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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

Form 10-Q

[X]

Quarterly report pursuant to section 13 or 15(d) of the Securities and Exchange act of 1934
For the quarter ended September 30, 2002

[  ]

Transition report pursuant to section 13 or 15(d) of the Securities and Exchange act of 1934
For the transition period from ________ to ________

Commission file number 0-23881

COWLITZ BANCORPORATION
(Exact name of registrant as specified in its charter)

Washington
Sate or other jurisdiction of
incorporation or organization

91-1529841
(IRS Employer Identification No.)

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes   X   No _____

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

Common Stock, no par value on October 31, 2002: 3,805,772 shares

 

1

 

COWLITZ BANCORPORATION
TABLE OF CONTENTS
   

PAGE

Part I

FINANCIAL INFORMATION

  

Item 1.

Financial Statements

Consolidated Statements of Condition -
     September 30, 2002 and December 31, 2001

3

Consolidated Statements of Operations -
     Three and nine months ended September 30, 2002 and September 30, 2001

4

Consolidated Statements of Changes in Shareholders' Equity -
     Year ended December 31, 2001 and nine months ended September 30, 2002

5

Consolidated Statements of Cash Flows -
     Nine months ended September 30, 2002 and September 30, 2001

6
 

Notes to Consolidated Financial Statements

 

7-15

Item 2.

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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

30

Item 4.

Controls and Procedures

 

30

Part II

OTHER INFORMATION

  

Item 5.

Submission of Matters to a Vote of Security Holders

30

Item 6.

Exhibits and Reports on Form 8-K

30
 

Signatures

31
 

Certification of Chief Executive Officer and Chief Financial Officer

32-34

 

2

 

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

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

 

(unaudited)      September 30, 2002     December 31, 2001
ASSETS             
Cash and cash equivalents  $ 44,193    $ 50,171 
Investment securities:           
  Investments available-for-sale (at fair value, cost of $39,494 and          
    $30,172 at September 30, 2002 and December 31, 2001, respectively)   40,038      30,188 
  Investments held-to-maturity (at amortized cost, fair value of $2,099 and           
    $4,157 at September 30, 2002 and December 31, 2001, respectively)   2,081      4,115 
    Total investment securities   42,119      34,303 
               
Federal Home Loan Bank stock, at cost    2,364      3,531 
               
Loans held for sale    49,146      37,322 
               
Loans, net of deferred loan fees   215,266      231,921 
Allowance for loan losses    (5,763)     (5,710)
  Loans, net    209,503      226,211 
Premises and equipment, net of accumulated depreciation of $4,443 and           
  $4,029 at September 30, 2002 and December 31, 2001, respectively   4,484      5,221 
Goodwill      2,352      3,560 
Intangible assets, net of accumulated amortization of $1,402 and            
  $1,203 at September 30, 2002 and December 31, 2001, respectively    568      767 
Accrued interest receivable and other assets    6,884      5,929 
    Total assets from operations   361,613      367,015 
    Net assets from discontinued operations   -      3,248 
    Total assets $
361,613 
  $
370,263 
LIABILITIES             
Deposits:             
  Non-interest-bearing demand  $ 50,397    $ 43,225 
  Savings and interest-bearing demand    122,909      96,587 
  Certificates of deposit    132,716      175,678 
  Total deposits    306,022      315,490 
Short-term borrowings    2,750      2,750 
Long-term borrowings    18,782      19,009 
Accrued interest payable and other liabilities    3,237      4,266 
    Total liabilities   330,791      341,515 
               
SHAREHOLDERS' EQUITY           
Preferred stock, no par value; 5,000,000 shares authorized, no shares issued and           
  outstanding at September 30, 2002 and December 31, 2001   -      - 
Common stock, no par value; 25,000,000 authorized, 3,804,172 and 3,692,560 shares           
  issued and outstanding at September 30, 2002 and December 31, 2001, respectively   17,425      16,802 
Additional paid-in capital    1,538      1,538 
Retained earnings      11,500      10,398 
Accumulated other comprehensive income, net of taxes    359      10 
  Total shareholders' equity    30,822      28,748 
  Total liabilities and shareholders' equity  $
361,613 
  $
370,263 
               
The accompanying notes are an integral part of these statements.           
               

 

3

 

COWLITZ BANCORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of dollars, except per share amounts)

 

      Three months ended September 30,     Nine months ended September 30,
      2002     2001     2002     2001
(unaudited)                       
INTEREST INCOME                       
  Interest and fees on loans $ 4,830    $ 6,041    $ 14,651    $ 18,085 
  Interest on taxable investment securities   441      413      1,324      752 
  Interest on non-taxable investment securities   4      2      11      6 
  Other interest and dividend income   155      271      563      897 
  Total interest income   5,430      6,727      16,549      19,740 
                         
INTEREST EXPENSE                       
  Savings and interest-bearing demand   475      718      1,312      2,094 
  Certificates of deposit   1,320      2,485      4,755      7,187 
  Short-term borrowings   12      31      36      94 
  Long-term borrowings   235      306      706      1,007 
  Total interest expense   2,042      3,540      6,809      10,382 
                         
  Net interest income before provision for loan losses   3,388      3,187      9,740      9,358 
                         
PROVISION FOR LOAN LOSSES    352      2,095      1,007      2,622 
  Net interest income after provision for loan losses   3,036      1,092      8,733      6,736 
                         
NON-INTEREST INCOME                       
  Service charges on deposit accounts   191      187      540      560 
  Gains on loans sold   1,323      1,047      3,495      3,076 
  Escrow fees   311      184      726      574 
  Fiduciary income   63      74      205      194 
  Credit card income   142      119      399      397 
  Brokerage Fees   858      565      2,169      1,509 
  Gain on sale of subsidiary   -      -      423      - 
  Net losses on sale of repossessed assets   (42)     (497)     (21)     (479)
  Other income   78      59      184      123 
  Net gains on sales of available-for-sale securities