Evergreenbancorp (EVGGQ) 8-K Results of Operations and Financial Condition

EvergreenBancorp Million or $1.13 per Diluted Share Before Non-Cash Charge in 2007 Earns
$2.7
Strong Asset Quality: Nonperforming Assets-to-Total Assets of 0.19%

SEATTLE, WA – February 6, 2008 – EvergreenBancorp, Inc. (OTCBB:EVGG), the holding company for EvergreenBank, today announced that following a fourth-quarter net after-tax charge totaling $1.4 million, or $0.59 per share, it earned $1.3 million, or $0.53 per diluted share in 2007, and lost $929,000, or $0.39 per basic share, in the fourth quarter. The non-cash charge represents EvergreenBank’s estimated proportionate share of ongoing litigation liabilities involving Visa and its member banks. In 2006 EvergreenBancorp earned $1.8 million, or $0.88 per diluted share, for the full year, and $593,000, or $0.27 per diluted share, in the fourth quarter a year ago. Adjusted to exclude the net charge, EvergreenBancorp’s full-year 2007 net income was $2.7 million, or $1.13 per diluted share, and its fourth-quarter 2007 net income was $473,000, or $0.20 per diluted share.

“Our team’s productivity and efficiency were highlights of the year. Thanks to improving efficiencies, we leveraged 28% loan growth into a 47% net-income gain, excluding the Visa charge. Our team remained productive in the fourth quarter as total loans rose 6% sequentially or at an annualized rate of 24%. As we enter 2008, our lending officers remain focused on making high-quality commercial and industrial loans. Expanding our presence in south King County, with the planned opening of a branch office in Kent, will help us meet our goal,” stated Gerald O. Hatler, president and chief executive officer. “Operating in the Puget Sound region is an advantage. The region’s economy is being driven by a continued positive outlook for aerospace and technology,” added Hatler.

Notable Fourth-Quarter Events

Three significant items impacted EvergreenBancorp’s 2007 fourth-quarter and full-year results. Cumulatively, these items lowered reported earnings per share by $0.50 in the quarter and for the year. The first item represented a non-cash charge totaling $2.1 million pretax, or $0.59 per share after-tax, and relates to the company’s estimate of its proportionate share of obligations to indemnify Visa Inc. for certain litigation matters. This amount includes a $1.4 million pretax charge that was previously announced. The company expects that the value of the Visa stock that EvergreenBancorp will receive upon completion of Visa’s initial public offering will exceed the amount of the $2.1 million charge. The offering is anticipated to close sometime in 2008. The second item relates to a gain of $1.0 million pretax, or $0.28 per share on an after-tax basis, related to the termination of the company’s post-retirement plan. This action not only positively impacted the company’s results in 2007, but will also reduce compensation and benefit expense in future years. The last item was a cash loss of $444,000, or $0.19 per share after tax, resulting from the sale of a significant investment held by the bank. The bank had owned the investment, a mutual fund investing in highly-rated short-term mortgage backed securities, for approximately five years. There were two primary reasons behind the company’s decision to sell the investment. First, the company continues to experience strong loan growth and the sale of the investment provided an opportunity to reinvest the proceeds in loans with a substantially higher yield. Second, market turmoil and lack of liquidity affecting even high-quality mortgage-related investments increased the risk of holding the investment.

2007 Financial Highlights
(for the twelve month period ended December 31, 2007, compared with December 31, 2006)

• Revenues, defined as the sum of net interest income before provision for loan losses and noninterest income, increased 29% to $18.5 million.

• Total loans advanced 28%.

• Total assets rose 23%.

• Deposits were up 21%.

• The efficiency ratio was 67.81% versus 76.24%, adjusted for non-cash charge.

• Asset quality remained strong; nonperforming assets were 0.19% of total assets.

Operating Results

Revenue in 2007 rose 29% to $18.5 million from $14.4 million in 2006. Fourth-quarter revenue gained 30% to $5.2 million from $4.0 million in the fourth quarter a year ago. In 2007, net interest income, before the provision for loan losses, rose 27% to $16.0 million from $12.5 million in 2006. After the provision for loan losses, net interest income increased 21%. For the quarter, net interest income, before the provision for loan losses, rose 19% and 4% after the provision for loan losses. The provision for loan losses in fourth-quarter 2007 increased to $758,000 from $232,000 in the year-ago quarter. The increase primarily relates to a single nonperforming customer loan relationship. Otherwise, the increase in the provision for loan losses rose inline with the loan portfolio’s growth. “On the whole, credit quality within our portfolio remains high. With the exception of this one relationship, we continue to enjoy very low delinquency and nonperforming assets levels,” stated Michael Tibbits, executive vice president and chief credit officer.

Noninterest income was up 39% for the year and up 114% for the quarter.

EvergreenBancorp’s net interest margin (taxable-equivalent) was 4.17% in the fourth quarter of 2007 compared with 4.57% in the fourth of 2006. The cumulative effects of a 100 basis point decline in the federal funds rate over a three-month period affected net interest margin. Also, the decrease reflects the company’s greater reliance on non-core funding sources to meet continued strong loan demand. Full-year 2007 net interest margin (taxable-equivalent) was 4.37% compared with 4.67% for all of 2006.

Noninterest expense rose 34% in 2007 to $14.7 million compared with $11.0 million during 2006. In the fourth quarter, noninterest expense increased 95% to $5.6 million compared to $2.9 million in the same quarter a year ago.

Adjusted for the non-cash Visa litigation charge, the efficiency ratio for the year dropped to 67.81% from 76.24% in 2006 and stood at 67.57% for the fourth quarter versus 72.59% in the comparable year-ago quarter. “The solid improvement in our efficiency ratio for the year reflects the productivity levels of our lending officers. Noninterest expense grew at a slower rate than the bank, overall, and reflects continued investment in the people and infrastructure we need to support the growth we expect going forward,” stated Gordon D. Browning, chief financial officer.

Balance Sheet Results

Total assets grew 23% to $422.9 million at December 31, 2007, from $343.5 million at year-end 2006. Asset quality remained solid with a ratio of nonperforming assets to total assets of 0.19% compared with 0.14% at year-end 2006.

Total loans rose 28% to $375.4 million from $292.4 million in the year-ago period. The allowance for loans losses stood at $4.0 million or 1.07% of total loans compared with $2.8 million or 0.95% of total loans at December 31, 2006 and $3.7 million or 1.05% of total loans in the third quarter of 2007.

Deposits rose 21% to $309.5 million, a $53.0 million increase from prior levels one year ago.

Shareholders’ equity was up 7% year over year to $25.5 million. On a per share basis, shareholders’ equity edged up 6% to $10.69. In September 2006, EvergreenBancorp issued 310,500 common shares through a common stock offering.

About EvergreenBancorp and EvergreenBank

Founded in 1971, EvergreenBank is a subsidiary of EvergreenBancorp, Inc., a bank holding company headquartered in Seattle, Washington. EvergreenBank is an independent community bank with six offices in Seattle, Bellevue, Lynnwood, and Federal Way. The Bank offers a full suite of personal and business banking services. Services include commercial, real estate, and consumer lending; savings, checking, and certificate of deposit accounts; health savings accounts; Internet banking; and merchant credit card processing services. Visitwww.EvergreenBancorp.comto learn more.

This press release contains “forward-looking statements” within the meaning of federal securities law, including statements concerning business strategies and their intended results, and similar statements concerning expectations that are not historical facts. The forward-looking statements in this press release are subject to numerous risks and uncertainties, including the effects of economic conditions, demand for financial services, competitive conditions, regulatory changes, and the availability of capital to finance growth, which could cause actual results to differ materially from those expressed in or implied by the statements herein.

Contacts:
Gerald O. Hatler, President and CEO
206/628-4250
Gordon D. Browning, EVP & Chief Financial Officer
206/749-7350

EvergreenBancorp, Inc.
CONSOLIDATED FINANCIAL HIGHLIGHTS

	Quarterly												12 Months Year-To-Date
(unaudited)	2007			2007			2006			Annual									Annual
(dollars in thousands except per-share data)	4th Qtr			3rd Qtr			4th Qtr			% Chg				2007			2006		% Chg
EARNINGS RESULTS
Revenue	$	5,192		$	4,813		$	3,980			30	%	$	18,503		$	14,363			29	%
Net interest income	$	4,154		$	4,298		$	3,495			19	%	$	15,954		$	12,535			27	%
Provision for loan losses	$	758		$	525		$	232			227	%	$	1,779		$	810			120	%
Noninterest income	$	1,038		$	515		$	485			114	%	$	2,549		$	1,828			39	%
Noninterest expense	$	5,630		$	3,103		$	2,889			95	%	$	14,668		$	10,950			34	%
Net income (loss)	$	(929	)	$	802		$	593		NM			$	1,278		$	1,819			-30	%
Basic earnings (loss) per share	$	(0.39	)	$	0.34		$	0.28		NM			$	0.54		$	0.89			-39	%
Diluted earnings (loss) per share	$	(0.39	)	$	0.33		$	0.27		NM			$	0.53		$	0.88			-39	%
Weighted average basic shares outstanding		2,386,837			2,358,394			2,154,709			11	%		2,358,693			2,043,375			15	%
Weighted average diluted shares outstanding		2,386,837			2,397,211			2,187,581			9	%		2,396,109			2,070,565			16	%
PERFORMANCE RATIOS
Return on average assets		-0.90	%		0.81	%		0.73	%					0.33	%		0.64	%
Return on average common equity		-14.13	%		12.62	%		10.79	%					5.11	%		9.55	%
Net interest margin (fully tax-equivalent)		4.17	%		4.51	%		4.57	%					4.37	%		4.67	%
Efficiency ratio (excl. non-cash Visa litigation charge)		67.57	%		64.95	%		72.59	%					67.81	%		76.24	%
CAPITAL
Equity to assets		6.04	%		6.26	%		6.93	%					6.04	%		6.93	%
Book value per share	$	10.69		$	10.80		$	10.12			6	%	$	10.69		$	10.12			6	%
ASSET QUALITY
Net loan charge-offs (recoveries)	$	449		$	66		$	79			468	%	$	544		$	82			563	%
Allowance for loan losses	$	4,019		$	3,710		$	2,784			44	%	$	4,019		$	2,784			44	%
Allowance for losses to total loans		1.07	%		1.05	%		0.95	%					1.07	%		0.95	%
Nonperforming loans	$	815		$	1,072		$	497			64	%	$	815		$	497			64	%
Nonperforming assets to total assets		0.19	%		0.26	%		0.14	%					0.19	%		0.14	%
END OF PERIOD BALANCES
Total loans	$	375,428		$	354,438		$	292,449			28	%	$	375,428		$	292,449			28	%
Total assets	$	422,884		$	409,965		$	343,520			23	%	$	422,884		$	343,520			23	%
Deposits	$	309,471		$	320,498		$	256,435			21	%	$	309,471		$	256,435			21	%
Shareholders’ equity	$	25,533		$	25,678		$	23,819			7	%	$	25,533		$	23,819			7	%
AVERAGE BALANCES
Total loans	$	367,098		$	344,978		$	271,378			35	%	$	334,341		$	234,531			43	%
Earning assets	$	396,652		$	380,117		$	305,630			30	%	$	367,043		$	269,957			36	%
Total assets	$	412,938		$	396,380		$	321,218			29	%	$	383,511		$	285,603			34	%
Deposits	$	301,651		$	317,888		$	241,256			25	%	$	292,261		$	218,290			34	%
Shareholders’ equity	$	26,300		$	25,211		$	21,974			20	%	$	24,992		$	19,046			31	%

EvergreenBancorp, Inc.
UNAUDITED CONSOLIDATED BALANCE SHEETS
December 31, 2007 and December 31, 2006
(in thousands, except per-share data)

	December 31,
Assets	2007			2006			% Chg
Cash and cash equivalents
Cash and due from banks	$	14,076		$	9,160			54	%
Interest-bearing deposits in financial institutions		5,923			1,983			199	%
Federal funds sold		2,383			760			214	%
Total cash and cash equivalents		22,382			11,903			88	%
Investment securities available for sale		14,446			29,531			-51	%
Loans		375,428			292,449			28	%
Allowance for loan losses		(4,019	)		(2,784	)		44	%
Net loans		371,409			289,665			28	%
Premises and equipment		2,886			3,078			-6	%
Bank owned life insurance		5,537			5,316			4	%
Accrued interest and other assets		6,224			4,027			55	%
Total assets	$	422,884		$	343,520			23	%
Liabilities
Deposits
Noninterest bearing	$	59,458		$	55,373			7	%
Interest bearing		250,013			201,062			24	%
Total deposits		309,471			256,435			21	%
Junior subordinated debt		12,372			12,217			1	%
Advances from Federal Home Loan Bank		69,910			46,805			49	%
Accrued expenses and other liabilities		5,598			4,244			32	%
Total liabilities		397,351			319,701			24	%
Stockholders’ equity
Preferred stock: No par value; 100,000 shares authorized
issued and outstanding — none
Common stock and surplus: No par value; 15,000,000 shares authorized; 2,388,804 and 2,353,262 shares issued and outstanding on 12/31/07 and 12/31/06, respectively.		21,467			21,129			2	%
Retained earnings		4,069			3,453			18	%
Accumulated other comprehensive income (loss) AFS		(3	)		(763	)		-100	%
Total stockholders’ equity		25,533			23,819			7	%
Total liabilities and stockholders’ equity	$	422,884		$	343,520			23	%

EvergreenBancorp, Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
December 31, 2007 and December 31, 2006
(in thousands, except per-share data)

		Three months ended								Twelve months ended
		December 31,								December 31,
		2007			2006		%Chg			2007			2006		%Chg
Interest and dividend income
Loans, including fees		$	7,650		$	5,782		32	%	$	28,528		$	19,352		47	%
Federal funds sold and other			85			44		93	%		296			130		128	%
Investments securities
Taxable securities			209			299		-30	%		1,057			1,167		-9	%
Tax-exempt securities			29			34		-15	%		123			137		-10	%
Total interest and dividend income			7,973			6,159		29	%		30,004			20,786		44	%
Interest expense
Deposits			2,761			1,849		49	%		10,559			5,706		85	%
Federal funds purchased and
securities sold under agreements to repurchase			2			25		-92	%		83			75		11	%
Advances from Federal Home Loan Bank			834			622		34	%		2,422			1,979		22	%
Junior subordinated debt			222			168		32	%		986			491		101	%
Total interest expense			3,819			2,664		43	%		14,050			8,251		70	%
Net interest income			4,154			3,495		19	%		15,954			12,535		27	%
Provision for loan losses			758			232		227	%		1,779			810		120	%
Net interest income after provision for loan losses			3,396			3,263		4	%		14,175			11,725		21	%
Noninterest income
Service charges on deposit accounts			350			318		10	%		1,411			1,165		21	%
Net Merchant credit card processing			37			45		-18	%		174			157		11	%
Earnings in value of CSV-life insurance			50			57		-12	%		221			226		-2	%
Other commissions and fees			13			22		-41	%		60			141		-57	%
Gain on settlement & curtailment of post-retirement plan			1,002			—	NM				1,002			—	NM
Loss on sale of securities			(444	)		—	NM				(444	)		—	NM
Other noninterest income			30			43		-30	%		125			139		-10	%
Total noninterest income			1,038			485		114	%		2,549			1,828		39	%
Noninterest expense
Salaries and employee benefits			1,716			1,500		14	%		6,086			5,416		12	%
Occupancy and equipment			506			512		-1	%		1,970			1,811		9	%
Data processing			238			213		12	%		948			832		14	%
Professional fees			90			93		-3	%		280			318		-12	%
Litigation expense			2,122			—	NM				2,122			—	NM
Marketing			189			136		39	%		555			485		14	%
State & local taxes			147			104		41	%		543			358		52	%
Other noninterest expense	��		622			331		88	%		2,164			1,730		25	%
Total noninterest expense			5,630			2,889		95	%		14,668			10,950		34	%
Income before income tax expense			(1,198	)		859	NM				2,056			2,603		-21	%
Income tax expense/(benefit)			(269	)		266	NM				778			784		-1	%
Net income		$	(929	)	$	593	NM			$	1,278		$	1,819		-30	%
Basic earnings per share		$	(0.39	)	$	0.28	NM			$	0.54		$	0.89		-39	%
Diluted earnings per share		$	(0.39	)	$	0.27	NM			$	0.53		$	0.88		-40	%