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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 1/1/05 to 3/31/05.
|- | ------------------------------------------------------------------------------------------------------------------------------------



Commission file number 000-24151



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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
2,105,209 shares issued and outstanding as of March 31, 2005.



Transitional Small Business Disclosure Format:



Yes   x     No ̈



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##### Table of Contents

Table of Contents



|               |  |                                                                                                  |  |     
|-------------- |  | ------------------------------------------------------------------------------------------------ |  | ----
|               |  |                                                                                                  |  | Page
|               |  |                                                                                                 
|Part I         |  | Financial Information                                                                            |  | 1   
|               |  |                                                                                                 
|Item 1.        |  | Financial Statements                                                                             |  | 1   
|               |  |                                                                                                 
|               |  | Consolidated Statements of Condition  March 31, 2005 and December 31, 2004                      |  | 1   
|               |  |                                                                                                 
|               |  | Consolidated Statements of Income  Three-months, year-to-date, ended March 31, 2005 and 2004    |  | 2   
|               |  |                                                                                                 
|               |  | Consolidated Statements of Cash Flow  Three-months, year-to-date, ended March 31, 2005 and 2004 |  | 4   
|               |  |                                                                                                 
|               |  | Consolidated Statements of Stockholders Equity as of March 31, 2005 and 2004                    |  | 5   
|               |  |                                                                                                 
|               |  | Notes to Consolidated Financial Statements                                                       |  | 7   
|               |  |                                                                                                 
|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

Unaudited

March 31, 2005 and December 31, 2004

($ in thousands)



|                                                                                                                                                  |  |              |         |   |                 |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | --------------- | - | ------- | -
|                                                                                                                                                  |  | March 312005 |         |   | December 312004 |  
|Assets                                                                                                                                            |  |              |         |   |                 |   |         |  
|Cash and due from banks                                                                                                                           |  | $            | 7,379   |   |                 | $ | 7,736   |  
|Federal funds sold/FHLB interest bearing balances                                                                                                 |  |              | 3,141   |   |                 |   | 3,503   |  
|Securities held-to-maturity (Note 2)                                                                                                              |  |              | 2,739   |   |                 |   | 2,706   |  
|Securities available-for-sale (Note 2)                                                                                                            |  |              | 33,200  |   |                 |   | 38,261  |  
|Federal Home Loan Bank stock, at cost                                                                                                             |  |              | 646     |   |                 |   | 643     |  
|Loans, net of allowance for loan losses of $1,976 in 2005 and $1,944 in 2004 (Notes 3 & 4)                                                        |  |              | 162,316 |   |                 |   | 157,438 |  
|Loans held for sale                                                                                                                               |  |              | 1,321   |   |                 |   | 623     |  
|Accrued interest receivable                                                                                                                       |  |              | 898     |   |                 |   | 831     |  
|Premises and equipment, net                                                                                                                       |  |              | 5,041   |   |                 |   | 4,358   |  
|Foreclosed real estate                                                                                                                            |  |              | 735     |   |                 |   | 723     |  
|Bank owned life insurance                                                                                                                         |  |              | 3,222   |   |                 |   | 3,193   |  
|Other assets                                                                                                                                      |  |              | 1,222   |   |                 |   | 457     |  
|                                                                                                                                                  |  |              |         |   |                 |   |         |  
|TOTAL ASSETS                                                                                                                                      |  | $            | 221,860 |   |                 | $ | 220,472 |  
|                                                                                                                                                  |  |              |         |   |                 |   |         |  
|                                                                                                                                                  |  |             
|Liabilities                                                                                                                                       |  |              |         |   |                 |   |         |  
|Noninterest bearing demand deposits                                                                                                               |  | $            | 42,287  |   |                 | $ | 38,872  |  
|Money Market accounts                                                                                                                             |  |              | 44,723  |   |                 |   | 53,605  |  
|NOW accounts                                                                                                                                      |  |              | 15,320  |   |                 |   | 14,233  |  
|Savings accounts                                                                                                                                  |  |              | 7,553   |   |                 |   | 7,262   |  
|Time Certificates of Deposit, $100,000 and over                                                                                                   |  |              | 27,958  |   |                 |   | 23,748  |  
|Time Certificates of Deposit, under $100,000                                                                                                      |  |              | 43,324  |   |                 |   | 39,317  |  
|                                                                                                                                                  |  |              |         |   |                 |   |         |  
|TOTAL DEPOSITS                                                                                                                                    |  |              | 181,165 |   |                 |   | 177,037 |  
|                                                                                                                                                  |  |             
|Securities sold under agreement to repurchase                                                                                                     |  |              | 13,494  |   |                 |   | 12,996  |  
|Borrowed funds (Note 5)                                                                                                                           |  |              | 5,116   |   |                 |   | 5,214   |  
|Borrowed funds, other (Note 5)                                                                                                                    |  |              | 599     |   |                 |   | 3,981   |  
|Accrued interest payable and other liabilities                                                                                                    |  |              | 1,289   |   |                 |   | 1,283   |  
|                                                                                                                                                  |  |              |         |   |                 |   |         |  
|TOTAL OTHER LIABILITIES                                                                                                                           |  |              | 20,498  |   |                 |   | 23,474  |  
|                                                                                                                                                  |  |              |         |   |                 |   |         |  
|TOTAL DEPOSITS & LIABILITIES                                                                                                                      |  |              | 201,663 |   |                 |   | 200,511 |  
|                                                                                                                                                  |  |              |         |   |                 |   |         |  
|Stockholders Equity                                                                                                                              |  |              |         |   |                 |   |         |  
|Common stock, no par, 5,000,000 shares authorized; issued and outstanding 2,105,209 on March 31, 2005 and 2,105,146 on December 31, 2004 (Note
6) |  |              | 16,944  |   |                 |   | 16,943  |  
|Retained earnings                                                                                                                                 |  |              | 3,513   |   |                 |   | 3,063   |  
|Accumulated other comprehensive income, net of tax of ($134) for 2005 and ($23) for 2004                                                          |  |              | (260    | ) |                 |   | (45     | )
|                                                                                                                                                  |  |              |         |   |                 |   |         |  
|TOTAL STOCKHOLDERS EQUITY                                                                                                                        |  |              | 20,197  |   |                 |   | 19,961  |  
|                                                                                                                                                  |  |              |         |   |                 |   |         |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                        |  | $            | 221,860 |   |                 | $ | 220,472 |  
|                                                                                                                                                  |  |              |         |   |                 |   |         |  



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



1



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##### Table of Contents



NORTHWEST BANCORPORATION,
INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

Unaudited

Three months, year-to-date, ended March 31, 2005 and 2004

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



|                                                          |  |                            |       |      |   |      
|--------------------------------------------------------- |  | -------------------------- | ----- | ---- | - | -----
|                                                          |  | Three-months, year-to-date
|                                                          |  | 2005                       |       | 2004
|Interest Income                                           |  |                            |       |      |   |      
|Interest and fees on loans                                |  | $                          | 2,629 |      | $ | 2,354
|Interest on securities                                    |  |                            | 370   |      |   | 368  
|Interest on federal funds sold                            |  |                            | 27    |      |   | 18   
|                                                          |  |                            |       |      |   |      
|TOTAL INTEREST INCOME                                     |  |                            | 3,026 |      |   | 2,740
|                                                          |  |                           
|Interest Expense                                          |  |                            |       |      |   |      
|Interest on deposits                                      |  |                            | 701   |      |   | 598  
|Interest on securities sold under agreement to repurchase |  |                            | 63    |      |   | 20   
|Interest on borrowed funds                                |  |                            | 80    |      |   | 86   
|                                                          |  |                            |       |      |   |      
|TOTAL INTEREST EXPENSE                                    |  |                            | 844   |      |   | 704  
|NET INTEREST INCOME                                       |  |                            | 2,182 |      |   | 2,036
|Provision for loan losses                                 |  |                            | 60    |      |   | 80   
|                                                          |  |                            |       |      |   |      
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES       |  |                            | 2,122 |      |   | 1,956
|                                                          |  |                           
|Noninterest Income                                        |  |                            |       |      |   |      
|Fees and service charges                                  |  |                            | 232   |      |   | 242  
|Net gain from sale of loans                               |  |                            | 81    |      |   | 68   
|Gain on sale of securities                                |  |                            | 0     |      |   | 37   
|Other noninterest income                                  |  |                            | 151   |      |   | 101  
|                                                          |  |                            |       |      |   |      
|TOTAL NONINTEREST INCOME                                  |  |                            | 464   |      |   | 448  
|                                                          |  |                           
|Noninterest Expense                                       |  |                            |       |      |   |      
|Salaries and employee benefits                            |  |                            | 1,138 |      |   | 1,104
|Occupancy, furniture, fixture & equipment expense         |  |                            | 204   |      |   | 195  
|Depreciation and amortization expense                     |  |                            | 112   |      |   | 114  
|Other operating expense                                   |  |                            | 506   |      |   | 374  
|                                                          |  |                            |       |      |   |      
|TOTAL NONINTEREST EXPENSE                                 |  |                            | 1,960 |      |   | 1,787
|INCOME BEFORE TAXES                                       |  |                            | 626   |      |   | 617  
|Income tax expense                                        |  |                            | 176   |      |   | 210  
|                                                          |  |                            |       |      |   |      
|NET INCOME                                                |  | $                          | 450   |      | $ | 407  
|                                                          |  |                            |       |      |   |      



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



2



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##### Table of Contents

|                                                                      |  |                            |           |      |   |          
|--------------------------------------------------------------------- |  | -------------------------- | --------- | ---- | - | ---------
|                                                                      |  | Three-months, year-to-date
|                                                                      |  | 2005                       |           | 2004
|Weighted average shares outstanding (Note 6)                          |  |                            | 2,105,201 |      |   | 2,093,397
|Basic earnings per share                                              |  | $                          | 0.21      |      | $ | 0.19     
|                                                                      |  |                            |           |      |   |          
|Weighted average shares outstanding (Note 6)                          |  |                            | 2,105,201 |      |   | 2,093,397
|Effect of dilutive securities                                         |  |                            | 41,244    |      |   | 31,937   
|Weighted average shares outstanding, adjusted for dilutive securities |  |                            | 2,146,445 |      |   | 2,125,333
|Earnings per share assuming full dilution                             |  | $                          | 0.21      |      | $ | 0.19     
|                                                                      |  |                            |           |      |   |          



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



3



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NORTHWEST BANCORPORATION,
INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOW

Unaudited

Three months, year-to-date, ended March 31, 2005 and 2004

($ in thousands)



|                                                                              |  |                             |        |   |      |   |        |  
|----------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                              |  | Three months, year-to- date |       
|                                                                              |  | 2005                        |        |   | 2004 |  
|Net income                                                                    |  | $                           | 450    |   |      | $ | 407    |  
|Adjustments to reconcile net income to cash provided by operating activities: |  |                             |        |   |      |   |        |  
|Provision for loan losses                                                     |  |                             | 60     |   |      |   | 80     |  
|Depreciation and amortization                                                 |  |                             | 112    |   |      |   | 114    |  
|Change in assets and liabilities:                                             |  |                             |        |   |      |   |        |  
|Accrued interest receivable                                                   |  |                             | (67    | ) |      |   | 79     |  
|Net increase in loans held for sale                                           |  |                             | (698   | ) |      |   | (1,219 | )
|Net increase in bank owned life insurance                                     |  |                             | (29    | ) |      |   | (23    | )
|Other assets                                                                  |  |                             | (657   | ) |      |   | (78    | )
|Accrued interest payable & other liabilities                                  |  |                             | 6      |   |      |   | 304    |  
|                                                                              |  |                             |        |   |      |   |        |  
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                     |  |                             | (823   | ) |      |   | (336   | )
|                                                                              |  |                            
|Cash flows from investing activities:                                         |  |                             |        |   |      |   |        |  
|Net decrease/(increase) in federal funds sold/FHLB interest bearing balances  |  |                             | 362    |   |      |   | (2,617 | )
|Net (increase)/decrease in investment securities                              |  |                             | 4,702  |   |      |   | (394   | )
|Net (increase)/decrease in loans                                              |  |                             | (4,938 | ) |      |   | 4,129  |  
|Purchase of premises and equipment net of gain or loss on asset disposal      |  |                             | (795   | ) |      |   | (123   | )
|Foreclosed real estate activity (net)                                         |  |                             | (12    | ) |      |   | 26     |  
|                                                                              |  |                             |        |   |      |   |        |  
|NET CASH PROVIDED/(USED) BY INVESTING ACTIVITIES                              |  |                             | (681   | ) |      |   | 1,021  |  
|                                                                              |  |                            
|Cash flows from financing activities:                                         |  |                             |        |   |      |   |        |  
|Net increase/(decrease) in deposits                                           |  |                             | 4,128  |   |      |   | (753   | )
|Net increase/(decrease) in securities sold under agreement to repurchase      |  |                             | 498    |   |      |   | (230   | )
|Repayment of borrowed funds                                                   |  |                             | (3,480 | ) |      |   | (101   | )
|Cash received from stock sales                                                |  |                             | 1      |   |      |   | 0      |  
|NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES                              |  |                             | 1,147  |   |      |   | (1,084 | )
|                                                                              |  |                            
|Net decrease in cash and cash equivalents                                     |  |                             | (357   | ) |      |   | (399   | )
|Cash and due from banks, beginning of year                                    |  |                             | 7,736  |   |      |   | 7,466  |  
|                                                                              |  |                             |        |   |      |   |        |  
|CASH AND DUE FROM BANKS, END OF QUARTER                                       |  | $                           | 7,379  |   |      | $ | 7,067  |  



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



4



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##### Table of Contents



NORTHWEST BANCORPORATION,
INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

Unaudited

In thousands

As of March 31, 2005



|                                                         |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|-------------------------------------------------------- |  | ----- | ------ | - | ----------- | - | ---------------- |  | - | ------------------------------ | - |  | ------------------- | ------ | - |  | - | ----- | -
|                                                         |  | Total |        |   | CommonStock |   | RetainedEarnings |  |   | AccumulatedComprehensiveIncome |   |  | ComprehensiveIncome |       
|Balance, December 31, 2003                               |  | $     | 18,504 |   |             | $ | 15,332           |  | $ | 2,833                          |   |  | $                   | 339    |   |  |   |       |  
|Net income 2004                                          |  |       | 1,964  |   |             |   |                  |  |   | 1,964                          |   |  |                     |        |   |  | $ | 1,964 |  
|Unrealized losses on available for sale securities       |  |       | (384   | ) |             |   |                  |  |   |                                |   |  |                     | (384   | ) |  |   | (384  | )
|                                                         |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|Comprehensive income                                     |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   | 1,580 |  
|Proceeds from issuance of common stock                   |  |       | 109    |   |             |   | 109              |  |   |                                |   |  |                     |        |   |  |   |       |  
|Cash dividends paid                                      |  |       | (232   | ) |             |   |                  |  |   | (232                           | ) |  |                     |        |   |  |   |       |  
|Transfers                                                |  |       | 0      |   |             |   | 1,502            |  |   | (1,502                         | ) |  |                     |        |   |  |   |       |  
|                                                         |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|Balance December 31, 2004                                |  |       | 19,961 |   |             |   | 16,943           |  |   | 3,063                          |   |  |                     | (45    | ) |  |   |       |  
|Net income, 2005, year-to-date                           |  |       | 450    |   |             |   |                  |  |   | 450                            |   |  |                     |        |   |  |   | 450   |  
|Unrealized losses on available for sale securities       |  |       | (215   | ) |             |   |                  |  |   |                                |   |  |                     | (215   | ) |  |   | (215  | )
|                                                         |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|Comprehensive income                                     |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  | $ | 235   |  
|Proceeds from issuance of common stock                   |  |       | 1      |   |             |   | 1                |  |   |                                |   |  |                     |        |   |  |   |       |  
|                                                         |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|Balance, end-of-quarter, March 31, 2005                  |  | $     | 20,197 |   |             | $ | 16,944           |  | $ | 3,513                          |   |  |                     | ($260) |   |  |   |       |  
|                                                         |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|Disclosure of 2005 reclassification amount:              |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|Unrealized holding loss on available for sale securities |  |       | ($326  | ) |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|Reclassification adjustment for gains realized in income |  |       | 0      |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|Net unrealized loss                                      |  |       | (326   | ) |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|Tax effect                                               |  |       | (111   | ) |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|                                                         |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|Net of tax amount                                        |  |       | ($215  | ) |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  
|                                                         |  |       |        |   |             |   |                  |  |   |                                |   |  |                     |        |   |  |   |       |  



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



5



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##### Table of Contents



NORTHWEST BANCORPORATION,
INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

Unaudited

In thousands

As of March 31, 2004



|                                                         |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|-------------------------------------------------------- |  | ----- | ------ | - | ----------- | - | ------ | ---------------- |  | - | ------------------------------ | - |  | ------------------- | ---- | - |  | - | ----- | -
|                                                         |  | Total |        |   | CommonStock |   |        | RetainedEarnings |  |   | AccumulatedComprehensiveIncome |   |  | ComprehensiveIncome |     
|Balance, December 31, 2002                               |  | $     | 17,381 |   |             | $ | 14,325 |                  |  | $ | 2,272                          |   |  | $                   | 784  |   |  |   |       |  
|Net income 2003                                          |  |       | 1,746  |   |             |   |        |                  |  |   | 1,746                          |   |  |                     |      |   |  | $ | 1,746 |  
|Unrealized gains on available for sale securities        |  |       | (445   | ) |             |   |        |                  |  |   |                                |   |  |                     | (445 | ) |  |   | (445  | )
|                                                         |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Comprehensive income                                     |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   | 1,301 |  
|Proceeds from issuance of common stock                   |  |       | 31     |   |             |   | 31     |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Repurchase of common stock                               |  |       | (27    | ) |             |   | (27    | )                |  |   |                                |   |  |                     |      |   |  |   |       |  
|Cash dividends paid                                      |  |       | (182   | ) |             |   |        |                  |  |   | (182                           | ) |  |                     |      |   |  |   |       |  
|Transfers                                                |  |       | 0      |   |             |   | 1,003  |                  |  |   | (1,003                         | ) |  |                     |      |   |  |   |       |  
|                                                         |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Balance December 31, 2003                                |  |       | 18,504 |   |             |   | 15,332 |                  |  |   | 2,833                          |   |  |                     | 339  |   |  |   |       |  
|Net income, 2004, year-to-date                           |  |       | 407    |   |             |   |        |                  |  |   | 407                            |   |  |                     |      |   |  |   | 407   |  
|Unrealized losses on available for sale securities       |  |       | (23    | ) |             |   |        |                  |  |   |                                |   |  |                     | (23  | ) |  |   | (23   | )
|                                                         |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Comprehensive income                                     |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  | $ | 384   |  
|                                                         |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Balance, end-of-quarter, March 31, 2004                  |  | $     | 18,888 |   |             | $ | 15,332 |                  |  | $ | 3,240                          |   |  | $                   | 316  |   |  |   |       |  
|                                                         |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Disclosure of 2004 reclassification amount:              |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Unrealized holding loss on available for sale securities |  | $     | 2      |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Reclassification adjustment for gains realized in income |  |       | (37    | ) |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Net unrealized loss                                      |  |       | (35    | ) |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Tax effect                                               |  |       | (12    | ) |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|                                                         |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|Net of tax amount                                        |  |       | ($23)  |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  
|                                                         |  |       |        |   |             |   |        |                  |  |   |                                |   |  |                     |      |   |  |   |       |  



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 unaudited Consolidated Financial Statements reflect all adjustments necessary for a fair presentation of
the financial position of the Company as of March 31, 2005 and December 31, 2004, as well as the results of operations and changes in financial position for the three-month, year-to-date periods ended March 31, 2005 and 2004. 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, 2004.



Certain reclassifications of March 31, 2004 balances have been made to conform to the March 31, 2005 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 adjusted for the three-month,
year-to-date periods ending March 31, 2005 and 2004 to reflect the effect of a five-percent stock dividend effective for shareholders of record as of May 16, 2005 and payable on June 15, 2005.



|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. Realized 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, a realized net gain of $36,756 is included in the financial results for the three-month, year-to-date period ending March 31, 2004. Carrying amounts and fair values at March 31, 2005 and December 31, 2004 were as
follows (in thousands):



|                                                                 |  |                |        |                   |   |               |  |           |        |  |   |       
|---------------------------------------------------------------- |  | -------------- | ------ | ----------------- | - | ------------- |  | --------- | ------ |  | - | ------
|                                                                 |  | March 31, 2005 |        | December 31, 2004
|                                                                 |  | AmortizedCost  |        | FairValue         |   | AmortizedCost |  | FairValue
|Securities available-for-sale:                                   |  |                |        |                   |   |               |  |           |        |  |   |       
|Obligations of federal government agencies                       |  | $              | 26,697 |                   | $ | 26,285        |  | $         | 29,691 |  | $ | 29,544
|US Treasury securities                                           |  |                | 4,188  |                   |   | 4,174         |  |           | 5,203  |  |   | 5,200 
|Mortgage backed securities                                       |  |                | 1,723  |                   |   | 1,797         |  |           | 1,951  |  |   | 2,057 
|Corporate Bonds                                                  |  |                | 986    |                   |   | 944           |  |           | 1,484  |  |   | 1,460 
|                                                                 |  |                |        |                   |   |               |  |           |        |  |   |       
|TOTAL                                                            |  | $              | 33,594 |                   | $ | 33,200        |  | $         | 38,329 |  | $ | 38,261
|                                                                 |  |                |        |                   |   |               |  |           |        |  |   |       
|Securities held-to-maturity:                                     |  |                |        |                   |   |               |  |           |        |  |   |       
|Obligations of states, municipalities and political subdivisions |  | $              | 2,739  |                   | $ | 2,737         |  | $         | 2,706  |  | $ | 2,738 
|                                                                 |  |                |        |                   |   |               |  |           |        |  |   |       



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##### Table of Contents

|NOTE 3. | Loans
|------- | -----



Loan detail by category as of March 31, 2005 and December 31, 2004 is as follows (in thousands):



|                          |  |              |         |   |                 |   |         |  
|------------------------- |  | ------------ | ------- | - | --------------- | - | ------- | -
|                          |  | March 312005 |         |   | December 312004 |  
|Commercial loans          |  | $            | 119,725 |   |                 | $ | 121,820 |  
|Real estate loans         |  |              | 32,954  |   |                 |   | 25,644  |  
|Consumer and other loans  |  |              | 7,724   |   |                 |   | 7,878   |  
|Installment loans         |  |              | 4,209   |   |                 |   | 4,368   |  
|                          |  |              |         |   |                 |   |         |  
|TOTAL LOANS               |  | $            | 164,612 |   |                 | $ | 159,710 |  
|                          |  |              |         |   |                 |   |         |  
|Allowance for loan losses |  |              | (1,976  | ) |                 |   | (1,944  | )
|Net deferred loan fees    |  |              | (320    | ) |                 |   | (328    | )
|                          |  |              |         |   |                 |   |         |  
|NET LOANS                 |  | $            | 162,316 |   |                 | $ | 157,438 |  
|                          |  |              |         |   |                 |   |         |  



|NOTE 4. | Allowance for Loan Losses
|------- | -------------------------



The Companys subsidiary, Inland Northwest Bank (the Bank) maintains an allowance for loan losses 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. In accordance with accounting and regulatory requirements, the portion of the allowance relating to unused loan commitments and other off-balance sheet
items is reclassified to Accrued interest payable and other liabilities. Changes in the allowance for loan losses during the three-month, year-to-date periods ended March 31, 2005 and 2004 were as follows (in thousands):



|                                                                                                                                                           |  |                                           |       |   |      |   |       |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------- | ----- | - | ---- | - | ----- | -
|                                                                                                                                                           |  | Three months, year-to-date,ended March 31 |      
|                                                                                                                                                           |  | 2005                                      |       |   | 2004 |  
|Balance, beginning of period                                                                                                                               |  | $                                         | 1,944 |   |      | $ | 2,042 |  
|Add reserve for probable losses on unused loan commitments and off-balance sheet items (OBS)                                                               |  |                                           | 206   |   |      |   | 183   |  
|                                                                                                                                                           |  |                                           |       |   |      |   |       |  
|Balance, beginning of period, including OBS reserve                                                                                                        |  |                                           | 2,150 |   |      |   | 2,225 |  
|Provision for loan losses                                                                                                                                  |  |                                           | 60    |   |      |   | 80    |  
|Loan Charge-offs                                                                                                                                           |  |                                           | (12   | ) |      |   | (132  | )
|Loan Recoveries                                                                                                                                            |  |                                           | 13    |   |      |   | 2     |  
|                                                                                                                                                           |  |                                           |       |   |      |   |       |  
|Balance, end of period, prior to adjustment for off-balance sheet items                                                                                    |  |                                           | 2,211 |   |      |   | 2,175 |  
|Reclassification of reserve for probable losses on unused loan commitments and off-balance sheet items to Accrued interest payable and
other liabilities |  |                                           | (235  | ) |      |   | (231  | )
|                                                                                                                                                           |  |                                           |       |   |      |   |       |  
|Balance, end of period                                                                                                                                     |  | $                                         | 1,976 |   |      | $ | 1,944 |  



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##### Table of Contents

|NOTE 5. | Borrowed Funds
|------- | --------------



The Bank has three unsecured operating lines of credit with KeyBank of Washington for $9,200,000, with two lines totaling $9,100,000, maturing July 1,
2005, and the remaining $100,000 line maturing on July 1, 2006. In addition, the Bank maintains a line of credit with U.S. Bank for $1,500,000, maturing July 31, 2005, and Zions Bank for $1,500,000 with no stated maturity. There was zero outstanding
on these lines at March 31, 2005 and December 31, 2004. The Bank also has a line of credit with the Federal Home Loan Bank of Seattle (FHLB) for $31,338,000 at March 31, 2005, with $26,223,000 available in overnight funds and long-term funds. This
line is collateralized by all assets of the Bank. There were $5,115,313 and $5,214,270 of outstanding long-term advances on the Federal Home Loan Bank line at March 31, 2005 and December 31, 2004, respectively. There was zero outstanding on
overnight funds on the FHLB line at March 31, 2005 and December 31, 2004.



Other borrowed funds outstanding on March 31, 2005 are related to a ground lease, with a purchase option, that the Bank entered into in early 2005 (a copy of the ground lease was filed as Exhibit 10.1.10 to the
Companys Annual Report on Form 10-KSB filed on March 24, 2005). As a capitalized lease, the value of the property, $600,404, is included as an asset on the consolidated statement of financial condition in Premises and
equipment, net and the net present value of future payments is included as a liability in Borrowed funds, other. Other borrowed funds outstanding on December 31, 2004 related to certain non-recourse loan participation sold
agreements between the Bank and other financial institutions. Those participation agreements contained call options that provided the Bank contractual rights to repurchase the participated interest in the loans at any time. In accordance with
SFAS-140, the participated interest was included as a structured note in Borrowed funds, other on the consolidated statement of financial condition.



|NOTE 6. | Common Stock
|------- | ------------



On April 20, 2004, the Board of Directors declared a five-percent stock dividend payable on June 15, 2004 to shareholders of record as of May 14, 2004. On
April 19, 2005, the Board of Directors declared a five-percent stock dividend payable on June 15, 2005 to shareholders of record as of May 16, 2005. Shares reported as outstanding, as well as earnings per share, the number of weighted average shares
outstanding and the effect of dilutive securities for the three-month, year-to-date periods ending March 31, 2005 and 2004, have been adjusted to reflect the stock dividends.



On April 20, 2004, the Board of Directors declared a twelve-cent ($0.12) per share cash dividend which was paid on June 15,
2004 to shareholders of record as of May 14, 2004. On April 19, 2005, the Board of Directors declared a fourteen-cent ($0.14) per share cash dividend which will be paid on June 15, 2005 to shareholders of record as of May 6, 2005.



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##### Table of Contents

|NOTE 7. | Subsequent Events
|------- | -----------------



At its April 19, 2005 meeting, the Board of Directors of the Company declared cash and stock dividends as detailed in Note 6. As detailed in Note 6,
shares reported as outstanding, earnings per share, the number of weighted average shares outstanding and the effect of dilutive securities for all periods presented have been adjusted to reflect the stock dividend payable.



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##### Table of Contents

|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 Companys President and Chief Financial Officer have evaluated the effectiveness of the Companys disclosure controls and procedures as of
the end of the period covered by this report. Based upon this evaluation, the Companys President and the Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective in ensuring that material
information required to be disclosed in this report has been made known to them in a timely fashion. There was no significant change in the Companys internal control over financial reporting during the first fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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, 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, 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 February 8, 2005. On February 8, 2005 the Company issued a
press release announcing financial information for the fourth-quarter of 2004.



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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: May 6, 2005



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, Chief Financial Officer




Date: May 6, 2005



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