U.S. SECURITIES AND EXCHANGE COMMISSION

                              Washington D.C. 20549

                                    Form 10-Q


           [X] Quarterly report Pursuant to section 13 or 15(d) of the
                       Securities and Exchange act of 1934

                    For the quarter ended September 30, 1998

          [ ] Transition report pursuant to section 13 or 15(d) of the
                       Securities and Exchange act of 1934

               For the transition period from ________ to ________

                             Commission file number
                                     0-23881
                             COWLITZ BANCORPORATION
             (Exact name of registrant as specified in its charter)

             Washington                                      91-152984
     (State or other jurisdiction of                       (IRS Employer
      incorporation or organization)                     Identification No.)


                  927 Commerce Ave., Longview, Washington 98632
               (Address of principal executive offices) (Zip Code)

                                 (360) 423-9800
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 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____

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Common Stock, no par value on October 31, 1998:      4,001,999



<PAGE>


                                TABLE OF CONTENTS
                                                                         Page
Part I
Financial Statements

Consolidated Balance Sheets -
September 30, 1998 and December 31, 1997                                  3

Consolidated Statements of Income -
Three and Nine months ended September  30, 1998 and September 30, 1997    4

Consolidated Statements of Cash Flows
Nine months ended September 30, 1998 and September 30, 1997               5

Consolidated Statements of Changes in Shareholders' Equity                6

Notes to Consolidated Financial Statements                                7

Management's Discussion and Analysis of Financial Condition
And Results of Operations                                                 11

Part II

Other

Changes in Securities and Use of Proceeds                                 20

Signatures                                                                21



<PAGE>


                             COWLITZ BANCORPORATION
                      CONSOLIDATED STATEMENTS OF CONDITION
                (in thousand of dollars, except number of shares)

<TABLE>
<CAPTION>
                                                                       September 30,    December 31,
                                                                        1998            1997
                                                                              (unaudited)
<S>                                                                    <C>              <C>
ASSETS
Cash and due from banks...........................................     $  14,442        $  23,109
Investment securities:
   Investments  available-for-sale  (at fair value, cost of $6,994
   and $3,993 at September 30, 1998 and December 31, 1997,
     respectively)................................................         7,090            4,017
   Investments held-to-maturity (at amortized cost, fair value of
     $6,699 and $4,486 at September 30, 1998 and December 31, 1997,
     respectively)................................................         6,646            4,464
                                                                       ---------        ---------
     Total investment securities..................................        13,736            8,481
                                                                       ---------        ---------

Loans.............................................................       134,227          131,963
Allowance for loan losses.........................................        (1,975)          (1,970)
                                                                       ---------        ---------
   Loans, net.....................................................       132,252          129,993
                                                                       ---------        ---------
Premises and equipment, net of accumulated depreciation of $1,739
   and $1,354 at September 30, 1998 and December 31, 1997,
   respectively...................................................         5,879            5,653
Federal Home Loan Bank stock......................................         2,816            2,658
Intangible assets, net of accumulated amortization of $339 and $123 at September
   30, 1998 and December 31, 1997,
   respectively...................................................         3,020            1,847
Other assets......................................................         2,190            1,552
                                                                       ---------        ---------
     Total assets.................................................     $ 174,335        $ 173,293
                                                                       =========        =========

LIABILITIES
Deposits:
   Demand.........................................................     $  28,040        $  27,141
   Savings and interest-bearing demand............................        45,784           46,454
   Certificates of deposit........................................        44,895           62,614
                                                                       ---------        ---------
     Total deposits...............................................       118,719          136,209
Short-term borrowings.............................................         1,950              725
Long-term borrowings..............................................        21,994           21,900
Other liabilities.................................................         1,201              572
                                                                       ---------        ---------
     Total liabilities............................................     $ 143,864         $159,406
                                                                       ---------        ---------

SHAREHOLDERS' EQUITY
  Preferred  stock,  no par  value;  5,000,000  and  no  shares
   authorized  as of September 30, 1998 and December 31, 1997,
   respectively;  no shares issued and outstanding at
   September 30, 1998 and December 31, 1997, respectively.........     $       -        $       -
  Common stock, no par value; 25,000,000 and 3,937,500 authorized
   as of September 30, 1998 and December 31, 1997, respectively;
   4,001,964 and 2,604,543 shares issued and outstanding at
   September 30, 1998 and December 31, 1997, respectively.........        18,251            3,262
Additional paid in capital........................................         1,538            1,538
Retained earnings.................................................        10,619            9,071
Net unrealized gains on investments available-for-sale............            63               16
                                                                       ---------        ---------
     Total shareholders' equity...................................        30,471           13,887
                                                                       ---------        ---------
     Total liabilities and shareholders' equity...................     $ 174,335        $ 173,293
                                                                       =========        =========
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>

                                     COWLITZ BANCORPORATION
                              CONSOLIDATED STATEMENTS OF INCOME
                    (in thousand of dollars, except per share amounts)
<TABLE>
<CAPTION>
                                                          Three months ended            Nine months ended
                                                                 September 30,                 September 30,
                                                              1998       1997                1998       1997
                                                          --------   --------           ---------  ---------
                                                                                   (unaudited)
<S>                                                       <C>        <C>                <C>        <C>
INTEREST INCOME
Interest and fees on loans.............................   $  3,504   $  3,481           $  10,292  $  10,131
Interest on taxable investment securities..............        243        180                 695        484
Interest on non-taxable investments securities.........          1          -                   2          -
Interest from other banks..............................        356        258               1,085        520
                                                          --------   --------           ---------  ---------
   Total interest income...............................      4,104      3,919              12,074     11,135
                                                          --------   --------           ---------  ---------

INTEREST EXPENSE
Savings and interest-bearing demand....................        504        351               1,422        867
Certificates of deposit................................        675      1,073               2,433      3,288
Short-term borrowings..................................         27         11                  64         33
Long-term borrowings...................................        365        361               1,035      1,045
                                                          --------   --------           ---------  ---------
   Total interest expense..............................      1,571      1,796               4,954      5,233
                                                          --------   --------           ---------  ---------
   Net interest income before provision for loan losses      2,533      2,123               7,120      5,902

PROVISION FOR LOAN LOSSES..............................       (111)      (111)               (243)      (300)
                                                          --------   --------           ---------  ---------
   Net interest income after provision for loan losses.      2,422      2,012               6,877      5,602
                                                          --------   --------           ---------  ---------

NONINTEREST INCOME
   Service charges on deposit accounts.................        168        173                 487        397
   Other income........................................         71         46                 242        137
   Net gains on sales of available-for-sale securities.          -          -                   5          -
                                                          --------   --------           ---------  ---------
     Total noninterest income..........................        239        219                 734        534
                                                          --------   --------           ---------  ---------

NONINTEREST EXPENSE
   Salaries and employee benefits......................        922        763               2,772      2,060
   Net occupancy and equipment expense.................        231        224                 655        521
   Other operating expense.............................        581        522               1,607      1,258
                                                          --------   --------           ---------  ---------
     Total noninterest expense.........................      1,734      1,509               5,034      3,839
                                                          --------   --------           ---------  ---------
     Income before income tax expense..................        927        722               2,577      2,297

INCOME TAX EXPENSE.....................................        315        245                 876        781
                                                          --------   --------           ---------  ---------
     Net income........................................   $    612   $    477           $   1,701  $   1,516
                                                          ========   ========           =========  =========

BASIC EARNINGS PER SHARE...............................   $   0.15   $   0.18           $   .47    $     .58
DILUTED EARNINGS PER SHARE.............................   $   0.15   $   0.18           $   .44    $     .58

</TABLE>
The accompanying notes are an integral part of these statements.




<PAGE>


                                       COWLTIZ BANCORPORATION AND SUBSIDIARY
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (in thousands of dollars)
<TABLE>
<CAPTION>
                                                                            Nine months ended
                                                                                 September 30,
                                                                            1998             1997
                                                                       ---------        ---------
                                                                              (unaudited)
<S>                                                                    <C>              <C>
 CASH FLOWS FROM OPERATING ACTIVITIES
   Net income.....................................................     $   1,701        $   1,516
   Adjustments to reconcile net income to net cash provided by
     Operating activities:
     Depreciation and amortization................................           601              316
     Provision for loan losses....................................           243              300
     Net amortization of investment security premiums and accretion
       of discounts...............................................            (4)              (2)
     (Increase) in other assets...................................          (582)            (125)
     Increase in other liabilities................................           168               50
     Federal Home Loan Bank stock dividends.......................          (158)            (142)
                                                                       ---------        ---------
         Net cash provided by operating activities................         1,969            1,913
                                                                       ---------        ---------

CASH FLOWS FROM INVESTING ACTIVITIES
   Proceeds from maturities of investment securities
     held-to-maturity.............................................         1,387            3,487
   Proceeds from sales of investment securities
     available-for-sale...........................................         1,000                -
   Purchases of investment securities:
     Held-to-maturity.............................................        (3,565)          (4,461)
     Available-for-sale...........................................        (3,996)          (1,994)
   Net (increase) in loans........................................          (145)          (6,346)
   Purchases of premises and equipment............................          (636)          (1,288)
   Proceeds from assumption of deposit liabilities................             -           22,885
   Acquisition of business, net of cash acquired..................        (1,575)               -
                                                                       ---------        ---------
       Net cash (used in) provided by investment activities.......        (7,530)          12,283
                                                                       ---------        ---------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase in demand, savings, and interest-bearing
     demand deposits..............................................           229             (938)
   Net (decrease) in certificates of deposit......................       (17,719)          (8,491)
   Dividends paid.................................................          (153)             (93)
   Net increase (decrease) in short-term borrowings...............         1,225              (75)
   Net proceeds (repayment) of long-term borrowings...............        (1,213)            (746)
   Purchase of treasury stock.....................................          (494)               -
   Issuance of common stock for cash, net of amount paid for
       fractional shares..........................................        15,019               52
                                                                       ---------        ---------
       Net cash provided by (used in) financing activities........        (3,106)         (10,291)
                                                                       ---------        ---------
       Net increase (decrease) in cash and due from banks.........        (8,667)           3,905

CASH AND DUE FROM BANKS AT BEGINNING OF YEAR......................        23,109           20,905
                                                                       ---------        ---------
CASH AND DUE FROM BANKS AT END OF PERIOD..........................     $  14,442        $  24,810
                                                                       =========        =========

</TABLE>
The accompanying notes are an integral part of these statements.


<PAGE>


                         COWLITZ BANCORPORATION AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                     (in thousands of dollars, except number of shares)
                                     (unaudited)
<TABLE>
<CAPTION>
                                                                                         Unrealized
                                                                                        Gains/losses
                                                                  Additional            on invest.    Total
                                                Common Stock       Paid-in   Retained   available-  Shareholders'
                                            Shares       Amount     Capital  Earnings    for-sale     Equity
                                            -------     -------  ---------  ----------   ---------  ------------
<S>                                       <C>         <C>        <C>        <C>          <C>       <C>
BALANCE AT DECEMBER 31, 1996              2,590,403   $  3,195   $  1,538   $  7,073     $    7    $  11,813
  Issuance of common stock for cash....      14,140         67          -          -          -           67
  Net income...........................           -          -          -      2,124          -        2,124
  Cash dividend paid ($.0143 per share)           -          -          -       (126)         -         (126)
  Net changes in unrealized gains on
     investments available-for-sale, net
     of deferred taxes of $5...........           -          -          -          -          9            9
                                         ----------   --------   --------   --------     ------    ---------

BALANCE AT DECEMBER 31, 1997...........   2,604,543      3,262      1,538      9,071        16        13,887
  Issuance of common stock for cash....   1,396,216     15,019          -          -          -       15,019
  Purchase of Treasury Stock...........     (50,000)      (494)         -          -          -         (494)
  Issuance of Common Stock for
  acquisition..........................      51,282        465          -          -          -          465
  Net income...........................           -          -          -      1,701          -        1,701
  Cash dividends paid ($.0125 per share)          -          -          -       (153)         -         (153)
  Net changes in unrealized gains on
     investments available-for-sale, net
     of deferred taxes of $24..........           -          -          -          -         47           47
Cash paid for fractional shares........         (77)        (1)         -          -          -           (1)
                                         -----------  ---------  --------   --------     ------    ---------

BALANCE AT SEPTEMBER 30, 1998             4,001,964   $ 18,251   $  1,538   $ 10,619     $     63   $  30,471
                                         ===========  ========   =========  ========    =========   =========

</TABLE>

The accompanying notes are an integral part of these statements.





<PAGE>


                      COWLITZ BANCORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Nature of Operations

     Cowlitz  Bancorporation (the Company) is a one-bank holding company located
in Southwest Washington.  The Company's principal subsidiary,  Cowlitz Bank (the
Bank), a Washington  state-chartered commercial bank, is the only community bank
headquartered in Cowlitz County and offers commercial banking services primarily
to small and  medium-sized  businesses,  professionals,  and  retail  customers.
During  the  third  quarter  of  1998  the  Company  acquired  Business  Finance
Corporation (BFC) of Bellevue, Washington. Business Finance Corporation provides
asset based financing to companies throughout the Western United States.

2. Principles of Consolidation

     The accompanying  consolidated financial statements include the accounts of
the Company and its subsidiaries.  All significant intercompany transactions and
balances have been eliminated.

     The interim  financial  statements  have been prepared in  accordance  with
generally  accepted  accounting  principles for interim  financial  information.
Accordingly,  they do not include all the information and footnotes  required by
generally accepted accounting principles for complete financial  statements.  In
the opinion of management, all adjustments,  including normal recurring accruals
necessary for fair presentation of results of operations for the interim periods
included  herein have been made.  The results of operations for the three months
and nine months  ended  September  30, 1998 are not  necessarily  indicative  of
results to be anticipated for the year ending December 31, 1998.

3.   Supplemental Cash Flow Information

     For purposes of presentation in the statements of cash flows, cash and cash
equivalents  are defined as those amounts in the balance sheet caption "Cash and
due from banks" and  included  cash on hand,  amounts due from banks and federal
funds sold. Federal funds sold generally mature the day following purchase.

4.  Use of Estimates in the Preparation of Financial Statements

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



<PAGE>


5.  Earnings Per Share

     The following  table  reconciles the numerator and denominator of the basic
and diluted earnings per share computations:

<TABLE>
<CAPTION>
                                                      Weighted       Per Share
                                    Net Income        Avg Shares       Amount

                                    For the three months ended September 30, 1998
<S>                                 <C>               <C>              <C>
 Basic earnings per share           $   612           4,001,066        $ .15
 Stock Options                                          176,139
 Diluted earnings per share         $   612           4,177,205        $ .15

                                    For the three months ended September 30, 1997

 Basic earnings per share           $   477           2,602,157        $ .18
 Stock Options                                                0
 Diluted earnings per share         $   477           2,602,157        $ .18

                                    For the nine months ended September 30, 1998

 Basic earnings per share           $ 1,701           3,619,488        $ .47
 Stock Options                                          203,119
 Diluted earnings per share         $1,701            3,822,607        $ .44

                                    For the nine months ended September 30, 1997

 Basic earnings per share           $ 1,516           2,600,751        $ .58
 Stock Options                                                0
 Diluted earnings per share         $ 1,516           2,600,751        $ .58

</TABLE>

     For the periods  reported the Company had no reconciling  items between net
income and income available to common shareholders.


6.  Recently Issued Accounting Standards

SAB No. 98

     In February 1998, the Securities and Exchange Commission (SEC) issued Staff
Accounting  Bulletin (SAB) No. 98 on computations of earnings per share. SAB No.
98,  which was  effective  upon  issuance,  revised  the SEC's  guidance  on the
treatment of stock options  issued  shortly  before an Initial  Public  Offering
(IPO) in earnings per share  calculations.  Prior to the issuance of SAB No. 98,
the SEC  required  that  stock  options  issued  within  one year of an IPO with
exercise  prices below the IPO price be treated as outstanding for all reporting
periods for purposes of  calculating  earnings per share.  The Company  followed
this guidance for the stock options granted September 30, 1997 and,  accordingly
treated the options as  outstanding  for all periods in computing both basic and
diluted  earnings  per  share.  SAB  No.  98 now  requires  that  only  "nominal
issuances"  of stock or stock  options be  reflected  in all  earnings per share
calculations for all periods presented.  The Company's September 30, 1997, stock
options do not meet the SEC's definition of a nominal  issuance.  As required by
SAB No. 98, these stock options are now included in the  calculation  of diluted
earnings per share only for periods  subsequent  to their  issuance on September
30, 1997, and are not included in the basic earnings per share calculation.



<PAGE>



As required by SAB No. 98, the Company has  restated  its  historical  basic and
diluted earnings per share to conform with this new guidance. The following is a
summary of the historical and restated earnings per share amounts:

<TABLE>
<CAPTION>
                                           Three months ended              Nine months ended
                                            September 30, 1997              September 30, 1997
                                          Basic         Diluted          Basic          Diluted
     <S>                                <C>            <C>             <C>            <C>
     Previously reported EPS........    $   .17        $  .17          $   .54        $   .54
     Restated EPS...................    $   .18        $  .18          $   .58        $   .58

</TABLE>

FAS No. 133

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 133, Accounting for Derivative  Instruments
and Hedging  Activities.  The  Statement  establishes  accounting  and reporting
standards  requiring  that  every  derivative   instrument   (including  certain
derivative  instruments  embedded in other contracts) be recorded in the balance
sheet as  either  an asset  or a  liability  measured  at its  fair  value.  The
Statement  requires  that changes in the  derivative's  fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gain and losses to offset
related results on the hedged item in the income statement,  and requires that a
company must  formally  document,  designate,  and assess the  effectiveness  of
transactions that receive hedge accounting.

     Statement 133 is effective for fiscal years  beginning after June 15, 1999.
A company may also  implement  the  Statement as of the  beginning of any fiscal
quarter after  issuance  (that is, fiscal  quarters  beginning June 16, 1998 and
thereafter).  Statement 133 cannot be applied retroactively.  Statement 133 must
be applied to (a) derivative  instruments and (b) certain derivative instruments
embedded  in hybrid  contracts  that were  issued,  acquired,  or  substantively
modified after December 31, 1997 (and, at the company's election, before January
1, 1998).

     The  implementation  of this  statement  is not expected to have a material
impact on the Company's financial position or results of operation.

7.  Comprehensive Income

     The Company has adopted Statement of Financial Accounting Standards No. 130
"Reporting Comprehensive Income," for the period ending September 30, 1998. This
statement  establishes  standards for the reporting and display of comprehensive
income  and  it's  components  in the  financial  statements.  For the  Company,
comprehensive  income  includes net income  reported on the statements of income
and changes in the fair value of it's available-for-sale investments reported as
a component of  shareholders'  equity.  The following  table presents net income
adjusted by the unrealized gains or losses on available-for-sale securities as a
component of comprehensive income:

<TABLE>
<CAPTION>
                                                             Three months ended Nine months ended

                                                                 September 30,             September 30,
                                                                1998       1997         1998       1997
                                                                ----       ----         ----       ----
                  <S>                                         <C>        <C>          <C>        <C>
                  Net income................................  $   612    $   477      $ 1,701    $ 1,516
                  Net change in unrealized gain/loss on
                    available for sale securities, net of tax      55         12           47          7
                                                               ------     --------     ------     ------
                  Comprehensive income......................  $   667    $   489      $ 1,748    $ 1,523
                                                              =======    =======      =======    =======
</TABLE>


<PAGE>


8.  Business Acquisition

     On August 31, 1998 the Company  acquired  Business  Finance  Corporation of
Bellevue,  Washington.  The  acquisition  was  accounted  for using the purchase
method,  including  issuance of common  stock with a value of  $465,000.  A cash
payment was made in the amount of $1.7  million  with an  adjustment  to be made
based on final determination of BFC's shareholder's  equity. A future contingent
issuance of common stock valued at approximately  $500,000 will be issued if BFC
achieves  earning targets for the twelve month period following the acquisition.
As part of the transaction,  goodwill was recorded in the amount of $1.4 million
to be amortized on a straight-line basis over a fifteen year period.


                           Fair market value of assets acquired,
                             including goodwill of $1,389.......$   3,932
                           Less liabilities assumed.............    1,768
                           Less stock issued....................      465
                                                                ---------
                           Cash paid for acquisition............    1,699
                           Less cash acquired...................      124
                                                                ---------
                           Net cash paid for acquisition........$   1,575
                                                                =========


9.  Reclassifications

     Certain prior year amounts have been reclassified to conform to the current
year presentation.


<PAGE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONS


     The following Management's  discussion and Analysis of Financial Conditions
and Results of Operations includes a discussion of certain significant  business
trends and  uncertainties as well as certain  forward-looking  statements and is
intended to be read in  conjunction  with and is  qualified  in its  entirety by
reference  to  the  consolidated   financial   statements  of  the  Company  and
accompanying notes included elsewhere herein.


Results of Operations

Net Income

   Three months ended September 30, 1998 and 1997

     The  Company's  net income of $612,000 at September  30, 1998,  reflects an
increase of 28.3%  compared to net income of $477,000 at September 30, 1997. The
increase is primarily a result of a 19.3%  increase in net  interest  income for
the quarter ended  September 30, 1998 as compared to the quarter ended September
30,  1997.  Earnings  per  diluted  share were $.15 for the three  months  ended
September  30, 1998  compared  to $.18 per diluted  share for the same period in
1997. This decrease was a result of the issuance of 1,380,000  additional shares
in the  Company's  IPO in March 1998.  As discussed in footnote 6 to the interim
financial  statements,  the  Company  has  restated  earnings  per share for the
quarter ended  September 30, 1997, as required by the SEC's recently  issued SAB
No.98.

   Nine months ended September 30, 1998 and 1997

     Net income for the first nine months of 1998 was $1.7  million  compared to
$1.5  million  for the  comparable  period  in  1997.  Net  income  for 1998 has
increased as the Company has replaced certain higher interest rate  certificates
of deposit with lower cost core  deposits as a result of the branch  acquisition
in July 1997.  The  increase is  primarily  a result of a 20.6%  increase in net
interest  income for the  quarter  ended  September  30, 1998 as compared to the
quarter ended September 30, 1997. Net income for the nine months ended September
30, 1998 also  reflects the increase in interest  income from the  investment of
funds from the Company's IPO in the first quarter of 1998.

Net Interest Income

   Three Months ended September 30, 1998 and 1997

     For  financial  institutions,  the  primary  component  of  earnings is net
interest income.  Net interest income is the difference between interest income,
principally  from  loans and  investment  securities  portfolios,  and  interest
expense, principally on customer deposits. Changes in net interest income result
from changes in "volume,"  "spread," and  "margin."  Volume refers to the dollar
level of interest-earning assets and interest-bearing liabilities. Spread refers
to the difference between the yield on  interest-earning  assets and the cost of
interest-bearing  liabilities.  Net interest margin is the ratio of net interest
income  to total  interest-earning  assets  and is  influenced  by the level and
relative mix of interest-earning assets and interest-bearing liabilities



<PAGE>


     Net  interest  income for the  quarter  ended  September  30, 1998 was $2.5
million, which was an increase of 19.3% from $2.1 million at September 30, 1997.
One  component  that  contributed  to this increase was the decrease in interest
expense in the third quarter of 1998.  Interest expense was $1.6 million for the
three months ended  September  30, 1998 down 12.5% when compared to $1.8 million
for the three months ended  September 30, 1997. The primary reason was a decline
of  $398,000  in the  interest  paid on  certificates  of  deposit.  Interest on
certificates for the quarter ending September 30, 1998 was $675,000  compared to
$1.1 million for the comparable  period in 1997. The Company  reduced pricing on
certain of its higher  yielding  certificates  after the acquisition of deposits
from three bank  branches in the third  quarter of 1997,  intending to eliminate
these higher cost  certificates of deposit at maturity.  In accordance with this
pricing  strategy,  average  interest  bearing  liabilities  decreased to $118.3
million at September 30, 1998 from $137.9  million at September 30, 1997. In the
third quarter of 1998, average rates paid on these interest-bearing  liabilities
increased slightly,  as management matched FHLB borrowings to longer term loans.
Also during the third quarter of 1998, a FHLB note matured,  which ultimately is
expected to result in an offset to this  increase in average rates paid on these
borrowings.

     Average  interest  earning assets for the quarter ending September 30, 1998
and September 30, 1997 were $161.3 million.  Although the average earning assets
were the same for both periods, the average yield earned on these average assets
for   September   30,  1998  and  September  30,  1997  was  10.18%  and  9.72%,
respectively.  This was a result of increased earnings on Federal Home Loan Bank
Stock in the quarter ending September 30, 1998 in the amount of $55,000 over the
quarter ending  September 30, 1997.  Loan fees,  which are treated as additional
interest  income,  increased  during the quarter  ending  September  30, 1998 by
$73,000 over the quarter ending  September 30, 1997.  During the quarter certain
interest earning assets were replaced with higher yielding assets.

Analysis of Net Interest Income

     The following  table  presents  information  regarding  yields and interest
earning  assets,  expense on  interest  bearing  liabilities,  and net yields on
interest earning assets for periods indicated on a tax equivalent basis.

<TABLE>
<CAPTION>
                                     Three Months Ended
(unaudited)                                September 30,           Increase
(in thousands of dollars)              1998         1997          (Decrease)            Change
                                    -------      -------          ---------             ------
<S>                                 <C>          <C>              <C>                   <C>
Interest  income(1)................ $  4,104     $   3,919        $      185               4.7 %
Interest expense...................    1,571         1,796              (225)            (12.5)%
                                    --------     ---------        ----------

Net interest income................ $  2,533     $   2,123        $      410              19.3 %
                                    ========     =========        ==========

Average interest earning assets.... $161,337     $ 161,333                 4               *
Average interest bearing
  liabilities                       $ 118,265    $ 137,886           (19,621)            (14.2)%

Average yields earned (2)..........    10.18%        9.72%                .46
Average rates paid (2).............     5.31%        5.21%                .10
Net interest spread (2)............     4.87%        4.51%                .36
Net interest margin (2)............     6.28%        5.26%               1.02

     (1) Interest earned on nontaxable securities has been computed on a 34% tax
equivalent basis.

     (2) Ratios for the three months ended September 30, 1998 and 1997 have been
annualized.

     *less than one percent

</TABLE>

<PAGE>



   Nine Months Ended September 30,1998 and 1997

     Total interest  earnings assets averaged $163.6 million for the nine months
ended  September  30,  1998,  compared to $150.9  million for the  corresponding
period in 1997. The increase in average  earning assets was  attributable  to an
increase in cash due from banks after the  company's  IPO in March of 1998.  The
average yield on interest  earning assets remained stable at 9.84% for the first
nine months of 1998 and for the corresponding period in 1997.

     Interest  bearing  liabilities  averaged  $125.6 million and $130.2 million
during the first nine months of 1998 and 1997, respectively. The average cost of
these liabilities decreased in the first nine months of 1998 to 5.26% from 5.36%
in the first nine  months of 1997.  The  Company  has  replaced  certain  higher
interest rate  certificates of deposit with lower cost core deposits as a result
of the branch acquisitions in July 1997.


Analysis of Net Interest Income

     The following  table  presents  information  regarding  yields and interest
earning  assets,  expense on  interest  bearing  liabilities,  and net yields on
interest earning assets for periods indicated on a tax equivalent basis.

<TABLE>
<CAPTION>
                                      Nine Months Ended
(unaudited)                                 September 30,          Increase
(in thousands of dollars)              1998         1997          (Decrease)            Change
                                    -------      -------          ---------             ------
<S>                                 <C>          <C>              <C>                     <C>
Interest  income(1)................ $ 12,075     $  11,135        $      940               8.4 %
Interest expense...................    4,954         5,233              (279)             (5.3)%
                                    --------     ---------        ----------
Net interest income................ $  7,121     $   5,902        $    1,219              20.6 %
                                    ========     =========        ==========

Average interest earning assets.... $163,630     $ 150,940             12,690              8.4 %
Average interest bearing
liabilities........................ $ 125,623    $ 130,229             (4,606)            (3.5) %

Average yields earned (2)..........     9.84%        9.84%               -
Average rates paid (2).............     5.26%        5.36%               (.10)
Net interest spread (2)............     4.58%        4.48%                .10
Net interest margin (2)............     5.80%        5.21%                .59

     (1) Interest earned on nontaxable securities has been computed on a 34% tax
equivalent basis.

     (2) Ratios for the nine months ended  September 30, 1998 and 1997 have been
annualized.

</TABLE>

Market Risk

   Interest  rate risk and credit  risks are the most  significant  market risks
impacting the Company's performance. The Company relies on loan reviews, prudent
loan  underwriting  standards  and an  adequate  allowance  for loan  losses  to
mitigate  credit risk.  Interest rate risk is managed  through the monitoring of
the Company's gap position and  sensitivity  to interest rate risk by subjecting
the Company's balance sheet to hypothetical  interest rate shocks. The Company's
primary  objective  in managing  interest  rate risk is to minimize  the adverse
impact of changes in interest  rates on the  Company's  net interest  income and
capital, while structuring the Company's  asset/liability position to obtain the
maximum yield-cost spread on that structure. Management has assessed these risks
and feels that there has been no material change since December 31, 1997.



<PAGE>


Provision for Loan Losses

   Three months ended September 30, 1998 and 1997

     The amount of the  allowance for loan losses is analyzed by management on a
regular  basis to ensure that it is  sufficient  to cover  potential  and future
losses.  When a provision  for loan losses is  recorded,  the amount is based on
past charge-off  experience,  a careful analysis of the current  portfolio,  the
level of nonperforming and impaired loans,  evaluation of future economic trends
in the Company's  market area,  and other relevant  factors  related to the loan
portfolio.

   The  Company's  provision  for loan losses was $111,000 for each of the three
month periods ended September 30, 1998 and 1997,  respectively.  Net charge-offs
for the three months ended  September  30, 1998 were  $104,000,  compared to net
charge-offs of $78,000 for the same period in 1997.  Nonaccrual  loans were $2.7
million at September  30, 1998 and $1.4 million at  September  30, 1997.  In the
third quarter of 1998  nonaccrual  loans  increased $1.2 million.  This increase
reflects  six  borrowers  with an  aggregate  balance  of  $950,000.  Management
currently anticipates no loss on five of these borrowers and is currently in the
process of evaluating  the remaining  relationships.  While loans on non-accrual
status have  increased,  management  feels that the allowance for loan losses is
adequate to absorb any  exposure.  Management  continues to closely  monitor the
loan quality and existing  relationships.  For a more detailed disclosure please
see Loans.

   Nine months ended September 30, 1998 and 1997

     Provisions for loan losses recorded for the nine months ended September 30,
1998  were  $243,000  as  compared  to  $300,000  at  September  30,  1997.  Net
charge-offs  were  $283,000  and  $210,000  at  September  30,  1998  and  1997,
respectively.  At  September  30, 1998 the loan loss  reserve was 1.47% of total
loans outstanding.

Non-Interest Income

   Three months ended September 30, 1998 and 1997

     Non-interest  income,  primarily  consisting of service charges and related
fees, was $239,000 for the three months ended September 30, 1998 and $219,000 in
the  corresponding  period in 1997. Other income increased 54.3% from $46,000 at
September 30, 1997 to $71,000 at September 30, 1998, as a result of the addition
of trust services to the bank in the second quarter of 1997.

   Nine months ended September 30, 1998 and 1997

     Total  non-interest  income increased to $734,000 for the first nine months
of 1998  compared to $534,000  during the same period in 1997.  The  increase in
non-interest  income  of  $200,000  is mainly a result  of a 22.7%  increase  in
service charge income after the addition of three branches in July 1997. Another
component of this  increase was the addition of trust  services  provided to the
Cowlitz County area.



<PAGE>


Non-Interest Expense

   Three months ended September 30, 1998 and 1997

     Non-interest  expense  consists  principally  of  employees'  salaries  and
benefits,  occupancy costs,  data processing and  communication  expenses,  FDIC
(Federal Deposit Insurance  Corporation)  insurance premium,  professional fees,
and other non-interest  expenses.  Non-interest expenses increased 14.9% to $1.7
million for the quarter  ended  September  30, 1998 compared to $1.5 million for
the quarter ended September 30, 1997, primarily due to increased staffing costs.

   Nine months ended September 30, 1998 and 1997

     For the nine months ended September 30, 1998 non-interest  expense was $5.0
million as compared to $3.8  million for the nine  months  ended  September  30,
1997.  Salaries and  benefits  expense of $2.8 for the first nine months of 1998
represents an increase of $712,000 from $2.1 million for the  comparable  period
in  1997.  At  September  30,  1998 the  Company  had 104  full-time  equivalent
employees compared to 86 at September 30, 1997. Other operating expenses of $1.6
million for the quarter  ending  September  30, 1998 was 27.7%  higher than $1.3
million for the same period in 1997.  This increase was due to  amortization  of
the intangible asset related to the branch acquisition in July of 1997.

     Net occupancy expenses consist of depreciation on premises,  lease costs of
buildings and equipment,  maintenance and repair expenses, utilities and related
expenses. The Company's net occupancy expense at September 30, 1998 was $655,000
or 25.7% higher than $521,000 at September  30, 1997.  The increase in occupancy
expense in 1998 was due principally to the addition of three branches  purchased
in the third quarter of 1997.

Income Taxes

     The  provision  for  income  taxes  amounts to  $876,000  and  $781,000  at
September  30,  1998  and  1997,  respectively.  The  provision  resulted  in an
effective tax rate of 34% for both periods reported.

Loan Losses and Recoveries

     At September 30, 1998  management  considered the allowance for loan losses
of  $2.0  million  sufficient  to  absorb  losses  on  loans  which  may  become
uncollectible  based on evaluations  by management.  The amount of the allowance
for loan losses is assessed by  management  on a regular basis to ensure that it
is  sufficient  to cover  probable  losses.  Specific  reserves are assigned for
sub-standard  assets from the  classified  asset  report and watch list and then
combined  with an  assessment  of the balance of the loan  portfolio  based upon
historical charge-off experience to arrive at a minimum,  midpoint,  and maximum
range of potential  loss in  evaluating  the adequacy of the  allowance for loan
losses.  The allowance  balance and amount of provision charged to operations is
based  primarily  on  management's  evaluation  of the  entire  portfolio.  This
analysis  includes  review of the following  factors:  the volume and mix of the
existing loan portfolio,  including volume and severity of  nonperforming  loans
and  adversely  classified  credits,  as well  as  analysis  of net  charge-offs
experienced on previously  classified  loans;  the extent to which loan renewals
and  extensions  are used to maintain loans on a current basis and the degree of
risk associated with such loans; the nature and value of the collateral securing
the loan; the trend in loan growth,  including any rapid increase in loan volume
within a relatively short period of time; general and local economic  conditions
affecting the  collectibility of the Company's loans; the relationship and trend
over the past several years of  recoveries  as a percentage  of previous  years'
charge-offs;  and available outside information of a comparable nature regarding
the loan portfolios of other banks, including peer group banks.



<PAGE>


     The  following  table shows the  Company's  loan loss  performance  for the
periods indicated:

<TABLE>
<CAPTION>
                                                                       Nine months      Year
                                                                       Ending           Ended
(unaudited)                                                            September 30,  December 31,
(in thousands of dollars)                                              1998           1997
                                                                       ---------      ----------
<S>                                                                    <C>            <C> 
Loans outstanding at end of period................................     $ 134,227      $ 131,963
Average loans outstanding during the period.......................     $ 130,614      $ 130,362

Allowance for loan losses, beginning of period....................     $   1,970      $   1,894
Loans charged off:
   Commercial.....................................................           254            186
   Real Estate....................................................             -              3
   Consumer.......................................................            11             23
   Credit Cards...................................................            40            112
                                                                       ---------      ---------
     Total loans charged-off......................................           305            324
                                                                       ---------      ---------

Recoveries:
   Commercial.....................................................             9              5
   Real Estate....................................................             -              -
   Consumer.......................................................             3             20
   Credit Cards...................................................            10              -
                                                                       ---------      ---------
     Total recoveries.............................................            22             25
                                                                       ---------      ---------
Provision for loan losses.........................................           243            375
Adjustment incident to acquisition................................            45              -
                                                                       ---------      ---------

Allowance for loan losses, end of period..........................     $   1,975      $   1,970
                                                                       =========      =========

Ratio of net loans charged-off to average loans outstanding.......          .22%            .23%
Ratio of allowance for loan losses to loans at end of period......         1.47%           1.49%

</TABLE>

   Loans

   Total loans  outstanding were $134.2 million and $132.0 at September 30, 1998
and December 31, 1997,  respectively.  Loan  commitments  were $18.8  million at
September 30, 1998 and $16.6 million at December 31, 1997.

The following  table presents the composition of the Company's loan portfolio at
the dates indicated:

<TABLE>
<CAPTION>

(unaudited)                                            September 30, 1998                 December 31, 1997
(in thousands of dollars)                          Amount         Percentage           Amount      Percentage
                                                   -------------------------           ----------------------
<S>                                                <C>                  <C>            <C>                <C>
Commercial .................................       $  105,095            78.0%         $  93,829          70.8%
Real estate construction....................            2,841             2.1              3,495           2.6
Real estate commercial......................            5,916             4.4              5,475           4.1
Real estate mortgage........................           15,294            11.3             24,167          18.2
Consumer and other..........................            5,488             4.1              5,571           4.2
Contracts purchased.........................              197              .1                 81            .1
                                                   ----------     -----------              -----      ---------
                                                      134,831           100.0%           132,618         100.0%
                                                                  ===========                         =========
Deferred loan fees..........................             (604)                              (655)
                                                   ----------                          ---------
     Total loans............................          134,227                            131,963
Allowance for loan losses...................           (1,975)                            (1,970)
                                                   ----------                          ---------
     Total loans, net.......................         $132,252                          $ 129,993
                                                   ==========                          =========

</TABLE>

<PAGE>


     During its normal loan review  procedures,  the Company considers a loan to
be impaired  when it is probable  that the Company will be unable to collect all
amounts due according to the contractual terms of the loan agreement.  A loan is
not  considered  to be impaired  during a period of minimal  delay (less than 90
days).  The  Company  measures  impaired  loans  based on the  present  value of
expected future cash flows discounted at the loan's effective  interest rate, or
as a practical  expedient,  at the loan's  observable  market  price or the fair
market value of the  collateral  if the loan is collateral  dependent.  Impaired
loans are charged to the  allowance  for loan losses  when  management  believes
after considering  economic and business  conditions,  collection  efforts,  and
collateral  position,  that the  borrowers'  financial  condition  is such  that
collection of the principal is not probable.

     Generally, no interest is accrued on loans when factors indicate collection
of the interest is doubtful or when the principal or interest payment becomes 90
days past due,  unless  collection of the principal and interest are anticipated
within a  reasonable  period of time and the loans  are well  secured.  For such
loans  previously  accrued but  uncollected  interest is charged against current
earnings,  and income is only recognized to the extent payments are subsequently
received and the  collection  of the  remaining  recorded  principal  balance is
considered probable.

     The Company  manages the general  risks  inherent in the loan  portfolio by
following loan policies and underwriting practices designed to result in prudent
lending  activities.  The following table presents  information  with respect to
nonperforming assets:

<TABLE>
<CAPTION>

(unaudited)                                                            September 30,    December 31,
(in thousands of dollars)                                              1998             1997
                                                                       ---------        ---------
<S>                                                                    <C>               <C>
Loans on nonaccrual status                                                 2,692            1,897
Loans past due greater than 90 days but not on nonaccrual status              16              432
Other real estate owned                                                      600               88
Troubled debt restructuring                                                    -                -
                                                                       ---------        ---------
   Total nonperforming assets                                              3,308            2,417
                                                                       =========        =========
Percentage of nonperforming assets to total assets                         1.90%             1.39%

</TABLE>

   At September 30, 1998 nonperforming assets were $3.3 million or 1.9% of total
assets.  Non-accrual  loans were $2.7 million at September 30, 1998.  Management
estimates  exposure of $294,000 on non-accrual loans at September 30, 1998. This
estimated exposure has been considered in management's  analysis of the adequacy
for loan losses.

Liquidity

   Liquidity  represents the ability to meet deposit  withdrawals  and fund loan
demand,   while   retaining  the  flexibility  to  take  advantage  of  business
opportunities.  The Company's  primary sources of funds are customers  deposits,
loan payments,  sales of assets, advances from the FHLB (Federal Home Loan Bank)
and the use of the federal funds market. As of September 30, 1998, approximately
$2.0 million of the securities portfolio matures within one year.

   On March 12, 1998, the Company completed an initial public offering issuing a
total  of  1,380,000  shares  of  common  stock  at  $12.00  per  share.   After
underwriting  discounts of $1.2 million and other offering  expenses of $472,000
net proceeds were $14.9 million. Of these proceeds $1.1 million has been used to
repay  long-term  debt and a  subordinated  note. On August 31, 1998 the Company
acquired Business Finance Corporation of Bellevue,  Washington.  The acquisition
was accounted for using the purchase method,  including issuance of common stock
with a value of $465,000.  A cash payment was made totaling $1.7 million with an
adjustment  to be made  based on  final  determination  of  BFC's  shareholder's
equity.  A future  contingent  issuance of common stock valued at  approximately
$500,000  will be issued if BFC achieves  earnings  targets for the twelve month
period  following  the  acquisition.  As  part  of the  acquisition  transaction
goodwill  was  recorded  in the  amount of $1.4  million  to be  amortized  on a
straight line basis over a 15 year period.

<PAGE>


   Historically  the  Company  has  utilized  borrowings  from  the  FHLB  as an
important  source of funding  for its growth.  The  Company  has an  established
borrowing  line with the FHLB  that  permits  it to borrow up to 25% of  assets.
Advances  from the FHLB  have  terms  ranging  from 1  through  15 years  and at
September 30, 1998 bear interest at rates from 4.48% to 8.62%.  At September 30,
1998,  $21.9 million in advances were  outstanding from the FHLB and the Company
had  additional  borrowing  capacity  for cash  advances of $20.8  million.  The
Company may increase its percentage of borrowings from the FHLB in the future if
circumstances warrant.

Capital

   The  Company is  required  to  maintain  minimum  amounts of capital to "risk
weighted" assets, as defined by banking  regulators.  The Company is required to
have  Tier 1 and  Total  Capital  ratios  of 4.0%  and  8.0%,  respectively.  At
September 30, 1998, the Company's  ratios were 21.74% and 22.99%,  respectively.
At December 31, 1997, the company's  ratios were 9.6% and 11.34%,  respectively.
The ratio of  shareholders'  equity to  average  assets  was 15.56% and 6.94% at
September  30, 1998 and  December  31, 1997,  respectively.  September  30, 1998
ratios are  significantly  higher  than  those at  December  31,1997  due to the
initial  public  offering on March 12, 1998 in which $14.9 million was raised in
additional capital.

Year 2000

   This section contains  forward-looking  statements that have been prepared on
the basis of the Company's best judgments and currently  available  information.
These forward-looking statements are inherently subject to significant business,
third-party and regulatory  uncertainties and  contingencies,  many of which are
beyond the control of the Company. In addition, these forward-looking statements
are based on the Company's current  assessments and remediation plans, which are
based on  certain  representations  of third  party  service  providers  and are
subject to change.  Accordingly,  there can be no assurance  that the  Company's
results of operations  will not be adversely  affected by difficulties or delays
in the Company's or third  parties'  Year 2000  readiness  efforts.  See "Risks"
below for a discussion of factors that may cause such forward-looking statements
to differ from actual results.

   The  Company  has an active Y2K plan and  committee  addressing  all  systems
affected by the  millennium  issue.  The plan  includes  five phases  Awareness,
Assessment, Renovation, Validation, and Implementation.

Awareness

   The company's  senior  management  participates on the committee as well as a
representative  from each critical  area of the bank.  The board of directors is
updated on the progress of the plan on a monthly basis.  The awareness phase has
been  completed  but  will  continue  to be an on going  effort  in  regards  to
educating  customers  and keeping  abreast of all new Y2K  issues.  The bank has
implemented several awareness programs for customers and will be sponsoring Year
2000 seminars for its larger business customers.

Assessment

   Assessment   of  the   Company's   systems   has  been   completed   and  all
hardware/software as well as non-hardware/software systems have been identified.
The  committee  has  developed  a list of  products  and  systems  that could be
effected  by the Year 2000 date  change.  All vendors  and  suppliers  have been
contacted and have been individually  assessed for both their criticality to the
operation  of the  company  and if they  are  satisfactory  in their  Year  2000
efforts.

Renovation and Validation

   The Company is  currently  in the  renovation  and  validation  phases of the
project.  All mission  critical  systems will be validated for Y2K compliance by
December 31, 1998 with minor systems  completed by the end of the second quarter
of 1999.



<PAGE>


Implementation

   Any system found to be not in  compliance  with the Year 2000 date change has
been brought to the  attention  of senior  management  and is being  upgraded or
replaced.  The systems that have been  identified  are included in the Company's
Year 2000 budget. A budget has been approved and the additional costs to address
the Year 2000 issues at this time are estimated to be $114,000.


Contingency plan

   A  contingency  plan is being  established  that would be carried  out in the
event that the preventative measures put in place do not prove successful.  This
plan addresses business  operations to be carried out assuming the telephone and
electrical  systems are in working order. The contingency plan will be completed
by December 31, 1998 and will be updated throughout 1999.

Risks

   Based on its current  assessments and remediation plans, the Company does not
expect that it will suffer any material  disruption  of its business as a result
of Year 2000  issues.  Although  the  Company  has no reason to  believe  that a
material disruption will occur, the most likely worst case scenario would result
from a Y2K failure in the power supply,  voice and data transmission  systems or
the federal  government.  If such a failure  were to occur,  the  Company  would
implement its contingency  plan. In such event, it is likely that there would be
temporary  disruption  of  customer  service  and  customer   inconvenience  and
additional  costs from the  implementation  of the  contingency  plan. It is not
possible to  quantify  those costs at the  present  time.  Although  the Company
believes its contingency plan when completed will  satisfactorily  address these
issues,  there can be no  assurance  that the  Company's  contingency  plan will
function as  anticipated  or that the results of  operations of the Company will
not be adversely affected in the event of a prolonged disruption of service.


<PAGE>



                           Part II. Other Information

Item 2

Changes in Securities and Use of Proceeds


   On March 12, 1998, the Company completed an initial public offering issuing a
total  of  1,380,000  shares  of  common  stock  at  $12.00  per  share.   After
underwriting  discounts of $1.2 million and other offering  expenses of $472,000
net proceeds were $14.9 million. Of these proceeds $1.1 million has been used to
repay long-term debt and a subordinated  note. The remainder of the proceeds has
been  invested in an interest  bearing  account at FHLB,  Seattle.  The managing
underwriters were Black & Company, Inc. and Pacific Crest Securities, Inc.

   Effective  August 31, 1998,  as a result of the  purchase,  Business  Finance
Corporation  (BFC) of Bellevue,  Washington  became a wholly owned subsidiary of
the Company.  BFC provides factoring,  leasing, and inventory financing services
in Washington, Oregon, California, and Nevada. The acquisition was accounted for
using the purchase method and included an initial  issuance of common stock with
a value of $465,000.  A cash payment was made in the amount of $1.7 million with
an adjustment  to be made based on final  determination  of BFC's  shareholder's
equity.  A future  contingent  issuance of common stock valued at  approximately
$500,000 will be issued if BFC achieves  earnings  targets for the  twelve-month
period following the acquisition.





























<PAGE>






                                   SIGNATURES

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                             Cowlitz Bancorporation
                             (Registrant)



Dated: November 12, 1998     /s/ Charles W. Jarrett
                             Charles W. Jarrett
                             President and Chief Operating Officer


Dated: November 12, 1998     /s/ Donna P. Gardner
                             Donna P. Gardner
                             Vice-President/Secretary-Treasurer