EX-10.5


EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made effective as of August 1, 1997, by and between 
CASCADE BANK (the "Bank"), Everett, Washington; and David Little (the 
"Executive").

     WHEREAS, the Bank wishes to assure itself of the services of Executive for 
the period provided in this Agreement; and

     WHEREAS, Executive is willing to serve in the employ of the Bank on a 
full-time basis for said period.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained, 
and upon the other terms and conditions hereinafter provided, the parties 
hereby agree as follows:

1.   POSITION AND RESPONSIBILITIES.

     During the period of his employment hereunder, Executive agrees to serve 
as Executive Vice-President of the Bank.  During the term of this Agreement, 
Executive shall have responsibility for Business Banking and shall report to 
the President

2.   TERMS AND DUTIES.

     (a)  The term of this Agreement shall be deemed to have commenced as of 
the date first above written and shall continue for a period of twenty-four 
(24) full calendar months thereafter.

     (b)  During the period of his employment hereunder, except for periods of 
absence occasioned by illness, reasonable vacation periods, and reasonable 
leaves of absence, Executive shall devote substantially all his business time, 
attention, skill, and efforts to the faithful performance of his duties 
hereunder including activities and services related to the organization, 
operation and management of the Bank; provided, however, that, with the 
approval of the Board of Directors of the Bank (the "Board"), as evidenced by a 
resolution of such Board, from time to time, Executive may serve, or continue 
to serve, on the boards of directors of, and hold any other offices or 
positions in, companies or organizations, which, in such Board's judgment, will 
not present any conflict of interest with the Bank, or materially affect the 
performance of Executive's duties pursuant to this Agreement.

3.   COMPENSATION AND REIMBURSEMENT.

     (a)  The compensation specified under this Agreement shall constitute the 
salary and benefits paid for the duties described in Sections 1 and 2.  The 
Bank shall pay Executive as compensation a salary of $71,800 per year ("Base 
Salary").  Such Base Salary shall be payable in accordance with the customary 
payroll practices of the Bank.  During the period of this Agreement, 
Executive's Base Salary shall be reviewed at least annually; the first such 
review will be made no later than one year from the date of this Agreement.  
Such review shall be conducted by a Committee designated by the Board, and the 
Board may increase Executive's Base Salary.  In addition to the Base Salary 
provided in this Section 3(a), the Bank shall make available to Executive all 
such other benefits as are provided uniformly to permanent full-time employees 
of the Bank.

     (b)  Executive will be entitled to incentive compensation and bonuses as 
provided in any plan, or pursuant to any arrangement, of the Bank, in which 
Executive is eligible to participate.  Nothing paid to Executive under any such 
plan or arrangement will be deemed to be in lieu of other compensation to which 
Executive is entitled under this Agreement.

     (c)  In addition to the Base Salary provided for by paragraph (a) of this 
Section 3, the Bank shall pay or reimburse Executive for all reasonable travel 
and other obligations under this Agreement and may provide such additional 
compensation in such form and such amounts as the Board may from time to time 
determine.

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a)  Upon the occurrence of an Event of Termination (as herein defined) 
during Executive's term of employment under this Agreement, the provisions of 
this Section shall apply.  As used in this Agreement, an "Event of Termination" 
shall mean the termination by the Bank of Executive's full-time employment 
hereunder for any reason, other than Termination for Cause, as defined in 
Section 6 hereof.

     (b)  Upon the occurrence of an Event of Termination, the Bank shall pay 
Executive, or, in the event of his subsequent death, his beneficiary or 
beneficiaries, or his estate, as the case may be, as severance pay or 
liquidated damages, or both, a sum equal to the amount of Base Salary 
(determined as of the Date of Termination) otherwise payable to Executive over 
the remaining term of the Agreement; provided, however, that if the Bank is not 
in compliance with its minimum capital requirements or if such payments would 
cause the Bank's capital to be reduced below its minimum capital requirements, 
such payments shall be deferred until such time as the Bank is in capital 
compliance.  All payments made pursuant to this Section 4(b) shall be paid in 
substantially equal monthly installments over the remaining term of this 
Agreement following Executive's termination.

5.   TERMINATION UPON RETIREMENT; DEATH OF EXECUTIVE; RESIGNATION

     Termination by the Bank of Executive based on "Retirement" shall mean 
retirement at or after attaining age sixty-five (65) or in accordance with any 
retirement arrangement established with Executive's consent with respect to 
him.  Upon termination of Executive upon Retirement, Executive shall be 
entitled to all benefits under any retirement plan of the Bank and other plans 
to which Executive is a party.  Upon the death of Executive during the term of 
this Agreement, the Bank shall pay to Executive's estate the compensation due 
to Executive through the last day of the calendar month in which his death 
occurred.  Upon the voluntary resignation of Executive during the term of this 
Agreement, the Bank shall pay to Executive the compensation due to Executive 
through his Date of Termination.

6.   TERMINATION FOR CAUSE.

     For purposes of this Agreement, "Termination for Cause" shall include 
termination because of Executive's personal dishonesty, incompetence, willful 
misconduct, breach of fiduciary duty involving personal profit, intentional 
failure to perform stated duties, willful violation of any law, rule, or 
regulation (other than traffic violations or similar offenses) or final cease-
and-desist order, or material breach of any provision of this Agreement.  For 
purposes of this Section, no act, or the failure to act, on Executive's part 
shall be "willful" unless done, or omitted to be done, not in good faith and 
without reasonable belief that the action or omission was in the best interest 
of the Bank or its affiliates.  Notwithstanding the foregoing, Executive shall 
not be deemed to have been Terminated for Cause unless and until there shall 
have been delivered to him a copy of a resolution duly adopted by the 
affirmative vote of not less than a majority of the members of the Board at a 
meeting of the Board called and held for that purpose (after reasonable notice 
to Executive and an opportunity for him, together with counsel, to be heard 
before the Board), finding that in the good faith opinion of the Board, 
Executive was guilty of conduct justifying Termination for Cause and specifying 
the reasons thereof.  Executive shall not have the right to receive 
compensation or other benefits for any period after Termination for Cause.  Any 
stock options granted to Executive under any stock option plan or any unvested 
awards granted under any other stock benefit plan of the Bank, the Company, or 
any subsidiary or affiliate thereof, shall become null and void effective upon 
Executive's receipt of Notice of Termination for Cause pursuant to Section 7 
hereof, and shall not be exercisable by Executive at any time subsequent to 
such Termination for Cause.

7.   NOTICE.

     (a)  Any purported termination by the Bank or by Executive shall be 
communicated by Notice of Termination to the other party hereto.  For purposes 
of this Agreement, a "Notice of Termination" shall mean a written notice which 
shall indicate the specific termination provision in this Agreement relied upon 
and shall set forth in reasonable detail the facts and circumstances claimed to 
provide a basis for termination of Executive's employment under the provision 
so indicated.

     (b)  "Date of Termination" shall mean the date specified in the Notice of 
Termination (which, in the case of a Termination for Cause, shall not be less 
than thirty (30) days from the date such Notice of Termination is given).

     (c)  If, within thirty (30) days after any Notice of Termination is given, 
the party receiving such Notice of Termination notifies the other party that a 
dispute exists concerning the termination, the Date of Termination shall be the 
date on which the dispute is finally determined, either by mutual written 
agreement of the parties, by a binding arbitration award, or by a final 
judgment, order or decree of a court of competent jurisdiction (the time for 
appeal there from having expired and no appeal having been perfected) and 
provided further that the Date of Termination shall be extended by a notice of 
dispute only if such notice is given in good faith and the party giving such 
notice pursues the resolution of such dispute with reasonable diligence.  
Notwithstanding the pendency of any such dispute, the Bank will continue to pay 
Executive his full compensation in effect when the notice giving rise to the 
dispute was given (including, but not limited to, Base Salary) and continue him 
as a participant in all compensation, benefit and insurance plans in which he 
was participating when the notice of dispute was given, until the dispute is 
finally resolved in accordance with this Agreement.  Amounts paid under this 
Section are in addition to all other amounts due under this Agreement and shall 
not be offset against or reduce any other amounts due under this Agreement.

8.   SOURCE OF PAYMENTS.

     All payments provided in this Agreement shall be timely paid in cash or 
check from the general funds of the Bank.

9.   EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties 
hereto and supersedes any prior employment agreement between the Bank or any 
predecessor of the Bank and Executive, except that this Agreement shall not 
affect or operate to reduce any benefit or compensation inuring to Executive of 
a kind elsewhere provided.  No provision of this Agreement shall be interpreted 
to mean that Executive is subject to receiving fewer benefits than those 
available to him without reference to this Agreement.

10.   NO ATTACHMENT.

     (a)  Except as required by law, no right to receive payments under this 
Agreement shall be subject to anticipation, commutation, alienation, sale, 
assignment, encumbrance, charge, pledge, or hypothecation, or to execution, 
attachment, levy, or similar process or assignment by operation of law, and any 
attempt, voluntary or involuntary, to affect any such action shall be null, 
void, and of no effect.

     (b)  This Agreement shall be binding upon, and inure to the benefit of, 
Executive, the Bank, the Company and their respective successors and assigns.

11.  MODIFICATION AND WAIVER.

     (a)  This Agreement may not be modified or amended except by an instrument 
in writing signed by the parties hereto.

     (b)  No term or condition of this Agreement shall be deemed to have been 
waived, nor shall there by any estoppel against the enforcement of any 
provision of this Agreement, except by written instrument of the party charged 
with such waiver or estoppel.  No such written waiver shall be deemed a 
continuing waiver unless specifically stated therein, and each such waiver 
shall operate only as to the specific term or condition waived and shall not 
constitute a waiver of such term or condition for the future as to any act 
other than that specifically waived.

12.  SEVERABILITY.

     If, for any reason, any provision of this Agreement, or any part of any 
provision, is held invalid, such invalidity shall not affect any other 
provision of this Agreement or any part of such provision not held so invalid, 
and each such other provision and part thereof shall to the full extent 
consistent with law continue in full force and effect.

13.  HEADINGS FOR REFERENCE ONLY.

     The headings of sections and paragraphs herein are included solely for 
convenience of reference and shall not control the meaning or interpretation of 
any of the provisions of this Agreement.

14.  GOVERNING LAW.

     This Agreement shall be governed by the laws of the State of Washington, 
unless otherwise specified herein; provided, however, that in the event of a 
conflict between the terms of this Agreement and any applicable federal or 
state law or regulation, the provisions of such law or regulation shall 
prevail.

15.  ARBITRATION.

     Any dispute or controversy arising under or in connection with this 
Agreement shall be settled exclusively by arbitration, conducted before a panel 
of three arbitrators sitting in a location selected by the employee within one 
hundred (100) miles from the location of the Bank, in accordance with the rules 
of the American Arbitration Association then in effect.  Judgment may be 
entered on the arbitrator's award in any court having jurisdiction; provided, 
however, that Executive shall be entitled to seek specific performance of his 
right to be paid until the Date of Termination during the pendency of any 
dispute or controversy arising under or in connection with this Agreement.

16.  PAYMENT OF LEGAL FEES.

     All reasonable legal fees paid or incurred by Executive pursuant to any 
dispute or question of interpretation relating to this Agreement shall be paid 
or reimbursed by the Bank, if Executive is successful pursuant to a legal 
judgment, arbitration or settlement.

17.  SUCCESSOR TO THE BANK.

     The Bank shall require any successor or assignee, whether direct or 
indirect, by purchase, merger, consolidation or otherwise, to all or 
substantially all the business or assets of the Bank, expressly and 
unconditionally to assume and agree to perform the Bank's obligations under 
this Agreement, in the same manner and to the same extent that the Bank would 
be required to perform if no such succession or assignment had taken place.

18.  REQUIRED PROVISIONS.

     (a)  The Bank may terminate Executive's employment at any time, but any 
termination by the Bank, other than Termination for Cause, shall not prejudice 
Executive's right to compensation or other benefits under this Agreement.  
Executive shall not have the right to receive compensation or other benefits 
for any period after Termination for Cause as defined in Section 6 herein.

     (b)  If Executive is suspended and/or temporarily prohibited from 
participating in the conduct of the Bank's affairs by a notice served under 
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act ("FDIA") (12 
U.S.C. 1818(e)(3) and (g)(1)), the Bank's obligations under the Agreement shall 
be suspended as of the date of service, unless stayed by appropriate 
proceedings.  If the charges in the notice are dismissed, the Bank may, in its 
discretion, (i) pay Executive all or part of the compensation withheld while 
its contract obligations were suspended and (ii) reinstate (in whole or in 
part) any of its obligations that were suspended.

     (c)  If Executive is removed and/or permanently prohibited from 
participating in the conduct of the Bank's affairs by an order issued under 
Section 8(e)(4) or (g)(1) of the FDIA (12 U.S.C. 1818(e)(4) or (g)(1)), all 
obligations of the Bank under the Agreement shall terminate as of the effective 
date of the order, but vested rights of the contracting parties shall not be 
affected.

     (d)  If the Bank is in default (as defined in Section 3(x)(1) of the 
FDIA), all obligations under this Agreement shall terminate as of the date of 
default, but this paragraph shall not affect any vested rights of the parties.

     (e)  All obligations under this Agreement shall be terminated (except to 
the extent determined that continuation of the Agreement is necessary for the 
continued operation of the Bank):  (i) by the Director of the Office of Thrift 
Supervision (the "Director") or his or her designee at the time the Federal 
Deposit Insurance Corporation enters into an agreement to provide assistance to 
or on behalf of the Bank under the authority contained in Section 13(c) of the 
FDIA or (ii) by the Director, or his or her designee at the time the Director 
or such designee approves a supervisory merger to resolve problems related to 
operation of the Bank or when the Bank is determined by the Director to be in 
an unsafe or unsound condition.  Any rights of the parties that have already 
vested, however, shall not be affected by such action.

     (f)  Any payments made to Executive pursuant to this Agreement, or 
otherwise, are subject to and conditioned upon compliance with 12 U.S.C. 
Section 1828(k) and any regulations promulgated thereunder.

     IN WITNESS WHEREOF, the Bank hereto has caused this Agreement to be 
executed and its seal to be affixed hereunto by a duly authorized officer, and 
Executive has signed this Agreement, all on the 24th day of July, 1997.



ATTEST:                                     CASCADE BANK




                                            BY:  /s/ Russell E. Rosendal
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                [SEAL]


WITNESS:
 

/s/ Russell E. Rosendal                         /s/ David Little
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                                                Executive