|SECURITIES AND EXCHANGE COMMISSION                                                    
|--------------------------------------------------------------------------------------
|Washington, D.C.20549                                                                 
|                                                                                      
|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


**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 November 1, 20024,993,192


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

|                                                                   |    |                                                                                                                                             | Page
|------------------------------------------------------------------ | -- | ------------------------------------------------------------------------------------------------------------------------------------------- | ----
|PART I                                                             | -  | FINANCIAL INFORMATION                                                                                                                       |     
|                                                                   |    |                                                                                                                                            
|                                                                   |    |                                                                                                                                             |     
|ITEM 1                                                             | -  | Financial Statements. The Consolidated Financial Statements of EverTrustFinancial Group, Inc. filed as a part of the report are as follows: |     
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Consolidated Statements of Financial Condition as of September 30, 2002
and March 31, 2002                                                  | 1   
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Consolidated Statements of Operations for the three and six months ended

September 30, 2002 and 2001                                       | 2   
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Consolidated Statements of Comprehensive Income for the six months

ended September 30, 2002 and 2001                                       | 3   
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Consolidated Statements of Changes in
Equity for the twelve months ended March 31, 2002 and six months ended September
30, 2002             | 4   
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Consolidated Statements of Cash Flows for the six months

ended September 30, 2002 and 2001                                                 | 5   
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Notes to Consolidated Financial Statements                                                                                                  | 6   
|                                                                   |    |                                                                                                                                             |     
|ITEM 2                                                             | -  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                       |     
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | General                                                                                                                                     | 10  
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Comparison of Financial Condition at September 30, and March 31, 2002                                                                       | 12  
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Comparison of Operating Results for the Three Months Ended September 30, 2002 and 2001                                                      | 14  
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Comparison of Operating Results for the Six Months Ended September 30, 2002 and 2001                                                        | 16  
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Liquidity and Capital Resources                                                                                                             | 19  
|                                                                   |    |                                                                                                                                             |     
|ITEM 3                                                             | -  | Quantitative and Qualitative Disclosures About Market Risk                                                                                  |     
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Asset and Liability Management and Market Risk                                                                                              | 19  
|                                                                   |    |                                                                                                                                             |     
|ITEM 4                                                             | -  | Controls and Procedures                                                                                                                     | 20  
|                                                                   |    |                                                                                                                                             |     
|PART II                                                            | -  | OTHER INFORMATION                                                                                                                           |     
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Item 1.  Legal Proceedings                                                                                                                  | 21  
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Item 2.  Changes in Securities                                                                                                              | 21  
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Item 3.  Defaults upon Senior Securities                                                                                                    | 21  
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Item 4.  Submission of Matters to a Vote of Stockholders                                                                                    | 21  
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Item 5.  Other Information                                                                                                                  | 21  
|                                                                   |    |                                                                                                                                             |     
|                                                                   |    | Item 6.  Exhibits and Reports on Form 8-K                                                                                                   | 21  
|                                                                   |    |                                                                                                                                             |     
|SIGNATURES                                                         | 22
|                                                                   |   
|CERTIFICATIONS - Pursuant to Section 302 of the Sarbanes-Oxley Act | 23

i

<PAGE>

**Part 1 - Financial Information****Item 1**- Financial Statement

EverTrust Financial Group, Inc.Consolidated Statements of Financial Condition
September 30, 2002 and March 31, 2002
(Dollar amounts in thousands)

|                                                                     |                    |                   
|-------------------------------------------------------------------- | ------------------ | ------------------
|                                                                     | September 30,      | March 31,         
|                                                                     | 2002               | 2002              
|ASSETS                                                               | (Unaudited)        |                   
|                                                                     |                    |                   
|Cash and cash equivalents, including interest bearing deposits       |                    |                   
|of $38,296 and $8,975                                                | $           49,278 | $           19,166
|Securities available for sale, amortized cost of $40,020 and $49,336 | 40,570             | 49,903            
|Securities held to maturity, fair value of $4,405 and $5,126         | 4,167              | 4,955             
|Federal Home Loan Bank stock, at cost                                | 6,126              | 5,946             
|Loans receivable, net of allowances of $8,857 and $8,754             | 555,649            | 574,646           
|Loans held for sale, fair value of $11,105 and $634                  | 10,905             | 625               
|Accrued interest receivable                                          | 3,437              | 3,638             
|Premises and equipment, net                                          | 9,785              | 10,196            
|Other real estate owned                                              | -                  | 524               
|Prepaid expenses and other assets                                    | 6,229              | 6,210             
|                                                                     |                    |                   
|Total Assets                                                         | $        686,146   | $        675,809  
|                                                                     |                    |                   
|LIABILITIES AND EQUITY                                               |                    |                   
|                                                                     |                    |                   
|LIABILITIES:                                                         |                    |                   
|Deposit accounts                                                     | $        480,584   | $        449,611  
|Federal Home Loan Bank advances and other borrowings                 | 108,861            | 129,338           
|Accounts payable and other liabilities                               | 4,354              | 4,036             
|                                                                     |                    |                   
|Total Liabilities                                                    | 593,799            | 582,985           
|                                                                     |                    |                   
|COMMITMENTS AND CONTINGENCIES                                        |                    |                   
|                                                                     |                    |                   
|EQUITY:                                                              |                    |                   
|Common stock - no par value, 49,000,000 shares authorized,           |                    |                   
|4,996,592 shares and 5,170,569 shares outstanding at                 |                    |                   
|September 30, 2002 and March 31, 2002, respectively                  | 34,212             | 37,390            
|Employee Stock Ownership Plan (ESOP) debt                            | (792)              | (792)             
|Retained earnings                                                    | 60,298             | 58,019            
|Shares held in trust for stock-related                               |                    |                   
|compensation plans                                                   | (1,734)            | (2,167)           
|Accumulated other comprehensive income                               | 363                | 374               
|                                                                     |                    |                   
|Total Equity                                                         | 92,347             | 92,824            
|                                                                     |                    |                   
|Total Liabilities and Equity                                         | $        686,146   | $        675,809  

1

<PAGE>



EverTrust Financial Group, Inc.Consolidated Statements of OperationsFor the Three and Six Months Ended September 30, 2002 and 2001(Dollar amounts in thousands, except per share amounts)

|                                              | Three Months Ended September 30, |                    | Six Months Ended September 30,
|--------------------------------------------- | -------------------------------- | ------------------ | ------------------------------
|                                              | 2002                             | 2001               |                               
|                                              | (Unaudited)                      |                    | (Unaudited)                   
|INTEREST INCOME:                              |                                  |                    |                               
|Loans receivable                              | $             10,658             | $          10,882  |                               
|Investment securities:                        |                                  |                    |                               
|Taxable interest income                       | 730                              | 858                |                               
|Tax-exempt interest income                    | 53                               | 63                 |                               
|Dividend income                               | 100                              | 119                |                               
|Total investment security income              | 883                              | 1,040              |                               
|Total interest income                         | 11,541                           | 11,872             |                               
|INTEREST EXPENSE:                             |                                  |                    |                               
|Deposit accounts                              | 3,474                            | 4,313              |                               
|Federal Home Loan Bank advances               |                                  |                    |                               
|and other borrowings                          | 1,481                            | 1,226              |                               
|Total interest expense                        | 4,955                            | 5,539              |                               
|Net interest income                           | 6,586                            | 6,333              |                               
|PROVISION FOR LOAN LOSSES                     | -                                | 375                |                               
|Net interest income after provision for       |                                  |                    |                               
|loan losses                                   | 6,586                            | 5,958              |                               
|NONINTEREST INCOME:                           |                                  |                    |                               
|Loan service fees                             | 605                              | 215                |                               
|Gain on sale of securities                    | 49                               | 1                  |                               
|Gain on sale of loans                         | 161                              | 139                |                               
|Other, net                                    | 603                              | 373                |                               
|Total noninterest income                      | 1,418                            | 728                |                               
|NONINTEREST EXPENSES:                         |                                  |                    |                               
|Salaries and employee benefits                | 3,123                            | 2,828              |                               
|Occupancy and equipment                       | 783                              | 721                |                               
|Information processing costs                  | 363                              | 267                |                               
|Other, net                                    | 1,218                            | 966                |                               
|Total noninterest expenses                    | 5,487                            | 4,782              |                               
|Earnings before federal income taxes          | 2,517                            | 1,904              |                               
|FEDERAL INCOME TAXES                          | 713                              | 572                |                               
|NET INCOME                                    | $           1,804                | $           1,332  |                               
|                                              |                                  |                    |                               
|Net income per common share - basic           | $             0.38               | $             0.21 |                               
|Net income per common share - diluted         | $             0.36               | $             0.21 |                               
|                                              |                                  |                    |                               
|Weighted average shares outstanding - basic   | 4,722,660                        | 6,283,363          |                               
|Weighted average shares outstanding - diluted | 5,035,388                        | 6,482,488          |                               
|                                              |                                  |                    |                               
|Dividends paid per share                      | $           0.115                | $           0.105  |                               

2

<PAGE>

EverTrust Financial Group, Inc.Consolidated Statements of Comprehensive IncomeFor the Six Months Ended September 30, 2002 and 2001(Dollar amounts in thousands)

|                                                  | 2002            | 2001           
|------------------------------------------------- | --------------- | ---------------
|                                                  | (Unaudited)    
|                                                  |                
|NET INCOME                                        | $         3,435 | $         2,714
|OTHER COMPREHENSIVE INCOME, net of income taxes:  |                 |                
|Gross unrealized gain (loss) on securities:       |                 |                
|Unrealized holding gain (loss) during the period, |                 |                
|net of deferred income tax expense (benefit)      |                 |                
|of $(14) and $69                                  | (28)            | 134            
|Less adjustment of gains included in net income,  |                 |                
|net of income tax of $9 and $(8)                  | 17              | (16)           
|Other comprehensive income                        | (11)            | 118            
|                                                  |                 |                
|COMPREHENSIVE INCOME                              | $         3,424 | $         2,832

3

<PAGE>



EverTrust Financial Group, Inc.Consolidated Statements of Changes in EquityFor the Twelve Months Ended March 31, 2002 and Six Months Ended September 30, 2002(Dollar amounts in thousands, Unaudited)

|                                         |              |            |              |               | Shares held  |                 |           
|---------------------------------------- | ------------ | ---------- | ------------ | ------------- | ------------ | --------------- | ----------
|                                         |              |            |              |               | in trust for | Accumulated     |           
|                                         | Common Stock |            |              | stock-related | other        |                
|                                         |              |            | Debt related | Retained      | compensation | comprehensive   |           
|                                         | Shares       | Amount     | to ESOP      | Earnings      | plans        | Income          | Total     
|                                         |              |            |              |               |              |                 |           
|BALANCE, April 1, 2001                   | 7,258,243    | $ 68,940   | $  (1,188)   | $  55,033     | $ (3,034)    | $      (395)    | $ 120,146 
|                                         |              |            |              |               |              |                 |           
|Common stock repurchased                 | (2,087,674)  | (31,701)   |              |               |              |                 | (31,701)  
|Repayment of ESOP debt                   |              |            | 396          |               |              |                 | 396       
|ESOP activity- Change in value of        |              |            |              |               |              |                 |           
|shares committed to be released          |              | 151        |              |               |              |                 | 151       
|Amortization of compensation  related to |              |            |              |               |              |                 |           
|Management Recognition Plan (MRP)        |              |            |              |               | 867          |                 | 867       
|Net income                               |              |            |              | 5,579         |              |                 | 5,579     
|Dividends paid                           |              |            |              | (2,593)       |              |                 | (2,593)   
|Other comprehensive income,              |              |            |              |               |              |                 |           
|net of income taxes                      |              |            |              |               |              | (21)            | (21)      
|BALANCE, March 31, 2002                  | 5,170,569    | $   37,390 | $  (792)     | $ 58,019      | $    (2,167) | $          374  | $  92,824 
|                                         |              |            |              |               |              |                 |           
|Common stock repurchased                 | (173,977)    | (3,178)    |              |               |              |                 | (3,178)   
|Amortization of compensation related to  |              |            |              |               |              |                 |           
|Management Recognition Plan (MRP)        |              |            |              |               | 433          |                 | 433       
|Net income                               |              |            |              | 3,435         |              |                 | 3,435     
|Dividends paid                           |              |            |              | (1,156)       |              |                 | (1,156)   
|Other comprehensive income, net of       |              |            |              |               |              |                 |           
|income taxes                             |              |            |              |               |              | (11)            | (11)      
|BALANCE, September 30, 2002              | 4,996,592    | $ 34,212   | $  (792)     | $ 60,298      | $    (1,734) | $           363 | $   92,347







4

<PAGE>



EverTrust Financial Group, Inc and SubsidiariesConsolidated Statements of Cash Flows (In thousands)For the Six Months Ended September 30, 2002 and 2001

|                                                          | 2002       |  | 2001       
|--------------------------------------------------------- | ---------- |  | -----------
|                                                          |           
|OPERATING ACTIVITIES:                                     |            |  |            
|Net income                                                | $    3,435 |  | $     2,714
|Adjustments to reconcile net income to net cash           |            |  |            
|provided (used) by operating activities:                  |            |  |            
|Depreciation and amortization of premises                 |            |  |            
|and equipment                                             | 900        |  | 695        
|Dividends on Federal Home Loan Bank stock and             |            |  |            
|accretion of investment security discounts                | (330)      |  | (235)      
|Gain on sale of premises and equipment                    | (7)        |  | (29)       
|Amortization of investment security premiums              | 27         |  | 372        
|Loss on limited partnership                               | 54         |  | 54         
|Provision for losses on loans                             | 190        |  | 625        
|Amortization of deferred loan fees and costs              | (1,064)    |  | (1,083)    
|Loan fees deferred                                        | 770        |  | 977        
|Proceeds from sale of loans                               | 24,088     |  | 12,739     
|Loans originated for sale                                 | (34,368)   |  | (10,726)   
|Deferred taxes                                            | (37)       |  | 61         
|Amortization of compensation related to MRP               | 433        |  | 433        
|Cash provided (used) by changes in operating              |            |  |            
|assets and liabilities:                                   |            |  |            
|Accrued interest receivable                               | 201        |  | 179        
|Prepaid expenses and other assets                         | (30)       |  | (105)      
|Accounts payable and other liabilities                    | 318        |  | 8,400      
|                                                          |            |  |            
|Net cash provided (used)  by operating activities         | (5,420)    |  | 15,071     
|                                                          |            |  |            
|INVESTING ACTIVITIES:                                     |            |  |            
|Proceeds from maturities of securities available for sale | 2,030      |  | 15,876     
|Proceeds from maturities of securities held to maturity   | 791        |  | 699        
|Proceeds from sale of securities available for sale       | 20,079     |  | 2,935      
|Purchases of securities available for sale                | (12,673)   |  | (7,035)    
|Loan principal payments                                   | 137,738    |  | 76,661     
|Loans originated or acquired                              | (118,637)  |  | (126,216)  
|Proceeds from sales of reaquired assets and OREO          | 524        |  | -          
|Net additions to premises and equipment                   | (482)      |  | (904)      
|                                                          |            |  |            
|Net cash provided (used) by investing activities          | 29,370     |  | (37,984)   
|                                                          |            |  |            
|FINANCING ACTIVITIES:                                     |            |  |            
|Net increase in deposit accounts                          | 30,973     |  | 15,268     
|Repurchase shares of common stock                         | (3,178)    |  | (27,443)   
|Dividends paid on common stock                            | (1,156)    |  | (1,424)    
|Proceeds from other borrowings                            | -          |  | 2,850      
|Repayment of other borrowings                             | (12,050)   |  | (2,861)    
|Proceeds from Federal Home Loan Bank advances             | 25,850     |  | 60,450     
|Repayments of Federal Home Loan Bank advances             | (34,277)   |  | (36,177)   
|                                                          |            |  |            
|Net cash provided by financing activities                 | 6,162      |  | 10,663     
|                                                          |            |  |            
|NET INCREASE (DECREASE) IN CASH AND                       |            |  |            
|CASH EQUIVALENTS                                          | 30,112     |  | (12,250)   
|                                                          |            |  |            
|CASH AND CASH EQUIVALENTS:                                |            |  |            
|Beginning of quarter                                      | 19,166     |  | 22,383     
|                                                          |            |  |            
|End of quarter                                            | $ 49,278   |  | $  10,133  
|                                                          |            |  |            
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW                     |            |  |            
|INFORMATION:                                              |            |  |            
|Cash paid during the year for:                            |            |  |            
|Interest on deposits                                      | $   6,958  |  | $   8,969  
|Federal income taxes                                      | $   1,320  |  | $   1,140  
|Interest on borrowings                                    | $   3,017  |  | $   2,256  

5

<PAGE>



EverTrust Financial Group, Inc.Notes to Consolidated Financial StatementsSix Months Ended September 30, 2002(Unaudited)

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, 2002 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 six months
ended September 30, 2002 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 19, 2002.

Note 2 -  Recent Events

In May 2002, EverTrust Bank opened a new business and private banking office located in downtown Seattle.  This new
office is intended to expand the Bank's King County presence, especially when coupled with the existing business and
private banking office located in Bellevue and the money management resources available through EverTrust Asset
Management (ETAM).

Note 3 -  Stock Repurchases

In October 2001, the Company announced a seventh repurchase plan of up to 542,977 shares, or 10%, of the Company's
outstanding common stock.  The Company repurchased 31,800 shares during the quarter ended September 30, 2002,
leaving a balance of  109,800 shares to be repurchased under the current plan.  The Company has now repurchased a
total of 4.0 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 312,728 and 139,809, for the three months ended September 30, 2002
and 2001, respectively, and 298,610, and 168,438, for the six months ended September 30, 2002 and 2001, respectively.The large increase in diluted shares for both the three months and six months ended September 30, 2002 compared to
September 30, 2001, is primarily the result of the increase in EverTrust's average stock price from $15.08 to $18.98,
for the three months ended September 30, 2002, and from $14.49 to $18.67, for the six months ended September 30,
2002 .

6

<PAGE>



Note 5 -  Lines of Business

EverTrust manages the business activities of EverTrust Bank's retail division (including ETAM), business banking
group, and MB Cap. The operating results of EverTrust and MB Cap have been included in Other as 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 September 30, 2002**
****
|---------------------------------- | ----------------------------------------------
|                                   |                                               
|                                   |                                               
|                                   | **********The Bank's**                        
|                                   | **********retail**                            
|                                   | **********division**                          
|Condensed income statement:        |                                               
|                                   |                                               
|Net interest income after          |                                               
|provision for loan losses          | $     5,957                                   
|Noninterest income                 | 1,274                                         
|Noninterest expense                | 4,066                                         
|                                   |                                               
|Income before federal income taxes | 3,165                                         
|Income taxes                       | 898                                           
|                                   |                                               
|Net Income                         | $     2,267                                   
|                                   |                                               
|Total assets                       | $   618,065                                   



|                                   | **Three Months Ended September 30, 2001**
****
|---------------------------------- | ----------------------------------------------
|                                   |                                               
|                                   |                                               
|                                   | **********The Bank's**                        
|                                   | **********retail**                            
|                                   | **********division**                          
|Condensed income statement:        |                                               
|                                   |                                               
|Net interest income after          |                                               
|provision for loan losses          | $    5,170                                    
|Noninterest income                 | 554                                           
|Noninterest expense                | 3,743                                         
|                                   |                                               
|Income before federal income taxes | 1,981                                         
|Income taxes                       | 595                                           
|                                   |                                               
|Net Income                         | $     1,386                                   
|                                   |                                               
|Total assets                       | $   568,623                                   

7

<PAGE>







|                                   | **Six Months Ended September 30, 2002**
****
|---------------------------------- | --------------------------------------------
|                                   |                                             
|                                   |                                             
|                                   | **********The Bank's**                      
|                                   | **********retail**                          
|                                   | **********division**                        
|Condensed income statement:        |                                             
|                                   |                                             
|Net interest income after          |                                             
|provision for loan losses          | $   11,947                                  
|Noninterest income                 | 2,309                                       
|Noninterest expense                | 8,075                                       
|                                   |                                             
|Income before federal income taxes | 6,181                                       
|Income taxes                       | 1,754                                       
|                                   |                                             
|Net Income                         | $     4,427                                 
|                                   |                                             
|Total assets                       | $   618,065                                 
|                                   |                                             



|                                    | **Six Months Ended September 30, 2001**
****
|----------------------------------- | --------------------------------------------
|                                    |                                             
|                                    |                                             
|                                    | **********The Bank's**                      
|                                    | **********retail**                          
|                                    | **********division**                        
|Condensed income statement:         |                                             
|                                    |                                             
|Net interest income after           |                                             
|provision for loan losses           | $         10,269                            
|Noninterest income                  | 1,251                                       
|Noninterest expense                 | 7,491                                       
|                                    |                                             
|Income before federal  income taxes | 4,029                                       
|Income taxes                        | 1,217                                       
|                                    |                                             
|Net Income                          | $     2,812                                 
|                                    |                                             
|Total assets                        | $   568,623                                 
|                                    |                                             

8

<PAGE>

Note 6 - Additional Information Regarding Investment Securities

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

|                       |                                    | September 30, 2002 | March 31, 2002 
|---------------------- | ---------------------------------- | ------------------ | ---------------
|                       |                                    | Carrying           | Fair           
|                       |                                    | Value              | Value          
|                       |                                    |                    |                
|Available for sale:    |                                    |                    |                
|Investment securities: |                                    |                    |                
|                       | U.S. Government Agency obligations | $         5,980    | $         6,231
|                       | Corporate obligations              | 4,854              | 4,935          
|                       | Municipal obligations              | 3,281              | 3,326          
|                       | Equity securities                  | 3,152              | 2,440          
|                       | Mortgage-backed securities         | 22,753             | 23,638         
|                       | Total available for sale           | $     40,020       | $    40,570    
|                       |                                    |                    |                
|Held to Maturity:      |                                    |                    |                
|Investment securities: |                                    |                    |                
|                       | U.S. Government Agency obligations | $   1,003          | $   1,125      
|                       | Corporate obligations              | -                  | -              
|                       | Municipal obligations              | 2,647              | 2,730          
|                       | Mortgage-backed securities         | 517                | 550            
|                       | Total held to maturity             | $   4,167          | $   4,405      
|                       |                                    |                    |                
|                       | Total                              | $     44,187       | $    44,975    

Corporate obligations at cost decreased $4.5 million from $9.4 million at March 31, 2002 to $4.9 million at September
30, 2002.   The primary reason for the decrease in the corporate obligation portfolio was due to the sale of
lower credit quality investments in order to enhance the overall quality of the
investment portfolio.  Mortgage-backed securities at cost decreased $5.5 million from $28.3
million at March 31, 2002 to $22.8 million at September 30, 2002. The primary reason for the large decrease in
mortgage-backed securities was due to the sale of  longer term, higher interest rate risk investments. The proceeds from
the sales will be used to purchase investment securities or to fund loan growth in the next several months.

At September 30, 2002 equity securities were comprised of, at cost, $2.1 million ($1.3 million fair value) in common
stock of publicly traded companies and $1.1 million ($1.1 million 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):

|                               | **September 30, 2002****** | **March 31, 2002**   
|------------------------------ | -------------------------- | ---------------------
|                               |                            |                      
|Nonamortizing:                 |                            |                      
|Due within 1 year              | $   17,500                 | $   34,800           
|After 1 year through 2 years   | 18,550                     | 19,400               
|After 2 years through 3 years  | 20,150                     | 17,750               
|After 3 years through 5 years  | 31,200                     | 32,250               
|After 5 years through 10 years | 18,200                     | 21,150               
|After 10 years                 | 2,600                      | 3,300                
|Amortizing:                    |                            |                      
|After 10 years                 | 661                        | 688                  
|                               |                            |                      
|                               | $             108,861      | $             129,338

At September 30, 2002, the Bank had $47.0
million available in unsecured lines of credit with commercial banks compared to
$42.0 million at March 31, 2002.  At September 30, 2002, 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 October of 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting
Standards ("SFAS") No. 147, *"Acquisitions of Certain Financial Institutions,"* allowing financial institutions meeting
certain criteria to reclassify unidentifiable intangible asset balances to goodwill and cease amortization.  Provisions of
the Statement are generally effective as of October 31, 2002.  The adoption of SFAS No. 147 did not materially impact
the Company's consolidated results of operations, financial position, or cash flows.

In June 2002, the FASB issued SFAS No. 146, *"Accounting for Costs Associated with Exit or Disposal Activities"*.
This Statement 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.  Provisions of this Statement are effective for exit or disposal
activities initiated after December 31, 2002.  The adoption of SFAS No. 146 is not expected to materially impact the
Company's consolidated results of operations, financial position, or cash flows.

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 Corrections*".  This Statement 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 lease
provisions of the Statement are effective for transactions after May 15, 2002, with the remaining provisions effective
for financial statements issued after that date.  The adoption of SFAS No. 145 did not materially impact the Company's
consolidated results of operations, financial position, or cash flows.

In October 2001, the  FASB issued  SFAS No. 144, *"Accounting for the Impairment or Disposal of Long-Lived Assets"*, which supercedes
SFAS No. 121, *"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"*.
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. The new Statement is effective for

10

<PAGE>

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 consolidated results of operations, financial position, or cash flows.

In August 2001, the FASB issued SFAS No. 143, *"Accounting for Asset Retirement Obligations"*, which takes 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 will adopt SFAS No. 143 as of April 1, 2003.
The adoption of SFAS No. 143 is not expected to materially impact the Company's consolidated results of operations,
financial position, or cash flows.

In July 2001, the FASB issued SFAS No. 141,
"Accounting for Business Combinations", and SFAS No. 142, "Accounting for Goodwill and Other Intangible Assets", which is 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 does not currently have any goodwill.

**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 12 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 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 multi-family, commercial mortgage and
construction loans, as well as commercial business loans, single family mortgages and consumer loans.

MB Cap is a start-up venture capital company located in Bothell, Washington, which was organized to provide equity
to regionally-based high-technology companies and companies that make medical instruments at the beginning or early
stages of development.  Given the risks inherent in venture capital investing, there can be no assurance that MB Cap
will be successful.  MB Cap has committed to a total investment of $2.3 million.  As of September  30, 2002, MB Cap
has invested $1.9 million.  The book value of the investments at September  30, 2002 was $1.6 million compared to $1.4
million at March 31, 2002.

In March 2001, EverTrust Bank formed ETAM, a Washington chartered trust company, which was capitalized on May
1, 2001.  ETAM is located in downtown Seattle and exercises personal trust powers, with the primary emphasis on
investment management.  A team of highly qualified individuals and firms experienced in trust operations, trust related
legal counsel and regulatory compliance was assembled by EverTrust Bank in connection with the organization of
ETAM. At September 30, 2002, assets under management totaled $82.5****million compared to $55.6 million at March
31, 2002.

11

<PAGE>



Selected Financial Ratios

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

|                                           | Three Months        | Six Months         
|------------------------------------------ | ------------------- | -------------------
|                                           | Ended September 30, | Ended September 30,
|                                           | 2002                | 2001               
|                                           |                     |                    
|*Performance Ratios:*                      |                     |                    
|Return on average assets(1)                | 1.06%               | 0.87%              
|Return on average equity(2)                | 7.80                | 4.65               
|Equity-to-assets ratio(3)                  | 13.60               | 18.72              
|Interest rate spread(4)                    | 3.47                | 3.27               
|Net interest margin(5)                     | 3.96                | 4.21               
|Average interest-earning assets to average |                     |                    
|interest-bearing liabilities               | 123.53              | 125.43             
|Other operating expenses as a percent of   |                     |                    
|nonperforming loans                        | 3.23                | 3.12               
|Efficiency ratio(6)                        | 68.32               | 67.29              
|                                           |                     |                    

____________

|(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-earning 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.

Total assets increased $10.3 million from $675.8 million at March 31, 2002 to $686.1 million at September 30, 2002.  Cash and cash equivalents increased $30.1 million from $19.2 million at March 31, 2002 to $49.3 million at September
30, 2002. The increase in cash will be used in the next several months to fund future growth in the loan portfolio.

The investment portfolio (including Federal Home Loan Bank
stock) decreased $9.9 million, or 16.3%, from $60.8 million at March 31, 2002
to $50.9 million at September 30, 2002. The decrease was due to sales and
maturities, the proceeds of which will also be used to fund growth in the loan
portfolio.

Loans receivable, including loans held for sale, decreased $8.7 million, or 1.5%, from $575.3 million at March 31, 2002
to $566.6 million at September 30, 2002.  The decrease was due primarily to loan repayments, loan participations and
sales made from the multifamily residential portfolio offset in part by growth  in several other areas including $6.8
million in one to four family construction and land development loans, $3.9 million in business loans and $4.6 million
from commercial construction loans. Loans held for sale at September 30, 2002 were $10.9 million compared to
$625,000 at March 31, 2002. The increase in loans held for sale is the result of the Bank's decision to sell $10.2 million
of one to four family residential loans classified as jumbo loans.

12

<PAGE>



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

|                                           | ******September 30, 2002****** | **March 31, 2002**
|------------------------------------------ | ------------------------------ | ------------------
|                                           | ******Amount**                 | **Percent**       
|                                           |                                |                   
|************************      Real estate: |                                |                   
|One to four family residential             | $      40,340                  | 7.1%              
|One to four family construction and        |                                |                   
|land development                           | 44,615                         | 7.8               
|Income property:                           |                                |                   
|Commercial construction                    | 21,664                         | 3.8               
|Commercial real estate                     | 227,916                        | 40.1              
|Multifamily construction                   | 33,621                         | 5.9               
|Multifamily residential                    | 139,637                        | 24.6              
|Consumer:                                  |                                |                   
|Home equity and second mortgages           | 21,944                         | 3.9               
|Credit cards                               | 824                            | 0.1               
|Other installment loans                    | 3,354                          | 0.6               
|Business loans                             | 34,452                         | 6.1               
|                                           |                                |                   
|                                           | 568,367                        | 100.0%            
|Less:                                      |                                |                   
|Deferred loan fees and other               | (3,861)                        |                   
|Reserve for loan losses                    | (8,857)                        |                   
|                                           |                                |                   
|                                           | (12,718)                       |                   
|                                           |                                |                   
|Loans receivable, net                      | $    555,649                   |                   
|                                           |                                |                   
|Loans held for sale                        | $   10,905                     |                   

At September 30, 2002, EverTrust had approximately $5,900 in loans accounted for on a non-accrual basis compared
to approximately $17,000 at March 31, 2002.  Non-accrual loans at September 30, 2002 consist of two installment loans
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 September 30, 2002 (in thousands):

|Allowance for Loan Losses        | Quarter ended
|-------------------------------- | -------------
|                                 | 09/30/02     
|                                 |              
|Allowance at beginning of period | $   8,917    
|Provision for loan losses        | -            
|Charge-offs                      | (60)         
|Recoveries                       | -            
|Balances at end of period        | $   8,857    

13

<PAGE>



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

|                                                  | Three Months        | Six Months         
|------------------------------------------------- | ------------------- | -------------------
|                                                  | Ended September 30, | Ended September 30,
|                                                  | 2002                | 2001               
|                                                  |                     |                    
|*Asset Quality Ratios:*                           |                     |                    
|Nonaccrual and 90 days or more past due           |                     |                    
|loans as a percent of total loans, net            | 0.06%               | 0.35%              
|Nonperforming assets as a percent of total assets | 0.05                | 0.35               
|Allowance for losses as a percent of gross        |                     |                    
|loans receivable                                  | 1.54                | 1.49               
|Allowance for loan losses as a percent of         |                     |                    
|nonperforming loans                               | 2,694.86            | 432.56             
|Net charge-offs (recoveries) to average           |                     |                    
|outstanding loans                                 | 0.01                | 0.01               

Total deposits of EverTrust increased by approximately $31.0 million, or 6.9%, from $449.6 million at March 31, 2002
to $480.6 million at September 30, 2002.  The change is primarily the result of increases in time deposit accounts of
$23.4 million from $241.4 million at March 31, 2002 to $264.8 million at  September 30, 2002 and a $9.9 million
increase in transaction accounts from $65.5 million at March 31, 2002 to $75.4 million at September 30, 2002, partially
offset by decreases in money market accounts of $1.9 million from $130.9 million at March 31, 2002 to $129.0 million
at September 30, 2002.  The increase in deposits from March 31, 2002 to September 30,2002 is generally attributed to
EverTrust Bank's targeted deposit growth marketing, an increased emphasis in
attracting business deposits and
an increased customer preference for a "no-risk" return in the current volatile equities market.

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 September 30, 2002 |         | At March 31, 2002
|-------------------------------------- | --------------------- | ------- | -----------------
|                                       | Amount                | %       |                  
|                                       |                       |         |                  
|Noninterest-bearing accounts           | $    15,416           | 3.2 %   |                  
|Savings accounts                       | 11,362                | 2.4     |                  
|Checking accounts                      | 60,034                | 12.5    |                  
|Money market accounts                  | 128,986               | 26.8    |                  
|                                       |                       |         |                  
|Time deposits by original term:        |                       |         |                  
|One to 11 months                       | 63,301                | 13.2    |                  
|12 to 23 months                        | 94,113                | 19.6    |                  
|24 to 35 months                        | 26,786                | 5.6     |                  
|36 to 59 months                        | 21,774                | 4.5     |                  
|Time deposits maturing after 59 months | 58,812                | 12.2    |                  
|                                       | 264,786               | 55.1    |                  
|Total                                  | $  480,584            | 100.0 % |                  

Federal Home Loan Bank advances and other borrowings decreased $20.4 million from $129.3 million at March 31,
2002 to $108.9 million at September 30, 2002.  The need for borrowings since
Match 31, 2002 has decreased due to an increase in deposit balances and cash
received from loan repayments.

14

<PAGE>



Total equity decreased approximately $477,000 at September 30, 2002 to $92.3 million compared to $92.8 million at
March 31, 2002.  Earnings of $3.4 million for the six months ended September 30, 2002 were more than offset by the
repurchase of shares of the Company's common stock for $3.2 million and dividends paid of $1.2 million.

**Comparison of Operating Results for the Three Months Ended September 30, 2002 and 2001**

General.  Net income increased approximately $472,000 from $1.3 million for the three months ended September 30,
2001 to $1.8 million for the three months ended September 30, 2002.  The increase in income is due primarily to a
$690,000 increase in noninterest income and a $584,000 decrease in interest expense, offset in part by a $705,000
increase in noninterest expenses.

Net Interest Income.  Net interest income increased 4.0% from $6.3 million for the three months ended September 30,
2001 to $6.6 million for the three months ended September 30, 2002.  The change is due primarily to the lower cost of
interest-bearing liabilities.

Interest income decreased approximately $331,000 from $11.9 million for the three months ended September 30, 2001
to $11.5 million for the same period in 2002. The average balance of interest-earning assets increased from $602.1
million for the three months ended September 30, 2001 to $664.7 million for the three months ended September 30,
2002 resulting in an increase of approximately $1.1 million in income.  The yield on interest-earning assets decreased
from 7.89% for the three months ended September 30, 2001 to 6.95% for the same period in 2002 resulting in a decrease
in income of approximately $1.4 million.  Increased balances were due to increased loan volumes, which were funded
by the proceeds received from sales and maturities of securities and increased borrowings.  The decrease in the yield
on interest-earning assets is due primarily to the lower interest rate environment resulting in the payoff of higher rate
loans and downward interest rate adjustments on variable rate loans.

Total interest expense decreased $584,000 from $5.5 million for the three months ended September 30, 2001 to $5.0
million for the same period in 2002.  The average balance of interest-bearing  liabilities increased 18.7% or $89.8
million from $480.0 million at September 30, 2001 to $569.8 million for the three months ended September 30, 2002
resulting in an increase of $1.1 million  in expense.  This increase was offset by an $1.7 million decrease in expense
as a result of a decrease in the rates on interest-bearing liabilities from 4.62% for the three months ended September 30,
2001 to 3.48% for the same period in 2002.  The reduction is due to market interest rate decreases. The average balance
of borrowings comprised 20.7% of interest-bearing liabilities for the quarter ended September 30, 2002 compared to
18.0% for the same period in 2001.

15

<PAGE>



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 (dollars in thousands):

|                                         |                                    | Three Months Ended September 30,
|---------------------------------------- | ---------------------------------- | --------------------------------
|                                         |                                    | 2002                            
|                                         |                                    |                                 
|                                         |                                    | Average                         
|                                         |                                    | Balance                         
|                                         |                                    |                                 
|Interest-earning assets:                 |                                    |                                 
|                                         | Loans receivable, net(1)           | $   583,167                     
|                                         | Investment securities              | 48,231                          
|                                         | Federal Home Loan Bank stock       | 6,036                           
|                                         | Cash and cash equivalents          | 27,286                          
|                                         | Total interest-earning assets      | 664,720                         
|                                         |                                    |                                 
|Noninterest-earning assets               | 15,424                             |                                 
|                                         |                                    |                                 
|                                         | Total average assets               | $   680,144                     
|                                         |                                    |                                 
|Interest-bearing liabilities:            |                                    |                                 
|                                         | Savings accounts                   | $     11,430                    
|                                         | Checking accounts                  | 57,485                          
|                                         | Money market accounts              | 126,968                         
|                                         | Time deposits                      | 255,793                         
|                                         | Total deposits                     | 451,676                         
|                                         | Borrowings                         | 118,075                         
|                                         | Total interest-bearing liabilities | 569,751                         
|                                         |                                    |                                 
|Noninterest-bearing liabilities          | 17,863                             |                                 
|                                         |                                    |                                 
|                                         | Total average liabilities          | 587,614                         
|                                         |                                    |                                 
|Average equity                           | 92,530                             |                                 
|                                         |                                    |                                 
|                                         | Total liabilities and equity       | $  680,144                      
|                                         |                                    |                                 
|Net interest income                      |                                    | $     6,586                     
|Interest rate spread                     |                                    |                                 
|Net interest margin                      |                                    |                                 
|Ratio of average interest-earning assets |                                    |                                 
|to average interest-bearing liabilities  |                                    | 123.53%                         
|                                         |                                    |                                 

Provision for Loan Losses. During
the three months ended September 30, 2002, the provision for loan losses was $0,
compared to $375,000 for the same period in 2001. Management's analysis
indicated that no increase to the allowance was necessary during the three
months ended September 30, 2002, as net loans receivable, including loans held
for sale, during the same time decreased $3.7 million and delinquency ratios
continued to remain low. The allowance for loan losses increased $103,000 from
$8.8 million at March 31, 2002 to $8.9 million at September 30, 2002. The
allowance

16

<PAGE>



for loan losses as a percentage of net loans
(loans receivable excluding allowance for losses) was 1.54% at September 30,
2002 compared to 1.50% at March 31, 2002, and 1.49% at September 30, 2001.

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 $690,000 from $728,000 for the three months ended September
30, 2001 to $1.4 million for the same period in 2002. The large growth in non-interest income was primarily the result
of brokered loan fees from the Bank's commercial mortgage banking group, management fees from ETAM and loan
modification fees totaling $532, 000 for the three months ended September 30, 2002 compared to $69,000
for the three months ended September 30, 2001.

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 transaction and assets under management volume.  The units started
operations in May and June 2001, respectively.

Loan modification fees increased due to
additional increased 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 September 30,
|--------------------------- | --------------------------------
|                            | 2002                            
|                            |                                 
|Brokered loan fees          | $    210                        
|ETAM management fees        | 130                             
|Loan modification fees      | 192                             
|Gain on sale of securities  | 49                              
|Gain on sale of loans       | 161                             
|Service fees and other, net | 676                             
|Total noninterest income    | $  1,418                        

Non-interest
Expense.Non-interest expense increased $705,000 from $4.8 million for the three months ended
September 30, 2001 to $5.5 million for the same period in 2002.  The increase is due primarily to additional salary and
employee benefits of $295,000 from $2.8 million for the three months ended September 30, 2001 to $3.1 million for
the three months ended September 30, 2002.  Compensation expense increased as the result of increased staffing levels
primarily due to the opening of the client contact center and the new business and private banking office located in
Seattle, Washington.  The Company had 182 employees at September 30, 2002 compared to 160 employees at
September 30, 2001.  Occupancy and equipment expenses increased $62,000 from $721,000 for the three months ended
September  30, 2001 to $783,000 for the three months ended September 30, 2002. The increase is primarily due to
expenses associated with the new Seattle office.Information processing costs increased $96,000 from $267,000 for the three
months ended September 30, 2001 to $363,000 for the same period in 2002. The
increase is primarily the result

17

<PAGE>



of additional software
depreciation associated with the addition of the client contact center. Other
expenses increased $252,000 from $1.0 million for the three months ended
September 30, 2001 to $1.2 million for the same period in 2002. The increase is
primarily the result of additional marketing and operating expenses associated
with the new Seattle office and client contact center.

Provision for Income Taxes.  Federal income taxes increased $141,000 from $572,000 for the three months ended
September 30, 2001 to $713,000 for the three months ended September 30, 2002.  The change is due to increased
taxable earnings offset in part by a lower effective tax rate.

Comparison of Operating Results for the Six Months Ended September 30, 2002 and 2001

General.  Net income increased approximately $721,000 from $2.7 million for the six months ended September 30, 2001
to $3.4 million for the six months ended September 30, 2002.  The increase is due primarily to a $1.1 million  increase
in non-interest income and a $875,000 increase in net interest income, offset in part by $1.5 million in additional non-interest expensesdue primarily to the addition of the commercial mortgage banking group in Tacoma, Washington,
the client contact center, ETAM in Seattle and the new business and private banking office located in Seattle,
Washington.

Net Interest Income.  Net interest income increased 7.0% from $12.5 million for the six months ended September 30,
2001 to $13.3 million for the six months ended September 30, 2002.The change is due primarily to the lower cost of
interest bearing liabilities.

Interest income decreased approximately $415,000 from $23.7 million for the six months ended September 30, 2001
to $23.2 million for the same period in 2002.  During this same time period, the average balance of interest-earning
assets increased from $588.7 million for the six months ended September 30, 2001 to $658.5 million for the six months
ended September 30, 2002 resulting in an increase of approximately $2.9 million in income.  The yield on
interest-earning assets decreased from 8.04% for the six months ended September 30, 2001 to 7.06% for the same period
in 2002 resulting in a decrease to income of $3.3 million.  Increased balances were due to increased loan volumes, which
were funded by the proceeds received from sales and maturities of securities and increased borrowings. The decrease
in the yield on interest-earning assets is due primarily to the lower interest rate environment resulting in the payoff of
higher rate loans and downward interest rate adjustments on variable rate loans.

Interest expense decreased  $1.3 million  for the six months ended September 30, 2002 compared to the same period
in 2001.  The average balance of interest-bearing liabilities increased 20.6% or $96.1 million from $468.0 million at
September 30, 2001 to $564.1 million for the six months ended September 30, 2002 resulting in an increase of $2.4
million in expense.  This increase was offset by a $3.7 million decrease in expense as a result of a decrease in the rates
on interest-bearing liabilities from 4.78% for the six months ended September 30, 2001 to 3.51% for the same period
in 2002.  The reduction is due to market interest rate decreases. The average balance of borrowings comprised 21.5%
of interest-bearing liabilities for the six months ended September 30, 2002 compared to 17.4% for the same period in
2001.

Provision for Loan Losses.  During the six months ended September 30, 2002, the provision for loan losses was
$190,000, compared to $625,000 for the same period in 2001, a decrease of  $435,000.  The decrease is attributable to
the reduction of $8.7 million in net loans receivable, including loans held for sale, since March 31, 2002.  The allowance
for loan losses increased $103,000 from $8.8 million at March 31, 2002 to $8.9 million at September 30, 2002.  The
allowance for loan losses as a percentage of net loans (loans receivable excluding allowance for losses) was 1.54% at
September 30, 2002 compared to 1.50% at March 31, 2002, and 1.49% at September 30, 2001.

For additional discussion about the allowance for losses on loans, see "Comparison of Operating Results for the Three
Months Ended September 30, 2002 and 2001- Provision for Loan Losses."

18

<PAGE>



Non-interest Income.  Non-interest income increased $1.1 million to $2.5 million for the six months ended September
30, 2002 compared to the same period in 2001. The large growth in non-interest income was primarily the result of
brokered loan fees from the Bank's commercial mortgage banking group, management fees from ETAM and loan
modification fees totaling $906,000 for the six months ended September 30, 2002 compared to $109,000
for the six months ended September 30, 2001.

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 transaction and assets under management volume.  The units started
operations in May and June 2001, respectively.

Loan modification fees increased due to
additional increased 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):

|                            | Six Months Ended September 30,
|--------------------------- | ------------------------------
|                            | 2002                          
|                            |                               
|Brokered loan fees          | $      328                    
|ETAM management fees        | 252                           
|Loan modification fees      | 326                           
|Gain on sale of securities  | 49                            
|Gain on sale of loans       | 298                           
|Service fees and other, net | 1,289                         
|Total noninterest income    | $ 2,542                       

Non-interest Expense.Non-interest expense increased $1.5 million from $9.4 million for the six months ended
September 30, 2001 to $10.9 million for the same period in 2002. The increase is due primarily to additional salary and
employee benefits of $694,000 from $5.5 million for the three months ended September 30, 2001 to $6.1 million for
the six  months ended September 30, 2002.  Compensation expense increased as the result of increased staffing levels
primarily due to the addition of the Bank's commercial mortgage banking group, the contact center and the new business
and private banking office located in Seattle, Washington.  Occupancy and equipment expenses increased $154,000
from $1.4 million for the six months ended September  30, 2001 to $1.6 million for the six months ended September
30, 2002. The increase is primarily due to expenses associated with the new offices.Other expenses increased $450,000
from $2.0 million for the six months ended September 30, 2001 to $2.4 million for the same period in 2002. The
increase is primarily the result of additional marketing and  operating expenses associated with the two (Tacoma and
Seattle) new offices and the client contact center.

Provision for Income Taxes.  Federal income taxes increased $187,000 from $1.2 million for the six months ended
September 30, 2001 to $1.4 million for the six months ended September 30, 2002.  The change is due to increased
taxable earnings offset in part by a lower effective tax rate.

19

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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 (dollars in thousands):

|                                   |                                    | Six Months Ended September 30,
|---------------------------------- | ---------------------------------- | ------------------------------
|                                   |                                    | 2002                          
|                                   |                                    |                               
|                                   |                                    | Average                       
|                                   |                                    | Balance                       
|                                   |                                    |                               
|Interest-earning assets:           |                                    |                               
|                                   | Loans receivable, net(1)           | $   585,458                   
|                                   | Investment securities              | 51,673                        
|                                   | Federal Home Loan Bank stock       | 5,992                         
|                                   | Cash and cash equivalents          | 15,407                        
|                                   | Total interest-earning assets      | 658,530                       
|                                   |                                    |                               
|Noninterest-earning assets         | 14,437                             |                               
|                                   |                                    |                               
|                                   | Total average assets               | $   672,967                   
|                                   |                                    |                               
|Interest-bearing liabilities:      |                                    |                               
|                                   | Savings accounts                   | $   11,323                    
|                                   | Checking accounts                  | 54,519                        
|                                   | Money market accounts              | 127,628                       
|                                   | Time deposits                      | 249,202                       
|                                   | Total deposits                     | 442,672                       
|                                   | Borrowings                         | 121,474                       
|                                   | Total interest-bearing liabilities | 564,146                       
|                                   |                                    |                               
|Noninterest-bearing liabilities    | 16,247                             |                               
|                                   |                                    |                               
|                                   | Total average liabilities          | 580,393                       
|                                   |                                    |                               
|Average equity                     | 92,574                             |                               
|                                   |                                    |                               
|                                   | Total liabilities and equity       | $  672,967                    
|                                   |                                    |                               
|Net interest income                |                                    | $     13,337                  
|Interest rate spread               |                                    |                               
|Net interest margin                |                                    |                               
|Ratio of average interest-earning  |                                    |                               
|assets to average interest-bearing |                                    |                               
|liabilities                        |                                    | 116.73%                       









20

<PAGE>



**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 one-to-four
family mortgage loans.  A secondary, but increasing activity of the Company is the origination of business loans.
During the three months ended September 30, 2002, the Company funded $72.3 million in new loans. In addition,
during this three month period, funds were used to repurchase shares of the Company's common stock for $581,000 and
to pay a cash dividend to shareholders totaling $574,000.  These activities were funded by loan repayments, proceeds
from the sales and maturities of investment securities and proceeds from Federal Home Loan Bank advances and other
borrowings.

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             
|September 30, 2002:                       |          |                   |                    
|Total capital to risk-weighed assets      | $ 98,185 | 17.5%             | $ 44,885           
|Tier 1 capital to risk-weighted assets    | $ 91,233 | 16.2%             | $ 22,527           
|Tier 1 leverage capital to average assets | $ 91,233 | 13.4%             | $ 27,234           

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.

21

<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 short-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 a $1.0 million fair value hedge in place at September 30, 2002.  The hedge is scheduled to settle by
the quarter ending December 31, 2002 and the Company expects minimal risk associated with the hedge. 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 September 30, 2002, 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.

22

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**Part II - Other Information**

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

**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

3.1        Articles of Incorporation of the Registrant (1)3.2        Bylaws of the Registrant (1)10.1      401(k) Employee Savings and Profit Sharing Plan and Trust (1)10.2      Employee Severance Compensation Plan (2)10.3      Employee Stock Ownership Plan (1)10.4      Employment Agreement with Michael B. Hansen (2)10.5      Employment Agreement with Michael R. Deller (2)10.6      Employment Agreement with Jeffrey R. Mitchell (2)10.7      2000 Stock Option Plan (3)10.8      2000 Management Recognition Plan (3)99.1      Certification Pursuant to Section 906 of the Sarbanes Oxley Act

______________(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.

(b)  Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended September 30, 2002.

23

<PAGE>



**Signatures**

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.

November 5, 2002                                                                                      
/s/ Michael B. HansenMichael B. HansenPresident and Chief Executive Officer(Principal Executive Officer)November 5, 2002                                                                                       
/s/ Jeffrey R. MitchellJeffrey R. MitchellChief Financial Officer(Principal Financial and Accounting Officer)

24

<PAGE>



**Certification Required****by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934**

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 quarterly 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 quarterly report;                                                           
|  
|3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly
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 quarterly report;                                                                              
|  
|4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                                                                                
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                       
|  
|5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
equivalent function):                                                                                                                                           
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                       
|  
|6. | The registrant's other certifying officers and I have indicated in this quarterly report whether or not there
were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.

Date: November 5, 2002

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

25

<PAGE>



**Certification Required****by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934**

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 quarterly 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 quarterly report;                                                           
|  
|3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly
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 quarterly report;                                                                              
|  
|4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                                                                                
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                       
|  
|5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
equivalent function):                                                                                                                                           
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                       
|  
|6. | The registrant's other certifying officers and I have indicated in this quarterly report whether or not there
were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.

Date: November 5, 2002

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

26

<PAGE>









<PAGE>



|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. MitchellMichael B. Hansen                                                                                     Jeffrey R. MitchellChief Executive Officer                                                                              Chief Financial Officer

Dated: November 5, 2002

<PAGE>