Cascade Financial Issues $5 Million in Trust Preferred Securities.

EVERETT, Wash. -- Cascade Financial Corporation (Nasdaq:CASB), parent company of Cascade Bank, today announced it has issued $5 million of Trust Preferred Securities. Under the terms of the pooled transaction, the Trust Preferred Securities will have a maturity of 30 years and are redeemable after five years. The securities have a fixed rate of 5.82% in the first five years, and will reset quarterly thereafter at a competitive spread over the three-month LIBOR rate.

"The proceeds from this offering, which should qualify as Tier 1 Capital, will be used to support our continued growth," stated Carol K. Nelson, President and Chief Executive Officer. "Core loan production, particularly commercial real estate, business banking and construction, was solid in 2004 and I expect to carry that momentum into the new year. Trust Preferred Securities are an excellent source of capital, and we will utilize the proceeds from this offering to fund our continued growth."

Cascade expects to release earnings for the fourth quarter and 2004 after the close of market on Tuesday, January 25, 2005. The following day, on Wednesday, January 26, Carol K. Nelson, President and CEO, and Lars Johnson, CFO, will discuss the bank's operating results in a conference call at 10:00 am PST (1:00 pm EST). Interested investors may listen to the call live or via replay at www.cascadebank.com. Investment professionals are invited to dial 303-262-2140 to access the live call. A replay of the call will be available for three weeks at 303-590-3000, using passcode 11018161#.

Established in 1916, Cascade Bank, the only operating subsidiary of Cascade Financial Corporation, is a state chartered commercial bank headquartered in Snohomish County, Washington. Cascade Bank operates 16 full service offices, located in Everett, Lynnwood, Marysville, Mukilteo, Smokey Point, Issaquah, Clearview, Woodinville, Lake Stevens, Bellevue and Snohomish. Issaquah Bank, a division of Cascade Bank, operates offices in Issaquah and North Bend.

In 2003, Washington CEO magazine ranked Cascade Bank the #1 medium sized "Best Company to Work For" in Washington State. In July 2004, US Banker magazine ranked Cascade #39 out of the Top 200 Publicly Traded Community Banks with less than $1 billion in assets, based on three-year average return on equity. In October, the same publication named President and CEO Carol Nelson one of the 25 Most Powerful Women in Banking.

Forward-Looking Statements

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Those factors include, but are not limited to, management of Cascade Financial's expectation for future operating results, the ability to continue to grow the loan portfolio, competition with other banks and financial institutions and other factors. For a discussion of factors that could cause actual results to differ, please see the Company's reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission. Words such as "expect," "should," "believe," and other similar expressions or future or conditional verbs such as "will," "may," and "should," are intended to identify such forward-looking statements. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. This statement is included for the express purpose of protecting the Company under PSLRA's safe harbor provisions.