|SECURITIES AND EXCHANGE COMMISSION                                                   
|-------------------------------------------------------------------------------------
|Washington, D.C.20549                                                                
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|FORM 10-Q                                                                            
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|[X]                                                                                  
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|[   ]                                                                                
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|Commission File Number: 0-26993                                                      
|                                                                                     
|EVERTRUST FINANCIAL GROUP, INC.(Exact name of registrant as specified in its charter)
|                                                                                     

|Washington(State or other jurisdiction of incorporation or organization)                                     | 91-1613658(I.R.S. Employer I.D. Number)
|------------------------------------------------------------------------------------------------------------ | ---------------------------------------
|                                                                                                             |                                        
|                                                                                                            
|2707 Colby Avenue, Suite 600, Everett, Washington 98201(Address of principal executive offices and zip code)
|                                                                                                             |                                        
|(425) 258-3645(Registrant's telephone number, including area code)                                          
|                                                                                                             |                                        
|NA(Former name, former address and former fiscal year, if changed since last report)                        
|                                                                                                             |                                        
|                                                                                                             |                                        

| | Indicate by check 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 registrantwas required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                   
| | (1)   Yes X        No                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                   
| | Indicate by check mark whether the registrant is an
accelerated filer (as defined in Exchange Act Rule 12b-2).                                                                                                                                                                                                                                    
| | Yes X        No                                                                                                                                                                                                                                                                                                                                   

**APPLICABLE ONLY TO CORPORATE ISSUERS**

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

| | Title of class:**Common stock, no par value** | As of August 1, 20034,841,029
| | --------------------------------------------- | -----------------------------

<PAGE>

**EVERTRUST FINANCIAL GROUP, INC.
Table of Contents**

|           |    |                                                                                                                                              | Page
|---------- | -- | -------------------------------------------------------------------------------------------------------------------------------------------- | ----
|PART I     | -  | FINANCIAL INFORMATION                                                                                                                        |     
|           |    |                                                                                                                                             
|ITEM 1     | -  | Financial Statements. The Consolidated Financial Statements of EverTrust
Financial Group, Inc. filed as a part of the report are as follows: |     
|           |    |                                                                                                                                              |     
|           |    | Consolidated Statements of Financial Condition as of June 30, 2003
and March 31, 2003                                                        | 1   
|           |    |                                                                                                                                              |     
|           |    | Consolidated Statements of Operations for the three months ended

June 30, 2003 and 2002                                                     | 2   
|           |    |                                                                                                                                              |     
|           |    | Consolidated Statements of Comprehensive Income for the three months
ended June 30, 2003 and 2002                                            | 3   
|           |    |                                                                                                                                              |     
|           |    | Consolidated Statements of Changes in Equity for the twelve months ended March
31, 2003 and three months ended June 30, 2003                 | 4   
|           |    |                                                                                                                                              |     
|           |    | Consolidated Statements of Cash Flows for the three months
ended June 30, 2003 and 2002                                                      | 5   
|           |    |                                                                                                                                              |     
|           |    | Notes to Consolidated Financial Statements                                                                                                   | 6   
|           |    |                                                                                                                                              |     
|ITEM 2     | -  | Management's Discussion and Analysis of Financial Condition and Results
of Operations                                                        |     
|           |    |                                                                                                                                              |     
|           |    | General                                                                                                                                      | 12  
|           |    |                                                                                                                                              |     
|           |    | Selected Financial Ratios                                                                                                                    | 12  
|           |    |                                                                                                                                              |     
|           |    | Comparison of Financial Condition at June 30, and March 31, 2003                                                                             | 13  
|           |    |                                                                                                                                              |     
|           |    | Comparison of Operating Results for the three months ended June 30,
2003 and 2002                                                            | 15  
|           |    |                                                                                                                                              |     
|           |    | Liquidity and Capital Resources                                                                                                              | 18  
|           |    |                                                                                                                                              |     
|           |    | Capital Requirements                                                                                                                         | 18  
|           |    |                                                                                                                                              |     
|ITEM 3     | -  | Quantitative and Qualitative Disclosures About Market Risk and
Asset and Liability Management and Market Risk                                | 19  
|           |    |                                                                                                                                              |     
|ITEM 4     | -  | Controls and Procedures                                                                                                                      | 19  
|           |    |                                                                                                                                              |     
|PART II    | -  | OTHER INFORMATION                                                                                                                            |     
|           |    |                                                                                                                                              |     
|           |    | Item 1.  Legal Proceedings                                                                                                                   | 19  
|           |    |                                                                                                                                              |     
|           |    | Item 2.  Changes in Securities                                                                                                               | 19  
|           |    |                                                                                                                                              |     
|           |    | Item 3.  Defaults upon Senior Securities                                                                                                     | 20  
|           |    |                                                                                                                                              |     
|           |    | Item 4.  Submission of Matters to a Vote of Stockholders                                                                                     | 20  
|           |    |                                                                                                                                              |     
|           |    | Item 5.  Other Information                                                                                                                   | 20  
|           |    |                                                                                                                                              |     
|           |    | Item 6.  Exhibits and Reports on Form 8-K                                                                                                    | 20  
|           |    |                                                                                                                                              |     
|SIGNATURES | 21

i

<PAGE>

**Part 1 - Financial Information****Item 1** - Financial Statements

EverTrust Financial Group, Inc.
Consolidated Statements of Financial Condition
June 30, 2003 and March 31, 2003
(Dollar amounts in thousands)

|                                                                     | June 30,    | March 31,
|-------------------------------------------------------------------- | ----------- | ---------
|                                                                     | 2003        | 2003     
|ASSETS                                                               | (Unaudited) |          
|                                                                     |             |          
|Cash and cash equivalents, including interest bearing deposits       |             |          
|of $42,602 and $27,415                                               | $ 52,608    | $ 37,259 
|Securities available for sale, amortized cost of $45,057 and $33,807 | 45,519      | 34,167   
|Securities held to maturity, fair value of $3,797 and $3,999         | 3,602       | 3,800    
|Federal Home Loan Bank stock, at cost                                | 6,417       | 6,334    
|Loans receivable, net of allowances of $9,086 and $8,979             | 586,855     | 600,200  
|Loans held for sale, fair value of $1,472 and $4,813                 | 1,465       | 4,755    
|Accrued interest receivable                                          | 3,229       | 3,280    
|Premises and equipment, net                                          | 8,771       | 9,074    
|Prepaid expenses and other assets                                    | 5,071       | 7,294    
|                                                                     |             |          
|Total Assets                                                         | $713,483    | $706,163 
|                                                                     |             |          
|LIABILITIES AND EQUITY                                               |             |          
|                                                                     |             |          
|LIABILITIES:                                                         |             |          
|Deposit accounts                                                     | $519,710    | $508,269 
|Federal Home Loan Bank advances and other borrowings                 | 96,321      | 100,984  
|Accounts payable and other liabilities                               | 4,004       | 5,215    
|                                                                     |             |          
|Total Liabilities                                                    | 620,035     | 614,468  
|                                                                     |             |          
|COMMITMENTS AND CONTINGENCIES                                        |             |          
|                                                                     |             |          
|EQUITY:                                                              |             |          
|Common stock - no par value, 49,000,000 shares authorized,           |             |          
|4,840,279 shares and 4,834,779 shares outstanding at                 |             |          
|June 30, 2003 and  March 31, 2003, respectively                      | 30,698      | 30,613   
|Employee Stock Ownership Plan (ESOP) debt                            | (396)       | (396)    
|Retained earnings                                                    | 63,926      | 62,542   
|Shares held in trust for stock-related                               |             |          
|compensation plans                                                   | (1,085)     | (1,301)  
|Accumulated other comprehensive income                               | 305         | 237      
|                                                                     |             |          
|Total Equity                                                         | 93,448      | 91,695   
|                                                                     |             |          
|Total Liabilities and Equity                                         | $713,483    | $706,163 

<PAGE>

EverTrust Financial Group, Inc.
Consolidated Statements of Operations
For the Three Months Ended June 30, 2003 and 2002
(Dollar amounts in thousands, except per share amounts)

|                                              |                                                        |                                                       | Three Months Ended June 30,
|--------------------------------------------- | ------------------------------------------------------ | ----------------------------------------------------- | ---------------------------
|                                              |                                                        |                                                       | 2003                       
|                                              |                                                        |                                                       | (Unaudited)                
|INTEREST INCOME:                              |                                                        |                                                      
|                                              | Loans receivable                                       | $     10,505                                          | $    10,810                
|                                              | Investment securities:                                 |                                                       |                            
|                                              |                                                        | Taxable interest income                               | 442                        
|                                              |                                                        | Tax-exempt interest income                            | 43                         
|                                              |                                                        | Dividend income                                       | 86                         
|                                              |                                                        | Total investment security income                      | 571                        
|                                              |                                                        | Total interest income                                 | 11,076                     
|INTEREST EXPENSE:                             |                                                        |                                                      
|                                              | Deposit accounts                                       | 3,097                                                 | 3,436                      
|                                              | Federal Home Loan Bank advances
 
and other borrowings | 1,284                                                 | 1,516                      
|                                              |                                                        | Total interest expense                                | 4,381                      
|                                              |                                                        | Net interest income                                   | 6,695                      
|PROVISION FOR LOAN LOSSES                     | 175                                                    | 190                                                  
|                                              |                                                        | Net interest income after provision for
 
loan losses | 6,520                      
|NONINTEREST INCOME:                           |                                                        |                                                      
|                                              | Loan service fees                                      | 695                                                   | 491                        
|                                              | Gain on sale of securities                             | 2                                                     | -                          
|                                              | Gain on sale of loans                                  | 301                                                   | 137                        
|                                              | Other, net                                             | 646                                                   | 496                        
|                                              |                                                        | Total noninterest income                              | 1,644                      
|NONINTEREST EXPENSES:                         |                                                        |                                                      
|                                              | Salaries and employee benefits                         | 3,152                                                 | 3,021                      
|                                              | Occupancy and equipment                                | 710                                                   | 804                        
|                                              | Information processing costs                           | 376                                                   | 357                        
|                                              | Other, net                                             | 967                                                   | 1,230                      
|                                              |                                                        | Total noninterest expenses                            | 5,205                      
|                                              |                                                        | Earnings before federal income taxes                  | 2,959                      
|FEDERAL INCOME TAXES                          | 994                                                    | 643                                                  
|NET INCOME                                    | $       1,965                                          | $      1,631                                         
|                                              |                                                        |                                                       |                            
|Net income per common share - basic           | $         0.42                                         | $        0.34                                        
|Net income per common share - diluted         | $         0.39                                         | $        0.32                                        
|                                              |                                                        |                                                       |                            
|Weighted average shares outstanding - basic   | 4,660,447                                              | 4,748,686                                            
|Weighted average shares outstanding - diluted | 4,999,107                                              | 5,031,177                                            
|                                              |                                                        |                                                       |                            
|Dividends paid per share                      | $       0.120                                          | $       0.115                                        

2

<PAGE>

EverTrust Financial Group, Inc.
Consolidated Statements of Comprehensive Income (In thousands)
For the Three Months Ended June 30, 2003 and 2002

|                                                 |                                      |                                                                                                  |      |     
|------------------------------------------------ | ------------------------------------ | ------------------------------------------------------------------------------------------------ | ---- | ----
|                                                 |                                      |                                                                                                  | 2002 | 2001
|                                                 |                                      |                                                                                                  |      |     
|NET INCOME                                       | $   1,965                            | $   1,631                                                                                       
|OTHER COMPREHENSIVE INCOME, net of income taxes: |                                      |                                                                                                 
|                                                 | Gross unrealized gain on securities: |                                                                                                  |     
|                                                 |                                      | Unrealized holding gain during the period,
 
net of deferred income tax expense
 
of $36 and $66 | 69   | 131 
|                                                 |                                      | Less adjustment of gains (loss) included in net income,
 
net of income tax of $(-) and $(-)     | (1)  | -   
|                                                 |                                      | Other comprehensive income                                                                       | 68   | 131 
|                                                 |                                      |                                                                                                  |      |     
|COMPREHENSIVE INCOME                             | $   2,033                            | $   1,762                                                                                       
|                                                 |                                      |                                                                                                  |      |     
|                                                 |                                      |                                                                                                  |      |     

<PAGE>

EverTrust Financial Group, Inc.
Consolidated Statements of Changes in Equity
For the Twelve Months Ended March 31, 2003 and Three Months Ended June 30, 2003
(Dollar amounts in thousands, Unaudited)

|                                         | Common Stock | Debt related | Retained   | Shares heldin trust forstock-relatedcompensation | Accumulatedothercomprehensive |              
|---------------------------------------- | ------------ | ------------ | ---------- | ------------------------------------------------ | ----------------------------- | -------------
|                                         | Shares       | Amount       | to ESOP    | earnings                                         | plans                         | income (loss)
|                                         |              |              |            |                                                  |                               |              
|BALANCE, April 1, 2002                   | 5,170,569    | $    37,390  | $   (792)  | $   58,019                                       | $  (2,167)                    | $    374     
|                                         |              |              |            |                                                  |                               |              
|Common stock repurchased                 | (375,493)    | (7,664)      |            |                                                  |                               |              
|Common stock options exercised           | 39,703       | 479          |            |                                                  |                               |              
|Tax benefit from stock options exercised |              | 143          |            |                                                  |                               |              
|Repayment of ESOP debt                   |              |              | 396        |                                                  |                               |              
|ESOP activity - Change in value of       |              |              |            |                                                  |                               |              
|shares committed to be released          |              | 265          |            |                                                  |                               |              
|Amortization of compensation related to  |              |              |            |                                                  |                               |              
|Management Recognition Plan (MRP)        |              |              |            |                                                  | 866                           |              
|Net income                               |              |              |            | 6,841                                            |                               |              
|Dividends paid                           |              |              |            | (2,318)                                          |                               |              
|Other comprehensive income, net          |              |              |            |                                                  |                               |              
|of  income taxes                         |              |              |            |                                                  |                               | (137)        
|BALANCE, March 31, 2003                  | 4,834,779    | $     30,613 | $    (396) | $    62,542                                      | $ (1,301)                     | $        237 
|                                         |              |              |            |                                                  |                               |              
|Common stock options exercised           | 5,500        | 85           |            |                                                  |                               |              
|Amortization of compensation related to  |              |              |            |                                                  |                               |              
|Management Recognition Plan (MRP)        |              |              |            |                                                  | 216                           |              
|Net income                               |              |              |            | 1,965                                            |                               |              
|Dividends paid                           |              |              |            | (581)                                            |                               |              
|Other comprehensive income, net          |              |              |            |                                                  |                               |              
|of income taxes                          |              |              |            |                                                  |                               | 68           
|BALANCE, June 30, 2003                   | 4,840,279    | $    30,698  | $    (396) | $   63,926                                       | $   (1,085)                   | $        305 

4

<PAGE>

EverTrust Financial Group, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (In thousands)
For the Three Months Ended June 30, 2003 and 2002

|                                                          | 2003      | 2002         
|--------------------------------------------------------- | --------- | -------------
|OPERATING ACTIVITIES:                                     |           |              
|Net income                                                | $  1,965  | $ 1,631      
|Adjustments to reconcile net income to net cash          
|provided (used) by operating activities:                  |          
|Depreciation and amortization of premises and equipment   | 407       | 449          
|Dividends on Federal Home Loan Bank stock and            
|accretion of investment security discounts                | (253)     | (176)        
|Gain on sale of premises and equipment                    | -         | (7)          
|Amortization of investment security premiums              | 80        | 10           
|Loss on limited partnership                               | -         | 27           
|Provision for losses on loans                             | 175       | 190          
|Amortization of deferred loan fees and costs              | (659)     | (522)        
|Loan fees deferred                                        | 509       | 335          
|Proceeds from sale of loans                               | 14,343    | 19,433       
|Loans originated for sale                                 | (11,053)  | (18,898)     
|Deferred taxes                                            | -         | 109          
|Amortization of compensation related to MRP               | 216       | 216          
|Changes in operating assets and liabilities:             
|Accrued interest receivable                               | 51        | (82)         
|Prepaid expenses and other assets                         | 2,355     | 296          
|Accounts payable and other liabilities                    | (1,211)   | (80)         
|                                                          |           |              
|Net cash provided by operating activities                 | 6,925     | 2,931        
|                                                          |           |              
|INVESTING ACTIVITIES:                                     |           |              
|Proceeds from maturities of securities available for sale | 3,298     | 3,270        
|Proceeds from maturities of securities held to maturity   | 197       | 165          
|Proceeds from sale of securities available for sale       | 1,613     | 585          
|Purchases of securities available for sale                | (16,070)  | (2,750)      
|Loan principal payments                                   | 109,242   | 56,088       
|Loans originated or acquired                              | (95,922)  | (51,555)     
|Proceeds from sales of reaquired assets and OREO          | -         | 417          
|Investment in limited partnership                         | (112)     | -            
|Net additions to premises and equipment                   | (104)     | (358)        
|                                                          |           |              
|Net cash used by investing activities                     | 2,142     | 5,782        
|                                                          |           |              
|FINANCING ACTIVITIES:                                     |           |              
|Net increase in deposit accounts                          | 11,441    | 5,181        
|Proceeds from stock options exercised                     | 85        | -            
|Repurchase shares of common stock                         | -         | (2,597)      
|Dividends paid on common stock                            | (581)     | (582)        
|Repayment of other borrowings                             | -         | (650)        
|Proceeds from Federal Home Loan Bank advances             | 9,400     | 15,850       
|Repayments of Federal Home Loan Bank advances             | (14,063)  | (19,563)     
|                                                          |           |              
|Net cash provided (used) by financing activities          | 6,282     | (2,361)      
|                                                          |           |              
|NET INCREASE (DECREASE) IN CASH AND                       |           |              
|CASH EQUIVALENTS                                          | 15,349    | 6,352        
|                                                          |           |              
|CASH AND CASH EQUIVALENTS:                                |           |              
|Beginning of period                                       | 37,259    | 19,166       
|                                                          |           |              
|End of period                                             | $ 52,608  | $ 25,518     
|                                                          |           |              
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW                     |           |              
|INFORMATION:                                              |           |              
|Cash paid during the
  period for:                        |           |              
|Interest on deposits                                      | $   3,103 | $   4,954    
|Federal income taxes                                      | $    100  | $         150
|Interest on borrowings                                    | $   1,317 | $   1,521    

5

<PAGE>



Note 1 - Basis of Presentation

The unaudited consolidated financial statements of EverTrust Financial Group, Inc. (EverTrust or the Company) and
its subsidiaries reflect all adjustments which are, in the opinion of management, necessary to present fairly the
statements of financial position and results of operations for the interim periods presented. All such adjustments are of
a normal recurring nature. The consolidated financial statements include EverTrust's wholly owned subsidiaries,
EverTrust Bank (EverTrust Bank or Bank) and Mutual Bancshares Capital Inc. (MB Cap). All significant intercompany
accounts and transactions have been eliminated in consolidation.

The balance sheet data as of March 31, 2003 was derived from audited financial statements, but does not include all
disclosures which have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission
(SEC) rules pertaining to the presentation of interim financial statements. The results of operations for the three months
ended June 30, 2003  are not necessarily indicative of the results which may be expected for the entire year. It is
suggested that these consolidated financial statements and notes are read in conjunction with the consolidated financial
statements and notes included in EverTrust's Form 10-K filed with the SEC on June 17, 2003.

Note 2 - Recent Events

In January 2003, the Company announced that it had reached a tentative agreement to shift the day-to-day operations
of MB Cap to a local venture capital firm. As a result of the agreement, the sole activity of MB Cap will be to hold its
limited partnership investment. The limited partnership will be managed by the former employees of MB Cap along with
an additional venture capitalist. The agreement has been  approved by the limited partners and is subject to approval by
regulatory authorities.

The investment in the Fund is recorded at fair value using the equity method, based on percentage of ownership held
in the Fund. Such amounts were $1.3 million at June 30, 2003 compared to $1.2 million at March 31, 2003.

Note 3 - Stock Repurchases

In January 2003, the Company announced an eighth repurchase plan of up to 490,000 shares, or 10%, of the Company's
outstanding common stock. The Company did not repurchase any shares during the quarter ended June 30, 2003,
leaving a balance of 398,750 shares to be repurchased under the current plan. The Company has now repurchased a total
of 4.2 million shares since its initial plan was approved in January 2000.

Note 4 - Earnings per share

Earnings per share (EPS) is computed using the weighted average number of common and diluted shares outstanding
during the period. Basic EPS is computed by dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that occurs
if securities or other contracts to issue common stock were exercised or converted into common stock. The only
reconciling items after the calculation of basic EPS are the inclusion of stock options and restricted stock awards, which
increase the shares outstanding in diluted EPS by 338,660 and 282,491 for the three months ended June 30, 2003 and
2002, respectively. The increase in diluted shares for  the three months ended June 30, 2003 compared to June 30, 2002,
is primarily the result of the increase in EverTrust's average stock price from $18.35 for the three months ended June
30, 2002, to $24.40, for the three months ended June 30, 2003.

The Company applies Accounting Principles Board Opinion No. 25, *Accounting for Stock Issued to Employees*, and
related interpretations in accounting for it's stock options.  Accordingly, no compensation cost has been recognized
for

6

<PAGE>

the Plan since the exercise price of all options has been equal to the fair value of the Company's stock at the
grant date.  Had compensation costs for the Company's compensation plan been determined consistent with
Statement of Financial Accounting Standards (SFAS) No. 123, *Accounting for Stock-Based Compensation*, the
Company's net income attributable to common stock would have been reduced by $75,000 for the three months
ended June 30, 2003 and $79,000 for the three months ended June 30, 2002. Net income per share for both basic
and diluted would have decreased by $.01 for the three months ended June 30, 2003 and June 30, 2002.

Had compensation cost for the options been determined based on the fair value at the option grant dates, the
Company's net income and earnings per share would have been reduced to the pro forma amounts indicated below
(in thousands):

|                                          | For the Three Months Ended
|----------------------------------------- | --------------------------
|                                          | June 30, 2003             
|                                          |                           
|Net income as reported                    | $ 1,965                   
|Stock based employee compensation expense | (75)                      
|Pro forma net income                      | 1,890                     
|                                          |                           
|Basic earnings per share:                 |                           
|As reported                               | 0.42                      
|Pro forma                                 | 0.41                      
|                                          |                           
|Diluted earnings per share:               |                           
|As reported                               | 0.39                      
|Pro forma                                 | 0.38                      



7

<PAGE>

Note 5 - Lines of Business

Beginning April 1, 2003, the Company began managing the activities of EverTrust Bank under the following lines of
business: Business and private banking (including ETAM), the real estate lending group, and the retail banking division.
Prior to April 1, 2003 the Company reported EverTrust Bank under two lines of business, the Bank's retail operations
and the Bank's business banking group. Results for the three months ended June 30, 2002 remain in the previous format
as an accurate restatement is not possible.

The operating results of the holding company and MB Cap have been included in Other for both periods. Their results
are not significant when taken on an individual basis.

Financial highlights by lines of business are as follows (in thousands):

|                            | Three Months Ended June 30, 2003
|--------------------------- | --------------------------------
|                            | The Bank's                      
|                            | business                        
|                            | and private                     
|                            | banking group                   
|                            |                                 
|Condensed income statement: |                                 
|                            |                                 
|Net interest income after   |                                 
|provision for loan losses   | $     677                       
|Other income                | 401                             
|Other expense               | 1,072                           
|                            |                                 
|Income before income taxes  | 6                               
|Income taxes                | 2                               
|                            |                                 
|Net income                  | $         4                     
|                            |                                 
|Total assets                | $62,196                         

|                            | Three Months Ended June 30, 2002
|--------------------------- | --------------------------------
|                            |                                 
|                            | The Bank's                      
|                            | retail                          
|                            | division                        
|                            |                                 
|Condensed income statement: |                                 
|                            |                                 
|Net interest income after   |                                 
|provision for loan losses   | $   5,990                       
|Other income                | 1,035                           
|Other expense               | 4,009                           
|                            |                                 
|Income before income taxes  | 3,016                           
|Income taxes                | 856                             
|                            |                                 
|Net income                  | $   2,160                       
|                            |                                 
|Total assets                | $612,701                        

8

<PAGE>

Note 6 -  Additional Information Regarding Investment Securities

The following table sets forth the composition of the Company's investment portfolio at the dates indicated (in
thousands):

|                       | June 30, 2003                      | March 31, 2003          
|---------------------- | ---------------------------------- | ------------------------
|                       | Amortized                          | Fair                    
|                       | Cost                               | Value                   
|                       |                                    |                         
|Available for sale:    |                                    |                         
|Investment securities: |                                    |                         
|                       | U.S. Government Agency obligations | $22,523                 
|                       | Corporate obligations              | -                       
|                       | Municipal obligations              | 2,346                   
|                       | Equity securities                  | 830                     
|                       | Certificates of deposit            | -                       
|                       | Mortgage-backed securities         | 19,358                  
|                       |                                    | Total available for sale
|                       |                                    |                         
|Held to Maturity:      |                                    |                         
|Investment securities: |                                    |                         
|                       | U.S. Government Agency obligations | $  1,002                
|                       | Corporate obligations              | -                       
|                       | Municipal obligations              | 2,207                   
|                       | Certificates of deposit            | -                       
|                       | Mortgage-backed securities         | 393                     
|                       |                                    | Total held to maturity  
|                       |                                    |                         
|                       | Total                              | $48,659                 

U.S.  Government Agency obligations increased $7.3 million at cost from $16.2 million at March 31, 2003 to $23.5
million at June 30, 2003. Mortgage-backed securities increased $5.3 million at cost from $14.4 million at March 31,
2003 to $19.8 million at June 30, 2003. The increase in both investments reflects the Company's desire to enhance the
investment portfolio with shorter term, lower risk securities. The Company will continue to look to invest excess cash
over the next several months in high quality investments.

At June 30, 2003 equity securities were comprised of, at cost, $620,000 ($504,000 fair value) in common stock of
publicly traded companies and $210,000 ($210,000 fair value) in money market mutual funds.

9

<PAGE>Note 7 - Additional Information Regarding Federal Home Loan Bank Advances and Other Borrowings

The following table sets forth maturity detail on EverTrust's Federal Home Loan Bank advances and other borrowings
(in thousands):

|                               | June 30, 2003 | March 31, 2003
|------------------------------ | ------------- | --------------
|                               |               |               
|Nonamortizing:                 |               |               
|Due within 1 year              | $ 19,900      | $ 19,400      
|After 1 year through 2 years   | 18,800        | 18,750        
|After 2 years through 3 years  | 16,950        | 17,900        
|After 3 years through 5 years  | 24,900        | 26,700        
|After 5 years through 10 years | 13,050        | 15,300        
|After 10 years                 | 2,100         | 2,300         
|Amortizing:                    |               |               
|After 10 years                 | 621           | 634           
|                               |               |               
|                               | $96,321       | $100,984      

At June 30, 2003, the Bank had $47.0 million available in unsecured lines of credit with commercial banks compared
to $47.0 million at March 31, 2003. At June 30, 2003 there were no advances on the lines of credit with commercial
banks. In addition, the Bank has a revolving line of credit with the FHLB of up to 35% of total assets or the Bank's
available collateral, whichever is less.

Note 8 - Recently Issued Accounting Standards

In May 2003, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting
Standards ("SFAS") No. 150, *"Accounting for Certain Financial Instruments with characteristics of both Liabilities
and Equity."*The statement establishes standards for classifying and measuring certain financial instruments that
embody obligations of the issuer and have characteristics of both liabilities and equity as liabilities. SFAS 150 is
effective for instruments entered into or modified after May 31, 2003. The adoption of SFAS No. 150 did not
materially impact the Company's consolidated results of operations, financial position, or cash flows.

In April 2003, the  FASB issued  SFAS No. 149, *"Amendment of Statement 133 on Derivative Instruments and Hedging Activities*." SFAS No. 149
amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities under SFAS No. 133. The new guidance amends SFAS No. 133 for decisions made
as part of the Derivatives Implementation Group ("DIG") process that effectively required amendments to SFAS No.
133, and decisions made in connection with other FASB projects dealing with financial instruments and in connection
with implementation issues raised in relation to the application of the definition of a derivative and characteristics of
a derivative that contains financing components. In addition, it clarifies when a derivative contains a financing
component that warrants special reporting in the statement of cash flows. SFAS No. 149 is effective for contracts
entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. The adoption
of SFAS No. 149 is not expected to have any impact on the Company's financial statements.

In January 2003, the FASB issued Financial Accounting Standards Board Interpretation ("FIN") No. 46, *Consolidation
of Certain Variable Interest Entities An Interpretation of ARB No. 5*1, to clarify when an entity should consolidate
another entity known as a Variable Interest Entity ("VIE"), more commonly referred to as a special purpose entity or
SPE. A VIE is an entity in which equity investors do not have characteristics of a controlling financial interest or do
not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support
from other parties, and may include many types of SPEs. FIN No. 46 requires that an entity shall consolidate a VIE if
that enterprise has a variable interest that will absorb a majority of the VIE's expected losses if they occur, receive a
majority of the VIE's expected residual returns if they occur, or both. FIN No. 46 is effective for newly created VIEs
beginning

10

<PAGE>

February 1, 2003, and for existing VIEs as of the third quarter of 2003. The adoption of FIN No. 46 did not
have a material effect on the Company's financial statements.

In December 2002, the FASB issued SFAS No. 148, *Accounting for Stock-Based Compensation Transition and
Disclosure.*SFAS No. 148 amends SFAS No. 123 to provide alternative methods of transition for a voluntary change
to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148
amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee compensation and the effect of the
method used on reported results. The provisions of SFAS No. 148 are effective for financial statements for fiscal years
and interim periods ending after December 15, 2002. The disclosure provisions of SFAS No. 148 have been adopted
by the Company (see Note 1). SFAS No. 148 did not require the Company to change t o the fair value based method
of accounting for stock-based compensation.

In November 2002, the FASB issued FIN No. 45, *Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others,*which requires the guarantor to recognize as a
liability the fair value of the obligation at the inception of the guarantee. The disclosure requirements in FIN No. 45 are
effective for financial statements of interim or annual periods ending after December 15, 2002. Management believes
that the Company has no material guarantees that are required to be disclosed in the financial statements. The
recognition provisions are to be applied on a prospective basis to guarantees issued after December 31, 2002. The
adoption of the recognition provisions of FIN No. 45 has not had a material impact on the Company's financial
statements.

In October 2002, the FASB issued SFAS No. 147, *Acquisitions of Certain Financial Institutions.*SFAS No. 147 allows
financial institutions meeting certain criteria to reclassify unidentifiable intangible asset balances to goodwill and cease
amortization. SFAS No. 147 is generally effective as of October 31, 2002. The adoption of SFAS No. 147 did not
materially impact the Company's financial statements .

In June 2002, the FASB issued SFAS No. 146, *Accounting for Costs Associated with Exit or Disposal Activitie*s. SFAS
No. 146 requires recording costs associated with exit or disposal activities when a liability has been incurred. Under
previous guidance, certain exit costs were accrued upon management's commitment to an exit plan, which is generally
before an actual liability has been incurred. SFAS No. 146 is effective for exit or disposal activities initiated after
December 31, 2002. The adoption of SFAS No. 146 has not had a material effect on the Company's financial
statements.

In April 2002, the FASB issued Statement No. 145, *Rescission of FASB Statements No. 4, 44, and 64, Amendment of
FASB Statement No. 13, and Technical Correctio*ns. SFAS No.145 eliminates extraordinary accounting treatment for
reporting gain or loss on debt extinguishment and amends other existing authoritative pronouncements to make various
technical corrections, clarify meanings, or describe their applicability under changed conditions. The provisions of SFAS
No. 145 related to the rescission of SFAS No. 4 are effective for fiscal years beginning after May 15, 2002. The
provisions related to SFAS No. 13 are effective for transactions occurring after May 15, 2002. All other provisions are
effective for financial statements issued on or after May 15, 2002. The adoption of SFAS No. 145 did not materially
impact the Company's financial statements.

In October 2001, the FASB issued SFAS No. 144, *Accounting for the Impairment or Disposal of Long-Lived Asset*s,
which supercedes SFAS No. 121, *Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed O*f. SFAS No. 144 retains the fundamental provisions of SFAS No. 121 but sets forth new criteria for asset
classification and broadens the scope of qualifying discontinued operations. SFAS No. 144 is effective for fiscal years
beginning after December 15, 2001. The Company adopted SFAS No. 144 on April 1, 2002. The adoption of SFAS No.
144 did not have a material impact on the Company's financial statements.

In August 2001, the FASB issued SFAS No. 143, *Accounting for Asset Retirement Obligation*s, which took effect for
fiscal years beginning after June 15, 2002. SFAS No. 143 establishes the initial and subsequent accounting for legal
obligations associated with the retirement of long-lived assets that result from the acquisition, construction,
development, and/or normal operation of a long-lived asset. The Company adopted SFAS No. 143 as of April 1, 2003.
The adoption of SFAS No. 143 did not expected to materially impact the Company's financial statements.

11

<PAGE>

In July 2001, the FASB issued SFAS No. 141, *Accounting for Business Combination*s, and SFAS No. 142, Accounting
for Goodwill and Other Intangible Assets, which were effective for the Company on April 1, 2002. SFAS No. 141
requires all business combinations initiated after June 30, 2001, to be accounted for using the purchase method. Under
SFAS No. 142, goodwill is no longer subject to amortization over its estimated useful life but instead is subject to an
impairment assessment at least annually. The Company has not engaged in any business combinations since the adoption of SFAS No. 141 and does not currently have any goodwill. The adoption of SFAS No. 141 and SFAS No. 142 have
not had any effect on the Company's financial statements.

**Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations**

General. EverTrust, a Washington corporation, is primarily engaged in the business of planning, directing and
coordinating the business of its wholly owned subsidiaries, EverTrust Bank and MB Cap. EverTrust Bank conducts
business through its 11 full service offices located throughout Snohomish County, Washington, and branch offices in
Seattle and Bellevue, King County, Washington. EverTrust Bank considers Snohomish County and King County in
Washington, as its primary market area for making loans and attracting deposits. On a limited basis, EverTrust Bank
also makes loans in other areas of the state. To a much lesser extent, EverTrust Bank has also made loans in Oregon,
Idaho, California, Nevada and Hawaii. Loans made in California, Nevada and Hawaii have generally been to local
borrowers of EverTrust Bank as an accommodation for financing second homes. The Bank's principal business is
attracting deposits from the general public and using those funds to originate commercial real estate loans as well as
construction loans, business loans and residential (including multi-family) mortgage loans. The
Bank also offers
investment management and limited trust services through its wholly owned subsidiary, EverTrust Asset Management
("ETAM").  At June 30, 2003, assets under management at ETAM totaled $129.0 million compared to $111.9 million
at March 31, 2003.

Selected Financial Ratios

The following table sets forth certain selected financial ratios for EverTrust.

|                                           | Three Months Ended June 30,
|------------------------------------------ | ---------------------------
|                                           | 2003                       
|                                           |                            
|SELECTED FINANCIAL RATIOS                  |                            
|                                           |                            
|Performance Ratios:                        |                            
|Return on average assets (1)               | 1.10%                      
|Return on average equity (2)               | 8.42                       
|Equity-to-assets ratio (3)                 | 13.09                      
|Interest rate spread (4)                   | 3.39                       
|Net interest margin (5)                    | 3.83                       
|Average interest-earning assets to average |                            
|interest-bearing liabilities               | 117.62                     
|Other operating expenses as a percent of   |                            
|average total assets                       | 2.92                       
|Efficiency ratio (6)                       | 62.25                      

______________

|(1) | Net earnings divided by average total assets.                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Net earnings divided by average equity.                                                                                                                            
|(3) | Average equity divided by average total assets.                                                                                                                    
|(4) | Difference between weighted average yield on interest-earning assets and weighted average rate on interest-bearing liabilities.                                    
|(5) | Net interest income as a percentage of average interest-bearing assets.                                                                                            
|(6) | Total other operating expenses divided by total net interest income (on a tax-equivalent basis) before
provision for loan losses plus total other operating income.

12

<PAGE>

**Comparison of Financial Condition at June 30, and March 31, 2003**

Total assets increased $7.3 million from $706.2 million at March 31, 2003 to
$713.5 million at June 30, 2003. Cash and cash equivalents increased $15.3
million from $37.3 million at March 31, 2003 to $52.6 million at June 30, 2003.
The increase in cash is primarily due to
loan repayments and will be used in the next several months to purchase
investments and to fund future growth in the loan portfolio.

The investment portfolio (including Federal Home Loan Bank stock) increased $11.2 million, or 25.4%, from $44.3
million at March 31, 2003 to $55.5 million at June 30, 2003. The increase was due to purchases of U.S. government
agency securities available for sale.

Loans receivable, including loans held for sale, decreased  $16.7 million, or 2.7%, from $605.0 million at March 31,
2003 to $588.3 million at June 30, 2003. Despite loan originations totaling $107.0 million, loan repayments,
participations  and sales was the primary reason for the decrease in the loan portfolio. Commercial real estate decreased
$20.4 million from $264.3 million at March 31, 2003 to $243.9 at June 30, 2003 due to loan repayments.  This decrease
was offset in part by a $9.7 million increase in the commercial construction portfolio from $33.6 million at March 31, 2003 to
$43.3 million at June 30, 2003.  Loan participations to other banks totaled $18.5 million for the three months ended June
30, 2003. Loans held for sale at June 30, 2003 were $1.5 million, compared to $4.8 million at March 31, 2003.

The following table provides additional detail on EverTrust's loans (in thousands):

|                                    | June 30, 2003 | March 31, 2003
|----------------------------------- | ------------- | --------------
|                                    |               |               
|                                    | Amount        | Percent       
|Commercial construction             | $   43,348    | 7.2%          
|Commercial real estate              | 243,850       | 40.6          
|Multifamily construction            | 9,613         | 1.6           
|Multifamily residential             | 162,547       | 27.1          
|Business loans                      | 35,997        | 6.0           
|One to four family construction and |               |               
|land development                    | 57,695        | 9.6           
|Consumer:                           |               |               
|Home equity and second mortgages    | 22,555        | 3.8           
|Credit cards                        | 735           | 0.1           
|Other installment loans             | 2,924         | 0.5           
|One to four family residential      | 21,068        | 3.5           
|                                    | 600,332       | 100.0%        
|Less:                               |               |               
|Deferred loan fees and other        | (4,391)       |               
|Reserve for loan losses             | (9,086)       |               
|                                    |               |               
|                                    | (13,477)      |               
|                                    |               |               
|Loans receivable, net               | $586,855      |               
|                                    |               |               
|Loans held for sale                 | $    1,465    |               

13

<PAGE>

At June 30, 2003 EverTrust had $500 in loans accounted for on a non-accrual basis compared to approximately $24,000
at March 31, 2003. The non-accrual loan balance at June 30, 2003 consists of one unsecured loan that may or may not
be collected on in the future. The following table provides a roll-forward of EverTrust's allowance for loan losses by
quarter beginning with the quarter ended June 30, 2002 (in thousands):

|                                 | Quarter ended
|-------------------------------- | -------------
|                                 | 06/30/03     
|                                 |              
|Allowance at beginning of period | $8,979       
|Provision for loan losses        | 175          
|Charge-offs                      | (73)         
|Recoveries                       | 5            
|Balance at end of period         | $9,086       

The following table sets forth certain asset quality ratios for EverTrust.

|                                                              | Three Months  
|------------------------------------------------------------- | --------------
|                                                              | Ended June 30,
|                                                              | 2003          
|Asset Quality Ratios:                                         |               
|Nonaccrual and 90 days or more past due loans as a            |               
|percent of total loans, net                                   | 0.04%         
|Nonperforming assets as a percent of total assets             | 0.03          
|Allowance for losses as a percent of gross loans receivable   | 1.52          
|Allowance for loan losses as a percent of nonperforming loans | 3980.83       
|Net charge-offs (recoveries) to average outstanding loans     | 0.01          

Total deposits of EverTrust increased by approximately $11.4 million, or 2.3%, from $508.3 million at March 31, 2003
to $519.7 million at June 30, 2003. The change is primarily the result of increases in transaction accounts of $8.8 million
from $87.8 million at March 31, 2003 to $91.6 million at June 30, 2003 and a $3.5 million increase in time deposits
accounts from $279.5 million at March 31, 2003 to $283.0 million at June 30, 2003. The increase in deposits from
March 31, 2003 to June 30, 2003 is generally attributable to an increased emphasis in attracting business deposits and
an increased customer preference for insured deposits.

14

<PAGE>

The following table sets forth the balances of deposits in the various types of accounts offered by EverTrust at the dates
indicated (dollars in thousands):

|                                | At June 30, 2003 | At March 31, 2003
|------------------------------- | ---------------- | -----------------
|                                | Amount           | %                
|                                |                  |                  
|Noninterest-bearing accounts    | $ 18,819         | 3.6%             
|Savings accounts                | 12,481           | 2.4              
|Checking accounts               | 72,823           | 14.0             
|Money market accounts           | 132,590          | 25.5             
|                                |                  |                  
|Time deposits by original term: |                  |                  
|One to 11 months                | 46,332           | 8.9              
|12 to 23 months                 | 121,879          | 23.5             
|24 to 35 months                 | 25,349           | 4.9              
|36 to 59 months                 | 22,488           | 4.3              
|60 months and beyond            | 66,949           | 12.9             
|                                |                  |                  
|                                | 282,997          | 54.5             
|                                |                  |                  
|                                | $519,710         | 100.0%           

Federal Home Loan Bank advances and other borrowings decreased $4.7 million from $101.0 million at March 31, 2003
to $96.3 million at June 30, 2003. The need for borrowings since March 31, 2003 has decreased due to an increase in
deposit balances and cash received from loan repayments.

Total equity increased approximately $1.7 million to $93.4 million at June 30, 2003 compared to $91.7 million at March
31, 2003. Earnings of $2.0 million for the three months ended June 30, 2003 were partially offset by cash dividends paid
of approximately $581,000.

**Comparison of Operating Results for the Three Months Ended June 30, 2003 and 2002**

General. Net income increased approximately $334,000 from $1.6 million for the three months ended June 30, 2002
to $2.0 million for the three months ended June 30, 2003. The increase in income is due primarily to a $520,000 increase
in noninterest income and a $571,000 decrease in interest expense, offset in part by a $628,000 decrease in interest
income.

Net Interest Income. Net interest income decreased .84% from $6.8 million for the three months ended June 30, 2002,
2001 to $6.7 million for the three months ended June 30, 2003. The change is due primarily to the lower yield on
interest-earning assets and the increased volume of lower-yielding investments.

Interest income decreased approximately $628,000 from $11.7 million for the three months ended June 30, 2002 to
$11.1 million for the same period in 2003. The average balance of interest-earning assets increased from $652.3 million
for the three months ended June 30, 2002 to $699.0 million for the three months ended June 30, 2003 resulting in an
increase of approximately $519,000 in income. The yield on interest-earning assets decreased from 7.18% for the three
months ended June 30, 2002 to 6.34% for the same period in 2003 resulting in a decrease in income of approximately
$1.1 million. Increased balances were due to increased cash volumes, which were received from loan repayments and
deposit growth. The decrease in the yield on interest-earning assets is due primarily to the lower interest rate
environment, which also resulted in the payoff of higher rate loans and downward interest rate adjustments on variable
rate loans.

15

<PAGE>

Total interest expense decreased $571,000 from $5.0 million for the three months ended June 30, 2002 to $4.4 million
for the same period in 2003. The average balance of interest-bearing liabilities increased 9.7% or $52.5 million from
$541.8 million at June 30,  2002 to $594.3 million for the three months ended June 30, 2003 resulting in an increase
of $282,000 in expense. This increase was more than offset by an $679,000 decrease in expense as a result of a decrease
in the rates on interest-bearing liabilities from 3.66% for the three months ended June 30, 2002 to 2.95% for the same
period in 2003. The reduction is due to market interest rate decreases. The average balance of borrowings comprised
16.7% of interest-bearing liabilities for the quarter ended June 30, 2003 compared to 22.9% for the same period in 2002.

The following table provides additional comparative data on the Company's average balance sheet, yield and expense
information, interest rate spread and net interest margin ratios:

|                                                                                    | Three months ended June 30,
|----------------------------------------------------------------------------------- | ---------------------------
|                                                                                    | 2003                       
|                                                                                    |                            
|                                                                                    | Average                    
|                                                                                    | Balance                    
|                                                                                    | (Dollars in Thousands)     
|Interest-earning assets:                                                            |                            
|Loans receivable, net (1)                                                           | $617,336                   
|Investment securities                                                               | 44,335                     
|Federal Home Loan Bank stock                                                        | 6,335                      
|Cash and cash equivalents                                                           | 30,976                     
|Total interest-earning assets                                                       | 698,982                    
|                                                                                    |                            
|Noninterest-earning assets                                                          | 14,146                     
|                                                                                    |                            
|Total average assets                                                                | $713,128                   
|                                                                                    |                            
|Interest-bearing liabilities:                                                       |                            
|Savings accounts                                                                    | $ 12,736                   
|Checking accounts                                                                   | 70,293                     
|Money market deposit accounts                                                       | 132,855                    
|Time deposits                                                                       | 279,343                    
|Total deposits                                                                      | 495,227                    
|Borrowings                                                                          | 99,067                     
|Total interest-bearing liabilities                                                  | 594,294                    
|                                                                                    |                            
|Noninterest-bearing liabilities                                                     | 25,504                     
|                                                                                    |                            
|Total average liabilities                                                           | 619,798                    
|                                                                                    |                            
|Average equity                                                                      | 93,330                     
|                                                                                    |                            
|Total liabilities and equity                                                        | $713,128                   
|                                                                                    |                            
|Net interest income                                                                 |                            
|Interest rate spread                                                                |                            
|Net interest margin                                                                 |                            
|Ratio of average interest-earning
 
assets to average interest-bearing  liabilities |                            

_________________

|(1) | Average loans receivable includes non-performing loans.  Interest income does not include interest on loans
90 days or more past due.
|--- | -------------------------------------------------------------------------------------------------------------------------------------

16

<PAGE>

Provision for Loan Losses. During the three months ended June 30, 2003, the provision for loan losses was $175,000
compared to $190,000 for the same period in 2002.  The allowance for loan losses increased $107,000 from $9.0 million
at March 31, 2003 to $9.1 million at June 30, 2003. The allowance for loan losses as a percentage of net loans (loans
receivable excluding allowance for losses) was 1.52% at June 30, 2003 compared to 1.46% at March 31, 2003, and
1.54% at June 30, 2002.

The allowance for losses on loans is maintained at a level sufficient to cover losses inherent in the loan portfolio but
not yet apparent to management. The risk of loss will vary with the type of loan being made, the creditworthiness of the
borrower, general economic conditions and, in the case of a secured loan, the quality of the security for the loan.
EverTrust's management reviews the adequacy of the allowance at least quarterly, as computed by a consistently applied
formula-based methodology, supplemented by management's assessment of current economic conditions, past loss and
collection experience, and risk characteristics of the loan portfolio. In addition, various regulatory agencies, as an
integral part of their examination process, periodically review the Company's allowance for loan losses. Such agencies
may require the Company to provide additions to the allowance based on judgment different from management.
Although management uses the best information available, future adjustments to the allowance may be necessary due
to economic, operating, regulatory and other conditions beyond EverTrust's control.

Non-interest Income. Non-interest income increased $520,000 from $1.1 million for the three months ended June 30,
2002 to $1.6 million for the same period in 2003. Brokered loan fees from the Bank's commercial mortgage banking
group, management fees from ETAM and loan modification fees were $605,000 for the three months ended June 30,
2003 compared to $374,000 for the three months ended June 30, 2002.****In addition gains on the sale of one-to-four
family loans for the three months ended June 30, 2003 were $301,000, compared to $137,000 for the same period a year
earlier.

The increase from the prior period in ETAM management fees and brokered loan fees from the Company's commercial
mortgage banking group was due to increased assets under management and transaction volume. The units started
operations in May and June 2001, respectively.

Loan modification fees increased due to additional activity for the renewal and extension of loans and the re-negotiation
of loan terms, some of which were triggered by the decline in market interest rates. Service fees and other non-interest
income increased due to volume.

The following table sets forth non-interest income (dollars in thousands):

|                            | Three Months Ended June 30,
|--------------------------- | ---------------------------
|                            | 2003                       
|                            |                            
|Brokered loan fees          | $ 231                      
|ETAM management fees        | 209                        
|Loan modification fees      | 165                        
|Gain on sale of securities  | 2                          
|Gain on sale of loans       | 301                        
|Service fees and other, net | 736                        
|Total noninterest income    | $1,644                     

Non-interest Expense.
Non-interest expense decreased $207,000 from $5.4 million for the three months
ended June 30, 2002 to $5.2 million for the same period in 2003. The decrease is
due primarily to lower depreciation expense on fully depreciated equipment and
lower marketing expense due to timing of marketing activities. The decrease was
partially offset by additional salary and employee benefits of $131,000 from
$3.0 million for the three months ended June 30, 2002 to $3.2 million for the
three months ended June 30, 2003. Compensation expense increased as a result of
annual pay increases which took effect in April 2003. The Company had 169
employees at June 30, 2003 compared to 179 employees at June 30, 2002 with the
temporary decline due to normal staff turnover. Information processing costs
increased $19,000 from $357,000 for the three months ended June 30, 2002 to
$376,000 for the same period in 2003.

17

<PAGE>

The small increase is primarily the
result of additional software depreciation associated with the addition of the
client contact center.

Provision for Income Taxes. Federal income taxes increased $351,000 from $643,000 for the three months ended June
30, 2002 to $994,000 for the three months ended June 30, 2003. The change is primarily due to an increase in earnings.
In addition the Company's  effective tax rate has increased due to the expiration of low income housing tax credits.

Liquidity and Capital Resources.  EverTrust's primary source of funds are deposits and proceeds from principal and
interest payments on loans and securities, and Federal Home Loan Bank of Seattle advances and other borrowings.
While maturities and scheduled amortization of loan and securities are a predictable source of funds, deposit flows and
mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.

The primary investing activity of EverTrust is the origination of commercial real estate, multifamily and, to a much
lesser extent, one-to-four family mortgage loans. A secondary, but increasing activity of the Company is the origination
of business and private banking loans. During the three months ended June 30, 2003, the Company originated $107.0
million in new loans, $88.5 million after participating out $18.5 million of loans to other banks. In addition, during this
three month period, funds were used to pay a cash dividend to shareholders totaling $581,000. These activities were
funded by loan repayments and proceeds from the sales and maturities of investment securities.  EverTrust must
maintain adequate levels of liquidity to ensure the availability of sufficient funds to support loan growth and deposit
withdrawals, to satisfy financial commitments and to take advantage of investment opportunities. The source of funds
include deposits and principal and interest payments from loans and investments and Federal Home Loan Bank of
Seattle advances.

The management of EverTrust believes it has adequate resources to fund all loan commitments by deposits and, if
necessary, Federal Home Loan Bank of Seattle advances and other borrowings and the sale of mortgage loans. It can
also adjust the offering rates of deposit accounts to retain deposits in changing interest rate environments.

**Capital Requirements.** EverTrust, as a financial holding company, is regulated by the Federal Reserve Board (FRB).
The FRB's minimum risk-based capital ratio guidelines for Tier 1 and total capital are 4% and 8%, respectively.

The actual regulatory capital ratios calculated for EverTrust along with the minimum capital amounts and ratios for
capital adequacy purposes were as follows (dollars in thousands):

|                                          |          |                   | Minimum for Capital
|----------------------------------------- | -------- | ----------------- | -------------------
|                                          | Actual   | adequacy purposes
|                                          | Amount   | Ratio             | Amount             
|June 30, 2003:                            |          |                   |                    
|Total capital to risk-weighed assets      | $100,572 | 16.4%             | $49,060            
|Tier 1 capital to risk-weighted assets    | 92,979   | 15.2              | 24,468             
|Tier 1 leverage capital to average assets | 92,979   | 13.0              | 28,609             

Forward-looking Statements

Certain matters discussed in this Form 10-Q may constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward looking statements relate to, among other things,
expectations of the business environment in which the Company operates, projections of future performance, perceived
opportunities in the market, and statements regarding the Company's mission and vision. These forward-looking
statements are based upon current management expectations, and may therefore involve risks and uncertainties. The
Company's actual results, performance, or achievements may differ materially from this suggested, expressed, or implied
by forward looking statements due to a wide range of factors including, but not limited to, non-bank financial services
providers, regulatory changes, interest rates, national and regional economic conditions and other risks detailed in the
Company's reports filed with the Securities and Exchange Commission.

18

<PAGE>

**Item 3.	Quantitative and Qualitative Disclosures About Market Risk Asset and Liability Management and 	Market Risk**

EverTrust's profitability depends primarily on its net interest income, which is the difference between the income it
receives on its loan and investment portfolio and its cost of funds, which consists of interest paid on deposits and
borrowings. Net income is further affected by gains and losses on loans held for sale, which can be affected by changes
in interest rates. Net interest income is also affected by the relative amounts of interest-earning assets and interest-bearing liabilities. When interest-earning assets equal or exceed interest-bearing liabilities, any positive interest rate
spread will generate net interest income. EverTrust continues to actively manage the impact of interest rate changes on
net interest income and capital by emphasizing the origination of adjustable rate and shorter-term fixed rate loans, selling
30 year fixed rate mortgages, and purchasing investment securities that better match the duration of its deposits.
EverTrust's profitability is also affected by the level of non-interest income and expenses. Non-interest income includes
items such as service charges and fees on deposit accounts, loan service fees and gains on sale of investments and loans.

Non-interest expenses primarily include compensation and benefits, occupancy and equipment expenses, deposit
insurance premiums and data processing expenses. EverTrust's results of operations are also significantly affected by
general economic and competitive conditions, particularly changes in market interest rates, government legislation and
regulation and monetary and fiscal policies.

EverTrust does not maintain a trading account for any class of financial instrument nor does it purchase high-risk
derivative instruments. EverTrust Bank is authorized to engage in limited hedging activities for its saleable loan pipeline,
and had $6.0 million worth of fair value forward sale contracts in place at June 30, 2003. The forward sale contracts
are scheduled to settle by the quarter ending September 30, 2003 and the Company expects minimal risk associated with
the contracts. EverTrust has no commodity price risk, and only a limited amount of foreign currency exchange rate risk
as a result of holding Canadian currency in the normal course of business.

**Item 4. Controls and Procedures.**

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

(b) Changes in Internal Controls:In the quarter ended
June 30, 2003, the Company did not make any significant
changes in, nor take any corrective actions regarding, its internal controls or other factors that could significantly affect
these controls.

**Part II - Other Information**

**Item 1.**  Legal Proceedings

From time to time the Company or its subsidiaries are engaged in legal proceedings in the ordinary course of business,
none of which are considered to have a material impact on the Company's financial position or results of operations.

**Item 2.**  Changes in Securities

None

19

<PAGE>

**Item 3.**  Defaults Upon Senior Securities

Not applicable.

**Item 4.**  Submission of Matters to a Vote of Shareholders

None

**Item 5.**  Other Information

None

**Item 6.**  Exhibits and Reports on Form 8-K

|(a) | Exhibits
|--- | --------
|   
|    |         
|    |         
|    |         
|    |         
|    |         
|    |         
|    |         
|    |         
|    |         
|    |         
|    |         
|    |         
|    |         
|    |         

_____________

|(1) | Filed as an exhibit to the Registrant's Registration Statement on Form S-1 (333-81125).              
|--- | -----------------------------------------------------------------------------------------------------
|(2) | Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the year ended March 31, 2000.
|(3) | Filed as an exhibit to the Registrant's annual meeting proxy statement dated June 19, 2000.          
|(4) | Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the year ended March 31, 2003.

No reports on Form 8-K were filed during the quarter ended June 30, 2003.

20

<PAGE>



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

                                                                                                           

EverTrust Financial Group, Inc.

August 5, 2003                                                                                 
/s/ Michael B. Hansen
                                                                                                            
Michael B. Hansen
                                                                                                            
President and Chief Executive Officer
                                                                                                            
(Principal Executive Officer)

August 5, 2003                                                                                 
/s/ Jeffrey R. Mitchell
                                                                                                            
Jeffrey R. Mitchell
                                                                                                            
Chief Financial Officer
                                                                                                            
(Principal Financial and Accounting Officer)

21

<PAGE>



Exhibit 31



<PAGE>

**Certification**

I, Michael B. Hansen, certify that:

|1. | I have reviewed this
quarterly report on Form 10-Q of EverTrust Financial Group, Inc.;                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;
|  
|3. | Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;                   
|  
|4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we
have:                                                                         
|  
|   | (a)                                                                                                                                                                                                                                                                                                       
|  
|   | (b)                                                                                                                                                                                                                                                                                                       
|  
|   | (c)                                                                                                                                                                                                                                                                                                       
|  
|5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the
equivalent functions):        
|  
|   | (a)                                                                                                                                                                                                                                                                                                       
|  
|   | (b)                                                                                                                                                                                                                                                                                                       

Date: August 5, 2003

/s/ Michael B. HansenMichael B. HansenPresident and Chief Executive Officer



<PAGE>

**Certification**

I, Jeffrey R. Mitchell, certify that:

|1. | I have reviewed this
quarterly report on Form 10-Q of EverTrust Financial Group, Inc.;                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;
|  
|3. | Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;                   
|  
|4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we
have:                                                                         
|  
|   | (a)                                                                                                                                                                                                                                                                                                       
|  
|   | (b)                                                                                                                                                                                                                                                                                                       
|  
|   | (c)                                                                                                                                                                                                                                                                                                       
|  
|5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the
equivalent functions):        
|  
|   | (a)                                                                                                                                                                                                                                                                                                       
|  
|   | (b)                                                                                                                                                                                                                                                                                                       

Date: August 5, 2003

/s/ Jeffrey R. MitchellJeffrey R. MitchellChief
Financial Officer



<PAGE>



**Exhibit
32**



**<PAGE>**



**CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
OF EVERTRUST FINANCIAL GROUP, INC.
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

The undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with
this Quarterly Report on Form 10-Q, that:

|(1) | the report fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, and            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                
|(2) | the information contained in the report fairly presents, in all material respects, the company's financial
condition and results of operations.

/s/ Michael B. Hansen                                                         /s/ Jeffrey R. Mitchell
Michael B. Hansen                                                                                   Jeffrey R. Mitchell
Chief Executive Officer                                                                            Chief Financial Officer
Dated: August 5, 2003

A signed original of this written statement required by Section 906 has been provided to EverTrust Financial Group,
Inc. and will be retained by EverTrust Financial Group, Inc. and furnished to the staff of the Securities and Exchange
Commission or its staff upon request.

<PAGE>