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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(MARK ONE)


|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2002


|   | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from______ to______

Commission file number: 0-23322

CASCADE BANCORP
(Exact name of Registrant as specified in its charter)


Oregon
(State or other jurisdiction of
incorporation or organization)		 93-1034484
(I.R.S. Employer Identification No.)

1100 NW Wall Street
Bend, Oregon 97701
(Address of principal executive offices)
(Zip Code)

(541) 385-6205
(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 |_|

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. 12,511,316 shares of no par value Common Stock on November 8, 2002.


CASCADE BANCORP & SUBSIDIARIES
FORM 10-Q
QUARTERLY REPORT
SEPTEMBER 30, 2002

INDEX

PART I: FINANCIAL INFORMATION Page

Condensed Consolidated Balance Sheets
               as of September 30, 2002 and December 31, 2001		   3

Condensed Consolidated Statements of Income
               for the nine months and three months ended September 30, 2002 and 2001		   4

Condensed Consolidated Statements of Changes in Stockholders’ Equity
               for the nine months ended September 30, 2002 and 2001		   5

Condensed Consolidated Statements of Cash Flows
               for the nine months ended September 30, 2002 and 2001		   6

Notes to Condensed Consolidated Financial Statements   7

Management’s Discussion and Analysis of Financial Condition
              and Results of Operations		 12

PART II: OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K 16

Signatures 17

2

Cascade Bancorp & Subsidiaries
Condensed Consolidated Balance Sheets
September 30, 2002 and December 31, 2001
 (Unaudited)

  2002
   2001
  
ASSETS            
Cash and cash equivalents:    
      Cash and due from banks     $ 23,710,871   $ 21,439,301  
      Federal funds sold       36,000,000     —  
 
 
 
            Total cash and cash equivalents       59,710,871     21,439,301  
Investment securities available-for-sale       30,236,303     24,942,532  
Investment securities held-to-maturity       2,928,400     2,987,454  
Loans, net       469,507,822     415,149,887  
Premises and equipment, net       9,673,095     9,289,825  
Accrued interest and other assets       16,087,639     14,944,113  
 
 
 
                 Total assets     $ 588,144,130   $ 488,753,112  
 
 
 
 
LIABILITIES & STOCKHOLDERS’ EQUITY    
Liabilities:    
      Deposits:    
            Demand     $ 221,551,717   $ 162,675,615  
            Interest bearing demand       203,894,969     175,388,609  
            Savings       23,595,230     18,252,631  
            Time       53,150,239     68,940,774  
 
 
 
                 Total deposits       502,192,155     425,257,629  
      Borrowings       30,972,048     15,350,000  
      Accrued interest and other liabilities       6,307,388     6,465,413  
 
 
 
                 Total liabilities       539,471,591     447,073,042  
 
Stockholders’ equity:    
      Common stock, no par value;    
            20,000,000 shares authorized;    
            12,496,464 issued and outstanding (12,411,490 in 2001)       18,158,143     17,859,283  
      Retained earnings       29,806,105     23,701,571  
      Accumulated other comprehensive income       708,291     119,216  
 
 
 
                 Total stockholders’ equity       48,672,539     41,680,070  
 
 
 
                 Total liabilities and stockholders’ equity     $ 588,144,130   $ 488,753,112  
 
 
 

See accompanying notes.

3

Cascade Bancorp & Subsidiaries
Condensed Consolidated Statements of Income
Nine Months and Three Months ended September 30, 2002 and 2001
 (Unaudited)

  Nine months ended
September 30,		   Three months ended
September 30,		  
  2002
   2001
   2002
   2001
  
Interest income:                    
      Interest and fees on loans     $ 27,226,757   $ 27,811,923   $ 9,426,197   $ 9,470,244  
      Taxable interest on investments       875,538     1,003,645     285,458     315,110  
      Nontaxable interest on investments       28,207     28,487     8,500     9,718  
      Interest on federal funds sold       44,936     46,953     41,668     20,098  
 
 
 
 
 
              Total interest income       28,175,438     28,891,008     9,761,823     9,815,170  
 
Interest expense:    
      Deposits:    
          Interest bearing demand       1,746,445     3,450,944     586,198     959,343  
          Savings       114,781     213,156     41,822     50,866  
          Time       1,359,281     2,837,605     388,794     897,115  
      Borrowings       413,314     780,113     157,917     130,624  
 
 
 
 
 
              Total interest expense       3,633,821     7,281,818     1,174,731     2,037,948  
 
 
 
 
 
 
Net interest income       24,541,617     21,609,190     8,587,092     7,777,222  
Loan loss provision       2,280,000     2,815,000     450,000     1,100,000  
 
 
 
 
 
Net interest income after loan loss provision       22,261,617     18,794,190     8,137,092     6,677,222  
 
Noninterest income:    
      Service charges on deposit accounts       3,157,855     2,255,279     1,068,369     825,651  
      Mortgage loan origination and processing fees       1,833,607     1,603,817     596,303     630,634  
      Gains on sales of mortgage loans, net       650,166     275,603     332,176     153,962  
      Mortgage loan servicing fees (net of    
          amortization of mortgage servicing rights and    
              impairment, if any)       (554,366 )   (187,821 )   (481,392 )   (94,191 )
      Gains (losses) on sale of investment securities    
          available-for-sale       6,664     (12,554 )   6,664     14,978  
      Other income       1,889,538     1,685,747     687,696     620,410  
 
 
 
 
 
              Total noninterest income       6,983,464     5,620,071     2,209,816     2,151,444  
 
Noninterest expense:    
      Salaries and employee benefits       9,109,332     8,286,651     3,111,713     2,962,567  
      Net occupancy and equipment       1,734,961     1,587,507     591,512     532,866  
      Other expenses       4,515,144     4,271,837     1,521,335     1,569,262  
 
 
 
 
 
              Total noninterest expense       15,359,437     14,145,995     5,224,560     5,064,695  
 
 
 
 
 
 
Income before income taxes       13,885,644     10,268,266     5,122,348     3,763,971  
Provision for income taxes       5,412,517     3,998,029     1,998,138     1,464,296  
 
 
 
 
 
Net income     $ 8,473,127   $ 6,270,237   $ 3,124,210   $ 2,299,675  
 
 
 
 
 
 
Basic net income per common share     $ 0.68   $ 0.51   $ 0.25   $ 0.19  
 
 
 
 
 
Diluted net income per common share     $ 0.66   $ 0.50   $ 0.24   $ 0.18  
 
 
 
 
 

See accompanying notes.

4

Cascade Bancorp & Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity
Nine Months Ended September 30, 2002 and 2001
 (Unaudited)

Comprehensive
Income
  Common
stock
  Retained
earnings
  Accumulated
other
comprehensive
income (loss)
  Total
stockholders’
equity
 
Balance at December 31, 2000           $ 17,768,806   $ 17,583,393   $ (370,746 ) $ 34,981,453  
Comprehensive Income:    
      Net Income     $ 6,270,237     —     6,270,237     —     6,270,237  
      Other comprehensive income, net of tax:    
            Unrealized gains on    
            securities available-for-sale       687,455     —     —     687,455     687,455  
      Reclassification adjustment for    
            net losses on sale of securities    
            included in net income       7,650     —     —     7,650     7,650  
 
 
Comprehensive income     $ 6,965,342  
 
 
 
Cash dividends paid             —     (1,901,634 )   —     (1,901,634 )
 
Stock options exercised (27,699 shares)             90,478     —     —     90,478  
 
 
 
 
 
Balance at September 30, 2001           $ 17,859,284   $ 21,951,996   $ 324,359   $ 40,135,639  
 
 
 
 
 
 
Balance at December 31, 2001           $ 17,859,283   $ 23,701,571   $ 119,216   $ 41,680,070  
Comprehensive Income:    
      Net Income     $ 8,473,127     —     8,473,127     —     8,473,127  
      Other comprehensive income, net of tax:    
            Unrealized gains on securities    
                  available-for-sale       593,140     —     —     593,140     593,140  
      Reclassification adjustment for    
            net gains on sale of securities    
            included in net income       (4,065 )   —     —     (4,065 )   (4,065 )
 
 
Comprehensive income     $ 9,062,202  
 
 
 
Cash dividends paid             —     (2,368,593 )   —     (2,368,593 )
 
Stock options exercised (84,974 shares)             298,860     —     —     298,860  
 
 
 
 
 
Balance at September 30, 2002           $ 18,158,143   $ 29,806,105   $