



421 West Riverside,
Spokane, WA 99201-0403

(Address of principal executive offices)



(509) 456-8888

(Issuers telephone number, including area code)



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ̈



APPLICABLE ONLY TO
CORPORATE ISSUERS



The Registrant has a single class of
common stock, of which there are 1,898,772 shares issued and outstanding as of September 30, 2003.



Transitional Small Business Disclosure Format:



Yes  x    No ̈



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##### Table of Contents

Table of Contents



|               |  |                                                                                                                 |  | Page
|-------------- |  | --------------------------------------------------------------------------------------------------------------- |  | ----
|               |  |                                                                                                                
|Part I         |  | Financial Information                                                                                           |  | 3   
|               |  |                                                                                                                
|Item 1.        |  | Financial Statements                                                                                            |  | 3   
|               |  |                                                                                                                
|               |  | Consolidated Statements of ConditionSeptember 30, 2003 and December 31, 2002                                   |  | 3   
|               |  |                                                                                                                
|               |  | Consolidated Statements of IncomeThree-months and nine-months, year-to-date, ended September 30, 2003 and 2002 |  | 4   
|               |  |                                                                                                                
|               |  | Consolidated Statements of Cash FlowNine-months, year-to-date ended September 30, 2003 and 2002                |  | 5   
|               |  |                                                                                                                
|               |  | Consolidated Statements of Stockholders Equity as of September 30, 2003 and 2002                               |  | 6   
|               |  |                                                                                                                
|               |  | Notes to Consolidated Financial Statements                                                                      |  | 8   
|               |  |                                                                                                                
|Item 2.        |  | Managements Discussion and Analysis or Plan of Operation                                                       |  | 11  
|               |  |                                                                                                                
|Item 3.        |  | Controls and Procedures                                                                                         |  | 11  
|               |  |                                                                                                                
|Part II        |  | Other Information                                                                                               |  | 11  
|               |  |                                                                                                                
|Item 6.        |  | Exhibits and Reports on Form 8-K                                                                                |  | 11  
|               | 
|Signatures     |  | 12                                                                                                             
|               | 
|Certifications |  |                                                                                                                





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##### Table of Contents

Part I    Financial Information



Item 1.    Financial Statements



NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CONDITION

September 30, 2003 and December 31, 2002

($ in thousands)

|                                                                                                                                                      |  | September 302003 |         | December 312002
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ------- | ---------------
|Assets                                                                                                                                                |  |                  |         |                
|Cash and due from banks                                                                                                                               |  | $                | 8,942   |                
|Federal funds sold/FHLB interest bearing balances                                                                                                     |  |                  | 55      |                
|Securities held-to-maturity (Note 2)                                                                                                                  |  |                  | 2,738   |                
|Securities available-for-sale (Note 2)                                                                                                                |  |                  | 33,303  |                
|Federal Home Loan Bank stock, at cost                                                                                                                 |  |                  | 618     |                
|Loans, net of allowance for loan losses of $2,324 in 2003 and $2,026 in 2002 (Notes 3 & 4)                                                            |  |                  | 145,252 |                
|Loans held for sale                                                                                                                                   |  |                  | 2,136   |                
|Accrued interest receivable                                                                                                                           |  |                  | 847     |                
|Premises and equipment, net                                                                                                                           |  |                  | 3,655   |                
|Foreclosed real estate                                                                                                                                |  |                  | 1,436   |                
|Other assets                                                                                                                                          |  |                  | 2,810   |                
|                                                                                                                                                      |  |                  |         |                
|TOTAL ASSETS                                                                                                                                          |  | $                | 201,792 |                
|                                                                                                                                                      |  |                  |         |                
|Liabilities                                                                                                                                           |  |                  |         |                
|Noninterest bearing demand deposits                                                                                                                   |  | $                | 34,410  |                
|Money Market accounts                                                                                                                                 |  |                  | 43,397  |                
|NOW accounts                                                                                                                                          |  |                  | 12,476  |                
|Savings accounts                                                                                                                                      |  |                  | 5,782   |                
|Time Certificates of Deposit, $100,000 and over                                                                                                       |  |                  | 20,508  |                
|Time Certificates of Deposit, under $100,000                                                                                                          |  |                  | 41,056  |                
|                                                                                                                                                      |  |                  |         |                
|TOTAL DEPOSITS                                                                                                                                        |  |                  | 157,629 |                
|Securities sold under agreement to repurchase                                                                                                         |  |                  | 13,792  |                
|Borrowed funds (Note 5)                                                                                                                               |  |                  | 11,101  |                
|Accrued interest payable and other liabilities                                                                                                        |  |                  | 1,138   |                
|                                                                                                                                                      |  |                  |         |                
|TOTAL OTHER LIABILITIES                                                                                                                               |  |                  | 26,031  |                
|                                                                                                                                                      |  |                  |         |                
|TOTAL DEPOSITS & LIABILITIES                                                                                                                          |  |                  | 183,660 |                
|                                                                                                                                                      |  |                  |         |                
|Stockholders Equity                                                                                                                                  |  |                  |         |                
|Common stock, no par, 5,000,000 shares authorized; issued and outstanding 1,898,772 on September 30, 2003 and 1,898,752 on
December 31, 2002 (Note 6) |  |                  | 15,332  |                
|Retained earnings                                                                                                                                     |  |                  | 2,369   |                
|Accumulated other comprehensive income, net of tax of $222 for 2003 and $404 for 2002                                                                 |  |                  | 431     |                
|                                                                                                                                                      |  |                  |         |                
|TOTAL STOCKHOLDERS EQUITY                                                                                                                            |  |                  | 18,132  |                
|                                                                                                                                                      |  |                  |         |                
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                            |  | $                | 201,792 |                
|                                                                                                                                                      |  |                  |         |                

The accompanying Notes are an integral part of these condensed financial statements.





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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

Three months and nine-months, year-to-date, ended September 30, 2003 and 2002

($ in thousands, except number of shares and per share information)



|                                                                      |  | Quarter ended September 30 |           | Nine-months, year-to-date
|--------------------------------------------------------------------- |  | -------------------------- | --------- | -------------------------
|                                                                      |  | 2003                       |           | 2002                     
|Interest Income                                                       |  |                            |           |                          
|Interest and fees on loans                                            |  | $                          | 2,459     |                          
|Interest on securities                                                |  |                            | 409       |                          
|Interest on federal funds sold                                        |  |                            | 8         |                          
|                                                                      |  |                            |           |                          
|TOTAL INTEREST INCOME                                                 |  |                            | 2,876     |                          
|Interest Expense                                                      |  |                            |           |                          
|Interest on deposits                                                  |  |                            | 605       |                          
|Interest on securities sold under agreement to repurchase             |  |                            | 20        |                          
|Interest on borrowed funds                                            |  |                            | 79        |                          
|                                                                      |  |                            |           |                          
|TOTAL INTEREST EXPENSE                                                |  |                            | 704       |                          
|NET INTEREST INCOME                                                   |  |                            | 2,172     |                          
|Provision for loan losses                                             |  |                            | 150       |                          
|                                                                      |  |                            |           |                          
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                   |  |                            | 2,022     |                          
|Noninterest Income                                                    |  |                            |           |                          
|Fees and service charges                                              |  |                            | 256       |                          
|Net gain from sale of loans                                           |  |                            | 277       |                          
|Other noninterest income                                              |  |                            | 158       |                          
|                                                                      |  |                            |           |                          
|TOTAL NONINTEREST INCOME                                              |  |                            | 691       |                          
|Noninterest Expense                                                   |  |                            |           |                          
|Salaries and employee benefits                                        |  |                            | 1,221     |                          
|Occupancy/FF&E expense                                                |  |                            | 179       |                          
|Depreciation and amortization expense                                 |  |                            | 123       |                          
|Other operating expense                                               |  |                            | 420       |                          
|                                                                      |  |                            |           |                          
|TOTAL NONINTEREST EXPENSE                                             |  |                            | 1,943     |                          
|INCOME BEFORE TAXES                                                   |  |                            | 770       |                          
|Income tax expense                                                    |  |                            | 264       |                          
|                                                                      |  |                            |           |                          
|NET INCOME                                                            |  | $                          | 506       |                          
|                                                                      |  |                            |           |                          
|                                                                      |  |                           
|                                                                      |  | Quarter ended September 30 |           | Nine-months, year-to-date
|                                                                      |  | 2003                       |           | 2002                     
|Weighted average shares outstanding (Note 6)                          |  |                            | 1,899,626 |                          
|Basic earnings per share                                              |  | $                          | 0.27      |                          
|                                                                      |  |                            |           |                          
|Weighted average shares outstanding (Note 6)                          |  |                            | 1,899,626 |                          
|Effect of dilutive securities                                         |  |                            | 20,518    |                          
|Weighted average shares outstanding, adjusted for dilutive securities |  |                            | 1,920,144 |                          
|Earnings per share assuming full dilution                             |  | $                          | 0.26      |                          
|                                                                      |  |                            |           |                          



The accompanying Notes are an integral
part of these condensed financial statements.



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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOW

Nine-months, year-to-date, ended September 30, 2003 and 2002

($ in thousands)

|                                                                              |  | Year-to-date |        
|----------------------------------------------------------------------------- |  | ------------ | -------
|                                                                              |  | 2003         |        
|Net income                                                                    |  | $            | 1,283  
|Adjustments to reconcile net income to cash provided by operating activities: |  |              |        
|Provision for loan losses                                                     |  |              | 563    
|Depreciation and amortization                                                 |  |              | 360    
|(Increase)/decrease in assets and liabilities:                                |  |              |        
|Accrued interest receivable                                                   |  |              | 216    
|Net (increase)/decrease in loans held for sale                                |  |              | (1,472 
|Other assets                                                                  |  |              | (585   
|Accrued interest payable & other liabilities                                  |  |              | (11    
|                                                                              |  |              |        
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                     |  |              | 354    
|                                                                              |  |             
|Cash flows from investing activities:                                         |  |              |        
|Net (increase)/decrease in federal funds sold/FHLB interest bearing balances  |  |              | 539    
|Net (increase)/decrease in investment securities                              |  |              | 17,650 
|Net (increase)/decrease in loans                                              |  |              | (10,790
|Purchase of premises and equipment net of gain or loss on asset disposal      |  |              | (449   
|Foreclosed real estate activity (net)                                         |  |              | (324   
|                                                                              |  |              |        
|NET CASH PROVIDED/(USED) BY INVESTING ACTIVITIES                              |  |              | 6,626  
|                                                                              |  |              |        
|Cash flows from financing activities:                                         |  |              |        
|Net increase/(decrease) in deposits                                           |  |              | (8,428 
|Net increase/(decrease) in securities sold under agreement to repurchase      |  |              | (4,178 
|Net proceeds/(payments) from borrowed funds                                   |  |              | 4,514  
|Cash received from stock sales (net of stock repurchases)                     |  |              | 5      
|Cash dividend paid/purchase partial shares created by stock dividend          |  |              | (184   
|                                                                              |  |              |        
|NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES                              |  |              | (8,271 
|Net increase/(decrease) in cash and cash equivalents                          |  |              | (1,291 
|Cash and due from banks, beginning of year                                    |  |              | 10,233 
|                                                                              |  |              |        
|CASH AND DUE FROM BANKS, END OF QUARTER                                       |  | $            | 8,942  
|                                                                              |  |              |        



The accompanying Notes are an integral
part of these condensed financial statements.



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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

In Actual Dollars

As of September 30, 2003



|                                                                     |  | Total |            |   | CommonStock |   |            | RetainedEarnings |  |   | AccumulatedComprehensiveIncome |   |  | ComprehensiveIncome |         
|-------------------------------------------------------------------- |  | ----- | ---------- | - | ----------- | - | ---------- | ---------------- |  | - | ------------------------------ | - |  | ------------------- | --------
|Balance, December 31, 2001                                           |  | $     | 15,578,705 |   |             | $ | 13,495,186 |                  |  | $ | 1,666,961                      |   |  | $                   | 416,558 
|Net income 2002                                                      |  |       | 1,418,702  |   |             |   |            |                  |  |   | 1,418,702                      |   |  |                     |         
|Unrealized gains on available for sale securities                    |  |       | 367,067    |   |             |   |            |                  |  |   |                                |   |  |                     | 367,067 
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Comprehensive income                                                 |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Proceeds from issuance of common stock                               |  |       | 27,802     |   |             |   | 27,802     |                  |  |   |                                |   |  |                     |         
|Repurchase of common stock                                           |  |       | (9,161     | ) |             |   | (9,161     | )                |  |   |                                |   |  |                     |         
|Fractional shares, issued in cash                                    |  |       | (2,289     | ) |             |   |            |                  |  |   | (2,289                         | ) |  |                     |         
|Transfers                                                            |  |       |           |   |             |   | 811,462    |                  |  |   | (811,462                       | ) |  |                     |         
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Balance December 31, 2002                                            |  |       | 17,380,826 |   |             |   | 14,325,289 |                  |  |   | 2,271,912                      |   |  |                     | 783,625 
|Net income, 2003, year-to-date                                       |  |       | 1,282,773  |   |             |   |            |                  |  |   | 1,282,773                      |   |  |                     |         
|Unrealized losses on available for sale securities                   |  |       | (352,378   | ) |             |   |            |                  |  |   |                                |   |  |                     | (352,378
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Comprehensive income                                                 |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Proceeds from issuance of common stock                               |  |       | 31,580     |   |             |   | 31,580     |                  |  |   |                                |   |  |                     |         
|Repurchase of common stock                                           |  |       | (26,776    | ) |             |   | (26,776    | )                |  |   |                                |   |  |                     |         
|Cash dividend paid/purchase partial shares created by stock dividend |  |       | (183,620   | ) |             |   |            |                  |  |   | (183,620                       | ) |  |                     |         
|Transfers                                                            |  |       |           |   |             |   | 1,002,252  |                  |  |   | (1,002,252                     | ) |  |                     |         
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Balance, end-of-quarter, September 30, 2003                          |  | $     | 18,132,405 |   |             | $ | 15,332,345 |                  |  | $ | 2,368,813                      |   |  | $                   | 431,247 
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Disclosure of 2003 reclassification amount:                          |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Unrealized holding loss on available for sale securities             |  | $     | (454,168   | ) |             |   |            |                  |  |   |                                |   |  |                     |         
|Reclassification adjustment for gains realized in income             |  | $     | (79,738    | ) |             |   |            |                  |  |   |                                |   |  |                     |         
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Net unrealized loss                                                  |  | $     | (533,906   | ) |             |   |            |                  |  |   |                                |   |  |                     |         
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Tax effect                                                           |  |       | (181,528   | ) |             |   |            |                  |  |   |                                |   |  |                     |         
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         
|Net of tax amount                                                    |  | $     | (352,378   | ) |             |   |            |                  |  |   |                                |   |  |                     |         
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |  |                     |         



The accompanying Notes are an integral
part of these condensed financial statements.



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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

In Actual Dollars

As of September 30, 2002



|                                                                     |  | Total |            |   | CommonStock |   |            | RetainedEarnings |  |   | AccumulatedComprehensiveIncome |   | ComprehensiveIncome
|-------------------------------------------------------------------- |  | ----- | ---------- | - | ----------- | - | ---------- | ---------------- |  | - | ------------------------------ | - | -------------------
|Balance, December 31, 2000                                           |  | $     | 14,335,792 |   |             | $ | 12,836,358 |                  |  | $ | 1,308,515                      |   |                    
|Net income 2001                                                      |  |       | 1,188,815  |   |             |   |            |                  |  |   | 1,188,815                      |   |                    
|Unrealized gains on available for sale securities                    |  |       | 225,639    |   |             |   |            |                  |  |   |                                |   |                    
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Comprehensive income                                                 |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Proceeds from issuance of common stock                               |  |       | 52,360     |   |             |   | 52,360     |                  |  |   |                                |   |                    
|Repurchase of common stock                                           |  |       | (221,532   | ) |             |   | (221,532   | )                |  |   |                                |   |                    
|Fractional shares, issued in cash                                    |  |       | (2,369     | ) |             |   |            |                  |  |   | (2,369                         | ) |                    
|Transfers                                                            |  |       |           |   |             |   | 828,000    |                  |  |   | (828,000                       | ) |                    
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Balance December 31, 2001                                            |  |       | 15,578,705 |   |             |   | 13,495,186 |                  |  |   | 1,666,961                      |   |                    
|Net income, 2002, year-to-date                                       |  |       | 1,045,250  |   |             |   |            |                  |  |   | 1,045,250                      |   |                    
|Unrealized gains on available for sale securities                    |  |       | 240,039    |   |             |   |            |                  |  |   |                                |   |                    
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Comprehensive income                                                 |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Proceeds from issuance of common stock                               |  |       | 27,802     |   |             |   | 27,802     |                  |  |   |                                |   |                    
|Repurchase of common stock                                           |  |       | (9,161     | ) |             |   | (9,161     | )                |  |   |                                |   |                    
|Cash dividend paid/purchase partial shares created by stock dividend |  |       | (2,289     | ) |             |   |            |                  |  |   | (2,289                         | ) |                    
|Transfers                                                            |  |       |           |   |             |   | 811,462    |                  |  |   | (811,462                       | ) |                    
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Balance, end-of-quarter, September 30, 2002                          |  | $     | 16,880,346 |   |             | $ | 14,325,289 |                  |  | $ | 1,898,460                      |   |                    
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Disclosure of 2002 reclassification amount:                          |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Unrealized holding gain on available for sale securities             |  | $     | 538,749    |   |             |   |            |                  |  |   |                                |   |                    
|Reclassification adjustment for gains realized in income             |  | $     | (175,054   | ) |             |   |            |                  |  |   |                                |   |                    
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Net unrealized gain                                                  |  | $     | 363,695    |   |             |   |            |                  |  |   |                                |   |                    
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Tax effect                                                           |  |       | 123,656    |   |             |   |            |                  |  |   |                                |   |                    
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |                    
|Net of tax amount                                                    |  | $     | 240,039    |   |             |   |            |                  |  |   |                                |   |                    
|                                                                     |  |       |            |   |             |   |            |                  |  |   |                                |   |                    



The
accompanying Notes are an integral part of these condensed financial statements.



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##### Table of Contents

Notes to Consolidated Financial Statements



NOTE
1.    Management Statement



In the
opinion of the Company, the accompanying audited and unaudited Consolidated Financial Statements reflect all adjustments necessary for a fair presentation of the financial position of the Company as of September 30, 2003 and December 31, 2002, as
well as the results of operations and changes in financial position for the three-month and nine-month, year-to-date periods ended September 30, 2003 and 2002. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed statements be read in conjunction with the Independent Auditors Report
and Financial Statements contained in the Companys most recent Annual Report on Form 10-KSB as of December 31, 2002.



Certain reclassifications of September 30, 2002 balances have been made to conform to the September 30, 2003 presentation; there was no impact on net
income or stockholders equity. The number of weighted average shares outstanding, the effect of dilutive securities on earnings per share and the calculation of earnings per share have been restated for the three-month and nine-month,
year-to-date periods ending September 30, 2002 to reflect the effect of a five-percent stock dividend effective for shareholders of record as of May 15, 2003.



NOTE 2.    Securities



Most of the securities are classified as available-for-sale and are stated at fair value, and unrealized holding gains and losses, net of related deferred
taxes, are reported as a separate component of stockholders equity. Gains or losses on available-for-sale securities sales are reported as part of non-interest income based on the net proceeds and the adjusted carrying amount of the securities
sold, using the specific identification method. Pre-tax, realized net gains of $47,255 and $79,738 are included in the financial results for the three-month and nine-month, year-to-date periods ending September 30, 2003; gains of $176,003 and
$175,054 are included in the financial results for the three-month and nine-month, year-to-date periods ending September 30, 2002. Carrying amounts and fair values at September 30, 2003 and December 31, 2002 were as follows (in thousands):



|                                                                 |  | September 30, 2003 |        | December 31, 2002
|---------------------------------------------------------------- |  | ------------------ | ------ | -----------------
|                                                                 |  | AmortizedCost      |        | Fair Value       
|Securities available-for-sale:                                   |  |                    |        |                  
|US Treasury securities                                           |  | $                  | 7,141  |                  
|Obligations of federal government agencies                       |  |                    | 18,522 |                  
|Mortgage backed securities                                       |  |                    | 3,903  |                  
|Corporate Bonds                                                  |  |                    | 3,084  |                  
|                                                                 |  |                    |        |                  
|TOTAL                                                            |  | $                  | 32,650 |                  
|                                                                 |  |                    |        |                  
|                                                                 |  |                    |        |                  
|Securities held-to-maturity:                                     |  |                    |        |                  
|Obligations of states, municipalities and political subdivisions |  | $                  | 2,738  |                  
|                                                                 |  |                    |        |                  



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NOTE 3.    Loans



Loan detail by category as of September 30, 2003 and December 31, 2002 is as follows (in thousands):



|                          |  | September 30 2003 |         | December 31 2002
|------------------------- |  | ----------------- | ------- | ----------------
|Commercial loans          |  | $                 | 115,392 |                 
|Real estate loans         |  |                   | 21,090  |                 
|Installment loans         |  |                   | 4,532   |                 
|Consumer and other loans  |  |                   | 6,868   |                 
|                          |  |                   |         |                 
|TOTAL LOANS               |  | $                 | 147,882 |                 
|                          |  |                   |         |                 
|Allowance for loan losses |  |                   | -2,324  |                 
|Net deferred loan fees    |  |                   | -306    |                 
|                          |  |                   |         |                 
|NET LOANS                 |  | $                 | 145,252 |                 
|                          |  |                   |         |                 



NOTE
4.    Allowance for Loan Losses



The
allowance for loan losses is maintained at a level considered adequate by management to provide for reasonably anticipated credit losses in the Banks loan portfolio. Future credit losses are estimated through an analysis of various factors
affecting the performance of the loan portfolio, including: individual review of problem loans, including an evaluation of the quality of underlying collateral; current business conditions and the Banks historical loan loss experience; the
term, in years, that the average loan is expected to remain on the Banks books; and other factors that management determines to be relevant at the time of the analysis. Changes in the allowance for loan losses during the three-month and
nine-month, year-to-date periods ended September 30, 2003 and 2002 were as follows (in thousands):



|                             |  | Three Months Ended |       | Year-to-date
|---------------------------- |  | ------------------ | ----- | ------------
|                             |  | 09/30/2003         |       | 09/30/2002  
|Balance, beginning of period |  | $                  | 2,291 |             
|Provision for loan losses    |  |                    | 150   |             
|Loan Charge-offs             |  |                    | 122   |             
|Loan Recoveries              |  |                    | 5     |             
|                             |  |                    |       |             
|Balance, end of period       |  | $                  | 2,324 |             



NOTE
5.    Borrowed Funds



The
Companys subsidiary, Inland Northwest Bank, has unsecured operating lines of credit with Key Bank of Washington for $6,000,000, US Bank for $1,500,000 and Zions Bank for $1,500,000. The



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Bank also has a secured line of credit with the Federal Home Loan Bank of Seattle (FHLB) for approximately $20,156,682 (10.0% of Bank assets.) On September
30, 2003 the Bank had balances outstanding on its unsecured operating lines of credit in the amount of $1,000,000 and on its secured (FHLB) line of credit in the amount of $2,400,000. There were no balances outstanding on any of the lines on
September 30, 2002. On December 31, 2002 there was $600,000 outstanding on the FHLB line. In addition to overnight funds, the Bank has access to long-term funding through the FHLB in the approximate amount of $10,078,341 (5.0% of Bank assets) and
has taken advances to fund Community Investment Program and other loans utilizing these funds. Long-term notes payable to the FHLB were $7,700,824 on September 30, 2003 and $5,986,574 on December 31, 2002.



NOTE 6.    Common Stock



On February 18, 2003, the Board of Directors declared a five-percent stock
dividend payable to shareholders of record as of May 15, 2003. Shares reported as outstanding as of December 31, 2002, as well as earnings per share and the number of weighted average shares outstanding and the effect of dilutive securities for the
three-month and nine-month, year-to-date periods ending September 30, 2002, have been restated to reflect the stock dividend.



On February 18, 2003, the Board of Directors declared a ten-cent ($0.10) per share cash dividend, which was paid on April 4, 2003 to shareholders of
record as of March 21, 2003.



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Item 2.    Managements Discussion and Analysis or Plan of Operation



The Registrant relied upon Alternative 2 in its registration statement filed on Form 10-SB; there is no information to provide in response to Item
6(a)(3)(i) to Model B of Form 1-A.



Item 3.    Controls and Procedures



The officers signing this report: are responsible for maintaining internal controls; have designed such internal controls to ensure that material information relating to the Company and its consolidated subsidiary is
made known to them by others within those entities, particularly for the period(s) for and in which this report was being prepared; have evaluated the effectiveness of the Companys internal controls as of the end of the period covered by this
report; and, believe that, as of the date of this report and for the periods presented, existing internal controls are effective and adequate based on their evaluation. There have been no significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



Part II Other Information



Item 6.    Exhibits and Reports on Form 8-K



|(a) |  | Exhibit 31.1                                                                                                                                          
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | Certification of Randall L. Fewel, President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                   
|    | 
|    |  | Exhibit 31.2                                                                                                                                          
|    |  | Certification of Christopher C. Jurey, Executive Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|    | 
|    |  | Exhibit 32.1                                                                                                                                          
|    |  | Certification of Randall L. Fewel, President and Chief Executive Officer pursuant to 18 U.S.C. 1350                                                   
|    | 
|    |  | Exhibit 32.2                                                                                                                                          
|    |  | Certification of Christopher C. Jurey, Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. 1350                                
|    | 
|(b) |  | Reports on Form 8-K                                                                                                                                   
|    |  | The Company filed the following report on Form 8-K during the period covered by this Report:                                                          
|    | 
|    |  | Report filed July 15, 2003. On July 15, 2003 the Company issued a press release announcing financial information for the second-quarter of 2003.      



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SIGNATURES



In accordance with
Section 12 of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



NORTHWEST BANCORPORATION, INC.By

/s/    RANDALL L.
FEWELRandall L. Fewel, President and Chief Executive Officer




Date: November 10, 2003



In accordance with Section 12
of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



NORTHWEST BANCORPORATION, INC.By

/s/    CHRISTOPHER C.
JUREYChristopher C. Jurey, Executive Vice President and Chief Financial Officer




Date: November 10, 2003



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