8-K

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

January 31, 2002
Date of Report (Date of Earliest Event Reported)

FIRST COMMUNITY BANCORP
(Exact Name of Registrant As Specified In Its Charter)

CALIFORNIA
(State or Other Jurisdiction of Incorporation)

00-30747	33-0885320
(Commission File Number)	(IRS Employer Identification No.)

6110 El Tordo
Rancho Santa Fe, California 92067
(Address of Principal Executive Offices)(Zip Code)

(858) 759-8300
(Registrant's Telephone Number, including Area Code)

Item 2.    Acquisition or Disposition of Assets.

        On January 31, 2002, First Community Bancorp ("FCB") completed its acquisition of Pacific Western National Bank ("Pacific Western") (the "Acquisition") through its wholly owned subsidiary, First Professional Bank, National Association ("First Professional"). The Acquisition was consummated pursuant to the terms of the Agreement and Plan of Merger, dated as of August 21, 2001, by and between First Community Bancorp ("First Community") and Pacific Western National Bank ("Pacific Western") (the "Merger Agreement").

        As a result of the Acquisition, each issued and outstanding share of common stock of Pacific Western was converted into the right to receive $37.15 in cash. Both Pacific Western and First Community Bank of the Desert, a wholly owned subsidiary of First Community, were unified with First Professional in the Acquisition. The resulting bank, a wholly owned subsidiary of First Community, has been renamed Pacific Western National Bank.

        First Community financed the Acquisition in part with the proceeds from its recent rights offering. First Community distributed to its shareholders of record, as of December 17, 2001, rights to purchase additional shares of common stock at a price of $19.25 per share. The rights offering, which expired on January 23, 2002, was oversubscribed, and raised $23,000,000 in proceeds to First Community.

        The description of the Merger Agreement contained herein is qualified in its entirety by reference to the Merger Agreement which is incorporated herein as Exhibit 2.1. After giving effect to the Acquisition, the total assets of First Community and its subsidiaries increased to approximately $1.25 billion, total deposits increased to approximately $1.09 billion and total shareholder equity increased to approximately $96.8 million as of September 30, 2001, on a pro forma basis.

*    *    *

This report includes forward-looking statements that involve inherent risks and uncertainties. First Community Bancorp cautions readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. These factors include economic conditions generally, including those resulting from the terrorist attacks of September 11, 2001 and their aftermath, and competition in the geographic and business areas in which First Community Bancorp operates, inflation, fluctuations in interest rates, legislation and governmental regulation and the progress of integrating the operations of First Community Bancorp, Rancho Santa Fe National Bank, First Community Bank of the Desert, First Professional Bank, N.A., First Charter Bank, N.A., Pacific Western National Bank and Capital Bank of North County. We make no promise to update any forward-looking statement, whether as a result of changes in underlying factors, new information, future events or otherwise.

Item 7.    Financial Statements, Pro Forma Financial Information and Exhibits.

        (a)  Financial statements for Pacific Western National Bank required by this item are incorporated herein by reference to Exhibit 99.2 and Exhibit 99.3 hereto.

        (b)  The pro forma financial information required to be filed by this item is incorporated herein by reference to Exhibit 99.1 hereto.

2

        (c)  Exhibits

        The following exhibits are filed with this Current Report on Form 8-K.

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated as of August 21, 2001, by and between Community Bancorp and Pacific Western National Bank, incorporated by reference to Exhibit 2.1 of First Community Bancorp's registration statement on Form S-3 (registration No. 333-72634).
23.1	Consent of Vavrinek, Trine, Day & Co., LLP.
99.1	Pro forma combined condensed balance sheet as of September 30, 2001 and pro forma combined condensed statements of operations and comprehensive income (loss) as of September 30, 2001 and December 31, 2000 of First Community Bancorp.
99.2	Unaudited balance sheet, unaudited statement of operations and comprehensive income (loss) and unaudited statement of cash flows as of September 30, 2001 of Pacific Western national Bank.
99.3	Audited balance sheets for the years ended December 31, 2000 and 1999 and audited statements of operations and comprehensive income (loss) and statements of cash flows for the years ended December 31, 2000, 1999 and 1998 of Pacific Western National Bank.

3

SIGNATURE

        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 hereunder duly authorized.

Dated: February 15, 2002

FIRST COMMUNITY BANCORP
By:	/s/  MATTHEW P. WAGNER
	Name:	Matthew P. Wagner
	Title:	President and Chief Executive Officer

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        The following exhibits are filed with this Current Report on Form 8-K.

Exhibit Index

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated as of August 21, 2001, by and between Community Bancorp and Pacific Western National Bank, incorporated by reference to Exhibit 2.1 of First Community Bancorp's registration statement on Form S-3 (registration No. 333-72634).
23.1	Consent of Vavrinek, Trine, Day & Co., LLP.
99.1	Pro forma combined condensed balance sheet as of September 30, 2001 and pro forma combined condensed statements of operations and comprehensive income (loss) as of September 30, 2001 and December 31, 2000 of First Community Bancorp.
99.2	Unaudited balance sheet, unaudited statement of operations and comprehensive income (loss) and unaudited statement of cash flows as of September 30, 2001 of Pacific Western national Bank.
99.3	Audited balance sheets for the years ended December 31, 2000 and 1999 and audited statements of operations and comprehensive income (loss) and statements of cash flows for the years ended December 31, 2000, 1999 and 1998 of Pacific Western National Bank.

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FORM 8-K
SIGNATURE
Exhibit Index

EX-23.1

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Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

        We hereby consent to the inclusion of our Independent Auditors' Report dated January 8, 2001 regarding the statements of financial condition of Pacific Western National Bank as of December 31, 2000 and 1999, and the related statements of income, changes in shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2000, included in the Form 8-K of First Community Bancorp.

        We also hereby consent to the incorporation by reference of our Independent Auditors' Report dated January 8, 2001 regarding the statements of financial condition of Pacific Western National Bank as of December 31, 2000 and 1999, and the related statements of income, changes in shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2000, in the Form S-8, filed August 8, 2000 (No. 333-4330) and the Post-Effective Amendment to Form S-8 (No. 333-47242) of First Community Bancorp.

/s/ Vavrinek, Trine, Day & Co., LLP

Laguna Hills, California
February 14, 2002

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CONSENT OF INDEPENDENT ACCOUNTANTS

EX-99.1

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Exhibit 99.1

Unaudited Pro Forma Condensed Combined Financial Data
of First Community, First Charter, Pacific Western and W.H.E.C.

        The following tables present financial data for First Community, First Charter, Pacific Western and W.H.E.C. after giving effect to the mergers and the proceeds received from this offering and the separate offering of trust preferred securities described in Note 12, which we refer to as "pro forma" information. The pro forma financial data give effect to the mergers under the purchase accounting method in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In presenting the pro forma information for certain time periods, First Community assumed that First Community, First Charter, Pacific Western and W.H.E.C. had been merged throughout those periods. The following unaudited pro forma combined financial data combines the historical consolidated condensed financial statements of First Community and the historical consolidated condensed financial statements of First Charter, the historical condensed financial statements of Pacific Western and the historical consolidated condensed financial statements of W.H.E.C., giving effect of the mergers as if they had been effective on September 30, 2001 and December 31, 2000, with respect to the Pro Forma Combined Condensed Balance Sheet, and as of the beginning of the periods indicated, with respect to the Pro Forma Combined Condensed Statements of Income. This information should be read in conjunction with the historical financial statements of the companies, including their respective notes thereto, which are included in other First Community filings.

        First Community expects that it will incur reorganization and restructuring expenses as a result of combining First Charter, Pacific Western and W.H.E.C. with First Community. The effect of the estimated merger and reorganization costs expected to be incurred in connection with the mergers has been reflected in the pro forma combined balance sheets. First Community also anticipates that the mergers will provide the combined company with certain financial benefits that include reduced operating expenses and opportunities to earn more revenue. However, First Community does not reflect any of these anticipated cost savings or benefits in the pro forma information. Finally, the pro forma financial information does not reflect any divestitures of branches or deposits that may be required in connection with the mergers. Therefore, the pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not attempt to predict or suggest future results. The pro forma information also does not attempt to show how the combined company would actually have performed had the companies been combined throughout these periods. All adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of results of the unaudited historical interim periods have been included.

        As described in Note 1, on October 8, 2001, First Charter Bank, N.A. merged with and into First Professional Bank, N.A., a wholly owned subsidiary of First Community. The First Charter merger was accounted for using purchase accounting. Due to the materiality of this acquisition, the Unaudited Pro Forma Combined Condensed Statements of Income for the nine-month period ended September 30, 2001, and for the year ended December 31, 2000, and the Unaudited Pro Forma Combined Condensed Balance Sheets as of September 30, 2001 and December 31, 2000 are additionally presented as if the First Charter merger occurred at the beginning of the periods for the Unaudited Pro Forma Combined Condensed Statements of Income and as of the indicated dates for the Pro Forma Combined Condensed Balance Sheets. Such information presented is not intended to reflect the actual results that would have been achieved had the First Charter merger actually occurred on those dates, and it should be read in conjunction with the historical financial information included in other First Community filings.

F-1

        As described in Note 6, on January 16, 2001, Professional Bancorp merged with and into First Community. The Professional Merger was accounted for using purchase accounting. Due to the materiality of this acquisition, the Unaudited Pro Forma Combined Condensed Statements of Income for the nine-month period ended September 30, 2001, and for the year ended December 31, 2000, and the Unaudited Pro Forma Combined Condensed Balance Sheet as of December 31, 2000 are additionally presented as if the Professional Merger occurred at the beginning of the periods presented for the Unaudited Pro Forma Combined Condensed Statements of Income or as of December 31, 2000 for the Unaudited Pro Forma Combined Condensed Balance Sheet. Such information presented is not intended to reflect the actual results that would have been achieved had the Professional Merger actually occurred on those dates, and it should be read in conjunction with the historical financial information included in other First Community filings.

        As described in Note 11, on August 21, 2001, First Community entered into an agreement to acquire Pacific Western National Bank (the "Pacific Western Acquisition"). The Pacific Western Acquisition will be accounted for using purchase accounting. Due to the materiality of this acquisition, the Unaudited Pro Forma Combined Condensed Statements of Income for the nine-month period ended September 30, 2001, and for the year ended December 31, 2000 and the Unaudited Pro Forma Combined Condensed Balance Sheets as of September 30, 2001 and December 31, 2000 are additionally presented as if the Pacific Western Acquisition occurred at the beginning of the periods for the Unaudited Pro Forma Combined Condensed Statements of Income and as of the indicated dates for the Pro Forma Combined Condensed Balance Sheets. Such information presented is not intended to reflect the actual results that would have been achieved had the Pacific Western Acquisition actually occurred on those dates, and it should be read in conjunction with the historical financial information included herein.

        As described in Note 16, on November 12, 2001, First Community entered into an agreement to acquire W.H.E.C., Inc. (the "W.H.E.C. Acquisition"). The W.H.E.C. Acquisition will be accounted for using the purchase method of accounting. Due to the materiality of this acquisition, the Unaudited Pro Forma Combined Condensed Statements of Income for the nine-month period ended September 30, 2001, and for the year ended December 31, 2000 and the Unaudited Pro Forma Combined Condensed Balance Sheets as of September 30, 2001 and December 31, 2000 are additionally presented as if the W.H.E.C. Acquisition occurred at the beginning of the periods for the Unaudited Pro Forma Combined Condensed Statements of Income and as of the indicated dates for the Pro Forma Combined Condensed Balance Sheets. Such information presented is not intended to reflect the actual results that would have been achieved had the W.H.E.C. Acquisition actually occurred on those dates, and it should be read in conjunction with the historical financial statements included in other First Community filings.

F-2

Unaudited Pro Forma Combined Condensed Balance Sheets
At September 30, 2001

				First Community		First Charter			Pro Forma Adjustments			First Community Pro Forma		Pacific Western		Pro Forma Adjustments			Pro Forma w/ Pac Western		W.H.E.C.		Pro Forma Adjustments			Pro Forma w/ W.H.E.C.
				(In thousands, except per share data)
Assets:
Cash and due from banks				$	48,737	$	9,275		$	—		$	58,012	$	12,016	$	—		$	70,028	$	7,784	$	—		$	77,812
Federal funds sold					103,552		23,042			—			126,594		40,000		3,370	(aaa)		169,964		11,060		—			181,024
		Total cash and cash equivalents			152,289		32,317			—			184,606		52,016		3,370			239,992		18,844		—			258,836
Interest-bearing deposits in financial institutions					285		3,061			—			3,346		—		—			3,346		450		—			3,796
Federal Reserve Bank and Federal Home Loan Bank stock, at cost					1,487		628			—			2,115		348		—			2,463		119		—			2,582
Securities held to maturity					11,926		—			—			11,926		—		—			11,926		—		—			11,926
Securities available-for-sale					96,777		25,140			—			121,917		18,727		—			140,644		30,008		—			170,652
		Total securities			110,190		25,768			—			135,958		19,075		—			155,033		30,127		—			185,160
Net loans					378,996		61,841			—			440,837		183,140		—			623,977		85,909		—			709,886
Premises and equipment					5,409		290			—			5,699		3,290		—			8,989		1,268		—			10,257
Other real estate owned					309		1,288			—			1,597		—		—			1,597		—		—			1,597
Goodwill					4,151		—			7,190	(aa)		11,341		—		20,920	(bbb)		32,261		—		13,471	(aaaa)		45,732
Other assets					20,199		2,418			427	(bb)		23,044		2,935		855	(ccc)		26,834		4,016		651	(bbbb)		31,501
		Total Assets		$	671,828	$	126,983		$	7,617		$	806,428	$	260,456	$	25,145		$	1,092,029	$	140,614	$	14,122		$	1,246,765
Liabilities and Shareholders' Equity:
Liabilities:
Non-interest bearing deposits				$	228,500	$	34,920		$	—		$	263,420	$	38,356	$	—		$	301,776	$	44,338	$	—		$	346,114
Interest bearing deposits					379,668		75,825			—			455,493		202,084		—			657,577		84,704		—			742,281
		Total deposits			608,168		110,745			—			718,913		240,440		—			959,353		129,042		—			1,088,395
Accrued interest payable and other liabilities					6,299		909			2,721	(cc)		9,929		1,087		4,074	(ddd)		15,090		1,137		2,957	(cccc)		19,184
Borrowed funds					16,387		6,000			—			22,387		—		20,000	(kkk)		42,387		—		—			42,387
		Total Liabilities			630,854		117,654			2,721			751,229		241,527		24,074			1,016,830		130,179		2,957			1,149,966
Shareholders' Equity:
Convertible preferred stock					—		5,045			(5,045	)(dd)		—		—		—			—		—		—			—
Common stock					28,847		174			14,051	(ee)		43,072		1,536		18,464	(eee)		63,072		1,000		20,600	(dddd)		84,672
Additional paid-in-capital					—		12,439			(12,439	)(ff)		—		5,860		(5,860	)(fff)		—		3,055		(3,055	)(eeee)		—
Retained earnings (accumulated deficit)					10,920		(8,554	)		8,554	(gg)		10,920		11,472		(11,472	)(ggg)		10,920		5,740		(5,740	)(ffff)		10,920
Accumulated other comprehensive income (loss):
	Net unrealized gains (losses) on securities available-for-sale, net				1,207		225			(225	)(hh)		1,207		61		(61	)(hhh)		1,207		640		(640	)(gggg)		1,207
		Total Shareholders' Equity			40,974		9,329			4,896			55,199		18,929		1,071			75,199		10,435		11,165			96,799
			Total Liabilities and Shareholders' Equity	$	671,828	$	126,983		$	7,617		$	806,428	$	260,456	$	25,145		$	1,092,029	$	140,614	$	14,122		$	1,246,765
Number of common shares outstanding(1)					4,609.7		2,289.8						5,271.3		921.2					6,382.4		4,052.9					7,462.4
Common shareholders' equity per share				$	8.89	$	1.87					$	10.47	$	20.55				$	11.78	$	2.57				$	12.97

(1)

The number of shares of our First Charter common stock outstanding does not reflect either the conversion of each outstanding share of First Charter convertible preferred stock into 657.89 shares of First Charter common stock or the conversion of shares of First Charter convertible preferred stock issuable upon the exercise of outstanding options to acquire shares of convertible preferred stock.

F-3

Unaudited Pro Forma Combined Condensed Balance Sheets
At December 31, 2000

		First Community			First Charter			Pro Forma Adjustments			First Community Pro Forma			Professional Bancorp			Professional Bancorp Pro Forma Adjustments			Pro Forma with Professional Bancorp			Pacific Western		Pacific Western Pro Forma Adjustments			Pro Forma with Pacific Western			W.H.E.C.		Pro Forma Adjustments			Pro Forma with W.H.E.C.
		(In thousands, except per share data)
Assets:
Cash and due from banks		$	35,752		$	12,369		$	—		$	48,121		$	17,727		$	—		$	65,848		$	12,187	$	—		$	78,035		$	7,723	$	—		$	85,758
Federal funds sold			16,903			—			—			16,903			77,275			(8,431	)(a)		85,747			2,800		3,367	(aaa)		91,914			30,545		—			122,459
	Total cash and cash equivalents		52,655			12,369			—			65,024			95,002			(8,431	)		151,595			14,987		3,367			169,949			38,268		—			208,217
Interest-bearing deposits in financial institutions			495			16			—			511			447			—			958			—		—			958			549		—			1,507
Federal Reserve Bank and Federal Home Loan Bank stock, at cost			913			779			—			1,692			415			—			2,107			261		—			2,368			119		—			2,487
Securities held to maturity			40,428			—			—			40,428			14,263			—			54,691			—		—			54,691			—		—			54,691
Securities available-for-sale			4,972			41,520			—			46,492			46,692			(425	)(a)		92,759			5,504		—			98,263			8,789		—			107,052
	Total securities		46,313			42,299			—			88,612			61,370			(425	)		149,557			5,765		—			155,322			8,908		—			164,230
Net loans			246,622			72,698			—			319,320			102,376			—			421,696			164,044		—			585,740			72,368		—			658,108
Premises and equipment			5,027			734			—			5,761			817			—			6,578			2,720		—			9,298			1,385		—			10,683
Other real estate owned			1,031			1,296			—			2,327			—			—			2,327			—		—			2,327			—		—			2,327
Goodwill			—			882			6,555	(aa)		7,437			—			4,634	(b)		12,071			—		22,190	(bbb)		34,261			—		15,093	(aaaa)		49,354
Other assets			6,144			3,038			427	(bb)		9,609			4,796			2,923	(c)		17,328			2,694		855	(ccc)		20,877			3,569		651	(bbbb)		25,097
	Total Assets	$	358,287		$	133,332		$	6,982		$	498,601		$	264,808		$	(1,299	)	$	762,110		$	190,210	$	26,412		$	978,732		$	125,047	$	15,744		$	1,119,523
Liabilities and Shareholders' Equity
Liabilities:
Non-interest bearing deposits		$	114,042		$	34,909		$	—		$	148,951		$	135,797		$	—		$	284,748		$	33,455	$	—		$	318,203		$	40,328	$	—		$	358,531
Interest bearing deposits			202,896			76,322			—			279,218			113,338			—			392,556			138,155		—			530,711			75,039		—			605,750
	Total deposits		316,938			111,231			—			428,169			249,135			—			677,304			171,610		—			848,914			115,367		—			964,281
Borrowed funds			9,689			11,000			—			20,689			679			—			21,368			—		20,000	(kkk)		41,368			—		—			41,368
Accrued interest payable & other liabilities			3,888			1,137			2,721	(cc)		7,746			3,074			3,144	(d)		13,964			938		4,074	(ddd)		18,976			867		2,957	(cccc)		22,800
	Total Liabilities		330,515			123,368			2,721			456,604			252,888			3,144			712,636			172,548		24,074			909,258			116,234		2,957			1,028,449
Shareholders' Equity:
Convertible preferred stock			—			5,045			(5,045	)(dd)		—			—			—			—			—		—			—			—		—			—
Common stock			20,402			174			14,051	(ee)		34,627			17			7,460	(e)		42,104			1,463		18,537	(eee)		62,104			1,000		20,600	(dddd)		83,704
Additional paid-in-capital			—			12,439			(12,439	)(ff)		—			21,271			(21,271	)(f)		—			4,987		(4,987	)(fff)		—			2,967		(2,967	)(eeee)		—
Treasury stock			—			—			—			—			(537	)		537	(g)		—			—		—			—			—		—			—
Retained earnings (accumulated deficit)			7,432			(7,486	)		7,486	(gg)		7,432			(8,264	)		8,264	(h)		7,432			11,208		(11,208	)(ggg)		7,432			4,846		(4,846	)(ffff)		7,432
Accumulated other comprehensive loss: unrealized net losses on securities available-for-sale, net			(62	)		(208	)		208	(hh)		(62	)		(567	)		567	(i)		(62	)		4		(4	)(hhh)		(62	)		—		—			(62	)
	Total Shareholders' Equity		27,772			9,964			4,261			41,997			11,920			(4,443	)		49,474			17,662		2,338			69,474			8,813		12,787			91,074
	Total Liabilities & Shareholders' Equity	$	358,287		$	133,332		$	6,982		$	498,601		$	264,808		$	(1,299	)	$	762,110		$	190,210	$	26,412		$	978,732		$	125,047	$	15,744		$	1,119,523
Number of common shares outstanding(1)			3,971.4			2,289.8						4,633.0			2,030.8						5,137.7			921.2					6,248.8			200.0					7,328.8
Common shareholders' equity per share		$	6.99		$	2.15					$	9.06		$	5.87					$	9.63		$	19.17				$	11.12		$	44.07				$	12.43

(1)

The number of shares of First Charter common stock outstanding does not reflect either the conversion of each outstanding share of First Charter convertible preferred stock into 657.89 shares of First Charter common stock or the conversion of shares of First Charter convertible preferred stock issuable upon the exercise of outstanding options to acquire shares of convertible preferred stock.

F-4

Unaudited Pro Forma Combined Condensed Income Statements
for the Nine Months Ended September 30, 2001

			First Community		First Charter			Pro Forma Adjustments		First Community Pro Forma			Pacific Western		Pro Forma Adjustments			Pro Forma w/ Pac Western			W.H.E.C.		Pro Forma Adjustments		Pro Forma w/ W.H.E.C.
			(In thousands, except per share data)
Interest income:
	Interest and fees on loans		$	24,705	$	4,384		$	—	$	29,089		$	14,607	$	—		$	43,696		$	5,215	$	—	$	48,911
		Interest on interest-bearing deposits in financial institutions		18		43			—		61			—		—			61			23		—		84
		Interest on investment securities		4,485		1,114			—		5,599			308		—			5,907			736		—		6,643
		Interest on federal funds sold		3,255		509			—		3,764			15		—			3,779			680		—		4,459
		Total interest income		32,463		6,050			—		38,513			14,930		—			53,443			6,654		—		60,097
Interest expense:
	Interest expense on deposits			7,520		2,844			—		10,364			5,855		—			16,219			2,064		—		18,283
	Interest expense on borrowed funds			989		301			—		1,290			16		1,125	(iii)		2,431			—		—		2,431
		Total interest expense		8,509		3,145			—		11,654			5,871		1,125			18,650			2,064		—		20,714
Net interest income				23,954		2,905			—		26,859			9,059		(1,125	)		34,793			4,590		—		39,383
	Less: provision for loan losses			639		—			—		639			930		—			1,569			35		—		1,604
		Net interest income after provision for loan losses		23,315		2,905			—		26,220			8,129		(1,125	)		33,224			4,555		—		37,779
Non-interest income:
	Service charges, commissions and fees			2,837		123			—		2,960			862		—			3,822			1,177		—		4,999
	Other income			579		1,495			—		2,074			170		—			2,244			33		—		2,277
		Total non-interest income		3,416		1,618			—		5,034			1,032		—			6,066			1,210		—		7,276
Non-interest expense:
	Salaries and employee benefits			9,545		1,474			—		11,019			3,395		—			14,414			2,319		—		16,733
	Occupancy, furniture and equipment			3,247		753			—		4,000			1,357		—			5,357			690		—		6,047
	Professional services			2,634		1,246			—		3,880			1,080		—			4,960			359		—		5,319
	Stationery, supplies and printing			462		35			—		497			574		—			1,071			181		—		1,252
	FDIC assessment			325		14			—		339			20		—			359			15		—		374
	Cost of other real estate owned			52		15			—		67			—		—			67			—		—		67
	Advertisting			347		3			—		350			320		—			670			188		—		858
	Insurance			210		80			—		290			60		—			350			57		—		407
	Goodwill and amortization			207		—			—		207			—		—			207			—		—		207
	Other			1,528		897			—		2,425			291		—			2,716			184		—		2,900
		Total non-interest expense		18,557		4,517			—		23,074			7,097		—			30,171			3,993		—		34,164
Income before income taxes				8,174		6			—		8,180			2,064		(1,125	)		9,119			1,772		—		10,891
Income taxes				3,458		1			—		3,459			852		(473	)(jjj)		3,838			630		—		4,468
		Income (loss) from continuing operations		4,716		5			—		4,721			1,212		(652	)		5,281			1,142		—		6,423
Discontinued operations:
Loss from operations of discontinued merchant card processing (net of income taxes)				—		(948	)		—		(948	)		—		—			(948	)		—		—		(948	)
Loss on disposal of merchant card processing, including provision of $478 for operating losses during phase-out period (net of income taxes)				—		(125	)		—		(125	)		—		—			(125	)		—		—		(125	)
		Loss from discontinued operations		—		(1,073	)		—		(1,073	)		—		—			(1,073	)		—		—		(1,073	)
		Net income (loss)	$	4,716	$	(1,068	)	$	—	$	3,648		$	1,212	$	(652	)	$	4,208		$	1,142	$	—	$	5,350
Preferred dividends				—		—			—		—			—		—			—			—		—		—
		Net income (loss) available to common shareholders	$	4,716	$	(1,068	)	$	—	$	3,648		$	1,212	$	(652	)	$	4,208		$	1,142		—	$	5,350
Per share information:
	Number of shares (weighted average)
		Basic		4,517.9		2,289.8					5,179.5			921.2					6,290.6			4,019.5				7,370.6
		Diluted (1)		4,751.1		2,289.8					5,412.7			951.3					6,523.8			4,546.2				7,603.8
Income (loss) per share:
Basic
	From continuing operations		$	1.04	$	—				$	0.91		$	1.32				$	0.84		$	0.28			$	0.87
	From discontinued operations			—		(0.47	)				(0.21	)		—					(0.17	)		—				(0.15	)
		Basic income (loss) per common share	$	1.04	$	(0.47	)			$	0.70		$	1.32				$	0.67		$	0.28			$	0.72
Diluted (2)
	From continuing operations		$	0.99	$	—				$	0.87		$	1.27				$	0.81		$	0.25			$	0.84
	From discontinued operations			—		(0.47	)				(0.20	)		—					(0.16	)		—				(0.14	)
		Diluted income (loss) per common share	$	0.99	$	(0.47	)			$	0.67		$	1.27				$	0.65		$	0.25			$	0.70

(1)

The diluted number of shares of First Charter common stock does not reflect either the conversion of each outstanding share of First Charter convertible preferred stock into 657.89 shares of First Charter common stock or the conversion of shares of First Charter convertible preferred stock issuable upon the exercise of outstanding options to acquire shares of convertible preferred stock.

(2)

Does not include the impact of options to purchase First Charter convertible preferred stock.

F-5

Unaudited Pro Forma Combined Condensed Income Statements
for the Year Ended December 31, 2000

			First Community		First Charter			Pro Forma Adjustments			First Community Pro Forma			Professional Bancorp			Professional Bancorp Pro Forma Adjustments			Pro Forma with Professional Bancorp			Pacific Western		Pacific Western Pro Forma Adjustments			Pro Forma with Pacific Western			W.H.E.C.		Pro Forma Adjustments		Pro Forma with W.H.E.C.
			(In thousands, except per share data)
Interest income:
	Interest and fees on loans		$	23,980	$	5,750		$	—		$	29,730		$	11,901		$	—		$	41,631		$	16,512	$	—		$	58,143		$	7,370	$	—	$	65,513
	Interest on interest-bearing deposits in financial institutions			257		15			—			272			35			—			307			—		—			307			32		—		339
	Interest on investment securities			2,957		1,723			—			4,680			4,030			—			8,710			439		—			9,149			442		—		9,591
	Interest on federal funds sold			1,637		458			—			2,095			3,356			—			5,451			498		—			5,949			1,005		—		6,954
		Total interest income		28,831		7,946			—			36,777			19,322			—			56,099			17,449		—			73,548			8,849		—		82,397
Interest expense:
	Interest expense on deposits			7,551		3,522			—			11,073			3,431			—			14,504			5,641		—			20,145			2,376		—		22,521
	Interest expense on borrowed funds			373		55			—			428			51			582	(j)		1,061			9		1,500	(iii)		2,570			—		—		2,570
		Total interest expense		7,924		3,577			—			11,501			3,482			582			15,565			5,650		1,500			22,715			2,376		—		25,091
Net interest income				20,907		4,369			—			25,276			15,840			(582	)		40,534			11,799		(1,500	)		50,833			6,473		—		57,306
	Less: provision for loan losses			520		(205	)		—			315			11,732			—			12,047			840		—			12,887			125		—		13,012
		Net interest income after provision for loan losses		20,387		4,574			—			24,961			4,108			(582	)		28,487			10,959		(1,500	)		37,946			6,348		—		44,294
Non-interest income:
	Service charges, commissions and fees			1,637		165			—			1,802			1,314			—			3,116			1,125		—			4,241			1,363		—		5,604
	Gain on sale of securities			—		10			—			10			—			—			10			—		—			10			—		—		10
	Other income			828		1,194			—			2,022			4,646			—			6,668			113		—			6,781			31		—		6,812
		Total non-interest income		2,465		1,369			—			3,834			5,960			—			9,794			1,238		—			11,032			1,394		—		12,426
Non-interest expense:
	Salaries and employee benefits			6,673		2,203			—			8,876			7,868			—			16,744			4,104		—			20,848			3,246		—		24,084
	Occupancy, furniture and equipment			2,455		1,063			—			3,518			2,040			—			5,558			1,604		—			7,162			924		—		8,086
	Professional services			1,914		1,189			—			3,103			2,790			—			5,893			651		—			6,544			450		—		6,994
	Stationery, supplies and printing			418		65			—			483			669			—			1,152			700		—			1,852			230		—		2,082
	Cost of other real estate owned			356		93			—			449			—			—			449			—		—			449			—		—		449
	Advertising			435		24			—			459			311			—			770			385		—			1,155			349		—		1,504
	Insurance			128		109			—			237			125			—			362			56		—			418			66		—		484
	Goodwill amortization			—		—			—			—			—			309	(k)		309			—		—			309			—		—		309
	Merger costs			3,561		—			—			3,561			—			—			3,561			—		—			3,561			—		—		3,561
	Loss on sale of securities			11		5			—			16			—			—			16			—		—			16			—		—		16
	Other			2,194		296			—			2,490			1,306			—			3,796			1,115		—			4,911			282		—		5,193
		Total non-interest expense		18,145		5,047			—			23,192			15,109			309			38,610			8,615		—			47,225			5,547		—		52,772
Income before income taxes				4,707		896			—			5,603			(5,041	)		(891	)		(329	)		3,582		(1,500	)		1,753			2,195		—		3,948
Income taxes				2,803		1			—			2,804			2			(244	)(1)		2,562			1,462		(630)	(jjj)		3,394			865		—		4,259
		Income (loss) from continuing operations		1,904		895			—			2,799			(5,043	)		(647	)		(2,891	)		2,120		(870	)		(1,641	)		1,330		—		(311	)
Discontinued operations:
	Loss from operations of discontinued merchant card processing operations (net of income taxes)			—		(44	)		—			(44	)		—			—			(44	)		—		—			(44	)		—		—		(44	)
	Net income (loss)			1,904		851			—			2,755			(5,043	)		(647	)		(2,935	)		2,120		(870	)		(1,685	)		—		—		(44	)
Preferred dividends				—		660			(660	)		—			—			—			—			—		—			—			—		—		—
	Net income (loss) available to common shareholders		$	1,904	$	191		$	660		$	2,755		$	(5,043	)	$	(647	)	$	(2,935	)	$	2,120	$	(870	)	$	(1,685	)	$	1,330	$	—	$	(355	)

F-6

Unaudited Pro Forma Combined Condensed Income Statements
for the Year Ended December 31, 2000 (Continued)

			First Community		First Charter			Pro Forma Adjustments	First Community Pro Forma			Professional Bancorp			Professional Bancorp Pro Forma Adjustments	Pro Forma with Professional Bancorp			Pacific Western		Pacific Western Pro Forma Adjustments	Pro Forma with Pacific Western			W.H.E.C.		Pro Forma Adjustments	Pro Forma with W.H.E.C.
			(In thousands, except per share data)
Per share information:
	Number of shares (weighted average)
		Basic		3,908.3		2,289.8				4,569.9			2,030.8				5,074.6			921.2			6,185.7			4,015.3			7,265.7
		Diluted(1)		4,090.4		74,658.2				4,752.0			2,030.8				5,256.7			942.6			6,367.8			4,329.5			7,447.8
Income (loss) per share:
Basic
	From continuing operations		$	0.49	$	0.10			$	0.61		$	(2.48	)		$	(0.57	)	$	2.30		$	(0.26	)	$	0.33		$	(0.04	)
	From discontinued operations			—		(0.02	)			(0.01	)		—				(0.01	)		—			(0.01	)		—			(0.01	)
		Basic income (loss) per common share	$	0.49	$	0.08			$	0.60		$	(2.48	)		$	(0.58	)	$	2.30		$	(0.27	)	$	0.33		$	(0.05	)
Diluted(1)
	From continuing operations		$	0.47	$	0.01			$	0.59		$	(2.48)	*		$	(0.57)	*	$	2.25		$	(0.26)	*	$	0.31		$	(0.04)	*
	From discontinued operations			—		—				(0.01	)		—				(0.01)	*		—			(0.01)	*		—			(0.01)	*
		Diluted income (loss) per common share	$	0.47	$	0.01			$	0.58		$	(2.48)	*		$	(0.58)	*	$	2.25		$	(0.27)	*	$	0.31		$	(0.05)	*

(*)

Effect is anti-dilutive

(1)

Does not include the impact of options to purchase First Charter convertible preferred stock.

F-7

Notes to Unaudited Pro Forma Condensed Combined Financial Data
of First Community, First Charter, Professional Bancorp, Pacific Western and W.H.E.C.

NOTE 1: BASIS OF PRESENTATION OF FIRST CHARTER

        Certain historical data of First Charter have been reclassified on a pro forma basis to conform to First Community's classifications. Transactions between First Community and First Charter are not material in relation to the unaudited pro forma combined financial statements, and have not been eliminated from the pro forma combined amounts. The unaudited pro forma numbers of common shares outstanding, common shareholders' equity per share, weighted average number of shares (basic and diluted) and income (loss) per share (basic and diluted) are based on the share amounts for First Community plus the share amounts for First Charter multiplied by the First Charter exchange ratio of 0.008635 and includes the conversion of First Charter convertible preferred stock into First Community common stock as provided by the merger agreement. Prior to the merger and the conversion of 7,000 shares of preferred stock into common stock immediately prior to the record date, First Charter has 2,289,779 common shares and 110,000 convertible preferred shares outstanding. The convertible preferred shares are equivalent to 72,368,421 First Charter common shares. As a result of the conversion of First Charter convertible preferred stock into First Community common stock, preferred dividends are eliminated in the pro forma combined condensed income statements.

NOTE 2: PURHCASE PRICE OF FIRST CHARTER ACQUISITION

        The purchase price is based on issuing approximately 661,609 common shares of First Community common stock. The price of First Community common stock on the acquisition date was $21.50 resulting in a total purchase price of approximately $14,225,000.

NOTE 3: ALLOCATION OF PURCHASE PRICE OF FIRST CHARTER ACQUISITION

        The purchase price of First Charter has been allocated as follows (in thousands):

Cash and cash equivalents		$	32,317
Time deposits in financial institutions			3,061
Securities			25,768
Net loans			61,841
Goodwill			7,190
Premises and equipment			290
Other real estate owned			1,288
Other assets			2,845
Deposits			(110,745	)
Borrowed funds			(6,000	)
Other liabilities			(3,630	)
	Total purchase price	$	14,225

        In allocating the purchase price, the following adjustments were made to First Charter's historical amounts. Other liabilities were increased by $2,721,000, representing the estimated merger costs. Other assets were increased by $427,000, representing the tax effects of the estimated merger costs. Substantially all of other assets and liabilities are either variable rate or short-term in nature and fair market value adjustments were considered to be immaterial to the financial presentation. These preliminary purchase price adjustments are subject to further refinement.

F-8

        In accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," beginning on January 1, 2002, amortization of goodwill and intangibles with indefinite lives will cease.

NOTE 4: MERGER COSTS OF FIRST CHARTER

        The unaudited pro forma combined condensed financial data reflect First Community's and First Charter's respective management's current estimate, for purposes of pro forma presentation, of the aggregate estimated merger costs of $2,721,000 ($2,294,000 net of taxes, computed using the combined federal and state tax rate of 42.0%) expected to be incurred in connection with the First Charter merger. While a portion of these costs may be required to be recognized over time, the current estimate of these costs has been recorded in the pro forma combined balance sheets in order to disclose the aggregate effect of these activities on First Community's pro forma combined financial position. The estimated aggregate costs include the following:

Employee costs	$	446,000
Conversion costs		400,000
Other costs		170,000
		1,016,000
Tax benefits		427,000
		589,000
Investment banking and other professional fees		1,705,000
	$	2,294,000

        These cost estimates are forward-looking. While the costs represent management's current estimate of merger costs that will be incurred, the ultimate level and timing of recognition of such costs will be based on the final merger and integration plan to be completed prior to consummation of the merger of First Charter with First Community, which will be developed by various of First Community's and First Charter's task forces and integration committees. Readers are cautioned that the completion of the merger and integration plan and the resulting management plans detailing actions to be undertaken to effect the merger and resultant integration of operations will impact these estimates; the type and amount of costs incurred could vary materially from these estimates if future developments differ from the underlying assumptions used by management in determining the current estimate of these costs.

NOTE 5: KEY TO PRO FORMA ADJUSTMENTS OF FIRST CHARTER ACQUISITION

        Summarized below are the pro forma adjustments necessary to reflect the acquisition of First Charter based on the purchase method of accounting:

aa)

Reflect goodwill resulting from the purchase method of accounting. See note 3.



bb)

Reflect the deferred tax asset to the deductible merger costs. See note 4.



cc)

Adjust liabilities for accrued merger costs. See note 4.



dd)

Reflect conversion of preferred stock to First Community common stock



ee)

Reflect issuance of common stock to First Charter shareholders.



ff)

Eliminate First Charter additional paid-in-capital.



gg)

Eliminate First Charter retained losses.



hh)

Eliminate First Charter unrealized losses on securities available-for-sale.

F-9

NOTE 6: BASIS OF PRESENTATION OF PROFESSIONAL ACQUISITION

        On January 16, 2001, Professional Bancorp, Inc. merged (the "Professional Merger") with and into First Community, with First Community as the surviving entity. The merger was consummated pursuant to the terms of an Agreement and Plan of Merger, dated as of August 7, 2000, by and between First Community and Professional Bancorp (the "Professional Merger Agreement").

        Pursuant to the Professional Merger Agreement, each issued and outstanding share of common stock of Professional Bancorp prior to the Professional Merger (other than as provided in the Professional Merger Agreement) was converted into the right to receive either 0.55 shares of First Community Common Stock or $8.00 in cash. Upon consummation of the Professional Merger, First Community issued approximately 504,747 shares of common stock to former holders of Professional Bancorp common stock, and as a result, the former shareholders of Professional Bancorp common stock own shares of First Community common stock representing approximately 11.3% of the outstanding shares of First Community common stock.

        The Professional Merger was accounted for using the purchase method. Therefore, operating results of First Community for the year ended December 31, 2000 do not include the operations of Professional Bancorp. Also, the balance sheet of First Community as of December 31, 2000 does not include the balance sheet of Professional Bancorp. Due to the materiality of this acquisition, the Unaudited Pro Forma Combined Condensed Statement of Income for the one year period ended December 31, 2000 includes the operations of Professional Bancorp, Inc. as if the Professional Merger occurred at the beginning of the period and the Unaudited Pro Forma Combined Condensed Balance Sheet as of December 31, 2000 includes Professional Bancorp, Inc. as if the Professional Merger had occurred on that date.

        The information for Professional Bancorp, Inc. for the year ended December 31, 2000 is derived from the audited consolidated financial statements of Professional Bancorp. This information should be read in conjunction with the historical consolidated financial statements of Professional Bancorp, Inc. including the respective notes thereto, which are included in other First Community filings. The unaudited pro forma combined condensed financial data does not give effect to any operating efficiencies anticipated in conjunction with the Professional Merger.

        Certain historical data of Professional Bancorp, Inc. have been reclassified on a pro forma basis to conform to First Community's classifications.

NOTE 7: PURCHASE PRICE AND FUNDING OF PROFESSIONAL MERGER

        The purchase price is based on $8 per share for Professional Bancorp, Inc. shareholders receiving the cash consideration and an exchange ratio of 0.55 First Community shares for Professional Bancorp shareholders receiving the stock consideration. Based on the $14.81 closing price of First Community on the day prior to the completion of the Professional Merger, those Professional Bancorp, Inc. shareholders choosing the stock consideration received a value of $8.15 per share.

F-10

        The total consideration paid in connection with the Professional Merger is calculated as:

		Stock Consideration		Cash Consideration			Total
Professional Bancorp common shares outstanding			917,722		1,113,032			2,030,754
Exchange ratio			0.55
			504,747		1,113,032
Value received		$	14.81	$	7.96	*
	Total purchase price	$	7,475,000	$	8,858,000		$	16,333,000

*

Less than $8.00 per share as a result of First Community purchasing some shares at market prior to the Professional Merger.

        The cash portion of the purchase price was financed through a combination of the issuance of $8 million of trust preferred securities which occurred in September 2000, a revolving line of credit and dividends from First Community's subsidiary banks. (Note: Trust preferred securities count as Tier 1 capital for regulatory purposes.)

        Professional Bancorp, Inc. shareholders had the option to elect cash of $8 or 0.55 shares of First Community common stock for each share of Professional Bancorp, Inc. common stock owned. Based upon the elections, 917,722 shares of Professional Bancorp Common Stock were exchanged for approximately 504,747 shares of First Community Common Stock and 1,113,032 shares of Professional Bancorp Common Stock were exchanged for approximately $8,904,000.

        As a result of the issuance of trust preferred, historical interest expense on the accompanying pro forma combined condensed income statements for the year ended December 31, 2000, has been increased by $582,000 representing the interest expense on the trust preferred.

NOTE 8: ALLOCATION OF PURCHASE PRICE OF PROFESSIONAL MERGER

        The purchase price of Professional Bancorp, Inc. has been allocated as follows:

Cash and cash equivalents		$	95,002,000
Time deposits in financial institutions			447,000
Securities			61,370,000
Net loans			102,376,000
Goodwill			4,634,000
Premises and equipment			817,000
Other assets			7,763,000
Deposits			(249,135,000	)
Borrowed funds			(679,000	)
Other liabilities			(6,262,000	)
	Total purchase price	$	16,333,000

        In allocating the purchase price, the following adjustments were made to Professional Bancorp, Inc.'s historical amounts. Other liabilities were increased by $3,144,000, representing the estimated merger costs. Other assets were increased by $2,923,000, representing the tax effects of the estimated merger costs and the reduction of the valuation reserve against the deferred tax asset. Substantially all of other assets and liabilities are either variable rate or short-term in nature and fair value adjustments were considered to be immaterial to the financial presentation. Goodwill is amortized on a straight line basis over fifteen years. These preliminary purchase price adjustments are subject to further refinement.

F-11

NOTE 9: MERGER COSTS OF PROFESSIONAL MERGER

        The table below reflects First Community's current estimate, for purposes of pro forma presentation, of the aggregate estimated merger costs of $3,144,000 ($221,000 net of taxes, computed using the combined federal and state tax rate of 42.0%) expected to be incurred in connection with the merger. While a portion of these costs may be required to be recognized over time, the current estimate of these costs has been recorded in the pro forma combined balance sheet in order to disclose the aggregate effect of these activities on First Community's pro forma combined financial position. The estimated aggregate costs, primarily comprised of anticipated cash charges, include the following:

Employee costs (severance and retention costs)		$	2,220,000
Professional services			169,000
Conversion and other costs			755,000
	Total		3,144,000
Tax benefits of above costs			1,003,000
Reversal of tax valuation allowance			1,920,000
	Net merger costs	$	221,000

        First Community management's cost estimates are forward-looking. While the costs represent First Community management's current estimate of merger costs associated with the merger that will be incurred, the ultimate level and timing of recognition of such costs will be based on the final integration in connection with consummation of the merger. Readers are cautioned that the completion of this integration and other actions that may be taken in connection with the merger will impact these estimates. The type and amount of actual costs incurred could vary materially from these estimates if future developments differ from the underlying assumptions used by management in determining the current estimate of these costs.

NOTE 10: KEY TO PRO FORMA ADJUSTMENTS OF PROFESSIONAL MERGER

        Summarized below are the pro forma adjustments necessary to reflect the acquisition of Professional Bancorp, Inc. based on the purchase method of accounting:

a)

Use cash as part of the cash portion of the purchase price. See note 7.



b)

Reflect goodwill resulting from the purchase method of accounting. See note 8.



c)

Reflect the deferred tax asset related to the deductible merger costs. See note 9.



d)

Adjust liabilities for accrued merger costs. See note 9.



e)

Reflect issuance of common stock to Professional Bancorp, Inc. shareholders.



f)

Eliminate Professional Bancorp, Inc. additional paid-in-capital.



g)

Eliminate Professional Bancorp, Inc. treasury stock.



h)

Eliminate Professional Bancorp, Inc. retained losses.



i)

Eliminate Professional Bancorp, Inc. unrealized losses on securities available-for-sale.



j)

Interest expense related to the issuance of trust preferred.



k)

Amortization of goodwill on a straight-line basis over fifteen years.



l)

Tax benefits associated with the additional interest expense.

F-12

NOTE 11: BASIS OF PRESENTATION OF PACIFIC WESTERN ACQUISITION

        On August 21, 2001, First Community entered into an agreement with Pacific Western National Bank ("Pacific Western," the "Pacific Western Agreement"), whereby Pacific Western would merge with and into a subsidiary of First Community (the "Pacific Western Acquisition"). It is expected that the Pacific Western Acquisition will close in the first quarter of 2002.

        Pursuant to the Pacific Western Agreement, each issued and outstanding share of common stock of Pacific Western prior to the Pacific Western Acquisition (other than as provided in the Pacific Western Agreement) will be converted into the right to receive $37.15 in cash, for a total purchase price of approximately $36.6 million. First Community anticipates raising $30,000,000 through a rights offering of 1,538,000 shares of First Community Common Stock. The remainder of the purchase price will be funded through cash available at Pacific Western.

        The Pacific Western Acquisition will be accounted for using purchase accounting. Therefore, operating results of First Community for the year ended December 31, 2000 and the nine-month period ended September 30, 2001 will not include the operations of Pacific Western. Also, the balance sheets of First Community as of September 30, 2001 and December 31, 2000 will not include the balance sheet of Pacific Western. Due to the materiality of this acquisition, the Unaudited Pro Forma Combined Condensed Statements of Income for the nine-month period ended September 30, 2001 and the one year period ended December 31, 2000 includes the operations of Pacific Western as if the Pacific Western Acquisition occurred at the beginning of the periods and the Unaudited Pro Forma Combined Condensed Balance Sheets as of September 30, 2001 and December 31, 2000 include Pacific Western as if the Pacific Western Acquisition had occurred on those dates.

        The information for Pacific Western as of and for the year ended December 31, 2000 is derived from the audited consolidated financial statements of Pacific Western. This information should be read in conjunction with the historical consolidated financial statements of Pacific Western including the respective notes thereto, which are included in other First Community filings. The unaudited pro forma combined condensed financial data does not give effect to any operating efficiencies anticipated in conjunction with the Pacific Western Acquisition.

        Certain historical data of Pacific Western have been reclassified on a pro forma basis to conform to First Community's classifications.

NOTE 12: PURCHASE PRICE AND FUNDING OF PACIFIC WESTERN ACQUISITION

        The purchase price is based on $37.15 per share for Pacific Western shareholders.

        The total consideration to be paid in connection with the Pacific Western Acquisition is calculated as:

		Shares	Price/ "In the Money"		Total Consideration (In thousands)
Common shares		921,185	$	37.15	$	34,222
Options		111,802	$	21.54		2,408
	Total purchase price				$	36,630

        It is anticipated that the purchase price will be financed through the issuance $20,000,000 of trust preferred securities and the issuance of approximately 1,111,100 shares of Company Common Stock for $20 million through a rights offering.

F-13

NOTE 13: ALLOCATION OF PURCHASE PRICE OF PACIFIC WESTERN ACQUISITION

        The purchase price of Pacific Western has been preliminarily allocated as follows (in thousands):

Cash and cash equivalents		$	52,016
Securities			19,075
Net loans			183,140
Goodwill			20,920
Premises and equipment			3,290
Other assets			3,790
Deposits			(240,440	)
Other liabilities			(5,161	)
	Total purchase price	$	36,630

        In allocating the purchase price, the following adjustments were made to Pacific Western's historical amounts. Other liabilities were increased by $4,074,000, representing the estimated merger costs. Other assets were increased by $855,000, representing the tax effects of the estimated merger costs. Substantially all of other assets and liabilities are either variable rate or short-term in nature and fair value adjustments were considered to be immaterial to the financial presentation. These preliminary purchase price adjustments are subject to further refinement, including the determination of a core deposit premium.

        In accordance with Statement of Financial Accounting Standards No. 141, "Business Combinations" and No. 142, "Goodwill and Other Intangible Assets", goodwill and intangibles with indefinite lives are not amortized for acquisitions initiated after June 30, 2001.

NOTE 14: MERGER COSTS OF PACIFIC WESTERN ACQUISITION

        The table below reflects First Community's current estimate, for purposes of pro forma presentation, of the aggregate estimated merger costs of $4,074,000 ($3,219,000 net of taxes, computed using the combined federal and state tax rate of 42.0%) expected to be incurred in connection with the acquition. While a portion of these costs may be required to be recognized over time, the current estimate of these costs has been recorded in the pro forma combined balance sheets in order to disclose the aggregate effect of these activities on First Community's pro forma combined financial position. The estimated aggregate costs, primarily comprised of anticipated cash charges, include the following:

Employee costs	$	1,065,000
Conversion costs		400,000
Other costs		570,000
		2,035,000
Tax benefits		855,000
		1,180,000
Investment banking and other professional fees		2,039,000
	$	3,219,000

        First Community management's cost estimates are forward-looking. While the costs represent First Community management's current estimate of merger costs associated with the merger that will be incurred, the ultimate level and timing of recognition of such costs will be based on the final integration in connection with consummation of the merger. Readers are cautioned that the completion of this integration and other actions that may be taken in connection with the merger will impact these

F-14

estimates. The type and amount of actual costs incurred could vary materially from these estimates if future developments differ from the underlying assumptions used by management in determining the current estimate of these costs.

NOTE 15: KEY TO PRO FORMA ADJUSTMENTS OF PACIFIC WESTERN ACQUISITION

        Summarized below are the pro forma adjustments necessary to reflect the acquisition of Pacific Western based on the purchase method of accounting:

aaa)	Cash raised which is not used as part of purchase. See note 12.
bbb)	Reflect goodwill resulting from the purchase method of accounting. See note 13.
ccc)	Reflect the deferred tax asset related to the deductible merger costs. See note 14.
ddd)	Adjust liabilities for accrued merger costs. See note 14.
eee)	Reflect issuance of common stock via a $20,000,000 rights offering less existing Pacific Western common stock of $1,536,000.
fff)	Eliminate Pacific Western additional paid-in-capital.
ggg)	Eliminate Pacific Western retained earnings.
hhh)	Eliminate Pacific Western unrealized gains on securities available-for-sale.
iii)	Estimated interest expense related to issuance of trust preferred at an assumed interest rate of 7.5% per annum. Had interest expense on the trust preferred securities varied by 1/2%, the effect on net income (loss) would have $14,500 after tax-per annum.
jjj)	Tax benefits associated with the reduced net interest income.
kkk)	Reflect issuance of $20,000,000 of trust preferred.

Note 16: BASIS OF PRESENTATION OF W.H.E.C.

        On November 12, 2001, First Community entered into an agreement with W.H.E.C., Inc., ("W.H.E.C."), the holding company of Capital Bank of North County, the "W.H.E.C. Agreement"), whereby W.H.E.C. would merge with and into First Community and Capital Bank would merge with and into a subsidiary of First Community ("the W.H.E.C. Acquisition"). It is expected that the W.H.E.C. Acquisition will close in the second quarter of 2002.

        Pursuant to the W.H.E.C. Agreement, each issued and outstanding share of common stock of W.H.E.C. prior to the W.H.E.C. Acquisition (other than as provided in the W.H.E.C. Agreement) will be converted into First Community common stock using an exchange ratio of 0.2353 (subject to adjustment as provided in the W.H.E.C. Agreement).

        The W.H.E.C. Acquisition will be accounted for using purchase accounting. Therefore, operating results of First Community for the year ended December 31, 2000 and the nine-month period ended September 30, 2001 will not include the operations of W.H.E.C. Also, the balance sheets of First Community as of September 30, 2001 and December 31, 2000 will not include the balance sheet of W.H.E.C. Due to the materiality of the acquisition, the Unaudited Pro Forma Combined Condensed Statements of Income for the nine-month period ended September 30, 2001 and the one year period ended December 31, 2000 includes the operations of W.H.E.C. as if the W.H.E.C. Acquisition occurred at the beginning of the periods and the Unaudited Pro Forma Condensed Balance Sheets as of September 30, 2001 and December 31, 2000 include W.H.E.C. as if the W.H.E.C. Acquisition had occurred on those dates.

F-15

        The information for W.H.E.C. as of and for the year ended December 31, 2000 is derived from the audited financial statements of W.H.E.C. This information should be read in conjunction with the historical financial statements of W.H.E.C. including the respective notes thereto, which are included herein. The unaudited pro forma combined condensed financial data does not give effect to any operating efficiencies anticipated in conjunction with the W.H.E.C. Acquisition.

        Certain historical data of W.H.E.C. have been reclassified on a pro forma basis to conform to First Community's classifications. The unaudited pro forma numbers of common shares outstanding, common shareholders' equity per share, weighted average number of shares (basic and diluted) and income (loss) per share (basic and diluted) are based on the share amounts for First Community plus the share amounts for W.H.E.C. multiplied by the W.H.E.C. exchange ratio of 0.2353 as provided by the merger agreement.

Note 17: PURCHASE PRICE AND FUNDING OF W.H.E.C. ACQUISITION

        The purchase price is based on issuing approximately 1,080,000 shares of First Community common stock. The price of First Community common stock on the acquisition date was $20.00 per share resulting in a total purchase price of approximately $21,600,000.

Note 18: ALLOCATION OF PURCHASE PRICE OF W.H.E.C. ACQUISITION

        The purchase price of W.H.E.C. has been allocated as follows (in thousands):

Cash and cash equivalents		$	18,844
Time deposits in financial institutions			450
Securities			30,127
Net loans			85,909
Goodwill			13,471
Premises and equipment			1,268
Other assets			4,667
Deposits			(129,042	)
Other liabilities			(4,094	)
	Total purchase price	$	21,600

        In allocating the purchase price, the following adjustments were made to W.H.E.C.'s historical amounts. Other liabilities were increased by $2,957,000, representing the estimated merger costs. Other assets were increased by $651,000, representing the tax effects of the estimated merger costs. Substantially all of other assets and liabilities are either variable rate or short-term in nature and fair market value adjustments were considered to be immaterial to the financial presentation. These preliminary purchase price adjustments are subject to further refinement, including the determination of a core deposit premium.

Note 19: MERGER COSTS OF W.H.E.C.

        The unaudited pro forma condensed financial data reflect First Community's and W.H.E.C.'s respective management's current estimate, for purposes of pro forma presentation, of the aggregate estimated merger costs of $2,957,000 ($2,306,000 net of taxes, computed using the combined federal and state tax rate of 42%) expected to be incurred in connection with the W.H.E.C. merger. While a portion of these costs may be required to be recognized over time, the current estimate of these cots has been recorded in the pro forma combined balance sheets in order to disclose the aggregate effect

F-16

of these activities on First Community's pro forma combined financial position. The estimated aggregate costs include the following:

Employee costs	$	981,000
Conversion costs		400,000
Other costs		170,000
		1,551,000
Tax benefits		651,000
Investment banking and other professional fees		1,406,000
	$	2,306,000

        These cost estimates are forward-looking. While the costs represent management's current estimate of merger costs that will be incurred, the ultimate level and timing of recognition of such costs will be based on the final merger and integration by various of First Community's and W.H.E.C.'s task forces and integration committees. Readers are cautioned that the completion of the merger and integration plan and the resulting management plans detailing actions to be undertaken to effect the merger and resultant integration of operations will impact these estimates; the type and amount of costs incurred could vary materially from these estimates if future developments differ from the underlying assumptions used by management in determining the current estimate of these costs.

NOTE 20: KEY TO PRO FORMA ADJUSTMENTS OF W.H.E.C. ACQUISITION

        Summarized below are the pro forma adjustments necessary to reflect the acquisition of W.H.E.C. based on the purchase method of accounting:

aaaa)	Reflect goodwill resulting from the purchase method of accounting. See note 18.
bbbb)	Reflect the deferred tax asset to the deductible merger costs. See note 19.
cccc)	Adjust liabilities for accrued merger costs. See note 19.
dddd)	Reflect issuance of common stock to W.H.E.C. shareholders
eeee)	Eliminate W.H.E.C. additional paid-in capital.
ffff)	Eliminate W.H.E.C. retained earnings
gggg)	Eliminate W.H.E.C. unrealized gain on securities available-for-sale

F-17

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Unaudited Pro Forma Condensed Combined Financial Data of First Community, First Charter, Pacific Western and W.H.E.C.
Notes to Unaudited Pro Forma Condensed Combined Financial Data of First Community, First Charter, Professional Bancorp, Pacific Western and W.H.E.C.

EX-99.2

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Exhibit 99.2

Pacific Western National Bank

September 30, 2001

INDEX—Interim Financial Information

	Page
Condensed Statements of Condition at September 30, 2001 and December 31, 2000	F-2
Condensed Statements of Income for the Nine Months Ended September 30, 2001 and 2000	F-3
Condensed Statements of Changes in Shareholders' Equity from January 1, 2000 through September 30, 2001	F-4
Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2001 and 2000	F-5
Notes to Financial Statements	F-6

F-1

Pacific Western National Bank

Condensed Statements of Condition

(Unaudited—Dollar Amounts in Thousands)

		September 30, 2001			December 31, 2000
Cash and Due From Bank		$	12,016		$	12,188
Federal Funds Sold			40,000			2,800
	TOTAL CASH AND CASH EQUIVALENTS		52,016			14,988
Investment Securities, net			18,727			5,504
Loans			185,100			165,835
Allowance for Loan Losses			(1,960	)		(1,791	)
	NET LOANS		183,140			164,044
Premises and Equipment, net			3,290			2,720
Federal Reserve and Federal Home Loan Bank Stock, at Cost			348			262
Accrued Interest and Other Assets			2,935			2,693
		$	260,456		$	190,211
Noninterest-Bearing Deposits		$	38,356		$	33,456
Interest-Bearing Deposits			202,084			138,154
	TOTAL DEPOSITS		240,440			171,610
Accrued Interest and Other Liabilities			1,087			939
	TOTAL LIABILITIES		241,527			172,549
Common Shares			1,536			1,463
Paid-in Capital			5,860			4,987
Retained Earnings			11,472			11,208
Accumulated Other Comprehensive Income			61			4
	TOTAL SHAREHOLDERS' EQUITY		18,929			17,662
		$	260,456		$	190,211

The accompanying notes are an integral part of the financial statements.

F-2

Pacific Western National Bank

Condensed Statements of Income

(Unaudited—Dollar Amounts in Thousands, Except Per Share Data)

			For the Nine Months Ended September 30,
			2001		2000
Interest Income			$	14,930	$	12,660
Interest Expense				5,871		3,990
		Net Interest Income		9,059		8,670
Provision for Loan Losses				930		720
		Net Interest Income After Provision for Loan Losses		8,129		7,950
Noninterest Income				1,032		911
Noninterest Expense				7,097		6,401
		Income Before Taxes		2,064		2,460
Income Taxes				852		1,010
		Net Income	$	1,212	$	1,450
Per Share Data:
	Net Income—Basic		$	1.32	$	1.57
	Net Income—Diluted		$	1.27	$	1.54

The accompanying notes are an integral part of the financial statements.

F-3

Pacific Western National Bank

Condensed Statements of Changes in Shareholders' Equity

(Unaudited—Dollar Amounts in Thousands)

				Shares	Common Stock		Paid-In Capital		Comprehensive Income		Retained Earnings			Accumulated Other Comprehensive Income
January 1, 2000				835,698	$	1,394	$	4,191			$	9,955		$	(3	)
Five Percent Stock Dividend				41,706		69		796				(865	)
Cash Paid in Lieu of Fractional Shares												(2	)
	Comprehensive Income
Unrealized Gain on Securities Available for Sale, Net of Taxes									$	7					7
Net Income										2,120		2,120
		Comprehensive Income							$	2,127
			December 31, 2000	877,404		1,463		4,987				11,208			4
Five Percent Stock Dividend				43,781		73		873				(946	)
Cash Paid in Lieu of Fractional Shares												(2	)
	Comprehensive Income
Unrealized Gain on Securities Available for Sale, Net of Taxes									$	57					57
Net Income										1,212		1,212
		Comprehensive Income							$	1,269
			September 30, 2001	921,185	$	1,536	$	5,860			$	11,472		$	61

The accompanying notes are an integral part of the financial statements.

F-4

Pacific Western National Bank

Condensed Statements of Cash Flows

(Unaudited—Dollar Amounts in Thousands)

				For the Nine Months Ended September 30,
				2001			2000
OPERATING ACTIVITIES
	Net Income			$	1,212		$	1,450
	Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities:
		Depreciation and Amortization			484			420
		Provision for Loan Losses			930			720
		Other Items—Net			(94	)		(1,112	)
			NET CASH PROVIDED BY OPERATING ACTIVITIES		2,532			1,478
INVESTING ACTIVITIES
	Purchases of Investment Securities				(21,353	)		—
	Sale and Maturities of Investment Securities				8,187			1,698
	Net Decrease (Increase) in Federal Reserve and Home Loan Bank Stock				(86	)		326
	Net Change in Loans				(20,026	)		(13,320	)
	Proceeds From Sale of Bank Premises and Equipment				—			965
	Purchase of Premises and Equipment				(1,054	)		(826	)
			NET CASH USED BY INVESTING ACTIVITIES		(34,332	)		(11,157	)
FINANCING ACTIVITIES
	Net Increase in Deposits				68,830			29,817
	Net Change in Other Borrowings				—			(3,500	)
	Cash Paid in Lieu of Fractional Shares				(2	)		(2	)
			NET CASH PROVIDED BY FINANCING ACTIVITIES		68,828			26,315
			INCREASE IN CASH AND CASH EQUIVALENTS		37,028			16,636
	Cash and Cash Equivalents at Beginning of Period				14,988			8,178
			CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	52,016		$	24,814
SUPPLEMENTAL CASH FLOW INFORMATION:
	Interest Paid			$	5,896		$	4,148
	Income Taxes Paid			$	1,072		$	1,218

The accompanying notes are an integral part of the financial statements.

F-5

Pacific Western National Bank

Notes to Financial Statements

Note 1—Basis of Presentation and Management Representation

        The accompanying financial information has been prepared in accordance with the Securities and Exchange Commission rules and regulations for quarterly reporting and therefore does not necessarily include all information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles.

        Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year. In the opinion of management, the unaudited financial information for the nine-month period ended September 30, 2001 and 2000, reflects all adjustments, consisting only of normal recurring accruals and provisions, necessary for a fair presentation thereof.

Note 2—Earnings Per Share

        Effective December 31, 1997, the Bank adopted Statement of Financial Accounting Standards No. 128, "Earnings per Share." Accordingly, basic earnings per share are computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during each period. The computation of diluted earnings per share also considers the number of shares issuable upon the assumed exercise of outstanding common stock options.

F-6

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Pacific Western National Bank September 30, 2001 INDEX—Interim Financial Information
Pacific Western National Bank Condensed Statements of Condition (Unaudited—Dollar Amounts in Thousands)
Pacific Western National Bank Condensed Statements of Income (Unaudited—Dollar Amounts in Thousands, Except Per Share Data)
Pacific Western National Bank Condensed Statements of Changes in Shareholders' Equity (Unaudited—Dollar Amounts in Thousands)
Pacific Western National Bank Condensed Statements of Cash Flows (Unaudited—Dollar Amounts in Thousands)
Pacific Western National Bank Notes to Financial Statements

EX-99.3

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Exhibit 99.3

INDEPENDENT AUDITORS' REPORT

         Board of Directors and Shareholders
Pacific Western National Bank

        We have audited the accompanying statements of financial condition of Pacific Western National Bank as of December 31, 2000 and 1999, and the related statements of income, changes in shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Bank's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Pacific Western National Bank as of December 31, 2000 and 1999, and the results of its operations, and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with generally accepted accounting principles.

VAVRINEK, TRINE, DAY & CO., LLP

Laguna Hills, California

January 8, 2001, except for Note 14 which is dated August 22, 2001

F-1

PACIFIC WESTERN NATIONAL BANK

STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31, 2000 and 1999

				2000			1999
ASSETS
Cash and Due from Banks				$	12,187,734		$	7,878,085
Federal Funds Sold					2,800,000			300,000
			Total Cash and Cash Equivalents		14,987,734			8,178,085
Investment Securities Available for Sale					5,504,001			7,258,813
Loans, Net of Unearned Income and Deferred Loan Fees					165,835,425			134,953,182
Allowance for Loan Losses					(1,791,215	)		(1,494,568	)
			Net Loans		164,044,210			133,458,614
Bank Premises and Equipment					2,720,222			5,067,564
Federal Reserve Bank and Federal Home Loan Bank Stock, at cost					261,350			585,650
Accrued Interest Receivable and Other Assets					2,693,214			1,780,246
			Total Assets	$	190,210,731		$	156,328,972
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
	Demand Deposits			$	33,455,668		$	22,380,581
	NOW Accounts				19,317,694			15,529,421
	Money Market and Savings				53,813,750			57,603,451
	Certificates of Deposit:
		Under $100,000			31,334,555			21,896,829
		$100,000 and Over			33,688,535			18,514,710
			Total Deposits		171,610,202			135,924,992
Federal Funds Purchased					—			3,500,000
Accrued Interest Payable and Other Liabilities					938,597			1,367,517
			Total Liabilities		172,548,799			140,792,509
Commitments—Note 7
Shareholders' Equity
	Common Stock—$1.67 Par Value; Authorized 2,000,000 Shares; Issued and Outstanding, 877,404 in 2000 and 835,698 Shares in 1999				1,463,188			1,393,539
	Paid-in Capital				4,986,491			4,190,741
	Retained Earnings				11,208,103			9,955,061
	Accumulated Other Comprehensive Income				4,150			(2,878	)
			Total Shareholders' Equity		17,661,932			15,536,463
			Total Liabilities and Shareholders' Equity	$	190,210,731		$	156,328,972

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

F-2

PACIFIC WESTERN NATIONAL BANK

STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, and 1998

			2000		1999		1998
Interest Income
	Interest and Fees on Loans		$	16,430,394	$	12,440,445	$	8,867,873
	Interest on Investment Securities			433,840		540,249		877,862
	Other Interest Income			503,463		296,814		599,639
		Total Interest Income		17,367,697		13,277,508		10,345,374
Interest Expense
	Interest on Deposits			5,641,096		3,633,248		2,744,135
	Other			9,470		2,541		434
		Total Interest Expense		5,650,566		3,635,789		2,744,569
		Net Interest Income		11,717,131		9,641,719		7,600,805
Provision for Loan Losses				840,000		750,000		522,500
		Net Interest Income After Provision for Loan Losses		10,877,131		8,891,719		7,078,305
Other Income
	Service Charges on Deposit Accounts			847,345		864,959		908,697
	Other Service Charges and Income			241,830		253,010		227,369
	Gain on Sale of Loans			109,405		—		197,719
	Gain on Sale of Bank Premises and Equipment			—		28,047		—
				1,198,580		1,146,016		1,333,785
Other Expenses
	Salaries and Employee Benefits			4,022,046		3,536,362		3,236,417
	Occupancy Expenses			656,325		535,980		435,835
	Furniture and Equipment Expenses			939,559		724,091		472,485
	Stationery and Other Office Expenses			699,890		533,045		431,885
	Data Processing and Other Professional Services			1,290,605		1,121,750		989,524
	Advertising and Business Promotion Expense			354,889		347,483		304,823
	Other Expenses			530,779		496,443		441,030
				8,494,093		7,295,154		6,311,999
		Income Before Income Taxes		3,581,618		2,742,581		2,100,091
Income Taxes				1,461,540		1,126,410		846,200
		Net Income	$	2,120,078	$	1,616,171	$	1,253,891
Earnings Per Share
	Net Income—Basic		$	2.30	$	1.75	$	1.36
	Net Income—Diluted		$	2.25	$	1.72	$	1.33

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

F-3

PACIFIC WESTERN NATIONAL BANK

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, and 1998

		Shares	Common Stock		Paid-In Capital		Comprehensive Income			Retained Earnings			Accumulated Other Comprehensive Income
Balance, January 1, 1998		758,125	$	1,263,992	$	2,576,780				$	8,831,469		$	47,834
	Five Percent Stock Dividend	37,844		63,200		826,135					(889,334	)
	Cash Paid in Lieu of Fractional Shares										(1,464	)
Comprehensive Income:
	Unrealized Gain on Securities Available for Sale, Net of Taxes of $20,560						$	28,025			28,025			28,025
	Net Income for the Year							1,253,891			1,253,891
Total Comprehensive Income							$	1,281,916
Balance, December 31, 1998		795,969		1,327,192		3,402,915					9,194,562			75,859
	Five Percent Stock Dividend	39,729		66,347		787,826		(854,173	)		(854,173	)
	Cash Paid in Lieu of Fractional Shares										(1,499	)
Comprehensive Income:
	Unrealized Loss on Securities Available for Sale, Net of Taxes of $55,476						$	(78,737	)					(78,737	)
	Net Income for the Year							1,616,171			1,616,171
Total Comprehensive Income							$	1,537,434
Balance, December 31, 1999		835,698		1,393,539		4,190,741					9,955,061			(2,878	)
	Five Percent Stock Dividend	41,706		69,649		795,750					(865,399	)
	Cash Paid in Lieu of Fractional Shares										(1,637	)
Comprehensive Income:
	Unrealized Gain on Securities Available for Sale, Net of Taxes of $4,883						$	7,028						7,028
	Net Income for the Year							2,120,078			2,120,078
Total Comprehensive Income							$	2,127,106
Balance, December 31, 2000		877,404	$	1,463,188	$	4,986,491				$	11,208,103		$	4,150

The accompanying notes are an intergral part of these financial statements.

F-4

PACIFIC WESTERN NATIONAL BANK

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, and 1998

				2000			1999			1998
Cash Flows From Operating Activities
	Net Income			$	2,120,078		$	1,616,171		$	1,253,891
	Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
		Depreciation and Amortization			630,599			583,693			393,693
		Premium (Discount) Amortization on Investments			14,485			50,027			(83,489	)
		Provision for Loan Losses			840,000			750,000			522,500
		Gain on Sale of Bank Premises and Equipment			—			(28,047	)		—
		Gain on Sale of Loans			(109,405	)		—			(197,719	)
		Deferred Income Taxes			(174,000	)		(133,000	)		(36,000	)
		Net Change in Other Assets and Liabilities			(1,067,727	)		(36,577	)		1,043,581
			Net Cash Provided by Operating Activities		2,254,030			2,802,267			2,896,457
Cash Flows From Investing Activities
	Proceeds From Sales and Maturities of Investment Securities				1,755,666			6,287,177			17,742,423
	Purchase of Investment Securities				(2,787,676	)		(8,931,142	)
	Net Change in Federal Reserve Bank and Federal Home Loan Stock				324,300			(443,700	)		(26,700	)
	Net Increase in Loans				(29,625,596	)		(40,145,258	)		(23,101,960	)
	Proceeds From Sale of Bank Premises and Equipment				964,723			504,791			—
	Expenditures For Bank Premises and Equipment				(1,047,047	)		(3,143,741	)		(749,183	)
			Net Cash Used in Investing Activities		(27,627,954	)		(39,728,407	)		(15,066,562	)
Cash Flows From Financing Activities
	Net Change in Federal Funds				(3,500,000	)		3,500,000			—
	Net Increase in Demand Accounts, Money Market, NOW and Savings Accounts				11,073,659			13,537,848			10,948,292
	Net Increase in Certificates of Deposit				24,611,551			13,656,354			5,047,055
	Cash Paid in Lieu of Fractional Shares				(1,637	)		(1,499	)		(1,464	)
			Net Cash Provided by Financing Activities		32,183,573			30,692,703			15,993,883
			Net Increase (Decrease) in Cash and Cash Equivalents		6,809,649			(6,233,437	)		3,823,778
Cash and Cash Equivalents, Beginning of Year					8,178,085			14,411,522			10,587,744
Cash and Cash Equivalents, End of Year				$	14,987,734		$	8,178,085		$	14,411,522
Supplemental Disclosures of Cash Flow Information
	Interest Payments			$	5,770,953		$	3,250,862		$	2,621,119
	Income Tax Payments			$	1,562,925		$	1,518,366		$	977,434
	Net Change in Valuation Allowance For Investment Securities			$	7,028		$	78,737		$	28,025
	Reclassification from Retained Earnings to Common Stock for Stock Dividend			$	865,399		$	854,173		$	889,334

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

F-5

PACIFIC WESTERN NATIONAL BANK

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, and 1998

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

        Pacific Western National Bank has been organized and operates as a single operating segment. The Bank maintains three branches in Los Angeles County and one in Orange County. The Bank's primary source of revenue is providing loans to customers, who are predominately small and middle-market businesses and individuals.

Use of Estimates in the Preparation of Financial Statements

        The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

        For purposes of reporting cash flows, cash and cash equivalents include cash, due from banks and federal funds sold. Generally, federal funds are sold for one-day periods.

Cash and Due From Banks

        Banking regulations require that all banks maintain a percentage of their deposits as reserves in cash or on deposit with the Federal Reserve Bank. The Bank complied with the reserve requirements as of December 31, 2000.

        The Bank maintains amounts due from banks, which exceed federally insured limits. The Bank has not experienced any losses in such accounts.

Investment Securities

        The Bank applies Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities", which addresses the accounting for investments in equity securities that have readily determinable fair values and for investments in all debt securities. Pursuant to SFAS No. 115, Securities are classified in three categories and accounted for as follows: Debt securities that the Bank has the positive intent and ability to hold to maturity are classified as held-to-maturity and are measured at amortized cost; debt and equity securities bought and held principally for the purpose of selling in the near term are classified as trading securities and are measured at fair value, with unrealized gains and losses included in earnings; debt and equity securities not classified as either held-to-maturity or trading securities are deemed available-for-sale and are measured at fair value, with unrealized gains and losses, net of applicable taxes, reported in a separate component of stockholders' equity.

Loans and Interest on Loans

        Loans are reported at the principal amount outstanding, net of any deferred loan origination fee income and deferred direct loan origination costs, and net of any unearned interest on discounted

F-6

loans. Deferred loan origination fee income and direct loan origination costs are amortized to interest income over the life of the loan using the interest method. Interest on loans is accrued to income daily based upon the outstanding principal balances.

        Loans for which the accrual of interest has been discontinued are designated as nonaccrual loans. Accrual of interest on such loans is discontinued when there exists a reasonable doubt as to the full and timely collection of either principal or interest. Income on such loans is then only recognized to the extent that cash is received and where the future collection of principal is probable. Accrual of interest is resumed only when principal and interest are brought fully current and when such loans are considered to be collectible as to both principal and interest.

        For impairment recognized in accordance with Financial Accounting Standards Board (FASB) SFAS No. 114, "Accounting by Creditors for Impairment of a Loan" (SFAS No. 114), as amended by SFAS No. 118, the entire change in the present value of expected cash flows is reported as either provision for loan losses in the same manner in which impairment initially was recognized, or as a reduction in the amount of provision for loan losses that otherwise would be reported.

Allowance For Loan Losses

        The allowance for loan losses is established by a provision charged to current period income. Loan losses are charged against the allowance when the loan's principal is deemed uncollectible. Loan recoveries are only recognized to the extent that cash is received. The allowance is maintained at a level considered adequate, in management's judgment, to provide for loan losses that can be reasonably anticipated. The evaluation of the adequacy of the allowance takes into consideration several factors including but not exclusively, current economic conditions, historical loan loss experience, and factors affecting collectibility on specific borrowers based upon regular credit reviews.

Premises and Equipment

        Land is carried at cost. Premises and equipment are carried at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives, which ranges from three to ten years for furniture and fixtures and forty years for buildings. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the improvements or the remaining lease term, whichever is shorter. Expenditures for betterments or major repairs are capitalized and those for ordinary repairs and maintenance are charged to operations as incurred.

Income Taxes

        Provisions for income taxes are based on amounts reported in the statements of income (after exclusion of nontaxable income such as interest on state and municipal securities) and include deferred taxes on temporary differences in the recognition of income and expense for tax and financial statement purposes. Deferred taxes are computed on the liability method as prescribed in SFAS No. 109, "Accounting for Income Taxes".

F-7

Comprehensive Income

        Beginning in 1998, the Bank adopted SFAS No. 130, "Reporting Comprehensive Income", which requires the disclosure of comprehensive income and its components. Changes in unrealized gain (loss) on available-for-sale securities net of income taxes is the only component of accumulated other comprehensive income for the Bank.

Earnings Per Shares (EPS)

        Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Disclosure About Fair Value of Financial Instruments

        SFAS No. 107 specifies the disclosure of the estimated fair value of financial instruments. The Bank's estimated fair value amounts have been determined by the Bank using available market information and appropriate valuation methodologies.

        However, considerable judgment is required to develop the estimates of fair value. Accordingly, the estimates are not necessarily indicative of the amounts the Bank could have realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since the balance sheet date and, therefore, current estimates of fair value may differ significantly from the amounts presented in the accompanying Notes.

Stock-Based Compensation

        SFAS No. 123, "Accounting for Stock-Based Compensation," encourages, but does not require, banks to record compensation cost for stock-based employee compensation plans at fair value. The Bank has chosen to continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Bank's stock at the date of the grant over the amount an employee must pay to acquire the stock. The pro forma effects of adoption are disclosed in Note 10.

Current Accounting Pronouncements

        In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" (as amended in 2000 by SFAS No. 138). This Statement establishes accounting and reporting standards for derivative instruments and for hedging activities. This new standard was originally effective for 2000. In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments

F-8

and Hedging Activities—Deferral of the Effective Date of FASB Statement No. 133". This Statement establishes the effective date of SFAS No. 133 for 2001. SFAS 133 is not expected to have a material impact on the Bank's financial statements.

Reclassifications

        Certain reclassifications were made to prior years' presentations to conform to the current year. These reclassifications are of a normal recurring nature.

NOTE 2—INVESTMENTS

        The amortized cost and fair values of investment securities available for sale at December 31, 2000 were:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Obligations of U.S. Government Agencies and Corporations	$	3,000,000	$	179	$	(4,375	)	$	2,995,804
Municipal Securities		760,644		1,921		(10,212	)		752,353
Mortgage-Backed Securities		1,425,127		12,547		(1,607	)		1,436,067
Other Securities		311,195		8,582		—			319,777
	$	5,496,966	$	23,229	$	(16,194	)	$	5,504,001

        The amortized cost and fair values of investment securities available for sale at December 31, 1999 were:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Obligations of U.S. Government Agencies and Corporations	$	4,000,000	$	1,562	$	(28,438	)	$	3,973,124
Municipal Securities		1,198,282		6,204		(2,611	)		1,201,875
Mortgage-Backed Securities		1,682,493		6,414		(385	)		1,688,522
Other Securities		382,915		12,377		—			395,292
	$	7,263,690	$	26,557	$	(31,434	)	$	7,258,813

F-9

        The amortized cost and fair values of investment securities available for sale at December 31, 2000, by expected maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
Due in One Year or Less	$	86,422	$	86,544
Due After One Year but Less Than Five Years		3,674,222		3,661,613
Mortgage-Backed Securities		1,425,127		1,436,067
Other Securities		311,195		319,777
	$	5,496,966	$	5,504,001

        Securities with a carrying value of $5,127,467 and $6,454,726 at December 31, 2000 and 1999, respectively, were pledged to secure public deposits, short-term borrowings and lines-of-credit, or other items required by law.

NOTE 3—LOANS AND THE RELATED ALLOWANCE FOR LOAN LOSSES

        The Bank's loan portfolio consists primarily of loans to borrowers within the counties of Los Angeles and Orange. Although the Bank seeks to avoid concentrations of loans to a single industry or based upon a single class of collateral, real estate is among the principal industries in the Bank's market area and, as a result, the Bank's loan and collateral portfolios are, to some degree, concentrated in that industry. The majority of the Bank's consumer loans are auto loans purchased through automobile dealers.

        The following is a summary of the major components of loans outstanding at December 31, 2000 and 1999:

		December 31,
		2000			1999
Consumer Loans—Primarily Auto Financing		$	53,123,649		$	45,171,032
Commercial Loans			28,053,092			18,687,036
Real Estate Loans—Construction Financing			33,737,927			29,467,804
Real Estate Loans—Other			52,502,349			44,496,186
	Total Loans		167,417,017			137,822,058
Unearned Interest on Discounted Loans			(933,022	)		(2,262,803	)
Net Deferred Loan Fees			(648,570	)		(606,073	)
		$	165,835,425		$	134,953,182

F-10

        Changes in the allowance for possible loan losses as of December 31:

	2000			1999			1998
Balance at Beginning of Year	$	1,494,568		$	1,157,534		$	1,127,100
Provisions Charged to Operating Expense		840,000			750,000			522,500
Recovery of Principal on Loans Previously Charged Off		125,790			160,612			124,003
Principal on Loans Charged Off		(669,143	)		(573,578	)		(616,069	)
Balance at End of Year	$	1,791,215		$	1,494,568		$	1,157,534

        The following is a summary of the investment in impaired loans, the related allowance for loan losses, and income recognized thereon as of December 31:

	2000		1999		1998
Recorded Investment in Impaired Loans	$	304,664	$	170,071	$	98,972
Related Allowance for Loan Losses	$	5,000	$	5,000	$	3,000
Average Recorded Investment in Impaired Loans	$	353,000	$	135,000	$	191,000
Interest Income Recognized for Cash Payments		None		None		None

NOTE 4—BANK PREMISES AND EQUIPMENT

        Bank premises and equipment at December 31, consist of the following:

	2000			1999
Land	$	453,024		$	453,024
Bank Premises		892,777			892,777
Leasehold Improvements		1,621,323			1,236,829
Furniture, Fixtures and Equipment		3,151,636			2,626,746
Bank Automobiles		187,280			150,007
Construction in Process		—			2,723,459
		6,306,040			8,082,842
Less: Accumulated Depreciation and Amortization		(3,585,818	)		(3,015,278	)
	$	2,720,222		$	5,067,564

        During 1999 and 2000 the Bank constructed a building to house a new branch and administrative center in Brea California. This facility was completed and occupied in early 2000. The Bank has entered into a sale-leaseback transaction subject to a 20-year lease with two 10-year options to renew. The Bank received a below market rate on the rent for the initial term as part of overall sales consideration. Prepaid rent of approximately $559,000 at December 31, 2000 is included in other assets and will be amortized to lease expense over the initial term of the lease.

F-11

        The Bank possesses premises and equipment under noncancelable long-term operating leases expiring on various dates through 2011 with renewal options through 2021. At December 31, 2000, the approximate future minimum rental commitments under these leases are as follows:

2001	$	352,000
2002		325,000
2003		267,000
2004		267,000
2005		267,000
Thereafter		3,340,000
Total	$	4,818,000

        Rental payments for premises charged to operating expense amounted to approximately $347,000, $193,000, and $162,000 for the years ended December 31, 2000, 1999, and 1998, respectively.

NOTE 5—DEPOSITS

        At December 31, 2000, the scheduled maturities of certificates of deposit are as follows:

Due in One Year	$	61,454,718
Due After One Year But Less Than Five Years		3,568,372
	$	65,023,090

        Interest expense as of December 31, relating to interest bearing deposits and other borrowings is as follows:

	2000		1999		1998
Interest on Money Market and NOW Accounts	$	476,134	$	364,915	$	269,195
Interest Savings Accounts		1,805,948		1,595,958		1,392,494
Interest on Certificates of Deposit Under $100,000		1,796,067		756,276		632,135
Interest on Certificates of Deposit of $100,000 or More		1,562,947		916,099		450,745
Interest on Short-Term Borrowings		9,470		2,541		—
	$	5,650,566	$	3,635,789	$	2,744,569

F-12

NOTE 6—INCOME TAXES

        The provisions for income tax for the years ended December 31, 2000, 1999, and 1998, were as follows:

		2000			1999			1998
Current
	Federal	$	1,209,375		$	915,125		$	675,000
	State		426,165			344,285			207,200
			1,635,540			1,259,410			882,200
Deferred			(174,000	)		(133,000	)		(36,000	)
		$	1,461,540		$	1,126,410		$	846,200

        The provision for income taxes for 2000, 1999, and 1998 reflects effective rates of 40.8%, 41.1% and 40.3%, respectively. A reconciliation of the statutory income tax of 34% to the income tax provision is as follows:

	2000			1999			1998
Federal Income Tax at the Statutory Rate	$	1,217,000		$	932,000		$	714,000
State Franchise Tax, Net of the Federal Income Tax Benefit		256,000			196,000			136,000
Tax Exempt Interest		(20,000	)		(26,000	)		(18,000	)
Other		8,540			24,410			14,200
Total Income Tax Provision	$	1,461,540		$	1,126,410		$	846,200

        Deferred taxes arise primarily from timing differences in the recognition of income and expenses for tax and financial reporting purposes.

        The following is a summary of the components of the net deferred tax assets included in other assets on the balance sheet:

		2000		1999
Deferred Tax Assets:
	Allowance for Loan Losses Due to Tax Limitations	$	457,000	$	381,000
	Premises and Equipment Due to Depreciation Difference		107,000		43,000
	Other Assets/Liabilities		149,000		123,000
Net Deferred Taxes		$	713,000	$	547,000

F-13

NOTE 7—COMMITMENTS AND CONTINGENCIES

        In the normal course of business, the Bank is a party to financial instruments with off-balance-sheet risk. These financial instruments include commitments to extend credit and standby and commercial letters of credit. To varying degrees, these instruments involve elements of credit and interest rate risk in excess of the amount recognized in the statement of financial position. The Bank's exposure to credit loss in the event of non-performance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. At December 31, 2000 and 1999, the Bank had commitments of approximately $35,663,000 and $27,148,000, respectively.

        Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Bank upon extension of credit is based on management's credit evaluation. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, income-producing commercial properties, residential properties and properties under construction.

        Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

        The Bank is involved in various litigation. In the opinion of management and the Bank's legal counsel, the disposition of all litigation pending will not have a material effect on the Bank's financial statements.

NOTE 8—TRANSACTIONS WITH DIRECTORS

        In the ordinary course of business, the Bank has granted loans to certain directors and the companies with which they are associated. In the Bank's opinion, all loans and loan commitments to such parties are made on substantially the same terms including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons. The balance of these loans outstanding was approximately $878,000, $1,041,000, and $2,100,000, at December 31, 2000, 1999 and 1998, respectively.

        Legal fees of approximately $60,000, $94,000, and $95,000, were paid during 2000, 1999, and 1998 to a law firm with which a director of the Bank is affiliated.

NOTE 9—RISK-BASED CAPITAL ADEQUACY

        The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

F-14

        Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). Management believes, as of December 31, 2000, that the Bank meets all capital adequacy requirements to which it is subject.

        As of December 31, 2000, the most recent notification from the Office of the Comptroller of the Currency categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action (there are no conditions or events since that notification that management believes have changed the Bank's category). To be categorized as well-capitalized, the Bank must maintain minimum ratios as set forth in the table below. The following table also sets forth the Bank's actual capital amounts and ratios (dollar amounts in thousands):

					Amount of Capital Required
		Actual			For Capital Adequacy Purposes			To Be Well- Capitalized Under Prompt Corrective Provisions
		Amount		Ratio	Amount		Ratio	Amount		Ratio
As of December 31, 2000:
	Total Capital (to Risk-Weighted Assets)	$	19,360	11.25%	$	13,769	8.0%	$	17,211	10.0%
	Tier 1 Capital (to Risk-Weighted Assets)	$	17,568	10.21%	$	6,885	4.0%	$	10,327	6.0%
	Tier 1 Capital (to Average Assets)	$	17,568	9.36%	$	7,509	4.0%	$	9,386	5.0%
As of December 31, 1999:
	Total Capital (to Risk-Weighted Assets)	$	16,860	11.53%	$	11,693	8.0%	$	14,616	10.0%
	Tier 1 Capital (to Risk-Weighted Assets)	$	15,365	10.51%	$	5,847	4.0%	$	8,770	6.0%
	Tier 1 Capital (to Average Assets)	$	15,365	10.13%	$	6,067	4.0%	$	7,584	5.0%

        The Bank is restricted as to the amount of dividends which can be paid. Dividends declared by national banks that exceed the net income (as defined) for the current year plus retained net income for the preceding two years must be approved by the OCC. The Bank may not pay dividends that would result in its capital levels being reduced below the minimum requirements shown above.

NOTE 10—STOCK OPTION PLAN

        At December 31, 2000, the Bank had a fixed option plan under which 123,765 shares of the Bank's common stock, retroactively adjusted for stock splits, may be issued at not less than 100% of the fair value at the date the options are granted. The Bank applies APB Opinion No. 25 and related Interpretations in accounting for its plans. Accordingly, no compensation cost has been recognized for its fixed stock option plans.

        The fair value of each option granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions; risk-free rates of 6% in 2000, 5.0% in 1999 and 4.5% in 1998, volatility of 5% and expected lives of 5 years in 2000 and 1999 and three years in 1998. The weighted-average fair value of options granted was $5.10 in 2000, $5.74 in 1999 and $5.94 in 1998.

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        A summary of the status of the Bank's fixed stock option plan, retroactively adjusted for the stock split, as of December 31, 2000, 1999, and 1998 and changes during the years ending on those dates is presented below:

	2000				1999				1998
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding at Beginning of Year	106,786		$	16.39	97,500		$	15.95	41,935	$	10.35
Forfeited	(3,308	)		20.95	(3,472	)		18.57	—
Granted	3,000			20.25	12,758			20.31	55,565		20.19
Outstanding at End of Year	106,478			16.39	106,786			16.39	97,500		15.95

        The following table summarizes information about fixed options outstanding at December 31, 2000:

	Options Outstanding				Options Exercisable
Exercise Price	Number Outstanding	Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
$10.00 - $13.00	41,934	5.1 Years	$	10.35	36,876	$	10.37
$19.00 - $22.00	64,544	7.7 Years		20.32	36,637		19.96
	106,478	6.6 Years		16.39	73,513		15.32

        Had the Bank determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123, the Bank's net income would have been reduced to the following pro forma amount:

			2000		1999		1998
Net Income:
	As Reported		$	2,120,078	$	1,616,171	$	1,253,891
	Pro Forma			2,053,409		1,558,190		1,214,722
Per Share Data:
	Net Income—Basic
		As Reported		2.42		1.84		1.43
		Pro Forma		2.35		1.78		1.38
	Net Income—Diluted
		As Reported		2.36		1.80		1.39
		Pro Forma		2.29		1.74		1.35

NOTE 11—STOCK DIVIDEND

        The Bank issued 5% stock dividends in 2000, 1999, and 1998. All references in the accompanying financial statements and notes to the financial statements to the number of common shares and per share amounts have been restated to reflect the stock dividends.

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NOTE 12—EARNINGS PER SHARE (EPS)

        The following is a reconciliation of net income and shares outstanding to the income and number of share used to compute EPS:

			2000			1999			1998
			Income		Shares	Income		Shares	Income		Shares
Net Income as Reported			$	2,120,078		$	1,616,171		$	1,253,891
Shares Outstanding at Year End					877,404			877,404			877,404
		Used in Basic EPS		2,120,078	877,404		1,616,171	877,404		1,253,891	877,404
Dilutive Effect of Outstanding
	Stock Options				20,285		—	19,720		—	22,011
		Used in Dilutive EPS	$	2,120,078	897,689	$	1,616,171	897,124	$	1,253,891	899,415

NOTE 13—FAIR VALUE OF FINANCIAL INSTRUMENTS

        The fair value of a financial instrument is the amount at which the asset or obligation could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument. Because no market value exists for a significant portion of the financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature, involve uncertainties and matters of judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

        Fair value estimates are based on financial instruments both on and off the balance sheet without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Additionally, tax consequences related to the realization of the unrealized gains and losses can have a potential effect on fair value estimates and have not been considered in many of the estimates.

        The following methods and assumptions were used to estimate the fair value of significant financial instruments:

Financial Assets

        The carrying amounts of cash, short term investments, due from customers on acceptances, and Bank acceptances outstanding are considered to approximate fair value. Short term investments include federal funds sold, securities purchased under agreements to resell, and interest bearing deposits with Banks. The fair values of investment securities, including available for sale, are generally based on quoted market prices. The fair value of loans are estimated using a combination of techniques, including discounting estimated future cash flows and quoted market prices of similar instruments where available.

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Financial Liabilities

        The carrying amounts of deposit liabilities payable on demand, commercial paper, and other borrowed funds are considered to approximate fair value. For fixed maturity deposits, fair value is estimated by discounting estimated future cash flows using currently offered rates for deposits of similar remaining maturities. The fair value of long term debt is based on rates currently available to the Bank for debt with similar terms and remaining maturities.

Off-Balance Sheet Financial Instruments

        The fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements. The fair value of these financial instruments is not material.

        The estimated fair value of financial instruments at December 31, 2000 and 1999 are summarized as follows (dollar amounts in thousands):

		2000				1999
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial Assets
	Cash and Due From Banks	$	12,188	$	12,188	$	7,878	$	7,878
	Federal Funds Sold		2,800		2,800		300		300
	Investment Securities		5,504		5,504		7,259		7,259
	Loans		164,044		164,179		133,459		133,514
	Federal Reserve Bank and Federal Home Loan Bank Stock		261		261		586		586
Financial Liabilities
	Deposits		171,610		171,629		135,925		135,931
	Federal Funds Purchases		—		—		3,500		3,500

NOTE 14—SUBSEQUENT EVENTS

Stock Dividend

        In June 2001, the Bank declared a 5% stock dividend. All earning per share amounts have been restated to reflect this stock dividend.

Proposed Merger

        On August 22, 2001, the Bank announced the signing of a definitive merger agreement ("the Agreement") whereby First Community Bancorp will acquire all of the outstanding common stock of the Bank.

        The Agreement provides that the holders of the outstanding common shares and options to purchase common shares of the Bank will be paid $37.15 per share, for a total purchase price of $36.6 million. The merger is subject to standard conditions, including the approval of the shareholders of the Bank and bank regulatory agencies. The transaction is expected to close in the first quarter of 2002.

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QuickLinks

INDEPENDENT AUDITORS' REPORT
PACIFIC WESTERN NATIONAL BANK STATEMENTS OF FINANCIAL CONDITION DECEMBER 31, 2000 and 1999
PACIFIC WESTERN NATIONAL BANK STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, and 1998
PACIFIC WESTERN NATIONAL BANK STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, and 1998
PACIFIC WESTERN NATIONAL BANK STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, and 1998
PACIFIC WESTERN NATIONAL BANK NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, and 1998