UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-QSB

(Mark One)

¨     Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended                                                                                           .

x     Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from 1/1/03 to 3/31/03.

Commission file number 0-24151

NORTHWEST BANCORPORATION, INC.

(Exact name of small business issuer as specified in its charter)

Washington (State or other jurisdiction of incorporation or organization) 91-1574174 (I.R.S. Employer identification No.)

421 West Riverside, Spokane, WA 99201-0403

(Address of principal executive offices)

(509) 456-8888

(Issuer’s telephone number, including area code)

APPLICABLE ONLY TO CORPORATE ISSUERS

The Registrant has a single class of common stock, of which there are 1,808,204 shares issued and outstanding as of March 31, 2003.

Transitional Small Business Disclosure Format:

Yes  x         No  ¨

TABLE OF CONTENTS

		Page
Part I	Financial Information
Item 1.	Financial Statements
	Consolidated Statements of Condition—March 31, 2003 and December 31, 2002	3
	Consolidated Statements of Income—Three months, year-to-date, ended March 31, 2003 and 2002	4
	Consolidated Statements of Cash Flow—year-to-date ended March 31, 2003 and 2002	5
	Consolidated Statements of Stockholders’ Equity as of March 31, 2003 and 2002	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis or Plan of Operation	10
Item 3.	Controls and Procedures	10
Part II	Other Information
Item 6.	Exhibits and Reports on Form 8-K	10
Signatures		11
Certifications		12

2

PART I     FINANCIAL INFORMATION

Item 1.     Financial Statements

NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CONDITION

March 31, 2003 and December 31, 2002

($ in thousands)

	March 31, 2003		December 31, 2002
Assets
Cash and due from banks	$	8,733	$	10,233
Federal funds sold/FHLB interest bearing balances		14,342		594
Securities held-to-maturity (Note 2)		2,099		1,938
Securities available-for-sale (Note 2)		42,238		52,312
Federal Home Loan Bank stock, at cost		602		592
Loans, net of allowance for loan losses of $2,172 in 2003 and $2,026 in 2002 (Notes 3 & 4)		135,182		135,024
Loans held for sale		2,895		664
Accrued interest receivable		1,032		1,063
Premises and equipment, net		3,462		3,566
Foreclosed real estate		1,953		1,112
Other assets		1,977		2,046
TOTAL ASSETS	$	214,515	$	209,144
Liabilities
Noninterest bearing demand deposits	$	33,328	$	31,519
Money Market accounts		51,002		46,821
NOW accounts		14,191		13,737
Savings accounts		5,182		4,810
Time Certificates of Deposit, $100,000 and over		22,909		23,211
Time Certificates of Deposit, under $100,000		44,717		45,959
TOTAL DEPOSITS		171,329		166,057
Securities sold under agreement to repurchase		18,367		17,970
Borrowed funds, Federal Home Loan Bank (Note 5)		5,892		6,587
Dividend payable (Note 6)		181		0
Accrued interest payable and other liabilities		1,232		1,149
TOTAL OTHER LIABILITIES		25,672		25,706
TOTAL DEPOSITS & LIABILITIES		197,001		191,763
Stockholders’ Equity
Common stock, no par, 5,000,000 shares authorized; issued and outstanding 1,808,204 on March 31, 2003 and 1,808,335 on December 31, 2002 (Note 6)		14,324		14,325
Retained earnings		2,465		2,272
Accumulated other comprehensive income, net of tax of $374 for 2003 and $404 for 2002		725		784
TOTAL STOCKHOLDERS’ EQUITY		17,514		17,381
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	214,515	$	209,144

The accompanying Notes are an integral part of these condensed financial statements.

3

NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

Three months, year-to-date, ended March 31, 2003 and 2002

($ in thousands, except number of shares and per share information)

	Quarter Ended March 31,
	2003		2002
Interest Income
Interest and fees on loans	$	2,354	$	2,501
Interest on securities		578		598
Interest on federal funds sold		24		12
TOTAL INTEREST INCOME		2,956		3,111
Interest Expense
Interest on deposits		730		811
Interest on securities sold under agreement to repurchase		30		58
Interest on borrowed funds		78		69
TOTAL INTEREST EXPENSE		838		938
NET INTEREST INCOME		2,118		2,173
Provision for loan losses		225		270
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		1,893		1,903
Noninterest Income
Fees and service charges		244		226
Net gain from sale of loans		161		107
Other noninterest income		159		99
TOTAL NONINTEREST INCOME		564		432
Noninterest Expense
Salaries and employee benefits		1,150		1,084
Occupancy/FF&E expense		185		190
Depreciation and amortization expense		120		120
Other operating expense		458		444
TOTAL NONINTEREST EXPENSE		1,913		1,838
INCOME BEFORE TAXES		544		497
Income tax expense		170		169
NET INCOME	$	374	$	328
Weighted average shares outstanding (Note 6)		1,808,223		1,805,641
Basic earnings per share	$	0.21	$	0.18
Weighted average shares outstanding (Note 6)		1,808,223		1,805,641
Effect of dilutive securities		3,614		894
Weighted average shares outstanding, adjusted for dilutive securities		1,811,837		1,806,535
Earnings per share assuming full dilution	$	0.21	$	0.18

The accompanying Notes are an integral part of these condensed financial statements.

4

NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOW

Year-to-date ended March 31, 2003 and 2002

($ in thousands)

	Year-to-date
	2003			2002
Net income	$	374		$	328
Adjustments to reconcile net income to cash provided by operating activities:
Provision for loan losses		225			270
Depreciation and amortization		120			120
(Increase)/decrease in assets and liabilities:
Accrued interest receivable		31			36
Other assets		98			185
Accrued interest payable & other liabilities		83			266
NET CASH PROVIDED BY OPERATING ACTIVITIES		931			1,205
Cash flows from investing activities:
Net (increase)/decrease in federal funds sold		(13,748	)		(4	)
Net (increase)/decrease in investment securities		9,815			2,312
Net (increase)/decrease in loans		(383	)		(1,880	)
Net (increase)/decrease in loans held for sale		(2,231	)		38
Purchase of premises and equipment net of gain or loss on asset disposal		(16	)		(600	)
Foreclosed real estate activity (net)		(841	)		(723	)
NET CASH PROVIDED/(USED) BY INVESTING ACTIVITIES		(7,404	)		(858	)
Cash flows from financing activities:
Net increase/(decrease) in deposits		5,272			(6,906	)
Net increase/(decrease) in securities sold under agreement to repurchase		397			253
Net proceeds/(payments) from borrowed funds		(695	)		4,464
Cash received from stock sales (net)		(1	)		(9	)
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES		4,973			(2,198	)
Net increase/(decrease) in cash and cash equivalents		(1,500	)		(1,851	)
Cash and due from banks, beginning of year	$	10,233			8,710
CASH AND DUE FROM BANKS, END OF QUARTER	$	8,733		$	6,859

The accompanying Notes are an integral part of these condensed financial statements.

5

NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

In Actual Dollars

	Total			Common Stock			Retained Earnings			Accumulated Comprehensive Income			Comprehensive Income
As of March 31, 2003
Balance, December 31, 2001	$	15,578,705		$	13,495,186		$	1,666,961		$	416,558
Net income 2002		1,418,702						1,418,702					$	1,418,702
Unrealized gains on available for sale securities		367,067									367,067			367,067
Comprehensive income														1,785,769
Proceeds from issuance of common stock		27,802			27,802
Repurchase of common stock		(9,161	)		(9,161	)
Fractional shares, issued in cash		(2,289	)					(2,289	)
Transfers		0			811,462			(811,462	)
Balance December 31, 2002		17,380,826			14,325,289			2,271,912			783,625
Net income, 2003, year-to-date		373,752						373,752						373,752
Unrealized losses on available for sale securities		(58,535	)								(58,535	)		(58,535	)
Comprehensive income													$	315,217
Dividend declared & payable April 4, 2003		(180,820	)					(180,820	)
Repurchase of common stock		(1,241	)		(1,241	)
Balance, end-of-quarter, March 31, 2003	$	17,513,982		$	14,324,048		$	2,464,844		$	725,090
Disclosure of 2003 reclassification amount:
Unrealized holding loss during period	$	(26,052	)
Less reclassification adjustment for gains reported in net income		32,483
Net unrealized loss on securities	$	(58,535	)
As of March 31, 2002
Balance, December 31, 2000	$	14,335,792		$	12,836,358		$	1,308,515		$	190,919
Net income 2001		1,188,815						1,188,815					$	1,188,815
Unrealized gains on available for sale securities		225,639									225,639			225,639
Comprehensive income														1,414,454
Proceeds from issuance of common stock		52,360			52,360
Repurchase of common stock		(221,532	)		(221,532	)
Fractional shares, issued in cash		(2,369	)					(2,369	)
Transfers		0			828,000			(828,000	)
Balance December 31, 2001		15,578,705			13,495,186			1,666,961			416,558
Net income, 2002, year-to-date		328,241						328,241						328,241
Unrealized gains on available for sale securities		111,060									111,060			111,060
Comprehensive income													$	439,301
Repurchase of common stock		(8,600	)		(8,600	)
Balance, end-of-quarter, March 31, 2002	$	16,009,406		$	13,486,586		$	1,995,202		$	527,618
Disclosure of 2002 reclassification amount:
Unrealized holding gains during period	$	111,060
Less reclassification adjustment for gains reported in net income		0
Net unrealized gains on securities	$	111,060

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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.     Management Statement

In the opinion of the Company, the accompanying audited and unaudited Consolidated Financial Statements reflect all adjustments necessary for a fair presentation of the financial position of the Company as of March 31, 2003 and December 31, 2002, as well as the results of operations and changes in financial position for the three-month, year-to-date periods ended March 31, 2003 and 2002. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed statements be read in conjunction with the Independent Auditor’s Report and Financial Statements contained in the Company’s most recent Annual Report on Form 10-KSB as of December 31, 2002.

Certain reclassifications of March 31, 2002 balances have been made to conform to the March 31, 2003 presentation; there was no impact on net income or stockholders’ equity. Shares outstanding and calculation of earnings per share have been restated for the three-month, year-to-date period ending March 31, 2002 to reflect the effect of a five-percent stock dividend effective for shareholders of record as of May 15, 2002.

NOTE 2.     Securities

Most of the securities are classified as available-for-sale and are stated at fair value, and unrealized holding gains and losses, net of related deferred taxes, are reported as a separate component of stockholders’ equity. Gains or losses on available-for-sale securities sales are reported as part of non-interest income based on the net proceeds and the adjusted carrying amount of the securities sold, using the specific identification method. Realized net gains of $32,483 and $-0- are included in the financial results for the three-month, year-to-date periods ending March 31, 2003 and 2002, respectively. Carrying amounts and fair values at March 31, 2003 and December 31, 2002 were as follows (in thousands):

	March 31, 2003				December 31, 2002
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities available-for-sale:
US Treasury securities	$	7,157	$	7,277	$	7,190	$	7,328
Obligations of federal government agencies		23,525	$	24,088	$	31,638	$	32,253
Mortgage backed securities		5,952	$	6,317	$	6,870	$	7,252
Corporate Bonds		4,505	$	4,556		5,427		5,479
TOTAL	$	41,139	$	42,238	$	51,125	$	52,312
Securities held-to-maturity:
Obligations of states, municipalities and political subdivisions	$	2,099	$	2,134	$	1,938	$	1,962

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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 3.     Loans

Loan detail by category as of March 31, 2003 and December 31, 2002 is as follows (in thousands):

	March 31, 2003			December 31, 2002
Commercial loans	$	109,101		$	109,947
Real estate loans		17,365			16,675
Installment loans		4,307			4,295
Consumer and other loans		6,884			6,424
TOTAL LOANS	$	137,657		$	137,341
Allowance for loan losses		(2,172	)		(2,026	)
Net deferred loan fees		(303	)		(291	)
NET LOANS	$	135,182		$	135,024

NOTE 4.     Allowance for Loan Losses

The allowance for loan loss is maintained at levels considered adequate by management to provide for possible loan losses. The allowance is based on management’s assessment of various factors affecting the loan portfolio, including problem loans, business conditions and loss experience, and an overall evaluation of the quality of underlying collateral. Changes in the allowance for loan loss during the three-month, year-to-date periods ended March 31, 2003 and 2002 were as follows (in thousands):

	Three Months Ended March 31,
	2003		2002
Balance, beginning of period	$	2,026	$	1,649
Provision for loan losses		225		270
Loan Charge-offs		82		126
Loan Recoveries		3		5
Balance, end of period	$	2,172	$	1,798

8

NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 5.     Borrowed Funds

The Company’s subsidiary, Inland Northwest Bank, has unsecured operating lines of credit with Key Bank of Washington for $5,000,000, US Bank for $1,500,000 and Zions Bank for $1,500,000. The Bank also has a secured line of credit with the Federal Home Loan Bank of Seattle (FHLB) for approximately $21,445,496 (10.0% of Bank assets.) There were no balances outstanding on any of the lines on March 31, 2003 or 2002. On December 31, 2002 there was $600,000 outstanding on the FHLB line. In addition to overnight funds, the Bank has access to long-term funding through the FHLB in the approximate amount of $10,722,748 (5.0% of Bank assets) and has taken advances to fund Community Investment Program and other loans utilizing these funds. Long-term notes payable to the FHLB were $5,891,815 on March 31, 2003 and $5,986,574 on December 31, 2002.

NOTE 6.     Common Stock

On March 19, 2002, the Board of Directors declared a five-percent stock dividend payable to shareholders of record as of May 15, 2002. Shares reported as outstanding as of March 31, 2002, as well as earnings per share and weighted average and actual shares outstanding for the three-month, year-to-date period ending March 31, 2002, have been restated to reflect the stock dividend.

On February 18, 2003, the Board of Directors declared a ten-cent ($0.10) per share cash dividend payable on April 4, 2003 to shareholders of record as of March 21, 2003.

NOTE 7.     Subsequent Event

On February 18, 2003, the Board of Directors declared a five-percent stock dividend payable on June 13, 2003 to shareholders of record as of May 15, 2003. No adjustment has been made to actual or weighted average shares reported as outstanding or to earnings per share; prior year financial results will be adjusted on the quarterly report on Form 10-QSB filed for the period ending June 30, 2003.

9

Item 2.     Management’s Discussion and Analysis or Plan of Operation

The Registrant relied upon Alternative 2 in its registration statement filed on Form 10-SB; there is no information to provide in response to Item 6(a)(3)(i) to Model B of Form 1-A.

Item 3.     Controls and Procedures

The officers signing this report: are responsible for maintaining internal controls; have designed such internal controls to ensure that material information relating to the Company and its consolidated subsidiary is made known to them by others within those entities, particularly for the period(s) for and in which this report was being prepared; have evaluated the effectiveness of the Company’s internal controls as of a date within 90 days prior to this report; and, believe that, as of the date of this report and for the periods presented, existing internal controls are effective and adequate based on their evaluation. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II     OTHER INFORMATION

Item 6.     Exhibits and Reports on Form 8-K

(a) Exhibit 99.1

Certification of Randall L. Fewel, President and Chief Executive Officer pursuant to 18 U.S.C. 1350

Exhibit 99.2

Certification of Christopher C. Jurey, Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. 1350

(b) Reports on Form 8-K

Not applicable

10

SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NORTHWEST BANCORPORATION, INC.
By	/s/     RANDALL L. FEWEL
	Randall L. Fewel, President and Chief Executive Officer

Date:   May 12, 2003

In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NORTHWEST BANCORPORATION, INC.
By	/s/     CHRISTOPHER C. JUREY
	Christopher C. Jurey, Executive Vice President and Chief Financial Officer

Date:   May 12, 2003

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CERTIFICATIONS

I, Randall L. Fewel, certify that:

1. I have reviewed this report on Form 10-QSB of Northwest Bancorporation, 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 have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”);

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date.

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 functions):

a) all significant deficiencies in the design or operation of the internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

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:   May 12, 2003

By	/s/     RANDALL L. FEWEL
	Randall L. Fewel, President and Chief Executive Officer

12

I, Christopher C. Jurey, certify that:

1. I have reviewed this report on Form 10-QSB of Northwest Bancorporation, 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 have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”);

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date.

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 functions):

a) all significant deficiencies in the design or operation of the internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

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:   May 12, 2003

By	/s/     CHRISTOPHER C. JUREY
	Christopher C. Jurey, Executive Vice President and Chief Financial Officer

13