Washington		91-1857900
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
201 Fifth Avenue SW, Olympia, WA		98501
(Address of principal executive office)		(ZIP Code)
(360) 943-1500
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

PART I.		Financial Information
Item 1.		Condensed Consolidated Financial Statements (Unaudited):		Page
		Condensed Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2001 and 2002		3
		Condensed Consolidated Statements of Financial Condition As of December 31, 2001 and June 30, 2002		4
		Condensed Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2002 and Comprehensive Income for the Three and Six Months Ended June 30, 2001 and 2002		5
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2001 and 2002		6
		Notes to Condensed Consolidated Financial Statements		7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		18
PART II.		Other Information
Item 4.		Submission of Matters to a Vote of Security Holders		19
Item 6.		Exhibits and Reports on Form 8-K		19
		Signatures		20

		Three Months Ended June 30,						Six Months Ended June 30,
		2001			2002			2001			2002
INTEREST INCOME:
Loans		$	10,923		$	9,575		$	22,044		$	19,234
Investment securities and FHLB dividends			370			542			915			1,044
Interest bearing deposits and Fed funds sold			152			104			193			247
Total interest income			11,445			10,221			23,152			20,525
INTEREST EXPENSE:
Deposits			4,739			2,603			9,888			5,483
Borrowed funds			209			7			570			70
Total interest expense			4,948			2,610			10,458			5,553
Net interest income			6,497			7,611			12,694			14,972
PROVISION FOR LOAN LOSSES			240			539			518			845
Net interest income after provision for loan loss			6,257			7,072			12,176			14,127
NONINTEREST INCOME:
Gains on sales of loans			427			259			791			535
OREO income			—			26			—			26
Service charges on deposits			457			589			843			1,126
Rental income			67			63			133			132
Merchant visa income			227			312			403			591
Other income			185			235			618			466
Total noninterest income			1,363			1,484			2,788			2,876
NONINTEREST EXPENSE:
Salaries and employee benefits			2,696			2,585			5,411			5,172
Building occupancy			838			847			1,637			1,749
Data processing			260			280			522			529
Marketing			112			141			193			240
Office supplies and printing			96			107			202			215
Goodwill amortization			145			—			289			—
Merchant visa			187			255			327			475
Other			1,279			932			2,211			1,753
Total noninterest expense			5,613			5,147			10,792			10,133
Income before federal income taxes			2,007			3,409			4,172			6,870
Federal income taxes			723			1,152			1,499			2,320
Net income		$	1,284		$	2,257		$	2,673		$	4,550
Earnings per share:
Basic		$	0.161		$	0.306		$	0.331		$	0.611
Diluted		$	0.158		$	0.297		$	0.324		$	0.597

		December 31, 2001				June 30,     2002
Assets
Cash on hand and in banks		$	24,465			$	22,905
Interest earning deposits			21,311				6,804
Federal funds sold			5,000				5,500
Investment securities available for sale			26,479				39,964
Investment securities held to maturity			3,703				3,302
Loans held for sale			6,275				4,761
Loans receivable			492,430				475,396
Less: Allowance for loan losses			(5,751	)			(6,364	)
Loans receivable, net			486,679				469,032
Other real estate owned			1,269				496
Premises and equipment, net			18,984				18,236
Federal Home Loan Bank and Federal Reserve stock, at cost			2,911				2,999
Accrued interest receivable			3,196				3,079
Prepaid expenses and other assets			2,731				3,618
Goodwill			6,640				6,640
Total assets		$	609,643			$	587,336
Liabilities and Stockholders’ Equity
Deposits		$	515,080			$	504,850
Advances from Federal Home Loan Bank			8,000				1,000
Advance payments by borrowers for taxes and insurance			49				39
Accrued expenses and other liabilities			7,390				4,645
Deferred federal income taxes			596				689
Total liabilities			531,115				511,223
Stockholders’ equity:
Common stock, no par value per share,15,000,000 shares authorized; 7,534,232 and 7,225,379 shares outstanding at December 31, 2001 and June 30, 2002, respectively			45,686				40,225
Unearned compensation—ESOP			(975	)			(932	)
Retained earnings, substantially restricted			33,775				36,597
Accumulated other comprehensive income			42				223
Total stockholders’ equity			78,528				76,113
Commitments and contingencies			—				—
Total liabilities and stockholders’ equity		$	609,643			$	587,336

		Number of common shares			Common stock				Unearned Compensation- ESOP				Retained earnings				Accumulated other comprehensive income			Total stockholders’ equity
Balance at December 31, 2001		7,534			$	45,686			$	(975	)		$	33,775			$	42		$	78,528
Earned ESOP shares		4				16				43				—				—			59
Stock repurchase		(389	)			(5,815	)			—				—				—			(5,815	)
Exercise of stock options and issuance of restricted stock awards		76				338				—				—				—			338
Net income		—				—				—				4,550				—			4,550
Increase in unrealized gain on securities available for sale, net of tax		—				—				—				—				181			181
Cash dividend declared		—				—				—				(1,728	)	&n