Cascade Financial Corporation Raises Cash Dividend 40% to $0.07 Per Share; Offers Dividend Reinvestment Program.

Business Editors

EVERETT, Wash.--(BUSINESS WIRE)--Sept. 24, 2003

Cascade Financial Corporation (Nasdaq:CASB), parent company of Cascade Bank, today announced its Board of Directors increased its quarterly cash dividend 40% from prior distributions to $0.07 per share. The dividend will be paid October 22, 2003, to shareholders of record on October 8, 2003. This payment marks the company's fifth cash dividend.

"The increase in our dividend payment reflects the record performance generated in the first half of the year and our continued confidence for the future," said Carol K. Nelson, President and Chief Executive Officer. "We also recently introduced a dividend reinvestment and direct stock purchase program for shareholders. These new services, often referred to as DRIPs and DSPPs, offer convenience, safekeeping and cost-savings for registered shareholders and further demonstrate our commitment to our investors."

The program is designed for long-term investors who wish to invest and build their ownership position over time and is open to all existing Cascade Financial shareholders. New investors may also participate by making an initial purchase directly through the program. "DRIPs and DSPPs are particularly economical for investors with small holdings or those who wish to dollar cost average through a monthly investment plan," said Lars Johnson, Chief Financial Officer.

Investors wishing to reinvest the upcoming dividend must complete the enrollment process no later than October 1. The company's transfer agent, Mellon Investor Services, administers the program. All share purchases will be made in the open market according to applicable rules and regulations. For complete details on this program, please visit the investor relations portion of the company's website at www.cascadebank.com/shareholderinfo or at www.melloninvestor.com. Interested parties may also contact Mellon Investor Services toll-free at 1-800-522-6645.

In July, Cascade reported record profits for the second quarter and first half of 2003, propelled by strong growth in business loans and retail deposits. Second quarter profits increased 17% to $2.4 million, or $0.35 per diluted share, compared to $2.0 million, or $0.30 per diluted share, in the second quarter of 2002. For the first half of 2003, profits increased 21% to $4.7 million, or $0.69 per diluted share, compared to $3.9 million, or $0.59 per diluted share, in the six-month period ended June 30, 2002.

Established in 1916, Cascade Bank, the only operating subsidiary of Cascade Financial Corporation, is a state chartered commercial bank headquartered in Everett, Washington. Cascade Bank operates 15 full service offices, located in Everett, Lynnwood, Marysville, Mukilteo, Smokey Point, Issaquah, Clearview, Woodinville, Lake Stevens and Bellevue. In June 2003, Washington CEO Magazine ranked Cascade Bank the number one medium sized "Best Companies to Work For" in Washington State.