U.S. 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 1/1/02 to 3/31/02.

Commission file number 0-24151

NORTHWEST BANCORPORATION, INC.

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

Washington	91-1574174
(State or other jurisdiction of incorporation or organisation)	(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)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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  ¨

The Registrant has a single class of common stock, of which there are 1,719,585 shares issued and outstanding as of March 31, 2002.

Transitional Small Business Disclosure Format:  Yes  x  No  ¨

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Condition—March 31, 2002 and December 31, 2001	1
	Consolidated Statements of Income—Three Months year-to-date Ended ended March 31, 2002 and 2001	2
	Consolidated Statements of Cash Flow—year-to-date ended March 31, 2002 and 2001	3
	Consolidated Statements of Stockholders’ Equity as of March 31, 2002 and 2001	4
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis or Plan of Operation	9
PART II	OTHER INFORMATION
Item 6.	Exhibits and Reports on Form 8-K	9
Signatures		9

PART I     FINANCIAL INFORMATION

Item 1.    Financial Statements

NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CONDITION

March 31, 2002 and December 31, 2001

($ in thousands)

	March 31 2002		December 31 2001
	Unaudited		Audited
A S S E T S
Cash and due from banks	$	6,859	$	8,710
Federal funds sold		6,624		6,620
Securities held-to-maturity (Note 2)		225		225
Securities available-for-sale (Note 2)		38,785		40,938
Federal Home Loan Bank stock, at cost		565		557
Loans, net of allowance for loan losses of $1,798 in 2002 and $1,649 in 2001 (Notes 3 & 4)		130,211		128,601
Loans held for sale		895		933
Accrued interest receivable		1,061		1,097
Premises and equipment, net (Note 7)		3,520		3,277
Foreclosed real estate		1,041		317
Other assets		1,574		1,593
TOTAL ASSETS		191,360		192,868
L I A B I L I T I E S
Noninterest bearing demand deposits	$	32,075	$	32,998
Money Market accounts		33,471		35,198
NOW accounts		11,858		13,730
Savings accounts		4,283		4,296
Time Certificates of Deposit, $100,000 and over		22,458		23,337
Time Certificates of Deposit, under $100,000		41,119		42,618
TOTAL DEPOSITS		145,264		152,177
Securities sold under agreement to repurchase		22,662		22,409
Borrowed funds, Federal Home Loan Bank (Note 5)		6,268		1,804
Accrued interest payable and other liabilities		1,156		899
TOTAL LIABILITIES		30,086		25,112
TOTAL DEPOSITS AND LIABILITIES		175,350		177,289
Stockholders’ Equity
Common stock, no par, 5,000,000 shares authorized; issued and outstanding 1,719,585 on March 31, 2002 and 1,720,530 on December 31, 2001 (Note 6)		13,487		13,495
Retained earnings		1,995		1,667
Accumulated other comprehensive income, net of tax of $272 for 2002 and $215 for 2001		528		417
TOTAL STOCKHOLDERS’ EQUITY		16,010		15,579
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	191,360	$	192,868

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

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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

Three Months year-to-date ended March 31, 2002 and 2001

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

	Three Months Ended				Year-to-date
	03/31/02		03/31/01		2002		2001
	Unaudited		Unaudited		Unaudited		Unaudited
Interest Income
Interest and fees on loans	$	2,501	$	2,811	$	2,501	$	2,811
Interest on securities		598		687		598		687
Interest on federal funds sold		12		62		12		62
TOTAL INTEREST INCOME		3,111		3,560		3,111		3,560
Interest Expense
Interest on deposits		811		1,446		811		1,446
Interest on securities sold under agreement to repurchase		58		190		58		190
Interest on borrowed funds		69		28		70		28
TOTAL INTEREST EXPENSE		938		1,664		938		1,664
NET INTEREST INCOME		2,173		1,896		2,173		1,896
Provision for loan losses		270		135		270		135
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		1,903		1,761		1,903		1,761
Noninterest Income
Fees and service charges		226		232		226		232
Net gain from sale of loans		107		184		107		184
Other noninterest income		99		63		99		63
TOTAL NONINTEREST INCOME		432		479		432		479
Noninterest Expense
Salaries and employee benefits		1,084		1,047		1,084		1,047
Occupancy/FF&E expense		190		177		190		177
Depreciation and amortization expense		120		115		120		115
Other operating expense		444		439		444		439
TOTAL NONINTEREST EXPENSE		1,838		1,778		1,838		1,778
INCOME BEFORE TAXES		497		462		497		462
Federal income tax expense		169		157		169		157
NET INCOME	$	328	$	305	$	328	$	305

	Quarter Ended 03/31/02		Quarter Ended 03/31/01		Year-to-date 03/31/02		Year-to-date 03/31/01
	Unaudited		Unaudited		Unaudited		Unaudited
Weighted average shares outstanding (Note 6)		1,719,659		1,742,244		1,719,659		1,742,244
Basic earnings per share	$	0.19	$	0.18	$	0.19	$	0.18
Weighted average shares outstanding (Note 6)		1,719,659		1,742,244		1,719,659		1,742,244
Effect of dilutive securities		851		1,643		851		1,643
Weighted average shares outstanding, adjusted for dilutive securities		1,720,510		1,743,887		1,720,510		1,743,887
Earnings per share assuming full dilution	$	0.19	$	0.17	$	0.19	$	0.17

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

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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOW

Year-to-date ended March 31, 2002 and 2001

($ in thousands)

	Year-to-date
	2002			2001
	Unaudited			Unaudited
Net income	$	328		$	305
Adjustments to reconcile net income to cash provided by operating activities:
Provision for loan losses		270			135
Depreciation and amortization		120			115
(Increase)/decrease in assets and liabilities:
Accrued interest receivable		36			135
Other assets		185			(151	)
Accrued interest payable & other liabilities		266			192
NET CASH PROVIDED BY OPERATING ACTIVITIES		1,205			731
Cash flows from investing activities:
Net (increase)/decrease in federal funds sold		(4	)		(4,087	)
Net (increase)/decrease in investment securities		2,312			(5,558	)
Net (increase)/decrease in loans		(1,880	)		206
Net (increase)/decrease in loans held for sale		38			(491	)
Purchase of premises and equipment net of gain or loss on asset disposal		(600	)		(20	)
Foreclosed real estate activity (net)		(724	)		66
NET CASH PROVIDED/(USED) BY INVESTING ACTIVITIES		(858	)		(9,884	)
Cash flows from financing activities:
Net increase/(decrease) in deposits		(6,906	)		6,119
Net increase/(decrease) in securities sold under agreement to repurchase		253			985
Net proceeds/(payments) from borrowed funds		4,464			(20	)
Cash received from stock sales (net)		(9	)		25
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES		(2,198	)		7,109
Net increase/(decrease) in cash and cash equivalents		(1,851	)		(2,044	)
Cash and cash equivalents, beginning of year		8,710			8.644
CASH AND CASH EQUIVALENTS, END OF QUARTER	$	6,859		$	6,600

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

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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

In Actual Dollars

As of March 31, 2001

	Total		Common Stock		Retained Earnings			Accumulated Comprehensive Income			Comprehensive Income
Balance, December 31, 1999 (audited)	$	11,145,919	$	10,312,307	$	1,535,355		$	(701,743	)
Net income 2000		799,185				799,185					$	799,185
Unrealized gains (losses) on available for sale securities		892,662							892,662			892,662
Comprehensive income												1,691,847
Proceeds from issuance of capital stock		1,498,026		1,498,026
Transfers		0		1,026,025		(1,026,025	)
Balance December 31, 2000 (audited)		14,335,792		12,836,358		1,308,515			190,919
Net income, 2001, year-to-date		305,047				305,047						305,047
Unrealized gains (losses) on available for sale securities		83,664							83,664			83,664
Comprehensive income											$	439,301
Proceeds from issuance of capital stock		25,000		25,000
Balance, end-of-quarter, March 31, 2001 (unaudited)	$	14,749,503	$	12,861,358	$	1,613,562		$	274,583
Disclosure of 2001 reclassification amount:
Unrealized holding gains during period	$	83,664
Less reclassification adjustment for losses reported in net income		0
Net unrealized gains on securities	$	83,664

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

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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
In Actual Dollars
As of March 31, 2002
	Total			Common Stock			Retained Earnings			Accumulated Comprehensive Income		Comprehensive Income
Balance, December 31, 2000 (audited)	$	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 (losses) on available for sale securities		225,639									225,639		225,639
Comprehensive income													1,414,454
Proceeds from issuance of capital stock		52,360			52,360
Repurchase of capital stock		(221,532	)		(221,532	)
Fractional shares, issued in cash		(2,369	)					(2,369	)
Transfers		0			828,000			(828,000	)
Balance December 31, 2001 (audited)		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 (losses) on available for sale securities		111,060									111,060		111,060
Comprehensive income												$	439,301
Repurchase of capital stock		(8,600	)		(8,600	)
Balance, end-of-quarter, March 31, 2002 (unaudited)	$	16,009,407		$	13,486,587		$	1,995,202		$	527,618
Disclosure of 2002 reclassification amount:
Unrealized holding gains during period	$	111,060
Less reclassification adjustment for losses reported in net income		0
Net unrealized gains on securities	$	111,060

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

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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 present fairly the financial position of the Company as of March 31, 2002 and December 31, 2001, as well as the results of operations and changes in financial position for the three-month, year-to-date periods ended March 31, 2002 and 2001. 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, 2001.

Certain reclassifications of March 31, 2001 balances have been made to conform to the March 31, 2002 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, 2001 to reflect the effect of a five-percent stock dividend effective for shareholders of record as of May 15, 2001.

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. There are no realized gains or losses included in the results of the three-month periods ending March 31, 2002 or 2001. Carrying amount and fair values at March 31, 2002 and December 31, 2001 were as follows (in thousands):

	March 31, 2002				December 31, 2001
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	Unaudited		Unaudited		Audited		Audited
Securities available-for-sale:
US Treasury securities	$	5,501	$	5,637	$	5,527	$	5,661
Obligations of federal government agencies		24,194		24,617		26,290		26,681
Mortgage backed securities		7,074		7,320		7,769		7,876
Corporate Bonds		1,217		1,211		721		720
TOTAL	$	37,986	$	38,785	$	40,307	$	40,938
Securities held-to-maturity:
Obligations of states, municipalities and political subdivisions	$	225	$	238	$	225	$	228

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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, 2002 and December 31, 2001 is as follows (in thousands):

	March 31			December 31
	2002			2001
	Unaudited			Audited
Commercial loans	$	103,380		$	105,457
Real estate loans		20,553			16,943
Installment loans		4,362			4,446
Consumer and other loans		4,006			3,726
TOTAL LOANS		132,301			130,572
Allowance for loan losses		(1,798	)		(1,649	)
Deferred loan fees, net of deferred costs		(292	)		(322	)
NET LOANS	$	130,211		$	128,601

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, 2002 and 2001 were as follows (in thousands):

	Three Months Ended				Year-to-date
	03/31/02		03/31/01		2001		2000
	Unaudited		Unaudited		Unaudited		Unaudited
Balance, beginning of period	$	1,649	$	1,625	$	1,649	$	1,625
Provision for loan losses		270		135		270		135
Loan Charge-offs		126		232		126		232
Loan Recoveries		5		1		5		1
Balance, end of period	$	1,798	$	1,529	$	1,798	$	1,529

NOTE 5.    Borrowed Funds

The Company’s subsidiary, Inland Northwest Bank, has unsecured operating lines of credit with Key Bank of Washington for $3,000,000, US Bank for $1,500,000, Zions Bank for $1,500,000 and the Federal Home Loan Bank of Seattle (FHLB) for approximately $9,567,300 (5.0% of bank assets.) There were no balances outstanding on any of the lines on March 31, 2002 or December 31 or March 31, 2001. The bank also has access to an equal (5.0%) amount of long-term funding through the FHLB (that is, an additional $9,567,300) and has taken advances to fund Community Investment Program and other loans

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NORTHWEST BANCORPORATION, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

utilizing these funds. Long-term notes payable to the FHLB were $6,268,034 on March 31, 2002; $1,803,974 on December 31, 2001; and, $1,865,835 on March 31, 2001.

NOTE 6.    Common Stock

On April 17, 2001, the Board of Directors authorized a five-percent stock dividend payable to shareholders of record as of May 15, 2001. Earnings per share and weighted average and actual shares outstanding for the three-month period ending March 31, 2001 have been restated to reflect the stock dividend.

On March 19, 2002, the Board of Directors authorized a five-percent stock dividend payable to shareholders of record as of May 15, 2002. As payment of the dividend will occur in the future, no adjustment to earnings per share or weighted average and actual shares outstanding has been made in this report.

NOTE 7.    Construction in Process

In the fourth-quarter, 2001, Inland Northwest Bank entered into a contract for construction of a new branch facility, located in the Ironwood district of Coeur d’Alene, Idaho, to replace its existing leased facility. The bank had previously purchased the land where the new branch will be located; the land purchase price of $400,000 is included in the December 31, 2001 and March 31, 2002 financial statements under “Premises and equipment, net.” Construction costs will be approximately $690,000; and, another $225,000 will be spent on furniture and equipment. Progress payments of approximately $575,000 are included in the March 31, 2002 financial statements under “Premises and equipment, net.” The new branch is expected to open June 3, 2002.

NOTE 8.    Subsequent Event

At its meeting on April 16, 2002, the Board of Directors of Inland Northwest Bank approved an amendment to the Inland Northwest Bank Non-Qualified Stock Option Plan (the “Plan”), reserving and setting aside an additional 125,000 shares of the common stock of Northwest Bancorporation, Inc. for issuance pursuant to options granted under the Plan. The Board of Directors of the Company had approved the set aside of the shares at its meeting on March 19, 2002, subject to legal review and final action by the Bank board.

8

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.

Part II    Other Information

Item 6.     Exhibits and Reports on Form 8-K

(a)  Exhibit 10.2.61

Randall L. Fewel, Employment Agreement

(b)  Reports on Form 8-K

Not applicable

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/    CHRISTOPHER C. JUREY
	Christopher C. Jurey Chief Financial Officer

Date:  May 14, 2002

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