FIRST WASHINGTON BANCORP INC /WA/, 10-Q, 1998-11-16

FIRST WASHINGTON BANCORP INC /WA/
10-Q, 1998-11-16
SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED

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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(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, 1998
--------------------

[ ] 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 0-26584
------------
FIRST WASHINGTON BANCORP, INC.
------------------------------
(Exact name of registrant as specified in its charter)

WASHINGTON 91-1691604
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

10 S. First Avenue Walla Walla, Washington 99362
--------------------------------------------------------
(Address of principal executive offices and zip code)

(509) 527-3636
--------------
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year,
if changed since last report.)

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.

(1) 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.

Title of class: As of October 31, 1998
--------------- ----------------------

COMMON STOCK, $.01 PAR VALUE 11,428,559 SHARES *

* Includes 775,087 shares held by employee stock ownership plan
(ESOP) that have not been released, committed to be released, or
allocated to participant accounts.

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FIRST WASHINGTON BANCORP, INC. AND SUBSIDIARIES
Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1 - Financial Statements. The Consolidated Financial Statements of First
Washington Bancorp, Inc. and Subsidiaries filed as a part of the report are as
follows:

Consolidated Statements of Financial Condition
as of September 30, 1998 and March 31, 1998.......................... 2

Consolidated Statements of Income
for the Quarters and Six Months Ended September 30, 1998 and 1997.... 3

Consolidated Statements of Changes in Stockholders' Equity
for the Six Months Ended September 30, 1998 and 1997................ 4

Consolidated Statements of Cash Flows
for the Six Months Ended September 30, 1998 and 1997................ 6

Selected Notes to Consolidated Financial Statements.................. 8

ITEM 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operation

General............................................................. 11

Recent Developments and Significant Events.......................... 11
Comparison of Financial Condition at September 30, 1998 and
March 31, 1998..................................................... 13

Comparison of Results of Operations for the Quarters and Six
Months Ended September 30, 1998 and 1997........................... 13
Asset Quality...................................................... 18

Market Risk and Asset/Liability Management.......................... 18

Liquidity and Capital Resources..................................... 22

Capital Requirements................................................ 23

PART II - OTHER INFORMATION

Item 1. Legal Proceedings........................................... 24

Item 2. Changes in Securities....................................... 24

Item 3. Defaults upon Senior Securities............................. 24

Item 4. Submission of Matters to a Vote of Stockholders............. 24

Item 5. Other Information........................................... 24

Item 6. Exhibits and Reports on Form 8-K............................ 25

SIGNATURES............................................................. 26

<PAGE>
<PAGE>
FIRST WASHINGTON BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (IN THOUSANDS, EXCEPT SHARES)
SEPTEMBER 30, 1998 AND MARCH 31, 1998

(UNAUDITED)
SEPTEMBER 30 March 31
ASSETS 1998 1998
------------ -----------
Cash and due from banks $ 50,265 $ 42,529
Securities available for sale, cost $331,882
and $298,346 337,262 302,419

Securities held to maturity, fair value
$2,588 and $194 2,539 194
Federal Home Loan Bank stock 20,657 16,050
Loans receivable:
Held for sale, fair value $12,640 and $12,436 12,640 12,436
Held for portfolio 964,258 752,338
Allowances for loan losses (10,418) (7,857)
----------- -----------
966,480 756,917
Accrued interest receivable 9,720 7,569
Real estate held for sale, net 1,518 882
Property and equipment, net 12,746 11,379
Costs in excess of net assets acquired, net 29,107 11,007
Other assets 6,424 5,126
----------- -----------
$ 1,436,718 $ 1,154,072
=========== ===========
LIABILITIES
Deposits:
Non-interest-bearing $ 90,950 $ 56,691
Interest-bearing 688,945 545,831
----------- -----------
779,895 602,522
Advances from Federal Home Loan Bank 380,860 297,549
Other borrowings 92,005 91,723
Accrued expenses and other liabilities 7,510 5,475
Deferred compensation 2,536 3,798
Deferred income tax liability, net 236 541
Income taxes payable 1,624 2,280
----------- -----------
1,264,666 1,003,888
STOCKHOLDERS' EQUITY
Preferred stock - $0.01 par value,
500,000 shares authorized, no shares issued -- --
Common stock - $0.01 par value, 27,500,000
shares authorized, 12,001,588 shares issued: *
11,479,359 shares and 10,948,149 shares
outstanding * at September 30, 1998 and
March 31, 1998, respectively and additional
paid-in capital 125,660 108,994
Retained earnings 54,301 72,962
Valuation reserve for securities available for sale 3,526 2,680
Treasury stock, at cost: none and 1,053,439 shares *
at September 30, 1998, see note 1, and March 31,
1998, respectively -- (20,979) Unearned shares of
common stock issued to employee stock ownership
plan trust (ESOP):
775,087 and 787,897 restricted shares outstanding *
at September 30, 1998 and March 31, 1998,
respectively, at cost (7,046) (7,163)
Carrying value of shares held in trust for stock-
related compensation plans (4,389) (6,310)
----------- -----------
172,052 150,184
----------- -----------
$ 1,436,718 $ 1,154,072
=========== ===========
* - Adjusted for stock dividend see note 2:

2
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<PAGE>
FIRST WASHINGTON BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) (IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)

Quarters Ended Six Months Ended
September 30 September 30
------------------ ------------------
1998 1997 1998 1997
---- --- ---- ----
INTEREST INCOME:
Loans receivable $ 22,063 $ 16,178 $ 42,940 $ 31,100
Mortgage-backed securities 3,423 3,173 6,184 6,315
Securities and deposits 2,190 1,960 4,351 3,958
-------- -------- ------- --------
27,676 21,311 53,475 41,373
INTEREST EXPENSE:
Deposits 8,304 6,381 16,340 12,440
Federal Home Loan Bank advances 5,244 4,310 9,831 8,001
Other borrowings 1,371 1,063 2,688 2,034
-------- -------- ------- --------
14,919 11,754 28,859 22,475
-------- -------- ------- --------
Net interest income before
provision for loan losses 12,757 9,557 24,616 18,898

PROVISION FOR LOAN LOSSES 703 400 1,370 755
-------- -------- ------- --------
Net interest income 12,054 9,157 23,246 18,143

OTHER OPERATING INCOME:
Loan servicing fees 165 171 390 355
Other fees and service charges 827 643 1,663 1,223
Gain on sale of loans 628 288 1,151 479
Gain (loss) on sale of securities 2 1 7 2
Miscellaneous 170 10 174 10
-------- -------- ------- --------
Total other operating income 1,792 1,113 3,385 2,069

OTHER OPERATING EXPENSES:
Salary and employee benefits 4,410 3,262 8,608 6,358
Less capitalized loan origination
costs (643) (491) (1,319) (997)
Occupancy and equipment 1,133 712 2,182 1,437
Information/computer data services 369 256 741 504
Advertising 137 99 271 208
Deposit insurance 89 69 174 139
Amortization of costs in excess
of net assets acquired 569 225 1,138 449
Miscellaneous 1,423 1,004 2,765 1,950
-------- -------- ------- --------
Total other operating expenses 7,487 5,136 14,560 10,048
-------- -------- ------- --------
Income before provision for
income taxes 6,359 5,134 12,071 10,164

PROVISION FOR INCOME TAXES 2,392 1,837 4,556 3,622
-------- -------- ------- --------
NET INCOME $ 3,967 $ 3,297 $ 7,515 $ 6,542
======== ======== ======= ========
Net income per common share, see Notes 2 & 5:
Basic $ .38 $ .32 $ .71 $ .64
Diluted $ .36 $ .31 $ .68 $ .62

Cumulative dividends declared per
common share: $ .09 $ .06 $ .17 $ .13

3
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<PAGE>
FIRST WASHINGTON BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

1998 1997
--------- ---------
COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period $ 108,994 $ 107,953
Acquisition of Towne Bank:
Issuance of stock-fair market value in
excess of basis 1,261 --
Assumption of options 2,018 --
Release of earned ESOP shares 174 389
Recognition of tax benefit due to vesting
of MRP shares 276 231
Excess of basis over proceeds of treasury stock
reissued for exercised stock options (318) (19)
Record 10% stock dividend, see note 2 24,371 --
Retirement of treasury shares resulting from
reincorporation in state of Washington,
see note 1 (11,116) --
--------- ---------
Balance, end of period 125,660 108,554

RETAINED EARNINGS:
Balance, beginning of period 72,962 62,572
Net income 7,515 6,542
Record 10% stock dividend (24,371) --
Cash dividends (1,805) (1,404)
--------- ---------
Balance, end of period 54,301 67,710

VALUATION RESERVE FOR SECURITIES AVAILABLE FOR SALE:
Balance, beginning of period 2,680 (401)
Change in valuation reserve 846 2,273
--------- ---------
Balance, end of period 3,526 1,872

TREASURY STOCK:
Balance, beginning of period (20,979) (6,954)
Basis of stock reissued in acquisition of
Towne Bank 17,206 --
Purchases of treasury stock (7,340) (6,619)
Purchases of treasury stock for exercised stock
options (409)
Reissuance of treasury stock for MRP
and/or exercised stock options 409 --
Repurchase of forfeited shares from MRP (3) (12)
Retirement of treasury shares resulting form
reincorporation in state of Washington,
see note 1 11,116 --
--------- ---------
Balance, end of period -- (13,585)

UNEARNED, RESTRICTED ESOP SHARES AT COST:
Balance, beginning of period (7,163) (7,751)
Release of earned ESOP shares 117 225
--------- ---------
Balance, end of period (7,046) (7,526)

CARRYING VALUE OF SHARES HELD IN TRUST FOR
STOCK-RELATED COMPENSATION PLANS:
Balance, beginning of period (6,310) (6,783)
Cumulative effect of change in accounting for
Rabbi Trust, see note 2 1,354 --
Net change in number and/or valuation of
shares held in trust 3 (558)
Amortization of compensation related to MRP 564 611
--------- ---------
Balance, end of period (4,389) (6,730)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY $ 172,052 $ 150,295
========= =========

4
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<PAGE>
FIRST WASHINGTON BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(CONTINUED) (IN THOUSANDS)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

1998 1997
------- -------
COMMON STOCK, SHARES ISSUED: *
Number of shares, beginning of period 12,002 12,002
------- -------
Number of shares, end of period 12,002 12,002
------- -------
TREASURY STOCK, SHARES RETIRED 9/30/98;
REPURCHASED, 9/30/97, SEE NOTE 1: *
Number of shares, beginning of period (1,053) (432)
Purchase of treasury stock (323) (299)
Purchase of treasury stock used for
exercised stock options (18) (2)
Reissuance of treasury stock to deferred
compensation plan and/or exercised stock
options 18 2
Shares reissued in acquisition of Towne Bank 853 --
Repurchase of shares forfeited from MRP -- --
------- -------
Number of shares retired/repurchased,
end of period (523) (731)
------- -------
Shares issued and outstanding, end of period 11,479 11,271
======= =======
UNEARNED, RESTRICTED ESOP SHARES: *
Number of shares, beginning of period (788) (852)
Release of earned shares 13 24
------- -------
Number of shares, end of period (775) (828)
======= =======
* - Adjusted for stock dividend, see note 2

5
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<PAGE>
FIRST WASHINGTON BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (IN THOUSANDS)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

1998 1997
--------- ---------
OPERATING ACTIVITIES
Net income $ 7,515 $ 6,542
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred taxes (109) --
Depreciation 810 536
Loss (gain) on sale of securities (7) (2)
Net amortization of premiums and
discounts on investments 468 (3)
Amortization of costs in excess of net
assets acquired 1,138 449
Amortization of MRP compensation liability 564 611
Loss (gain) on sale of loans (1,151) (503)
Net changes in deferred loan fees, premiums
and discounts 212 453

Loss (gain) on disposal of real estate held
for sale 4 20
Loss (gain) on disposal of property and equipment (97) (5)
Capitalization of mortgage servicing rights
from sale of mortgages with servicing retained (406) (73)
Amortization of mortgage servicing rights 121 35
Provision for losses on loans and real estate
held for sale 1,370 745
FHLB stock dividend (693) (541)
Cash provided (used) in operating assets and
liabilities:
Loans held for sale 1,922 (3,517)
Accrued interest receivable (1,431) (790)
Other assets (704) (90)
Deferred compensation 130 130
Accrued expenses and other liabilities 1,186 630
Income taxes payable (1,031) (933)
--------- ---------
Net cash provided by operating
activities 9,811 3,694
--------- ---------
INVESTING ACTIVITIES:
Purchase of securities available for sale (218,149) (80,735)
Principal payments and maturities of
securities available for sale 184,457 82,904
Proceeds from sales of securities
available for sale 2,206 1,000
Purchase of securities held to maturity -- --
Principal payments and maturities of
securities held to maturity 261 199
Purchase of FHLB stock (3,004) (1,719)
Loans originated and closed - net (320,361) (244,846)
Purchase of loans and participating interest
in loans (56,691) (28,673)
Proceeds from sales of loans and participating
interest in loans 71,497 27,324
Principal repayments on loans 211,746 160,597
Purchase of property and equipment (1,368) (1,090)
Proceeds from sale of property and equipment 374 9
Insurance proceeds on real estate held for
sale-net -- 119
Basis of real estate held for sale acquired in
settlement of loans and disposed of during the
period 1,327 1,127
Funds transferred to deferred compensation
plan trusts (41) (39)
Acquisition of Towne Bank, net cash acquired 9,328 --
--------- ---------
Net cash used by investing activities (118,418) (83,823)
--------- ---------

(CONTINUED ON NEXT PAGE)

6
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<PAGE>
FIRST WASHINGTON BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (IN THOUSANDS)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(CONTINUED FROM PRIOR PAGE)

1998 1997
--------- ---------
FINANCING ACTIVITIES
Increase (decrease) in deposits $ 43,789 $ 21,824
Proceeds from FHLB advances 187,554 424,345
Repayment of FHLB advances (106,243) (378,653)
Proceeds from reverse repurchase borrowings -- 24,877
Repayments of reverse repurchase borrowings (9,532) (301)
Decrease-net in other borrowings 9,814 (3,109)
Compensation expense recognized for shares released
for allocation to participants of the ESOP:
Original basis of shares 117 225
Excess of fair value of released shares
over basis 174 389
Cash dividends paid (1,673) (1,422)
Net cost of exercised stock options (317) (19)
Purchase of treasury stock (7,340) (6,619)
--------- ---------
Net cash provided by financing activities 116,343 81,537
--------- ---------
NET INCREASE (DECREASE) IN CASH AND DUE
FROM BANKS 7,736 1,408

CASH AND DUE FROM BANKS, BEGINNING OF PERIOD 42,529 24,488
--------- ---------
CASH AND DUE FROM BANKS, END OF PERIOD $ 50,265 $ 25,896
========= =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 28,429 $ 21,346
Taxes paid $ 5,847 $ 4,555
Non-cash transactions:
Loans, net of discounts, specific loss
allowances and unearned income
transferred to real estate owned $ 1,967 $ 1,812
Net change in accrued dividends payable $ 132 $ (18)
Net change in unrealized gain (loss) in
deferred compensation trust and related
liability $ 1,392 $ (538)
Treasury stock forfeited by MRP $ 3 $ 12
Fair value of stock issued and options
assumed in connection with the
acquisition of Towne Bank $ 20,484 $ --
Recognize tax benefit of vested MRP shares $ 276 $ 231
Non-cash portion of 10% stock dividend $ 24,371 $ --

7
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FIRST WASHINGTON BANCORP, INC. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND MARCH 31, 1998

NOTE 1: REINCORPORATION AND BASIS OF PRESENTATION

Reincorporation:
- - ----------------
The stockholders of First Savings Bank of Washington Bancorp, Inc., a Delaware
corporation and herein referred to as "FSBWB," approved the reincorporation of
FSBWB from Delaware to Washington on July 24, 1998. The reincorporation was
effected July 24, 1998 by merging FSBWB into a wholly owned subsidiary which
had been recently formed solely for the purpose of effecting the
reincorporation. The surviving corporation is known as First Washington
Bancorp, Inc., a Washington corporation, and is hereafter referred to as
"FWWB." Upon consummation of the merger, each share of Common Stock of FSBWB,
par value $.01 per share, was automatically converted into one share of Common
Stock of FWWB, par value $.01 per share.

The merger was consummated under the terms and conditions of a Plan of Merger
pursuant to which FSBWB ceased to exist as a Delaware corporation, the
stockholders of FSBWB became shareholders of FWWB, FWWB succeeded to all the
assets, liabilities, subsidiaries and other properties of FSBWB to the full
extent provided by law, and the rights of the shareholders and internal
affairs of FWWB are to be governed by the articles of incorporation and bylaws
of FWWB and the Washington Business Corporation Act, as amended. As a result
of the merger, FWWB has the same business, management, benefit plans,
location, assets, liabilities and net worth as did FSBWB. However, because the
state of Washington treats all treasury stock as retired upon purchase, all
purchases of treasury stock reduce stock issued and the cost of treasury stock
acquired is charged to par value and paid-in capital.

Basis of Presentation:
- - ----------------------
The unaudited consolidated financial statements of FWWB included herein
reflect all adjustments which are, in the opinion of management, necessary to
present fairly the statement of financial position and the results
ofoperations for the interim periods presented. All such adjustments are of a
normal recurring nature. The consolidated financial statements include FWWB's
wholly owned subsidiaries, First Savings Bank of Washington (FSBW), Inland
Empire Bank (IEB) and Towne Bank (TB) (together, the Banks). The balance sheet
data at March 31, 1998, is derived from FWWB's audited financial statements.
Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC). It is suggested that these
consolidated financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Annual Report on Form
10-K for the year ended March 31, 1998 (File No. 0-26584), of FWWB.

Certain amounts in the prior periods' financial statements and/or schedules
have been reclassified to conform to the current period's presentation. These
reclassifications affected certain ratios for the prior periods. The effect of
such reclassifications is immaterial.

NOTE 2: RECENT DEVELOPMENTS

Acquisition of Towne Bancorp, Inc.:
- - -----------------------------------
On April 1, 1998 FWWB completed the acquisition of Towne Bancorp, Inc. FWWB
paid $28.2 million in cash and common stock for all of the outstanding common
shares and stock options of Towne Bancorp, Inc., which was the holding company
for Towne Bank (TB), headquartered in Woodinville, Washington, a Seattle
suburb. As a result of the merger of Towne Bancorp, Inc. into FWWB, TB became
a wholly owned subsidiary of FWWB. The acquisition was accounted for as a
purchase and resulted in the recording of $19.2 million of costs in excess of
the fair value of Towne Bancorp, Inc. net assets acquired (goodwill). Goodwill
assets are being amortized over a 14 year period and result in a current
charge to earnings of $343,800 per quarter or $1,375,000 per year. Founded in
1991, TB is a community business bank which had, before recording of goodwill,
approximately $146 million in total assets, $134 million in deposits, $120
million in loans and $9.3 million in shareholders' equity at March 31, 1998.
TB operates five full service branches in the Seattle, Washington metropolitan
area--in Woodinville, Redmond, Bellevue, Renton and Bothell.

8
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<PAGE>
Agreement to Acquire Whatcom State Bancorp, Inc.:
- - -------------------------------------------------
FWWB has signed a definitive agreement to acquire Whatcom State Bancorp, Inc.,
in an all stock offer valued at approximately $12.5 million, including the
assumption of outstanding Whatcom State Bancorp stock options. Whatcom State
Bancorp, Inc., the holding company for Whatcom State Bank in Bellingham,
Washington, is not a publicly traded institution. This valuation represents
approximately 2.10 times book value and 19.6 times earnings for the twelve
months ended March 31, 1998 for Whatcom State Bancorp, Inc. According to the
terms of the definitive agreement, FWWB will exchange 0.7671 shares of its
common stock for each Whatcom State Bancorp share. The acquisition, which has
been approved by the Boards of Directors of each company, is subject to, among
other contingencies, approval by regulators and Whatcom State Bancorp
shareholders. The transaction is expected to close by the end of the calendar
year.

Declaration of 10% Stock Dividend:
- - ----------------------------------
On July 24, 1998 FWWB's Board of Directors declared a 10% stock dividend
payable August 17, 1998 to shareholders of record on August 10, 1998. All
earnings per share and share data have been adjusted to reflect the 10% stock
dividend.

New Accounting Pronouncement:
- - -----------------------------
In July 1998, the Emerging Issues Task Force (EITF) of the Financial
Accounting Standards Board reached a consensus on the accounting treatment for
deferred compensation arrangements where amounts earned are held in a Rabbi
Trust and invested. The consensus of the EITF was applied as of September 30,
1998 for all awards granted and existing plans were required to be amended
prior to September 30, 1998. Application of the consensus is reflected as a
change in accounting principle under which the Company stock purchased for a
Rabbi Trust obligation and the related liability for deferred compensation is
recorded at acquisition cost. Prior to this change the stock was recorded at
fair market value. The effect of this change in accounting increased equity by
$1.35 million and reduced the related liability for deferred compensation by
the same amount.

NOTE 3: ADOPTION OF NEW ACCOUNTING STANDARDS

FWWB adopted Statement of Financial Accounting Standards ("SFAS") No. 130,
Reporting Comprehensive Income, effective April 1, 1998. The standard requires
that comprehensive income and its components be disclosed in the financial
statements. FWWB's comprehensive income includes all items which comprise net
income plus the unrealized holding gains, net of related taxes, on
available-for-sale securities. For the quarters and six months ended September
30, 1998 and 1997, FWWB's comprehensive income was as follows:

Quarters Ended Six Months Ended
September 30 September 30
---------------- ------------------
1998 1997 1998 1997
---- ---- ---- ----
Net income $ 3,967 $ 3,297 $ 7,515 $ 6,542
Other comprehensive income 909 803 843 2,273
------- ------- ------- -------
Total comprehensive income $ 4,876 $ 4,100 $ 8,358 $ 8,815
======= ======= ======= =======

NOTE 4: ADDITIONAL INFORMATION REGARDING INTEREST-BEARING DEPOSITS AND
SECURITIES

The following table sets forth additional detail on the FWWB's
interest-bearing deposits and securities at the dates indicated (at carrying
value) (in thousands):

September 30 March 31
1998 1998
------------ --------
Interest-bearing deposits included
in cash and due from banks $ 22,483 $ 15,587
--------- ---------
Mortgage-backed securities 224,401 197,130
Other securities-taxable 77,337 70,092
Other securities-tax exempt 34,704 32,093
Other stocks with dividends 3,359 3,298
--------- ---------
Total securities 339,801 302,613

Federal Home Loan Bank stock 20,657 16,050
--------- ---------
$ 382,941 $ 334,250
========= =========

9
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<PAGE>
The following table provides additional detail on income from deposits and
securities for the periods indicated (in thousands):

Quarters Ended Six Months Ended
September 30 September 30
---------------- ------------------
1998 1997 1998 1997
---- ---- ---- ----
Mortgage-backed securities $ 3,423 $ 3,173 $ 6,184 $ 6,315
------- ------- ------- -------
Taxable interest and dividends 1,364 1,148 2,692 2,382
Tax-exempt interest 466 517 966 1,035
Federal Home Loan Bank stock-
dividends 360 295 693 541
------- ------- ------- -------
2,190 1,960 4,351 3,958
------- ------- ------- -------
$ 5,613 $ 5,133 $10,535 $10,273
======= ======= ======= =======

NOTE 5: CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING FOR EARNINGS PER
SHARE (EPS) AND CALCULATION OF OUTSTANDING SHARES

Calculation of
Weighted Average Shares Outstanding
for Earnings Per Share
(in thousands)

Quarters Ended Six Months Ended
September 30 September 30
---------------- ------------------
1998 1997 1998 1997
---- ---- ---- ----
Total shares originally issued 12,002 12,002 12,002 12,002
Less treasury stock
including shares allocated
to MRP (713) (939) (664) (907)
Less unallocated shares held
by the ESOP (779) (834) (783) (840)
------- ------- ------- -------
Basic weighted average shares
outstanding 10,510 10,229 10,555 10,255
Plus MRP and stock option
incremental shares considered
outstanding for diluted
EPS calculations 516 390 498 378
------- ------- ------- -------
Diluted weighted average shares
outstanding 11,026 10,619 11,053 10,633
======= ======= ======= =======

Calculation of
Outstanding Shares at*
(in thousands)
SEPTEMBER 30 March 31
1998 1998
------------ --------
Total shares issued 12,002 12,002
Less retired treasury stock (523) (731)
------ ------
Outstanding shares issued 11,479 11,271
====== ======

* - Adjusted for 10% stock dividend granted August 10, 1998

10
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<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

GENERAL

First Washington Bancorp, Inc. (FWWB), a Washington corporation, is primarily
engaged in the business of planning, directing and coordinating the business
activities of its wholly owned subsidiaries, First Savings Bank of Washington
(FSBW), Inland Empire Bank (IEB) and Towne Bank (TB) (together, the Banks).
FSBW is a Washington-chartered savings bank the deposits of which are insured
by the Federal Deposit Insurance Corporation (FDIC) under the Savings
Association Insurance Fund (SAIF). FSBW conducts business from its main office
in Walla Walla, Washington and its 16 branch offices and three loan production
offices located in southeast, central, north central and western Washington.
IEB is an Oregon-chartered commercial bank whose deposits are insured by the
FDIC under the Bank Insurance Fund (BIF). IEB conducts business from its main
office in Hermiston, Oregon and its five branch offices and two loan
production offices located in northeast Oregon. TB is a Washington-chartered
commercial bank whose deposits are insured by the FDIC under BIF. TB conducts
business from five full service branches in the Seattle, Washington
metropolitan area.

The operating results of FWWB depend primarily on its net interest income,
which is the difference between interest income on interest-earning assets,
consisting of loans and investment securities, and interest expense on
interest-bearing liabilities, composed primarily of savings deposits and
Federal Home Loan Bank (FHLB) advances. Net interest income is primarily a
function of FWWB's interest rate spread, which is the difference between the
yield earned on interest-earning assets and the rate paid on interest-bearing
liabilities, as well as a function of the average balance of interest-earning
assets as compared to the average balance of interest-bearing liabilities. As
more fully explained below, FWWB's net interest income significantly increased
for the quarter and six months ended September 30, 1998, when compared to the
same periods for the prior year. This increase in net interest income was
largely due to the substantial growth in average asset and liability balances
from the acquisition of TB on April 1, 1998 although significant asset and
liability growth also occurred at FSBW and IEB. FWWB's net income also is
affected by provisions for loan losses and the level of its other income,
including deposit service charges, loan origination and servicing fees, and
gains and losses on the sale of loans and securities, as well as its
non-interest operating expenses and income tax provisions. FWWB's net income
also significantly increased when compared to the same periods for the prior
year.

Management's discussion and analysis of results of operations is intended to
assist in understanding the financial condition and results of operations of
FWWB. The information contained in this section should be read in conjunction
with the Consolidated Financial Statements and accompanying Selected Notes to
the Consolidated Financial Statements.

RECENT DEVELOPMENTS AND SIGNIFICANT EVENTS

RECENT DEVELOPMENTS

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Acquisition of Towne Bancorp, Inc.:
- - -----------------------------------
On April 1, 1998 FWWB completed the acquisition of Towne Bancorp, Inc. FWWB
paid $28.2 million in cash and common stock for all of the outstanding common
shares and stock options of Towne Bancorp, Inc., which was the holding company
for Towne Bank (TB), headquartered in Woodinville, Washington, a Seattle
suburb. As a result of the merger of Towne Bancorp, Inc. into FWWB, TB became
a wholly owned subsidiary of FWWB. The acquisition was accounted for as a
purchase and resulted in the recording of $19.2 million of costs in excess of
the fair value of Towne Bank net assets acquired (goodwill). Goodwill assets
are being amortized over a 14 year period and result in a current charge to
earnings of $343,800 per quarter or $1,375,000 per year. Founded in 1991, TB
is a community business bank which had, before recording of goodwill,
approximately $146 million in total assets, $134 million in deposits, $120
million in loans and $9.3 million in shareholders' equity at March 31, 1998.
TB operates five full service branches in the Seattle, Washington metropolitan
area--in Woodinville, Redmond, Bellevue, Renton and Bothell.

Agreement to Acquire Whatcom State Bancorp, Inc.:
- - -------------------------------------------------
FWWB has signed a definitive agreement to acquire Whatcom State Bancorp, Inc.,
in an all stock offer valued at approximately $12.5 million, including the
assumption of outstanding Whatcom State Bancorp stock options. Whatcom State
Bancorp, Inc., the holding company for Whatcom State Bank in Bellingham,
Washington, is not a publicly traded institution. This valuation represents
approximately 2.10 times book value and 19.6 times earnings for the twelve
months ended March 31, 1998 for Whatcom State Bancorp, Inc. According to the
terms of the definitive agreement, First Washington Bancorp will exchange
0.7671 shares of its common stock for each Whatcom State Bancorp share. The
acquisition, which has been approved by the Boards of Directors of each
company, is subject to, among other contingencies, approval by regulators and
Whatcom State Bancorp shareholders. The transaction is expected to close by
the end of the year.

Declaration of 10% Stock Dividend:
- - ----------------------------------
On July 24, 1998 the Company's Board of Directors declared a 10% stock
dividend payable August 17, 1998 to shareholders of record August 10, 1998.
All earnings per share and share data have been adjusted to reflect the 10%
stock dividend.

YEAR 2000 COMPLIANCE

The "Year 2000" (Y2K) issue is the result of older computer programs being
written using two digits rather than four to define the applicable year. A
computer program that has date sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruption of operations, including, among
other things, a temporary inability to process transactions, send statements,
or engage in similar normal business activities.

Based on an assessment of computer hardware, software and other equipment
operated by FWWB and its subsidiary Banks, FWWB presently believes that all
equipment and programs should be Y2K compliant by December 31, 1998. A program
for addressing the Y2K issue through awareness, assessment, renovation and
testing has been developed and implemented. Only the testing phase remains.
Testing has started and will continue through December, 1998. The three bank
subsidiaries have budgeted close to $450,000 to cover soft and hard costs such
as upgrading ATMs, contacting and monitoring vendors, contacting customers and
providing information regarding our preparations and testing the systems we
have identified as critical and non-critical. FWWB and its Bank subsidiaries
have incurred and expensed approximately $184,000 of Y2K related costs in the
current fiscal year to date period ended September 30, 1998. Costs incurred
and expensed in prior fiscal years were not significant. During the past
quarter, as a result of initial testing for Y2K preparedness and review of the
current status of contingency planning, management expanded the budget to
include additional administrative, personnel and overhead costs which resulted
in a $300,000 increase from the original budget.

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FWWB and its subsidiary Banks are continuing to contact and monitor all
significant suppliers to determine the extent to which they are vulnerable to
those third parties' failures to remedy their own Y2K impact issues. Third
party responses have indicated satisfactory progress in addressing any needs
for equipment or software renovation. The Banks are contacting their large
loan and deposit customers to build Y2K awareness and encourage early
development of contingency plans and solutions in an effort to prevent
potential business disruption due to Y2K processing failures. Loan and deposit
customers are being updated regularly about our preparations and information
is being provided to create a much greater awareness of the issue with some
ideas about how to assess and prepare for their own Y2K vulnerability. There
can be no guarantee that the systems of other companies on which the Banks'
systems rely will be timely converted, or that a failure to convert by another
company, or a conversion that is incompatible with the Banks' systems would
not have a material adverse effect on the Banks. However, the Banks will test
for the Y2K preparedness of all internal functions and external functions
provided by third parties whenever possible. In addition, contingency or
alternate sources of support have been identified for each critical function
and many non-critical functions.

In the event that the Banks' data processing providers do not make their
systems Y2K compliant and FWWB is not able to switch to an alternative
provider or an in-house system in a timely manner, resulting computer
malfunctions could interrupt the operations of the Banks and have a
significant adverse effect on FWWB's financial condition and results of
operations.

COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30 AND MARCH 31, 1998

Total assets increased $283 million, or 24.5%, from $1.154 billion at March
31, 1998, to $1.437 billion at September 30, 1998. The majority of the
increase, $164.9 million, was from the acquisition of Towne Bank including
goodwill resulting from the use of purchase accounting. The remaining growth
of $117.1 million was spread among all three subsidiary Banks and was funded
primarily with deposit growth, advances from the FHLB and other borrowings.
This growthrepresented a continuation of management's plans to further
leverage FWWB's capital and reflects the solid economic conditions in the
markets where FWWB operates.

Loans receivable (gross loans less loans in process, deferred fees and
discounts, and allowance for loan losses) grew $209.6 million, or 27.7%, from
$756.9 million at March 31, 1998, to $966.5 million at September 30, 1998. The
increase in gross loans of $229.9 million from $822.6 million at March 31,
1998, to $1.052 billion at September 30, 1998, consists of $85.5 million of
mortgages secured by commercial and multi-family real estate, $50.3 million of
construction and land loans, $4.9 million of residential mortgages and $89.2
million of non-mortgage loans such as commercial, agricultural and consumer
loans. The acquisition of TB on April 1, 1998 provided $121.7 million of gross
loans consisting of $24.3 million of commercial and multi-family mortgages,
$19.4 million of construction and land loans, $6.4 million of residential
mortgages and $71.6 million of commercial and consumer loans. A little more
than three quarters of the increase in assets, excluding the TB acquisition,
was funded by a net increase of $83.3 million, or 28.0%, in FHLB advances from
$297.5 million at March 31, 1998, to $380.9 million on September 30, 1998.
Asset growth was also funded by increased deposits and net income from
operations. Deposits grew $177.4 million, or 29.4%, from $602.5 million at
March 31, 1998, to $779.9 million at September 30, 1998. Other borrowings,
primarily reverse repurchase agreements with securities dealers, had a nominal
increase of $282,000, from $91.7 million at March 31, 1998, to $92.0 million
at September 30, 1998. The Towne Bank acquisition provided $133.6 million of
deposits and $2.0 million of FHLB advances. Securities available for sale and
held to maturity increased $37.2 million, or 12.3%, from $302.6 million at
March 31, 1998, to $339.8 million at September 30, 1998. Federal Home Loan
Bank Stock increased $4.6 million ($1.0 million from the TB acquisition), as
FWWB was required to purchase more stock as a result of its increased use of
FHLB advances. Real estate held for sale increased $636,000, primarily as a
result of completed foreclosures.

COMPARISON OF OPERATING RESULTS FOR THE QUARTERS AND SIX MONTHS ENDED
SEPTEMBER 30, 1998 AND 1997

GENERAL. Net income for the second quarter of fiscal 1999 was $4.0 million, an
increase of $670,000 from the comparable quarter in fiscal 1998. Net income
for the first six months of fiscal 1999 was $7.5 million, an increase of
$973,000 from the comparable period in fiscal 1998. FWWB's improved operating
results reflect the significant growth of assets and liabilities as well as
improvements in net interest margin and non-interest revenues which were
offset somewhat by increased operating expenses. Compared to year ago levels,
total assets increased 30.8% to $1.44 billion at September 30, 1998, total
loans rose 32.0% to $966.5 million, deposits grew 35.0% to $779.9 million and
borrowings increased 31.0% to $472.9 million. Net interest margin improved
despite the adverse effects of a flattening yield curve and declining market
rates and loan pricing spreads, reflecting the acquisition of Towne Bank and
continuing changes in the asset and liability mix.

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INTEREST INCOME. Interest income for the quarter ended September 30, 1998, was
$27.7 million compared to $21.3 million for the quarter ended September 30,
1997, an increase of $6.4 million, or 29.9%. The increase in interest income
was a result of a $263.2 million, or 25.2%, growth in the average balance of
interest-earning assets combined with a 30 basis point increase in the average
yield on those assets, which rose from 8.11% in the quarter ended September
1997, to 8.41% in September 1998. Average loans receivable for the second
quarter of fiscal 1999 increased by $218.7 million, or 29.9%, when compared to
the same quarter in fiscal 1998. Interest income on loans increased by $5.9
million, or 36.4%, compared to the same quarter a year earlier, reflecting the
impact of the increase in average loan balances and a 43 basis point increase
in the yield on those balances. Much of the increased yield on the loan
portfolio is attributable to the addition of the TB loans which generally
carry higher rates of interest than many of the loans held by FSBW and IEB.
Average loans receivable represented 72.8% of average earning assets for the
quarter ended September 30, 1998, compared to 67.4% for the same period a year
earlier. The combined average balance of mortgage-backed and investment
securities and FHLB stock for the second quarter of fiscal 1999 increased
$44.5 million compared to the second quarter of fiscal 1998, although interest
and dividend income from those investments increased by only $480,000 for the
September 1998 quarter compared to September 1997. The nominal increase of
interest income on this portfolio largely reflects that while the average
balance of mortgage-backed obligations increased by $29.6 million over the
same quarter a year earlier, the yield on those securities declined 45 basis
points. The decline in the yield on this portfolio primarily reflects a
decline in market rates which resulted in decreased yields on many adjustable
rate securities which comprise the largest portion of this portfolio and from
accelerated amortization of net premiums as a result of increased prepayments
on the underlying mortgage loans. Average balances for other investment
securities and deposits increased $14.9 million, although the yield on those
balances declined 2 basis points also reflecting declining market rates.
Holdings of FHLB stock (excluding the TB acquisition) increased commensurate
with the growth in FHLB advances and the yield on that stock decreased 47
basis points.

Interest income for the six months ended September 30, 1998 increased $12.1
million, or 29.3%, from the comparable period in fiscal 1998. Interest income
from loans increased $11.8 million, or 38.1%, from the comparable period in
fiscal 1998. The majority of the increase from loan interest income reflected
the impact of a $223.4 million growth in average loans receivable balances
combined with a 43 basis point increase in the yield on the loan balances.
Interest income from mortgage-backed and investment securities and FHLB stock
for the six months ended September 30, 1998, increased a modest $262,000, from
$10.3 million in fiscal 1998, to $10.5 million in fiscal 1998, reflecting a
$33.9 million increase in average balances offset by a 50 basis point decrease
in yield. The yield on average earning assets increased from 8.13% for the six
months ended September 30, 1997, to 8.39% for the six months ended September
30, 1998.

INTEREST EXPENSE. Interest expense for the quarter ended September 30, 1998,
was $14.9 million compared to $11.8 million for the comparable period in 1997,
an increase of $3.2 million, or 26.9%. The increase in interest expense was
due to the $273.4 million growth in average interest-bearing liabilities. The
increase in average interest-bearing liabilities in the quarter ended
September 1998 was largely due to a $185.7 million increase in the average
balance of deposits combined with an $87.8 million growth in average FHLB
advances and other borrowings. The acquisition of Towne Bank on April 1, 1998
increased deposits $133.6 million. This acquisition plus $52.1 million of
additional non-acquisition deposit growth resulted in a $1.9 million increase
in deposit related interest expense. The average rate on those deposits
decreased slightly from 4.42% for the quarter ended September 30, 1997, to
4.35% for the quarter ended September 30, 1998. Average FHLB advances totaled
$347.2 million during the quarter ended September 30, 1998, as compared to
$280.0 million during the quarter ended September 30, 1997, resulting in a
$934,000 increase in related interest expense. The average rate paid on those
advances decreased from 6.11% for the quarter ended September 30, 1997, to
5.99% for the comparable period in 1998. Other borrowings consist of retail
repurchase agreements with customers and repurchase agreements with investment
banking firms secured by certain investment securities. The average balance
for other borrowings increased $20.6 million from $73.8 million for the
quarter ended September 30, 1997, to $94.4 million for the same period in
1998, and the related interest expense increased $300,000, from $1.1 million
to $1.4 million for the respective periods. The majority of this growth in
other borrowings reflects an increase in repurchase agreements with investment
banking firms which increased $12.5 million at September 30, 1998. The cost of
other borrowings remained at 5.76% for the quarters ended September 30, 1998
and 1999.

A comparison of total interest expense for the six months ended September 30,
1998, shows an increase of $6.4 million, or 28.4%, from the comparable period
in September 1997. The increase in interest expense reflects an increase in
average deposits of $184.0 million combined with an $84.1 million increase in
FHLB advances and other borrowings. The effect on interest expense of the
$268.1 million increase in average interest-bearing liabilities was slightly
reduced by a 6 basis point decrease in the interest rate paid on those
liabilities.

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The following tables provide additional comparative data on the Company's
operating performance:
Quarters Ended Six Months Ended
Average Balances September 30 September 30
---------------- ---------------- ------------------
(in thousands) 1998 1997 1998 1997
---- ---- ---- ----
Investment securities and
deposits $ 118,315 $ 107,753 $ 119,634 $ 110,905
Mortgage-backed obligations 217,417 187,862 206,187 185,157

Loans 950,957 732,216 927,977 704,555
FHLB stock 18,987 14.640 18,071 13,891
---------- ---------- ---------- ----------
Total average interest-
earning asset 1,305,676 1,086,544 1,271,869 1,014,508

Non-interest-earning assets 73,677 44,073 74,806 41,832
---------- ---------- ---------- ----------
Total average assets $1,379,353 $1,086,544 $1,346,675 $1,056,340
========== ========== ========== ==========

Deposits $ 758,165 $ 572,506 $ 746,323 $ 562,295
Advances from FHLB 347,178 280,034 325,425 263,992
Other borrowings 94,368 73,758 93,394 70,711
---------- ---------- ---------- ----------
Total average interest-
bearing liabilities 1,199,711 926,298 1,165,142 896,998
Non-interest-bearing liabilities 9,341 8,113 10,198 8,117
---------- ---------- ---------- ----------
Total average liabilities 1,209,052 934,411 1,175,340 905,115

Equity 170,301 152,133 171,335 151,225
---------- ---------- ---------- ----------
Total average
liabilities and equity $1,379,353 $1,086,544 $1,346,675 $1,056,340
========== ========== ========== ==========

Interest Rate Yield/Expense (rates are annualized)
--------------------------------------------------
Interest Rate Yield:
Investment securities and
deposits 6.14% 6.13% 6.10% 6.15%
Mortgage-backed obligations 6.25% 6.70% 5.98% 6.80%
Loans 9.20% 8.77% 9.23% 8.80%
FHLB stock 7.52% 7.99% 7.65% 7.77%
---------- ---------- --------- ---------
Total interest rate yield on
interest-earning assets 8.41% 8.11% 8.39% 8.13%
---------- ---------- --------- ----------
Interest Rate Expense:
Deposits 4.35% 4.42% 4.37% 4.41%
Advances from FHLB 5.99% 6.11% 6.03% 6.04%
Other borrowings 5.76% 5.72% 5.74% 5.74%
---------- ---------- --------- ---------
Total interest rate
expense on interest-
bearing liabilities 4.93% 5.03% 4.94% 5.00%
---------- ---------- --------- ---------
Interest spread 3.48% 3.08% 3.45% 3.13%
========== ========== ========= =========

Net interest margin on
interest earning assets 3.88% 3.64% 3.86% 3.72%
---------- ---------- --------- --------

Additional Key Financial Ratios (ratios are annualized)
------------------------------------------------------
Return on average assets 1.14% 1.20% 1.11% 1.24%
Return on average equity 9.24% 8.60% 8.75% 8.63%
Average equity/average assets 12.35% 14.00% 12.72% 14.32%
Average interest-earning assets/
interest-bearing liabilities 108.83% 112.54% 109.16% 113.10%
Non-interest [other operating]
expenses/average assets
Excluding amortization of costs
in excess of net assets
acquired (goodwill) 1.99% 1.79% 1.99% 1.81%
Including amortization of costs
in excess of net assets
acquired (goodwill) 2.15% 1.88% 2.16% 1.90%
Efficiency ratio [non-interest
(other operating) expenses/
revenues]
Excluding amortization of costs
in excess of net assets
acquired (goodwill) 47.55% 46.03% 47.93% 45.78%
Including amortization of costs
in excess of net assets
acquired (goodwill) 51.46% 48.13% 52.00% 47.92%

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PROVISION FOR LOAN LOSSES. During the quarter ended September 30, 1998, the
provision for loan losses was $703,000, compared to $400,000 for the quarter
ended September 30, 1997, an increase of $303,000. A comparison of the
provision for loan losses for the six month periods ended September 30, 1998
and 1997 shows an increase of $615,000 from $755,000 in fiscal 1998 to $1.4
million in fiscal 1999. This increase in the provision for losses reflects
more significant growth and a higher level of net charge-offs for the six
month period as well as changes in the portfolio composition. Management
believes the higher level of charge-offs represents isolated events and is not
indicative of changes in the credit quality of the loan portfolio. The
allowance for loan losses net of charge-offs (recoveries) increased by $2.5
million, to $10.4 million at September 30, 1998, compared to $7.9 million at
March 31, 1998. The allowance for losses on loans is maintained at a level
sufficient to provide for estimated losses based on evaluating known and
inherent risks in the loan portfolio and upon management's continuing analysis
of the factors underlying the quality of the loan portfolio. These factors
include changes in the size and composition of the loan portfolio, actual loan
loss experience, current and anticipated economic conditions, detailed
analysis of individual loans for which full collectibility may not be assured,
and determination of the existence and realizable value of the collateral and
guarantees securing the loans. Additions to these allowances are charged to
earnings. Provisions for losses that are related to specific assets are
usually applied as a reduction of the carrying value of the assets and charged
immediately against the income of the period. The reserve is based upon
factors and trends identified by management at the time financial statements
are prepared. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Banks' allowance for loan
losses. Such agencies may require the Banks to provide additions to the
allowance based upon judgments different from management. Although management
uses the best information available, future adjustments to the allowance may
be necessary due to economic, operating, regulatory and other conditions
beyond the Banks' control.

The following tables are provided to disclose additional detail on the Banks'
loans and allowance for loan losses (in thousands):

SEPTEMBER 30 March 31
1998 1998
------------ ----------
Loans (including loans held for sale):
Secured by real estate
One to four single family dwellings (SFD) $ 428,711 $ 423,850
Commercial & multifamily 253,312 167,859
Construction & land-secured 182,739 132,409
Commercial & agribusiness 149,336 67,611
Consumer, including credit cards 38,353 30,842
----------- -----------
$ 1,052,451 $ 822,571
Less loans in process 71,960 54,500
Less deferred fees and discounts 3,593 3,297
Less allowance for loan losses 10,418 7,857
----------- -----------
Total net loans at end of period $ 966,480 $ 756,917
=========== ===========

Allowance for loan losses as a percentage
of gross principal of loans outstanding 0.99% 0.96%

Quarters Ended Six Months Ended
September 30 September 30
---------------- ------------------
1998 1997 1998 1997
---- ---- ---- ----
Change in allowance for loan
losses:
Balance at beginning of the
period $ 9,717 $ 6,955 $ 7,857 $ 6,748
Acquisition of TB -- -- 1,616 --
Provision for loan losses 703 400 1,370 755
Recoveries 112 3 181 10
Charge-offs (114) (171) (606) (326)
------- ------- ------- -------
Balance at end of the period $10,418 $ 7,187 $10,418 $ 7,187
======= ======= ======= =======
Charge-offs as a percentage of
average net book value of loans
outstanding for the period. 0.01% 0.02% 0.07% 0.05%

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OTHER OPERATING INCOME. Other operating income increased $679,000 from $1.1
million for the quarter ended September 30, 1997, to $1.8 million for the
quarter ended September 30, 1998. The increase included a $184,000 increase in
other fees and service charges due largely to the addition of TB operations,
combined with increases in fee income at FSBW and IEB reflecting deposit
growth and pricing adjustments. There also was a $340,000 increase in net
gains on loans sold in the quarter ended September 30, 1998, as compared to
the same period in 1997. This increase primarily reflects increases in IEB's
residential mortgage banking operations, and increased sales of loans, with
servicing retained, by FSBW which increased the volume of loans sold in the
secondary market over the comparable period in the prior year. The volume of
loan sales and related net gain on sale of loans increased from $17.2 million
and $288,000, respectively, for the quarter ended September 30, 1997, to $35.0
million and $628,000, respectively, for the quarter ended September 30, 1998.
Increased sales of loans at FSBW were designed to curtail the rate of growth
in relatively low yielding fixed rate residential mortgages during this period
of low market rates and to reduce its exposure to the risk of rising interest
rates. In addition miscellaneous other income for the September 1998 quarter
increased $160,000 from the comparable quarter in 1997 reflecting a $102,000
gain on the sale of real property by IEB. That property was originally
purchased for a potential administration building but was sold when management
decided to add to and remodel the current building. This gain on sale combined
with increases in ATM fees from non-customers comprised the majority of the
increase.

Other operating income for the six months ended September 30, 1998, increased
$1.3 million from the comparable period in 1997. The $440,000 increase in fee
income was due largely to the addition of six months of TB's operations in the
current fiscal 1999 period. The $677,000 increase in gains from the sale of
loans and securities for the six months ended September 30, 1998 also reflects
the inclusion of TB's operations as well as the previously noted increased
sales of residential mortgage loans by FSBW. The $164,000 increase in
miscellaneous other income reflects the previously noted gain on the sale of
IEB real property and increases in non-customer ATM fees.

OTHER OPERATING EXPENSES. Other operating expenses increased $2.4 million from
$5.1 million for the quarter ended September 30, 1997, to $7.5 million for the
quarter ended September 30, 1998. The increase in expenses was largely due to
the inclusion of $1.7 million of TB's operating expenses in the second quarter
of fiscal 1999 that were not present in fiscal 1998. The increase in other
operating expenses was partially offset by a $152,000 increase in capitalized
loan origination costs resulting from an increased volume in loan origination.
In addition to the acquisition of Towne Bank, increases in other operating
expenses reflect the overall growth in assets and liabilities, customer
relationships and complexity of operations as FWWB continues to expand.
Despite the high operating expenses associated with transitioning FWWB to more
of a commercial bank profile, FWWB's efficiency ratio, excluding the
amortization of goodwill, increased only 1.52 percentage points, to 47.55%,
for the second quarter of fiscal 1999, from 46.03% for the same period in
fiscal 1998. Other operating expenses as a percentage of average assets were
2.15% (1.99% excluding the amortization of goodwill) for the quarter ended
September 30, 1998, compared to 1.88% (1.79% excluding the amortization of
goodwill) for the quarter ended September 30, 1997.

Other operating expenses for the six months ended September 30, 1998 increased
$4.6 million from $10.0 million for the first six months of fiscal 1998 to
$14.6 million in fiscal 1999. As explained earlier, the increase is largely
due to the inclusion of $3.4 million of TB's operating expenses for the 6
month fiscal 1999 period. The balance of the increase reflects the previously
noted overall growth in FWWB's operations.

INCOME TAXES. Income tax expense was $2.4 million for the quarter ended
September 30, 1998, compared to $1.8 million for the comparable quarter in
1997. The $555,000 increase in the provision for income taxes reflects the
higher level of income being taxed at higher effective rates due to the phase
out of the 34% surtax exemption; the net effect of IEB paying Oregon state
income taxes; and the fact that the expenses from the amortization of costs in
excess of net assets acquired in purchasing IEB and TB and part of the expense
recorded in the release of ESOP shares are not deductible for tax purposes.
The Company's effective tax rates for the quarters ended September 30, 1998
and 1997, were 38% and 36%, respectively. Income tax expense for the six
months ended September 30, 1998 increased $934,000 from $3.6 million for the
six months ended September 30, 1997, to $4.6 million for the comparable period
in 1998. The Company's effective tax rate increased to 38% for the six months
ended September 30, 1998, from 36% for the comparable period in 1997. This
increase was due to the same reasons the income tax provision for the quarter
increased.

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ASSET QUALITY

The following tables are provided to disclose additional details on asset
quality (in thousands):

SEPTEMBER 30 March 31
1998 1998
------------ ----------
Non-performing assets at end of the period:
Non-performing loans:
Delinquent loans on non-accrual status $ 2,618 $ 1,270
Delinquent loans on accrual status 301 150
----------- -----------
Total non-performing loans 2,919 1,420
Real estate owned (REO) 1,518 882
----------- -----------
Total non-performing assets at end
of the period $ 4,437 $ 2,302
=========== ===========
Non-performing loans as a percentage of total
net loans at end of the period 0.30% 0.19%
Ratio of allowance for loan losses to non-
performing loans at end of the period 357% 553%
Non-performing assets as a percentage of total
assets at end of the period. 0.31% 0.20%
Troubled debt restructuring [TDR's]
at end of the period $ 250 $ 305
----------- -----------
Troubled debt restructuring as a percentage of:
Total gross principal of loans outstanding
at end of the period 0.02% 0.04%
Total assets at end of the period 0.02% 0.03%

MARKET RISK AND ASSET/LIABILITY MANAGEMENT

The financial condition and operation of the Company are influenced
significantly by general economic conditions, including the absolute level of
interest rates as well as changes in interest rates and the slope of the yield
curve. The Company's profitability is dependent to a large extent on its net
interest income, which is the difference between the interest received from
its interest-earning assets and the interest expense incurred on its
interest-bearing liabilities.

The activities of the Company, like all financial institutions, inherently
involve the assumption of interest rate risk. Interest rate risk is the risk
that changes in market interest rates will have an adverse impact on the
institution's earnings and underlying economic value. Interest rate risk is
determined by the maturity and repricing characteristics of an institution's
assets, liabilities, and off-balance-sheet contracts. Interest rate risk is
measured by the variability of financial performance and economic value
resulting from changes in interest rates. Interest rate risk is the primary
market risk impacting the Company's financial performance.

The greatest source of interest rate risk to the Company results from the
mismatch of maturities or repricing intervals for rate sensitive assets,
liabilities and off-balance-sheet contracts. This mismatch or gap is generally
characterized by a substantially shorter maturity structure for
interest-bearing liabilities than interest-earning assets. Additional interest
rate risk results from mismatched repricing indices and formulae (basis risk
and yield curve risk), and product caps and floors and early repayment or
withdrawal provisions (option risk), which may be contractual or market
driven, that are generally more favorable to customers than to the Company.

The principal objectives of asset/liability management are to evaluate the
interest-rate risk exposure of the Company; to determine the level of risk
appropriate given the Company's operating environment, business plan
strategies, performance objectives, capital and liquidity constraints, and
asset and liability allocation alternatives; and to manage the Company's
interest rate risk consistent with regulatory guidelines and approved policies
of the Board of Directors. Through such management the Company seeks to reduce
the vulnerability of its earnings and capital position to changes in thelevel
of interest rates. The Company's actions in this regard are taken under the
guidance of the Asset/Liability Management Committee, which is comprised of
members of the Company's senior management. The committee closely monitors the
Company's interest sensitivity exposure, asset and liability allocation
decisions, liquidity and capital positions, and local and national economic
conditions and attempts to structure the loan and investment portfolios and
funding sources of the Company to maximize earnings within acceptable risk
tolerances.

18
<PAGE>
<PAGE>
The Company's primary monitoring tool for assessing interest rate risk is
asset/liability simulation modeling which is designed to capture the dynamics
of balance sheet, interest rate and spread movements and to quantify
variations in net interest income resulting from those movements under
different rate environments. The sensitivity of net interest income to changes
in the modeled interest rate environments provides a measurement of interest
rate risk. The Company also utilizes market value analysis, which addresses
changes in estimated net market value of equity arising from changes in the
level of interest rates. The net market value of equity is estimated by
separately valuing the Company's assets and liabilities under varying interest
rate environments. The extent to which assets gain or lose value in relation
to the gains or losses of liability values under the various interest rate
assumptions determines the sensitivity of net equity value to changes in
interest rates and provides an additional measure of interest rate risk.

The interest rate sensitivity analysis performed by the Company incorporates
beginning of the period rate, balance and maturity data, using various levels
of aggregation of that data, as well as certain assumptions concerning the
maturity, repricing, amortization and prepayment characteristics of loans and
other interest-earning assets and the repricing and withdrawal of deposits and
other interest-bearing liabilities into an asset/liability computer simulation
model. The Company updates and prepares simulation modeling at least quarterly
for review by senior management and the directors. The Company believes the
data and assumptions are realistic representations of its portfolio and
possible outcomes under the various interest rate scenarios. Nonetheless, the
interest rate sensitivity of the Company's net interest income and net market
value of equity could vary substantially if different assumptions were used or
if actual experience differs from the assumptions used.

SENSITIVITY ANALYSIS

The table of Interest Rate Risk Indicators, sets forth as of September 30,
1998, the estimated changes in the Company's net interest income over a one
year time horizon and the estimated changes in market value of equity based on
the indicated interest rate environments.

TABLE OF INTEREST RATE RISK INDICATORS

Estimated Change in
---------------------------------------
Change (In Basis Points) Net Interest Income
in Interest Rates (1) Next 12 Months Net Market Value
------------------------ ---------------------------------------
(Dollars in thousands)

+400 $ 1,255 2.6% $ (55,776) (30.2%)
+300 1,804 3.8% (39,616) (21.5%)
+200 1,795 3.7% (21,131) (11.4%)
+100 1,186 2.5% (4,646) (2.5%)
0 0 0 0 0
-100 (1,668) (3.5%) (1,278) (0.7%)
-200 (3,849) (8.0%) (8,169) (4.4%)
-300 (6,420) (13.4%) (17,183) (9.3%)
-400 (9,443) (19.7%) (30,393) (16.5%)

- - ----------
(1) Assumes an instantaneous and sustained uniform change in market interest
rates at all maturities.

Another although less reliable monitoring tool for assessing interest rate
risk is "gap analysis." The matching of the repricing characteristics of
assets and liabilities may be analyzed by examining the extent to which such
assets and liabilities are "interest sensitive" and by monitoring an
institution's interest sensitivity "gap." An asset or liability is said to be
interest sensitive within a specific time period if it will mature or reprice
within that time period. The interest rate sensitivity gap is defined as the
difference between the amount of interest-earning assets anticipated, based
upon certain assumptions, to mature or reprice within a specific time period
and the amount of interest-bearing liabilities anticipated to mature or
reprice, based upon certain assumptions, within that same time period. A gap
is considered positive when the amount of interest sensitive assets exceeds
the amount of interest sensitive liabilities. A gap is considered negative
when the amount of interest sensitive liabilities exceeds the amount of
interest sensitive assets. Generally, during a period of rising rates, a
negative gap would tend to adversely affect net interest income while a
positive gap would tend to result in an increase in net interest income.
During a period of falling interest rates, a negative gap would tend to result
in an increase in net interest income while a positive gap would tend to
adversely affect net interest income.

19
<PAGE>
<PAGE>
Certain shortcomings are inherent in gap analysis. For example, although
certain assets and liabilities may have similar maturities or periods of
repricing, they may react in different degrees to changes in market rates.
Also, the interest rates on certain types of assets and liabilities may
fluctuate in advance of changes in market rates, while interest rates on other
types may lag behind changes in market rates. Additionally, certain assets,
such as ARM loans, have features that restrict changes in interest rates on a
short-term basis and over the life of the asset. Further, in the event of a
change in interest rates, prepayment and early withdrawal levels would likely
deviate significantly from those assumed in calculating the table. Finally,
the ability of some borrowers to service their debt may decrease in the event
of a severe interest rate increase.

The table of Interest Sensitivity Gap table, presents the Company's interest
sensitivity gap between interest-earning assets and interest-bearing
liabilities at September 30, 1998. The table sets forth the amounts of
interest-earning assets and interest-bearing liabilities which are anticipated
by the Company, based upon certain assumptions, to reprice or mature in each
of the future periods shown. At September 30, 1998, total interest-earning
assets maturing or repricing within one year exceeded total interest-bearing
liabilities maturing or repricing in the same time period by $65.1 million,
representing a one-year gap to total assets ratio of 4.53%.

20
<PAGE>
<PAGE>
<TABLE>

TABLE OF INTEREST SENSITIVITY GAP
6 Months
Within to One 1-3 3-5 5-10 Over 10
6 Months Year Years Years Years Years Total
-------- ---- ----- ----- ----- ----- -----
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets(1):
Construction loans $ 73,905 $ 32,160 $ 918 $ 396 $ 30 $ -- $ 107,409
Fixed-rate mortgage loans 60,536 44,074 151,115 122,017 95,451 32,253 505,446
Adjustable-rate mortgage loans 96,365 58,008 15,595 10,269 -- -- 180,237
Fixed-rate mortgage-backed
securities 11,904 13,672 36,331 11,986 5,073 328 79,294
Adjustable-rate mortgage-backed
securities 140,435 1,974 -- -- -- -- 142,409
Fixed-rate agriculture/
commercial loans 7,051 4,535 10,902 14,200 6,877 404 43,969
Adjustable-rate agriculture/
commercial loans 103,684 -- -- -- -- -- 103,684
Consumer and other loans 11,994 3,157 9,380 5,600 1,578 8,472 40,181
Investment securities and
interest-bearing deposits 69,008 16,670 18,829 8,685 17,720 25,181 156,093
-------- -------- -------- -------- -------- -------- ----------
Total rate-sensitive assets 574,882 174,250 243,070 173,153 126,729 66,638 1,358,722
-------- -------- -------- -------- -------- -------- ----------
Interest-bearing liabilities(2):
Regular savings and NOW accounts 17,999 17,998 41,997 41,997 -- -- 119,991
Money market deposit accounts 52,261 31,357 20,904 -- -- -- 104,522
Certificates of deposit 228,300 131,384 75,908 30,071 9,675 20 475,358
FHLB advances 57,250 83,100 110,071 91,690 38,500 249 380,860
Other borrowings 50,898 -- -- 25,000 -- -- 75,898
Retail repurchase agreements 13,162 304 1,336 1,085 229 -- 16,116
-------- -------- -------- -------- -------- -------- ----------
Total rate-sensitive
liabilities 419,870 264,143 250,216 189,843 48,404 269 1,172,745
-------- -------- -------- -------- -------- -------- ----------
Excess (deficiency) of interest-
sensitive assets over interest-
sensitive liabilities $155,012 $(89,893) $ (7,146) $(16,690) $ 78,325 $ 66,369 $ 185,977
======== ======== ======== ======== ======== ======== ==========
Cumulative excess (deficiency) of
interest-sensitive assets $155,012 $ 65,119 $ 57,973 $ 41,283 $119,608 $185,977 $ 185,977
======== ======== ======== ======== ======== ======== ==========
Cumulative ratio of interest-
earning assets to interest-
bearing liabilities 136.92% 109.52% 106.21% 103.67% 110.20 % 115.86% 115.86%
======== ======== ======== ======== ======== ======== ==========
Interest sensitivity gap to
total assets 10.79% (6.26%) (0.50%) (1.16%) 5.45% 4.62% 12.94%
======== ======== ======== ======== ======== ======== ==========
Ratio of cumulative gap to
total assets 10.79% 4.53% (4.04%) 2.87% 8.33% 12.94% 12.94%
======== ======== ======== ======== ======== ======== ==========

(footnotes on following page)

21
</TABLE>
<PAGE>
<PAGE>
Footnotes for Table of Interest Sensitivity Gap
- - -----------------------------------------------
(1) Adjustable-rate assets are included in the period in which interest rates
are next scheduled to adjust rather than in the period in which they are due
to mature, and fixed-rate assets are included in the periods in which they are
scheduled to be repaid based upon scheduled amortization, in each case
adjusted to take into account estimated prepayments. Mortgage loans and other
loans are not reduced for allowances for loan losses and non-performing loans.
Mortgage loans, mortgage-backed securities, other loans, and investment
securities are not adjusted for deferred fees and unamortized acquisition
premiums and discounts.

(2) Adjustable- and variable-rate liabilities are included in the period in
which interest rates are next scheduled to adjust rather than in the period
they are due to mature. Although the Banks' regular savings, demand, NOW, and
money market deposit accounts are subject to immediate withdrawal, management
considers a substantial amount of such accounts to be core deposits having
significantly longer maturities. For the purpose of the gap analysis, these
accounts have been assigned decay rates to reflect their longer effective
maturities. If all of these accounts had been assumed to be short-term, the
one year cumulative gap of interest-sensitive assets would have been negative
$39.8 million or (2.77%) of total assets. Interest-bearing liabilities for
this table exclude certain non-interest bearing deposits which are included in
the average balance calculations in the earlier Table I, Analysis of Net
Interest Spread.

LIQUIDITY AND CAPITAL RESOURCES

FWWB's primary sources of funds are deposits, FHLB advances, proceeds from
loan principal and interest payments and sales of loans, and the maturity of,
and interest income on mortgage-backed and investment securities. While
maturities and scheduled amortization of loans and mortgage-backed and
investment securities are a predictable source of funds, deposit flows and
mortgage prepayments are greatly influenced by market interest rates, general
economic conditions and competition.

The primary investing activity of FWWB is the origination and purchase of
mortgage, consumer, and commercial loans through its subsidiary Banks, FSBW,
IEB and TB. During the six months ended September 30, 1998, the Banks
originated $320.4 million of loans and purchased $56.7 million of loans. In
addition, during this six month period, funds were used to purchase $7.3
million of treasury stock and pay out $7.7 million for the acquisition of
Towne Bancorp, Inc. These activities were funded primarily by principal
repayments on loans and securities, sales of loans, increases in FHLB
advances, and deposit growth. For the six months ended September 30, 1998,
principal repayments on loans totaled $211.7 million and the Banks' proceeds
from the sale of mortgage loans totaled $71.5 million. FHLB advances and other
borrowings increased $81.6 million (net of the TB acquisition) for the same
period, and net deposit growth was $43.8 million (net of the TB acquisition).

The Banks must maintain an adequate level of liquidity to ensure the
availability of sufficient funds to support loan growth and deposit
withdrawals, to satisfy financial commitments and to take advantage of
investment opportunities. At September 30, 1998, the Banks had undisbursed
loans in process totaling $72.0 million. The Banks generally maintain
sufficient cash and readily marketable securities to meet short term liquidity
needs. FSBW also maintains a credit facility with the FHLB of Seattle, which
provides for advances which in aggregate may equal up to 45% of FSBW's total
assets, which as of September 30, 1998, would give FSBW a total credit line of
$473.4 million. Advances under this credit facility totaled $375.3 million, or
35.7% of FSBW's assets at September 30, 1998. IEB and TB also maintain credit
facilities with various financial institutions, including the FHLB of Seattle,
that would allow them to borrow up to $24.8 million.

At September 30, 1998, savings certificates amounted to $475.4 million, or
61%, of the Banks' total deposits, including $357.7 million which were
scheduled to mature within one year. Historically, the Banks have been able to
retain a significant amount of their deposits as they mature. Management
believes it has adequate ability to fund all loan commitments by using
deposits, FHLB of Seattle advances, other borrowings and the sale of mortgage
loans or securities, and that it can adjust the offering rates of savings
certificates to retain deposits in changing interest rate environments.

22
<PAGE>
<PAGE>
CAPITAL REQUIREMENTS

Federally-insured state-chartered banks are required to maintain minimum
levels of regulatory capital. Under current FDIC regulations, insured state-
chartered banks generally must maintain (i) a ratio of Tier 1 leverage capital
to total assets of at least 3.0% (4.0% to 5.0% for all but the most highly
rated banks), (ii) a ratio of Tier 1 capital to risk weighted assets of at
least 4.0% and (iii) a ratio of total capital to risk weighted assets of at
least 8.0%. At September 30, 1998, FWWB's banking subsidiaries exceeded all
current regulatory capital requirements to be classified as well capitalized
institutions, the highest regulatory standard. In order to be categorized as a
well capitalized institution, the FDIC requires banks it regulates to maintain
a leverage ratio, defined as Tier 1 capital divided by total regulatory
assets, of at least 5.00%; Tier 1 (or core) capital of at least 6.00% of
risk-weighted assets; and total capital of at least 10.00% of risk-weighted
assets.

FWWB, as a bank holding company, is regulated by the Federal Reserve Board
(FRB). The FRB has established capital requirements for bank holding companies
that generally parallel the capital requirements of the FDIC for banks with
$150 million or more in total consolidated assets. FWWB's total regulatory
capital must equal 8% of risk-weighted assets and one half of the 8% (4%) must
consist of Tier 1 (core) capital.

The actual regulatory capital ratios calculated for FWWB along with the
minimum capital amounts and ratios for capital adequacy purposes were as
follows (dollars in thousands):
Minimum for capital
Actual adequacy purposes
--------------------- --------------------
Amount Ratio Amount Ratio
------ ----- ------ -----
SEPTEMBER 30, 1998:
FWWB-consolidated
Total capital to risk-
weighted assets $ 149,739 16.88% $70,954 8.00%
Tier 1 capital to risk-
weighted assets 139,321 15.71 35,477 4.00
Tier 1 leverage capital
To average assets 139,321 10.34 53,890 4.00

23
<PAGE>
<PAGE>
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time FWWB or its subsidiaries are engaged in legal proceedings in
the ordinary course of business, none of which is considered to have a
material impact on the FWWB's financial position or results of operations.

ITEM 2. CHANGES IN SECURITIES

Not Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS

The Annual meeting of stockholders of the Company (Meeting) was held on July
24, 1998. The results of the votes on the matters presented at the Meeting are
as follows:

1. The following individuals were elected as directors, each for a
three-year term:

Votes for Votes withheld
--------- --------------
Robert D. Adams 9,658,611 50,348
Wilber Pribilsky 9,658,311 50,648
Gary Sirmon 9,658,511 50,448

The terms of Directors Dean Mitchell, R.R. "Pete" Reid, Marvin
Sundquist, Morris Ganguet, Jess Foster, Rick Meikle and David Casper
continued.

2. Approved that the Company change its state of incorporation from
Delaware to Washington through a merger of the Company with First
Washington Bancorp, Inc., a newly formed, wholly owned Washington
subsidiary.

# of Votes # of Votes # of Votes
In Favor Against Abstaining
-------- ------- ----------
7,458,343.006 224,340.000 38,708.094

3. Approved the adoption of the First Washington Bancorp, Inc. 1998
Stock Option Plan

# of Votes # of Votes # of Votes
In Favor Against Abstaining
-------- ------- ----------
7,842,623.79 1,727,754.00 71,029.21

ITEM 5. OTHER INFORMATION

Not Applicable

24
<PAGE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibit 27 - Financial data schedule for the Six Months Ended
September 30, 1998
Exhibit 27a - Restated Financial data schedule for the quarter
ended June 30, 1996
Exhibit 27b - Restated Financial data schedule for the six months ended
September 30, 1996
Exhibit 27c - Restated financial data schedule for the six months ended
December 31, 1996
Exhibit 27d - Restated financial date schedule for the year ended March
31, 1997
Exhibit 27e - Restated financial data schedule for the quarter ended
June 30 1997
Exhibit 27f - Restated financial data schedule for the six months
ended September 30, 1997
Exhibit 27g - Restated financial data schedule for the six months ended
December 31, 1997
Exhibit 27h - Restated financial data schedule for the year ended March
31, 1998
Exhibit 27i - Restated financial data schedule for the quarter ended
June 30, 1998

Report (s) on Form 8-K filed during the quarter ended September 30, 1998, are
as follows:

Date Filed Purpose
---------- -------
July 24, 1998 Announcement of approval by Stockholders
of First Savings Bank of Washington
Bancorp, Inc., a Delaware Corporation,
reincorporation from the State of Delaware
to the State of Washington. The new
corporation is now known as First
Washington Bancorp, Inc.

25
<PAGE>
<PAGE>
SIGNATURES
- - ----------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

First Washington Bancorp, Inc.

November 16, 1998 /s/ Gary Sirmon
. -------------------------------
Gary Sirmon
President and Chief Executive Officer

November 16, 1998 /s/ D. Allan Roth
. -------------------------------
D. Allan Roth
Secretary and Treasurer

26
<PAGE>
<PAGE>
Exhibit 27a
Restated Financial Data Schedule (dollars in thousands except per share data)

This schedule contains summary financial information extracted from the
consolidated financial statements of First Washington Bancorp, Inc. for the
quarter ended June 30, 1996 and is qualified in its entirety by reference to
such financial statements.

Financial Data
as of or for the quarter
Item Number ended June 30, 1996 Item Description
- - ----------- ------------------- ----------------
9-03 (1) $ 8,406 . . . .Cash and due from banks
9-03 (2) 1 . . . .Interest-bearing deposits
9-03 (3) -0- . . . Federal funds sold - purchased
9-03 (4) -0- . . . Trading account assets
9-03 (6) 283,603 . . . .Investment and mortgage backed
securities held for sale
9-03 (6) 1,966 . . . .Investment and mortgage backed
securities held to maturity -
carrying value
9-03 (6) 1,966 . . . .Investment and mortgage backed
securities held to maturity -
Market value
9-03 (7) 443,110 . . . .Loans
9-03 (7) (2) 4,434 . . . .Allowance for loan losses
9-03 (11) 764,685 . . . .Total assets
9-03 (12) 375,343 . . . .Deposits
9-03 (13) 18,644 . . . .Short-term borrowings
9-03 (15) 11,351 . . . .Other liabilities
9-03 (16) 210,507 . . . .Long-term debt
9-03 (19) -0- . . .Preferred stock - mandatory
redemption
9-03 (20) -0- . . .Preferred stock - no mandatory
redemption
9-03 (21) 109 . . . .Common stocks
9-03 (22) 148,731 . . . .Other stockholders' equity
9-03 (23) 764,685 . . . .Total liabilities and
stockholders' equity
9-04 (1) 8,932 . . . .Interest and fees on loans
9-04 (2) 3,112 . . . .Interest and dividends on
investments
9-04 (4) 1,741 . . . .Other interest income
9-04 (5) 13,785 . . . .Total interest income
9-04 (6) 4,627 . . . .Interest on deposits
9-04 (9) 7,566 . . . .Total interest expense
9-04 (10) 6,219 . . . .Net interest income
9-04 (11) 513 . . . .Provision for loan losses
9-04 (13) (h) 4 . . . .Investment securities gains/
(losses)
9-04 (14) 2,884 . . . .Other expenses
9-04 (15) 3,277 . . . .Income/loss before income tax
9-04 (17) 2,393 . . . .Income/loss before
extraordinary items
9-04 (18) -0- . . . Extraordinary items, less tax
9-04 (19) -0- . . . Cumulative change in accounting
principles
9-04 (20) $ 2,393. . . . Net income or loss
9-04 (21) $ 0.24. . . . Earnings per share - basic
9-04 (21) $ 0.22. . . . Earnings per share - diluted
I.B. 5 3.42% . . . Net yield - interest earnings -
actual
III.C.1. (a) $ 672. . . . Loans on non-accrual
III.C.1. (b) 9. . . . Accruing loans past due 90 days
or more
III.C.1. (c) 154. . . . Troubled debt restructuring
III.C.2 -0- . . . Potential problem loans
IV.A.1 4,051. . . . Allowance for loan loss -
beginning of period
IV.A.2 130. . . . Total chargeoffs
IV.A.3 -0- . . . Total recoveries
IV.A.4 4,434. . . . Allowance for loan loss - end
of period
IV.B. 1 -0- . . . Loan loss allowance allocated
to domestic loans
IV.B.2 -0- . . . Loan loss allowance allocated
to foreign loans
IV.B.3 $ 4,434. . . . Loan loss allowance -
unallocated

<PAGE>
<PAGE>
Exhibit 27b
Restated Financial Data Schedule (dollars in thousands except per share data)
This schedule contains summary financial information extracted from the
consolidated financial statements of First Washington Bancorp, Inc. for the
six months ended September 30, 1996 and is qualified in its entirety by
reference to such financial statements.

Financial Data
as of or for the six months
Item Number ended September 30, 1996 Item Description
- - ----------- ------------------------ ----------------
9-03 (1) $ 27,708 . . . .Cash and due from banks
9-03 (2) 23 . . . .Interest-bearing deposits
9-03 (3) 15,475 . . . .Federal funds sold - purchased
9-03 (4) -0- . . .Trading account assets
9-03 (6) 298,989 . . . .Investment and mortgage backed
securities held for sale
9-03 (6) 1,872 . . . .Investment and mortgage backed
securities held to maturity -
carrying value
9-03 (6) 1,872 . . . .Investment and mortgage backed
securities held to maturity -
market value
9-03 (7) 571,925 . . . .Loans
9-03 (7) (2) 6,270 . . . .Allowance for loan losses
9-03 (11) 946,986 . . . .Total assets
9-03 (12) 525,600 . . . .Deposits
9-03 (13) 34,947 . . . .Short-term borrowings
9-03 (15) 17,966 . . . .Other liabilities
9-03 (16) 219,125 . . . .Long-term debt
9-03 (19) -0-. . . .Preferred stock - mandatory
redemption
9-03 (20) -0-. . . .Preferred stock - no mandatory
redemption
9-03 (21) 109 . . . .Common stocks
9-03 (22) 149,239 . . . .Other stockholders' equity
9-03 (23) 946,986 . . . .Total liabilities and
stockholders' equity
9-04 (1) 20,248 . . . .Interest and fees on loans
9-04 (2) 6,331 . . . .Interest and dividends on
investments
9-04 (4) 3,854 . . . .Other interest income
9-04 (5) 30,433 . . . .Total interest income
9-04 (6) 10,061 . . . .Interest on deposits
9-04 (9) 16,573 . . . .Total interest expense
9-04 (10) 13,860 . . . .Net interest income
9-04 (11) 920 . . . .Provision for loan losses
9-04 (13) (h) (208). . . .Investment securities gains/
(losses)
9-04 (14) 9,745 . . . .Other expenses
9-04 (15) 4,244 . . . .Income/loss before income tax
9-04 (17) 3,196 . . . .Income/loss before
extraordinary items
9-04 (18) -0-. . . .Extraordinary items, less tax
9-04 (19) -0-. . . .Cumulative change in accounting
principles
9-04 (20) $ 3,196 . . . .Net income or loss
9-04 (21) $ 0.33 . . . .Earnings per share - basic
9-04 (21) $ 0.30 . . . .Earnings per share - diluted
I.B. 5 3.50%. . . .Net yield - interest earnings -
actual
III.C.1. (a) $ 813 . . . .Loans on non-accrual
III.C.1. (b) 49 . . . .Accruing loans past due 90 days
or more
III.C.1. (c) 149 . . . .Troubled debt restructuring
III.C.2 -0-. . . .Potential problem loans
IV.A.1 4,051 . . . .Allowance for loan loss -
beginning of period
IV.A.2 149 . . . .Total charge offs
IV.A.3 32 . . . .Total recoveries
IV.A.4 6,270 . . . .Allowance for loan loss - end
of period
IV.B. 1 -0-. . . .Loan loss allowance allocated
to domestic loans
IV.B.2 -0-. . . .Loan loss allowance allocated
to foreign loans
IV.B.3 $ 6,270 . . . .Loan loss allowance -
unallocated

<PAGE>
<PAGE>
Exhibit 27c
Restated Financial Data Schedule (dollars in thousands except per share data)
This schedule contains summary financial information extracted from the
consolidated financial statements of First Washington Bancorp, Inc. for the
nine months ended December 31, 1996 and is qualified in its entirety by
reference to such financial statements.

Financial Data
as of or for the Nine months
Item Number ended December 31, 1996 Item Description
- - ----------- ------------------------ ----------------
9-03 (1) $ 32,448 . . . .Cash and due from banks
9-03 (2) 551 . . . .Interest-bearing deposits
9-03 (3) 14,775 . . . .Federal funds sold - purchased
9-03 (4) -0-. . . .Trading account assets
9-03 (6) 294,721 . . . .Investment and mortgage backed
securities held for sale
9-03 (6) 1,281 . . . .Investment and mortgage backed
securities held to maturity -
carrying value
9-03 (6) 1,281 . . . .Investment and mortgage backed
securities held to maturity -
market value
9-03 (7) 601,511 . . . .Loans
9-03 (7) (2) 6,496 . . . .Allowance for loan losses
9-03 (11) 977,075 . . . .Total assets
9-03 (12) 532,472 . . . .Deposits
9-03 (13) 60,800 . . . .Short-term borrowings
9-03 (15) 15,725 . . . .Other liabilities
9-03 (16) 220,212 . . . .Long-term debt
9-03 (19) -0-. . . .Preferred stock - mandatory
redemption
9-03 (20) -0-. . . .Preferred stock - no mandatory
redemption
9-03 (21) 109 . . . .Common stocks
9-03 (22) 147,757 . . . .Other stockholders' equity
9-03 (23) 977,075 . . . .Total liabilities and
stockholders' equity
9-04 (1) 33,091 . . . .Interest and fees on loans
9-04 (2) 15,031 . . . .Interest and dividends on
investments
9-04 (4) 575 . . . .Other interest income
9-04 (5) 48,697 . . . .Total interest income
9-04 (6) 15,886 . . . .Interest on deposits
9-04 (9) 26,364 . . . .Total interest expense
9-04 (10) 22,333 . . . .Net interest income
9-04 (11) 1,151 . . . .Provision for loan losses
9-04 (13) (h) -0-. . . .Investment securities gains/
(losses)
9-04 (14) 14,636 . . . .Other expenses
9-04 (15) 8,794 . . . .Income/loss before income tax
9-04 (17) 6,302 . . . .Income/loss before
extraordinary items
9-04 (18) -0-. . . .Extraordinary items, less tax
9-04 (19) -0-. . . .Cumulative change in accounting
principles
9-04 (20) $ 6,302 . . . .Net income or loss
9-04 (21) $ 0.59 . . . .Earnings per share - basic
9-04 (21) $ 0.59 . . . .Earnings per share - diluted
I.B. 5 3.55%. . . .Net yield - interest earnings -
actual
III.C.1. (a) $ 1,073 . . . .Loans on non-accrual
III.C.1. (b) 331 . . . .Accruing loans past due 90 days
or more
III.C.1. (c) 246 . . . .Troubled debt restructuring
III.C.2 -0-. . . .Potential problem loans
IV.A.1 4,051 . . . .Allowance for loan loss -
beginning of period
IV.A.2 167 . . . .Total charge offs
IV.A.3 45 . . . .Total recoveries
IV.A.4 6,496 . . . .Allowance for loan loss - end
of period
IV.B. 1 -0-. . . .Loan loss allowance allocated
to domestic loans
IV.B.2 -0-. . . .Loan loss allowance allocated
to foreign loans
IV.B.3 $ 6,496 . . . .Loan loss allowance -
unallocated

<PAGE>
<PAGE>
Exhibit 27d
Restated Financial Data Schedule (dollars in thousands except per share data)
This schedule contains summary financial information extracted from the
consolidated financial statements of First Washington Bancorp, Inc. for the
year ended March 31, 1997 and is qualified in its entirety by reference to
such financial statements.

Financial Data
as of or for the year
Item Number ended March 31, 1997 Item Description
- - ----------- ------------------------ ----------------
9-03 (1) $ 32,448 . . . .Cash and due from banks

9-03 (1) $ 24,488 . . . .Cash and due from banks
9-03 (2) 1,866 . . . .Interest-bearing deposits
9-03 (3) 6,983 . . . .Federal funds sold - purchased
9-03 (4) -0-. . . .Trading account assets
9-03 (6) 287,516 . . . .Investment and mortgage backed
securities held for sale
9-03 (6) 987 . . . .Investment and mortgage backed
securities held to maturity -
carrying value
9-03 (6) 987 . . . .Investment and mortgage backed
securities held to maturity -
market value
9-03 (7) 645,881 . . . .Loans
9-03 (7) (2) 6,748 . . . .Allowance for loan losses
9-03 (11) 1,007,633 . . . .Total assets
9-03 (12) 544,967 . . . .Deposits
9-03 (13) 145,146 . . . .Short-term borrowings
9-03 (15) 20,330 . . . .Other liabilities
9-03 (16) 148,554 . . . .Long-term debt
9-03 (19) -0-. . . .Preferred stock - mandatory
redemption
9-03 (20) -0-. . . .Preferred stock - no mandatory
redemption
9-03 (21) 109 . . . .Common stocks
9-03 (22) 148,527 . . . .Other stockholders' equity
9-03 (23) 1,007,633 . . . .Total liabilities and
stockholders' equity
9-04 (1) 46,549 . . . .Interest and fees on loans
9-04 (2) 19,997 . . . .Interest and dividends on
investments
9-04 (4) 746 . . . .Other interest income
9-04 (5) 67,292 . . . .Total interest income
9-04 (6) 21,736 . . . .Interest on deposits
9-04 (9) 36,372 . . . .Total interest expense
9-04 (10) 30,920 . . . .Net interest income
9-04 (11) 1,423 . . . .Provision for loan losses
9-04 (13) (h) 2 . . . .Investment securities gains/
(losses)
9-04 (14) 19,416. . . . Other expenses
9-04 (15) 13,237. . . . Income/loss before income taxes
9-04 (17) 9,314. . . . Income/loss before
extraordinary items
9-04 (18) -0-. . . .Extraordinary items, less tax
9-04 (19) -0-. . . .Cumulative change in accounting
principles
9-04 (20) $ 9,314 . . . .Net income or loss
9-04 (21) $ 0.88 . . . .Earnings per share - basic
9-04 (21) $ 0.87 . . . .Earnings per share - diluted
I.B. 5 3.33%. . . .Net yield - interest earnings -
actual
III.C.1. (a) $ 2,082 . . . .Loans on non-accrual
III.C.1. (b) 30 . . . .Accruing loans past due 90 days
or more
III.C.1. (c) 238 . . . .Troubled debt restructuring
III.C.2 -0-. . . .Potential problem loans
IV.A.1 4,051 . . . .Allowance for loan loss -
beginning of period
IV.A.2 195 . . . .Total charge offs
IV.A.3 53 . . . .Total recoveries
IV.A.4 6,748 . . . .Allowance for loan loss - end
of period
IV.B. 1 6,161 . . . .Loan loss allowance allocated
to domestic loans
IV.B.2 -0-. . . .Loan loss allowance allocated
to foreign loans
IV.B.3 $ 587 . . . .Loan loss allowance -
unallocated

<PAGE>
<PAGE>
Exhibit 27e
Restated Financial Data Schedule (in thousands except per share data)
This schedule contains summary financial information extracted from the
consolidated financial statements of First Washington Bancorp, Inc. for the
quarter ended June 30, 1997 and is qualified in its entirety by reference to
such financial statements.

Financial Data
as of or for the quarter
Item Number ended June 30, 1997 Item Description
- - ----------- ------------------------ ----------------
9-03 (1) $ 32,448 . . . .Cash and due from banks

9-03 (1) $ 15,989 . . . .Cash and due from banks
9-03 (2) 801 . . . .Interest-bearing deposits
9-03 (3) -0-. . . .Federal funds sold - purchased
9-03 (4) -0-. . . .Trading account assets
9-03 (6) 299,397 . . . .Investment and mortgage backed
securities held for sale
9-03 (6) 788 . . . .Investment and mortgage backed
securities held to maturity -
carrying value
9-03 (6) 788 . . . .Investment and mortgage backed
securities held to maturity -
market value
9-03 (7) 708,060 . . . .Loans
9-03 (7) (2) 6,955 . . . .Allowance for loan losses
9-03 (11) 1,074,166 . . . .Total assets
9-03 (12) 551,589 . . . .Deposits
9-03 (13) 74,309 . . . .Short-term borrowings
9-03 (15) 15,635 . . . .Other liabilities
9-03 (16) 279,726 . . . .Long-term debt
9-03 (19) -0-. . . .Preferred stock - mandatory
redemption
9-03 (20) -0-. . . .Preferred stock - no mandatory
redemption
9-03 (21) 109 . . . .Common stocks
9-03 (22) 152,798 . . . .Other stockholders' equity
9-03 (23) 1,074,166 . . . .Total liabilities and
stockholders' equity
9-04 (1) 14,922 . . . .Interest and fees on loans
9-04 (2) 5,056 . . . .Interest and dividends on
investments
9-04 (4) 84 . . . .Other interest income
9-04 (5) 20,062 . . . .Total interest income
9-04 (6) 6,059 . . . .Interest on deposits
9-04 (9) 10,721 . . . .Total interest expense
9-04 (10) 9,341 . . . .Net interest income
9-04 (11) 355 . . . .Provision for loan losses
9-04 (13) (h) 1 . . . .Investment securities gains/
(losses)
9-04 (14) 4,939 . . . .Other expenses
9-04 (15) 5,030 . . . .Income/loss before income tax
9-04 (17) 3,245 . . . .Income/loss before
extraordinary items
9-04 (18) -0-. . . .Extraordinary items, less tax
9-04 (19) -0-. . . .Cumulative change in accounting
principles
9-04 (20) $ 3,245 . . . .Net income or loss
9-04 (21) $ 0.32 . . . .Earnings per share - basic
9-04 (21) $ 0.30 . . . .Earnings per share - diluted
I.B. 5 3.80%. . . .Net yield - interest earnings -
actual
III.C.1. (a) $ 1,523 . . . .Loans on non-accrual
III.C.1. (b) 141 . . . .Accruing loans past due 90 days
or more
III.C.1. (c) 373 . . . .Troubled debt restructuring
III.C.2 -0-. . . .Potential problem loans
IV.A.1 6,748 . . . .Allowance for loan loss -
beginning of period
IV.A.2 155 . . . .Total charge offs
IV.A.3 7 . . . .Total recoveries
IV.A.4 6,955 . . . .Allowance for loan loss - end
of period
IV.B. 1 3,237 . . . .Loan loss allowance allocated
to domestic loans
IV.B.2 -0-. . . .Loan loss allowance allocated
to foreign loans
IV.B.3 $ 3,718 . . . .Loan loss allowance -
unallocated

<PAGE>
<PAGE>
Exhibit 27f
Restated Financial Data Schedule (in thousands except per share data)
This schedule contains summary financial information extracted from the
consolidated financial statements of First Washington Bancorp, Inc. for the
six months ended September 30, 1997 and is qualified in its entirety by
reference to such financial statements.

Financial Data
as of or for the Six Months
Item Number ended September 30, 1997 Item Description
- - ----------- ------------------------ ----------------
9-03 (1) $ 25,896 . . . .Cash and due from banks
9-03 (2) 1,501 . . . .Interest-bearing deposits
9-03 (3) 6,000 . . . .Federal funds sold - purchased
9-03 (4) -0-. . . .Trading account assets
9-03 (6) 287,822 . . . .Investment and mortgage backed
securities held for sale
9-03 (6) 788 . . . .Investment and mortgage backed
securities held to maturity -
carrying value
9-03 (6) 788 . . . .Investment and mortgage backed
securities held to maturity -
market value
9-03 (7) 732,479 . . . .Loans
9-03 (7) (2) 7,187 . . . .Allowance for loan losses
9-03 (11) 1,098,615 . . . .Total assets
9-03 (12) 568,483 . . . .Deposits
9-03 (13) 83,652 . . . .Short-term borrowings
9-03 (15) 18,978 . . . .Other liabilities
9-03 (16) 277,207 . . . .Long-term debt
9-03 (19) -0-. . . .Preferred stock - mandatory
redemption
9-03 (20) -0-. . . .Preferred stock - no mandatory
redemption
9-03 (21) 109 . . . .Common stocks
9-03 (22) 150,186 . . . .Other stockholders' equity
9-03 (23) 1,098,615 . . . .Total liabilities and
stockholders' equity
9-04 (1) 31,100 . . . .Interest and fees on loans
9-04 (2) 10,147 . . . .Interest and dividends on
investments
9-04 (4) 126 . . . .Other interest income
9-04 (5) 41,373 . . . .Total interest income
9-04 (6) 12,432 . . . .Interest on deposits
9-04 (9) 22,475 . . . .Total interest expense
9-04 (10) 18,898 . . . .Net interest income
9-04 (11) 755 . . . .Provision for loan losses
9-04 (13) (h) 2 . . . .Investment securities gains/
(losses)
9-04 (14) 10,107 . . . .Other expenses
9-04 (15) 10,164 . . . .Income/loss before income tax
9-04 (17) 6,542 . . . .Income/loss before
extraordinary items
9-04 (18) -0-. . . .Extraordinary items, less tax
9-04 (19) -0-. . . .Cumulative change in accounting
principles
9-04 (20) $ 6,542 . . . .Net income or loss
9-04 (21) $ 0.64 . . . .Earnings per share - basic
9-04 (21) $ 0.62 . . . .Earnings per share - diluted
I.B. 5 3.72%. . . .Net yield - interest earnings -
actual
III.C.1. (a) $ 800 . . . .Loans on non-accrual
III.C.1. (b) 189 . . . .Accruing loans past due 90 days
or more
III.C.1. (c) 372 . . . .Troubled debt restructuring
III.C.2 -0-. . . .Potential problem loans
IV.A.1 6,748 . . . .Allowance for loan loss -
beginning of period
IV.A.2 326 . . . .Total charge offs
IV.A.3 10 . . . .Total recoveries
IV.A.4 7,187 . . . .Allowance for loan loss - end
of period
IV.B. 1 3,439 . . . .Loan loss allowance allocated
to domestic loans
IV.B.2 -0-. . . .Loan loss allowance allocated
to foreign loans
IV.B.3 $ 3,748 . . . .Loan loss allowance -
unallocated

<PAGE>
<PAGE>
Exhibit 27g
Restated Financial Data Schedule (in thousands except per share data)
This schedule contains summary financial information extracted from the
consolidated financial statements of First Washington Bancorp, Inc. for the
nine months ended December 31, 1997 and is qualified in its entirety by
reference to such financial statements.

Financial Data
as of or for the Nine months
Item Number ended December 31, 1997 Item Description
- - ----------- ------------------------ ----------------
9-03 (1) $ 32,448 . . . .Cash and due from banks

9-03 (1) $ 29,160 . . . .Cash and due from banks
9-03 (2) 1,701 . . . .Interest-bearing deposits
9-03 (3) 6,600 . . . .Federal funds sold - purchased
9-03 (4) -0-. . . .Trading account assets
9-03 (6) 294,133 . . . .Investment and mortgage backed
securities held for sale
9-03 (6) 589 . . . .Investment and mortgage backed
securities held to maturity -
carrying value
9-03 (6) 589 . . . .Investment and mortgage backed
securities held to maturity -
market value
9-03 (7) 761,017 . . . .Loans
9-03 (7) (2) 7,450 . . . .Allowance for loan losses
9-03 (11) 1,136,693 . . . .Total assets
9-03 (12) 582,309 . . . .Deposits
9-03 (13) 88,727 . . . .Short-term borrowings
9-03 (15) 19,014 . . . .Other liabilities
9-03 (16) 294,563 . . . .Long-term debt
9-03 (19) -0-. . . .Preferred stock - mandatory
redemption
9-03 (20) -0-. . . .Preferred stock - no mandatory
redemption
9-03 (21) 109 . . . .Common stocks
9-03 (22) 151,971 . . . .Other stockholders' equity
9-03 (23) 1,136,693 . . . .Total liabilities and
stockholders' equity
9-04 (1) 47,785 . . . .Interest and fees on loans
9-04 (2) 15,167 . . . .Interest and dividends on
investments
9-04 (4) 258 . . . .Other interest income
9-04 (5) 63,210 . . . .Total interest income
9-04 (6) 18,853 . . . .Interest on deposits
9-04 (9) 34,513 . . . .Total interest expense
9-04 (10) 28,697 . . . .Net interest income
9-04 (11) 1,130 . . . .Provision for loan losses
9-04 (13) (h) 2 . . . .Investment securities gains/
(losses)
9-04 (14) 15,665 . . . .Other expenses
9-04 (15) 15,320 . . . .Income/loss before income tax
9-04 (17) 9,747 . . . .Income/loss before
extraordinary items
9-04 (18) -0-. . . .Extraordinary items, less tax
9-04 (19) -0-. . . .Cumulative change in accounting
principles
9-04 (20) $ 9,747 . . . .Net income or loss
9-04 (21) $ 0.96 . . . .Earnings per share - basic
9-04 (21) $ 0.92 . . . .Earnings per share - diluted
I.B. 5 3.69%. . . .Net yield - interest earnings -
actual
III.C.1. (a) $ 449 . . . .Loans on non-accrual
III.C.1. (b) 672 . . . .Accruing loans past due 90 days
or more
III.C.1. (c) 366 . . . .Troubled debt restructuring
III.C.2 -0-. . . .Potential problem loans
IV.A.1 6,748 . . . .Allowance for loan loss -
beginning of period
IV.A.2 477 . . . .Total charge offs
IV.A.3 49 . . . .Total recoveries
IV.A.4 7,450 . . . .Allowance for loan loss - end
of period
IV.B. 1 3,566 . . . .Loan loss allowance allocated
to domestic loans
IV.B.2 -0-. . . .Loan loss allowance allocated
to foreign loans
IV.B.3 $ 3,884 . . . .Loan loss allowance -
unallocated

<PAGE>
<PAGE>
Exhibit 27h
Restated Financial Data Schedule (dollars in thousands except per share data)
This schedule contains summary financial information extracted from the
consolidated financial statements of First Washington Bancorp, Inc. for the
year ended March 31, 1998 and is qualified in its entirety by reference to
such financial statements.

Financial Data
as of or for the year
Item Number ended March 31, 1998 Item Description
- - ----------- -------------------- ----------------
9-03 (1) $ 42,529 . . . .Cash and due from banks
9-03 (2) 13,342 . . . .Interest-bearing deposits
9-03 (3) 5,245 . . . .Federal funds sold - purchased
9-03 (4) -0-. . . .Trading account assets
9-03 (6) 302,419 . . . .Investment and mortgage backed
securities held for sale
9-03 (6) 194 . . . .Investment and mortgage backed
securities held to maturity -
carrying value
9-03 (6) 194 . . . .Investment and mortgage backed
securities held to maturity -
market value
9-03 (7) 756,917 . . . .Loans
9-03 (7) (2) 7,857 . . . .Allowance for loan losses
9-03 (11) 1,154,072 . . . .Total assets
9-03 (12) 591,571 . . . .Deposits
9-03 (13) 167,115 . . . .Short-term borrowings
9-03 (15) 23,045 . . . .Other liabilities
9-03 (16) 222,157 . . . .Long-term debt
9-03 (19) -0-. . . .Preferred stock - mandatory
redemption
9-03 (20) -0-. . . .Preferred stock - no mandatory
redemption
9-03 (21) 109 . . . .Common stocks
9-03 (22) 150,084 . . . .Other stockholders' equity
9-03 (23) 1,154,072 . . . .Total liabilities and
stockholders' equity
9-04 (1) 64,695 . . . .Interest and fees on loans
9-04 (2) 20,019 . . . .Interest and dividends on
investments
9-04 (4) 433 . . . .Other interest income
9-04 (5) 85,147 . . . .Total interest income
9-04 (6) 25,289 . . . .Interest on deposits
9-04 (9) 46,651 . . . .Total interest expense
9-04 (10) 38,496 . . . .Net interest income
9-04 (11) 1,628 . . . .Provision for loan losses
9-04 (13) (h) 2 . . . .Investment securities gains/
(losses)
9-04 (14) 21,020 . . . .Other expenses
9-04 (15) 20,568 . . . .Income/loss before income taxes
9-04 (17) 13,122 . . . .Income/loss before
extraordinary items
9-04 (18) -0-. . . .Extraordinary items, less tax
9-04 (19) -0-. . . .Cumulative change in accounting
principles
9-04 (20) $ 13,122 . . . .Net income or loss
9-04 (21) $ 1.30 . . . .Earnings per share - basic
9-04 (21) $ 1.25 . . . .Earnings per share - diluted
I.B. 5 3.68%. . . .Net yield - interest earnings -
actual
III.C.1. (a) $ 1,270 . . . .Loans on non-accrual
III.C.1. (b) 150 . . . .Accruing loans past due 90 days
or more
III.C.1. (c) 305 . . . .Troubled debt restructuring
III.C.2 -0-. . . .Potential problem loans
IV.A.1 6,748 . . . .Allowance for loan loss -
beginning of period
IV.A.2 570 . . . .Total charge offs
IV.A.3 51 . . . .Total recoveries
IV.A.4 7,857 . . . .Allowance for loan loss - end
of period
IV.B. 1 3,906 . . . .Loan loss allowance allocated
to domestic loans
IV.B.2 -0-. . . .Loan loss allowance allocated
to foreign loans
IV.B.3 $ 3,951 . . . .Loan loss allowance -
unallocated

<PAGE>
<PAGE>
Exhibit 27i
Restated Financial Data Schedule (in thousands except per share data)
This schedule contains summary financial information extracted from the
consolidated financial statements of First Washington Bancorp, Inc. for the
quarter ended June 30, 1998 and is qualified in its entirety by reference to
such financial statements.

Financial Data
as of or for the quarter
Item Number ended June 30, 1998 Item Description
- - ----------- ------------------------ ----------------
9-03 (1) $ 23,662 . . . .Cash and due from banks
9-03 (2) 3,649 . . . .Interest-bearing deposits
9-03 (3) 6,820 . . . .Federal funds sold - purchased
9-03 (4) -0-. . . .Trading account assets
9-03 (6) 318,327 . . . .Investment and mortgage backed
securities held for sale
9-03 (6) 2,768 . . . .Investment and mortgage backed
securities held to maturity -
carrying value
9-03 (6) 2,820 . . . .Investment and mortgage backed
securities held to maturity -
market value
9-03 (7) 930,923 . . . .Loans
9-03 (7) (2) 9,717 . . . .Allowance for loan losses
9-03 (11) 1,362,063 . . . .Total assets
9-03 (12) 745,125 . . . .Deposits
9-03 (13) 90,026 . . . .Short-term borrowings
9-03 (15) 11,221 . . . .Other liabilities
9-03 (16) 344,569 . . . .Long-term debt
9-03 (19) -0-. . . .Preferred stock - mandatory
redemption
9-03 (20) -0-. . . .Preferred stock - no mandatory
redemption
9-03 (21) 109 . . . .Common stocks
9-03 (22) 171,013 . . . .Other stockholders' equity
9-03 (23) 1,362,063 . . . .Total liabilities and
stockholders' equity
9-04 (1) 20,877 . . . .Interest and fees on loans
9-04 (2) 4,716 . . . .Interest and dividends on
investments
9-04 (4) 206 . . . .Other interest income
9-04 (5) 25,799 . . . .Total interest income
9-04 (6) 8,036 . . . .Interest on deposits
9-04 (9) 13,940 . . . .Total interest expense
9-04 (10) 11,859 . . . .Net interest income
9-04 (11) 667 . . . .Provision for loan losses
9-04 (13) (h) 4 . . . .Investment securities gains/
(losses)
9-04 (14) 7,073 . . . .Other expenses
9-04 (15) 5,712 . . . .Income/loss before income tax
9-04 (17) 3,548 . . . .Income/loss before
extraordinary items
9-04 (18) -0-. . . .Extraordinary items, less tax
9-04 (19) -0-. . . .Cumulative change in accounting
principles
9-04 (20) $ 3,548 . . . .Net income or loss
9-04 (21) $ 0.33 . . . .Earnings per share - basic
9-04 (21) $ 0.32 . . . .Earnings per share - diluted
I.B. 5 3.84%. . . .Net yield - interest earnings -
actual
III.C.1. (a) $ 4,663 . . . .Loans on non-accrual
III.C.1. (b) 168 . . . .Accruing loans past due 90 days
or more
III.C.1. (c) 805 . . . .Troubled debt restructuring
III.C.2 -0-. . . .Potential problem loans
IV.A.1 7,857 . . . .Allowance for loan loss -
beginning of period
IV.A.2 492 . . . .Total charge offs
IV.A.3 69 . . . .Total recoveries
IV.A.4 9,717 . . . .Allowance for loan loss - end
of period
IV.B. 1 4,204 . . . .Loan loss allowance allocated
to domestic loans
IV.B.2 -0-. . . .Loan loss allowance allocated
to foreign loans
IV.B.3 $ 5,513 . . . .Loan loss allowance -
unallocated
<PAGE>

<ARTICLE> 9
<MULTIPLIER> 1,000

<S> <C>
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